COLOMBIA – MEASURES RELATING TO THE IMPORTATION OF TEXTILES, APPAREL AND FOOTWEAR RECOURSE TO ARTICLE 21.5 OF THE DSU BY COLOMBIA REQUEST FOR CONSULTATIONS
Document: REQUEST FOR CONSULTATIONS
Date: 2 March 2017
Document codes: WT/DS461/19
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 21.5 OF THE DSU BY COLOMBIA
REQUEST FOR CONSULTATIONS
The following communication, dated 2 7 February 2017, from the delegation of Colombia to the
delegation of Panama and to the Chairperson of the Dispute Settlement Body, is circulated in
accordance with Article 21.5 of the DSU.

Pursuant to Articles 21.5 and 4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (DSU) and Article XXII of the General Agreement on Tariffs and Trade 1994
(GATT 1994), my authorities have instructed me to request consu ltations with the Government
of Panama regarding the existence of measures taken to comply with the recommendations and
rulings of the Dispute Settlement Body in the dispute Colombia – Measures Relating to the
Importation of Textiles, Apparel and Footwear (DS461).

Colombia takes the view that Arti cle 21.5 of the DSU is silent with respect to the obligation to
request c onsultations under Article 4 of the DSU . C onsequently, such consultations cannot be
interpreted as a mandatory procedural remedy, the less so since in the present case, Panama
initiated proceedings for the suspension of the application of concessions or ot her obligations
to Colombia in the absence of any determination as to Colombia's compliance with the
recommendations and rulings of the DSB or of nullification or impairment affecting Panama.

Consequently, Panama's as sertions before the Dispute Settlement Body on 2 0 February of this
year, which I shall revert to in this document, place Colombia in the difficult situation of having to
request these consultations in the aforementioned terms in spite of the interpretation referred to
earlier, aware of the nee d to stress its good faith in these proceedings while at the same time
avoiding the procedural and contentious hurdles posed by the opposing party.

Indeed, as notified by Colombia to the WTO, the measure examined in this dispute ceased to exist
as of 2 November 2016. Since that date, Colombia has not applied compound tariffs to imports of
apparel and footwear, and the tariffs expressed in ad valorem terms that Colombia now applies do
not exceed the bound level in its schedule.

Pursuant to Article 4.4 of t he DSU, I shall proceed to describe the reasons for this request,
including identification of the measure at issue and an indica tion of the legal basis for
the complaints:

On 22 June 2016, the DSB adopted the Appellate Body Report and the Panel Report (as modified
by the Appellate Body) in the dispute Colombia – Measures Relating to the Importation of Textiles,
Apparel and Footwear (DS461).

The DSB found, for imports of products classified in Chapters 61, 62, 63 and 64 (except for
heading 64.06 but includ ing tariff line 6406.10.00.00) of Colombia's Customs Tariff, that in the
instances identified in the Panel Report, the compound tariff exceeded the bound tariff rate in

Colombia's Schedule of Concessions, and was therefore inconsistent with Article II:1(a) and (b) of
the GATT 1994.

The DSB also found that although the measure at issue was "designed" to protect public morals in
Colombia within the meaning of Article XX(a) of the GATT 1994, Colombia had failed to
demonstrate that the compound tariff was a me asure "necessary to protect public morals" within
the meaning of Article XX(a) of the GATT 1994 . S imilarly, the DSB found that although the
measure at issue was "designed" to secure compliance with laws or regulations which are not
inconsistent with the GA TT 1994, namely, Article 323 of Colombia's Criminal Code, within the
meaning of Article XX(d) of the GATT 1994, Colombia had not demonstrated that the compound
tariff was a measure "necessary to secure compliance with laws or regulations which are not
inconsistent" with the GATT 1994, within the meaning of Article XX(d) of the GATT 1994.

Colombia replaced the compound tariff with an ad valorem tariff that does not exceed Colombia's
WTO bound tariffs, and in that sense, it has brought t he measure subject to the
DSB's recommendations into compliance with its WTO obligations . H owever, Panama does not
agree with Colombia that Decree 1744 replacing the compound tariff is consistent with the covered
agreements and brings Colombia into compliance with the GATT 1994.

Decree 1744 of 2 November 2016 was issued by the Colombia Government in order to modify the
tariffs applicable to imports of products classified in Chapters 61, 62 and 63 of the Customs Tarif f,
and certain items in Chapter 64.

This Decree sets an ad valorem MFN tariff of 40% for imports of products classified in Chapters 61
and 62 of the Customs Tariff of the Republic of Colombia when the declared f.o.b. import price is
less than or equal to ten (10) US dollars per gross kilogram . T his tariff is equal to the bound
tariff in Colombia's Schedule LXXVI, Part I - Most-Favoured-Nation Tariff, Section II - Other
Products, annexed to the GATT 1994 . In cases where the import price for these products exceeds
ten (10) US dollars, the MFN tariff will be as provide d in Decree 4927 of 2011 or any amending
decree, containing the Customs Tariff of the Republic of Colombia, and as such neither of the two
mentioned levies will exceed Colombia's bound tariffs.

As regards imports of products classified under tariff headin gs 6401, 6402, 6403, 6404 and 6405
of the Customs Tariff of the Republic of Colombia, an MFN tariff of 35 % ad valorem is
applied when the declared f.o.b. import price is less than or equal to pric es that vary
between six (6) US dollars and ten (10) US doll ars per pair, in accordance with the said Decree .
For imports of products classified under subheading 6406.10.00.00, an MFN tariff of 35 %
ad valorem will be applied when the declared f.o.b. price is less than or equal to five (5) US dollars
per gross kilog ram. T hese tariffs are equal to the tariff bound in Co lombia's Schedule LXXVI,
Part I - Most-Favoured-Nation Tariff, Section II - Other Products, annexed to the GATT 1994 . In
cases where the import price for these products exceeds the above -mentioned prices, the MFN
tariff will be as provided in Decree 4927 of 2011 or any amending decree, and as such neither of
the two mentioned levies will exceed Colombia's bound tariffs.

For imports of the other products that were covered by the compou nd tariffs introduc ed by
Decree 456 of 2014, including the products classified in Chapter 63 of the Customs Tariff and
those classified under the headings of Chapter 64 not mentioned above, the applicable tariff, as
from 2 November, is the MFN ad valorem tariff set forth in Decree 4927 of 2011 or any amending
decree, and as such it will not exceed Colombia's bound tariffs.

As indicated in document WT/DS461/17, Colombia was obliged to request the establishment of a
panel because Panama requested authorization to suspend the a pplication to Colombia of
concessions or other obligations without fir st referring the matter to the p anel under Article 21.5 .
Moreover, on several occasions Colombia urged Panama to conclude a sequencing agreement,
something which Panama has thus far refused to do.

Colombia regrets that at the DSB meeting of 20 February 2017, Panam a opposed the
establishment of a panel under Article 21.5 of the DSU, arguing that there had been no
consultations. C ertain Members described Panama's opposition as inappropriat e in that it
prevented the establishment of a panel in these proceedings based on the premise that there had
been no request for consultations by Colombia. Other Members qualified it as a procedural remedy
that was contrary to Article 3.10 of the DSU in th at it reflected a contentious strategy that sought

to block Colombia's right to demonstrate its compliance with the recommendations and rulings of
the DSB.1

As already mentioned, this request is without prejudice to Colombia's position that the holding of
consultations prior to the establishment of a panel under Article 21.5 of the DSU is not a
prerequisite when, as in this case, the complainant refuses to initiate proceedings under that
provision in circumstances in which there is disagreement as to the existence or consistency with a
covered agreement of measures taken to comply with the recommendations and rulings . It is also
without prejudice to Colombia's position that even if they were necessary, Colombia and Panama
have held extensive consultations on this matter and on Decree 1744.2

I look forward to your reply to this request for consultation. I propose that they be held in Geneva,
Switzerland, on 1, 2 or 3 March 2017, on the WTO premises.

Furthermore, on 9 February 2017, the Ministers of Foreign Affairs and the Ministers of Trade of the
two countries met in Cartagena to hold consultations on this matter. Finally, on 22 February 2017 Colombia
formally submitted to Panama a proposal for a sequencing agreement, recognizing the specificities of the
current situation in the dispute, a proposal to which Panama has not responded.