The EU questions the lack of changes to the US domestic legislation despite it having been judged inconsistent with WTO rules. As a result, duties are kept in place, making it more and more difficult for Spanish olive growers and processors to remain on the US market.
Attempts to settle the matter with the US have failed so far. The WTO’s ruling dispute is not only important to preserve the rights of EU olive producers and processors, but is also to protect the EU’s Common Agricultural Policy from similar legally unfounded challenges.
On 19 November 2021, a WTO Panel ruled in favour of the EU, finding that the countervailing duties applied by the United States since 2018 on imports of ripe olives from Spain are illegal under WTO rules. The panel report was adopted on 20 December 2021 without any objection from the US. At a meeting of the Dispute Settlement Body (DSB) on 27 January 2023, the US claimed that it had completed the implementation of the panel recommendations. The EU considers that this is not the case: the US did not amend or repeal its domestic legislation, and has kept duties on Spanish ripe olives in place. In particular, the US did not repeal Section 771B of the 1930 US Tariff Act, which the panel found clearly incompatible with WTO rules, because it presumes that the entirety of subsidies provided to producers of agricultural products are transferred to processors (a so-called pass-through benefit).
By launching compliance proceedings as provided for in Article 21.5 of the Dispute Settlement Understanding, the EU does not close the door to finding a compromise solution with the US.
The first stage under WTO compliance proceedings is the ‘request for consultations’, under which the EU engages into a formal exchange of information with the US with a view to reaching a negotiated settlement. Should the consultations fail to yield a satisfactory solution, the EU may refer the matter to a WTO compliance panel which will take a view on whether the US has, indeed, complied with the earlier ruling. If the non-compliance is confirmed, it opens the doors to the EU taking further measures.
This dispute (DS577) was initiated by the EU against the US in January 2019 when the EU launched its consultation request in the original proceedings.
For more information
- Publication date
- 28 April 2023
- Directorate-General for Trade
- Country or region
- United States
- Trade topics
- Dispute settlement