|
||
|
TWN Info
Service on WTO and Trade Issues (Sept20/22) Geneva, 29 Sep (Kanaga Raja) – The WTO Dispute Settlement Body (DSB) on Monday agreed to establish a panel, at the request of China, to determine if China has complied with an earlier WTO ruling in a dispute over domestic support for agricultural producers. This was a second-time request under Article 21.5 of the Dispute Settlement Understanding (DSU) and panel establishment was automatic. The Russian Federation, Chinese Taipei, Turkey, Norway, Pakistan, Thailand, the European Union, India, Korea, Japan, Canada, Brazil, Australia and Guatemala reserved their third party rights to the dispute. US CONTINUES TO BLOCK AB APPOINTMENTS Under a separate agenda item, the US again blocked a joint proposal by 121 WTO members calling for the start of the selection process to fill six vacancies on the seven-member Appellate Body (AB). The US again said that it was not in a position to agree to the joint proposal introduced by Mexico on behalf of 121 WTO Members that called for the simultaneous launch of the selection process to fill the six vacancies as soon as possible. Repeating the same arguments that it had made at previous DSB meetings, the US said that as it has explained in prior meetings, it was not in a position to support the proposed decision. The systemic concerns that the United States has identified remain unaddressed, it added. US-CHINA DISPUTE In its request for a compliance panel (WT/DS511/19), China noted that on 26 April 2019, the DSB adopted the report of the panel in China – Domestic Support for Agricultural Producers (DS511). The report found that, in the years 2012, 2013, 2014 and 2015, China had provided domestic support in the form of market price support to producers of wheat, Indica rice and Japonica rice that, expressed in terms of its Current Total AMS (aggregate measurement of support), exceeded China’s commitment level of “nil”, set forth in Section I of Part IV of China’s Schedule of Concessions on Goods CLII. The report concluded that China had acted inconsistently with its obligations under Articles 3.2 and 6.3 of the Agreement on Agriculture. In accordance with the report, the DSB recommended that China bring its measures into conformity with its obligations under the Agreement on Agriculture. China said on 18 June 2020, it notified the DSB that it had implemented the recommendations and rulings of the DSB by adopting the following measures taken to comply: a. For wheat, China promulgated, on 12 October 2019, the Notice on Announcing the Minimum Procurement Price for Wheat for 2020 (Fa Gai Jia Ge [2019] No. 1617), and the Notice on Improving the Wheat Minimum Procurement Price Policy (Guo Liang Liang [2019] No.284). b. For rice, China promulgated, on 28 February 2020, the Notice on Announcing the Minimum Procurement Price for Rice for 2020 (Fa Gai Jia Ge [2020] No.290) and the Notice on Improving the Rice Minimum Procurement Price Policy (Guo Liang Liang [2020] No.41). China said as set forth in these measures taken to comply, starting from 2020, maximum procurement amounts for wheat and rice shall be fixed each year under the Minimum Procurement Price (“MPP”) policies for those products, and the amount of production that is eligible to receive the minimum procurement price shall be limited to the maximum procurement amount. It said the maximum procurement amounts and minimum procurement prices for wheat and rice, fixed each year in advance of the respective planting seasons, are designed to work together to ensure that China provides domestic support, in the form of market price support to producers of wheat, Indica rice and Japonica rice, within the limit of applicable de minimis level (i.e., 8.5% of the total value of production of a basic agriculture product during the relevant year), and that is, therefore, consistent with China’s obligations under Articles 3.2 and 6.3 of the Agreement on Agriculture. Therefore, as of 31 March 2020, the date of expiry of the originally agreed reasonable period of time (“RPT”) for China to implement, China had complied with the DSB’s recommendations and rulings, it added. Nonetheless, the United States filed a request, under Article 22.2 of the DSU, for authorization from the DSB to suspend concessions or other obligations under the GATT 1994 or other agreements listed in Annex 1A to the WTO Agreement, in the amount of US$1.3 billion for 2020, said China. China has objected to the level of suspension of concessions or other obligations, as proposed by the United States, and the DSB referred the matter to arbitration under Article 22.6 of the DSU. According to the Chinese communication, it is significant that the United States has filed its Article 22.2 request absent a multilateral finding that China’s measures taken to comply fail to achieve compliance. Under the DSU, the United States was required to seek recourse to review of China’s measures taken to comply under Article 21.5 of the DSU, said China. Absent a multilateral finding that measures taken to comply have failed to achieve compliance, there is no basis for an Article 22.6 arbitrator to determine a level of nullification or impairment resulting from such an alleged non-compliance, it added. Moreover, the DSB cannot grant authorization to suspend concessions in any amount where the responding Member concerned has come into compliance, China emphasized. Nonetheless, in this dispute, the United States has failed to initiate compliance proceedings under Article 21.5 of the DSU to seek multilateral review of what it explicitly acknowledged as “actions” by China to comply. Moreover, said China, the United States has not followed the established practice of seeking to agree a sequencing arrangement with China that would set out the “logical way forward” in light of the apparent US disagreement that China’s measures taken to comply have achieved compliance. In these circumstances, China said that it is filing its request for the establishment of a compliance panel under Article 21.5 of the DSU. According to a Geneva trade official, China expressed concern over the systematic implication of the approach adopted by the US in this dispute, which it said would open the door to the abuse of the dispute settlement system. China said the US action comes at a time when it is sharply increasing its own domestic support to its farmers. This raises legitimate questions as to whether the US itself is providing agricultural support in excess of its allowed limits, it added. According to a Geneva trade official, the US said that it disagrees with the assertions made by China. The US claimed that China continues to provide significant levels of domestic support to its agricultural producers. According to the US, the revised market price support measures notified by China in June did not in themselves demonstrate that China is now providing a level of domestic support within its commitment levels. US APPEALS PANEL REPORT IN SOFTWOOD LUMBER DISPUTE The US appealed the panel report in the dispute over countervailing measures imposed by the US on softwood lumber from Canada. In a statement on this issue under a separate agenda item, Canada welcomed the findings and recommendations of the Panel regarding the US Department of Commerce’s (USDOC) final countervailing duty determination concerning softwood lumber from Canada. According to Canada, the Panel repeatedly found that the Department of Commerce improperly determined that the Canadian provinces provide subsidies to softwood lumber producers by selling Crown timber for less than adequate remuneration. Canada estimated that nearly 3 billion US dollars have already been collected in duties on Canadian exports of softwood lumber as a result of the Department of Commerce’s errors. Canada noted that in a statement at the last DSB meeting (in late August), the United States stated that, despite the ongoing Appellate Body impasse, the dispute settlement system still worked. “The United States’ behaviour in this dispute and in previous disputes contradicts its statement,” said Canada. In this dispute, in the absence of a functioning Appellate Body, Canada offered to the United States to enter into an appeal-arbitration agreement that would have allowed the United States to seek review of the Panel Report if it so wished, it said. Having refused that offer, Canada would have hoped that the United States would have allowed the adoption of the Panel report and implemented its recommendations and rulings as soon as possible, it added. By appealing this Panel report to an Appellate Body (AB) that it made non-functional through its blockage of AB member appointments, the United States is compounding the unfair treatment accorded to Canadian softwood lumber producers, said Canada. An appeal, in the current circumstances, has the effect of denying Canada its right, under the Dispute Settlement Understanding, to prompt settlement of this dispute. Canada also said it was surprised that the United States has appealed given the stated position of the US Trade Representative (USTR) that there is no need for an Appellate Body. According to a Geneva trade official, the US said that it is open to discussions with Canada on the way forward in this dispute. It said that the suggestion that the US has appealed the panel report simply to delay this dispute settlement proceeding is utterly without foundation. The European Union said that this is another dispute that illustrates the grave consequences of the blockage of Appellate Body appointments and frustrates the essential rights of members to have the right to appeal a panel report. It is also precisely why the EU and other members have put in place the multi-party interim appeal arbitration arrangement (MPIA) to allow members’ rights to be preserved in a balanced manner, said the EU. COVID-19 AND DISPUTE SETTLEMENT Meanwhile, under a separate agenda item, Australia made a statement on behalf of Australia, Brazil, Canada, Ecuador, Guatemala, Hong Kong-China, Mexico, New Zealand, Norway, Peru, Singapore, Switzerland, Ukraine and the United Kingdom on COVID-19 and dispute settlement. According to a Geneva trade official, Australia expressed concern over the delays in panel and other dispute settlement proceedings as a result of the COVID-19 pandemic. While it is encouraging that DSB meetings have been able to resume at the WTO premises since July, ongoing restrictions affecting international travel and immigration have put into question the feasibility of physical participation of panelists and capital-based officials at meetings in Geneva into the future, said Australia, adding that this means putting disputes on hold indefinitely. Australia, on behalf of the 14 WTO members, called on panels to consider, in consultation with parties, flexible, alternative arrangements to ensure that the dispute proceedings can continue to progress in a timely manner despite the challenge posed by the current restrictions.
|
||
