WTO: 2011 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.

Prior to the meeting, Thailand informed the DSB of its intention to appeal the report that examined Thai measures imposed on cigarettes imported from the Philippines (WT/DS371/R). Consequently, the report was not considered for adoption by the DSB.  
  

Panel requests

DS369 and DS400: European Communities — Certain measures prohibiting the importation and marketing of seal products

Canada requested for the first time the establishment of two panels (WT/DS369/2 and WT/DS400/4) to review respectively Belgium and the Netherlands import bans on Canadian seal products and to examine the EU-wide import ban also targeting these products.

The DSB deferred the establishment of a panel following the EU's objection.

While Canada understood that the EU measures were a response to concerns of European citizens and consumers about the animal welfare aspects of the seal harvest, Canada said that trade restrictions could not be justified by relying on myths and misinformation. Canada said that seal harvest was lawful, sustainable, humane, strictly regulated and guided by rigorous animal welfare principles that were internationally recognised. Canada said that seal harvest helped to provide thousands of jobs in Canada's remote coastal and northern communities where few economic opportunities exist and that it was an important part of the Inuit way of life. Canada said that it had a lengthy engagement with the EU on this issue and shared this concern on multiple occasions at the WTO Committee on Technical Barriers to Trade (see minutes of the June 2010 TBT meeting where this issue was raised G/TBT/M/51). Canada said that these restrictions resulted in an extreme decline of Canadian exports, especially exports of raw seal fur skins which fell by 94% in 2009, compared to 2008. Canada asked for the restoration of full market access.

The EU said that the measures were neither protectionist nor discriminatory. The EU stood ready to defend such measures and opposed the establishment of a panel.

Norway said that these measures had serious implications for its industry and added that this dispute was not just about seal products but about Norway's right to harvest in a sustainable manner from its living marine resources and to market the products of hunting and fishing. Norway stated that there were no justifiable grounds for the ban and added that seal populations were not threatened and the hunt was strictly controlled. Norway said it was considering what might be the appropriate next steps (see — WT/DS401).

DS413: China — Certain measures affecting electronic payment services

The US requested for the first time the establishment of a panel (WT/DS413/2) to review Chinese measures restricting market access to American suppliers of electronic payment services.

The DSB deferred the establishment of a panel following China's objection.

The US said that hundreds of billions of dollars worth of electronic payment transactions were processed in China in 2010. China undertook both market access and national treatment with respect to financial services, meaning that members should be able to compete to provide these services to Chinese businesses and consumers. The US said that China imposed market access restrictions and requirements on services suppliers and added that many restrictions served to protect the monopoly position of a single Chinese entity, China Union Pay. The US pointed out that these measures were inconsistent with China's obligations under the General Agreement on Trade in Services (GATS).

China regretted that the US requested the DSB to establish a Panel and opposed the establishment of a panel. China said it consistently observed the WTO rules and had positively implemented its commitments. China said it had had sincere consultations with the US and positively responded to the US questions. China noticed that issues included in the US panel request were not listed in its consultations request.

DS414: China — Countervailing and anti-dumping duties on grain oriented flat-rolled electrical steel from the United States

The US requested for the first time the establishment of a panel (WT/DS414/2) to review Chinese anti-dumping measure imposed on American steel products.

The DSB deferred the establishment of a Panel following China's objection.

The US said that China's dumping and subsidy determinations appeared to breach a number of its WTO obligations. The US concerns were related to every stage of China's investigation.

China said that during the investigation, the US products were dumped into China and benefited from subsidies. China added that the dumped and subsidized imports had caused material injury to its industry. China regretted that the US came forward with a panel request and believed that its measures were consistent with WTO rules. China also noted that issues included in the US panel request were not listed in its consultations request and asked the US to reconsider its panel request. China and opposed the establishment of a panel.
  

Report adoption

DS402: United States of America — Use of Zeroing in Anti-Dumping Measures Involving Products from Korea

The DSB adopted the report (WT/DS402/R) which examined the use of Zeroing in anti-dumping measures applied to Korean products by the US.

Korea welcomed the adoption of the report and noted that the DSB had adopted recommendations finding the use of zeroing to be inconsistent with the Anti-dumping Agreement on several occasions.  Korea said it had a long-lasting concern about the use of zeroing in all stages of anti-dumping proceedings and had consistent position that all forms of zeroing should be eliminated. Korea would remain vigilant in monitoring the situation in the future.

The US said that its on-going concern was related to zeroing outside the context of average-to-average comparisons in investigations. The US added that its Department of Commerce announced years ago that zeroing would be discontinued in the context of average-to-average comparisons in investigations as a result of earlier DSB rulings.

The EU noted that once again the report confirmed the WTO inconsistency of US zeroing.
  

Implementation

DS322DS350DS294— Zeroing: The US presented a similar status report (WT/DS322/36/Add.17, WT/DS350/18/Add.14 and WT/DS294/38/Add.8) in these three cases.

The US referred to its statement at the last DSB meeting (see here) and said that in December 2010, the US Department of Commerce announced a proposal to change the calculation of weighted average dumping margins and assessment rates in certain anti-dumping proceedings. The proposal required a period for public comment and would involve consultations with appropriate committees in the US Congress. The US said that the Department of Commerce was currently reviewing the comments received on this proposal.

The EU appreciated the US efforts to start work towards compliance with DSB recommendations in zeroing disputes, but added that what was put forward so far was not enough for full compliance. The EU said that based on the last US status reports, no implementing measure was in place. The proposal if successful would address only part of the findings on zeroing. The EU disagreed that the US should not consider refunding the duties it had continued to impose and collected since after the end of the reasonable period of time (RPT) for compliance. The EU said that compliance in the context of zeroing implies not only cessation of zeroing in the assessment of duties but also in consequent measures deriving mechanically from the assessment of duties. The EU reminded that the excess duties paid after the end of the RPT was only an issue because the US delayed implementation for so long.

Japan considered the latest developments were a positive step forward but would carefully review the US proposal to see whether it would be enough to fully implement the DSB's recommendations. Japan said it continued to seek prompt compliance by the US and looked forward to a continued dialogue on this matter.

China welcomed the US Department of Commerce proposal to end zeroing in reviews. China believed that presently effective dumping margins calculated with the zeroing method should be eligible for revision to ensure fairness and avoid prolonged and unnecessary litigations. China added that the US should clarify important issues concerning the use of targeted dumping and communicate its intention to abide by clear international obligations prohibiting the use of zeroing. China said that while the current US proposal did not identify targeted dumping by name, it clearly referenced this issue. China asked clarifications on how the US Department of Commerce used the targeted dumping method to calculate dumping margins and why zeroing was necessary in connection with this alternative method.

DSB Chair appointment

Following the General Council decision taken on 22 February 2011 (see here), a new DSB chair has been appointed. Nigerian Ambassador Yonov Frederick Agah left his chairmanship to Norway's Ambassador Elin Johansen.

  

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Next meeting 

The next meeting of the DSB will be held on 25 March 2011.

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