CHAPTER – I
SYNOPSIS
The “Standard of Review” is an important concept in the World Trade Organization dispute settlement system. The issue of Standard of review is generally procedural in nature. It defines the ‘margin of appreciation’ which panels and appellate body grant national authorities in enacting and enforcing their obligation under WTO Agreements.[1]
The WTO agreements imposes a variety of legal obligations on the member states. Whenever a question is raised as to the violation or non compliance of a member state’s law or measure (national decisions or policies) with respect to such legal obligations being imposed by WTO Agreements, the panel or the appellate body are being set up.[2] Such bodies are set up by the WTO in order to review such actions of the member states on the basis of whether they are inconsistent with WTO Law or not.[3]
The Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)[4]regulates and governs the World Trade Organization Dispute Settlement System. The significance of provision laid down under Article 3.2 of DSU[5] in reference to the issue of Standard of Review is as follows:-
a) First part of Article 3.2 of DSU provides information regarding the methods that the panel or appellate body has to follow in interpreting the WTO Agreements. Further, this provision provides a clear obligation to apply ‘customary rules of interpretation of public international law’ in interpreting such covered agreements under the WTO.
b) Secondly, the last sentence of Article 3.2 of DSU clearly mentions that the recommendations and rulings made by the DSB cannot add or diminish the rights and obligations provided under the covered agreements.
The function of DSU is to provide an appropriate mechanism of settlement of disputes between WTO members.
There are two means of Dispute Settlement under the WTO. They are:-
i] Consultations under Article 4 of the DSU.
ii] Proceedings before the Panel [Article 6 and Article 11 regulated through Article 1 and 19 of the DSU] AND Proceedings before the Appellate Body [Article 17 to Article 19 of the DSU].
Article 3.2 and Article 11 of The Understanding on Rules and Procedures Governing the Settlement of Disputes, (DSU) provides for the panel jurisdiction regarding the standard of review in WTO disputes.
The researcher, in this project, is specifically trying to deal with the issue of changing standard of review in the WTO Dispute Settlement System. Also Article 17.6 of the Anti Dumping Agreement provides for the basis of the applicable standards of review as it has drafted the legal framework and specified how the concept of standard of review can be adopted.
This present research project is divided into five chapters. The researcher has tried to deal with each research question individually in separate chapters.
Statement of Problems
In this research, the researcher has mainly dealt with the problems of changing Standard of Review in the WTO Dispute Settlement System by the Panel as well as the Appellate Body. Here in this enactment i.e. under the Understanding on Rules and Procedures Governing the Settlement of Disputes, there are certain inadequacies which are needed to be highlighted.
Till date, the WTO Panel has failed to mention in its reports, the importance and objectivity of Article 3.2 DSU with respect to the issue of Appropriate Standards of Review.
Article 11 of DSU does not specifically mention about the appropriate Standard of Review to be applied by the WTO Panel and Appellate Body in the WTO Dispute Settlement System.
If there is a dispute between Article 11 of the DSU AND Article 17.6 (ii) of the Anti - Dumping Agreement, neither the WTO Panel nor the Appellate Body ruled that which provision shall prevail over the other.
Also, there is no applicable approach of review as to the ‘Objective Assessment of the matter’ by the WTO Panel under Article 11 of the DSU. There is no explicit explanation given by the Article 11 of the DSU as to whether it promotes the judicial restraint towards factual issues.
There is inconsistency between the WTO Panel and Appellate Body stand with respect to the standard of review applied by the WTO Panel in the WTO dispute and the Appellate Body’s appellate review on it under article 17.6 of the DSU.
As the Uruguay Round of multilateral trade negotiations failed to state as to what should be the appropriate standard of review (i.e. de novo review or total deference) shall be applied by the WTO Panel or the Appellate Body in deciding the WTO disputes, initially it really had the adverse effect on the outcome of a case.
What level of discretion does the panel can use in application of standard of review has also not been discussed. The negotiators of the Uruguay Round only came to a consensus on the concept of Standard of Review in the WTO Dispute Settlement System. The Appellate Body’s Appellate review regarding the Panel’s decision on WTO disputes also raises concern as there is a Appellate Body is tending to adopt a complete de novo approach in deciding the appropriate review by the Panels.
The researcher has first dealt with the meaning of the Standard of Review in the WTO DSS. Judicial restraint doctrine has also been explained by the researcher in brief. In this Research, the Researcher will try to point out whether the Panel has approved of the application of Judicial Restraint over Factual Issues or not by discussing the Panel Report in the case of US-Woven Wool Shirts And Blouses and India-Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products.
Secondly, the researcher will discuss the cases study of AB reports in reviewing the WTO Panel’s factual decisions in the case of EC-Hormones, US-Wheat Gluten and finally the US- Oil Country Tubular Goods Reviews (Argentina) in order to determine whether there is deferential approach by the Appellate Body in reviewing the Panel’s factual Findings.
Ultimately, the researcher will try to find out the relationship between the Art.11 of the DSU and 17.6 of AD Agreement by referring the case study of US – Hot Roll Steel Case (AB Report) in this regard.
Research Questions
The researcher in dealing with the aforementioned problem is going to deal with the following research questions which will suffice the object and purpose of the research. They are mentioned hereinbelow:-
q Does WTO Panel promotes Judicial Restraint over factual issues?
q What Standard of Review shall be applied by Appellate Body to a Panel’s legal and factual conclusions challenged in Appellate Review?
q Does Art.11 of DSU provides lesser deferential Standard of Review than Art.17.6 of AD Agreement?
Hypothesis
In this research, the researcher shall proceed upon with the hypothesis that as Article 11 of the DSU clearly provides for objective assessment of facts by the WTO Panel, therefore it clearly promotes judicial restraint. Also, the Appellate Body cannot review the decisions given by Panel with respect to the Panel’s Factual Findings as it is outside the scope of Appellate Body’s Jurisdiction.[6] Due to the particular factual circumstances vary in each individual case, it is very difficult to compare the degree of deference applied by the WTO Panel and Appellate Body.
Objectives of the Study
The general objective of the research work is to study the pattern of Changing Standards Of Review of Panel and Appellate Body in WTO Dispute Settlement System with respect to Domestic Law. The particular objective of the researcher is to extensively study the changing standard of review in the WTO Dispute Settlement System by referring several cases and to find out whether there is a consistent practice of appropriate Standard of Review made by WTO Panel or Appellate Body.
Scope of the Study
The researcher has focused purely on the Standard of Review being applied by the WTO Panel or Appellate Body with respect to factual issues. Also the researcher has dealt with the relationship of Art.11 of the DSU with that of Art. 17.6 of the AD Agreement. In this research the researcher has focused on the Art. 3.2 and Art. 11 of the DSU as they provide for the panel jurisdiction regarding the standard of review in WTO disputes.
The researcher has also dealt with the issue of Article 17.6 (w.r.t. its relation with Art. 11 of the DSU) of the AD Agreement as it provides for the basis of the applicable standards of review as it has drafted the legal framework and specified how the concept of standard of review can be adopted.
The primary evidence used in this research includes the text of the DSU, the text of the judgment of the WTO as rendered in several cases, the contentions of the parties to the dispute and finally the Panel or the AB Report on such cases. The secondary evidence used in this research includes various articles, commentaries and other research papers on this particular topic as have been founded and used by this researcher for this research project. The researcher has relied heavily on various works of other scholars on this topic which have ultimately proved very helpful in providing useful and effective material for this instant project.
Research Methodology
The methodology followed in this research will be purely doctrinal in nature. This research is purely based on the Panel/AB Reports of various cases and the decision rendered in each particular case (w.r.t. the applicability of Judicial Restraint/deference And the Standard of Review being applied by them); therefore the researcher will be dealing mainly with the doctrinal material available w.r.t the case laws and will do an extensive study on the abovementioned aspects. The research done by the researcher in this Project is of comparative and analytical nature.
The researcher will be taking the help of various primary sources such as the text of the DSU, the decision of the WTO AB, the Panel Reports, the arguments of the concerned countries etc. The secondary sources that the researcher will use are the various commentaries, journals, articles and papers relating to this particular case. The researcher will be making extensive use of both of such primary and secondary sources in this research.
Chapterization
The Chapterization of this research project is as follows:
CHAPTER - I
BACKGROUND OF STANDARD OF REVIEW IN WTO DISPUTE SETTLEMENT SYSTEM
URUGUAY Round negotiatiators left the issue of standard of review unattended. Only Article 17.6 of AD agreement provided for the method of adoption of Standard Of Review under the new WTO System. Article 11 does not expressly discusses the Interpretation of Jurisdiction of Article 11 of DSU being applied by the WTO Panel and the Appellate Body in applying Standard of Review. The Panel and Appellate Body Recognised the importance of Article 11 in providing Panel Jurisdiction to review the WTO disputes. This chapter will deal with all of the above in a short and concise manner. It will throw light upon the research methodology used and the tools used in this research. It will also contain the hypothesis of the research based on which the researcher has proposed to proceed. The various sources to which the researcher has turned to for information to help in this research have also been enumerated here.
CHAPTER – II
LITERATURE REVIEW
In this chapter the researcher will mention the name of the authors, writers and their work (Books, Articles) and critically examine them.
CHAPTER - III
WTO PANEL’S PROMOTION OF JUDICIAL RESTRAINT OVER FACTUAL ISSUES AND EXTENT OF APPLIED DEFERENTIAL STANDARD OF REVIEW IN DETERMINATION OF MEANING OF ‘DOMESTIC LAW’
The researcher provides that Article 11 does provide for the objective assessment of facts by the Panel to decide on judicial restraint over factual issues. The researcher is going to deal with the following sub-issues in this particular chapter. They are:
Ø Does Article 11 expressly provides promotion of Judicial Restraint over Factual Issues?
Ø Whether WTO panel approves or reject the aspect of Judicial Restraint in applying Standard of review?
Ø Is there any consistency of WTO Panel practice in this regard – Supported by comparative Case Study.
The researcher in this chapter is going to deal with substantial cases in order to prove that at first, the Panel and Appellate body had applied a more deferential Standard of Review. But, over the years they are applying less deferential Standard of Review.
CHAPTER – IV
APPELLATE BODY’S REVIEW OF WTO PANEL’S FACTUAL DECISION
The Researcher in this chapter is trying to find out the changing standard of review with respect to Appellate Body’s Review of Panel’s Factual Decision.
Ø Appellate Body’s Review of a Panel’s decision:
I] Based on Panel’s Purely Factual Findings
Ø Contrasting Decisions of Panel and Appellate Body reports
CHAPTER-V
RELATIONSHIP BETWEEN Art. 17.6 of AD AGREEMENT AND Art. 11 of the DSU
In this Chapter, the researcher will try to prove that Art. 17.6 of the AD Agreement is intended to prescribe a more deferential standard of review than provided under Art. 11 of the DSU.
CHAPTER-VI
CONCLUSION
The Researcher will deal with the conclusion in the concluding Chapter i.e. Chapter VI.
CHAPTER – II
LITERATURE REVIEW
The Researcher submits the evaluative report of information found in the Books and Articles relating to Standard of Review:
Book:
q Matthias Oesch on Standard of Review in WTO Dispute Resolution (2003) in Chapter I and its practicality under Chapter V which introduces the measures of Standards of Review to be applied by WTO Panel and AB which is either do novo or total deference. Under de novo standard of review the panel can completely replace its own findings with that of national authority and arrive at different factual as well as legal conclusion. Under the standard of review of total deference, the panel does not review the investigation done by national authority and limits itself to formal examination of whether the relevant procedural requirements for the adoption of the measure in question were complied with. The author in this book has argued that the measure in practicality adopted by the WTO Panel and AB is somewhat between the de novo and total deference which is correct as various WTO Panel and AB Reports suggests that there is no consistent practice of adoption of any particular measure. But the author has not been able to present a clear mechanism in support of his argument as to in what lines the measure is applied is not clearly mentioned. The researcher in this project has tried to determine the Panel practices and AB Review of Panel practices in adopting a measure in reviewing the measure adopted by the National Authority by referring certain case laws and has taken the help of this book in order to support arguments as to Panel and AB practice.
Articles:
· Bohanes Jan, Lockheart Nicolas in Standard of Review in WTO Law which is published in Bethlehem, Daniel, Mcrae Donald, The Oxford Handbook of International Trade Law (2012) has defined what is standard of review and application of deferential standard of review by the WTO Panel and AB. It has extensively dealt with the AB review of Panel’s purely factual as well as legal findings as well as Panel’s application of law as to facts. But, in this Article in the AB’S Review of Panel’s purely Factual findings the writers have failed to support their argument with respect to the Sunset Policy Bulletin scenarios as by discussing the cases of US-OCTG Reviews (Argentina) and US-Anti-Dumping Measures on OCTG (Mexico) they could not adequately explain as to the framework within which the AB has reversed the findings of the Panel’s Purely Factual Findings.
· Pei-San Tan in his Article of Decisions of the Appellate Body of the World Trade Organization Shirts and Blouses : United States - Measure Affecting Imports of Woven Wool Shirts and Blouses, available at:http://webcache.googleusercontent.com/search?q=cache:mLc05Ao-JBEJ:207.57.19.226/journal/Vol9/No1/sr1c.rtf+&cd=3&hl=en&ct=clnk&gl=in, has discussed the case extensively. The writer has successfully pointed out the expand the characterisation of the violation of the ATC. Previously, under the rule-exception approach, a violation of the ATC would involve the passing of a safeguard measure. Under the Shirts and Blouses approach the AB has held that, a violation of ATC would now enclose this as well as a failure to observe the conditions under which such a violation would be justified.
CHAPTER - III
WTO PANEL’S PROMOTION OF JUDICIAL RESTRAINT OVER FACTUAL ISSUES
The concept of Judicial Restraint is based on the doctrine that judge’s own policy predispositions should not be forced into the law and he should whenever possible (reasonably and in prudent manner), construe the law so as to avoid second guessing the policy decisions made by other governmental institutions such as the parliament or the state legislatures or the President.[7]
The researcher has tried to find out whether the Panel promotes the Judicial Restraint towards factual findings.
The researcher in this regard has discussed the case of
q US- Measure Affecting Imports of Woven Wool Shirts and Blouses from India (Panel Report).
§ Complainant: India
§ Respondent: US
· Facts[8]:
The US imposed such a transitional safeguard[9] measure restricting imports of woven wool shirts and blouses (category 440) from India. This measure was taken in accordance with Art. 6.3 of the ATC[10]. The US referred the matter to the TMB as required by Art 6.10 of the ATC. The TMB, after examining the matter, opined that the measure was consistent with the provisions of the ATC. India asked TMB to review its findings as of right under Art. 8.10 of the ATC. The TMB refused to review the case. Under Art 8.10 of the ATC, India brought the matter to the DSB and requested the formation of a GATT Panel.[11]
· Main Arguments by the Parties:
India argued that the conditions for application of procedural and substantive requirement under Article 6.2, 6.3, 6.7 and 6.10 are three-fold[12]. The US requests that the Panel must dismiss India’s claim as it had complied with the requirements of Article 6 of the ATC in that CITA (in its report) clearly showed that the particular product was being imported into the US in such increased quantities which caused serious damage to its domestic industry producing like or directly competitive products.[13]
· Panel’s Conclusion:
The Panel disagreed with the TMB and held that the United States had failed to comply with the requirements of Art. 6 of the ATC.[14]
The Panel in para 7.18 and 7.21 of its report stated that there were two different tracks a TMB Track and a DSU Track. Further, the TMB had a wide investigate authority than Panel as the Panel do not reinvestigate the market situation but rather limit themselves to the evidence used by the importing member in making its determination to impose the measure.[15]
These statements make it clear that the TMB, which has been set up to closely examine a national measure prior to a Panel, may give cause for Judicial Restraint to be applied. It may be inappropriate for Panels not to interfere with such special bodies factual conclusions as long as they are reasonable.[16]
According to the researcher at first, it seemed that the Panel did not consider it appropriate to apply particular Judicial Restraint towards factual findings established by the TMB prior to the Panel’s examination of the matter.[17]
However, there was rejection of Judicial Restraint by the Panel in the following case:
India-Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products (Panel Report)[18].
§ Complainant: US
§ Respondent: India
· Facts:
In this Case, the quantitative restrictions imposed by India on certain products were challenged by the US.[19] These particular quantitative restrictions imposed by India (which was challenged by the US under the WTO DSS), were notified by India to the WTO BOP. In June 1997, consultations were held by BOP in relation to the measures notified. BOP consulted the IMF in accordance with Article XV:2 of GATT 1994.[20] The United States opined that the Indian restrictions were contrary to the prohibition on quantitative restrictions under GATT 1994, and could not be justified under Article XVIII:11 of GATT 1994. Therefore, the U.S. initiated the case against India. The Panel under Article 13.1 of the DSU sought expert advice from the IMF in relation to India's balance-of-payments position.
· Main argument of the Parties:
India:
Ø Only the BOP Committee and the General Council under GATT 1994 had exclusive competence to review restrictions imposed for BOP purposes.[21]
Ø Justification for measures for BOP purposes should be considered in a political setting rather than by dispute settlement panels.[22]
Ø Conflicts may arise due to review by panels and in such an event the process involved within the BOP Committee would become redundant. [23]
US:
Ø Footnote 1 of the 1994 Understanding on Balance-of-Payments confirmed the availability of the dispute settlement procedures by citing Korea – Beef case to support the view that the Panel can review BOP related measures.[24]
Ø Import licensing would ban imports of any product, through the refusal of the DGFT and the relevant licensing authorities to issue licences or through a ban on imports by canalizing agencies, India’s import regime constituted not just a restriction but a prohibition on imports.[25]
Ø WTO DSS sets up the panels and the AB to evaluate specific issues. If India’s argument were accepted, then mere existence of any specialized body within the WTO with a review function would prevent dispute settlement under Article XXIII; [26]
Panels are generally set up to evaluate issues which may include issues of a non-legal nature. Art. 13 of DSU provides the Panel a right to seek information or advice from any individual or body which it deemed appropriate.[27] The panel further stated that they are not satisfied by India’s contention that the specialized issues involved in justifying the BOP measures will prevent Panels from examining such issues in accordance with Art. XVIII: B.[28]Further, the Panel discarded India’s plea that if the issue of BOP measures comes before the Panel, it should apply judicial restraint in order to maintain institutional balance between the Judicial and Political Organs within WTO.[29]
· Arguments of the Parties in the Appellate Body:
India:
Ø Continued to challenge the competence of panels in relation to BOP measures.
Ø The Panels had erred in not exercising Judicial Restraint towards the long and careful discussions of the committee on BOP Restrictions.
· AB Report:
The AB dismissed India’s claim and held that if the exercise of judicial restraint were in practice, to panels refraining from considering disputes regarding the justification of BOP restrictions, such exercise of judicial restraint would be inconsistent with Article XXIII of the GATT 1994, as elaborated and applied by the DSU, and footnote 1 to the BOP Understanding.[30]
CHAPTER - IV
APPELLATE BODY’S REVIEW OF WTO PANEL’S FACTUAL DECISION
The AB applies a de novo approach while reviewing the Panel’s purely legal findings.[31] In the EC-Hormones Case, one of the issues raised in this Appeal by EU was that whether the Panel made an objective assessment of the facts in accordance with Art.11 of the DSU. The EU alleged on appeal that the Panel failed to apply an appropriate standard of review in assessing acts and scientific evidence submitted by the EU. The Appellate Body stated that the SPS Agreement “itself is silent on the matter of an appropriate standard of review for panels deciding upon SPS measures of a Member” and claimed that it is beyond the scope of the appellate body to adopt a standard of review that is not contained in the SPS Agreement.[32] A major part of the EU’s claims on appeal focused on whether or not the Panel objectively reviewed the evidence, scientific opinions and statements submitted by the EU. The EU charged that the Panel repeatedly “disregarded or distorted or misrepresented the evidence submitted by the European Communities and even the opinions expressed by the Panel’s own expert advisors.” The Appellate Body states that a wilful distortion or misrepresentation, or disregard of evidence would not be consistent with a Panel’s duty to perform an objective assessment of the facts and would constitute a denial of due process.[33] Thus, the AB reviewed the EU’s claims in great detail and examined the specific expert scientific opinions and studies at issue. The conclusive holding was that the Panel had not “arbitrarily ignored or manifestly distorted the evidence before it”. In sum, the use of expert groups, and method of convening The AB in its report had held that the determination of whether or not a certain event did not occur in time and space is typically a question of fact and is not the subject of Appellate Review.[34]
This decision gives a clear picture that there is substantial deference in the AB’s approach to Panel’s purely factual findings. In US – Wheat Gluten, the EC contention was as follows:-
i) that the Panel erred in interpretation and application of Art. 11 of DSU[35]
ii) that the Panel violated Art. 11 of DSU in review of the USITC determinations on profits and losses.[36]
iii) that EC alleges that Panel acted inconsistently with its obligations under Art. 11 of the DSU in failing to draw adverse inferences from the refusal of US to provide the Panel with information related from the USITC Report and other information requested by EC and the Panel.
The US contention is that:
i) Panel acted in accordance with Article 11 of the DSU. It is the requirement of this Article that Panel must conduct objective assessment and it depends on the nature of legal obligation at issue.
ii) this argument involves factual findings of the Panel, thus is outside the scope of appellate review.[37]
at par. 151 the AB had consistently refused to reverse the Panel’s finding where the appellant alleged disagreement with a Panel’s factual finding. The AB held that a panel is a ‘trier of facts’ and it will not interfere lightly with a Panel’s assessment of facts.
But the AB in the case of
q US-Oil Country Tubular Goods Reviews (Argentina)[38] has reversed the Panel’s findings.
· Appellant/ Appellee:
United States
Argentina
· Third Participant:
European Communities, Japan, Korea, Mexico, Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu.
· Facts:
The Panel was established to consider a complaint by Argentina against the US regarding the continuation of AD duties on OCTG from Argentina in order to conduct a sunset review of those duties.[39]The US and Argentina appealed on various points of the Panel Report.
· Main Arguments:
§ US:
Ø The Panel did not make an objective assessment in concluding that the SPB is a measure subject to WTO DSS[40] as AB in US – Corrosion-Resistant Steel Sunset Review did not conclude that SPB is a measure.[41] It also rejected the US explanation that SPB is not a legal instrument as it does not set rules or norms that are intended to have general and prospective application.[42]
Ø Also Panel has not evaluated the case in accordance with Article 11 of the DSU[43]
§ Argentina
Ø The panel is right in relying on the the AB Report in US – Corrosion-Resistant Steel Sunset Review case. Argentina submits that the USDOC "consistent practice", as set forth in Exhibits ARG-63 and ARG-64 [44], shows that the USDOC considers the SPB to be binding.[45]
· AB Conclusion:
The AB reversed the factual findings by the Panel and held it violative of Art. 11 of DSU.[46] The AB held that the Panel did not "make an objective assessment of the matter", as required by Article 11 of the DSU.[47] The Panel report does not show that it had undertaken any such qualitative assessment[48](at least in some cases) of Exhibit ARG-63[49] and relied only on the collective results of Exhibit ARG-63.
CHAPTER - V
RELATIONSHIP BETWEEN ARTICLE 11 of DSU AND ARTICLE 17.6 of AD-AGREEMENT
Article 11 of the DSU provides that function of panels is to make an “objective assessment” in order to assist the DSB in making the recommendations or to assist the DSB in making the recommendations or in giving the rulings provided for in covered agreements.[50]
Whereas Art. 17.6 (i) of the AD Agreement deals with the Standard of Review of factual findings and Art. 17.6 (ii) provides for legal interpretations of AD Agreement.[51]
Art. 17.6 provides a detailed standard of deference than been regarded as suitable for disputes outside the ambience of AD.[52]Where Art. 17.6 is drafted in such a way so as to exclude de novo panel review of factual findings and legal interpretations, the text of Art. 11 of DSU does not allow the extensive Panel examination to be categorically excluded.[53]Therefore, it is argued that Art. 17.6 is deliberately drafted by the drafters to direct the Panel to provide for a more deferential Standard of Review than Art.11 of DSU for disputes outside the purview of AD.[54]
In UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN
HOT-ROLLED STEEL PRODUCTS FROM JAPAN[55],
The AB has discussed the relationship of Art.11 of the DSU and Art.17.6 of AD Agreement. As regards the Standard of Review of factual findings, the AB concluded as hereinbelow.[56] In this case the AB made it clear that both the Articles require the Panel to assess a member’s factual conclusions objectively.[57]
It is argued that though the AB in its report held that both the Articles prescribe objective assessment of facts by the Panel still the degree of panel deference may differ from the Standard of Review applied in accordance with Art. 11 of DSU and Art. 17.6 (i) of AD Agreement.[58]
CHAPTER – VI
CONCLUSION
The discussion in earlier Chapters shows that the language of Article 11 of the DSU does not clarify whether a WTO Panel or the Appellate Body should engage in de novo review or the extent to which they should defer to the determinations of national authorities.
The hypothesis of the researcher in this project has been disproved as though the language of Art. 11 of the DSU provides for objective assessment of facts, yet the Panel does not necessarily promote the application of Judicial Restraint over factual issues.
Also, there is no generally applicable approach to review for all WTO disputes. Though Article 11 provides for the Objective Assessment of Facts to be applied by Panel, still it does not passively promote Judicial Restraint over Factual Issues.
The Appellate Body Review of Factual decision of WTO Panel, does not confirm to Panel’s Applied Standard of Review. There is preferably more deferential standard of review applied by WTO Panel and Appellate Body in the initial stages of the dispute settlement under WTO rather than in later stages.
The AB’s approach in reviewing purely factual findings by Panels is not only inappropriate in accordance with only the jurisdictional aspect of Art. 17.6 of DSU but also through certain practical setbacks. They are:a) Time Constraint: the duration of AB process is only 90 days, (b) Limited institutional resources than compared to a WTO panel.[59]
Lastly, the AB in the case of US – Hot Roll Steel is silent about the issue of ‘ lex specialis’ i.e. which Article shall prevail over the other in the case of dispute between Art. 17.6 of AD Agreement and Art. 11 of the DSU.[60]
BIBLIOGRAPHY
Primary Sources
· Understanding on Rules and Procedures Governing the Settlement of Disputes : The Legal Text.
Secondary Sources
§ Oesch, Mathhias, Standards of Review in WTO Dispute Resolution. (New York: Oxford University Press, 2nd Ed., 2004)
§ Bethlehem, Daniel, Mcrae Donald, The Oxford Handbook of International Trade Law (New York, Oxford University Press, 2012)
Articles
· Bohanes Jan, Lockheart Nicolas, Standard of Review in WTO Law, in Bethlehem, Daniel, Mcrae Donald, The Oxford Handbook of International Trade Law (Oxford University Press, 2012), p.424.
· Pei-San Tan, Decisions of the Appellate Body of the World Trade Organization Shirts and Blouses: United States - Measure Affecting Imports of Woven Wool Shirts and Blouses, (available at:
http://webcache.googleusercontent.com/search?q=cache:mLc05Ao-JBEJ:207.57.19.226/journal/Vol9/No1/sr1c.rtf+&cd=3&hl=en&ct=clnk&gl=in, accessed on : 22-09-2014.)
[1] Matthias Oesch, Standard of Review in WTO Dispute Resolution, (Oxford University Press, 2003), p.14.
[2] Ibid.
[3] Id.
[4] WTO, UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES, (Annex 2) p. 353, available at: < http://www.wto.org/english/docs_e/legal_e/28-dsu.pdf>, accessed on: 25-08-2014.
[5] Ibid. p.354.
[6] AB Report, EC-Hormones, par.132, available at: <http://www.wto.org/english/tratop_e/dispu_e/hormab.pdf>, accessed on 25-08-2014.
[7] This view relies on the proposition that judges have no popular mandate to act as policy makers and should defer to the decisions of the elected "political" branches of the Federal government and of the states in matters of policy making so long as these policymakers stay within the limits of their powers as defined by the Constitution and the constitutions of the several states. More at: Dept. of US Legal, Inc., Judicial Restraint Law and Legal Definition, available at: <http://definitions.uslegal.com/j/judicial-restraint/>, accessed on: 22-09-2014.
[8] Pei-San Tan, Decisions of the Appellate Body of the World Trade Organization Shirts and Blouses: United States - Measure Affecting Imports of Woven Wool Shirts and Blouses, available at:
http://webcache.googleusercontent.com/search?q=cache:mLc05Ao-JBEJ:207.57.19.226/journal/Vol9/No1/sr1c.rtf+&cd=3&hl=en&ct=clnk&gl=in, accessed on : 22-09-2014.
[9] The WTO Agreement on Textiles and Clothing (ATC), which entered into force in 1994 replaced the Multi-Fibre Arrangement (MFA) which had governed the international trade in textiles and clothing. The ATC intended to the gradual integration of the sector into the GATT regime over a ten-year transition period. This requires the gradual removal of quantitative restrictions allowed under the MFA regime and a prohibition on any such new restrictions. Under the ATC, however, a country might impose a transitional safeguard in exceptional circumstances subject to certain disciplines spelt out in the ATC, which are discussed as above. More at: Ibid.
[10] After Bilateral Consultations, as required under Art 6.7 of the ATC, failed to produce a mutually acceptable solution. More at: Supra, N.8.
[11] India’s main claim is that the US safeguard action against imports of woven wool shirts and
blouses was imposed in violation of the requirements of Articles 6, 8 and 2 of the ATC. India requests that the Panel suggest that the United States withdraw the measure in question. India’s claim is that the United States did not comply with the procedural and substantive requirements of Article 6 of the ATC when it imposed the safeguard measure. More at: Ibid.
[12] SICE Foreign Trade Information System, Panel Report, UNITED STATES - MEASURE
AFFECTING IMPORTS OF WOVEN WOOL SHIRTS AND BLOUSES FROM India, available at: <http://www.sice.oas.org/dispute/wto/WLSHIRT2.asp>, accessed on22-09-2014.
· Firstly, there is a substantive requirement that the importing Member demonstrate that an increase of imports of a particular product is causing serious damage or actual threat thereof to the domestic industry producing like or directly competitive products. According to India, the United States failed to demonstrate this in its Market Statement since, on its face, the data contained in the US Market Statement were flawed.
· Secondly, India asserted that there were also procedural requirements regarding the nature, quality and extent of the consultations. India argued that the United States failed to consult on the specific proposed safeguard action for which the request for consultations was made and that in the consultations with India, the United States failed to demonstrate, with relevant and specific information, that imports of
woven wool shirts and blouses were causing serious damage to the domestic industry producing like or directly competitive products.
· Thirdly, India argued that in order to impose and maintain a safeguard action, the United States had to obtain the endorsement of the TMB. India labeled these last two
procedural requirements as a “two-tier obligation”.
[13] The United States argued that the TMB’s conclusions confirmed that the United States was faced with an actual threat of serious damage. The United States also argued that the date of application of the restraint is consistent with the ATC and that India’s claim under Article XIII of GATT 1994 does not fall within the terms of reference of this Panel. The United States, in any case, claims that Article XIII is only relevant for non-discriminatory measures whereas Article 6 restraints must be applied on a Member-by-Member basis. More at: Ibid.
[14] The Panel pointed out that the Market Statement that the United States had issued in support of its determination that serious damage had occurred failed to adequately analyse the impact of imports in terms of these factors. The panel also found that without evidence of export figures of the domestic industry, it was impossible to determine serious damage. Further, the Panel noted that the United States did not address the possibility that there might have been changes in technology or consumer preferences that resulted in such a state of affairs as it claimed existed. The Panel found that a determination that a rise in imports had caused serious harm or threatened such could not be sustained on the basis of such information as found in the US Market Statement. More at: WT/DS33/R, adopted 23 May 1997, available at: <https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol=%20wt/ds33/r*%20not%20rw*)&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true#>, accessed on 22-09-2014.
[15] US- Woven Wool Shirts and Blouses (India v. US), 1997 WTO Panel Report par.7.18, 7.21 (January 6), available at: <https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol=%20wt/ds33/r*%20not%20rw*)&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true#> , accessed on : 22-09-2014.
[16] Matthias Oesch, Standard of Review in WTO Dispute Resolution, (Oxford University Press, 2003),p.154.
[17] Ibid.
[18]India-Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products(Panel Report), available at:<http://www.wto.org/english/tratop_e/dispu_e/90r.pdf>, accessed on 22-09-2014.
[19] Restrictions for the Purposes of Balance-of-Payments: Articles XVIII and XII of the GATT 1994 provides the Members of the WTO to impose exceptional restrictive import measures for BOP purposes, which are otherwise prohibited. Article XVIII deals with BOP restrictions imposed by developing countries, while Article XII deals with restrictions imposed by developed countries. These two provisions have to be read in concurrence with the Understanding on the BOP Provisions of the GATT 1994. The restrictive measures need to be notified to the WTO. The notification of the restrictive measures is followed by consultation and review in the Balance-of-payments Committee. However, a Member has the right to impose balance-of-payments measures without prior approval of the WTO. Within the framework of the BOP Committee and the General Council the restrictions are reviewed collectively; and can also be reviewed at the instigation of individually affected Members of the WTO. Membership of the BOP Committee is open to all Members indicating their desire to serve on it. The restrictive measures need to be eliminated when the balance-of-payments justification no longer exists. Where the measures are found to be inconsistently applied the Member may either be advised that the restrictions be removed, or receive appropriate recommendations for securing conformity with GATT. The General Council may recommend the phasing out of the measures. Where consultations with the Member imposing the restrictions have been instigated by an adversely affected Member, and the consultations prove to be unsuccessful, a recommendation for the withdrawal or modification of the measures can be obtained, or in the event of this not transpiring the affected party can be released from such appropriate obligations towards the party imposing the restrictions. In conjunction with the review and challenge procedures through the BOP Committee and the General Council there also exists the opportunity for affected individual Members to challenge the measures under the WTO dispute settlement procedures as set out in the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes. The challenge to India’s quantitative restrictions is the first under the WTO dispute settlement machinery for their conformity with the WTO normative framework. However, such measures have been challenged in the past under GATT 1947 from time to time, although not frequently. The Panel and Appellate Body decisions of the WTO relating to India--Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products, involving mainly the United States and India, are particularly illuminating on the manner and the circumstances in which BOP import restrictions can be challenged. More at: http://www.lawteacher.net/international-law/essays/international-trade-has-existed-and-flourished-from-time-immemorial-international-law-essay.php, accessed on: 22-09-2014.
[20] The IMF representative took the view that India's current monetary reserves were not inadequate and "there was no serious decline in India's monetary reserves". During the consultations India revised its phase-out period to six years for most products notified, although some Members took the view that this period could be reduced to five years. More at: Ibid.
[21] India also claimed in particular that footnote 1 of the Understanding on the BOP provisions of the GATT 1994 referred to the "application" of measures for balance-of-payments purposes and not to their “justification”. As far as the justification of such measures was concerned, only the BOP Committee could review them under the procedures set out in Articles XV:2 and XVIII:B of GATT 1994.More at Supra N. 19.
[22] Ibid.
[23] Id.
[24] Supra N.18
[25] Ibid.
[26] Id.
[27] WTO, UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES, (Annex 2) p. 364, available at: < http://www.wto.org/english/docs_e/legal_e/28-dsu.pdf>, accessed on: 25-08-2014.
[28] Supra. N. 18.
[29] Ibid.
[30] India – Agricultural, Textile and Industrial Products, (AB Report), available at: https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol=%20wt/ds90/ab/r*%20not%20rw*)&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true#, accessed on 24-09-2014.
[31] Bohanes Jan, Lockheart Nicolas, Standard of Review in WTO Law, (Oxford University Press, 2012),p.422.
[32] http://www.pf.uni-lj.si/media/beef.hormones.pdf
[33] Ibid.
[34] AB Report, EC-Hormones, at par.132.
[35] As it had failed to examine all relevant facts and evidence, and to assess whether the USITC provided a reasoned or Adequate explanation of how facts supported the determination that were made.
[36] As panel did not review financial data nor allocation methodologies allegedly used by the procedures, as these were all part of confidential information that US declined to submit.
[37] US argued that the Panel properly found that the USITC Report provide adequate, reasoned and reasonable explanations with repect to productivity and profits and losses.
[38] United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina,(AB Report), available at: <https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol=%20wt/ds268/ab/rw*%20not%20rw2*)&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true#>, accessed on 24-09-2014.
[39] Ibid.
The Panel in its conclusion held that :
Certain provisions of US law regarding waivers in sunset reviews and certain provisions of the SPB concerning the DOC’s obligation to determine likelihood of continuation or recurrence of dumping in sunset reviews are inconsistent with the US obligations under certain provisions of the ADA. With respect to the DOC’s likelihood determinations in the OCTG sunset review, the Panel finds that the DOC acted inconsistently with certain provisions of the ADA, but did not act inconsistently with other provisions of that Agreement;
The US law’s standard for the likelihood of continuation or recurrence of injury determinations in sunset reviews and the ITC’s determinations in the OCTG sunset review are not inconsistent with the relevant articles of the ADA. More at: <http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds268_e.htm>, accessed on 24-09-2014.
[40] By relying on AB Report of US – Corrosion-Resistant Steel Sunset Review.
[41] Supra, N. 38 para 21.
[42] WTO, Repertory of AB Reports, Legislation as such vs. Specific Application, available at: <http://www.wto.org/english/tratop_e/dispu_e/repertory_e/l1_e.htm>,accessed on: 24-09-2014.
[43] As Panel concluded erroneously that in order for a submission to be considered a "complete substantive response" by the USDOC, it must include information on all of the items listed in Section 351.218(d)(3) of the USDOC Regulations. Also it ignored clear explanations by the US in this regard. Also, the Argentina provided no evidence to the Panel contradicting the US explanations as to the discretion afforded the USDOC to accept incomplete submissions as "complete substantive responses". More at: Supra, N. 38, par. 40.
[44]Supra, N. 38, par. 49.
[45]Argentina's appellee's submission, para. 20.
[46] Bohanes Jan, Lockheart Nicolas, Standard of Review in WTO Law, (Oxford University Press, 2012), p.424.
[47] Supra, N. 38, par. 215.
[48] Supra, N. 38, par. 209-211.
[49] With a view to discerning whether the USDOC regarded the existence of one of the factual scenarios of the SPB as determinative/conclusive for its determinations. More at: Supra, N. 38, par. 212.
[50] CLI.A.023479, Function of Panels: Art. 11 of DSU, available at: <http://article.chinalawinfo.com/Article_Detail.asp?ArticleID=23479>, accessed on 24-09-2014.
[51] Matthias Oesch, Standard of Review in WTO Dispute Resolution, (Oxford University Press, 2003), p.89.
[52] Ibid. p. 97.
[53] Id. P. 97-98.
[54] Id. P.97.
[55] WTO, US Hot Roll Steel Case, par. 55, available at : <https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol=%20wt/ds184/ab/r*%20not%20rw*)&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true#>, accessed on 24-09-2014.
[56] Under Article 17.6(i), the task of panels is simply to review the
investigating authorities' "establishment" and "evaluation" of the facts. To that end, Article 17.6(i) requires panels to make an "assessment of the facts ". The language of this phrase reflects closely the obligation imposed on panels under Article 11 of the DSU to make an "objective assessment of the facts ". Thus the text of both provisions requires panels to "assess" the facts and this, in our view, clearly necessitates an active review or examination of the pertinent facts. Article 17.6(i) of the Anti-Dumping Agreement does not expressly state that panels are obliged to make an assessment of the facts which is "objective". However, it is inconceivable that Article 17.6(i) should require anything other than that panels make an objective "assessment of the facts of the matter". In this respect, we see no "conflict" between Article 17.6(i) of the Anti-Dumping Agreement and Article 11 of the DSU. More at: Ibid. par. 55.
[57] Supra, N.51 p.100.
[58] Ibid. p. 100.
[59] Supra, N. 46 p. 45.
[60] Matthias Oesch, Standard of Review in WTO Dispute Resolution, (Oxford University Press, 2003), p.101.
