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DISPUTE SETTLEMENT: DISPUTE DS152

United States — Sections 301–310 of the Trade Act 1974

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

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See also: One-page summary of key findings of this dispute

Appellate Body and Panel Reports Adopted

Complaint by the European Communities.

On 25 November 1998, the EC requested consultations with the US in respect of Title III, chapter 1 (sections 301-310) of the US Trade Act of 1974 (the Trade Act), as amended, and in particular sections 306 and 305 of this Act. The EC alleged that:

• by imposing strict time limits within which unilateral determinations must be made and trade sanctions taken, sections 306 and 305 of the Trade Act do not allow the US to comply with the rules of the DSU in situations where a prior multilateral ruling under the DSU on conformity of measures taken pursuant to implementation of DSB recommendations has not been adopted by the DSB.
   
• the DSU procedure resulting in a multilateral finding, even if initiated immediately after the end of the reasonable period of time for implementation, cannot be finalised, nor can subsequent DSU procedure for seeking compensation or suspension of concessions be complied with, within the time limits of sections 306 and 305.
   
• Title III, chapter 1(sections 301-310) of the Trade Act, as amended, and in particular sections 306 and 305 of the Act, are inconsistent with Articles 3, 21, 22 and 23 of the DSU; Article XVI:4 of the WTO Agreement; and Articles I, II, III, VIII and XI of GATT 1994.
   
• the Trade Act nullifies and impairs benefits accruing, directly or indirectly, to it under GATT 1994, and also impedes the objectives of GATT 1994 and of the WTO.

On 26 January 1999, the EC requested the establishment of a panel. At its meeting on 17 February 1999, the DSB deferred the establishment of a panel. Further to a second request to establish a panel by the EC, the DSB established a panel at its meeting on 2 March 1999. Brazil; Canada; Colombia; Costa Rica; Cuba; Dominica; Dominican Republic; Ecuador; Hong Kong, China; India; Israel; Jamaica; Japan; Korea; St. Lucia and Thailand reserved their third-party rights. On 24 March 1999, the EC requested the Director-General to determine the composition of the Panel. On 31 March 1999, the Panel was composed. The report of the panel was circulated to Members on 22 December 1999. The Panel found that Sections 304(a)(2)(A), 305(a) and 306(b) of the US Trade Act of 1974 were not inconsistent with Article 23.2(a) or (c) of the DSU or with any of the GATT 1994 provisions cited. The panel noted that its findings were based in full or in part on US undertakings articulated in the Statement of Administrative Action approved by the US Congress at the time it implemented the Uruguay Round agreements and confirmed in the statements by the US to the panel. The panel stated therefore that should those undertakings be repudiated or in any other way removed, its findings of conformity would no longer be warranted. The DSB adopted the panel report at its meeting on 27 January 2000.

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