WT/DS399/R 
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ANNEX D 
 
 
ORAL STATEMENTS OF  THIRD PARTIES OR 
EXECUTIVE SUMMARIES THEREOF 
 
 
Contents Page 
Annex D-1 Oral Statement of the European Union D-2 
Annex D-2 Oral Statement of Japan D-3 
 
 WT/DS399/R 
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ANNEX D-1 
  
ORAL STATEMENT OF THE EUROPEAN UNION 
 
 
 Mr Chairman, members of the Panel,  1. The European Union would like to thank the Pa nel for this opportunity to submit orally its 
views in this dispute.   
 2. As already stated in its written observations , the European Union does not wish to take a 
position on the consistency of the measure in  dispute with the requirements of the Transitional 
Product-specific Safeguard Mechanism  (the "TPSSM") laid down in Article 16 of the Protocol of 
Accession of the People's Republic of China .   
 3. The European Union has interv ened in this dispute because of  its interest in the correct 
interpretation of the TPSSM.  More specifically, the European Union is concerned to ensure that the 
specific nature of the TPSSM is duly recogni sed and that no confusion arises between the 
requirements of that mechanism and those of the extraordinary remedy against injurious imports 
provided in Article XIX of the General Agreement on Tariffs and Trade 1994  (the "GATT") and the 
Agreement on Safeguards (the "AS").   
 4. Contrary to the suggestions made by the co mplaining party, the TPSSM is not an elaboration 
of the remedy provided in GATT Article XIX and the AS.  The TPSSM lays down a separate and 
distinct remedy, with its own specific purpose, to be  invoked in different circumstances and subject to 
different conditions.    5. Nor is it correct that the TPSSM seeks to impose "more stringent" requirements than GATT 
Article XIX and the AS.  First
, the TPSSM does not provide that the increase of imports must be the 
result of "unforeseen developments".  Second , the TPSSM lays down a lower standard of injury, by 
requiring that increased imports be such as to cause "m aterial injury", rather than "serious injury".  
Third , while the requirement of "increased imports" is worded in similar terms, it must be construed 
differently, having regard to the diffe rent context in which those terms appear and, in particular, to the 
two crucial differences which I have just mentioned.   
 
6. These differences, as well as the other text ual differences discussed in the EU written 
observations, show that the drafters of the TPSSM did not seek to make the adoption of measures 
under that instrument more difficult, but rather the opposite.    7. Given the specific nature of the TPSSM, and the different requirements stipulated in that 
mechanism, the Panel should reject any attempt to extrapolate to the TPSSM the case law of the 
Appellate Body on GATT Article XIX and the AS.  Fo r the same reasons, the Panel should be careful 
to ensure that, whatever interpretation of the TPSSM is reached in the framework of the present 
dispute, it remains circumscribed to that inst rument and does not prejudge in any manner the 
interpretation of GATT Article XIX and the AS.    
8. Thank you for your time and attention.   WT/DS399/R 
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 ANNEX D-2 
 
 
ORAL STATEMENT OF JAPAN  
 
 
 
INTRODUCTION 
 
1. Mr. Chairman, and distinguished Members of the Panel, on behalf of the Government of 
Japan, I thank you for this opportunity to present Japan's views on this dispute.  In this oral statement, 
Japan would like to address three important systemic issues in this dispute.  The first is Reasoned and 
Adequate Explanation of Importing Members.  The second is Implication of the Agreement on 
Safeguards and Article XIX of the GATT to the Protocol .  The third is Paragraph 16.3 and 16.6 of the 
Protocol.   
 
DISCUSSION 
 Reasoned and Adequate Explanation of the Importing Member 
 
2. To consider claims, a WTO panel is requi red to make "an objective assessment" under 
Article 11 of the Understanding on Rules and Procedures Governing the Settlement of Dispute , DSU .  
Where the importing Member's examination of f acts is in dispute, the Appellate Body in US – Lamb 
clarified this obligation in the context of the Agreement on Safeguards :  "By examining whether the 
explanation given by the competent authorities in  their published report is  reasoned and adequate, 
panels can determine whether those authorities have acted consistently with the obligations imposed 
by Article 4.2 of the Agreement on Safeguards ".
 1 
 3. The rationale under the Agreement on Safeguards  would provide a good framework for this 
Panel to consider its standard of review a nd the importing Member's obligations derived from 
Article 11 of the DSU  and specific obligations under Section 16 of the Protocol .  Paragraph 16.1 sets 
forth that the importing Member may impose a transitional safeguard measure when the Member 
found that Chinese products are imported in such stat e that causes market disruption.  Paragraph 16.4 
requires the Member to determine that these imports are a significant cause of the material injury to 
find the existence of the market disruption.  Para graphs 16.3 and 16.6 set the permissible maximum 
extent and duration of the transitional safeguard meas ure.  In addition to these substantive obligations, 
Paragraph 16.5 sets forth the importing Member's pro cedural obligation to provide an explanation of 
the basis for the decision and the scope and dur ation of the measure in the written notice under 
paragraph 16.5, as elaborated in Paragraph 246(e) of the Working Party Report .   
 4. These substantive and procedural requirements under Section 16 of the Protocol  appear to be 
analogous to the conditions to apply to a safeguard measure under the Agreement on Safeguards , as 
discussed in more detail in Japan's submission.  Article 11 of the DSU  would require this Panel to 
examine whether the importing Member satisfied th e substantive obligations under Section 16 of the 
Protocol  upon reviewing whether the explanation in the written notice was reasoned and adequate.   
                                                     
 
1 Appellate Body Report, United States – Safeguard Measures on Im ports of Fresh, Chilled or Frozen 
Lamb Meat from New Zealand and Australia , WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, 
DSR 2001:IX, 4051, para. 105.   WT/DS399/R 
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 Implication of the Agreement on Safeguards and Article XIX of the  GATT  to the Protocol 
 
5. Findings by the Appellate Body in the context of Article XIX of the GATT and the Agreement 
on Safeguards  also would provide a useful guidance to c onsider the substantive obligations of the 
importing Member under Section 16 of the Protocol  because the texts of these Agreements are 
similar.  However, they are not iden tical.  Further, the provisions of the Protocol  are not subordinated 
to these Agreements, as provided in Paragraph 1.2 of the Protocol .  In addition, Section 16 of the 
Protocol does not make any reference to these Agreements  with respect to substantive obligations.  
These aspects indicate that the s ubstantive rules to impose a tran sitional safeguard measure under 
Section 16 are separate and independent fro m the provisions of Article XIX of the GATT and the 
Agreement on Safeguards .  In this light, in referring to the ra tionale as clarified by the Appellate Body 
on substantive and procedural oblig ations under the provisions of th ese Agreements, this Panel should 
be careful so as not to incorporate rights and obligations under these WTO Agreements that do not exist in Section 16 of the Protocol  into the  Protocol , and at the same time not to diminish rights and 
obligations provided in the Protocol .   
 
Paragraphs 16.3 and 16.6 of the Protocol 
 
6. Paragraphs 16.3 and 16.6 of the Protocol  set forth that a transitional safeguard measure must 
be limited to the extent and the duration necessary to  prevent or remedy such market disruption.  The 
market disruption is defined in paragraph 16.4 as ex isting only when there are:  (i) imports of Chinese 
products, which are increasing rapidly;  (ii) material injury to the domestic industry;  and (iii) a causal 
link between these imports and the injury.  Accordi ngly, the measure must address these factors, and 
it may not be taken beyond the extent  and duration to make such factor s cease to exist or be prevented 
from recurrence.     
7. The importing Member's obligation to limit the period of time to impose a transitional 
safeguard measure under the first se ntence of paragraph 16.6 of the Protocol would not be diminished 
or otherwise modified by its subsequent sentenc es.  The second and third sentences address the right 
of China when the measure has been  imposed for more than two or three years.  These provisions do 
not refer to the importing Member's right or oblig ation in its imposition of a transitional safeguard 
measure even after the two or three year period.  The Member may continue imposing the measure 
even after the two or three year period so long as the measure is necessary to  prevent or remedy the 
market disruption.  The second and third sentences do not release the importing Member from observing its obligation not to impose the safeguard  measure when the measure is no longer necessary 
to prevent or remedy the market disruption, even though the measure has not yet imposed for 
two years.  
 
CONCLUSION 
 
8. Japan respectfully requests the Panel to examin e carefully the facts presented by the parties to 
this dispute in light of Japan's arguments as discusse d in its submission and above to ensure the fair 
and objective application of the provisions of the Protocol 
and would be pleased to respond to any 
questions that the Panel may have.