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WTO CASE REVIEW 20131 Raj Bhala, David A. Gantz, Shannon B. Keating & Bruno Germain Sim6es* This WTO Case Review Is the 14Th WTO Case Review 2013 Item Type Article; text Authors Bhala, Raj; Gantz, David A.; Keating, Shannon B.; Simoes, Bruno Germain Citation 31 Ariz. J. Int'l & Comp. L. 475 (2014) Publisher The University of Arizona James E. Rogers College of Law (Tucson, AZ) Journal Arizona Journal of International and Comparative Law Rights Copyright © The Author(s) Download date 01/10/2021 09:04:51 Item License http://rightsstatements.org/vocab/InC/1.0/ Version Final published version Link to Item http://hdl.handle.net/10150/658914 WTO CASE REVIEW 20131 Raj Bhala, David A. Gantz, Shannon B. Keating & Bruno Germain Sim6es* This WTO Case Review is the 14th in our annual series on substantive international trade adjudications issued by the Appellate Body of the World Trade Organization (WTO). Each Review explains and comments on Appellate Body reports adopted by the WTO Dispute Settlement Body during the preceding calendar year (January 1st through December 31st), excluding decisions on compliance with recommendations contained in previously adopted reports. Our preceding Reviews are: " WTO Case Review 2012, 30 ARIZ. J. INT'L & COMp. L. 207-419 (2013). " WTO Case Review 2011, 29 ARIZ. J. INT'L & COMp. L. 287-476 (2012). * WTO Case Review 2010, 28 ARIZ. J. INT'L & COMp. L. 239-360 (2011). * WTO Case Review 2009, 27 ARIZ. J. INT'L & COMp. L. 83-190 (2010). * WTO Case Review 2008, 26 ARIZ. J. INT'L & COMp. L. 113-228 (2009). * WTO Case Review 2007, 25 ARIZ. J. INT'L & COMp. L. 75-155 (2008). * WTO Case Review 2006, 24 ARIZ. J. INT'L & COMP. L. 299-387 (2007). * WTO Case Review 2005, 23 ARIZ. J. INT'L & COMp. L. 107-345 (2006). * WTO Case Review 2004, 22 ARIZ. J. INT'L & COMp. L. 99-249 (2005). " WTO Case Review 2003, 21 ARIZ. J. INT'L & COMp. L. 317-439 (2004). " WTO Case Review 2002, 20 ARIZ. J. INT'L & COMp. L. 143-289 (2003). " WTO Case Review 2001, 19 ARIZ. J. INT'L & COMp. L. 457-642 (2002). " WTO Case Review 2000, 18 ARIZ. J. INT'L & COMp. L. - 1 01 (2001). We are grateful to the Editors and Staff of the Arizona Journal of Internationaland Comparative Law for their excellent editorial assistance and continuing support of our work. The WTO reports we discuss are available on the web site of the WTO, www.wto.org/english/tratope/dispue/find dispucasese.htm. The texts of the WTO agreements we discuss also are available on the WTO web site, www.wto.org/english/docse/legale/legal e.htm, and are published in a variety of sources, including RAJ BHALA, INTERNATIONAL TRADE LAW: INTERDISCIPLINARY THEORY AND PRACTICE - DOCUMENTS SUPPLEMENT (3d ed. 2008). We endeavor to minimize footnotes and, toward that end, provide citations to indicate sources from which various portions of our discussion are drawn. * Raj Bhala, Associate Dean for International and Comparative Law, and Rice Distinguished Professor, The University of Kansas, School of Law, Green Hall, 1535 West 15th Street, Lawrence, KS 66045-7577, United States. www.law.ku.edu, http://en.wikipedia.org/wiki/RajBhala. Tel: 785-864-9224. Fax: 785-864-5054. Foreign Legal Consultant, Heenan Blaikie, L.L.P., Canada. J.D., Harvard (1989); M.Sc., Oxford (1986); M.Sc., London School of Economics (1985); A.B., Duke (1984). Marshall Scholar (1984-86). Member, Council on Foreign Relations, Royal Society for Asian Affairs, and Fellowship of Catholic Scholars, and Life Member, Indian Society of International Law. Author of the monograph TRADE, DEVELOPMENT, AND SOCIAL JUSTICE (2003), textbook INTERNATIONAL TRADE LAW: AN INTERDISCIPLINARY, NON-WESTERN TEXTBOOK (3d ed. 2008) (4th ed. forthcoming 2015) (two volumes), reference DICTIONARY OF INTERNATIONAL TRADE LAW (3d ed. 2008), textbook UNDERSTANDING ISLAMIC LAW (SHARI'A) (2011), and 476 Arizona Journal of International& ComparativeLaw Vol. 31, No. 2 2014 TABLE OF CONTENTS I. IN TRO D UCTIO N .................................................................................................. 4 77 II. DISCUSSION OF THE 2013 CASE LAW FROM THE APPELLATE BODY ................ 480 A. Trade Remedies - Subsidies and Countervailing Duties: 2013 Canada- Renewable Energy Case .................................................... 480 1. C itatio n ................................................................................................... 4 8 0 2 . F acts ....................................................................................................... 4 8 0 3. Three K ey A ppellate Issues .................................................................... 481 a. Relationship Between GATT Article 111:8(a) and TRIMs Agreement Article 2.2 ............................................................ 482 b. Application of GATT Article 111:8(a) to Facts .................................. 484 c. SCM Agreement Article 1 Definition of Subsidy and Benchmarks ............................................. 484 4. H oldings and Rationales ......................................................................... 486 a. Applicability of GATT Article 111:8(a) to Measures Relating to TRIMs Agreem ent Article 2.2 ............................................................ 486 b. Application of GATT Article 111:8(a) to the D isputed M easures .................................................................. 489 i. A rgum ents of the Parties ........................................................... 489 ii. Analysis of the Appellate Body ............................................... 491 c. Claim s Under SCM Agreement .......................................................... 497 i. Financial Contribution: Whether Disputed Measures are Government "Purchases [of] Goods" Under SCMAgreement A rticle 1.1 (a)(1)(iii) .................................................................. 497 ii. C onferral of B enefit ................................................................. 500 treatise MODERN GATT LAW (2d ed. 2013) (two volumes). The discussion of the case herein will appear in modified form in the new editions of DICTIONARY OF INTERNATIONAL TRADE LAW and MODERN GATT LAW. David A. Gantz, Samuel M. Fegtly Professor of Law and Director, International Trade Law Program, University of Arizona, James E. Rogers College of Law, 1201 East Speedway Boulevard, Tucson, AZ 85721, United States, www.law.arizona.edu. Affiliated Faculty, Department of Latin American Studies, University of Arizona. Associate Director, National Law Center for Inter-American Free Trade, http://natlaw.com. Cell Phone: 520- 490-3004. Fax: 520-621-9140. Author, inter alia, of LIBERALIZING INTERNATIONAL TRADE AFTER DOHA: MULTILATERAL, PLURILATERAL, REGIONAL, AND UNILATERAL INITIATIVES (2013) and REGIONAL TRADE AGREEMENTS: LAW, POLICY AND PRACTICE (2009). Shannon B. Keating, Legal Fellow, New Markets Lab, 1100 17th Street, N.W., Suite 1000, Washington, D.C., United States, [email protected]. www.newmarketslab.org. J.D., University of Kansas (2013); B.A., Austin College (2005). Member, Washington International Trade Association (WITA), Women's Bar Association of the District of Columbia, ABA Section of International Law. Admitted to practice, Texas. Bruno Germain Sim6es, Junior Attorney, FratiniVergano - European Lawyers, Brussels, Belgium. J.D., University of Kansas (2013); B.S.B., Supply Chain Management, University of Kansas (2010). WTO Case Review 2013 Ill. CONCLUSION AND COMMENTARY .................................................................. 508 A. Practicability of M arket Benchmark Test ................................................ 508 B . B roader Im plications ................................................................................ 509 I. INTRODUCTION Only one Appellate Body Report, Canada-Renewable Energy, was approved by the Dispute Settlement Body (DSB) in 2013, the fewest since 1995. As of the end of January 2014, no appeals had been lodged. However, this is the calm before the storm. During the end of 2013 and the first half of 2014, eight panel reports are to be circulated,3 of which five or six are likely to be appealed. Several other panel reports are likely to be circulated at indeterminate times during the second half of 2014.4 At least five other panel proceedings are ongoing, but are not likely to be completed in time to affect the Appellate Body's agenda during 2014.5 Thus, if the Appellate Body is able to do so, it will likely send 2 Appellate Body Reports, Canada-CertainMeasures Affecting the Renewable Energy Generation Sector, Canada-MeasuresRelating to the Feed-In Tariff Program, WT/DS412/AB/R, WT/DS426/AB/R (May 6, 2013) (adopted May 24, 2013) [hereinafter jointly referred to as Appellate Body Report, Canada-RenewableEnergy]. See Panel Reports, European Communities-Certain Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS369/R, WT/DS400/R, WT/DS40I/R (Feb. 14, 2011); Communication from the Chairperson of the Panel, China-Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum, WT/DS431/8, WT/DS432/8, WT/DS433/8 (Mar. 22, 2013); Communication from the Panel, United States-Measures Affecting Trade in Large Civil Aircraft (Second Complaint), WT/DS353/23 (Jan. 15, 2013); Communication from the Panel, United States- Countervailing Duty Measures on Certain Productsfrom China, WT/DS437/4 (Nov. 18, 2013); Communication from the Panel, China-Anti-Dumping and Countervailing Duties on Certain Automobiles from the United States, WT/DS440/4 (Sept. 25, 2013); Communication from the Panel, United States-CountervailingMeasures on Certain Hot- Rolled Carbon Steel Flat Products from India, WT/DS436/5 (July 8, 2013); Communication from the Panel,
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