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UNITED STATES - DEFINITIVE
SAFEGUARD MEASURES Report of the Appellate Body (continued) 177. Before the Panel, the European Communities made a claim under Article XIX:1(a) of the GATT 1994 regarding "unforeseen developments", and also a claim under Article I of the GATT 1994 and Article 5 of the Agreement on Safeguards regarding the nature of the remedy. In a single paragraph covering these two claims, the Panel stated:
178. The European Communities appeals the Panel's findings on judicial economy. The European Communities asserts that the failure to make a finding regarding the claim on "unforeseen developments" means that there is a flaw in the Panel's findings, under Articles 2.1 and 4.2 of the Agreement on Safeguards, concerning increased imports and serious injury. The European Communities also argues that, by failing to address the European Communities' claims under Article I of the GATT 1994 and Article 5 of the Agreement on Safeguards, "the Panel has not clarified whether the US could simply repeat the serious injury determination and then still proceed to apply the measure in the same way."183 179. We begin by recalling certain of the statements that the Appellate Body has already made regarding the exercise of judicial economy by panels. In United States – Shirts and Blouses, we opined:
180. However, the "discretion" that a panel enjoys to determine which claims it should address is not without limits.185 In Australia – Salmon, we stated that a "panel has to address those claims on which a finding is necessary in order to enable the DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance by a Member with those recommendations and rulings …".186 181. In Argentina – Footwear Safeguards, we were asked to address a claim on "unforeseen developments" that the panel had not examined. In that appeal, we upheld the panel's finding that Argentina's investigation "was inconsistent with the requirements of Articles 2 and 4 of the Agreement on Safeguards." We went on to state:
182. In short, we considered that since the safeguard measure at issue was inconsistent with Articles 2 and 4 of the Agreement on Safeguards, there was no need to go further and examine whether, in addition, the measure was also inconsistent with Article XIX:1(a) of the GATT 1994. The inconsistency, as we said, deprived the measure of legal basis. 183. In our view, the same reasoning applies in this case. The Panel found and we have upheld, albeit for different reasons, that the measure is inconsistent with Articles 2.1 and 4.2 of the Agreement on Safeguards. Thus, the Panel found, in effect, that the safeguard measure at issue in this case, like the measure at issue in Argentina – Footwear Safeguard, has no legal basis. The reasons for which the Panel found an inconsistency with Articles 2.1 and 4.2 of the Agreement on Safeguards do not alter that conclusion. The Panel was, therefore, entitled to decline to examine the claim of the European Communities regarding "unforeseen developments". A finding on that issue would not, in our view, have added anything to the ability of the DSB to make sufficiently precise recommendations and rulings in this dispute. We, therefore, see no error in the Panel's exercise of judicial economy as regards the European Communities claim concerning "unforeseen developments". 184. The same reasoning also holds true for the European Communities' claim under Article I of the GATT 1994 and Article 5 of the Agreement on Safeguards. As the Panel had found the measure to be inconsistent with Articles 2.1 and 4.2 of the Agreement on Safeguards, the Panel was within its discretion in declining to examine these claims. Once again, a finding on this claim would not have added anything to the ability of the DSB to make sufficiently precise recommendations and rulings in this dispute. 185. Finally, the European Communities asserts that, by failing to address these claims, "the Panel has not clarified whether the US could simply repeat the serious injury determination and then still proceed to apply the measure in the same way."188 It appears, to us, that this argument invites speculation as to how the United States might implement the recommendations and rulings of the DSB. As we said in our Report in United States – Tax Treatment for "Foreign Sales Corporations", "we do not consider that it is appropriate for us to speculate on the ways in which the United States might choose to implement" the recommendations and rulings of the DSB.189 We, therefore, see no error in the Panel's exercise of judicial economy as regards the European Communities claim concerning Article I of the GATT 1994 and Article 5 of the Agreement on Safeguards. 186. For these reasons, we see no error in the Panel's exercise of judicial economy in paragraph 8.220 of the Panel Report. 187. For the reasons set out in this Report, the Appellate Body:
188. The Appellate Body recommends that the DSB request that the United States
bring its safeguard measure found in this Report, and in the Panel Report as
modified by this Report, to be inconsistent with the Agreement on Safeguards,
into conformity with its obligations under that Agreement. _________________________
182. Panel Report, para. 8.220. 183. European Communities' other appellant's submission, para. 108. 184. Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, DSR 1997:I, 323, at 340. 185. Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9, at 35, para. 87. 186. Appellate Body Report, Australia – Salmon, supra, footnote 119, para. 223. 187. Appellate Body Report, supra, footnote 22, para. 98. 188. European Communities' other appellant's submission, para. 108. 189. Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations", WT/DS108/AB/R, adopted 20 March 2000, para. 175. |
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