WTO: 2011 NEWS ITEMS

DISPUTE SETTLEMENT

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NOTE:
This summary has been prepared by the WTO Secretariat’s Information and External Relations Division to help public understanding about developments in WTO disputes. It is not a legal interpretation of the issues, and it is not intended as a complete account of the issues. These can be found in the reports themselves and in the minutes of the Dispute Settlement Body’s meetings.

Panel establishment

DS412: Canada — Certain Measures Affecting the Renewable Energy Generation Sector

The DSB established a panel to examine measures applied by Canada in its renewable energy sector, following Japan's second request (WT/DS412/5).

Japan said that this was a clear case of WTO-inconsistent domestic content requirements. Japan added that Ontario's feed-in-tariff programme provided for guaranteed long-term pricing, for the output of renewable energy generation facilities that contained a defined percentage of domestic content.  

Canada was disappointed that Japan had decided to make a second panel request. Canada remained confident that its legislation and the feed-in-tariff programme were consistent with WTO rules. Canada added that feed-in tariffs had been used by several WTO members and that Ontario's programme was no different. Canada supported Ontario's commitments away from coal-fired electricity generation.

Australia, Chinese Taipei, Norway, China, the EU, Korea, Honduras and the US reserved their third-party rights.

DS423: Ukraine — Taxes on Distilled spirits

The DSB established a panel to review taxes applied by Ukraine on Moldavian imported spirits following Moldova's second request (WT/DS423/4).

Moldova said that no further developments in finding a mutually convenient solution to settle the dispute had taken place since the last DSB meeting.

Ukraine regretted that Moldova had chosen panel procedures, having not given due regard to possibilities that bilateral consultations would provide. Ukraine said that this request was being put forward in the middle of an information exchange between the experts from the two parties. Ukraine remained open for further consultations with Moldova, its close and important trading neighbour.

China, the EU, Colombia and the US reserved their third-party rights.

Implementation

DS375, DS376 and DS377: European Communities and its Member States — Tariff Treatment of Certain Information Technology Products

In this dispute, the US, Japan and Chinese Taipei challenged the EU’s duties applied on three types of information technology (IT) products. The panel reports were adopted on 21 September 2010 and the EU had until 30 June 2011 to implement the DSB ruling (WT/DS375/16, WT/DS376/16, WT/DS377/14).

The EU announced that it had adopted last month final measures necessary to comply with the DSB rulings.  The EU added that these measures ensured the full and timely implementation of the DSB recommendations.

The US welcomed the progress made, to date, by the EU in implementing the DSB rulings. However, the US could not share the EU's assessment that it had brought itself into compliance with the DSB recommendations. The US said that accordingly, it had entered into a sequencing agreement with the EU (WT/DS375/17). With respect to multifunctional machines, the US said that a new tariff of 2.2% was applied by the EU on any device having a principal function of digital copying. The US said that the DSB ruling did not appear to support a new tariff on these products. For all three products at issue, the US said that the EU's measures were ambiguous.

The US added that it was not clear how European customs authorities would interpret these measures and whether, as a result, they would provide duty-free treatment to the products at issue. The US stated that EU member states themselves had already indicated that these measures were unclear. The US said that there was considerable divergence in the classification of flat panel displays in the EU and that those inconsistencies could mean that ITA (Information Technology Agreement) products would continue to be subjected to duty when entering the EU, depending on the port of entry. The US said that the ITA was an important achievement for developed and developing countries and that the duty-free obligation resulting from it had expanded trade and spurred innovation and economic developments across the globe. The US concluded that it would closely monitor the situation in the EU.

Chinese Taipei had concerns about a certain ambiguity and lack of clarity in the measures adopted by the EU.  Chinese Taipei said that the question of whether the panel's findings were properly reflected in existing measures already taken by the EU needed careful monitoring. Chinese Taipei said that there was a need for clear guidance from the EU to make sure that all the measures were in compliance with the panel's findings and that all the products at issue would be appropriately classified under the zero-tariff category among all the EU member states. Chinese Taipei looked forward to working cooperatively with the EU on the issue of its full compliance and said they had reached a sequencing agreement (WT/DS377/15).

Japan appreciated the EU's efforts to adopt these measures for the implementation of the DSB rulings within the reasonable period of time. Japan said it was not in a position to agree with the EU's claim of full compliance. Japan warned that its industry was concerned about duties still imposed by some EU member states on flat panel displays which were at issue in this dispute and fell within the scope of the EU's duty-free concession. Japan said that the regulation adopted by the EU imposed 2.2% duties for multifunctional machines having digital copying as a principal function. Japan was concerned that the revised regulation would not provide clear guidance ensuring that all the EU member states implemented duty-free treatment for all ITA products. Japan said it would carefully review the measures adopted by the EU so far and added that it had concluded a sequencing agreement with the EU (WT/DS376/17).

Appellate Body members selection process

The DSB Chair, Ambassador Johansen (Norway), reminded WTO members that, on 24 May 2011, the DSB had agreed to her proposal regarding the 2011 selection process for the appointment of two new members of the Appellate Body .

She reminded members that nominations of candidates should be submitted by 31 August 2011.

She added that the objective of the selection committee (the Director-General and the 2011 Chairpersons of the General Council, Goods Council, Services Council, TRIPS Council and the DSB — see press release on 2011 WTO chairpersons) was to make a recommendation by 10 November 2011 at the latest.

  

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Next meeting 

The next meetings of the DSB will be held on 28 July and 2 September 2011.

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