DS517: China – Tariff Rate Quotas for Certain Agricultural Products

The United States said it had serious concerns regarding China's administration of its TRQs for wheat, short- and medium-grain rice, long-grain rice and corn. The United States said that China was failing to live up to basic WTO commitments on import restrictions and TRQ administration. The US panel request explained that China did not administer these TRQs consistently with its 2001 WTO Accession Protocol or the General Agreement on Tariffs and Trade (GATT) 1994. Accordingly, the United States requested, for the second time, the establishment of a panel to examine its complaint.

China said that it regretted that the United States had requested the establishment of a panel again. China said that it was serious about administering its TRQ mechanism in line with its WTO commitments and that it stood ready to defend its interests.

The DSB agreed to establish a panel.  Australia, Brazil, Canada, Ecuador, the European Union, Guatemala, Indonesia, Japan, Kazakhstan, Korea, Norway, the Russian Federation, Singapore, Chinese Taipei and Viet Nam reserved their third party rights to participate in the panel proceedings.

DS487: United States — Conditional Tax Incentives for Large Civil Aircraft

The European Union said that the WTO needed a dispute settlement system that was mandatory, binding, independent, objective and properly resourced. The EU believed that all members shared or should share this perspective. However, the EU was disappointed with the result in this dispute.

The EU said it was concerned the Appellate Body's analysis of "contingency" was different under Articles 3.1(a) and 3.1(b) of the WTO's Agreement on Subsidies and Countervailing Measures (SCM Agreement). The EU also said it did not understand why the domestic conditionality in the second sitting provision of the US measure in question did not constitute a breach of Article 3.1(b) of the SCM Agreement, or how the two hypotheticals put forward by the US had any bearing on the plain language of the second sitting provision. The EU said it hoped that this particular Appellate Body report would prove to be unique and "a dead end".

The United States said the panel and Appellate Body reports in this dispute affirmed that the United States had not granted prohibited subsidies to Boeing. The EU claimed that certain tax incentives were prohibited import-substitution subsidies under Articles 3.1(b) and 3.2 of the SCM Agreement. However, the panel rejected all of the EU's claims but one. Ultimately the Appellate Body overturned that finding too. The United States said the EU had long pursued claims at the WTO to validate its view that its billions of dollars in subsidies for Airbus were comparable to supposed US subsidies for Boeing, but at each stage the WTO has found that there is no comparison. The United States called on the EU to finally negotiate and find a solution that would end its WTO-inconsistent subsidies.

Canada said it welcomes the Appellate Body's finding that a subsidy which simply requires production by the recipient of both specialized input goods and final goods does not violate Article 3.1(b) of the SCM Agreement.

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

Next meeting

The next regular meeting of the DSB will take place on 29 September.