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WORLD TRADE
ORGANIZATION

WT/DS121/AB/R
14 December 1999

(99-5419)

 
Original: English

 

ARGENTINA - SAFEGUARD MEASURES ON IMPORTS OF FOOTWEAR

 

AB-1999-7

Report of the Appellate Body

Table of Contents

I. Introduction

II. Arguments of the Participants

A. Claims of Error by Argentina - Appellant

1. Terms of Reference
2. Imposition of Safeguard Measures by a Member of a Customs Union
3.
Claims Under Articles 2 and 4 of the Agreement on Safeguards

B. Arguments by the European Communities - Appellee

1. Terms of Reference
2. Imposition of Safeguard Measures by a Member of a Customs Union
3.
Claims Under Articles 2 and 4 of the Agreement on Safeguards

C. Claims of Error by the European Communities - Appellant

1. Relationship Between Article XIX of the GATT 1994 and the
Agreement on Safeguards

D. Arguments by Argentina - Appellee

1. Relationship Between Article XIX of the GATT 1994 and the
Agreement on Safeguards

E. Arguments by the Third Participants

1.Indonesia
2.
United States

III. Issues Raised In This Appeal

IV. Terms of Reference

V. Article XIX of the GATT 1994 and "Unforeseen Developments"

VI. Imposition of Safeguard Measures by a Member of a Customs Union

VII. Claims under Articles 2 and 4 of the Agreement on Safeguards

A. Standard of Review
B. Interpretation and Application of Articles 2 and 4 of the
Agreement on Safeguards

1. Increased Imports
2. Serious Injury
3. Causation

C. Article 12.7 of the DSU

VIII. Findings and Conclusions


World Trade Organization

Appellate Body

Argentina - Safeguard Measures on Imports of Footwear Argentina, Appellant/Appellee European Communities, Appellant/Appellee Indonesia, Third Participant United States, Third Participant AB-1999-7 Present: Bacchus, Presiding Member Beeby, Member Matsushita, Member

I. Introduction

1. Argentina and the European Communities appeal certain issues of law and legal interpretation in the Panel Report, Argentina - Safeguard Measures on Imports of Footwear (the "Panel Report").1 The Panel was established to consider a complaint by the European Communities with respect to the application by Argentina of certain safeguard measures on imports of footwear.

2. On 14 February 1997, Argentina initiated a safeguard investigation and adopted Resolution 226/97, which imposed provisional measures in the form of minimum specific duties on imports of certain footwear.2 On the same day, the Argentine Ministry of Economy and Public Works repealed the minimum specific duties on imports of footwear ("DIEMs") that had been maintained by Argentina since 31 December 1993.3 The opening of the safeguard investigation and the implementation of a provisional safeguard measure were notified to the Committee on Safeguards by Argentina in a communication dated 21 February 19974 and, by further communication dated 5 March 1997, Argentina transmitted a copy of the provisional duty resolution to the Committee on Safeguards.5

3. On 25 July 1997, Argentina notified the Committee on Safeguards of the determination of serious injury made by its competent authorities, the Comisión Nacional de Comercio Exterior ("CNCE").6 Attached to this notification was Act 338, the report of the CNCE on serious injury. Act 338 incorporates by reference the Technical Report, a summary by CNCE staff of the factual data gathered during the safeguard investigation.7 On 1 September 1997, Argentina notified the Committee on Safeguards of its intention to impose a definitive safeguard measure.8 On 12 September 1997, Argentina adopted Resolution 987/97, which imposed, effective 13 September 1997, a definitive safeguard measure in the form of minimum specific duties on certain imports of footwear. On 26 September 1997, Argentina transmitted a copy of this Resolution to the Committee on Safeguards9, and Uruguay, as Pro Tempore President of the Mercado Común del Sur ("MERCOSUR")10 notified the definitive safeguard measure imposed by that Resolution.11 On 28 April 1998, Argentina published Resolution 512/98 modifying Resolution 987/97.12 On 26 November 1998, Argentina published Resolution 1506/98, further modifying Resolution 987/97, and, on 7 December 1998, the Argentine Secretariat of Industry, Commerce and Mines published Resolution 837/98 implementing Resolution 1506/98.13 The relevant factual aspects of this dispute are set out in further detail at paragraphs 2.1-2.6 and 8.1-8.20 of the Panel Report.

4. The Panel considered claims made by the European Communities that Argentina's safeguard measures are inconsistent with Articles 2, 4, 5, 6 and 12 of the Agreement on Safeguards, and with Article XIX:1(a) of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"). The Panel Report was circulated to the Members of the World Trade Organization (the "WTO") on 25 June 1999.

5. The Panel concluded that "the definitive safeguard measure on footwear based on Argentina's investigation and determination is inconsistent with Articles 2 and 4 of the Agreement on Safeguards" and, therefore, "that there is nullification or impairment of the benefits accruing to the European Communities under the Agreement on Safeguards within the meaning of Article 3.8 of the DSU."14 The Panel found "no basis to address the [European Communities'] claims under Article XIX of GATT separately and in isolation from those under the Safeguards Agreement."15 The Panel rejected the claims of the European Communities under Article 12 of the Agreement on Safeguards16 and, in light of its determination that the definitive safeguard measure is inconsistent with Articles 2 and 4 of the Agreement on Safeguards, the Panel did not consider it necessary to make findings with respect to the claims of the European Communities under Articles 5 and 6 of that Agreement.17

6. On 15 September 1999, Argentina notified the Dispute Settlement Body (the "DSB") of its intention to appeal certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"), and filed a Notice of Appeal pursuant to Rule 20 of the Working Procedures for Appellate Review (the "Working Procedures"). On 27 September 1999, Argentina filed its appellant's submission.18 On 30 September 1999, the European Communities filed its own appellant's submission.19 On 11 October 1999, Argentina20 and the European Communities21 each filed an appellee's submission. On the same day, Indonesia and the United States each filed a third participant's submission.22

7. On 19 October 1999, the Appellate Body received a letter from the Government of Paraguay indicating its interest "in attending" the oral hearing in this appeal. On 25 October 1999, the Appellate Body received a second letter from Paraguay clarifying that it was not requesting an opportunity to "make oral arguments or presentations at the oral hearing" as set forth in Rule 27.3 of the Working Procedures. Rather, Paraguay maintained that, as a third party which had notified its interest to the Dispute Settlement Body under Article 10.2 of the DSU, it had the right to "participate passively" in the oral hearing before the Appellate Body in the present dispute. No participant or third participant objected to the participation of Paraguay on a "passive" basis. On 26 October 1999, the Members of the Division hearing this appeal informed Paraguay, the participants and third participants that, having regard to the provisions of Articles 10.2 and 17.4 of the DSU as well as the provisions of Rules 24 and 27 of the Working Procedures, Paraguay would be allowed to attend the oral hearing as a "passive observer".

8. The oral hearing in the appeal was held on 29 October 1999. The participants and third participants presented oral arguments and responded to questions put to them by the Members of the Division hearing the appeal.

II. Arguments of the Participants

A. Claims of Error by Argentina - Appellant

1. Terms of Reference

9. Argentina argues that the Panel violated Article 7.2 of the DSU and exceeded its jurisdiction because the Panel not only considered, but relied on,23 alleged violations of Article 3 of the Agreement on Safeguards even though the European Communities' request for the establishment of a panel and the Panel's terms of reference mentioned alleged violations of only Articles 2 and 4 of the Agreement on Safeguards.

10. Argentina notes that Articles 3 and 4 of the Agreement on Safeguards are separate provisions, each of which sets out distinct requirements. In Argentina's view, Members intended with these provisions to allow national authorities to separate the Article 3 "findings and conclusions" requirement from the Article 4 requirement of a "detailed analysis", as is done in practice in Argentina. In this case, the "findings and conclusions" to which Article 3 refers are contained exclusively in Act 338 (on which the Panel relied), but no claim of a violation of Article 3 was
before the Panel.

11. Argentina emphasizes that due process concerns underlie the rule that a Panel's jurisdiction is limited by its terms of reference, as recognized in the Appellate Body Reports in Brazil - Measures Affecting Desiccated Coconut ("Brazil - Desiccated Coconut")24 and India - Patent Protection for Pharmaceutical and Agricultural Chemical Products ("India - Patents").25 Argentina concludes that, by excluding Article 3 from its panel request, the European Communities essentially notified Argentina that it would not have to defend itself against Article 3 allegations. Argentina adds that since Article 3 is central to the Panel's decision-making, the Panel's statements about Article 3 cannot be considered harmless error, "purely gratuitous comment" or not "a legal finding or conclusion."26

2. Imposition of Safeguard Measures by a Member of a Customs Union

12. Argentina argues that the Panel erred in its legal reasoning and interpretation of the Agreement on Safeguards with respect to Argentina's right to exclude its partners in MERCOSUR from the application of safeguard measures. In Argentina's view, the Panel misinterpreted footnote 1 to Article 2.1 of the Agreement on Safeguards, and imposed an obligation to apply safeguard measures to customs union members when imports from all sources are taken into account for the injury determination, as well as a "parallelism requirement". Argentina maintains that neither of these supposed obligations has any basis in the Agreement on Safeguards.

13. Argentina contends that the footnote to Article 2.1 addresses comprehensively the conditions applicable to a safeguard investigation when a Member is part of a customs union. The fourth sentence of the footnote reflects the fact that Members could not agree on how to reconcile the requirements of Article XXIV:8 of the GATT 1994 with the most-favoured-nation requirement in Article 2.2 of the Agreement on Safeguards. Thus, in the last sentence of the footnote, Members specifically acknowledged that there was no resolution of this conflict in the Agreement on Safeguards. Argentina notes that the drafting history of footnote 1 shows that the Members deleted the very provisions that the Panel has attempted to "read in" to the existing text of the footnote.27

14. Argentina alleges as well that the Panel erred in law by imposing a "parallelism requirement" between the determination of injury and the application of the safeguard measure that is not found in the Agreement on Safeguards. Article 5, which sets out the requirements for the application of safeguard measures, makes no reference to any requirement of "parallelism", except to the extent that a measure may not exceed what is necessary to remedy the injury. Similarly, Article 9, which exempts developing countries from the application of safeguard measures in certain circumstances, does not impose a requirement that parallel modifications be made as part of the injury determination. In Argentina's view, the only "parallelism" on which the Members agreed is that only the market where injury is found can apply safeguard measures.

3. Claims Under Articles 2 and 4 of the Agreement on Safeguards

15. Argentina argues that, despite articulating a standard of review which essentially requires that a decision be "reasoned" and the decision-making process "explained", the Panel committed "significant legal error" by engaging in a "wholesale exercise of de novo review".28 In its appellant's submission, Argentina referred to the standard of review applied by the panel in United States - Imposition of Antidumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway ("United States - Salmon")29 , as well as certain national rules of judicial review, for example, in the United States Court of Appeals for the Federal Circuit. Argentina clarified during the oral hearing that it accepts that the appropriate standard of review is found in Article 11 of the DSU, and that the Panel correctly identified this standard of review. Argentina's position is, rather, that having identified the proper standard of review, the Panel did not apply it correctly. Instead, Argentina contends, the Panel erred in conducting a "de facto de novo" review of the findings and conclusions of the Argentine investigating authority.

16. In Argentina's view, the Panel's approach demonstrates confusion about the meaning of de novo review.30 The Panel repeatedly substituted its judgment for that of the Argentine authorities and set out its own view of the correct analysis to be made and the conclusions to be drawn. The Panel's analysis went far beyond the approach used in the cases to which to the Panel referred.31 The Panel read methodologies into the Agreement on Safeguards where that Agreement itself is silent, and it did so despite the fact that the Members have reached no agreement on such methodologies. Argentina also contests the Panel's characterization of the object and purpose of the Agreement on Safeguards as focused on limiting trade restrictions, and its reliance on this characterization in its reasoning and decision making. Argentina argues that the Agreement on Safeguards was in fact intended both to increase discipline and transparency in safeguards cases and to liberalize some of the rules relating to Article XIX in order to encourage Members to eliminate grey-area measures.

17. With respect to the Panel's analysis of Argentina's determination that imports had increased, Argentina argues that the Panel collapsed the "increased imports" requirement with other requirements of Article 2, and wrongly treated it as a qualitative, rather than a quantitative requirement. In Argentina's view, the ordinary meaning of increased imports is that imports have become greater, and, contrary to the position of the European Communities, there is no factual or contextual support for any additional requirements in the Agreement on Safeguards.

18. Argentina emphasizes that the Panel took a very specific view of how the "increase" in imports must be calculated and compared. Even though the Panel recognized that the five-year base period selected was not inappropriate and that, on the basis of such review period, imports increased, the Panel nevertheless continued its inquiry and imposed a number of methodological hurdles which must be overcome before a finding of "increased imports" can be justified. The Panel misdefined the word "rate" in Article 4 to include "direction", and found that there could only be "increased imports" in this case if: (i) a change in the base year from 1991 to 1992 would still result in an increase; (ii) the analysis of end points and interim periods were mutually reinforcing; and (iii) it was found that the decrease in imports in 1994 and 1995 was temporary.

19. Argentina argues that, in its attempt to arrive at the "correct" result, the Panel ignored the following: (i) 1991 was an appropriate starting point to measure any increase because 1991 was the year in which market reforms were completed in Argentina; (ii) the "mutually reinforcing" requirement means that virtually any decrease in imports during a review period could prevent a finding of increased imports; and (iii) the Argentine decision in Act 338 specifically notes that the decline in imports was due to the specific duties that had been placed on footwear imports.

20. Argentina contends that, in effect, the Panel did not object to the analysis made by the Argentine authorities, but to their conclusion that imports increased absolutely. The Panel erred because the effect of its approach was to redetermine the weight to be assigned to each fact. Such an approach does not meet the requirement of Article 11 of the DSU that an objective assessment be provided. The Panel also violated Article 11 of the DSU by referring to the preliminary, rather than the final determination of the Argentine authorities, in support of its findings. In addition, the Panel violated Article 3.2 of the DSU by imposing obligations on Argentina that are not found in the Agreement on Safeguards.

21. Argentina submits also that the Panel erred in its analysis of Argentina's determination of "serious injury". In Argentina's view, Article 4.2(c) of the Agreement on Safeguards only requires a demonstration of the relevance of the factors examined, and not an examination of whether all factors are relevant. The Panel wrongly found that Argentina had not properly considered the factors of capacity utilization and productivity, despite the fact that productivity is explicitly mentioned in Act 338 and the data to calculate capacity utilization was available to the Argentine authorities.

22. Argentina argues further that the Panel misinterpreted the evidence on "serious injury" and then found it to be legally deficient. The Panel improperly "required" Argentina to consider 1996 data as part of its injury determination, and erred in dismissing Argentina's argument that it could not have relied on 1996 data, as the record clearly shows that the data for 1996 was incomplete. Argentina submits that it was appropriate and reasonable to use a single review period for which all data was available as the basis for its consideration of all injury factors.

23. Despite certain statements made by the Panel, Argentina argues that the record is clear about the data used for each injury factor. Accordingly, the Panel erred in: (i) finding that Argentina violated the Agreement on Safeguards because the questionnaire results did not match such public industry-wide data; (ii) criticizing the Argentine authorities' treatment of interested party data which differed from questionnaire results; (iii) criticizing as inconsistent the data on overall firm profitability and its break-even point analysis; and (iv) finding that Argentina did not explain how a shift to higher-value production was a sign of injury.

24. Argentina argues that the Panel further erred in its findings with respect to causation. The Argentine authorities concluded that imports took market share from the domestic industry, and that this led to a fall in domestic production that caused financial and economic indicators to fall for the companies investigated. The Panel criticized this analysis and set out three of its own "standards". First, the Panel required that an upward trend in imports coincide with a downward trend in the injury factors. Argentina notes that Article 4.2(c) of the Agreement on Safeguards refers to "changes", not "downward trends", so there is no requirement that there be a downward trend in each year of the period of review. Moreover, the Panel's requirement of "coincidence" in time is not implied by the term "cause". Second, the Panel used the phrase "under such conditions" to develop a requirement that the "conditions of competition" between imported and domestic footwear in the Argentine footwear market demonstrate a "causal link" between increased imports and injury. Argentina asserts that there is no basis in the Agreement on Safeguards for this requirement. Third, the Panel required the Argentine authorities to establish that other relevant factors have been analyzed, and that injury caused by factors other than imports has not been attributed to imports. Argentina maintains that this requirement goes far beyond those actually contained in the Agreement on Safeguards, and fails to acknowledge the approach of the Argentine authorities, which ensured that general macroeconomic factors were not attributed to imports.

25. Finally, Argentina believes that the Panel violated Article 12.7 of the DSU, which requires that a panel report include the "basic rationale" behind any findings and recommendations that a panel makes. For example, Act 338 specifically notes that the decline in imports was due to the specific duties placed on footwear imports in 1993. Argentina contends that the Panel ignored this in its insistence that the Agreement on Safeguards requires an analysis of intervening trends and its criticism of Argentina for failing to take such trends into account. Argentina contends also that the Panel misinterpreted the evidence before it on "serious injury" and then found that evidence to be legally deficient. In Argentina's opinion, therefore, the Panel's conclusions "are not rational and do not follow logically from the evidence".32

B. Arguments by the European Communities - Appellee

1. Terms of Reference

26. The European Communities does not agree with Argentina that the Panel erred in considering or relying, in its reasoning, on Article 3 of the Agreement on Safeguards and, accordingly asks the Appellate Body to affirm the Panel's conclusions in that respect. The European Communities notes that the Panel has not found a violation of Article 3 of the Agreement on Safeguards as such. Instead the Panel legitimately referred to the requirements contained in Article 3.1 when considering the violation of Article 4.2(c) (which the European Communities did invoke), because Article 4.2(c) contains a cross-reference to Article 3. Moreover, the European Communities argues that, even in
the absence of a specific cross-reference, panels and the Appellate Body may, in their reasoning, legitimately rely on a provision that was not mentioned in the request for the establishment of a panel. The European Communities notes also that it made no claim of a violation of Article 3.

2. Imposition of Safeguard Measures by a Member of a Customs Union

27. The European Communities agrees with the Panel that the Agreement on Safeguards contains a "parallelism" requirement. By taking into consideration imports from MERCOSUR countries for the purposes of making its injury determination, even though it never intended to impose measures on those imports, Argentina violated its obligations under the Agreement on Safeguards and Article XIX of the GATT 1994. During the oral hearing, the European Communities emphasized, however, that the Panel's interpretation of Article XXIV of the GATT 1994 and Article 2.2 of the Agreement on Safeguards was not necessary to support its conclusion that a parallelism requirement exists, that no claim relating to the legal status of MERCOSUR was made before the Panel, and that neither party to this dispute has appealed the Panel's apparent assumption that Article XXIV is applicable.

28. The European Communities points out that the text of Article 2.1 of the Agreement on Safeguards sets out the requirements which should be fulfilled before a Member may apply a safeguard measure. This provision therefore underscores the inherent link between the requirements and the measure. Article 5 of the Agreement on Safeguards reinforces such a link by providing that "[a] Member shall apply safeguard measures only to the extent necessary to prevent or remedy serious injury" and that "Members should choose measures most suitable for the achievement of these objectives." In the view of the European Communities, Article 9 of the Agreement on Safeguards does not support Argentina's position that there is no "parallelism requirement" in the Agreement on Safeguards. Article 9 contains an express exception to the concept of "parallelism", but no similar express exception is foreseen for members of customs unions.

29. The European Communities argues that Article XIX of the GATT 1994 also requires parallelism. A liberalization obligation must give rise to increased imports, which in turn must cause serious injury. Under Article XIX, the authorized remedy for that serious injury can only be the suspension of the relevant GATT or WTO liberalization obligation. Accordingly, obligations incurred by Argentina within the framework of its customs union cannot justify a safeguard measure, and imports subject to such obligations must be excluded from the analysis. The European Communities notes in this context that there is no WTO obligation on Argentina not to impose safeguard measures on its MERCOSUR partners, only an internal MERCOSUR commitment.

3. Claims Under Articles 2 and 4 of the Agreement on Safeguards

30. The European Communities maintains that the Panel correctly interpreted and applied the standard of review contained in Article 11 of the DSU, and did not engage in a de novo review.

31. The European Communities requests the Appellate Body to uphold the Panel's findings on "increased imports". The European Communities submits that the requirement of "increased imports" in Article 2.1 of the Agreement on Safeguards "should now be read in the light of the new package of rights and obligations,"33 including Article XIX of the GATT 1994, and the Agreement on Safeguards, as well as on the basis of the object and purpose of these agreements. Given the content of the new "package", the determination of "increased imports" necessarily contains more than it did under the safeguard regime governed by Article XIX of the GATT 1947. The European Communities concludes that a strictly quantitative interpretation of the "increased imports" requirement (assuming arguendo that such an interpretation existed under Article XIX of the GATT 1947) can no longer be reconciled with the functioning of the safeguard mechanism under the WTO.

32. In the view of the European Communities, the Panel did not, as Argentina claims, require that both the end point to end point analysis and the intervening periods must be mutually reinforcing. Rather, the Panel concluded that the Member taking a safeguard measure should determine whether or not imports increased by examining the issue from more than just one angle. If one analysis goes in a different direction from the other, then, as the Panel says, this "raises doubts" as to whether the conclusion that "imports increased" is justified, and a proper explanation is required. The European Communities also highlights the fact that the Panel has based its reasoning on the "increased imports" requirement on the import figures for all countries, that is, including MERCOSUR countries. The European Communities argues that Argentina's non-fulfilment of the requirement of "increased imports" is even more striking when third-country imports are separated out.

33. The European Communities submits that the Panel correctly analysed Argentina's serious injury determination as required by Article 11 of the DSU and was justified in concluding that this determination did not comply with the Agreement on Safeguards. In the view of the European Communities, the ordinary meaning of the requirement contained in Article 4.2(a) of the Agreement on Safeguards that "the competent authorities shall evaluate all relevant factors" is that such authorities are required to: (i) evaluate at least all of the factors mentioned in Article 4.2(a), and possibly more, if necessary; and (ii) on the basis of this examination demonstrate - and publish - the relevance of the factors considered. The European Communities submits that the Panel correctly concluded that Argentina failed to undertake these legally required steps with regard to capacity utilization and productivity.

34. The European Communities also requests the Appellate Body to uphold the Panel's analysis of Argentina's treatment of 1996 data. Article 4.2(a) of the Agreement on Safeguards requires "all relevant factors" to be considered, and the most relevant information is the most recent. The European Communities rejects Argentina's claim that, since it could consider 1996 data for some but not for all factors, it was reasonable to use a single review period for which all data are available. The Agreement on Safeguards does not oblige Members to base their determinations on a complete set of data for all factors for a fixed time-frame. By deliberately ignoring the 1996 information for those factors for which it had collected the information, Argentina made conclusions which were not reasonably supported by the facts.

35. The European Communities submits that the Panel correctly analysed Argentina's causation determination, as required by Article 11 of the DSU, and was justified in concluding that this determination did not meet the requirements set out in Article 4 of the Agreement on Safeguards. In the view of the European Communities, the ordinary meaning of the term causation is "the act of causing or producing an effect".34 One event (the increase in imports) must produce the other event (serious injury). If the two events take place simultaneously, then the probability that the events are linked is greater than if they happen many years apart. The longer the time between the two events, the more a compelling analysis is required of why causation is still present.

36. The European Communities considers that the Panel correctly interpreted the "under such conditions" requirement in Article 2.1 of the Agreement on Safeguards as indicating the need to analyse the conditions of competition between the imported product and the domestic like or directly competitive products as part of the causation analysis required by Article 4.2(a) and (b).35 The European Communities disputes Argentina's claim that Article 4.2(b) of the Agreement on Safeguards does not require a separate analysis of possible "other" factors. In order to conclude that no "other" factor had caused the serious injury, the European Communities submits that it is necessary to examine whether there were such other factors present and to examine their impact on the domestic industry. In the view of the European Communities, by not providing such an analysis, in particular of the "tequila effect", Argentina violated Article 4.2(b) and (c) of the Agreement on Safeguards.

37. With respect to Argentina's claim of a violation of Article 12.7 of the DSU, the European Communities submits that, as the Appellate Body found in Korea - Taxes on Alcoholic Beverages ("Korea - Alcoholic Beverages"),36 the Panel has set out a detailed and thorough rationale for its findings and recommendations in this case, as required by Article 12.7 of the DSU, and, therefore, there is no violation.

 

To continue with C. Claims of Error by the European Communities - Appellant

Return to Table of Contents


1 WT/DS121/R, 25 June 1999.

2 Panel Report, para. 2.1. The Resolution became effective on 25 February 1997.

3 Ibid., para. 8.2.

4 G/SG/N/6/ARG/1, G/SG/N/7/ARG/1, 25 February 1997.

5 G/SG/N/6/ARG/1Suppl.1 and G/SG/N/7/ARG/1/Suppl.1, 18 March 1997.

6 G/SG/N/8/ARG/1, 21 August 1997.

7 Panel Report, paras. 5.250-5.251 and 8.127-8.128.

8 G/SG/N/10/ARG/1, G/SG/N/11/ARG/1, 15 September 1997; corrigendum 18 September 1997.

9 G/SG/N/10/ARG/1/Suppl.1, G/SG/N/11/ARG/1/Suppl.1, 10 October 1997.

10 MERCOSUR was established on 26 March 1991, when Argentina, Brazil, Paraguay and Uruguay signed the Treaty of Asunción, which provides for the creation of a common market among its four State Parties.

11 G/SG/N/10/ARG/1/Suppl.2, G/SG/N/11/ARG/1/Supp.2, G/SG/14/Suppl.1 and G/L/195/Suppl.1, 22 October 1997.

12 Panel Report, para. 2.5.

13 Ibid., para. 2.6.

14 Panel Report, para. 9.1. The Panel's conclusions applied to "the definitive safeguard measure in its original legal form (i.e., Resolution 987/97) as well as in its subsequently modified form (i.e., Resolutions 512/98, 1506/98 and 837/98)." (Panel Report, para. 8.305) This finding has not been appealed and, therefore, stands.

15 Panel Report, para. 8.69.

16 Ibid., paras. 8.301 and 8.304.

17 Ibid., paras. 8.289 and 8.292.

18 Pursuant to Rule 21(1) of the Working Procedures.

19 Pursuant to Rule 23(1) of the Working Procedures.

20 Pursuant to Rule 23(3) of the Working Procedures.

21 Pursuant to Rule 22 of the Working Procedures.

22 Pursuant to Rule 24 of the Working Procedures.

23 In paras. 8.126, 8.127, 8.205, 8.207, 8.218 and 8.238 of the Panel Report.

24 Appellate Body Report, WT/DS22/AB/R, adopted 20 March 1997, p. 22.

25 Appellate Body Report, WT/DS50/AB/R, adopted 16 January 1998, para. 92.

26 Appellate Body Report, Australia - Measures Affecting Importation of Salmon ("Australia - Salmon"), WT/DS18/AB/R, adopted 6 November 1998, para. 110.

27 Argentina cites a text tabled on 31 October 1990 by the Chairman of the Negotiating Group on Safeguards (MTN.GNG/NG9/W/25/Rev.3), which included the following proposal for the last sentence of the footnote:

It is understood that when a safeguard measure is applied by a customs union on behalf of a member state, [any injury attributable to competition from producers established in other member states in the customs union shall not be attributed to increased imports, in conformity with the provisions of sub-paragraph 7(b)] [such a measure shall be applied to imports from other member states of the customs union]. (emphasis added by Argentina)

28 Argentina's appellant's submission, p. 25.

29 Panel Report, ADP/87, adopted 27 April 1994, BISD 41S/229, para. 406.

30 Argentina notes that "de novo review" has been defined as "trying the matter anew - as if it had not been heard before." Black's Law Dictionary (West Publishing Co., 5th ed., 1979) p. 392.

31 Panel Report, United States - Restrictions on Imports of Cotton and Man-made Fibre Underwear ("United States - Underwear"), WT/DS24/R, adopted 25 February 1997, as modified by the Appellate Body Report WT/DS24/AB/R; Panel Report, United States - Measure Affecting Imports of Woven Wool Shirts and Blouses ("United States - Shirts and Blouses"), WT/DS33/R, adopted 23 May 1997, as upheld by the Appellate Body Report WT/DS33/AB/R.

32 Argentina's appellant's submission, p. 61.

33 European Communities' appellee's submission, para. 71.

34 European Communities' appellee's submission, para. 121.

35 Panel Report, para. 8.250.

36 Appellate Body Report, WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, para. 168.