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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DS538: Pakistan — Anti-Dumping Measures on Biaxially Oriented Polypropylene Film from the United Arab Emirates

The United Arab Emirates submitted its second request for a panel to examine Pakistan’s anti-dumping measures on imports of biaxially oriented polypropylene film from the UAE. The UAE’s first request was blocked by Pakistan at a DSB meeting on 28 May. The UAE said the measures were inconsistent with numerous provisions of the WTO's Anti-Dumping Agreement (ADA) and that bilateral discussions had failed to resolve the dispute.

Pakistan said it regretted the UAE's decision to submit a second request for a panel and said all possible alternatives to resolving the dispute should have continued. Pakistan is still prepared to discuss the matter with the UAE but will also defend the measures before the panel.

The DSB agreed to establish the panel. The United States, the European Union, China, Saudi Arabia, Japan, the Russian Federation and Afghanistan 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 second 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’s first request was blocked by Korea at a DSB meeting on 26 September. Japan reiterated that it considers Korea's decision to maintain the duties to be in violation of the General Agreement on Tariffs and Trade (GATT) 1994 and the ADA; as the inconsistency remains, Japan once again asks that a panel be established.

Korea said it regretted Japan's decision to request a panel and noted its willingness to continue a constructive dialogue on the matter, but also said it would vigorously defend what was its WTO-consistent measure.

The DSB agreed to establish the panel. The United States, the European Union, China, India, Kazakhstan, Russia and Chinese Taipei reserved their third-party rights to participate in the proceedings.

DS475: Russian Federation — Measures on the Importation of Live Pigs, Pork and Other Pig Products from the European Union

The European Union requested the establishment of a compliance panel to examine whether measures taken by the Russian Federation to implement a WTO dispute ruling regarding Russia’s import bans on live pigs and pork products from Lithuania, Poland, Latvia and Estonia as well as the EU-wide import ban on live pigs and certain pork products brought the original measures at issue into conformity with Russia’s WTO obligations. 

A WTO panel and the Appellate Body found the measures were inconsistent with various provisions of the WTO’s Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and the DSB later recommended Russia bring the measures into conformity with its obligations under the Agreement. The EU said it regretted Russia's repeated failure to open its market to EU pig products despite the WTO ruling and despite the EU's openness to resolving the matter through consultations.

Russia said it was disappointed with the EU's decision to request a panel and noted that on 8 December 2017 it informed WTO members that it had implemented the ruling in full and within the required deadline. There is no legal basis for the compliance panel request, Russia argued; thus it was not in a position to accept the establishment of a panel.

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

DS542: China — Certain Measures Concerning the Protection of Intellectual Property Rights

The United States submitted its first request for a panel to examine certain Chinese measures pertaining to the protection of intellectual property (IP) rights. The US said China agreed when it joined the WTO to provide certain protections for IP rights, among them to protect the exclusive rights of patent holders and to accord to nationals of other WTO members treatment no less favourable than it accords to its own nationals with regards to protection of IP rights. 

However, China's policies consistently seek to disadvantage foreign patent holders for the benefit of Chinese companies, the US said; these policies deny foreign patent holders, including US companies, basic patent rights to stop a Chinese entity from using the technology after a licensing contract ends and impose mandatory adverse contract terms that discriminate against, and are less favourable for, imported foreign technology, in violation of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The US said it held consultations with China on the matter in July but the consultations did not resolve the dispute, prompting the US request for the panel.

China said it was disappointed with the US request and that it positively responded to the questions posed by the US in the consultation held on 18 July. The accusations made by the US in its consultation request are meritless and founded on the deliberate misrepresentations of Chinese laws and practices as well as allegations from unidentifiable sources, China said. As a result, China is not in a position to accept the establishment of a panel.

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

DS544: United States — Certain Measures on Steel and Aluminium Products

DS548: United States — Certain Measures on Steel and Aluminium Products

DS550: United States — Certain Measures on Steel and Aluminium Products

DS551: United States — Certain Measures on Steel and Aluminium Products

DS552: United States — Certain Measures on Steel and Aluminium Products

DS554: United States — Certain Measures on Steel and Aluminium Products

DS564: United States — Certain Measures on Steel and Aluminium Products

China, the European Union, Canada, Mexico, Norway, Russia and Turkey all submitted first requests for panels to challenge the decision by the United States to impose additional customs duties of 10% on imports of aluminium products and 25% on imports of certain steel products.

While the United States claims the measures at issue were taken because of national security reasons, to the complainants it appears that the duties, in their content and substance, were taken as safeguard measures because the imports of steel products and aluminium products were deemed to be in such increased quantities and under such conditions as to cause or threaten injury to domestic producers of the products. As a result, the imposition of the additional duties was intended to protect the US steel and aluminium industries from the economic effects of imports. At the same time, the additional duties are not administered in a uniform manner since some WTO members are exempted from the duties. Moreover, quotas have been established for some WTO members.

The complainants said the measures are inconsistent with US obligations under the WTO’s Safeguards Agreement and the General Agreement on Tariffs and Trade (GATT) 1994.  Consultations between the seven complainants and the United States were held over the course of July up to early October but the talks failed to resolve the dispute, prompting the seven to request the establishment of panels.

China said its consultations with the US on the issue on 19 July were very limited and failed to resolve the dispute; the tariffs, taken under the guise of national security, are obviously and egregiously inconsistent with the relevant provisions of the Agreement on Safeguards and the GATT 1994. China is of the view that there is a joint understanding among different WTO members that the measures at issue are inconsistent with the core principles of the covered agreements. China also believes that WTO members should use or invoke the security exception provisions under the WTO agreements on a bona fide basis.

The United States said it was not surprised with China's request and that China was following a pattern of using the WTO dispute settlement system as an instrument to promote its non-market economic policies, policies which have led to massive excess capacity in steel and aluminium and distortions of world markets that are damaging the interests of market-oriented economies, its businesses and its workers. 

The US said it would not allow China's "Party-State" to fatally undermine the US steel and aluminium industries, on which the US military and, by extension, global security, rely. The US has explained that the tariffs are necessary to address the threatened impairment these imports of steel and aluminium pose to US national security; what threatens the international trading system is not invocation of the national security exception but China attempting to use the WTO dispute settlement system to prevent any action by any member to address its unfair, trade-distorting policies. As a result, the US does not agree to the establishment of a panel.

The European Union said in its request for a panel that the US actions have prompted significant reactions over the past several months, both in the US and worldwide. It noted that the request by the seven complainants was unprecedented in that one member was being targeted with so many panel requests in one day, which was a sign of the degree of objection the US actions were eliciting from members. 

The US arguments justifying its actions are simply wrong, the EU said: the US tariffs are in effect safeguard measures designed to protect domestic industries from imports; the national security justification under Article XXI of GATT can be reviewed in WTO adjudication; and the Article XXI exception does not apply in this case. It is a very dangerous proposition to suggest members can invoke national security in order to protect the prosperity of domestic industries, the EU said.

The United States responded that it was deeply disappointed with the EU's request for a panel and that the EU's action was misdirected; rather than supporting the international trading system by acting to resolve underlying concerns, the EU is undermining the system by asking the WTO to do what it was never intended to do – it is simply not the role of the WTO to review a sovereign nation's judgment of its essential security interests. The EU has supported the US interpretation of Article XXI in the past, notably in 1982 when certain EU actions were examined before the then-GATT Council. The US supported the EU at that time. The US wishes to be clear – if the WTO were to undertake to review an invocation of Article XXI, this would undermine the legitimacy of the WTO's dispute settlement system and even the viability of the WTO itself. 

Infringing on a sovereign's right to determine what is in its own essential security interest would run exactly contrary to the WTO reforms that are necessary in order for this organization to maintain any relevancy, the US declared, adding that it was not in a position to accept the EU request for a panel.

In their panel requests, Canada, Mexico, Norway, Russia and Turkey described the US actions as, for all intents and purposes, safeguard measures and questioned the national security exception cited by the US as a justification for its action.

Canada said it was inconceivable that exports of steel and aluminium from Canada could threaten US national security and that it was very concerned these measures could undermine the integrity of the global trading system. Mexico said using the national security exception as the US has done would frustrate the object and purpose of the WTO dispute settlement system while Norway said it was worried the US was adopting measures so evidently inconsistent with obligations of the rules-based trading system and based on a purported justification divorced from real-world security concerns. 

Russia agreed that the unprecedented number of panel requests against the US tariffs indicated a shared understanding that the US measures were inconsistent with WTO rules while Turkey questioned why it was being singled out for tariffs on steel and aluminium double those imposed on other WTO members.

The United States rejected the additional four panel requests. The Section 232 tariffs were necessary for the protection of essential US security interests and thus justified under Article XXI.  The position of the United States for over 70 years has been that actions taken pursuant to Article XXI are not subject to review by the WTO. Because the US has invoked Article XXI, there is no basis for a WTO panel to review the claims of the complainants and no reason for this matter to proceed further. 

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

DS557: Canada — Additional Duties on Certain Products from the United States

DS558: China — Additional Duties on Certain Products from the United States

DS559: European Union — Additional Duties on Certain Products from the United States

DS560: Mexico — Additional Duties on Certain Products from the United States

The United States requested four dispute panels to challenge increased duties imposed by Canada, China, the European Union and Mexico on certain US imports. The increased duties apply only to products originating in the US and do not apply to like products originating from any other WTO member. As a result, the duties appear to be inconsistent with the most-favoured nation obligation under Article I of the GATT 1994, the US said. Moreover, the additional duties applied by Canada, the EU and China result in rates of duty greater than the rates of duty set out in their schedules of concessions and thus appear inconsistent with Article II of the GATT 1994.

The US said it held consultations with Canada, China, the EU and Mexico in September but that the talks failed to resolve the disputes, prompting it to request the establishment of panels. The US noted that members claim the US is breaching WTO rules by imposing tariffs on steel and aluminium imports but at the same time they are unilaterally retaliating against the US based on the pretence that the US actions are safeguards; this is the height of hypocrisy, the US said. The US has not invoked WTO safeguard provisions for its actions and because the US has not done so, other members cannot simply act as if these provisions have been invoked and use that sham pretence to apply safeguard rules that are simply inapplicable.

Canada, China, the European Union and Mexico countered that the tariffs are, for all intents and purposes, safeguard measures and the increased duties imposed by the four are completely justified measures in accordance with the WTO's Safeguards Agreement. China noted the US refused to hold consultations on possible compensation for the steel and aluminium tariffs, leaving China no choice but to impose rebalancing measures. Mexico said its action was not in the purview of the WTO and that it was rightly taken in line with its NAFTA commitments. The four said they were not in a position to accept the US request for panels. 

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.

European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft: Implementations of the recommendations adopted by the DSB

The United States noted that the European Union has not provided a status report concerning the dispute DS316, "EU — Measures Affecting Trade in Large Civil Aircraft", an issue raised by the US at past DSB meetings. The EU has argued that Article 21.6 of the WTO's Dispute Settlement Understanding (DSU) requires that the issue of implementation remain on the DSB agenda until the issue is resolved and that where a member disagrees with another member's assertion that implementation of a ruling has been achieved, the issue remains unresolved for the purposes of Article 21.6. 

The stated EU position contradicts its actions in this dispute, the US said, where the EU has admitted that there remains a disagreement on compliance. Under the EU's own view, the EU should be providing a status report, yet it has failed to do so. The US urged the EU to provide the DSB for the first time any details on its alleged implementation efforts.

The European Union said there was a difference between the position it has taken in the DS232 "Continued Dumping and Subsidy Offset Act" case and DS316. In the former, the case has been adjudicated and no proceedings are pending and the EU disagrees with the US assertion that it has complied; thus the issue remains unresolved for the purposes of Article 21.6. In the DS316 case, the EU notified its compliance measures, the US disagreed that compliance had been achieved and a compliance panel has been established to rule on the matter. The matter is subject to litigation and the EU is concerned with a reading of Article 21.6 which would require a member to notify the status of implementation while litigation is ongoing.

Statement by the United States concerning the Issuance of Advisory Opinions on Issues Not Necessary to Resolve a Dispute

The United States highlighted concerns it has with the WTO's dispute settlement system, namely the practice by WTO panels and the Appellate Body of issuing "advisory opinions", which it said were findings that are not necessary to resolve a dispute, including statements or interpretations that are not necessary or even on issues not present in a dispute. The issuance of these advisory opinions was yet another example of a failure by the Appellate Body to follow the rules set out by members, the US said. 

The US highlighted five issues: 1) the relevant text of the WTO agreements and the DSU make clear that the purpose of the dispute settlement system is to help members resolve a dispute, not produce interpretations or make law in the abstract; 2) the current DSU rules were drawn from the dispute settlement procedures of the GATT, which did not provide for advisory opinions; 3) WTO members have not given panels or the Appellate Body authority to issue advisory opinions; 4) there have been troubling instances of advisory opinions issued by the Appellate Body, an approach which has been criticized by some members; and 5) there are serious consequences for the WTO dispute settlement system from the failure of panels and the Appellate Body to only make findings necessary to resolve disputes. The US said these advisory opinions add time to proceedings, add to the complexity of rulings, risk adding to or diminishing members' rights under the covered WTO agreements and may not take into account all the facets of an issue. Ultimately the failure of WTO adjudicators to follow DSU rules risks further eroding support for the dispute settlement system and the WTO as a whole, the US declared.

Several members intervened on the matter. The EU said it did not necessarily agree with the US characterization of some Appellate Body findings as advisory opinions and that addressing the issues raised by the parties in a dispute does not mean that they cannot provide clarity regarding the existing WTO provisions, as permitted under Article 3.2 of the DSU. 

Brazil said US concerns regarding the Appellate Body and dispute system did not justify "hostage taking" with regards to the filling of current vacancies on the Appellate Body and agreed that Article 3.2 provided some leeway to provide clarity regarding existing provisions of the WTO agreements. Japan noted that members have different views on what constitutes an advisory opinion and that constructive dialogue was needed among members on the issue.

China agreed that the Appellate Body should only address the issues appealed by the parties to the dispute and refrain from making findings on the issues that neither party appealed but said concerns about this should not be used to block the launch of the Appellate Body selection process.

New Zealand, Chile and India also commented and expressed different views on the matter.

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 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. The systemic concerns raised by the US in previous meetings regarding the Appellate Body have not been addressed, it said. For more than 15 years the US has been raising concerns with the Appellate Body's disregard for rules set by members and its persistent overreach in areas such as anti-dumping and subsidy rules, standards and technical barriers to trade, and the use of safeguards; it also continues to have concerns that individuals who are not currently Appellate Body members continue to decide appeals. When the Appellate Body abuses the authority it was given, it undermines the legitimacy of the system and damages the interests of all WTO members who care about having agreements respected.

Twenty members took the floor, most of them reiterating their concerns with the continued impasse regarding the appointment of new Appellate Body members and urging all members to show flexibility in order to resolve the deadlock as soon as possible. Many repeated statements made at previous DSB meetings on the matter. 

Brazil said there was nothing in the DSU requiring consensus from members in launching the selection process and thus no legal basis for the US to block the process; it asked whether it was legally justified for one member to cause such disruption for the entire membership and whether this member would be held accountable for its actions. The scope and breadth of consequences caused by the current impasse were having concrete effects on the trade and systemic interests of all members wishing to exercise their rights to resolve disputes, Brazil declared. 

The United States countered that the DSU clearly required consensus to launch the selection process for new Appellate Body members.

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

Members continued discussions on a proposal from Honduras presented at the DSB's 26 September meeting setting out ideas for addressing US concerns regarding the Appellate Body's practice of allowing AB members whose terms have expired to continue working on cases. Honduras said it was consulting with members on how to proceed with its initiative. Honduras added it was aware that other WTO members were putting forward proposals on this issue and said it welcomed all proposals and was ready to engage.

The United States said it looked forward to hearing other members' views on the option set out in the Honduras paper and other possible approaches that members are considering but cautioned against continuing to allow the Appellate Body to permit continued service by members whose terms have expired. Other members expressed support for the initiative by Honduras and the need to resolve concerns regarding the practice of allowing Appellate Body members whose terms have expired to continue working on cases without the DSB's approval.

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",  DS160, "United States — Section 110(5) of US Copyright Act", DS464, "United States — Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea", DS471, "United States — Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China" and DS488, "US — Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea".

The European Union presented status reports with regard to DS291, "EC — Measures Affecting the Approval and Marketing of Biotech Products".

The European Union informed WTO members that a new EU Commission regulation was adopted on 18 October terminating anti-dumping proceedings against imports of biodiesel from Argentina and Indonesia, duties that were subject to dispute proceedings in DS473 and DS480,  "EU — Anti-Dumping Measures on Biodiesel". The regulation took effect on 19 October and from that date imports of biodiesel from Argentina and Indonesia are no longer subject to anti-dumping duties, the EU said. Indonesia thanked the EU for its status report and for the new regulation and said it would study the matter carefully.

Indonesia presented its status report in DS484, "Indonesia — Measures Concerning the Importation of Chicken Meat and Chicken Products", expired on 22 July. Brazil said it continued to have 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.

Next meeting

The next regular meeting of the DSB will take place on 21 November.

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