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TWN Info Service on WTO and Trade Issues (Mar16/15)
31 March 2016
Third World Network

  
Panel to rule on Mexico's $472.3m sanctions request in tuna dispute
Published in SUNS #8209 dated 29 March 2016


Geneva, 24 Mar (Kanaga Raja) - An arbitration panel is to be established at the World Trade Organisation to rule on the level of retaliation to be allowed over a request by Mexico for authorisation to retaliate to the tune of $472.3 million annually in its dispute with the United States on its 'dolphin-safe' labelling regime for tuna products.

Mexico has sought the authorisation of the WTO over US failure to implement the DSB's adopted panel rulings and recommendations on this issue.

The US had on 22 March objected to the level of suspension of concessions or other obligations under the GATT 1994 proposed by Mexico, and the matter has now been automatically referred to arbitration.

The US-Mexico tuna dispute featured at a meeting of the WTO Dispute Settlement Body (DSB) on Wednesday (23 March) under the agenda item of US measures concerning the importation, marketing and sale of tuna and tuna products - recourse to Article 22.2 of the Dispute Settlement Understanding (DSU) by Mexico.

Mexico told the DSB meeting that it is going to pursue its arbitration proceedings despite an announcement by the US National Oceanic and Atmospheric Administration (NOAA) on 22 March that the US would be further amending the 'dolphin-safe' regulation to comply with the WTO ruling.

Mexico said that it is still carrying out a full analysis of the announcement by the NOAA.

[A DSU Article 21.5 Appellate Body report of 20 November 2015, on US compliance with the adopted rulings/ recommendations in this dispute, had found that the US had not brought its dolphin-safe labelling regime for tuna products into conformity with the recommendations and rulings of the DSB. A compliance panel under Article 21.5 had earlier on 14 April 2015 largely ruled that an amended measure instituted by the US concerning the importation, marketing and sale of tuna and tuna products from Mexico is inconsistent with its WTO obligations. (See SUNS #8141 dated 24 November 2015).

[On 3 December 2015, the DSB adopted the Appellate Body and compliance panel reports in the dispute, and on 11 March 2016, Mexico sought authorisation from the DSB to suspend the application to the US of tariff concessions and other related obligations in the goods sector under the GATT 1994 in the amount of $472.3 million annually.]

In its statement at the DSB on Wednesday, the US said that it was objecting to the level of retaliatory duties proposed by Mexico.

It maintained that the new NOAA labelling rules, which make six amendments to the existing requirements, directly address the WTO's findings.

According to trade officials, a brief discussion took place as to whether it was necessary for Mexico to put its arbitration request on the DSB's agenda.

The US and Japan said that there was no need to put the item on the DSB agenda as the objection of the US to Mexico's request, circulated on 22 March, automatically triggers arbitration proceedings under Article 22.6 of the DSU.

Mexico and several other delegations however said that they still believed that the matter should at least be considered by the DSB.

Under a prior understanding between the US and Mexico, both parties said that they will cooperate so as to enable the arbitration panel to circulate its decision within 60 days.

RUSSIA-UKRAINE FERTILIZER DISPUTE

In other actions, a request for the establishment of a dispute panel by the Russian Federation over anti-dumping duties imposed by Ukraine on imports of ammonium nitrate from the Russian Federation was blocked by Ukraine.

This was a first-time request and panel establishment will be automatic when the request comes up again before the DSB.

A Russian Federation communication to the WTO said that it had held consultations with Ukraine on 25 June 2015, and that these consultations did not resolve the dispute.

The Russian Federation considers that the measures at issue are inconsistent with Ukraine's obligations under a number of provisions of the Anti-Dumping Agreement and the GATT.

In its statement at the DSB, the Russian Federation said that the anti-dumping measures imposed on imports of ammonium nitrate originating in the Russian Federation following expiry and interim reviews are still active.

The Russian Federation believes that they were imposed and are currently applied in violation of numerous provisions of the WTO Agreements.

Expressing regret over Russia's request for panel establishment, Ukraine said that the measures at issue were introduced as a result of a "thorough and objective" investigation by the competent authorities in Ukraine and were applied according to the Agreement on Implementation of Article VI of the GATT 1994.

Ukraine further said that it has engaged in constructive and meaningful consultations with the Russian Federation in an effort to find a mutually acceptable solution that is respectful of Ukraine's rights under the relevant WTO agreements.

It said that its representatives provided extensive comments on the issues identified in the Russian Federation's request for consultations.

Ukraine believed that it has provided all necessary information and clarification explaining its position.

It remained open to continue these discussions in order to achieve a solution that is mutually acceptable, which is the preferred option under the rules and procedures governing the settlement of disputes.

Therefore, Ukraine said that it does not agree to accept this request for the establishment of a panel.

OTHER MATTERS ON THE DSB AGENDA

Under the agenda item of European Communities' definitive anti-dumping measures on certain iron or steel fasteners from China, the EU informed the DSB that on 26 February 2016, it had adopted a regulation repealing the measures at issue.

It referred to Commission Implementing Regulation (EU) 2016/278 of 26 February 2016 repealing the definitive anti-dumping duty imposed on imports of certain iron or steel fasteners originating in the People's Republic of China, as extended to imports of certain iron or steel fasteners consigned from Malaysia, whether declared as originating in Malaysia or not.

The EU said that the repeal took effect on 28 February 2016, adding that the measures found to be inconsistent with the covered agreements have clearly been removed, ensuring the EU's full compliance.

The EU considers that the repeal of those measures amounts to a final resolution of the matters raised in the dispute.

China welcomed the Commission Implementing Regulation of 26 February 2016 to repeal the definitive anti-dumping duty imposed on imports of certain iron or steel fasteners originating in China.

It said that the findings and rulings of the DSB in this dispute reveal once again that some WTO members' discriminative investigation practice and trade defence measures against products from China could not be justified by the WTO rules.

China further said that it will pay close attention to such kinds of practice and measures and will not hesitate to protect its industrial interests through the dispute settlement mechanism when necessary.

It noted that since the EU imposed high anti-dumping duty on imports of certain iron or steel fasteners originating in China in 2009, its industries and jobs have suffered heavy losses.

Under the agenda item of US Continued Dumping and Subsidy Offset Act of 2000 (the Byrd Amendment), Japan and the EU - with support from Canada, India, Brazil, and China - urged the US to stop the transfer of anti-dumping and countervailing duties to its industry and to submit status reports in these disputes.

India said that it shares the concerns expressed by the EU and Japan. The WTO-inconsistent disbursements continue unabated to the US domestic industry, it said.

India was of the view that this item should continue to remain on the DSB's agenda till such time as full compliance is achieved in this dispute.

According to trade officials, the US once again claimed that it had taken all actions necessary to implement the DSB's recommendations and rulings in these disputes.

SURVEILLANCE ITEMS

Under the agenda item of US countervailing measures on certain hot-rolled carbon steel flat products from India, the US said that on 7 March 2016, the US International Trade Commission (USITC) issued a new determination rendering the findings with respect to injury in the underlying proceeding concerning subsidized hot-rolled steel from India consistent with the findings of the panel and Appellate Body in this dispute.

The US said that on 9 March 2016, both it and India agreed to extend the Reasonable Period of Time (RPT) by 30 days, so as to expire on 18 April 2016.

The US added that it will continue to work to address the recommendations and rulings of the DSB and to consult with interested parties.

India said that it has "significant concerns" on the steps taken so far for implementing the DSB recommendations in this dispute.

India highlighted that even after 16 months of adoption of the Panel and Appellate Body reports and the RPT almost coming to an end shortly, the US seems to have made no efforts to repeal or amend Section 1677(7)G of its domestic law as to bring it into conformity with Articles 15.1, 15.2, 15.3 and 15.5 of the Subsidies and Countervailing Measures (SCM) Agreement despite the categorical finding and recommendation of the Appellate Body to this effect.

The failure to initiate any good faith efforts in this direction, with the RPT deadline being so close now, is a cause for serious and systemic concern, India charged.

It also observed that the USITC has recently issued a consistency determination to remove the inconsistency of its earlier injury finding in the underlying investigation.

India said that it is closely examining these findings to ensure conformity with Article 15 of the SCM Agreement.

India further observed that the USDOC (US Department of Commerce) has also recently issued certain preliminary findings to bring into conformity, some of its determinations previously found to be inconsistent in the dispute.

Noting that these are only preliminary determinations of the USDOC, India said it would not like to prematurely comment on its outcome. Nonetheless, India noted that while there is some progress, it appears to be very slow.

India urged the US to give priority to fully implement the DSB ruling in this dispute within the mutually agreed time frame.

It looked forward to the US fully implementing the DSB's recommendations and rulings in this dispute by the expiration of the reasonable period of time on 18 April 2016.

Meanwhile, at the last meeting of the DSB on 26 February, Cuba had argued that the agenda item of the implementation of the ruling in the dispute between the EU and the US over the Havana Club rum brand trademark had been removed from the regular agenda (under the surveillance item) without the dispute having been resolved, or a consensus reached to have it removed.

Raising the issue under the agenda item of 'other business' at that DSB meeting, Cuba had complained that under the DSU, an item can only be taken off the agenda (under the regular surveillance item) when the dispute has ended or when there is a consensus to have the item taken out of the agenda (see SUNS #8191 dated 1 March 2016).

According to trade officials, Cuba did not raise the issue at this DSB meeting.

REPORT BY THE CHAIR OF THE DSB

The Chair of the DSB, Ambassador Xavier Carim of South Africa, provided an update of the current workload of the Appellate Body, the number of disputes in the panel queue and at panel composition stage, as well as on the ability of the WTO Secretariat to meet the expected demand over the coming period.

According to trade officials, the Chair said that the Appellate Body is currently dealing with two appeals and can expect that up to four more appeals may be filed based on the projected dates for the circulation of panel reports in the next three months.

This will be followed soon thereafter by the circulation of the compliance panel report in the Airbus dispute.

Assuming that two-thirds of panel reports are appealed, the Appellate Body may expect, in addition to an appeal in the Airbus dispute, appeals in many of the 21 proceedings currently pending at the panel stage in the course of this year and in 2017.

The Chair said that given the limited number of staff available in the Appellate Body Secretariat, as of the second half of 2016 there are likely to be waiting periods before appeals can be staffed and Appellate Body Members can turn to dealing with them.

With regards to panels, he reported that there are currently 21 composed panels that have not yet issued their final reports. This includes multiple disputes that are being considered simultaneously by the same panel as one (such as Australia - plain packaging of tobacco products).

As of today, there are three composed panels awaiting staff to assist them, all of which were composed after 31 October 2015, the Chair said.

 


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