DS511: China — Domestic Support for Agricultural Producers

China submitted its second request for a dispute panel to determine whether it has complied with a WTO ruling regarding China's domestic support for agricultural producers. China's first request was blocked at a meeting of the Dispute Settlement Body (DSB) on 28 August. 

China reiterated that it has adopted measures on minimum procurement prices for wheat and rice that have brought it into compliance with the panel ruling. China noted the United States chose to directly proceed to a request for WTO authorization to retaliate against China on the grounds that it had not complied without first resorting to compliance panel procedures or reaching a sequencing agreement with China on how to proceed in the dispute. China said it is concerned about the systematic implication of the US approach in this dispute, which would open the door to the abuse of the dispute settlement system. China also said the US action comes at a time when it is sharply increasing its own domestic support for farmers, raising legitimate questions whether the US itself is providing agriculture support in excess of its allowed limits.

The United States said it disagrees with the variety of assertions made by China. China continues to provide significant levels of domestic support to its agricultural producers, and the revised market price support measures notified by China in June did not themselves demonstrate that China now provides a level of domestic support within its commitment levels. The US once again noted that it has paused the arbitration proceedings on its request for the right to retaliate and understands that China is not seeking further litigation but is requesting the compliance panel in order to preserve its rights.

The DSB agreed to the establishment of a panel. The Russia Federation, Chinese Taipei, Turkey, Norway, Pakistan, Thailand, the European Union, India, Korea, Japan, Canada, Brazil, Australia and Guatemala reserved their rights to participate as third parties in the proceedings.

Statement by Canada regarding the panel report in DS533, “United States — Countervailing Measures on Softwood Lumber from Canada”.

Canada said it welcomed the panel's findings in DS533, which repeatedly found that the US Department of Commerce (USDOC) improperly determined that the Canadian provinces provide subsidies to softwood lumber producers by selling crown timber for less than adequate remuneration. Canada said that nearly US$ 3 billion has already been collected in duties on Canadian exports of softwood lumber as a result of the USDOC errors. In the face of overwhelming evidence that Canada's market-based mechanisms do not result in counter available subsidies, the United States continues to treat Canadian softwood lumber producers in a manner that is neither unbiased nor objective, Canada said. 

Canada also noted the US statement at the last DSB meeting where it said that despite the ongoing impasse over the appointment of new Appellate Body members, the WTO's dispute settlement system still worked. US behaviour in this dispute, and in previous disputes, contradicts its statement, Canada said. 

In the absence of a functioning Appellate Body, Canada offered to enter into an appeal-arbitration agreement with the United States that would have allowed the US to seek review of the panel report; having refused that offer, Canada hoped the US would have allowed the adoption of the panel report and implemented the ruling as soon as possible. By appealing this panel report to an Appellate Body that it made non-functional, the US is compounding the unfair treatment of Canadian softwood lumber producers and denying Canada its right to prompt settlement of the dispute. Canada said it was surprised the US has appealed given the stated position of the United States Trade Representative that there is no need for an appellate body.

The United States said the panel in this dispute erroneously interpreted and applied numerous provisions of the WTO's subsidies agreement and built on erroneous Appellate Body interpretations that are deeply flawed. The US said that it is open to discussions with Canada on the way forward in this dispute and that the suggestion the US has appealed simply to delay this dispute settlement proceeding is utterly without foundation.

The European Union said this is another dispute that illustrates the grave consequences of the blockage of Appellate Body appointments and frustrates the essential rights of members to the right of appeal. It is also why the EU and other members have put in place the multi-party interim appeal arbitration arrangement (MPIA) to allow members' rights to be preserved in a balanced manner, the EU said. 

China also registered its concern regarding the appeal of the United States in this dispute.

DS493: Ukraine — Anti-Dumping Measures on Ammonium Nitrate

Russia noted it has been nearly two weeks since the 15 September deadline for Ukraine to comply with the panel's ruling in DS493 and yet no word has been received from Ukraine on its compliance efforts. Russia called on Ukraine to share information regarding the steps taken by Ukraine to implement the ruling.

Ukraine responded that the anti-dumping duties in question have been completely lifted following the decision of an inter-department commission on international trade on 21 September, and that Ukraine was therefore in full compliance with the ruling.

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. 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. It noted the EU filed an appeal against the compliance panel's report in December 2019 and that it was concerned that, with the current blockage of the two-step dispute settlement system, it was losing the possibility of a proper appellate review of the serious flaws contained in the panel report. While the blockage continues, the EU said it stands ready to discuss with the US alternative ways to deal with this appeal and was committed to finding a balanced negotiated solution with the United States; it is not in the interest of anyone that the EU and the United States now proceed to, or continue, mutually assured retaliation and certainly not in the current economic climate, the EU said.

The United States said it disagrees that the EU has achieved full compliance. It reiterated that six of the eight EU launch aid subsidies for Airbus that a WTO compliance panel found continue to cause adverse effects are not addressed by these new measures, and the changes to the French and Spanish launch aid loans are marginal and insufficient to withdraw the subsidies. At the same time, the US has withdrawn the one measures in the Boeing dispute (a Washington state tax break) found to be causing adverse effects to the EU. The US said it has  committed to a new process with the EU in an effort to reach a long-term resolution of this dispute.

DS371 Thailand — Customs and Fiscal Measures on Cigarettes from the Philippines

The chair of the DSB reported to members that intensive consultations with the Philippines and Thailand were still ongoing with regards to resolving their differences in a dispute over the next steps in the DS371 proceedings. Both the Philippines and Thailand made statements which reiterated positions outlined at previous DSB meetings.

Statement by Australia on COVID-19 and dispute settlement

On behalf of 14 members (Australia; Brazil; Canada; Ecuador; Guatemala; Hong Kong, China; Mexico; New Zealand; Norway; Peru; Singapore; Switzerland; Ukraine; and the United Kingdom), Australia made a statement expressing concern about delays in dispute settlement proceedings resulting from the COVID-19 pandemic. 

While it is encouraging that DSB meetings have been able to resume at the WTO, ongoing restrictions affecting international travel and immigration place in question the feasibility of physical participation of panellists and capital-based delegates at meetings in Geneva into the future, Australia noted. During 2020, various governments, private sector organizations, and domestic and international adjudicative bodies worldwide have adapted their usual ways of working to continue operating in these difficult conditions; WTO members must ensure the dispute settlement system does the same. 

Australia urged panels to consider, in consultation with parties, flexible, alternative arrangements to ensure dispute proceedings can continue to progress in a timely manner despite the challenge of current restrictions. Australia recalled that Article 12.1 of the WTO's Dispute Settlement Understanding (DSU) affords panels discretion in the working procedures they adopt in individual disputes, and that panels, after consulting in parties, may determine alternative arrangements that would best serve the satisfactory settlement of the matters. Some panels have already adjusted their procedures to hold substantive meetings virtually through video conferencing technology; Australia welcomed these developments but, to ensure the equitable operation of the dispute settlement system, WTO members must find solutions to enable all current and future matters to move forward in one way or another.

Several delegations took the floor to comment. Japan said that while virtual meetings are an option, face to face meetings were preferable, and that each panel should consult with parties on how to proceed in order to strike an appropriate balance between prompt settlement of disputes and protection of due process. India said oral hearings were an intrinsic aspect of due process rights guaranteed by the DSU and that panels cannot truncate these rights without the agreement of the parties in a dispute. 

The United States encouraged each panel to consult with the parties on how to proceed, bearing in mind the views of the parties and the relevant provisions of the DSU. China said it was fundamental to provide certainty in dispute settlement in order to avoid any undue delay; it noted some panels have adopted flexible procedures as a response. The EU said that the discretion of panels is not completely unfettered and that they must ensure the prompt settlement of disputes, a principle that was valid for all disputes. Both South Africa and Nigeria (for the African Group) noted the asymmetrical impact of the COVID-19 pandemic on developing country members.

Appellate Body appointments

Mexico, speaking on behalf of 121 members, once again introduced the group's proposal to start the selection processes for six vacancies in the Appellate Body. The extensive number of members submitting the proposal reflects a common concern over the current situation in the Appellate Body that is seriously affecting the overall WTO dispute settlement system against the best interest of members, Mexico said for the group.

Nearly 20 members took the floor to reiterate the importance of resolving the impasse over the appointment of new members as soon as possible and re-establishing a functioning Appellate Body. A number of members noted what the EU described as the increasingly frequent impairment of rights resulting from the impasse and the growing number of appeals “into the void”. China said the impasse will eventually affect the appetite for members to negotiate new WTO rules absent multilateral enforcement. 

The United States largely reiterated its position set out in previous DSB meetings, namely that it was still not in a position to support the proposal to start the selection process because its systemic concerns regarding the Appellate Body remain unaddressed. The United States said it is determined to bring about real WTO reform, and members must ensure that the WTO dispute settlement system reinforces the WTO is critical in negotiating and monitoring functions and does not undermine those functions by overreaching and gap filling.

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”. 

Australia said that it has fully implemented the ruling in DS529, “Australia — Anti-Dumping Measures on A4 Copy Paper” following the publication of a notice on 14 September revoking the dumping duty order on A4 copy paper from Indonesia as of 12 March 2020.  Indonesia said it would like further clarification from Australia on whether the revocation decision was final, considering that interested parties may seek a review of the decision by requesting one within 30 days.  Australia replied that, under its Customs Act, interested parties are entitled to apply for an administrative review of dumping decisions; it also said Australia and Indonesia are in the process of discussing sequencing arrangements to facilitate the resolution of this dispute should a disagreement as to compliance arise in the future.

Next meeting

The next meeting of the DSB will take place on 26 October.