Food Law News - FAO/WHO/WTO/Codex - 2005

WTO News Item, 25 January 2005

Meeting of Dispute Settlement Body - US and Canada block first EC panel requests in new ‘hormones' dispute

Four first-time requests for a dispute panel to be set up were blocked on 25 January 2005 , including the European Communities' requests to consider the United States ' and Canada 's continued sanctions against the EC's import ban on hormone-treated beef.

While respondents may block a first panel request, a panel is automatically established at the second request.

Request for panel

These are cases that have completed the consultation phase, the first stage of a dispute. When consultations have failed, member governments are entitled to ask for a panel to be set up to examine the dispute. According to the rules, the respondent can reject the first request. At the second request, a panel is automatically established.

DS320: United States — Continued suspension of obligations in the EC — Hormones dispute

The EC explained that the dispute was about the retaliatory tariffs that the US continued to impose on imports from the EC. It was also about the US 's unilateral determination that the EC had not complied with the WTO dispute ruling, and the fact that the US had not asked for a panel to examine the EC's compliance, the EC added.

The EC recalled that in October 2003, it had informed the DSB that it was complying with the ruling in the “EC — Hormones” dispute. By adopting a new Hormones Directive which was preceded by a thorough and independent scientific risk assessment, it had removed the measure found to be inconsistent with the WTO Agreement, the EC said.

The EC pointed out that by continuing to impose sanctions after the EC had corrected its measure so as to comply with the ruling, the US was violating the Dispute Settlement Understanding (DSU). In addition, by charging tariffs that were higher than the US ' bound rates, without continued authorization from the DSB, the US was also violating the General Agreement on Tariffs and Trade (GATT) Articles I (Most-Favoured-Nation Treatment) and II (Schedule of Concessions), the EC said.

The EC asked for a panel to be set up.

The US said that it was still reviewing the studies and documents the EC had cited. But so far the US failed to see how the revised EC measure could be considered to implement the DSB's rulings.

The US also challenged the EC's interpretation of the dispute settlement rules that by unilaterally declaring it was complying, the EC had somehow invalidated the DSB's authorization for the US to impose sanctions in this dispute. The US said that its actions under the DSB's authorization were entirely consistent with its WTO obligations.

The US blocked the establishment of a panel at this meeting.

DS321: Canada — Continued suspension of obligations in the EC — Hormones dispute

The EC said that, like the US , Canada had refused to ask for a compliance panel to review the EC's implementation of the DSB's rulings and had also refused to accept the EC's offer of a mutually agreed procedure in the WTO to resolve the disagreement. The EC observed that Canada continued to maintain sanctions against imports from the EC.

The EC asked for a panel to be established.

Canada said that it had acted under authorization from the DSB, justified by the EC's failure to comply within a reasonable period of time.

Canada said that, although the EC now asserted that it was complying, it had neither sought nor received a multilateral determination (i.e. a WTO ruling) that this was the case.

Canada added that it was happy to discuss the case further with the EC. However, the EC could not unilaterally claim that it had complied with the DSB's rulings and nor could it say that Canada 's authorization to apply sanctions granted to it by the DSB was therefore invalid, Canada said.

Canada opposed the EC's request for a panel.

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