Key Issues in WTO Dispute Settlement: the First Ten Years Edited by Refus Yerxa and Bruce Wilson Frontmatter More Information

Cambridge University Press 0521861594 - Key Issues in WTO Dispute Settlement: The First Ten Years Edited by Refus Yerxa and Bruce Wilson Frontmatter More information

KEY ISSUES IN WTO DISPUTE SETTLEMENT The ﬁrst ten years

This book examines aspects of the operation of the WTO dispute settlement system during the ﬁrst ten years of the WTO. It covers a representative cross-section of the issues and situations WTO Members have dealt with under the Dispute Settlement Understanding. The book is unique in that it includes contributions from virtually the entire gamut of actors involved in the day-to-day operation of the WTO dispute settlement system: Mem- ber government representatives, private lawyers who litigate on behalf of Member governments in the system, Appellate Body members, Appellate Body Secretariat staff, and WTO Secretariat staff. It also includes contributions from several academics who closely follow and carefully scrutinize all that goes on within the system. It therefore provides fascinating insights into how the system has operated in practice, and how the lessons of the ﬁrst decade can be applied to make the system even more successful in the years to come.

© Cambridge University Press www.cambridge.org Cambridge University Press 0521861594 - Key Issues in WTO Dispute Settlement: The First Ten Years Edited by Refus Yerxa and Bruce Wilson Frontmatter More information

KEY ISSUES IN WTO DISPUTE SETTLEMENT

The ﬁrst ten years

Edited by RUFUS YERXA AND BRUCE WILSON

cambridge university press Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, Sao˜ Paulo Cambridge University Press The Edinburgh Building, Cambridge CB2 2RU, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521861595

C World Trade Organization 2005

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CONTENTS

Notes on contributors page viii Preface xvii Table of cases xix Abbreviations xxxvii

part i Introduction and General Considerations 1 1 The power of the WTO dispute settlement system 3 Rufus Yerxa 2 The WTO dispute settlement and general international law 7 Georges Abi-Saab

part ii The WTO Dispute Settlement System: Its Processes and Its Institutions 13 3 The WTO dispute settlement system and its operation: a brief overview of the ﬁrst ten years 15 Bruce Wilson 4 The role of the Dispute Settlement Body in the dispute settlement process 25 Bozena Mueller-Holyst 5 Consultations and the panel process in the WTO dispute settlement system 29 Gabrielle Marceau 6 Contingent trade remedies and WTO dispute settlement: some particularities 46 Jesse Kreier

vi contents

7 The making of the ‘World Trade Court’: the origins and development of the Appellate Body of the World Trade Organization 63 Peter Van den Bossche 8 Special challenges at the appellate stage: a case study 80 Valerie Hughes 9 The reasonable period of time for compliance with the rulings and recommendations adopted by the WTO Dispute Settlement Body 88 Werner Zdouc 10 Implementation of panel and Appellate Body rulings: an overview 98 Brendan McGivern 11 A brief introduction to countermeasures in the WTO dispute settlement system 110 Yves Renouf

part iii The WTO Dispute Settlement System: Systemic and Other Issues 123 12 The role of lawyers in the WTO dispute settlement system 125 Giorgio Sacerdoti 13 Jurisdiction in WTO dispute settlement 132 Joel Trachtman 14 Due process in WTO disputes 144 Andrew Mitchell 15 Standards of review in WTO panel proceedings 161 Matthias Oesch 16 Administration of evidence in WTO dispute settlement proceedings 177 Scott Andersen 17 Confidentiality issues under the DSU: fact-finding process versus confidentiality 190 Olivier Prost

contents vii

18 Panels’ consultations with scientiﬁc experts 204 Mireille Cossy 19 Amicus curiae participation in WTO dispute settlement: reﬂections on the past decade 221 James Durling and David Hardin 20 Suspension of concessions and retaliation under the Agreement on Safeguards: the recent US – Steel Safeguards case 232 Raimund Raith 21 Compliance with WTO dispute settlement decisions: is there a crisis? 242 John Magnus 22 DSU review: a view from the inside 251 David Evans and Celso de Tarso Pereira

part iv Annexes 269 Annexes I–V Selected statistics: the ﬁrst ten years of the WTO 271

NOTES ON CONTRIBUTORS

Georges Michel Abi-Saab was appointed to the Appellate Body of the World Trade Organization in June 2000 and became Chairman of the Appellate Body in 2003. Born in Egypt on 9 June 1933, Georges Michel Abi-Saab is Honorary Professor of International Law at the Graduate Institute of International Studies in Geneva (having taught there from 1963 to 2000); Honorary Professor at Cairo University’s Faculty of Law; and a Member of the Institute of International Law. Professor Abi-Saab has also served as consultant to the Secretary-General of the United Nations. He represented Egypt in the Diplomatic Conference on the Reaffirmation and Development of International Humanitarian Law (1974 to 1977), and acted as advocate and Counsel for several governments in cases before the International Court of Justice (ICJ) as well as in international arbitrations. He has also served twice as judge ad hoc on the ICJ and as Judge on the Appeals Chamber of the International Criminal Tribunals for the Former Yugoslavia and for Rwanda. He is a Commissioner of the United Nations CompensationCommissionandaMemberoftheAdministrativeTribunal of the International Monetary Fund and of various international arbitral tribunals. ScottAndersen is the Managing Partner of Sidley Austin Brown & Wood’s Geneva office. He focuses his practice on the use of WTO rules to resolve international trade disputes. Mr Andersen is also actively involved in the litigation and enforcement of matters submitted to WTO dispute settlement panels. Mr Andersen was recently lead counsel in the landmark Upland Cotton dispute challenging domestic and export agricultural subsidies causing serious prejudice. Between 1995 and 2000, Mr Andersen was the Legal Adviser to the US Mission to the WTO in Geneva, Switzerland where he represented the United States in more than 30 disputes before the WTO – both panels and the Appellate Body. In addition he was the Geneva USTR negotiator for environment, investment, balance of pay- ments, fishing subsidies, and customs valuation issues between 1996 and

viii

notesoncontributors ix

2000. Prior to his arrival in Geneva, Mr Andersen worked for five years at the US International Trade Commission, focusing on anti-dumping and intellectual property issues as well as participating in NAFTA investment negotiations. Mireille Cossy graduated in Law at the Universities of Lausanne and Geneva (Switzerland). In 1995, she joined the Trade and Environment Division of the World Trade Organization. Since 1999, she has been a Counsellor in the Trade in Services Division of the WTO, and currently focuses on issues related to environmental, energy and health services. She has also acted as Secretary to four WTO dispute panels. Before joining the WTO, she worked for the Swiss Ministry of Economic Affairs and for the International Committee of the Red Cross. James Durling is a partner in Willkie Farr & Gallagher LLP’s Washington DC office, where he specializes in international trade law. His practice focuses on trade remedy and WTO litigation, as well as trade policy advisory work. He has worked extensively on WTO dispute settlement proceedings, with a particular focus on WTO challenges to trade remedy measures. Mr Durling advised the foreign parties in the panel and Appellate Body proceedings on US – Steel Safeguards. He has also written extensively on the subject of WTO dispute settlement proceedings and trade remedies, including three books: Anatomy of a Trade Dispute (2000), Understanding the WTO Antidumping Agreement (2002), and Business Guide to Trade Remedies in the United States (2003). Mr Durling studied history at Haverford College (BA 1980), economics at Princeton Univer- sity (MPA 1984), and law at New York University (JD 1984). David Evans is a Senior Legal Adviser at the Ministry of Foreign Affairs and Trade in New Zealand. He was First Secretary in charge of WTO legal matters at the New Zealand Permanent Mission to the WTO from 2002–2005. He chaired the WTO Committee on Anti-Dumping Practices in 2003–2004. He has worked actively on a number of disputes, including Canada – Dairy, US – Steel Safeguards, and US – Lamb.HehasanLLB (Hons) and Bachelor of Arts (Political Science) from Auckland University. David Hardin is currently an associate attorney in Willkie Farr & Gallagher LLP’s Washington, DC office, where he specializes in international trade law. His practice focuses on trade remedy cases before the WTO and various US trade agencies. Prior to joining Willkie Farr & Gallagher, Mr Hardin clerked at the US Department of Commerce and the US International Trade Commission. Mr Hardin studied political science

x notesoncontributors

at George Mason University (BA 1999) and law at the George Washington University Law School (JD 2003). Valerie Hughes has been Director of the Appellate Body Secretariat of the World Trade Organization since August 2001. Previously, she was with a private law firm in Ottawa, Canada. She also spent 19 years with the Government of Canada, during which she held various positions, including Director of the Trade Law Division of the Department of Foreign Affairs and Trade, Director of the General Legal Services Division of the Department of Finance, and Senior Counsel of the International Law Section of the Department of Justice. Ms Hughes is an expert in international law and has litigated before various international courts and tribunals. Jesse Kreier is Counsellor and Chief Legal Officer in the Rules Division of the World Trade Organization. Since joining the WTO Secretariat in 1992, Mr Kreier has served as legal officer to numerous dispute settlement panels, and currently supervises Division staff servicing dispute settlement panels arising under the WTO Rules agreements (Agreements on Anti-Dumping, Subsidies and Countervailing Measures, Safeguards, and Trade in Civil Aircraft). He has also staffed a number of negotiations, and is at present the Secretary of the Negotiating Group on Rules From 1987 to 1992, Mr Kreier was in private legal practice in Washington, DC, where he specialized in international trade regulation. Mr Kreier holds a JD degree, magna cum laude, from Georgetown University Law Center, a Master of Science in Foreign Service from Georgetown University, and a Bachelor of Arts from Johns Hopkins University. He is admitted to the Bar in California and the District of Columbia, USA. John Magnus is President of TRADEWINS LLC, a trade law and policy consulting firm in Washington DC. He has been an active practitioner for 15 years, serving as external counsel to domestic and foreign firms and industry coalitions. His client work covers a wide variety of international issues, with an emphasis on WTO law and dispute settlement, trade remedy proceedings, market access initiatives involving goods and services, subsidy disputes, pending trade negotiations, US trade legisla- tion and Congressional oversight activities, foreign governments’ trade regimes and industrial policy measures, customs/compliance issues, and the application of national and international competition rules. He also advises foreign governments on their trade regimes and implementation of WTO rules. Mr Magnus is a past Chair of the International Trade

notesoncontributors xi

Law Committee of the American Bar Association, and presently serves as Policy/Government Affairs Ofﬁcer for the ABA Section of International Law. He was with the law ﬁrm Dewey Ballantine LLP from 1990–2004, as a Partner from 2000–2004, and since 2003 has been an Adjunct Professor of Law at the University of Baltimore School of Law teaching ‘Interna- tional Business Transactions’ and ‘International Trade Law and Policy’. Mr Magnus is a graduate of Stanford University (AB, International Rela- tions) and the University of Chicago Law School. Gabrielle Marceau is a Canadian lawyer and, currently, Counsellor in the Legal Affairs Division of the World Trade Organization (WTO) in Geneva where she has been working since 1994. From 1983 to 1988, Ms Marceau worked in Quebec, Canada in private practice, where she specialized in litigation. She is a member of the Quebec Bar (1983), received her LL.M. from the London School of Economics (England) in 1990 and her Ph.D. from the University of London (England) in 1993. As well as working at the WTO, she is also Professor of WTO law at the University of Geneva and the Graduate Institute of International Studies (HEI) also in Geneva. Brendan McGivern is with White & Case International Trade (Geneva). He practices international trade law, particularly the law of the World Trade Organization (WTO). He advises companies, industry associations and sovereign governments on the full range of WTO disciplines, including anti-dumping, subsidies and countervailing measures, safeguards, state-trading enterprises, services, and intellectual property. He represents WTO Member states in dispute settlement proceedings, and is currently involved in three active WTO disputes before panels and the Appellate Body. In 2003–2004, he served as a member of the WTO arbitration panel in the US – Anti-Dumping Act of 1916 case. Prior to joining White & Case, Mr McGivern was the senior legal adviser and the head of the Dispute Settlement section at the Canadian Mission to the WTO in Geneva. He holds a B.A. and LL.B. from the University of British Columbia and an M.A. in International Affairs from Carleton University. He is a member of the Bar of Ontario. Andrew Mitchell is a Consultant to the International Monetary Fund (IMF) in Geneva, a Fellow of the Tim Fischer Centre for Global Trade & Finance at Bond University, and a Senior Fellow in the University of Melbourne Law School. He is also a Doctoral Candidate in Law at the University of Cambridge as a WM Tapp Scholar of Gonville & Caius College and a Cambridge Commonwealth Trust Scholar. Andrew Mitchell

xii notesoncontributors

graduated from the University of Melbourne with First Class Honours in both his Bachelor of Laws and Bachelor of Commerce degrees. He subsequently obtained a Master of Laws from Harvard Law School and completed the requirements for a Graduate Diploma in International Law from the University of Melbourne. Mr Mitchell was previously a Solicitor with Allens Arthur Robinson in Australia, and worked brieﬂy at Davis Polk &WardwellinNewYork.HehasalsoworkedintheTradeDirectorateof the OECD, the Intellectual Property Division of the WTO, and the Legal Department of the IMF.During 2003–2004, he was a Fellow at the Institute of International Economic Law at Georgetown University. Mr Mitchell has published in numerous journals and books on areas including WTO law, international law, international humanitarian law and constitutional law. He teaches WTO law at the University of Melbourne and the University of Western Ontario. Bozena Mueller-Holyst is a Counsellor in the Council and Trade Nego- tiations Committee Division of the WTO and has worked for the GATT and then the WTO, since 1993. She has been involved in the work of the Dispute Settlement Body since its inception. She graduated from the Graduate Institute of International Studies (HEI) in Geneva (Switzer- land) with a Master’s degree in International Economics, and also from the Academy of Economics in Krakow (Poland) with a Master’s degree in International Economic Relations and International Trade. Matthias Oesch is Senior Research Fellow at the World Trade Institute (WTI) in Berne. Previously, he worked as Legal Counsel in the WTO Divi- sion of the Federal Department of Economics, Switzerland, having represented Switzerland before the Appellate Body in the US – Steel Safeguards case and in the DSU Review. He is a member of the Berne Bar (1999), received his LL.M. from the London School of Economics and Political Science (2000) and his Ph.D. from the University of Berne (2003). He has written extensively on WTO and EU trade matters, including two books: Standards of Review in WTO Dispute Resolution (2003) and International Trade Regulation: Law and Policy in the WTO, the European Union and Switzerland (co-authored with Thomas Cottier, 2005). Olivier Prost, member of the Paris Bar and associate member of the Brussels Bar, is a partner of the Brussels ofﬁce of Gide Loyrette Nouel. He is leading the International Trade and Competition team, composed of Erwan Berthelot, Vassiliki Avgoustidi, Sven Ballschmiede, Maxime Baudouin and Guy Legras, the former Director-General of the European

notesoncontributors xiii

Commission (DG Agriculture and DG Relex) acting as senior adviser on trade and agriculture matters. He has been practising international trade and EC law in Brussels since 1991 and has been directly involved in major recent WTO dispute settlements such as Bananas (1998), Absestos (1999) and Sugar (2003). He advised the Chinese government in its first WTO case (US – Steel Safeguards, 2002). Recently the International Trade and Competition team has been selected by the ACP banana supplying countries for legal assistance in the WTO banana arbitration. Olivier Prost has advised both companies and governments before the EC authorities and foreign authorities in the areas of customs law, rules of origin, preferential trade agreements and instruments of commercial defence. He is particularly active in the field of anti-dumping, anti-subsidy and safeguard inves- tigations for both the industrial and agricultural sectors. He has also been involved in cases dealing with the most recent aspects of WTO regulatory law, such as discriminatory, restrictive and anti-competitive practices, and free movement of goods and services. Raimund Raith is the Minister-Counsellor/Legal Adviser at the Perma- nent Delegation of the European Commission in Geneva. Previously Legal Adviser in the Legal Service of the European Commission, dealing with legal aspects of the Community’s external relations. Formerly Head of the Intellectual Property and Investment Section, Directorate General for External Relations. He participated in the GATT Uruguay Round negotiations on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and was representative of the Community and its Member States in the TRIPS Council of the WTO. Raimund Raith was a Community negotiator for the Agreement on Trade-Related Aspects of Investment Measures (TRIMs). Before joining the Commission staff, he was an assistant professor in the law department of the European University Institute in Florence, Italy. He studied law and economics at the Universitaet Tubingen¨ (1st State Exam and Ph.D.), UniversitedeGen´ eve` and Law School of the University of Michigan (LL.M.). He has been a member of the New York Bar since 1982 and is also a member of the American Bar Association. He served on the faculty of the Salzburg Seminar (1995) and, since 2000, has been a lecturer at the Universitat¨ des Saarlandes. Yves Renouf has been working in the WTO Secretariat since 1995 as legal adviser to panels and arbitrators. Previously, he was an associate in the law firm of Van Bale & Bellis and a member of the Legal Service of the EC Commission. In his current position, he has been involved in many of the arbitrations under Article 22.6 of the DSU and Article 4.10 of the SCM

xiv notesoncontributors

Agreement, as well as in the only Article 25 DSU arbitration so far. As early as 1995, in an article in the Annuaire Fran¸cais de Droit International, Mr Renouf underlined the fundamental role that countermeasures would have to play in a dispute settlement system where a panel report would be adopted automatically. Mr Renouf also teaches a course on WTO dispute settlement at the University of Rennes, France. Giorgio Sacerdoti, born on 2 March 1943, has been Professor of Inter- national Law and European Law at Bocconi University, Milan, Italy, since 1986. He was appointed Appellate Body Member in December 2001. Professor Sacerdoti has held various posts in the public sector including Vice-Chairman of the Organization for Economic Cooperation and Development (OECD) Working Group on Bribery in International Busi- ness Transactions until 2001. He has acted as consultant to the Council of Europe, UNCTAD and the World Bank in matters related to foreign investments, trade, bribery, development and good governance. In the private sector, he has often served as arbitrator in international commercial disputes and at the International Centre for Settlement of Investment Disputes. Professor Sacerdoti has published extensively on international tradelaw,investments,internationalcontractsandarbitration.Aftergrad- uating from the University of Milan with a law degree summa cum laude in 1965, Professor Sacerdoti gained a Master in Comparative Law from Columbia University Law School as a Fulbright Fellow in 1967. He was admitted to the Milan Bar in 1969 and to the Supreme Court of Italy in 1979. Celso de Tarso Pereira, currently Second Secretary at the Brazilian Embassy in Ottawa, was in charge of dispute settlement at the Brazilian Mission in Geneva between 2001–2005. He graduated in law in Brazil (UFPR – Curitiba) and gained his Master in International Law from Kiel, Germany. Professor de Tarso has previously worked in the Mercosul Divi- sion of Brazil’s Foreign Ministry, where he was also responsible for dispute settlement. He is Professor of International Law at the Universities of Curitiba and Bras´ılia and Assistant Professor at the Diplomatic Academy ‘Rio Branco’, in Bras´ılia. Joel Trachtman is Professor of International Law at The Fletcher School of Law and Diplomacy at Tufts University. From 1998 to 2001, he was Academic Dean of the Fletcher School, and during 2000 and 2001, he served as Dean ad interim. In 2002, he was Manley O. Hudson Visit- ing Professor of Law and in 2004 he was Nomura Visiting Professor of

notesoncontributors xv

International Financial Systems at Harvard Law School. He has consulted for the United Nations, the OECD, APEC, the World Bank, the Organi- zation of American States, the US Agency for International Development and the International Law Institute. Professor Trachtman is a member of the Boards of the American Journal of International law, the European Journal of International Law, and the Journal of International Economic Law. He is a member of the bar of the State of New York. Prior to joining the faculty of The Fletcher School in 1989, he spent nine years in the private practice of international commercial law in New York and Hong Kong. His practice included a wide variety of international and domestic financing, acquisition and commercial transactions. He graduated in 1980 from Harvard Law School, where he served as editor-in-chief of the Harvard International Law Journal. His undergraduate education was at the London School of Economics and Columbia College. Peter Vanden Bossche is Professor of International Economic Law, Head of the Department of International and European Law and Academic Director of the Law and Language Studies master programme at Maas- tricht University, the Netherlands. Peter Van den Bossche studied law at the University of Antwerp (Lic. jur., 1982), the University of Michigan (LL.M., 1986) and the European University Institute, Florence (Dr. jur., 1990). From 1990 to 1992, he worked at the European Court of Justice, Luxembourg, as legal secretary to Advocate-General Walter van Gerven. From February 1997 to August 2001, Peter Van den Bossche was Coun- sellor to the Appellate Body of the World Trade Organization, Geneva. In 2001, he served as Acting Director of the Appellate Body Secretariat. Peter Van den Bossche is a member of the Editorial Board of the Journal of International Economic Law, a member of the international faculty of the World Trade Institute, Berne, and a visiting professor at the University of Amsterdam, the Universite´ Libre de Bruxelles and at the International Trade Academy, Macau. He works as a consultant for the United Nations and law firms specialized in international trade issues. In recent years, Peter Van den Bossche has published primarily on issues of international economic law and dispute settlement. He is the author of The Law And Policy of the World Trade Organization: Text, Cases and Materials, published by Cambridge University Press in 2005. BruceWilson assumed the post of Director of the Legal Affairs Division of the World Trade Organization (WTO) Secretariat in Geneva, Switzerland on 16 September 2002. In this post, he serves as the principal legal officer of the organization, a post in which he spends much of his time on WTO

xvi notesoncontributors

dispute settlement matters. Prior to taking up this position, he held a number of different trade policy positions in the US Government at the Office of the United States Trade Representative and the Committee on Ways and Means of the US House of Representatives. Upon retirement from the US Government in early 1998, he practiced international trade and international public policy law for a major US law firm until joining the Secretariat. Mr Wilson holds a B.A. in history from Stanford University (1970), an M.A. in international relations (with a specialization in international economics) from Johns Hopkins School of Advanced International Studies (1972), and an M.B.A. (with a specialization in finance) (1979) and a J.D.(1986) from George Washington University. He is a member of the bars of Virginia and the District of Columbia in the United States. Rufus Yerxa has served as Deputy Director-General of the World Trade Organization (WTO) since 2002, responsible for dispute settlement. Mr Yerxa has an extensive record as a trade diplomat and lawyer. He served as US Ambassador to the GATT, the predecessor organization to the WTO and later as Deputy US Trade Representative in Washington – his government’s senior sub-cabinet trade official. Prior to this he was with the US House of Representatives, where he was Staff Director of the Trade Subcommittee. After leaving government service in 1995, he moved to Brussels as resident partner with a major US law firm. He subsequently served as European General Counsel for a major pharmaceuticals and agro-food company. Werner Zdouc obtained his Ph.D from the University of St. Gallen (Switzerland); his LL.M. from the University of Michigan (USA), Law School and his law degree from the University of Graz (Austria). Since 2001, Werner Zdouc has been a Counsellor, in the Appellate Body Secretariat of the World Trade Organization. He joined the WTO in 1995 as Legal Affairs Officer in the Legal Affairs Division and was also a lecturer for postgraduate studies in international economic law at the Universi- ties of St. Gallen and Geneva. Mr Zdouc is currently lecturer and visiting professor for international trade law at Vienna Economic University and the University of Zurich.¨ In 1989 he served as development aid project evaluator in South America and from 1987–1989 was Director of the Afro-Asian-Institute Graz (cultural centre for students from developing countries). He has contributed to a number of publications on international economic law and EU trade law.

PREFACE

As the WTO enters its second decade, it is only fitting for the WTO community at large to step back for a moment to reflect on how the organization and the many agreements it administers have functioned over the first decade and to determine whether there are any particular lessons to be learned and applied in the future. This publication attempts to assist in this regard with respect to the operation of the WTO dispute settlement system. While the material contained in this volume is far from exhaustive, it does cover a representative cross-section of the various issues and situations under the Dispute Settlement Understanding that WTO Members have had to deal with during the first decade. Most importantly, the publication is unique because it includes contributions from virtually the entire gamut of actors involved in the day-to-day operation of the WTO dispute settlement system – Member government representatives, private lawyers who litigate on behalf of Member governments in the system, Appellate Body members, Appellate Body Secretariat staff, and WTO Secretariat staff. It also includes contributions from several academic scholars who closely follow and carefully scrutinize all that goes on within the system. This book contains 21 relatively short and straightforward chapters on various aspects of the dispute settlement system. Each chapter is based largely on the individual author’s own personal experience with, or study of, the system. Consequently, the book should make for informative and even fascinating reading for those who wish to gain further insights into how the system has operated in practice since 1995. As those who even casually follow WTO affairs are aware, the WTO dispute settlement system has been well utilized by the Members, and thus has been an exceedingly active venue for disputes since its inception. As a result, hardly a day goes by without one WTO dispute or another being the subject of news headlines in one or more of the territories of the WTO’s 148 Members. This is because what happens under the WTO dispute settlement system can and does have important trade and xvii

xviii preface

economic consequences. Thus, understanding why and how the system operates and how it has evolved is more than just an intellectual exercise, particularly for those entrusted with formulating and implementing an individual Member’s trade policies and those whose economic interests are directly affected. Credit for this publication must go first and foremost to the contribut- ing authors. Not only did they all produce excellent chapters, they also agreed to subject those chapters to the review and the suggestions of the book’s editors and their colleagues in the WTO Secretariat who worked on this project. The first decade of operation of the WTO dispute settlement system has truly been a fascinating period in the history of inter-governmental dispute resolution in the commercial arena. We are confident that this publication will assist in enhancing our collective understanding of the system and of how the lessons of the first decade can be applied to make the second decade even more successful with respect to the resolution of WTO disputes.

Rufus Yerxa and Bruce Wilson WTO Secretariat Geneva, Switzerland June 2005

TABLE OF CASES

Short Title Full Case Title and Citation Argentina – Ceramic Panel Report, Argentina – Definitive Tiles Anti-Dumping Measures on Imports of Ceramic Floor Tiles from Italy, WT/DS189/R, adopted 5 November 2001, DSR 2001:XII, 6241 Argentina – Appellate Body Report, Argentina – Safeguard Footwear (EC) Measures on Imports of Footwear, WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 Argentina – Panel Report, Argentina – Safeguard Measures Footwear (EC) on Imports of Footwear, WT/DS121/R, adopted 12 January 2000, as modified by the Appellate Body Report, WT/DS121/AB/R, DSR 2000:II, 575 Argentina – Poultry Panel Report, Argentina – Definitive Anti-Dumping Duties Anti-Dumping Duties on Poultry from Brazil, WT/DS241/R, adopted 19 May 2003 Argentina – Preserved Panel Report, Argentina – Definitive Safeguard Peaches Measure on Imports of Preserved Peaches, WT/DS238/R, adopted 15 April 2003 Argentina – Textiles Appellate Body Report, Argentina – Measures and Apparel Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted 22 April 1998, DSR 1998:III, 1003 Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327

xix

xx table of cases

Short Title Full Case Title and Citation Australia – Salmon Panel Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/R and Corr.1, adopted 6 November 1998, as modiﬁed by the Appellate Body Report, WT/DS18/AB/R, DSR 1998:VIII, 3407 Australia – Salmon Panel Report, Australia – Measures Affecting (Article 21.5 – Importation of Salmon – Recourse to Article Canada) 21.5 of the DSU by Canada, WT/DS18/RW, adopted 20 March 2000, DSR 2000:IV, 2031 Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 Brazil – Aircraft Panel Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/R, adopted 20 August 1999, as modiﬁed by the Appellate Body Report, WT/DS46/AB/R, DSR 1999:III, 1221 Brazil – Aircraft Decision by the Arbitrators, Brazil – Export (Article 22.6 – Brazil) Financing Programme for Aircraft – Recourse to Arbitration by Brazil under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement, WT/DS46/ARB, 28 August 2000, DSR 2002:I, 19 Brazil – Desiccated Appellate Body Report, Brazil – Measures Coconut Affecting Desiccated Coconut, WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 Canada – Aircraft Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, 1377 Canada – Aircraft Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/R, adopted 20 August 1999, as upheld by the Appellate Body Report, WT/DS70/AB/R, DSR 1999:IV, 1443 Canada – Aircraft Panel Report, Canada – Export Credits and Credits and Loan Guarantees for Regional Aircraft, Guarantees WT/DS222/R and Corr.1, adopted 19 February 2002

tableofcases xxi

Short Title Full Case Title and Citation Canada – Aircraft Decision by the Arbitrator, Canada – Export Credits and Guarantees Credits and Loan Guarantees for Regional (Article 22.6 – Aircraft – Recourse to Arbitration by Canada Canada) under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement, WT/DS222/ARB, 17 February 2003 Canada – Dairy Panel Report, Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103/R, WT/DS113/R, adopted 27 October 1999, as modiﬁed by the Appellate Body Report, WT/DS103/AB/R, WT/DS113/AB/R, DSR 1999:VI, 2097 Canada – Dairy Appellate Body Report, Canada – Measures (Article 21.5 – New Affecting the Importation of Milk and the Zealand and US) Exportation of Dairy Products – Recourse to Article 21.5 of the DSU by New Zealand and the United States, WT/DS103/AB/RW, WT/DS113/AB/RW, adopted 18 December 2001, DSR 2001:XIII, 6829 Canada – Herring and GATT Panel Report, Canada – Measures Salmon Affecting Exports of Unprocessed Herring and Salmon, adopted 22 March 1988, BISD 35S/98 Canada – Wheat Panel Report, Canada – Measures Relating to Exports and Grain Exports of Wheat and Treatment of Imported Imports Grain, WT/DS276/R, adopted 27 September 2004, as upheld by the Appellate Body Report, WT/DS276/AB/R Chile – Price Band Panel Report, Chile – Price Band System and System Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/R, 3 May 2002 adopted 23 October 2002, as modiﬁed by the Appellate Body Report, WT/DS207AB/R EC–Approvaland European Communities – Measures Affecting Marketing of Biotech the Approval and Marketing of Biotech Products Products

xxii table of cases

Short Title Full Case Title and Citation EC – Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001, DSR 2001:VII, 3243 EC – Asbestos Panel Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/R and Add.1, adopted 5 April 2001, as modiﬁed by the Appellate Body Report, WT/DS135/AB/R, DSR 2001:VIII, 3305 EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591 EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by the United States, WT/DS27/R/USA, adopted 25 September 1997, as modiﬁed by the Appellate Body Report, WT/DS27/AB/R, DSR 1997:II, 943 EC – Bananas III Decision by the Arbitrators, European (Ecuador) (Article 22.6 – Communities – Regime for the Importation, EC) Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB/ECU, 24 March 2000, DSR 2000:V, 2237 EC – Bananas III (US) Decision by the Arbitrators, European (Article 22.6 – EC) Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB, 9 April 1999, DSR 1999:II, 725

tableofcases xxiii

Short Title Full Case Title and Citation EC – Bed Linen Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India, WT/DS141/AB/R, adopted 12 March 2001, DSR 2001:V, 2049 EC – Bed Linen Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India, WT/DS141/R, adopted 12 March 2001, as modified by the Appellate Body Report, WT/DS141/AB/R, DSR 2001:VI, 2077 EC – Bed Linen Appellate Body Report, European (Article 21.5 – India) Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India, WT/DS141/AB/RW, adopted 24 April 2003 EC – Bed Linen Panel Report, European Communities – (Article 21.5 – India) Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India, WT/DS141/RW, adopted 24 April 2003, as modified by the Appellate Body Report, WT/DS141/AB/RW EC – Export Subsidies Appellate Body Report, European on Sugar Communities – Export Subsidies on Sugar, WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005 EC – Export Subsidies Panel Report, European Communities – Export on Sugar (Australia) Subsidies on Sugar, Complaint by Australia, WT/DS265/R, adopted 19 May 2005, as modified by the Appellate Body Report, WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R EC – Export Subsidies Panel Report, European Communities – Export on Sugar (Brazil) Subsidies on Sugar, Complaint by Brazil, WT/DS266/R, adopted 19 May 2005, as modified by the Appellate Body Report, WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R

xxiv table of cases

Short Title Full Case Title and Citation EC – Export Subsidies on Panel Report, European Communities – Sugar (Thailand) Export Subsidies on Sugar, Complaint by Thailand, WT/DS283/R, adopted 19 May 2005, as modiﬁed by the Appellate Body Report, WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135 EC – Hormones Award of the Arbitrator, EC Measures Concerning Meat and Meat Products (Hormones) – Arbitration under Article 21.3(c) of the DSU, WT/DS26/15, WT/DS48/13, 29 May 1998, DSR 1998:V, 1833 EC – Hormones Decision by the Arbitrators, European (Canada) (Article 22.6 – Communities – Measures Concerning Meat EC) and Meat Products (Hormones), Original Complaint by Canada – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS48/ARB, 12 July 1999, DSR 1999:III, 1135 EC – Hormones (US) Decision by the Arbitrators, European (Article 22.6 – EC) Communities – Measures Concerning Meat and Meat Products (Hormones), Original Complaint by the United States – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS26/ARB, 12 July 1999, DSR 1999:III, 1105 EC – Poultry Appellate Body Report, European Communities – Measures Affecting the Importation of Certain Poultry Products, WT/DS69/AB/R, adopted 23 July 1998, DSR 1998:V, 2031

tableofcases xxv

Short Title Full Case Title and Citation EC – Sardines Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002 EC – Sardines Panel Report, European Communities – Trade Description of Sardines, WT/DS231/R and Corr.1, adopted 23 October 2002, as modified by the Appellate Body Report, WT/DS231/AB/R EC–TubeorPipe Appellate Body Report, European Fittings Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R, adopted 18 August 2003 EC–TubeorPipe Panel Report, European Communities – Fittings Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted 18 August 2003, as modified by the Appellate Body Report, WT/DS219/AB/R Egypt–SteelRebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey, WT/DS211/R, adopted 1 October 2002 Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998, DSR 1998:IX, 3767 Guatemala – Cement I Panel Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico, WT/DS60/R, adopted 25 November 1998, as modified by the Appellate Body Report, WT/DS60/AB/R, DSR 1998:IX, 3797 India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9

xxvi table of cases

Short Title Full Case Title and Citation India – Patents (US) Panel Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, Complaint by the United States, WT/DS50/R, adopted 16 January 1998, as modiﬁed by the Appellate Body Report, WT/DS50/AB/R, DSR 1998:I, 41 India – Quantitative Appellate Body Report, India – Quantitative Restrictions Restrictions on Imports of Agricultural, Textile and Industrial Products, WT/DS90/AB/R, adopted 22 September 1999, DSR 1999:IV, 1763 Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3, and 4, adopted 23 July 1998, DSR 1998:VI, 2201 Japan – Agricultural Appellate Body Report, Japan – Measures Products II Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 277 Japan – Agricultural Panel Report, Japan – Measures Affecting Products II Agricultural Products, WT/DS76/R, adopted 19 March 1999, as modiﬁed by the Appellate Body Report, WT/DS76/AB/R, DSR 1999:I, 315 Japan – Alcoholic Appellate Body Report, Japan – Taxes on Beverages II Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97 Japan – Apples Appellate Body Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/AB/R, adopted 10 December 2003 Japan – Apples Panel Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/R, adopted 10 December 2003, as upheld by the Appellate Body Report, WT/DS245/AB/R Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper, WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179

tableofcases xxvii

Short Title Full Case Title and Citation Korea – Alcoholic Panel Report, Korea – Taxes on Alcoholic Beverages Beverages, WT/DS75/R, WT/DS84/R, adopted 17 February 1999, as modified by the Appellate Body Report, WT/DS75/AB/R, WT/DS84/AB/R, DSR 1999:I, 44 Korea – Certain Paper Korea – Anti-Dumping Duties on Imports of Certain Paper from Korea Korea – Commercial Panel Report, Korea – Measures Affecting Vessels Trade in Commercial Vessels, WT/DS273/R, adopted 11 April 2005 Korea–Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3 Korea–Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/R and Corr.1, adopted 12 January 2000, as modified by the Appellate Body Report, WT/DS98/AB/R, DSR 2000:I, 49 Korea – Procurement Panel Report, Korea – Measures Affecting Government Procurement, WT/DS163/R, adopted 19 June 2000, DSR 2000:VIII, 3541 Mexico–CornSyrup Appellate Body Report, Mexico – (Article 21.5 – US) Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU by the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6675 Mexico–CornSyrup Panel Report, Mexico – Anti-Dumping (Article 21.5 – US) Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU by the United States, WT/DS132/RW, adopted 21 November 2001, as upheld by the Appellate Body Report, WT/DS132/AB/RW, DSR 2001:XIII, 6717 New Zealand – Finnish GATT Panel Report, New Zealand – Imports of Transformers Electrical Transformers from Finland, adopted 18 July 1985, BISD 32S/55

xxviii table of cases

Short Title Full Case Title and Citation Thailand – Cigarettes GATT Panel Report, Thailand – Restrictions on Importation of and Internal Taxes on Cigarettes, adopted 7 November 1990, BISD 37S/200 Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/R, adopted 5 April 2001, as modiﬁed by the Appellate Body Report, WT/DS122/AB/R, DSR 2001:VII, 2741 US – 1916 Act Appellate Body Report, United States – Anti-Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, 4793 US – 1916 Act (EC) Panel Report, United States – Anti-Dumping Act of 1916, Complaint by the European Communities, WT/DS136/R and Corr.1, adopted 26 September 2000, as upheld by the Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 4593 US – 1916 Act (Japan) Panel Report, United States – Anti-Dumping Act of 1916, Complaint by Japan, WT/DS162/R and Add.1, adopted 26 September 2000, as upheld by the Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 4831 US – 1916 Act (EC) Decision by the Arbitrators, United States – (Article 22.6 – US) Anti-Dumping Act of 1916, Original Complaint by the European Communities – Recourse to Arbitration by the United States under Article 22.6 of the DSU, WT/DS136/ARB, 24 February 2004 US – Appellate Body Report, United States – Sunset Corrosion-Resistant Review of Anti-Dumping Duties on Steel Sunset Review Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004

tableofcases xxix

Short Title Full Case Title and Citation US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan, WT/DS192/AB/R, adopted 5 November 2001, DSR 2001:XII, 6027 US – Countervailing Panel Report, United States – Countervailing Duty Investigation on Duty Investigation on Dynamic Random Access DRAMS Memory Semiconductors (DRAMS) from Korea, WT/DS296/R, 21 February 2005 US – Countervailing Appellate Body Report, United States – Measures on Certain Countervailing Measures Concerning Certain EC Products Products from the European Communities, WT/DS212/AB/R, adopted 8 January 2003 US – Countervailing Panel Report, United States – Countervailing Measures on Certain Measures Concerning Certain Products from EC Products the European Communities, WT/DS212/R, adopted 8 January 2003, as modiﬁed by the Appellate Body Report, WT/DS212/AB/R US–DRAMS Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521 US – Export Restraints Panel Report, United States – Measures Treating Exports Restraints as Subsidies, WT/DS194/R and Corr.2, adopted 23 August 2001, DSR 2001:XI, 5767 US – FSC Appellate Body Report, United States – Tax Treatment for ‘Foreign Sales Corporations’, WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619 US–FSC Panel Report, United States – Tax Treatment for ‘Foreign Sales Corporations’, WT/DS108/R, adopted 20 March 2000, as modiﬁed by the Appellate Body Report, WT/DS108/AB/R, DSR 2000:IV, 1675

xxx table of cases

Short Title Full Case Title and Citation US – FSC Decision by the Arbitrator, United States – Tax (Article 22.6 – US) Treatment for ‘Foreign Sales Corporations’ – Recourse to Arbitration by the United States under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement, WT/DS108/ARB, 30 August 2002 US – Gambling Panel Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/R, adopted 20 April 2005, as modified by the Appellate Body Report, WT/DS285/AB/R US – Gasoline Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 US – Gasoline Panel Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/R, adopted 20 May 1996, as modified by the Appellate Body Report, WT/DS2/AB/R, DSR 1996:I, 29 US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697 US – Hot-Rolled Steel Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/R, adopted 23 August 2001 as modified by the Appellate Body Report, WT/DS184/AB/R, DSR 2001:X, 4769 US–Lamb Appellate Body Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, 4051

tableofcases xxxi

Short Title Full Case Title and Citation US–Lamb Panel Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/R, WT/DS178/R, adopted 16 May 2001, as modified by the Appellate Body Report, WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX, 4107 US – Lead and Appellate Body Report, United States – Bismuth II Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, WT/DS138/AB/R, adopted 7 June 2000, DSR 2000:V, 2595 US – Lead and Panel Report, United States – Imposition of Bismuth II Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, WT/DS138/R and Corr.2, adopted 7 June 2000, as upheld by the Appellate Body Report, WT/DS138/AB/R, DSR 2000:VI, 2623 US–LinePipe Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/AB/R, adopted 8 March 2002 US–LinePipe Panel Report, United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/R, adopted 8 March 2002, as modified by the Appellate Body Report, WT/DS202/AB/R US–OffsetAct Appellate Body Report, United States – (Byrd Amendment ) Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003