At its meeting on 28 February, the Dispute Settlement Body (DSB) agreed to establish a panel to determine whether India has complied with a previous ruling regarding its domestic content requirements for solar cells and solar modules. The DSB also adopted a panel ruling regarding anti-dumping duties imposed by the European Union on biodiesel imports from Indonesia and a compliance panel ruling regarding Chinese anti-dumping and countervailing duties on broiler products from the United States.
DS456 India — Certain Measures Relating to Solar Cells and Solar Modules
India submitted its second request for the establishment of a panel to determine its compliance with the recommendations and rulings of the DSB in this dispute; the first request was blocked by the United States at a DSB meeting on 9 February. India reiterated that it has complied with the findings in DS456 and that the logical course for disagreements over whether a member has complied with a WTO ruling is recourse to compliance proceedings under Article 21.5 of the WTO’s Dispute Settlement Understanding (DSU).
The United States once again declared that India has no basis for asserting compliance with the ruling and that India continues to apply the WTO-inconsistent measures. The US also said it reserved its right to move forward with its request for WTO authorization to take countermeasures under Article 22.6 of the DSU, but that it remains willing to work with India to find a resolution to the dispute.
The DSB agreed to establish the compliance panel as requested by India. The European Union, Singapore, Korea, China, Canada, Japan, Chinese Taipei, Indonesia, Norway and the Russian Federation reserved their third party rights to participate in the panel proceedings.
DS480 European Union — Anti-Dumping Measures on Biodiesel from Indonesia
Indonesia said it welcomed the fact that the panel not only substantively reaffirmed the conclusions in a similar dispute case, “Argentina-Biodiesel” (DS473), but went much further. Not only should the costs in a dumping investigation be based on the records of the company and the country of origin, but the panel also made important findings concerning a proper determination of profit, the constructed export price and injury.
Indonesia said it was disappointed the panel did not agree that provisional duties wrongly imposed and collected by the European Union should be refunded, but given the current strains on the Appellate Body and the fact that the EU implied in the proceedings that it would work on the refund during the implementation stage, it decided not to file an appeal.
The European Union said it was pleased the panel had rejected a number of claims made by Indonesia. The EU also noted panel and Appellate Body clarification that WTO rules do not preclude an investigating authority from using information on the cost of production “in the country of origin” from sources outside the country as long as this information is apt or capable of yielding a cost of production in the country of origin. Regarding the other findings, the EU said the panel clarifications are relevant for the specific circumstances of the case. The EU said it intends to comply with the ruling.
The DSB adopted the panel report.
DS427 China — Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States
The United States said it was pleased to propose the adoption of the compliance panel report. The US is a world leader in broiler chicken production, and the ant-dumping and countervailing duties imposed by China, one of the largest markets for the US, cost its industry billions of dollars in lost sales. The panel’s comprehensive findings support the US view that China should have never imposed the duties in the first place, let alone continued them for four years following the original WTO ruling. China has informed the US that it decided to terminate the duties; this is welcome news, and the US said it is in the process of reviewing the information.
China said it welcomed the panel’s rejection of several US claims regarding the investigations but regretted the panel concluded that China failed to comply with the original recommendations and ruling. China said it was particularly concerned the compliance panel ruled on an issue which the original panel declined to examine on grounds of judicial economy. China said in keeping with its respect for international law and WTO treaties, it has implemented the panel decision through the Chinese Ministry of Commerce’s 27 February announcement terminating the anti-dumping and countervailing duties on the US broiler products.
The DSB adopted the compliance panel report.
DS482 Canada — Anti-Dumping Measures on Imports of Certain Carbon Steel Welded Pipe from Chinese Taipei
Chinese Taipei thanked Canada for announcing its intention to comply with the ruling in the dispute before the 25 March implementation deadline but said bilateral exchanges were continuing on the measures concerned. Chinese Taipei said it hoped to speed up these talks in order to resolve the dispute as soon as possible. Canada said it has addressed the technical questions posed by Chinese Taipei and remains ready to discuss the matter.
DS217 and DS234 United States – Continued Dumping and Subsidy Offset Act of 2000
The European Union once again requested that the United States cease transferring anti-dumping and countervailing duties to the US domestic industry, arguing that every such disbursement is a clear act of non-compliance with the rulings in DS217 and DS234. The EU said it would continue to place this item on the DSB agenda until the US implemented the ruling. Brazil and Canada supported the EU statement.
The United States said it had taken all the measures necessary to comply with the rulings and that there was no obligation for a member to provide further status reports once that member announces that it has complied with the ruling.
Surveillance of implementation
China said it has launched a reinvestigation in order to comply with the WTO panel’s findings in DS483, “China — Anti-Dumping Measures on Imports of Cellulose Pulp from Canada”. Canada said it looked forward to China’s review of the matter as soon as possible and expects that a negative injury finding prior to the 22 April deadline for implementation will resolve the dispute.
The United States said the US Commerce Department continues to work on its determination under Section 129 of the Uruguay Round Agreements Act to address the DSB’s recommendations in DS464, “US — Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea”. Korea said it was concerned about the delayed implementation by the US in the dispute, noting that 17 months have already passed since the ruling was adopted by the DSB. Canada also said it was concerned that the US has not complied with the ruling despite the expiry of the compliance deadline, adding that the US continues to collect cash deposits from Canadian exporters based on a methodology that was found to be “as such” inconsistent with WTO obligations in this dispute.
The United States presented its status reports with regard to DS184, “US — Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan”, and DS160, “US — Section 110(5) of the US Copyright Act”. The European Union presented its status reports with regard to DS291, “EC — Measures Affecting the Approval and Marketing of Biotech Products”.
Appellate Body matters
Mexico introduced a proposal sponsored by 63 WTO members calling for the launch of the selection processes to fill the three current vacancies on the Appellate Body. The proposal calls for the establishment of a Selection Committee, the submission of candidates within 30 days and the issuance of recommendations on the candidates by the Selection Committee within 60 days. The considerable number of members backing the proposal reflects a common concern with the current situation in the Appellate Body that is seriously affecting its workings and the dispute settlement system overall, and which works against the best interests of its members, Mexico said.
The United States said it was not in a position to support the proposed decision. The US said while it appreciated the willingness of members to engage in discussions on the concerns it has raised, it was disappointed the DSB had yet to take any action to address the problem of Appellate Body members continuing to hear appeals well after their terms have expired. Under Articles 17.1 and 17.2 of the Dispute Settlement Understanding (DSU), it is for the DSB, not the Appellate Body, to decide whether these former members can continue to serve on an appeal. The US also contested claims that this issue was never raised as a problem previously, citing one member raising systemic concerns when the practice in question (Rule 15 of the Working Procedures for Appellate Review) was adopted. This issue needs to be addressed before WTO members can move on to start the selection process.
More than 20 members then took the floor to express concerns about the continued impasse on the launch of the selection procedures. In general, these members repeated disappointment that the DSB has been unable to fulfill its legal obligation to appoint Appellate Body members as vacancies arise, as well as their growing concerns about the negative impact the delay could have on the WTO’s dispute settlement system as well as the WTO as a whole. A number of members reiterated they were prepared to discuss concerns about Rule 15 and other procedural matters, but that there should be no linkage between these discussions and launching the selection process, which needed to begin as soon as possible. Several asked the United States to clarify what it wanted exactly in terms of reforms and to engage with members on the issue.
The DSB chair, Ambassador Junichi Ihara of Japan, said it was regrettable that the DSB was not in a position to take a decision on the matter. The Appellate Body is currently reviewing seven cases, and more cases will be brought in the near future, he noted; if these vacancies are not filled quickly, it is almost certain that further delays in hearing cases will ensue. The chair said the sense of crisis expressed by some members should be shared by the membership as a whole, and that this needed to be translated into action. The chair said he would continue consultations on the matter until his final meeting as DSB chair in March.
Indonesia declared its intention to implement the ruling in DS477 and DS478, “Indonesia — Importation of Horticultural Products, Animals and Animal Products”, and said it would need a reasonable time to do so.Both the United States and New Zealand welcomed Indonesia’s clarification, with the US saying it looked forward to Indonesia removing the WTO-inconsistent measures.
The next regular meeting of the DSB will take place on 27 March.