Retrospective remedies in the WTO after automotive leather

Journal of International Economic Law

Volumn 6, Issue 3, 2003, Pages 545-564

  Goh, Gavin ^c   Ziegler, Andreas R ^a,b  

^a BOND UNIVERSITY   (Australia)

^b Sec of the Europ Free Trade Assoc   (Switzerland)

^c NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0042378516     PISSN: 13693034     EISSN: None     Source Type: Journal    
DOI: 10.1093/jiel/6.3.545     Document Type: Review

References (95)

1. WTO Article 21.5 Panel Report, Australia - Subsidies Provided to Producers and Exporters of Automotive Leather ('Automotive Leather''), WT/DS126/RW, adopted 11 February 2000.
2. Meeting of the Dispute Settlement Body, 11 February 2000, WT/DSB/M/75, at 8.
3. GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva, 1994), at 231.
4. On the law of subsidies in the WTO framework in general see Marc Benitah, The Law of Subsidies under the GATT/WTO System (The Hague, 2002). See also Gary N. Horlick, 'John Jackson and the Development of GATT/WTO Subsidies Rules', in Marco Bronckers (ed), New Directions in International Economic Law (The Hague, 2000), 177-84.
5. On the law of subsidies in the WTO framework in general see Marc Benitah, The Law of Subsidies under the GATT/WTO System (The Hague, 2002). See also Gary N. Horlick, 'John Jackson and the Development of GATT/WTO Subsidies Rules', in Marco Bronckers (ed), New Directions in International Economic Law (The Hague, 2000), 177-84.
6. Vienna Convention on the Law of Treaties, signed at Vienna, 23 May 1969, entry into force: 27 January 1980; 8 ILM 679.
7. Vienna Convention on the Law of Treaties, signed at Vienna, 23 May 1969, entry into force: 27 January 1980; 8 ILM 679.
8. Article 21.5 Panel Report, Automotive Leather, above n 1, para 6.27.
9. Ibid, para 6.31.
10. Ibid, para 6.32.
11. Ibid, para 6.33-6.34.
12. Ibid, para 6.25 and 6.35-6.38.
13. Under Article 16.4 of the DSU, a panel report is adopted at a DSB meeting unless a party to the dispute notifies its decision to appeal, or the DSB decides by consensus not to adopt the report.
14. Above n 2, at 5-7.
15. Ibid, at 6.
16. Ibid, at 8.
17. Ibid, at 8.
18. Ibid, at 5. The United States sought to draw a distinction between one-off subsidies and a programme of continuing subsidies.
19. Article 21.5 Panel Report, Automotive Leather, above n 1, para 6.106.
20. WTO Article 21.5 Panel Report, Canada - Measures Affecting the Export of Civilian Aircraft, WT/DS70/RW, adopted 4 August 2000, para 5.48.
21. WTO Article 21.5 Panel Report, Brazil - Export Financing Programme for Aircraft, WT/DS46/RW, adopted 23 August 200l fn 17.
22. WTO Appellate Body Report, Brazil - Export Financing Programme for Aircraft Recourse by Canada to Article 21.5 of the DSU, WT/DS46/AB/RW, adopted 4 August 2000, para 45. The Appellate Body did not rule, however, on whether non-recall of past subsidies would also constitute a failure to 'withdraw' subsidies.
23. Above n 2, at 7
24. WTO Article 21.5 Panel Report, United States - Tax Treatment for 'Foreign Sales Corporations', WT/DS108/RW, adopted 29 January 2002, para 3.1.
25. Article 21.5 Panel Report, Automotive Leather, above n 1, at 58-59.
26. See, e.g., Article 21.5 Panel Report, Automotive Leather, above n 1, at 49.
27. Article 21.5 Panel Report, Automotive Leather, above n 1, para 6.20.
28. Ibid, para 6.19.
29. WTO Appellate Body Report, European Communities - Regime for the Importation, Sale and Distribution of Bananas ('EC - Bananas'), WT/DS27/AB/R, adopted 25 September 1997 para 141.
30. WTO Appellate Body Report, Brazil - Measures Affecting Desiccated Coconut ('Brazil - Desiccated Coconut'), WT/DS22/AB/R, adopted 20 March 1997, at 22.
31. WTO Appellate Body Report, Japan - Measures Affecting Agricultural Products ('Japan - Agricultural Products'), WT/DS76/AB/R, adopted 19 March 1999, para 131.
32. WTO Appellate Body Report, Japan - Taxes on Alcoholic Beverages (Japan - Alcoholic Beverages), WT/DS8/AB/R, adopted 4 October 1996, at 14-15.
33. GATT, Basic Instruments and Selected Documents, 26S/210, 28 November 1979.
34. See also paragraph 6(ii) of the Annex Agreed Description of the Customary Practice of the GATT in the Field of Dispute Settlement (Article XXIII:2), This describes a panel's standard terms of reference as 'to examine the matter and to make such findings as will assist the CONTRACTING PARTIES in making the recommendations or rulings provided for in paragraph 2 of Article XXIII'.
35. GATT Panel Report, Norway - Procurement of Toll Collection Equipment for the City of Trondheim ('the Trondheim case'), GPR/DS2/R, adopted 13 May 1992.
36. Ibid, para 4.17. See also Petros Mavroidis, 'Government Procurement Agreement - The Trondheim Case: the Remedies Issue', 48 Swiss Review of International Economic Relations 77 (1993).
37. Ibid, para 4.17. See also Petros Mavroidis, 'Government Procurement Agreement - The Trondheim Case: the Remedies Issue', 48 Swiss Review of International Economic Relations 77 (1993).
38. Ibid, paras 4.26.
39. See Ernst-Ulrich Petersmann, 'International Competition Rules for the GATT/WTO World Trade and Legal System', 27 Journal of World Trade 35 (1993); Norio Komuro and Edwin Vermulst, 'Antidumping Disputes in the WTO: Navigating Dire Straits', 31 Journal of World Trade 5 (1997); and Petros Mavroidis, 'Remedies in the WTO Legal System: Between a Rock and a Hard Place', 11 European Journal of International Law 763 (2000).
40. See Ernst-Ulrich Petersmann, 'International Competition Rules for the GATT/WTO World Trade and Legal System', 27 Journal of World Trade 35 (1993); Norio Komuro and Edwin Vermulst, 'Antidumping Disputes in the WTO: Navigating Dire Straits', 31 Journal of World Trade 5 (1997); and Petros Mavroidis, 'Remedies in the WTO Legal System: Between a Rock and a Hard Place', 11 European Journal of International Law 763 (2000).
41. See Ernst-Ulrich Petersmann, 'International Competition Rules for the GATT/WTO World Trade and Legal System', 27 Journal of World Trade 35 (1993); Norio Komuro and Edwin Vermulst, 'Antidumping Disputes in the WTO: Navigating Dire Straits', 31 Journal of World Trade 5 (1997); and Petros Mavroidis, 'Remedies in the WTO Legal System: Between a Rock and a Hard Place', 11 European Journal of International Law 763 (2000).
42. Panel Report, New Zealand - Imports of Electrical Transformers from Finland, L/5814, 32S/55, para 4.11.
43. 1929 PCIJ Series A, No 8, 4, p 21. See also Mavroidis, above n 36. It is also interesting to study the draft articles on state responsibility, provisionally adopted by the International Law Commission during its fifty-second session, Geneva, 1 May-9 June 2000 and Geneva, 10 July-18 August 2000, available at: http://www.law.cam.ac.uk/rcil/ILCSR/Statresp.htm. (visited 1 October 2002).
44. 1929 PCIJ Series A, No 8, 4, p 21. See also Mavroidis, above n 36. It is also interesting to study the draft articles on state responsibility, provisionally adopted by the International Law Commission during its fifty-second session, Geneva, 1 May-9 June 2000 and Geneva, 10 July-18 August 2000, available at: http://www.law.cam.ac.uk/rcil/ILCSR/Statresp.htm. (visited 1 October 2002).
45. WTO Appellate Body Report, United States - Standards for Reformulated and Conventional Gasoline ('United States - Gasoline'), WT/DS2/AB/R, adopted 20 May 1996, at 17. See also Gabrielle Marceau, 'A Call for Coherence in International Law: Praises for the Prohibition Against "Clinical Isolation" in WTO Dispute Settlement', 33 Journal of World Trade 87 (1999).
46. WTO Appellate Body Report, United States - Standards for Reformulated and Conventional Gasoline ('United States - Gasoline'), WT/DS2/AB/R, adopted 20 May 1996, at 17. See also Gabrielle Marceau, 'A Call for Coherence in International Law: Praises for the Prohibition Against "Clinical Isolation" in WTO Dispute Settlement', 33 Journal of World Trade 87 (1999).
47. WTO Appellate Body Report, United States - Import Prohibition of Certain Shrimp and Shrimp Products (United States - Shrimp), WT/DS58/AB/R, adopted 6 November 1998.
48. On this issue see also Joost Pauwelyn, 'The Role of Public International Law in the WTO: How Far Can We Go?' 95 American Journal of International Law 535 (2001).
49. Article 21.5 Panel Report) Automotive Leather, above n 1 para 6.42.
50. WTO Appellate Body Report, Korea - Definitive Safeguard Measure on Imports of Certain Products, WT/DS98/AB/R, adopted 12 January 2000, para 75 and 81.
51. WTO Article 21.5 Panel Report, EC - Regime for the Importation, Sale and Distribution of Bananas - Recourse by Ecuador, WT/DS27/RW/ECU, adopted 6 May 1999, para 6.105.
52. Article 21.5 Panel Report, Automotive Leather, above n 1, para 6.49.
53. Article 27 (Internal law and observance of treaties) of the Vienna Convention on the Law of Treaties 1969 provides that: 'A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.' Above n 6.
54. WTO Appellate Body Report) Brazil - Aircraft Subsidies, above n 20 para 46.
55. See, e.g., Article 21.5 Panel Report, Automotive Leather, above n 1, Annex 3-2, the EC's Answers to Written Questions of the Panel, at p 125 of the panel report.
56. GATT Panel Report, Trondheim Case, above n 33, para 4.17.
57. Previously Article 93 of the TEC.
58. Article 88.2 TEC reads: If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the common market having regard to Article 87, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission. If the State concerned does not comply with this decision within the prescribed time, the Commission or any other interested State may, in derogation from the provisions of Articles 226 and 227, refer the matter to the Court of Justice direct.
59. Findings of the European Court of Justice in Case C-24/95 Land Rheinland-Pfalz v Alcan Deutschland GmbH [1997] ECRI-1591. See also Case C-5/89 Commission V Germany [1990] ECRI-3437 (known as BUG-Alutechnik) and Case S.F.E.I. [1996] ECR I-3547. More recently also Case T-67/94 Ladbroke Racing v Commission [1998] ECR II-1.
60. The authors of this paper would like to draw some attention to the composition of the panel that may have had an implication on the recourse to principles developed by the European Court of Justice on subsidies (state aids) under Community law. While taking into account principles developed by other courts such as the European Court of Justice on issues identical or similar to those arising under WTO law may be useful, it should not be done without duly taking into account the differences between the WTO dispute settlement system and domestic or Community adjudicatory systems and laws.
61. Most famously in Case C-24/95 Land Rheinland-Pfalz v Alcan Deutschland GmbH, above n 52.
62. Cf. §48 (2) of the German Law on Administrative Procedure (Verwaltungsverfahrensgesetz, VwVfG), which was at issue in Case C-24/95 Land Rheinland-Pfalz v.§ Alcan Deutschland GmbH, above n 52.
63. See, e.g., Eric F. Hinton, 'Strengthening the Effectiveness of Community Law: Direct Effect, Article 5 EC, and the European Court of Justice", 31 New York University Journal of International Law and Policy 307 (1999).
64. See, e.g., the respective Commission Communication, OJ 1995, C 156/5.
65. Findings of the European Court of Justice in Case C-24/95 Land Rheinland-Pfalz v. Alcan Deutschland GmbH, above n 52.
66. WTO Arbitrator's Report, European Communities - Measures Affecting Meat and Meat Products (Hormones), WT/DS26/ARB, report circulated 29 May 1998, para 38 and 41.
67. WTO Arbitrator's Report, European Communities - Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/ARB, report circulated 9 April 1999, para 6.11.
68. Ibid, para 6.3.
69. WTO Arbitrator's Report, United States - Tax Treatment for 'Foreign Sales Corporations', WT/DS108/ARB, report circulated 30 August 2002, para 5.41.
70. Ibid, para 5.57 and 5.60.
71. Article 21.5 Panel Report, Automotive Leather, above n 1, para 6.20.
72. One aspect of this is the principle of due deference. The panel in United States - Section 301 considered that while it was not bound to accept the interpretation presented by a responding Member, 'any Member can reasonably expect that considerable deference be given to its views on the meaning of its own law'. WTO Panel Report) United States - Sections 301-310 of the Trade Act of 1974 ('United States - Section 301'), WT/DS152/R, adopted 27 January 2000, para 7.19.
73. Ibid, para 7.24.
74. Article 8.2 of the DSU provides that panel members should be selected with a view to ensuring 'the independence of members, a sufficiently diverse background and a wide spectrum of experience'. Article 17.3 of the DSU provides, inter alia, that Appellate Body membership should be broadly representative of membership in the WTO.
75. See Mavroidis, above n 36, at 19 and Mavroidis, above n 34, at 77.
76. See Mavroidis, above n 36, at 19 and Mavroidis, above n 34, at 77.
77. See Mavroidis, above n 36, at 19 and Mavroidis, above n 34, at 77.
78. WT/DS126/RW, para 6.35.
79. The most comprehensive legal study so far is certainly Robert Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System (New Hampshire, 1993). See also Mavroidis, above n 34; Steve Charnovitz, 'Rethinking WTO Trade Sanctions', 95 American Journal of International Law 792-833 (2001); Gary N. Horlick, 'Problems with the Compliance Structure of the WTO Dispute Resolution Process', in: Daniel L. M. Kennedy and James D. Southwick (eds), The Political Economy of International Trade Law, Essays in Honor of Robert E. Hudec (Cambridge, 2002), 636-45 and David Palmeter and Stanimir A. Alexandrov, '"Inducing Compliance" in WTO Dispute Settlement', in Kennedy and Southwick (eds), ibid, 646-66, also give certain indications.
80. The most comprehensive legal study so far is certainly Robert Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System (New Hampshire, 1993). See also Mavroidis, above n 34; Steve Charnovitz, 'Rethinking WTO Trade Sanctions', 95 American Journal of International Law 792-833 (2001); Gary N. Horlick, 'Problems with the Compliance Structure of the WTO Dispute Resolution Process', in: Daniel L. M. Kennedy and James D. Southwick (eds), The Political Economy of International Trade Law, Essays in Honor of Robert E. Hudec (Cambridge, 2002), 636-45 and David Palmeter and Stanimir A. Alexandrov, '"Inducing Compliance" in WTO Dispute Settlement', in Kennedy and Southwick (eds), ibid, 646-66, also give certain indications.
81. The most comprehensive legal study so far is certainly Robert Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System (New Hampshire, 1993). See also Mavroidis, above n 34; Steve Charnovitz, 'Rethinking WTO Trade Sanctions', 95 American Journal of International Law 792-833 (2001); Gary N. Horlick, 'Problems with the Compliance Structure of the WTO Dispute Resolution Process', in: Daniel L. M. Kennedy and James D. Southwick (eds), The Political Economy of International Trade Law, Essays in Honor of Robert E. Hudec (Cambridge, 2002), 636-45 and David Palmeter and Stanimir A. Alexandrov, '"Inducing Compliance" in WTO Dispute Settlement', in Kennedy and Southwick (eds), ibid, 646-66, also give certain indications.
82. The most comprehensive legal study so far is certainly Robert Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System (New Hampshire, 1993). See also Mavroidis, above n 34; Steve Charnovitz, 'Rethinking WTO Trade Sanctions', 95 American Journal of International Law 792-833 (2001); Gary N. Horlick, 'Problems with the Compliance Structure of the WTO Dispute Resolution Process', in: Daniel L. M. Kennedy and James D. Southwick (eds), The Political Economy of International Trade Law, Essays in Honor of Robert E. Hudec (Cambridge, 2002), 636-45 and David Palmeter and Stanimir A. Alexandrov, '"Inducing Compliance" in WTO Dispute Settlement', in Kennedy and Southwick (eds), ibid, 646-66, also give certain indications
83. The most comprehensive legal study so far is certainly Robert Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System (New Hampshire, 1993). See also Mavroidis, above n 34; Steve Charnovitz, 'Rethinking WTO Trade Sanctions', 95 American Journal of International Law 792-833 (2001); Gary N. Horlick, 'Problems with the Compliance Structure of the WTO Dispute Resolution Process', in: Daniel L. M. Kennedy and James D. Southwick (eds), The Political Economy of International Trade Law, Essays in Honor of Robert E. Hudec (Cambridge, 2002), 636-45 and David Palmeter and Stanimir A. Alexandrov, '"Inducing Compliance" in WTO Dispute Settlement', in Kennedy and Southwick (eds), ibid, 646-66, also give certain indications.
84. Most contributions use, however, an economic or political science approach, such as Chad P. Brown, 'The Economics of Trade Disputes, the GATT's Article XXIII, and the WTO's Dispute Settlement Understanding', 14 Economics and Politics 283-323 (2002) or Kyle Bagwell and Robert W. Staiger, The Economics of the World Trading System (Cambridge MA: 2002).
85. Most contributions use, however, an economic or political science approach, such as Chad P. Brown, 'The Economics of Trade Disputes, the GATT's Article XXIII, and the WTO's Dispute Settlement Understanding', 14 Economics and Politics 283-323 (2002) or Kyle Bagwell and Robert W. Staiger, The Economics of the World Trading System (Cambridge MA: 2002).
86. For a general study on compliance in international law see A. Chayes and A. Chayes, The New Sovereignty: Compliance with International Regulatory Agreements (Cambridge MA: 1995), at 27.
87. For a thorough study see Miguel Poiares Maduro, We the Court: the European Court of Justice and the European Economic Constitution: A Critical Reading of Article 30 of the EC Treaty (Oxford: 1998).
88. GATT Panel Report, Trondheim Case, above n 33, para 4.22-4.23.
89. Ibid, para 5.2.
90. WTO Appellate Body Report, United States - Safeguard Measures on Imports of Fresh, Chilled, or Frozen Lamb Meat from New Zealand and Australia ('United States - Lamb Safeguards''), WT/DS177/AB/R, adopted 16 May 2001, para 178.
91. WTO Appellate Body Report, United States - Import Measures on Certain Products from the European Communities, WT/DS165/AB/R, adopted 10 January 2001, para 92.
92. Article 26 (Pacta sum servanda) of the Vienna Convention provides that: 'Every treaty in force is binding upon the parties to it and must be performed by them in good faith'.
93. This was by the Netherlands in 1952 in relation to 'United States Import Restrictions on Dairy Products', 1S/33.
94. In United States - Section 301, the panel made findings of prima facie inconsistency against the United States legislation but ultimately found that the threat of inconsistency was removed by the US Statement of Administrative Action and undertakings provided by the United States. The panel went on to warn that should the undertakings be repudiated or in any other way removed, the panel's finding of WTO conformity would no longer be warranted: WTO Panel Report) United States - Section 301, above n 65, para 7.131-7.136.
95. Above n 2, at 8.