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WTO Dispute Settlement: Status of U.S. Compliance in Pending Cases

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Abstract:

Although the United States has complied with adverse rulings in many past World Trade Organization (WTO) disputes, 10 cases are pending in which rulings have not yet been implemented or the United States has taken action and the dispute has not yet been resolved. A WTO Member found to have violated a WTO obligation will generally be given a reasonable period of time to comply. While the Member is expected to withdraw the offending measure, compensation and temporary retaliation are available if the Member has not complied by the established deadline.

The United States has not yet settled disputes with the European Communities (EC) involving a music copyright statute and a trademark provision affecting property confiscated by Cuba. H.R. 217 (Serrano) and H.R. 624 (Rangel) would repeal the trademark statute, as well as remove the current trade embargo on Cuba. Also unresolved is a dispute with Japan regarding a provision of U.S. antidumping law involving the calculation of dumping rates for producers and exporters who are not individually investigated. The WTO-inconsistent Continued Dumping and Subsidy Offset Act was repealed in P.L. 109-171, but antidumping and countervailing duties imposed on goods entered before October 1, 2007, may still be distributed to U.S. firms. Complainants EC, Canada, Japan, and Mexico, who had retaliated against selected U.S. products, have expressed concerns about the continued payments allowed under the new law; the EC and Japan are continuing to impose sanctions. P.L. 109-171 also repealed a WTO-inconsistent cotton program at issue in a dispute with Brazil over U.S. cotton subsidies; other U.S. programs were also faulted, and Brazil has since secured a compliance panel, whose report is expected in July 2007. The United States reported to the WTO in April 2006 that it had complied in Antigua and Barbuda's challenge of U.S. cross-border gambling measures by announcing an administrative clarification of U.S. law; a compliance panel subsequently requested by the complainant expects to issue a report in March 2007.

Four pending cases, each involving the imposition of antidumping or countervailing duties (CVDs), require administrative action under existing authorities. The cases involve CVDs on EC, antidumping duties on oil country tubular goods from Argentina and Mexico, and the Commerce Department's practice of "zeroing," under which it disregards non-dumped sales when calculating dumping margins. While the United States took administrative action in the first three cases, compliance panel proceedings were undertaken in each. With a compliance deadline of April 9, 2007, in the zeroing case, the Department of Commerce has announced that it will discontinue the practice in original investigations when applying its most commonly used price comparison methodology. The modification will apply to redeterminations in the specific antidumping proceedings at issue in the WTO case, as well as to all current and future antidumping investigations. Responding to congressional concerns, the Department announced on January 22, 2007, that it will delay the effective date of the modification until February 22, 2007. This report will be updated.

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