Page:Special 301 Report 2010.pdf/21

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12, 2009, the panel rules in favor of the United States on the vast majority of its claims. Significantly, the panel also found that China's restriction on the right of foreign enterprises to import the products at issue was not justified by the exception in the GATT 1994 related to the protection of public morals, as China had argued. China subsequently appealed certain of the panel's findings. However, on December 21, 2009, the WTO Appellate Body rejected each of China's claims on appeal and sustained the panel's findings in those respects. On January 19, 2010, the DSB adopted the panel and Appellate Body reports. On February 18, 2010, China notified the DSB that China intends to implement the recommendations and rulings of the DSB in this dispute, and stated it would need a reasonable period of time for implementation.

Following the 1999 Special 301 review, the United States initiated dispute settlement consultations concerning the European Union's (EU) regulation on food-related geographical indications (GIs), which appeared to discriminate against foreign products and persons – notably by requiring that EU trading partners adopt an "EU-style" system of GI protection – and appeared to provide insufficient protections to trademark owners. On April 20, 2005, the DSB adopted a panel report ruling in favor of the United States that the EU GI regulation is inconsistent with the EU's obligations under the TRIPS Agreement and the General Agreement on Tariffs and Trade 1994. On March 31, 2006, the EU published a revised GI Regulation that is intended to comply with the DSB recommendations and rulings. There remain some concerns, however, with respect to this revised GI Regulation, which the United States has asked the EU to address, and the United States intends to continue monitoring this situation.

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