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V. Article IV back to top
A. Text of
Article IV
Article IV: Special Provisions relating to Cinematograph Films
If any contracting party establishes or maintains internal
quantitative regulations relating to exposed cinematograph films, such
regulations shall take the form of screen quotas which shall conform to
the following requirements:
(a) Screen quotas may require the exhibition of cinematograph films
of national origin during a specified minimum proportion of the total
screen time actually utilized, over a specified period of not less than
one year, in the commercial exhibition of all films of whatever origin,
and shall be computed on the basis of screen time per theatre per year
or the equivalent thereof;
(b) With the exception of screen time reserved for films of national
origin under a screen quota, screen time including that released by
administrative action from screen time reserved for films of national
origin, shall not be allocated formally or in effect among sources of
supply;
(c) Notwithstanding the provisions of
subparagraph (b) of this Article, any contracting party may maintain screen quotas conforming to
the requirements of subparagraph (a) of this Article which reserve a
minimum proportion of screen time for films of a specified origin other
than that of the contracting party imposing such screen quotas; Provided
that no such minimum proportion of screen time shall be increased above
the level in effect on April 10, 1947;
(d) Screen quotas shall be subject to negotiation for their
limitation, liberalization or elimination.
B. Interpretation and Application of Article IV
No jurisprudence or decision of a competent WTO body.
1. Reference to GATT practice
314. With respect to GATT practice concerning
Article IV.
VI. Article V
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A. Text of Article V
Article V: Freedom of Transit
1. Goods (including baggage), and also vessels and other means of
transport, shall be deemed to be in transit across the territory of a
contracting party when the passage across such territory, with or
without transshipment, warehousing, breaking bulk, or change in the mode
of transport, is only a portion of a complete journey beginning and
terminating beyond the frontier of the contracting party across whose
territory the traffic passes. Traffic of this nature is termed in this
article “traffic in transit”.
2. There shall be freedom of transit through the territory of each
contracting party, via the routes most convenient for international
transit, for traffic in transit to or from the territory of other
contracting parties. No distinction shall be made which is based on the
flag of vessels, the place of origin, departure, entry, exit or
destination, or on any circumstances relating to the ownership of goods,
of vessels or of other means of transport.
3. Any contracting party may require that traffic in transit through
its territory be entered at the proper custom house, but, except in
cases of failure to comply with applicable customs laws and regulations,
such traffic coming from or going to the territory of other contracting
parties shall not be subject to any unnecessary delays or restrictions
and shall be exempt from customs duties and from all transit duties or
other charges imposed in respect of transit, except charges for
transportation or those commensurate with administrative expenses
entailed by transit or with the cost of services rendered.
4. All charges and regulations imposed by contracting parties on
traffic in transit to or from the territories of other contracting
parties shall be reasonable, having regard to the conditions of the
traffic.
5.
With respect to all charges, regulations and formalities in connection
with transit, each contracting party shall accord to traffic in transit
to or from the territory of any other contracting party treatment no
less favourable than the treatment accorded to traffic in transit to or
from any third country.
6. Each contracting party shall accord to products which have been in
transit through the territory of any other contracting party treatment
no less favourable than that which would have been accorded to such
products had they been transported from their place of origin to their
destination without going through the territory of such other
contracting party. Any contracting party shall, however, be free to
maintain its requirements of direct consignment existing on the date of
this Agreement, in respect of any goods in regard to which such direct
consignment is a requisite condition of eligibility for entry of the
goods at preferential rates of duty or has relation to the contracting
party’s prescribed method of valuation for duty purposes.
7. The provisions of this Article shall not apply to the operation of
aircraft in transit, but shall apply to air transit of goods (including
baggage).
B. Text of Ad Article V
Ad Article V: Paragraph 5
With regard to transportation charges, the principle laid down in
paragraph 5 refers to like products being transported on the same route
under like conditions.
C. Interpretation and Application of Article V
No jurisprudence or decision of a relevant WTO body.
1. Reference to GATT practice
315. With respect to GATT practice concerning
Article V.
VII. Article VI
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A. Text of Article VI
Article VI: Anti-dumping and Countervailing Duties
1. The contracting parties recognize that dumping, by which products
of one country are introduced into the commerce of another country at
less than the normal value of the products, is to be condemned if it
causes or threatens material injury to an established industry in the
territory of a contracting party or materially retards the establishment
of a domestic industry. For the purposes of this Article, a product is
to be considered as being introduced into the commerce of an importing
country at less than its normal value, if the price of the product
exported from one country to another
(a) is less than the comparable price, in the ordinary course of
trade, for the like product when destined for consumption in the
exporting country, or,
(b) in the absence of such domestic price, is less than either
(i) the highest comparable price for the like product for export to
any third country in the ordinary course of trade, or
(ii) the cost of production of the product in the country of origin
plus a reasonable addition for selling cost and profit.
Due allowance shall be made in each case for
differences in conditions and terms of sale, for differences in
taxation, and for other differences affecting price comparability.
2. In order to offset or prevent dumping, a contracting party may
levy on any dumped product an anti-dumping duty not greater in amount
than the margin of dumping in respect of such product. For the purposes
of this Article, the margin of dumping is the price difference
determined in accordance with the provisions of paragraph 1.
3.
No countervailing duty shall be levied on any product of the territory
of any contracting party imported into the territory of another
contracting party in excess of an amount equal to the estimated bounty
or subsidy determined to have been granted, directly or indirectly, on
the manufacture, production or export of such product in the country of
origin or exportation, including any special subsidy to the
transportation of a particular product. The term “countervailing duty”
shall be understood to mean a special duty levied for the purpose of
offsetting any bounty or subsidy bestowed, directly, or indirectly, upon
the manufacture, production or export of any merchandise.
4. No product of the territory of any contracting party imported into
the territory of any other contracting party shall be subject to
anti-dumping or countervailing duty by reason of the exemption of such
product from duties or taxes borne by the like product when destined for
consumption in the country of origin or exportation, or by reason of the
refund of such duties or taxes.
5. No product of the territory of any contracting party imported into
the territory of any other contracting party shall be subject to both
anti-dumping and countervailing duties to compensate for the same
situation of dumping or export subsidization.
6.
(a) No contracting party shall levy any anti-dumping or
countervailing duty on the importation of any product of the territory
of another contracting party unless it determines that the effect of the
dumping or subsidization, as the case may be, is such as to cause or
threaten material injury to an established domestic industry, or is such
as to retard materially the establishment of a domestic industry.
(b)
The CONTRACTING PARTIES may waive the requirement of subparagraph
(a) of this paragraph so as to permit a contracting party to levy an
anti-dumping or countervailing duty on the importation of any product
for the purpose of offsetting dumping or subsidization which causes or
threatens material injury to an industry in the territory of another
contracting party exporting the product concerned to the territory of
the importing contracting party. The CONTRACTING PARTIES shall waive the
requirements of subparagraph (a) of this paragraph,
so as to permit the levying of a countervailing duty, in cases in which
they find that a subsidy is causing or threatening material injury to an
industry in the territory of another contracting party exporting the
product concerned to the territory of the importing contracting party.
(c)
In exceptional circumstances, however, where delay might cause
damage which would be difficult to repair, a contracting party may levy
a countervailing duty for the purpose referred to in subparagraph
(b) of
this paragraph without the prior approval of the CONTRACTING PARTIES;
Provided that such action shall be reported immediately to the
CONTRACTING PARTIES and that the countervailing duty shall be withdrawn
promptly if the CONTRACTING PARTIES disapprove.
7. A system for the stabilization of the domestic price or of the
return to domestic producers of a primary commodity, independently of
the movements of export prices, which results at times in the sale of
the commodity for export at a price lower than the comparable price
charged for the like commodity to buyers in the domestic market, shall
be presumed not to result in material injury within the meaning of
paragraph 6 if it is determined by consultation among the contracting
parties substantially interested in the commodity concerned that:
(a) the system has also resulted in the sale of the
comm odity for
export at a price higher than the comparable price charged for the like
commodity to buyers in the domestic market, and
(b) the system is so operated, either because of the effective
regulation of production, or otherwise, as not to stimulate exports
unduly or otherwise seriously prejudice the interests of other
contracting parties.
B. Text of Ad Article VI
Ad Article VI: Paragraph 1
1. Hidden dumping by associated houses (that is, the sale by an
importer at a price below that corresponding to the price invoiced by an
exporter with whom the importer is associated, and also below the price
in the exporting country) constitutes a form of price dumping with
respect to which the margin of dumping may be calculated on the basis of
the price at which the goods are resold by the importer.
2. It is recognized that, in the case of imports from a country which
has a complete or substantially complete monopoly of its trade and where
all domestic prices are fixed by the State, special difficulties may
exist in determining price comparability for the purposes of paragraph
1, and in such cases importing contracting parties may find it necessary
to take into account the possibility that a strict comparison with
domestic prices in such a country may not always be appropriate.
Paragraphs 2 and 3
1. As in many other cases in customs administration, a contracting
party may require reasonable security (bond or cash deposit) for the
payment of anti-dumping or countervailing duty pending final
determination of the facts in any case of suspected dumping or
subsidization.
2. Multiple currency practices can in certain circumstances
constitute a subsidy to exports which may be met by countervailing
duties under paragraph 3 or can constitute a form of dumping by means of
a partial depreciation of a country’s currency which may be met by
action under paragraph 2. By “multiple currency practices” is meant
practices by governments or sanctioned by governments.
Paragraph 6 (b)
Waivers under the provisions of this subparagraph shall be granted
only on application by the contracting party proposing to levy an
anti-dumping or countervailing duty, as the case may be.
C. Interpretation and Application of Article VI
1. Scope of Article VI
(a) Investigation initiated before entry into force of
WTO Agreement
316. In
Brazil
— Desiccated Coconut, the Appellate Body upheld the
Panel’s finding that Article VI of GATT 1994 does not apply to
countervailing duty measures imposed as a result of an investigation
initiated pursuant to an application made before the entry into force of
the WTO Agreement. Having found that pursuant to Article 28 of the
Vienna Convention on the Law of Treaties, “[a]bsent 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”, the Appellate Body based its finding on the interpretation of
Article 32.3 of the SCM Agreement, which sets forth that “the
provisions of this Agreement shall apply to investigations … initiated
pursuant to applications have been made on or after the date of entry
into force for a WTO Agreement of the WTO Agreement”. The Appellate
Body stated that “[i]f Article 32.3 is read in conjunction with
Articles 10 and 32.1 of the
SCM
Agreement, it becomes clear that the
term ‘this Agreement’ in Article 32.3 means ‘this [SCM] Agreement and
Article VI of the GATT 1994’.”(477) With reference to
Articles 10
and 32.1 of the SCM Agreement, the Appellate Body went on to state:
“From reading Article
10, it is clear that countervailing duties
may only be imposed in accordance with Article VI of the GATT 1994 and
the SCM Agreement. A countervailing duty being a specific action against
a subsidy of another WTO Member, pursuant to Article
32.1, it can only
be imposed ‘in accordance with the provisions of GATT 1994, as
interpreted by this Agreement’. The ordinary meaning of these
provisions taken in their context leads us to the conclusion that the
negotiators of the SCM Agreement clearly intended that, under the
integrated WTO Agreement, countervailing duties may only be imposed in
accordance with the provisions of Part V of the
SCM Agreement and
Article VI of the GATT 1994, taken together.”(478)
317. After making the finding quoted in
paragraph 316 above, the
Appellate Body referred to the omission of note 2 to the preamble of the
Tokyo Round SCM Code, which states “[w]herever in this Agreement there
is reference to ‘the terms of this Agreement’ or the ‘articles’
or ‘provisions of this Agreement’ it shall be taken to mean, as the
context requires, the provisions of the General Agreement as interpreted
and applied by this Agreement”, from the SCM Agreement. The Preamble,
together with footnote 2, had not been retained in the new
SCM Agreement. The Philippines argued that this omission was evidence that
the term “this Agreement” in Article 32.3 was to be understood to
refer only to the SCM Agreement. The Appellate Body was unconvinced:
“This note related to a provision in the preamble to the
Tokyo
Round SCM Code which demonstrated the Tokyo Round signatories’ desire
‘to apply fully and to interpret the provisions of Articles
VI, XVI
and XXIII’ of the GATT
1947. The preamble was not retained in the new
text of the SCM Agreement. Consequently, the note also disappeared. The
SCM Agreement contains a set of rights and obligations that go well
beyond merely applying and interpreting Articles
VI, XVI
and XXIII of the GATT
1947. The title to the SCM Agreement was also modified in this
respect. Like the Panel, ‘we do not consider that the exclusion of
this provision from the SCM Agreement sheds much light on the question
before us’.(479)”(480)
318. In further support of its view that the term “this Agreement”
referred to both the SCM Agreement and Article VI of the
GATT
1994, the
Appellate Body cited the following finding of the Panel, with the
understanding that “the Panel’s reference to ‘SCM Agreements’ in
this paragraph referred to the SCM Agreement and the Tokyo Round SCM
Code”:(481)
“Article VI of GATT 1947 and the Tokyo Round SCM Code represent, as
among Code signatories, a package of rights and obligations regarding
the use of countervailing measures, and Article VI of GATT 1994 and the
SCM Agreement represent a new and different package of rights and
obligations, as among WTO Members, regarding the use of countervailing
duties. Thus, Article VI and the respective SCM Agreements impose
obligations on a potential user of countervailing duties, in the form of
conditions that have to be fulfilled in order to impose a duty, but they
also confer the right to impose a countervailing duty when those
conditions are satisfied. The SCM Agreements do not merely impose additional
substantive and procedural obligations on a potential user of
countervailing measures. Rather, the SCM Agreements and Article VI
together define, clarify and in some cases modify the whole package of rights
and obligations of a potential user of countervailing measures.”(482)
319. In this regard, the Appellate Body noted that “[t]he fact that
Article VI of the GATT 1947 could be invoked independently of the Tokyo
Round SCM Code under the previous GATT system(483) does not mean that
Article VI of GATT 1994 can be applied independently of the SCM
Agreement in the context of the WTO.”(484) The Appellate Body went on to
state that “[t]he authors of the new WTO regime intended to put an end
to the fragmentation that had characterized the previous system”(485),
referring to the preamble and Article II:2 of the Marrakesh
Agreement.
Further, the Appellate Body stated that “… the Uruguay Round
negotiators expressed an explicit intention to draw the line of
application of the new WTO Agreement to countervailing duty
investigations and reviews(486) at a different point in time from that for
other general measures.(487)”(488)
320 In addition, the Appellate Body rejected the Philippines’
argument that that “the transitional decisions(489) [of the Tokyo Round
SCM Code signatories] recognize the right of WTO Members to invoke WTO
norms even in situations involving elements that occurred prior to the
entry into force of the WTO Agreement.”(490) The Appellate Body opined
that “[a]t the time the Tokyo Round SCM Code signatories agreed to
these decisions, they were fully cognizant of the implications of the
operation of Article 32.3 of the
SCM
Agreement.”(491)
321. Lastly, the Appellate Body noted that its finding on the scope
of Article VI of GATT 1994 would not result in leaving Members without a
right of action against those countervailing duty measures which are not
covered by Article 32.3 of the
SCM
Agreement.(492) Rather, the Decision on
Consequences of Withdrawal from or Termination of the Tokyo Round SCM
Code, adopted by the Tokyo Round Subsidies and Countervailing Measures
Committee, extended dispute settlement under the Tokyo Round SCM Code
for two years, one year beyond the legal termination of the Tokyo Round
SCM Code which occurred on 31 December 1995.
(b) Anti-dumping measures other than antidumping duties
322. In
US — 1916 Act, the Appellate Body reviewed the Panels’
finding that the United States’ 1916 Antidumping Act was inconsistent
with Article VI, and rejected the United States’ appeal to the Panels’
finding that the Act was to counteract “dumping” and thus, fell
under the scope of Article VI. The Appellate Body considered that the
issue depended on “whether Article VI regulates all possible measures
Members can take in response to dumping.”(493) In answering this
question, the Appellate Body noted that “Article VI of the GATT 1994
must be read together with the provisions of the Anti-Dumping Agreement”(494)
and referred to the text of Article 1 of the
Anti-Dumping
Agreement;
specifically, the Appellate Body stated that “[s]ince ‘an
anti-dumping measure’ must, according to Article 1 of the
Anti-Dumping
Agreement, be consistent with Article VI of the GATT 1994 and the
provisions of the Anti-Dumping Agreement, it seems to follow that
Article VI would apply to ‘an anti-dumping measure’, i.e., a measure
against dumping.”(495) The Appellate Body went on to state that “the
scope of application of Article VI is clarified, in particular, by
Article 18.1 of the Anti-Dumping Agreement”(496), and indicated that
“… Article VI is applicable to any ‘specific action against
dumping’ of exports, i.e., action that is taken in response to
situations presenting the constituent elements of ‘dumping’”:
“[T]he ordinary meaning of the phrase ‘specific action against
dumping’ of exports within the meaning of Article 18.1 is action that
is taken in response to situations presenting the constituent elements
of ‘dumping’. ‘Specific action against dumping’ of exports must,
at a minimum, encompass action that may be taken only when the
constituent elements of ‘dumping’ are present. Since intent is not a
constituent element of ‘dumping’, the intent with which action
against dumping is taken is not relevant to the determination of whether
such action is ‘specific action against dumping’ of exports within
the meaning of Article 18.1 of the
Anti-Dumping
Agreement.
footnote 24 to Article 18.1 of the
Anti-Dumping Agreement states:
‘This is not intended to preclude action under other relevant
provisions of GATT 1994, as appropriate.’
We note that
footnote 24 refers generally to ‘action’ and not, as
does Article 18.1, to ‘specific action against dumping’ of exports.
‘Action’ within the meaning of
footnote 24 is to be distinguished
from ‘specific action against dumping’ of exports, which is governed
by Article 18.1 itself.
Article 18.1 of the
Anti-Dumping Agreement contains a prohibition on
the taking of any ‘specific action against dumping’ of exports when
such specific action is not ‘in accordance with the provisions of GATT
1994, as interpreted by this Agreement’. Since the only provisions of
the GATT 1994 ‘interpreted’ by the Anti-Dumping Agreement are those
provisions of Article VI concerning dumping, Article 18.1 should be read
as requiring that any ‘specific action against dumping’ of exports
from another Member be in accordance with the relevant provisions of
Article VI of the GATT 1994, as interpreted by the Anti-Dumping
Agreement.
We recall that
footnote 24 to Article 18.1 refers to ‘other
relevant provisions of GATT 1994’ (emphasis added). These terms can
only refer to provisions other than the provisions of Article VI
concerning dumping.
footnote 24 thus confirms that the ‘provisions of
GATT 1994’ referred to in Article 18.1 are in fact the provisions of
Article VI of the GATT 1994 concerning dumping.
We have found that Article 18.1 of the
Anti-Dumping Agreement
requires that any ‘specific action against dumping’ be in accordance
with the provisions of Article VI of the GATT 1994 concerning dumping,
as those provisions are interpreted by the Anti-Dumping Agreement. It
follows that Article VI is applicable to any ‘specific action against
dumping’ of exports, i.e., action that is taken in response to
situations presenting the constituent elements of ‘dumping’.”(497)
323. The Appellate Body on
US — 1916 Act rejected the United States’
argument that the term “may” in Article VI:2 indicates that Members
may choose to impose other types of anti-dumping measures than
anti-dumping duties, in which case they are not bound by the rules of
Article VI, stating as follows:
“[I]t is not obvious to us, based on the wording of
Article VI:2
alone, that the verb ‘may’ also implies that a Member is permitted
to impose a measure other than an antidumping duty.
We believe that the meaning of the word ‘may’ in
Article VI:2 is
clarified by Article 9 of the Anti-Dumping Agreement on the ‘Imposition
and Collection of Anti-dumping Duties’. Article VI of the GATT 1994
and the Anti-Dumping Agreement are part of the same treaty, the WTO
Agreement. As its full title indicates, the Anti-Dumping Agreement is an
‘Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994’. Accordingly, Article VI must be read in
conjunction with the provisions of the Anti-Dumping Agreement, including
Article 9.
…
In light of this provision, the verb ‘may’ in Article VI:2 of the
GATT 1994 is, in our opinion, properly understood as giving Members a
choice between imposing an antidumping duty or not, as well as a choice
between imposing an anti-dumping duty equal to the dumping margin or
imposing a lower duty. We find no support in Article
VI:2, read in
conjunction with Article 9 of the
Anti-Dumping
Agreement, for the United
States’ argument that the verb ‘may’ indicates that Members, to
counteract dumping, are permitted to take measures other than the
imposition of anti-dumping duties.”(498)
324. The Appellate Body further elaborated upon this jurisprudence in
US — Offset Act (Byrd Amendment). With regard to the term “specific”
in the phrase “specific action against dumping or a subsidy”, the
Appellate Body made reference to its report in US — 1916 Act (see
paragraph 322 above) and further specified that “the measure must be
inextricably linked to, or have a strong correlation with, the
constituent elements of dumping or of a subsidy. Such link or
correlation may, as in the 1916 Act, be derived from the text of the
measure itself.”(499) With regard to the specific measure at issue in
US
— Offset Act (Byrd Amendment), the Appellate Body agreed with the
Panel’s finding that the Offset Act was a specific action related to
dumping as defined in Article VI:1 of the GATT 1994 and
Article 18.1 of
the Anti-Dumping Agreement:
“It is clear from the text of the CDSOA [the Offset Act], in
particular from Section 754(a) of the Tariff Act(500), that the CDSOA
offset payments are inextricably linked to, and strongly correlated
with, a determination of dumping, as defined in Article VI:1 of the GATT
1994 and in the Anti-Dumping Agreement, or a determination of a subsidy,
as defined in the SCM Agreement. The language of the CDSOA is
unequivocal. First, CDSOA offset payments can be made only if
anti-dumping duties or countervailing duties have been collected. Second, such duties can be collected
only pursuant to an anti-dumping
duty order or countervailing duty order. Third, an anti-dumping duty
order can be imposed only following a determination of dumping, as
defined in Article VI:1 of the GATT 1994 and in the
Anti-Dumping Agreement. Fourth, a countervailing duty order can be imposed only
following a determination that exports have been subsidized, according
to the definition of a subsidy in the SCM Agreement. In the light of the
above elements, we agree with the Panel that ‘there is a clear, direct
and unavoidable connection between the determination of dumping and
CDSOA offset payments’, and we believe the same to be true for
subsidization. In other words, it seems to us unassailable that CDSOA
offset payments can be made only following a determination that the
constituent elements of dumping or subsidization are present. Therefore,
consistent with the test established in US — 1916 Act, we find that
the CDSOA is ‘specific action’ related to dumping or a subsidy
within the meaning of Article 18.1 of the
Anti-Dumping Agreement and of
Article 32.1 of the SCM Agreement.”(501)
325. In
US — Offset Act (Byrd Amendment), the Appellate Body
further rejected the United States’ argument, that an action that
falls within the scope of footnote 24 of the
Anti-Dumping Agreement
cannot be characterized as a “specific action” within the meaning of
Article 18.1 of the Anti-Dumping Agreement and therefore would not be
prohibited. The Appellate Body made reference to its interpretation of
footnote 24 in US — 1916 Act (see paragraph 322 above), where it found
that “action” in the sense of
footnote 24 has to be distinguished
from “specific action against dumping” as in Article 18.1 of the
Anti-Dumping Agreement(502) and continued to say:
“The United States’ reasoning is tantamount to treating
footnotes
24 [of the Anti-Dumping Agreement] and 56 [of the
SCM Agreement] as the
primary provisions, while according Articles 18.1 [of the
Anti-Dumping Agreement] and 32.1 [of the
SCM Agreement] residual status. This not
only turns the normal approach to interpretation on its head, but it
also runs counter to our finding in US — 1916 Act. In that case, we
provided guidance for determining whether an action is specific to
dumping (or to a subsidy): an action is specific to dumping (or a
subsidy) when it may be taken only when the constituent elements of
dumping (or a subsidy) are present, or, put another way, when the
measure is inextricably linked to, or strongly correlates with, the
constituent elements of dumping (or of a subsidy). This approach is
based on the texts of Article 18.1 of the
Anti-Dumping Agreement and of
Article 32.1 of the SCM Agreement, and not on the accessory footnotes.
Footnotes 24 and 56 are clarifications of the main provisions, added to
avoid ambiguity; they confirm what is implicit in Article 18.1 of the
Anti-Dumping Agreement and in Article 32.1 of the
SCM
Agreement, namely,
that an action that is not ‘specific’ within the meaning of Article
18.1 of the Anti-Dumping Agreement and of Article 32.1 of the
SCM
Agreement, but is nevertheless related to dumping or subsidization, is
not prohibited by Article 18.1 of the
Anti-Dumping Agreement or Article
32.1 of the SCM Agreement.”(503)
326. With regard to the term “against” in the phrase “specific
action against dumping or a subsidy”, the Appellate Body agreed with
the Panel that “there is no requirement that the measure must come
into direct contact with the imported product, or entities connected to,
or responsible for, the imported good such as the importer, exporter or
foreign producer” and further agreed with the Panel that the test
should focus on dumping or subsidization “as practices”. The
Appellate Body further specified that for determining the meaning of “against”
in the present context:
“[I]t is necessary to assess whether the design and structure of a
measure is such that the measure is ‘opposed to’, has an adverse
bearing on, or, more specifically, has the effect of dissuading the
practice of dumping or the practice of subsidization, or creates an
incentive to terminate such practices. In our view, the CDSOA [Offset
Act] has exactly those effects because of its design and structure. The
CDSOA effects a transfer of financial resources from the
producers/exporters of dumped or subsidized goods to their domestic
competitors. This is demonstrated by the following elements of the CDSOA
regime. First, the CDSOA offset payments are financed from the
anti-dumping or countervailing duties paid by the foreign
producers/exporters. Second, the CDSOA offset payments are made to an
‘affected domestic producer’, defined in Section 754(b) of the
Tariff Act as ‘a petitioner or interested party in support of the
petition with respect to which an anti-dumping duty order, a finding
under the Antidumping Act of 1921, or a countervailing duty order has
been entered’ and that ‘remains in operation’. In response to our questioning at the oral hearing, the United States
confirmed that the ‘affected domestic producers’ which are eligible
to receive payments under the CDSOA, are necessarily competitors of the
foreign producers/exporters subject to an anti-dumping or countervail
order. Third, under the implementing regulations issued by the United
States Commissioner of Customs (‘Customs’) on 21 September 2001, the
‘qualifying expenditures’ of the affected domestic producers, for
which the CDSOA offset payments are made, ‘must be related to the
production of the same product that is the subject of the related order
or finding, with the exception of expenses incurred by associations
which must relate to a specific case.’ Fourth, Customs has confirmed
that there is no statutory or regulatory requirement as to how a CDSOA
offset payment to an affected domestic producer is to be spent, thus
indicating that the recipients of CDSOA offset payments are entitled to
use this money to bolster their competitive position vis-à-vis their
competitors, including the foreign competitors subject to anti-dumping
or countervailing duties. All these elements lead us to conclude that
the CDSOA has an adverse bearing on the foreign producers/exporters in
that the imports into the United States of the dumped or subsidized
products (besides being subject to anti-dumping or countervailing
duties) result in the financing of United States competitors — producers of like products — through the transfer to the latter of the
duties collected on those exports. Thus, foreign producers/exporters
have an incentive not to engage in the practice of exporting dumped or
subsidized products or to terminate such practices. Because the CDSOA
has an adverse bearing on, and, more specifically, is designed and
structured so that it dissuades the practice of dumping or the practice
of subsidization, and because it creates an incentive to terminate such
practices, the CDSOA is undoubtedly an action ‘against’ dumping or a
subsidy, within the meaning of Article 18.1 of the
Anti-Dumping
Agreement and of Article 32.1 of the
SCM
Agreement.”
327. The Appellate Body on
US — Offset Act (Byrd Amendment)
rejected the United States’ argument that contrary to US — 1916
Act,
the language of the Offset Act does not refer to the constituent
elements of dumping and clarified that the finding in US — 1916 Act
was not to be interpreted as to “require that the language of the
measure include the constituent elements of dumping”. On the contrary,
the test established in US — 1916 Act “is met not only when
constituent elements of dumping are ‘explicitly built into’ the
actions at issue, but also where … they are implicit in the express
conditions for taking such action.”(504)
2. Reference to GATT practice
328. With respect to the further treatment of this subject-matter
under GATT 1947.
3. Interpretative materials
(a) Tokyo Round Agreements
329. In
Brazil — Desiccated Coconut, the Panel considered that
Article VI of GATT 1994 does not apply, in isolation from the
SCM Agreement, to countervailing duty cases where the investigation has been
initiated pursuant to an application made before the entry into force of
the WTO Agreement. The Panel’s finding and reasoning were subsequently
upheld by the Appellate Body. See paragraphs 316-321
above. The
Appellate Body, however, found it unnecessary to address one particular
reason the Panel had given for its finding, namely that if Article VI
were to apply independently from the SCM Agreement, Members might be
subject to “a package of rights and obligations that were potentially
more onerous than those to which they were subject under Article VI in
conjunction with the Tokyo Round SCM Code when they initiated the
investigation.”(505) The Panel noted that the Tokyo Round SCM Code did
not only impose additional obligations on a contracting party imposing
countervailing duties, but also clarified and added some rights for such
contracting party, such that certain obligations imposed by Article VI
in conjunction with either the Tokyo Round SCM Code or the SCM Agreement
were less stringent and easier to meet than obligations imposed by
Article VI in isolation.(506) In this regard, the Panel also rejected the
argument by the Philippines that Article VI of GATT
1994, as opposed to
Article VI of GATT 1947, could be interpreted in the light of the Tokyo
Round SCM Code and practice of the Code signatories; the Philippines
were arguing that this interpretation would avoid the risk that Members
would, through the application of Article VI of GATT 1994
in isolation,
be subject to obligations beyond those imposed by
Article VI of GATT 1947 in conjunction with the Tokyo Round SCM Code. The Panel noted:
“[W]e do not consider that it would be appropriate to interpret
Article VI of GATT 1994 in light of the Tokyo Round SCM Code. Article
31:3(a) of the Vienna Convention on the Law of Treaties (‘the Vienna
Convention’), which is generally held to reflect customary principles
of international law regarding treaty interpretation, provides that ‘any
subsequent agreement between the parties to a treaty regarding its
interpretation or the application of its provisions’ may be taken into
account when interpreting a treaty. The Tokyo Round SCM Code may
constitute such a subsequent agreement among Tokyo Round SCM Code
signatories regarding the interpretation of
Article VI of GATT 1947.
However, Article II:4 of the WTO Agreement provides that the GATT 1994
is ‘legally distinct’ from the GATT 1947. While GATT 1994 consists
of, inter alia, ‘decisions of the CONTRACTING PARTIES to GATT 1947,’
the Tokyo Round SCM Code is not a ‘decision’ of the CONTRACTING
PARTIES. Thus, the Tokyo Round SCM Code does not represent a subsequent
agreement regarding interpretation of Article VI of
GATT 1994.
For the Panel to conclude to the contrary would in effect convert that
Code into a ‘covered agreement’ under Appendix 1 of the
DSU. If such
an approach were followed, WTO Members that were Tokyo Round Code
signatories would find that their Code obligations were now enforceable
under the WTO dispute settlement system.
Article XVI:1 of the WTO Agreement provides that, ‘[e]xcept as
otherwise provided under this Agreement or the Multilateral Trade
Agreements, the WTO shall be guided by the decisions, procedures and
customary practices followed by the CONTRACTING PARTIES to GATT 1947 and
the bodies established in the framework of GATT 1947’. We recognize
that the Pork [i.e. US — Canadian Pork] Panel had indicated, in
passing, that the Tokyo Round SCM Code represents ‘practice’ under
Article VI of GATT 1947. Article 31.3(b) of the Vienna Convention
provides that there may be taken into account, when interpreting a
treaty, ‘[a]ny subsequent practice in the application of the treaty
which establishes the agreement of the parties regarding its
interpretation’. Article 31.3 clearly distinguishes between the use of
subsequent agreements and of subsequent practice as
interpretive tools. The Tokyo Round SCM Code is, in our view, in the
former category and cannot itself reasonably be deemed to represent ‘customary
practice’ of the GATT 1947 CONTRACTING PARTIES. In any event, while
the practice of Code signatories might be of some interpretive value in
establishing their agreement regarding the interpretation of the Tokyo
Round SCM Code (and arguably through Article XVI:1 of the WTO Agreement
in interpreting provisions of that Code that were carried over into the
successor SCM Agreement), it is clearly not relevant to the
interpretation of Article VI of GATT 1994 itself; rather, only practice
under
Article VI of GATT 1947 is legally relevant to the interpretation
of Article VI of GATT 1994.”(507)
330. The relationships between
Article VI, and the Tokyo Round SCM
Agreement and the SCM Agreement were discussed by the Appellate Body in
Brazil — Desiccated Coconut. See paragraphs 316-319
above.
(b) Anti-Dumping Agreement
331. In
US — 1916 Act (EC), the Panel examined whether the US 1916
Antidumping Act was consistent with Article VI, and emphasized the “close
link” between Article VI and the Anti-Dumping
Agreement:
“The official title of the Anti-Dumping Agreement is ‘Agreement
on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994’. This agreement is essential for the interpretation of
Article VI. Articles 1 and
18.1 confirm the close link between
Article VI and the Anti-Dumping Agreement. Moreover, as was recalled by the
Appellate Body in the Brazil — Coconut case, the WTO Agreement is a
single treaty instrument which was accepted by the WTO Members as a
single undertaking. As a result, Article 18.1 of the Anti-Dumping
Agreement is part of the context of Article VI since Article 31.2 of the
Vienna Convention provides that ‘the context for the purpose of the
interpretation of a treaty shall comprise, […] the text [of the
treaty], including its preamble and annexes …’. We are therefore not
only entitled to consider Articles 1 and
18.1 of the Anti-Dumping
Agreement even though the European Communities did not mention those
provisions as part of its claims in its request for establishment of a
panel, but we are also required to do so under the general principles of
interpretation of public international law.(508)”(509)
332. With respect to the finding of the Appellate Body in
Brazil
— Desiccated Coconut concerning the relationship between the SCM Agreement
and GATT Article VI as referenced in paragraph 316
above, see the
Chapter on the WTO Agreement, Section
III.B.1(a), which deals with the
issue of the “single undertaking”.
(c) SCM Agreement
333. In
Brazil — Desiccated Coconut, the Appellate Body referred to
the SCM Agreement in the context of clarifying the scope of Article
VI.
See the excerpts referenced in paragraphs 316 and 318
above.
4. Challenge against a law as such under Article VI
334. In
US — 1916 Act, the Appellate Body rejected the United
States’ argument that the Panels had no jurisdiction to consider the
claims that the Act as such was inconsistent with Article
VI. Noting
that the complainants had brought their claims of inconsistency with
Article VI of the GATT 1994 and the Anti-Dumping Agreement pursuant to
Article XXIII of the GATT 1994 and Article 17 of the
Anti-Dumping
Agreement, the Appellate Body explained:
“Articles XXII and
XXIII of the GATT 1994 serve as the basis for
consultations and dispute settlement under the GATT 1994 and, through
incorporation by reference, under most of the other agreements in Annex
1A to the WTO Agreement.(510) According to
Article XXIII:1(a) of the GATT
1994, a Member can bring a dispute settlement claim against another
Member when it considers that a benefit accruing to it under the GATT
1994 is being nullified or impaired, or that the achievement of any
objective of the GATT 1994 is being impeded, as a result of the failure
of that other Member to carry out its obligations under that Agreement.
Prior to the entry into force of the WTO
Agreement, it was firmly
established that Article XXIII:1(a) of the GATT 1947 allowed a
Contracting Party to challenge legislation as such, independently from
the application of that legislation in specific instances. While the
text of Article XXIII does not expressly address the matter, panels
consistently considered that, under Article
XXIII, they had the
jurisdiction to deal with claims against legislation as such.(511) In
examining such claims, panels developed the concept that mandatory and
discretionary legislation should be distinguished from each other,
reasoning that only legislation that mandates a violation of GATT
obligations can be found as such to be inconsistent with those
obligations. We consider the application of this distinction to the
present cases in section IV(B)
below.
Thus, that a Contracting Party could challenge legislation as such
before a panel was well-settled under the GATT 1947. We consider that
the case law articulating and applying this practice forms part of the
GATT acquis which, under Article XVI:1 of the
WTO
Agreement, provides
guidance to the WTO and, therefore, to panels and the Appellate Body.
Furthermore, in Article 3.1 of the
DSU, Members affirm ‘their
adherence to the principles for the management of disputes heretofore
applied under Articles XXII and
XXIII of GATT 1947’. We note that,
since the entry into force of the WTO Agreement, a number of panels have
dealt with dispute settlement claims brought against a Member on the
basis of its legislation as such, independently from the application of
that legislation in specific instances.(512)”(513)
335. In this connection, in
US — 1916 Act, the Appellate Body
examined whether challenge against a law as such is permissible under
the Anti-Dumping Agreement. See the Chapter on the Anti-Dumping
Agreement, Section
XVII.B.1(b).
336. In
Guatemala — Cement I, the Appellate Body discussed the
specificity requirements for the terms of reference under Article 17.4
of the Anti-Dumping Agreement. See the Chapter on the Anti-Dumping
Agreement, Section
XVII.B.5(a).
5. Article VI:1
(a) Elements of Paragraph 1
337. In
US — 1916 Act, in discussing the United States’ appeal to
the Panels’ finding that the Act was to counteract “dumping” and
thus, fell under the scope of Article VI, the Appellate Body noted as
follows:
“[U]nder Article VI:1 of the GATT 1994 and
Article 2 of the
Anti-Dumping Agreement, neither the intent of the persons engaging in
‘dumping’ nor the injurious effects that ‘dumping’ may have on a
Member’s domestic industry are constituent elements of ‘dumping’.”(514)
(b) Material injury
338. In
US — 1916 Act (EC), the Panel stated that “Article VI:1
of the GATT 1994 requires the establishment of material injury or a
threat thereof.”(515)
6. Paragraph 2
(a) Permissible responses to dumping
339. In
US — 1916 Act, the Appellate Body interpreted
Article VI:2
in addressing the question of whether Members may choose to impose other
types of antidumping measures than anti-dumping duties. The Appellate
Body stated that “Article VI, and, in particular,
Article VI:2, read
in conjunction with the Anti-Dumping Agreement, limit the permissible
responses to dumping to definitive anti-dumping duties, provisional
measures and price undertakings.”(516) See also
paragraph 323 above,
with respect to the discussion concerning the term “may” contained
in Article VI:2. Further, the Panel on US — 1916 Act (Japan) discussed
this issue taking into consideration preparatory works of the WTO
Agreement.(517)
(b) Methodology of investigation
340. In
EC — Tube or Pipe Fittings the issue arose whether
Article
VI:2 of the GATT 1994 prescribes a certain methodology for the
investigation of dumping under the Anti-Dumping Agreement. In this
particular case, the European Communities used a period of investigation
of one year in its investigation of imports from Brazil. Towards the end
of this year, the Brazilian Real was devalued by 42 per cent. Brazil
argued that the devaluation of the Real had “eliminated dumping by the
Brazilian exporter” and that the Commission had failed to consider
whether dumping existed “in the present”. The Panel concluded that
events occurring during the period of investigation did not require
investigation authorities to reassess a determination. The Appellate
Body upheld the Panel’s finding and rejected Brazil’s argument that
Article VI:2 of the GATT 1994 required investigation authorities to “anticipate
the level of anti-dumping duty that is strictly necessary to prevent
dumping in the future [by making] a reasonable assumption for the future
on the basis of the data collected in the [Period of Investigation]”.
According to the Appellate Body, the words “in order to offset or
prevent dumping” in Article VI:2 of the GATT 1994 do not prescribe the
selection of a particular methodology in the anti-dumping investigation.
“We are unable to see an obligation flowing from the opening phrase
of Article VI:2 of the GATT 1994 to Article 2 of the
Anti-Dumping
Agreement that the determination of dumping must be based on the
standard of a ‘reasonable assumption for the future’, or that this,
in turn, would require that a particular methodology be chosen under
Article 2.4.2.”(518)
D. Relationship with other Articles
1. Article I
341. The Panel on
Brazil — Desiccated Coconut found that because
Article VI of GATT 1994 did not constitute applicable law for the
purposes of the dispute, the claims made under Article I (and
II) of
GATT 1994, which were derived from claims of inconsistency with Article VI of
GATT 1994, could not succeed.(519) The Appellate Body on
Brazil
— Desiccated Coconut confirmed this finding.(520)
2. Article II
342. The Panel on
Brazil — Desiccated Coconut found that because
Article VI of GATT 1994 did not constitute applicable law for the
purposes of the dispute, the claims made under Article II (and
I) of
GATT 1994, which were derived from claims of inconsistency with Article VI of
GATT 1994, could not succeed.(521) The Appellate Body on
Brazil
— Desiccated Coconut confirmed this finding.(522)
3. Article III
343. In
US — 1916 Act (EC) and US — 1916 (Japan), exercising
judicial economy, the Panel found that the United States’ 1916 Act was
inconsistent with Article VI of the GATT 1994. However, the Panel did
not also examine the EC claim that it was inconsistent with Article III
of GATT 1994. See paragraph 288 above.
4. Article XI
344. In
US — 1916 Act (Japan), exercising judicial economy, the
Panel did not examine a claim under Article XI of
GATT
1994, after
having found a violation of Article VI. See paragraph 420
below.
E. Relationship with Other WTO Agreements
1. Anti-Dumping Agreement
345. As the complainant had not established a
prima facie case of a
violation of Articles 2.1 and
2.2 of the Anti-Dumping
Agreement, the
Panel on US — 1916 Act (EC) stated that “[t]he fact that we found a
violation of Article VI:1 of the GATT 1994 is not as such sufficient to
conclude that Articles 2.1 and
2.2 of the Anti-Dumping
Agreement have
been breached, in the absence of more specific arguments and evidence.”(523)
346. In
US — 1916 Act (Japan), the Panel was faced with the
question whether it could make findings under Article
VI, without, at
the same time, making a finding under a provision of the Anti-Dumping
Agreement or whether “the link between Article VI and the Anti-Dumping
Agreement is such as to make impossible a finding under Article VI only”.
The Panel referred to the findings of the Panel on India — Quantitative Restrictions and of the Appellate Body in
Brazil
— Desiccated Coconut and distinguished these two cases from the issue
before it. The Panel then concluded that it could “make findings under
Article VI without, at the same time, having to make findings under the
provisions of the Anti-Dumping Agreement, and vice-versa”:
“Regarding the relationship between Article VI and the Anti-Dumping
Agreement and, in particular, the question whether we could make
findings regarding Article VI independently from the Anti-Dumping
Agreement, we note that the issue addressed by the panel and the
Appellate Body in Brazil — Desiccated Coconut, to which the United
States refers, must be differentiated from the one before us. In Brazil
— Desiccated Coconut, the question was one of application of Article
VI of the GATT when the WTO Agreement on Subsidies and Countervailing
Measures did not apply. In the present case, the issue is whether the
Panel can make findings in relation to Article VI only or whether the
link between Article VI and the Anti-Dumping Agreement is such as to
make impossible a finding under Article VI only.
We note that the panel in the India — Quantitative Restrictions on
Imports of Agricultural, Textile and Industrial Products(524) case did not
make findings under Article XVIII:11 of the GATT 1994 in isolation from
the Understanding on Balance-of-Payments Provisions of the GATT 1994.
Likewise, we have no intention to address Article VI in isolation from
the Anti-Dumping Agreement. In the present case, the complainant has
made claims based on the violation of provisions of Article VI and the
Anti-Dumping Agreement. In our opinion, if the panel in Brazil — Desiccated Coconut confirmed that Article VI and the Agreement on
Subsidies and Countervailing Measures were an ‘inseparable package of
rights and obligations’, this is because the solution proposed by the
complainant would have led to apply Article VI in total disregard of the
Agreement on Subsidies and Countervailing Measures. Such a solution
cannot even be considered in our case. Article VI and the Anti-Dumping
Agreement are part of the same treaty: the WTO Agreement. In application
of the customary rules of interpretation of international law, we are
bound to interpret Article VI of the GATT 1994 as part of the WTO
Agreement and, pursuant to Article 31 of the Vienna Convention, the
Anti-Dumping Agreement forms part of the context of Article
VI. This
implies that we must look at Article VI and the Anti-Dumping Agreement
as part of an ‘inseparable package of rights and obligations’ and
that Article VI should not be interpreted in a way that would deprive
either Article VI or the Anti-Dumping Agreement of meaning.(525) However,
this obligation does not prevent us from making findings in relation to
Article VI only, as the panel did in its report on India — Quantitative
Restrictions.
We conclude that we can make findings under Article VI without, at
the same time, having to make findings under the provisions of the
Anti-Dumping Agreement, and vice-versa. However, the fact that Article
VI and the Anti-Dumping Agreement represent an inseparable package of
rights and disciplines requires that we interpret each of the provisions
invoked by Japan in its claims in conjunction with the other relevant
provisions of this ‘inseparable package’, so as to give meaning to
all of them.”(526)
347. Also, the Panel on
US — 1916 Act (EC) explained its exercise
of judicial economy with respect to Article 3 as follows:
“Since we found above that the 1916 Act violated
Article VI:1 by
not providing for an injury test compatible with the terms of that
Article and since Article 3 simply addresses in more detail the
requirement of ‘material injury’ contained in Article
VI:1, we do
not find it necessary to make specific findings under
Article 3 and
therefore exercise judicial economy, as we are entitled to do under GATT
panel practice and WTO panel and Appellate Body practice.”(527)
2. Tokyo Round Agreement on Interpretation and Application of
Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade
348. The Panel on
Brazil — Desiccated Coconut discussed the legal
relevance of the Tokyo Round Agreement on Interpretation and Application
of Articles VI, XVI and
XXIII of the General Agreement on Tariffs and
Trade to Article VI of the GATT 1994. See paragraphs 317-321
above.
3. SCM Agreement
349. In the
Brazil — Desiccated Coconut dispute, the Panel was
faced with the question “whether Article VI creates rules which are
separate and distinct from those of the SCM Agreement, and which can be
applied without reference to that Agreement, or whether Article VI of GATT 1994
and the SCM Agreement represent an inseparable package of
rights and disciplines that must be considered in conjunction.”(528) In
phrasing this issue, the Panel on Brazil — Desiccated Coconut made
clear that the SCM Agreement did not supersede Article VI of
GATT 1994
as the basis for the WTO discipline of countervailing measures. The
Panel stated:
“It is evident that both Article VI of GATT 1994
and the SCM
Agreement have force, effect, and purpose within the WTO Agreement. That
GATT 1994 has not been superseded by other Multilateral Agreements on
Trade in Goods … is demonstrated by a general interpretive note to
Annex 1A of the WTO Agreement. The fact that certain important
provisions of Article VI of GATT 1994 are neither replicated nor
elaborated in the SCM Agreement further demonstrates this point. Thus,
the question for consideration is not whether the SCM Agreement
supersedes Article VI of GATT 1994.”(529)
350. The Appellate Body on
Brazil — Desiccated Coconut confirmed
the statement by the Panel that the SCM Agreement did not supersede Article VI of
GATT 1994(530), and stated:
“The relationship between the GATT 1994 and the other goods
agreements in Annex 1A is complex and must be examined on a case-by-case
basis. Although the provisions of the GATT 1947 were incorporated into,
and became a part of the GATT 1994, they are not the sum total of the
rights and obligations of WTO Members concerning a particular matter.
For example, with respect to subsidies on agricultural products,
Articles II, VI and XVI of the GATT 1994 alone do not represent the
total rights and obligations of WTO Members. The Agreement on
Agriculture and the SCM Agreement reflect the latest statement of WTO
Members as to their rights and obligations concerning agricultural
subsidies. The general interpretative note to Annex 1A was added to
reflect that the other goods agreements in Annex 1A, in many ways,
represent a substantial elaboration of the provisions of the GATT 1994,
and to the extent that the provisions of the other goods agreements
conflict with the provisions of the GATT 1994, the provisions of the
other goods agreements prevail. This does not mean, however, that the
other goods agreements in Annex 1A, such as the SCM Agreement, supersede
the GATT 1994.”(531)
351. The Appellate Body on
Brazil — Desiccated Coconut, in
addressing the issue of the scope of Article VI of the
GATT
1994, noted
that “[t]he relationship between the SCM Agreement and Article VI of
GATT 1994
is set out in Articles 10 and
32.1 of the SCM Agreement.”(532)
See paragraph 316 above. With respect to the Appellate Body’s other
findings on this issue, see the excerpts referenced in the Chapter on
the SCM Agreement, Section X.B.3.
352. In
Brazil — Desiccated Coconut, the Appellate Body further
touched on the relationship between Article VI of the
GATT 1994 and the
SCM Agreement in clarifying the scope of Article VI. See
paragraphs 318-319 above.
VIII. Article VII
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A. Text of Article VII
Article VII: Valuation for Customs Purposes
1. The contracting parties recognize the validity of the general
principles of valuation set forth in the following paragraphs of this
Article, and they undertake to give effect to such principles, in
respect of all products subject to duties or other charges or
restrictions on importation and exportation based upon or regulated in
any manner by value. Moreover, they shall, upon a request by another
contracting party review the operation of any of their laws or
regulations relating to value for customs purposes in the light of these
principles. The CONTRACTING PARTIES may request from contracting parties
reports on steps taken by them in pursuance of the provisions of this
Article.
2.
(a) The value for customs purposes of
imported merchandise should be based on the actual value of the imported
merchandise on which duty is assessed, or of like merchandise, and
should not be based on the value of merchandise of national origin or on
arbitrary or fictitious values.
(b)
“Actual value” should be the price at which, at a time and
place determined by the legislation of the country of importation, such
or like merchandise is sold or offered for sale in the ordinary course
of trade under fully competitive conditions. To the extent to which the
price of such or like merchandise is governed by the quantity in a
particular transaction, the price to be considered should uniformly be
related to either (i) comparable quantities, or (ii) quantities not less
favourable to importers than those in which the greater volume of the
merchandise is sold in the trade between the countries of exportation
and importation.
(c)
When the actual value is not ascertainable in accordance with
subparagraph (b) of this paragraph, the value for customs
purposes should be based on the nearest ascertainable equivalent of such
value.
3. The value for customs purposes of any imported product should not
include the amount of any internal tax, applicable within the country of
origin or export, from which the imported product has been exempted or
has been or will be relieved by means of refund.
4. (a)
Except as otherwise provided for in this paragraph, where it
is necessary for the purposes of paragraph 2 of this Article for a
contracting party to convert into its own currency a price expressed in
the currency of another country, the conversion rate of exchange to be
used shall be based, for each currency involved, on the par value as
established pursuant to the Articles of Agreement of the International
Monetary Fund or on the rate of exchange recognized by the Fund, or on
the par value established in accordance with a special exchange
agreement entered into pursuant to Article XV of this
Agreement.
(b)
Where no such established par value and no such recognized rate
of exchange exist, the conversion rate shall reflect effectively the
current value of such currency in commercial transactions.
(c)
The CONTRACTING PARTIES, in agreement with the International
Monetary Fund, shall formulate rules governing the conversion by
contracting parties of any foreign currency in respect of which multiple
rates of exchange are maintained consistently with the Articles of
Agreement of the International Monetary Fund. Any contracting party may
apply such rules in respect of such foreign currencies for the purposes
of paragraph 2 of this Article as an alternative to the use of par
values. Until such rules are adopted by the Contracting Parties, any
contracting party may employ, in respect of any such foreign currency,
rules of conversion for the purposes of paragraph 2 of this Article
which are designed to reflect effectively the value of such foreign
currency in commercial transactions.
(d)
Nothing in this paragraph shall be construed to require any
contracting party to alter the method of converting currencies for
customs purposes which is applicable in its territory on the date of
this Agreement, if such alteration would have the effect of increasing
generally the amounts of duty payable.
5. The bases and methods for determining the value of products
subject to duties or other charges or restrictions based upon or
regulated in any manner by value should be stable and should be given
sufficient publicity to enable traders to estimate, with a reasonable
degree of certainty, the value for customs purposes.
B. Text of Ad Article VII
Ad Article VII Paragraph 1
The expression “or other charges” is not to be regarded as
including internal taxes or equivalent charges imposed on or in
connection with imported products.
Paragraph 2
1. It would be in conformity with
Article VII to presume that “actual
value” may be represented by the invoice price, plus any non-included
charges for legitimate costs which are proper elements of “actual
value” and plus any abnormal discount or other reduction from the
ordinary competitive price.
2. It would be in conformity with
Article VII, paragraph 2 (b), for a
contracting party to construe the phrase “in the ordinary course of
trade … under fully competitive conditions”, as excluding any
transaction wherein the buyer and seller are not independent of each
other and price is not the sole consideration.
3. The standard of “fully competitive conditions” permits a
contracting party to exclude from consideration prices involving special
discounts limited to exclusive agents.
4. The wording of subparagraphs
(a) and
(b) permits a contracting
party to determine the value for customs purposes uniformly either (1)
on the basis of a particular exporter’s prices of the imported
merchandise, or (2) on the basis of the general price level of like
merchandise.
C. Interpretation and Application of Article VII
No jurisprudence or decision of a relevant WTO body.
1. Reference to GATT practice
353. With respect to GATT practice concerning
Article VII.
IX. Article VIII
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A. Text of Article VIII
Article VIII: Fees and Formalities connected
with Importation and Exportation
1.
(a)
All fees and charges of whatever character (other than import
and export duties and other than taxes within the purview of Article
III) imposed by contracting parties on or in connection with importation
or exportation shall be limited in amount to the approximate cost of
services rendered and shall not represent an indirect protection to
domestic products or a taxation of imports or exports for fiscal
purposes.
(b)
The contracting parties recognize the need for reducing the
number and diversity of fees and charges referred to in subparagraph
(a).
(c)
The contracting parties also recognize the need for minimizing the
incidence and complexity of import and export formalities and for
decreasing and simplifying import and export documentation requirements.
2. A contracting party shall, upon request by another contracting
party or by the CONTRACTING PARTIES, review the operation of its laws
and regulations in the light of the provisions of this Article.
3. No contracting party shall impose substantial penalties for minor
breaches of customs regulations or procedural requirements. In
particular, no penalty in respect of any omission or mistake in customs
documentation which is easily rectifiable and obviously made without
fraudulent intent or gross negligence shall be greater than necessary to
serve merely as a warning.
4. The provisions of this Article shall extend to fees, charges,
formalities and requirements imposed by governmental authorities in
connection with importation and exportation, including those relating
to:
(a) consular transactions, such as consular invoices and
certificates;
(b) quantitative restrictions;
(c) licensing;
(d) exchange control;
(e) statistical services;
(f) documents, documentation and certification;
(g) analysis and inspection; and
(h) quarantine, sanitation and fumigation.
B. Text of Ad Article VIII
Ad Article VIII
1. While
Article VIII does not cover the use of multiple rates of
exchange as such, paragraphs 1 and 4 condemn the use of exchange taxes
or fees as a device for implementing multiple currency practices; if,
however, a contracting party is using multiple currency exchange fees
for balance of payments reasons with the approval of the International
Monetary Fund, the provisions of paragraph 9
(a) of Article XV fully
safeguard its position.
2. It would be consistent with
paragraph 1 if, on the importation of
products from the territory of a contracting party into the territory of
another contracting party, the production of certificates of origin
should only be required to the extent that is strictly indispensable.
C. Interpretation and Application of Article VIII
1. Article VIII:1(a)
354. In
Argentina — Textiles and Apparel, the Panel addressed an
Argentine ad valorem tax on imports of 3 per cent, called a “statistical
tax”, described by Argentina as designed to cover the cost of
providing a statistical service in the form of a reliable database for
foreign trade operators. The Panel found that this statistical tax was
inconsistent with the substantive requirements of Article VIII:1(a) of
GATT 1994. (Argentina subsequently did not appeal this finding, but
claimed that the Panel had failed to take properly into account a
relevant obligation by Argentina towards the IMF.) The Panel emphasized
that an ad valorem tax, by its very design, is not “limited in amount
to the approximate cost of services rendered”, as required by Article
VIII:1(a):
“The meaning of Article VIII was examined in detail in the Panel
Report on United States — Customs User Fee.(533) The panel found that
Article VIII’s requirement that the charge be ‘limited in amount to
the approximate cost of services rendered’ is ‘actually a dual
requirement, because the charge in question must first involve a “service”
rendered, and then the level of the charge must not exceed the
approximate cost of that “service”’.(534) According to the panel
report, the term ‘services rendered’ means ‘services rendered to
the individual importer in question’.(535) In the present case Argentina
states that the service is not rendered to the individual importer, or
to the specific importer associated with a particular operation, but to
foreign trade operators in general and foreign trade as an activity per
se.
An ad valorem duty with no fixed maximum fee, by its very nature, is
not ‘limited in amount to the approximate cost of services rendered’.
For example, high-price items necessarily will bear a much greater tax
burden than low-price goods, yet the service accorded to both is
essentially the same. An unlimited ad valorem charge on imported goods
violates the provisions of Article VIII because such a charge cannot be
related to the cost of the service rendered. For example, in the Customs
User Fee report, the panel examined the consistency with Article VIII of
0.22 and 0.17 per cent ad valorem customs merchandise processing fees
with no upper limits. The panel concluded that ‘the term “cost of
services rendered” … in Article VIII:1(a) must be interpreted to
refer to the cost of the customs processing for the individual entry in
question and accordingly that the ad valorem structure of the United
States merchandise processing fee was inconsistent with Article
VIII:1(a) to the extent that it caused fees to be levied in excess of
such costs’(536).”(537)
355. In support of its finding that an
ad valorem tax could not be
said to be commensurate with the “cost of services rendered”, the
Panel on Argentina — Textiles and Apparel refered to the Report of the
Working Party on Accession of the Democratic Republic of the Congo.(538)
The Panel also rejected Argentina’s argument that its tax had been
enacted for “fiscal purposes”:
“Argentina’s statistical tax is levied on an ad valorem basis
with no ceiling. As described in paragraph 6.70 above, Argentina’s tax
is clearly not related to the cost of a service rendered to the specific
importers concerned. The tax as assessed on many goods is not in
proportion to the cost of any service rendered. The tax purportedly
raises revenue for the purpose of financing customs activities related
to the registration, computing and data processing of information on
both imports and exports. While the gathering of statistical information
concerning imports may benefit traders in general, Article VIII bars the
levying of any tax or charge on importers to support the related costs
‘for the individual entry in question’ since it will also benefit
exports and exporters.(539)
As to Argentina’s argument that it was collecting this tax for ‘fiscal’
purposes in the context of its undertakings with the IMF, we note that
not only does Article VIII of GATT expressly prohibit such measures for
fiscal purposes but that clearly a measure for fiscal purposes will
normally lead to a situation where the tax results in charges being
levied in excess of the approximate costs of the statistical services
rendered.”(540)
356. Argentina did not appeal the findings of the Panel on
Argentina
— Textiles and Apparel, quoted in paragraphs 354-355
above. However,
before the Appellate Body, Argentina argued that the Panel erred in law
in failing to take account Argentina’s obligations to the IMF in the
Panel’s interpretation of Article VIII. Specifically, Argentina
claimed that a “Memorandum of Understanding” between Argentina and
the IMF included an “undertaking” or an “obligation” on the part
of Argentina to collect a specified amount in the form of a statistical
tax. Argentina pointed to a statement in the aforementioned memorandum
according to which the fiscal measures to be adopted by Argentina
include “… increases in import duties, including a temporary 3 per
cent surcharge on imports”. Argentina also argued that paragraph 10 of
the Agreement between the IMF and the WTO(541) and paragraph 5 of the
so-called Declaration on Coherence(542) require that the imposition on
governments of “cross-conditionality or additional conditions” must
be avoided. The Appellate Body found that Argentina had failed to
demonstrate an “irreconcilable conflict between its ‘Memorandum of
Understanding’ with the IMF and its obligations under Article VIII of
GATT”:
“[T]the Panel does not appear to have been convinced that Argentina
had a legally binding agreement with the IMF at all. From the panel
record in this case, it does not appear possible to determine the
precise legal nature of this Memorandum on Economic Policy, nor the
extent to which commitments undertaken by Argentina in this Memorandum
constitute legally binding obligations. We note that page 7 of the
Memorandum on Economic Policy refers to “a temporary 3 percent
surcharge on imports”, which is not necessarily the same thing as the
3 per cent statistical tax levied on imports. Argentina did not show an
irreconcilable conflict between the provisions of its “Memorandum of
Understanding” with the IMF and the provisions of Article VIII of the
GATT 1994. We thus agree with the Panel’s implicit finding that
Argentina failed to demonstrate that it had a legally binding commitment
to the IMF that would somehow supersede Argentina’s obligations under
Article VIII of the GATT 1994.”(543)
357. The Panel on
US — Certain EC Products examined the consistency
with several GATT provisions of the increased bonding requirements
imposed by the United States on imports from the European Communities in
order to secure the collection of additional import duties that were
only later authorized by the DSB. The Panel considered that the costs
relating to the bonding requirements upon importation could not
constitute the “approximate cost of services rendered” in the sense
of Article VIII:
“The meaning of Article VIII was examined in the adopted Panel
Report on United States — Customs Users Fee(544) and in the adopted
Appellate Body and Panel Reports on Argentina — Textiles. It was found
that Article VIII’s requirement that the charge be ‘limited in
amount to the approximate cost of services rendered’ is ‘actually a
dual requirement, because the charge in question must first involve a
“service” rendered, and then the level of the charge must not exceed
the approximate cost of that “service”.’(545) The term ‘services
rendered’ means ‘services rendered to the individual importer in
question.’(546)
Although very briefly in its rebuttals, the United States argued that
bonding requirements could be viewed as a form of fee for services
rendered (the services being the ‘early release of merchandise’) and
therefore should benefit from the carve-out of Article II:2(c) of
GATT,
the United States has not submitted any data on the second requirement.
There is no evidence that what was required from importers represented
any such approximate costs of any service. It is also difficult to
understand why the costs of such service would have suddenly increased
on 3 March (did the United States provide more services to importers on
3 March?), and then only for listed imports from the European
Communities.”(547)
2. Reference to GATT practice
358. With respect to GATT practice concerning
Article VIII:1.
D. Relationship with Other WTO Agrseements
1. WTO Agreement
359. In
Argentina — Textiles and Apparel, the Appellate Body agreed
that that there is nothing in the Agreement between the IMF and the WTO,
the Declaration on the Relationship of the World Trade Organization with
the International Monetary Fund or the so-called Declaration on
Coherence(548) which justifies a conclusion that a Member’s commitments
to the IMF shall prevail over its obligations under Article VIII of the
GATT 1994.(549) See Chapter on the
WTO Agreement,
Section IV.B.5(iii).
2. Agreement between the IMF and the WTO
360. In
Argentina — Textiles and Apparel, the Appellate Body agreed
that that there is nothing in the Agreement between the IMF and the WTO,
the Declaration on the Relationship of the World Trade Organization with
the International Monetary Fund which justifies a conclusion that a
Member’s commitments to the IMF shall prevail over its obligations
under Article VIII of the GATT 1994.(550) See Chapter on the
WTO Agreement, Section
IV.B.5(iii).
3. Declaration on Coherence
361. In
Argentina — Textiles and Apparel, the Appellate Body agreed
that that there is nothing in the Declaration on the Contribution of the
World Trade Organization to Achieving Greater Coherence in Global
Economic Policymaking (Declaration on Coherence) which would justify a
conclusion that a Member’s commitments to the IMF shall prevail over
its obligations under Article VIII of the GATT 1994.(551) See Chapter on
the WTO Agreement, Section
IV.B.5(iii).
X. Article IX
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A. Text of Article IX
Article IX: Marks of Origin
1. Each contracting party shall accord to the products of the
territories of other contracting parties treatment with regard to
marking requirements no less favourable than the treatment accorded to
like products of any third country.
2. The contracting parties recognize that, in adopting and enforcing
laws and regulations relating to marks of origin, the difficulties and
inconveniences which such measures may cause to the commerce and
industry of exporting countries should be reduced to a minimum, due
regard being had to the necessity of protecting consumers against
fraudulent or misleading indications.
3. Whenever it is administratively practicable to do so, contracting
parties should permit required marks of origin to be affixed at the time
of importation.
4. The laws and regulations of contracting parties relating to the
marking of imported products shall be such as to permit compliance
without seriously damaging the products, or materially reducing their
value, or unreasonably increasing their cost.
5. As a general rule, no special duty or penalty should be imposed by
any contracting party for failure to comply with marking requirements
prior to importation unless corrective marking is unreasonably delayed
or deceptive marks have been affixed or the required marking has been
intentionally omitted.
6. The contracting parties shall co-operate with each other with a
view to preventing the use of trade names in such manner as to
misrepresent the true origin of a product, to the detriment of such
distinctive regional or geographical names of products of the territory
of a contracting party as are protected by its legislation. Each
contracting party shall accord full and sympathetic consideration to
such requests or representations as may be made by any other contracting
party regarding the application of the undertaking set forth in the
preceding sentence to names of products which have been communicated to
it by the other contracting party.
B. Interpretation and Application of Article IX
No jurisprudence or decision of a competent WTO body.
1. Reference to GATT Practice
362. With respect to GATT practice concerning
Article VIII:1.
XI. Article X
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A. Text of Article X
Article X: Publication and Administration of Trade Regulations
1. Laws, regulations, judicial decisions and administrative rulings
of general application, made effective by any contracting party,
pertaining to the classification or the valuation of products for
customs purposes, or to rates of duty, taxes or other charges, or to
requirements, restrictions or prohibitions on imports or exports or on
the transfer of payments therefor, or affecting their sale,
distribution, transportation, insurance, warehousing inspection,
exhibition, processing, mixing or other use, shall be published promptly
in such a manner as to enable governments and traders to become
acquainted with them. Agreements affecting international trade policy
which are in force between the government or a governmental agency of
any contracting party and the government or governmental agency of any
other contracting party shall also be published. The provisions of this
paragraph shall not require any contracting party to disclose
confidential information which would impede law enforcement or otherwise
be contrary to the public interest or would prejudice the legitimate
commercial interests of particular enterprises, public or private.
2. No measure of general application taken by any contracting party
effecting an advance in a rate of duty or other charge on imports under
an established and uniform practice, or imposing a new or more
burdensome requirement, restriction or prohibition on imports, or on the
transfer of payments therefor, shall be enforced before such measure has
been officially published.
3. (a)
Each contracting party shall administer in a uniform,
impartial and reasonable manner all its laws, regulations, decisions and
rulings of the kind described in paragraph 1 of this
Article.
(b)
Each contracting party shall maintain, or institute as soon as
practicable, judicial, arbitral or administrative tribunals or
procedures for the purpose, inter alia, of the prompt review and
correction of administrative action relating to customs matters. Such
tribunals or procedures shall be independent of the agencies entrusted
with administrative enforcement and their decisions shall be implemented
by, and shall govern the practice of, such agencies unless an appeal is
lodged with a court or tribunal of superior jurisdiction within the time
prescribed for appeals to be lodged by importers; Provided that the
central administration of such agency may take steps to obtain a review
of the matter in another proceeding if there is good cause to believe
that the decision is inconsistent with established principles of law or
the actual facts.
(c) The provisions of subparagraph
(b) of this paragraph shall not
require the elimination or substitution of procedures in force in the
territory of a contracting party on the date of this Agreement which in
fact provide for an objective and impartial review of administrative
action even though such procedures are not fully or formally independent
of the agencies entrusted with administrative enforcement. Any
contracting party employing such procedures shall, upon request, furnish
the CONTRACTING PARTIES with full information thereon in order that they
may determine whether such procedures conform to the requirements of
this subparagraph.
B. Interpretation and Application of Article X
1. General
363. In
EC — Poultry, the Appellate Body rejected Brazil’s claim
that the retroactive application of transitional safeguard measures
under the Agreement on Textiles and Clothing was prohibited by Article
X. The Appellate Body briefly discussed the scope of Article X as
follows:
“Article X relates to the
publication and administration of ‘laws,
regulations, judicial decisions and administrative rulings of general
application’, rather than to the substantive content of such measures.(552) …
Thus, to the extent that Brazil’s appeal relates to the
substantive
content of the EC rules themselves, and not to their publication or
administration, that appeal falls outside the scope of Article X of the
GATT 1994.”(553)
2. Article X:1
(a) “of general
application”
(i) Interpretation
364. In
US — Hot-Rolled Steel, the Panel was confronted with an
alleged violation of Article X:3(a). However, before addressing this
question the Panel ruled, in a preliminary finding not reviewed by the
Appellate Body, that the anti-dumping measure did not constitute a
measure “of general application” within the meaning of Article
X:1.
The Panel held:
“[F]inally, we have been presented with arguments alleging
violation of Article X:3(a) of GATT 1994 which relate to the actions of
the United States in the context of a single anti-dumping investigation.
We doubt whether the final anti-dumping measure before us in this
dispute can be considered a measure of ‘general application’. In
this context, we note that Japan has not even alleged, much less
established, a pattern of decision-making with respect to the specific
matters it is raising which would suggest a lack of uniform, impartial
and reasonable administration of the US anti-dumping law. While it is
not inconceivable that a Member’s actions in a single instance might
be evidence of lack of uniform, impartial, and reasonable administration
of its laws, regulations, decisions and rulings, we consider that the
actions in question would have to have a significant impact on the
overall administration of the law, and not simply on the outcome in the
single case in question. Moreover, we consider it unlikely that such a
conclusion could be reached where the actions in the single case in
question were, themselves, consistent with more specific obligations
under other WTO Agreements.”(554)
365. In
US — Underwear, the Appellate Body agreed with the
following finding of the Panel on the term “of general application”:(555)
“We note that Article X:1 of GATT
1994, which also uses the
language ‘of general application’, includes ‘administrative
rulings’ in its scope. The mere fact that the restraint at issue was
an administrative order does not prevent us from concluding that the
restraint was a measure of general application. Nor does the fact that
it was a country-specific measure exclude the possibility of it being a
measure of general application. If, for instance, the restraint was
addressed to a specific company or applied to a specific shipment, it
would not have qualified as a measure of general application. However,
to the extent that the restraint affects an unidentified number of
economic operators, including domestic and foreign producers, we find it
to be a measure of general application.”(556)
366. In
EC — Poultry, the Appellate Body reviewed the Panel’s
finding that certain import licensing of the European Communities on
certain poultry products was not inconsistent with Article X because “the
information which Brazil claims the EC should have made available
concerns a specific shipment, which is outside the scope of Article X of
GATT.”(557) In upholding the Panel’s finding, the Appellate Body
discussed the term “of general application” as follows:
“Article X:1 of the GATT 1994 makes it clear that
Article X does
not deal with specific transactions, but rather with rules ‘of general
application’. It is clear to us that the EC rules pertaining to import
licensing set out in Regulation 1431/94 are rules ‘of general
application’. …
…
… Although it is true, as Brazil contends, that any measure of
general application will always have to be applied in specific cases,
nevertheless, the particular treatment accorded to each individual
shipment cannot be considered a measure ‘of general application’
within the meaning of Article X. The Panel cited the following passage
from the panel report in United States — Restrictions on Imports of
Cotton and Man-made Fibre Underwear:
‘The mere fact that the restraint at issue was an administrative
order does not prevent us from concluding that the restraint was a
measure of general application. Nor does the fact that it was a
country-specific measure exclude the possibility of it being a measure
of general application. If, for instance, the restraint was addressed to
a specific company or applied to a specific shipment, it would not have
qualified as a measure of general application. However, to the extent
that the restraint affects an unidentified number of economic operators,
including domestic and foreign producers, we find it to be a measure of
general application.’”(558)
We agree with the Panel that “conversely, licences issued to a
specific company or applied to a specific shipment cannot be considered
to be a measure ‘of general application’ within the meaning of
Article X.”(559)
367.
In Japan — Film, the Panel, referring to the Panel Report on
US — Underwear referenced in paragraph 364 above, interpreted the term
“of general application” as follows:
“[I]t stands to reason that inasmuch as the Article X:1 requirement
applies to all administrative rulings of general application, it also
should extend to administrative rulings in individual cases where such
rulings establish or revise principles or criteria applicable in future
cases. At the same time, we consider that it is incumbent upon the
United States in this case to clearly demonstrate the existence of such
unpublished administrative rulings in individual matters which establish
or revise principles applicable in future cases.”(560)
(ii) Reference to GATT practice
368. For GATT practice on this subject-matter.
3. Article X:2
(a) General
369. In
US — Underwear, the Appellate Body described the policy
underlying Article X:2 as pertaining to transparency and due process:
“Article X:2, General
Agreement, may be seen to embody a principle
of fundamental importance — that of promoting full disclosure of
governmental acts affecting Members and private persons and enterprises,
whether of domestic or foreign nationality. The relevant policy
principle is widely known as the principle of transparency and has
obviously due process dimensions. The essential implication is that
Members and other persons affected, or likely to be affected, by
governmental measures imposing restraints, requirements and other
burdens, should have a reasonable opportunity to acquire authentic
information about such measures and accordingly to protect and adjust
their activities or alternatively to seek modification of such measures.”(561)
370. The Panel on
US — Underwear was called on to find whether a
Member is entitled, when taking transitional safeguard measures under
Article 6 of the ATC, to backdate the application of such measures to
the date of publication of its request for consultations. The Panel
opined that Article 6.10 of the
ATC, the relevant provision, was “silent”
as to this question and turned to Article X of the
GATT. The Panel
concluded that “if the importing country publishes the proposed
restraint period and restraint level after the request for
consultations, it can later set the initial date of the restraint period
as the date of the publication of the proposed restraint”.(562) Upon
review, the Appellate Body disagreed with the Panel’s finding that
Article 6.10 of the ATC was “silent” as to whether a transitional
safeguard measure could be backdated or not and found that Article 6.10
prohibited such backdating. With respect to the Panel’s finding that
Article X of GATT permitted such backdating, the Appellate Body held
that prior publication of a measure, as required under Article X of
GATT, could not, in and of itself, justify the retroactive effect of a
restrictive governmental measure:
“[W]e are bound to observe that Article X:2 of the
General Agreement, does not speak to, and hence does not resolve, the issue of
permissibility of giving retroactive effect to a safeguard restraint
measure. The presumption of prospective effect only does, of course,
relate to the basic principles of transparency and due process, being
grounded on, among other things, these principles. But prior publication
is required for all measures falling within the scope of Article
X:2,
not just ATC safeguard restraint measures sought to be applied
retrospectively. Prior publication may be an autonomous condition for
giving effect at all to a restraint measure. Where no authority exists
to give retroactive effect to a restrictive governmental measure, that
deficiency is not cured by publishing the measure sometime before its
actual application. The necessary authorization is not supplied by
Article X:2 of the General Agreement.”(563)
4. Article X:3
(a) General
371. In
US — Shrimp, the Appellate Body ruled that that the lack of
transparency of the disputed legislation was contrary to the spirit of
Article X:3. The Appellate Body held:
“[T]he provision of Article X:3 of the GATT 1994 bear upon this
matter. In our view, Section 609 falls within the “laws, regulations,
judicial decisions and administrative rulings of general application”
described in Article X:1. Inasmuch there are due process requirements
generally for measures that are otherwise imposed in compliance with WTO
obligations, it is only reasonable that rigorous compliance with the
fundamental requirements of due process should be required in the
application and administration of a measure which purports to be an
exception to the treaty obligations of the member imposing the measure
and which effectively results in a suspension pro hac vice of the treaty
rights of other members.
It is also clear to us that Article X:3 of the GATT 1994 establishes
certain minimum standards for transparency and procedural fairness in
the administration of trade regulations which, in our view, are not met
here. The non-transparent and ex parte nature of the internal
governmental procedures applied by the competent officials in the Office
of Marine Conservation, the Department of State, and the United States
National Marine Fisheries Service throughout the certification processes
under Section 609, as well as the fact that countries whose applications
are denied do not receive formal notice of such denial, nor of the
reasons for the denial, and the fact, too, that there is no formal legal
procedure for review of, or appeal from, a denial of an application, are
all contrary to the spirit, if not the letter, of Article X:3 of the
GATT 1994.”(564)
(i) Scope of paragraph 3
372. In
EC — Bananas III, the Panel rejected the EC argument that
Article X:3 applies only to internal measures, but not to licensing
regulations for tariff quotas. In its finding, the Panel referred to
Article X:1 and held that it “defines the coverage of Article X:3(a)”.(565)
(b) Article X:3(a)
(i) Scope of Article X:3(a)
373. In
EC — Bananas III, the Appellate Body examined the European
Communities’ appeal against the Panel’s finding that the imposition
of different import licensing systems on like products imported from
different Members was inconsistent with Article
X:3(a). In upholding the
Panel’s finding, the Appellate Body defined the scope of paragraph
3(a) by drawing a distinction between laws, regulations, decisions and
rulings themselves and their administration:
“The text of Article X:3(a) clearly indicates that the requirements
of ‘uniformity, impartiality and reasonableness’ do not apply to the
laws, regulations, decisions and rulings themselves, but rather to the
administration of those laws, regulations, decisions and rulings. The
context of Article X:3(a) within Article
X, which is entitled ‘Publication
and Administration of Trade Regulations’, and a reading of the other
paragraphs of Article X, make it clear that Article X applies to the
administration of laws, regulations, decisions and rulings. To the
extent that the laws, regulations, decisions and rulings themselves are
discriminatory, they can be examined for their consistency with the
relevant provisions of the GATT 1994.”(566)
374. The Appellate Body on
EC — Poultry confirmed the above line of
interpretation and found that “to the extent that Brazil’s appeal
relates to the substantive content of the EC rules themselves, and not
to their publication or administration, that appeal falls outside the
scope of Article X of the GATT 1994. The WTO-consistency of such
substantive content must be determined by reference to provisions of the
covered agreements other than Article X of the GATT
1994.”(567)
375. The Panel on
Argentina — Hides and Leather rejected Argentina’s
argument that Article X:3(a) only applies in situations when there is
discrimination in treatment with respect to, for example, exports to two
or more Members. The Panel stated:
“In our view, there is no requirement that Article X:3(a) be
applied only in situations where it is established that a Member has
applied its Customs laws and regulations in an inconsistent manner with
respect to the imports of or exports to two or more Members.
Furthermore, Article
X:3(a), by its terms, calls for a uniform,
impartial and reasonable administration of trade-related regulations.
Nowhere does it refer to Members or products originating in or destined
for certain Members’ territories, as is explicitly contained in other
GATT 1994 Articles such as I, II and
III. Indeed, Article X:1 requires
the prompt publication of trade-related regulations ‘so as to enable
governments and traders to become acquainted with them.’ Similarly,
Article X:3(b) requires Members to provide for domestic review
procedures relating to customs matters to which normally only private
traders, not Members would have access.(568) These references undercut
Argentina’s argument that Article X can only apply in situations where
there is discrimination between WTO Members.”(569)
376. Further, in
Argentina — Hides and Leather, the Panel disagreed
with Argentina’s argument that a violation of Article X:3(a) can be
found not in the substance of a regulation but in its administration.
The Panel was reviewing an Argentine measure which authorized the
presence of representatives of certain industrial associations during
customs controls of bovine raw hides and certain other hides before
export. The Panel found that Article X:3(a) applied to the measure at
issue, because it did not contain “substantive Customs rules for
enforcement of export laws”, but rather “provide[d] for a certain
manner of applying those substantive rules”:
“If the substance of a rule could not be challenged, even if the
rule was administrative in nature, it is unclear what could ever be
challenged under Article X. First, there is no requirement in
Article X:3(a) that it apply only to ‘unwritten’ rules. Again, this would be
contrary to that provision’s own language linking it to Article
X:1.
Second, such an approach would also likely run counter to the other
aspect of the Appellate Body’s holding in European Communities — Poultry regarding Article X, to the effect that it applies to rules of
general application and not to specific shipments.(570) Looking only to
individual Customs officers’ enforcement actions, rather than measures
such as Resolution 2235, as Argentina implies, would almost certainly
require a review of a specific instance of abuse rather than the general
rule applicable.(571) This would effectively write
Article X:3(a) out of
existence, which we cannot agree with.(572)
Thus, we are left with a situation where we have a written provision,
Resolution 2235, and we need to determine whether this Resolution is
substantive or administrative. In our view it is administrative in
nature and therefore properly subject to review under Article
X:3(a).
Resolution 2235 does not establish substantive Customs rules for
enforcement of export laws. Argentina has pointed out that those are
contained primarily in the Customs Code (Law No. 22415), Resolution
(ANA) No. 1284/95 and Resolution (ANA) No. 125/97.(573) Rather, Resolution
2235 provides for a means to involve private persons in assisting
Customs officials in the application and enforcement of the substantive
rules, namely, the rules on classification and export duties. Resolution
2235 does not create the classification requirements; it does not
provide for export refunds; it does not impose export duties. It merely
provides for a certain manner of applying those substantive rules. This
measure clearly is administrative in nature.”(574)
377. In
US — Corrosion-Resistant Steel Sunset Review, Japan argued
that the United States’ sunset review laws were administrative in
nature and consequently could be challenged under Article X:3(a) of the
GATT 1994. Japan had asserted that the United States’ administration
of its sunset review laws was inconsistent with Article X:3(a) as the
United States legislation mandated self-initiation of sunset reviews
without sufficient evidence. Japan also claimed that the United States’
administration of sunset review laws was not uniform with different
approaches with regard to Article 11.2 reviews and sunset reviews being
taken. The Panel ruled, in a finding not reviewed by the Appellate Body,
that Japan’s allegations under Article X:3(a) related to United States
laws and regulations rather than its administration and accordingly was
not within the scope of Article X:3(a):
“On the first point, i.e. self-initiation of sunset reviews without
any, or sufficient, evidence, Japan argues that the US statute and
regulations, which mandate such self-initiation, are ‘unreasonable’
because they allow the DOC to disregard the substantive requirements for
the initiation. Japan further submits that such self-initiation renders
the administration of US law ‘partial’ because it favours the US
domestic industry. We note that Japan made a substantive claim
challenging both the US law as such and its application in this
particular sunset review regarding self-initiation of sunset reviews
without sufficient evidence. We recall our finding above that
self-initiation of sunset reviews under Article 11.3 is not subject to
the evidentiary requirements of Article 5.6. This indicates that the
substantive content of this aspect of US law, i.e. evidentiary standards
applicable to the self-initiation of sunset reviews, can be, and in fact
has in this case been, challenged by Japan. Therefore, deriving guidance
from the ruling of the Appellate Body, in EC — Poultry, we find that
this aspect of US law cannot be challenged under Article X:3(a) of GATT
1994 because it relates to the substance rather than the administration
of US law.
With regard to the second ‘as such’ allegation of Japan, i.e.,
different approaches taken by the United States regarding Article 11.2
and 11.3 reviews, even assuming that this argument legitimately falls
within the scope of application of Article
X:3(a), we understand that
Japan has based its “as such” allegations here exclusively upon the
Sunset Policy Bulletin. We have found above that the Sunset Policy
Bulletin is not challengeable as such under the WTO Agreement. We
therefore examine no further Japan’s ‘as such’ allegations relying
solely on the Sunset Policy Bulletin.
We therefore conclude that the administration of the US sunset review
law as such was not inconsistent with Article X:3(a) of GATT
1994.”(575)
378. In
US — Corrosion-Resistant Steel Sunset Review Japan argued
that the application of the US laws and regulations with regard to the
sunset reviews was unreasonable and partial, and hence inconsistent with
Article X:3(a). Japan based its contention on that less information was
required from United States domestic producers compared with exporters.
The Panel recalled WTO case law that matters relating to the substantive
nature of laws and regulations go beyond the scope of Article
X:3(a):
“Japan further argues that the fact that not as much information is
requested from domestic producers renders the administration of US law
partial.
The nature and quantity of the information that will be in the
possession of foreign exporters and producers will necessarily differ
from the information possessed by the domestic industry, and this
information will be used for different purposes by the investigating
authority. This is because generally, in investigations (and reviews),
foreign exporters will be the main source of information regarding the
dumping, or likelihood of continuation or recurrence of dumping,
component of the determination that must be made, while domestic
producers will possess more information relevant to the injury component
of the determination that must be made. Consequently, we find that this
aspect of Japan’s claim also falls outside the scope of Article
X:3(a).”(576)
379. In
US — Hot-Rolled Steel, the Panel pointed out that, for a
Member’s action to violate Article X:3(a) that action should have a
significant impact on the overall administration of that Member’s law
and not simply on the outcome of the single case in question.(577)
(ii) “administer in a uniform, impartial and reasonable manner”
380. In
Argentina — Hides and Leather, the Panel explained the
nature of the obligation under Article X:3(a) by distinguishing between
transparency between WTO Members and transparency with respect to
individual traders:
“In applying these tests, it is important to recall that we are not
to duplicate the substantive rules of the GATT 1994. Thus, for example,
the test generally will not be whether there has been discriminatory
treatment in favor of exports to one Member relative to another. Indeed,
the focus is on the treatment accorded by government authorities to the
traders in question. This is explicit in Article X:1 which requires,
inter alia, that all provisions ‘shall be published promptly in such a
manner as to enable governments and traders to become acquainted with
them.’ (emphasis added). While it is normal that the GATT 1994 should
require this sort of transparency between Members, it is significant
that Article X:1 goes further and specifically references the importance
of transparency to individual traders.”(578)
381. In
Argentina — Hides and Leather, the Panel addressed the
concept of “uniformity” with respect to the requirement in Article
X:3(a) that laws and regulations shall be administered “in a uniform,
impartial and reasonable manner”. The Panel opined “that this
provision should not be read as a broad anti-discrimination provision.”
Rather, the Panel read this requirement to stipulate “uniform
administration of Customs laws and procedures between individual
shippers and even with respect to the same person at different times and
different places”:
“The term ‘uniform’ appears in the GATT 1994 only with respect
to administration of Customs laws. Article VII:2(b) provides that when
assessing Customs valuation on the basis of ‘actual value’
variations may exist based on quantities provided that such prices are
uniformly related to quantities in other transactions.
In addition to the term appearing in paragraph 3(a) of Article
X, it
also appears in paragraph 2 of that Article requiring uniform practices
for certain changes in applying Customs laws. Finally, Ad Article I,
paragraph 4, provides for uniform practices in re-application of tariff
classifications and imposition of certain new classifications at the
time of the provisional applications of the GATT 1947.
It is obvious from these uses of the terms that it is meant that
Customs laws should not vary, that every exporter and importer should be
able to expect treatment of the same kind, in the same manner both over
time and in different places and with respect to other persons. Uniform
administration requires that Members ensure that their laws are applied
consistently and predictably and is not limited, for instance, to
ensuring equal treatment with respect to WTO Members. That would be a
substantive violation properly addressed under Article
I. This is a
requirement of uniform administration of Customs laws and procedures
between individual shippers and even with respect to the same person at
different times and different places.
We are of the view that this provision should not be read as a broad
anti-discrimination provision. We do not think this provision should be
interpreted to require all products be treated identically. That would
be reading far too much into this paragraph which focuses on the day to
day application of Customs laws, rules and regulations. There are many
variations in products which might require differential treatment and we
do not think this provision should be read as a general invitation for a
panel to make such distinctions.”(579)
382. In
Argentina — Hides and Leather, the Panel addressed an
argument put forward by the European Communities based on the
interpretation of the terms “impartial”, contained in Article
X:3(a). The European Communities argued that the Argentine measure
authorizing the presence of representatives of domestic industrial
associations at customs controls of bovine raw hides and certain other
hides before export, persons which according to the European Communities
were “partial and interested”, was not an impartial application of
the relevant custom rules. The Panel agreed with the European
Communities:
“Much as we are concerned in general about the presence of private
parties with conflicting commercial interests in the Customs process, in
our view the requirement of impartial administration in this dispute is
not a matter of mere presence of representatives [of the relevant
industrial associations] in such processes. It all depends on what that
person is permitted to do. In our view, the answer to this question is
related directly to the question of access to information as part of the
product classification process as discussed in the previous Section. Our
concern here is focussed on the need for safeguards to prevent the
inappropriate flow of one private person’s confidential information to
another as a result of the administration of the Customs laws, in this
case the implementing Resolution 2235.
Whenever a party with a contrary commercial interest, but no relevant
legal interest, is allowed to participate in an export transaction such
as this, there is an inherent danger that the Customs laws, regulations
and rules will be applied in a partial manner so as to permit persons
with adverse commercial interests to obtain confidential information to
which they have no right.
While this situation could be remedied by adequate safeguards, we do
not consider that such safeguards presently are in place. Therefore,
Resolution 2235 cannot be considered an impartial administration of the
Customs laws, regulations and rules described in Article X:1 and, thus,
is inconsistent with Article X:3(a) of the GATT
1994.(580)
383. With respect to the same Argentine measure, described in
paragraph 381 above, the European Communities was also claiming that the
requirement of “reasonableness” under Article X:3(a) was infringed.
The Panel on Argentina — Hides and Leather again agreed with the
European Communities:
“[W]e must conclude that a process aimed at assuring the proper
classification of products, but which inherently contains the
possibility of revealing confidential business information, is an
unreasonable manner of administering the laws, regulations and rules
identified in Article X:1 and therefore is inconsistent with
Article X:3(a).”(581)
384. In
US — Stainless Steel, the Panel rejected Korea’s claim
that the United States violated Article X:3(a) by departing from its own
established policy with respect to the determination of the prices of
local sales which are to be compared to alleged dumping exports. The
Panel held that Article X:3(a) was not “intended to function as a
mechanism to test the consistency of a Member’s particular decisions
or rulings with the Member’s own domestic law and practice”:
“We note at the outset of our examination that we have grave doubts
as to whether Article X:3(a) can or should be used in the manner
advocated by Korea. As the United States correctly points out, the WTO
dispute settlement system ‘serves to preserve the rights and
obligations of Members under the covered agreements, and to clarify the
existing provisions of those agreements’.(582) It was not in our view
intended to function as a mechanism to test the consistency of a Member’s
particular decisions or rulings with the Member’s own domestic law and
practice; that is a function reserved for each Member’s domestic
judicial system,(583) and a function WTO panels would be particularly
ill-suited to perform. An incautious adoption of the approach advocated
by Korea could however effectively convert every claim that an action is
inconsistent with domestic law or practice into a claim under the WTO
Agreement.
In any event, we do not consider that the DOC in this investigation
committed the ‘unprecedented departure’ from ‘established policy’
alleged by Korea such that its behaviour was either non-uniform or
unreasonable. In our view, the requirement of uniform administration of
laws and regulations must be understood to mean uniformity of treatment
in respect of persons similarly situated; it cannot be understood to
require identical results where relevant facts differ. Nor do we
consider that the requirement of reasonable administration of laws and
regulations is violated merely because, in the administration of those
laws and regulations, different conclusions were reached based upon
differences in the relevant facts.”(584)
(iii) Reference to GATT practice
385. With respect to GATT practice on this subject-matter.
(c) Article X:3(c)
(i) “the date of this Agreement”
386. With respect to GATT practice concerning the phrase “the date
of this Agreement”.
C. Relationship with other Articles
1. General
387. In
EC — Bananas III, the Appellate Body explained the
relationship between Article X and other GATT provisions. See the
excerpt referenced in paragraph 373 above. This finding of the Appellate
Body was also cited by the Panel on Argentina — Hides and Leather.(585)
2. Article I
388. In
Indonesia — Autos, the Panel examined whether a series of
measures taken by Indonesia to develop its domestic automobile industry
was inconsistent with Article X as well as Articles I and
III. After
having found that the Indonesian National Car Programme violated “the
provisions of Article I and/or
Article III of GATT”, the Panel did not
consider it necessary to examine Japan’s claims under Article X of
GATT.(586)
389. In
Argentina — Hides and Leather, the Panel rejected Argentina’s
argument that Article X:3(a) only applies in situations when there is
discrimination in treatment with respect to, for example, exports to two
or more Members. See the excerpt referenced in paragraph 374
above.
3. Article III
390. In
Indonesia — Autos, the Panel discussed the relationship
between Articles III and X. See the excerpt referenced in
paragraph 388 above.
4. Reference to GATT practice
391. With respect to GATT practice in the context of the relationship
between Article X of GATT and other Articles.
D. Relationship with Other WTO Agreements
1. Licensing Agreement
392. In
EC — Bananas III, the Appellate Body reviewed the Panel’s
finding that the EC import licensing system on imports of bananas was in
violation of Article X as well as Article 1.3 of the
Licensing
Agreement. The Appellate Body stated that “the provisions of Article
X:3(a) of the GATT 1994 and Article 1.3 of the
Licensing Agreement have
identical coverage”:
“Article
X:3(a) of the GATT 1994 applies to all ‘laws,
regulations, decisions and rulings of the kind described in paragraph 1’
of Article X, which includes those, inter alia, ‘pertaining to …
requirements, restrictions or prohibitions on imports …’. The EC
import licensing procedures are clearly regulations pertaining to
requirements on imports and, therefore, are within the scope of Article
X:3(a) of the GATT 1994. As we have concluded, the Licensing Agreement
also applies to the EC import licensing procedures. We agree, therefore,
… that both the Licensing Agreement and the relevant provisions of the
GATT 1994, in particular, Article X:3(a), apply to the EC import
licensing procedures. In comparing the language of Article 1.3 of the
Licensing Agreement and of Article
X:3(a) of the GATT 1994, we note that
there are distinctions between these two articles. The former provides
that ‘the rules for import licensing procedures shall be neutral in
application and administered in a fair and equitable manner’. The
latter provides that each Member shall ‘administer in a uniform,
impartial and reasonable manner all its laws, regulations, decisions or
rulings of the kind described in paragraph 1 of
[Article X]’.
We attach no significance to the difference in the phrases ‘neutral
in application and administered in a fair and equitable manner’ in
Article 1.3 of the Licensing Agreement and ‘administer in a uniform,
impartial and reasonable manner’ in Article
X:3(a) of the GATT 1994.
In our view, the two phrases are, for all practical purposes,
interchangeable. We agree, therefore, … that the provisions of Article
X:3(a) of the GATT 1994 and Article 1.3 of the
Licensing Agreement have
identical coverage.
Although Article X:3(a) of the GATT 1994 and
Article 1.3 of the
Licensing Agreement both apply, the Panel, in our view, should have
applied the Licensing Agreement first, since this agreement deals
specifically, and in detail, with the administration of import licensing
procedures. If the Panel had done so, then there would have been no need
for it to address the alleged inconsistency with Article X:3(a) of the
GATT 1994.”(587)
2. Anti-Dumping Agreement
393. In
US — DRAMS, Korea, the complainant, claimed that a
particular United States anti-dumping duty order was in violation of
Article X of GATT as well as several Articles of the Anti-Dumping
Agreement. Having already found a violation of Article 11.2 of the
Anti-Dumping Agreement, the Panel exercised judicial economy with
respect to Articles I and X of the GATT
1994.(588)
394. In
US — Stainless Steel, Korea, the complainant, argued that
the United States violated Article X:3(a) of GATT as well as
Article
2.4.1 of the Anti-Dumping Agreement by performing an unnecessary “double
conversion” in calculating the prices of certain local sales which are
to be compared to the alleged dumping exports. After having found a
violation of Article 2.4.1 in this regard, the Panel exercised judicial
economy with respect to Korea’s claim under Article
X:3(a).(589)
Footnotes:
477.
Appellate Body Report on Brazil — Desiccated Coconut, p. 17.
Appellate Body later noted that Article 18.3 of the
Anti-Dumping
Agreement is an identical provision to
Article 32.3 of the SCM Agreement.
Appellate Body Report on Brazil — Desiccated Coconut, fn.
23. back to text
478.
Appellate Body Report on Brazil — Desiccated Coconut, p. 16.
back to text
479. (footnote original) Panel Report on
Brazil — Desiccated
Coconut, fn. 62. back to text
480.
Appellate Body Report on Brazil — Desiccated Coconut, p. 17.
back to text
481.
Appellate Body Report on Brazil — Desiccated Coconut, fn. 21.
back to text
482. Panel Report on
Brazil — Desiccated
Coconut, para. 246.
back to text
483. (footnote original) As demonstrated by the
US — Canadian
Pork panel. back to text
484.
Appellate Body Report on Brazil — Desiccated Coconut, p. 18.
back to text
485.
Appellate Body Report on Brazil — Desiccated Coconut, p. 18.
back to text
486. (footnote original) There is an identical provision to
Article 32.3 of the SCM Agreement contained in Article 18.3 of the
Agreement on Implementation of Article VI of the
General Agreement on
Tariffs and Trade 1994 (the “Anti-Dumping Agreement”). Similarly,
there are mirror transitional decisions approved by the Tokyo Round
Committee on Anti-dumping Measures, in the Decision on Transitional
Co-Existence of the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade and the Marrakesh Agreement
Establishing the World Trade Organization, ADP/131, 16 December 1994;
and the Decision on Consequences of Withdrawal from or Termination of
the Agreement on Implementation of Article VI of the General Agreement
on Tariffs and Trade, ADP/132, 16 December 1994. back to text
487. (footnote original) In its appellant’s submission dated 9
January 1997, at p. 37, para. 59, the Philippines argues that in United
States — Gasoline, both the panel and the Appellate Body assessed the
pre WTO domestic regulatory process that led to the imposition of the
United States’ environmental measure at issue in that dispute. We note
that, in that case, there was no issue with respect to the temporal
application of the measure in dispute, nor did the panel or the
Appellate Body examine the applicability of the Agreement on Technical
Barriers to Trade. back to text
488.
Appellate Body Report on Brazil — Desiccated Coconut, p. 18.
back to text
489. (footnote original) By “transitional decisions”, we
refer to the Decision on Transitional Co-Existence of the GATT 1947 and
the WTO Agreement, PC/12-L/7583, 13 December 1994; the Decision on
Transitional Co-Existence of the Agreement on Interpretation and
Application of Articles VI, XVI and
XXIII of the General Agreement on
Tariffs and Trade and the Marrakesh Agreement Establishing the World
Trade Organization (the “Decision on Transitional Co-existence of the
Tokyo Round SCM Code and the WTO Agreement”), SCM/186, 16 December
1994; and the Decision on Consequences of Withdrawal from or Termination
of the Agreement on Interpretation and Application of Articles
VI, XVI and XXIII
of the General Agreement on Tariffs and Trade (the “Decision
on Consequences of Withdrawal from or Termination of the Tokyo Round SCM
Code”), SCM/187, 16 December 1994. back to text
490.
Appellate Body Report on Brazil — Desiccated Coconut, pp. 4-5.
back to text
491.
Appellate Body Report on Brazil — Desiccated Coconut, p. 20.
back to text
492.
Appellate Body Report on Brazil — Desiccated Coconut, pp. 20-21.
back to text
493. Appellate Body Report on
US — 1916 Act, para. 109.
back to text
494. Appellate Body Report on
US — 1916 Act, para. 118.
back to text
495. Appellate Body Report on
US — 1916 Act, para. 120.
back to text
496. Appellate Body Report on
US — 1916 Act, para. 121.
back to text
497. Appellate Body Report on
US — 1916 Act, paras. 122-126. In
addition to the foregoing reasoning of the Appellate Body, the Panel,
which reached the same conclusion on the scope of Article
VI:2,
discussed the object and purpose of the GATT 1994, of the Anti-Dumping
Agreement, or of the WTO Agreement, and the preparatory work for Article
VI:2. Panel Report on
US — 1916 Act (Japan), paras. 6.223-6.229 See
also Panel Report on
US — 1916 Act (EC), paras. 6.200-6.203.
back to text
498. Appellate Body Report on
US — 1916 Act, paras. 113-116.
back to text
499. Appellate Body Report on
US — Offset Act (Byrd Amendment),
paras. 238-239. back to text
500. (footnote original) Section 754(a) of the Tariff Act
provides:
“Duties assessed pursuant to a countervailing duty order, an
anti-dumping duty order, or a finding under the Antidumping Act of 1921
shall be distributed on an annual basis under this section to the
affected domestic producers for qualifying expenditures. Such
distribution shall be known as the “continued dumping and subsidy
offset.” back to text
501. Appellate Body Report on
US — Offset Act (Byrd Amendment),
para. 242. back to text
502. See above, para. 322. back to text
503. Appellate Body Report on
US — Offset Act (Byrd Amendment),
para. 262. back to text
504. Appellate Body Report on
United States — Offset Act (Byrd Amendment), para. 244 quoting the European Communities’, India’s,
Indonesia’s and Thailand’s appellee’s submission at para. 14.
back to text
505. Panel Report on
Brazil — Desiccated
Coconut, para. 253. The
Appellate Body upheld the Panel’s conclusion on the applicability of
Article VI of GATT 1994 to this dispute, however, on different grounds,
and thus, stated that “it is not necessary to determine whether
applying Article VI of the GATT 1994 independently of the
SCM Agreement
would be more onerous than applying them together.”
Appellate Body Report on Brazil — Desiccated Coconut, p. 21. back to text
506. Panel Report on
Brazil — Desiccated
Coconut, paras. 246-253.
back to text
507. Panel Report on
Brazil — Desiccated
Coconut, paras. 255-256.
back to text
508. (footnote original) Like the panel in
India — Quantitative Restrictions, our intention is not to make findings under Articles 1 and
18.1 of the Anti-Dumping Agreement in this context. As a result, the
requirements of Article 6.2 and 7 of the DSU are not relevant in that
situation. back to text
509. Panel Report on
US — 1916 Act (EC), para. 6.195.
back to text
510. (footnote original) We note, however, that, as discussed in
our Report in Guatemala — Cement I, the Anti-Dumping Agreement does
not incorporate by reference Articles XXII and
XXIII of the GATT 1994:
Appellate Body Report on Guatemala — Cement I, para. 64 and footnote 43. back to text
511. (footnote original) See, for example, Panel Report on
US
— Superfund; Panel Report on US — Section 337; Panel Report on Thailand
— Cigarettes; Panel Report on US — Malt Beverages; and Panel Report
on US — Tobacco. See also Panel Report on US — Wine and Grape
Products, examining this issue in the context of a claim brought under
the Tokyo Round Agreement on Interpretation and Application of Articles
VI, XVI and XXIII
of the General Agreement of Tariffs and Trade.
back to text
512. (footnote original) See, for example,
Panel Report on Japan
— Alcoholic Beverages II, as modified by the Appellate Body Report;
Panel Report on
Canada — Periodicals, as modified by the Appellate
Body Report; Panel Report on EC — Hormones, as modified by the
Appellate Body Report; Panel Report on
Korea — Alcoholic Beverages, as
modified by the Appellate Body Report; Panel Report on
Chile — Alcoholic Beverages, as modified by the Appellate Body Report; Panel
Report on US — FSC, as modified by the Appellate Body Report; and
Panel Report on
US — Section 110(5) Copyright Act.
back to text
513. Appellate Body Report on
US — 1916 Act, paras. 59-61.
back to text
514. Appellate Body Report on
US — 1916 Act, para. 107.
back to text
515. Panel Report on
US — 1916 Act (EC), para. 6.180. See also Panel Report on
US — 1916 Act (Japan), para. 6.252.
back to text
516. Appellate Body Report on
US — 1916 Act, para. 137.
back to text
517. Panel Report on
US — 1916 Act (Japan), paras. 6.226-6.229.
back to text
518. Appellate Body Report on
EC — Tube or Pipe Fittings, para. 76.
For further arguments to in support of this finding see paras. 78-82. back to text
519. Panel Report on
Brazil — Desiccated
Coconut, para. 281.
back to text
520.
Appellate Body Report on Brazil — Desiccated Coconut, p. 21.
back to text
521. Panel Report on
Brazil — Desiccated
Coconut, para. 281.
back to text
522.
Appellate Body Report on Brazil — Desiccated Coconut, p. 21.
back to text
523. Panel Report on
US — 1916 Act (EC), para. 6.209.
back to text
524. (footnote original) Panel Report on
India — Quantitative
Restrictions, paras. 5.18-5.19. back to text
525. (footnote original)
Appellate Body Report on Brazil — Desiccated Coconut, paras. 74 and 81-83. back to text
526. Panel Report on
US — 1916 Act (Japan), paras. 6.92-6.94.
back to text
527. Panel Report on
US — 1916 Act (EC) para. 6.211. See also Panel Report on
US — 1916 Act (Japan), para. 6.254. back to text
528. Panel Report on
Brazil — Desiccated
Coconut, para. 227.
back to text
529. Panel Report on
Brazil — Desiccated
Coconut, para. 227.
back to text
530.
Appellate Body Report on Brazil — Desiccated Coconut, p. 14.
back to text
531.
Appellate Body Report on Brazil — Desiccated Coconut, p. 14.
back to text
532.
Appellate Body Report on Brazil — Desiccated Coconut, p. 16.
back to text
533. (footnote original) Panel Report on
US — Customs User Fee.
back to text
534. (footnote original) Panel Report on
US — Customs User Fee,
para. 69. back to text
535. (footnote original) Panel Report on
US — Customs User Fee,
para. 80. back to text
536. (footnote original) Panel Report on
US — Customs User Fee,
para. 86. back to text
537.
Panel Report on Argentina — Textiles and Apparel, paras. 6.74-6.75.
back to text
538. (footnote original) Adopted on 29 June 1971, BISD 18S/89,
para. 5. back to text
539. (footnote original) Panel Report on
US — Customs User Fee,
paras. 84-86. back to text
540.
Panel Report on Argentina — Textiles and Apparel, paras. 6.77-6.78.
back to text
541. Agreement between the International Monetary Fund and the World
Trade Organization,
WT/L/195, Annex I. back to text
542. Declaration on the Contribution of the World Trade Organization
to Achieving Greater Coherence in Global Economic Policymaking.
back to text
543. Appellate Body Report on
Argentina — Textiles and Apparel,
para. 69. back to text
544. (footnote original) Panel Report on
US — Customs User Fee.
back to text
545. (footnote original) Panel Report on
US — Customs User Fee,
para. 69. back to text
546. (footnote original) Panel Report on
US — Customs User Fee,
para. 80. back to text
547. Panel Report on
US — Certain EC Products, paras. 6.69-6.70.
back to text
548. With respect to the Declaration on the Contribution of the World
Trade Organization to Achieving Greater Coherence in Global Economic
Policy-making, see Chapter on WTO Agreement, Section XIX
back to text
549. Appellate Body Report on
Argentina — Textiles and Apparel,
para. 70. back to text
550. Appellate Body Report on
Argentina — Textiles and Apparel,
para. 70. back to text
551. Appellate Body Report on
Argentina — Textiles and Apparel,
para. 70. back to text
552. Following this sentence, the Appellate Body cited the
Appellate Body Report on
EC
— Bananas III, para. 200, which is referenced in
para. 373 of this Chapter. back to text
553. Appellate Body Report on
EC — Poultry, para. 115.
back to text
554. Panel Report on
US — Hot-Rolled Steel, para. 7.268.
back to text
555. Appellate Body Report on
US — Underwear, p. 21.
back to text
556.
Panel Report on US — Underwear, para. 7.65.
back to text
557. Panel Report on
EC — Poultry, para. 269.
back to text
558. (footnote original)
Panel Report on US — Underwear, para.
7.65. In that case, we agreed with the panel’s finding that the
safeguard measure restraint imposed by the United States was “a
measure of general application” within the contemplation of Article
X:2 of the GATT 1994. See Appellate Body Report on
US — Underwear, p.
21. back to text
559. Appellate Body Report on
EC — Poultry, paras. 111 and 113.
back to text
560. Panel Report on
Japan — Film, para. 10.388.
back to text
561. Appellate Body Report on
US — Underwear, p. 21.
back to text
562.
Panel Report on US — Underwear, para. 7.69.
back to text
563. Appellate Body Report on
US — Underwear, p. 21.
back to text
564. (Original footnote omitted) Appellate Body Report on
US
— Shrimp, paras. 182-183. back to text
565. Panel Report on EC — Bananas III, para. 7.206. Also, Panel
Report on EC — Bananas III, para. 7.225. back to text
566. Appellate Body Report on EC —
Bananas, para. 200. See also
Panel Report on
US — Corrosion-Resistant Steel Sunset Review, para.
7.289. back to text
567. Appellate Body Report on
EC — Poultry, para. 115.
back to text
568. (footnote original) In fact, Article
X:3(b), in its second
sentence, uses the word “importer”. back to text
569. Panel Report on Argentina — Hides and
Leather, paras. 11.67-11.68.
back to text
570. (footnote original) In EC —
Poultry, the Appellate Body
further stated that Article X is relevant only to measures “of general
application” and not to the particular treatment of each individual
shipment. See Appellate Body Report on
EC — Poultry, paras. 111 and
113. back to text
571. (footnote original) We make this statement
arguendo and do
not imply agreement with Argentina’s implicit assumption of no
violation in such instances. back to text
572. (footnote original) See Appellate Body Reports on
US
— Gasoline, p. 23; Japan — Alcoholic Beverages
II, p. 12; Argentina
— Footwear (EC), para. 81. back to text
573. (footnote original) Even some of these provisions arguably
are procedural in nature. back to text
574. Panel Report on Argentina — Hides and
Leather, paras. 11.71-11.72.
back to text
575.
Panel Report on
US — Corrosion-Resistant Steel Sunset Review,
paras. 7.293-7.295. back to text
576.
Panel Report on
US — Corrosion-Resistant Steel Sunset Review,
paras. 7.305-7.306. back to text
577. Panel Report on
US — Hot-Rolled Steel, para. 7.268. See also,
Panel Report on
US — Corrosion-Resistant Steel Sunset Review, para.
7.307. back to text
578. Panel Report on Argentina — Hides and
Leather, para. 11.76.
back to text
579. Panel Report on Argentina — Hides and
Leather, paras. 11.81-11.84.
back to text
580. Panel Report on Argentina — Hides and
Leather, para. 11.99-11.101.
back to text
581. Panel Report on Argentina — Hides and
Leather, para. 11.94.
back to text
582. (footnote original) DSU Article
3.2. back to text
583. (footnote original) It is for this reason that both
Article
X:3(b) of GATT 1994 and Article
13 of the AD Agreement require Members
to maintain appropriate judicial, arbitral or administrative tribunals
or procedures. back to text
584. Panel Report on US — Stainless
Steel, paras. 6.50-6.51.
back to text
585. Panel Report on Argentina — Hides and
Leather, para. 11.60.
The Panel went on to state:
“See also the Appellate Body Report on
European Communities
— Poultry, supra, at para. 115, wherein the Appellate Body emphasized that
to the extent Brazil’s appeal related to the substantive content of
the EC rules rather than to their publication or administration, it fell
outside of Article X.”
Panel Report on Argentina — Hides and
Leather, fn. 366.
back to text
586. Panel Report on
Indonesia — Autos, para. 14.152.
back to text
587. Appellate Body Report on
EC
— Bananas III, paras. 203-204.
back to text
588. Panel Report on
US — DRAMS, para. 6.92. back to text
589. Panel Report on US — Stainless
Steel, para. 6.55.
back to text
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