Permanent Mission of the European Union to
the World Trade Organization (WTO)

EU Statements at the Regular DSB meeting - 22 November 2019

Geneva, 27/11/2019 - 00:00, UNIQUE ID: 191127_13
Local Statements

AGENDA POINT 1: SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

 

B. UNITED STATES – SECTION 110(5) OF THE US COPYRIGHT ACT: STATUS REPORT BY THE UNITED STATES (WT/DS160/24/ADD.176)

 

  • We thank the United States for its status report and its statement today.
  • We refer to our previous statements. We would like to resolve this case as soon as possible.

 

AGENDA POINT 1: SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

 

C.    EUROPEAN COMMUNITIES – MEASURES AFFECTING THE APPROVAL AND MARKETING OF BIOTECH PRODUCTS: STATUS REPORT BY THE EUROPEAN UNION (WT/DS291/37/ADD.139)

 

  • The EU continues to progress with the authorisations where the European Food Safety Authority has finalised its scientific opinion and concluded that there are no safety concerns.
  • As repeatedly explained by the EU and confirmed by the US delegation during the EU-US biannual consultations held on 12 June 2019, efforts to reduce delays in authorisation procedures are constantly maintained at a high level at all stages of the authorisation procedure. This has resulted in a clear improvement of the situation.
  • During the last meetings of the DSB, the United States referred to what is known as the EU “opt-out Directive”. We would like to reiterate that the DSB recommendations and rulings do not cover that “opt-out Directive”.
  • The EU acts in line with its WTO obligations. Finally, we recall that the EU approval system is not covered by the DSB's recommendations and rulings.

Second intervention

  • The WTO Agreements do not require full international harmonisation and leave some regulatory space or autonomy to individual WTO Members. The European Union has different regulatory approaches to non-GMOs and GMOs but, in all cases, such regulations do not discriminate between imported and domestic like products.
  • No EU Member State has imposed any “ban”. Under the terms of the Directive, an EU Member State can adopt measures restricting or prohibiting cultivation only when such measures are in line with EU law and are reasoned, proportional, non-discriminatory and based on compelling grounds.
  • The free movement of seeds is embedded in Article 22 of Directive 2001/18/EC: ‘Member States may not prohibit, restrict or impede the placing on the market of GMOs, as or in products, which comply with the requirements of this Directive’. We also note that according to the provisions of the opt-out Directive (Article 26b, point 8) the measures adopted under the Directive ‘shall not affect the free circulation of authorised GMOs’ in the EU.
  • Currently the EU Common Catalogue of varieties of agricultural species includes 150 varieties of maize MON 810, which are allowed to be marketed in the EU. Until today, the Commission has never received any complaints from seed operators or other stakeholders concerning the restriction of marketing of MON810 seeds in the EU. This confirms the smooth functioning of the internal market of MON810 seeds.
  • If the US has any evidence at their disposal substantiating the disruption of the free movement of MON810 seeds in the EU we would be happy to discuss it with the US.

 

AGENDA POINT 1: SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

 

G.          BRAZIL – CERTAIN MEASURES CONCERNING TAXATION AND CHARGES: STATUS REPORT BY BRAZIL (WT/DS472/16)

  • We thank Brazil for its status report and its statement today.
  • The European Union would like to resolve this case as soon as possible and is following Brazil’s implementation efforts very closely. We recall that the reasonable period of time agreed by the parties expires on 31 December 2019. In addition, as agreed between the parties (WT/DS472/15), the time period for the withdrawal of the subsidies that were found to be prohibited expired on 21 June 2019. 
  • The European Union takes note of the steps taken by Brazil towards compliance in this dispute, as set out in the status report.
  • However, we have a number of questions that we would like to raise today.
  • First, with regard to prohibited subsidies, we take note of Brazil’s contention that certain programmes had expired before the adoption of the reports in this dispute, and that they have not been renewed. We also take note that for the findings on the so-called nested “Processos Produtivos Básicos” (PPBs), Brazil has revoked certain measures, i.e. Implementing Orders, and that some new measures have been enacted in substitution.
  • Could Brazil please confirm that all of Implementing Orders concerned have been revoked? Our own assessment appears to indicate that many of these measures remain in force and it would therefore be useful to receive a detailed list of the Implementing Orders that have been revoked. Assuming that some of the measures at issue remain in force, could Brazil please explain what it is doing to address this?
  • In addition, we have concerns about many of the substitute Implementing Orders that have been enacted. We would recall that such substitute measures must also be consistent with WTO rules, and we reserve our position in this respect. We would appreciate if Brazil could provide us with a detailed list of the substitute Implementing Orders so that we can ascertain that the matter is satisfactorily resolved.
  • With respect to the removal of the other discriminatory elements covered by the RPT, we understand that Brazil is preparing to enact legislation and we look forward to Brazil’s full compliance with respect to these measures before the expiry of the reasonable period of time. We expect Brazil to do its utmost to comply with the deadline of 31 December 2019, as Brazil has indicated in its status report.
  • We look forward to finding a good outcome with Brazil and we are available to discuss bilaterally.

 

AGENDA POINT 2: UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000: IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

 

                A. STATEMENT BY THE EUROPEAN UNION

 

  • The EU requests once again that the United States stops transferring antidumping and countervailing duties to the US industry. Even if the amounts have considerably decreased, the latest CDSOA report from December 2018 still shows that amounts are still being in practice disbursed.
  • Every disbursement that still takes place is clearly an act of non-compliance with DSB recommendations and rulings. As long as the US does not fully stop transferring collected duties, the item is rightly under the DSB's surveillance. We can assure you that, due to the long standing nature of this breach, the EU will continue to insist –as a matter of principle – independent of the cost resulting from the application of such limited duties.
  • The EU renews its call on the United States to abide by its clear obligation under Article 21.6 of the DSU to submit implementation reports in this dispute.
  • The EU will continue to put this point on the agenda as long as the US has not fully implemented the WTO ruling and the disbursements cease completely.

 

AGENDA POINT 3:  EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT: IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

 

  • As in the previous DSB meetings, the US has explicitly stated that the EU is taking inconsistent positions under Article 21.6 of the DSU, depending on whether the EU is a complaining party or a defending party in a dispute. The US assertion remains without merit.
  • As the EU has repeatedly explained in past meetings of the DSB, the crucial point for the defending party’s obligation to provide status reports to the DSB is the stage of the dispute. In the Airbus case, the dispute is at a stage where the defending party does not have an obligation to submit status reports to the DSB.
  • We would like to remind the DSB that in the Airbus case, the EU notified to the WTO a new set of measures in a compliance communication which was tabled at the DSB meeting of 28 May 2018. The US responded that the measures included in that communication do not bring the EU in full compliance with DSB recommendations and rulings.
  • In light of the US position, on 29 May 2018 the EU requested consultations with the United States, under Articles 4 and 21.5 of the DSU. These consultations failed to resolve the dispute. Consequently, the EU asked for the establishment of a compliance panel. The compliance panel was established by the DSB on 27 August 2018.
  • That compliance panel is currently reviewing “the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings” of the DSB.
  • So, there is a compliance proceeding still on-going in this dispute. Whether or not the matter is “resolved” in the sense of Article 21.6 is the very subject matter of this ongoing litigation. How can it be said that the defending party should submit “status reports” to the DSB in these circumstances?
  • The EU would be very concerned with a reading of Article 21.6 of the DSU that would require the defending party to notify the purported “status of its implementation efforts” through the submission of status reports to the DSB, while dispute settlement proceedings on that precise issue are ongoing.
  • The view of the EU is further supported by Article 2 of the DSU on the administration of the dispute settlement rules and procedures: where, further to the disagreement between the parties on compliance, a matter is with the adjudicators, it is temporarily taken out of the DSB’s surveillance.
  • Under Article 21.6 DSU, the issue of implementation shall remain on the DSB's agenda until the issue is resolved. In the Byrd Amendment case, the EU does not agree with the US assertion that it has implemented the DSB recommendations and rulings. This means that the issue remains unresolved for the purposes of Article 21.6 DSU. If the US does not agree that the issue remains unresolved, nothing prevents it from seeking a multilateral determination through a compliance procedure, asking for a confirmation of its assertion that the CDSOA measure has been repealed in line with the WTO findings, just like the EU is doing in the Airbus case.

 

AGENDA POINT 4: STATEMENT BY THE UNITED STATES ON SYSTEMIC CONCERNS  REGARDING THE COMPENSATION OF APPELLATE BODY MEMBERS

 

  • We thank the US for its intervention.
  • As a preliminary point, the EU would like to state the obvious: a “systemic” discussion on the remuneration of Appellate Body members can only be fruitful if there is indeed a functioning Appellate Body.  We therefore hope that the DSB will be able to finally agree to the proposal under item 6 to launch the selection procedures for the 6 vacancies on the Appellate Body. The EU is open to discussing the remuneration structure that would apply to such freshly composed Appellate Body, and we look forward to proposals from Members raising systemic concerns.
  • Regarding the current remuneration structure, we would like to recall that this structure and specific amounts have been decided by the WTO Membership itself. The basic principles relating to the “Conditions of employment of [Appellate Body] members”, including the remuneration structure, were approved by the Dispute Settlement Body and are contained in decision WT/DSB/1, circulated on 19 June 1995.
  • In 1995, the DSB considered, in particular, that “[t]he contractual basis of members of the Appellate Body should reflect the overriding concern that candidates are of a high enough calibre to ensure the integrity and authority of decisions taken by the Appellate Body”.
  • Given the part time nature of employment of Appellate Body members, the DSB decided that “[t]he requirement that high-calibre members be available at all times could be met, on a flexible basis, by offering Appellate Body members contracts based on a monthly retainer plus a fee for actual days worked.”  Accordingly, it was decided that “the retainer should be set at a minimum of [CHF] 7,000 per month, plus a fully-adequate daily fee, travel expenses and a per diem.  The actual amounts should be set on the basis of further research on current rates for equivalent services under similar conditions.” The daily fee was initially set at 600 CHF.
  • Since 1995, the level of remuneration has been updated by the WTO Membership several times. As from 2011, the retainer has been fixed at 9 085 CHF and the daily fee at 783 CHF. This means that between 1995 and now, these sums have been increased by approximately 30 %, while the basic structure, linked to the partial employment, has remained the same. It is also worth recalling that Appellate Body members are not entitled to health care and retirement benefits available to WTO staff.
  • In our view, the overriding concern that the employment conditions of Appellate Body members must be such as to ensure that those members are of a high enough calibre to ensure the integrity and authority of decisions taken by the Appellate Body is very much valid today. The remuneration should indeed be such as to attract the best candidates and it should be such as to ensure their independence and impartiality.
  • Within those parameters, one can imagine different remuneration structures and we are open to discussing proposals that the US may wish to formulate on this issue. We would like to point out that the current remuneration structure is the result of the fact that, de jure, the position of an AB member is a part time job and therefore their remuneration depends, in part, on their workload. This may lead to situations where Appellate Body members receive substantial amounts if their workload is particularly high.
  • One alternative, already foreshadowed in the DSB/1 decision in 1995 would be to move to a full-time employment for Appellate Body members. We understand that the US was also supportive in the past of a move towards a full employment of Appellate Body members, inter alia, in order to attract highly qualified candidates and to align their employment status with the de facto situation of full-time work.
  • The US has made some points relating to the remuneration being currently received by the remaining Appellate Body members, and also to the remuneration under Rule 15. While the US has branded these concerns as “systemic” it is clear that they have been triggered by the very specific situation in which the Appellate Body finds itself today, and for the past two years, with limited number of AB members remaining, due to the blockage of new appointments.
  • With more workload per member, it is not surprising that the amount per capita in daily fees is higher. We would indeed expect the remaining Appellate Body members to fully invest in the disposition of appeals. The fact that they work longer hours, even though their work is officially part-time, merits commendation, not criticism. Also, with regard to Rule 15, the Appellate Body has been in a very specific situation in the last 2 years, where, because of the case backlog created by the blockage of new appointments, outgoing Members had to continue working full time, possibly also foregoing other employment opportunities.
  • With regard to the issue of 90 days raised by the US, even if appeals take longer, counting from the notice of appeal to the circulation of the report, it is our understanding that Appellate Body members only receive the daily fees for days actually worked on a given appeal. Because of the case backlog resulting from the blockage of appointments, they cannot actually devote their time to an appeal from the moment when the notice of appeal is filed, and we understand that they do not receive the daily fees for this period, nor for the period when the report is being translated.
  • To conclude, we would like to reiterate that the EU is open to having a systemic discussion on the remuneration of Appellate Body members, and looks forward to proposals that Members may wish to formulate in that regard. Such a discussion can obviously only bear fruit if there is an operational Appellate Body.

AGENDA POINT 6: APPELLATE BODY APPOINTMENTS

  • The European Union refers to its statements on this issue in previous meetings, starting in February 2017.
  • As we have said so many times, WTO Members have a shared responsibility to resolve this issue as soon as possible, and to fill the outstanding vacancies as required by Article 17.2 of the DSU.
  • Mindful of this responsibility, the EU and others submitted concrete proposals to the General Council in order to address the concerns raised by the US and to unblock the Appellate Body appointments.
  • We thank all Members that engaged in the discussions on these and other proposals in the informal process. Those discussions have been fruitful. As we have said, we welcome the report and the draft General Council decision presented by Ambassador Walker to the General Council on 15 October 2019. We think that this is a sound and balanced way to move the process forward towards its objective, which is to unblock the appointments and we thank Ambassador Walker for his efforts.
  • This is the fourteenth time that this proposal features on the agenda of the DSB meeting, and despite our best efforts we are under no illusion that the selection processes will be launched today.
  • Today is also the last regular DSB meeting before 10 December 2019 when the terms of office of two of the three remaining Appellate Body members will expire.
  • At this juncture, the EU would like to convey a clear message of determination. We are determined to ensure that the dispute settlement process operates as intended in the WTO agreements, which includes an independent and impartial appeal review of legal issues contained in the panel reports.
  • To that end, and as a matter of priority, we will continue supporting all efforts leading to the unblocking of Appellate Body appointments, which must continue until the situation is resolved.
  • Pending such resolution, we are also determined to preserve our rights as enshrined in the WTO Agreements, notably the right to appeal review, and we will continue preparing contingency measures that would apply in case the appointments remain blocked.
  • We thank all Members that have co-sponsored the proposal to launch the appointment processes. We invite all other Members to endorse this proposal.

 

 

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