(a) Background to Brazil's motion: the consultations, "transaction-specific" information and confidentiality

4.84 Canada responds that it began providing information to Brazil long before formal WTO consultations were requested in this case. According to Canada, Brazil raised concerns about "secret" accounts and "vast arrays of subsidies" in the course of consultations and negotiations in the case launched by Canada in 1996, Brazil - Export Financing Programme for Aircraft. Canada states that at the time it pointed out that much of the information requested by Brazil was public; and that it nevertheless provided considerable public documentation to Brazil. For Canada, the questions posed by Brazil throughout the negotiations in the Brazil - Export Financing Programme for Aircraft case and then during the consultations in this case, indicated that Brazil was already in possession of significant detailed information.

4.85 With respect to "transaction-specific" information requested by Brazil in its letter, Canada states that it repeatedly noted during consultations the difficulty of responding to a shotgun request for documents on "all transactions" relating to the mentioned programmes. Canada asserts that it asked Brazil to narrow its request to specific transactions and to identify its claim in respect of such transactions so that it might be made aware of the case against it and so that it might provide Brazil with more information. According to Canada, no such specificity was forthcoming.

4.86 Further, Canada argues, throughout the consultations and negotiations, Canada underlined the commercial confidentiality of the "transaction-specific" information that might be covered by Brazil's shotgun requests. In Canada's view, its efforts in good faith to protect the interests of private enterprises not parties to this dispute were fully consistent with the principles underlying the DSU.⁶¹ Canada maintains that its proposal on procedures governing confidential business information (paras. 4.152- 4.161) is intended to enable all necessary disclosure while protecting the interests of private persons not party to this dispute.

(b) Brazil's request is inconsistent with WTO law and practice

4.87 Canada argues that Brazil's request, without having first presented a prima facie case before the Panel, is inconsistent with the WTO Agreement and international law and practice. Canada notes the statement by the Appellate Body in India- Pharmaceuticals II⁶² relied upon by Brazil. According to Canada, in that case, the Appellate Body was discussing the panel's error in deciding on a US claim that was not within the panel's terms of reference. There, the United States alleged that it had not made the relevant claim in its panel request because it had no way of knowing that India would rely on a particular defence not disclosed to the United States during consultations. Canada states that the Appellate Body found that, nevertheless, there was no basis in the DSU for a complaining party to make an additional claim, outside the scope of the panel's terms of reference.⁶³

4.88 Canada notes that the Appellate Body then commented on the importance of parties engaged in dispute settlement being "...fully forthcoming from the very beginning, both as to the claims involved in a dispute, and as to the facts relating to those claims,"⁶⁴ then described the importance of meeting the demands of due process in consultations, and then stated that:

4.89 For Canada, it is well-established practice for a WTO panel, having received the first submissions and evidence of the parties and having heard their first substantive oral arguments, to ask the parties for information additional to that submitted by the parties. In Canada's view, there is also precedent for a party to the dispute to ask a panel to seek further information at this stage, and for a panel to reject that request if the panel considers the information requested is irrelevant or unnecessary.⁶⁶

4.90 According to Canada, there is no support in the statement of the Appellate Body, however, or indeed in the DSU, WTO practice, or international law and practice for turning the panel process into something akin to a commission of inquiry;⁶⁷ there is, more important, no provision in the DSU and no precedent in GATT or WTO jurisprudence for subjecting a responding party to a discovery process.⁶⁸

4.91 In this respect Canada notes the ruling of the panel in Indonesia - Automobiles concerning the request of Indonesia "to require the United States to submit its confidential data immediately:"⁶⁹

4.92 For Canada, "additional fact-finding", if a panel deems it necessary, is precisely that: it is additional to facts presented in support of a particular claim. In Canada's view, there is neither precedent in WTO practice nor provision in the DSU for a panel to engage in fact-finding when it has not had an opportunity to examine the evidence submitted by the parties in their first submissions and the relevance of that evidence to or support for the claims of the disputing parties, or to request that a party submit information in respect of defences it has not yet raised in response to claims that have yet to be made out.

4.93 Canada asserts that it cannot be expected to provide the information requested by Brazil when it does not yet know what the scope of Brazil's claims is, when Canada has not yet put its defence before the Panel, when it is impossible for the Panel to determine what are the "pertinent facts" given the lack of specificity of Brazil's request for a panel and Brazil's subsequent motion for discovery, and when the Panel has not had the chance to examine whether Brazil has a prima facie case that would require Canada to present any evidence in its own defence.

4.94 Canada notes that it is the responsibility of Brazil to present its case; it must adduce "'evidence sufficient to raise a presumption'"⁷¹ that its claims are true. In Canada's view, if Brazil does not have such evidence, there is no obligation on the part of Canada to provide additional information: Brazil's claims must fail; if, on the other hand, Brazil has such information, then the "'burden shifts to the other party, who will fail unless it adduces sufficient evidence to rebut the presumption.'"⁷² In this regard, Canada quotes Dr. Mojtaba Kazazi:

4.95 Canada argues that the duty to cooperate in no way relieves the claimant of its burden of proof, nor does it allow a claimant to embark upon a broad and unfounded request for information. In this regard, Canada argues that the situation in the Argentina - Footwear case is not even remotely similar to the situation in the present case. Canada notes that in its report, that Panel considered evidence based on specific transactions that was adduced by the United States. In particular, the United States submitted copies of invoices of shipments to support its arguments. Argentina challenged the validity of these documents, and argued that the evidence submitted was not the best evidence. ⁷³

4.96 Canada also notes that the Panel observed that the United States had tried to obtain the original copies that were in Argentina's possession. The Panel then noted the duty to collaborate and stated that in the absence of the originals, and after careful examination and consideration of the evidence, it considered that the copies submitted by the United States constituted sufficient evidence to allow it to make conclusions.⁷⁴ The Panel stated that the obligation to provide it with relevant documents which are in its sole possession does not arise until the claimant has actually produced some prima facie evidence in support of its case. In Canada's view, Brazil has not done so. According to Canada, vague or ambiguous quotations presented out of context and jumbled to produce a misleading impression of what the person cited actually meant, does not constitute evidence. Nor, in Canada's view, is there precedent or place for wide-ranging discovery in the WTO.

4.97 For Canada, it is difficult to see how the WTO dispute settlement mechanism could work if even before a complainant has shown that it has a prima facie case, it could force the responding party to furnish it with evidence in the course of a wide-ranging and apparently limitless fishing expedition. For Canada, this would open the door to endless intrusion in confidential records of WTO Members, such as tax files, banking and financial records, regulatory proceedings and a host of other governmental activities. Canada asserts that this is not the way the WTO functions.

4.98 Canada argues that it has nothing to hide, and is fully prepared to cooperate in the normal way of WTO proceedings, and acknowledges the duty of collaboration as discussed and applied by the panel in Argentina - Footwear:

4.99 With respect to any attempt to import discovery into the WTO process, Canada notes and agrees with the observations of the panel in Argentina - Footwear,⁷⁶ referring to the works of Dr. Mojtaba Kazazi, on the burden of proof before international tribunals:

4.103 Accordingly, for Canada, this request by Brazil confirms that Brazil has yet to state its case against Canada. In Canada's view, the Panel should not assist a complaining party to find or develop a case not made.

3. Response of Brazil

4.104 Brazil counters by arguing that it has encountered significant difficulty in obtaining information about the various Canadian export subsidy programmes at issue. According to Brazil, citing confidentiality, Canada has declined to provide transaction-specific information concerning the operations of EDC, the Canada Account, Technology Partnerships Canada, the Canada-Québec Subsidiary Agreements on Industrial Development, and the Société de Développement Industriel du Québec, and has not even notified EDC or Canada Account funding, as required by Article 25 of the SCM Agreement, to enable other Members like Brazil "to evaluate the trade effects and to understand the operation of" support programmes provided thereunder. According to Brazil, Canada's notifications pursuant to Article 25 of the SCM Agreement fail in some instances to provide any description of these programmes.

4.105 Brazil appreciates concerns regarding the confidentiality of proprietary business information, but states that in this case Canada's posture seems to be, "Our officials do not mean what they say when testifying before Parliament or when they issue official reports or when they speak to industry groups. We cannot tell you why, but despite what these officials might say, we are acting in conformity with the terms of the SCM Agreement. Trust us."

4.106 Brazil acknowledges that it bears the burden of proving its affirmative case, but states that at the same time Canada bears the burden of collaboration, a concept well-founded in public international law and in WTO law. In addition to the obligation of Members to act in good faith, Brazil recalls the Appellate Body's statement in India - Patent Protection for Pharmaceutical and Agricultural Chemical Products, that all parties engaged in dispute settlement "'must be fully forthcoming from the very beginning,'" and that this duty includes the requirement that facts "'must be disclosed freely.'" In Brazil's view, facts have not been disclosed freely by Canada in this case.

4.107 In Brazil's view, particularly where, as here, concerns regarding confidentiality hinder access by a complaining Party to information peculiarly within the control of a responding Party, that responding Party's burden to produce evidence in good faith to the Panel is considerable. Brazil argues that where a party fails to provide information peculiarly within its control, or where, in the words of the Appellate Body in India Pharmaceuticals, "in the aftermath of consultations, any party believes that all the pertinent facts relating to a claim are, for any reason, not before the panel, then that party should ask the panel . . . to engage in additional fact-finding."

4.108 Regarding Canada's contention that Brazil's request is not appropriate until the Panel has received the first submissions and heard the first substantive arguments of the Parties, Brazil states that it is aware of no such limitation, noting that the Appellate Body, in India Pharmaceuticals stated only that such a request should be made in the "'aftermath'" of consultations, and stating that Brazil made its request in the aftermath of consultations.

4.109 Brazil also states that even if Canada is correct, as of receipt of the first submissions of the parties and the hearing of the first substantive arguments, it is time for Canada, even by its own terms, to fulfil its obligation to cooperate with the Panel and Brazil in producing all relevant information.

4.110 Regarding Canada's argument that the Panel's authority to seek information is dependent upon presentation by Brazil of its prima facie case, Brazil finds two problems. First, Brazil argues, Canada confuses the prerequisites for the Panel to engage in additional fact-finding with the prerequisites for the Panel ultimately to decide that a complainant has satisfied its burden of proof, which are not the same thing. Second, Brazil asserts that in making its submission of approximately 1,600 pages of supporting documentation and two expert reports, it has presented a prima facie case.

4.111 As regards Canada's concern over the breadth of Brazil's request, Brazil does not view its request as a fishing expedition, but as a proper attempt to obtain evidence relevant to the issues before this Panel. Brazil submits that to the extent Canada does not produce, in a timely fashion, necessary information in its possession, the Panel should draw the appropriate adverse inferences.

To continue with Rebuttal of Canada

⁶¹ The impact of a particular interpretation of Article 6.10 on private persons was an element for consideration by the Appellate Body in United States - Restrictions on Imports of Cotton and Man-made Fibre Underwear (Cotton Underwear), WT/DS24/AB/R, Report of the Appellate Body Adopted on 25 February 1997, at 15.

⁶² India - Patent Protection for Pharmaceutical and Agricultural Chemical Products (India - Pharmaceuticals II), WT/DS50/AB/R, Report of the Appellate Body adopted on 16 January 1998.

⁶³ Id.. at para. 93.

⁶⁴ Id.. at para. 94.

⁶⁵ Id.. at para. 94.

⁶⁶ See, for example, European Communities - Measures Concerning Meat and Meat Products (Hormones), WT/DS48/R/CAN, Report of the Panel adopted on 13 February 1998, at paras. 8.5 and 8.11.

⁶⁷ J.G. Merrills states that 'inquiry' can be defined as: "a specific institutional arrangement which states may select in preference to arbitration or other techniques, because they desire to have some disputed issue independently investigated." [emphasis added] See J.G. Merrills, International Dispute Settlement, 2nd ed. (Cambridge: Grotius Publications Ltd., 1991), at 43. (TAB A 23 October 1998 preliminary submission of Canada( According to Merrills, commissions of inquiry were introduced by the Hague Convention for the Pacific Settlement of International Disputes, 1899. Among the limitations on their mandate was that they should handle only questions of fact and not of law, and that their findings should not be seen as obligatory. See Id.. at 44. (TAB A October 1998 preliminary submission of Canada ( This is manifestly at odds with the objectives and the nature of WTO dispute settlement.

⁶⁸ The basic instruments to ensure that an arbitral tribunal has the authority to order a discovery of evidence are "through certain specific stipulations." See V.S. Mani, International Adjudication: Procedural Aspects, (The Hague: Martinus Nijhoff Publishers, 1980), at 212. (TAB B October 1998 preliminary submission of Canada ( The power to order evidentiary discovery is therefore not inherent in arbitral tribunals.

For example, evidentiary discovery has been explicitly provided for in the Statute of the International Court of Justice. [Annex to the Charter of the United Nations, 26 June 1945, 15 U.N.C.I.O. 335 at 355 (entered into force 24 October 1945)] Article 49 provides that "[t]he Court may, even before the hearing begins, call upon the agents to produce any document or to supply any explanations. Formal note shall be taken of any refusal." (TAB C October 1998 preliminary submission of Canada ( The Optional Rules for Arbitrating Disputes between Two States of the Permanent Court of Arbitration (TAB D October 1998 preliminary submission of Canada ( provides, in its Article 24.3, that:

The specific grants of authority noted above may be contrasted with Article 13 of the DSU, which provides that:

⁶⁹ Indonesia - Certain Measures Affecting the Automobile Industry (Indonesia - Automobiles), Report of the Panel adopted on 23 July 1998, at para. 14.6.

⁷⁰ Id.. at para. 14.7.

⁷¹ United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India (Shirts and Blouses), WT/DS33/AB/R, Report of the Appellate Body adopted on 23 May 1997, at 14.

⁷² Id..

⁷³ Argentina - Footwear at paras. 6.52-6.53

⁷⁴ Argentina - Footwear at para. 6.58

⁷⁵ Argentina - Footwear, at para. 6.40.

⁷⁶ Argentina - Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/R, Report of the Panel adopted as modified by the Appellate Body on 22 April 1998.

⁷⁷ Id.., at para 6.40.