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

EU Statement at the Regular meeting of the Dispute Settlement Body (DSB), 28 April 2021

Geneva, 28/04/2021 - 00:00, UNIQUE ID: 210428_17
Local Statements

Statement delivered by Ioannis Zervas, Counsellor

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.189)

 

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.152)

 

The Standing Committee meeting was held on-line on 16 December 2020. The Commission presented two authorisations[1]. The Standing Committee did not reach an opinion. The Commission presented the two authorisation decisions at the on-line meeting of the Appeal Committee on 26 February 2021. The vote of the Appeal Committee was taken by the written procedure. The Appeal Committee reached no opinion on 8 March. It is now for the Commission to decide on the adoption of these Implementing Decisions.

In addition, a Standing Committee meeting was held on-line on 19 April 2021. The Commission presented one authorisation and one renewal authorisation. Due to the current public health situation, the vote will take place by written procedure ending ten working days after the date of the meeting concerned.

The United States frequently refers to Member States’ justifications issued during the meetings of the Standing Committee and Appeal Committee as being “political” and “not science based”. The EU would like to underline that the final decision taken on the authorisation is clearly science-based as those GMOs are authorised 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 consultations held on 22 October 2020, efforts to reduce delays in authorisation procedures are constantly maintained at a high level at all stages of the authorisation procedure.

It is also important to recognise the increased transparency in the EFSA’s scientific assessment of GMOs, resulting from the new Transparency Regulation10, which should help to reinforce trust in the safety of the authorised GMOs.

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.

 

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

  1. STATEMENT BY THE EUROPEAN UNION

 

First intervention

Despite the US having repeatedly indicated that the DSB’s recommendations and rulings are fully implemented by adopting the Deficit Reduction Act, disbursements under CDSOA have been made every year since then. Every disbursement that still takes place under this legal basis is clearly an act of non-compliance with DSB recommendations and rulings. For the item to be considered resolved and removed from under the DSB's surveillance, the US must fully stop transferring collected duties.

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. 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, as the issue remains unresolved. If the US does not agree the issue remains unresolved, nothing prevents it from seeking a multilateral determination through a compliance procedure.

 

Second Intervention

In relation to the comparison drawn by the USA between the present case and DS 472 (Brazil-Taxes):  The EU recalls that the CDSOA was found to be in breach of WTO rules for transferring anti-dumping and countervailing duties to US industry and that the DSB authorised sanctions on the basis of the US failure to comply with the recommendations and rulings. That situation persists as long as the redistribution of collected duties continues. The circumstances of this case with regard to relevant DSU provisions and procedures are therefore entirely different from those in DS472.

 

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 again 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 assertions are 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 a new set of compliance measures to the DSB. That new set of compliance measures were a clear demonstration that the EU – contrary to the US in the parallel Boeing-case – is serious about and committed to achieving compliance.

That new set of compliance measures were subject to an assessment by a compliance panel and that panel’s report was issued on 2 December 2019. As noted in our statement at the December meeting of the DSB, the EU is of the view that significant aspects of the compliance panel’s report cannot be regarded as legally correct and are very problematic from a systemic perspective when it comes to assessing compliance with the subsidy disciplines of the WTO agreements. It is in order to have these legal errors corrected, and not to continue litigation for the sake of litigation, that the EU has filed an appeal against the compliance panel’s report on 6 December 2019.

We are concerned that with the current blockage of the two-tier multilateral dispute settlement system, we are losing the possibility of a proper appellate review of the serious flaws contained in the panel report. While the blockage continues, we stand ready to discuss with the US alternative ways to deal with this appeal. We are also committed to finding a balanced negotiated solution with the US that would allow leaving both aircrafts disputes behind us.

However, these considerations do not alter the fact that the compliance proceeding in this dispute has not been concluded.

Whether or not the matter is “resolved” in the sense of Article 21.6 remains 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 EU notes that its reading of the provision is supported by other WTO Members.

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.

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.

The EU willingness to find a negotiated solution is shown by the EU notification of 21 August 2020, which was discussed at a previous DSB meeting, 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. 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.

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.

In this respect, the EU welcomes the fact that both parties have now reached an understanding to suspend their respective retaliation for four months in order to permit further discussions to continue.

 

AGENDA POINT 6:  EUROPEAN UNION AND CERTAIN MEMBER STATES – CERTAIN MEASURES ON PALM OIL AND OIL PALM CROP-BASED BIOFUELS

  1. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY MALAYSIA

 

The European Union takes note of Malaysia's decision to request a WTO panel on certain measures concerning palm oil and oil palm crop-based biofuels imposed by the European Union and certain Member States.

The European Union recalls that it held constructive consultations with Malaysia on 17 March 2021. We had expressed hope that the consultations had provided the necessary information and clarifications.

Malaysia is of course entitled to bring this matter to dispute settlement in the WTO, but the European Union firmly believes that the measures at stake are fully justified.

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

In today’s meeting, the European Union is not ready to accept the establishment of a panel.

The EU also stands ready to discuss with Malaysia reciprocal interim arrangements that would preserve the availability of appeal review in this and other disputes on the basis of Article 25 of the DSU, as long as the Appellate Body is not functioning, such as through the multi-party interim appeal arbitration arrangement (MPIA).

 

AGENDA POINT 7: APPELLATE BODY APPOINTMENTS

THE EUROPEAN UNION REFERS TO ITS PREVIOUS STATEMENTS ON THIS ISSUE.

 

Since 11 December 2019, the WTO no longer guarantees access to a binding, two-tier, independent and impartial resolution of trade disputes.

A fully functioning WTO dispute settlement system is critical for a rules-based multilateral trading system.

This is why the most urgent area of WTO reform involves finding an agreed basis to restore such a system and proceeding to the appointment of the members of the Appellate Body. This task should be addressed as a priority.

As we have consistently noted, 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.

The EU agrees that a meaningful reform is needed in order to achieve this objective. We have elaborated on this in the recent Trade Policy Review communication by the European Commission.

The EU therefore renews its call on all WTO Members to engage in a constructive discussion as soon as possible in order to restore a fully functioning WTO dispute settlement system.

We thank all Members that have co-sponsored the proposal to launch the appointment processes.

 

AGENDA POINT 8: ELECTION OF CHAIRPERSON

 

The EU would like to thank the outgoing Chair for his work.

We also wish to warmly welcome the new Chair. We wish you well in this important and challenging role. In these difficult times, it is all the more important that the DSB continues to properly exercise its functions as envisaged by the DSU. We trust in your commitment to ensuring that, and you can count on full support of the European Union in that regard.

 

 

 

[1] Meeting of 16 December 2020: Maize MZIR086 and Cotton GHB614 × T304-40 × GHB119

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