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> US — Upland Cotton, paras. 272–273
> EC — Export Subsidies on Sugar, para. 332
> US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 189
> US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 220
> EC — Selected Customs Matters, paras. 134–135
> US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 183 and Footnote 383
> US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 184
> India — Additional Import Duties, paras. 229–230
> EC — Bananas III (Article 21.5 — Ecuador II) / EC — Bananas III (Article 21.5 — US), paras. 321–323, 325
> US — Zeroing (EC) (Article 21.5 — EC), para. 468
> China — Raw Materials, para. 251
> China — Raw Materials, paras. 254–256, 259–260
> China — Raw Materials, paras. 261–262
> China — Raw Materials, paras. 263–265
I.0.1 US — Upland Cotton, paras. 272–273 back to top
The question whether an expired measure is susceptible to a recommendation under Article 19.1 of the DSU is a different matter. The Appellate Body in US — Certain EC Products confirmed that the 3 March Measure had ceased to exist. It noted that there was an obvious inconsistency between the finding of the panel that “the 3 March Measure is no longer in existence” and the panel’s subsequent recommendation that the Dispute Settlement Body (the “DSB”) request the United States to bring the 3 March Measure into conformity with its WTO obligations. Thus, the fact that a measure has expired may affect what recommendation a panel may make. It is not, however, dispositive of the preliminary question of whether a panel can address claims in respect of that measure.
… Article 7.8 of the SCM Agreement provides that, where it has been determined that “any subsidy has resulted in adverse effects to the interests of another Member”, the subsidizing Member must “take appropriate steps to remove the adverse effects or … withdraw the subsidy” (emphasis added). The use of the word “resulted” suggests that there could be a time-lag between the payment of a subsidy and any consequential adverse effects. If expired measures underlying past payments could not be challenged in WTO dispute settlement proceedings, it would be difficult to seek a remedy for such adverse effects. Further — in contrast to Articles 3.7 and 19.1 of the DSU — the remedies under Article 7.8 of the SCM Agreement for adverse effects of a subsidy are (i) the withdrawal of the subsidy or (ii) the removal of adverse effects. Removal of adverse effects through actions other than the withdrawal of a subsidy could not occur if the expiration of a measure would automatically exclude it from a panel’s terms of reference.
I.0.2 EC — Export Subsidies on Sugar, para. 332 back to top
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)
Under Article 19.1 of the DSU, where a panel “concludes that a measure is inconsistent with a covered agreement, it shall recommend that the Member concerned bring the measure into conformity with that agreement” (Footnote omitted). The panel is not required to make a recommendation as to how the Member should implement its obligations or as to the time-frame for implementation. However, Article 19.1 also provides that “[a] panel or [the] Appellate Body may suggest ways in which the Member concerned could implement the recommendations” (emphasis added).
I.0.3 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 189 back to top
The facts of the present appeal are quite different from those in EC — Export Subsidies on Sugar. First, the Appellate Body’s finding of non-compliance with Article 11 of the DSU in that dispute related to the obligation of panels to make a recommendation under Article 4.7 of the Agreement on Subsidies and Countervailing Measures (the “SCM Agreement”) regarding the time period for withdrawal of a prohibited subsidy. The Anti-Dumping Agreement has no provision similar to Article 4.7 of the SCM Agreement that panels must follow. The applicable provision in the present dispute regarding suggestions for implementation is the second sentence of Article 19.1 of the DSU, which Mexico does not rely on in this appeal, and which, in any event, does not oblige panels to make such a suggestion. Secondly, the panel’s error in EC — Export Subsidies on Sugar was in wrongly exercising judicial economy — that is, failing to rule on a claim before it. The Panel in the present dispute did not exercise judicial economy with respect to Mexico’s claim that the USDOC acted inconsistently with Article 11.3 of the Anti-Dumping Agreement in the sunset review of the anti-dumping duty order on OCTG from Mexico. On the contrary, as noted above, the Panel upheld Mexico’s claim of inconsistency.
I.0.4 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 220 back to top
As there is no appeal from the Panel’s finding that the USDOC’s likelihood-of-dumping determination in the sunset review at issue in this dispute was inconsistent with Article 11.3 of the Anti-Dumping Agreement, we do not make any additional recommendation regarding that finding. Given that we have not found in this Report that the United States acted inconsistently with any of its WTO obligations, we make no recommendation to the DSB pursuant to Article 19.1 of the DSU in this regard.
I.0.5 EC — Selected Customs Matters, paras. 134–135 back to top
The Panel considered that, when a violation of Article X:3(a) of the GATT 1994 is claimed, the measure at issue must necessarily be a “manner of administration” because, if such a violation is found, the WTO Member concerned would need to alter the manner of administration in order to comply with a recommendation made pursuant to Article 19.1 of the DSU. In our view, this reasoning of the Panel is flawed because it conflates the threshold question of whether a measure falls within a panel’s terms of reference with the question of the means of implementation in the event that a violation is found. Through the recommendation under Article 19.1, the Member found to have violated a provision of a covered agreement is required to take corrective action to remove the violation. The recommendation envisaged in Article 19.1 concerns the stage of implementation and not the question of whether a measure falls within a panel’s terms of reference. Moreover, the Member concerned has a degree of discretion with respect to the nature and type of action that it undertakes in order to achieve compliance. Therefore, we have difficulty in understanding how the means of compliance with a recommendation under Article 19.1 of the DSU should govern the identification of the specific measure at issue in a panel request. We agree, in this respect, with the United States that “[t]he mere fact that a breach of Article X:3(a) may be removed by changing a law’s administration is not a basis for concluding that the law is not the measure at issue”.
… In [US — Upland Cotton], the Appellate Body had to address the issue of whether an expired measure can be a “measure at issue” within the meaning of Article 6.2 of the DSU. The Appellate Body rejected the United States’ argument that, because an expired measure is not susceptible to a recommendation under Article 19.1 of the DSU, it cannot be a “measure at issue” under Article 6.2. For the Appellate Body, the question of whether a panel can address claims in respect of an expired measure is to be distinguished from the question of whether that measure is susceptible to a recommendation under Article 19.1. … the Appellate Body’s reasoning in US — Upland Cotton supports our position that Article 19.1 of the DSU does not place restrictions on the type of measure that can be identified in a panel request under Article 6.2 of the DSU.
I.0.6 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 183 and Footnote 383 back to top
… The Panel’s explanation is brief, but it is sufficient to convey that the Panel considered Argentina’s request and that, in the light of the discretionary nature of the authority to make a suggestion, the Panel declined to exercise that discretion. The discretionary nature of the authority to make a suggestion under Article 19.1 must be kept in mind when examining the sufficiency of a panel’s decision not to exercise such authority. However, it should not relieve a panel from engaging with the arguments put forward by a party in support of such a request. In the present case, Argentina offered several reasons in support of its request for a suggestion. Although it would have been advisable for the Panel to articulate more clearly the reasons why it declined to exercise its discretion to make a suggestion, this does not mean that Panel’s exercise of its discretion was improper, and, thus, even assuming arguendo that Articles 11 and 12.7 were applicable to a request for suggestion, we do not consider that, in the circumstances of this case, the Panel failed to fulfil its duties under those provisions.383
I.0.7 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 184 back to top
We noted earlier that Articles 19.1 and 21.3 of the DSU suggest that alternative means of implementation may exist and that the choice belongs, in principle, to the implementing Member. In addition, we indicated that several systemic questions arise in connection with the implementation of DSB recommendations and rulings in cases where a sunset review was found to be inconsistent with Articles 11.3 and 11.4 of the Anti-Dumping Agreement. These complex questions are implicated in Argentina’s request for a suggestion that the United States terminate the anti-dumping duty order. We believe that these questions are beyond the scope of the issues raised by the participants in this appeal and, furthermore, we do not consider that we should resolve them in the context of considering a request for a suggestion under Article 19.1 of the DSU. For these reasons, we decline Argentina’s request that we make a suggestion on how the United States could implement the recommendations in this case.
I.0.8 India — Additional Import Duties, paras. 229–230 back to top
We do not agree with India’s argument that the Panel’s “concluding remarks” amount to a legal finding or a recommendation within the meaning of the first sentence of Article 19.1, or a suggestion regarding implementation within the meaning of the second sentence of Article 19.1 of the DSU. Rather, the Panel did not find a breach of Articles II:1(a) and II:1(b), and made it clear that it was making “no recommendation under Article 19.1 of the DSU”. As there was nothing to implement, it is difficult to see why the Panel would have made a “suggestion” on implementation. In addition, the Panel recalled its finding that the customs notifications to which it referred in its “concluding remarks” were outside its terms of reference, and that it, therefore, “did not assess their impact upon the WTO-consistency of the [Additional Duty] on alcoholic liquor and the [Extra-Additional Duty]”.
The Panel’s “concluding remarks” do not amount to findings, conclusions, or recommendations regarding the WTO-conformity of the new customs notifications issued by India. Instead, they are simply explanations of the Panel’s conclusions, which are permissible, but not findings in and of themselves. We find that the Panel did not act contrary to Articles 3.2, 11, and 19 of the DSU in providing “concluding remarks” in paragraph 8.2 of the Panel Report.
I.0.9 EC — Bananas III (Article 21.5 — Ecuador II) / EC — Bananas III (Article 21.5 — US), paras. 321–323, 325 back to top
(WT/DS27/AB/RW2/ECU, WT/DS27/AB/RW/USA, WT/DS27/AB/RW2/ECU/Corr.1, WT/DS27/AB/RW/USA/Corr.1)
Suggestions made by panels or the Appellate Body pursuant to Article 19.1 of the DSU regarding ways of implementation form part of panel or Appellate Body reports adopted by the DSB in previous proceedings. The DSU does not expressly address the question of the legal status of suggestions that form part of a report adopted by the DSB, nor does it specify the legal consequences when a Member chooses to implement DSB recommendations and rulings by following a suggestion for implementation. A Member may choose whether or not to follow a suggestion. The use of the term “could” in Article 19.1 clarifies that Members are not obliged to follow suggestions for implementation.
Suggestions made pursuant to Article 19.1 are not in themselves the subject of review by a compliance panel. Article 21.5 of the DSU only refers to “measures taken to comply with the recommendations and rulings” and not to measures taken to comply with suggestions issued pursuant to the second sentence of Article 19.1. This confirms that an Article 21.5 panel’s power of review is limited to the assessment of the existence or consistency with the covered agreements of the measures taken to comply with recommendations and rulings of the DSB. Thus, what matters in Article 21.5 proceedings is whether the result of implementation — whatever means are chosen — brings about substantive compliance with the DSB recommendations and rulings. As the Panel noted, the conformity of the measures taken to comply with the covered agreements will depend on whether actual implementation of the DSB recommendations and rulings has been achieved by the Member concerned. Therefore, we agree with the Panel that the measures actually taken by a Member to comply with DSB recommendations and rulings, whether or not they follow the suggestions for implementation made in previous proceedings, are the subject matter of the challenge in Article 21.5 proceedings.
We consider that suggestions made by panels or the Appellate Body may, if correctly and fully implemented, lead to compliance with the DSB’s recommendations and rulings. However, full compliance with DSB rulings and WTO-consistency of the measures actually taken to comply cannot be presumed simply because a Member declares that its measures taken to comply conform to a suggestion made under Article 19.1 of the DSU. As pointed out above, Article 21.5 proceedings focus on the measure actually taken to comply, not the ways in which the Member could implement the recommendations and rulings. Following a suggestion does not guarantee substantive compliance with the recommendations and rulings by the DSB. Whether such compliance has been achieved needs to be determined through Article 21.5 proceedings. The adoption of a panel or Appellate Body report by the DSB makes the recommendations and rulings therein binding upon the parties. As noted earlier, such adoption by the DSB does not make suggestions for implementation binding upon the parties (especially, where, as in this case, the first Ecuador Article 21.5 panel made several suggestions); nor does DSB adoption mean that actions taken to implement suggestions must be presumed to be WTO-consistent or shielded from review in Article 21.5 proceedings.
Suggestions made by panels or the Appellate Body may provide useful guidance and assistance to Members and facilitate implementation of DSB recommendations and rulings, particularly in complex cases. However, the fact that a Member has chosen to follow a suggestion does not create a presumption of compliance in Article 21.5 proceedings. The fact that a Member has chosen to follow a suggestion is part of the history and background of the measure at issue in Article 21.5 proceedings, but it should not in itself pre-empt a panel’s assessment of compliance under Article 21.5. In our view, suggestions provide guidance, which is necessarily prospective in nature and cannot, therefore, take account of all circumstances in which implementation may occur.
I.0.10 US — Zeroing (EC) (Article 21.5 — EC), para. 468 back to top
In the light of [our] findings, we do not consider that the suggestion the European Communities is requesting us to make would provide useful guidance or facilitate the implementation of the recommendations and rulings of the DSB. Therefore, we decline the European Communities’ request for a suggestion under Article 19.1 of the DSU.
I.0.11 China — Raw Materials, para. 251 back to top
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
A panel is required, under Article 7 of the DSU, to examine the “matter” referred to the DSB by the complainant in the request for the establishment of a panel, and to make such findings as will assist the DSB in making recommendations. The language in a complainant’s panel request is therefore important because “a panel’s terms of reference are governed by the request for establishment of a panel”. Article 19.1 of the DSU establishes a link between a panel’s finding that “a measure is inconsistent with a covered agreement”, and its recommendation that the respondent “bring the measure into conformity”. The “measures” that may be the subject of recommendations in Article 19.1 are limited to those measures that are included within a panel’s terms of reference.
I.0.12 China — Raw Materials, paras. 254–256, 259–260 back to top
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
… China’s legislative system for the imposition of export duties comprises basic framework legislation, an implementing regulation, and specific “annual measures that set the level of duty for specific products”. … the complainants’ panel requests and subsequent arguments before the Panel reveal that the complainants brought their claims with respect to all the measures through which export duties and quotas were imposed on particular raw materials at the time of the establishment of the Panel in 2009.
Based on the foregoing, we do not consider that the Panel erred in setting out to make recommendations on the “series of measures” imposing export duties or export quotas in force at the date of the Panel’s establishment. Moreover, in the light of the Panel’s express statement that it would make recommendations on measures “in force at the date of the Panel’s establishment”, and that it would not make findings on the measures imposing specific export duty rates and quota levels for 2010, we consider that the Panel made no express recommendations regarding measures that were excluded from the Panel’s terms of reference by the complainants.
The question remains whether the recommendations that the Panel made regarding the series of measures in force in 2009 have consequences for the measures imposing specific export duty rates and quota levels for 2010, or indeed any existing or subsequent measures imposing export duties or quotas on these products.
… China appears to assume that a finding that is made with respect to a “series of measures” as it existed at the time the Panel was established cannot have consequences for measures adopted in 2010 or thereafter, through the effect of the recommendation made by the Panel or the Appellate Body after adoption by the DSB. We disagree.
Pursuant to Article 19.1 of the DSU, when a panel concludes that a measure is inconsistent with a covered agreement, it shall recommend that the Member concerned bring its measure into conformity with that agreement. While a finding by a panel concerns a measure as it existed at the time the panel was established, a recommendation is prospective in nature in the sense that it has an effect on, or consequences for, a WTO Member’s implementation obligations that arise after the adoption of a panel and/or Appellate Body report by the DSB. As the Appellate Body noted in US — Continued Zeroing, “it is not uncommon for remedies sought in WTO dispute settlement to have prospective effect, such as a finding against laws or regulations, as such, or a subsidy programme with regularly recurring payments”.
I.0.13 China — Raw Materials, paras. 261–262 back to top
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
… The object of the complainants’ challenge was the legal situation prevailing in 2009, that is, the “series of measures” pursuant to which China imposed export quotas and duties on the raw materials at issue at the time the Panel was established. … each series of measures [consists of standing measures and] also includes the specific measures imposing export duty rates or quota amounts in force at a particular time. These latter measures are, as the Panel found, of varying duration. … Against this background, we do not consider that it was necessary for the complainants to include claims with regard to the specific export duty and quota measures applied in 2010, in addition to those that were in force when the Panel was established in 2009, in order to obtain a recommendation with prospective effect.
… while the setting of export duty rates and export quotas for a particular year is clearly a distinct action, the complainants’ challenge in this case was not to specific annual export duty or quota measures in isolation, or to ongoing conduct consisting of a “chain of annually reviewed measures”. Rather, the complainants challenged China’s framework legislation, implementing regulations, and the specific measures in force at the date of the Panel’s establishment imposing export duties or export quotas on each raw material. As the Panel noted, when these measures “operate in concert to result in WTO-inconsistent [export duties or quotas], it is then that they would become prima facie WTO-inconsistent”. This being the case, the Panel rightly recommended that China bring its measures into conformity with its WTO obligations, such that the “series of measures” does not operate to bring about a WTO-inconsistent result. The fact that the Panel directed its findings and recommendations at the legal situation prevailing in 2009 does not mean that China has no compliance obligations with respect to the Panel’s findings.
I.0.14 China — Raw Materials, paras. 263–265 back to top
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
… The DSU does not specifically address whether a WTO panel may or may not make findings and recommendations with respect to a measure that expires or is repealed during the course of the panel proceedings. Panels have made findings on expired measures in some cases and declined to do so in others, depending on the particularities of the disputes before them. … In US — Upland Cotton, the Appellate Body drew a distinction between the question of whether a panel can make findings with respect to an expired measure and the question of whether an expired measure is susceptible to a recommendation under Article 19.1 of the DSU … .
… the Appellate Body indicated that the fact that a measure has expired “may affect” what recommendation a panel may make. The Appellate Body did not suggest that a panel was precluded from making a recommendation on such a measure in a particular case. In general, in cases where the measure at issue consists of a law or regulation that has been repealed during the panel proceedings, it would seem there would be no need for a panel to make a recommendation in order to resolve the dispute. The same considerations do not apply, in our view, when a challenge is brought against a group or “series of measures” comprised of basic framework legislation and implementing regulations, which have not expired, and specific measures imposing export duty rates or export quota amounts for particular products on an annual or time-bound basis, as is the case here. The absence of a recommendation in such a case would effectively mean that a finding of inconsistency involving such measures would not result in implementation obligations for a responding member, and in that sense would merely be declaratory. This cannot be the case.
… In our view, in order to “secure a positive solution to the dispute” and to make “sufficiently precise recommendations and rulings so as to allow for prompt compliance”, it was appropriate for the Panel in this case to have recommended that the DSB request China “to bring its measures into conformity with its WTO obligations such that the ‘series of measures’ does not operate to bring about a WTO-inconsistent result”.
383. In the light of the above, we need not decide here whether the requirements of Articles 11 and 12.7 are applicable to a panel’s consideration of a request for a suggestion pursuant to Article 19.1 of the DSU. back to text
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