Director-General of the World Trade Organization (WTO) on June 20 established a panel pursuant to the request of Japan that filed a claim against Ukraine due to limitations levied in spring 2013 on the import of passenger cars.
According to the report of the WTO, under the procedure, the director general made the decision in response to the request submitted by Japan on June 10, as it was not possible to form the panel under a decision of the Dispute Settlement Body (DSB) made on March 26.
According to the document, William Davey is elected chairperson, Felipe Hees and Chang Fa Lo are members of the panel.
WTO said that Australia, the European Union, India, Korea, the Russian Federation, Turkey and the United States have reserved their rights to participate in the panel proceedings as third parties.
As reported, Japan late in October 2013 initiated consultations with Ukraine regarded limitations levied in spring 2013 on the import of passenger cars.
The government of Japan says it considers that the measures were imposed inconsistently with the provisions of the General Agreement on Tariffs and Trade (GATT) and the WTO Safeguards Agreement in terms of defects in the approval of the requirements for imposing the measures (increased imports, serious injury to the domestic industry, causal links, etc.), and defects in procedural requirements for imposing the measures.
Under WTO rules, dispute participants have 60 days to settle the issue in a consultation regime. If the consultations fail, the initiators have the right to demand that the DSB form an arbitrators’ panel (three or five members) within 45 days, which gives the sides six months to draw up a report, and another three weeks to the WTO members. If the appeal is not submitted, the DSB makes a decision within 60 days, and in this case it takes one year to finish the procedure, while the appeals procedure extends it by around three months.
Additional special duties on imports of new passenger cars with petrol engines of 1,000-1,500 cubic meters set at 6.46 percent and 1,500-2,200 cubic meters at 12.95 percent, regardless of the country of origin and export, came into effect in Ukraine on April 13, 2013.
Along with Japan and the EU, concerns about Kyiv’s decision, which was taken without the approval of other interested parties, were expressed by the United States, South Korea, Turkey, and Russia.
In a notice sent to members of the World Trade Organization on June 12, 2013, Turkey said that it would introduce an additional 23% duty on Ukrainian walnuts from July 12, 2013, under Article 8.2 of the WTO’s Safeguards Agreement in response to limitations by Ukraine on car imports. The article allows the introduction of countervailing duties when the WTO’s requirements for holding consultations with parties concerned prior to the introduction of safeguarding measures have been violated. According to Bloomberg BNA, this is the first case of the application of this article in the history of the WTO.
Turkey said that Ukrainian walnuts worth $26.7 million were imported in 2012, which brings the total duties to $6.1 million, which fully corresponds to the amount of duties on imports of Turkish cars, which last year totaled $55 million.
Ukraine has decided to cut the size of special duties on passenger cars with petrol engines from 1,000 to 2,200 cubic centimeters from April 14, 2014 by one third, and from April 14, 2015 – by three time compared to the current duties being 6.46 percent with the engines from 1,000 to 1,500 cubic centimeters and 12.95 percent for engines from 1,500 to 2,200 cubic centimeters.
