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WT/DS162/R/Add.1 Page 9

may have to a range of possible meanings is ultimately of no consequence because the 1916 Act remains different from an antidumping statute under the entire range of conceivable interpretations.  


Japan considers that, contrary to what the United States may assert, the 1916 Act is "mandatory" in the sense that the term is used in the WTO.  If a court finds that a plaintiff has established the elements of the offence (the dumping element and the injury element29), the court "shall" impose penalties under the Act.  It must impose sanctions.  This is required by the text of the Act, and is not contested by the United States.


Japan notes that the fact that a US court has stated that the 1916 Act has antitrust as well as antidumping elements is inapposite.  The 1916 Act applies to conduct commonly understood to be dumping and it mandates that a court finding a violation impose penalties specified in the 1916 Act.  The court has no discretion; once it has found the defendant guilty, it must impose penalties.


Japan recalls the recent statement by the panel in Canada - Measures Affecting the Export of Canadian Aircraft that in contrast to legislation granting executives authority to act inconsistently with the WTO

"[…] panels had consistently ruled that legislation which mandated action inconsistent with the General Agreement could be challenged as such […]."30

Thus, the 1916 Act is mandatory.


Japan contests the US claim that the 1916 Act is not mandatory because it is susceptible to WTO-consistent interpretation.  In Japan's view, the United States implies that if there is room for interpreting the 1916 Act in a  GATT/WTO-consistent manner, the 1916 Act is not WTOinconsistent.  Making use of this mandatory or discretionary argument, the United States seems to insist that a domestic law susceptible to multiple interpretations would not violate GATT 1947/WTO obligations.  The United States tries to justify its inconsistent application of the 1916 Act, using as a disguise an argument regarding whether the 1916 Act is mandatory or discretionary in nature.31


Japan argues, first, that the terms of the 1916 Act are quite clear.  The 1916 Act penalises a certain type of international price discrimination.  Regardless of whether a US court calls the 1916 Act an antitrust measure or an antidumping measure, the conduct the Act regulates remains the same.  No court has interpreted the 1916 Act so that the 1916 Act did not apply to international price discrimination in which an importer sells at a lower price in the United States than in its home markets, i.e. dumping.


Japan argues, second, that the United States emphasizes the conclusion of the court in Zenith III that, for a limited purpose, the 1916 Act should be treated as an antitrust law.   But, far from exonerating the United States, this US assertion is additional proof of the US violation.  The conduct regulated - that subset of international price discrimination commonly called dumping - did not change.  But the court applied antitrust standards to determine liability.  This, of course, is the core of Japan's case.  To regulate and remedy dumping, a Member must follow the standard for

29 In response to a question of the United States, Japan explains that by "injury element" it means "the intent of destroying or injuring an industry in the United States, or of preventing the establishment of an industry in the United States" as set forth in the text of the 1916 Act.   

30 Panel Report on Canada – Aircraft, Op. Cit., para. 9.124.

31 Japan considers that this argument is inapposite.  According to Japan, it would allow a Member to avoid its WTO obligations simply by wording a law so that it could be interpreted in a WTOconsistent fashion, even though the Member always or usually applied it in a WTO-inconsistent fashion.

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