TWN Info Service on WTO and Trade Issues (Nov09/02)
3 November 2009
Third World Network

Panel set over EC measures on Chinese iron or steel fasteners
Published in SUNS #6801 dated 27 October 2009

Geneva, 26 Oct (Kanaga Raja) -- The WTO Dispute Settlement Body on 23 October agreed to establish a panel, at the request of China, to rule on definitive anti-dumping measures imposed by the European Communities on certain iron or steel fasteners from China.

This was a first-time request by China, but the EC, which was entitled to block the Chinese request at this instance, chose not to do so.

Canada, the US, Chinese-Taipei, India and Japan reserved their third-party rights to the dispute.

The EC-China dispute is with respect to Article 9(5) of Council Regulation (EC) No. 384/96 of 22 December 1995 on Protection against Dumped Imports from Countries not Members of the European Community, as amended, and Council Regulation (EC) No. 91/2009 of 26 January 2009 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in China.

According to a communication from China, Article 9(5) of the Council Regulation (EC) No. 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the EC, as amended, (the Basic AD Regulation) provides that, in case of imports from non-market economy countries including China, the anti-dumping duty shall be specified for the supplying country concerned and not for each supplier and that an individual duty will only be specified for the exporters which can demonstrate, on the basis of properly substantiated claims, that they fulfill all the criteria listed in that provision.

China submitted that Article 9(5) of the Basic AD Regulation was inconsistent as such with the obligations under the provisions of the Anti-Dumping Agreement, the GATT 1994 and the Marrakesh Agreement Establishing the World Trade Organisation.

The Chinese communication further said that through the Definitive Regulation (Council Regulation No. 91/2009 of 26 January 2009), the EC established for Chinese producers/exporters of certain iron or steel fasteners dumping margins ranging from 0% to 115.4% and imposed a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in China ranging from 0% to 85%.

China submitted that this measure was inconsistent with the provisions of the Anti-Dumping Agreement and of the GATT 1994.

It said that the EC's measures nullify and impair benefits accruing to China under the Anti-Dumping Agreement, the GATT 1994, the Marrakech Agreement Establishing the World Trade Organisation and China's Protocol of Accession.

In its statement at the DSB on 23 October, China said that its government and industry on many occasions had expressed strong dissatisfaction and registered serious concerns. Unfortunately, bilateral dialogue and consultations under the DSU failed to lead to a satisfactory resolution of the matter.

China urged the EC to promptly withdraw the rules and measures that are inconsistent with the WTO and cease the disturbance to Sino-EC trade and impairment of China's interests.

Regretting China's decision to request a panel, the EC recalled that anti-dumping measures are not about protectionism, but about fighting unfair trade.

The EC said that it strictly follows the applicable WTO rules in all its anti-dumping cases, and that it is strongly convinced of the strength of its case. "We stand ready to defend our measures that we consider to be fully consistent with WTO law."

Noting that at this point in time, it has no reason to be hopeful that a mutually agreed solution can still be found, the EC said that it accepts China's request for the establishment of a panel.

In other actions, the United States blocked two first-time panel requests - one by Canada and the other by Mexico - concerning certain country-of-origin labeling (COOL) requirements.

Panel establishment will be automatic if both requests come up again at the DSB.

In a statement at the DSB, Canada complained that the US has implemented a mandatory Country of Origin Labeling measure (COOL) that imposes additional and unnecessary costs on Canadian beef and pork exporters as a result of the need to segregate animals prior to slaughter and the onerous record-keeping requirements imposed.

It said that the COOL is discouraging US retailers, processors, feed-lots and producers from buying Canadian livestock and meat. The negative impact on Canadian beef, pork and cattle exporters has been significant.

Noting that in 2008, bilateral agricultural trade with the United States totaled approximately $37 billion, Canada said the COOL requirements "are so onerous that they affect the ability of our cattle and hog exporters to compete with US producers."

Canada said that this is why it had no choice but to pursue dispute settlement.

Mexico said that it had two rounds of consultations with the US but failed to find a solution to the matter.

The US said that WTO Members have long recognized that country of origin labeling is a legitimate policy. Indeed, added the US, that recognition predates the entry into force of the WTO Agreement. It is common for WTO Members to require that goods be labeled as to their origin, it added.

Under a separate agenda item, a first-time request by the United States for the establishment of a panel in relation to certain EC measures affecting poultry meat and poultry meat products from the United States was blocked by the EC.

Panel establishment will be automatic when the US request comes up again at the DSB.

In a statement at the DSB, the US said that in 2002, it had requested the European Commission to approve four pathogen reduction treatments (PRTs) for use in the production of poultry intended for export to the EC.

It said that the EC's own scientists have found that the importation and consumption of poultry processed with those four PRTs does not pose a risk to human health.

Nevertheless, said the US, after more than six years, which included significant unexplained delays, the EC has not approved any of these four PRTs. Instead, it has rejected the requests for their approval.

Adding to its concerns, the US further said, the EC has never published or otherwise made available the process it follows for approving substances such as the PRTs in question. +