On the occasion of the General Assembly of the FTA, a new election of the FTA Board of Directors took place.

Mme Jacqueline Peltier (Auchan) was re-elected as president of the FTA, new elected Vice-President is Mr. Jürgen J. Maas (Metro AG).

Moreover, the following persons were elected to the Board:

Mr. Ferry den Hoed (Euretco), Mrs. Edna Kavanagh (DMS), Prof. Dr. Helmut Merkel (Karstadt/Quelle), Mr. Ake Weyler (Textilimportörerna) and Dr Marco Zanaschi (Gruppo Rinascente).

Trade safeguard measures

The European Union announced its decision to request the establishment of a WTO panel against the US over the so-called "Byrd amendment", US legislation providing for the proceeds from anti-dumping cases to be paid to the US companies responsible for bringing the cases in the first place. The request for a panel was jointly submitted with eight other WTO partners: Australia, Brazil, Chile, India, Indonesia, Japan, Korea, and Thailand. This joint action is a clear indication of the important systemic concerns that the legislation raises among WTO members.

The Byrd amendment is a major source of concern for the EU and for other WTO Members because it clearly breaches WTO rules and can potentially affect all US trading partners:

• The reimbursing of expenses incurred by the petitioners is an illegal response to dumping and subsidisation because it provides an additional anti-dumping and anti-subsidy remedy not allowed under the WTO Agreements. The Byrd amendment, by compensating injured party already protected by the application of duties at the border, gives industries a "double protection".

• The distribution of duties to petitioners is a clear incentive to bring cases, it will result in an increase in trade litigation against companies exporting to the US.

• The Byrd amendment distorts the application of the standing requirements for filing a petition and make it more difficult for exporters subject to an antidumping or countervailing duty order to secure an undertaking with US authorities.

FTA supports the European Commission in its demand for a panel, as any incentive to bring more antidumping cases, thus increasing trade litigation, is an attempt to perturb the market.

For the first time ever, and also further to the efforts of FTA and its members, the WTO Appellate Body has ruled against the EUs anti-dumping policy, deciding that the Communitys measures on cotton-type bedlinen originating in India imposed in 1997 were partially incompatible with the GATTs agreement.

The Appellate body has confirmed that the so called "zeroing practice" when establishing "the existence of margins of dumping", as applied by the European Communities in the anti-dumping investigation at issue in this dispute, is inconsistent with the  Anti-Dumping Agreement. In its calculations the European Commission had in fact disregarded imports of similar products when it found that they had not been dumped, thus using only positive dumping figures to determine the amount of duties. The Appellate Body went even further.

It has also established, in fact, that the EU acted inconsistently with the Anti-Dumping Agreement in calculating the amounts for administrative, selling and general costs and profits (EU used data from only one other producer/exporter) and in the calculation of the amount for profits on sales by other exporters or producers that are not made in the ordinary course of trade (EU excluded sales by other producers/exporters).

Further to the judgement of the Appellate Body the European Communities are under the obligation to bring the measure found to be inconsistent with the  Anti-Dumping Agreement into conformity with their obligations under that Agreement. Details on how the Panel result will be implemented are given here-below.

Further to the above-mentioned WTO act, the Council has adopted a regulation with a view to providing the Community with the necessary legal framework to implement the recommendations of reports.

The aim of the Regulation is to permit the Council, acting by simple majority on a proposal from the Commission, to bring an antidumping measure into conformity with the WTO's recommendations and rulings. The appropriate act may be to amend, repeal, suspend or review the measure. It is also specified that the Council may adopt any special measures which it considers appropriate in the circumstances.

This is a very positive step for FTA members, as it could be considered a sign that the European Commission recognises the supremacy of WTO rulings and is ready to implements WTO opinions as soon as possible. FTA welcomes this proposal and would like to underline that its efforts at WTO level, such as the intervention in the bedlinen case, have surely played an important role in that.

On the basis of the above-mentioned rule, the European Commission has drafted a proposal to the Council with the aim to implement the Panel report on Bedlinen.

According to this proposal, duties on bedlinen imported from India would be suspended as from the entry into force of a new Regulation amending the original Regulation imposing Antidumping duties.

The Commission points out, in its proposal, that the suspension of the duties imposed on Indian imports, opens the way to a possible request for an interim review. Should an interim review be opened, a new investigation would be carried out, with the risk of the imposition of new antidumping duties.

It is not clear, while we are writing, how the Commission intends to act vis-à-vis Pakistan and Egypt. Needless to say, FTA is closely monitoring the situation and will promptly report of any development.

The European Union has agreed to allow the US more time to implement a World Trade Organisation ruling against anti-dumping/anti-trust legislation dating from 1916. The extension, which comes further to a US request to the WTO's Dispute Settlement Body, would give the US until 31 December 2001 to implement the WTO ruling that condemned the act.

EU Trade Commissioner Pascal Lamy said: "I note with satisfaction that the US intends to comply fully with the WTO rulings - and, in this context, we are ready to give them a little more time if that is needed to resolve this question."

On 26 September 2000, the WTO's Dispute Settlement Body (DSB) adopted reports of the Panel and the Appellate Body that found the US anti-dumping/ anti-trust legislation of 1916 incompatible with the WTO Agreements. The US 1916 Act, in facts, allows penalties against dumping such as triple damages, fines and imprisonment. This contravenes the WTO Agreement on Anti-dumping, under which the only sanction allowed is anti-dumping duties.

The US was asked to comply with the WTO ruling by July 2001, but the United States asked the DSB for authorisation to extend the deadline until the end of the current session of the US Congress or 31 December 2001, at the latest. On 20 July, the US Administration formally proposed a draft bill to the US Congress to revoke the 1916 Act. The EU was pleased to note that this proposal covered the dropping of cases pending before US courts under that Act. European companies are among those facing legal challenges before US Courts on the basis of the Act.

According to a recent press release, the EU welcomes the clear commitment from the US to revoke the 1916 Act and to terminate cases pending before 31 December next. The EU also welcomes this first step towards full compliance with the DSB ruling and accepts the need by the US to finalise the legislative procedure.

FTA welcomes the US position, and is glad to remark that WTO resolutions seem finally to obtain the needed attention from the two biggest partners in world trade, e.g. US and the EU. In this respect, it has to be noted that the EU has recently issued a proposal to enforce a legal framework which would allow the Council to directly implement WTO Panels' results.

Trade & Customs Policy

During the EU-Candidate Countries Ministerial Conference on WTO and Trade Issues held in Ljubljana, Ministers and their representatives discussed the state of preparations for a new round of trade negotiations in the World Trade Organisation (WTO). They stressed the importance of the WTO as the main forum for progressive and mutually advantageous trade liberalisation and for establishing basic rules and principles for the international trading system.

The Ministers agreed on the importance of launching, at the 4^th Ministerial meeting of the WTO to be held in Qatar in November 2001, a new comprehensive round of multilateral trade negotiations and agreed to continue to work together towards this shared objective. They agreed that the round should be based on a balanced agenda that would reflect the interests of all the members of the Multilateral Trading System.

FTA recalls its members that it has sent the FTA Position Paper on the 4^th WTO Ministerial Conference to the European Commission, Members of the European Parliament, State Representatives in Brussels as well as other interested parties in the course of this month.

The new regime will provide a transition to a tariff-only system by 2006. During the transition, bananas will be imported into the European Union through import licenses distributed on the basis of past trade.

FTA recalls that in the past, two European Union banana regimes were challenged successfully in the World Trade Organisation, prompting U.S. retaliation against EU products. From July 1, 2001, the United States will suspend the sanctions imposed against EU imports since 1999.

The Commission and the US Trade Representative have concluded the following agreement, ad referendum:

Step l: The Commission will propose to implement the system from l July by allocating licences on the basis of historic references. The US will suspend the sanctions currently imposed on a number of EU exports.

Step 2: The Commission will propose to the Council and Parliament an amendment to the Council Regulation, according to which the B quota will be increased by 100 000 t, and the C quota will be reduced by the same quantity. The C quota will be reserved exclusively for bananas of ACP origin, subject to a WTO GATT Article XIII waiver. The US agrees to help achieve this waiver. On completion of this step, the US will remove the sanctions definitively.

For more detailed information:

The new UNCTAD study entitled "Duty- and Quota-Free Market Access for LDCs: An Analysis of Quad Initiatives" examines the economic effects of the EU "Everything But Arms" initiative and the impact of its possible adoption by the three other members of the Quad (i.e. Canada, Japan and the United States). One of the conclusions of this study is that the European Union has the lowest protection against LDC exports of all Quad members.

FTA recalls that it is of the opinion that the Commission proposal to grant duty-free access for all products except arms originating from least developed countries show a courageous signal. Its effects, however, will be limited in practice: 39 of the 48 least developed countries are ACP countries for which there are already hardly any import restrictions on industrial products and the remaining countries benefit all from the GSP.

With regard to agricultural products, FTA calls on the Commission to speed up the opening of its markets for sugar, rice and bananas.

World trade has been liberalised considerably as a result of the Uruguay Round but significant trade barriers remain - including in areas of interest to developing countries like textiles and agriculture, according to a new WTO Secretariat study: "Market Access: Unfinished Business".

The report makes clear that the WTO has plenty of unfinished business. The study profiles post-Uruguay market access conditions in three areas - industrial tariffs, agriculture and services, the latter two of which are already the subject of ongoing negotiations.

The detailed study is intended as a comprehensive resource for negotiators and the interested public. The report is published under:

The WTO's General Council approved the accession package of Moldova to the World Trade Organisation. Moldova commenced its accession process in 1993. Once Moldova completes its domestic ratification processes, it is expected to become the 142^nd Member of the WTO.

EU Trade Commissioner Pascal Lamy reiterated the EU's support for Russia's efforts to accede to the WTO.

FTA recalls that Russia already applied in 1993 to join in. Negotiations are proceeding on a standard two-track basis: a combination of a multilateral review by a WTO Working Party in Geneva of Russia's existing trade regime and the changes necessary to bring it into compliance with WTO requirements; alongside a series of bilateral negotiations between Russia and individual WTO Members on its future market access commitments for Goods and Services. The EU, which is Russia's largest trading partner, accounting for nearly 40% of both Russia's imports and exports, has a strong interest in the successful completion of these negotiations. The EU helps Russia directly through targeted technical assistance to build the necessary administrative and institutional capacity to ensure that it is able to take on WTO obligations.

Also WTO Director-General Mike Moore reiterated his support for rapid progress in the accession process. A concrete time schedule has, however, not been presented.

Iran first applied to open accession talks in 1996 but the request was blocked by the US and other western countries which accused Tehran of backing global terrorism. European governments subsequently softened their stance after Iran's elections in 1997. Now also the US announced it was reviewing its veto on Iran's request to join the WTO, raising hopes that Washington would soon agree to let accession talks start. Once Iran's request is accepted by all WTO Members, negotiations are proceeding on the two-track basis (see description above).

The General Council agreed that the Fourth WTO Ministerial Conference in Doha, Qatar, will be held on 9-13 November 2001. The European Commission, together with the European Parliament and the Member States, is reformulating the trade agenda for the negotiations. Moreover, the EU and Japan called on Mike Moore, General Director of the WTO, to push for agreement by July on an outline agenda for a world trade round to be launched when all 140 WTO Member States meet in November.

Competition & Trade-Mark law

In 1998, the European Court of Justice's ruling in the Silhouette case established that the holder of a trademark can legally stop the parallel importation into the European Economic Area (EEA) of trademarked goods which have been put on the market in countries outside the EEA In December 1999 the Commission prepared a Working Paper on the subject. The document was referred to the European Parliament for its opinion. The draft Report of MEP Hans-Peter Mayer, issued on 15 February 2001, perfectly represents the position of FTA, advocating a transition from Community-wide exhaustion to international exhaustion.

According to FTA the use of the trademark legislation as an instrument to control distribution channels and partition markets is contrary to the principles of sound competition. The function of a trademark is to protect the proprietor of the brand of any misuse, and not to provide him with the possibility to divide up the market and exploit price differentials. The recent developments in the e-commerce urges a clear position on the freedoms of the retail sectors. Every day, new retailers put their merchandise up on the internet, giving consumers real free-choice of purchase around the world. FTA is also convinced that the impact of parallel imports on consumer behaviour would also be beneficial to manufacturers. More affordable imports of branded products in the EU market may attract consumers who would normally not be able to afford these goods, thereby overall increasing the sales of the goods. FTA also underlines that the link between parallel import and counterfeiting is wrong and misleading. Branded products imported through parallel import may constitute a powerful barrier to the development of counterfeiting, as counterfeited products would lose their attractiveness compared to attractively-priced branded goods whose import entails no legal risks. Trademark owners could thus, on a global scale, increase their sales as their goods would take over counterfeit markets.

As a last remark, FTA stresses that the argument according to which 'grey goods' would automatically offer less quality to consumers should be examined in the light of the existing European technical regulations and directives. The current legislation, in fact, applies to all imports and binds importers whether or not the goods enter the EU with the blessing of the trademark holder.

FTA believes that the principles of free trade laid down in the WTO Agreements are contradicted, if trademark holders are able to partition the world market on the basis of trademarks. Rules restricting parallel imports of trademarked goods are non-tariff barriers to trade that distort the internal market. Given the fact that international exhaustion is an issue of major importance for the future development of a global market without protectionist barriers, FTA favours its application world-wide and urges the EU to implement it, even without reciprocity.

Diary - The month ahead

Diary - What happened