Document: WT/DS399/R Page D-1 ANNEX D ORAL STATEMENTS OF THIRD PARTIES OR EXECUTIVE SUMMARIES THEREOF Contents Page Annex D-1 Oral Statement of the European Union D-2 Annex D-2 Oral Statement of Japan D-3
Document codes: WT/DS399/R
Complainant: China
Respondent: U.S.
Third parties: EU, Japan, Taiwan, Turkey, Vietnam
Dispute stage: Appellate Body
Agreements cited: Art. 16.1, 16.3, 16.4, 16.6  Protocol of AccessionArt. I:1, II, XIX  GATT 1994  Safeguards

ANNEX D

ORAL STATEMENTS OF THIRD PARTIES OR
EXECUTIVE SUMMARIES THEREOF

Contents Page
Annex D-1 Oral Statement of the European Union D-2
Annex D-2 Oral Statement of Japan D-3

ANNEX D-1

ORAL STATEMENT OF THE EUROPEAN UNION

Mr Chairman, members of the Panel,

1. The European Union would like to thank the Pa nel for this opportunity to submit orally its
views in this dispute.

2. As already stated in its written observations , the European Union does not wish to take a
position on the consistency of the measure in dispute with the requirements of the Transitional
Product-specific Safeguard Mechanism (the "TPSSM") laid down in Article 16 of the Protocol of
Accession of the People's Republic of China.

3. The European Union has interv ened in this dispute because of its interest in the correct
interpretation of the TPSSM. More specifically, the European Union is concerned to ensure that the
specific nature of the TPSSM is duly recogni sed and that no confusion arises between the
requirements of that mechanism and those of the extraordinary remedy against injurious imports
provided in Article XIX of the General Agreement on Tariffs and Trade 1994 (the "GATT") and the
Agreement on Safeguards (the "AS").

4. Contrary to the suggestions made by the co mplaining party, the TPSSM is not an elaboration
of the remedy provided in GATT Article XIX and the AS. The TPSSM lays down a separate and
distinct remedy, with its own specific purpose, to be invoked in different circumstances and subject to
different conditions.

5. Nor is it correct that the TPSSM seeks to impose "more stringent" requirements than GATT
Article XIX and the AS. First
, the TPSSM does not provide that the increase of imports must be the
result of "unforeseen developments". Second , the TPSSM lays down a lower standard of injury, by
requiring that increased imports be such as to cause "m aterial injury", rather than "serious injury".
Third, while the requirement of "increased imports" is worded in similar terms, it must be construed
differently, having regard to the different context in which those terms appear and, in particular, to the
two crucial differences which I have just mentioned.

6. These differences, as well as the other text ual differences discussed in the EU written
observations, show that the drafters of the TPSSM did not seek to make the adoption of measures
under that instrument more difficult, but rather the opposite.

7. Given the specific nature of the TPSSM, and the different requirements stipulated in that
mechanism, the Panel should reject any attempt to extrapolate to the TPSSM the case law of the
Appellate Body on GATT Article XIX and the AS. Fo r the same reasons, the Panel should be careful
to ensure that, whatever interpretation of the TPSSM is reached in the framework of the present
dispute, it remains circumscribed to that inst rument and does not prejudge in any manner the
interpretation of GATT Article XIX and the AS.

8. Thank you for your time and attention.

ANNEX D-2

ORAL STATEMENT OF JAPAN

INTRODUCTION

1. Mr. Chairman, and distinguished Members of the Panel, on behalf of the Government of
Japan, I thank you for this opportunity to present Japan's views on this dispute. In this oral statement,
Japan would like to address three important systemic issues in this dispute. The first is Reasoned and
Adequate Explanation of Importing Members. The second is Implication of the Agreement on
Safeguards and Article XIX of the GATT to the Protocol . The third is Paragraph 16.3 and 16.6 of the
Protocol.

DISCUSSION

Reasoned and Adequate Explanation of the Importing Member

2. To consider claims, a WTO panel is requi red to make "an objective assessment" under
Article 11 of the Understanding on Rules and Procedures Governing the Settlement of Dispute , DSU.
Where the importing Member's examination of f acts is in dispute, the Appellate Body in US – Lamb
clarified this obligation in the context of the Agreement on Safeguards : "By examining whether the
explanation given by the competent authorities in their published report is reasoned and adequate,
panels can determine whether those authorities have acted consistently with the obligations imposed
by Article 4.2 of the Agreement on Safeguards".
 1

3. The rationale under the Agreement on Safeguards would provide a good framework for this
Panel to consider its standard of review a nd the importing Member's obligations derived from
Article 11 of the DSU and specific obligations under Section 16 of the Protocol. Paragraph 16.1 sets
forth that the importing Member may impose a transitional safeguard measure when the Member
found that Chinese products are imported in such stat e that causes market disruption. Paragraph 16.4
requires the Member to determine that these imports are a significant cause of the material injury to
find the existence of the market disruption. Para graphs 16.3 and 16.6 set the permissible maximum
extent and duration of the transitional safeguard measure. In addition to these substantive obligations,
Paragraph 16.5 sets forth the importing Member's pro cedural obligation to provide an explanation of
the basis for the decision and the scope and dur ation of the measure in the written notice under
paragraph 16.5, as elaborated in Paragraph 246(e) of the Working Party Report.

4. These substantive and procedural requirements under Section 16 of the Protocol appear to be
analogous to the conditions to apply to a safeguard measure under the Agreement on Safeguards , as
discussed in more detail in Japan's submission. Article 11 of the DSU would require this Panel to
examine whether the importing Member satisfied th e substantive obligations under Section 16 of the
Protocol upon reviewing whether the explanation in the written notice was reasoned and adequate.

1 Appellate Body Report, United States – Safeguard Measures on Im ports of Fresh, Chilled or Frozen
Lamb Meat from New Zealand and Australia , WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001,
DSR 2001:IX, 4051, para. 105.

Implication of the Agreement on Safeguards and Article XIX of the GATT to the Protocol

5. Findings by the Appellate Body in the context of Article XIX of the GATT and the Agreement
on Safeguards also would provide a useful guidance to c onsider the substantive obligations of the
importing Member under Section 16 of the Protocol because the texts of these Agreements are
similar. However, they are not iden tical. Further, the provisions of the Protocol are not subordinated
to these Agreements, as provided in Paragraph 1.2 of the Protocol. In addition, Section 16 of the
Protocol does not make any reference to these Agreements with respect to substantive obligations.
These aspects indicate that the s ubstantive rules to impose a tran sitional safeguard measure under
Section 16 are separate and independent fro m the provisions of Article XIX of the GATT and the
Agreement on Safeguards. In this light, in referring to the rationale as clarified by the Appellate Body
on substantive and procedural obligations under the provisions of these Agreements, this Panel should
be careful so as not to incorporate rights and obligations under these WTO Agreements that do not
exist in Section 16 of the Protocol into the Protocol, and at the same time not to diminish rights and
obligations provided in the Protocol.

Paragraphs 16.3 and 16.6 of the Protocol

6. Paragraphs 16.3 and 16.6 of the Protocol set forth that a transitional safeguard measure must
be limited to the extent and the duration necessary to prevent or remedy such market disruption. The
market disruption is defined in paragraph 16.4 as ex isting only when there are: (i) imports of Chinese
products, which are increasing rapidly; (ii) material injury to the domestic industry; and (iii) a causal
link between these imports and the injury. Accordi ngly, the measure must address these factors, and
it may not be taken beyond the extent and duration to make such factors cease to exist or be prevented
from recurrence.

7. The importing Member's obligation to limit the period of time to impose a transitional
safeguard measure under the first sentence of paragraph 16.6 of the Protocol would not be diminished
or otherwise modified by its subsequent sentenc es. The second and third sentences address the right
of China when the measure has been imposed for more than two or three years. These provisions do
not refer to the importing Member's right or oblig ation in its imposition of a transitional safeguard
measure even after the two or three year period. The Member may continue imposing the measure
even after the two or three year period so long as the measure is necessary to prevent or remedy the
market disruption. The second and third sentences do not release the importing Member from
observing its obligation not to impose the safeguard measure when the measure is no longer necessary
to prevent or remedy the market disruption, even though the measure has not yet imposed for
two years.

CONCLUSION

8. Japan respectfully requests the Panel to examin e carefully the facts presented by the parties to
this dispute in light of Japan's arguments as discusse d in its submission and above to ensure the fair
and objective application of the provisions of the Protocol
and would be pleased to respond to any
questions that the Panel may have.