Statements by Ambassador Linnet F. Deily Deputy U.S. Trade Representative at the January 9, 2004 meeting of the WTO Dispute Settlement Body

Item 1. JAPAN – MEASURES AFFECTING THE IMPORTATION OF APPLES

A. IMPLEMENTATION OF THE RECOMMENDATIONS OF THE DSB

Mr. Chairman, the United States welcomes the statement of Japan that it intends to implement the recommendations and rulings of the DSB in this dispute.

We hope that, with the benefit of the clear guidance contained in the panel and Appellate Body reports, Japan will remove its WTO-inconsistent measures promptly.

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Item 3. UNITED STATES - SUNSET REVIEW OF ANTI-DUMPING DUTIES ON CORROSION-RESISTANT CARBON STEEL FLAT PRODUCTS FROM JAPAN

A. REPORT OF THE APPELLATE BODY (WT/DS244/AB/R) AND REPORT OF THE PANEL (WT/DS244/R)

Mr. Chairman, the United States would first of all like to thank the Panel, the Appellate Body and the Secretariat for their hard work on this dispute.

The United States is pleased that the reports of the Panel and Appellate Body confirm that U.S. laws and regulations governing sunset reviews, as well as the particular sunset review at issue in this dispute, comply with the Antidumping Agreement.

In particular, the United States is gratified that both the Panel and the Appellate Body agreed that the U.S. Department of Commerce had sufficient evidence upon which to base its decision to keep in place the antidumping duty order on corrosion-resistant steel from Japan. We are also pleased that the Appellate Body did not disturb the Panel’s finding that Commerce had conducted this particular sunset review consistent with the WTO agreements.

The United States would, however, like to make a few points with respect to the Appellate Body’s discussion of Commerce’s Sunset Policy Bulletin, which is a transparency tool to provide the public with guidance on Commerce’s conduct of sunset reviews.

The Panel found that the Sunset Policy Bulletin is not a mandatory measure that can be challenged in WTO dispute settlement. The Appellate Body reversed that finding because it believed that the Panel had not fully considered the relevant arguments. We are confident, however, that any future panel that properly considered all the relevant factors would reach the same conclusion as this panel. Under U.S. law, the Sunset Policy Bulletin has no independent legal status. It mandates no behavior whatsoever. This is true as a matter of fact, and any conclusion to the contrary would simply mischaracterize U.S. law.

Indeed, any contrary result would be extraordinarily counterproductive to the objective of greater transparency in government decision-making. The Antidumping Agreement leaves authorities with broad discretion in conducting antidumping sunset reviews. The U.S. authorities consider that the public benefits from guidance on how they might conduct these reviews. It is difficult to see why WTO Members would wish antidumping authorities to provide less guidance to the interested public rather than more, for indeed that would be the consequence of any successful challenge to the Sunset Policy Bulletin. A decision to challenge useful tools like the Sunset Policy Bulletin is deeply misguided.

The United States also wishes to comment on certain aspects of the Appellate Body’s reasoning. Paragraph 168 of the Appellate Body report states that, „When a measure is challenged ‘as such’, the starting point for an analysis must be the measure on its face.“ Paragraph 168, however, must be read in the context of the proper approach to the factual question of the meaning of a measure under a Member’s municipal law. We note, for example, that the Appellate Body refers to its statement in its recent report on US - Carbon Steel that a party asserting that another party’s municipal law is inconsistent with a WTO obligation must introduce evidence as to the scope and meaning of that municipal law. Furthermore, as the panels in US - Section 301 and US - Export Restraints correctly pointed out, municipal law consists not only of the provisions being examined, but also domestic legal principles that govern the interpretation of those provisions. Thus, while it may in many instances be true that domestic legal principles call for the examination of a measure on its face, this will depend on the specific interpretive principles of municipal law. Indeed, the Appellate Body also pointed out in US - Carbon Steel that the text of a measure may not, in all cases, be sufficient evidence to prove the scope and meaning of a municipal law.

The United States also wishes to comment on the Appellate Body’s discussion of what may constitute a measure. While there is much in this analysis with which the United States agrees, the United States considers that the discussion goes beyond the task with which the Appellate Body was presented. WTO dispute settlement, like other forms of dispute resolution, operates most effectively when it concerns itself with the particular dispute before it. Broad statements made out of the context of the facts and claims in that dispute should be avoided, in particular because such statements may turn out to be inapplicable or inappropriate in the context of other disputes.

Further, in specific respects, broad conclusions of the Appellate Body in this report are not supported by the materials it cites. For example, in footnote 80, in responding to the Panel’s findings that the Sunset Policy Bulletin is not a mandatory legal instrument that can give rise to a WTO breach and is not, as such, a challengeable measure, the Appellate Body lists a number of GATT and WTO panel reports as supporting the general proposition that „instruments containing rules or norms could constitute a ‘measure.’“ However, with the exception of one of the disputes cited by the Appellate Body, the instruments at issue had independent legal effect within the responding party's legal system. The exception was Export Restraints, where the panel concluded that the „Preamble“ to the U.S. countervailing duty regulations, Commerce „practice,“ and the U.S. „Statement of Administrative Action“ were not challengeable because they did not have independent legal effect. Thus, these reports do not support the conclusion that panels have considered instruments with no independent legal effect to be „measures“ subject to dispute settlement.

In any event, none of this changes the fact that the Sunset Policy Bulletin mandates no action whatsoever, and that a proper analysis would reach this conclusion.

Mr. Chairman, we also note that Japan has made some comments concerning the placement of these reports on the agenda of today’s meeting.

We are puzzled that Japan has raised this point. There is nothing in the DSU that says which party to a dispute is to propose adoption of a report or when.
The United States would like to point out that Japan likewise did not respond to U.S. inquiries about Japan’s plans for putting the reports up for adoption. We also note that, in any event, Japan was able to put this item on the agenda without difficulty.

Mr. Chairman, the United States appreciates the opportunity to make these comments at today’s meeting.