DSU REVIEW OFF TO SLOW START

The WTO special (negotiating) session of the Dispute Settlement Body (DSB) met on 26 January to continue the review of the Dispute Settlement Understanding (DSU). Discussions at the meeting, which had originally been scheduled for two days but lasted for only one, remained at a conceptual level rather than moving on to a detailed textual review. Members focused on issues related to implementation and compliance (Articles 21 and 22 of the DSU), to a large extent reiterating long-held positions. During the meeting, Malaysia submitted a proposal on provisional measures, which has yet to be circulated. The proposal related to cases in which the domestic industry in a responding party is irreversibly hurt during the time that a panel is investigating the claims. Questions raised included what, if any, provisional protective measures could be allowed in such situations.

Discussions related to the DSU review have been held at a general level since the Cancun ministerial, but are set to return to a more specific level. The review of the DSU is scheduled to conclude by the end of May this year. The next DSB special session will be held from 24-25 February, and will focus on provisional measures. Chair Péter Balás (Hungary) invited specific proposals from Members to bridge positions and inject momentum into the negotiations, to be submitted a week in advance of the meeting.

ICTSD reporting.

GOODS COUNCIL: BRAZIL, INDIA ADVOCATE FLEXIBILITY IN USE OF INVESTMENT
POLICY

The WTO Council for Trade in Goods met on 26 January to, among other things, continue reviewing the Agreement on Trade Related Investment Measures (TRIMs). During discussion, Brazil stressed that small and medium-scale industries are of key importance for development -- especially in terms of job creation, technology transfer and poverty reduction -- and said linkages between SMEs and multinational corporations should be encouraged. He argued, supported by India, Colombia and Pakistan, that governments should be allowed the flexibility under the TRIMs Agreement to intervene and boost such linkages. The US disagreed, saying Brazil's suggestion amounted to a reopening of the TRIMs Agreement. The EC called for more of a concrete discussion focusing on specific developing country cases, and Chair Hovorka concluded that Members remained entrenched on their old positions on the TRIMs review.

Also at the meeting, Pakistan asked for an extension to its current transition period for phasing out its TRIMs for the car industry. Pakistani Ambassador Ahmad stressed the importance of the auto sector to the country -- a rapidly growing sector employing more than 115,000 people -- and asked Members to be flexible and allow the current policy to be extended. He also noted that Pakistan already has made significant progress in phasing out the TRIMs. Brazil and India supported Pakistan, while the EC and Japan said they needed more time to consider the request. The Chair will conduct informal consultations on the issue, which will be discussed at the next meeting of the Goods Council, scheduled for 15 April.

ICTSD reporting.