China has submitted a second request to establish a panel to review certain tax credits under the United States Inflation Reduction Act (IRA). The request aims to determine if these tax credits align with World Trade Organization (WTO) rules. The United States had previously rejected China's first request in July, citing the necessity of these actions to combat climate change. China argues that the IRA's subsidies favor US goods over imports, which they claim violates WTO rules against such discrimination.
The United States expressed disappointment over China's decision and reiterated that the IRA is a significant step toward clean energy, aiming to ensure secure and sustainable supply chains for a global clean energy future.
The Dispute Settlement Body (DSB) agreed to establish the panel. Several countries, including Argentina, Australia, Brazil, Canada, Colombia, the European Union, Indonesia, Israel, Japan, Korea, Norway, the Russian Federation, Singapore, Switzerland, Thailand, Türkiye, the United Kingdom and Venezuela reserved their third-party rights to participate in the proceedings.
In another matter concerning DS597: United States — Origin Marking Requirement (Hong Kong), for the 12th time at a DSB meeting. The US cited recent developments in Hong Kong regarding free speech and human rights as reasons for raising this issue again. The US referred back to its previous statements on essential security and its reasons for placing this item on the agenda.
Hong Kong criticized the US for raising this matter again at the DSB. They referred to previous WTO panels that dismissed US claims about invoking national security in defense of trade-restrictive measures being entirely self-judging. Hong Kong suggested any objections should be heard by the WTO's Appellate Body which remains blocked due to US refusal to appoint new members.
China supported Hong Kong's stance and emphasized that a restored appeal mechanism is necessary for addressing claims of panel error made by the US. China strongly rejected what it described as US interference in another WTO member's internal affairs.
Regarding Appellate Body appointments, Colombia introduced for the 79th time a proposal on behalf of 130 members to start selection processes for filling vacancies on the Appellate Body. Colombia stated that many members have shown interest in maintaining a functional dispute settlement system within WTO.
The United States repeated its opposition to commencing appointments due to unresolved concerns with WTO dispute settlement processes.
Twenty members commented on this issue during the meeting. Many highlighted their previous statements and stressed an urgent need for discussions aimed at having a fully functional dispute settlement system by 2024 as mandated by earlier Ministerial Conferences.
Colombia expressed regret on behalf of 130 members over not being able to launch selection processes despite ongoing reform conversations about dispute settlement systems.
DSB Chair Ambassador Saqer Abdullah Almoqbel from Saudi Arabia concluded by expressing support for Ambassador Usha Dwarka-Canabady from Mauritius who is facilitating discussions towards achieving positive outcomes within mandated time frames.
Under other business:
- The United States presented status reports regarding several cases including DS184 (anti-dumping measures on hot-rolled steel products from Japan), DS160 (Section 110(5) of US Copyright Act), DS464 (anti-dumping measures on large residential washers from Korea), and DS471 (certain methodologies applied in anti-dumping proceedings involving China).
- The European Union presented a status report regarding DS291 (measures affecting approval/marketing biotech products).
- Indonesia presented status reports regarding DS477 & DS478 (importation of horticultural products/animals/animal products).
The next regular DSB meeting will take place on October 28th.