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WT/DS162/R/Add.1 Page 116


The European Communities submits that the reason why the application of the "no less favourable treatment" standard requires an element-by-element comparison of the laws at issue rather than of the frequency of their concrete applications lies in the purpose of Article III.  It is longstanding practice that Article III protects competitive opportunities.  Hence, in order to establish a violation of Article III:4 it is not necessary to show that the measure challenged has had any actual effects.  The mere possibility that a measure may result in some circumstances in less favourable treatment being afforded to imported products is already sufficient to establish a violation of Article III:4.  Thus, in the EEC – Oilseeds case:

"[…] the Panel examined whether a purchase regulation which does not necessarily discriminate against imported products but is capable of doing so is consistent with Article III:4.  The Panel noted that the exposure of a particular imported product to a risk of discrimination constitutes, by itself, a form of discrimination.  The Panel therefore concluded that purchase regulations creating such a risk must be considered to be according less favourable treatment within the meaning of Article III:4"375


On the other hand, the European Communities contests the value and relevance to the present case of the US contention that the 1916 Act has rarely been invoked by private parties and has never been invoked by the US government.  The analysis of the "no less favourable treatment" standard must be carried out on the basis of the two sets of rules, and reference to the history of the application of one of them is therefore irrelevant.  Taking into account the history of the application of the 1916 Act could suggest that less favourable treatment resulting from the application of the 1916 Act at one point in time376 could be offset by more favourable treatment resulting from the application of it at another point in time.  Such a reasoning was clearly rejected by the Panel in the United States - Gasoline case and the same conclusion should apply to the present case.377  


The European Communities argues that, in any event, the difficulties of practical application have been recognized in respect of predatory pricing generally and precisely in connection with a claim under the Robinson-Patman Act.  In its Brooke Group judgment, the Court held that "predatory pricing schemes are rarely tried and even more rarely successful" and "the costs of erroneous liability are high"378.  In addition, the European Communities considers that the fact that the 1916 Act has not often been invoked is due to a number of factors which do nothing to demonstrate that it provides more favourable treatment to imports than the Robinson-Patman Act does to domestic goods.  More importantly, the 1916 Act has (i) a "harassment value" because it gives to complainants (i.e. competitors of the importer in the domestic market) a private right of action in federal district courts and (ii) a "chilling effect" on importers because of its own terms, including the nature of the remedies which it provides (i.e., imprisonment and treble damages).


The European Communities submits further that a comparison between the texts of the Robinson-Patman Act and the 1916 Act reveals that they differ as regards the elements which must be proved in order for an infringement of the law to be present, which results in unfavourable treatment being afforded to imported products in violation of Article III:4 of the GATT 1994.  They concern, inter

375 Panel Report on EEC – Oilseeds, Op. Cit., para. 141 (emphasis added by the European Communities).

376 The European Communities refers to the Geneva Steel, Op. Cit., and Wheeling-Pittsburgh, Op. Cit., cases.

377 For the European Communities it is therefore clear that an analysis under Article III:4 has to be carried out at the level of an individual product, not at the level of the application of the law to all possible products.  Any individual product must be treated no less favourably than a like domestic product – and this in all cases.

378 Brooke Group, Op. Cit.

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