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WT/DS162/R/Add.1 Page 110

(b)

The practice is defined by reference to discrimination which takes the form of higher prices in the domestic market of the exporter than in the import market.

4.10

For the European Communities the 1916 Act is clearly a law which is subject to Article VI of the GATT 1994:

(a)

It is targeted at imports.  Its prohibition is directed to "any person importing or assisting importing any Articles in the United States".  Such persons who breach the prohibition are guilty of a misdemeanour, and are liable for treble damages to persons who are injured by the prohibited conduct.

(b)

The regulated conduct is defined by reference to discrimination between the price of the imported products and "the actual market value or wholesale price of such Articles […] in the principal markets of the country of their production, or of other foreign countries to which they are commonly exported".

4.11

The European Communities argues that the 1916 Act does not escape the discipline of Article VI because it requires the prohibited conduct to be "common and systematic", or because the price differential must be "substantial".  Article VI applies whether the dumping is limited in occurrence and sporadic, or frequent and systematic; whether the dumping margin is large or small.  It takes into account the magnitude and frequency of the dumping only through the rule that the level of antidumping duty imposed may not exceed the level of dumping found.

4.12

Moreover, in the view of the European Communities, the 1916 Act does not escape the discipline of Article VI because sanctions can only be imposed under the 1916 Act if one or more of the enumerated specific intents are found.  The discipline of Article VI applies to any rule directed at dumping.  Once it is established that the rule or law is subject to Article VI, then the sole remedy permitted by Article VI (the imposition of antidumping duties) is conditional on a finding of (i) dumping in accordance with the definition of Article VI and (ii) injury, threat of injury, or material retardation.  Substituting the specific intent tests incorporated in the 1916 Act for the injury tests required by Article VI in no way serves to take the 1916 Act out of the discipline of Article VI; quite the contrary, it is one of the grounds which cause the 1916 Act to infringe Article VI, since the 1916 Act permits the application of sanctions in circumstances other than the only ones envisaged by Article VI – namely where there is injury, threat of injury or material retardation.

4.13

With respect to the relevance of US case law, the European Communities reiterates its view that the legal categorisation of the 1916 Act is a matter of WTO law and therefore it should be made by the Panel and not by national (in the present case, US) courts.  In any event, courts' views on the matter are far from consonant.367  It is sufficient to note that while some judgments (i.e. those of the District Court and the Circuit Court of Appeals in the Zenith III case) suggest that the 1916 Act is an antitrust law and not a trade law, this view has been strongly contested.  For example, the District Court in Geneva Steel held:

367 In this respect, the European Communities draws attention to a pronouncement by the ICJ, which, referring to an earlier judgment by the PCIJ, noted the following:  

"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' (Brazilian Loans, PCIJ, Series A, Nos. 20/21, p. 124)" (Elettronica Sicula S.p.A. (ELSI), Judgment, ICJ Reports 1989, p. 47, para. 62).

The European Communities claims that it has shown throughout its argumentation, and that the United States has not denied, that the views of US courts which have interpreted the 1916 Act are far from consonant.

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