WTO news: what’s been happening in the WTO

Dispute Settlement Body 12 December 2000

Canada’s retaliation against Brazil approved in aircraft case

The WTO Dispute Settlement Body on 12 December 2000 agreed to let Canada impose trade sanctions of up to C$344.2 million per year on imports from Brazil in retaliation for Brazil’s failure to implement a ruling on aircraft export subsidies.

The DSB also set up a new panel to hear the EU’s complaint about Chilean restrictions on unloading swordfish in its ports.

Retaliation approved Back to top

Case DS46: — Brazil: Export financing programme for aircraft

The DSB authorized retaliatory sanctions (officially known as “suspension of concessions”) totalling C$344.2 million per year to be imposed by Canada against imports from Brazil because Brazil has failed to implement a ruling on export subsidies for aircraft.

Canada based its request on an arbitration report WT/DS46/ARB which set the amount of “appropriate countermeasures” at this level after Canada first asked in May 2000 to impose retaliatory sanctions totalling C$700 million per year.

In a statement on “implementation of the DSB recommendations WT/DS46/AB/R ”, Brazil announced that on 6 December 2000 it had enacted new regulations for its aircraft financing programme (called PROEX) that brought it in full conformity with Brazil’s WTO obligations.

Canada responded that, from its initial assessment, Brazil’s proposal did not constitute compliance with WTO agreements.

Japan commented that the WTO Dispute Settlement Understanding (DSU), the agreement that governs the dispute process, provides no appropriate mechanism for dealing with how to examine whether a government’s new measures comply after sanctions have been authorized.

Panel set up in a new case Back to top

Case DS193: — Chile: Measures affecting the transit and importation of swordfish

Since this was the second request from the EU, the DSB automatically agreed to establish a panel to hear this case.

The EU complains that its “fishing vessels operating in the South East Pacific are not allowed under Chilean legislation to unload their swordfish in Chilean ports either to land them for warehousing or to transship them onto other vessels. Consequently Chile makes transit through its ports impossible for swordfish. This prohibition renders also impossible the importation of the affected catches into Chile.” This, the EU alleges, violates Article V of the General Agreement on Tariffs and Trade, which deals with freedom of transit, and GATT Article XI, which deals with eliminating quantitative restrictions.

In the meeting, the EU reiterated its preference for a mutually-agreed solution and hoped an agreement on sustainable fishing of swordfish would be reached with Chile before the panelists are appointed. The EU said it had put forward a compromise proposal at the end of November.

Chile said it had responded to the proposal and awaited EU’s comments. Chile also said it hoped to reach an agreement with the EU.

The following countries requested to be third parties: Australia, Canada, Ecuador, Iceland, India, Norway and the United States. 

First time requests for panels to be set up Back to top

Because this was a first-time request and it was opposed, a panel was not set up.

Case DS204: — Mexico: Measures affecting telecommunications services

Mexico blocked the US’ first request for the establishment of a panel, saying that the request did not indicate clearly the trade measures at stake. The three-page US request is document WT/DS204/2.

Status reports: Surveillance of implementation of recommendations adopted by the DSB Back to top

Case DS156 — Guatemala — Definitive anti-dumping measures on grey Portland cement from Mexico

Guatemala announced it had removed the anti-dumping measures in question and thus applied without delay the DSB recommendations.

Mexico thanked Guatemala for its information and its speed.

Case DS27 — European Communities: Regime for the importation, sale and distribution of bananas

The EU reported that it was finalizing its internal decision-making process with a view to implementing rapidly a WTO-compatible new import regime, based on a “first come-first served” system (see document WT/DS27/51/Add.14).

Colombia, Panama, the United States, Guatemala, Honduras, and Ecuador expressed concern that the EU was moving very slowly and that the proposal would not resolve the issue.

Cases DS76 — Japan: Measures affecting agricultural products

Japan (document WT/DS76/11/Add.10) and the US said they were still consulting in an effort to sort out technical questions to resolve this case.

Case DS103 — Canada: Measures affecting the importation of milk and the exportation of dairy products

Canada reported (document WT/DS103/12/Add.5 and WT/DS113/12/Add.5) that new consultations with New Zealand and the United States resulted in the extension of the implementation deadline from 31 December 2000 to 31 January 2001.

New Zealand expressed concern about the new export mechanisms for dairy products put into place by Canada to implement the DSB recommendations.

The United States said it disagreed with Canada about whether the actions taken to implement the DSB recommendations are adequate.

Case DS90 — India: Quantitative restrictions on imports of agricultural, textile and industrial products

India (document WT/DS90/16/Add.4) repeated its intention to implement by the deadline of 1 April 2001.

Case DS34 — Turkey: Restrictions on imports of textile and clothing products

Turkey (document WT/DS34/12/Add.4) informed the DSB that Turkish authorities had intensified their work with the intention of finding the most appropriate solution.

India regretted that Turkey did not give any clear indication of the details of the progress made in implementing the DSB recommendations. India also expressed concern regarding the restrictions reportedly imposed recently by the Turkish authorities on imports of fabric from India.

Case DS87 — Chile: Taxes on alcoholic beverages

Chile (document WT/DS/87/17 and WT/DS/110/16) said it was currently drafting a bill to fulfill the DSB recommendations and that consultations had been held with the Chilean private sector and account had been taken of WTO Members’ views.

Agenda items withdrawn Back to top

Case DS141 — European Communities: Anti-dumping duties on imports of cotton-type bed linen from India

This item was removed from the agenda as the EU appealed the panel report.

The next regular meeting will be on 1 February 2001.

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