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Appellate Body: Annual Report for 2018

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Appellate Body: Annual Report for 2018 ANNUAL REPORT FOR 2018 APPELLATE BODY March 2019 ANNUAL REPORT The Appellate Body welcomes comments and inquiries regarding this Annual Report at the following address: Appellate Body Secretariat World Trade Orgainzation Rue de Lausanne 154 CH – 1211 Geneva 2, Switzerland E-mail: [email protected] www.wto.org/appellatebody Photo credits: WTO New building – © WTO/Brigida González Brazil room – © WTO/Jessica Genoud ANNUAL REPORT FOR 2018 APPELLATE BODY March 2019 APPELLATE BODY MEMBERS: 2018 From left to right: Mr Shree Baboo Chekitan Servansing, Ms Hong Zhao, Mr Ujal Singh Bhatia, Mr Thomas Graham. CONTENTS CONTENTS FOREWORD 5 1. INTRODUCTION 7 2. COMPOSITION OF THE APPELLATE BODY 11 3. APPEALS 13 3.1 Appellate Body Report, Russia – Anti-Dumping Duties on Light Commercial Vehicles from Germany and Italy, WT/DS479/AB/R 15 3.2 Appellate Body Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft – Recourse to Article 21.5 of the DSU by the United States, WT/DS316/AB/RW 26 3.3 Appellate Body Report, European Union – Countervailing Measures on Certain Polyethylene Terephthalate from Pakistan, WT/DS486/AB/R 58 3.4 Appellate Body Report, Indonesia – Safeguard on Certain Iron or Steel Products, WT/DS490/AB/R, WT/DS496/AB/R 66 3.5 Appellate Body Reports, Brazil – Certain Measures Concerning Taxation and Charges, WT/DS472/AB/R, WT/DS497/AB/R 70 3.6 Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products – Recourse to Article 21.5 of the DSU by the United States / United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products – Second Recourse to Article 21.5 of the DSU by Mexico, WT/DS381/AB/RW/USA, WT/DS381/AB/RW2 97 4. PARTICIPANTS AND THIRD PARTICIPANTS IN APPEALS 116 5. PROCEDURAL ISSUES ARISING IN APPEALS 117 6. ARBITRATIONS UNDER ARTICLE 21.3(C) OF THE DSU 122 7. OTHER ACTIVITIES 126 Annex 1 Farewell Speech of Appellate Body Member Ricardo Ramírez-Hernández on 28 May 2018 128 Annex 2 11th Annual Update on WTO Dispute Settlement – Speech by Appellate Body Chair on 3 May 2018 133 Annex 3 The Legitimacy of the WTO Appellate Body – Speech by Appellate Body Chair on 30 May 2018 136 Annex 4 Launch of the Appellate Body's Annual Report for 2017 – Speech by Appellate Body Chair on 22 June 2018 142 Annex 5 Members of the Appellate Body 148 Annex 6 Former Appellate Body Members and Chairpersons 151 Annex 7 Appeals Filed: 1996-2018 153 Annex 8 Percentage of Panel Reports Appealed by Year of Circulation: 1996-2018 155 Annex 9 WTO Agreements Addressed in Appellate Body Reports Circulated: 1996-2018 157 Annex 10 Participants and Third Participants in Appeals: 1996-2018 159 ANNUAL REPORT FOR 2018 APPELLATE BODY 1 WTO ABBREVIATIONS USED IN THIS ANNUAL REPORT Abbreviation Description ACP African Caribbean Pacific AIDCP Agreement on the International Dolphin Conservation Program BCI business confidential information CFR Code of Federal Regulations COFINS Contribution to Social Security Financing WTO ABBREVIATIONS IN THIS ANNUAL USED REPORT DDSR Digital Dispute Settlement Registry Digital Inclusion programme programme for Digital Inclusion DIMD Department for Internal Market Defence of the EEC DPCIA Dolphin Protection Consumer Information Act DSB Dispute Settlement Body DSU Understanding on Rules and Procedures Governing the Settlement of Disputes EADS European Aeronautic Defence and Space Company N.V. ECAs economic complementation agreements EEC Eurasian Economic Commission ELSA European Law Students' Association Enabling Clause Decision on Differential and More Favourable Treatment, Reciprocity, and Fuller Participation of Developing Countries, Decision of 28 November 1979 ETP Eastern Tropical Pacific GATT 1994 General Agreement on Tariffs and Trade 1994 GSM Global System for Mobile Communications Hogarth ruling United States Court of Appeals for the Ninth Circuit, Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007); United States Court of Appeals for the Ninth Circuit, Earth Island Institute v. Hogarth, 494 F.3d 1123 (9th Cir. 2007) HSBI highly sensitive business information ICT information and communication technology ICT programmes Informatics, PADIS, PATVD, and Digital Inclusion programmes INMETRO National Institute of Metrology, Quality and Technology INOVAR-AUTO programme programme of Incentive to the Technological Innovation and Densification of the Automotive Supply Chain IPI tax Tax on Industrialised Products 2 ANNUAL REPORT FOR 2018 APPELLATE BODY WTO ABBREVIATIONS IN THIS ANNUAL USED REPORT Abbreviation Description IPR intellectual property rights IUU illegal, unreported, and unregulated LA/MSF “Launch Aid” or “Member State Financing” LCA large civil aircraft LCVs light commercial vehicles LTF-EOP Long Term Financing of Export-Oriented Projects MBS Manufacturing Bond Scheme NEPAD New Partnership for Africa's Development NMFS National Marine Fisheries Service PADIS programme programme of Incentives for the Semiconductors Sector PATVD programme programme of Support for the Technological Development of the Industry of Digital TV Equipment PBR Potential Biological Removal PEC Predominantly Exporting Companies PEC programme regime for Predominantly Exporting Companies PET polyethylene terephthalate PPBs Basic Productive Processes R&D research and development RECAP programme Special Regime for the Purchase of Capital Goods for Exporting Enterprises Rules of Conduct Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes S&D special and differential SCM Agreement Agreement on Subsidies and Countervailing Measures SRP Single Rate Presumption TBT Agreement Agreement on Technical Barriers to Trade TRIMs Agreement Agreement on Trade-Related Investment Measures TTFs Tuna Tracking Forms URAA Uruguay Round Agreements Act USDOC United States Department of Commerce VLA very large aircraft W-T weighted-average to transaction Working Procedures Working Procedures for Appellate Review WTO World Trade Organization WTO Agreement Marrakesh Agreement Establishing the World Trade Organization ANNUAL REPORT FOR 2018 APPELLATE BODY 3 FOREWORD FOREWORD For the Appellate Body, 2018 was an unusual year, reflecting continuity as well as potentially disruptive challenges. The Appellate Body's docket continued to grow with increasingly complex appeals, while its composition was further reduced from four to three members. In some respects, 2018 represented business as usual. Throughout the year, the Appellate Body was engaged in appellate proceedings and circulated nine Appellate Body reports concerning six matters1, including the Appellate Body report in EC and certain member States – Large Civil Aircraft (Article 21.5 – US). The matters addressed by these reports included those relating to the Anti-Dumping Agreement, the SCM Agreement, the GATT 1994, the TRIMS Agreement, the TBT Agreement, and the DSU. These disputes dealt with sensitive issues spanning prohibited and actionable subsidies, animal welfare, domestic tax regimes, and unfair trade. The exceptionally large appeal in US – Large Civil Aircraft (2nd complaint) (Article 21.5 – EU), filed in 2017, continued to occupy a significant portion of the resources of the Appellate Body and its Secretariat in 2018. The Secretariat also assisted an Arbitrator in issuing his award concerning the reasonable period of time for implementation of the panel and Appellate Body reports in US – Anti-Dumping Methodologies (China) (Article 21.3(c)). Additionally, 12 panel reports concerning 11 matters were appealed in 2018.2 In sum, the heavy workload of the Appellate Body shows no signs of abating in the near term. These figures reflect the rich legacy of the Appellate Body and the value it provides to WTO Members. In resolving disputes, the Appellate Body has endeavoured to do justice to the founding principles of the DSU by clarifying the existing provisions of the covered agreements in accordance with customary rules of interpretation of public international law. Moreover, by emphasizing consistency across its reports, the Appellate Body has contributed to the security and predictability of the multilateral trading system. The Appellate Body's success as an impartial arbiter is not only evidenced by the sheer number of disputes brought before it, but also by the high rate of compliance with the recommendations and rulings of the DSB. While losing parties and sometimes other WTO Members have criticized individual rulings, to date, no WTO Member has explicitly chosen not to implement a ruling in a dispute that it has lost. These indicators suggest WTO Members' commitment to the appellate system as a key component of a robust and effective dispute settlement mechanism. At the same time, they stand in stark contrast to the institutional crisis we are currently facing. As of 31 December 2018, there were four vacant Appellate Body seats. Despite the numerous DSB meetings held from February 2017 to date, including the discussion of a joint proposal put forward by more than 70 Members, Members remain unable to reach a consensus to initiate the selection processes for the appointment of new Appellate Body members. Starting in 2017 and continuing through 2018, WTO Members have debated several procedural and substantive issues concerning the functioning of the Appellate Body. For example, WTO Members have discussed the increase in the number of Appellate Body reports that are issued after the 90-day period prescribed
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