Document: WT/DS162/R Page 8 V. INTERIM REVIEW421 A. INTRODUCTION 5.1 The interim report of the Panel was issued to the parties on 28 February 2000, in application of Article 15.2 of the DSU.  On 6 March 2000, Japan and the United States submitted written requests to the Panel to review some aspects of the interim report.  Neither Japan nor the United States requested that the Panel hold a further meeting with the parties. 5.2 As a preliminary remark, the Panel notes that the parties did not comment on the factual assessments made in its interim report, with the exception of the factual error in footnote 552 to paragraph 6.192, which related to when in the proceedings the United States raised a particular argument. 422 B. COMMENTS BY JAPAN 5.3 Japan requested that we review paragraphs 6.52, 6.76, 6.103 and 6.170 of the interim report.
Date: 28 February 2000
Document codes: WT/DS162/R
Complainant: Japan
Respondent: U.S.
Third parties: EU, India
Dispute stage: Appellate Body
Agreements cited: Art. III:4, VI, XI  GATT 1994Art. 1, 2, 3, 4, 5, 9, 11, 18.1, 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade Organization

V. INTERIM REVIEW421
A. INTRODUCTION
5.1 The interim report of the Panel was issued to the parties on 28 February 2000, in application
of Article 15.2 of the DSU. On 6 March 2000, Japan and the United States submitted written requests
to the Panel to review some aspects of the interim report. Neither Japan nor the United States
requested that the Panel hold a further meeting with the parties.
5.2 As a preliminary remark, the Panel notes that the parties did not comment on the factual
assessments made in its interim report, with the exception of the factual error in footnote 552 to
paragraph 6.192, which related to when in the proceedings the United States raised a particular
argument.
422
B. COMMENTS BY JAPAN
5.3 Japan requested that we review paragraphs 6.52, 6.76, 6.103 and 6.170 of the interim report.
5.4 Regarding paragraph 6.52, Japan is critical of the last sentence of the paragraph. While we
agree with Japan that the starting-point of our anal ysis was the text of the 1916 Act, we acknowledge
that court interpretations could substantially elaborate on such a concise text as that of the 1916 Act,
as was apparently the case with the Sherman Act, for instance. We therefore used the term "US law"
as meaning US law in general, not the 1916 Act. We also used the term "select" in order to confirm
that we would not interpret US law in general or judgements of US courts in particular. We would
only compare the court decisions with what we perceived to be the current status of US law in that
field. We therefore did not find it appropriate to modify the last sentence of paragraph 6.52.
5.5 We clarified paragraph 6.76 to address Japan's concern. However, we did not consider it
necessary to modify paragraph 6.103 along the line suggested by Japan, since the issue addressed in
that paragraph was the interpretation of the 1916 Act by courts, currently or in the future.
5.6 Regarding paragraph 6.170, the Panel did not take position on the issue to which Japan refers.
It simply noted that an isolated domestic market has often been considered as one of the reasons why
dumping is possible in the first place. Second, the fact that the issue is very controversial among
WTO Members is not as such a reason for removing that statement from a panel report. However, the
Panel considered that the statement at issue was not essential for its reasoning. It consequently
redrafted the sentence concerned to focus more precisely on its actual purpose.

421 According to Article 15.3 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (hereinafter "DSU"), "the findings of the final report shall include a discussion of the arguments
made at the interim review stage". The following section entitled "Interim Review" is therefore part of the
findings of our report.
422 The Panel is of the view that if it had misunderstood or misrepresented some factual aspects of the
case in its findings, the parties would need the opportunity of the interim review stage to make the appropriate
corrections or clarifications because, contrary to errors of law, errors of fact normally cannot be corrected on
appeal. Parties should seize this last opportunity to co rrect factual assessments by the Panel because, otherwise,
the Panel could needlessly be exposed to the risk of being accused of not having made an objective assessment
of the facts. It could be argued that for a party not to inform the Panel of a factual error in its findings may be
contrary to the obligation laid down in Article 3.10 of the DSU, which provides inter alia that "all Members will
engage in these [DSU] procedures in good faith in an effort to resolve the dispute".

C. COMMENTS BY THE UNITED STATES
5.7 The United States commented on the content of paragraph 6.36, footnote 552 to
paragraph 6.192, and footnote 599 to paragraph 6.292 of the interim report.
5.8 Regarding paragraph 6.39, we do not read the statement at issue ("both Article 3.2 of the DSU
and the practice of the Appellate Body make it clear that we have, whenever appropriate, to develop
our approach on the basis of that of international courts in similar circumstances") in the interim
report as stating that panels have an obligation under the DSU to take other international court's
practice into consideration. First, we note that the verb "have to" is qualified by the terms "whenever
appropriate" and "on the basis of". Second, we recall that the Appellate Body in its report on
European Communities – Regime for the Importation, Sale and Distribution of Bananas considered
whether certain judgements of the International Court of Justice "establish[ed] a general rule that in
all international litigation, a complaining party must have a legal interest in order to bring a case." The
Appellate Body determined that the judgements refe rred to by the parties did not deny the need to
consider the question of standing under the dispute settlement provisions of any multilateral treaty, by
referring to the terms of that treaty.
423 We assume from that report that if the judgements of the
International Court of Justice had established a general rule on demonstration of legal interest, and the
terms of the WTO Agreement did not prevent its application to dispute settlement, the Appellate Body
would have applied that principle. However, in order to avoid misunderstanding, we clarified the
phrase at issue.
5.9 We also modified the factual error relating to the stage at which the United States raised a
particular argument in these proceedings.
5.10 Regarding footnote 599 to paragraph 6.292, we agree with the United States that no specific
claim was raised by Japan in relation to the settlements reached between parties in the Wheeling-
Pittsburgh case. The footnote was intended to complement the phrase according to which the
1916 Act "has never led to the imposition of any remedies by courts." The Panel meant to show that it
had considered carefully all the potential aspects of the factual situation, including the situation where
the court concerned would have formally sanctioned the settlements reached by Wheeling-Pittsburgh
Steel Corporation, with the consequence that such settlements might be enforced if necessary by the
US authorities, such as courts or the customs or competition authorities. In this respect, the Panel
recalls that the responsibility of the Members under international law applies irrespective of the
"branch of government" at the origin of the action having international repercussions. Footnote 599
was only intended to clarify that "remedies" in the form of a settlement sanctioned by a court had not
been the subject of a claim of Japan. We therefore modified footnote 599 in the final report in order to
make our purpose clearer.
VI. FINDINGS
A. I
SSUES TO BE ADDRESSED BY THE PANEL
1. Facts at the origin of the dispute
6.1 The law, the WTO-consistency of which is contested by Japan, is a United States legislative
text enacted under the heading of "Unfair Competition" in Title VIII of the Revenue Act of 1916.424 It
has been known since as the "Antidumping Act of 1916." 425 The 1916 Act, which provides for civil

423 Adopted on 25 September 1997, WT/DS27/AB/R, para. 133.
424 Act of 8 September 1916. The Revenue Act can be found at 39 Stat. 756 (1916). Title VIII of the
Revenue Act is codified at 15 U.S.C. §§ 71-74.
425 A number of official documents of the United States government and a number of US court
decisions refer to Title VIII of the Revenue Act of 1916 as the "Antidumping Act of 1916". Authors have also

and criminal penalties by US federal courts for a certain form of transnational price discrimination 426
when conducted with specific intent,427 reads as follows:
"It shall be unlawful for any person impor ting or assisting in importing any articles
from any foreign country into the United States, commonly and systematically to
import, sell or cause to be imported or sold such articles within the United States at a
price substantially less than the actual market value or wholesale price of such
articles, at the time of exportation to the United States, in the principal markets of the
country of their production, or of other foreign countries to which they are commonly
exported after adding to such market value or wholesale price, freight, duty, and other
charges and expenses necessarily incident to the importation and sale thereof in the
United States: Provided, That such act or acts be done with the intent of destroying or
injuring an industry in the United States, or of preventing the establishment of an
industry in the United States, or of restraining or monopolizing any part of trade and
commerce in such articles in the United States.
Any person who violates or combines or conspires with any other person to violate
this section is guilty of a misdemeanour, and, on conviction thereof, shall be punished
by a fine not exceeding $5,000, or imprisonme nt not exceeding one year, or both, in
the discretion of the court.
Any person injured in his business or property by reason of any violation of, or
combination or conspiracy to violate, this section, may sue therefor in the district
court of the United States for the district in which the defendant resides or is found or
has an agent, without respect to the amount in controversy, and shall recover
threefold the damages sustained, and the cost of the suit, including a reasonable
attorney’s fee.
The foregoing provisions shall not be construed to deprive the proper State courts of
jurisdiction in actions for damages thereunder."

called it the"1916 Antidumping Act" or qualified it as an act dealing with certain forms of dumping, irrespective
of whether they considered it to be an "anti-dumping" law or an "anti-trust" law. See, e.g., A. Paul Victor: The
Interface of Trade/Competition Law and Policy: An Overview , 56 Antitrust Law Journal 397, at p. 401; John H.
Jackson, World Trade and the Law of GATT (1968), at p. 403, footnote 4. However, we note that the word
“anti-dumping” does not appear as such in the text of the law. Since the question whether this law is an
anti-dumping law within the meaning of Article VI of GATT 1994 is one of the issues that this Panel has to
address, we find it more appropriate to refer to it in our discussion as the "1916 Act".
426 Even though the word "discrimination" may have specific meanings in certain circumstances, it is
used throughout the findings as meaning a differentiation (see, e.g., The New Shorter Oxford English Dictionary
(1993), p. 689). As a result, the term "transnational price discrimination" in these findings refers only to the
existence of a difference in price between two markets locat ed in different countries, irrespective of the intent of
the exporter behind that price difference or the effects thereof. See also Jacob Viner's definition of "dumping"
as a "price-discrimination between national markets" (Dumping, A Problem in International Trade (1923), p. 3).
427 The 1916 Act was part of a legislative effort of the United States to address a number of practices
perceived at that time as "unfair competition". A number of major anti-trust and trade laws of the United States
still applicable today were adopted by the Congress of the United States (hereinafter the "US Congress")
between the end of the 19
th century and the 1930’s. The Sherman Act (15 U.S.C. 1-7) dates back to 1890 and the
Clayton Act to 1914 (15 U.S.C. 12, 13, 14-19, 20, 21, 22-27; 29 U.S.C. 52, 53). Subsequent to the 1916 Act
came the 1921 Anti-Dumping Act, the 1930 Tariff Act (which has become since the basis of the current US
anti-dumping legislation) and the 1936 Robinson-Patman Act, amending Section 2 of the Clayton Act of 1914.

Two significant features of the 1916 Act are that:
(a) it provides for a review of the practices concerned by the judiciary branch of government 428 at
the federal level, not by the executive branch of government; and
(b) it provides for two "tracks" of litigation before US federal courts: (i) civil proceedings
through which a person may seek to recover damages, and (ii) criminal proceedings whereby
the US Department of Justice may seek the imposition of a fine or imprisonment, or both.
2. Issues to be addressed by the Panel
(a) Summary of issues before the Panel
6.2 The understanding of the Panel as to the claims and defences of the parties is, in a
summarized form, as follows.
429
6.3 Japan challenges the 1916 Act as such, not a particular instance of application. It claims that
the 1916 Act violates Article III:4, Article XI of the GATT 1994, Article VI:2 of the GATT 1994 and
Article 18.1 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 430, Article VI of the GATT 1994 and Article 1 of the Anti-Dumping Agreement,
Article VI of the GATT 1994 and Article 3 of th e Anti-Dumping Agreement, Article VI of the
GATT 1994 and Articles 4 and 5 of the Anti-Dumping Agreement, Article VI of the GATT 1994 and
Article 9 of the Anti-Dumping Agreement, Arti cle VI of the GATT 1994 and Article 11 of the
Anti-Dumping Agreement, Articles 1 and 18.1 of the Anti-Dumping Agreement by failing to comply
with Article VI of GATT 1994 and Articles 2, 3, 4, 5, 9 and 11 of the Anti-Dumping Agreement,
Article XVI:4 of the Agreement Establishing the World Trade Organization 431 and Article 18.4 of the
Anti-Dumping Agreement. Finally, Japan requests that the Panel recommend that the United States
repeal the 1916 Act in order to bring its legislati on into conformity with US obligations under the
WTO Agreement.
6.4 Japan claims that the 1916 Act falls within the scope of Article VI of the GATT 1994 and the
Anti-Dumping Agreement because the 1916 Act targets a form of international price discrimination
defined as "dumping" in that Article. Japan argues that recent US court decisions support the view
that the 1916 Act has been applied as an anti-dumping law. The anti-dumping nature of the 1916 Act
has also been recognised by officials of the US executive branch.
6.5 Japan also claims that, by providing for treble damages, fines or imprisonment, the 1916 Act
violates Article VI:2 of the GATT 1994 and Article 18.1 of the Anti-Dumping Agreement, which
provide that the imposition of duties is the only remedy allowed to counteract dumping under the
WTO Agreement.

428 The terms "judiciary branch of government", "executive branch of government" and "legislative
branch of government" are, throughout this report, used within the meaning given to them in US constitutional
law.
429 The claims and arguments of the parties are reported in greater detail in sections II and III of this
Report.
430 Referred to hereafter as the "Anti-Dumping Agreement".
431 Throughout these findings, the Marrakesh Agreement Establishing the World Trade Organization,
including its annexes, will be referred to as the "WTO Agreement". The Marrakesh Agreement Establishing the
World Trade Organization, without its annexes, will be referred to as the Agreement Establishing the WTO. In
that context, Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization will be
referred to as "Article XVI:4 of the Agreement Establishing the WTO". The agreements annexed to the
Agreement Establishing the WTO will be referred to as the "WTO agreements".

6.6 Furthermore, Japan claims that the 1916 Act violates a number of requirements of Article VI
and the Anti-Dumping Agreement, inter alia by not providing for the same elements in terms of
comparison for the purpose of establishing the dumping margin, regarding the determination of
material injury and with respect to procedural requirements regarding the initiation and conduct of the
investigation and the imposition and duration of measures.
6.7 In addition, Japan claims that the 1916 Act violates Article III:4 of the GATT 1994 to the
extent that it provides less favourable treatment to imported goods than is granted to US goods under
the Robinson-Patman Act432 in terms of the difference in (i) pleading requirements, (ii) the use of the
intent requirement in the 1916 Act instead of a requirement of "effect" under the Robinson-Patman
Act, (iii) cost recoupment requirement, (iv) the statutory defences available under the Robinson-
Patman Act and not expressly provided for in the 1916 Act, and (v) the conducts subject to penalties.
6.8 Moreover, Japan claims that the 1916 Act violates Article XI because it establishes
impermissible import prohibitions or restrictions other than duties, taxes or other charges.
6.9 Japan finally claims that the United States, because it has failed to conform the 1916 Act with
the provisions of the Anti-Dumping Agreement and the provisions of the GATT 1994 referred to
above, also violates Article 18.4 of the Anti -Dumping Agreement and Article XVI:4 of the
Agreement Establishing the WTO.
6.10 The United States argues that the Panel has no jurisdiction to address the compatibility of the
1916 Act with the Anti-Dumping Agreement since, pursuant to Article 17.4 of that agreement, and as
confirmed by the Appellate Body in Guatemala – Anti-Dumping Investigation Regarding Portland
Cement From Mexico,
433 a panel may consider a violation of the Anti-Dumping Agreement only when
one of three specific measures have been adopted. The Panel cannot review the compatibility of the
1916 Act as such with the Anti-Dumping Agreement. Moreover, given the relationship between the
Anti-Dumping Agreement and Article VI of the GATT 1994, the Panel cannot make a finding under
Article VI separately from the Anti-Dumping Agreement.
434
6.11 The United States also argues that the 1916 Act, to the extent that the US Department of
Justice enjoys discretion to file - or not - a suit with a federal court, is a "non-mandatory" law within
the meaning given to that concept by GATT 1947 panels and by panels and the Appellate Body under
the WTO. The United States further argues that the 1916 Act is susceptible to, and indeed has been
interpreted in, a WTO-compatible manner. In application of past GATT 1947 panel practice, this also
makes the 1916 Act "non-mandatory" legislation.
6.12 The United States also argues that the 1916 Act is an anti-trust statute. It is not subject to the
disciplines of Article VI of the GATT 1994 since it does not address injurious dumping within the
meaning of Article VI but a specific form of international price discrimination with predatory intent.
The United States considers that Article VI applies only to laws purporting to impose border measures
in the form of anti-dumping duties against dumping causing injury. Members are free to address
dumping, including injurious dumping, through other WTO-consistent means. The 1916 Act, because
it imposes damages on importers rather than border measures in the form of anti-dumping duties, is an
internal measure subject to Article III, but not to Article VI. On that basis, the Panel should find that
the 1916 Act does not violate Article VI of the GATT 1994. If the Panel were to follow Japan’s
arguments on Article VI and the Anti-Dumping Agreement, all anti-trust laws of Members, including
Japan’s legislation and the EC competition rules (under Article 82 of the Treaty of Amsterdam),

432 See footnote 279 above.
433 Adopted on 25 November 1998, WT/DS60/AB/R, hereinafter "Guatemala – Cement".
434 The United States refers to the Panel and Appellate Body Reports on Brazil – Measures Affecting
Desiccated Coconut, adopted on 20 March 1997, WT/DS22/R, WT/DS22AB/R, hereinafter " Brazil - Desiccated
Coconut".

would be subject to Article VI of the GATT 1994 to the extent that they rely on transnational price
discrimination.
6.13 The United States also contends that Article VI:2 of the GATT 1994 and the Anti-Dumping
Agreement do not provide that duties are the sole remedy allowed to counteract dumping. A Member
is bound to respect the provisions of the Anti-Dumping Agreement only to the extent it intends to
impose duties.
6.14 Finally, the United States claims that the 1916 Act does not violate Article III:4 of the
GATT 1994. Compared with the Robinson-Patman Act, the 1916 Act actually grants more favourable
treatment to imported goods than to US goods. The 1916 Act requires an intent to destroy or injure an
industry in the United States, or to prevent the establishment of an industry in the United States, or to
restrain or monopolize any part of trade and commerce in the articles concerned in the United States.
According to the United States, this requirement that an "intent" be demonstrated by the plaintiff has
been considered to be the main reason for the very rare and generally unsuccessful application of the
1916 Act compared with the Robinson-Patman Act. Apart from this, the procedural requirements
under the two statutes are either similar or more favourable to defendants under the 1916 Act.
6.15 The United States also states that the 1916 Act does not violate Article XI of the GATT 1994,
since none of the remedies provided in the 1916 Act are of such a nature as to fall within the scope of
Article XI:1.
6.16 The United States further argues that, since the 1916 Act is susceptible to an interpretation
that is fully consistent with all WTO obligations of the United States and, in fact, has been so
interpreted to date, there is no requirement under Article XVI:4 of the Agreement Establishing the
WTO that the United States change that law.
(b) General approach of the Panel
6.17 From the above, it appears to the Panel that the two parties address the WTO-compatibility of
the 1916 Act through approaches that are diametrically opposed. Japan, basing its arguments on the
definition of "dumping" found in Article VI:1 of the GATT 1994, seems to be of the view that any
law which targets "dumping" within the meaning of Article VI is a "trade" law and is therefore subject
to the relevant WTO disciplines. The approach of the United States, on the contrary, seems to be that
the disciplines of Article VI of the GATT 1994 apply only to the extent that a law purports to address
"injurious dumping" through the imposition of duties. If what the law targets is not "injurious
dumping" within the meaning of Article VI of the GATT 1994, and if the measures imposed are not
border measures in the form of anti-dumping duties, the WTO disciplines on anti-dumping do not
apply to it.
6.18 On the basis of the arguments developed by the parties, the Panel considers that it needs to
approach the matter before it as follows.
435
6.19 First, since we are called to determine the compatibility of a law of the United States with the
WTO obligations of that Member, we must determine how we should consider that law and its
"surrounding", i.e. the circumstances of its enactment (including the legislative history)
436 and the

435 We note that Japan referred to the negative trad e impact of the 1916 Act, in particular the "chilling
effect" it has on exports from Japan. However, Japan did not link its statement to the violation of any particular
provision, nor to a non-violation claim. We therefore did not entertain it.
436 Since the term "legislative history" is used throughout this report in relation to the preparation of US
pieces of legislation, it will be given the meaning it has under US practice, i.e. "The background and events,
including committee reports, hearings, and floor debates, leading up to the enactment of a law." Black's Law
Dictionary, 6th Ed. (1990), p. 900.

subsequent interpretation(s) by the judiciary branch of the US government. This is in our view
important since both parties have substantially discussed the role of the Panel in that respect. How we
consider judicial interpretation, as evidence of the meaning given to the terms of a legal text, may
affect the way we should understand the terms of the 1916 Act.
6.20 Second, we should proceed to address the issue whether we review the 1916 Act under
Article VI of the GATT 1994 and the Anti-Dumping Agreement or under Article III:4 of the
GATT 1994 first, or if we review it under either provision or agreement at all. The reason for this is
that, while the 1916 Act addresses transnational price discrimination, it imposes internal measures.
Article VI of the GATT 1994 and the Anti-Dumping Agreement relate to actions by Members
vis-à-vis a particular practice whereas Article III:4 ensures that foreign products, once imported, are
not subject to less favourable treatment than domestic products. We believe that it falls within our
competence and duty to determine the applicability of Article III:4 of the GATT 1994 on the one hand
and Article VI and the Anti-Dumping Agreement on the other hand as part of our review of the
compatibility of the 1916 Act under the provision(s) found applicable, without prejudice to judicial
economy.
6.21 On the basis of our conclusions, we shall address the compatibility of the 1916 Act under
Article III:4 and/or Article VI of GATT 1994 and the Anti-Dumping Agreement to the extent
necessary to assist the WTO Dispute Settlement Body 437 in making its recommendations. We should
do this having first dealt with the "jurisdictional" argument of the United States according to which
the Panel cannot review the 1916 Act as such under Article VI and the Anti-Dumping Agreement.
We will also consider the defence of the United States based on the alleged "mandatory/non-
mandatory" nature of the 1916 Act. If we proceed with the analysis of Article VI of the GATT 1994
and the Anti-Dumping Agreement, we shall consider the scope of our jurisdiction under those
provisions. We shall also address the relationship between Article VI and the Anti-Dumping
Agreement and how this relationship should affect the findings we shall make.
6.22 Once this is done, we may also consider the claims of Japan under Article XI of the
GATT 1994, and Articles XVI:4 of the Agreement Establishing the WTO and 18.4 of the
Anti-Dumping Agreement.
6.23 However, before reviewing the substantive issues of the case, we will address the procedural
issues raised by the parties in the course of the proceedings.
(c) Burden of proof
6.24 We recall the Appellate Body Report on United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India,
438 which stated that:
"the burden of proof rests upon the party, whether complaining or defending, who
asserts the affirmative of a particular claim or defence. If that party adduces evidence
sufficient to raise a presumption that what is claimed is true, the burden then shifts to
the other party, who will fail unless it adduces sufficient evidence to rebut the
presumption."
6.25 Applying this rule to the factual evidence submitted in the present case, Japan, as the
complainant, should adduce sufficient evidence to raise a prima facie case that each of its claims has
merit. If it were to do so, it would then be for the United States to adduce sufficient evidence to rebut
that prima facie case. If the United States were to assert the affirmative of a particular defence, it
would bear the burden of proving it. This rule how ever is only applicable to determine whether and

437 Hereinafter also referred to as the "DSB".
438 Adopted on 23 May 1997, WT/DS33/AB/R, p. 14.

when a party bears the burden of proof. Once both parties have submitted evidence meeting those
requirements, it is up to the Panel to weigh the evidence as a whole. In cases where the evidence as a
whole regarding a particular claim or defence remains in equipoise, the issue must be decided against
the party bearing the burden of proof on that claim or defence.
6.26 With respect to the interpretation of the covered agreements, the Panel will be aided by the
arguments of the parties but will not be bound by them. Pursuant to Article 3.2 of the DSU, our
decision on such matters must be in accord with th e rules of treaty interpretation applicable to the
WTO.
3. Relationship of this case with the EC complaint
6.27 The subject matter of the present case is basically the same as that of the case on
United States – Anti-Dumping Act of 1916, complaint by the EC (WT/DS136), and some of the issues
that have to be addressed by the Panel are largely similar. However, the claims and arguments made
by Japan and the arguments developed by the United States in reply in the present case are sometimes
quite different from the claims and arguments of the European Communities and the arguments
submitted by the United States in WT/DS136. We also recall that, even though this Panel is composed
of the same members as the panel which addressed the EC complaint, the two panels are procedurally
distinct. As a matter of fact, the proceedings initiated by Japan started several months after the
beginning of the case initiated by the EC and none of the parties requested that the panels harmonise
their timetables or hold concurrent deliberations in the two procedures (WT/DS136 and WT/DS162).
The United States objected to concurrent deliberations by the two panels and the European
Communities was not in favour of delaying the proceedings in WT/DS136, which concurrent
deliberations would have resulted in. In such a context, the panel in the EC complaint considered that
it had to conduct its review independently from the present case initiated by Japan, both in terms of
procedure and of analysis of the substantive issues before it.
6.28 The same reasoning should apply to this case. Consequently, each case has to be decided on
the basis of the claims and arguments submitted by the parties in that specific case. This also implies
that our reasoning on a similar issue may sometimes be different, depending on the arguments
developed by the parties. We note, inter alia, that since the defence of the United States has, in our
opinion, evolved between the two cases, this Panel had to consider aspects that the panel in
WT/DS136 did not have to consider and it would not be consistent with the obligation of the two
panels to separately conduct their examination of the 1916 Act to review the findings of the panel in
WT/DS136 on the basis of the arguments raised in this case, and vice-versa. However, whenever the
claims and arguments of the parties raise issues identical to those addressed by the panel in
WT/DS136, we will apply the same reasoning as has been applied by the panel in WT/DS136.
B. P
RELIMINARY ISSUES
1. Request for enhanced third party rights by the European Communities
6.29 The European Communities reserved its third party rights in this case and made both a written
submission and an oral presentation to this Panel at our first substantive meeting. On 25 August 1999,
the EC also requested enhanced third party rights so as to allow it to fully participate in the
proceedings, that is to be present throughout both substantive meetings of the Panel and to be able to
make a submission on each occasion. The EC recalled that a similar decision had been taken in the
case on European Communities – Measures Concerning Meat and Meat Products ("Hormones").439 In
that case, the Appellate Body found that "Although Article 12.1 and Appendix 3 of the DSU do not
specifically require the Panel to grant this opportunity […] we believe that this discussion falls within

439 Adopted on 13 February 1998, WT/DS26/R (complaint by the United States); WT/DS48/R
(complaint by Canada), hereinafter the "EC – Hormones" case.

the sound discretion and authority of the Panel, particularly if the Panel considers it necessary for
ensuring to all parties due process of law."
6.30 Japan informed the Panel that it shared the concern of the European Communities and
accepted its request for enhanced third party rights. In turn, Japan requested access to the documents
exchanged by the parties in WT/DS136 and the right to attend the second substantive meeting of the
panel in that case. The United States strongly objected to the request of the EC. In the opinion of the
United States, enhanced third party rights were not necessary in order to obtain access to the
submissions of the parties. In the EC - Hormones case, the panels had granted enhanced third party
rights essentially because they intended to conduct concurrent deliberations in the case initiated by the
United States and in the case initiated by Canada. The United States mentioned that it would not
support concurrent deliberations in this case and that it could not agree to a request of which the
apparent purpose was to provide the third party with an opportunity to make an additional submission
in relation to its own panel process.
6.31 On 13 September 1999, the Panel, through its Chairman, informed the parties and the
European Communities that it could not accede to the request of the EC. The Panel reserved its right
to reconsider the issue in light of subsequent events and informed the parties and the European
Communities that it would address the matter in detail in its findings.
6.32 The Panel carefully considered the arguments raised by the parties. While the DSU does not
provide for enhanced third party rights, neither Article 10 of the DSU nor any other provision of the
DSU prohibits panels from granting third party rights beyond those expressly mentioned in Article 10.
We also note that Article 9.3 of the DSU, which deals with situations where more than one panel is
established to examine complaints related to the same matter, does not address the question of
enhanced participation of third parties. Finally, we recall that the Appellate Body in the EC –
Hormones case confirmed that granting enhanced third party rights was part of the discretion of
panels under Article 12.1 of the DSU.
440
6.33 However, we note that the DSU differentiates in terms of rights between main parties and
third parties and that this principle should be respected in order to keep within the spirit of the DSU in
that respect. Enhanced third party rights have so far been granted for specific reasons only. In the
EC - Hormones case, like in this case and the case initiated by the European Communities
(WT/DS136), the two panels were composed of the same panelists and dealt with the same matter.
While these elements appeared to play a significant role in the decisions taken by the panels and in
their confirmation by the Appellate Body, we consider that they are not decisive. Otherwise,
enhanced third party rights would have to be granted in almost all cases where the same matter is
subject to two or more complaints with the same panel composition.
441 We note that particular
circumstances existed in the EC – Hormones case which certainly contributed to the decisions of the
panels to review the two cases concurrently, such as their highly technical and factually intensive
nature, as well as the fact that the panels had decided to hold one single meeting with the parties and
the experts consulted pursuant to Article 11.2 of the Agreement on Sanitary and Phytosanitary
Measures. These decisions were largely based on practical reasons and due process had to be
preserved. We conclude from the reports in the EC – Hormones case that enhanced third party rights
were granted primarily because of the specific circumstances.
6.34 We find that no similar circumstances exist in the present matter, which does not involve the
consideration of complex technical facts or scientific evidence. Moreover, none of the parties
requested that the panels harmonise their timetables or hold concurrent deliberations in the two

440 Op. Cit., para. 154.
441 Our remark is based on our understanding of the current state of the WTO practice. It is without
prejudice to the question whether enhanced third party rights would be advisable or not in general.

procedures (WT/DS136 and WT/DS162). In fact, the United States objected to concurrent
deliberations.
6.35 We therefore find that there was no reason to grant enhanced third party rights to the
European Communities in these proceedings.
2. Context in which the 1916 Act should be examined by the Panel
(a) Issue before the Panel
6.36 We note that Japan contests the compatibility of the 1916 Act as such – not of particular
instances of application – with certain provisions of the WTO Agreement. While it is clear from the
terms of Article 3.2 of the DSU that it falls within the competence of the Panel to "clarify the existing
provisions of [the covered agreements] in accordance with customary rules of interpretation of public
international law", the DSU does not expressly provide how panels should address domestic
legislation. Article 11 of the DSU only specifies that panels "should make […] an objective
assessment of the facts of the case". However, both Article 3.2 of the DSU and the practice of the
Appellate Body make it clear that we should, whenever appropriate, take into consideration the
practice of international tribunals in this respect.
6.37 This case has an additional dimension. Although panels often have to address domestic laws,
in the present case we are called upon to review the consistency of a law which was drafted more than
eighty years ago, and the historical, cultural, legal and economic context of the time undoubtedly
influenced its terms. We also note that the parties seem to have diverging views regarding the weight
which the Panel should give to the court decisions relating to that law.
6.38 Furthermore, the 1916 Act was seldom applied since its enactment. It is the understanding of
the Panel, based on the information provided by the parties, that no criminal case was ever prosecuted
under the 1916 Act and that, until the early 1970's, there was only one reported court decision based
on the civil procedure provided for in the 1916 Act.
442 Since 1975, there has been only a limited
number of judicial interpretations of the provisions of the 1916 Act. All these interpretations come
from US circuit courts of appeals or US district courts. 443 No claim under the 1916 Act was ever
expressly reviewed by the Supreme Court of the United States.444
6.39 Therefore, we find it appropriate to clarify from the outset how we shall take into
consideration the text of the 1916 Act itself, the historical context of its enactment (including the
legislative history) and its subsequent interpretation as it results from the US case-law and any other
relevant element of information.
(b) How should the Panel consider the text of the 1916 Act, the context of its enactment, the case-
law relating to it and other relevant pieces of information?
(i) Arguments of the parties and approach of the Panel
6.40 Japan claims that the text of the 1916 Act is unambiguous. Thus, the Panel’s analysis should
begin and end with the text. The Panel should not defer to the characterisation of the 1916 Act by the

442 H. Wagner and Adler Co. v. Mali, F.2d 666 (2d Cir. 1935).
443 Federal courts (district courts and circuit courts of appeals) are competent to review cases brought
under the 1916 Act, under the supervision of the Supreme Court of the United States (hereinafter also the
"Supreme Court").
444 In United States v. Cooper Corporation (312 U.S. 600, 1941), hereinafter the " Cooper" case, p. 745,
the Supreme Court made a reference to the 1916 Act as "supplemental" to the Sherman Act. This decision is
discussed further in section VI.C.2(d)(ii) below.

United States as an "anti-trust" remedy. The existence and characteristics of the 1916 Act are
questions of fact that are "left to the discretion of a panel as a trier of facts". The term "examination",
as used by the Appellate Body in its report on India – Patent Protection for Pharmaceutical and
Agricultural Chemical Products 445 encompasses all the aspects of the “objective assessment of the
matter” provided for in Article 11 of the DSU. Thus, the Panel should not accept the US judicial
interpretation of the 1916 Act as binding.
6.41 Japan also considers that the historical context and the legislative history confirm the textual
interpretation of the 1916 Act.
6.42 Moreover, Japan claims that official statements by members of the executive branch of the
US government contradict the position taken by the United States in the present case. Japan refers to
letters of US officials to congressmen or statements before the US Congress that the 1916 Act was
"grandfathered" under GATT 1947 as "existing legislation" within the meaning of the Protocol of
Provisional Application. For Japan these statements demonstrate that, for years, the United States has
viewed the 1916 Act as GATT-inconsistent and requiring grandfathering.
6.43 Finally, Japan refers to a 1995 document of the US Department of Justice and the US Federal
Trade Commission, called Antitrust Enforcement Guidelines for International Operations ,
446 which
states that "the 1916 Act is not an antitrust statute, it is a trade statute that creates a private claim
against importers". This document shows that the two US government agencies that enforce US
anti-trust law agree that the 1916 Act is not an anti-trust law, but an anti-dumping law. Japan also
refers to a compilation prepared for the Committee on Ways and Means of the US House of
Representatives, which includes the 1916 Act as a trade statute.
6.44 The United States argues that it is an accepted principle of international law that municipal
law is a fact to be proven before an international tribunal. In India – Patent (US), the Appellate Body
affirmed the panel’s review of India’s domestic law as a question of fact. It was proper for the panel
to conduct an extensive review of the Indian la w at issue to determine whether India had met its
obligations under the TRIPS Agreement. The Appell ate Body had also approved the fact that the
panel had not interpreted Indian law as such but, rather, had reviewed that law to determine whether it
was WTO-consistent. This Panel must determine the fact of the 1916 Act under US law, which
includes US judicial decisions interpreting the 1916 Act. If the Panel were to interpret the 1916 Act,
it would run the risk of adopting an interpretation that does not match the true application of the law
in the United States. The Panel should deem the case-law interpreting the 1916 Act as dispositive for
purposes of determining the fact of US law. The role of the Panel is to assess the facts and then
determine their conformity with the relevant WT O agreements, which generally entails interpreting
the scope and applicability of those agreements to the facts. The proper interpretation of the 1916 Act
is a question of fact to be established, as it is an accepted principle of international law that municipal
law is a fact to be proven before international tri bunals. The Panel must review the current weight of
judicial authority and decide for itself whether the 1916 Act is inconsistent with any WTO
obligations. However, it is not the role of the Panel to agree or disagree with any US judicial decision
relevant to the interpretation of the 1916 Act.
6.45 The United States also considers that statements of officials of the executive branch of
government of the United States cited by Japan deserve no weight in the Panel’s consideration for two
reasons. First, statements as to the GATT consistency of an amendment to the 1916 Act are not
relevant in this case because the amendments were never enacted. Second, the United States considers
that the notifications to the GATT of its "grandfathered" laws (document L/2375/Add.1), which does
not include the 1916 Act, is evidence that the official view of the United States that the 1916 Act was

445 Adopted on 16 January 1998, WT/DS50/AB/R, hereinafter "India – Patent (US)", paras. 66-67.
446 April 1995, available on http://www.usdoj.gov/atr/public/guidelines/internat.txt.

not incompatible with Part II of the GATT 1947. Thus, the statements referred to by Japan are
mistaken as a matter of fact.
6.46 Finally, the United States mentions that the Antitrust Enforcement Guidelines for
International Operations are not regulations with the force of law, but rather are intended to provide
anti-trust guidance to businesses engaged in international operations on questions that relate
specifically to the relevant agencies’ international enforcement policy. The United States also points
at its codification system, which classifies the 1916 Act as a text dealing with unfair competition, and
at a compilation prepared for the Committee on the Judiciary, which lists the 1916 Act as one of the
US anti-trust laws.
6.47 The Panel is of the view that the understanding of a law, the WTO-compatibility of which has
to be assessed, begins with an analysis of the terms of that law. However, we consider that we should
not limit ourselves to an analysis of the text of the 1916 Act in isolation from its interpretation by
US courts or other US authorities, even if we were to find that text to be clear on its face. If we were
to do so, we might develop an understanding of that law different from the way it is actually
understood and applied by the US authorities. This would be contrary to our obligation to make an
objective assessment of the facts of the case, pursuant to Article 11 of the DSU. Therefore, we must
look at all the aspects of the domestic law of the United States that are relevant for our understanding
of the 1916 Act. However, looking at all the relevant aspects of the domestic law of a Member may
raise some methodological difficulties, such as how much deference must be paid to that Member's
characterisation of its legislation. In that context, we will determine first how to deal with that aspect
of the examination of a domestic law and how we should consider the case-law related to it, since
courts are, inter alia, responsible for interpreting the law. Moreover, in light of the fact that the law at
issue was enacted more than eighty years ago and not regularly invoked, and since the parties have
referred to other elements such as the historical context, the legislative history and subsequent
declarations of US authorities made in relation to the 1916 Act, we shall also explain how we will
consider them.
(ii) Consideration by panels of domestic law in general
6.48 We note that in India – Patent(US), the Appellate Body addressed in some detail the issue of
how panels should consider municipal law. The Appellate Body stated that:
"In public international law, an international tribunal may treat municipal law in
several ways. Municipal law may serve as evidence of fact and may provide
evidence of State practice."
447
"It is clear that the examination of the relevant aspects of Indian municipal law […] is
essential to determining whether India has complied with its obligations under
Article 70.8(a) [of the TRIPS Agreement]. […] To say that the Panel should have
done otherwise would be to say that only India can assess whether Indian law is
consistent with India's obligations under the WTO Agreement. This, clearly, cannot
be so."448
6.49 The extent to which panels may examine the laws of Members was illustrated by the
Appellate Body in the same report. Having to de termine whether India provided for legal protection
commensurate with the requirements of Article 70.8 of the TRIPS Agreement, the Appellate Body
asked itself the question of "what constitutes […] a sound legal basis in Indian law". 449 Moreover, it

447 Op. Cit. , para. 65. See also M.N. Shaw, International Law (1995), at p. 106, mentioning that
domestic law "can be utilised as evidence of compliance or non-compliance with international obligations".
448 Ibid., para. 66.
449 Ibid., para. 59.

agreed with the conclusion of the panel that "the current administrative practice [of India, based on
so-called "administrative instructions" from the government] creates a certain degree of legal
insecurity in that it requires Indian officials to ignore certain mandatory provisions of the Patent
Act."450 The Appellate Body also agreed that "it was necessary for the Panel in this case to seek a
detailed understanding of the operation of the Patent Act as it relates to the 'administrative
instructions' in order to assess whether India had complied with Article 70.8(a) [of the TRIPS
Agreement]."451
6.50 Thus, our understanding of the term "examination" as used by the Appellate Body is that
panels need not accept at face value the characterisation that the respondent attaches to its law. A
panel may analyse the operation of the domestic legislation and determine whether the description of
the functioning of the law, as made by the respondent, is consistent with the legal structure of that
Member. This way, it will be able to determine whether or not the law as applied is in conformity
with the obligations of the Member concerned under the WTO Agreement.
452
(iii) Consideration of the case-law relating to the 1916 Act
6.51 In the present case, unlike India in the India – Patent (US) case, the United States does not
claim that some administrative interpretation determ ines the meaning of the 1916 Act. The situation
is different to the extent that both parties rely, in order to support their claims, on a number of
judgements by US courts which have applied and interpreted the 1916 Act since the 1970's. 453 I n
many Members, final judicial decisions regarding the interpretation of a given law may not be
contested any further, whereas administrative interpretations of a law may generally be overruled by a

451 Ibid., para. 68 (emphasis added).
452 This is evidenced by the examples used by the Appellate Body (Ibid., para. 67):
"Previous GATT/WTO panels also have conducted a detailed examination of the domestic
law of a Member in assessing the conformity of that domestic law with the relevant
GATT/WTO obligations. For example, in United States – Section 337 of the Tariff Act of
1930 [footnote omitted], the panel conducted a detailed examination of the relevant
United States' legislation and practice, including the remedies available under Section 337 as
well as the difference between patent-based Sec tion 337 proceedings and federal district court
proceedings, in order to determine whether Section 337 was inconsistent with Article III:4 of
the GATT 1947."
453 The following – final or interlocutory - court decisions relate to claims made under the 1916 Act:
H. Wagner and Adler Co. v. Mali , Op. Cit .; In re Japanese Electronic Products Antitrust Litigation , 388
F.Supp. 565 (Judicial Panel on Multidistrict Litigation, 1975) (hereinafter " In re Japanese Electronic Products
I"); Zenith Radio Corp. v. Matsushita Electric Industrial Co., Ltd., 402 F.Supp. 244 (E.D. Pa. 1975) (hereinafter
"Zenith I "); Zenith Radio Corp. v. Matsushita Electric Industrial Co., Ltd. , 402 F.Supp. 251 (E.D. Pa. 1975)
(hereinafter "Zenith II"); Outboard Marine Corp. v. Pezetel , 461 F. Supp. 384 (D. Del. 1978); Schwimmer v.
Sony Corp. of America, 471 F. Supp. 793 (E.D.N.Y. 1979); Schwimmer v. Sony Corp. of America , 637 F.2d 41
(2nd Cir. 1980); Jewel Foliage Co. v. Uniflora Overseas Florida , 497 F. Supp. 513 (M.D. Fla. 1980); Zenith
Radio Corp. v. Matsushita Electric Industrial Co., Ltd. , 494 F.Supp. 1190 (E.D. Pa. 1980) (hereinafter " Zenith
III"); In re Japanese Electronic Products Antitrust Liti gation (Zenith Radio Corp. v. Matsushita Electric
Industrial Co., Ltd.) , 723 F.2d 319 (3d Cir. 1983) (hereinafter " In re Japanese Electronic Products II ");
Western Concrete Structures Co. v. Mitsui & Co., 760 F.2d 1013 (9th Cir. 1985); Isra Fruit Ltd. v. Agrexco
Agr. Export Co. , 631 F. Supp. 984 (S.D.N.Y. 1986); In re Japanese Electronic Products Antitrust Litigation
(Zenith Radio Corp. v. Matsushita Electric Industrial Co., Ltd.) , 807 F.2d 44 (3d Cir. 1986) (hereinafter " In re
Japanese Electronic Products III ") Helmac Products Corp. v. Roth (Plastics) Corp. , 814 F. Supp. 560 (E.D.
Mich. 1992) (hereinafter " Helmac I"); Helmac Products Corp. v. Roth (Plastics) Corp ., 814 F.Supp. 581 (E.D.
Mich. 1993) (hereinafter "Helmac II"); Geneva Steel Company v. Ranger Steel Supply Corp. , 980 F.Supp. 1209
(D. Utah 1997) (hereinafter " Geneva Steel "); Wheeling-Pittsburgh Steel Corporation v. Mitsui Co. , 35
F.Supp.2d. 597 (S.D. Ohio 1999) (hereinafter "Wheeling-Pittsburgh").

domestic judge called upon to apply that law. However, an administrative interpretation will normally
provide one single interpretation. In contrast, depending on the judicial structure of a Member,
judicial interpretations may emanate from several courts positioned at different levels in the judicial
order. The diversity of the sources of the case-law may make it more difficult to assess the respective
value of the judgements of which that case-law is composed.
6.52 We recall that the International Court of Justice, in the Elettronica Sicula S.p.A (ELSI) case,
referred to the judgement of the Permanent Court of International Justice 454 in the Brazilian Loans
case – to which the United States also refers in its submissions - and noted that:
"Where the determination of a question of municipal law is essential to the Court's
decision in a case, the Court will have to weigh the jurisprudence of the municipal
courts, and 'If this is uncertain or divided, it will rest with the Court to select the
interpretation which it considers most in conformity with the law' ( Brazilian Loans,
PCIJ, Series A, Nos. 20/21, p. 124)."
 455
We are fully aware that our role is to clarify the existing provisions of the covered agreements so as to
determine the compatibility of a domestic law with those agreements. We are also aware that, in the
Brazilian Loans case, the PCIJ was asked to apply domestic legislation to a given case. We are
nevertheless of the view that there is nothing in the text of the DSU, nor in the practice of the
Appellate Body, that prevents us from "weigh[ing] the jurisprudence of municipal [US] courts" if it is
"uncertain or divided". This would not require us to develop our own independent interpretation of
US law, but simply to select among the relevant judgements the interpretation most in conformity
with the US law, as necessary in order to resolve the matter before us.
456
6.53 We note that the 1916 Act is applied by US federal courts. Interpretations by the Supreme
Court of the United States prevail over interpretations made by the courts of appeals of the various
circuits. Interpretations by courts of appeals, in turn, prevail over interpretations by district courts, but
only within the same circuit.457
6.54 We understand from the submissions of the parties that the Supreme Court has yet to address
the interpretation of specific provisions of the 1916 Act. It mentioned the 1916 Act in only one of its
judgements.458 Thus, the case-law submitted by the parties that would allow us to understand the
actual meaning of the 1916 Act today essentially comes from district courts and courts of appeals of
various circuits of the US federal judicial system. We also note that the parties in their submissions
have relied on different judgments, which they claim support their interpretations of the 1916 Act.
6.55 We will respect the formal hierarchy of court decisions in the US federal system to the extent
that it is applicable. In that context, we should allow a circuit court of appeals decision to prevail over

454 Hereinafter "PCIJ".
455 Case Concerning Elettronica Sicula S.p.A. (ELSI) (United States of America v. Italy), ICJ Reports
1989, p. 15, at p.47, para. 62.
456 We do not consider that this would be engaging into interpreting US law, with the risks highlighted
by the United States in its submissions. Our approach is consistent with the reasoning of the PCIJ in the
Brazilian Loans case, where it stated that:
"It follows that the Court must pay the utmost regard to the decisions of the municipal courts
of a country, for it is with the aid of their jurisprudence that it will be enabled to decide what
are the rules which, in actual fact, are applied in the country the law of which is recognized as
applicable in a given case." (PCIJ, Series A, Nos. 20/21, p. 124)
457 A description of the organization of the US federal judicial system is found in para. 2.14 and
footnote 20 above.
458 Cooper, Op. Cit.

a district court decision. However, applying such a formal approach may prove insufficient in some
instances, for example when the decisions to be compared come from different circuits. 459 Therefore,
in all instances, we shall first ascertain whether the judgements subject to our comparison address
(i) the same issue, and (ii) at the same level of detail. In other words, we should always make sure that
a comparison can reasonably be made, both in terms of fact and in terms of the legal issues addressed,
before giving preference to the interpretation contained in one judgement compared with the
interpretation contained in another judgement of a court belonging to another circuit.
6.56 Moreover, we should normally, with respect to a given issue, allocate more weight to a final
judgement than to an interim or "interlocutory" decision, since the latter does not definitively
determine a cause of action, but only "decides some intervening matter pertaining to the cause."
460
However, we should also determine which argument ation is more convincing. Again, we will not
substitute our judgement for that of US courts. Our analysis should be based not only on the quality
of the reasoning, but also on what we would perceive to be in line with the dominant interpretation,
"paying utmost regard to the decision of the municipal courts". This is consistent with the US court
practice that if a precedent is not binding, the weight afforded to it will depend on the persuasive
value of the reasoning in the decision.
6.57 If, after having applied the above methodology, we could not reach certainty as to the most
appropriate court interpretation, i.e. if the evidence remains in equipoise, we shall follow the
interpretation that favours the party against which the claim has been made, considering that the
claimant did not convincingly support its claim.
6.58 Finally, we also consider that we should not accept at face value the use of certain terms such
as "dumping", "anti-dumping", "anti-trust", "protectionism" or "predatory pricing" in court decisions,
in other administrative documents or in academic works, when those terms are not further
substantiated. We recall that the mere description or categorisation of a measure by a Member, be it
internally or before a panel, should not be considered as a decisive factor for the application of the
WTO Agreement to that measure.
461 In the present case, such descriptions or categorisations may be
valid under US law but not necessarily in the WTO context. Likewise, having regard to the
importance of the legislative history in the interpretation of statutes by the US judiciary branch, terms
used in 1916 will have to be interpreted within the meaning they had at the time, not in light of the
meaning they have today, unless we have evidence that US courts have done so.
(iv) Consideration of the historical context and other evidence of the meaning of the 1916 Act
6.59 The historical context of the 1916 Act encompasses several elements. The first one, to which
US courts also extensively refer in order to determine "the intent of Congress", is the legislative
history as it appears, inter alia , from the Congressional Records. Since we have to examine the
1916 Act and understand its actual scope and operation, we should, as US courts do, pay attention to
the legislative history of that statute, as appropriate. The political and economic context as it emerges

459 From the replies of the United States to our questions, we understand that the stare decisis effect
which can be attached to precedents in common law does not apply between court decisions handed down in
different circuits.
460 See Black's Law Dictionary (1990), p. 815.
461 See, Panel Report on EEC – Regulation on Imports of Parts and Components, adopted on
16 May 1990, BISD 37S/132 (hereinafter " EC – Parts and Components "), paras. 5.6 and 5.7. In para. 5.7, the
panel stated that:
"if the description or categorization of a charge under the domestic law of a contracting party
were to provide the required "connection with importation", contracting parties could
determine themselves which of these provisions would apply to their charges."

from public declarations of the time or studies of the period may also be relevant. When considering
this evidence, we should not lose sight of the degree of development of anti-trust and trade law
concepts at the time of the enactment of the 1916 Act.
6.60 Regarding the statements of US officials referred to by Japan, 462 we note that Japan considers
them as showing that for many US executive branch officials, including officials of the current
Administration, the 1916 Act could be maintained under GATT 1947 only because it was
"grandfathered." We also note that the United States considers that these statements do not represent
the official position of the United States and are mistaken as a matter of fact. The 1916 Act was not
included in the survey of existing mandatory legisl ation not in conformity with part II of the
GATT 1947
463 because the 1916 Act was GATT-legal and therefore did not require "grandfathering".
6.61 The main question is whether these statements should be treated as admissions of facts or of
the legal nature of the 1916 Act under the WTO. We note that the factual accuracy of the statements
mentioned in this case has been put in doubt by the United States before the Panel. While this is not
sufficient to reject those statements out of hand, we are reluctant to consider them as "admissions" of
the United States without prior verification of the context in which they were made.
6.62 For these reasons, we consider that these statem ents should be used only to the extent that
they confirm other established evidence.
6.63 Japan and the United States have also referred to compilations prepared for committees of the
US Congress. Japan refers to the Overview and Compilation of US Trade Statutes , prepared for the
House Committee on Ways and Means. The United States considers this document to be an unofficial
compilation which has not been officially approved by that committee and may not reflect the views
of its members. As a result, it should be given less weight than a compilation made for the use of the
Committee on the Judiciary of the US House of Representatives, which is the committee also
responsible for the revision and codification of the statutes of the United States under Rule 10 of the
Rules of the US House of Representatives. Th is compilation confirms that the 1916 Act is an
anti-trust statute. We consider these documents to be informative regarding the opinions of the
authorities of the United States as to the classification of the 1916 Act as an anti-trust or as an
anti-dumping statute. However, as such, the codification of the 1916 Act or its inclusion in a
compilation for a committee of the US Congress cannot, in our view, affect our determination of the
compatibility of the 1916 Act with the WTO provisions.
464
6.64 With regard to the 1995 Antitrust Enforcement Guidelines for International Operations of the
US Department of Justice and the US Federal Trad e Commission referred to by Japan, we note their
role as "antitrust guidance to business engaged in international operations". We therefore consider
that they are indicative of the position of a particular department of the executive branch of the
US government. Moreover, to the extent that these guidelines do not substantiate the reasons why the
1916 Act should be considered as a trade statute and, in fact, mention that "its subject-matter is
closely related to the anti-trust rules regarding predation", we consider that we should refer to them
only as a confirmation of other established evidence, if necessary.

462 The arguments of the parties on this issue are reported in section III:D.2.(c) above.
463 See GATT Doc. L/2375/Add.1 of 19 March 1965.
464 See Panel Report on EC – Parts and Components, Op. Cit ., para. 5.7. That panel addressed the
description or categorisation of a charge under domestic law and concluded that if the description or
categorisation of a charge under the domestic law of a contracting party were to provide the required
"connection with importation", contracting parties could determine themselves which of these provisions would
apply to their charges. With such an interpretation th e basic objective underlying Articles II and III could not be
achieved. We consider that the same reasoning applies with respect to the application of Article VI.

6.65 Having clarified how we shall consider the materials before us in assessing the
WTO-compatibility of the 1916 Act, we now proc eed to discuss the preliminary issue of the
applicability of Articles III:4 of the GATT 19 94, and of Article VI of the GATT 1994 and the
Anti-Dumping Agreement.
3. Relationship between, on the one hand, Articl e III of the GATT 1994 and, on the other
hand, Article VI of the GATT 1994 and the Anti-Dumping Agreement
(a) Issue before the Panel
6.66 Japan claims that the 1916 Act violates Article VI of the GATT 1994 and certain provisions
of the Anti-Dumping Agreement. It also claims that the 1916 Act violates Article III:4 of the
GATT 1994.465 The United States claims that the 1916 Act is not subject to the disciplines of
Article VI essentially because it is not aimed at counteracting injurious dumping and because it does
not impose border measures in the form of anti-dumping duties.
6.67 Article III:4, first sentence, of the GATT 1994 provides in relevant parts as follows:
"The products of the territory of any cont racting party imported into the territory of
another contracting party shall be accorded treatment no less favourable than that
accorded to like products of national origin in respect of laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use."
6.68 Article VI provides in relevant parts as follows:
"1. The contracting parties recognize that dumping, by which products of one
country are introduced into the commerce of another country at less that the normal
value of the product, is to be condemned if it causes or threatens material injury to an
established industry in the territory of a contracting party or materially retards the
establishment of a domestic industry. […]
2. In order to offset or prevent dumping, a contracting party may levy on any
dumped product an anti-dumping duty no greater in amount than the margin of
dumping in respect of such product. […]"
6.69 The arguments of the parties raise the question whether the 1916 Act could, by its nature, fall
within the scope of Article VI only, of Article III:4 only, or partly or wholly within the scope of both.
This question is prompted by the positions taken by the parties on this issue. According to Japan, a
measure found inconsistent with Article VI can also violate Article III:4 by regulating imported
products under a separate, less favourable regime than applicable to domestic products. For the
United States, a law falls within the scope of Article III:4 when it can be characterised as an "internal"
law. Since the 1916 Act does not provide for border adjustment measures, such as the imposition of
duties on an imported product, it is an "internal" law subject to Article III:4 of the GATT 1994.
6.70 It seems to us that Articles III and VI are based on different premises: Article III (entitled
"National Treatment") operates on the basis of a comparison between the treatment granted to
domestic and imported products respectively, once the latter have been cleared through customs.
Thus, Article III:4 applies to measures imposed by Members internally, irrespective of the objective
of the measures. In contrast, Article VI does not compare the treatment of domestic and imported

465 Japan also claims a violation of Article XI of the GATT 1994. However, we find it appropriate to
address the relationship of Article XI with Article VI and Article III:4 once we have dealt with the relationship
between Article III:4 and Article VI.

products, since it applies only to imported goods. The basis for the applicability of Article VI to the
law of a Member does not seem to be the type of measures which is imposed by that Member, since
other reasons than dumping may lead to the imposition of duties, but the type of trade practice at the
origin of the measure.
6.71 The Panel thus is of the opinion that the nature of the 1916 Act might be such as to affect the
relevance of the claims made by Japan under Article III:4 or Article VI. Irrespective of the question of
judicial economy, the Panel considers that it has the "competence of its competence", i.e. that it may
determine whether a given claim can be addressed, irrespective of the positions expressed by the
parties on the issue. 466 Japan, in its submissions to the Panel, addressed first its claims based on
Article VI. However, the Panel should not be obliged to address those claims if it were to find that
Article VI is not applicable because the qualification juridique made by Japan is not correct. 467 On
the other hand, the Panel may not have to address Japan’s claims under Article III:4 if it were to find
that the 1916 Act falls exclusively within the scope of Article VI.
6.72 Therefore, it would be relevant to consider whether Article III:4 or Article VI of GATT 1994
- or both – are applicable to the 1916 Act, irrespective of whether the 1916 Act is compatible with
those provisions or not.
(b) Approach to be followed by the Panel
6.73 The issue whether the 1916 Act should be addressed under Article III:4 only, Article VI only,
or both, is not obvious from the outset. In our opinion, reaching conclusions on this matter requires
that we address the substance of the case, since one of the issues before us is whether the 1916 Act
can be subject to the disciplines of Article VI and the Anti-Dumping Agreement. It is therefore
appropriate to address this question as part of the substantive issues of this case, but separately from
the actual WTO-compatibility of the 1916 Act. Based on our findings regarding the applicability of
Articles III:4 and VI to the 1916 Act, we shall proceed to review the compatibility of that law with
either provision or both.
6.74 However, even though we do not reach yet any conclusion on the applicability of either
provision, we need to decide at this stage wh ether to begin our analysis with Article VI or
Article III:4.
6.75 It is a general principle of international law recalled by the Appellate Body that, when
applying a body of norms to a given factual situation, one should consider that factual situation under
the norm which most specifically addresses it.
468 As a result, one way to reply to the question above is
to determine which article more specifically addresses the 1916 Act. We agree that this will require
us to touch upon the substance of the case, but we recall that this test is used here for purely

466 This is different from exercising judicial economy, which is based on the necessity to address a
claim in light of findings made on another claim. It is also different from determining whether a claim is
properly before the Panel on the basis of the request for establishment of a panel. It is a question of knowing
whether the Panel can rule on two claims which, on the basis of a first consideration of the facts and arguments
before it, might be mutually exclusive.
467 For instance, if a complainant were to claim a violation of Article XI of GATT 1994 in relation to a
small tariff increase, the panel called upon to address the issue may be entitled to reject the claim on the ground
that the measure at issue is not a quantitative restriction within the meaning of Article XI, without addressing
any further the claim and the related arguments.
468 See Appellate Body Report on European Communities – Regime for the Importation, Sale and
Distribution of Bananas, adopted on 25 September 1997, WT/DS27/AB/R (hereinafter " European Communities
– Bananas "), para. 204, and PCIJ decision in the Serbian Loans case (1929), where the PCIJ stated that "the
special words, according to elementary principles of inte rpretation, control the general expression" (PCIJ, Series
A, No. 20/21, at p. 30). See also György Haraszti, Some Fundamental Problems of the Law of Treaties (1973),
at p. 191.

procedural reasons, that is to determine the order of our review. Such a prima facie analysis is, of
course, without prejudice to the final findings on the issue of the applicability of Articles III:4 and VI,
to be reached after a more detailed review of the scope of each provision, as necessary.
6.76 We note that the parties agree that the 1916 Act deals with transnational price discrimination.
We also note that dumping is a form of transnational price discrimination. However, the
United States argues that other requirements under the 1916 Act, such as the fact that it does not lead
to the imposition of border measures, make that law fall outside the scope of Article VI and into the
realm of Article III:4. We recall that Article III:4 states that imported products:
"shall be accorded treatment no less favourable than that accorded to like products of
national origin in respect of laws, regulations and requirements affecting their internal
sale, offering for sale, purchase, transportation, distribution or use."
It is not a priori impossible to determine that damages, fines or imprisonment, which are imposed on
persons, may accord less favourable treatment to imported products with respect to their internal sale,
offering for sale, purchase, transportation, distribution or use. This was done by previous panels.
469
However, a preliminary examination of the scope of application of Article III:4 (i.e. internal sale,
offering for sale, purchase, transportation, distribution or use) would tend to show that the terms of
Article III:4 are less specific than those of Articl e VI when it comes to the notion of transnational
price discrimination. Indeed, the 1916 Act refers to internal sales, but such sales relate to imported
products and the application of the 1916 Act is based on an international price difference, like
Article VI. We also consider that the main object of the 1916 Act is to counteract a certain form of
price discrimination, and that the sanctions imposed are, in that respect, the instruments of that object,
not the object itself.
6.77 In application of the principle recalled by the Appellate Body in European Communities –
Bananas and by the Permanent Court of International Justice in the Serbian Loans case, 470 there
seems to be reasons to reach the preliminary conclusion that we should review the applicability of
Article VI to the 1916 Act first, as that article apparently applies to the facts at issue more
specifically. This preliminary conclusion is based on our understanding of the arguments of the parties
and on a preliminary review of the terms of Articles III:4 and VI.
6.78 Our preliminary conclusion does not address the question whether the 1916 Act could fall
within the scope of both provisions. Should we determine that the 1916 Act actually falls within the
scope of Article VI, we would continue with Japa n’s claims of violation of Article VI and the
Anti-Dumping Agreement, as necessary to en able the DSB to make sufficiently precise
recommendations and rulings. Once this part of our terms of reference has been addressed, we shall
also decide whether pursuing our review with an analysis of the applicability of Article III:4 would be
necessary to enable the DSB to make sufficiently precise recommendations and rulings so as to allow
for prompt compliance "in order to ensure effective resolution of disputes to the benefit of all

469 See, e.g., Panel Report on United States – Section 337 of the Tariff Act of 1930 , adopted on
7 November 1989, BISD 36/345, para. 5.10. See also Panel Report on Italian Discrimination Against Imported
Agricultural Machinery, adopted on 23 October 1958, BISD 7S/60, which mentioned at para. 12 that:
"The selection of the word "affecting" [in Article III:4] would imply, in the opinion of the
Panel, that the drafters of the Article intended to cover in paragraph 4 not only the laws and
regulations which directly governed the conditions of sale or purchase but also any laws or
regulations which might adversely modify the conditions of competition between the domestic
and imported products on the internal market."
470 See footnote 464 above.

Members."471 If we do not find that the 1916 Act falls within the scope of Article VI of the
GATT 1994, we will proceed to consider the applicability of Article III:4 to the 1916 Act and, if
applicable, the compatibility of the 1916 Act with that provision.
6.79 Consequently, we proceed with a review of the applicability of Article VI to the 1916 Act.
However, before doing that, we need to address the question of the relationship between Article VI
and the Anti-Dumping Agreement. Indeed, Japan makes claims based concurrently on Article VI and
the Anti-Dumping Agreement. The United States argues that the jurisdiction of the Panel under the
Anti-Dumping Agreement is limited to situations where specific measures have been adopted; the
Panel cannot review the conformity of a law as such under the Anti-Dumping Agreement. Moreover,
the United States argues that the Panel cannot entertain claims based on Article VI independently
from the Anti-Dumping Agreement. In other words, the United States argues that the Panel has no
jurisdiction to review Japan's claims under either Article VI of the GATT 1994 or the Anti-Dumping
Agreement.
4. Relationship between Article VI of the GATT 1994 and the Anti-Dumping Agreement
(a) Issues before the Panel
6.80 We note that Japan, in its request for establishment of a panel, states that the 1916 Act
"is neither consistent with nor justified by the following relevant provisions:
[…]
(2) Article VI of GATT 1994 and the Anti-Dumping Agreement, and in
particular:
- Article VI:2 of GATT 1994 and Article 18:1 of the Anti-Dumping
Agreement which permit imposition of anti-dumping duties as the
only possible remedies for dumping;
- Articles 1, 2, 3, 4, 5, 9 and 11 of the Anti-Dumping Agreement
which stipulates necessary requirements for an anti-dumping duty to
be applied only under the circumstances provided for in Article VI of
GATT 1994."
472
6.81 In its first submission, Japan has concurrently invoked the violation of Article VI of the
GATT 1994 and of Articles 1, 2, 3, 4, 5, 9, 11 and 18.1 of the Anti-Dumping Agreement.
6.82 The United States has argued that, as demonstrated by the Appellate Body in Guatemala –
Cement, the only matter that may be challenged under the Anti-Dumping Agreement are the three
types of anti-dumping measures set forth in the Anti-Dumping Agreement (i.e. a definitive
anti-dumping duty, acceptance of a price undertaking, or a provisional measure). Similarly, in light of
the reasoning of the panel in Brazil – Measures Affecting Dessicated Coconut, which was affirmed by
the Appellate Body, the Panel has no jurisdiction to decide a claim under Article VI because that
article is not independently applicable to a dispute to which the Anti-Dumping Agreement is not
applicable.

471 See Appellate Body Report on Australia – Measures Affecting Importation of Salmon , adopted on
472 WT/DS162/3.

6.83 In our opinion, the fact that Japan has claimed a violation of Article VI in relation to a
violation of certain provisions of the Anti-Dumping Agreement would seem to imply that the Panel is
expected to make findings under both Article VI of the GATT 1994 and the Anti-Dumping
Agreement. In that context, the arguments of the parties require the Panel to address the following
issues:
(i) what is the actual scope of the "jurisdiction" of the Panel under the Anti-Dumping Agreement
and to what extent does that scope influence the Panel's "jurisdiction" under Article VI? And
(ii) what is the relationship between Article VI of the GATT 1994 and the Anti-Dumping
Agreement in terms of the respective application of those provisions and of the findings to be made
(including judicial economy)?
We will address these questions successively.
(b) Jurisdiction of the Panel under Article VI of the GATT 1994 and the Anti-Dumping
Agreement
6.84 We first consider the provisions of the Anti-Dumping Agreement relating to consultation and
dispute settlement. Paragraphs 1 to 4 of Article 17 provide as follows:
"17.1 Except as otherwise provided herei n, the Dispute Settlement Understanding is
applicable to consultations and the settlement of disputes under this Agreement.
17.2 Each Member shall afford sympathetic consideration to, and shall afford
adequate opportunity for consultation regarding, representations made by another
Member with respect to any matter affecting the operation of this Agreement.
17.3 If any Member considers that any benefit accruing to it, directly or indirectly,
under this Agreement is being nullified or im paired, or that the achievement of any
objective is being impeded, by another Memb er or Members, it may, with a view to
reaching a mutually satisfactory resolu tion of the matter, request in writing
consultations with the Member or Member s in question. Each Member shall afford
sympathetic consideration to any request from another Member for consultation.
17.4 If the Member that requested consultations considers that the consultations
pursuant to paragraph 3 have failed to achieve a mutually agreed solution, and if final
action has been taken by the administering authorities of the importing Member to
levy definitive anti-dumping duties or to accept price undertakings, it may refer the
matter to the Dispute Settlement Body ("DSB"). When a provisional measure has a
significant impact and the Member that re quested consultations considers that the
measure was taken contrary to the provisions of paragraph 1 of Article 7, that
Member may also refer such matter to the DSB."
6.85 We first note that Article 17 of the Anti-Dumping Agreement does not replace the DSU as a
coherent system of dispute settlement for that Agreement. 473 In this respect, the Appellate Body in
Guatemala – Cement explained that "the rules and procedures of the DSU […] apply to disputes
brought pursuant to the consultation and dispute settlement provisions contained in Article 17".474
6.86 We also note that nothing in the terms of either Article 17.2 or Article 17.3 limits the scope of
possible consultations under the Anti-Dumping Agreement. The Appellate Body in Guatemala –

473 Op. Cit., para. 67.
474 Ibid., para. 64.

Cement explained that Article 17.3 was not listed in as a special or additional provision in Appendix 2
of the DSU because "it provides legal basis for consultations to be requested by a complaining
member under the Anti-Dumping Agreement . Indeed, it is the equivalent provision in the
Anti-Dumping Agreement to Articles XXII and XXIII of the GATT 1994, which serves as the basis
for consultation and dispute settlement under the GATT 1994 [and] under most of the other
agreements in Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization ".
Thus, nothing in Articles 17.2 and 17.3 of the Anti-Dumping Agreement supports the view that
consultations are limited to circumstances where certain measures have been adopted by the Member
investigating dumping.
6.87 In our opinion, Article 17.4 deals with a pa rticular situation under the Anti-Dumping
Agreement, hence its status of a special or additional provision under the DSU. As stated by the
Appellate Body in Guatemala – Cement:
"We see the special or additional rules and procedures of a particular covered
agreement as fitting together with the generally applicable rules and procedures of the
DSU to form a comprehensive, integrated dispute settlement system for the WTO
Agreement. The special or additional provisions listed in Appendix 2 of the DSU are
designed to deal with the particularities of dispute settlement relating to obligations
arising under a specific covered agreement, while Article 1 of the DSU seeks to
establish an integrated and comprehensive dispute settlement system for all of the
covered agreements of the WTO Agreement as a whole. It is, therefore, only in the
specific circumstance where a provision of the DSU and a special or additional
provision of another covered agreement are mutually inconsistent that the special or
additional provision may be read to prevail over the provision of the DSU."
475
6.88 This paragraph illustrates the function of Article 17.4. Article 17.4 deals with the particular
question of challenging actions taken by anti-dumping authorities. However, there is nothing in that
provision expressly limiting the scope of applicat ion of the DSU except in relation to the specific
issue of Members' anti-dumping actions.
6.89 Our reading of Article 17.4 is not only confirmed by the immediate context of that provision,
i.e. Article 17.1, 17.2 and 17.3, but also by other provisions of the Anti-Dumping Agreement.
Article 18.4 provides that:
"Each Member shall take all necessary steps, of a general or particular character, to
ensure, no later than the date of entry in to force of the WTO Agreement for it, the
conformity of its laws, regulations and administrative procedures with the provisions
of this Agreement as they may apply for the Member in question."
We understand the term "to ensure, no later than the date of entry into force of the WTO Agreement"
in Article 18.4 of the Anti-Dumping Agreement as requiring the conformity of Members'
anti-dumping laws as of the date of entry into force of the WTO Agreement for those Members.
Moreover, a Member's anti-dumping legislation must be compatible with the WTO Agreement
continuously, whether that legislation is applied or not. If dispute settlement could be initiated in
relation to some specific anti-dumping action only, i.e. if the conformity of a domestic anti-dumping
law could only be reviewed when that law is applied, the provisions of Article 18.4 would be deprived
of their meaning and useful effect. A Member could maintain a WTO-incompatible law in total
impunity as long as none of the measures referred to in Article 17.4 is adopted. Even if, on the
occasion of a review of a particular action, the law on which the action was based could be found to
be WTO-incompatible, the interpretation advocated by the United States would still fail to give
meaning and legal effect to the terms of Article 18.4 and would be contrary to the principle of

475 Ibid., para. 66.

effectiveness.476 Moreover, Article 18.4 requires that all necessary steps , of a general or particular
nature, be taken by Members to ensure the conformity of their laws. These terms would be redundant
if the anti-dumping laws of Members only had to be WTO-consistent in specific instances of
application.
6.90 As could already be noticed from the previous paragraphs, the interpretation of Article 17 of
the Anti-Dumping Agreement by the Appellate Body confirms our view. The argument of the
United States is essentially based on an interpretation of paragraph 79 of the Appellate Body Report
in Guatemala – Cement taken out of its context.477 The facts at issue in the Guatemala – Cement case
were different from those before us. In that case, Mexico contested a specific investigation carried
out by Guatemala against imports of Portland cement from Mexico. If one reads the reasoning of the
Appellate Body in the factual context to which it pertains, it is not possible to draw the extensive
conclusion suggested by the United States. The specific scope of the findings in that case is
confirmed by the Appellate Body itself in the paragraph following the one quoted by the
United States:
"80. For all of these reasons, we conclude that the Panel erred in finding that
Mexico did not need to identify "specific measures at issue" in this dispute. We find
that in disputes under the Anti-Dumping Agreement relating to the initiation and
conduct of anti-dumping investigations, a definitive anti-dumping duty, the
acceptance of a price undertaking or a provisional measure must be identified as part
of the matter referred to the DSB pursuant to the provisions of Article 17.4 of the
Anti-Dumping Agreement and Article 6.2 of the DSU." (emphasis added)
Thus, the findings of the Appellate Body in Guatemala-Cement were limited to the taking of action in
situations contemplated in Article 17.4. They could not be – and actually were not - intended to
exclude the review of anti-dumping laws as such.
6.91 We therefore conclude that Article 17 of the Anti-Dumping Agreement does not prevent us
from reviewing the conformity of laws as such under the Anti-Dumping Agreement, irrespective of

476 See, e.g., Appellate Body Report on Argentina – Safeguard Measures on Import of Footwear ,
adopted on 12 January 2000, WT/DS121/AB/R, para. 88 and Appellate Body Report on United States –
Standards for Reformulated and Conventional Gasoline, adopted on 20 May 1996, WT/DS2/AB/R, page 23.
477 Paragraph 79 of the Appellate Body report in the Guatemala – Cement case referred to by the
United States reads as follows:
"79. Furthermore, Article 17.4 of the Anti-Dumping Agreement specifies the types of
"measure" which may be referred as part of a "matter" to the DSB. Three types of
anti-dumping measure are specified in Article 17.4: definitive anti-dumping duties, the
acceptance of price undertakings, and provisiona l measures. According to Article 17.4, a
"matter" may be referred to the DSB only if one of the relevant three anti-dumping measures is
in place. This provision, when read together with Article 6.2 of the DSU, requires a panel
request in a dispute brought under the Anti-Dumping Agreement to identify, as the specific
measure at issue, either a definitive anti-dumping duty, the acceptance of a price undertaking,
or a provisional measure. This requirement to identify a specific anti-dumping measure at
issue in a panel request in no way limits the nature of the claims that may be brought
concerning alleged nullification or impairment of benefits or the impeding of the achievement
of any objective in a dispute under the Anti-Dumping Agreement . As we have observed
earlier, there is a difference between the specific measures at issue -- in the case of the
Anti-Dumping Agreement , one of the three types of anti-dumping measure described in
Article 17.4 -- and the claims or the legal basis of the complaint referred to the DSB relating
to those specific measures. In coming to this conclusion, we note that the language of
Article 17.4 of the Anti-Dumping Agreement is unique to that Agreement."

whether the measures referred to in Article 17.4 have been adopted or not. The same applies,
a fortiori, with respect to Article VI of the GATT 1994. In that respect, we consider that the findings
of the panel and the Appellate Body in Brazil – Desiccated Coconut referred to by the United States
are not applicable to this case, since those findings dealt with the question of the non-applicability of
the Agreement on Subsidies and Countervailing Measures to existing measures or investigations
initiated pursuant to applications made before the entry into force of that Agreement.
478
(c) Relationship between Article VI of the GATT 1994 and the Anti-Dumping Agreement
6.92 Regarding the relationship between Article VI and the Anti-Dumping Agreement and, in
particular, the question whether we could make findings regarding Article VI independently from the
Anti-Dumping Agreement, we note that the issue addressed by the panel and the Appellate Body in
Brazil - Desiccated Coconut , to which the United States refers, must be differentiated from the one
before us. In Brazil - Desiccated Coconut , the question was one of application of Article VI of the
GATT when the WTO Agreement on Subsidies and Countervailing Measures did not apply. In the
present case, the issue is whether the Panel can make findings in relation to Article VI only or whether
the link between Article VI and the Anti-Dumping Agreement is such as to make impossible a finding
under Article VI only.
6.93 We note that the panel in the India – Quantitative Restrictions on Imports of Agricultural,
Textile and Industrial Products
479 case did not make findings under Article XVIII:11 of the
GATT 1994 in isolation from the Understanding on Balance-of-Payments Provisions of the
GATT 1994. Likewise, we have no intention to address Article VI in isolation from the
Anti-Dumping Agreement. In the present case, the complainant has made claims based on the
violation of provisions of Article VI and the Anti-Dumping Agreement. In our opinion, if the panel in
Brazil - Desiccated Coconut confirmed that Article VI and the Agreement on Subsidies and
Countervailing Measures were an "inseparable package of rights and obligations", this is because the
solution proposed by the complainant would have led to apply Article VI in total disregard of the
Agreement on Subsidies and Countervailing Measures. Such a solution cannot even be considered in
our case. Article VI and the Anti-Dumping Agreement are part of the same treaty: the
WTO Agreement. In application of the customary rules of interpretation of international law, we are
bound to interpret Article VI of the GATT 1994 as part of the WTO Agreement and, pursuant to
Article 31 of the Vienna Convention,
480 the Anti-Dumping Agreement forms part of the context of
Article VI. This implies that we must look at Article VI and the Anti-Dumping Agreement as part of
an "inseparable package of rights and obligations" and that Article VI should not be interpreted in a
way that would deprive either Article VI or the Anti-Dumping Agreement of meaning.
481 However,
this obligation does not prevent us from making findings in relation to Article VI only, as the panel
did in its report on India – Quantitative Restrictions.

478 See Article 32.3 of the Agreement on Subsidies and Countervailing Measures.
479 Adopted on 22 September 1999, WT/DS90/R (hereinafter " India – Quantitative Restrictions "),
paras. 5.18-5.19. These findings were not modified by the Appellate Body.
480 We recall that the official title of the Anti-Dumping Agreement is "Agreement on Implementation
of Article VI of the General Agreement on Tariffs and Trade 1994". This agreement is essential for the
interpretation of Article VI. Articles 1 and 18.1 of the Anti-Dumping Agreement confirm the close link between
Article VI and the Anti-Dumping Agreement. Moreover, as was recalled by the Appellate Body in the case on
Brazil - Desiccated Coconut , the WTO Agreement is a single treaty instrument which was accepted by the
WTO Members as a single undertaking. As a result, the Anti-Dumping Agreement is part of the context of
Article VI since Article 31.2 of the Vienna Convention provides that "the context for the purpose of the
interpretation of a treaty shall comprise, […] the text, including its preamble and annexes…". We are therefore
not only entitled to consider the Anti-Dumping Agreement, but we are also required to do so under the general
principles of interpretation of public international law.
481 See, also, Argentina – Safeguards, Op. Cit., paras. 74 and 81-83.

6.94 We conclude that we can make findings under Article VI without, at the same time, having to
make findings under the provisions of the Anti-Dumping Agreement, and vice-versa. However, the
fact that Article VI and the Anti-Dumping Agreement represent an inseparable package of rights and
disciplines requires that we interpret each of the provisions invoked by Japan in its claims in
conjunction with the other relevant provisions of this "inseparable package", so as to give meaning to
all of them.
C. A
PPLICABILITY OF ARTICLE VI OF THE GATT 1994 AND OF THE ANTI-DUMPING AGREEMENT
TO THE 1916 ACT
1. Preliminary remarks on the possibilit y of interpreting the 1916 Act in a
WTO-compatible manner and on its "mandatory/non-mandatory" nature
(a) Issue before the Panel
6.95 The United States argues that if the complaining party is challenging a law as such, the first
question for the Panel is whether that law is mandatory or discretionary. The United States contends
that the 1916 Act is non-mandatory legislation within the meaning of the GATT1947/WTO practice
essentially because (i) with respect to both civil and criminal proceedings, there is a possibility for US
courts to interpret the provisions of the 1916 Act in a manner consistent with the WTO obligations of
the United States - as evidenced by court decisions so far - and (ii) the US Department of Justice has
discretion to initiate or not criminal proceedings under the 1916 Act.
482 Japan considers that the
1916 Act is mandatory legislation because it is not susceptible of a range of meanings but rather
mandates the imposition of sanctions. Japan adds that panels have consistently ruled that laws that
mandate GATT/WTO-inconsistent actions can be challenged as such. Japan also considers that the
obligation set out in Article XVI:4 of the Agreement Establishing the WTO "to ensure the [WTO]
conformity of […] laws, regulations and administrative procedures" should apply in the present
dispute, rather than the mandatory/non-mandatory dichotomy.
6.96 For the reasons presented below, we shall address these arguments as part of our review of the
claims raised by Japan under Article VI of the GATT 1994 and the Anti-Dumping Agreement and, if
necessary, Article III:4 of the GATT 1994, rather than as a question of admissibility of the claims of
Japan.
 483
6.97 As a preliminary remark, it should be noted that, even though the parties have used the terms
"mandatory/non-mandatory" or "discretionary" legislation in their arguments with respect to different
aspects of the 1916 Act, we consider that we should differentiate the issues before us. We consider
that the question whether the US Department of Justice has discretion to initiate or not criminal
proceedings under the 1916 Act is indeed a question of application of the doctrine on
mandatory/non-mandatory legislation within the meaning usually given to it in the GATT and in

482 The United States does not seem to allege that a similar discretion exists in relation to the civil
proceedings which would make the 1916 Act non-mandatory.
483 Such an approach is also consistent with the practice of other panels, which addressed this issue in
the course of their review of the conformity of measures with provisions of the GATT 1947. See United States
– Measures Affecting the Importation, Internal Sale and Use of Tobacco , adopted on 4 October 1994,
BISD 41S/131, para. 118. That report refers to the Report of the Panel on United States – Taxes on Petroleum
and certain Imported Substances , adopted on 17 June 1987, BISD 34S/136, p. 160; the Report of the Panel on
EEC – Regulation on Imports of Parts and Components , Op. Cit., pp. 198-199; the Report of the Panel on
Thailand, Restrictions on Importation of and Internal Taxes on Cigarettes , adopted on 7 November 1990,
BISD 37S/200 pp. 227-228; the Report of the Panel on United States – Measures Affecting Alcoholic and Malt
Beverages, adopted on 19 June 1992, BISD 39S/206, pp. 281-282, 289-290; and the Report of the Panel on
United States – Denial of MFN Treatment as to Non-Rubber Footwear from Brazil , adopted on 19 June 1992,
BISD 39S/128, p. 152. See also, under the WTO Agreement, the report of the panel on Canada – Measures
Affecting the Export of Civilian Aircraft, adopted on 20 August 1999, WT/DS70/R, para. 9.124.

public international law. The question whether the 1916 Act could be, or has been, interpreted in a
way that would make it fall outside the scope of Article VI is, however, simply a question of assessing
the current meaning of the law.
(b) The possibility of interpreting the 1916 Act in a WTO-compatible manner
6.98 Concerning the argument according to which US courts have interpreted in the past and/or
could in the future interpret the 1916 Act in a ma nner consistent with the WTO obligations of the
United States, the United States refers to the panel report on United States – Measures Affecting the
Importation, Internal Sale and Use of Tobacco484 as being the case whose facts most closely resemble
the present case. For the United States also, there is a presumption that if a law is susceptible to an
interpretation that is WTO consistent, domestic authorities will interpret that law so as to avoid a
conflict with WTO obligations. This presumption may be seen as underlying the finding of the Panel
in United States – Tobacco that a domestic law susceptible of multiple interpretations would not
violate a party's international obligations so long as one possible interpretation permits action
consistent with those obligations.
6.99 In our opinion, the United States refers to United States - Tobacco for essentially two reasons.
First, the United States argues that a law which can be interpreted in a WTO-consistent manner is a
law that does not mandate a WTO-illegal action. Second, the United States claims that, for Japan's
challenge to succeed, Japan must demonstrate not only that the 1916 Act authorises
WTO-inconsistent action, but that it mandates such action. In other words, it must show that this
legislation is not susceptible to an interpretation that would permit the US government to comply with
its obligations.
6.100 The issue in this case is primarily, like in the United States – Tobacco case, a question
whether the text of a law contains ambiguities or not. However, in our opinion, similarities are limited
to that aspect. In the United States – Tobacco case, the panel had to deal with the question whether
the ambiguous term at issue mandated a violation of Article VIII of GATT 1947. In the present case,
what is at issue is whether the terms of the 1916 Act are such as to make Article VI applicable to that
law. We are consequently at an earlier stage of our analysis than the panel in the United States –
Tobacco case. Moreover, in the United States – Tobacco case, the United States had as yet neither
changed the fee structure nor promulgated rules implementing the law at issue. In the present case, the
1916 Act did not require any implementing measures from the US government and, contrary to the
law at issue in the United States – Tobacco case, it has been applied in a number of instances by
US courts. Consequently, the situations faced by this Panel and the panel in the United States –
Tobacco case are factually different.
6.101 These differences have implications for the burden of proof. In the United States – Tobacco
case, the extensive burden of proof imposed on the complainants was obviously related to the absence
of any application of the ambiguous term by the executive branch of the US government at the time of
the findings. The United States had until then applied its law in conformity with Article VIII of the
GATT 1947 and there was no evidence that the United States intended to apply the law in a
GATT-incompatible manner. Therefore, imposing on the complainants the burden to prove that the
US law at issue could not be applied in a GATT-consistent manner was consistent with the
presumption that the United States would continue to apply the GATT in good faith.
6.102 In contrast, several courts have interpreted and applied the 1916 Act. In fact, reaching a
decision on the US argument requires the Panel to determine whether the interpretation of the
1916 Act by US courts has been such as to actually make the 1916 Act WTO-compatible by making it
fall outside the scope of Article VI of the GATT 1994 and the Anti-Dumping Agreement. In such a
context, Japan only needs to prove that the 1916 Act, as it has been interpreted and applied so far by

484 Op. Cit., hereinafter "United States – Tobacco".

US courts, meets the conditions to fall within the scope of Article VI and the Anti-Dumping
Agreement. If Japan succeeds in proving this, we will proceed with a review of the compatibility of
the 1916 Act with Article VI and the Anti-Dumping Agreement.
6.103 The question whether there could be a possibility to interpret the 1916 Act in the future so
that it would fall outside the scope of Article VI would be relevant, according to the United States –
Tobacco case, only if the 1916 Act had not yet been applied. Since the 1916 Act has actually been
applied and has been subject to interpretation by US courts, the issue before us is (i) whether
Article VI and the Anti-Dumping Agreement are found to be applicable to the 1916 Act on the basis
of the current court interpretation of the terms of the 1916 Act and (ii) whether a violation of
Article VI and/or the Anti-Dumping Agreement by the 1916 Act as currently applied, is identified.
6.104 Even if the factual circumstances in the present case and in the United States – Tobacco case
were considered to be comparable, we recall that, in United States – Tobacco, a crucial element in the
finding of the panel had been the presence of an ambiguity in the text of the law under review. In that
case, the term "comparable" could be interpreted in GATT-compatible as well as in
GATT-incompatible ways. Assuming that the reasoning of the panel in the United States – Tobacco
case could be extended to the present situation in spite of the differences highlighted above, if we find
that no such ambiguity exists regarding the applicability of Article VI to the text of the 1916 Act itself
or as interpreted by the US courts, (i) the burden of proof which the United States alleges was applied
in the US - Tobacco case will not apply in this case and (ii) we will conclude that the 1916 Act falls
within the scope of Article VI of the GATT 1994 and the Anti-Dumping Agreement and will address
its compatibility with these provisions as we would for any other legislation.485
(c) Mandatory/non-mandatory nature of the 1916 Act
6.105 The United States argues that, in relation to the criminal proceedings provided for in the
1916 Act, the US Department of Justice has the discretion to decide whether or not to bring a criminal
prosecution. In other words, while the 1916 Act au thorises the Department of Justice to bring a
criminal prosecution, it does not mandate it. Japan is of the view that the obligation set out in
Article XVI:4 of the Agreement Establishing the WTO and Article 18.4 of the Anti-Dumping
Agreement should apply in the present dispute, rather than the mandatory/non-mandatory dichotomy
drawn from GATT 1947 practice.
6.106 We note that the terms of Article 18.4 of the Anti-Dumping Agreement require that Members
bring their laws into conformity with the Anti-Dumping Agreement at the time of the entry into force
of that agreement for them. This requirement seems to contradict the concept of mandatory/non-
mandatory legislation, which does not require laws as such to be compatible, but only instances of
application.
486 We recall that Article 16.6(a) of the Tokyo Round Agreement on Implementation of
Article VI of GATT 487 contained provisions almost identical to Article 18.4 of the Anti-Dumping
Agreement. We also note that, in relation to Article 16.6(a) or its equivalent under the Tokyo Round

485 If we conclude that the 1916 Ac t falls within the scope of Article VI, we will not need to take
position on the issue whether, in light of Article XVI:4 of the Agreement Establishing the WTO, the reasoning
in the United States – Tobacco report, which was adopted under the GATT 1947, would still be valid after the
entry into force of the WTO Agreement.
486 We recall that the panel on United States – Section 301-310 of the Trade Act of 1974 , adopted on
20 January 2000, WT/DS152/R, claimed that its findings did not require the wholesale reversing of earlier
GATT and WTO jurisprudence on mandatory and discretionary legislation (see paragraph 7.54 and
footnote 675). We nevertheless understand that the reasoning of the panel in that case was apparently based on
the fact that Article 23 of the DSU may prohibit legislation with certain discretionary elements and therefore the
very fact of having in the legislation such discretion could, in effect, preclude WTO consistency. We note that
Article 18.4 of the Anti-Dumping Agreement may have a similar effect.
487 Hereinafter the "Tokyo Round Anti-Dumping Agreement".

Agreement on Interpretation and Application of Articles VI, XVI and XXIII of GATT, 488 past panels
found that a countervailing duty law a such could be reviewed by a panel and that the discretion to
initiate an investigation was insufficient to cons ider as "non-mandatory" a law reviewed under those
agreements. 489
6.107 From the above, it would seem to us that the issue of the "mandatory/non-mandatory" nature
of a law has apparently been addressed differently under Article VI of the GATT 1947 and the Tokyo
Round anti-dumping and subsidies agreements than under Article III of the GATT 1947 and the other
GATT 1947 provisions referred to by the United States. In order to avoid making unnecessary
findings, we consider it appropriate to address this issue once we have determined whether the
1916 Act falls within the scope of Article VI and the Anti-Dumping Agreement or not, a
determination to be made in any event for the reasons mentioned in the previous paragraphs.
2. Does the 1916 Act fall within the scope of Article VI of the GATT 1994 and the
Anti-Dumping Agreement?
(a) Preliminary remarks
(i) Scope of Article VI of the GATT 1994 and scope of the Anti-Dumping Agreement
6.108 A first methodological question to be clarified from the outset is how we should approach the
compatibility of the 1916 Act with Article VI and with the Anti-Dumping Agreement, respectively. In
this respect, we note that Article 1.1 of the Anti-Dumping Agreement establishes a link between
Article VI and the Anti-Dumping Agreement:
"An anti-dumping measure shall be applied only under the circumstances provided
for in Article VI of GATT 1994 and pursuant to investigations initiated [footnote 1
omitted] and conducted in accordance with the provisions of this Agreement."
Article 18.1 of the Anti-Dumping Agreement also confirms this link:
"No specific action against dumping of exports from another Member can be taken
except in accordance with the provisions of GATT 1994, as interpreted by this
Agreement.[footnote 24]"
490
We also recall our consideration of the relationship between Article VI and the Anti-Dumping
Agreement in section VI.B.4.(c) above. We conc luded that Article VI and the Anti-Dumping
Agreement are one "single package of rights and obligations". We are of the view that if we find that
the 1916 Act falls within the scope of the provisions of Article VI of the GATT 1994 dealing with
dumping, it also must fall within the scope of the Anti-Dumping Agreement. As a result, we will

488 Hereinafter the "Tokyo Round Subsidies Agreement".
489 See Panel on United States Definition of Industry Concerning Wine And Grape Products , adopted
on 28 April 1992, BISD 39S/436 (hereinafter " United States – Definition of Wine Industry ") and the report of
the panel on EC – Anti-Dumping Duties on Audio Tapes in Cassettes Originating in Japan , ADP 136, 28 April
1995 (hereinafter "EC – Audio Cassettes"). The latter was not adopted. However, we recall that in its report on
Japan – Taxes on Alcoholic Beverages , adopted on 1 November 1996, WT/DS8; 10; 11/AB/R, p. 15, the
Appellate Body confirmed that "a panel could nevertheless find useful guidance in the reasoning of an
unadopted panel report that it considered to be relevant." Therefore, we will refer to the reasoning of the panel
in EC – Audio-Cassettes as guidance to our own reasoning.
490 Footnote 24 to Article 18.1 reads as follows:
"This is not intended to preclude action under other relevant provisions of GATT 1994, as
appropriate."

consider primarily whether the 1916 Act falls within the scope of the provisions on anti-dumping of
Article VI, bearing in mind the terms of the Anti-Dumping Agreement and the extent to which they
may influence the interpretation of Article VI.
(ii) Approach of the Panel to the question of the definition of the scope of Article VI of
GATT 1994 in relation to the 1916 Act
6.109 According to Japan, Article VI of GATT 1994 and the Anti-Dumping Agreement address
international price discrimination where prices in the importing market are lower than prices in the
exporting market. When these conditions giving rise to this type of price discrimination are met, a
law, whatever it may be called, is an anti-dumping measure and must conform to Article VI of
GATT 1994 and the Anti-Dumping Agreement. Japan considers that the terms of the 1916 Act are
unambiguous. The conduct targeted by the 1916 Act is the same as "dumping" as defined in
Article VI and the Anti-Dumping Agreement and the addition of qualifying elements on the core
features of the law does not alter the fundamental nature of the 1916 Act as an anti-dumping law.
6.110 The United States considers that Article VI only addresses actions taken for the purpose of
offsetting or preventing injurious dumping, not actions that are not designed to offset or prevent
injurious dumping, as is the case with the 1916 Act. Nowhere does the text of Article VI or the
Anti-Dumping Agreement state that its disciplines govern any law based upon the concept of
international price discrimination regardless of any other elements required to be proven under the
law. The 1916 Act addresses a specific form of price discrimination with predatory intent. Moreover,
the 1916 Act imposes damages on importers, not a border adjustment in the form of a duty on
imported products. The nature of the measure imposed in application of the law removes any doubt
that the 1916 Act is an "internal law" subject only to Article III of GATT 1994.
6.111 We note that the views of the parties are diametrically opposed as to the criteria that should be
used to determine the applicability of Article VI of the GATT 1994 to the 1916 Act. Japan favours a
broad interpretation of Article VI based on the definition of dumping found in Article VI:1. The
United States favours a narrow interpretation: Article VI applies only when a Member wishes to
address dumping practices through anti-dumping duties.
6.112 First, the Panel considers that its role, pursuant to Article 3.2 of the DSU, is to clarify the
meaning of Article VI in order to determine whether it applies, as claimed by Japan, to the type of
measures addressed by the 1916 Act. For the sake of clarity, we consider that we should first address
the applicability of Article VI to the terms of the 1916 Act as such, in isolation from subsequent
interpretation(s). We will then review the circumstances of the enactment of the 1916 Act (including
the legislative history) as well as the relevant US court case-law and determine to what extent they
may affect the conclusions that we will have reached on the basis of the text only.
491
6.113 Second, we note that we are called upon to consider the compatibility of a specific law with
Article VI of GATT 1994, not to make an interpretation of the scope of that Article in absolute terms.

491 As recalled in paragraph 6.58 above, the mere description or categorization of a measure under the
domestic law as well as the policy purpose behind the measure cannot be a decisive factor in the categorization
of that measure under the WTO Agreement. We therefore do not consider as decisive the classification of the
1916 Act under the US Code or the fact that it is generally called the "Antidumping Act of 1916". We consider
that we should exclusively rely at this stage on what the text of the law expressly says. This does not mean that
we should disregard the objective of the 1916 Act. However, for now we will consider it only to the extent that
it results from the terms of the law only, to the exclusion of the legislative history or the subsequent court
practice, which we will address later. This also se ems to be consistent with US court practice. In Zenith I
(1975), Op. Cit ., at p. 246, Judge Higginbotham stated that "as always, when a court is called to construe a
statute, it is wise to begin by reading the statute itself."

Thus, any assessment we may make regarding the scope of Article VI will be limited to the specific
issues raised by the terms of the 1916 Act.
6.114 Third, in the light of the arguments of the parties and of the above-mentioned comment, we
note that the determination of the scope of Article VI vis-à-vis the 1916 Act requires that we reply to
the following questions:
(i) Does the 1916 Act address the same type of price differentiation as Article VI?
(ii) If this is the case, is the type of "effects" targeted by the 1916 Act (i.e. "intent of destroying
or injuring an industry in the United States, or of preventing the establishment of an industry in the
United States, or of restraining or monopolizing any part of trade and commerce in such articles in the
United States") relevant to determining whether the 1916 Act falls within the scope of Article VI?
And;
(iii) is the type of measures imposed under the 1916 Act relevant to determining whether the
1916 Act falls within the scope of Article VI?
492
(b) Analysis of the text of the 1916 Act in light of Article VI:1 of the GATT 1994
(i) Does the 1916 Act address the same type of price discrimination as Article VI of the
GATT 1994?
6.115 Article VI:1 provides, in relevant parts, as follows:
"The contracting parties recognize that dumping, by which products of one country
are introduced into the commerce of another country at less than the normal value of
the products, is to be condemned if it causes or threatens material injury to an
established industry in the territory of a contracting party or materially retards the
establishment of a domestic industry. For the purpose of this article, a product is to
be considered as being introduced into the commerce of an importing country at less
than its normal value, if the price of the product exported from one country to another
(a) is less than the comparable price, in the ordinary course of trade, for the like
product when destined for consumption in the exporting country, or,
(b) in the absence of such domestic price, is less than either
(i) the highest comparable price for the like product for export to any
third country in the ordinary course of trade, or
(ii) the cost of production of the product in the country of origin plus a
reasonable addition for selling cost and profit.
Due allowance shall be made in each case for differences in conditions and terms of
sale, for differences in taxation, and for other differences affecting price
comparability." [notes Ad Article VI:1 omitted]
6.116 We note that, for measures to be applied under Article VI, three conditions have to be met:
there must be (a) "dumping", i.e. the pricing practice at the origin of the application of Article VI; (b)
material injury or threat of material injury to an established domestic industry or material retardation

492 This question is different from the issue whether anti-dumping duties are the only remedy allowed
under Article VI. This issue is addressed in the section concerning the violation of Article VI:2.

of the establishment of a domestic industry, i.e. the effect of the dumping; and (c) a causal link
between the two. Article VI and the Anti-Dumping Agreement clearly separate these conditions.
6.117 Article VI:1 defines "dumping" as the introduction of products of one country into the
commerce of another country at less than their normal value. 493 Apart from an additional explanation
of how to determine normal value, 494 this definition of "dumping" is not qualified anywhere in
Article VI.495 The conditions for "dumping" to exist are the following:
(i) there must be products imported and cleared through customs ("introduction into the
commerce"); and
(ii) those imported products must be priced at a price lower than their normal value, i.e. their
price in a foreign country, be it the country of production or another country of export, or a
constructed value based on a calculation of cost and profits.
In other words, dumping within the meaning of Article VI exists when there is a price difference
between like products sold in two markets, one of which is not within the jurisdiction of the same
Member. In addition, the price of the products in the country of exportation must be lower than the
price of the like products in the country of production or in a third country to which they are
exported.
496
6.118 Neither the context of the first paragraph of Article VI, nor the object and purpose of the
GATT 1994 or the WTO Agreement contradicts this assessment. On the contrary, Article VI:1(a) and
(b) confirm that no qualification applies to the definition of the price difference requirement. There is
no requirement that the export price be above or below fixed or variable costs or that price
undercutting, price suppression or price depression be identified for "dumping" to exist, even though
they may be considered for injury purposes. In other words, dumping exist as soon as there is a price
difference, as small as it may be, subject to the de minimis provisions of the Anti-Dumping
Agreement.
6.119 When considering the terms of the 1916 Act, we note that it also contains a price
discrimination test:
"It shall be unlawful for any person importing or assisting in importing any articles
from any foreign country into the United States, commonly and systematically to
import, sell or cause to be imported or sold such articles within the United States at a
price substantially less than the actual market value or wholesale price of such
articles, at the time of exportation to the United States, in the principal markets of the
country of their production, or of other foreign countries to which they are commonly

493 We note that this definition is close to the definition of dumping given by Jacob Viner in Dumping,
A Problem in International Trade (1923), p. 3, i.e. "price-discrimination between national markets." The court in
Zenith III, Op. Cit. , p. 1213, refers to the 1966 edition which includes, at p. 4, a slightly revised definition:
"price discrimination between purchasers in different national markets."
494 We do not read the language "For the purpose of this article, a product is to be considered as being
introduced into the commerce of an importing country at less than its normal value, if the price of the product
exported from one country to another…" as qualifying anything but the term "normal value".
495 See Article VI:2, second sentence, which provides that "For the purposes of this Article, the margin
of dumping is the price difference determined in accordance with the provisions of paragraph 1." Additional
conditions have been introduced in the Anti-Dumping Agreement, such as the de minimis requirement for the
margin of dumping (Article 5.8 of the Anti-Dumping Agreement) but they do not affect the original definition to
such an extent that they would change our conclusions.
496 The existence of a price difference between two markets located in two different Members , together
with a lower price in the importing country that in the country of export, are essential features to differentiate
dumping from other forms of price discrimination and pricing practices. See, e.g., Viner, Op. Cit., pp. 2-3.

exported after adding to such market value or wholesale price, freight, duty, and other
charges and expenses necessarily incident to the importation and sale thereof in the
United States…" (emphasis added)
This test includes requirements similar to the requirement of Article VI (i.e., the introduction of the
dumped product into the commerce of one Member) since it refers to "import or sell or cause to be
imported or sold […] within the United States". We further note that the 1916 Act is premised on a
comparison between two prices, one in the United States, the other in the country of production of the
product or in a third country where the product is also sold. There is consequently a very close
similarity between the definition of dumping in Article VI and the transnational price discrimination
test found in the 1916 Act.
6.120 The United States argues that the 1916 Act has additional requirements compared with
Article VI. In the first place, the 1916 Act requires the price difference to be "substantial" and the
importation and sales to be done "commonly and systematically". Secondly, the 1916 Act includes
additional requirements that are not found in Article VI, which make it an instrument addressing
specific forms of price discrimination in an anti-trust context.
6.121 We do not consider that conditions which make the establishment of dumping more difficult,
such as the requirement of substantial price difference and of common and systematic dumping are
such as to make the price discrimination test of the 1916 Act fall outside the scope of the definition of
Article VI:1. The fact that additional requirements make a finding of dumping more difficult does not
affect the applicability of Article VI as long as the test of the 1916 Act requires a price difference
between two markets, each located in the territory of a different Member. Members remain free to
apply requirements which make the imposition of measures more difficult, but they may not exempt
themselves from the rules and disciplines of the WTO Agreement when counteracting dumping as
such.
6.122 This said, would there be other elements in the text of the 1916 Act that would lead us to
conclude that the transnational price discrimination test in the 1916 Act nevertheless does not meet
the definition of dumping in Article VI? We note that the 1916 Act relies not only on the actual
market value but also on wholesale price. We consider that the meaning of the terms "comparable
price, in the ordinary course of trade, for the like product when destined for consumption in the
exporting country" found in Article VI:1(a) is broad enough to include the phrase "principal markets
of the country of […] production [of the imported merchandise]" or of "other foreign countries to
which they are commonly exported". The 1916 Act also refers to sales on the "principal markets" of
"other foreign countries to which they are commonly exported". This may not be the "highest
comparable price for the like product for export to any third country in the ordinary course of trade"
found in Article VI:1(b) but, once again, the criteria of Article VI:1 are sufficiently broad to
encompass such sales. Moreover, the criteria used in the 1916 Act do not refer to other concepts that
could be differentiated from those found in Article VI:1. Finally, we note that the 1916 Act does not
refer to the possibility to use a "constructed" normal value, within the meaning of Article VI:1(b)(ii).
However, this only makes the transnational price discrimination test in the 1916 Act "narrower" than
the definition of "dumping" in Article VI:1. It does not make it fall outside the scope of that article.
We also note that the 1916 Act provides for adjustments. Even though these adjustments are not those
found in the last sub-paragraph of Article VI:1, they do not affect the scope of the price discrimination
test in the 1916 Act in relation to Article VI. On the contrary, they confirm the similarity of the two
texts as far as the identification of the pricing practice at issue is concerned.
6.123 This does not mean that the criteria for establishing price discrimination under the 1916 Act
would always be compatible with the requirements of Article VI of the GATT 1994. This means only
that we do not find in these criteria anything that would make us consider that the 1916 Act

transnational price discrimination test would partly or totally fall outside the definition of dumping
found in Article VI:1.
6.124 The United States argues that the Panel's description of the 1916 Act price discrimination test
(i.e. "commonly and systematically to import, sell or cause to be imported or sold such articles within
the United States at a price substantially less than the actual market value or wholesale price of such
articles") is incomplete. The 1916 Act addresses a particular type of price discrimination, namely,
predatory pricing. For this reason, the price discrimination test in the 1916 Act includes not just the
language quoted by the Panel, but also the additional language describing the predatory intent that is
required to be shown.
497
6.125 We understand the US argument as meaning that price discrimination for anti-dumping
purposes is of a different nature than price discrimination for anti-trust purposes. We noted above that
Article VI differentiates between the pricing practice ("dumping") and its effects (material injury). We
note that the Anti-Dumping Agreement confirms this differentiation by addressing dumping and
injury in two separate provisions (Articles 2 and 3). We also look at the 1916 Act as requiring two
separate inquiries, the second one qualifying the results of the first. The first one deals with the
identification of a transnational price difference in the form of a lower price on the US market than in
the exporting country or a third country of export. The second one deals with the identification of an
intent to affect in some ways a US industry or US commerce. However, even if this "intent" were to
imply the finding of a certain type of pricing practice on the US market, it would not affect the basic
requirement of a price difference between two markets, one located in the United States and one in the
exporting country or a third country of export. As noted, this basic requirement is identical to that of
Article VI:1.
6.126 Similarly, the United States considers that the prices to be considered under the 1916 Act are
not the same as those considered under Article VI and the Anti-Dumping Agreement. The 1916 Act
provides that the US import price is the price at which the product at issue is imported or sold within
the United States. In contrast, the US import price found in the Article VI definition of dumping, as
further described in Article 2 of the Anti-Dumping Agreement, is normally the price in the
United States that is "made at the same level of tr ade, normally at the ex-factory level, and in respect
of sales made at as nearly as possible the same time" as the price in the exporting country or third
country used to establish the normal value , with due allowances made for price comparability
purposes. The foreign price under the 1916 Act is similar to, but nevertheless different from, the
foreign price found in the Article VI definition of dumping, as further described in Article 2 of the
Anti-Dumping Agreement.
6.127 We note that the terms of Article VI are sufficiently broad to include the types of prices used
in the 1916 Act. We also recall our reasoning in paragraph 6.125 above. There is nothing in the types
of prices referred to in the 1916 Act that would be of such a nature that they would be specific to
anti-trust, to the exclusion of anti-dumping. On the contrary, the type of prices on which the 1916 Act
is based meets the criteria of "normal value" and "export price" within the meaning of Article VI and
the Anti-Dumping Agreement. The differences, far from making the 1916 Act fall outside the scope
of Article VI, should rather be seen as violations of the requirements of the Anti-Dumping
Agreement.
6.128 We therefore conclude that the 1916 Act addresses the same type of price discrimination as
Article VI of the GATT 1994.

497 We note that this additional language corresponds to what the Panel has described as the "intent"
test under the 1916 Act.

(ii) Is the type of "effects" targeted by the 1916 Act relevant to determining whether the 1916 Act
falls within the scope of Article VI of the GATT 1994?
6.129 We note that Article VI:1, first sentence, provides that dumping is to be condemned "if it
causes or threatens" material injury. Taken in accordance with their ordinary meaning, the terms of
the first sentence of Article VI:1 mean that, even though the condition for action against dumping by a
Member is the existence of some injury, the prerequisite for such action is the presence of "dumping"
as defined in that sentence.
6.130 We recall that the price discrimination addressed by the 1916 Act must be done with the
intent of (a) "destroying" or (b) "injuring an indust ry in the United States", or of (c) "preventing the
establishment of an industry in the United States", or of (d) "restraining" or (e) "monopolizing any
part of trade and commerce [in the goods concerned] in the United States." We note that the first
three tests are very similar to the material injury and retardation tests of Article VI:1, while the two
last ones are more of the type used in an anti-trust context
498 and thus clearly different from the
requirement of material injury of Article VI:1. However, we found above that the existence of
"dumping" within the meaning of Article VI:1 is a condition sine qua non for a Member to take
action under Article VI. Likewise, it is our understanding from the US case-law that, before
identifying any intent under the 1916 Act, US judges would also have to establish that there has been
importation or that there has been sales at discriminatory prices of the type required by that law. 499
Moreover, we have been presented with no evidence that transnational price discrimination under the
1916 Act could be presumed when the court had only established the existence of an intent to destroy,
injure or prevent the establishment of an industry in the United States, or to restrain or monopolise
any part of the trade in the product concerned within the United States. Therefore, we conclude that
the existence in the 1916 Act of the additional requirements referred to by the United States, which
are not found in Article VI, does not per se suffice to make the 1916 Act fall outside the scope of
Article VI.
6.131 Moreover, we recall that dumping "is to be condemned if it causes or threatens" to cause
certain effects listed in Article VI:1. We consider that Article VI:1 should be interpreted as limiting
the use of measures against dumping as such to the situations expressly foreseen in Article VI.
500 The
implicit meaning of Article VI:1, first sentence, is that if dumping has none of the injurious effects
contemplated by that Article, it is not to be "condemned". We note in this respect that the terms of
Article VI:1, first sentence, are quite broad. If, as the United States argues, Article VI:1 had been
designed merely as a carve-out to the obligations of Article II of the GATT 1994, applicable only
when a Member wishes to impose anti-dumping duties, the term "is to be condemned" would not have

498 See the Robinson-Patman Act, which provides that the "effect of such discrimination may be
substantially to lessen competition or tend to create a mo nopoly in any line of commerce, or to injure, destroy,
or prevent competition with any person who either grants or knowingly receives the benefit of such
discrimination or with customers of either of them."
499 See the statement of the court in In Re Japanese Electronic Products II (1983), at p. 324, that:
"The first element necessary to a finding of dumping under the 1916 Act is proof that a price
differential exists between two comparable products, one of which is imported or sold in the
United States and the other of which is sold in the exporting country."
See also Helmac II (1993), p. 591,which recognised that "dumping: the pricing of goods on the
American market at a price lower than on the home market" was "the key to liability under the [1916] Act".
500 That such a limitation was clearly envisaged by the drafters of Article VI is confirmed by the Report
of the Sub-Committee at the Havana Conference. The Sub-Committee considered the provision which was to
replace the original Article VI in the GATT 1947 and noted that "The Article as agreed to by the Sub-
Committee condemns injurious 'price dumping' as defined therein and does not relate to other types of
dumping." (emphasis added) (Havana Reports, p. 74, para. 23, as reported in GATT, Analytical Index: Guide to
GATT Law and Practice, Updated 6th Edition (1995), p. 222)

been used. Rather, the term "is to be subject to anti-dumping duties" would have been used. Since
we have to regard the text of the treaty as the most achieved expression of the intent of the parties to
that treaty,501 we cannot assume that the terms of the treaty were not carefully selected to meet the
intent of the parties. Therefore, we do not read the terms of Article VI:1 in their ordinary meaning
and in their context as supporting the view of the United States.
6.132 In our opinion, accepting the allegation of the United States that the disciplines of Article VI
are only applicable to the extent a Member wants to address situations of material injury, threat
thereof or material retardation of the establishment of a domestic industry would defeat the purpose of
Article VI and the Anti-Dumping Agreement. From the terms of Article VI, we deduce that the
purpose of that provision is to define the conditions under which the imposition of anti-dumping
measures is allowed. This purpose is confirmed by the context of Article VI. Article 1, first sentence,
of the Anti-Dumping Agreement provides that:
"An anti-dumping measure shall be applied only under the circumstances provided
for in Article VI of GATT 1994 and pursuant to investigations initiated [footnote 1
omitted] and conducted in accordance with the provisions of this Agreement."
(emphasis added)
Article 18.1 of the Anti-Dumping Agreement also confirms this understanding:
"No specific action against dumping of exports from another Member can be taken
except in accordance with the provisions of GATT 1994 , as interpreted by this
Agreement. [footnote 24 omitted]"
502 (emphasis added)
This implies that, by adopting Article VI of the GATT 1994 and the Anti-Dumping Agreement,
Members have agreed to use only one permissible approach against "dumping" as such. The
interpretation suggested by the United States would undermine the useful effect of the provisions of
Article VI and of the Anti-Dumping Agreement. In this respect, we do not read footnote 24 to
Article 18.1 as undermining our position. Article VI is the only provision of the GATT 1994
addressing specifically the conditions for imposing measures against dumping. Reading footnote 24
as permitting actions other than anti-dumping actions allowed under other provisions, as long as the
measure does not address dumping as such, is fully consistent with the principle of useful
interpretation.
6.133 For these reasons, we do not consider that the existence of other "effect" tests than those
provided for under Article VI would be sufficient to exclude the 1916 Act from the scope of
Article VI. The 1916 Act may be targeting particular effects of cross-border price discrimination.

"[…] le texte est surtout l'expression authentique de l'intérêt des parties, il est supposé incarner
See also the report of the International Law Commission to the UN General Assembly, Yearbook of the
International Law Commission (1966), Vol. II, A/CN.4/SER.A/1966/Add.1, p. 221:
"The second principle [contained in paragraph 1 of Article 31 of the Vienna Convention] is
the very essence of the textual approach: the par ties are to be presumed to have that intention
which appears from the ordinary meaning of the terms used by them."
502 We did not overlook the terms of footnote 24. Footnote 24, as we understand it, does not affect our
conclusion that, when dealing with dumping as such, Members must comply with Article VI of the GATT and
the Anti-Dumping Agreement. See our discussion of footnote 24 in section VI:D.2(c) below.

However, to the extent that such price discrimination meets the definition of "dumping" contained in
Article VI:1, it is, in our view, subject to the disciplines of Article VI and the Anti-Dumping
Agreement.503
6.134 Finally, the United States argues that the existence of an anti-trust objective in a law
regulating cross-border price discrimination removes it from the scope of Article VI of the
GATT 1994. While we agree that Article VI applies when Members have recourse to a given trade
policy instrument, i.e. anti-dumping action, we do not agree that the application of Article VI is
dependent on the objective pursued by the Member concerned. As we have demonstrated in the
previous paragraphs, Article VI is based on an objective premise. If a Member's legislation is based
on a test that meets the definition of Article VI:1, Article VI applies. The stated purpose of the law
cannot affect this conclusion.
504
6.135 We therefore conclude that the fact that the 1916 Act may have an anti-trust objective or be
categorized in US law as an anti-trust law does not per se make it fall outside the scope of Article VI,
unless it is demonstrated that this objective and this categorisation have an impact on the operation of
the 1916 Act. In light of our findings, this would require that the terms of the transnational price
discrimination test of the 1916 Act be understood in such a way that it would not meet the definition
of "dumping" of Article VI:1 of the GATT 1994. We further address this question in section
VI.C.2.(c) and (d) below.
(iii) Is the type of measures imposed under the 1916 Act relevant to determining whether the
1916 Act falls within the scope of Article VI of GATT 1994?
6.136 The United States argues that the 1916 Act does not fall within the scope of Article VI
because it does not impose anti-dumping duties. Rather, the 1916 Act sanctions the importer, not
imports, through clearly "internal" measures. Article VI, as a carve-out to Article I and Article II of
the GATT 1994, only deals with the imposition of duties. Japan claims that the type of measures
imposed does not change the nature of the law as an anti-dumping law.
6.137 We noted above that the premise on which Article VI is based is the existence of dumping.
We recall that the US argument is based on the premise that the circumstances provided for in
Article VI are not the only circumstances in which dumping as such can be counteracted. We
concluded above that Article VI provided for the only circumstances in which dumping as such could
be targeted by Members. We therefore conclude that the type of measures imposed under the
1916 Act is not relevant to determining whether the 1916 Act falls within the scope of Article VI.
505

503 We understand that the United States did not argue that the tests at issue were less stringent than the
material injury/material retardation tests of Article VI. Therefore, we do not address this point.
504 We note that a similar approach was taken in the report of the panel on EC – Parts and
Components, Op. Cit., para. 5.6, where the panel examined whether the policy purpose of a charge was relevant
to determining whether the charge at issue was imposed "in connection with importation", within the meaning of
Article II:1(b) of GATT 1947. The panel noted that:
"the policy purpose of charges is frequently difficult to determine objectively. Many charges
could be regarded as serving both internal purposes and purposes related to the importation of
goods. Only at the expense of creating substantial legal uncertainty could the policy purpose
of a charge be considered to be relevant in determining whether the charge falls under
Article II:1(b) or Article III:2."
505 This does not mean however that Article VI is indifferent to the type of measures applied against
dumping. This issue will be addressed in the section dealing with remedies allowed under Article VI:2.

(iv) Conclusion
6.138 We find that the 1916 Act, based on an analysis of its terms, objectively addresses a type of
transnational price discrimination that meets the definition of "dumping" contained in Article VI:1 of
the GATT 1994 and, thus, should be subject to the disciplines of Article VI.
6.139 However, our findings are based on the definition of dumping as in Article VI:1 of the
GATT 1994 and on the terms of the 1916 Act in their current meaning. As we recalled above, 506 we
must pay due regard to the fact that we are dealing with a text drafted more that eighty years ago. If,
by the time it was enacted, the 1916 Act was not designed to address "dumping", in other words if the
terms found in the 1916 Act had a different meaning in 1916 than they appear to have today, this
should be apparent from the legislative history and the context of its enactment. We therefore proceed
with the legislative history of the 1916 Act and the context of its adoption.
6.140 The United States also claims that the true nature of the 1916 Act as an anti-trust statute may
be more difficult to discern simply from the text of the 1916 Act, but the case law interpreting the
1916 Act removes any doubt on this point. Having regard to our conclusions in paragraph 6.135
above that this would require that the price discrimination test of the 1916 Act be interpreted in such a
way that it would no longer meet the definition of Article VI:1, we must also address this argument,
as well as the contention of Japan that, in fact, US courts have applied the 1916 Act as an
anti-dumping instrument.
(c) Impact of the historical context and of the legislative history of the 1916 Act
(i) Approach of the Panel
6.141 Both parties have referred the Panel to the historical context of the 1916 Act and to its
legislative history as it results, inter alia, from the Congressional Records. Japan considers that the
historical context and legislative history of the 1916 Act show that the US Congress sought to enact
an anti-dumping law to address the commercial problem of dumping, i.e. international price
discrimination. The United States considers that Japan’s description of the 1916 Act’s legislative
history is incomplete and misleading. The 1916 Act was part of the policy of the second Wilson
Administration to reinforce the US anti-trust legislation. The bill proposed by Representative Kitchin,
which was to become the 1916 Act, was intended to supplement the existing anti-trust laws.
Moreover, the United States is of the view that the Panel's role is not to weigh the legislative history
of the 1916 Act itself. The legislative history is cited only as confirmation or to help explain the
courts' holdings.
6.142 Our understanding is that the legislative history of an act of the US Congress is an important
tool for US courts to identify the "intent of Congress".
507 The legislative history allows US courts to
interpret a law in accordance with what they perceive to be the original intent of the US Congress
when the text of that law is not clear. US courts may also use legislative history, when necessary, to
confirm the clear meaning of a law. 508 Since, as mentioned above, 509 we have to identify how the

506 See section B.2. above.
507 In the Zenith III case, p. 1213, the court mentioned that the Supreme Court had
 "recently observed that 'courts, in construing a statute, may with propriety recur to the history
of the times when it was passed; and this is frequently necessary in order to ascertain the
reason as well as the meaning of particular provisions in it.' Leo Sheep Co. v. United States,
440 U.S. 668, 669, 99 S.Ct. 1403, 1405, 59 L.Ed.2d 677 (1979)".
508 US courts had recourse to the legislative history of the 1916 Act in a number of cases. See, e.g., the
Zenith I (1975) and Zenith III (1980) judgements.

1916 Act is understood within the US legal system, we need to address the arguments of the parties
based on the historical context and the legislative history of the 1916 Act. In doing this, we shall take
due account of the use that US courts made of those tools of interpretation in practice.
6.143 We have found that the key to the applicability of Article VI:1 of the GATT 1994 to the
1916 Act is whether that law objectively addresses "dumping" within the meaning of that article. We
have also found that the terms of the 1916 Act, on their face, showed that the transnational price
discrimination test in that law met the definition of "dumping" in Article VI:1 of the GATT 1994. We
consider that we now have to determine whether there is evidence in the legislative history or the
historical context of the enactment of the 1916 Act that we should understand the price discrimination
test of the 1916 Act differently than we have on the basis of the text of the law.
(ii) Review of the historical context and legislative history
6.144 In light of the arguments of the parties regarding the scope of the 1916 Act, we consider it
useful to determine whether the historical context and the legislative history confirm the following
elements: (i) how the term "dumping" was understood at the time of the adoption of the 1916 Act and
(ii) whether the fact that the 1916 Act may have been considered at the time as addressing "unfair
competition" from foreign producers should have in practice an influence on how we must understand
the transnational price discrimination test contained in the 1916 Act. Having reviewed the materials
submitted by the parties, we have found no indication that the terms of the price discrimination test
found in the 1916 Act were understood differently at the time of its enactment than we understand
them today. In its 1919 Information Concerning Dumping and Un fair Foreign Competition in the
United States and Canada's Anti-Dumping Law, at p. 9, the United States Tariff Commission included
a definition of "dumping" identical in substance to the concept addressed by Article VI:
"Dumping may be comprehensively described as the sale of imported merchandise at
less than its prevailing market or wholesale price in the country of production. The
definition derives particular importance from a not infrequent tendency to confuse
with dumping […] certain other trade practices which are generally considered
unfairly competitive."
This statement of the Tariff Commission shows that dumping was probably not the only price practice
which could be considered as "unfairly competitive". However, the Tariff Commission added that:
"The anti-dumping act of Congress of September 8, 1916, [footnote omitted]
somewhat modifies the above definition by condemning importation as well as sale, if
commonly and systematically resorted to with the purpose specified in the law."
While not part of the legislative history of the 1916 Act as such, this document of the Tariff
Commission indicates that the practice addresse d by the 1916 Act was already clearly understood to
be "dumping" as we define it today. The Tari ff Commission definition of "dumping" is, with some
exceptions which we found not to affect the applicability of Article VI:1 of the GATT 1994,
510 similar
to the definition of transnational price discrimination in the 1916 Act. Therefore, it seems reasonable
to conclude that the US Congress, when it passed the 1916 Act, was fully aware of the fact that that
law addressed "dumping" and not another form of price discrimination. This fact was acknowledged
in the Zenith II case, where the court stated that "The practice [of dumping] itself long outdated the

509 See section B.2. above.
510 See para. 6.122 above.

passage of the Antidumping Act of 1916 […], whic h clearly implies that Congress knew whereof it
wrote when it enacted the statute."511
6.145 Moreover, even though the 1916 Act might pursue anti-trust objectives, we found no express
indication in the legislative history that, in the 1916 Act, price discrimination as such should be
understood in any particular anti-trust context.
6.146 The United States argues that the historical context and the legislative history show that the
1916 Act was intended to supplement or complement the rules applicable to US products in an
anti-trust context. The United States deduces from this that the 1916 Act is an anti-trust law not
subject to the disciplines of Article VI of the GATT 1994. The United States refers, inter alia, to the
statement of Representative Claude Kitchin:
"We believe that the same unfair competition law which now applies to the domestic
trader should apply to the foreign import trader."
512
6.147 We also note that the US Secretary of Commerce William Redfield explained in 1915 that
"Unfair competition is forbidden by law in domestic trade, and the Federal Trade
Commission exists to determine the facts and abate the evil wherever found. The
door, however, is still open to "unfair competition" from abroad which may seriously
affect American industry for the worse."513
The two statements refer to the extension of "unf air competition" rules applicable to US domestic
commerce to imports. We have noted above that the US Congress had used in the 1916 Act a
definition of transnational price discrimination which was already at that time understood as
"dumping". We have also concluded in paragraph 6.135 above that the fact that the 1916 Act had an
anti-trust objective was not relevant and did not make the 1916 Act fall outside the scope of
Article VI of the GATT 1994. Likewi se, we are not convinced that the fact that the 1916 Act was
presented at the time of its enactment as "supplementing" or "complementing" the existing anti-trust
laws necessarily requires that the 1916 Act be interpreted as an anti-trust law. In our opinion, the
argument of the United States is only valid if the United States can prove that the historical context
and the legislative history of the 1916 Act gave indications that anti-trust and anti-dumping were
already separate legal concepts. If the two were not clearly identified but, rather, were still part of one
single notion of "unfair competition", the US argument should be rejected.
6.148 We note that, at the time of the enactment of the 1916 Act, the current distinction between
anti-trust and anti-dumping did not apply in the United States. We reviewed the materials submitted
by the parties and the extensive analysis of the legislative history of the 1916 Act in the Zenith III
case. While it appears, inter alia from the quotations above, that the US Administration and
US lawmakers of that time considered that the 1916 Act "complemented" or "supplemented" the
unfair competition rules applied to domestic products essentially under the Sherman Act and the
Clayton Act,
514 it also seems that no clear legal distinction had yet been made in the United States

511 See Zenith II, Op. Cit ., p. 258. See also the comments of Senator Penrose, criticizing the
effectiveness of the 1916 Act in comparison with the Canadian anti-dumping legislation, 53 Cong. Rec. S13080
(1916), quoted by Japan at para. 3.173 above.
512 53 Cong. Rec. App. 1938 (1916), as quoted in Zenith III, p. 1222.
513 Annual Report of the Secretary of Commerce 43 (1915), as quoted in Zenith III, p. 1219.
514 See J. Viner, Dumping: A Problem in International Trade (1923), Op. Cit.; pp. 242-243:
"[The Wilson Administration] therefore recommended that any measure adopted to meet the
problem should be divorced from customs legislation [in the sense of imposition of higher

between unfair competition resulting from dumping and unfair competition resulting from other
practices, as it is made today. 515 Dumping as defined in Article VI:1 of the GATT 1994 was just one
specific cause of action under anti-trust law,516 as noted in 1923 by Jacob Viner:
"This antidumping provision, beyond the fact that it makes the participation of the
importer both as to act and intent in predatory dumping specifically unlawful and not
merely unlawful by construction as a practice by which competition can be restrained
or monopoly established , adds nothing to the Sherman Act. Beyond the fact that it
makes unnecessary the proof of conspiracy between the importer and others, it adds
nothing to the Wilson Act of 1894" (emphasis added).517
6.149 Even if we were to agree with the United States that the objective of the law is decisive, the
historical context and legislative history do not confirm that the 1916 Act had a purely "anti-trust"
purpose, within the meaning of that concept today. Rather, it appears that anti-dumping, as it is known
today in international trade law, and anti-trust laws dealing with predatory pricing were part of the
same notion of "unfair competition."
(iii) Conclusion
6.150 We note that evidence from the historical context of the 1916 Act supports our finding that
the 1916 Act transnational price discrimination test corresponds to "dumping" within the meaning of
Article VI. We also note that, at the time of the enactment of the 1916 Act, there would have been no
need to give any different meaning to that test in order to make it fall within the scope of US anti-trust
law because, at that time, "dumping" had not yet been conceptually isolated from the body of
US anti-trust laws. In any event, the United States has not submitted evidence from the historical
context or the legislative history of the 1916 Act that the terms of the transnational price
discrimination test of the 1916 Act were understood differently because of the anti-trust objective of
the law or that that objective was such as to make the 1916 Act fall outside the scope of Article VI.

tariffs] and should take the form of a further extension to those engaged in the import trade of
the restraints against unfair competition which had been imposed on domestic commerce."
See also the excerpt from the letter of Samuel J. Graham, Assistant Attorney General, to the
New York Times, 4 July 1916, included in a footnote to the above quotation.
515 Even though dumping is now subject to specific international disciplines and may have acquired
other purposes, the origins of anti-trust and that of anti-dumping were essentially the same, as highlighted by the
1974 report of the Ad Hoc Committee on Antitrust and Antidumping of the American Bar Association Section
on Antitrust Law, which stated as follows:
"Both U.S. antidumping and antitrust law and policy have historic roots, and both were
intended to protect and engender the fund amental U.S. economic policy of free and fair
competition.
[…] antidumping policy seeks to accommodate the legitimate need for legislation which
protects American competition from unfair price discrimination by foreign concerns."
43 Antitrust L J 653, 691-93 (1974), as reproduced in J. H. Jackson & W. Davey, Legal Problems of
International Economic Relations, 2d Ed. (1986). This is an additional reason for not deciding on the
applicability of Article VI of the GATT 1994 to the 1916 Act on the basis of the general objective of the law.
516 In that context, the statement of the court in the Zenith III case, at p. 1220, that "the political and
legal history of the era supports our conclusion from the statutory text that the 1916 Act was an antitrust based
unfair competition law, not a protectionist one" does not support the US position. From the paragraphs
preceding that conclusion, we understand it as meaning that the court opposed the use of selective "unfair
competition" instruments to the application of higher tariffs as part of a protectionist policy.
517 J. Viner, Dumping: A Problem in International Trade (1923), Op. Cit.; p. 244.

6.151 We therefore conclude that the historical context and the legislative history of the 1916 Act,
while showing that there was an intent to parallel the rules applicable to US and foreign companies,
do not lead us to conclude any differently than we have on the basis of the terms of the 1916 Act as
such. Therefore, we proceed to review the impact of the US case-law relating to the 1916 Act.
(d) Impact of the US case-law relating to the 1916 Act
(i) Approach of the Panel
6.152 We recall our determinations under section VI.B.2 above on how we should consider the
various court decisions regarding the 1916 Act and their interrelationship. We note that the
United States claims that the case-law is eviden ce that the 1916 Act was applied as an anti-trust
statute. We would like to make two preliminary remarks in relation to what is essentially a defence of
the United States.
(a) First, as already mentioned, the categorisation of the 1916 Act as an anti-trust law or an
anti-dumping law by the US courts should not be decisive in determining the
WTO-compatibility of that law. 518 Since the point of our review of the US case-law is to
ascertain the actual meaning of the 1916 Act in order to assess its conformity with the WTO
Agreement, the classification of this law by US courts can only be of limited impact for the
purpose of the present case. For the Panel, it is the reasoning, if any, behind the classification
that matters.
(b) Second, we found that the 1916 Act price discrimination test met, on its face, the definition of
Article VI:1 of GATT 1994, and that the other tests of the 1916 Act based on the "intent" of
the exporter engaged in "dumping" do not have any bearing on that conclusion. As a result,
we are of the view that we need not consider any court interpretation of the 1916 Act relating
to any other test than the transnational price discrimination test.
We must therefore identify the instances, if any, where courts, in applying the 1916 Act, have
addressed the "dumping" test contained in that law and determine whether US courts have
applied/interpreted that test in such a way that it would no longer meet the definition of Article VI:1
of the GATT 1994.
6.153 Since we have already found that the text of the 1916 Act, on its own, supports the conclusion
that Article VI is applicable to that law, we consider that, in order for that conclusion to be confirmed,
it is not necessary for Japan to demonstrate that there was no court decision that applied the 1916 Act
in such a way that it would not fall within the scope of Article VI. If we find that the US court
practice is not sufficiently well established, or that there is no prevailing interpretation, or no
sufficiently clear reasoning regarding the way th e transnational price discrimination test of the
1916 Act should be applied, we shall rely on the text of the law itself. However, for the United States
to prevail, it would be sufficient in our view to show that there is one definitive interpretation
supporting its position. As a result, we first determine whether there is any relevant Supreme Court
decision which would provide us with a definitive authority at the highest level of jurisdiction. If not,
we will review the circuit court decisions.

518 See EC – Parts and Components, Op. Cit ., para. 5.19. In that context, the statement of the court in
Zenith III (1980) that "the 1916 Act is an antitrust, not a protectionist statute" is for us of limited assistance if
this statement is not followed by specific conclusions in terms of interpreting the price discrimination test of the
1916 Act.

(ii) The Supreme Court and the 1916 Act
6.154 We first note that the Supreme Court has not yet been called upon to interpret the text of the
1916 Act. However, as highlighted by the United States, in the Cooper case,519 the Supreme Court
described the 1916 Act as "supplemental" to the Sherman Act, as part of an illustration that "Congress
had in mind the distinction between public and private remedies". The United States concludes from
this that the 1916 Act is an anti-trust instrument. However, the Supreme Court also referred to the
1916 Act as "the antidumping provisions of the Re venue Act of 1916". Even if the Supreme Court
regarded the 1916 Act as an anti-trust law, the fact that it refers to "anti-dumping provisions" leaves
the issue of the interpretation of the price discrimination test of the 1916 Act open, since US courts
may well apply the 1916 Act as an anti-trust law when it comes to the "intent" test, while applying the
price discrimination test without any additional requirements than those contained in the text of the
1916 Act.
6.155 What the Supreme Court meant by "supplemental" is not clear in the absence of an agreed
technical definition under US law. The 1916 Act could be "supplemental" to anti-trust statutes in a
number of other ways than that suggested by the United States. For instance, an anti-dumping law
could "supplement" a domestic predatory pricing law. The context of the statement in the decision is
of limited use.
520
6.156 Therefore, we are not in a position to draw any definitive conclusion from the US Supreme
Court statements in the Cooper case. Even if the Supreme Court had expressly stated that the
1916 Act was an anti-trust or an anti-dumping law, this statement would have no relevance for this
Panel as long as it was not supported by an explanation of the reasons why the Supreme Court thought
that way, or of the implications of that statement on the interpretation of the transnational price
discrimination test of the 1916 Act.
6.157 As a result, any conclusion on the basis of the US case-law becomes delicate because there is
no unambiguous authority at the highest level of US jurisdiction. This does not mean that we will not
find an unanimous interpretation, or even a prevailing interpretation that would be convincing.
Indeed, many decisions are final as a practical matter at the level of the circuit court of appeals,
inter alia, because the possibility to appeal before the US Supreme Court is not automatically granted.
(iii) The interpretation of the transnational price discrimination test of the 1916 Act at the circuit
court level
"Dumping" as an international trade concept applied in an anti-trust context
6.158 Considering the other cases mentioned by the parties and decided either at the district court
level or at the court of appeals level, the Panel notes that the parties discussed at length the decision of
the court in Zenith III (1980). We first note that the court in Zenith III stated that the 1916 Act
 "should be interpreted whenever possible to parallel the "unfair competition" law
applicable to domestic commerce. Since the 1916 Act is a price discrimination law, it

519 Op. Cit., p. 308.
520 The term "supplemental" was also used by US Secretary of Commerce Redfield in his legislative
proposal of 1915 ( Annual Report of the Secretary of Commerce (1915), Op Cit .) when he said "I also
recommend that legislation supplemental to the Clayton Antitrust Act be enacted…" However, we already
expressed the view when we addressed the historical context and the legislative history of the 1916 Act that the
borderline between anti-dumping and anti-trust was not so clear at that time, if only because anti-dumping was
at an early stage of development and because it was pr obably not yet perceived in the United States as a trade
instrument separate from anti-trust.

should be read in tandem with the price discrimination law, section 2 of the Clayton
Act, which was amended by the Robinson-Patman Act of 1936 in 1936."
6.159 The United States relies heavily on this and other similar statements 521 to argue that the
1916 Act addresses anti-competitive pricing practices and should be interpreted similarly to the
Robinson-Patman Act. However, as outlined in se ction VI.C.2(c) above, the fact that the 1916 Act
was adopted for anti-trust purposes and the fact that it combines a "dumping" test with other tests
which are typical of US anti-trust legislation are, in our view, of no relevance in this case. 522 What
matters for us is the way transnational price discrimination has been addressed by US courts.
6.160 The United States considers that the Zenith III judgement is the leading lower court case
addressing how specific provisions of the 1916 Act should be interpreted. We note, with respect to
price discrimination stricto sensu, that the court, after having recalled Viner's definition of dumping,
stated that "to restate the obvious, the Antidumping Act of 1916 is a prohibition of international price
discrimination." This would tend to confirm that the court applied the transnational price
discrimination test of the 1916 Act without reading into it additional anti-trust-like requirements
which would modify its meaning. The Court also recalled that "as a price discrimination statute, the
Antidumping Act of 1916 is functionally similar to the price discrimination statutes which are
applicable to domestic business." However, this was before the introduction - implicitly in the In Re
Japanese Electronic Products III case or explicitly in the Brooke Group case - of the predatory
pricing/recoupment test. We have no clear evidence that, before those judgements, the price
discrimination test of the 1916 Act was applied in a manner different from that suggested by the
wording of this Act. More particularly, we have no convincing evidence that any criteria exclusively
found in anti-trust practice to establish price discrimination were used by the US courts in that
context.
523 On the contrary, we recall that the courts in Zenith III and in In Re Japanese Electronic
Products II confirmed that the phrase "actual market value or wholesale price of such articles" in the
1916 Act was a term of art borrowed from the Tariff Act of 1913 – a customs law - and defined in that
Act. The court in Zenith III also specified that it would hold that there is no violation of the 1916 Act
unless the standards of similarity of the customs appraisement law were met.524
6.161 We have not found in the decisions referred to by the United States other elements which
would demonstrate that the price discrimination test of the 1916 Act, as such, was affected by
attempts to parallel the Robinson-Patman Act. In fact, the court in Zenith II (1975) largely used
"standard dictionary definitions" to interpret the terms of the 1916 Act that had been challenged by the
defendants on grounds of vagueness. This was the case for the terms "commonly and systematically",
and "other charges and expenses necessarily incident to the importation and sale". Regarding the term
"substantially", the court only referred to the case-law regarding the Clayton Act to conclude that if
the term "substantially" in "substantially to lessen competition" in the Clayton Act was not found
unconstitutionally vague the term " substantially less" in the 1916 Act cannot be either. Finally, the
court also referred to the 1913 Tariff Act to interpret the phrase "actual market value or wholesale
price."
6.162 The United States also mentions that the court’s analysis in the seminal Zenith III case has
been supported by other US courts which have considered the nature of the 1916 Act. We note
however that a number of these cases were concerned with the issue of locus standi in a 1916 civil

521 See Zenith III , p. 1223. See also paras. 3.225 and 3.331 above, where the United States refers to
statements of the courts in the Zenith II (1975) and In Re Japanese Electronic Products II (1983).
522 We note in this respect that the Zenith III decision shows that even the judgement on which the
United States relies to qualify the 1916 Act as an anti-trust law seems to acknowledge that the 1916 Act was a
combination of anti-dumping and anti-trust.
523 See Zenith III, Op. Cit., pp. 1197 and 1229-1230.
524 Ibid., see also In Re Japanese Electronic Products II, p. 324.

action525 or more generally with the problem of establishing a cause of action. 526 If they confirm
Zenith III , it seems to be essentially by reason of not objecting to its conclusions, which we have
found not to affect our initial findings based on the terms of the 1916 Act alone. In fact, it seems that
courts have concentrated their efforts on other aspects of the 1916 Act, such as the standing and
damages provisions, which were found "essentially the same as those applicable to the antitrust laws
under section 4 of the Clayton Act" and the criminal penalty clause which is "virtually identical to,
and specifies the same penalties as, the corresponding clauses of the Sherman Antitrust Act as then in
force."
527
6.163 Other elements tend to show that courts approached the transnational price discrimination test
found in the 1916 Act as "dumping" within the meaning of Article VI of the GATT 1994. For
instance, a number of those decisions, including the cases cited by the United States in support of its
position, refer to the definition of dumping by Jacob Viner, i.e. "price discrimination between
purchasers in different national markets"
528 and generally address the price discrimination test found
in the 1916 Act as "dumping", without any further qualification. In this respect, the court in Zenith II
did not find it necessary to look any further than that definition and the popular title of the 1916 Act to
conclude that:
"An economic regulatory statute could scarcely acquire the designation of an
'antidumping Act' unless the business community to which the statute was addressed
knew what 'dumping' was."
529
6.164 The United States argues that the court used a colloquial definition of "dumping", not one
based on examination of "fair value" and "material injury" concepts. Moreover, the district court
went on to stress that the 1916 Act contains the additional element of "specific, predatory, anti-
competitive intent". We do not contest the assessment of the 1916 Act made by the court. In our
opinion however, the "intent" aspect of the 1916 Act is not a determining factor to conclude on the

525See Schwimmer v. Sony Corp. of America (1979), Op. Cit.; Schwimmer v. Sony Corp. of America
(1980), Op. Cit.; Western Concrete Structures Co. v. Mitsui & Co. (1985), to which Japan refers expressly in its
submissions.
526 Jewel Foliage Co. v. Uniflora Overseas Florida (1980), Op. Cit.; Outboard Marine Corporation v.
Pezetel (1978), Op. Cit.
527 Zenith III, p. 1214.
528 J. Viner, Dumping: A Problem in International Trade, 1966 edition, p. 4. See, e.g., Zenith II (1975),
Outboard Marine Corporation v. Pezetel (1978), p. 408; Zenith III (1980); In re Japanese Electronic Products
II (1983), p. 321
529 Zenith II, p. 258. See also the statement of the court in Zenith III, p. 1196:
"We also have occasion to compare the 1916 Act, which creates a private right of action for
treble damages and provides criminal penalties for dumping, with the Antidumping Act of
1921"
The terms used by the court and the subsequent developments in the judgement show that "dumping" in the
1916 Act and in the 1921 Act, which was the US anti-dumping law based on administrative investigations
applied until the entry into force of the Tokyo Round Anti-Dumping Agreement, were not understood
differently. The fact that the understanding of the meaning of "dumping" by US courts corresponds to the
definition of that concept in Article VI:1 of the GATT 1994 is confirmed by the following statement of the court
in In Re Japanese Electronic Products II, at p. 324:
"The first element necessary to a finding of dumping under the 1916 Act is proof that a price
differential exists between two comparable products, one of which is imported or sold in the
United States and the other of which is sold in the exporting country."
See also Helmac II (1993), p. 591, which recognised that the key to liability under the 1916 Act was "dumping:
the pricing of goods on the American market at a price lower than on the home market".

applicability of Article VI and the Anti-Dumping Agreement to the 1916 Act. As demonstrated in our
analysis of Article VI:1, the key to the application of those provisions is the existence of a
transnational price discrimination. Once a Member plans to address this type of price discrimination
as such, not its causes such as subsidisation or monopolization in the exporting country, or its effects,
such as increased sales at the expense of domestic competitors, it can only do it if "injury" within the
meaning of Article VI and the Anti-Dumping Agreement is found.
6.165 We are therefore of the view that these examples are evidence that a number of US courts,
irrespective of their interpretation of the other parts of the 1916 Act, considered that the transnational
price discrimination test had to be interpreted as "dumping", as it is also understood in international
trade, and on the basis of US trade law standards.
The Brooke Group recoupment test
6.166 The United States notes that the 1916 Act is not directed at the simple price difference that
constitutes dumping under the anti-dumping rules. Pricing practices under the 1916 Act must be
"predatory pricing". In that context, the United States argues that, since the 1986 Third Circuit Court
of Appeals decision In Re Japanese Electronic Products III and the 1993 Supreme Court decision in
Brooke Group Ltd. v. Brown & Williamson Tobacco Corporation,
530 courts have applied the anti-trust
predatory pricing/recoupment test developed in those cases.531
6.167 We understand the predatory pricing/recoupment test in the Brooke Group case to require that
(i) the complainant establish that the prices complained of are below an appropriate measure of its
rival's costs and that (ii) the complainant demonstrate that the competitor had a reasonable prospect of
recouping its investment in below-cost prices. 532 The Supreme Court further held that evidence of
below-cost pricing is not on its own sufficient to permit an inference of probable recoupment and
injury to competition. Determining whether recoupment of predatory losses is likely requires an
estimate of the cost of the alleged predation and a close analysis of both the scheme challenged by the
plaintiff and the structure and conditions of the relevant market.533
6.168 It is not clear whether the recoupment test should be analysed as part of the transnational
price discrimination test or as part of the "intent" test of the 1916 Act. As a result, in order to consider
the applicability of the Brooke Group test to the price discrimination test of the 1916 Act, we have to
assume that price recoupment is more related to the type/amount of price discrimination that can be
achieved by the importer than to its intent to affect the US market. If the Brooke Group test relates to
the "intent" test of the 1916 Act, it cannot affect the transnational price discrimination test of the
1916 Act, as the Panel has already repeatedly argued.
6.169 This said, regarding the first criterion of the Brooke Group test, i.e. below cost prices, we do
not consider that the introduction of a below-cost price test would make Article VI of the GATT 1994
no longer applicable to the 1916 Act, essentially because the definition of dumping in Article VI:1
does not incorporate a notion of magnitude of price difference. We are aware that Article 5.8 of the
Anti-Dumping Agreement provides that there "shall be immediate termination in cases where the
authorities determine that the margin of dumping is de minimis", i.e. that it is less than 2 per cent,
expressed as a percentage of the export price. We have no evidence that this de minimis dumping

530 509 U.S. 209, 118 S.Ct. 2578, hereinafter the "Brooke Group case".
531 Even though the parties have discussed the implication of the court decision In Re Japanese
Electronic Products III, we do not find it necessary to determine whether the court actually applied in that case
the predatory pricing/recoupment test later established by the Supreme Court in the Brooke Group case. For the
sake of our analysis, we will assume that the court in In Re Japanese Electronic Products III actually applied a
standard similar to the Brooke Group test.
532 Brooke Group, Op. Cit., pp. 2587-2588.
533 Ibid. p. 2589.

margin bears any link with any kind of below-cost test as applied in the anti-trust context. The
application of a below-cost price test in the 1916 Act may make the establishment of a transnational
price difference more difficult, but it does not affect the basic requirement that a price difference has
to be established under the 1916 Act, which is also the basic requirement of Article VI:1 of the
GATT 1994.
6.170 As far as the cost recoupment criterion is concerned, we do not believe either that the
introduction of a recoupment requirement under the 1916 Act would make Article VI of the
GATT 1994 no longer applicable to the 1916 Act for essentially two reasons. First, the definition of
dumping set out in Article VI:1 would still apply. Even if a cost recoupment were to be required in
addition to a price difference, a price difference must always be found in the first place. The second
reason is more of an economic nature. Since, in transnational price discrimination, an exporter may
benefit from an isolated domestic market where it may maximise its profits, recoupment on the export
market may not always occur in a situation of international predatory pricing. The recoupment
requirement, which may be justified in cases of price discrimination within the United States, may be
an economically questionable requirement in cases of transnational price discrimination, at least
whenever the exporter does not need to recoup its costs on the US market. Indeed, the company
exporting at dumped prices may benefit from a simultaneous recoupment of its "dumping" costs
through more profitable sales on its domestic market.
6.171 However, this Panel is called on to clarify WTO provisions, not to discuss specific anti-trust
issues. Therefore, having expressed the above-mentioned reservations, we proceed to consider if,
effectively, the Brooke Group test has been actually and consistently applied by US courts in their
interpretation of the 1916 Act.
6.172 If the Supreme Court decision in Brooke Group is applicable to the 1916 Act, one would
expect the other courts which had to consider complaints under the 1916 Act to apply that test as well.
We have no clear evidence that this has been the case, even if one assumes that the test was already
applicable since In Re Japanese Electronic Products III (1986), as it would appear from the reaction
of the courts in the Geneva Steel
534and Wheeling-Pittsburgh cases.535
6.173 In that context, the parties have discussed the content of the Helmac I case (1992). We
understand that the court in the Helmac I case concluded that the complainant did not have to
establish recoupment. On the contrary, the court noted the importance of the difference in
terminology between the 1916 Act and the US anti-tr ust statutes. According to the court, the
1916 Act:
"focuses upon intent while the antitrust statutes focus upon effect. Beside injury to
competition, the Antidumping Act also provides a cause of action when the defendant
attempts to, among other things, injure an industry in the United States."536
The court only stated as a possibility that the adoption of the recoupment theory would be appropriate
if Helmac, the complainant in that case, had claimed that the defendant's conduct injured competition.
Since Helmac alleged an attempt to injure an industry in the United States, the court concluded that
proving ability to recoup losses was not necessary.
537 In the Helmac II decision (1993) the court
differentiated between liability, of which a finding of dumping was the key, and the calculation of the
harm caused to the domestic industry.538

536 Helmac I, Op. Cit., pp. 575-576.
537 Ibid., p. 575.
538 Helmac II, Op. Cit., at p. 591.

6.174 Therefore, we consider that we do not have sufficient evidence of the actual application of the
Brooke Group test to 1916 Act cases in relation to the establishment of the price discrimination
required by that law.
The interlocutory decisions relied upon by Japan
6.175 Japan alleges that two interlocutory judgements in the Geneva Steel and Wheeling Pittsburgh
cases support its claims that the 1916 Act addresses dumping within the meaning of Article VI of the
GATT 1994. Japan also considers that these decisions show the lack of relevance of the Zenith III
decision, because it ignored the text of the 1916 Act. The United States argues that these two
decisions are neither final nor conclusive under US law. Therefore, they cannot, at the present time,
be considered by the Panel as authoritative interpretations of US law.
6.176 We are fully aware of the fact that these decisions are only interlocutory judgements issued in
different circuits than the Zenith decisions. We consider that our review of the other - final -
judgements referred to by the parties already shows that US courts did not interpret the transnational
price discrimination test of the 1916 Act in such a way that it would fall outside the scope of
Article VI of the GATT 1994. However, we recall that we are required to make an objective
assessment of the facts of the case. Since these two interlocutory judgements have, like the Zenith
cases, actually discussed in detail the origin, objectives and practical operation of the 1916 Act, we
found it relevant to consider also those cases. We also note that these two cases are subsequent to the
Zenith cases and the Supreme Court decision in the Brooke Group case. Considering them is
appropriate in light of the arguments of the United States based on those decisions. Finally, as
mentioned in paragraph 6.152(a) above, we are interested in the reasoning followed by the US courts
as a clarification of how the transnational price discrimination test of the 1916 Act operates. If this
reasoning is convincing, we feel justified in taking it into account in our examination.
539
6.177 In Geneva Steel , the district court addressed the question whether the 1916 Act always
requires evidence of antitrust-like predatory pricing. Since the intent of predatory pricing in our
opinion does not affect the transnational price discrimination test of the 1916 Act, we do not consider
that judgement to be directly relevant to our ca se. However, we note that the court considered that
"By the words it chose, Congress protected United States industry from unfair dumping." 540 Having
regard to our conclusions regarding the use of the word "dumping" in other judgements, we assume
that the court consciously used the word "dumping" in the same meaning as this word is given in
Article VI:1 of the GATT 1994.
6.178 Other reasonings of the court are relevant in so far as they seem to confirm our understanding
of the case-law. For instance, the court in Geneva Steel considered the conclusion in Zenith III that the
1916 Act was "an antitrust, not a protectionist statute". It stated that such conclusion did not appear to
be necessary to support the finding of the court in the Zenith III case that the term "such articles" in
the 1916 Act included also "similar" articles. 541 The reason for this conclusion was, as we understand
it, that the relevant text in the 1916 Act had been imported from the 1913 Tariff Act, a customs statute
which provided for a "similarity" standard. We also note that the court in Geneva Steel found the
terms of the 1916 Act unambiguous,
542 as we did – at least with respect to the transnational price

539 Since the Panel's second substantive meeting with the parties there have apparently been further
developments in the Wheeling-Pittsburgh case. According to the United States, the plaintiff in that case,
Wheeling-Pittsburgh Steel Corporation, has voluntarily dismissed its claims against the remaining defendants at
the trial court level so that all that remains is an appeal of an interlocutory opinion regarding injunctive relief
currently pending before the US Court of Appeals for th e Sixth Circuit. We do not consider that these recent
developments affect our approach to the Wheeling-Pittsburgh case.
540 Geneva Steel, p. 1217.
541 Geneva Steel, p. 1218.
542 Ibid., p. 1222-1223.

discrimination test - when we considered the text of the 1916 Act in isolation from the subsequent
case-law.
6.179 The court in the Wheeling-Pittsburgh case did not address the price discrimination test of the
1916 Act as such, but the question whether predatory intent had to be demonstrated. Its reasoning is
therefore less relevant for this case, except for its discussion of the inclusion of the predatory
pricing/price recoupment test in the 1916 Act.
 543 In that respect, like in the Geneva Steel case, the
court in Wheeling-Pittsburgh rejected the application of this test with respect to certain circumstances
of application of the 1916 Act because it created a double burden of proof for the complainants.
Indeed, the court considered that the Zenith III decision had added "an antitrust type of predatory
pricing, including the reasonable prospect of resultant market control and price recoupment", to the
"intent" to injure or destroy or prevent the estab lishment of a domestic industry contained in the text
of the 1916 Act.
544
6.180 The Geneva Steel and Wheeling-Pittsburgh cases shed additional light on the interpretation of
the pricing/recoupment test because they have addressed quite specifically the question of its
application. They also represent additional evidence that some district courts do not find themselves
compelled, at least at an early stage of consideration of an issue, to apply the Brooke Group predatory
pricing/price recoupment test to claims under the 1916 Act.
(iv) Conclusion
6.181 We find that that the assessment made by courts of the price discrimination test of the
1916 Act was based essentially on the text of the 1916 Act itself, without any significant additions.
We also find that, at best, we have no clear evidence of a consistent application of the cost
recoupment test – or any other "anti-trust" standards, such as below-cost prices - in the
implementation of the transnational price discrimination test of the 1916 Act. In accordance with our
approach,
545 we conclude that the US case-law supports our original conclusion that the 1916 Act
addresses "dumping" within the meaning of Article VI:1 of the GATT 1994.
3. Conclusions on the applicability of Article VI of the GATT 1994 and of the
Anti-Dumping Agreement to the 1916 Act
(a) The 1916 Act falls within the scope of Article VI of the GATT 1994 and of the
Anti-Dumping Agreement
6.182 Having interpreted Article VI of the GATT 1994 in accordance with the Vienna Convention,
we have reached the conclusion that the rules and disciplines of that article apply to laws that address
"dumping" as defined in Article VI:1. Having examined the text of the 1916 Act, we have found that
the transnational price discrimination test incorporated in that law falls within the definition of
"dumping" of Article VI:1 of GATT 1994. On the basis of our interpretation of Article VI, we have
also found that none of the additional conditions or requirements contained in the text of the 1916 Act
is such as to make the transnational price discrimination test of the 1916 Act fall outside the scope of
the definition of "dumping" in Article VI:1 or otherwise modify our conclusions. We found no
convincing evidence in the legislative history that should lead us to understand the terms of the price
discrimination test of the 1916 Act differently than we have. Finally, our review of the US court

543 The Court in Wheeling-Pittsburgh (1999) gave its views as to why the "predatory pricing" part of
the Brooke Group test could not apply to cases under the 1916 Act. The court stated that "by requiring a
plaintiff to prove 'intent to injure a domestic industry' by below-cost-pricing, the Antidumping Act of 1916 does
require proof of predatory intent, albeit of a different kind" (p. 601). However, since its reasoning was based
only on the "intent" requirement of the 1916 Act, we do not find it necessary to address it.
544 Wheeling-Pittsburgh, Op. Cit., p. 605.
545 See paras. 6.152-6.153 above.

decisions submitted by the parties did not show that courts had interpreted the transnational price
discrimination test of the 1916 Act in such a wa y that it would no longer meet the definition of
Article VI:1 of the GATT 1994.
6.183 This conclusion also disposes of the argument of the United States that the 1916 Act has been
interpreted in such a manner that it would fall outside the scope of Article VI of the GATT 1994.
6.184 Having found that Article VI of the GATT 1994 applies to the 1916 Act, and having regard to
the relationship between that Article and the Anti-Dumping Agreement, as highlighted in
paragraphs 6.92-6.94 above, we find that the applicability of Article VI to the 1916 Act also implies
the applicability of the Anti-Dumping Agreement to the 1916 Act.
(b) The 1916 Act is a mandatory law within the meaning of GATT 1947/WTO practice
6.185 With respect to the discretion enjoyed by the US Department of Justice which would,
according to the United States, make the 1916 Act non-mandatory, we recall our reasoning in
paragraphs 6.106-6.107 above.
6.186 We note that anti-dumping laws may involve a large degree of discretion for the investigating
authorities in terms of deciding on the initiation of an investigation. If one were to apply the
"mandatory/discretionary" doctrine suggested by the United States, such a degree of discretion might
well be sufficient for a panel to declare that, as far as criminal proceedings are concerned, the
1916 Act does not mandate WTO-inconsistent actions. However, we note that Article 18.4 of the
Anti-Dumping Agreement, to which Japan referred in the proceedings, reads as follows:
"Each Member shall take all necessary steps, of a general or particular character, to
ensure, no later than the date of entry in to force of the WTO Agreement for it, the
conformity of its laws, regulations and administrative practices with the provisions of
this Agreement, as they may apply to the Member in question."
6.187 Japan also argues that Article 18.4 applies in this case instead of the
mandatory/non-mandatory dichotomy suggested by the United States. The United States argues that
there is nothing inherent in the anti-dumping context that renders the generally applicable distinction
between mandatory and non-mandatory legislation inapplicable.
6.188 We note that Article 18.4 requires that Members ensure that their anti-dumping laws are in
conformity with the provisions of the Anti-Dumping Agreement as of the time of the entry into force
of that Agreement for the Member concerned. Sin ce we have found that the 1916 Act is subject to
Article VI and the Anti-Dumping Agreement, the obligations of Article 18.4 apply to it and the
United States should have taken all necessary steps, of a general or particular character, to bring the
1916 Act into conformity with the Anti-Dumping Agr eement. We also note that Article 18.4 creates
an obligation of conformity of the laws of a Member no later than the date of entry into force of the
Anti-Dumping Agreement for that Member. In other words, Article 18.4 requires (i) the conformity
of the law as such, regardless of whether it is applied or not and (ii) this conformity must be achieved
as of the entry into force of the WTO Agreement for the Member concerned and permanently
thereafter. In contrast, the mandatory/non-mandatory doctrine is based on the conformity of the law
only in instances of application.
6.189 The notion of "mandatory/non-mandatory legislation" is a generally recognised concept of
international law, whereas Article 18.4 is a treaty provision. Even if one were to assume that this
concept is actually a norm of customary international law, it is well established under general

international law that treaty provisions normally prevail over norms of customary international law.546
We therefore conclude that, to the extent that Article 18.4 requires the conformity of the 1916 Act
with the Anti-Dumping Agreement as of the date of entry into force of the WTO Agreement for the
United States, the notion of mandatory/non-mandatory legislation is no longer relevant in determining
whether the Panel can or cannot review the conformity of the 1916 Act with the Anti-Dumping
Agreement. We note in this respect the approach followed by the panel in the report on EC – Audio
Cassettes. This report, which was not adopted,
547 considered why the mere fact that the initiation of
anti-dumping investigations was discretionary would not make the EC legislation at issue
non-mandatory. The panel stated that:
"[it] did not consider in any event that its task in this case was to determine whether
the EC's Basic Regulation was non-mandatory in the sense that the initiation of
investigations and impositions of duties were not mandatory functions. Should
panels accept this approach, they would be precluded from ever reviewing the content
of a party's anti-dumping legislation."548
The EC – Audio Cassettes panel expressly based its reasoning on the fact that this approach would
undermine the obligation contained in Article 16.6 of the Tokyo Round Anti-Dumping Agreement.
That provision, which contained terms almost identical with Article 18.4 of the WTO Anti-Dumping
Agreement, provided that parties had to bring their laws, regulations and administrative procedures
into conformity with the provisions of the Tokyo Round Anti-Dumping Agreement.549
6.190 Like the panel on EC – Audio-Cassettes with respect to Article 16.6(a) of the Tokyo Round
Anti-Dumping Agreement, we consider that interpreting the provisions of Article 18.4 differently
would undermine the obligations contained in that article and would be contrary to the general
principle of effectiveness
550 by making many disciplines of the Anti-Dumping Agreement non-
enforceable as soon as a Member would claim that the investigating authority has discretion to initiate
or not an anti-dumping investigation.551
6.191 We therefore conclude that the discretion enjoyed by the US Department of Justice to initiate
a case under the 1916 Act should not be interpreted as exempting the 1916 Act from scrutiny under
Article VI of the GATT 1994 and the Anti-Dumping Agreement.

546 See, e.g., ICJ judgement Military and Paramilitary Activities in and against Nicaragua (Nicaragua
v. United States of America), ICJ Reports 1986, p. 137, which stated at paragraph 274 that:
"In general, treaty rules being lex specialis , it would not be appropriate that a State should
bring a claim based on a customary-law rule if it has by treaty already provided means for
settlement of such a claim".
547Op. Cit. On the legal value of unadopted panel reports, see footnote 485 above and its reference to
the Appellate Body report on Japan – Taxes on Alcoholic Beverages.
548 Op. Cit., para. 362.
549 Article 16.6(a) ("National Legislation") of the Tokyo Round Anti-Dumping Agreement provided as
follows:
"Each government accepting or acceding to this Ag reement shall take all necessary steps, of a
general or particular character, to ensure , not later than the date of entry into force of this
Agreement for it, the conformity of its laws, regulations and administrative procedures with
the provisions of this Agreement as they may apply to the Party in question."
550 See United States – Gasoline and Argentina - Safeguards, Op. Cit.
551 We also find support for our reasoning in the report of the panel on United States – Section 301-310
of the Trade Act of 1974, adopted on 20 January 2000, WT/DS152/R, para. 7.54 and footnote 675.

6.192 As a result, we consider that the United States, as the party having raised this defence, failed
to supply convincing evidence that the 1916 Act should be considered as "non-mandatory legislation"
within the meaning of GATT 1947/WTO practice. 552 We therefore find that the 1916 Act cannot be
considered to be a "non-mandatory" law.553
(c) Concluding remarks on the applicability of Article VI of the GATT 1994 and the
Anti-Dumping Agreement to the price discrimination test of the 1916 Act
6.193 First, we would like to recall that our findings are based on an objective interpretation of the
terms of Article VI and the Anti-Dumping Agreement. Our findings do not contest the fact that the
US authorities and US courts may, in good faith, consider that the 1916 Act addresses anti-trust
issues. With respect to the interpretations made by the US courts, our findings do not affect certain
aspects of the 1916 Act which could be claimed to be of an anti-trust nature, since the interpretations
made by US courts did not affect the price discrimination test which we found was similar to the
definition of "dumping" in Article VI.
6.194 The United States warned the Panel of the implications of an interpretation of the price
discrimination test of Article VI that would be so broad that it could make Article VI of the
GATT 1994 applicable to all anti-trust laws, including those of Japan, when such laws address
situations of transnational price discrimination.
6.195 We recall that we were requested to review the conformity of the 1916 Act with the
provisions of the WTO Agreement, not to address the general issue of the relationship between trade
law and anti-trust law. In order to assess the WTO-compatibility of the 1916 Act, we interpreted the
provisions of Article VI:1 of the GATT 1994 in conformity with the general principles of
interpretation of public international law, as embodied in the Vienna Convention. This exercise led us
to conclude that the terms of Article VI, interprete d in their context and in the light of the object and
purpose of GATT 1994 and the WTO Agreement, applied to the form of transnational price
discrimination addressed by the 1916 Act. The United States did not provide us with any evidence or
argument that would demonstrate that we should have read in Article VI:1 a limitation addressing the
risk highlighted by the United States in the previous paragraph.
554 As recalled by the Appellate Body,
we are not to import into the text of the WTO Agreement conditions that do not appear from its terms

552 We recall that we found in paras. 6.101-6.102 above that the burden of proof established by the
US – Tobacco panel was not applicable in the present case. In application of the rules on burden of proof
recalled in paras. 6.24-6.26 above, we consider that it wa s up to the United States to provide sufficient evidence
to establish a prima facie case for its defence.
553 Having found that the 1916 Act cannot be considered as "non-mandatory" legislation within the
meaning of that concept under GATT1947/WTO practice, we do not find it necessary to address the arguments
of the parties on the impact of Article XVI:4 of the Agreement Establishing the WTO on the application of that
concept.
554 We note that, in any event, the scope of the WTO Agreement does not exclude a priori restrictive
business practices. Thus, the fact that the 1916 Act would be an anti-trust law would not per se be sufficient to
exclude the application of WTO rules to that law. We note that panels under GATT 1947 and the WTO have
addressed various aspects of restrictive business practices initiated by governments when such practices had the
effect of impeding market access of foreign products or entry of foreign enterprises (see e.g., Japan – Trade in
Semiconductors, adopted on 4 May 1988, BISD 35S/116; Japan – Photographic Films , adopted on
22 April 1998, WT/DS44R and M. Matsushita: Restrictive Business Practices and the WTO/GATT Dispute
Settlement Process in International Trade Law and the GATT/WTO Dispute Settlement System
E.-U. Petersmann Ed. (1997), p. 359. Consequently, we do not consider the dichotomy trade law/anti-trust law,
to the extent that it would be based on the assumption that WTO disciplines are not intended to apply to
business restrictive practices, to be a limitation to the application of WTO rules and disciplines.

interpreted in accordance with the Vienna Convention.555 Our conclusion is, therefore, fully consistent
with our mandate.
6.196 In any event, we are not convinced that our conclusion, if applied outside the context of this
dispute, would generate the effect referred to by the United States.
6.197 First, we note that transnational price discrimination of the type covered by the definition of
"dumping" in Article VI:1 of GATT 1994 is only one narrowly defined type of price discrimination.
Other types of price discrimination, beginning wi th primary-line price discrimination under the
Robinson-Patman Act, do not fall within the scope of the definition of "dumping" in Article VI:1. 556
In particular, the definition of Article VI:1 does not address price discrimination within the territory of
a given jurisdiction.
6.198 Second, under Article VI:1 of the GATT 1994, the identification of "dumping" is the starting-
point for any determination of injurious dumping. It is the only possible basis for the initiation of an
anti-dumping investigation by a Member and for the imposition of measures. Injury not causally
linked to the dumping cannot be addressed through anti-dumping action. 557 Comparatively, under
anti-trust law, the causes of a given market disruption can be several. When determining what could
be at the origin of certain prices, anti-trust invest igators will try to identify specific practices such as
price conspiracy or abuse of dominant position. It is the understanding of the Panel that, under
anti-trust law, transnational price discrimination of the type covered by the definition of "dumping" in
Article VI:1 of GATT 1994 is not sufficient as such to form the basis for a claim of violation of
anti-trust law, even in the presence of a disruption on the export market based on the prices found on
that market. It is necessary to demonstrate other specific practices, such as monopoly, abuse of
dominant position, price agreement or concerted practices, of which transnational price discrimination
may constitute, at most, only supporting evidence.
6.199 We therefore conclude that the possibility that our findings with respect to Article VI:1 of the
GATT 1994 could affect the application of anti-tr ust laws of Members is very limited, since
transnational price discrimination as defined in Article VI :1 of GATT 1994 is only one limited form
of price discrimination that may be considered under anti-trust law. Moreover, transnational price
discrimination is unlikely to constitute by itself a practice which anti-trust law would consider to be a
cause for imposition of sanctions.
6.200 Having found that Article VI of the GATT 1994 is applicable to the 1916 Act because the
latter addresses "dumping" and Article VI and the Anti-Dumping Agreement are applicable as soon as
a Member's measure objectively addresses "dumping" within the meaning of Article VI, we proceed
to address the claims of violation of Article VI:2 and the Anti-Dumping Agreement. On the basis of
our findings, we will consider whether it is necessary to address the issue of the applicability and
violation of Article III:4 of the GATT 1994.

555 See, e.g., Appellate Body Report in India – Patent (US) , Op. Cit ., para. 45, where the Appellate
Body stated that the principles of interpretation contained in Article 31 of the Vienna Convention "neither
require nor condone the imputation into a treaty of word s that are not there or the importation into a treaty of
concepts that were not intended."
556 At our request, the United States confirmed that in order for the Robinson-Patman primary-line
price discrimination to apply, both commodities involved in the alleged price discrimination must be sold for
use, consumption or resale in the United States (see also Zenith I, Op. Cit., p. 246).
557 See Article 3.5 of the Anti-Dumping Agreement, which provides that injuries caused by certain
factors must not be attributed to the dumped imports and includes among those factors "trade restrictive
practices of and competition between the foreign and domestic producers". This provision would seem to imply
that transnational price discrimination of the kind defined in Article VI:1 is not considered to be part of the
"competition" practices between the foreign and domestic producers.

D. VIOLATION OF ARTICLE VI:2 OF THE GATT 1994 AND OF ARTICLE 18.1 OF THE
ANTI-DUMPING AGREEMENT
1. Approach of the Panel
6.201 Japan claims that the 1916 Act violates Article VI:2 of the GATT 1994 and Article 18.1 of
the Anti-Dumping Agreement because it provides fo r other sanctions than anti-dumping duties, such
as damages, fines or imprisonment. In support of its claim, Japan argues that Article VI:2 of the
GATT 1994 authorises only one type of measure in response to dumping: the imposition of
anti-dumping duties. Article 18.1 of the Anti-Dumping Agreement reaffirms the understanding that
Article VI of the GATT 1994 is the sole GATT-authorised remedy for dumping.
6.202 The United States replies that Article VI and the Anti-Dumping Agreement do not govern all
measures directed at dumping, but only laws and measures that attempt to counteract injurious
dumping through the imposition of duties. Other m easures are allowed as long as they are not
inconsistent with other provisions of the GATT 1994.
6.203 In support of their respective positions, the parties refer to the ordinary meaning of the terms
of Article VI:2 and of Article 18.1. They also refer to the context of those provisions, such as
footnote 24 to Article 18:1 of the Anti-Dumping Agreement and Articles I:1 and II:2(b) of the
GATT 1994. They also consider the object and purpose of the GATT 1994 and the Anti-Dumping
Agreement and they address the negotiating history of GATT 1947 and the Anti-Dumping
Agreement, as well as the Tokyo Round Anti-Dumping Agreement. In application of Article 31 of the
Vienna Convention, we find it relevant to consider Article 18.1 as part of the context of Article VI:2
6.204 We note that Japan based its claim on both Article VI:2 of the GATT 1994 and Article 18.1 of
the Anti-Dumping Agreement. We recall that, in section VI.B.4.(c) above, we considered the
relationship between Article VI of the GATT 1994 and the Anti-Dumping Agreement to be similar to
the relationship between Article VI of the GATT 1994 and the Agreement on Subsidies and
Countervailing Measures and that between Article XIX of the GATT 1994 and the Agreement on
Safeguards, as established by the Panel Report on Argentina – Safeguards and confirmed by the
Appellate Body in the same case.
558 As a result, we shall ensure that our findings are made "in a way
that gives meaning to [both] of them, harmoniously." In this respect, we recall that Article 18.1
provides that "No specific action against dumping of exports from another Member can be taken
except in accordance with the provisions of GATT 1994 , as interpreted by this Agreement" (emphasis
added). On the basis of these terms, we are of the view that if we find a violation of Article VI:2
considered in its context (in particular the Anti -Dumping Agreement, including if it adds to the
content of Article VI:2),559 a violation of Article 18.1 will be automatically established.560 If we do not
find that the terms of Article VI:2, interpreted in their context and in the light of the object and
purpose of the GATT 1994 and the WTO Agreement, support Japan's claim, we will proceed to
review Article 18.1 as we will have done with Article VI:2.
6.205 Therefore, having regard to the arguments raised by the parties, we shall clarify the meaning
of Article VI:2 of the GATT 1994 by applying the general principles of interpretation of public

558 See Appellate Body Report, Op. Cit., para. 81.
559 See Panel Report in Brazil – Dessicated Coconut , Op. Cit., para. 246 and Appellate Body Report in
the same case, p. 17.
560 We are aware of the content of footnote 24 to Article 18.1. However, this footnote, like the rest of
Article 18.1, are part of the context in which Article VI:2 must be interpreted. If we reach the conclusion that
Article VI:2 has been violated by the 1916 Act in spite of the terms of footnote 24, there will be no reason for
not finding a violation of Article 18.1.

international law as embodied in the Vienna Convention, 561 as we are instructed by Article 3.2 of the
DSU and the Appellate Body practice.
6.206 We are aware of the fact that Article 31 of the Vienna Convention provides for one "General
Rule of Interpretation", as its title states. For the sake of clarity, we will address one after the other
the factors to be reviewed pursuant to that Article. However, each of these steps should be seen as
part of one single process. If necessary to confirm the meaning resulting from the application of
Article 31, or to determine the meaning if the interpretation under Article 31 leaves the meaning

561 Article 31 ( General Rule of Interpretation ) of the Vienna Convention reads as
follows:
"1. A treaty shall be interpreted in good faith in accordance with the
ordinary meaning to be given to the terms of the treaty in their
context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall
comprise, in addition to the text, including its preamble and
annexes:
(a) any agreement relating to the treaty which was
made between all the parties in connexion with
the conclusion of the treaty;
(b) any instrument which was made by one or more
parties in connexion with the conclusion of the
treaty and accepted by the other parties as an
instrument related to the treaty.
3. There shall be taken into account together with the context:
(a) any subsequent agreement between the parties
regarding the interpretati on of the treaty or the
application of its provisions;
(b) any subsequent practice in the application of the
treaty which establishes the agreement of the
parties regarding its interpretation;
(c) any relevant rules of international law applicable
in the relations between the parties.
4. A special meaning shall be given to a term if it is established that
the parties so intended."
Article 32 of the Vienna Convention (Supplementary Means of Interpretation) reads as follows:
"Recourse may be had to supplementary means of interpretation, including
the preparatory work of the treaty and the circumstances of its conclusion, in
order to confirm the meaning resulting from the application of article 31, or
to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable
."
The Panel is mindful that other provisions of the Vienna Convention, such as Article 33 ( Interpretation of
Treaties Authenticated in Two or More Languages ) are also relevant for the in terpretation of international
agreements.

ambiguous or obscure or leads to results manifestly absurd or unreasonable, we may have recourse to
the supplementary means of interpretation under Article 32 of the Vienna Convention. On that basis,
we will determine whether the 1916 Act, because it provides for other forms of sanctions than
anti-dumping duties, violates Article VI:2 and Article 18.1 of the Anti-Dumping Agreement.
2. Analysis of the terms of Article VI:2 of the GATT 1994
(a) Arguments of the parties
6.207 Japan argues that Article VI of the GATT 1994 authorises only one measure in response to
dumping: the imposition of an anti-dumping duty. Under Article VI:2, a Member may levy an
anti-dumping duty equal to the margin of dumping or less than the margin of dumping, or it may
decide to take no action. Any other action would violate Article VI. The text of Article 18.1 and
footnote 24 of the Anti-Dumping Agreement reaffirm the understanding that Article VI of the
GATT 1994 is the sole GATT-authorised remedy for dumping. A Member may affect imports
through actions authorised by other provisions of the GATT 1994. For example, in a situation
involving dumping, a Member could impose a safeguard measure after complying with the provisions
of Article XIX of the GATT 1994 and the Agreement on Safeguards. However, the objective of the
action itself would not be to address the dumping, but rather its effect. Footnote 24 simply avoids the
possible conflict between other actions against imports under the WTO and the obligation under
Article 18.1 not to take other action against dumping. No provision of the GATT 1994 justifies the
procedures and penalties provided by the 1916 Act. The reference of the United States to Article III is
irrelevant since this article does not enable a Member to take specific measures against dumping.
6.208 The United States argues that Japan's interpretation that Article VI:2 of the GATT 1994 and
Article 18.1 of the Anti-Dumping Agreement establish that anti-dumping duties are the exclusive
remedy for injurious dumping is contradicted by the ordinary meaning of the terms used by the two
articles in question. As made clear by footnote 24 to Article 18.1, a Member may take a measure
against injurious dumping even when such measures are not explicitly set forth in Article VI of the
GATT 1994 or the Anti-Dumping Agreement, as long as the measure is not inconsistent with the
other provisions of the GATT 1994. Nothing in Article VI:2 addresses whether anti-dumping duties
are the exclusive remedy for dumping. It simply states that a Member "may" levy an anti-dumping
duty to offset or prevent dumping, it does not st ate that a Member "may only" levy anti-dumping
duties. If the word "only" had been intended, the text could and would have said so.
6.209 Moreover, according to the United States, Article VI only governs laws and measures that
attempt to counteract injurious dumping through the imposition of duties, based on findings of
"dumping" and "injury". When Article VI is read in the context of Articles I:1 and II:1 of the
GATT 1994, it can be seen that the coverage of Article VI is limited to laws or measures that attempt
to counteract injurious dumping through the imposition of anti-dumping duties. Article VI establishes
a right to impose duties, it does not prohibit the imposition of other measures. Moreover, Article VI
does not address the issue. It is Article 18.1 of the Anti-Dumping Agreement that addresses that
issue, and it makes clear that a Member may take whatever other action is consistent with other
GATT 1994 provisions. If a law imposes damages on importers, it does not fall within the scope of
Article VI, since it does not impose duties, but it would be an internal law subject to Article III:4 of
the GATT 1994.

(b) Ordinary meaning of Article VI:2, first sentence, of the GATT 1994
6.210 We note that with respect to Article VI:2 of the GATT 1994, the parties have exclusively
referred to the first sentence, which provides as follows:
"In order to offset or prevent dumping, a contracting party may levy on any dumped
product an anti-dumping duty not greater in amount than the margin of dumping in
respect of such product."
6.211 In that article, the only term the meaning of which is actually debated by the parties is the
verb "may". The ordinary meanings of the verb "m ay" as an auxiliary verb include "have ability or
power to, can"
562 Taken on its own, this verb could mean that Members have the possibility only to
impose duties or that they have a choice between duties and other types of measures. If the word
"may" was used in the first meaning, it could be argued that the term "only" should have been added
right after it so as to limit its meaning. However, such an argument disregards the immediate context
of the word "may". The terms "in order to offset or prevent dumping" set up the framework in which
the term "may" must be understood. By specifying that the purpose of anti-dumping is to "offset"
dumping, not to impose punitive measures, Article VI:2, first sentence, limits the meaning of the word
"may" to giving the choice between a duty equal to the dumping margin or a lower duty, not between
anti-dumping duties and other measures.
6.212 In other words, the thrust of the first sentence of Article VI:2 is to make the imposition of
duties facultative and to limit in any event that amount to the dumping margin. If, as suggested by the
United States, that sentence, and in particular the word "may" had been meant to allow other measures
than anti-dumping duties, it is reasonable to expect that this would have been specified. We recall
that Article VI was meant to regulate the use of anti-dumping by WTO Members. It would have been
logical to list the other possible sanctions, especially if those sanctions could be more severe than the
imposition of offsetting duties.
563 We therefore conclude that the ordinary meaning of the terms of the
first sentence of Article VI:2 support the view that anti-dumping duties are the only type of remedies
allowed under Article VI of the GATT 1994.
(c) Context of Article VI:2 of the GATT 1994
6.213 We note that the immediate context of Article VI:2 within Article VI confirms our
understanding of the word "may". The United States stresses the fact that the words "may" was used
in Article VI:2, rather than "shall", as in other paragraphs of Article VI. In our opinion, the term
"shall", as used in paragraphs 3 to 6 was not necessary in paragraph 2 of Article VI if it was meant to
be permissive, not mandatory to impose duties, and "shall" was not necessary either to express the
idea that only anti-dumping duties could be imposed.
6.214 As noted above, we see Article VI and Article 18.1 as part of the same "package" of rights
and obligations, if only because the Anti-Dumping Agreement interprets Article VI of the
GATT 1994 (see the terms of Article 18.1, below). As a result, Article 18.1 is particularly relevant as
context of Article VI, but we shall also review the other provisions referred to by the parties: Article I
and II of the GATT 1994 and Article 1 of the Anti-Dumping Agreement.

562 See The New Shorter Oxford English Dictionary (1993), p. 1721. It is evident that while we review
the ordinary meaning, our reading of the dictionary is al ready made selective by the broad context of the term.
For instance, we left aside the definition of "may" as "have the possibility, opportunity or suitable conditions
to…" or the definition of "may" which, in the interpretation of some statutes means "shall, must".
563 We note in that respect that Article 7.2 of the Anti-Dumping Agreement, which provides for the
types of provisional measures that may be imposed, lists the measures that may be taken, i.e. "provisional duty
or, preferably, a security".

6.215 Article 18.1 provides as follows:
"No specific action against dumping of exports from another Member can be taken
except in accordance with the provisions of GATT 1994, as interpreted by this
Agreement. [footnote 24]"
Footnote 24 to Article 18.1 reads as follows:
"24 This is not intended to preclude action under other relevant provisions of
GATT 1994, as appropriate."
6.216 We consider that the provisions of Article 18.1 as such limit the anti-dumping instruments
that may be used by Members to those expressly contained in Article VI and the Anti-Dumping
Agreement. Except for provisional measures and price undertakings, the only type of remedies
foreseen by the Anti-Dumping Agreement is the imposition of duties. We also note that Article 9.1 of
the Anti-Dumping Agreement
564 establishes a clear connection between the calculation of a dumping
margin provided for in Article 2 of that agreement and the final measures that may be imposed. We
therefore conclude that the context of Article VI confirms the provisional conclusion we had reached
on the basis of the ordinary meaning.
6.217 The United States argues that the terms of footnote 24 to Article 18.1 of the Anti-Dumping
Agreement, like footnote 16 to Article 16.1 of the Tokyo Round Anti-Dumping Agreement, does not
"lock" a Member into levying anti-dumping duties when faced with a factual situation constituting
injurious dumping. Footnote 24 leaves the option open for applying other measures that are in
accordance with the GATT 1994. According to the United States, if the measure is of a nature that is
simply not regulated by the GATT 1994, as is the case for the 1916 Act, the measure is a fortiori
consistent with GATT 1994.
6.218 We consider that footnote 24 does not prevent Members from addressing the causes or effects
of dumping through other trade policy instruments allowed under the WTO Agreement. Nor does it
prevent Members from adopting other types of measures which are compatible with the
WTO Agreement. Such a possibility does not affect our conclusion that, when a law of a Member
addresses the type of price discrimination covered by Article VI and makes it the cause for the
imposition of anti-dumping measures, that Member has to abide by the requirements of Article VI and
the Anti-Dumping Agreement. Whether or not Article VI applies does not depend on whether a
Member addresses dumping through the imposition of duties or through the imposition of other
remedies, with the implication that Article VI applies only if a Member addresses dumping through
the imposition of duties, as opposed to, e.g., fines on importers. In our opinion, the application of
Article VI depends on whether the practice that tri ggers the imposition of the measures is "dumping"
within the meaning of Article VI:1 of the GATT 1994. If the interpretation suggested by the
United States were to be followed, Members could address "dumping" without having to respect the
provisions of Article VI of the GATT 1994 and the Anti-Dumping Agreement. Such an interpretation
would deprive Article VI of the GATT 1994 and the Anti-Dumping Agreement of their useful effect
within the framework of rules and disciplines imposed by the WTO Agreement.

564 Article 9.1 provides as follows:
"The decision whether or not to impose an anti-dumping duty in cases where all requirements
for the imposition have been fulfilled, and the decision whether the amount of the
anti-dumping duty to be imposed shall be the full margin of dumping or less, are decisions to
be made by the authorities of the importing Member. It is desirable that the imposition be
permissive in the territory of all Members, and that the duty be less than the margin if such
lesser duty would be adequate to remove the injury to the domestic industry."

6.219 The United States argues that the coverage of Article VI, read in the context of Articles I:1
and II:1 of the GATT 1994, is limited to laws or measures that attempt to counteract injurious
dumping through the imposition of anti-dumping duties. Article VI is a carve-out to those articles,
and merely allows Members to impose anti-dumping duties above the relevant bound rate and on a
non most-favoured-nation basis. It does not follow that Article VI (or Article 18.1 of the
Anti-Dumping Agreement) would itself act as a prohibition against actions that Members may take.
Rather, according to the United States, Article VI is properly viewed as establishing a right that a
Member has, that is the right to impose duties to counteract injurious dumping.
6.220 We do not regard the US argument as compelling. The fact that Article VI provides for a
carve-out to Articles I and II or, as the panel report on United States – Countervailing Duties on
Fresh, Chilled and Frozen Pork from Canada puts it, "an exception to basic principles of the General
Agreement",
565 does not support the argument that Article VI only applies to laws that purport to
address injurious dumping through anti-dumping duties. It merely confirms that duties may be
imposed under Article VI without violating Articles I and II of the GATT 1994. This conclusion does
not affect our interpretation of Article VI:2 based on the ordinary meaning of that provision.
6.221 As part of the context of Article VI:2, we find the terms of Article 1 of the Anti-Dumping
Agreement more relevant. Article 1 provides as follows:
"An anti-dumping measure shall be applied only under the circumstances provided
for in Article VI of GATT 1994 and pursuant to investigations initiated [footnote 1]
and conducted in accordance with the provisions of this Agreement. The following
provisions govern the application of Article VI of GATT 1994 in so far as action is
taken under anti-dumping legislation or regulations."
Footnote 1 to Article 1 reads as follows:
"1 The term "initiated" as used in this Agreement means the procedural action
by which a Member formally commences an investigation as provided in Article 5."
6.222 In this respect, we requested the parties to provide us with their understanding of the meaning
of the term "measure" in Article 1, so as to have a clearer view of the impact of the context of
Article VI:2. Both parties referred to the three types of measures allowed under the Anti-Dumping
Agreement. In addition, the United States argued that the word "measure" is qualified by the term
"anti-dumping", stating that this term limits the scope of Article 1. In our opinion, an anti-dumping
measure is a measure aimed at counteracting dumping as such, as defined in Article VI:1 of the
GATT 1994. Members may decide to address under other WTO provisions the causes or the effects
of dumping. By doing so, they would not adopt "anti-dumping measures" within the meaning of
Article VI and the Anti-Dumping Agreement. However, if they objectively address a form of price
discrimination that meets the definition of Article VI, this must be in accordance with Article VI and
the Anti-Dumping Agreement, which themselves do no t refer to any other remedy than duties. We
therefore conclude that the context of Article VI:2 of the GATT 1994 confirms our understanding of
the meaning of that provision based on its ordinary meaning.
(d) Object and purpose
6.223 We note that the parties have not, in their arguments regarding the meaning of Article VI:2
addressed the object and purpose of the GATT 1994, of the Anti-Dumping Agreement or of the
WTO Agreement in general. We recall that the prea mble of a treaty may assist in identifying the
object and purpose of that treaty. However, as far as dumping is concerned, the preambles of the

565 Adopted on 11 July 1991, BISD 38S/30, para. 4.4. We note that the reasoning of the panel in that
case related to Article VI:3 of the GATT 1947.

WTO Agreement and the GATT do not provide precise directives. We note however that both
preambles refer to the "substantial reduction of tariffs and other barriers to trade and to the elimination
of discriminatory treatment in international trade relations". We also note that the WTO preamble
refers to the development of a "more viable and durable multilateral trading system". We consider
that the approach of the United States which would allow Members to take any type of measure
against dumping as such outside the framework of Article VI, as long as they are not incompatible
with other provisions of the WTO Agreement, does not seem to be commensurate with the objectives
highlighted above.
6.224 Moreover, the fact that dumping may only be subject to countermeasures if it causes injury
and then only through anti-dumping duties promotes, in our opinion, the durability and viability of the
trading system. As a matter of fact, the WTO Agreement does not regulate dumping, but
anti-dumping, even though by doing so it also recognises the negative effect of dumping. One should
also recall that the developments that took place through the various agreements on anti-dumping
have imposed clearer conditions on recourse by Members to anti-dumping instruments. The effect of
these efforts would be significantly limited if a Member could be exempted of their obligations by
simply choosing to impose any other measure than anti-dumping duties to counteract dumping as
such.
6.225 We therefore consider that the object and purpose of the WTO Agreement and the
GATT 1994 confirm our interpretation of the terms of Article VI:2 taken in their context.
(e) Preparatory work
6.226 We could conclude our interpretation of Article VI:2 of the GATT 1994 on the basis of the
rule of Article 31 of the Vienna Convention. However, since the parties have discussed the meaning
of the negotiating history at length, we consider it in order to determine if it confirms the meaning of
Article VI:2 we have identified under Article 31.
6.227 The parties have referred to a number of documents relating to the negotiation of the Havana
Charter and the GATT.
566 We do not consider it necessary to review all these materials since our
analysis under Article 31 of the Vienna Convention does not leave the meaning of Article VI
ambiguous or obscure and does not lead to a manifestly absurd or unreasonable result. We recall,
however, that the parties have, in particular, discussed the Report of the Working Party on
Modifications to the General Agreement, which was adopted by the CONTRACTING PARTIES on
1-2 September 1948 in the context of the revision of Article VI of GATT 1947.
567 T h i s r e p o r t
mentions that:
"endorsing the views expressed by Sub-Committee C of the Third Committee of the
Havana Conference, [footnote omitted] [it] agreed that measures other than
compensatory anti-dumping and countervailing duties may not be applied to
counteract dumping or subsidization except in so far as such other measures are
permitted under other provisions of the General Agreement."568
6.228 We consider that the first part of the sentence ("measures other than compensatory
anti-dumping and countervailing duties may not be applied to counteract dumping or subsidization")
confirms our understanding of Article VI. The second part of the sentence ("except in so far as such
other measures are permitted under other provisions of the General Agreement"), may be understood

566 See section III.E.3. above.
567 See the discussion in section III.F above.

as allowing Members to counter dumping through other measures than anti-dumping duties. 569 The
United States argues that a number of measures could be legally applied against dumping, such as
raising unbound tariffs, tariff renegotiation, safeguard measures or countervailing measures. We note,
however, that even though those measures may be legally applied to address dumping, the basis for
their imposition would not objectively be "dumping", but its causes or effects. Safeguard measures or
the increase of unbound tariffs would apply on a most-favoured-nation basis. So would the results of
a tariff renegotiation. Unless all Members were dumping, dumping could not be considered as the
objective reason for the imposition of the measures or of the renegotiated tariff vis-à-vis each
Member. Countervailing measures can only be imposed in relation to subsidies. The fact that those
subsidies may allow their beneficiaries to dump is not directly relevant to the imposition of the
countervailing measures. Therefore, the sentence quoted above can only be understood as having the
same meaning as footnote 24 to Article 18.1 of the Anti-Dumping Agreement.
570
6.229 We conclude that the supplementary means of interpretation of Article 32 of the Vienna
Convention confirm our interpretation of Article VI:2 of the GATT 1994 based on the ordinary

569 We note in this respect that the United States refers to John H. Jackson, World Trade and the Law of
GATT (1968), p. 411, where it is mentioned that:
"Although Article VI carves out an exception to GATT obligations for anti-dumping or
countervailing duties, nevertheless, measures that do not violate other GATT provisions can
also be used to counteract dumping or subsidie s. Thus, insofar as tariffs on a particular
product are not bound in a GATT schedule, a country that found that the product was being
dumped could raise its tariffs without limit to counteract the dumping, and go even further and
punish the dumper."
570 See para. 6.218 above. We also recall the reasons stated in the report of the Working Party
established by Sub-Committee C of the Third Committee of the Havana Conference (E/CONF.2/C.3/C/18,
22 January 1948) for the deletion of paragraph 6 of Article 34 of the Geneva Draft Charter of the International
Trade Organisation. Paragraph 6 was similar to paragraph 7 of the original Article VI of the GATT 1947 and
read as follows:
"No measures other than anti-dumping or countervailing duties shall be applied by any
contracting party in respect of any product of the territory of any other contracting party for
the purpose of offsetting dumping or subsidization."
The question had been prompted by the issue whether paragraph 6 should be deleted or amended in the event
that it could be interpreted so as to limit action perm itted under Articles 13 and 14 of the Geneva Draft. The
report stated that:
 "The Working Party was evenly divided as to whether the terms of paragraph (6) could be
construed as limiting the rights of Members under Articles 13 and 14. It was in agreement,
however, that paragraph (6) was unnecessary and that its deletion would not effect any change
in substance."
These statements confirm the intent to restrict the measures allowed to counteract dumping as such to offsetting
duties. The fact that Article VI allows only for duties to counteract dumping practices as such is also confirmed
by the Report of the Review Working Party on "Other Barriers to Trade", which mentions that:
"With respect to paragraph 3 of Article VI, the Working Party considered a proposal
submitted by New Zealand which would have permitted under certain circumstances the use
of quantitative restrictions to offset subsid ization or dumping. This proposal did not receive
the support of the Working Party, and has not been recommended." (BISD 3S/223, as quoted
in GATT, Analytical Index: Guide to GATT Law and Practice, Updated 6
th Edition (1995), p.
238)

meaning of its terms taken in their context and in the light of the object and purpose of the
WTO Agreement.
3. Conclusion
(a) Conclusion on the violation of Article VI:2 of the GATT 1994 and Article 18.1 of the
Anti-Dumping Agreement
6.230 We therefore find that Article VI:2 of the GATT 1994 provides that only measures in the
form of anti-dumping duties may be applied to counteract dumping as such 571 and that, by providing
for the imposition of fines or imprisonment or for the recovery of treble damages, the 1916 Act
violates Article VI:2 of the GATT 1994.
6.231 Having regard to our comments in paragraph 6.204 above and for the reasons mentioned
therein, we conclude that the 1916 Act, because it violates Article VI:2 of the GATT 1994 by
providing for other remedies than anti-dumping duties, is not "in accordance with the provisions of
GATT 1994 as interpreted by [the Anti-Dumping Agreement]", within the meaning of Article 18.1.
As a result, the 1916 Act also violates Article 18.1 of the Anti-Dumping Agreement.
6.232 We also recall our conclusion in paragraph 6.183 above. Since we found a violation of
Article VI:2 of the GATT 1994 and of Article 18.1 of the Anti-Dumping Agreement, we do not find it
necessary to determine what would be the legal consequences of a consistent WTO-compatible
interpretation of the 1916 Act by US courts in the future.
(b) Remarks on the burden of proof with respect to the violation of Article VI:2 of the
GATT 1994 and of Article 18.1 of the Anti-Dumping Agreement
6.233 The Panel divided its own analysis along lines that did not always correspond to the
argumentation followed by each party, since each adopted a different approach to the problem before
us.
572 However, we consider that Japan has established a prima facie case for each point addressed by
the Panel in relation to the applicability of Article VI and the Anti-Dumping Agreement and regarding
the violation of Article VI:2 of the GATT 1994 and Article 18.1 of the Anti-Dumping Agreement. 573
The United States did not sufficiently rebut them. Moreover, we consider that the United States did
not establish such a prima facie case with respect to the defences it raised, especially regarding the
jurisdiction of the Panel under Article VI and the Anti-Dumping Agreement and the non-mandatory
nature of the 1916 Act.
E. V
IOLATION OF ARTICLE VI OF THE GATT 1994 AND OF ARTICLES 1, 2, 3, 4, 5, 9, 11, AND
18.1 OF THE ANTI-DUMPING AGREEMENT
1. Preliminary remarks
6.234 We recall that Japan makes several additional claims under Article VI of the GATT 1994 and
the Anti-Dumping Agreement. We already found that the 1916 Act violates Article VI:2 of the
GATT 1994 and Article 18.1 of the Anti-Dumping Agreement by providing for damages, fines or
imprisonment, which are not allowed under those provisions. We are of the view that "adapting" the

571 This is of course without prejudice to the accepta nce of price undertakings, as provided for in the
Anti-Dumping Agreement.
572 See para. 6.111 above.
573 Since Article 18.1 of the Anti-Dumping Agreement specifies that actions must be taken "in
accordance with the provisions of GATT 1994 as interprete d by this Agreement" and since we found a violation
of Article VI of the GATT 1994 , we consider that such a violation automatically leads to a violation of
Article 18.1.

1916 Act, by amendment or otherwise, to the requirement of Article VI:2 and Article 18.1 may not be
sufficient to make the 1916 Act fully WTO-compatible. 574 We also recall that, as mentioned by the
Appellate Body in its report on Australia – Measures Affecting Importation of Salmon,575
"A panel has to address those claims on which a finding is necessary in order to
enable the DSB to make sufficiently precise recommendations and rulings so as to
allow for prompt compliance by a Member with those recommendations and rulings
'in order to ensure effective resolution of the dispute to the benefit of all Members.'"
We are of the view that additional findings with re spect to the other claims of Japan under Article VI
and the Anti-Dumping Agreement would assist the DSB in making sufficiently precise
recommendations and rulings so as to allow for prom pt compliance by the United States with those
recommendations and rulings. We therefore proceed to address those claims to the extent necessary,
reserving our right to exercise judicial economy if we consider that certain additional findings are not
necessary, within the meaning of the quote from the Appellate Body Report above.
6.235 We also note that Japan, in its request for the establishment of a Panel (WT/DS162/3), did not
specify the paragraphs of the provisions of the Anti-Dumping Agreement which it cited in support of
its claims. Furthermore, in its claims based on both Article VI and the Anti-Dumping Agreement,
Japan did not specify either which paragraph of Article VI it considered to be breached. We note that,
in Korea – Definitive Safeguard Measures on Imports of Certain Dairy Products , the Appellate Body
considered that the complainant in that case should have been more specific in presenting its claims in
its request for the establishment of a panel, mostly since the provisions to which it referred had
several paragraphs, each containing distinct obligations.
576 In this respect, the situation in the present
case is quite similar. However, unlike Korea in the above-mentioned case, the United States did not
claim that it had been prejudiced by the lack of precision of Japan's claims under the Anti-Dumping
Agreement and Article VI of the GATT 1994. We read the requirements of Article 6.2 of the DSU in
the light of the above-mentioned Appellate Body report and in the light of the Appellate Body Report
in European Communities – Bananas as primarily designed to protect the respondent. We therefore
consider that if the respondent does not argue that it has been prejudiced by the lack of specificity of
the claims and the Panel is satisfied that it can make an objective assessment of the matter before it,
including an objective assessment of the applicabilit y of and conformity of the measure at issue with
the relevant covered agreements, there is no reason for the Panel to reject the claims concerned
propio motu.
6.236 We note however that the United States does not specifically reply to each of the claims of
Japan. It states that the claims raised by Japan under various provisions of the Anti-Dumping
Agreement and Article VI rest on the assumption that the Panel has already found the 1916 Act to be
in violation of Article VI:2 of the GATT 1994 and Article 18.1 of the Anti-Dumping Agreement.
Thus, according to the United States, each of these claims has the same faulty premises.
6.237 Having regard to our findings under Article VI:2 of the GATT 1994 and Article 18.1 of the
Anti-Dumping Agreement, we also take note of the arguments of the United States and do not
assimilate its absence of reply to an acknowledgement that Japan's claims are justified.

574 While this statement is not made under Article 19.1 of the DSU, we note that, pursuant to that
provision, we are entitled to suggest ways in which the Member concerned could implement the Panel's
recommendations.
575 See Appellate Body Report on Australia – Measures Affecting Importation of Salmon , adopted on
6 November 1998, WT/DS/18/AB/R, para. 223.
576 Adopted on 13 January 2000, WT/DS98/AB/R, paras. 129 and 131.

2. Review of the additional claims of Jap an under Article VI of the GATT 1994 and the
Anti-Dumping Agreement
(a) Violation of Article VI:1 of the GATT 1994 and Article 1 of the Anti-Dumping Agreement
6.238 Japan claims that the 1916 Act provides for the application of sanctions outside the
circumstances specified in Article VI:1 of the GATT 1994 and Article 1 of the Anti-Dumping
Agreement. Specifically, the 1916 Act provides for the imposition of measures in the absence of an
investigation initiated and conducted in accordance with the provisions of the Anti-Dumping
Agreement, and without establishing facts required by Article 1 thereof.
6.239 We recall that Article 1 of the Anti-Dumping Agreement reads as follows:
"An anti-dumping measure shall be applied only under the circumstances provided
for in Article VI of GATT 1994 and pursuant to investigations initiated and
conducted in accordance with the provisions of this Agreement. The following
provisions govern the application of Article VI of GATT 1994 in so far as action is
taken under anti-dumping legislation or regulations."
6.240 We note a violation of Article 1 may result, inter alia, from the fact that the 1916 Act does
not provide for investigations consistent with the Anti-Dumping Agreement. Japan has made other
claims under other provisions of the Anti-Dumping Agreement. If we find that any of these claims is
justified, we will conclude that Article 1 is violated.
6.241 Likewise, since Japan makes other, more specific claims with regard to Article VI:1, we will
suspend our decision regarding a potential violation of that provision until we have addressed them.
Indeed, we note that Article VI:1, inter alia, mentions circumstances under which an anti-dumping
measure may be applied. If we find another cause of violation of Article VI:1, it will not be necessary
for us to make a finding of violation of Article VI:1 in relation to a violation of Article 1 of the
Anti-Dumping Agreement.
(b) Violation of Article VI:1(a) of the GATT 1994 and Article 2.1 and 2.2 of the Anti-Dumping
Agreement
6.242 Japan argues that the 1916 Act prohibits the importation of products at a price "substantially
less" than the "actual value or wholesale price of [the products] […] in the principal markets of the
country of their production, or of other foreign countries to which they are commonly exported […]."
In contrast, Article VI:1(a) of the GATT 1994 and Article 2.1 and 2.2 of the Anti-Dumping
Agreement require that the first benchmark against which the price of the imported product is
compared be the actual price of the product for sale in the exporting country. Under Article VI:1(a)
and Article 2.1, the primary and preferred benchmark for comparison is "the comparable price, in the
ordinary course of trade, for the like product wh en destined for consumption in the exporting
country".
6.243 We note that the terms of Article VI:1(a) of the GATT 1994 and Article 2 of the
Anti-Dumping Agreement are different from those used in the 1916 Act. In order to determine
whether this textual difference results in a violation, we need to consider whether those terms have
been, or, in the absence of any past interpretation, could be interpreted consistently with the
provisions of Article VI:1(a) and Article 2.
6.244 We first note that, contrary to Article VI:1 of the GATT 1994 and Article 2 of the
Anti-Dumping Agreement, the 1916 Act does not make the comparable price when destined for
consumption in the exporting country the preferred basis for the establishment of the normal value. In
the 1916 Act, actual value or wholesale price of the products "in the principal markets […] of other

foreign countries to which they are commonly exported" seems to be equally applicable, even if an
appropriate comparable price for consumption in the domestic market of the exporting country exists.
However, we note that nothing in the terms of the 1916 Act would prevent the introduction in practice
of an order of precedence between the "actual value or wholesale price of [the products] […] in the
principal markets of the country of their production" and the actual value or wholesale price of [the
products] […] in the principal markets of other foreign countries to which they are commonly
exported" compatible with the requirement of Article VI:1 of the GATT 1994 and Article 2 of the
Anti-Dumping Agreement.
6.245 Japan also argues that Article 2.4.1 of the Anti-Dumping Agreement provides that those
against whom dumping is alleged can have protection against currency fluctuations. The 1916 Act
provides no such protection.
6.246 Article 2.4.1 provides as follows:
"When the comparison under paragraph 4 requires a conversion of currencies, such
conversion should be made using the rate of exchange of the date of sale [footnote 8],
provided that when a sale of foreign currency on forward markets is directly linked to
the export sale involved, the rate of exch ange in the forward sale shall be used.
Fluctuation in exchange rates shall be ignor ed and in an investigation the authorities
shall allow exporters at least 60 days to have adjusted their export prices to reflect
sustained movements in exchange rates during the period of investigation."
Footnote 8 reads as follows:
"Normally, the date of sale would be the date of contract, purchase order, order
confirmation, or invoice, whichever establishes the material terms of sale."
6.247 We note that the mechanism provided for in Article 2.4.1 of the Anti-Dumping Agreement is
not mentioned in the 1916 Act. We also note that nothing in the terms of the 1916 Act would prevent
the use of that mechanism in the actual application of the 1916 Act.
6.248 Japan's arguments raise the question whether the mere fact that the 1916 Act does not
expressly incorporate a WTO requirement, while at the same time not preventing the implementing
authority from reading that requirement into the 1916 Act, can be considered as a violation of
Article VI:1 and Article 2 of the Anti-Dumping Agreement.
6.249 We recall that, at our request, the United States explained that, pursuant to the doctrine
established by the US Supreme Court in Murray v. Schooner Charming Betsy ,
577 in the absence of
conflict, US judges should, whenever possible, interpret US laws in conformity with the international
obligations of the United States. Applied to the present case, this doctrine would imply that any judge
before whom claims similar to those of Japan woul d be raised, would be expected to interpret the
1916 Act in conformity with the US obligations under Article 2 of the Anti-Dumping Agreement,
provided there is no conflict between the relevant US legislation and international law. In other
words, the fact that the 1916 Act is silent regarding some WTO requirements does not mean a priori
that, when it comes to applying the 1916 Act to a particular case, those requirements would be
disregarded.

577 6 U.S. (2 cranch) 64, 118 (1804). The United States also refers to Footwear Distributors and
Retailers of America v. United States , 852 F. Supp. 1078, 1088 (CIT), appeal dismissed, 43 F.3d 1486 (Table)
(Fed. Cir. 1994), citing DeBartelo Corp. v. Florida Gulf Coast Building and Trade Council , 485 U.S. 568
(1988).

6.250 We note that Japan did not give us grounds for believing that we should consider that the
1916 Act violates Article VI and the Anti-Dumping Agreement by the mere fact that it is silent with
respect to certain requirements contained in those provisions. We also note that the terms of the
1916 Act are, as such, not incompatible with the above-mentioned requirements. Those requirements
could be read into the 1916 Act through interpretation. Japan did not refer the Panel to any court
decisions relating to the 1916 Act which would have specifically discussed the issue covered by
Article 2.4.1 of the Anti-Dumping Agreement and applied an inconsistent decision. Japan did not
point either at any other US law which would apply in relation to the 1916 Act (e.g., procedural rules)
and would be in conflict with international law, thus preventing the application of the Charming Betsy
doctrine in the first place. In our opinion, it is not for the Panel to "make the case" of the
complainant.
578 As a result, we conclude that Japan did not establish a prima facie case that the
1916 Act violates Article VI:1(a) and Article 2.1 and 2.2 of the Anti-Dumping Agreement.
(c) Violation of Article VI.1 and VI:6(a) of the GATT 1994 and Article 3 of the Anti-Dumping
Agreement
6.251 Japan claims that Articles VI:1 and VI:6(a) of the GATT 1994, and Article 3 of the
Anti-Dumping Agreement, require a Member to find that a given dumping practice causes or
threatens to cause material injury to its domestic industry (or retards the establishment of a domestic
industry) before applying an anti-dumping measure. These articles also set forth criteria which define
and govern the determination of injury. In contrast, the 1916 Act only requires a showing of intent.
Moreover, the intent requirement in the 1916 Act is defined as an intent to destroy or injure a
United States industry or to prevent its establishment. Thus, the 1916 Act contains no requirement
similar to "material injury" within the meaning of Article VI of the GATT 1994 and the
Anti-Dumping Agreement.
6.252 We note that Article VI:1 of the GATT 1994 requires the existence of material injury or a
threat thereof to an established industry or material retardation of the establishment of a domestic
industry. The 1916 Act does not refer to material injury or threat of material injury or material
retardation of the establishment of a domestic industry but to the intent of, inter alia, "destroying or
injuring an industry in the United States, or of preventing the establishment of an industry in the
United States". In certain circumstances, the existenc e of an intent to injure may be more difficult to
prove than the existence of actual injury. The United States executive branch early considered that the
requirement of an "intent" made the imposition of remedies under the 1916 Act almost impossible.
579
The Panel also recalls that the Supreme Court in the Brooke Group case considered, with respect to a
company's planning documents speaking of a desi re to slow the growth of a given segment of
industry, that "even an act of pure malice by one business competitor against another does not,
without more, state a claim under the federal anti-trust law". Thus, assuming that the Brooke Group
test applies to the 1916 Act, and assuming further that it relates to the "intent" aspect of the law, 580

578 We are of the view that we face a situation resembling that addressed in the case on Japan –
Measures Affecting Agricultural Products Panel and Appellate Body Reports adopted on 19 March 1999,
WT/DS76/R and WT/DS76/AB/R (see Appellate Body Report., paras. 125-131). In that case, the complainant
had not made a particular argument. The panel then deduced that argument from the experts' answers to its
questions. The Appellate Body considered that, even though Article 13 of the DSU and Article 11.2 of the
Agreement on Sanitary and Phytosanitary Measures suggested that panels had significant investigative
authority, this authority could not be used by a Panel to rule in favour of a complaining party which had not
established a prima facie case of inconsistency based on specific legal claims asserted by it.
579 See Geneva Steel, Op. Cit., at p. 1220, quoting a statement recorded in 56 Cong. Rec. 346 (Dec. 9,
1919):
"The Tariff Commission declares that [the 1916 Act] is not workable, for the reason that it is
almost impossible to show the intent on the part of the importer to injure or destroy business
in the United States by such importation or sale"
580 See our opinion in this respect in paras. 6.168-170 above.

evidence of predatory pricing and prospects of recoupment are necessary. A statement of aggressive
policy in an internal company document does not seem to be sufficient. However, we are not
convinced that such requirements could be interpreted as having substituted an "actual effect" test to
the "intent" test found in the text of the 1916 Act. Even in the circumstances mentioned above, the
existence of an "intent" may not always imply the existence of actual injury, actual threat of injury or
actual retardation. Interpreting the term "injuring an industry or […] preventing the establishment of
an industry in the United States" in the 1916 Act as meaning "causing material injury or materially
retarding the establishment of a domestic industry" as in Article VI of the GATT 1994 might be
possible under US law. However, reading the "intent" requirement out of the 1916 Act would, in our
view, amount to a contra legem interpretation of which we have seen no instance yet in relation to this
case.
6.253 For these reasons, we find that the 1916 Act, to the extent that it provides for the
identification of an "intent" on the part of the defe ndant rather than for the actual injury requirements
of Article VI, is not compatible with Article VI:1 of the GATT 1994. We note that Article VI:6(a)
does not, in substance, contain additional obligations with respect to the existence of material injury,
threat of injury or material retardation of the establishment of a domestic industry.
581 However, from
the terms of Article VI:6(a), it seems to us that the objective of that paragraph is to require a
determination by the authorities of the importing Member that dumping is such as to cause material
injury, threat thereof or material retardation. 582 Having regard to the evidence before us, we do not
consider that Japan has established a prima facie case of violation of Article VI:6(a) based on the fact
that the 1916 Act would not provide for a determination by the US authorities.
6.254 Since we have found above that the 1916 Act violates Article VI:1 by not providing for an
injury test compatible with the terms of that Article and since Article 3 of the Anti-Dumping
Agreement simply addresses in more detail the requirement of "material injury" contained in
Article VI:1, we do not find it necessary to make specific findings under Article 3. We therefore
exercise judicial economy with respect to the claim made by Japan under Article 3 of the
Anti-Dumping Agreement, as we are entitled to do pursuant to GATT 1947 panel practice and WTO
panel and Appellate Body practice.
583
(d) Violation of Articles 4 and 5 of the Anti-Dumping Agreement
6.255 Japan claims that Articles 4 and 5 of the Anti-Dumping Agreement set forth requirements
limiting the party or parties that may properly pursue an anti-dumping claim. Article 5.1 requires that
a request for initiation of an anti-dumping investigation be made by or on behalf of the domestic
industry. Article 4.1 defines "domestic industry" for the purpose of the Anti-Dumping Agreement.
Article 5.4 requires the investigating authorities to determine that an application is supported by
"those producers which collective output constitutes more than 50 per cent of the total production of
the like product" of those producers supporting or opposing the application. Moreover, under no

581 Article VI:6(a) provides as follows:
"No contracting party shall levy any anti-dumping or countervailing duty on the importation
of any product of the territory of another contr acting party unless it determines that the effect
of the dumping or subsidization, as the case may be, is such as to cause or threaten material
injury to an established domestic industry, or is such as to retard materially the establishment
of a domestic industry."
582 See, e.g., Panel Report on New Zealand – Imports of Electrical Transformers from Finland , adopted
on 18 July 1985, 32S/55, para. 4.4.
583 See, e.g. Panel Report on Canada – Administration of the Foreign Investment Review Act , adopted
on 7 February 1984, BISD 30S/140, para. 5.16; Panel Report on Brazil – Desiccated Coconut, Op. Cit. ,
para. 293; Appellate Body Report on United States – Measures Affecting Imports of Woven Wool Shirts and
Blouses from India, Op. Cit., p. 19.

circumstances can an investigation be initiated if those supporting the application account for less
than 25 per cent of total domestic production of the like product. In contrast, as evidenced by the
most recent cases initiated under the 1916 Act, a complaint under the 1916 Act can be initiated by a
single United States producer. Article 5 also requires that applications contain evidence of the three
elements of dumping, injury and causation, and sets a de minimis threshold applicable to the dumping
element. The 1916 Act contains none of these elements. On the contrary, Japan argues that, under
the US Federal Rules of Civil Procedure 8(a)(2), a complainant under the 1916 Act needs only to
present a short and plain statement of its claims. Finally, Article 5.10 of the Anti-Dumping Agreement
requires Members to complete their investigations and decide whether or not to impose duties within
18 months. The 1916 Act contains no such deadline.
6.256 We note that Japan's claims under Article 4 and 5 of the Anti-Dumping Agreement are closely
linked because one of the conditions for the initiation of an investigation under Article 5.1 is that the
application be made on behalf of the domestic industry, which is defined in Article 4.1.
6.257 We recall that civil proceedings under the 1916 Act are available to "any person injured in his
business or property" by reason of a violation of the 1916 Act. This term is nowhere qualified by a
statement that this person should be sufficiently representative of an industry of the United States,
within the meaning of Article 4 of the Anti-Dumping Agreement. We note that the 1916 Act refers to
the intent of destroying or injuring an industry in the United States, or of preventing the establishment
of an industry in the United States. However, we have no evidence that a minimum representation
level for a given industry must be established by the complainant before filing a case before a federal
court. On the contrary, we note that all cases so far have, in fact, been initiated by individual
companies under their own responsibility. The fact that, in certain cases, these companies may have
represented a very large portion of the US industry in the economic sector concerned does not seem to
be linked to any legal requirement of representation under the 1916 Act and is most probably
fortuitous. We have not been referred to any provisions of the US Federal Rules of Civil Procedure
which would qualify the terms of the 1916 Act in line with the terms of Article 4 and 5 of the
Anti-Dumping Agreement. In light of the terms of the 1916 Act, especially the term " any person
injured in his business or property"
584 which is clear, we have no reason to believe that US federal
courts will be in a position to interpret that provision – which conflicts with the terms of the
Anti-Dumping Agreement - to meet the requirements of Articles 4 and 5 of the Anti-Dumping
Agreement in terms of representation of the complainants.
6.258 Regarding the requirement of Article 5.2 that applications contain evidence of the three
elements of dumping, injury and causation, we note that Japan referred to the provisions of the
US Federal Rules of Civil Procedure to support its argument that no such requirement applies to
complainants under the 1916 Act. We note that the United States did not contest, as a matter of fact,
the applicability to the 1916 Act of the provisions of the US Federal Rules of Civil Procedure cited by
Japan. We also recall that the 1916 Act does not require the establishment of injury within the
meaning of Article VI of the GATT 1994. We therefore conclude that there is no obligation for a
complainant under the 1916 Act to respect the obligations of Article 5.2 of the Anti-Dumping
Agreement in terms of the type of evidence to be included in an application.
6.259 Finally, Japan argues that Article 5.10 of the Anti-Dumping Agreement requires Members to
complete their investigations and decide whether or not to impose duties within 18 months. Japan
claims that the 1916 Act contains no such deadline.
6.260 As we noted in a similar situation for certain claims of Japan under Article 2 of the
Anti-Dumping Agreement, the fact that the 1916 Act does not include a deadline for the completion
of proceedings is not as such sufficient to establish a violation. We do not consider it a priori
impossible that US courts, in the absence of a conflict, read that deadline into the text of the 1916 Act

584 Emphasis added.

in application of the Charming Betsy doctrine.585 Japan did not submit evidence that the absence in
the 1916 Act of an express deadline compatible with the provisions of Article 5.10 of the
Anti-Dumping Agreement was a violation of the WTO Agreement. Even though we are not sure that
the 18-month deadline could always be imposed by the judge on the parties to a 1916 Act case, we
consider that Japan, as a complainant, did not establish a prima facie case in that respect and we
refrain from making a finding under Article 5.10 on the 1916 Act.
6.261 We therefore find that the 1916 Act, because it does not require a minimum representation of
a US industry in applications for the initiation of proceedings under the 1916 Act, violates Article 4.1
and Article 5.1, 5.2 and 5.4 of the Anti-Dumping Agreement.
(e) Violation of Article VI of the GATT 1994 and Articles 9 and 11 of the Anti-Dumping
Agreement
6.262 Japan argues that the 1916 Act ignores the regime provided for in Article 9 of the
Anti-Dumping Agreement586 with respect to the imposition and collection of anti-dumping duties by

585 See para. 6.249 above.
586 Article 9 of the Anti-Dumping Agreement provides as follows:
"9.1 The decision whether or not to impose an anti-dumping duty in cases where all
requirements for the imposition have been fulfilled, and the decision whether the amount of the
anti-dumping duty to be imposed shall be the full margin of dumping or less, are decisions to be
made by the authorities of the importing Member. It is desirable that the imposition be
permissive in the territory of all Members, and that the duty be less than the margin if such lesser
duty would be adequate to remove the injury to the domestic industry.
9.2 When an anti-dumping duty is imposed in respect of any product, such anti-dumping
duty shall be collected in the appropriate amounts in each case, on a non-discriminatory basis on
imports of such product from all sources found to be dumped and causing injury, except as to
imports from those sources from which price undertakings under the terms of this Agreement
have been accepted. The authorities shall name the supplier or suppliers of the product
concerned. If, however, several suppliers from the same country are involved, and it is
impracticable to name all these suppliers, the authorities may name the supplying country
concerned. If several suppliers from more than one country are involved, the authorities may
name either all the suppliers involved, or, if this is impracticable, all the supplying countries
involved.
9.3 The amount of the anti-dumping duty shall not exceed the margin of dumping as
established under Article 2.
9.3.1 When the amount of the anti-dumping duty is assessed on a retrospective
basis, the determination of the final liability for payment of anti-dumping duties shall
take place as soon as possible, normally within 12 months, and in no case more than
18 months, after the date on which a request for a final assessment of the amount of the
anti-dumping duty has been made. [footnote 20] Any refund shall be made promptly
and normally in not more than 90 days following the determination of final liability
made pursuant to this sub-paragraph. In any case, where a refund is not made within
90 days, the authorities shall provide an explanation if so requested.
9.3.2 When the amount of the anti-dumping duty is assessed on a prospective basis,
provision shall be made for a prompt refund, upon request, of any duty paid in excess
of the margin of dumping. A refund of any such duty paid in excess of the actual
margin of dumping shall normally take place within 12 months, and in no case more
than 18 months, after the date on which a request for a refund, duly supported by
evidence, has been made by an importer of the product subject to the anti-dumping

imposing measures incompatible with that Articl e. Japan also argues that Article 11 of the
Anti-Dumping Agreement 587 limits the duration of anti-dumping measures and requires periodic

duty. The refund authorized should normally be made within 90 days of the
above-noted decision.
9.3.3 In determining whether and to what extent a reimbursement should be made
when the export price is constructed in accordance with paragraph 3 of Article 2,
authorities should take account of any change in normal value, any change in costs
incurred between importation and resale, and any movement in the resale price which is
duly reflected in subsequent selling prices, and should calculate the export price with
no deduction for the amount of anti-dumping duties paid when conclusive evidence of
the above is provided.
9.4 When the authorities have limited their examination in accordance with the second
sentence of paragraph 10 of Article 6, any anti-dumping duty applied to imports from exporters
or producers not included in the examination shall not exceed:
(i) the weighted average margin of dumping established with respect to the
selected exporters or producers or,
(ii) where the liability for payment of anti-dumping duties is calculated on the
basis of a prospective normal value, the difference between the weighted average
normal value of the selected exporters or producers and the export prices of exporters
or producers not individually examined,
provided that the authorities shall disregard fo r the purpose of this paragraph any zero and
de minimis margins and margins established under the circumstances referred to in paragraph 8
of Article 6. The authorities shall apply individual duties or normal values to imports from any
exporter or producer not included in the examination who has provided the necessary
information during the course of the investigation, as provided for in subparagraph 10.2 of
Article 6.
9.5 If a product is subject to anti-dumping duties in an importing Member, the authorities
shall promptly carry out a review for the purpose of determining individual margins of dumping
for any exporters or producers in the exporting country in question who have not exported the
product to the importing Member during the period of investigation, provided that these
exporters or producers can show that they are not related to any of the exporters or producers in
the exporting country who are subject to the anti-dumping duties on the product. Such a review
shall be initiated and carried out on an accelerated basis, compared to normal duty assessment
and review proceedings in the importing Member . No anti-dumping duties shall be levied on
imports from such exporters or producers while the review is being carried out. The authorities
may, however, withhold appraisement and/or request guarantees to ensure that, should such a
review result in a determination of dumping in respect of such producers or exporters,
anti-dumping duties can be levied retroactively to the date of the initiation of the review."
Footnote 20 reads as follows:
"It is understood that the observance of the time-limits mentioned in this subparagraph and in
subparagraph 3.2 may not be possible where the product in question is subject to judicial review
proceedings."
587 Article 11 provides as follows:
"11.1 An anti-dumping duty shall remain in force only as long as and to the extent necessary
to counteract dumping which is causing injury.

reviews of the need for continued imposition of anti-dumping duties. The 1916 Act contains no
provisions regarding duration of measures or review.
6.263 We found above that, by not imposing anti-dumping duties within the meaning of Article VI
and the Anti-Dumping Agreement, but other types of measures such as fines, imprisonment or
damages, the 1916 Act violates Article VI:2 of the GATT 1994 and Article 18.1 of the Anti-Dumping
Agreement. Since we found that the type of measures imposed under the 1916 Act is not compatible
with the WTO Agreement, we do not find it necessary to determine whether the way those measures
operate is compatible with Article VI of the GATT 1994 and the Anti-Dumping Agreement. We
therefore exercise judicial economy in respect of these claims.
3. Conclusion
6.264 For the reasons mentioned above, we find that the 1916 Act violates Article VI:1 of the
GATT 1994 and Articles 4.1, 5.1, 5.2 and 5.4 of the An ti-Dumping Agreement. In light of our
findings and for the reasons mentioned in paragraphs 6.239-6.241 above, we also find that the
1916 Act violates Article 1 of the Anti-Dumping Agreement. We also recall that Japan made a claim

11.2 The authorities shall review the need for the continued imposition of the duty, where
warranted, on their own initiative or, provided that a reasonable period of time has elapsed since
the imposition of the definitive anti-dumping duty, upon request by any interested party which
submits positive information substantiating the need for a review.[footnote 21] Interested parties
shall have the right to request the authorities to examine whether the continued imposition of the
duty is necessary to offset dumping, whether the injury would be likely to continue or recur if
the duty were removed or varied, or both. If, as a result of the review under this paragraph, the
authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated
immediately.
11.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping duty
shall be terminated on a date not later than five years from its imposition (or from the date of the
most recent review under paragraph 2 if that review has covered both dumping and injury, or
under this paragraph), unless the authorities determine, in a review initiated before that date on
their own initiative or upon a duly substantiated request made by or on behalf of the domestic
industry within a reasonable period of time prior to that date, that the expiry of the duty would be
likely to lead to continuation or recurrence of dumping and injury.[footnote 22] The duty may
remain in force pending the outcome of such a review.
11.4 The provisions of Article 6 regarding evidence and procedure shall apply to any review
carried out under this Article. Any such review shall be carried out expeditiously and shall
normally be concluded within 12 months of the date of initiation of the review.
11.5 The provisions of this Article shall apply mutatis mutandis to price undertakings
accepted under Article 8."
Footnote 21 reads as follows:
"A determination of final liability for payment of anti-dumping duties, as provided for in
paragraph 3 of Article 9, does not by itself constitute a review within the meaning of this
Article."
Footnote 22 reads as follows:
"When the amount of the anti-dumping duty is assessed on a retrospective basis, a finding in
the most recent assessment proceeding under subparagraph 3.1 of Article 9 that no duty is to
be levied shall not by itself require the authorities to terminate the definitive duty."

under Articles 1 and 18.1 based on the violation of other provisions of the Anti-Dumping Agreement.
Article 18.1 provides that specific actions against dumping must be taken "in accordance with the
provisions of GATT 1994, as interpreted by [the Anti-Dumping Agreement]". Since we found that
the 1916 Act violates Article VI of the GATT 1994 and a number of provisions of the Anti-Dumping
Agreement, we reach the same conclusion regarding the violation of Article 18.1 as we did regarding
Article 1.
F. V
IOLATION OF ARTICLE III:4 OF THE GATT 1994
6.265 We recall that Japan does not request the Panel to make a finding of violation of Article III:4
of the GATT 1994 in the alternative. Rather, Japan considers that, in the present case, the 1916 Act
violates Article VI as an anti-dumping law not in conformity therewith; it also violates Article III:4 by
regulating imported products under a separate, less favourable regime than is applicable to domestic
products.
6.266 Article III:4 provides as follows:
"The products of the territory of any cont racting party imported into the territory of
any other contracting party shall be accorded treatment no less favourable than that
accorded to like products of national origin in respect of all laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use. The provisions of this paragraph shall not prevent the application
of different internal transportation charges which are based exclusively on the
economic operation of the means of transport and not on the nationality of the
product."
6.267 In section VI.C above, we have found that Article VI of the GATT 1994 and the
Anti-Dumping Agreement were applicable to the 1916 Act. We have also found in sections VI.D and
E above that the 1916 Act violates certain provisions of Article VI and of the Anti-Dumping
Agreement. We also recall that it is a well established practice of panels under the GATT 1947 and
the GATT 1994 to exercise judicial economy when applicable and that this practice has been
confirmed by the Appellate Body.
588
6.268 When we considered the relationship between Article VI and Article III:4 of the GATT 1994,
we noted that Article VI seemed to address the basic feature of the 1916 Act (i.e. transnational price
discrimination) more directly than Article III:4. In our findings, we concluded that Article VI applies
to a measure whenever that measure objectively addresses a situation of transnational price
discrimination, as defined in Article VI:1. Thus, we found that the 1916 Act was fully subject to the
provisions of Article VI of the GATT 1994 and the Anti-Dumping Agreement and could not escape
the disciplines of Article VI by the mere fact that it had anti-trust objectives, did not address injurious
dumping as such, included additional requirements of an anti-trust nature or led to the imposition of
measures other than anti-dumping duties that were not border adjustment measures.
6.269 However, even though we considered that Article VI deals specifically with the type of price
discrimination at issue, we did not address the question whether Article VI applied to the 1916 Act to
the exclusion of Article III:4. In this regard, we recall that, in its report on European Communities –
Bananas, the Appellate Body noted that:
"Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing
Agreement both apply, the Panel, in our view, should have applied the Licensing
Agreement first, since this agreement deals specifically, and in detail, with the
administration of import licensing procedures. If the Panel had done so, then there

588 See footnote 583 above.

would have been no need for it to address the alleged inconsistency with
Article X:3(a) of the GATT 1994."589
We are mindful of the fact that Article X:3(a) of the GATT 1994 deals with the way domestic trade
laws in general should be applied, whereas Article 1.3 of the Agreement on Import Licensing
Procedures deals with the way rules should be applied in the specific sector of import licensing. In
contrast, it may be said that Articles III:4 and VI do not share the same purpose. However, we view
the Appellate Body statement as applying the general principle of international law lex specialis
derogat legi generali. This is particularly clear from its remark that the Agreement on Import
Licensing Procedures "deals specifically, and in detail, with the administration of import licensing
procedures". In our opinion, Article VI and the Anti-Dumping Agreement "deals specifically, and in
detail, with the administration of" anti-dumping. In the present case, the question of the applicability
of Article III:4 was essentially raised by the type of measures imposed under the 1916 Act. On the
basis of the reasoning of the Appellate Body, we c onclude that, even assuming that Article III:4 is
applicable, in light of our findings under Article VI and the Anti-Dumping Agreement, we do not
need to make findings under Article III:4 of the GATT 1994.
6.270 We nevertheless recall that, as stated by the Appellate Body in its report on Australia –
Measures Affecting Importation of Salmon ,
590 our findings must be complete enough to enable the
DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance
"in order to ensure effective resolution of disputes to the benefit of all Members."
6.271 Having regard to our findings under Article VI and the Anti-Dumping Agreement, and
keeping in mind that, in our view, Article VI and the Anti-Dumping Agreement deal specifically and
in detail with laws addressing dumping as such, we do not consider that making additional findings
under Article III:4 is necessary in order to enable the DSB to make sufficiently precise
recommendations and rulings so as to allow prompt compliance by the United States in order to
ensure an effective resolution of this dispute.
6.272 Therefore, we find that we are entitled to exercise judicial economy and decide not to review
the claims of Japan under Article III:4 of the GATT 1994.
G. V
IOLATION OF ARTICLE XI OF THE GATT 1994
6.273 Japan claims that the 1916 Act violates the obligations of the United States under Article XI:1
of the GATT 1994 because it establishes impermissible import "prohibitions or restrictions other than
duties, taxes or other charges", within the meaning of that article. Japan argues that the 1916 Act,
being a statute of the United States with binding effects, is unquestionably a "measure". Also, the
1916 Act imposes "restrictions other than duties, taxes or other charges" in the form of treble damages
and imprisonment. Finally, the 1916 Act applies to the importation of products into the United States.
Japan adds that, in essence, the 1916 Act establishes product-specific minimum price levels to protect
US industries similar to the minimum import price system declared inconsistent with Article XI by the
panel on EEC – Programme of Minimum Import Prices , Licenses and Surety Deposits for Certain
Processed Fruits and Vegetables .
591 The fact that it applies to persons rather than products is in this
respect immaterial.592

589 Op. Cit., para. 204.
590 Op. Cit. para. 223.
591 Adopted on 18 October 1978, BISD 25S/68, para. 4.9, hereinafter " EEC – Processed Fruits and
Vegetables".
592 Japan refers to the Panel Report on United States – Section 337, Op. Cit., para. 5.10, whereby, under
Article III:4 of the GATT, a measure applied to importers by imposing penalties on them also affects imported
products.

6.274 The United States argues that, in general, Article XI prohibits, with certain exceptions,
quantitative restrictions on imports or exports. The 1916 Act contains no provision which would
enable a court to impose any sort of prohibition or restriction upon the importation of products.
Courts may impose on the defendant in a law suit, and not on any other persons not involved in the
case, a monetary sanction or a criminal sentence, which obviously does not apply to any particular
product. In the opinion of the United States, there is no basis for Japan's assertion that the 1916 Act
establishes product-specific minimum price levels. The reports referred to by Japan can be
differentiated from the present situation: in EEC – Processed Fruits and Vegetables , there was a
prohibition to import below a certain price which fell within the ambit of Article XI. The reliance of
Japan on the report of the panel on United States – Section 337 is also misplaced. There is no
language in Article XI concerning whether a meas ure affects the conditions of competition between
domestic and imported products.
6.275 Article XI:1 of the GATT 1994 provides as follows:
"No prohibitions or restrictions other than duties, taxes or other charges, whether
made effective through quotas, import or export licences or other measures, shall be
instituted or maintained by any contracting party on the importation of any product of
the territory of another contracting party or on the exportation or sale for export of
any product destined for the territory of any other contracting party."
6.276 In section VI.C above, we have found that Article VI of the GATT 1994 and the
Anti-Dumping Agreement were applicable to the 1916 Act. We have also found in sections VI.D and
E above that the 1916 Act violates certain provisions of Article VI and of the Anti-Dumping
Agreement. We recall that it is a well established practice of panels, confirmed by the Appellate
Body, to exercise judicial economy where applicable.
6.277 With respect to the necessity to make findings under Article XI of GATT 1994, we are of the
view that the same reasoning as with Article III:4 applies. In our opinion, Article VI addresses the
basic feature of the 1916 Act (i.e. transnational price discrimination) more directly than Article XI:1.
In our findings, we concluded that Article VI appl ies to a measure whenever that measure objectively
targets a situation of transnational price discrimination, as defined in Article VI:1. Thus, we found
that the 1916 Act was fully subject to the provisions of Article VI of the GATT 1994 and the
Anti-Dumping Agreement and could not escape the disciplines of Article VI by the mere fact that it
had anti-trust objectives, did not address injurious dumping as such, included additional requirements
of an anti-trust nature or led to the imposition of measures other than anti-dumping duties.
6.278 However, the fact that Article VI deals specifically with the type of price discrimination at
issue does not mean that it applies to the 1916 Act to the exclusion of Article XI. However, we recall
that, in its report on European Communities – Bananas, the Appellate Body noted that although both
Article X:3(a) of the GATT 1994 and Article 1 .3 of the Agreement on Import Licensing Procedures
applied, the panel should have applied the Agreement on Import Licensing Procedures first, since this
agreement dealt specifically, and in detail, with the administration of import licensing procedures.
The Appellate Body concluded that, if the panel ha d done so, there would have been no need for it to
address the alleged inconsistency with Article X:3(a) of the GATT 1994."
593 We conclude that, even
assuming that Article XI:1 is applicable, Article VI deals specifically and in detail with the
administration of anti-dumping actions. In lig ht of our findings under Article VI and the
Anti-Dumping Agreement, we do not need to make findings under Article XI:1 of the GATT 1994.
6.279 We also recall that, as stated by the Appellate Body in its report on Australia – Measures
Affecting Importation of Salmon,594 our findings must be complete enough to enable the DSB to make

593 Op. Cit., para. 204.
594 Op. Cit. para. 223.

sufficiently precise recommendations and rulings so as to allow for prompt compliance "in order to
ensure effective resolution of disputes to the benefit of all Members."
6.280 Having regard to our findings under Article VI and the Anti-Dumping Agreement, and
keeping in mind that, in our view, Article VI and the Anti-Dumping Agreement deal specifically and
in detail with laws addressing dumping, we do not consider that making additional findings under
Article XI is necessary in order to enable the DS B to make sufficiently precise recommendations and
rulings so as to allow prompt compliance by the United States in order to ensure an effective
resolution of this dispute.
6.281 Therefore, we find that we are entitled to exercise judicial economy and decide not to review
the claims of Japan under Article XI.
H. VIOLATION OF ARTICLE XVI:4 OF THE AGREEMENT ESTABLISHING THE WTO AND OF
ARTICLE 18.4 OF THE ANTI-DUMPING AGREEMENT
6.282 Japan claims that the United States is in breach of its obligations under Article XVI:4 of the
Agreement Establishing the WTO and Article 18.4 of the Anti-Dumping Agreement because it has
failed to conform to its obligations under the WTO Agreement. Article XVI:4 applies to all WTO
agreements, including the GATT 1994 and the Anti-Dumping Agreement. Article 18.4 of the
Anti-Dumping Agreement is reflective of the general obligation set out in Article XVI:4 as it applies
to anti-dumping. Article 18.4 imposes an additional obligation to take all necessary steps, of a general
or particular character, to ensure the conformity of laws, regulations and administrative procedures.
Under Article 18.4, it is sufficient for a law to prov ide for WTO-inconsistent actions in order for that
law to violate Article 18.4. The fact that there is a possibility of a WTO-consistent action is irrelevant.
6.283 The United States contends that, since the 1916 Act is susceptible to an interpretation that is
fully consistent with all US obligations and, in fact, has been so interpreted to date, there is no
requirement under Article XVI:4 of the Agreement Establishing the WTO that the United States take
action to change that law, just as there is nothing inherent in the anti-dumping context that renders the
generally applicable distinction between mandatory and non-mandatory legislation inapplicable. This
distinction is consistent with the presumption against conflicts between national and international law.
Regarding Article 18.4 of the Anti-Dumping Agreement, the United States considers that, although
the language is not identical to Article XVI:4, there were similar provisions in the Tokyo Round
agreements on anti-dumping and subsidies which have been generally interpreted as requiring the
parties to those agreements to adopt laws, regula tions and procedures that permits them to act in
conformity with their obligations under those agreements. Article 18.4 of the Anti-Dumping
Agreement should be interpreted in the same way.
6.284 Article XVI:4 of the Agreement Establishing the WTO reads as follows:
"Each Member shall ensure the conformity of its laws, regulations and administrative
procedures with its obligations as provided in the annexed Agreements."
6.285 Article 18.4 of the Anti-Dumping Agreement provides that:
"Each Member shall take all necessary steps, of a general or particular character, to
ensure, no later than the date of entry in to force of the WTO Agreement for it, the
conformity of its laws, regulations and administrative procedures with the provisions
of this Agreement as they may apply to the Member in question."
6.286 Since Article 18.4 specifically applies to the Anti-Dumping Agreement, we shall first
determine whether the 1916 Act violates Article 18.4. The meaning of Article 18.4 which
immediately comes to mind when reading that article is that when a law, regulation or administrative

procedure of a Member has been found incompatible with the provisions of the Anti-Dumping
Agreement, that Member is also in breach of its obligations under Article 18.4. 595 We found that the
1916 Act violates Articles 1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping Agreement. We
conclude that, by violating those provisions, the United States also violates Article 18.4 of the
Anti-Dumping Agreement.
6.287 With respect to Article XVI:4 of the Agreement Establishing the WTO, we note that, if some
of the terms of Article XVI:4 differ from those of Article 18.4, they are identical and unqualified as
far as the basic obligation of ensuring the conformity of laws, regulations and administrative
procedures found in both articles is concerned. The same reasoning as for Article 18.4 applies to
Article XVI:4 regarding the terms found in both provisions. In other words, if a provision of an
"annexed Agreement" is breached, a violation of Article XVI:4 immediately occurs. GATT 1994 is
one of the "annexed Agreements" within the meaning of Article XVI:4. Since we found that
provisions of Article VI of the GATT 1994 has been breached, we conclude that, by violating this
provision, the United States violates Article XVI:4 of the WTO Agreement.
6.288 We therefore find that, by violating Articles 1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping
Agreement, the United States violates Article 18.4 of the same Agreement. We also find that by
violating provisions of Article VI of the GATT 1994, the United States violates Article XVI:4 of the
WTO Agreement.
596
I. SUMMARY OF FINDINGS
6.289 Our findings may be summarized as follows:597
(a) in order to review the conformity of the 1916 Act with the provisions of the WTO Agreement,
we were entitled, consistently with the practice of the Appellate Body and of other international
tribunals, to carry out an examination of the US domestic law, including a review of the relevant
legislative history and an analysis of the relevant case-law;
(b) Article VI:1 of the GATT 1994 and the Anti- Dumping Agreement, interpreted in accordance
with the Vienna Convention, must be understood as applying to the type of transnational price
discrimination defined therein, irrespective of whether it is combined with additional requirements or
leads to other measures than anti-dumping duties;
(c) on the basis of the terms of the 1916 Act, the transnational price discrimination test found in
that law meets the definition of Article VI:1 of GATT 1994. The legislative history of the 1916 Act
and the subsequent interpretation by US courts do not lead to a different conclusion;
(d) by providing for the imposition of treble damages, fines or imprisonment, instead of
anti-dumping duties, the 1916 Act violates Article VI:2 of GATT 1994 and Article 18.1 of the
Anti-Dumping Agreement;

595We did not exercise judicial economy with respect to Article 18.4 because, in that context, a
violation of Article 18.4 automatically results from the breach of another provision of the Anti-Dumping
Agreement.
596 In that context, we do not find it necessary to determine whether the violation of provisions of the
Anti-Dumping Agreement lead to a breach of Article XVI :4 of the Agreement Establishing the WTO. Since we
did not identify any conflict within the meaning of Article XVI:3 of the Agreement Establishing the WTO
between Article XVI:4 of the Agreement Establishing the WTO and Article 18.4 of the Agreement on
Anti-Dumping, we do not need to address further the relationship between the two provisions.
597 Having regard to the fact that the articles of the WTO agreements referred to by Japan in its claims
have multiple paragraphs, most of which contain at least one distinct obligation, the Panel strictly circumscribed
its findings to the paragraphs effectively found to be violated on the basis of the evidence and arguments
submitted by the parties.

(e) by not providing for a number of procedural requirements found in Article VI of the
GATT 1994 and the Anti-Dumping Agreement, the 1916 Act also violates Article VI:1 of the
GATT 1994 and Articles 1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping Agreement;
(f) by violating Article VI:1and VI:2 of GATT 1994, and Articles 1, 4.1, 5.1, 5.2, 5.4 and 18.1 of
the Anti-Dumping Agreement, the 1916 Act violates Article XVI:4 of the Agreement Establishing the
WTO and Article 18.4 of the Anti-Dumping Agreement;
(g) in accordance with Article 3.8 of the DSU, since violations have been established that have
not been rebutted by the United States, the United States nullifies or impairs benefits accruing to
Japan under the WTO Agreement.
J. R
EQUEST OF JAPAN FOR A SPECIFIC RECOMMENDATION OF THE PANEL
6.290 We recall that Japan requests that we recommend that the United States repeal the 1916 Act
in order to bring the 1916 Act into conformity with US obligations under the WTO. We note that
Article 19.1 of the DSU provides that:
"When a panel or the Appellate Body concludes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned [footnote
omitted] bring the measure into conformity with that agreement [footnote omitted].
In addition to its recommendations, the panel or the Appellate Body may suggest
ways in which the Member concerned could implement the recommendations."
6.291 From the first sentence of Article 19.1, we conclude that the type of recommendations we are
entitled to make are limited to recommend that the Member concerned bring the measure at issue into
conformity with the relevant WTO agreements. As a result, we cannot make the recommendation
requested by Japan.
6.292 We nevertheless note that, pursuant to Article 19.1 of the DSU, we may suggest ways in
which the Member concerned could implement our recommendations. We also recall that we
reviewed all the claims on which, in our opinion "a finding [was] necessary in order to enable the
DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance
by a Member with those recommendations and rulings 'in order to ensure effective resolution of the
dispute to the benefit of all Members.'"
598 In light of our findings, we are of the view that, in order to
bring the 1916 Act as such into conformity with its WTO obligations, the United States would
probably have to amend that law to such an extent that it may no longer have a number of its current
main features. We also note that the 1916 Ac t has been seldom applied compared with other
anti-dumping or anti-trust instruments of the United States and that, when applied, it is has never led
to the imposition of any remedies by courts.
599 Finally, we recall that Article 3.7, fourth sentence, of
the DSU provides that:
"In the absence of a mutually agreed solution, the first objective of the dispute
settlement mechanism is usually to secure the withdrawal of the measures concerned
if these are found to be inconsistent with the provisions of any of the covered
agreements."

598 See Appellate Body Report on Australia – Measures Affecting Importation of Salmon , Op. Cit .,
para. 223.
599 Our remark only applies to the remedies provided for in the 1916 Act as such. We nevertheless
recall that settlements have been reached between the parties in the Wheeling-Pittsburgh case. We have no
evidence of the extent of the involvement of the US authorities, in particular the US court concerned, in
sanctioning the settlements reached between the parties in that case. Moreover, no claim was made by Japan in
this respect. We therefore do not have to take position on the WTO-conformity of these settlements.

As a result, we suggest that one way for the United States to bring the 1916 Act into conformity with
its WTO obligations would be to repeal the 1916 Act.
VII. CONCLUSIONS AND RECOMMENDATIONS
7.1 We conclude that
(i) the 1916 Act violates Article VI:1 and VI:2 of GATT 1994;
(ii) the 1916 Act violates Articles 1, 4.1, 5.1, 5.2, 5.4, 18.1 and 18.4 of the Anti-Dumping
Agreement;
(iii) the 1916 Act violates XVI:4 of the Agreement Establishing the WTO; and
(iv) as a result, benefits accruing to Japan under the WTO Agreement have been nullified
or impaired.
7.2 We therefore recommend that the DSB request the United States to bring the 1916 Act into
conformity with its obligations under the WTO Agreement.