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WT/DS162/R/Add.1 Page 103

1916 Act authorizes the imposition of a quantitative restriction on imports, WheelingPittsburgh350 held that no injunctive relief is available under the 1916 Act.


According to the United States, at most, a court may enter a monetary judgment (or impose a criminal sentence) against the particular defendants in a case for the amount of damage that the plaintiff's business has sustained.  A monetary judgment (or a criminal sentence) against a party obviously does not apply to any particular product.  In fact, the defendants in the case are free to continue importing their product.  Furthermore, the judgment obviously does not apply to persons importing the same product that are not a party to the lawsuit.  Thus, there is no basis for Japan's unsupported assertion that the 1916 Act "establishes productspecific minimum price levels".


The United States is of the view that even a cursory review of the panel report in EEC Minimum Import Prices shows that there is no similarity between the 1916 Act and the minimum import pricing scheme at issue in that case.  There, the questioned measure prohibited the importation of specific products (tomato concentrates) below a certain price.  As such, it easily fell within the ambit of Article XI.  Indeed, the EEC did not even dispute that the scheme was covered by Article XI.351  Thus, the only real issue in that case was the application of the exceptions in Article XI:2.


The United States considers that Japan's reliance upon the panel report in United States - Section 337 is similarly misplaced.  At issue in that case was whether Article III:4 applied to the Section 337 proceedings.  The panel found that the application of Article III:4 could not be avoided based upon the fact that Section 337 proceedings applied to persons rather than products.


In the present case, the United States does not dispute that Article III applies to the 1916 Act.  However, the analysis under Article III is wholly different from an Article XI analysis.  As noted by Japan, Article III has been interpreted to have an exceedingly broad scope based upon whether the measure "affects" the conditions of competition between the domestic and imported product.  There is no language in Article XI concerning whether the measure "affects" the imported product nor any basis to conduct an analysis comparable to the changing conditions of competition analysis under Article III.


Japan replies that the fact that the 1916 Act does not provide for injunctive relief is irrelevant.  The United States asserts that the 1916 Act is consistent with Article XI because, the United States claims, the 1916 Act does not allow a court to impose a "prohibition or restriction" on trade.  However, the 1916 Act is a measure that applies to and restricts the importation of products.  Because it allows for the imposition of fines, imprisonment, treble damages and costs, it violates Article XI.


Japan also notes that imprisonment is not "monetary" in nature.  In Japan's view, imprisonment obviously has serious restriction on imports and imposes even more severe effect on imports than monetary punishment or administrative guidance.  In a previous panel case – Japan - Semiconductors – the panel affirmed that in certain special circumstances such a soft instrument as administrative guidance could be regarded as a "governmental measure" enforcing trade policies.  Japan does not believe that Article XI allows Members to take such measures as imprisonment with stronger enforcement effect and implication.


The United States reiterates its argument that a judgment under the 1916 Act against a party defendant (civil or criminal) does not apply to and therefore cannot restrict any particular product.  

350 The United States refers to WheelingPittsburgh, Op. Cit.

351 The United States refers to EEC – Minimum Import Prices, Op. Cit., para. 3.3.

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