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World Trade

Organization

WT/DS126/R
25 June 1999
(99-2217)
Original: English

 

Argentina - Safeguard Measures on Imports of Footwear

Report of the Panel

(Note by the Secretariat)


The report of the Panel on Argentina – Safeguard Measures on Imports of Footwear is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 25 June 1999 pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report. An appeal shall be limited to issues of law covered in the Panel report and legal interpretations developed by the Panel. There shall be no ex parte communications with the panel or Appellate Body concerning matters under consideration by the Panel or Appellate Body.


TABLE OF CONTENTS

 

I. Introduction
II. Factual Aspects
III. Findings and Recommendations Requested by the Parties
IV. Procedural Issues and Requests for Preliminary Rulings
A. Argentina's requests regarding the Panel's Terms of Reference
1. Minimum Specific Import Duties (DIEMS)
(a) The European Communities' Account of the "Factual and Procedural History" of the Dispute 
(b) Argument of Argentina
(c) Argument of the European Communities
2. Resolution MEYOSP 512/98, Resolution MEYOSP 1506/98, and Resolution SICyM 837/98, and panel recommendations on "hypothetical future measures"
(a) Arguments of Argentina
(i) Resolution MEYOSP 512/98 and Resolution MEYOSP 1506/98
(ii) Panel recommendations on "hypothetical future measures"
(b) Argument of the European Communities
B. Submission of evidence: exhibit arg-21
V. Main Arguments of the Parties concerning the issues arising under the Agreement on Safeguards and the GATT 1994
A. Article XIX:1(a) of GATT 1994 –"unforeseen developments"
1. Argument of the European Communities
2. Argument of Argentina
3. Response by the European Communities
4. Rebuttal by Argentina  
B. Interpretation and application of article 2.1 of the agreement on safeguards "the Mercosur question"   
1. Argument of the European Communities  
2. Argument of Argentina 
(a) Introduction 
(b) The criterion supported by the European Communities 
(c) Applicable provision: Meaning of the text  
(i) Application to the claim by the European Communities 
(ii) Literal interpretation of Article 2.1 and footnote 1 
(iii) Object and purpose of the footnote
(iv) Effectiveness of the footnote 
(v) Scope of the obligation contained in the footnote 
(vi) Meaning of the phrase "and the measure shall be limited to that member State" in the second sentence of the footnote 
3. Response of the European Communities 
C. Definitive safeguard measure 
1. Standard of Review 
(a) Argument of the European Communities 
(b) Argument of Argentina 
2. Article 2.1 of the Agreement on Safeguards: Alleged failure to demonstrate an "increase" in imports and alleged failure to analyse the "conditions" under which the imported products investigated entered the import market . 
(a) "Increased imports" 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
(b) "Under such conditions" 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
3. Article 2.1 and Article 4 of the Agreement on Safeguards – Alleged failure to demonstrate that "serious injury" or "threat of serious injury" occurred to the domestic industry that produces like or directly competitive products 
(a) Period of investigation 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
(b) Segmentation of products/market 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
(c) Investigation; Evaluation of "all relevant factors" 
(i) Factors set out in Article 4.2(a) 
(ii) Additional factors analysed by Argentina
(d) Finding of serious injury 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
(e) Threat of "serious injury" 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
4. Article 2.1 and Article 4.2(b) of the Agreement on Safeguards -- Alleged failure to demonstrate a "causal link" between increased imports and serious injury or threat of serious injury 
(a) Causal link – First sentence of Article 4.2(b) 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
(iii) Response by the European Communities 
(iv) Rebuttal by Argentina
(b) Other factors – Second sentence of Article 4.2(b) 
(i) Argument of the European Communities 
(ii) Argument of Argentina 
5. Article 5.1 of the Agreement on Safeguards - Alleged failure to demonstrate that the safeguard measure was applied only to the extent "necessary" to prevent or remedy serious injury and facilitate "adjustment"
(a) Argument of the European Communities 
(i) "necessary" 
(ii) Adjustment plan 
(b) Argument of Argentina 
6. Article 12.1 and 12.2 of the Agreement on Safeguards – Alleged failure to fulfill procedural requirements 
(a) Sufficiency of notifications on findings of serious injury and causation  
(i) Argument of the European Communities 
(ii) Argument of Argentina 
(b) Non-notification of Resolutions 512/98, 1506/98 and 837/98 07  
(i) Argument of the European Communities 
(ii) Argument of Argentina 
D. Provisional safeguard measure 
1. Arguments of the European Communities 
2. Argument of Argentina 
VI. Arguments of Third Parties 
A. Brazil, Paraguay and Uruguay 
B. Indonesia 
C. United States 
1. Introduction 
2. Standard of Review 
3. Legal Arguments 
(a) Argentina’s Safeguard Measure Violates Article 2 of the Agreement on Safeguards 
(b) Argentina’s Safeguard Measure Violates Article 5 of the Agreement on Safeguards 
(c) Argentina’s Purported Modification of its Safeguard Measure Violates Article 7.4 of the Agreement on Safeguards 
(d) The Requirements of Article XIX of GATT 1994 are Subsumed by the Agreement on Safeguards 
4. Conclusion 
VII. Interim Review 
VIII. Findings 
A. Factual background 
B. Claims 
C. Terms of reference and scope of the measures in dispute 
1. Minimum specific duties (DIEMs) 
2. Subsequent modifications of the definitive safeguard measure  
D. The claim under article xix of gatt 1994 and "unforeseen developments"  
E. Claims under the Safeguards Agreement 
1. The imposition of safeguard measures in the case of a customs union 
(a) Article 2 and the footnote to Article 2.1 
(b) Article XXIV of GATT 
2. Background to the investigation
(a) The domestic industry 
(b) The footwear products 
3. Standard of review 
(a) No de novo review
(b) Consideration of "all relevant factors"
(c) Argentina's report on the “detailed analysis of the case” setting forth its “findings and reasoned conclusions"
4. Claims under Articles 2 and 4 of the Agreement on Safeguards regarding Argentina’s investigation, and findings of serious injury, threat of serious injury and causation 
(a) Product segments 
(b) Are there “increased” imports in the sense of Article 2.1 and Article 4.2(a) of the Agreement? 
(i) Imports in absolute terms 
(ii) Imports Relative to Domestic Production
(iii) Evaluation by the Panel
(c) Serious injury
(i) Production
(ii) Sales 
(iii) Productivity
(iv) Capacity Utilisation 
(v) Profits and losses
(vi) Employment
(vii) Other injury indicators considered  
(viii) Evaluation by the Panel
(d) Causation 
(i) Summary of parties' arguments
(ii) Coincidence of trends  
(iii) “Under such conditions”
(iv) Other factors
(v) Summary regarding the claims under Articles 2 and 4
(e) Threat of serious injury 
5. Claims regarding the application of safeguard measures (Article 5)  
6. Claims regarding the provisional safeguard measure (Article 6)  
7. Claims regarding notification requirements (Article 12) 
(a) The notification of "all pertinent information"
(b) Notification of subsequent modifications
(c) Concluding remark 

IX. Conclusions


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