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The texts reproduced here do not have the legal standing of the original documents which are entrusted and kept at the WTO Secretariat in Geneva.
> Article 1
> Article 2
> Article 3
> Article 4
> Article 5
> Article 6
> Article 7
> Article 8
> Article 9
> Article 10
> Article 11
> Article 12
> Article 13
> Article 14
> Article 15
> Article 16
> Article 17
> Article 18
> Article 19
> Article 20
> Article 21
> Article 22
> Article 23
> Article 24
> Article 25
> Article 26
> Article 27
> Appendix 1: Agreements Covered by the DSU
> Appendix 2: Special or Additional Dispute Settlement Rules and Procedures
> Appendix 3: Panel Working Procedures
> Appendix 4: Expert Review Groups
> Working Procedures for Appellate Review
> Working Procedures for Article 22.6 Arbitrations
> Rules of Conduct for the Understanding on Rules and Procedures Governing the
Settlement of Disputes
> Rules of
Procedure for Meetings of the Dispute Settlement Body
> Other Issues in WTO Dispute Proceedings
> Time-Frames in Relation to Panel and Appellate Body Reports
> Analytical
Index main page
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I. Article 1 back to top
A. Text of Article 1
Members hereby agree as follows:
Article 1:
Coverage and Application
1. The rules and procedures of this Understanding shall apply to
disputes brought pursuant to the consultation and dispute settlement
provisions of the agreements listed in Appendix 1 to this Understanding
(referred to in this Understanding as the “covered agreements”). The
rules and procedures of this Understanding shall also apply to
consultations and the settlement of disputes between Members concerning
their rights and obligations under the provisions of the Agreement
Establishing the World Trade Organization (referred to in this
Understanding as the “WTO Agreement”) and of this Understanding
taken in isolation or in combination with any other covered agreement.
2. The rules and procedures of this Understanding shall apply subject
to such special or additional rules and procedures on dispute settlement
contained in the covered agreements as are identified in Appendix 2 to
this Understanding. To the extent that there is a difference between the
rules and procedures of this Understanding and the special or additional
rules and procedures set forth in Appendix
2, the special or additional
rules and procedures in Appendix 2 shall prevail. In disputes involving
rules and procedures under more than one covered agreement, if there is
a conflict between special or additional rules and procedures of such
agreements under review, and where the parties to the dispute cannot
agree on rules and procedures within 20 days of the establishment of the
panel, the Chairman of the Dispute Settlement Body provided for in
paragraph 1 of Article 2 (referred to in this Understanding as the “DSB”),
in consultation with the parties to the dispute, shall determine the
rules and procedures to be followed within 10 days after a request by
either Member. The Chairman shall be guided by the principle that
special or additional rules and procedures should be used where
possible, and the rules and procedures set out in this Understanding
should be used to the extent necessary to avoid conflict.
B. Interpretation and
Application of Article 1
1. Article 1.1: “Covered
Agreements”
1. In Brazil
— Desiccated
Coconut, the Appellate Body defined the
term “covered agreements” as follows:
“The ‘covered agreements’ include the WTO
Agreement, the
Agreements in Annexes 1 and 2, as well as any Plurilateral Trade
Agreement in Annex 4 where its Committee of signatories has taken a
decision to apply the DSU. In a dispute brought to the DSB, a panel may
deal with all the relevant provisions of the covered agreements cited by
the parties to the dispute in one proceeding.”(1)
2. In India
— Patents
(US), the Appellate Body examined the Panel’s
interpretation of various provisions of the TRIPS Agreement and noted
that “as one of the covered agreements under the DSU, the TRIPS
Agreement is subject to the dispute settlement rules and procedures of
that Understanding.”(2)
3. The Appellate Body on
EC — Poultry considered the relationship
between Schedule LXXX of the European Communities and the so-called “Oilseeds
Agreement”, which had been negotiated by the European Communities and
ten other contracting parties, including Brazil. As a part of its
agreement with Brazil, a “global” tariff-rate quota had been
introduced by the European Communities and subsequently incorporated
into the European Communities’ Schedule LXXX. Subsequently, in the
context of the interpretation of the European Communities’ Schedule,
the question of the relationship between Schedule LXXX and the Oilseeds
Agreement arose. The European Communities argued that Schedule LXXX
superseded and terminated the Oilseeds Agreement because the WTO
Agreement was a later treaty relating to the same subject matter in
accordance with Article 59.1 of the Vienna Convention; alternatively,
the European Communities argued that the Oilseeds Agreement only applied
to the extent compatible with Schedule LXXX, pursuant to Article 30.3 of
the Vienna Convention. The Appellate Body stated:
“In our view, it is not necessary to have recourse to either
Article 59.1 or Article 30.3 of the Vienna Convention, because the text
of the WTO Agreement and the legal arrangements governing the transition
from the GATT 1947 to the WTO resolve the issue of the relationship
between Schedule LXXX and the Oilseeds Agreement in this case. Schedule
LXXX is annexed to the Marrakesh Protocol to the General Agreement on
Tariffs and Trade 1994 (the ‘Marrakesh Protocol’), and is an
integral part of the GATT 1994. As such, it forms part of the
multilateral obligations under the WTO Agreement. The Oilseeds
Agreement, in contrast, is a bilateral agreement negotiated by the
European Communities and Brazil under Article XXVIII of the GATT
1947,
as part of the resolution of the dispute in EEC — Oilseeds. As such, the
Oilseeds Agreement is not a ‘covered agreement’ within the meaning
of Articles 1 and 2 of the
DSU. Nor is the Oilseeds Agreement part of
the multilateral obligations accepted by Brazil and the European
Communities pursuant to the WTO Agreement, which came into effect on 1
January 1995. The Oilseeds Agreement is not cited in any Annex to the
WTO Agreement. Although the provisions of certain legal instruments that
entered into force under the GATT 1947 were made part of the GATT 1994
pursuant to the language in Annex 1A incorporating the GATT 1994 into
the WTO Agreement, the Oilseeds Agreement is not one of those legal
instruments.”(3)
4. The Appellate Body on
Guatemala — Cement I examined the Panel’s
interpretation of the relationship between Article 17 of the
Anti-Dumping Agreement and the rules and procedures of the DSU (see also
paragraph 7 below). In this context, the Appellate Body made the
following general statement about Article 1.1 of the DSU:
“Article 1.1 of the DSU establishes an integrated dispute
settlement system which applies to all of the agreements listed in
Appendix 1 to the DSU (the ‘covered agreements’). The DSU is a
coherent system of rules and procedures for dispute settlement which
applies to ‘disputes brought pursuant to the consultation and dispute
settlement provisions of’ the covered agreements. The Anti-Dumping
Agreement is a covered agreement listed in Appendix 1 of the
DSU; the
rules and procedures of the DSU, therefore, apply to disputes brought
pursuant to the consultation and dispute settlement provisions contained
in Article 17 of that Agreement.”(4)
5. In India
— Quantitative
Restrictions, India appealed the Panel’s
conclusion that the Panel was competent to review the justification of
India’s balance-of-payments (BOP) restrictions under Article
XVIII:B of the GATT 1994. India argued that the Panel had erred by failing to
give proper consideration to the “institutional balance” embodied in
the WTO Agreement; according to India, BOP measures were within the
exclusive competence of the BOP Committee and the General Council. India
claimed that in view of the competence of the BOP Committee and the
General Council with respect to balance-of-payments restrictions under
Article XVIII:12 of GATT 1994 and the BOP Understanding, the Panel erred
in finding that the competence of panels to review the justification of
balance-of-payments restrictions is “unlimited”. The Appellate Body
ruled:
“We note that Appendix 1 to the DSU lists ‘Multilateral
Agreements on Trade in Goods’, to which the GATT 1994 belongs, among
the agreements covered by the DSU. A dispute concerning Article XVIII:B
is, therefore, covered by the DSU.
…
Appendix 2 does not identify any special or additional dispute
settlement rules or procedures relating to balance-of-payments
restrictions. It does not mention Article XVIII:B of the GATT
1994, or
any of its paragraphs. The DSU is, therefore, fully applicable to the
current dispute.”(5)
2. Article 1.2: “Special or
additional rules and procedures”
(a) General
6. The Appellate Body on
Guatemala — Cement I stated that special and
additional rules within the meaning of Article 1.2
of the DSU apply only
in the case of “inconsistency” or a “difference” between these
rules and the provisions of the DSU:
“Article 1.2 of the DSU provides that the ‘rules and procedures
of this Understanding shall apply subject to such special or additional
rules and procedures on dispute settlement contained in the covered
agreements as are identified in Appendix 2 to this
Understanding.’
(emphasis added) It states, furthermore, that these special or
additional rules and procedures ‘shall prevail’ over the provisions
of the DSU ‘[t]o the extent that there is a difference between’ the
two sets of provisions. (emphasis added) Accordingly, if there is no ‘difference’,
then the rules and procedures of the DSU apply together with the special
or additional provisions of the covered agreement. In our view, it is
only where the provisions of the DSU and the special or additional rules
and procedures of a covered agreement cannot be read as complementing
each other that the special or additional provisions are to prevail. A
special or additional provision should only be found to prevail over a
provision of the DSU in a situation where adherence to the one provision
will lead to a violation of the other provision, that is, in the case of
a conflict between them. An interpreter must, therefore, identify an
inconsistency or a difference between a provision of the DSU and a
special or additional provision of a covered agreement before concluding
that the latter prevails and that the provision of the DSU does not
apply.”(6)
(b) Article 17 of the
Anti-Dumping Agreement
7. In examining the relationship between
Article 17 of the
Anti-Dumping Agreement and the rules and procedures of the DSU, the
Panel on Guatemala — Cement I found that Article 17 of the
Anti-Dumping Agreement “provides for a coherent set of rules for dispute settlement
specific to anti-dumping cases … that replaces the more general
approach of the DSU”. However, the Appellate Body disagreed with the
Panel and held:
“Article 17.3 of the Anti-Dumping Agreement is not listed in
Appendix 2 of the DSU as a special or additional rule and procedure. It
is not listed precisely because it provides the legal basis for
consultations to be requested by a complaining Member under the
Anti-Dumping Agreement. Indeed, it is the equivalent provision in the
Anti-Dumping Agreement to Articles XXII and
XXIII of the GATT 1994,
which serve as the basis for consultations and dispute settlement under
the GATT 1994, under most of the other agreements in Annex 1A of the
Marrakesh Agreement Establishing the World Trade Organization (the ‘WTO
Agreement’), and under the Agreement on Trade-Related Aspects of
Intellectual Property Rights (the ‘TRIPS Agreement’).
…
Clearly, the consultation and dispute settlement provisions of a
covered agreement are not meant to replace, as a coherent system of
dispute settlement for that agreement, the rules and procedures of the
DSU. To read Article 17 of the
Anti-Dumping Agreement as replacing the
DSU system as a whole is to deny the integrated nature of the WTO
dispute settlement system established by Article 1.1 of the DSU.
For these reasons, we conclude that the Panel erred in finding that
Article 17 of the
Anti-Dumping Agreement ‘provides for a coherent set
of rules for dispute settlement specific to anti-dumping cases … that
replaces the more general approach of the DSU’.”(7)
8. In US
— Hot-Rolled
Steel, the Appellate Body pointed out that
Article 17.6 of the Anti-Dumping Agreement is identified in
Article 1.2
and Appendix 2 of the DSU as one of the special or additional rules and
procedures that prevail over the DSU to the extent that there is a
difference between those provisions and the provisions of the DSU.
Quoting its previous Report on Guatemala — Cement I (see paragraph 6
above), the Appellate Body considered the extent to which Article 17.6
of the Anti-Dumping Agreement can properly be read as “complementing”
the rules and procedures of the DSU or, conversely, the extent to which
Article 17.6 “conflicts” with the DSU. The Appellate Body concluded
that there was no conflict between Articles 17.6(i) and
17.6 (ii) and
the DSU.(8)
9. In US
— Corrosion-Resistant Steel Sunset
Review, the Appellate
Body summed up the situation of Articles 17.4 to
17.7 of the
Anti-Dumping Agreement as special or additional rules as follows:
“We recall, in this regard, that Article 1.1 of the DSU
applies the
rules and procedures contained in the DSU to ‘disputes brought
pursuant to the consultation and dispute settlement provisions of the
agreements listed in Appendix 1’, but that this general rule is, under
Article 1.2 of the DSU, subject to the special or additional rules and
procedures on dispute settlement identified in Appendix 2 to the
DSU.
The Anti-Dumping Agreement is listed as a covered agreement in Appendix
1 of the DSU. Articles 17.4 through
17.7 of the Anti-Dumping Agreement
are listed as special or additional rules in Appendix 2 to the
DSU.”(9)
(c) Article 4.7 of the SCM Agreement
10. In Australia
— Automotive Leather II (Article 21.5 — US), both
parties argued that Article 4.7 of the SCM Agreement should be read
consistently with Article 19.1 of the DSU. The Panel concluded that
Article 19.1 of the DSU is not the basis of the recommendation in a case
involving prohibited subsidies. The Panel stated:
“Rather, the recommendation to ‘withdraw the subsidy’ is
required by Article 4.7 of the
SCM Agreement, which is a special or
additional rule or procedure on dispute settlement, identified in
Appendix 2 to the DSU. It is Article 4.7 which we must interpret and
apply in this dispute. In this respect, we note Article 1.2 of the DSU
… Thus, to the extent that ‘withdraw the subsidy’ requires some
action that is different from ‘bring the measure into conformity’,
it is that different action which prevails.”(10)
II. Article 2
back to top
A. Text of Article 2
Article 2: Administration
1. The Dispute Settlement Body is hereby established to administer
these rules and procedures and, except as otherwise provided in a
covered agreement, the consultation and dispute settlement provisions of
the covered agreements. Accordingly, the DSB shall have the authority to
establish panels, adopt panel and Appellate Body reports, maintain
surveillance of implementation of rulings and recommendations, and
authorize suspension of concessions and other obligations under the
covered agreements. With respect to disputes arising under a covered
agreement which is a Plurilateral Trade Agreement, the term “Member”
as used herein shall refer only to those Members that are parties to the
relevant Plurilateral Trade Agreement. Where the DSB administers the
dispute settlement provisions of a Plurilateral Trade Agreement,
only those Members that are parties to that Agreement may participate in
decisions or actions taken by the DSB with respect to that dispute.
2. The DSB shall inform the relevant WTO Councils and Committees of
any developments in disputes related to provisions of the respective
covered agreements.
3. The DSB shall meet as often as necessary to carry out its
functions within the time-frames provided in this Understanding.
4.
Where the rules and procedures of this Understanding provide for
the DSB to take a decision, it shall do so by consensus.(1)
(footnote original) 1 The DSB shall be deemed to have decided by
consensus on a matter submitted for its consideration, if no Member,
present at the meeting of the DSB when the decision is taken, formally
objects to the proposed decision.
B. Interpretation and
Application of Article 2
1. General
11. With respect to the functions of the DSB, see
Section V.B.3 of
the Chapter on the WTO Agreement.
2. Rules of procedure for DSB meetings
12. As regards the rules of procedure for the meetings of the DSB,
see Section XXXIV below.
3. Date of circulation
13. When there is a reference to the terms “date of circulation”
or “issuance to all Members” or “issuance to the Members” in the
DSU and its additional and special rules, the date to be used is the
date printed on the WTO document to be circulated with the assurance of
the Secretariat that the date printed on the document is the date on
which this document is effectively put in the pigeon holes of
delegations in all three working languages. This practice will be used
on a trial basis and be subject to revision when necessary.(11)
4. Communications with the DSB
14. At its meeting on 31 May 1995, the DSB agreed that, for reasons
of efficiency, communications under the DSU or any other covered
agreements should always be sent to the Secretariat with a copy to the
Chairman.(12)
5. Time-periods
15. At its meeting of 27 September 1995, the DSB
agreed(13) to the
following practice concerning the expiration of time-periods:
“When, under the DSU (and its special or additional rules and
procedures), a time-period within which a communication must be made or
action taken by a Member to exercise or preserve its rights expires on a
non-working day of the WTO Secretariat, any such communication or action
will be deemed to have been made or taken on the WTO non-working day if
lodged on the first working day of the WTO Secretariat following the day
on which such time-period would normally expire.”(14)
6. Rules of conduct
16. As regards the rules of conduct, see
Section XXXIV below.
7. Negotiations on the amendment of the DSU
17. With respect to the negotiations on the improvement of the DSU at
the Special Session of the DSB further to the Doha mandate, see Section XI.B.2 on the WTO Agreement.
III. Article 3 back to top
A. Text of Article 3
Article 3 General Provisions
1. Members affirm their adherence to the principles for the
management of disputes heretofore applied under Articles XXII and
XXIII
of GATT 1947, and the rules and procedures as further elaborated and
modified herein.
2. The dispute settlement system of the WTO is a central element in
providing security and predictability to the multilateral trading
system. The Members recognize that it serves to preserve the rights and
obligations of Members under the covered agreements, and to clarify the
existing provisions of those agreements in accordance with customary
rules of interpretation of public international law. Recommendations and
rulings of the DSB cannot add to or diminish the rights and obligations
provided in the covered agreements.
3. The prompt settlement of situations in which a Member considers
that any benefits accruing to it directly or indirectly under the
covered agreements are being impaired by measures taken by another
Member is essential to the effective functioning of the WTO and the
maintenance of a proper balance between the rights and obligations of
Members.
4. Recommendations or rulings made by the DSB shall be aimed at
achieving a satisfactory settlement of the matter in accordance with the
rights and obligations under this Understanding and under the covered
agreements.
5. All solutions to matters formally raised under the consultation
and dispute settlement provisions of the covered agreements, including
arbitration awards, shall be consistent with those agreements and shall
not nullify or impair benefits accruing to any Member under those
agreements, nor impede the attainment of any objective of those
agreements.
6. Mutually agreed solutions to matters formally raised under the
consultation and dispute settlement provisions of the covered agreements
shall be notified to the DSB and the relevant Councils and Committees,
where any Member may raise any point relating thereto.
7. Before bringing a case, a Member shall exercise its judgement as
to whether action under these procedures would be fruitful. The aim of
the dispute settlement mechanism is to secure a positive solution to a
dispute. A solution mutually acceptable to the parties to a dispute and
consistent with the covered agreements is clearly to be preferred. In
the absence of a mutually agreed solution, the first objective of the
dispute settlement mechanism is usually to secure the withdrawal of the
measures concerned if these are found to be inconsistent with the
provisions of any of the covered agreements. The provision of
compensation should be resorted to only if the immediate withdrawal of
the measure is impracticable and as a temporary measure pending the
withdrawal of the measure which is inconsistent with a covered
agreement. The last resort which this Understanding provides to the
Member invoking the dispute settlement procedures is the possibility of
suspending the application of concessions or other obligations under the
covered agreements on a discriminatory basis vis-à-vis the other
Member, subject to authorization by the DSB of such measures.
8. In
cases where there is an infringement of the obligations assumed under a
covered agreement, the action is considered prima facie to constitute a
case of nullification or impairment. This means that there is normally a
presumption that a breach of the rules has an adverse impact on other
Members parties to that covered agreement, and in such cases, it shall
be up to the Member against whom the complaint has been brought to rebut
the charge.
9. The provisions of this Understanding are without prejudice to the
rights of Members to seek authoritative interpretation of provisions of
a covered agreement through decision-making under the WTO Agreement or a
covered agreement which is a Plurilateral Trade Agreement.
10. It is understood that requests for conciliation and the use of
the dispute settlement procedures should not be intended or considered
as contentious acts and that, if a dispute arises, all Members will
engage in these procedures in good faith in an effort to resolve the
dispute. It is also understood that complaints and counter-complaints in
regard to distinct matters should not be linked.
11. This Understanding shall be applied only with respect to new
requests for consultations under the consultation provisions of the
covered agreements made on or after the date of entry into force of the
WTO Agreement. With respect to disputes for which the request for
consultations was made under GATT 1947 or under any other predecessor
agreement to the covered agreements before the date of entry into force
of the WTO Agreement, the relevant dispute settlement rules and
procedures in effect immediately prior to the date of entry into force
of the WTO Agreement shall continue to apply.(2)
(footnote original)
2 This paragraph shall also be applied to
disputes on which panel reports have not been adopted or fully
implemented.
12. Notwithstanding
paragraph 11, if a complaint based on any of the
covered agreements is brought by a developing country Member against a
developed country Member, the complaining party shall have the right to
invoke, as an alternative to the provisions contained in Articles
4, 5,
6 and 12 of this Understanding, the corresponding provisions of the
Decision of 5 April 1966 (BISD 14S/18), except that where the Panel
considers that the time-frame provided for in paragraph 7 of that
Decision is insufficient to provide its report and with the agreement of
the complaining party, that time-frame may be extended. To the extent
that there is a difference between the rules and procedures of Articles
4, 5,
6 and 12 and the corresponding rules and procedures of the
Decision, the latter shall prevail.
B. Interpretation and
Application of Article 3
1. Article 3.2
(a) “security and predictability”
18. The Appellate Body on
Japan — Alcoholic Beverages II examined
whether the Japanese tax measure governing the taxation of alcoholic
beverages violated Article III:2 of GATT
1994. After concurring with the
Panel’s finding that the Liquor Tax Law was not in compliance with
Article III:2, the Appellate Body made the following general statement
about WTO rules and the concept of “security and predictability”:
“WTO rules are reliable, comprehensible and enforceable. WTO rules
are not so rigid or so inflexible as not to leave room for reasoned
judgements in confronting the endless and ever-changing ebb and flow of
real facts in real cases in the real world. They will serve the
multilateral trading system best if they are interpreted with that in
mind. In that way, we will achieve the ‘security and predictability’
sought for the multilateral trading system by the Members of the WTO
through the establishment of the dispute settlement system.”(15)
19. In US
— Section 301 Trade
Act, the Panel examined the European
Communities’ argument that Section 301 is inconsistent with Article 23
of the DSU as well as various articles of GATT 1994. In its examination,
the Panel discussed the importance of the concept of “security and
predictability” and stated:
“Providing security and predictability to the multilateral trading
system is another central object and purpose of the system which could
be instrumental to achieving the broad objectives of the Preamble. Of
all WTO disciplines, the DSU is one of the most important instruments to
protect the security and predictability of the multilateral trading
system and through it that of the market-place and its different
operators. DSU provisions must, thus, be interpreted in the light of
this object and purpose and in a manner which would most effectively
enhance it. In this respect we are referring not only to preambular
language but also to positive law provisions in the DSU itself.”(16)
20. In Chile
— Alcoholic
Beverages, Chile claimed that the Panel’s
findings on the issues of “not similarly taxed” and “so as to
afford protection” — which had found Chile to be in violation of its
WTO obligations under Article III:2 of GATT 1994
— compromised the
security and predictability of the multilateral trading system, as
provided for in Article 3.2 of the DSU. Chile also claimed that the
Panel had added to the rights and obligations of WTO Members under the
WTO Agreement, contrary to Article 19.2 of the DSU. The Appellate Body
rejected this argument. See paragraph 83 below.
(b) “clarify the existing provisions”
21. In US
— Wool Shirts and
Blouses, the Appellate Body examined
whether a complaining party is entitled to a finding on each of the
legal claims it makes to a panel. The Appellate Body stated:
“Given the explicit aim of dispute settlement that permeates the
DSU, we do not consider that Article 3.2 of the DSU is meant to
encourage either panels or the Appellate Body to ‘make law’ by
clarifying existing provisions of the WTO Agreement outside the context
of resolving a particular dispute. A panel need only address those
claims which must be addressed in order to resolve the matter in issue
in the dispute.”(17)
22. In EC
— Poultry, the Appellate Body held that just as a panel is
not required to address every legal claim made by a party, neither does
it have an obligation to address every argument made by a party. See
paragraph 333 below.
(c) “customary rules of interpretation of public international law”
(i) Rules of “interpretation”
23. In Argentina
— Poultry Anti-Dumping
Duties, Argentina raised as a
preliminary issue that prior to bringing WTO dispute settlement
proceedings against Argentina’s anti-dumping measure, Brazil had
challenged that measure before a MERCOSUR Ad Hoc Arbitral Tribunal.
Argentina requested that, in light of the prior MERCOSUR proceedings,
the Panel refrain from ruling on the claims raised by Brazil in the
present WTO dispute settlement proceedings. In the alternative,
Argentina asserted that the Panel should be bound by the ruling of the
MERCOSUR Tribunal.(18) As regards the subsidiary claim, Argentina claimed
that the earlier MERCOSUR ruling was part of the normative framework to
be applied by the Panel as a result of Article 31.3(c) of the Vienna
Convention, whereby “relevant rules of international law applicable in
the relations between the parties” shall be taken into account for the
purpose of treaty interpretation. The Panel disagreed with Argentina and
pointed out that Article 3.2 of the DSU is concerned with international
rules of treaty interpretation rather than of treaty application:
“We note that Article 3.2 of the
DSU is concerned with
international rules of treaty interpretation. Article 31.3(c) of
the Vienna Convention is similarly concerned with treaty interpretation.
However, Argentina has not sought to rely on any law providing that, in
respect of relations between Argentina and Brazil, the WTO agreements
should be interpreted in a particular way. In particular,
Argentina has not relied on any statement or finding in the MERCOSUR
Tribunal ruling to suggest that we should interpret specific provisions
of the WTO agreements in a particular way. Rather than concerning itself
with the interpretation of the WTO agreements, Argentina actually argues
that the earlier MERCOSUR Tribunal ruling requires us to rule in
a particular way. In other words, Argentina would have us apply
the relevant WTO provisions in a particular way, rather than interpret
them in a particular way. However, there is no basis in Article 3.2 of
the DSU, or any other provision, to suggest that we are bound to rule in
a particular way, or apply the relevant WTO provisions in a particular
way. We note that we are not even bound to follow rulings contained in
adopted WTO panel reports,(19) so we see no reason at all why we should be
bound by the rulings of non-WTO dispute settlement bodies. Accordingly,
we reject Argentina’s alternative arguments regarding Article 31.3(c)
of the Vienna Convention.”(20)(21)
(ii) Article 31 of the Vienna Convention: general rule of
interpretation
24. The Appellate Body on
US — Gasoline stated that the “general
rule of interpretation”, contained in Article 31(22) of the
Vienna
Convention had attained the status of customary or general international
law. The Appellate Body added that WTO law was not to be “read in
clinical isolation from public international law”:
“The ‘general rule of interpretation’ set out above has been
relied upon by all of the participants and third participants, although
not always in relation to the same issue. That general rule of
interpretation has attained the status of a rule of customary or general
international law. As such, it forms part of the ‘customary rules of
interpretation of public international law’ which the Appellate Body
has been directed, by Article 3(2) of the DSU, to apply in seeking to
clarify the provisions of the General Agreement and the other ‘covered
agreements’ of the Marrakesh Agreement Establishing the World Trade
Organization (the ‘WTO Agreement’). That direction reflects a
measure of recognition that the General Agreement is not to be read in
clinical isolation from public international law.”(23)
25. In connection with applying the “customary rules of
interpretation of public international law”, the Appellate Body in
Japan — Alcoholic Beverages II stated:
“Article 31 of the Vienna Convention provides that the words of the
treaty form the foundation for the interpretative process: ‘interpretation
must be based above all upon the text of the treaty’.”(24)
26. The Panel on
US — Section 301 Trade Act held that “the elements
referred to in Article 31 — text, context and object-and-purpose as well
as good faith — are to be viewed as one holistic rule of interpretation
rather than a sequence of separate tests to be applied in a hierarchical
order.”(25) In contrast, the Appellate Body in
US — Shrimp adopted the
following approach:
“A treaty interpreter must begin with, and focus upon, the text of
the particular provision to be interpreted. It is in the words
constituting that provision, read in their context, that the object and
purpose of the states parties to the treaty must first be sought. Where
the meaning imparted by the text itself is equivocal or inconclusive, or
where confirmation of the correctness of the reading of the text itself
is desired, light from the object and purpose of the treaty as a whole
may usefully be sought.”(26)
27. In India
— Patents
(US), the Appellate Body emphasized that the
principles of treaty interpretation “neither require nor condone”
the importation into a treaty of “words that are not there” nor of
“concepts that were not intended”:
“The duty of a treaty interpreter is to examine the words of the
treaty to determine the intentions of the parties. This should be done
in accordance with the principles of treaty interpretation set out in
Article 31 of the Vienna Convention. But these principles of
interpretation neither require nor condone the imputation into a treaty
of words that are not there or the importation into a treaty of concepts
that were not intended…These rules must be respected and applied in
interpreting the TRIPS Agreement or any other covered agreements….Both
panels and the Appellate Body must be guided by the rules of treaty
interpretation set out in the Vienna Convention, and must not add to or
diminish rights and obligations provided in the WTO Agreement.”(27)
28. In EC
— Hormones, the Appellate Body paraphrased its statement
from India — Patents (US), referenced in paragraph 27
above, in the
following terms:
“The fundamental rule of treaty interpretation requires a treaty
interpreter to read and interpret the words actually used by the
agreement under examination, not words the interpreter may feel should
have been used.”(28)
29. The Panel on Canada
— Pharmaceutical Patents held that in the
case of the TRIPS Agreement, the context of certain TRIPS provisions to
which the Panel could have recourse for interpretative purposes also
encompassed provisions of the international agreements on intellectual
property incorporated into the TRIPS Agreement, such as the Berne
Convention of 1971:
“The Panel noted that, in the framework of the TRIPS
Agreement,
which incorporates certain provisions of the major pre-existing
international instruments on intellectual property, the context to which
the Panel may have recourse for purposes of interpretation of specific
TRIPS provisions, in this case Articles 27 and
28, is not restricted to
the text, Preamble and Annexes of the TRIPS Agreement itself, but also
includes the provisions of the international instruments on intellectual
property incorporated into the TRIPS Agreement, as well as any agreement
between the parties relating to these agreements within the meaning of
Article 31(2) of the Vienna Convention on the Law of Treaties. Thus, as
the Panel will have occasion to elaborate further below, Article 9(2) of
the Berne Convention for the Protection of Literary and Artistic Works
(1971) (hereinafter referred to as the Berne Convention) is an important
contextual element for the interpretation of Article 30 of the TRIPS
Agreement.”(29)
(iii) Article 31(3)(b) of the Vienna Convention: subsequent
practice(30)
Panel Reports
30. In Japan
— Alcoholic Beverages
II, the Panel found that “panel
reports adopted by the Contracting Parties constitute subsequent
practice in a specific case”. The Appellate Body disagreed(31)
“Article 31(3)(b) of the Vienna Convention states that ‘any
subsequent practice in the application of the treaty which establishes
the agreement of the parties regarding its interpretation’ is to be
‘taken into account together with the context’ in interpreting the
terms of the treaty. Generally, in international law, the essence of
subsequent practice in interpreting a treaty has been recognized as a
‘concordant, common and consistent’ sequence of acts or
pronouncements which is sufficient to establish a discernible pattern
implying the agreement of the parties regarding its interpretation. An
isolated act is generally not sufficient to establish subsequent
practice; it is a sequence of acts establishing the agreement of the
parties that is relevant.”(32),(33)
Practice amongst Members
31. In Chile
— Price Band
System, Argentina had argued before the
Panel that Chile’s price band system was a measure “of the kind
which has been required to be converted into ordinary customs duties”
and which, by the terms of Article 4.2 of the Agreement on Agriculture
(see Section V.B.3(a) of the Chapter on the Agreement on Agriculture)
Members are required not to maintain. As regards the interpretation of
the phrase “measures which have been required to be converted into
ordinary customs duties”, Chile contended that it was “highly
relevant” that no country that had had a price band system in place
before the conclusion of the Uruguay Round had actually converted it
into ordinary customs duties. The Appellate Body looked into the
possibility that this practice could be considered “subsequent
practice” pursuant to Article 31(3)(b) of the Vienna Convention and
therefore a practice relevant to the interpretation of Article
4.2. The
Appellate Body referred to its definition of “subsequent practice”
in its Report in Japan — Alcoholic Beverages II (see paragraph 30
above)
and noted that neither the Panel record nor the submissions of the
parties suggested that there was a discernible pattern of acts or
pronouncements implying an agreement among WTO Members on the
interpretation of Article 4.2. The Appellate Body thus concluded that
this practice of some Members alleged by Chile did not amount to a “subsequent
practice” within the meaning of Article 31(3)(b) of the Vienna
Convention.(34)
(iv) Article 31.4: specialized meaning
32. In Mexico
— Telecoms, the Panel, in the process of considering
the meaning of various telecommunications terms (such as linking and
interconnection), decided that they were terms that may be given a “special
meaning”, according to Article 31.4 of the Vienna Convention, “if it
is established that the parties so intended”. The Panel concluded
that, given that the provision at issue was a technical one that
appeared in a specialized service sector, the Panel was “entitled to
examine what ‘special meaning’ it may have in the telecommunications
context”.(35)
(v) Article 32 of the Vienna Convention: supplementary means of
interpretation
General
Status of Article 32
33. In Japan
— Alcoholic Beverages
II, the Appellate Body recalled
its statement in US — Gasoline that there is a need to achieve
clarification by reference to the fundamental rule of treaty
interpretation set out in Article 31(1) of the Vienna Convention and
that this general rule “has attained the status of a rule of customary
or general international law”.(36) The Appellate Body then went on to
state in Japan — Alcoholic Beverages II that Article 32 of the Vienna
Convention,(37) which deals with the role of supplementary means of
interpretation, “has also attained the same status”.(38)
When to resort to Article 32
34. In Canada
— Dairy, the Appellate Body, disagreeing with the
Panel, considered that a certain notation in Canada’s Schedule was not
clear and thus, it was “appropriate to turn to ‘supplementary means
of interpretation’ pursuant to Article 32 of the Vienna Convention”.(39)
Circumstances of the conclusion of a treaty
Negotiating history
35. The Appellate Body on
EC — Computer Equipment found that the “circumstances
of [the] conclusion” of a treaty, which is a supplementary means of
interpretation under Article 32 of the Vienna Convention, permits in
certain cases the examination of the historical background against which
the treaty was negotiated:
“The application of these rules in Article 31 of the
Vienna
Convention will usually allow a treaty interpreter to establish the
meaning of the term. However, if after applying Article 31 the meaning
of the term remains ambiguous or obscure, or leads to a result which is
manifestly absurd or unreasonable, Article 32 allows a treaty
interpreter to have recourse to:
‘… supplementary means of interpretation, including the
preparatory work of the treaty and the circumstances of its conclusion.’
With regard to ‘the circumstances of [the] conclusion’ of a
treaty, this permits, in appropriate cases, the examination of the
historical background against which the treaty was negotiated.”(40)
36. In US
— Export
Restraints, the Panel recalled the decision of the
Appellate Body in Japan — Alcoholic Beverages II (see paragraph 30
above) and stated that “pursuant to Article 32 of the Vienna
Convention, negotiating history can thus be invoked as a supplementary
means of interpretation, to confirm a conclusion reached on the basis of
a textual and contextual analysis of a treaty”.(41)
37. In Egypt
— Steel
Rebar, the Panel referred to the negotiating
history of Annex II of the Anti-Dumping Agreement as confirmation of its
views that the provisions of this Annex that address what information
can be used as facts available “have to do with ensuring the
reliability of the information used by the investigating authority”:
“It is clear that the provisions of Annex II that address what
information can be used as facts available (which, along with the other
provisions of Annex II, ‘shall be observed’) have to do with
ensuring the reliability of the information used by the investigating
authority. This view may further be confirmed, as foreseen in Article 32
of the Vienna Convention on the Law of Treaties,(42) by the negotiating
history of Annex II. In particular, this Annex was originally developed
by the Tokyo Round Committee on Anti-Dumping Practices, which adopted
it on 8 May 1984 as a ‘Recommendation Concerning Best Information
Available in Terms of Article 6:8’.(43) During the Uruguay Round
negotiations, the substantive provisions of the original recommendation
were incorporated with almost no changes as Annex II to the AD
Agreement. A preambular paragraph to the original recommendation, which
was not retained when Annex II was created, in our view, provides some
insight into the intentions of the drafters concerning its application.
This paragraph reads as follows:
The authorities of the importing country have a right and an
obligation to make decisions on the basis of the best information
available during the investigation from whatever source, even where
evidence has been supplied by the interested party. The Anti-Dumping
Code recognizes the right of the importing country to base findings on
the facts available when any interested party refuses access to or does
not provide the necessary information within a reasonable period, or
significantly impedes the investigation (Article
6:8). However, all
reasonable steps should be taken by the authorities of the importing
countries to avoid the use of information from unreliable sources.
To us, this preambular language conveys that the full package of
provisions in the recommendation, applicable in implementing Article 6:8
of the Tokyo Round Anti-Dumping Code, was intended, inter alia, to
ensure that in using facts available (i.e., in applying Article 6:8),
information from unreliable sources would be avoided.”(44)
Customs classification practice
38. The Appellate Body on
EC — Computer Equipment, further considered
that the classification practice of the European Communities was part of
the “circumstances of the conclusion” of the WTO Agreement and that
this may be used as a supplementary means of interpretation:
“In the light of our observations on ‘the circumstances of [the]
conclusion’ of a treaty as a supplementary means of interpretation
under Article 32 of the Vienna Convention, we consider that the
classification practice in the European Communities during the Uruguay
Round is part of ‘the circumstances of [the] conclusion’ of the WTO
Agreement and may be used as a supplementary means of interpretation
within the meaning of Article 32 of the Vienna Convention.”(45)
39. With respect to the question whether the classification practice
of one country, existing at the time of tariff negotiation, was relevant
for the interpretation of a country’s Schedule of concessions, the
Appellate Body, in EC — Computer Equipment, emphasized that while of
limited value, such unilateral practice was not irrelevant; also, the
Appellate Body found that where such unilateral practice of one Member
was inconsistent, it could not be considered relevant:
“We note that the Panel examined the classification practice of
only the European Communities, and found that the classification of LAN
equipment by the United States during the Uruguay Round tariff
negotiations was not relevant. The purpose of treaty interpretation is
to establish the common intention of the parties to the treaty. To
establish this intention, the prior practice of only one of the parties
may be relevant, but it is clearly of more limited value than the
practice of all parties. In the specific case of the interpretation of a
tariff concession in a Schedule, the classification practice of the
importing Member, in fact, may be of great importance. However, the
Panel was mistaken in finding that the classification practice of the
United States was not relevant.
…
Then there is the question of the consistency of prior practice.
Consistent prior classification practice may often be significant.
Inconsistent classification practice, however, cannot be relevant in
interpreting the meaning of a tariff concession.”(46)
Agreements between Members
40. In EC
— Poultry, the Appellate Body found that a bilateral
agreement between two WTO Members could serve as “supplementary means”
of interpretation for a provision of a covered agreement:
“[T]he Oilseeds Agreement may serve as a supplementary means of
interpretation of Schedule LXXX pursuant to Article 32 of the Vienna
Convention, as it is part of the historical background of the
concessions of the European Communities for frozen poultry meat.”(47)
Working documents of the GATT Secretariat
41. In Mexico
— Telecoms, the Panel considered that an Explanatory
Note issued by the GATT Secretariat as a working document for the Group
of Negotiations on Services was part of the “circumstances” of the
conclusion of the GATS, within the meaning of Article 32 of the Vienna
Convention:
“In interpreting the scope of cross border supply in
Article I:2(a)
of the GATS, we need not decide whether the Explanatory Note provides
‘context’ (as an agreement or instrument made in connection with the
conclusion of the GATS) under paragraph 2 of Article 31 of the Vienna
Convention, or whether it can be ‘taken into account’, together with
the context, as a subsequent agreement or practice under paragraph 3 of
the same provision. In any case, we consider that the source, content
and use of the Explanatory Note make it part of the ‘circumstances’
of the conclusion of the GATS, within the meaning of Article 32 of the
Vienna Convention. We may therefore properly have recourse to the
Explanatory Note to confirm our understanding of the ordinary meaning of
Article I:2(a) of the GATS.”(48)
“In dubio mitius”
42. In
EC
— Hormones, the Appellate Body referred to “the
interpretative principle of in dubio mitius” as a supplementary means
of interpretation “widely recognized in international law”. It there
stated that “the principle of in dubio mitius applies in interpreting
treaties, in deference to the sovereignty of states. If the meaning of a
term is ambiguous, that meaning is to be preferred which is less onerous
to the party assuming an obligation, or which interferes less with the
territorial and personal supremacy of a party, or involves less general
restrictions upon the parties.”(49)
(vi) Good faith
43. In US
— Shrimp, the Appellate Body held that the chapeau of
Article XX was “but one expression of good faith” and also reflected
the notion of “abus de droit”:
“The chapeau of Article XX is, in fact, but one expression of the
principle of good faith. This principle, at once a general principle of
law and a general principle of international law, controls the exercise
of rights by states. One application of this general principle, the
application widely known as the doctrine of abus de droit, prohibits the
abusive exercise of a state’s rights and enjoins that whenever the
assertion of a right ‘impinges on the field covered by [a] treaty
obligation, it must be exercised bona fide, that is to say, reasonably.’(50)
An abusive exercise by a Member of its own treaty right thus results in
a breach of the treaty rights of the other Members and, as well, a
violation of the treaty obligation of the Member so acting. Having said
this, our task here is to interpret the language of the chapeau, seeking
additional interpretative guidance, as appropriate, from the general
principles of international law.”(51)
44. In
US — Hot-Rolled Steel, the Appellate Body noted that the
pervasive principle of good faith “informs the provisions of the
Anti-Dumping Agreement, as well as the other covered agreements”.(52)
45. In US
— Export
Restraints,(53) the Panel mentioned the decision of
the Appellate Body in US — Gasoline which referred to “a fundamental
rule of treaty interpretation [which] has received its most
authoritative and succinct expression in [Article 31.1 of] the Vienna
Convention on the Law of Treaties (‘Vienna Convention’)”,(54)
i.e.
good faith.
46. In EC
— Computer
Equipment, the Appellate Body examined whether
the Panel had erred in interpreting the meaning of a tariff concession
in the European Communities Schedule in light of the “legitimate
expectations” of an exporting Member (see Section on legitimate
expectations, paragraphs 73-76 below). The Appellate Body disagreed with
the Panel’s finding that the tariff concession of a Member may be
determined on the basis of the “legitimate expectation” of just one
(namely the exporting) Member and emphasized that it was rather the
common intention of the parties that should be ascertained. The
Appellate Body stated:
“[W]e do not agree with the Panel that interpreting the meaning of
a concession in a Member’s Schedule in the light of the ‘legitimate
expectations’ of exporting Members is consistent with the principle of
good faith interpretation under Article 31 of the Vienna Convention.
Recently, in India — Patents, the panel stated that good faith
interpretation under Article 31 required ‘the protection of legitimate
expectations’. We found that the panel had misapplied Article 31 of
the Vienna Convention…
The purpose of treaty interpretation under Article 31 of the
Vienna
Convention is to ascertain the common intentions of the parties. These
common intentions cannot be ascertained on the basis of the subjective
and unilaterally determined ‘expectations’ of one of the parties to
a treaty. Tariff concessions provided for in a Member’s Schedule — the
interpretation of which is at issue here — are reciprocal and result
from a mutually-advantageous negotiation between importing and exporting
Members. A Schedule is made an integral part of the GATT 1994 by Article
II:7 of the GATT 1994. Therefore, the concessions provided for in that
Schedule are part of the terms of the treaty. As such, the only rules
which may be applied in interpreting the meaning of a concession are the
general rules of treaty interpretation set out in the Vienna
Convention.”(55)
47. In US
— Offset Act (Byrd
Amendment), the Appellate Body,
recalling its previous reports in US — Shrimp and US — Hot-Rolled
Steel,
acknowledged that “there is a basis for a dispute settlement panel to
determine, in an appropriate case, whether a Member has not acted in
good faith”.(56) However, it further stressed that “[n]othing …
in the covered agreements supports the conclusion that simply because a
WTO Member is found to have violated a substantive treaty provision, it
has therefore not acted in good faith. In our view, it would be
necessary to prove more than mere violation to support such a
conclusion.”(57)
48. Interpreting the above considerations by the Appellate Body, the
Panel in Argentina — Poultry Anti-Dumping Duties explained that “two
conditions must be satisfied before a Member may be found to have failed
to act in good faith. First, the Member must have violated a substantive
provision of the WTO agreements. Second, there must be something ‘more
than mere violation’.”(58)
49. As regards the application of the principle of good faith in the
context of the obligation to engage in dispute settlement procedures in
good faith in an effort to resolve a dispute pursuant to Article 3.10 of
the DSU, see Section III.B.6(a) below.
(vii) Principle of effective treaty interpretation
50. The Appellate Body on
US — Gasoline considered the principle of
effective treaty interpretation (ut res magis valeat quam pereat)(59) as
“one of the corollaries of the ‘general rule of interpretation’ in
the Vienna Convention”. In particular, the Appellate Body stated:
“One of the corollaries of the ‘general rule of interpretation’
in the Vienna Convention is that interpretation must give meaning and
effect to all the terms of a treaty. An interpreter is not free to adopt
a reading that would result in reducing whole clauses or paragraphs of a
treaty to redundancy or inutility.”(60)(61)
51. In application of the principle of effective treaty
interpretation as defined in paragraph 50 above, the Appellate Body in
US — Gasoline found that the Panel had erroneously applied the same
standard of discrimination to Article III:4 of GATT 1994 and to the
chapeau of Article XX of GATT 1994. The Appellate Body held that to do
so would be to effectively deprive the chapeau of its meaning and found
that such an approach would be contrary to the principle of giving “meaning
and effect to all the terms of a treaty”:
“The enterprise of applying Article XX would clearly be an
unprofitable one if it involved no more than applying the standard used
in finding that the baseline establishment rules were inconsistent with
Article III:4. That would also be true if the finding were one of
inconsistency with some other substantive rule of the General
Agreement.
The provisions of the chapeau cannot logically refer to the same
standard(s) by which a violation of a substantive rule has been
determined to have occurred. To proceed down that path would be both to
empty the chapeau of its contents and to deprive the exceptions in
paragraphs (a) to (j) of meaning … One of the corollaries of the ‘general
rule of interpretation’ in the Vienna Convention is that
interpretation must give meaning and effect to all the terms of a
treaty. An interpreter is not free to adopt a reading that would result
in reducing whole clauses or paragraphs of a treaty to redundancy or
inutility.”(62)
52. In Japan
— Alcoholic Beverages
II, the Appellate Body referred to
its ruling in US — Gasoline (see paragraph 50
above) and indicated that
“a fundamental tenet of treaty interpretation flowing from the general
rule of interpretation set out in Article 31 is the principle of
effectiveness (ut res magis valeat quam perea)”.(63) The Appellate Body
concluded that “Article III:1 constitutes part of the context of
Article III:2, in the same way that it constitutes part of the context
of each of the other paragraphs in Article III. Any other reading of
Article III would have the effect of rendering the words of Article
III:1 meaningless, thereby violating the fundamental principle of
effectiveness in treaty interpretation.”(64)
53. In US
— Underwear, the Appellate Body invoked the principle of
effective interpretation to sustain its conclusion that the common,
day-to-day, implication which arises from the language of Article 6.7 of
the Agreement on Textiles and Clothing is that a restraint is to be
applied in the future, after the consultations, should these prove
fruitless and the proposed measure not be withdrawn.(65)
54. In
Korea — Dairy, the Appellate Body recalled the principle of
effective treaty interpretation as it had defined it in US — Gasoline
(see paragraph 24 above) and concluded that:
“In light of the interpretive principle of effectiveness, it is the
duty of any treaty interpreter to ‘read all applicable provisions of a
treaty in a way that gives meaning to all of them, harmoniously.’(66) An
important corollary of this principle is that a treaty should be
interpreted as a whole, and, in particular, its sections and parts
should be read as a whole.(67)
Article II:2 of the WTO Agreement expressly
manifests the intention of the Uruguay Round negotiators that the
provisions of the WTO Agreement and the Multilateral Trade Agreements
included in its Annexes 1, 2 and 3 must be read as a whole.”(68)
55. In
Korea — Dairy, the Appellate Body applied the principle of
effective treaty interpretation to the relationship between the
Agreement on Safeguards and Article XIX of GATT 1994 and concluded that
“having said that all of the provisions of a treaty must be given
meaning and legal effect, we believe that the clause in Article XIX:1(a)
— ‘as a result of unforeseen developments and of the effect of the
obligations incurred by a Member under this Agreement, including tariff
concessions …’ — must have meaning”.(69) The Appellate Body
therefore disagreed with the Panel on the latter’s conclusion whereby
the clause in Article XIX:1(a) of GATT 1994 — “as a result of
unforeseen developments and of the effect of the obligations incurred by
a Member under this Agreement, including tariff concessions … does not
add conditions for any measure to be applied pursuant to Article XIX but
rather serves as an explanation of why an Article XIX measure may be
needed”.(70)
56. The same issue as referenced in
paragraph 55 above arose in
Argentina — Footwear (EC). In this case, the Appellate Body also
considered whether the Panel had reached a correct conclusion concerning
the relationship between the Agreement on Safeguards and Article XIX of
GATT 1994. The Appellate Body agreed with the Panel that “Article XIX
of GATT and the Safeguards Agreement must a fortiori be read as
representing an inseparable package of rights and disciplines which have
to be considered in conjunction”. However, the Appellate Body reversed
the Panel’s finding that the “express omission of the criterion of
unforeseen developments in the [Agreement on Safeguards] (which
otherwise transposes, reflects and refines in great detail the essential
conditions for the imposition of safeguard measures provided for in
Article XIX of GATT) must … have meaning”.(71) The Appellate Body
held:
“[A] treaty interpreter must read all applicable provisions of a
treaty in a way that gives meaning to all of them, harmoniously. And, an
appropriate reading of this ‘inseparable package of rights and
disciplines’ must, accordingly, be one that gives meaning to all the
relevant provisions of these two equally binding agreements.”(72)
57. In
Canada — Dairy, the Appellate Body made it clear that a treaty
interpreter cannot lightly assume that a WTO Member intended no specific
purpose when inscribing a term in its schedule.
“In interpreting the language in Canada’s Schedule, the Panel
focused on the verb ‘represents’ and opined that, because of the use
of this verb, the notation was no more than a ‘description’ of the
‘way the size of the quota was determined’. The net consequence of
the Panel’s interpretation is a failure to give the notation in Canada’s
Schedule any legal effect as a ‘term and condition’. If the language
is merely a ‘description’ or a ‘narration’ of how the quantity
was arrived at, we do not see what purpose it serves in being inscribed
in the Schedule. The Panel, in other words, acted upon the assumption
that Canada projected no identifiably necessary or useful qualifying or
limiting purpose in inscribing the notation in its Schedule. The Panel
thus disregarded the principle of effectiveness in its interpretive
effort.”(73)
58. In
US — Section 211 Appropriations Act, the Appellate Body
disagreed with the Panel’s view that the words “in respect of” in
Article 2.1 of the TRIPS Agreement have the effect of “conditioning”
Members’ obligations under the Articles of the Paris Convention (1967)
incorporated into the TRIPS Agreement, with the result that trade names
are not covered. In reference to its previous rulings in US — Gasoline
(see paragraph 50 above) and Japan — Alcoholic Beverages II (see
paragraph 52 above) concerning the principle of effective
interpretation, the Appellate Body considered that to “adopt the Panel’s
approach would be to deprive Article 8 of the Paris Convention (1967),
as incorporated into the TRIPS Agreement by virtue of Article
2.1 of
that Agreement, of any and all meaning and effect”.(74)
(viii) Article 33 of the Vienna Convention: plurilingual treaties
59. In
India — Quantitative Restrictions, the Panel, when examining
the meaning of certain terms in the Ad Note to Article XVIII:11 of the
GATT 1994, noted that its interpretation was consistent with the Spanish
and French versions of the Agreement.(75)
60. In
EC — Asbestos, the Panel considered that “[a]s the
WTO
Agreement is a treaty with authentic texts in three languages, it is …
important to bear in mind the spirit underlying the provisions of
Article 33(76)”.(77) The Appellate Body also referred to the different
authentic languages and examined the term “similar” as compared to
“produits similaires” and “productos similares” since both
French and Spanish versions of the WTO Agreements, “together with the
English version, are equally authentic(78)”.(79)
61. In
Chile — Price Band System, the Panel, when attempting to
define the term “ordinary customs duty”, had found that the
dictionary meanings of the English term, on the one hand, and the French
and Spanish corresponding terms, on the other hand, differed in the way
they defined “ordinary”. The Appellate Body, which disagreed with
the Panel’s interpretation of this term, noted that the Panel had
interpreted the French and Spanish versions of the term “ordinary
customs duty” to mean something different from the ordinary meaning of
the English version of that term. In this regard, the Appellate Body
stated that “It is difficult to see how, in doing so, the Panel took
into account the rule of interpretation codified in Article 33(4)(80) of
the Vienna Convention whereby ‘when a comparison of the authentic
texts discloses a difference of meaning …, the meaning which best
reconciles the texts … shall be adopted’ (emphasis added).(81)
(ix) Presumption
against conflict
GATT 1994 and the Annex 1A Agreements
62. In
EC — Bananas III, given the existence of claims raised under
GATT 1994, the Licensing Agreement and the TRIMs
Agreement, the Panel
was required to consider the interpretative interrelationship of these
three agreements. In so doing, it first referred to the General
Interpretative Note to Annex 1A of the WTO Agreement, which provides
that in the event of conflict between a provision of the GATT 1994 and
another Agreement of Annex 1A, the provision of the other Agreement
prevails. Noting that both the Licensing Agreement and the TRIMs
Agreement are agreements in Annex 1A to WTO Agreement, the Panel, in a
finding not reviewed by the Appellate Body, concluded that, in the case
before it, “no conflicting, i.e. mutually exclusive, obligations arise
from the provisions of the three Agreements … ”.(82) See
paragraphs 902-911
below.
Issue of lex specialis / conflict
63. In
Indonesia — Autos, Indonesia argued that the measures under
examination were subsidies and therefore the SCM Agreement, being
lex specialis, was the only “applicable law” (to the exclusion of other
WTO provisions). The Panel recalled that a presumption against conflict
existed in public international law:
“We recall the Panel’s finding in Indonesia
— Autos, a dispute
where
‘In considering Indonesia’s defence that there is a general
conflict between the provisions of the SCM Agreement and those of
Article III of GATT, and consequently that the SCM Agreement is the only
applicable law, we recall first that in public international law there
is a presumption against conflict. This presumption is especially
relevant in the WTO context(83) since all WTO agreements, including GATT
1994 which was modified by Understandings when judged necessary, were
negotiated at the same time, by the same Members and in the same forum.
In this context we recall the principle of effective interpretation
pursuant to which all provisions of a treaty (and in the WTO system all
agreements) must be given meaning, using the ordinary meaning of words.’”(84)
64. As regards the presumption against conflict when in relation to
special or additional rules and procedure, see paragraphs
6-8 above.
(x) Non-retroactivity of treaties
65. In
Brazil — Desiccated Coconut, the Appellate Body discussed
Article 28 of the Vienna Convention,(85) i.e. the provision containing the
general principle of non-retroactivity of treaties:
“The fundamental question in this case is one of the temporal
application of one set of international legal norms, or the successor
set of norms, to a particular measure taken during the period of
co-existence of the GATT 1947 and the Tokyo Round SCM Code with the WTO
Agreement. Article 28 of the Vienna Convention contains a general
principle of international law concerning the non-retroactivity of
treaties.
…
Article 28 states the general principle that a treaty shall not be
applied retroactively ‘unless a different intention appears from the
treaty or is otherwise established’. Absent a contrary intention, a
treaty cannot apply to acts or facts which took place, or situations
which ceased to exist, before the date of its entry into force.”(86)
66. In
EC — Hormones, the Appellate Body examined the Panel’s
finding that the SPS Agreement should apply to the European Communities
measures that were enacted before the entry into force of the WTO
Agreement on 1 January 1995 because the measures continued to exist
after that date and the SPS Agreement does not indicate any intention to
limits its application to measures enacted after the entry into force of
the WTO Agreement. The Appellate Body stated:
“We agree with the Panel that the SPS Agreement would apply to
situations or measures that did not cease to exist, such as the 1981 and
1988 Directives, unless the SPS Agreement reveals a contrary intention.
We also agree with the Panel that the SPS Agreement does not reveal such
an intention. The SPS Agreement does not contain any provision limiting
the temporal application of the SPS Agreement, or of any provision
thereof, to SPS measures adopted after 1 January 1995. In the absence of
such a provision, it cannot be assumed that central provisions of the
SPS Agreement, such as Articles 5.1 and
5.5, do not apply to measures
which were enacted before 1995 but which continue to be in force
thereafter. If the negotiators had wanted to exempt the very large group
of SPS measures in existence on 1 January 1995 from the disciplines of
provisions as important as Articles 5.1 and
5.5, it appears reasonable
to us to expect that they would have said so explicitly. Articles 5.1
and 5.5 do not distinguish between SPS measures adopted before 1 January
1995 and measures adopted since; the relevant implication is that they
are intended to be applicable to both.”(87)
67. In
Canada — Patent Term, the Appellate Body stated that Article
70.1 of the TRIPS Agreement excludes obligations in respect of “acts
which occurred” before the date of the application of the TRIPS
Agreement but does not exclude rights and obligations in respect of
continuing situations. The Appellate Body, in noting that its
interpretation did not lead to a retroactive application of the TRIPS
Agreement, stated:
“Article 28 of the Vienna Convention covers not only any ‘act’,
but also any ‘fact’ or ‘situation which ceased to exist’.
Article 28 establishes that, in the absence of a contrary intention,
treaty provisions do not apply to ‘any situation which ceased to exist’
before the treaty’s entry into force for a party to the treaty.
Logically, it seems to us that Article 28 also necessarily implies that,
absent a contrary intention, treaty obligations do apply to any ‘situation’
which has not ceased to exist — that is, to any situation that arose in
the past, but continues to exist under the new treaty. Indeed, the very
use of the word ‘situation’ suggests something that subsists and
continues over time; it would, therefore, include ‘subject matter
existing … and which is protected’, such as Old Act patents at issue
in this dispute, even though those patents, and the rights conferred by
those patents, arose from ‘acts which occurred’ before the date of
application of the TRIPS Agreement for Canada.
This interpretation is confirmed by the Commentary on Article 28,
which forms part of the preparatory work of the Vienna Convention:
…
We note that Article 28 of the Vienna Convention is not applicable if
‘a different intention appears from the treaty or is otherwise
established’. We see no such ‘different intention’ in Article 70.
Despite some differences in wording and structure from Article 28, we do
not see Article 70.1 as in any way establishing ‘a different intention’
within the meaning of Article 28 of the Vienna Convention.”(88)
(xi) State responsibility
General
68. In
Turkey — Textiles, the Panel noted that in public
international law, Turkey could be held responsible for the measures
taken by the customs union between Turkey and the European Communities.
The Panel noted and quoted the separate opinion of Judge Shahabuddeen in
the Nauru case before the ICJ:
“’[T]he [International Law Commission] considered, that
where
States act through a common organ, each State is separately answerable
for the wrongful act of the common organ. That view, it seems to me,
runs in the direction of supporting Nauru’s contention that each of
the three States in this case is jointly and severally responsible for
the way Nauru was administered on their behalf by Australia, whether or
not Australia may be regarded as technically as a common organ….”(89)
(Emphasis added.)(90)
69. The Panel on
Turkey — Textiles also noted the International Law
Commission’s commentaries to the adopted report:
“A similar conclusion is called for in cases of parallel
attribution of a single course of conduct to several States, as when the
conduct in question has been adopted by an organ common to a number of
States. According to the principles on which the articles of chapter II
of the draft are based, the conduct of the common organ cannot be
considered otherwise than as an act of each of the States whose common
organ it is. If that conduct is not in conformity with an international
obligation, then the two or more States will concurrently have committed
separate, although identical, internationally wrongful acts. It is
self-evident that the parallel commission of identical offences by two
or more States is altogether different from participation by one of
those States in an internationally wrongful act committed by the other.”(91)
(Emphasis added.)(92)
70. In
US — Section 301 Trade Act, although it eventually held that a
statute “which … reserves the right for the Member concerned to do
something which it has promised not to do under Article 23.2(a)” was a
violation of Article 23.2(a) read together with
Article 23.1 (see
paragraph 3 below), the Panel made the following general statement on
State responsibility:
“[U]nder traditional public international law, legislation under
which an eventual violation could, or even would, subsequently take
place, does not normally in and of itself engage State responsibility.
If, say, a State undertakes not to expropriate property of foreign
nationals without appropriate compensation, its State responsibility
would normally be engaged only at the moment foreign property had
actually been expropriated in a given instance.”(93)
Proportionality of countermeasures
71. In
US — Cotton Yarn, the Appellate Body referred to the rules of
general international law on state responsibility as supporting its
conclusions on the reasons why a comparative analysis is needed as part
of the attribution of serious damage analysis under Article
6.4, second
sentence of the Agreement on Textiles and Clothing. The Appellate Body
pointed out the need for proportionality as between the serious damage
and the countermeasure imposed. It indicated that “[its] view is
supported further by the rules of general international law on state
responsibility, which require that countermeasures in response to
breaches by states of their international obligations be commensurate
with the injury suffered”:
“[T]he part of the total serious damage attributed to
an exporting
Member must be proportionate to the damage caused by the imports from
that Member. Contrary to the view of the United States, we believe that
Article 6.4, second sentence, does not permit the attribution of the
totality of serious damage to one Member, unless the imports from that
Member alone have caused all the serious damage.
Our view is supported further by the rules of general international
law on state responsibility, which require that countermeasures in
response to breaches by states of their international obligations be
commensurate with the injury suffered. In the same vein, we note that
Article 22.4 of the DSU stipulates that the suspension of concessions
shall be equivalent to the level of nullification or impairment. This
provision of the DSU has been interpreted consistently as not justifying
punitive damages. These two examples illustrate the consequences of
breaches by states of their international obligations, whereas a
safeguard action is merely a remedy to WTO consistent ‘fair trade’
activity. It would be absurd if the breach of an international
obligation were sanctioned by proportionate countermeasures, while, in
the absence of such breach, a WTO Member would be subject to a
disproportionate and, hence, ‘punitive’, attribution of serious
damage not wholly caused by its exports. In our view, such an exorbitant
derogation from the principle of proportionality in respect of the
attribution of serious damage could be justified only if the drafters of
the ATC had expressly provided for it, which is not the case.”(94)
72. In
US — Line Pipe, also in the context of the application of a
safeguard, the Appellate Body emphasized the importance of the state
responsibility rules which command the need for proportionality when
imposing countermeasures:
“If the pain inflicted on exporters by a safeguard measure were
permitted to have effects beyond the share of injury caused by increased
imports, this would imply that an exceptional remedy, which is not meant
to protect the industry of the importing country from unfair or illegal
trade practices, could be applied in a more trade-restrictive manner
than countervailing and anti-dumping duties. On what basis should the
WTO Agreement be interpreted to limit a countermeasure to the extent of
the injury caused by unfair practices or a violation of the treaty but
not so limit a countermeasure when there has not even been an allegation
of a violation or an unfair practice?
…
We note as well the customary international law rules on state
responsibility, to which we also referred in US — Cotton Yarn. We
recalled there that the rules of general international law on state
responsibility require that countermeasures in response to breaches by
States of their international obligations be proportionate to such
breaches. Article 51 of the International Law Commission’s Draft
Articles on Responsibility of States for Internationally Wrongful Acts
provides that ‘countermeasures must be commensurate with the injury
suffered, taking into account the gravity of the internationally
wrongful act and the rights in question’. Although Article 51 is part
of the International Law Commission’s Draft Articles, which do not
constitute a binding legal instrument as such, this provision sets out a
recognized principle of customary international law. We observe also
that the United States has acknowledged this principle elsewhere. In its
comments on the International Law Commission’s Draft Articles, the
United States stated that ‘under customary international law a rule of
proportionality applies to the exercise of countermeasures’.”(95)
(xii) Legitimate expectations
73. In
Japan — Alcoholic Beverages II, the Appellate Body held that
adopted panel reports create legitimate expectations among WTO Members.
See paragraph 80 below.
74. The Appellate Body on
India — Patents (US) held that the
principles of treaty interpretation “neither require nor condone”
the importation into a treaty of “words that are not there” or “concepts
that were not intended”. See paragraph 27 above. The Appellate Body
made this statement while reversing the Panel’s finding that “[t]he
protection of legitimate expectations of Members regarding the
conditions of competition is a well-established GATT principle, which
derives in part from Article XXIII”(96) and that, when interpreting the
text of the TRIPS Agreement, “the legitimate expectations of WTO
Members concerning the TRIPS Agreement must be taken into account”.(97)
The Appellate Body disagreed with the Panel that the legitimate
expectations of Members and private rights holders concerning conditions
of competition must always be taken into account in interpreting the
TRIPS Agreement and stated that the concept of “reasonable
expectations” belonged to the domain of non-violation complaints. The
Appellate Body also criticized “the Panel’s invocation of the ‘legitimate
expectations’ of Members relating to conditions of competition [which]
melds the legally distinct bases for ‘violation’ and ‘non-violation’
complaints under Article XXIII of the GATT 1994 into one uniform cause
of action”:
“The doctrine of protecting the ‘reasonable expectations’ of
contracting parties developed in the context of ‘non-violation’
complaints brought under Article XXIII:1(b) of the GATT
1947. Some of
the rules and procedures concerning ‘non-violation’ cases have been
codified in Article 26.1 of the DSU. ‘Non-violation’ complaints are
rooted in the GATT’s origins as an agreement intended to protect the
reciprocal tariff concessions negotiated among the contracting parties
under Article II.(98) In the absence of substantive legal rules in many
areas relating to international trade, the ‘non-violation’ provision
of Article XXIII:1(b) was aimed at preventing contracting parties from
using non-tariff barriers or other policy measures to negate the
benefits of negotiated tariff concessions. Under Article XXIII:1(b) of
the GATT 1994, a Member can bring a ‘non-violation’ complaint when
the negotiated balance of concessions between Members is upset by the
application of a measure, whether or not this measure is inconsistent
with the provisions of the covered agreement. The ultimate goal is not
the withdrawal of the measure concerned, but rather achieving a mutually
satisfactory adjustment, usually by means of compensation.
… the only cause of action permitted under the
TRIPS Agreement
during the first five years after the entry into force of the WTO
Agreement is a ‘violation’ complaint under Article XXIII:1(a) of the
GATT 1994. This case involves allegations of violation of obligations
under the TRIPS Agreement. However, the Panel’s invocation of the ‘legitimate
expectations’ of Members relating to conditions of competition melds
the legally distinct bases for ‘violation’ and ‘non-violation’
complaints under Article XXIII of the GATT 1994 into one uniform cause
of action. This is not consistent with either Article XXIII of the GATT
1994 or Article 64 of the TRIPS Agreement. Whether or not ‘non-violation’
complaints should be available for disputes under the TRIPS Agreement is
a matter that remains to be determined by the Council for Trade-Related
Aspects of Intellectual Property (the ‘Council for TRIPS’) pursuant
to Article 64.3 of the TRIPS Agreement. It is not a matter to be
resolved through interpretation by panels or by the Appellate Body.”(99)
75. In
EC — Computer Equipment, the Appellate Body examined whether
the Panel had erred in interpreting the meaning of a tariff concession
in the European Communities Schedule in light of the “legitimate
expectations” of an exporting Member. The Appellate Body disagreed
with the Panel’s finding that the tariff concession of a Member may be
determined on the basis of the “legitimate expectation” of just one
(namely the exporting) Member and emphasized that it was rather the
common intention of the parties which should be ascertained. See
paragraph 46 above.
76. With respect to the issue of “legitimate expectations” under
non-violation complaints, see Chapter on GATT 1994, Section
XXIV.B.2(h).
(xiii) Proportionality
77. The Appellate Body has referred to the need for proportionality
of countermeasures by reference to the international rules on state
responsibility. See in this regard paragraphs 71-72
above.
(xiv) Precautionary principle
78. In
EC — Hormones, the Appellate Body agreed with the Panel
finding that the precautionary principle does not override the
provisions of Articles 5.1 and 5.2 of the SPS Agreement and made the
following observations about this principle:
“The status of the precautionary principle in international law
continues to be the subject of debate among academics, law
practitioners, regulators and judges. The precautionary principle is
regarded by some as having crystallized into a general principle of
customary international environmental law. Whether it has been widely
accepted by Members as a principle of general or customary international
law appears less than clear.(100) We consider, however, that it is
unnecessary, and probably imprudent, for the Appellate Body in this
appeal to take a position on this important, but abstract, question. We
note that the Panel itself did not make any definitive finding with
regard to the status of the precautionary principle in international law
and that the precautionary principle, at least outside the field of
international environmental law, still awaits authoritative formulation.(101)
It appears to us important, nevertheless, to note some aspects of the
relationship of the precautionary principle to the SPS Agreement. First,
the principle has not been written into the SPS Agreement as a ground
for justifying SPS measures that are otherwise inconsistent with the
obligations of Members set out in particular provisions of that
Agreement. Secondly, the precautionary principle indeed finds reflection
in Article 5.7 of the SPS Agreement. We agree, at the same time, with
the European Communities, that there is no need to assume that Article
5.7 exhausts the relevance of a precautionary principle. It is reflected
also in the sixth paragraph of the preamble and in
Article
3.3. These
explicitly recognize the right of Members to establish their own
appropriate level of sanitary protection, which level may be higher
(i.e., more cautious) than that implied in existing international
standards, guidelines and recommendations. Thirdly, a panel charged with
determining, for instance, whether “sufficient scientific evidence”
exists to warrant the maintenance by a Member of a particular SPS
measure may, of course, and should, bear in mind that responsible,
representative governments commonly act from perspectives of prudence
and precaution where risks of irreversible, e.g. life-terminating,
damage to human health are concerned. Lastly, however, the precautionary principle does not, by itself, and without a clear textual
directive to that effect, relieve a panel from the duty of applying the
normal (i.e. customary international law) principles of treaty
interpretation in reading the provisions of the SPS Agreement.”(102)
(xv) Estoppel
79. In
Argentina — Poultry Anti-Dumping Duties, Argentina invoked the
principle of estoppel to justify its claim that the Panel had to recuse
itself from the dispute. Argentina had raised as a preliminary issue
that, prior to bringing WTO dispute settlement proceedings against
Argentina’s anti-dumping measure, Brazil had challenged that measure
before a MERCOSUR Ad Hoc Arbitral Tribunal. Argentina requested that, in
light of the prior MERCOSUR proceedings, that the Panel refrain from
ruling on the claims raised by Brazil in the present WTO dispute
settlement proceedings. (103) The United States, a third party, argued
that there is no basis for a WTO panel to apply the principle of
estoppel. The Panel did not take up the issue of whether this principle
can be applied by a panel or not. In a footnote to the Report, the Panel
simply said that since it had found that the conditions identified by
Argentina for the application of the principle of estoppel(104) were not
present, it did not consider it necessary to determine whether or not it
would have had the authority to apply the principle of estoppel if the
relevant conditions had been satisfied. Neither did the Panel consider
it necessary to determine whether the three conditions proposed by
Argentina were sufficient for the application of that proposal.(105)
(xvi) Status of adopted GATT/WTO Panel and Appellate Body Reports
80. In
Japan — Alcoholic Beverages II, the Appellate Body, further to
reversing the Panel’s findings that adopted panel reports constituted
subsequent practice in a specific case under Article 31.3(b) of the
Vienna Convention (see paragraph 30 above), held that “[a]dopted panel
reports are an important part of the GATT acquis”:
“Article XVI:1 of the WTO Agreement and paragraph 1(b)(iv) of the
language of Annex 1A incorporating the GATT 1994 into the WTO Agreement
bring the legal history and experience under the GATT 1947 into the new
realm of the WTO in a way that ensures continuity and consistency in a
smooth transition from the GATT 1947 system. This affirms the importance
to the Members of the WTO of the experience acquired by the Contracting
Parties to the GATT 1947 — and acknowledges the continuing relevance of
that experience to the new trading system served by the WTO. Adopted
panel reports are an important part of the GATT acquis. They are often
considered by subsequent panels. They create legitimate expectations
among WTO Members, and, therefore, should be taken into account where
they are relevant to any dispute. However, they are not binding, except
with respect to resolving the particular dispute between the parties to
that dispute. In short, their character and their legal status have not
been changed by the coming into force of the WTO Agreement.”(106)
81. In
US — Shrimp (Article 21.5 — Malaysia) the Appellate Body
referred to its ruling in Japan — Alcoholic Beverages II (see paragraph
80 above) and considered that the same reasoning applied to Appellate
Body reports:
“[W]e note that in our Report in Japan — Taxes on Alcoholic
Beverages, we stated that:
Adopted panel reports are an important part of the GATT
acquis. They
are often considered by subsequent panels. They create legitimate
expectations among WTO Members, and, therefore, should be taken into
account where they are relevant to any dispute.
This reasoning applies to adopted Appellate Body Reports as well.
Thus, in taking into account the reasoning in an adopted Appellate Body
Report — a Report, moreover, that was directly relevant to the Panel’s
disposition of the issues before it — the Panel did not err. The Panel
was correct in using our findings as a tool for its own reasoning.
Further, we see no indication that, in doing so, the Panel limited
itself merely to examining the new measure from the perspective of the
recommendations and rulings of the DSB.”(107)
82. In
US — Softwood Lumber V, the United States requested that the
Appellate Body not import wholesale the findings and reasoning from the
Appellate Body report on EC — Bed Linen on the grounds that it was not a
party to that dispute, that the arguments raised in that case were
different and that the United States’ practice of zeroing was not at
issue in that appeal. The complainant, Canada, disagreed. The Appellate
Body, after referring to its prior reports on Japan — Alcoholic
Beverages II and US — Shrimp (Article 21.5 — Malaysia) and to
Article
3.2 of the DSU, indicated that they had given full consideration to the
particular facts of the case before them and to the arguments raised by
the United States on appeal, as well as to those raised by Canada and
the third participants. The Appellate Body said that, in doing so, they
“have taken into account the reasoning and findings contained in the
Appellate Body Report in EC — Bed Linen, as appropriate”.(108)
(d) “add to or diminish the rights and obligations”
83. In
Chile — Alcoholic Beverages, Chile argued before the Appellate
Body that the Panel’s findings under Article III:2 of GATT 1994
in
connection with “not similarly taxed” and “so as to afford
protection” added to the rights and obligations of Members in
contravention of Articles 3.2 and 19.2 of the DSU. The Appellate Body
stated:
“In this dispute, while we have rejected certain of the factors
relied upon by the Panel, we have found that the Panel’s legal
conclusions are not tainted by any reversible error of law. In these
circumstances, we do not consider that the Panel has added to the rights
or obligations of any Member of the WTO. Moreover, we have difficulty in
envisaging circumstances in which a panel could add to the rights and
obligations of a Member of the WTO if its conclusions reflected a
correct interpretation and application of provisions of the covered
agreements. Chile’s appeal under Articles 3.2 and
19.2 of the DSU
must, therefore, be denied.”(109)
84. In
US — Certain EC Products, the Appellate Body ruled that the
purpose of dispute settlement is only to preserve the rights and
obligations of Members:
“[W]e observe that it is certainly not the task of either panels or
the Appellate Body to amend the DSU or to adopt interpretations within
the meaning of Article IX:2 of the WTO Agreement. Only WTO Members have
the authority to amend the DSU or to adopt such interpretations.
Pursuant to Article 3.2 of the DSU, the task of panels and the Appellate
Body in the dispute settlement system of the WTO is ‘to preserve the
rights and obligations of Members under the covered agreements, and to
clarify the existing provisions of those agreements in accordance with
customary rules of interpretation of public international law.’
(emphasis added) Determining what the rules and procedures of the DSU
ought to be is not our responsibility nor the responsibility of panels;
it is clearly the responsibility solely of the Members of the WTO.”(110)
(e) Relationship with other Agreements
(i) Article 17.6(ii) of the Anti-Dumping Agreement
85. In
US — Hot-Rolled Steel, the Appellate Body looked into the
first sentence of Article 17.6(ii) of the Anti-Dumping Agreement, which
provides that the Panel “shall” interpret the provisions of the
Anti-Dumping Agreement “in accordance with customary rules of
interpretation”, and considered that it echoed closely Article 3.2 of
the DSU (see paragraph 642 of the Chapter on the Anti-Dumping
Agreement).(111)
2. Article 3.3
(a) “measures taken by another Member”
86. In
US — Corrosion-Resistant Steel Sunset Review, the Appellate
Body referred to Article 3.3 while defining which type of measures can,
as such, be the subject of dispute settlement proceedings.
“Article 3.3 of the DSU refers to ‘situations in which a Member
considers that any benefits accruing to it directly or indirectly under
the covered agreements are being impaired by measures taken by another
Member’. (emphasis added) This phrase identifies the relevant nexus,
for purposes of dispute settlement proceedings, between the “measure”
and a “Member”. In principle, any act or omission attributable to a
WTO Member can be a measure of that Member for purposes of dispute
settlement proceedings.(112) The acts or omissions that are so
attributable are, in the usual case, the acts or omissions of the organs
of the state, including those of the executive branch.(113)”(114)
87. As regards the concept of measures subject to dispute settlement,
see Section VI.B.3(c) below.
3. Article 3.6
(a) Notification of mutually agreed solutions
88. The mutually agreed solutions pursuant to
Article 3.6 that have
been notified to the DSB as of 31 December 2004 are:
|
|
WT/DS No |
Dispute |
Date of Notification |
Reference |
|
1 |
WT/DS5 |
Korea — Measures Concerning the Shelf-Life of Products |
20.7.1995 |
WT/DS5/5 |
|
2 |
WT/DS7 |
European Communities — Trade Description of Scallops
(Canada) |
5.7.1996 |
WT/DS7/12 WT/DSB/M/20 |
|
3 |
WT/DS12 |
European Communities — Trade Description of Scallops (Peru) |
5.7.1996 |
WT/DS12/12 WT/DSB/M/20 |
|
4 |
WT/DS14 |
European Communities — Trade Description of Scallops (Chile) |
5.7.1996 |
WT/DS14/11 WT/DSB/M/20 |
|
5 |
WT/DS19 |
Poland — Import Regime for Automobiles |
26.8.1996 |
WT/DS19/2 |
|
6 |
WT/DS20 |
Korea — Measures Concerning Bottled Water |
24.4.1996 |
WT/DS20/6 |
|
7 |
WT/DS21 |
Australia — Measures Affecting the Importation of Salmonids |
27.10.2000 |
WT/DS21/10 |
|
8 |
WT/DS28 |
Japan — Measures Concerning Sound Recordings |
24.1.1997 |
WT/DS28/4 |
|
9 |
WT/DS36 |
Pakistan — Patent Protection for Pharmaceutical and
Agricultural Chemical Products |
28.2.1997 |
WT/DS36/4 |
|
10 |
WT/DS37 |
Portugal — Patent Protection under the Industrial Property
Act |
3.10.1996 |
WT/DS37/2 |
|
11 |
WT/DS40 |
Korea — Laws, Regulations and Practices in the
Telecommunications Sector |
22.10.1997 |
WT/DS40/2 |
|
12 |
WT/DS42 |
Japan — Measures Concerning Sound Recordings |
7.11.1997 |
WT/DS42/4 |
|
13 |
WT/DS43 |
Turkey — Taxation of Foreign Film Revenues |
14.7.1997 |
WT/DS43/3 |
|
14 |
WT/DS72 |
European Communities — Measures Affecting Butter Products |
11.11.1999 |
WT/DS72/7 |
|
15 |
WT/DS73 |
Japan — Procurement of a Navigation Satellite |
19.2.1998 |
WT/DS73/5 |
|
16 |
WT/DS74 |
Philippines — Measures Affecting Pork and Poultry |
13.1.1998 |
WT/DS74/5 |
|
17 |
WT/DS82 |
Ireland — Measures Affecting the Grant of Copyright and
Neighbouring Rights |
6.11.2000 |
WT/DS82/3 |
|
18 |
WT/DS83 |
Denmark — Measures Affecting the Enforcement of Intellectual
Property Rights |
7.6.2001 |
WT/DS83/2 |
|
19 |
WT/DS85 |
United States — Measures Affecting Textiles and Apparel
Products |
11.2.1998 |
WT/DS85/9 |
|
20 |
WT/DS86 |
Sweden — Measures Affecting the Enforcement of Intellectual
Property Rights |
2.12.1998 |
WT/DS86/2 |
|
21 |
WT/DS91 |
India — Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products (Australia) |
17.3.1998 |
WT/DS91/8 |
|
22 |
WT/DS92 |
India — Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products (Canada) |
18.3.1998 |
WT/DS92/8 |
|
23 |
WT/DS93 |
India — Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products |
14.9.1998 |
WT/DS93/8 |
|
24 |
WT/DS94 |
India — Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products (Switzerland) |
23.2.1998 |
WT/DS94/9 |
|
25 |
WT/DS96 |
India — Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products (EC) |
7.4.1998 |
WT/DS96/8 |
|
26 |
WT/DS99 |
United States — Anti-Dumping Duty on Dynamic Random Access
Memory Semiconductors (DRAMs) of One Megabit or Above from Korea |
20.10.2000 |
WT/DS99/12 |
|
27 |
WT/DS102 |
Philippines — Measures Affecting Pork and Poultry |
13.1.1998 |
WT/DS102/6 |
|
28 |
WT/DS103 |
Canada — Measures Affecting the Importation of Milk and the
Exportation of Dairy Products |
9.5.2003 |
WT/DS103/33 |
|
29 |
WT/DS113 |
Canada — Measures Affecting Dairy Exports |
9.5.2003 |
WT/DS113/33 |
|
30 |
WT/DS115 |
European Communities — Measures
Affecting
the
Grant
of
Copyright and
Neighbouring
Rights |
6.11.2000 |
WT/DS115/3 |
|
31 |
WT/DS119 |
Australia — Anti-Dumping Measures on Imports of Coated
Woodfree Paper Sheets |
13.5.1998 |
WT/DS119/4 |
|
32 |
WT/DS124 |
European Communities — Enforcement of Intellectual Property
Rights for Motion Pictures and Television Programs |
20.3.2001 |
WT/DS124/2 |
|
33 |
WT/DS125 |
Greece — Enforcement of Intellectual Property Rights for
Motion Pictures and Television Programs |
20.3.2001 |
WT/DS125/2 |
|
34 |
WT/DS126 |
Australia — Subsidies Provided to Producers and Exporters of
Automotive Leather |
24.7.2000 |
WT/DS126/11 |
|
35 |
WT/DS151 |
United States — Measures Affecting Textiles and Apparel
Products |
24.7.2000 |
WT/DS151/10 |
|
36 |
WT/DS171 |
Argentina — Patent Protection for Pharmaceuticals and Test
Data Protection for Agricultural Chemicals |
31.5.2002 |
WT/DS171/3 |
|
37 |
WT/DS190 |
Argentina — Transitional Safeguard Measures on Certain
Imports of Woven Fabrics of Cotton and Cotton Mixtures Originating
in Brazil |
27.6.2000 |
WT/DS190/2 |
|
38 |
WT/DS196 |
Argentina — Certain Measures on the Protection of Patents
and Test Data |
31.5.2002 |
WT/DS196/4 |
|
39 |
WT/DS198 |
Romania — Measures on Minimum Import Prices |
26.9.2001 |
WT/DS198/2 |
|
40 |
WT/DS199 |
Brazil — Measures Affecting Patent Protection |
5.7.2001 |
WT/DS199/4 |
|
41 |
WT/DS210 |
Belgium — Administration of Measures Establishing Customs
Duties for Rice |
18.12.2001 |
WT/DS210/6 |
|
42 |
WT/DS231 |
European Communities — Trade Description of Sardines |
25.7.2003 |
WT/DS231/18 |
|
43 |
WT/DS235 |
Slovakia — Safeguard Measure on Imports of Sugar |
11.1.2002 |
WT/DS235/2 |
|
44 |
WT/DS237 |
Turkey — Certain Import Procedures for Fresh Fruit |
22.11.2002 |
WT/DS237/4 |
|
45 |
WT/DS250 |
United States — Equalizing Excise Tax Imposed by Florida on
Processed Orange and Grapefruit Products |
28.5.2004 |
WT/DS250/3 |
|
46 |
WT/DS261 |
Uruguay — Tax Treatment on Certain Products |
8.1.2004 |
WT/DS261/7 |
|
47 |
WT/DS313 |
European Communities — Anti-Dumping Duties on Certain Flat
Rolled Iron or Non-Alloy Steel Products from India |
22.10.2004 |
WT/DS313/2 |
4. Article 3.7
(a) “whether action under these procedures would be fruitful”
90. In the context of a discussion on legal interest, the Appellate
Body on EC — Bananas III agreed with the Panel that “neither Article
3.3 nor 3.7 of the DSU nor any other provision of the DSU contain any
explicit requirement that a Member must have a ‘legal interest’ as a
prerequisite for requesting a panel”. In this regard, see paragraph
158 below.
91. In
Mexico — Corn Syrup (Article 21.5 — US), Mexico challenged on
appeal the Panel’s silence regarding the alleged failure of the United
States to satisfy its obligation under the first sentence of Article 3.7
of the DSU to exercise its judgement as to whether dispute settlement
proceedings would be “fruitful”. The Appellate Body then examined
whether a failure to comply with the first sentence of Article 3.7 of
the DSU would deprive a panel of its authority to deal with and dispose
of a matter. The Appellate Body first indicated that “this sentence
reflects a basic principle that Members should have recourse to WTO
dispute settlement in good faith, and not frivolously set in motion the
procedures contemplated in the DSU”.(115) It went on to point out the
self-regulating nature of that sentence and concluded that the Panel was
not obliged to consider this issue on its own motion:
“Given the ‘largely self-regulating’ nature of the requirement
in the first sentence of Article 3.7, panels and the Appellate Body must
presume, whenever a Member submits a request for establishment of a
panel, that such Member does so in good faith, having duly exercised its
judgement as to whether recourse to that panel would be ‘fruitful’.
Article 3.7 neither requires nor authorizes a panel to look behind that
Member’s decision and to question its exercise of judgement.
Therefore, the Panel was not obliged to consider this issue on its own
motion.”(116)
(b) “aim of the dispute settlement mechanism is to secure a
positive solution to a dispute”
92. The Appellate Body on
US — Wool Shirts and Blouses referred to
Article 3.7 of the DSU and emphasized that a requirement to address all
legal claims raised by a party is not consistent with the aim of the WTO
dispute settlement system, which is to settle disputes.(117)
(c) “suspending the application of concessions or other obligations”
93. In
US — Certain EC Products, the Panel had found that the measure
at issue constituted an unauthorized suspension of concessions and thus
violated Article 3.7 (and Articles 22.6 and
23.2(c)) of the DSU.(118) The
Appellate Body first described the workings of Article 3.7 and upheld
the Panel’s findings, indicating that, in its view, “if a Member has
acted in breach of Articles 22.6 and
23.2(c) of the DSU, that Member has
also, in view of the nature and content of Article
3.7, last sentence,
necessarily acted contrary to the latter provision”:
“Article 3.7 is part of
Article 3 of the DSU, which is entitled ‘General
Provisions’ and sets out the basic principles and characteristics of
the WTO dispute settlement system. Article 3.7 itself lists and
describes the possible temporary and definitive outcomes of a dispute,
one of which is the suspension of concessions or other obligations to
which the last sentence of Article 3.7 refers. The last sentence of
Article 3.7 provides that the suspension of concessions or other
obligations is a ‘last resort’ that is subject to DSB authorization.
The obligation of WTO Members not to suspend concessions or other
obligations without prior DSB authorization is explicitly set out in
Articles 22.6 and 23.2(c), not in
Article 3.7 of the DSU. It is,
therefore, not surprising that the European Communities did not
explicitly claim, or advance arguments in support of, a violation of
Article 3.7, last sentence. The European Communities argued that the 3
March Measure is inconsistent with Articles 22.6 and
23.2(c) of the DSU.
We consider, however, that if a Member has acted in breach of Articles
22.6 and 23.2(c) of the DSU, that Member has also, in view of the nature
and content of Article 3.7, last sentence, necessarily acted contrary to
the latter provision.
Although we do not believe that it was necessary or incumbent upon
the Panel to find that the United States violated Articles 3.7 of the
DSU, we find no reason to disturb the Panel’s finding that, by
adopting the 3 March Measure, the United States acted inconsistently
with ‘Articles 23.2(c), 3.7 and
22.6 of the DSU’.(119)”(120)
94. With respect to the suspension of concessions, see
Section XXII.B below.
5. Article 3.8
(a) Presumption of “nullification or impairment”
95. In
EC — Bananas III, the European Communities appealed the Panel’s
finding that “the infringement of obligations by the European
Communities under a number of WTO agreements, are a prima facie case of
nullification or impairment of benefits in the meaning of Article 3.8 of
the DSU”. The Appellate Body observed that the European Communities,
in its appeal, attempted to “rebut the presumption of nullification or
impairment on the basis that the United States has never exported a
single banana to the European Community, and therefore, could not
possibly suffer any trade damage”. The Appellate Body stated:
“[W]e note that the two issues of nullification or impairment and
of the standing of the United States are closely related ….[T]wo
points are made that the Panel may well have had in mind in reaching its
conclusions on nullification or impairment. One is that the United
States is a producer of bananas and that a potential export interest by
the United States cannot be excluded; the other is that the internal
market of the United States for bananas could be affected by the EC
bananas regime and by its effects on world supplies and world prices of
bananas …. They are … relevant to the question whether the European
Communities has rebutted the presumption of nullification or impairment.
So, too, is the panel report in United States
— Superfund, to which
the Panel referred. In that case, the panel examined whether measures
with ‘only an insignificant effect on the volume of exports do nullify
or impair benefits under Article III:2 …’. The panel concluded (and
in so doing, confirmed the views of previous panels) that:
‘Article III:2, first sentence, cannot be interpreted
to protect
expectations on export volumes; it protects expectations on the
competitive relationship between imported and domestic products. A
change in the competitive relationship contrary to that provision must
consequently be regarded ipso facto as a nullification or impairment of
benefits accruing under the General Agreement. A demonstration that a
measure inconsistent with Article III:2, first sentence, has no or
insignificant effects would therefore in the view of the Panel not be a
sufficient demonstration that the benefits accruing under that provision
had not been nullified or impaired even if such a rebuttal were in
principle permitted.’(121)
The panel in United States — Superfund subsequently decided ‘not to
examine the submissions of the parties on the trade effects of the tax
differential’ on the basis of the legal grounds it had enunciated. The
reasoning in United States — Superfund applies equally in this case.”(122)
96. In
Turkey — Textiles, Turkey argued that even if its quantitative
restrictions on imports of textile and clothing products from India were
in violation of WTO law, India had not suffered any nullification or
impairment of its WTO benefits within the meaning of Article
3.8 of the DSU. Turkey pointed out that imports of textile and clothing from India
had actually increased since the Turkish measures at issue had entered
into force. The Panel, in a finding not reviewed by the Appellate Body,
rejected this argument:
“We are of the view that it is not possible to segregate the impact
of the quantitative restrictions from the impact of other factors. While
recognizing Turkey’s efforts to liberalize its import regime on the
occasion of the formation of its customs union with the European
Communities, it appears to us that even if Turkey were to demonstrate
that India’s overall exports of clothing and textile products to
Turkey have increased from their levels of previous years, it would not
be sufficient to rebut the presumption of nullification and impairment
caused by the existence of WTO incompatible import restrictions. Rather,
at minimum, the question is whether exports have been what they would
otherwise have been, were there no WTO incompatible quantitative
restrictions against imports from India. Consequently, we consider that
even if the presumption in Article 3.8 of the DSU were rebuttable,
Turkey has not provided us with sufficient information to set aside the
presumption that the introduction of these import restrictions on 19
categories of textile and clothing products has nullified and impaired
the benefits accruing to India under GATT/WTO.”(123)
97. In
Guatemala
— Cement II, Guatemala argued that its alleged
failure to issue proper notifications and its failure to provide the
Mexican interested party with the full text of the application for
antidumping investigations had not nullified or impaired Mexico’s
benefits accruing under the Anti-Dumping Agreement. The Panel declined
to consider this preliminary objection by Guatemala, stating that “we
will address the issue of nullification or impairment after we have
considered whether Guatemala has acted consistently with its obligations
under the AD Agreement”.(124) Subsequently, the Panel held:
“Guatemala argues that in the case of the Article 5.5 notification
it did not initiate the investigation until after Mexico had been
notified and that it granted Cruz Azul an extension to respond to the
questionnaire and thus Mexico was not impaired in the defence of its
interests. We have already found that the initiation date was 11 January
1996 and thus notification under Article 5.5 was not provided until
after initiation. There is no way to ascertain what Mexico might have
done if it had received a timely notification. The extension of time for
response to the questionnaire granted to Cruz Azul has no bearing on the
fact that Mexico was not informed in time. Thus, we do not consider that
Guatemala has rebutted the presumption of nullification or impairment
with respect to violations of Article
5.5.”
98. In
Argentina
— Ceramic Tiles, Argentina claimed that the European
Communities had failed to demonstrate that Italian tile exporters were
“prejudiced” by the failure of the Argentine anti-dumping authority
to calculate individual anti-dumping margins. In this context, Argentina
relied on the Appellate Body’s findings in Korea — Dairy.(125) The Panel
rejected the Argentine arguments:
“We note, however, that the Appellate Body Report in the
Korea
— Dairy Safeguards case, to which Argentina refers in support of its
argument, dealt with the question of whether the request for
establishment met the requirements of Article 6.2 of the
DSU. The issue
before the Appellate Body was whether Article 6.2 of the DSU was
complied with or not. The Appellate Body, in deciding that question,
concluded that one element to be considered was whether the defending
Member was prejudiced in its ability to defend itself by a lack of
clarity or specificity in the request for establishment. The Appellate
Body did not address the question whether, once it had been established
that a provision of the Agreement is violated, it needs in addition to
be demonstrated that this violation had prejudiced the rights of the
complaining party.(126) Thus, we do not agree that this Appellate Body
decision supports Argentina’s argument that the concept of harmless
error has been accepted in WTO law.
…
Article 3.8 of the DSU thus provides that there is a presumption that
benefits are nullified or impaired — i.e., there is a presumption of ‘harm’
— where a provision of the Agreement has been violated. Article 3.8 of
the DSU also provides for the possibility that the Member found to have
violated a provision may rebut the presumption. In light of the
presumption of Article 3.8 of the DSU, the EC having established that
Argentina has acted in a manner inconsistent with the AD Agreement, it
is up to Argentina to show that the failure to determine an individual
dumping margin has not nullified or impaired benefits accruing to the EC
under the Agreement. Argentina has failed to adduce any evidence in this
respect. Accordingly, we find that the presumption of nullification or
impairment of benefits caused by the violation of Article 6.10 of the AD
Agreement has not been rebutted by Argentina.(127)”(128)
99. In
US — Offset Act (Byrd Amendment), and in respect to adverse
effects under Article 5(b) of the
SCM
Agreement, Mexico made arguments
of both violation and non-violation nullification or impairment. In
relation to claims of violation nullification or impairment, the Panel
stated that any presumption arising under Article 3.8 of the
DSU
stemming from these violations would relate to nullification or
impairment caused “by the violation at issue” (emphasis in
original). The Panel rejected the argument by Mexico on the grounds
that, for the purpose of Article 5(b) of the
SCM
Agreement, Mexico must
demonstrate that “the use of a subsidy” caused nullification or
impairment (emphasis in original).(129)
100. On the issue of whether Mexico could have reasonably anticipated
at the conclusion of the Uruguay Round that the United States would pass
the Offset Act, the Panel on US — Offset Act (Byrd Amendment) explained
that there was a “presumption that Mexico could not reasonably have
anticipated the introduction of [the Offset Act]”, since it was
introduced in the US Congress after the conclusion of the Uruguay Round
negotiations.(130)
101. Because Mexico failed to establish that the Offset Act
per se is
a “specific” subsidy that causes adverse effects”, the Panel
rejected Mexico’s claim that the Offset Act is inconsistent with Article
5(b) of the SCM Agreement.(131) For more information regarding the
nullification or impairment requirement in Article 5(b) of the
SCM
Agreement, see Section V.B.2(a) of the Chapter on the
SCM
Agreement.
(b) Relationship with other WTO Agreements
(i) Article
XXIII:1 of the GATS
102. In
EC — Bananas III, the Appellate Body considered that the
Panel had erred in extending the scope of the presumption of
nullification or impairment in Article 3.8 of the
DSU to violation
claims made under the GATS:
“We observe, first of all, that the European Communities attempts
to rebut the presumption of nullification or impairment with respect to
the Panel’s findings of violations of the GATT 1994 on the basis that
the United States has never exported a single banana to the European
Community, and therefore, could not possibly suffer any trade damage.
The attempted rebuttal by the European Communities applies only to one
complainant, the United States, and to only one agreement, the GATT
1994. In our view, the Panel erred in extending the scope of the
presumption in Article 3.8 of the DSU to claims made under the GATS as
well as to claims made by the Complaining Parties other than the United
States.”(132)
103. In the same vein, the Panel in
Mexico
— Telecoms indicated that
the GATS does not require that, in the case of a violation complaint (Article XXIII:1 of the
GATS), “nullification or impairment” of
treaty benefits has to be claimed by the complaining WTO Member and
examined by a Panel:
“Unlike some other covered agreements (e.g. GATT Article XXIII:1 in
connection with Article 3.8 of the DSU), the GATS does not require that,
in the case of a violation complaint (GATS Article
XXIII:1), ‘nullification
or impairment’ of treaty benefits has to be claimed by the complaining
WTO Member and examined by a Panel. Whereas Article XXIII:1 of the GATT
specifically conditions access to WTO dispute settlement procedures on
an allegation that a ‘benefit’ or the ‘attainment of an objective’
under that agreement are being ‘nullified or impaired’, the
corresponding provision in the GATS (Article
XXIII:1) permits access to
dispute settlement procedures if a Member ‘fails to carry out its
obligations or specific commitments’ under the GATS. In this respect,
we note that the Appellate Body in EC — Bananas III stated that the
panel in that case ‘erred in extending the scope of the presumption in
Article 3.8 of the DSU to claims made under the GATS’.(133) Having found
that Mexico has violated certain provisions of the GATS, we are
therefore bound by Article 19 of the DSU to proceed directly to the
recommendation set out in that provision.”(134)
(ii) Article 5(b) of the SCM Agreement
104.
In this respect, see paragraph 99
above.
6. Article 3.10
(a) “good faith … effort to resolve the dispute”
105. In
US — FSC, the United States requested that the Appellate Body
dismiss the appeal on the basis that the request for consultations had
not included a “statement of available evidence as required by Article
4.2 of the SCM Agreement”.(135) The Appellate Body noted in this regard
that one year passed between submission of the request for consultations
by the European Communities and the first mention of this objection by
the United States. The Appellate Body stated that in light of the fact
that consultations were held on three occasions and that the United
States did not raise objections at the two DSB meetings at which the
request for the establishment of a panel was on the agenda, the United
States could not now assert that the European Communities claims under
Article 3 of the SCM Agreement should have been dismissed and that the
Panel’s finding on these issues should be reversed. The Appellate Body
went on to state:
“Article 3.10 of the DSU commits Members of the WTO, if a dispute
arises, to engage in dispute settlement procedures ‘in good faith in
an effort to resolve the dispute’. This is another specific
manifestation of the principle of good faith which, we have pointed out,
is at once a general principle of law and a principle of general
international law.(136) This pervasive principle requires both complaining
and responding Members to comply with the requirements of the DSU (and
related requirements in other covered agreements) in good faith. By good
faith compliance, complaining Members accord to the responding Members
the full measure of protection and opportunity to defend, contemplated
by the letter and spirit of the procedural rules. The same principle of
good faith requires that responding Members seasonably and promptly
bring claimed procedural deficiencies to the attention of the
complaining Member, and to the DSB or the Panel, so that corrections, if
needed, can be made to resolve disputes. The procedural rules of WTO
dispute settlement are designed to promote, not the development of
litigation techniques, but simply the fair, prompt and effective
resolution of trade disputes.”(137)
106. The Appellate Body on
Thailand
— H-Beams confirmed the
importance of the principle of good faith when indicating that panel
proceedings were not about the development of litigation techniques:
“In view of the importance of the request for the establishment of
a panel, we encourage complaining parties to be precise in identifying
the legal basis of the complaint. We also note that nothing in the DSU
prevents a defending party from requesting further clarification on the
claims raised in a panel request from the complaining party, even before
the filing of the first written submission. In this regard, we point to
Article 3.10 of the DSU which enjoins Members of the WTO, if a dispute
arises, to engage in dispute settlement procedures ‘in good faith in
an effort to resolve the dispute’. As we have previously stated, the
‘procedural rules of WTO dispute settlement are designed to promote,
not the development of litigation techniques, but simply the fair,
prompt and effective resolution of trade disputes’.(138)”(139)
107. In
EC
— Tube or Pipe Fittings, the European Communities had
requested the Panel to refuse to consider certain of Brazil’s claims
on the grounds that these claims were defective as they were too vaguely
defined in Brazil’s first written submission. In the view of the
European Communities, admission of these claims would constitute an
infringement of the European Communities’ rights of defence and a
departure from the good faith standard in Article 3.10 of the
DSU and
from the due process requirement that underlies the DSU. The Panel, in a
preliminary ruling, rejected the European Communities’ request on the
grounds that the opportunity would still exist for Brazil to provide
further supporting evidence and argumentation in its subsequent
submissions with a view to clarifying those allegations in the course of
the Panel proceedings. The Panel found support for its ruling in the
statement by the Appellate Body in its report on US — FSC that the “procedural
rules of WTO dispute settlement are designed to promote, not the
development of litigation techniques, but simply the fair, prompt and
effective resolution of trade disputes”.(140),(141)
108. In
US
— Carbon Steel, the Appellate Body indicated that the
assessment of whether the ability of a respondent to defend itself has
been prejudiced can be considered well into the course of panel
proceedings.
“[I]n the interests of due process, parties should bring alleged
procedural deficiencies to the attention of a panel at the earliest
possible opportunity.(142) In this case, we see no reason to disagree with
the Panel’s view that the United States’ objection was not raised in
a timely manner. At the same time, however, as we have observed
previously, certain issues going to the jurisdiction of a panel are so
fundamental that they may be considered at any stage in a proceeding.(143)
…
As we have said previously, compliance with the requirements of
Article 6.2 must be demonstrated on the face of the request for the
establishment of a panel. Defects in the request for the establishment
of a panel cannot be ‘cured’ in the subsequent submissions of the
parties during the panel proceedings.(144) Nevertheless, in considering
the sufficiency of a panel request, submissions and statements made
during the course of the panel proceedings, in particular the first
written submission of the complaining party, may be consulted in order
to confirm the meaning of the words used in the panel request and as
part of the assessment of whether the ability of the respondent to
defend itself was prejudiced.(145) Moreover, compliance with the
requirements of Article 6.2 must be determined on the merits of each
case, having considered the panel request as a whole, and in the light
of attendant circumstances.(146)”(147)
109. As regards the principle of good faith in general, see
Section III.B(c)(vi) above.
Footnotes:
1.
Appellate Body
Report on Brazil — Desiccated Coconut, p. 13. With respect to the
freedom of panels to rely, in their findings, on provisions other than
those referred to by the parties in the request for establishment of a
panel or in the terms of reference, see paras.
331-332 in this Chapter.
back to text
2. Appellate Body Report on India
— Patents (US), para. 29.
back to text
3. Appellate Body Report on EC
— Poultry, para. 79.
back to text
4. Appellate Body Report on Guatemala
— Cement I, para.
64. back to text
5. Appellate Body Report on India
— Quantitative Restrictions,
paras. 85-86. With respect to the competence of panels to review
balance-of-payments restrictions, see also Chapter on GATT, Section
XIX.D(b). back to text
6. Appellate Body Report on Guatemala
— Cement I, para.
65. See
also Appellate Body Report on US
— FSC, para. 159.
back to text
7. Appellate Body Report on Guatemala
— Cement I, paras. 64 and
67-68. See also Appellate Body Report on US
— Lead and Bismuth II, para.
45; Appellate Body Report on US
— 1916 Act, para. 70.
back to text
8. Appellate Body Report on US
— Hot-Rolled Steel, paras. 51 and
56-57. back to text
9. Appellate Body Report on US
— Corrosion Resistant Steel Sunset
Review, footnote 82 to para. 83. back to text
10. Panel Report on Australia
— Automotive Leather II (Article
21.5 — US), para. 6.41. back to text
11. WT/DSB/6.
back to text
12. WT/DSB/M/5, section
7.
WT/DSB/6.
back to text
13. WT/DSB/M/7, section 10. With respect to the elections of
officials, see WT/DSB/M/4.
back to text
14. WT/DSB/6.
back to text
15. Appellate Body Report on Japan
— Alcoholic Beverages II, p.
31. back to text
16. Panel Report on US
— Section 301 Trade Act,
para. 7.75. back to text
17. Appellate Body Report on US
— Wool Shirts and Blouses, p. 19.
With respect to the issue of whether a Panel is required to address all
legal claims raised by a party, see pp. 17-18 of the
Report. back to text
18. Panel Report on Argentina
— Poultry Anti-Dumping Duties,
para.
7.17. back to text
19. (footnote original) See Appellate Body Report,
Japan — Taxes on Alcoholic Beverages (“Japan — Alcoholic Beverages II”),
WT/DS8/AB/R,
WT/DS10/AB/R,
WT/DS11/AB/R, adopted
1 November 1996, p. 14,
DSR 1996:I, 125. back to text
20. (footnote original) Even if Argentina had relied on the
MERCOSUR Tribunal ruling to argue that particular provisions of the WTO
Agreement should be interpreted in a particular way, it is not entirely
clear that Article 31.3(c) of the Vienna Convention would apply. In
particular, it is not clear to us that a rule applicable between only
several WTO Members would constitute a relevant rule of international
law applicable in the relations between the “parties”. back to text
21. Panel Report on Argentina
— Poultry Anti-Dumping Duties,
para.
7.41. back to text
22. Article 31 of the Vienna Convention reads:
“1. A treaty shall be interpreted in good
faith in accordance with the ordinary meaning to be given to the terms
of the treaty in their context and in the light of its object and
purpose.
2. The context for the purpose of the
interpretation of a treaty shall comprise, in addition to the text,
including its preamble and annexes:
(a) any agreement relating to the treaty which
was made between all the parties in connection with the conclusion of
the treaty;
(b) any instrument which was made by one or
more parties in connection with the conclusion of the treaty and
accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together
with the context:
(a) any subsequent agreement between the
parties regarding the interpretation of the treaty or the application of
its provisions;
(b) any subsequent practice in the application
of the treaty which establishes the agreement of the parties regarding
its interpretation;
(c) any relevant rules of international law
applicable in the relations between the parties.
4. A special meaning shall be given to a term
if it is established that the parties so intended.” back to text
23. Appellate Body Report on US
— Gasoline, p. 17. See also
Appellate Body Report on India — Patents (US), para. 46; Appellate Body
Report on Japan — Alcoholic Beverages II, pp. 10-12; and Panel Report on
US — DRAMS, para. 6.13. back to text
24. Appellate Body
Report on Japan — Alcoholic Beverages II, p.
11. back to text
25. Panel Report on US
— Section 301 Trade Act,
para. 7.22. back to text
26. Appellate Body Report on US
— Shrimp, para. 114. See also
Panel Reports on US — Section 301 Trade Act, para. 7.22; India
— Patents
(US), para. 7.18; US
— Underwear, para. 7.18;
Appellate Body Report on
Argentina — Footwear (EC), para. 91. back to text
27. Appellate Body Report on India
— Patents (US), paras. 45-46.
See also Appellate Body Report on India
— Quantitative,
footnote 23, para. 94..
back to text
28. Appellate Body
report on EC — Hormones, para. 181. back to text
29. Panel Report on Canada
— Pharmaceutical Patents,
para. 7.14. back to text
30. Article 31(3)(b) of the Vienna Convention provides that “any
subsequent practice in the application of the treaty which establishes
the agreement of the parties regarding its interpretation” is to be
“taken into account together with the context” in interpreting the
terms of the treaty. back to text
31. Appellate Body Report on Japan
— Alcoholic Beverages II, p.
12. back to text
32. (footnote original) Yearbook of the International Law
Commission, Vol. II, p. 222; Sinclair, supra., footnote 24, p. 138. back to text
33. Appellate Body Report on Japan
— Alcoholic Beverages II, pp.
12-13. See also Panel Report on US
— FSC,
para. 7.75. back to text
34. Appellate Body Report on Chile
— Price Band System,
paras.
213-214. back to text
35. Panel Report on Mexico
— Telecoms,
paras. 7.108-7.117. back to text
36. Appellate Body Report on Japan
— Alcoholic Beverages II, p.
10. back to text
37. Article 32 of the Vienna Convention reads: “Recourse may be
had to supplementary means of interpretation, including the preparatory
work of the treaty and the circumstances of its conclusion, in order to
confirm the meaning resulting from the application of Article
31, or to
determine the meaning when the interpretation according to Article
31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly
absurd or unreasonable.” back to text
38. Appellate Body Report on Japan
— Alcoholic Beverages II, p.
10. back to text
39. Appellate Body Report on Canada
— Dairy,
para. 138. back to text
40. Appellate Body Report on EC
— Computer Equipment,
para. 86. back to text
41. Panel Report on US
— Export Restraints,
para. 8.64. back to text
42. See footnote 37 above.
back to text
43. ADP/21. back to text
44. Panel Report on Egypt
— Steel Rebar,
para. 7.154. back to text
45. Appellate Body Report on EC
— Computer Equipment,
para. 92. back to text
46. Appellate Body Report on EC
— Computer Equipment,
paras.
93-95. back to text
47. Appellate Body Report on EC
— Poultry, para. 83. back to text
48. Panel Report on Mexico
— Telecoms, para. 7.44. The Panel also
found that the Draft Model Schedule and the Note by the Chairman to the
Scheduling Guidelines were, with respect to the GATS Protocol on
Telecommunications, an important part of the “circumstances of its
conclusion” within the meaning of Article 32 of the Vienna Convention.
Panel Report on Mexico
— Telecoms,
para. 7.67. back to text
49. Appellate Body Report on EC
— Hormones, footnote 154.
back to text
50. (footnote original) B. Cheng,
General Principles of Law as
applied by International Courts and Tribunals (Stevens and Sons, Ltd.,
1953), Chapter 4, in particular p. 125, elaborates:
… A reasonable and bona fide exercise of a
right in such a case is one which is appropriate and necessary for the
purpose of the right (i.e., in furtherance of the interests which the
right is intended to protect). It should at the same time be fair and
equitable as between the parties and not one which is calculated to
procure for one of them an unfair advantage in the light of the
obligation assumed. A reasonable exercise of the right is regarded as
compatible with the obligation. But the exercise of the right in such a
manner as to prejudice the interests of the other contracting party
arising out of the treaty is unreasonable and is considered as
inconsistent with the bona fide execution of the treaty obligation, and
a breach of the treaty….(emphasis added)
Also see, for example, Jennings and Watts
(eds.), Oppenheim’s International Law, 9th ed, Vol. I (Longman’s,
1992), pp. 407-410, Border and Transborder Armed Actions Case, (1988)
I.C.J. Rep. 105; Rights of Nationals of the United States in Morocco
Case, (1952) I.C.J. Rep. 176; Anglo-Norwegian Fisheries Case, (1951)
I.C.J. Rep. 142. back to text
51. Appellate Body Report on US
— Shrimp,
para. 158. back to text
52. Appellate Body Report on US
— Hot-Rolled Steel, para. 101. In
US — Cotton Yarn, the Appellate Body considered that it was not
necessary for the purpose of the appeal at issue “to express a view on
the question whether an importing Member would be under an obligation,
flowing from the ‘pervasive’ general principle of good faith that
underlies all treaties, to withdraw a safeguard measure if
post-determination evidence relating to pre-determination facts were to
emerge revealing that a determination was based on such a critical
factual error that one of the conditions required by Article 6 turns out
never to have been met.” Appellate Body Report on US
— Cotton
Yarn, para. 81. back to text
53. Panel Report on US
— Export Restraints,
para. 8.18. back to text
54. Appellate Body Report on US
— Gasoline, p. 16.
back to text
55. Appellate
Body Report on EC — Computer Equipment, paras.
83-84. back to text
56. Appellate Body Report on US
— Offset Act (Byrd Amendment),
para. 297. back to text
57. Appellate Body Report on US
— Offset Act (Byrd Amendment),
para. 298. back to text
58. Panel Report on Argentina
— Poultry Anti-Dumping Duties,
para.
7.36. back to text
59. Appellate Body Report on Korea
— Dairy,
para. 80. back to text
60. (footnote original) E.g., Corfu Channel Case (1949)
ICJ Reports, p.24 (International Court of Justice); Territorial Dispute Case
(Libyan Arab Jamahiriya v. Chad) (1994) ICJ Reports, p. 23
(International Court of Justice); 1966 Yearbook of the International Law
Commission, Vol. II at 219; Oppenheim’s International Law (9th ed.,
Jennings and Watts eds., 1992), Volume 1, 1280-1281; P. Dallier and A.
Pellet, Droit International Public, 5th ed. (1994) para. 17.2; D.
Carreau, Droit International, (1994) para. 369. back to text
61. Appellate Body Report on US
— Gasoline, p. 23.
back to text
62. Appellate Body Report on US
— Gasoline, p. 23.
back to text
63. Appellate Body Report on Japan
— Alcoholic Beverages II, p.
12. See also Panel Report on India
— Quantitative Restrictions, footnote
354; Panel Report on Canada
— Patent Term, paras. 6.48-6.50;
Panel
Report on EC — Asbestos, footnote 22 to para. 8.29. back to text
64. Appellate Body Report on Japan
— Alcoholic Beverages, p. 18.
back to text
65. Appellate Body Report on US
— Underwear, p. 16.
back to text
66. (footnote original) We have emphasized this in Appellate
Body Report, Argentina — Safeguard Measures on Imports of Footwear,
WT/DS121/AB/R, circulated 14 December 1999, para. 81. See also Appellate
Body Report, United States — Gasoline, supra, footnote 12, p. 23;
Appellate Body Report, Japan — Alcoholic Beverages, supra, footnote 41,
p. 12; and Appellate Body Report, India — Patents, supra, footnote 21,
para. 45. back to text
67. (footnote original) The duty to interpret a treaty as a
whole has been clarified by the Permanent Court of International Justice
in Competence of the I.L.O. to Regulate Agricultural Labour (1922), PCIJ,
Series B, Nos. 2 and 3, p. 23. This approach has been followed by the
International Court of Justice in Ambatielos Case (1953) ICJ
Reports, p.
10; Reservations to the Convention on the Prevention and Punishment of
the Crime of Genocide (1951) ICJ Reports, p. 15; and Case Concerning
Rights of United States Nationals in Morocco (1952) ICJ Reports, pp.
196-199. See also I. Brownlie, Principles of Public International Law,
5th ed. (Clarendon Press, 1998), p. 634; G. Fitzmaurice, “The Law and
Procedure of the International Court of Justice 1951-1954: Treaty
Interpretation and Other Treaty Points”, 33 British Yearbook of
International Law (1957), p. 211 at p. 220; A. McNair, The Law of
Treaties (Clarendon Press, 1961), pp. 381-382; I. Sinclair, The Vienna
Convention on the Law of Treaties (Manchester University Press, 1984),
pp. 127-129; M. O. Hudson, La Cour Permanente de Justice Internationale
(Editions A Pedone, 1936), pp. 654-659; and L. A. Podesta Costa and J.
M. Ruda, Derecho Internacional Público, Vol. 2 (Tipográfica, 1985), p.
105. back to text
68. Appellate Body Report on Korea — Dairy, para. 81.
back to text
69. Appellate Body Report on Korea — Dairy, para. 82.
back to text
70. Appellate Body Report on Korea — Dairy, para. 82, referring
to Panel Report on Korea — Dairy, para. 7.42. back to text
71. Panel Report on Argentina — Footwear (EC), para. 8.58.
back to text
72. Appellate Body Report on Argentina — Footwear
(EC), para. 81.
back to text
73. Appellate Body Report on Canada — Dairy, para. 135 (footnote
omitted). back to text
74. Appellate Body Report on US — Section 211 Appropriations Act,
para. 338. back to text
75. Appellate Body Report on India — Quantitative
Restrictions,
para. 5.196-5.198. back to text
76. (footnote original) The Panel also notes the importance
attached by the Appellate Body to the principle of effectiveness (ut res
magis valeat quam pereat) concerning the interpretation of the
provisions of the WTO Agreement in several cases (see, for example,
United States — Standards for Reformulated and Conventional Gasoline,
adopted on 20 May 1996, WT/DS60/AB/R (hereinafter “United States — Gasoline”), op. cit., pp.18 and 23;
Guatemala
— Cement, op. cit., para.
75; Argentina — Safeguards, op. cit., para. 88. The Panel also notes in
the Reports of the Commission to the General Assembly, Yearbook of the
International Law Commission, 1966, Volume II, A/CN.4/SER.A/1966/Add.1,
p. 219, that the International Law Commission indicates that:
“[…] in so far as the maxim ut res magis
valeat quam pereat reflects a true general rule of interpretation, it is
embodied in Article [31], paragraph
1, which requires that a treaty
shall be interpreted in good faith in accordance with the ordinary
meaning to be given to its terms in the context of the treaty and in the
light of its object and purpose. When a treaty is open to two
interpretations one of which does and the other does not enable the
treaty to have appropriate effects, good faith and the object and
purposes of the treaty demand that the former interpretation should be
adopted.” [Italics in the original.] back to text
77. Panel Report on EC — Asbestos, para. 8.29. back to text
78. (footnote original) WTO Agreement, final, authenticating
clause.
See also Article 33(1) of the Vienna Convention
on the Law of the Treaties, done at Vienna, 23 May 1969, 1155 UNTS 331;
8 International Legal Materials 679. back to text
79. Appellate Body Report on EC — Asbestos,
para. 91.
back to text
80. Article 33(4) of the Vienna Convention provides:
“Except where a particular text prevails in
accordance with paragraph 1, when a comparison of the authentic texts
discloses a difference of meaning which the application of Articles 31
and 32 does not remove, the meaning which best reconciles the texts,
having regard to the object and purpose of the treaty, shall be adopted.”
back to text
81. Appellate Body Report on Chile — Price Band System, para.
271. back to text
82. Panel Report on EC — Bananas III, paras. 7.157-7.163.
back to text
83. (footnote original) In this context we note that the WTO
Agreement contains a specific rule on conflicts which is however limited
to conflicts between a specific provision of GATT 1994 and a provision
of another agreement of Annex
1A. We do not consider this interpretative
note in this section of the report because we are dealing with Indonesia’s
argument that there is a general conflict between Article III and the
SCM Agreement, while the note is concerned with specific conflicts
between a provision of GATT 1994 and a specific provision of another
agreement of Annex 1A. back to text
84. Panel Report on Indonesia — Autos, para. 14.28. See also Panel
Report on Turkey — Textiles, paras. 9.92-9.95. back to text
85. Article 28 of the Vienna Convention provides:
“Unless a different intention appears from
the treaty or is otherwise established, its provisions do not bind a
party in relation to any act or fact which took place or any situation
which ceased to exist before the date of the entry into force of the
treaty with respect to that party.” back to text
86. Appellate Body Report on Brazil — Desiccated Coconut, p. 14.
back to text
87. Appellate Body Report on EC — Hormones, para. 128.
back to text
88. Appellate Body Report on Canada — Patent Term, paras. 72-74.
back to text
89. (footnote original) Nauru case, Separate Opinion of Judge
Shahabuddeen, at 284. Clark, R., Book review of Nauru: Environmental
Damage Under International Trusteeship (C. Weeramantry), The
International Lawyer Vol. 28, No. 1, at 186. back to text
90. Panel
Report on Turkey — Textiles, para. 9.42.
back to text
91. (footnote original) See the Yearbook of the International
Law Commission, 1978, Vol.II, Part Two, at 99. These commentaries were
adopted by the Commission in its session of 8 May to 28 July 1978.
Article 27 on state responsibility to which these commentaries refer was
adopted at the ILC session of 6 May to 26 July 1996. These commentaries
and the report were submitted in the same years to the United Nations
General Assembly for its consideration. back to text
92. Panel
Report on Turkey — Textiles, para. 9.43.
back to text
93. Panel Report on US — Section 301 Trade Act, para. 7.80.
back to text
94. Appellate Body Report on US — Cotton Yarn, paras. 119-120.
back to text
95. Appellate Body Report on US — Line Pipe, paras. 257 and 259.
back to text
96. Panel Report on India — Patents (US), para. 7.20.
back to text
97. Panel Report on India — Patents (US),
para. 7.22.
back to text
98. (footnote original) See, in general, E.-U. Petersmann, “Violation
Complaints and Non-violation Complaints in International Law” (1991)
German Yearbook of International Law 175. back to text
99. Appellate Body Report on India — Patents (US), paras. 41-42.
back to text
100. (footnote original) Authors like P. Sands, J. Cameron and
J. Abouchar, while recognizing that the principle is still evolving,
submit nevertheless that there is currently sufficient state practice to
support the view that the precautionary principle is a principle of
customary international law. See, for example, P. Sands, Principles of
International Environmental Law, Vol. I (Manchester University Press,
1995) p. 212; J. Cameron, “The Status of the Precautionary Principle
in International Law”, in J. Cameron and T. O’Riordan (eds.),
Interpreting the Precautionary Principle (Cameron May, 1994) 262, p.
283; J.Cameron and J. Abouchar, “The Status of the Precautionary
Principle in International Law”, in D. Freestone and E. Hey (eds.),
The Precautionary Principle in International Law (Kluwer, 1996) 29,
p. 52. Other authors argue that the precautionary principle has not yet
reached the status of a principle of international law, or at least,
consider such status doubtful, among other reasons, due to the fact that
the principle is still subject to a great variety of interpretations.
See, for example, P. Birnie and A. Boyle, International Law and the
Environment (Clarendon Press, 1992), p. 98; L. Gündling, “The Status
in International Law of the Precautionary Principle” (1990), 5:1,2,3
International Journal of Estuarine and Coastal Law 25, p. 30; A. de
Mestral (et al), International Law Chiefly as Interpreted and Applied in
Canada, 5th ed. (Emond Montgomery, 1993), p. 765; D. Bodansky, in
Proceedings of the 85th Annual Meeting of the American Society of
International Law (ASIL, 1991), p. 415. back to text
101. (footnote original) In Case Concerning the Gabčíkovo-Nagymaros Project (Hungary/Slovakia), the International Court of Justice
recognized that in the field of environmental protection “… new
norms and standards have been developed, set forth in a great number of
instruments during the last two decades. Such new norms have to be taken
into consideration, and such new standards given proper weight …”.
However, we note that the Court did not identify the precautionary
principle as one of those recently developed norms. It also declined to
declare that such principle could override the obligations of the Treaty
between Czechoslovakia and Hungary of 16 September 1977 concerning the
construction and operation of the Gabčíkovo/Nagymaros
System of Locks. See Case Concerning the Gabčíkovo-Nagymaros
Project (Hungary/Slovakia), I.C.J. Judgement, 25 September 1997, paras.
140, 111-114. Not yet reported in the I.C.J. Reports but available on
internet at http://www.icj-cij.org/idecis.htm.
back to text
102.
Appellate Body Report on EC — Hormones, paras. 124-125.
back to text
103. Panel Report on Argentina — Poultry Anti-Dumping Duties,
para. 7.17. back to text
104. Argentina claimed that the principle of estoppel applies in
circumstances where (i) a statement of fact which is clear and
unambiguous, and which (ii) is voluntary, unconditional, and authorized,
is (iii) relied on in good faith. Panel Report on Argentina — Poultry Anti-Dumping
Duties, para. 7.37. back to text
105. Panel Report on Argentina — Poultry Anti-Dumping
Duties,
footnote 58. back to text
106. Appellate Body Report on Japan — Alcoholic Beverages
II, p.
14. back to text
107. Appellate Body Report on US — Shrimp (Article 21.5
— Malaysia), paras. 108-109. back to text
108. Appellate Body Report on US — Softwood Lumber V, para. 112.
back to text
109. Appellate Body Report on Chile — Alcoholic Beverages, para.
79. back to text
110. Appellate Body Report on US — Certain EC Products, para. 92.
back to text
111. Appellate Body Report on US — Hot Rolled Steel, para. 57.
See also Panel Report on US — Steel Plate, para. 7.7. back to text
112. (footnote original) We need not consider, in this appeal,
related issues such as the extent to which the acts or omissions of
regional or local governments, or even the actions of private entities,
could be attributed to a Member in particular circumstances. back to text
113. (footnote original) Both specific determinations made by a
Member’s executive agencies and regulations issued by its executive
branch can constitute acts attributable to that Member. See, for
example, the Panel Report in US — DRAMS, where the measures referred to
the panel included a USDOC determination in an administrative review as
well as a regulatory provision issued by USDOC. back to text
114. Appellate Body Report on US — Corrosion-Resistant Steel
Sunset Review, para. 81. back to text
115. Appellate Body Report on Mexico — Corn Syrup (Article 21.5
— US), para. 73. back to text
116. Appellate Body Report on Mexico — Corn Syrup (Article 21.5
— US), para. 74. back to text
117. Appellate Body Report on US — Wool Shirts and Blouses, p.
19. back to text
118. Panel Report on US — Certain EC Products, para. 6.73.
back to text
119. (footnote original) Panel Report, para. 6.87.
back to text
120. Appellate Body Report on US — Certain EC Products, paras.
119-121. back to text
121. (footnote original) GATT Panel Report on
US
— Superfund,
para. 5.1.9. back to text
122. Appellate Body Report on EC — Bananas III, paras. 251-253.
back to text
123. Panel
Report on Turkey — Textiles, para. 9.204.
back to text
124. Panel Report on Guatemala — Cement II, para. 8.25.
back to text
125. Appellate Body Report on Korea — Dairy, paras. 114-131.
back to text
126. (footnote original) Appellate Body Report,
Korea
— Dairy
Safeguards, para. 127: “Along the same lines, we consider that whether
the mere listing of the articles claimed to have been violated meets the
standard of Article 6.2 must be examined on a case-by-case basis. In
resolving that question, we take into account whether the ability of the
respondent to defend itself was prejudiced, given the actual course of
the panel proceedings, by the fact that the panel request simply listed
the provisions claimed to have been violated.” back to text
127. (footnote original) We note that our view is similar to
that of the Panel in the case of Guatemala — Cement (II) (Panel Report,
Guatemala — Cement (II), paras. 8.22 and 8.111-112), and Panel Report,
Guatemala — Anti-Dumping Investigation Regarding Portland Cement from
Mexico (“Guatemala — Cement (I)”), WT/DS60/R, adopted as reversed
on other grounds by WT/DS60/AB/R, 25 November 1998, para. 7.42. back to text
128. Panel Report on Argentina — Ceramic Tiles, paras. 6.103 and
6.105. back to text
129. Panel Report on US — Offset Act (Byrd Amendment), paras.
7.118-119. back to text
130. Panel Report on US — Offset Act (Byrd Amendment),
para.
7.131. back to text
131. Panel Report on US — Offset Act (Byrd Amendment),
para.
7.133. back to text
132. Appellate Body Report on EC — Bananas III,
para. 250.
back to text
133. (footnote original) See Appellate Body Report,
European
Communities — Regime for the Importation, Sale and Distribution of
Bananas (“EC — Bananas III”), WT/DS27/AB/R, adopted
25 September
1997, DSR 1997:II, 591, at paragraph 250. back to text
134. Panel Report on Mexico — Telecoms, para. 8.4.
back to text
135. Appellate Body Report on US — FSC, para. 36.
back to text
136. (footnote original) United States
— Shrimp, supra,
footnote 99, para. 158. In that report, we addressed the issue of good
faith in the context of the chapeau of Article XX of the GATT
1994. back to text
137. Appellate Body Report on US —
FSC, para. 166.
back to text
138. (footnote original) Appellate Body Report,
United States
— Tax Treatment of “Foreign Sales Corporations”, WT/DS108/AB/R,
adopted 20 March 2000, para. 166. back to text
139. Appellate Body Report on Thailand — H-Beams, para. 97.
back to text
140. (footnote original) Appellate Body Report,
United States
— Tax Treatment of “Foreign Sales Corporations” (“US — FSC”),
WT/DS108/AB/R, adopted 20 March 2000, para. 166. back to text
141. Panel Report on EC — Tube or Pipe Fittings, para. 7.10.
back to text
142. (footnote original) Appellate Body Report,
Mexico
— Corn
Importation of Milk and the Exportation of Syrup (Article 21.5 — US),
para. 50; Appellate Body Report, US — FSC, para. 166; and Appellate Body
Report, US — 1916 Act, Appellate Body Report, US — FSC, para. 166; and WT/DS136/AB/R, para. 54. back to text
143. (footnote original) Appellate Body Report,
Mexico
— Corn
Syrup (Article 21.5 — US), para. 36; and Appellate Body Report,
US —
1916 Act, para. 54. back to text
144. (footnote original) Ibid., para. 143.
back to text
145. (footnote original) See, for example, Appellate Body
Report, Korea — Dairy, para. 127; Appellate Body Report, Thailand — H-Beams, para. 95. back to text
146. (footnote original) Appellate Body
Report, Korea — Dairy, paras. 124-127. back to text
147. Appellate Body Report on US — Carbon Steel, paras. 123 and
127. back to text
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