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Media release
Australian Minister for Trade, Mark Vaile
2 May, 2001
WTO Rules for Australia Again on Lamb
Trade Minister Mark Vaile has welcomed the ruling by the World Trade Organisation's Appellate Body that the United States' import restrictions on lamb meat are illegal, saying it is vindication of the Government's action in challenging the US measures.
In its report released overnight the Appellate Body confirmed the earlier ruling by a WTO dispute settlement panel that the import restrictions imposed by the United States on Australian exports of lamb in 1999 were unjustified.
"The Appellate Body has comprehensively confirmed all of the findings of the WTO panel, that the US has acted inconsistently with its WTO obligations," Mr Vaile said.
"The Appellate Body has upheld Australia's arguments and the outcome is a comprehensive endorsement of our approach. It is an excellent outcome for Australia and for Australian lamb meat exporters".
A WTO dispute settlement panel, established in 1999 following complaints by both Australia and New Zealand, issued a finding at the end of last year that the US restrictions should be lifted. The US appealed against the Panel's findings and, in line with the WTO's procedures, the matter was referred to the Appellate Body for review.
"Australia expects the US Administration to take action to comply with these WTO rulings as quickly as possible. A delay in compliance would only result in further penalty to Australian lamb meat exporters, who have already had to live with these measures for almost two years," Mr Vaile said.
"I will be reinforcing these points in my ongoing contact with my US counterpart, United States Trade Representative, Ambassador Robert Zoellick."
"Taken with the recent WTO decision on Korea's beef import restrictions, this decision on lamb confirms the value of the WTO dispute settlement system and underlines the Government's commitment to using the system to fully protect and advance Australia's interests."
Contact: James Baker on 02 6277 7420
MVT65
Background: WTO Dispute Settlement - US Lamb
From 22 July 1999 the US introduced a tariff rate quota (TRQ) on imports of lamb from Australia and New Zealand. The TRQ was introduced following a determination by the United States International Trade Commission (USITC) that imports of lamb meat from Australia and New Zealand were threatening to cause serious injury to US sheep farmers and the US lamb meat industry. The TRQ was imposed for three years (July 1999-July 2002), with the possibility of extension for a further five years.
Imports within the TRQ attracted a 9% duty for year 1, 6% for year 2 and 3 percent for year 3. The rate of duty for over-quota imports was 40% for year 1, 32 % for year 2 (the current year) and 24% for year 3. The in-quota quantity for year 1 was 31,851,151 kg. It increased by 857,342 kg in year 2 and was scheduled to increase by the same amount in year 3. Australia's individual allocation was 53.8% of the total.
Australia and New Zealand initiated WTO dispute settlement action in October 1999. In December 2000 the WTO dispute settlement panel ruled in favour of Australia and New Zealand that the US's measures were inconsistent with the US's obligations under the WTO Safeguards Agreement and Article XIX of GATT 1994 (which deals with emergency action on imports). In February 2001 the US filed an appeal against the panel's findings and the WTO Appellate Body held its hearing on 22-23 March.
As provided for under US domestic legislation, the US International Trade Commission (USITC) conducted a mid-term review of the measures in January 2001. Australian industry made submissions to this review. The review concluded that although prices had improved, the US industry continued to under-perform. Under US law, the President has the authority to continue, adjust or terminate safeguards restrictions if the local industry fails to demonstrate that it is meeting its commitments with regard to restructuring and economic efficiency.
Australia has argued that, in this case, the United States was faced with an industry that has been in long-term structural decline because of a range of homegrown factors rather than imports. For example, 90% of US farms have less than 100 sheep.
The US market accounts for about a half of total Australian lamb meat exports. The volume and value of Australian lamb exports to the US has increased despite the imposition of the US import restrictions. Between 1999 and 2000 the value of Australian lamb exports to the US increased by 23%.
A copy of the Appellate Body's report is available on the WTO's web site (www.wto.org). For more information: Phone (02) 62612777. A summary of the main points of the report will shortly be available on the web site of the Department of Foreign Affairs and Trade (www.dfat.gov.au/trade/negotiations).
Local Date: Thursday, 17-May-2012 16:32:00 EST