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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.3.2 Review of “objective assessment” by
the panel — Article 11 of the DSU.
See also Standard of Review,
Article 11 of the DSU (S.7.2-7) 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.3.3 Issues of law vs. Issues of fact.
See
also Completion of the Legal Analysis by the Appellate Body (C.4);
Mootness of Panel Findings as a Consequence of Appellate Body Rulings (M.3)
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. …
…
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.
…
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)
… 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.3.4 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.
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