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WORLD TRADE
ORGANIZATION

WT/DS241/R
22 April 2003

(03-1961)

Original: English

ARGENTINA - DEFINITIVE ANTI-DUMPING DUTIES
ON POULTRY FROM BRAZIL

Report of the Panel



The report of the Panel on Argentina - Definitive Anti-Dumping Duties on Poultry from Brazil is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 22 April 2003 pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report. An appeal shall be limited to issues of law covered in the Panel report and legal interpretations developed by the Panel. There shall be no ex parte communications with the Panel or Appellate Body concerning matters under consideration by the Panel or Appellate Body.









Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report. If the Panel Report is appealed to the Appellate Body, it shall not be considered for adoption by the DSB until after the completion of the appeal. Information on the current status of the Panel Report is available from the WTO Secretariat.


TABLE OF CONTENTS


I. introduction

II. FACTUAL ASPECTS

III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

A. brazil

B. argentina

IV. ARGUMENTS OF THE PARTIES

V. ARGUMENTS OF THE THIRD PARTIES

VI. INTERIM REVIEW

A. Previous Mercosur proceedings

B. Claim 10

C. Claim 11

D. Claim 13

E. Claim 17

F. Claim 21

G. Claim 22

H. Claim 27

I. Claims 28 - 30

VII. FINDINGS

A. preliminary issues

1. Disclosure of Written Statements - Article 18.2 of the DSU

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

2. Previous Mercosur Proceedings

(a) Arguments of the parties / third parties

(b) Evaluation by the panel

B. GENERAL ISSUES

1. Standard of Review

2. Burden of Proof

C. Claims concerning the initiation of the investigation / Alleged
    procedural violations during the course of the investigation

1. Sufficiency of Evidence to Justify Initiation of the Investigation - Claims 2, 4, 6 and 8

(a) Arguments of the parties

(i) Claim 2

(ii) Claim 4

(iii) Claim 6

(iv) Claim 8

(b) Evaluation by the Panel 2

(i) Claim 2

(ii) Claim 4

(iii) Claim 6

(iv) Claim 8

(c) Conclusion

2. Sufficiency of the Application - Claims 1 and 5

(a) Arguments of the parties

(i) Claim 1

(ii) Claim 5

(b) Evaluation by the Panel

3. Failure to Reject the Application - Claims 3, 7 and 31

(a) Arguments of the parties

(i) Claims 3 and 7

(ii) Claim 31

(b) Evaluation by the Panel

(i) Claim 31

(ii) Claims 3 and 7

(c) Conclusion

4. Simultaneous Examination of the Evidence and Failure to Reject the Application - Claim 9

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

(c) Conclusion

5. Failure to Notify Known Exporters - Claim 10

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

6. Failure to Give 30 Days to Reply to the Questionnaire / Failure to Provide the
    Injury Questionnaire - Claim 11

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

7. Failure to Make Evidence Available Promptly to Certain Brazilian Exporters - Claim 12

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

8. Interested Party's Right to Defend Its Interests - Claim 13

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

9. Failure to Provide the Full Text of the Written Application in a Timely Manner - Claim 14

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

10. Use of Facts Available - Claims 15, 17 and 19

(b) Arguments of the parties

(i) Claim 15

(ii) Claim 17

(iii) Claim 19

(c) Evaluation by the Panel

(i) Claim 15

(ii) Claim 17

(iii) Claim 19

(d) Conclusion

11. Failure to Provide a Public Notice of Conclusion of an Investigation - Claims 16, 18 and 20

(a) Arguments of the parties

(i) Claim 16

(ii) Claim 18

(iii) Claim 20

(b) Evaluation by the Panel

(c) Conclusion

12. Calculation of an Individual Margin of Dumping - Claim 22

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

13. Essential Facts - Claim 21

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

(c) Conclusion

D. CONDUCT OF THE INVESTIGATION AND FINAL AFFIRMATIVE
     DETERMINATION

1. Failure to Make an Adjustment for Freight Costs - Claim 23

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

2. Failure to Make Various Adjustments for Differences Reported by JOX - Claim 24

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

3. Differences in Physical Characteristics Justifying an Adjustment - Claim 25

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

4. Period of Collection of Dumping Data - Claim 26

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

(c) Conclusion

5. Sampling of Domestic Sales Transactions - Claim 27

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

6. Injury Determination - Claim 32

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

7. Failure to Explain Why the CNCE Examined 1999 Data for Certain Injury Factors but Not
   Others - Claim 33

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

8. Failure to Exclude the Effect of Non-Dumped Imports in the Injury Determination - Claims 34 - 37

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

(c) Conclusion

9. Failure to Examine Each of the Injury Factors and Indices Having a Bearing on the State
   of the Domestic Industry - Claims 38 - 40

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

(i) Productivity

(ii) Factors affecting domestic prices

(iii) Magnitude of the margin of dumping

(iv) Actual and potential negative effects on cash flow, growth, ability to raise capital, or investments

(c) Conclusion

10. Domestic Industry - Claim 41

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

(c) Conclusion

11. Imposition of Variable Duties - Claims 28 - 30

(a) Arguments of the parties / third parties

(b) Evaluation by the Panel

(c) Conclusion

E. violation of article vi of gatt 1994 and article 1 of the AD Agreement

(a) Arguments of the parties

(b) Evaluation by the Panel

(c) Conclusion

VIII. CONCLUSIONS AND RECOMMENDATION

A. Conclusions

B. nullification or impairment

C. Recommendation

LIST OF ANNEXES

ANNEX A (MSWord document)

Brazil

Contents

Page
Annex A-1     First Written Submission of Brazil A-2
Annex A-2     First Oral Statement of Brazil A-103
Annex A-3     Second Written Submission of Brazil A-115
Annex A-4     Replies of Brazil to Questions of the Panel - First Meeting A-143
Annex A-5     Second Oral Statement of Brazil A-173
Annex A-6     Replies of Brazil to Questions of the Panel - Second Meeting A-186
Annex A-7     Comments of Brazil on the Responses of Argentina to the Panel's
                    and to Brazil's Questions - Second Meeting
A-198

ANNEX B (MSWord document)

Argentina

Contents

Page
Annex B-1     First Written Submission of Argentina B-2
Annex B-2     First Oral Statement of Argentina B-64
Annex B-3     Second Written Submission of Argentina B-76
Annex B-4     Replies of Argentina to Questions of the Panel - First Meeting B-90
Annex B-5     Second Oral Statement of Argentina B-116
Annex B-6     Replies of Argentina to Questions of the Panel - Second Meeting B-132
Annex B-7     Replies of Argentina to Questions of Brazil - Second Meeting B-145
Annex B-8     Comments of Argentina on the Responses of Brazil to the Panel's
                     Questions - Second Meeting
B-147
Annex B-9     Comments of Argentina on the Second Oral Statement of Brazil B-151

ANNEX C (MSWord document)

Third Parties
 

Contents

Page
Annex C-1     Third Party Submission of Canada C-2
Annex C-2     Third Party Submission of the European Communities C-5
Annex C-3     Third Party Submission of Guatemala C-17
Annex C-4     Third Party Submission of Paraguay C-21
Annex C-5     Third Party Submission of the United States C-23
Annex C-6     Third Party Oral Statement of Paraguay C-28
Annex C-7     Third Party Oral Statement of Chile C-30
Annex C-8     Third Party Oral Statement of the United States C-31
Annex C-9     Third Party Oral Statement of Canada C-33
Annex C-10    Third Party Oral Statement of the European Communities C-34
Annex C-11     Replies of the European Communities to Questions of the Panel C-37
Annex C-12     Replies of the United States to Questions of the Panel C-39


I. INTRODUCTION

1.1 On 7 November 2001, Brazil requested consultations with Argentina pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"), Article XXII of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"), Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "AD Agreement"), including Article 17.4 thereof, and Article 19 of the Agreement on Implementation of Article VII of GATT 1994 (the "Agreement on Customs Valuation") concerning the Argentine anti-dumping measures imposed in respect of imports of poultry from Brazil.1 Argentina and Brazil held consultations on 10 December 2001, but failed to settle the dispute.

1.2 On 19 November 2001, the European Communities requested, pursuant to Article 4.11 of the DSU, to be joined in the consultations.2

1.3 On 25 February 2002, Brazil requested the establishment of a panel pursuant to Article XXII of the GATT 1994, Article 17 of the AD Agreement and Article 6 of the DSU.3

1.4 At its meeting on 17 April 2002, the Dispute Settlement Body (the "DSB") established this Panel in accordance with Article 6 of the DSU to examine the matter referred to the DSB by Brazil in document WT/DS241/3. At that meeting, the parties to the dispute also agreed that the Panel should have standard terms of reference. The terms of reference are, therefore, the following:

"To examine, in the light of the relevant provisions of the covered agreements cited by Brazil in document WT/DS241/3, the matter referred by Brazil to the DSB in that document, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."

1.5 On 17 June 2002, Brazil requested the Director-General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. This paragraph provides:

"If there is no agreement on the panelists within 20 days after the date of the establishment of a panel, at the request of either party, the Director-General, in consultation with the Chairman of the DSB and the Chairman of the relevant Council or Committee, shall determine the composition of the panel by appointing the panelists whom the Director-General considers most appropriate in accordance with any relevant special or additional rules or procedures of the covered agreement or covered agreements which are at issue in the dispute, after consulting with the parties to the dispute. The Chairman of the DSB shall inform the Members of the composition of the panel thus formed no later than 10 days after the date the Chairman receives such a request".

1.6 On 27 June 2002, the Director-General accordingly composed the Panel as follows:4

    Chairman: Mr. Harsha V. Singh
    Members:
    Ms. Enie Neri de Ross
    Mr. Michael Mulgrew

1.7 Canada, Chile, the European Communities, Guatemala, Paraguay and the United States reserved their rights to participate in the Panel proceedings as third parties.

1.8 The Panel met with the parties on 25-26 September 2002 and 26 November 2002. It met with the third parties on 26 September 2002.

1.9 The Panel submitted its interim report to the parties on 25 February 2003. The Panel submitted its final report to the parties on 8 April 2003.

II. FACTUAL ASPECTS

2.1 This dispute concerns the imposition by Argentina of anti-dumping measures on imports of poultry from Brazil.

2.2 On 2 September 1997, the Centro de Empresas Procesadoras Avícolas (the “CEPA”) filed an application for the initiation of an anti-dumping investigation with the Under-Secretariat for Foreign Trade (the “SSCE”), which subsequently became the Under-Secretariat for Industry, Trade and Mining (the "SSICM"). CEPA alleged that imports of poultry from Brazil into Argentina were taking place at dumped prices and that these imports represented a threat of material injury to the domestic industry.5 On 23 September 1997, the National Foreign Trade Commission (the "CNCE") issued an opinion regarding the representativeness of the domestic industry and, on 21 November 1997, the SSCE accepted the application presented by CEPA.

2.3 On 7 January 1998, the Department of Unfair Trading Practices and Safeguards (the "APCDS"), which subsequently became the Directorate of Unfair Competition (the "DCD"), concluded in its Report on the Feasibility of Initiating an Investigation (the "Report of 7 January 1998") that there was sufficient evidence of dumping to justify initiating an investigation.6 On that same date, the CNCE determined in Record No. 405 that there was not sufficient evidence of injury or threat of injury to justify the initiation of an investigation.7 On 17 February 1998, CEPA presented new and updated information to the Secretariat for Industry, Trade and Mining (the “SICyM”).8 On 18 June 1998, the General Directorate for Legal Affairs (the "DGAJ") of the Ministry of the Economy and Public Works and Services (the "MEyOSP"), at the request of the then Under-Secretariat for Foreign Trade, determined that "… in view of the fact that the information submitted by CEPA … was not evaluated by the National Foreign Trade Commission when ruling on injury to the domestic industry in Record No. 405/98, this Directorate-General considers that before proceeding any further, the said National Commission should be asked to intervene once again in order to rule on the items submitted …".9 Following an examination of the new evidence submitted by CEPA, the CNCE determined in Record No. 464 of 22 September 1998 that there was sufficient evidence of threat of injury to justify the initiation of the investigation.10

2.4 On 20 January 1999, the Secretary for Industry, Trade and Mining (the "Secretary") decided to initiate the anti-dumping investigation concerning poultry from Brazil.11 A Notice of Initiation of the anti-dumping investigation was published in the Official Bulletin on 25 January 1999.

2.5 The CNCE and the DCD sent, on 10 and 16 February 1999, respectively, letters to five Brazilian exporters (i.e., Sadia S.A. (“Sadia”), Avipal S.A. Avicultura e Agropecuaria (“Avipal”), Frigorífico Nicolini Ltda. (“Nicolini”), Seara Alimentos S.A. (“Seara”), and Frangosul S.A. Agro Avícola Industrial (“Frangosul”)) inter alia notifying them of the initiation of the investigation.12

2.6 On 28 June 1999, the CNCE issued its preliminary affirmative injury determination.13 On 6 August 1999, the DCD issued its preliminary affirmative dumping determination.14 On 20 August 1999, the SSCE issued its preliminary affirmative determination on causal link between the allegedly dumped imports and the injury to the domestic industry.15 No provisional measures were imposed.

2.7 On 15 September 1999, various Brazilian exporters, namely Cooperativa Central de Laticínios do Paraná (“CCLP”), Cooperativa Central Oeste Catarinense Ltda. (“Catarinense”), Chapecó Cia. Industrial (“Chapecó”), Cia. Minuano de Alimentos (“Minuano”), Perdigão Agroindustrial (“Perdigão”), and Comaves Industria e Comércio de Alimentos Ltda. (“Comaves”), were contacted by the DCD, and were provided with the same questionnaire sent by the DCD to other exporters on 16 February 1999.16

2.8 On 23 December 1999, the CNCE issued its final affirmative injury determination.17 The DCD issued its final affirmative dumping determination on 23 June 2000.18 The dumping margins found for Sadia, Avipal and all other exporters were 14.91 per cent, 15.48 per cent and 8.19 per cent, respectively. No dumping margin was found with regard to Nicolini and Seara. On 17 July 2000, the SSICM issued its final affirmative determination of causal link between the dumped imports and the injury to the domestic industry.19

2.9 Based upon the final dumping, injury and causal link determinations, the Ministry of Economics (the "ME"), formerly the MEyOSP, issued Resolution No. 574 of 21 July 2000, imposing definitive anti-dumping measures on imports of poultry from Brazil for a period of three years.20 Such measures took the form of specific anti-dumping duties to be collected as the absolute difference between the f.o.b. price invoiced in any one shipment and a designated “minimum export price” also fixed in f.o.b. terms, to be applied whenever the former price was lower than the latter. A “minimum export price” of US$0.92 per kilogram was established for Sadia, and US$0.98 per kilogram for Avipal and all other exporters. No measures were imposed on the Brazilian exporters Nicolini and Seara because they were found not to be exporting poultry at dumped prices. Resolution No. 574 was published in the Official Bulletin of 24 July 2000.

2.10 On 30 August 2000, in conformity with Article 2 of the MERCOSUR Protocol of Brasilia, Brazil requested the initiation of direct negotiations with Argentina on Resolution No. 574. On 24 January 2001, Brazil gave notice of its intention to initiate the arbitral proceedings provided for in Article 7 of the Protocol of Brasilia. A MERCOSUR Ad Hoc Arbitral Tribunal made its award on 21 May 2001. In accordance with Article 22 of the Protocol of Brasilia, following the award, the Arbitral Tribunal issued a clarification thereof on 18 June 2001.

III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

  1. brazil

3.1 In its first written submission, Brazil requested that the Panel:

(a) find that Argentina has acted inconsistently with the AD Agreement as per the claims below:

  • Petitioner’s application presented a calculation to adjust normal value in view of alleged physical characteristic differences between poultry sold to Argentina and poultry sold in Brazil. The application did not offer relevant evidence of such differences contrary to the requirement set out in Article 5.2 (Claim 1). By accepting petitioner’s adjustment calculation, Argentina failed to examine the accuracy and adequacy of the evidence presented in the application pursuant to Article 5.3 (Claim 2), and to reject the application as provided in Article 5.8 (Claim 3);

  • Argentina acted inconsistently with Article 5.3 (Claim 4) by establishing export prices based only on export transactions with prices below normal value;

  • Petitioner’s application presented export price and normal value data for different periods. Specifically, the application presented normal value data for only one day in 1997 (30 June 1997), which cannot be considered relevant evidence to establish normal value pursuant to Article 5.2 (Claim 5). By calculating a dumping margin by making a comparison between export price and normal value in respect of sales that were not made at as nearly as possible the same time and by establishing normal value for only one day in 1997, Argentina failed to examine the accuracy and adequacy of the evidence provided in the application as required by Article 5.3 (Claim 6), and to reject the application pursuant to Article 5.8 (Claim 7);

  • By comparing different periods of data collected for dumping and injury, Argentina incorrectly examined the evidence provided in the application, violating Article 5.3 (Claim 8);

  • Argentina has acted inconsistently with Article 5.7 (Claim 9) by not considering, in the determination whether or not to initiate the investigation, the data collected for dumping simultaneously with the data collected for injury;

  • Argentina failed to notify seven Brazilian exporters when it was satisfied that there was sufficient evidence to justify the initiation of the anti-dumping investigation. By not notifying these exporters when the investigation was initiated, Argentina acted inconsistently with Article 12.1 (Claim 10);

  • Argentina failed to give the seven Brazilian exporters at least 30 days to reply to the dumping questionnaires provided by the DCD in a prima facie violation of Article 6.1.1 (Claim 11). Moreover, the CNCE never notified these seven exporters and never provided them with the injury questionnaire;

  • Argentina also failed to promptly make available to the seven Brazilian exporters evidence presented in writing by the other interested parties involved in the investigation, in violation of Article 6.1.2 (Claim 12);

  • By failing to give the seven exporters the required time to respond to the questionnaires and not promptly making available to these exporters the evidence presented in writing by the other interested parties involved in the investigation, Argentina did not give these exporters full opportunity for the defence of their interests as required by Article 6.2 (Claim 13);

  • Argentina acted inconsistently with Article 6.1.3 (Claim 14) by not providing the text of the written application to the Brazilian exporters and to the Government of Brazil as soon as the investigation was initiated;

  • Argentina acted inconsistently with Article 6.8 and Annex II (Claim 15) by disregarding the responses submitted by Brazilian exporters with respect to the description of the product sold to Argentina and in Brazil, and resorting to the normal value adjustment calculation provided by petitioner in the application;

  • Argentina acted inconsistently with Article 12.2.2 (Claim 16) by failing to adequately explain in the final determination its decision to disregard the information provided by the exporters regarding the product description and to use instead the normal value adjustment proposed by petitioner;

  • Argentina acted inconsistently with Article 6.8 and Annex II (Claim 17) by disregarding the export price data provided by the Brazilian exporters, and resorting to the export price information provided by the Argentinean Livestock Directorate of the Secretariat for Agriculture, Livestock, Fisheries and Food;

  • Argentina acted inconsistently with Article 12.2.2 (Claim 18) by failing to adequately explain in the final determination its decision to disregard the export price data provided by the Brazilian exporters, and to resort to the export price data provided by the Argentinean Livestock Directorate of the Secretariat for Agriculture, Livestock, Fisheries and Food;
     

  • Argentina acted inconsistently with Article 6.8 and Annex II (Claim 19) by disregarding all normal value information submitted by two Brazilian exporters, and resorting to the information provided by petitioner;

  • Argentina acted inconsistently with Article 12.2.2 (Claim 20) by failing to adequately explain in the final determination its decision to disregard all normal value information submitted by two Brazilian exporters, and to resort to the information provided by petitioner;

  • Argentina failed to inform the Brazilian exporters of the essential facts under consideration which formed the basis for the decision whether to apply definitive measures, thereby preventing the Brazilian exporters from adequately defending their interests, contrary to the requirement set forth in Article 6.9 (Claim 21);

  • Argentina failed to establish individual margins of dumping for two Brazilian exporters, as required by Article 6.10 (Claim 22);

  • Argentina acted inconsistently with Article 2.4 (Claim 23) by not making due allowance for differences in freight in the normal value established for two Brazilian exporters;
     

  • Argentina acted inconsistently with Article 2.4 (Claim 24) by not making due allowance for differences in taxation, freight and financial cost in the normal value established for all other exporters;

  • Argentina acted inconsistently with Article 2.4 (Claim 25) by incorrectly making allowances to normal value based on alleged physical characteristic differences between the product sold in Brazil and Argentina;

  • Argentina acted inconsistently with Article 2.4 (Claim 26) by imposing an unreasonable burden of proof on three Brazilian exporters by not determining the dumping period of investigation and, thus, allowing these exporters to submit dumping information for the years 1996 through 1999, when the dumping period of investigation was later determined as from January 1998 through January 1999;

  • Argentina acted inconsistently with Article 2.4.2 (Claim 27) by establishing a dumping margin based on an incorrect comparison between the export price and the normal value for two Brazilian exporters. Argentina established normal value based only on internal market transactions for which invoices were presented, instead of determining normal value based on all the reported transactions in the internal market for the period. The DCD established the margins of dumping for these two Brazilian exporters on the basis of a comparison of a weighted average statistical sample of normal value with a weighted average of prices of all comparable export transactions;

  • Argentina has acted inconsistently with Article 9.2 (Claim 28) and Article 9.3 (Claim 29) by imposing a variable anti-dumping duty that can exceed the margin of dumping established in the final determination;

  • Argentina acted inconsistently with Article 12.2.2 (Claim 30) by failing to provide how the “minimum export price” was established in the determination to impose definitive anti-dumping duties;
     

  • Argentina acted inconsistently with Article 5.8 (Claim 31) by failing to reject the application and promptly terminate the investigation, as soon as the CNCE determined in Record No. 405 that there was insufficient evidence of injury or threat of injury to justify the initiation of the investigation;

  • By using different periods to evaluate the relevant economic factors and indices listed in Article 3.4, Argentina failed to make a final injury determination based on positive evidence and involving an objective examination as provided for in Articles 3.1, 3.4 and 3.5 (Claim 32);

  • Argentina acted inconsistently with Article 12.2.2 (Claim 33) by failing to explain in the final determination why the CNCE examined the relevant economic factors and indices listed in Article 3.4 based on different periods;

  • The injury analysis in the final determination did not exclude the imports of two Brazilian exporters, even though the DCD considered that these were not “dumped imports”. By not excluding the imports of these two Brazilian exporters from the “dumped imports”, the CNCE did not properly consider the volume of the “dumped imports”, the effect of the “dumped imports” on prices, and the impact of the “dumped imports” on the domestic industry, as provided for in Articles 3.2 (Claim 34) and 3.4 (Claim 36). The flawed evaluation of the “dumped imports” indicates that the final injury determination was not based on positive evidence and did not involve an objective examination as required by Article 3.1 (Claim 35);

  • By not excluding the imports from these two Brazilian exporters from the “dumped imports”, Argentina failed to properly consider injury as prescribed in Article 3.1, and, consequently, did not properly demonstrate the causal link between the “dumped imports” and the injury to the domestic industry as provided for in Article 3.5 (Claim 37);

  • Argentina acted inconsistently with Articles 3.4 (Claim 38) and 3.1 (Claim 39) by failing to evaluate all the relevant economic factors and indices listed in Article 3.4;

  • Argentina acted inconsistently with Article 12.2.2 (Claim 40) by failing to adequately provide and consider in the final determination the evaluation of all relevant economic factors and indices listed in Article 3.4;

  • Argentina has acted inconsistently with Article 4.1 (Claim 41) by considering that 46 per cent constituted the major proportion of the total domestic production of poultry in Argentina and, thus, qualified as the domestic industry; and

  • By determining dumping, injury and causal link inconsistently with the provisions of the AD Agreement, Argentina has acted inconsistently with Article VI of GATT 1994 and Article 1 of the AD Agreement.

(b) recommend that the DSB request Argentina to bring these actions into conformity with GATT 1994 and the AD Agreement;

(c) suggest ways in which Argentina could implement the Panel’s recommendations, as provided in Article 19.1 of the DSU; and

(d) suggest that, in light of the numerous outcome-decisive violations of the AD Agreement that Argentina immediately repeal Resolution No. 574/2000 imposing definitive anti-dumping duties on eviscerated poultry from Brazil.21

  1. argentina

3.2 In its first written submission, Argentina requested that the Panel:

(a) refrain from ruling on the forty-one claims of inconsistency with various provisions of the AD Agreement submitted by Brazil.

If the Panel should decide not to accede to the above request, Argentina requested that the Panel:

(b) reject Brazil's claims that Resolution No. 574/2000 of the Ministry of the Economy of Argentina is inconsistent with:

  • Articles 5.2, 5.3, 5.7 and 5.8 of the AD Agreement;

  • Article 12.1 of the AD Agreement;

  • Articles 6.1.1, 6.1.2, 6.1.3, 6.2 and 6.8, and paragraphs 3, 5, 6 and 7 of
    Annex II, and Articles 6.9 and 6.10 of the AD Agreement;

  • Articles 2.4 and 2.4.2 of the AD Agreement;

  • Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement;

  • Article 4.1 of the AD Agreement;

  • Articles 9.2 and 9.3 of the AD Agreement;

  • Article 12.2.2 of the AD Agreement.

(c) reject the request for the immediate repeal of Resolution No. 574/2000 imposing definitive anti-dumping duties.22

IV. ARGUMENTS OF THE PARTIES

4.1 The arguments of the parties, as contained in their submissions to the Panel, are attached as Annexes (see List of Annexes, page vi).

4.2 The parties' answers to questions both from the Panel and from the other party, and their comments on each other's answers, are also attached as Annexes (see List of Annexes, page vi).

V. ARGUMENTS OF THE THIRD PARTIES

5.1 The arguments of the third parties, Canada, Chile, the European Communities, Guatemala, Paraguay and the United States, are set out in their submissions to the Panel and are attached to this Report as Annexes. The third parties' answers to the Panel's questions are also attached as Annexes (see List of Annexes, page vi).

VI. INTERIM REVIEW

6.1 The Panel issued the draft descriptive (factual and argument) sections of its report to the parties on 20 December 2002 in accordance with Article 15.1 of the DSU. Both parties offered written comments on the draft descriptive sections on 13 January 2003. The Panel noted all these comments and amended the draft descriptive part where appropriate. The Panel issued its Interim Report to the parties on 25 February 2003 in accordance with Article 15.2 of the DSU. On 11 March 2003, both parties requested that the Panel review precise aspects of the Interim Report. Neither of the parties requested an interim review meeting. On 18 March 2003, both parties submitted written comments on the other party's written requests for interim review. The Panel carefully reviewed the arguments made, and addresses them below, in accordance with Article 15.3 of the DSU.23

  1. Previous Mercosur proceedings

6.2 Argentina asked the Panel to include a reference to the prior MERCOSUR proceedings in Section II (Factual Aspects) of the Report. Brazil asked the Panel to reject this request. Having considered carefully the arguments of the parties, we have included a reference to the prior MERCOSUR proceedings in Section II (Factual Aspects) of the Report.

6.3 Concerning paragraphs 7.35 and 7.36 of the Interim Report (paras 7.35 and 7.36 of the final Report), Argentina referred to the Appellate Body report in United States - Tax Treatment for "Foreign Sales Corporations"24 to invoke a "principle of good faith with respect to the objective presentation of the facts of a dispute".25 We note that the Appellate Body in that case was referring to the requirement for both complaining and responding Members "to comply with the requirements of the DSU (and related requirements in other covered agreements) in good faith".26 However, since Argentina has not argued that Brazil failed to comply with any requirements of the DSU (or related requirements in other covered agreements) in bringing these proceedings, good faith compliance with those requirements is not an issue in the present case. The Appellate Body report in US - FSC is therefore not relevant in the present case.

6.4 Argentina made a number of comments regarding paragraphs 7.38 and 7.39 (paras. 7.38 and 7.39 of the final Report). However, we saw nothing in Argentina's comments that caused us to make any changes to the Report.

6.5 In light of an issue raised by Argentina, we have deleted footnote 52 of the Interim Report.

6.6 Concerning para. 7.41 of the Interim Report (para. 7.41 of the final Report), Argentina asserted that the MERCOSUR ruling should be taken into account "for the purposes of interpretation of the current dispute" (emphasis in original). However, Argentina still failed to point to any element of the MERCOSUR ruling that would require the Panel to interpret specific provisions of the WTO agreements in a particular way. Argentina effectively wanted the Panel to "interpret" the WTO agreements in such a way that it follows the MERCOSUR ruling and finds against Brazil. This, however, would go beyond the mere interpretation of specific WTO provisions: it would be tantamount to requiring the Panel to rule in a particular way. This argument was already addressed in para. 7.41 of the Interim Report.

  1. Claim 10

6.7 Brazil made a number of comments regarding the scope of the Panel's findings under this Claim. In particular, Brazil asserted that our findings should include Catarinense. We have amended our findings to resolve the issues raised by these comments.

  1. Claim 11

6.8 Brazil asserts that the Panel erred by stating in the Interim Report that Brazil initially claimed that Penabranca was notified by the DCD on 15 September 1999 and that only at a subsequent stage did Brazil assert that there was no evidence on the record indicating that the DCD ever contacted or notified the exporter Penabranca of the investigation. Brazil refers to footnotes 18 and 78 of Brazil’s first written submission which provide that “from the documents of the investigation to which Brazil had access to, Brazil was not able to find the DCD’s notification to the Brazilian exporter Penabranca”. As a result, we made changes to our characterization of Brazil's presentation of evidence regarding Penabranca.

6.9 Argentina disagrees with certain views expressed by the Panel in para. 7.143 of the Interim Report. First, we understand Argentina to argue that the requests for information sent to certain Brazilian exporters on 15 September 1999 cannot be considered to be "questionnaire[s]" within the meaning of Article 6.1.1 of the AD Agreement. Although we slightly amended para. 7.143 of the Interim Report, this does not affect our conclusion that those requests were "questionnaires" within the meaning of Article 6.1.1. We also understand Argentina to argue that it never stated "that the total time-period for the [reply of] questionnaire responses was 30 days including the extension."27 As a result, we made changes in respect of paras. 7.144 and 7.145 of the Interim Report. The abovementioned changes resulted in the bulk of paras 7.143, 7.144 and 7.145 of the Interim Report being deleted. The remnants of these paragraphs are set forth in para. 7.140 of the final Report.

  1. Claim 13

6.10 Brazil identified an inconsistency in the Interim Report between the scope of the Panel's Article 6.2 findings and the Panel's treatment of Penabranca under other claims. We have addressed this inconsistency by modifying the Panel's treatment of Penabranca in Claims 10, 11 and 12.

6.11 Brazil also raised general concerns regarding the Panel's treatment of one of its Article 6.2 claims. Upon close inspection of Brazil's Request for Establishment of a panel, we find that the specific Article 6.2 claim at issue falls outside our terms of reference. We have modified our findings accordingly.

  1. Claim 17

6.12 Argentina points to an inconsistency in the Panel's review of the DCD's treatment of data submitted by Catarinense in the context of Claims 17 and 19 (paras. 7.189 and 7.190 of the Interim Report / paras 7.187 and 7.188 of the final Report). Argentina asserts that, to the extent that the Panel found that the DCD was entitled to reject Catarinense's normal value data because it had failed to comply with an accreditation obligation, the Panel should also find that the DCD was entitled to reject Catarinense's export price data for the same reason. Brazil, on the other hand, requests us to affirm the conclusion in para. 7.190 of the Interim Report (para. 7.188 of the final Report).

6.13 We have examined carefully Argentina's comments, and agree that Catarinense's failure to comply with the relevant accreditation obligation should cause us to reject both Claims 17 and 19 regarding that exporter. We have amended our findings regarding Claim 17 accordingly (see para. 7.184 of the final Report).

6.14 Brazil requested us to verify whether the investigating authority had requested Catarinense to provide the information to have authorized legal status / accreditation. We consider that the correspondence referred to by Brazil in Exhibit BRA-27 shows that the DCD informed Catarinense of the need to comply with certain domestic procedures set forth in Law No. 19,549 and Decrees No. 1759/72 and 1883/91.28 Brazil further asserts that Argentina's argument that Catarinense's export data was disregarded because of lack of accreditation constitutes ex post rationalization.29 We do not agree with Brazil. In this regard, we note that the Report of 4 January 200030 and the Final Affirmative Dumping Determination contain31 statements that the investigating authority informed Catarinense of the requirements under Law 19,549 and Decrees 1759/72 and 1883/91 with respect to submissions to the Administration.

6.15 Brazil argues that, by using the export price found for all other exporters instead of the individual export price found for Catarinense, the authority failed to use special circumspection in basing its export price findings on a secondary source of information. We note that Argentina did not determine an individual margin of dumping for Catarinense (contrary to Article 6.10 of the AD Agreement (Claim 22)). Since Argentina was not entitled to use an "all other exporters" rate for Catarinense, we see no need to consider whether or not Argentina exercised special circumspection in doing so.

  1. Claim 21

6.16 Brazil requests the Panel to reverse its findings in para. 7.231 of the Interim Report (para. 7.229 of the final Report). Brazil bases such request on the fact that a party needs to know what information is not ultimately going to be used in the final determination by the investigating authority in order to provide reasons and arguments in its defence.32 However, we see nothing in Brazil's comments that would cause us to change our interpretation of the plain meaning of Article 6.9 of the AD Agreement.

  1. Claim 22

6.17 Argentina asserts that none of the paragraphs of Annex II to the AD Agreement establishes an obligation to determine an individual margin of dumping in cases in which the exporters have not cooperated in the investigation. For this reason, Argentina asserts that, when an investigating authority must resort to applying the rules of Annex II owing to lack of cooperation on the part of the interested party, the general rule laid down by Article 6.10 of the AD Agreement no longer applies. In particular, Argentina asserts that the general rule imposed by Article 6.10 does not apply to Catarinense, an exporter which was found by the Panel not to have accredited legal status in the context of the investigation before the Argentine authorities. With respect to Argentina's comments, Brazil asserts that the fact that an exporter has not submitted the relevant and appropriate information to establish normal value and export price does not exclude the authority’s obligation under Article 6.10 to calculate an individual margin of dumping.

6.18 We fully addressed the relationship between Articles 6.10, on the one hand, and 6.8 and Annex II to the AD Agreement, on the other, in paras. 7.217 and 7.218 of the Interim Report (paras. 7.215 and 7.216 of the final Report). We see nothing in Argentina's comments that would cause us to amend our findings and conclusion with respect to this claim.

  1. Claim 27

6.19 Argentina made a number of comments regarding the Panel's findings under Claim 27. In short, Argentina accepts the Panel's finding "with respect to the obligation to consider all of the transactions carried out in the ordinary course of trade to calculate the normal value", but challenges the Panel's finding of violation. Argentina submits that all the relevant domestic transactions are considered if a statistically valid sample is used.

6.20 Although there may be circumstances where an investigating authority may find it useful to use statistically valid samples of domestic sales transactions for the purpose of establishing normal value, such sampling is not envisaged by the plain meaning of Article 2.4.2, read in light of Article 2.2.1. Accordingly, we see no reason to change our findings on this matter.

  1. Claims 28 - 30

6.21 With respect to Claims 28 - 30, Brazil stated that it was not claiming that variable anti-dumping duties were per se inconsistent with Articles 9.2 and 9.3 of the AD Agreement. We have amended our report accordingly.

6.22 Brazil also made other arguments in support of its Claims 28 - 30. While these additional arguments resulted in some minor changes to the Panel's reasoning, the findings and conclusions of the Panel remain unchanged.

6.23 We note that Brazil seeks to suggest that our findings would enable a Member to "calculate a dumping margin in the investigation and apply any duty it saw fit".33 This is plainly not the case, since the amount of duty to be collected must never exceed the relevant margin of dumping. The fact that the Panel finds that variable anti-dumping duties need not be limited to the margin of dumping established in the investigation does not mean that a Member may apply any variable anti-dumping duty it sees fit.

VII. FINDINGS

7.1 This case raises issues concerning the initiation of the anti-dumping investigation on poultry from Brazil, the conduct of that investigation, and the imposition of final measures. Before addressing Brazil's claims, we shall first examine two preliminary issues raised in these proceedings, and then consider a number of general issues relevant to these proceedings.

A. preliminary issues

7.2 Argentina has raised two preliminary issues.34 The first concerns the disclosure of written statements under Article 18.2 of the DSU. The second concerns earlier MERCOSUR dispute settlement proceedings regarding the anti-dumping measure at issue.

1. Disclosure of Written Statements - Article 18.2 of the DSU

(a) Arguments of the parties / third parties

7.3 By letter dated 8 August 2002, Brazil informed the Panel that it had received a request from a non-party Member for a non-confidential summary of the information contained in its submission that could be disclosed to the public. Brazil informed the Panel that it had classified as non-confidential the volume containing the text of its first submission, while the four volumes containing the exhibits to the first submission would be treated as confidential. Brazil stated that it would make the first (non-confidential) volume of its first written submission available to the public, after providing Argentina an opportunity to indicate whether that volume should be revised to exclude any information deemed to be confidential.

7.4 By letter dated 15 August, Argentina objected to Brazil's decision to make the entirety of its first written submission (excluding exhibits) available to the public. Argentina submitted that a Member is only entitled by Article 18.2 of the DSU to disclose written statements of its positions. It is not entitled to disclose the entirety of its written submissions to the panel, since such submissions should remain confidential. According to Argentina, Article 18.2 of the DSU draws a clear distinction between "written submissions" and position "statements". Argentina did not allege that any of the information that Brazil proposed to make available was confidential.

7.5 On 21 August 2002, Brazil informed the Panel that it had made its first written submission (excluding those volumes containing exhibits) available to the public. Brazil noted that Argentina had not raised any issues regarding the confidentiality of information that Brazil had initially proposed to make available. Regarding the interpretation of Article 18.2 of the DSU, Brazil asserted inter alia that the DSU does not define the limit or scope, length, shape, form, or content of "statements" that may be disclosed by a party to a dispute. Brazil asserted that in the present case the relevant "statements" were identical to Brazil's first written submission minus exhibits.

7.6 On 23 August 2002, Canada submitted that Argentina's interpretation of Article 18.2 of the DSU was inconsistent with the spirit of transparency informing the operations of the WTO and the dispute settlement mechanism. Canada also asserted inter alia that Argentina's distinction between "written submission" and "statement" was formalistic, since a Member may consider that the most authoritative "statement" of its position in a WTO dispute was to be found in its written submissions.

7.7 On 27 August 2002, Argentina asserted that "if the Panel understands that the terms 'written submissions' and 'statements' in Article 18.2 of the DSU have the same meaning, Argentina would be ready to accept such interpretation". On the same date, Argentina asked the Panel to express its "view" on this matter.

7.8 On 9 September 2002, in its third party submission, the United States requested that the Panel decline to provide views on the proper interpretation of Article 18.2 of the DSU. The United States argued inter alia that Article 18.2 of the DSU falls outside the Panel's terms of reference, and that the Panel would effectively be providing an interpretation of that provision, contrary to the exclusive authority of the Ministerial Conference and General Council under Article IX:2 of the Marrakesh Agreement Establishing the World Trade Organization ("WTO Agreement") to interpret that Agreement.

7.9 On 26 September 2002, during the Panel's first substantive meeting with the parties, Argentina stated that it did not oppose Brazil's right to make its first written submission available to the public. However, Argentina considered that Brazil should not have made its first written submission available to the public so early in the Panel proceedings. Argentina asserted that, consistent with paragraph 11 of the Panel's working procedures (whereby the parties' submissions shall be included in the Panel report), Brazil's first written submission should only have been made public once the Panel's report was published.

7.10 Following Argentina's statement during the Panel's first substantive meeting with the parties, the Panel put the following question to Argentina:

"Argentina stated at this morning's meeting that it was not opposed, as a matter of principle, to Brazil having made its first written submission available to the public. Instead, Argentina was concerned with the timing of Brazil's action. Does this mean that Argentina accepts that a Member may make its written submissions to a panel available to the public at some point in time without infringing Article 18.2 of the DSU? Would Brazil violate DSU Article 18.2 if it made its written submissions available to the public after the Panel issued its final report?"

7.11 Argentina replied "Yes, following the provisions of the Article 18.2 of the DSU" to the first part of the Panel's question, and "No" to the second part thereof.35

(b) Evaluation by the Panel

7.12 Before addressing the substance of the preliminary issue raised by Argentina, we shall first examine the US argument that we should decline to rule on the matter raised by Argentina. By virtue of Article 1.1 of the DSU, the provisions of the DSU apply to all WTO dispute settlement proceedings, subject to certain special or additional rules and procedures on dispute settlement identified in Appendix 2 to the DSU. The provisions of the DSU therefore apply in all cases, whether or not they are mentioned in a Member's request for establishment of a panel. Indeed, we are not being asked to rule on whether a measure identified in the request for establishment is consistent with Article 18.2 of the DSU. Rather, we are being asked to make such rulings in respect of Article 18.2 of the DSU as are necessary to manage procedural aspects of these proceedings. By ruling in respect of Article 18.2 of the DSU, we are simply acting in conformity with Article 1.1 of the DSU.36 We are not purporting to make an interpretation within the meaning of Article IX:2 of the WTO Agreement. Accordingly, we reject the US argument that the Panel should decline to rule on the matter raised by Argentina.

7.13 This issue concerns Article 18.2 of the DSU, which provides that:

"Written submissions to the panel or the Appellate Body shall be treated as confidential, but shall be made available to the parties to the dispute. Nothing in this Understanding shall preclude a party to a dispute from disclosing statements of its own positions to the public. Members shall treat as confidential information submitted by another Member to the panel or the Appellate Body which that Member has designated as confidential. A party to a dispute shall also, upon request of a Member, provide a non-confidential summary of the information contained in its written submissions that could be disclosed to the public."

7.14 On substance, we agree with Canada that Argentina's interpretation37 of Article 18.2 of the DSU results in a formalistic distinction between the terms "written submission" and "statement". In doing so, Argentina negates that a party's written submissions to a panel necessarily contain statements of that party's positions. In our view, the first two sentences of Article 18.2 of the DSU should not be read in formalistic isolation of one another. Read together, and in context of one another, the first two sentences of Article 18.2 of the DSU mean that while one party shall not disclose the submissions of another party, each party is entitled to disclose statements of its own positions, subject to the confidentiality requirement set forth in the third sentence of Article 18.2 of the DSU. We recall that a party's written submissions to a panel necessarily contain statements of that party's positions. In our view, therefore, disclosing submissions to a panel is one way for a party to disclose statements of its positions. If a party chooses to make public the totality of the statements of its own position contained in its written submission, it is entitled to do so, provided the confidentiality requirement of the third sentence of Article 18.2 of the DSU is respected. Since Argentina has not argued that Brazil violated its confidentiality obligation, we do not consider that Brazil's decision to disclose the entirety of the statements of position contained in its first written submission to the Panel (excluding exhibits) was inconsistent with Article 18.2 of the DSU.38

7.15 Furthermore, we note that, by the time of our first substantive meeting with the parties, Argentina was no longer arguing that Brazil was not entitled to make the entirety of its written submissions to the Panel available to the public during the Panel proceedings. Implicitly, therefore, Argentina ultimately agreed that Brazil was entitled to make its written submission available to the public pursuant to Article 18.2 of the DSU. Although Argentina argued that Brazil should not have done so until after publication of the Panel's report, we find no basis for this argument in Article 18.2 of the DSU. Article 18.2 sets no temporal limits on Members' rights and obligations under that provision. Nor do we find any basis for this argument in paragraph 11 of the Panel's Working Procedures, which concerns the preparation of the descriptive part of the Panel's report.39 We see nothing in this provision which would impose any limits on rights accruing to Members under Article 18.2 of the DSU.

7.16 In conclusion, we do not consider that Brazil's decision to disclose the entirety of the statements of position contained in its first written submission to the Panel (excluding exhibits) was inconsistent with Article 18.2 of the DSU.

2. Previous Mercosur Proceedings

7.17 Argentina has raised a preliminary issue concerning the fact that, prior to bringing WTO dispute settlement proceedings against Argentina's anti-dumping measure, Brazil had challenged that measure before a MERCOSUR Ad Hoc Arbitral Tribunal. Argentina requests that, in light of the prior MERCOSUR proceedings, the Panel refrain from ruling on the claims raised by Brazil in the present WTO dispute settlement proceedings. In the alternative, Argentina asserts that the Panel should be bound by the ruling of the MERCOSUR Tribunal.

(a) Arguments of the parties / third parties

7.18 Argentina considers that Brazil's conduct in bringing the dispute successively before different fora, first MERCOSUR and then the WTO, constitutes a legal approach that is contrary to the principle of good faith and which, in the case at issue, warrants invocation of the principle of estoppel. Argentina is not invoking the principle of res judicata. In the alternative, Argentina submits that in view of the relevant rule of international law applicable in the relations between parties pursuant to Article 31.3(c) of the Vienna Convention on the Law of Treaties ("Vienna Convention"),40 in the light of Article 3.2 of the DSU the Panel cannot disregard, in its consideration and substantiation of the present case brought by Brazil, the precedents set by the proceedings in the framework of MERCOSUR.

7.19 Argentina asserts that, in the framework of MERCOSUR, it is a standing practice for all parties - including Brazil - to accept the obligations deriving from the legislative framework in force, including the MERCOSUR Treaty of Asunción and the Protocol of Brasilia. In Argentina's view, a State party is not acting in good faith if it first has recourse to the mechanism of the integration process to settle its dispute with another State party and then, dissatisfied with the outcome, files the same complaint within a different framework, making matters worse by omitting any reference to the previous procedure and its outcome.

7.20 Argentina asserts that the essential elements of estoppel are "(i) a statement of fact which is clear and unambiguous; (ii) this statement must be voluntary, unconditional, and authorized; (iii) there must be reliance in good faith upon the statement … to the advantage of the party making the statement".41 Argentina submits that Brazil's previous conduct with respect to the acceptance of awards, confirmed by the signature of the Protocol of Olivos, invalidates the complaint against Argentina that Brazil is now trying to substantiate on the basis of the DSU. Argentina submits that there is no provision or rule that prohibits a WTO panel from examining, and where it deems appropriate applying, the principle of estoppel. Argentina asserts that estoppel is a principle of international law and, according to the Appellate Body in US - Gasoline, there is "a measure of recognition that the General Agreement is not to be read in clinical isolation from public international law."42 Argentina asserts that WTO panels are called upon to apply public international law to settle the disputes brought before them, and that previous panels have addressed the principle of estoppel.

7.21 Argentina's alternative argument is based on Article 31.3(c) of the Vienna Convention. Argentina submits that Article 3.2 of the DSU provides a rule of interpretation for the Panel, and WTO legal practice has confirmed that rule by referring to Articles 31 and 32 of the Vienna Convention. Argentina asserts that, in accordance with Article 31.3(c) of the Vienna Convention, the interpretation of a treaty must take account of all relevant rules of international law applicable between the parties at the time of implementation. In Argentina's view, the regulatory framework of MERCOSUR and the legal consequences deriving from the implementation of the Protocol of Brasilia by the Ad Hoc Arbitral Tribunal in the case at issue are relevant rules of public international law within the meaning of Article 31.3(c) of the Vienna Convention, such that the Panel is bound by earlier MERCOSUR rulings regarding the measure at issue.

7.22 Brazil submits that the principle of estoppel is not applicable in the present case, in part because the dispute before the MERCOSUR Tribunal was grounded on a different legal basis from the dispute before this Panel. In any event, Brazil asserts that the principle of estoppel means that “a party is prevented by his own acts from claiming a right to the detriment of other party who was entitled to rely on such conduct and has acted accordingly.”43 As noted by the panel in EEC (Member States) - Bananas I, “estoppel could only result from the express, or in exceptional cases implied, consent of such parties or of the CONTRACTING PARTIES”44. According to Brazil, the simple fact that it had brought a similar dispute to the MERCOSUR Tribunal does not represent that Brazil has consented not to bring the current dispute before the WTO, especially when the dispute before this Panel is based on a different legal basis than the dispute brought before the MERCOSUR Tribunal. Brazil asserts that the MERCOSUR Protocol of Olivos on Dispute Settlement, signed on 18 February 2002, cannot be raised here as an implicit or express consent by Brazil to refrain from bringing the present case to the WTO dispute settlement, again because the object of the earlier MERCOSUR proceedings was different from the object of the present WTO proceedings. Furthermore, the Protocol of Olivos does not apply to disputes that have already been concluded under the Protocol of Brasilia.

7.23 Regarding Argentina's reference to Article 3.2 of the DSU, Brazil asserts that Article 3.2 deals exclusively with the clarification of the existing provisions of the WTO agreements and does not provide that a previous ruling by an international tribunal constrains a WTO panel’s interpretation of a WTO agreement. In fact, Article 3.2 requires a WTO panel to consider a claim brought by a Member with respect to a violation of a covered agreement in order to preserve that Member’s rights under that agreement.

7.24 Furthermore, Brazil notes that contrary to Argentina’s allegations, Brazil has not engaged in an abusive exercise of its rights under the WTO agreements45, nor has its conduct been contrary to good faith by not mentioning in the first submission the ruling by the MERCOSUR Tribunal.46 Brazil did not refer to that ruling simply because it believed that it had no relevance to this case, since the claims currently before the Panel are not the same as the claims that were before the MERCOSUR Tribunal.

7.25 Chile, as a third party, asserts that Brazil is entitled to bring the present case before the WTO because the issues raised are different from the issues previously raised in MERCOSUR dispute settlement proceedings.

7.26 The European Communities, as a third party, asserts that Article 3.2 of the DSU is not relevant to these proceedings, since it is concerned exclusively with the interpretation of the WTO agreements, and not with the sources of WTO law. The European Communities submits that it is difficult to see how the interpretation of the provisions of MERCOSUR law made by the Ad Hoc Arbitral Tribunal could become relevant, in accordance with the rules laid down in Articles 31 and 32 of the Vienna Convention, for the interpretation of the provisions of the AD Agreement at issue in this dispute.

7.27 The European Communities does not consider it necessary to take a position on the issue of whether a Member would abuse its right to a panel under the DSU and, hence, act inconsistently with Article 3.10 if it were to request the establishment of a panel in violation of the principle of estoppel.47 Indeed, this Panel need not reach this issue because, in any event, Brazil’s conduct is not contrary to that principle. As noted by the panel in EEC (Member States) - Bananas I , estoppel can only “result from the express, or in exceptional cases implied consent of the complaining parties”.48 The facts alleged by Argentina are not sufficient to conclude that Brazil has “consented”, whether explicitly or implicitly, not to bring this dispute before the WTO. The Protocol of Brasilia contains no provision which limits in any manner the right of the parties to request a panel under the WTO agreements with respect to a measure that has already been the subject of a dispute under that Protocol.49 Thus, the mere fact that Brazil requested first the establishment of an Ad Hoc Arbitral Tribunal under the Protocol of Brasilia does not amount to a renunciation by Brazil to bring a dispute settlement action under the WTO agreements. Similarly, the mere fact that Brazil did not consider it necessary to take dispute settlement action under the WTO agreements following the arbitration rulings issued in a number of other cases cited by Argentina cannot be construed as an implicit renunciation by Brazil to its right under the WTO agreements to take such action in this case.

7.28 Paraguay, as a third party, considers that, in accordance with the general principles of public international law, this case is res judicata because it has already been brought under the dispute settlement procedure established within the framework of MERCOSUR, and under the Brasilia Protocol in particular. In this regard, Article 2150 of the Brasilia Protocol clearly establishes the unappealable and binding nature of awards rendered by the Ad Hoc Arbitral Tribunal, which are deemed to be res judicata - a principle that should prevail in addressing this case.

7.29 Paraguay also refers to the MERCOSUR Protocol of Olivos which, although not yet in force, allows MERCOSUR members to choose the forum in which they wish disputes to be settled, with the restriction constituted by the exclusion clause, which stipulates that once a procedure has been initiated in one forum, this precludes resorting to any of the other forums provided for in the Protocol.

7.30 The United States, as a third party, asserts that the MERCOSUR dispute settlement rules are not within the Panel’s terms of reference. Article 7.1 of the DSU makes quite clear that a Panel’s role in a dispute is to make findings in light of the relevant provisions of the “covered agreements” at issue. The Protocol of Brasilia is not a covered agreement, and Argentina has not claimed that Brazil’s actions with respect to the Protocol breach any provision of a covered agreement. Rather, Argentina’s claim appears to be that Brazil’s actions could be considered to be inconsistent with the terms of the Protocol. A claim of a breach of the Protocol is not within this Panel’s terms of reference, and there are no grounds for the Panel to consider this matter. Argentina may, however, be able to pursue that claim under the MERCOSUR dispute settlement system.

7.31 Furthermore, the United States submits that Argentina's reliance on the principle of estoppel appears to relate to Brazil’s obligations under MERCOSUR rather than to any provision of the DSU or the other covered agreements. As a result, the matter is not within the Panel’s terms of reference and the Panel has no basis for making the requested finding. The United States also disagrees with Argentina that the Panel may apply what Argentina calls the principle of estoppel. The fact that Argentina cites to no textual basis for its request reflects the fact that Members have not consented to provide for the application of any such principle of estoppel in WTO dispute settlement. The term estoppel appears nowhere in the text nor does Argentina cite to any provision which in substance provides Argentina the type of defence it asserts. The United States also notes that the lack of any textual basis is reflected in the fact that no panel to date has applied a principle of estoppel. Moreover, there is no basis for attempting to import into WTO dispute settlement proceedings legal concepts with no grounding in the DSU. The lack of any textual basis is further emphasized by the lack of consistent description of the concept when panels have had occasion to discuss estoppel in the past. In EEC (Member States) - Bananas I, for example, the panel stated that estoppel can only “result from the express, or in exceptional cases implied, consent of the complaining parties.”51 In EC - Asbestos and Guatemala - Cement II, by contrast, the panels stated that estoppel is relevant when a party “reasonably relies” on the assurances of another party, and then suffers negative consequences resulting from a change in the other party’s position.52 According to the US, these inconsistencies illustrate the dangers of seeking to identify purportedly agreed-upon legal concepts beyond the only source all Members have agreed to - the text of the DSU itself.

7.32 Finally, the United States asserts that Argentina’s citation of Article 3.2 of the DSU in support of its position is misplaced. By its plain terms, Article 3.2 is limited to the rules of interpretation used to clarify the existing provisions of the WTO agreements. Argentina’s request that the Panel refuse to consider Brazil’s claims does not present an issue of the proper interpretation of a provision of the WTO agreements.

(b) Evaluation by the panel

7.33 This preliminary issue concerns the principles of good faith and estoppel. It also relates to Article 3.2 of the DSU and Article 31.3(c) of the Vienna Convention.53

7.34 Argentina asserts that Brazil failed to act in good faith by first challenging Argentina's anti-dumping measure before a MERCOSUR Ad Hoc Tribunal and then, having lost that case, initiating WTO dispute settlement proceedings against the same measure. For the following reasons, however, we find that the preconditions for a finding that Brazil failed to act in good faith are not met.

7.35 The Appellate Body recently stated in US - Offset Act (Byrd Amendment ) that "there is a basis for a dispute settlement panel to determine, in an appropriate case, whether a Member has not acted in good faith."54 There are circumstances, therefore, in which a panel could find that a Member had failed to act in good faith. It is clear to us, however, that such findings should not be made lightly. In US - Offset Act (Byrd Amendment ) the Appellate Body found that:

"Nothing, however, in the covered agreements supports the conclusion that simply because a WTO Member is found to have violated a substantive treaty provision, it has therefore not acted in good faith. In our view, it would be necessary to prove more than mere violation to support such a conclusion."55

7.36 On the basis of the abovementioned Appellate Body finding, we consider that two conditions must be satisfied before a Member may be found to have failed to act in good faith. First, the Member must have violated a substantive provision of the WTO agreements. Second, there must be something "more than mere violation". With regard to the first condition, Argentina has not alleged that Brazil violated any substantive provision of the WTO agreements in bringing the present case. Thus, even without examining the second condition, there is no basis for us to find that Brazil violated the principle of good faith in bringing the present proceedings before the WTO.

7.37 Argentina has also argued that Brazil is estopped from pursuing the present WTO dispute settlement proceedings. Argentina asserts that the principle of estoppel applies in circumstances where (i) a statement of fact which is clear and unambiguous, and which (ii) is voluntary, unconditional, and authorized, is (iii) relied on in good faith. We asked Argentina to explain exactly how it considers that these three conditions are satisfied in this case. In particular, we asked Argentina to identify the relevant "statement of fact" made by Brazil, and to describe how Argentina had relied on it in good faith.56 Argentina replied:

"Firstly, Argentina considers that Brazil's conduct in successively filing its case and activating dispute settlement proceedings in different fora, first in MERCOSUR and then in the WTO - particularly in view of the precedents described in Argentina's first written submission1, i.e. recourse to the dispute settlement mechanism under the Protocol of Brasilia to settle conflicts with other MERCOSUR States parties and compliance with the content and scope of the arbitral awards in all of the disputes - provides statements of fact which meet the requirement of being clear, unambiguous, voluntary, unconditional and authorized, the essential elements of estoppel under the definition provided in paragraph 13 of Argentina's submission.

In paragraph 20 of its rebuttal submission2, Argentina sets out the elements which are present in the current dispute brought by Brazil before the WTO. Among these elements, the last sentence of subparagraph (iii) of paragraph 20 states that: "Consequently Brazil's previous conduct with respect to the acceptance of awards, confirmed by the signature of the Protocol of Olivos, invalidates the complaint against Argentina that Brazil is now trying to substantiate on the basis of the DSU."

Moreover, the fact that Brazil signed the Protocol of Olivos on 18 February 2002 - by which it expressly accepted the choice of forum clause - and then, seven days later, on 25 February 2002, requested the establishment of a Panel in the current dispute, displays a clear contradiction in its conduct, in which Argentina had had full confidence, both countries being member States of MERCOSUR; and Argentina is now suffering the negative impact of this change of position.3 This fact was also raised in the submissions of the EC4 and Paraguay5 as third parties."57


_______________

1 First written submission of Argentina, 29 August 2002, paragraphs 18-22 and corresponding footnotes.
2 Rebuttal of Argentina, 17 October 2002, paragraph 20.
3 In fact, Argentina has already approved the Protocol of Olivos. On 9 October 2002, the National Congress adopted the Protocol of Olivos by Law 25,663, promulgated by the Executive through Decree 2091/02 of 18 October 2002 and published in Official Bulletin of the Republic of Argentina No. 30,008 of 21 October 2002.
4 Third party submission of the European Communities, 9 September 2002, paragraph 17 and footnote 17.
5 Third party submission of Paraguay, 9 September 2002, paragraph 8
.

7.38 We do not consider Argentina's response sufficient to establish that the three conditions it identified for the application of the principle of estoppel are fulfilled in the present case.58 Regarding the first condition identified by Argentina, we do not consider that Brazil has made a clear and unambiguous statement to the effect that, having brought a case under the MERCOSUR dispute settlement framework, it would not subsequently resort to WTO dispute settlement proceedings. In this regard, we note that the panel in EEC (Member States) - Bananas I found that estoppel can only “result from the express, or in exceptional cases implied consent of the complaining parties”.59 We agree. There is no evidence on the record that Brazil made an express statement that it would not bring WTO dispute settlement proceedings in respect of measures previously challenged through MERCOSUR. Nor does the record indicate exceptional circumstances requiring us to imply any such statement. In particular, the fact that Brazil chose not to invoke its WTO dispute settlement rights after previous MERCOSUR dispute settlement proceedings does not, in our view, mean that Brazil implicitly waived its rights under the DSU. This is especially because the Protocol of Brasilia, under which previous MERCOSUR cases had been brought by Brazil, imposes no restrictions on Brazil's right to bring subsequent WTO dispute settlement proceedings in respect of the same measure. We note that Brazil signed the Protocol of Olivos in February 2002. Article 1 of the Protocol of Olivos provides that once a party decides to bring a case under either the MERCOSUR or WTO dispute settlement forums, that party may not bring a subsequent case regarding the same subject-matter in the other forum. The Protocol of Olivos, however, does not change our assessment, since that Protocol has not yet entered into force, and in any event it does not apply in respect of disputes already decided in accordance with the MERCOSUR Protocol of Brasilia.60 Indeed, the fact that parties to MERCOSUR saw the need to introduce the Protocol of Olivos suggests to us that they recognised that (in the absence of such Protocol) a MERCOSUR dispute settlement proceeding could be followed by a WTO dispute settlement proceeding in respect of the same measure.

7.39 Regarding the third condition, we note that Argentina failed to quote the entirety of the relevant author's text. Quoted in full, the third condition reads "there must be reliance in good faith upon the statement either to the detriment of the party so relying on the statement or to the advantage of the party making the statement"61. Citing the same author, another panel has asserted that "[e]stoppel is premised on the view that where one party has been induced to act in reliance on the assurances of another party, in such a way that it would be prejudiced were the other party later to change its position, such a change in position is 'estopped', that is precluded".62 In our view, merely being inconvenienced by alleged statements by Brazil is not sufficient for Argentina to demonstrate that it was induced to act in reliance of such alleged statements. There is nothing on the record to suggest to us that Argentina actively relied in good faith on any statement made by Brazil, either to the advantage of Brazil or to the disadvantage of Argentina. There is nothing on the record to suggest that Argentina would have acted any differently had Brazil not made the alleged statement that it would not bring the present WTO dispute settlement proceedings. In its abovementioned response to Question 66, which was specifically addressing this issue, Argentina simply stated that it "is now suffering the negative impact of [Brazil's] change of position" (regarding its earlier practice of not pursuing WTO cases following MERCOSUR rulings in respect of the same subject-matter), without explaining further the nature of that "negative impact". Argentina's vague assertion regarding "negative impact" is not sufficient to demonstrate that it was induced to act in reliance on the alleged statement by Brazil, and that it is now suffering the negative consequences of the alleged change in Brazil's position. For these reasons, we reject Argentina's claim that Brazil is estopped from pursuing the present WTO dispute settlement proceedings.

7.40 Argentina argues in the alternative that if the Panel finds that Brazil is entitled to bring the present WTO dispute settlement proceedings, then the Panel is bound by the earlier MERCOSUR ruling on the measure at issue in this case. Argentina asserts that the earlier MERCOSUR ruling is part of the normative framework to be applied by the Panel as a result of Article 31.3(c) of the Vienna Convention, whereby "relevant rules of international law applicable in the relations between the parties" shall be taken into account for the purpose of treaty interpretation. Argentina asserts that the provisions of the Vienna Convention are applicable in the present proceedings by virtue of Article 3.2 of the DSU, which provides that the WTO dispute settlement system serves to clarify the existing provisions of the covered agreements "in accordance with customary rules of interpretation of public international law".

7.41 We note that Article 3.2 of the DSU is concerned with international rules of treaty interpretation. Article 31.3(c) of the Vienna Convention is similarly concerned with treaty interpretation. However, Argentina has not sought to rely on any law providing that, in respect of relations between Argentina and Brazil, the WTO agreements should be interpreted in a particular way. In particular, Argentina has not relied on any statement or finding in the MERCOSUR Tribunal ruling to suggest that we should interpret specific provisions of the WTO agreements in a particular way. Rather than concerning itself with the interpretation of the WTO agreements, Argentina actually argues that the earlier MERCOSUR Tribunal ruling requires us to rule in a particular way. In other words, Argentina would have us apply the relevant WTO provisions in a particular way, rather than interpret them in a particular way. However, there is no basis in Article 3.2 of the DSU, or any other provision, to suggest that we are bound to rule in a particular way, or apply the relevant WTO provisions in a particular way. We note that we are not even bound to follow rulings contained in adopted WTO panel reports63, so we see no reason at all why we should be bound by the rulings of non-WTO dispute settlement bodies. Accordingly, we reject Argentina's alternative arguments regarding Article 31.3(c) of the Vienna Convention.64

7.42 In light of the above, we decline Argentina's request that, in light of the prior MERCOSUR proceedings, the Panel refrain from ruling on the claims raised by Brazil in the present WTO dispute settlement proceedings. We also decline Argentina's alternative request that we consider ourselves bound by the ruling of the MERCOSUR Tribunal.


To continue with B. General Issues


1 WT/DS241/1.

2 WT/DS241/2.

3 WT/DS241/3.

4 WT/DS241/4.

5 Exhibit BRA-1.

6 Exhibit BRA-2.

7 Exhibit BRA-3.

8 Exhibit BRA-4.

9 Exhibit BRA-5.

10 Exhibit BRA-6.

11 Exhibit BRA-7.

12 Exhibits BRA-8 and BRA-9.

13 Exhibit BRA-10.

14 Exhibit BRA-11.

15 Exhibit BRA-12.

16 Exhibit BRA-13.

17 Exhibit BRA-14.

18 Exhibit BRA-15.

19 Exhibit BRA-16.

20 Exhibit BRA-17.

21 Brazil's first written submission, paras. 549 and 550.

22 Argentina's first written submission, para. 322.

23 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.

24 Appellate Body Report, United States - Tax Treatment for "Foreign Sales Corporations" ("US - FSC "), WT/DS108/AB/R, adopted 20 March 2000.

25 Argentina's comments to the Interim Report of the Panel, para. 5.

26 US - FSC, supra, note 24, para. 166.

27 Argentina's comments to the Interim Report of the Panel, para. 17.

28 Brazil also claimed that Catarinense was not informed that this was the reason why its questionnaire response was being rejected, contrary to para. 6 of Annex II. We note, however, that Brazil did not invoke Annex II, para. 6, in the context of Claim 17 during the Panel proceedings (see paras 282 - 290 of Brazil's first written submission).

29 We understand Brazil to make such request with respect to Claims 17 and 19. (Brazil's comments to Argentina's request for review of the Interim Report, para. 32) We consider that this is a comment which Brazil should have raised in its own request for review of the Interim Report, which Brazil did not do. We consider that for this reason alone we are precluded from examining it. In any case, we note that in para. 6.14 supra we state that the Report of 4 January 2000 and the Final Affirmative Dumping Determination contain statements that the investigating authority informed Catarinense of the requirements under Law 19,549 and Decrees 1759/72 and 1883/91 with respect to submissions to the Administration.

30 Exhibit BRA-28, p. 2795.

31 Exhibit BRA-15, p. 3025.

32 Brazil's comments to the Interim Report of the Panel, para. 44.

33 Brazil's comments to the Interim Report of the Panel, para. 73.

34 Argentina could be understood to have raised an additional preliminary issue, concerning standard of review, in paras. 9-15 of Section II.1 of its first written submission. Unlike the two preliminary issues which we do address, however, there is no request for a ruling on that additional issue in the pleadings set forth in Section IV of Argentina's submission (Section IV only requests a ruling in respect of paras. 23-25 of Section II, which do not pertain to the issue raised in Section II.1). Accordingly, we consider that Argentina has not requested any ruling in respect of the comments on standard of review set forth in paras. 9-15 of Section II.1 of its first written submission.

35 Argentina replied by fax on 22 October 2002.

36 We note that other panels have similarly made rulings on procedural matters under the DSU. For example, the panel in US - FSC (Article 21.5 - EC) ruled on third party access to rebuttal submissions in light of Article 10.3 of the DSU (Panel Report, United States - Tax Treatment for "Foreign Sales Corporations" - Recourse to Article 21.5 of the DSU by the European Communities ("US - FSC (Article 21.5 - EC) "), WT/DS108/RW, adopted 29 January 2002, Section VI.A). Although the substance of that panel's ruling was reversed by the Appellate Body, the ability of the panel to make rulings in respect of Article 10.3 of the DSU was not challenged. (Appellate Body Report, US - FSC (Article 21.5 - EC), WT/DS108/AB/RW, adopted 29 January 2002, para. 252)

37 We are referring to the arguments set forth in Argentina's submission of 15 August 2002.

38 In support of its position, Brazil also relied on the last sentence of Article 18.2 of the DSU. Since we reject the preliminary issue raised by Argentina on the basis of the first two sentences of Article 18.2 of the DSU, there is no need for us to consider arguments pertaining to the last sentence of that provision.

39 Paragraph 11 of the Panel's Working Procedures provides that "[t]he descriptive part of the Panel's report will include the procedural and factual background to the present dispute. There will be no description of the main arguments of the parties and third parties as such. Instead, the Panel will attach the parties' submissions (including first and second written submissions, written versions of the first and second oral statements, and each parties' replies to questions from the other party and from the Panel) to its report. Upon request of a party, specific portions of a submission designated by that party as confidential at the time of its submission will not be included in the submission attached to the Panel's report."

40 Done at Vienna, 23 May 1969, 1155 U.N.T.S. 331; 8 International Legal Materials 679.

41 I. Brownlie, Principles of Public International Law (Clarendon Press, 1990), p. 641.

42 Appellate Body Report, United States - Standards for Reformulated and Conventional Gasoline ("US - Gasoline "), WT/DS2/AB/R, adopted 20 May 1996, p. 20, DSR 1996:I, 29.

43 Black’s Law Dictionary (West Publishing Co., 1990), p. 551.

44 Panel Report, EEC - Member States' Import Regimes for Bananas ("EEC (Member States) - Bananas I "), 3 June 1993, unadopted, DS32/R.

45 Argentina's first written submission, para. 23.

46 Id., para. 16.

47 The European Communities notes that the panel in India - Autos suggested that a Member may be estopped from requesting the establishment of a panel with respect to a matter which has been the subject of a mutually agreed solution. (Panel Report, India - Measures Affecting the Automotive Sector ("India - Autos "), WT/DS146/R, WT/DS175/R and Corr.1, adopted 5 April 2002, footnote 364)

48 Panel Report, EEC (Member States) - Bananas I, supra, note 44, para 361. See also Panel Report, Guatemala - Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico ("Guatemala - Cement II "), WT/DS156/R, adopted 17 November 2000, footnote 791: “it is clear that not any silence can be considered to constitute consent”.

49 Unlike the more recent Protocol of Olivos on Dispute Settlement, which provides in its Article 1.2 that:

"Las controversias comprendidas en el ámbito de aplicación del presente Protocolo que puedan también ser sometidas al sistema de solución de controversias de la Organización Mundial de Comercio o de otros esquemas preferenciales de comercio de que sean parte individualmente los Estados Partes del MERCOSUR, podrán someterse a uno u otro foro a elección de la parte demandante. Sin perjuicio de ello, las partes en la controversia podrán, de común acuerdo, convenir el foro.
Una vez iniciado un procedimiento de solución de controversias de acuerdo al párrafo anterior, ninguna de las partes podrá recurrir a los mecanismos establecidos en los otros foros respecto del mismo objeto …"

The Protocol of Olivos was signed on 18 February 2002 and has not entered into force yet. According to the European Communities, the question might be raised whether the request for the establishment of the panel made by Brazil on 25 February 2002, i.e., after the signature of the Protocol of Olivos, was consistent with Brazil’s obligation under Article 18 of the Vienna Convention not to defeat the object and purpose of a signed treaty prior to its entry into force. However, Article 50 of the Protocol of Olivos appears to suggest that it does not apply to disputes already decided in accordance with the Protocol of Brasilia.

50 Article 21 reads as follows:

"1. The decisions of the Arbitral Tribunal cannot be appealed, and are binding on the State Parties to the controversies from the moment the respective notification is received and will be deemed by them to have the effect of res judicata.

2. The decisions should be complied with within a time-limit of fifteen (15) days, unless the Arbitral Tribunal fixes a different time-limit."

51 See Third Party Submission of the European Communities, citing Panel Report, EEC (Member States) - Bananas I, supra, note 44, para. 361.

52 The United States refers to the Panel Report, European Communities - Measures Affecting Asbestos and Asbestos-Containing Products ("EC - Asbestos "), WT/DS135/R and Add.1, adopted 5 April 2001, as modified by the Appellate Body Report, WT/DS135/AB/R, para. 8.60 (citations omitted); Panel Report, Guatemala - Cement II, supra, note 48, paras. 8.23-24. The United States asserts that one could also argue that these panels are describing the concept of “detrimental reliance.”

53 Argentina has made it clear that it is not invoking the principle of res judicata. Even though Paraguay considers this principle relevant to these proceedings, Paraguay, as a third party, does not have the right to determine the scope of any preliminary issues to be examined by us.

54 Appellate Body Report, United States - Continued Dumping and Subsidy Offset Act of 2000 ("US - Offset Act (Byrd Amendment)"), WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003, para. 297.

55 Id., para. 298.

56 Question 66 from the Panel reads: "Regarding para. 13 of Argentina's second submission ("ASS"), what was the "statement of fact" (point I) allegedly made by Brazil? Please explain how Argentina relied in good faith upon that alleged statement (point III)".

57 Argentina's reply to Question 66 from the Panel.

58 The United States has argued that there is no basis for a WTO panel to apply the principle of estoppel. Since we find that the conditions identified by Argentina for the application of the principle of estoppel are not present, we do not consider it necessary to determine whether or not we would have had the authority to apply the principle of estoppel if the relevant conditions had been satisfied. Nor do we consider it necessary to determine whether the three conditions proposed by Argentina are sufficient for the application of that proposal.

59 Panel Report, EEC (Member States) - Bananas I, supra, note 44, para 361. See also Panel Report, Guatemala - Cement II, supra, note 48, footnote 791: “it is clear that not any silence can be considered to constitute consent”.

60 Article 50 of the Protocol of Olivos provides that "disputes underway initiated in accordance with the Protocol of Brasilia will continue to be exclusively governed by that Protocol until the dispute has been concluded".

61 See footnote 41 supra.

62 Panel Report, Guatemala - Cement II, supra, note 48 , para. 8.23.

63 See Appellate Body Report, Japan - Taxes on Alcoholic Beverages ("Japan - Alcoholic Beverages II "), WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, p. 14, DSR 1996:I, 125.

64 Even if Argentina had relied on the MERCOSUR Tribunal ruling to argue that particular provisions of the WTO Agreement should be interpreted in a particular way, it is not entirely clear that Article 31.3(c) of the Vienna Convention would apply. In particular, it is not clear to us that a rule applicable between only several WTO Members would constitute a relevant rule of international law applicable in the relations between the "parties".