NEWS


WTO Panel report fi nds against EU


On 3rd December the World Trade Organisation published its panel report


on the dispute between China and the EU over regulation 91/2009 imposing anti-dumping measures on carbon steel fasteners imported from China.


described by the European Commission as a “signifi cant setback”. The 256 page report from the three-man panel chaired by Luiz O. Baptista, recommended that: “The Dispute Settlement Body request the European Union to bring its measure into conformity with its obligations”. The panel, however, declined a request from China that it should suggest that the anti-dumping measure should be withdrawn. The report, a full copy of which can be


W


downloaded from www.wto.org, concludes that Article 9 (5) of the European Union’s basic Anti Dumping Regulation is inconsistent with Articles 6.10 and 9.2 of the WTO Anti Dumping Agreement. The panel also found “that the European Union has acted inconsistently with Article XVI:4 of the WTO Agreement and Article 18.4 of the AD Agreement by failing to ensure the conformity of its laws, regulations and administrative procedures with its obligations under the relevant agreements.” These conclusions appear to fundamentally affect the basis on which the Commission calculates and applies anti-dumping tariffs to exporting companies in countries, like China, currently defi ned as non-market economies. By no means all the detailed rulings,


however, were in China’s favour. The WTO dismissed many of its contentions, including several relating to the substance of the 91/2009 Regulation, although the Commission was found to have erred on a series of procedural issues in the case.


A long way to go yet? The two parties had 60 days within which to


lodge an appeal. However, as we go to press Reuters reports that the EU and China have requested an extension of the deadline to 25th


March. It appears probable the request


was made in order to ease the workload on the WTO’s reportedly overworked Appellate Division. So far the European Commission has not issued an offi cial statement about the WTO report or its intentions with regard to it. The


10 Fastener + Fixing Magazine • Issue 67 January 2011


hen announced the report was rapidly interpreted as a major legal victory for China and, according to one news report, was


Chinese commerce ministry called for the EU to “respect the WTO’s ruling and rescind rules and discriminating practices that go against WTO rules at an early date”. The request for a delay, however, strongly suggests that one or probably both of the parties do intend to appeal – there appears little point in the request otherwise. The WTO’s guide to dispute settlement


explains: “Appeals have to be based on points of law such as legal interpretation - they cannot reexamine existing evidence or examine new issues.” Three from a permanent seven-member WTO Appellate Body would hear the appeal. The appeal can uphold, modify or reverse the panel’s legal fi ndings and conclusions. Normally, the WTO says, appeals should not last more than 60 days, with an absolute maximum of 90 days. The Dispute Settlement Body has to accept or reject the appeals report within 30 days - rejection is only possible by consensus. It is worth noting that the European


Commission was in possession of the full WTO panel report well before it was published generally. This was prior to its announcement of its investigation on alleged circumvention of the 91/2009 Regulation via Malaysia. If an EU appeal is ultimately dismissed, or


the EU chooses to accept the existing report, then according to the WTO, “it should swiftly correct its fault”. In practice it has to propose “a reasonable period of time” for which it would need to obtain agreement from the Dispute Settlement Body. If agreement on this is not reached WTO rules allow for arbitration. The WTO website suggests that the reasonable period of time set by the arbitrator could be “approximately 15 months”. However one looks at it the contacts made


to European importers by ebullient Chinese exporters, reckoning that anti-dumping would be terminated in January, appear extremely premature. Unless the European Commission capitulates in double quick time, a probability that looks very thin, then this dispute looks set to grind on for a good while yet, and may only fi nd real solution in political negotiation. As always we will publish any breaking news at www.fastenerandfi xing.com


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