Dec 6, 1989


GENEVA, DECEMBER 4 (BY CHAKRAVARTHI RAGHAVAN) The GATT contracting parties at their annual session here Monday evening adopted the report of a GATT panel that ruled against Canada in a case brought by the U.S. over import restrictions on ice-cream and yoghurt.

Canada had restrained these imports on the ground it was necessary to implement its domestic policy of supply management of milk and dairy products, and that this was permitted under the exceptions to the prohibition of quantitative restrictions in article XI: 2 (C) (I).

The panel had ruled against Canada, arguing that ice-cream and yoghurt were not "like domestic products" (milk) under restraint.

In allowing the adoption of the panel ruling, Canada as well as several others expressed reservations over the panel ruling and its interpretations. Canada also made clear that it would not be implementing the panel ruling, pending the conclusion of the Uruguay Round agriculture negotiations.

In a complaint against the U.S., brought by Canada, over countervailing duties imposed by the U.S. against imports of pork from Canada, the contracting parties agreed to the establishment of a panel.

The U.S. also announced at the meeting that congress had at last adopted legislation to implement the panel ruling against the U.S. over the super-fund levy, under which cess was levied on imported and domestic petroleum and products, at different rates, to finance a cleanup of environmental pollution.

The panel held this to be contrary to the national treatment principle of GATT. Adopted three years ago, it has taken the U.S. all this time to comply with the ruling.