DSB establishes three new panels

At the resumption of its meeting on 1 February, the DSB established three panels and agreed to revert to a panel request—by the EC against US countervailing duties on certain steel imports from the United Kingdom—at its next regular meeting scheduled for 17 February. It also heard status reports on the implementation of DSB recommendations from India and the EC.

Canada's patent protection of pharmaceutical products

The European Communities said that while it supported the balance struck in the TRIPS Agreement between the protection of patents and the promotion of public welfare, it believed that any lowering of standards with respect to the former would disturb this balance. Thus, it was reiterating its request for a panel against Canada's measures.

In its formal request, the EC claims that Canada's legal regime allowing third parties, without the consent of the patent holder, to carry out experiments required for marketing approval, and the manufacture and stockpiling of patented products before the expiry of the patents concerned violated provisions of the TRIPS Agreement.

Canada maintained that its patent regime is part of a balanced approach that protects patent rights and allows immediate distribution of products after expiry of patents. It stressed this approach is consistent with the balance in the TRIPS Agreement between patent protection and societal rights. Canada warned that the EC request challenges government policies aimed at providing affordable access to pharmaceutical products, and thus should be of concern to all WTO members.

The DSB established a panel to examine the EC complaint. Australia, Brazil, Cuba, India, Israel, Japan, Poland, Switzerland and the United States indicated their interest to participate as third parties in the panel proceedings.

US Anti-Dumping Act of 1916 back to top

The EC, in reiterating its panel request, claimed that the US Anti-Dumping Act of 1916 violates provisions of GATT 1994 and the Anti-Dumping Agreement by, among other things, providing for discriminatory treatment of imported products.

The United States expressed disappointment that the EC chose to pursue a case against what it described as an obsolete statute, under which no action had been taken during the past 82 years.

The DSB established a panel to examine the EC request. India, Japan and Mexico stated their interest to participate as third parties in the panel proceedings.

Canada: certain automotive industry measures

Japan reiterated a previous request for a panel to examine its complaint against the Canada-US Auto Pact and related measures. It said that this Pact is WTO-inconsistent as it allows only a limited number of manufacturers to import motor vehicles into Canada duty-free.

The EC said that Canadian measures, including the 1965 Auto Pact and the Motor Vehicles Tariff Order of 1998, grant certain manufacturers a tariff exemption for importing motor vehicles duty-free into Canada subject to certain conditions. It said these include value-added requirements, which it claimed violate the national treatment provision of GATT 1994 as well as the TRIMs Agreement. The EC said it could agree to the merging of its panel with that of Japan.

Canada said that consultations with Japan and the EC during the past six months have reinforced its belief that its auto regime is fully consistent with the WTO. It said that recent increases in its auto imports—28 per cent in the case of Japan and 32 per cent for the EC—are indications that the Canadian auto market is open. Canada said that in the interest of efficient use of WTO resources, it could agree to the EC panel request, which was being considered by the DSB for the first time.

The DSB established a single panel to examine the complaints by Japan and the EC. India, Korea and the United States indicated their interest to participate as third parties in the panel.

US countervailing duties on UK steel

The European Communities requested a panel to examine its complaint concerning the US imposition of countervailing duties on certain hot-rolled lead and bismuth carbon steel products originating in the United Kingdom. It said that its consultations with the United States in July 1998 failed to resolve the dispute.

The EC complained that the United States refuses to take account of the privatisation or change of ownership of the body receiving a subsidy, even if at a full market price, and to consider whether the subsidy still provides a benefit when assessing or reassessing the countervailable subsidy. It claimed that the US countervailing duties in question were in violation of the Agreement on Subsidies and Countervailing Measures.

The United States said that it could not agree to the EC request at that meeting. It maintained that its measures are in conformity with the Subsidies Agreement.

The DSB agreed to revert to the EC panel request at its next regular meeting scheduled for 17 February.

Surveillance of implementation

The European Communities said that it had started work on the DSB recommendations about its measures concerning meat and meat products (hormones). As a first step, it said it had decided to launch without delay a complementary risk assessment regarding these products, and that a number of scientific studies are now underway. It stressed that in its view, the DSB recommendations do not call for the abolition of the import prohibition in question.

The United States expressed concern that the EC had not yet begun the legislative process to withdraw the measure, which it said is called for by the DSB recommendations. It added that the status report was not clear on whether the EC would implement the DSB recommendations by 13 May 1999, the date set in WTO arbitration. The United States said it would like to avoid another conflict regarding implementation, and called on the EC to negotiate a WTO-consistent solution to the dispute.

Canada expressed disappointment that the EC was only initiating scientific studies and had not established implementation options. It emphasized the need to prevent another dispute on implementation of DSB recommendations.

India reported that a bill aimed at implementing DSB recommendations regarding its patent protection for pharmaceutical and agricultural chemical products would be introduced to the Parliament in the fourth week of February 1999.

The United States expressed concern that certain provisions of the Indian bill do not conform with the TRIPS Agreement, but welcomed India's decision to start consultations on this matter.

Argentina said that it would be reporting on the status of its implementation of the DSB recommendations concerning its measures affecting imports of footwear, textiles, apparel and other items at the next meeting, as agreed with the complainant, the United States.

Other Business

The following points were raised after the conclusion of the regular agenda:

Colombia expressed concern over Brazil's request for consultations with the EC regarding the latter's preferential treatment for soluble coffee imported from members of the Central American Common Market and the Andean Pact. It complained that Brazil had chosen a dispute-settlement procedure that does not allow the participation of members directly involved in the EC measures. Colombia stressed that the EC measures are aimed at combatting drug trafficking. Costa Rica, Honduras, Guatemala, El Salvador, Ecuador, Venezuela and Bolivia shared Colombia's concern. Brazil said that it is always ready to discuss matters of mutual interest with other members.

India, also on behalf of the other complainants (Malaysia, Pakistan and Thailand), said that they have reached an agreement with the United States setting 13 months as the reasonable period of time for the US implementation of the DSB recommendations regarding the shrimp dispute. The United States said that the cooperative manner in which this agreement was reached had set a positive tone for future discussions.