Panels set up on Australia's tobacco measures

At its meeting on 28 September 2012, the Dispute Settlement Body (DSB) agreed to establish a panel on Australia’s measures on plain packaging of tobacco products (DS434) and another one on countervailing duty measures on exports from China to the United States (DS437).

Panel requests
DS434: Australia — Certain measures concerning trademarks and other plain packaging requirements applicable to tobacco products and packaging
At the second request by Ukraine, the DSB agreed to establish a panel to study the complaint against measures taken by Australia concerning trademarks and other plain packaging requirements applicable to tobacco products and packaging.
In its request for the establishment of a panel, Ukraine said that Australia’s measures “erode the protection of intellectual property rights” and “impose severe restrictions on the use of validly registered trademarks”. Ukraine’s statement also said that “Ukraine considers that governments should pursue legitimate health policies through effective measures without unnecessarily restricting international trade and without nullifying intellectual property rights as guaranteed by international trade and investment rules”. Ukraine also considers that the measures “are clearly more restrictive than necessary to achieve the stated health objectives” and thus violate the Agreement on Technical Barriers to Trade as an “unnecessary obstacle to trade”.

Australia showed surprise and disappointment that Ukraine decided to challenge Australia’s tobacco plain packaging measures since this step “is at odds with the policies being pursued within Ukraine to comply with the WHO Framework Convention on Tobacco Control”. Australia mentioned that Ukraine has also taken many measures in accordance with this Convention and said that the tobacco plain packaging “is a sound, well-considered measure designed to achieve a legitimate objective — the protection of public health”, which the WTO recognizes as a fundamental right of its members. Australia added that the measure is “clearly non-discriminatory”, “nor is [it] more restrictive than necessary to fulfil its legitimate objective”.

Uruguay supported Australia and said that it could not remain silent in this fight against “the most serious pandemic confronting humanity”. Uruguay also said that “the norms of the Multilateral Trading System cannot and should not force its members to allow that a product that kills its citizens in unacceptable and alarming proportions continues to be sold wrapped as candy to attract new victims”.

New Zealand and Norway also supported Australia. New Zealand said that it is also considering plain packaging measures and Norway said that countries are under obligation to adopt measures to protect public health.

Zimbabwe, Honduras, Dominican Republic, Nicaragua and Indonesia supported Ukraine. Zimbabwe said that 200,000 farmers and their families in the country depend on tobacco for their livelihood. Honduras said that the WHO Framework Convention is indicative and non-binding. Nicaragua said that tobacco is one of the most important items in the country’s exports.

Members that asked to exercise third-party rights in the dispute were: Uruguay, New Zealand, Norway, Zimbabwe, Honduras, Dominican Republic, Zambia, Nicaragua, Indonesia, United States, Chinese Taipei, Turkey, Oman, Japan, European Union, Philippines, Ecuador, Korea, India, Brazil, Argentina, Singapore, Guatemala and Canada.

DS437: United States — Countervailing duty measures on certain products from China

The DSB also agreed to establish a panel to study the complaint against countervailing duty measures taken by the United States on certain products from China that the US considers are subsidized.

China said that it recognizes WTO members’ legitimate rights to adopt trade remedy measures but such rights must be exercised in accordance with WTO rules and not be subject to any form of abuse. The US said that the measures applied were necessary in order to offset injurious subsidies bestowed (by China) on the manufacture, production or export of goods, and to counteract the injury caused by China’s subsidies.

Members requesting to exercise their third-party rights were: European Union, Japan, India, Turkey, Norway, Viet Nam, Australia, Russian Federation, Canada, Brazil and Korea.

DS440: China — Anti-dumping and countervailing duties on certain automobiles from the United States
In another request for a panel, China rejected the first request by the United States for the establishment of a panel to study China’s anti-dumping and countervailing duties on certain automobiles from the United States.

The US reminded members that this was the third time that the US had brought a dispute relating to China’s “multiple failures” to apply the appropriate procedures and legal standards in its injury determination, and to adhere to transparency and basic procedural requirements set out in the Anti-dumping Agreement and Subsidies Agreement.

China said that its investigating authority had determined that the imports of the product concerned originating in the US constituted dumping and was benefiting from the US government’s subsidization, and the dumped and subsidized imports had caused material injury to the domestic industry of China.

Implementation
Several members submitted reports on their implementation of recommendations adopted by the DSB.

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