WORLD TRADE WT/DS33/3
24February 1997
ORGANIZATION(97-0846)
UNITED STATES -MEASURE AFFECTING IMPORTS OF
WOVEN WOOL SHIRTS AND BLOUSES FROM INDIA
Notification ofanAppeal byIndia under
paragraph 4ofArticle 16oftheUnderstanding onRules
andProcedures Governing theSettlement ofDisputes (DSU)
Thefollowing notification, dated 24February 1997, sentbyIndia totheDispute Settlement
Body (DSB), iscirculated toMembers. Thenotification alsoconstitutes theNotice ofAppeal, filed
onthesame daywiththeAppellate Body, pursuant totheWorking Procedures forAppellate Review .
_________________________
1. Pursuant toArticle 16oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes (DSU) andRule20oftheWorking Procedures forAppellate Review, Indiahereby notifies
itsdecision toappeal totheAppellate Body certain findings ofthePanel on"United States -Measures
Affecting Imports ofWoven Wool Shirts andBlouses fromIndia"(WT/DS33/R).
2. India'sappeal islimited tothefollowing issues oflawcovered inthePanel report andlegal
interpretations developed bythePanel:
a) Thethirdsentence ofparagraph 7.12ofthereport ofthePanel reads asfollows:
"Since India istheparty thatinitiated thedispute settlement proceedings, we
consider thatitisforIndiatoputforward factual andlegalarguments inorder
toestablish thattheUSrestriction wasinconsistent withArticle 2oftheATC
andthattheUSdetermination forasafeguard action wasinconsistent withthe
provisions ofArticle 6oftheATC" (emphasis supplied).
Intheview ofIndia, thisfinding islegally incorrect. Thetransitional safeguard
provisions ofArticle 6oftheATC areanexception from thegeneral principles on
trade intextiles andclothing thataresetoutinArticle 2:4oftheATC. Astherecent
report ofthePanel onUnited States -Restrictions onImports ofCotton andMan-made
Fibre Underwear fromCosta Ricacorrectly pointed out,"[it]isageneral principle
oflaw,well-established bypanels inpriorGATT practice, thattheparty which invokes
anexception inorder tojustify itsaction carries theburden ofproof thatithasfulfilled
theconditions forinvoking theexception" (WT/DS/24/R, paragraph 7.16). ThePanel
therefore erred inlawwhen itruled thatitwasforIndia toestablish before thePanel
thattheUSdetermination forasafeguard action wasinconsistent withtheprovisions
ofArticle 6oftheATC.
b) Inparagraphs 7.18to7.20ofitsreport, thePanel interprets theprocedures ofthe
Textiles Monitoring Body (TMB) andtheprocedures setoutintheDSUasestablishing
atwo-track process. Onthebasisofthisinterpretation, thePanel reaches inparagraphWT/DS33/3
Page2
7.21theconclusion thattheTMB, when examining asafeguard measure inaccordance
withArticle 6:10oftheATC,
"need notlimit[itself] totheevidence usedbytheimporting Member inmaking
itsdetermination toimpose themeasure" andmay"consider developments
subsequent totheinitial determination."
ThePanel'sinterpretation implies thattheTMB ispermitted torefrain fromexamining
thematter referred toitinaccordance withArticle 6:10(namely whether thesafeguard
action actually applied isconsistent withtheATC) byexamining acompletely different
matter (namely whether asafeguard measure would beappropriate taking intoaccount
theinformation available atthetimeoftheTMB examination). Article 8:10ofthe
ATC requires Members tosubmit asafeguard action tothereview oftheTMB before
challenging itunder theprocedures oftheDSU. Thisrequirement implies thatthe
matter tobeexamined bytheTMB under theATC andthepanel under theDSUmust
bethesame. IntheviewofIndia, thePanel therefore erred inlawwhen itfailed to
recognize thattheATCandtheDSUestablish atwo-stage process under which asingle
matter isfirstexamined bytheTMB andthen, iftheexporting Member sorequests,
byapanel.
c) India hadsubmitted tothePanel'sexamination essentially fourmatters, namely
- whethertheUnitedStatesdeterminationofseriousdamagemettherequirements
ofArticle 6:2and3oftheATC;
- whether theUnited States safeguard action could beimposed consistently with
Article 6oftheATC notwithstanding thefactthattheTMB hadnotendorsed
theUnited States determination ofserious damage;
- whether theUnited States 'failure tospecify initsrequest forconsultations
whether itrelated toserious damage ortheactual threat ofserious damage
wasconsistent withArticle 6:7oftheATC; and
- whether theUnited States retroactive application ofitssafeguard action was
consistent withArticles 2and6oftheATC.
ThePanel presented findings onlyonthefirsttwooftheabove matters. Attheinterim
review stage, Indiastated thattheabove fourmatters werefactually andlegally distinct
andthatArticle 11oftheDSUtherefore entitled India tofindings onallofthem. The
Panel reacted inparagraph 6.6ofitsreport asfollows:
"Concerning India'sargument thatArticle 11oftheDSU entitles India toa
finding oneachoftheissues itraised, wedisagree andrefertotheconsistent
GATT panel practice ofjudicial economy. Indiaisentitled tohavethedispute
overthecontested "measure" resolved bythePanel, andifwejudge thatthe
specific matter indispute canberesolved byaddressing onlysome ofthe
arguments raised bythecomplaining party, wecandoso.We,therefore,
decide toaddress onlythelegalissues wethink areneeded inorder tomake
suchfindings aswillassist theDSBinmaking recommendations oringiving
rulings onrespect ofthisdispute."WT/DS33/3
Page3
Thisfinding ofthePanel isinconsistent withtheDSU aswellasthepractice under
theGATT 1947 andtheTokyo Round agreements onsubsidies andanti-dumping.
AstheAppellate Body pointed outinitsmostrecent report, "the‘matter ’referred to
apanel forconsideration consists ofthespecific claims stated bytheparties tothe
disputeintherelevantdocumentsspecifiedinthetermsofreference."(WT/DS22/AB/R,
page 23). Bydefining itstasksolely interms ofthemeasure tobebrought into
conformity withtheATC, thePanel curtailed India'srighttoanobjective assessment
ofalllegalclaims setoutinthePanel'sterms-of-reference. India would liketoclarify
thatitsappeal islimited tothePanel'sfindings onIndia'sprocedural rights under the
DSU. India decided nottorequest theAppellate Body toruleonthematters on
which thepanel failed topresent findings because theinterpretative issues towhich
these matters giverisehavealready beenclarified inthereport ofthepanel onUnited
States -Restrictions onImports ofCotton andMan-made Fibre Underwear fromCosta
RicaandtheAppellate Body'sreview ofthisreport (WT/DS24/AB/R).