The Legacy of the Byrd Amendment Controversies—Rethinking the Principle of Good Faith

Abstract

On January 16, 2003, the WTO Appellate Body (“AB”) released its ruling on a hotly debated, highly controversial piece of legislation, the so-called “Byrd Amendment,’ officially called the U.S. Continued Dumping and Subsidy Offset Act of 2000. Unlike the panel ruling issued three months earlier, the Appellate Body ruling is not likely to draw much attention because it basically shadows the panel ruling that the Byrd Amendment is inconsistent with WTO agreements. The Appellate Body agreed that the Byrd Amendment did constitute a specific action against dumping and subsidies that violated WTO obligations. However, a closer look into the ruling reveals that the Appellate Body reversed an important holding of the panel. The panel had held that the US did not act in good faith such that it violated certain provisions in the AD/SCM Agreements. The Appellate Body rejected this good faith argument, reasoning that the panel had overreached in reaching this conclusion. Reinforcing the role of the principle of good faith in the WTO jurisprudence will have significant impacts on the WTO system, especially the WTO dispute settlement system. At first