DS: China — Additional Duties on Certain Products from the United States

This dispute concerns additional duties imposed by China on certain products originating in the United States. The Panel referred to the measure through which these duties were imposed as the “additional duties measure”. The United States challenged the additional duties measure as inconsistent with Articles I:1, II:1(a), and II:1(b) of the GATT 1994.

Compliance of the United States' panel request with Article 6.2 of the DSU

The Panel began by addressing China's objection that, by only claiming inconsistency with Articles I and II of the GATT 1994 in its panel request and failing to raise a claim under Article XIX of the GATT 1994 and the Agreement on Safeguards, which, in China's view, were the provisions pursuant to which the measure at issue was adopted, the United States had not provided a brief summary of the legal basis of its complaint sufficient to present the problem clearly. The Panel noted that Article 6.2 of the DSU entrusts each complainant with the discretion to decide which of the covered agreements to bring claims under, and does not additionally require that the “brief summary of the legal basis” of the complaint presented in the panel request be full or correct. It further explained that while a failure to identify the full or correct legal basis of the claim in the panel request may have consequences at the merits stage of the proceedings, it does not, in itself, render the panel request defective in terms of Article 6.2 of the DSU. Accordingly, the Panel rejected China's objection.

Applicability of the relevant covered agreements

The Panel then turned to China's argument that the additional duties measure was subject to Article 8.2 of the Agreement on Safeguards and Article XIX:3(a) of the GATT 1994, and that the application of Articles I and II of the GATT 1994 to that measure was therefore suspended. The Panel considered that whether Article 8.2 of the Agreement on Safeguards and Article XIX:3(a) of the GATT 1994 apply to China's additional duties measure depended on the characterization under the Agreement on Safeguards of the underlying measure adopted by the United States, in response to which China had adopted the additional duties measure.

With respect to the relevant measures of the United States, the Panel concluded that those measures were sought, taken, or maintained pursuant to a provision of the GATT 1994 other than Article XIX, namely Article XXI of the GATT 1994. The Panel accordingly found that the Agreement on Safeguards did not apply to those measures, as provided in Article 11.1(c) of that Agreement. Consequently, the Panel also found that Article 8.2 of the Agreement on Safeguards and Article XIX:3(a) of the GATT 1994 did not apply to China's additional duties measure, as the rights under those two provisions are unavailable in respect of measures to which the Agreement on Safeguards does not apply.

Claims under the GATT 1994

The Panel found that China's additional duties measure was inconsistent with Article I:1 of the GATT 1994 because, with respect to customs duties imposed on or in connection with importation, China failed to accord the advantage of lower tariff rates granted to products imported from other countries immediately and unconditionally to products originating in the United States. The Panel also found that the additional duties measure was inconsistent with Articles II:1(a) and II:1(b) of the GATT 1994 because it resulted in the imposition of ordinary customs duties in excess of those provided in China's Schedule and accorded to imports from the United States treatment less favourable than that provided for in China's Schedule.