Scope of Appellate Review

S.3.1 General   back to top

S.3.1.1 US — Gasoline, p. 12, DSR 1996:I, p. 3 at 11
(WT/DS2/AB/R)
 

… to deal with those two issues [i.e. the clean air issue and the application of the TBT Agreement], under the circumstances of this appeal, would have required the Appellate Body casually to disregard its own Working Procedures and to do so in the absence of a compelling reason grounded on, for instance, fundamental fairness or force majeure. Venezuela and Brazil could have appealed the Panel’s finding and non-finding on the two matters by taking advantage of Rules 23(1) or 23(4) of the Working Procedures and thereby placing the Appellate Body in a position to dispose of those issues directly in one and the same appellate proceeding.
 

… the route they chose for addressing the two issues in question is not contemplated by the Working Procedures, and therefore, these issues are not properly the subject of this appeal.
 

S.3.1.2 US — Wool Shirts and Blouses, p. 17, DSR 1997:I, p. 323 at 338
(WT/DS33/AB/R, WT/DS33/AB/R/Corr.1)
 

In our view, this statement by the Panel is purely a descriptive and gratuitous comment providing background concerning the Panel’s understanding of how the TMB functions. We do not consider this comment by the Panel to be “a legal finding or conclusion” which the Appellate Body “may uphold, modify or reverse”.
 

S.3.1.3 EC — Poultry, para. 107
(WT/DS69/AB/R)
 

… It is true that in Footnote 140 of the Panel Report, the Panel states that paragraph 7.75 of the European Communities — Bananas panel reports and “particularly the use of the phrase ‘all suppliers other than Members with a substantial interest in supplying the product’ … indicates that the Banana III panel did not take the view that allocation of quota shares to non-Members under Article XIII:2(d) was not permitted”. We do not consider this comment made in a Footnote by the Panel to be either a “legal interpretation developed by the panel” within the meaning of Article 17.6 of the DSU or a “legal finding” or “conclusion” that the Appellate Body may “uphold, modify or reverse” under Article 17.13 of the DSU. It is undisputed in this case that there is no allocation of a country-specific share in the tariff-rate quota to a non-Member. There is, therefore, no finding nor any “legal interpretation developed by the panel” that may be the subject of an appeal of which the Appellate Body may take cognizance.
 

S.3.1.4 Canada — Aircraft, para. 211
(WT/DS70/AB/R)
 

In our view, this new argument raised by Brazil is beyond the scope of appellate review. Article 17.6 of the DSU provides that “[a]n appeal shall be limited to issues of law covered in the Panel Report and legal interpretations developed by the Panel.” In principle, new arguments are not per se excluded from the scope of appellate review, simply because they are new. However, for us to rule on Brazil’s new argument, we would have to solicit, receive and review new facts that were not before the Panel, and were not considered by it. In our view, Article 17.6 of the DSU manifestly precludes us from engaging in any such enterprise. …
 

S.3.1.5 US — FSC, para. 103
(WT/DS108/AB/R)
 

… The argument which the United States asks us to address under the fifth sentence of Footnote 59 involves two separate legal issues: first, that the FSC measure is a measure “to avoid double taxation of foreign-source income” within the meaning of Footnote 59; and second, that, in consequence, the FSC measure is excluded from the prohibition in Article 3.1(a) of the SCM Agreement against export subsidies. In our view, examination of the substantive issues raised by this particular argument would be outside the scope of our mandate under Article 17.6 of the DSU, as this argument does not involve either an “issue of law covered in the panel report” or “legal interpretations developed by the panel”. The Panel was simply not asked to address the issues raised by the United States’ new argument. Further, the new argument now made before us would require us to address legal issues quite different from those which confronted the Panel and which may well require proof of new facts. …
 

S.3.1.6 US — Upland Cotton, para. 745
(WT/DS267/AB/R)
 

At the outset, we observe that Article 17.6 of the DSU provides that appeals “shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel”. Furthermore, Article 17.12 of the DSU states that “[t]he Appellate Body shall address each of the issues raised in accordance with paragraph 6 during the appellate proceeding”. The United States does not argue that Brazil has failed to appeal an issue of law or a legal interpretation. Thus, the United States is not asserting that Brazil could not have brought this claim on appeal or that we are legally precluded from addressing it. The United States’ assertion is that it is not necessary for us to resolve Brazil’s claim because Brazil is not requesting us to make findings that would result in DSB rulings and recommendations.
 

S.3.1.7 EC — Export Subsidies on Sugar, paras. 240–242
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)
 

… the European Communities did not argue before the Panel that sales of A and B beet are “largely insufficient to cover all the fixed costs of producing C beet”, in the manner in which it is arguing this point on appeal.
 

The Appellate Body previously held, in Canada — Aircraft, that new arguments are not excluded from the scope of appellate review “simply because they are new”. However, in that case, the Appellate Body also said:
 

… for us to rule on [the] new argument [at issue], we would have to solicit, receive and review new facts that were not before the Panel, and were not considered by it. In our view, Article 17.6 of the DSU manifestly precludes us from engaging in any such enterprise.
 

In this respect, we note that the European Communities supports its argument on appeal with a table containing calculations … This table was not placed before the Panel, but uses data drawn from Exhibits presented to the Panel by the Complaining Parties. We also note that the Complaining Parties, in their respective appellee’s submissions and at the oral hearing, contested the accuracy of some of the calculations, as well as certain concepts underlying the European Communities’ calculations.
 

S.3.1.8 Chile — Price Band System (Article 21.5 — Argentina), paras. 12, 13, 15, 253
(WT/DS207/AB/RW)
 

… [By letter] dated 26 February 2007, [Argentina asked] the Division to reject 13 of 15 exhibits that were attached to Chile’s appellant’s submission on the grounds that these exhibits included new evidence that was not before the Panel in these Article 21.5 proceedings and that Article 17.6 of the DSU precludes the Appellate Body from accepting such evidence.
 

By letter dated 13 March 2007, the Division indicated that, if a ruling on the admissibility of these exhibits proved necessary, it would make such a ruling in “due course” and expressed its “preliminary view” that the admissibility of such exhibits should be governed by the following three principles:
 

First, any evidence relating to the operation of the measure at issue after June 2006 is new evidence that does not properly form part of the record upon which the Division must review the Panel’s findings and conclusions in this case and is inadmissible. Secondly, Chile’s exhibits are admissible insofar as they only present data that were before the Panel. It is not necessary that the data were presented to the Panel in precisely the same form as they are now presented to the Appellate Body. Nevertheless, exhibits presenting evidence in a form that differs from the way in which the evidence was presented to the Panel are admissible only if: (i) the data presented can be clearly traced to data in the Panel record; and (ii) the way in which the data presented to the Panel has been converted into the form in which it is presented in this appeal can be readily understood. Thirdly, a Decree that: (i) is expressly referred to in the measure at issue in this appeal; (ii) is publicly available; and (iii) the content of which was discussed before the Panel is, in principle, admissible, unless Argentina can establish that it will suffer prejudice were the Appellate Body to admit the text of this Decree. (original emphasis)
 

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For the reasons that we set out below, we have not found it necessary to make any additional ruling on the admissibility of the specific exhibits challenged by Argentina in its request of 26 February 2007.
 

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We have reached our findings and conclusions on the basis of a careful examination of the Panel Report in the light of the claims of error and arguments raised on appeal. In undertaking this task, we did not find it necessary to have recourse to the information provided by Chile in Exhibits CHL-AB-3 through CHL-AB-15 attached to its appellant’s submission. As a result, we need not make any separate or additional ruling on the admissibility of these exhibits.
 

S.3.1.9 US — Zeroing (EC) (Article 21.5 — EC), para. 171
(WT/DS294/AB/RW, WT/DS294/AB/RW/Corr.1)
 

Before examining the European Communities’ appeal, we address first a preliminary matter that was brought by the United States at the oral hearing concerning Exhibit EC-62, an exchange of e-mails. Exhibit EC-62 was submitted to the Appellate Body as an attachment to a document reflecting the opening statement made by the European Communities at the oral hearing. The United States objected to the submission of Exhibit EC-62 and claimed that it is a new piece of evidence that cannot be considered in the appellate proceedings. The European Communities responded that Exhibit EC-62 had already been transmitted to the Appellate Body as part of the record of the Panel proceedings because, under Rule 25(2) of the Working Procedures for Appellate Review, “[t]he complete record of the panel proceeding includes … the correspondence relating to the panel dispute between the Panel or the WTO Secretariat and the parties to the dispute or the third parties”. Having examined the record of the panel proceedings, transmitted to the Appellate Body under Rule 25(1) of the Working Procedures, we have found that it does not contain the exchange of e-mails referred to in Exhibit EC-62. Accordingly, we conclude that Exhibit-62 is new evidence that cannot be considered at the appellate stage.
 

S.3.1.10 EC and certain member States — Large Civil Aircraft, para. 936
(WT/DS316/AB/R)
 

The Panel did not explain why it considered that “the number of sales over which full repayment is expected says little, if anything, about the appropriateness of the rate of return that will be achieved by the lender”. It may be that what the Panel meant is that the number of sales over which repayment is expected is not dispositive of the question of whether the rate of return demonstrates that the loan confers a benefit. Understood in this way, the statement would be correct given that the assessment of benefit would require a comparison with the rate of return that would have been demanded by a market lender. The Panel’s statement, however, can also be understood to suggest that the number of sales is irrelevant to the calculation of the rate of return of the member State governments. As we explained above, this would be incorrect. Given the potential that the Panel’s statement could be misused in the future, we reverse this statement.
 

S.3.1.11 EC and certain member States — Large Civil Aircraft, paras. 1174–1178
(WT/DS316/AB/R)
 

… even though we are unable to complete the analysis on the relevant product market, the particular circumstances in this case are such that we are able to complete — at least to some extent — the analysis of the United States’ claims of displacement.
 

First, the European Union’s appeal of the Panel’s finding of displacement is limited… .
 

Second, the United States and the European Union agree that there is competition between similar models of LCA. …
 

Third, we have before us uncontested evidence of Airbus’s and Boeing’s volume of sales and market shares for each of the geographic markets at issue. …
 

In these circumstances, we consider it possible and appropriate to complete the analysis and examine the claims of displacement on the basis of undisputed evidence regarding three product markets: the single-aisle LCA product market; the twin-aisle LCA product market; and the Very Large Aircraft product market. By proceeding in this manner, we are examining the data from a perspective proposed by the responding party and not rejected by the complaining party. While we are mindful of the scope of our jurisdiction under Article 17.6 of the DSU, we note that one of the functions of the WTO dispute settlement system is the “prompt settlement of situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another Member”, as reflected in Article 3.3 of the DSU.
 

S.3.1.12 US — Clove Cigarettes, para. 11
(WT/DS406/AB/R)
 

On 25 January 2012, the Presiding Member of the Division received a letter from the Director-General of the World Health Organization (the “WHO”) expressing interest and offering technical assistance in this appeal in areas covered by the WHO’s mandate. The Division thanked the WHO Director-General for her letter, and indicated that it would reflect on the need for such assistance. The Division asked the participants and third participants to comment on the letter from the WHO. Of the participants, the United States submitted comments, and of the third participants, the European Union commented. In the light of the fact that the parties had placed a considerable amount of materials regarding WHO legal instruments and the WHO’s work in the area of tobacco control on the Panel record, and mindful of its mandate on appeal under Article 17.6 of the DSU, the Division did not deem it necessary to request assistance from the WHO.
 

S.3.1.13 China — GOES, paras. 111, 113
(WT/DS414/AB/R)
 

… China’s Notice of Appeal does not include a request that the Appellate Body review the Panel’s findings as they relate to Articles 3.1 and 15.1. Nonetheless, in its appellant’s submission, China requests the Appellate Body to reverse the Panel’s ultimate finding that MOFCOM’s price effects finding was inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement, and Articles 15.1 and 15.2 of the SCM Agreement, on the basis of the Panel’s alleged errors in its interpretation and application of Articles 3.2 and 15.2. China explains that, whereas Articles 3.1 and 15.1 set out the overarching principle that informs an investigating authority’s analysis under subsequent paragraphs of Articles 3 and 15, Articles 3.2 and 15.2 provide “all of the substantive content” of an investigating authority’s obligation in considering adverse price effects. China adds that, although it is not challenging the Panel’s interpretation and application of Articles 3.1 and 15.1, it nonetheless takes issue with how the Panel applied the overarching principle under Articles 3.1 and 15.1 in characterizing the substantive content of an authority’s obligation under Articles 3.2 and 15.2.
 

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… the Panel did not make separate findings under Articles 3.1 and 15.1, on the one hand, and Articles 3.2 and 15.2, on the other hand. Rather, given that the standard in Articles 3.1 and 15.1 informed the Panel’s analysis of MOFCOM’s price effects finding under Articles 3.2 and 15.2, the Panel’s finding of inconsistency under these provisions was based on an integrated analysis of both sets of provisions. Therefore, even though China has not challenged the Panel’s interpretation and application of Articles 3.1 and 15.1, we consider that our examination of the Panel’s analysis under Articles 3.2 and 15.2 cannot be conducted in isolation from the Panel’s analysis pursuant to the standard under Articles 3.1 and 15.1. It follows that we will examine the Panel’s analysis of MOFCOM’s price effects finding in the light of the interpretation of Articles 3.1 and 15.1 that has been developed in the Appellate Body’s relevant jurisprudence.
 

S.3.2 Review of “objective assessment” by the panel — Article 11 of the DSU. See also Standard of Review, Article 11 of the DSU (S.7.2–9)   back to top

S.3.2.1 EC — Hormones, para. 132
(WT/DS26/AB/R, WT/DS48/AB/R)
 

… Whether or not a panel has made an objective assessment of the facts before it, as required by Article 11 of the DSU, is also a legal question which, if properly raised on appeal, would fall within the scope of appellate review.
 

S.3.2.2 US — Countervailing Measures on Certain EC Products, para. 74
(WT/DS212/AB/R)
 

… A claim of error by a panel under Article 11 of the DSU is possible only in the context of an appeal. By definition, this claim will not be found in requests for establishment of a panel, and panels therefore will not have referred to it in panel reports. Accordingly, if appellants intend to argue that issue on appeal, they must refer to it in Notices of Appeal in a way that will enable appellees to discern it and know the case they have to meet.
 

S.3.2.3 EC — Poultry, para. 133
(WT/DS69/AB/R)
 

An allegation that a panel has failed to conduct the “objective assessment of the matter before it” required by Article 11 of the DSU is a very serious allegation. Such an allegation goes to the very core of the integrity of the WTO dispute settlement process itself. …
 

S.3.2.4 US — Upland Cotton, para. 398
(WT/DS267/AB/R)
 

In its opening statement delivered at the oral hearing, the United States confirmed that it has not made an Article 11 claim in this appeal. … Under these circumstances, there is no need for us to rule that the United States makes no Article 11 claim. We also refrain from ruling on whether the Panel complied with Article 11 of the DSU. …
 

S.3.2.5 US — Upland Cotton, para. 399
(WT/DS267/AB/R)
 

We are nevertheless mindful of the scope of appellate review with respect to legal and factual matters. Pursuant to Article 17.6 of the DSU, appeals are “limited to issues of law covered in the panel report and legal interpretations developed by the panel”. To the extent that the United States’ arguments concern the Panel’s appreciation and weighing of the evidence, we note from the outset that the Appellate Body will not interfere lightly with the Panel’s discretion “as the trier of facts”. At the same time, the Appellate Body has previously pointed out that the “consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is … a legal characterization issue”. Whether the Panel properly interpreted the requirements of Article 6.3(c) of the SCM Agreement and properly applied that interpretation to the facts in this case is a legal question. This question is different from whether the Panel made “an objective assessment of the matter before it, including an objective assessment of the facts of the case”, in accordance with Article 11 of the DSU. Therefore, the Panel’s application of the legal requirements of Article 6.3(c) of the SCM Agreement to the facts of this case falls within the scope of our review in this appeal, despite the fact that the United States does not claim that the Panel erred under Article 11 of the DSU.
 

S.3.2.6 US — Upland Cotton, para. 695
(WT/DS267/AB/R)
 

Brazil has made an additional claim that the Panel failed to make an objective assessment of the matter, as required by Article 11 of the DSU. Having reversed the Panel’s ultimate finding, we find that it is not necessary for us to rule on Brazil’s additional claim under Article 11 of the DSU. This is because, even if we were to agree with Brazil, it would lead to the same result that we have reached after examining the Panel’s application of Article 10.1 of the Agreement on Agriculture to the facts before it.
 

S.3.2.7 Mexico — Anti-Dumping Measures on Rice, paras. 273–274
(WT/DS295/AB/R)
 

… we are of the view that this aspect of Mexico’s appeal should have been more appropriately brought under Article 11 of the DSU. Mexico’s argument is premised on the Panel’s purported failure to read the challenged provisions of the FTA in the light of another FTA provision that Mexico brought to the attention of the Panel. Mexico alleges that the Panel “disregarded” this evidence and “made unsubstantiated findings” on the mandatory nature of the challenged provisions of the FTA “virtually without undertaking any relevant analysis”. Mexico’s claim of error, therefore, rests on the Panel’s failure to conduct its analysis in a proper and impartial manner: Mexico does not contest, on the merits, the Panel’s decision rejecting the supposed import of Article 2 for the interpretation of the other provisions of the FTA.
 

In this light, Mexico’s claim on appeal appears to be a traditional Article 11 claim challenging the Panel’s failure to accord sufficient weight to evidence submitted by one of the parties. …
 

S.3.2.8 Mexico — Anti-Dumping Measures on Rice, para. 330
(WT/DS295/AB/R)
 

… The English translation of Article 93V that was provided to the Panel by the United States was the official WTO translation of these notifications. Although Mexico argued in its submissions to the Panel that Article 93V was not mandatory — based in part on the opening language of Article 93 — Mexico never questioned the use of these official WTO translations as the basis for the Panel’s examination. We do not see how the Panel can be said to have failed to make an objective assessment when it relied on an official WTO English translation of Mexico’s law, to which Mexico itself raised no objection. Therefore, we find that, in its interpretation of Article 93V of the FTA, the Panel did not fail to fulfil its obligations under Article 11 of the DSU.
 

S.3.2.9 EC — Fasteners (China), para. 511
(WT/DS397/AB/R)
 

… a panel has the discretion “to address only those arguments it deems necessary to resolve a particular claim” and “the fact that a particular argument relating to that claim is not specifically addressed in the ‘Findings’ section of a panel report will not, in and of itself, lead to the conclusion that that panel has failed to make the ‘objective assessment of the matter before it’ required by Article 11 of the DSU”.
 

S.3.2.10 US — Large Civil Aircraft (2^nd complaint), para. 1145
(WT/DS353/AB/R)
 

… The European Union requests that, if we find that the Panel acted inconsistently with Article 11 of the DSU, we reverse the Panel’s finding … that “the [US]DOD RDT&E programmes (other than ManTech and DUS&T) do not cause the same effects as the other aeronautics R&D subsidies” … . We do not, however, see that the Panel made any such finding in that paragraph. To the contrary, we read the Panel as having recognized that the other 21 USDOD RDT&E programmes may well also have had adverse effects to the extent that they were funded through assistance instruments. Accordingly, there is no finding for us to reverse, and the European Union does not, in any event, seek to have us complete the analysis.
 

S.3.3 Issues of law vs. Issues of fact (Article 17.6 of the DSU)   back to top

S.3.3.1 Canada — Periodicals, p. 22, DSR 1997:I, p. 449 at 468
(WT/DS31/AB/R)
 

We are mindful of the limitation of our mandate in Articles 17.6 and 17.13 of the DSU. According to Article 17.6, an appeal shall be limited to issues of law covered in the Panel Report and legal interpretations developed by the Panel. The determination of whether imported and domestic products are “like products” is a process by which legal rules have to be applied to facts. In any analysis of Article III:2, first sentence, this process is particularly delicate, since “likeness” must be construed narrowly and on a case-by-case basis. …
 

S.3.3.2 EC — Bananas III, paras. 206, 237, 239
(WT/DS27/AB/R)
 

On the first issue, the Panel found that the procedural and administrative requirements of the activity function rules for importing third-country and non-traditional ACP bananas differ from, and go significantly beyond, those required for importing traditional ACP bananas. This is a factual finding. …
 

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It is, however, evident from the terms of its finding that the Panel concluded, as a matter of fact, that the de facto discrimination did continue to exist after the entry into force of the GATS. This factual finding is beyond review by the Appellate Body. Thus, we do not reverse or modify the Panel’s conclusion in paragraph 7.308 of the Panel Reports.
 

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In our view, the conclusions by the Panel on whether Del Monte is a Mexican company, the ownership and control of companies established in the European Communities that provide wholesale trade services in bananas, the market shares of suppliers of Complaining Parties’ origin as compared with suppliers of EC (or ACP) origin, and the nationality of the majority of operators that “include or directly represent” EC (or ACP) producers, are all factual conclusions. Therefore, we decline to rule on these arguments made by the European Communities.
 

S.3.3.3 EC — Hormones, para. 132
(WT/DS26/AB/R, WT/DS48/AB/R)
 

Under Article 17.6 of the DSU, appellate review is limited to appeals on questions of law covered in a panel report and legal interpretations developed by the Panel. Findings of fact, as distinguished from legal interpretations or legal conclusions, by a panel are, in principle, not subject to review by the Appellate Body. The determination of whether or not a certain event did occur in time and space is typically a question of fact; for example, the question of whether or not Codex has adopted an international standard, guideline or recommendation on MGA is a factual question. Determination of the credibility and weight properly to be ascribed to (that is, the appreciation of) a given piece of evidence is part and parcel of the fact finding process and is, in principle, left to the discretion of a panel as the trier of facts. The consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is, however, a legal characterization issue. It is a legal question. …
 

S.3.3.4 Australia — Salmon, para. 261
(WT/DS18/AB/R)
 

The Panel’s consideration and weighing of the evidence in support of Canada’s claims relates to its assessment of the facts and, therefore, falls outside the scope of appellate review under Article 17.6 of the DSU.
 

S.3.3.5 Korea — Alcoholic Beverages, paras. 161–162
(WT/DS75/AB/R, WT/DS84/AB/R)
 

The Panel’s examination and weighing of the evidence submitted fall, in principle, within the scope of the Panel’s discretion as the trier of facts and, accordingly, outside the scope of appellate review. This is true, for instance, with respect to the Panel’s treatment of the Dodwell Study, the Sofres Report and the Nielsen Study. We cannot second-guess the Panel in appreciating either the evidentiary value of such studies or the consequences, if any, of alleged defects in those studies. Similarly, it is not for us to review the relative weight ascribed to evidence on such matters as marketing studies, methods of production, taste, colour, places of consumption, consumption with “meals” or with “snacks”, and prices.
 

A panel’s discretion as trier of facts is not, of course, unlimited. That discretion is always subject to, and is circumscribed by, among other things, the Panel’s duty to render an objective assessment of the matter before it. …
 

S.3.3.6 India — Quantitative Restrictions, paras. 143–144
(WT/DS90/AB/R)
 

As to the second alleged mistake, namely, that the evidence introduced by the United States could not, as a matter of law, have constituted a prima facie case that India’s balance-of-payments restrictions were not justified under the Ad Note, …
 

We believe that this second mistake alleged by India relates to the weighing and assessing of the evidence adduced by the United States, and is, therefore, outside the scope of appellate review.
 

S.3.3.7 US — Wheat Gluten, paras. 150–151
(WT/DS166/AB/R)
 

… we recall that, in previous appeals, we have emphasized that the role of the Appellate Body differs from the role of panels. Under Article 17.6 of the DSU, appeals are “limited to issues of law covered in the panel report and legal interpretations developed by the Panel” (emphasis added). By contrast, we have previously stated that, under Article 11 of the DSU, panels are:
 

… charged with the mandate to determine the facts of the case and to arrive at factual findings. In carrying out this mandate, a panel has the duty to examine and consider all the evidence before it, not just the evidence submitted by one or the other party, and to evaluate the relevance and probative force of each piece thereof. (emphasis added)
 

We have also stated previously that, although the task of panels under Article 11 relates, in part, to its assessment of the facts, the question whether a panel has made an “objective assessment” of the facts is a legal one, that may be the subject of an appeal (emphasis added). However, in view of the distinction between the respective roles of the Appellate Body and panels, we have taken care to emphasize that a panel’s appreciation of the evidence falls, in principle, “within the scope of the Panel’s discretion as the trier of facts” (emphasis added). In assessing the panel’s appreciation of the evidence, we cannot base a finding of inconsistency under Article 11 simply on the conclusion that we might have reached a different factual finding from the one the panel reached. Rather, we must be satisfied that the panel has exceeded the bounds of its discretion, as the trier of facts, in its appreciation of the evidence. As is clear from previous appeals, we will not interfere lightly with the panel’s exercise of its discretion.
 

S.3.3.8 US — Section 211 Appropriations Act, paras. 105–106
(WT/DS176/AB/R)
 

Our rulings in these previous appeals are clear: the municipal law of WTO Members may serve not only as evidence of facts, but also as evidence of compliance or non-compliance with international obligations. Under the DSU, a panel may examine the municipal law of a WTO Member for the purpose of determining whether that Member has complied with its obligations under the WTO Agreement. Such an assessment is a legal characterization by a panel. And, therefore, a panel’s assessment of municipal law as to its consistency with WTO obligations is subject to appellate review under Article 17.6 of the DSU.
 

To address the legal issues raised in this appeal, we must, therefore, necessarily examine the Panel’s interpretation of the meaning of Section 211 under United States law … The meaning given by the Panel to Section 211 is, thus, clearly within the scope of our review as set out in Article 17.6 of the DSU.
 

S.3.3.9 EC — Sardines, para. 299
(WT/DS231/AB/R)
 

… As we have stated in several previous appeals, panels enjoy a discretion as the trier of facts; they enjoy “a margin of discretion in assessing the value of the evidence, and the weight to be ascribed to that evidence”. We have also said that we will not “interfere lightly” with the Panel’s appreciation of the evidence: we will not intervene solely because we might have reached a different factual finding from the one the panel reached; we will intervene only if we are “satisfied that the panel has exceeded the bounds of its discretion, as the trier of facts, in its appreciation of the evidence”.
 

S.3.3.10 Chile — Price Band System, para. 224
(WT/DS207/AB/R, WT/DS207/AB/R/Corr.1)
 

… the Panel’s characterization of its finding “as a factual matter” does not mean that the issue whether Chile’s price band system is a border measure similar to a variable import levy or a minimum import price is shielded from appellate review. This is a question of law, and not of fact, and thus is clearly within our jurisdiction under Article 17.6 of the DSU. As we said in our Report in EC — Hormones [in paragraph 132], the assessment of the consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is an issue of legal characterization. The mere assertion by a panel that its conclusion is a “factual matter” does not make it so. Here, the Panel’s interpretation of the terms “variable import levies”, “minimum import prices”, and “similar border measures other than ordinary customs duties”, as these terms are used in Footnote 1, constitutes, not a factual determination, but rather a legal interpretation of the words of Article 4.2. Hence, these interpretations are within the purview of appellate review under Article 17.6 of the DSU. Moreover, the Panel’s appraisal of Chile’s price band system in the light of its legal interpretation is an application of the law to the facts of the case. All the same, in reviewing the Panel’s assessment of Chile’s price band system, we are mindful of the need to give due deference to the discretion of the Panel, as the “trier of fact”, to weigh the evidence before it.
 

S.3.3.11 US — Offset Act (Byrd Amendment), para. 222
(WT/DS217/AB/R, WT/DS234/AB/R)
 

… Article 17.6 is clear in limiting our jurisdiction to issues of law covered in panel reports and legal interpretations developed by panels. We have no authority to consider new facts on appeal. The fact that the documents are “available on the public record” does not excuse us from the limitations imposed by Article 17.6. We note that the other participants have not had an opportunity to comment on those documents and, in order to do so, may feel required to adduce yet more evidence. We would also be precluded from considering such evidence. …
 

S.3.3.12 US — Upland Cotton, para. 399
(WT/DS267/AB/R)
 

We are nevertheless mindful of the scope of appellate review with respect to legal and factual matters. Pursuant to Article 17.6 of the DSU, appeals are “limited to issues of law covered in the panel report and legal interpretations developed by the panel”. To the extent that the United States’ arguments concern the Panel’s appreciation and weighing of the evidence, we note from the outset that the Appellate Body will not interfere lightly with the Panel’s discretion “as the trier of facts”. At the same time, the Appellate Body has previously pointed out that the “consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is … a legal characterization issue”. Whether the Panel properly interpreted the requirements of Article 6.3(c) of the SCM Agreement and properly applied that interpretation to the facts in this case is a legal question. This question is different from whether the Panel made “an objective assessment of the matter before it, including an objective assessment of the facts of the case”, in accordance with Article 11 of the DSU. Therefore, the Panel’s application of the legal requirements of Article 6.3(c) of the SCM Agreement to the facts of this case falls within the scope of our review in this appeal, despite the fact that the United States does not claim that the Panel erred under Article 11 of the DSU.
 

S.3.3.13 US — Upland Cotton, para. 411
(WT/DS267/AB/R)
 

… In our view, whether a world market for upland cotton and a world price for upland cotton exist in the circumstances of this case are factual questions. …
 

S.3.3.14 US — Upland Cotton, para. 413
(WT/DS267/AB/R)
 

Whether or not Brazilian and United States upland cotton competed in the “world market for upland cotton” during the period the Panel examined is a factual question. …
 

S.3.3.15 US — Upland Cotton, para. 445
(WT/DS267/AB/R)
 

… We are … satisfied that the Panel adopted a plausible view of the facts in connection with expected prices and planting decisions, even though it attributed to these factors a different weight or meaning than did the United States. As the Appellate Body has said, it is not necessary for panels to “accord to factual evidence of the parties the same meaning and weight as do the parties”.
 

S.3.3.16 US — Upland Cotton, para. 446
(WT/DS267/AB/R)
 

… It would not amount to an error in the application of Article 6.3(c) to the facts of this case for the Panel not to address specifically in its Report every item of evidence provided and to refer explicitly to every argument made by the parties, if the Panel considered certain items or arguments less significant for its reasoning than others.
 

S.3.3.17 US — Upland Cotton, para. 663
(WT/DS267/AB/R)
 

The United States has styled its claim as related to the interpretation and application of item (j) of the Illustrative List of Export Subsidies annexed to the SCM Agreement. According to the United States, the Panel could not have reached a legal conclusion under item (j) without having necessarily determined what were the long-term operating costs and losses of the United States’ export credit guarantee programs, and more specifically, made a determination in respect of the treatment of rescheduled debt. We find no difficulty with the United States’ approach. Its claim relates to the Panel’s application of item (j) to the specific facts of the case. The United States is not asking us to review the Panel’s factual findings, nor is it arguing that the Panel’s assessment of the matter was not objective. Instead, the United States’ claim relates to the application of the legal standard set out in item (j) of the Illustrative List of Export Subsidies to the specific facts of this case. It is an issue of legal characterization. Thus, we do not agree with Brazil’s contention that the United States was under an obligation to bring its claim under Article 11 of the DSU. Consequently, our inquiry will be limited to the Panel’s application of the law to the facts in this case.
 

S.3.3.18 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 195
(WT/DS282/AB/R)
 

… The Panel’s conclusions and findings in paragraphs 7.53 to 7.64 of the Panel Report involve a “legal characterization of … facts” in the Panel’s determination of the consistency of the SPB, as such, with the requirements of Article 11.3 of the Anti-Dumping Agreement. They are, therefore, subject to our review.
 

S.3.3.19 US — Softwood Lumber VI (Article 21.5 — Canada), para. 148
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
 

… Canada’s argument [that the USITC acted inconsistently with Article 3.7(i) of the Anti-Dumping Agreement and Article 15.7(ii) of the SCM Agreement in determining the role of increase] is essentially directed at the USITC’s appreciation of the evidence on the record, that is, at the question whether the evidence supported the USITC’s finding that the rate of increase in dumped/subsidized imports was “significant” and that it indicated that imports would increase “substantially” in the near future. …
 

S.3.3.20 US — Softwood Lumber VI (Article 21.5 — Canada), para. 152
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
 

… Canada’s claim [that the USITC did not make a proper price comparison as required by Article 3.7(iii) of the Anti-Dumping Agreement and Article 15.7(iv) of the SCM Agreement] is essentially directed at the appreciation of the evidence by the USITC, that is, at the question whether the evidence on the record supported a finding that the prices of imports were having a depressing or suppressing effect on domestic prices and would likely increase demand for further imports.
 

S.3.3.21 US — Upland Cotton (Article 21.5 — Brazil), para. 385
(WT/DS267/AB/RW)
 

The United States has characterized its appeal under Article 6.3(c) of the SCM Agreement as one relating to the Panel’s application of the law to the facts, although it has also brought some claims under Article 11 of the DSU that challenge the objectivity of the Panel’s assessment of the facts. We recognize that the boundary between an issue that is purely factual and one that involves mixed issues of law and fact is often difficult to draw. However, we consider that many of the United States’ claims against the Panel’s evaluation of the elements supporting its finding of significant price suppression are primarily directed at the Panel’s appreciation and weighing of the evidence, and the inferences that the Panel drew from the evidence, both of which fall within its authority that is recognized under Article 11 of the DSU. Therefore, we shall review those claims and arguments raised by the United States concerning the application of the law to the facts under the legal standard of Article 6.3(c) of the SCM Agreement, and those claims and arguments concerning the Panel’s appreciation and weighing of the evidence under Article 11 of the DSU.
 

S.3.3.22 US — Upland Cotton (Article 21.5 — Brazil), para. 406
(WT/DS267/AB/RW)
 

We see nothing improper in the Panel’s reasoning that the fact that 83 per cent of cotton planted acreage corresponded directly to upland cotton base acres supports the conclusion that a strongly positive relationship exists between recipients of upland cotton counter-cyclical payments who hold upland cotton base acres and those who continue to plant upland cotton. In any event, we consider that, on this issue, the United States is essentially challenging the inferences drawn by the Panel from the evidence before it, and this is a matter that was within the Panel’s authority as the trier of facts. We note that the United States did not raise a claim under Article 11 of the DSU on this issue.
 

S.3.3.23 US — Upland Cotton (Article 21.5 — Brazil), para. 424
(WT/DS267/AB/RW)
 

In any event, the methodology used by the Panel in determining which production costs and revenues to compare to establish whether there is a gap between upland cotton producers’ costs of production and revenues is not an issue of legal interpretation or application under Article 6.3(c) of the SCM Agreement. The existence of a revenue gap is not a legally required benchmark under Article 6.3(c). In other words, there is no legal consequence under Article 6.3(c) that necessarily flows from the fact that there is a gap between producers’ revenues and costs. Rather, it is merely one of the elements that the Panel considered in determining whether there was “significant price suppression”. Thus, the profitability of upland cotton production is a factual matter, the evaluation of which fell to the Panel to determine.
 

S.3.3.24 US — Upland Cotton (Article 21.5 — Brazil), para. 432
(WT/DS267/AB/RW)
 

… We have already considered that the profitability of upland cotton production is a factual matter, the evaluation of which fell within the Panel’s authority. Accordingly, we see no reason to interfere with the Panel’s decision to rely on total costs, use USDA crop-specific data, include opportunity costs for items such as unpaid labour and owned land, and exclude off-farm income. We, therefore, find that the Panel’s evaluation of these factors was proper and within the bounds of its authority as the trier of facts. The United States has not made a claim under Article 11 of the DSU with respect to the Panel’s finding on the existence of a revenue gap, nor in relation to the components of the Panel’s determination.
 

S.3.3.25 EC and certain member States — Large Civil Aircraft, paras. 871–872. See also para. 1314
(WT/DS316/AB/R)
 

For each aspect of the Panel’s assessment that it challenges, the European Union has made parallel claims under Article 1.1(b) of the SCM Agreement, alleging an error of application, and under Article 11 of the DSU, alleging a failure by the Panel to make an objective assessment of the facts. At the oral hearing, the European Union suggested that an appellant was entitled to make parallel claims and that it would be for the Appellate Body to determine which was the proper characterization of those claims.
 

The Appellate Body has noted that “an appellant is free to determine how to characterize its claims on appeal”. Furthermore, we recognize that it is often difficult to distinguish clearly between issues that are purely legal or purely factual, or are mixed issues of law and fact. We also recognize that a failure to make a claim under Article 11 of the DSU on an issue that the Appellate Body determines to concern a factual assessment may have serious consequences for the appellant. An appellant may thus feel safer putting forward both a claim that the Panel erred in the application of a legal provision and a claim that the Panel failed to make an objective assessment of the facts under Article 11 of the DSU. In most cases, however, an issue will either be one of application of the law to the facts or an issue of the objective assessment of facts, and not both.
 

S.3.3.26 EC and certain member States — Large Civil Aircraft, para. 880
(WT/DS316/AB/R)
 

… we view the European Union’s challenge of the quantification of the level of project risk, the choice of relevant factors for quantification, and the reasoning of the Panel as relating to the objectivity of the Panel’s assessment of factual determinations within the meaning Article 11 of the DSU. The European Union’s allegations concern how the Panel reasoned over disputed facts. These allegations appear to us to be claims about the objectivity of the Panel’s assessment of the facts and thus are more in the nature of claims made under Article 11 of the DSU.
 

S.3.3.27 EC and certain member States — Large Civil Aircraft, para. 1316
(WT/DS316/AB/R)
 

The European Union’s claim that the Panel erred in the application of Articles 5(c) and 6.3(c) of the SCM Agreement is directed at three particular aspects of the Panel’s analysis. First, the European Union challenges the Panel’s assessment of “the financial viability and credibility of Airbus’ business case for the A380”. In our view, the financial viability of Airbus is essentially a factual matter and the Appellate Body has held that the assessment of the weight and credibility of evidence, such as the A380 business case, falls in principle within the discretion of panels as triers of fact. Second, the European Union asserts that “the Panel erred in its assessment of the ability of a non-subsidised Airbus to raise the financing necessary to launch the A380”. We do not see that this raises a legal issue; rather, the assessment of a company’s ability to raise financing is a factual matter. Finally, the European Union argues that “the Panel erred in its assessment of a non-subsidised Airbus’s technological experience to develop and produce the A380” if prior models had been launched without LA/MSF. We see the technological abilities of a company as being an issue that is primarily factual in nature. Thus, in our view, the European Union’s challenges against these three aspects of the Panel’s analysis are more properly characterized as claims under Article 11 of the DSU because they are directed at the alleged lack of objectivity of the Panel’s assessment of the facts… .
 

S.3.3.28 EC — Fasteners (China), paras. 294–296 and Footnote 471
(WT/DS397/AB/R)
 

China contends that the Panel’s finding on the “meaning” and “scope” of Article 9(5) of the Basic AD Regulation is an issue of fact that the Appellate Body is not competent to review pursuant to Article 17.6 of the DSU. …
 

… We disagree with China and the Panel.⁴⁷¹ On several occasions, the Appellate Body has clarified that municipal law may serve both as evidence of facts and evidence of a Member’s compliance or non-compliance with its international obligations. In particular, in US — Section 211 Appropriations Act, the Appellate Body stated that, when a panel examines the municipal law of a WTO Member for the purpose of determining whether that Member has complied with its WTO obligations, that examination is a legal characterization by a panel and is therefore subject to appellate review under Article 17.6 of the DSU.
 

In China — Auto Parts, the Appellate Body stated that it could review the Panel’s findings regarding the meaning of municipal law to the extent that the panel conducted its examination of municipal law for purposes of determining whether the Member had complied with its WTO obligations. The Appellate Body recognized that there will be instances in which a panel’s assessment of municipal law will go beyond the text of the instrument on its face, in which case further examination may be required, and may involve factual elements. The Appellate Body explained that it would not lightly interfere with a panel’s assessment of municipal law that went beyond the text of an instrument on its face and involved such factual elements. The Appellate Body clarified that the examination of a municipal legal instrument will focus on its text, but may also include the context of the provision and the “overall structure and logic” of the municipal law. …
 

S.3.3.29 EC — Fasteners (China), paras. 296–297
(WT/DS397/AB/R)
 

… In this dispute, the Panel did not review factual elements concerning the application of Article 9(5), such as pronouncements by EU domestic courts or opinions of legal experts or recognized scholars, but assessed Article 9(5) of the Basic AD Regulation, based on the text of the provision, its context, and its operation.
 

Therefore, we conclude that the Panel’s assessment of the meaning and scope of Article 9(5) of the Basic AD Regulation, which is based on the text of the provision, its context within the structure of the other relevant provisions of the Regulation, and its operation is not a “factual matter” and is not excluded from appellate review. Rather, the Panel examined Article 9(5) for the purpose of determining its consistency with a number of provisions of the Anti-Dumping Agreement and the GATT 1994, which, as a matter of legal characterization, is subject to appellate review according to Article 17.6 of the DSU.
 

S.3.3.30 US — Tyres (China), para. 265
(WT/DS399/AB/R)
 

As an initial matter, we note that several of China’s arguments appear to be directed at the objectivity of the Panel’s assessment of the facts, while other arguments are directed mainly at the way in which the Panel assessed the evidence that was before the USITC. Regarding several aspects of its challenge, China has made parallel claims under Section 16 of the Protocol, alleging an error of application, and under Article 11 of the DSU, alleging that the Panel failed to make an objective assessment of the facts. While the Appellate Body has noted that “an appellant is free to determine how to characterize its claims on appeal” and that “it is often difficult to distinguish clearly between issues that are purely legal or purely factual, or are mixed issues of law and fact”, the Appellate Body has also emphasized that “a failure to make a claim under Article 11 of the DSU on an issue that the Appellate Body determines to concern a factual assessment may have serious consequences for the appellant”.
 

S.3.3.31 US — Large Civil Aircraft (2^nd complaint), para. 696
(WT/DS353/AB/R)
 

… the Panel’s consideration of the amount of the subsidy was eminently a factual exercise that involved scrutinizing factual evidence submitted by the parties and focused on what was the most appropriate methodology to segregate the contracts that involved aeronautics R&D from the other transactions entered into between NASA and Boeing. This kind of factual assessment falls within a panel’s authority as the initial trier of facts and should be reviewed by the Appellate Body only under Article 11 of the DSU, a claim the United States has not raised with respect to the Panel’s estimate of the amount of the subsidy provided by NASA to Boeing.
 

S.3.3.32 US — Large Civil Aircraft (2^nd complaint), para. 700
(WT/DS353/AB/R)
 

… the United States’ claim on appeal is that the Panel erred in the application of the concept of benefit under Article 1.1(b) of the SCM Agreement because the Panel did not exclude from its estimate of the amount of the subsidy the $280 million in expenditures for research that NASA had determined was unrelated to the European Communities’ claims. We have found that the Panel’s consideration of the amount of the subsidy was a factual assessment that fell within the Panel’s authority as the initial trier of facts. The United States, however, did not raise a claim under Article 11 with respect to the Panel’s consideration of the amount of the subsidy provided under the NASA measures at issue. …
 

S.3.3.33 US — Large Civil Aircraft (2^nd complaint), paras. 955–958
(WT/DS353/AB/R)
 

We recall that the Appellate Body has recognized the difficulty of distinguishing “clearly between issues that are purely legal or purely factual, or are mixed issues of law and fact”, and has stated that “[i]n most cases … an issue will either be one of application of the law to the facts or an issue of the objective assessment of facts, and not both”. The Appellate Body has found that allegations implicating a panel’s assessment of the facts and evidence fall under Article 11 of the DSU. By contrast, “[t]he consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is … a legal characterization issue” and therefore a legal question. The Appellate Body has further stated that whether a panel properly interpreted a provision of the WTO agreements and properly applied that interpretation to the facts of the case is a legal question.
 

A party is free to frame its claim on appeal as it sees fit. However, important consequences flow from that choice, including the standard of review that will apply in adjudicating that claim. When the Appellate Body considers that a claim consists solely of a challenge to the objectivity of the panel’s assessment of the evidence, the Appellate Body has declined to consider such allegations in circumstances where the participant making them failed to raise an Article 11 claim in its Notice of Appeal or to substantiate such a claim in its submissions.
 

In this dispute, the Panel found that the “aeronautics R&D subsidies contributed in a genuine and substantial way to Boeing’s development of technologies for the 787”. The Panel used similar language to summarize the intermediate conclusions that it drew from its review of the four pillars that it considered. The language used by the Panel to describe how the aeronautics R&D subsidies contributed to the development of the 787 — that is, in a “genuine and substantial” way — is reminiscent of the legal standard articulated by the Appellate Body for determining the existence of the requisite causal link between subsidies and the adverse effects identified in Article 6.3(a)-(c) of the SCM Agreement. Nonetheless, the Panel’s repeated use of the phrase “genuine and substantial” does not, alone, establish that the Panel was in each instance reaching a legal, rather than a factual, conclusion.
 

The intermediate findings of a panel may be either legal or factual, or entail both factual and legal elements. In reviewing a panel’s findings, it is often difficult to disentangle legal conclusions or legal reasoning from factual findings. Where there is ambiguity, it will fall on the Appellate Body to determine whether a finding — and a related challenge to it on appeal — is properly characterized as legal or factual, in the circumstances of a specific case. …
 

S.3.3.34 US — Large Civil Aircraft (2^nd complaint), para. 979
(WT/DS353/AB/R)
 

… we can distinguish two steps taken by the Panel in its consideration of the table in the Peisen Study. First, the Panel’s appreciation of the contents of that table; and second, its application of the legal causation standard to the evidence. The first step is factual since it concerns the Panel’s treatment of factual evidence; the second step, however, is legal since it involves the characterization of the facts according to the legal standard. Although a misreading of the evidence under the first step might have had consequences for the Panel’s ultimate legal conclusion under the second step, it is an error in the appreciation of the facts, and not an error in the application of the legal standard. Consequently, in the absence of a claim under Article 11 of the DSU, we are unable to consider further this ground of the United States’ appeal.
 

S.3.3.35 US — Large Civil Aircraft (2^nd complaint), para. 1028
(WT/DS353/AB/R)
 

… we note that a panel’s counterfactual analysis will usually involve both factual and legal elements, which may not be easily distinguishable. …
 

S.3.3.36 US — Large Civil Aircraft (2^nd complaint), para. 1351
(WT/DS353/AB/R)
 

We realize that, after more than five years of panel proceedings and eleven months of appellate review, a number of issues remain unresolved in this dispute. Some may consider that this is not an entirely satisfactory outcome. Our mandate under Article 17 of the DSU does not permit us to engage in fact-finding. However, wherever we have found that there are sufficient factual findings by the Panel or undisputed facts to complete the analysis, we have done so with a view to fostering the prompt settlement of this dispute in accordance with Article 3.3 of the DSU.
 

S.3.3.37 China — GOES, para. 183
(WT/DS414/AB/R)
 

In its appeal, China seeks to challenge the Panel’s understanding of MOFCOM’s price effects analysis in its Final Determination and, in doing so, asserts claims that the Panel erred both in its application of Articles 3.2 and 15.2, and in its duty to make an objective assessment of the facts under Article 11 of the DSU. This is now familiar yet difficult terrain in the application of the Appellate Body’s standard of review. Although a panel’s findings of fact, as distinguished from legal interpretations or legal conclusions, are in principle not subject to review by the Appellate Body, Article 11 of the DSU may be relied upon to challenge a panel’s failure to make an objective assessment of the matter before it, including an objective assessment of the facts of the case. In previous cases, the Appellate Body has recognized the difficulty of clearly distinguishing between issues of legal application and issues of fact. In most cases, however, the issue raised by a particular claim “will either be one of application of the law to the facts or an issue of the objective assessment of facts, and not both”. The Appellate Body has found that allegations implicating a panel’s appreciation of facts and evidence fall under Article 11 of the DSU. By contrast, “[t]he consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is … a legal characterization issue” and is therefore a legal question.
 

S.3.3.38 China — GOES, para. 184
(WT/DS414/AB/R)
 

… we consider that, when the Panel examined the question of whether MOFCOM relied on the existence of price undercutting in 2006 to 2008 to find significant price depression and suppression, it was examining whether MOFCOM’s Final Determination complied with the legal standard for a price effects analysis conducted on the basis of “positive evidence” and involving an “objective examination”. In order to give proper consideration to the Panel’s analysis and to China’s appeal, we therefore examine this issue in the light of the Panel’s application of the legal standard under Articles 3.2 and 15.2, read together with Articles 3.1 and 15.1, to MOFCOM’s Final Determination. Accordingly, there is no basis separately to consider whether the Panel, in assessing the significance of “low price” in MOFCOM’s Final Determination, conducted an objective assessment of the facts under Article 11 of the DSU.
 

S.3.4 Need to address each issue raised (Article 17.12 of the DSU)   back to top

S.3.4.1 US — Upland Cotton, paras. 508, 510–511
(WT/DS267/AB/R)
 

Nor do we believe that it is necessary to make a finding on the interpretation of the phrase “world market share” in Article 6.3(d) of the SCM Agreement. We recall that Article 17.12 of the DSU requires that the “Appellate Body shall address each of the issues raised in accordance with paragraph 6 [of Article 17] during the appellate proceeding”. … For its part, Article 3.4 of the DSU provides that “[r]ecommendations or rulings made by the DSB shall be aimed at achieving a satisfactory settlement of the matter”. Similarly, Article 3.7 states that “[t]he aim of the dispute settlement mechanism is to secure a positive solution to a dispute”.
 

...
 

With this in mind, we observe that although an interpretation by the Appellate Body, in the abstract, of the meaning of the phrase “world market share” in Article 6.3(d) of the SCM Agreement might offer at best some degree of “guidance” on that issue, it would not affect the resolution of this particular dispute. Indeed, irrespective of whether we were to uphold or reverse the Panel’s finding on this issue, upon adoption of the recommendations and rulings by the DSB, the United States would be under no additional obligation regarding implementation. Thus, although we recognize that there may be cases in which it would be useful for us to review an issue, despite the fact that our ruling would not result in rulings and recommendations by the DSB, we find no compelling reason for doing so in this case.
 

Accordingly, we believe that an interpretation of the phrase “world market share” in Article 6.3(d) of the SCM Agreement is unnecessary for purposes of resolving this dispute. We emphasize that we neither uphold nor reverse the Panel’s findings on the interpretation of the phrase “world market share” in Article 6.3(d) of the SCM Agreement.
 

S.3.4.2 US — Upland Cotton, para. 695
(WT/DS267/AB/R)
 

Brazil has made an additional claim that the Panel failed to make an objective assessment of the matter, as required by Article 11 of the DSU. Having reversed the Panel’s ultimate finding, we find that it is not necessary for us to rule on Brazil’s additional claim under Article 11 of the DSU. This is because, even if we were to agree with Brazil, it would lead to the same result that we have reached after examining the Panel’s application of Article 10.1 of the Agreement on Agriculture to the facts before it.
 

S.3.4.3 US — Upland Cotton, para. 745
(WT/DS267/AB/R)
 

At the outset, we observe that Article 17.6 of the DSU provides that appeals “shall be limited to issues of law covered in the panel report and legal interpretations developed by the Panel”. Furthermore, Article 17.12 of the DSU states that “[t]he Appellate Body shall address each of the issues raised in accordance with paragraph 6 during the appellate proceeding”. The United States does not argue that Brazil has failed to appeal an issue of law or a legal interpretation. Thus, the United States is not asserting that Brazil could not have brought this claim on appeal or that we are legally precluded from addressing it. The United States’ assertion is that it is not necessary for us to resolve Brazil’s claim because Brazil is not requesting us to make findings that would result in DSB rulings and recommendations.
 

S.3.4.4 US — Upland Cotton, para. 746
(WT/DS267/AB/R)
 

We agree. Article 3.3 of the DSU explains that the aim of the WTO’s dispute settlement system is the “prompt settlement of situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another Member”. For its part, Article 3.4 of the DSU provides that “[r]ecommendations or rulings made by the DSB shall be aimed at achieving a satisfactory settlement of the matter”. Similarly, Article 3.7 states that “[t]he aim of the dispute settlement mechanism is to secure a positive solution to a dispute”. The Appellate Body, moreover, has cautioned that “[g]iven the explicit aim of dispute settlement that permeates the DSU, … Article 3.2 of the DSU is [not] meant to encourage either panels or the Appellate Body to ‘make law’ by clarifying existing provisions of the WTO Agreement outside the context of resolving a particular dispute”.
 

S.3.4.5 US — Upland Cotton, para. 747
(WT/DS267/AB/R)
 

In this case, Brazil’s claim on appeal is limited to the Panel’s application of the burden of proof. Brazil has expressly stated that it is not requesting us to complete the analysis. In view of Brazil’s request, our ruling would not result in recommendations or rulings by the DSB in respect of the ETI Act of 2000. In these circumstances, we fail to see how our examination of Brazil’s claim would contribute to the “prompt” or “satisfactory settlement” of this matter or would contribute to “secure a positive solution” to this dispute. Even if we were to disagree with the manner in which the Panel applied the burden of proof, we would not make any findings in respect of the WTO-consistency of the ETI Act of 2000. We recognize that there may be cases in which it would be useful for us to make a finding on an issue, despite the fact that our decision would not result in rulings and recommendations by the DSB. In this case, however, we find no compelling reason for doing so on this particular issue.
 

S.3.4.6 US — Upland Cotton, para. 748
(WT/DS267/AB/R)
 

For these reasons, we decline Brazil’s request that we reverse the Panel’s conclusion that Brazil did not make a prima facie case that the ETI Act of 2000 is inconsistent with the United States’ WTO obligations. In declining to rule on Brazil’s request, we neither endorse nor reject the manner in which the Panel applied the burden of proof in the context of examining Brazil’s claim against the ETI Act of 2000.
 

S.3.4.7 US — Upland Cotton, paras. 761–762
(WT/DS267/AB/R)
 

Nor do we believe that it is necessary to make a finding on the interpretation of the phrase “any form of subsidy which operates to increase the export of any primary product” in the second sentence of Article XVI:3 of the GATT 1994 in order to resolve this dispute. Given our ruling under Article 6.3(c) of the SCM Agreement, we observe that, although any ruling by the Appellate Body on the scope of the subsidies covered by Article XVI:3 of the GATT 1994 in the abstract might at best offer some degree of “guidance”, it would not affect the resolution of this dispute. Indeed, irrespective of whether we were to uphold or reverse the Panel’s finding on this issue, upon adoption of the recommendations and rulings by the DSB, the United States would be under no additional obligation regarding implementation. Thus, although we recognize that there may be cases in which it would be useful for us to make a finding on an issue, despite the fact that our finding would not result in recommendations and rulings by the DSB, we find no compelling reason for doing so in this case in respect of this particular issue.
 

We therefore believe that an interpretation of the phrase “any form of subsidy which operates to increase the export” in Article XVI:3 of the GATT 1994 is unnecessary for purposes of resolving this dispute. We emphasize that we neither uphold nor reverse the Panel’s interpretation of this phrase in the second sentence of Article XVI:3.
 

 

471. At the outset of its analysis of the scope of Article 9(5) of the Basic AD Regulation, the Panel stated that it fell upon it “to clarify the scope/operation of Article 9(5) of the Basic AD Regulation as a factual matter before engaging in a substantive analysis of China’s claims”. (Panel Report, para. 7.68)   back to text