World Trade Organization

• Author: International Law Group

The Appellate Body of the World Trade Organization (WTO) has essentially affirmed an earlier Dispute Settlement Panel Report finding that Korea has violated trading rules with its restrictive requirements on imported beef (see 2000 International Law Update 126). The Appellate Body circulated the report on December 11, 2000.

The U.S. and Australia had brought the complaint before the WTO in February 1999. With a Report circulated on July 31, 2000, the Panel had found that Korea's restrictions on imported beef had to be phased out by January 1, 2001. Its dual retail system for beef, requiring separate distribution channels, is untenable under GATT.

For example, foreign beef could only be sold in stores marked "Specialized Imported Beef Store," thereby allowing distribution of imported beef in only about 10% of the retail outlets. Also, beef importers had to mark the meat with special display signs. Korea appealed the findings. The Appellate Body essentially upholds the earlier Panel report, and concludes that: (1) The Panel had properly examined Korea's commitment levels in its Schedule and in Annex 3 of the Agreement on Agriculture. Korea had argued on appeal that the Panel had allegedly made two findings outside the terms of reference by referring to Schedule LX which neither the U.S. nor Australia had specifically challenged.

(2) The Panel properly concluded that Korea did not correctly calculate its domestic support for beef in 1997 and 1998 pursuant to...