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UNITED STATES - IMPORT MEASURES
ON CERTAIN PRODUCTS (Continuation)
IX. Articles 23.2(a), 3.7 and 21.5 of the DSU 106. The Panel found that, by adopting the 3 March Measure, the United States acted inconsistently with its obligations under Articles 3.7, 21.5, 22.6, 23.1, 23.2(a) and 23.2(c) of the DSU. The United States appeals the Panel's findings of inconsistency with Articles 23.2(a), 3.7 and 21.5 of the DSU. 107. We first examine the appeal of the United States relating to Article 23.2(a) of the DSU. The Panel found that:
108. The United States contends that the European Communities' request for the establishment of a panel referred only to Article 23 of the DSU, and that the Appellate Body should reverse the Panel's finding of inconsistency with Article 23.2(a) on the basis that the panel request of the European Communities was insufficient to "present the problem clearly" as required by Article 6.2 of the DSU. The United States also argues that the European Communities "never requested or argued for" findings under Article 23.2(a), and that the European Communities failed to meet its burden of establishing a prima facie case of inconsistency with Article 23.2(a) of the DSU. The United States further submits that the Panel incorrectly found that a "determination as to the effect that a violation has occurred", within the meaning of Article 23.2(a) of the DSU, could be "implied" from the actions taken by the United States. 109. The request for the establishment of a panel of the European Communities stated:
110. Article 23 of the DSU states, in relevant part:
111. Article 23.1 of the DSU imposes a general obligation of Members to redress a violation of obligations or other nullification or impairment of benefits under the covered agreements only by recourse to the rules and procedures of the DSU, and not through unilateral action. Subparagraphs (a), (b) and (c) of Article 23.2 articulate specific and clearly-defined forms of prohibited unilateral action contrary to Article 23.1 of the DSU. There is a close relationship between the obligations set out in paragraphs 1 and 2 of Article 23. They all concern the obligation of Members of the WTO not to have recourse to unilateral action. We therefore consider that, as the request for the establishment of a panel of the European Communities included a claim of inconsistency with Article 23, a claim of inconsistency with Article 23.2(a) is within the Panel's terms of reference. 112. However, the fact that a claim of inconsistency with Article 23.2(a) of the DSU can be considered to be within the Panel's terms of reference does not mean that the European Communities actually made such a claim. An analysis of the Panel record shows that, with the exception of two instances during the Panel proceedings ,69 the European Communities did not refer specifically to Article 23.2(a) of the DSU. Furthermore, in response to a request from the United States to clarify the scope of its claim under Article 23, the European Communities asserted only claims of violation of Articles 23.1 and 23.2(c) of the DSU; no mention was made of Article 23.2(a).70 Our reading of the Panel record shows us that, throughout the Panel proceedings in this case, the European Communities made arguments relating only to its claims that the United States acted inconsistently with Article 23.1 and Article 23.2(c) of the DSU.71 113. The Panel record does show that the European Communities made several references to what it termed the "unilateral determination" of the United States.72 However, in those references, the European Communities did not specifically link the alleged "unilateral determination" to a claim of violation of Article 23.2(a) per se. The European Communities' arguments relating to the alleged "unilateral determination" of the United States were made with reference to the alleged failure on the part of the United States to redress a perceived WTO violation through recourse to the DSU as required by Article 23.1 of the DSU. At no point did the European Communities link the notion of a "unilateral determination" on the part of the United States with a violation of Article 23.2(a). 114. On the basis of our review of the European Communities' submissions and statements to the Panel, we conclude that the European Communities did not specifically claim before the Panel that, by adopting the 3 March Measure, the United States acted inconsistently with Article 23.2(a) of the DSU. As the European Communities did not make a specific claim of inconsistency with Article 23.2(a), it did not adduce any evidence or arguments to demonstrate that the United States made a "determination as to the effect that a violation has occurred" in breach of Article 23.2(a) of the DSU.73 And, as the European Communities did not adduce any evidence or arguments in support of a claim of violation of Article 23.2(a) of the DSU, the European Communities could not have established, and did not establish, a prima facie case of violation of Article 23.2(a) of the DSU.74 115. For these reasons, we conclude that the Panel erred in finding that the United States acted inconsistently with Article 23.2(a) of the DSU. Therefore, we reverse this finding of the Panel. 116. We next examine the appeal of the United States relating to Article 3.7 of the DSU. In paragraph 6.87 of the Panel Report, the Panel found that:
117. We recall that the United States does not appeal the Panel's findings of inconsistency with Articles 22.6 and 23.2(c) of the DSU. Instead, the United States appeals the Panel's finding of inconsistency with Article 3.7 of the DSU. The United States argues that the European Communities "never requested or argued for" findings under Article 3.7 of the DSU.75 Furthermore, the United States submits that the Panel erred in concluding that Article 3.7, last sentence, contains a specific obligation which can be the subject of a dispute under the DSU.
119. Article 3.7 is part of Article 3 of the DSU, which is entitled "General Provisions" and sets out the basic principles and characteristics of the WTO dispute settlement system. Article 3.7 itself lists and describes the possible temporary and definitive outcomes of a dispute, one of which is the suspension of concessions or other obligations to which the last sentence of Article 3.7 refers. The last sentence of Article 3.7 provides that the suspension of concessions or other obligations is a "last resort" that is subject to DSB authorization. 120. The obligation of WTO Members not to suspend concessions or other obligations without prior DSB authorization is explicitly set out in Articles 22.6 and 23.2(c), not in Article 3.7 of the DSU. It is, therefore, not surprising that the European Communities did not explicitly claim, or advance arguments in support of, a violation of Article 3.7, last sentence. The European Communities argued that the 3 March Measure is inconsistent with Articles 22.6 and 23.2(c) of the DSU. We consider, however, that if a Member has acted in breach of Articles 22.6 and 23.2(c) of the DSU, that Member has also, in view of the nature and content of Article 3.7, last sentence, necessarily acted contrary to the latter provision. 121. Although we do not believe that it was necessary or incumbent upon the Panel to find that the United States violated Articles 3.7 of the DSU, we find no reason to disturb the Panel's finding that, by adopting the 3 March Measure, the United States acted inconsistently with "Articles 23.2(c), 3.7 and 22.6 of the DSU".76 122. Finally, the United States appeals the Panel's finding of inconsistency with Article 21.5 of the DSU. The United States argues that this finding was based on "argumentation" that was not presented by the European Communities and on the "Panel's erroneous conclusion" that the 3 March Measure is inconsistent with Article 23.2(a) of the DSU.77 123. This appeal by the United States raises the question whether a panel is entitled to develop its own legal reasoning in reaching its findings and conclusions on the matter under its consideration. In our Report in European Communities ? Hormones, we held:
The Panel in this case exercised its discretion to develop its own legal reasoning. Contrary to what the United States argues, the Panel was not obliged to limit its legal reasoning in reaching a finding to arguments presented by the European Communities. We, therefore, do not consider that the Panel committed a reversible error by developing its own legal reasoning. 124. The United States further argues that the Panel's finding under Article 21.5 should be reversed because, in making this finding, the Panel relied on its "erroneous Article 23.2(a) finding".79 According to the United States, the Panel did not undertake any analysis separate from that under Article 23.2(a) in finding a violation of Article 21.5. The United States submits that the Panel:
125. The Panel stated in relevant part:
126. Our reading of the Panel Report does not lead us to conclude that the Panel based its finding of the inconsistency of the 3 March Measure with Article 21.5 on its conclusion that the measure was inconsistent with Article 23.2(a). Although the Panel considered that the obligation under Article 21.5 was "comparable" and "similar" to the obligation under Article 23.2(a), it explicitly stated that "Article 21.5, first sentence is another DSU obligation … which, although not explicitly listed in Article 23.2, is covered by Article 23.1 …"84. The Panel's references to Article 23.2(a) cannot be construed as the basis upon which the Panel reached its conclusions under Article 21.5. On the contrary, the Panel based its finding of inconsistency on the uncontested fact that, when the United States put in place the 3 March Measure, the WTO-consistency of the European Communities' implementing measure had not been determined through recourse to the WTO dispute settlement procedures as required by Article 21.5 of the DSU.85
127. We, therefore, uphold the Panel's finding that, by adopting the 3 March Measure, the United States acted inconsistently with its obligations under Article 21.5 of the DSU. 128. For the reasons set out in this Report, the Appellate Body:
129. As we have upheld the Panel's finding that the 3 March Measure, the measure at issue in this dispute, is no longer in existence, we do not make any recommendation to the DSB pursuant to Article 19.1 of the DSU.
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67. Panel Report, para. 6.107.
68. WT/DS165/8, 11 May
1999. 70. In its response to the United States' request for clarification, the European Communities explained as follows:
The European Communities then quoted Article 23.2(c) of the DSU in full and argued:
See paragraphs 13-15 of the European Communities'
oral statement at the first Panel meeting.
72. European
Communities' first written submission, paras. 5, 10, 20, and 28; European
Communities' second written submission, para. 30; and European Communities' oral
statement at second Panel meeting, Addendum to the Panel Report, p. 44.
75. United States'
appellant's submission, para. 56.
77. United States'
appellant's submission, para. 64. 79. United States' appellant's submission, para. 66. 80. Ibid.
81. Panel Report, para.
6.92. 83. Ibid., para. 6.130. 84. Ibid., para. 6.129.
85. Ibid., para.
6.130. |
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