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
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See also: One-page summary of key findings of this dispute
Consultations
Joint complaint by Canada and Mexico.
On 21 December 2000 and 21
May 2001 respectively, the complainants requested consultations with the
US concerning the amendment to the Tariff Act of 1930 signed on 28
October 2000 with the title of “Continued Dumping and Subsidy
Offset Act of 2000” (the “Act”) usually referred to as “the Byrd Amendment”. According to the complainants the Act is
inconsistent with the obligations of the United States under several
provisions of the GATT, the AD Agreement, the SCM Agreement, and the WTO
Agreement. In particular, the Act is alleged to be inconsistent with the
obligations of the United States under: (i) Article 18.1 of the ADA in
conjunction with Article VI:2 of the GATT and Article 1 of the ADA; (ii)
Article 32.1 of the SCM Agreement, in conjunction with Article VI:3 of
the GATT and Articles 4.10, 7.9 and 10 of the SCM Agreement; (iii)
Article X(3)(a) of the GATT; (iv) Article 5.4 of the ADA and Article
11.4 of the SCM Agreement; (v) Article 8 of the ADA and Article 18 of
the SCM Agreement; (vi) Article 5 of the SCM Agreement; and (vii)
Article XVI:4 of the Marrakesh Agreement establishing the WTO, Article
18.4 of the ADA and Article 32.5 of the SCM Agreement.
On 12 July 2001, the complainants in dispute
WT/DS217 requested the establishment of a panel. At its meeting on 24
July 2001, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
Further to a
second request to establish a panel by the complainants, the DSB
established a panel at its meeting on 23 August 2001. Argentina; Canada;
Costa Rica; Hong Kong, China; Israel; Norway and Mexico reserved their
third-party rights.
On 10 August 2001, Canada and Mexico requested
the establishment of a panel. At its meeting on 23 August 2001, the DSB
deferred the establishment of a panel. Further to a second request to
establish a panel by Canada and Mexico, the DSB established a panel at
its meeting on 10 September 2001. The DSB also agreed, in accordance
with Article 9 of the DSU, that the panel established to examine the
complaint by Australia, Brazil, Chile, EC, India, Indonesia, Japan,
Korea and Thailand (WT/DS217) on 23 August 2001 would also examine the
complaint by Canada and Mexico (WT/DS234).
On 15 October 2001, all 11 complainants
requested the Director-General to determine the composition of the
Panel. On 25 October 2001, the Panel was composed. On 17 April 2002, the
Chairman of the Panel informed the DSB that the Panel would not be able
to complete its work in six months since the parties were given the
maximum amount of time for preparing submissions and oral statements.
The Panel expected to complete its work by July 2002.
On 16 September 2002, the Panel Report was
circulated to Members. The Panel concluded that the CDSOA was
inconsistent with Articles 5.4, 18.1 and 18.4 of the Anti-Dumping
Agreement, Articles 11.4, 32.1 and 32.5 of the Subsidies Agreement,
Articles VI:2 and VI:3 of the GATT 1994, and Article XVI:4 of the WTO
Agreement. The Panel rejected the complaining parties’ claims that the
CDSOA was inconsistent with Articles 8.3 and 15 of the Anti-Dumping
Agreement, Articles 4.10, 7.9 and 18.3 of the Subsidies Agreement, and
Article X:3(a) of the GATT 1994. They also rejected Mexico’s claim that
the CDSOA violated SCM Article 5(b). The CDSOA is a new and complex
measure, applied in a complex legal environment. In concluding that the
CDSOA was in violation of the abovementioned provisions, the Panel had
been confronted by sensitive issues regarding the use of subsidies as
trade remedies. If Members were of the view that subsidisation is a
permitted response to unfair trade practices, the Panel suggested that
they clarify this matter through negotiation. Pursuant to Article 3.8 of
the DSU, the Panel concluded that to the extent that the CDSOA was
inconsistent with the provisions of the Anti-Dumping Agreement, the SCM
Agreement, and the GATT 1994, the CDSOA nullified or impaired benefits
accruing to the complaining parties under those agreements. The Panel
recommended that the DSB request the United States to bring the CDSOA
into conformity with its obligations under the Anti-Dumping Agreement,
the SCM Agreement, and the GATT of 1994 by repealing the CDSOA.
On 18 October 2002, the United States notified
its decision to appeal to the Appellate Body certain issues of law
covered in the Panel Report and certain legal interpretations developed
by the Panel. On 13 December 2002, the Appellate Body informed the DSB
that it was not able to circulate the Report within 60 days from the
appeal and that the Report was to be circulated no later than 16 January
2003. On 16 January 2003, the Appellate Body circulated its Report. The
Appellate Body:
- upheld the finding of the Panel, in paragraphs 7.51 and 8.1 of
the Panel Report, that the CDSOA is a non-permissible specific action
against dumping or a subsidy, contrary to Article 18.1 of the Anti-Dumping
Agreement and Article 32.1 of the SCM Agreement;
- consequently upheld the Panel’s finding, in paragraphs 7.93 and
8.1 of the Panel Report, that the CDSOA is inconsistent with certain
provisions of the Anti-Dumping Agreement and the SCM
Agreement and that, therefore, the United States has failed to
comply with Article 18.4 of the Anti-Dumping Agreement, Article
32.5 of the SCM Agreement and Article XVI:4 of the WTO
Agreement;
- upheld the Panel’s finding, in paragraph 8.4 of the Panel
Report, that, pursuant to Article 3.8 of the DSU, to the extent that
the CDSOA is inconsistent with provisions of the Anti-Dumping
Agreement and the SCM Agreement, the CDSOA nullifies or
impairs benefits accruing to the Complaining Parties under those
Agreements;
- reversed the Panel’s findings, in paragraphs 7.66 and 8.1 of the
Panel Report, that the CDSOA is inconsistent with Article 5.4 of the Anti-Dumping
Agreement and Article 11.4 of the SCM Agreement;
- rejected the Panel’s conclusion, in paragraph 7.63 of the Panel
Report, that the United States may be regarded as not having acted in
good faith with respect to its obligations under Article 5.4 of the Anti-Dumping
Agreement and Article 11.4 of the SCM Agreement; and
- rejected the claim of the United States that the Panel acted
inconsistently with Article 9.2 of the DSU by not issuing a separate
panel report in the dispute brought by Mexico.
The Appellate Body recommended that the DSB
request the United States bring the CDSOA into conformity with its
obligations under the Anti-Dumping Agreement, the SCM
Agreement, and the GATT 1994. Further to Canada’s request, the DSB
adopted the Appellate Body Report and the Panel Report, as modified by
the Appellate Body, at its meeting on 27 January 2003.
Implementation of adopted reports
On 14 March 2003,
the complainants requested arbitration under Article 21.3(c) of the DSU to
determine the reasonable period of time for implementation by the US of
the DSB recommendations. On 24 March 2003, the complainants requested the
Director-General to appoint the arbitrator in consultation with the
parties pursuant to footnote 12 of the DSU. On 4 April 2003, the
Director-General appointed an Arbitrator. On 13 June 2003, the Arbitrator
issued its award to the parties. The Arbitrator concluded that the “reasonable period of time” for the United States to implement
the DSB’s recommendations and rulings should be 11 months from the date of
the DSB’s adoption of the Panel and Appellate Body Reports in this
dispute. The reasonable period of time will therefore expire on 27
December 2003.
On 14 January 2004, the DSB was
informed that the United States had mutually agreed to modify the
reasonable period of time with Thailand, Australia and Indonesia,
respectively, so as to expire on 27 December 2004.
Proceedings under Article 22 of the DSU (remedies)
On 15 January 2004, on
the grounds that the US had failed to implement the DSB recommendations
and rulings within the reasonable period of time, Brazil, Chile, the EC,
India, Japan, Korea, Canada and Mexico requested the DSB authorization to
suspend concessions pursuant to Article 22.2 of the DSU. On 23 January
2004, the US requested, in accordance with Article 22.6 of the DSU, that
the matter be referred to arbitration, since the US objected to the level
of suspension of concessions proposed by the foregoing parties. At its
meeting on 26 January 2004, the DSB decided to refer the matter to
arbitration.
On 31 August 2004, the
arbitrator circulated its decisions. The arbitrator determined:
-
It rejects the position of Brazil, Canada, Chile,
the European Communities, India, Japan, Korea and Mexico that the
level of suspension of concessions or other obligations should be
equivalent to the disbursements made by the United States under the
measure at issue, i.e., CDSOA. The Arbitrator considered that this
interpretation was not supported by the terms of Article XXIII of GATT
1994 or the DSU. The Arbitrator found it appropriate to rely on the
economic effect of the measure, as was done in previous Article 22.6
arbitrations.
-
The Arbitrator applied an economic model aimed at
assessing the effect of disbursements under the CDSOA on exports of
the above-mentioned Members to the United States, and thus came up
with a coefficient which, multiplied by the amounts disbursed by the
United States under the CDSOA in relation to anti-dumping or
countervailing duties collected on imports from each of the those
Members, gives an assessment of the economic effect of the CDSOA on
exports from each of those Members for a given period.
-
The Arbitrators’ decisions do not provide for an
actual, single value of trade not to be exceeded by the
above-mentioned Members when suspending concessions or other
obligations vis-à-vis the United States. The awards allow those
Members to suspend concessions or other obligations up to a maximum
value of trade to be calculated by multiplying the published amount of
disbursements under the CDSOA for a given year by the coefficient
calculated by the Arbitrator.
On 10 November 2004, Brazil, the
European Communities, India, Japan, Korea, Canada and Mexico requested
authorization to suspend concessions or other obligations under Article
22.7 of the DSU. At its meeting of 26 November 2004, the DSB authorized
the suspension of concessions. On 6 December 2004, Chile requested
authorization to suspend concessions or other obligations under Article
22.7 of the DSU. At is meeting of 17 December 2004, the DSB authorized the
suspension of concessions. On 23 December 2004, 7 and 11
January 2005, Australia, Thailand and Indonesia, respectively, reached
Understanding with the United States with respect to this dispute. At its
meeting of 25 January 2005, the DSB agreed to take note of these
Understandings.
On 29 April 2005, the European Communities and Canada notified the DSB that they were suspending, as of 1 May 2005, the application of concessions and related obligations under GATT 1994 on imports of certain products originating in the United States of America. The notifications from the European Communities and Canada say that, for the first year, an ad valorem additional duty of 15 per cent will be imposed on certain products originating in the United States of America, which would cover, over one year, a total value of trade that does not exceed US$ 27.81 million (in respect of the European Communities) and US$ 11.16 million (in respect of Canada) respectively.
On 18 August 2005, Japan notified the DSB that they were suspending, as of 1 September 2005, the application of concessions and related obligations under GATT 1994 on imports of certain products originating in the United States. The notification from Japan states that, for the first year, an ad valorem additional duty of 15 per cent will be imposed on certain products originating in the United States, which would cover, over one year, a total value of trade that does not exceed US$ 52.10 million.
At the DSB meeting on 17 February 2006, the United States stated that the US Congress had approved the Deficit Reduction Act on 1 February 2006 and the President had signed the Act into law on 8 February 2006 bringing the US into conformity with its WTO obligations. Australia; Brazil; Canada; Chile; Indonesia; Hong Kong, China; India; Japan; Korea; Mexico; Thailand and the European Communities welcomed the recent steps taken by Congress towards the repeal of the CDSOA but disagreed with the United States that it had brought its measures fully into conformity with the DSB’s recommendations and rulings.
On 28 April 2006, 19 April 2007 and 3 April 2008,
the European Communities notified the DSB of the new list of products on which the additional import duty would apply, prior to the entry into force of a level of suspension of concessions.
On 22 August 2006, 23 August 2007
and 29 August 2008, Japan notified the DSB of the new list of products on which the additional import duty would apply, prior to the entry into force of a level of suspension of concessions. |
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