Three panels set in disputes

by Chakravarthi Raghavan

Geneva, 17 Nov 2000 -- The Dispute Settlement Body Friday agreed to set up a panel to look into US complaint against the Philippines over its TRIMS in the Motor Vehicles Sector, but the US will not proceed further toward naming of the panellists, pending consultations between the two and the General Council decisions on extension of time to developing countries over TRIMS.

In other actions, the DSB established a panel sought by the European Communities against India over its measures affecting the automotive sector and agreed to the issue being considered by the same panel as one set up on a similar complaint by the US against India. The panel is yet to be named.

A panel was also established on the EC complaint against Argentina over anti-dumping measures over import of ceramic floor tiles from Italy.

No action was taken on the panel request, that came up for the first time, on the EC request for a panel over Chile’s measures affecting transit and import of swordfish by EC (Spanish) fishing vessels. Chile contends that this is a measures for conservation of the swordfish stocks that are being rapidly depleted due to overfishing.

The DSB also adopted a panel ruling against Guatemala over anti-dumping measures on grey portland cement from Mexico.

In the request for a panel on Indian measures applicable to the automotive sector, while the EC and the US have both contended that the Indian actions are violative of the TRIMS agreement among others, India said that these were not TRIMS, and even if they were, the General Council decision of 8 May, as well as the General Council chairman’s statement/understanding of December 1999 that “all Members will exercise restraint on matters under consultations (about transition periods) so as not to prejudice further fruitful discussion and decisions on these matters...”

In the US dispute against the Philippines (where the panel request for the second time, and automatic under the DSU), the DSB decision came after a prolonged debate over the US move for a panel and its running counter to the General Council decision of 8 May on Trade-Related Investment Measures issues arising out of Art.5.3 of that agreement, empowering the Goods Council to extend the transition period for compliance. The Goods Council is currently considering some compromise ideas put forward by the chair on the extension of transition periods for those countries that have applied.

In a communication to the DSB, the Philippines contended that the establishment of the panel would violate WTO’s decision-making processes and hence must be rejected. The establishment of a panel sought by the US would render the process mandated under Art.5.3 of the TRIMs Agreement a nullity and contravene the General Council decision on TRIMS on 8 May.

The Philippines noted that at meeting of the Council for Trade in Goods (CTG) -- where the Philippines has filed a request for extension of the transition period for TRIMs --  it had consistently and repeatedly requested for a discussion on the merits of its request. But such discussion on the merits has never taken place, and no member, particularly the US, has come forward to address the merits of the request in the multilateral process.

And although the US and the Philippines have held bilateral consultations,these have been confined to the conditions which the US has sought to impose in exchange for its agreeing to the Philippines request. The US has never addressed the merits of the request even in bilateral consultations, and any event such bilateral consultations could not be a substitute for the multilateral process (envisaged in Art.5.3 of the TRIMs).

In the Philippine’s view, the requirements of Art. 5.3 of the TRIMs must be addressed before the US panel request could be considered by the DSB. The General Council decision of 8 May also required that the request, as that of other WTO members be given ‘positive consideration’ and also mandates that members preserve ‘the multilateral character of the process’ and the requested extensions of the TRIMs transition period “shall be examined in accordance with the rights and obligations under Art. 5.3 of the TRIMS.” The establishment of a panel in these circumstances would nullify the rights of the Philippines and the developing country members as provided under TRIMs. In discharging the responsibilities under the DSU, the DSB was the General Council, and as such the DSB could not contradict what in effect was its own decision (General Council decision of 8 May). And if a panel request was granted and its findings contravened the 8 May decision, that would violate the “security and predictability” provided by Art. 3.2 of the DSU.

A number of countries spoke in intervention, and except for the US, all of them urged the two parties to reach a mutually agreeable solution.  While all of them recognized the right of the US to have a panel established at the second time its request comes before the DSB, but underscored the conflict that would arise.

Among those who intervened in support of the Philippines were Thailand, Cuba, Pakistan, Argentina, St. Lucia, Hong Kong China, Brazil, Malaysia, Japan, Colombia, Venezuela, Chile, Singapore, Indonesia, Jamaica, Ecuador, the EC and Hungary.