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TWN Info
Service on WTO and Trade Issues (Sept20/05) Geneva, 31 Aug (Kanaga Raja) – The WTO Dispute Settlement Body (DSB) on 28 August agreed to establish a dispute panel, at the request of Turkey, to examine safeguard measures imposed by the European Union on imports of certain steel products. This was a second-time request and panel establishment was automatic. The United States, Switzerland, Norway, the United Kingdom, Ukraine, Russia, Argentina, Canada, China, Korea, Japan, Brazil, and India reserved their third party rights to the dispute. US CONTINUES TO BLOCK AB APPOINTMENTS Under a separate agenda item, the US again blocked a joint proposal by 121 WTO members calling for the start of the selection process to fill six vacancies on the seven-member Appellate Body (AB). The US again said that it was not in a position to agree to the joint proposal introduced by Mexico on behalf of 121 WTO Members that called for the simultaneous launch of the selection process to fill the six vacancies as soon as possible. Repeating the same arguments that it had made at previous DSB meetings, the US said that as it has explained in prior meetings, “we are not in a position to support the proposed decision. The systemic concerns that the United States has identified remain unaddressed.” Instead, Members should consider how to achieve meaningful reform of the dispute settlement system, the US added. TURKEY-EU STEEL DISPUTE In its dispute raised against the EU (WT/DS595/3), Turkey said that the measures at issue in the dispute are the provisional and definitive safeguard measures imposed by the European Union on imports of certain steel products and the investigation leading to the imposition of those measures. The European Commission had identified 26 steel products under investigation and the safeguard measure, in the form of a tariff rate quota (TRQ), was imposed on each product category in January 2019. According to Turkey, on 17 May 2019, the European Commission initiated a review of the EU definitive measures, which was notified to the WTO Committee on Safeguards on 20 May 2019. Based on the findings of this review, on 26 September 2019, the European Union adopted a regulation adjusting the definitive measures in a number of respects. On 19 December 2019, the European Union notified the WTO Committee on Safeguards of its intention to further amend the definitive measures. On 14 February 2020, the European Commission initiated a second review investigation of the definitive safeguard measures. Based on the findings of this second review, on 29 June 2020, the European Union adopted a regulation adjusting the definitive measures in a number of respects. Turkey said it is deeply concerned by the safeguard measures imposed by the European Union on imports of certain steel products and the underlying investigations that led to the imposition of those measures. Specifically, it added, these measures are inconsistent with the European Union’s obligations under the GATT 1994 and the Agreement on Safeguards, as follows: * Articles 2.1, 3.1, 4.1(b), 4.1(c), 4.2(a), 4.2(b), 4.2(c), 6 and 9.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, because the European Union failed to make reasoned and adequate findings and conclusions with respect to its determinations relating to the products under investigation and the domestic like or directly competitive products. Among others, the European Union failed to define the products under investigation and the domestic like or directly competitive products in a consistent manner throughout the investigation and failed to carry out safeguard investigations with respect to the individual product categories while distinct safeguard measures were imposed on each individual product category. * Articles 3.1 and 4.2(c) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, because the European Union failed to make reasoned and adequate findings and conclusions with respect to its determinations as to the unforeseen developments and as to how those unforeseen developments resulted in increased imports of the products concerned threatening to cause serious injury to domestic producers. The European Union also failed to make reasoned and adequate findings and conclusions with respect to its determinations as to the effect of the obligations it incurred under the GATT 1994 and how that effect has resulted in increased imports of the products concerned threatening serious injury to domestic producers. * Articles 2.1, 3.1, 4.2(a), 4.2(b) and 4.2(c) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 because the European Union failed to make reasoned and adequate findings and conclusions in its determinations with respect to the increase in imports of the products concerned, in absolute terms or relative to domestic production, in accordance with the requirements laid down in those provisions. * Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(a), 4.2(b) and 4.2(c) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 because the European Union failed to make reasoned and adequate findings and conclusions with respect to its determinations as to the existence of an alleged threat of serious injury to the domestic industry, understood as a significant overall impairment in the position of a domestic industry that is clearly imminent. * Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(a), 4.2(b) and 4.2(c) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, because the European Union failed to make reasoned and adequate findings and conclusions with respect to its determinations of the causal link between the increase in imports and the threat of serious injury to the domestic industry. In particular, there are no reasoned and adequate findings and conclusions on the causal relationship between the increased imports and the alleged threat of serious injury to the domestic industry nor explanations as to how the injury to the domestic industry caused by factors other than imports was not attributed to the increased imports. * Articles 2.1, 2.2, 3.1, 4.2(a), 4.2(b), 4.2(c), 5.1 and 6 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, because the European Union imposed the provisional and definitive safeguard measures on imports from certain countries only, excluding certain countries with which the European Union has concluded Free Trade Agreements. * Articles 3.1, 4.2(c), 5.1 and 7.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 because the European Union failed to apply the safeguard measures only the extent and for such time necessary to prevent serious injury and to facilitate adjustment. * Article XIII:2, including its chapeau and its paragraph (d), of the GATT 1994 and with Articles 5.1 and 5.2 of the Agreement on Safeguards because the European Union failed to determine the TRQs and allocate them among the exporting countries, including those having a substantial interest in supplying the products concerned, in accordance with the requirements set in the mentioned provisions. * Articles 3.1, 4.2(c), 5.1 and 7.4 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, because, following the reviews of the definitive measures, the European Union reduced the pace of liberalization of the definitive safeguard measures and made the safeguard measures more trade restrictive. * Article I:1 of the GATT 1994 because, when imposing the safeguard measures, the European Union has exempted imports originating in certain countries from the scope of application of the measures, and this constitutes an advantage that has not been accorded immediately and unconditionally to the like products originating in other WTO Members. * Article XIII:1 of the GATT 1994 because the TRQs are applied by the European Union on the importation of products from certain countries but not on the importation of the like products of all third countries which are therefore not similarly restricted. * Article II:1(b) of the GATT 1994 because, through the imposition of the safeguard measures at issue, the European Union imposed other duties or charges contrary to the second sentence of that provision. According to a Geneva trade official, the EU expressed regret that Turkey has once again requested a panel in this dispute. It said that it firmly believes that its measures are justified and are in line with the WTO rules. OTHER ACTIONS Meanwhile, a first-time panel request by China under Article 21.5 of the DSU to determine if China has complied with a WTO ruling in the dispute over domestic support for agricultural producers was blocked by the US at the DSB meeting. The EU appealed a panel ruling over cost adjustment methodologies and certain anti-dumping measures imposed on imports from Russia. According to a Geneva trade official, under the agenda item of “other business”, Russia expressed disappointment over the decision by the EU to appeal the panel ruling. It said that in the absence of a functioning Appellate Body, the EU’s action essentially means that the matter was being appealed “into the void”.
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