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.

More

  

DS582 India — Tariff Treatment on Certain Goods in the Information and Communications Technology Sector

The European Union presented its second request for a panel to rule on India's import tariffs on certain information and communications technology (ICT) goods; the EU's first request was blocked at the last DSB meeting on 5 March.

The EU reiterated that India had taken the commitment not to apply import duties on the ICT products in question but that for several years India has adopted measures to reinforce and regularly increase import duties on those products, up to 20 per cent. The EU said the value of its annual exports of concerned goods to India amounts to around EUR 400 million.  The EU also asked India to agree to the establishment of a single panel to review the complaints filed by the EU, Japan and Chinese Taipei since the complaints cover many of the same products and the three made the same legal arguments.

India said it was disappointed with the EU's second request, which it said seeks to take advantage of an error made by India when transposing its tariff lines to an updated Harmonized System (HS) and oblige India to accept commitments under the expanded  Information Technology Agreement (ITA-II) to which it never agreed.  India also said it was not in a position to agree to the request for a single panel as the matters at issue cannot be said to be related.

Japan, the United States and Chinese Taipei said they shared the concerns raised by the EU regarding India's tariffs. 

The DSB agreed to the establishment of a panel. Chinese Taipei, Japan, the United States, Canada, Turkey, Korea, China, Brazil, Indonesia, Norway, Singapore, Thailand, Russia and Pakistan reserved their third party rights to participate in the proceedings.

DS584: India — Tariff Treatment on Certain Goods

DS588: India — Tariff Treatment on Certain Good in the Information and Communications Technology Sector

Japan and Chinese Taipei submitted their first requests for dispute panels regarding the tariff treatment India accords to certain ICT goods. As with the EU, Japan and Chinese Taipei said that India is applying tariffs on the products in question in excess of the 0 per cent bound rate set out in its WTO schedule of commitments.  Consultations with India were held with both Japan and Chinese Taipei in May 2019 but failed to resolve the disputes, prompting the two to submit their requests for a panel. 

India said it was disappointed with the two requests. It said the complainants were essentially seeking to get India to take on commitments under ITA-II to which it never agreed and take advantage of an error made by India when transposing its tariff lines to the updated HS. The complaint seriously undermines India's sovereignty as it goes beyond the consent India provided when it agreed to accept the first ITA agreement (ITA-I), India said, adding that it was therefore not in a position to agree to the establishment of the panels.

The DSB agreed to revert to the matters if so requested by a member.

DS591 Colombia — Anti-dumping Duties on Frozen Fries from Belgium, Germany and the Netherlands

The European Union presented its second request for a panel to rule on Colombia's anti-dumping duties on frozen fries from Belgium, Germany and the Netherlands; the EU's first request was blocked at the last DSB meeting on 5 March. The EU said it had serious concerns relating to nearly all aspects of the dumping investigation and proceeding. The EU also said it was concerned Colombia might extend the anti-dumping duties through an expiry review.

Colombia said it regretted the second request for a panel from the EU given that it has continued to maintain open dialogue with Brussels aimed at resolving the dispute. Colombia said it acted in strict adherence with WTO rules and that it remained ready to seek an amicable solution with the EU.

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

DS590: Japan — Measures Related to the Exportation of Products and Technology to Korea

Korea presented its first request for the establishment of a dispute panel to rule on Japan's amended export licensing policies and procedures imposing certain licensing requirements on exports of fluorinated polyimide, resist polymers and hydrogen fluoride as well as their related technologies destined for Korea. These products are primarily used in the production of semi-conductors and of displays for smartphones and TVs and are essential inputs for the tech industry. These amended policies and procedures have resulted in unnecessary delays, uncertainties, costs and other serious restrictions for Korean importers and are inconsistent with Japan's WTO commitments, Korea said. 

WTO consultations took place in October and November 2019, as well as bilaterally, but have failed to result in a mutually acceptable solution, prompting Korea to request the establishment of a panel.

Japan said it was disappointed with Korea's request despite ongoing efforts to resolve the matter through dialogue. The export licensing requirements at issue all involve dual-use items which have military applications.  Article XXI of the General Agreement on Tariffs and Trade (GATT) fully recognizes the rights of WTO members to adopt export control policies and implement an export control system in order to prevent unintended export of goods that can be potentially diverted for use in weapons and for other military uses, and the right of members to decide on the enforcement of such restrictions. Japan implements export licence requirements solely with a view to exercising and enhancing appropriate export control over these goods and technologies and for verifying whether exports of these goods from Japan pose a risk of being diverted to military use.

Japan said there were underlying concerns, including vulnerabilities of the organization of Korea's export control system and its operation, which is still the case today. 

The United States said to the extent the Japanese measures are based on national security considerations, the matter was not appropriate for adjudication in the WTO.  The US urged the two sides to resolve the matter outside the WTO or, if unable to do so bilaterally, seek the “good offices” of the WTO's Director-General or other WTO members in whom the parties have confidence to assist in finding a solution.

The DSB agreed to revert to the matter if so requested by a member.

DS593: European Union — Certain Measures Concerning Palm Oil and Oil Palm Crop-based Biofuels

Indonesia submitted its first request for a panel to examine certain measures adopted by the European Union and EU member states affecting palm oil and oil palm crop-based biofuels. The measures in question appear inconsistent with several WTO agreements, Indonesia said. Consultations aimed at resolving the dispute with the EU failed to settle the matter, prompting Indonesia to request the establishment of a panel.

The EU said Indonesia was entitled to bring its complaint before the WTO but said it firmly believes its measures are fully justified. For this reason, the EU said it was not ready to accept the establishment of a panel.

Malaysia said it views the EU measures with concern; they are a disguised restriction on trade and will significantly distort international trade in palm oil. Palm oil-producing countries have taken steps to ensure their production is managed in a sustainable manner and in line with the United Nations' Sustainable Development Goals (SDGs), Malaysia said.

The DSB agreed to revert to the matter if so requested by a member.

DS435 and DS441: Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging

Nearly a dozen WTO members took the floor to comment on the Appellate Body's ruling in the cases brought by the Dominican Republic and Honduras challenging Australia's plain packaging requirements for tobacco products.

The Dominican Republic and Honduras were highly critical of the ruling, which upheld an earlier panel ruling rejecting the complainants' appeal. They said the Appellate Body failed to ensure that the complainants' arguments received a fair and objective assessment and failed to take account of the fact that alternatives to the plain packaging restrictions existed which could achieve Australia's public health objectives while being less trade-restrictive, including less restrictive of trademark rights.

Australia welcomed the Appellate Body's findings, noting that it was the first country to introduce plain packaging requirements. Tobacco plain packaging is a legitimate public health measure that fully respects WTO obligations, and the findings of the original panel, upheld by the Appellate Body, confirm this unequivocally.  However, Australia said it was concerned that resolving this matter took over eight years of intensive litigation.

The European Union, Norway, New Zealand, the United Kingdom, Turkey, Canada and Singapore all welcomed the Appellate Body and panel ruling, which clarifies that trade rules and domestic policies on public health can coexist, and that public health matters can be perfectly compatible with WTO rules even if they restrict trade. Indonesia said it believes plain packaging is more restrictive to trade than necessary to accomplish legitimate health objectives. The United States said the ruling underlined concerns it has raised about the Appellate Body, namely its tendency to exceed its mandate by making findings of fact, issuing a ruling beyond the 90-day limit fixed under WTO rules, and allowing members of the Appellate Body to continue working on the case after their terms had expired.

DS505 United States — Countervailing Measures on Supercalendered Paper from Canada

Canada noted its request to suspend concessions against the United States for the US failure to comply with the WTO’s ruling in DS505. Canada said the US has neither informed the DSB of its intentions in regard to complying with the ruling, nor has it proposed a reasonable period of time to ensure compliance. Thus, Canada was pursuing its right to retaliate.

The United States objects to the premise that the DSB adopted the ruling in this dispute on 5 March. The US position is that there was no valid Appellate Body report, and there was no consensus for the DSB to adopt the ruling. The report was not valid for three reasons: 1) the ruling was issued after the 90-day deadline set under the Dispute Settlement Understanding (DSU); 2) two of the Appellate Body members were not authorized by the DSB to continue working on the case after their terms as members expired; and 3) the third Appellate Body member — Hong Zhao of China — was disqualified from serving as a member because she currently serves as vice president of an academy which is a public institution under Chinese law and subordinate to China's Ministry of Commerce (MOFCOM), and thus she was neither independent nor impartial. 

The US also said Canada was not suffering any trade impact from the measures in question, particularly since the countervailing duties had been removed two years earlier. Nevertheless, the US said it had objected to the Canadian request on 26 June, meaning that the matter is automatically referred to WTO arbitration.

Canada was joined by China, the EU, Japan, Australia and Mexico in rejecting the notion that the Appellate Body ruling in DS505 was not valid and that the DSB never adopted the ruling. Canada said the minutes of the DSB meeting on 5 March show that the ruling was adopted on the basis of Article 17.14 of the DSU, whereby a ruling can only be rejected if all WTO members present agree to reject it.  Canada added that its request is based on a formula to ensure that retaliation can be exercised only if and when the US applies its WTO-inconsistent ongoing conduct to imports from Canada in the future.

China rejected the accusations that Ms Zhao was not impartial and independent, declaring that the Chinese institute with which she is affiliated is an independent legal entity,  and that the US raised no objections to her when she was first appointed to the WTO, nor when she was involved in rulings that were favorable to the United States. 

The US countered that China has not denied US statements regarding Ms Zhao's affiliation with the institute and its affiliation with, and financial support from, MOFCOM.

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

The chair of the DSB reported to members that 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. A DSB meeting on 28 February was suspended due to a disagreement between the Philippines and Thailand regarding the Philippines’ request to impose retaliatory measures on imported Thai goods resulting from the dispute.

Both the Philippines and Thailand said they remained open to bilateral talks aimed at finding a solution. The Philippines said it was open to a solution which could involve arbitration under Article 25 of the DSU, a hybrid approach, or a mutual agreement on compensation. While remaining constructive, the Philippines said it fully reserved its right to seek authorization to retaliate under Article 22.2 of the DSU.

Thailand noted that the appeals proceedings in the DS371 dispute were still ongoing, and the Philippines has a sequencing agreement with Thailand under which it can only resort to retaliation after the completion of the proceedings. Should the Philippines decide the sequencing agreement is no longer valid, Thailand will argue that the Philippines' request to retaliate is not valid because it made its request outside the 30-day deadline set under the DSU. 

Thailand said the real problem is the lack of Appellate Body members, which underlines the need to commence the process for selecting new members. The EU said the dispute reflects the disruptive effect the absence of a functioning Appellate Body is having on the rights of WTO members.

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.

Multi-Party Interim Appeal Arbitration (MPIA)

On behalf of 21 WTO members, the EU presented the new alternative appeals arrangement unveiled on 30 April, dubbed the Multi-Party Interim Appeal Arbitration (MPIA). Based on the arbitration procedures under Article 25 of the DSU, the MPIA is intended to allow the 21 participating members to maintain a two-stage dispute settlement system by allowing for appeals in disputes to which they are party.

The EU emphasized that the MPIA is a temporary replacement for the WTO’s Appellate Body, which no longer has the minimum three members necessary to review appeals; the clear priority remains finding a lasting solution to the current Appellate Body impasse. The EU added that openness and inclusiveness are important aspects of the MPIA and that any WTO member is welcome to join at any time.

Fellow MPIA participants China, Hong Kong China and Guatemala said the initiative highlighted the importance of maintaining a two-tiered dispute settlement system. Japan said it was not participating in the MPIA because it was not certain if it served the ultimate purpose its proponents claimed, while South Africa said its uneasiness was related to the possibility of the MPIA becoming permanent. The United States said it did not object to members resorting to Article 25 arbitration, but that the arrangement incorporates and exacerbates some of the worst practices of the Appellate Body about which the US has long complained.

Systemic Issue of the Lack of Remedy to the Breach of Confidentiality in WTO Dispute Settlement Proceedings

Saudi Arabia made a statement to the WTO membership regarding what it said was the breach of confidentiality that caused it harm prior to the public circulation on 16 June of the panel report in DS567, “Saudi Arabia — Measures concerning the Protection of Intellectual Property Rights.” Confidential information in the report was disclosed to a UK newspaper which it said contradicts and distorts the panel's findings.  Saudi Arabia said that in such cases panels should allow the injured party to correct the false narrative created by a targeted leak of confidential information in a panel report. Unless corrected immediately, the false impressions created by the leak will remain in the public consciousness and continue to cause injury.

Qatar told the membership that it regretted confidential information about the panel’s findings was revealed prior to the circulation of the ruling but said that insinuations it was responsible for the leak were unsubstantiated.  It said that misleading and manifestly false claims were being made about what the panel actually ruled.

Turkey told members that maintaining confidentiality was an important pillar of the dispute settlement system, and that members could continue to discuss this as part of the ongoing negotiations to improve dispute settlement procedures.

The statements were made at the DSB meeting, which is open to all WTO members, with no direct discussions or bilateral meetings between Saudi Arabia and Qatar.

Appellate Body appointments

Mexico, speaking on behalf of 121 members, introduced once again the group's proposal to start the selection processes for six vacancies in the Appellate Body. The increasing 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, Mexico said for the group.

Around 20 delegations 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. The United States said 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.

Surveillance of implementation

China presented a further status report with regards to the implementation of the WTO ruling in DS511, “China — Domestic Support for Agricultural Producers”. China had until 31 March to comply with the ruling. China said that it adopted notices in October 2019 and February 2020 regarding its minimum procurement price (MPP) under which the maximum procurement amounts for wheat and rice eligible for MPP is fixed each year, with the amount of eligible production for MPP limited to the maximum procurement amount. Through these changes, China has fully complied with the WTO ruling, it said. 

The United States said it was seeking additional information from China on how these new measures would be implemented in practice and was not in a position to agree to China's claims at this time.

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 29 July.

 

Share


  

Problems viewing this page? If so, please contact webmaster@wto.org giving details of the operating system and web browser you are using.