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ON THIS PAGE:
> General
> Japan — Alcoholic Beverages II, para. 11
> Japan — Alcoholic Beverages II, para. 27
> Australia — Salmon, para. 38
> Chile — Alcoholic
Beverages, para. 39
> Canada — Pharmaceutical Patents, para. 48
> Canada — Pharmaceutical Patents, para. 52
> Canada — Autos, paras. 54–55
> US — 1916 Act, para. 40
> Canada — Patent Term, paras. 59–60
> Chile — Price Band System, para. 34
> Actions
taken since DSB adoption of Report(s)
> US — Section 110(5) Copyright Act,
para. 46
> Chile — Price Band System, paras. 43, 45
> Complexity
of implementing measures
> US — 1916 Act, para. 36
> Canada — Pharmaceutical Patents, para. 50
> US — Hot-Rolled Steel, para. 30
> US — Offset Act (Byrd Amendment), para. 60
> Complexity
of implementation process
> EC — Bananas III, para. 19
> EC — Hormones, para. 39
> EC — Hormones, paras. 41–42
> US — 1916 Act, para. 38
> US — 1916 Act, para. 39
> Chile — Price Band System, para. 38
> Chile — Price Band System, para. 39
> Chile — Price Band System, para. 42
> Chile — Price Band System, para. 52
> US — Offset Act (Byrd Amendment), para. 64
> EC — Tariff Preferences, para. 53
> EC — Tariff Preferences, para. 54
> Relevance
of contentiousness
> Chile — Alcoholic Beverages, para. 43
> Canada — Pharmaceutical Patents, para. 58
> Canada — Pharmaceutical Patents, para. 60
> US — Section 110(5) Copyright Act,
paras. 41–42
> Canada — Patent Term, para. 49
> Canada — Patent Term, para. 53
> Canada — Patent Term, para. 58
> US — Hot-Rolled Steel, para. 38
> Chile — Price Band System, paras. 47–48
> US — Offset Act (Byrd Amendment), para. 61
> EC — Tariff Preferences, para. 56
> Means of
implementation
> Australia — Salmon, paras. 31, 33
> Australia — Salmon, para. 38
> Canada — Pharmaceutical Patents, para. 49
> Canada — Pharmaceutical Patents, para. 51
> US — Hot-Rolled Steel, para. 32
> Chile — Price Band System, footnote 86 to
para. 33
> Chile — Price Band System, paras. 36–37
> Chile — Price Band System, para. 38
> US — Offset Act (Byrd Amendment), para. 57
> US — Offset Act (Byrd Amendment), para. 59
> EC — Tariff Preferences, para. 42
> EC — Tariff Preferences, para. 51
> US — Oil Country Tubular Goods Sunset
Reviews, para. 26
> US — Oil Country Tubular Goods Sunset
Reviews, para. 50
> Structural
adjustment
> Indonesia — Autos, para. 23
> Canada — Pharmaceutical Patents, para. 52
> Argentina — Hides and Leather, para. 41
> Economic
and financial collapse
> Indonesia — Autos, para. 24
> Argentina — Hides and Leather, para. 49
> Argentina — Hides and Leather, para. 51
> Economic
impact of existing measure
> Canada — Patent Term, paras. 46–48
> US — Offset Act (Byrd Amendment), paras. 79–80
> Developing
countries
> Indonesia — Autos, para. 24
> Chile — Alcoholic Beverages, para. 44
> Chile — Alcoholic Beverages, para. 45
> Chile — Price Band System, paras. 55–56
> US — Offset Act (Byrd Amendment), para. 81
> US — Oil Country Tubular Goods Sunset
Reviews, para. 52
> Calendar
of Legislative Body
> US — Offset Act (Byrd Amendment), paras. 69–70
> Flexibility of Implementation Process
> US — 1916 Act, para. 39
> Canada — Patent Term, paras. 63-64
> EC — Tariff Preferences, para. 36
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ARB.5.1 General
back to top
ARB.5.1.1 Japan
— Alcoholic Beverages II, para. 11
(WT/DS8/15, WT/DS10/15, WT/DS11/13)
… Article 21(3)(c) of the DSU also
stipulates, however, that the “reasonable period of time” may be
shorter or longer than 15 months, depending upon the “particular
circumstances”. The term, “particular circumstances”, is not
defined in the DSU.
ARB.5.1.2 Japan
— Alcoholic Beverages II, para. 27
(WT/DS8/15, WT/DS10/15, WT/DS11/13)
As stated in Article 3(2) of the DSU,
the dispute settlement system of the WTO is a central element in
providing security and predictability to the multilateral trading
system. Therefore, all WTO Members have a strong interest in prompt
compliance with and full implementation of the recommendations and
rulings of the DSB. This interest is clearly reflected in the provisions
of the DSU, and in particular in Article 21(3)(c), which
stipulates that a “reasonable period of time” for implementation
should not exceed 15 months unless there are “particular circumstances”
justifying a longer or shorter period. In this case, I am not persuaded
that the “particular circumstances” advanced by Japan and the United
States justify a departure from the 15-month “guideline” either way.
…
ARB.5.1.3
Australia — Salmon, para. 38
(WT/DS18/9)
It has been pointed out that the arbitrator is
not obliged to grant 15 months as the reasonable period for
implementation in all cases. “Particular circumstances” justifying a
longer or shorter period must be taken into account on a case-by-case
basis. In the present case, there are certain considerations which
persuade me that the reasonable period of time should be significantly
less than 15 months. …
ARB.5.1.4
Chile — Alcoholic Beverages, para. 39
(WT/DS87/15, WT/DS110/14)
The concept of reasonableness, which is, of
course, built into the notion of “a reasonable period of time” for
implementation, inherently involves taking into account the relevant
circumstances. In some cases these circumstances may be singular or few
in number but in other cases they may be multiple. Determination of a
“reasonable period of time” is not, in principle, appropriately
carried out by ascribing decisive or exclusive relevance to one single
or even a few a priori factors and eschewing consideration of
everything else as non-pertinent. …
ARB.5.1.5
Canada — Pharmaceutical Patents, para. 48
(WT/DS114/13)
The “particular circumstances” mentioned
in Article 21.3 are, therefore, those that can influence what the
shortest period possible for implementation may be within the legal
system of the implementing Member. Conceivably, several such “particular
circumstances”, depending on the facts, could be relevant to a case
such as the one before me.
ARB.5.1.6
Canada — Pharmaceutical Patents, para. 52
(WT/DS114/13)
… There may well be other “particular
circumstances” that may be relevant to a particular case. However, in
my view, the “particular circumstances” mentioned in Article 21.3 do
not include factors unrelated to an assessment of the shortest
period possible for implementation within the legal system of a Member.
Any such unrelated factors are irrelevant to determining the “reasonable
period of time” for implementation. For example, as others have ruled
in previous Article 21.3 arbitrations, any proposed period intended to
allow for the “structural adjustment” of an affected domestic
industry will not be relevant to an assessment of the legal process. The
determination of a “reasonable period of time” must be a legal
judgement based on an examination of relevant legal requirements.
ARB.5.1.7
Canada — Autos, paras. 54-55
(WT/DS139/12, WT/DS142/12)
Canada has placed great emphasis on the “significant
implications” that implementation of the DSB’s recommendations in
this case will have for the “administration of Canada’s customs
regime”. …
Regardless of Canada’s specific argument on
this issue, I wish to emphasize that factors unrelated to an assessment
of the shortest period of time possible for a Member to implement,
within its legal system, the recommendations and rulings of the DSB in a
particular case are irrelevant to determining the “reasonable period
of time” under Article 21.3(c) of the DSU. While it might be more
convenient for Canada to implement the DSB’s recommendations in this
case on the same timeline as it has planned for the reform of its
customs administration regime, this factor is not relevant in
determining the “shortest period possible” within Canada’s legal
system for implementation of the DSB’s recommendations. … the
determination of the “reasonable period of time” for implementation
must be a legal judgment based on an examination of relevant legal
requirements.
ARB.5.1.8 US
— 1916 Act, para. 40
(WT/DS136/11, WT/DS162/14)
The United States also urges me to take
account of the “additional special circumstances” involved in this
case, that is, the need for a period of transition to a new President, a
new Administration, and a new Congress, and the accompanying shifts in
the balance of power between the two principal political parties in the
United States. Even allowing for these unusual circumstances, I note
that what is significant for the case at hand is that the first session
of the 107th United States Congress has been in progress since 3 January
2001. It is, therefore, possible for the United States to introduce a
legislative proposal and have it passed by the Congress as speedily as
possible, using, as I have stated earlier, all the flexibility available
within its normal legislative procedures.
ARB.5.1.9
Canada — Patent Term, paras. 59-60
(WT/DS170/10)
While Canada invokes the controversial
character of any amendment to its Patent Act which will have an
impact on the Canadian health care system, the United States emphasizes
that under Canada’s parliamentary system, the Government of Canada
controls the majority in both Houses of Parliament, the House of Commons
and the Senate. According to the United States, with this majority, the
government controls the legislative process, and sets the timetable for
both Houses of Parliament from start to finish; the Government of Canada
can essentially pass any legislation it wishes in whatever time it
likes.
It may well be possible that Canada’s
political system and the actual distribution of seats among the
political parties in Canada’s Parliament facilitate the passage of
legislative initiatives taken by the present Canadian government. I am,
however, very reluctant to take these factors into account in
determining the “reasonable period of time”. These factors vary from
country to country, and from constitution to constitution. Even within a
given country, they will change over time. In addition, their evaluation
will often be difficult and highly speculative. I also note that such
factors have never been considered as “particular circumstances” in
any of the earlier awards under Article 21.3 (c) of the DSU. Thus, the
political factors mentioned in the preceding paragraph, and invoked by
the United States in support of its request for a “reasonable period
of time” of six months, are not relevant to my task.
ARB.5.1.10
Chile — Price Band System, para. 34
(WT/DS207/13)
Article 21.3(c) provides for an arbitrator a
“guideline” of a maximum of 15 months from the date of adoption of
the panel and Appellate Body reports when establishing a “reasonable
period of time” for implementation. Notwithstanding this “guideline”,
I must ultimately be informed, as Article 21.3(c) instructs, by the “particular
circumstances” of a given case, which may counsel in favour of shorter
or longer periods. …
ARB.5.2 Actions taken since DSB adoption of
Report(s) back to top
ARB.5.2.1 US
— Section 110(5) Copyright Act, para. 46
(WT/DS160/12)
… Article 21.3(c) makes clear that the “reasonable
period of time” for implementation is measured as from the “date of
adoption of a panel or Appellate Body report”. I recall that Article 21.1 establishes that “prompt compliance” is essential in order to
ensure effective resolution of disputes to the benefit of all Members.
Clearly, timeliness is of the essence. Thus, an implementing Member must
use the time after adoption of a panel and/or Appellate Body report to
begin to implement the recommendations and rulings of the DSB.
Arbitrators will scrutinize very carefully the actions an implementing
Member takes in respect of implementation during the period after
adoption of a panel and/or Appellate Body report and prior to any
arbitration proceeding. If it is perceived by an arbitrator that an
implementing Member has not adequately begun implementation after
adoption so as to effect “prompt compliance”, it is to be expected
that the arbitrator will take this into account in determining the “reasonable
period of time”.
ARB.5.2.2 Chile
— Price Band System, paras. 43, 45
(WT/DS207/13)
… A Member’s obligation to implement the
recommendations and rulings of the DSB is triggered by the DSB’s
adoption of the relevant panel and/or Appellate Body reports. Although
Article 21.3 acknowledges circumstances where immediate
implementation is “impracticable”, in my view the implementation
process should not be prolonged through a Member’s inaction (or
insufficient action) in the first months following adoption. In other
words, whether or not a Member is able to complete implementation
promptly, it must at the very least promptly commence and
continue concrete steps towards implementation. Otherwise, inaction or
dilatory conduct by the implementing Member would exacerbate the
nullification or impairment of the rights of other Members caused by the
inconsistent measure. It is for this reason that arbitral awards under
Article 21.3(c) calculate “reasonable period[s] of time” as from the
date of adoption of panel and/or Appellate Body reports.
…
… I realize the value of thorough
pre-legislative activities, particularly so as to ensure passage of
final legislation and thereby achieve “full implementation”. I also
recognize that consultations, discussions and deliberations, by their
very nature, are indeterminate and cannot be subject to arbitrary time
limits, particularly because the extensiveness of these activities may
change with each measure in issue. Nevertheless, for purposes of
calculating a “reasonable period of time” under Article 21.3(c),
such activities should not be assumed to be without reasonable limits. I
do not suggest that Chile’s pre-legislative activities in this case
should necessarily have concluded by this time; but, in my view, this
phase should reasonably have proceeded further than it has.
ARB.5.3 Complexity of implementing measures
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ARB.5.3.1 US
— 1916 Act, para. 36
(WT/DS136/11, WT/DS162/14)
At the oral hearing, I enquired whether,
although it is not within the mandate of an arbitrator to determine or
suggest the precise means of implementation, it is necessary for the
arbitrator to know the scope and complexity of the implementing measure,
as distinguished from the complexity of the Member’s legislative
process, in order to assess the “reasonable period of time” required
to put in place the proposed implementing measure. … The United States
explained, however, that regardless of the complexity of the legislation
required to implement the rulings and recommendations of the DSB, this
would be taken care of through the normal legislative process, and the
United States does not argue for or seek any additional time on the
basis of the scope, content or complexity of the implementing
legislation in this case. In view of the explicit acknowledgement of the
United States that it is not relying on the complexity of the
implementing legislation as a particular circumstance to justify or
lengthen the period of time needed for implementation in this case, it
is not necessary for me to examine this issue.
ARB.5.3.2
Canada — Pharmaceutical Patents, para. 50
(WT/DS114/13)
Likewise, the complexity of the
proposed implementation can be a relevant factor. If implementation is
accomplished through extensive new regulations affecting many sectors of
activity, then adequate time will be required to draft the changes,
consult affected parties, and make any consequent modifications as
needed. On the other hand, if the proposed implementation is the simple
repeal of a single provision of perhaps a sentence or two, then,
obviously, less time will be needed for drafting, consulting, and
finalizing the procedure. To be sure, complexity is not merely a matter
of the number of pages in a proposed regulation; yet it seems reasonable
to assume that, in most cases, the shorter a proposed regulation, the
less its likely complexity.
ARB.5.3.3 US
— Hot-Rolled Steel, para. 30
(WT/DS184/13)
… I do not believe that an arbitrator acting
under Article 21.3(c) of the DSU is vested with jurisdiction to make any
determination of the proper scope and content of implementing
legislation, and hence do not propose to deal with it. The degree of
complexity of the contemplated implementing legislation may be relevant
for the arbitrator, to the extent that such complexity bears upon the
length of time that may reasonably be allocated to the enactment of such
legislation. But the proper scope and content of anticipated legislation
are, in principle, left to the implementing WTO Member to determine.
ARB.5.3.4 US
— Offset Act (Byrd Amendment), para. 60
(WT/DS217/14, WT/DS234/22)
Similarly, the need to distinguish, in the
light of Panel and the Appellate Body findings in this dispute, between
WTO-consistent and WTO-inconsistent implementation options would appear
to be the typical content, and concomitant aspect, of every legislative
process aiming at implementing recommendations and rulings of the DSB. I
do agree with previous arbitrators that, in principle, the complex
nature of implementing measures can be a relevant factor for the
determination of the reasonable period of time. Nevertheless, I do not
believe that the need to take into account international treaty
obligations in the process of drafting implementing legislation, in and
of itself, gives rise to the kind of complexity that would warrant
additional time for implementation. Each and every piece of
legislation enacted with a view to implementing recommendations and
rulings of the DSB must be designed and drafted in the light of the
implementing Member’s rights and obligations under the covered
agreements. If the need to distinguish between WTO-consistent and WTO-inconsistent
implementation options were to qualify, per se, as “complexity”,
and, therefore, were to give rise to “particular circumstances”
relevant for the determination of the reasonable period of time, then every
implementation measure under consideration in proceedings pursuant to
Article 21.3(c) would have to be considered complex. In other words, “complexity”
would not be a “particular circumstance”; rather, it would be a
standard aspect of every implementation.
ARB.5.4 Complexity of implementation process
back to top
ARB.5.4.1 EC
— Bananas III, para. 19
(WT/DS27/15)
The Complaining Parties have not persuaded me
that there are “particular circumstances” in this case to justify a
shorter period of time than stipulated by the guideline in Article 21.3(c) of the DSU. At the same time, the complexity of the
implementation process, demonstrated by the European Communities, would
suggest adherence to the guideline, with a slight modification, so that
the “reasonable period” of time for implementation would expire by 1
January 1999.
ARB.5.4.2 EC
— Hormones, para. 39
(WT/DS26/15,
WT/DS48/13)
… It would not be in keeping with the
requirement of prompt compliance to include in the reasonable
period of time, time to conduct studies or to consult experts to
demonstrate the consistency of a measure already judged to be inconsistent.
That cannot be considered as “particular circumstances” justifying a
longer period than the guideline suggested in Article 21.3(c). This is
not to say that the commissioning of scientific studies or consultations
with experts cannot form part of a domestic implementation
process in a particular case. However, such considerations are not
pertinent to the determination of the reasonable period of time.
ARB.5.4.3 EC
— Hormones, paras. 41-42
(WT/DS26/15,
WT/DS48/13)
To grant the European Communities a further
two years, from the date of adoption by the DSB of the Appellate Body
Report and Panel Reports, to conduct the risk assessment that was
required as of 1 January 1995 would not be consistent with the
provisions of the DSU requiring prompt compliance with DSB
recommendations and rulings, nor with the obligations of the European
Communities under the SPS Agreement.
For the foregoing reasons, it would not be
proper to include in the reasonable period of time granted to the
European Communities under Article 21.3(c) of the DSU, an initial phase
of two years for the conduct and completion of scientific studies to
determine if there is a risk to human health from hormone-treated beef.
ARB.5.4.4 US
— 1916 Act, para. 38
(WT/DS136/11, WT/DS162/14)
In my view, factors such as the volume of
legislation brought before the United States Congress, and the high
percentage of bills that never become law, are not relevant to my
determination of the “reasonable period of time” for implementation
of the recommendations and rulings of the DSB in this case. Information
of this nature may be of general interest in examining how a legislative
system operates in practice, not only in the United States, but in many
other countries as well. What is relevant for my determination in this
case is the treaty obligations explicitly undertaken by Members pursuant
to the covered agreements. … In view of these fundamental obligations
assumed by the Members of the WTO, factors such as the volume of
legislation proposed, and the high percentage of bills that never become
law, cannot be considered to extend the period of time needed for
implementation. As for the argument that legislation passed by the
United States Congress is usually passed at the end of the legislative
session, this again may be the usual practice in the United States
Congress, but it is not the outcome of a legal requirement. Where an
international treaty obligation is required to be complied with in the
shortest period of time possible, as in this case, this cannot be a
relevant consideration for extending the period of implementation.
ARB.5.4.5 US
— 1916 Act, para. 39
(WT/DS136/11, WT/DS162/14)
Turning to the complexity of the United States’
legislative process, I note that the United States has explained, in
sufficient detail, the multiple and time-consuming steps involved in the
enactment of legislation within the specific context of the legislative
system of the United States. It is generally accepted that certain of
these steps are not required by law, and that the majority of these
steps are not subject to compulsory minimum time limits. In other words,
the United States’ legislative process, while complex, is
characterized by a considerable degree of flexibility. That this
flexibility is exercised to achieve the prompt passage of legislation
when this is considered necessary and appropriate is revealed by the
fact that bills have been passed by the United States Congress within
short periods of time, using its “normal” legislative process. The
United States has stated that it “will make every effort to promptly
implement the DSB’s recommendations and rulings” in this case. Since
this is a case where the United States has to enact a piece of
legislation to bring it into compliance with its international treaty
obligations under the covered agreements, the United States Congress may
reasonably be expected to use all the flexibility available within its
normal legislative procedures to enact the required legislation as
speedily as possible.
ARB.5.4.6 Chile
— Price Band System, para. 38
(WT/DS207/13)
Chile identifies a “pre-legislative” phase
followed by an extensive lawmaking procedure through which any law
implementing the DSB’s recommendations and rulings must pass. The
multi-step process of legislating, which involves the participation of
several legislative committees with at least two rounds of review (“general”
and “specific”, as labelled by Chile) by not only those committees,
but also by each house of Congress itself, highlights the complexity of
the process Chile will undergo during implementation. …
ARB.5.4.7
Chile — Price Band System, para. 39
(WT/DS207/13)
… I am also conscious of the fact that most
steps in Chile’s lawmaking procedure, while required by law, are not
subject to statutory or constitutional time limits. Therefore, there
appears to be a certain amount of “flexibility” within the normal
legislative process, particularly in terms of steps such as the “general
discussions” and Presidential endorsement, that Chile may fairly be
expected to utilize in good faith so that it may promptly develop a new
law repealing or modifying the PBS and otherwise ensure that it conforms
with its WTO obligations.
ARB.5.4.8 Chile
— Price Band System, para. 42
(WT/DS207/13)
The absence of a requirement under Chile’s
laws to engage in pre-legislative consultations is not sufficient, in my
view, to dismiss the relevance of such consultations for purposes of
this Article 21.3(c) arbitration. As other arbitrators have noted, and
as Chile has emphasized, the consultation phase is important for laying
the foundation upon which a proposed law passes through the legislative
process. Although not mandated by law, consultations within government
agencies as well as with the affected sectors of society are typically a
concomitant of lawmaking in contemporary polities, and such
consultations should be taken into account when fixing a “reasonable
period of time” for implementation.
ARB.5.4.9 Chile
— Price Band System, para. 52
(WT/DS207/13)
Nevertheless, the relevant laws of Chile,
namely, the Constitution and Law 18.918, appear to enable Chile to
resort to this “extraordinary” legislative procedure when proposing
a law to modify the PBS. Because of the significant passage of time
since adoption of the panel and Appellate Body reports in this case, and
the lack of progress made thus far in implementing the recommendations
and rulings of the DSB, Chile may itself decide to resort to the “urgency
procedure” at certain stages of the legislative process. Chile
recognizes that it must implement those recommendations and rulings in
good faith towards other Members of the WTO. It must therefore do
everything it reasonably can to act expeditiously in this process of
implementation. Perhaps this will call for Chile to invoke its “urgency
procedure”. Perhaps it will not. On the facts of this case and the
evidence before me, I believe that whether and at what stages Chile
utilizes the “urgency procedure” are questions for Chile to
determine for itself. But, whatever it does, Chile must implement the
recommendations and rulings of the DSB promptly.
ARB.5.4.10 US
— Offset Act (Byrd Amendment), para. 64
(WT/DS217/14, WT/DS234/22)
I am aware that the component steps of the
United States’ legislative process, as pointed out by the United
States, are numerous and potentially time-consuming. However, I note
that legislative bills have been passed by the United States Congress
within short periods of time; for instance, the CDSOA itself appears to
have been passed in a period of only 25 days. Moreover, the United
States has described itself as a “strong advocate [ ] of prompt
compliance”. Finally, I also agree with the arbitrators in US —
Section 110(5) Copyright Act and in US — 1916 Act,
respectively, who noted that, where the United States is obliged to
enact a piece of legislation in order to bring itself into compliance
with its obligations under an international treaty, the United States
Congress may be expected to take advantage of the flexibility available
within the legislative procedures to implement such legislation as
speedily as possible.
ARB.5.4.11 EC
— Tariff Preferences, para. 53
(WT/DS246/14)
To start with the European enlargement, the
European Communities argues that considerable time will be needed to
translate into the 20 official languages certain instruments connected
with implementation. I agree that this circumstance is likely to
increase the period of time reasonably required to complete certain
steps in the implementation process. Therefore, I have taken this into
account in my determination. I also agree with the European Communities
that, if a member State of the European Union requested verification
that the Council adopted the implementing regulation by a qualified
majority representing at least 62% of the population of the European
Union, this could add to the time required for implementation.
ARB.5.4.12 EC
— Tariff Preferences, para. 54
(WT/DS246/14)
I turn to the election of a new European
Parliament in June 2004 and the commencement of a new Commission on 1
November 2004. According to the European Communities’ estimates, the
Commission will complete its proposal on a Council regulation modifying
the Drug Arrangements, and that proposal will be transmitted to the
European Parliament, in October 2004. The fact that a new Commission
takes charge on 1 November 2004 would not appear to increase the time
required to complete that proposal. Similarly, if the Commission’s
proposal is transmitted to the European Parliament in October 2004, this
should allow sufficient time for the European Parliament to become “operational”
before it examines the proposal.
ARB.5.5 Relevance of contentiousness
back to top
ARB.5.5.1 Chile
— Alcoholic Beverages, para. 43
(WT/DS87/15, WT/DS110/14)
Two aspects of the Chilean legislative process
may be usefully noted. One is the set of practices designated as the “pre-legislative”
phase of the law-making process in Chile, during which phase a specific
revised tax scheme is developed and proposed on the basis of
consultations and technical assessments. These consultations will
include discussions aimed at building and organizing the broad support
necessary for the adoption of the proposed bill, by both Chambers of the
National Congress. The duration of this “pre-legislative” phase may
differ from bill to bill; no maximum period is set by law but it is
clearly an important phase if the success of the legislative effort is
important. …
ARB.5.5.2
Canada — Pharmaceutical Patents, para. 58
(WT/DS114/13)
… I see nothing in this proposed regulatory
change that can be described as complex. What is more, in this case,
comments from the public could not be expected to result in much
alteration of the one substantive sentence of Canada’s proposed
regulatory change, which merely repeals the existing regulation. After
all, how many other ways could this one sentence be written? Likewise,
in this case, any consideration of any changes that might conceivably be
needed in the solitary substantive sentence of the proposed regulatory
change could not be expected to take very long. … If this proposed
regulatory change were more complex, I might reach a different
conclusion. Yet it is not complex at all. And, given the sheer
simplicity of the wording, function and purpose of this proposed
regulation, I consider it implausible that this particular
implementation step in this case should take as much time as claimed by
Canada.
ARB.5.5.3
Canada — Pharmaceutical Patents, para. 60
(WT/DS114/13)
… I see nothing in Article 21.3 to indicate
that the supposed domestic “contentiousness” of a measure taken to
comply with a WTO ruling should in any way be a factor to be considered
in determining a “reasonable period of time” for implementation. …
ARB.5.5.4
US — Section 110(5) Copyright Act, paras. 41-42
(WT/DS160/12)
… one of the factors listed by the United
States as support for the period it has proposed is not relevant for the
determination of a “reasonable period of time” for implementation.
The United States refers to the “controversy” surrounding the
legislation, and the “divergent views of stakeholders”. …
… any argument as to the “controversy”,
in the sense of domestic “contentiousness”, regarding the measure at
issue is not relevant. … While I agree that this is an important
issue, I do not see how it will add any additional time to the
legislative process, as the content of the legislation effecting
implementation is precisely the issue that Congress will decide through
its normal procedures.
ARB.5.5.5
Canada — Patent Term, para. 49
(WT/DS170/10)
I now turn to Canada’s main argument in
support of its request for a “reasonable period of time” of 14
months and two days. I recall Canada’s observation that the required
amendment of its Patent Act will have an economic impact on
Canada’s health care system, so that it can be expected that there
will be significant debate which is likely to be divisive, and that,
therefore, the Government of Canada will have to carefully manage the
legislative process. …
ARB.5.5.6
Canada — Patent Term, para. 53
(WT/DS170/10)
The issue raised by Canada is of great
importance, both from the point of view of the implementation of
recommendations and rulings of the DSB, that is, the respect of
international treaty obligations, and from the point of view of
fundamental principles of the democratic process. I do not believe,
however, that I have to decide the controversy between the parties for
the implementation through legislation in general. My only task is to
determine the “reasonable period of time” for the case before me. My
reasoning, therefore, applies to this case only.
ARB.5.5.7
Canada — Patent Term, para. 58
(WT/DS170/10)
The treatment of existing patents which
benefit from a longer period of protection than the period prescribed by
Article 33 of the TRIPS Agreement may be highly controversial and
closely connected politically with the amendment of Article 45 of the
Canadian Patent Act. However, as I have already said, this issue
is outside the strict boundaries of the implementation of the
recommendations and rulings of the DSB. Consequently, the “contentiousness”
of this issue is certainly not a “particular circumstance” which I
should take into account in determining the “reasonable period of time”
in the present case. Therefore, Canada cannot invoke legislative choices
and the likely divisiveness of the debate in the Canadian Parliament to
justify its request for a “reasonable period of time” of 14 months
and two days.
ARB.5.5.8 US
— Hot-Rolled Steel, para. 38
(WT/DS184/13)
… Even so, it does not seem unreasonable to
infer that the formal proceedings are likely to be carried out with more
dispatch in view of the “pre-legislative”, informal consultations
already undertaken. In Chile — Taxes on Alcoholic Beverages —
Arbitration under Article 21.3(c) of the DSU (“Chile — Alcoholic
Beverages”), the Arbitrator noted that the “pre-legislative”
phase is “an important phase if the success of the legislative effort
is important.”
ARB.5.5.9
Chile — Price Band System, paras. 47-48
(WT/DS207/13)
… it has been rightly said that “[a]ll WTO
disputes are ‘contentious’ domestically at least to some extent; if
they were not, there would be no need for recourse by WTO Members to
dispute settlement.” Simple contentiousness may thus not be a
sufficient consideration under Article 21.3(c) for a longer period of
time.
Nevertheless, the facts of this dispute, as
identified by Chile and uncontested by Argentina, raise special concerns
that warrant my taking them into account in my determination. I am of
the view that the PBS is so fundamentally integrated into the policies
of Chile, that domestic opposition to repeal or modification of those
measures reflects, not simply opposition by interest groups to the loss
of protection, but also reflects serious debate, within and outside the
legislature of Chile, over the means of devising an implementation
measure when confronted with a DSB ruling against the original law. In
the light of the longstanding nature of the PBS, its fundamental
integration into the central agricultural policies of Chile, its
price-determinative regulatory position in Chile’s agricultural
policy, and its intricacy, I find its unique role and impact on Chilean
society is a relevant factor in my determination of the “reasonable
period of time” for implementation.
ARB.5.5.10 US
— Offset Act (Byrd Amendment), para. 61
(WT/DS217/14, WT/DS234/22)
I do not mean to suggest that I am of the view
that the dispute between the United States and the eleven Complaining
Parties in US — Offset Act (Byrd Amendment) does not involve
important questions under WTO law. Moreover, I am fully aware of the
high level of economic and political interest in this particular
dispute, as evidenced by the significant number of WTO Members involved
in all stages of this dispute, including in these arbitration
proceedings. Nevertheless, “complexity” of implementing legislation
as a particular circumstance, within the meaning of Article 21.3(c), is
a legal criterion, to be examined without regard for political
contentiousness or other non-legal factors that may surround a measure
at issue. I am precluded, by my mandate under Article 21.3(c), from
giving consideration to these non-legal factors.
ARB.5.5.11 EC
— Tariff Preferences, para. 56
(WT/DS246/14)
I am not persuaded by the statements of the
European Communities that the particular nature of the Drug Arrangements
within the GSP scheme and the development policy of the European
Communities warrants any increase in the reasonable period of time for
implementation. Although a modification to the Drug Arrangements may
well be described as “politically sensitive”, this factor does not
distinguish the Drug Arrangements from any other measure that is likely
to be the subject of a WTO dispute. The measure examined in Chile —
Price Band System was quite different. That measure had a “unique
… impact on Chilean society” (that is, the society of the implementing
Member); “domestic opposition” to its repeal or modification
reflected “serious debate, within and outside the legislature of
Chile, over the means of devising an implementation measure” and “not
simply opposition by interest groups to the loss of protection”.
ARB.5.6 Means of implementation
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ARB.5.6.1
Australia — Salmon, paras. 31, 33
(WT/DS18/9)
A certain difficulty arises in this case
because of the divergent views of the parties as to what constitutes
implementation. …
…
Clearly, what constitutes a “reasonable
period of time” depends upon the action which Australia takes under
its legal system to implement the recommendations and rulings of the DSB.
If implementation is effected by means of an administrative decision to
repeal or modify the measure at issue or by means of a permit granted by
the Director of Quarantine, the length of time needed to carry out such
a process would be different from what it would be if Australia were to
conduct a series of risk assessments.
ARB.5.6.2
Australia — Salmon, para. 38
(WT/DS18/9)
… Both parties also agree that the process
involved in bringing the measure in dispute into conformity with
Australia’s obligations under the SPS Agreement is an
administrative, not a legislative, process. As pointed out by the
arbitrator in European Communities — Hormones, when
implementation can be effected by administrative means, the reasonable
period of time should be “considerably shorter than 15 months.”
ARB.5.6.3
Canada — Pharmaceutical Patents, para. 49
(WT/DS114/13)
For example, if implementation is by administrative
means, such as through a regulation, then the “reasonable period of
time” will normally be shorter than for implementation through legislative
means. It seems reasonable to assume, unless proven otherwise due to
unusual circumstances in a given case, that regulations can be changed
more quickly than statutes. To be sure, the administrative process can
sometimes be long; but the legislative process can oftentimes be longer.
ARB.5.6.4
Canada — Pharmaceutical Patents, para. 51
(WT/DS114/13)
In addition, the legally binding, as
opposed to the discretionary, nature of the component steps leading to
implementation should be taken into account. If the law of a Member
dictates a mandatory period of time for a mandatory part of the process
needed to make a regulatory change, then that portion of a proposed
period will, unless proven otherwise due to unusual circumstances in a
given case, be reasonable. On the other hand, if there is no such
mandate, then a Member asserting the need for a certain period of time
must bear a much more imposing burden of proof. …
ARB.5.6.5
US — Hot-Rolled Steel, para. 32
(WT/DS184/13)
The temporal relationship between the
legislative and the administrative implementing actions is an important
consideration in the present arbitration. The United States and Japan
agree that the relationship is not necessarily a linear, sequential one
and that some administrative actions may well be taken, or at least
commenced, concurrently with the initiation of the legislative
implementing effort.
ARB.5.6.6 Chile
— Price Band System, footnote 86 to para. 33
(WT/DS207/13)
… I note that both parties in this
arbitration argue that new legislation is necessary for implementation
of the recommendations and rulings of the DSB, and therefore, appear to
agree that “immediate” compliance by Chile is impracticable. The
impracticability of Chile’s immediate compliance has not been raised
as an issue for decision in this arbitration.
ARB.5.6.7 Chile
— Price Band System, paras. 36-37
(WT/DS207/13)
… Whether elimination of the PBS, in so far
as it impacts upon the relevant products, is the “only appropriate”
means of implementation (as opposed to a modification of the PBS) is not
an issue for decision in this arbitration. As discussed above, the focus
of my inquiry and determination relates to the period of time
needed to implement the recommendations and rulings of the DSB, not to
the manner in which Chile intends to implement them. …
The fact that an Article 21.3(c) arbitration
focuses on the period of time for implementation, however, does not
render the substance of the implementation, that is, the precise means
or manner of implementation, immaterial from the perspective of the
arbitrator. In fact, the more information that is known about the
details of the implementing measure, the greater the guidance to an
arbitrator in selecting a reasonable period of time, and the more likely
that such period of time will fairly balance the legitimate needs of the
implementing Member against those of the complaining Member.
Nevertheless, the arbitrator should still avoid deciding what a Member
must do for proper implementation. …
ARB.5.6.8
Chile — Price Band System, para. 38
(WT/DS207/13)
… I find the intricacy of the lawmaking
process relevant to my determination, and I agree with the observation
of previous arbitrators that implementation through legislation is
likely to require a longer time for implementation than administrative
rulemaking or other exclusively Executive action.
ARB.5.6.9 US
— Offset Act (Byrd Amendment), para. 57
(WT/DS217/14, WT/DS234/22)
… As a general rule, absent evidence to the
contrary, implementation by legislative measures will, more often than
not, require a longer period of time than implementation by means of
administrative measures. …
ARB.5.6.10
US — Offset Act (Byrd Amendment), para. 59
(WT/DS217/14, WT/DS234/22)
I do not consider the existence of numerous
options to implement the recommendations and rulings of the DSB, as
invoked by the United States, to be relevant to my determination of the
“reasonable period of time” for implementation of the
recommendations and rulings of the DSB. The weighing and balancing of
the respective merits of various legislative alternatives is one of the
key functions and aspects of any legislative process. The mere fact that
implementation of the recommendations and rulings of the DSB
necessitates the choice between several, or even a large number of,
alternative options is generally not, in my view, in and of itself, a
particular circumstance that would inform my determination of the
shortest period possible to implement the recommendations and rulings of
the DSB in this case.
ARB.5.6.11 EC
— Tariff Preferences, para. 42
(WT/DS246/14)
It is not unusual for domestic or other legal
systems to follow procedural conventions that are not explicitly
mandated by legal instruments. Moreover, I find relevant that the
Council has sought an opinion from the European Parliament and the
ECOSOC before adopting the great majority of regulations related to the
European Communities’ GSP scheme over the years. The European
Communities has also suggested that the consequences of failing to seek
such opinions in the present implementation process would be a matter to
be determined by the Court of Justice of the European Communities. It
appears, therefore, that adoption of the regulation in question without
seeking opinions from the European Parliament and the ECOSOC would be an
“extraordinary” procedure. I agree with previous arbitrators that
implementing Members are not required to adopt “extraordinary
legislative procedures” in every case. In my view, seeking the
opinions of the European Parliament and the ECOSOC should be included in
determining the reasonable period of time for implementation.
ARB.5.6.12 EC
— Tariff Preferences, para. 51
(WT/DS246/14)
I note that the Arbitrator in Korea —
Alcoholic Beverages determined that it was reasonable to include in
the reasonable period of time the “thirty-day grace period for
enforcement of certain … instruments” provided in a Korean statute.
The Arbitrator in EC — Bananas III also appears to have taken
into account the European Communities’ statement that “any change in
legislation which directly affects the customs treatment of products in
connection with importation or exportation, enters into force either on
1 January or 1 July of the relevant year” in determining the
reasonable period of time in that dispute. In the present case, I regard
the administrative practice of the European Communities, as it pertains
to advance publication of tariff changes and the date on which such
changes take effect, as a relevant factor in determining the reasonable
period of time for implementation.
ARB.5.6.13 US
— Oil Country Tubular Goods Sunset Reviews, para. 26
(WT/DS268/12)
… the nature of the steps to be taken for
implementation has a bearing on the “reasonable period of time”
required to fully implement the recommendations and rulings of the DSB.
The implementation may require amendments to laws or regulations that
may involve legislative action, or it may require amendments to
administrative guidelines or procedures that may not involve such
action. Implementation may also involve only the remedying of the
deficiencies in a particular determination. Previous arbitration awards
under Article 21.3(c) have recognized that when implementation requires
legislative action, the “reasonable period of time” required may be
longer than in cases where only administrative action is required to
amend guidelines or procedures or to remedy the deficiencies in
particular determinations. …
ARB.5.6.14
US — Oil Country Tubular Goods Sunset Reviews, para. 50
(WT/DS268/12)
The United States considers that the waiver
provisions of the USDOC Regulations must first be amended to bring them
into conformity with the DSB’s recommendations and rulings, and that
only after the amended regulations are issued could they be applied to a
new determination to remedy the “as applied” violation in this
dispute. In this regard, I note two aspects of this dispute: first, one
of the reasons for the Panel finding the “as applied” violation was
that WTO-inconsistent waiver provisions were applied to Argentine
exporters other than Siderca; and, second, an amendment of the waiver
provisions of the USDOC Regulations is in any event required to remedy
the “as such” violations in this dispute. The United States has
explained why it considers an in seriatim approach to be
necessary in this case to ensure that the redetermination is in
conformity with its own legal system. …
ARB.5.7 Structural adjustment
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ARB.5.7.1
Indonesia — Autos, para. 23
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)
Indonesia also requests an additional period
of nine months following the issuance of its implementing measure (i.e.,
to 23 October 1999) as a “transition” period to allow the affected
companies/industries to make structural adjustments. I do not view
structural adjustments of Indonesia’s affected industries as a “particular
circumstance” which may be taken into account under Article 21.3(c) of
the DSU. In virtually every case in which a measure has been found to be
inconsistent with a Member’s obligations under the GATT 1994 or any
other covered agreement, and therefore, must be brought into conformity
with that agreement, some degree of adjustment by the domestic industry
of the Member concerned will be necessary. This will be the case
regardless of whether the Member concerned is a developed or a
developing country. Structural adjustment to the withdrawal or the
modification of an inconsistent measure, therefore, is not a “particular
circumstance” that can be taken into account in determining the
reasonable period of time under Article 21.3(c).
ARB.5.7.2
Canada — Pharmaceutical Patents, para. 52
(WT/DS114/13)
… in my view, the “particular
circumstances” mentioned in Article 21.3 do not include factors
unrelated to an assessment of the shortest period possible for
implementation within the legal system of a Member. Any such unrelated
factors are irrelevant to determining the “reasonable period of time”
for implementation. For example, as others have ruled in previous
Article 21.3 arbitrations, any proposed period intended to allow for the
“structural adjustment” of an affected domestic industry will not be
relevant to an assessment of the legal process. The determination of a
“reasonable period of time” must be a legal judgement based on an
examination of relevant legal requirements.
ARB.5.7.3
Argentina — Hides and Leather, para. 41
(WT/DS155/10)
It thus appears that the concept of compliance
or implementation prescribed in the DSU is a technical concept with a
specific content: the withdrawal or modification of a measure, or part
of a measure, the establishment or application of which by a Member of
the WTO constituted the violation of a provision of a covered agreement.
Compliance within the meaning of the DSU is distinguishable from the
removal or modification of the underlying economic or social or other
conditions the existence of which might well have caused or contributed
to the enactment or application of the WTO-inconsistent governmental
measure in the first place. Those economic or other conditions might, in
certain situations, survive the removal or modification of the
non-conforming measure; nevertheless, the WTO Member concerned will have
complied with the DSB recommendations and rulings and with its
obligations under the relevant covered agreement. To my mind, it is inter
alia for the above reason that the need for structural adjustment of
the industry or industries in respect of which the WTO-inconsistent
measure was promulgated and applied, has generally been regarded, in
prior arbitrations under Article 21.3(c) of the DSU, as not
bearing upon the determination of a “reasonable period of time” for
implementation of DSB recommendations and rulings.
ARB.5.8 Economic and financial collapse
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ARB.5.8.1
Indonesia — Autos, para. 24
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)
… Indonesia has indicated that in a “normal
situation”, a measure such as the one required to implement the
recommendations and rulings of the DSB in this case would become
effective on the date of issuance. However, this is not a “normal
situation”. Indonesia is not only a developing country; it is a
developing country that is currently in a dire economic and financial
situation. Indonesia itself states that its economy is “near collapse”.
In these very particular circumstances, I consider it appropriate to
give full weight to matters affecting the interests of Indonesia as a
developing country pursuant to the provisions of Article 21.2 of the DSU.
I, therefore, conclude that an additional period of six months over and
above the six-month period required for the completion of Indonesia’s
domestic rule-making process constitutes a reasonable period of time for
implementation of the recommendations and rulings of the DSB in this
case.
ARB.5.8.2
Argentina — Hides and Leather, para. 49
(WT/DS155/10)
A final point that should be made is that to
build into the concept of a “reasonable period of time” to comply
with DSB recommendations and rulings, time or opportunity to control and
manage economic or social conditions which antedate or are
contemporaneous with the adoption of the WTO-inconsistent governmental
measure, may, in the generality of instances, be to defer to an
indefinitely receding future the duty of compliance. The implications
for the multilateral trading system as we know it today, of such an
interpretation of “reasonable period of time” for compliance are
clear and far-reaching and ominous. Such an interpretation would tend to
reduce the fundamental duty of “immediate” or “prompt”
compliance to a figure of speech.
ARB.5.8.3
Argentina — Hides and Leather, para. 51
(WT/DS155/10)
… I agree that under Article 21.2 of the DSU
in conjunction with Article 21.3(c), account may appropriately be taken
of the circumstance that the WTO Member which must comply with the DSB
recommendations and rulings is a developing country confronted by severe
economic and financial problems. That those problems in the case of
Argentina are real is not disputed, although there may be debate as to
whether Argentina’s economy is “near collapse”.
ARB.5.9 Economic
impact of existing measure. See also Relevance of
contentiousness (ARB.5.5)
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ARB.5.9.1
Canada — Patent Term, paras. 46-48
(WT/DS170/10)
A second point of convergence between the
parties concerns the significance, under Article 21.3(c) of the DSU, of
the economic consequences of the expiry of certain patents during the
“reasonable period of time” for the implementation of the
recommendations and rulings of the DSB. I recall the United States’
assertion that, if Canada is permitted to delay its implementation of
the recommendations and rulings of the DSB, thousands of patents will
continue to expire “prematurely”, causing irreparable harm to patent
owners; on average, 1,149 patents will fall into the public domain each
month during 2001.
At the oral hearing, Canada accepted the
statistics presented by the United States, but submitted that they are
misleading as they fail to indicate whether or not the “prematurely”
expiring patents have any commercial significance. …
Canada advanced the argument about the small
number of patents with commercial value for the first time at the oral
hearing. It is obvious that this argument would raise a major procedural
problem if the commercial value of the patents expiring during the “reasonable
period of time” had any relevance as a “particular circumstance”
for the determination of the length of the “reasonable period of time”
in this case. However, in my view, this is not so. Measures taken by
Members, which are inconsistent with one of the covered agreements will,
naturally, or at least very often, cause irreparable harm to economic
operators who are nationals of other Members. In this respect,
violations of the TRIPS Agreement will generally not differ from
violations of one of the other covered agreements. The precise
assessment of damage caused to a group of economic operators or to
single individuals, or companies, may well be more difficult to evaluate
than in the present case. However, this does not distinguish the present
case from other cases involving violations of covered agreements for the
purposes of determining the “reasonable period of time”, under
Article 21.3(c). I note that this view corresponds to the position taken
by the United States at the oral hearing according to which the argument
of urgency was raised to provide context. The United States acknowledged
that the commercial value of the expiring patents is not relevant to the
determination of the shortest period possible, within the Canadian legal
system.
ARB.5.9.2 US
— Offset Act (Byrd Amendment), paras. 79-80
(WT/DS217/14, WT/DS234/22)
… economic harm suffered by foreign
exporters does not, and cannot, by definition, impact on what is the “shortest
period possible within the legal system of the Member to implement the
recommendations and rulings of the DSB”. The particular circumstances,
within the meaning of Article 21.3(c), can only be of such nature as
will influence the evolution and unfolding of the implementation process
itself. Factors external to the legislative process itself are of no
relevance for the determination of the reasonable period of time for
implementation.
I do not wish to imply that economic harm,
caused by the WTO-inconsistent measure, to economic agents of the
Complaining Parties, or any other WTO Members, is irrelevant in the
context of the implementation of the recommendations and rulings of the
DSB. Many WTO-inconsistent measures will cause some form of economic
harm to exporters of WTO Members. However, the need, and urgency, to
remove WTO-inconsistent measures, and to remove the harm to economic
agents caused by such measures, is, in my view, already reflected in the
principle of “prompt compliance” under Article 21.1. The same
concern, in my view, underlies the well established principle, under
Article 21.3(c), that the reasonable period of time for implementation
be the shortest time possible within the legal system of the Member.
Thus, it would be supererogatory, and incongruous, to accord renewed
consideration to the issue of economic harm when determining the
shortest period possible for implementation within the legal system of
the implementing Member.
ARB.5.10 Developing countries
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ARB.5.10.1
Indonesia — Autos, para. 24
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)
… Indonesia is a developing country. In that
context, I note that Article 21.2 of the DSU requires that:
Particular attention should be paid to matters
affecting the interests of developing country Members with respect to
measures which have been subject to dispute settlement.
Although the language of this provision is
rather general and does not provide a great deal of guidance, it is a
provision that forms part of the context for Article 21.3(c) of the DSU
and which I believe is important to take into account here. …
Indonesia is not only a developing country; it is a developing country
that is currently in a dire economic and financial situation. Indonesia
itself states that its economy is “near collapse”. In these very
particular circumstances, I consider it appropriate to give full weight
to matters affecting the interests of Indonesia as a developing country
pursuant to the provisions of Article 21.2 of the DSU. I, therefore,
conclude that an additional period of six months over and above the
six-month period required for the completion of Indonesia’s domestic
rule-making process constitutes a reasonable period of time for
implementation of the recommendations and rulings of the DSB in this
case.
ARB.5.10.2
Chile — Alcoholic Beverages, para. 44
(WT/DS87/15, WT/DS110/14)
Chile has also referred to Article 21.2, where
the DSU, immediately after stressing that “prompt compliance” with
the recommendations and rulings of the DSB is essential for the WTO
dispute settlement system, provides:
Particular attention should be paid to matters
affecting the interests of developing country Members with respect to
measures which have been subject to dispute settlement.
Chile has submitted that account must be taken
of the specific interests of Chile as the developing country Member
whose measure has been the subject of dispute settlement. However, Chile
has not been very specific or concrete about its particular interests as
a developing country Member nor about how those interests would actually
bear upon the length of “the reasonable period of time” to enact
necessary amendatory legislation.
ARB.5.10.3
Chile — Alcoholic Beverages, para. 45
(WT/DS87/15, WT/DS110/14)
It is not necessary to assume that the
operation of Article 21.2 will essentially result in the application of
“criteria” for the determination of “the reasonable period of time”
— understood as the kinds of considerations that may be taken
into account — that would be “qualitatively” different for
developed and for developing country Members. I do not believe Chile is
making such an assumption. Nevertheless, although cast in quite general
terms, because Article 21.2 is in the DSU, it is not simply to be
disregarded. As I read it, Article 21.2, whatever else it may signify,
usefully enjoins, inter alia, an arbitrator functioning under
Article 21.3(c) to be generally mindful of the great difficulties that a
developing country Member may, in a particular case, face as it proceeds
to implement the recommendations and rulings of the DSB.
ARB.5.10.4
Chile — Price Band System, paras. 55-56
(WT/DS207/13)
… I agree with the following statement by
the arbitrator in Chile — Alcoholic Beverages that “an
arbitrator functioning under Article 21.3(c) [must] be generally
mindful of the great difficulties that a developing country Member
may, in a particular case, face as it proceeds to implement the
recommendations and rulings of the DSB.” This arbitration is, however,
the first arbitration under Article 21.3(c) to include developing
countries as both complainant and respondent. The period of time
for implementation of the recommendations and rulings of the DSB in this
case is thus a “matter[] affecting the interests” of both Members:
the general difficulties facing Chile as a developing country in
revising its longstanding PBS, and the burden imposed on Argentina as a
developing country whose access to the Chilean agricultural market is
impeded by the PBS, contrary to WTO rules.
Furthermore, Chile has not pointed to
additional specific obstacles that it faces as a developing
country under present circumstances. This is a matter which I should
take into account in evaluating whether a longer period of time may be
needed for implementation. The absence of presently-existing, concrete
difficulties in Chile’s position as a developing country stands in
contrast to previous arbitrations, wherein Members have identified, not
simply their positions as developing countries, but also “severe” or
“dire” economic and financial situations existing at the time of the
proposed period of implementation. In contrast, the acuteness of
Argentina’s burden as a developing country complainant that has been
successful in establishing the WTO-inconsistency of a challenged
measure, is amplified by Argentina’s daunting financial woes at
present. Accordingly, I recognize that Chile may indeed face obstacles
as a developing country in its implementation of the recommendations and
rulings of the DSB, and that Argentina, likewise, faces continuing
hardship as a developing country so long as the WTO-inconsistent PBS is
maintained. In the unusual circumstances of this case, therefore, I am
not swayed towards either a longer or shorter period of time by the “[p]articular
attention” I pay to the interests of developing countries.
ARB.5.10.5 US
— Offset Act (Byrd Amendment), para. 81
(WT/DS217/14, WT/DS234/22)
… I note that, by its wording, Article 21.2
does not distinguish between situations where the developing country
Member concerned is an implementing or a complaining party. However, I
also note that the Complaining Parties have not explained specifically
how developing country Members’ interests should affect my
determination of the reasonable period of time for implementation. It is
useful to recall, once again, that the term “reasonable period of time”
has been consistently interpreted to signify the “shortest period
possible within the legal system of the Member”. Therefore, I have
some difficulty in seeing how the fact that several Complaining Parties
are developing country Members should have an effect on the
determination of the shortest period possible within the legal system of
the United States to implement the recommendations and rulings of the
DSB in this case.
ARB.5.10.6 US
— Oil Country Tubular Goods Sunset Reviews, para. 52
(WT/DS268/12)
… for my determination of the reasonable
period of time, Argentina requests me to use as “context” the fact
that Argentina is a developing country Member. Having regard to the
implementation process involved in this dispute, I consider that, beyond
the fundamental requirement that the implementation process should be
completed in the shortest period possible within the legal and
administrative system of the United States, the “reasonable period of
time” for implementation is not affected by the fact that Argentina,
as the complaining Member, is a developing country.
ARB.5.11 Calendar of Legislative Body
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ARB.5.11.1 US
— Offset Act (Byrd Amendment), paras. 69-70
(WT/DS217/14, WT/DS234/22)
… The fact that at any given point in the
Congressional schedule there would be a “greater opportunity” to
pass legislation than at another point in time, is not a particular
circumstance relevant for my determination of the reasonable period of
time for implementation in this case. The obligation to implement
promptly and, if impracticable to do so immediately, then within a
reasonable period of time, the recommendations and rulings of the DSB is
an international treaty obligation of the United States; the specific
content and meaning of this international legal obligation cannot be
affected by non-legal considerations related to the United States
Congressional schedule.
This is not to say that the schedule of the
United States Congress (or any other legislative body of any
implementing Member) can never be a relevant particular circumstance;
for instance, previous arbitrators have given consideration, in their
determination of the reasonable period of time for implementation, to
circumstances where a draft bill could not be introduced into Congress
for a number of months because a new Congress had not yet convened at
the time when the arbitration was initiated. However, these
circumstances do not arise in the present proceedings. The United States
has not argued that it would not be possible to pass the
implementing legislation at another point in time, for instance at the
end of the Congressional session when the majority of bills are enacted,
or at any other time during the Congressional session.
ARB.5.12 Flexibility of Implementation Process
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ARB.5.12.1 US
— 1916 Act, para. 39
(WT/DS136/11, WT/DS162/14)
Turning to the complexity of the United States’
legislative process, I note that the United States has explained, in
sufficient detail, the multiple and time-consuming steps involved in the
enactment of legislation within the specific context of the legislative
system of the United States. It is generally accepted that certain of
these steps are not required by law, and that the majority of these
steps are not subject to compulsory minimum time limits. In other words,
the United States’ legislative process, while complex, is
characterized by a considerable degree of flexibility. That this
flexibility is exercised to achieve the prompt passage of legislation
when this is considered necessary and appropriate is revealed by the
fact that bills have been passed by the United States Congress within
short periods of time, using its “normal” legislative process. The
United States has stated that it “will make every effort to promptly
implement the DSB’s recommendations and rulings” in this case. Since
this is a case where the United States has to enact a piece of
legislation to bring it into compliance with its international treaty
obligations under the covered agreements, the United States Congress may
reasonably be expected to use all the flexibility available within its
normal legislative procedures to enact the required legislation as
speedily as possible.
ARB.5.12.2
Canada — Patent Term, paras. 63-64
(WT/DS170/10)
Canada has described, in detail, in its
written submission the different steps of the legislative phase of its
law making process. The passage of legislation requires, in essence,
three readings in both Houses of the Canadian Parliament, that is, the
House of Commons and the Senate. The process includes an examination of
the proposed legislation by committees, which normally takes place
between the second and the third reading. Once the House of Commons has
considered the bill, it is sent to the Senate for its consideration.
After approval by the Senate, the bill is given Royal Assent by the
Governor-General. The different steps in this process and their sequence
are clearly structured and defined. With respect to timing and
scheduling, however, the process is flexible, as Canada acknowledged at
the oral hearing. Use of this flexibility does not require recourse to
extraordinary procedures. Following earlier arbitration awards, I
consider this flexibility to be an important element in establishing the
“reasonable period of time”.
Ultimately, the “reasonable period of time”
appears to be a function of the priority which Canada attributes to the
amendment of its Patent Act in order to bring it into conformity
with its obligations under Article 33 of the TRIPS Agreement. I
recognize that in all democratic societies, legislative initiatives
designed to satisfy different needs and wishes compete with each other.
I share, however, the view expressed in a recent arbitration award
concerning another Member, which I adopt only to the extent that it fits
the present case concerning Canada; it seems to me that this is the type
of matter for which the Canadian Parliament should try to comply with
the international obligations of Canada as soon as possible, taking
advantage of the flexibility that it has in its normal legislative
procedures.
ARB.5.12.3 EC
— Tariff Preferences, para. 36
(WT/DS246/14)
As several previous arbitrators have noted,
flexibility in a Member’s legislative system may enable the Member to
effect a legislative amendment in a shorter period of time than might
otherwise be possible. In the present case, India submits that the
European Communities’ legislative system “is characterised by
considerable flexibility”. I agree, in the sense that no mandatory
minimum time periods are imposed for any particular step in the
implementation process as outlined by the European Communities. The
European Communities has used this flexibility to modify Regulation 2501
(modifying or extending the GSP scheme) promptly in the past. I take
into account, as a relevant matter, the flexibility in the European
Communities’ legislative system; but it does not, of itself, determine
the question of the reasonable period of time for implementation.
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