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.210)

• 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.173)

• We recall that the EU approval system is not covered by the DSB’s recommendations and rulings.

• The EU continues to propose for vote authorisations for genetically modified organisms that, in the European Food Safety Authority’s risk assessment, have been concluded to be safe.

• On 24 January 2023, the European Commission presented to the Appeal Committee a draft decision authorising genetically modified oilseed rape MON 94100.

• The vote resulted in a ‘no opinion’. It is now for the Commission to decide on the adoption of this implementing decision.

AGENDA POINT 1: SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

G.     UNITED STATES – ANTI-DUMPING AND COUNTERVAILING DUTIES ON RIPE OLIVES FROM SPAIN: STATUS REPORT BY THE UNITED STATES (WT/DS577/13)

• The panel report adopted by the DSB on 20 December 2021 substantially upheld the EU’s claims and largely confirmed that in imposing anti-subsidy duties on ripe olives from Spain, the U.S. acted inconsistently with the WTO Agreement on Subsidies and Countervailing Measures (ASCM).

• The panel report found that the U.S. did not comply with its obligation in the determination of de jure specificity, in the determination of pass-through benefit or in the calculation of the subsidy benefit for one specific EU company.

• The panel report also found that Section 771B of the Tariff Act of 1930, which presumes that the entire benefit of a subsidy provided in respect of a raw agricultural product passes through to the downstream processed agricultural product, is ‘as such’ inconsistent with the ASCM.

• The EU expected the United States to fully implement the recommendations of the DSB.

• However, in light of the final determination adopted by United States on 20 December 2022, the EU disagrees with any U.S. suggestion that it has fully implemented the recommendations and rulings of the DSB in this dispute. For example, regarding the pass-through of the benefit, the U.S. does not appear to have implemented the ‘as such’ finding of the panel.

• The EU is therefore now considering the next steps to make sure that its rights under the WTO rules are respected.

AGENDA POINT 1: SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

H.     EUROPEAN UNION – SAFEGUARD MEASURES ON CERTAIN STEEL PRODUCTS: STATUS REPORT BY THE EUROPEAN UNION (WT/DS595/14)

• 11 days ago, the EU submitted a status report under Article 21.6 of the DSU in order to report on progress in the implementation of the recommendations and rulings in this dispute.

• On 31 May 2022, the DSB had adopted its recommendations and rulings, by adopting the panel report in this dispute. At the DSB meeting of 30 June 2022, the European Union informed the DSB that it intended to implement the recommendations and rulings of the DSB in a manner that respects its WTO obligations, but that it needed a reasonable period of time in which to do so.

• On 5 August 2022, Türkiye and the European Union informed the DSB that they had agreed that the reasonable period of time for the European Union to comply with the DSB's recommendations and rulings would be 7 months and 16 days and would expire on 16 January 2023.

• On 13 January 2023, with entry into force on 14 January 2023, the European Union adopted the measure necessary to remedy the three violations identified by the panel before the expiry of the reasonable period of time agreed with Türkiye. That measure is Commission Implementing Regulation (EU) 2023/104, amending the original Commission Implementing Regulation (EU) 2019/159 imposing a definitive safeguard measure on imports of certain steel products.

• The adoption and entry into force of this new regulation achieves the European Union’s full implementation of the DSB recommendations and rulings in this dispute. The panel had established three points of inconsistency of the European Union’s safeguard measure on steel with the WTO Agreement.  These related to the unforeseen developments and how they had resulted in increased imports, second, to the GATT obligation that had resulted in the increase and third to the explanations and evidence relied upon regarding the existence of a threat of serious injury. The EU’s implementing regulation provides the additional explanations and reasoning to remedy the deficiencies which the Panel had identified. 

• The status report filed 11 day ago satisfies the requirements of Article 21.6 of the DSU. In this case, full implementation has been achieved before the six months period referred to in Article 21.6 of the DSU expired. The EU considered it appropriate to report this immediately to the DSB and that the DSB should place this item on the agenda of this meeting. 

• Since implementation of the recommendations and rulings in this dispute is now complete, no further reporting on the progress in implementation will be needed. 

Second intervention

• The European Union considers that it has fully implemented the panel ruling. The panel had established three inconsistencies of the EU safeguard measure with requirements of the WTO Agreement. These inconsistencies were of a nature that could be corrected by complementing the original determination through additional explanations based on the existing facts. There was no finding of the panel suggesting that the underlying facts did not allow the imposition of a safeguard measure. It was therefore neither necessary nor appropriate to rescind the safeguard.

• In line with general principles of international law, the WTO Agreement has been confirmed multiple times to leave it to Members to choose the way in which to achieve compliance if there is more than one option to do so. While the EU understands that Türkiye would have preferred a different choice, this was a decision for the European Union to make. 

Third intervention

• The European Union does not see anywhere in the panel report a basis for arguing that the only way to achieve implementation is the withdrawal of the measure.

AGENDA POINT 2: COLOMBIA – ANTI-DUMPING DUTIES ON FROZEN FRIES FROM BELGIUM, GERMANY AND THE NETHERLANDS (DS591)

1. COLOMBIA’S INTENTIONS REGARDING THE IMPLEMENTATION OF THE RECOMMENDATIONS AND RULINGS OF THE ARBITRATORS

• The EU thanks the panellists, the MPIA appeal arbitrators and the Secretariat for their work on this case. We acknowledge the time and effort dedicated to this dispute both at panel and appeal stage.

• We welcome the results of the appellate review, which broadly upheld the Panel’s ruling. This confirms in substance that the anti-dumping duties imposed by Colombia on frozen fries from Belgium, Germany and the Netherlands are incompatible with WTO rules and improperly restrict access to the Colombian market.

• This appeal arbitration, which was the first to be dealt with pursuant to the MPIA, demonstrates that, despite the current Appellate Body situation that is the subject of a long-standing point later on today’s agenda, there is a functional and efficient interim arrangement that – among its participants – safeguards the possibility of exercising effectively the right to binding, two-tier, independent and impartial adjudication in accordance with WTO rules.

• In addition, these proceedings have confirmed that appeal proceedings in the WTO can be conducted swiftly and efficiently, while fully preserving the procedural rights of the parties. In that regard, the EU points at the provisions of the MPIA that are designed to enhance the procedural efficiency of appeal proceedings.

• The MPIA is open to WTO Members to join for as long as the Appellate Body remains unable to function fully. And the European Union encourages those Member that have not yet done so to join the MPIA, which has proved its worth in a very visible way in the present dispute.

• We commend the appeal arbitrators on their work and their findings.

• We expect that Colombia will take the necessary steps to promptly and fully implement the Arbitrators’s findings. We stand ready to discuss and agree on a reasonable period of time for implementation.

AGENDA POINT 3: CHINA – MEASURES CONCERNING TRADE IN GOODS AND SERVICES

2. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE EUROPEAN UNION (WT/DS610/8)

• The EU reiterates its request for establishment of a panel in dispute DS610 with China. It is regrettable that, despite the EU’s efforts to resolve this issue bilaterally, China has not removed its discriminatory and coercive measures.

• Since at least December 2021, China has applied discriminatory and coercive measures against exports from or to Lithuania and against exports of EU products containing Lithuanian content. These have included rejections of Lithuanian imports by Chinese customs authorities, import restrictions affecting multinational companies that use inputs from Lithuania and a cut in Chinese exports to Lithuania.

• China also suddenly formalised complete import bans on alcohol, beef, dairy, logs, and peat shipped from Lithuania as part of the same group of measures, using phytosanitary arguments for doing so. When asked for further explanations, China failed to prove that these bans were justified. Chinese customs statistics show that trade from Lithuania to China dropped 80% from January to October 2022 as compared with the previous year.

• China’s measures restricting trade from Lithuania not only impact on Lithuania but also affect intra-EU trade and intra-EU supply chains and they impact the functioning of the EU internal market. This is something that goes to the heart of the EU.

• The consultations that took place on 14 and 15 March 2022 did not bring about a satisfactory solution.

• The EU is entitled to protect its Member States against China's discriminatory measures, which the EU considers to be in breach of WTO rules. To this end, the EU requests the establishment of a panel to assess the measures.

AGENDA POINT 4: CHINA – ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS

1. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE EUROPEAN UNION (WT/DS611/5)

• The EU reiterates its request for establishment of a panel in dispute DS611 with China on measures that unduly restrict the possibility to enforce intellectual property rights. It is regrettable that, despite the EU’s efforts to resolve this issue bilaterally, China has not removed these measures.

• These measures are inconsistent with China’s obligations under the TRIPS Agreement. They effectively deprive patent holders of the possibility of exercising and enforcing their patent rights as required by TRIPS.

• The situation is the following: other WTO Members have granted patents in line with the TRIPS Agreement, for example on 3G, 4G and 5G mobile communication technologies. Chinese courts have prohibited the owners of those patents from going to the courts of those WTO Members that granted the patents to enforce their rights in line with the TRIPS Agreement.

• The EU has raised the issue of China’s measures a number of times bilaterally, as well as in the WTO TRIPS Council and during China’s Trade Policy Review. Unfortunately without solving the problem.

• The EU requested consultations with China on this matter on 18 February 2022. Consultations took place on 6, 7 and 12 April 2022. The consultations were useful in clarifying a certain number of points, but failed to solve the problem.

• The EU urges China to bring its measures at stake into line with its WTO obligations. To this end, the EU requests the establishment of a panel to assess the measures.

AGENDA POINT 6: STATEMENT BY CHINA REGARDING THE PANEL REPORT IN THE DISPUTE: "UNITED STATES - CERTAIN MEASURES ON STEEL AND ALUMINIUM PRODUCTS" (DS544)

• The EU takes note that the panel reports have been appealed but that these appeals cannot be currently heard by the Appellate Body, given that it cannot function. Appeal is a right under the DSU, but its exercise amounts to effectively blocking this dispute in the current circumstances. This is why we encourage all parties to find a solution that preserves the rights of both the complainant and the respondent under the DSU, such as the MPIA.

• In those circumstances, the EU wishes to make two comments on substance, reserving otherwise its position as third party for any appeal proceedings.

• First, we would comment on the rejection of the invocation of Article XXI of the GATT.  Contrary to what has been suggested in some public statements, the panels did not pronounce on U.S. security interests.  They simply stated, once more and like two panels did earlier, that the security exceptions are not entirely “self-judging”. And they stated that there was no war or emergency in international relations between the parties.  This is also what the EU has argued.

• The EU refers to its statement in the DSB meeting of 26 April 2019, in connection with the panel report in DS512: Russia — Traffic in Transit. The EU fully recognises the special nature of security interests covered by the security exceptions, and the need for a margin of discretion for the Member invoking these exceptions. However, such discretion cannot be unfettered, since that could give rise to abuse. In that sense, when one considers the circumstances surrounding the measures at issue in the present dispute, the finding that they were not justified by a security exception should not come as a surprise.

• Secondly, the EU strongly disagrees with the panel’s finding that the U.S. “section 232 measures” are not safeguard measures. On that point, we refer to our position in disputes DS548 and DS559 that are currently suspended. We note in particular that the panel entirely omits an important point: that rights for other Members to rebalancing under Article 8 of the Agreement on Safeguards flow from the characterisation of a measure as safeguard. Hence, this characterisation must be an objective exercise, based on the nature of the measure; it cannot depend on the Member’s unilateral declaration.

AGENDA POINT 10: STATEMENT BY TÜRKIYE REGARDING THE PANEL REPORT IN THE DISPUTE: “UNITED STATES – CERTAIN MEASURES ON STEEL AND ALUMINIUM PRODUCTS (DS564)

• The EU refers to the statement it made earlier in this meeting concerning dispute DS544.

AGENDA POINT12: STATEMENT BY HONG KONG CHINA REGARDING THE PANEL REPORT IN THE DISPUTE: "UNITED STATES - ORIGIN MARKING REQUIREMENT" (DS597)

• As a third party in this dispute, the EU would like to offer the following observations.

• The EU wishes to commend the panel for the precision and convincing analysis with which it distinguished between marks of origin and rules of origin.

• And the EU welcomes yet another confirmation from a WTO panel that the invocation of the security exceptions is not entirely self-judging.

• In this respect, the EU again refers to its statement in the DSB meeting of 26 April 2019 concerning the panel report in DS512 Russia – Traffic in Transit.

• In the EU’s view, Article XXI of the GATT, as correctly interpreted by the panel in that Russia – Transit dispute, strikes the balance between the legitimate latitude for WTO Members to invoke the security exceptions for genuine security measures and the need to curtail potential abuse.

• Regarding the present specific dispute, the panel appears to have given a different interpretation to the concept of “emergency in international relations” to that given to it by the two first panels dealing with this question. This panel required a “breakdown or near-breakdown in the relations” whereas the two earlier panels spoke of “a situation of … latent armed conflict, or of heightened tension or crisis, or of general instability engulfing or surrounding a state”.

• In addition, the panel in the present proceedings seemed to take into account the nature of the restrictive measures themselves as a basis for the assessment whether an “emergency in international relations” exists. That reasoning appears circular.

• The EU recalls that, as a third party in this dispute, it agreed with the interpretation given to the notion of “emergency in international relations” in DS512 (see para 7.276 of the panel report) and, on that basis, argued that there were “significant elements to indicate that the situation to which the United States sought to respond by its measures is one of an emergency in international relations within the meaning of Article XXI(b)(iii) of the GATT 1994” (para 7.321 of the panel report).

• The EU continues to study the report of this panel and its implications, and reserves its rights for the purposes of any appeal proceedings.

• The circumstances of this case demonstrate, once again, the need for a standing Appellate Body to verify and, where needed, correct legal interpretations by panels. While every case is different on its facts, there is only one Article XXI in the GATT and it is the same for all WTO Members. The fact that not every Member can rely in practice on its right to appellate review undermines the right to seek the panel’s interpretation corrected on appeal, the equality of WTO Members under the WTO Agreement, as well as the security and predictability of the multilateral trading system.

• In the absence of an operational Appellate Body, the EU invites all Members to avail of alternative mechanisms that preserve the rights of the parties under the DSU, such as the MPIA.

AGENDA POINT13: APPELLATE BODY APPOINTMENTS

• The European Union refers to its previous statements on this issue and thanks all Members that have co-sponsored the proposal to launch the appointment processes.

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

• As reflected in the large number of Members co-sponsoring the present proposal, a fully functioning WTO dispute settlement system is critical for a rules-based multilateral trading system and for the credibility of the WTO as a rules-based institution.

• 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.

• The EU will continue to engage constructively in finding, through reform, a lasting solution to the current situation regarding appointments to the Appellate Body.

• The EU is participating in the ongoing discussion process in Geneva. We treat very seriously the commitment, made at MC12, on having a fully and well-functioning system by 2024.

• The EU is keen to see reform discussions moving very shortly to a new phase focused on a limited set of specific issues, paving the way for getting quickly into text-based discussions that reach agreement by MC13. We should not miss a Ministerial Conference if we want a fully and well-functioning system in place in 2024.

• The EU will engage with any reform effort that respects the core features of the dispute settlement system. These include the right to appeal review before a standing adjudicative body.

Re Ukraine/Russia

• The European Union reiterates its resolute condemnation of the Russian Federation’s military aggression against Ukraine. Russia’s abhorrent conduct grossly violates international law and undermines international security and stability.

• The European Union fully supports Ukraine’s independence, sovereignty and territorial integrity within Ukraine’s internationally recognised borders, as well as Ukraine’s inherent right of self-defence against Russia’s unprovoked and unjustified military aggression.

• We call on Russia to withdraw its troops from Ukraine and to end immediately its campaign of systematic missile strikes against Ukrainian civilians, civilian targets, energy infrastructure and other utilities, which inflicts terrible suffering on the people of Ukraine.

• War crimes committed against Ukrainians and the widespread targeted destruction of civilian infrastructure are gross violations of international law. The EU welcomes and encourages efforts to ensure full accountability for war crimes and the other most serious crimes in connection with Russia’s war of aggression against Ukraine.

• The European Union remains committed to providing, along with partners, financial relief to Ukraine, and to supporting Ukraine’s resilience and long-term reconstruction.

• The European Union will stand firmly by Ukraine and its people for as long as it takes.