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ARGENTINA - DEFINITIVE SAFEGUARD MEASURE ON
V. ARGUMENTS OF THE THIRD PARTIES 5.1 From the third parties in these proceedings, i.e. the European Communities, Paraguay and the United States, only the European Communities and the United States filed their comments within the 20 June 2002 deadline and presented Oral Statements during the third party session.
5.2 The European Communities recalls that domestic authorities are under a duty to evaluate all facts before them or that should have been before them in accordance with the WTO safeguards regime.374 The European Communities submits that this broad obligation of the domestic authorities is paralleled by the review that panels are called upon to exercise with respect to safeguard measures.375 376 The European Communities considers that parties to a panel proceeding are neither bound by nor limited to the arguments (whether factual or legal) that they may have developed before the competent authorities during domestic proceedings (nor a fortiori are such parties foreclosed from bringing arguments if they failed to do so before domestic authorities)377, the only limit being evidence that was not in existence at the time the domestic authorities made their decision.378 379 The European Communities explains that this logically flows from the fact that the respective focus and objectives of the domestic and the panel proceedings may be different and from the fact that the panels' mandate under Article 11 of the DSU is independent of that of domestic authorities. Accordingly, in the European Communities' view, the Panel is not limited in its review by the "record of investigation".380 5.3 In the European Communities' view, the safeguard mechanism is an "extraordinary remedy"381 that should only be relied upon in emergency situations, as indicated by the title of Article XIX of the GATT 1994. It should only be invoked when all the strict requirements which are set out in WTO law have been fulfilled, in particular because the reliance on the safeguard mechanism interferes with the fair conduct of trade performed by competitive exporters.382 5.4 With regard to the meaning of the term "unforeseen developments", the European Communities recalls the established interpretation of Article XIX:1(a) of the GATT 1994 that "unforeseen developments" are "circumstances which must be demonstrated as a matter of fact in order for a safeguard measure to be applied consistently with the provisions of Article XIX of the GATT 1994"383, and that "this demonstration must be made before the safeguard measure is applied" and "must also feature in the same report of the competent authorities" in which the conditions for the adoption of a measure are accounted for. The European Communities states that thus, the competent authorities' report must provide an explanation as to why certain changes in circumstances could be regarded as "unforeseen developments".384 5.5 In view of the above, the European Communities contends that the safeguard measure taken by Argentina does not include any "demonstration as a matter of fact" that certain circumstances constituted "unforeseen developments" at the time the competent authorities made their decisions. Furthermore, the European Communities submits that no element mentioned in Argentina's Resolution and technical report (or recalled in Argentina's first written submission) can indeed be termed as an "unforeseen development" within the meaning of Article XIX:1(a) of GATT 1994.385 5.6 As regards Argentina's reference386 to an increase in imports of particular magnitude in the most recent period investigated as an element relevant to fulfilling the "unforeseen development" precondition, the European Communities considers that while a surge in imports may "result" from "unforeseen developments", such increase cannot itself be an "unforeseen development" within the meaning of Article XIX:1(a) of the GATT 1994.387 5.7 The European Communities further points out that assuming arguendo that an increase in imports could be a relevant factor in deciding whether the "unforeseen developments" condition is met, it would certainly not be so in the present case.388 In this regard, the European Communities states that the Argentine authorities themselves acknowledge that prior to the import years considered, imports had decreased dramatically as a result of the climatic conditions in the countries accounting for the majority of the exports.389 The European Communities argues that the return to normal climate conditions and thus to normal production and international trade flows can only be a "foreseen" and "expected"390 development.391 Lastly, the European Communities declares that more generally, as acknowledged by the Argentine authorities, agricultural imports are in fact characterized by a cyclical character, due to the inherent characteristics of agricultural production.392 5.8 As regards the other alleged unforeseen developments accounted for in the documents of the Argentine competent authorities, such as the production and market trends worldwide or in specific parts of the foreign markets393, the European Communities argues that there is no account of why these events were "unexpected" nor how they resulted in the imports increase specifically on the Argentine market during the reference period.394 The European Communities argues that the lack of such analysis and demonstration of "unforeseen developments" is already sufficient to establish that the safeguard measure under review is not consistent with Argentina's WTO obligations, and thus devoid of legal basis.395 5.9 In fulfilling the requirement relating to "increased imports" set out in Article 2.1 of the Agreement on Safeguards, the European Communities argues that three fundamental aspects must be addressed by the competent domestic authorities, and thus reviewed by panels. The first one is the reference period to be used for analysing import trends; the second is the assessment of whether the rate and amount of imports over the reference period were such as to fulfil Article 2.1 standards; and the third one, is the provision of an overall adequate explanation, in the safeguard measure or underlying report, of how the facts as a whole support a finding of "increased imports" within the meaning of Article 2.1.396 The European Communities considers that the Argentine authorities' investigation and conclusions are wanting in all three respects. 5.10 As to the reference period, the European Communities recalls that the "data relating to the most recent past will provide competent authorities with an essential, and, usually, the most reliable, basis".397 The European Communities submits that the period for observing increased imports must be the recent past398, so that imports must continue to increase or be very high in the latest period for a measure to be taken in accordance with Article 2.1, and that WTO practice has focused on the last one to three years (calendar years or 12-month periods) to be as close as possible, depending on data availability, to the date of application of the measure.399 5.11 Furthermore, the European Communities notes that the increase in imports must be assessed either in absolute or in relative terms, but in each case both through an end-point-to-end-point analysis and by examining the intervening trends between the end points of the reference period.400 The European Communities argues that the Argentine authorities even failed to set out clearly what period they actually used for their assessment of the import trends, nor were they consistent in referring to import data periods, as they should have been.401 402 5.12 As to the legal standard set out in Article 2.1 of the Agreement on Safeguards, the European Communities recalls the emphasis of the Appellate Body that such provision refers to products "being imported � in such increased quantities and under such conditions". The European Communities takes the view that the competent authorities must show that a recent, sudden, sharp and significant increase in imports, both quantitatively and qualitatively, continues until the very recent past.403 404 5.13 The European Communities points out that the Argentine authorities themselves and the Argentine import statistical data confirm that the increase in imports observed in the period 1999/2000 did not bring import levels back to those in the period (1996) preceding the exceptional and disastrous climatic conditions in the main exporting country (1997).405 In this regard, the European Communities argues that it fails to see how this increase may be qualified as "significant", or "sharp", quantitatively and qualitatively, or anyway "so as to cause or threaten to cause serious injury to the domestic industry".406 5.14 The European Communities considers that the most recent data should not be considered in isolation from the data pertaining to the entire period of investigation, if that period was longer. It refers to the Appellate Body Report in US - Lamb where it was stated that "[i]f the most recent data is evaluated in isolation, the resulting picture of the domestic industry may be quite misleading".407 In view of the European Communities, this caveat was added expressly with a view to avoiding that a temporary downturn that may well be a part of the normal cycle of the domestic industry be misunderstood as a situation justifying safeguard action.408 The European Communities notes that it has to be read in the light of the Appellate Body's characterization of safeguard action as an "extraordinary remedy".409 In the view of the European Communities, it should by no means be read as a relaxation of the standards of the Agreement on Safeguards.410 5.15 With respect to the adequate and reasoned explanation, notwithstanding the fact that there may have been a "recent" import increase, the European Communities asserts that nowhere do the Argentine authorities seem to explain why the fact that this increase simply restored historical import trends after an exceptionally low period still allows to conclude that the increase was "sharp", "significant" or "so as to cause or threaten serious injury", despite the Appellate Body's finding that competent authorities should address the complexities of each case, and in particular respond to other plausible explanation of data.411 5.16 The European Communities contends that the domestic authorities' independent duty to investigate casts doubts on the United States' suggestion that such authorities can simply consider "current facts", coupled with no indication on the record that such facts will change in the imminent future - as valuable ex post support for a finding of threat of serious injury.412 In its view, this would not be a demonstration "on the basis of objective evidence," as required by Article 4.2(b) of the Agreement on Safeguards, but an "allegation and conjecture" within the meaning of Article 4.1(b).413 5.17 According to the European Communities, the Appellate Body has clarified that the domestic authorities have a duty to demonstrate, at the time they take a safeguard measure, and through a reasoned and adequate explanation (that is, in their report or equivalent), that the legal conditions for the adoption of such measure are met. Additionally, it argues, in US - Lamb the Appellate Body pointed out that the materialization of the threat of serious injury must be imminent and highly likely.414 This imminence and likelihood must also be positively demonstrated by the domestic authorities. The European Communities argues that, in reviewing the competent authorities' findings, panels must be mindful of the definition of "threat of serious injury" in the Agreement on Safeguards and of the very high standard implied by the relevant terms.415 416 5.18 With regard to Article 5.1 of the Agreement on Safeguards, the European Communities takes the view that, if a WTO Member fails to comply with the "non-attribution" obligation set out in Article 4.2(b) of the Agreement on Safeguards, there is a presumption that it has also failed to comply with its obligation under Article 5.1 not to apply a measure beyond the permissible extent. The European Communities recalls the finding of the Appellate Body in US - Line Pipe417 where it concluded that, by establishing that the respondent had violated Article 4.2(b) of the Agreement on Safeguards, the claimant had made a prima facie case that the application of the measure at issue was not limited to the extent permissible under Article 5.1.418
5.19 The United States submits that Article XIX of the GATT 1994 does not require a competent authority to demonstrate a "cause-effect" relationship between unforeseen developments and increased imports. Following what the Panel found in US - Lamb, the United States contends that there is no textual basis in Article XIX for a "two-step causation approach" that would require a Member to demonstrate that unforeseen developments caused an increase in imports that in turn caused serious injury or threat.419 420 5.20 The United States considers that rather, as the US - Lamb Panel stated, the term "unforeseen developments" in Article XIX is grammatically linked to both the terms, "in such increased quantities" and "under such conditions".421 Therefore, in view of the United States, unforeseen developments can result in increased imports, or in a change in the "conditions" that apply to such imports, or both. Indeed, as the phrasing of Article XIX suggests, there may be an interplay between the conditions under which increased imports affect a domestic industry and the quantity of the increase that will cause serious injury.422 5.21 Thus, the United States concludes that Article XIX does not require a competent authority to demonstrate that unforeseen developments "caused" an increase in imports. Rather, the United States considers that it may be enough for the authority simply to demonstrate that unforeseen developments have resulted in increased imports entering "under such conditions" so as to cause serious injury or threat thereof.423 5.22 The United States submits that a contracting party should generally examine relevant data from its entire standard review period to provide objectivity in its analyses of import volume. The United States contends that the Agreement on Safeguards does not establish any particular methodology or analytic framework for evaluating increased imports. It takes the view that Article 2.1 merely states that a competent authority must determine "pursuant to" the other provisions of the Agreement on Safeguards that imports are taking place "in such increased quantities, absolute or relative to domestic production . . . as to cause or threaten to cause serious injury to the domestic industry". The United States adds that Article 4.2(a), in turn, simply states that competent authorities shall evaluate all relevant factors of an "objective and quantifiable nature" having a bearing on the situation of the industry, including "the rate and amount of increase in imports of the product concerned in absolute and relative terms".424 5.23 However, the United States recalls the Appellate Body Report on US - Lamb, where it was stated that a competent authority "should not consider [the most recent] data in isolation from the data pertaining to the entire period of investigation", and that "in conducting their evaluation under Article 4.2(a), competent authorities cannot rely exclusively on data from the most recent past, but must assess that data in the context of the data for the entire investigative period".425 Thus, the United States concludes that these statements support the conclusion that a competent authority should generally examine all of the data that it has collected for the entire investigative period, provided that the data is reliable and useable and that there are no circumstances indicating that examination of a different time-period would be appropriate.426 5.24 The United States submits that the Panel should decline to consider extra-record evidence that was not before the competent authority. In challenging Argentina's analysis of increased imports, the United States notes that Chile cites tables containing data on apparent consumption of preserved peaches for the years 1994 to 1996 drawn from a study that CNCE prepared in 1998, apparently for a different investigation.427 5.25 The United States argues that if the study was not part of the record in the challenged investigation, the Panel should disregard it. The United States considers that a fundamental aspect of the standard of review of competent authorities' determinations in safeguard investigations is that the review of those determinations be based on the record that was before the competent authorities, and not on extra-record evidence. The United States recalls the Panel decision in US - Wheat Gluten, where it was concluded that "it is for the USITC to determine how to collect and evaluate data and how to assess and weigh the relevant factors in making determinations of serious injury and causation." That Panel stressed that "[i]t is not our role to collect new data, or to consider evidence which could have been presented to the USITC by interested parties in the investigation, but was not."428 The United States also recalls the conclusion of the Panel in US - Hot-Rolled Steel concerning extra-record information based on its analysis of Article 11 of the DSU. The United States submits that if a panel considers new information that was not before the competent authority, it would be weighing these new facts against the evidence already on the record. The United States submits that the Appellate Body has found that panels are not entitled to conduct such de novo reviews.429 5.26 The United States submits that current facts may support threat of serious injury determinations. The United States notes that Chile argues that the CNCE impermissibly based its finding of threat of serious injury on the fact that there were no indications that current international market conditions would change in the imminent future, and that the CNCE's threat analysis was based on conjecture or remote possibility and not on facts.430 The United States recalls the Appellate Body has analysed threat of serious injury as encompassing a lower threshold than serious injury and has found that there is often "a continuous progression of injurious effects eventually rising and culminating in what can be determined to be 'serious injury'," since "[s]erious injury does not generally occur suddenly."431 The United States points out that the Appellate Body concluded that, in drafting the Agreement on Safeguards, Members defined threat of serious injury separately from serious injury so that an importing Member could act sooner to take preventive action when increased imports posed a threat of serious injury.432 433 The United States submits that nothing in the Agreement on Safeguards prohibits a competent authority from basing a threat of serious injury determination on current facts which, if continued, will result in serious injury, coupled with a finding that nothing in the record indicates that such facts will change in the imminent future.434 5.27 The United States is of the view that there is no basis for "presuming" a breach of Article 5.1. The United States disagrees with Chile's argument that a Member that establishes an inconsistency with Article 4.2(b) of the Agreement on Safeguards also establishes a presumption of inconsistency with Article 5.1 of the Agreement on Safeguards. In the view of the United States, there is no reference to such a presumption in Article 4.2(b) or Article 5.1, and there is no basis for reading one into the text.435 The United States points out that the Appellate Body has made it clear on numerous occasions that the rights and obligations of WTO Members are to be found in the actual text of the WTO Agreement, and not in layers of interpretation that are read into that text.436 437 In the United States' view, the Appellate Body's guidance is particularly apt in this case, because other provisions of the WTO Agreements do contain provisions that establish presumptions.438 According to the United States, these excerpts demonstrate that when the WTO drafters intended to create presumptions in the agreements, they did so explicitly.439 5.28 The United States observes that Chile's challenge to the extent of application of the measure in its first written submission is limited to just two paragraphs. The United States notes that Chile asserts that the measure imposed an extra 70 percent on the customs duties applicable to Chilean imports, and then asserts that the duty amounted to an import prohibition.440 5.29 The United States questions whether Chile's arguments are sufficient to meet its initial burden of making a prima facie case. For example, the United States contends that merely noting that imports stopped after the safeguard measure was imposed does not necessarily prove that the safeguard measure was responsible.441 In the view of the United States, Chile's arguments fail to address the central issue, which is whether a prohibitive tariff (assuming the tariff was prohibitive) went beyond what was necessary under the facts of this particular case. The United States further adds that depending on the facts underlying a particular safeguard action, it is possible that such an approach would be appropriate. The United States argues that Chile has not addressed this issue.442 5.30 With regard to increased imports and serious injury or threat, the United States refers to Chile's first written submission where it stated that there can be no threat of serious injury if there is no increase in imports.443 The United States considers that under Article 2.1 of the Agreement on Safeguards, a Member may apply a safeguard measure only if increased imports are causing or threatening to cause serious injury to a domestic industry. Thus, the United States concludes that there must be a causal link between increased imports on the one hand, and serious injury or threat on the other, before a Member would be justified in applying a safeguard measure; and that both conditions must be present.444 5.31 However, the United States argues it does not mean, that there must be increased imports for there to be serious injury or threat. As a factual matter, the United States finds it is possible for an industry to encounter serious injury or a threat of serious injury even in the absence of increased imports. It adds that the latter is not a necessary component of the former.445 Finally, the United States concludes that a Member would not, however, be justified in applying a safeguard measure in such a case.446 5.32 The United States takes the view that the Agreement on Safeguards does not mandate a three-stage approach to non-attribution. It notes that Chile argues that "[f]or an analysis of causal link to be consistent with Articles 2 and 4.2(b) of the [Agreement], the methodology adopted by the investigating authorities must consist of a three-stage approach that complies with the so-called principle of non-attribution of injurious effects of other factors."447 According to the United States, the Appellate Body stated that the three steps describe "a logical process for complying with the obligations relating to causation" in Article 4.2(b), not legal "tests" mandated by Agreement on Safeguards. The United States further notes that the Appellate Body stated that it was not imperative that each step "be the subject of a separate finding or a reasoned conclusion by the competent authorities."448 The United States recalls that the Appellate Body has also noted that the Agreement on Safeguards does not specify any particular method for separating the effects of increased imports and the effects of other causal factors.449 5.33 The United States contends that the Agreement on Safeguards does not require competent authorities to demonstrate that imports alone caused a degree of injury that is "serious". The United States notes that Chile argues that Argentina failed to demonstrate that the threat of injury from increased imports alone reached the threshold of "serious" injury. In the United States' opinion, Article 4.2(b) does not require a competent authority to demonstrate that imports, standing alone, caused serious injury.450 5.34 In this regard, the United States recalls US - Wheat Gluten , where the Appellate Body made clear that increased imports need not be the sole cause of the injury.451 The United States explains that similarly, in US - Lamb, the Appellate Body stated that the Agreement on Safeguards "does not require that increased imports be 'sufficient' to cause, or threaten to cause, serious injury. Nor does the Agreement require that increased imports 'alone' be capable of causing, or threatening to cause, serious injury."452 Finally, the United States notes that in US - Line Pipe, the Appellate Body explained that "to meet the causation requirement in Article 4.2(b), it is not necessary to show the increased imports alone - on their own - must be capable of causing serious injury".453 454 VI. INTERIM REVIEW 6.1 The Panel issued the draft descriptive (factual and argument) sections of its report to the parties on 24 October 2002 in accordance with Article 15.1 of the DSU. Both parties offered written comments on the draft descriptive sections on 7 November 2002. The Panel noted all these comments and amended the draft descriptive part where appropriate. The Panel issued its interim report to the parties on 21 November 2002 in accordance with Article 15.2 of the DSU. In a letter dated 28 November 2002, Argentina requested that the Panel review precise aspects of the interim report. Chile did not have any comments on the interim report. Neither of the parties requested an interim review meeting. On 5 December 2002, Chile provided written comments on Argentina's comments on the interim report, as permitted by the Panel's working procedures, in which it asked the Panel to reject all Argentina's comments and not to modify its findings. The Panel carefully reviewed the arguments made, and addresses them below, in accordance with Article 15.3 of the DSU.455 6.2 Argentina commented on paragraphs 7.44 to 7.82 of the interim report456 and requested that the Panel amend its finding regarding the increase in imports in paragraph 7.82. Argentina argued that the most significant analysis of the trend in imports should be the analysis covering the most recent period. It cited in support passages from Appellate Body reports which we quoted at paragraphs 7.51, 7.62 and 7.64 of our report. Chile replied that Argentina had not rebutted the Panel's findings in paragraphs 7.54, 7.55 and 7.64, and that the passage quoted at paragraph 7.62 of this report had to be read in conjunction with the passage quoted at paragraph 7.64. The Panel considers that it has dealt sufficiently with Argentina's argument in paragraphs 7.52 to 7.54. Moreover, the passage quoted in paragraph 7.64 itself explains that the most recent data should not be considered in isolation. The Panel has explained in paragraphs 7.65 to 7.67 why it believes that the competent authorities isolated the most recent data. 6.3 Argentina argued that the competent authorities could not have acted wrongly when they found an increase in absolute terms and acknowledged the earlier decrease in imports and sensitivity of the figures for the base year, as noted by the Panel in paragraphs 7.56, 7.58 and 7.61, given that the investigating authority was empowered to evaluate all this information within its sphere of competence. Chile replied that it was insufficient to acknowledge facts without explaining them adequately. The Panel considers that it explained in paragraph 7.61 why it was insufficient for the competent authorities merely to acknowledge these facts. 6.4 Argentina and Chile applied their respective comments above to the analysis of imports in relative terms. The Panel considers that, to the extent that some of the referenced paragraphs in the report apply to that analysis, the Panel's above discussion also applies to these comments. For all of the above reasons, the Panel declines to amend the paragraphs on which Argentina commented or its finding in paragraph 7.82. 6.5 Argentina commented on paragraphs 7.97 to 7.99 on evaluation of capacity utilization and requested that the Panel amend its finding in paragraph 7.99. Argentina argued that the Panel established an artificial distinction between what is considered in an investigation and the concept of evaluation under Article 4.2(a). It argued that the investigation of installed capacity was sufficient to constitute an evaluation as a formal matter, even if it was not specifically mentioned in the joint opinion of the CNCE directors who voted in favour of the measure. It argued that the outcome of the investigation may have led the CNCE to give more or less weight to capacity utilization in its evaluation of the situation of the domestic industry and that, in making an adverse finding, the Panel was substituting itself for the CNCE. Furthermore, the technical report was available to the CNCE directors when they reached their decision regarding the situation of the industry. Chile replied that Article 4.2(a) requires that the competent authorities do more than conduct an investigation and record the results, but rather evaluate and analyze the results as well as provide a reasoned and adequate explanation as to how they support their determination. Chile said that there was no evaluation of capacity utilization at all by the CNCE directors nor any explicit establishment of this factor so as to support the determination of threat of serious injury. Chile argued that Argentina had indicated in its first written submission and its answer to a question posed by the Panel that the ones that should evaluate and analyse the information compiled in a technical report were not the investigating authorities but the CNCE Directors, that is to say, the ones making the various determinations. 6.6 The Panel observes that in paragraph 7.4 of its report it noted Argentina's own explanation of the technical report, which it had provided in response to questions 1 to 3 posed by the Panel. That explanation was that the "technical report contains all of the objective data and information gathered during the investigation". The Panel noted in paragraph 7.5 that the competent authorities' operative conclusion and the supporting reasoning appeared in the joint opinion. For this reason, in accordance with its approach set out in paragraph 7.6, the Panel looked first at the joint opinion for evaluation of all relevant factors, as supplemented by the data contained in the technical report. The Panel noted in paragraph 7.96 that the competent authorities have a duty under Article 4.2(a) to evaluate, at a minimum, each of the factors listed in that paragraph, and in paragraph 7.93 it recalled the appropriate standard of review. The Panel explained in paragraph 7.98 that it saw nothing on the record that showed that the competent authorities conducted an evaluation of this factor as a formal matter. The Panel agrees with Argentina, in principle, that the outcome of the investigation may have led the CNCE to give more or less weight to capacity utilization in its evaluation of the situation of the domestic industry. However, in this case, the CNCE directors made no comment on the rate of capacity utilization itself, not even to say that they considered it irrelevant. The technical team made no comment on its own account, but only reported what the applicant had said - which was not borne out by the 2000 figure estimated by the technical team itself. As a result, the Panel cannot glean any idea as to what weight the competent authorities gave to the data which had been collected on capacity utilization nor, in fact, whether they turned their minds to it at all. If the Panel cannot be sure that the competent authorities even thought about the meaning of the data, it cannot find that there was an evaluation of this factor. If there was no evaluation, there is no need to continue and ask whether the competent authorities evaluated the bearing of capacity utilization on the situation of the domestic industry, nor whether the competent authorities provided a reasoned and adequate explanation as to how the facts relating to capacity utilization supported their determination of a threat of serious injury. Therefore, the Panel declines to amend its finding in paragraph 7.99. However, the Panel has added a footnote to paragraph 7.4 to show that the description of the contents of the technical report was provided by Argentina. The Panel does accept that its reference in paragraph 7.98, fourth sentence, to the investigation under Article 3.1 would be clearer if it were as specific as the parts of the investigation which it describes in the preceding three sentences, and it has therefore amended the fourth sentence of paragraph 7.98 accordingly. The Panel has also corrected the tense of the verb "refer" in paragraph 7.99 to be consistent with the rest of the section, and made a grammatical change in paragraph 7.101. 6.7 Argentina commented on paragraphs 7.102 to 7.117 and requested that the Panel amend its finding in paragraph 7.117 relating to a reasoned and adequate conclusion as to the existence of a threat of serious injury. Argentina argued that the nature of the competent authorities' explanation was not affected by any failure on their part to take into consideration the bad Greek harvest. It argued that, in making an adverse finding on this ground, the Panel had assumed the function of the investigating authority, since the latter was empowered to consider all the relevant data before it and to take a decision on the basis of an evaluation of the information, within its sphere of competence. Chile replied that neither it nor the Panel had disputed the powers of the CNCE but rather the question had been whether the CNCE had exercised its powers in a manner consistent with Article 4.2(a). Chile argued that the Panel had properly applied the appropriate standard of review, which it quoted at paragraph 7.103, and had not conducted a de novo examination of the evidence nor substituted its own conclusions for those of the CNCE. 6.8 The Panel stated the appropriate standard of review in paragraph 7.103 which prohibits it from substituting its own conclusions for those of the competent authorities but, at the same time, obliges it to examine critically the competent authorities' explanation, in depth, and in the light of the facts before it. The Panel explained throughout paragraphs 7.103 to 7.117 why it considered that the competent authorities' explanation was not reasoned or adequate. The Panel noted that an alternative explanation was plausible, but never adopted that explanation, as it specifically noted in paragraph 7.117. The Panel therefore declines to amend the paragraphs on which Argentina commented or its finding in paragraph 7.117. 6.9 Argentina commented on paragraphs 7.118 to 7.124 and requested that the Panel amend its finding in paragraph 7.124 concerning the requirement that a threat of serious injury be "clearly imminent". Argentina concurred with the statement of the Appellate Body cited by the Panel in paragraph 7.120 regarding what should be understood by the words "clearly imminent" in defining a threat of serious injury. However, it recalled that, according to the same statement, a threat of serious injury necessarily implies that serious injury has not yet occurred, that it is an event which will materialize in the future and that its materialization "cannot, in fact, be assured with certainty". Argentina argued that the competent authorities satisfied this test based on the capacity of imports to cause serious injury, taking into account the specific characteristics of the threat. Argentina argued that the Panel did not properly take into account the competent authorities' findings regarding the capacity of the imports in the final stage of the period of analysis. Argentina argued that failure to take account of those circumstances would restrict the very notion of threat to such an extent that it would become almost impossible in practice to ascertain the existence of such a threat. Chile replied that Argentina's reliance on the Appellate Body statement was partial and omitted essential elements in the definition and concept of a threat of serious injury, which the Panel has quoted in paragraph 7.120. 6.10 The Panel agrees with Argentina that a threat of serious injury cannot be assured with certainty. However, it has quoted in paragraph 7.120 considerations relevant to the requisite degree of likelihood and imminence of serious injury, as a factual matter, in order for it to constitute a threat in accordance with Article 4.1(b). The Panel has explained in paragraphs 7.121 and 7.122 why it finds that the competent authorities did not show that serious injury was likely or imminent as required as a factual matter, and why it was insufficient to rely only on the behaviour of imports at the final stage of the period of analysis. The Panel has clarified the language in paragraph 7.122 slightly but, for the reasons given, declines to amend its finding in paragraph 7.124. 6.11 Argentina disagreed with the Panel's comment in paragraph 7.123 that a statement which Argentina had quoted was at odds with the definition of threat of serious injury in Article 4.1(b). Argentina argued that the statement which it had quoted did, in fact, refer to a threat of serious injury, and it pointed out that this view was supported by the heading of the section of the report from which the quote was taken, and a reference in a footnote. Chile replied that the Panel had not referred to the whole section of that report but only to one statement which did not refer to a threat of serious injury. The analysis in the rest of that section showed that the minimum requirement for a safeguard measure was the existence of a threat that complied with the definition in Article 4.1(b), which Argentina had failed to satisfy by not showing that serious injury to the domestic industry was clearly imminent. 6.12 The Panel accepts that the statement raised by Argentina which is quoted in paragraph 7.123 could refer to threat of serious injury, as defined, but only to the extent explained in the following sentence of the report from which Argentina quoted, i.e. only to the extent that the serious injury is clearly imminent. This does not alter the Panel's dismissal of its relevance to this case. If one were to argue that the statement meant that serious injury which had not yet occurred constituted a threat of serious injury even if it were not clearly imminent, that would be at odds with the definition in Article 4.1(b). If one were to argue that it somehow purported to lower the standard established by the words "clearly imminent", this would be unsupported by the terms and context of that statement. The Panel has therefore amended the second and third sentences of paragraph 7.123 without modifying its dismissal of the argument, nor its finding in the following paragraph. The Panel has also made a grammatical change in paragraph 7.122. VII. FINDINGS
7.1 The measure at issue in these proceedings is Resolution No. 348/2001 of the Argentine Ministry of Economy, dated 6 August 2001, by which Argentina imposed a definitive safeguard measure on imports of peaches, preserved in water containing added sweetening matter, including syrup, preserved in any other form or in water, coming under MCN tariff codes 2008.70.10 and 2008.70.90 ("preserved peaches"), in the form of minimum specific duties for three years effective as of 19 January 2001 (the "preserved peaches measure").457 The minimum specific duty per kilogram net was set at US$0.50 in the first year, US$0.45 in the second year and is US$0.40 in the third year. The preserved peaches measure applies to imports from all countries, including Members of the World Trade Organization (the "WTO"), other than MERCOSUR States Parties and South Africa. 7.2 The preserved peaches measure recites the conclusion of the National Foreign Trade Commission (the "CNCE") set out in Record No. 781 of 2 July 2001. That Record of two pages contains the minutes of a meeting of the Board of Directors of the CNCE which was convened to rule on an application for a safeguard measure on preserved peaches. It contains the conclusions of each of the directors on whether the conditions justifying the application of a safeguard measure had been met. It shows that two directors, including the Chairperson, concluded that they had been met, whilst the other two directors concluded that they had not. In the case of a tied vote, the Chairperson's vote is decisive and, accordingly, the conclusion of the Board of Directors was that the conditions justifying the application of a safeguard measure had been met. This was the conclusion forwarded to the Ministry of Economy, which is recited in the preserved peaches measure. 7.3 The Annex to Record No. 781 sets out the written opinions or votes of the CNCE directors. There is a joint opinion by the two directors who voted in favour of the measure (the "joint opinion") and a separate opinion by each of the directors who voted against. The joint opinion explains the reasoning of the two directors who voted in favour and contains their conclusion, which became the conclusion of the Board of Directors. 7.4 The directors had prior access to the investigation file and to the technical report prepared by the technical team prior to the final determination (ITDF No. 08/01). The technical report of 95 pages plus three annexes including methodological notes and statistical tables (the "technical report"), is in turn attached to the Annex to Record No. 781. The technical report contains all of the objective data and information gathered during the investigation.458 7.5 In order to examine this matter, the Panel must consider the competent authorities' findings and reasoned conclusions on pertinent issues of fact and law, which must appear in a published report.459 Argentina argues that the report published in the Annex to Record No. 781 and the technical report contain the relevant findings and conclusions of fact and law.460 Chile does not agree that Argentina "published" a report in accordance with Article 3.1 of the Safeguards Agreement but, for the purposes of this case, it takes the file of the investigation to correspond to that published report.461 It is clear from the record that the operative conclusion - that the requirements justifying the application of the preserved peaches measure had been met - and the supporting reasoning, appear in the joint opinion, which can be found in the Annex to Record No. 781. All directors, including those who wrote the joint opinion, had prior access to the technical report and the file of the investigation. Their opinions are based on the technical report. 7.6 Therefore, the Panel will assess the consistency of the preserved peaches measure and the preceding investigation with Article XIX of GATT 1994 and the Agreement on Safeguards on the basis, in the first instance, of the joint opinion in Annex to Record No. 781, as supplemented by the information in the technical report, to which we shall collectively refer as "the competent authorities' report".462 We also note that the file of the investigation was available to the directors when they made their determination and can, in principle, be relevant to our assessment.463 7.7 The Panel's function, as established by Article 11 of the DSU, dictates the appropriate standard of review by the Panel. Article 11 requires the Panel to make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements. The Panel's duty to make an objective assessment of the facts prohibits it from engaging in a de novo review of the preserved peaches investigation but also from showing total deference to the findings of the Argentine authorities. 7.8 The Panel will follow consistent practice in relation to the burden of proof, according to which the party who asserts a fact, or the affirmative of a particular claim or defence, whether the complainant or the respondent, bears the burden of proof of that fact, or the affirmative of that claim or defence. If that party adduces evidence sufficient to raise a presumption that what is asserted is true, the burden then shifts to the other party, who will fail unless it adduces sufficient evidence to rebut the presumption.464 7.9 Chile makes seven principal claims. It begins with the circumstance of unforeseen developments and continues with the three conditions that make up the legal basis of a safeguard measure, namely increase in imports, threat of serious injury and causation. It makes other claims under Articles 3, 5.1 and 12.2 of the Agreement on Safeguards as well. This is an appropriate order which both parties' submissions have basically followed. The Panel will therefore analyse the claims in this order.
7.10 Chile claims that the preserved peaches measure is inconsistent with Article XIX:1(a) of GATT 1994 and Article 3.1 of the Agreement on Safeguards because the competent authorities did not make a prior finding nor demonstrate in their report, as a preliminary matter of fact, the existence of unforeseen developments.465 Argentina replies that the competent authorities' report did establish and demonstrate the existence of unforeseen developments, in accordance with these obligations.466 7.11 We will begin by considering Article XIX:1(a), which provides as follows:
7.12 This provision and the Agreement on Safeguards are to be applied cumulatively, in view of the fact that Article 1 of the Agreement on Safeguards states that the purpose of that agreement is to establish "rules for the application of safeguard measures which shall be understood to mean 'those measures provided for in Article XIX of GATT 1994'", and Article 11.1(a) prohibits certain action "unless such action conforms with the provisions of that Article applied in accordance with this Agreement". This interpretation is confirmed by various reports of panels and the Appellate Body.467 The parties to this dispute have proceeded on the basis of that interpretation. Therefore, in order to apply a safeguard measure, Members' competent authorities must, among other things, demonstrate as a matter of fact the existence of unforeseen developments.468 7.13 The Panel must assess whether Argentina's competent authorities "demonstrated as a matter of fact" the existence of unforeseen developments. The question arises as to when and where that demonstration must take place. Given that this is a prerequisite for the application of a safeguard measure, its existence cannot be demonstrated after the measure is applied. This was the approach of the Appellate Body in US - Lamb:
7.14 We will therefore look for the demonstration of the existence of unforeseen developments in the competent authorities' report which the CNCE made before the application of the preserved peaches measure. 7.15 Chile alleges that there is no mention, even indirectly, of Article XIX:1(a) of GATT 1994 or its prior requirement of unforeseen developments in the competent authorities' report, including the technical report.471 Argentina denies this claim, although it does not dispute that the report makes no express reference to "the result of unforeseen developments". 7.16 Both parties presented argument in their first written submissions which proceeded on the basis that the unforeseen developments in this case, if there had been any, comprised or included an increase in imports.472 Chile argued that the competent authorities identified the unforeseen developments with the increase in imports.473 7.17 It is important to note that Article XIX:1(a) refers to "imports in such increased quantities and under such conditions" as to cause or threaten serious injury as a result of "unforeseen developments" and the effect of obligations. The link between these elements, according to which one has certain effects "as a result" of the other, means that they must be two distinct things. This is consistent with the approach of the Appellate Body in its reports in Argentina - Footwear (EC) and Korea - Dairy where it referred to a "logical connection" between these elements:
7.18 The text of Article XIX:1(a) cannot support an interpretation that would equate increased quantities of imports with unforeseen developments. 7.19 Argentina argued that three factors constituted unforeseen developments: (a) increased production as a result of an exceptional Greek harvest; (b) substantial increase in world stocks; and (c) a downward price trend.475 Argentina argues that the competent authorities' report contains a finding and demonstration of the existence of unforeseen developments in the following passages:476
7.20 The Panel observes that the only mention in these passages of the alleged development concerning an increase in world stocks480 is taken from Part VI of the technical report, which begins with the following disclaimer:
7.21 Argentina indicated that the information and data revealed by the investigation was evaluated and taken into account by the investigating authority in its determination481, but the Panel could not find any place in the joint opinion where the competent authorities showed how they evaluated or took account of the statement regarding world stocks. Therefore, this statement regarding world stocks in Part VI of the Technical Report cannot constitute by itself a demonstration by the competent authorities. The Panel finds that there is no demonstration that world stocks were an unforeseen development as required by Article XIX:1(a) of GATT 1994. 7.22 As regards the other alleged developments, namely an increase in world production and a declining trend in world prices, these both appear in the first passage, taken from the joint opinion, which contains the conclusions and reasoning of the CNCE directors who voted in favour of the preserved peaches measure. We understand that the references in that passage to increases in world and European production are based to some extent on the other three passages, taken from the technical report, but observe that there is no reference to a downward price trend in the other passages on which Argentina relies, although it may be based on other information in the technical report. The Panel will therefore consider whether the competent authorities demonstrated in their report as a matter of fact that these two developments constituted unforeseen developments in the sense required by Article XIX:1(a) of GATT 1994. 7.23 Following the approach of the Appellate Body in US - Lamb482, we will first consider whether the competent authorities discussed or offered any explanation as to why the changes mentioned in these alleged developments could be regarded as "unforeseen developments" within the meaning of Article XIX:1(a) of GATT 1994. In the Panel's view, this requires, as a minimum, some discussion by the competent authorities as to why they were unforeseen at the appropriate time, and why conditions in the second clause of Article XIX:1(a) occurred "as a result" of circumstances in the first clause. 7.24 The passage in the joint opinion and the supporting passages in Part V of the technical report on which Argentina relies, and which are quoted above, make no mention of either of these issues. Nevertheless, the Panel has noted that the following paragraph of the joint opinion states that these developments had resulted ("se han materializado") in the entry of the investigated product from different origins in an unforeseen and unexpected way.483 It indicates that the entry of the imports, or the way in which they were being imported, was unforeseen, but there is no mention that the alleged developments themselves were unforeseen. We have already observed in paragraph 7.18 that an increase in imports and the unforeseen developments must be two distinct elements. A statement that the increase in imports, or the way in which they were being imported, was unforeseen, does not constitute a demonstration as a matter of fact of the existence of unforeseen developments. We do not agree with the statement by the Appellate Body in Argentina - Footwear (EC) that "the increased quantities of imports should have been 'unforeseen' or 'unexpected'."484 The text of Article XIX:1(a), together with the Appellate Body's own discussion of it and earlier conclusion regarding the logical connection between the circumstances in the first clause of Article XIX:1(a) - including unforeseen developments - and the conditions in the second clause - including an increase in imports - show that this is not a requirement for the imposition of a safeguard measure. 7.25 There is the issue of the point in time at which Article XIX:1(a) requires that developments should have been unforeseen. Chile stated that the developments should have been unforeseen by a Member at the time it incurred the relevant obligation.485 In response to questions posed by the Panel, both parties submitted basically that developments should have been unforeseen by the negotiators at the time at which they granted the relevant concession.486 7.26 We recall that the Appellate Body in both Argentina - Footwear (EC) and Korea - Dairy quoted the following statement in the US - Fur Felt Hats GATT Working Party report of 1951:
7.27 In its report in Korea - Dairy, the Appellate Body made the following finding:
7.28 We will apply this interpretation and determine whether the competent authorities assessed whether the developments which they identified were unforeseen as at the time the relevant obligation was negotiated. We emphasize that we are not now discussing the time at which the competent authorities must demonstrate the existence of unforeseen developments in order to adopt a safeguard measure. 7.29 In this case, the relevant obligations are Argentina's current tariff concessions on preserved peaches.489 The parties agree that those concessions were negotiated during the Uruguay Round490 but there is no mention of those negotiations in the competent authorities' report.491 Neither the joint opinion nor the technical report discusses or offers any explanation why Argentina did not foresee the later developments in world production or world prices at the time of the Uruguay Round. It appears that the CNCE directors who voted in favour of the preserved peaches measure believed that the "way in which imports were entering" was "unforeseen and unexpected" from 1998, the earliest date mentioned in this section of the joint opinion, when the increases in world production and the decline in world prices began. Even if the CNCE directors had mentioned that the developments in world production and prices in 1999/2000 were unforeseen as at 1998, which they did not, this would have been four years later than the end of the Uruguay Round, which was the appropriate time as of which to assess whether developments were unforeseen in the sense of Article XIX:1(a) of GATT 1994. 7.30 The only evidence which the Panel has seen in the competent authorities' report that could be relevant to what Argentina foresaw during the Uruguay Round tends to show that these developments were not unforeseen. The supporting passage from Part VI of the technical report, on which Argentina relies, is a statement of an interested party about the volume of world production of preserved peaches in 1999/2000. It compares the volume with the volume of world production in 1992/1993 - which was a season during the Uruguay Round - and shows that the volume in 1999/2000 was less than one per cent higher.492 This would normally indicate that a level of production such as the one that occurred in 1999/2000 could and should have been foreseen by the Argentine negotiators at least before the end of the Uruguay Round. Argentina argued that its negotiators could not reasonably have been expected to foresee that abnormal circumstances, such as the record world production in 1992/1993, would become the rule rather than the exception.493 The competent authorities' report contains no finding or evidence that these abnormal circumstances did become the rule. The Panel asked Argentina why its negotiators in the Uruguay Round did not expect such fluctuations in the future. Argentina replied that the Agreement on Safeguards applies specifically to situations of injury under fair trading conditions which, owing to their exceptional nature, are difficult to predict.494 Whilst this may be true, given that in this case the alleged unforeseen developments are fluctuations in production, stocks and prices of a commodity, we would not expect that tariff negotiators could not and should not foresee them. 7.31 Argentina drew the Panel's attention to the incorporation in Argentine law of WTO rules and stressed that the competent authorities stated from the very beginning of their analysis that the investigation would be conducted in accordance with the regulations laid down in the framework of Article XIX of GATT 1994.495 The Panel notes that the former refers to the creation of legal obligations in Argentina's domestic legal order and the latter is a statement of principle. Neither amounts to a demonstration of the existence of unforeseen developments in the preserved peaches case. 7.32 The joint opinion does refer to "unforeseen developments" as such in its final conclusion, which is basically reproduced in Record No. 781 and Resolution No. 348/2001. It reads as follows:
7.33 A mere phrase in a conclusion, without supporting analysis of the existence of unforeseen developments, is not a substitute for a demonstration of fact. The failure of the competent authorities to demonstrate that certain alleged developments were unforeseen in the foregoing section of their report is not cured by the concluding phrase. 7.34 The Panel has observed that this phrase refers to a "context" ("contexto") of unforeseen developments unlike Article XIX:1(a) of GATT 1994 which refers to their "result" ("consecuencia"). Argentina argues that the introductory reference to the Agreement on Safeguards and Article XIX of GATT 1994 on page 1 of the Annex to Record No. 781 shows that, when the directors wrote "context", they meant the same thing as "result".496 Chile does not agree, and argues that the use of the word "context" shows that the competent authorities' conclusion is inconsistent with Article XIX:1(a).497 We note that the words "context" and "result" have different meanings in the original Spanish (and in English and French), the key difference being that the word "result" denotes a causal relationship, which the word "context" does not. However, in view of our reasoning in the previous paragraphs, it is unnecessary to form a final view on this argument. 7.35 For all these reasons, the Panel finds that the competent authorities' report does not demonstrate as a matter of fact the existence of unforeseen developments as required by Article XIX:1(a) of GATT 1994. 7.36 Chile also claimed in its first written submission that the facts before the competent authorities showed that the alleged unforeseen developments were not unforeseen.498 The basis of that claim was that the increase in imports (not the unforeseen developments) was a recovery that was expected after the "interruption" in 1997 and 1998. In view of the Panel's finding499, and Chile's own later argument500, that increased quantities of imports cannot be equated with unforeseen developments, it is unnecessary for the Panel to consider this claim.
375 See European Communities' oral statement, paragraph 2
where it refers to the Appellate Body Report, US - Lamb, paragraph 114,
referring to the Appellate Body Report, US - Wheat Gluten ; and Appellate
Body Report, US - Cotton Yarn, paragraph 73.
376
See European Communities' oral statement, paragraph 2.
377
See European Communities' oral statement, paragraph 4
where it refers to the Appellate Body Report, US - Lamb, paragraph 113.
378
See European Communities' oral statement, paragraph 4
where it refers to the Appellate Body Report, US - Cotton Yarn, paragraph
77.
379
See European Communities' oral statement, paragraph 4.
380 See European Communities' oral statement, paragraph 6.
381
See European Communities' third party submission,
paragraph 4 where it refers to the Appellate Body Reports, Argentina -
Footwear (EC), paragraph 93; and Korea - Dairy, paragraph 86.
382
See European Communities' third party submission,
paragraph 4.
383
See European Communities' third party submission,
paragraph 5 where it refers to the Appellate Body Report, US - Lamb,
paragraph 85; and Argentina - Footwear (EC), paragraph 92, as confirmed
in the Appellate Body Report, US - Lamb, paragraph 71.
384
See European Communities' third party submission,
paragraph 5 where it refers to Appellate Body Report, US - Lamb,
paragraphs 72 and 73.
385
See European Communities' third party submission,
paragraph 6.
386
See Argentina's first written submission, paragraphs
38 to 39 and 43.
387
See European Communities' third party submission,
paragraph 8.
388
See European Communities' third party submission,
paragraph 9.
389
See European Communities' third party submission,
paragraph 10 where it refers to the technical report, page 32, 58 and to Chile�s
first written submission, paragraph 4.13.
390
See European Communities' third party submission,
paragraph 11 where it refers to the Appellate Body Report, Korea - Dairy,
paragraphs 83 to 86; Appellate Body Report, Argentina - Footwear (EC),
paragraphs 91 and 92.
391
See European Communities' third party submission,
paragraph 11.
392
See European Communities' third party submission,
paragraph 12 where it refers to Record No. 781, page13 in Exhibit CHL-1 of
Chile's first written submission. The European Communities claims that this
appears to be confirmed by Argentina�s import statistics for 1992-2000
(Jan.-Nov.) produced by Chile (Exhibit CHL-4).
393
The European Communities refers to Argentina�s first written
submission, paragraph 39.
394
See, European Communities' third party submission,
paragraph 13.
395
The European Communities refer to the Appellate Body Reports,
US - Lamb, paragraph 72; Argentina - Footwear (EC), paragraph 98;
and US - Wheat Gluten , paragraphs 181 ff.
396
See European Communities' oral statement, paragraph
10.
397
See European Communities' oral statement, paragraph 12
where it refers to the Appellate Body Report, US - Lamb, paragraph 137.
398
See European Communities' oral statement, paragraph 12
where it refers to the Appellate Body Report, Argentina - Footwear (EC),
footnote 130.
399
See European Communities' oral statement, paragraph 12
where it refers to the Panel Reports, Argentina - Footwear (EC),
paragraphs 8.160 to 8.162; US - Wheat Gluten , paragraphs 8.32 to 8.33;
and US - Line Pipe, paragraph 7.204.
400 See European Communities' oral statement, paragraph
13.
401
For example, the EC refers to the statistics attached to the
technical report that include import data on volume from 1996 to 2000 in some
parts, or from 1995 to 2000 in other parts. See technical report, Exhibit CHL-1,
graphic No. 15.1. and 15.2.
402
The European Communities refers to the technical report,
Exhibit CHL-1, graphic No. 3.
403
See European Communities' oral statement, paragraph 17
where it refers to the Appellate Body Report, Argentina - Footwear,
paragraphs 130-131.
404
See European Communities' oral statement, paragraph
17.
405
The European Communities refers to the technical report,
Exhibit CHL-1, page 57 and Table 15.1.
406
See European Communities' oral statement, paragraph
19.
407
See European Communities' oral statement, paragraph 19
where it refers to the Appellate Body Report, US - Lamb, paragraph 137.
408
See European Communities' oral statement, paragraph 20
where it refers to the Appellate Body Report, US - Lamb, paragraph 138.
409
See European Communities' oral statement, paragraph 20
where it refers to the Appellate Body Report, Argentina - Footwear (EC),
paragraph 93; and to the Appellate Body Report, Korea - Dairy, paragraph
86.
410
See European Communities' oral statement, paragraph
20.
411
See European Communities' oral statement, paragraph 22
where it refers to the Appellate Body Report, US - Lamb, paragraph 106.
412
The European Communities refers to paragraph 16 of the United
States' third party submission. See paragraph 5.26 of the present report.
413
See European Communities' oral statement, paragraph 7.
414
The European Communities refers to the Appellate Body Report,
US - Lamb, paragraph 125.
415
The European Communities refers to the Appellate Body Report,
US - Lamb, paragraph 126.
416
See European Communities' oral statement, paragraph 8.
417
See European Communities' oral statement, paragraph 23
where it refers to the Appellate Body Report, US - Line Pipe,
WT/DS202/AB/R, 15 February 2002, paragraph 261.
418
See European Communities' oral statement, paragraph
23.
419
See United States' oral statement, paragraph 4 where
it refers to the Panel Report, US - Lamb, paragraph 7.16.
420
See United States' oral statement, paragraph 4.
421
See United States' oral statement, paragraph 5 where
it refers to the Panel Report, US - Lamb, paragraph 7.16.
422
See United States' oral statement, paragraph 6.
423
See United States' oral statement, paragraph 7.
424
See United States' third party submission, paragraph
3.
425
See United States' third party submission, paragraph 4
where it refers to the Appellate Body Report, US - Lamb, paragraph
138.
426
See United States' third party submission, paragraph
4.
427
See United States' third party submission, paragraph
6.
428
See United States' third party submission, paragraph 7
where it refers to Panel Report on US -Wheat Gluten, paragraph 8.6.
429
See United States' third party submission, paragraph
7.
430
See United States' third party submission, paragraph
14.
431
See United States' third party submission, paragraph
15 where it refers to the Appellate Body Report, US - Line Pipe,
paragraphs 168 and 169.
432
See United States' third party submission, paragraph
15 where it refers to the Appellate Body Report, US - Line Pipe,
paragraph 169.
433
See United States' third party submission, paragraph
15.
434
See United States' third party submission, paragraph 16.
435
See United States' third party submission, paragraph
17.
436
See United States' third party submission, paragraph
18 where it refers to the Appellate Body Report, India - Patents (US),
paragraph 45 (stating that principles of interpretation "neither require nor
condone the imputation into a treaty of words that are not there or the
importation into a treaty of concepts that were not intended.").
437
See United States' third party submission, paragraph
18.
438
See United States' third party submission, paragraph
19.
439
See United States' third party submission, paragraph
20.
440
See United States' third party submission, paragraph
21.
441
See United States' third party submission, paragraph
22.
442
See United States' third party submission, paragraph
23.
443
See United States' oral statement, paragraph 8.
444
See United States' oral statement, paragraph 9.
445
See United States' oral statement, paragraph 10.
446
See United States' oral statement, paragraph 11.
447
See United States' third party submission, paragraph
8.
448
See United States' third party submission, paragraph
9.
449
Appellate Body Report, US - Lamb, paragraphs 178 and
181.
450
See United States' third party submission, paragraph
11.
451
See United States' third party submission, paragraph
12 where it refers to the Appellate Body Report, US - Wheat Gluten
paragraph 67.
452
See United States' third party submission, paragraph
12 where it refers to the Appellate Body Report, US - Lamb, paragraph
170.
453
See United States' third party submission, paragraph
12 where it refers to the Appellate Body Report, US - Line Pipe,
paragraph 209.
454
See United States' third party submission, paragraph
12.
455
Section VI of this Report entitled "Interim Review" therefore
forms part of the findings of the final panel report, in accordance with Article
15.3 of the DSU.
456
Paragraph numbers in the interim report were identical to
those in this final report.
457
Reproduced in full in Exhibit CHL-2.
458
See Argentina's response to questions Nos. 1
to 3 of the Panel.
459
Article 3.1 of the Agreement on Safeguards.
460
See Argentina's first written submission, paragraph
139.
461
See Chile's first written submission, footnote 55.
462
The competent authorities' report is reproduced in Exhibit
CHL-1.
463
See Argentina's first written submission, paragraph
138 and its first oral statement, paragraph 87 and Chile's response to question
No. 1 of the Panel for the parties' views on the relevant documentation.
464
See Appellate Body Report in US - Wool Shirts and
Blouses, p. 14; DSR 1997:I, at p. 337.
465
See Chile's first written submission, paragraph 4.1.
466
See Argentina's first written submission, paragraphs
30 and 31.
467
Appellate Body Reports in Argentina - Footwear (EC),
paragraph 92; Korea - Dairy, paragraph 85; US - Lamb,
paragraph 71; and Panel Reports in US - Line Pipe, paragraph 7.295 and
Chile - Price Band System, paragraph 7.134.
468
The parties' arguments as to whether the competent
authorities' published report contained a finding and a reasoned and adequate
explanation of how the facts investigated support the conclusion relate to the
claim under Article 3.1 of the Agreement on Safeguards. Without expressing a
view on whether Article XIX:1(a) itself requires a reasoned and adequate
explanation of the existence of unforeseen developments, the Panel understands
that the substance of many of those arguments relates to the demonstration
required under Article XIX:1(a) of GATT 1994 as well, so that they should also
be considered here.
469
Appellate Body Report in Korea - Dairy, paragraph 85;
see also, Appellate Body Report, Argentina - Footwear (EC), paragraph 92.
470 See Appellate Body Report in US - Lamb,
paragraph 72.
471
See Chile's first written submission, paragraph 4.1.
472
See, for example, Chile's first written submission,
paragraphs 4.13, 4.16 and 4.85 and its first oral statement, paragraphs 10, 13
and 14, and Argentina's first written submission, paragraph 33.
473
See Chile's rebuttal, paragraph 7.
474
See Appellate Body Reports in Argentina - Footwear
(EC), paragraph 92 and Korea - Dairy, paragraph 85, quoted with
approval in US - Lamb, paragraph 72.
475
See Argentina's rebuttal, paragraph 9.
476
See Argentina's response to questions Nos. 5 and 28 of
the Panel and its rebuttal, paragraphs 10 to 12.
477
See Annex to Record No. 781, Section V.A.4 headed
"Conditions of competition", penultimate paragraph.
478
See the technical report, page 47.
479
See the technical report, Section VI, paragraphs 7 and
8 on pages 73 and 74.
480
See Argentina's response to Panel Question No. 5.
481
See Argentina's rebuttal, paragraph 13.
482
Appellate Body Report, paragraph 73.
483
See Annex to Record No. 781, Section V.A.3 headed
"Conditions of competition".
484
See Appellate Body Report in Argentina - Footwear
(EC), paragraph 131 referring to paragraphs 91 to 98 of the same report.
485
See Chile's first written submission, paragraph 4.11.
486
See Chile's and Argentina's respective responses to
question No. 7 of the Panel.
487
See Appellate Body Reports in Argentina - Footwear
(EC), paragraph 96, and Korea - Dairy, paragraph 89, citing US -
Fur Felt Hats , adopted 22 October 1951.
488
See Appellate Body Report in Korea - Dairy,
paragraph 86.
489
Argentina's binding of 35 per cent on preserved peaches
appears in the first note to Section I-A of its GATT Schedule of Concessions,
dated 15 April 1994.
490
See Chile response to question No. 7 of the Panel;
Argentina's second oral statement, paragraphs 15, 18 and 19; Argentina's
response to questions Nos. 7 and 31 of the Panel and question No. 2 of Chile.
491
There is only a mention of the bound tariff rate in the Annex
to Record No. 781, Section V.A.1 headed "Evolution of imports". There is no
mention of the market access expectations of the Argentine negotiators or the
particular content surrounding the Uruguay Round, to which Argentina referred in
paragraphs 15 to 19 of its second oral statement.
492
See Argentina's response to question No. 6 of the
Panel, citing information submitted by an interested party and contained in the
technical report that estimated world production in 1999/2000 at a record
1,242,616 tons. According to Argentina, this represented a 14 per cent increase
over the previous period and almost 8,000 tons more than the previous record in
1992/1993. From this we can calculate that the increase of the 1999/2000
estimate over 1992/1993 was approximately 0.64 per cent.
493
See Argentina's response to questions Nos. 7 and 8 of
the Panel.
494
See Argentina's response to question No. 31 of the
Panel.
495
See Argentina's first written submission, paragraph
34, Argentina's first oral statement, paragraph 4.
496
See Argentina's second oral statement, paragraphs 8
and 9.
497
See Chile's rebuttal, paragraph 10.
498
See Chile's first written submission, paragraphs 4.10
to 4.13.
499
See paragraph 7.18 above.
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