DS406: United States — Measures affecting the production and sale of clove cigarettes

In introducing its first-time request for a panel (WT/DS406/2), Indonesia said that the United States’ Section 907 (a)(1) of the Family Smoking Prevention and Tobacco Control Act of 2009 prohibited the production or sale of clove cigarettes and that, as a result, clove cigarettes produced in Indonesia may no longer be imported into the US.

Indonesia pointed out that well over 6 million Indonesians depended directly or indirectly on clove cigarette production. Prior to the Act of 2009, Indonesia produced 99 percent of clove cigarettes sold in the US. Today, Indonesia said, those sales were down to zero. Indonesia emphasised that it was not questioning the serious health risks associated with the use of tobacco products. But it could not understand the rationale for the ban on clove cigarettes while menthol cigarettes were excluded from the ban. According to Indonesia, almost all of the menthol cigarettes sold in the US were produced domestically.

Indonesia stated that on several occasions it had asked the US to share any studies that demonstrated why clove cigarettes should be banned and not menthol. To date, there had been no response from the US. Indonesia believed that the Act and its implementation by the US was inconsistent with certain WTO provisions including, but not limited to, GATT 1994 and the Agreement on Technical Barriers to Trade. Consultations with the US had failed to resolve the matter; hence Indonesia’s request for a panel.

The US said that the Act did not target Indonesian clove cigarettes nor did it single out any country. The US was confident that the Act was fully consistent with its WTO obligations. The US also mentioned that the Food and Drug Administration’s (FDA) Tobacco Products Scientific Advisory Committee was in the process of preparing a report whose findings would be presented to the FDA by 18 March 2011. The US said that, under the circumstances, Indonesia’s request was premature and that the US was not in a position to agree to a panel at this time.

  

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Surveillance of implementation of DSB rulings 

The following status reports were presented:

DS176: United States — Section 211 Omnibus Appropriations Act of 1998

The US reported that a number of legislative proposals that would implement the DSB’s recommendations and rulings had been introduced in Congress and that the Committee on the Judiciary of the House of Representatives had held a hearing on certain of those proposals on 3 March 2010. The EU noted that the US was presenting its 92nd report and hoped that it would soon take steps to finally resolve the matter. Cuba, Chile, China, Ecuador, India, Viet Nam, Venezuela, Brazil and Mexico reiterated their concern over the non-compliance, called on the US to comply and sought more information from the US on the steps it had taken.
  

DS184: United States — Anti-dumping Measures on Certain Hot-Rolled Steel Products from Japan

The US said that as of 23 November 2002, its authorities had addressed the DSB’s recommendations and rulings with respect to the calculation of anti-dumping margins and that with respect to those DSB recommendations and rulings not yet addressed, its administration would work with Congress so as to resolve the matter. Japan called on the US to fully implement the DSB’s recommendations.
  

DS160: United States — Section 110(5) of the US copyright act

The US reported that its administration would continue to confer with the EU and work with Congress to resolve the matter. The EU was again disappointed by the non-compliance on the part of the US and added that it remained ready to work with the US towards the complete resolution of the case.
  

DS291: European Communities — Measures Affecting the Approval and Marketing of Biotech Products

The EU reported that its regulatory procedures on biotech products continued to work as foreseen in the legislation and that as of 2 March 2010, five authorisation decisions had been issued, raising the number of GMOs authorised since the establishment of the Panel to 29. Progress had also been made on other applications. The EU thanked Argentina and Canada for their constructive approach and hoped that the US would re-engage in dialogue. The US noted that the EU was considering modifications to its biotech approval procedures and looked forward to holding constructive discussions with the EU. The EU clarified that the modifications were not related to the Panel’s findings.
  

DS322: United States — Measures Relating to Zeroing and Sunset Reviews

The US reported that it had taken steps to implement the DSB’s recommendations and rulings and that with regard to the outstanding issues, it would continue to consult with interested parties. Japan once again called on the US to fulfil its commitment while the EU recalled that immediate compliance with DSB recommendations and rulings was not an option but an obligation under the Dispute Settlement Understanding (DSU).
  

DS350: United States — Continued Existence and Application of Zeroing Methodology

The US said that it had taken steps to implement the DSB’s recommendations and rulings in this case and that with regard to the remaining issues, it would continue to consult with interested parties. The EU reiterated its concerns about non-compliance on the part of the US and said that the final determination in Section 129 proceeding of 12 March 2010 left the EU perplexed as to the US intentions on compliance.
  

DS294: United States — Laws, Regulations and Methodology for Calculating Dumping Margins (Zeroing)

The US reported that it had taken a number of steps to implement the DSB’s recommendations and rulings and that it would continue to consult with interested parties with regard to the remaining issues. The US also recalled that it had objected to the EU’s request to suspend concessions or other obligations and that the matter had thus been referred to arbitration. The EU reiterated its disappointment with the lack of real progress by the US on compliance with adverse rulings on zeroing.

  

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Issues raised by WTO members 

United States — Continued Dumping and Subsidy Offset Act of 2000

This item was once again on the agenda at the request of the EU and Japan. Japan and the EU, supported by Brazil, Canada, China, India and Thailand, called on the US to stop the transfer of anti-dumping and countervailing duties to its industry and present status reports until the issue was resolved.
  

European Communities — Export Subsidies on Sugar

This item was once again on the agenda at the request of Australia, Brazil and Thailand. Australia, also speaking on behalf of Brazil and Thailand, recalled their joint statements made at previous DSB meetings as well as at the Committee on Agriculture meeting on 10 March 2010 expressing their concern about the EU’s decision to export out-of-quota sugar in excess of its quantity commitment level. Australia, Brazil and Thailand urged the EU to provide the necessary technical information underpinning its decision and to justify the WTO consistency of its decision. The EU reiterated that its decision was temporary and that it fully respected its international obligations. The EU expressed readiness to continue a dialogue regarding the background underpinning its decision.
  

DS312: Korea — Anti-Dumping Duties on Imports of Certain Paper from Indonesia

This item was on the agenda at the request of Indonesia. Indonesia expressed its disappointment over the statement made by Korea at the previous DSB meeting on 18 May 2010 and regretted Korea’s continued lack of cooperation in this dispute.

While Korea was of the view that its violations were procedural rather than substantive, Indonesia was not aware of any formal distinction between “substantive” and “procedural” obligations under the Anti-Dumping Agreement. Indonesia added that the main issue involved Korea’s failure to comply with the requirements of the Anti-Dumping Agreement in selecting the information to be used to calculate the dumping margin for the Indonesian exporters and was thus a substantive issue. Furthermore, Korea had recently initiated a sunset review that may lead to the continuation of the WTO-inconsistent measure. Indonesia concluded by stating that it retained its rights under the DSU arising out of the Article 21.5 panel report.

In response, Korea said that it had fully implemented the recommendations of the Compliance Panel and that with respect to the sunset review, the process was ongoing in a manner consistent with both the WTO and Korean laws.

 

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Other business 

Amendments proposed by the Appellate Body to the Working Procedures for Appellate Review

The Chairman reported that on 27 May 2010, in accordance with the DSB Decision of 19 December 2002 (WT/DSB/31), he had conveyed to the Appellate Body, the views expressed by members at the 18 May DSB meeting on the proposed amendments to the Working Procedures for Appellate Review, by forwarding to them the record of that meeting. Furthermore, he had also conveyed to the Appellate Body the written comments submitted by 13 delegations: Australia, Chile, China, Guatemala, Japan, Korea, Mexico, New Zealand, Singapore, Chinese Taipei, Thailand, Turkey and the US. These written comments would be annexed to the minutes of the 18 May DSB meeting.

In accordance with paragraph 4 of the 2002 DSB Decision, the Chairman had requested that members’ views and written comments be taken into account by the Appellate Body. It was his understanding that the Appellate Body was currently in the process of reviewing the views and comments received from members.

  

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Next meeting 

The next meeting of the DSB is scheduled for 20 July 2010.