Appellate Body Report Research Articles

Peran Panel dan Appellate Body dalam Penyelesaian Sengketa di WTO

The aim of the research is to determine the role of panels and the Appellate Body in resolving disputes at the WTO. The research method used in this paper is a research method with a normative juridical approach with descriptive-analytical research specifications. The dispute resolution mechanism in the WTO involves five main stages. The first stage is consultation, where the disputing countries try to resolve the problem directly. The second stage includes settlement efforts through good services, conciliation and mediation. The third stage is the establishment of a panel, where independent experts examine the dispute and prepare a report. The fourth stage is the appeals process, where the appeals body reviews the panel's decision if there is an appeal. The final stage is the implementation of the decisions and recommendations issued. The panel is formed within approximately 90 days of the application, consisting of independent experts selected by the DSB. The panel works based on the Terms of Reference (ToR) which regulate the procedures for resolving disputes and is tasked with carrying out an objective assessment of the problems faced, assisting the DSB in making recommendations. If consultations fail, the aggrieved country can request the formation of a panel from the Dispute Settlement Body (DSB). If the panel fails to reach a solution, they must submit a written report to the DSB. This process ensures dispute resolution within a certain time period to ensure legal certainty. In addition, there is an appeal mechanism through the Appellate Body which consists of seven international trade law experts. The appeal process must be completed within 90 days, and the Appellate Body report is final and must be adopted by the DSB.

SPS협정 제6조의 해석

Purpose - The purpose of this study is, in case of an outbreak of pest or disease in areas within Members territories, to identify the requirements and procedures for legitimate import regulation according to sanitary or phytosanitary characteristics of a region, including the concept of a pest- or disease-free areas and a low pest or disease prevalence, through the interpretation of Article 6 of the SPS Agreement. Design/Methodology/Approach - This study analyzed the Panel and the Appellate Body reports on three dispute cases related to Article 6 of the SPS Agreement(India Agricultural Products case, US Animal case and Russia Pig case). Findings - The most important obligation in the interpretation of Article 6 of the SPS Agreement is to ensure that Members adapt their SPS measures to the SPS characteristics of the area from which the product originated and to which the product is destined, and the remainder of this Article sets out in detail the obligations of such Member States. and prescribes the respective obligations applicable to the relevant importing and exporting Members. Research Implications - Article 6 of the SPS Agreement requires that WTO members take appropriate measures according to the regional characteristics of the area of origin and destination, rather than prohibiting the import of product related to outbreak of pest or disease in areas within Members territories.

Some Critical Issues on Constructed Normal Value Under the Anti-Dumping Agreement

Dumping could be considered to exist when the export price of a product is lower than the normal value. Comparing the export price and the normal value is the starting point of anti-dumping process. The normal value is, in principle, determined on the basis of the domestic sales price in the exporting country. However, where the normal value cannot be determined on that basis, it may be determined on the basis of the ‘third-country sales’ or the ‘constructed normal value’. The ‘constructed normal value’ is calculated on the basis of the cost of production in the country of origin plus reasonable amount for administrative, selling and general costs and for profits. This article reviews how to derive normal value, and discusses various issues on constructed normal value by analysing the relevant provisions of the Anti-Dumping Agreement, and WTO Panel and Appellate Body Reports. anti-dumping, Anti-Dumping Agreement, constructed normal value, normal value, particular market situation, WTO

A Study on the SPS Agreement and Korea-Radionuclides (Japan) (DS495)

Purpose This paper analyzes the characteristics and main contents of the SPS Agreement, and analyzes the facts and legal issues of the Korea-Radionuclides(DS495) Case. Design/Methodology/Approach The Panel and Appellate Body reports were used to analyze cases related to radionuclides in Japan (DS495) in the WTO dispute. Findings In the case of the radionuclides dispute between Korea and Japan, the Panel judged that most of the issues raised by Korea were inconsistent with the SPS Agreement, but the Appellate Body reversed most of the panel’s decision Research Implications The DS495 dispute was the first case of radionuclides dealt with in the WTO, and was also recorded as an event in which the panel’s decision was reversed by the appellate body in the SPS Agreement. In addition, the appellate body made a decision limited to the panel’s legal issues and interpretation, and did not make a fact judgment on its own. In the end, this case provides important implications for understanding the rights and obligations of member states within the SPS Agreement.

Of False Conflicts and Real Challenges: Trade Agreements, Climate Clubs, and Border Adjustments

Assessments of the relationship between trade agreements and the climate regime often focus on the potential for normative conflict. Concerns that trade commitments may prevent the adoption of measures to curb climate change, or at least that these are two regimes that “point in different directions,”1 are often voiced to suggest that taking climate action requires fundamentally modifying, and maybe getting rid of, current trade agreements. In this essay, we argue that allegations of conflict disregard longstanding World Trade Organization (WTO) jurisprudence on policy-justified trade measures. As a matter of principle, this alleged conflict has been essentially overcome since the 1998 Appellate Body report in United States – Shrimp.2 Focusing on potential conflict distracts from the real challenges and dilemmas involved in designing and implementing a global carbon regime, including through the trade instruments known as carbon border adjustment mechanisms (CBAMs and so-called “climate clubs”), for which the legal parameters provided by trade agreements may be instrumental.

Article 21.5 DSU Appellate Body Report United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint): Spillovers from Defense R&D Add to the Tug-of-War between Panels and the WTO Appellate Body

AbstractThe March 2019 release of the Appellate Body's compliance report in United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) marks yet another chapter in the ongoing Boeing–Airbus dispute. While raising numerous new and old subsidy issues, this paper focuses on one specific aspect, the evaluation of the financial contributions and benefits associated with the Department of Defense (DOD) R&D procurement contracts. The paper describes the differing views taken by the panels compared to the Appellate Body. It highlights two issues that led to an extremely lengthy proceeding: (1) the black or white nature of the decision regarding the characterization of contracts which have features of both purchases of services and joint ventures; and (2) the difficulty in demonstrating a financial contribution flowing from payments for R&D for military systems to Boeing's civil aircraft production. It concludes that this case represents a failure of the WTO dispute settlement system and underscores flaws in the ASCM in that after fifteen years of litigation, no determination was made as to whether or not the DOD R&D contracts examined here constituted impermissible subsidies.

‘Where Have all the Distortions Gone?’ Appellate Body Report, Ukraine–Ammonium Nitrate

AbstractThis article reviews the Appellate Body Report in the Ukraine–Ammonium Nitrate dispute that focused on the impact of Russia's dual pricing in the natural gas market on the ammonium nitrate market. Interpreting the WTO Anti-Dumping Agreement (ADA), the Appellate Body rejected the possibility to reject input costs, which, though distorted, were duly reported in the company's records, and to replace them with a surrogate price which, for the Ukrainian authorities, was the (adjusted) export price of Russian natural gas at the German border. In this article, (a) we fully review the background of the dispute, showing the connections between natural gas and ammonium nitrate prices, and the impact on Russia's price regulation of the domestic market on them; (b) we then review the ADA and concur with the interpretation of the Appellate Body, essentially for systemic reasons; (c) for completeness, we also investigate whether econometrics could accurately determine the natural gas benchmark price in Russia and conclude in the negative; (d) since dual pricing gives an economic benefit to domestic ammonium nitrate producers, we finally test dual pricing under the WTO subsidy rules. The conclusion is that the current disciplines are not likely to apply to dual pricing and lead us to conclude that important distortions are currently left without regulation in the WTO.

Under Pressure: Intractable Trade Conflicts and Korea – Pneumatic Valves

AbstractThe Appellate Body (AB) report in Korea–Pneumatic Valves is among the most structurally complex of recent trade remedies reports. The AB weaves a complicated web to explicate the intricacies of the relationship among the relevant provisions on injury determination in anti-dumping disputes in the midst of a contentious and long-running series of disputes between two close regional trading powers. This Article first examines the Korean investigation and its significance in economic terms. Second, it analyzes the AB's conclusions on Article 6.2 of the Dispute Settlement Understanding regarding the panel request and the significance of the AB's treatment. Third, it studies the AB's comments on the panel's anti-dumping calculations where the AB amplifies its prior pronouncements on the elements of injury and causation. Finally, the Article situates this dispute in the broader political debates playing out both at the AB and between the two disputing parties.

The Role of Anti-Dumping in the US-China Trade War

The sudden escalation of the US-China trade war has negatively impacted global trade and the WTO, and its effects will last for a long time. This article centres on the US anti-dumping measures against Chinese exports within the trade war. The article attempts to explain the failure of the US trade policies in terms of anti-dumping measures; policies which were found to be inconsistent with the Anti-Dumping Agreement (ADA). Rather than complying with the Appellate Body Reports, the US insisted on using procedures inconsistent with the ADA, such as the zeroing methodology to overprotect the US industries. The US even blocked the appointment of Appellate Body Members and paralysed the WTO’s Dispute Settlement Mechanism. Apart from political and economic reasons, one of the underlying reasons for the US to trigger a trade war with China would be anti-dumping measures. Antidumping measures are designed to balance unfair pricing strategies; however, the US is misusing the measures in order to avoid a trade deficit with China.

Remarks by Cherise Valles

The dispute settlement system of the World Trade Organization (WTO) had long been viewed as the “crown jewel” of the multilateral trading system. In just over twenty-five years, in various proceedings under the dispute settlement understanding (DSU), the WTO dispute settlement system was prolific and thorough. There have been nearly four hundred adopted panel and Appellate Body reports (including compliance panel proceeding under DSU Article 21.5), twenty-five decisions notified under arbitrations on determining the amount of retaliation under DSU Article 22.6, thirty-eight awards to determine the implementation period under DSU Article 21.3(c), and one stand-alone arbitral award under DSU Article 25. This output has attracted attention in other international tribunals, notably the International Court of Justice (ICJ). In the 2007 Pulp Mills case before the ICJ, the WTO was commended as having contributed the most to the development of “best practices” in the evaluation of evidence submitted during the course of dispute settlement proceedings.

Under Pressure: Intractable Trade Conflicts and Korea -- Pneumatic Valves

The Appellate Body (AB) report in Korea -- Pneumatic Valves is among the most structurally complex of recent trade remedies reports. The AB weaves a complicated web to explicate the intricacies of the relationship among the relevant provisions on injury determination in anti-dumping disputes in the midst of a contentious and long-running series of disputes between two close regional trading powers. This Article first examines the Korean investigation and its significance in economic terms. Second, it analyzes the AB’s conclusions on Article 6.2 of the Dispute Settlement Understanding regarding the panel request and the significance of the AB’s treatment. Third, it studies the AB’s comments on the panel’s anti-dumping calculations where the AB amplifies its prior pronouncements on the elements of injury and causation. Finally, the Article situates this dispute in the broader political debates playing out both at the AB and between the two disputing parties.

Case-Note: European Communities – Measures Prohibiting the Importation and Marketing of Seal Products (EC – Seals) WT/DS400/AB/R WR/DS401/AB/R 22 May 2014

The dispute concerns with discriminatory application of the EC Seal Regime against Canada and Norway. The EC Seal regime consists of an exception (Travelers’ exception) and two derogations (IC and MRM conditions) from the prohibition against the marketing of seal products in the EU. The Appellate Body (AB) report in this dispute is controversial in its interpretation of ‘technical regulation’ under the Technical Barriers to Trade (TBT) Agreement, as it has limited the scope of the Agreement to assess technical regulatory measures impacting trade. Further, such an interpretation is not supported by the previous Appellate Body rulings. From a legal standpoint, the dispute provides key differences between the National Treatment and Most-Favored Treatment principles of GATT 1994 as compared to the TBT Agreement The interpretation of ‘public morals’ makes the dispute a rare decision dealing with both the protection of public morals and animal welfare. It sheds light on the application of the chapeau of Art. XX GATT 1994 as it clarifies the importance of cooperative agreements and negotiations with the affected Members of the WTO prior to the imposition of any measure that may lead to an arbitrary and unjustifiable discrimination. Given the role of WTO as an organization with defined priorities; the AB’s holding that the animal welfare scheme by the EC violates the WTO obligations does not mean that WTO law does not recognize animal welfare as a moral concern. The ruling in this dispute is against the discriminatory application of such a measure. The AB has provided a balanced outcome in this dispute under Art. XX GATT 1994, even though there are some technical inconsistencies in the reasoning as regards the scope of the TBT Agreement.

U.S. Refusal to Appoint Members Renders WTO Appellate Body Unable to Hear New Appeals

Over the last few years, the United States has been pressuring the World Trade Organization (WTO) to reform the Appellate Body by refusing proposals to fill vacancies. On December 10, 2019, the terms of two Appellate Body members expired, leaving one member left for the seven-member body. This has brought new appeals to a standstill, as an appeal from a panel established by the Dispute Settlement Body must be heard by three Appellate Body members. In February of 2020, the United States elaborated on its complaints about the Appellate Body in a report published by the Office of the United States Trade Representative. In the spring of 2020, in response to the continued U.S. resistance to filling vacancies on the Appellate Body, a group of WTO members established an interim arrangement to handle appeals through arbitration. Also in the spring of 2020, the United States described as invalid a recent Appellate Body report regarding a dispute between Canada and the United States, asserting that none of the three persons who issued the report were in fact bona fide Appellate Body members.

Export Credit Guarantee and Prohibited Subsidies Under the SCM Agreement

Export credit guarantee or insurance covers non-payment risks in exports. Many countries have established export credit agencies (ECAs) to promote exports through export credits including export credit guarantee or insurance. Officially supported export credits have brought the concern that they may distort fair competition in international trades. Export credit guarantee or insurance programmes with inadequate premium rates are likely to fall under the prohibited subsidies. ECAs need to understand the requirements of the prohibited subsidies under the Agreement on Subsidies and Countervailing Measures (SCM Agreement). This article will discuss features and functions of export credit guarantee or insurance in international trades. This article will also discuss some issues concerning the elements of a subsidy and illustrated list of prohibited export subsidies with regard to export credit guarantee or insurance by analysing the relevant provisions of the SCM Agreement and WTO Panel or Appellate Body Reports. countervailing measure, export credit, export credit insurance, export credit guarantee, prohibited subsidy, the SCM Agreement, subsidy

Expired Measures, Excess Duty Drawbacks and Causation: The Appellate Body Report in EU–PET (Pakistan)

AbstractThe Appellate Body report in EU–PET (Pakistan) raises distinct questions regarding the need for findings in relation to expired measures, the conditions under which duty drawback schemes may constitute subsidies and the causation methodology to apply under the SCM Agreement. We conclude that the report offers no clear guidance on whether the function and design of WTO dispute settlement require or preclude findings in case of expired measures. We welcome the Appellate Body's conclusion that, in case of duty drawback schemes, the financial contribution element of the subsidy is limited to the excess remission or drawback of import charges. Finally, although the Appellate Body rightly found that authorities are free to choose the methodology for the causation analysis provided that the analysis is complete and objective, the methodology used by the investigating authority in this case shows a number of deficiencies that were not recognized by the Appellate Body.

‘Flying High in a Plane’ Appellate Body Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft

AbstractThis article reviews the Appellate Body decision in the implementation phase of the EC–Aircraft dispute. Focusing on some of the key findings, we assess whether they are legally and economically correct. We conclude that (a) though still unclear, the test for establishing de facto contingency on import substitution subsidies is probably too demanding; (b) though legitimate, the interpretation of the remedy of removal of the adverse effects for actionable subsidies is the weakest and most deferential possible; (c) the hesitation in confirming that quantitative methods are the key tool to define the relevant market is unwelcome; and (d) the Appellate Body correctly recognize the importance for Panels to consider, in the context of the serious prejudice analysis, whether the like product of the complainant has been subsidized. Most importantly, the analysis of this case, set within the broader jurisprudence and practice, has led us to conclude that WTO subsidy disciplines are not particularly strong. The review of the main economic theories justifying subsidy control (strategic trade policy, terms of trade, private information, commitment theory) has shown that no single theory is able to fully account for subsidies and the need to control them. The key question is the definition of what we want to achieve by controlling subsidies, which is the main message sent to the policy-makers and negotiators that are currently considering law reform.

The Revitalisation of the Object and Purpose of the TRIPS Agreement: The Plain Packaging Decision and the Awakening of the TRIPS Flexibility Clauses

The limited role the objectives and principles of the TRIPS Agreement (Articles 7 and 8) have played so far in the interpretation and implementation of its substantive provisions has often been criticised. The WTO Panel and Appellate Body Reports in the “Australia - Plain Packaging” dispute are likely to change this situation for the future, as for the first time the WTO dispute settlement bodies fully engage with Articles 7 and 8 of TRIPS to interpret Article 20 relative to the use of trademarks. It is indeed the reliance on these two provisions that allows the Panel and the Appellate Body to conclude that there are legitimate reasons for which Members may encumber trademark use. The awakening of these two provisions that have long remained dormant in the Agreement could have a fundamental impact in offering the possibility of a more flexible reading of TRIPS. It could indeed secure the adaptability of intellectual property rights to the evolution of economic, technological and social circumstances by guaranteeing a more balanced interpretation of the limitations and exceptions included in the Agreement, as advocated for example several years ago by a group of international IP scholars in the “Declaration on a balanced interpretation of the three-step test”. Furthermore, the use of these two provisions could serve as a gateway for the taking into account ethical imperatives supported by international human rights in the interpretation of the TRIPS norms. If such a reading has been advocated in the past, the “Plain Packaging”- Reports might lead in the future to a more frequent and welcomed raising of human rights arguments in the context of international trade law.

일본산 수산물 수입금지조치 등에 대한 WTO 패널 및 상소기구의 판단에 대한 분석 및 향후 유사분쟁사례 대응을 위한 시사점

일본산 수산물 수입금지조치 등에 대한 WTO 패널 및 상소기구의 판단에 대한 분석 및 향후 유사분쟁사례 대응을 위한 시사점

‘Where have all the distortions gone?’ Appellate Body Report, Ukraine – Ammonium Nitrate, WT/DS493/AB

This article reviews the Appellate Body Report in the Ukraine – Ammonium Nitrate dispute that focused on the impact of Russia’s dual pricing in the natural gas market on the ammonium nitrate market. Interpreting the WTO Anti-Dumping Agreement (‘ADA’), the Appellate Body rejected the possibility to reject input costs, which, though distorted, were duly reported in the company’s records, and to replace them with a surrogate price which, for the Ukrainian authorities, was the (adjusted) export price of Russian natural gas at the German border. In this article, a) we fully review the background of the dispute, showing the connections between natural gas and ammonium nitrate prices, and the impact on Russia’s price regulation of the domestic market on them; b) we then review the ADA and concur with the interpretation of the Appellate Body, essentially for systemic reasons; c) for completeness, we also investigate whether econometrics could accurately determine the natural gas benchmark price in Russia and conclude in the negative; d) since dual pricing gives an economic benefit to domestic ammonium nitrate producers, we finally test dual pricing under the WTO subsidy rules. The conclusion is that the current disciplines are not likely to apply to dual pricing and lead us to conclude that important distortions are currently left without regulation in the WTO.

Russia—Measures Concerning Traffic in Transit

This dispute, brought by Ukraine against Russia, provides the first discussion in a World Trade Organization (WTO) Panel or Appellate Body Report of the security exception in Article XXI of the General Agreement on Tariffs and Trade 1994 (GATT). Unusually for a WTO dispute, the Panel (chaired by former WTO Appellate Body Member Georges Abi-Saab) found that Russia had not acted inconsistently with any of the claimed obligations under the GATT or Russia's Accession Protocol. Central to that conclusion was the Panel's understanding of the GATT security exception and the circumstances surrounding the imposition of the challenged measures, which related to trade in transit by road and rail through Russian territory. The Panel found that, since 2014, an emergency in international relations existed between Russia and Ukraine within the meaning of GATT Article XXI(b)(iii) and that the challenged measures fell within this exception. If the exception had not applied, according to the Panel, Ukraine would have established a prima facie case of violation of the provisions on freedom of transit in GATT Article V:2 and equivalent provisions in Russia's Accession Protocol. The decision, which neither party chose to appeal, has significant implications for other disputes in which the security exception has been invoked.