GD/145

EEC - Panel on Newsprint

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EEC Newsprint (Source: GATT Analytical Index)

Parties

Complainant
Canada
Respondent
EEC
EEC-10
Third Parties

Products at Issue

Products at issue
Newsprint
Type of product
Non-agricultural
Product sub-type
Paper products

Related disputes

GATT
WTO

Key legal aspects

Legal basis
  • GATT Article XXIII:1
Claims raised
  • GATT Article II
Defences raised
  • n.a.

Adjudicators

Type Panel
Chairperson Gardner Patterson (United States)
Other members Alberto Dumont (Argentina), M. Shaton (Israel)

Report

Type Panel
Legal basis at issue
  • GATT Article XXIII:1
Claims at issue
  • GATT Article II
Defences at issue
  • GATT Article XIII
No of Pages (total / legal reasoning) 16 (and 5 annex)
  • -
  • Inconsistency found
  • Defence found to be inapplicable

Timeline

Request for consultations
Request for establishment
Establishment
Composition
Report
Adoption of report

Outcome

Outcome of the proceedings
Report adopted
Additional Info L/5680 (17/10/1984) Panel on Newsprint - Report of the Panel: In its Regulation No. 3684/83 of 22 December 1983, the EC had, for the year 1984, opened a duty-free tariff quota of 500,000 tonnes for newsprint, whereas the commitment in its GATT Schedule LXXII provided for an annual duty-free quota of 1.5 million tonnes. The Panel found that although in the formal sense the EC had not modified its GATT concession, it had in fact changed its GATT commitment unilaterally, by limiting its duty-free tariff quota for MFN suppliers for 1984 to 500,000 tonnes. The Panel considered the arguments advanced by the EC relating to Article XIII but concluded that the conditions for its application had not been fulfilled because the EEC Regulation 3684/83 did not in fact constitute a change in the administration or management of the tariff quota from a global quota system to a system of country shares, as had been asserted by the EC. The Panel therefore concluded that the EC, in unilaterally establishing for 1984 a duty-free quota of 500,000 tonnes, had not acted in conformity with its obligations under Article II of the GATT.

While holding that the right of Canada to compete within a duty-free tariff quota of 1.5 million tonnes had been impaired by the EC action, the Panel recognized, however, that as a result of newsprint imports from EFTA countries entering the EC market duty-free since 1 January 1984 under the terms of the free-trade agreements, the value of the EC concession had greatly increased for non-EFTA suppliers and especially for Canada as the most important MFN supplier. The Panel concluded that this justified the EC engaging in renegotiations under Article XXVIII. Finally, The Panel noted the statement by the EC that, should the Panel consider the action taken by the EC as not being in conformity with the GATT, they might proceed to option(b) under which the tariff quota would be maintained at 1.5 million tonnes but that imports from all sources, including the EFTA countries, would be recorded against that quota. While the Panel could find no specific GATT provision forbidding such action and no precedents to guide it, it considered that this would not be an appropriate solution to the problem and would create an unfortunate precedent.