WTO: 2012 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.

DS316: European Communities and Certain Member States — Measures Affecting Trade in Large Civil Aircraft

The United States recalled that under Article 7.9 of the Subsidies and Countervailing Measures (SCM) Agreement, the European Union had six months from the date of adoption of the rulings to withdraw the subsidies or take appropriate steps to remove their adverse effects. The six-month period ended on 1 December 2011. The US stated that in its view the EU appeared to have failed to comply.

The US said that its consultations with the EU had failed to resolve the dispute. According to the US, the EU had introduced new subsidies. The US further recalled that, in looking at the effect of the EU subsidies, the Appellate Body had confirmed the Panel's finding that among the most plausible scenarios was that “without the subsidies, Airbus would not have existed ... and there would be no Airbus aircraft on the market. None of the sales that the subsidized Airbus made would have occurred.” (Appellate Body Report WT/DS316/AB/R, para. 1264)

The US also stated that the EU notification (WT/DS316/17) concerning the steps it had taken to comply showed that it had not changed its behaviour in any meaningful way, and that the actions the EU claimed to have taken appeared to do nothing to withdraw the subsidies or to remove their adverse effects. According to the US, the EU notification acknowledged that the largest launch aid subsidies, for the A380, remained in place. The US added that Airbus itself reported that it had received new launch aid for the A350XWB.

In conclusion, the US said that, while claiming to have complied, the EU seemed to have made the problem worse.

The EU responded by saying that it was in full compliance with the DSB's rulings as it had notified on 1 December 2011 (WT/DS316/17). In line with its sequencing agreement with the US (WT/DS316/21), the EU agreed to the establishment of a panel. The following delegations reserved their third-party rights: Australia, Canada, China, Japan and Korea.

 

DS353: United States — Measures Affecting Trade in Large Civil Aircraft

The panel and Appellate Body reports in this case were adopted by the DSB at its last meeting on 23 March. As required by dispute settlement procedures, the US was expected to inform the DSB, within 30 days of adoption, about its intentions concerning implementation.

The US stated that it intended to implement the rulings in a manner that respected US WTO obligations, and that it intended to do so within the time-frame established in Article 7.9 of the SCM Agreement.

The EU welcomed the US statement. The EU further pointed out that Article 7.9 of the SCM Agreement provided a six-month period from date of adoption for the US to take appropriate steps either to withdraw the subsidies or to remove their adverse effects. The EU said that this period would expire on 23 September 2012.

According to the EU, these subsidies had been found to cause adverse effects not only in the form of significant lost sales and the threat of losing market share, but also of price effects which had caused Airbus financial losses to the tune of billions of euros.

Next meeting of the DSB is scheduled for 24 April 2012.

 

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