Case
DS155: Panel Reports
on “Argentina — measures affecting the export of bovine hides and
the import of finished leather”. Back
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Case brought
by the EU, with the US claiming third party rightsArgentina and
the EU have not appealed this case, and so the panel report was
adopted without modification. Argentina said it is already modifying
its customs procedures in response to one of the rulings, which deals
with keeping trade secrets confidential. Steps are also underway to
change its tax requirements on imports, Argentina said.
In
brief, this case concerns two separate measures:
1.
A measure allegedly hindering exports of bovine hides. The EU argued
that because representatives of the Argentine tanning industry
participated in the customs inspection of exported bovine hides, this
exercised pressure on exporters and thus restrained exports.
The
Panel rejected these arguments. It ruled that the EU had failed to
prove that the mere presence of tanning industry representatives
hindered exports. The panel added that the EU had not shown that
exports were in fact restrained.
The
EU also objected to the fact that the tanning industry representatives
had access to confidential business information. On this, the panel
supported the EU. It said Argentina was unreasonable in allowing for
the possibility that confidential business information could be
revealed to tanning industry representatives.
2.
Tax down payments (or “pre-payments”) on imported goods in general
(despite the reference in the case's title to “finished leather”).
The EU said these discriminated between imported and domestically
produced goods. It said that because importers were required to
deposit higher amounts to cover eventual tax payments than buyers of
competing domestically produced goods, this imposed a higher interest
burden on importers.
The
panel supported the EU. It said the down payments did increase the tax
burden in the form of interest payments and that this was greater for
imports than for competing domestic products.
Case DS46: Brazil —
Export financing programme for aircraft Back
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Canada's
request for a panel to determine whether Brazil is complying with the
rulings
This was the
second request, and a panel was set up — if possible, it will be the
original panel which first ruled on this case. The EU claimed third
party rights, and other countries can do so in the next few days.
The
panel has about 90 days to rule on whether Brazil's modified export
subsidy programme now complies with WTO agreements (i.e. the third
version of Programa de Financiamento às Exportaçoes, or PROEX, since
the dispute arose). It will be the second time a panel has ruled on
Brazil's compliance since the Dispute Settlement Body adopted the
original panel and Appellate Body reports on 20 August 1999.
There
was some discussion about whether the procedures that normally apply
for setting up a panel also apply for panels set up (or reconvened) to
rule on “compliance” (under Article 21.5 of the Dispute Settlement
Understanding).
In
particular, members exchanged views on whether some form of
consultation is needed legally or morally before a request for a panel
is tabled, and whether a member can block the creation of a panel, as
is the case when a dispute is first heard.
Brazil
and Canada also exchanged views on a number of issues that have been
raised by this particular phase of the case.
In
particular, Brazil complained about Canada's recent ban on beef
imported from Brazil. Public opinion in Brazil is convinced that this
is not about “mad cow disease” (BSE) but a disguised retaliation
in the aircraft dispute, Brazil said. Brazil also cited some similar
Canadian opinion expressed through the media.
Canada
said the temporary ban, announced on 2 February 2001, was a
coincidence and nothing to do with the aircraft dispute. It was
intended to protect Canadian consumers and resulted from Brazil's
failure to supply information to show that Brazil is free of BSE.
Since the ban was announced the Brazilian authorities have been
cooperating fully, Canada went on. An expert team including officials
from Canada's NAFTA partners — the US and Mexico — is now in
Brazil studying the situation. The final risk assessment will be made
“expeditiously”, Canada said, and if Brazil meets the
requirements, then the ban will be lifted.
Case
DS166: Appellate Body and panel reports
on “United States — Definitive safeguard
measures on imports of wheat gluten from the European
Communities” Back
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Case
brought by the EU, with Australia, Canada and New Zealand
claiming third party rights
The US said
it will implement the ruling and needs a “reasonable period of
time” to do so.
The
EU said the US can and should implement the ruling immediately by
withdrawing the safeguard measure because safeguards are
“extraordinary” measures taken against fair trade. The EU also
said that its “rebalancing” measure (i.e. restrictions imposed on
imports of corn or maize gluten under provisions of the Safeguards
Agreement) will be lifted as soon as the US withdraws its safeguard
restriction on wheat gluten.
Briefly,
the ruling adopted by the DSB on 19 January 2001 is that the US's
safeguard measure — a quantitative restriction imposed on 1 June
1998 on wheat gluten from the EU — is inconsistent with the WTO
Safeguards Agreement. There are also a number of complicated legal
issues discussed in both reports, involving interpretation of the
Safeguards Agreement and whether the US correctly followed various
procedures and took into account appropriate facts when it decided to
impose the safeguard measure.
The
DSB took note of the comments.
Other business: Argentina on the US rejecting
third parties' requests for consultations
Back
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Argentina
said the US had rejected, without giving any reason, its request for
consultations as a country with third-party interests in Case DS217 -
United States: Continued Dumping & Subsidy Offset Act of 2000
(unofficially known as the “Byrd amendment”). (The complaining
countries are: Australia, Brazil, Chile, the EU, India, Indonesia,
Japan, Korea and Thailand.)
This,
Argentina said, conflicts with both the spirit and the letter of the
Dispute Settlement Understanding (DSU), which requires countries to
try to solve their disputes through consultations. Argentina was
supported by Canada (which also asked to be a third party), India,
Japan, Hong Kong China, Brazil and the EU.
Part
of the discussion hinged on the question of whether the third-party
countries have “substantial trade interest”.
The
US said Article 4.11 of the DSU allows it to reject third-party
requests for consultations without calling for an explanation. In this
case, the rejected countries have not had the relevant measures
applied to their exports, the US said, meaning they do not have a
“substantial trade interest” (the phrase used in Art 4.11) in the
consultations. The US maintained that "substantial trade
interest" does not simply mean an interest in issues that have
implications for the way the system operates.
Canada
and other countries argued that the phrase includes an interest in the
implications for the system, otherwise the term “substantial
commercial interest” would have been used.
Because
this was discussed in “other business”, there was no attempt to
reach a decision on it.
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