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WT/DS162/R/Add.1 Page 119

4.2

The European Communities submits that the fact that laws as such may be inconsistent with WTO provisions is further confirmed by Article XVI:4 of the WTO Agreement.385  The types of provisions referred to in Article XVI:4, and certainly laws, like the one at issue in the present dispute, are by definition measures of general application.  Therefore, Article XVI:4 recognizes in general terms that laws must per se conform with WTO provisions - and may thus be challenged as per se inconsistent if Members fail to bring them into conformity.  In doing so, Article XVI:4 draws no distinction between mandatory or "non-mandatory" and "discretionary" laws.

4.3

The European Communities argues that in the present case the possibility to challenge the 1916 Act regardless of its concrete applications also results from the very nature of the WTO obligations on which Japan's claims are based.  As regards the WTO provisions on dumping, the European Communities has already pointed out that they constitute a complete regulation of whether and under which conditions action against dumping can be taken.  Within that regulation, in view of the dangerous impact on the market of a practice that the WTO drafters have, under certain conditions, considered objectionable and therefore "to be condemned", the same drafters have also authorized individual Members to react and unilaterally sanction a violation of those provisions.386  The WTO Members have however committed not to take antidumping action outside the conditions laid down in the relevant WTO provisions, including those relied upon in the present dispute.  Approving or maintaining legislation which is per se contrary to this commitment effectively removes the guarantee, offered by the United States when accepting Article VI of the GATT 1994 and the AntiDumping Agreement, that it will not take antidumping action outside the conditions laid down in such rules.387

4.4

The European Communities further contends that the US approach according to which "Japan must demonstrate that there is no interpretation of the 1916 Act that would be WTO-consistent" and "the Panel must determine whether the 1916 Act is susceptible to an interpretation which is WTO-consistent" is fundamentally flawed.  Even if it is possible to imagine an interpretation of the 1916 Act which is WTO-consistent (quod non), the European Communities contests that this disposes of the matter.  The United States has not sought to argue that the interpretation given to the 1916 Act in Geneva Steel and Wheeling-Pittsburgh is consistent with the WTO, only that these are not "final decisions" and that other courts have expressed different views.  For the European Communities, the mere fact that the 1916 Act is susceptible to an interpretation that is contrary to Article VI of the GATT 1994 would be sufficient to establish its inconsistency with that provision because it removes the commitment not to take antidumping action outside the conditions laid down in WTO provisions.

385 The European Communities refers to the text of Article XVI:4 of the WTO Agreement.  The text reads as follows:

"Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements." (emphasis added by the European Communities)

386 The European Communities notes that this, however, constitutes a departure from the general rule that violations of the WTO agreements, and therefore their sanctioning, should not be done unilaterally.  In this regard, the European Communities refers to Article 23.1 of the DSU which states the following:

"When Members seek the redress of a violation of obligations or other nullification or impairment of benefits under the covered agreements or an impediment to the attainment of any objective of the covered agreements, they shall have recourse to and abide by, the rules and procedures of this Understanding." (emphasis added by the European Communities).

387 The European Communities notes, with regard to Article III of the GATT 1994, that the reason why a law as such can result in a violation have already been sufficiently clarified in GATT 1947 and WTO practice.  The European Communities recalls that Article III protects competitive opportunities and the expectations not to be put at a disadvantage on the market.

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