Title: I
Author: Philip De Keyser
Last saved by: Joseph Weiler
Company: Harvard Law School

The Jean Monnet Program

Professor J.H.H. Weiler
European Union Jean Monnet Chair

Jean Monnet Working Paper 11/01

Philip De Keyser

Exploring WTO dispute settlement in 
US Anti-dumping Act 1916: An easy case?

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without permission of the author.

The Jean Monnet Working Papers are published under the auspices of the
 Jean Monnet Program 
hosted at Harvard Law School from 1995 to 2001
and now based at New York University School of Law

ISSN 1087-2221
© Philip De Keyser

I. 	INTRODUCTION	1
II. 	BACKGROUND	2
A. The US Antidumping Act of 1916: an obscure hybrid?	2
B. From Geneva Steel to Geneva: Procedural background to the case	6
III. 	Overview of the reports	8
A. 	The panel reports	8
1. 	Procedural and other preliminary issues	8
2. 	Applicability of art. VI GATT 1994	11
3. 	Application of the mandatory vs. discretionary law distinction	13
5. 	Other claims	17
6. 	Recommendations	17
B. 	Overview of the Appellate Body report	18
1. 	Enhanced third party rights	18
2. 	Jurisdiction of the panel to hear claims against the 1916 Act as such	18
3. 	Mandatory and discretionary legislation	19
4. 	Applicability of art VI GATT and the Anti-Dumping Agreement to the 1916  Act	20
5. 	Violation of art. VI:2 of the GATT 1994 and certain provisions of the Anti-Dumping Agreement	21
6. 	Conditional appeals: Articles III:4 and XI GATT and article XVI:4 WTO Agreement	21
IV. 	COMMENTS	22
A. 	Substantive aspects of the case	22
1. 	The ‘black letter law’: essential holdings of panel of Appellate Body	22
2. 	Implications for antitrust law?	22
B. 	Some methodological and procedural issues addressed in the case	24
1. 	“Multiple complaints” issues: separate panel proceedings on both claims and no enhanced third party rights	24
2. 	Objections against jurisdiction	25
3. 	Examination of domestic law	25
4. 	The distinction between mandatory and discretionary legislation	28
5. 	Judicial economy	30
6. 	Suggestions of means to secure compliance WITH FINDINGS	32
IV. 	Concluding remarks	32

Exploring WTO dispute settlement in US Anti-dumping Act 1916: An easy case?
By Philip De Keyser

Lic.jur. (Katholieke Universiteit Leuven, 2000), LL.M (Harvard University, 2001). This paper is a revised version of a seminar paper written in the framework of the Jean Monnet Seminar at Harvard Law School (Spring 2001). The author would like to express his indebtedness to in particular Prof. J.H.H. Weiler, who through his teaching stimulated the author's interest in WTO law; Sung-Joon Cho, who was always there with thoughtful suggestions, Zaid Al-Ali, who was his ‘sparring partner’ during the seminar presentation of this paper, and Gaspar Bergman.  Of course all errors are entirely to be attributed to the author. He would also like to thank the Belgian-American Educational Foundation, whose financial support made inter alia this paper possible. The author is currently an attorney at Stibbe (dept. of administrative law, Brussels) and can be reached by e-mail at: pdekeyse@post.harvard.edu

I. 	INTRODUCTION

At issue in this case was the compatibility of the United States Antidumping Act of 1916 (hereinafter also: the 1916 Act) with the WTO anti-dumping regime. This statute allows, under certain conditions, civil actions and criminal proceedings to be brought against importers who have sold foreign-produced goods in the United States at prices that are substantially less than the prices at which the same products are sold in a relevant foreign market. 
The annotated case was brought on complaints by the EC and Japan. These complaints were considered in separate proceedings by a panel of the same composition in early 2000. In essence, panel found substantial violations of art. VI GATT 1994 and the Agreement on Implementation of Article VI of the GATT 1994 (hereinafter: the Anti-Dumping Agreement). In a report adopted on September 26, 2000, the Appellate Body (hereinafter also: AB) upheld these findings.

See Panel report on US – Anti-Dumping Act of 1916, WT/DS136/R, 14 February 2000 (hereinafter: EC panel report) and Panel report on US - Anti-Dumping Act of 1916, WT/DS162/R, 31 March  2000 (hereinafter: Japan panel report).

See Appellate Body report on US – Anti-Dumping Act of 1916, WT/DS136/AB/R and WT/DS162/AB/R, adopted on 26 September 2000 (hereinafter: Appellate Body report).

^Several ^aspects ^of ^this ^case ^make ^it ^worth ^exploring: 
1. This case is of a certain importance for the understanding the scope of the WTO antidumping regime.  At the core of this case was the question whether the 1916 Act could be regarded as an anti-dumping law for WTO purposes. 
2. The case raises interesting procedural and methodological issues of WTO dispute settlement. For the first time, a panel and the AB were called upon to review legislation as such for its conformity with the WTO anti-dumping provisions. This raised questions about the scope of jurisdiction of panels to review such claims and the conditions to be fulfilled for legislation as such to be found in violation of WTO rules. Another unique aspect of the case is that it involved the review of domestic legislation as old as the Antidumping Act of 1916, enacted in a wholly different pre-GATT era and by the time of the proceedings ‘surrounded’ by sometimes contradictory interpretations by different interpreters. This made it necessary for the panels to revisit the question on the proper examination of domestic law for purposes of determining its WTO (non-)conformity.
3. This case involved a confrontation between three powerful WTO members -US vs. EC and Japan - and resulted in findings of substantial violations of US legislation. Previous cases have shown that settlement of such disputes requires more than mere technical interpretation and application of WTO law. It will be of some interest to see whether and how this influenced the methodological and procedural approach of the panel.
Comments on these aspects are reserved for part IV of this paper. 
The second and third parts of this paper are largely descriptive. Part II aims to provide a factual and procedural background to the case. First, I will provide a primer on the Antidumping Act 1916, the ‘fact’ of the case, emphasizing in particular the discourse on its hybrid nature in US law and its somewhat deceiving characterization as a rather obscure, unimportant statute. This is followed by a short overview of the procedural background to the case. Part III consists of an overview of the panel and AB reports.  

II. 	BACKGROUND

A. The US Antidumping Act of 1916: an obscure hybrid?
The US statute disputed in the case at hand was first enacted as Section 800-801 of the Revenue Act of 1916. Commonly referred to as the “Antidumping Act of 1916”, it allows civil actions and criminal proceedings to be brought against importers who ‘commonly and systematically’ have imported or sold foreign-produced goods in the United States at prices which are ‘substantially less’ than the prices at which the same products are sold in a relevant foreign market, provided that such action is committed with the intent of ‘destroying or injuring an industry in the United States, or of preventing the establishment of an industry in the United States, or of restraining or monopolizing any part of trade and commerce in such articles in the United States’.

The Revenue Act of 1916, ch. 463, Sections 800-801, 39 Stat. 798, codified as 15 U.S.C. §. 72 In relevant part, the statute reads as follows: 
"It shall be unlawful for any person importing or assisting in importing any articles from any foreign country into the United States, commonly and systematically to import, sell or cause to be imported or sold such articles within the United States at a price substantially less than the actual market value or wholesale price of such articles, at the time of exportation to the United States, in the principal markets of the country of their production, or of other foreign countries to which they are commonly exported after adding to such market value or wholesale price, freight, duty, and other charges and expenses necessarily incident to the importation and sale thereof in the United States: Provided, That such act or acts be done with the intent of destroying or injuring an industry in the United States, or of preventing the establishment of an industry in the United States, or of restraining or monopolizing any part of trade and commerce in such articles in the United States.
Any person who violates or combines or conspires with any other person to violate this section is guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding $5,000, or imprisonment not exceeding one year, or both, in the discretion of the court.
Any person injured in his business or property by reason of any violation of, or combination or conspiracy to violate, this section, may sue therefore in the district court of the United States for the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages sustained, and the cost of the suit, including a reasonable attorney’s fee.
^The ^foregoing ^provisions ^shall ^not ^be ^construed ^to ^deprive ^the ^proper ^State ^courts ^of ^jurisdiction ^in ^actions ^for ^damages ^thereunder."

This act was the first attempt of the US to address the problems of ‘dumping’. It was born out of fear that after the end of World War I European – especially German - firms would try to regain their position on the American market through predatory selling practices, thus threatening the newly established preeminence of American industries. 

See eg. Kermit W. Almstedt, International Price Discrimination and the 1916 Antidumping Act – Are Amendments in Order?, 13 LAW & POL’Y INT’L BUS. 751 (1981), David Rushford, Antitrust versus Antidumping: Revisiting the Antidumping Act of 1916, 3 U.C. Davis J.Int’l.L. & Pol’y 86 (1997).

Although the 1916 Act has been on the books for more than eighty years, it was rarely applied. There are no criminal cases under the 1916 Act reported. Before 1975 only one civil case was reported. Since 1975, the Act has known a little ‘revival’ and a modest jurisprudence emerged. However, none of the cases lead to the imposition of sanctions. This lack of success is attributed to the fact that the required intent imposes a burden of proof on plaintiffs that is extremely difficult to meet. A number of cases brought in recent years regarding steel imports, have raised concerns that the Act is being used as a tool of intimidation to force foreign competitors. 

See EC panel report and Japan panel report, para. 2.16; see also Diane M. Keppler, The Geneva Steel Co. Decision Raises Concerns in Geneva: Why the 1916 Antidumping Act Violates the WTO Antidumping Agreement, 32 GEO.WASH.J.INT’L.L.&ECON. 293 (1999).

H. Wagner and Adler Co. v. Mali,  74 F.2d 666 (2d Cir. 1935). This case dealt with issues of discovery, and did not reach the merits of a claim under the 1916 Act as such.

See infra for an overview of the most important cases.

See EC panel report and Japan panel report, para. 2.15; see also D. Keppler, supra note 6, 293.

The US Tariff Commission in its 1919 year report already recognized this difficulty. See the excerpt in Zenith Radio Corp. v. Matshushita Elec. Indus. Co, 494 F.Supp. 1190 (1224) (E.D.  Penn., 1980)

See in particular the Geneva Steel and Wheeling-Pitssburgh cases, discussed infra.

See eg. Peter Passell,  Politicized trade law: helping companies avoid market forces, The New York Times, 19 December 1996, D-2 (quoting prof. Ronald Cass, former member of the United States International Trade Commission: "The 1916 act could prove to be a great way to beat competitors into submission".

The text of the 1916 Act is a hybrid mixture of trade law and antitrust law elements.   Its enforcement and sanctioning mechanism was clearly borrowed from the existing US antitrust laws. Both the Sherman and the Clayton Act  relied largely on criminal enforcement. Private enforcement through claims for treble damages was already provided for in the Clayton Act. Furthermore, at least the last two types of required intent in the 1916 Act mechanism - restraining or monopolizing any part of trade and commerce – refer to the antitrust concern of injury to competition. On the other hand, the definition of ‘dumping’ and the first three types intent echo concerns - injury to competitors - typically addressed in anti-dumping law.

Comp. Mark A. Neville jr., The Antidumping Act of 1916: A War-Time Legacy, 25 N.Y.L.SCH.L.REV 536 (1981). The legislative history of the 1916 Act shows that the Democratic majority in Congress at the time was both in disfavor of higher tariffs (and hence of the imposition of anti-dumping duties) and in favor of vigorous enforcement of antitrust laws. Hence the antitrust like answer to the perceived threat of increased European competition. See eg. Kermit W. Almstedt, supra note 5, 751-52.

Sherman Act, 26 Stat. 209 (1890), codified at 15 USC §§ 1-7.

Clayton Act, 38 Stat. 730 (1914), codified at 15 USC §§ 12-27.

Many authors have discussed the issue of the different approach to price discrimination in antitrust and anti-dumping law. See very succinctly e.g. B. Hoekman & P. Mavroidis, Dumping, Antidumping and Antitrust, 30 J. WORLD TRADE, 27, at  28-29 (1996).

The provisions of Section 2 of the Clayton Act, also known as the Robinson-Patman Act, form today the basis for antitrust action against domestic price discrimination. Under influence of economic theory, only predatory price discrimination is considered illegal under the Robinson-Patman Act. Since the US Supreme court opinion in the Brooke Group case (1993), a complainant has to demonstrate two elements for predatory pricing to be established: (i) the prices complained of are below an appropriate measure of its rival’s cost and  (ii) the ‘predator’ had a reasonable prospect of recouping its investment in below-cost pricing.

15 USC §13.

Predatory pricing can in general be defined as: “systematically pricing below cost with a view to intimidating and/or eliminating rivals in an effort to bring about a market price higher than would otherwise prevail”. Real predatory pricing is considered to be very rarely to occur. See on predatory pricing e.g. M. TREBILCOCK & R. HOWSE, THE REGULATION OF INTERNATIONAL TRADE, at 181- 182 (1999)

Unilateral or concerted predatory pricing practices also violate Section 2 cq. 1 of the Sherman Act.

Brooke Group Ltd. v. Brown &  Williamson Tobacco Company, 509 U.S. 209, 118 S.Ct. 2578.

The unsuccessful antitrust inspired approach of the 1916 Act, was quickly marginalized by a specific administrative approach to anti-dumping. The latter was first introduced by the Antidumping Act of 1921, the basic framework of which was maintained by its successor, Title VII the Tariff Act of 1930. This act, as amended, still forms the statutory core of US anti-dumping law. Instead of relying on private or government actions brought before the courts, current anti-dumping law provides for administrative adjudication. An industry participant may bring a petition before the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC). The DOC determines whether dumping has occurred or not and the ITC makes findings as to the required injury. There is no intent requirement for action to be undertaken. If a finding of dumping and injury is made, a duty equal to the price differential is imposed. There are no criminal or civil penalties.

The Emergency Tariff Act of 1921, ch. 14, Title II, 42 Stat. 9.

Codified at 19 USC §1673.

The 1916 Act with its provision for a private right of action against dumping has remained an international unicum.

See Roger P. Alford, Why a private right against dumping would violate GATT, 66 N.Y.U.L. REV. 696 (1991), 727.

The – not very abundant – case law pertaining to the 1916 Act, shows that in interpreting the Act courts have especially struggled with the hybrid text of the law. An evolution is noticeable from a pure antitrust reading of the act towards a trade law approach. 

A comprehensive list of the court decisions pertaining to the 1916 Act can be found in footnote 19 to para. 2.14 of the EC panel report and footnote 18 to para. 2.14 of the Japan panel report.

The nature of the 1916 Act was for the first time addressed during the Zenith Radio litigation.  The different court decisions in this litigation seemed to firmly establish an anti-trust reading. First, in a judgment rejecting a ‘void for vagueness’ claim against the 1916 Act, the district court clearly considered the Act as an antitrust statute when stating that ‘the Antidumping Act of 1916, like § 3 of the Robinson-Patman Act, is directed only at conduct designed to destroy competition [..]”. In a subsequent judgment in the same case, the court came to the conclusion that the legislative history of the 1916 Act reveals that it was intended to complement the antitrust laws by imposing on importers substantially the same legal strictures relating to price discrimination as those which had already been imposed on domestic businesses by the Clayton Antitrust Act of 1914.  Therefore the court used antitrust standards to decide various issues in the litigation. On appeal, the Third circuit upheld the antitrust reading of the 1916 Act, stating that “the primary aim of the 1916 was to prohibit anticompetitive pricing”.  The court held that the 1916 Act requires a specific predatory intent. This led the court of appeals inter alia to apply the same predatory pricing standards to the 1916 Act claim as to the Sherman act predatory pricing claims before it. The Supreme Court reversed this decision insofar it dealt with the Sherman Act claims on the basis that the court had not applied the correct predatory pricing standard. On remand, the court of appeals reconsidered also its 1916 Act rulings and reaffirmed its holding on the parallellism between predatory pricing claims under the Sherman Act and claims under the 1916 Act: “[since] the Sherman Act conspiracy charge failed in the Supreme Court, our holding on the Antidumping Act conspiracy claim must fail with it”. 

Legal commentators seem to agree on this reading of the court decisions in this litigation, see e.g.: Jeffrey L. Kessler, The Antidumping Act of 1916: Antitrust Analogue or Anathema, 56 ANTITRUST L.J. 485 (1987); Note, Rethinking the 1916 Antidumping Act, 110 HARV.L.REV. 1555 (1997); David Rushford, supra note 5; Diane M. Keppler, supra note 6, 293.

Zenith Radio Corp. v. Matsushita Electric Industrial Co., Ltd., 402 F.Supp. 244 (E.D. Pa. 1975)

Zenith Radio Corp. v. Matsushita Electric Industrial Co., Ltd., 494 F.Supp. 1190 (E.D. Pa. 1980), at 1197.

The Court held for example that in order to give rise to a claim under the 1916 the competing products must be ‘like in grade and quality and grade’ as required under Section 2 of the Clayton Act. Id..

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)

In re Japanese Elec. Prods. Antitrust Litig., 807 F.2d. 44 (3rd. Cir. 1986); quotation: id. at 49

In Helmac, the district court explicitly considered the 1916 Act as having a hybrid nature. It pointed to some portions of the Zenith Radio court decisions supporting this view. Recognizing the hybrid character of the Act, the court decided one the one hand that the limitation period to be applied to actions brought under the 1916 Act was to be the same as the one for actions under the Clayton Act, but on the other hand refused to apply predatory pricing standards from antitrust law. 

Helmac Products Corp. v. Roth (Plastics) Corp., 814 F. Supp. 560 (E.D. Mich. 1992).

The antitrust approach was explicitly rejected in recent Geneva Steel and Wheeling Pittsburgh cases. The district court in Geneva Steel concluded that by its express language, the 1916 Act is not limited only to antitrust injury or predatory price discrimination. In addition to its antitrust prohibitions, the Act has a protectionist component that prohibits dumping designed to injure the domestic industry.   Therefore it was not necessary to allege antitrust injury or predatory intent to state a claim under the 1916 Act. The district court in Wheeling Pittsburgh  came to the same conclusion^.

Geneva Steel Company v. Ranger Steel Supply Corp., 980 F.Supp. 1209 (D. Utah 1997), at 1215.

Wheeling-Pittsburgh Steel Corporation v. Mitsui Co., 35 F.Supp.2d. 597 (S.D. Ohio 1999).

Dealing with a different issue on appeal against this decision, the court of appeals for the 3^rd circuit considered, without further argumentation, that it must interpret the 1916 Act in conjunction  with all subsequent anti-dumping legislation, in particular Title VII of the Tariff Act of 1930, which addresses unfair dumping practices, because where two or more statutes deal with the same subject, they are to be read in pari materia and harmonized, if possible.Wheeling-Pittsburgh Steel Corp. v. Mitsui & Co., 221 F.3d 924, at 927.

Legal commentators have expressed equally divergent views over the years. Some authors read the Act as a pure antitrust statute, whereas others stressed the hybrid nature of the 1916 Act.  The most recent commentaries almost unanimously regard the Act as a trade law.   

See eg. Joseph G. Sidak, A Framework for Administering the 1916 Antidumping Act: Lessons from Antitrust Economics, 18 STANF. INT’L L.J. 377 (1982) (warning however for negative implications on social welfare to be expected from future applications of the 1916 Act) Jeffrey L. Kessler, supra note 25 (arguing that the 1916 Act is an antitrust statute aiming at international predatory price discrimination and warning that certain amendments proposed in the 1980’s would turn the Act into a protectionist statute in open conflict with antitrust policy).

See eg. Mark A. Neville jr., supra note 13 (in favor of a careful redefinition of the 1916 Act and the vestiture of exclusive jurisdiction for 1916 Act claims with the US Court of International Trade).

See Adam C. Hawkins, Antidumping beyond the GATT 1994: Supporting international enactment of legislation providing supplemental remedies, 10 IND. INT’L.&COMP.L.REV. 149 (1999), Diane M. Keppler, supra note 6, Note, Rethinking the 1916 Antidumping Act, 110 HARV.L.REV1555 (1997), . Contra: David Rushford, supra note 5.

Protectionist sentiments and discomfort with the limitations of administrative anti-dumping law, lead in the 1980’s to some legislative proposals to amend the 1916 Act. The Act’s provision for a private right of action seemed promising to address these concerns.  Most of the proposals tended to lower the burden of proof, by abandoning intent requirements or creating presumptions and some added the possibility of injunctive relief (import prohibition). None of these proposed amendments were adopted.

See for a brief overview of some critiques made from the viewpoint of US industry on the functioning of administrative anti-dumping law in the US: Note, Rethinking the 1916 Antidumping Act, 110 Harv.L.Rev. 1555 (1997), 1555.

See already the proposals made in that sense by Kermit W. Almstedt, supra note 5, 770-780 and Mark A. Neville jr., supra note 13, at 575.

For discussion on some of these proposals see e.g: Roger P. Alford, supra note 23, at 715-719, Jeffrey L. Kessler, supra note 25, 494-496.

The viewpoint of the US government has not been very clear in recent years. In their 1995 Antitrust Guidebook, the US Department of Justice and the Federal Trade Commission stated that the 1916 Act is not an antitrust statute, but nevertheless notes that the Act “is closely related to the antitrust rules regarding predation”. In 1997, Charlene Barshefsky, then U.S. Trade Representative, first stated that the 1916 Act was ‘grandfathered’ under the Uruguay Rounds, which implies she believed the Act was an anti-dumping law subject to the WTO discipline, but she later retracted this statement. 

Diane M. Keppler, supra note 6, at 294-295.

B. From Geneva Steel to Geneva: Procedural background to the case
The turn that judicial interpretation of the 1916 Act took in the Geneva Steel and Wheeling-Pittsburgh dispute raised concerns that the 1916 Act could become in instrument with ‘teeth’ to penalize and dissuade low-pricing importers.
That these concerns were translated into a dispute about the compatibility of the 1916 Act with WTO obligations did not come as a surprise.  
^The ^Geneva ^Steel ^case, ^which ^was ^directed ^against ^two ^importers ^of ^European ^steel, ^lead ^to ^a ^complaint ^lodged ^by ^a ^European ^steel ^federation ^under ^the ^Trade ^Barrier ^Regulation. ^After ^investigation, ^the ^European ^Commission ^decided ^that ^the ^1916 ^Act ^violated ^several ^WTO/GATT ^provisions. ^On ^June ^4, ^1998 ^the ^EC ^requested ^consultations ^with ^the ^US ^‘regarding ^the ^failure ^of ^the ^United ^States ^to ^repeal ^the ^1916 ^Act’ ^pursuant ^to ^the ^WTO ^rules ^on ^dispute ^settlement. ^After ^the ^failure ^of ^these ^consultations, ^the ^EC ^requested ^on ^1 ^February ^1999 ^the ^establishment ^of ^a ^panel ^to ^review ^its ^claims ^that ^the ^1916 ^Act ^violated 

Council Regulation (EC) No. 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, in particular those established under the auspices of the World Trade Organization, O.J. L. 349, 31 December 1994, 71, as amended by Regulation (EC) No. 356/95, O.J. L 41, 23 February 1995, 3.

See Commission decision No. 98/277/EC of 16 April 1998, OJ L 126, 28 April 1998, 36.

See particular: article XX:1 GATT 1994, article 4 Dispute Settlement Understanding and article 17.2 Anti-Dumping Agreement..

^- ^art. ^XVI:4 ^of ^the ^Agreement ^Establishing ^the ^WTO, 
^- ^art. ^VI:1 ^and ^VI:2 ^of ^the ^GATT ^1994 ^and ^art. ^1, ^2.1, ^2.2, ^3, ^4 ^and ^5 ^of ^the ^Anti-Dumping ^Agreement
^- ^or ^in ^the ^alternative, ^that ^the ^1916 ^Act ^was ^in ^breach ^of ^art. ^III:4 ^GATT. 
^India, ^Japan ^and ^Mexico ^reserved ^third ^party ^rights. ^The ^panel ^was ^established ^on ^April ^1 ^1999 ^and ^issued ^its ^report ^on ^February ^14, ^2000.

See EC Panel report, para. 1.1-1.7.

^In ^February ^1999. ^Japan ^also ^decided ^to ^have ^recourse ^to ^the ^WTO ^dispute ^settlement ^system. ^Japan’s ^decision ^was ^triggered ^by ^the ^Wheeling-Pittsburgh ^case, ^which ^was ^directed ^against ^nine ^foreign ^companies, ^among ^which ^three ^importers ^of ^Japanese ^steel. ^On ^June ^3, ^after ^consultations ^in ^March ^1999 ^had ^failed, ^Japan ^requested ^the ^establishment ^of ^a ^panel ^to ^review ^its ^claims ^that ^the ^1916 ^Act ^was ^inconsistent ^with:

See X, WTO sets up panel over U.S. antidumping act, JAPAN WEEKLY MONITOR, 2 August 1999; X,  Steel dispute between Japan, U.S. to shift to WTO, JAPAN WEEKLY MONITOR, 25 October 1999.

^- ^Article ^III:4 ^of ^the ^GATT ^1994; 
^- ^Article ^VI ^of ^the ^GATT ^1994 ^and ^the ^Anti‑Dumping ^Agreement, ^in ^particular ^Article ^VI:2 ^of ^the ^GATT ^1994 ^and ^Article ^18.1 ^of ^the ^Anti‑Dumping ^Agreement ^as ^well ^as ^Articles ^1, ^2, ^3, ^4, ^5, ^9 ^and ^11 ^of ^the ^Anti‑Dumping ^Agreement
^-with ^Article ^XI ^of ^the ^GATT ^1994; 
^-and ^with ^Article ^XVI:4 ^of ^the ^Marrakesh ^Agreement ^Establishing ^the ^World ^Trade ^Organization ^(hereinafter: ^WTO ^Agreement) ^and ^Article ^18.4 ^of ^the ^Anti‑Dumping ^Agreement.
The panel was established on July 26, 1999. The EC and India reserved third party rights. The panel report was issued on March 31, 2000.
In both cases, the panel found that the 1916 Act substantially violated several provisions the  WTO anti-dumping Provisions. The United States appealed against these substantial and some preliminary findings made by both panels on May 29, 2000. Unlike what had happened on the panel level, the appeals were joined and heard by one Division of the AB. On June 13 2000 the EC and Japan also filed a joint appeal. The AB issued its report on August 28 2000. The Dispute Settlement Body (the DSB) adopted the report on September 26, 2000.
On October 23 2000, the United States informed the DSB that it would implement the recommendations and rulings of the DSB, noting that it would need a ‘reasonable period of time’ to do so and that it would consult on the matter with the EC and Japan. Such consultations apparently failed and on November 17 the EC and Japan requested that a reasonable period for implementation be determined by binding arbitration (see art. 21.3 (c) DSU).  On February 28 2001, the arbitrator decided that the reasonable period would be ten months after the adoption of the AB report, thus expiring on July 26, 2001. On July 24, 2001, the United States Trade Representative reached an agreement with the Dispute Settlement Body to have the period extended to the end of the ongoing session of the U.S. Congress or December 31, 2001, whichever date came first. On December 20 2001 a bill was introduced in the House of Congress to repeal the 1916 Act. In the course of January 2002, both the EC and Japan sought recourse to art. 22 DSU (suspension of concessions), because the US had failed to implement the recommendations of the Panel and Appellate Body within the reasonable period of time set.

See: WT/DSB/M/91, 30 November 2000, para. 55.

See Award of the Arbitrator A.V Ganesan, WT/DS136/11 and WT/DS162/14, 28 February 2001, para. 45..

See Annual Report of the Dispute Settlement Body, WT/DSB/26, 12 October 2001, 16-17

See: X, Administration faces active year in trade legislation, negotiations, INSIDE U.S. TRADE, 4 January 2002, 5.

Update on WTO dispute settlement cases, WT/DS/OV/4, 6 February 2002, 113.

III. 	Overview of the reports

A. 	The panel reports
1. 	Procedural and other preliminary issues 

(a) No ‘enhanced’ third party rights
The EC and Japan reserved third party rights in each other’s case. Both Japan and the EU requested furthermore to be granted additional rights, which would allow them full participation in the proceedings. They referred to the grant of such ‘enhanced’ third party rights in the Hormones-case. 

EC panel report, para. 6.29 et seq. and Japan panel report, para. 6.29 et seq. EC requested the right to be present throughout both substantive meetings of the Panel and to make a submission on each occasion, whereas Japan requested to receive all necessary documents - i.e. submission and written statements of the parties - and a right to attend all sessions of the second substantive meeting of the panel.

Appellate Body Report on European Communities - Measures Concerning Meat and Meat Products, adopted on 13 February 1998, WT/DS26/R (complaint by the United States), WT/DS48/R.

The Panel noted that although the DSU does not expressly provide for these enhanced rights, nothing in the DSU prohibits panels from granting such rights. It recalled that in the Hormones case, the AB confirmed that granting such rights was within the discretion of the Panel under art. 12.1 DSU. On the other hand, it noted that the DSU differentiates in terms of rights between main parties and third parties and that this principle should be adhered to in order to respect the spirit of the DSU. The similarity between the Hormones case and this case, namely the review of separate complaints addressing the same subject matter by different panels of the same composition, was not sufficient to warrant the grant of additional third party rights here.

Id., para. 143.

Of primary importance was the decision in that case to deliberate concurrently in both cases, which in turn was premised on particular circumstances, such as the highly technical and factually intensive nature of the case, the fact that the panels had decided to hold one single meeting with the parties and the experts consulted pursuant to art. 11.2 SPS.

(b) Methodology for examination of the 1916 Act and its surroundings
In these cases a piece of domestic legislation was contested as such, not a particular instance of application. Furthermore, this law had been in existence for over eighty years. It was enacted in a particular historical, cultural, legal and economic context and has over the years been applied – be it not that often – by a number of courts and commented upon by government officials.  The relative relevance of these different sources – text, legislative history, case law and other pieces of information – in assessing the 1916 Act was highly contested.  Therefore, a crucial methodological question the panel had to address anew was how to address domestic legislation when reviewing its compatibility with the WTO agreements. 
First, the Panel referred to its duty under 11 DSU to make an ‘objective assessment of the facts before it’. Furthermore the panel considered that both art. 3.2 DSU and the practice of the AB make it clear that it should develop its approach on the basis of that of international courts in similar circumstances.

EC panel report, para. 6.39 and Japan panel report, para. 6.39.

In general the Panel held that the understanding of a law under review must start with an analysis of its terms. Even if the text were found clear on its face, it would nevertheless have to have regard to the interpretation by US courts and other US authorities. Otherwise it might develop an understanding of the law different from the way it is actually understood and applied by the US authorities, which would be contrary to its duty under art. 11 DSU. Referring to the AB’s statements in its report in India – Patents (US), it further held that it needed not to accept at face value the characterization that a respondent Member attaches to its law. Rather, a panel may analyze the operation of the domestic legislation and determine whether the description of the functioning of the law, as made by the respondent Member is consistent with the legal structure of that Member.  

EC panel report, para. 6.47 and Japan panel report, para. 6.47.

Appellate Body Report on India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R (complaint by US), adopted 16 January 1998, para. 65.

Related to this, a little further in the report the panel recalled with reference to panel report on EEC – Regulation on Imports of Parts and Components (adopted on 16 may 1990, BISD 37S/132, para. 5.6-5.7). that the mere description of or categorization of a measure by a Member should not be considered as a decisive factor for the application of the WTO Agreement to that measure. Such categorizations or descriptions may be valid under US law but not necessarily under WTO law. Therefore, it would not accept at face value the use of terms such as ‘anti-dumping’ , ‘antitrust’ or ‘predatory pricing’ in court decisions, administrative documents or in academic works, when those terms are not further substantiated. (EC panel report, para. 6.58 and Japan panel report, para. 6.58).

EC panel report, para. 6.48-6.50 and Japan panel report, para. 6.48-6.50.

The Panel went on to determine how it would consider the case law pertaining to the 1916 Act on which the Parties relied. Referring to ICJ and PCIJ jurisprudence and the absence of any prohibition to do so in the DSU or the AB’s practice, it considered that it was entitled to weigh the jurisprudence of the US courts. The Panel emphasized that this would not require it to develop its own interpretation of US law, but simply to select among the relevant judgments the interpretation most in conformity with the US law as necessary in order to resolve the matter before it.  It would respect the formal hierarchy of court decisions in the US federal system to the extent that applicable. Moreover, it should also determine which argumentation is more convincing, not only on the basis of the quality of the reasoning but also on what the panel would perceive to be in line with dominant interpretation. If the evidence were to be found in equipoise, the Panel would follow the interpretation that favors the party against which the claim was made, considering that the claimant did not convincingly support its claim. 

In particular ICJ, Elletronica Sicula S.p.A (ELSI) (United States of America v. Italy), ICJ Reports 1989, 47, para. 62: “Where the determination of a question of municipal law is essential to the Court’s decision in a case, the Court will have to weigh the jurisprudence of the municipal courts, and ‘If this is uncertain or divided it will rest with the Court to select the interpretation which it considers most in conformity with the law;’ (PCIJ, Brazilian Loans, Series Am Nos. 20/21, p. 124)”.

Given the absence of any Supreme Court decision specifically addressing the interpretation of the 1916 Act, it would attach most value to circuit court of appeals decisions followed by district court decisions. The panel noted that this approach was insufficient when comparing decisions from different districts, because the hierarchy of interpretations only exists within the same circuit. The panel did not answer the question, but considered that it would first ascertain very carefully the comparability of the different decisions, before giving preference to one interpretation rather than another. EC panel report, para. 6.55 and Furthermore, it would allocate more weight to a final judgment than to an interim or ‘interlocutory’ decision. EC panel report, para. 6.56  and Japan panel report, para. 6. 58.

Id.; the panel emphasized that this was consistent with US court practice that if a precedent is not binding, the weight afforded to it will depend on the persuasive value of the reasoning in the decision.

EC panel report, para. 6.57 and Japan panel report, para. 6.57.

Next the Panel turned to the historical context of the 1916 Act. It considered that it should pay attention to the legislative history as US courts do.  The Panel found it also appropriate to have regard to the political and economic context as it emerges from public declarations of the time or studies of the period. When considering the historical evidence, the Panel noted it should not lose sight of the degree of development of antitrust and trade law concepts at the time of the enactment of the 1916 Act.

EC panel report, para. 6.58 and Japan panel report, para. 6.58. Given the importance attached by US courts to this legislative history, the Panel also considered that terms used in 1916 would have to be understood in their historical and not in their current meaning, unless it would be shown that the US courts have done otherwise.

EC panel report, para. 6. 59  and Japan panel report, para. 6. 59.

The parties had also relied on certain statements made by public officials. In the EC case, the Panel first considered whether these statements could actually generate legal obligations for the United States. Applying the criteria developed by the ICJ, it found that they could not. The Panel also held that these statements could not be regarded as admissions of fact.  For these reasons, the Panel determined that it should use these statements only insofar as they confirm other evidence. The Panel treated in the same way certain other documents relied upon by the Parties, such as a the 1995 Antitrust Enforcement Guidelines For International Operations issued by the US Department of Justice and the Federal Trade Commission.

The Panel referred in particular to ICJ, Nuclear Tests Case, judgments of 20 December 1974,  ICJ Reports 1974, at . 253 and 457.

EC panel report, para. 6.62.

EC panel report, para. 6. 63 and Japan panel report, para. 6.61.

EC panel report, para. 6. 64 and Japan panel report, para. 6.62.

EC panel report, para. 6. 65 and Japan panel report, para. 6.63.

(c). Relationship between art. III:4 and VI GATT
Both the EC and Japan had put forward claims based on art. VI and art. III:4 GATT. 

The EC had made the claim based on art. III:4 in the alternative, i.e. if the panel were to find that the 1916 Act was wholly or partly consistent with art. VI (see EC panel report, para. 6.67). Japan made the claims concurrently.

The Panel thus had to decide whether to begin its analysis with article VI or art III:4. 
The Panel considered that art. III and VI are based on different premises. Art. III operates on the basis of a comparison between the treatment granted to domestic and imported products respectively, once the latter have been cleared through customs; it therefore applies to internal measures, irrespective of the objective of the measures. In contrast, the basis for applicability of art. VI to domestic legislation is not the type of measures, since other practices than dumping may lead to the imposition of duties, but the type of trade practice at the origin of the measure.  
Then the Panel referred to the general principle of international law, recognized e.g. by the Permanent Court of International justice in the Serbian Loans case (1929)  and recalled by the AB in the Banana-case, that when applying a body of norms to a given factual situation, one should consider the situation under the norm which most specifically addresses it. The Panel noted that the parties agreed that the 1916 Act addresses transnational price discrimination and that dumping as addressed by art. VI GATT is a form of transnational price discrimination. The terms of art. III:4 are less specific than those of art. VI when it comes to the notion of transnational price discrimination. Therefore the Panel decided to consider the claims based on art. VI first. 

PCIJ, Series A, No.20/21, at 30

Appellate Body report on European Communities – Bananas, WT/DS27/AB/R, adopted on 25 September 1997, para. 204.

Japan report, para. 6.75.

(d) Relationship between art. VI GATT and the Anti-dumping Agreement
In the Japan case, the Panel also explicitly determined how it should read the relationship between art. VI GATT and the Anti-Dumping Agreement.  It concluded that it could make findings under the provisions of art. VI GATT, without at the same time having to make findings under the provisions of the Anti-Dumping Agreement, and vice versa. However, art. VI GATT and the Anti-Dumping Agreement represent an inseparable package of rights and disciplines. This requires interpreting each of the provisions invoked in conjunction with the other relevant provisions of this ‘inseparable package’.

Japan panel report, para-6.92-6.94.

(e) Jurisdiction to hear claims against the 1916 Act as such 
The US objected in both cases against the jurisdiction of the panel to hear claims directed against the 1916 Act as such. It argued that art. 17.4 Anti-Dumping Agreement as interpreted in certain paragraphs of the AB’s report in the Guatemala – Cement case interpreting this provision, restrict the Panel’s jurisdiction to claims against the specific antidumping actions enumerated in that provision. 

Appellate Body report on Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico, adopted on 25 November 1998, WT/DS60/AB/R.

The panel in both cases first considered that art. 17 does not replace the DSU as a coherent system of dispute settlement for the Anti-Dumping Agreement. Further, art. 17.2 and 17.3 do not limit the scope of possible consultations under the Anti-Dumping Agreement. Turning to art. 17.4, it found nothing in that provision expressly limiting the scope of application of the DSU except in relation to the specific issue of Member’s anti-dumping actions. The Panel found confirmation of this reading in art. 18.4 Anti-Dumping Agreement. The Panel read this article as requiring the continuous conformity of the Members’ anti-dumping legislations as of the date of entry into force of the WTO Agreement, whether that legislation is applied or not. If dispute settlement could be initiated in relation to some specific anti-dumping action only, i.e. if the conformity of a domestic anti-dumping law could only be reviewed when that law is applied the provisions of article 18.4 would be deprived of their meaning and useful effect. 

EC panel report, para. 5.21 and Japan panel report, para. 6.85, referring to para. 67 of the AB report in Guatemala – Cement.

Art. 18.4 reads: “Each Member shall take all necessary steps of a general or particular character to ensure no later than the date of entry into force of the wto agreement the conformity of its laws, regulations and administrative procedures with the provision of this Agreement as they may apply for the Member in question”.

The AB report in the Guatemala – Cement case did not contradict but confirm this reading. The AB’s holding that a specific anti-dumping action must be identified as part of the matter referred to the panel was clearly limited to disputes relating to the initiation and conduct of anti-dumping investigations. 

See para. 79 of the AB report in Guatemala – Cement (supra note 77) stating that: “we find that in disputes under the Antidumping Agreement relating to the initiation and conduct of anti-dumping investigations, a definitive anti-dumping duty, the acceptance of a price undertaking or a provisional measure must be identified as part of the matter referred to the DSB pursuant to the provisions of Article 17.4 of the Antidumping Agreement and art. 6.2 DSU” (emphasis added by the panel).

Finally, the panels held that its finding that art. 17.4 did not preclude it from reviewing anti-dumping laws as such applied a fortiori with respect to art. VI GATT.
2. 	Applicability of art. VI GATT 1994 

The views of the Parties as to applicability were diametrically opposed. Japan and the EC argued, in short, that art. VI was applicable to the 1916 Act because this act addresses ‘dumping’ as defined in art. VI:1 GATT 1994. The US contested the applicability of art. VI GATT. It argued that art. VI only addresses actions taken for the purpose of offsetting or preventing injurious dumping, by imposing anti-dumping duties. The 1916 Act was not such a law, because it only addresses ‘a specific form of price discrimination with predatory intent’ and does not impose anti-dumping duties, but damages. For the US, the EC and Japan’s interpretation would mean that the GATT anti-dumping provisions govern any law based upon the concept of international price discrimination regardless of any other elements required to be proven; the text of neither art. VI GATT nor the Anti-dumping Agreement provided support for such a broad interpretation.  

Japan Panel Report para. 6.109.

EC panel report, para. 6.92.

EC panel report, para. 6.93 and Japan panel report, para.6.110 .

The Panel first assessed the scope of art. VI.  It concluded that the key to the applicability of art. VI to the 1916 Act is whether that law objectively addresses ‘dumping’ within the meaning of that article. Although art. VI provides that ‘dumping’ can be subject to sanctions only if it causes material injury, this does not affect the fact that, on the basis of the structure of art. VI GATT, dumping within the meaning of the definition of art. VI:1 has to be found in the first place. For ‘dumping’ to exist the following conditions must be met: (i) products must be imported and cleared through customs (introduction into the commerce) (ii) those imported products must be priced lower than their ‘normal value’ as further defined in that article. 

EC Panel report, para. 6.117 and Japan Panel report, para. 6.143.

EC Panel report, para. 6.104 .

EC Panel report, para. 6.103 and Japan Panel report, para. 6.117.

The Panel then considered whether the 1916 Act was such a law. In accordance with the methodological approach to domestic law it had carved out as a preliminary issue, the Panel first addressed the text of the 1916 Act. It found that the price discrimination test in the Act was sufficiently similar to the art. VI:1 ‘dumping’ definition. On the US objection that the test in the 1916 Act has additional requirements compared with art. VI, the panel responded that conditions, which make the establishment of dumping more difficult, do not make the price discrimination test fall outside the scope of art. VI^. The Panel further found that the terms of the ‘dumping’ definition were sufficiently broad to encompass certain other textual differences. 

EC Panel report, para. 6.109 and Japan Panel report, para. 6.123.

EC Panel report, para. 6.111 and Japan Panel report, para. 6.121.

The Panel further considered that the specific intent requirement of the 1916 Act did not affect the basic objective requirement of price discrimination.  In the same line of reasoning, the Panels also considered that it did not matter that the 1916 Act may address effects of ‘dumping’, different from those enumerated in art. VI. Also, the Panels rejected the US argument that the existence of an antitrust objective in a law addressing cross-border price discrimination removed it from the scope of art. VI. Equally irrelevant was the circumstance that the 1916 Act does not impose anti-dumping duties. 

EC Panel report, para. 6.112 and Japan Panel report para. 6.130.

EC panel report para. 131-132 and Japan panel report, para. 6.136-37. First, it found no indication that the terms of the price discrimination test were understood differently at the time of its enactment. Moreover, even though the 1916 Act might pursue antitrust objectives, it found no express indication in the legislative history that price discrimination in the 1916 Act as such should be understood in any particular antitrust context. That the 1916 Act was presented at the time of its enactment as ‘supplementing’ or ‘complementing’ the existing antitrust laws did not mean necessarily that it had to be interpreted as an antitrust law, because at the time the Act was enacted, the current distinction between anti-dumping and antitrust was not yet clearly made, both being part of a single notion of ‘unfair competition’.

As a next step in its analysis, the Panel considered whether the historical context and legislative history of the 1916 Act contained evidence that it should amend its understanding of the price discrimination test of the 1916 Act, based on its text alone. The Panels considered that this was not the case.  As a last step in its analysis, the Panel considered the impact of the US case law related to the 1916 Act. As a preliminary remark, the Panel pointed out that it did not consider the classification of the Act by US courts of great importance and considered that it would only have regard to the case law insofar as it addressed the price discrimination test. After reviewing all the case law relied on by the Parties, it found nothing in the case law warranting amendment of its understanding of the price discrimination test. 

EC Panel report, para. 6.119-132 and Japan Panel report, para. 6.141-151.

EC Panel report, para. 6.133-161 and Japan Panel report, para. 6.158-80.

Thus the Panel had arrived at the conclusion that art. VI GATT was applicable to the 1916 Act. According to the Panel this also implied applicability of the Anti-Dumping Agreement.  
Then the Panel considered the final argument made by the US that the Panel’s interpretation of the scope of art. VI GATT was so broad that it would apply to all antitrust laws when such laws address situations of transnational price discrimination. It first reminded that its mandate was to review the conformity of the 1916 Act with the WTO Agreement, not to address the general issue of the relationship between trade law and antitrust law.   Furthermore, the panel was not convinced that its findings would have the effect the US referred to. Transnational price discrimination of the type covered by the ‘dumping’ definition of art. VI:1 was only one narrowly defined type of price discrimination that may be considered by antitrust law and in particular did not cover purely domestic price discrimination. Moreover, it was the understanding of the Panel that price discrimination covered by art. VI:1 would not be sufficient as such to form the basis of a claim of violation of antitrust law. According to the panel, under antitrust law it was necessary to prove other specific practices (such as price conspiracy or abuse of a dominant market position), of which international price discrimination may at most constitute supporting evidence. 

EC panel report, para. 6. 170 and Japan panel report, para. 6. 194

EC panel report, para. 6.171 and Japan panel report, para. 6. 195

EC panel report, para. 6.172-6.175 and Japan panel report, para. 6.196-6.199.

3. 	Application of the mandatory vs. discretionary law distinction

In relation to their review of the question of applicability of art. VI GATT to the 1916 Act, the Panels in both cases addressed a defense invoked by the United States, based on the distinction between mandatory and discretionary legislation.  The United States argued that the 1916 Act was non-mandatory or discretionary legislation within the meaning of the GATT/WTO practice, because (i) with respect to both civil and criminal proceedings, US courts have interpreted in the past and/or could in the future interpret the 1916 Act in a manner consistent with the WTO obligations of the United States and (ii) the US Department of Justice has discretion to initiate or not criminal proceedings under the 1916 Act. Since the 1916 Act thus did not mandate WTO-inconsistent action, it cannot itself be WTO-inconsistent, according to the US. 

EC panel report, para. 6.81-91 and 6.165-6.169; Japan Panel Report, para. 6.95-6.107 and 6.185-6.192.

The Panel first held that it would address these arguments not as questions of admissibility of the claims raised by the EC and Japan, but as part of its review of the claims under art. VI and if necessary art. III:4^. 

EC panel report, para. 6.82 and Japan panel report, para. 6.96. In a footnote under these paragraphs, the Panel pointed out that this approach was consistent with the practice of other panels, which addressed the distinction. It is somewhat incoherent of the Panel to then further discuss this issue during its review of the applicability of art. VI to the 1916 Act, instead of addressing it under its conformity review (see further infra).

The Panel in both cases considered the first prong of the United States’ argument to be merely a question of assessing the current meaning of the law instead of one drawing on the mandatory/non-mandatory distinction. Regarding this aspect, the US had relied heavily on the Panel report in United States – Tobacco case, where the panel allegedly had found that a law did not mandate GATT-inconsistent action where the language of that law was susceptible of a range of meaning, including meanings permitting GATT-consistent action. According to the Panel the only similarity between that case and the ones at hand was that in both cases the question interpretation of a possibly ambiguous term was at issue. In the US-Tobacco-case, however, the ambiguous term at issue had not yet been applied, contrary to what was the case for the 1916 Act. In such a case the possibility of future WTO consistent application is relevant. It makes the burden of proof for the claimant more demanding, in that he must also prove intended future inconsistent application for its claim to succeed. In the cases at hand such a more extensive burden of proof did not apply.

United States -  Measures Affecting the Importation, Internal Sale and Use of Tobacco, panel report adopted on 4 October 1994, BISD 41S/131; for the full exposition of the US argument in this respect: see EC panel report, para. 3.30.

EC Panel report, para. 6.86-88 and Japan Panel report, 6.100-6.103.

EC Panel report, para. 6.88 and Japan Panel report, para. 6.103

According to the Panel, the mandatory/non-mandatory distinction was more appropriately related to the second prong of the US argument.  The answer centered in both cases on the relationship between the mandatory/non-mandatory distinction in GATT/WTO practice and art. 18.4 Anti-dumping Agreement which requires Members to bring their anti-dumping laws into conformity with the Anti-dumping Agreement as of the date of entry into force of the WTO Agreement. In both cases, the Panel referred to the EC- Audio Cassettes  cases in which the panel had affirmed its mandate under art. 16.6 Tokyo Round Anti-Dumping Agreement to review as such Member’s legislation to which these agreements applied. The latter provision was the direct predecessor of and nearly identical in wording to art. 18.4 Anti-Dumping Agreement. Therefore the Panel considered that the reasoning in the EC – Audio Cassettes report should be applied in the cases at hand. Paraphrasing the panel in that case, it held that a different interpretation of art. 18.4 would undermine the obligations contained in that article and would be contrary to the general principle of useful effect by making all the disciplines of the Anti-Dumping Agreement unenforcible, as soon as a Member would claim that the investigating authority has discretion to initiate or not an anti-dumping investigation. 

EC panel report para. 6.83 and 6.90 and Japan panel report para. 6.97 and 6.105.

Finding that the answer to the argument required a more elaborate review of the case law and treaty provisions invoked by the Panels, it decided on grounds of judicial economy to postpone this review until it had made a finding on the applicability of article VI, see EC Panel report para. 6.91 and Japan panel report, para. 6.107. For the sake of clarity we do not follow this order here.

Cf. the unadopted panel report on EC – Anti-Dumping Duties on Audio Tapes in Cassettes Originating in Japan, ADP 136, para. 362.

EC panel report, para. 6.167 and Japan report, para. 6.189-6.190.

In the Japan case, the Panel added to this a more formal rationale, based on general principles of hierarchy of norms of international law. The notion ‘mandatory/non-mandatory legislation’ is a ‘generally recognized concept of international law’ – maybe a rule of international customary law - whereas art. 18.4 Anti-dumping Agreement is a treaty provision. Both norms conflicting, the treaty provision has to prevail. The Japan Panel concluded more boldly than it had done in the EC case: ‘to the extent that art. 18.4 requires the conformity of the 1916 Act with the Anti-Dumping Agreement as of the date of entry into force of the WTO Agreement for the United States the notion of mandatory/non-mandatory legislation is no longer relevant in determining whether the Panel can or cannot review the conformity of the 1916 Act with the Anti-Dumping Agreement’.  

Japan panel report, para. 6.189. As to the hierarchy between customary rules and treaty rules it referred to the ICJ Judgment,  Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), ICJ Reports 1986, p. 137, para. 274.

Id.

Accordingly, in both cases the Panel rejected the United States’ defense.
 4. 	Violations of the anti-dumping provisions

(a) The injury requirements of art. VI:1 GATT
Art. VI:1 GATT provides that dumping is to be condemned if it causes or threatens material injury ‘to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry’. Despite the strong resemblance of this formula with the first part of the intent requirement of the 1916 Act, the Panel found that the 1916 Act violated art. VI:1 because the 1916 Act did not provide for the actual injury requirements set out in art. VI:1. 

EC Panel report, para. 6.177-180 and Japan Panel report, para. 6.252-253.

(b) The type of anti-dumping measures allowed under the GATT 1994
Both the EU and Japan claimed that the 1916 Act violated art. VI:2 GATT 1994 and art. 18.1 Anti-Dumping Agreement because it provides for other sanctions than anti-dumping duties . The US disagreed and moreover reiterated its view that art. VI only governed laws and measures that address dumping through the imposition of anti-dumping duties. 

Art. VI:2 GATT 1994 provides: “ In order to offset or prevent dumping, a contracting party may levy on any dumped product an anti-dumping duty not greater than the margin of dumping in respect of such product.”

Art. 18.1 Anti-Dumping Agreement reads: “No specific action against dumping of exports from another Member can be taken except in accordance with the provisions of GATT 1994, as interpreted by this agreement.” Footnote 24 to art. 18.1 reads as follows: “This is not intended to preclude action under other relevant provisions of GATT 1994, as appropriate”.

To be precisely, only Japan made a claim based on both provisions in its request for the establishment of a panel. The EC had only mentioned art. VI:2 in its request, but referred to art. 18.1 and art. 1 Anti-dumping Agreement in later submissions. These later references were made too late for them to be considered as a claim and the EC confirmed that it had only intended them as arguments in support of their claim on the basis of art. VI:1. The Panel rejected the US objection that by allowing these later references as argument, it would help the EC in ‘curing a defective claim’.  It noted that other panels had found it appropriate to rely on provisions mentioned  by parties as arguments in their analysis of the context of a given provision. Doing so was especially appropriate where, as in the current case, the provision on which the claim was based could, on its own, already be interpreted as supporting the claim (see infra, PDK). In that hypothesis, the  Panel would further have to consider the context of this provision, among which relevant provisions of the Anti-Dumping Agreement. See EC Panel report, para. 6.21-26 and 6.193.

The Panel started its analysis with a review of the ordinary meaning of the words of art. VI:2 first sentence GATT. The US argued that the use of the term ‘may’ in that provision showed that Member had the choice to impose other measures than anti-dumping duties. The panel conceded that without the addition of the word ‘only’ the term ‘may’ could be read as merely giving a choice between duties and other measures. However, such a reading disregarded the immediate context of the term: anti-dumping duties ‘may be imposed in order to offset dumping’. According to the panel, this indicated that the purpose of anti-dumping couldn’t be to impose punitive measures. This was enough for the panel to conclude that the ordinary meaning of the words of art. VI:2 , first sentence support the view that the anti-dumping duties are the only type of measures allowed under art. VI GATT. 

EC Panel report, para. 6.187-189 and Japan Panel report, para. 6.210-212.

The panel in both cases found this interpretation confirmed by the context of art. VI, in particular art. 1 and 18.1 Anti-Dumping Agreement. 
According to the panel art. 18.1 Anti-dumping Agreement limited legitimate anti-dumping measures to those expressly provided for in art. VI GATT and the Anti-Dumping Agreement. Apart from provisional measures and price undertakings, duties are the only type of remedies foreseen in the Anti-Dumping Agreement. The panel did not agree with the US argument that footnote 24 to art. 18.1 showed that a Member was not ‘locked’ into levying anti-dumping duties when faced with a factual situation constituting injurious dumping. 

EC panel report, para. 6.197-198 and Japan panel report, para. 6.217-218.

Regarding art. 1 Anti-Dumping agreement, the panel in the Japan case similarly held that this provision limits legitimate anti-dumping measures to duties.  It held that the term ‘anti-dumping measure’ in that article must be read as “a measure aimed at counteracting dumping as such, as defined in article VI:1 GATT”. Such a measure can only be taken in accordance with the WTO anti-dumping provisions, which refer to no other remedy than anti-dumping duties.

Art. 1 Anti-Dumping Agreement provides: 
“An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations”
Footnote 1 reads:
‘The term ‘initiated’ as used in this Agreement means the procedural action by which a Member formally commences an investigation as provided in Article 5.’

In the EC case, the Panel also referred to art. 1, asserting the same conclusion, without further argumentation. See in particular EC panel report, para. 6.195.

Japan panel report, para. 6.221-222.

The panel in the Japan case then considered that the approach proposed by the US, which would allow Members to take any type of measure against dumping as such outside the framework of article VI, subject to the discipline of the other provisions of the WTO Agreement, was incommensurate with the object and purpose of the WTO and GATT. Although the preamble of the WTO Agreement and the GATT do not in particular refer to anti-dumping, the panel found it relevant that the both the WTO and GATT preambles referred to ‘the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations and that the WTO preamble refers to the development of a “more viable and durable multilateral trading system”. In both cases the Panel finally found its interpretation confirmed by the travaux préparatoires of the WTO anti-dumping provisions.

Japan panel report, para. 6.223-225.

EC panel report, para. 6.199-2.202 and Japan panel report, para. 6.226-229.

For these reasons, the panel concluded that art. VI:2 GATT 1994 provides that only measures in the form of anti-dumping duties may be applied to counteract dumping as such. By providing for fines, imprisonment and treble damages, the 1916 Act violates this provision and art. 18.1 of the Anti-Dumping Agreement. 
(c) Other violations
In both cases the Panel considered whether it had to apply the principle of judicial economy and therefore not further consider other claims under the anti-dumping provisions. According to the panel in the EC case, changing the 1916 Act to include an injury requirement and to provide only for duties instead of criminal and civil penalties was maybe not sufficient to assure WTO compliance. Therefore, further findings under the Anti-Dumping Agreement would probably further assist the DSB in making sufficiently precise recommendations and rulings in order to assure prompt compliance. 

See EC panel report, para. 6.206 and Japan panel report, para. 6.234.

A first set of additional claims made by Japan addressed the textual differences between the 1916 Act and the WTO anti-dumping provisions in defining the relevant price benchmarks and the fact that the text of the 1916 Act did not provide for protection against currency fluctuations for those against whom dumping is alleged, unlike 2.4.1 Anti-Dumping Agreement. Here the Panel considered the possibility of interpreting the 1916 Act in conformity with the WTO provisions crucial, in not finding a violation. First, as to both parts of the claim, the Panel held that the textual differences could very well be overcome by interpretation. Secondly, it took note of the US explanation of the so-called Charming Betsy doctrine and Japan’s failure to show circumstances that would bar the US courts to apply this doctrine here. Thirdly, Japan failed to show any past court decisions that applied inconsistent interpretations. 

See  Murray v. Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804). In this case, the US Supreme Court established the doctrine that in the absence of conflict, US judges should, whenever possible, interpret US laws in conformity with the international obligations of the United States.

Japan panel report, para. 6.242-250.  Similar reasoning brought the panel in the Japan case to dismiss a claim based on art. 5.10 Anti-Dumping Agreement, see Id., para. 6.259-260.

However in both cases, the panel found violations of art. 4 and 5 Anti-Dumping Agreement. First, proceedings under the 1916 Act can be initiated by ‘any person injured…’ This constituted a per se violation of the requirement under art. 4.1, 5.1 and 5.4 Anti-Dumping Agreement that proceedings be made on behalf of the domestic industry and supported by a minimum proportion of the domestic industry. Moreover, under the 1916 Act there is no obligation to respect the obligations of art. 5.2 Anti-Dumping Agreement in terms of the type of evidence to be included in an application. In the EC case, the panel also found a violation of art. 5.5 in that the 1916 Act does not provide for a mechanism of notification to the exporting country. 

EC Panel Report, para. 6.211-212 (finding merely a finding of violation of art. 4) and Japan Panel Report, para. 6.256-257.

5. 	Other claims 

Both the EC and Japan had also made claims based on art. III:4 and XI GATT. The panel decided to exercise judicial economy in this respect and therefore did not further to consider these claims. Finally, the panel did consider the claim made under art. XVI:4 GATT. The panel held that by violating art. VI GATT, the 1916 Act automatically violated art. XVI:4. Therefore it did not feel it had to apply judicial economy regarding this aspect of the case. 

EC panel report, para. 6.217-219 and Japan Panel report, para. 6.265-281.

EC panel report, para. 6.220-224 and Japan Panel report, para. 6.282-288.

6. 	Recommendations

Art.19.1 of the DSU provides that in case of a finding of inconsistency, Panels shall recommend that the Member concerned bring the measure into conformity. A panel may also suggest ways in which the Member could achieve this. On the basis of this article, the Panel refused to grant directly Japan’s request that it would recommend the repeal of the 1916 Act. However, it suggested that repeal might be one way to achieve conformity. This suggestion seemed justified given the very limited practical impact of the 1916 Act compared with other US antitrust and anti-dumping instruments, combined with the concern expressed in the fourth sentence of art. 3.7 DSU, that in the absence of a mutually agreed solution, the first objective of dispute settlement is to secure the withdrawal of the measures found to be inconsistent.  

Japan panel report, para. 6.290-6.292.

In the EC case, the panel restricted itself to a general recommendation.

EC panel report, para. 7.2.

B. 	Overview of the Appellate Body report
1. 	Enhanced third party rights

Appellate Body report, para. 139-150.

The AB confirmed the refusal by the panel in both cases to grant ‘enhanced’ third party rights. It emphasized that under the DSU, as it currently stands, third parties are not entitled to such rights. Referring to the EC-Hormones report, the AB considered that it is a matter of discretion for the panel whether to grant ‘enhanced’ third party rights. Such discretion must be exercised, with particular regard for the necessity of ensuring due process to all parties.

Id., para. 150: “Such discretionary authority is, of course not unlimited and is circumscribed, for example, by the requirements of due process”.

2. 	Jurisdiction of the panel to hear claims against the 1916 Act as such

(a) General
In the EC case, the US did not raise any jurisdictional objection until the stage of interim review.   The panel stated that “there would be a number of reasons to reject the US argument as untimely”, but considered the objection nevertheless and rejected it. The US appealed on this point.

EC panel report, para. 5.19.

(b) Timely objection against jurisdiction 
The EC argued before the AB that the appeal of the US on this point should be rejected not only because it was not well founded, but also because the US objection of jurisdiction was not timely raised. It invoked the principle that ‘procedural objections must be made in a timely manner and in good faith’.  

Appellate Body report, para. 53.

The AB rejected the argument of untimeliness. It agreed with the panel that the interim review stage was not an appropriate point in the proceedings to invoke jurisdictional objections for the first time. Such objections should be raised as early as possible and panels must insure that requirements of due process are met. However, it also agreed with the Panel that some issues of jurisdiction may be of such a nature that they have to be addressed by the Panel at any time. Referring to a number of opinions of other international tribunals the AB considered that it is “a widely accepted rule that an international tribunal is entitled to consider the issue of its own jurisdiction on its own initiative and to satisfy itself that it has jurisdiction in any case that comes before it”. Objections of jurisdiction are not simply procedural objections, since the vesting of jurisdiction is a fundamental prerequisite for lawful proceedings.

See EC panel report, para. 5.17.

E.g. International Court of Justice and its predecessor, the Permanent Court of International Justice and the Iran-US Claims Tribunal.

Appellate Body report, para. 54, fn. 30.

Id.

(c) Jurisdiction to consider claims against the 1916 Act as such 
The AB confirmed the Panel’s holding on the basis of the following reasoning. For the DSU to apply to claims that the 1916 Act is inconsistent with article VI GATT and the Anti-Dumping Agreement, a legal basis to bring the claims must be found in the GATT and the Anti-Dumping Agreement respectively.  Insofar as the claims of the EC and Japan were based on art VI GATT, such a legal basis is found in art. XXIII:1(a). Prior to the entry into force of the WTO agreement it was firmly established that this article allowed a party to challenge legislation as such, independently from the application of that legislation in specific instances. The AB noted that this practice has continued after the entry into force of the GATT. The legal basis for bringing claims under the Anti-Dumping Agreement is found in art. 17 of that agreement. The possibility to challenge legislation as such under art. XXIII should be regarded as applying also to claims under art. 17, unless this possibility is excluded. No express exclusion could be found in art. 17 or elsewhere in the Anti-dumping Agreement. Nor could an implicit exclusion be found in art. 17.  Art. 17.4 of the Anti-dumping Agreement and the interpretation thereof in Guatemala – Cement, on which the US relied, did not suggest that review of anti-dumping legislation as such was precluded. In that case, the AB had simply found that for Mexico to challenge Guatemala’s initiation and conduct of the anti-dumping investigation, Mexico was required to identify one of the three anti-dumping measures listed in art. 17.4. Since it did not do so, the Panel in that case did not have jurisdiction. 

Id., para. 57-61

Supra note 77..

Appellate Body report, para 70-75.

Like the Panel the AB found its conclusion confirmed by art. 18.4. It also found support in art. 18.1. This article provides that no specific action against dumping of exports from another Member can be taken except in accordance with the provisions of GATT 1994 and the Anti-dumping Agreement. If art. 17.4 were read as in any case restricting the jurisdiction of the Panel to claims against the specific measures referred to in that provision, it would be impossible to test the consistency with art. 18.1 of Member’s legislation providing for a response to dumping that does not consist of one of those types of measures or of  particular responses thereunder. 

Id., para. 76-79.

Id., para. 80-82.

3. 	Mandatory and discretionary legislation

On appeal, the AB upheld the conclusion of the panel. First, as a terminological matter, it considered the term ‘discretionary’ more appropriate than ‘non-mandatory’. Next, it noted that the relevant discretion, for purposes of distinguishing between mandatory and discretionary legislation, is discretion vested in the executive branch of government. It considered the discretion enjoyed by the US Department of Justice as not of such nature or breadth as to transform the 1916 Act into discretionary legislation and therefore agreed with the Panel’s finding on this point.	

Id., para. 88-90.

Then, the AB considered certain aspects of the Panel’s reasoning the US took issue with. First, it confirmed the Panel’s qualification of the mandatory vs. discretionary argument as a defense, the burden of proof for which rested with the US. Most important was the US critique on the conclusion of the Panel in the Japan case quoted above, “[t]hat the notion of mandatory/non-mandatory legislation is no longer relevant in determining whether the Panel can or cannot review the conformity of the 1916 Act with the Anti-dumping Agreement”. The AB refused to answer the question whether indeed the ‘mandatory vs. discretionary legislation’ distinction had become irrelevant for claims brought under the Anti-dumping Agreement or to consider whether art. 18.4 Anti-dumping Agreement had supplanted or modified the distinction, since these answers would have no impact on the outcome of the case. According to the AB the Japan panel need not have opined on the issue either.  

Id., para. 94-97.

Ibid,, para. 98-99 ; the AB referred to footnote 23 and paras. 7.53 and 7.54 of the Section 301 panel report, o.c.

4. 	Applicability of art VI GATT and the Anti-Dumping Agreement to the 1916 	Act

The AB upheld the panels’ conclusion of applicability of art. VI GATT and the Anti-Dumping Agreement. 
It first noted the definition of ‘dumping’ in art. VI:1 and emphasized that this definition neither referred to a particular intent, nor to the injurious effects that dumping may have. 

Ibid, para. 105-107.

Next, it considered that the question of applicability of art. VI to the 1916 Act depended in the first place on whether this provision regulates all possible measures that members can take in response to dumping. If it did not and art. VI regulates only the imposition of anti-dumping duties, then it would not be applicable to the 1916 Act. 

Ibid, para. 108-109.

Although art. VI:2 only refers to anti-dumping duties, it does not specify that duties are the only anti-dumping measures Member-States are allowed to take. Like the Panel in both cases had done in its review of the violation claims based on art. VI:2, the AB then turned to the meaning of ‘may’ in art. VI:2 GATT. Reading art. VI:2  in conjunction with art. 9 Anti-Dumping Agreement, it found no support for the US’ reading of the term as allowing for a choice between duties and other anti-dumping measures. Nevertheless, the AB was not convinced at this point in its analysis whether or not art. VI regulated all possible anti-dumping measures.

Ibid, para. 110.

Art. 9 Anti-Dumping Agreement provides inter alia that “it is desirable that the imposition {of an anti-dumping duty} be permissive in the territory of all Members”.

Ibid, para. 113-117.

Therefore it turned to art. 1 Anti-dumping Agreement, in particular the meaning of an ‘anti-dumping measure’ in that article. The ordinary meaning of that phrase seemed to encompass all measures taken against dumping, without restriction to particular types of measures. Reading art. 1 together with art. VI seemed to imply that art. VI applied to all measures taken against dumping. The AB found further clarification in art. 18.1 Anti-Dumping Agreement. This provision contains a prohibition on the taking of ‘any specific action against dumping’ when such action is not ‘in accordance with the provisions of GATT 1994, as interpreted by this agreement’. Considering the ordinary meaning of the words, the phrase ‘specific action against dumping’ must, according to the AB  at a minimum encompass action that may be taken only when the constituent elements of ‘dumping’ are present.  The ‘provisions of the GATT 1994, as interpreted by this agreement’ must be read as referring to art. VI GATT, since this is the only provision interpreted by the Anti-Dumping Agreement. Footnote 24 to art. 18.1 confirmed, rather than contradicted this reading. 

Ibid, para. 118-120.

The AB found it not necessary to determine whether the concept of ‘specific action against dumping’ may be broader. Id., para. 122, fn. 66.

The AB noted that therefore intent is not necessary to determine whether an action is “specific action against dumping”. Id.

On the basis of all this, the AB concluded that art. VI is applicably to any ‘specific action against dumping’, I.e. action that is taken in response to situations presenting the constituent elements of dumping.

Ibid, para. 121-126.

Next, considering the wording of the 1916 Act, the AB found that the constituent elements of ‘dumping’ are necessary requirements for the imposition of criminal and civil penalties under this act. Therefore the 1916 Act provided for ‘specific action against dumping’ and fell within the scope of art. VI GATT. 

Ibid, para. 126-130.

Finally, the AB agreed with the panels’ holding that the applicability of art. VI automatically entailed applicability of the Anti-Dumping Agreement. 

Ibid, para.  133.

In a footnote, the Appellate Body nevertheless criticized the Panel for its use of the term “transnational price discrimination”, which it considered problematic. Dumping is only a specific form of transnational price discrimination, since it requires importation and a lower price in the import market than in the export market or relevant third country market.

5. 	Violation of art. VI:2 of the GATT 1994 and certain provisions of the Anti-Dumping Agreement

The US had appealed against all the findings of violations of the WTO anti-dumping provisions by the panel. However, it had based most of these appeals on the sole basis that art. VI and the Anti-Dumping Agreement were not applicable to the 1916 Act. Having upheld the conclusion of the panels as to applicability, the AB  also upheld the findings of violation. Only the appeal against the finding of violation of art. VI:2 was left to be considered. The US argued that this provision only regulated the imposition of anti-dumping duties, leaving other measures to counteract dumping unadressed. 
The AB upheld the Panel’s finding. Referring to its own conclusions as to the applicability question, the AB held that the only measures allowed by art. VI, read together with the Anti-Dumping Agreement are definitive anti-dumping duties, provisional measures and price undertakings. By providing for criminal and civil sanctions, the 1916 thus violated art. VI:2. 

Ibid, para. 134-137.

6. 	Conditional appeals: Articles III:4 and XI GATT and article XVI:4 WTO Agreement

The EC and Japan had asked the AB to make a finding that the 1916 violated art. III:4, XI and XVI:4 GATT, in case it would decide to reverse the conclusions of the panel as to applicability of art. VI and the Anti-Dumping Agreement, cq. on the issue of the distinction between mandatory and discretionary legislation. Since the latter condition had not been fulfilled, the AB declined to rule on these ‘conditional appeals’. 

Id., para. 152-155.

IV. 	COMMENTS
A. 	Substantive aspects of the case
1. 	The ‘black letter law’: essential holdings of panel of Appellate Body

Essentially, these cases settle two basic issues of substantive WTO anti-dumping law, which had never been addressed as such in GATT or WTO dispute settlement. 
First, the panel and AB defined the scope of application of the WTO anti-dumping provisions. The panels concluded that ‘any law that objectively addresses dumping’ falls under art. VI GATT and the Anti-Dumping Agreement. The AB held similarly that art. VI GATT is applicable to any ‘specific action against dumping’, which encompasses at a minimum action that may be taken only when the constituent elements of dumping are present. Furthermore, the panel made clear that they considered that is necessary and sufficient for such applicability that the legislation at issue requires the establishment of ‘dumping’ as defined in art. VI GATT as a necessary condition for action to be undertaken. That the legislation at issue imposes other additional conditions is of no relevance to the applicability of the WTO anti-dumping provisions. 
Secondly, the panel and AB explicitly confirmed in this case what had been suggested in the literature: the WTO anti-dumping regime is ‘exhaustive’ in the sense that it does not allow WTO members to take anti-dumping measures not provided in the WTO anti-dumping regime, e.g. by introducing or maintaining in their national legislation additional anti-dumping remedies. The panels’ and the AB’s reasoning convincingly removes doubts in this respect raised by the use of the word ‘may’ in art. VI:2 GATT and the language of footnote 24 sub art. 18.1 Anti-Dumping Agreement. 

See e.g. J. H. Bourgeois WTO Dispute Settlement in Anti-Dumping Cases, 1 J.Int’l.Econ.L. 259, at 272 (1998).

On the basis of these basic findings the conclusion that the 1916 Act violates the WTO anti-dumping regime was easily reached. Whatever other conditions are to be fulfilled for a cause of action under the 1916 Act, a finding of ‘dumping’ as required. And it is clear that the 1916 Act provides for sanctions, which are different from the anti-dumping measures the WTO anti-dumping regime provides for.

Some authors had already predicted such an outcome, see in particular Diane M. Keppler, The Geneva Steel Co. Decision Raises Concerns in Geneva: Why the 1916 Antidumping Act Violates the WTO Antidumping Agreement, 32 GEO.WASH.J.INT’L.L.&ECON. 293 (1999, 303-310.

2. 	Implications for antitrust law?  

The Panel’s and AB’s conclusion as to applicability of the WTO anti-dumping regime to the 1916 Act was not based on its possible or actual interpretation as a protectionist statute. Both Panel and AB indeed held that, even if the US contentions as to the antitrust nature of the 1916 Act were correct, this would not detract from the applicability of WTO anti-dumping law. 
Given the Panel’s and AB’s definition of the scope of the WTO anti-dumping regime, it is clear that even non-hybrid statutes, providing in pure antitrust fashion for a specific private right of action against predatory dumping would fall under and violate the WTO anti-dumping regime. In this sense the holdings in this case have a potential impact on antitrust law. 
This impact is however very limited and does not extend to ‘classic’ antitrust law. The Panel gave good reasons why. First, it pointed out that antitrust laws dealing specifically with price discrimination typically address price discrimination within a given jurisdiction. These would definitely not fall under the WTO anti-dumping regime. Secondly and more fundamental, it pointed out that under general antitrust law transnational price discrimination - and a fortiori dumping - never forms the necessary basis for antitrust action. Under general antitrust or competition law a finding of transnational price discrimination may provide, at most, supporting evidence of the underlying forms of market disruption that antitrust law seeks to address, such as abuse of a dominant position or price conspiracy. 

As mentioned in part IIA, the US is the only WTO member to provide for a private right of action against dumping.

Even if the impact on antitrust approaches to dumping situations is limited, is it good for the development of the international trade order? Most economists and a lot of legal scholars agree that anti-dumping action is only economically warranted in case of predatory dumping, i.e. systematically selling on the import market at below cost prices with the view of intimidating and/or eliminating rivals in order to bring about higher prices than would prevail in a competitive market.  Non-predatory dumping is considered in sum to be beneficial for the import market as a whole.  Nevertheless, current anti-dumping law, including the WTO regime, is ill designed to identify and address predatory dumping. At first sight then, it would seem to be a good thing to allow for the abovementioned specific statutes addressing only predatory dumping. However, the unilateral introducing or maintaining by one or more WTO members of the said type of specific antitrust legislation, seems not very effective in a context of international predatory practices, the proper assessment of which would seem to require an investigation of market conditions both in the import and the export market. Furthermore, it is questionable whether the existence of such laws, in addition to unchanged existing ‘classic’ administrative anti-dumping regimes, would present any answer to the efficiency critique on anti-dumping. Indeed, it must be noted that most reform proposals stress the need of cooperative or multilateral efforts, ideally leading to the abolishment of anti-dumping laws and their replacement by appropriate multilateral antitrust or competition law tools to address cross-border predatory practices.

This is generally accepted with regard to “unfair” pricing practices in antitrust. See supra part IIA

For a short introduction to the critique on both economical (efficieincy) and fairness rationales of anti-dumping, see e.g. M. TREBILCOCK and R. HOWSE, THE REGULATION OF INTERNATIONAL TRADE, 178-189 (1999)

Even if such acts were not considered to fall under art. VI, it may well be argued that the coexistence of administrative anti-dumping and a private right of action violates art. III:4 GATT 1994. Compare on the (in)compatibility of the 1916 Act with art. III GATT 1947 : Roger P. Alford, Why a private right against dumping would violate GATT, 66 N.Y.U.L. REV. 696 (1991), 740 et seq (relying especially on the requirement of procedural equality set out in the Section 337 case (see Panel report on United States – Section 337 of the Tariff Act of 1930, Report by the Panel, adopted 7 November 1989, 36 supp. BISD 345 (1990), para. 5.19); see also John H. JOHN H. JACKSON, THE WORLD TRADING SYSTEM : LAW AND POLICY OF INTERNATIONAL ECONOMIC RELATIONS, 274 (1997) and the references there in fn. 95.

See for a short overview of these reform proposals: M.TREBILCOCK & R. HOWSE, supra note 160, 188-189.

All in all this case thus does not have much spillover effects to antitrust law. And the limited effects there are, seem not to be much regretted. 

B. 	Some methodological and procedural issues addressed in the case
1. 	“Multiple complaints” issues: separate panel proceedings on both claims and no enhanced third party rights

This case was one of the many in the short history of WTO dispute settlement that arose from so called multiple complaints, i.e. complaints by different Member involving the same subject matter. 
Art. 9.1 DSU provides that ‘whenever feasible’ a single panel should be established in such cases. This makes sense. Given the limited resources available for dispute settlement, it is efficient to have single proceedings for the settlement of sufficiently similar claims. Consolidation of such claims also assures coherence in reasoning and consistency in outcome. In this case, not only the measure at issue was exactly the same, the claims put forward by Japan and the EC were virtually the same. Hence this could have been a textbook example of a situation where consolidation would be appropriate. However such consolidation did not take place. The main reason seems to be the time gap of four months between the requests for panel establishment and three months between the actual establishment of a panel. This is indeed much longer than in most cases where consolidation took place, although it may be noted in a recent case, brought by the US and the EC against India a time gap of 5 months between both requests and more than three and a half months between panel establishment did not prevent consolidation.  

The efficiency concern could be considered to be more acute than the coherence concern. The possibility of appellate review may indeed mitigate this concern, although it should not be forgotten that the appellate review is more restricted than the panel review.

Art. 9.2  DSU addresses another concern with consolidation of cases:  procedural fairness. It states that when a single Panel is established, this Panel shall organize its examination and present its findings to the DSB in such a way that the rights, which parties would have enjoyed in separate proceedings, are in no way impaired. More specifically, it adds that separate reports will be submitted if a party to the dispute asks to do so. Furthermore, art. 9.2 provides that all written submissions by parties shall be made available to all other parties and that each complainant has the right to be present when any of the other complainants shall present its views to the panel.  It may be noted that these provisions have in particular regard to the due process interest of complainants .

See for an overview of such cases during the first three years of WTO dispute settlement: Debra P. Steger and Susan M. Hainsworth, World trade organization dispute settlement: the first three years, 1 J.INT’L.ECON.L. 199, 206 (1998).

See Panel report on India - Measures affecting trade and investment in the motor vehicle industry, WT/DS146/R and WT/DS175/R, issued on 21 December 2001, para.1.1. and following.

Art. 9.3 covers the hypothesis that cases are not dealt with by a single panel.  “To the greatest extent possible”, the panels will be of the same composition and the timetable for the panel process shall be harmonized. This shows again the concern with efficiency and coherence. In this case the Panels were indeed of the same composition but no harmonisation of timetables or concurrent deliberations took place. In the Japan panel report, it is explained that none of the parties requested harmonisation, that the US objected to concurrent deliberations and that the EC was in disfavor of delay of proceedings of its own complaint.  However, art. 9.3 does not make the harmonisation of time tables subject to request and/or assent by the parties to the dispute. Hence a second opportunity to assure procedural efficiency and coherence in reasoning and outcome was only partially seized. 

See Japan panel report, para. 6.27.

The status of third party of EC and Japan in each other proceedings could not make up for this loss of full connection between both proceedings. One way to create a closer connection would have been for the panel to grant the enhanced third party rights the EC and Japan requested.  Since the AB report in the EC - Hormones case, it is clear that panels have the discretion under art. 12.1 DSU to grant such rights, in particular if the Panel considers it necessary for ensuring all parties due process of law. The Panel refused the request and the AB confirmed.  As I understand the Panel’s reasoning, the refusal seems to be largely due to a reluctance to blur the distinction between (the respective rights) of parties and third parties as laid down in the DSU. However, is such a distinction not ipso facto blurred for simultaneous complainants/third parties status in multiple complaints situations and wouldn’t it be justified in such a case, contrary to what the AB held, to seek guidance in art. 9 as ‘context’ for art. 10 in this situation? 

Art. 10 DSU and art. 6 Annex 3 to the DSU provide following rights to third parties: to be heard during a session of the first substantive meeting of the panel, to make written submissions and to receive the submissions of the parties to the first meeting of the panel.

The EC requested the right to be present during both substantive meetings of the Japan panel proceedings and to make a submission on each occasion. Japan requested to be allowed to be present during the entire second substantive meeting of the EC panel proceedings and to receive all documents exchanged by the parties in the EC panel proceedings.

I must admit that I have no clear-cut answer to the questions asked above. And it must be said that the fear for incoherence proved to be largely unfounded in this case. Both panel reports are indeed very consistent.  Equally, it may be argued that by not pushing the multiple complaints issue and its discretion too much, the panel may have eased procedural tension, thus creating a more settlement inducive atmosphere. But what a waste to have two proceedings....
2. 	Objections against jurisdiction  

As pointed out in the overview of the reports, the Panel in the EC case and the AB rejected an EC claim of untimeliness against the US objection against the jurisdiction to hear the claims of the EC. 
The AB agreed with the panel that the US had raised its objection against jurisdiction at an unappropriately late stage (interim review) of the panel proceedings. Like the Panel it also pointed out that jurisdictional objections are not simply “procedural objections” to be raised as early as possible but that “[t]he vesting of jurisdiction is a fundamental prerequisite for lawful panel proceedings”.  In a footnote it added that is “it is a widely accepted rule that an international tribunal is entitled to consider the issue of its own jurisdiction on its own initiative and to satisfy itself that it has jurisdiction”(the author underlines). 

Appellate Body report, para 53.

Of course, this holding is as such to be approved of. One can imagine the damage that would be done to the legitimacy of the WTO dispute settlement system if only one case were adjudicated on the basis of disputed jurisdiction.
As a practical matter, how should panels then go about addressing the jurisdiction issue, if the parties themselves have not addressed it in limine litis? According to the AB, Panels should address the question apparently propriu motu. Of course, due process concerns would require Panels to open the issue for discussion by the parties. One way to proceed would then be that each panel at the earliest possible stage of the proceedings - i.e. the first session of the first substantive meeting - puts the question of its jurisdiction to the - especially responding - parties.   

3. 	Examination of domestic law

In these cases the panels revisited the question of how to examine the domestic legislations the compatibility of which is to be reviewed. These cases are noteworthy in that they address new aspect to the problem, namely the case where a Panel has to review a very old piece of legislation, carrying with it a diffuse ‘halo’ of different interpretations from different sources. 
Remarkable is especially the methodology the panels set out for themselves as a preliminary matter. Two principles seem to be at the core of this methodological approach
	(i) a panel may analyze the operation of the domestic legislation and determine whether the description of the functioning of the law, as made by the respondent, is consistent with the legal structure of that Member.
(ii) in making such determination the starting point will be an analysis of the terms of that law. However, even if this text would be found to be clear on its face, the panel must take into consideration the interpretation given by domestic courts and other authorities, in order to avoid developing an understanding of the law different from how it is actually applied. 
The combination of both principles results in a balanced approach, showing on the one hand sensitivity to the competences of domestic interpreters (second principle), without being entirely deferential to the interpretations made by those interpreters and especially to the presentations made by the respondent party before the panel (second principle). The application the Panel made of these principles when it continued to determine the weight it would give to different secondary sources, such as case law legislative history, illustrates very well this balance. 
Also elucidating in this respect is a comparison to the approach taken in respectively the India Patents case and the Section 301 case.
 In formulating the first principle, the panels referred to the following statement of the AB in the India Patents case: 
"[i]t is clear that an examination of the relevant aspects of Indian municipal law … is essential to determining whether India has complied with its obligations under Article 70.8(a) [of the TRIPS Agreement].  To say that the Panel should have done otherwise would be to say that only India can assess whether Indian law is consistent with India's obligations under the WTO Agreement."  

Appellate Body Report on India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R (complaint by US), adopted 16 January 1998, para. 66.

However, India Patents is often criticized for a lack of deference or ‘institutional sensitivity’ to domestic interpreters.   At issue in this case was inter alia whether a particular administrative practice could be regarded as a sound legal basis for implementing a particular duty under the TRIPS agreement, where this practice was in conflict with the terms of relevant provisions of Indian patent legislation.  The panel and AB held that it did not. In reaching this conclusion, the panel showed very little consideration for the arguments based on interpretation of Indian constitutional law made as defence by India.  Thus, the critique goes that the panel and AB in the India Patents case failed to give due account to the concern addressed in the second principle. 

This concept was introduced by Robert Howse, Adjudicative Legitimacy and Treaty Interpretation in International Trade Law: The Early Years of WTO Jurisprudence, in THE EU, THE WTO AND THE NAFTA: TOWARDS A COMMON LAW OF INTERNATIONAL TRADE 62-68 (J.H.H.Weiler ed., 2000).  He defines ‘institutional sensitivity’ as an awareness of panels and Appellate body of their institutional strengths and weaknesses in relation to other actors which may have a particular expertise or a particular stake in the laws and policies it has to review.  Howse regards this as one of three important elements contributing to the legitimacy of WTO dispute settlement (the other elements are fair procedures and coherence and integrity in interpretation). He prefers the concept of ‘institutional sensitivity’ to that of  formulae encouraging panels and Appellate Body to show a certain ‘deference’ or ‘restraint’, which in his view are not nuanced enough (id, 62).

See the critique of Robert Howse (id., 68) : “[..] complete deference to another authority would not have been appropriate, since outsiders (in this case foreign patent holders) had an interest not necessarily recognizable or recognized by the domestic institutional authority. Nevertheless […] the AB has arguably gone to the opposite extreme, in holding that WTO dispute settlement organs can interpret domestic law without even taking into account domestic institutional competence in the interpretation of this law.“ See also eg. William J. Davey, Has the WTO dispute settlement system exceeded its authority? A consideration of deference shown by the system to member government decisions and its use of issue-avoidance techniques,  4 J.INT’L.ECON.L. 79, at 93 (2001): “[…] the panels and the Appellate Body did effectively reject the Indian government view of its powers and the likely reaction of Indian courts to its actions. One can argue that given the uncertainty over what Indian courts might do greater deference to the government’s view would have been appropriate”.

Art. 70.8 (a) TRIPS, the provision at issue, requires Members, who make use of the possibility under TRIPS not immediately to provide patent protection pharmaceutical and/or agricultural products, to make available during the transitional period a ‘mailbox’ system for patent filing regarding such products, to preserve novelty of inventions and priority of applications as of the relevant filing and priority dates.

On appeal, India argued that the Panel had erred in its approach, because (1) it did not assess the Indian law as a fact to be established by the United States, but rather as a law to be interpreted by the Panel; (2) it should have given India the benefit of the doubt as to the status of its mailbox system under Indian domestic law and (3) the Panel should have sought guidance from India on matters relating to the interpretation of Indian law (Appellate Body Report on India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R (complaint by US), adopted 16 January 1998, para 64).  In rejecting these claims, the AB in particular gave no consideration to the third element of India’s claim, which was however different than the first element (see Id. para. 66).

By contrast to India Patents and analogous to the 1916 Act cases, the second principle was also explicitly articulated and applied in the US - Section 301-310 of the Trade Act of 1974 case, which was decided just before the panel reports discussed here were issued. The Panel in that case stated that only by understanding and respecting the specificities of each Member's legal system, a correct evaluation of conformity could be established. It further pointed to the necessity to be cognizant of the ‘multilayered’ character of the law at issue, consisting of the statutory language, but also other institutional and administrative elements and noted that the elements of such multilayered law are often inseparable and should not be read independently from each other when evaluating the overall conformity of the law with WTO obligations . The Panel applied the principle inter alia when it had to decide whether Section 304 of the US Trade Act 1974 violated art. 23.2(a) DSU because it required the USTR to determine whether another member denies US rights and benefits under the DSU, regardless of whether the DSB had adopted a report on the matter or not. The panel found that although the statutory text constituted a prima facie violation, this inconsistency was removed by the aggregate effect of a Statement of Administrative Action (SAA) and US statements made before the panel.   

See Panel report on United States – Section 301-310 of the Trade Act of 1974, adopted on 27 January 2000, WT/DS152/R.

Id, para. 7.24.

Id., para. 7.26.

Id., para. 7.27.

For a critique on the degree of deference given by the panel in the Section 301-case, see eg. Seung Wha Chang, Taming Unilateralism under the Multilateral Trading System: Unfinished Job in the WTO Panel Ruling on U.S. Sections 301-310 of the Trade Act of 1974, 31 Law & Pol'y Int'l Bus. 1151 (2000), at 1187: “From a WTO policy perspective, it seems undesirable for the WTO panel to follow U.S. constitutional law principles in favor of a construction upholding compliance with international obligations in cases of ambiguity. […]. An application of the U.S. constitutional law principles in the domestic courts could promote U.S. compliance with the WTO obligations. In contrast, however, a WTO panel's use of a similar method in assessing the WTO consistency of a Member's legislation may serve against the Member's compliance with WTO obligations.”

That a balanced approach does not necessarily leads to a deferential result and that such an approach not necessarily entails an important impact of extra-statutory sources, is illustrated by the – very conscientious - application by the panel of the methodology it set out when determining the applicability of art. VI GATT to the 1916 Act. Once it had found that the sole criterion for applicability was whether the Act objectively addressed dumping as defined in art. VI, it was clear that the extra-statutory elements would not matter much in coming to a final conclusion as to applicability. The non-statutory elements were indeed not very relevant to the transnational price discrimination or dumping test the panel found in the text of the statute. However, the panel again was very explicit in giving reasons why it considered these elements not very relevant.  
 In sum, the approach of the Panel to the examination of domestic deserves a positive evaluation. It carved out a very balanced methodology, which it applied in a consistent and transparent way.  Together with the Section 301 case, the 1916 Act cases sets an example to be followed, also in cases where the United States is not the defendant. 
4. 	The distinction between mandatory and discretionary legislation 

In this case, the AB for the first time addressed the doctrine of mandatory vs. discretionary legislation. Affirming the holding of the panels that the prosecutorial discretion present in the 1916 Act was not sufficient to make it discretionary legislation, the AB confirmed what can be called the ‘classic doctrine’ with respect to the distinction between mandatory and discretionary legislation (hereinafter: M/D-distinction), which had been a long time part of the GATT 1947 panel tradition . 

For an overview of instances of application of the doctrine under the old GATT jurisprudence, see: Analytical Index: Guide to GATT Law and Practice, Vol. 2, 645-648 and 733-734 (1995); see on this doctrine also: DAVID PALMETER & PETROS MAVROIDIS, DISPUTE SETTLEMENT IN THE WORLD TRADE ORGANIZATION: PRACTICE AND PROCEDURE, 24-26 (1999) and Davey, supra note 173, at 101-103.

This classic doctrine regarding the distinction was summed up in 1994 by the last GATT 1947 panel in US - Tobacco: 
“....panels had consistently ruled that legislation which mandated action inconsistent with the General Agreement could be challenged as such, whereas legislation which merely gave the discretion to the executive authority of a contracting party to act inconsistently with the General Agreement could not be challenged as such; only the actual application of such legislation inconsistent with the General Agreement could be subject to challenge"

United States – Measures Affecting the Importation, Internal Sale and Use of Tobacco, adopted on 4 October 1994, BISD 41S/131, para 118, quoted in the Appellate Body report in the annotated case, at para. 88.

In the light of this ‘classic’ formulation of the doctrine, the application of the M/D distinction to the 1916 Act at issue in this case did not present great difficulties in this case. The only element of executive discretion allowed for by the 1916 Act was the prosecutorial power of the US Department of Justice to initiate (or not) criminal proceedings. Prosecutorial discretion is merely discretion whether a law should be applied; it does not allow the prosecuting authority to actually apply the law. Such discretion is not sufficient to move the law at issue to the ‘discretionary branch’ of the M/D-distinction as it was traditionally applied.

Davey (supra note 173, at 103) notes that panels in the past have refused to consider that the long-time and consistent non-enforcement of mandatory legislation renders it immune from challenge.

 A closer look at the reasoning of the Panel in this case and the Panel in the Section 301 case, which its report during the panel proceedings in this case, shows that the traditional M/D-distinction (hereinafter: ‘classic doctrine’) is less unproblematic than the AB’s confirmation of its continuing validity seems to suggest. 
The Panel in this case indeed did not directly reason on the basis of the classic doctrine to arrive at its conclusion that the 1916 Act was mandatory. Unlike the AB, the Panel’s conclusion was essentially based on art. 18.4 Anti-dumping Agreement, which requires WTO Members to bring their anti-dumping legislation in conformity with art. 18.4 Anti-Dumping Agreement. Referring to earlier GATT panel reports, especially the unadopted EC - Audio Cassettes report, the panel held that it would be incompatible with this obligation of conformity and with the general principle of effectiveness to find that the prosecutorial discretion provided for by the 1916 Act was discretionary (or non-mandatory) and thus could as such not be found in violation of the WTO anti-dumping provisions. 
In the Section 301 case the M/D-distinction the panel held that the discretionary nature of national legislation did not necessarily preclude it from violating as such WTO obligations. The Panel reasoned as follows: 
“[We] believe that resolving the dispute as to which type of legislation, in abstract, is capable of violating WTO obligations is not germane to the resolution of the type of claims before us. In our view the appropriate method in cases such as this is to examine with care the nature of the WTO obligation at issue and to evaluate the Measure in question in the light of such examination. The question is then whether, on the correct interpretation of the specific WTO obligation at issue, only mandatory or also discretionary national laws are prohibited. We do not accept that there has to be one and fast rule covering all domestic legislation. After all, is it so implausible that the framers of the WTO Agreement, in their wisdom, would have crafted some obligations which would render illegal even discretionary legislation and crafted other obligations prohibiting only mandatory legislation? Whether or not Section 304 violates Article 23 depends, thus, first and foremost on the precise obligations contained in Article 23. “  

Panel report on United States – Section 301-310 of the Trade Act of 1974, supra note 176, para. 7.53.

Although the Panel in this case stressed that its approach did not require a wholesale reversal of the ‘classic doctrine’, its ‘obligation-by-obligation’ approach shifts the focus from the nature of the legislation at issue - which seems to be at the core of the classic test - to the WTO obligation at issue. This seems at least hard to reconcile with a ‘mechanical’ application of this classic doctrine as a mere ‘threshold consideration’. And at least potentially it lowers the threshold for a finding of violation.  

Id, at para. 7.54.

Compare Appellate Body report, para. 88.

Compare Davey, supra note 173, 103.

Whereas in its earlier EC report, the Panel remarked that the Section 301 case did not affect its reasoning on the M/D-distinction, the Japan report refers several times to this report as supporting its reasoning on the basis of art. 18.4 Anti-Dumping Agreement. And indeed, making abstraction of formulas used, the Panel’s approach in this case shows a comparable shift of focus from the nature of the disputed legislation to what is required by the WTO obligation(s) at issue. 

EC panel report, para. 6.83, fn. 352.

See Japan panel report, para. 6.106, fn. 88 and para. 6.191, fn. 153.

Such a change of focus, and the ‘harder look’ at the discretion present in national legislation it entails, seems adequately to address the concern that the mere existence of discretionary measures allowing for a may have a negative impact on trade, regardless of their being applied or not. The Section 301 panel eloquently emphasized this. Other discretionary measures, of course, may not have such an impact. A Section 301 kind of approach to the M/D distinction seems adequate to distinguish between discretionary measures impacting trade negatively and others that do not.   

Panel report on United States – Section 301-310 of the Trade Act of 1974, supra note 176, esp. para. 7.91 (Emphasizing that the ‘risk’ or ‘threat’ of inconsistent action can have a “chilling effect” on economic operators that is just as damaging as such action itself).

By the same token, this more nuance approach to the classic doctrine adequately addresses concerns regarding the conformity of the M/D-distinction with the requirement of art. XVI:4 of the WTO Agreement for Members to bring their laws, regulations and administrative practices into conformity with all WTO obligations. It seems to have been indeed this kind of concern that brought the Panel in this case to address the M/D-distinction on the basis of art. 18.4 Anti-Dumping Agreement, which imposes the same kind of requirement as art. XVI:4 in the specific context of the WTO anti-dumping provisions. 

See the critique of Mavroidis and Palmeter on this questionable compatibility of the discretionary law category with art. XVI:4 WTO Agreement in PALMETER & MAVROIDIS, supra note 181, 26. The Panels in this case did not address the issue, since they considered their reasoning on the basis of art. 18.4 sufficient. But of course, since art. 18.4 Anti-Dumping Agreement and art. XVI:4 WTO Agreement essentially impose the same kind of requirement on WTO Members, their conclusions based on art. 18.4 can be easily analogized.

Because, as pointed out, not all legislation providing for discretion that could be used in a WTO inconsistent manner has as such a  “chilling effect” on trade, it seems to me not necessary to go so far as to say that the M/D distinction is irrelevant since the entry into force of art. XVI:4 WTO Agreement, as the Japan panel (para. 189) stated with regard to the  art. 18.4 Anti-Dumping Agreement.

After all this perturbation of the ‘classic doctrine’, back to the AB, which has the final word.  Does the AB’s reaffirmation of the ‘classic doctrine’ imply a rejection of the more innovative approaches in the Panel reports in this case and the Section 301 case? I am tempted to think that the answer is negative. 
First, the AB’s reaffirmation may be read as limited to the ‘mandatory legislation’ side of the distinction, leaving the issue of discretionary legislation unaddressed and open for decision in a later case, if necessary. 

The Appellate Body indeed did not reject the finding in the Japan panel report that in the light of art. 18.4 Anti-Dumping Agreement the M/D - distinction was no longer relevant in determining whether panels can or cannot review the conformity of the 1916 Act with the WTO anti-dumping provisions.  It merely declined to rule on the issue, because the 1916 Act was clearly not discretionary legislation. It also did not pronounce on the panel’s holding in the Section 301 case, but merely ‘noted’ it in a footnote. See AB report, para. 98-99.

Secondly and more importantly, there is the affirmation of the Panel’s allocation of the burden of proof with respect to the M/D-distinction. . Indeed, the AB agreed with the qualification by the Panel of the M/D-distinction argument as an affirmative defense, the burden of proof of which rests with the respondent. Thus, showing that the disputed act is mandatory is not part of the complainant’s burden of bringing a prima facie case of violation, but for the respondent to adduce sufficient evidence that the legislation provides for such executive discretion that it does not as such violate the WTO obligations invoked by the claimant. This seems to be consistent with the Section 301 approach, emphasizing the need to have a close look at the concrete WTO obligations at issue, before deciding whether the discretionary elements of the disputed legislation suffice to exclude the possibility of as such violation.
The way the M/D distinction was applied by two later panels, suggests that although they seem to adhere to the ‘classic’ view as endorsed by the AB in this case, they only apply the distinction after careful consideration of the exact content of the WTO obligations at issue. 

See Panel report on Canada - Export credits and loan guarantees for regional aircraft, WT/DS222/R, 28 January 2002, para 7.56 and following and Panel report on United States – Measures Treating Export Restraints as Subsidies WT/DS194/R, adopted 23 August 2001, para. 8.4 and following. In the latter case the panel stated : “We are not aware of any GATT/WTO precedent that would require a panel to consider whether  legislation is mandatory or discretionary before examining the substance of the provisions at issue.  To the contrary, we note that a number of panels, in disputes concerning the consistency of legislation, have not considered the mandatory/discretionary question in the abstract and as a necessarily threshold issue.  Rather, the panels in those cases first resolved any controversy as to the requirements of the GATT/WTO obligations at issue, and only then considered in light of those findings whether the defending party had demonstrated adequately that it had sufficient discretion to conform with those rules.  That is, the mandatory/discretionary distinction was applied in a given substantive context.” (Id., para. 8.11, emphasis in original, footnote omitted).

  5. 	Judicial economy

Judicial economy has to do with the necessity to make findings on a claim in light of earlier findings made with regard to another claim. Exercising judicial economy allows Panels to rule on claims only to the extent necessary to resolve the dispute. Therefore it often functions as an ‘issue-avoidance technique’, allowing panels and AB to avoid having to address difficult or controversial issues when not necessary to settle a dispute.

See e.g.  EC Panel report,  para. 6.71.

Compare William J. Davey, supra note 173, 108.

Id.

Traditionally the application of the judicial economy principle was a rather mechanical process, where the Panel simply stopped after having found a violation of one provision.  In the Australian – Salmon case the AB introduced a more functional standard: 

Id, at 109 (positive about this practice, considering that when inconsistency can be found without addressing a difficult issue, it should not hesitate to do so) See eg. critical about a too mechanical application of judicial economy: S. Cho, Note: Gasoline: United States – Standards for Reformulated and Conventional Gasoline, 7-8  (1998) (rtf-document downloaded from the website of the European Journal of International Law: <http://www.ejil.org/journal/Vol9/No1/sr1a.html>)

‘A Panel has to address those claims on which a finding is necessary in order to enable the DSB to make sufficiently precise recommendations and ruling so as to allow for prompt compliance by a Member[..]’

Appellate Body Report on Australia – Measures Affecting Importation of Salmon, adopted on 6 November 1998, WT/DS18/AB/R, para. 223.

In this case the Panel essentially addressed the principle three times when deciding whether or not to address claims made. 
The first time, it decided not to apply the principle after having found a violation of art. VI:2 GATT (only duties are legitimate anti-dumping measures). Although it found that this finding addressed an essential feature of the 1916 Act, it considered that further findings on other anti-dumping provisions might be useful to assist the DSB. Secondly, the Panel applied judicial economy to decline to further consider the claims made based on art. III:4 GATT and art. XI GATT. Thirdly, in the Japan case, the Panel finally considered that it needed not to exercise judicial economy with regard to the claim based on article XVI:4 WTO Agreement and art. 18.4 Anti-Dumping Agreement, since the violation of art. VI GATT 1994 and several provisions of the Anti-Dumping Agreement it already had found, automatically implied a violation of the former provisions. 
The Panel’s use of the principle in this case seems a sensible application of the Salmon principle. The Panel had indeed at an earlier stage of the proceeding determined that art. VI and the Anti-dumping Agreement are a single undertaking and that the applicability of art. VI entails the applicability of the Agreement. Next, before declining to rule on the art. III:4 and XI claims, it pointed out that it considered that art. VI was a lex specialis to art III cq  XI. Thirdly, when the violation of one provision automatically entails the violation of another it is unnecessary to exercise judicial economy. 

Prof. Davey expressed some doubts as to how the guidance given by the Appellate Body in the Salmon case should be interpreted. He even wondered whether it did not simply reject the very notion of judicial economy. (Davey, supra note 173, 109). At least in the annotated case, this fear has been proved to be unfounded.

The application of the principle by the Panel in the aforementioned instances did not entail real ‘issue avoidance’.   However, such ‘issue avoidance’ was clearly a motive for the panel not to address certain arguments Parties had made, such as those regarding the aforementioned relation between art. XVI:4 and the distinction between mandatory and discretionary legislation. 
The AB in its turn restricted also restricted itself to a consideration of issues appeal and related arguments raised, it considered absolutely necessarily to reach a decision on the case. Its aforementioned treatment of the distinction between mandatory and discretionary law, shows that this allowed the AB to avoid at least one ‘hot potato’.
6. 	Suggestions of means to secure compliance WITH FINDINGS

Only in the Japan case, the panel made the specific suggestion that one means to comply with the findings made would be to repeal the act, thereto invited by Japan. The panel did not do so in the EC case, nor did the AB in its report. 
Suggestions of possible means to secure compliance are allowed for by art. 19.1, second sentence DSU. Such suggestions are not uncommon in WTO anti-dumping cases. In case of serious violations, the panels sometimes suggest to repeal the measure. Such suggestions are less common in other fields and the suggestion to repeal occurs extremely rarely. 

See e.g. Jacques H.J. Bourgeois, supra note 156, at 274.

See e.g. the panel in the Guatemala – definitive anti-dumping measures on grey Portland cement from Mexico case: “In light of the nature and extent of the violations in this case, we do not perceive how Guatemala could properly implement our recommendation without revoking the anti-dumping measure at issue in this dispute. Accordingly, we suggest that Guatemala revoke its anti-dumping measure on imports of grey portland cement from Mexico.” (Panel report on Guatemala – definitive anti-dumping measures on grey Portland cement from Mexico, WT/DS156/R, issued on 24 October 2000, para. 9.6. ).

As the annotated case was not a typical anti-dumping case, the suggestion to repeal by the Japan panel was therefore somewhat remarkable. Furthermore, such a strong, ‘activist’ statement made by a panel is somewhat out of tune with the careful attempts to ease political tension and increase acceptability for its conclusions earlier in the report. 
It seems, by the way, difficult to imagine any other means for the US to secure compliance than by repealing the 1916 Act, given the extent of the violations found by the panels as confirmed by the AB. Although remarkable and maybe strategically somewhat unfortunate, the panel’s suggestion was correct. 
.
IV. 	Concluding remarks

The most direct outcome of this case is the ‘announced death’ of the 1916 Act.  This is a good thing for international trade development. The 1916 Act was indeed a textbook example of how never or rarely fully applied legislation can pose a serious threat to foreign competitors and thus have a “chilling effect” on international trade. For the US however this outcome came as rather ‘uneasy’ to swallow, as the delays in implementation show. 
As to the substantial legal issues decided in order to reach this outcome, this case seems not to be of great importance for the development of WTO law. In this sense it was a relatively ‘easy case’. 
This case seems to be more interesting for how these substantial findings were reached, i.e. for the methodological and procedural issues decided. After exploring the different reports, it seems to me that both Panel and Appellate Body gave proof of great ability to balance the different dimensions of adjudicative legitimacy, as Howse defined them: fair procedures, institutional sensitivity and coherence and integrity in treaty interpretation.:

See R. Howse, supra note 173.

That the procedures followed in this case were fair can hardly be disputed. If anything, the Panel and AB gave proof of too much concern for fairness when deciding on the ‘multiple complaints’ issues of this case, carefully avoiding to make decisions against the will of parties and giving much - too much - regard to the balance of procedural rights it perceived to be laid down in the DSU. The same great care for legitimate proceedings was shown, when dealing with the systemically important issue of objections to jurisdiction. 
As to institutional sensitivity, the Panel must be applauded for its methodological approach to the examination of the 1916 Act and its surroundings.
There is hardly any critique to be pronounced on the coherence and integrity of the Panel’s and AB treaty interpretation. The fear that the approach to the ‘multiple complaints’ aspect of this case would lead to a lack of coherence and consistency, turned out to be rather unfounded. As said before the actual issues of treaty interpretation were rather clear-cut. Nevertheless Panel and AB were as transparent and explicit in their reasoning, as could reasonably be expected. I would also argue that Panel and Appellate Body used ‘issue avoidance techniques’, such as judicial economy and mandatory vs. discretionary legislation, in a very sensible way. 
Personally, I am curious about the future development in the case law of some of these methodological and procedural issues such as the treatment of multiple complaints, rights of third parties, consideration of jurisdiction, mandatory vs. discretionary law, examination of domestic law. 
Methodological and procedural efforts may help to create acceptable settlement of disputes, but they cannot guarantee “prompt compliance”. Let’s wait and see when the US finally will repeal the 1916 Act. The AB report has been adopted more than one and a half years ago... The EC and Japan get in any event impatient and have requested suspension of concessions.