Dispute Settlement Body 23 January 2004

DSB establishes two panels to examine US and EC measures on Korean semiconductors

At its meeting on 23 January 2004, the Dispute Settlement Body established two panels to examine Korea's separate complaints against the United States (DS296) and the European Communities (DS299) concerning, respectively, countervailing duty investigation and countervailing measures on Korean semiconductors.

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This summary has been prepared by the WTO Secretariats Information and Media 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 Bodys meetings.

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DS136 & DS162: United States Anti-dumping Act of 1916

The United States reported that legislation repealing the 1916 Act was pending in both the US Senate and the US House of Representatives and that the House legislation had been scheduled for consideration for action this month.

Japan urged the US Administration to secure passage of bills repealing the 1916 Act during the second session of the 108th Congress. Japan added that Congress must pass the repealing bills with proper retroactive effect, since Japanese companies involved in cases brought under this Act incurred substantial damages. Japan also stated that it had not yet made a final decision on whether to reactivate the arbitration on the amount of proposed sanctions.

The EC commented that the repealing bills mentioned in the US report had been pending for months and that discussion on them had not even started. The EC said that two years had passed since the expiry of the implementation period and that there still was no sign of implementation. The EC added that the failure of the US to implement caused substantial costs to EC companies involved in lawsuits based on the 1916 Act.

DS176: United States Section 211 Omnibus Appropriations Act of 1998

The US reminded the DSB that the US and EC had agreed on 19 December 2003 to extend the US' implementation time until 31 December 2004. The US added that it would continue to work with the US Congress to resolve this matter.

The EC confirmed the extension of the implementation time and noted that on 9 December 2003 a bill had been introduced in the Senate to repeal Section 211 as part of a whole scheme of measures that would ensure an effective protection of intellectual property rights both in Cuba and in the US. The EC said that this offered a basis to resolve this dispute to the benefit of all.

Cuba said that the US' non-compliance reflected a lack of political will.

DS184: United States Anti-dumping measures on certain hot-rolled steel products from Japan

The US recalled that, at its meeting on 10 December 2003, the DSB had extended the reasonable period of time to implement until 31 July 2004. The US added that the US Administration would continue to work with the US Congress to address the recommendations and rulings of the DSB.

Japan confirmed that the implementation time had been extended to 31 July 2004 and strongly urged the US to comply.

DS207: Chile Price band system and safeguard measures relating to certain agricultural products

Chile said that on 16 December it had introduced a new price band system which reflected the recommendations and rulings of the DSB. Chile noted, however, Argentina's disagreement on the compliance of this new system and announced that the two governments had signed a procedural agreement in case Argentina wanted to launch a "review of implementation".

Argentina confirmed that it did not believe that Chile had complied and that a procedural agreement had been reached. Argentina added that, according to the agreement, it would in due time request consultations with Chile.

DS217 & DS234: United States Continued dumping and subsidy offset act of 2000

The US reported that, on 19 June 2003, legislation to bring the Offset Act of 2000 into conformity with WTO rules had been introduced in the US Senate and that in addition the US Administration had proposed repeal of this Act in its budget proposal for fiscal year 2004. The US stated that this remained the position of the US Administration.

Canada expressed disappointment and said that the US had had ample time 11 months to implement. Canada said that US$ 800 million had been disbursed under this measure and that these payments were provided directly to US companies that competed against exporters in Canada and elsewhere. Canada added that approximately US$ 1.7 billion in cash deposits had been collected by the US from Canadian exporters in one industry alone and that these deposits remained at risk of being disbursed in the future. Canada said that in the circumstances it had to seek authorization from the DSB for retaliation and that along with seven other WTO members, its request would be considered by the DSB on 26 January 2004.

Australia noted with regret the US' inability to comply by 27 December 2003 and encouraged US' efforts to achieve compliance.

Chile regretted the US' lack of implementation and said that along with other co-complainants it would request authorization to suspend concessions. Chile added that it hoped to avoid using this last recourse.
The EC expressed worry at the increasing number of disputes where the US had not implemented. The EC said that the total amount of payments under the Byrd amendment amounted now to around US$800 million and that in these circumstances it had decided to preserve its rights by seeking authorisation to suspend concessions to the US.

Japan said that it too would request authorization from the DSB to suspend concessions and expressed hope that the US would take seriously the fact that eight members had no other choice because of the US' non-compliance.
Korea complained that non-compliance undermined the credibility of the WTO and announced that it would also request authorization for retaliation at the special DSB meeting of 26 January 2004.

India said that it was encouraged by the US Administration's proposed repeal of the amendment but that it was disappointed that it had not been done within the implementation time. India said that it would request authorization to suspend concessions.

Brazil and Mexico made similar comments.

China, a third party in this case, urged the US to implement in a timely manner.


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Panel requests

DS296: United States Countervailing duty investigation on dynamic random access memory semiconductors (DRAMS) from Korea

For the second time, Korea requested the establishment of a panel regarding the US' countervailing duty order against DRAMS originating in Korea.

The US said that it was confident that the panel would find the determinations made by its authorities consistent with WTO obligations.
The DSB agreed to establish a panel and the following members requested third-party rights: Japan, EC, China, Chinese Taipei.

DS299: European Communities Countervailing measures on dynamic random access memory chips from Korea

For the second time, Korean requested the establishment of a panel regarding the EC's countervailing measures on DRAMS from Korea.

The EC mentioned that the US had come to the very same conclusions as the EC on the subsidization of the semiconductor industry in Korea. The EC added that it was certain that its measures would be found fully WTO compatible.

The DSB agreed to establish a panel and the following members requested to be third parties: Japan, United States, China and Chinese Taipei.


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Other business

Argentina announced that in accordance with the implementation time given to it in the case "Argentina: Definitive safeguard measure on imports of preserved peaches", as of 31 December 2003 its safeguard measure had ceased to be in effect.


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Next meeting

A special meeting of the DSB will take place on 26 January 2004. The next regular meeting of the DSB will take place on 17 February 2004.

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