No. 208 | October 28, 1999 | Page A-4 | ISSN 1523-567X | Regulation, Law & Economics | International Trade | By Daniel Pruzin
GENEVA - The United States Oct. 27 blocked an attempt by Australia and New Zealand to establish a World Trade Organization dispute panel to rule on U.S. tariff rate quotas applied to lamb imports from the two countries.
Washington also blocked a separate request from South Korea for a dispute panel to examine the WTO legality of U.S. antidumping duties imposed on imported Korean steel.
Both requests were made at a meeting of the WTO's Dispute Settlement Body. Although the United States has the right to block the establishment of panels on first request, the three countries are expected to renew their demands at a DSB meeting next month at which time they will automatically be accepted.
U.S. ambassador to the WTO Rita Hayes defended the July 7 decision by President Clinton to impose tariff-rate quotas and higher duties on lamb for a three-year period because of a surge in imports from the two countries. The United States "made every effort, with full participation of Australia and New Zealand, to ensure that the U.S. measure is designed and applied to address the needs of our domestic industry while simultaneously ensuring our trading partner continued access to the U.S. market," she declared.
Hayes also rejected claims from Australia and New Zealand that the WTO's Agreement on Safeguards prevents members from imposing such measures when their domestic industries are "merely" threatened with serious injury from a surge in imports. "Such an interpretation is contrary to the explicit terms of Article 5.1 of the Safeguards Agreement, which permits action 'only to the extent necessary to prevent or remedy serious injury,'" the U.S. envoy argued. "The notion that 'mere' threat cases somehow do not merit vigorous action is simply wrong."
Australian and New Zealand officials said they were pursuing their request because of a failure of the parties to resolve their differences in consultations held last August 26.
Korean Steel Complaints
At issue in the steel complaint is a U.S. Commerce Department decision to impose preliminary duties on South Korean stainless steel plate in coils and stainless steel sheet and strip, measures which were converted into definitive duties in January and June of this year respectively.
On the steel case, South Korea accused the United States of carrying out an investigation which contravened WTO antidumping rules. Among other things, South Korea said the U.S. Department of Commerce treated unpaid sales of steel to a bankrupt customer as "bad debt," but then deducted the debt from the calculation of the U.S. export price in violation of Article 2.4 of the WTO's Antidumping Agreement; treated certain sales of steel on the Korean domestic market which were priced in U.S. dollars as being sales in Korean won but then converted the won prices back in dollars at a different exchange rate, also in violation of Article 2.4; and failed to set forth in sufficient detail the findings and conclusions that were material to its determinations in violation of Articles 12.2.
In blocking the South Korean panel request, Hayes insisted that the measures taken against the Korean steel imports were in compliance with relevant WTO rules.
In other activity:
The DSB formally adopted a WTO Appellate Body ruling that upheld complaints from the United States and New Zealand regarding a Canadian dairy export support program. In its Oct. 13 ruling the Appellate Body affirmed that Canada's practice of fixing lower purchasing prices for milk used in processed dairy products for exports constituted an export subsidy subject to WTO reduction commitments. U.S. ambassador Hayes described the ruling as a "milestone" that confirmed that member governments cannot interpret WTO agricultural export subsidy rules in a way that would allow them to circumvent subsidy disciplines and cannot avoid subsidy reduction commitments by delegating their powers to quasi-governmental entities.
The DSB agreed to establish a dispute panel to rule on India's complaint regarding European Union antidumping duties on imported Indian bed linen. The EU imposed provisional duties on the bed linen imports in June 1997 and converted them into definitive duties in November of the same year.
Thailand blocked a first panel request from Poland for a panel to rule on Thai antidumping duties imposed on Polish iron and non-alloy steel products. Thailand noted that Poland first asked for WTO consultations with Bangkok on the issue almost a year and a half ago and that changes have been made to the measure since then which require further consultations.
Thailand dropped its request for a panel to rule on Colombian restraints applied to imported Thai polyester filaments after being notified that the restraints were permanently withdrawn by Colombia on Oct. 25.No. 208:
