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Complaint by the European Communities. (See also DS162)
On 9 June 1988, the European Communities requested consultations with the United States in respect of the alleged failure of the United States to repeal its Anti-Dumping Act of 1916. The European Communities contended that the US Anti-Dumping Act of 1916 is still in force and is applicable to the import and internal sale of any foreign product irrespective of its origin, including products originating in countries which are WTO Members. The European Communities also alleged that the 1916 Act exists in the US statute books in parallel with the Tariff Act of 1930, as amended, which includes the US implementing legislation of multilateral Anti-Dumping provisions. The European Communities alleged violations of Articles III:4, VI:1 and VI:2 of the GATT 1994, Article XVI:4 of the WTO Agreement, and Articles 1, 2, 3, 4 and 5 of the Anti-Dumping Agreement.
On 1 November 1998, the European Communities requested the establishment of a panel. At its meeting on 25 November 1998, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
Further to a second request to establish a panel by the European Communities, the DSB established a panel at its meeting on 1 February 1999. India, Japan and Mexico reserved their third-party rights. On 1 April 1999, the panel was composed.
On 31 March 2000, the panel report was circulated to Members. The panel considered that:
- Article VI:1 of the GATT 1994 applies to any situation where a Member addresses the type of transnational price discrimination defined in that Article.
- on the basis of the terms of the 1916 Act, its legislative history and its interpretation by US courts, the transnational price discrimination test found in the 1916 Act met the definition of Article VI:1 of the GATT 1994.
- by not providing exclusively for the injury test set out in Article VI, the 1916 Act violated Article VI:1 of the GATT 1994;
- by providing for the imposition of treble damages, fines or imprisonment, instead of anti‑dumping duties, the 1916 Act violated Article VI:2 of the GATT 1994;
- by not providing for a number of procedural requirements found in the Anti-Dumping Agreement, the 1916 Act violated Articles 1, 4 and 5.5 of the Anti-Dumping Agreement; and
- by violating Articles VI:1 and VI:2 of the GATT 1994, the 1916 Act violated Article XVI:4 of the WTO Agreement.
On 29 May 2000, the United States notified the DSB of its decision to appeal certain issues of law and legal interpretations developed by the panel. The European Communities also notified its intention to appeal certain issues of law and legal interpretations developed by the panel. The Appellate Body examined this appeal with that of DS162.
On 28 August 2000, the Appellate Body report was circulated to Members. The Appellate Body upheld all of the findings and conclusions of the panel that were appealed.
At its meeting on 26 September 2000, the DSB adopted the Appellate Body report and the panel report, as upheld by the Appellate Body report.
Reasonable period of time
At the DSB meeting on 23 October 2000, the United States informed the DSB that it intended to implement the DSB recommendations and rulings. The United States also stated that it would require a reasonable period of time to do so and that it would consult with the European Communities on this matter. On 17 November 2000, the European Communities requested that the reasonable period of time be determined by arbitration pursuant to Article 21.3(c) of the DSU. The arbitrator circulated his award on 28 February 2001. He decided that the reasonable period of time in this case was 10 months and would thus expire on 26 July 2001. On 12 July 2001, the United States proposed that the reasonable period of time for implementation be extended until 31 December 2001 or the end of the current session of the US Congress, whichever was earlier and informed the DSB it would consult with the European Communities on this matter. The European Communities did not object to this proposal, which was agreed by the DSB at its meeting on 24 July 2001. At the DSB meeting on 18 December 2001, the United States informed the DSB that on 23 July 2001 it submitted proposed legislation to the US Congress repealing the 1916 Act and terminating all pending actions under the Act. It added that, since the US Congress had not yet been adjourned, the US Administration continued to seek passage of the proposed legislation. The European Communities indicated that if the United States failed to comply with the DSB recommendations, it would have no choice but to request the authorization to suspend concessions or other obligations under Article 22.2 of the DSU.
Proceedings under Article 22 of the DSU (remedies)
On 7 January 2002, on the grounds that that the United States had failed to bring its measures into conformity within the reasonable period of time, the European Communities requested authorization to suspend concessions pursuant to Article 22.2 of the DSU. The European Communities proposed that the suspension of concessions takes the form of an equivalent legislation to the Anti-Dumping Act of 1916 against imports from the United States. On 17 January 2002, the United States objected to the level of suspension of obligations proposed by the European Communities and requested the DSB to refer the matter to arbitration, in accordance with Article 22.6 of the DSU. At the DSB meeting on 18 January 2002, it was agreed that the matter raised by the United States be referred to arbitration. During the meeting, the parties indicated that they were still engaged in consultations and would be requesting the arbitrators, once appointed, to suspend their work with a view to exploring the possibility of finding a mutually satisfactory solution. On 27 February 2002, the parties requested the Arbitrator to suspend the arbitration proceeding noting that a proposal to repeal the 1916 Act and to terminate cases pending under the Act was being examined by the US Congress. The parties noted, however, that the arbitration proceeding could be reactivated at the request of either party after 30 June 2002 if no substantial progress would have been made in resolving the dispute by then.
On 19 September 2003, the European Communities requested the Arbitrator to reactivate the arbitration proceeding. In accordance with the request from the European Communities, the Arbitrator resumed the arbitration proceeding on the same day.
On 24 February 2004, the decision by the Arbitrator was circulated to Members. In light of the fact that the nullification or impairment results from the 1916 Act “as such”, and not from particular instances of application of that law, the Arbitrators decided to set a number of parameters ((i) damages paid by EC companies as a result of judgements under the 1916 Act and (ii) amount of any settlement reached between an EC company and a US complainant pursuant to a 1916 Act complaint) with which the European Communities will have to comply when calculating by itself the amount of countermeasures it plans to impose, rather than setting a fixed value of trade which the European Communities should not exceed when suspending its WTO obligations against the United States.
Implementation of adopted reports
At the DSB meeting on 26 November 2004, the United States reported that the US Congress had completed steps to repeal the 1916 Act, thereby implementing the DSB's recommendations and rulings. At the DSB meeting of 17 December 2004, the United States informed the DSB that on 3 December 2004, the US President had signed into law the Miscellaneous Trade and Technical Corrections Act of 2004. That Act included a provision that repealed the 1916 Act. United States reiterated its statement at the DSB November meeting that that action had brought the United States into compliance with the DSB's recommendations and rulings in this dispute.
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