WT/DS162/R/Add.1 Page 84
The United States notes that, on appeal, the Third Circuit Court of Appeals noted that under Article XVI of the 1953 Treaty of Friendship, Commerce, and Navigation with Japan, "national treatment" was defined as "treatment accorded within the territories of a Party upon terms no less favourable than the treatment accorded therein, in like situations, to […] products […] of such Party." The Court of Appeals concluded that:
"[…] application of the 1916 Act to goods imported into or sold in the United States [did not violate] the mandate of Article XVI to accord “national treatment” to Japanese products sold in the United States. […] For the reasons stated above, we hold that application of the 1916 Act to Japanese‑made [consumer electronics products] sold in the United States does not violate Article XVI of the Treaty."276
The United States argues that, consistent with these pronouncements, comparing the provisions of the 1916 Act with those of the Robinson‑Patman Act clearly establishes that the 1916 Act actually provides more favourable treatment than the Robinson‑Patman Act in many ways ‑ which Japan fails to address ‑ and, in any event, does not in any instance provide less favourable treatment.
Japan points out, first of all, that the United States has the burden to prove that national treatment for imported products is secured even though there is a separate regime for imported goods. The United States, however, fails to prove why a separate legal scheme is necessary in spite of the fact that both domestic and imported goods are subject to the Robinson-Patman Act.
In response to a question of the United States regarding the basis for the Japanese assertion that the United States carries the burden of proof, Japan argues that it has demonstrated that, as a textual matter, the 1916 Act constitutes a prima facie violation of Article III:4 of the GATT 1994. Under the rules on burden of proof established by the Appellate Body in United States Shirts and Blouses277, the onus of disproving Japan's claim has shifted to the United States. Unfortunately, rather than accepting and attempting to meet this burden, the United States has tried to mire both Japan and the Panel in an unnecessary procedural debate. This is yet another attempt by the United States to avoid the important issues of the instant dispute.
Japan further considers the US argument regarding the historical applications of the 1916 Act to be irrelevant. As stated in the EEC - Oilseeds panel report, the mere possibility that a measure may in some circumstances result in less favourable treatment of imported products is sufficient to establish a violation.278 Such is clearly the case in the instant case. Japan also notes that if the US assertions are correct, there should be no obstacle to repeal the 1916 Act.
Japan also argues that the issue is not which law plaintiffs use more often – the two laws are not interchangeable and do not even apply to the same conduct. Rather, the issues are: (i) does the 1916 Act provide a separate form of liability applicable to foreign but not todomestic traders? and (ii) if a company were to proceed with equivalent claims under each law, which would be easier to prove? The 1916 Act does impose additional liability on foreign traders and a plaintiff more easily can establish a claim under the 1916 Act. Moreover, in regard to the second issue, the US logic is confused. The 1916 Act historically has not been used a great deal because industries relied on the Tariff Act of 1930 to address dumping. Now, however, interest in using the 1916 Act is increasing as companies realise its many advantages. And, of course, analogous primary-line Robinson-Patman Act cases have ground to a halt since Brooke Group, due to the added pleading and proof requirements.
276 In re Japanese Electronic Products II, Op. Cit., p. 324.
277 Japan refers to the Appellate Body Report on United States – Shirts and Blouses, Op. Cit.
278 Japan refers to EEC – Oilseeds, Op. Cit., para. 141.