EU wins in WTO appeal about Colombian anti-dumping duties on frozen fries

This article is brought to you in association with the European Commission.

Arbitrators have in substance ruled in favour of the EU in the first WTO appeal dealt with under the ‘Multi-party interim appeal arbitration arrangement’, known as the ‘MPIA’. The final and binding award confirms that the anti-dumping duties imposed by Colombia on frozen fries from Belgium, Germany and the Netherlands breach World Trade Organization (WTO) rules and improperly restrict access to the Colombian market.

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.

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.

Even though the WTO Appellate Body is currently hobbled by a long-running blockage on appointments, this appeal could be dealt with in accordance with WTO rules. That is because both Colombia and the EU are in the ‘MPIA’. This arrangement is open to all WTO Members while the Appellate Body remains blocked. Participating WTO Members agree appeal arbitration procedures in WTO disputes between them. This safeguards their WTO right to binding, two-tier and independent dispute settlement in any such disputes, in the continued absence of a functioning WTO Appellate Body. As such, it provides an important and interim back stop for the multilateral rules-based trading system, and avoids situations where this system is undermined by ‘appeals into the void’, i.e. into the void left by the non-functioning Appellate Body.

Next steps

Colombia must now bring itself into compliance with the ruling, either immediately or within a time limit agreed with the EU or set by a WTO arbitrator. If Colombia does not comply, the EU can get WTO authorisation to adopt countermeasures.

Background

The EU brought this dispute (DS591) against Colombia in November 2019. A WTO panel ruled in the EU’s favour in October 2022 and Colombia appealed. The final and binding award of the Appeal Arbitrators confirms that Colombia’s anti-dumping investigation was flawed in several respects, including the calculation of the dumping margin and the injury analysis.

The appeal arbitrators under the MPIA were drawn at random from a 10-strong standing pool of individuals of recognised authority and demonstrated expertise. The award was issued in the three official languages of the WTO (English, French and Spanish) well within the 90-day time limit. The swift issuance of a high-quality appeal award confirms that appeal proceedings at the WTO can be managed in a focussed and efficient way while fully respecting parties’ rights. This speed was helped by some of the innovations embedded in MPIA procedures, such as the requirement to address solely issues that are necessary to resolve the dispute and the possibility, availed of by the arbitrators here, to take or suggest measures streamlining the proceedings.

Apart from safeguarding the prospect of a binding resolution of disputes between MPIA participants, the MPIA signals commitment to a rules-based international trading system, with properly functioning WTO dispute resolution at its heart. Currently, 52 out of 164 WTO Members are covered by the MPIA (Australia; Benin; Brazil; Canada; China; Chile; Colombia; Costa Rica; Ecuador; the EU (whose 27 Member States are also WTO Members); Guatemala; Hong Kong; Iceland; Macao; Mexico; Montenegro; New Zealand; Nicaragua; Norway; Pakistan; Peru; Singapore; Switzerland; Ukraine; and Uruguay). Over a third of all disputes launched in the WTO since the MPIA was put in place in April 2020 have been between MPIA participants.

Exports of frozen fries from the three EU Member States concerned to Colombia amounted to €23 million in 2016. Colombia imposed duties in November 2018, targeting almost all (85% or €19.3 million) EU exports of frozen fries to Colombia.