DS531: Canada — Measures Governing the Sale of Wine in Grocery Stores (second complaint)

The United States reiterated that it had serious concerns with regulations in the Canadian province of British Columbia (BC) governing the sale of wine in grocery stores. The US said the BC regulations exclude all imported wine from grocery store shelves, an important retail channel for wine sales in the province, and were inconsistent with WTO non-discrimination rules.  These restrictions limit sales opportunities for US wine in Canada and provide a substantial competitive advantage for BC wines.  The US was thus submitting its second request for the establishment of a panel.

Canada regretted the US decision to submit its second request and questioned the commercial rationale for the action, noting that imported wines account for around 90% of all wine sales in Canada and that there were almost a thousand points of sale for imported wine in BC alone.  Nevertheless, Canada said it was prepared to defend the measures before a panel.

The DSB agreed to the establishment of a panel.  The European Union, Australia, New Zealand, Israel, Chinese Taipei, Russia, Argentina, Chile, China, Korea, India and Mexico reserved their third party rights to participate in the proceedings.

DS536: United States — Anti-Dumping Measures on Fish Fillets from Viet Nam

Viet Nam said it did not wish to repeat the points it raised when it first requested a panel on the matter at the DSB meeting in June other than to note that the claims in the consultations had been subject to prior WTO dispute settlement and that each claim had been resolved in a manner favorable to Viet Nam.  At a time when the WTO's dispute settlement mechanism is already overburdened, Viet Nam said the case should be settled without going to a panel.  However, Viet Nam has not received any positive response from the United States to resolve the matter, prompting it to request the establishment of a panel for the second time.

The United States said it was disappointed that Viet Nam has chosen to move forward with its second request and said that some of the items being challenged do not fall within the scope of dispute settlement proceedings.  The US said it would vigorously defend its rights to adopt anti-dumping measures with respect to unfairly traded imports.

The DSB agreed to the establishment of a panel. The European Union, Japan, China, India, Canada, Russia, Thailand, Egypt, Singapore and Malaysia reserved their third party rights to participate in the proceedings.

DS234: United States – Continued Dumping and Subsidy Offset Act of 2000

The European Union reiterated its request that the United States cease transferring anti-dumping and countervailing duties to the US domestic industry, arguing that every such disbursement was a clear act of non-compliance with the DSB's recommendations and rulings on the matter. Brazil and Canada thanked the EU for keeping the item on the agenda and called on the US to fully comply. The United States referred to its previous statement and said it had taken all action necessary to comply with the DSB's recommendations and rulings.

Appellate Body appointments

Once again Mexico, speaking on behalf of 67 WTO members (including the EU 28), introduced a proposal calling for the establishment of a Selection Committee for the appointment of new Appellate Body members, the submission of candidates within 30 days and the issuance by the committee of recommendations within 60 days.  The considerable number of members backing the proposal reflects a common concern with the current situation in the Appellate Body – which is operating with only four of seven members - that is seriously affecting its workings and the overall dispute settlement system against the best interests of WTO members, Mexico said.

The United States again said it was not in a position to agree to the proposal. As it explained in previous meetings, the US said the systemic concerns it has identified remain unaddressed, such as the concerns that an individual who is not currently an Appellate Body member continues to decide appeals. It is the DSB, not the Appellate Body, which has the authority to decide whether a person who is no longer an Appellate Body member can continue to serve on an appeal. The US said it will continue its efforts and its discussions with WTO members and with the DSB chair to seek a solution.

South Africa (for the African Group), the European Union, Costa Rica (for the Latin American/Caribbean, or GRULAC, group) Canada, Japan, Pakistan, Australia, New Zealand, Norway, Switzerland, Russia, Chinese Taipei, Hong Kong China, Chile, Thailand, Brazil, Singapore, Ecuador, Korea, Mexico (on its own behalf), Uruguay, Egypt, Turkey and Venezuela all intervened. Nearly all of the delegations referred to their previous statements on the matter.  In general, these delegations reiterated their concerns with the continued impasse regarding the appointment of new Appellate Body members and urged all members to show flexibility in order to resolve the deadlock as soon as possible. 

Several members mentioned the growing dangers the continued impasse posed not only to the dispute settlement system but the WTO as a whole, and that members had an obligation under the WTO rules to initiate the process.  Others reiterated that the US concerns and the appointment issue should be treated separately, and some said the US should put forward ideas on how to resolve the problem.

Statement by the chair regarding the possible appointment of one Appellate Body member

The DSB chair said that she was continuing consultations with members on whether Appellate Body member Shree Baboo Chekitan Servansing should be given a second term, and would report back at the next DSB meeting in August. She invited any delegation with views on the matter to contact her directly. Mr. Servansing's first term as Appellate Body member ends on 30 September.

Surveillance of implementation

The United States presented status reports with regard to DS184, “US — Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan”, and  DS160, "United States — Section 110(5) of US Copyright Act", while the European Union presented a status report with regard to DS291, “EC — Measures Affecting the Approval and Marketing of Biotech Products”.

The United States told members that on 4 June the US Commerce Department issued a final determination revising certain aspects of its original determination at issue in DS464, "United States — Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea". Specifically, Commerce revised the analysis underlying the original determination as it pertains to tax credit programmes, in accordance with the WTO ruling.  The United States continues to consult with interested parties on options to address the recommendations relating to anti-dumping measures challenged in the dispute, it added.

Korea said it was questionable whether results of the final determination properly reflected the rulings and recommendations of the DSB; it also expressed its serious concern about the absence of US implementation efforts relating to the anti-dumping measure at issue until now, more than 22 months after the DSB's adoption of the ruling.  Canada said it was deeply disappointed that, despite the expiry of the deadline to comply, the US continues to collect cash deposits from Canadian exporters based on a methodology that was found to be “as such” inconsistent with WTO obligations in this dispute.

Other business

Honduras said it was taking the initiative to put forward an informal paper aimed at fostering discussions among members regarding concerns with the functioning of the Appellate Body. Honduras said it believes the WTO dispute settlement system is crucial to the satisfactory functioning of the WTO and that it was vital that all members start engaging on the issue in a constructive manner. 

While there are several issues related to the functioning of the Appellate Body that must be resolved, Honduras said that the talks should start by addressing two core issues regarding Rule 15 of the Appellate Body Working Procedures:  the parameters governing the extension of Appellate Body members' terms in order to allow members to finish appeals they are working on; and who decides on the extension of the terms. Honduras underlines that the only way to find a solution is through constructive dialogue and the engagement of all members.

The United States, Australia and Canada all thanked Honduras for the initiative and agreed on the need for constructive dialogue and engagement.

On another matter, China noted that the reasonable period of time for the United States to implement the panel and Appellate Body findings in DS471 ("United States — Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China") would expire on 22 August.  China said it was deeply concerned that there were no apparent steps being taken by the US to ensure compliance and urged the US to ensure implementation. The United States replied that it was aware of the upcoming deadline but said China was incorrect to say that the US was taking no action on the matter; the US also said it would be submitting a status report on implementation at the next DSB meeting in August.

Additionally, the United States said it was disappointing that the European Union had not provided a status report concerning the dispute "EU – Large Civil Aircraft" (DS316). The US noted that, for many years, the EU has taken the position that, under the Dispute Settlement Understanding's Article 21.6, a responding party member is required to provide a status report whenever a complaining party member disagrees with the responding party’s claim that it has complied – as the US has done in DS316, where it said the EU has provided the United States with no information to support its claim of compliance.

The US therefore recently requested a WTO arbitrator to resume its work to determine the level of countermeasures it could impose on the EU for non-compliance. Given the disagreement on compliance between the parties, the EU should, to be consistent with the view it has taken when it is a complaining party, now be providing status reports, the US said.

The EU responded that it does see a difference with the DS316 dispute; since the case is under adjudication and compliance proceedings are pending, no status report needs to be provided, the EU argued.

Next meeting

The next regular meeting of the DSB will take place on 27 August.