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Updates and Notes

This page contains details of the most recent updates to our publications, as well as notes on developments between updates and on other issues of interest.

ITR = International Trade Regulation
EUAD = EU Anti-Dumping and Trade Defence Law and Practice

Last Updated: 23 November 2017

EUAD
November 2017
EUAD
New update (Issue 93) for EU Anti-Dumping and Trade Defence Law and Practice, in printed and electronic form.

The period since July has been a relatively quiet one, with only two judgments, one each from the Court of Justice and the General Court. Two anti-dumping and two anti-subsidy investigations have been commenced, along with three expiry reviews, and five partial interim reviews.

The Comitology procedure came fully into play for the first time regarding an anti-dumping measure when a proposal went to the appeal committee. The Commission presented an amended proposal in line with the chairman’s (i.e. the Commission’s) indication of what would secure the broadest support; it was adopted.

Once again claims against an anti-dumping measure have been pursued both before the Union’s courts in Luxembourg (e.g. Case C-468/15 P) and via the WTO’s panel and Appellate Body procedures in Geneva (EU – Fatty Alcohols (Indonesia)). The Union’s method of calculating allowances for differences between export price and normal value was successfully defended in both contexts. However, the WTO panel found that a particular disclosure obligation in the Anti-Dumping Agreement (not found in the EU regulation) had not been complied with, and the EU chose not to take the point to the Appellate Body. It was not raised in the EU proceedings.

The Court of Justice has confirmed (Case C-205/16 P) that where an appellant challenges the interpretation or application of EU law by the General Court, the points of law examined at first instance may be raised again in the course of an appeal.

ITR
September 2017
ITR
New update for International Trade Regulation (Issue 42) in printed and electronic form.

The most extensive changes in this update are those consequent on the coming into force of the Trade Facilitation Agreement. Although ITR is focused on trade regulation rather than customs law, the fact that the new Agreement falls under the aegis of the WTO, by being added to the list of ‘covered agreements’, justifies its inclusion. Chapter 7 has been considerably expanded to include the new rules. Some of the ground that they cover is the subject of provisions in other customs arrangements, notably the Revised Kyoto Convention, and appropriate references are made to these.

The TFA was beaten, by only a few days, to first place in the list of amendments to the WTO by the coming into force of the changes to the TRIPS Agreement. These concerned compulsory licensing of pharmaceutical drugs, but the changes were largely formal since the substantive rules had already been introduced by means of a waiver.

Five panel reports, two Appellate Body reports, and two arbitrators’ decisions are covered in this update. In US – Anti-Dumping Methodologies (China), the Appellate Body again addressed the notion of a ‘measure’ that is capable of being the subject of dispute proceedings, further elaborating the notion of a rule or norm of general and prospective application.

The DSU Article 22.6 arbitration in the US – Tuna II case clarified a number of elements of the law governing such proceedings.

Some important interpretations of the rules in GATT Article XXVIII regarding modification of schedules (for example, concerning the significance of certification) were made by the panel on EU – Poultry Meat (China). The issue has contemporary relevance in the debates on the implications of Brexit for the position of the UK in the WTO. The panel also elucidated the terms of GATT Article XIII regarding the distribution of tariff quotas. The report was not appealed.

Quite a number of the WTO rules on trade defence have been addressed in dispute settlement reports during this period. For example, the Appellate Body in US – Anti-Dumping Methodologies (China) further refined its interpretation of the rules on dealing with targeted dumping.

SPS measures have once again been a focus of attention. The panel report on Russia – Pigs (EU) looks in particular at the issue of pest- and disease-free areas, which is covered in some detail in the SPS Agreement.

EUAD
July 2017
EUAD
New update (Issue 92) for EU Anti-Dumping and Trade Defence Law and Practice, in printed and electronic form.

Since the last update there have been almost 50 reports relating to Commission anti-dumping and anti-subsidy investigations, three Court of Justice judgments (and several opinions), and four (and one order) of the General Court. Here are some of the points that have come up.

In its judgment in Case C-511/09 P, Dongguan Nanzha Leco Stationery v Council, the General Court rejected the Commission’s argument that, in the interest of equal treatment, a Chinese exporter should be denied access to information provided by a company in an ‘analogue’ country even when, unusually, that company was willing to allow such access.

In an anti-subsidy investigation involving Chinese exporters of steel flat products the Commission once again encountered a wide-scale refusal to cooperate on the part of both government and (apparently) private financial institutions, as well as from some exporters. However, the investigation demonstrated that it has now amassed a considerable body of information on Chinese subsidy practices, using which it can reach what on their face appear to be convincing bases for calculating specific amounts of subsidisation.

These investigations also provide an occasion for exploring the notions of ‘public body’ and ‘entrusting or directing a private body’ found in the definition of subsidies. Although, as the WTO Appellate Body has ruled, mere state ownership is not enough to create such a status, when ‘facts available’ are invoked, the Commission will treat the fact of ownership as significant.

The Commission has become less reticent in making explicit references to its 1998 Guidelines for calculating subsidies.

In an investigation involving importers related to exporters of iron and steel products the Commission gave a useful list of five factors that led it to deny the existence of a ‘single economic entity’.

Regarding determinations of injury, the Commission has clarified its practice regarding cumulation of imports that are the subject of separate investigations.

Finally, the Trade Barriers Regulation, unused since 2008, has been called into play in respect of Turkish measures affecting the import of uncoated wood-free paper.

ITR
July 2017
ITR
Brexit will require a massive development of customs facilities and personnel in the UK, and in the EU. This exactly coincides with the coming into force of the WTO’s Trade Facilitation Agreement, a major part of which is explicitly devoted to radical improvements in the customs operations of developing and least-developed countries. These countries are being asked to commit to specific dates over the next few years for achieving these improvements, and are promised ‘assistance and support for capacity building’ by developed donor countries.
EUAD
March 2017
EUAD
New update (Issue 91) for EU Anti-Dumping and Trade Defence Law and Practice, in printed and electronic form.

There have been three Court of Justice judgments since the last update, and seven (four separate issues) of the General Court (some of which might yet be appealed). The same period saw about 20 decisions imposing or amending duties, or terminating investigations.

Regarding judgments, in Case C-468/15, P PT Musim Mas v Council, the Court of Justice returned to the knotty problem of the ‘single economic entity’, this time in the context of a producer selling through a distributor. The Court also made observations on when related companies could be presumed to be operating independently in the context of adjustments to be made when making price comparisons. In other judgments the Court explained the allocation of the burden of proof in anti-circumvention actions, and ruled on the distinction between errors of law on those of assessment.

The end of the period was marked by two massive reports (one on dumping the other on subsidies) in expiry reviews on photovoltaic modules and cells originating in China. Since the issues were largely factual the reports do not feature greatly in the update. The subsidies report is notable for its account of the persistent lack of cooperation from the Chinese authorities. The reviews ended in the measures being extended for a further 18 months.

ITR
March 2017
ITR
More on Brexit and the WTO

What would be the UK’s WTO schedules following Brexit?

The schedules of WTO members are linked to the obligations set out in GATT Article II:1,* most notably that in Article II:1(a) not to accord to the commerce of other Members treatment less favourable that that stated in the schedule, and (in similar terms) in GATS Articles XVI, XVII and XVIII.

All WTO members, including the UK, have schedules. The UK’s schedules are unusual in that they are shared with the EU and the other 27 EU members, but they are nevertheless schedules of the UK. The mere fact of leaving the EU does not affect this legal situation. The UK would retain its schedules, as well as the obligations that go with them. There is nothing in the various WTO agreements, such as the Marrakesh Protocol to which the GATT schedules were annexed, to justify a unilateral ending or amending of the schedules, and obligations stemming from them, merely because of Brexit.

The UK has indicated that it will take on the existing schedule, but such a step is far from straightforward. The obligations in the schedules are mostly set at an EU level, but the UK, not being in the customs union, will be not able to promise access outside its own territory. As a consequence some of the obligations will be difficult, if not impossible for it to fulfill.

Taking the obligations in turn, the most straightforward (and also the most common) are the ‘bindings’ of the maximum levels of customs duty that may be imposed on imports. They are typically expressed as a percentage of the value of the goods. It might seem that the UK could satisfy its obligations under GATT Article II:1(a) merely by adopting the same levels of bindings as are found in the EU’s schedule. However, such action would not be sufficient. The obligation undertaken by the UK, and its partners in the EU, is to respect the binding in regard to imports to the whole of the EU. That obligation would not be respected if, say, goods on which the bound duty had been paid on import at Southampton, then had to pay a further duty if they were shipped on to Rotterdam. The criterion to be applied in this context is that of maintaining not merely the same tariff level, but the same ‘conditions of competition’ as prevailed when the schedule was adopted.[Panel report EC – IT Products, paras. 7.757 et seq.] The UK could ameliorate the situation by allowing the goods to be placed under a special, duty-free regime while passing through its territory. However, not all traders could take advantage of such arrangements (for example, a wholesaler in the UK with retail customer elsewhere in Europe), and the arrangements themselves are clearly more onerous than the free movement that applies pre-Brexit.

Of course, in the situation described here the exporter could avoid double duties by shipping the goods directly to Rotterdam. The degree of deterioration in the conditions of competition is therefore limited. Nevertheless, by placing exporters in a position where their goods could incur double duties the UK (and the EU) would be adversely affecting those conditions and so would be failing to respect the obligations imposed by Article II.

The other obligations arising from the EU’s schedules should be viewed in the same light. There are two particular problems: tariff quotas (i.e., lower tariffs on a specified yearly volume of imports) and agricultural subsidies (i.e., limits on the yearly level of subsidies that may be granted). In the EU’s GATT schedule both of these are set at the level of the whole EU. Thus the UK would be obliged to accept any part of an unfilled agricultural tariff quota should an exporter choose to land goods in the UK. The UK’s obligations would diminish as the tariff quota had been filled elsewhere in the EU. Similarly, the maximum level of agricultural domestic subsidy would have to be respected across the UK and EU. If France gave subsidies up to the maximum level the UK would be correspondingly denied that right.

In any event, the UK has already acted in a way that denies other WTO members the competitive advantages stemming from the EU’s concessions and commitments in the 1994 WTO agreements in ways that could not reasonably have been expected when they were concluded. Such action constitutes ‘non-violation nullification or impairment’, as defined in Article XXIII:1(b) of GATT. The situation described above, of exports arriving in the UK and then being shipped to Holland is precisely one where a particular competitive advantage, conferred by the EU schedule, has been undermined. The UK’s proposed action is already affecting traders, who are now having to alter their arrangements in order to deal with that situation (most obviously by exporting directly to the post-Brexit EU).

Arguably the UK’s plan to abandon the customs union already constitutes a breach of Article II. The traditional GATT rule was that measures which would infringe obligations if they were implemented, would not be inconsistent with GATT obligations unless that implementation was mandatory. However, the Appellate Body has indicated that a strict mandatory/non-mandatory distinction does not define the limits of GATT responsibility. The level of political commitment to ending of the customs union could be a significant factor in this regard.

The UK could be exposed to criticism on these grounds in the various WTO political bodies, but the issues would come to a head only if another WTO member chose to make them the subject of dispute settlement proceedings. The likelihood of such action would no doubt depend on what the UK offered in the course of negotiating changes to its schedules, a topic examined in the following section.

How could the UK alter its schedules?

Even without the difficulties described above there are reasons why the UK would wish to change its schedules following Brexit. For example, in the present schedule the ‘specific’ duties (tariffs charged at a fixed monetary amount per kilo, etc.) are denominated in Euros.

The schedules are treaty obligations, and the basic rule of international law is that, subject to the rules of the treaty, such obligations cannot be changed without the agreement of all parties. The WTO does have specific rules for modifying the obligations set out in schedules without having to obtain such comprehensive agreement. They are found in Article XXVIII of GATT, and Article XXI of GATS.

However, the situation has become confused by the existence of a procedure, originally adopted by GATT in 1980, for ‘certifying’ changes to schedules. Put simply, if changes are achieved by one of the various permitted means, and no WTO member objects to them within a set period, they are officially recorded. It sometimes happens that members do make such objections, and certification of the modification is to that extent denied. However, this is not to say that the modification, having satisfies the relevant WTO rules, is not justified. This point would be established should the objecting member take the matter to a dispute settlement panel. For this to happen it would have to argue that the member making the modification was not respecting its obligations under, in the case of GATT, Article II. Suppose that, prior to joining the EU, Bulgaria had a binding of 5% on widgets, and that (following the procedures described below) it then adopted the EU binding of 10% on widgets, and charged that on imports. Another member might claim that the EU had not properly observed the GATT rules on forming customs unions, and was therefore not entitled to impose duty at that level on Bulgarian imports of widgets. Notice that the claim would be made (under GATT Article II) against the duty imposed vis-à-vis the 5% binding, not as regards the purported new level of binding. However, the member concerned would doubtless also state its objection to the certification of the new EU, inclusive of Bulgaria, schedule.

Thus, the crucial issue is not the certification, but the justification for the modification. (Arguably, if there are no objections to certification it might be said that, all members having assented, the treaty obligations had been correspondingly amended, irrespective of whether the modification procedures had been followed.)

Although there is no provision in the WTO agreements that specifically addresses the situation of Brexit, the rules regarding the formation of customs unions and free-trade areas give an indication of how this gap should be filled. GATT Article XXIV:5(a), regarding the formation of customs unions, requires that the duties and other regulations of commerce imposed at this point be no greater than the previous general incidence of such duties and regulations. GATT Article XXIV:6 provides for negotiations under Article XXVIII in the case of increased tariffs that are not offset by others that are decreased. The 1994 Understanding on the interpretation of Article XXIV says that such negotiations should be commenced before the changes are made.

Thus, the relevant procedure for dealing with schedule modification is that set out in Article XXVIII. In any event, whether or not the matter is treated as one falling under Article XXIV:6, it is the view of the Appellate Body that any modification of a GATT schedule requires resort to the Article XXVIII procedures.[ Appellate Body reports EC – Bananas III (Article 21.5 – Ecuador II), EC – Bananas III (Article 21.5 – US), paras. 450 et seq.] And this provision has the advantage, mentioned above, of allowing adjustment of the obligations in schedules to be achieved by agreement with a limited number of members, i.e., those defined in that Article as having negotiating rights, or even, in the last resort, by unilateral action. Without such a provision any member that felt itself damaged by actions taken consequent to the schedule modification could invoke Article II. It would therefore be in the interest of the UK and EU to treat Brexit as though it were subject to Article XXIV:6. In any event, it is arguable that the kind of double imposition of duties that is described above could reasonably qualify as an increase in the bound rate of duty, which is the focus of this provision.

Use of this procedure would lead to application of the ‘Transparency Mechanism’ operated by the Committee on Regional Trade Agreements. One of the important features of the procedure is the early announcement and notification of such agreements.

What the UK (and EU) could offer in these negotiations that would be accepted as compensation for the loss of competitive position described above is likely to be as much a political as an economic issue.


* Article II:1(a) ‘Each [Member] shall accord to the commerce of the other [Members] treatment no less favourable than that provided for in the appropriate Part of the appropriate Schedule annexed to this Agreement.’

An explicit obligation regarding levels of customs duties is set out in Article II:1(b):

‘The products described in Part I of the Schedule relating to any [Member], which are the products of territories of other [Members], shall, on their importation into the territory to which the Schedule relates, and subject to the terms, conditions or qualifications set forth in that Schedule, be exempt from ordinary customs duties in excess of those set forth and provided therein. …’.

ITR
February 2017
ITR
The UK government has published a ‘White Paper’ relating to exit from the EU which addresses several aspects of its position regarding the WTO.

Not surprisingly the government intends to establish the UK’s own schedules, although how these could provide ‘clarity for UK businesses about their access to overseas markets around the world’ is not obvious. They will replicate ‘as far as possible our current position as an EU Member State’, which can be taken to mean that for goods the duty rates of the present EU Schedule will be adopted. None of the issues raised in the August 2016 note (below) is addressed.

What does attract particular attention in the White Paper are dispute resolution mechanisms in international agreements. A number of examples are described in an Annex, notably those in the EU – Canada Agreement (CETA). Actually, the main dispute resolution system in CETA mirrors that of the WTO, which the Paper treats more briefly and rather carelessly (it wrongly suggests that panel reports can be rejected by majority of the DSB, and that they have sometimes been rejected). The nationality of judges on the CETA arbitration panel is explained, but no mention is made of the fact that WTO panels never include nationals of the disputants, and that the chances of the non-EU/EEA national being appointed to, what is in effect, the ‘European’ seat on the Appellate Body are small. A short account of NAFTA mechanisms is given, and reference is made to the Chapter 19 on anti-dumping and countervailing duties, but without mentioning the notable role that binational panels play as substitutes for a respondent state’s own courts in applying the law of the state regarding its imposition of duties.

ITR
January 2017
ITR
New update for International Trade Regulation (Issue 41) in printed and electronic form. Here are a number of the points that are covered.

The panel in China – Intellectual Property Rights appeared to support the notion that a panel may consider evidence that supports an argument only if it is put forward by the party making the argument. The notion has fortunately not found favour, and was disregarded by the recent panel in India – Solar Cells, which found nothing remarkable in itself identifying evidence that supported a party’s contention. Arguably the probative value evidence might vary according to the party that presents it – evidence against a party’s interest – might be regarded as more probative if it has been presented by that party.

The related question of how far a panel can go itself in obtaining evidence did not arise in this case. In China – Intellectual Property Rights the panel said that it was not obliged to trawl for evidence. That observation seems uncontroversial, but borderline problems are likely to arise regarding evidence produced when a panel makes use of experts.

In India – Solar Cells the Appellate Body reaffirmed the rule that the like products criterion in GATT Article III is a dependent on physical characteristics, and that inputs and processes may inform but not displace the competitive relationship standard arising from those characteristics. In the same case it also elaborated a list of characteristics of what should qualify as ‘laws and regulations’ in GATT Article XX(d) – the general exception from GATT obligations that allows measures to secure compliance with ‘laws and regulations’ such as those relating to enforcement of IPR rights. In this context the Appellate Body emphasised the structural similarity between Article XX(d) and Article XX(j), which creates an exception for products in ‘general or local short supply’. On the substance of this exception it clarified one point in particular: the determination of ‘short supply’ cannot be limited to sources in the territory of the Member concerned.

In US – Washing Machines, which concerned US trade defence action against Korea exports, the Appellate Body elaborated on the notion, in GATT Article VI:3, of subsidies given ‘on the manufacture, production or export’ of a product, and on that in Article 2.2 of the SCM Agreement of ‘enterprises’ (an element of the requirement of specificity). It also had things to say about regional subsidies. In the context of dumping margins, the Appellate Body’s considered ‘zeroing’ (see the December 2016 note), and what was meant by a ‘pattern of export prices’ when identifying targeting.

The Appellate Body also considering anti-dumping measures in EU – Biodiesel, where it confirmed the view of the panel that the reference to ‘records … [that] reasonably reflect the costs associated with the production and sale of the product under consideration’ in Article 2.2.1.1 of the Anti-Dumping Agreement did not justify disregarding those records if the costs were alleged to reflect some distorting factor. However, it avoided ruling on whether the phrase ‘costs shall normally be calculated on the basis of records kept’ implied that there might be other grounds for disregarding the records than those mentioned in this provision.

ITR
December 2016
ITR
Despite determined resistance by the US, the Appellate Body’s attempts to stamp out every instance of the practice of ‘zeroing’ in the calculation of dumping margins appear to be achieving their goal. Another application arose in US – Washing Machines which addressed the special price-comparison rule permitted by the Anti-Dumping Agreement in cases of targeted dumping. When it was introduced this rule was seen by some as giving a limited opportunity for zeroing, but this possibility has now been denied by the Appellate Body, albeit by a majority of 2:1.

In a further round of the Boeing / Airbus dispute (US – Tax Incentives) a panel has found that the measures applied by Washington State constitute de facto, but not de jure, export subsidies and recommended their withdrawal. The US is taking the matter to the Appellate Body.

EUAD
December 2016
EUAD
The Court of Justice has upheld the General Court’s rejection of a claim against anti-dumping duties imposed on Fatty alcohols and their blends from India, Indonesia and Malaysia. In Case C-468/15 P, PT Musim Mas v Council, judgment of 26 Oct. 2016, EU:C:2016:803, the Court addressed the notion of ‘single economic entity’ (SEE), which is important in the context of price comparison. Referring to the situation where a distributor sells products of a producer it ruled that to the extent that the distributor sells products of other producers, and that the producer sells products directly, i.e. without using the distributor, the two are less likely to be regarded as a SEE.
EUAD
November 2016
EUAD
The Commission has renewed its attempt to amend the basic regulations. The proposed measure - COM(2016) 721 final – contains ‘a new method for calculating dumping on imports from countries where there are significant market distortions, or where the state has a pervasive influence on the economy’.

The aim is to have the same rules for all exporting countries that are WTO members, and confine the use of data from market-economy ‘analogue’ countries to exporters in non-WTO members.

Regarding calculation of the normal value the amendments focus on the concept of ‘significant distortions’ which make it ‘not appropriate to use domestic prices and costs in the exporting country’.

Such significant distortions may be deemed to ‘exist, inter alia, when reported prices or costs, including the costs of raw materials, are not the result of free market forces as they are affected by government intervention.’ The proposal includes illustrations of the factors (related to state activity) whose impact may be considered in this contact.

When such distortion is established the normal value is to ‘be constructed on the bases of costs of production and sale reflecting undistorted prices or benchmarks’. The sources to be used include ‘undistorted international prices, costs, or benchmarks, or corresponding costs of production and sale in an appropriate representative country with a similar level of economic development as the exporting country, provided the relevant cost data are readily available’.

Although the matter is not addressed in the proposal it may be assumed that the same principle would be applied when calculating costs for the purposes of determining that sales had been made at a loss and were therefore not “in the ordinary course of trade” – a conclusion that is the usual justification for resorting to a constructed normal value. However, it may be that where “significant distortions” are present the Commission might prefer instead to find that there was “a particular market situation”, a concept that provides an alternative ground for resorting to a constructed normal value. The Commission has until now made little use of this possibility.

The Commission will issue reports describing the situation in particular countries or sectors as regards the criteria relevant to the issue of distortion, and these may be used in complaints and investigations. The evidence and conclusions in such reports will be open to challenge by interested parties during investigations.

The transition provisions are designed not to change the methodology on existing measures.

‘The Commission has also proposed a strengthening of the EU anti-subsidy legislation so that in future cases, any new subsidies revealed in the course of an investigation can also be investigated and included in the final duties imposed.’

Commission Press Release 9 Nov 2016

EUAD
November 2016
EUAD
New update (Issue 90) for EU Anti-Dumping and Trade Defence Law and Practice, in printed and electronic form.

At the time of writing some of the General Court rulings that are cited in the update could yet be the subject of appeals, viz., Case T-351/13, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, judgment of 18 Oct. 2016, EU:T:2016:616; Case T-111/14, Unitec Bio v Council, judgment of 16 Sept. 2016, EU:T:2016:505; and Cases T-112/14, T-113/14, T-114/14, T-115/14, T-116/14, T-119/14, Molinos Río de la Plata v Council, judgment of 16 Sept. 2016, EU:T:2016:509. The last two of these judgments are among several that addressed the same issues that arose from the EU's measure on biodiesel from Argentina and Thailand. Other judgments that are already subject to appeal are noted (as 'pending') in the text. Click here for the list of all such actions.

A first in the world of EU anti-dumping: the EU imposes duties retroactively. EU rules (as permitted by the WTO AD agreement) have for long allowed the possibility of retroactively imposing anti-dumping duties for up to 90 days prior to the imposition of provisional measures. Under EU procedures this requires that the imports should have been registered. In the case of cold-rolled flat steel products from China the investigation was initiated in May 2015. In December, at the request of the complainants, imports were made subject to registration. Provisional measures were imposed in February 2016. The duties were imposed retroactively to the date of registration (which was less than 90 days before the provisional measures). Steel products from China have recently been the target of a series of anti-dumping investigations.

In an interesting instance of judicial competition the WTO dispute procedures were recently revealed to be more expeditious than those of the EU. The EU imposed anti-dumping duties on biodiesel from Argentina and Indonesia in November 2013. Exporters in those countries launched challenges in the EU's General Court in February 2014, and judgments were given on 16 September 2016. Argentina launched its WTO action in December 2013, but because of the deliberate delays built into the system did not get a panel fully underway until June 2014. However, matters then speeded up and the panel report (equivalent to the General Court judgment) came in 29 March 2016. The matter then went to the Appellate Body, which reported on 6 October 2016. An appeal from the General Court, if there is one, could take 18 months.

ITR
August 2016
ITR
New update for International Trade Regulation (Issue 40) in printed and electronic form.

Only two WTO disputes reached a conclusion during this period, both having gone through the full process of panel and appeal. Both were brought by Panama against other Latin American countries, and so added to the small number of panel cases that are argued and reported in Spanish. The first case (Argentina – Financial Services) was also untypical in that it concerned GATS. The Appellate Body reversed many of the panel’s conclusions, giving interpretations of a number of GATS concepts, such as the notions of ’like’ services and service suppliers, and of ’treatment no less favourable’. Its adoption of a common approach to the notion of ’necessary’ in GATT and GATS exception clauses is to be welcomed. The case was principally concerned with Annex on Financial Services, commonly known as the ’prudential carve-out’. In the second case (Colombia – Textiles) the Appellate Body also addressed the notion of ’necessary’ in exception clauses, giving yet another twist to its already complex analysis of the topic.

The future: Acceptances of the Agreement on Trade Facilitation, which aims to harmonize and simplify many aspects of customs law and practice, are nearing the level at which the Agreement will come into force. At that point its provisions will be included in International Trade Regulation.

The implications for the WTO of Brexit, the UK vote to leave the EU, will remain uncertain as long as the form of that departure is undefined. Assuming that the UK leaves the customs union and adopts its own customs tariff, complicated questions will arise concerning its GATT Schedule. Following the breakup of Czechoslovakia (a GATT member) in 1993 both the Czech and Slovak Republics acceded to GATT. Both countries’ Schedules took on the previous bindings, but since they immediately formed a customs union the effect of the split on other members was minimal. When Bangladesh broke away from Pakistan in 1972 it was allowed become a GATT member with a Schedule identical to that which had applied to it as part of Pakistan. That Schedule, however, covered only 13 pages. The EU GATT Schedule is incomparably longer and more complicated. In particular, it contains tariff quotas, and commitments on levels of domestic support for agricultural products, that are defined for the whole EU. The UK would have to present a GATT Schedule which took on a share of these (assuming that it did not radically liberalize these matters). The allocation would likely be controversial, and certification of the proposed Schedule might be long delayed, although such delays are not unprecedented. (One odd carryover from the existing Schedule would be that the UK’s bindings in the form of specific duties would remain denominated in Euros.) In the meantime if other Members were dissatisfied with the UK’s tariff regime they might be moved to invoke dispute settlement, even relying on non-violation nullification or impairment. (Of course, similar issues could also arise for what remains of the EU.) Adoption of a separate GATS Schedule should present fewer problems since the commitments are defined for individual EU member States rather than the Union as a whole. A similar situation exists under the Government Procurement Agreement, to which the EU, but none of its member States, is a party. One other area where the UK would, at least temporarily, face problems would be trade defence, since existing anti-dumping and countervailing duties would be based on EU-wide assessments, and so would provide no authority for their application to the UK alone.

EUAD
July 2016
EUAD
New update for EU Anti-Dumping and Trade Defence Law and Practice (Issue 89), in printed and electronic form.

New consolidated versions of the basic EU anti-dumping and anti-subsidy regulations have required extensive changes in this update. Although nothing of substance has changed there are many minor alterations to wording and punctuation.

In the ArcelorMittal case (C-186/14 P) the Court of Justice has upheld the General Court’s annulment of the duties imposed on Chinese seamless steel tubes. The action was one of the very few that have been based on threat of injury, and the Court found manifest error of assessment in the Commission’s conclusion regarding the vulnerable situation of the domestic industry.

The practice of EU courts invoking rulings of WTO dispute bodies was reinforced by the General Court in the Marquis Energy case (T-277/13), which applied the rulings of the Appellate Body in Fasteners (see below) regarding the right to have an anti-dumping duty determined for individual companies. This case also addressed a significant aspect of EU procedural law - the notion of ‘direct and individual concern’ in regards to admissibility and Article 263 challenges to anti-dumping measures. The parallel case of Growth Energy (T-276/13) reinforced a tendency already apparent in the General Court to constrain the possibility of challenging procedural errors. Whereas the Court of Justice had seemed to allow the mere possibility that the error could have prejudiced the applicant, the General Court has required that the applicant should positively establish that risk.

Since the last update the General Court has issued three substantive judgments, and the Court of Justice has given reasoned judgments on two appeals and two references.

EUAD
March 2016
EUAD
New update for EU Anti-Dumping and Trade Defence Law and Practice (Issue 88), in printed and electronic form.

References from national courts to the Court of Justice under Article 267 of the TFEU seem to be growing in popularity as a way of challenging trade-defence measures. Three out of the seven new judgments reported in the latest Issue are of this type. Such references are available solely to firms that did not have standing to claim directly in the European courts when the original measure was adopted. Importers that are independent of the firms that are exporting to them will usually fall into this category. The claim will then be made in respect of the national implementation of the measure, i.e., the charging of duties on specific imports. Consequently, unlike direct claims (for which there is a two-month limit) the claim can be made a number of years after the adoption of the original measure. Nevertheless, if such a national-level claim is successful the Court of Justice will declare the measure to be invalid, and the consequences are effectively the same as those when a similar result is obtained from a direct challenge.

ITR
February 2016
ITR
New update for International Trade Regulation (Issue 39) in printed and electronic form.

The rate of litigation in the WTO has continued at the same high level established in recent years. Since the last update the DSB has adopted three Appellate Body reports and five panel reports, and there have been several arbitrators’ awards and decisions. Between them they cover well over a thousand pages of text. Here are a few of the points that they covered.

In the compliance phase of the US Tuna dispute the Appellate Body looked further into the differences between the non-discrimination rules in Article 2.1 of the TBT Agreement and in Article III:4 of the GATT. These largely flow from the exception for legitimate objectives, such as human health, which in GATT is found in a special provision (Article XX), whereas in the TBT Agreement they exist in Article 2.1 itself (where they were identified by the Appellate Body). Nevertheless, the Appellate Body decisions on the one provision may shed light on the meaning of the other.

The Fasteners case, like US Tuna reached the Appellate Body as a compliance action. China successfully challenged several features of the measure that the EU had introduced in response to the negative findings made in the first round of the litigation. Although unfortunate for the EU in this particular case, the report confirms the strict view that it takes of the procedural obligations in the Anti-Dumping Agreement. For example, Members can, merely by their conduct, confer ’interested’ status on private parties. No explicit action in that regard is necessary.

Unusually, in addition to the steady flow of interpretations from the dispute-settlement bodies, this period has seen progress in law making. The Nairobi Ministerial Conference in December 2015 adopted several Decisions of which the most important is one imposing an almost complete prohibition on developed countries using export subsidies for agricultural products. The Conference also adopted a Decision on rules of origin in preferential trade arrangements – the 1994 Agreement on origin rules covers non-preferential trade. However, like that Agreement, the Decision expresses goals rather than obligations.

One further law-making development that should be mentioned is the conclusion of a new protocol to the Agreement on Trade in Civil Aircraft (a plurilateral agreement – i.e. one to which only certain WTO Members are party), which contains a new list of products that are covered by the Agreement.


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