European Union Election Observation Mission
Ghana, 2016

EU Statements at the Regular Dispute Settlement Body meeting, 25 January 2021

Geneva, 26/01/2021 - 00:00, UNIQUE ID: 210126_12
Local Statements

Statements 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.186)

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.149)

During the on-line meetings of the Standing Committee on GM Food and Feed held on 15 September and 7 October 2020, the Commission presented for vote eight authorisations representing 38 possible GMOs. As the Standing Committee did not reach an opinion, the Commission presented those eight authorisations for vote to the Appeal Committee.

Although the Appeal Committee could not reach an opinion on the authorisation presented for vote, the eight authorisations for GM Food / Feed were adopted on 22 January 2021.

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 will present the two authorisation decisions at the next on-line meeting of the Appeal Committee.

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 27 October 2020, 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.

 

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

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 that 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 – as the US seems to imply – 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-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 us 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 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 proceed to, or continue, mutually assured retaliation, and certainly not in the current economic climate.

 

AGENDA POINT 4:  INDONESIA – MEASURES RELATING TO RAW MATERIALS

  1. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE EUROPEAN UNION

 

First intervention

Indonesia has had a policy in place for a number of years designed to boost its industrial capacities at the intermediate stages of stainless steel production. This policy includes a number of measures aimed at developing a rapid increase of Indonesian production for exports in the steel sector.

As a result of Indonesia’s measures, stainless steel capacity in Indonesia has grown from zero in 2015 to 6 million metric tonnes in 2020, while the capacity in the EU has been reduced from 9.5 million tonnes to 8.4 million tonnes in a very short time. In order to reach and support this exponential growth, Indonesia has a number of measures in place that heavily affect trade in stainless steel raw materials.

One of the measures maintained by Indonesia is an export prohibition on nickel ore. Varying degrees of restrictions on exports of nickel ore have been in place since 2014 at the latest and enforced in different manners and through different sets of rules throughout the years. As of January 2020, a full ban is in place on all exports of nickel ore, which in this way remains reserved for the Indonesian industry only.

In addition, Indonesia has domestic processing requirements in place for nickel ore and iron ore. These requirements oblige businesses to enhance the value added of the raw materials in Indonesia prior to exporting them, by subjecting them to mandatory processing and purification operations in Indonesia. These requirements unduly restrict exports of unprocessed raw materials.

These measures are in clear violation of Indonesia’s WTO obligations, specifically the prohibition of restricting exports of products, in this case raw materials for the production of stainless steel, to other WTO members.

The EU urges Indonesia to bring these measures in line with its WTO obligations. To this end, the EU requests the establishment of a panel to fully assess and rule on the legality of the measures.

The EU also stands ready to discuss with Indonesia 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, either through an arbitration agreement as set forth in Annex 1 of the Multi-party interim appeal arbitration arrangement (MPIA) or through such an agreement concluded on an ad hoc basis.

 

Second intervention

The EU also regrets the fact that the consultations have failed to settle the dispute.  As a result, the EU needs to proceed with the panel process.

The EU remains available to find a mutually agreed solution at any time, provided it includes the elimination of the violating measures.

 

AGENDA POINT 8: 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 many times before, the Members of the WTO 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 renews its call on all WTO Members to engage in a constructive discussion so that the vacancies can be filled as soon as possible.

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

 

AGENDA POINT: ANY OTHER BUSINESS

Korea – Sunset Review of Anti-Dumping Duties on Stainless Steel Bars (DS553)

This is yet another dispute that illustrates the grave consequences of the blockage of Appellate Body appointments since 2017. That blockage frustrates the essential rights of WTO Members that were agreed multilaterally in the DSU.

We refer to EU’s intervention under item 7 of the DSB meeting on 28 September 2020, where we elaborated on these consequences and on the possibility of appeals being adjudicated upon through appeal arbitration based on Article 25 of the DSU, consistently with the principles of the DSU. We will not repeat these points today.

 

 

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

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