WT/DS162/R/Add.1 Page 80
According to Japan, this complementarily does not avoid a violation of Article III:4 of the GATT 1994. The complementarily does not relate to the origin of the goods, but to the discrimination. Japan considers that the situation is similar to that addressed by the panel in United States - Section 337. Less favourable treatment is inherent because, due to the two avenues for liability, the importer or seller of imports is regulated by a separate regime. The seller of domestic goods need comply only with the Robinson-Patman Act.
Japan argues that subjecting US goods to no more favourable treatment than imported goods receive under the 1916 Act would require that the United States apply similar penalties and make available similar remedies for equivalent cases involving US goods. This would require legislation which would render US producers liable for equivalent penalties when they sold their goods in the United States at lower prices than on foreign markets under similar conditions to those set out in the 1916 Act. In its third party statement, the European Communities explained that this would require legislation along the following lines:
"It shall be unlawful for any person producing any Articles in the United States, commonly and systematically to sell such Articles within the United States at a price substantially less than the actual market value or wholesale price of such Articles in the market of any foreign country to which they are commonly exported, after deducting from such market value or wholesale price, freight, duty, and other charges and expenses necessarily incident to the importation and sale thereof in the United States: Provided, That such act or acts be done with the intent of destroying or injuring an industry in the United States, or of preventing the establishment of an industry in the United States, or of restraining or monopolising any part of trade and commerce in such Articles in the United States."
Japan notes that the 1916 Act does not apply to such acts of US producers and nor does the Robinson-Patman Act. Such acts may in fact be conducted with impunity by producers of US goods (or at least not be subject to any other than the generally applicable laws). In other words, producers of US goods may do what producers of foreign goods may not. They may seek to use isolated non-US markets to obtain the high profits needed to allow them to sell at low prices in the United States. Imported goods are therefore treated less favourably than US goods and this is contrary to Article III:4 of the GATT 1994.
Japan argues, furthermore, that the 1916 Act violates Article III:4 of the GATT 1994 because it otherwise causes imported products to be treated less favourably than domestic products with respect to the US regulation of price discrimination. As the court in Wheeling-Pittsburgh succinctly stated, "there is no requirement under the Constitution or elsewhere that Congress impose the same standards of conduct on the importers of goods as it does on domestic producers of goods".264 The quick comparison below of the 1916 Act with the Robinson-Patman Act demonstrates that the US Congress has not hesitated to take advantage of this rule.
Specifically, Japan contends that:
bringing a 1916 Act claim is easier than bringing a Robinson-Patman Act claim because of the differing pleading requirements;
establishing and winning a 1916 Act claim is easier than establishing a Robinson-Patman Act claim, because the standards for obtaining relief under the 1916 Act are much lower than those for obtaining relief under the Robinson-Patman Act;
264 Japan refers to Wheeling-Pittsburgh, Op. Cit., p. 602.