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Turkey– Additional Duties on Certain Products from the United States

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Turkey– Additional Duties on Certain Products from the United States TURKEY– ADDITIONAL DUTIES ON CERTAIN PRODUCTS FROM THE UNITED STATES (DS561) U.S. Responses to Questions from the Panel to the Parties After the First Substantive Meeting January 30, 2020 TABLE OF REPORTS AND AWARDS Short Form Full Citation China – Raw Materials Appellate Body Reports, China – Measures Related to the (AB) Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012 Dominican Republic – Panel Report, Dominican Republic – Safeguard Measures on Safeguard Measures Imports of Polypropylene Bags and Tubular Fabric, WT/DS415/R, (Panel) WT/DS416/R, WT/DS417/R, WT/DS418/R, and Add.1, adopted 22 February 2012 EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti- (AB) Dumping Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R, adopted 28 July 2011 EC – Selected Customs Appellate Body Report, European Communities – Selected Matters (AB) Customs Matters, WT/DS315/AB/R, adopted 11 December 2006 Indonesia – Iron or Appellate Body Reports, Indonesia – Safeguard on Certain Iron or Steel Products (AB) Steel Product, WT/DS490/AB/R, WT/DS496/AB/R, and Add. 1, adopted 27 August 2018 Indonesia – Iron or Panel Report, Indonesia – Safeguard on Certain Iron or Steel Steel Products (Panel) Product, WT/DS490/R, WT/DS496/R, and Add. 1, adopted 27 August 2018 US – Countervailing Appellate Body Report, United States – Countervailing Duty Measures (China) (AB) Measures on Certain Products from China, WT/DS437/AB/R, adopted 16 January 2015 US – Wool Shirts and Appellate Body Report, United States – Measure Affecting Imports Blouses (AB) of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr. 1 Turkey – Additional Duties on Certain Products From the U.S. Responses to Questions United States (DS561) After the First Substantive Meeting January 30, 2020 – Page ii TABLE OF EXHIBITS Exhibit No. Description USA-10 Section 232 statute, 19 U.S.C 1862 USA-11 Section 201 statute, 19 U.S.C §2251 USA-12 Presidential Proclamation 9694 of January 23, 2018, To Facilitate Positive Adjustment to Competition From Imports of Large Residential Washers, (excerpted), 83 Fed. Reg. 3,553 (January 23,2018) USA-13 The New Shorter Oxford English Dictionary, 4th edn, L. Brown (ed.) (Clarendon Press, 1993) (excerpts) USA-14 Black’s Law Dictionary, 10th edn, B. Garner (ed.) (Thomson Reuters, 2014) USA-15 The New Shorter Oxford English Dictionary, 4th edn, L. Brown (ed.) (Clarendon Press, 1993) (excerpts) 1 TERMS OF REFERENCE 1. In paragraph 36 of its third-party submission, China argues that [I]f a complainant purposely ignored the clear legal basis under the WTO legal framework of a measure at issue by not including a claim based on such provisions in its panel request, it runs the risk of not conveying the "legal basis of the complaint sufficient to present the problem clearly" as required by Article 6.2 of the DSU, and not notifying the respondent "the nature of its case". This is true when the legal basis of the measure at issue is positive obligations under the WTO legal framework, not 'exceptions'". Similarly, in paragraphs 52 and 53 of its third-party submission, Russia argues that: The United States was aware but still disregarded Article 8.2 of the Safeguards Agreement by including in its Panel Request only claims under Articles I and II of the GATT 1994. Their isolated consideration by the Panel would be deficient for the purposes of satisfactory resolution of the matter. The United States alludes to the issues arising out of the Safeguards Agreement in Part VI of its FWS by merely saying that it would not apply, whereby, also given the respective defect in the Panel Request, it did not articulate a clear claim or argument under Article 8.2 of the Safeguards Agreement. By doing so, the United States thwarts the effective resolution of the present dispute by misguiding the Panel as to the relevant legal and factual background of the dispute. Hence, the United States failed to "provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly" under Article 6.2 of the DSU because its Panel Request did not include the claims on the alleged inconsistency of Turkey's measures with the Safeguards Agreement. Thus, the Panel should dismiss all of the United States' claims as it failed to present the problem clearly. Please comment. Response: 1. The arguments presented by China and Russia are meritless because the U.S. panel request meets the requirements of Article 6.2 of the DSU1 by presenting the problem clearly. Article 6.2 of the DSU sets forth the content of a request for the establishment of a panel in order to bring a “matter” (in the terms of Article 7.1) within the Panel’s terms of reference. China and Russia are pointing to additional claims that, in their view, the United States could have presented. But this would not make the U.S. panel request deficient in content under DSU Article 6.2; it would (if China and Russia were correct) lead the Panel to conclude the U.S. 1 Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”). Turkey – Additional Duties on Certain Products From the U.S. Responses to Questions United States (DS561) After the First Substantive Meeting January 30, 2020 – Page 2 claims in the panel request are not substantively made out, and the Panel cannot make a finding of breach under any other provision not included in the U.S. panel request. 2. In relevant part, Article 6.2 provides that a request to establish a panel: shall indicate whether consultations were held, identify the specific measure at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. 3. To provide the brief summary required by Article 6.2, it is sufficient for a complaining Member in its panel request to specify the legal claims under the WTO provisions that it considers are breached by the identified measures. 4. In this dispute, the U.S. panel request identified the legal instrument through which Turkey imposes the additional duties. The U.S. panel request then explained why the United States considers that Turkey’s additional duties are inconsistent with Turkey’s WTO obligations: Article I:I of the GATT 1994, because Turkey fails to extend to products of the United States an advantage, favor, privilege, or immunity granted by Turkey with respect to customs duties and charges of any kind imposed or in connection with the importation of products originating in the territory of other Members; Article II:1(a) of the GATT 1994, because Turkey accords less favorable treatment to products originating in the United States than that provided in Turkey’s schedule of concessions; and Article II:1(b) of the GATT 1994, because Turkey imposes duties or charges in excess of those set forth in Russia’s schedule.2 Thus, the U.S. panel request sets out that the United States considers that Turkey’s additional duties measures are inconsistent with Turkey’s WTO obligations under Articles I and II of the GATT 1994. Accordingly, the U.S. panel request provides a brief summary of the legal basis of the complaint sufficient to present the problem clearly. 5. China and Russia, therefore, are incorrect in arguing that the U.S. panel request does not meet the requirements of Article 6.2 of the DSU. In addition to specifying the legal claims – and thereby meeting the requirement of Article 6.2 – the U.S. panel request explains why the United States considers the challenged measures to be inconsistent with Turkey’s WTO obligations. 6. At this point, we think it is important to pause and note that in one report, the Appellate Body apparently departed from the text of Article 6.2. Specifically, in that one report, the Appellate Body stated the view that Article 6.2 requires a panel request to explain “how or why the measure at issue is considered by the complaining Member to be violating the WTO 2 See WT/DS561/2. Turkey – Additional Duties on Certain Products From the U.S. Responses to Questions United States (DS561) After the First Substantive Meeting January 30, 2020 – Page 3 obligation in question.”3 This was either loose drafting, or plain legal error. As the United States explained4 before the Dispute Settlement Body on October 28, 2019, the Appellate Body’s incorrect interpretation has made disputes more complicated by encouraging procedural challenges, such as the preliminary ruling requests by China in DS558 and Russia in DS566. 7. Despite the straightforward application of Article 6.2 to the U.S. panel request, China and Russia put forth the flawed argument that the United States did not comply with Article 6.2 of the DSU because the United States did not cite to a WTO Agreement that the U.S. considers has no relevance in this dispute. China and Russia are merely pointing to additional claims that, in their view, the United States could have presented. But that is not the legal standard under Article 6.2. 8. Furthermore, Article 6.2 does not require that a panel request anticipate legal arguments raised by the responding party. Rather, in Appendix 3, paragraph 4, the DSU reflects that “[b]efore the first substantive meeting of the panel with the parties, the parties to the dispute shall transmit to the panel written submissions in which they present the facts of the case and their arguments.” 9.
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