DSB established a panel on China's tax refunds case

On 31 August 2007, the DSB agreed to establish a single panel to examine the complaints by Mexico and the US against China on tax refunds.

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This summary has been prepared by the WTO Secretariat’s 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 Body’s meetings.

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Panel established 

DS358 & DS359: China — Certain measures granting refunds, reductions or exemptions from taxes and other payments

At the second requests from Mexico (WT/DS359/13) and the US (WT/DS358/13), the DSB agreed to established a single panel. Both complainants argued that China was providing subsidies to its industry in the form of tax refunds and reductions that appeared to be prohibited by WTO rules.

The US stated it was concerned by China's measures. The US said it would have preferred to reach a mutually satisfactory solution but was unable to do so. Therefore the US requested the establishment of a single panel.

Mexico declared it shared the arguments made by the US and regretted to have to request the establishment of a panel. Mexico reiterated its request to establish a single panel. Mexico stated it would continue to seek a negotiated solution with China.

China declared it was disappointed that the US and Mexico would pursue this matter further despite the progress made through consultations. China said it showed good faith to find a positive solution to this dispute and was still ready to do so. China said it would defend its position and remained confident its measures were consistent with WTO obligations.

The countries that have reserved their third party rights are Australia, Canada, the EC, Turkey, Japan, Chinese Taipei and Chile.


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Request for panel establishment

DS362: China — Measures affecting the protection and enforcement of intellectual property rights

The US requested a panel for the first time (WT/DS362/7) to examine China's measures on intellectual property rights (IPR).

The US declared the enforcement of intellectual property rights was insufficient in China and was concerned about the level of IPR protection. The US said China's measures were inconsistent with the TRIPS Agreement. The US declared it discussed this issue with China in consultations but this did not resolve the dispute. The US said it was therefore requesting the establishment of a panel.

China regretted that the US had requested a panel. China said it showed great sincerity during consultations and was willing to settle this dispute with a mutually satisfactory solution. China stated that it took its commitment very seriously and had set up a comprehensive legal system of IPR protection. China said it strongly believed that the measures attacked in this dispute were consistent with WTO rules. China added it was opposed to attempts by members to impose on developing countries, through the dispute settlement system, any extra obligations going beyond provisions contained in the TRIPS Agreement. China concluded it was not in a position to agree to the establishment of a panel.

DS217: United States — Continued dumping and subsidy off set act of 2000

Japan announced it would continue to suspend concessions to the US for the amount of USD48.18 million as of 1st September 2007.

Japan declared that the implementation by the US of the DSB's recommendations was not complete. Japan said duties collected on imports are still distributed to the US industry.

The US declared it had taken all actions to implement the DSB ruling. The US said it regretted and was perplexed at Japan's decision to continue to impose sanctions.


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Implementation of DSB ruling 

DS331: Mexico — Anti-dumping duties on steel pipes and tubes from Guatemala

Mexico notified the DSB of its intention to implement the DSB recommendations within a reasonable period of time (WT/DS331/6).

Mexico stated it intended to implement the DSB recommendations in conformity with its WTO obligations with a reasonable period of time. Mexico said it engaged consultations with Guatemala .

Guatemala declared it was waiting for Mexico to provide a formal proposal within a reasonable period of time. Guatemala said it would be available to continue negotiations in order to reach a speedy and mutually satisfactory solution.

DS335: US — Anti-dumping measure on shrimp from Ecuador

The US announced it had implemented the DSB's recommendations in this dispute.

The US declared it had reached an agreement with Ecuador and it would not contest Ecuador's claim regarding the inconsistency with WTO rules of the anti-dumping duty calculation conducted by the US authorities. The US added it had implemented the DSB ruling within the agreed 6 months reasonable time period which expired on 20 August 2007.

Ecuador said the US revoked the anti dumping order within the agreed reasonable period of time. Ecuador concluded this case was an example of prompt compliance with DSB rulings.

DS268 & DS282: US — Sunset reviews of anti-dumping measures on oil country tubular goods from Argentina / US — Sunset reviews of anti-dumping measures on oil country tubular goods from Mexico

The US announced it had brought its measures into conformity with the DSB's recommendations in both cases by revoking the anti-dumping orders imposed on Mexico and Argentina in June 2007.

Argentina expressed satisfaction at the revocation of the anti-dumping order, but said the US industry challenged this decision before the Court of International Trade. Argentina said it would closely follow any new developments in this case and expected the Court would uphold the revocation order.

Mexico welcomed the US decision to revoke the anti-dumping order and hoped it would put an end to the dispute. Mexico added that the US industry did not appeal the revocation of the order.


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Nomination of Appellate Body members 

The DSB chair announced that nominations to fill the four positions in the Appellate Body had been received from Pakistan, China, the Philippines, Japan, Korea and Benin. The deadline to propose candidates expired on 31 August 2007.

He added that the Selection Committee would make its recommendation by 5 November 2007 and the DSB would take a final decision on 19 November 2007.


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Next meeting 

The next meeting of the DSB will take place on 25 September 2007.

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