Panel Will Weigh Chinese Duties On Japanese Steel

The DSB agreed to set up a panel that will examine China's anti-dumping duties on Japanese steel. Japan had its initial panel bid blocked at last month's DSB, but renewed its request at Monday's meeting to establish a panel automatically.

Japan made only a brief statement in seeking the panel, saying that it "considers China's measures to be inconsistent with its obligations" under core WTO agreements. For its part, China told the DSB that it "regretted" Japan's decision to forge ahead with the case, asserting that its duties were in line with its WTO commitments. Beijing added that it remained willing to discuss the matter with Japan bilaterally.

Japan hit China with a WTO complaint in June, focusing much of its case on China's assessment that its domestic producers were being hampered by Japanese competitors, paving the way for the duties at the center of the dispute.

The two sides attempted to settle the dispute through negotiations, but came up empty, leading Japan to seek adjudication from a WTO panel at last month's meeting. China blocked that request, as all WTO members facing a complaint are entitled to do, but the two sides are no closer to a resolution as Japan forged ahead.

Panama, Costa Rica Set For Showdown

A similar dynamic played out in the dispute brought by Costa Rica challenging Panama's various restrictions on dairy goods, meat products, fish food, and a variety of fruits. Costa Rica saw its first panel request blocked at last month's meeting, but successfully secured a panel to review its claims on Monday.

Panama has effectively banned or heavily restricted imports of various food products from Costa Rica over the past two years, purportedly over safety and health concerns. Costa Rica filed a challenge at the WTO in January, alleging that Panama's restrictions are not based on sound science and are out of step with international guidelines.

Both sides have dug in, and consultations to resolve the fight have gone nowhere. Monday's meeting saw each side reiterate their positions, with Costa Rica stressing that the global risk status for the subject imports has not changed.

Panama said that Costa Rica declined to file the paperwork necessary for its import authorizations to be renewed and that Panama has a right to request those authorization documents from potential exporters. The Panamanian delegation added that it was "ready to participate" in the WTO proceedings in good faith.

US, China Spar Over Solar Safeguard Decision

China used Monday's DSB meeting to lay into a WTO panel ruling earlier this month that struck down its challenge to U.S. safeguard restrictions on solar energy equipment imposed in 2018. The panel rejected all of China's challenge, finding that U.S. authorities followed the rules of the WTO's Agreement on Safeguards in setting up the tariff-rate quotas.

Beijing called out the panel for conducting a faulty analysis, which it called "systematically harmful." China has appealed the decision to the WTO's Appellate Body, which is currently defunct as a result of the U.S. blockade against new judges, leaving the case effectively in limbo.

"In China's view, the panel report contains serious legal errors, including a gross misreading of legal requirements for imposing safeguard measures, as well as a major misunderstanding of a panel's proper role in examining trade remedy investigations," China said, noting that the decision "sharply deviates from existing WTO jurisprudence."

The U.S. delegation issued a firm rebuke against China at the DSB meeting, suggesting that Beijing was trying to invalidate the overwhelming U.S. victory.

"The United States will not stand idly by while China continues trying to undermine the solar safeguard measure and to continue harming U.S. solar producers and indeed market-oriented solar producers worldwide," the delegation said.

In its statement, the U.S. added that it was "disappointed" that China was persisting to fight the decision despite such an overwhelming loss, noting that China's own overcapacity of crucial components for the solar cells spurred the U.S. to take action with its safeguard restrictions in the first place.

Appellate Body Impasse Persists

The Biden administration also continued to block the appointment of new judges to fill vacant seats on the WTO's Appellate Body, which has been shuttered since the end of 2019 and unable to take new cases.

Former President Donald Trump began blocking new appellate appointments as a matter of policy, citing opposition to the appellate panel's failure to deliver rulings on time and its alleged overstepping of its authority. The blockade has bled into the Biden administration.

In its brief statement, the U.S. delegation reiterated the message it has carried for more than three years on the matter: that it wants to see systemic changes to the WTO's dispute resolution practices before agreeing to repopulate the Appellate Body.

"The United States believes that Members must undertake fundamental reform if the system is to remain viable and credible," the delegation said. "The dispute settlement system can and should better support the WTO's negotiating and monitoring functions."

Source: Law360