DISPUTE SETTLEMENT

DS: United States — Safeguard Measure on Imports of Fresh, Chilled or Frozen Lamb from Australia

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

See also:

back to top

Current status

 

back to top

Key facts

Short title:

Complainant:

Respondent:

Third Parties:

Agreements cited:
(as cited in request for consultations)
Request for Consultations received:

Panel Report circulated: 21 December 2000
Appellate Body Report circulated: 1 May 2001

 

back to top

Latest document

  

back to top

Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Australia.

On 16 July 1999, New Zealand requested consultations with the US in respect of a safeguard measure imposed by the US on imports of lamb meat from New Zealand (WT/DS177). New Zealand alleged that by Presidential Proclamation under Section 203 of the US Trade Act 1974, the US imposed a definitive safeguard measure in the form of a tariff-rate quota on imports fresh, chilled, or frozen lamb meat effective from 22 July 1999. New Zealand contended that this measure is inconsistent with Articles 2, 4, 5, 11 and 12 of the Agreement on Safeguards, and Articles I and XIX of GATT 1994.

On 23 July 1999, Australia requested consultations with the US in respect of a definitive safeguard measure imposed by the US on imports of lamb (WT/DS178). Australia alleged that by Presidential Proclamation under Section 203 of the US Trade Act 1974, the US imposed a definitive safeguard measure in the form of a tariff-rate quota on imports of fresh, chilled, or frozen lamb meat from Australia effective from 22 July 1999. Australia contended that this measure is inconsistent with Articles 2, 3, 4, 5, 8, 11 and 12 of the Agreement on Safeguards, and Articles I, II and XIX of GATT 1994.

On 14 October 1999, New Zealand and Australia requested the establishment of a panel. At its meeting on 27 October 1999, the DSB deferred the establishment of the panels.

 

Panel and Appellate Body proceedings

Further to the second requests to establish a panel by New Zealand and Australia, at its meeting on 19 November 1999, the DSB established, pursuant to Article 9.1 of the DSU, a single panel to examine the complaints WT/DS177 and WT/DS178. Canada, the EC, Iceland and Japan reserved their third-party rights. Australia reserved its third-party rights in relation to the complaint by New Zealand, while New Zealand reserved its third-party rights in relation to the complaint by Australia. On 21 March 2000, the Panel was composed. The Panel circulated its report on 21 December 2000. The Panel concluded that:

  • the US has acted inconsistently with Article XIX:1(a) of GATT 1994 by failing to demonstrate as a matter of fact the existence of “unforeseen developments”;
     
  • the US has acted inconsistently with Article 4.1(c) of the Agreement on Safeguards because the USITC, in the lamb meat investigation, defined the domestic industry as including input producers as producers of the like product at issue (i.e. lamb meat);
     
  • the complainants failed to establish that the USITC’s analytical approach to determining the existence of a threat of serious injury, in particular with respect to the prospective analysis and the time-period used, is inconsistent with Article 4.1(b) of the Agreement on Safeguards;
     
  • the complainants failed to establish that the USITC’s analytical approach to evaluating all of the factors listed in Article 4.2(a) of the Agreement on Safeguards when determining whether increased imports threatened to cause serious injury with respect to the domestic industry as defined in the investigation is inconsistent with that provision;
     
  • the US has acted inconsistently with Article 4.1(c) of the Agreement on Safeguards because the USITC failed to obtain data in respect of producers representing a major proportion of the total domestic production by the domestic industry as defined in the investigation;
     
  • the US has acted inconsistently with Article 4.2(b) of the Agreement on Safeguards because the USITC’s determination in the lamb meat investigation in respect of causation did not demonstrate the required causal link between increased imports and threat of serious injury, in that the determination did not establish that increased imports were by themselves a necessary and sufficient cause of threat of serious injury, and in that the determination did not ensure that threat of serious injury caused by “other factors” was not attributed to increased imports;
     
  • by virtue of the above violations of Article 4 of the Agreement on Safeguards, the US also has acted inconsistently with Article 2.1 of the Agreement on Safeguards.

On 31 January 2001, the US notified the DSB of its intention to appeal certain issues of law covered in the Panel Report and legal interpretations developed by the Panel. The Appellate Body circulated its report on 1 May 2001. The Appellate Body:

  • upheld the Panel’s finding that the US acted inconsistently with Article XIX:1(a) of the GATT 1994 by failing to demonstrate, as a matter of fact, the existence of “unforeseen developments”;
     
  • upheld the Panel’s finding that the United States acted inconsistently with Articles 2.1 and 4.1(c) of the Agreement on Safeguards because the USITC defined the relevant “domestic industry” to include growers and feeders of live lambs;
     
  • upheld the Panel’s finding that the USITC made a determination regarding the “domestic industry” on the basis of data that was not sufficiently representative of that industry; but modified the Panel’s ultimate finding that the US thereby acted inconsistently with Articles 2.1 and 4.1(c) of the Agreement on Safeguards by finding, instead, that the United States thereby acted inconsistently with Articles 2.1 and 4.2(a) of that Agreement;
     
  • found that the Panel correctly interpreted the standard of review, set forth in Article 11 of the DSU, which is appropriate to its examination of claims made under Article 4.2 of the Agreement on Safeguards; but concluded that the Panel erred in applying that standard in examining the claims made concerning the USITC’s determination that there existed a threat of serious injury; and found, moreover, that the US acted inconsistently with Articles 2.1 and 4.2(a) of the Agreement on Safeguards because the USITC Report did not explain adequately the determination that there existed a threat of serious injury to the domestic industry;
     
  • reversed the Panel’s interpretation of the causation requirements in the Agreement on Safeguards but, for different reasons, upheld the Panel’s ultimate finding that the US acted inconsistently with Articles 2.1 and 4.2(b) of the Agreement because the USITC’s determination that there existed a causal link between increased imports and a threat of serious injury did not ensure that injury caused to the domestic industry, by factors other than increased imports, was not attributed to those imports;
     
  • upheld the Panel’s exercise of judicial economy in declining to rule on the claim of New Zealand under Article 5.1 of the Agreement on Safeguards; and
     
  • declined to rule on the respective conditional appeals of Australia and New Zealand relating to Articles I, II and XIX:1(a) of the GATT 1994, and to Articles 2.2, 3.1, 5.1, 8.1, 11.1(a) and 12.3 of the Agreement on Safeguards.

The DSB adopted the Appellate Body Report and the Panel Report, as modified by the Appellate Body Report, on 16 May 2001.

 

Implementation of adopted reports

At the DSB meeting of 20 June 2001, the US recalled that on 14 June 2001 it had submitted in writing to the DSB its intentions with respect to the implementation in this case and said that it intended to implement the DSB’s recommendations in a manner that would respect its WTO obligations. The US further stated that it would need a reasonable period of time for implementation and, for that reason, it would enter into discussions with the complaining parties. On 27 September 2001, the US informed the DSB of its decision to implement the recommendations of the DSB by ending the safeguard measure effective on 15 November 2001. On 28 September 2001, Australia and New Zealand agreed that the reasonable period of time for implementation would expire on 15 November 2001.

Share


  

Problems viewing this page? If so, please contact webmaster@wto.org giving details of the operating system and web browser you are using.