7:42 AM Oct 28, 1993

MORE DISPUTES AT GATT, LESS SETTLED

Geneva Oct 27 (Chakravarthi Raghavan) -- More and more trade disputes are coming up before the General Agreement, but less and less are getting resolved -- with parties holding up adoption of panel rulings or their implementation, the GATT Council was advised Wednesday.

Under current procedures, references of disputes (arising out of the General Agreement or some of its codes) to a GATT panel, is more or less automatic, but their acceptance and adoption, in the Council or in the various committees administering the codes, need a consensus and frequently remain blocked by the losing side.

The Council was hearing a report from the GATT Director-General, Peter Sutherland, on the status of work in panels and implementation of panel reports.

With Sutherland away on a trip to India, a statement by him was read to the Council by Deputy Director-General Anwar Hoda.

In his statement, Sutherland said that contracting parties could only be expected to negotiate and accept new obligations only to the extent that negotiating partners observe existing obligations.

The report showed that during the year (from September 1992), requests for consultations and conciliation had gone up from 11 in the previous period to 22, shared equally between requests under the General Agreement and under the subsidies and antidumping codes.

Panels named remained at same level of eight.

Of 28 disputes (old and new) at the panel stage, reports of panels have been circulated in 14 cases, but only one report (that relating to Korean levy of anti-dumping duties on imports of polyacetal resins from the US) was allowed to be adopted. The rest of the panel reports remain pending.

Of the panel reports adopted, five remain to be implemented, the countries concerned having tied up their implementation to the outcome of the Uruguay Round.

Several of the panel reports have come up repeatedly before the GATT bodies concerned, but their adoption has been blocked. Some of them go back several years.

A Swedish complaint against US over antidumping duties on stainless steel pipes, with a request for a panel, raised before the AD code committee in 1988 and with panel ruling in August 1990, has come up before that committee eight times and all eight times the US has blocked adoption.

An EC complaint before the subsidies code committee, against countervailing duty by Canada, raised in Oct 1986 and with panel ruling in Oct 1987, has been blocked, having figured in the subsidies code committee meetings 14 times.

More ancient are US complaints against the EC before the subsidies code committee over subsidies on exports of wheat flour and another on subsidies for exports of pasta products. The first dispute was raised December 1981 with a panel ruling in 1983. The second dispute was raised in April 1982 and the panel ruled on 19 May 1983. But the adoption of these have been blocked by the EC since April 1986, figuring on the agenda 12 times.

During Council discussions on monitoring and implementation of panel reports, Canada raised the problem of implementation of the panel ruling it one against the US on state and local authority measures over sale of alcoholic beverages and beer.

The US has said that it has been trying to get the state and local level authorities to legislate and comply with the ruling.

Canada said that it was 21 months since the ruling was adopted, and the US was still to comply. Only one of the 38 states involved had passed the measure to comply. Most of the state legislatures had also adjourned which meant that there will be no compliance till next year at the earliest.

The Council earlier herd a request from Costa Rica (on behalf of the Latin American banana exporters) for the adoption of the panel report against the EC banana regime that prevailed till July 1.

A new panel has been set up over the new regime, but its report is not expected before the end of the year.

The panel on the old regime had ruled against the EC in July 1993 (both on the quota system in some of its member-States and the preferential margin for tariffs in the EC). But the adoption of the report has remained blocked in the GATT Council since then, with the European Community against whom the complaint was lodged and a number of ACP countries governed by the Lome accords with EC (and enjoying preferences on the EC markets) blocking the adoption of the report.

On Wednesday, the EC referred to its position set out at the July Council meeting, opposing adoption, and stressed that nothing had changed since then. The EC had argued that the regime had been replaced by a new one and the EC could not accept the findings of the panel that the tariff preferences granted to the ACP-Lome countries was illegal in GATT.

The panel had said it violated Art I (most-favoured-nation) of the GATT, and that the EC must seek a waiver if it wants to continue such preferences. The EC had taken the position it was a free trade agreement, and thus not GATT-illegal.

Jamaica, the spokesman of the ACP and caribbean banana exporters, said that the ACP had clearly outlined their opposition to the panel's ruling and suggested that the item itself should be taken off the agenda.

The US said that the legal findings of the panel had been well-argued and it was difficult to understand why the EC failed to agree to the adoption since it involved trade practices which had been terminated and there was no direct commercial impact. The panel's conclusions and recommendations on the preferences should have been accepted.

Argentina, Brazil, Japan, Peru, Philippines (for the Asean) and Mexico supported the adoption of the report.

St. Lucia and St. Vincent and the Grenadines, two of the Caribbean banana exporters supported the Jamaican position and opposed adoption.

The issue will remain on the GATT agenda.

Other disputes relating to implementation of panel reports included one relating to Japan's implementation of a panel ruling of 1988 on imports agricultural products in 12 sectors. While Japan had accepted and implemented the ruling, with a phased programme of removing of restrictions on most of the items complained of, it is still maintaining restrictions on dairy products and starch. Japan has tied its implementation of these to the outcome of the Uruguay Round.

Australia, supported by New Zealand, raised this issue, with Japan repeating its position that the problem would be resolved to mutual satisfaction in the context of the Uruguay Round.