Publication Date

3-11-2011

Abstract

[Excerpt] Although the United States has complied with adverse rulings in many past World Trade Organization (WTO) disputes, there are currently 11 cases in which rulings have not yet been implemented or the United States has taken action and the dispute has not been fully resolved. Under WTO dispute settlement rules, a WTO Member will generally be given a reasonable period of time to comply with an adverse WTO decision. While the Member is expected to remove the offending measure by the end of this period, compensation and temporary retaliation are available if the Member has not acted or taken sufficient action by this time. Either disputing party may request a compliance panel if there is disagreement over whether a Member has complied.

Remaining unsettled are long-standing disputes with the European Union (EU) regarding a music copyright statute (DS160) and a statutory trademark provision affecting property confiscated by Cuba (DS176), as well as a dispute with Japan over a provision of U.S. antidumping law (DS184). The Continued Dumping and Subsidy Offset Act of 2000 (“Byrd Amendment”), which was held WTO-inconsistent in January 2003 and repealed effective October 2005, remains the target of sanctions by complainants EU and Japan due to continued payments to U.S. firms authorized under the repeal legislation (P.L. 109-171) (DS217/DS234). Congress placed limits on funds that are available for these distributions in December 2010 (P.L. 111-291, § 822). In addition, the United States and Antigua have been consulting on the resolution of outstanding issues in Antigua’s challenge of U.S. online gambling restrictions (DS285). Compensation agreements entered into by the United States with various WTO Members in exchange for the withdrawal by the United States of its WTO gambling commitments, an action taken by the United States to resolve the case, will not enter into effect until issues with Antigua are resolved. Congress repealed a WTO-inconsistent cotton program at issue in Brazil’s 2002 complaint over U.S. cotton subsidies in P.L. 109-171, but other programs were also successfully challenged and the United States was later found not to have fully complied (DS267). The United States since made statutory and administrative changes affecting the export credit guarantee program faulted in the case. While Brazil obtained authorization from the WTO to retaliate in the case, the two countries entered into a preliminary agreement in April 2010 that forestalled the imposition of sanctions and signed a framework agreement in June 2010 aimed at permanently resolving the dispute. The latter includes Brazil’s pledge not to impose sanctions during the life of the agreement and contemplates possible legislative resolution of the dispute in the 2012 farm bill. Brazil had earlier announced that it was entitled to impose $829.3 million in annual retaliation, $591 million of which would consist of import surcharges on U.S. goods.

Five pending cases involve the U.S. practice of “zeroing,” under which the Department of Commerce (DOC), in calculating dumping margins in antidumping (AD) proceedings, disregards non-dumped sales. The U.S. practice was successfully challenged by the EU (DS294/DS350), Japan (DS322), Mexico (DS344), and South Korea (DS402), resulting in broad WTO prohibitions on U.S. use of the practice. The United States took administrative action to resolve one aspect of DS294 by abandoning zeroing in original AD investigations as of 2007. It has yet to fully comply, however, either in this case or in DS350, DS322, or DS344. While the EU and Japan requested the WTO to authorize sanctions, each agreed to suspend U.S.-requested arbitration of their proposals in 2010 on the understanding that the United States would resolve outstanding issues in a timely fashion. To this end, DOC in December 2010 proposed to eliminate the use of zeroing in later stages of U.S. AD proceedings. A compliance panel proceeding is currently under way in the dispute with Mexico (DS344). An adverse panel report was adopted in Korea’s challenge (DS402) on February 24, 2011.

Comments

Suggested Citation

Grimmett, J. J. (2011). WTO dispute settlement: Status of U.S. compliance in pending cases [Electronic version]. Washington, DC: Congressional Research Service.

http://digitalcommons.ilr.cornell.edu/key_workplace/812

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