TWN Info Service on WTO and Trade Issues (Dec18/04)
10 December 2018
Third World Network

Two more panels set to examine US steel and aluminium duties
Published in SUNS #8811 dated 6 December 2018

Geneva, 5 Dec (Kanaga Raja) - The WTO Dispute Settlement Body (DSB) on Tuesday (4 December) agreed to establish two dispute panels, at the separate requests of India and Switzerland, to examine the additional duties imposed by the United States under Section 232 of its trade law (on grounds of national security) on imports of certain steel and aluminium products.

Both were second-time requests and panels establishment was automatic.

Switzerland, Canada, the EU, Russia, Brazil, Australia, Kyrgyzstan, Singapore, Japan, Saudi Arabia, Norway, Iceland, Venezuela, Ukraine, Qatar, New Zealand, Mexico, Malaysia, Hong Kong-China, China, Bahrain, Indonesia, Thailand, Chinese Taipei, and Turkey reserved their third party rights to the dispute raised by India.

Canada, the EU, Russia, Brazil, Australia, Kyrgyzstan, Singapore, Japan, Saudi Arabia, Norway, Iceland, Venezuela, Ukraine, Qatar, New Zealand, Mexico, Malaysia, Hong Kong-China, China, Bahrain, Indonesia, Thailand, Chinese Taipei, Turkey, South Africa, Colombia, and India reserved their third party rights to the dispute raised by Switzerland.

The DSB had earlier agreed, at a meeting on 21 November, to establish dispute panels at the request of seven other WTO members who had put forward separate, but almost identical complaints on the same issue.

At that meeting, China, the European Union, Canada, Mexico, Norway, Russia and Turkey had submitted their second-time requests for panel establishment over the US decision to impose an additional duty of 10% on imports of certain aluminium products and an additional duty of 25% on imports of certain steel products.

Thus, nine dispute panels have now been established to examine the addition al US tariffs on steel and aluminium.

In other actions, a request for the establishment of a panel by the US over the additional duties imposed by the Russian Federation on certain US products in response to the US tariffs on steel and aluminium was blocked by Russia at the DSB meeting on Tuesday.

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

The DSB had earlier on 21 November agreed to the establishment of four panels, also at the request of the US, to examine the additional duties imposed by Canada, China, the EU and Mexico on certain US products.

DISPUTES RAISED BY INDIA AND SWITZERLAND

India and Switzerland submitted their second requests for panels over the additional duties imposed by the US on imports of certain steel and aluminium products.

Their first requests were blocked by the US at the last DSB meeting on 21 November.

According to trade officials, both India and Switzerland had reiterated that the US actions are, in effect and content, safeguard measures.

They expressed concern over the US resort to the national security exception under Article XXI of the General Agreement on Tariffs and Trade (GATT) as a justification for the tariffs.

India referred to its statement of 21 November 2018 on this agenda item and confirmed that it remains fully valid today.

India said it is its firm view that the additional tariffs are inconsistent with the United States WTO obligations under the GATT 1994 and the Agreement on Safeguards.

India noted that at the last DSB meeting on 21 November, seven panels were established in relation to the same US measures and based on virtually identical legal claims.

It said this collective resort to dispute settlement reflects the serious concern of the WTO Membership over the US actions.

It also reflects trust and confidence in the WTO as a forum for resolving international trade disputes.

As communicated during the last DSB meeting, India's position is that a single panel should be established under DSU Article 9.1 for the DS544, DS547, DS5 48, DS550, DS551, DS552, DS554, DS556 and DS564 disputes, as they are all related to the same matter.

India said that it would be appropriate to establish a single panel to examine these disputes, particularly given the complainants' willingness to coordinate and proceed in this manner.

The plain reading of Article 9.1 of the DSU provides that a single panel shall be established, whenever feasible, for the examination of multiple complaints related to the same matter.

These circumstances are met here today, and therefore there is no valid reason to ignore the clear text of Article 9.1, India underlined.

According to trade officials, Switzerland said that it firmly challenges the US argument that, by merely invoking Article XXI, a panel is precluded from reviewing the claims against the US tariffs.

It said without the possibility of reviewing such a claim, any WTO member could, by simply invoking Article XXI, exempt measures of a commercial nature from the scope of WTO dispute settlement.

The US said that because it has invoked Article XX1 of the GATT 1994, there is no basis for a panel to review the Indian and Swiss claims of WTO-inconsistency.

There is no finding a panel could make other than to note that the US has invoked Article XXI, it maintained.

If the WTO were to undertake to review an invocation of Article XXI, it would undermine the legitimacy of the WTO dispute settlement system and even the viability of the WTO as a whole.

According to the US, the text of Article XXI is clear: each WTO Member has the right to determine, for itself, what it considers is in its own essential security interests.

This has been the understanding of the US for over 70 years, since the negotiation of the GATT.

And that understanding has been shared by every WTO Member whose national security action was subject of complaint, including several WTO Members speaking at the last DSB meeting, such as the European Union, Canada, Russia and others, it said.

The US reiterated that it does not agree to the establishment of a single panel, which it said requires consensus from the DSB.

Because the measures were taken for reasons of national security, the US said it sees no basis for this dispute and does not agree to the establishment of a single panel.

The EU said that it does not see a need to repeat the statements which it made in relation to its own parallel panel request in the last DSB meeting.

This all the more so, since the United States, the respondent in all these disputes, did not truly say anything new in the last meeting as well as today.

All this reflects positively on these disputes being ready for adjudication in the dispute settlement system, it said.

The EU said that it looks forward to engaging in that phase and to an adjudicative examination of the merits of what the United States has been advancing, inter alia regarding the justifiability and conditions of Article XXI of the GATT.

In the last meeting, the EU noted, the DSB failed to expressly establish a single panel, contrary to the provision of Article 9.1, last sentence, whereby "a single panel should be established to examine [multiple] complaints [related to the same matter] whenever feasible".

It said this means that Article 9.3 applies by default and automatically, and this is a "shall" provision not even addressed to the DSB, but self-executing and directly applicable.

[Article 9.1 states: "Where more than one Member requests the establishment of a panel related to the same matter, a single panel may be established to examine these complaints taking into account the rights of all Members concerned. A single panel should be established to examine such complaints whenever feasible."

[Article 9.2 states: "The single panel shall organize its examination and present its findings to the DSB in such a manner that the rights which the parties to the dispute would have enjoyed had separate panels examined the complaints are in no way impaired. If one of the parties to the dispute so requests, the panel shall submit separate reports on the dispute concerned. The written submissions by each of the complainants shall be made available to the other complainants, and each complainant shall have the right to be present when any one of the other complainants presents its views to the panel."

[Article 9.3 states: "If more than one panel is established to examine the complaints related to the same matter, to the greatest extent possible the same persons shall serve as panellists on each of the separate panels and the timetable for the panel process in such disputes shall be harmonized."]

Accordingly, the same persons must serve as panellists and the timetable must be harmonised, to the greatest extent possible, said the EU.

The EU said it counts on the Secretariat to implement this provision fully.

Obviously, the two complaints brought by India and Switzerland also relate to the same matter as do the seven complaints pursuant to which the DSB established panels on 21 November 2018, it noted.

OTHER ACTIONS

A request for a dispute panel by Qatar to examine Saudi Arabian measures concerning the protection of intellectual property rights held or applied for by Qatari entities was blocked by Saudi Arabia at the DSB meeting (more detail s will appear in a forthcoming issue of SUNS).

Meanwhile, a request for panel establishment by Mexico to examine measures imposed by Costa Rica on the importation of fresh avocados from Mexico was blocked by Costa Rica.

Both were first-time requests and panels establishment will be automatic when the requests come up again before the DSB.