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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DS541: India — Export Related Measures
The United States said all WTO members, including India, are required to provide subsidies consistent with provisions of the WTO's Agreement on Subsidies and Countervailing Measures (ASCM), including refraining from providing subsidies contingent upon export performance. Regrettably, the US said, India appears to be providing such subsidies through various export promotion programmes, special economic zones and duty-free imports for the exporters programme. The US said it sought to resolve its concerns with India through prior consultations but that India was continuing to grant these export-contingent subsidies and even expanded the scope and scale of its export subsidies. In line with Article 4.4 of the ASCM, the US asked the DSB to establish a panel upon first request.
India said it was disappointed that the United States had chosen to move forward with a request for a panel, as it believed bilateral consultations held on 11 April were constructive. During the consultations, India provided a detailed understanding of the schemes implemented under India’s Foreign Trade Policy by answering all the questions raised by the US. India said the schemes identified by the US do not violate India’s WTO obligations and are in conformity with all the elements of the ASCM. India also said it had concerns with the broad and imprecise nature of the initial US request for consultations which is not in conformity with the requirements under the ASCM and the Dispute Settlement Understanding.
The DSB agreed to the establishment of the panel. The European Union, Canada, China, Egypt, Japan, Kazakhstan, Korea, the Russian Federation and Sri Lanka reserved their third-party rights to participate in the panel proceedings.
DS539: United States — Anti-Dumping (AD) and Countervailing (CV) Duties on Certain Products and the Use of Facts Available
Korea submitted its second request for the establishment of a panel, reiterating that it had serious concerns about the US authorities’ use of “facts available” in its AD and CV proceedings against certain products from Korea and more specifically that the US use of “adverse facts available” as applied in the challenged proceedings was inconsistent with US obligations under the WTO’s Anti-Dumping Agreement (ADA) and the ASCM. Korea's first request was blocked at a DSB meeting on 27 April; Korea asked again that the panel be established.
The United States said it was disappointed with Korea's decision to move forward with a request for a panel and reiterated that the determinations identified by Korea were fully consistent with WTO rules. The US also reiterated that certain challenged items were not “measures” and therefore would not fall within the scope of dispute settlement proceedings.
The DSB agreed to the establishment of the panel. The European Union, Japan, Canada, Egypt, the Russian Federation, India, Kazakhstan, China and Norway reserved their third-party rights to participate in the proceedings.
DS538: Pakistan — Anti-Dumping Measures on Biaxially Oriented Polypropylene Film from the United Arab Emirates
The United Arab Emirates noted that, on 24 January 2018, it requested consultations with Pakistan concerning its AD measures on imports of biaxially oriented polypropylene film from the UAE which appeared to be inconsistent with numerous provisions of the ADA. The UAE said it engaged in good faith consultations with Pakistan but that the talks were not fruitful, prompting its request for a panel.
Pakistan said it regretted the UAE's decision to request a panel and believed it was premature, as the two sides have not exhausted all channels in reaching a mutually acceptable solution; talks on resolving the matter were most recently held in Islamabad on 15 May and more discussions are foreseen. As a result, Pakistan said it is not in a position to agree to the establishment of a panel.
The DSB took note of the statements and agreed to revert to the matter.
DS316: European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft
The European Union first made a statement regarding its compliance with the WTO's findings in DS316, the US complaint against subsidies and other support for Airbus. The EU referred to a communication circulated on 17 May (WT/DS316/34) in which it informed the DSB that it has taken appropriate steps to bring its measures fully into conformity with its WTO obligations. Specifically, among the measures notified by the EU are contractual changes to the loan terms for the A380 and the A350XWB models of aircraft, where it was found that the repayable loans provided to Airbus for these aircrafts did not sufficiently reflect market conditions. The EU said it stands ready to engage with the US on the basis of its compliance communication to end the dispute.
The United States said the EU document does not reflect new developments that might resolve this longstanding dispute. On the contrary, the US said, six years ago the EU submitted a similar document outlining 36 "steps" taken to comply with the original panel ruling, but the compliance panel found that 34 were not steps at all and did not bring the EU into compliance.
The 17 May document now outlines 18 so-called steps, the United States said, most of them the same from the 2011 document which the Appellate Body and compliance panel found did nothing to end inconsistency with the ASCM. The EU document also contains a handful of new assertions, namely that EU member states renegotiated loans to reflect a "contemporaneous market benchmark", which are so vague they indicate nothing about what, if anything, may have been done. In light of the WTO's rulings, it is difficult to give any credence to the EU's latest assertions, the US said. Nevertheless, the US remains ready to hold serious discussions with the EU in order to reach a mutually agreed solution.
The DSB then considered adoption of the compliance panel report in DS316 as modified by the Appellate Body's 15 May ruling. The European Union said it welcomed the latest ruling, in particular the dismissal of claims that the EU and its member states provided prohibited export subsidies to Airbus and that WTO members cannot be required to remove the adverse effects of subsidies that have already expired. Thus, the EU has no compliance obligations regarding subsidies for the Airbus single-aisle aircraft and reduced compliance obligations regarding the Airbus twin-aisle aircraft and very large aircraft. The EU said the Appellate Body ruling only left it certain limited steps to take in order to ensure full compliance, which it has already achieved and outlined in the 17 May communication.
The United States said the rulings found the EU and its four member states – France, Germany, Spain and the United Kingdom - failed to bring their measures into compliance with WTO rules and continued to breach WTO obligations by providing massive amounts of subsidized financing to Airbus. These subsidies have caused adverse effects on US aircraft sales worth tens of billions of dollars; this is as true now as it was when Airbus began 50 years ago, with the latest ruling concluding explicitly that EU member states' financing of the A380 and A350 XWB were at below-market rates and resulted in massive lost sales and market share losses.
The United States said the EU's claim that some of its oldest subsidies were found to have expired does not disturb the compliance panel's findings that all of the EU launch aid financing of Airbus was subsidized and caused immense adverse effects to the interests of the US. The findings in the latest report mean only that those older subsidies created a wrong under the ASCM that no longer has a remedy, the US said.
The United States said it wanted to be clear: its preference is for a mutually agreed solution with respect to aircraft financing and that it remains ready to hold serious discussions with the EU to achieve this goal. If necessary, however, the US is prepared to move forward with a process to impose countermeasures on EU products. What is needed to resolve the dispute is not more litigation but a real desire to resolve the dispute.
Canada said it was pleased with the Appellate Body's affirmation that there is no compliance obligation with regards to subsidies that have already expired by the end of the implementation period and that only subsidies that continue to be granted or maintained are subject to remedy.
The DSB then adopted the compliance panel report in DS316, as modified by the Appellate Body.
DS486: European Union — Countervailing Measures on Certain Polyethylene Terephthalate from Pakistan
Pakistan welcomed the Appellate Body's findings that only remission on duties granted in excess of the duties that would normally be paid are countervailable subsidies. It said the findings were especially important to members using duty drawback schemes.
The European Union noted the dispute concerned duties which expired nearly three years ago and that the Appellate Body made no recommendation on implementation of the ruling.
Several members intervened to discuss whether the panel and Appellate Body should have proceeded to rule in a dispute where the measure in question no longer existed and whether the Appellate Body had an obligation under WTO rules to issue a recommendation regardless of whether the measure continued to exist or not.
The DSB then adopted the panel ruling in DS486, as modified by the Appellate Body.
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. 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.
China's technology transfer policies
The United States referred to the findings in the 200-page Section 301 report issued by the US Trade Representative and said China's state-centred, non-market policies on trade and technology transfer affect all WTO members. The policies create the legal conditions for Chinese economic actors to effectively coerce foreign companies to transfer technology to Chinese firms on non-market terms and, if left unchecked, the commercial effects of these policies will erode all member economies and long-term competitiveness, the US said.
China states that foreign companies willingly enter into these agreements, the United States said. However, China's tilting of the commercial playing field creates a lose-lose situation for these companies; they can either transfer the technology to the new China-based joint venture or they must cede access to one of the world's fastest-growing economies. China also uses these licensing and approval processes to coerce technology transfer in exchange for the numerous approvals needed to establish and operate a business in China, the US said. China needs to re-evaluate and undertake a serious change in its policies of seeking development at the expense of its trading partners, the US declared.
China said its technology transfer policies are a broad issue in nature and not the subject of dispute settlement proceedings initiated by the United States. Hence, the DSB meeting was not a suitable forum for discussing such an issue. Nevertheless, China responded to the US intervention, declaring that while the US accuses China of forcing US companies to transfer technologies by imposing joint-venture requirements, foreign equity limitations and administrative licensing procedures, nothing in China's regulatory measures requires such transfers. In fact, in the dozens of submissions made by US companies and associations for the Section 301 report, none of them identified a single Chinese regulation that requires forced technology transfer, and none of the submissions provided a piece of solid evidence that could demonstrate that the Chinese government actually forced foreign companies to transfer technology, said China.
China said the record shows that most stakeholders who made submissions to the USTR for the Section 301 report, including some of the biggest US business groups, provided positive comments on the efforts and achievements of the Chinese government in intellectual property protection. Technology transfer is a normal commercial activity, China said. The United States is the largest beneficiary of technology transfer and Chinese companies pay fair and reasonable royalties to use new technologies.
Likewise, the US accusation that China has abused joint-venture requirements, foreign ownership restrictions and administrative discretion to achieve forced technology transfer is neither based on evidence nor convincing, China said; China does impose joint-venture requirements and foreign ownership restrictions in certain areas but they are the results of negotiations between China and other WTO members, including the US, and are fully in line with WTO rules and China’s WTO commitments. China said it always respected WTO rules and would not hesitate to use WTO rules to safeguard its own legitimate rights.
The European Union, Japan and Chinese Taipei said they shared US concerns about China's policies and/or forced transfer of technology; the EU said companies are afraid to complain openly about the matter in fear that they risk retaliation. Pakistan said it agreed with China that the DSB was not the forum to discuss such matters while Brazil said it was closely following US actions and that any action under Section 301 should be consistent with WTO rules. Venezuela said it was against any action that ran counter to WTO rules
Appellate Body appointments
Mexico, speaking on behalf of 67 WTO members (including the EU 28) 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 considerable number of members backing 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 interests of WTO members, Mexico said.
The United States again said it was not in a position to agree to the proposal. For at least the past eight months the US has been raising and explaining the systemic concerns that arise from Appellate Body decisions that purport to "deem" as an Appellate Body member someone whose term of office has expired and is thus no longer an Appellate Body member, the US said. However, the DSB has not addressed this problem, said the US; it is the DSB that has the authority to appoint an Appellate Body member and to decide when their term of office expires, and so it is up to the DSB to decide whether a person who is no longer an Appellate Body member can continue to serve on an appeal. The US said it appreciated the willingness of members to engage on the issue and that it remains resolute in its view that members need to resolve the issue of continued service of former Appellate Body members as a priority.
Colombia (for the Latin American and Caribbean Group of members), Venezuela, Canada, Australia, Chinese Taipei, Thailand, Singapore, India, Norway, Pakistan, Russia, Switzerland, Brazil, Korea, Ukraine, Hong Kong China, China, Japan, Mexico, Uruguay, Honduras, Guatemala, Ecuador, Turkey, Costa Rica and New Zealand all intervened. Once again, these members 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 mentioned the dangers the continued impasse pose 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, while others reiterated that the US concerns and the appointment issue should be treated separately. Several members also called on the US to share its views and develop ideas on how to resolve its problem.
Statement by the chair regarding the possible appointment of one Appellate Body member
The DSB chair, Ambassador Sunanta Kangvalkulkij of Thailand, told members that she had received a communication indicating that Appellate Body member Shree Baboo Chekitan Servansing was interested in serving a second term. Mr Servansing's first four-year term as Appellate Body member ends on 30 September. She said she would hold consultations with members on Mr Servansing's reappointment and report back to members at the next DSB meeting.
South Africa, speaking for the African Group of WTO members, said the group was increasingly concerned by recent developments regarding the appointment of Appellate Body members. The African Group believes consultations on the reappointment of Mr Servansing should begin immediately so that the DSB is in a position to decide in September, South Africa said.
Surveillance of implementation
The United States presented a status report 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 said the US Commerce Department issued a preliminary 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", in particular its analysis underlying the CV duty determination as pertaining to certain tax credit programmes. Commerce is now reviewing comments and rebuttal comments submitted on the preliminary determination before issuing its final determination, the US said.
Korea thanked the United States for its status report but said it had some concerns about the results of the preliminary determination which do not properly address the recommendations and rulings. Korea also said it was deeply concerned that there was barely any development until now in the implementation efforts relating to the US anti-dumping measures, more than 20 months after the adoption of the panel and Appellate Body report.
The next regular meeting of the DSB is scheduled for 22 June.
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