UNITED STATES - DEFINITIVE SAFEGUARD MEASURES
    ON IMPORTS OF WHEAT GLUTEN FROM THE
    EUROPEAN COMMUNITIES
    
    
    
    AB-2000-10
    
    
    Report of the Appellate Body

(continued)

 C. Article 8.1 of the Agreement on Safeguards

144. The United States also appeals the Panel's finding that it acted inconsistently with its obligations under Article 8.1 of the Agreement on Safeguards.¹³¹ Article 8.1 provides:

A Member proposing to apply a safeguard measure or seeking an extension of a safeguard measure shall endeavour to maintain a substantially equivalent level of concessions and other obligations to that existing under GATT 1994 between it and the exporting Members which would be affected by such a measure, in accordance with the provisions of paragraph 3 of Article 12. To achieve this objective, the Members concerned may agree on any adequate means of trade compensation for the adverse effects of the measure on their trade.

145. Article 8.1 imposes an obligation on Members to "endeavour to maintain" equivalent concessions with affected exporting Members. The efforts made by a Member to this end must be "in accordance with the provisions of " Article 12.3 of the Agreement on Safeguards.

146. In view of this explicit link between Articles 8.1 and 12.3 of the Agreement on Safeguards, a Member cannot, in our view, "endeavour to maintain" an adequate balance of concessions unless it has, as a first step, provided an adequate opportunity for prior consultations on a proposed measure. We have upheld the Panel's findings that the United States did not provide an adequate opportunity for consultations, as required by Article 12.3 of the Agreement on Safeguards. For the same reasons, we also uphold the Panel's finding, in paragraph 8.219 of its Report, that the United States acted inconsistently with its obligations under Article 8.1 of the Agreement on Safeguards.

VIII. Article 11 of the DSU

147. At the outset of its findings in this dispute, the Panel articulated a standard of review that was based on Article 11 of the DSU.¹³² The Panel said that it would not be appropriate for it to conduct a de novo review of the facts of the case, nor should it adopt a policy of "total deference" to the findings of the USITC.¹³³ Instead, the appropriate standard was an "objective assessment".

148. The European Communities agrees, as a general matter, with this articulation of the standard of review. However, it considers that the Panel failed properly to apply this standard of review. The European Communities makes a general assertion that the Panel failed to make an objective assessment "because [the Panel] failed to provide an adequate and reasonable explanation for its findings".¹³⁴ In addition, the European Communities asserts that:

[the] Panel's failure to obtain the relevant information claimed to be confidential by the US and its decline [sic] to draw the necessary adverse inferences from the US's refusal to submit the requested information amount to an error of law that permeates several of the Panel's findings.¹³⁵ 

For each of these arguments, the European Communities lists a series of paragraphs in the Panel Report which it considers are tainted by these errors.¹³⁶ Thereafter, the European Communities sets forth detailed arguments relating to four specific issues under Article 11 of the DSU which we understand are intended to substantiate the general assertions made. The four specific issues are: the treatment of "productivity" under Article 4.2(a) of the Agreement on Safeguards; the treatment of "profits and losses" under Article 4.2(a) of the Agreement; the treatment of the protein content of wheat under Article 4.2(a) of the Agreement; and the treatment of confidential information.

149. We note that the European Communities' appeal, insofar as it relates to the findings of serious injury, is limited to its arguments under Article 11 and the Panel's appreciation of the evidence. In addressing these arguments, we will examine the four specific issues highlighted by the European Communities to substantiate its more general assertions. We underline that we are not called upon to examine whether the Panel has properly applied the exacting legal standard in the Agreement on Safeguards relating to "serious injury".

150. Before turning to the European Communities specific arguments under Article 11 of the DSU, we recall that, in previous appeals, we have emphasized that the role of the Appellate Body differs from the role of panels. Under Article 17.6 of the DSU, appeals are "limited to issues of law covered in the panel report and legal interpretations developed by the panel". (emphasis added) By contrast, we have previously stated that, under Article 11 of the DSU, panels are:

… charged with the mandate to determine the facts of the case and to arrive at factual findings. In carrying out this mandate, a panel has the duty to examine and consider all the evidence before it, not just the evidence submitted by one or the other party, and to evaluate the relevance and probative force of each piece thereof.¹³⁷ (emphasis added)

151. We have also stated previously that, although the task of panels under Article 11 relates, in part, to its assessment of the facts, the question whether a panel has made an "objective assessment" of the facts is a legal one, that may be the subject of an appeal.¹³⁸ (emphasis added) However, in view of the distinction between the respective roles of the Appellate Body and panels, we have taken care to emphasize that a panel's appreciation of the evidence falls, in principle, "within the scope of the panel's discretion as the trier of facts".¹³⁹ (emphasis added) In assessing the panel's appreciation of the evidence, we cannot base a finding of inconsistency under Article 11 simply on the conclusion that we might have reached a different factual finding from the one the panel reached. Rather, we must be satisfied that the panel has exceeded the bounds of its discretion, as the trier of facts, in its appreciation of the evidence. As is clear from previous appeals, we will not interfere lightly with the panel's exercise of its discretion.¹⁴⁰ 

A. USITC's Treatment of "Productivity"

152. Article 4.2(a) of the Agreement on Safeguards refers to "productivity" as one of the enumerated "particular" relevant factors. Before the Panel, the European Communities claimed that the USITC failed properly to evaluate "productivity", as required by Article 4.2(a).¹⁴¹ The Panel concluded, to the contrary, that "the data and statements pertaining to worker productivity, in conjunction with those on capital investments, in the overall context of the USITC Report, indicate that the USITC considered industry productivity as required by Article 4.2(a)."¹⁴² (emphasis added)

153. As we understand it, the European Communities' appeal, on this point, is that the Panel erred, under Article 11 of the DSU, because the evidence before the Panel was not sufficient to support the conclusion that the "USITC considered industry productivity as required by Article 4.2(a)." ¹⁴³(emphasis added) In that respect, we note that neither the European Communities nor the United States appeals the Panel's interpretation of the word "productivity"¹⁴⁴ in Article 4.2(a) of the Agreement on Safeguards. Therefore, we do not address this question. We also note that the European Communities has not appealed the Panel's finding on the grounds that it erred in interpreting and applying either Articles 3.1 or 4.2(c) of the Agreement on Safeguards, which require the competent authorities to provide, respectively, "reasoned conclusions", as well as a "demonstration of the relevance of the factors examined". Nor does the European Communities assert that the Panel's treatment of "productivity" amounted to an error under Article 4.2(a) of the Agreement on Safeguards. Instead, the European Communities' appeal on this point is confined to the Panel's appreciation of the evidence under Article 11 of the DSU.

154. The European Communities submits that the Panel could not make an objective assessment of whether the USITC had evaluated "productivity" because the Panel had before it no specific numerical data on "productivity".¹⁴⁵ We recall that it is not part of our mandate to examine the facts afresh. Rather, we confine ourselves to determining whether the Panel has made an "objective assessment" of the facts under Article 11 of the DSU.¹⁴⁶ 

155. The Panel noted that the USITC had dealt expressly with "worker productivity" and "capital investments"¹⁴⁷. In that respect, the USITC Report stated that worker productivity was at its "lowest level" during the investigative period in 1997 and that "unit labor costs almost doubled during the period examined."¹⁴⁸ It is also clear from the USITC Report that the domestic industry introduced considerable new capacity during the investigative period, which implies significant capital investment.¹⁴⁹ However, as the USITC noted, there "was a significant idling of productive facilities in the industry over the period examined", evidenced by the fall in the rate of capacity utilization.¹⁵⁰ We agree with the Panel that the USITC could have provided a more comprehensive analysis of "productivity".¹⁵¹ However, although the evidence the Panel relied on is limited in nature, there are, in our view, insufficient grounds for concluding that the Panel erred, under Article 11 of the DSU, in finding that the USITC had "considered industry productivity as required by Article 4.2(a)."¹⁵² We, therefore, decline the European Communities' appeal on this point.

B. USITC's Treatment of "Profits and Losses"

156. Article 4.2(a) of the Agreement on Safeguards refers to "profits and losses" as one of the enumerated "particular" relevant factors. Relying on our statement in Argentina - Footwear Safeguards, that Article 4.2 of the Agreement on Safeguards requires the competent authorities "adequately [to] explain[ ] how the facts support[ ] the determinations that were made",¹⁵³ the European Communities claimed, before the Panel, that the United States acted inconsistently with Article 4.2 because the "USITC [did] not provide an adequate explanation for the determination made" with respect to profits and losses.¹⁵⁴ One aspect of that claim related to the alleged failure of the USITC to explain the methodology that it had applied to allocate profits among wheat gluten, wheat starch, and derived products. These products are all produced from a single raw material input, wheat or wheat flour, using a single production line. The allocation of costs and revenues among these co-products will, therefore, have an influence on the apparent profitability (or losses) made on production of any of the co-products.

157. In addressing the issue of the appropriate methodology, the USITC stated:

The Commission received usable financial data on wheat gluten operations from three of the four domestic producers of wheat gluten, Midland, Manildra, and Heartland. These three firms accounted for the substantial majority of domestic production of wheat gluten. Each of the companies produces wheat gluten and wheat starch in a joint production process. Each of the companies also produces other by-products or related products, especially alcohol. We carefully considered the arguments made by respondents with respect to the allocations made by domestic producers in providing financial data on their wheat gluten operations. Based on a careful review of the allocation methodologies used by domestic wheat gluten producers in responding to the Commission's questionnaire, we find those allocations to be appropriate."¹⁵⁵ (emphasis added)

158. After referring to this statement, the Panel observed that it had "asked the United States to clarify the nature of the 'careful review' the USITC had performed and to clarify and elaborate upon the 'allocation methodologies' referred to."¹⁵⁶ The Panel set out, at length, the "clarifications" provided by the United States and noted that the USITC "could have included … a more detailed explanation as to how and why the USITC considered the allocations to be 'appropriate' …¹⁵⁷". However, the Panel concluded that "the USITC Report provides an adequate, reasoned and reasonable explanation with respect to 'profits and losses' and that the United States did not act inconsistently with Article 4.2(a) of the Agreement on Safeguards in this regard."¹⁵⁸ (emphasis added) In reaching this conclusion, the Panel relied on the statements in the USITC Report quoted above and the "clarifications given by the United States".¹⁵⁹ 

159. The European Communities argues, on appeal, that the Panel erred, under Article 11 of the DSU, because it did not have sufficient facts before it to justify its conclusion on this issue. In other words, the evidence did not provide an objective basis for the Panel's conclusion. At the oral hearing, the European Communities drew particular attention to the fact that the USITC itself gives only a single sentence explanation to justify its conclusion that the allocation methodologies are "appropriate".¹⁶⁰ 

160. We recall that, under Article 3.1 of the Agreement on Safeguards, the competent authorities must "publish a report" which provides "reasoned conclusions" on "all pertinent issues". (emphasis added) Under Article 4.2(c), that report must also contain "a detailed analysis", including "a demonstration of the relevance of the factors examined". We observe that the Panel concluded, on the allocation methodologies, that it was "the USITC Report " which "provides an adequate, reasoned and reasonable explanation with respect to 'profits and losses' ".¹⁶¹ (emphasis added) Support for this conclusion must, therefore, be based on evidence drawn from the USITC Report itself. The only evidence, in that Report, that the Panel had to support this conclusion was the statement by the USITC that it had "carefully reviewed" and "considered" the allocation methodologies used by the producers.¹⁶² In reaching its conclusion that the USITC Report gave an adequate explanation, the Panel placed considerable reliance on the "clarifications" given by the United States in response to the Panel's questions on "the nature of the 'careful review' the USITC had performed".¹⁶³ These subsequent clarifications obviously do not figure in the USITC Report.¹⁶⁴ 

161. Although the Panel's conclusion on this issue was that the USITC Report contained an adequate explanation of the allocation methodologies, the Panel's reasoning discloses that the Panel clearly did not consider this to be the case. The Panel did not feel able to rely solely or, even, principally, on the explanation actually provided in the USITC Report and, instead, relied heavily on supplementary information provided by the United States in response to the Panel's questions. Indeed, the most important part of the Panel's reasoning on this issue is based on those "clarifications". We consider that the Panel's conclusion is at odds with its treatment and description of the evidence supporting that conclusion. We do not see how the Panel could conclude that the USITC Report did provide an adequate explanation of the allocation methodologies, when it is clear that the Panel itself saw such deficiencies in that Report that it placed extensive reliance on "clarifications" that were not contained in the USITC Report.

162. By reaching a conclusion regarding the USITC Report, which relied so heavily on supplementary information provided by the United States during the Panel proceedings - information not contained in the USITC Report - the Panel applied a standard of review which falls short of what is required by Article 11 of the DSU.

163. As a result we conclude that the Panel acted inconsistently with Article 11 in finding, in paragraph 8.66 of the Panel Report, that "the USITC Report provides an adequate, reasoned and reasonable explanation with respect to 'profits and losses' " and, therefore, we reverse this finding.

C. USITC's Treatment of the Protein Content of Wheat

164. Before the Panel, the European Communities argued that the USITC had failed to consider the overall relationship between the protein content of wheat and the price of wheat gluten as a particular "relevant factor" under Article 4.2(a) of the Agreement on Safeguards. According to the European Communities, this relationship is "the single, most important, factor determining the price of wheat gluten".¹⁶⁵ The Panel examined the evidence cited by the European Communities in support of its assertion that the issue of the protein content of wheat had been raised before the USITC. The Panel said:

… We have examined this evidence cited by the European Community before us. While this evidence demonstrates to us that the issue of the effect of protein premiums on price during 1993-1994 was certainly raised by the EU producer respondents as relevant before the USITC, we find that the European Community has not demonstrated to us as a matter of fact that the EU producer respondents clearly raised the broader issue of wheat protein premiums as a possible relevant causal factor pertaining to the post-1994 segment of the period of investigation which the European Community raises in these Panel proceedings.¹⁶⁶ (emphasis added)

165. The European Communities alleges that, in making this finding, the Panel failed to make an objective assessment of the facts, as required by Article 11 of the DSU. According to the European Communities, the evidence before the Panel, in the form of EC-Exhibit 10, demonstrated clearly the importance of the relationship between the protein content of wheat and the price of wheat gluten. In light of this evidence, it says, the Panel should have found that the USITC was required to examine this relationship as a relevant other factor, under Article 4.2(a) of the Agreement on Safeguards.

166. We recall that we have already examined the European Communities' appeal against the Panel's finding that the competent authorities need not examine "factors" that are neither listed in Article 4.2(a) of the Agreement on Safeguards nor clearly raised before the competent authorities as relevant by interested parties.¹⁶⁷ In that section of our findings, we concluded that the competent authorities may be required to evaluate "other factors" which were not "clearly raised" by the interested parties. However, we concluded that the evidence of record suggests that the overall relationship between the protein content of wheat and the price of wheat gluten becomes a relevant other factor, under Article 4.2(a), only when the protein content is unusually high or low. We concluded that, as the evidence indicates that the protein content of wheat was not unusually high or low during the post-1994 period of investigation, when the surge in imports occurred, the USITC was not required to "evaluate" the protein content of wheat as a particular relevant other factor under Article 4.2(a).¹⁶⁸ 

167. It seems, to us, that this finding, under Article 4.2(a) of the Agreement on Safeguards, also resolves the European Communities' appeal under Article 11 regarding the protein content of wheat. The European Communities argues that the evidence before the Panel should have led the Panel to find that the USITC was required to evaluate the overall relationship between the protein content of wheat and the price of wheat gluten as a relevant other factor, under Article 4.2(a), during the post-1994 period of investigation. However, contrary to the European Communities' arguments on this point, we have already found that the evidence of record does not indicate that the USITC was required to "evaluate" that relationship as a relevant other factor for that period. We, therefore, decline the European Communities' appeal on this point.

D. Failure to Draw the Appropriate Inferences

168. The Panel requested that the United States supply it with certain factual information.¹⁶⁹ The United States did not submit this information, maintaining that it was business confidential information ("BCI") and that, under Article 3.2 of the Agreement on Safeguards, it was entitled to withhold the requested information. The Panel proposed to the parties two different procedures for the protection of BCI. The United States informed the Panel that it could not submit the information under either of these procedures, but would be willing to submit the information to the Panel only. The Panel ruled that it could not accept the information on that basis because, by denying the European Communities access to the information, the Panel would have engaged in ex parte communications with the United States.¹⁷⁰ The Panel, however, stated that it was of the view that it could dispose of the case on the basis of the factual record to which it had access.¹⁷¹ 

169. The European Communities argues that the "Panel should have drawn adverse inferences from the US's refusal to provide to the Panel the redacted information from the published USITC report and the other information identified by the EC."¹⁷² The European Communities argues that the Panel should have drawn inferences adverse to the United States with respect to a number of different issues, in particular "productivity" and "profits and losses", where the Panel did not have access to specific numerical data. The European Communities notes that the Panel explicitly acknowledged that having access to the BCI would "have facilitated [its] objective assessment of the facts".

170. We begin by noting our strong agreement with the Panel that a "serious systemic issue" is raised by the question of the procedures which should govern the protection of information requested by a panel under Article 13.1 of the DSU and which is alleged by a Member to be "confidential".¹⁷³ We believe that these issues need to be addressed.

171. Next, we recall that we stated, in our original report in Canada - Aircraft, that Members of the WTO "are … under a duty and an obligation to 'respond promptly and fully' to requests made by panels for information under Article 13.1 of the DSU."¹⁷⁴ (emphasis added) In this case, despite the fact that the Panel proposed to exercise its authority, under Article 12.1 of the DSU, to determine its own procedures by adopting two different procedures for the protection of business confidential information, the United States declined to make available to the Panel, and representatives of the European Communities, certain information requested by the Panel under Article 13.1 of the DSU. As the Appellate Body said in Canada - Aircraft, the refusal by a Member to provide information requested of it undermines seriously the ability of a panel to make an objective assessment of the facts and the matter, as required by Article 11 of the DSU. Such a refusal also undermines the ability of other Members of the WTO to seek the "prompt" and "satisfactory" resolution of disputes under the procedures "for which they bargained in concluding the DSU."¹⁷⁵ In this specific case, the Panel acknowledged that having access to all of the information requested from the United States "would have facilitated [an] objective assessment of the facts"¹⁷⁶. We, therefore, deplore the conduct of the United States.

172. However, we note that the role of the Appellate Body, on this issue, is limited to determining whether the Panel has erred under Article 11 of the DSU. In that respect, we recall that, in Canada - Aircraft, the Appellate Body observed that:

… The drawing of inferences is, in other words, an inherent and unavoidable aspect of a panel's basic task of finding and characterizing the facts making up a dispute.¹⁷⁷ 
…
Clearly, in our view, the Panel had the legal authority and the discretion to draw inferences from the facts before it - including the fact that Canada had refused to provide information sought by the Panel.¹⁷⁸ (emphasis added)

173. We, therefore, characterized the drawing of inferences as a "discretionary" task falling within a panel's duties under Article 11 of the DSU. In Canada - Aircraft, which involved a similar factual situation, the panel did not draw any inferences "adverse" to Canada's position. On appeal, we held that there was no basis to find that the panel had improperly exercised its discretion since "the full ensemble of the facts on the record" supported the panel's conclusion.¹⁷⁹ 

174. In its appeal, the European Communities places considerable emphasis on the failure of the Panel to draw "adverse" inferences from the refusal of the United States to provide information requested by the Panel. As we emphasized in Canada - Aircraft, under Article 11 of the DSU, a panel must draw inferences on the basis of all of the facts of record relevant to the particular determination to be made.¹⁸⁰ Where a party refuses to provide information requested by a panel under Article 13.1 of the DSU, that refusal will be one of the relevant facts of record, and indeed an important fact, to be taken into account in determining the appropriate inference to be drawn. However, if a panel were to ignore or disregard other relevant facts, it would fail to make an "objective assessment" under Article 11 of the DSU. In this case, as the Panel observed, there were other facts of record that the Panel was required to include in its "objective assessment". Accordingly, we reject the European Communities' arguments to the extent that they suggest that the Panel erred in not drawing "adverse" inferences simply from the refusal of the United States to provide certain information requested from it by the Panel under Article 13.1 of the DSU.

175. In reviewing the inferences the Panel drew from the facts of record, our task on appeal is not to redo afresh the Panel's assessment of those facts, and decide for ourselves what inferences we would draw from them. Rather, we must determine whether the Panel improperly exercised its discretion, under Article 11, by failing to draw certain inferences from the facts before it. In asking us to conduct such a review, an appellant must indicate clearly the manner in which a panel has improperly exercised its discretion. Taking into account the full ensemble of the facts, the appellant should, at least: identify the facts on the record from which the Panel should have drawn inferences; indicate the factual or legal inferences that the panel should have drawn from those facts; and, finally, explain why the failure of the panel to exercise its discretion by drawing these inferences amounts to an error of law under Article 11 of the DSU.

176. In this appeal, the European Communities makes, what we regard to be, broad and general statements that the Panel erred by not drawing "adverse" inferences from the facts. Besides the fact that the United States refused to provide certain information requested by the Panel under Article 13.1 of the DSU, the European Communities does not identify, in any specific manner, which facts supported a particular inference. Nor does the European Communities identify what inferences the Panel should have drawn from those facts, other than that the inferences should have been favourable to the European Communities. Besides the simple refusal of the United States to provide information requested by the Panel, which we have already addressed,¹⁸¹ the European Communities does not offer any other specific reasons why the Panel's failure to exercise its discretion by drawing the inferences identified by the European Communities amounts to an error of law under Article 11 of the DSU. Therefore, we decline this ground of appeal.

132. Panel Report, paras. 8.4 and 8.5.

133. Ibid., para. 8.5.

134. European Communities' other appellant's submission, para. 25.

135. Ibid., para. 27.

136. Ibid., paras. 25 and 27.

137. Appellate Body Report, Korea – Dairy Safeguard, supra, footnote 29, para. 137.

138. Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones) ("European Communities – Hormones"), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135, at 183, para. 132.

139. Appellate Body Report, Korea – Taxes on Alcoholic Beverages ("Korea – Alcoholic Beverages"), WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, paras. 161 and 162.

140. Appellate Body Report, European Communities – Hormones, supra, footnote 138, at 183 – 188, paras. 131 – 142; Appellate Body Report, European Communities – Poultry, supra, footnote 119, paras. 131 –136; Appellate Body Report, Australia – Salmon, supra, footnote 119, paras. 262 – 267; Appellate Body Report, Korea – Alcoholic Beverages, supra, footnote 139, paras. 159 – 165; Appellate Body Report, Japan –Measures Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, paras. 140 – 142; Appellate Body Report, India – Quantitative Restrictions on Agricultural, Textile and Industrial Products, WT/DS90/AB/R, adopted 22 September 1999, paras. 149 and 151; and, Appellate Body Report, Korea – Dairy Safeguard, supra, footnote 29, paras. 137 and 138.

141. Panel Report, para. 8.43.

142. Ibid., para. 8.45.

143. Ibid.

144. Ibid., para. 8.44.

145. European Communities' other appellant's submission, para. 68.

146. See supra, paras. 150 and 151.

147. Panel Report, para. 8.45.

148. USITC Report, p. I-14.

149. Ibid., p. I-12.

150. Ibid.

151. Panel Report, para. 8.45.

152. Ibid.

153. Appellate Body Report, supra, footnote 22, para. 121.

154. Panel Report, para. 8.47.

155. USITC Report, p. I-13. Footnote 57, attached to this paragraph of the USITC Report, provides "Report at II-20, 19-21 (supporting information on these pages of the report is confidential business information)."

156. Panel Report, para. 8.61.

157. Ibid., paras. 8.61, 8.62 and 8.64.

158. Ibid., para. 8.66.

159. Ibid., para. 8.65.

160. In response to a question at the oral hearing the European Communities referred to the following sentence from the USITC Report: "Based on a careful review of the allocation methodologies used by domestic wheat gluten producers in responding to the Commission's questionnaire, we find those allocations to be appropriate" (USITC Report, p. I-13).

161. Panel Report, para. 8.66.

162. See the excerpt from the USITC Report, supra, para. 157.

163. Panel Report, para. 8.61.

164. In that respect, like the Panel, we note that the USITC could have described the nature of the "careful review" of the allocation methodologies used as the United States did in its "clarifications" – without disclosing confidential data provided by the producers (see Panel Report, para. 8.64).

165.  European Communities' other appellant's submission, para. 88.

166. Panel Report, para. 8.125.

167. Supra, Section IV, paras. 45 – 59.

168. The details of our reasoning are set forth, supra, para. 58.

169. Panel Report, para. 8.7.

170. Panel Report, para. 8.10.

171. Ibid., para. 8.12.

172. European Communities' other appellant's submission, para. 38.

173. Panel Report., para. 8.11.

174. Appellate Body Report, supra, footnote 32, para. 187.

175. Ibid., para. 189.

176. Panel Report, para. 8.12.

177. Appellate Body Report, supra, footnote 32, para. 198.

178. Ibid., para. 203.

179. Ibid., paras. 204 and 205.

180. Ibid.

181. Supra, para. 174.