LatAm & Caribbean, Latest news, WTO dispute settlement

WTO: EU claims victory over Colombia in first-ever MPIA arbitration case

The European Commission has claimed victory “in substance” in the first ever WTO dispute settlement case to be referred to multi-party arbitration.

The three arbitrators appointed under the new multi-party interim appeal arbitration arrangement delivered their ruling on Wednesday (21 December) in a dispute settlement case relating to Colombian anti-dumping duties on European frozen french fries.

The lawyers upheld the panel’s verdict on three of the four points which Colombia had challenged.

But they ruled against the EU on a fourth point which Geneva-based officials said had the effect of “reversing the ultimate finding” of the panel.

In particular, the arbitrators overturned the original dispute settlement body ruling which found that Colombia had not acted “appropriately” in using third-country sales prices as the basis for its anti-dumping determination.

Dispute settlement panel applied rules ‘in overly stringent manner’

According to the arbitrators’ assessment, the panel had applied the legal provisions on this point “in an overly stringent manner”. They claimed that the use of third-country sales prices in this case should indeed be deemed “sufficient” to initiate the investigation.

But on three other more technical points of the DSB ruling, the EU’s challenge – and the original panel findings – were upheld.

The net result is that Colombia must now adapt its anti-dumping measure to bring into line with the arbitrators’ verdicts relating to process and methodology. But there is no prima facie requirement for Bogotá to withdraw the anti-dumping duties entirely.

Both sides had agreed in advance to abide by the arbitrators’ ruling, which was delivered well within the 90-day period initially set when Colombia appealed the initial DSB verdict in October.

In a statement released after the arbitrator’s ruling, the European Commission claimed victory – as it generally does in the case of a mixed panel ruling.

“The final and binding award confirms that the anti-dumping duties imposed by Colombia on frozen fries from Belgium, Germany and the Netherlands breach WTO rules and improperly restrict access to the Colombian market,” the statement said.

“The decision is a win for European producers whose exports to Colombia of well over €20 million were affected by the Colombian duties.

“It sends a strong signal to any country thinking of restricting EU exports that anti-dumping investigations must fully comply with WTO rules, and highlights the systemic importance of the MPIA.”

‘Proof that MPIA appeals can work’

The case has attracted attention more for the processes involved than for the actual substance of the case.

This is because it is the first to make use of the MPIA – the multi-party system set up in 2020 in the aftermath of the US government’s move to hobble the WTO’s own appellate body by blocking the appointment of new members to that body.

Colombia and the EU are among 24 WTO members who have agreed to use the MPIA for appeals against DSB verdicts.

The commission welcomed the way in which the current case had been resolved, claiming it was far preferable to a situation where a country losing a panel case could appeal that verdict ‘into the void’, given the non-functional status of the appellate body.

“This case is also clear proof that WTO disputes can be resolved quickly and efficiently, with the final award issued well within the 90-day deadline,” the commission said.

This latter point will also have been noted in Washington, where the often drawn-out time period for WTO appeals has been one of the US’s criticisms of the existing appellate body system.

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