WTO CASE REVIEW 20141 Raj Bhala, David A. Gantz, Shannon B. Keating, & Bruno Germain Simões*
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WTO CASE REVIEW 20141 Raj Bhala, David A. Gantz, Shannon B. Keating, & Bruno Germain Simões* 1 This WTO Case Review is the fifteenth in our annual series on substantive international trade adjudications issued by the Appellate Body of the World Trade Organization. Each Review explains and comments on Appellate Body reports adopted by the WTO Dispute Settlement Body during the preceding calendar year (January 1 through December 31), excluding decisions on compliance with recommendations contained in previously adopted reports. Our preceding Reviews are: • WTO Case Review 2013, 31 ARIZ. J. INT’L & COMP. L. 475-510 (2014). • 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. 1-101 (2001). We are grateful to the Editors and Staff of the Arizona Journal of International and 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, at www.wto.org/english/tratop_e/dispu_e/find_dispu_cases_e.htm. The texts of the WTO agreements we discuss also are available on the WTO web site, www.wto.org/english/docs_e/legal_e/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). * 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/Raj_Bhala. Tel: 785-864-9224. Fax: 785-864-5054. 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: INTERDISCIPLINARY THEORY AND PRACTICE (3d ed., 2008), reference DICTIONARY OF INTERNATIONAL TRADE LAW (3d ed., 2008) (4th ed. forthcoming), textbook UNDERSTANDING ISLAMIC LAW (SHARĪ’A) (2011), and treatise MODERN GATT LAW (2d ed., 2013). The discussion of the cases herein 498 Arizona Journal of International & Comparative Law Vol. 32, No. 2 2015 TABLE OF CONTENTS I. INTRODUCTION .................................................................................................. 500 II. DISCUSSION OF THE 2013 CASE LAW FROM THE APPELLATE BODY ............... 502 A. GATT Obligations: 2014 Fur Seals Case .................................................. 502 1. Citation ................................................................................................... 502 2. Facts ........................................................................................................ 502 a. Basic Regulation ................................................................................ 505 b. Implementing Regulation .................................................................. 506 3. Overview of Key Appellate Issues ......................................................... 509 4. Issue 1: TBT Agreement Violation? ....................................................... 511 5. Issue 2: GATT Article I:1 Violation? ..................................................... 516 a. What Is the Status of Greenland in the EU and WTO? ..................... 516 b. Immediacy and Unconditionality ...................................................... 517 c. Losing Argument on Non-Discrimination Obligations Under GATT Versus TBT Agreement .................................................................... 520 6. Issue 3: Exception Under GATT XX(a) Public Morality? ..................... 523 a. Principal Object of Seal Regime? ...................................................... 523 b. Animal Welfare as “Public Morality”? ............................................. 525 c. Identification of Risk to “Public Morality”? ..................................... 527 d. Step One of the Two-Step Test: Provisionally Justified as “Necessary to Protect Public Morals”—Contribution Analysis? ......................... 531 e. Step One of the Two-Step Test: Provisionally Justified as “Necessary to Protect Public Morals”—Weighing and Balancing of Factors? ... 537 f. Step Two of the Two-Step Test: Satisfies Chapeau? ......................... 541 7. Commentary ........................................................................................... 553 a. Too Long ........................................................................................... 553 nd will appear in modified form in the 2 edition of DICTIONARY OF INTERNATIONAL TRADE LAW and MODERN GATT LAW. David A. Gantz, Samuel M. Fegtly Professor of Law and Co-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. Cell Phone: 520-490-3004. Fax: 520-621-9140. Author, inter alia, of LIBERALIZING INTERNATIONAL TRADE AFTER DOHA: MULTILATERAL, PLURILATERAL, REGIONAL, AND UNILATERAL INITIATIVES (2014) and REGIONAL TRADE AGREEMENTS: LAW, POLICY AND PRACTICE (2009). Shannon B. Keating, Attorney, New Markets Lab, 1100 17th Street, N.W., Suite 1000, Washington, D.C., United States, www.newmarketslab.org. J.D., University of Kansas (2013); B.A., Austin College (2005). Member, Texas Bar. Bruno Germain Simões, Attorney, Fratini Vergano—European Lawyers, Brussels, Belgium. J.D., University of Kansas (2013); B.S.B., University of Kansas (2010). Staff Editor, Kansas Journal of Law & Public Policy. Member, Missouri Bar. WTO Case Review 2014 499 b. De Facto Stare Decisis Again and Mopping up a Spill over National Treatment .......................................................................................... 555 c. Process Versus Product ...................................................................... 559 B. WTO Accession Commitments and GATT Obligations: 2014 China Rare Earths Case ................................................................................................. 561 1. Citation ................................................................................................... 561 2. Background ............................................................................................ 561 3. Overview of Key Appellate Issues ......................................................... 563 4. Issue 1: Article XII:1 of the Marrakesh Agreement and Paragraph 1.2 of Chinese Accession Protocol ................................................................... 564 5. Issue 2: GATT Article XX(g) “Relating To” Conservation ................... 566 a. Interpretation of “Relating to” Conservation ..................................... 567 b. Application of “Relating To” Conservation Requirement ................ 568 6. Issue 3: GATT Article XX(g) “Made Effective in Conjunction With” Domestic Restrictions ............................................................................ 569 a. Interpretation of the Phrase “‘Made Effective in Conjunction with’ Domestic Restrictions” ..................................................................... 570 b. Application of “Made Effective in Conjunction with” Requirement 571 7. Commentary ........................................................................................... 572 a. National Security Implications .......................................................... 572 b. Economic Adjustment Through New Supply Sources ...................... 573 C. Trade Remedies—Antidumping and Countervailing Duties: 2014 China AD-CVD Case ............................................................................................ 575 1. Citation ................................................................................................... 575 2. Facts ........................................................................................................ 575 3. Overview of the Key Appellate Issue ..................................................... 576 4. Background for the Key Appellate Issue ................................................ 577 5. Holdings and Rationales ......................................................................... 579 a. Key claims under the GATT .............................................................. 579 i. Measures “Effecting an Advance in a Rate of Duty or Other Charge on Imports” ................................................................. 580 ii. Measures “Imposing a New or More Burdensome Requirement, Restriction or Prohibition