Panel Created in Dominican Republic Safeguard Case

10 February 2011

At a special meeting on Monday, the WTO Dispute Settlement Body established a panel to determine the legality of safeguard measures imposed by the Dominican Republic on imports of plastic bags and tubular fabric from Costa Rica, Guatemala, Honduras and El Salvador.

The Dominican Republic had blocked the complainants' initial request for the creation of a panel, but under WTO rules, targets of a complaint can only block a panel once.  The case is notable in part because it represents a growing trend in disputes involving developing countries.  (For further details on the case, click here.)

The DSB meeting also heard requests from China and the US to extend the deadline for an appeal of the panel ruling that upheld safeguard tariffs levied by Washington on Chinese tyres.  The US began imposing the duties of up to 35 percent on Chinese car and truck tyre imports in September 2009, following a petition by the United Steelworkers union.

The duties, worth US$ 1.8 billion, are based on a controversial safeguard clause in China's terms of accession to the WTO.  The ‘transitional product-specific safeguard mechanism' was designed to help WTO members shield domestic industries against market disruptions and import surges resulting from Chinese imports.  The United Steelworkers had asked for the duties to be imposed, arguing that a threefold increase in Chinese tyre imports between 2001 and 2004 had cost 14 percent of US workers in the industry their jobs.

China originally announced its intention to appeal the case after the panel released its decision on 13 December in favor of the US. However, at last Monday's meeting, both parties requested to extend the 60 day time limit for appeals, which would have lapsed on 13 February 2011, to 24 May 2011. The request was made to help lighten some of the load on the heavily burdened Appellate Body which is currently hearing two cases including the massive Boeing/Airbus appeal between the EU and the US.

The next meeting of the DSB will be held on 24 February 2011.

ICTSD reporting.

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