International Economic Law

On November 10, 2003 the World Trade Organization Appellate Body issued its report in the complaint brought by Brazil, China, the European Communities, Japan, Korea, New Zealand, Norway, and Switzerland against the US imposition of safeguard measures on certain steel products. [1] The Appellate Body upheld a prior Panel ruling that the US measures were inconsistent with the WTO Safeguards Agreement and GATT 1994. [2] Consequently the Appellate Body recommended that the WTO Dispute Settlement Body request the US to bring its measures into conformity. [3] [4]

Introduction

 

In recent testimonies before the US Congress, scholars and representatives of the small business community have argued that China deliberately undervalues its currency, the Yuan, in order to gain a competitive advantage towards its major trading partners. [1] China is being accused of manipulating the exchange rate by buying and selling Yuan on the international capital markets for a fixed price. Thereby it effectively discourages a free market value for the Yuan.

 

           On September 24, 2003, members of the Congressional-Executive Commission on China urged a U.S. trade official to consider challenging China's fixed currency exchange rate at the World Trade Organization (WTO). Rep. James A. Leach (R-Iowa), chairman of the Commission, put forward the idea that China's currency could be "a subsidies issue under the WTO, so it's not exactly a non-WTO issue." [1]

 

In early April 2005, the WTO Appellate Body (AB) issued a ruling in an appeal of a case brought by Honduras against measures taken by the Dominican Republic in connection with the importation and internal sale of cigarettes.[1] One of the measures was a requirement that a tax stamp be affixed to all cigarettes.

 

On March 3, 2005, the WTO Appellate Body (AB) issued a landmark decision[1] interpreting key WTO provisions on agricultural subsidies and upholding a prior panel ruling finding various US cotton subsidies to be WTO illegal. In September 2004 the panel, in a challenge by Brazil, had ruled that various US agricultural programs constituted illegal subsidies under the WTO Agreement on Subsidies and Countervailing Measures, the Agreement on Agriculture and Article XVI of the GATT 1994.[2]