Three disputes sent to panel

by Chakravarthi Raghavan

Geneva, 24 July 2001 - The WTO’s Dispute Settlement Body agreed Tuesday to establish a panel to adjudicate a dispute raised by India against the US over its anti-dumping and countervailing duty measures against imports of steel plate from India.

In other actions, the DSB also sent to panels a dispute raised by Brazil against AD duties levied by the European Community against imports of malleable cast iron tube or pipe fittings from Brazil, and a Peruvian complaint against the EC’s regulations setting ‘common marketing standards’ for preserved sardines, causing discriminatory treatment of preserved sardines imported from Peru.

The DSB also had before it a joint request from nine members for a panel against the US over the Byrd amendment to its anti-dumping law, under which dumping duties and counter-vailing measures and duties collected on imports are to redistributed to the ‘affected domestic producers’.

This is the first time the panel reference came, and the US blocked reference (which will be automatic when it comes up a second time).

The dispute, sponsored by the largest number of joint requests so far in the WTO, and with indications that more requests are coming in, is to the US law, ‘Continued Dumping and Subsidy Offset Act of 2000’.

The complainants are Australia, Brazil, Chile, the EC, India, Indonesia, Japan, Korea and Thailand. Canada and Mexico have raised separate disputes on the same, and this too will come up at a future meeting.

The US law mandates the US customs authorities to distribute on an annual basis the duties (termed offset duties) assessed pursuant to a countervailing duty order, an anti-dumping order or a finding under the AD Act of 1921 to the ‘affected domestic producers’ for their ‘qualifying expenses’. The affected producers, under the law, are those petitioners in the US for anti-dumping actions or interested parties who support such actions. The ‘qualifying expenses’ include expenditure on ‘manufacturing facilities, equipment, acquisition of technology, acquisition of raw material or other inputs.” The law leaves no discretion to the authorities, and they must pay the ‘offsets’ whenever the conditions prescribed under the law are present and is a mandatory legislation. The offsets are seen as specific actions against anti-dumping and subsidization not contemplated in the GATT or the Anti-Dumping Agreement or the Subsidies and Countervailing Measures Act.

Japan told the DSB that the law had been a matter of grave concern to many members, and was an incentive to domestic producers to file complaints, and make it more difficult for exporters to secure an agreement, like price undertakings agreement, with the US Department of Commerce, since the complainants have an interest in getting duties levied. While last year, President Clinton had underscored that the law would violate the WTO and asked Congress to change it, the Bush administration had now enacted implementing regulations to enforce the law.

The EC also expressed concern and said this was the largest joint action sponsored by industrial and developing countries, showing the systemic concerns over the US law. The law now not only offered protection to the US industry, but provided an incentive to file cases. “In effect is a US vs. Rest of the World dispute,” the EC said.

Among the other complainants, Australia was concerned that the US example would be followed by others. India said that a recent panel ruling had recently ‘price undertakings’ could be a constructive remedy in such cases, and would detract from the special and differential treatment provisions of the agreement.

Hong Kong China shared the concerns of others, and particularly because of the US law providing a copy-cat precedent.

The US however insisted that the law had not influenced in any way US determinations or impositions of countervailing duties in AD or subsidy investigations, and the WTO agreement did not say what a country could do with the anti-dumping duties after their levy.

In the case against the US over levy of antidumping duties against Steel Authority of India Ltd (SAIL), India charged that the duties imposed on cut-to-length plate from India violated the provisions of the AD agreement.  Listing several of the violations, India also complained about the ‘self-described long-standing practices’ of the US department of commerce (DOC) in these matters, using socalled ‘total facts’ available to make a determination, rather than ‘all information’ meeting the criteria. The DOC practice required rejection of verifiable information and other such practices.

In its complaint, Brazil has raised several procedural and substantive issues to challenge the EU’s anti-dumping duties on malleable cast iron tube or pipe fittings.

In Peruvian complaint against the EC, Peru has complained that till the latest regulations, Peru had been able to export as ‘preserved sardines’ to the German market, ‘Pacific sardines’, but now the EC regulations allows marketing as preserved sardines, only the fish of the species Sardina pilchardus Walbaum.

Earlier, in a surveillance report on the banana regime, the EC said it was unable to implement the accord with the US and Ecuador on the compromise banana regime, without getting a waiver from the WTO for its Lome/Cotonou agreement for preferences to the ACP countries.

The Latin American banana complainants said that a waiver request could not be considered without full details of the actual violations of the WTO agreements against which waiver was sought. Some of the complaints, as also the US, also complained that the banana agreement was being thwarted by a license granted by an EU member state to one of its corporations for banana imports under the preferential scheme.

In two other cases, the US got an extension of the Reasonable Period of Time for implementation, where the RPT is due to end in the next few days. The US sought and got time till the end of the year or the current session of the US Congress, whichever is earlier.

The first concerns the US copyright act, and the provisions in the US law enabling recorded music to be played or relayed in some of the restaurants and other public places without any royalty being paid. The US is consulting with the EC on the compensation to be paid, for the extended RPT.

In the other case, relating to the US Anti-Dumping Act of 1916 (where private parties can initiative civil and criminal complaints, and which the WTO ruled is illegal), the US has provided a copy of its intended legislation to be introduced in Congress and was hopeful it could be adopted. – SUNS4943

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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