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World Trade

Organization

WT/DS152/R
22 December 1999
(99-5454)
Original: English

 

UNITED STATES – SECTIONS 301-310 OF THE TRADE ACT OF 1974

Report of the Panel

(Continued)


IV. ARGUMENTS OF THE PARTIES

A. Overview

4.1 The European Communities argues that Article 23 of the DSU prohibits unilateralism in the framework of the WTO dispute settlement procedures.  Members must await the adoption of a panel or Appellate Body report by the DSB, or the rendering of an arbitration decision under Article 22 of the DSU, before determining whether rights or benefits accruing to them under a WTO agreement are being denied and whether rulings or recommendations by the DSB or an arbitrator have been implemented.

4.2 The European Communities indicates that Article 23 also requires Members to follow the procedures of the DSU on the suspension of concessions and to await an authorization by the DSB before responding to a failure to comply with such rulings or recommendations.32

4.3 The European Communities states that while Sections 301-310 require the United States administration to resort to the DSU in respect of WTO matters, they explicitly mandate the United States administration to proceed unilaterally on the basis of determinations reached independently of the DSB, and without its authorization, once specified time periods have lapsed. A law that requires resort to the DSU procedures but expressly stipulates unilateral determinations and actions before the end of these procedures makes a mockery of the WTO dispute settlement system. 

4.4 The European Communities therefore believes that Sections 301-310 must be amended to make clear that the United States administration is required to act in accordance with the United States' obligations under the WTO agreements in all circumstances and at all times.

4.5 The European Communities indicates that the obligation set out in Article 23 of the DSU is one of the key elements in the negotiated balance of rights and obligations of the Uruguay Round. 

4.6  The European Communities states that the European Communities itself as well as many other countries, consistently took the position in the Uruguay Round that a strengthened dispute settlement system must include an explicit ban on any government taking unilateral action to redress what that government judges to be the trade wrongs of others.  

4.7   The European Communities argues that the creation of automatic dispute settlement procedures leave no excuse for any government to take the law into its own hands. Article 23 of the DSU and Article XVI:4 of the WTO Agreement are the principal reflections of the outcome of the negotiation in the Uruguay Round on these issues.

4.8 The European Communities indicates that its Regulation on the enforcement of WTO rights adopted after the Uruguay Round meets both the letter and the spirit of Article 23 of the DSU.   This Regulation, generally referred to as the "Trade Barriers Regulation", enables Member States and Community enterprises to request the European Commission to examine obstacles to trade and to initiate international dispute settlement procedures on such obstacles.33  However, all actions under the Regulation are "subject to compliance with existing international obligations and procedures".34 Specifically, the Regulation provides that "where the Community's international obligations require the prior discharge of an international procedure for consultation or for the settlement of disputes" any response to the obstacle "shall only be decided after that procedure has been terminated".35  The European Communities has faithfully implemented its obligations under Article 23 of the DSU and Article XVI:4 of the WTO Agreement and expects all the other Members of the WTO, including the United States, to do the same.

4.9 According to the European Communities, although the present complaint was ultimately prompted by the experience of the Communities with the measures the United States took under Sections 301-310 in the dispute on the European banana regime, this complaint does not concern those measures. The European Communities indicates that these measures are presently the subject matter of a different dispute (WT/DS165/1).

4.10 The European Communities further argues that this experience did however reveal the seriousness of the inconsistencies between the requirements under which the USTR is mandated to act under the domestic law of the United States and the requirements for the completion of dispute settlement procedures under WTO law. It also confirmed that the United States has implemented ob torto collo the results of the Uruguay Round into its legislation, keeping open for itself the possibility of resorting to unilateral measures, in clear contradiction with its obligations under the DSU.

4.11 The European Communities notes that in the statement of administrative action submitted by the President to the Congress on 27 September 1994 and approved by the Congress together with the Uruguay Round Agreements Act of 1994 36, the United States announced that

"[t]he administration intends to use section 301 to pursue vigorously foreign unfair barriers that violate U.S. rights or deny benefits to the United States under the Uruguay Round agreements".37

"… There is no basis for concern that the Uruguay Round agreements in general, or the DSU in particular, will make future Administrations more reluctant to apply Section 301 sanctions that may be inconsistent with U.S. trade obligations because such sanctions could engender DSU-authorized counter-retaliation. Although in specific cases the United States has expressed its intention to address an unfair foreign practice by taking action under Section 301 that has not been authorized by the GATT, the United States has done so infrequently. In certain cases the United States has taken such action because the foreign government has blocked adoption of a GATT panel report against it.

Just as the Unites States may now choose to take Section 301 actions that are not GATT-authorized, governments that are the subject of such actions may choose to respond in kind. That situation will not change under the Uruguay Round agreements".38

4.12 According to the European Communities, this way of implementing the results of the Uruguay Round multilateral trade negotiations is simply incompatible with the international obligations of the United States resulting from the basic deal that was struck in Marrakech in 1994.

4.13  The European Communities argues that it is in exchange for a US commitment not to resort to unilateral determination of the consistency of foreign trade measures with WTO trade rules and to section 301-type trade restrictions without multilateral authorization that the European Communities and other Uruguay Round participants agreed to accept a dispute settlement system that would allow binding adjudication of all trade disputes coming under the purview of the WTO and a credible enforcement procedure.

4.14 In the view of the European Communities, this deal responded to US criticism of the perceived imperfections of the GATT dispute settlement system which had been discussed at a special session of the GATT Council on unilateralism in 1989,39 i.e. the possibility to block the adoption of adverse panel reports. That possibility has now been removed. Thus, it is only fair for the European Communities to require the United States to carry out the agreed counterpart of the deal by refraining from mandating recourse to unilateral section 301-type trade restrictions. This is the deal for which the European Communities bargained in the Uruguay Round.

4.15 The European Communities argues that it therefore resorted to the present dispute settlement procedures in order to ensure that the United States brings Sections 301-310, as such, into conformity with Article 23 of the DSU, as required by Article XVI:4 of the WTO Agreement.  It follows from these considerations that the present complaint is not intended in any way to either foreclose or prejudge the resort of the European Communities to the DSU with respect to the discriminatory specific measures that the United States has applied or might apply in the future to European exports under Sections 301-310 of the Trade Act of 1974.

4.16  Also, the European Communities explains the legislative history of Sections 301-310 as follows:  Under the Trade Expansion Act of 1962, the United States Congress granted the President the power to take actions against imports under certain conditions.40   This statute was replaced and expanded by Title III of the Trade Act of 1974, which granted similar powers to the President in its Section 301. The Act also established procedures enabling U.S. citizens to petition the government for action against measures by foreign governments.   This part of the Trade Act of 1974 was amended several times, most recently by the Uruguay Round Agreements Act of 1994.41 Title III of the Trade Act of 1974, as amended, entitled "Relief from unfair trade practices", comprises Sections 301-310 which set out in detail how the administration is to enforce the United States rights under trade agreements and respond to certain foreign trade practices.

4.17 The European Communities adds that most of the amendments enacted between 1974 and 1994 were designed to reduce the President's discretion under Section 301.  The prevailing view in Congress was that the President had not made sufficient use of the powers under Section 301 because he had given priority to foreign policy concerns over trade interests.   In the hearings preceding the 1988 amendments, Senator George J. Mitchell stated:

"The history of Section 301 is a history of administration after administration of both parties refusing to implement the law. Instead, this president and his predecessors have used the wide discretion provided in the law to deny or to delay taking action sometimes for close to a decade…  The administration will claim that [the proposed Section 301] reforms limit their discretion.  But it is this very discretion which had led to the disastrous record of enforcement under Section 301". 42

The Chairman of the Senate Finance Committee, Senator Lloyd Bentsen, took a similar position:

"We need a trade policy that our trade partners can predict, and I maintain that requires limits on the President's discretion not to act. He needs plenty of discretion on what action to take, but limits have to be placed on his discretion to take no action".43

4.18 The European Communities further states that prior to the 1988 amendments of Section 301, it was the President who was authorized to determine whether the foreign government practices were actionable and whether the United States should respond to them with trade measures.    In 1985, the Congress discussed whether the President's power should be transferred to the United States Trade Representative ("USTR").   Those in favour argued that it "will ensure that when decisions are made under Section 301 authority, these decisions will be made primarily for reasons of trade policy" and that it would "enhance USTR's position as the lead trade agency and ... make it less likely that trade retaliation would be waived because of foreign policy, defence, or other considerations".44 The administration strongly opposed such a transfer of authority, arguing that the President required discretion to defend the United States interests effectively, and that the USTR in any case served at the President's pleasure and could therefore not be expected to act contrary to the President's views. Moreover, the President was in a better position to weigh the national and industry-specific interests at stake in a Section 301 investigation.   Ambassador Yeutter, the former USTR, wrote to the Chairman of the Committee on Ways and Means that

"Section 301 is the H-bomb of trade policy; and in my judgement, H-bombs ought to be dropped by the President of the United States and not by anyone else". 45

4.19 The United States responds that in its request for the establishment of this Panel, the European Communities defined its legal challenge to Sections 301-310 of the Trade Act of 1974 as follows: 

" By imposing specific, strict time limits within which unilateral determinations must be made that other WTO Members have failed to comply with their WTO obligations and trade sanctions must be taken against such WTO Members, this legislation does not allow the United States to comply with the rules of the DSU and the obligations of GATT 1994 in situations where the Dispute Settlement Body has, by the end of those time limits, not made a prior determination…".46

4.20  The United States argues that the European Communities thus from the outset has acknowledged its burden in this case: since it is challenging a law as such, and no specific action taken pursuant to the law, it must demonstrate that Sections 301-310 themselves do not allow the US government to act in accordance with its WTO obligations.   As panel reports cited by the European Communities make clear, a law is not in itself inconsistent with a WTO Member's obligations unless that law mandates action which violates those obligations, even if the law does not preclude such action. The question before this Panel is therefore straightforward: do Sections 304(a)(2)(A), 306(b) and 305(a) of the Trade Act of 1974 mandate actions that are inconsistent with US obligations under the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") and the General Agreement on Tariffs and Trade 1994 ("GATT 1994")?

4.21  According to the United States, the European Communities falls woefully short of demonstrating that they do.  The European Communities ignores key provisions of the statute and engages in tortured readings of others in an unsuccessful attempt to find even the narrowest of WTO violations – that if WTO dispute proceedings were to require the maximum time authorized under the DSU, Sections 304(a)(2)(A), 306(b) and 305(a) would require US government determinations and actions shortly before formal – and inevitable – adoption of panel, Appellate Body and arbitral findings which have already been issued.  However, not even this claim is true.  Sections 301 - 310 of the Trade Act of 1974 on their face ensure that the US government may make its determinations and take actions in a manner which is fully consistent with DSU Article 23 and GATT 1994 Articles I, II, III, VIII and XI.  The statute does not require the USTR to make a unilateral determination that US agreement rights have been denied, nor does it impose time limits which preclude prior action by the Dispute Settlement Body either to support US determinations or to authorize actions responding to another Member's failure to comply with DSB recommendations.

4.22 The United States maintains that the USTR need not and may not, under Section 304(a)(1), determine that US agreement rights have been denied if there are not adopted panel or Appellate Body findings to that effect.   The requirement to make a determination within 18 months is not frustrated by the need to comply with the additional statutory requirement that a determination that agreement rights have been denied must be based on the results of dispute settlement proceedings.   The USTR is required under Section 304(a)(1) to base a determination of whether agreement rights have been denied on the results of WTO dispute settlement proceedings.  Thus, in the event that a dispute settlement panel were to fail to complete its proceedings within the time frames provided for in the DSU and Section 304(a)(2)(A), the USTR would not be able to make a determination that US agreement rights have been denied.   On this basis, she could determine that dispute settlement proceedings had not yet finished, and that a determination concerning US agreement rights would be made following completion of these proceedings.   She could also, for example, terminate the Section 304 investigation on the basis of the fact that information necessary to make her Section 304(a)(1) determination is not available, then reinitiate another case.  The USTR has terminated and reinitiated Section 302 investigations before, including in the Bananas dispute, 47 and has terminated investigations without making a determination on numerous occasions. 48

4.23 The United States adds with respect to Section 306(b) that the European Communities is simply wrong in asserting that there are "explicit requirements to make a determination within a specified time frame whether … failure to implement DSB recommendations has occurred".  When the USTR considers non-implementation to have occurred, this is not a determination.   Moreover, there are no "specified time frames" for such a "consideration".  Inasmuch as a consideration is no more than a belief, the USTR may, at any time – before, during or after the reasonable period of time – consider that another Member has not implemented DSB rulings and recommendations, just as a Member may consider, may believe, that another Member has violated its WTO obligations before, during and after the deadline for submitting a request to establish a panel at a given DSB meeting.   Section 306 provides only that if, during the 30 days following the reasonable period, the USTR considers that non-implementation has occurred, she shall determine whether to avail herself of Article 22 procedures.   Indeed, as Article 22 is currently drafted, she must avail herself of these procedures within this time frame if the United States is to preserve its WTO rights.  However, nothing prevents her from not considering during that 30-day period that non-implementation has occurred.

4.24  The United States argues that nothing in Sections 301-310 requires the US government to act in violation of its WTO obligations.   To the contrary, Section 303(a) of the Act requires the USTR to undertake WTO dispute settlement proceedings when a WTO agreement is involved, 49 and Section 304(a)(1)(A) provides that the USTR will rely on the results of those proceedings when determining whether US agreement rights have been denied. 50 Likewise, Section 301(a)(2)(A) explicitly indicates that the USTR need not take action when the DSB has adopted a report finding no denial of US WTO rights. 51 The European Communities acknowledges that these provisions, the core provisions establishing the relationship between Sections 301-310 and the WTO dispute settlement process, are "in conformity with the principles set out in Article 23".

4.25 The United States argues that as the complaining party to this proceeding, the European Communities bears the burden of presenting evidence and arguments sufficient to establish a presumption that Sections 301-310 of the Trade Act of 1974 are inconsistent with the DSU and GATT 1994. 52 In this case, the evidence is the language of Sections 301-310 and how this language is interpreted and applied under United States law. 53 Under well-established GATT and WTO jurisprudence and practice which the European Communities appears to accept, a law may be found inconsistent with a Member's WTO obligations only if it precludes a Member from acting consistently with those obligations.   The European Communities must therefore demonstrate that Sections 301-310 do not permit the United States government to take action consistent with US WTO obligations – that this legislation in fact mandates WTO-inconsistent action.   The European Communities has failed to meet this burden.   Its analysis of the language of Sections 301-310 ignores pertinent statutory language and relies on constructions not permitted under US law.    Sections 301-310 of the Trade Act of 1974 are fully consistent with US WTO rights and obligations.

4.26 The European Communities argues that it has basically submitted to the panel's examination a single, fundamental claim, which is supported by a number of arguments: by adopting, maintaining on its statute book and applying Sections 301-310 (as they are presently worded) after the entry into force of the Uruguay Round Agreements (i.e. after 1 January 1995) the United States has breached the historical deal that was struck in Marrakech between the United States on the one hand, and the other Uruguay Round participants, among them its major trading partners like the European Communities and the developing countries, on the other hand.

4.27 The European Communities indicates that that deal, which it has proposed to call the "Marrakech Deal", has found its expression in the legal texts of the WTO Agreements, inter alia in Articles 3, 21, 22 and, most importantly, 23 of the DSU and Article XVI:4 of the Marrakech Agreement. It is the trade-off between the practical certainty of adoption by the DSB of panel and Appellate Body reports and the authorizations for Members to suspend concessions (an explicit US request 54 ) and the complete and definitive abandoning by the United States of its long-standing policy of unilateral action. The second leg of the deal, which is the core of the present panel procedure, has been enshrined in the following WTO provisions:

  1. Strengthening of the multilateral system (Article 23 of the DSU and the related provisions under Articles 21 and 22)
  2. Security and predictability of the multilateral trading system (Article 3 of the DSU)
  3. Ensuring the conformity of domestic law (Article XVI:4 of the Marrakech Agreement)

4.28 The European Communities states that Article 23 of the DSU prohibits unilateralism in the framework of the WTO dispute settlement procedures. Members must await the adoption of a panel or Appellate Body report by the DSB before determining that rights or benefits accruing to them under a WTO agreement are being denied and that rulings or recommendations by the DSB have not been implemented.

4.29 In the view of the European Communities, Article 23 also requires WTO Members to follow the procedures of the DSU, including the procedure under Article 21.5, before determining a failure to comply with such rulings or recommendations and to await an authorization by the DSB before resorting to the suspension of concessions or other obligations, where applicable on the basis of the level of such suspension determined by an arbitration decision under Article 22 of the DSU.

4.30 The European Communities further argues that Article 3 of the DSU describes the dispute settlement system of the DSU as "a central element in providing security and predictability to the multilateral trading system". As the Appellate Body has indicated in the EC – Computer Equipment report,55 the objective of the "security and predictability of the multilateral trading system" is also an object and purpose of the WTO Agreements themselves. It is the reflection of the general principle of public international law "pacta sunt servanda" (Article 26 of the Vienna Convention of the Law of Treaties), which requires that international agreements be performed in good faith. According to the Appellate Body report in India - Patent Protection for Pharmaceutical and Agricultural Chemical Products 56, this means in practice not merely the possibility for the Members' executive authorities to act consistently with WTO law, but requires WTO Members to provide "a sound legal basis" in domestic law for the measures required to implement their WTO obligations. The Appellate Body ruling was adopted at the request of the United States and should therefore be easily accepted by the United States as applicable also in the present case.

4.31 The European Communities further states that Article XVI:4 of the Marrakech Agreement is a fundamental, additional principle of the WTO legal system governing the relationship between domestic laws, regulations and administrative procedures (i.e. the entire domestic law of each WTO Member) and WTO law that applies over and above the obligation under general public international law enshrined in Articles 26 and 27 of the Vienna Convention on the Law of Treaties. In fact, Article 27 of the Vienna Convention on the Law of Treaties spells out a negative obligation to refrain from invoking the domestic law in order to justify any departure from the international obligation undertaken by a State.

4.32 According to the European Communities, Article XVI:4 of the Marrakech Agreement establishes a positive obligation to ensure the conformity of such domestic law with their WTO obligations. Therefore, in cases where pre-existing domestic law was inconsistent with the new WTO obligations, including those under Article 23 of the DSU, Members were required to amend their domestic laws, regulations or administrative procedures.

4.33 For the European Communities, this also constitutes a fundamental difference from the pre-existing rules under the Protocol of Provisional Application (PPA) of GATT 1947 and the protocols of accession that permitted the maintenance of mandatory legislation inconsistent with the GATT 1947. Article XVI:4 not only confirms the abrogation of the PPA in the Introduction to the General Agreement on Tariffs and Trade 1994, but requires WTO Members to be pro-active in ensuring, on their own initiative, the conformity of all of their internal law with WTO law. This task had to be accomplished by the United States no later than 1 January 1995.

4.34 The European Communities argues that the violation by the United States of its obligations enshrined in the above WTO provisions inevitably entails also a violation of Articles I, II, III, VIII and XI of the GATT 1994.

4.35 The European Communities maintains that Sections 301-310 breach the above-mentioned provisions and fundamentally undermine the Marrakech deal. The EC's main legal grounds supporting this basic claim, which will be examined in turn in more detail below, are threefold:

  1. Sections 301-310, on their face, mandate unilateral action by the US authorities in breach of Article 23 of the DSU (and consequently of Articles I, II, III, VIII and XI of the GATT 1994). This is true both under the former GATT 1947 standards concerning mandatory versus discretionary legislation and the present standards under the GATT 1994 and the Marrakech Agreement, which the European Communities considers the relevant sources of law applicable after the entry into force of the WTO Agreements. The European Communities recalls that the issue of the standards applicable to determine whether legislation is genuinely discretionary was examined at length, as shown below.
  2. In addition, Sections 301-310, even if they could be interpreted to permit the USTR to avoid WTO-inconsistent determinations and actions, could not be regarded as a sound legal basis for the implementation of the US obligations under the WTO. The lack of this "sound legal basis" produces a situation of threat and legal uncertainty against other WTO Members and their economic operators that fundamentally undermines the "security and predictability" of the multilateral trading system.
  3. Furthermore, Sections 301-310 are not in conformity with the United States' WTO obligations since they are an expression of a deliberate policy creating a pattern of executive action which is biased against WTO-conformity. Even if Sections 301-310 could be interpreted to provide the USTR with a legal basis for the implementation of the United States' obligations under the WTO, they could not be considered to be in conformity with WTO law within the meaning of Article XVI:4 of the Marrakech Agreement.

4.36 In the view of the European Communities, the arguments presented by the United States are entirely unconvincing. In particular, it defies common sense when the United States asserts

  1. that the verb "shall" in Sections 301-310 should be read to mean "may";
  2. that definite deadlines like those in Section 306 could be considered an "invitation" to the executive authorities, without showing a legal basis for such a reading of the text;
  3. that the legislation always authorizes USTR to determine that rights of the United States have not been denied and no failure to implement DSB recommendations has occurred, while the text of Section 304(a)(1) requires the USTR to base her determinations on the results of the investigation initiated under Section 302;
  4. that a chapter heading called "Mandatory action" containing a mandatory list of retaliatory measures or, in the alternative, the possibility of entering into a bilateral agreement whose main conditions are set by the law, shows that the executive has broad discretion what action to take;
  5. that the power of the President to give specific directions to the USTR in individual cases covers also the right to bar the USTR from implementing actions required by the text of Sections 301-310 and which are qualified as "mandatory" by the US Congress; and
  6. that the existence of a limited exception left in the hands of the President, which has never been used so far, conveys to the law the character of discretionary legislation.

4.37 The European Communities further argues that this is of course by no means a theoretical debate only. Sections 301-310 were drafted by the United States in the present convoluted way in order to correspond to a very precise, albeit illegitimate, goal.

 

TO CONTINUE WITH UNITED STATES – SECTIONS 301-310 OF THE TRADE ACT OF 1974


32 The European Communities notes that an alternative route with the agreement of the parties to the dispute would be to follow the procedures under Article 25 of the DSU before an authorization to suspend concessions is sought.

33 Council Regulation (EC) No. 3286/94 of 22 December 1994, which, according to the European Communities, lays down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community's rights under international trade rules, in particular those established under the auspices of the World Trade Organization.

34 Ibid., Article 1.

35 Ibid., Article 12.2.

36 Section 101(a) (1).

37 Statement of Administrative Action, reprinted in H.R. Doc. No. 103-316, at 1029 (US Exhibit 11), Chapter B, subchapter 2, littera b (enforcement of US rights), p. 364.

38 Statement of Administrative Action, op. cit., Chapter B, subchapter 2, littera b (enforcement of US rights), p. 366 (emphasis added).

39 GATT doc. C/163 of 16 March 1989 (The European Communities referred to the arguments for example, contained in paras. 4.75-4.81, and 4.374-4.378 of this Report for a more detailed discussion of the negotiating history concerning Article 23 DSU).

40 Trade Expansion Act of 1962, � 252, Pub.L. No. 87-794, 75 Stat. 879.

41 See the description of the legislative history of Section 301 in. Jackson-Davey-Sykes, Legal Problems of International Economic Relations, Third Edition (West Publishing Co., 1995), page 818.

42 Quoted from Judith Hippler Bello and Alan F. Holmer, The Heart of the 1988 Trade Act. A Legislative History of the Amendments to Section 301, in Jagdish Bhagwati and Hugh T. Patrick, Editors, Aggressive Unilateralism. America's 301 Trade Policy and the World Trading System (Harvester Wheatsheaf.1990), page 58.

43 Ibid., page 59.

44 Quoted from Bello and Holmer, op. cit., page 51.

45 Quoted from Bello and Holmer, op. cit., page 52.

46 Circulated on 2 February 1999 as document WT/DS152/11 (emphasis added).

47 The United States refers to Termination of Investigation; Initiation of New Investigation and Request for Public Comments: European Union Banana Regime, 60 Fed. Reg. 52026 (1995) (US Exhibit 18).

48 The United States provides a list as US Exhibit 13.

49 Section 303(a), 19 U.S.C. � 2413(a)(2).

50 Section 304(a)(1)(A), 19 U.S.C. � 2414(a)(2)(A).

51 The United States notes that all of these provisions predate the conclusion of the Uruguay Round.

52 Appellate Body Report on United States – Measures Affecting Imports of Woven Wool Shirts and Blouses from India ("US – Shirts and Blouses"), adopted 23 May 1997, WT/DS33/AB/R, p. 14.

53 Appellate Body Report on India – Patent Protection for Pharmaceutical and Agricultural Chemical Products ("India – Patents (US)"), adopted 16 January 1998, WT/DS50/AB/R, para. 65.

54 According to the European Communities, the United States confirmed indirectly the EC views in the following phrase: "… the United States infrequently expressed its intention to take retaliatory action, and such action was often a response to a trading partner's decision to obstruct dispute settlement proceedings". The European Communities does not warrant, of course, the statement of the United States defining the retaliatory actions also in the past as "infrequent". The reality, as all the third parties have shown, is quite different.

55 Appellate Body Report on European Communities/United Kingdom/Ireland – Customs Classification of Certain Computer Equipment ("EC – Computer Equipment"), adopted 26 June 1998, WT/DS62/AB/R - WT/DS67/AB/R - WT/DS68/AB/R.

56 Appellate Body Report on India – Patents (US), op. cit.