DS522 Canada – Measures Concerning Trade in Commercial Aircraft

Brazil submitted its second request for the establishment of a panel to examine numerous Canadian measures providing subsidies to Bombardier to develop, launch and preserve its C-Series aircraft. Brazil also requested the initiation of the procedures provided for in Annex V of the WTO's Agreement on Subsidies and Countervailing Measures (SCM Agreement) to gather information on the measures and said it had already reached out to Canada to appoint an individual to carry out this task.

Canada said that it was disappointed that Brazil had again requested the establishment of a panel, that its measures were consistent with its WTO obligations, and that it was concerned with the broad and imprecise nature of Brazil's panel request. Canada said it would engage with Brazil to identify an individual pursuant to Annex V of the SCM Agreement.

The United States said that it was pleased to see that Brazil and Canada had agreed to initiate the Annex V procedures which, in its view, required positive consensus for initiation.

The DSB agreed to establish a panel. China, the European Union, Japan, the Russian Federation, Singapore and the United States reserved their third party rights to participate in the panel proceedings.

DS490 and DS496 Indonesia — Safeguard on Certain Iron or Steel Products

The panel reports pertaining to DS490 and DS496 were removed from the DSB agenda following Indonesia's decision to appeal the reports.

DS472 and DS497 Brazil — Certain Measures Concerning Taxation and Charges

The panel reports pertaining to DS472 and DS497 were removed from the DSB agenda following Brazil's decision to appeal the reports.

DS442 European Union — Anti-Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia

Indonesia said that it was pleased the Appellate Body had upheld the panel's ruling on Article 6.7 of the WTO's Anti-Dumping (AD) Agreement and that the Appellate Body had rejected the EU's procedural arguments regarding Indonesia's right to bring the appeal in its ruling circulated on 5 September. However, Indonesia expressed serious concerns regarding the manner in which the panel and the Appellate Body had failed to engage with Indonesia's claim under Article 2.4 of the AD Agreement, which was not addressed at all. Indonesia also criticised the Appellate Body's "case-by-case" approach in determining the significance of corporate affiliation under Article 2.4 of the AD Agreement.

The European Union recalled that the anti-dumping measures in question had expired in November 2016 but that this dispute would provide useful clarifications on certain provisions of the AD Agreement. The EU welcomed the Appellate Body's confirmation that EU authorities had acted consistently with Article 2.4.

The United States said it was concerned that the Appellate Body appeared to have created an exception to a mandatory requirement to "recommend" that any measure found to be WTO-inconsistent be brought into conformity with WTO rules.  The United States also said that two Appellate Body members reviewing the appeal  - Mr Hyun Chong Kim and Mr Ricardo Ramírez-Hernández – were no longer Appellate Body members at the time the Appellate Body report in this dispute was circulated. Thus the report had not been circulated on behalf of three Appellate Body members as required by Articles 17.1 and 17.5 of the WTO's Dispute Settlement Understanding (DSU). Because the report had not been issued consistently with Article 17 of the DSU, it could not be an "Appellate Body Report" subject to the "negative consensus" adoption rule of Article 17.14; rather the DSB would have to adopt the report by positive consensus pursuant to Article 2.4 of the DSU. While the United States did not endorse the findings of the "Division's Report", it said it would allow the parties to secure a positive settlement of their dispute and was willing to join a consensus to adopt the reports.

The European Union said that it did not agree with the US interpretation of the DSU and noted that most members did not feel this was an issue. The EU said the dispute was being adopted under negative consensus which was a central feature of the system and could not be undermined. Canada disagreed with the US suggestion that the service of Mr Kim and Mr Ramírez undermined the negative consensus rule on this appeal. Brazil endorsed the EU and Canadian statements and noted that the report had been signed by all three Appellate Body members while they were still members.

Japan said that, because the parties to this dispute supported the adoption of the Appellate Body report, Japan could deem Mr Kim to have completed the disposition of the appeal and would join in adopting the reports of the panel and Appellate Body. New Zealand said that the outcome of any discussions in relation to the US concerns could only be applied on a prospective basis and should not affect any decisions or proceedings involving Appellate Body divisions that had already been composed.

The United States said that it did not consider the report to be an Appellate Body report subject to Article 17.14 of the DSU. Therefore the DSB's action was the adoption of the report contained in WT/DS442/AB/R and Add.1 and the report contained in WT/DS442/R and Add.1, as modified. The EU said that the DSB had discussed the issues surrounding Mr Kim's departure and had not decided that it raised a problem for the adoption of this report. 

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

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 European Union said it had adopted the necessary measures to comply with the findings in DS473, “EU – Anti-dumping Measures on Biodiesel from Argentina” by the 28 September 2017 implementation deadline.  Argentina said it was pleased the EU had brought itself into compliance but expressed its concern with an EU Biodiesel Board announcement seeking a subsidy investigation on Argentine biodiesel exports.

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.
Antigua and Barbuda said it was unfortunate that, after 14 years, the United States was still not able to offer reasonable settlement terms in DS285, "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services".  Since November 2016, and despite many overtures, Antigua and Barbuda's communications with the United States have gone unanswered. The country has suffered trade revenue losses exceeding US$ 200 million as a result of US measures. In addition, the island of Barbuda suffered extensive damage, estimated at US$ 250 million, after being devastated by Hurricane Irma. Antigua and Barbuda said that there would be no better time than now for the United States to settle this long-running dispute. It would be regrettable if Antigua and Barbuda had to suspend the payment of US intellectual property rights, it added.

The United States expressed its deep sympathy to Antigua and Barbuda regarding the devastation caused by Hurricane Irma. The United States said it had been reviewing Antigua's most recent communications and was working towards identifying a productive way forward.

Jamaica, Barbados, the Dominican Republic and Cuba stressed the importance of members implementing WTO rulings and urged the parties to this dispute to come to a reasonable settlement. Antigua and Barbuda noted the latest US statement was the same as its past statements and said that it would be requesting a formal negotiation with the United States on this matter.

Appellate Body matters

The DSB chair, Ambassador Ihara, reported on the 15 September 2017 informal DSB meeting where the United States provided more detail regarding the systemic issues it had raised regarding the service of former Appellate Body members on ongoing appeals and why it was not in a position to agree to start any selection process for new Appellate Body members until its concerns were addressed. Other members had reiterated their concerns about the DSB's failure to launch the selection processes. Several delegations had asked the United States to provide additional details of its concerns and to submit concrete proposals.  Many delegations had expressed concerns about the linkage that the United States had made. A number of delegations had indicated their willingness to discuss the United States' systemic concerns.

The chair said that consultations would continue and he invited delegations with views to contact him. He called for more concrete and flexible ideas, stressed the urgency of filling the vacancies and urged all members to show more flexibility and creativity to launch the process as soon as possible.

The United States said that because many of the interventions at the informal meeting were focused on process issues, it did not have a clear vision of delegations' views on its concerns. However, it had not heard any disagreement that the concerns were worthy of DSB consideration. If the DSB decided Mr Ramírez should continue to serve on an appeal (despite his second and final term ending on 30 June) it would have to provide an appropriate legal basis for him to do so.

Many members expressed their concerns with the current situation and said that the launching of the selection processes should not be linked to resolving the US issues – these could be dealt with on separate tracks. Several asked the United States to propose a concrete solution, while one delegation asked the chair to promptly initiate the selection processes. China said that it disagreed with the validity of the US concerns and that the continuation of Mr Ramírez's service was well within the Appellate Body's mandate set out by Rule 15 of the Working Procedure for Appellate Review. The US position risked undermining the dispute settlement system, China added.

Mexico, speaking on behalf of itself, Argentina, Brazil, Colombia, Chile, Guatemala and Peru, said that the group's revised proposal to launch the selection process sought to fill all three current/upcoming vacancies on the Appellate Body. Mexico said that they were flexible regarding the deadlines suggested in the proposal so long as the processes were launched without delay. The European Union noted that the group's proposal was nearly identical to that of the EU and that it was willing to join a consensus on either proposal.

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, it said.

A number of delegations expressed their concern about the effects of the Appellate Body vacancies on the dispute settlement system and that the DSB was obliged, pursuant to Article 17.2 of the DSU, to fill vacancies as they arise.  And while some delegations noted their willingness to discuss the US concerns, many noted that those concerns should be dealt with separately from the selection process.

Once again speaking for its proponent group, Mexico said it did not believe it was acceptable to link US concerns with the launching of the selection process and that this seemed to be a unanimous position in the DSB. The group joined Ecuador and Chile (on behalf of the Group of Latin American and Caribbean Countries) in calling on the chair to launch the selection processes.

The chair regretted the DSB was unable to achieve any conclusion on this matter and said he would make himself available for continuous consultations on this issue. He encouraged members to have more conversations and dialogue among themselves so that the DSB could come up with more concrete ideas to move forward.

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 will take place on 24 October.