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.

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DS545: United States — Safeguard measure on imports of crystalline silicon photovoltaic products

DS546: United States — Safeguard measure on imports of large residential washers

Korea submitted its second requests for WTO panels regarding the safeguard measures imposed by the United States on imports of certain crystalline silicon photovoltaic products and large residential washers. Korea's first requests were blocked by the US at a DSB meeting on 27 August. Korea said it considers that the US safeguard measures are inconsistent with US obligations under the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO's Safeguards Agreement.

The United States said WTO rules allow members to temporarily suspend concessions when a product is being imported into its territory in such increased quantities and under such conditions as to cause injury, or threat of serious injury, to the member's domestic industry.  The US has exercised this right with regards to the two measures, which are based on the findings of an independent authority that determined the imports were causing serious injury to US producers of the two products.  The US said it regretted Korea's decision to submit the second requests but was prepared to engage in the proceedings.

The DSB agreed to the establishment of the two panels.

Japan, Chinese Taipei, the Russian Federation, Malaysia, Singapore, Viet Nam, Thailand, the European Union, Norway, Mexico, Canada, China, Kazakhstan, Egypt, India, and the Philippines reserved their third party rights to participate in the DS545 proceedings.

Japan, the EU, Kazakhstan, the Russia Federation, Egypt, India, Norway, Brazil, Thailand, China and Viet Nam reserved their third party rights to participate in the DS546 proceedings.

DS537: Canada — Measures Governing the Sale of Wine

Australia submitted its second request for a panel in its complaint concerning measures maintained by the Canadian government and the Canadian provinces of British Columbia, Ontario, Quebec, and Nova Scotia governing the sale of wine; Australia's first request was blocked by Canada at the 27 August DSB meeting. Australia said consultations which took place on 1 March and subsequent informal technical discussions with Canada failed to resolve the matter, prompting Australia to submit its request for a panel.  Australia said that while it remains ready to engage in discussions with Canada, it is disappointed that Canada has not taken any concrete steps to resolve its concerns.  Australia noted that a panel has already been established by the DSB in a similar complaint against Canadian wine restrictions brought by the United States (DS531) and that it believed it appropriate that the disputes be procedurally linked by creating separate but harmonized panels, with the same three panelists serving on the two panels.

Canada said it was deeply disappointed with Australia's decision to request a panel, and that it remained open to discussions with Australia on the matter. Canada reiterated that it had serious concerns about deficiencies in Australia's initial request for consultations which were repeated in the request for a panel. 

The United States said it fully supports Australia's request for the establishment of a panel restrictions and supports Australia's request for harmonized proceedings with the same panelists, given that Australia makes identical claims concerning the same measures in its dispute with Canada.  Canada however said the parties should meet to discuss harmonization, since its concerns with the deficiencies in Australia's request is likely to raise procedural difficulties if the two proceedings are harmonized.

The DSB agreed to the establishment of the panel.  The United States, Russia, Mexico, Korea, India, South Africa, Chinese Taipei, China, Chile, the EU, and Argentina reserved their third party rights to participate in the proceedings.

DS553: Korea — Sunset Review of Anti-Dumping Duties on Stainless Steel Bars

Japan submitted its first request for a panel challenging Korea's sunset review of an anti-dumping duty order on stainless steel bars from Japan, a review which resulted in the continuation of the duties.  Japan said it considers Korea's measures to be inconsistent with the GATT 1994 and the WTO's Anti-Dumping Agreement; in particular, Korea failed to demonstrate the link between the expiry of the duties and a continuation or reoccurrence of injury.  Japan also questioned Korea's use of third party data regarding the production capacity of Japanese exporters. Consultations between Korea and Japan took place on 13 August but the two sides failed to resolve the dispute, prompting Japan to request the establishment of a panel. 

Korea said it regretted Japan's decision to request a panel and not to continue the constructive dialogue they had engaged in.  The Anti-Dumping Agreement gives WTO members the right to take anti-dumping measures to counteract dumping which is causing injury and to maintain such measures if there is a likelihood of continuing/reoccurring injury.  The Korean authorities determined through an objective review that this was highly likely to be the case if the duties were terminated.  Korea also said Japan's request failed to clearly identify the measures challenged and unduly expanded the scope of the matter to include issues not raised in the previous consultations. As a result, Korea said it respectfully disagreed to the establishment of a panel.

The DSB took note of the statements and agreed to revert to the matter.

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, Canada and Chile 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 matters

Statement by China regarding concerning Article 17.6 of the Dispute Settlement Understanding

China delivered a statement in which it addressed US concerns raised at the 27 August DSB meeting regarding what the US said was the Appellate Body exceeding its mandate under Article 17.6 of the Dispute Settlement Understanding (DSU) by reviewing and even reversing a panel's findings of facts, including domestic or municipal law.  China disagreed with the US assessment; WTO panels are obliged to carry out an objective assessment of facts in accordance with Article 11 of the DSU, and the Appellate Body can review whether a panel properly discharged its objective assessment obligations. Most WTO members, if not all, agree that the manner of a panel's fact-finding is within the scope of appellate review and that members have frequently asked the Appellate Body to review fact-finding by panels – including the US, which has requested such appellate reviews in a number of dispute cases, China said. In regards to its reviews of domestic/municipal law, China said the Appellate Body has correctly drawn a line between a panel's findings on the meaning of municipal law and its findings on the characterization of municipal law.  This line is not easy to draw in practice, and there is no clear-cut rule with respect to drawing this line.

The United States reiterated its belief that the Appellate Body lacks authority to review a panel's finding of fact.  While Article 11 gives panels the authority to make factual and legal findings, Article 17.6 expressly limits the scope of the Appellate Body's review to issues of law covered in the panel report and legal interpretations developed by the panel.  The Appellate Body's decision to engage in review of fact-finding has had adverse effects on the WTO's dispute settlement system, including an increased workload, increased complexity of appeals, and more time and resources needed to handle such appeals. In regards to municipal law, the US said the Appellate Body's treatment of this issue departs from the agreed text of the DSU and is a serious waste of the WTO dispute settlement system's limited resources.

Japan, Brazil, Canada, Mexico, the European Union and Chile all intervened and said they remained open to discussing this issue further.

Appellate Body appointments

Mexico, speaking on behalf of 68 WTO members, once again 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 latest request covers the impending vacancy arising from the departure of Mr. Shree Baboo Chekitan Servansing, whose four-year term of office will expire on 30 September. The considerable number of members supporting the proposal reflects a common concern with the current situation in the Appellate Body that is seriously affecting its workings and the overall dispute settlement system against the best interest of its 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.

Twenty-four members made statements.  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 delegations expressed their regret on the lack of consensus to reappoint Mr. Servansing and cited the growing dangers the continued impasse posed not only to the dispute settlement system but the WTO as a whole.

Statement by Honduras – Fostering a discussion on the functioning of the Appellate Body

Honduras presented to WTO members its ideas for addressing one of the concerns raised by the United States regarding the Appellate Body – the practice of allowing Appellate Body members whose terms have expired to continue working on cases without the DSB's approval. The practice is set out under Rule 15 of the Working Procedures for Appellate Review. Honduras said that as a small developing country active in dispute settlement, it attached great importance to the Appellate Body, whose survival is at stake.  Honduras said that there are currently no specific criteria under Rule 15 for determining when an Appellate Body member should continue to work on an appeal and outlined what it said were "objective and reasonable" criteria for consideration by the membership. 

Twenty-three members took the floor to comment on the proposal.  These members welcomed the initiative from Honduras and noted that the paper contained some possible options for addressing the issue.  The United States said it looked forward to hearing other members' views on the options. Honduras thanked members that had expressed interest in its initiative asked for a dedicated open-ended meeting to continue the discussions.

Surveillance of implementation

The United States presented status reports with regard to DS184, US — Anti-Dumping Measures on Certain Hot-Rolled Steel Products from JapanDS160, United States — Section 110(5) of US Copyright Act, and DS464, United States — Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea, while the European Union presented status reports with regard to DS291, EC — Measures Affecting the Approval and Marketing of Biotech Products.

The United States said that it continued to consult with interested parties on options for implementing the WTO's ruling in DS471, United States — Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China. China noted that the deadline for the United States to comply with the ruling expired on 22 August, that it was very disappointed with the continued US inaction on the matter, and that it had requested WTO authorization to suspend concessions against the US for non-compliance with the ruling.

The United States said it continues to consult with interested parties on options for addressing the findings of the WTO ruling in DS488, US — Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea. The US and Korea earlier agreed that the deadline for implementing the ruling would be 12 January 2019.  Korea said there was insufficient information on the steps the US is taking to comply with the ruling.        

Indonesia noted that the deadline for implementation of the WTO's findings in DS484, Indonesia — Measures Concerning the Importation of Chicken Meat and Chicken Products, expired on 22 July.  Indonesia said that it has taken the necessary steps to adjust the relevant measures by amending two relevant regulations.  Brazil said it had concerns about Indonesia's continued application of certain restrictive import licensing practices, and its continued failure to recognize Brazilian veterinary health certification for exported chicken.

The EU noted that it still had one month to comply with the WTO ruling in DS480, European Union — Anti-Dumping Measures on Biodiesel from Indonesia, and that it expected implementation to be finalized in the near future.  Indonesia expressed hope that implementation would be done in time and in line with the WTO ruling.

Other business

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

Indonesia said it would need a reasonable period of time to comply with the WTO's ruling in DS490 and DS496.  Chinese Taipei said the best thing would be for Indonesia to remove the safeguard at the earliest possible time while Viet Nam said it was ready to discuss with Indonesia a specific time frame for ensuring compliance.

Next meeting

The next regular meeting of the DSB will take place on 29 October.

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