WORLD TRADE WT/DS33/AB/R
25April 1997
ORGANIZATION(97-1773)
Appellate Body
UNITED STATES -MEASURE AFFECTING IMPORTS OF
WOVEN WOOL SHIRTS AND BLOUSES FROM INDIA
AB-1997-1
Report oftheAppellate BodyWT/DS33/AB/R
Page1
WORLD TRADE ORGANIZATION
APPELLATE BODY
United States -Measure Affecting Imports of
Woven Wool Shirts andBlouses fromIndia
India, Appellant
United States, AppelleeAB-1997-1
Present:
Beeby, Presiding Member
Bacchus, Member
Matsushita, Member
I. Introduction
India appeals from certain issues oflawandlegalinterpretations inthePanel Report, United
States -Measure Affecting Imports ofWoven Wool Shirts andBlouses fromIndia,WT/DS33/R (the
"Panel Report"). ThatPanel wasestablished on17April 1996toconsider acomplaint byIndiaagainst
theUnited States relating toatransitional safeguard restraint imposed onimports ofwoven woolshirts
andblouses (category 440)from India.
Themeasure wasimposed bytheUnited States on14July1995 afterbilateral consultations
withIndiainApril andJune1995didnotresult inamutually-agreed solution. Therestraint waseffective
asfrom18April 1995foroneyearandwaslaterextended through 17April 1997. TheUnited States
tookthistransitional safeguard action pursuant toArticle 6oftheAgreement onTextiles andClothing
(the"ATC").Asrequired byArticle 6.10oftheATC,theUnited States referred thematter tothe
Textiles Monitoring Body (the"TMB"), which concluded -andconfirmed upon review -thatthe
transitional safeguard action inthiscasewasimposed inaccordance withtherequirements oftheATC.
TheTMB found that"actual threat ofserious damage hadbeendemonstrated" andthat"thisactual
threat could beattributed tothesharp andsubstantial increase inimports from India".1AtIndia's
request, theDispute Settlement Body (the"DSB") established apanel (the"Panel") toexamine the
legality oftheUnited States 'transitional safeguard measure.
1G/TMB/R/3, confirmed inG/TMB/R/6.WT/DS33/AB/R
Page2
After therelease oftheinterim report ofthePanel, theUnited States announced thatitwould
withdraw thetransitional safeguard measure, effective asof22November 1996, “duetoasteady decline
inimports ofwoven wool shirts andblouses from India andtheadjustment oftheindustry ”.
Nevertheless, India requested thatthePanel continue itswork andproduce acomprehensive report
onthedispute. ThePanel Report inUnited States -Measure Affecting Imports ofWoven Wool Shirts
andBlouses fromIndia wascirculated totheMembers oftheWorld Trade Organization (the"WTO")
on6January 1997. ThePanel Report contains thefollowing conclusions andrecommendations:
8.1 Weconclude thattheUSrestraint applied asof18April 1995
onimports ofwoven woolshirts andblouses, category 440,fromIndia
anditsextensions violated theprovisions ofArticles 2and6ofthe
ATC. Since Article 3.8oftheDSU provides that“Incases where
there isaninfringement oftheobligations assumed under acovered
agreement, theaction isconsidered prima facie toconstitute acase
ofnullification andimpairment ”,weconclude thatthesaidUSmeasure
nullified andimpaired thebenefits ofIndiaunder theWTO Agreement,
inparticular under theATC. ThePanel recommends thattheDispute
Settlement Body make sucharuling.
On24February 1997, India notified theDSB2ofitsdecision toappeal certain issues oflaw
covered inthePanel Report andcertain legalinterpretations developed bythePanel, pursuant toArticle
16.4oftheUnderstanding onRules andProcedures Governing theSettlement ofDisputes (the"DSU"),
andfiledanotice ofappeal withtheAppellate Body pursuant toRule20oftheWorking Procedures
forAppellate Review (the"Working Procedures ").Pursuant toRule21oftheWorking Procedures ,
India filedanappellant 'ssubmission on6March 1997. Attherequest oftheUnited States, pursuant
toRule16(2) oftheWorking Procedures ,theAppellate Body extended thetimefortheUnited States
tofileitsappellee 'ssubmission to24March 1997. Onthatdate,theUnited States fileditssubmission
pursuant toRule22oftheWorking Procedures .
Theoralhearing provided forinRule27oftheWorking Procedures washeldon7April 1997.
Theparticipants presented theirarguments andanswered questions fromtheDivision oftheAppellate
Body hearing theappeal.
2WT/DS33/3, 24February 1997.WT/DS33/AB/R
Page3
II. Arguments oftheParticipants
A. India
India agrees withtheoverall conclusions ofthePanel Report, butalleges thatthePanel erred
inlawwhen making itsfindings ontheburden ofproof, ontheTMB andontheissue ofjudicial
economy.
1. Burden ofProof
India notes thatthePanel made statements ontheburden ofproof initsfindings inparagraph
7.12ofthePanel Report aswellasinitscomments ontheinterim review inparagraph 6.7ofthePanel
Report. India argues thatbothstatements areincorrect, andfurthermore, arecontradictory. India
asserts thatthespecific interim review comments atissue arepartofthefindings tobereviewed by
theAppellate Body.
India asserts thatthefactthatIndia hadinitiated dispute settlement proceedings didnotimpose
upon India theobligation toestablish thattheUnited States hadviolated Article 6oftheATC,asthe
Panel stated inparagraph 7.12, northeobligation topresent aprima faciecasetothateffect, asthe
Panel stated inparagraph 6.7. According toIndia, theissue oftheburden ofproof isanissue of
substantive lawandmust beanswered solely onthebasis ofthesubstantive lawoftheWTO inthe
lightofthecustomary rulesofinterpretation ofpublic international law.Indiamaintains thatthequestion
ofwhetheritisuptoaparticularMembertodemonstrateaninconsistencywiththeMarrakeshAgreement
Establishing theWorld Trade Organization3(the"WTO Agreement ")doesnotdepend onwhether the
Member isacomplaining orarespondent party intheproceedings inwhich theinconsistency isat
issue, butrather onthenature oftheprovision invoked. InIndia'sview, therules ontheburden of
proof determine which partyinthedispute mustmake alegalclaim andsupply theevidence; thefunction
oftherules istoensure thatadispute canbesettled evenifthelegalclaims andfactual information
before thepanel areincomplete. AsIndia reads it,according tothePanel'scomments ontheinterim
review, bothparties bearaburden ofproof ofdifferent degrees.
Moreover, India argues thatthePanel'sfinding onthedistribution oftheburden ofproof is
inconsistent withthefinding onthesame issue bytheconcurrent WTO panel inUnited States -
3Done atMarrakesh, Morocco, 15April 1994.WT/DS33/AB/R
Page4
RestrictionsonImportsofCottonandMan-madeFibreUnderwear.4Indiapointstothatpanel'sstatement
thattheprinciple thattheparty invoking theexception carries theburden ofproof iswell-established
intheGATT 1947 practice.5Thus, India argues thatinmaking itsfinding onburden ofproof inthis
case, thePanel failed totakeintoaccount thecustomary practice oftheCONTRACTING PARTIES
under theGATT 1947. India maintains thattheATCisanexception totheGATT 1994 because it
authorizes thetemporary maintenance ofmeasures inconsistent withArticles XIandXIIIoftheGATT
1994. India argues thatwithin thattemporary andexceptional regime deviating from basic GATT
principles, Article 6oftheATCestablishes anexception fromthegeneral principles oftradeintextiles
andclothing thataresetoutinArticle 2.4oftheATCbyauthorizing theintroduction ofnewand
discriminatory quantitative restraints within theframework ofwhatArticle 6.1oftheATCdescribes
as"aspecific transitional safeguard mechanism" that"should beapplied assparingly aspossible".
India concludes thattheprinciples applied totheexceptions intheGATT 1994, therefore, apply with
evengreater force toArticle 6oftheATC.InIndia'sview, thePanel'sfinding onburden ofproof
changestheoperationofthesubstantiverequirementsunderArticle6oftheATC,upsettingthenegotiated
balance ofinterests between importing andexporting Members under theATC.
2. TheTMB
Indiaasserts thatthePanel'sfinding inparagraph 7.20ofthePanel Report thattheTMB, when
examining atransitional safeguard measure inaccordance withArticle 6.10oftheATC,"isnotlimited
totheinitial information submitted bytheimporting Member asparties maysubmit additional and
otherinformation insupport oftheirpositions, which, weunderstand, mayrelate tosubsequent events"6,
wasrequested neither byIndia norbytheUnited States. India contends thatthisfinding attributes
totheTMB discretionary powers thatneither oftheparties tothedispute suggested theTMB had.
India argues thattheATCandtheDSUaccord exporting Members three important procedural
rights: (i)therighttoholdconsultations ontheproposed transitional safeguard action onthebasis
ofspecific andfactual information; (ii)therighttoareview ofatransitional safeguard action bythe
TMB; and(iii)therighttoreferthematter totheDSBforexamination byapanel. InIndia'sview,
thePanel'sfinding denies Members thebenefit ofthefirsttwoofthese three rights.
4Adopted 25February 1997, WT/DS24/R, para. 7.16.
5India citesseven GATT 1947 panel reports todemonstrate thatthere hasbeenaconsistently applied andwell-established
practice thattheparty invoking anexception bears theburden ofproof.
6Panel Report, para. 7.20.WT/DS33/AB/R
Page5
India submits thatthePanel bases itsfinding ontheerroneous notion thattheATCandthe
DSUestablish a"two-track process" forthereview oftransitional safeguard actions, andthattherefore
thematter onwhich theTMB makes arecommendation andthematter submitted totheDSBcanbe
different. InIndia'sview, theATCandtheDSUestablish atwo-stage procedure under which thesame
measure isfirstsubmitted totheTMB and,ifitsrecommendations arenotacceptable, totheDSB.
India stresses thattheTMB review isasubstitute forconsultations normally heldbefore therequest
fortheestablishment ofapanel, andIndia argues thatinformation thatwasnotavailable atthetime
when thesafeguard determination wasmade isnotinformation thatis"relevant" intheTMB'sreview
ofthatdetermination under Article 6.10oftheATC.
India further asserts thatthetaskoftheTMB istodealwithdisputes arising from measures
actually taken andtocarry outthose functions thatarespecifically assigned toitbytheATC.According
toIndia, theexpression ofviews ontransitional safeguard actions thathavenotyetbeentaken isnot
partofthistask. Indiamaintains thatbyattributing totheTMB thisadditional competence, evenwhen
theMembers didnotagree toseekviews onthatmatter, thePanel attributed totheTMB theauthority
toconciliate without theconsent oftheMembers concerned, which isnotconsistent withtheDSU.
Finally, India asserts thatacomparison oftheprovisions oftheATContheTMB andthe
provisions oftheMulti-Fibre Arrangement (the"MFA") ontheTextiles Surveillance Body (the"TSB"),
reveals thattheTMB, incontrast totheTSBunder theMFA, hasawell-defined, limited function of
alegalnature.
Inresponse totheargument bytheUnited States thatthePanel'sstatement ontheroleofthe
TMB ismerely obiter dictaonwhich theAppellate Body neednotrule,Indiaargues thatArticles 17.6,
17.12 and17.13 oftheDSUdonotdistinguish between dicta andfindings. According toIndia, the
right toappellate review would beseriously impaired ifpanels could express legalopinions onany
point other thantheissues involved inthecasebefore them andMembers oftheWTO could notseek
anappellate review ofthose opinions.
3. Judicial Economy
India points outthatthePanel didnotmake findings ontwoofthefourissues India submitted
tothePanel forexamination: namely, whether theUnited States 'failure tospecify initsrequest for
consultations whether theproposed transitional safeguard action related toserious damage ortheactual
threat ofserious damage wasconsistent withArticle 6oftheATC;andwhether theretroactiveWT/DS33/AB/R
Page6
application bytheUnited States ofitstransitional safeguard action wasconsistent withArticle 2of
theATC.
India argues that, within theframework oftheATC,thedetermination, therequest for
consultations onaproposed transitional safeguard action andtheactual application ofthetransitional
safeguard action mustberegarded asdistinct measures thatcanbecontested separately. India states
thatitcontested these measures separately notforthepurpose ofmaking thepanel address theoretical
issues,butratheroutofapracticalconcernrelatingtotheimplementationofthePanel'srecommendations
bytheUnited States. India argues thatbydefining thethree factually andlegally distinct measures
asasingle, "contested measure", thePanel denied India theright toanobjective assessment ofthe
request forconsultations andtheapplication ofthetransitional safeguard action inaccordance with
Article 11oftheDSU.7India insists thatitisnotarguing thatpanels havetoaddress inallinstances
alllegalclaims made bytheparties. Indiaacknowledges thattherearemany instances inwhich afinding
ononematter resolves thedispute onanother matter. Inthepresent case, however, India maintains
thatthePanel'sfindings didnotresolve thedispute onthetwomatters referred toabove.
India asserts thatthePanel failed todistinguish thecontested "measure" from thematter to
beexamined. India explains thatanydispute brought byaWTO Member under Article XXIII:1(a)
oftheGATT 1994concerns anactoromission ofanother Member, thatisa"measure". India notes
thatthedispute settlement procedures oftheWTO begin withconsultations onaspecific measure and
endwitharecommendation onthatmeasure. However, Indiamaintains thatthematter thepanel must
examine inaccordance withArticles 6,7and11oftheDSUisnotthemeasure byitself, butrather
thelegalclaims which theparties tothedispute make inconnection withthemeasure. India concludes
thatthefunction assigned toapanel under Article 11oftheDSUis,thus, toexamine alllegalclaims
made relating toallmeasures atissue. India concludes thatbydefining itstasksolely interms ofthe
measure tobebrought intoconformity withtheATC,thePanel curtailed India'srighttoanobjective
assessment ofallthelegalclaims ithadmade initsrequest forapanel. India alsoobserves thatwhile
apanel mustexamine allclaims made bytheparties tothedispute andcannot gobeyond these claims,
itneednotexamine allarguments oftheparties andcandevelop itsownarguments.
India asserts thatthepanels established under theGATT 1947 didnotapply theconcept of
judicial economy assuggested bythePanel inthePanel Report. India contends thatthose previous
panels didnotsystematically endtheirlegalanalysis assoonastheyhadfound thecontested measure
7India alsoasserts thatthequestion ofwhatconstitutes the"measure" thatmaybemaintained inaccordance withArticle
6.12oftheATCforaperiod ofuptothree years andthequestion ofwhatconstitutes "thespecific measures atissue" within
themeaning ofArticle 6oftheDSU areobviously completely different issues.WT/DS33/AB/R
Page7
tobeinconsistent withtheGATT 1947, butinstead determined thescope oftheirexamination inthe
lightoftheobjectives andlegalinterests oftheparties tothedispute. India argues thathadthePanel
inthiscasebeenguided bythecustomary practice oftheCONTRACTING PARTIES totheGATT
1947, itwould havedetermined thescope ofitsexamination inthelightofIndia'sexpressed legal
interest infindings onwhich thePanel failed torule. Because thePanel inthiscasewasnotguided
bythiscustomary practice, India argues thatmatters thatcould beresolved inoneproceeding will
havetoberesolved instead inmultiple proceedings iffuture panels apply thisPanel'sconcept ofjudicial
economy.
Therefore,IndiasubmitsthatthePanel'sapplicationofthenotionofjudicialeconomyundermines
theobjectives oftheDSU,which aredescribed inArticle 3.2oftheDSUandinIndia'sview, include
bothdispute resolution aswellasdispute prevention. India maintains thatthese objectives canonly
beachieved ifpanels resolve boththedispute overtheparticular contested measure andtheissues of
interpretation arising from alllegalclaims made inconnection withthatmeasure.
B. United States
Withrespect toeachofthethree issues raised inthisappeal, theUnited States argues thatthe
Panel acted correctly. TheUnited States askstheAppellate Body toaffirm thePanel Report.
1. Burden ofProof
TheUnited States argues thatthePanel properly addressed theissue ofburden ofproof in
paragraphs 6.7and7.12ofthePanel Report. Unlike India, theUnited States doesnotseeany
contradiction between thePanel'sstatements inparagraphs 6.7and7.12ofthePanel Report, and
considers paragraph 6.7tobethefinalinterpretative word onthisissue bythePanel. AstheUnited
States seesit,thePanel found, consistently withtheDSU,thatbothIndia andtheUnited States had
differing burdens topresent factual andlegalarguments: first, asthecomplaining party, India had
theinitial burden ofestablishing "aprima faciecaseofviolation oftheATC, namely, thattherestrictions
imposed bytheUnited States didnotrespect theprovisions ofArticle 2.4and6oftheATC"; then,
afterIndia hadestablished aprima faciecase,theUnited States hadtheburden "toconvince thePanel
that,atthetimeofitsdetermination, ithadrespected therequirements ofArticle 6oftheATC".
TheUnited States argues thatthePanel didnotassign anyburden ofproof, inthesense of
burden ofpersuasion, toeither IndiaortheUnited States. TheUnited States contends thatIndiadistorts
thefindings ofthePanel when itclaims thatthePanel heldthatIndia hadtheultimate burden ofWT/DS33/AB/R
Page8
persuasion. According totheUnited States, thePanel merely required India tomeettheburden of
going forward withtheevidence. TheUnited States argues thatitisclearfromtheordinary meaning
ofArticles 3.8,6.2andparagraph 5oftheworking procedures forpanels inAppendix 3oftheDSU
thatIndia hadtheobligation toinitiate andcommence thelegalandfactual issues, notonlyatthestage
ofarequest forapanel, butalsoatthefirstsubstantive meeting oftheparties. Inother words, India
hadtomake aprima faciedemonstration thattheUnited States 'measure violated provisions ofthe
ATC.TheUnited States stresses that,infact,India didsosuccessfully inthepresent case.
TheUnited States argues thatIndia incorrectly asserts thatthere isa"consistently applied"
and"well-established" GATT practice thattheparty invoking anexception carries theburden ofproof
ofjustifying theuseoftheexception. According totheUnited States, thepanel reports citedbyIndia
initsappellant 'ssubmission donotreflect GATT practice justifying India'sarguments that: (1)
everything other thanIndia's"core rules" areexceptions; (2)all"exceptions" arerequired tobe
construed narrowly; and(3)thecomplaining party hasnoburden todemonstrate thataso-called
"exception" wasimproperly invoked. TheUnited States maintains thatthereports cited areeither
distinguishable, irrelevant, orcontradicted byother reports, andthatonlyinafewspecial situations
involving thegeneral exceptions oftheGATT 1994 andother isolated exceptions oftheGATT 1994
havepanels consistently assigned theultimate burden ofpersuasion toaparticular party.
According totheUnited States, indisputes involving thevastmajority ofGATT provisions,
itiswell-established practice thatthecomplaining party hastheburden ofmaking aprima faciecase.
Furthermore, theUnited States argues thatIndia'slegaltaxonomy isoverly simplistic inthatittreats
allso-called "exceptions" identically andfailstoconsider thereasons whysuchso-called "exceptions"
exist. TheUnited States argues thatIndia alsoignores thefactthat,inaddition to"obligations", WTO
Member alsohave"rights", andthatmany, ifnotmost, ofwhatwould beconsidered "exceptions"
under India'staxonomy aremore properly viewed as"rights". TheUnited States argues thatIndia's
approach results ina"crude" method oftreaty interpretation thatisatoddswithwhattheAppellate
Body saidinUnited States -Standards forReformulated andConventional Gasoline ,inthesense that
India'streatment ofso-called "exceptions" isnotcase-by-case, butinstead isasimplistic, "one-size-fits-
all"mechanical approach totreaty interpretation.8
8ReferringtotheAppel lateBody Repor tinUnitedStates-StandardsforReformulatedandConventionalGasoline,AB-1996-
1,adopted 20May1996, WT/DS2/9, p.19,theUnited States argues thatIndia'sapproach ignores the"object andpurpose"
ofprovisions, itprovides forno"scrutiny ofthefactual andlegal context inagiven dispute" anditdisregards "thewords
actually used byWTO Members themselves toexpress their intent andpurpose".WT/DS33/AB/R
Page9
Finally, theUnited States argues thatIndia'stheory, ifaccepted, would altersignificantly
therights andobligations ofWTO Members withrespect toamultitude ofprovisions oftheGATT
1994 andother WTO agreements.9
Assuming arguendo thatIndiacorrectly asserts thatthereisa"consistently applied" and"well-
established" GATT practice thattheparty invoking anexception carries theburden ofproof, theUnited
States argues thatArticle 6oftheATCisnotsuchanexception. Thenon-exceptional nature ofArticle
6isreflected inArticle 2.4oftheATC,which states twoverygeneral rules, namely, thattextile
restrictions existing before theATCcame intoforce would begrandfathered, andthatnewrestrictions
maybeintroduced onlyinaccordance withtheprovisions oftheATCandother relevant provisions
oftheGATT 1994. TheUnited States contends thattheterm"except" usedinArticle 2.4oftheATC
isinthiscontext asynonym for"only", "provided that", or"unless" andcannot bereadasanindication
thatArticle 6oftheATCisanexception. TheUnited States addsaswellthatthetext,context and
object ofArticle 6oftheATCsupport theconclusion thatArticle 6isnotaprovision thatcompels
ashifting oftheburden ofproof. TheUnited States argues thatforimporting countries, Article 6
constituted acritical quidproquofortheacceptance oftheATC'sphase-out ofpre-existing quotas
andintegration oftextiles andclothing trade intothemultilateral trading system. TheUnited States
asserts thatasanintegral ATCprovision, thetransitional safeguard mechanism isonanequal footing
withtheother provisions oftheATC,suchastheintegration schedule ofArticle 2.Therefore, the
United States concludes, thephrase "should beapplied assparingly aspossible" inArticle 6.1ofthe
ATCdoesnotprovide support forthenotion thatArticle 6isanexceptional provision; rather, that
phrase merely reminds Members nottoabuse their right tousetemporary, transitional safeguard
measures.10TheUnited States asserts thatthetreatment ofArticle 6oftheATCasanexception would
upset thecarefully negotiated balance ofrights andobligations ofArticle 6.11
2. TheTMB
TheUnited States argues thatthePanel'sdiscussion oftheTMB wasmere obiter dictawhich
hadnoeffect ontheoutcome ofthecase, andthatitisdifficult toseehowIndia'sprocedural rights
9TheUnited asserted thatunder India'stheory, alloftheWTO provisions providing special anddifferential treatment
fordeveloping countries would belabelled asexceptions andthat,therefore, theburden ofpersuasion would beonthe
developing country seeking torelyononeofthese provisions.
10TheUnited States notes thattheAppellate Body inUnited States -Restrictions onImports ofCotton andMan-made
Fibre Underwear ,AB-1996-3, adopted 25February 1997, WT/DS24/AB/R, p.15,didnotinterpret Article 6oftheATC
either narrowly orbroadly andindicated thatthe"assparingly aspossible" language could notbeexamined inisolation.
11TheUnited States notes thattheAppellate Body inUnited States -Restrictions onImports ofCotton andMan-made
Fibre Underwear ,didnot"loosen upthecarefully negotiated language ofArticle 6.10, which reflect anequally carefully
drawn balance ofrights andobligations ofMembers ...".WT/DS33/AB/R
Page10
under theATChave been denied inanywaybythisdicta.TheUnited States considers thatthe
appropriate manner of"addressing" thisPanel'sdictaonanissueraised byneither oftheparties would
befortheAppellate Body simply todeclare thisaspect ofthereport tobedicta andnottoofferany
additional dicta ofitsownwithrespect totheroleoftheTMB.
Furthermore, theUnited States observes thatnothing inthetextoftheATCsupports India's
assertion thattheinformation considered bytheTMB initsexamination ofthetransitional safeguard
action mustbelimited totheinformation usedbytheimporting Member inmaking itsdetermination
totakethetransitional safeguard action. According totheUnited States, Article 6.10oftheATC,
andinparticular thephrase, "anyother relevant information", clearly contemplates theconsideration
ofinformation thatisnotthesameasthatusedbytheimporting Member atthetimeofthedetermination
totaketheaction. TheUnited States alsoargues thatnothing intheATCsupports India'sassertion
thattheTMB, incontrast totheTSB, hasawell-defined, limited function ofalegalnature.
3. Judicial Economy
TheUnited States argues thatthePanel didnoterrbydeclining toruleonallclaims made
byIndia. According totheUnited States, nothing intheDSUorelsewhere intheWTO Agreement
requires apanel toruleonevery claim raised byaparty. TheUnited States argues thatthetextof
Article 11oftheDSU doesnotimpose suchobligation. TheUnited States citesArticle 3.7ofthe
DSUfortheproposition thattheprimary function ofthedispute settlement system istoresolve disputes
byachieving thewithdrawal ofWTO-inconsistent measures, nottorender interpretations ortogenerate
opinions onanyissue. TheUnited States notes thatArticle IXoftheWTO Agreement provides a
mechanism forobtaining authoritative interpretations, asrecognized inArticle 3.9oftheDSU.12The
United States doesnotaccept India'sargument thatWTO dispute settlement hasthe"twin objective"
of"dispute resolution" and"dispute prevention". According totheUnited States, thisargument is
atoddswithArticles 3.7and3.9oftheDSU.TheUnited States maintains that"dispute prevention"
is,atmost, asubsidiary function under theDSU,andonewhich doesnottranslate intoalegal
requirement thatapanel address every claim raised byaparty.
With respect toIndia'sargument thatthere arethree "measures", rather thanone,atissue in
thiscase13,theUnited States observes thatitisclearfromArticle 6.12oftheATCthatthe"measure"
12TheUnitedStatesrefersinthiscontexttotheAppel lateBody Repor tinJapan-TaxesonAlcoholicBeverages,AB-1996-2,
adopted 1November 1996, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, pp.13-15.
13India argues thatnotonlytheUnited States 'determination, butalsotheUnited States 'request forconsultations and
thebackdating oftheUnited States 'restraint each constitute adistinct "measure" thatcanbecontested separately.WT/DS33/AB/R
Page11
isinfactthetransitional safeguard action, nottheprocedures leading uptotheimposition ofthe
transitional safeguard action. Intheopinion oftheUnited States, India'sinterpretation of"measure"
constitutes thesortofarbitrary subdivision ofameasure thattheAppellate Body criticized inUnited
States -Standards forReformulated andConventional Gasoline .TheUnited States alsoargues that
India'sbelated identification ofthree measures, rather thanonemeasure, isnothing more thanapost
hocargument presented forthefirsttimeinthisappeal.
TheUnited States points outthatinaddition tobeing consistent withthetextoftheDSU,the
Panel'sdecision torefrain from ruling oncertain issues raised byIndia wasconsistent withthe
well-established practice oftheGATT 1947 panels, which frequently declined toaddress claims in
situations where theresolution ofaclaim wasunnecessary forthepurpose ofresolving adispute.
TheUnited States asserts thatthispractice hasbeencontinued under theDSUandtheWTO Agreement
bybothWTO panels andtheAppellate Body.
TheUnited States alsosuggests that,asanalternative tofinding thatthePanel didnoterrwhen
itdeclined tomake findings oncertain issues, theAppellate Body, asitdidinBrazil -Measures Affecting
Desiccated Coconut ,could simply address theissue bydeciding thatitisunnecessary toresolve the
procedural issue raised byIndia since itwillhaveabsolutely noeffect ontheprevious conclusion by
thePanel thatthetransitional safeguard measure imposed bytheUnited States wasinconsistent with
theATC.
Finally,theUnitedStatesobservesthatthepracticeofpanelsandtheAppellateBodyinrefraining
from making findings thatareunnecessary totheresolution ofdisputes hasbeendescribed asbeing
based onconcerns ofjudicial economy. TheUnited States argues thattotheextent suchconcerns
were valid under thepre-WTO regime, theyare,inview ofthenumber ofmatters nowreferred to
theDSB, evenmore valid today. Inorder topreserve theintegrity oftheWTO system ingeneral,
andthedispute settlement mechanism inparticular, theUnited States argues thatbothpanels andthe
Appellate Body should focus onlyonthose claims thatmust beaddressed toresolve adispute.WT/DS33/AB/R
Page12
III. Issues Raised inthisAppeal
Thisappeal raises thefollowing legalissues:
(a) Whether aparty claiming thatatransitional safeguard action violates Article 6ofthe
ATChastheburden ofdemonstrating thatthere hasbeen aninfringement ofthe
obligations assumed under theATC;
(b) WhethertheTMBislimitedinitsexaminationofatransitionalsafeguardactionpursuant
toArticle 6.10oftheATCtotheevidence usedbytheimporting Member inmaking
itsdeterminationtotakesuchaction,ormayalsoconsiderdevelopmentsandinformation
subsequent tothatdetermination; and
(c) Whether, under Article 11oftheDSU,acomplaining party isentitled toafinding
onallofthelegalclaims itmakes toapanel relating tothemeasure indispute.
IV. Burden ofProof
Ontheissue ofburden ofproof, thePanel concluded thefollowing atparagraph 7.12ofthe
"Findings" section ofthePanel Report:
Theparties seem tohaveaddressed twodifferent aspects ofwhatone
might callthe"burden ofproof" issue. Webelieve thatadistinction
should bemade. First, weconsider thequestion ofwhich party bears
theburden ofproof before thePanel. Since India istheparty that
initiated thedispute settlement proceedings, weconsider thatitisfor
India toputforward factual andlegalarguments inorder toestablish
thattheUSrestriction wasinconsistent withArticle 2oftheATC and
thattheUSdetermination forasafeguard action wasinconsistent with
theprovisions ofArticle 6oftheATC. Second, weconsider the
question ofwhattheimporting Member mustdemonstrate atthetime
ofitsdetermination. Concerning thesubstantive obligations under
Article 6oftheATC, itisclearfromthewording ofArticle 6.2and
6.3oftheATC that,initsdetermination oftheneedfortheproposed
restraint, theUnited States hadtheobligation todemonstrate thatit
hadcomplied withtherelevant conditions ofapplication ofArticle 6.2
and6.3oftheATC.WT/DS33/AB/R
Page13
ThePanel illuminated thisfinding atparagraph 6.7inthe"Interim Review" section ofthePanel
Report:
Concerning India'scomment about burden ofproof, itwasforIndia
tosubmit aprima faciecaseofviolation oftheATC, namely, thatthe
restriction imposed bytheUnited States didnotrespect theprovisions
ofArticles 2.4and6oftheATC. ItwasthenfortheUnited States
toconvince thePanel that,atthetimeofitsdetermination, ithad
respected therequirements ofArticle 6oftheATC.
Although thePanel'sfinding atparagraph 7.12andcomments oninterim review atparagraph
6.7ofthePanel Report arenotamodel ofclarity, wedonotbelieve thePanel erred inlaw.Weagree
withthePanel thatitwasuptoIndia topresent evidence andargument sufficient toestablish a
presumption thatthetransitional safeguard determination made bytheUnited States wasinconsistent
withitsobligations under Article 6oftheATC.With thispresumption thusestablished, itwasthen
uptotheUnited States tobring evidence andargument torebut thepresumption.
Thefoundation ofdispute settlement under Article XXIII oftheGATT 1994 istheassurance
toMembers ofthebenefits accruing directly orindirectly tothem under theGATT 1994. Thiswas
trueaswellofdispute settlement under theGATT 1947. IfanyMember should consider thatitsbenefits
arenullified orimpaired astheresult ofcircumstances setoutinArticle XXIII, thendispute settlement
isavailable. With respect tocomplaints ofviolation ofobligations pursuant toArticle XXIII:1(a) of
theGATT 1994, Article 3.8oftheDSUcodifies previous GATT 1947 practice:
Incases where there isaninfringement oftheobligations assumed
under acovered agreement, theaction isconsidered prima facie to
constitute acaseofnullification orimpairment. Thismeans thatthere
isnormally apresumption thatabreach oftherules hasanadverse
impact onother Members parties tothatcovered agreement, andin
suchcases, itshallbeuptotheMember against whom thecomplaint
hasbeenbrought torebut thecharge.
Article 3.8oftheDSUprovides thatincases where thereisaninfringement oftheobligations
assumed under acovered agreement --thatis,incases where aviolation isestablished --there isa
presumption ofnullification orimpairment. Article 3.8thengoesontoexplain that"theMember against
whom thecomplaint hasbeenbrought" mustrebut thispresumption. However, theissue inthiscase
isnotwhat happens afteraviolation isestablished; theissue inthiscaseiswhich party must first
show thatthere is,orisnot,aviolation. More specifically, theissue inthiscaseiswhich party hasWT/DS33/AB/R
Page14
theburden ofdemonstrating thattherehas,orhasnotbeen, aninfringement oftheobligations assumed
under Article 6oftheATC.14
Inaddressing thisissue, wefinditdifficult, indeed, toseehowanysystem ofjudicial settlement
could work ifitincorporated theproposition thatthemereassertion ofaclaim might amount toproof.
Itis,thus, hardly surprising thatvarious international tribunals, including theInternational Court of
Justice, havegenerally andconsistently accepted andapplied therulethattheparty whoasserts afact,
whether theclaimant ortherespondent, isresponsible forproviding proof thereof.15Also, itisa
generally-accepted canon ofevidence incivillaw,common lawand,infact,mostjurisdictions, that
theburden ofproof restsupontheparty, whether complaining ordefending, whoasserts theaffirmative
ofaparticular claim ordefence. Ifthatparty adduces evidence sufficient toraiseapresumption that
whatisclaimed istrue,theburden thenshifts totheother party, whowillfailunless itadduces sufficient
evidence torebut thepresumption.16
Inthecontext oftheGATT 1994andtheWTO Agreement ,precisely howmuch andprecisely
whatkindofevidencewillberequiredtoestablishsuchapresumptionwillnecessarilyvaryfrommeasure
tomeasure, provision toprovision, andcasetocase.
Anumber ofGATT 1947 panel reports contain language supporting theproposition thatthe
burden ofestablishing aviolation under Article XXIII:1(a) oftheGATT 1947wasonthecomplaining
party. Asearly as1952, inTreatment byGermany ofImports ofSardines ,concerning acomplaint
byNorway, thepanel clearly puttheburden ofestablishing aviolation oftheGATT 1947obligations
atissue onthecomplaining party, when itconcluded:
Theexamination oftheevidence submitted ledthePanel tothe
conclusion thatnosufficient evidence hadbeenpresented toshow that
14Article 8.10, lastsentence, oftheATC,allows aMember toinvoke Article XXIII oftheGATT 1994.
15M.Kazazi, Burden ofProof andRelated Issues: AStudy onEvidence Before International Tribunals (Kluwer Law
International, 1996), p.117.
16SeeM.N. Howard, P.Crane andD.A. Hochberg, Phipson onEvidence ,14thed.(Sweet &Maxwell, 1990), p.52:
"The burden ofproof rests upon theparty, whether plaintiff ordefendant, whosubstantially asserts theaffirmative ofthe
issue." SeealsoL.Rutherford andS.Bone (eds.), Osborne 'sConcise LawDictionary ,8thed.(Sweet &Maxwell, 1993),
p.266; EarlJowitt andC.Walsh, Jowitt 'sDictionary ofEnglish Law,2nded.byJ.Burke (Sweet &Maxwell, 1977), Vol.1,
p.263; L.B.Curzon, ADirectory ofLaw,2nded.(Macdonald andEvans, 1983), p.47;Art.9,Nouveau Code deProcédure
Civile; J.Carbonnier, Droit Civil, Introduction, 20thed.(Presses Universitaires deFrance, 1991), p.320; J.Chevalier
andL.Bach, Droit Civil,12thed.(Sirey, 1995), Vol.1,p.101; R.Guillien andJ.Vincent, Termes juridiques ,10thed.
(Dalloz, 1995), p.384; O.Samyn, P.Simonetta andC.Sogno, Dictionnaire desTermes Juridiques (Editions deVecchi,
1986), p.250; J.González Pérez, Manual deDerecho Procesal Administrativo ,2nded.(Editorial Civitas, 1992), p.311;
C.M. Bianca, S.PattiandG.Patti, Lessico diDiritto Civile (Giuffré Editore, 1991), p.550;F.Galgano, Diritto Privato ,
8thed.(Casa Editrice Dott. Antonio Milani, 1994), p.873; andA.Trabucchi, Istituzioni diDiritto Civile (Casa Editrice
Dott. Antonio Milani, 1991), p.210.WT/DS33/AB/R
Page15
theGerman Government hadfailed tocarry outitsobligations under
Article I:1andArticle XIII:1.17
In1978, inEEC-Measures onAnimal FeedProteins ,concerning acomplaint bytheUnited
States, thepanel made itequally clear thattheburden ofproof inthatcasewasonthecomplaining
party. Inthefinalparagraph ofthatpanel report, thepanel stated:
Having heard noevidence thateither thepurchasing obligation, the
security deposit ortheprotein certificate discriminated against imports
of"like products" from anycontracting party, thePanel concluded
thattheEECmeasures werenotinconsistent withtheEECobligations
under Article I:1.18
Tworecent panel reports under theGATT 1947which follow thisapproach arethe1992report
inCanada-Import,DistributionandSaleofCertainAlcoholicDrinksbyProvincialMarketingAgencies19
andthe1994 report inUnited States -Measures Affecting theImportation, Internal SaleandUseof
Tobacco .20Inthefirstcase,theUnited States claimed thatCanada hadnotfullyeliminated thelisting
anddelisting practices thataprior GATT panel report hadfound tobeinconsistent withArticle XI
oftheGATT 1947. Thepanel concluded, however, thatwiththeexception ofthelisting anddelisting
practices oftheprovince ofOntario, theUnited States hadnotsubstantiated itsclaim thatCanada still
maintained listing anddelisting practices inconsistent withArticle XIoftheGATT 1947. Inthesecond
case, thecomplainants claimed, inter alia,thatthepenalty provisions oftheDomestic Marketing
Assessment legislation enacted bytheUnited States wereseparate taxesorcharges within themeaning
ofArticle III:2oftheGATT 1947, andthatSection 1106(c) ofthe1993 Budget ActoftheUnited
States, mandated action inconsistent withArticle VIII:1(a) oftheGATT 1947. With regard toboth
claims, thepanel concluded thattheevidence submitted toitdidnotsupport thecomplainants 'claims
ofinconsistency withtheGATT 1947 obligations involved.
Indiahasargued thatitis"customary GATT practice" thatthepartyinvoking aprovision which
isidentified asanexception must offer proof thattheconditions setoutinthatprovision aremet.
Weacknowledge thatseveral GATT 1947andWTO panels haverequired suchproof ofapartyinvoking
17Adopted 31October 1952, BISD 1S/53, para. 15.Seealsothereport oftheWorking Party inTheAustralian Subsidy
onAmmonium Sulphate ,adopted 3April 1950, BISD Vol.II/188, para. 11.
18Adopted 14March 1978, BISD 25S/49, para. 4.21. SeealsoEuropean Communities -Refunds onExports ofSugar ,
Complaint byBrazil ,adopted 10November 1980, BISD 27S/69, para. (e)oftheConclusions; Canada, Administration of
theForeign Investment Review Act,adopted 7February 1984, BISD 30S/140, para. 5.13; andJapan -Tariff onImport
ofSpruce, Pine, Fir(SPF) Dimension Lumber ,adopted 19July1989, BISD 36S/167, para. 10.
19Adopted 18February 1992, BISD 39S/27, paras. 5.2-5.3.
20Adopted 4October 1994, DS44/R, paras. 82and124.WT/DS33/AB/R
Page16
adefence, suchasthose found inArticle XX21orArticle XI:2(c)(i)22,toaclaim ofviolation ofaGATT
obligation, suchasthose found inArticles I:1,II:1,IIIorXI:1. Articles XXandXI:(2)(c)(i) arelimited
exceptions from obligations under certain other provisions oftheGATT 1994, notpositive rules
establishing obligations inthemselves. They areinthenature ofaffirmative defences. Itisonly
reasonable thattheburden ofestablishing suchadefence should restontheparty asserting it.23
Wedonotbelieve thatthese particular previous GATT 1947panel reports arerelevant inthis
case. Thiscaseconcerns Article 6oftheATC.TheATCisatransitional arrangement that,byits
ownterms, willterminate when trade intextiles andclothing isfullyintegrated intothemultilateral
trading system. Article 6oftheATCisanintegral partofthetransitional arrangement manifested
intheATC andshould beinterpreted accordingly. AstheAppellate Body observed inUnited
States -Restrictions onImports ofCotton andMan-made Fibre Underwear withrespect toArticle 6.10
oftheATC,webelieve Article 6is"carefully negotiated language ...which reflects anequally carefully
drawn balance ofrights andobligations ofMembers ...."24Thatbalance must berespected.
Thetransitional safeguard mechanism provided inArticle 6oftheATCisafundamental part
oftherights andobligations ofWTO Members concerning non-integrated textile andclothing products
covered bytheATCduring thetransitional period. Consequently, aparty claiming aviolation ofa
provision oftheWTO Agreement byanother Member must assert andprove itsclaim. Inthiscase,
India claimed aviolation bytheUnited States ofArticle 6oftheATC.Weagree withthePanel that
it,therefore, wasuptoIndia toputforward evidence andlegal argument sufficient todemonstrate
thatthetransitional safeguard action bytheUnited States wasinconsistent withtheobligations assumed
bytheUnited States under Articles 2and6oftheATC.India didsointhiscase. And, withIndia
having done so,theonusthenshifted totheUnited States tobring forward evidence andargument
21Canada -Administration ofForeign Investment Review Act,adopted 7February 1984, BISD 30S/140, para. 5.20;
United States -Section 337oftheTariff Actof1930,adopted 7November 1989, BISD 36S/345, para. 5.27; United
States -Measures Affecting Alcoholic andMaltBeverages ,adopted 19June1992, BISD 39S/206, paras. 5.43and5.52;
andPanel Report, United States -Standards forReformulated andConventional Gasoline ,asmodified bytheAppellate Body
Report, AB-1996-1, adopted 20May 1996, WT/DS2/9, para. 6.20.
22Japan -Restrictions onImports ofCertain Agricultural Products ,adopted 22March 1988, BISD 35S/163, para. 5.1.3.7;
EEC -Restrictions onImports ofDessert Apples ,Complaint byChile, adopted 22June1989, BISD 36S/93, para. 12:3;
andCanada -Import Restrictions onIceCream andYoghurt ,adopted 5December 1989, BISD 36S/68, para. 59.
23Furthermore, there areafewcases thataresimilar inthatthedefending party invoked, asadefence, certain provisions
andthepanel explicitly required thedefending party todemonstrate theapplicability oftheprovision itwasasserting. See,
forexample, United States -Customs User Fee,adopted 2February 1988, BISD 35S/245, para. 98,concerning Article II:2
oftheGATT 1947; Canada -Import, Distribution andSaleofCertain Alcoholic Drinks byProvincial Marketing Agencies ,
adopted 22March 1988, BISD 35S/37, para4.34, concerning Article XXIV:12 oftheGATT 1947; andUnited States -
Measures Affecting Alcoholic andMaltBeverages ,adopted 19June1992, BISD 39S/206, para. 5.44, concerning theProtocol
ofProvisional Application.
24AB-1996-3, adopted 25February 1997, WT/DS24/AB/R, p.15.WT/DS33/AB/R
Page17
todisprove theclaim. This, theUnited States wasnotabletodoand,therefore, thePanel found that
thetransitional safeguard action bytheUnited States "violated theprovisions ofArticles 2and6of
theATC".25
Inourview, thePanel didnoterronthisissue inthiscase.
V. TheTMB
India appealed thefollowing statement relating toArticle 6.10oftheATCatparagraph 7.20
ofthePanel Report:
During thereview process, theTMB isnotlimited totheinitial
information submitted bytheimporting Member asparties maysubmit
additional andother information insupport oftheirpositions, which,
weunderstand ,mayrelate tosubsequent events. (emphasis added)
Inourview,thisstatementbythePanelispurelyadescriptiveandgratuitouscommentproviding
background concerning thePanel'sunderstanding ofhowtheTMB functions. Wedonotconsider
thiscomment bythePanel tobe"alegalfinding orconclusion" which theAppellate Body "may uphold,
modify orreverse".26
VI. Judicial Economy
With respect totheissue ofwhether Article 11oftheDSUentitles acomplaining party toa
finding oneachofthelegalclaims itmakes toapanel, thePanel stated inparagraph 6.6ofthePanel
Report:
Concerning India’sargument thatArticle 11oftheDSUentitles India
toafinding oneachoftheissues itraised, wedisagree andreferto
theconsistent GATT panel practice ofjudicial economy. India is
entitled tohavethedispute overthecontested “measure ”resolved by
thePanel, andifwejudge thatthespecific matter indispute canbe
resolved byaddressing onlysome ofthearguments raised bythe
25Panel Report, para. 8.1.
26Within themeaning ofArticle 17.13 oftheDSU.WT/DS33/AB/R
Page18
complaining party, wecandoso.We,therefore, decide toaddress
onlythelegalissues wethinkareneeded inorder tomake suchfindings
aswillassist theDSBinmaking recommendations oringiving rulings
inrespect ofthisdispute.
Thefunction ofpanels isexpressly defined inArticle 11oftheDSU,which reads asfollows:
Thefunction ofpanels istoassist theDSB indischarging its
responsibilities under thisUnderstanding andthecovered agreements.
Accordingly,apanelshouldmakeanobjectiveassessmentofthematter
before it,including anobjective assessment ofthefactsofthecase
andtheapplicability ofandconformity withtherelevant covered
agreements, andmake suchother findings aswillassist theDSBin
making therecommendations oringiving therulings provided forin
thecovered agreements ...(emphasis added).
Nothing inthisprovision orinprevious GATT practice requires apanel toexamine alllegal
claimsmadebythecomplainingparty.PreviousGATT1947andWTOpanelshavefrequentlyaddressed
onlythose issues thatsuchpanels considered necessary fortheresolution ofthematter between the
parties, andhavedeclined todecide other issues. Thus, ifapanel found thatameasure wasinconsistent
withaparticular provision oftheGATT 1947, itgenerally didnotgoontoexamine whether themeasure
wasalsoinconsistent withother GATT provisions thatacomplaining party mayhaveargued were
violated.27Inrecent WTO practice, panels likewise haverefrained from examining eachandevery
claim made bythecomplaining party andhavemade findings onlyonthose claims thatsuchpanels
concluded were necessary toresolve theparticular matter.28
27See,forexample, EEC-Quantitative Restrictions Against Imports ofCertain Products fromHong Kong,adopted 12
July1983, BISD 30S/129, para. 33;Canada -Administration oftheForeign Investment Review Act,adopted 7February
1984, BISD 30S/140, para. 5.16; United States -Imports ofSugar fromNicaragua ,adopted 13March 1984, BISD 31S/67,
paras. 4.5-4.6; United States -Manufacturing Clause ,adopted 15/16 May1984, BISD 31S/74, para. 40;Japan -Measures
onImports ofLeather ,adopted 15/16 May1984, BISD 31S/94, para. 57;Japan -Trade inSemi-Conductors ,adopted 4
May1988, BISD 35S/116, para. 122; Japan -Restrictions onImports ofCertain Agricultural Products ,adopted 22March
1988, BISD 35S/163, para. 5.4.2; EEC-Regulations onImports ofParts andComponents ,adopted 16May1990, BISD
37S/132, paras. 5.10, 5.22, and5.27; Canada -Import, Distribution andSaleofCertain Alcoholic Drinks byProvincial
Marketing Agencies ,adopted 22March 1988, BISD 35S/37, para. 5.6;andUnited States -Denial ofMost-Favoured-Nation
Treatment astoNon-Rubber Footwear from Brazil ,adopted 19June 1992, BISD 39S/128, para. 6.18.
28See,forexample, Panel Report, Brazil -Measures Affecting Desiccated Coconut ,adopted 20March 1997, WT/DS22/R,
para. 293; andPanel Report, United States -Standards forReformulated andConventional Gasoline ,asmodified bythe
Appellate Body Report, AB-1996-1, adopted 20May 1996, WT/DS2/9, para. 6.43.WT/DS33/AB/R
Page19
Although afewGATT 1947 andWTO panels didmake broader rulings, byconsidering and
deciding issues thatwerenotabsolutely necessary todispose oftheparticular dispute, thereisnothing
anywhere intheDSUthatrequires panels todoso.29
Furthermore, sucharequirement isnotconsistent withtheaimoftheWTO dispute settlement
system. Article 3.7oftheDSUexplicitly states:
Theaimofthedispute settlement mechanism istosecure apositive
solution toadispute. Asolution mutually acceptable totheparties
toadispute andconsistent withthecovered agreements isclearly to
bepreferred.
Thus, thebasic aimofdispute settlement intheWTO istosettle disputes. Thisbasic aimis
affirmed elsewhere intheDSU.Article 3.4,forexample, stipulates:
Recommendations orrulings made bytheDSB shall beaimed at
achieving asatisfactory settlement ofthematter inaccordance with
therights andobligations under thisUnderstanding andunder the
covered agreements.
AsIndiaemphasizes, Article 3.2oftheDSUstates thattheMembers oftheWTO "recognize"
thatthedispute settlement system "serves topreserve therights andobligations ofMembers under
thecovered agreements, andtoclarify theexisting provisions ofthose agreements inaccordance with
customary rules ofinterpretation ofpublic international law"(emphasis added). Given theexplicit
aimofdispute settlement thatpermeates theDSU,wedonotconsider thatArticle 3.2oftheDSUis
meant toencourage either panels ortheAppellate Body to"make law"byclarifying existing provisions
oftheWTO Agreement outside thecontext ofresolving aparticular dispute. Apanel needonlyaddress
those claims which must beaddressed inorder toresolve thematter inissue inthedispute.30
Wenote, furthermore, thatArticle IXoftheWTO Agreement provides thattheMinisterial
Conference andtheGeneral Council havethe"exclusive authority" toadopt interpretations oftheWTO
29See,forexample, EEC-Restrictions onImports ofDessert Apples ,Complaint byChile, adopted 22June1989, BISD
36S/93, para.12.20, where thepanel explicitly stated thatgiven itsfinding thattheEECmeasures were inviolation ofArticle
XI:1 oftheGATT 1947 andwere notjustified byArticle XI:2(c)(i) or(ii)oftheGATT 1947, nofurther examination of
theadministration ofthemeasures would normally berequired. Inthatcase, thepanel nonetheless considered it"appropriate"
toexamine theadministration oftheEEC measures inrespect ofArticle XIIIoftheGATT 1947 inview ofthequestions
ofgreat practical interest raised bybothparties.
30The"matter inissue" isthe"matter referred totheDSB" pursuant toArticle 7oftheDSU.WT/DS33/AB/R
Page20
Agreement andtheMultilateral Trade Agreements.31Thisisexplicitly recognized inArticle 3.9of
theDSU,which provides:
Theprovisions ofthisUnderstanding arewithout prejudice totherights
ofMembers toseekauthoritative interpretation ofprovisions ofa
coveredagreementthroughdecision-makingundertheWTOAgreement
oracovered agreement which isaPlurilateral Trade Agreement.
Inthelightoftheabove, webelieve thatthePanel'sfinding inparagraph 7.20ofthePanel
Report isconsistent withtheDSU aswellaswithpractice under theGATT 1947 andtheWTO
Agreement .
VII. Findings andConclusions
Forthereasons setoutinthisReport, theAppellate Body upholds thelegal findings and
conclusions ofthePanel.
TheAppellate Body recommends thattheDispute Settlement Body make aruling consistent
withthelegalfindings andconclusions inthePanel Report andthisReport.
31Japan -Taxes onAlcoholic Beverages ,AB-1996-2, adopted 1November 1996, WT/DS8/AB/R, WT/DS10/AB/R,
WT/DS11/AB/R, p.13.WT/DS33/AB/R
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Signed intheoriginal atGeneva this15thdayofApril 1997 by:
______________________________
Christopher Beeby
Presiding Member
______________________________ ______________________________
James Bacchus Mitsuo Matsushita
Member Member