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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DS583: Turkey — Certain Measures concerning the Production, Importation and Marketing of Pharmaceutical Products

The European Union presented its second request for a panel to rule on various measures concerning the production, importation and marketing of pharmaceutical products in Turkey. The EU referred to its statement made to the DSB on 15 August when it made its first request.

Turkey said that it deeply regretted the EU's second request for a panel and said the EU request was misplaced, as the dispute involves Turkey's social security system and Turkey's policies aimed at ensuring fair, affordable and uninterrupted access to medicines for its people. Turkey's said its measures are fully consistent with its WTO obligations and that matters concerning a member's healthcare and social security policies should not be subject to WTO panel review. 

The DSB agreed to the establishment of the panel. Japan, the United States, Canada, Switzerland, Russia, Ukraine, China, Brazil and India reserved their third party rights to participate in the proceedings.

DS585: India — Additional Duties on Certain Products from the United States

The United States presented its first request for a panel to rule on India's duties imposed on certain US imports.  The duties were imposed in response to US safeguard measures on imported steel and aluminium. The United States said the additional duties imposed on US products with an annual value of trade worth $1.1 billion are inconsistent with provisions of the WTO's General Agreement on Tariffs and Trade (GATT) 1994 regarding most favoured nation treatment and India's commitments in its WTO schedule of tariff concessions. Several members, including India, are unilaterally retaliating against the United States for actions that, as national security measures, are fully justified under Article XXI of the GATT, and pretending that the US actions are safeguard measures to justify their actions, the US said.

India said that it was disappointed with the US request and that its consultations with the US on the matter on 1 August were constructive.  India noted that several members have initiated disputes against the additional duties imposed by the US on steel and aluminium products and that the US actions were nothing more than disguised safeguards to protect the domestic US industry.  India said it was confident it would prevail in this dispute but that it was not in a position to agree to the establishment of the panel.

The DSB agreed to revert to the matter.

DS578: Morocco — Definitive Anti-Dumping Measures on School Exercise Books from Tunisia

Tunisia submitted its first request for a panel concerning anti-dumping duties imposed by Morocco on imports of school exercise books from Tunisia. Tunisia said Morocco acted inconsistently with a number of provisions under the WTO's Anti-Dumping Agreement and the GATT 1994. It noted this was the first time that Tunisia has initiated a WTO dispute complaint. Consultations with Morocco on 11-12 June failed to overcome differences between the two sides, prompting Tunisia to request the establishment of a panel.

Morocco replied that it believed it imposed the anti-dumping duties in accordance with WTO rules and that the differences between the two sides related to technical matters which did not warrant litigation at the WTO.  In view of its desire to continue efforts to reach a mutually acceptable solution, Morocco said it was not in a position to accept the establishment of a panel.

The DSB 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 rulings on this matter. Brazil and Canada supported the EU statement, while the United States said it has taken all actions necessary to implement the ruling.

DS316: European Communities and Certain Member States — Measures Affecting Trade in Large Civil Aircraft: Implementations of the recommendations adopted by the DSB

The United States said that once again the European Union has failed to provide a status report to the DSB concerning dispute DS316.  The European Union repeated that the matter is subject to new compliance proceedings and thus there was no obligation on the EU to submit a status report.

DS493: Ukraine — Anti-Dumping Measures on Ammonium Nitrate

Russia said it welcomed the Appellate Body's ruling in DS493, the results of which are vital and beneficial to the WTO membership as a whole.  Its outcome contributes to the resolution of highly important issues regarding the application and interpretation of certain provisions of the WTO's Anti-Dumping Agreement, Russia said.

Ukraine said it appreciated the Appellate Body and panel have upheld the general framework of Ukrainian anti-dumping law and practice and that a number of Russia's claims were rejected by the panel, but said it was concerned with several aspects of the Appellate Body's findings.  Regardless, Ukraine said, it intends to fully comply with the ruling.

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

DS504: Korea — Anti-Dumping Duties on Pneumatic Valves from Japan

Japan said it welcomed the findings by the Appellate Body and the panel in DS504 that Korea’s dumping measures are inconsistent with the Anti-Dumping Agreement (ADA), and their recommendations that Korea bring its measures into conformity with its obligations under the ADA.  Japan said the Appellate Body ruled in favour of Japan with respect to almost all of the issues raised in the appeal. Japan called on Korea to fully and promptly implement the rulings without maintaining or introducing any measure which would undermine its implementation.

Japan said that, public comments to the contrary, nothing in the report allows Korea to continue the measures; rather, the Appellate Body recommended that Korea bring its measure into conformity with the WTO's Anti-Dumping Agreement.  Japan also contested claims by Korean officials that Korea prevailed because it won 10 out of 13 claims; ultimately it is not the number of claims and arguments that the Appellate Body and panel rule in favour or against, but whether or not the contested measure fulfilled all the requirements of the WTO Agreement, which the Korean measures did not.

Korea said it also welcomed the Appellate Body's findings in DS504, which it said mostly upheld Korea's position, including in regard to several key claims.  This ruling is yet another example of the value and utility of the WTO's dispute settlement system, and Korea confirmed its willingness to faithfully implement the ruling within a reasonable period of time.

To the extent that Japan suggests Korea must remove the measure at issue, Korea said it respectfully disagrees.  Besides two procedural matters, only one substantive flaw was found, and there is nothing in the ruling to suggest that withdrawal of the measure is the only way to ensure implementation, Korea said. In fact, given the limited nature of the technical concerns expressed with only one aspect of the injury analysis and given the confirmation of the consistency of the Korean investigating authority's causation analysis, there is no basis for such a suggestion. Korea therefore disagrees with Japan's suggestion that Korea must terminate, or otherwise essentially modify or adjust, its anti-dumping measure.

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

Appellate Body appointments

Mexico, speaking on behalf of 116 WTO members, introduced once again the group's proposal to start the selection processes for six vacancies in the Appellate Body — the four existing vacancies plus the two vacancies that will emerge when the second terms of Ujal Bhatia and Thomas Graham end on 10 December.

Mexico said the increasing and considerable number of members submitting the proposal reflects a common concern over the current situation in the Appellate Body that is seriously affecting its workings as well as the workings of the overall dispute settlement system against the best interest of members. WTO members have a responsibility to safeguard and preserve the Appellate Body, the dispute settlement system and the multilateral trading system, Mexico said.

The United States once again responded that it was still not in the position to support the proposal and that the systemic concerns that it previously identified remain unaddressed. For more than 16 years the US has been raising serious concerns with the Appellate Body's overreach and disregard for the rules set by WTO members. The US will continue to insist that WTO rules be followed and will continue efforts and discussions to seek a solution, it said.

More than 20 members took the floor to express growing concern over the impasse in the selection process.  Several delegates noted that filling Appellate Body vacancies as they arise is an obligation under Article 17.2 of the WTO's Dispute Settlement Understanding and that more than 70% of the WTO's membership were now backing the joint proposal.  Only 10 weeks remain until the Appellate Body is down to one member, which would undermine the WTO's dispute settlement system as a whole.  Several said the informal process led by the DSB chair, Ambassador David Walker (New Zealand), had shown some progress but that all members needed to participate constructively in the discussions.

Amb. Walker reiterated that the matter urgently requires meaningful engagement by all WTO members.  He noted that he reported to the General Council on 23 July regarding his informal process to overcome the impasse and that his report to members is public.  He will report back on his consultations at the next General Council meeting on 15 October.

Canada-European Union Interim Appeal Arbitration

Canada and the European Union formally presented their interim appeal arbitration agreement which was circulated to WTO members on 25 July (available here).  The interim arrangement is intended to address possible appeals in any disputes between the two that may be filed if and after the Appellate Body becomes inoperative in December.  Canada and the EU stressed that the proposal was a contingency measure applying solely to them and was not an endorsement or a critique of the status quo.  For both Canada and the EU, the priority remains resolving the appointment process through negotiation, and the two reaffirmed their active engagement in the discussions facilitated by Amb. Walker.

The United States noted the right of members to resort to such arbitration under Article 25 of the Dispute Settlement Understanding. However, Canada and the EU explicitly state that their intent is to replicate as close as possible existing Appellate Body procedures and practices; in other words, the two do not see any problem with the Appellate Body practice at all, demonstrating that, despite the fact that the Appellate Body has repeatedly breached rules set by WTO members, Canada and the EU appear to endorse and legitimize those breaches.  The proposal also contains a number of legal flaws and elements that may not be workable, the US said, adding that the best way forward is to understand and recognize the concerns that have been raised with the Appellate Body's actions.

Four delegations took the floor to comment.  While recognizing the need to consider contingency options, these delegations said the priority must remain finding a solution to the Appellate Body appointment impasse.   Canada and the EU stressed that the agreement was a contingency measure aimed at preserving their rights in potential disputes between them, and that the priority remains overcoming the appointment blockage.

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”, and DS471, “United States — Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China”.

The European Union presented a status report with regard to DS291, “EC — Measures Affecting the Approval and Marketing of Biotech Products”.

Indonesia presented its status reports in DS477 and DS478, “Indonesia — Importation of Horticultural Products, Animals and Animal Products”. 

Next meeting

The next regular meeting of the DSB is scheduled for 28 October.

More information on WTO dispute settlement is available here.

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