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WT/DS162/R/Add.1 Page 85


The United States notes that it has not argued in the present dispute that Japan's claim under Article III:4 should be dismissed because the 1916 Act has not had any trade effects.  Although there may be some merit to that argument, the United States has chosen not to make it.  With regard to Japan's suggestion that "there should be no obstacle to repeal the 1916 Act", the United States considers that it should be summarily rejected.  Japan has failed to establish that the 1916 Act violates Article III:4, either on its face or as applied.  In the complete absence of such a showing, there is no reason to consider what, if any remedy, might otherwise be appropriate.


The United States also insists that it is not arguing, contrary to what Japan attempts to suggest, that the 1916 Act on the whole treats imported goods more favourably than the RobinsonPatman Act treats domestic goods and only in a few instances treats imported goods less favourably than the RobinsonPatman Act treats domestic goods.  In the instant dispute, the United States is arguing essentially that one element of a 1916 Act claim the requirement of a malicious or predatory intent renders the 1916 Act more favourable to importers and imported goods than is the RobinsonPatman Act to US sellers and their goods in every instance.  The courts have interpreted this requirement as virtually impossible to satisfy, and the historical applications of the 1916 Act squarely support this view, as there has never been a successful case brought under the 1916 Act.  The RobinsonPatman Act, in contrast, has been successfully invoked on innumerable occasions to obtain relief involving US sellers and their goods.  When this factor is taken into account to the extent that it might be capable of exerting an offsetting influence in each individual case, as it should be, the only reasonable conclusion is, again, that the 1916 Act treats importers and imported goods more favourably than the RobinsonPatman Act treats US sellers and their goods.


The United States notes, moreover, that this approach was followed by the panel in the United States - Section 337 case.  There, the panel explained that "an element of more favourable treatment would only be relevant if it would always accompany and offset an element of differential treatment causing less favourable treatment".279  The panel found that some of the procedural advantages given to foreign respondents under Section 337 operate in all cases, and therefore it "took these factors into account to the extent that they might be capable of exerting an offsetting influence in each individual case of less favourable treatment resulting from an element cited by the Community".280


Thus, in the view of the United States, it would be entirely appropriate for the Panel to begin and end its analysis of Japan's Article III claim based upon the fact that the intent requirement is virtually impossible to satisfy.


Finally, the United States disagrees with Japan inasmuch as Japan claims that the panel report in EEC Oilseeds stands for the proposition that "the mere possibility that a measure may result in less favourable treatment of imported products is sufficient to establish a violation of Article III:4 of GATT 1994".  This case does not stand for such a broad proposition.  If that were the test, that would mean that the mandatory/nonmandatory distinction could not apply in Article III cases.  By definition, the mandatory/nonmandatory distinction asks the question whether a WTOconsistent application is possible.  As we have pointed out, however, this distinction has been applied by panels considering Article III claims including, for example, United States Superfund and Thailand – Cigarettes.  In the EEC Oilseeds case, the question was one of de facto discrimination under Article III.  The panel considered whether the facts could result in less favourable treatment even though on its face the measure treated imported products no less favourably.   In the present case, there is no possibility that the facts may result in unfavourable treatment because, as the United States

279 The United States refers to United States – Section 337, Op. Cit., para. 5.16.

280 The United States refers to ibid., para. 5.17.

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