The Dispute Settlement Body (DSB) agreed at its meeting on 28 July to a request from the European Union for the establishment of a compliance panel to review the United States’ implementation of an earlier panel ruling regarding US countervailing duties on ripe olives from Spain. The DSB also adopted a panel ruling in a complaint filed by Japan regarding China’s imposition of anti-dumping duties on imports of Japanese stainless steel.
United States — Anti-dumping and countervailing duties on ripe olives from Spain
The European Union submitted a request for the establishment of a compliance panel to determine whether the United States has fully implemented a previous panel ruling which found that several aspects of US investigations that led to the imposition of countervailing duties on ripe olives from Spain were inconsistent with WTO rules. The EU requested consultations with the United States to discuss its concerns about the US compliance efforts. The consultations took place in Geneva on 24 May but failed to resolve the dispute, thus prompting the EU’s request for the compliance panel.
The EU said it regrets that it still needs to litigate this matter, despite a clear ruling in its favour, but numerous attempts to find a solution have failed because of the lack of engagement by the United States. The EU said it disagrees with the US suggestion that it has completed the implementation of the ruling through the US final determination adopted on 20 December 2022. The EU said it expects the US to cooperate with the EU and the panel in order to ensure a swift conclusion of the compliance procedure.
The United States said it was disappointed that the EU has requested the establishment of a compliance panel. However, pursuant to a procedural understanding between the US and the EU, the United States accepts the establishment of a compliance panel and said it remains willing to engage with the EU to positively resolve this dispute.
The DSB agreed to the establishment of the compliance panel. Canada, Türkiye, Switzerland, China, Brazil, Japan, the Russian Federation and India reserved their third party rights in the proceedings.
DS601 China — Anti-dumping measures on stainless steel products from Japan
Japan said it was pleased to request the DSB to adopt the panel report in DS601. The dispute concerns China’s imposition of anti-dumping duties on imports of certain stainless steel products originating from Japan. The panel appropriately found that China acted inconsistently with its obligations under various provisions of the WTO’s Anti-Dumping Agreement and recommended that China bring its measures into conformity with its obligations under the WTO agreements, Japan said.
Japan added that it believes the panel’s ruling clearly indicates that China’s anti-dumping measures at issue are essentially flawed and therefore not tenable and called on China to abolish its measures immediately and completely.
China said it took note of the findings and recommendation of the panel in its final report. While the panel has concluded that there were certain deficiencies in the final determination issued by China’s Ministry of Commerce (MOFCOM), the panel dismissed a number of claims put forward by Japan. While China said it disagrees with certain aspects of the panel report, it has decided not to file an appeal. This shows that China firmly supports the multilateral trading system and will continue to uphold the authority and efficacy of the WTO, it said.
The DSB took note of the statements made and adopted the panel report.
DS597: United States — Origin marking requirement
The United States once again highlighted its concerns regarding the panel ruling in DS597, citing the “serious systemic and practical implications” of the proceedings. The WTO does not have the competence or the authority to assess the national security assessments of a member, nor does it have the competence or authority to pass judgment on the importance that the United States places on fundamental freedoms and human rights, or actions taken to support those values, the US said.
Hong Kong, China criticized the US for continuing to put this item on the DSB agenda despite the fact it is currently under appeal. It condemned US characterizations of the situation in Hong Kong, China and defended the actions of its authorities. The US should either stop blocking appointments of Appellate Body members so its appeal can be heard or work with other members in a sincere manner to reform the WTO’s dispute settlement system, said Hong Kong, China.
China and the Russian Federation also took the floor to criticize the US for continuing to put this item on the DSB agenda.
Discussions concerning dispute settlement reform
Marco Molina, Deputy Permanent Representative of Guatemala to the WTO, reported to members in his personal capacity on the informal meetings he was asked to convene by a group of WTO members on the issue of dispute settlement reform. The objective is to fulfil the June 2022 ministerial mandate of having a fully and well-functioning dispute settlement system accessible to all members by 2024.
Since he last reported to the DSB on 30 May, Mr Molina said delegates have continued to actively participate in the intense programme of meetings on dispute reform. Members have reached an understanding on 80% of the issues under consideration, which are now ripe to move to the drafting process, he said. Half of the issues in the remaining 20% are close to reaching the level of maturity needed for the drafting process, while the other half of that 20% refers to highly sensitive issues for which members still hold different conceptual views about how to tackle them, he added.
Mr Molina said that after the WTO’s summer break, he will continue consulting with delegates with a view to reaching a common understanding of potential solutions to these issues by the end of September. He said he was convinced that despite the conceptual differences, members can find a solution at the technical level that can reconcile their interests and concerns.
In addition to the conversations on the remaining issues, the drafting of a text for a potential agreement will start right after the summer break, Mr Molina said. The text will be drafted by delegates through a process that he will organize and facilitate. The same principles will continue to apply in the next phase of discussions, namely, a process that is multilateral, transparent, and inclusive. A tentative calendar of meetings will be circulated in the coming days, he added.
Thirty members then took the floor to comment. The chair of the DSB, Ambassador Petter Ølberg of Norway, said the interventions showed 1) broad appreciation for the work that Mr Molina is doing and his efforts to make the discussions transparent, multilateral and inclusive; 2) real concerns regarding resource constraints of members and scheduling of sessions which need to be taken into account and 3) broad convergence that at some point members will need to formalize this process, but there is no convergence yet on how and when that will happen.
Under other business, the United States said it was pleased to speak about the recent notifications to the DSB of mutually agreed solutions reached between the United States and India resolving six disputes between the parties.
The US said during the official state visit by Indian Prime Minister Narendra Modi in June, President Biden and Prime Minister Modi held successful meetings that served as a catalyst for efforts to resolve outstanding issues, including with respect to WTO matters. In the light of actions taken by the parties since these disputes were filed, the US and India determined that it was appropriate to terminate these disputes at this time. The settlement of these six disputes reinforces that the WTO dispute settlement system has to help parties work together to find a solution, the US said.
India said the principle of seeking a mutually accepted solution remains central to the WTO dispute resolution process and that the agreement reached with the US demonstrates the strength of the multilateral system and proves that the system retains the space for a pragmatic approach reflecting evolving bilateral realities. This system contributes to the overall stability and predictability of the global trading system, India said.
Source : WTO