This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.
See also:
> One-page summary of key findings of this dispute
> The basics: how disputes are settled in WTO
> Computer based training on dispute settlement
> Text of the Dispute Settlement Understanding
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Key facts back to top
Summary of the dispute to date back to top
The summary below was up-to-date at
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States.
On 1
February 1999, the US requested consultations with Korea in respect of a
Korean regulatory scheme that allegedly discriminates against imported
beef by inter alia, confining sales of imported beef to specialized
stores (dual retail system), limiting the manner of its display, and
otherwise constraining the opportunities for the sale of imported beef.
The US alleged that Korea imposes a mark-up on sales of imported beef,
limits import authority to certain so-called “super-groups” and
the Livestock Producers Marketing Organization (“LPMO”), and
provides domestic support to the cattle industry in Korea in amounts which
cause Korea to exceed its aggregate measure of support as reflected in
Korea’s schedule. The US contended that these restrictions apply only to
imported beef, thereby denying national treatment to beef imports, and
that the support to the domestic industry amounts to domestic subsidies
that contravene the Agreement on Agriculture. The US alleged violations of
Articles II, III, XI, and XVII of GATT 1994; Articles 3, 4, 6, and 7 of
the Agreement on Agriculture; and Articles 1 and 3 of the Import Licensing
Agreement.
On 13 April 1999, Australia requested consultations
with Korea on the same basis as the US request.
On 15 April 1999, the US requested the establishment of
a panel in respect of WT/DS161. At its meeting on 28 April 1999, the DSB
deferred the establishment of a panel.
Panel and Appellate Body proceedings
Further to a second request to
establish a panel by the US, the DSB established a panel at its meeting on
26 May 1999. Australia, Canada and New Zealand reserved their third-party
rights. Further to Australia’s request to establish a panel in respect of
WT/DS169, the DSB established a panel at its meeting on 26 July 1999.
Canada, New Zealand and the US reserved their third-party rights. At the
request of Korea, the DSB agreed that, pursuant to DSU Article 9.1, this
complaint would be examined by the same panel established in respect of
WT/DS161. On 4 August 1999, the Panel was composed. The report of the
panel was circulated to Members on 31 July 2000. The panel found that:
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a number of the contested Korean measures benefited, by
virtue of a Note in Korea’s Schedule of Concessions, from a transitional
period until 1 January 2001, by which date they had to be eliminated or
otherwise brought into conformity with the WTO Agreement.
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the requirement that the supply of beef from the
LPMO’s
wholesale market be limited to specialized imported beef stores and that
those stores bear a special sign “Specialized Imported Beef
Store” was in violation of Article III:4 of the GATT 1994, which
violation could not be justified under Article XX(d) of the GATT 1994.
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the more stringent record-keeping requirements imposed
on purchasers of imported beef were also inconsistent with Article III:4.
Certain other regulations dealing with the importation and distribution of
imported beef were likewise found to violate Article III:4.
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the LPMO’s lack of and delays in calling for tenders
and its discharge practices between November 1997 and the end of May 1998
constituted import restrictions contrary to Article XI:1 of the GATT 1994
and Article 4.2 of the Agreement on Agriculture. Moreover, the LPMO’s
calls for tenders that were made subject to distinctions between grass-fed
and grain-fed cattle, constituted, in the view of the panel, a restriction
inconsistent with Article XI:1. They also treated imports of beef from
grass-fed cattle less favourably than provided for in Korea’s Schedule,
which was in breach of Article II:1(a) of the GATT 1994.
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in addition, Korea’s domestic support for beef for 1997
and 1998 was not correctly calculated and exceeded the de minimis
level, contrary to Article 6 of the Agreement on Agriculture, and was not
included in Korea’s Current Total AMS, contrary to Article 7.2(a) of the
Agreement on Agriculture.
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Korea’s total domestic support (Current Total AMS) for
1997 and 1998 exceeded Korea’s commitment levels, as specified in Section
1, Part IV of its Schedule, contrary to Article 3.2 of the Agreement on
Agriculture.
On 11 September 2000, Korea notified its intention to
appeal certain issues of law and legal interpretations developed by the
panel. On 11 December 2000, the report of the Appellate Body was
circulated. The Appellate Body reversed the Panel’s finding on
recalculated amounts of Korea’s domestic support for beef in 1997 and
1998, as the Panel used, for these recalculations, a methodology
inconsistent with Article 1(a)(ii) and Annex 3 of the Agreement on
Agriculture; and reversed, therefore, the Panel’s following conclusions,
based on these recalculated amounts:
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that Korea’s domestic support for beef in 1997 and 1998
exceeded the de minimis level contrary to Article 6 of the
Agreement on Agriculture;
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that Korea’s failure to include Current AMS for beef in
Korea’s Current Total AMS was contrary to Article 7.2(a) of that
Agreement; and
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that Korea’s total domestic support for 1997 and 1998
exceeded Korea’s commitment levels contrary to Article 3.2 of the
Agreement on Agriculture.
The Appellate Body was unable, in view of the
insufficient factual findings made by the Panel, to complete the legal
analysis of:
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whether Korea’s domestic support for beef exceeds the de
minimis level contrary to Article 6 of the Agreement on Agriculture;
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whether the failure to include Current AMS for beef in
Korea’s Current Total AMS was contrary to Article 7.2(a) of that
Agreement; and
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whether Korea’s total domestic support for 1997 and
1998 exceeded Korea’s commitment levels contrary to Article 3.2 of the
Agreement on Agriculture.
At its meeting of 10 January 2001, the DSB adopted the Appellate Body
report and the Panel report, as modified by the Appellate Body report.
Implementation of adopted reports
At the
DSB meeting of 2 February 2001, Korea announced that it had already
implemented some elements of the DSB’s recommendations and that in order
to complete the process it would need a reasonable period of time. On 19
April 2001, the parties to the dispute notified the DSB that they had
mutually agreed that the reasonable period of time shall be 8 months, and
was thus to expire on 10 September 2001.
At the DSB meeting on 25 September 2001, Korea announced that it had
implemented the DSB’s recommendation by the deadline, i.e. 10 September.
The US indicated that it will continue to work with Korea to ensure that
the replacement measures resulted in full market access for US beef.
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