8:25 AM Feb 10, 1995

WTO SEIZED OF TWO DISPUTES

Geneva 10 Feb (Chakravarthi Raghavan) -- The Dispute Settlement Body of the World Trade Organization, which held its first meeting Friday, has been seized of two disputes -- one between Singapore and Malaysia and the other between Venezuela and United States.

In the absence of the Chairman of the DSB (Donald Kenyon of Australia), WTO Director-General Peter Sutherland chaired the meeting which was devoted mainly to initial procedural questions, including the roster of dispute settlement panellists, the constitution of the Appellate Body and its staff.

But the DSB took note of the first two disputes that have come up, with a notification by Singapore dated 10 January and that by Venezuela dated 2 February.

In both cases, the complainants, Singapore and Venezuela, have sought consultations with respectively Malaysia and the United States and this had been accepted.

The request for consultation is the first official step in the dispute settlement process, and under the WTO from start to finish it is a semi-automatic process, with built-in time periods.

If no settlement is reached within 60 days of the request for consultation, the complaints can approach and will automatically be entitled to the establishment of a panel to look into their complaint.

In the Singapore case, involving a complaint of import restrictions by Malaysia of polyethylene (PE) and polypropylene (PP), raw materials used for plastics, Singapore has said that Malaysia had imposed the restrictions on 7 April last year and prohibited imports without an import license, and this was contrary to the WTO GATT 1994 Art. X, XI and the Importing Licensing procedures. As a result Singapore's exporters and manufacturers of PE and PP Singapore's exports had been adversely affected. According to figures cited in Singapore by its Trade Ministry, exports had fallen by 44% from April-November 1994 -- from 118,079 metric tonnes to 65,694 metric tonnes. Delegation sources here were unable to provide a value figure on the trade affected.

The Singapore-Malaysian consultations are due to take place on 13-15 February.

In the Venezuelan case, the complaint had been brought forward last year under the GATT 1947, and the process was 'suspended' at Venezuela's request thereafter. It has now been revived under the WTO, where there is automaticity right up to the panel ruling and its adoption. The complaint refers to the US Environment Protection Agency's actions on standards for reformulated and conventional gasoline which, Venezuela has complained, violates Art. 14.1 of the Technical Barriers to Trade Agreement and is discriminatory as between imported and domestic products.

The US has told Venezuela that it was agreeable to the consultations, and Venezuela told the DSB that this was expected over the coming weeks.

Earlier, the DSB put off for further consultations the issue of "observership" at the DSB, with the US calling for 'case-by-case' consideration and not a general decision. Consultations are also to continue on the issue of an ethical code of conduct for panellists and staff servicing a panel -- an idea mooted by the United States. The consultations are being conducted by the New Zealand ambassador and are to be resumed on 20-21 February.

The US said the panellists should be drawn from beyond the usual Geneva diplomats.

The DSB also agreed to constitute the 7-member Standing Appellate Body for Dispute Settlements. The membership is to be approved by the DSB. The WTO D.G., the Chair of the Goods, Services and TRIPs and the WTO General Council are to select and recommend the seven names from out of nominations put forward by governments.

Sutherland outlined a time-table for the process, with nominations from governments to be made by 24 March, for processing, scrutiny and recommendations to the DSB. The Appellate Body it was said should be in place and operational in the second half of the year.

In comments on this, the US, EU, Canada and India among others stressing the need for independent personalities -- with a mixture of persons with legal experience and trade experience. Canada also stressed the need for some flexibility about the time-table.

The US also stressed the requirement for the independence of the Appellate Body secretariat from the WTO secretariat and the secretariat of the WTO should not be involved in the selection process. The members of the Appellate Body and the staff should not have any relationship with a government, and not even be on leave or secondment, the US added.