Compliance panels established

DS427: China — Anti-Dumping and Countervailing Duty Measures on Broiler Products from the US

The US said that China had failed to bring its measures into conformity with WTO agreements covered in this dispute. The US was of the view that a re-determination by China's Ministry of Commerce resulted in a continued application of anti-dumping and countervailing duties on broiler products imported from the US. This, the US said, was inconsistent with China's obligations. The US thus requested the DSB to establish a compliance panel to examine the issue.

China expressed its disappointment with the US request and believed that its measures were fully in compliance with WTO rules. China nevertheless accepted the US request at the first instance as both sides had a prior agreement on procedures.

The DSB agreed to refer to the original panel, if possible, the matter raised by the US in documents WT/DS427/11 and Corr.1. Canada, the European Union and Japan reserved their third-party rights to participate in the panel's proceedings.

DS381: US — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products

Mexico recalled that the US had issued a new rule modifying the dolphin safe labelling measure at issue in this dispute. In Mexico's view, the revised measure did not bring the US into compliance with WTO rules. Mexico also expressed concern that the US in this dispute had not complied in a prompt manner as required in dispute settlement rules. Mexico further recalled that the US had requested the establishment of a compliance panel to examine its revised measure. Mexico therefore requested the establishment of a compliance panel as well.

The US said it did not object to Mexico's request and was of the view that Mexico should have requested the establishment of a panel several months ago. The DSB agreed to refer to the original panel, if possible, the matter raised by Mexico in document WT/381/38.

Australia, Brazil, Canada, China, EU, Guatemala, Japan, Korea, New Zealand and Norway reserved their third-party rights to participate in the panel's proceedings.

Panel requests rejected

DS504: Korea — Anti-Dumping Duties on Pneumatic Valves from Japan

Japan said that Korea's measures imposing anti-dumping duties on pneumatic valves from Japan were, in its view, inconsistent with Korea's WTO obligations. Consultations were held on 28 April but they did not resolve the matter. Japan therefore requested the DSB to establish a panel to examine this matter.

Korea said it regretted Japan's request. Korea believed it had adopted and implemented its measures in a transparent and non-discriminatory manner, and in full compliance with its WTO obligations. In that regard, Korea could not agree to the establishment of a panel.

The DSB therefore deferred the establishment of a panel.

DS505: US — Countervailing Measures on Supercalendered Paper from Canada

Canada said that the US imposition of countervailing duties on imports of supercalendered paper from Canada were inconsistent with its WTO obligations. Consultations held in May 2015 did not resolve the matter. Canada thus requested a panel be established for this dispute.

The US said that it was disappointed with Canada's request. In its view, its actions were fully consistent with its WTO obligations. The US said it could not agree to Canada's panel request.

The DSB deferred the establishment of a panel.

Appellate Body report adopted

DS461: Colombia — Measures Relating to the Importation of Textiles, Apparel and Footwear

Panama welcomed the Appellate Body report which confirmed the panel's finding that Colombia's compound tariff imposed on textiles, clothing and footwear was inconsistent with WTO rules and exceeded Colombia's bound tariff rates. Panama noted, however, that it had some concerns about portions of the Appellate Body arguments that could be misinterpreted in the sense that certain exceptions to WTO rules would be applied more flexibly, particularly when a defendant alleged that a measure had been implemented to protect public morals. Panama said it would comply with the rulings and hoped that Colombia would promptly comply.

Colombia said that this dispute focused on the use of foreign trade operations to launder assets or finance terrorism, which it considered to be a serious issue. Colombia noted the Appellate Body had stated that the fight against money laundering was an important policy objective for Colombia and that the compound tariff was for combatting laundering and therefore a matter of public morals. However, Colombia regretted that the Appellate Body had concluded that it had not sufficiently demonstrated that the compound tariff was a necessary measure. Despite this, Colombia said it would comply with the DSB's recommendations and rulings.

The DSB adopted the Appellate Body report contained in WT/DS461/AB/R and Add.1 and the panel report contained in WT/DS461/R and Add.1, as modified by the Appellate Body report.

Canada's statement on the conduct of WTO disputes

Canada noted that dispute settlement workload challenges were causing delays and that there was a deadlock in efforts to formally modify the Dispute Settlement Understanding provisions. As such, Canada said it was proposing a different approach to developing new practices and procedures in how WTO disputes are conducted.

Canada's approach is to create an informal framework for the development of procedural innovations. Canada explained that, using this framework, groups of members would commit to trying out new ideas only with other members who were also prepared to implement them. Canada said that after certain practices are tried and tested, thus building confidence in their feasibility, these may be then expanded to apply to other members. Canada also said this approach may eventually facilitate formal changes in the procedural rules once agreed by all. 

Canada circulated room documents setting out the framework and examples of the kind of things that could be pursued in this manner. Canada informed delegations that it would hold a series of meetings to discuss the matter further and invited interested delegations to participate.

A total of 28 delegations intervened. They welcomed Canada's proposal and noted that information sharing could be helpful, in particular for less frequent users of the dispute settlement system. Others said that they would reflect further and study the documents.

Status reports

Six status reports were presented. Statements on implementation were made regarding three other matters.

Chair's statement on consultations on Appellate Body matters

DSB Chair Ambassador Xavier Carim (South Africa) reported on the informal consultations he had with 14 delegations on 8 and 9 June. He said that his assessment was that members were not yet in a position to move towards filling either of the two current vacancies in the Appellate Body. There was no agreement among members to take any action to fill the vacancy created by the non-reappointment of Mr Seung Wha Chang. The United States had earlier stated that it did not support this reappointment.  The other vacancy was created by the expiry of Ms Yuejiao Zhang's second term.

The Chair further said that while the decision to appoint a new Appellate Body member was formally separate from the question of reappointment, the consultations had also revealed that the two current vacancies may need to be considered together.

With regard to the issue of whether WTO members should and could adjust the way reappointments are dealt with in the future, many delegations strongly reiterated the views expressed at the previous DSB meeting. It appeared that delegations were open to a discussion on the issues and options that had been raised.

The Chair added that, if the process would be taken forward in July, members would need to intensify their discussions with a view to being in a position to take decisions at the July DSB meeting.

In response to the Chair's statement, the following delegations intervened: Korea (on its own behalf and on behalf of 15 members), Morocco (on behalf of the African Group), Peru, Dominican Republic, Oman, China, Turkey, Chile, Hong Kong (China), New Zealand, Chinese Taipei, Australia, Norway, Japan, Mexico, Zimbabwe, Canada, Brazil and the United States.

In the joint statement read by Korea, the 15 delegations¹ reiterated their concerns regarding the US decision not to reappoint an Appellate Body member. While recognizing a WTO member's right to disagree with reappointment, they were concerned about the reasons given which, in their view, undermined members' trust in the rules-based system, undermined the Appellate Body's impartiality and independence, and created a precedent that should not be repeated.

Speaking on its own behalf, Korea made a detailed statement rebutting the US arguments made at the May DSB meeting with regard to four Appellate Body reports that justified its decision not to reappoint the Appellate Body member concerned.

Other delegations reiterated what they had said at the previous DSB meeting. Many called for the two vacancies to be filled promptly in light of the Appellate Body workload.

The US said it will not change its position and referred to its statement made at the 23 May DSB meeting.

Other business

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

The Philippines said that it had agreed to wait until 27 June 2016 before requesting the DSB to establish a panel to examine Thailand's compliance in this dispute. Thailand said that it would continue to consult with the Philippines on this matter.

Workload

The Chair provided information on the Appellate Body's workload, on the number of disputes in the panel queue and at the panel composition stage, and on the ability of the WTO Secretariat to meet expected demand over the coming period.  

Next meeting

The next regular DSB meeting is scheduled for 21 July 2016.

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