World Trade
Organization
|
WT/DS152/R
22 December 1999
(99-5454)
Original: English |
UNITED STATES – SECTIONS 301-310 OF THE TRADE ACT OF 1974
Report of the Panel
(Continued) |
1. Introduction
5.229 Jamaica first states that its
Government has taken the decision to seek the third party status in this
case because, as a small developing country, it places great emphasis on the
rule of international law and the honouring of international treaty
obligations in accordance with the principle of "pacta sunt
servanda".
2. Legal Arguments
5.230 It is Jamaica's contention that by
maintaining recourse to unilateral action, under Sections 301-310 of
the Trade Act of 1974, the United States is acting in breach of its
obligations under the WTO Dispute Settlement Understanding, which
unequivocally commits Members not to resort to such actions.
5.231 Jamaica further argues that underpinning
this contention is the fact that the WTO DSU is fully consistent with agreed
rules on the principle of the peaceful settlement of Disputes between States
enshrined in Article 1(1) of the United Nations Charter and various
resolutions and declarations of the United Nations General Assembly.
5.232
Jamaica contends that the WTO Dispute Settlement mechanism is linked to the
historical effort to prevent resort to unilateral action which undermines
the credibility of the multilateral trading system.
As was observed by the Panel in United
States � Import Prohibition of Certain Shrimp and Shrimp Products, the
adoption of unilateral measures by Members could "threaten the security
and predictability of the multilateral trading system".
5.233
Jamaica points out that it is generally accepted that the WTO Dispute
Settlement System is the central pillar of the multilateral trading system
and the WTO's most individual contribution to the stability of the global
economy. However, the
confidence behind this derives from the Organization's ability to ensure
that Members will comply with the rules.
The integrity of the WTO would suffer a great deal if Members were
able to adopt unilateral actions in defiance of their obligations under the
WTO Agreement.
5.234
Jamaica also notes that it is accepted that the fundamental principle of
treaty law is "pacta sunt servanda"
whether based on customary law or the Vienna Convention on the Law of
Treaties, Article 26.
5.235
In the view of Jamaica, this fundamental concept has been given effect in
Articles 3.1, 21.5, 23.1, 23.2 of the WTO Dispute Settlement
Understanding in requiring Members to subject themselves to the rules agreed
thereto.
5.236
Jamaica also contends that Article XVI:4 of the Agreement Establishing
the WTO clearly requires domestic action to incorporate the entirety of WTO
obligations:
"Each Member shall ensure the
conformity of its laws, regulations and administrative procedures with its
obligations as provided in the Annexed Agreements". (emphasis added).
5.237
Jamaica further argues that the Dispute Settlement Understanding is an
integral part of the WTO Agreement, and Article III:3 of the latter
confers authority on the WTO to administer the DSU.
5.238
Jamaica points out that the United States actively participated in the
negotiation of the WTO Agreements and made a substantial contribution in the
drafting of the dispute settlement rules.
Further, the United States was party to the Marrakesh Declaration of
15 April 1994, in which the Ministers welcomed, inter
alia:
"the stronger and clearer legal
framework they have adopted for the conduct of international trade,
including a more effective and reliable dispute settlement
mechanism".
5.239
Jamaica concludes that as signatory to the Uruguay Round Agreements, the
United States and other Members of the WTO therefore undertook to resolve
disputes in accordance with the agreed multilateral rules enshrined in the
DSU.
5.240
Jamaica also considers that by virtue of Sections 102(a)(1) and 102(c) of
its Uruguay Round Agreements Act, the United
States has decreed that no provision in the WTO Agreement should
prevail over any law of the United States to the extent of inconsistency.
There is nothing in the Uruguay Round Agreements Act of the United
States which should be construed as limiting "any authority conferred
under any law of the United States, including section 301".
5.241
Jamaica points out that the effect of these Sections is that provisions in
the WTO Agreement which run contrary to the law of the United States are
declared to be void and to have no effect, ab
initio.
5.242 Jamaica states that it does not
dispute a Member's right to seek redress for breaches of contractual
obligations under the WTO Agreement. However, while actions under Section 301(a)
are subject to the final authority of the DSB, there resides a discretionary
right to take action under Section 301(b) the process of which is
outside the scrutiny of an external and impartial judicial authority. The
result of Section 301(b), therefore, is to provide the United States
with an alternate procedure through which to achieve a result favourable to
its own interests, which it feels that it could not probably get from the
DSB
5.243 Jamaica argues that while the
retention of a competing system for dispute settlement may not per se
be contrary to international law, the subsequent reliance on that rival
process as a substitute for an agreed multilateral mechanism for the
settlement of disputes could constitute a violation of treaty obligations.
Indeed, as was stated by the panel in United States � Taxes on
Petroleum and Certain Imported Substances,576 a Member would be in
violation of its WTO obligations, if it has enacted a law which mandates it
to take certain measures in the future which are not justified under the WTO
Agreement, even if those measures are not specifically applied. The
possibility of having an alternative mechanism for seeking redress under
Sections 301(a) and (b) undermines the integrity of the WTO dispute
settlement mechanism.
5.244 Jamaica further argues that it is also a
breach of good faith by the United States towards the other Members who have
brought their domestic legislation in line with commitments undertaken in
the WTO.
5.245 Jamaica points out that the single undertaking approach which was adopted
by Members during the Uruguay Round means that it is no longer possible for
Members to pick and chose which agreements they want to adhere to. As the
DSU is an integral part of the WTO Agreement, the United States is obliged
to respect all its provisions including Article 23 which commits
Members to refrain from making unilateral determinations as to whether or
not a Member has violated its obligations under the WTO Agreement.
5.246 According to Jamaica, the integrity of the
WTO is as strong as its membership's demonstrated commitment to its
principles. The Members provide their own checks and balances against the
actions of other Members who deviate from the agreed rules and obligations.
5.247 In the view of Jamaica, given the importance of the dispute settlement
system of the WTO as a central element in providing security and
predictability of market access conditions in the multilateral trading
system, the WTO cannot, through a recommendation nor a finding of this
Panel, condone the adoption of unilateral action by a Member State on the
basis of its domestic legislation. Should this occur, Members themselves
would be party to the undermining of the authority of the dispute settlement
mechanism. If Members are thereby encouraged to act unilaterally in the
settlement of trade disputes, there would be no incentive for continued
adherence to the agreed processes of the DSU.
5.248 Jamaica argues that the United States has
on many occasions reiterated its commitment to building and maintaining
confidence in the WTO. The United States Trade Representative to the WTO in
a recent statement in March 1999 reaffirmed that an open trading system
which is essential to global prosperity cannot be maintained unless there is
adherence to the rules. This will be difficult to achieve if Members of the
WTO are constantly confronted with domestic legislation of a Member which
authorizes it to impose unilateral sanctions in defiance of agreed
multilateral rules.
5.249 Jamaica then requests the Panel to find that unilateral actions taken by
the USTR in pursuance of Sections 301- 310 of the 1974 Trade Act are
contrary to the obligations of the United States under the WTO Agreement.
5.250
Jamaica also requests the Panel to recommend that the United States bring
its Trade Act of 1974 in conformity with its obligations under the WTO
Agreement.
5.251
In response to the Panel's question as to whether DSU Article 23.2
prohibits any determination on WTO consistency or any determination to the
effect that a violation has occurred, Jamaica states that in order to answer
this question on how Article 23(2)(a) is to be interpreted, one has
examine the context in which Article 23 (2)(a) applies.
5.252
Jamaica points out that the primary rule for interpretation of treaty
provisions, codified in the Vienna Convention on the Law of Treaties,
Article 31, requires that,
"a treaty shall be interpreted in
good faith in accordance with the ordinary meaning to be given to the
terms of the treaty in their context and in the light of its object and
purpose".
5.253
Jamaica argues that Article 23.2(a) should therefore be read in
conjunction with paragraph (1) of the same Article which puts the
entire Article in context. The
title of Article 23 is "Strengthening the Multilateral
System" and Article 1 sets the overall focus of the Article by
stating that,
"when Members seek the redress of a
violation of obligations or other nullification or impairment of benefits
under the covered agreement or an impediment to the attainment of any
objective of the covered agreements, they shall have recourse to, and
abide by, the rules and procedures of this Understanding".
(emphasis added)
5.254
Jamaica goes on to state that the obligation on Members to utilise the DSU
provisions is emphasised in the sub-sections of paragraphs 2(a), (b) and (c)
which spell out the steps to be undertaken by
Members "in such cases",
that is, in cases where Members seek redress for breaches of
obligations.
5.255
In the view of Jamaica, Article 23(2)(a) states that Members shall
"not make a determination ... except through recourse to dispute
settlement in accordance with the rules and procedures of this
Understanding�" and the
determinations relate not only to the occurrence of violations, but also to
benefits which have been nullified or impaired or impediments to the
attainment of any objective of the covered agreements.
5.256
Jamaica is of the view that Article 23 does not prohibit the making of
a determination per se that a
violation has occurred, or benefits have been nullified etc., as certainly,
a Member which has brought a dispute to the DSB must have made a
"determination" of some degree that
another Member's practices/policies are WTO inconsistent, hence
seeking the DSB's opinion of this preliminary "determination".
5.257
Jamaica contends that the prohibition which is the focus of Article 23(2)(a)
, and in effect the entire Article 23, however, relates to
determinations executed in the context of seeking redress for breached
obligations. Such a
"determination" by a Member would be akin to a finding or
recommendation by the DSB, on the WTO consistency of a matter, as this
"determination" would, of necessity, give rise to redress by the
affected party. This exercise
would amount to usurping the rights of the DSB to make such decisions.
Only the DSB has the right to make determinations affecting the
rights and obligations of Members.
5.258
Jamaica further argues that paragraph (a) of Article 23(a) supplements
its prohibition on determinations outside of the DSB by concluding that,
"[any] such determinations shall be
made consistent with the findings contained in the panel or Appellate Body
reports adopted by the DSB �".
5.259
Jamaica, in response to the Panel's question as to whether an official US
statement binding in international law that the US government will not
exercise its discretion in a way contrary to WTO rule remove the WTO
inconsistency of Sections 301-10 on the assumption that the USTR and
the President have the discretion to avoid determinations and actions
contrary to WTO rules in all circumstances, and that, nevertheless, Sections 301-310
were found inconsistent with WTO rules, states that the United States is a
signatory to the Final Act embodying the results of the Uruguay Round of
Multilateral Trade negotiations, which includes the Marrakesh Agreement and
the Understanding on Rules and Procedures governing the Settlement of
Disputes.
5.260
Jamaica draws the Panel's attention to the text of Article XVI:4 of the
Marrakesh Agreement and Article 23 of the DSU.
5.261
Jamaica contends that having signed onto this legally binding multilateral
instrument, the United States thereby solemnly undertook to abide by its
rules including, the rules and procedures of the DSU. However, this legally binding
undertaking did not prevent the United States from acting contrary to its
obligations, which has infringed the rights of other Members.
5.262
Jamaica is of the view that a statement made by a government which
contradicts legislation is not a sound basis on which to conduct
international treaty relations. The US statement does not therefore
constitute and effective restraint on its discretionary action contrary to
the obligation which should be enshrined in law.
5.263 Jamaica is of the view that the
discretionary latitude given to the US President and the USTR, under
Sections 301 and 302, whether exercised or not, leaves the way open for
the exercise of that discretion.
5.264 Jamaica states that it can find no
justifiable grounds on which the United States holds itself to be exempt
from complying with the rules of the WTO. In fact, should the United States
be permitted to retain inconsistent domestic legislation, this will pave the
way for the "exception to become the rule" as more WTO Members may
be inclined to retain non-conforming legislation while conveniently making
unilateral undertakings of compliance.
5.265 Jamaica recalls the decision of the panel in
United States - Taxes on Petroleum and Certain Imported Substances,
577 where it was held that a Member would be in violation of its WTO
obligations, if it has enacted a law which obliges it to take certain
measures in the future which are not justified under the WTO Agreement, even
if those measures are not specifically applied. Thus, the very fact that the
United States legislation requires the President to take certain actions
upon the fulfilment of certain requirements, it could be said by way of
analogy, that this law violates the letter and spirit of the WTO Agreement.
5.266 Accordingly, Jamaica urges the Panel to
insist on full compliance with the established rules of the WTO, and thus to
rule that, Sections 301-310 be amended accordingly to bring the United
States into compliance with the undertaking it made in 1994. Jamaica is
confident hat the full Membership will accept no less than a complete
revision of the offending domestic law of the United States which is the
subject of this dispute..
1. Introduction
5.267 Japan points out that as this case
presents the extremely important issue of unilateral determination within
the scope of the WTO dispute settlement, it has some substantial systemic
interest in the matter. The findings of the Panel will be of acute
importance, and it sincerely hopes that the Panel will thoughtfully consider
the matter at hand.
2. Legal Arguments
5.268 Japan is of the view that the renunciation
of unilateral trade measures in the WTO Dispute Settlement is one of the
most important rules of the WTO. WTO Members are prohibited from
unilaterally suspending concessions or other obligations under the WTO
Agreement. Moreover, Article 23 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes clearly requires WTO Members
to follow the rules and procedures under the DSU and stipulates that they
shall not make a determination such that measures taken by another Member
violate the provisions of the WTO Agreement, except through recourse to the
dispute settlement in accordance with the rules and procedures of the DSU.
5.269 Japan notes that at the entry into force of
the WTO Agreement, the United States announced that it had amended its Trade
Act of 1974 in order to respect the procedures in accordance with the
enhanced Dispute Settlement system. The amendment, however, has proved to be
insufficient. The United States claims that the Trade Act of 1974 can be
implemented in compliance with the WTO Agreement by utilising the discretion
provided for therein through the USTR when determining whether or not there
is violation of WTO Agreement by another Member and what further actions are
to be taken and when implementing the determined actions, as well as through
the specific direction of the President. Nonetheless, it is doubtful whether
the Trade Act of 1974 is truly discretionary. For instance, despite the
United States describing that the USTR is free to make a negative
determination and then to reinitiate a second investigation in order to make
a definitive determination of a violation to the WTO Agreement upon DSB
adoption of panel and Appellate Body findings, such discretion does not
appear to be explicit from the provisions of the Trade Act of 1974. On the
contrary, the Trade Act of 1974 is considered to oblige the United States to
determine whether another Member denies the rights or benefits of the United
States under the WTO Agreement without following the necessary procedures
under the Dispute Settlement Mechanism and, in that case, is inconsistent
with Article 23 of the DSU.
5.270 Japan contends that even assuming that the
United States can implement the Trade Act of 1974 in compliance with the WTO
Agreement with broad discretion, it is very unlikely that such discretion is
exercised consistently with the WTO Agreement.
5.271 Japan considers that the facts indeed show
that the United States has repeatedly made determinations that actions,
policies or practices of another WTO Member were inconsistent with the WTO
Agreement, or unreasonable, and has determined further actions, including a
suspension of concessions or other obligations under the WTO Agreement,
without abiding by the Dispute Settlement procedures.
5.272
In Japan's view, the following cases demonstrate that the United States has
used to its advantage unilateral measures under the Trade Act of 1974 as an
instrument for settling trade disputes against Japan.
5.273
Japan explains that in October 1994, the United States initiated an
investigation on Japan's market regarding the replacement auto parts and
automotive accessories under the Trade Act of 1974. In May 1995, it
determined that the acts, policies and practices of the Government of Japan
were unreasonable and burdensome and that they restricted commerce in the
United States. Subsequently, it announced the implementation of sanctions
under which the imports of Japanese luxury cars would be subject to duties
of 100% ad valorem. Following this
announcement, the US Customs Service withheld the liquidation of the entry
of vehicles on the sanction list, and the exports of those vehicles from
Japan was actually halted. Japan requested consultations under Article XXII
of the GATT against such unilateral action taken by the United States. This
matter was finally settled through political means conducted independently
from the Dispute Settlement process. However, this incidence was a clear
example that the United States acted in violation of its obligations under
the DSU in favour of the procedures under the Trade Act of 1974.
5.274
Japan emphasizes that it does not claim that the initiation of investigation
under Section 302 constitutes a violation of the WTO Agreement. Japan,
however, considers that the announcement of affirmative
"determination" and the announcement of a list of products that
could be subject to increased tariffs, which were made on May 16, 1995, are
inconsistent with the obligations of the Government of the United States
under Article 23 of the DSU.
5.275
Japan argues that based on the past experience, despite the US claim that
the Trade Act of 1974 can be implemented consistently with the WTO Agreement
through the broad discretion given to the USTR and the specific instruction
of the President, the Trade Act of 1974 has the following major problems in
relation to the WTO Agreement.
5.276
Japan further contends that the language of Section 304(a)(2) of the
Trade Act of 1974 mandatorily requires the USTR to determine whether the
rights of the United States under the WTO are being denied or whether any
act, policy or practice of another WTO Member violates or is inconsistent
with the WTO, or is unjustifiable, within 18 months after initiation of the
investigation of a case. In
accordance with the DSU, the Dispute Settlement process normally requires a
period of 18.5 months and, as a matter of fact, there have been several
cases that have taken longer. This
clearly demonstrates that, at least in cases in which the necessary
procedures are not completed within the 18 months provided for, the USTR is
obligated to act under Section 304(a) 2 in conflict with the DSU.
It must also be noted that the discretion mentioned therein is not
explicit enough with regard to the given provisions of the Trade Act of
1974. Section 304(a)(2) can, therefore, be considered as
obliging the USTR to determine, prior to the adoption of the panel or
Appellate Body report, whether another Member denies rights or benefits
under the WTO Agreement and, thereby, is inconsistent with Article 23
of the DSU. Even assuming that
the United States can implement the Trade Act of 1974 in compliance with the
WTO Agreement with broad discretion, there is no guarantee that such
discretion is exercised consistently with the WTO Agreement.
5.277
Japan also alleges that Section 306(b)(2) of the Trade Act of 1974
requires the USTR to determine what further action to take within 30 days
after completion of the reasonable period of time, if the USTR determines
that a recommendation of the Dispute Settlement Body has not been
implemented. According to the DSU, where there is disagreement as to the
existence or consistency of the measures taken to comply with the
recommendations and rulings, such dispute shall be settled through the
dispute settlement procedures under Article 21.5 of the DSU. Japan is
of the view that if it is assumed that the drafter of the DSU supposed the
dispute settlement procedures under Article 21.5 of the DSU to be
completed before the date of expiry of the reasonable period of time, the
relationship between Article 21 and Article 22 of the DSU would be
well explained. It could also ensure the WTO consistency of Section 306(b).
However, there is no consensus on such interpretation on Article 21.5
and it is generally understood that the dispute over the existence of
implementation of the recommendation shall be referred to the procedure
under Article 21.5 after the expiry date of reasonable period of time.
Article 21 provides that the panel shall circulate its report within 90
days after the date of referral of the matter to it. Therefore, it is
normally difficult to complete the necessary procedures under Article 21.5.
Under Section 306(b)(2), the USTR is more than likely to determine that
a recommendation of the DSB has not been implemented, as well as to
determine further action, including a suspension of concessions or another
obligation, to be taken prior to the completion of the necessary procedures
under Article 21.5 and such determination is inconsistent with Article 23
of the DSU.
5.278
Japan adds that when the dispute over the existence or consistency with a
covered agreement is referred to the procedure under Article 21.5 after
the expiry date of the reasonable period of time, the panel shall circulate
its report within 90 days after the date of referral of the matter to it.
5.279
In Japan's view, notwithstanding such a period of 90 days defined in this
Article, Section 306(b)(2) requires the determination to be made only
within 30 days after the expiration of the reasonable period of time. When
the panel determination under Article 21.5 is made on a date beyond the
deadline which Section 306(b)(2) requires, the USTR is more than likely
to make a determination that a recommendation of the DSB has not been
implemented, as well as make a determination on further actions including
suspension of concessions pursuant to Section 306(b)(2), prior to the
completion of the procedures under Article 21.5 of the DSU.
5.280
Japan notes that in the EC � Banana
III case, it was not until 19 April 1999, the date on which the DSB
authorized the suspension of the concession based on the decision of the
arbitrators, that the multilateral determination was made as to the
consistency/ inconsistency of the measures taken by the European Communities
in response to the recommendations and rulings of the panel and the
Appellate Body. In defiance of the WTO rules for determination of
compliance, the United States made a decision on 3 March 1999, to the effect
of taking customs actions in the form of withholding of liquidation as well
as imposition of a contingent liability for 100% duties. In its press
release, it was stated that "we must conclude that it is time for the
European Communities to bear some of the consequences for its complete
disregard for its GATT and WTO obligations". The said press release is attached herewith.
5.281
Japan further argues that Sections 306(b) and 305(a) of the Trade Act
of 1974 require the USTR to implement further action within 30 days of the
date of determination of such further action (i.e. within 60 days after the
expiry date of the reasonable period of time). Even if it is assumed that
the procedures under Article 21.5 of the DSU are supposed to be
completed before the expiry of the reasonable period of time, and if the
suspension of concessions or other obligation is referred to arbitration
according to Article 22.6 of the DSU and if the arbitration requires
the maximum period of 60 days, it will not be possible to meet the deadline
stipulated under the relevant Sections of the Trade Act of 1974, unless a
DSB meeting is requested 10 days before the arbitration is awarded. This
will be against the current practice, which has also been accepted by the
United States. Thus, it is normally difficult to complete the necessary
procedures until obtaining authorization from the DSB. When Sections 306(b)
and 305(a) require the USTR to implement a suspension of concessions and
other obligations as further action prior to the DSB authorization, such
suspension is inconsistent with the basic provisions of the GATT (Articles I,
II, III, VIII and XI) and GATS (Articles II, XVI, XVII, XVIII),
depending on respective measures.
5.282
Japan also asserts that Sections 304(a) and 305(a) require the USTR to
determine whether an act, policy or practice of a foreign country is
unreasonable even when it does not deny the US rights on the WTO Agreement
or is not inconsistent with the WTO Agreement. They also require the USTR to
determine what further actions to be taken and then to implement them
without following the dispute settlement procedure under the WTO Agreement.
Even in such cases where the USTR determines that the act, policy or
practice of a foreign country does not deny the US rights under the WTO
Agreement but that it is unreasonable, simply implementing further actions
which are not consistent with the WTO Agreement including suspensions of
concessions or other obligations is inconsistent with the basic provisions
of the GATT (Articles I, II, III, VIII and XI) and the GATS (Articles II,
XVI, XVII and XVIII), depending on the respective measures.
5.283
Japan concludes that in the above considerations, the Trade Act of 1974 is
considered to oblige the United States to act inconsistently with its
obligations under the WTO Agreement. Even assuming that the United States
can implement the Trade Act of 1974 in compliance with the WTO Agreement
with broad discretion, it is very unlikely that such discretion is exercised
in consistence with the WTO Agreement. It also seriously damages the Dispute
Settlement Mechanism within the framework of the WTO. Therefore, the United
States should amend its Trade Act of 1974 to ensure that it fully complies
with its obligations under the DSU.
5.284
Japan also states that on the basis of the above points, whereby the United
States unilaterally applies its own rules and regulations by way of the
Trade Act of 1974, such action can seriously damage the Dispute Settlement
Mechanism within the framework of the WTO. Although the United States claims
that the Trade Act of 1974 can be implemented in compliance with the WTO
Agreement by utilising discretion, the degree of such discretion contained
in the provisions of the Trade Act of 1974 is far from being explicit.
Any such ambiguity is also against the spirit of GATT Article X. In conclusion, Japan strongly requests the Panel to request
the United States to amend its Trade Act of 1974 in order to ensure its full
compliance with its obligations under the DSU.
5.285
Lastly, Japan expresses its concern on the US reinstitution of the Super 301
from March of this year. Under the Super 301, the United States regularly
identifies foreign actions, policies and practices as a priority foreign
country practice, which would lead the United States to initiate a Section 301
investigation, thus promoting the mechanism under Section 301 of the
Trade Act of 1974, thereby leading to unilateral measures. This indicates
that the United States has not changed its attitude towards its trading
partners, including Japan, to conduct trade disputes to its advantage
through the threat of using unilateral trade measures. Japan is greatly
concerned that such US policy will seriously damage the WTO framework.
5.286
In response to the Panel's question as to whether DSU Article 23.2
prohibits any determination on WTO consistency or any determination to the
effect that a violation has occurred, Japan states that Article 23.2(a)
of the DSU should be interpreted in good faith in accordance with the
ordinary meaning to be given to the terms that it prohibits Members to
determine to the effect that a violation has occurred.
5.287
Japan, in response to the Panel's question as to whether an official US
statement binding in international law that the US government will not
exercise its discretion in a way contrary to WTO rule removes the WTO
inconsistency of Sections 301-10 on the assumption that the USTR and
the President have the discretion to avoid determinations and actions
contrary to WTO rules in all circumstances, and that, nevertheless, Sections 301-310
were found inconsistent with WTO rules, states that
the assumption provided in this question entails a contradiction. That is,
generally speaking, laws are not inconsistent with WTO rules when such
discretion as is described above is given to administrators under the laws.
Moreover, it is not clear how an official statement could be "binding
in international law". An "official statement" alone cannot
remove the WTO inconsistency from the WTO inconsistent law. In order to
remove the inconsistency in law, such removal must be enacted with a legal
instrument which is binding in law. Furthermore, it is highly unlikely that
a government would announce that it will not exercise its discretion under
the WTO inconsistent law in accordance with WTO rules, which would mean that
the government would always deviate from the law.
5.288 In response to the US question as to the
consistency of the third parties' domestic legal system to proceed with the
dispute settlement under the WTO Agreement, Japan explains that Article 98.2
of the Constitution of Japan stipulates that the treaties concluded by Japan
and established laws of nations shall be faithfully observed. When
requesting for consultations or establishment of panels, the Government of
Japan presents its view that another Member's measure concerned is
inconsistent with its WTO obligations. Such a view, however, does not
constitute a determination in the specific sense under Article 23 of
the DSU, and the Government of Japan strictly follows the dispute settlement
procedures under the DSU and does not unilaterally make a determination and
take actions without observing the rules of the DSU.
TO CONTINUE WITH UNITED STATES – SECTIONS 301-310 OF THE TRADE ACT OF 1974
576 Panel Report on US – Superfund, op. cit.
577
Panel Report on US – Superfund, op. cit.
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