WT/DS162/R/Add.1 Page 65
Japan considers that this simple explanation demonstrates the obviousness of the many inconsistencies of the 1916 Act with the WTO anti‑dumping regime. The 1916 Act is an anti‑dumping law. Thus, it must comply with Article VI of the GATT 1994 and the provisions of the Anti‑Dumping Agreement. However, it quite obviously does not.
Japan asserts, therefore, that the 1916 Act violates US obligations under Paragraph 2 of Article VI of the GATT 1994 and Article 18.1 of the Anti‑Dumping Agreement because it provides that various penalties, including fines, imprisonment and treble damages, may be imposed for violations of the Act. Article VI:2 limits the remedy applicable to dumping to one remedy - anti‑dumping duties of a specified amount.232 In contrast, the 1916 Act provides for fines, treble damages and imprisonment and, thus, violates paragraph 2 of Article VI and Article 18.1 of the Anti‑Dumping Agreement.
The United States argues that Article VI of the GATT 1994 and the Anti‑Dumping Agreement do not govern all measures directed at dumping. Japan's interpretation that Article VI:2 of the GATT 1994 and Article 18.1 of the Anti‑Dumping Agreement establish that anti‑dumping duties are the exclusive remedy for injurious dumping is contradicted by the ordinary meaning of the terms used by the two Articles in question. In addition, Japan conveniently ignores the footnote to Article 18.1 of the Anti‑Dumping Agreement. These Articles ‑ and, in particular, Article 18.1 ‑ provide that a Member may take a measure against injurious dumping even when such measures are not explicitly set forth in Article VI of the GATT 1994 or the Anti‑Dumping Agreement, as long as the measure is not inconsistent with other provisions of the GATT 1994.
In the view of the United States, nothing in Article VI:2 of the GATT 1994 addresses whether anti‑dumping duties are the exclusive remedy for dumping. Japan itself argues that Article VI was meant to provide an exception to the prohibition on tariffs above the bound rate as laid down in Article II of the GATT 1994 – i.e. not to provide the only remedy for dumping. Moreover, paragraph 2 simply states that a Member "may" levy an anti‑dumping duty to offset or prevent dumping. It does not in any way suggest that remedies for dumping other than anti‑dumping duties are prohibited. ‑dumping duties. If the word "only" had been intended, the text could and would have said so.
The United States contends that, contrary to Japan's argument, the negotiating history of Article VI does not support its position that anti‑dumping duties are the exclusive remedy for dumping. The negotiating history shows that the GATT 1947 originally included a paragraph in Article VI - paragraph 7 - providing in pertinent part:
"No measures other than anti‑dumping […] duties shall be applied by any contracting party […] for the purpose of offsetting dumping […]."233
However, paragraph 7 lasted only about one year. Article VI was modified soon after the GATT 1947 came into force, with the initial relevant discussions on this matter taking place in early 1948 during the "Havana Conference", which addressed the draft charter of the International Trade Organization ("ITO"), a document which was similar in many respects to GATT 1947.
The United States notes that at that time, members of the Subcommittee on Article 34 considered a provision in the draft ITO charter, identical to the original paragraph 7 of GATT 1947 Article VI, and decided to remove it. The record of these discussions explains:
232 Japan also refers to Article 18.1 of the Anti‑Dumping Agreement which states that "[n]o specific action against dumping of exports from another Member can be taken except in accordance with the provisions of GATT 1994, as interpreted by this agreement." (footnote omitted by Japan)
233 Reproduced in GATT, , 6th ed. (1995), p. 238.