TWN Info Service on WTO and Trade Issues (Oct19/04)
4 October 2019
Third World Network

US remains isolated in blocking AB appointments

Published in SUNS #8988 dated 2 October 2019

Geneva, 1 Oct (D. Ravi Kanth) – The United States remained isolated at the World Trade Organization Dispute Settlement Body (DSB) meeting on Monday over Washington’s stand against the continuation of the Appellate Body (AB).

Despite a call from 116 countries to begin the expeditious selection process for filling six AB vacancies, the US continued with its obstructive position that its concerns about the functioning of the AB are not addressed, trade envoys told the SUNS.

At the Dispute Settlement Body meeting on Monday, the US also remained at loggerheads with India, China, and several other countries over trade disputes concerning the unilateral actions launched by the US under Section 232 of its domestic law on security provisions, said trade envoys, who asked not to be quoted.

The US also came under sharp criticism for not complying with the previous DSB rulings in several disputes, especially from China.

In a trade dispute launched against India over New Delhi’s retaliatory measures against Washington’s additional duties imposed under Section 232 national security provisions, a US official criticized India for blocking its first request for establishing a dispute settlement panel.

The US maintained that India’s additional duties to the tune of $1.1 billion of American goods have breached “its MFN obligation under Article 1 of the GATT 1994, and India’s commitments under Article II of the GATT 1994 to abide by its tariff concessions.”

The US also argued that several members “are unilaterally retaliating against the United States for actions it has taken pursuant to Section 232 that, as national security actions, are fully justified under Article XXI of the GATT 1994.”

“These members, including India, are pretending that the US actions under Section 232 are so-called “safeguards”, and further pretend that their unilateral, retaliatory duties constitute suspension of substantially equivalent concessions under the WTO Agreement on Safeguards,” the US argued.

The US went on to blame “these members”, saying that just as these Members appear ready to undermine “the dispute settlement system by throwing out the plain meaning of Article XXI and 70 years of practice, so too are they ready to undermine the WTO by pretending they are following WTO rules while taking measures blatantly against those rules.”

The US said its actions under Section 232 security provisions come under “Article XIX of the GATT 1994”, that enables any member to depart temporarily from its commitments in order to take emergency action with respect to increased imports.

It repeatedly insisted that it is not invoking Article XIX concerning the Safeguards Agreement for its Section 232 measures.

In response to the US criticism, India said it is disappointed over the US demand for establishing a panel against India’s additional duties.

India maintained that it held consultations with the US on 1 August, saying its action to impose additional duties on American goods was prompted by the US decision to impose duties on steel and aluminum that were “nothing but disguised safeguard measures to protect the domestic industry.”

Several countries had already initiated disputes against the US under the provisions of the Safeguards Agreement, India said.

“The core issue in all these disputes is whether the United States’ measures are safeguard measures,” India emphasized.

India maintained that the current dispute raised by the US against India was under “Articles I and II of the GATT 1994 and does not refer to the actual controlling provisions, i.e. Article XIX: 3(a) of the GATT 1994 and Article 8 of the Agreement on Safeguards”.

According to India, “the US is not entitled to modify or suspend its schedules, in order to protect its domestic industries, at will and without consequences.”

India insisted that “it would prevail in this dispute, and that its actions would be declared a permitted and proportionate response to the US safeguard measures disguised as national security measures,” arguing that it can’t agree to the establishment of the panel.

China supported India’s statement against the first-time request by the US for establishing a panel against India’s additional duties on American goods.

“As we explained on many occasions, Section 232 measures [by the US] are disguised safeguard measures,” China insisted, emphasizing that “they intended to protect domestic sectors of the US by using tariffs to limit steel and aluminum imports.”

China said there are seven panels that are examining the US actions.

“The unprecedented number of complaints and the wide attention attracted by the world could suggest the general opposition against the unilateralism of the United States,” China maintained, saying it “supports members to safeguard their legitimate interests by taking rebalancing measures in accordance with WTO rules.”

China also severely criticized the US for not implementing several previous rulings, including the Appellate Body’s ruling against certain methodologies adopted by the US in anti-dumping proceedings involving Chinese goods.

The US is undermining the Dispute Settlement Body by not complying with various rulings for many years, China maintained.

The US also came under criticism for blocking a request from 116 members to initiate the expeditious selection process for filling the six vacancies at the Appellate Body.

The US said the systemic concerns it had raised about the functioning of the Appellate Body were not addressed.

Meanwhile, the European Union and Canada introduced their agreement on a bilateral interim arbitration procedure on appeals over panel rulings under Article 25 of the Dispute Settlement Understanding (see SUNS #8956 dated 29 July 2019).

The EU-Canada appeal arbitration procedure has gained little support so far among members, said a trade envoy, who asked not to be quoted.