In an 11 May submission, the G-33 group of developing countries described the WTO agriculture chair's criticism of the market access flexibilities they seek as being "contrary to the spirit of the Doha mandate, the provisions of the July Framework, and the Hong Kong Declaration." The same day, the G-33 also circulated a statement jointly with the African Group, the African, Caribbean and Pacific (ACP) Group and the Least-Developed Country (LDC) Group, underlining the importance of 'special products' (SPs) and the Special Safeguard Mechanism (SSM) to their development goals.

Developing countries are to be allowed to designate SPs for more lenient tariff treatment based on food security, livelihood security and rural development concerns; the SSM is intended to allow them to afford farmers some protection from import surges. Developed and developing country farm exporters have presented proposals seeking to limit the scope of both (see BRIDGES Weekly, 3 May 2006).

The G-33 submission was particularly critical Chair Ambassador Crawford Falconer's 4 May 'reference paper' on SPs. In it, the chair argued that the 20 percent of tariff lines that the G-33 seeks to designate for SP status would allow developing countries to shield an inappropriately high percentage of farm imports from Doha Round tariff cuts -- as much as 98.4 percent of import value in one case (see BRIDGES Weekly, 10 May 2006). The G-33 argued that involving these market access considerations overstepped the negotiating mandate, and that Falconer should have asked the Secretariat to assess the impact that recent proposals would have on "the mandated criteria of food security, livelihood security and rural development needs."

The joint paper from the G-33, African, ACP, and LDC Groups reiterated the importance of the mandate, and also criticised some exporters for seeking to apply market access considerations to SPs and the SSM. The groups emphasised that any final package would need to address their concerns in order to receive their support.

ICTSD reporting.

DSB ESTABLISHES ANOTHER PANEL IN AIRBUS-BOEING DISPUTE

On 9 May the WTO Dispute Settlement Body (DSB) established a second panel to investigate the US' claim (WT/DS316/6) that EU member governments are providing additional kinds of illegal subsidies to Airbus, the civil aircraft manufacturer. The US claims that so-called 'launch aid' grants, debt forgiveness, and other financial contributions violate the General Agreement on Tariffs and Trade (GATT) and the Agreement on Subsidies and Countervailing Measures (SCM).

The new panel comes in addition to an one established in July 2005 to examine a different set of disputed subsidies (see BRIDGES Weekly, 27 July 2005). WTO rules prevented the EU from vetoing the panel's creation a second time, as it did in response to the US' initial request at the 21 April DSB meeting.

In April, the US had also asked for the effective merger of the new panel with the previous one. The EU refused, arguing that working procedures had already been established for the original panel, and that the scope of the second request was substantially broader.

The WTO has already established two separate panels to examine the EU's parallel allegations that the US is illegally subsidising Boeing. With regard to the panel examining its second set of claims, the EU has repeatedly sought the initiation of an information gathering process that would allow for government grants to private companies to be examined in order to determine whether 'serious prejudice' has been caused to any other Members' interest. The US has rejected the launch of these so-called 'Annex V' procedures under the SCM Agreement, arguing that the grants in question were not within the WTO's current mandate.

Some suggest that the disputing parties might best pursue their objectives through a procedural agreement, under which the EU would agree to the merger of the two panels, and the US to the Annex V procedure. However, reaching such an accord would present challenges of its own.

ICTSD reporting; "EU eyes new talks on Boeing, Airbus," CNN.MONEY.COM, 3 May 2006; "Boeing optimistic on aid dispute," BBC NEWS, 3 May 2006.

FINAL WTO BIOTECH PANEL REPORT MAINTAINS VERDICT AGAINST EU

A WTO dispute panel on 10 May issued its final ruling on the complaint brought by the US, Canada and Argentina against what they alleged was an EU moratorium on the approval of new biotech products.

The substance of the report, which remains confidential and was only released to the parties to the dispute, remained unchanged from the 7 February interim ruling, according to one trade diplomat (see BRIDGES Weekly, 8 February 2006). That ruling said that the EU had indeed applied a general 'de facto' moratorium on approvals of biotech products between June 1999 and August 2003 which "resulted in a failure to complete individual procedures without undue delay," thereby violating the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS).

The interim ruling also found that that 'safeguard measures' in the form of national bans on the marketing and import of EU-approved biotech products in France, Germany, Austria, Italy, Luxembourg and Greece were WTO-incompliant, since the EU's scientific committee had already judged the products to be safe and the countries had not performed supplementary risk assessments to justify the bans.

The European Commission was quick to note that the ruling does not affect the EU's current biotech regulatory framework because the six-year moratorium ended in 2004. "Nothing in this panel report will compel us to change that framework," said Peter Power, European Commission spokesman on trade. Analysts have suggested the ruling's demand for national bans to be justified by a risk assessment, however, could have impacts on the six EU member states that currently have such bans in place. The report, which could be appealed, is scheduled to be released to the public within six weeks, although sources have suggested that this might not happen before September.

ICTSD reporting; "Right to Remain GE-Free Overrides WTO Ruling," GREENPEACE, 10 May 2006; "WTO confirms ruling against EU GMO moratorium," REUTERS, 11 May 2006; "WTO faults EU for blocking modified food," ASSOCIATED PRESS, 11 April 2006.