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WT/DS162/R/Add.1 Page 123

to respect WTO rules thus results directly from the presence of those rules in the Agreement and its annexes and Article XVI:4 of the WTO Agreement would be reduced to redundancy if interpreted as not containing an additional and different obligation.  The European Communities further contends that Article XVI:4 of the WTO Agreement also goes beyond the elimination of the "grandfather clause" of the Protocol of Provisional Application (PPA), since this is effected in the introductory text of the GATT 1994.


For the European Communities, Article XVI:4 of the WTO Agreement is not simply an obligation to avoid violating the WTO agreements.  It is also an obligation to take positive action to ensure that nothing in the "laws, regulations and administrative procedures" is not in conformity with the WTO agreements, that is nothing in them contains conditions or criteria or powers to take action which conflict with those agreements.394


According to the European Communities, this has already been recognized by the Appellate Body in the India patent case.  In that case both the Panel and the Appellate Body upheld an US claim that domestic law can be inconsistent with WTO provisions not merely because it mandates WTO-inconsistent actions, but also because it fails to provide "a sound legal basis"395 for the administrative procedures (or any other executive action) required to implement WTO obligations.  The underlying rationale was that in the absence of a sound legal basis for mailbox patent applications in domestic law, the basic objective of WTO law, namely to create predictable conditions of competition, could not be achieved.


For the European Communities, it is clear that the 1916 Act also does not provide such "sound legal basis" for implementation of Article VI of the GATT 1994 and the AntiDumping Agreement.  Its wording conflicts with Article VI of the GATT 1994 and the AntiDumping Agreement in the ways that the European Communities has explained.  The United States seeks to deflect attention from this obvious fact by arguing that certain courts have suggested that the 1916 Act may have some characteristics of antitrust legislation.  However, this kind of categorisation is irrelevant because it does not address – let alone solve – the basic issue in the present dispute: whether the price discrimination practice described in the 1916 Act is also covered by WTO rules on dumping and whether the discipline of that practice laid down in the 1916 Act is consistent with WTO obligations.


The European Communities considers that the above-mentioned case law, even taken together with the extrapolations thereof which the United States seeks to make and suggest may be adopted in the future, are a long way from "ensuring conformity" with Article VI of the GATT 1994 and the AntiDumping Agreement.  On the contrary, by granting remedies which are not allowed by WTO antidumping rules and under conditions which are not those established in WTO antidumping rules, that case law is in itself a violation of US obligations.


The European Communities further contends that the two most recent decisions of US courts396 actually interpret and allow the 1916 Act to be applied in a way which even the United States implicitly accepts would violate those provisions (since its only defence of them is to suggest that they do not represent the prevailing weight of US judicial interpretation).  These decisions constitute, for the time being, the final expression of the judicial authority in the cases in which they have been pronounced.  Up until their reversal by a contrary decision, they stand.

394 The European Communities again refers to the text of Article XVI:4 which reads:

"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)

395 The European Communities refers to India – Patents, Op. Cit., para 58.

396 The European Communities refers to Geneva Steel, Op. Cit.; Wheeling-Pittsburgh, Op. Cit.

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