One of the major achievements of the Uruguay Round of WTO negotiations was to set in place a binding procedure for resolving trade disputes arising between members. WTO members agree not to take unilateral action when they think their rights have been violated. Instead they put their grievance through the WTO dispute settlement system and agree to abide by its rules and findings.
The WTO system deals with all trade disputes arising from any of the agreements contained in the Final Act of the Uruguay Round including agreements on:
The WTO dispute settlement process involves three main stages:
This dispute settlement process takes between 12-18 months (depending on whether or not it goes to appeal) and sometimes longer in more complicated cases.
If a New Zealand business is encountering an obstacle to trade in a particular product, or feels the requirements being set by the importing country are unreasonable, it should raise the issue with the Ministry of Foreign Affairs and Trade.
In assessing whether an action should be taken, the Ministry considers:
The preferred option is to try to resolve the matter bilaterally (by a direct approach to the Government concerned) before going to the WTO. Many small, and a number of large, trade problems have been resolved this way. Only after all other options for resolving the dispute have been exhausted would the Government consider formal proceedings under the WTO.
More information about the WTO dispute settlement system, including detailed information on past and current disputes, can be found on the WTO website [external link].
On 30 August 2013, New Zealand requested WTO dispute settlement consultations with Indonesia regarding its import restrictions on agricultural products.
Following its initiation of a similar WTO dispute earlier this year, the United States also filed a revised consultations request on 30 August to address recent modifications to Indonesia’s measures.
The Indonesian import restrictions consist primarily of quotas and licensing requirements that have significantly affected New Zealand’s trade interests. Since their introduction in 2010, New Zealand beef exports to Indonesia have fallen by 80 per cent by volume and our horticultural exports, especially apples and onions, have also fallen significantly. The total value of lost trade has been valued at $145 million per year. As set out in New Zealand’s request for consultations, these measures appear to be inconsistent with Indonesia’s WTO obligations under the General Agreement on Tariffs and Trade 1994, the Agreement on Agriculture, the Agreement on Import Licensing Procedures, and the Agreement on Preshipment Inspection.
The next step in the WTO dispute settlement process is for consultations to be held between New Zealand, the United States and Indonesia. If consultations are unsuccessful in resolving the issue within 60 days, New Zealand and the United States may request the establishment of the WTO dispute settlement panel.
1 | See also related disputes brought by the United States in which New Zealand has registered its third party interest: WT/DS 465 and WT/DS 455
New Zealand continues to pursue its systemic interests in maintaining WTO disciplines through participation as a third party in a number of current WTO dispute settlement proceedings. To date, New Zealand has reserved its third party rights in over thirty disputes.
In October 2008 Mexico requested consultations regarding the United States’ refusal to allow Mexican tuna to be marketed in the US using domestic “dolphin-safe” labelling. New Zealand has both a systemic and commercial interest in the case; environmental labelling is a growing phenomenon in international trade and New Zealand expects that this case will therefore be an important one for the WTO system.
Mexico filed its request for the establishment of a Panel in March 2009 and the Panel was composed on 14 December 2009. New Zealand lodged it’s third party submission on 28 April 2010. The first Panel hearing was held on 18-20 October 2010. The Panel Report was circulated on 15 September 2011. The United States submitted their appeal on 20 January 2012 with Mexico submitting their cross appeal on 25 January 2012. New Zealand also participated in the appeal phase of the dispute, as a third party. The Appellate Bodyís report was circulated on 16 May 2012, and the United Statesí reasonable period of time for implementation expired on 13 July 2013, and Mexico has requested the establishment of a compliance panel. top of page
In late 2009, Canada and Mexico requested the establishment of a WTO panel to settle a dispute over United States’ measures requiring country of origin labelling in respect of certain products, including meat products, for sale in the US. Canada and Mexico argue that the measures at issue are inconsistent with US obligations under the GATT, the Technical Barriers to Trade Agreement (TBT) and the Agreement on Rules of Origin, including: national treatment; the requirement that technical regulations not create unnecessary obstacles to trade; the use of existing international standards as the basis for regulations; and the administration of laws and regulations in an uniform, impartial and reasonable manner.
As an export economy faced with an increasing number of mandatory and voluntary country of origin labelling measures in its export markets, New Zealand has a systemic interest in the development of WTO jurisprudence around the consistency of CoOL measures with the WTO agreements.
On 19 November 2009, the DSB established a single panel to examine Canada and Mexico’s complaints, pursuant to Article 9.1 of the DSU. The panel was composed on 10 May 2010. New Zealand lodged its third party submission on 18 August 2010. The Panel hearing took place from 14 - 16 September 2010 in Geneva. New Zealand delivered an oral statement at the session for third parties on 15 September. The Panel Report was circulated on 18 November 2011. The United States, Canada and Mexico all appealed the Panel Report, and the Appellate Body’s report was circulated to Members on 29 June 2012 and adopted by the DSB on 23 July 2012. New Zealand did not make 3rd party submissions in the appeal phase.
On 21 August 2012, the United States informed the DSB that it intended to implement the DSB recommendations and rulings in a manner that respects its WTO obligations and that they would need a reasonable period of time to do so. The reasonable period of time for implementation was determined through arbitration under Article 21.3 (c) of the Dispute Settlement Understanding, which was circulated to Members on 4 December 2012. The reasonable period of time expired on 24 May 2013, on which day the United States announced that the USDA had issued a final rule that made certain changes to the COOL labelling requirements that had been found to be inconsistent with Article 2.1 of the TBT Agreement. The United States considered that the final rule had brought it into compliance with the DSB recommendations and rulings. Canada and Mexico did not agree that the changes had brought the United States into full compliance and requested the establishment of a compliance panel which was established on 25 September 2013.
New Zealand reserved its third party rights for the compliance phase of this dispute on 25 September.
On 13 March 2012, Ukraine requested consultations with Australia concerning certain Australian laws and regulations that impose trademark restrictions and other plain packaging requirements on tobacco products and packaging. Ukraine challenged Australia’s measures under the TRIPS Agreement, the TBT Agreement and the GATT.
Subsequently, additional cases have been brought against the same Australian measures by Honduras, the Dominican Republic, Cuba and, most recently, Indonesia, which filed its request for consultations on 20 September 2013.
Consultations have been held separately for each dispute. At its meeting on 25 September 2012, the DSB established a Panel in the case brought by the Ukraine.
New Zealand has reserved its third party rights in each of the five disputes.
New Zealand has reserved its third party rights in over thirty disputes to date. Information on New Zealand’s involvement in WTO dispute settlement can be found here.
Examples of third party submissions made by New Zealand in previous disputes are available below:
United States — Final Dumping Determination on Softwood Lumber from Canada (WT/DS 264)
United States – Subsidies on Upland Cotton (WT/DS 267)