WORLD TRADE WT/DS24/AB/R
10February 1997
ORGANIZATION(97-0454)
Appellate Body
United States -Restrictions onImports of
Cotton andMan-made Fibre Underwear
AB-1996-3
Report oftheAppellate BodyWT/DS24/AB/R
Page2
WORLD TRADE ORGANIZATION
APPELLATE BODY
United States -Restrictions onImports of
Cotton andMan-made Fibre Underwear
Costa Rica, Appellant
United States, Appellee
India, Third ParticipantAB-1996-3
Present:
Ehlermann, Presiding Member
Feliciano, Member
Matsushita, Member
I. Introduction: Factual Background andStatement oftheAppeal
Thisisanappeal byCosta Ricafrom certain issues oflawandlegal interpretations setout
inthePanel Report, United States -Restrictions onImports ofCotton andMan-made Fibre Underwear1
(the"Panel Report"). ThatPanel (the"Panel") hadbeenestablished toconsider acomplaint byCosta
Ricarelating toatransitional safeguard measure imposed bytheUnited States onimports ofcotton
andman-made fibreunderwear from Costa Ricaunder Article 6oftheAgreement onTextiles and
Clothing ("ATC").2
Thefactual background essential tounderstanding thisappeal, maybesketched quickly.
On27March 1995, theUnited States requested consultations withCosta Ricaontradeincotton
andman-made underwear under Article 6.7oftheATC.Atthesame time, theUnited States provided
Costa Ricawitha"Statement ofSerious Damage", dated March 1995 (the"March Statement"), on
thebasis ofwhich theUnited States proposed theintroduction ofarestraint onimports ofunderwear
from Costa Rica. Notice oftherequest forconsultations, theproposed restraint andtheproposed
1WT/DS24/R.
2Establishment ofanImport Limit forCertain Cotton andMan-Made Fibre Textile Products Produced orManufactured
inCosta Rica, 60Federal Register 32653, 23June 1995.WT/DS24/AB/R
Page3
restraint levelwaspublished intheUnited States Federal Register on21April 1995. Theconsultations
were heldbuttheUnited States andCosta Ricafailed tonegotiate amutually acceptable settlement
during these consultations. TheUnited States theninvoked Article 6.10oftheATC,andintroduced
atransitional safeguard measure inrespect ofcotton andman-made fibreunderwear imports fromCosta
Ricaon23June1995. Themeasure was,byitsterms, tobevalidforaperiod of12months, effective
asof27March 1995 (i.e.,thedateoftherequest forconsultations).
Atthesame time, theUnited States referred thematter totheTextiles Monitoring Body (the
"TMB"). TheTMB found thattheUnited States hadfailed todemonstrate serious damage totheUnited
States domestic industry. However, theTMB didnotreach aconsensus ontheexistence ofanactual
threat ofserious damage. TheTMB similarly failed tomake anyfindings ontheeffective dateof
application oftheUnited States restraint. Accordingly, theTMB recommended thattheUnited States
andCosta Ricaholdfurther consultations withaviewtoresolving thematter. Intheabsence ofany
settlement, theparties reverted totheTMB, which confirmed itsearlier findings andconsidered its
review ofthematter completed. Although further consultations tookplace between theUnited States
andCosta RicainNovember 1995, noagreement wasreached. InDecember 1995, therefore, Costa
Ricainvoked thedispute settlement provisions oftheUnderstanding onRules andProcedures Governing
theSettlement ofDisputes (the"DSU").
Apanel wasestablished toexamine thismatter on5March 1996. On27March 1996, the
United States renewed thetransitional safeguard measure forasecond period of12months. Indue
time,afterthefullcourseofwrittensubmissionsandhearingsandtheInterimReview,thePanelrendered
itsReport.
ThePanel Report wascirculated toMembers oftheWorld Trade Organization (the"WTO")
on8November 1996. Itcontains thefollowing conclusions:
(i) theUnited States violated itsobligations under Article 6.2and6.4oftheATCby
imposing arestriction onCosta Rican exports without having demonstrated thatserious
damage oractual threat thereof wascaused bysuchimports totheUnited States '
domestic industry;3
3Panel Report, paras. 7.52 and7.55.WT/DS24/AB/R
Page4
(ii) theUnited States violated itsobligations under Article 6.6(d) oftheATCbynotgranting
themore favourable treatment toCosta Rican re-imports contemplated bythatsub-
paragraph;4
(iii) theUnited States violated itsobligations under Article 2.4oftheATCbyimposing
arestriction inamanner inconsistent withitsobligations under Article 6oftheATC;5
and
(iv) theUnited States violated itsobligations under Article X:2oftheGeneral Agreement
onTariffs andTrade 1994 (the"General Agreement ")andArticle 6.10oftheATC
bysetting thestartoftherestraint period onthedateoftherequest forconsultations,
rather thanthesubsequent dateofpublication ofinformation about therestraint.6
ThePanel recommended thattheDispute Settlement Body request theUnited States tobring
themeasure challenged byCosta Ricaintocompliance withtheUnited States 'obligations under the
ATC.ThePanel stated thatsuchcompliance canbestbeachieved, andfurther nullification and
impairment ofbenefits accruing toCosta Ricaunder theATCbestavoided, by"prompt removal of
themeasure inconsistent withtheobligations oftheUnited States". ThePanel further suggested that
theUnited States bring themeasure challenged byCosta Ricaintocompliance withUnited States '
obligations under theATCby"immediately withdrawing therestriction imposed bythemeasure".7
On11November 1996, Costa Ricanotified theDispute Settlement Body8oftheWTO ofits
decision toappeal certain issues oflawcovered inthePanel Report andlegalinterpretations developed
bythePanel, pursuant toparagraph 4ofArticle 16oftheDSU.Onthesame day,Costa Ricafiled
aNoticeofAppealwiththeAppellateBody,pursuanttoRule20oftheWorkingProceduresforAppellate
Review (the"Working Procedures ").9Costa Ricafileditsappellant 'ssubmission on21November
4Panel Report, para. 7.59.
5Panel Report, para. 7.71.
6Panel Report, para. 7.69.
7Panel Report, para. 8.3.
8WT/DS/24/5.
9WT/AB/WP/1, 15February 1996.WT/DS24/AB/R
Page5
1996.10On6December 1996, theUnited States filedanappellee 'ssubmission.11Thatsame day,
India submitted athirdparticipant 'ssubmission.12Noother submissions byeither theUnited States
orCosta Rica, whether quaappellant orquaappellee, weremade. Thecomplete record ofthePanel
proceedings wasdulytransmitted totheAppellate Body.13
Theoralhearing contemplated byRule27oftheWorking Procedures washeldon16December
1996.Atthehearing,oralargumentsweremaderespectivelybytheparticipantsandthethirdparticipant.
Questions were puttothem bytheDivision. Allofthese questions were answered orally. The
participants andthird participant didnottakeadvantage ofaninvitation bytheDivision tosubmit
post-hearing memoranda. On18December 1996, theUnited States submitted awritten clarification
andamplification ofitsoralresponse tooneoftheDivision 'squestions. Thenextday,Costa Rica
responded inwriting totheUnited States 'clarification.
II. TheBasic Contentions oftheParticipants andtheThird Participant
1. TheClaims ofError byAppellant Costa Rica
Costa Ricaappeals onlyfromthePanel'sconclusions relating tothepermissible effective date
ofapplication oftheUnited States 'transitional safeguard measure.
ItisclaimedbyCostaRicathatthePanelerredinfindingthattheUnitedStates'restraintmeasure
could havelegaleffect between thedateofpublication ofthenotice ofconsultations (between theUnited
States andseveral countries, including Costa Rica) intheFederal Register (i.e., 21April 1995) and
thedateoftheapplication ofthatmeasure (i.e.23June1995). Therestriction was"introduced" on
23June1995foraperiod of12months starting on27March 1995, i.e.,starting onthedaytheUnited
StatesrequestedtheseveralMembersconcernedforconsultationsunderArticle6.7oftheATC.Invoking
Article 2.4oftheATC,Costa Ricaargues thatnewrestrictions maybeimposed inthetextiles sector
onlyunder either (i)theATCor(ii)the"relevant" provisions oftheGeneral Agreement .More
specifically, atransitional safeguard measure maybeimposed onlyifitmeets therequirements of(i)
Articles XI14andXIIIoftheGeneral Agreement ,orof(ii)Article 6oftheATC.Since, Costa Rica
10Pursuant toRule 21(1) oftheWorking Procedures .
11Pursuant toRule 23(3) oftheWorking Procedures .
12Pursuant toRule 24oftheWorking Procedures .
13Pursuant toRule 25oftheWorking Procedures .
14Costa Rica, however, didnotsubmit anyarguments inrespect ofArticle XI,General Agreement .WT/DS24/AB/R
Page6
argues, Article XIII:3(b) oftheGeneral Agreement generally prohibits thebackdating ofimport quotas,
abackdatedtransitionalsafeguardmeasurerestrictingimportswouldbepermissibleonlyifitisexpressly
authorized byArticle 6oftheATC,andthis,Article 6doesnot.Costa Ricaaccordingly concludes
thatsuchasafeguard measure cannot impose abackdated quota.
(a) Concerning Article XIIIoftheGeneral Agreement
CostaRicacontendsthatArticleXIII:3(b)oftheGeneralAgreementsetsoutageneralprohibition
against theretroactive application ofimport quotas andallows backdating ofsuchquotas onlyinthe
circumstances expressly provided for,i.e.,inrespect ofgoods enroute totheimporting country at
thetimepublic notice oftherestraint isgiven. ToCosta Rica, thereasoning ofthepanel inthe1989
Chilean Apples case15applies aswellinthepresent case,because there, ashere,theimport quota became
effective before thepublication oftherestraint. Article XIII:3(b) requires "public notice ofthetotal
quantity ---oftheproduct orproducts which willbepermitted tobeimported during aspecific future
period". Itisurged byCosta Ricathatthenotice published intheFederal Register on21April 1995
doesnotsatisfy therequirements ofArticle XIII:3(b), sincethepublication ofacontingent notice, which
provides merely forthepossibility ofarestraint rather thantheactual establishment oradoption of
asafeguardmeasure,failstobringaboutthelegalcertaintyandpredictabilitysoughtbyArticleXIII:3(b).
ThePanel erred, Costa Ricaconcludes, infinding ineffect thattheUnited States 'backdated restraint
substantially complies withtherequisites ofArticle XIII:3(b).
(b) Concerning Article XoftheGeneral Agreement
Itisfurther ineffect claimed byCosta Ricathateventhelimited backdating oftheUnited States '
restraint measure approved aspermissible bythePanel, i.e,.to21April 1995(thedatewhen therequest
forconsultations waspublished intheFederal Register) rather thanto27March 1995, (thedatewhen
consultations were infactrequested andinitiated), cannot bejustified byArticle XoftheGeneral
Agreement .InCosta Rica'sview, anybackdating thatcould result fromapplication ofArticle Xwould
beprecluded bythe"conflict clause" oftheGeneral Interpretative NotetoAnnex IAoftheMarrakesh
15European Economic Community -Restrictions onImports ofDessert Apples :Complaint byChile,BISD 36S/93, adopted
22June1989, p.132. SeealsoEuropean Economic Community -Restrictions onImports ofApples :Complaint bytheUnited
States ,BISD 36S/135, adopted 22June 1989, p.166.WT/DS24/AB/R
Page7
Agreement Establishing theWorld Trade Organization (the"WTO Agreement "):16theprovisions of
Article 6oftheATCwhich donotprovide forbackdating mustprevail overArticle XoftheGeneral
Agreement. Aprocedural argument isalsomade byCosta Ricainnoting thattheparties tothepresent
dispute hadnotraised theapplication ofArticle Xbefore thePanel. Costa Ricathusconcludes that
thePanel haderred inapplying Article XoftheGeneral Agreement.
(c) Concerning Article 6oftheATC
Costa Ricastates thatArticle 6oftheATCis"silent" onthequestion ofbackdated transitional
safeguard measures, andthatcertain considerations concerning Article 6prevent aninterpretation of
theprovisions thereof which would permit anybackdating. Topermit, Costa Ricaargues firstly, WTO
Members toimpose restraints within the30-day post-consultation "window" which become effective
atsome point outside (whether before orafter) that30-day period, could leadtocircumvention ofan
important requirement orobjective ofArticle 6.10oftheATC:thatanimporting country musttake
adefinitive orfinaldecision during the30-day period onwhether ornottoimpose aproposed restraint
atall.
Next, Costa Ricaunderscores theabsence inArticle 6.10oftheATCofaclause equivalent
tothatfound inArticle 3:5(i) oftheArrangement Regarding International Trade inTextiles which
became effective on1January 1974 andwhich iswidely known astheMultifibre Arrangement (the
"MFA").Article 3:5(i) oftheMFA expressly permitted theimporting country imposing arestraint
measure tobackdate theeffectivity ofsuchmeasure "beginning onthedaywhen therequest [for
consultations] wasreceived bytheparticipating exporting country orcountries", where noagreement
isreached afteraperiod of60daysfromreceipt oftherequest forconsultations. Itisurged byCosta
Ricathattheabsence ofequivalent wording inArticle 6.10oftheATCwasdeliberate andshould not
beremedied bytheexpansive interpretation ofArticle 6.10adopted bythePanel. Along thesame
vein, Costa Ricanotes theabsence inArticle 6.10oftheATCofwording similar orcomparable to
theprovisions expressly allowing retroactive application ofprovisional restraint measures under Article
10oftheAgreement onImplementation ofArticle VIoftheGATT 1994(the"Anti-Dumping Agreement ")
andunder Article 20oftheAgreement onSubsidies andCountervailing Measures (the"SCM
16ThetextoftheGeneral interpretative noteforAnnex 1Areads:
Intheevent ofconflict between aprovision oftheGeneral Agreement onTariffs and
Trade 1994 andaprovision ofanother agreement inAnnex 1AtotheAgreement
Establishing theWorld Trade Organization (referred tointheagreements inAnnex
1Aasthe"WTO Agreement"), theprovision oftheother agreement shallprevail to
theextent oftheconflict.WT/DS24/AB/R
Page8
Agreement ").According toCosta Rica, hadthedrafters oftheATCwanted toprovide forretroactive
safeguard restraints, theywould havedonesoexpressly.
Costa Ricaalsorejects thePanel'sstatements concerning thepossibility ofspeculative trade
being caused bytherequest oftheimporting country forconsultations required inArticle 6.7ofthe
ATC.Since noevidence hadbeenpresented tothePanel onthematter, appellant Costa Ricadenies
thatthePanel made afactual finding establishing thegeneral prevalence ofspeculative trade. While
acknowledging thataspeculative "flood ofimports" could ariseinunusual andcritical circumstances,
appellant denies thatsuchspeculative trade could orhadarisen inthepresent caseandcontends that,
inanyevent, theappropriate remedy forsuchspeculation istobefound inArticle 6.11oftheATC,
notinArticle 6.10.
Finally,CostaRicacontends,the"highlyexceptionalnature"ofanArticle6transitionalsafeguard
mechanismshouldbetakenintoaccountininterpretingthatArticleoftheATC.NootherWTOprovision
allows theimposition of"selective" (i.e.discriminatory, country-specific), Member-by-Member,
restrictive measures against fairtrade upontheground thatsuchtrade iscausing orthreatens tocause
serious damage totheimporting Member 'sdomestic industry. Accordingly, Costa Ricanotes, Article
6.1oftheATCdirects thatatransitional safeguard should beapplied "assparingly aspossible". In
theappellant 'sview, thePanel hadfailed toconsider theexceptional nature oftheATCtransitional
safeguard mechanism.
2. TheArguments ofAppellee United States
TheAppellee contends thatthePanel correctly found thattheUnited States would haveacted
consistently withArticle 6.10oftheATCinapplying atransitional safeguard measure against Costa
Rican underwear on21April 1995, thedateofpublication intheFederal Register oftherequest for
consultations. Abasiccontention oftheUnited States isthatnoprovisions oftheATCoroftheGeneral
Agreement prohibits thesetting asthe"initial date" ofatransitional safeguard measure (i.e.thedate
from which imports maybe"counted" against thequota imposed), ofthedateofthepublic notice
announcing therequest forconsultations. Thesecond principal argument oftheAppellee isthatthe
Panel correctly distinguished Chilean Apples bystressing thatthe21April 1995notice waspublished
before themeasure wasimposed on23June1995.WT/DS24/AB/R
Page9
(a) Concerning Article 6.10oftheATC
TheUnited States claims thatthetextofArticle 6.10oftheATCis"silent" ontheinitial date
ofatransitional safeguard measure andthat,accordingly, theordinary meaning ofArticle 6.10does
notprevent aMember fromsetting thedateofthepublic notice announcing therequest forconsultations
asthe"initial date" ofasafeguard measure. Initsview, theterm"apply" contained inArticle 6.10
refers tothedateonwhich goods counted under therestraint maybe"embargoed", anddoesnotbear
upon the"initial date" oftherestraint.
TheUnited States argues that,intheabsence ofguidance from thelanguage ofArticle 6.10
oftheATC,thePanel hadappropriate recourse totheprovisions ofArticles X:2oftheGeneral
Agreement .Thatrecourse issustained bytheprinciple ofeffectiveness intreaty interpretation, inview
ofthe"important factual finding" ofthePanel that"there would beaflood ofimports" afterpublication
oftherequest forconsultations ifatransitional safeguard measure could become effective onlyasof
itsdateofapplication. Intheview oftheAppellee, thePanel'sinterpretation renders Article 6.10
oftheATCan"‘effective ’component ofthetransitional safeguard mechanism ofArticle 6oftheATC",
inlinewiththerequirement ofArticle 6.1thattransitional safeguard measures should beapplied
"consistently ---withtheeffective implementation oftheintegration process" under theATC.The
United States further suggests thatArticle 6.11oftheATCpointed tobyCosta Ricaisan"extraordinary
remedy" notintended toaddress the"flood ofimports" thattypically follows publication oftherequest
forconsultations. TotheUnited States, theAppellant 'seffort todispute the"factual finding" ofthe
Panel fallsoutside theproper scope ofthisappeal, inview oftheprovisions ofArticle 17.6ofthe
DSU.
Clearly regarding them aspartofthecontext ofArticle 6.10, theUnited States refers to
Articles 6.2,6.3and6.4oftheATCtherequisites ofwhich mustbecomplied withbyanimporting
country making thedetermination ofserious damage onthebasisofwhich consultations withparticular
exporting countries arerequested under Article 6.7.TheUnited States contends that,considering the
"rigorous analysis" towhich suchadetermination issubjected, forpurposes ofWTO dispute settlement,
thatdetermination is"inthenature ofafinaldetermination". Therefore, theUnited States submits,
itis"appropriate" foraMember making sucha"final determination" tobeabletocount imports as
within arestraint from thedateofpublic announcement ofthatdetermination ofserious damage.
Upon theother hand, theAppellee dismisses Appellant 'ssuggestion thattheAnti-Dumping
Agreement andtheSCMAgreement formpartofthecontext ofArticle 6.10oftheATC,upontheground
thatthose twoAgreements aredifferent fromtheATC.TheAppellee alsorejects theinference whichWT/DS24/AB/R
Page10
theAppellant would draw from theabsence inArticle 6.10oftheATCoflanguage equivalent tothe
express permission forbackdating arestraint measure under Article 3.5(i) oftheMFA.TheUnited
States states thatthere wasnodebate onthispoint during thenegotiations oftheATC.
(b) Concerning Article XIII:3(b) oftheGeneral Agreement
TheUnited States, turning toCosta Rica'sarguments relating toArticle XIII:3(b), supports
thePanel'sdecision todistinguish Chilean Apples17onitsfacts. Italsotraverses Costa Rica'sclaim
thatArticle XIII:3(b) wasinfringed because theUnited States gavepublic notice merely oftheinitiation
ofaprocedure which could possibly leadtotheimposition ofarestraint measure, rather thanofthe
imposition oftherestraint measure itself. Theprincipal contention oftheAppellee hereisthatthe
wording ofArticle XIII:3(b) recognizes thepossibility thatthequota announced intheoriginal public
notice maychange, anddoesnotprohibit notice offuture quotas thatmaybesubject toacontingency,
suchasthecontingency thatconsultations maynotbesuccessful andtheproposed restraint mayin
factbeadopted.
3. TheArguments oftheThird Participant India
TheThirdParticipantendorsesalloftheargumentssubmittedbyCostaRica,providingadditional
statements onanumber ofparticular points. Forexample, India argues thataplainreading ofArticle
6.10oftheATCprecludes theimposition oftransitional safeguard measures either before orafterthe
30-day post-consultation period. According toIndia, theabsence ofaprovision permitting retroactive
transitional safeguard measures, ofthesortenvisaged byArticle 3:5(i) oftheMFA,isdeliberate. In
addition, theargument issubmitted thatArticle XIIIoftheGeneral Agreement andArticle 6.10of
theATCshould beinterpreted consistently witheachother, suchthatMembers should notbeallowed
toannounce thepossibility oftrade action exanteandactually apply anyresultant measure expost.
TheThird Participant alsorecalls therightofWTO Members toapply provisional safeguard measures
under Article 6.11oftheATC,noting thattheUnited States chose nottoinvoke thatprovision inthe
present case. Finally, India emphasizes theexceptional nature oftheATCtransitional safeguard
mechanism recognized inArticle 6.1oftheATCitself, noting thatArticle 6oftheATCallows Members
toimpose quantitative restrictions inamanner inconsistent withArticle XIoftheGeneral Agreement
andonaselective, "Member-by-Member" basis.
17Supra ,footnote 15.WT/DS24/AB/R
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III. TheIssues Raised inthisAppeal
Wemustnoteattheoutset thenarrowness ofthepresent appeal. Costa Ricaappeals fromonly
onefinding ofthePanel: thefinding allowing thebackdating ofthetransitional safeguard measure
hereinvolved tothedateofpublication intheFederal Register oftherequest forconsultations with,
interalia,Costa Rica. Atthesame time, Costa Ricaquestions certain legalinterpretations adopted
bythePanel inthecourse ofreaching thatfinding.
TheUnited States hasnotappealed from anyofthefindings ofthePanel, either byfiling an
Appellant 'ssubmission under Rule23(1) oftheWorking Procedures orbybringing aseparate appeal
under Rule23(4) ofthesameProcedures .Initssubmissions, written andoral,asAppellee, theUnited
States endorses thePanel'sfinding fromwhich Costa Ricaappeals, aswellasthelegalinterpretations
adopted bythePanel intheprocess ofmaking thatfinding. Thus, Costa RicaistheonlyAppellant
inAB-1996-3.
Onthebasis ofthewritten submissions andoralstatements made bytheparticipants andthe
thirdparticipant, thisappeal maybesaidtoraisethefollowing issues:
1. Whether ornotbackdating oftheeffectivity ofatransitional safeguard measure is
permitted byArticle 6.10oftheATC;
2. Whether ornotArticle XIII:3(b), General Agreement ,isapplicable toatransitional
safeguard measure taken under Article 6,ATC;and
3. Whether ornotArticle X:2,General Agreement ,isapplicable toatransitional safeguard
measure taken under Article 6,ATC.
IV. TheIssue ofBackdating theEffectivity ofaTransitional Safeguard Measure taken under
Article 6.10oftheATC
TheAgreement onTextiles andClothing ,oneoftheMultilateral Trade Agreements inAnnex 1A
oftheWTO Agreement ,setsoutprovisions tobeapplied byWTO Members during a10-year transition
period leading totheintegration ofthetextiles andclothing sector intotheregime oftheGeneral
Agreement .TheMembers haverecognized that,during thistransition period, itmaybecome necessary
"toapply aspecific transitional safeguard mechanism" totextile andclothing products notyetintegratedWT/DS24/AB/R
Page12
intotheGeneral Agreement .Atransitional safeguard mechanism isinessence ameasure establishing,
foracertain period oftime, aquantitative restraint ontheimportation ofspecified categories ofgoods
fromanidentified Member orMembers. Many legalandoperating aspects ofthismechanism aredefined
andregulated invarying degrees ofdetail byArticle 6oftheATC.
InitsReport, thePanel formulated theparticular issuewearehereaddressing inthefollowing
manner:
Costa Rica argues thattheUnited States retroactively applied the
restriction inviolation ofArticle 6.10oftheATC. Therestriction
wasintroduced on23June1995 foraperiod of12months starting
on27March 1995, which wasthedateoftherequest forconsultations
under Article 6.7oftheATC. Although Article 6.10oftheATC
allows theimporting country to"apply therestraint, ...within 30days
following the60-day period forconsultations", itissilent about the
initial datefrom which therestraint period should becalculated. In
contrast, Article 3.5(i) oftheMultifibre Arrangement (MFA) stated
thattherestraint could beinstituted "forthetwelve-month period
beginning onthedaywhen therequest wasreceived bytheparticipating
exporting country orcountries". Thus, thequestion before thePanel
iswhether thesilence oftheATC inthisregard should beinterpreted
asprohibition ofapractice which wasexplicitly recognized under the
MFA, andifso,whatshould betheappropriate datefromwhich the
restraint period istobecalculated under theATC.18(Emphases added)
Apparently taking itsassumed premise literally -i.e.thatArticle 6.10"issilent about theinitial
datefromwhich therestraint period should beconducted ..."anddescribing theissueas"atechnical
question regarding theopening dateofaquota period",19thePanel wentoutside thefourcorners of
theATC.Proceeding totheprovisions oftheGeneral Agreement ,thePanel thentookArticle X:2
thereof asitsapplicable andcontrolling text. ThePanel heldthattheUnited States 'safeguard restraint
measure was"ameasure ofgeneral application" within themeaning ofArticle X:2,20andconcluded;
...thattheprevalent practice under theMFA ofsetting theinitial date
ofarestraint period asthedateofrequest forconsultations cannot be
maintained under theATC. However, wenotethatiftheimporting
country publishes theproposed restraint period andrestraint levelafter
therequest forconsultations, itcanlatersettheinitial dateofthe
restraint period asthedateofthepublication oftheproposed restraint.
Inthepresent case, theUnited States violated itsobligations under
Article X:2ofGATT 1994 andconsequently under Article 6.10of
18Panel Report, para. 7.62.
19Id.,para. 7.63.
20Id.,para. 7.65.WT/DS24/AB/R
Page13
theATC bysetting therestraint period for12months starting on27
March 1995. However, haditsettherestraint period starting on21
April 1995, which wasthedateofthepublication oftheinformation
about therequest forconsultations, itwould nothave acted
inconsistently withGATT 1994ortheATC inrespect oftherestraint
period. TheUnited States argues thatitdidnot"enforce" therestraint
until23June1995. WenotetheUSargument. However, insofar
astherestraint wasapplied toexports fromCosta Ricawhich hadtaken
place prior tothepublication, itwasimplemented andtherefore
enforced within themeaning ofArticle X:2ofGATT 1994.21
(Emphases added)
While weagree withthePanel, aspointed outbelow,22thattheUnited States 'restraint measure
hereinvolved isappropriately regarded as"ameasure ofgeneral application" forpurposes ofArticle X:2
oftheGeneral Agreement ,weareunable toshare andaffirm theabove conclusion ofthePanel.
1. Interpreting Article 6.10oftheATC:Textual andContextual Considerations andthe
Principle ofEffectiveness
Wemust focus upon Article 6.10oftheATCwhich needs tobequoted infull:
Article 6
xxx
10. If,however, aftertheexpiry oftheperiod of60daysfrom
thedateonwhich therequest forconsultations wasreceived, there
hasbeen noagreement between theMembers, theMember which
proposed totakesafeguard action mayapply therestraint bydateof
import ordateofexport, inaccordance withtheprovisions ofthis
Article, within 30daysfollowing the60-day period forconsultations,
andatthesame timereferthematter totheTMB. Itshallbeopen
toeither Member torefer thematter totheTMB before theexpiry
oftheperiod of60days. Ineither case, theTMB shall promptly
conduct anexamination ofthematter, including thedetermination of
serious damage, oractual threat thereof, anditscauses, andmake
appropriate recommendations totheMembers concerned within
30days. Inorder toconduct suchexamination, theTMB shallhave
available toitthefactual dataprovided totheChairman oftheTMB,
referred toinparagraph 7,aswellasanyother relevant information
provided bytheMembers concerned.
xxx
21Id.,para. 7.69.
22Infra,p.23.WT/DS24/AB/R
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Thefirstthing which mustbenoted about Article 6.10oftheATCisthatitsterms make no
express reference tobackdating theeffectivity ofasafeguard restraint measure tosome dateprior to
thepromulgation orimposition ofsuch measure. Tothisextent, weagree withthePanel that
Article 6.10ATCissilent onthequestion ofbackdating asafeguard restraint measure. Wedonot,
however, believe thatArticle 6.10doesnotsubstantively address thatissue. Tothecontrary, webelieve
itdoesandthattheanswer tothisquestion istobefound within Article 6.10itself -itstextand
context -considered inthelightoftheobjective andpurpose ofArticle 6andtheATC.
Under theexpress terms ofArticle 6.10, theimporting Member which "propose[s] totake
safeguard action" may,"after theexpiry oftheperiod of60days" fromthedateofreceipt oftherequest
forconsultationswithoutagreementhavingbeenreached,"applytherestraint(measure)""within30days
following the60-day period forconsultations ...". Asweunderstand it,"apply" when usedashere
inrespect ofagovernmental measure -whether astatute oranadministrative regulation -means, in
ordinary acceptation, putting suchmeasure intooperation. Toapply ameasure istomake iteffective
withrespect tothings orevents oractsfalling within itsscope. Putinaslightly different way, a
government functionary whoevaluates andcharacterizes things, events oractsinterms ofthe
requirementssetoutinarestraintmeasure,is"applying"or"implementing"or"enforcing"thatmeasure.
Itisessential tonotethat,under theexpress terms ofArticle 6.10, ATC,therestraint measure
maybe"applied" only"after theexpiry oftheperiod of60days" forconsultations, without success,
andonlywithin the"window" of30daysimmediately following the60-day period.23Accordingly,
webelieve that,intheabsence ofanexpress authorization inArticle 6.10, ATC,tobackdate the
effectivity ofasafeguard restraint measure, apresumption arises from theverytextofArticle 6.10
thatsuchameasure maybeapplied onlyprospectively. Thispresumption appears tousentirely
appropriate inrespect ofmeasures which arelimitative ordeprivational incharacter ortenor andimpact
upon Member countries andtheirrights orprivileges andupon private persons andtheiracts.
Weturntothecontext ofArticle 6.10oftheATC.Thatcontext includes, ofcourse, thewhole
ofArticle 6.
23Under Article 6.5,ATC,themaximum period ofvalidity ofadetermination of"serious damage oractual threat thereof",
forpurposes ofapplication ofanATC-consistent restraint measure, is90daysafter thedateofinitial notification ofsuch
damage. After the90-day period, anewdetermination of"serious damage oractual threat thereof" willhave tobemade
ifnorestraint measure hadbeen imposed.WT/DS24/AB/R
Page15
Article 6.1,ATCoffers somereflected lightonthequestion ofbackdating arestraint. Article 6.1
reads, inpertinent part:
Membersrecognizethatduringthetransitionperioditmaybenecessary
toapply aspecific transitional safeguard mechanism (referred toin
thisAgreement as"transitional safeguard"). Thetransitional safeguard
maybeapplied byanyMember toproducts covered bytheAnnex,
except those integrated intoGATT 1994 under theprovisions of
Article 2....Thetransitional safeguard should beapplied assparingly
aspossible, consistently withtheprovisions ofthisArticle andthe
effective implementation oftheintegration process under this
Agreement. (Emphases added)
Article 6.1directs thattransitional safeguard measures beapplied "assparingly aspossible"
ontheonehand and,ontheother, applied "consistently withtheprovisions of[Article 6]andthe
effective implementation oftheintegration process under [theATC]".Itappears totheAppellate Body
thattoinject intoArticle 6.10anauthorization forbackdating theeffectivity ofarestraint measure
willencourage return tothepractice ofbackdating restraint measures which appears tohavebeen
widespread under theregime oftheMFA,aregime which hasnowended, asdiscussed below, with
theadvent oftheATC.Suchanintrojection would moreover loosen upthecarefully negotiated language
ofArticle 6.10, which reflects anequally carefully drawn balance ofrights andobligations ofMembers,
byallowing theimporting Member anenhanced ability torestrict theentry intoitsterritory ofgoods
intheexportation ofwhich nounfair tradepractice suchasdumping orfraud ordeception astoorigin,
isalleged orproven. Forretroactive application ofarestraint measure effectively enables theimporting
Member toexclude more goods byenforcing thequota measure earlier rather thanlater.
Itfurther appears tousthattoreadArticle 6.10assomehow authorizing thebackdating, as
amatter ofcourse, oftheeffectivity oroperation ofarestraint measure, willtendtodiminish theutility
andsignificance ofprior consultations withtheidentified exporting Member orMembers. Article
6.7oftheATCprovides forthose consultations inverysubstantial detail. Thus, Article 6.7requires
thattherequest forconsultations beaccompanied byspecific, relevant andup-to-date information on
thefactors which ledtheimporting Member tomake adetermination of"serious damage" (listed in
Article 6.3)andthefactors which ledtotheunilateral attribution ofsuchdamage toanidentified
exporting Member orMembers (referred toinArticle 6.4). Oneclearobjective ofrequiring a60-day
period forconsultations istogivesuchMember orMembers arealandfair,notmerely proforma ,
opportunity torebut ormoderate those factors. Therequirement ofconsultations isthusgrounded
on,among other things, dueprocess considerations; thatrequirement should beprotected fromerosion
orattenuation byatreaty interpreter. Itis,again, noteworthy thatArticle 6.7refers repeatedly totheWT/DS24/AB/R
Page16
Member "proposing totakesafeguard action", orwho"proposes toinvoke thesafeguard action" and
tothelevelatwhich imports ofthegoods specified "areproposed toberestrained". Thecommon,
day-to-day, implication which arises from thislanguage iscleartous:therestraint istobeapplied
inthefuture, after theconsultations, should these prove fruitless andtheproposed measure not
withdrawn. Theprinciple ofeffectiveness intreaty interpretation24sustains thisimplication.
Weturntoanother element ofthecontext ofArticle 6.10oftheATC:theprior existence and
demise, asitwere, oftheMFA.Article 3(5)(i) oftheMFA provided asfollows:
If,however, afteraperiod ofsixty daysfrom thedateonwhich the
request hasbeenreceived bytheparticipating exporting country or
countries, therehasbeennoagreement either ontherequest forexport
restraint oronanyalternative solution, therequesting participating
country may decline toaccept imports forretention from the
participating country orcountries referred toinparagraph 3above
ofthetextiles andtextile products causing market disruption (asdefined
inAnnex A)atalevelforthetwelve-month period beginning onthe
daywhen therequest wasreceived bytheparticipating exporting
country orcountries notlessthanthelevelprovided forinAnnex B.
Such levelmaybeadjusted upwards toavoid undue hardship tothe
commercial participants inthetrade involved totheextent possible
consistent withthepurposes ofthisArticle. Atthesametimethematter
shallbebrought forimmediate attention totheTextile Surveillance
Body. (Emphases added)
Itisrecognized byAppellant andAppellee andtheThird Participant, andthePanel aswell,
thatArticle 3(5)(i) oftheMFAexpressly permitted backdating oftheeffectivity ofarestraint measure
tothedateoftheimporting Member 'scallforconsultations.25Theabove underscored clause ofArticle
3(5)(i), MFA,however, disappeared withthesupersession oftheMFAbythenewATC;nocomparable
clause wascarried overintoArticle 6.10oftheATC.26ThePanel didnotdrawanyoperable inference
24SeeReport oftheAppellate Body, "United States -Standards forReformulated andConventional Gasoline ",AB-1996-1,
(adopted 20May1996) p.23;andReport oftheAppellate Body, "Japan -Taxes onAlcoholic Beverages ",AB-1996-2
(adopted 1November 1996), p.12.
25Simply asamatter ofcomparative texts, itmaybenoted thatlikeArticle 6.10oftheATC,Article XIXoftheGeneral
Agreement andtheAgreement onSafeguards donotcontain anylanguage expressly permitting backdating oftheeffectivity
ofasafeguard restraint measure taken thereunder withrespect tocategories ofgoods already integrated intotheGeneral
Agreement .Incontrast, itmayalsobenoted thatbothArticle 10(2) oftheAnti-dumping Agreement andArticle 20(2) of
theSCMAgreement expressly authorize, under certain conditions, theretroactive levying ofanti-dumping andcountervailing
duties fortheperiod when provisional measures were inforce.
26With thedemise oftheMFA,itsplace hasbeentaken withrespect toWTO Members, firstly, inrespect oftextile and
clothing items notyetintegrated intotheGeneral Agreement ,bytheATC.Secondly, inrespect ofitems already integrated
intotheGeneral Agreement ,theMFA safeguard measure isdisplaced byArticle XIXoftheGeneral Agreement andthe
Agreement onSafeguards .WT/DS24/AB/R
Page17
from thedisappearance oftheMFA clause.27Appellant Costa Rica urges thattheabsence
ofanequivalent clause inArticle 6.10oftheATCmeans thatbackdating ofarestraint measure may
nolonger beresorted tounder Article 6.10, ATC.Appellee United States, incontrast, insists that
suchbackdating isnevertheless available under theregime oftheATC.
Webelieve thedisappearance intheATCoftheearlier MFAexpress provision forbackdating
theoperative effect ofarestraint measure, strongly reinforces thepresumption thatsuchretroactive
application isnolonger permissable. Thisisthecommonplace inference thatisproperly drawn from
suchdisappearance. Wearenotentitled toassume thatthatdisappearance wasmerely accidental or
aninadvertent oversight onthepartofeither harassed negotiators orinattentive draftsmen. Thatno
official record mayexistofdiscussions orstatements ofdelegations onthisparticular pointis,ofcourse,
nobasisformaking suchanassumption. Attheoralhearing, theUnited States stated thatsince 1974,
forover20years,allimportingcountrieshad"counted"importsinthetextileareaagainstquotasimposed
byrestraints fromthedateoftherequest forconsultations. While thatmaywellhavebeenthepractice
ofmany importing countries, itwas,ofcourse, thepractice under theMFA.Twoconsiderations bear
uponthismatter. Firstly, assuming, arguendo only, thattheWTO Members hadwanted tokeepthat
practice, itisverydifficult tounderstand whythetreaty basis forsuchpractice wasnotmaintained
butwasinstead wiped out.Secondly, ithasnotbeensuggested thatsuchawidely followed practice
hasarisen under Article 6.10oftheATCnotwithstanding theabsence oftheMFA backdating clause.
Atanyrate,itismuch tooearly forpractice tohavearisen under theATCregime which commenced
onlyon1January 1995.
2. TheProblem ofaSpeculative "Flood ofImports" upon Notice ofaCall for
Consultations
TheUnited States claims thatthePanel made an"important factual finding" thatthere would
always or"typically" bea"flood ofimports" afteranannouncement ofacallforconsultations between
theimporting Member proposing toimpose asafeguard restraint measure andtheidentified exporting
Member orMembers. Itisemphasized thattheannouncement ofapossible restraint measure generates
apowerful incentive tomaximize exports before therestraint cangointoeffect. Thethrust ofthe
United States 'argument isthatauthority tobackdate arestraint measure isessential iftheimporting
Member iseffectively toprotect itself from suchspeculative surges ofimports. Article 6.10ofthe
27Wehave noted inpage 12thatthePanel "conclude[d] thattheprevalent practice under theMFA ofsetting theinitial
dateofarestraint period asthedateofrequest forconsultations cannot bemaintained under theATC".Immediately thereafter,
however, thePanel heldthatbackdating could beresorted to(in1995, under theATC)provided thatthedateofinitial effectivity
isnotearlier thanthedateofpublication ofthecallforconsultations. (Panel Report, para. 7.69) Thisruling appears at
odds withthePanel'sownimmediately preceding conclusion.WT/DS24/AB/R
Page18
ATC,intheUnitedStates'view,mustbeconsideredasimpliedlygrantingsuchauthorityifthatparagraph
istobean"effective component" ofthetransitional safeguard mechanism oftheATC.
Wehavebeenunable tolocate suchabroad-ranging "factual finding" inthePanel'sReport.
Atthesame time, wemust recognize thatintheworld ofinternational trade andcommerce
asweknow it,aspeculative "flood ofimports" could infactmaterialize, inaparticular case, upon
public announcement ofconsultations. Wecannot exclude apriori thepossibility ofsuchasituation
arising. Whether ornot,inaspecific given case,a"flood ofimports" would actually follow publication
ofacallforconsultations relating toaproposed restraint measure will,inourview, depend uponany
number ofvariable factors. Such factors would include, forinstance, theparticular kindoftextile or
clothing iteminvolved, the"high fashion", high-value oralternatively thefungible, low-value nature
ofthegoods subjected toaquota, theseasonality ofdemand forsuchitems, thelength ofproduction
time, thepresence orabsence ofabnormally highinventories ofsuchgoods intheexporting country,
andsoforth. Another kindoffactor which maybearupon thepossibility ofa"flood ofimports",
istheleveloftheminimum orfloorquota guaranteed totheexporting Member[s] byArticles 6.7and
6.8,ATC,andpublic awareness ofsuchguaranteed quota level within theimporting andexporting
countries.
Itappears tousthattheabove isbasically allthatthePanel sought toconvey initsbriefstatement
onthematter:
Finally, wenotetheUSargument thatifthesafeguard measure could
onlybeapplied starting atsome timelaterthanthedateoftherequest
forconsultations, there would beaflood ofimports inanticipation
oftheeventual restriction, which might defeat thewhole purpose of
thetransitional safeguard measure. Wefindthisargument tobe
persuasive from apractical point ofview. Inorder toavoid sucha
consequence, inourview, allthatisneeded onthepartoftheimporting
country istopublish thecontent oftherequest forconsultations
immediately.28(Emphases added)
Turning tothelegalcontention made bytheUnited States concerning thenecessity forauthority
tobackdate arestraint measure toprevent ordealwith"aflood ofimports", thatcontention maybe
seentoassume thatnootherrecourse isavailable totheimporting country should speculative "flooding"
ofimports poseaclear andimminent threat oractually come about inaparticular situation.
28Panel Report, para. 7.68.WT/DS24/AB/R
Page19
Wedonotbelieve itisnecessary tomake suchanassumption.
When andtotheextent thataspeculative "flood ofimports" turnsout,inaparticular situation,
tobearealandserious problem engaging thelegitimate interests oftheMember proposing asafeguard
measure, weconsider thatrecourse maybehadtoArticle 6.11oftheATC.Article 6.11authorizes
theimporting Member, "inhighly unusual andcritical circumstances, where delay would cause damage
which would bedifficult torepair", toimpose andapply immediately, albeit provisionally, therestraint
measure authorized under Article 6.10. Therequest forconsultations andthenotification totheTextile
Monitoring Board must, however, beissued within fiveworking daysafterthetaking ofprovisional
action. Inother words, therequirements ofArticle 6.10mustnevertheless beobserved. Action under
Article 6.11oftheATCisnotinlieuof,anddoes notsupersede, action taken orbegun under
Article 6.10, ATC.Provisional action under Article 6.11isfolded intoaction under Article 6.10.
Considering thatArticle 6.11permits theprovisional imposition ofarestraint measure evenbefore
consultations, afortiori itwould permit suchimposition afterconsultations haveinfactbegun, solong
astherequisites ofbothArticles 6.10and6.11aremetorcontinue tobemet.
Thestandards established inArticle 6.11-"highly unusual andcritical circumstances, where
delay would cause damage which would bedifficult torepair" -areobviously notsusceptible ofspecific
quantitative description. Theappreciation ofwhen suchcircumstances mayreasonably beregarded
ashaving arisen, canonlybedoneinconcrete cases andonacase-to-case basis. Such appreciation
would havetotakeintoaccount thatthestandards andrequisites ofArticles 6.10and6.11aretobe
readtogether against thebackground consideration thattheATCconstitutes atemporary andtransitional
regime withcomplete integration ofthetextile andclothing sector intotheGeneral Agreement asthe
finalgoal.29
Theconclusion wehavearrived at,inrespect oftheissue ofpermissibility ofbackdating, is
thatthegiving ofretroactive effect toasafeguard restraint measure isnolonger permissible under
theregime ofArticle 6oftheATCandisinfactprohibited under Article 6.10ofthatAgreement .The
presumption ofprospective effect only, hasnotbeen overturned; itisaproposition notsimply
presumptively correct butonerequiring ourassent. Webelieve, accordingly, andsohold, thatthe
Panel erred inruling thatArticle 6.10oftheATChadnothing tosayontheissue ofbackdating and
thatsuchbackdating to21April 1995, thedateofpublication ofthecallforconsultations, was
29Thestandard found inArticle 6.11, ATC,maybecompared textually withthecounterpart language inArticle XIX:2,
General Agreement ,andArticle 6oftheAgreement onSafeguards :"incritical circumstances, where delay would cause
damage which itwould bedifficult torepair ...". Thislanguage presently applies toallgoods already integrated intothe
General Agreement andwillapply, attheendofthetransitional period, togoods currently notyetsointegrated.WT/DS24/AB/R
Page20
permissible under Article X:2oftheGeneral Agreement .Theimporting Member is,however, not
defenceless against aspeculative "flood ofimports" where itisconfronted withthecircumstances
contemplated inArticle 6.11. Itsappropriate recourse is,inother words, toaction under Article 6.11
oftheATC,complying intheprocess withtherequirements ofArticle 6.10andArticle 6.11.
V. TheIssue ofApplicability ofArticle XIII:3(b), General Agreement ,toaTransitional
Safeguard Measure taken under Article 6.10, ATC
Inthewritten andoralsubmissions before theAppellate Body, theissue ofapplicability of
Article XIII:3(b) oftheGeneral Agreement totherestraint measure hereatstake, wasmuch discussed
byAppellant Costa Rica. TheAppellee United States alsodealt withthisissue, though withless
enthusiasm.
Considering theconclusion wehaveabove reached inrespect ofthefirstissue, there isno
necessity fordealing withthissecond issueatanylength. Hadweconcluded thatunder Article 6.10,
ATC,backdatingtheeffectivityofarestraintmeasureremainedpermissible,itwouldhavebeennecessary
todetermine whether adifferent result would becompelled byArticle XIII(3)(b) oftheGeneral
Agreement and,inparticular, themeaning andapplicability ofthewords "theContracting Party applying
therestrictions shallgivepublic notice ofthetotalquantity orvalue oftheproduct orproducts which
willbepermitted tobeimported during aspecified future period ...". Inanycase, there isnothing
inthisprovision which runscounter toourconclusion thatbackdating isprohibited under Article 6.10
oftheATC.
VI. TheIssue ofApplicability ofArticle X:2oftheGeneral Agreement ,toaTransitional
Safeguard Measure taken under Article 6.10, ATC
Article X,General Agreement ,provides inpart:
Article X
Publication andAdministration ofTrade Regulations
xxx
2. Nomeasure ofgeneral application taken byanycontracting
party effecting anadvance inarateofdutyorother charge onimports
under anestablished anduniform practice, orimposing anewormoreWT/DS24/AB/R
Page21
burdensome requirement, restriction orprohibition onimports, oron
thetransferofpaymentstherefor,shallbeenforcedbeforesuchmeasure
hasbeenofficially published. (Emphases added)
xxx
ThePanel found thatthesafeguard restraint measure imposed bytheUnited States is"ameasure
ofgeneral application" within thecontemplation ofArticle X:2. Weagree withthisfinding. While
therestraint measure wasaddressed toparticular, i.e.named, exporting Members, including Appellant
Costa Rica, ascontemplated byArticle 6.4,ATC,wenotethatthemeasure didnottrytobecome specific
astotheindividual persons orentities engaged inexporting thespecified textile orclothing items to
theimporting Member andhence affected bytheproposed restraint.
Article X:2, General Agreement ,may beseen toembody aprinciple offundamental
importance -thatofpromoting fulldisclosure ofgovernmental actsaffecting Members andprivate
persons andenterprises, whether ofdomestic orforeign nationality. Therelevant policy principle is
widely known astheprinciple oftransparency andhasobviously dueprocess dimensions. Theessential
implication isthatMembers andother persons affected, orlikely tobeaffected, bygovernmental
measures imposing restraints, requirements andother burdens, should haveareasonable opportunity
toacquireauthenticinformationaboutsuchmeasuresandaccordinglytoprotectandadjusttheiractivities
oralternatively toseekmodification ofsuchmeasures. Webelieve thatthePanel heregavetoArticle
X:2,General Agreement ,aninterpretation thatisappropriately protective ofthebasic principle there
projected.
Atthesame time, wearebound toobserve thatArticle X:2oftheGeneral Agreement ,does
notspeak to,andhence doesnotresolve, theissue ofpermissibility ofgiving retroactive effect toa
safeguard restraint measure. Thepresumption ofprospective effect onlydoes, ofcourse, relate to
thebasic principles oftransparency anddueprocess, being grounded on,among other things, these
principles. Butprior publication isrequired forallmeasures falling within thescope ofArticle X:2,
notjustATCsafeguard restraint measures sought tobeapplied retrospectively. Prior publication may
beanautonomous condition forgiving effect atalltoarestraint measure. Where noauthority exists
togiveretroactive effect toarestrictive governmental measure, thatdeficiency isnotcured bypublishing
themeasure sometime before itsactual application. Thenecessary authorization isnotsupplied by
Article X:2oftheGeneral Agreement .
Ourfinding, therefore, thatthesafeguard restraint measure hereinvolved isproperly regarded
as"ameasure ofgeneral application" under Article X:2doesnotconflict with, anddoesnotaffectWT/DS24/AB/R
Page22
ourconclusion under thefirstissue above thatbackdating theeffectivity ofarestraint measure is
prohibited byArticle 6.10oftheATC.
VII. Findings andConclusions
Forthereasons setoutinthepreceding sections ofthisReport, theAppellate Body hasreached
thefollowing conclusion:
thePanel erred inlawinconcluding thatunder Article 6.10ATC"iftheimporting country
publishes theproposed restraint period andrestraint levelaftertherequest forconsultations,
itcanlatersettheinitial dateoftherestraint period asthedateofthepublication oftheproposed
restraint", andthat"haditsettherestraint period starting on21April 1995, which wasthe
dateofthepublication oftheinformation about therequest forconsultations, itwould nothave
acted inconsistently withGATT 1994 ortheATC inrespect oftherestraint period".
TheforegoinglegalconclusionmodifiestheconclusionsofthePanelassetoutinparagraph7.69
ofitsReport. TheAppellate Body'sconclusion leaves intact theconclusions ofthePanel thatwere
notthesubject ofappeal.
TheAppellate Body recommends thattheDispute Settlement Body request theUnited States
tobring itsmeasure restricting Costa Rican exports ofcotton andman-made fibreunderwear, category
352/652, 60Federal Register 32653, intoconformity withitsobligations under theATC.WT/DS24/AB/R
Page23
Signed intheoriginal atGeneva this5thdayofFebruary 1997 by:
_______________________
Claus-Dieter Ehlermann
Presiding Member
_______________________ _______________________
Florentino Feliciano Mitsuo Matsushita
Member Member