WTO: 2014 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.

DS431, DS432, DS433: China — Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum

Adoption of the Panel and Appellate Body reports

The United States, Japan and the European Union welcomed the Panel and Appellate Body reports which found that China's export restrictions on rare earths, tungsten and molybdenum were in breach of China's WTO obligations and not justified under the GATT exceptions. The co-complainants welcomed the finding that the imposition of export duties was contrary to China's Accession Protocol and that such duties cannot be justified under Article XX of the GATT 1994.

The US regretted that this was the second dispute brought to address China's export restraints on the industrial raw material inputs. The US added that all WTO members were bound together through a global interdependence in the trade of raw materials. In that regard, China's implementation of the  recommendations and rulings of the Dispute Settlement Body (DSB) in these disputes would benefit all members and would contribute to global growth and prosperity.

Japan said that it had serious concerns with China's export restrictions which in effect gave preferential treatment to domestic industries under the guise of environmental protection or natural resources conservation. Japan was therefore pleased with the Appellate Body's clear ruling that such restrictions cannot be justified and hoped that this would contribute to the stabilisation of global trade in natural resources and energy and restrain the proliferation of protectionism in some resource-endowed countries. In the EU's view, the restrictions imposed by China were not appropriate to promote the genuine objectives of conservation and environmental protection.

China said that it found it unfortunate that the Appellate Body failed to clarify the precise legal status of the accession commitments undertaken by acceding members but welcomed the Appellate Body's finding that the availability of exception provisions for violations of accession commitments must be conducted on a case by case basis. China reserved its right to invoke such exceptions in any future disputes about its accession commitments.

 

DS449: US — Countervailing and Anti-Dumping Measures on Certain Products from China

The US said that on 21 August 2014 it had informed the DSB by letter that it intends to implement the DSB's recommendations and rulings pertaining to this dispute in a manner that respects its WTO obligations. The US added that it would need a reasonable period of time to do so. China welcomed the US intention to comply with the DSB's recommendations and rulings in this dispute and was ready to discuss the reasonable period of time for implementation.

DS413: China — Certain Measures Affecting Electronic Payment Services

The US said that it continued to have serious concerns that China had failed to bring its measures into conformity with its WTO obligations. The US was concerned that China continued to maintain a ban on foreign suppliers of electronic payment services by imposing a licence requirement on them while providing no procedures for them to obtain that licence. The US noted that China's own domestic champion remains the only EPS supplier that can operate in China's domestic market. China said that it had taken all necessary actions and had fully implemented the DSB's recommendations. China hoped that the US would reconsider the systemic implications of its position. The US strongly disagreed with China's assertions.

DS412, DS426: Canada - Certain Measures Affecting the Renewable Energy Generation Sector/Canada — Measures Relating to the Feed-in Tariff Program

Japan noted that on 24 July 2014 the Ontario Legislative Assembly passed the legislative Bill 14, which contains a provision repealing the subsection of the Electricity Act for domestic content requirement in the Feed-in Tariff (FIT) Program. Japan also noted that following the legislative act, the Minister of Energy of Ontario further directed the Ontario Power Authority not to include any domestic content requirement in any FIT or microFIT contracts signed after 25 July 2014. Japan welcomed Canada's compliance action but reiterated its concern with the process towards the achievement of compliance. In Japan's view, Canada should have continued to submit status reports to the DSB. The EU also welcomed the legislative amendment which was an essential element to ensure a positive solution to these disputes and hoped that the new system would ensure fair competition between domestic and imported generation equipment. Canada recalled that the actions that brought it into compliance with the DSB's recommendations and rulings were outlined in its submitted status reports as well as in its 5 June 2014 notification of compliance.

DS285: US — Measures Affecting the Cross Border Supply of Gambling and Betting Services

Antigua and Barbuda reiterated its concern that it had not yet received any settlement proposal or other communication from the United States. Antigua and Barbuda informed the DSB that its newly elected government has recently formally presented a comprehensive and realistic proposal to the US. Antigua and Barbuda urged the US to consider the proposal with good faith and to engage comprehensively with Antigua and Barbuda so as to end this dispute. The US said that it remained committed to resolving this dispute and looked forward to working with Antigua and Barbuda's new government.

DS371: Thailand — Customs and Fiscal Measures on Cigarettes from the Philippines

The Philippines reiterated its concern that there were a number of outstanding issues that called into question Thailand's compliance with the DSB's recommendations and rulings in this dispute. In its view, as long as issues remained outstanding, there were only two alternatives — continue surveillance in the DSB or return to dispute settlement. Thailand reiterated its view that it had taken all actions necessary to implement the DSB's recommendations and rulings in this dispute and did not find it necessary to submit status reports.

 

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Other business 

Under “Other Business”, the Chair, Ambassador Fernando de Mateo, of Mexico, made a statement regarding the Appellate Body selection process. He recalled that the Selection Committee had interviewed the seven candidates on 22 and 23 July. He further recalled that, on 9 and 10 September, the Selection Committee would meet, upon request, with interested delegations who wished to express views on the candidates. The Chair emphasized the importance of delegations providing constructive comments on the candidates and that delegations were welcome to provide the Committee with their preferences regarding the seven candidates. He informed delegations that it would assist the Committee if delegations were to provide only the name of the candidate they wished to see as the next member of the Appellate Body. In that way, the Committee would be in a good position to conclude this matter by 26 September.

Also under “Other Business”, the Chair informed delegations that the Director-General would make a presentation at the next DSB meeting on the current dispute settlement situation. The Director-General would take the opportunity to brief delegations on the steps he is taking to address the unprecedented increase in the number of disputes before the system. Accordingly, the matter would be placed on the agenda of the 26 September 2014 DSB meeting.

 

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Next meeting 

The next regular meeting of the DSB is scheduled for 26 September 2014.

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