WTO: 2010 NEWS ITEMS

DISPUTE SETTLEMENT

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NOTE:
This summary has been prepared by the WTO Secretariat’s Information and External 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.

DS392: United States — Certain Measures Affecting Imports of Poultry from China

The DSB adopted the panel report (WT/DS392/R) which was circulated on 29 September 2010.

China recalled that the dispute involved the US ban on the importation of poultry products from China since 2007 through its annual appropriation acts and other related measures. The measure at issue was Section 727 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2009. Section 727 reads: “None of the funds made available in this Act may be used to establish or implement a rule allowing poultry products to be imported into the United States from the People’s Republic of China.” Section 727 was accompanied by a Joint Explanatory Statement which speaks about “very serious concerns about contaminated foods from China”.

China welcomed the panel report which had concluded that Section 727 was inconsistent with the WTO Agreement on Sanitary and Phytosanitary Measures (SPS) and with Articles I and XI of GATT 1994. Although Section 727 had expired, China was of the view that certain provisions in annual appropriations measures of the US Congress may still affect China’s ability to access the US poultry market in the future and thus hoped that the US would take positive steps to eliminate all discriminatory measures against Chinese poultry products.

The US expressed its disappointment with the panel’s findings which, in its view, had raised a number of significant questions. First, the relationship between equivalence reviews under Article 4 and other provisions of the SPS Agreement was complex and of systemic importance to all WTO members. The US was thus of the opinion that the matter warranted a more careful analysis than it had received in the report. Second, the US had systemic concerns with the report’s “like products” analysis. Third, the US was concerned with the treatment the report provided to the US defence under Article XX (b) of GATT 1994 which did not include a systematic analysis of the US arguments but instead found that no measure that breached Articles 2 and 5 of the SPS Agreement could be justified under Article XX(b). The US appreciated that the panel had exercised judicial economy with respect to China’s claim under Article 4.2 of the Agriculture Agreement and part of China’s claim under Article 5.5 of the SPS Agreement. As the measure at issue had expired, the US considered that the measure had been withdrawn and that the dispute had been resolved.

Speaking as a third-party in the dispute, the EU welcomed the panel’s findings but questioned the manner in which the panel had reached its conclusion. The EU was of the view that, while the SPS Agreement and GATT Article XX(b) were closely related, it would not be appropriate to assume that a breach of the SPS Agreement always and automatically resulted in the measure not being in line with Article XX(b).

DS411: Armenia — Measures Affecting the Importation and Internal Sale of Cigarettes and Alcoholic Beverages

Ukraine introduced its first-time request for a panel (WT/DS411/2/Rev.1). Ukraine was of the view that Armenia’s measures violated Articles III:1, III:2 and III:4 of GATT 1994 as well as Armenia’s commitment in its accession working party report to apply its domestic taxes in a non-discriminatory manner consistent with the national treatment provisions before or from the date of accession. According to Ukraine, the measures at issue are: the Presumptive Tax which imposes higher tax rates on imported cigarettes than on like domestic products; the collection of import duties on imported cigarettes in excess of duties set forth in Armenia’s Schedule of Concessions; and the imposition of higher excise tax rates on imported alcoholic beverages than on like domestic products. Armenia said that it hoped to intensify bilateral consultations with Ukraine and was thus not in a position to agree to the establishment of a panel. Consequently, the DSB agreed to revert to this matter.

  

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Other business 

Brazil raised a dispute settlement-related issue that it had noted in the Secretariat’s Report on the Trade Policy Review of the United States. In that report, it appeared to Brazil that the Secretariat had prepared its list of disputes pending implementation by the US on the basis of item 1 of the DSB’s Agenda. Brazil noted that, in practice, a dispute is only placed under item 1 of the Agenda when the responding party submits status reports pursuant to Article 21.6 of the DSU. Brazil thus requested that the WTO Secretariat take this into account when addressing, in formal documents, the issue of implementation of DSB recommendations and rulings and should clarify that the list drawn from item 1 of the DSB’s Agenda may not be exhaustive with respect to disputes where full implementation had not yet been achieved.

  

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Next meeting 

The next meeting of the DSB is scheduled to take place on 23 November 2010.

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