6. The Non-Statutory Elements of Section 304

(a) Introduction and Summary of the Panel's Analysis

7.98  In the previous analysis we have deliberately referred to the "statutory language" of Section 304 and likewise we have deliberately concluded that the statutory language creates a prima facie violation. We did not conclude that a violation has been confirmed. This is so because of the special nature of the Measure in question. The Measure in question includes statutory language as well as other institutional and administrative elements.⁶⁷⁶ To evaluate its overall WTO conformity we have to assess all of these elements together.

7.99  Therefore, although we found above that the statutory language of Section 304 creates a prima facie violation of Article 23.2(a), this does not, in and of itself, establish a US violation. There is more to Section 304 than statutory language. Consequently, we have to examine the impact of the other elements on the overall conformity of the Measure in question with the relevant WTO provisions.

7.100  To do this, we should recall first the nature of the prima facie violation created by the statutory language. The prima facie violation was created by the possibility under the statute of the USTR making a determination of inconsistency which negates the assurances that WTO partners of the US and individuals in the market place were entitled to expect under Article 23.

7.101  One can imagine different ways to remove the prima facie violation. If, for example, the statutory language itself were modified so that the USTR were not under an obligation to make a determination within the 18 months time-frame, but could, for example, await the making of any determination until such time as DSU procedures were completed the guarantee that Article 23 was intended to create would remain intact and the prima facie inconsistency would not exist.⁶⁷⁷ Likewise, if, by a change in the statutory language, the USTR's discretion to make a determination of inconsistency prior to exhaustion of DSU proceedings were curtailed, once again the prima facie inconsistency would no longer exist.

7.102  Changing the statute is not the only way to remove the prima facie inconsistency. If the possibility of the USTR making a determination of inconsistency prior to exhaustion of DSU proceedings were lawfully curtailed in a different manner, the same legal effect would be achieved. The obligation on Members to bring their laws into conformity with WTO obligations is a fundamental feature of the system and, despite the fact that it affects the internal legal system of a State, has to be applied rigorously. At the same time, enforcement of this obligation must be done in the least intrusive way possible. The Member concerned must be allowed the maximum autonomy in ensuring such conformity and, if there is more than one lawful way to achieve this, should have the freedom to choose that way which suits it best.

7.103  Critically, the offending discretionary element has to be lawfully curtailed since, as found in WTO case law, conformity with WTO obligations cannot be obtained by an administrative promise to disregard its own binding internal legislation, i.e. by an administrative undertaking to act illegally.⁶⁷⁸

7.104  For the following reasons we find that the prima facie violation has in fact in this case been lawfully removed and no longer exists.

7.105  The Trade Act in general and Sections 301-310 in particular are part of US legislation which covers the broad range of US trade relations including relations with States that are not WTO Members and including relations with Members that are not covered by WTO obligations.

7.106  The statutory language of Section 304 gives the USTR the broad discretion we outlined above as regards the entire scope of US trade relations, only a part of which comes within the orbit of WTO obligations. Within the discretion allowed, the statutory language leaves it to the USTR to apply the provisions of the Trade Act which relate to the entire gamut of US trade relations in a manner which is consistent with US interests and obligations. The interests and obligations can be different from one group of States to another.

7.107  We find, as a matter of fact, that it is within that broad discretion afforded to the US Administration, notably as regards the content of determinations pursuant to Section 304, lawfully to set out different regimes for the application of Section 304 depending on whether or not it concerns WTO covered situations.

7.108  The language of Section 304 allows the existence of multilateral dispute resolution proceedings to be taken into account.⁶⁷⁹ It also allows for determinations of inconsistency to be postponed until after the exhaustion of DSU proceedings.⁶⁸⁰ This language surely permits the Administration to limit the discretion of the USTR so that no determination of inconsistency would be made before the exhaustion of DSU proceedings. The wide discretion granted as to the content of the determination to be made should be interpreted as including the power of the US Administration to adopt an administrative decision limiting the USTR's discretion in a manner consistent with US international obligations.⁶⁸¹

7.109  For reasons we explain below, we find that this is precisely the situation in the present case. Briefly, the US Administration has carved out WTO covered situations from the general application of the Trade Act. It did this in a most authoritative way, inter alia, through a Statement of Administrative Action ("SAA") submitted by the President to, and approved by, Congress. Under the SAA so approved "… it is the expectation of the Congress that future administrations would observe and apply the [undertakings given in the SAA]". One of these undertakings was to "base any section 301 determination that there has been a violation or denial of US rights … on the panel or Appellate Body findings adopted by the DSB".⁶⁸² This limitation of discretion would effectively preclude a determination of inconsistency prior to exhaustion of DSU proceedings.⁶⁸³ The exercise of discretion under the statutory scheme is in the hands of the Administration and it is the Administration which has given this undertaking. We recognize of course that an undertaking given by one Administration can be repealed by that Administration or by another Administration. But this is no different from the possibility that statutory language under examination by a panel be amended subsequently by the same or another Legislator.⁶⁸⁴ The critical question is whether the curtailment of discretion is lawful and effective. This Panel finds that it is.

(b) The Internal Dimension: US Statement of Administrative Action

7.110  The limitation on the USTR's discretion under Section 304, outlined above, was contained in the US Statement of Administrative Action ("SAA") that accompanied the US legislation implementing the results of the Uruguay Round submitted by the President to Congress. The SAA provides, in its own terms, as follows:

"This Statement describes significant administrative actions proposed to implement the Uruguay Round agreements….

… this Statement represents an authoritative expression by the Administration concerning its views regarding the interpretation and application of the Uruguay Round agreements, both for purposes of U.S. international obligations and domestic law. Furthermore, the Administration understands that it is the expectation of the Congress that future Administrations will observe and apply the interpretations and commitments set out in this Statement. Moreover, since this Statement will be approved by the Congress at the time it implements the Uruguay Round agreements, the interpretations of those agreements included in this Statement carry particular authority".⁶⁸⁵

7.111  The SAA thus contains the view of the Administration, submitted by the President to Congress and receiving its imprimatur, concerning both interpretation and application and containing commitments, to be followed also by future Administrations, on which domestic as well as international actors can rely.

7.112  In the SAA the US Administration indicated its interpretation of Sections 301-310 as well as the manner in which it intends to use its discretion under Sections 301-310, as follows (emphases added):

"Although it will enhance the effectiveness of section 301, the DSU does not require any significant change in section 301 for investigations that involve an alleged violation of a Uruguay Round agreement or the impairment of U.S. benefits under such an agreement. In such cases, the Trade Representative will:

• invoke DSU dispute settlement procedures, as required under current law;
• base any section 301 determination that there has been a violation or denial of U.S. rights under the relevant agreement on the panel or Appellate Body findings adopted by the DSB;
• following adoption of a favourable panel or Appellate Body report, allow the defending party a reasonable period of time to implement the report's recommendations; and
• if the matter cannot be resolved during that period, seek authority from the DSB to retaliate" (emphasis added).⁶⁸⁶

This official statement in the SAA – in particular, the commitment undertaken in the second bullet point – approved by the US Congress in the expectation that it will be followed by future US Administrations, is a major element in our conclusion that the discretion created by the statutory language permitting a determination of inconsistency prior to exhaustion of DSU proceeding has effectively been curtailed. As we already noted, we find that this decision of the US Administration on the manner in which it plans to exercise its discretion, namely to curtail it in such a way so as never to adopt a determination of inconsistency prior to the adoption of DSB findings, was lawfully made under the statutory language of Section 304.⁶⁸⁷

7.113  The EC refers to subsequent paragraphs in the SAA that allegedly contradict the above quoted statement in the SAA.⁶⁸⁸ We are persuaded, however, and so find, that these other paragraphs, read in their context, do not contradict the decision to apply Sections 301-310 in a manner consistent with US obligations under the WTO. Some of the disputed language clearly does not cover the issues considered here, i.e. involving WTO Members and an alleged denial of US rights under the WTO Agreement. Those paragraphs deal rather with cases involving WTO Members but not involving US rights under the WTO Agreement, i.e. where the subject-matter is not covered by the WTO. Admittedly, some of the language in the SAA appears ambivalent. We note however that, following US constitutional law, cases of ambiguity in the construction of legal instruments should, where possible, always be resolved in a manner consistent with US international obligations. We find that it is possible to do so in this case.

(c) US Statements before this Panel

7.114  The international elements of the SAA, though clearly present⁶⁸⁹ were not at its centre. The SAA was made in a domestic context, before Congress on the occasion of the implementation by the US of the results of the Uruguay Round negotiations. Since the alleged violation at issue is domestic legislation, in principle, internal elements legally relevant to the construction of the legislation should be determinative.

7.115  The international legal relevance of the US commitments in the SAA were confirmed and amplified also in the context of the very proceedings before this Panel. In response to our very insistent questions, the US explicitly, officially, repeatedly and unconditionally confirmed the commitment expressed in the SAA namely that the USTR would "… base any section 301 determination that there has been a violation or denial of U.S. rights under the relevant agreement on the panel or Appellate Body findings adopted by the DSB".⁶⁹⁰

7.116  The US confirmed this for the record during the first meeting with the parties before the Panel. Subsequently, answering Panel Question 14, the US stated the following:

"With regard to determinations under Section 304, as noted in paragraphs 12 and 41 of the U.S. First Submission, and as provided at page 365 of the Statement of Administrative Action (U.S. Exhibit 11), the Trade Representative 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 Trade Representative would not be able to make a determination that U.S. agreement rights have been denied".⁶⁹¹

7.117  Whilst we have rejected the view that the statutory language of Section 304 itself precludes a determination of inconsistency, we fully accept the power of the US Administration to determine that it is its duty to exercise the discretion given to it by the statutory language in a way consistent with WTO obligations, to make this duty, through the SAA, official US policy for future Administrations, and, in turn, for the USTR, as part of the US Administration, to perceive it as its legal duty to follow such a policy.

7.118  Attributing international legal significance to unilateral statements made by a State should not be done lightly and should be subject to strict conditions. Although the legal effects we are ascribing to the US statements made to the DSB through this Panel are of a more narrow and limited nature and reach compared to other internationally relevant instances in which legal effect was given to unilateral declarations, we have conditioned even these limited effects on the fulfilment of the most stringent criteria. A sovereign State should normally not find itself legally affected on the international plane by the casual statement of any of the numerous representatives speaking on its behalf in today's highly interactive and inter-dependant world⁶⁹² nor by a representation made in the heat of legal argument on a State's behalf. This, however, is very far from the case before us.

7.119  At this juncture, it is also worth recalling that under Article 11 of the DSU it is our duty to "… make an objective assessment of the facts of the case … and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements" (emphasis added).

7.120  As regards these statements we find, thus, as follows:

7.121  The statements made by the US before this Panel were a reflection of official US policy, intended to express US understanding of its international obligations as incorporated in domestic US law.⁶⁹³ The statements did not represent a new US policy or undertaking but the bringing of a pre-existing US policy and undertaking made in a domestic setting into an international forum.

7.122  The representations and statements by the representatives of the US appearing before us were solemnly made, in a deliberative manner, for the record, repeated in writing and confirmed in the Panel's second hearing. There was nothing casual about these statements nor were they made in the heat of argument. There was ample opportunity to retract. Rather than retract, the US even sought to deepen its legal commitment in this respect.⁶⁹⁴

7.123  We are satisfied that the representatives appearing before us had full powers to make such legal representations and that they were acting within the authority bestowed on them. Panel proceedings are part of the DSB dispute resolution process. It is inconceivable except in extreme circumstances that a panel would reject the power of the legal representatives of a Member to state before a panel, and through the panel to the DSB, the legal position of a Member as regards its domestic law read in the light of its WTO obligations. The panel system would not function if such a power could not be presumed.

7.124  We are equally satisfied, as a matter of fact, that the statements made to us were intended to be part of the record in the full knowledge and understanding that they could, as any other official submission, be made part of our Report; that they were made with the intention not only that we rely on them but also that the EC and the third parties to the dispute as well as all Members of the DSB – effectively all WTO Members – place such reliance on them.

7.125  Accordingly, we find that these statements by the US express the unambiguous and official position of the US representing, in a manner that can be relied upon by all Members, an undertaking that the discretion of the USTR has been limited so as to prevent a determination of inconsistency before exhaustion of DSU proceedings. Although this representation does not create a new international legal obligation for the US – after all the US was already bound by Article 23 in becoming a WTO Member – it clarifies and gives an undertaking, at an international level, concerning aspects of domestic US law, in particular, the way the US has implemented its obligations under Article 23.2(a) of the DSU.

7.126  The aggregate effect of the SAA and the US statements made to us is to provide the guarantees, both direct to other Members and indirect to the market place, that Article 23 is intended to secure. Through the SAA and the US statements, as we have construed them, it is now clear that under Section 304, taking account of the different elements that compose it, the USTR is precluded from making a determination of inconsistency contrary to Article 23.2(a). As a matter of international law, the effect of the US undertakings is to anticipate, or discharge, any would-be State responsibility that could have arisen had the national law under consideration in this case consisted of nothing more than the statutory language.⁶⁹⁵ It of course follows that should the US repudiate or remove in any way these undertakings, the US would incur State responsibility since its law would be rendered inconsistent with the obligations under Article 23.

(d) USTR Practice under Section 304

7.127  It is not our task to examine the individual conduct of the US in specific cases. We did, however, examine the practice of the USTR in specific cases as a means of shedding light on the meaning of Sections 301-310. We also considered that the USTR record could be of limited probative value in evaluating the veracity and significance of the SAA and the policy it articulated.

7.128  In support of its position the US made the following submission to the Panel:

"The record shows that the Trade Representative has never once made a Section 304(a)(1) determination that U.S. GATT or WTO agreement rights have been denied which was not based on the results of GATT and WTO dispute settlement proceedings. Not once".⁶⁹⁶

7.129  Given the intense criticism of Sections 301-310 articulated in the submissions of third parties before this Panel, we expressly invited the EC and all third parties to submit to us any evidence of WTO inconsistent conduct by the US corresponding to the complaints of the EC – and, thus, within our terms of reference – that took place since the entry into force of the WTO. One such alleged case was submitted by one of the third parties (Japan – Auto Parts⁶⁹⁷) to which the EC joined two other cases (EC – Bananas III and Argentina – Textiles and Apparel (US)).

7.130  It is not for us to make a conclusive finding in relation to any of these cases, not least Bananas III which is the subject of proceedings before another panel.⁶⁹⁸ However, on the face of the record before us, we do not find the evidence submitted to us in this connection sufficient to overturn the US claim of a consistent record of compliance of Section 304 with Article 23.2(a) as invoked by the EC. In any event, we do not consider the evidence before us sufficient to overturn our conclusions regarding Section 304 itself.⁶⁹⁹

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

⁶⁷⁶ See paras. 7.25-7.28 of this Report.

⁶⁷⁷ On this issue, the statutory language is, however, conclusive in that, as we found in para. 7.31(a), the USTR is obligated to make a determination within the 18 months time-frame under Section 304.

⁶⁷⁸ Appellate Body Report on India – Patents (US), op. cit., paras. 69-71.

⁶⁷⁹ Section 304 states that the determination is to be based on "the investigation initiated under section 302 … and the consultations (and proceedings, if applicable) under section 303" (emphasis added).  See, in this respect, footnote 649 above.

⁶⁸⁰ As the US noted in its answer to Panel Question 32(b), "[t]here is nothing in the text of Sections 301-310 which prevents [the USTR from making two determinations in one and the same case]  … While the Trade Representative is required to make a determination within the time frames set forth in that section, nothing prevents her from making additional determinations after that time".  See para. 4.599 above.

⁶⁸¹ We reach this conclusion not least because of the US constitutional principle of construing US domestic law, where possible, in a way that is consistent with US obligations under international law.  We accept the US submissions that "[i]n U.S. law, it is an elementary principle of statutory construction that 'an act of Congress ought never to be construed to violate the law of nations if any other possible construction remains'. Murray v. Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804). While international obligations cannot override inconsistent requirements of domestic law, 'ambiguous statutory provisions . . . [should] be construed, where possible, to be consistent with international obligations of the United States'. Footwear Distributors and Retailers of America v. United States, 852 F. Supp. 1078, 1088 (CIT), appeal dismissed, 43 F.3d 1486 (Table) (Fed.  Cir. 1994), citing DeBartolo Corp. v. Florida Gulf Coast Building and Trades Council, 485 U.S. 568 (1988)".

⁶⁸² The SAA, as is often the case in trade policy and trade law circles, uses "section 301" as a generic term referring to enforcement procedures under Sections 301-310 more generally.  Thus, when referring to "section 301 determinations", we understand this to mean any determination made under Sections 301-310.   

⁶⁸³ The US, in its answer to Panel Question 25 (as reflected in paras. 4.121 and 4.534 of this Report), unambiguously confirmed this construction.  It noted in particular that "[t]he SAA must, by law, be treated as the authoritative expression concerning the interpretation of the statute in any judicial proceedings" and that with reference to all elements under Section 304 "under U.S. law, it is required to base an affirmative determination that U.S. WTO agreement rights have been denied on adopted panel and Appellate Body findings.  That is to say, U.S. law precludes such an affirmative determination not based on adopted panel or Appellate Body findings". 

⁶⁸⁴ Of course, it is easier to change administrative decisions than it is to change legislation.  However, as noted in para. 7.133, in the event the US administration were to repeal its undertaking in respect of US domestic law, it would not only go against express expectations held by Congress set out in the SAA.  The US would also expose itself to a finding of inconsistency with its WTO obligations.  

⁶⁸⁵ SAA, p. 1.

⁶⁸⁶ SAA, pp. 365-366.

⁶⁸⁷ In this respect, the EC refers to Section 102(a) of the US Uruguay Round Agreements Act 1994, the Act by which the US Congress approved the WTO Agreement.  Section 102(a) of this Act provides

"(1) United states law to prevail in conflict. - No provision in any of the Uruguay Round Agreements, nor the application of any such provision to any person or circumstance, that is inconsistent with any law of the United States shall have effect.

(2)  Construction. - Nothing in this Act shall be construed - …

(B) to limit any authority conferred under any law of the United States, including section 301 of the Trade Act of 1974 unless specifically provided for in this Act".

We note, however, that even if one were to hold that, pursuant to Section 102(a), the WTO agreements and the Uruguay Round Act itself could not, and did not, curtail the USTR's discretion under Section 304, in our view, the US Administration itself could do so, and did so, inter alia, in the SAA.  It did so validly by means of exercising discretion granted to it under the statutory language of Section 304.

⁶⁸⁸ SAA, pp. 366-367:

"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 a foreign government has blocked adoption of a GATT panel report against it.

Just as the United 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. The risk of counter-retaliation under the GATT has not prevented the United States from taking action in connection with such matters as semiconductors, pharmaceuticals, beer, and hormone-treated beef".

It may be possible to construe these two paragraphs in the SAA as in fact indicating that the conditions which explain an abusive use of Section 301 in the past – in particular, the blocking of adoption of a panel report – no longer prevail under the WTO (see US Answer to Panel Question 38 reflected in paras. 4.134-4.140 of this Report).  We decided to put the worst possible construction on these paragraphs in the SAA concluding that there is a tension between these paragraphs and the undertakings in the bullet points.  As indicated in the body of the Report, this tension ought to be resolved following US constitutional law principles in favour of a construction which upholds compliance with international legal obligations.  We were brought to that solution also when considering, in addition, the solemn undertakings of the US to the Panel confirming the Administration's view set out in the bullet points that in the light of the SAA the USTR is precluded from applying Sections 301-310 in a manner inconsistent with WTO obligations.

⁶⁸⁹ As noted earlier, the SAA is explicitly said to represent an authoritative expression "both for purposes of U.S. international obligations and domestic law", see para. 7.110 of this Report.

⁶⁹⁰ SAA, p. 366.

⁶⁹¹ See also footnote 683 above.

⁶⁹² In the Nuclear Test case (Australia v. France), the ICJ held that France was legally bound by publicly given undertakings, made on behalf of the French Government, to cease the conduct of atmospheric nuclear tests.  The criteria of obligation were:  the intention of the state making the declaration that it should be bound according to its terms; and that the undertaking be given publicly:

"It is well recognized that declarations made by way of unilateral acts, concerning legal or factual situations, may have the effect of creating legal obligations.  Declarations of this kind may be, and often are, very specific.  When it is the intention of the State making the declaration that it should become bound according to its terms, that intention confers on the declaration the character of a legal undertaking, the State being henceforth legally required to follow a course of conduct consistent with the declaration.  An undertaking of this kind, if given publicly, and with an intent to be bound, even though not made within the context of international negotiations, is binding".

(ICJ Reports (1974), p. 253 at pp. 267-271, quoted above from para. 43; see also Nuclear Test case (New Zealand v. France), ICJ Reports (1974), p. 457, at pp. 472-475; Legal Status of Eastern Greenland case, PCIJ Reports, Series A/B, No. 53, where a statement was found to have legal effects even though it was not made publicly but in the course of conversations with the Norwegian Foreign Minister; Nicaragua case (Merits), ICJ Reports (1986), p. 14, at p. 132; Case Concerning the Frontier Dispute, ICJ Reports (1986), p. 554, at pp. 573-574 ).

In this case, the legal effect of the US statements does not go as far as creating a new legal obligation. Nonetheless we have applied to them the same, and perhaps even more, stringent conditions.  Subsequent to the Nuclear test case, some authors criticised  giving legal effect to declarations not directed to a specific State or States but expressed erga omnes (see Rubin, A., The International Legal Effects of Unilateral Declarations, American Journal of International Law, 1977, p. 1 and Franck, T., Word Made Law: The Decision of the ICJ in the Nuclear Test Cases, American Journal of International Law, 1975, p. 612).  In this case the US statements had explicit recipients and were made in the context of a specific dispute settlement procedure.

⁶⁹³ See paras. 7.110 and 7.114 of this Report.

⁶⁹⁴ In its first submission the US argued forcefully that Section 304 did not ever require the USTR to make a determination of inconsistency before exhaustion of DSU proceedings (see paras. 4.527-4.530 of this Report).  In its second submission the US went further and argued that the correct interpretation of Section 304 is that the USTR is legally precluded from making such determination (see paras. 4.536-4.537 of this Report).

⁶⁹⁵ Below we also canvass another hypothesis, see para. 7.133 of this Report.  In that alternative hypothesis the effect of the undertaking is actually to discharge State responsibility that the statutory language may have given rise to.

⁶⁹⁶ US oral statement, second meeting, para. 16 (see para. 4.990).

⁶⁹⁷ This dispute is explained in paras. 5.273-274 of this Report.  As a result of the US action in this respect, see also United States – Imposition of Duties on Automobiles from Japan under Section 301 and 304 of the Trade Act of 1974 ("Japan – Auto Parts"), WT/DS6 (complaint by Japan), settlement notified to the DSB.

⁶⁹⁸ See documents under WT/DS165.

⁶⁹⁹ In Japan – Auto Parts the US was not seeking redress of inconsistencies under the WTO, it was examining, inter alia, whether Japanese acts or policies in this respect were "unreasonable" under Section 301 (b).  We consider that even if conduct inconsistent with Article 23.2(a) occurred – a matter on which we express no opinion – the kind of inconsistency implicated would be outside our terms of reference since it covers issues not raised in the EC claims before us.

Whether the US violated Article 23 in the Bananas III case is one of the claims subject to separate panel proceedings.  Even if the US conduct in response to the alleged implementation of DSB findings by the EC was inconsistent with Article 23.2(a), we note that any determinations made by the US in this respect were made under Section 306 – i.e. were determinations on whether implementation of DSB findings took place – not under Section 304 at issue here, i.e. determinations on whether US rights are being denied prior to the issue of implementation arising.  The fact that determinations under Section 306 have to be considered, for purposes of, e.g. publication and subsequent action under Section 301, as determinations under Section 304, pursuant to Section 306 (b)(1), does not alter our conclusion.  We deal with the EC claim of inconsistency of Section 306 in Section VII.D below.

Finally, in Argentina – Textiles and Apparel (US), the USTR determination was published subsequently to both the lapse of the 18 months time-period referred to in Section 304 and the adoption of DSB findings on the matter.  The determination explicitly states that it is based on the findings of the DSB on the matter. We do not consider the fact that the determination was retroactively dated back to 3 April 1998, i.e. the day before the lapse of the 18 months time-period and thereby also a date prior to the adoption of DSB findings on the matter (22 April 1998), to be relevant on the international plane.  In our view, when it comes to examining Article 23.2(a), the actual date of the determination and, especially, the basis of the determination's finding are the critical elements.  In terms of US obligations to other WTO Members, this case shows that the US waited until the end of DSU procedures before it publicly announced its determination and that the USTR effectively based her findings on the result of the DSU process. The outcome of the DSU process conditioned the content of the USTR determination.