WT/DS162/R/Add.1 Page 10
determining and remedying liability set out in the Anti‑Dumping Agreement. A Member may not import standards from other sources.
Japan asserts that, contrary to the US assertion, the instant case does not closely resemble United States – Tobacco.32 The text of the 1916 Act is not susceptible to a range of meanings. It requires WTO-inconsistent action. Thus, the US claim that the 1916 Act is susceptible to WTO‑consistent interpretation is completely without merit.
Japan further argues that, even if the US assertion were correct - which it is not - it would be irrelevant and would not justify the WTO inconsistency of the 1916 Act. The United States cannot hide its WTO violations behind inconsistent enforcement of one of its laws by US courts. The position urged by the United States would completely undermine the goals of consistency and predictability which the GATT 1947/WTO system seeks to achieve.
Japan notes, moreover, that it contradicts Article XVI:4 of the WTO Agreement and, in the present proceedings, Article 18.4 of the Anti‑Dumping Agreement. Each Member must conform its laws, regulations and administrative procedures to the provisions of the WTO agreements. The US courts' inconsistent interpretations of the 1916 Act is a blatant challenge to this important, systemic WTO principle.
Japan considers that the United States has not conformed its laws to its WTO obligations. Thus, it is in violation of Article XVI:4 of the WTO Agreement and Article 18.4 of the Anti‑Dumping Agreement, which establish similar and specific obligations. Article XVI:4 sets forth Members' obligation to ensure the consistency of domestic laws, regulations and administrative procedures with the WTO agreements. This Article is general in scope, applying to all WTO agreements, including the GATT 1994 and the Anti‑Dumping Agreement. Article 18.4 is reflective of the general obligation set out by Article XVI:4 as it applies to anti‑dumping. In addition to the general obligation to "ensure the conformity" of domestic laws, regulations and administrative procedures, Article 18.4 imposes an additional obligation to ensure conformity by "tak[ing] all necessary steps, of a general or particular character".
According to Japan, the 1916 Act is inconsistent with US obligations under WTO provisions and, thus, the United States has violated Article XVI:4 of the WTO Agreement and Article 18.4 of the Anti‑Dumping Agreement by failing to conform the Act to its WTO obligations. The fact that a law provides for WTO-inconsistent action is sufficient to establish a violation, even if there is a possibility of WTO-consistent action. If the Panel for some reason were to find that the 1916 Act is not mandatory, then this obligation, rather than the mandatory/discretionary dichotomy drawn from GATT 1947 precedent, should apply in the present dispute.
Japan asserts, furthermore, that the US position contradicts previous GATT 1947 and WTO panel and Appellate Body judgements. In this connection, the "sound legal basis" principle set forth in the India - Patents Appellate Body Report is instructive. In India - Patents, the panel and the Appellate Body upheld the US claim that a domestic law can violate a WTO provision not simply because it mandates WTO-inconsistent action, but also because it fails to provide "a sound legal basis" for the administrative procedure required to implement WTO obligations.33 The panel and Appellate Body found that Members' laws and regulations must have "sound legal basis" for
32 Japan refers to United States - Tobacco, Op. Cit., para. 118.
33 Japan refers to the Panel Report on India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, adopted on 16 January 1998, WT/DS50/R, para. 7.28; and the Appellate Body Report on India – Patent Protection for Pharmaceutical and Agricultural Chemical Products adopted on 16 January 1998, WT/DS50/AB/R, para. 36 (hereinafter "Appellate Body Report on India – Patents").