ARGENTINA - DEFINITIVE SAFEGUARD MEASURE ON
IMPORTS OF PRESERVED PEACHES

Report of the Panel

(Continued)

Productivity

7.100 Table 7e of the technical report contains statistics on "producto medio f�sico del empleo".⁵⁵⁷ When asked to clarify, Argentina explained that this term was a measure of "own production divided by the number of employees in the preserved peaches production sector".⁵⁵⁸ The body of the technical report does not discuss this term. However, unlike capacity utilization, the joint opinion mentions this factor and notes falls, i.e. a deterioration, which it relates to falls in sales and production. This indicates some evaluation, even if it represents the bare minimum. Without prejudice to the question whether labour productivity was a sufficient measure of productivity in the preserved peaches industry, the Panel finds that productivity was evaluated, as a formal matter, as required by Article 4.2(a).

Employment

7.101 Tables 7a and 8 of the technical report contain data on the level of employment and the total production wage bill. The body of the technical report refers to the level of employment in primary production.⁵⁵⁹ The joint opinion, in the same sentence in which it notes falls in labour productivity, mentions employment, noting falls in 2000 which it relates to falls in sales and production. The Panel therefore finds that employment was evaluated, as a formal matter, as required by Article 4.2(a).

(ii) Reasoned and adequate explanation

7.102 Turning to Chile's claim concerning the substantive aspects of the competent authorities' findings and conclusions of a threat of serious injury, the Panel must review whether the competent authorities provided a reasoned and adequate explanation of how the facts supported their determination that a threat of serious injury existed. The temporal focus of the competent authorities' evaluation of the data, and the alternative explanation that the rate and amount of the increase in imports reflected a recovery to historical levels, are among the various methodological issues which Chile has raised.⁵⁶⁰

7.103 We recall certain statements of the Appellate Body in US - Lamb concerning the appropriate standard of review. We have already quoted those statements concerning the value of the most recent data in making a determination of the existence of a threat of serious injury, but also the danger of evaluating the most recent data in isolation and the need to evaluate the short-term trends in the light of the longer term trends.⁵⁶¹ We also bear in mind another statement in that report concerning the standard of review of a determination of a threat of serious injury:

"We wish to emphasize that, although panels are not entitled to conduct a de novo review of the evidence, nor to substitute their own conclusions for those of the competent authorities, this does not mean that panels must simply accept the conclusions of the competent authorities. To the contrary, in our view, in examining a claim under Article 4.2(a), a panel can assess whether the competent authorities' explanation for its determination is reasoned and adequate only if the panel critically examines that explanation, in depth, and in the light of the facts before the panel. Panels must, therefore, review whether the competent authorities' explanation fully addresses the nature, and, especially, the complexities, of the data, and responds to other plausible interpretations of that data. A panel must find, in particular, that an explanation is not reasoned, or is not adequate, if some alternative explanation of the facts is plausible, and if the competent authorities' explanation does not seem adequate in the light of that alternative explanation. Thus, in making an 'objective assessment' of a claim under Article 4.2(a), panels must be open to the possibility that the explanation given by the competent authorities is not reasoned or adequate."⁵⁶²

7.104 The Panel will consider the temporal focus of the competent authorities' evaluation of the data in making their determination of a threat of serious injury, and whether their explanation was adequate in the light of any plausible alternative explanation of the facts.

7.105 The determination of a threat of serious injury in this case rests on two findings: one regarding the capacity of imports to cause injury and the other regarding the "sensitivity" of the domestic market. Argentina argues that the determination was based on the overall weighing of all of the factors having a bearing on the industry as set forth in the technical report and as illustrated in a chart.⁵⁶³ However, the joint opinion makes it clear that the directors relied, with respect to imports, on the last part of 2000 and, with respect to the situation of the domestic industry, mainly on the variation from 1999 to 2000. The joint opinion makes no mention of the rest of the period of analysis which, in the case of import data, was 1996-2000 and, in the case of the situation of the domestic industry, was 1997-2000.

7.106 Although the directors did not explain why they chose to rely on data from the very end of the period of analysis, it is clear that in a case of a determination of a threat of serious injury, such as this, the data relating to the most recent past provided them with an essential basis for a projection of future conditions.⁵⁶⁴ However, once again we recall the balancing consideration that if the most recent data is evaluated in isolation, the resulting picture of the domestic industry may be quite misleading.⁵⁶⁵

7.107 In the preserved peaches investigation, the data for the most recent period was quite different from that for the rest of the period of analysis. Of the nine injury factors cited, in almost all cases the figure for 2000 showed a modest deterioration compared to the improvement during the previous years. The most significant decrease was in the production figure reported by the surveyed companies which showed a 14 per cent decline in the last year of the analysis, but this came after increases of 20 per cent and 39 per cent in the previous years of the period of analysis.⁵⁶⁶ The production figure generated by the competent authorities showed a 12 per cent decline in the last year of the period of analysis after a decrease of 4 per cent and an increase of 21 per cent. Most of the injury factors considered in reaching the conclusion that the domestic industry displayed a high degree of sensitivity showed that the condition of that industry in 2000 was better than in 1998, which itself was an improvement on 1997. These factors appeared to be returning to their pre-1998 levels after an unusually favourable period.

7.108 The impact of the longer term trends in the data could have been decisive on the competent authorities' conclusion that the industry displayed a high degree of sensitivity, which was an essential part of the determination of a threat of serious injury, as formulated in the joint opinion. This importance of the longer term trends is illustrated by the fact that the only directors who explained the impact of the favourable longer term trends reached the conclusion that the preserved peaches measure was not justified.

7.109 The joint opinion offers no explanation of the impact of the improvements throughout the period of analysis on their determination of a threat of serious injury. It offers no explanation of the choice of 1999, or late 2000, as a benchmark for evaluation of these factors. Instead, it assumes that those years were an appropriate benchmark for its evaluation of the situation of the domestic industry. In view of these trends over the period of analysis, these explanations are essential to provide a reasoned and adequate explanation of the conclusion that the domestic industry showed a high degree of sensitivity, which was an essential step in the way the joint opinion made its determination of a threat of serious injury.

7.110 There was no improvement in 2000 over 1998 in the volume and value of imports, selling prices for the domestic industry and sales value data of the surveyed companies. However, the increase in imports in 2000 over 1998 was less than the decrease in 1998 over 1996, so that the volume of imports in absolute terms actually declined over the entire period of analysis (1996-2000) by a seventh in terms of volume and over a third in terms of value. The average prices of imports showed modest increases to 1998 and then a steep decline to 2000 which was inversely proportional to the volume of imports. These factors formed the basis of the finding that imports had the capacity to threaten serious injury. The average selling prices for the domestic industry showed a slight decline to 1998 and then followed the same trend of a steeper decline to 2000. Sales value data of the surveyed companies showed an improvement to 1998 or 1999 and then a steep decline to 2000.

7.111 The directors viewed the most recent data for the volume and price of imports, in fact, the period "toward the end of 2000" at the very end of the period of analysis. They did not relate it to data for the rest of the period of analysis but isolated it. The joint opinion offers no explanation of the impact of the decrease in imports over the entire period of analysis. We have already dealt with Argentina's arguments that they did not isolate the recent import data from the rest of the period of analysis at paragraphs 7.66 to 7.68. We do not accept them in relation to the threat of serious injury determination for the same reasons.

7.112 An alternative plausible explanation of the variations in import prices and volumes, and the average selling prices for the domestic industry, was open on the facts. This was that the volume of imports represented a return to pre-1998 levels, after the effects of an unusual climatic factor. The increase in imports at the end of the period of analysis continued a trend which began in 1998 but, when viewed in the light of all the data analysed from 1996, was open to this alternative explanation. The deceleration in the increase in imports in the last year of the period of analysis also supported this alternative explanation. Even if the import data for 1996 was excluded, the directors acknowledged that the low volume of imports in 1997 was due to a bad harvest in Greece. The data showed that the relative quantity of imports from Greece in 1997 represented almost zero and that it had recovered more or less in line with the total increase in imports since then.

7.113 The Panel sees nothing in the joint opinion that addresses this alternative plausible explanation. During the investigation, it was suggested that the increase in imports was merely a recovery.⁵⁶⁷ The technical team observed that imports "recovered" in 1999 and 2000, and described the increase in supply of peaches in Greece in 1999 and the increase in exports from Greece in 1998 and 1999 as a "recovery".⁵⁶⁸ They also described a "recovery" in production in Chile in 1999 followed by a decline. The directors who voted in favour of the preserved peaches measure did not address it.

7.114 Viewed as a recovery after the bad Greek harvest, the behaviour of imports and domestic prices was consistent with the pattern of the other injury factors which appeared to be returning to their pre-1998 levels after an unusually favourable period. The plausibility of this alternative explanation is illustrated by the fact it was accepted by the other CNCE directors.⁵⁶⁹ We cite their opinion only to show that the explanation was plausible, not that it was correct.

7.115 Argentina argued before the Panel that the increase was not a recovery, but it has not directed our attention to any passage in the competent authorities' report that addressed such an explanation and gave a reason for rejecting it.⁵⁷⁰ Argentina drew attention to the fact that the growth rate in imports from 1998 onwards "grew at a faster rate than in 1996" but it has not shown where this contrast was drawn by the competent authorities nor explained how that would exclude the possibility that the later increase was nonetheless a recovery.⁵⁷¹ Argentina argued that the volume of stocks in Greece, and the ease with which they could have been poured onto the Argentine market, were essential variables in the evaluation of the threat of serious injury.⁵⁷² However, an explanation was required as to why these levels of stocks were not part of a recovery, and none was given. Argentina argued that it was the overall weighing of all of the factors having a bearing on the industry that ultimately supported the determination of threat of serious and imminent injury⁵⁷³ but it has not directed our attention to any passage in the competent authorities' report that addressed the possibility that the injury factors analysed in relation to the situation of the domestic industry were simply returning to their pre-1998 levels.

7.116 The directors who voted in favour of the preserved peaches measure viewed the data for the most recent period in isolation and did not acknowledge the alternative plausible explanation. The considerable increase in imports in 2000 and deterioration in certain injury factors - viewed in isolation - led them to a potentially very different conclusion from an evaluation in the light of all data before the competent authorities. They explained their finding on the basis of the most recent period and did not offer any explanation of that data in light of the longer term data which was before them. They did not seek to deal with the alternative plausible explanation, even though it was disclosed in the technical report.

7.117 The Panel is not substituting its own opinion for that of the competent authorities. In fact, the Panel has not formed its own opinion on either the situation of the domestic industry or the capacity of imports to cause serious injury in 2001. Rather, the Panel finds that for the reasons given above, the explanation of the determination of a threat of serious injury was not reasoned or adequate as required by Article 4.2(a).

(iii) Clearly imminent

7.118 Chile also argues that the purported determination of threat of serious injury did not satisfy the definition of a "threat of serious injury" in Article 4.1(b).⁵⁷⁴ That definition reads as follows:

"'threat of serious injury' shall be understood to mean serious injury that is clearly imminent, in accordance with the provisions of paragraph 2. A determination of the existence of a threat of serious injury shall be based on facts and not merely on allegation, conjecture or remote possibility."

7.119 This definition refers to "serious injury" which is defined in Article 4.1(a) as follows:

"'serious injury' shall be understood to mean a significant overall impairment in the position of a domestic industry."

7.120 Chile claims that the finding of a threat of serious injury did not demonstrate that the threat was "clearly imminent". That phrase has been interpreted by the Appellate Body as follows:

"(�) The word 'imminent' relates to the moment in time when the 'threat' is likely to materialize. The use of this word implies that the anticipated "serious injury" must be on the very verge of occurring. Moreover, we see the word 'clearly', which qualifies the word 'imminent', as an indication that there must be a high degree of likelihood that the anticipated serious injury will materialize in the very near future. We also note that Article 4.1(b) provides that any determination of a threat of serious injury 'shall be based on facts and not merely on allegation, conjecture or remote possibility.' (emphasis added) To us, the word 'clearly' relates also to the factual demonstration of the existence of the 'threat'. Thus, the phrase 'clearly imminent' indicates that, as a matter of fact, it must be manifest that the domestic industry is on the brink of suffering serious injury."⁵⁷⁵

7.121 In the present case, the directors' conclusion was that that the industry showed a "high degree of sensitivity" in circumstances which did not constitute serious injury. Sensitivity of any degree does not show that serious injury is about to occur - it depends on the likelihood and imminence of the threat. In this case, the threat was described as the "capacity" of imports to cause serious injury.⁵⁷⁶

7.122 The "capacity" of imports is a reference to the possibility of causing serious injury, not a threat. The directors purported to identify the threat in the following paragraph of their conclusion, but they did not indicate any degree of likelihood that serious injury would occur, let alone a high degree of likelihood. There was a statement that the increase in imports in the most recent period was "sharp" but the conclusion was not drawn that this indicated that the imports that would cause serious injury were about to occur. There was just an acknowledgement of the possibility. There was no attempt to make a projection of what was about to occur, nor a fact-based assessment of the likelihood of the imports increasing. In the light of the flawed temporal focus of the analysis of the data, the use of the most recent data did not necessarily indicate the future state of imports. In the light of the alternative explanation that the imports were recovering to their historical levels, the most recent increase did not necessarily indicate that they would continue to increase either at all or at the same rate.

7.123 Argentina reminded us of another statement by the Appellate Body in US - Line Pipe that "serious injury does not generally occur suddenly".⁵⁷⁷ However, this does not affect the definition of threat of serious injury in Article 4.1(b) which requires that the serious injury be "clearly imminent". Indeed, this requirement was recalled by the Appellate Body in the passage from which Argentina quoted.

7.124 Consequently, we find that this determination does not purport to find that there is a high degree of likelihood that the threat would materialize in the very near future. Therefore, we find that the determination does not contain a finding that serious injury is clearly imminent as required by Article 4.1(b).

(iv) Remote possibility

7.125 Chile argues that the determination of threat of serious injury was not based on facts but merely on "conjecture or remote possibility", which is inconsistent with the definition in Article 4.1(b).⁵⁷⁸ The relevant conclusion (in the section headed "Causality") in the joint opinion is reproduced at paragraph 7.88 above.

7.126 Chile describes this assertion as a "prediction" based not on supporting analysis or empirical evidence but rather on an assumption based, in turn, on a lack of indicators.⁵⁷⁹ Argentina asserts that it was the overall weighing of all of the factors having a bearing on the industry as set forth in the technical report that ultimately supported the determination of threat of serious and imminent injury.⁵⁸⁰

7.127 In their conclusion, the directors acknowledge that in 2000 the domestic industry was not suffering serious injury. In the second paragraph, they admit the possibility that, in the future, world production and exports might equal or be even greater than in 2000. For this reason, they purported to determine the existence of a threat of serious injury.

7.128 Article 4.1(b) requires a determination of threat of serious injury to be based on facts. The directors based their determination on the possibility that the volume and prices of future world production and exports would be at the same or higher levels than in 2000. They state that it is based on "the lack of any indicators" that this would not occur.

7.129 Article 4.1(b) prohibits a determination of threat of serious injury based on remote possibility. The directors partly based their determination on a possibility that volumes and prices would be at the same levels as in 2000, which they acknowledged did not present a threat of serious injury. On its own terms, this is not a determination of a threat of serious injury. The directors do not mention any change that they expected in the coming year which would alter the effect of production and exports, so that they must have thought that, at the same levels, they would not present a threat of serious injury. They could not determine a threat of serious injury on the basis of that possibility, even if it did materialize. We note that this was only part of the basis of their determination.

7.130 The directors partly based their determination on the possibility that the volume and prices of future world production and exports would be worse for the domestic industry than in 2000. They recognized that this possibility might not occur at all, since they entertained the possibility that volume and prices might be at the same levels as in 2000, which they had already determined did not present a threat of serious injury.

7.131 In order to succeed on this claim, Chile needs to show that the possibility on which the directors based their claim was "remote" or that it was not based on facts at all. The record shows that it was based on a possibility of the injury caused by future imports, but there is insufficient evidence to conclude that that possibility was remote. The evidence shows that the determination of the threat was at least partly based on the existing quantities and prices of imports, and the evaluation of the injury factors - even if this was inconsistent with Article 4.2(a). There was no real projection from that evidence - which could, for example, have been based on the trends in the data - but that does not indicate a finding not based on facts. For these reasons, we do not find that the determination of threat of serious injury was based not on facts but merely on "remote possibility".

7.132 In view of the above findings, we do not need to consider Chile's claims regarding other alleged deficiencies in the methodology used by the competent authorities in their evaluation of various injury factors, nor its claim regarding the domestic industry's "expansive readjustment" as another factor required to be evaluated under Article 4.2(a).

7.133 In view of our findings at paragraphs 7.99, 7.117 and 7.124, the Panel finds that Argentina acted inconsistently with Article XIX:1(a) of GATT 1994 and Articles 2.1, 4.1(b) and 4.2(a) of the Agreement on Safeguards because the competent authorities, in making their determination of the existence of a threat of serious injury:

(a) did not evaluate, as a formal matter, all of the relevant factors having a bearing on the situation of the domestic industry, in particular, capacity utilization;

(b) did not provide a reasoned and adequate explanation of how the facts supported their determination; and

(c) did not find that serious injury was clearly imminent.

7.134 The Panel does not find that the competent authorities' determination of threat of serious injury was based not on facts but on remote possibility.

4. Causal link

7.135 Chile claims that Argentina acted inconsistently with Articles 2.1, 3.1 and 4.2(b) of the Agreement on Safeguards in making its determination of a causal link between the increased imports and the threat of serious injury. Given that the Panel has found that the competent authorities did not demonstrate the existence of an increase in imports nor a threat of serious injury, there is no need for the Panel to make an assessment of the determination of the existence of a causal link. In view of those findings, it would be impossible for us to continue and find that the competent authorities demonstrated a causal link between increased imports that did not occur and a threat of serious injury that did not exist.⁵⁸¹ However, the Panel can expeditiously produce a record of the competent authorities' evaluation of the causal link, which is consistent with its role as the sole trier of fact in this proceeding under the DSU. That record is set out below.

7.136 The section headed "Causality" in the joint opinion, in its entirety, reads as follows:

"Paragraph 4.2(b) of the WTO Agreement on Safeguards stipulates that the serious injury determination for the purposes of applying a safeguard measure shall not be made "unless [the] investigation demonstrates, on the basis of objective evidence, the existence of the causal link between increased imports of the product concerned and serious injury or threat thereof". It also states that the injury caused by factors other than increased imports shall not be attributed to increased imports.

As concluded in the relevant section, there are signs of injury in the domestic industry which, while it does not yet qualify as serious injury within the meaning of Article 4.1(a) of the Agreement on Safeguards, show a high degree of sensitivity to the change taking place in the market as a result of imports. The behaviour of imports observed towards the end of 2000 shows that they have the capacity, in terms of price and volume, to cause serious injury.

The lack of any indicators in the international market showing that the volume and prices of world production and exports, both in the current year and in future years, would not equal or even exceed the levels for the year 2000, leads to the conclusion of threat of serious injury within the meaning of Article 4.1(b).

The import situation and the degree of variation and sensitivity of the indicators listed and described in Section V.2 prove the existence of a causal link between the investigated imports and the threat of serious injury."⁵⁸²

7.137 The joint opinion does not contain any other references to the causal link condition. The body of the technical report contains no discussion of the causal link, except statements in Part VI which are statements of interested parties during the safeguard investigation. One is a statement by the applicant, CAFIM, that:

"� if imports, irrespective of their origin, continue in the conditions which prevailed prior to the application of the safeguard clause with provisional duties, in particular in relation to the prices of imports from the northern hemisphere, they will cause injury which will prove impossible to remedy and lead to the virtual destruction of domestic production of peaches for processing, as well as of the processing industry itself. It is for this reason that we are requesting the application of definitive safeguard measures � since we feel that the grounds established in the Agreement on Safeguards have all been fully satisfied."⁵⁸³

7.138 Two domestic producers also made statements which could be interpreted as listing a variety of factors causing injury.⁵⁸⁴ The other relevant statements in Part VI of the technical report were made by the European Commission. It said that:

"� with regard to the causal link between increased imports and the threat of serious injury, Argentina has not provided any evidence of a link between the possible injury and the said imports"; and

"� the key sectoral indicators, such as the level of domestic producer profits, increase in production levels, use of installed capacity, exports, average labour productivity indicators and actual and planned investment volumes, discount any form of actual injury or threat of future injury caused by the entry into the country of imported products."⁵⁸⁵

7.139 Neither party has directed the Panel's attention to any additional passages in the competent authorities' report which could show how they made their determination of a causal link.

5. Judicial economy

7.140 Article 11 of the DSU provides that the Panel's function is to assist the DSB in discharging its responsibilities under the DSU and the covered agreements. It does not require us to examine all the legal claims made by Chile. Our findings should assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements. We are mindful of the approach of the Appellate Body in US - Wool Shirts and Blouses that we need only address those claims which we consider necessary for the resolution of the matter between the parties.⁵⁸⁶ At the same time, we are mindful of the balancing consideration expressed by the same body in Australia - Salmon that a panel has to address those claims on which a finding is necessary in order to enable the DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance by a Member with those recommendations and rulings in order to ensure effective resolution of disputes to the benefit of all Members.⁵⁸⁷

7.141 In view of our findings at paragraphs 7.35, 7.82 and 7.133 that Argentina acted inconsistently with Article XIX:1(a) of GATT 1994 and Articles 2.1, 4.1(b) and 4.2(a) of the Agreement on Safeguards, we can conclude that the preserved peaches measure lacks a legal basis under the relevant covered agreements. Further findings on Chile's other claims cannot alter that conclusion and would not further assist the DSB in making sufficiently precise recommendations to allow for prompt compliance by Argentina with those recommendations. Accordingly, the Panel chooses to exercise judicial economy and declines to rule on the claims made under Articles 2.1 and 4.2(b) of the Agreement on Safeguards regarding the causal link, and under Articles 3, 5.1 and 12.2 of the Agreement on Safeguards, regarding the published report, the permissible extent of application of the measure, and notification, respectively.

7.142 Chile requests the Panel to rule on all of the claims presented "in order to ensure that Argentina does not continue to violate these agreements as it has done".⁵⁸⁸ Chile did not offer any explanation as to why ruling on all claims would achieve this objective. Furthermore, we must presume that all Members will comply with their obligations under the covered agreements in good faith, and we have seen no evidence that Argentina will continue to violate the agreements at issue in this dispute. The Panel therefore declines to agree to Chile's request.

VIII. CONCLUSIONS AND RECOMMENDATION

8.1 In the light of our findings, we conclude that the Argentine preserved peaches measure was imposed inconsistently with certain provisions of the Agreement on Safeguards and GATT 1994. In particular:

(a) Argentina acted inconsistently with its obligations under Article XIX:1(a) of GATT 1994 by failing to demonstrate the existence of unforeseen developments as required;

(b) Argentina acted inconsistently with its obligations under Article XIX:1(a) of GATT 1994 and Articles 2.1 and 4.2(a) of the Agreement on Safeguards by failing to make a determination of an increase in imports, in absolute or relative terms, as required;

(c) Argentina acted inconsistently with its obligations under Article XIX:1(a) of GATT 1994 and Articles 2.1, 4.1(b) and 4.2(a) of the Agreement on Safeguards because the competent authorities, in their determination of the existence of a threat of serious injury:

(i) did not evaluate all of the relevant factors having a bearing on the situation of the domestic industry;

(ii) did not provide a reasoned and adequate explanation of how the facts supported their determination; and

(iii) did not find that serious injury was clearly imminent.

8.2 The Panel does not find that Argentina acted inconsistently with its obligations under Articles 2.1 and 4.1(b) of the Agreement on Safeguards by basing a finding of the existence of a threat of serious injury on an allegation, conjecture or remote possibility.

8.3 In light of these conclusions, we decline to rule on Chile's claims that:

(a) Argentina acted inconsistently with its obligations under Article XIX:1(a) of GATT 1994 because the facts before the competent authorities showed that the alleged unforeseen developments were not unforeseen;

(b) Argentina acted inconsistently with its obligations under Article 3 of the Agreement on Safeguards by failing to include in its published report adequate and sufficient findings on all pertinent issues of fact and law;

(c) Argentina acted inconsistently with Articles 2.1 and 4.2(b) of the Agreement on Safeguards in its analysis of a possible causal link between the alleged increased imports and the alleged threat of serious injury;

(d) the level and formulation of the definitive preserved peaches measure are inconsistent with Article 5.1 of the Agreement on Safeguards because they exceed the extent necessary to prevent or remedy the alleged threat of serious injury and to facilitate adjustment; and

(e) Argentina acted inconsistently with Article 12.2 of the Agreement on Safeguards because its notification to the Committee on Safeguards of its finding of alleged threat of serious injury as a result of alleged increased imports failed to include evidence substantiating that finding.

8.4 Under Article 3.8 of the DSU, in cases where there is infringement by a Member of its obligations assumed under a covered agreement, such action is considered prima facie to constitute a case of nullification or impairment of benefits under that agreement. We have seen no evidence in these proceedings that would rebut Chile's prima facie case against Argentina. Accordingly, we conclude that to the extent that Argentina has acted inconsistently with the provisions of the Agreement on Safeguards and GATT 1994, as described in paragraph 8.1, it has nullified or impaired the benefits accruing to Chile under those two agreements.

8.5 We therefore recommend that the Dispute Settlement Body request Argentina to bring its preserved peaches measure into conformity with its obligations under the Agreement on Safeguards and GATT 1994.

IX. ANNEX

A. ABBREVIATIONS USED FOR DISPUTE SETTLEMENT CASES REFERRED TO IN THE REPORT

__________

Return to Index

557 We provisionally translated this term as "labour productivity". We asked Argentina to explain this term and drew attention to the translation. It did not object to our translation.

558 See Argentina's response to question No. 49 of the Panel. Chile was non-committal on the meaning of this term: see Chile's response to question No. 51 of the Panel.

559 See the technical report, page 25.

560 See Chile's first written submission, paragraphs 4.35-4.58.

561 See Appellate Body Report in US - Lamb , paragraphs 137 and 138, quoted in this Report at paragraphs 7.62 and 7.64 above.

562 See Appellate Body Report in US - Lamb , paragraph 106.

563 See Argentina's rebuttal, paragraph 104, referring to charts in the technical report at pages 26, 27, 47 and 49.

564 See Appellate Body Report in US - Lamb , paragraph 137, raised by Argentina in relation to the determination of an increase in imports and quoted above.

565 See Appellate Body Report in US - Lamb , paragraph 138, quoted above.

566 See Table 1 of the technical report. CAFIM indicated that production was identical in 1999 and 2000.

567 See the submission of the Chilean representation to the investigation, reflected in the technical report, page 84.

568 See the technical report, pages 32, 58, 59 and 71.

569 See the separate opinions of Dra. Diana Tussie and Lic. El�as A. Baracat, in the Annex to Record No. 781, Sections V.B and V.C, respectively.

570 See Argentina's first written submission, paragraph 115.

571 See Argentina's second oral statement, paragraph 49.

572 See Argentina's first written submission, paragraph 82.

573 See Argentina's first written submission, paragraph 107.

574 See Chile's first written submission, paragraph 4.32 and its rebuttal, paragraph 35(d).

575 See Appellate Body Report in US - Lamb , paragraph 125.

576 See Annex to Record No. 781, Section V.4 headed "Causality".

577 See Argentina's First Oral Statement, paragraph 53, citing the Appellate Body Report in US - Line Pipe, paragraph 168.

578 See Chile's first written submission, paragraphs 4.32 and 4.69 and its rebuttal, paragraph 35(d).

579 See Chile's first written submission, paragraph 4.68; its rebuttal, paragraph 35(d).

580 See Argentina's first written submission, paragraph 107.

581 This was the approach favoured by the Appellate Body in Argentina - Footwear (EC), paragraph 145.

582 See Annex to Record No. 781, Section V.A.4 headed "Causality".

583 See the technical report, Part VI.1, page 91.

584 See the technical report, pages 77 and 78.

585 See the technical report, pages 88 and 93.

586 See Appellate Body Report in US - Wool Shirts and Blouses, page 19; DSR 1997:I, at p. 340.

587 See Appellate Body Report in Australia - Salmon, paragraph 223.

588 See Chile's first written submi

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