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WT/DS162/R/Add.1 Page 120


In the view of the European Communities, this is in particular the case of measures such as the 1916 Act, which have enormous harassment value in the hands of domestic producers who wish to intimidate importers.  The Geneva Steel and Wheeling-Pittsburgh cases illustrate this eloquently.  These cases which will take years, if not decades, to complete present importers with the prospect of enormous but uncertain potential liability  – treble damages plus attorney fees.  In these cases, the more unclear the law is, that is the more interpretations it is susceptible of, the more disruptive it is for importers.  Indeed, as Japan has explained, many importers prefer to settle than go through this process.  But they pay a high price.388


In view of the foregoing the European Communities submits that the 1916 Act, as such, precludes compliance with WTO antidumping provisions relied upon in the present dispute as well as with Article III:4 of the GATT 1994.

(b) The nature of the 1916 Act


The European Communities considers that the 1916 Act is mandatory legislation within the meaning of GATT 1947 and WTO practice.  According to that practice, mandatory measures are those which, under national law, require the executive authority to impose a measure.  For example, in the United States - Non-Rubber Footwear case:

"[…] the Panel examined whether this legislation as such is consistent with Article I:1.  The Panel noted that the CONTRACTING PARTIES had decided in previous cases that legislation mandatorily requiring the executive authority to impose a measure  inconsistent with the General Agreement was inconsistent with that Agreement as such, whether or not an occasion for the actual application of the legislation had arisen.  The Panel recalled that the backdating provisions of the two Acts are mandatory legislation, that is they impose on the executive authority requirements which cannot be modified by executive action, and it therefore found that these provisions as such, not merely their application in concrete cases, have to be consistent with Article I:1."389


For the European Communities, it is apparent from the foregoing that the definition of mandatory legislation in WTO practice does not correspond to the really extraordinary one which the United States has repeatedly put forward in its submissions.  In other words, not only it is not necessary for legislation to be "mandatory" to be challenged per se as inconsistent with WTO obligations.  The "mandatory legislation" class is also not limited to laws "susceptible to no interpretation which would be consistent with U.S. WTO obligations".


In the view of the European Communities, the United States appears to be invoking (and confusing) two different issues.  The first is the discretion in the application of legislation and the second is the pretended ambiguity in the interpretation of the legislation.  On the second issue, the simple truth is that not even one of the possible interpretations referred to by the United States

388 On the same issue, the European Communities queries what would be the position if a WTO Member were to adopt an antidumping law that was so outrageous or unclear that no importer or exporter ever bothered to defend itself but stopped selling its products immediately it was threatened with action.  According to the United States, no WTO action could be taken unless a duty is actually imposed (which does not happen) or another Member can prove that there is no possible way of interpreting or applying the law that would be compatible with WTO provisions.  In the view of the European Communities, not only is this result unacceptable as such, it is also completely contrary to Article XVI:4 of the WTO Agreement.

389 United States – Non-Rubber Footwear, Op. Cit., para. 6.13 (emphasis added and footnote omitted by the European Communities).

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