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

EU Statement at the Regular Dispute Settlement Body (DSB) meeting, 28 August 2020

Geneva, 28/08/2020 - 00:00, UNIQUE ID: 200828_6
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.182)

⦁    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.145)

First intervention
⦁    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.

⦁    The EU has a solid record on the authorisation of GMO requests: last year, eighteen decisions were adopted to authorise 65 new GMOs for feed and food, 6 GMOs were renewed and one GM cut flower was authorised.

⦁    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.

⦁    The United States frequently refers to what is known as the EU “opt-out Directive”. We would like to reiterate that the DSB recommendations and rulings do not cover the “opt-out Directive”.

⦁    In the last DSB meeting, the United States claimed that 13 applications are awaiting risk management decisions. This figure needs to be put into perspective. For 3 applications for which EFSA has recently published the opinions, these were not fully conclusive, and at the moment no full scope authorisations can be granted. Finally, nine applications with an EFSA positive opinion are in internal procedures and will be presented for vote as soon as these procedures are finalised. The next Standing Committee on genetically modified food and feed will take place on 15 September 2020.

⦁    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.

⦁    We would invite the US to provide any evidence they may have at their disposal substantiating the disruption of the free movement of MON810 seeds in the EU.


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

First intervention
⦁    On 1 May 2020 the EU adjusted the level of suspension to the nullification or impairment caused by the CDSOA to the European Union. The adjustment maintains unchanged the list of products subject to retaliation while increasing the rate of additional duty to which those products are subjected to 0,012% in order to adjust to the level of retaliation. The letter informing of the adjustment, together with the Commission Delegated Regulation (EU) 2020/578 of 21 February 2020 was notified to the DSB on 26 June 2020.

⦁    The EU requests once again the United States to stop 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 the 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 – independently 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.

Second intervention
⦁    The European Union maintains its statement that 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 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.

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

First intervention
⦁    The EU reiterates its position with respect to Article 21.6 as expressed in detail in previous DSB meetings.

⦁    We will focus today on the notification by the EU on 21 August 2020 of additional and extraordinary compliance measures that withdraw all remaining subsidies and constitute appropriate steps to remove adverse effects, substantially in excess of what is required by Article 7.8 of the SCM Agreement.

⦁    The EU took this extraordinary step in the context created by the second compliance panel and the arbitration panel, along with the United States’ obstruction of appointments of new Appellate Body members, where the EU is trapped by the prospect of an essentially indefinite authorisation of countermeasures, unilaterally maintained by the US, coupled with a denial of any legal recourse to demonstrate compliance.

⦁    The EU has decided to secure these additional and extraordinary measures with respect to the remaining two subsidies given the extremely unfavourable economic conditions created by the COVID-19 crisis, and with a view to achieving a situation in which there are no countermeasures on either side, so that both LCA producers and other affected or potentially affected economic operators are properly able to contribute to a global recovery.

⦁    These additional and extraordinary measures go far beyond what is required in order to discharge the European Union’s compliance obligations required by Article 7.8 of the SCM Agreement. These additional and extraordinary measures consist of:

a.    the amendment of the French A350XWB MSF loan agreement so as to align the terms of the financial instrument on a market benchmark prevailing at the time of the original measure, with prospective effect from the date of the amendment; and,

b.    the binding agreement to amend the Spanish A350XWB MSF loan agreement so as to align the terms of the financial instrument on a market benchmark prevailing at the time of the original measure, with prospective effect from the date of the amendment.

⦁    The full details of the measures have been shared with the United States in line with the applicable HSBI rules.

⦁    The European Union has procured these additional, extraordinary and costly compliance measures in an effort to persuade rational and reasonable stakeholders in the United States, including consumers, employers, workers, government officials and entities, airlines and other economic operators that now is the time to draw a line under these disputes. It is not in the interests of anyone that the European Union and the United States now proceed to, or continue, mutually assured retaliation, and certainly not in the current economic climate.

⦁    Instead of progressively stepping-up retaliatory measures, we should step them down. With that in mind, the European Union reaffirms its determination to obtaining a long-term resolution to the WTO aircrafts disputes. A balanced negotiated settlement is the only way to avoid mutually imposed countermeasures.

Second intervention
⦁    The EU does not agree with the US unilateral assertion that it has fully implemented the DSB recommendations and rulings in the Boeing dispute.

⦁    While the EU is still examining the impact of the legislative action concerning the Washington State B&O tax, the EU notes that the rulings in this dispute cover a number of additional measures where the US remains non-compliant (including NASA and Department of Defense Research and Development measures and certain State and local measures).

⦁    As already mentioned, following the Appellate Body report on compliance in the Airbus case, the EU notified a set of compliance measures to the WTO that brought us in compliance with the ruling. The US disagreed. On the basis of its disagreement the US continues to apply countermeasures against products from the EU. At the same time, the US is blocking the two-step multilateral dispute settlement system, thus depriving the EU from seeking a multilateral determination of compliance regarding its measures.


AGENDA POINT 4: EUROPEAN UNION – SAFEGUARD MEASURES ON CERTAIN STEEL PRODUCTS

A. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY TURKEY (WT/DS595/3)

⦁    The European Union regrets that Turkey decided to request the establishment of a panel on EU safeguard measures on steel.

⦁    The EU respects the right of Turkey to bring this matter to WTO dispute settlement but firmly believes that its measures are fully justified.

⦁    For these reasons, the European Union hopes that it will prevail in this dispute, and that its actions will be declared in line with WTO law.

⦁    The EU also stands ready to discuss with Turkey reciprocal interim arrangements that would preserve the availability of appellate review in this and other disputes on the basis of Article 25 of the DSU, through an arbitration agreement as set forth in the standard agreed default procedures in Annex 1 of the Multi-party interim appeal arbitration arrangement (MPIA). The MPIA foresees that participating Members will notify any such agreement to the panel within 60 days of establishment. In this respect, the EU will be happy to be in contact with Turkey after this DSB meeting.


AGENDA POINT 7: THAILAND – CUSTOMS AND FISCAL MEASURES ON CIGARETTES FROM THE PHILIPPINES

A. STATEMENT BY THE CHAIRMAN ON CONSULTATIONS WITH THAILAND AND THE PHILIPPINES WITH REGARD TO THE RECOURSE TO ARTICLE 22.2 OF THE DSU (WT/DS371/32)

B. STATEMENT BY THE PHILIPPINES

C. STATEMENT BY THAILAND

⦁    In these extraordinary circumstances of the paralysis of the Appellate Body, the EU calls on the parties concerned to seek an agreed solution that would preserve the rights for both parties in a balanced manner. The EU would like to point out that the parties could decide to submit the suspended appeal for completion under an appeal arbitration procedure pursuant to Article 25 of the DSU, such as the MPIA. An appeal arbitration procedure like the MPIA could for all practical purposes, replicate all substantive and procedural aspects of Appellate Review.

⦁    The EU trusts that the DSB Chair can assist the parties in reaching such a solution.

⦁    In response to certain views expressed in other interventions today, the European Union would like to register on the record its disagreement with the assumption that a sequencing agreement concluded between two dispute settlement parties precludes the complaining party from requesting the suspension of concessions. The EU wishes to refer to its previous statements on this matter.


AGENDA POINT 9: APPELLATE BODY APPOINTMENTS

First intervention
⦁    The European Union refers to its statements on this issue in previous meetings, starting in February 2017 and to its statement in the General Council meetings, including last time on 9 December 2019.

⦁    Since 11 December 2019, the WTO no longer guarantees access to a binding, two-tier, independent and impartial resolution of trade disputes. This is in clear breach of the WTO Agreements.

⦁    As we have said 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.

⦁    We thank all Members that have co-sponsored the proposal to launch the appointment processes. We invite all other Members to endorse this proposal.

Second intervention
⦁    The United States has asserted that the Appellate Body has not followed the rules of the DSU. The EU would like to reiterate that we should be having a forward-looking discussion and not continuously re-litigate our differences as to the reading of the current rules. The draft decision presented by Ambassador Walker could have been the right basis for unblocking the appointments. It was however not accepted by the US, which has not made any proposals or counterproposals. The EU stands ready to continue a forward-looking discussion.

⦁    On substance, we refer to our earlier interventions on the respective issues. Our views are well known, but we would be happy to explain our position again as appropriate.

⦁    The United States has also made some negative comments in relation to the MPIA. It is not clear on what basis the United States could make such negative comments, in particular at a time where not a single arbitration award has yet been issued under the MPIA.

⦁    The MPIA is a stopgap interim arrangement, not a means to reform the dispute settlement process. Pending a multilaterally agreed reform of the dispute settlement system, the participants in the MPIA devised an interim arrangement based on the core features of Appellate Review pursuant to Article 17 of the DSU. These features have been agreed multilaterally by all WTO Members. In addition, the MPIA also contains a number of elements designed to enhance the procedural efficiency of appeal proceedings, in the specific context of appeal arbitration under Article 25 of the DSU.


ANY OTHER BUSINESS

STATEMENT by INDIA on PANEL COMPOSITION in DS582 and DS588

⦁    India's statement raises very interesting legal and substantive issues. However, the Rules of Procedure for DSB meetings provide in Rule 25 that "discussions on substantive issues under 'Other Business' shall be avoided". The same Rule provides that delegates "should avoid unduly long debates under 'Other Business'". Consequently, India should not have raised these issues as "Other Business" today. For the same reasons, we will not enter into a long debate with India.

⦁    We will only mention that in this case the EU was entitled to request the Director General to compose the panel in accordance with Article 8.7 DSU. Both conditions in Art. 8.7 DSU are met: more than 20 days have passed from the establishment of the panel and there is no agreement on the panellists. The exercise of that right is not conditional upon the Secretariat's proposing first a slate of names pursuant to Article 8.6 DSU. In accordance with Article 8.7 DSU, the WTO Director General must determine the composition of the panel within 10 days from that request and this is what the WTO Director General will do in this case.

 

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