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U.S. WTO Challenge On EU Moratorium

U.S. WTO Challenge On EU Moratorium

The US government is likely to announce today that they are taking the first steps towards a WTO challenge regarding EU's GMO de facto moratorium. This will happen at a press conference 12:15pm in Washington (18:15 CET) with the US trade representative Robert Zoelich and the US agriculture minister Ann Veneman (see below). Originally the US and industry lobby groups wanted to file the case already this winter, but the administration needed at that time support for the Iraq war. Argentina and Canada (and Egypt) will be co-filing the case with the US.

See ...

Bush administration today to announce filing of dispute case in WTO regarding de facto EU biotech moratorium. U.S. Trade Representative Robert Zoellick and USDA Secretary Ann Veneman today will announce at a news conference that the U.S. will file a case in the World Trade Organization (WTO) against the European Union (EU) over its de facto moratorium on approvals of new biotech products. USDA announced that Zoellick and Veneman will hold a press conference to make "an important announcement concerning agricultural trade" today at 9:30 am CT.

Capitol Hill conference as well. House Speaker J. Dennis Hastert (R-Ill.) released a statement noting that Zoellick and Veneman would appear together at a news conference at the Capitol at 12:15 pm CT. The statement noted there would be a "bipartisan and bicameral press conference regarding [a] WTO challenge of the European Union's discriminatory trade policies."

The US case will be joined by Argentina and Canada as well as by Egypt, which next year will launch free trade negotiations with the United States.

Other countries, including Kenya, are expected to participate in the WTO case filing.

Background: Zoellick in January said he was prepared to bring a WTO case but was blocked by the White House over concern the dispute would hamper U.S. efforts to win European support for the war in Iraq.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) last week met administration officials and demanded a dispute case announcement within two weeks.

EU has already filed a reaction. David Byrne, EU health and consumer safety commissioner, on Monday described the U.S. timing as "eccentric" and said the moratorium would be lifted by the year's end, well before the WTO can rule on the dispute.

Now what? Once a dispute is notified to the WTO an established timetable of 'automatic' steps is set in train. The immediate priority is for disputes to be settled through consultations. If not, then members assembled in the WTO Dispute Settlement Body (DSB) refer a dispute to a panel of experts. Panelists are appointed by agreement between the parties, and by default, by the WTO's Director-General.

A panel's recommendations are automatically adopted unless there is a 'consensus against' adoption by all WTO members who together comprise the Dispute Settlement Body. A first instance panel report may be appealed, but the decision by the second instance Appellate Body is final.

The long-term outcome of the dispute settlement process must be complete restoration of full compliance with WTO rules. However, if a country fails to implement a WTO ruling there are two temporary measures which can be taken. Either the offending member can offer 'compensation' for the harm done to the trade interests of another member or the DSB can authorize a level of retaliatory sanctions. But this rarely happens.

The vast majority of the more than 220 disputes brought to the WTO so far are settled without fanfare or public contention. Since a main aim of WTO dispute settlement is to contain unilateral imposition of trade sanctions, unilateral retaliation by powerful trading entities is subject to multilateral WTO control.

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