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TWN
Info Service on WTO and Trade Issues (Nov24/18) Geneva, 26 Nov (D. Ravi Kanth) — The United States on 25 November objected to the European Union’s request at the World Trade Organization for authorization to impose retaliatory duties of approximately $35 million annually over the alleged failure of the US to fully implement an earlier panel ruling against Washington’s imposition of anti-dumping and countervailing duties on ripe olives from Spain, said people familiar with the development. Following the US challenge, the chair of the WTO’s Dispute Settlement Body (DSB), Ambassador Saqer Abdullah Almoqbel of Saudi Arabia, referred the matter to arbitration, said people familiar with the dispute. In its statement issued at the meeting, the EU said it had no option but to take recourse to retaliatory measures against the US under Article 22.2 of the Dispute Settlement Understanding (DSU) to ensure that the US fully complied with the panel’s ruling, said people familiar with the development. In its response, the US informed the EU that following its objection to the EU request, under the terms of Article 22.6 of the DSU, the matter is automatically referred to arbitration. It said the EU’s action is unnecessary as Washington is ready to discuss the issue with Brussels on a bilateral basis. The US said that the EU’s suggestion that it has not taken any action on this matter is incorrect, and that the US continues to consult with interested parties on options to address the ruling. The EU maintained that it is ready to cooperate with the US to enable the arbitrator to circulate its decision within 60 days. A dispute panel in 2021 had ruled that the US failed to establish the existence and extent of indirect subsidisation by the EU to Spanish downstream processed olive products after taking into account all the relevant facts and circumstances. Though the US had until 14 January 2023 to implement the ruling, it allegedly failed to do so. Significantly, in February 2024, a compliance panel determined that the US failed to implement the requisite measures based on the panel ruling, said people familiar with the DSB proceedings. “DEATH KNELL” OF APPELLATE BODY At the DSB meeting on 25 November, the US sounded the “death knell” of the Appellate Body, after blocking, for the 81st time, a request tabled by Colombia on behalf of 130 countries for starting the selection process to fill the vacancies at the Appellate Body expeditiously, said people familiar with the development. Referring to the ongoing discussions on the reform of the dispute settlement system under the oversight of a facilitator, the US reiterated that it will not settle for a reformed system that does not address its interests. The US said that it is not working towards a restoration of the Appellate Body as it was previously, and that calls for the restoration of the Appellate Body undermine members’ collective efforts to reform the dispute settlement system, said people familiar with the development. The US statement, which would be tantamount to “killing” the Appellate Body, is in line with what the likely US Trade Representative Ambassador Robert Lighthizer, under the new Trump administration, had demanded, said people familiar with the development. Meanwhile, for the 13th time, the US targeted Hong Kong (China) by raising the matter of its National Security Law on free speech and human rights in Hong Kong (China), while referring to an earlier panel ruling (DS597) on origin-marking requirements. The US repeated its previous calls that members need to clarify and adopt a shared understanding of the essential security exception to prevent the further undermining of the WTO. Denouncing the US stance on the origin-marking requirements, Hong Kong (China) criticized the US for continuing to exploit the WTO rules and to misuse DSB meeting time for its political purposes, said people familiar with the development. Hong Kong (China) said the US calls are not only inappropriate and unnecessary, but also groundless and disgraceful. Expressing the hope that the US will not raise the matter again, Hong Kong (China) said it stands ready to go through the due process of appeal and called on the US to lift its blockage on the appointment of new Appellate Body members. China also criticized the US at the DSB meeting, saying that it is dismayed to see how such abusive behaviours could be reconciled with the US calls for a more efficient operation of WTO committees. China reiterated that the security exception under GATT 1994 is not entirely self-judging as correctly found by the panel on origin-marking requirements and six previous panels. Beijing rejected the US allegations regarding the situation in Hong Kong (China) and its unilateral interference in another member’s internal affairs. In response to the statements made by Hong Kong (China) and China, the US countered that it was not the US that brought this matter to the DSB but Hong Kong (China)’s choice to challenge the US national security action and to encourage the WTO panel to review the US invocation of the essential security exception. Under another agenda item, the EU blocked a first-time request for panel establishment by Indonesia to rule on anti-dumping measures imposed by Brussels on imports of fatty acid from Indonesia. Fatty acid is a key input in the making of lubricants, cosmetics, pharmaceuticals, and plastics as well as soaps, laundry detergents and cleaning powders. Indonesia explained that the EU’s anti-dumping measures on imported fatty acids from Indonesia are inconsistent with the WTO’s Anti-Dumping Agreement and the General Agreement on Tariffs and Trade (GATT) 1994. It said the EU measures have nullified and impaired benefits accruing to Indonesia directly or indirectly. Consultations between the two parties took place on 22 April but did not resolve the dispute, after which Indonesia chose to request the establishment of the panel. Expressing confidence that it will prevail in the dispute and that its actions will be declared to be in line with the WTO rules, the EU said it is not ready to accept the establishment of a panel. Using this opportunity, the EU invited Indonesia to join the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a contingent measure to safeguard the right to appeal in the absence of a functioning Appellate Body. Meanwhile, the DSB agreed to a request from the EU for the establishment of a panel to determine whether Colombia complied with an earlier WTO panel ruling against Colombia’s anti-dumping duties on imports of frozen fries from Belgium, Germany, and the Netherlands. Brazil, Japan, the United States, the Russian Federation, Turkiye and China reserved their third party rights to participate in the proceedings. Also at the DSB meeting, the US came under pressure for not implementing several WTO rulings for more than a decade. These included: “US – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan”; “United States – Section 110(5) of US Copyright Act”; “United States – Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea”; and “United States – Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China.” +
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