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> EC — Bananas III, paras. 252-253
> EC — Export Subsidies on Sugar, para. 296
> EC — Export Subsidies on Sugar, para. 299

N.3.1 EC — Bananas III, paras. 252-253     back to top
(WT/DS27/AB/R)

So, too, is the panel report in United States — Superfund, to which the Panel referred. In that case, the panel examined whether measures with “only an insignificant effect on the volume of exports do nullify or impair benefits under Article III:2 …”. The panel concluded (and in so doing, confirmed the views of previous panels) that:

Article III:2, first sentence, cannot be interpreted to protect expectations on export volumes; it protects expectations on the competitive relationship between imported and domestic products. A change in the competitive relationship contrary to that provision must consequently be regarded ipso facto as a nullification or impairment of benefits accruing under the General Agreement. A demonstration that a measure inconsistent with Article III:2, first sentence, has no or insignificant effects would therefore in the view of the Panel not be a sufficient demonstration that the benefits accruing under that provision had not been nullified or impaired even if such a rebuttal were in principle permitted. [BISD 34S/136, para. 5.1.9]

The panel in United States — Superfund subsequently decided “not to examine the submissions of the parties on the trade effects of the tax differential” on the basis of the legal grounds it had enunciated. The reasoning in United States — Superfund applies equally in this case.

 
N.3.2 EC — Export Subsidies on Sugar, para. 296     back to top
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)

… pursuant to Article 3.8, where a Member has acted inconsistently with a covered agreement, the inconsistency is presumed to nullify or impair benefits accruing to other Members. In such a case, the burden falls on the defending Member to rebut this presumption by demonstrating that the inconsistency did not result in nullification or impairment. We observe that Article 3.8 equates the concept of “nullification or impairment” with “adverse impact on other Members”, although the DSU does not define “adverse impact”.

 
N.3.3 EC — Export Subsidies on Sugar, para. 299     back to top
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)

The text of Article 3.8 of the DSU suggests that a Member may rebut the presumption of nullification or impairment by demonstrating that its breach of WTO rules has no adverse impact on other Members. Trade losses represent an obvious example of adverse impact under Article 3.8. Unless a Member demonstrates that there are no adverse trade effects arising as a consequence of WTO-inconsistent export subsidies, we do not believe that a complaining Member’s expectations would have a bearing on a finding pursuant to Article 3.8 of the DSU. Therefore, the European Communities has failed to rebut the presumption of nullification or impairment pursuant to Article 3.8 of the DSU.

The texts reproduced here do not have the legal standing of the original documents which are entrusted and kept at the WTO Secretariat in Geneva.