World Trade Organization

• Author: International Law Group

On June 16, 1999, a Panel adopted the Report in the U.S.-Australi dispute over Australian subsidies to Howe and Company Proprietary Ltd., an automotive leather manufacturer. The original proceeding disapproved an A$ 30 million grant to the automotive leather producer which was contingent on export performance. The WTO Panel had held that full repayment of the banned subsidy was necessary to effectively "withdraw the subsidy" in this case.

Australia informed the WTO Dispute Settlement Body (DSB) last September that it had the company repay A$8.065 million (approximately 27%) of the grant which it considered the grant's "prospective portion." The same day, however, Australia announced a new A$ 13.65 million loan to Howe's parent company. The U.S. then asked the DSB to evaluate Australia's compliance.

As for the grant, the Panel considers full repayment necessary in this case to...