45. The United States submitted that it had not argued that the public international law rule of exhaustion of local remedies was applicable to dispute settlement proceedings under the Agreement but that the rationale of this rule was similar to the rationale of the Agreement-based requirements that an issue first be raised in the domestic administrative proceedings. Norway had not addressed the specific language of the Agreement relied upon by the United States to support its view that a matter not raised before the investigating authorities could not in the first instance be raised before a Panel. Rather, it had argued that the GATT system generally did not impose a requirement to go through national authorities before raising an issue in GATT dispute settlement proceedings. However, the Agreement established a rôle for domestic investigating authorities not found under other GATT provisions. Under Norway's argument, the investigating authorities were virtual appendages, which could be ignored at will. This view was inconsistent with the central and exclusive rôle provided under the Agreement for the investigating authorities.

46. The United States considered that, while Norway's discussion of the public international law rule of exhaustion of local remedies was beside the point in that the United States had not argued that this rule applied to dispute settlement under the Agreement, Norway's interpretation of this rule was in any event erroneous. Historically, the rule of exhaustion of local remedies had been used in cases where the national of one country had been injured by another country. In these cases, the national was required to seek redress under the allegedly offending country's system before asking his own government to try to resolve the dispute on a government-to-government level. The doctrine did not apply to disputes solely between countries. This distinction had been clarified in a recent judgement of the International Court of Justice in the Elettronica Sicula S.p.A. case.²⁵ There, the United States had claimed that the doctrine did not apply because the United States was representing itself, not the two American companies involved. The Court had rejected this argument, stating that "the matter which colours and pervades the United States claim as a whole is the alleged damage to Raytheon and Machlett, said to have resulted from the actions of the Respondent".²⁶ The Court had thus ruled that the doctrine of exhaustion of local remedies applied when a nation was primarily representing its nationals, even if some issues of sovereignty were present.

47. In the view of the United States, the interests of the Norwegian exporters "coloured and pervaded" Norway's claim in the proceedings before this Panel. This dispute had arisen only after the United States had imposed anti-dumping duties on Norwegian imports of fresh and chilled Atlantic salmon. The arguments made by Norway were in most instances identical to those which were made or could have been made by the private Norwegian interests during the investigations. In fact, Norway was actually espousing the interests of its nationals in these proceedings. Norway's argument that it was adjudicating its own rights under the Agreement, separate and apart from the interests of its nationals would create an exemption to the local remedies doctrine which would effectively swallow the entire doctrine. By definition, any time one country brought a claim against another, international legal rights, usually treaty rights or the equivalent, were at issue. To argue, as did Norway, that in any such instance the international matter involved an offence by one country against another and was thereby exempt from the exhaustion doctrine ignored the international jurisprudence on this subject. The United States was not claiming that disputes involving fundamentally private interests in which there was an element of government-to-government obligations were not rightfully a subject for international dispute resolution, but only that such disputes would not be exempted from the principle of exhaustion of local remedies.

48. The United States argued that the issues raised by Norway with respect to the alleged denial of national treatment was not within the Panel's terms of reference. In its first submission to the Panel, Norway had for the first time argued that the United States had failed to provide national treatment, as required by Article III of the General Agreement. As the United States understood it, Norway alleged less favourable treatment because its imports were subject to anti-dumping duties, while domestically produced salmon was not subject to anti-dumping duties. Norway had not provided any argumentation based on the Agreement for this novel approach, but had relied solely on Article III of the General Agreement. The issue of a violation by the United States of its obligations under Article III of the General Agreement did not appear in document ADP/65/Add.1. Given that the Panel's terms of reference had been defined in document ADP/69 by reference to documents ADP/65 and Add.1, the Panel's terms of reference excluded this issue. In any event, there was no basis for Norway to raise an issue under the General Agreement as part of panel proceedings under Article 15 of the Agreement. Norway had explicitly stated that its national treatment stemmed from Article III of the General Agreement. The Panel's terms of reference mandated the Panel to "examine [the matter] in light of the relevant provisions of the Agreement on Implementation of Article VI of the General Agreement". Arguments based on the General Agreement were outside this mandate.

49. The United States also argued that the issue raised by Norway regarding the differing treatment of foreign and domestic respondents was outside the Panel's terms of reference. The question of the allegedly disparate treatment of Norwegian and domestic producers was referenced in neither ADP/65 nor in ADP/65/Add.1, which had been specifically referred to in ADP/69 as providing the basis for the Panel's consideration. Accordingly, the Panel's terms of reference excluded this issue. Moreover, Norway's argument concerning the differing treatment of foreign and domestic producers was an issue that arose under Article III of the General Agreement. As such, this issue could not properly be raised before a panel formed under the Agreement.

50. Norway argued that the terms of reference of the Panel, as stated in document ADP/69, provided that the Panel's mandate was to examine "the matter referred to the Committee referred by Norway in documents ADP/65 and Add.1". The "matter" referred to the Committee by Norway was the imposition of anti-dumping duties on imports of fresh Atlantic salmon from Norway.

51. With regard to the issue of the denial of national treatment, Norway noted that it had raised the issue of fair and equitable treatment throughout the consultation, conciliation and panel process. The national treatment requirement was included in the Agreement's requirement of fair and equitable treatment, except to the extent that national treatment was specifically not required by the Agreement (e.g., the imposition of anti-dumping duties after meeting the procedural requirements of the Agreement). Norway pointed out that this matter had been identified in Norway's request for the establishment of a panel (document ADP/65/Add.1, item III).

52. With respect to the comments made by the United States on whether the issue of different treatment of domestic and foreign respondents was within the Panel's terms of reference, Norway referred to its observations on the issue of national treatment.

53. The United States considered that the issue raised by Norway concerning the use by the Department of Commerce of the Norwegian central exporters' organization's processing fees in the calculation of the constructed normal values was not within the Panel's terms of reference. This issue was referenced in neither ADP/65 nor ADP/65/Add.1, which were specifically referred to in document ADP/69 as providing the basis for the Panel's consideration. Accordingly, the terms of reference excluded this issue.

54. Norway argued that the question of the use of the central exporters' organization's processing fee had been raised in Norway's request for the establishment of a panel (document ADP/65/Add.1, item II.A).

55. The United States considered that Norway's submission concerning the continued imposition of the anti-dumping duty order was not within the Panel's terms of reference. No reference to this issue appeared in document ADP/65/Add.1.

56. The Panel asked the United States to comment on the reference made in document ADP/65/Add.1, section V.A to the issue of the continued imposition of the anti-dumping duty order. The United States observed that, while Article 9 of the Agreement was nominally referenced in ADP/65/Add.1, at Section V.A, this section only referred to events up to the time of the USITC's final affirmative injury determination. As such, that section did not raise a cognizable issue under Article 9 of the Agreement, which concerned the continuation of anti-dumping duties, rather than their imposition in the first instance.

57. The United States argued that the issues raised by Norway with respect to the denial of national treatment, the allegedly differing treatment of foreign and domestic respondents, the use of minimum amounts for profits and the calculation of processing fees and the continued imposition of the anti-dumping duty order had not been raised by Norway in the consultations and conciliation preceding the establishment of the Panel and were therefore not properly before the Panel.

58. In support of its view that Norway was precluded from raising before the Panel issues not raised during consultations and conciliation, the United States argued that the Agreement embodied a fundamental principle of jurisprudence that certain procedures must be followed before a panel could consider the matter. Article 15 of the Agreement set forth this precept. The first two paragraphs stated the conditions for consultations. If consultations failed, a Party could under Article 15:3 refer the matter to the Committee on Anti-Dumping Practices for conciliation. Article 15:4 provided that the Parties must try to resolve the matter during the thirty-day conciliation period. According to Article 15:5, if, and only if, the Committee could not reach a solution after three months of conciliation, the Committee could convene a panel to resolve the dispute. Therefore, an issue could not be presented in the first instance to a panel. The principle at issue here was closely akin to the notion of exhaustion of local remedies under international law.

59. Norway, referring to its comments on the principles of exhaustion of local remedies and exhaustion of administrative remedies,²⁷ rejected the application of these principles to the remedies provided for under the Agreement. In any event, no new issues had been raised in the first instance before the Panel. Moreover, at least when issues had been raised in general in consultations and conciliation, they could be raised more specifically before the Panel without prejudicing the other party to the dispute. In this case, the United States had not been prejudiced because it had had at least one month to respond to any issues Norway might have covered more in detail in its first submission than during the consultations and the conciliation process. The United States had access to all underlying facts in the investigation and had had ample opportunities to rebut any arguments Norway might have elaborated upon since consultations and conciliation.

60. With regard to the issue of denial of national treatment and differing treatment of foreign and domestic respondents, the United States pointed out that these issues were not raised during consultations and that the text of Norway's request for conciliation (ADP/61) and the minutes of the meeting of the Committee on Anti-Dumping Practices held in July 1991 for purposes of conciliation under Article 15:3 (ADP/M/33) indicated that these issues had also not been raised during the conciliation process.

61. Norway argued that it had raised the issue of fair and equitable treatment throughout the consultation, conciliation and panel process. The national treatment requirement was included in the requirement of the Agreement of "fair and equitable" treatment, except to the extent that national treatment was specifically not required in the Agreement (e.g. the imposition of anti-dumping duties after meeting the procedural requirements of the Agreement). Norway pointed out that in document ADP/61, page 5, reference had been made to the use by the Department of Commerce of the "best information available" in an arbitrary and unwarranted manner. Moreover, as reflected in document ADP/M/33, paragraphs 28 and 29, at the conciliation meeting Norway had discussed the question of the use of the best information available and the information required from the Norwegian respondents.

62. With respect to the comments made by the United States on whether the issue of different treatment of domestic and foreign respondents was within the Panel's terms of reference, Norway referred to its observations on the issue of national treatment.

63. The United States argued that the issue raised by Norway regarding the use of minimum amounts for profits in the calculation of constructed normal values had not been raised during the bilateral consultations held between Norway and the United States and that the text of Norway's request for conciliation (document ADP/61) and the minutes of the meeting of the Committee on Anti-Dumping Practices held in July 1991 under Article 15:3 (document ADP/M/33) indicated that this issue also had not been raised by Norway during the conciliation process.

64. Norway argued that this issue had been raised during the bilateral consultations held between Norway and the United States. In support, Norway referred to a written question addressed by Norway to the United States during bilateral consultations held on 15 March 1991. In this question, Norway had asked the United States to explain how "the US cost calculation [could] possibly be right in light of the significantly lower EC cost calculation". In its request for conciliation (document ADP/61), Norway had identified this issue when it had alleged that the Department of Commerce had "arbitrarily allocated expenses" (document ADP/61, p.5). At the conciliation meeting held in July 1991, Norway had also referred to this issue (document ADP/M/33, paragraph 29).

65. The United States argued that the issue raised by Norway regarding the calculation of processing fees had not been raised during consultations and that the text of Norway's request for conciliation (document ADP/61) and the minutes of the meeting of the Committee on Anti-Dumping Practices held in July 1991 for purposes of conciliation under Article 15:3 of the Agreement (document ADP/M/33) indicated that this issue also had not been raised by Norway during the conciliation process.

66. Norway argued that the issue of the calculation of the exporters' processing fee had been raised by Norway during bilateral consultations. In support, Norway referred to a written question addressed by Norway to the United States during bilateral consultations held on 15 March 1991. In this question Norway had asked the United States to explain how "the US cost calculation [could] possibly be right in light of the significantly lower EC cost calculation". This issue had also been raised at the conciliation phase, as demonstrated by the reference in Norway's request for conciliation (document ADP/61) to the use of the best information available in an arbitrary and unwarranted manner.

67. The United States argued that the question of the continued imposition of the anti-dumping duty order had not been raised by Norway during the consultations and the conciliation process preceding the establishment of the Panel.

68. Norway argued that Article VI of the General Agreement constituted an exception to the obligations of Articles I and II of the General Agreement. The interpretative practice of the contracting parties confirmed that exceptions such as Article VI had to be interpreted narrowly and that the contracting party invoking the exception had the burden of proof of demonstrating that it had met all the requirements of the provision in question.²⁸ Article VI of the General Agreement provided that no anti-dumping or countervailing duties could be levied unless certain facts had been established and the contracting party invoking this Article had taken into account all facts necessary to meet the requirements of this Article.²⁹ The contracting party taking action under this Article must establish the existence of these facts when its action was challenged.³⁰ In the matter before this Panel, the United States had not demonstrated that it had met these requirements.

69. The United States considered that the proposition that Article VI of the General Agreement constituted an exception to fundamental rights and obligations under the General Agreement was contradicted by the text structure and the drafting and interpretative histories of the General Agreement. The fact that with respect to no other commercial practice subject to provisions of the General Agreement the drafters had used language as strong as in Article VI, where they had expressly provided that injurious dumping was to be "condemned" was revealing of the key rôle intended by the drafters for the unfair trade remedies within the GATT framework. The structure of the General Agreement also confirmed that Article VI had not been drafted as an exception. Article VI was placed at the beginning of the General Agreement, where the primary subjects of the General Agreement were found. By contrast, where the drafters had intended to craft exceptions, they had placed them at the end of Part II of the General Agreement in Articles XX and XXI. Indeed, the placement of these Articles (grouped together at the end of Part II), their titles (expressly identified as exceptions) and their text (e.g. the requirement that measures taken under these provisions not be a "disguised restriction on international trade) all set them clearly apart from inter alia Article VI. Moreover, application of anti-dumping and/or countervailing duties had also not been encumbered with restrictions and requirements to hold consultations found elsewhere in the General Agreement, e.g. in Article XIX.

70. Norway argued that the proposition advanced by the United States that Article VI was not an exception to fundamental principles of the General Agreement was inconsistent with the plain language of this Article and the overall objectives of the General Agreement. This view was also incompatible with previous panel findings, views of well respected international legal scholars and the drafting history of the General Agreement. In any event, the US argument on Article VI was irrelevant since, whatever the nature of Article VI, in the case before this Panel the United States had not met express requirements of the Agreement.

71. Norway argued that the statement in Article VI of the General Agreement that injurious dumping was to be "condemned" provided no support for the view that Article VI was not an exception to fundamental principles of the General Agreement. When, at the second session of the CONTRACTING PARTIES, the text of Article VI of the General Agreement had been replaced by Article 34 of the Havana Charter, the Working Party had noted that there was no difference in meaning between the original Article VI and Article 34 of the Havana Charter. This demonstrated that the inclusion of the word "condemned" was without significance If anything, the drafting history of Article 34 of the Havana Charter³¹ indicated that the term "condemned" had been added in order to limit, not expand, the use of anti-dumping measures. In November 1947, at the Havana Conference, Article 34 of the draft Charter had been considered by the sub-committee on general commercial policy provisions. A number of delegations to this committee had wanted to expand Article 34 to include a condemnation of dumping and to cover in addition to "price dumping" all forms of dumping without requiring an injury test. Another group of delegations had believed that the primary objective of the Article should be to restrict the abuse of anti-dumping measures. The result had been the current text of Article VI, which kept the main focus of the Article on limiting the use of anti-dumping duties but which included a statement that dumping was to be "condemned", but only dumping as defined in Article VI, and only if injury was also found. The inclusion of the word "condemned" had been necessary to reach a compromise under which the coverage of the Article was limited to instances of price dumping which caused injury. Norway noted that the United States had been among the delegations which had wanted the focus of the Article to be on restricting the use of anti-dumping duties, not on limiting the use of dumping in general.

72. Norway considered that Article II:2(b) of the General Agreement supported the view that Article VI was an exception. The language and placement of this provision demonstrated that the imposition of anti-dumping and countervailing duties was intended to be an exception to, not a fundamental right of, the General Agreement. In fact, one author had described the reference to anti-dumping and countervailing duties in Article II:2(b) as an "exception".³²

73. In response to the argument of the United States with respect to the placement of Article VI within the General Agreement, Norway observed that this argument overlooked the fact there were exceptions scattered all over the text of the General Agreement, e.g. in Articles I:2, II:2(a), (b) and (c), III:3, III:6, IV, XII, XIV and XIX. There was therefore no basis for the view that the placement of Article VI in the General Agreement indicated that the Article was not an exception. With respect to the argument that the absence in Article VI of provisions regarding consultation confirmed that this Article was not an exception, Norway noted that this argument ignored the practice of many signatories to require consultations before imposing duties under Article VI. Moreover, this argument failed to take into account that consultation procedures had been included in the Agreement and in the Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement, which had been designed to elaborate upon the requirements of Article VI.

74. The United States further argued that the negotiating history of the General Agreement demonstrated that remedies for dumped and subsidized goods had from the beginning been a fundamental aspect of the General Agreement. As described in a recent GATT publication, the promotion of fair competition (defined as curbing government subsidies, dumping and "other distortions of international competition") had been and remained one of the fundamental objectives of the General Agreement. This recent description of the fundamental nature of the rights under Article VI reflected the negotiating history of the General Agreement.³³ The drafters of the General Agreement had recognized in 1947 that distortions to international competition caused by unfair trade practices could be so severe that effective remedies to curb such distortions were essential: indeed, as essential to an overall programme of liberalization of international trade as, for example, the m.f.n. principle and the national treatment principle. The essential balance reflected in the text of the General Agreement was that contracting parties would open their markets - principally through tariff reductions - in exchange for reciprocal access and the right to take action against unfairly traded imports. Without such disciplines, tariff reduction would have been of little or no value. The importance of disciplines governing unfair trade practices was reflected in the formal announcement by the United States Department of State of the accession of the United States to the General Agreement. Describing Part II of the General Agreement, which contained the commercial policy provisions (including Article VI), the Department had explained that:

75. Regarding the negotiating history of the General Agreement, the United States also observed that injurious dumping had been viewed with such concern during the original GATT negotiations that proposals had been considered to permit imposition of tougher countermeasures than merely offsetting duties.³⁵ However, in the end the Article VI remedy had been limited to such duties. This choice indicated clearly that the drafters of Article VI had been capable of narrowing the anti-dumping/countervailing duty instrument in the General Agreement in whichever way they chose. The negotiating record revealed that the drafters had narrowed the remedy. By contrast, there was no support for the view of Norway that the application of that remedy should be further narrowed by, inter alia, establishing a burden of proof or persuasion on parties invoking their fundamental rights under Article VI. Indeed, the narrow nature of the remedy suggested the contrary: if the imposition of offsetting duties alone was to bear the burden of remedying the harm caused by, and deterring these anti- competitive and unfair trade practices, the application of the remedy should be broadly construed. In particular, it should not be restricted except as expressly required by the terms of Article VI. The drafting history also demonstrated that no special burden of proof had been contemplated with respect to contracting parties imposing duties under Article VI. Early proposals that the importing country be required to prove dumping allegations had been rejected in favour of the weaker and broader language of Article VI as adopted, which simply provided that imposition of anti-dumping duties or countervailing duties should occur only after a determination by a contracting party that dumping and injury existed.³⁶

76. Norway argued that the main objective of the General Agreement was the reduction of tariff rates on an m.f.n. basis. By contrast, nothing in the General Agreement obligated nations or firms to refrain from dumping³⁷ While "promoting fair competition" might be one of the objectives of the General Agreement, the GATT had never defined this to mean "curbing government subsidies, dumping and other distortions of international competition", as claimed by the United States. In fact, the arbitrary imposition of anti-dumping duties was regarded as a protectionist device in its own right, retarding the promotion of fair competition.³⁸ The GATT publication referred to by the United States did not define the promotion of fair competition in the manner suggested by the United States. Rather, it pointed out in a neutral fashion that "increasingly, the GATT is concerned with subsidies and dumping," and then pointed out more specifically that "the rules under which governments may respond to dumping in their domestic market by overseas competitors are contained in the GATT and an Anti-Dumping Code." Thus, the General Agreement and the Agreement provided for limitations on the use of anti-dumping measures and did not regulate the practice of dumping as such. This publication further referred to Article I of the General Agreement as "the key article" of the General Agreement and described Article VI as a "technical article designed to prevent or control possible substitutes for tariffs". The publication also referred to Article VI as "lay[ing] down the conditions under which anti-dumping duties may be imposed", which again confirmed that Article VI dealt with limits on the use of anti-dumping measures. Moreover, the United States was incorrect in referring to dumping as "unfair trade" in its discussion of this GATT publication. This publication did not describe dumping as "unfair trade"; nor was dumping described as "unfair trade" in the text of the General Agreement or in the Anti-Dumping Code.

77. In the view of Norway, the State Department publication referred to by the United States did not provide support for the view that Article VI remedies were a fundamental right of contracting parties to the General Agreement. The paragraph quoted by the United States referred to "non-tariff trade barriers" and did not discuss dumping. Interestingly, dumping was not mentioned in the introductory paragraph in which the State Department discussed the scope of the General Agreement, or in the paragraph which summarized the provisions of Part II of the General Agreement. By contrast, rules on tariffs, preferences, quotas, internal controls, customs regulations, state trading and subsidies were all identified in the introduction as key features of the General Agreement. This absence of a reference to the imposition of anti-dumping duties contradicted the view that from the outset the application of such duties had been considered a fundamental right under the General Agreement. To the contrary, the position of the State Department as reflected in this publication supported the view that Article VI had been intended to limit the application of anti-dumping measures, rather than to discipline dumping, as claimed by the United States.

78. The United States, referring to the Panel Reports in "Swedish Anti-Dumping Duties"³⁹, and in "New Zealand - Imports of Electrical Transformers from Finland"⁴⁰, argued that the interpretative history of the General Agreement strongly supported the view that Article VI should be construed as a remedial provision, rather than as an exception. The former Report was significant in that the Panel had held that a principle as important as the m.f.n. principle was not applicable to duties imposed under Article VI. By contrast, true exceptions, such as Article XX and XXI contained "soft" m.f.n. provisions, generally requiring or urging compliance with m.f.n. principles to the extent not inconsistent with the exception itself. Equally important was the Panel's holding that a party invoking Article VI bore no special burden of proof. Rather, the Panel had simply found that it:

To understand what the Panel had meant by "establishing the existence of dumping", it was instructive to note the context of the Panel's comment. The Panel had noted that the Swedish authorities "had not established that the export prices of the Italian exporters were less than the normal value"⁴². In the words of the Panel: "no definitive evidence had been brought forward to support the conclusion [of dumping]"⁴³. In other words, the Swedish authorities had not even collected the most rudimentary evidence of dumping; indeed, they appeared confused as to whether they believed that dumping had occurred on the basis of a comparison between home market prices and export prices, third country prices and export prices, or constructed values and export prices.⁴⁴ The facts of this case thus demonstrated that the Panel was to be taken at the plain meaning of its words when it had written that dumping must be "established" before action under Article VI was permitted.

79. With respect to the dispute in "New Zealand - Imports of Electrical Transformers from Finland", the United States observed that, while the Report of the Panel in this dispute was most frequently cited for reiterating the words of the Panel in the Swedish Anti-Dumping Duties case that a party invoking Article VI "must establish the existence" of injurious dumping, in fact the holding of the Panel in this case was far richer and consisted of two essential elements. First, the Panel had discussed the parties' respective allegations with regard to New Zealand's determination of dumping. After describing in detail the arguments of the parties to the dispute, it had reached the following conclusion:

The Panel's conclusion clearly indicated that, absent an express provision of the General Agreement which a complaining party could demonstrate to have been violated, and in the absence of evidence demonstrating that the factual basis of the determination did not conform to the requirements of the General Agreement, the party taking action under Article VI could be considered to have acted within its rights. In other words, the burden of producing evidence to the effect that the determinations were not made on a justifiable factual or legal basis rested with the complaining party.

80. Turning to the conclusions of the Panel on the injury determination, the United States noted that the Panel had faced an absolutist argument from New Zealand that the General Agreement did not permit any body other than a national investigating authority to make an Article VI determination or to review the basis for such a determination⁴⁶ Not surprisingly, the Panel had rejected this attempt to escape GATT review, finding that what New Zealand was asking for would be "complete freedom and unrestricted discretion in deciding anti-dumping cases without any possibility to review the action taken in the GATT".⁴⁷ Once again, it was in the context of responding to this argument that the Panel had concluded that a contracting party was under an obligation "to establish the existence" of dumping and injury.

81. The United States concluded that the two above-mentioned Panel Reports revealed that a contracting party acting under Article VI must be able to illustrate the factual basis of its determinations. In other words, the authorities must establish, quite literally, the facts on which their decision was founded. However, it was up to the party asserting a GATT and/or Code violation to demonstrate the basis - based on the express requirements of the GATT or the Codes - for the finding of a violation.

82. The United States argued that the conclusory statement - in dicta - by the Panel in "United States - Countervailing Duties on fresh, chilled and frozen pork from Canada"⁴⁸ concerning the scope of Article VI and its status as an "exception" to fundamental rights and obligations under the General Agreement found no support in the text of the General Agreement. The sources relied upon by this Panel when making this statement did not even relate to the interpretation and application of Article VI: the Report of the Panel in "Canada - Administration of the Foreign Investment Review Act"⁴⁹ concerned an interpretation of Article XX; the Report of the Panel in "Canada - Import, Distribution and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies"⁵⁰ involved Article XXIV:12, and the Report of the Panel in "Canada - Import Restrictions on Ice Cream and Yoghurt"⁵¹, involved an interpretation of Article XI:2(c)(i) of the General Agreement. Accordingly, the Panel's statement regarding Article VI as an exception was fundamentally in error and should be rejected by the Panel in this case.

83. Norway argued that previous Panel Reports supported the position that Article VI of the General Agreement was an exception to fundamental rules of the General Agreement. The Panel in "United States - Countervailing duties on fresh, chilled and frozen pork from Canada" had specifically stated that:

The sources cited by this Panel in its statement on Article VI were relevant in that the Panel Reports referred to by this Panel had involved various exceptions to the basic rules of the General Agreement and had described how such exceptions were to be interpreted. Each of these exceptions required the contracting party invoking the exception to justify the use of the exception with specific evidence. The United States could not ask this Panel to ignore the findings of the Panel in the pork case given that GATT panels were to make their judgements based upon the provisions of the General Agreement and past panel reports. The Report of the Panel in the pork case had confirmed that Article VI was an exception (as done by other Panel Reports). Contrary to what had been argued by the United States, Norway was not asking this Panel to subject Article VI remedies to stricter scrutiny than actions taken under other provisions of the General Agreement. Rather, Norway was asking the Panel that, in accordance with previous panel cases referred to in the pork decision involving other exceptions to the General Agreement, this Panel require the party applying the exception to justify in factual detail the consistency with the Agreement of its determination of the existence of dumping and injury.

84. Norway further observed in this context that the Report of the Panel on "EEC - Regulation on Imports of Parts and Components"⁵³ had also described Article VI as an exception.

85. Norway argued that the Panel in "Swedish Anti-Dumping Duties"⁵⁴ had found that the m.f.n. requirement did not apply to measures taken under Article VI not, as suggested by the United States, because of the fundamental nature of the rights of contracting parties under Article VI, but precisely because of the nature of Article VI as an exception to the m.f.n. requirement.

86. The United States noted that, although Norway had not referred to these sources, recent advocates seeking to circumscribe the scope of action under Article VI might have in mind a statement in the first Report of the Group of Experts that anti-dumping and countervailing duties "were to be regarded as exceptional and temporary measures to deal with specific cases of injurious dumping or subsidization". ⁵⁵ This statement could, however, not provide an argument in support of the view that Article VI was an exception. The word "exception" denoted "the act of excepting: EXCLUSION; a case to which a rule does not apply". By contrast, the word "exceptional" denoted something "RARE" or "deviating from the norm".⁵⁶ Anti-dumping and countervailing duties might have been intended to be "exceptional" in the sense that most products should not be subject to such measures because unfair trade should be the exception rather than the norm. However, to say that these measures were exceptional was completely different from asserting that the drafters had intended Article VI to be an exception to fundamental rights and obligations of contracting parties under the General Agreement, causing a party taking action under this Article to bear a special burden of proof to justify its action. Moreover, it was notable that the same Group of Experts, in a second Report, had clearly reaffirmed the broad nature of Article VI remedies when it had observed that:

If Article VI had been intended to be read narrowly, then surely subsidies specifically authorized elsewhere in the General Agreement would be among the first items read out of the purview of Article VI.

87. Norway argued that the first Report of the Group of Experts on Anti-dumping and Countervailing Duties confirmed that Article VI was an exception when it stated that anti-dumping duties and countervailing duties "were to be regarded as exceptional and temporary measures to deal with specific cases of injurious dumping or subsidization"⁵⁸. The United States had attempted to advance a semantic argument differentiating the term "exception" from "exceptional". However, the first meaning of the term "exceptional" in Websters Third New International Dictionary (the unabridged version of the dictionary cited by the United States), American Heritage, and Oxford English dictionaries was "forming an exception" or "being an exception". Both words meant the same: a deviation from the central principles of the General Agreement.

88. The United States concluded that an examination of the text as well as the drafting and interpretative histories of the General Agreement led to two basic conclusions concerning the status of Article VI in the framework of rights and obligations of the General Agreement. First, Article VI accorded rights to act against unfair anti-competitive trade practices which were essential to the establishment, essential balance and continued successful functioning of the GATT system. Second, the right under Article VI to impose offsetting duties was remedial in nature. In the case before the Panel, the United States had more than amply illustrated that the facts in the records of the US authorities established the existence of injurious dumping within the meaning of Article VI and the Agreement, consistent with the findings in the Panel Reports on "Swedish Anti-Dumping Duties" and "New Zealand - Imports of Electrical Transformers from Finland". The basis for Norway's claim in the present case appeared to be the view that it was sufficient for a contracting party challenging an action under Article VI to raise issues - whether or not founded on express requirements under the General Agreement - and then shift the burden onto the contracting party taking action under Article VI to prove the consistency of its action. However, Norway had not referred to specific legal requirements under the Agreement which would have been violated. Rather, Norway's entire argumentation was founded on the premise that, as the Party taking action, the United States bore some additional burden of proof. It was on the basis of this higher obligation of proof that Norway asked the Panel to find fault with the US determinations.

89. The United States considered that there were three basic problems with the approach taken by Norway in these proceedings. First, there was no basis for Norway's view that Article VI was an exception to fundamental rights and obligations under the General Agreement. Second, as the New Zealand Transformers Panel had held, a violation existed only when a determination was shown to be inconsistent with an express requirement. Norway had not shown that in the present case any express requirement of the Agreement had been violated. Finally, Norway's proffered rôle for panels as triers of fact was in fundamental conflict with the express provisions of the Agreement, which explicitly and exclusively empowered "the competent national authorities" to conduct the investigation. By contrast, dispute settlement provisions of the Agreement clearly contemplated that the important rôle reserved for panels was to resolve disagreements over interpretations of provisions of the Agreement.

90. Norway argued that even if one (incorrectly) assumed that Article VI was not an exception to fundamental GATT principles, a contracting party imposing anti-dumping or countervailing duties had to demonstrate that its determinations were consistent with the requirements of the General Agreement and with the requirements of the Agreements implementing and interpreting Article VI. The United States had argued that the contracting party taking action under Article VI need only meet a test of "reasonableness" and that it was up to the party asserting a violation of Article VI to demonstrate the basis for a finding of a violation. Under this proposed rule, the United States did not need to present all facts to the Panel to affirmatively demonstrate the "reasonableness" of its determinations but only needed to describe the methodology used and the conclusions it had reached and could then ask the Panel to assume that the determinations made were consistent with the requirements of the Agreement. Even if this standard of "reasonableness" were the correct standard, the United States had failed to demonstrate that its actions in the investigation of Atlantic salmon from Norway met this standard. Thus, the United States had failed to ask the petitioners even the most basic questions to determine whether they had in fact filed the petition on behalf of the domestic industry affected and the United States had imposed extremely onerous standards of response on Norwegian respondents but not on domestic respondents. While the United States claimed that Norway had not identified express requirements of the Agreement alleged to have been violated by the United States, Norway had in fact demonstrated how the actions of the United States violated specific requirements of the Agreement, including those contained in Articles 5:1 and 3:4.

91. Norway argued that, despite the claim of the United States, previous Panel Reports had not adopted a standard of "reasonableness" when reviewing actions taken under Article VI of the General Agreement. Rather, these Reports confirmed the view that the party taking action under this Article had to demonstrate that its actions were in conformity with the requirements of this Article and that it had established the requisite facts before imposing duties. In the proceedings before this Panel, the United States had neither provided the facts that formed the basis of its anti-dumping determination nor demonstrated that its anti-dumping duty was in conformity with the Agreement. Norway noted the argument of the United States that the Panel Report on "Swedish Anti-Dumping Duties"⁵⁹ case had concluded that a party taking action under Article VI bore no special burden of proof. However, Norway was not asking for a "special" burden of proof. Rather, it was asking that the Panel apply the same rule applied by previous Panels, i.e. that the United States demonstrate to the Panel that its determinations were in conformity with the Agreement. In discussing the Swedish Anti-Dumping Duties case, the United States had asserted that the Panel had simply found that it:

However, this was not "simply" what the Panel had found. The full statement of the Panel read as follows:

Thus, the Swedish Anti-Dumping Duties Panel required much more than clarity in the importing country's determination that dumping existed and confirmed the affirmative obligation of the contracting party imposing duties to demonstrate the existence of "certain facts".

92. Norway considered that the United States had failed to provide the full quotation from the New Zealand Transformers Case when describing that panel's conclusion regarding the standard of review. The full text of the second sentence in the statement quoted by the United States read as follows:

The part of this sentence omitted by the United States was essential as it demonstrated that the Panel had accepted the view of New Zealand, not because Finland had failed to meet some burden of proof, but because the Panel had required New Zealand to demonstrate the specific facts underlying its decision and had evaluated that decision on the basis of those facts. The United States was incorrect in paraphrasing the above standard as meaning that "the burden of producing evidence to the effect that the determinations are not made on a justifiable factual or legal basis rests with the complaining party". The Panel could not have been more direct in confirming that it was the contracting party imposing anti-dumping duties which was obliged to establish to the satisfaction of the Panel the factual basis and GATT-consistency of its determinations of dumping and injury. Norway further argued in this context that, if ever there were any doubts as regards the implications of the Swedish Anti-Dumping Duties and New Zealand Transformers cases with respect to the question of the obligation of a contracting party imposing duties under Article VI, this matter had been settled by the Panel in "United States - Countervailing Duties on fresh, chilled and frozen pork from Canada" when it had concluded that it was "up to the ... party invoking the [Article VI] exception, to demonstrate that it had met the requirements of Article VI:3"⁶². This obligation of a contracting party to demonstrate that it had met the necessary requirements of Article VI was not conditioned on Article VI being an exception to fundamental GATT principles.

93. Norway argued that the initiation by the United States of the anti-dumping duty investigation on imports of Atlantic salmon from Norway was inconsistent with Article 5:1 of the Agreement as a consequence of the failure of the United States' authorities to satisfy themselves before initiating the investigation that the request for the initiation of this investigation was filed on behalf of the domestic industry.

94. The United States argued that the petition had provided a satisfactory statement of industry support. In light of the certified statement that the major proportion of the domestic industry supported the petition, and the lack of significant opposition to the petition, the Department of Commerce had considered the petition to have been filed on behalf of the domestic industry and had satisfied itself of industry support prior to the initiation of the investigation.

95. Norway noted that the investigation had been initiated following a petition received by the United States' authorities on 28 February 1990 from the Coalition for Fair Atlantic Salmon Trade (FAST). This Coalition had requested the initiation of an anti-dumping and a countervailing duty investigation "on behalf of the United States' producers of fresh Atlantic salmon"⁶³. The petition had described FAST as "a limited trade association organized for the purpose of pursuing relief from unfairly traded Atlantic salmon from Norway under the US international trade laws". Its address was "c/o Ocean Products, Inc.", a firm which, shortly after the petition was filed, had been taken over by a Canadian firm. The petition listed in support of the petition 21 member companies which "to the best of the petitioner's information ... currently accounts for well over a majority of all production of this product in the United States"⁶⁴. In consultations held between the United States and Norway after the imposition of the anti-dumping duty order, the United States had indicated that in the case at hand it had followed its standard practice with respect to the question of the standing to file an anti-dumping duty petition: unless a substantial portion of the domestic industry came forth to oppose a petition, the Department of Commerce reasonably assumed that the domestic industry in question, or a major proportion thereof supported the petition. The United States interpreted the term "substantial portion" as more than half of the industry.

TO CONTINUE WITH UNITED STATES - IMPOSITION OF ANTI-DUMPING DUTIES ON IMPORTS OF FRESH AND CHILLED ATLANTIC SALMON FROM NORWAY

²⁵ 1989 I.C.J. Reports, p.15.

²⁶ Ibid paragraph 52.

²⁷ Supra, paragraphs 36-41.

²⁸ e.g. Report of the Panel in "Canada - Import, Distribution and Sale of Alcoholic Drinks by Canadian provincial Marketing Agencies", BISD 35S/37; Report of the Panel in "Canada - Administration of the Foreign Investment Review Act", BISD 30S/140, and Report of the Panel in "United States - Countervailing Duties on fresh, chilled and frozen pork from Canada", BISD 38S/30.

²⁹ Report of the Panel in "Swedish Anti-Dumping Duties", BISD 3S/81, paragraph 15; Report of the Panel in "United States - Countervailing Duties on fresh, chilled and frozen pork from Canada, BISD 38S/30, paragraph 4.8.

³⁰ Report of the Panel in "Swedish Anti-Dumping Duties", BISD 3S/81, paragraph 15 and Report of the Panel in "New Zealand - Imports of Electrical Transformers from Finland", BISD 32S/55, paragraph 4.4.

³¹ BISD II/41.

³² Jackson, World Trade and the Law of GATT (1969), p.210.

³³ GATT What It Is, What It Does (1990), p.4.

³⁴ 17 Dept. State Bull, 1042, 1045 (1947).

³⁵ Jackson, World Trade and the Law of GATT, (1969), p.421, note 55.

³⁶ E/PC/T/C.II/32 (1946) (Note of the Benelux countries).

³⁷ Report of the Panel in "Canada - Administration of the Foreign Investment Review Act, BISD 30S/140, 164.

³⁸ See, e.g. Petersmann, "Need for Reforming Anti-Dumping Rules and Practices", in 45 Aussenwirtschaft 179 (1990).

³⁹ BISD 3S/83

⁴⁰ BISD 32S/55

⁴¹ BISD 3S/83, 86

⁴² BISD 3S/83, 87

⁴³ BISD 3S/83, 88

⁴⁴ BISD 3S/83, 88-89

⁴⁵ BISD 32S/55, 67

⁴⁶ BISD 32S/55, 61-62

⁴⁷ BISD 32S/55, 67

⁴⁸ BISD 38S/30

⁴⁹ BISD 30S/140

⁵⁰ BISD 35S/37

⁵¹ BISD 36S/68

⁵² BISD 38S/30, paragraph 4.4.

⁵³ BISD 37S/132.

⁵⁴ BISD 3S/83

⁵⁵ BISD 8S/145

⁵⁶ Webster's Ninth New Collegiate Dictionary at 432 (1990).

⁵⁷ BISD 8S/194,200 (paragraph 32).

⁵⁸ BISD 8S/145

⁵⁹ BISD 3S/83

⁶⁰ BISD 3S/83, 85.

⁶¹ BISD 32S/55, paragraph 4.3.

⁶² BISD 38S/30, paragraph 4.4.

⁶³ Fresh Chilled and Frozen Salmon from Norway: Petition for the Imposition of Anti-Dumping and Countervailing Duties Pursuant to Sections 701, 702, 731 and 732 of the Tariff Act of 1930, as Amended, on behalf of the Coalition for Fair Atlantic Salmon Trade, 28 February 1990 (Public version), p.1.

⁶⁴ Ibid, p.6.

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