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)
· At the on-line meeting of the Standing Committee on GM Food and Feed held on 15 September 2020, the Commission presented for vote three authorisations representing 27 possible GMOs. Due to Covid-19, the voting is carried out by written procedure and will be finalised by 1st October 2020.
· The next meeting of the Standing Committee on GM Food and Feed is planned on 7 October 2020. At this meeting, the Commission will present for vote 5 measures (2 new GMOs and 3 renewals representing a total of 11 GMOs). Voting will again be carried out by a written procedure ending 14 days later.
· 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”.
· 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 to address recurring US arguments:
⦁ 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
· 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 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 – 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.
• 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 the issue remains unresolved, nothing prevents it from seeking a multilateral determination through a compliance procedure.
• This understanding seems to be also shared by Indonesia in DS484, Measures Concerning the Importation of Chicken Meat and Chicken Products.
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 implied 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 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-step 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.
· These considerations do not, however, 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 EU willingness to find a negotiated solution is also shown by the EU notification of 21 August 2020, which was discussed at the 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.
· 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 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 referred to in our previous interventions on the matter, 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 7: STATEMENT BY CANADA REGARDING THE PANEL REPORT IN "UNITED STATES – COUNTERVAILING MEASURES ON SOFTWOOD LUMBER FROM CANADA"
· This is another dispute that illustrates the grave consequences of the blockage of Appellate Body appointments since 2017. That blockage frustrates the essential rights of Members that were agreed multilaterally in the DSU.
· Under the DSU, parties to a dispute have the right to appeal a panel report and to have their case heard by the Appellate Body.
· At the same time, under the DSU, the complainant is entitled to the resolution of the dispute through adjudication.
· The EU takes note of the appeal by the United States. As a result of this appeal, and pursuant to Article 16.4 of the DSU, the panel report cannot be adopted pending the completion of that appeal.
· The lack of at least three Appellate Body Members is not a legal bar to a Member exercising its right to an appeal. However, Members should be mindful that, in the current specific circumstances where the Appellate Body is not operational, the decision by a respondent to appeal a panel report may amount in effect to dispute resolution through adjudication being blocked, unless that respondent agrees to the appeal being adjudicated upon through appeal arbitration based on Article 25 of the DSU, consistently with the principles of the DSU.
· This is precisely why the EU and other Members have put in place the Multi-party interim appeal arbitration arrangement, to allow the above-mentioned rights to be preserved in a balanced manner, despite the blockage of the Appellate Body appointments. In particular, the MPIA preserves the right to an appeal review of the panel report and the right to have the dispute resolved through adjudication. The standard default appeal arbitration procedures, as attached to the MPIA, can also be used on ad hoc basis by Members who themselves do not participate in the MPIA.
· However, it would appear, as we have just heard in Canada’s statement, that the US was not ready to resort to appeal arbitration procedures, based on Article 25 of the DSU.
· As we have said so many times since 2017, the EU is very concerned about the implications of the blockage of Appellate Body appointments, and we now see these implications unfold in specific cases.
· In the absence of a functioning Appellate Body, we invite Members engaged in appeals to resort to procedures foreseen in the MPIA, that preserve the DSU rights for both parties in a balanced way. We also reiterate our willingness to find a lasting solution to the current impasse, as a matter of priority.
AGENDA POINT 8: 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 of 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. Such an appeal arbitration procedure 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.
· The European Union disagrees with the assumption that a request to suspend concessions pursuant to article 22.2 DSU could not be automatically granted through negative consensus in the DSB. The EU wishes to refer to its statement made at the DSU meeting of 29 July on this matter.
· The European Union disagrees with the assumption that a request to suspend concessions made 30 days after the expiry of the reasonable period of time cannot be adopted by negative consensus. We refer to our previously made statements on this matter.
AGENDA POINT 9: STATEMENT BY AUSTRALIA ON COVID-19 AND DISPUTE SETTLEMENT
· We thank Australia for its statement and for putting this important issue on the agenda of the DSB.
· As a general observation, the EU takes the view that the WTO dispute settlement system must continue its normal operations as much as possible, taking into account the need to ensure the safety of persons involved and the restrictions put in place by the relevant authorities to that end.
· Over the past few months governments, international organizations but also tribunals have managed to perform their functions, despite the health-related restrictions. This was mainly possible thanks to the available means of remote communication. This meant that people could meet and work together even when in-person meetings were not possible.
· The same means of communication allow for the maintenance of dispute settlement operations, in a manner consistent with the DSU.
· In particular, Covid-19 should not indefinitely paralyse the WTO dispute settlement system because it is considered that in-person hearings should not be held for public health reasons or due to related travel restrictions.
· This is why the EU welcomes the recent decisions of panels to conduct “virtual” hearings. In the current specific circumstances, this strikes the right balance between the requirements of prompt settlement of disputes and due process. The EU would invite other panels to adopt similar procedures in similar circumstances.
· Indeed, once the period within which hearings would normally be expected has clearly passed, and if there is little prospect of normal operation resuming within the immediately foreseeable future, virtual hearings must be organised instead. We would expect that this is done on an even-handed basis in all cases, for all Members.
· Indeed, while panels have a discretion when it comes to their working procedures, as indicated in Article 12.1 of the DSU, including organising virtual hearings, that discretion is not completely unfettered. In particular, panels must ensure compliance with all of the applicable principles relating to dispute settlement, including prompt settlement, and that consideration is valid for all disputes. The EU invites all parties involved to cooperate with panels so that they can discharge their functions as envisaged by the DSU despite the pandemic. We are encouraged by the recent panel decisions to conduct virtual hearings, and we expect similar procedures to be adopted in other cases, as long as in-person meetings are considered not possible.
AGENDA POINT 10: APPELLATE BODY APPOINTMENTS
• 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 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 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.
• We thank all Members that have co-sponsored the proposal to launch the appointment processes. We invite all other Members to endorse this proposal.