WTO report on EU subsidy duties on PET from Pakistan

Istanbul, May 17 (DHA) - WTO Appellate Body issued its report in the case “European Union — Countervailing Duties on Certain Polyethylene Terephthalate (PET) from Pakistan” on May 16.Pakistan claims that the measures appear to be inconsistent with:Articles 1, 1.1(a)(1), 1.1(b), 3, 3.1(a), 10, 12.6, 12.8, 14, 14(b), 15.5, 19, 19.1, 19.3, 22.3, 22.4 and 32, and Annexes I, II, III and VI, of the SCM Agreement; andArticle VI of the GATT 1994.According to the report released by Appellate Body;“The dispute concerns countervailing measures imposed by the European Union on certain polyethylene terephthalate from Pakistan.“With respect to the Manufacturing Bond Scheme (MBS), which the European Commission (the Commission) found to be a countervailable subsidy contingent on export performance, Pakistan claimed that the Commission acted inconsistently with Article 1.1(a)(1)(ii) of the SCM Agreement, because it improperly determined the existence of a financial contribution. The Panel found that the Commission acted inconsistently with Article 1.1(a)(1)(ii) of the SCM Agreement by failing to provide a reasoned and adequate explanation for why the entire amount of remitted duties was “in excess of those which have accrued” within the meaning of footnote 1 of the SCM Agreement.“Pakistan also claimed that the Commission violated Article 3.1(a) of the SCM Agreement, because – given its incorrect interpretation and application of Article 1 – the Commission incorrectly determined the existence of an export subsidy. The Panel found that the Commission acted inconsistently with Article 3.1(a) of the SCM Agreement by improperly finding the existence of a “subsidy” that was contingent on export performance.”