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Turkey - Restrictions on Imports of Textile and Clothing ProductsReport of the Panel (Continued)
A. Preliminary Rulings Recalled
1. Article 6.2 of the DSU
"In assessing Turkey's claim that India's request for the establishment of a panel was not sufficiently precise, we consider that it is important that a panel request, which defines the terms of reference, meets this criterion so as to inform the defending party and potential third parties both of the measures at issue, including the products they cover, and of the legal basis of the complaint. This is necessary to ensure due process and the ability of the defendant to defend itself. We have examined India's request for establishment of the panel (WT/DS34/2). While not identified by place and date of publication, the measures are specified by type (i.e. quantitative restrictions), by effective date of entry into force (1 January 1996) and by product coverage (textiles and clothing, a well defined class of products in the WTO). 239 In our view the panel request meets the minimum requirements of specificity of Article 6.2 of the DSU as interpreted by the Appellate Body in Bananas III and LAN. 240 Even if we agree that India's request could have been more detailed, we conclude that Turkey is sufficiently informed of the measures at issue and the products they cover, and that our terms of reference are sufficiently clear. Consequently, we reject Turkey's claim that the Panel should refuse to accept India's request in limine litis for its failure to respect the basic requirements of Article 6.2 of the DSU." 2. Necessity of Participation of the European Communities
"Turkey states that the measures at issue were introduced in the context of the trade agreement concluded with the EC, which Turkey and the EC notified to the CRTA as a customs union (WT/REG/22/1). The Panel will obviously have to assess whether such import restrictions introduced by Turkey in the context of that trade agreement are compatible with the WTO Agreement and its related instruments. We note that the EC has decided not to participate as a third party in this dispute. We note that the DSU does not allow for any other form of participation in favour of a Member, not party to the dispute, other than the third-party rights under Article 10 of the DSU, which, we also note, have been extended in previous cases to meet the specific circumstances of the case. In the absence of any relevant provision in the DSU, in light of international practice, 243 and noting the position of the EC to this point, we consider that we do not have the authority to direct that a WTO Member be made third-party or that it otherwise participate throughout the panel process. We can find no provision in the DSU that would prevent India from initiating a panel procedure against measures imposed by Turkey in these circumstances. Moreover, we are not aware of any general rule applicable to cases in which disputed measures arise from a bilateral or multilateral agreement, that would prohibit a Member from initiating a dispute settlement procedure against one party to such agreement. Accordingly, we do not accept Turkey's claim that India's request should be rejected at this stage of the panel process because India's request was not directed against all parties to the trade agreement which, according to Turkey, forms the basis for the introduction of the measures at issue. This is without prejudice to our decision whether the said measures are WTO compatible. We would like also to emphasise that we shall ensure due process throughout these panel proceedings and that in this context we are aware of the means existing under the DSU for panels to obtain technical advice and information from any relevant source."
"There is no doubt that in appropriate circumstances the Court will decline, �, to exercise the jurisdiction conferred upon it where the legal interests of a State not party to the proceedings "would not only be affected by a decision, but would form the very subject-matter of the decision". � Where however claims of a legal nature are made by an Applicant against a Respondent in proceedings before the Court, and made the subject of submissions, the Court has in principle merely to decide upon those submissions, with binding force for the parties only, and no other State� Other States which consider that they may be affected are free to institute separate proceedings, or to employ the procedure of intervention. There is no trace, either in the Statute or in the practice of international tribunals, of an "indispensable parties" rule of the kind argued for by the United States, which would only be conceivable in parallel to a power, which the Court does not possess, to direct that a third State be made a party to proceedings." 246
"In the present case, a finding� regarding the existence or the content of responsibility attributed to Australia by Nauru might well have implications for the legal situation of the two other States concerned, but no finding in respect of that legal situation will be needed as a basis for the Court's decision on Nauru's claims against Australia. Accordingly, the Court cannot decline to exercise its jurisdiction." 247 In its separate opinion, Judge Shahabuddeen added: "To return to the question under examination, as to whether Australia may be sued alone, I consider that an affirmative answer is required for three reasons. First, the obligations of the three Governments under the Trusteeship Agreement were joint and several. Second, assuming that the obligations were joint, this did not by itself prevent Australia from being sued alone. Third, a possible judgment against Australia will not amount to a judicial determination of responsibility of New Zealand and the United Kingdom." 248
3. The Need to Exhaust TMB Procedures
"We note that the special and additional dispute settlement procedures before the Textile Monitoring Body (TMB) apply when measures are imposed pursuant to the ATC and that Article 8.1 of the ATC provides that the TMB is established to examine measures taken under the ATC and their conformity therewith. We note that Turkey, in its own notifications to the Committee on Regional Trade Agreements (CRTA) and to the TMB (pursuant to Article 3.3 of the ATC), stated that the import restrictions at issue were justified and had been introduced pursuant to its agreement with the EC and in conformity with Article XXIV of GATT 1994. For instance, in its 7 November 1997 notification to the TMB (G/TMB/N/308), Turkey wrote that it was notifying the TMB of the "details of certain quantitative limits introduced by Turkey in respect of imports of certain textile and clothing products into Turkey from certain WTO Members, and necessary to give effect to the Customs Union in conformity with the provisions of Article XXIV of GATT 1994". We also note that the notification to the TMB, for its information, was made pursuant to Article 3.3 of the ATC, which refers to "any new restrictions (�) taken under any GATT 1994 provision". In our view India's claim under Article 2.4 of the ATC is a reflection of its claims under GATT 1994. This is to say that India does not claim a violation of the ATC except in so far as the ATC, in Article 2.4, prohibits the imposition of restrictions inconsistent with GATT 1994. Article 2.4 of the ATC provides that all new import restrictions on textile and clothing products are prohibited, except if justified under the ATC or under GATT 1994. As noted above, Turkey itself has indicated that its new restrictions on textile and clothing products are justified under and have been imposed pursuant to Article XXIV of GATT 1994, and as such can be exempted from the general prohibition against new restrictions mentioned in Article 2.4 of the ATC. Since the measures at issue are alleged to have been imposed pursuant to GATT 1994 (and India's claim relates to Turkey's alleged justification pursuant to GATT 1994), we reject Turkey's in limine litis request that the TMB should have been seized of the matter under Article 8 of the ATC prior to its referral to the DSB. This ruling is without prejudice to our eventual decision on whether the said measures at issue constitute a WTO compatible justification pursuant to Article 2.4 of the ATC and other WTO rules."
4. Inadequacy of the Consultations
"� the WTO jurisprudence so far has not recognized any concept of "adequacy" of consultations. The only requirement under the DSU is that consultations were in fact held, or were at least requested, and that a period of sixty days has elapsed from the time consultations were requested to the time a request for a panel was made. � We do not wish to imply that we consider consultations unimportant. Quite the contrary, consultations are a critical and integral part of the DSU. But, we have no mandate to investigate the adequacy of the consultation process that took place between the parties and we decline to do so in the present case." 258
To continue with Main Claims of the Parties 238 Turkey's arguments are further detailed in paras. 3.6 to 3.8, 3.13 to 3.15, 3.19 and 3.21, India's arguments are in paras. 3.9 to 3.12, 3.16 to 3.18, 3.20, 3.22 and 3.23 and the third parties' arguments are in paras. 3.24 and 3.25 above. 239 [Footnote original]We note also that during the period of consultations Turkey and the EC jointly sent notifications and other communications to the CRTA (WT/REG22/5, WT/REG22/7) and, pursuant to Article 3.3 of the ATC, to the TMB (G/TMB/N/308), in which Turkey lists the new textile import restrictions it adopted following the conclusion of the agreement between the EC and Turkey. In addition, during the meetings of the CRTA (WT/REG22/M1 and M2), and the TMB (meetings of 11-12 December 1997), which preceded the request for the establishment of a panel, the parties discussed the issues relating to this dispute. This confirms to us that Turkey is sufficiently informed of the measures challenged by India in this dispute and the products covered by the measures at issue. Moreover, we note that no comments were made on this issue at any of the meetings of the DSB where the present dispute was discussed (WT/DSB/M13, 15, 42 and 43) and that no Member questioned the scope of the terms of reference in this regard. 240 Appellate Body Report on European Communities � Regime for the Importation, Sale and Distribution of Bananas, adopted on 25 September 1997, WT/DS27/AB/R ("EC-Bananas III") and European Communities � Customs Classification of Certain Equipment adopted on 22 June 1998, WT/DS62, 67, 68/AB/R, ("EC - Computer Equipment" or "EC � LAN"). 241 The official title of that agreement is the Customs Union between Turkey and the Community (see WT/REG22/1). The European Communities is a WTO Member. In this Panel report we shall refer to the Turkey-EC customs union without any assessment of the WTO nature of this Article XXIV type of arrangement. 242 Turkey's arguments are further detailed in paras. 3.26, 3.28, 3.30, 3.33 and 3.34, India's arguments are in paras. 3.27, 3.29, 3.31, 3.32, and 3.35 to 3.37 and the third parties' arguments are in paras. 3.38 to 3.40 above. 243 [Footnote original]The Panel examined relevant principles of international law, including the practice of the International Court of Justice in the Military and Paramilitary Activities in and Against Nicaragua case ([1984], ICJ Reports, pp.430-431) and the Phosphate Lands in Nauru case([1992], ICJ Reports, p.259-262) cases (preliminary objections). 244 We recall that in its Report on India � Patent Protection for Pharmaceutical and Agricultural Chemical Products adopted on 16 January 1998, WT/DS50/AB/R ("India � Patent"), the Appellate Body stated: "Although panels enjoy some discretion in establishing their own working procedures, this discretion does not extend to modifying the substantive provisions of the DSU. (�) Nothing in the DSU gives a panel the authority either to disregard or to modify other explicit provision of the DSU", para. 92. 245 Appellate Body Report on EC - Bananas III, , paras. 164 -188. 246 Military and Paramilitary Activities in and Against Nicaragua [1984] at 431. 247 Certain Phosphate Lands in Nauru ("Nauru"), [1992] ICJ Reports, 240 (June 26); p. 261-262. 248 Nauru case; Separate Opinion of Judge Shahabuddeen, at 271, italics added. A separate opinion is not a dissenting opinion but reflects the additional discussion of one of the Judge of the ICJ. 249 We are aware that the ICJ has declined to exercise its jurisdiction when it concluded that the real "subject-matter of the dispute" is the legal position of a third country which is not before it. In the Monetary Gold Removed from Rome in 1943 case, Italy brought a case against the United Kingdom claiming it had priority over both the British and Albanian claims to the gold in question. However, Albania took no part in the dispute. The ICJ declined to exercise its jurisdiction because it would have been necessary to decide upon the international responsibility of Albania - the very subject-matter of the dispute - without her consent. (See [1954] ICJ Reports, p. 32). In the Case of East Timor, Portugal complained against Australia concerning a treaty between Australia and Indonesia for the delimitation of the continental shelf between Australia and Indonesian-occupied East Timor. Indonesia had not been impleaded by Portugal and had not applied for permission to intervene as a third party. The ICJ declined to exercise its jurisdiction because it would have had to rule, as a prerequisite, on the lawfulness of the possession of East Timor by Indonesia, which was not present in the case. (See [1995] ICJ Reports, pp. 90-106) 250 See for instance the Panel Reports on European Communities � Regime for the Importation, Sale and Distribution of Bananas, adopted on 25 September 1997, WT/DS27/Rs ("EC - Bananas III"), paras. 7.4-7.9 and on European Communities � Measures Concerning Meat and Meat Products (EC - Hormones), adopted on 13 February 1998, WT/DS26, 48/R, paras. 8.12-8.15. 251 Appellate Body Report on Japan � Taxes on Alcoholic Beverages, WT/DS8, 10, 11/AB/R, adopted on 1 November 1996 ("Japan � Alcoholic Beverages"), p. 13. 252 For further information on the details of this procedure and the Panel's invitation to the European Communities, see paras. 4.1 to 4.3 above. 253 Turkey's arguments are further detailed in paras. 3.41 to 3.44 , India's arguments are in paras. 3.45 to 3.49 and the third parties' arguments are in para. 3.50 above. 254 Turkey's arguments are further detailed in paras. 6.1, 6.2, 6.5 and 6.6 above. 255 India's arguments are further detailed in paras. 6.3, 6.4, 6.7 to 6.10 above. 256 India added that the DSB was informed of this situation on 24 April 1996; WT/DSB/M/15, para. 3. 257 Panel Report on EC - Bananas III, paras. 7.18-7.19 (not appealed). 258 Panel Report on Korea � Taxes on Alcoholic Beverages, upheld by the Appellate Body, adopted on 17 February 1999, WT/DS75, 84/R ("Korea � Alcoholic Beverages"), paras. 10.19, (not appealed). 259 See for instance the Appellate Body Report on EC - Bananas III, paras. 139-144; the Appellate Body Report on Brazil - Measures Affecting Desiccated Coconut, adopted on 20 March 1997, WT/DS22/AB/R ("Brazil � Desiccated Coconut"), page 22; and the Appellate Body Report on India � Patent, paras. 86-96. |
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