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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.3.1.8 Chile — Price Band System (Article 21.5 — Argentina),
paras. 12, 13, 15, 253
(WT/DS207/AB/RW)
… [By letter] dated 26 February 2007, [Argentina asked] the
Division to reject 13 of 15 exhibits that were attached to Chile’s
appellant’s submission on the grounds that these exhibits included new
evidence that was not before the Panel in these Article 21.5 proceedings
and that Article 17.6 of the DSU precludes the Appellate Body from
accepting such evidence.
By letter dated 13 March 2007, the Division indicated that, if a
ruling on the admissibility of these exhibits proved necessary, it would
make such a ruling in “due course” and expressed its “preliminary
view” that the admissibility of such exhibits should be governed by
the following three principles:
First, any evidence relating to the operation of the measure at issue
after June 2006 is new evidence that does not properly form part
of the record upon which the Division must review the Panel’s findings
and conclusions in this case and is inadmissible.
Secondly, Chile’s exhibits are admissible insofar as they only
present data that were before the Panel. It is not necessary that the
data were presented to the Panel in precisely the same form as
they are now presented to the Appellate Body. Nevertheless, exhibits
presenting evidence in a form that differs from the way in which the
evidence was presented to the Panel are admissible only if: (i) the data
presented can be clearly traced to data in the Panel record; and (ii)
the way in which the data presented to the Panel has been converted into
the form in which it is presented in this appeal can be readily
understood.
Thirdly, a Decree that: (i) is expressly referred to in the measure
at issue in this appeal; (ii) is publicly available; and (iii) the
content of which was discussed before the Panel is, in principle,
admissible, unless Argentina can establish that it will suffer prejudice
were the Appellate Body to admit the text of this Decree. (original
emphasis)
…
For the reasons that we set out below, we have not found it necessary
to make any additional ruling on the admissibility of the specific
exhibits challenged by Argentina in its request of 26 February 2007.
…
We have reached our findings and conclusions on the basis of a
careful examination of the Panel Report in the light of the claims of
error and arguments raised on appeal. In undertaking this task, we did
not find it necessary to have recourse to the information provided by
Chile in Exhibits CHL-AB-3 through CHL-AB-15 attached to its appellant’s
submission. As a result, we need not make any separate or additional
ruling on the admissibility of these exhibits.
S.3.1.9 US — Zeroing (EC) (Article 21.5 — EC), para. 171
(WT/DS294/AB/RW,
WT/DS294/AB/RW/Corr.1)
Before examining the European Communities’ appeal, we address first
a preliminary matter that was brought by the United States at the oral
hearing concerning Exhibit EC-62, an exchange of e-mails. Exhibit EC-62
was submitted to the Appellate Body as an attachment to a document
reflecting the opening statement made by the European Communities at the
oral hearing. The United States objected to the submission of Exhibit
EC-62 and claimed that it is a new piece of evidence that cannot be
considered in the appellate proceedings. The European Communities
responded that Exhibit EC-62 had already been transmitted to the
Appellate Body as part of the record of the Panel proceedings because,
under Rule 25(2) of the Working Procedures for Appellate Review,
“[t]he complete record of the panel proceeding includes… the
correspondence relating to the panel dispute between the panel or the
WTO Secretariat and the parties to the dispute or the third parties”.
Having examined the record of the Panel proceedings, transmitted to the
Appellate Body under Rule 25(1) of the Working Procedures, we
have found that it does not contain the exchange of e-mails referred to
in Exhibit EC-62. Accordingly, we conclude that Exhibit-62 is new
evidence that cannot be considered at the appellate stage.
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.7.2-8) 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.3.2.7 Mexico — Anti-Dumping Measures on Rice, paras. 273-274
(WT/DS295/AB/R)
… we are of the view that this aspect of Mexico’s appeal should
have been more appropriately brought under Article 11 of the DSU. Mexico’s
argument is premised on the Panel’s purported failure to read the
challenged provisions of the FTA in the light of another FTA
provision that Mexico brought to the attention of the Panel. Mexico
alleges that the Panel “disregarded” this evidence and “made
unsubstantiated findings” on the mandatory nature of the challenged
provisions of the FTA “virtually without undertaking any relevant
analysis”. Mexico’s claim of error, therefore, rests on the Panel’s
failure to conduct its analysis in a proper and impartial manner: Mexico
does not contest, on the merits, the Panel’s decision rejecting the
supposed import of Article 2 for the interpretation of the other
provisions of the FTA.
In this light, Mexico’s claim on appeal appears to be a traditional
Article 11 claim challenging the Panel’s failure to accord sufficient
weight to evidence submitted by one of the parties. …
S.3.2.8 Mexico — Anti-Dumping Measures on Rice, para. 330
(WT/DS295/AB/R)
… The English translation of Article 93V that was provided to the
Panel by the United States was the official WTO translation of these
notifications. Although Mexico argued in its submissions to the Panel
that Article 93V was not mandatory — based in part on the opening
language of Article 93 — Mexico never questioned the use of these
official WTO translations as the basis for the Panel’s examination. We
do not see how the Panel can be said to have failed to make an objective
assessment when it relied on an official WTO English translation of
Mexico’s law, to which Mexico itself raised no objection. Therefore,
we find that, in its interpretation of Article 93V of the FTA,
the Panel did not fail to fulfil its obligations under Article 11
of the DSU.
S.3.3 Issues of law vs. Issues of fact (Article 17.6 of the DSU).
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 noncompliance 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,
WT/DS207/AB/R/Corr.1)
… 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 programmes, 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.3.3.18 US — Anti-Dumping Measures on Oil Country Tubular Goods,
para. 195
(WT/DS282/AB/R)
… The Panel’s conclusions and findings in paragraphs 7.53 to 7.64
of the Panel Report involve a “legal characterization of… facts”
in the Panel’s determination of the consistency of the SPB, as such,
with the requirements of Article 11.3 of the Anti-Dumping Agreement.
They are, therefore, subject to our review.
S.3.3.19 US — Softwood Lumber VI (Article 21.5 — Canada),
para. 148
(WT/DS277/AB/RW,
WT/DS277/AB/RW/Corr.1)
… Canada’s argument [that the USITC acted inconsistently with
Article 3.7(i) of the Anti-Dumping Agreement and Article 15.7(ii)
of the SCM Agreement in determining the role of increase] is
essentially directed at the USITC’s appreciation of the evidence on
the record, that is, at the question whether the evidence supported the
USITC’s finding that the rate of increase in dumped/subsidized imports
was “significant” and that it indicated that imports would increase
“substantially” in the near future. …
S.3.3.20 US — Softwood Lumber VI (Article 21.5 — Canada),
para. 152
(WT/DS277/AB/RW,
WT/DS277/AB/RW/Corr.1)
… Canada’s claim [that the USITC did not make a proper price
comparison as required by Article 3.7(iii) of the Anti-Dumping
Agreement and Article 15.7(iv) of the SCM Agreement] is
essentially directed at the appreciation of the evidence by the USITC,
that is, at the question whether the evidence on the record supported a
finding that the prices of imports were having a depressing or
suppressing effect on domestic prices and would likely increase demand
for further imports.
S.3.3.21 US — Upland Cotton (Article 21.5 — Brazil), para.
385
(WT/DS267/AB/RW)
The United States has characterized its appeal under Article 6.3(c)
of the SCM Agreement as one relating to the Panel’s application
of the law to the facts, although it has also brought some claims under
Article 11 of the DSU that challenge the objectivity of the Panel’s
assessment of the facts. We recognize that the boundary between an issue
that is purely factual and one that involves mixed issues of law and
fact is often difficult to draw. However, we consider that many of the
United States’ claims against the Panel’s evaluation of the elements
supporting its finding of significant price suppression are primarily
directed at the Panel’s appreciation and weighing of the evidence, and
the inferences that the Panel drew from the evidence, both of which fall
within its authority that is recognized under Article 11 of the DSU.
Therefore, we shall review those claims and arguments raised by the
United States concerning the application of the law to the facts under
the legal standard of Article 6.3(c) of the SCM Agreement, and
those claims and arguments concerning the Panel’s appreciation and
weighing of the evidence under Article 11 of the DSU.
S.3.3.22 US — Upland Cotton (Article 21.5 — Brazil), para.
406
(WT/DS267/AB/RW)
We see nothing improper in the Panel’s reasoning that the fact that
83 per cent of cotton planted acreage corresponded directly to upland
cotton base acres supports the conclusion that a strongly positive
relationship exists between recipients of upland cotton counter-cyclical
payments who hold upland cotton base acres and those who continue to
plant upland cotton. In any event, we consider that, on this issue, the
United States is essentially challenging the inferences drawn by the
Panel from the evidence before it, and this is a matter that was within
the Panel’s authority as the trier of facts. We note that the United
States did not raise a claim under Article 11 of the DSU on this issue.
S.3.3.23 US — Upland Cotton (Article 21.5 — Brazil), para.
424
(WT/DS267/AB/RW)
In any event, the methodology used by the Panel in determining which
production costs and revenues to compare to establish whether there is a
gap between upland cotton producers’ costs of production and revenues
is not an issue of legal interpretation or application under Article
6.3(c) of the SCM Agreement. The existence of a revenue gap is
not a legally required benchmark under Article 6.3(c). In other words,
there is no legal consequence under Article 6.3(c) that necessarily
flows from the fact that there is a gap between producers’ revenues
and costs. Rather, it is merely one of the elements that the Panel
considered in determining whether there was “significant price
suppression”. Thus, the profitability of upland cotton production is a
factual matter, the evaluation of which fell to the Panel to determine.
S.3.3.24 US — Upland Cotton (Article 21.5 — Brazil), para.
432
(WT/DS267/AB/RW)
… We have already considered that the profitability of upland
cotton production is a factual matter, the evaluation of which fell
within the Panel’s authority. Accordingly, we see no reason to
interfere with the Panel’s decision to rely on total costs, use USDA
crop-specific data, include opportunity costs for items such as unpaid
labour and owned land, and exclude off-farm income. We, therefore, find
that the Panel’s evaluation of these factors was proper and within the
bounds of its authority as the trier of facts. The United States has not
made a claim under Article 11 of the DSU with respect to the Panel’s
finding on the existence of a revenue gap, nor in relation to the
components of the Panel’s determination.
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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