DISPUTE SETTLEMENT

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.

More

  

DS526: United Arab Emirates – Measures relating to Trade in Goods and Services, and Trade-related Aspects of Intellectual Property Rights

Qatar referred to its statements at the last DSB meeting on this matter and requested the establishment of a panel for a second time. It said the UAE had refused all consultations and had acted unilaterally, in gross disregard for the rights of Qatar and other members. The measures adopted by the UAE and some other members were discriminatory, prevented freedom of transit and frustrated the majority of trade between Qatar and those members, it said.

The United Arab Emirates regretted Qatar's panel request. It, along with eight other countries, had been forced to take measures in response to Qatar's funding of terrorist organizations, it said. This was not a commercial dispute; the measures had been taken to protect the UAE's essential security interests in full conformity with WTO rules. The UAE could not agree to the establishment of a panel and said that the WTO had no authority to second guess a member's determination of its national security interests.

Bahrain, Saudi Arabia, Yemen and Egypt supported the UAE's statement, saying that members had the sole right to determine whether measures were necessary to protect their essential security interests, and that the WTO dispute settlement system was not able to resolve these types of disputes.

The United States noted that this dispute was political in nature, was inappropriate for WTO dispute settlement and urged the parties to hold constructive discussions towards resolving this dispute, possibly with the assistance of the Director-General's good offices. Canada said it believed a negotiated, political solution remained possible and encouraged both parties to engage proactively and constructively with one another before proceeding to the next phase of the dispute; it supported the idea of the parties seeking the good offices of the Director-General. Korea said the most effective and fastest path to resolving this dispute would be a political one, which is not within the remit of the WTO; it is essential to find a bilateral political agreement among the relevant parties to resolve this dispute, which in turn would make WTO dispute proceedings unnecessary. China said that where a security exception had been invoked, members should first determine whether the resolution of the dispute at issue could be achieved through the WTO dispute settlement system. At the same time, members should fulfil their WTO obligations.

Qatar said that it had continued to respect its WTO commitments, including supplying the UAE with essential energy-related products. The security exceptions in the covered agreements were subject to multilateral review and the UAE and Saudi Arabia were incorrect in believing otherwise. The UAE responded that issues of national security were political matters not capable of review by the WTO dispute settlement mechanism. Members retained the authority to self-determine matters they deemed necessary to their essential security interests and had broad discretion to do so, the UAE argued.

The DSB agreed to establish a panel to examine Qatar's complaint. Afghanistan, Australia, Bahrain, Canada, China, Egypt, the European Union, Guatemala, Honduras, Japan, Kazakhstan, Korea, Norway, the Philippines, the Russian Federation, Saudi Arabia, Singapore, Chinese Taipei, Ukraine, the United States and Yemen reserved their third party rights to participate in the panel proceedings.

DS484: Indonesia – Measures Concerning the Importation of Chicken Meat and Chicken Products

Brazil said it was pleased with the panel's findings in DS484. Indonesia had been found to be in breach of the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) regarding unjustified delays in the sanitary recognition process for Brazilian exporters. The panel had also found that the Indonesian import licensing regulations created unjustified restrictions on trade. The successful outcome of the proceedings reinforced the importance of having a functional WTO dispute settlement system, Brazil said.

Indonesia noted that it and Brazil had decided not to appeal the panel report. This reflected the mixed results of the dispute which concerned the consistency of two categories of Indonesian measures with the General Agreement on Tariffs and Trade (GATT) 1994, the Agreement on Agriculture, the Import Licensing Agreement and the SPS Agreement. The panel found that Brazil had not demonstrated the existence of an unwritten overarching import prohibition resulting from the combination of several different measures, Indonesia said. The panel had also delivered mixed findings with regard to six individual measures. The majority of the adverse findings related to measures that had already been addressed, it added.

The United States highlighted its concern with the panel's approach regarding measures adopted after the DSB had established the panel's terms of reference.  Post-establishment activity should not have altered the scope of the measures considered by the panel. Canada said that it would be too easy to escape the jurisdiction of a panel if the panel had no authority to rule on an amended measure that had a close nexus to the original measure subject to the panel's mandate.

The DSB adopted the panel report. 

DS477 and DS478: Indonesia – Importation of Horticultural Products, Animals and Animal Products

New Zealand thanked Indonesia for the constructive approach it had taken during this dispute. The panel and Appellate Body findings confirmed that Indonesia's import regimes for horticultural and animal products were WTO-inconsistent. New Zealand welcomed the adoption of the reports and it looked forward to working with Indonesia towards achieving prompt compliance.
The United States said the dispute concerned 18 separate measures that Indonesia had imposed through its import licensing regimes on the import of horticultural and animal products. The panel had found that all 18 measures were WTO-inconsistent, which was confirmed on appeal. The US said it was disappointed, however, that the "Division's report" had addressed certain issues that were not necessary to resolve the dispute. This used the Appellate Body's scarce resources unnecessarily and was inconsistent with the role of the dispute settlement system.
Regarding the adoption of the report, the US noted that one Division member, Mr Ricardo Ramírez-Hernández, had continued to serve on the Appellate Body without the DSB having taken any action to permit him to do so. The report had thus not been issued pursuant to the requirements of Article 17 of the Dispute Settlement Understanding (DSU) and could not be an "Appellate Body report" subject to the adoption procedures in Article 17.14. As such, the US invited members to join a "positive consensus", i.e. no objection raised by any member, to adopt the reports.

Indonesia noted that this dispute had raised issues of critical importance. Unfortunately the Appellate Body had not accepted its arguments. However, Indonesia accepted the findings and supported the adoption of the Appellate Body report by "negative consensus", under which the adoption of a report can only be blocked if all members in attendance reject it. Indonesia would need considerable time to bring itself into compliance with the rulings. Brazil noted the fact that three members had brought disputes against Indonesia on similar issues highlighted how closed Indonesia's market was.

New Zealand, Canada, Australia, Brazil, Chinese Taipei, the European Union, Mexico, Guatemala and Turkey said that the reports in this dispute would be adopted via negative consensus. Brazil, Chinese Taipei, China and Mexico noted that Rule 15 of the Working Procedures for Appellate Review was a long-standing rule that had been applied without issue and which allowed Mr Ramirez to continue to serve on the Appellate Body. New Zealand said that any review of Rule 15 could only be done on a prospective basis. Chinese Taipei noted that no parties had raised the issue of Rule 15 before or during the appeal.

The DSB adopted the Appellate Body reports and panel reports, as modified by the Appellate Body.

Surveillance of implementation

The United States presented its status reports with regard to DS184, “US — Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan”, and DS160, “US — Section 110(5) of the US Copyright Act”. The European Union presented its status reports with regard to DS291, “EC — Measures Affecting the Approval and Marketing of Biotech Products”. Canada presented its status report with regard to DS482, "Canada – Anti-dumping Measures on Imports of Certain Carbon Steel Welded Pipe from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu".

The United States said that it had provided a status report regarding DS464, "US - Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea", and that it continued to consult with interested parties on options to address the DSB's recommendations. Korea said that it was concerned about whether the US would bring its measures into compliance before the expiry of the deadline for implementation on 26 December 2017. The US had not provided any information in this regard and Korea had not observed the US taking any of the steps it would need to take to bring itself into compliance, Korea said. The US said that it had taken action and that consultations on this matter were ongoing.

Statements on implementation

The EU, Canada and Brazil made statements regarding US implementation of DS217 and DS234, “US — Continued Dumping and Subsidy Offset Act of 2000”. The United States reiterated its view that it had taken all actions necessary to comply with the rulings.

Appellate Body matters

The DSB chairman, Ambassador Junichi Ihara of Japan, said that, while informal consultations over the present impasse on the launch of selection processes for new Appellate Body members continued to be held at both the political and technical level, a sense of mutual trust had yet to be forged among key WTO members. He urged members to continue the informal, exploratory, technical discussions that had been taking place in order to find concrete ideas and viable solutions.

Mexico, speaking on behalf of the proponents of a new joint proposal to initiate the selection processes (WT/DSB/W/609), expressed its concern with the delay. Mexico introduced the proposal, which sought to launch the processes to fill all three Appellate Body vacancies. The proponents were flexible regarding the process deadlines.

The United States said that it could not consider launching a selection process to fill a vacancy on the Appellate Body if the person to be replaced continued to serve and decide appeals. The DSB would need to take appropriate action first. The US has been consulting with members in this regard.

A number of delegations expressed their concern about the effects of the Appellate Body vacancies on the dispute settlement system. Several delegations pointed out the obligation on the DSB, pursuant to Article 17.2 of the DSU, to fill vacancies as they arise. Chinese Taipei and Nigeria (for the African Group) noted the heightened importance of the dispute settlement system for smaller members.

While several delegations, including the European Union, noted their willingness to engage with the US on its concerns, many said that the resolution of those concerns should not be linked to launching the selection process. Brazil did not see what benefit would be derived from modifying Rule 15 of the Working Procedures for Appellate Review. Japan said that members needed to discuss which organ of the dispute settlement system, the Appellate Body or the DSB, was responsible for the legal status of an Appellate Body member during a transition.

Various delegations expressed their support for the joint proposal, urged members to be flexible, and/or called for the selection process to be launched without delay. Other delegations called on the chair to continue to work towards a solution. The EU said that it wished to send a strong message of thanks to the Appellate Body and encourage its continued work despite the present situation.

The chair regretted that the selection processes had not been launched. He said he would continue his consultations, and report back in January 2018, but he also called on members to have more conversations. While the resolution of these issues would require more political consultations, conversations among members would help build confidence and create concrete ideas to address them.

Report on the dispute settlement workload

The chair provided members with an update on the WTO's dispute settlement workload.

Next meeting

The next regular meeting of the DSB is scheduled for 22 January 2018.

Share


Share


  

Problems viewing this page? If so, please contact webmaster@wto.org giving details of the operating system and web browser you are using.