COLOMBIA – MEASURES RELATING TO THE IMPORTATION OF TEXTILES, APPAREL AND FOOTWEAR RECOURSE TO ARTICLE 22.2 OF THE DSU BY PANAMA
Document: RECOURSE TO ARTICLE 22
Date: 10 February 2017
Document codes: WT/DS461/16
Complainant: Panama
Respondent: Colombia
Third parties: Ecuador, El Salvador, EU, China, Guatemala, Honduras, U.S., Philippines
Dispute stage: Implementation & Compliance
Agreements cited: Art. II:1(b), II:1(a), VIII:1, X:3(a)  GATT 1994

COLOMBIA – MEASURES RELATING TO THE IMPORTATION
OF TEXTILES, APPAREL AND FOOTWEAR
RECOURSE TO ARTICLE 22.2 OF THE DSU BY PANAMA
The following communication, dated 9 February 2017, from the delegation of Panama to
the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 22.2 of the DSU.

Pursuant to Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU), Panama requests authorization from the Dispute Settlement Body (DSB ) to
suspend the application to Colombia of concessions or other obli gations in the amount
of US$210,000,000 (two hundred and ten million United States dollars). This level of suspension is
equivalent to the level of nullification or impairment of benefits accruing to Panama, resulting from
Colombia's failure, as of 22 January 2017, to bring its measure into conformity with WTO law, in
particular with the General Agreement on Tar iffs and Trade 1994 (GATT 1994), and its failure
otherwise to comply with the r ecommendations and rulings of the DSB in Colombia – Measures
Relating to the Importation of Textiles, Apparel and Footwear.

Failure by Colombia to comply with the recommendations and rulings of the DSB
On 25 September 2013, the DSB established a panel at the request of Panama to examine the
compound tariff imposed by Colombia on imports of textile and footwear products . In examining
this matter, both the P anel and the Appellate Body found that the measure violated the GATT.
On 22 June 2016, the DSB adopted the report of the Panel, as modified by the Appellate Body,
recommending that Colombia bring the measure at issue into conformity with the GATT
(, paragraph 6.12 ; W T/DS461/R, paragraph 8.10) . A WTO-appointed arbitrator
subsequently determined that the "reasonable period of time" fo r Colombia to implement
the DSB recommendations and rulings would expire on 22 January 2017.

On 2 November 2016, Colombia adopted two decrees that affect the tariff and customs regime for
the importation of textiles and footwear. In Panama's view, however, these legislative acts, far
from bringing the measure into conformity with Colombia's WTO obligation s, perpetuate the
nullification and impairment of benefits accruing to Panama d irectly or indirectly under
the GATT 1994.

Recourse by Panama to Article 22.2 of the DSU
Article 22.1 of the DSU provides that "full implementation" of the recommendations and rulings of
the DSB is the preferred conclusion to a dispute . In the event that implementation is not achieved
within the established "reasonable period of time", the parties to a dispute may attempt to
negotiate mutually acceptable compensation, or the prevailing party may be authorized by
the DSB to suspend concessions and obligations . A rticle 22.2 of the DSB provide s that if no
satisfactory compensation has been agreed within 20 days after the date of expiry of the
"reasonable period of time", a prevailing party may request authorization from the DSB to suspend
the application of concessions and obligations to th e party that has failed to implement
the DSB recommendations and rulings . Article 22.6 requires the DSB to gra nt such authorization
within 30 days of the expiry of that period, unless there is consensus to reject the request.

Colombia's failure to bring its m easure into conformity with its WTO obligations by complying with
the recommendations and rulings of the DSB in this matter results in a loss for Panama
of US$210,000,000 (two hundred and ten million United States dollars) worth of exports of textile
and footwear products. In accordance with the schedule established in Article 22.2 of the DSU,
Panama requests authorization from the DSB, at its meeting of 2 0 February 2017, to suspend the
application to Colombia of concessions or other obligations covering tr ade in the amount
of US$210,000,000 (two hundred and ten million United States dollars).

In considering what concessions or other obligations to suspend, Panama applied the principles
and procedures set forth in Article 22.3 of the DSU, and makes this req uest pursuant
to Article 22.3(c). The request is based on the fact that for Panama, the suspension of concessions
or other obligations only with respect to the goods sector would be problematic. In Panama's view,
a measure of this kind would affect sensiti ve sectors of the Panamanian economy that need
Colombian imports, including the energy, agriculture, health and construction sectors, which
account for a considerable share of Panama's gross domestic product.

Considering that the circumstances are suffici ently serious, and that it is not practicable or
effective to suspend concessions or other obligations with respect to the goods sector only,
Panama requests authorization by the DSB to suspend concessions or other obligations under the
Multilateral Agreements on Trade in Goods, the General Agreement on Trade in Services, and the
Agreement on Trade-Related Aspects of Intellectual Property Rights.

As required by Article 22.4 of the DSU, the level of suspension prop osed is equivalent on an
annual basis to th e nullification or impairment of benefits accruing to Panama, resulting from
Colombia's failure to comply with the DSB's recommendations and rulings.

Panama asks that this request for authorization to suspend concessions or other obligations be
included in the agenda of the meeting scheduled for 20 February 2017.