DS502: Colombia — Measures Concerning Imported Spirits

The EU made this second request for a panel after Colombia blocked the EU’s first request on 5 September. Colombia reiterated its concern that the establishment of a panel could have adverse effects on the legislative process by undermining the political support for a reform bill that will make changes to its spirits regime.

The DSB established a panel. Brazil, Canada, Chile, China, El Salvador, Guatemala, India, Kazakhstan, Korea, Mexico, Panama, the Russian Federation, Chinese Taipei and the United States reserved their third-party rights to participate in the panel’s proceedings.

 

Appellate Body report adopted

DS464: US — Anti-dumping and Countervailing Measures on Large Residential Washers from Korea

Korea welcomed the Appellate Body’s (AB) findings on the use of the “zeroing” methodology which has been repeatedly found to be WTO-inconsistent by panels and the AB. Zeroing occurs when authorities disregard certain market prices in the calculation anti-dumping measures. Korea also welcomed the AB’s guidance on interpreting and properly applying certain provisions in the Anti-Dumping Agreement.

In addition, Korea appreciated the AB’s clarification of the obligations relating to subsidies and countervailing measures (SCM). Korea said, however, that it was disappointed with the findings on regional specificity under the WTO SCM Agreement. Subsidies deemed to be “specific” are subject to disciplines under WTO rules. Korea further said it expected the United States to promptly comply with the DSB’s recommendations and rulings in this dispute.

The US noted certain aspects of the AB report that were, in its view, of serious concern. The US said these issues related to the AB’s approach to claims relating to the Anti-Dumping Agreement and the SCM Agreement. The US also discussed its views on the proper role of the AB in reviewing claims by a party and findings by a panel.

The US said important aspects of the AB report appeared to be at odds with the basic purpose of dispute settlement. It also said the AB report adopted an interpretative approach that was not based on the text of the covered agreements, but rather on the application of language from prior AB reports. The US also said it appreciated that the AB rejected Korea’s most extreme legal theories.

Canada, China and Brazil, speaking as third parties to this dispute, welcomed the findings and clarifications of the AB. In Brazil’s view, the AB decisions on “zeroing” were concise, direct, clear and balanced.

 

Panel report adopted

DS485: Russia — Tariff Treatment of Certain Agricultural and Manufacturing Products

The EU welcomed the panel’s findings which confirmed that Russia’s customs duties on products such as paper, palm oil, refrigerators and freezers under the Common Customs Tariff of the Eurasian Economic Union exceed the rates it committed to the WTO. The EU said it believed that these clear findings also have an effect beyond the particular products at issue in this dispute. The EU further noted that some of the disputed measures had already been modified in the course of the panel proceedings. The EU said it trusted that Russia would take the necessary steps to ensure WTO compatibility of its measures.

Russia also welcomed the panel report which, in its view, clarified a number of systemic issues in WTO jurisprudence. Russia mentioned that, for certain measures, it had already amended its applied rates prior to, and in the course of, the proceedings. Russia was of the view that the panel made the necessary findings so as to secure a positive solution to the dispute. In that regard, Russia decided not to appeal and looked forward to working constructively with the EU to address the DSB’s recommendations and rulings in this dispute.

Ukraine welcomed the panel’s conclusions.

The DSB adopted the panel report contained in WT/DS485/R and Add.1 as well as Corr.1 and Corr.2.

 

Compliance discussed

DS430: India — Measures Concerning the Importation of Certain Agricultural Products

The US recalled that, in late July, India had adopted a measure that revises certain aspects of the disputed measure. The US said the revised measure, however, appeared to retain many of the features of the prior one which had been found to be inconsistent with India’s WTO obligations. On 22 September, India then notified an amendment to its July measure and the US said it was in the process of studying it. The US noted that India had made three different claims of compliance to the DSB. The US said it hoped that India would comply with its WTO obligations.

India said that it had complied with the DSB’s recommendations and rulings in this dispute and has been in bilateral consultations with the US. India urged the US to enter into a sequencing agreement such that a compliance panel be first established before arbitration on the US request for retaliation proceeds. The US reiterated its view that there was nothing in the WTO rules that required parties to enter into sequencing agreements.

The EU urged the parties to ensure that the WTO procedures regarding compliance and suspension of obligations in this dispute can be conducted efficiently and in the correct sequence.

 

Chair’s statement on Appellate Body matters

DSB Chair Ambassador Xavier Carim (South Africa) informed delegations that the names of seven candidates were submitted by the 14 September deadline for the vacancy left by the non-reappointment of Mr Seung Wha Chang. The seven candidates include two new nominations submitted by Chinese Taipei and Korea and also names resubmitted by Australia, China, Japan and Nepal originally for another vacancy created by the 31 May expiry of Ms Yuejiao Zhang’s term. The re-nominated candidates will not be interviewed for the second time by the Selection Committee. The interviews of the two new candidates will be held on 17 October.

The chair informed delegations that the Selection Committee will be available to hear views of delegations on the candidates on 1 and 2 November. He said that the Selection Committee would need to make its recommendation for filling the two vacancies by no later than 10 November so the two new AB members can be approved by the DSB at its regular meeting on 23 November.

 

Dedicated session on reappointment of Appellate Body members

Members held their first dedicated session on the reappointment of Appellate Body members. The discussions were prompted by the non-reappointment of Appellate Body member Mr Seung Wha Chang, whose first term expired on 31 May.

The chair encouraged members to engage in the discussions in a positive and constructive manner.  One member put forward an informal “non-paper” on possible options for discussion on amending the Dispute Settlement Understanding to improve the reappointment procedures. These include appointing Appellate Body members for a single term of six to eight years (the current term limit is four years, with the possibility of one renewal); changes in decision-making regarding reappointment, such as making decisions by three-quarters majority of the WTO membership; and elaboration of criteria under which members may object to reappointment.

A number of members who took the floor said they were prepared to discuss options for amending the procedures and stressed the importance of the review in maintaining the impartiality and independence of the Appellate Body. One member said it did not believe the current rules needed to be amended and that the recent action on non-reappointment demonstrated the system was working.

The chair concluded the meeting by saying there had been useful exchanges that had given members a better sense of the issues and perspectives. He encouraged members to work together on those issues between now and the next dedicated session, which will take place on the afternoon of 26 October.

Mr Chang gave a farewell speech at an event following the conclusion of the dedicated session.  The text of the speech is available here.

 

Status reports

Three status reports were presented. Statements on implementation were made regarding four other matters.

 

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 26 October 2016.