WTO: 2017 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.

DS516: European Union — Measures Related to Price Comparison Methodologies

China referred to its previous statement on this matter made at the 21 March DSB meeting, when it submitted its first request for a panel. China reiterated that its 2001 Accession Protocol allowed for special rules to apply in anti-dumping proceedings concerning imports from China on a time bound and temporary basis. The 15-year transitional period had expired and, as such, the special rules no longer applied.

China noted that, at the last DSB meeting, the United States signalled its intention to continue applying discriminative practices to Chinese importers despite the expiry of the relevant provision of the Accession Protocol. This was WTO-inconsistent. With regards to the European Union's statement at the last DSB meeting, China said that there was no deficiency in its request for the establishment of a panel.

China considered the EU's views regarding the inclusion of modifications, replacements or amendments in DS516 to be incorrect as a matter of law and fact. China agreed that members could use "appropriate WTO tools" to address injurious dumping according to WTO law. However, the EU had failed to use WTO-consistent tools in anti-dumping disputes involving China. This upset the balance of rights and obligations agreed between China and the EU upon China's WTO accession. China requested the establishment of a panel for the second time.

The European Union said it regretted China's decision to request the establishment of a panel. The measure at issue, Article 2(7) of the EU's Basic Regulation, was currently the subject of an internal legislative process which could result in its withdrawal. As such, China's request was unnecessary and incapable of being fruitful. The EU recalled its concerns regarding China's attempt to create and maintain an unlawful short-cut between the current dispute, as it related to Article 2(7) of the Basic Regulation, and the unknown outcome of the legislative process. The EU called on China to withdraw its panel request. 

The United States said that it supported the EU's right to use a non-market economy methodology in anti-dumping proceedings involving China. China's Accession Protocol allows members to continue using a non-market economy methodology with respect to China for as long as such treatment was justified by the facts. If the facts showed that China had made the reforms necessary to become a market economy, then the EU should treat it as such. But, if the facts showed otherwise, then the EU need not do so. The expiry of the relevant provision of China's Accession Protocol meant that continued use of a non-market economy methodology had to be justified by the facts in China. However, China's apparent view that the facts and the remainder of the Accession Protocol were irrelevant was contrary to the text of the protocol and the rights of members under the WTO Agreement.

On 29 March, the US Department of Commerce announced an inquiry into China's non-market economy status in the context of an investigation regarding aluminium foil. The US invited China to participate in this process. The US said it would stand with the EU in any future litigation of this dispute and encouraged other members to do so as well.

Japan reiterated that it supported the EU's and the United States' respective positions in this dispute and shared their concerns. In particular, Japan was of the view that the WTO Agreement, including China's Accession Protocol, continued to allow members to use a methodology not based on a strict comparison with domestic prices or costs in China. A challenge to the EU's future measures appeared to be speculative and was not an efficient use of dispute settlement resources, Japan said.

The DSB agreed to establish a panel. Australia, Brazil, Canada, Colombia, Ecuador, India, Indonesia, Japan, Kazakhstan, Korea, Mexico, Norway, the Russian Federation, Chinese Taipei, Turkey and the United States reserved their third party rights to participate in the panel proceedings.

DS518: India — Certain Measures on Imports of Iron and Steel Products

Japan said that it would not repeat the statement it made at the 21 March DSB meeting, when it first requested the panel, other than to say that the relevant safeguard measures maintained by India were inconsistent with the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO's Agreement on Safeguards. Given that the measures at issue would expire by 13 March 2018, Japan said it hoped that the panel would observe the time frames specifically prescribed in the Dispute Settlement Understanding (DSU) in order to ensure a prompt resolution of the dispute.

India said that it was disappointed with Japan's decision to request the establishment of a panel. India had demonstrated to Japan, during consultations, how the safeguard measures at issue were WTO-consistent. In India's view this was an avoidable dispute which put an unnecessary burden on the WTO's already stretched dispute settlement resources. India called on Japan to withdraw its panel request.

In India's view, Japan's request for a special meeting of the DSB had been made without there being an underlying urgency or rationale. Regarding Japan's request for the dispute to be examined as a matter of urgency, India stressed that every dispute brought to the WTO was urgent and many were of prime economic and systemic interest. However, with the current staffing and workload issues of the WTO, members had accepted the present timelines. Therefore, any selective expedited process, merely because a measure was going to expire, would be unjustifiable. India said that it expected the WTO Secretariat as well as the panel to apply the same process and standards that were applied in all other disputes. 

The DSB agreed to establish a panel. China, the European Union, Indonesia, Kazakhstan, Korea, Qatar, the Russian Federation, Singapore, Chinese Taipei, Ukraine, the United States and Viet Nam reserved their third party rights to participate in the panel proceedings.

Next DSB meeting

The next regular meeting of the DSB will take place on 19 April 2017.

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