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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research SErvice (CRS)

WTO Dispute Settlement: Status of U.S. Compliance in Pending Cases

Jeanne J. Grimmett, Legislative Attorney

March 11, 2011

http://www.opencrs.com/document/RL32014/2011-03-11/download/1005/

[full-text, 83 pages]

Summary

Although the United States has complied with adverse rulings in many past World Trade

Organization (WTO) disputes, there are currently 11 cases in which rulings have not yet been

implemented or the United States has taken action and the dispute has not been fully resolved.

Under WTO dispute settlement rules, a WTO Member will generally be given a reasonable period

of time to comply with an adverse WTO decision. While the Member is expected to remove the

offending measure by the end of this period, compensation and temporary retaliation are available

if the Member has not acted or taken sufficient action by this time. Either disputing party may

request a compliance panel if there is disagreement over whether a Member has complied.

Remaining unsettled are long-standing disputes with the European Union (EU) regarding a music

copyright statute (DS160) and a statutory trademark provision affecting property confiscated by

Cuba (DS176), as well as a dispute with Japan over a provision of U.S. antidumping law

(DS184). The Continued Dumping and Subsidy Offset Act of 2000 (“Byrd Amendment”), which

was held WTO-inconsistent in January 2003 and repealed effective October 2005, remains the

target of sanctions by complainants EU and Japan due to continued payments to U.S. firms

authorized under the repeal legislation (P.L. 109-171) (DS217/DS234). Congress placed limits on

funds that are available for these distributions in December 2010 (P.L. 111-291, § 822). In

addition, the United States and Antigua have been consulting on the resolution of outstanding

issues in Antigua’s challenge of U.S. online gambling restrictions (DS285). Compensation

agreements entered into by the United States with various WTO Members in exchange for the

withdrawal by the United States of its WTO gambling commitments, an action taken by the

United States to resolve the case, will not enter into effect until issues with Antigua are resolved.

Congress repealed a WTO-inconsistent cotton program at issue in Brazil’s 2002 complaint over

U.S. cotton subsidies in P.L. 109-171, but other programs were also successfully challenged and

the United States was later found not to have fully complied (DS267). The United States since

made statutory and administrative changes affecting the export credit guarantee program faulted

in the case. While Brazil obtained authorization from the WTO to retaliate in the case, the two

countries entered into a preliminary agreement in April 2010 that forestalled the imposition of

sanctions and signed a framework agreement in June 2010 aimed at permanently resolving the

dispute. The latter includes Brazil’s pledge not to impose sanctions during the life of the

agreement and contemplates possible legislative resolution of the dispute in the 2012 farm bill.

Brazil had earlier announced that it was entitled to impose $829.3 million in annual retaliation,

$591 million of which would consist of import surcharges on U.S. goods.

Five pending cases involve the U.S. practice of “zeroing,” under which the Department of

Commerce (DOC), in calculating dumping margins in antidumping (AD) proceedings, disregards

non-dumped sales. The U.S. practice was successfully challenged by the EU (DS294/DS350),

Japan (DS322), Mexico (DS344), and South Korea (DS402), resulting in broad WTO prohibitions

on U.S. use of the practice. The United States took administrative action to resolve one aspect of

DS294 by abandoning zeroing in original AD investigations as of 2007. It has yet to fully comply,

however, either in this case or in DS350, DS322, or DS344. While the EU and Japan requested

the WTO to authorize sanctions, each agreed to suspend U.S.-requested arbitration of their

proposals in 2010 on the understanding that the United States would resolve outstanding issues in

a timely fashion. To this end, DOC in December 2010 proposed to eliminate the use of zeroing in

later stages of U.S. AD proceedings. A compliance panel proceeding is currently under way in the

dispute with Mexico (DS344). An adverse panel report was adopted in Korea’s challenge

(DS402) on February 24, 2011.

Contents

WTO Dispute Settlement Procedures ..........................................................................................1

Uruguay Round Agreements Act (URAA): Statutory Requirements for Implementing WTO Decisions ...........................4

Section 102: Domestic Legal Effect of WTO Decisions .........................................................4

Federal Law....................................................................................................................4

State Law........................................................................................................................5

Preclusion of Private Remedies .......................................................................................6

Domestic Implementation of WTO Decisions Involving Administrative Action .....................7

Section 123: Regulatory Action Generally.......................................................................7

Section 129: Agency Determinations in Trade Remedy Proceedings ................................8

Judicial Responses ..............................................................................................................12

Pending Cases Involving Legislative Action..............................................................................14

Section 110(5)(B) of the Copyright Act (Music Copyrights)(DS160) ...................................15

Recent Developments....................................................................................................16

Section 211 of the Omnibus Appropriations Act of 1998 (Trademark Exclusion Involving Property Confiscated by Cuba)(DS176)...............17

Recent Developments....................................................................................................17

Antidumping Measures on Hot-Rolled Steel Products from Japan (DS184) .........................18

Recent Developments....................................................................................................21

Continued Dumping and Subsidy Offset Act (DS217/DS234)..............................................22

Recent Developments....................................................................................................25

Subsidies on Upland Cotton (DS267) ..................................................................................26

Recent Developments....................................................................................................39

Measures Affecting Cross-Border Supply of Gambling and Betting Services (DS285).........41

Recent Developments....................................................................................................49

Pending Cases Involving Administrative Action ........................................................................50

Background: “Zeroing” in Antidumping Proceedings ..........................................................51

U.S. Use of Zeroing ......................................................................................................51

Challenges to the U.S. Use of Zeroing in the WTO........................................................56

Laws, Regulations, and Methodology for Calculating Dumping Margins (“Zeroing”)

(DS294)..........................................................................................................................59

Recent Developments....................................................................................................67

Measures Relating to Zeroing and Sunset Reviews (DS322)................................................68

Recent Developments....................................................................................................74

Final Anti-Dumping Measures on Stainless Steel from Mexico (DS344)..............................74

Recent Developments....................................................................................................76

Continued Existence and Application of Zeroing Methodology (DS350) .............................77

Recent Developments....................................................................................................78

Use of Zeroing in Anti-Dumping Measures Involving Products from Korea (DS402) ..........79

Contacts

Author Contact Information ......................................................................................................80

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
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