Costa Rica’s request for consultations
Costa Rica has filed the first request for consultations at the WTO in 2021. Its request was filed on January 11, 2021 and posted on the WTO website on January 14. See PANAMA – MEASURES CONCERNING THE IMPORTATION OF CERTAIN PRODUCTS FROM COSTA RICA, REQUEST FOR CONSULTATIONS BY COSTA RICA, WT/DS599/1, G/AG/GEN/179, G/SPS/GEN/1873, G/L/1383 (14 January 2021). Costa Rica alleges a host of restraints imposed on various agricultural exports from Costa Rica including on “(i) strawberries; (ii) milk
products; beef; pork; processed poultry meat; cured beef, pork and poultry products (including ham, sausages, mortadella, bacon, chorizo made of pork, chicken and turkey, pâté, pepperoni, salami, legs, ribs, loin of pork, roast beef and beef loin); prepared beef, pork and chicken, chicken and turkey breast, pork rind and dry chorizo; and fish food; (iii) pineapples; and (iv) plantains and bananas.” (Page 1).
Costa Rica’s request for consultations reviews the lengthy efforts at communicating with Panama and the apparent failure of Panama to respond or to provide inspections of facilities in some cases. Costa Rica has been seeking resolution with Panama over the last two years without results. Costa Rica has raised some of the issues in the Committee on Agriculture during 2020. See WTO Committee on Agriculture, SUMMARY REPORT OF THE MEETING HELD ON 28 JULY 2020, NOTE BY THE SECRETARIAT, G/AG/R/95 (19 October 2020)(“The Committee adopted the agenda with the following additions: • Under Part 1.A: The Review Process, matters relevant to the implementation of Commitments under the reform programme raised under Article 18.6 of the Agreement on Agriculture: o Costa Rica raised matters relating to non-tariff barriers to agricultural trade during the COVID-19 pandemic by Panama”). The question from Costa Rica and Panama’s limited response are embedded below.View-Question-Answer
Indeed press articles from the summer of 2020 reviewed the growing trade concerns that Costa Rica had with Panama’s restrictions on Costa Rica’s exports of agricultural products. See, e.g., MENAFN, Costa Rica protests Panama trade blockade to World body, 8/7/2020, https://menafn.com/1100601315/Costa-Rica-protests-Panama-trade-blockade-to-World-body (“A growing trade dispute between Costa Rica and Panama has landed on the world stage as Costa Rica notified the Agriculture Committee of the World Trade Organization (WTO) that Panama has blocked the entry of Costa Rican products of animal origin to the Panamanian market for over three months. In a statement, issued on Thursday, August 6, the Minister ofAgriculture and Livestock, Renato Alvarado Rivera, and the Minister of Foreign Trade, Dyalá Jiménez Figueres, said that the blockade constitutes ‘a serious commercial problem between both countries.'”); CentralAmericaData.com, Trade Dispute Between Panama and Costa Rica, August 7, 2020, https://www.centralamericadata.com/en/article/main/Trade_Dispute_Between_Panama_and_Costa_Rica.
The bulk of the alleged violations by Panama are to obligations under the Agreement on the Application of Sanitary and Phytosanitary Measures (“SPS Agreement”), with GATT 1994 Article violations (e.g., failure to provide most favored nation access) alleged as well. The request for consultations is embedded below.599-1
Costa Rica will have a long road (likely measured in years) in pursuing its dispute with Panama and at present, has no second stage dispute settlement option. While Costa Rica has joined the Multi-Party Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU, Panama is not a signatory. Hence, absent agreement on how to proceed after a panel report, Panama could file an appeal which could not be heard until such time as there is a resolution to the Appellate Body impasse.
The challenge Costa Rica is having with Panama on restraints based on claims of SPS problems has become increasingly common. For example, while most observers perceive that the wide range of import restrictions by China on goods from Australia flow from China’s unhappiness with Australia’s positions on unrelated matters, China has imposed restrictions often claiming SPS or other problems. See, e.g., 9news, Aussie cherries labelled ‘inferior’ by China, growers worried, January 14, 2021, https://www.9news.com.au/national/china-trade-dispute-cherry-exporters-targeted/9f734bf9-ba2f-4259-bce0-758ff0913cc3. For the more likely reason for Chinese restrictions see my prior post (December 22, 2020, China’s trade war with Australia – unwarranted and at odds with China’s portrayal of itself as a strong supporter of the WTO, https://currentthoughtsontrade.com/2020/12/22/chinas-trade-war-with-australia-unwarranted-and-at-odds-with-chinas-portrayal-of-itself-as-a-strong-supporter-of-the-wto/) and last week’s article (South China Morning Post, China-Australia relations: bans on Australian imports ‘beginning to bite’ as commodity exports fall, 8 January 2021, https://www.scmp.com/economy/china-economy/article/3116808/china-australia-relations-bans-australian-imports-beginning).
The EU’s request for establishment of a panel to address its concerns with export restraints on raw materials from Indonesia
The EU filed its request for establishment of a panel today, January 14, 2021. The European Commission’s Directorate of Trade issued a press release entitled “EU files WTO panel request against illegal export restrictions by Indonesia on raw materials for stainless steel” and the request for establishment of a panel is also available from the same website. Both documents are embedded below.EU-files-WTO-panel-request-against-illegal-export-restrictions-by-Indonesia-on-raw-materials-for-stainless-steel-Trade-European-Commission
The EU request for establishment of a panel raise two issues where Indonesia’s actions are alleged to violate GAT 1994 Article XI:1 which provides, “No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.” The actions of Indonesia from the request are copied below.
“Indonesia has restricted exports of nickel ore to different extents and under different rules since at least 2014. In January 2014 nickel was excluded from the regime on the necessary processing and purification of mining commodities for export, which effectively outlawed exports of nickel ore. From January 2017 to December 2019 exports of nickel ore with a concentration below 1.7% were permitted subject to certain conditions, while those of nickel ore with a higher concentration remained prohibited. Since January 2020 all exports of nickel ore, regardless of its concentration, are banned.” (page 1 of request for establishment of a panel)
“Indonesia applies domestic processing requirements with regard to certain raw materials, notably nickel ore and iron ore, prior to them being exported. Domestic processing requirements oblige mining companies to enhance the value of the relevant raw materials through the conduct of certain processing and/or purification operations in Indonesia before exporting them.” (page 2)
While the EU is a signatory to the Multi-Party Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU but Indonesia is not. Should the EU be successful in its dispute with Indonesia at the panel stage, Indonesia could take an appeal to the Appellate Body which at least at present could not hear it. The EU would likely retaliate against Indonesia if an appeal were pursued where the Appellate Body is not functioning.
It is not surprising that new requests for consultations and new requests for the establishment of a panel continue despite the current inoperability of the second stage dispute settlement (the Appellate Body). As panels have been taking a long time in rendering panel reports, it is possible that reform of the Appellate Body will be accomplished before either the Costa Rica case against Panama or the EU case against Indonesia get to a panel decision. It is also obviously the case that the Dispute Settlement Understanding encourages parties to disputes to resolve them at any time, so neither case may reach a point where an appeal is considered. Alternatively, the parties could agree to not appeal from any panel report or otherwise find a mutually agreeable solution without appeal. However, if either or both cases get to a stage where an appeal is taken, either the case will sit awaiting the return of a functioning Appellate Body or the winning party may opt to take unilateral action and retaliate even though not authorized by WTO DSU provisions.
The following from the WTO webpage on Dispute Settlement, Appellate Body, provides a list of disputes where appeals have been taken but the Appellate Body is not in a position to resolve at the present time. The list and note are copied below (but don’t contain quote marks). There are presently 16 disputes where appeals have been filed where the Appellate Body is not currently working the appeals.
Current Notified Appeals (1)
- 17 December 2020: Notification of Appeal by Indonesia in DS484: Indonesia — Measures Concerning the Importation of Chicken Meat and Chicken Products (Article 21.5 — Brazil) (WT/DS484/25)
- 26 October 2020: Notification of Appeal by United States in DS543: United States — Tariff Measures on Certain Goods from China (WT/DS543/10)
- 28 September 2020: Notification of Appeal by United States in DS533: United States — Countervailing Measures on Softwood Lumber from Canada (WT/DS533/5)
- 28 August 2020: Notification of Appeal by the European Union in DS494: European Union — Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia (Second Complaint) (WT/DS494/7)
- 28 July 2020: Notification of Appeal by Saudi Arabia in DS567: Saudi Arabia — Measures Concerning the Protection of Intellectual Property Rights (WT/DS567/7)
- 18 December 2019: Notification of Appeal by the United States in DS436: United States — Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India (Article 21.5 — India) (WT/DS436/21)
- 6 December 2019: Notification of Appeal by the European Union in DS316: EC and certain member States — Large Civil Aircraft (Article 21.5 — EU) (WT/DS316/43)
- 19 November 2019: Notification of Appeal by India in DS541: India — Export Measures (WT/DS541/7)
- 9 September 2019: Notification of Appeal by Thailand in DS371: Thailand — Customs and Fiscal Measures on Cigarettes from the Philippines (Article 21.5 — Philippines II) (WT/DS371/30)
- 15 August 2019: Notification of Appeal by the United States in DS510: United States — Certain Measures Relating to the Renewable Energy Sector (WT/DS510/5)
- 4 June 2019: Notification of Appeal by Canada in DS534: United States — Anti-Dumping Measures Applying Differential Pricing Methodology to Softwood Lumber from Canada (WT/DS534/5)
- 25 January 2019: Notification of Appeal by the United States in DS523: United States — Countervailing Duty Measures on Certain Pipe and Tube Products from Turkey (WT/DS523/5)
- 9 January 2019: Notification of Appeal by Thailand in DS371: Thailand — Customs and Fiscal Measures on Cigarettes from the Philippines (Article 21.5 — Philippines) (WT/DS371/27)
- 14 December 2018: Notification of Appeal by India in DS518: India — Certain Measures on Imports of Iron and Steel Products (WT/DS518/8)
- 20 November 2018: Notification of Appeal by Panama in DS461: Colombia — Measures Relating to the Importation of Textiles, Apparel and Footwear (Article 21.5 — Colombia)(Article 21.5 — Panama) (WT/DS461/28)
- 21 September 2018: Notification of Appeal by the European Union in DS476: European Union and its member States — Certain measures Relating to the Energy Sector (WT/DS476/6)
- This refers to current cases in which notifications of appeal have been made. As indicated in the opening paragraphs, at the current time the Appellate Body is unable to review any of these notified appeals given the ongoing vacancies. Back to text