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Annual Report 2000
The Annual report of the WTO focuses on the regular activities of the organization the details of its current structure staff and budget. The Annual report is published in the first half of each year.
Korea - Measures Affecting Government Procurement
On 16 February 1999 the US requested consultations with Korea in respect of certain procurement practices of the Korean Airport Construction Authority (KOACA) and other entities concerned with the procurement of airport construction in Korea. The US claimed that such practices were inconsistent with Korea’s obligations under the Agreement on Government Procurement (GPA). These include practices relating to qualification for bidding as a prime contractor domestic partnering and the absence of access to challenge procedures that are in breach of the GPA. The US contended that KOACA and the other entities are within the scope of Korea’s list of central government entities as specified in Annex 1 of Korea’s obligations in Appendix I of the GPA and pursuant to Article I(1) of the GPA apply to the procurement of airport construction.
United States - Anti-Dumping Act of 1916 - Complaint by the European Communities
On 9 June 1988 the European Communities requested consultations with the United States in respect of the alleged failure of the United States to repeal its Anti-Dumping Act of 1916. The European Communities contended that the US Anti-Dumping Act of 1916 is still in force and is applicable to the import and internal sale of any foreign product irrespective of its origin including products originating in countries which are WTO Members. The European Communities also alleged that the 1916 Act exists in the US statute books in parallel with the Tariff Act of 1930 as amended which includes the US implementing legislation of multilateral Anti-Dumping provisions. The European Communities alleged violations of Articles III:4 VI:1 and VI:2 of the GATT 1994 Article XVI:4 of the WTO Agreement and Articles 1 2 3 4 and 5 of the Anti-Dumping Agreement.
Canada - Patent Protection of Pharmaceutical Products
On 19 December 1997 the EC requested consultations with Canada in respect of the alleged lack of protection of inventions by Canada in the area of pharmaceuticals under the relevant provisions of the Canadian implementing legislation in particular the Patent Act. The EC alleged that Canada’s legislation is not compatible with its obligations under the TRIPS Agreement because it does not provide for the full protection of patented pharmaceutical inventions for the entire duration of the term of protection envisaged by Articles 27.1 28 and 33 of the TRIPS Agreement.
United States - Tax Treatment for "Foreign Sales Corporations"
On 18 November 1997 the European Communities requested consultations with the United States in respect of Sections 921-927 of the US Internal Revenue Code and related measures establishing special tax treatment for “Foreign Sales Corporations” (FSC). The European Communities contended that these provisions were inconsistent with the United States' obligations under Articles III:4 and XVI of the GATT 1994 Articles 3.1(a) and (b) of the SCM Agreement and Articles 3 and 8 of the Agreement on Agriculture.
Australia - Measures Affecting Importation of Salmon - Recourse 1
On 5 October 1995 Canada requested consultations with Australia in respect of Australia’s prohibition of imports of salmon from Canada based on a quarantine regulation. Canada alleged that the prohibition is inconsistent with Articles XI and XIII of the GATT 1994 and also inconsistent with the SPS Agreement.
Canada - Certain Measures Affecting the Automotive Industry
On 3 July 1998 Japan requested consultations with Canada in respect of measures being taken by Canada in the automotive industry. Japan contended that under Canadian legislation implementing an automotive products agreement (Auto Pact) between the US and Canada only a limited number of motor vehicle manufacturers are eligible to import vehicles into Canada duty free and to distribute the motor vehicles in Canada at the wholesale and retail distribution levels. Japan further contended that this duty-free treatment is contingent on two requirements: Canadian value-added (CVA) content requirement that applies to both goods and services; and manufacturing and sales requirement. Japan alleges that these measures are inconsistent with Articles I:1 III:4 and XXIV of GATT 1994 Article 2 of the TRIMs Agreement Article 3 of the SCM Agreement and Articles II VI and XVII of GATS.
Mexico - Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States
On 8 May 1998 the US requested consultations with Mexico in respect of an anti-dumping investigation of high-fructose corn syrup (HFCS) grades 42 and 55 from the US conducted by Mexico. The US alleged that on 27 February 1997 the Government of Mexico published a notice initiating this anti-dumping investigation on the basis of an application dated 14 January 1997 from the Mexican National Chamber of Sugar and Alcohol Producers. The US further alleged that on 23 January 1998 Mexico issued a notice of final determination of dumping and injury in that investigation and consequently imposed definitive anti-dumping measures on these imports from the United States. The US contended that the manner in which the application for an anti-dumping investigation was made as well as the manner in which a determination of threat of injury was made is inconsistent with Articles 2 3 4 5 6 7 9 10 and 12 of the Anti-Dumping Agreement.
Australia - Subsidies Provided to Producers and Exporters of Automotive Leather - Recourse 1
On 4 May 1998 the United States requested consultations with Australia in respect of prohibited subsidies allegedly provided to Australian producers and exporters of automotive leather including subsidies provided to Howe and Company Proprietary Ltd. (or any of its affiliated and/or parent companies) which allegedly involve preferential government loans of about $A25 million and non‑commercial terms and grants of about $A30 million. The United States contended that these measures violate the obligations of Australia under Article 3 of the SCM Agreement.
United States - Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom
On 30 June 1998 the EC requested consultations with the US in respect of the alleged imposition of countervailing duties on certain hot-rolled lead and bismuth carbon steel (leaded bars) from the UK. The EC asserted that the US imposed countervailing duties of 1.69 per cent on United Engineering Steels Ltd (UES) for the review period 1 January 1994 to 31 December 1994 and of 2.4 per cent for the review period 1 January 1995 to 20 March 1995 on the basis of subsidies which had been granted to British Steel Corporation (BSC). The EC also contended that the US imposed countervailing duties on British Steel plc (BSplc) / British Steel Engineering Steels LTD (BSES) for the review period 1 January 1996 to 31 December 1996 on the basis of subsidies granted to BSC before its privatization in 1988. The EC alleged that these impositions of countervailing duties constitute a violation of Articles 1.1(b) 10 14 and 19.4 of the Subsidies Agreement.
United States - Sections 301-310 of the Trade Act of 1974
On 25 November 1998 the EC requested consultations with the US in respect of Title III chapter 1 (sections 301-310) of the US Trade Act of 1974 (the Trade Act) as amended and in particular sections 306 and 305 of this Act.
Korea - Definitive Safeguard Measure on Imports of Certain Dairy Products
On 12 August 1997 the EC requested consultations with Korea in respect of a definitive safeguard measure imposed by Korea on imports of certain dairy products. The EC contended that under the provisions of different governmental measures Korea has imposed a safeguard measure in the form of an import quota on imports of certain dairy products. The EC considered that this measure is in violation of Articles 2 4 5 and 12 of the Agreement on Safeguard Measures as well as a violation of Article XIX of GATT 1994.
Argentina - Safeguard Measures on Imports of Footwear
On 10 November 2000 the EC requested consultations with the US concerning the continued application by the United States of countervailing duties on a number of products. In particular the EC claimed that the application of the “same person” methodology by the US and the continued imposition of duties based on it are in breach of Articles 10 19 and 21 of the SCM Agreement because there is no proper determination of a benefit to the producer of the goods under investigation as required by Article 1.1(b) of the SCM Agreement. The EC included in this request for consultations 14 US countervailing duty orders1 where this “same person” methodology was applied. All these cases involve alleged non-recurring subsidies granted to firms prior to a change of ownership.
Chile - Taxes on Alcoholic Beverages
On 4 June 1997 and 15 December 1997 the EC requested consultations with Chile in respect of Chile’s Special Sales Tax on spirits which allegedly imposes a higher tax on imported spirits than on Pisco a locally brewed spirit. The EC’s second request (WT/DS110) takes issue with the modification to the law on taxation on alcoholic beverages passed by Chile to address the concerns of the EC in WT/DS87. The EC contended that this differential treatment of imported spirits violates Article III:2 of GATT 1994.
European Communities - Measures Affecting Butter Products
On 3 May 1995 the US requested consultations with Korea in respect of requirements imposed by Korea on imports from the US which had the effect of restricting imports. The US alleged violations of Articles III and XI of GATT Articles 2 and 5 of the SPS Agreement Article 2 of the TBT Agreement and Article 4 of the Agreement on Agriculture.
Developments in trade policy, 1998-99
Two years ago the “Asian financial crisis” erupted in Thailand spread rapidly to other countries in the region and affected general investor sentiment in those and other developing countries and transition economies notably Russia in mid-1998 and later Brazil. Output and employment contracted sharply in the countries most directly affected in turn adversely affecting trade of their partners and together with steep commodity price declines trade of many other developing countries. In the past such events could have been invoked as a justification for raising import barriers in an attempt to contain the domestic consequences and shift the burden onto trading partners possibly provoking countermeasures and thereby exacerbating the downturn. However this very serious crisis unfolded in the framework of the WTO the strengthened multilateral trading system created by the Uruguay Round Agreements. The system and the good sense of governments helped to keep markets open facilitating adjustment and providing a critical element for recovery from the Asian crisis.
Overview
Last year’s Annual Report was written when the Asian financial crisis was only a year old. There was still considerable concern then about the risk of contagion and deep recession. A year later the situation is more healthy although only the complacent would contest the need for policy vigilance. Important challenges remain and recovery is far from complete. Global GDP growth decelerated sharply from the record expansion in the previous year while trade volume growth was more than halved. For parts of Asia a contraction in output growth also meant that import volume growth turned negative. The economic performance of other regions helped to maintain global output growth at around 2.0 per cent and world export growth at about 4 per cent in 1998. The United States continued a remarkable period of expansion contributing significantly to the global figure. The European Union grew less but above the global average.
World trade developments
Global output and trade growth decelerated sharply in 1998 as imports of Japan and East Asia fell for the first time since 1974 (first oil crisis). All regions and all broad product categories were affected by the slowdown. The share of the developing countries in world trade dipped for the first time in more than a decade. Nearly two thirds of the world’s economies recorded a decrease in their export earnings which was the worst performance observed in the 1990’s. Preliminary indicators point to an arrest of the slowdown of world trade in the first months of 1999 and an acceleration of growth in the second quarter.