WT/DS162/R/Add.1 Page 31
Japan submits that, in any event, the present proceeding does not require the Panel to promulgate a rule of general application or otherwise burden itself by trying to elucidate the distinction between anti‑trust laws and anti‑dumping laws.103 Japan clarifies these distinctions only to help the Panel better understand the 1916 Act's inconsistency. When one focuses on the conduct regulated by the clear, unambiguous text of the 1916 Act, the character of the Act is manifest. It regulates dumping. The issue is not one of anti‑trust, and this Panel's judgement in Japan's favour will have no bearing on Members' anti‑trust laws.
The United States considers that Japan's conclusion that competition laws never protect competitors, but only the competitive process is simplistic. First, the Robinson‑Patman Act arguably addressed the protection of competitors, as well as competition, in "primary line" cases prior to the 1993 Brooke Group decision, and still does so in the "secondary line" context. Second, the United States finds it difficult to grasp how the Japan Fair Trade Commission's "Guidelines Concerning Unfair Price Cutting" protect competition rather than competitors, as Japan claims. This one measure led to 599 "cautions" to enterprises in FY 1998 alone, according to Japan. The Guidelines themselves state at Section 3(2) that
"[…] the second characteristic of unfair price‑cutting is the fact that it "tend[s] to cause difficulties to the business activities of other entrepreneurs."
In response to a question of the Panel regarding the basic features of anti‑dumping laws as opposed to anti‑trust laws, Japan reiterates its view that anti‑trust statutes protect competition, not competitors and regulate competition within a country. In contrast, anti‑dumping statutes protect domestic industries from the unfair practice of dumping by foreign competitors. More particularly, anti‑dumping laws regulate the price differential between sales in two countries. Careful comparison of those fundamental differences between anti‑dumping and anti‑trust laws enables one to conclude that the 1916 Act is not intended for anti‑trust purposes.
The United States, in reply to the same question of the Panel, considers that anti‑dumping rules and competition laws have different objectives, are founded on different principles, and seek to remedy different problems. Anti-dumping rules are not based on the economic assumptions that underlie most Members' competition laws, nor are they intended as a remedy for the predatory pricing practices of firms or as a remedy for any other private anti-competitive practices typically condemned by competition laws. Rather, the anti‑dumping rules are a trade remedy which WTO Members have agreed is necessary to the maintenance of the multilateral trading system. Without this and other trade remedies, there could have been no agreement on broader GATT 1947 and later WTO packages of market-opening agreements, especially given the imperfections which remain in the multilateral trading system.
The United States argues that, as a trade remedy, the anti‑dumping rules are triggered only in response to the practice of "dumping," i.e. a situation where an exporter sells its product abroad at lower prices than it does at home or at prices that are below cost, which causes "material injury" to
103 Japan refers to the Appellate Body Report on United States - Shirts and Blouses, Op. Cit., p. 23, where it is stated that "Article 3.2 of the DSU states that the Members of the WTO "recognize" that the dispute settlement system "serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law" (emphasis added). Given the explicit aim of dispute settlement that permeates the DSU, we do not consider that Article 3.2 of the DSU is meant to encourage either panels or the Appellate Body to "make law" by clarifying existing provisions of the WTO Agreement outside the context of resolving a particular dispute. A panel needs only address those claims which must be addressed in order to resolve the matter in issue in the dispute." (emphasis in original).