7:15 AM Apr 11, 1997

DSB SENDS TWO DISPUTES TO PANELS

Geneva 10 Apr (TWN) -- The World Trade Organization's Dispute Settlement Body referred two trade disputes, one relating to US restrictions on shrimp imports and the other on Australian restrictions on salmon, to panels.

The import restrictions on shrimps, brought up on a complaint by India, was referred to the same panel that is adjudicating similar complaints from Thailand, Malaysia and Pakistan.

The request for joint consultations with the US on these imports, purportedly to save sea turtles, was made in October 1996 by India, Malaysia, Thailand and Pakistan. These failed, and thereupon requests for panel references and rulings were made.

The request on 22 January from Thailand and Malaysia for a panel (initially blocked by the US), came up before the DSB for the second time on 25 February as also the subsequent request for panel from Pakistan (which came up for the first time). Both were accepted and the dispute referred to a single panel.

A subsequent Indian request for a panel, when it came up for the first time, was blocked by the US, but the DSB set up the panel at Thursday's meeting when it came up again. The US however sought the dispute to be referred to the same panel, and India agreed, subject to the same terms of reference.

Besides Australia, Colombia, EC, Guatemala, Hong Kong, Japan, Mexico, Nigeria, the Philippines, Singapore and Sri Lanka (all of whom reserved their third party rights at the time of the reference of the Thai-Malaysian complaint), Venezuela reserved its own rights.

Countries reserving third party rights are entitled to present their views to the panel.

The Canadian request for panel on Australian restrictions on salmon imports, came up before the DSB for the second time, and that too was referred to another panel.

Australia however said it wanted to take advantage of the 20-day period under the Dispute Settlement Understanding to consult over the terms of reference, to continue bilateral efforts at resolving the dispute.

Canada, which had raised the dispute and sought consultations in October 1996, noted that it had demonstrated a great deal of patience, but saw no possibility of resolving the dispute bilaterally.

Both the US and EU reserved their third party rights.

In the long-running dispute between the US and EU over the EU tariffs based on reference prices on imports of grains (wheat, rye, barley, corn,sorghum and rice), the US withdrew its original request for panel, and presented a new request on the same issue.

The US complaint dates back to July 1995, but the consultations held in September 1995 produced no results. But the US did not pursue with a request for a panel, while the two sides continued to talk.

Finally, on 13 February the US sought a panel. But at the February meeting of the DSB, the EC blocked the reference raising procedural problems over a panel reference on the basis of an old consultation.

The US thereupon renewed its request for the second time on 27 March, and sought a special meeting of the DSB within 15 days. But on the eve of the meeting it withdrew this request, but without prejudice to its earlier procedural rights arising out of the July consultations, but presented a new request which came up for the first time on Thursday.

This left both trade officials, and the EC somewhat confused. But the US explained that the interpretations placed on its request at the February meeting had prompted the US to withdraw the old request and present a new one in order to preserve its rights.

Both the EC and US said they were still consulting and hoped an accord could be reached. But failing that, the issue is to come up at the 30 April meeting of the DSB.

A report in the Washington-based "Inside US-Trade" (which has the reputation of having an inside track on the USTR's office) said that the US withdrawal of the old request, and presentation of the new request, had been made by the US Trade Representative, without consultations with the Agriculture Department, and is a signal of the administration's intent to take a tough line with the EU on EU tariffs on rice imports.

The report also said that the EU had agreed to implement a tariff refund scheme for rice, to be effective from 15 May, provided the US withdrew its 13 February request for a panel. The second request by the US for a panel, the report said, was aimed at keeping up the pressure on the EU's executive commission, which had reached the accord for refund when the EU's Council of Agriculture Ministers failed to muster a blocking majority against it.

In a statement under other business, the US advised the DSB that in respect of the panel ruling against the US on the complaint of Costa Rica about quotas on imports of underwear, the US measure had expired on 28 March, and said this settled the matter before the DSB.

At the DSB meeting on 20 March, the US had said that it would implement the ruling effective end of April, whereupon Costa Rica asked whether this meant that the US would be extending for a month an GATT-illegal measure that was due to expire on 28 March.

But Costa Rica referred to a letter which the US authorities had sent to the US customs on 26 March asking the customs authorities "to supervise textiles coming from Costa Rica". Expressing concern over what this meant, Costa Rica sought clarifications.

But US delegate, Andrew Schoyer, said the letter should not be interpreted as an extension of the measure (which the panel had held to be GATT-illegal) and that the measure had expired "definitively".

No explanation was given for the "supervision" request.