WTO: US Loses Olive Dispute

The United States lost a trade dispute with the European Union at the World Trade Organization after a compliance panel found that Washington failed to implement the relevant aspects of a ruling issued by a dispute settlement panel against anti-dumping duties imposed on raw olives from Spain.

It is unclear whether the United States will challenge the compliance panel ruling before a dysfunctional Appellate Body, said those familiar with the ruling.

The dispute goes back to 2019 when the EU asked for consultations with the United States over its anti-dumping duties as well as countervailing duties.

In November 2021, a dispute settlement panel ruled that the US Department of Commerce “acted inconsistently with Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement on several grounds in regard to its anti-dumping duties on the raw olives from Spain.”

the allocation and valuation of BPS entitlements with respect to new farmers, farmers holding entitlements transferred under the SPS program and farmers no longer growing olives. It also ruled that Commerce relied upon erroneous factual findings with respect to function and role of the so called “regional rate” to support its determination of de jure specificity.

According to the panel, Commerce “did not properly examine and account for the rules governing the allocation and valuation of SPS entitlements with respect to farmers with SPS entitlements obtained via transfer, and farmers holding COMOF program-based entitlements no longer producing olives.”

The Panel recommended that the United States bring its measures into conformity with its obligations under the GATT 1994, the Anti-Dumping Agreement and the SCM Agreement.

According to people familiar with the ruling, the compliance proceedings centered on the European Union's challenge to the United States implementation of the DSB's adopted recommendations and rulings in relation to the original panel's findings concerning Section 771B of the US Tariff Act of 1930, the provision of US law used to determine the existence and extent of indirect subsidization (i.e. “pass-through” of benefit) in countervailing duty investigations involving an agricultural product processed from a raw agricultural product.

The countervailing duty investigation at issue addressed subsidies provided to raw olive growers in Spain, which were found by the United States to have passed through to Spanish exporters of ripe olives.