DISPUTE SETTLEMENT: DISPUTE DS418

Dominican Republic — Safeguard Measures on Imports of Polypropylene Bags and Tubular Fabric


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.

  

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One-page summary of key findings of this dispute
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Current status  back to top

 

Key facts  back to top

Short title:
Complainant:
Respondent:
Third Parties:
Agreements cited:
(as cited in request for consultations)
Request for Consultations received:
Panel Report circulated: 31 January 2012

  

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 El Salvador.  (See also DS415, DS416 and DS417)

On 19 October 2010, El Salvador requested consultations with the Dominican Republic concerning the provisional and definitive safeguard measures imposed by the Dominican Republic on imports of polypropylene bags and tubular fabric and the investigation that led to the imposition of those measures.  The products at issue are classified under subheadings 5407.20.20, 6305.33.10 and 6305.33.90 of the Dominican Republic General Tariff.

El Salvador is concerned about certain aspects of the safeguard measures and the underlying investigation.  In particular, El Salvador alleges that these measures appear to be inconsistent with Articles 2.1, 2.2, 3.1, 3.2, 4.1(a), 4.1(c), 4.2(a), 4.2(b), 4.2(c), 5.1, 6, 9.1, 11.1(a) and 12.3 of the Agreement on Safeguards, and Article XIX:1(a) of the GATT 1994.

On 22 October 2010, Panama requested to join the consultations.  On 25 October 2010, Guatemala requested to join the consultations.  On 26 October 2010, Costa Rica and Honduras requested to join the consultations.  Subsequently, the Dominican Republic informed the DSB that it had accepted the requests of Costa Rica, Guatemala, Honduras and Panama to join the consultations. On 20 December 2010, El Salvador requested the establishment of a panel. At its meeting on 25 January 2011, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 7 February 2011, the DSB agreed to establish a single panel, pursuant to Article 9.1 of the DSU, to examine this complaint and also DS415, DS416 and DS417.  China, Colombia, the European Union, Panama, Nicaragua, Turkey and the United States reserved their third party rights. Subsequently, Costa Rica, Guatemala and Honduras reserved their third party rights. On 1 March 2011, Costa Rica, El Salvador, Guatemala and Honduras jointly requested the Director-General to determine the composition of the panel.  On 11 March 2011, the Director‑General composed the panel.

On 6 September 2011, the Chairman of the panel informed the DSB that the timetable adopted by the panel after consultations with the parties to the dispute envisaged that the final report shall be issued to parties by 11 November 2011. The panel expected to conclude its work within that timeframe.  On 21 November 2011, the Chairman of the panel informed the DSB that, after having consulted with the parties, the panel decided that it would issue its final report to the parties on 23 November 2011.  The final report would be circulated to Members upon translation, which was expected to be completed by early February 2012 at the latest.

On 31 January 2012, the panel report was circulated to Members.

Summary of key findings

The measures at issue in this dispute were the provisional and definitive duties imposed by the Dominican Republic on imports of polypropylene bags and tubular fabric, as well as the underlying investigation that led to the adoption of the duties and certain alleged procedural omissions.

On the issue of the applicability of GATT Article XIX and the Safeguards Agreement, the Panel concluded that the provisional and definitive duties are safeguards, since they have suspended the Dominican Republic's obligations under GATT Articles I:1 (the most-favoured nation obligation, because certain origins -Colombia, Indonesia, Mexico and Panama- were excluded from its application) and II:1(b) (since they have imposed a tariff surcharge, different from an ordinary customs duty, which was not set forth in the Dominican Republic's GATT Schedule).  After concluding that GATT Article XIX and the Safeguards Agreement were applicable to this dispute, the panel addressed the substantive claims raised by the complainants.

The panel found that the Dominican Republic acted inconsistently with its obligations under Article XIX:1(a) of the GATT 1994 and Articles 3.1, 4.2(c) and 11.1(a) of the Safeguards Agreement because the report published by the competent authorities failed to provide an explanation of the existence of unforeseen developments and of the effect of the obligations of the GATT 1994.

The panel found that the Dominican Republic acted inconsistently with its obligations under Articles 2.1 and 4.1(c) of the Safeguards Agreement and Article XIX:1(a) of the GATT 1994, by excluding certain products from the definition of the domestic directly competitive product, and certain producers of the like or directly competitive products, for the purpose of defining the domestic industry.

The panel rejected the complainants' claim that the Dominican Republic acted inconsistently with its obligations under Articles 2.1, 3.1, 4.2(a) and 4.2(c) of the Safeguards Agreement and Article XIX:1(a) of the GATT 1994 in its determination on the increase in imports in absolute terms and exercised judicial economy with respect to additional claims of violation with respect to the determination on the increase in imports in relative terms.

The panel found that the Dominican Republic acted inconsistently with its obligations under Articles 2.1, 3.1, 4.1(a), 4.2(a) and 4.2(c) of the Safeguards Agreement and Article XIX:1(a) of the GATT 1994 by failing to provide reasoned and adequate explanations with respect to the existence of serious injury.

The panel rejected the complainants' claim that the Dominican Republic acted inconsistently with its obligations under Articles 2.1, 2.2, 3.1, 4.2, 6 and 9.1 of the Safeguards Agreement by failing to conduct a new analysis to determine the existence of increase in imports, serious injury and causation (excluding imports from Colombia, Indonesia, Mexico and Panama).

The panel found that the Dominican Republic acted inconsistently with its obligations under Article 9.1 of the Safeguards Agreement by failing to take all reasonable steps to exclude Thailand, as a developing country, from the application of the provisional and definitive safeguard measures.

The panel rejected the complainants' claim that the Dominican Republic acted inconsistently with its obligations under Articles XIX:2 of the GATT 1994 and Article 12.1(c) of the Safeguards Agreement by failing to properly notify the definitive safeguard measure.  The panel also rejected the complainants' claim that the Dominican Republic acted inconsistently with its obligations under Articles XIX:2 of the GATT 1994 and Articles 8.1 and 12.3 of the Safeguards Agreement by failing to provide the complainants with an adequate opportunity to carry out prior consultations and to obtain an adequate means of trade compensation.

At its meeting on 22 February 2012, the DSB adopted the panel report.

 

Implementation of adopted reports

At the DSB meeting o n 23 March 2012, the Dominican Republic informed the DSB that it intends to immediately implement the DSB recommendations and rulings in a manner that respects its WTO obligations.  On 13 April 2012, the parties noted for the record that the Dominican Republic had made a statement at the DSB meeting on 23 March 2012 that it would proceed with the implementation of the DSB recommendations immediately, and in any case before 30 April 2012.  On 7 May 2012, the Dominican Republic informed the DSB that it has been complying with the DSB recommendations since 21 April 2012 by lifting the safeguard measure that was the subject of this dispute, and by establishing the MFN tariff at the level that was in place before the application of the above-mentioned safeguard.

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