\n0.0\n1.0\n2.0\n3.0\n4.0\n5.0\n6.0\n7.0\nBase\nYear\nCVA - Required\nCVA - Total Reported\nCVA - Labour Reported\nThe Total Required CVA for\nMVTO Automobile Manufacturers\nhas not changed since the base\nyear and is insignificant.\n(Billions of $)\n1 Model Year = August 1 - July 31\n2 Cost of Sales = Cost of Production for Automobiles Produced in Canada and Sold for Consumption in\nCanada + Cost of Automobiles Imported for Consumption in Canada (based on Value for Duty)\nSRO - Legal Requirement\nEach SRO specifies a CVA requirement for the company concerned\nExample\nCAMI Automotive Inc. CVA is 60% of model year cost of sales.2\n= or >\nCAMI Automotive Inc. meets its CVA requirement in Labour alone.\nCAMI\nCanada\nGazette\nCanada\nGazette\nCanada\nGazette\nCanada\nGazette\n\nCanada's Figure 7\nFigure 7 - The Canadian-Value-Added (CVA)\nAmount in the Letters\nLetters - Not Legally Binding\n1 The amount for the Big Three is 60%. The amount for Volvo (Canada) Ltd. is 40%.\n CVA Target\nand Growth\nAmounts\nA one-time\nspecified CVA\ntarget amount\nby July 31,\n1968.\n1968\n31\nJULY\nTarget Amount:\n60%1\n=\nManufacturer’s\nCost of Sales\n(Current\nModel Year)\nManufacturer’s\nCost of Sales\n(Base\nYear)\nx\nCVA\nGrowth\nGrowth Amount:\n\n7.118 Note that the calculation in some letters refers to subtracting the cost of sales of the previous\nyear, rather than the base year. In practice, however, when calculations were performed, they were\ndone always using the base year.\n(n) Question 44 (imports and companies' capital relationships)\nCould Canada please comment on Japan 's statement that \"[e]ach qualified manufacturer in fact\nimports vehicles only from countries where its parent company, or a company with which it has a\ncapital relationship, has production facilities.\"\n(i) Reply from Canada\n7.119 In practice, Canada understands that it is characteristic of the globalized automotive industry\nthat there be some sort of capital, manufacturi ng or similar relationship between the automobile\nmanufacturers and companies from whom they import. This appears to be true not only of the\nqualified manufacturers but also of Japanese and EC manufacturers. Certainly, neither of the\ncomplainants has offered any evidence to the contrary.\n7.120 Canada notes that, at least in Canada, this practice is the choice of the companies, and is in no\nsense required by Canadian measures. Nothing in the Canadian measures requires or induces such\nrelationships as a condition of importation, nor do Canadian measures limit the choice of relationships\non the part of the companies. Under the Canadian measures, the qualified manufacturers are entitled\nto source vehicles from wherever they choose regardless of any relationships. When companies do\nchoose to enter into relationships, they are free to establish such relationships without limitation as to\ncompany or country.\n7.121 The breadth of these private choices demonstrates the globalization of the automotive\nindustry. The affiliations of manufacturers extend to virtually all significant producing countries. For\nexample, according to information provided by th e Big Three, those companies alone currently have\nvehicle manufacturing affiliations involving at least 24 separate countries, including Japan, France,\nGermany, Portugal, Sweden and the United Kingdom. Canada refers the Panel to its response to the\ncomplainants' rebuttals, where, in responding to Japan's Article I allegation, Canada lists all of these\n24 countries. Canada also refers the Panel to its Exhibit CDA-12, in which Canada has provided a\ncomplete list of global automotive affiliations for 1999.\n7.122 Again, these are private decisions. Canadian measures do not require such a wide geographic\nspread of company relationships, nor do Canadian measures in any way limit manufacturers from\nexpanding their relationships to other companies or countries. Canada points out that, independent of\nany requirements of Article I, it is evident that the companies' choices have resulted in a wide\ngeographic sweep of relationships and of imports.\n(o) Questions 45 (MFN import duty rates on motor vehicles since 1965)\nCould Canada please provide figures showing the applicable Canadian MFN import duty rates on\nmotor vehicles since 1965, including any evolution in these rates.\n\n(i) Reply from Canada\nCanada's MFN Tariff on Motor Vehicles Since 1963\nEFFECTIVE DATE BOUND RATE\nApril 1, 1963 17.5%\nJune 1, 1969 15.0%\nJanuary 1, 1980 14.3% (Tokyo Round Reductions Commence)\nJanuary 1, 1981 13.6%\nJanuary 1, 1982 12.8%\nJanuary 1, 1983 12.1%\nJanuary 1, 1984 11.4%\nJanuary 1, 1985 10.7%\nJanuary 1, 1986 9.9%\nJanuary 1, 1987 9.2%\nJanuary 1, 1995 8.6% (Uruguay Round Reductions Commence)\nJanuary 1, 1996 8.0%\nJanuary 1, 1997 7.3%\nJanuary 1, 1998 6.7%\nJanuary 1, 1999 6.1%\n(p) Question 2(6) from Japan (foreign trade zo nes, drawback programs and end-use tariff\nclassification)\nCanada has referred to foreign trade zones, drawback programs and end-use tariff classification.\nJapan does not understand the relevance of these measures to this present case.\n• Under Canada’s own analogy between the Auto Pact and foreign trade zones, must the Auto\nPact Manufacturers pay the customs duty exempted at the border under the Duty Waiver on the\nimported vehicles when they sell those vehicles to any person within Canada? Can Canada\nprovide the definition of the foreign trade zone and an example in which the Auto Pact is\nadministered in such a manner?\n• Under Canada’s own analogy between the Auto Pact and drawback programs, must the Auto\nPact manufacturers re-export the vehicles imported duty free under the Duty Waiver to any other\ncountry in order to enjoy the benefit of the duty drawback? Can Canada provide the definition\nand an example in which the Auto Pact is administered in such a manner?\n• Under Canada’s own analogy between the Auto Pact and end-use tariff classification, must\nthe vehicles imported duty free under the Duty Waiver be used in any product other than the\nimported vehicle itself? Can Canada provide the definition of the end-use tariff classification and\nan example in which the Auto Pact is administered in such a manner?\n• Under each of the respective schemes described above, is it supposed that importers must be\nqualified to enjoy the duty exemption? If so, what are the conditions for the qualification or\neligibility?\n(i) Reply from Canada\n7.123 Japan has misunderstood Canada’s argument. Canada did not at any time claim the MVTO\nand SROs are themselves foreign-trade-zone programmes, duty drawback programmes, or end-use\ntariff classifications. Canada was responding to Japan’s argument that any condition on importation\nthat is not related to the product itself must be a violation of Article I. This argument is wrong, as\n\ndemonstrated by the existence of numerous programmes that create conditions on importation that are\nnot related to the product itself.\n7.124 Foreign-trade-zone programmes require products to be imported by particular importers, for a\nparticular use. Duty drawback programmes require products to be incorporated into finished products\nand re-exported. End-use classifications require products to be put to a particular use. Each of these\nis plainly a condition on importation, unrelated to the products themselves. Each is permitted.\n7.125 The mere fact that the MVTO and SROs set conditions for importation does not in and of\nitself determine whether those measures violate Article I. That Article does not prevent the\nimposition of terms and conditions on importation. It does not prevent Members from limiting the\nnumber of eligible importers, or from setting eligibility criteria for those importers. If it did, all\nimport licensing schemes would be prohibited. Article I only prevents the granting of an advantage to\nthe products of one country without immediately a nd unconditionally extending that advantage to the\nproducts of all Members.\n(q) Question 4 from the EC (Canada's Figure 4 – imports under the MVTO and SROs)\nCanada's Figure 4 appears not to show the impor ts under the MVTO 1998 and SROs originating in\nthe USA and Mexico. Also, the percentages shown in that figure do not appear to take into account\nthose imports. Could Canada explain that appar ent omission? Does it mean that since 1991 all\nimports from the US and Mexico were made under the CUSFTA/NAFTA? Could Canada indicate\nwhat would be the relevant percentages if US and Mexican imports made under the MVTO 1998 and\nthe SROs are taken into account?\n(i) Reply from Canada\n7.126 There was no omission. Canada prepared Figure 4 on the basis of the list of countries in\nJapan’s Table 6. The supporting data for the figure is found in Exhibit CDA-6. This does not mean\nthat since 1991 all imports from the United States and Mexico were made under CUSFTA/NAFTA.\nThe percentages are irrelevant to the Japanese argument that Canada was rebutting.\n(r) Question 6 from the EC (data on cost of parts and materials and cost of sales)\nCould Canada please provide the following data, on average for all the MVTO and SRO beneficiaries\nof each class of vehicles, for the most recent model year for which the information is available:\n• the percentage of the cost of parts and materials to the cost of sales.\n• the percentage of CVA to the cost of sales of the vehicles produced in Canada.\n• the percentage of CVA to the cost of sales of the vehicles sold in Canada.\n(i) Reply from Canada – preliminary note\n7.127 The figures provided are all for model year 1996-97.\n(ii) Reply from Canada - the percentage of the cost of parts and materials to the cost of sales.\n7.128 Note: Cost of sales is a term that includes only the cost to the manufacturer of vehicles sold\nfor consumption in Canada. In other words, cost of sales is the sum of (i) the cost of producing\ndomestic vehicles sold for consumption in Canada, and (ii) the cost of vehicles imported for sale in\nCanada (based on their value for duty). Cost of sales excludes vehicles sold for export. Canada does\nnot collect, and does not have, a \"cost of sales\" for all vehicles produced in Canada. Thus, when the\n\nEuropean Communities asks for the percentage of parts and materials to cost of sales, the result is\nmeaningless. It takes the value of all parts and materials used in Canadian production, and compares\nit to the cost of only those vehicles sold for consumption in Canada (whether imported or domestic).\nThis obviously inflates the percentages.\n7.129 The percentages of parts and materials to cost of sales (of vehicles sold for consumption in\nCanada) are as follows:\nAutomobiles: 167%;\nSCVs: 211%;\nBuses: 192%.\n(iii) Reply from Canada - the percentage of CVA to th e cost of sales of the vehicles produced in\nCanada.\n7.130 Note: This question asks for a comparison of CVA to the cost of sales of only those vehicles\nproduced in Canada. As Canada explained above, Canada does not have the cost of sales figure\nrequested, because it would include the cost of vehicles exported. Canada is providing the percentage\nof CVA to the cost of sales of vehicles produced in Canada and sold for consumption in Canada. This\ninflates the percentages, because it compares total CVA to only a portion of the cost of sales (that is, it\nleaves out the cost of sales of imported vehicles).\n7.131 The percentages of CVA to the cost of vehicles produced in Canada and sold for consumption\nin Canada are:\nAutomobiles: 204%;\nSCVs: 203%;\nBuses: 188%.\n(iv) Reply from Canada - the percentage of CVA to the cost of sales of the vehicles sold in\nCanada.\n7.132 Note: Canada does not have the cost of sales of all vehicles sold in Canada, which would\ninclude vehicles sold for export. As stated above, Canada can only provide the percentage of CVA to\nthe cost of sales of vehicles sold for consumption in Canada. This is the calculation used in\ndetermining whether companies like CAMI Automotive Inc. have met the CVA requirements in their\nrespective SROs.\n7.133 The available percentages are:\nAutomobiles: 47%;\nSCVs: 57%;\nBuses: 116%.\n\n(s) Question 7 from the EC (1998 automobile imports from the US and Mexico under the\nMVTO)\nCould Canada please indicate how many automobiles (units and/or value) were imported during 1998\nfrom the USA and Mexico by the MVTO beneficiaries:\n• under the Tariff Exemption\n• under NAFTA\n• under the MFN duty rate\n(i) Reply from Canada\n• under the Tariff Exemption\n7.134 The total value of automobiles imported from the United States under the MVTO in 1998 was\n$9,541,000,000. The total value of automobiles imported from Mexico under the MVTO in 1998 was\n$419,000,000. These numbers added together amount to $9,960,000,000.\n7.135 Note: This number is not the same as that provided for \"North America\" for 1998 in Exhibit\nCDA-25, provided in response to the Panel's Question 42. That question asked for the total for all\nvehicles imported under both the MVTO and the SROs, not just the MVTO.\n• under NAFTA\n7.136 The total for all vehicles is provided in response to the Panel's Question 42. Because the\nEuropean Communities has asked for information re lating only to the MVTO beneficiaries, and not\nthe SROs, it would be necessary to determine the import values for each company individually, and\nthen aggregate them. Canada does not have individual company data, and therefore cannot provide\nthe information requested.\n• under the MFN duty rate\n7.137 Canada does not have this information for the same reason discussed above.\n(t) Question 52 (private vs. governmental action)\nCould the EC and Japan respond to the arguments by Canada in its response to Panel Question 4 that\nthe Panel Report in Japan – Measures Affecting Consumer Photographic Film and Paper offers little\nassistance to the Panel in this case, especially because \"[t]he Panel’s analysis of the word 'measure'\ncentred on considerations particular to the country whose 'measure' was under review\"?\n(i) Reply from Japan\n7.138 As the Government of Japan stated in its response to Panel Question 4, it shares ultimate\nconclusion with Canada that the Film case is not relevant to the present case. Every measure subject\nto a WTO panel procedure has its own unique characteristics reflecting the economic, social and\npolitical situations in the country under review. In Canada's response to the Panel Question 4, Canada\nseemingly attempts to dismiss Japan's claim on the Letters of Undertaking being in violation of\nArticle III:4 by way of discussing the \"measure\" in the sense of Article XXIII:1(b) of GATT at length,\ninstead of discussing the \"requirements\" in the sense of Article III:4. It is the latter provision of\nGATT that Japan is claiming the violation of in the present case, as stated in its response to Panel's\nQuestion 51 and other documents.\n\n(ii) Reply from the EC\n7.139 The Panel on Japan – Film is relevant for this case in two different respects.\n7.140 First, the panel held that \"the fact that action is taken by private parties does not rule out the\npossibility that it may be deemed governmental if there is sufficient government involvement in it\".711\n7.141 That finding was presented by the Panel as a restatement of a well-established and generally\napplicable principle, and not as an exceptional finding justified by the unique features of the Japanese\npolitical system. If anything, the degree of Gove rnment involvement in the Letters of Undertaking is\ngreater than in some of the actions that were considered as Government \"measures\" in Japan –\nFilm.712\n7.142 Second, the panel ruled that \"even non-binding, hortatory wording in a government statement\nof policy could have a similar effect on private actors to legally binding measure\".713\n7.143 Again, the Panel formulated that conclusion in generally applicable terms and did not confine\nit to the specific circumstances of the case under consideration. In any event, as already explained by\nthe European Communities, this issue does not even arise in this case. Unlike the Japanese measures,\nthe Letters of Undertaking are not mere statements of Government policy. They are drafted in\nmandatory language and have been regarded as binding by both parties. Moreover, the submission of\nthe Letters of Undertaking was a necessary condition for the granting of the Tariff Exemption. By\ncontrast, in Japan – Film there was no direct link between the measures and the granting of any\nspecific government benefit.\n2. Questions and replies relating to claims under Article III:4 of the GATT\n(a) Question 13, in part (the ratio requirements)\nThe EC argues that the ratio requirement is inconsistent with GATT Article III:4 because the\nmaximum limit on the total sales value in practice operates \"so as to restrict exclusively the sales of\nimported motor vehicles\". In this connection, the EC further states that \"the ratio requirements have\nthe consequence that the beneficiaries cannot, withou t losing the entitlement to the Tariff Exemption,\nsell in Canada any imported motor vehicles in excess of a certain amount that is directly related to\nthe sales value of their domestic production of motor vehicles\".\nThe EC also that the ratio requirement is inco nsistent with Article 2.1 of the TRIMs Agreement\nbecause it falls within the scope of Item 1(b) of the Illustrative List. The EC explains this view by\nstating that \"under the ratio requirements the amoun t of imported motor vehicles that a beneficiary\nmay sell in Canada (and, therefore, that it may be in terested in 'purchasing') varies according to the\nvalue of the motor vehicles which it exports\".\n• Is the EC's argument regarding the inconsistency of the ratio requirement with Article III:4 of the\nGATT identical to its argument on the inconsistency of that requirement with Item 1(b) of the\nIllustrative List annexed to the TRIMs Agreement?\n\n711 Panel Report on Japan – Film, supra note 93, para. 10.56.\n712 See, e.g., ibid., paras. 10.298-10.299.\n713 Ibid., para. 10.49.\n\n(i) Reply from the EC\n7.144 No. They are similar but not identical. The European Communities claims that the ratio\nrequirements violate Article III:4 because they place a quantitative limit on the sales of motor vehicles\nimported under the Tariff Exemption. Whether or not that limit is linked to the volume of exports is\nirrelevant in order to establish a violation of Article III:4. For that, it is sufficient to show that sales of\nimported goods are limited, while sales of like domestic goods are not.\n7.145 On the other hand, the EC’s claim under Item 1 (b) of the Illustrative List is that the ratio\nrequirements place a limit on the sale of imported vehicles which is \"related\" to the amount of\nvehicles exported by each beneficiary. Thus, this claim involves an additional element, which is not\nrequired in order to establish a violation of Article III:4, namely that the limitation on internal sales be\nrelated to the value of exports.\n(b) Question 14 (the ratio requirements)\nIn support of the view that the production-to-sales ra tio requirement is inconsistent with Article III:4\nof the GATT, Japan describes a situation in which an Auto Pact Manufacturer decides to sell\nadditional motor vehicles produced in Canada, which \"would increase the competition for sales of\nlike imported motor vehicles\".\n• Is it the view of Japan that any measure which leads to increased domestic production of a\nproduct and hence increases the competitive pressure faced by like imported products as a result\nof an increase in domestic sales of that product is per se inconsistent with Article III:4?\n• How does Japan respond to the argument of Canada that the production-to-sales ratio is\ncomparable to \"a production-based subsidy, which requires a certain level of production to\nreceive a certain level of benefits\", and that such a production-based subsidy is not a violation of\nArticle III?\n• Related to this, what is the view of Japan on the argument advanced by Canada that \"[N]either\nthe GATT not any other WTO Agreement prohibits measures that increase production levels;\nthere is no authority anywhere for the proposition that a mere increase in domestic production\nnegatively affects the conditions of competition for like imported products\"?\n(i) Reply from Japan\nJapan will address these points in its rebuttal.\n(c) Question 15 (the ratio requirements)\nWith reference Canada's previous arguments, could Canada please explain its views on whether or\nnot the production-to-sales ratio affects the internal sale in Canada of imported motor vehicles other\nthan those imported by MVTO and SRO beneficiaries?\n(i) Reply from Canada\n7.146 The production-to-sales ratios do not affect the internal sale of any vehicles in Canada,\nimported or domestic. Canada's previous arguments address the EC argument that the ratios operate\nto cause beneficiary companies to limit their sales of imports, without limiting their sales of domestic\nvehicles. The paragraphs thus explain why the ratios do not affect the internal sale of MVTO and\nSRO imports. The ratios merely determine whether the company’s imports will be dutiable or duty-\nfree. MVTO and SRO companies are free to import and sell as many vehicles as they choose. As\n\nlong as sales are within the relevant ratio, imports remain duty-free. Once sales exceed that ratio, the\nmanufacturer must pay the normal MFN duty on subsequent imports. In either case, there is no effect\non the conditions of sale on the internal market in Canada.\n7.147 The ratios determine whether or not products are subject to duty. In other words, the only\npossible effect relates to the importation of the products.\n7.148 The production-to-sales ratios also do not affect the internal sale of vehicles imported by non-\nMVTO or SRO companies. These companies are not required to keep any ratio whatsoever and can\nimport and sell vehicles, subject only to Canada’s MFN duty on motor vehicles. The EC’s argument\ncannot apply to them.\n7.149 Canada would also note that the ratios have no actual or intended effects on market conditions\nin Canada. As Canada stated, Canadian production levels are well above the minimal levels required\nby the ratios. The ratios thus have not increased the number of domestic vehicles available for sale in\nthe Canadian market. Manufacturers are producing vehicles for commercial reasons, and not in order\nto increase their ability to import.\n(d) Question 16 (meaning of \"require\" in Chapeau of TRIMs Illustrative List)\nCanada states that the text of the TRIMs Agreement \"is explicit in stating that a prohibited TRIM must\n'require' the purchase or use of domestic products.\" Could Canada further elaborate on its views on\nthe meaning of the word \"require\" in the Chapeau of the Illustrative List of the TRIMs Agreement\nespecially in light of the statement that \"TRIMs which are inconsistent with Article III:4 of GATT\n1994 include those …compliance with which is necessary to obtain an advantage, and which\nrequire…\"\n(i) Reply from Canada\n7.150 The Chapeau to paragraph 1 of the Illustrative List refers to \"TRIMs that are inconsistent with\nthe obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994.\" It\ntherefore deals only with measures that have already been found to be TRIMs, and sets out a two-step\ntest to determine whether they are covered by the List.\n7.151 First, the measure must be either mandatory or enforceable under domestic law or under\nadministrative rulings, or such that compliance with it is necessary to obtain an advantage. Second,\nthe alleged measure must require one of the actions set out in sub-paragraphs (a) and (b).\n7.152 The first part of the test in the Chapeau goes to whether the alleged prohibited TRIM is a\nbinding measure. If the answer to this questi on is \"no\", then the TRIM is not covered by the\nIllustrative List. If the answer is \"yes\", then it must be determined whether the binding is of the type\nlisted in sub-paragraphs (a) or (b).\n7.153 The CVA requirements contained in the MVTO and SROs are binding measures within the\nmeaning of the Chapeau. They are mandatory and enforceable. However, these requirements are not\ncovered by the second part of the test in the Chapeau because they do not \"require\" the actions listed\nin sub-paragraphs (a) and (b). They do not (a) \"require\" the purchase or use of domestic products, and\nthey do not (b) \"require\" that purchase or use of imported products be limited to an amount related to\nthe volume or value of domestic products exported. They are not included in the examples of\nprohibited TRIMs.\n7.154 The additional CVA amounts found in the letters do not fall within the scope of Article III:4,\nand are not covered by the first part of the test in the Chapeau, because they are neither mandatory nor\nenforceable, and they need not be complied with in order to obtain an advantage.\n\n(e) Question 17 (the Letters)\nCanada submits that the arguments of the EC that certain Letters of Undertaking were required of the\nmanufacturers as a condition of Canada's signing the Auto Pact, and that the beneficiaries have\nassumed that a failure to meet them would result in Canada withdrawing the Tariff Exemption, are\nwithout basis in fact. Canada states that a failure to meet the voluntary undertakings would not lead\nto denial of duty-free treatment and that reve nue Canada does not review whether MVTO companies\nhave met their commitments under the letters.\nIn light of the statements of the EC and of Ja pan, and without prejudice to the Panel's view on\nwhether the Letters of Undertaking are properly described as \"requirements\" within the meaning of\nGATT Article III:4, could Canada provide a detailed explanation of:\n• the circumstances surrounding the submission of the Letters of Undertaking, in particular as\nregards the nature of the role, if any, of Canadian authorities and the relationship of the Letters\nto the Auto Pact;\n• the nature of the commitments contained in the Letters;\n• the current practical significance, if any, of these commitments;\n• the relationship of the commitments contained in the Letters to the requirements of the MVTO\n1998 and the SROs; and\n• arrangements, if any, for gathering information on the application of the commitments contained\nin the Letters.\n(i) Reply from Canada\n7.155 At the conclusion of the Auto Pact, the Canadian government sought assurance from the\naffected companies that they understood the new system. It provided them with a draft letter outlining\nwhat the requirements would be under the Pact, and what it hoped would be achieved as a result. The\ncompanies were free to modify the letter in any way they chose – for example, the letter from General\nMotors of Canada Ltd. is different in both form and substance from the others, and in no way affected\nthat company’s MVTO status.\n7.156 The commitments in the letters are statements of what was hoped to be achieved under\nCanada’s implementation of the Auto Pact system. They have no legal status or existence in Canada,\nbecause they are not contracts, statutes, or regulations. They cannot create any form of obligation or\nduty. As Canada stated, the Canadian government lacks the legal authority to deny MVTO and SRO\nbenefits for a failure to meet the commitments. No other form of punishment can be imposed either.\n7.157 The letters have no current practical significance. No benefits depend on meeting the CVA\nlevels contained in the letters and no sanctions exist for failing to do so. Neither the government, nor\nthe affected companies, consider the letters to be binding in any way.\n7.158 The CVA amounts in the letters are unrelated to the requirements of the MVTO and the\nSROs. Those requirements determine whether companies are entitled to duty-free benefits in any\ngiven year. They stand on their own, and are complete in themselves. The letters are an expression of\n\nwhat was hoped would be achieved through the Auto Pact system. Success or failure in meeting those\nexpectations has no bearing on meeting MVTO or SRO requirements.\n7.159 There are no arrangements for collecting the in formation relating to the application of the\nletters. Some of it is contained in the information collected to verify whether companies are meeting\ntheir legal requirements under the MVTO and SROs. Much of it is not, and the Canadian government\nmakes no effort to collect it. While some companies provide it anyway, the government does not\naudit or otherwise verify the amounts those companies report.\n(f) Question 18 (the Letters and private vs. governmental action)\nCanada argues that certain Letters of Undertaking are not \"requirements\" within the meaning of\nGATT Article III:4 on the grounds that they have no legal status and no legal effect, and that the\nCanadian Government lacks the legal authority to deny duty-free eligibility in case of a failure to\nmeet the voluntary undertakings in such Letters. What is Canada's view on the argument of the EC\nand Korea that GATT/WTO case law, as stated most recently in the Panel Report on Japan –\nMeasures affecting Consumer Photographic Film and Paper (WT/DS44/R), supports the\ncharacterization of the Letters of Undertaking as measures which are attributable to the Government\nof Canada?\n(i) Reply from Canada\n7.160 The arguments of the European Communities and Korea are wrong. The letters are not\nmeasures within the meaning of Article III:4 b ecause they are not binding on the companies that\nsubmitted them.\n7.161 The panel in Japan – Film was clear in stating that whether an act is a \"measure\" must be\ndetermined on a case-by-case basis, having regard to the context in which the act was taken. Private\nacts can only be measures where there is sufficient government involvement, for example where the\nadministrative structure exerts \"maximum possible pressure\" on private actions, and has the \"rationale\nas well as the essential elements of a formal system\".\n714 In the Canadian context, there is no system of\nadministration beyond the formal regulatory system. The government cannot direct private action\nwithout a specific law or regulation. No law or regulation required the submission of the letters, and\nno law or regulation requires the companies to meet the commitments they gave. The letters therefore\ncannot be measures.\n7.162 Even if the Panel were to find that the letters are \"measures\", there would remain the question\nof whether they are \"laws, regulations and requirements\" within the meaning of Article III:4. Canada\nrecalls here its answer to the Panel’s question 4. The panel in Japan – Film did not address the\ninterpretation of this phrase; instead, it twice noted that \"requirement\" appears to be narrower in\nmeaning than \"measure\". It subsequently assumed for the purposes of its analysis that \"laws,\nregulations and requirements\" encompassed a broad range of government actions and private actions\nthat may be assimilated to government action.\n7.163 Japan and the European Communities, as the complaining parties, bear the burden of\ndemonstrating that the letters are attributable to the Canadian government and are \"laws, regulations\nor requirements\" within the meaning of Article III:4. Since the circumstances present in previous\ncases are not present here, the complaining parties cannot discharge this burden.\n\n714 Panel Report on Japan – Film , supra note 93, para. 10.54, citing Panel Report on Japan –\nSemiconductors, supra note 112.\n\n(g) Question 46 (the ratio requirements)\nThe EC states that \"the ratio requirements have the consequences that the beneficiaries cannot,\nwithout losing the entitlement to the Tariff Exem ption, sell in Canada any imported motor vehicles in\nexcess of a certain amount that is directly related to the sales value of their domestic production of\nmotor vehicles.\"\nIn its response to Panel Question 13, the EC observes that \"the ratio requirements violate Article III:4\nbecause they place a quantitative limit on the sales of motor vehicles imported under the Tariff\nExemption.\"\nThe EC also has argued that \"the ratio requirements are internal measures subject to Article III, and\nnot to Article XI, because they do not affect the right to import motor vehicles, but the right to sell\nthem in Canada.\"\nCould the EC further explain whethe r its argument is that the ratio requirements restrict the internal\nsale in Canada of any imported motor vehicles or that they restrict the internal sale in Canada of\nthose motor vehicles that are imported duty-free?\n(i) Reply from the European Communities\n7.164 The European Communities claims that the ratio requirements limit the sale in Canada of\nmotor vehicles imported under the Tariff Exemption.\n(h) Question 47 (the ratio requirements)\nWhat is the EC's response to the argument of C anada that the only possible effect of the ratio\nrequirement relates to the importation of products in question (Canada's response to Panel\nQuestion 15) and to the observation of Canada that \"the EC's argument would convert a measure\nsetting out the terms under which importation takes place – which is manifestly a border measure –\ninto a limitation on internal sales under Article III:4\"?\n(i) Reply from the EC\n7.165 The ratio requirements do not restrict the right to import motor vehicles under the Tariff\nExemption. They limit the right to sell in Canada vehicles already imported in Canada under the\nTariff Exemption. Therefore, the ratio requirements are internal measures in the sense of Article III\nof GATT and not border measures. As already explained by the European Communities, the\ndistinction between import measures subject to GATT Article XI and internal measures subject to\nGATT Article III is a formal one, and not one based on the effects of the measures on the volume of\nimports.\n(i) Question 48 (the ratio requirements)\nWith reference to Canada's argument that the ratio requirements do not affect the internal sale of\nimported motor vehicles, could Canada respond to the ar gument of the EC that \"any increase in the\nsales value of motor vehicles produced in Canada by the beneficiary will give rise automatically to an\nidentical increase in the value of permitted domestic sales,\" whereas \"an increase in imports of motor\nvehicles does not entail any increase in the value of permitted domestic sales\"?\n(i) Reply from Canada\n7.166 The EC's argument is based on a mistaken premise. There is no limit on domestic sales under\nany circumstances for any manufacturer or any other person. Therefore, the EC's reference to\n\"permitted domestic sales\" is inapt. Canada refers the Panel to its previous arguments, which explain\n\nthe workings of the ratios. Production does not affect in any way the value of vehicles that can be\nsold in Canada. It has the potential to affect only the value of vehicles that can be imported duty-free.\n7.167 The production-to-sales ratio does not set any type of quantitative restriction on either the\nvalue or volume of domestic sales, either of domestic or imported vehicles. In the event that a\ncompany were operating at or near its ratio, the company would simply begin paying duty on its\nvehicle imports. Of course, as Canada made clear in its initial response, manufacturers are in fact\noperating well above the required ratios. But there is no limit in either case on how many imported\nvehicles may be sold in Canada.\n7.168 As Canada now understands the EC argument, it relates exclusively to vehicles imported\nduty-free under the MVTO or SROs. It argues that because there is a limit on the value that can be\nimported duty-free, the vehicles so imported are disadvantaged in respect of their internal sale. The\nEuropean Communities concedes that other imported vehicles receive treatment no less favourable\nthan that accorded to domestic vehicles, as required by Article III.\n7.169 There is no basis in Article III for distinguishing between otherwise like products on the basis\nof whether the products were subject to an import duty. The question is whether imported vehicles –\nregardless of whether some or all of them were subject to import duty at the border – are treated less\nfavourably than like domestic vehicles for purposes of internal laws, regulations or requirements\naffecting their sale. The answer in the case of the Canadian measures is clearly no. There is no limit\non how many like imported vehicles can be sold. There is a potential limit on how many of those like\nvehicles will have been imported duty free, but that is not an Article III question. Article III applies to\nmeasures affecting internal competition between imported and domestic products, after imported\nproducts have cleared the border, and any customs duties have been paid.\n(j) Question 49 (the ratio requirements)\nCould Canada further explain whether its position that the ratio requirements do not affect the\ninternal sale of imported motor vehicles is based on the fact that current production levels exceed the\nratio requirements?\n(i) Reply from Canada\n7.170 While it is true that the level of Canadian production is such that the companies could be\nimporting substantially more vehicles duty free than they currently choose to do, that is not the reason\nthat Canada has said that the ratio requirements do not affect the internal sale of imported motor\nvehicles. Rather, the reason is as explained above in the response to Question 48. There is no\nrestriction on the internal sale of vehicles, whether a manufacturer is below, at or above its ratio. All\nvehicles, whether imported or domestic or, if imported, whether imported duty-free or subject to duty,\nor imported by a qualifying manufacturer or a non-qua lifying manufacturer, are subject to exactly the\nsame rules respecting internal sale, and all other matters subject to Article III. There are no limits of\nany kind on internal sale; any manufacturer can always sell as many vehicles as the market demands.\n(k) Question 50 (the Letters)\nWith respect whether or not the Letters of Undertaking are \"requirements\" within the meaning of\nGATT Article III:4, could Canada comment on:\n• the argument of the EC that \"the Letters of Undertaking had been negotiated with the Canadian\nMinistry of Industry and that their submission was regarded by Canada as a condition sine qua\nnon for signing the Auto Pact\"\n\n(i) Reply from Canada\n7.171 The European Communities has failed to support these allegations with any evidence.\nMoreover, the historical record does not support the EC's allegations. Canada's files do not indicate\neither that the texts were \"negotiated\" or that submission of the letters was a sine qua non for signing\nthe Auto Pact. Canada's response to the Panel's Question 17 was based on such information as it has.\nGovernment records show that Canada provided a draft of the letters, but it is inaccurate to say that\nthe letters were \"negotiated\". Neither do the records support the EC position that the letters were a\ncondition sine qua non for signing the Auto Pact. There is nothing in the records to indicate what\nCanada would have done if the companies had not delivered the letters. However, it is illogical to\nbelieve that Canada would have annulled the agreement without the letters, given that it was a\ncarefully negotiated bilateral treaty.\n7.172 What the European Communities claims as support for its argument on this point is at best\nambiguous. The reference provided is to a statement in Exhibit EC-22 made by a Chrysler\nCorporation executive, who said that prior to the signing of the Auto Pact, Canada sought assurances\nthat its industry would remain viable. He did not state that Canada made the provision of letters a\ncondition sine qua non.\n• the argument of the EC that the Canadian Go vernment requested affected companies to make\nspecific commitments with respect to increases in Canadian value added\n(ii) Reply from Canada\n7.173 The record shows that Canada did request undertakings respecting Canadian-value-added.\n• the arguments of the EC regarding the alleged monitoring by Canadian authorities of compliance\nwith the Letters of Undertaking\n(iii) Reply from Canada\n7.174 These EC arguments are speculative and without support on the record. The European\nCommunities invokes a thirty-five year old letter containing prospective expectations of an industry\nexecutive. However, whether or not there ever were such \"audits\" on a quarterly or annual basis in\nthe early years of the Auto Pact, there are no such audits now. Indeed, the Canadian Government\ndoes not now review any information pertaining to th e letters. As the letters were never enforceable,\nthere is no clear record as to when Canada ceased informal reviews of information provided in respect\nof the letters. At this point it is clear that there is no practice of review at all. It is Canada's\nunderstanding that the companies are fully aware that no reviews are carried out.\n7.175 The European Communities descends into speculation and innuendo in claiming that the\nGovernment monitors CVA under the MVTO only to ob tain information pertinent to the letters. The\nCVA in the MVTO is a binding obligation, and is monitored and enforced for that reason.\n7.176 The European Communities tries to find support for its speculations by citing the Canadian\nGovernment's own public avowal that the letters are not binding. The European Communities claims\nthat because the Government website also observes that the letters \"typically\" have been met, this\ndemonstrates that the government must be monitori ng to make such a statement. Leaving aside that\nthe word \"typically\" connotes something less than full compliance with what the European\nCommunities alleges to be binding letters, it should be noted that the Big Three at least have long\npublicly and proudly boasted of the extent of their activities in Canada, much as companies and\ncorporations do throughout the world to get credit for the good things they do for the countries in\nwhich they operate. That does not mean that those good things are required.\n\n7.177 It follows that the EC's conclusions are as bereft of merit as the speculations on which they\nare built. As Canada explained, whatever may have been in the minds or aspirations or expectations\nof government and industry in years past, there is no truth to the EC claim that these letters have any\ncurrent effect, nor does Canada ascertain, audit or otherwise review \"compliance\" with the letters.\n• the argument of Japan that statements of the Chief Executive Officers of two of the Auto pact\nbeneficiaries demonstrate that the letters of Undertaking are \"binding and operative\"\n(iv) Reply from Canada\n7.178 While the Canadian Government was not involved in or consulted regarding the apparently\ninformal remarks that were quoted, it may be doubted whether, even as an expression of company\nperception, there was any intended legal significance in the choice of words on the part of these\nexecutives. There perhaps should be some allowan ce for hyperbole in an informal setting in any\nevent, and this was a time of some tension between auto companies as to their relative contributions to\nthe Canadian economy. Regardless, Canada doubts very much that executives of these companies or\nof any other qualifying manufacturer would make these statements using the same words today,\nbecause Canada has made it clear that the letters are not binding.\n(l) Question 51 (the Letters and FIRA and EEC-Regulation on Imports of Parts and\nComponents)\nCould the EC and Japan state their views on the argument that under the tests articulated in FIRA\nand EEC-Regulation on Imports of Parts and Com ponents the letters of Undertaking are not\n\"requirements\" within the meaning of GATT Article III:4.\n(i) Reply from Japan\n7.179 The Government of Japan has refuted the Canadian argument that the letters of undertaking\nare not \"requirements\" within the meaning of Article III of the GATT. Canada tries to focus only on\nthe surface of the letters and other legal instruments and hide substantial role and significance of the\nletters. It is quite implausible that private companies voluntarily submit to the government the\ncommitments of local contents in their production when such commitments only restrict those\ncompanies' activities. It is of no merit for Canada to argue that the letters have not been expressly\nimplemented by a Canadian law or regulation and that the MVTO 1998 and SROs do not, on their\nface, provide for sanctions in the event that the commitments in the letters are not complied with. The\nsignatories of the letters viewed them as binding, the letters contain audit and reporting requirements,\nand there is no expiry date on the letters. The MVTO 1998 and the SROs are \"Orders in Council\"\nwhich are statutory instruments that can be revoked or amended by the Government of Canada. The\nletters of undertaking are enforceable as the Government of Canada is capable of revoking or\namending the relevant instruments if the commitments in the letters are not implemented.\n7.180 In any event, the Government of Japan is of the view that the Canadian characterisation of the\ntests articulated in the FIRA and Parts and Components cases is inaccurate at best. Both of these\ncases found the \"voluntary\" undertakings to be \"requirements\" within the meaning of Article III:4.\n7.181 In Canada – FIRA, the voluntary undertakings were \"requirements\" primarily because they\nbecame conditions for which compliance could be enforced (para. 5.4). As noted, the letters of\nundertaking were conditions for the original duty-free treatment and were and continue to be\nenforceable through withdrawal of the advantage via revocation or amendment of the MVTO 1998\nand the SROs. In EEC – Parts and Components, the Panel found that Article III:4 refers not only to\nrequirements which an enterprise is legally bound to carry out (as in the FIRA case) but also those\nwhich an enterprise voluntarily accepts in order to obtain an advantage from the government. The\n\nletters of undertaking were entered into by the signatories in order to obtain the advantage of the Duty\nWaiver from the Government of Canada.\n7.182 Thus, the letters of undertaking in this dispute are clearly \"requirements\" within the meanings\nin both Panel Reports. Had Canada been able to point to a case where a panel found similar\nundertakings falling outside the scope of \"requirements\" under Article III:4, the Canadian argument\nwould have been more persuasive.\n(ii) Reply from the European Communities\n7.183 The European Communities has already addressed th is argument. For ease of reference, the\nrelevant passages are reproduced here below:\n\"Canada claims that its interpretation of the term \"requirement\" is derived from\nCanada – FIRA\n715 and EC – Parts and Components.716 Those reports, however, in no\nway suggest that the panels purported to formulate, or that they were applying, a set of\ngenerally applicable criteria.\n\"In any event, the Letters of Undertaking fit within the same pattern as the measures at\nissue in EC – Parts and Components. As explained by Canada, in that case the Panel\nfound that the undertakings to increase local content given by the subsidiaries of\ncertain Japanese companies were \"requirements\" because they were a \"condition\nprecedent to obtaining a benefit\". The same is true of the Letters of Undertaking. The\nCanadian Government would not have concluded the Auto Pact if the Big Three had\nnot submitted the Letters of Undertaking.\n\"The only difference between the two case s is that the EC antidumping regulations\nenvisaged that, if the undertakings were breached or withdrawn, the EC Commission\ncould (but was not obliged to) re-institute proceedings and eventually impose anti-\ncircumvention duties.717 The MVTO does not envisage expressly the possibility to\nimpose sanctions. That does not mean, however, that the Letters are unenforceable.\nGiven the linkage between the conclusion of the Auto Pact and the submission of the\nLetters established by the Canadian Government, there has always been a tacit\nunderstanding between the parties that if the beneficiaries failed to comply with the\nLetters, the Canadian Government would withdraw the tariff benefits.\"\n(m) Question 53 (the Letters)\nThe EC argues that, because of the link between th e submission of the Letters of Undertaking and the\nconclusion of the Auto Pact, \"the beneficiaries have assumed that, were they to disregard the\ncommitments contained in the Letters, the Ca nadian Government would withdraw the Tariff\nExemption. The Canadian Government could do so simply by repealing or amending the MVTO\n1998. There is nothing, either in the MVTO 1998, or in any other provision of Canadian law, that\ncould prevent the Canadian Government from taking that action.\"\n• Could the EC further explain the factual basis for its contention that the beneficiaries have\nassumed that non-compliance with the commitments in the Letters of Undertaking would result in\nwithdrawal of the tariff exemption?\n\n715 Panel Report on Canada – FIRA , supra note 126.\n716 Panel Report on EEC – Parts and Components, supra note 127.\n717 Panel Report on EEC – Parts and Components, supra note 127, para. 5.20.\n\n(i) Reply from the European Communities\n7.184 As shown by the European Communities, the Letters of Undertaking were negotiated by the\nbeneficiaries and Canada's Ministry of Industry in parallel with the negotiation of the Auto Pact, and\nsubmitted only a few days before the conclusion of the Auto Pact.\n7.185 Furthermore, chief executives of the US Big Three, as well as the US officials who negotiated\nthe Auto Pact, testified before the US Congress that the Canadian Government made of the\nsubmission of the Letters of Undertaking a necessary condition for the conclusion of the Auto Pact\nand, indeed, regarded the Letters as being an \"important part\" of the Auto Pact..\n7.186 The European Communities has also shown that , for their part, the Big Three gave the\nundertakings contained in the Letters subject to the condition that the Canadian Government would\nsign the Auto Pact and adopt the necessary implementing regulations.\n7.187 Thus, although the Letters are formally unilateral acts of the beneficiaries, they embody an\nagreement between the beneficiaries and the Canadi an Government involving mutual obligations for\nboth parties. Even in the absence of any express provision to that effect, it is implicit in any\nagreement involving mutual obligations that if one of the parties fails to fulfil its obligations, the other\nparty is released from complying with its own obligations.\n718 In view of that, the beneficiaries could\nbut assume that, if they did not comply with thei r part of the agreement, the Canadian Government\ncould legitimately reciprocate by withdrawing the tariff benefits.\n• What are the views of the EC on the argument t hat to argue that the Letters are enforceable\nbecause nothing in Canadian law prevents Canada from repealing or ame nding the MVTO is a\nfundamental misstatement of WTO law because WTO agreements apply to actions that Members\nhave taken and not to actions that Members could take?\n(ii) Reply from the EC\n7.188 Canada's argument mischaracterize the EC position. The European Communities has not\nargued that the Letters are \"enforceable\" simply because \"nothing in Canadian law prevents Canada\nfrom repealing or amending the MVTO\". The EC's position is that the Letters of Undertaking are\n\"enforceable\" because the granting of the Tariff Exemption was conditional upon the submission of\nthe Letters and the Canadian Government has the necessary authority to withdraw the Tariff\nExemption, should the beneficiaries fail to comply with the terms of the Letters. The European\nCommunities made the argument mentioned by the Panel in response to a previous argument raised\nby Canada to the effect that the European Communities \"has provided no legal basis under which\nCanada could withdraw benefits for a failure to meet the commitments under the Letters\".\n7.189 In any event, the measures in dispute in this case are not the sanctions that Canada could\nimpose in case of violation of the Letters of Undertaking, but rather the Letters themselves, which are\nan action \"taken\" by the Canadian Government already in 1965. The possibility to withdraw the\nTariff Exemption has been cited by the European Communities only as a further indication that the\nLetters are \"requirements\".\n7.190 Finally, it must be recalled that, as confirmed by Japan – Film , the WTO Agreements may\napply where the Government has not even the possibility to impose a sanction in the event of lack of\ncompliance, such as for example in the case of a simple statement of government policy. A fortiori,\n\n718 In the law of contracts, this basic notion is reflected in the so-called exceptio non adimpleti\ncontractus, an exception to the effect that the plaintiff is not entitled to sue unless it has performed its own part\nof a contract. The same principle finds expression in Article 60 of the Vienna Convention on the Law of\nTreaties, of 23 May 1969.\n\nthe WTO Agreement may apply also in cases where the Government can impose a sanction, even if is\nnot mandatorily required to do so. Indeed, as mentioned above in response to question 51, EC – Parts\nand Components concerned precisely that type of situation.\n3. Questions and replies relating to claims under the TRIMS Agreement\n(a) Question 13 (the ratio requirements)\nThe EC argues that the ratio requirement is inconsistent with GATT Article III:4 because the\nmaximum limit on the total sales value in practice operates \"so as to restrict exclusively the sales of\nimported motor vehicles\". In this connection, the EC further states that \"the ratio requirements have\nthe consequence that the beneficiaries cannot, withou t losing the entitlement to the Tariff Exemption,\nsell in Canada any imported motor vehicles in excess of a certain amount that is directly related to\nthe sales value of their domestic production of motor vehicles\".\nThe EC also argues that the ratio requirement is inconsistent with Article 2.1 of the TRIMs Agreement\nbecause it falls within the scope of Item 1(b) of the Illustrative List. The EC explains this view by\nstating that \"under the ratio requirements the amoun t of imported motor vehicles that a beneficiary\nmay sell in Canada (and, therefore, that it may be in terested in 'purchasing') varies according to the\nvalue of the motor vehicles which it exports\".\n• Is the EC's argument regarding the inconsistency of the ratio requirement with Article III:4 of the\nGATT identical to its argument on the inconsistency of that requirement with Item 1(b) of the\nIllustrative List annexed to the TRIMs Agreement?\n(i) Reply from the European Communities\n7.191 No. They are similar but not identical. The European Communities claims that the ratio\nrequirements violate Article III:4 because they place a quantitative limit on the sales of motor vehicles\nimported under the Tariff Exemption. Whether or not that limit is linked to the volume of exports is\nirrelevant in order to establish a violation of Article III:4. For that, it is sufficient to show that sales of\nimported goods are limited, while sales of like domestic goods are not.\n7.192 On the other hand, the EC’s claim under Item 1 (b) of the Illustrative List is that the ratio\nrequirements place a limit on the sale of imported vehicles which is \"related\" to the amount of\nvehicles exported by each beneficiary. Thus, this claim involves an additional element, which is not\nrequired in order to establish a violation of Article III:4, namely that the limitation on internal sales be\nrelated to the value of exports.\n• With regard to the EC's argument concerning Item 1(b) of the TRIMs Illustrative List, could\nthe EC further explain its view that the ratio requirement limits \"an enterprise's purchases or use\nof imported products to an amount related to the volume or value of local products that it\nexports\"?\n(ii) Reply from the European Communities\n7.193 The ratio requirements do not limit expressly the \"purchase\" or \"use\" of imported goods but\ntheir internal \"sale\". Nevertheless, it seems obvious that by limiting the \"sales\" of imported goods,\nthe ratio requirements limit necessarily their \"purch ase\". In any event, it must be recalled that the\nIllustrative List of prohibited TRIMs is not an exhaustive one. Even if Item 1 (b) did not cover\nmeasures that restrict the \"sale\" of imported goods, it would be necessary to conclude by analogy that\na measure that limits the sale of imported goods to an amount related to the value of exports of the\n\ncompany concerned is also a TRIM inconsistent with GATT Article III:4 and, therefore, prohibited by\nArticle 2.1 of the TRIMs Agreement.\n• In light of the reference made by the EC in its arguments on Item 1(b) of the TRIMs Illustrative\nList to its analysis of the inconsistency of the ratio requirement with Article 3.1(a) of the SCM\nAgreement, does the EC consider that the ratio requirement is inconsistent with Item 1(b) of the\nTRIMs Agreement and with Article 3.1(a) of the SCM Agreement for the same reason, i.e. because\nit makes the duty-free treatment legally contingent upon export performance ? Could the EC in\nthis regard further explain its view of the relationship between Item 1(b) of the Illustrative List of\nthe TRIMs Agreement, on the one hand, and Article 3.1(a) of the SCM Agreement, on the other?\n(iii) Reply from the European Communities\n7.194 No. The same facts give raise to two violations, but the \"reason\" for each violation is\ndifferent. The European Communities claims that the ratio requirements fall within Item 1(b) because\nthey limit the internal sale of vehicles imported under the Tariff Exemption to an amount \"related\" to\nthe value of exports. Whether or not the Tariff Exemption is a \"subsidy\" in the meaning of Article 1\nof the SCM Agreement, and whether it is \"contingent upon export performance\" in the sense of\nArticle 3.1(a) of the SCM Agreement are not pertinent considerations in deciding that claim.\n7.195 In turn, the European Communities considers that the Tariff Exemption constitute a \"subsidy\"\nprohibited by Article 3.1(a) of the SCM Agreement, because the ratio requirements attached thereto\nmake it \"contingent upon export performance\". The success of that claim does not depend on whether\nthe ratio requirements limit the sale of imported vehicles in violation of Article III:4 and Item 1(b) of\nthe Illustrative List.\n7.196 The relationship between the TRIMs Agreement and the SCM Agreement has been discussed\nin detail in the Panel Report on Indonesia – Automobiles.\n719 That report concluded, amongst other\nthings, that:\n\"… the SCM and TRIMs Agreement cannot be in conflict, as they cover different\nsubject matters and do not impose mutually exclusive obligations. The TRIMs\nAgreement and the SCM Agreement may have overlapping coverage in that they may\nboth apply to a single legislative measure, but they have different foci, and they\nimpose different types of obligations.\"\n720\n7.197 The European Communities agrees with that analysis.\n(b) Question 16 (meaning of \"require\" in Chapeau of TRIMs Illustrative List)\nCanada states that the text of the TRIMs Agreement \"is explicit in stating that a prohibited TRIM must\n'require' the purchase or use of domestic products.\" Could Canada further elaborate on its views on\nthe meaning of the word \"require\" in the Chapeau of the Illustrative List of the TRIMs Agreement\nespecially in light of the statement that \"TRIMs which are inconsistent with Article III:4 of GATT\n1994 include those …compliance with which is necessary to obtain an advantage, and which\nrequire…\"\n(i) Reply from Canada\n7.198 The Chapeau to paragraph 1 of the Illustrative List refers to \"TRIMs that are inconsistent with\nthe obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994.\" It\n\n719 Panel Report on Indonesia – Autos, supra note 270, paras. 14.47-14.55.\n720 Ibid., para. 14.52.\n\ntherefore deals only with measures that have already been found to be TRIMs, and sets out a two-step\ntest to determine whether they are covered by the List.\n7.199 First, the measure must be either mandatory or enforceable under domestic law or under\nadministrative rulings, or such that compliance with it is necessary to obtain an advantage. Second,\nthe alleged measure must require one of the actions set out in sub-paragraphs (a) and (b).\n7.200 The first part of the test in the Chapeau goes to whether the alleged prohibited TRIM is a\nbinding measure. If the answer to this questi on is \"no\", then the TRIM is not covered by the\nIllustrative List. If the answer is \"yes\", then it must be determined whether the binding is of the type\nlisted in sub-paragraphs (a) or (b).\n7.201 The CVA requirements contained in the MVTO and SROs are binding measures within the\nmeaning of the Chapeau. They are mandatory and enforceable. However, these requirements are not\ncovered by the second part of the test in the Chapeau because they do not \"require\" the actions listed\nin sub-paragraphs (a) and (b). They do not (a) \"require\" the purchase or use of domestic products, and\nthey do not (b) \"require\" that purchase or use of imported products be limited to an amount related to\nthe volume or value of domestic products exported. They are not included in the examples of\nprohibited TRIMs.\n7.202 The additional CVA amounts found in the letters do not fall within the scope of Article III:4,\nand are not covered by the first part of the test in the Chapeau, because they are neither mandatory nor\nenforceable, and they need not be complied with in order to obtain an advantage.\n(c) Question 46 (the ratio requirements)\nThe EC states that \"the ratio requirements have the consequences that the beneficiaries cannot,\nwithout losing the entitlement to the Tariff Exem ption, sell in Canada any imported motor vehicles in\nexcess of a certain amount that is directly related to the sales value of their domestic production of\nmotor vehicles.\"\nIn its response to Panel Question 13, the EC observes that \"the ratio requirements violate Article III:4\nbecause they place a quantitative limit on the sales of motor vehicles imported under the Tariff\nExemption.\"\nThe EC argues that \"the ratio requirements are internal measures subject to Article III, and not to\nArticle XI, because they do not affect the right to import motor vehicles, but the right to sell them in\nCanada.\"\nCould the EC further explain whethe r its argument is that the ratio requirements restrict the internal\nsale in Canada of any imported motor vehicles or t hat they restrict the internal sale in Canada of\nthose motor vehicles that are imported duty-free?\n(i) Reply from the EC\n7.203 The European Communities claims that the ratio requirements limit the sale in Canada of\nmotor vehicles imported under the Tariff Exemption.\n\n4. Questions and replies relating to claims under the SCM Agreement\n(a) Question 13, in part (the ratio requirements)\nIn light of the reference made by the EC in its arguments on Item 1(b) of the TRIMs Illustrative List to\nits analysis of the inconsistency of the ratio requirement with Article 3.1(a) of the SCM Agreement,\ndoes the EC consider that the ratio requirement is inconsistent with Item 1(b) of the TRIMs\nAgreement and with Article 3.1(a) of the SCM Agreement for the same reason, i.e. because it makes\nthe duty-free treatment legally contingent upon export performance ? Could the EC in this regard\nfurther explain its view of the relationship between Item 1(b) of the Illustrative List of the TRIMs\nAgreement, on the one hand, and Article 3.1(a) of the SCM Agreement, on the other?\n(i) Reply from the European Communities\n7.204 No. The same facts give raise to two violations, but the \"reason\" for each violation is\ndifferent. The European Communities claims that the ratio requirements fall within Item 1(b) because\nthey limit the internal sale of vehicles imported under the Tariff Exemption to an amount \"related\" to\nthe value of exports. Whether or not the Tariff Exemption is a \"subsidy\" in the meaning of Article 1\nof the SCM Agreement, and whether it is \"contingent upon export performance\" in the sense of\nArticle 3.1(a) of the SCM Agreement are not pertinent considerations in deciding that claim.\n7.205 In turn, the European Communities considers that the Tariff Exemption constitute a \"subsidy\"\nprohibited by Article 3.1(a) of the SCM Agreement, because the ratio requirements attached thereto\nmake it \"contingent upon export performance\". The success of that claim does not depend on whether\nthe ratio requirements limit the sale of imported vehicles in violation of Article III:4 and Item 1(b) of\nthe Illustrative List.\n7.206 The relationship between the TRIMs Agreement and the SCM Agreement has been discussed\nin detail in the Panel Report on Indonesia – Autos .\n721 That report concluded, amongst other things,\nthat:\n\"… the SCM and TRIMs Agreement cannot be in conflict, as they cover different\nsubject matters and do not impose mutually exclusive obligations. The TRIMs\nAgreement and the SCM Agreement may have overlapping coverage in that they may\nboth apply to a single legislative measure, but they have different foci, and they\nimpose different types of obligations.\"722\n7.207 The European Communities agrees with that analysis.\n(b) Question 19 (\"mere possibility\" and contingency)\nThe EC states: \"The mere possibility that in some cases a beneficiary may be required to use domestic\ngoods instead of imported goods in order to qualify for the subsidy is sufficient to trigger the\napplication of Article 3.1(b)\". Could the EC please elaborate on this statement in light of the drafters'\nuse of the term \"contingent\" in Article 3.1(b). Fu rther, could the EC also elaborate on the relevance\nof GATT Article III:8(b), which reads: \"The provisions of this Article shall not prevent the payment of\nsubsidies exclusively to domestic producers ... \", in particular, with regard to whether a value-added\ntest as a criterion for determining who falls with in the class of \"domestic producers\" would be in\nviolation of SCM Article 3.1(b).\n\n721 Panel Report on Indonesia – Autos, supra note 270, paras. 14.47-14.55.\n722 Ibid., para. 14.52.\n\n(i) Reply from the European Communities\n7.208 For the reasons already explained, the European Communities is of the view that\nArticle 3.1(b) of the SCM Agreement does not prohibit only those conditions that require the actual\nuse of domestic goods by the beneficiary. It prohibits any condition that gives preference to the use of\ndomestic over imported goods, whether or not that condition results in all cases in the actual use of\ndomestic goods by the beneficiaries.\n7.209 In other words, Article 3.1(b) prohibits any subsidy that is \"contingent\" upon a condition that\nfavours the use of domestic over imported goods, and not merely those subsidies that are \"contingent\"\nupon the actual use of domestic goods. In the case at hand, the subsidy is \"contingent\" in law upon a\nvalue added requirement that gives preference to the use of domestic over imported goods.\nConsequently, the subsidy is \"contingent upon the use of domestic over imported goods\" in the\nmeaning of Article 3.1(b).\n7.210 In any event, assuming arguendo that \"contingent upon the use of domestic over imported\ngoods\" meant contingent upon the actual use of domestic goods, Article 3.1(b) does not require that\nthat condition be a necessary one. In fact, Article 3.1(b) prohibits the granting of subsidies that are\ncontingent upon the use of domestic over imported goods, \"whether solely or as one of several\nconditions\".\n7.211 This may cover the situation where a subsidy is simultaneously subject to two or more\ncumulative conditions. But it may as well apply to the situation where a subsidy is subject two or\nmore alternative conditions, so that compliance with any of them gives a right to the subsidy. If one\nof those conditions is \"the use of domestic over imported goods\" the subsidy must be deemed\nprohibited by Article 3.1(b), even if it is also possible to qualify for the subsidy by complying with\nother alternative non-prohibited conditions, such as using domestic labour or domestic services.\n7.212 Finally, although for the reasons above mentioned, the European Communities considers that\nthe CVA requirements are contingent \"in law\" upon the use of domestic over imported goods, it has\nalso submitted in the alternative that the CVA requirements make the subsidy contingent \"in fact\"\nupon the use of domestic over imported goods.\n7.213 Regarding the relevance of GATT Article III:8(b), and, in particular, with regard to whether a\nvalue-added test as a criterion for determining who falls within the class of \"domestic producers\"\nwould be in violation of SCM Article 3.1(b): The Tariff Exemption is not a subsidy \"paid\" to\ndomestic producers in the meaning of GATT Article III:8(b). As confirmed by the Appellate Body in\nCanada – Periodicals, Article III:8 (b) exempts from the obligations of Article III only the payment\nof subsidies involving the expenditure of revenue by the government.\n723 Thus, for example, tax\nexemptions724 or reductions in transportation or postal rates 725 have been found not to be covered by\nArticle III:8(b). For the same reason, a subsidy in the form of a tariff exemption is not exempted by\nthat provision either.726\n7.214 Furthermore, assuming arguendo that Article III:8(b) applied to subsidies in the form of tariff\nexemptions, the terms of Article III:8(b) only exempt the \"payment\" of the subsidy. The exemption\n\n723 Appellate Body Report on Canada – Periodicals, supra note 280, p.34.\n724 See the Panel Reports on US – Malt Beverages, supra note 427, para. 5.10; and Panel Report on\nIndonesia – Autos, supra note 270, paras. 14.41-14.46.\n725 Appellate Body Report on Canada – Periodicals, supra note 280, pp. 32-35.\n726 In the Panel Report on Indonesia – Autos, supra note 270, paras. 14.83-14.92, the granting of tariff\nbenefits contingent upon compliance with certain local content requirements was found to be inconsistent with\nGATT Article III:4 and prohibited by Article 2.1 of the TRIMs Agreement.\n\ndoes not extend to any conditions attached to the subsidy, such as local content or value added\nrequirements727, which have discriminatory effects additional to those of the subsidy itself.\n7.215 The application of a value added requirement is not necessary for determining who is a\n\"domestic producer\". Moreover, if that justification was accepted, Panels would have to ascertain in\neach case what level of domestic value added is sufficient to confer the status of \"domestic producer\".\nIn fact, if that determination was left to each Member’s discretion, the prohibition on local content\nrequirements would become dead letter. Members could easily circumvent that prohibition simply by\nsetting the level of domestic value added at a level such that it requires necessarily the use of domestic\ngoods. Yet, the incompatibility with GATT Artic le III:4 of local content requirements, including\nthose compliance with which is necessary to obtain an advantage, is now well established by\nprecedent and has been confirmed beyond any possible doubt in Item 1(a) of the Illustrative List of\nprohibited TRIMs. Canada itself has conceded that the granting of subsidies contingent upon a local\ncontent requirement is inconsistent with GATT Article III:4.\n7.216 Finally, since the Panel has raised this question under the heading of \"The SCM Agreement\",\nthe European Communities would like to recall that, by its own terms, Article III:8(b) of GATT only\nprovides an exemption from the obligations contained in the other paragraphs of GATT Article III. It\ndoes not provide an exception with respect to the prohibition of subsidies contingent upon the use of\ndomestic over imported goods contained in Article 3.1(b) of the SCM Agreement. To the extent that\nthere was a conflict between GATT Article III:8(b) and Article 3.1(b) of the SCM Agreement, the\nlatter would prevail in accordance with the General Interpretative Note to Annex 1 A.\n(c) Question 20 (\"duties borne\" and inputs)\nThe EC remarks: \"Duties 'borne' by an exported product means duties on inputs that are consumed in\nthe production of that product\". Please explain the legal basis for your view.\n(i) Reply from the European Communities\n7.217 The remark by the European Communities quoted in the Panel’s question refers to Footnote 1\nof the SCM Agreement. That Footnote is introduced by the clause: \"In accordance with the …\nprovisions of Annexes I through III of this Agreement\". That clause limits the scope of the exception\nto the definition of \"subsidy\" in Article 1 provided for in Footnote 1 with respect to the remission of\nimport duties to the two situations described in Item (i) of Annex I, as further interpreted in Annexes\nII and III, i.e.: (i) when imported inputs are used in the manufacture of the exported products; and (ii)\nwhen domestic inputs having the same quality and characteristics are substituted for imported inputs\nin the production of exported products. Item (i) makes it clear that in both cases the inputs must be\n\"consumed\" in the production of the exported products.\n(d) Question 21 (the ratio requirements)\nJapan states: \"Actually, the MVTO and SROs by virtue of the ratio requirement provide the legal\nmechanism where the subsidy is contingent upon export performance. The fact that this mechanism is\nbest understood if explained in the context of a mathematical formula does not diminish its legal\neffect\". Is Japan arguing that the duty waiver is export-contingent in law? Please elaborate.\n\n727 According to the Panel Report on Indonesia – Autos, supra note 270, \"… the purpose of Article III:8\n(b) is to confirm that subsidies to producers do not violate Article III, so long as they do not have any\ncomponent that introduces discrimination between imported and domestic products…\" (para. 14.43) \"… Article\nIII:8 (b) of GATT does not constitute a defence to any measure providing discrimination between domestic and\nimported products, including local content requirements\" (footnote 686).\n\n(i) Reply from Japan\n7.218 It is the position of the Government of Japan that the production-to-sales ratio is in law export\ncontingent. The formula expressing such terms of the ratio as stipulated in applicable Canadian law\n(i.e. the MVTO 1998 and the SROs) demonstrates clearly that it makes the Duty Waiver contingent\non export performance.\n(e) Question 22 (the measures at issue and production-based subsidies)\nCanada states: \"Yet production-based subsidies are not violations of GATT Article III\". Could\nCanada further elaborate on this point and on the possible relevance of GATT Article III:8(b).\n(i) Reply from Canada\n7.219 Canada’s statement that production-based subs idies are not violations of GATT Article III\nwas a reference to the fact that such subsidies are actionable, not prohibited, under the SCM\nAgreement.\n7.220 Canada’s statement was made to refute what appears to be Japan’s contention that the\nproduction-to-sales ratios are inconsistent with Article III:4 of the GATT because they serve to\nincrease domestic production and therefore competition against imported vehicles. In its argument,\nCanada noted that Japan’s underlying assumption was incorrect – the ratios do not increase domestic\nproduction beyond what would otherwise be achieved, as demonstrated by the fact that all of the\nautomobile manufacturers produce vehicles far in excess of what the ratios require.\n7.221 However, even if Japan’s assumption were correct, it would be wrong at law to conclude that\nan increase in domestic production as a result of the ratios was inconsistent with Article III:4 of the\nGATT. This is because this argument would read Section III of the SCM Agreement out of existence.\nFurthermore, Article III:8(b) of the GATT explicit ly recognizes that production-based subsidies to\ndomestic producers, which inherently increase domestic production, are not subject to Article III of\nthe GATT.\n728 By Japan’s argument, any subsidy that increases domestic production would be a\nviolation of Article III of the GATT. This would read out of existence both Article III:8 of the GATT\nand Part III of the SCM Agreement which makes production-based subsidies actionable rather than\nprohibited.\n7.222 The receipt of duty-free treatment contingent on achieving certain production-to-sales ratios\nmay not be a subsidy at all, by analogy with the exemptions in the SCM Agreement and in particular,\nfootnote 1 to the SCM Agreement. In the alternative, if the Panel finds that it is a subsidy, it is a\nsubsidy maintained on imports: it is imported vehicles that are exempted from Canada’s 6.1 percent\nMFN duty.\n7.223 In the further alternative, it is a production-based subsidy, by virtue of the requirement to\nachieve production-to-sales ratios in order to qualify for duty-free treatment (although benefits are not\nlinked to production in the sense that production beyond the ratio does not increase benefits). It is not\na subsidy contingent upon either export performance or the use of domestic over imported goods\nbecause of the absence of either sort of contingency.\n(f) Question 23 (subsidies and import facilitation)\nCanada states: \"... that the duty-free treatment und er the MVTO and the SROs amounts to a subsidy\ncontingent upon exportation … is an odd allegation, because duty-free treatment is granted to\n\n728 See Panel Report on United States – Measures Affecting the Importation, Internal Sale and Use of\nTobacco, adopted 4 October 1994, BISD 41S/131, paras. 109, 111.\n\nimports\". The EC responds: \"In any event, whether or not the tariff exemption \"facilitates\" imports is\nirrelevant. The SCM Agreement does not provide any exception for export subsidies with 'import\nfacilitating' effects.\" How would Canada rebut the EC's response?\n(i) Reply from Canada\n7.224 Canada is not suggesting that the SCM Agreement provides an exception for export subsidies\nwith \"import facilitating effects\". Canada maintains that the duty-free treatment is not an export\nsubsidy at all.\n7.225 The Appellate Body has stated that a proper interpretation of a provision of an agreement\nmust be made on the basis of a careful examination of the text, context and object and purpose of that\nprovision.729 This is what Canada has proposed for Article 3.1(a) of the SCM Agreement.\n7.226 The Appellate Body has also found that illustrative lists, although not exhaustive, \"exemplify\nthe kinds of programmes\" covered by a provision. 730 This is precisely why Canada has relied on the\nIllustrative List of Export Subsidies in Annex I to the SCM Agreement. Canada’s measures are not\neven remotely like those on the Illustrative List. The European Communities concedes this, but\ndescribes it as \"irrelevant\", because the Illustrative List is not exhaustive. On the contrary, as the\nAppellate Body has found, it is highly relevant.\n(g) Question 24 (the Letters and CVA figures)\nWithout prejudice to whether the Letters of Un dertaking constitute \"requirements\" under GATT\nArticle III:4, could Canada please respond to the EC arguments in this regard, including the figures\nrelating to CVA levels.\n(i) Reply from Canada\n7.227 The letters do not constitute \"requirements\". Even if they did, it is incorrect to assume that\nsome beneficiaries \"cannot possibly\" meet their CVA requirements without using some domestic\nparts and materials. The EC’s suggestion that \"parts and materials may account on average for as\nmuch as 80 per cent of the cost of sales of motor vehicles assembled in Canada\" is belied by Japan’s\nExhibit JPN-43-3 (which Canada understands was not withdrawn, unlike the Japanese language\nexhibits JPN-43 and JPN-43-2). JPN-43-3 demonstr ates that the cost of parts and materials as a\npercentage of cost of sales can vary widely. For Honda, it was 54 per cent in both 1996 and 1997.\nFor Toyota, it was 69 per cent in 1996 and 63 per cent in 1997. It is unclear from the exhibit whether\nthese statistics include Honda and Toyota’s manufacturing facilities in Canada.\n(h) Question 25 (the CVA requirements and export performance)\nCould Canada please respond to the EC argument that \"... the CVA requirements would be operating\nas an export performance condition\".\n(i) Reply from Canada\n7.228 The EC’s argument again depends on the incorrect premise that the letters are requirements.\nMoreover, the argument, like the EC’s \"mere possibility\" argument, stretches the definition of\n\"contingent upon\" well past what it can reasonably bear. The argument appears to be that in some\ncases, manufacturers would export vehicles, in order to meet their CVA requirements, in order to\nqualify for the right not to pay duty on other vehicles that they would then import from Europe or\n\n729 Appellate Body Report on US – Gasoline, supra note 487, p. 17.\n730 Appellate Body Report on Canada – Periodicals, supra note 280, pp. 33-34.\n\nJapan (and that according to the EC’s GATT Article III arguments, they could then not sell). Even if\nsuch treatment constitutes a subsidy, receipt of such treatment is not, de jure or de facto, conditional\nupon, dependent upon or tied to the export of vehicles. Manufacturers may achieve their CVA\nrequirements by any means they choose.\n(i) Question 26 (contingency – \"in law\" and \"in fact\" vs. \"express\" and \"implicit\")\nThe EC states: \"Article 3.1(a) draws a distincti on between contingency 'in law' and contingency 'in\nfact', and not between 'express' and 'implicit' contingency\". Could Canada please respond to this\ncomment.\n(i) Reply from Canada\n7.229 The European Communities has cited no authority for its assertion and has offered no\nexplanation of what it considers to be the difference between implicit contingency and contingency in\nfact. It is a generally accepted principle that laws must be explicit, not implicit. Accordingly, under\nArticle 3.1(a), a subsidy is contingent in law upon export performance where the underlying legal\ninstruments of that subsidy expressly provide that the subsidy is available to enterprises only on the\ncondition that they export or undertake to develop exports. A subsidy is contingent in fact upon\nexport performance where there is no express requirement to export, but the facts and circumstances\nare such that there is an implicit requirement to export (or to undertake export development) for it to\nbenefit from a subsidy.\n(j) Question 54 (the CVA requirements and exportation)\nThe EC states: \"Thus, in definitive, the CVA requirements make the tariff exemption 'contingent'\neither upon the use of domestic over imported goods, contrary to the prohibition of Article 3.1(b);\nand/or, as the sole alternative, upon export performance, in violation of the prohibition contained in\nArticle 3.1(a)\". If, as the EC observes, \" … the relevant CVA amount includes not only the CVA\ncontained in the motor vehicles sold domestically but also the CVA of any exported motor vehicles\n(and in some cases of exported original equipmen t parts)\" (Emphasis added), could the EC explain\nwhy a manufacturer not using any domestic goods would need to export in order to meet the CVA\nrequirements.\n(i) Reply from the European Communities\n7.230 The CVA requirements contained in the Letters of Undertaking and in the SROs stipulate that\nthe total CVA contained in the motor vehicles sold in Canada or exported (and in some cases also in\nthe OEM parts) must represent a certain percentage of the cost of sales of the motor vehicles sold in\nCanada, i.e. not including the cost of sales of the vehicles produced in Canada and exported, but\nincluding the cost of sales of any imported vehicles sold in Canada.\n7.231 Thus, if a beneficiary exports some motor vehicles (or OEM parts) the denominator of the\nfraction (i.e. the cost of sales in Canada) is less than if those vehicles are sold in Canada. On the other\nhand, the numerator (i.e. the CVA amount) remains the same, irrespective of whether the vehicles are\nexported or sold in Canada.\n7.232 As shown by the European Communities, the cost of parts and materials a accounts, on\naverage, for 80 per cent of the cost of sales of the motor vehicles produced in Canada, while labour\nand other manufacturing overheads account for the remaining 20 per cent. This means that a\nbeneficiary which does not export any motor vehicles or parts will not be able to meet the CVA\nrequirements in the Letters or in the SROs (from 40 per cent to 60 per cent of the cost of sales in\nCanada), unless it uses a substantial amount of domestic parts and materials (at least 20 per cent to\n40 per cent of the cost of sales).\n\n7.233 The only conceivable way in which a beneficiary could meet the CVA requirements in the\nLetters and the SROs without using any domestic parts or materials at all is by exporting, so that the\nnon-parts CVA contained in the exported cars can be added to the non-parts CVA of the vehicles sold\nin Canada.\n7.234 The above may be illustrated by means of the following example. Assume that a beneficiary\nsubject to a 40 per cent CVA requirement produces in Canada 1,000 vehicles with a cost of sales of\n10,000 $ each. Assume further that: 1) parts and materials account for 80 per cent of their cost of\nsales, i.e. 8,000 $ per unit; 2) the vehicles contain no domestic parts and materials at all; and\n3) labour and all the other costs included in the cost of sales, with a total value of 2,000 $ per unit, are\nexclusively of Canadian origin. If the beneficiary sold all the vehicles in Canada, the ratio CVA to\ncost of sales in Canada would be 20 per cent (1,000 units X 2,000 $ / 1,000 units X 10,000 $). On the\nother hand, if the beneficiary exported 500 units, the ratio CVA to cost of sales in Canada would be\n40 per cent (1,000 units X 2,000 $ / 500 units X 10,000 $).\n7.235 For the sake of simplicity, the above example does not take into account the cost of sales in\nCanada of imported vehicles. Nevertheless, as explained above, the cost of those sales increases the\ndenominator, which means that in the above example the beneficiary would have to export even a\nlarger share of its domestic production in order to meet the CVA requirements without using any\nCanadian parts or materials.\n(k) Question 55 (paragraphs (g), (h), and (i) of the SCM Illustrative List and the measures\nat issue)\nCanada states: \"It is contextually significant that duty or tax exemption or remission programmes,\nsuch as those described in paragraphs (g), (h), and (i) of the Illustrative List, are deemed not to\nconstitute export subsidies when they are not excessive.\" Could Canada please elaborate on how, in\nCanada's view, paragraphs (g), (h), and (i) of the Illustrative List should inform the Panel's\ndetermination of whether the Canadian duty-free trea tment is an export subsidy. Is Canada arguing\nthat, even if the import duty exemption were in excess of 6.1%, it would only be an export subsidy if it\nwas linked directly to exported goods?\n(i) Reply from Canada\n7.236 Canada is not claiming that the duty exemption in this case is identical to those listed in items\n(g), (h) and (i) of the Illustrative List. Rather, Canada's point is that those three items consider a tax\nor duty rebate to be actionable only if it is excessive. An excessive duty rebate would be, in practical\nterms, no different from a legal duty exemption coupled with a cash subsidy. Whether such a subsidy\nwas an export subsidy would depend on whether it was contingent upon export performance.\nHowever, in item (i) of the Illustrative List, a non-excessive duty exemption was specifically\nconsidered not to be an export subsidy even in the case of blatant export contingency. That context\nsupports Canada's position that the duty waiver in this case is neither a subsidy nor an export subsidy.\n(l) Question 61 (implementation time-period)\nArticle 4.7 of the Agreement on Subsidies and Countervailing Measures states:\nIf the measure in question is found to be a prohibited subsidy, the panel shall recommend that\nthe subsidizing Member withdraw the subsidy without delay. In this regard, the panel shall\nspecify in its recommendation the time-period within which the measure must be withdrawn.\nIn the event that the Panel were to find the exis tence of a prohibited subsidy, what would Canada\nconsider to be an appropriate time-period for impl ementation, given the use of the phrase “without\ndelay” in Article 4.7?\n\n(i) Canada's reply\n7.237 It is difficult to respond to this hypothetical question, given that Canada does not agree that\nthe duty-free treatment in this case is a subsidy. Nevertheless, assuming for the purposes of this\nquestion that the Panel would find the existence of a prohibited subsidy, Canada submits that “without\ndelay” should be interpreted in a manner that would allow Canada a reasonable opportunity to\nimplement the Panel’s findings.\n7.238 The rationale for creating an expedited dispute settlement process in Article 4 of the SCM\nAgreement is that prohibited subsidies are assumed to have trade-distorting effects harmful to the\ninterests of other Members. Thus, while the existen ce of such effects is not relevant to determining\nwhether a “subsidy” is prohibited, their presence or absence should be taken into account in\ndetermining the appropriate time period to be accorded under Article 4.7 in any particular case.\n7.239 The measures in this case have no prejudicial or trade-distorting effects. Moreover, there is\nno demonstrable urgency in dealing with measures th at have been in place for thirty-five years, the\nonly effect of which is to increase imports from countries other than the United States and Mexico –\nprincipally the European Communities and Japan.\n7.240 The Canadian measures clearly have no trade distorting effects in any export market, and their\nstructure makes it unlikely that this will ever change. The alleged subsidy is a grant of duty-free\ntreatment in direct proportion to imports, and the formulas for the CVA and the production-to-sales\nratios are such that both exports and domestic purchases could be reduced without any loss in duty-\nremission benefit.\n7.241 Empirical evidence confirms this. Canadian exports of vehicles to the European\nCommunities and Japan are negligible; the alleged subsidy therefore cannot be causing any distortions\nin those markets. Canadian exports to the United States are attributable to the US duty waiver, and to\nproximity, not to any alleged subsidy, as explained in paragraphs 97-98 of Canada’s first written\nsubmission.\n7.242 Canada also draws the Panel’s attention to the arguments it made in paragraphs 21 and 22 of\nits first written submission. This case is not about a single discrete measure – what Japan has called\nthe “Duty Waiver” and the European Communities “the Tariff Exemption”. Canada’s implementation\nof the Auto Pact involves complex measures; indeed, the complaining parties have purported to\nchallenge a wide variety of matters, not all of which can even be characterized as “measures”. Japan,\nfor example, has cited the MVTO 1998, the SROs, the Customs Tariff, the Financial Administration\nAct, the letters of undertaking, departmental memoranda, and unidentified “implementing measures”.\n(Japan’s first written submission, para. 16.) Irrespective of the status of these so-called measures, the\nduty-free treatment cannot be withdrawn without affecting every aspect of Canada’s regime.\n7.243 For Canada, implementing changes to measures of such long duration will involve\nconsultations with provinces and stakeholders, the requisite changes to legislation, and the design of\nreplacement measures. For the manufacturers, it will involve a change in years of business practice,\nwhich cannot be accomplished quickly.\n7.244 Finally, Canada notes that the measures have been in existence for decades, and that the\ncomplaining parties themselves have not made any suggestion during these proceedings that there is\nan urgent need for action. Should such a claim be made at this late stage of the proceedings, it should\nbe rejected.\n7.245 Having regard to the foregoing, “without delay” should not require Canada to make any\nadjustments until 12 months after the adoption of the Panel’s recommendations and rulings.\n\n(ii) Comment from Japan on Canada’s Reply\n7.246 With respect to the determination of an appropriate time-period for implementation, there is a\nsignificant difference between the relevant rules and procedures of the DSU and the special and\nadditional rules and procedures set forth in Article 4.7 of the SCM Agreement. Japan recognizes that\nparagraph 3 of Article 21 of the DSU allows an implementing Member “a reasonable period of time”\nto implement the recommendations or rulings of the DSB, where it is impracticable to comply\nimmediately. In contrast, Article 4.7 of the SCM Agreement requires a panel to recommend that a\nsubsidy be withdrawn “without delay”.\n7.247 Canada claims that the measures at issue are “complex,” citing even the Financial\nAdministration Act , apparently in support of its contention that changes to the WTO-inconsistent\nprograms “would effect every aspect of Canada’s re gime.” However, not a single Canadian statute\nwould need to be altered in any way to abolish the illegal aspects of the regime. Instead, Canada\nwould only need to repeal the offending portions of the statutory and administrative orders that\nactually implement the regime, to withdraw the prohibited subsidies. Canadian authorities should be\nable to accomplish within a few months the process of consulting with the provinces and\n“stakeholders” – all of which are or should be aware of the challenges to the regime and the likelihood\nthat it would be adjudged to be WTO-inconsistent.\n7.248 In Brazil – Export Financing Programme for Aircraft , the Appellate Body confirmed the\nPanel’s interpretation that “without delay” meant 90 days in the circumstances of that case. In Japan’s\nview, we find nothing in the current case which warrants a period longer than the one granted in the\nBrazil case. Thus, the period of twelve months requested by Canada is far too long.\n7.249 Canada’s argument that the presence or absence of trade distorting effects should be taken\ninto account in determining the appropriate time-period for implementation under Article 4.7 is\nneither justified by the text of the SCM Agreement nor supported by any authority. As a matter of\nfact, however, as argued in Japan’s prior submissions to the Panel, the measures do have trade-\ndistorting effect, which should not be permitted to continue.\n7.250 In paragraph 6 of Canada's response, Canada merely repeats its previous assertions that are\nnot relevant to the Question, and this should simply be dismissed as irrelevant.\n7.251 With regard to paragraph 8 of Canada's response, it must also be noted that it is irrelevant to\nthe interpretation of \"without delay\", whether or not any suggestion for \"an urgent need for action\"\nwas made by the complaining parties during the proceedings of the current panel.\n7.252 In conclusion, in the circumstances of this case, the words “without delay” in Article 4.7\nshould be interpreted to mean just that. There is no reason to delay unduly the withdrawal of the\nprohibited subsidies. To permit a long and draw n-out process of implementation would signal to\nother WTO Members who may appear before other panels that the orders of the panel are less than\nmandatory and that compliance need not occur pr omptly. Accordingly, Japan suggests that all\nrecommendations be implemented within no longer than 90 days.\n\n(iii) Comment from the European Communities on Canada’s Reply\n7.253 In response to Question 61, Canada advances the extraordinary claim that, in the event that\nthe Panel were to find the existence of a prohibited subsidy, Canada should be accorded no less than\ntwelve months in order to adopt the necessary implementing measures731.\n7.254 Canada’s main justification for that request is that the subsidy has “no prejudicial or trade\ndistorting effect732” and that there is no need for “urgent action733”.\n7.255 The European Communities disagrees with those unsupported assertions. Canada’s argument\nbegs the question: if the ratio and the CVA requirements have no effects at all, why are they enforced?\nContrary to Canada’s claims, there is no “empirical evidence 734” whatsoever that the subsidy has no\neffect on the level of exports. No doubt, both NAFTA and geographical proximity facilitate Canadian\nexports to the Unites States. That does not exclude, however, that the subsidy may result in an even\nhigher level of exports to the United States\n735.\n7.256 The best proof that the subsidy does have harmful effects is that the European Communities\nand Japan, which together with the United States (the beneficiary of the measures in dispute) are the\nworld’s largest manufacturers of motor vehicles and parts and components thereof, have brought this\ncase. Furthermore, they have been supported by Korea, another major manufacturer.\n7.257 In any event, whether or not the subsidy has any prejudicial effects is not a relevant\nconsideration in determining the duration of the time period for implementation under Article 4.7 of\nthe SCM Agreement.\n7.258 Article 4.7 constitutes a departure from the general rule contained in Article 21.3 of the\nDispute Settlement Understanding (the “DSU”)\n736. The chief purpose of Article 4.7 is to provide\nfaster remedies than those available under the DSU. Thus, whereas Article 21.3 of the DSU allows a\n“reasonable period of time” to implement whenever it is impracticable to comply immediately,\nArticle 4.7 requires that prohibited subsidies be withdrawn “without delay” in all cases.\n7.259 Logic demands that implementation “without delay” should not take longer than\nimplementation within “a reasonable period of time”. Yet Canada’s argument would have precisely\nthat absurd result.\n7.260 The effects of a measure found to be inconsistent with the WTO Agreement have not been\ndeemed relevant in determining the duration of the “reasonable period of time”. As made clear by a\nlong line of cases, “the reasonable period of time should be the shortest period possible within the\nlegal system of the Member to implement the recommendations and rulings of the DSB”\n 737 .\n\n731 Canada’s response to Question 61 from the Panel.\n732 Ibid.\n733 Ibid.\n734 Ibid.\n735 In any event, this argument does not address the claim that the subsidy violates Article 3.1 b) of the\nSCM Agreement.\n736 The provisions of Article 4.2 though 4.12 are listed as “special or additional rules and procedures”\nin Appendix 2 to the DSU.\n737 Arbitration award in EC – Measures concerning Meat and Meat Products (Hormones) ,\nWT/DS26/15, WT/DS48/13, 29 May 1998, para. 26. See also the Arbitration awards in Indonesia – Certain\nMeasures affecting the Automobile Industry , WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12,\n7 December 1998 (hereinafter Arbitration Report on Indonesia – Autos ), para. 22; Australia – Measures\naffecting the Importation of Salmon , WT/DS18/9, 23 February 1999, para. 38; and Appellate Body Report on\nKorea – Alcoholic Beverages, supra note 280, para. 37.\n\nConsequently, the effects of a measure may not a fortiori be a relevant factor in assessing what\nconstitutes implementation “without delay” for the purposes of Article 4.7.\n7.261 The following argument recently put forward by Canada in Brazil – Aircraft is also pertinent:\n“… Article 7.9 of the SCM Agreement provides that countermeasures may be\nimposed if actionable subsidies are not withdrawn within six months of the adoption\nof the Panel or Appellate Body reports. It is logical that where a subsidy is required to\nbe withdrawn without delay, the timeframe for withdrawal must be shorter than the six\nmonth period provided under Article 7.9 and in no circumstances should be longer\nthan six months\n738”.\n7.262 Previous cases under Article 4.7 confirm that the effects of a subsidy are not a relevant\nconsideration. To this date, Article 4.7 of the SCM Agreement has been applied in three occasions 739.\nIn all the three cases, the Panel recommended that the subsidy be withdrawn within 90 days. The\nPanels seem to have reached that conclusion in light of the nature of the measures and of the internal\nprocedures required in order to implement the Panel’s ruling. On the other hand, there is no indication\nin the reports that the Panels took into account the effects of the subsidy.\n7.263 Even assuming that the effects of the subsidy were a relevant factor, Canada’s request for\ntwelve months would still be unwarranted. Panels en joy some discretion to specify in each particular\ncase the time period within which the subsidy must be withdrawn. But they cannot depart from the\nbenchmark of “without delay”.\n7.264 Implementation twelve months after the adoption of the Panel Report can under no\ncircumstances be regarded as implementation “without delay”. The ordinary meaning of the terms\n“without delay” ( sans retard in French; sin demora in Spanish) is “at once” 740, “le plus vite\npossible741”. Canada’s request is incompatible with the ordinary meaning of “without delay” and\nwould effectively read out of Article 4.7 that requirement.\n7.265 In this regard, it is worth recalling that in Australia – Automotive Leather the panel took the\nview that the implementation period of seven mont hs and one-half months requested by Australia\ncould not “reasonably be described as corresponding to the requirement that the measure must be\nwithdrawn without delay\n742”.\n7.266 Canada also claims that “implementing changes … will involve consultations with provinces\nand stakeholders, the requisite changes to legislation and the design of replacement measures” 743.\nWhile it is arguable, in the light of the precedents above mentioned, that the duration of the internal\nprocedures required for implementation may be a relevant factor, Canada has provided no evidence of\nthe existence in Canadian law of any mandatory procedural requirements which may delay the\nwithdrawal of the subsidy for as much as twelve months.\n7.267 The truth is that the MVTO 1998 and the SROS are both Orders-in-Council, i.e. acts of the\nexecutive branch, which can be amended or repealed within a relatively short period of time. The\n\n738 Appellate Body Report on Brazil – Export Financing Programme for Aircraft , adopted on 20\nAugust 1999, WT/DS46/AB/R, (hereinafter Appellate Body Report on Brazil – Aircraft), para. 52.\n739 Panel Report on Australia – Subsidies Provided to Producers and Exporters of Automotive Leather ,\nWT/DS126/R (hereinafter, Panel Report on Australia – Automotive Leather ) paras. 10.6 and 10.7; Panel Report\non Canada – Aircraft, supra note 495, para. 10.4; and Panel Report on Brazil – Aircraft, supra note 490, para. 8.5.\n740 The Shorter Oxford English Dictionary on Historical Principles, Third Edition, p. 511.\n741 Dictionnaire alphabetique et analogique de la Langue Francaise Paul Robert, 1964, VI, p.164\n742 Panel Report on Australia – Automotive Leather, supra note 739, para. 10.6.\n743 Canada’s response to Question 61 from the Panel.\n\nLetters of Undertaking, being informal acts of the Government, could be dealt with even more\nexpeditiously. The Customs Tariff and the Financial Administration Act 744 confer to the Canadian\nexecutive the necessary authority for the adoption of the MVTO 1998 and the SROs but are not\nthemselves measures in dispute. Therefore, there is no need to repeal or amend them in order to\nwithdraw the subsidy. Finally, the Auto Pact is, according to Canada, a non self-executing agreement\nwhich would fall outside the scope of this dispute\n745. In any event, the Auto Pact merely requires\nCanada to grant duty-free treatment to imports by the Auto Pact manufacturers from the United\nStates. On the other hand, the Auto Pact does not require Canada to grant duty-free treatment to\nimports by the Auto Pact beneficiaries from third countries, nor to imports by the SRO beneficiaries,\nirrespective of the source. Thus, there is no need to amend the Auto Pact in order to withdraw those\nsubsidies.\n7.268 Canada also raises the argument that “for the manufacturers, it will involve a change in years\nof business practice, which cannot be accomplished quickly\n746”. The pertinence of this type of\nconsiderations has been rejected in arbitrations under Article 21.3 DSU. As noted by the Arbitrator in\nIndonesia – Autos:\n“In virtually every case in which a measure has been found to be inconsistent with a\nmember’s obligations under the GATT 1994 or any other covered agreement, and\ntherefore, must be brought into conformity with that agreement, some degree of\nadjustment by the domestic industry of the Member concerned will be necessary\n[…] Structural adjustment to the withdrawal or the modification of an inconsistent\nmeasure, therefore, is not a ‘particular circumstance’ that can be taken into account\nin determining the reasonable period of time under Article 21.3 c).”747\n7.269 The same considerations are valid a fortiori in assessing what constitutes implementation\n“without delay” in the sense of Article 4.7 of the SCM Agreement.\n7.270 For the above reasons, the European Communities submits that the Panel should recommend\nthat the subsidy be withdrawn within 90 days from the adoption of the report.\n5. Questions and replies relating to claims regarding applicability of the GATS\n(a) Question 27 (the duty waiver and Article XXVIII)\nCanada argues that none of the examples listed in Article XXVIII relates to access to or to taxation of\ngoods provided by a service supplier. Could the EC and Japan please elaborate on how the duty\nwaiver relates to the measures listed in Article XXVIII.\n(i) Reply from Japan\n7.271 Judging from the wording of the definitions of \"the supply of a service\" and \"measures by\nMembers affecting trade in services\" in GATS Articl e XXVIII, it is appropriate to interpret that the\nlisted definitions are not exhaustive.\n7.272 The procurement of automobiles is an integral part of the \"supply\" of wholesale trade services\nof motor vehicles within the meaning of Article XXVIII (b), since the supply of wholesale trade\nservices mainly consists of procuring products from manufacturers and reselling them to retailers.\n\n744 See Canada’s response to Question 61 from the Panel.\n745 Canada’s response to Question 2 from the EC.\n746 Canada’s response to Question 61 from the Panel.\n747 Arbitration Report on Indonesia – Autos, supra note 737, para. 23.\n\n7.273 The Duty Waiver, by reducing the procurement cost of automobiles that is borne by the Auto\nPact Manufacturers (who are also wholesale trade service suppliers), necessarily affects the\nprofitability in supplying wholesale trade services – procuring and reselling automobiles. In turn, it\naffects the conditions of competition between wholesale trade service suppliers in selling automobiles\nto retail service suppliers (dealers) and the maintenance and expansion of their dealer networks. Thus,\nthe Duty Waiver constitutes measures by Members affecting trade in wholesale trade services within\nthe meaning of Article XXVIII.\n(ii) Reply from the European Communities\n7.274 Contrary to what is implied by the question, GATS Article XXVIII (c) does not contain a list\nof \"measures\" affecting trade in services, but rather a list of matters in respect of which such measures\ncould be taken.\n748\n7.275 The use of the term \"include\" in GATS Article XXVIII (c) makes it clear that the list\ncontained in that provision does not purport to be exhaustive, but merely illustrative.\n7.276 A Note prepared by the GATT Secretariat in 1991 749 in order to clarify the definitions of the\nterms contained in the then draft GATS described as follows the limited purpose of\nArticle XXVIII (c) [Article XXXIV (c) in the draft]:\n7.277 \"The definition supplements that of supply of a service. It specifies that measures dealing\nwith the consumer side of the transaction (purchase, payment and use), transportation and\ncommunication, as well as constraints on physical or juridical presence, are within the scope of the\nagreement…\"\n7.278 Thus, the purpose of Article XXVIII (c) is merely to confirm that measures adopted in respect\nof certain matters are also within the scope of GATS, rather than attempting to define the scope of\napplication of GATS, something which is already done in GATS Article I:1.750\n7.279 The illustrative nature of Article XXVIII (c) is evidenced by the fact that, for example, it does\nnot include measures in respect of the \"production\" of services. Yet, there can be no question that a\nmeasure limiting the output of a service provider is a measure \"affecting the supply of services\".\nIndeed, that type of measure is expressly mentioned in GATS Article XVI:2 (c) as a limitation on\nmarket access.\n7.280 The illustrative nature of Article XXVIII (c) has been confirmed by the Panel Report on EC –\nBananas III.\n751 According to that Report, the controllin g criterion in order to determine whether a\nmeasure is covered by GATS is not whether it regulates a matter listed in Article XXVIII (c), but\nwhether it \"affects\" trade in services:\n7.281 \"… In principle no measures are excluded a priori from the scope of the GATS as defined by\nits provisions. The scope of the GATS encompasses any measure of a Member to the extent it affects\nthe supply of a service…\". 752\n\n748 Panel Reports on EC – Bananas III, supra note 269, para. 7.280.\n750 The Note by the Secretariat of 15 October 1991, observes the following with respect to Article I:1 of\nGATS, para. 4: \"This important provision determines the scope of the GATS. Its full meaning is clarified\nthrough the definition of each of its elements: measures, by Parties, affecting, trade in services.\"\n751 Panel Reports on EC – Bananas III, supra note 269, para . 7.280.\n752 Ibid., para. 7.285.\n\n7.282 That finding was affirmed by the Appellate Body. 753 Further, the Appellate Body confirmed\nthat that the term \"affect\" must be interpreted broadly 754 and upheld the Panel’s finding that the rules\nfor the allocation of a tariff quota for bananas \"affected\" the provision of distribution services for\nthose goods.\n7.283 In view of the above, there is no scope left for arguing that the measure in dispute in this case,\nwhich is also a tariff measure, like the one at issue in EC – Bananas III, is excluded a priori from the\nGATS’ coverage simply because it is not explicitly listed in Article XXVIII (c).\n(b) Question 29 (\"critical to the scope and pr ofitability\" and \"measure affecting trade in\nservices\")\nCanada argues against the analogy between the measur es at issue in this case and the EC import\nlicensing regime on bananas, on the grounds that the latter was \"critical\" to the scope and\nprofitability of the provision of distribution services. Could Canada please clarify the meaning of the\nterm \"critical\" in this context and how it is used to determine whether a certain measure would be\nconsidered a \"measure affecting trade in services\".\n(i) Reply from Canada\n7.284 Canada was not proposing \"critical\" as a test. The test, as established by the Appellate Body\nin EC – Bananas III755 is whether a measure does or does not affect a service supplier in its capacity\nas a service provider and in its supply of services. Canada used the term \"critical\" to contrast the very\nsignificant effect that access to import licences had on importers in EC – Bananas III in their capacity\nas importers, i.e. their ability to compete for the provision of the service of importing bananas, with\nthe absence of any effect whatsoever of the 6.1 per cent duty on the ability of vehicle distributors to\ncompete for the service of distributing vehicles.\n7.285 As Canada noted, under the EC’s bananas regime, the right to import bananas within the\ntariff-rate quota was allocated by a system of licences. It was critical to the outcome of EC – Bananas\nIII that the EC measures deliberately and drastically took distribution business away from certain\nsuppliers and gave it to others. Those distributors that did not receive licences faced a prohibitive\ntariff, which meant that they were effectively prevented from distributing bananas in the EC, unless\nthey were prepared to pay an exorbitant quota rent to the licence holder. That is, they were affected\nby the import licensing regime in their capacity as distributors.\n7.286 The EC’s measures in EC – Bananas III also imposed differential levels of duty, but it is\nsignificant that these were not even mentioned in relation to trade in services but, properly, only in\nrelation to trade in goods. Differential duties may affect goods as goods, but they do not and cannot\naffect service suppliers in their capacity as servic e suppliers. To hold that they do would render null\nthe three categories of measures identified by the Appellate Body in EC – Bananas III\n756 would ignore\nthe definitions of \"supply of a service\" and \"measures by Members affecting trade in services\" in\nArticle XXVIII of the GATS, would contradict the Addendum to the Explanatory Note on the\nScheduling of Initial Commitments in Trade in Services , and would create conflicts between the\nGATS and differential treatment of goods authorized under the GATT. The GATS complements the\nrights and obligations of the GATT, but was not intended to subsume or contradict them.\n\n753 Appellate Body Report on EC – Bananas III, supra note 49, para.220.\n754 Ibid.\n755 Appellate Body Report on EC – Bananas III, supra note 49.\n756 Ibid., para. 221.\n\n(c) Question 58 (interface of GATT and GATS)\nCanada has raised the point that differential tariffs arise for a number of reasons. Such differential\ntariff treatment may have adverse commercial consequences for certain service suppliers in the\nimporting country compared with other service suppliers, particularly where the industry is\ncharacterised by a high degree of vertical integration.\nAssuming such differential tariffs are fully consistent with GATT 1994, it may be held that they \"affect\ntrade in services\", which is not to imply that such measures necessarily breach GATS obligations. In\nthe case of differential tariffs arising from re gional economic integration agreements, it would seem\nlogical for any examination of that matter to procee d directly to GATS Article V that deals with the\nmatter.\nHowever, in other cases unrelated to regional economic integration agreements and thus where\nGATS Article V is irrelevant – anti-dumping and CVD orders which are themselves fully consistent\nwith the provisions of GATT 94 and the Anti- dumping or SCM Agreements, for example – such\ndifferential tariffs may also be considered to have the incidental consequence of \"affecting trade in\nservices\" and, moreover, raise the question as to whether less favourable treatment is being accorded\nto certain services providers either in terms of GATS Article II or Article XVII.\nCould the delegations of Japan and the EC comment on this?\n(i) Reply from Japan\n7.287 As this question is answered in the rebuttal of Japan, the Duty Waiver is not an anti-dumping\nor countervailing duty, and therefore the Panel is not required to decide on the consistency between\nthese GATT-consistent measures and the GATS. The Panel in the EC – Bananas III also wisely\nrejected the argument on the consistency between GATT-consistent measures and the GATS, saying\nthat the Panel \"need not decide in this case how to resolve a conflict that may never arise \"between\nGATT and GATS provisions.\n7.288 It is the position of the Government of Japan that to the extent that this Panel is considering\nthis issue in the context of this dispute, the only difference between the Duty Waiver and the measure\nat issue in the EC – Bananas III is the magnitude of the discrimination of the customs duty in\nquestion, not its nature. It is therefore the position of the Government of Japan that to the extent that\nsuch argument was irrelevant to the EC – Bananas III case, it is equally irrelevant to this dispute.\n(ii) Reply from the European Communities\n7.289 Differential tariff treatment may \"affect the supply of services\" in the sense of GATS\nArticle I:1. Nevertheless, as rightly noted in the Panel's question, that does not mean that tariff\ndifferentials are per se contrary to GATS Article XVII or Article II. For that, it would still be\nnecessary to show that in casu the tariff differential provides more favourable treatment to domestic\nservice suppliers than to foreign service providers, or to service suppliers of one or more Members\nthan to service suppliers of other Members, respectively.\n7.290 The tariff differential at issue in this case is fundamentally different from those resulting from\nthe existence of a free-trade area (\"FTA\") established in conformity with Article XXIV GATT.\nCanada grants the Tariff Exemption only to a limited number of importers/distributors. By contrast,\nin a FTA any importer/distributor is entitled to import duty free any goods from the other constituent\nterritories of the FTA. For that reason, the mere existence of a FTA is unlikely to give a competitive\nadvantage to service suppliers of a particular Member at the expense of service suppliers of other\nMembers. In fact, in the present case neither the European Communities nor Japan claim that the\n\nFTA between Canada and the United States established by NAFTA gives raise to a violation of\nArticle II. Rather the complainants' claim is that Article II of GATS is breached by the additional\nprivileges granted to certain US importers/distributors under the Tariff Exemption.\n7.291 Contrary to what is implied in the question, whether or not a FTA gives raise to a violation of\nGATS Article II is not a question to be examined directly within the framework of Article V GATS.\nAs a first step, it is necessary to establish that there is a prima facie violation of GATS Article II.\nIndeed it must be recalled that the existence of a FTA formed in accordance with GATT\nArticle XXIV does not necessarily presuppose the existence of an Economic Integration Agreement\nmeeting the requirements of Article V GATS and vice-versa.\n7.292 The Tariff Exemption also is easily di stinguishable from anti-dumping (\"AD\") and\ncountervailing (\"CV\") duties. In the first place, unlike the Tariff Exemption, AD and CV duties do\nnot discriminate formally among importers/distributors. AD and CV duties apply to all imports from\na given exporting country, or at least to all imports manufactured by a certain undertaking,\nirrespective of the identity of the importer/distributor. By contrast, the Tariff Exemption applies only\nand exclusively to imports by a limited number of designated importers/distributors.\n7.293 Second, even those importers/distributors which are related to an exporter/manufacturer\nsubject to AD/CV measures have several options to import the goods that they distribute without\nbeing required to pay AD or CV duties: (a) to purchase the goods from an unrelated supplier in the\nsame exporting country; (b) to purchase the goods from a supplier (related or unrelated) in another\ncountry not covered by the AD/CV measure; or (c) to stop selling at dumped prices or to renounce the\nsubsidy. In contrast, there is nothing that a non-beneficiary can do in order to obtain the Tariff\nExemption, short of taking over one of the existing beneficiaries.\n7.294 Finally, it must be recalled that AD and CV duties are remedies against practices that distort\ncompetition among goods, and consequently al so among the distributors of those goods.\nFurthermore, both AD\n757 and CVD duties 758 must be applied on non-discriminatory basis on imports\nfrom all sources. Therefore, AD and CV duties do not \"modify the conditions of competition\" in\nfavour of those service suppliers who distribute goods not subject to those measures. Rather, AD and\nCV duties serve to re-establish a level playing field between those suppliers who distribute\ndumped/subsidised goods and those suppliers who distribute non dumped/non subsidised goods.\n6. Questions and replies relating to claims under Article II of the GATS\n(a) Question 33 (the measures at issue and GATS Article V)\nWithout prejudice to Canada's stated position that the duty waiver is not inconsistent with Article II of\nthe GATS and in the light of the third-party ar gument from the United States, could Canada clarify\nwhether it sees any relevance of Article V of the GATS to the arguments put forward by the\ncomplainants?\n(i) Reply from Canada\n7.295 Article V of the GATS is relevant to demonstrate that the scope of the GATS was not\nintended to extend to measures according duty-free treatment to goods. Had those drafting the GATS\never imagined that trade-in-goods provisions such as duty remission programs might constitute\nmeasures \"affecting trade in services\", the exemption in Article V:1 of the GATS would have been\nextended to agreements liberalizing trade in g oods, and not just agreements liberalizing trade in\nservices. To hypothesize the relevance of Article V of the GATS in the event that the GATS was\n\n757 C.f. Article 9.2 of the Agreement on Implementation of Article VI of GATT 1994.\n758 C.f. Article 19.3 of the SCM Agreement.\n\nfound to apply to the duty-free treatment of goods would require contorting the scope of the GATS\nbeyond the intentions of its drafters.\n7.296 If the Panel nevertheless finds that the measures according duty-free treatment to goods fall\nwithin the scope of the GATS, then Canada agrees with the United States that with respect to any\nmore favourable treatment allegedly accorded to US service suppliers, the measures would be subject\nto the MFN exception conferred by Article V:I of the GATS.\n(b) Question 34 (ownership and control)\nCanada argues that when the nationality of service suppliers (distributors) is ascertained in\naccordance with the GATS provisions, no service suppliers of a particular Member are favoured or\ndisadvantaged. Please clarify whether service supp liers, as individual economic operators (which in\nsome cases might be distinct from manufacturers), are service suppliers of other Members according\nto Article XXVIII. And, to the extent possible, provide factual information on the ownership and\ncontrol situation of these operators.\n(i) Reply from Japan\n7.297 With respect to wholesale trade services relate d to automobiles, the relevant service suppliers\nand their ownership are set out in Japan's Tables 1 and 2.\n7.298 To summarise the evidence, in Japan's Table 1 the wholesale trade service suppliers of the\nAuto Pact Manufacturers are identified—Chrysle r Canada, Ford Canada, GM Canada, Volvo Canada\nand CAMI and their ownership is specified. Applying the ownership test in paragraphs (m) and (n) of\nGATS Article XXVIII, the first three companies are US service suppliers and the fourth is a Swedish\nservice supplier.\n759 With respect to the fifth company, it is not a Japanese service supplier within the\nmeaning of paragraph (n) of GATS Article XXVIII.760\n7.299 Japan's Tables 1 and 2 list the following whol esale trade service suppliers of the non-Auto\nPact Manufacturers: Toyota Canada Inc., Nissan Canada Inc., Mazda Canada Inc., Suzuki Canada,\nHonda Canada Inc., Subaru Canada Inc., BMW Canada Inc. and Volkswagen Canada Inc. Others not\nlisted on these tables include subsidiaries of South Korean manufacturers (e.g., Hyundai, etc). As\nevident from those tables, all of these companies are non-Canadian and non-US, according to\nparagraphs (m) and (n) of Article XXVIII.\n7.300 It can be concluded from the foregoing evidence that US subsidiaries that supply wholesale\ntrade services benefit from the Duty Waiver and none of the Japanese subsidiaries that supply like\nservices benefit from the Duty Waiver.\n7.301 For the sake of avoidance of misunderstanding, the Government of Japan would like to\nemphasize that even if one or more Japanese service suppliers were granted duty-free treatment under\nthe Duty Waiver (which is not the case), Canada could not justify according less favorable treatment\nto other Japanese service suppliers.\n\n759 This could change to a US service supplier as a result of Ford Motor Co’s 1 March 1999 agreement\nwith AB Volvo to purchase Volvo’s world-wide passenger car business. On 8 March 1999, AB Volvo’s\nshareholders approved the transaction. The transactio n will close following the receipt of regulatory approvals.\nSource: Ford Motor Co., Form 10-K Annual Report (US Securities and Exchange Commission), fiscal year\nended December 31, 1998.\n760 According to the information given to the Ministry of International Trade and Industry of the\nGovernment of Japan by Suzuki Motor Corporation, only General Motors Group owns 40,237,358 preferred\nshares of CAMI in addition to ordinary shares equally owned by and between General Motors Corporation and\nSuzuki Motor Corporation.\n\n7.302 The Government of Japan has only insufficient information relating to service suppliers\nwhich distribute buses and specified commercial vehicles imported from abroad into Canada,\nalthough, to the extent of the knowledge of the Government of Japan, there is at least one Japanese\nservice supplier named Hino Diesel Trucks (Canada), Ltd. Since the information as to the nationality\nof the service suppliers is uniquely in the hands of the Government of Canada, the information on this\naspect should be provided by the Government of Canada. Accordingly, the Government of Japan has\nsubmitted a question to Canada on this issue. It is, nevertheless, the understanding of the Government\nof Japan that no Japanese service suppliers are eligible for the duty exemption in connection with\nbuses and specified commercial vehicles.\n(ii) Reply from the European Communities\n7.303 The European Communities has already provided the requested factual information on\nownership and control with respect to the five w holesale distributors that are entitled to import\nautomobiles under the Tariff Exemption in the EC's Table 5.\n7.304 As shown in that Table, three of those five wholesale distributors (Ford Motor Co. of Canada\nLtd., General Motors Co. of Canada Ltd and Chrysler Canada Ltd.) can be considered as service\nsuppliers of the United States in accordance with the criteria set forth in GATS Article XXVIII m)\nand n), while another distributor (CAMI Automotive Inc.) is a joint venture between a Japanese\ncompany (Suzuki Motors Corp.) and a US company (General Motors Corp.).\n7.305 The fifth wholesale distributor (Volvo Canada Ltd.) was controlled by Volvo AB, of Sweden,\nuntil January 1999, when Volvo AB agreed to sell its passenger car business to Ford Motor Co., of the\nUnited States. At any rate, Volvo Canada Ltd closed its Canadian assembly plant in December 1998,\nwith the consequence that it will loose the right to import motor vehicles under the Tariff Exemption\nas of July1999.\n7.306 Ford Motor Co. of Canada Ltd, General Motors Co. of Canada Ltd and Chrysler Canada Ltd.\naccount for the vast majority of sales of automobiles imported under the Tariff Exemption.\n7.307 As clarified by the Panel Report in EC – Bananas III\n761, the fact that a juridical person of\nMember A that controls a service supplier established in Member B is in turn controlled by another\nperson of Country C does not prevent from considering that service supplier as a service supplier of\nMember A for GATS purposes. Thus, contrary to Canada’s assertions, Chrysler Canada Ltd., can still\nbe regarded as a service supplier of the United States, despite the fact that its US parent company,\nDaimlerCrhysler Corp, is controlled by DaimlerChrysler AG of Germany following the merger of\nChrysler with Daimler-Benz.\n7.308 The EC's Table 7 (below) provides the requeste d ownership information with respect to the\nmajor wholesale distributors which are not entitled to import automobiles under the Tariff Exemption.\nThe Table reflects the information available to the EC’s and does not purport to be exhaustive.\n7.309 The EC's Table 7 shows that, with only one ex ception (Nissan Canada Inc.) all the major\nwholesale distributors of automobiles which do not benefit from the Tariff Exemption are service\nsuppliers of Members other than the United States. Thus, for example, Volkswagen Canada Inc. is a\nservice supplier of Germany because it is owned by a juridical person constituted under German law,\nVolkswagen AG, which is engaged in substantial business operations within the German territory.\n\n761 Panel Reports on EC – Bananas III, supra note 269, footnote 493.\n\nEC's Table 7\nCountry of origin of the major suppliers of wholesale trade services for automobiles which do not\nbefit from the Tariff Exemption\nService supplier Parent company % of shares\nowned by parent\ncompany\nCountry of\nincorporation of\nparent company\nVolkswagen\nCanada Inc.\nVolkswagen AG 100 Germany\nBMW Canada Inc. BMW AG 100 Germany\nMercedes-Benz\nCanada Inc.\nDaimlerChrysler\nAG\n100 Germany\nHonda Canada Inc. Honda Motor Co.\nAmerican Honda\nMotor Co.*\n50.14\n49.86\nJapan\nUSA\nToyota Canada\nInc.\nToyota Motor\nCorp.\nMitsui & Co.\n50\n50\nJapan\nJapan\nNissan Canada Inc. Nissan Motor Co.\nLtd.\nNissan North\nAmerica Inc.**\n38.3\n61.7\nJapan\nUSA\nSubaru Canad a\nInc.\nFuji Heavy\nIndustries Ltd.\n100 Japan\nMazda Canada Inc. Mazda Moto r\nCorp.\nItochu Corp.\n60\n40\nJapan\nJapan\nHyundai Canad a\nInc.\nHyundai Motor\nCo.\n100 Korea\nPorsche Canada\nLtd.\nPorsche AG 100 Germany\nLada Canada Inc. ??? ??? ???\n* A fully owned subsidiary of Honda Motor Co., of Japan.\n** A fully owned subsidiary of Nissan Motor Co. Ltd., of Japan.\n\n(iii) Reply from Canada\n7.310 Article XXVIII(m) of the GATS provides that a \"juridical person of another Member\" is a\njuridical person which is either: (i) constituted or otherwise organized under the law of that other\nMember … or (ii) in the case of the supply of a service through commercial presence, owned or\ncontrolled by … juridical persons of that other Member identified under subparagraph (i).\n7.311 Article XXVIII(n)(i) of the GATS provides that a juridical person is \"owned\" by persons of a\nMember if more than 50 per cent of the equity interest in it is beneficially owned by persons of that\nMember.\n7.312 Chrysler Canada Ltd. is now DaimlerChrysler Ca nada Inc.. It is a wholly-owned subsidiary\nof the DaimlerChrysler Corporation (a United States company), which in turn is 100 per cent owned\nby DaimlerChrysler AG of Germany.\n7.313 According to Article XXVIII(m)(i), DaimlerChrysler AG is a juridical person constituted\nunder the law of Germany. DaimlerChrysler Canada Inc. is owned by DaimlerChrysler AG through\nDaimlerChrysler Corporation. DaimlerChrysler Canada Inc. is therefore a juridical person of\nGermany, according to Article XXVIII(m)(ii) and XXVIII(n)(i).\n7.314 Similarly, Nissan Canada Inc. is a juridical person of Japan, although according to Japan's\nTable 2, it is majority-owned by Nissan North America Inc. of the United States. This is because\nNissan North America Inc. is itself 100 per cent owned by Nissan Motor Co. Ltd. of Japan.\n7.315 While Volvo Canada Limited was operating as a manufacturer in Canada, it was wholly-\nowned by Volvo AB of Sweden. It was theref ore a juridical person of Sweden by operation of\nArticles XXVIII(m) and (n). Volvo Canada Limited is now indirectly wholly-owned by the Ford\nMotor Company.\n7.316 CAMI Automotive Inc. is 50 percent owned by General Motors of Canada Limited and\n50 per cent owned by the Suzuki Motor Company of Japan. General Motors of Canada is wholly-\nowned by the General Motors Corporation of the United States, making it a juridical person of the\nUnited States for the purposes of Article XXVIII. CAMI is therefore owned 50/50 by juridical\npersons of the United States and Japan. Under Article XXVIII(n)(i), ownership by persons of a\nMember requires an equity interest greater than 50 per cent. Persons of neither the United States or\nJapan own CAMI individually because neither Genera l Motors nor Suzuki individually owns greater\nthan 50 per cent. Together however, they own 100 per cent of CAMI. CAMI can therefore be said to\nbe a juridical person of both the United States and Japan.\n(c) Question 35 (vertical integration)\nCanada argues that in the supply of wholesale trade services for automobiles there is no competition\nbetween wholesale trade service suppliers since wholesale suppliers are subordinated to\nmanufacturers and therefore the question of an effect on conditions of competition does not arise.\nDoes vertical integration between manufacturers and suppliers of wholesale trade services exclude\nany actual or potential competition at the wholesale trade level? To what extent does vertical\nintegration between manufacturers and suppliers of wholesale trade services also exclude competition\nwith respect to sales to retailers?\n\n(i) Reply from Japan\n7.317 As the Appellate Body Report for EC – Bananas III confirmed, even if wholesale trade\nservice suppliers are integrated with manufacturers, to the extent they are engaged in providing\nwholesale trade services, they are wholesale trade service suppliers.\n7.318 And vertical integration between manufacturers and suppliers of wholesale trade services\ndoes not exclude any actual and potential competition at the wholesale trade level, since an integrated\nmanufacturer, in its capacity as a wholesale trade service supplier, competes with other wholesale\ntrade service suppliers as to the sales of automobiles to retail service suppliers (dealers) and the\nmaintenance and expansion of their dealers networks. This type of competition is relevant to this\ndispute because dealers are consumers of the wholesale trade services provided by the service\nsuppliers in question. To the extent that manufacturers/wholesale trade service suppliers are to sell\nautomobiles to retail service suppliers (i.e. dealers), there is competition between those\nmanufacturers/wholesale trade service suppliers with respect to sales to retailers, notwithstanding\ntheir vertical integration.\n7.319 Further, differences in the retail prices of automobiles caused by the Duty Waiver will\nnecessarily affect sales volumes and will lead to differences in profitability in supplying wholesale\ntrade services between manufacturers/wholesale service suppliers. This means that the conditions of\ncompetition between manufacturers/wholesale trade service suppliers for sales to retailers will be\nnegatively affected.\n(ii) Reply from the European Communities\n7.320 No. Although the major wholesale distributors of automobiles present in the Canadian\nmarket are vertically integrated with manufacturers\n762, that does not exclude any actual or potential\ncompetition amongst them with respect to the purchase of motor vehicles from manufacturers for\nwholesale resale.\n7.321 In the first place, some foreign manufacturers of automobiles have little or no presence at all\nin the Canadian market (e.g., Renault, Peugeot-Citroen, Fiat, Mitsubishi, Proton or Tata).\n7.322 Those potential new entrants have basically three options in order to penetrate into the\nCanadian market: to set up their own distributors; to designate an independent distributor; or to\nappoint as a distributor an existing integrated distributor. The last option is not unusual, in particular\nwhen the model ranges of the two manufacturers concerned are complementary. By way of example,\nin the past Chrysler has imported and distributed in Canada motor vehicles manufactured by\nMitsubishi, an unrelated Japanese producer (see Exhibit EC-16, Table 1.7).\n7.323 Thus, while it may be true that, as argued by Canada, Honda Canada and Ford Canada would\nnot compete for the distribution in Canada of vehicles manufactured by Ford in the United States, they\nmay compete, not only with other integrated distributors but also with independent distributors, for\nthe distribution of vehicles produced by a fore ign manufacturer without a distribution network in\nCanada. The Tariff Exemption confers upon the beneficiaries a competitive advantage in that market\nbecause it lowers their import costs and, therefore, gives them the possibility to offer better\npurchasing terms to the foreign manufacturer.\n7.324 Secondly, even with respect to motor vehicl es of the parent company’s brand, vertically\nintegrated distributors may face competition from parallel importers.\n\n762 The affiliation of some distributors, such as Lada Canada Inc., is nevertheless unclear, as shown in\nTable 7.\n\nRegarding the question, \"To what extent does vertical integration between manufacturers and\nsuppliers of wholesale trade services also exclude competition with respect to sales to retailers?\":\n7.325 Canada’s argument is built on the wrong assumption that wholesale distribution services are\nprovided by the wholesalers exclusively to the manufacturers. The truth, however, is that wholesaler\ndistributors of automobiles act as intermediaries between the manufacturers and the retailers (and in\nsome cases final consumers, e.g., in the case of so-called \"fleet sales\" to big purchasers). They\nprovide a service to retailers as much as to the manufacturers. In fact, except in the rare cases where\nwholesale distributors of automobiles act as mere agents for the manufacturers, the \"buyer\" of the\nservice, i.e. the person who actually \"pays\" for the distribution service, is the retailer and not the\nmanufacturer.\n7.326 Quite clearly, vertical integration between manufacturers and wholesale distributors of\nautomobiles, even if it were complete, would not exclude per se competition among wholesale\ndistributors with respect to sales to retailers and final consumers. Vertical integration has the only\nconsequence that Honda Canada and Ford Canada cannot compete to resell the same automobiles to\nretailers. But it does not prevent them from comp eting in order to resell to dealers automobiles\nmanufactured by their respective parents which are directly competitive and substitutable with each\nother. In other words, the absence of intra-bra nd competition among wholesalers does not exclude\ninter-brand competition.\n(iii) Reply from Canada\n7.327 Canada notes that the arguments in question are found in its initial response.\n7.328 It is not clear if the question refers to vertical integration in the motor vehicle industry only,\nor to vertical integration generally. In the motor vehicle industry, a combination of vertical\nintegration and exclusive distribution arrangements does exclude any actual or potential competition\nat the wholesale trade level. The same is not necessarily true of other industries. For example, it is\nnot the case in the bananas business, where even those companies that were vertically integrated had\nthe \"capability and opportunity to enter the wholesale service market\".763\n7.329 Contrary to what was implied by the European Communities in its argument, the Appellate\nBody’s findings in EC – Bananas III in respect of integrated wholesalers were specific to the facts of\nthe case. The Appellate Body stated that: \"even if a company is vertically-integrated, … to the extent\nthat it is also engaged in providing \"wholesale trade services\" and is therefore affected in that\ncapacity by a particular measure of a Member in its supply of those ‘wholesale trade services’, that\ncompany is a service supplier within the scope of the GATS\".764 (emphasis added)\n7.330 The fact that a wholesale service supplier is integrated does not mean that it is necessarily\noutside the scope of the GATS, but nor does it mean that it necessarily falls within the scope of the\nGATS either. The determining factor is whether that service supplier is affected in its capacity as a\nservice supplier and in its supply of those services. The nature of the motor vehicle industry is such\nthat there is no competition among wholesale service suppliers in the supply of wholesale trade\nservices. Japan confirmed this in its arguments.\n[Regarding the question \"to what extent does vertical integration between manufacturers and suppliers\nof wholesale trade services also exclude competition with respect to sales to retailers?\":]\n7.331 If the EC’s reference to retailers was meant to suggest that retailers could choose among\nwholesale service suppliers, the suggestion is wrong. Wholesaling by definition entails sales to\n\n763 Panel Reports on EC – Bananas III, supra note 269, para. 7.320.\n764 Appellate Body Report on EC – Bananas III, supra note 49, para. 227.\n\nretailers. Wholesalers purchase goods from manufacturers and resell them to retailers. A headnote to\nDivision 6 of the CPC states that: \" The principal services rendered by wholesalers and retailers may\nbe characterized as reselling merchandise, accompanied by a variety of related, subordinated services\n…\". ( emphasis added)\n7.332 \"Reselling\" necessarily implies that the reseller has purchased the good in the first place. It is\nuncertain to what extent the commercial presences of the motor vehicle manufacturers identified by\nthe complainants as \"wholesalers\" have purchased the vehicles from the manufacturers. If they have\nnot, they cannot be said to be wholesalers at all. The complainants have offered no evidence on this\npoint.\n7.333 Even assuming that these commercial presences are wholesalers, they do not compete for\nsales to retailers for the same reason that they do not compete to distribute the vehicles of particular\nmanufacturers. The so-called wholesalers have exclusive distribution arrangements with the\nmanufacturers. Accordingly, retailers of specific brands of vehicles cannot select among wholesale\nservice suppliers for the supply of those vehicles. Retail dealers of Honda automobiles cannot for\nexample, approach General Motors of Canada and ask General Motors to supply them with Hondas\nfrom the Honda Motor Company of Japan. Those retailers must rely on Honda Canada Inc. to provide\nthose vehicles.\n7.334 It is possible that the European Communities was suggesting that duty-free treatment may\ninfluence which brands of vehicles retailers choose to sell and that this consequentially influences\ntheir choice of service supplier. However, this simply underscores that what benefits from the duty-\nfree treatment is particular goods (the vehicles) and that there is no competition in the provision of\ndistribution services for those goods. To contend that the measure affects wholesale service suppliers\nthrough retailers implies that every measure affecting goods not only affects wholesale service\nsuppliers of those goods but also the retailers of the goods as well. No measures affecting goods\nwould not also \"affect\" services. The EC’s argument would obliterate the distinction among the three\ncategories of measures by the Appellate Body in EC – Bananas III.765\n(d) Question 56 (the measures at issue and GATS Article V)\nIn its reply to question 33 from the Panel, Canada said that if the Panel found that the duty waiver fell\nwithin the scope of the GATS it agreed with the United States that with respect to any more\nfavourable treatment allegedly accorded to US service suppliers, the measures would be subject to the\nMFN exception conferred by Article V:1 of the GATS. Could Canada elaborate further on how the\nmesures at issue could be considered consistent with the paragraph 6 of Article V, concerning the\ntreatment of service suppliers of Members not parties to the economic integration agreement?\n(i) Reply from Canada\n7.335 Canada did not invoke the Article V:1 exception, because the tariff measures in question do\nnot affect trade in services and hence are not subject to the GATS. Article V:1 of the GATS covers\nagreements liberalizing trade in services but it does not cover tariff measures taken pursuant to\nagreements liberalizing trade in goods, such as those creating free-trade areas or customs unions.\nCanada submits that such measures are not exempted under Article V:1 because, until the EC and\nJapanese claims in this case, no one, including the drafters of the GATS and those involved in EC –\nBananas III, had ever thought that tariff measures were within the scope of the GATS.\n7.336 Canada stated that if the Panel nevertheless found that the measures according duty-free\ntreatment fell within the scope of the GATS, Canada would endorse the suggestion of its NAFTA\npartner, the United States, that by extension, Article V:1 of the GATS would apply to any alleged\n\n765 Appellate Body Report on EC – Bananas III, supra note 49, para. 221.\n\nMFN violation arising from a provision of the NAFTA. This would be because the NAFTA is,\namong other things, an agreement liberalizing trade in services and therefore falls within Article V:1\nof the GATS.\n7.337 It is not entirely clear to Canada why the Panel is raising Article V:6 in the context of\nArticle V:1. Article V:6 of the GATS creates an obligation on Members to grant service suppliers\nthat are juridical persons of another Member constituted under the laws of a party to an agreement\nliberalizing trade in services the treatment granted under the services liberalizing agreement, provided\nthat the juridical person engages in substantive business operation in the territories of the parties to the\nservices liberalization agreement. Because neither of the complainants claimed a violation of Article\nV:6 in its request for a panel, alleged violations of Article V:6 of the GATS are not properly within\nthe Panel's terms of reference.\n7.338 If the Panel's question is intended to suggest that an inconsistency with Article V:6 would\nnegate the exception afforded by Article V:1, Canada cannot agree. In contrast with paragraphs (a)\nand (b) of Article V:1, there is nothing in Article V:6 itself or elsewhere in Article V to suggest that\nArticle V:6 constitutes a condition limiting the application of the Article V:1 exception. If it had been\nintended as such a condition, it would have been included in Article V:1 rather than drafted as an\nindependent obligation.\n7.339 In any event, the NAFTA fully satisfies Article V:6. The treatment granted by the NAFTA\nchapters that specifically address trade in services (Chapters 11, 12 and 14) is granted to service\nsuppliers that are juridical persons of other Members constituted under the laws of the NAFTA parties\nand engaging in substantial business activities there. To the extent that the tariff treatment granted by\nthe trade in goods provisions of the NAFTA affects trade in services – and in Canada's view it does\nnot – that tariff treatment is also granted to service suppliers that are juridical persons of other\nMembers constituted under the laws of the NAFTA parties and engaging in substantial business\nactivities there. This includes Canada's duty-free treatment for qualifying manufacturers, as permitted\nunder the NAFTA.\n• Also, hypothetically, what would be Canada's justification for more favourable treatment\naccorded to non-NAFTA service suppliers?\n7.340 Canada does not understand the question but would be pleased to receive a clarification of it\nand an opportunity to respond. [The Panel decided not to pursue this matter.]\n(e) Question 57 (the measures at issue and de facto discrimination)\nThe EC and Japan claim that Auto-Pact manufacturers, as suppliers of wholesale trade services, are\naccorded more favourable treatment in a manner which constitutes de facto discrimination against\nother like service suppliers. Does this impl y that Auto-Pact manufacturers and other service\nsuppliers receive formally identical treatment? How could this relate to the Auto-Pact manufacturers\nbeing a closed list?\n(i) Reply from Japan\n7.341 The claim of the Government of Japan with regard to the eligibility restriction is that Japanese\nservice suppliers are de facto excluded from ever qualifying for the Duty Waiver due to various\nconditions set forth under the MVTO 1998 and the SROs as outlined in Japan's arguments as well as\nthe fact that Auto Pact Manufacturers are limited to those on \"a closed-list\". Since GATS Article II\napplies to de facto discrimination as well as de jure discrimination, it is not necessary to address the\nsignificance of \"formally identical treatment\" in the context of this dispute.\n\n(ii) Reply from the European Communities\n7.342 No. The treatment received by the Big Three and CAMI is formally, and not simply de facto,\nmore favourable than that accorded to the other suppliers of wholesale distribution services for\nautomobiles. The European Communities clai ms that the Tariff Exemption results in de facto\ndiscrimination in the sense that, although those differences in treatment are not formally based on the\norigin of the service suppliers, de facto US suppliers receive more favourable treatment than the\nsuppliers of other Members.\n7.343 The fact that the list of beneficiaries was frozen as of 1989 reinforces the discriminatory\neffects of the Tariff Exemption, because it means that other suppliers of distribution services for\nautomobiles cannot obtain the Tariff Exemption, even if they are also established as manufacturers in\nCanada and meet CVA and ratio requirements equivalent to those imposed upon the beneficiaries.\n7.344 Finally, the fact that the list was frozen at the request of the United States evidences that the\neffects of the Tariff Exemption are by no means the result of geography or accident, as claimed by\nCanada, but the intended consequence of a deliberate policy to provide an advantage to the US\nsuppliers over the suppliers of other Members.\n(f) Question 59 (origin of wholesale trade service suppliers)\nCould Japan please clarify on what basis it has classified three suppliers of wholesale trade services\nfor buses and specified commercial vehicles as Canadian in Exhibit JPN-50.\nCould Japan please provide necessary material to support the Canadian origin of these suppliers.\n7.345 As for the nationality of the “juridical person”, Article XXVIII (m)(i) and (ii) and (n)(i) of\nthe GATS prescribe as follows:\n(m) “juridical person of another Member” means a juridical person which is either:\n(i) constituted or otherwise organi zed under the law of that other\nMember, and is engaged in substantive business operations in the\nterritory of that Member or any other Member; or\n(ii) in the case of the supply of a service through commercial presence,\nowned or controlled by:\n1. natural persons of that Member; or\n2. juridical persons of that other Member identified under\nsubparagraph (i);\n(n) a juridical person is:\n(i) “owned” by persons of a Member if more than 50 per cent of the\nequity interest in it is beneficially owned by persons of that Member;\n…\n7.346 Based on the information provided by the Government of Canada in its response to\nQuestion (4) of the Government of Japan, the three suppliers of wholesale trade services classified as\nCanadian in Exhibit JPN-50, which are A. Girardin Inc., Les Enterprises Michel Corbeil Inc. and\nWestern Star Trucks Inc., have imported vehicles from other countries into Canada. Those companies\nprovide services through a commercial presence in Canada. If those companies are not owned or\ncontrolled by natural persons of a country other than Canada or juridical persons of countries other\nthan Canada identified under subparagraph (m)(i), those companies are not “juridical persons of\nanother Member”, and it follows that those companies are juridical persons of the Member (Canada).\n\n7.347 On the homepage of the Canadian Department of Industry (Industry Canada)\n(http://strategis.ic.gc.ca/), Industry Canada stated that “Both Thomas Built and Canadian Bluebird are\nAmerican-owned. A. Girardin and Michel Corbeil Enterprises Inc. are wholly-owned Canadian\ncompanies.” (See page 3 of attachment 1 to this response [assigned name: Exhibit JPN-51].)\nTherefore, Japan concluded that A. Girardin and Michel Corbeil Enterprises Inc. are service suppliers\nof Canadian origin.\n7.348 On the homepage of Industry Canada ( http://strategis.ic.gc.ca/), it is also indicated that\nownership of Les Enterprises Michel Corbeil Inc. (see attachment 2 [assigned name: Exhibit JPN-\n51]) and Michel Corbeil Enterprises Inc. (see attachment 3 [assigned name: Exhibit JPN-51]) is\nCanadian. This homepage also indicates that the ownership of Western Star Trucks Inc. is Canadian\n(see attachment 1 [assigned name: Exhibit JPN-51]). Based on the information from Industry Canada\non the ownership of those three companies, it is reasonable to presume that more than 50 per cent of\ntheir equity interests is owned by Canadians.\n7.349 Please see attachments 1-3 [assigned name: Exhibit JPN-51], which substantiates Japan's\nabove conclusion.\n(g) Question 60 (origin of wholesale trade service suppliers)\nCould Canada please confirm that the three suppliers of wholesale trade services for buses and\nspecified commercial vehicles, listed as Canadian in Exhibit JPN-50, are of Canadian origin.\n7.350 The three companies listed as Canadian in Exhibit JPN-50 are A.Girardin Inc., Les\nEntreprises Michel Corbeil Inc., and Western Star Trucks Inc. Canada has the following information\nabout their “origin”: A.Girardin Inc. and Les Entreprises Michel Corbeil Inc. are both privately-\nowned companies incorporated in Canada. To Ca nada’s knowledge, both companies are Canadian-\nowned. Western Star Trucks Inc. is a company incorporated in Canada. It is wholly-owned by a\nCanadian-incorporated company, Western Star Trucks Holdings Ltd., which in turn is controlled by a\nSingapore-incorporated company, Western Star International, which owns 42 per cent of Western Star\nHoldings.\n7.351 Canada notes that Japan has not adduced any evidence in the record to support its assertion\nthat the three companies at issue are “suppliers of wholesale trade services”. As Canada noted in its\nResponse of 25 June 1999 to the Panel’s Question 35, wholesalers purchase goods and resell them to\nretailers. A headnote to Division 6 of the CPC states that: “the principal services rendered by\nwholesalers and retailers may be characterized as reselling merchandise…” Manufacturers that\nimport vehicles but do not resell them to retailers are not “suppliers of wholesale trade services”.\n7.352 Eligible manufacturers that do import buses or SCVs are not necessarily “wholesale trade\nservice suppliers”. For example, they may import bus or SCV chassis (which are considered to be\nvehicles under the MVTO and the SROs) as inputs for finished vehicles of their own manufacture;\nthey may re-import vehicles of their own manufacture that have been exported for modification in\nother countries; or they may import vehicles as retailers (i.e. for direct sale to end-users). None of\nthese activities would constitute the supply of wholesale trade services.\n7.353 In its Response of 25 June 1999 to Japan’s Question 2(4), Canada stated only that the three\ncompanies in question, among others, “have imported vehicles other than automobiles under the\nMVTO or an SRO at least once in the last 10 years”. At paragraph 131 of its Second Written\nSubmission of 2 July 1999, Japan subsequently declared all of these companies to be “wholesale trade\nservice suppliers”. It has offered no evidence to substantiate this assertion.\n\n7. Questions and replies relating to claims under Article XVII of the GATS\n(a) Question 28 (services supplied through mode 1)\nThe EC quotes some examples of services potentially affected by the CVA, which can be supplied\nthrough mode 1 and which cannot be considered to be inherently disadvantaged due to their foreign\ncharacter. Could the EC and Japan please identify all services sectors affected by the C VA which\ncan be supplied through mode 1.\n(i) Reply from Japan\n7.354 Since the CVA applies to services in general and only the Government of Canada has full\ninformation on the types of services that are or could be included in the CVA, it is not possible for the\nGovernment of Japan to identify all service sectors affected by the CVA which can be supplied\nthrough mode 1. However, only one example of discrimination is sufficient to establish a violation of\nGATS Article XVII.\n7.355 Japan's initial argumentation lists three general categories of services that, on their face,\nwould qualify for inclusion in the CVA calculation. These services could be supplied through mode\n1. For example:\n• Repair and maintenance services – These services could be supplied through mode 1 in situations\nwhere machinery and/or equipment would be repaired with the technical advice rendered through\ntelecommunications means. Examples of such machinery and/or equipment include computer\nhardware, control boards, and moveable mechanical equipment and devices. Other examples\ninclude repair and maintenance services of high-tech machines supplied through\ntelecommunications means from outside of Canada.\n• Engineering Services – These services could be supplied through mode 1 in situations where\nexperimental work and/or product development work in relation with motor vehicle\nmanufacturing is conducted in the form of technical advice rendered through telecommunications\nmeans. Examples of such services include engine ering services related to the design of a motor\nvehicle assembly line supplied through telecommunications means from outside of Canada.\nEngineering services related to the operation of such line of production could also be supplied\nthrough telecommunications means from outside of Canada. As a result, engineering services are\nnot inherently domestic as incorrectly suggested by the Government of Canada. For example, it is\npossible for engineers outside of Canada to monitor the production process of facilities located in\nCanada.\n• General Services – Accounting, data processing, software implementation, and management\nconsulting are a few examples of general services that could be supplied through mode 1.\nExamples of such services include production data processing services rendered through\ntelecommunications means from outside of Canada, software that can be upgraded through\ntelecommunications means, book keeping that could be performed through telecommunications\nmeans, management, corporate governance and human resources studies that could be performed\nthrough telephone conference by foreign firms upon receipt of relevant information from the\nmanufacturer.\n\n(ii) Reply from the European Communities\n7.356 As a preliminary remark, it should be noted that the examples quoted by the European\nCommunities included not only examples of supply through mode 1 (\"cross-border\" supply), but also\nexamples of supply through mode 2 (\"consumption abroad\").\n7.357 The European Communities considers that in principle all the service sectors listed in its\ninitial argumentation (i.e. \"non-life insurance services\", \"repair services incidental to machinery and\nequipment\", \"engineering services\", \"professional services\", \"computer related services\", \"banking\nservices\", \"telecommunication services\", \"travel services\" and other \"business services\") can be\nsupplied through mode 1 and/or mode 2. Further, mo st of them, if not all, can be supplied through\nmode 1.\n7.358 As regards, \"non-life insurance services\" (CPC 8129) and \"engineering services\" (CPC 8672),\nCanada applies some limitations to the supply through mode 1. While for the reasons explained\nelsewhere, those limitations do not exclude a violation of Article XVII, their very existence\ndemonstrates that provision through mode 1 is not impossible.\n7.359 The same is true of many sub-sectors falling within the category of \"general and\nadministrative expenses\" such as \"accounting, auditing and book-keeping services\" (CPC 862 766);\n\"management consulting services\" (CPC 865 767); \"placement and supply services of personnel\"\n(CPC 872768); \"travel agencies and tour operator services\" (CPC 7471 769); \"telecommunication\nservices\" (sub-sectors a), b), c), d) e) and f)770); and \"banking services\"771.\n7.360 As regards the remaining services mentioned in the EC argument, it is not difficult to\nconceive examples of supply though mode 1:\n7.361 Foreign legal consultants (CPC 861*): the Canadian Association of Auto Pact beneficiaries\nrequests from a Brussels law firm with no commercial presence in Canada, to give a legal opinion on\nthe WTO compatibility of the Auto Pact. In response, that law firm sends by fax a memorandum\nsetting out the reasons why the Auto Pact violates the WTO Agreement.\n7.362 Taxation services (CPC 863*): Intermeccanica is considering to set up a subsidiary in the\nEU. It requests a tax consultant based in Brussels to advise on what member State would constitute\nthe best location from a tax point of view. Both the request and the answer are delivered through\ne-mail.\n7.363 Computer related services: GM Canada asks Siemens Germany to design the computer\nhardware and software for its new factory in Quebec (CPC 841 and 842*); GM Canada outsources\nthe processing of bills to a company in Bangalore (India) (CPC 843*); GM Canada subscribes to the\nelectronic version of the EC Official Journal published in Luxembourg (CPC 844*).\n7.364 Technical testing and analysis services (CPC 8676): the R & D department of GM Canada\nsends a sample of a new ecological fuel made from maple syrup to the Max Planck Institute in\nHamburg for further testing. The results are delivered by e-mail.\n\n766 GATS/SC/16, p. 18 (Exhibit EC-19).\n767 Ibid., p. 30.\n768 Ibid., p. 33.\n769 Ibid., p. 70.\n770 GATS/SC/16/Suppl.3, p.2 (Exhibit EC-19).\n771 GATS/SC/16/Suppl.4, p. 1 (Exhibit EC-19).\n\n7.365 Arguably, a few of the sub-sectors identified by the European Communities (e.g., \"repair\nservices incidental to machinery and equipment\" (CPC 8861 to 8866) and \"hotel and lodging\" (CPC\n641) and \"food and beverage serving\" (CPC 642/3) cannot be supplied through mode 1. Nevertheless,\nas evidenced by the examples provided by the Eu ropean Communities, all of them can be provided\nthough mode 2.\n(b) Question 30 (\"like\" service suppliers)\nCanada argues that there are no Canadian wholesale distribution service suppliers which are \"like\"\nJapanese suppliers. Could Canada please clarify on what grounds Intermeccanica should not be\nconsidered \"like\" other suppliers of wholesale trade services for automobiles. Could it also clarify on\nwhat grounds Canadian suppliers of wholesale trade services for buses and specialised commercial\nvehicles should not be considered \"like\" suppliers of wholesale trade services for automobiles.\n(i) Reply from Canada\n7.366 Canada notes that it is Japan that has the burden of proof in making its claim that\nIntermeccanica is a \"like\" service supplier. Japan has provided no evidence or explanation for this\nclaim. Japan has simply asserted that \"Intermeccanica is a Canadian service supplier within the\nmeaning of Article XVII of the GATS\". It neither substantiated that assertion nor addressed whether\nthe services Intermeccanica allegedly supplies are wholesale distribution trade services. In keeping\nwith the well-established principle, confirmed by the Appellate Body in United States – Measure\nAffecting Imports of Woven Wool Shirts and Blouses from India\n772, that the initial burden of proof lies\non the complaining party to establish a prima facie case, the onus is on Japan to explain why\nIntermeccanica should be considered \"like\" other suppliers of wholesale trade services for\nautomobiles. Japan has failed to meet its burden. The onus has not shifted to Canada because Japan\nhas not made out a prima facie case.\n7.367 In any event, there are two fundamental reasons why Intermeccanica is not \"like\" other\nsuppliers of wholesale trade services for automobiles. In the first place, it is not a supplier of\nwholesale trade services at all. As the European Communities acknowledged, it is a producer of\nautomobiles. It is not a wholesaler and is irrelevant for the purposes of a GATS analysis. It does not\nimport automobiles for resale or distribute them at all.\n7.368 Secondly, even if it were a wholesale distribution supplier, which it clearly is not, its size and\nsales volumes, and the vehicles it \"distributes\", are vastly different from those of any of the\ncommercial presences identified by Japan as wholesale distribution service suppliers. Intermeccanica\nhas 8 employees.\n773 It has never produced more than 22 vehicles in a year. The vehicles it does\nproduce are hand-built replicas of famous automobiles. It is simply preposterous to contend that it is\na potential competitor774 for the wholesale distribution business of companies like Toyota or Honda,\nwhich import tens of thousands of cars each year. Even if Intermeccanica were a wholesale\ndistribution service supplier, it would be utterly \"unlike\" the foreign service suppliers listed by Japan.\n(ii) Reply from Canada\n7.369 Regarding \"on what grounds Canadian suppliers of wholesale trade services for buses and\nspecialised commercial vehicles should not be considered 'like' suppliers of wholesale trade services\nfor automobiles\", again, the burden of proof lies with Japan to substantiate its allegations. Again, it\nhas failed to do so. In its initial arguments, Japan stated that:\n\n772 Appellate Body Report on US – Wool Shirts, supra note 283, p. 12 et seq.\n773 See Exhibit JPN-12.\n774 Even if such competition were feasible, which it is not due to the relationships between the parent\nmanufacturers and their Canadian subsidiaries.\n\n… Auto Pact Manufacturers of Canadian origin manufacture buses and commercial\nmotor vehicles, which Japanese automobile industries may export to meet demand if\nlatent demand exists. The Japanese motor vehicle industry may also offer wholesale\ntrade services for such buses and commercial vehicles if such demand exists. This\ndemonstrates that there are Canadian motor vehicle wholesale trade service suppliers\nin Canada.\n7.370 Of course, Japan has demonstrated nothing of the sort. It has simply asserted that there are\nCanadian manufacturers of buses and (specified) commercial vehicles. However, it has failed to\nadduce any evidence whatsoever that there are Canadian suppliers of wholesale trade services for\nbuses and specified commercial vehicles. The manufacture of a good and the wholesale distribution\nof that good are two distinct activities. The GATS arguments of both complainants with respect to the\neffect of duty-free treatment seek to erase this distinction. The Panel must not permit this.\n7.371 Whether Canadian suppliers of wholesale trade services for buses and specified commercial\nvehicles are \"like\" Japanese suppliers of wholesale trade services for automobiles should be\ndetermined on a case-by-case basis, just as it must with like goods.\n775 This determination is rendered\nimpossible (and moot) by Japan’s failure to identify any Canadian suppliers of wholesale trade\nservices for buses and specified commercial vehicles. Moreover, such \"likeness\" cannot be assumed.\nIn the passage quoted above from Japan’s arguments, Japan did not even claim that its automobile\nmanufacturers produce, or have the ability to produce, buses or specified commercial vehicles, let\nalone that they or their related commercial presences in Canada are capable of providing wholesale\ndistribution services for either class of vehicle.\n(c) Question 31 (commitments in Canada's GATS Schedule)\nThe entry B. \"wholesale trade services\" in Canada's schedule does not explicitly exclude wholesale\ntrade services for motor vehicles. On what grounds is Canada claiming that it is excluded?\n(i) Reply from Canada\n7.372 The entry B. \"Wholesale trade services\" at page 47 of Canada’s Schedule of Specific\nCommitment776 does explicitly exclude wholesale trade services for motor vehicles. It does this in the\nfirst column, which indicates the sector or sub-sector to which Canada’s commitments apply, by\nnoting at the bottom of that column that the commitments apply to the services in CPC 622 only.\nCPC 622 covers certain wholesale trade services excluding those for motor vehicles. CPC 622 falls\nunder Division 62 of the CPC which is entitled \"Commission Agents’ and Wholesale Trade Services,\nExcept of Motor Vehicles\". (emphasis added)\nCanada argues that the commitment under CPC 6111, listed under retailing services, does not extend\nto wholesale trade services. Why did Canada not indicate in this entry the exclusion of wholesale\ntrade of motor vehicles?\n(ii) Reply from Canada\n7.373 Canada did indicate the exclusion of wholesale trade services for motor vehicles in this entry\nby scheduling its commitment under \"Retailing Services\". Article XVII of the GATS extends only to\nspecific commitments. That is, it is binding on Members only in sectors and sub-sectors in respect of\n\n775 See the Report of the Working Party on Border Tax Adjustments , adopted 2 December 1970, BISD\n18S/97, para. 18 and the Appellate Body Report on Japan – Alcoholic Beverages, supra note 271, pp. 19-23.\n776 Canada's GATS Schedule, supra note 641.\n\nwhich they have made commitments. 777 By scheduling its CPC 6111 commitments in the \"Retailing\nServices\" sector only, Canada did not bind itself in respect of other sectors such as \"Wholesale trade\nservices\".\n(d) Question 32 (the CVA requirements and mode 4)\nCanada argues that most of the qualifying manufacturers exceed their CVA requirements on the basis\nof labour costs alone. Could Canada please provide factual information on those manufacturers who\ndo not meet the CVA requirements on the basis of labour costs alone. To what extent do labour costs\ninclude the purchase of services which could be supplied by natural persons under mode 4?\n(i) Reply from Canada\n7.374 All of the MVTO manufacturers meet their CVA requirements on the basis of labour costs\nalone, as do all SRO manufacturers operating unde r a base-year CVA requirement. Four SRO\nmanufacturers operating under 40 or 50 per cent CVA requirements have, in some recent years, not\nmet those requirements on the basis of labour costs alone.\n7.375 The cost of any service supplied by mode 4 is fully CVA-eligible. Services supplied by mode\n4 are not included in the heading for labour costs, but may be included under other CVA headings.\n(e) Question 34 (ownership and control)\n7.376 (See p. 317)\n(f) Question 35 (vertical integration)\nCanada argues that in the supply of wholesale trade services for automobiles there is no competition\nbetween wholesale trade service suppliers since wholesale suppliers are subordinated to\nmanufacturers and therefore the question of an effect on conditions of competition does not arise.\nDoes vertical integration between manufacturers and suppliers of wholesale trade services exclude\nany actual or potential competition at the wholesale trade level? To what extent does vertical\nintegration between manufacturers and suppliers of wholesale trade services also exclude competition\nwith respect to sales to retailers?\n(i) Reply from Japan\n7.377 As the Appellate Body Report for EC – Bananas III confirmed, even if wholesale trade\nservice suppliers are integrated with manufacturers, to the extent they are engaged in providing\nwholesale trade services, they are wholesale trade service suppliers.\n7.378 And vertical integration between manufacturers and suppliers of wholesale trade services\ndoes not exclude any actual and potential competition at the wholesale trade level, since an integrated\nmanufacturer, in its capacity as a wholesale trade service supplier, competes with other wholesale\ntrade service suppliers as to the sales of automobiles to retail service suppliers (dealers) and the\nmaintenance and expansion of their dealers networks. This type of competition is relevant to this\ndispute because dealers are consumers of the wholesale trade services provided by the service\nsuppliers in question. To the extent that manufacturers/wholesale trade service suppliers are to sell\nautomobiles to retail service suppliers (i.e. dealers), there is competition between those\nmanufacturers/wholesale trade service suppliers with respect to sales to retailers, notwithstanding\ntheir vertical integration.\n\n777 Panel Reports on EC – Bananas III, supra note 269, para. 7.305.\n\n7.379 Further, differences in the retail prices of automobiles caused by the Duty Waiver will\nnecessarily affect sales volumes and will lead to differences in profitability in supplying wholesale\ntrade services between manufacturers/wholesale service suppliers. This means that the conditions of\ncompetition between manufacturers/wholesale trade service suppliers for sales to retailers will be\nnegatively affected.\n(ii) Reply from the European Communities\n7.380 No. Although the major wholesale distributors of automobiles present in the Canadian\nmarket are vertically integrated with manufacturers 778, that does not exclude any actual or potential\ncompetition amongst them with respect to the purchase of motor vehicles from manufacturers for\nwholesale resale.\n7.381 In the first place, some foreign manufacturers of automobiles have little or no presence at all\nin the Canadian market (e.g., Renault, Peugeot-Citroen, Fiat, Mitsubishi, Proton or Tata).\n7.382 Those potential new entrants have basically three options in order to penetrate into the\nCanadian market: to set up their own distributors; to designate an independent distributor; or to\nappoint as a distributor an existing integrated distributor. The last option is not unusual, in particular\nwhen the model ranges of the two manufacturers concerned are complementary. By way of example,\nin the past Chrysler has imported and distributed in Canada motor vehicles manufactured by\nMitsubishi, an unrelated Japanese producer (see Exhibit EC-16, Table 1.7).\n7.383 Thus, while it may be true that, as argued by Canada, Honda Canada and Ford Canada would\nnot compete for the distribution in Canada of vehicles manufactured by Ford in the United States, they\nmay compete, not only with other integrated distributors but also with independent distributors, for\nthe distribution of vehicles produced by a fore ign manufacturer without a distribution network in\nCanada. The Tariff Exemption confers upon the beneficiaries a competitive advantage in that market\nbecause it lowers their import costs and, therefore, gives them the possibility to offer better\npurchasing terms to the foreign manufacturer.\n7.384 Secondly, even with respect to motor vehicl es of the parent company’s brand, vertically\nintegrated distributors may face competition from parallel importers.\nRegarding the question, \"To what extent does vertical integration between manufacturers and\nsuppliers of wholesale trade services also exclude competition with respect to sales to retailers?\":\n7.385 Canada’s argument is built on the wrong assumption that wholesale distribution services are\nprovided by the wholesalers exclusively to the manufacturers. The truth, however, is that wholesaler\ndistributors of automobiles act as intermediaries between the manufacturers and the retailers (and in\nsome cases final consumers, e.g., in the case of so-called \"fleet sales\" to big purchasers). They\nprovide a service to retailers as much as to the manufacturers. In fact, except in the rare cases where\nwholesale distributors of automobiles act as mere agents for the manufacturers, the \"buyer\" of the\nservice, i.e. the person who actually \"pays\" for the distribution service, is the retailer and not the\nmanufacturer.\n7.386 Quite clearly, vertical integration between manufacturers and wholesale distributors of\nautomobiles, even if it were complete, would not exclude per se competition among wholesale\ndistributors with respect to sales to retailers and final consumers. Vertical integration has the only\nconsequence that Honda Canada and Ford Canada cannot compete to resell the same automobiles to\nretailers. But it does not prevent them from comp eting in order to resell to dealers automobiles\n\n778 The affiliation of some distributors, such as Lada Canada Inc., is nevertheless unclear, as shown in\nTable 7.\n\nmanufactured by their respective parents which are directly competitive and substitutable with each\nother. In other words, the absence of intra-bra nd competition among wholesalers does not exclude\ninter-brand competition.\n(iii) Reply from Canada\n7.387 Canada notes that the arguments in question are found in its initial response on these points.\n7.388 It is not clear if the question refers to vertical integration in the motor vehicle industry only,\nor to vertical integration generally. In the motor vehicle industry, a combination of vertical\nintegration and exclusive distribution arrangements does exclude any actual or potential competition\nat the wholesale trade level. The same is not necessarily true of other industries. For example, it is\nnot the case in the bananas business, where even those companies that were vertically integrated had\nthe \"capability and opportunity to enter the wholesale service market\".\n779\n7.389 Contrary to what was implied by the European Communities, the Appellate Body’s findings\nin EC – Bananas III in respect of integrated wholesalers were specific to the facts of the case. The\nAppellate Body stated that: \"even if a company is vertically-integrated, … to the extent that it is also\nengaged in providing \"wholesale trade services\" and is therefore affected in that capacity by a\nparticular measure of a Member in its supply of those ‘wholesale trade services’, that company is a\nservice supplier within the scope of the GATS\".780 (emphasis added)\n7.390 The fact that a wholesale service supplier is integrated does not mean that it is necessarily\noutside the scope of the GATS, but nor does it mean that it necessarily falls within the scope of the\nGATS either. The determining factor is whether that service supplier is affected in its capacity as a\nservice supplier and in its supply of those services. The nature of the motor vehicle industry is such\nthat there is no competition among wholesale service suppliers in the supply of wholesale trade\nservices. Japan confirmed this in its arguments.\n[Regarding the question \" to what extent does vertical integration between manufacturers and\nsuppliers of wholesale trade services also exclude competition with respect to sales to retailers?\":]\n7.391 If the EC’s reference to retailers was meant to suggest that retailers could choose among\nwholesale service suppliers, the suggestion is wrong. Wholesaling by definition entails sales to\nretailers. Wholesalers purchase goods from manufacturers and resell them to retailers. A headnote to\nDivision 6 of the CPC states that: \" The principal services rendered by wholesalers and retailers may\nbe characterized as reselling merchandise, accompanied by a variety of related, subordinated services\n…\". ( emphasis added)\n7.392 \"Reselling\" necessarily implies that the reseller has purchased the good in the first place. It is\nuncertain to what extent the commercial presences of the motor vehicle manufacturers identified by\nthe complainants as \"wholesalers\" have purchased the vehicles from the manufacturers. If they have\nnot, they cannot be said to be wholesalers at all. The complainants have offered no evidence on this\npoint.\n7.393 Even assuming that these commercial presences are wholesalers, they do not compete for\nsales to retailers for the same reason that they do not compete to distribute the vehicles of particular\nmanufacturers. The so-called wholesalers have exclusive distribution arrangements with the\nmanufacturers. Accordingly, retailers of specific brands of vehicles cannot select among wholesale\nservice suppliers for the supply of those vehicles. Retail dealers of Honda automobiles cannot for\nexample, approach General Motors of Canada and ask General Motors to supply them with Hondas\n\n779 Panel Reports on EC – Bananas III, supra note 269, para. 7.320.\n780 Appellate Body Report on EC – Bananas III, supra note 49, para. 227.\n\nfrom the Honda Motor Company of Japan. Those retailers must rely on Honda Canada Inc. to provide\nthose vehicles.\n7.394 It is possible that the European Communities was suggesting that duty-free treatment may\ninfluence which brands of vehicles retailers choose to sell and that this consequentially influences\ntheir choice of service supplier. However, this simply underscores that what benefits from the duty-\nfree treatment is particular goods (the vehicles) and that there is no competition in the provision of\ndistribution services for those goods. To contend that the measure affects wholesale service suppliers\nthrough retailers implies that every measure affecting goods not only affects wholesale service\nsuppliers of those goods but also the retailers of the goods as well. No measures affecting goods\nwould not also \"affect\" services. The EC’s argument would obliterate the distinction among the three\ncategories of measures by the Appellate Body in EC – Bananas III.\n781\n(g) Question 59 (origin of wholesale trade service suppliers)\nCould Japan please clarify on what basis it has classified three suppliers of wholesale trade services\nfor buses and specified commercial vehicles as Canadian in Exhibit JPN-50.\nCould Japan please provide necessary material to support the Canadian origin of these suppliers.\n7.395 As for the nationality of the “juridical person”, Article XXVIII (m)(i) and (ii) and (n)(i) of\nthe GATS prescribe as follows:\n(m) “juridical person of another Member” means a juridical person which is either:\n(i) constituted or otherwise organi zed under the law of that other\nMember, and is engaged in substantive business operations in the\nterritory of that Member or any other Member; or\n(ii) in the case of the supply of a service through commercial presence,\nowned or controlled by:\nnatural persons of that Member; or\njuridical persons of that other Member identified under\nsubparagraph (i);\n(n) a juridical person is:\n(i) “owned” by persons of a Member if more than 50 per cent of the\nequity interest in it is beneficially owned by persons of that Member;\n…\n7.396 Based on the information provided by the Government of Canada in its response to\nQuestion (4) of the Government of Japan, the three suppliers of wholesale trade services classified as\nCanadian in Exhibit JPN-50, which are A. Girardin Inc., Les Enterprises Michel Corbeil Inc. and\nWestern Star Trucks Inc., have imported vehicles from other countries into Canada. Those companies\nprovide services through a commercial presence in Canada. If those companies are not owned or\ncontrolled by natural persons of a country other than Canada or juridical persons of countries other\nthan Canada identified under subparagraph (m)(i), those companies are not “juridical persons of\nanother Member”, and it follows that those companies are juridical persons of the Member (Canada).\n7.397 On the homepage of the Canadian Department of Industry (Industry Canada)\n(http://strategis.ic.gc.ca/), Industry Canada stated that “Both Thomas Built and Canadian Bluebird are\nAmerican-owned. A. Girardin and Michel Corbeil Enterprises Inc. are wholly-owned Canadian\ncompanies.” (See page 3 of attachment 1 to this response [assigned name: Exhibit JPN-51].)\n\n781 Ibid., para. 221.\n\nTherefore, Japan concluded that A. Girardin and Michel Corbeil Enterprises Inc. are service suppliers\nof Canadian origin.\n7.398 On the homepage of Industry Canada ( http://strategis.ic.gc.ca/), it is also indicated that\nownership of Les Enterprises Michel Corbeil Inc. (see attachment 2 [assigned name: Exhibit JPN-\n51]) and Michel Corbeil Enterprises Inc. (see attachment 3 [assigned name: Exhibit JPN-51]) is\nCanadian. This homepage also indicates that the ownership of Western Star Trucks Inc. is Canadian\n(see attachment 1 [assigned name: Exhibit JPN-51]). Based on the information from Industry Canada\non the ownership of those three companies, it is reasonable to presume that more than 50 per cent of\ntheir equity interests is owned by Canadians.\n7.399 Please see attachments 1-3 [assigned name: Exhibit JPN-51], which substantiates Japan's\nabove conclusion.\n(h) Question 60 (origin of wholesale trade service suppliers)\nCould Canada please confirm that the three suppliers of wholesale trade services for buses and\nspecified commercial vehicles, listed as Canadian in Exhibit JPN-50, are of Canadian origin.\n7.400 The three companies listed as Canadian in Exhibit JPN-50 are A.Girardin Inc., Les\nEntreprises Michel Corbeil Inc., and Western Star Trucks Inc. Canada has the following information\nabout their “origin”: A.Girardin Inc. and Les Entreprises Michel Corbeil Inc. are both privately-\nowned companies incorporated in Canada. To Ca nada’s knowledge, both companies are Canadian-\nowned. Western Star Trucks Inc. is a company incorporated in Canada. It is wholly-owned by a\nCanadian-incorporated company, Western Star Trucks Holdings Ltd., which in turn is controlled by a\nSingapore-incorporated company, Western Star International, which owns 42 per cent of Western Star\nHoldings.\n7.401 Canada notes that Japan has not adduced any evidence in the record to support its assertion\nthat the three companies at issue are “suppliers of wholesale trade services”. As Canada noted in its\nResponse of 25 June 1999 to the Panel’s Question 35, wholesalers purchase goods and resell them to\nretailers. A headnote to Division 6 of the CPC states that: “the principal services rendered by\nwholesalers and retailers may be characterized as reselling merchandise…” Manufacturers that\nimport vehicles but do not resell them to retailers are not “suppliers of wholesale trade services”.\n7.402 Eligible manufacturers that do import buses or SCVs are not necessarily “wholesale trade\nservice suppliers”. For example, they may import bus or SCV chassis (which are considered to be\nvehicles under the MVTO and the SROs) as inputs for finished vehicles of their own manufacture;\nthey may re-import vehicles of their own manufacture that have been exported for modification in\nother countries; or they may import vehicles as retailers (i.e. for direct sale to end-users). None of\nthese activities would constitute the supply of wholesale trade services.\n7.403 In its Response of 25 June 1999 to Japan’s Question 2(4), Canada stated only that the three\ncompanies in question, among others, “have imported vehicles other than automobiles under the\nMVTO or an SRO at least once in the last 10 years”. At paragraph 131 of its Second Written\nSubmission of 2 July 1999, Japan subsequently declared all of these companies to be “wholesale trade\nservice suppliers”. It has offered no evidence to substantiate this assertion.\n\n8. Questions and replies relating to third-party arguments\n(a) Question 1 from the European Communities to the United States (the measures at\nissue and GATS Article V)\nThe United States have suggested that even if the measure in dispute were found to be inconsistent\nwith GATS Article II, they would nevertheless be covered by the exception conferred by GATS\nArticle V:1.\nThat position appears to be based on a misunderstanding of the nature of the measures in dispute.\nThose measures are not part of, nor required by NAFTA. Some of the measures implement the\nprovisions of the 1965 Auto Pact between the USA and Canada (namely, the tariff exemption for\nimporting vehicles from the United States granted to a number of manufacturers already established\nin Canada in 1956 under the MVTO 1998). The remaining measures are purely unilateral ones, not\nrequired either by NAFTA or by the Auto Pact ( namely, the tariff exemption granted to the same\nmanufacturers under the MVTO 1998 for importing vehicles from third countries, including Mexico,\nas well as the so-called Special Remission Orders issued to manufacturers not established in Canada\nin 1965).\n(a) Is it the view of the United States that the Auto Pact qualifies as an agreement of the\ntype mentioned in Article V:1 of GATS?\n(b) Does the United States take the view that Article V:1 of GATS provides an exception\nalso with respect to the adoption of purely unilateral measures that are not part of, nor required by an\nagreement of the type mentioned in that provision?\n(i) Reply from the United States\n7.404 (a) No.\n(b) Article V:1 may apply to such measures in some cases depending, inter alia, on their\nnature.\n(b) Question 2 from the European Communities to the United States (the measures at issue\nand GATS Article V)\nIt is generally admitted that Panels cannot take into account affirmative defenses unless invoked by\none of the main parties to a dispute.\n(a) Does the United States take the view that the panel could reject a claim on the basis\nof Article V:1 GATS, even if that provision was not invoked by Canada?\n(b) Who bears the burden of proving that an agreement fulfils the conditions of\nArticle V:1?\n(i) Reply from the United States\n7.405 The United States agrees with the Europ ean Communities that a panel cannot take into\naccount affirmative defenses unless such defenses are invoked by one of the parties to the dispute.\nThe panel in United States – Customs User Fee arrived at a similar conclusion, noting \"GATT\npractice has been for panels to make findings only on those issues raised by the parties to the\n\ndispute.\"782 This practice is reflected in Article 7.2 of the WTO Understanding on Rules and\nProcedures Governing the Settlement of Disputes.\n(c) Question 3 from the European Communities to the United States (the measures at issue\nand GATT Article XXIV)\nThe United States has indicated that even if the measures in dispute were found to be inconsistent with\nGATT Article I in that de facto they provide more favourable treatment to goods originating in\nMexico and the USA, such violation would nevertheless be covered by GATT Article XXIV.\nYet in 1996 the United States requested a renewal of the 1965 waiver for the Auto Pact,\nnotwithstanding the fact that in the meantime th e United States had concluded the CUSFTA and the\nNAFTA with Canada, both of which purport to establish a free-trade area. Why did the United States\nconsider it necessary to make such a request?\n(i) Reply from the United States\n7.406 In view of the fact the European Communities has noted that \"[t]he Auto Pact is an\nasymmetrical agreement that imposes different obligations on each of the two signatories, the US\nwaiver does not appear to be relevant in a case involving Canadian measures.\n(d) Question 4 from the European Communities to the United States (the measures at issue\nand GATT Article XXIV and GATS Article V)\nDo Article XXIV GATT and Article V:1 GATS provide an exception only with respect to the claims\nsubmitted by the EC under GATT Article I and GATS Article II respectively, or also with respect to all\nthe other claims submitted by the EC under the GATT, the TRIMs Agreemen t, the SCM Agreement\nand the GATS?\n(i) Reply from the United States\n7.407 As a third party in these proceedings the United States limited its presentation to a few points\nthat may be of relevance to the Panel in examining this dispute. The questions raised by the European\nCommunities in question 4 range beyond the scope of the US presentation, and the United States is\nnot prepared to provide views on these matters at this time.\n(e) Question 5 from the European Communities to the United States (freezing of SRO list of\nbeneficiaries)\nThe EC has alleged, and Canada has not disput ed, that Article 1200.1 of the CUSFTA, which \"froze\"\nthe list of beneficiaries of the Auto Pact and of the Special Remission Orders as of 1989, was inserted\nat the request of the United States.\n(a) Why did the United States demand the inclusion of that provision?\n(b) How did Article 1200.1 of the CUSFTA cont ribute to the liberalisation of trade in\nmotor vehicles and distribution services for automobiles between the United States and Canada, as\ncompared to the pre-existing situation?\n\n782 Panel Report on United States – Customs User Fee , adopted on 2 February 1998, BISD 35S/290,\npara. 124.\n\n(i) Reply from the United States\n7.408 For purposes of clarification, the United States notes that the European Communities appears\nto have erroneously cited to Article 1200.1 of the US-Canada Free-Trade Agreement; the United\nStates believes the relevant provision is Annex 1002.1 of that agreement. As a third party in these\nproceedings the United States limited its presentation to a few points that may be of relevance to the\npanel in examining this dispute. The questions raised by the European Communities in question 5\nrange beyond the scope of the US presentation, and the United States is not prepared to provide views\non these matters at this time.\nVIII. THIRD-PARTY ARGUMENTS\nA. I\nNDIA'S ARGUMENTS AS A THIRD PARTY\n8.1 As a third party, India argues as follows:\n8.2 The complaining parties, i.e. Japan and the European Communities, have argued that the\nTariff exemption and CVA requirements granted, pursuant to the signing of the 1965 Agreement\nbetween USA and Canada on the import of automotive products (hereinafter referred to as the 'Auto\nPact') are inconsistent with various provisions of the WTO Agreement, including the MFN obligation\nset out in Article I of GATT; the national treatment obligation set out in Article III of GATT; the\nprovisions of the TRIMs Agreement and the provisions of the Subsidies and Countervailing Measures\nAgreement.\n8.3 These are important issues and their legal status and consistency with WTO provisions has to\nbe examined very carefully. However, as a third party, India will not be addressing all of the factual\nand legal issues raised in this proceeding. Instead, India will be presenting its views on two issues –\nnamely, Article I and III of GATT, which in India's view are the cornerstone of the multilateral\ntrading system, the primacy of which India strongly believes in. If India does not make comments on\na particular factual or legal claim, it does not mean that India either agrees or disagrees with the\nposition taken by any of the parties on these issues.\n8.4 It is India's view that the Panel will need to determine whether the measures under dispute\nafford \"less favourable treatment\" to imported products than to domestic products, that is whether the\nmeasure is consistent with the provisions of Article III of GATT, or not. It is our view that a mere\ncontending that certain provisions of the Auto Pact give preference, all other conditions being equal,\nto Canadian goods over like imported goods, is not sufficient. It must be established that the\nprovisions specifically grant certain privileges to the domestic industry, which are otherwise not\navailable to foreign industry, irrespective of the conditions that the latter may satisfy. Canada is not a\ndeveloping country. Otherwise, India would have also suggested for the Panel to go beyond the legal\nframework and also examine the basic objectives of the domestic law, since developing countries\nhave to at times provide certain incentives to encourage domestic industry. Such measures are\nusually not inconsistent with the provisions of Article III of GATT, even though they may at times\nappear to be so.\n8.5 Similarly, the Panel would also need to determine whether the 'Auto Pact' is consistent with\nthe provisions of Article I – that is, whether or not it fulfils the MFN obligation. The important issue\nin India's view is to see whether the Auto Pact provides any advantage to imports of automobiles\noriginating in the US and Mexico, vis-à-vis imports of like products originating from other Member\ncountries. Even though on its face value the tariff exemption provided by the Auto Pact appears to be\nnon-discriminatory, the Panel will need to examine whether the beneficiaries of this exemption have\n\nlargely been companies based in the US and Mexico, or whether companies based outside the\nNAFTA parties have also been able to benefit, from what Canada terms as an instrument which has\nhelped transformed Canada \"from a highly protective automotive market into one of the most open\nmarkets in the world for automotive products and investment, both as a matter of law and in practice\".\nWhile regional trading arrangements are important building blocks of the multilateral trading system,\nthe benefit that they give to Members which are parties to the arrangement cannot under any\ncircumstance be at the cost of the rights and benefits of Members which are not parties to the RTA.\nB. K\nOREA'S ARGUMENTS AS A THIRD PARTY\n8.6 As a third party, Korea argues as follows:\n1. Introduction\n8.7 The Government of the Republic of Korea wishes to note that, as a manufacturer and exporter\nof motor vehicles and components, as well as a provider of services related thereto, it has a substantial\ntrade interest in the matters raised in the presen t dispute. In this regard, the Korean Government\nemphasizes that it shares the view advanced by the complainants in this proceeding that the measures\nunder dispute783 with respect to the selective and discriminatory removal of customs duties on the\nimportation of certain motor vehicles involve numerous inconsistencies with Canada's obligations\nunder the GATT 1994, the TRIMS Agreement, the SCM Agreement and the GATS, respectively. In\nthis respect, Korea wishes to clarify its position with respect to some of the main legal issues relevant\nto this dispute.\n2. GATT 1994\n(a) Article I:1 GATT 1994\n8.8 With regard to Article I:1 of the GATT 1994, Korea considers that the Tariff Exemption\napplied by Canada is clearly inconsistent with this provision in that Canada has failed to accord\n\"immediately and unconditionally\" the removal of customs duties with respect to like products\noriginating in or destined for the territories of all other WTO Members. Article I:1 embodies a very\nbroadly worded and unconditional obligation to accord Most-Favored-Nation Treatment with respect\nto trade in goods. Indeed, while MFN-type treaty clauses have existed in treaties for centuries prior to\nthe entry into force of the GATT 1994 and the WTO Agreement, the precise obligations under such\nclauses have not always been as broadly formulated as under Article I:1 of the GATT 1994.\n784 Against\nthis background, the original drafters of Article I:1 of the GATT clearly intended to emphasize the\nwide application and unconditional nature of the obligations specified therein with respect to MFN\ntreatment for the purposes of trade in goods. Specifically, in the present case, if Canada affords, with\nrespect to \"customs duties,\" any \"advantage\" in connection with the importation of motor vehicles\noriginating in any other country, its obligation under Article I:1 of the GATT 1994 is to \"immediately\nand unconditionally\" accord the same treatment with respect to like products originating in the\nterritories of all other WTO Members.\n\n783 The tariff exemption selectively applicable to certain imports of motor vehicles, including the\n\"ratio\" requirements as well as the CVA requirements contained in the Auto Pact, as supplemented by the letters\nof undertaking, and in the MVTO 1998; and the tariff exemptions applicable to the importation of motor\nvehicles, including the \"ratio\" and CVA requirements attached thereto, provided for in the SROs.\n784 For an overview of the historical meaning applie d to MFN-type clauses, please refer to The World\nTrading System: Law and Policy of International Economic Relations, John H. Jackson.\n\n(b) The Tariff Exemption relates to a customs duty within the terms of Article I:1 of the\nGATT 1994\n8.9 The Tariff Exemption clearly relates to a customs duty within the meaning of Article I:1, as it\nwaives the otherwise applicable normal MFN duty applied by Canada.\n(c) The Tariff Exemption is an advantage within the meaning of Article I:1 of the GATT\n1994\n8.10 Although these issues have been dealt with at some length in the complainants' arguments,\nKorea notes that the Tariff Exemption clearly c onstitutes an \"advantage\" within the meaning of\nArticle I:1 of the GATT 1994 relating to customs duties because certain imported motor vehicles are\nexempt from otherwise applicable customs duties. The exemption from the outset was limited to the\nimports of the original qualifying Auto Pact manufacturers and imports made pursuant to company-\nspecific SROs, thereby conferring an advantage over non-beneficiaries.\n(d) The products are \"like\" products\n8.11 As the Tariff Exemption is designed to cover all motor vehicles (with some minor\nexceptions), and does not involve criteria based on the characteristics of those products, it is clear that\nthe motor vehicles for which the duty waiver applies and other imported motor vehicles which cannot\nbenefit from the duty waiver are ‘like products’.\n(e) The advantage is not accorded immediat ely and unconditionally to like products\noriginating in all WTO Members\n8.12 In the view of Korea, the clear and unqualified obligation under Article I:1 of the GATT 1994\nis to accord \"immediately and unconditionally\" any advantage to like products originating in the\nterritories of all WTO Members. Under the Tariff Exemption, however, the advantages with respect to\nthe waiver of customs duties are limited to the beneficiaries under the Auto Pact. In addition, the\nadvantage provided under the Tariff Exemption is subject to several conditions relating, inter alia, to\nthe CVA and ratio requirements. These conditions imposed do not relate to the imported products\nthemselves. In this respect, in Indonesia – Autos, the panel clearly stated that under Article I:1 of the\nGATT 1994, any advantage \"cannot be made conditional on any criteria not related to the imported\nproduct itself.\"\n(f) The advantages accorded to products orig inating in particular WTO Members has not\nbeen accorded to like products originating in the territories of all WTO Members\n8.13 Under the terms of the Auto Pact and subsequent instruments, the beneficiaries under the\nAuto Pact are restricted to a closed group. The Auto Pact beneficiaries are, in principle, allowed to\nimport motor vehicles from any national origin. However, as was detailed in Japan's argument, in\nreality these manufacturers have tended to choose imports from a limited number of countries, based\non previous commercial links and other factors. The majority of vehicles entitled to the Tariff\nExemption are of particular national origin. Furthermore, due to the fact that the list of eligible\nimporters has been frozen since 1 January 1989, it is clear that in practice, the duty waiver advantage\nhas not been accorded to like products originating in all WTO Members and importers with capital or\ncommercial links with producers in other WTO Member countries, such as Korea, have not been\naccorded the same advantage.\n8.14 The advantage of the Duty Waiver is clearly linked in law and fact to production of Canadian\norigin motor vehicles by the importer in accordance with the Requirements of MVTO 1998.\nTherefore, contrary to Canada’s allegations, the advantage discriminates based on the origin of the\n\nproducts because a producer/importer of Korean origin motor vehicles cannot obtain the benefit of the\nDuty Waiver which is only granted to producers/importers of Canadian origin cars. Thus, Canada's\nallegation that \"Which Member's products benefit at any given time depends entirely on commercial\ndecisions made by the manufacturers\" as stated in its argument is groundless.\n8.15 Canada argues that the preponderance of vehicles imported from the United States and\nMexico is irrelevant because any advantage they may receive is due to Canada's free-trade agreement\nwith these countries. Finally, Korea wishes to emphasize that, contrary to Canada's implicit assertion,\nthere is no decision or finding in any WTO bodies that NAFTA is consistent with Article XXIV of the\nGATT 1994. Moreover, contrary to Canada's unsupported allegation, GATT 1994 does not explicitly\nstate that the formation of a free-trade agreement consistent with Article XXIV (assuming, arguendo,\nthat this were to be the case) of the GATT 1994 provides \"[…] an exception to Article I:1, de jure and\nde facto.\"\nG. Article III:4 of the GATT 1994\n8.16 With respect to Article III:4 of the GATT 1994, Korea considers that the Canadian\nrequirements relating to minimum CVA targets, one of the conditions upon which the Tariff\nExemption is based, affords \"less favorable treatment\" within the meaning of Article III:4 with respect\nto \"laws, regulations and requirements affecting\" the internal sale, offering for sale, purchase,\ntransportation or use of imported parts and materials which are used in the manufacture of motor\nvehicles, or parts of motor vehicles, than the treatment afforded to like domestic goods.\n8.17 Korea notes that, with respect to the CVA requirements expressly contained in the MVTO\n1998 and the SROs, such instruments are considered statutory instruments under the Canadian\nStatutory Instruments Act.\n785 As such, they clearly constitute \"laws, regulations or requirements\"\nwithin the meaning of Article III:4. With regard to the CVA requirements set forth in the letters of\nundertaking signed by the Auto Pact manufacturers, Korea considers that the substantive undertakings\ncontained in these letters and the circumstances under which these commitments were undertaken\nmean that they fall within the definition of \"requirements\" under Article III:4 and that, therefore,\nArticle III:4 is equally applicable with respect to the CVA commitments contained therein. In this\nrespect, the inclusion of the word \"requirements\" in addition to \"laws [and] regulations\" in\nArticle III:4 suggests that acts involving private parties which might not have immediate or apparent\nlegal consequences in the formalistic sense were nonetheless intended to fall within the scope of this\nprovision if the surrounding circumstances reveal that the parties in fact considered themselves bound\nto the relevant rule or requirement. This view was confirmed in Japan – Film\n786in which it was stated\nthat an action taken by private parties may be deemed governmental if there is \"sufficient government\ninvolvement with it.\"\n8.18 In this respect, the letters of undertaking were signed by the Auto Pact beneficiaries as a\ncondition by the Canadian government for its agreeing to conclude the Auto Pact. As has been noted\nby the European Communities, the fact that non-compliance has remained exceptional despite the lack\nof articulated sanctions for failing to meet the CVA requirements, in addition to the establishment of\ncertain procedures to monitor compliance of the beneficiaries, indicates that the letters of undertaking\nare not considered voluntary by either party and as such properly fall within the definition of\n\"requirements\" under Article III:4.\n8.19 In the view of Korea, the CVA requirements as described above \"affect\" the internal sale,\noffering for sale etc. with respect to the relevant parts, materials and equipment. In this regard, Korea\nnotes that the term \"affect\" as used in Article III:4 is intended to have a broad meaning, which was\n\n785Statutory Instruments Act, R.S.C. 1985, c.S-22, s.2.\n786 Panel Report on Japan – Film, supra note 93, para. 10.56.\n\nconfirmed in Italian Agricultural Machinery 787 in which the Panel concluded that the term\nencompassed \"laws or regulations which might adversely modify the conditions of competition\nbetween the domestic and imported products on the internal market.\" In this regard, the CVA\nrequirements clearly adversely affect conditions of competition on the market as a constant incentive\nexists to use domestic over imported goods in order to reach the required CVA levels and thus benefit\nfrom the Tariff Exemption. Finally, Korea considers that the CVA requirements entail a less favorable\ntreatment for imported goods within the meaning of Article III:4 in that, as the Tariff Exemption is\ndirectly linked to the attainment of certain CVA targets, imported goods are placed at a competitive\ndisadvantage. Canada’s allegations that Canadian-produced products play no role in determining\nwhether an automobile manufacturer meets its CVA levels is clearly contradicted by the MTVO 1998\nitself which lists the cost of parts produced in Canada (and the cost of materials to the extent that they\nare of Canadian origin) as one of the elements included in the definition of CVA.\n3. TRIMS Agreement\n(a) The applicability of the TRIMs Agreement to the present dispute\n8.20 With respect to the TRIMs Agreement, Korea notes that Article 2.1 of this Agreement\nprovides, in relevant part, that:\n\"[N]o Member shall apply any TRIM that is inconsistent with the provisions of\nArticle III […] of the GATT.\"\n8.21 With respect to Article 2.1, it was stated in Indonesia – Autos\n788 that:\n\"By its terms, Article 2.1 requires two elem ents to be shown to establish a violation\nthereof: first, the existence of a TRIM; second, that TRIM is inconsistent with\nArticle III […] of GATT.\"\n8.22 In this regard, Korea believes that the CVA requirements as well as the ratio requirements\nwhich are conditions that must be met for the application of the Tariff Exemption, clearly fall within\nthe ordinary meaning of \"investment measures\" and are \"trade-related.\" In addition, the requirements\nas applied are inconsistent with Article III:4 of the GATT 1994. In particular, the requirements fall\nclearly within paragraph 1(a) of the illustrative list of TRIMs which are inconsistent with Article III:4\nof the GATT 1994 contained in the Annex to the TRIMs Agreement.\n(b) The CVA requirements and ratio requirements are \"investment measures\"\n8.23 The Tariff Exemption is conditioned upon, inter alia , meeting the relevant CVA and ratio\nrequirements.\n789 In this respect, the requirements expressly seek to influence the behaviour of the\nbeneficiaries with regard to, among others, their maintenance of certain levels of production in\nCanada as well as choices with respect to sources of supply as between Canadian and non-Canadian\nsources. Thus, the requirements are directly linked to encouraging patterns of investment in the\nCanadian automotive industry which are in line with the Canadian Governments policy objectives in\nthis sector. The CVA and ratio requirements therefore naturally fall within the scope of any\nreasonable interpretation of the term \"investment measures.\"\n8.24 In Indonesia – Autos , the Panel found that certain Indonesian measures with respect to the\nautomobile industry conditioned various customs and tax benefits upon the compliance with particular\nlocal content requirements. The Panel found that the Indonesian measures were:\n\n787 Panel Report on Italian Agricultural Machinery, supra note 390, 64, para. 12.\n788 Panel Report on Indonesia – Autos, supra note 270, para. 14.64.\n789 As applicable under the Auto Pact, Letters of Undertaking, the MVTO 1998 and the SROs.\n\n\"[…] aimed at encouraging the development of local manufacturing capability for\nfinished motor vehicles and parts and components in Indonesia. Inherent to this\nobjective is that these measures necessarily have a significant impact on investment\nin these sectors. For this reason we consider that these measures fall within any\nreasonable interpretation of the term “investment measures”.\n8.25 In this respect, by conditioning the granting of the Tariff Exemption on the maintenance of\nspecified levels of domestic content as well as defined ratios of Canadian production to sales in\nCanada, these requirements certainly involve a \"significant impact on investments.\" The requirements\ntherefore fall plainly within the definition of investment measures for the purposes of the TRIMs\nAgreement.\n(c) The CVA and ratio requirements are \"trade-related\"\n8.26 In Indonesia – Autos the Panel noted that local content requirements are necessarily trade-\nrelated \"[…] because such requirements, by definition, always favor the use of domestic products over\nimported products, and therefore affect trade.\" The CVA requirements, insofar as they are obligatory\nin order to obtain the Tariff Exemption, constitute local content requirements and hence will \"always\"\naffect trade.\n8.27 The ratio requirements are also clearly trade-related or \"related to trade in goods\" as is\nspecified in Article 1 of the TRIMs Agreement. The ratio requirement obliges a beneficiary to\nmaintain a specified proportion between the sales value of each category of vehicle sold in Canada\nand the sales value of the motor vehicles of that category manufactured in Canada and therefore is\ndirectly related to and affects the conditions of trade with respect to those goods. Canada appears to\ntake the position that because the ratio requirements are mostly complied with, this fact alone\nsomehow means that the measures cannot be trade-related. This assertion is clearly baseless. The fact\nthat particular manufacturers are, at a given time, complying with the ratio requirements clearly does\nnot operate to alter the determination as to whether the measures which include the ratio requirements\nare themselves trade-related.\n(d) The CVA and ratio requirements fall under the Illustrative List of prohibited TRIMs\n8.28 Paragraph 1 of the Illustrative List of prohibited TRIMs provides, in relevant part, that:\n\"TRIMs that are inconsistent with the obligation of national treatment provided for in\nparagraph 4 of Article III of GATT include those [with which compliance is\nnecessary] to obtain an advantage, and which require:\n(a) the purchase or use by an enterprise of products of domestic origin or from any\ndomestic source, whether specified in terms of particular products, in terms of\nvolume or value of products, or in terms of a proportion of volume or value of its\nlocal production; or\n(b) that an enterprise purchases or use of imported products be limited to an amount\nrelated to the volume or value of local products that it exports.\"\n8.29 As noted above, the CVA requirements are TRIMs which must be complied with in order to\nobtain an \"advantage\" within the meaning of paragraph 1, which, in this context, consists of the Tariff\nExemption. In addition, the CVA requirements clearly require the \"purchase or use […] of products of\ndomestic origin or from any domestic source, […] in terms of a proportion of volume or value of its\nlocal production.\" Under the MVTO 1998, for example, the calculation of CVA, which is required in\norder to obtain the Tariff Exemption, includes, inter alia, \"the cost of parts produced in Canada, and\nthe cost of materials to the extent that they are of Canadian origin.\" (emphasis added).\n\n8.30 Given that, in many, if not most, circumstances, the required level of CVA cannot be attained\nwithout resorting to the purchase of parts produced in Canada or materials of Canadian origin, the\nCVA requirements therefore effectively impose an obligation to purchase or use products of domestic\norigin or from a domestic source in order to qualify for the Tariff Exemption and therefore fall within\nthe scope of paragraph 1(a) of the Annex.\n8.31 In addition, the ratio requirements fall within the scope of paragraph 1(b). For example, as has\nbeen noted by the European Communities, in those cases where the ratio requirement is 100 to 100, if\na beneficiary sells all its production in Canada, the consequence of this would be that such beneficiary\ncould not sell any motor vehicles imported under the Tariff Exemption because this would result in a\nproduction-to-sales ratio of less than 100 to 100. Therefore, for the purposes of obtaining the Tariff\nExemption, the beneficiaries’ purchase of imported products is limited to an amount which is\n\"related\" to the value of local products which it exports within the meaning of paragraph 1(b). Canada\nitself notes that if the ratio requirements are not complied with \"[…] a manufacturer may have to pay\nduty on some of those vehicles.\" Canada asserts, however, that this does not constitute a limit on the\npurchase or use of imported products. This reasoning completely ignores the fact that it is sufficient\nfor the purposes of item 1 of the illustrative li st that compliance with the ratio requirements is\nnecessary to obtain an advantage, which in this case consists of the Tariff Exemption. It is not\nnecessary to demonstrate that the ratio requirem ents must be complied with in order to import\nvehicles at all.\n8.32 In addition, Korea notes that the use of the words \"related to\" in paragraph 1(b) suggests that\ninvestment measures falling within this provision do not have to expressly stipulate that imports are\nlimited in relation to the value of local products exported by the beneficiary. Rather, it is sufficient\nthat the circumstances of the operation of the measure reveal that there are actual or potential\nlimitations on the purchase or use of imported products, and that there is some logical relation or\nconnection between this limitation and the level of local products exported.\n4. SCM Agreement\n(a) Applicability of the SCM Agreement to the present dispute\n8.33 With respect to the SCM Agreement, Korea cons iders that the Tariff Exemption constitutes a\ncountervailable subsidy within the meaning of Ar ticles 1 and 2 of the SCM Agreement. Moreover,\nKorea believes that this subsidy falls within the scope of prohibited subsidies within the meaning of\nArticle 3.1(a) and 3.1(b).\n(b) The Tariff Exemption constitutes a countervailable subsidy within the meaning of\nArticles 1 and 2 of the SCM Agreement\n8.34 Article 1.1 of the SCM Agreement provides, in relevant part, that:\n\"[A] subsidy shall be deemed to exist if:\n(a)(1) there is a financial contribution by a government […] i.e. where:\n…\n(ii) government revenue that is otherwise due is foregone or not collected (e.g., fiscal\nincentives such as tax credits);\n…\nand\n\n(b) a benefit is thereby conferred.\"\n8.35 In this regard, Korea notes that customs duties clearly constitute a source of \"government\nrevenue.\" Moreover, the requirement to pay customs duties upon imports of motor vehicles is\ngenerally applicable and the waiver of such customs duties operates by way of exception. Thus the\nordinarily applicable customs duties constitute government revenue \"that is otherwise due,\" and,\nwhere the Exemption operates, this revenue is \"foregone or not collected\" within the meaning of\nArticle 1.1(a)(1)(ii). Finally, the Tariff Exemption clearly provides a \"benefit\" within the meaning of\nArticle 1.1(b). As was noted in Canada – Aircraft\n790 \"[…] the ordinary meaning of 'benefit' clearly\nencompasses some form of advantage.\" The Tariff Exemption clearly provides an advantage in that\nonly a limited number of beneficiaries are exempted from payment of the customs duties on imports\nwhile the generally applicable customs duties continue to apply with respect to other importers.\nC. The Tariff Exemption constitutes a prohibited subsidy within the meaning of Article 3.1(a)\nand 3.1(b) of the SCM Agreement\n8.36 Article 3 of the SCM Agreement provides, in relevant part, that:\n\"[T]he following subsidies, within the meaning of Article 1, shall be prohibited:\n(a) subsidies contingent in law or in fact, whether solely or as one of several conditions,\nupon export performance […]\n(b) subsidies contingent, whether solely or as one of several conditions, upon the use of\ndomestic over imported goods.\n8.37 In the view of Korea, the CVA requirements, which form part of the conditions for the\napplication of the Tariff Exemption, fall within the scope of Article 3.1(b). For the purposes of\ncalculating CVA, the MVTO 1998 provides that the relevant costs shall include \"the cost of parts\nproduced in Canada, and the cost of materials to the extent that they are of Canadian origin.\"\nTherefore, a component in reaching the required levels of CVA depends upon the use of the use of\ndomestic over imported goods. The attainment of the required amounts of CVA is an express\ncondition for the availability of the Tariff Exemption and the cost of Canadian parts and materials\nconstitute a de jure component in reaching these amounts.\n8.38 In addition, Korea considers that the ratio requirements, the fulfilment of which are conditions\nfor the availability of the Tariff Exemption, fall within the scope of Article 3.1(a) in that they are\n\"contingent\" upon \"export performance.\" As noted in the EC's argument, where the ratio requirement\nimposed on the beneficiary is 100 to 100, the possibility of making any imports under the Tariff\nExemption, and thus the ability to obtain any subsidy, will directly depend on, and therefore be\n\"contingent\" upon whether the beneficiary exports any of its motor vehicles manufactured in Canada.\nIf the beneficiary exports no such vehicles it cannot make any imports under the Tariff Exemption\nwithout falling below the required Ratio. In addition, in other cases where the relevant Ratio is lower\nthan 100 to 100, the value of the imports which can be made under the Duty Exemption is still\ndirectly related (and therefore contingent) upon the value of vehicles manufactured in Canada which\nare exported by the beneficiary.\n8.39 Thus, Canada's allegation that \"[I]t is abundantly clear that under the Canadian measures, the\nbenefit of the duty-free treatment is contingent upon import performance, not export performance.\" as\nstated in its argument is not true.\n\n790 Panel Report on Canada – Aircraft, supra note 495.\n\n5. GATS\n(a) Article II GATS\n8.40 With regard to Article II of the GATS, Korea considers that the Tariff Exemption is\ninconsistent with the MFN obligation provided therein. Article II:1 provides that:\n\"With respect to any measure covered by this Agreement, each Member shall accord\nimmediately and unconditionally to services and service suppliers of any other\nmember treatment no less favorable than it accords to like services and service\nsuppliers of any other country.\"\n8.41 Article II:2 provides for exceptions to this obligation, provided that any measures inconsistent\nwith the MFN obligation are listed in the Annex on Article II exemptions. As has been noted by the\ncomplainants, however, Canada has not listed an y exemption which would cover \"wholesale trade\nservices.\"\n8.42 Consequently, a violation of Article II of the GATS will be established where it is shown that\na measure is covered by GATS, and, with respect to services and service suppliers of any other\nMember, Canada accords treatment less favorable than it accords to like services and service suppliers\nof any other country.\n(b) The Tariff Exemption is a measure covered by GATS\n8.43 The Tariff Exemption clearly falls within the meaning of Article I:1, which states that this\nAgreement applies to measures \"affecting trade in services.\" In EC – Bananas III, it was noted that\nthe term \"affecting\" in Article I:1 was to be given a broad interpretation. In particular, it was noted\nthat \"the use of the term 'affecting' reflects the intent of the drafters to give a broad reach to the GATS.\nThe ordinary meaning of the word 'affecting' implies a measure that has 'an effect on', which indicates a\nbroad scope of application.\"\n8.44 This interpretation contrasts sharply with Canada's very restrictive interpretation.\" In particular,\nCanada seeks to distinguish the present measures from the measures in dispute in EC – Bananas III on\nthe grounds that in the latter case the application of the measures were \"[…] critical to the scope and\nprofitability of the provision of services […] and to the ability of [distributors] to import at all .\"\nConversely, Canada appears to suggest that the present measures can only be deemed to be \"affecting\"\ntrade in services if they are similarly \"critical\" to the ability to import or provide the relevant services \"at\nall.\" Clearly, such a test bears no resemblance to the ordinary meaning of the term \"affecting\" nor to the\nclear indications as to the broad meaning attributed to this term in EC – Bananas III noted above. In this\nrespect, the Tariff Exemption clearly affects trade in services, inter alia, because it reduces the cost\nfor the limited number of beneficiaries in supplying wholesale trade services and therefore modifies\ncompetition by placing such beneficiaries at a competitive advantage for the supply of such services.\nThe measures thus produce an effect on trade in services and, consequently, are covered by GATS.\n(c) The Tariff Exemption accords an advantage to wholesale trade service and service\nsuppliers of the United States and Sweden, and, consequently, less favorable treatment to like\nservices and service suppliers in other countries\nThe services and service providers at issue are like\n8.45 Importers who are beneficiaries under the Tariff Exemption offer trade services to distribute\ndomestically produced and imported motor vehicles. Similarly, Non-Auto Pact manufacturers offer\nlike wholesale trade services. In EC – Bananas III it was stated that:\n\n\"[T]he nature and characteristics of wholesale transactions as such, as well as of each\nof the different subordinated services […] are 'like' when supplied in connection with\nwholesale services, irrespective of whether these services are supplied with respect to\nbananas of EC and traditional ACP origin, on the one hand, or with respect to\nbananas of third country origin or non traditional ACP origin on the other. Indeed, it\nseems that the different service activities taken individually is virtually the same and\ncan only be distinguished by referring to the origin of bananas in respect of which the\nservice activity is being performed. Similarly, in our view, to the extent that entities\nprovide these like services, they are like service suppliers.\"\n791\n8.46 By analogy, both Auto Pact manufacturers and non-Auto Pact manufacturers are rendering\n\"like\" services \"in connection with wholesale trade services.\" In addition, \"to the extent that Auto Pact\nmanufacturers and non-Auto Pact manufacturers provide like services, they are like suppliers.\"\n8.47 The Tariff Exemption clearly fails to accord treatment no less favourable with respect to\nservices and service suppliers of any other country. The advantages accorded under the Tariff\nExemption are only available to a closed category of manufacturers which are also service suppliers.\nThis closed category is comprised almost exclusively of Service suppliers of the United states and\nCanada. This fact, coupled with the prohibitive eligibility criteria ensures that the advantage\nconferred under the Tariff Exemption is not accord ed immediately and unconditionally to service\nsuppliers in any other country. In this respect, the Tariff Exemption operates to discriminate against\nservices and service suppliers of certain WTO Members in favour of others and is therefore\ninconsistent with the MFN requirement under Article II of GATS.\nThe Tariff Exemption confers an advantage on wholesale trade services and service suppliers that are\neligible for the exemption\n8.48 In EC – Bananas III it was noted that the obligations contained in Article II:1 of the GATS to\nextend \"treatment no less favorable\" should be interpreted to require proving \"no less favorable\nconditions of competitions.\" In this respect, the Tariff Exemption affects the conditions of\ncompetition because Auto Pact manufacturers do not need to pass on import duties in the sales price\nof automobiles while non-Auto Pact manufacturers are required to do so. Therefore, wholesale trade\nservice suppliers who pay the MFN duty are placed at a competitive disadvantage and are therefore\naccorded less favorable treatment.\n(d) Article XVII GATS\n8.49 With regard to the national treatment obligation in Article XVII of the GATS, Korea\nconsiders that the Tariff Exemption is inconsistent with this provision. Canada is obliged under\nArticle XVII of the GATS and its schedule of specific commitments to grant national treatment with\nrespect to wholesale trade services and service suppliers including such services and service suppliers\nrelating to the production of motor vehicles.\n8.50 Article XVII of GATS, paragraphs 1, 2 and 3, respectively, provide that:\n\"In the sectors inscribed in its schedule, and subject to any conditions and\nqualifications set out therein, each Member shall accord to services and service\nsuppliers of any other Member, in respect of all measures affecting the supply of\nservices, treatment no less favorable than it accords to its own like service suppliers.\n\n791 Panel Reports on EC – Bananas III, supra note 269, para. 7.322.\n\n8.51 A Member may meet the requirement of paragraph 1 by according to services and service\nsuppliers of any other member, either formally identical treatment or formally different treatment to\nthat it accords to its own like services and service suppliers.\n8.52 Formally identical or formally different treatment shall be considered to be less favorable if it\nmodifies the conditions of competition in favor of services or service suppliers of the member\ncompared to like services or service suppliers of any other Member.\"\n(e) Wholesale trade services of motor vehicles through commercial presence are covered in\nCanada's Schedule of Specific Commitments\n8.53 Canada's specific commitment covers wholesale trade services under CPC\n792 class 6111 (sale\nof motor vehicles including automobiles and other road vehicles) through commercial presence\nwithout conditions or qualifications under Article XVII:1 of the GATS. As Canada has not limited,\nconditioned or qualified its commitment in these services it is required to accord to services and\nservice suppliers of any other member in this sector treatment no less favorable than the treatment it\naccords its own like services and service suppliers.\n(f) The services and service suppliers are \"like\"\n8.54 Korea endorses the argument by Japan, with respect to the interpretation of EC – Bananas III,\nthat Auto Pact manufacturers and Non-Auto Pact manufacturers are rendering \"like\" services \"in\nconnection with wholesale trade services,\" \"irrespective of whether these services are supplied with\nrespect to automobiles imported by the Auto Pact manufacturers or their related companies on the one\nhand or with respect to automobiles imported by the Non-Auto Pact manufacturers on the other hand.\"\nAnd that, to the extent that the Auto Pact manuf acturers and Non-Auto Pact manufacturers \"provide\nthese like services, they are like service suppliers,\" whether or not they have production facilities in\nCanada.\n(g) The Tariff Exemption modifies the conditions of competition in favor of Canadian\nservices and service suppliers\n8.55 The Tariff Exemption modifies conditions of competition in favor of only certain service\nsuppliers in that it applies the Tariff Exemption only to Auto Pact manufacturers who are also\nwholesale trade service suppliers. The savings in import duty costs due to the Duty Waiver provides\nthe Auto Pact Manufacturers a competitive advantage in wholesale services because of the lower\nimport duty costs and corresponding financing costs savings. Therefore, the less favorable treatment\naccorded by Canada to imports by Non-Auto Pact Manufacturers' wholesale trade service suppliers\nmodifies the conditions of competition between ce rtain Canadian services and service suppliers and\nlike services or service suppliers of other Members who are granted less favorable treatment.\nConsequently, the application of the Tariff Exemption by Canada is inconsistent with its obligation of\nnational treatment under Article XVII of the GATS.\n(h) The Tariff Exemption accords more favorabl e treatment to Canadian services and\nservice suppliers related to the production of motor vehicles\n8.56 Korea notes that, in order to achieve stipulated CVA requirements, Auto Pact manufacturers\nare in effect obliged to obtain certain services supp lied in Canada. In this respect, Canadian services\nand service suppliers are accorded more favorable treatment as compared with like services and\nservice suppliers of other WTO Members. In this regard, therefore, the Tariff Exemption is\ninconsistent with Canada's obligations under Arti cle XVII of the GATS. The types of services which\n\n792 United Nations Central Product Classification System.\n\nmay be counted towards the achievement of CVA are defined in the MVTO 1998. 793 The definition\nof CVA in the MVTO 1998 with respect to services includes:\n(a)(iv) \"the part of costs that is reasonably attributable to the production of vehicles,\nnamely,\n(I) the cost of maintenance and repair work executed in Canada on buildings,\nmachinery and equipment used for production purposes.\n(K) the cost of engineering services, experimental work and product development\nexecuted in Canada.\n[…]\n(v) administrative and general expenses incurred in Canada that are reasonably\nattributable to the production of the vehicles.\"\n8.57 The types of services which might be covered in these CVA categories is potentially very\nbroad. In this regard, as noted by Japan, Canada's schedule of specific commitments contains very few\nlimitations on its commitment to provide national tr eatment with respect to these various services\n(with regard to modes 1, 2 and 3), which are procured by the Auto Pact manufacturers.\n(i) The CVA requirements accord less favorable treatment to \"like\" services and service\nsuppliers\nLike services and service suppliers\n8.58 In EC – Bananas III , the Panel considered the issue of \"like\" services and suppliers. With\nrespect to whether wholesale trade services prov ided by companies originating in the European\nCommunities and ACP countries on the one hand, and companies originating from other countries on\nthe other hand, were like, it was stated that:\n\"[T]he nature and characteristics of wholesale transactions as such, as well as of each\nof the different subordinated services […] are 'like' when supplied in connection with\nwholesale services, irrespective of whether these services are supplied with respect to\nbananas of EC and traditional ACP origin, on the one hand, or with respect to\nbananas of third country origin or non traditional ACP origin on the other. Indeed, it\nseems that the different service activities taken individually is virtually the same and\ncan only be distinguished by referring to the origin of bananas in respect of which the\nservice activity is being performed. Similarly, in our view, to the extent that entities\nprovide these like services, they are like service suppliers.\"\n794\n8.59 By analogy, the nature and characteristics of the services at issue are \"like\" irrespective of\nwhere they are supplied. Therefore, to the extent that Canadian service suppliers and other service\nsuppliers provide these \"like\" services, they are \"like\" suppliers.\n\n793 Subsection 1(1) of the Schedule to the MVTO 1998.\n794 Panel Reports on EC – Bananas III, supra note 269, para. 7.322.\n\nI.2 Services and service suppliers outside Canada are accorded less favorable treatment\nI.3 Modes of supply\n8.60 The CVA requirements, insofar as they require that the services in question be \"executed in\nCanada,\" as applicable under items (a)(iv)(I) and (a)(iv)(K), or that the cost for services be \"incurred\nin Canada\" in the case of item (a)(v), accord less favorable treatment to service suppliers outside\nCanada in that they prevent the inclusion of costs in calculating CVA where the services are supplied\nunder Mode 1 (cross-border supply) or under Mode 2 (consumption abroad). Conversely, the cost of\n\"like\" services which are supplied in Canada are included for the purposes of calculating CVA.\nJ. Scope of the less favorable treatment\n8.61 Under Article XVII:3 of the GATS, treatment accorded to services and service suppliers of\nother WTO Members shall be considered to be \"less favorable if it modifies the conditions of\ncompetition in favor of services and service suppliers of the member maintaining the measure\ncompared to like services and service suppliers of any other Member.\"\n8.62 Under the CVA requirements, costs associated with services supplied under Mode 1 (cross-\nborder supply) and Mode 2 (consumption abroad) are excluded from the calculation of CVA.\nConsequently, the exclusion of these costs for the purpose of CVA in these cases modifies the\nconditions of competition in favor of services supplied in Canada compared to like services under\nMode 1 or Mode 2 from or in the territory of other Members.\n6. Conclusion\n8.63 On the basis of the factual and legal considerations above, Korea considers that the\ninconsistency of the Canadian Tariff Exemption with its obligations under Articles I:1 and III:4 of the\nGATT 1994, Article 2.1 of the TRIMs Agreement, Articles 3.1(a), 3.1(b) and 3.2 of the SCM\nAgreement and Articles II and XVII of the GATS has been conclusively demonstrated.\nC. T\nHE UNITED STATES' ARGUMENTS AS A THIRD PARTY\n8.64 As a third party, the United States argues as follows:\n8.65 As a third party, the United States does not attempt to respond to all of the factual and legal\nissues raised in this proceeding. Instead, the United States reserves its comments for one issue that it\nbelieves bears emphasis; that is, the relevance of Article XXIV of the General Agreement on Tariffs\nand Trade 1994 (\"GATT 1994\") to these proceedings. Further, the United States would raise one\nissue that has not yet been addressed, but which the panel may wish to keep in mind; namely, the\npossible relevance of Article V of the General Agreement on Trade in Services (\"GATS\") to this case.\nThe fact that no comment is made on a particular factual or legal claim does not mean that the\nUnited States agrees or disagrees with the position of any of the parties in this case.\n1. Legal Arguments\n(a) GATS Article V\n8.66 It is appropriate to mention one issue that thus far has not been mentioned by any party:\nnamely, the possible relevance of GATS Article V. That Article, which is analogous to GATT\nArticle XXIV, recognizes that GATS members may enter into agreements liberalizing trade in\nservices.\n8.67 Specifically, Article V provides that:\n\n1. This Agreement shall not prevent any of its Members from being a party to or\nentering into an agreement liberalizing trade in services between or among the parties\nto such an agreement, provided that such an agreement:\n(a) has substantial sectoral coverage ( footnote omitted), and\n(b) provides for the absence or elimination of substantially all discrimination, in\nthe sense of Article XVII, between or among the parties, in the sectors\ncovered under subparagraph (a), through:\n(i) elimination of existing discriminatory measures, and/or\n(ii) prohibition of new or more discriminatory measures,\neither at the entry into force of that agreement or on the basis of a\nreasonable time-frame, except for measures permitted under Articles\nXI, XII, XIV and XIV bis.\n2. In evaluating whether the conditions under paragraph 1(b) are met, consideration may\nbe given to the relationship of the agreement to a wider process of economic\nintegration or trade liberalization among the countries concerned.\n8.68 In 1994, the United States, Canada, and Mexico implemented the North American Free Trade\nAgreement (\"NAFTA\"), a comprehensive free-trade agreement governing trade in goods and services,\ntrade-related intellectual property rights, and other matters. NAFTA Chapters 11 (Investment),\n12 (Trade in Services), 13 (Telecommunications), 14 (Financial Services), and 16 (Temporary Entry),\ntogether with other services-related provisions of the NAFTA, create a North American free-trade\nzone for services.\n8.69 The services provisions of the NAFTA fall sq uarely within the terms of GATS Article V:1.\nThe NAFTA provides the elimination or absence of substantially all discrimination among the three\nParties across the range of services sectors. The agreement is substantial both in terms of the number\nof sectors it covers and the volume of trade affected. Moreover, it applies across all modes of supply.\n8.70 The European Communities and Japan argue that duty-free treatment offered under the Auto\nPact confers, de facto, certain benefits on US-owned automobile companies that, in the complainants’\nview, are wholesale services suppliers for purposes of the GATS. The European Communities and\nJapan argue that those benefits contravene GATS Article II. Canada has rejected the complainants’\nclaim.\n8.71 The United States takes no position here on the merits of the EC's GATS Article II\narguments, or Canada's rebuttal. However, should it ultimately sustain the EC's position on this issue,\nthe Panel should consider the application of GATS Article V to the measures at issue.\n8.72 To the extent that they provide more favorable treatment to US services suppliers than to like\nservices suppliers of other Members, as the European Communities asserts, Canada's measures would\nbe subject to the implied exception to GATS Article II conferred by GATS Article V:1. Specifically,\nthe more favourable treatment that the Europ ean Communities is seeking to condemn is being\naccorded by a member of an economic integration agreement of the type specified by Article V:1 to\nthe services suppliers of another member of that agreement.\n(b) GATT Article XXIV\n8.73 In a parallel argument with respect to trade in goods, the European Communities alleges that\n\"the Tariff Exemption is inconsistent with GATT Article I:1 in that de facto it provides an advantage\n\nto imports of automobiles originating in the United States and Mexico vis-à-vis imports of like\nproducts originating in other Members.\"\n8.74 The arguments offered above with respect to GATS Article V are also relevant in response to\nthis assertion. As Canada has noted, to the extent the United States and Mexico attain benefits that\nother countries do not, GATT Article XXIV sanctions such treatment. As partners in a free-trade\narea, Canada, the United States, and Mexico are permitted to offer to each other advantages that are\nnot extended to other countries.\nIX. INTERIM REVIEW\n9.1 On 27 October 1999, Canada and Japan requested the Panel to review certain aspects of the\ninterim report that had been transmitted to the parties on 13 October 1999, in accordance with\nArticle 15.2 of the DSU.\n795 The European Communities indicated that it had no comments. As for a\npossible review meeting with the Panel, Canada and Japan expressed a preference to respond in\nwriting to each other's comments. The Panel thus invited the parties to submit written responses to\neach other's comments by 11 November 1999; Canada and Japan did so. No further comments were\naccepted after that date.\n9.2 We have reviewed the arguments and suggestions presented by Canada and Japan and have\nfinalized our report, taking into account those comments by the parties which we considered justified.\n9.3 For the descriptive part (i.e. Sections I-VIII), where requested, we inserted language found in\nthe original submissions of the parties, unless that language already appeared in the descriptive part.\nThese insertions may be found in paragraphs 5.132-5.138, 5.142-5.143, 5.217-5.220, 6.15, 6.42-6.45,\n6.66, 6.91-6.94, 6.121-6.123, 6.162, 6.190-6.194, 6.274, 6.361-6.363, 6.436, 6.450, 6.792, and\n6.1134-6.1137, as well as in footnotes 34 and 308; Canada's Figures 1-7 were also inserted. Although\nappearing in the Legal Arguments section (Section VI), paragraphs 5.90-5.116 and 5.271 were\nduplicated in Section V for completeness, as requested. Paragraph 4.6 and footnotes 44, 46 and 275\nwere added for clarification, as requested. Paragraphs 2.3-2.6, 2.8, 2.10, 2.14, 2.29, 2.35 and 6.417,\nas well as footnote 33, were revised in the light of Canada's comments. In addition, other\ntypographical and technical refinements were made. Paragraph 4.3 was left intact despite a request\nthat it be deleted.\n9.4 For both the Findings and the Conclusions and Recommendations sections (i.e. Sections X\nand XI), we made minor linguistic, typographi cal and technical corrections and also added\nclarifications. Specifically, footnotes 800 and 811 were added for clarification, as requested;\nparagraph 10.4 was revised, with paragraphs 10.3-10.6 reordered; and terminology as to the measures\nat issue was corrected in paragraphs 10.264, 10.290, 10.308, 11.1(g) and 11.1(i).\n9.5 A number of more substantive modifications were also made in response to comments from\nthe parties. In particular, paragraph 10.39 was revised as requested to reflect Canada's position better.\nIn that paragraph, the key issue is Canada's view of what constitute \"origin-neutral\" conditions on\nimporters, referred to in the second sentence, to which no objection was posed. A sentence\nsummarizing Canada's argument as to the relevant test of Article I:1 consistency was deleted from the\nend of the paragraph because these ideas are already presented in paragraph 10.35. Paragraph 10.44\nwas revised as requested to provide a more accurate reflection of Canada's position on the issue of\nintra-firm trade in the automotive sector; the basic point of the paragraph – i.e. that the importers will\nimport only from related parties – is not altered. Paragraphs 10.52-10.54 were revised to provide a\nmore detailed reflection of Canada's arguments, thus adding balance. Paragraph 10.81 has been\n\n795 The descriptive part of the report (i.e. Sections I-VIII) was issued to the parties on 5 August 1999\nfor comment. On 20 August 1999 Canada and Japan submitted comments and the European Communities\nindicated that it did not wish to do so.\n\nrevised to make it clear that the idea expressed in this paragraph is not that use of imported products\nprevents a manufacturer from benefitting from the import duty exemption, but rather that the use of\nimported products does not contribute to meeting the conditions for benefitting from the exemption.\nParagraphs 10.83 and 10.84 were revised to reflect better Canada's position that measures only affect\nthe internal sale or use of products if they have a potential effect under current circumstances and not,\nas previously stated in paragraph 10.83, if they have an actual effect under current circumstances.\nParagraphs 10.225, 10.230, 10.292 and 10.293 were revised to reflect Canada's comment that their\nargument that the import duty exemption is not a measure affecting trade in services does not also\nextend to the CVA requirements.\n9.6 In addition, and taking into consideration Japan's view that remedies may be a relevant\nconsideration when determining whether to apply judicial economy, we have elaborated on Section\nX.C.2 (Claims under the SCM Agreement: CVA requirements) by undertaking an examination of the\nconsistency of the CVA requirements with Article 3.1(b).\n796\nX. FINDINGS\nA. INTRODUCTION\n1. Measures at issue\n10.1 The parties to this dispute disagree as to the consistency with various provisions of the GATT\n1994 (GATT), the TRIMs Agreement, the SCM Agreement and the GATS, of an exemption from\ncustoms duties accorded by Canada on the importation of motor vehicles subject to certain conditions\n(\"import duty exemption\"). This import duty exemption arises out of Canada's implementation of the\nAuto Pact, which was concluded between Canada and the United States in January 1965. It is\ncurrently applied by Canada pursuant to the Motor Vehicles Tariff Order 1998 (MVTO 1998) and a\nnumber of Special Remission Orders (SROs).\n797\n10.2 The MVTO 1998 provides that the importation of certain categories of motor vehicles 798 is\nfree from payment of the otherwise applicable MFN tariff if imported by a manufacturer of a category\nof motor vehicles in accordance with the conditions set out in the schedule to the MVTO 1998. The\nschedule to the MVTO 1998 provides that the term \"manufacturer\" means:\n\"…a manufacturer of a class of vehicles who\n(a) produced vehicles of that class in Canada in each of the four consecutive\nquarters of the base year; and\n(b) produced vehicles of a class in Canada in the 12-month period ending on July\n31 in which the importation is made where\n(i) the ratio of the net sales value of the vehicles produced to the net\nsales value of all vehicles of that class sold for consumption in Canada by the\n\n796 Initially we chose not to examine claims under Article 3 of the SCM Agreement regarding the CVA\nrequirements. Japan took issue with this decision with respect to claims under Article 3.1(b) of the SCM\nAgreement but not claims under Article 3.1(a) of that Agreement. Hence, we only elaborated findings on those\nclaims under 3.1(b).\n797 The MVTO 1998 and the SROs also provide for an import duty exemption with respect to certain\nparts and components for use as original equipment in the manufacture of motor vehicles. That exemption has\nnot been contested in this dispute.\n798 We note that the MVTO 1998 defines \"motor vehicles\" as comprising (i) automobiles, (ii) specified\ncommercial vehicles, and (iii) buses. The SROs follow this definition.\n\nmanufacturer in that period is equal to or higher than the ratio of the net sales\nvalue of all vehicles of that class produced in Canada by the manufacturer in\nthe base year to the net sales value of all vehicles of that class sold for\nconsumption in Canada by the manufacturer in the base year, and is not in\nany case lower than 75 to 100, and\n(ii) the Canadian value added is equal to or greater than the Canadian\nvalue added in respect of all vehicles of that class produced in Canada by the\nmanufacturer in the base year.\"\nThe term \"base year\" means the 12-month period beginning on 1 August 1963 and ending on 31 July\n1964.\n10.3 A number of motor vehicle manufacturers who had no production operations in Canada\nduring the 1963-64 base year have been accorded the right to import motor vehicles duty free into\nCanada pursuant to company-specific SROs which provide that the manufacturers must meet criteria\nwith respect to the ratio between the net sales value of vehicles produced in Canada and the net sales\nvalue of all vehicles sold for consumption in Canada and with respect to the Canadian value added in\nthe production of motor vehicles.\n10.4 In sum, to qualify for the import duty exemption, an eligible manufacturer of a class of\nvehicles must meet the following conditions: (1) a manufacturing presence in Canada which, with\nrespect to the MVTO 1998, is expressed in terms of a base year, along with local production of\nvehicles of the class being imported in the current year (\"manufacturing presence\"); (2) a production-\nto-sales ratio requirement, as reflected in the MVTO 1998 and the SROs (\"ratio requirement\"); and\n(3) a Canadian value added requirement, as reflected in the MVTO 1998 and the SROs (\"CVA\nrequirement\"). We also note that, according to complainants, additional CVA requirements are\ncontained in various Letters of Undertaking.\n799\n10.5 In 1989, the category of motor vehicle manufactu rers eligible for the import duty exemption\nunder the then applicable MVTO or pursuant to company-specific SROs was closed in accordance\nwith an obligation assumed by Canada under the Canada-United States Free Trade Agreement.\n800\n10.6 While the eligibility for the import duty exem ption provided for under the MVTO 1998 and\nthe SROs is thus confined to certain motor vehicle manufacturers, the right of those manufacturers to\nimport motor vehicles duty free is not subject to a limitation with respect to the origin of such\nvehicles.\n10.7 We note the difference in product coverage of the various claims of Japan, on the one hand,\nand the European Communities on the other. The product coverage of Japan's claims – those under\nthe GATT, the TRIMS Agreement, the SCM Agreement and the GATS – includes the three categories\nof \"motor vehicles\" as defined in the MVTO 1998 (with certain exceptions not relevant to this\nproceeding), including \"automobiles\", \"buses\" and \"specified commercial vehicles\". 801 Similarly, the\nproduct coverage of the European Communities' claims under GATT Article III, the\nTRIMS Agreement, the SCM Agreement and Article XVII of the GATS also include all three\ncategories of motor vehicles. 802 However, the European Communities' claims under GATT Article I\n\n799 Although we note the statement by the European Communities in Section V.A.1(b), supra, that it is\nalso challenging the Canada-US Auto Pact as such, no claims are made as to the Auto Pact as distinct from those\nmade against the MVTO 1998, the SROs and the Letters of Undertaking.\n800 We note that the Canada-United States Free Trade Agreement as such is not at issue in this dispute.\n801 See supra para. 2.19.\n802 See supra para. 5.20.\n\nand GATS Article II are limited in their product coverage to \"automobiles\" as defined in the\nMVTO 1998.803\n10.8 For the purposes of our analysis of all the parties' claims, unless otherwise specified, in\nreferring to \"product(s)\" we mean to include all three categories of \"motor vehicles\" as defined in the\nMVTO 1998.\n2. Order of consideration of claims\n10.9 In our analysis of the legal issues in this case, we shall follow the order in which the\ncomplainants presented their claims. Accordin gly, we shall first address claims under GATT\nArticle I:1, followed by those under GATT Article III:4, and those under the TRIMs Agreement. We\nshall then turn to claims under the SCM Agreement. Finally, we shall address claims under the\nGATS.\n3. Rules of treaty interpretation\n10.10 Article 3.2 of the DSU directs panels to clarify WTO provisions \"in accordance with\ncustomary rules of interpretation of public international law\". It is generally considered that the\nfundamental rules of treaty interpretation set out in Articles 31 and 32 of the Vienna Convention have\nattained the status of rules of customary international law. These Vienna Convention articles provide\nas follows:\nARTICLE 31\nGeneral rule of interpretation\n1. A treaty shall be interpreted in good faith in accordance with the\nordinary meaning to be given to the terms of the treaty in their context and\nin the light of its object and purpose.\n2. The context for the purpose of the interpretation of a treaty shall\ncomprise, in addition to the text, including its preamble and annexes:\n(a) any agreement relating to the treaty which was made\nbetween all the parties in connexion with the conclusion of the treaty;\n(b) any instrument which was made by one or more parties in\nconnexion with the conclusion of the treaty and accepted by the other\nparties as an instrument related to the treaty.\n3. There shall be taken into account together with the context:\n(a) any subsequent agreement between the parties regarding the\ninterpretation of the treaty or the application of its provisions;\n(b) any subsequent practice in the application of the treaty\nwhich establishes the agreement of the parties regarding its interpretation;\n\n803 See supra para. 5.19.\n\n(c) any relevant rules of international law applicable in the\nrelations between the parties.\n4. A special meaning shall be given to a term if it is established that the\nparties so intended.\nARTICLE 32\nSupplementary means of interpretation\nRecourse may be had to supplementary means of interpretation, including the\npreparatory work of the treaty and the circumstances of its conclusion, in order to\nconfirm the meaning resulting from the application of article 31, or to determine\nthe meaning when the interpretation according to article 31:\n(a) leaves the meaning ambiguous or obscure; or\n(b) leads to a result which is manifestly absurd\nor unreasonable.\n10.11 As noted by the Appellate Body in its report on Japan – Alcoholic Beverages, \"Article 31 of\nthe Vienna Convention provides that the words of the treaty form the foundation for the interpretive\nprocess: 'interpretation must be based above all upon the text of the treaty'. The provisions of the\ntreaty are to be given their ordinary meaning in thei r context. The object and purpose of the treaty are\nalso to be taken into account in determining the meaning of its provisions\".\n804\n10.12 Our understanding of these rules of interpretation is that, even though the text of a term is the\nstarting-point for any interpretation, the meaning of a term cannot be found exclusively in that text; in\nseeking the meaning of a term, we also have to take account of its context and to consider the text of\nthe term in light of the object and purpose of the treaty. Article 31 of the Vienna Convention\nexplicitly refers to the \"ordinary meaning to be give n to the terms of the treaty in their [the terms']\ncontext and in the light of its [the treaty's] object and purpose\". 805 The three elements referred to in\nArticle 31 – text, context and object and purpose – are to be viewed as one integrated rule of\ninterpretation rather than a sequence of separate tests to be applied in a hierarchical order. 806 O f\ncourse, context and object and purpose may simply confirm the textual meaning of a term. In many\ncases, however, it is impossible to give meaning, even \"ordinary meaning\", without looking also at the\ncontext and/or object and purpose.807\n10.13 It is in accordance with these rules of trea ty interpretation that we will examine the WTO\nprovisions at issue in this case.\n\n804 Appellate Body Report on Japan – Alcoholic Beverages, supra note 271, pp. 11-12.\n805 See Appellate Body Report on Brazil – Measures Affecting Dessicated Coconut , adopted on\n20 March 1997, WT/DS22/AB/R, p. 15.\n806 \"The Commission by heading the article 'General rule of interpretation' in the singular and by\nunderlining the connection between paragraphs 1 and 2 and again between paragraph 3 and the two previous\nparagraphs, intended to indicate that the application of the means of interpretation in the article would be a\nsingle combined operation. All the various elements, as they were present in any given case, would be thrown\ninto the crucible and their interaction would give the legally relevant interpretation\". Yearbook of the\nInternational Law Commission (1966) Vol. II, A/CN.4/SER.A/1966/Add.1, 219 and 220.\n807 To find \"ordinary meaning\", reference is often made to an authoritative language dictionary.\nHowever, very few – if any – words have only one dictionary meaning. Thus, even the step of choosing the\nrelevant dictionary meaning(s) in pursuit of \"ordinary meaning\" – often the very first step in treaty interpretation\n– necessarily involves a reference to the context in whic h the word is used. Referring to the object and purpose\nof an agreement may also be indispensable to arriving at the meaning of a word.\n\nB. CLAIMS UNDER THE GATT AND THE TRIMS AGREEMENT\n1. Claims Under Article I:1 of the GATT\n(a) Introduction\n10.14 As described above in the introductory section of the findings, Canada accords an import duty\nexemption on motor vehicles if imported by importers who meet certain conditions. This import duty\nexemption is provided for in the MVTO 1998 and certain SROs.\n10.15 The European Communities and Japan claim that this import duty exemption is inconsistent\nwith Article I:1 of the GATT, which provides in relevant part:\n\"With respect to customs duties and charges of any kind imposed on or in connection\nwith importation ..., any advantage, favour, privilege or immunity granted by any\ncontracting party to any product originating in … any other country shall be accorded\nimmediately and unconditionally to the like product originating in … the territories of\nall other contracting parties.\"\n10.16 The parties do not dispute that the import duty exemption is an \"advantage\" within the\nmeaning of Article I:1 with respect to \"customs duties and charges of any kind on or in connection\nwith importation\". It is also not in dispute that there are imported products which do not benefit from\nthis exemption which are like imported products which benefit from the exemption.\n10.17 Two main arguments have been advanced with respect to the alleged inconsistency of this\nimport duty exemption with Article I:1. Firstly, Japan argues that the import duty exemption is\ninconsistent with Article I:1 because, by conditioning the exemption on criteria which are unrelated to\nthe imported product itself, Canada fails to accord the exemption immediately and unconditionally to\nlike products originating in the territories of all WTO Members. Secondly, both the European\nCommunities and Japan argue that the limitation of the eligibility for the import duty exemption to\ncertain motor vehicle manufacturers is inconsistent with Article I:1 on the grounds that it entails\nde facto discrimination in favour of products of certain countries.\n(b) Whether the import duty exemption is awarded \"immediately and unconditionally\"\n10.18 We first consider the argument of Japan that, by making the import duty exemption\nconditional upon criteria which are unrelated to the imported product itself, Canada fails to accord the\nimport duty exemption immediately and unconditionally to like products originating in all WTO\nMembers. By \"criteria unrelated to the imported products themselves,\" Japan means the various\nconditions which confine the eligibility for the exemption to certain motor vehicle manufacturers in\nCanada.\n10.19 We note that in developing this argument, Japan refers to the Concise Oxford Dictionary\ndefinition of the word \"unconditional\" as meaning \"not subject to conditions\", and cites Indonesia\nAutos\n808 and Belgian Family Allowances809, as well as the Working Party Report on the Accession of\nHungary810, as authority for the proposition that the subjecting of an advantage to any condition\nunrelated to the product is inconsistent with Article I:1.\n10.20 We also recall Canada's response that Japan misinterprets the \"immediately and\nunconditionally\" clause in Article I:1 and that Article I:1 contains no prohibition of origin-neutral\n\n808 Panel Report on Indonesia – Autos, supra note 270.\n809 Panel Report on Belgian Family Allowances, supra note 276.\n810 Report of the Working Party on the Accession of Hungary, supra note 276.\n\nterms and conditions on importation that apply to the importers as opposed to the products being\nimported. According to Canada, Article I:1 prohibits only conditions related to the national origin of\nthe imported product. Canada thus argues that it is entitled to treat like products differently so long as\nthe distinction in treatment is based on criteria other than national origin. Canada argues that in the\ninstant case the conditions under which the import duty exemption is accorded are consistent with\nArticle I:1 in that they are based on the activities of importing manufacturers and not on the origin of\nthe products. Canada further argues that to hold otherwise would be to \"read Article II out of the\nGATT\", given that Article II specifically contemplates tariff bindings being subject to \"terms,\nconditions or qualifications\"\n811.\n10.21 We note that the argument of Japan that the import duty exemption is inconsistent with\nArticle I:1 because it is conditioned upon criteria that are unrelated to the imported products is distinct\nfrom Japan's argument that the import duty exemption violates Article I:1 because it discriminates in\npractice in favour of products of certain countries. Thus, Japan advances an interpretation of Article\nI:1 which distinguishes between, on the one hand, the issue of whether the advantage arising out of\nthe import duty exemption is accorded \"unconditionally\" as required by Article I:1, and, on the other,\nthe issue of whether that advantage is accorded without discrimination as to the origin of products.\n10.22 As explained below, we believe that this interpretation of Japan does not accord with the\nordinary meaning of the term \"unconditionally\" in Article I:1 in its context and in light of the object\nand purpose of Article I:1. In our view, whether an advantage within the meaning of Article I:1 is\naccorded \"unconditionally\" cannot be determined independently of an examination of whether it\ninvolves discrimination between like products of different countries.\n10.23 Article I:1 requires that, if a Member grants any advantage to any product originating in the\nterritory of any other country, such advantage must be accorded \"immediately and unconditionally\" to\nthe like product originating in the territories of all other Members. We agree with Japan that the\nordinary meaning of \"unconditionally\" is \"not s ubject to conditions\". However, in our view Japan\nmisinterprets the meaning of the word \"uncondit ionally\" in the context in which it appears in\nArticle I:1. The word \"unconditionally\" in Article I:1 does not pertain to the granting of an advantage\nper se, but to the obligation to accord to the like products of all Members an advantage which has\nbeen granted to any product originating in any country. The purpose of Article I:1 is to ensure\nunconditional MFN treatment. In this context, we consider that the obligation to accord\n\"unconditionally\" to third countries which are WTO Members an advantage which has been granted\nto any other country means that the extension of that advantage may not be made subject to conditions\nwith respect to the situation or conduct of those countries. This means that an advantage granted to the\nproduct of any country must be accorded to the like product of all WTO Members without\ndiscrimination as to origin.\n10.24 In this respect, it appears to us that there is an important distinction to be made between, on\nthe one hand, the issue of whether an advantage within the meaning of Article I:1 is subject to\nconditions, and, on the other, whether an advantage, once it has been granted to the product of any\ncountry, is accorded \"unconditionally\" to the like product of all other Members. An advantage can be\ngranted subject to conditions without necessarily implying that it is not accorded \"unconditionally\" to\nthe like product of other Members. More specifically , the fact that conditions attached to such an\nadvantage are not related to the imported product itself does not necessarily imply that such\nconditions are discriminatory with respect to the origin of imported products. We therefore do not\nbelieve that, as argued by Japan, the word \"unconditionally\" in Article I:1 must be interpreted to mean\nthat making an advantage conditional on criteria not related to the imported product itself is per se\ninconsistent with Article I:1, irrespective of whether and how such criteria relate to the origin of the\nimported products.\n\n811 Supra para. 7.97.\n\n10.25 We thus find that Japan's argument is unsupported by the text of Article I:1. We also consider\nthat there is no support for this argument in the GATT and WTO reports cited by Japan. A review of\nthese reports shows that they were concerned with measures that were found to be inconsistent with\nArticle I:1 not because they involved the application of conditions that were not related to the\nimported product but because they involved conditions that entailed different treatment of imported\nproducts depending upon their origin.\n10.26 Thus, the measure at issue in Belgian Family Allowances was \"the application of the Belgian\nlaw on the levy of a charge on foreign goods purchased by public bodies when these goods originated\nin a country whose system of family allowances did not meet specific requirements.\"\n812 The panel\ndetermined that this levy was an internal charge within the meaning of Article III:2 of the GATT and\nfound that it was inconsistent with Article I:1:\n\"According to the provisions of paragraph 1 of Article I of the General Agreement,\nany advantage, favour, privilege or immunity granted by Belgium to any product\noriginating in the territory of any country with respect all matters referred to in\nparagraph 2 of Article III shall be granted immediately and unconditionally to the like\nproduct originating in the territories of all contracting parties. Belgium has granted\nexemption from the levy under consideration to products purchased by public bodies\nwhen they originate in Luxemburg and the Netherlands, as well as in France, Italy,\nSweden and the United Kingdom. If the General Agreement were definitively in\nforce in accordance with Article XXVI, it is clear that the exemption would have to\nbe granted unconditionally to all other contracting parties (including Denmark and\nNorway). The consistency or otherwise of the system of family allowances in force in\nthe territory of a given contracting party with the requirements of the Belgian law\nwould be irrelevant in this respect, and the Belgian legislation would have to be\namended insofar as it introduced a discrimination between countries having a given\nsystem of family allowances and those wh ich had a different system or no system at\nall, and made the granting of the exemption dependant on certain conditions .\"\n813\n(emphasis added)\n10.27 Similarly, the reference made by Japan to the Working Party Report on the Accession of\nHungary concerns tariff exemptions and reductions granted in the framework of co-operation\ncontracts. The GATT Secretariat, in response to a request for a legal opinion, commented that \"the\nprerequisite of having a co-operation contract in order to benefit from certain tariff treatment appeared\nto imply conditional most-favoured-nation treatme nt and would, therefore, not appear to be\ncompatible with the General Agreement\".\n814\n10.28 With respect to the Panel Report on Indonesia – Autos, we note that the panel determined\nthat certain customs duty and tax benefits provided by Indonesia to imports of \"National Cars\" and\nparts and components thereof from Korea were advantages within the meaning of Article I, and that\nthese \"National Cars\" and their parts and components imported from Korea were like other similar\nmotor vehicles and parts and components from other Members. The panel then proceeded to\n\"…examine whether the advantages accorded to national cars and parts and\ncomponents thereof from Korea are unconditionally accorded to the products of other\nMembers, as required by Article I. The GATT case law is clear to the effect that any\n\n812 Panel Report on Belgian Family Allowances, supra note 276, para. 1.\n813 Ibid., para. 3.\n814 Report of the Working Party on the Accession of Hungary, supra note 276, para. 12.\n\nsuch advantage (here tax and customs duty benefits) cannot be made conditional on\nany criteria that is not related to the imported product itself.\"815\nSignificantly, in support of the statement that \"the GATT case law is clear to the effect that any such\nadvantage (…) cannot be made conditional on any criteria that is not related to the imported product\nitself\", the panel referred to the Panel Report on Belgian Family Allowances.\n816 As discussed above,\nthat Panel Report dealt with a measure which distinguished between countries of origin depending\nupon the system of family allowances in force in th eir territories. We further note that, following this\nstatement, the panel on Indonesia – Autos identified certain conditions which entailed discrimination\nbetween imports of the subject products from Korea and like products from other Members, and\nfound that these measures were thus inconsistent with Article I of the GATT. 817 The statement in the\nPanel Report that an advantage within the meaning of Article I \"cannot be made conditional on any\ncriteria that is not related to the imported product itself\" must therefore in our view be seen in relation\nto conditions which entailed different treatment of like products depending upon their origin.\n10.29 In sum, we believe that the panel decisions and other sources referred to by Japan do not\nsupport the interpretation of Article I:1 advocated by Japan in the present case according to which the\nword \"unconditionally\" in Article I:1 must be in terpreted to mean that subjecting an advantage\ngranted in connection with the importation of a product to conditions not related to the imported\nproduct itself is per se inconsistent with Article I:1, regardless of whether such conditions are\ndiscriminatory with respect to the origin of products. Rather, they accord with the conclusion from our\nanalysis of the text of Article I:1 that whether conditions attached to an advantage granted in\nconnection with the importation of a product offend Article I:1 depends upon whether or not such\nconditions discriminate with respect to the origin of products.\n10.30 In light of the foregoing considerations, we reject Japan's argument that, by making the\nimport duty exemption on motor vehicles conditional on criteria that are not related to the imported\nproducts themselves, Canada fails to accord the exemption immediately and unconditionally to the\nlike product originating in the territories of all WTO Members. In our view, Canada's import duty\nexemption cannot be held to be inconsistent with Article I:1 simply on the grounds that it is granted\non conditions that are not related to the imported products themselves. Rather, we must determine\nwhether these conditions amount to discrimination between like products of different origins.\n(c) Whether the import duty exemption discriminates in favour of motor vehicles of certain\ncountries\n10.31 We thus turn to the issues raised by the comp lainants to support their view that the import\nduty exemption involves discrimination in favour of motor vehicles of certain countries. We begin by\nrecapitulating the main arguments of the parties.\n10.32 Japan argues that, by virtue of the eligibility restriction, the import duty exemption accorded\nby Canada on motor vehicles discriminates in practice by according an advantage to motor vehicles\nfrom certain countries while effectively denying the same advantage to like motor vehicles originating\nin the territories of other WTO Members. Japan submits that, although the beneficiaries of the import\nduty exemption are ostensibly permitted to import motor vehicles of any national origin, in practice\nthey have chosen and will continue to choose to import the products of particular companies from\nparticular countries, in consideration of their previous history of transactions, capital relationships,\nand the nationality of companies investing in the bene ficiaries. In the view of Japan, this means that\nthe eligibility restriction and other conditions attached to the exemption effectively limit access to the\nadvantage to certain Members having the companies with which the beneficiaries have certain\n\n815 Panel Report on Indonesia – Autos, supra note 270, para. 14.143.\n816 Ibid., para. 14.144.\n817 Ibid., paras. 14.145-148.\n\ncommercial relationships. Japan further argues that the discriminatory nature of the exemption was\nstrengthened due to the fact that the list of eligible importers has been frozen since 1 January 1989. As\nevidence of the discriminatory character of the import duty exemption, Japan adduces statistics which\nshow that in 1997, 96% of Sweden's imports into Canada, and 94% of Belgium's were duty-free (in\nboth cases these were imports of Volvos and of Saabs, the latter partly owned by GM, with Volvo\nCanada and GM Canada both being eligible manufacturer beneficiaries). Japan compares this with\njust under 30% of duty-free imports for the whole of the European Communities, and of just under\n5% for Korea and just under 3% for Japan.\n818 Japan also points to the fact that Volvos and Saabs are\nimported under the import duty exemption from Belgium or Sweden while like vehicles produced by\nJapanese manufacturers are imported subject to the MFN rate. 819 We note that at the initial stage of\nthis proceeding Japan's argument concentrated on the discrimination in favour of imports from\nBelgium and Sweden as compared with imports from Japan; subsequently Japan has also contended\nthat there is discrimination in favour of imports from the United States and Mexico.\n10.33 The European Communities argues that, although the import duty exemption on its face is\nnon-discriminatory in that it applies equally with respect to all imports of automobiles by the\nbeneficiaries, irrespective of their country of origin, in reality the main beneficiaries are subsidiaries\nof US companies with large manufacturing facilities in the United States and Mexico, and the benefit\nof the exemption therefore accrues almost exclusively to imports from these two countries. In support\nof this, the European Communities states that in 1997, imports of automobiles from the United States\nand Mexico accounted for 97% of all duty-free imports into Canada, when in contrast imports from\nthese two countries accounted for only 80% of all imports of automobiles into Canada.\n820 According\nto the European Communities, this \"disproportionate\" share is not a result of commercial factors but is\nthe result of the import duty exemption. Moreover, whereas in 1997 the vast majority of imports from\nMexico and the United States benefited from the import duty exemption, most imports from other\nsources were subject to customs duties.\n821\n10.34 Both Japan and the European Communities argue that their claim that the import duty\nexemption gives rise to de facto discrimination is supported by relevant GATT and WTO Panel\nReports.\n10.35 Canada argues that the claim of the comp lainants that the import duty exemption involves\nde facto discrimination in favour of products of certain countries is without foundation in law or in\nfact. According to Canada, GATT and WTO dispute settlement cases demonstrate that to prove a de\nfacto violation of Article I:1 it must be shown that a criterion that is neutral on its face is in fact able\nto be met only by products of a particular origin or origins such that national origin determines the\ntariff treatment the product receives. In the case at hand, there are no such criteria that determine the\norigin of the products which may be imported under the import duty exemption. In the view of\nCanada, the mere limitation of the number of eligible importers is not inconsistent with Article I:1\ngiven that there are no conditions restricting the origin of products imported by the beneficiaries. In\nthis connection, Canada submits that there is no basis in GATT and WTO case law for the view that a\nde facto violation of Article I:1 can be established on the basis of the commercial decisions of\nimporters with respect to their sources of supply.\n10.36 Canada further submits that the complainants have failed to adduce evidence supporting their\nclaim of discrimination. The lack of factual support for this claim is illustrated by the fact that the\ncomplainants differ on which third countries benefit from the allegedly more favourable treatment. In\naddition, the statistics adduced by the complainants to demonstrate that the products of some countries\nreceive a disproportionate share of the duty-free benefit do not provide evidence of discrimination.\n\n818 Supra Japan's Table 6.\n819 Supra Japan's Tables 9 and 10.\n820 Supra EC's Table 1.\n821 Supra EC's Table 2.\n\nWith respect to the data presented by Japan, Canada argues that these data are inaccurate, incomplete\nand irrelevant to the establishment of a violation of Article I:1. In any event, even Japan's data show\nthat in 1996 there were 1,776 duty-free import sales of vehicles from Sweden, compared with 4,502\nduty-free import sales from Japan. Canada also submits data822 showing that during the years 1991-98\nJapanese-origin vehicles have benefitted from the import duty exemption to a much greater extent\nthan have vehicles of Belgium, Sweden and several other WTO Members. Canada rejects as irrelevant\nJapan's comparison between luxury models impor ted from Belgium and Sweden and luxury models\nimported from Japan. With respect to the statistics adduced by the European Communities, Canada\nargues that the European Communities fails to explain how these statistics constitute evidence of\ndiscrimination within the meaning of Article I:1, and that, even if it were true that an advantage is\ngranted de facto to products of the United States and of Mexico, such advantage would be exempted\nfrom Article I:1 by virtue of Article XXIV.\n10.37 In respect of this disagreement between the parties on whether or not the import duty\nexemption accorded by Canada under the MVTO 1998 and SROs involves discrimination in favour of\nproducts of certain countries, we note first that Japan and the European Communities do not contest\nthe fact that this exemption applies to imports from any country entitled to Canada's MFN rate. We\ntherefore consider that the fundamental legal question before us is how the MFN requirement in\nArticle I:1 must be applied to a measure which, on the one hand, involves a limitation to certain\nimporters of an advantage granted in connection with the importation of a product but which, on the\nother hand, does not impose conditions regarding the origin of the products which can benefit from\nsuch advantage. More specifically, the question arises whether such a measure can be considered to\ngive rise to de facto discrimination between like products originating in the territories of different\nMembers.\n10.38 In this regard, we note that GATT/WTO jurisprudence has established that Article I:1\nencompasses both de jure and de facto forms of discrimination.\n823 The instant case differs from\nsituations addressed in some of the Panel Reports referred to by the parties with respect to the issue of\nde facto discrimination under Article I:1 in that in the present case such discrimination is alleged to\narise from conditions with regard to the importers eligible for the import duty exemption rather than\nfrom conditions applied with respect to the products imported by such importers: the complainants\nessentially argue that there is de facto discrimination as a result of the fact that only certain importers\nin Canada qualify for the import duty exemption. In their view, this effectively limits the benefit of\nthat exemption to the products of certain Members in whose territories are located companies related\nto those importers.\n10.39 By contrast, Canada submits that Article I:1 does not prohibit the imposition of origin-neutral\nterms and conditions on importation that apply to importers as opposed to the products being\nimported. As we understand this argument, Canada takes the view that terms and conditions that\napply to importers are \"origin-neutral\" if they do no t provide for limitations with respect to the origin\nof products which may be imported by the importers.\n10.40 Though we do not contest the validity of the proposition that Article I:1 does not prohibit the\nimposition of origin-neutral terms and conditions on importation that apply to importers, we believe\nthat the interpretation advocated by Canada of what \"origin-neutral\" means in this context is unduly\nnarrow. We see no basis in the text of Article I:1 to hold that, where a measure reserves an import\nduty exemption to certain importers, the consistency of that measure with Article I:1 depends solely\non whether or not there are restrictions on the origin of products imported by such importers. Rather,\nwe believe that account should also be taken of the possibility that the limitation of the exemption to\n\n822 Supra Canada's Figure 4.\n823 See Appellate Body Report on EC – Bananas III, supra note 49, para. 232. See also Panel Report\non EEC – Beef from Canada , supra note 282; Panel Report on Spain – Unroasted Coffee, supra note 282; and\nPanel Report on Japan – SPF Lumber, supra note 282.\n\ncertain importers may by itself have a discriminatory impact on the treatment of like products of\ndifferent origins.\n10.41 As described above in the introductory section of these findings, the category of importers\neligible for the import duty exemption accorded by Canada under the MVTO 1998 and the SROs is\nconfined to manufacturers who were present in Canada in a particular base year and who meet certain\nperformance requirements. In addition, since 1989 no new motor vehicle manufacturers have been\nable to qualify for the exemption. We note in this regard that among the manufacturers who currently\nbenefit from the exemption are companies which have links of ownership or control with motor\nvehicle producers based in certain countries. Thus, with respect to automobiles, the current\nbeneficiaries of the MVTO 1998 are fully-owned subsidiaries of General Motors, Ford, Chrysler and\nVolvo.\n824 On the other hand, there are automobile manufacturers in Canada which are subsidiaries of\ncompanies based in other countries and which do not enjoy the import duty exemption.\n10.42 We consider that, for the purpose of determining whether the limitation of eligible importers\nhas an impact on the origin of products imported under the import duty exemption, the foreign\naffiliation of automobile manufacturers in Canada which benefit from the import duty exemption, as\ncompared with the foreign affiliation of automob ile manufacturers who are not entitled to the\nexemption, is of particular significance when viewed in conjunction with the evidence before us\nregarding the predominantly, if not exclusively, \"intra-firm\" character of trade in automotive products.\n10.43 In this regard, we note the arguments and evidence presented by the complainants that the\nglobal automotive industry is highly integrated and characterized by a high degree of intra-firm trade.\nIn particular, evidence adduced in this proceeding shows that the import patterns of the major\nautomotive corporations in Canada are such that they import only their own make of motor vehicles\nand those of related companies.\n825 Thus, General Motors in Canada imports only GM motor vehicles\nand those of its affiliates; Ford in Canada imports only Ford motor vehicles and those of its affiliates;\nthe same is true of Chrysler and of Volvo. These four companies all have qualified as beneficiaries of\nthe import duty exemption. In contrast, other motor vehicle companies in Canada, such as Toyota,\nNissan, Honda, Mazda, Subaru, Hyundai, Volkswag en and BMW, all of which also import motor\nvehicles only from related companies, do not benefit from the import duty exemption. The evidence\nalso shows that General Motors has imported Saabs and Suzukis duty free into Canada and that\nGeneral Motors has an ownership in the foreign producers of these vehicles. Similarly, between\n1971-1993 when Mitsubishi and Chrysler ran a joint venture, Chrysler imported motor vehicles from\nMitsubishi into Canada duty-free, but these imports ceased after the termination of the joint-venture\naffiliation.\n10.44 We further note the statement by Canada that it is characteristic of the globalized automotive\nindustry that there be some sort of capital, ma nufacturing or similar relationship between the\nautomobile manufacturers and companies from which they import.\n826 We also note that, as part of its\ndefence to the claims raised under Article II of the GATS, Canada stresses the vertical integration\nbetween distributors and manufacturers of motor vehicles and the fact that distributors will not import\nand distribute motor vehicles produced by other manufacturers unless there is that capital,\nmanufacturing or similar relationship.\n10.45 We conclude from this analysis that the lim itation of the eligibility for the import duty\nexemption to certain importers in Canada who are affiliated with manufacturers in certain countries\naffects the geographic distribution of the imports of motor vehicles under the import duty exemption.\n\n824 We note the recent changes that have occurred in the ownership of Chrysler and Volvo, as described\nin the factual arguments section of this report, and, in the case of Volvo, the implications of these changes for its\nstatus as a beneficiary of the import duty exemption.\n825 See Exhibit JPN-10.\n826 Supra para.7.119.\n\nWhile these eligible importers are not in law or in fact prevented from importing vehicles under the\nexemption from any third country, in view of thei r foreign affiliation and the predominantly, if not\nexclusively, \"intra-firm\" character of trade in this sector, imports will tend to originate from countries\nin which the parent companies of these manufacturers, or companies related to these parent\ncompanies, own production facilities. Whether or not a like product of a WTO Member in practice\nbenefits from the import duty exemption depends upon whether producers in the territory of that\nMember are related to any of the eligible Canadian motor vehicle manufacturers. Thus, in reality the\nconditions on which Canada accords the import duty exemption on motor vehicles entail a distinction\nbetween exporting countries depending upon whether or not producers in such countries are related to\nthe eligible manufacturers. We therefore consider that , in a context of intra-firm trade, the limitation\nof the availability of the import duty exempti on to certain manufacturers, including fully-owned\nsubsidiaries of firms based in a very limited number of third countries, discriminates as to the origin\nof products which will benefit from the import duty exemption.\n10.46 We note Canada's argument that the origin of products imported under the import duty\nexemption is determined by commercial decisions of the importers and that such decisions cannot be\nthe basis for finding a violation of Article I:1. In this regard, we wish to stress that, in finding that the\nconditions attached to the import duty exemption discriminate as to the origin of products imported\nunder this exemption, we are not denying that the decisions taken by individual importers as to the\nsourcing of their supplies are commercial decisions in which the Government of Canada is not\ninvolved. In our view, however, the issue is no t whether the Government of Canada is somehow\ndirecting importers to import from particular sources; it clearly is not. While there is no involvement\nof the Government of Canada in decisions by individual importers, what is attributable to the\nGovernment of Canada is that, as a result of the limitation of the number of eligible importers, the\ngeographic distribution of imports benefitting from the import duty exemption is determined by the\ncommercial decisions of a closed category of importers mainly consisting of subsidiaries of firms\nbased in certain countries, rather than by the commercial decisions of a broader, open-ended group of\nimporters.\n10.47 We have carefully considered the evidence provid ed by the parties with respect to the origin\nof imports under the import duty exemption. In this respect, we note in particular the argument of\nCanada that the available evidence, such as the data contained in Canada's Figure 4, shows that\nimports under the import duty exemption originate from a number of countries, including Japan,\nBelgium and Sweden, and that in recent years imports from Japan have accounted for a greater\npercentage of imports under the import duty exemption than imports from some other countries, such\nas Sweden, Belgium and the United Kingdom.\n10.48 We consider that the evidence presented by Canada shows that the conditions attached to the\nimport duty exemption do not prevent imports of motor vehicles from a range of countries, including\nthe complainants, from benefitting from the exemption. This evidence also confirms the point made\nby Canada that the eligible manufacturers have affiliations with companies in a range of countries. At\nthe same time, we do not believe that these data are in contradiction with our view that the import\nduty exemption favours products of certain countri es depending upon the affiliation of producers\nlocated in those countries to the importers in Canada who are eligible for the import duty exemption.\nWe note in this connection that other data before us, presented by the European Communities and\nJapan, reveal very significant differences between the percentages of imports of automobiles from\nindividual countries that have benefitted from the import duty exemption. The difference between the\nUnited States, Mexico, Sweden and Belgium, on the one hand, and other European countries and\nJapan on the other - not to mention other major motor vehicle producers such as Korea - is\nparticularly striking.\n827 We also consider significant the data presented by the European Communities\nand Japan regarding imports of automobiles from different sources as percentages of total imports\n\n827 Infra EC's Table 2, Japan's Table 6.\n\nunder the import duty exemption. 828 We therefore believe that the fact that imports under the import\nduty exemption have originated from a number of countries, as a consequence of the capital\nrelationship between eligible importers and producers in those countries, does not warrant a\nconclusion that the import duty exemption is accorded on equal terms to like products of different\norigin.\n10.49 As explained above, our view of the discriminatory character of the import duty exemption is\nbased on an analysis of the consequences, in the context of an industry characterized by intra-firm\ntrade, of the limitation of the number of eligible importers to manufacturers with particular foreign\naffiliations. We believe that, while not of decisive importance, the historical context of the import\nduty exemption provides further support for this view. We recall that this measure stems from a\nbilateral agreement between Canada and the United States designed to resolve a long-standing trade\ndispute between Canada and the United States over trade in automotive products. This agreement was\ndesigned inter alia to achieve rationalization of production in the North-American market. From the\nperspective of Canada this involved the granting of import duty exemptions as an encouragement to\nUS owned motor vehicle manufacturers to expand their production operations in Canada. We\ntherefore consider that at the outset the import duty exemption was expected to benefit mainly imports\nfrom particular sources.\n10.50 In light of the foregoing considerations, we find that, by reserving the import duty exemption\nprovided for in the MVTO 1998 and the SROs to certain importers, Canada accords an advantage to\nproducts originating in certain countries which advantage is not accorded immediately and\nunconditionally to like products originating in the territories of all other WTO Members.\nAccordingly, we find the application of this measure to be inconsistent with Canada's obligations\nunder Article I:1of the GATT.\n(d) Applicability of Article XXIV of the GATT\n10.51 Having found that the import duty exemption is inconsistent with Article I:1 of the GATT, we\nnow turn to the arguments of the parties with respect to the applicability of Article XXIV to the\nexemption.\n10.52 We note that Canada raises Article XXIV in response to the complaint of the European\nCommunities that Canada has accorded duty-free treatment on a basis inconsistent with Article I of\nthe GATT, because most of the vehicles that receive duty-free treatment originate in the United States\nor Mexico. Canada notes that it had formed a free-trade area with the United States and Mexico and,\ntherefore, granting duty-free treatment to products of its free-trade partners is exempt from Article I:1\nby reason of Article XXIV.\n10.53 The European Communities submits that there is currently no free-trade area between Mexico\nand Canada; that the import duty exemption is neither part of nor required by NAFTA; that, to the\nextent the import duty exemption is based on an international agreement, that agreement – the Auto\nPact – lacks the necessary coverage to bring it wi thin the ambit of Article XXIV; and that the import\nduty exemption is not a measure necessary for the formation of a free-trade area.\n10.54 Canada contests the arguments of the European Communities, indicating that there is no\ndoubt about the existence of a free-trade area between Canada, the United States and Mexico; that\nArticle XXIV status does not require the total elimination of all duties among the members of a free-\ntrade area; that the European Communities is in erro r in arguing that the measures in dispute are not\npart of NAFTA because the NAFTA specifically prov ides for the continuation of duty-free treatment\npursuant to the Auto Pact; that in any event nothing in Articles I or XXIV states that preferential duty-\nfree treatment is exempt from Article I only to the extent that it is \"part of\" or \"required by\" the\n\n828 Infra EC's Table 1, Japan's \"New\" Figure 4.\n\nprincipal agreement establishing the free-trade area, and that the objective of a free-trade area is, if\nnothing else, duty-free treatment among its Members.\n10.55 We recall that in our analysis of the impact of the conditions under which the import duty\nexemption is accorded, we have found that these conditions entail a distinction between countries\ndepending upon whether there are capital relationships of producers in those countries with eligible\nimporters in Canada. Thus, the measure not only grants duty-free treatment in respect of products\nimported from the United States and Mexico by manufacturer-beneficiaries; it also grants duty-free\ntreatment in respect of products imported from third countries not parties to a customs union or free-\ntrade area with Canada. The notion that the import duty exemption involves the granting of duty-free\ntreatment of imports from the United States and Mexico does not capture this aspect of the measure.\nIn our view, Article XXIV clearly cannot justify a measure which grants WTO-inconsistent duty-free\ntreatment to products originating in third countries not parties to a customs union or free trade\nagreement.\n10.56 We further note that the import duty exemption does not provide for duty-free importation of\nall like products originating in the United States or Mexico and that whether such products benefit\nfrom the exemption depends upon whether they are imported by certain motor vehicle manufacturers\nin Canada who are eligible for the exemption. While in view of the particular foreign affiliation of\nthese manufacturers, the exemption will mainly benefit products of the United States and Mexico,\nproducts of certain producers in these countries who have no relationship with such manufacturers are\nunlikely to benefit from the exemption. Thus, in practice the import duty exemption does not apply to\nsome products that would be entitled to duty-free treatment if such treatment were dependant solely\non the fact that the products originated in the United States or Mexico. We thus do not believe that\nthe import duty exemption is properly characterized as a measure which provides for duty-free\ntreatment of imports of products of parties to a free-trade area.\n10.57 Based on the foregoing considerations, we find that Article XXIV of the GATT does not\nprovide a justification for the inconsistency with Article I of the import duty exemption made\npursuant to the measures at issue. We see no need to address other issues raised by the parties\nregarding the application of Article XXIV to the import duty exemption.\n2. Claims Under Article III:4 of the GATT and the TRIMs Agreement\n10.58 The claims presented under Article III:4 of the GATT pertain to conditions concerning the\nlevel of Canadian value added and the maintenance of a certain ratio between the net sales value of\nvehicles produced in Canada and the net sales value of vehicles sold for consumption in Canada.\n10.59 We note that the complainants have also raised claims under the TRIMs Agreement with\nrespect to these aspects of the measures at issue in this dispute. Both complainants claim that the\nconditions regarding Canadian value added are inconsistent with Article 2.1 of the TRIMs Agreement.\nThe European Communities claims that the conditions regarding the maintenance of a ratio between\nthe net sales value of motor vehicles produced in Canada and the net sales value of motor vehicles\nsold for consumption in Canada are also inconsistent with that provision.\n10.60 We note that, in two recent dispute settlement proceedings, consideration has been given to\nthe issue of the sequence of the examination of claims raised with respect to the same measure under\nArticle III:4 of the GATT and the TRIMs Agreement.\n10.61 In EC – Bananas III (ECU), claims were raised under Article III:4 of the GATT and\nArticle 2.1 of the TRIMs Agreement regarding aspects of the European Communities' import\nlicensing procedures for bananas. The panel in that dispute decided to treat the claims under Article\n2.1 of the TRIMs Agreement together with its consideration of the claims under Article III:4 of the\n\nGATT.829 The panel found that the allocation to certain operators of a percentage of the licences\nallowing the importation of third-country and non-traditional ACP bananas at in-quota tariff rates was\ninconsistent with the requirements of Article III:4 of the GATT. 830 In light of that finding, the panel\ndid not consider it necessary to make a specific ruling on whether this aspect of these import licensing\nprocedures was also inconsistent with Article 2.1 of the TRIMs Agreement.831\n10.62 In Indonesia – Autos , claims under Article III:4 of the GATT and Article 2.1 of the TRIMs\nAgreement were raised with respect to certain local content measures applied by Indonesia regarding\nautomobiles. The panel in that dispute decided that it should first examine the claims under the\nTRIMs Agreement on the grounds that \"the TRIMs Agreement is more specific than Article III:4 as\nfar as the claims under consideration are concerned\". 832 After finding that the measures at issue were\ninconsistent with Article 2.1 of the TRIMs Agreement, 833 the panel determined that it was not\nnecessary to make a finding on the question of whether these measures were inconsistent with\nArticle III:4 of the GATT.834\n10.63 In the present dispute, the parties have not explicitly addressed this question of which of the\nclaims raised under Article III:4 of the GATT and Article 2.1 of the TRIMs Agreement should be\nexamined first. Implicit in the order in which they have presented their claims is the view that these\nclaims should be addressed first under Article III:4 of the GATT. While we are aware of the\nstatement made by the Appellate Body in EC – Bananas III , and referred to by the panel in\nIndonesia – Autos, that a claim should be examined first under the agreement which is the most\nspecific with respect to that claim, we are not persuaded that the TRIMs Agreement can be properly\ncharacterized as being more specific than Article III:4 in respect of the claims raised by the\ncomplainants in the present case. Thus, we note that there is disagreement between the parties not\nonly on whether the measures at issue can be considered to be \"trade-related investment measures\"\nbut also on whether the Canadian value added requirements and ratio requirements are explicitly\ncovered by the Illustrative List annexed to the TRIMs Agreement. It would thus appear that,\nassuming that the measures at issue are \"trade-rel ated investment measures\", their consistency with\nArticle III:4 of the GATT may not be able to be determined simply on the basis of the text of the\nIllustrative List but may require an analysis base d on the wording of Article III:4. Consequently, we\ndoubt that examining the claims first under the TRIMs Agreement will enable us to resolve the\ndispute before us in a more efficient manner than examining these claims under Article III:4.\n10.64 In light of the foregoing considerations, we deci de that, consistent with the approach of the\npanel in EC – Bananas III , we will examine the claims in question first under Article III:4 of the\nGATT.\n(a) CVA requirements\n10.65 The European Communities and Japan claim that Canada acts inconsistently with Article III:4\nof te GATT by reason of conditions with respect to the level of CVA requirements as set forth in the\nMVTO 1998, SROs and certain Letters of Undertaking.\n10.66 We first examine the claims raised with regard to the CVA requirements provided for in the\nMVTO 1998 and the SROs and next examine the claims raised with regard to the CVA requirements\ncontained in the Letters of Undertaking.\n\n882299 Panel Report on EC – Bananas III (ECU), supra note 269, para. 7.168.\n883300 Ibid., para. 7.182.\n883311 Ibid., paras. 7.185-7.187.\n883322 Panel Report on Indonesia – Autos, supra note 270, para. 14.63.\n883333 Ibid., para. 14.91.\n883344 Ibid., para. 14.93.\n\n(i) CVA requirements provided for in the MVTO 1998 and in the SROs\n10.67 The MVTO 1998 provides that one of the conditions which must be met by a manufacturer in\norder to be eligible for duty-free importation of motor vehicles is that the Canadian value added in the\nproduction of vehicles of a class is equal to or greater than the Canadian value added in respect of all\nvehicles of that class produced in Canada by the manufacturer in the base year. 835 The term \"base\nyear\" in this context means the 12 month period beginning on August 1, 1963 and ending on July 31,\n1964. Because the Canadian value added requirement is expressed in terms of value added in the base\nyear, it is essentially a requirement to achieve a fixed nominal amount of value added.\n10.68 CVA requirements as a condition for eligibility for duty-free importation of motor vehicles\nare also provided for in the SROs. 836 In SROs issued before 1984, these CVA requirements are\nexpressed in terms of a combination of a specified percentage of cost of production and a level of\nCanadian value added achieved during the base period applicable to each individual SRO. SROs\nissued after 1984 contain CVA requirements expressed in terms of a percentage of cost of sales.837\n10.69 In this connection, the term \"Canadian value added\" has been defined as including (i) the\ncosts of parts produced in Canada and of materials of Canadian origin that are incorporated in the\nmotor vehicles; (ii) direct labour costs incurred in Canada; (iii) manufacturing overheads incurred in\nCanada; (iv) general and administrative expenses incurred in Canada that are attributable to the\nproduction of motor vehicles; (v) depreciation in respect of machinery and permanent plant equipment\nlocated in Canada that is attributable to the production of motor vehicles, and (vi) a capital cost\nallowance for land and buildings in Canada that are used in the production of motor vehicles.\n838\n10.70 The complainants claim that the CVA requirements in the MVTO 1998 and the SROs are\ninconsistent with Article III:4 by reason of the treatment accorded to imported parts, materials and\nnon-permanent equipment for use in the production of motor vehicles.\n10.71 Article III:4 of the GATT provides in relevant part:\n\"The products of the territory of any cont racting party imported into the territory of\nany other contracting party shall be accorded treatment no less favourable than that\naccorded to like products of national origin in respect of all laws, regulations and\nrequirements affecting their internal sale, offering for sale, purchase, transportation,\ndistribution or use.\"\n10.72 Accordingly, in order to substantiate this cl aim, it must be demonstrated that (i) the CVA\nrequirements involve a law, regulation or requirement affecting the internal sale, offering for sale,\npurchase, transportation, distribution or use of such imported parts, materials and non-permanent\nequipment, and (ii) this law, regulation or requirement accords less favourable treatment to imported\nparts, materials and non-permanent equipment products than that accorded to like domestic\nproducts.\n839\n10.73 We note that it has not been contested in this dispute that, as stated by previous GATT and\nWTO panel and appellate body reports, Article III:4 applies not only to mandatory measures but also\nto conditions that an enterprise accepts in order to receive an advantage, 840 including in cases where\n\n835 Supra para. 2.23.\n836 Supra para. 2.32.\n837 Supra para. 2.33.\n838 Supra para. 2.26.\n839 See, e.g., Panel Report on US – Gasoline, supra note 306, para. 6.5, and Panel Report on Japan –\nFilm, supra note 93, para. 10.369.\n840 See, e.g., Panel Report on EEC – Parts and Components, supra note 127, para. 5.21.\n\nthe advantage is in the form of a benefit with respect to the conditions of importation of a product. 841\nThe fact that compliance with the CVA requirements is not mandatory but a condition which must be\nmet in order to obtain an advantage consisting of the right to import certain products duty-free\ntherefore does not preclude application of Article III:4.\n10.74 We further note that the parties agree that the MVTO 1998 and the SROs are legal\ninstruments that fall within the scope of the notio n of \"laws, regulations or requirements\" within the\nmeaning of Article III:4. In addition, it has not been contested that the distinction made between\ndomestic products and imported products in the definition of Canadian value added is based solely on\norigin and that, consequently, there are imported products which must be considered to be like the\ndomestic products the costs of which are included in the definition of Canadian value added.\n10.75 However, the parties disagree on whether or not the CVA requirements affect the \"internal\nsale,…or use\" of imported products within the meaning of Article III:4 and provide less favourable\ntreatment in this respect to imported products than to like domestic products. The arguments of the\nparties on these issues can be briefly summarized as follows.\n10.76 Central to the claim of the European Communities and Japan is the fact that the definition of\nCanadian value added for purposes of the MVTO 1998 and the SROs includes the costs of domestic\nparts, materials and non-permanent equipment, but excludes the costs of like imported products. The\ncomplainants argue that, as a result of the exclusion of imported products from the definition of\nCanadian value added, the CVA requirements affect the \"internal sale,..or use\" of products because\nthey modify the conditions of competition betw een domestic and imported products, and that the\nCVA requirements accord less favourable treatment to imported products by providing an incentive to\nuse domestic products. They reject Canada's argument that, because the CVA requirements do not\nstipulate that use of domestic products is a necessary condition and can be easily met on the basis of\nlabour costs alone, they play no role in parts sourcing decisions, and therefore do not affect the\n\"internal sale,…or use\" of products. According to the complainants, this argument disregards the\ndiscrimination against the use of imported products resulting from the exclusion of the costs of\nimported products from the definition of Canadian value added. In addition, the complainants\nconsider that this argument is inconsistent with the principle articulated in GATT and WTO case law\naccording to which Article III should be interpreted in light of its objective of protecting the effective\nequality of competitive opportunities and with the principle that the actual trade effects of a measure\nare in this respect of no legal relevance. The comp lainants also contest that the evidence adduced by\nCanada actually shows that motor vehicle manufacturers can easily meet the CVA requirements on\nthe basis of labour costs alone.\n10.77 Canada argues that the CVA requirements in the MVTO 1998 and the SROs do not in law\nrequire the use of domestic products because they can be met on the basis of other elements of value\nadded, such as labour costs. Canada also submits that, as a factual matter, evidence shows that the\nrequired CVA amounts are at such a low level that they can be easily met through labour costs alone.\nBecause the use of domestic products is not in law or in fact required, the CVA requirements do not\naffect the conditions of competition between imported and domestic products and do not play a role in\nparts sourcing decisions of the motor vehicle manufacturers. As a consequence, the CVA\nrequirements do not affect the \"internal sale,…or use\" of imported products, nor do they provide less\nfavourable treatment to imported products. Thus, in the view of Canada, there is an important\ndistinction to be made between, on the one hand, a value added requirement which does not\nnecessitate the use of domestic products and, on the other, a local content requirement which can only\nbe met by the use of domestic products. According to Canada, the notion that the mere inclusion of\ndomestic products in the definition of a value added requirement is per se inconsistent with\nArticle III:4 is contradicted by relevant GATT and WTO panel reports and is inconsistent with\n\n841 See, e.g., Appellate Body Report on EC – Bananas III, supra note 49, para. 211.\n\nestablished principles of burden of proof in WTO dispute settlement because it would free\ncomplainants from having to demonstrate that contested measures have any effects on the conditions\nof competition between imported and domestic products. Canada submits that the Illustrative List in\nthe TRIMs Agreement confirms its view that the use of domestic products must be required in order\nfor a local content or value added requirement to be inconsistent with Article III:4.\n10.78 In our examination of the merits of these arguments, we take into account certain well\nestablished considerations regarding the interpretation of Article III:4. The \"no less favourable\ntreatment obligation\" in Article III:4 has been c onsistently interpreted as a requirement to ensure\neffective equality of opportunities between imported products and domestic products. In this respect,\nit has been held that, since a fundamental objective of Article III is the protection of expectations on\nthe competitive relationship between imported and domestic products, a measure can be found to be\ninconsistent with Article III:4 because of its potential discriminatory impact on imported products.\n842\nThe requirement of Article III:4 is addressed to \"\"relative competitive opportunities created by the\ngovernment in the market, not to the actual choices made by enterprises in that market.\" 843 Both in\nrelation to Article III:2 and Article III:4 it has been established that the actual trade effects of a\ndisputed measure are not a decisive criterion in determining whether the requirements of these\nprovisions are met in a given case.\n844 Finally, as stated by the Appellate Body, a determination of\nwhether there has been a violation of Article III:4 does not require a separate consideration of whether\na measure affords protection to domestic production.845\n10.79 As noted above, Canada's principal argument in response to the claim that the CVA\nrequirements provide less favourable treatment with in the meaning of Article III:4 is that these\nrequirements do not affect the \"internal sale,… or use\" of imported products because they do not in\nlaw or in fact require the use of domestic products and therefore play no role in the parts sourcing\ndecisions of manufacturers.\n10.80 With respect to whether the CVA requirements affect the \"internal sale,…or use\" of products,\nwe note that, as stated by the Appellate Body, the ordinary meaning of the word \"affecting\" implies a\nmeasure that has \"an effect on\" and thus indicates a broad scope of application.\n846 The word\n\"affecting\" in Article III:4 of the GATT has been interpreted to cover not only laws and regulations\nwhich directly govern the conditions of sale or purchase but also any laws or regulations which might\nadversely modify the conditions of competition between domestic and imported products.847\n10.81 We note that it is undisputed that the definition of Canadian value added includes the costs of\ndomestic, i.e. Canadian, parts, materials and non-permanent equipment but excludes the costs of\nimported parts, materials and non-permanent equipment. Given that the CVA requirements are\namong the conditions that must be met to obtain the benefit of duty-free importation of motor\nvehicles, the exclusion of imported products from the calculation of the Canadian value added means\nthat, whereas the use of domestic products by a manufacturer in Canada can contribute to the\nfulfilment of a condition necessary to obtain an advantage, the use of imported products cannot\ncontribute to the fulfilment of this condition.\n10.82 In light of our interpretation of the word \"affecting\" in Article III, we consider that a measure\nwhich provides that an advantage can be obtained by using domestic products but not by using\nimported products has an impact on the conditions of competition between domestic and imported\n\n842 Panel Report on US – Section 337, supra note 280, paras. 5.11 and 5.13.\n843 Panel Report on US – Malt Beverages, supra note 427, para. 5.31.\n844 See, e.g., Appellate Body Report on Japan – Alcoholic Beverages, supra note 271, p. 16; Panel\nReport on EC – Bananas III (ECU), supra note 269, para. 7.179.\n845 Appellate Body Report on EC – Bananas III, supra note 49, para. 216.\n846 Ibid., para. 220.\n847 Panel Report on Italian Agricultural Machinery, supra note 390, para. 12.\n\nproducts and thus affects the \"internal sale,… or use\" of imported products, even if the measure\nallows for other means to obtain the advantage, such as the use of domestic services rather than\nproducts. Consequently, the CVA requirements, which confer an advantage upon the use of domestic\nproducts and deny that advantage in case of the use of imported products, must be regarded as\nmeasures which \"affect\" the \"internal sale,… or use\" of imported products, notwithstanding the fact\nthat the CVA requirements do not in law require the use of domestic products.\n10.83 We also see no merit in Canada's argument that the CVA requirements do not in practice\n\"affect\" the internal sale or use of imported parts and materials because the CVA levels are so low that\nthey can be easily met on the basis of labour costs alone. As discussed above, based on the ordinary\nmeaning of the term \"affecting\", the CVA requirements must be considered to affect the internal sale\nor use of imported products because they have an effect on the competitive relationship between\nimported and domestic products by conferring an advantage upon the use of domestic products while\ndenying that advantage if imported products are used. Thus, we consider that the fact that it is easier\nto meet the CVA requirements and thus to obtain the benefit of the import duty exemption if domestic\nproducts are used than if imported products are used is sufficient to find that these requirements affect\nthe internal sale or use of products, and we do not believe that we need to examine how important the\nCVA requirements are under present circumstances as a factor influencing the decisions of motor\nvehicle manufacturers in Canada regarding the choice between domestic parts, materials and non-\npermanent equipment, on the one hand, and imported parts, materials and non-permanent equipment,\non the other.\n10.84 The idea that a measure which distinguishes between imported and domestic products can be\nconsidered to affect the internal sale or use of imported products only if such a measure is shown to\nhave an impact under current circumstances on decisions of private firms with respect to the sourcing\nof products is difficult to reconcile with the concept of the \"no less favourable treatment\" obligation in\nArticle III:4 as an obligation addressed to governments to ensure effective equality of competitive\nopportunities between domestic and imported products, and with the principle that a showing of trade\neffects is not necessary to establish a violation of this obligation. In this respect, it should be\nemphasized that, contrary to what has been argued by Canada, the present case does not involve \"the\npossibility of a future change in circumstances creating the potential for discrimination\" or\n\"discrimination that might exist after a change in circumstances that could occur at some unspecified\ntime in the future.\"\n848 Rather, the present case clearly involves formally different treatment of\nimported and domestic products albeit that the actual trade effects of this different treatment may be\nminimal under current circumstances. We therefore disagree with Canada's assertion that the CVA\nrequirements do not entail a \"current potential for discrimination under present circumstances.\"\n849 As\na consequence, whether or not in practice motor vehicle manufacturers can easily meet the CVA\nrequirements of the MVTO 1998 and the SROs on the basis of labour costs alone does not alter our\nfinding that the CVA requirements affect the internal sale or use of products. We therefore do not\nconsider it necessary to examine the factual issues raised by the parties in support of their different\nviews on this matter.\n10.85 In light of the foregoing considerations, we find that the CVA requirements affect the internal\nsale or use in Canada of imported parts, materials and non-permanent equipment for use in the\nproduction of motor vehicles. We further consider that the CVA requirements accord less favourable\ntreatment within the meaning of Article III:4 to imported parts, materials and non-permanent\nequipment than to like domestic products because, by conferring an advantage upon the use of\ndomestic products but not upon the use of imported products, they adversely affect the equality of\ncompetitive opportunities of imported products in relation to like domestic products.\n\n848 Supra paras. 6.335and 6.336.\n849 Supra para. 6.336.\n\n10.86 In the latter regard, we note Canada's argument that GATT and WTO panel reports and the\nIllustrative List in the TRIMs Agreement support its view that a local content requirement or a value\nadded requirement is inconsistent with Article III:4 only if the use of domestic products is required.\n10.87 We find this argument not persuasive. First, the equality of competitive opportunities between\ndomestic and like imported products is affected if a measure accords an advantage to the sale or use of\ndomestic products but not to the sale or use of lik e imported products, regardless of whether or not\nthat advantage can also be obtained by other means. The less favourable treatment of imported\nproducts which is the result of the denial of the advantage in case of sale or use of imported products\nis not negated by the fact that the advantage may also be obtained by other means than sale or use of\ndomestic products. We therefore find that Canada's argument is unsupported by the plain meaning of\nthe \"no less favourable treatment\" obligation in Article III:4.\n10.88 Second, while it is true that GATT and WTO panel reports which have found local content\nrequirements to be in violation of Article III:4 have dealt with conditions which could only be met\nthrough the use of domestic products,\n850 nothing in the reasoning in these reports suggests that they\nsupport the general proposition that measures relating to local content or value added are inconsistent\nwith Article III:4 only if the use of domestic products is a necessary condition.\n10.89 Third, as to Canada's argument that the Illustrative List in the TRIMs Agreement supports its\nview that a measure linking an advantage to the use of domestic products is inconsistent with\nArticle III:4 only if the measure \"requires\" the use of domestic products, we consider that by\ndefinition the illustrative nature of the List means that it does not constitute an exhaustive statement of\nmeasures incompatible with Article III:4.\n10.90 In light of the foregoing considerations, we find that Canada acts inconsistently with\nArticle III:4 of the GATT by according less favourable treatment to imported parts, materials and\nnon-permanent equipment than to like domestic products with respect to their internal sale or use as a\nresult of the application of CVA requirements as one of the conditions for eligibility for the import\nduty exemption of motor vehicles under the MVTO 1998 and the SROs.\n10.91 In light of the finding in the preceding paragraph, we do not consider it necessary to make a\nspecific ruling on whether the CVA requirements provided for in the MVTO 1998 and the SROs are\ninconsistent with Article 2.1 of the TRIMs Agreement. We believe that the Panel's reasoning in EC –\nBananas III as to why it did not make a finding under the TRIMs Agreement after it had found that\ncertain aspects of the EC' licensing procedures were inconsistent with Article III:4 of the GATT also\napplies to the present case.\n851 Thus, on the one hand, a finding in the present case that the CVA\nrequirements are not trade-related investment measures for the purposes of the TRIMs Agreement\nwould not affect our finding in respect of the inconsistency of these requirements with Article III:4 of\nthe GATT since the scope of that provision is not limited to trade-related investment measures. On\nthe other hand, steps taken by Canada to bring these measures into conformity with Article III:4\nwould also eliminate the alleged inconsistency with obligations under the TRIMs Agreement.\n(ii) Commitments with regard to CVA contained in certain Letters of Undertaking\n10.92 In addition to the provisions regarding Canadian value added contained in the MVTO 1998\nand the SROs, the complainants contest the consistency with Article III:4 of the GATT of conditions\nregarding Canadian value added contained in certain Letters of Undertaking, dated 13 and 14 January\n\n850 Panel Report on Italian Agricultural Machinery, supra note 390; Panel Report on Canada – FIRA,\nsupra note 126; Panel Report on Indonesia – Autos, supra note 270.\n885511 Panel Report on EC – Bananas III (ECU), supra note 269, para. 7.186.\n\n1965, which were addressed by four Canadian motor vehicle producers852 to the Canadian Minister of\nIndustry.\n10.93 In response to a question from the Panel, Canada indicated that other manufacturers had also\nsubmitted letters containing undertakings regarding Canadian value added. Canada subsequently\nprovided copies of eighteen such letters writte n over the period 1965-1984. We consider that, since\nthe complainants in their arguments specifically mention only the four Letters of Undertaking written\non 13 and 14 January 1965, these other letters are not at issue.\n10.94 The Letters written in January 1965 set forth certain undertakings by the four companies that\nwere additional to the requirement in the proposed Au to Pact to maintain Canadian value added at a\nlevel equal to or greater than the level of Canadian value added in the period 1 August 1963-31 July\n1964. Specifically, the Letters state that the manufacturers will: (i) increase in each ensuing model\nyear over the base model year Canadian value added in the production of vehicles and original\nequipment parts by an amount equal to 60 per cent of the growth in their market for automobiles sold\nfor consumption in Canada and by an amount equal to 50 per cent of the growth in their market for\ncommercial vehicles sold for consumption in Canada, and (ii) achieve a specified increase in the\nannual Canadian value added by the end of the model year 1968.\n10.95 The information available to the Panel indicates that the undertakings made in 1965 by the\nfour motor vehicle producers have not been revoked or terminated. A publication by Industry Canada\ndated 10 June 1998 containing background information on the Auto Pact states:\n\"Assemblers also undertook to achieve CVA in vehicle assembly and/or parts\nproduction by a fixed dollar amount set for each company (1964 value) plus 60\npercent of the annual growth in the value of their Canadian sales of cars, by 50\npercent of growth in truck sales, and by 40 percent of growth in bus sales. These\nconditions are outlined in a letter of undertaking by each company and, while non-\nbinding, typically have been met.\"\n10.96 Japan and the European Communities submit that the conditions in these Letters with respect\nto the achievement of Canadian value added are \"requirements\" within the meaning of Article III\nwhich accord less favourable treatment to imported parts and materials than to like domestic products\nwith respect to their internal sale or use. Ca nada argues that the Letters are not \"requirements\"\ncovered by Article III:4.\n10.97 It follows that we must first address the question of whether Article III:4 is applicable to the\nLetters of Undertaking as \"requirements.\"\n853 There is no dispute between the parties that these Letters\nare not \"laws\" or \"regulations\" for purposes of Article III:4.\n10.98 While there is no disagreement between the parties as to the principle that it is possible for\naction of private parties to constitute a \"requirement\" within the meaning of Article III:4, they differ\non whether or not in the case at hand the involvement of the Government of Canada has been such\nthat the conditions mentioned in the Letters can be properly treated as \"requirements.\"\n10.99 The European Communities submits, first, that the Letters are acts which are attributable to\nCanada because of the role played by Canadian authorities in the submission of the Letters. In the\n\n852 General Motors of Canada, Ltd., Ford Motors Co. of Canada, Ltd., Chrysler Canada, Ltd., and\nAmerican Motors (Canada) Ltd.\n853 We note that the parties have also expressed different views on the more general issue of whether\nthe Letters constitute \"measures\" which are subject to WTO disciplines. However, in connection with the\nclaims presented under Article III:4 we only need to consider whether these conditions constitute\n\"requirements\" within the meaning of that provision.\n\nview of the European Communities, the Letters were submitted in response to a request from the\nGovernment of Canada and their text was based on a model provided by the Canadian Ministry of\nIndustry; the commitments made in the Letters did not advance the commercial interests of the firms;\nand statements made by the chief executive officers of the firms in question in a debate on the Auto\nPact in the United States Congress indicate that the Letters were negotiated by the firms with the\nCanadian Ministry of Industry and that the Letters were regarded by Canada as a sine qua non for\nsigning the Auto Pact. Second, the European Communities argues that the wording of the Letters\nindicates that the commitments contained therein were regarded as binding obligations. Third, the\nEuropean Communities considers that the Letters are enforceable by the Government of Canada,\nnotwithstanding that there is not explicitly a sanction attached to the non-compliance with the\nconditions stipulated in the Letters. Because of the link between the submission of the Letters and the\nconclusion of the Auto Pact, the firms in question have assumed that in case of non-compliance with\nthe commitments given in the Letters, the Government of Canada would withdraw the import duty\nexemption. Finally, the European Communities refers to reporting and auditing procedures provided\nfor in the Letters and to steps taken by the Government of Canada to ascertain compliance with the\ncommitments contained in the Letters.\n10.100 Japan argues that the Letters of Undertaking were submitted by Canadian motor vehicle\nmanufacturers, at the request of the Government of Canada, in order to obtain the advantage of the\nimport duty exemption. Japan further submits that the commitments contained in the Letters are\nbinding, that the Letters contain audit and reporting requirements, and that there is no expiry date in\nthe Letters. In the view of Japan, the Letters are enforceable in that the Government of Canada can\nrevoke or amend the MVTO 1998 or the SROs in case of non-compliance with the Letters. It is\ntherefore irrelevant that the Letters have not been implemented in Canadian law and that the MVTO\n1998 and the SROs do not provide for sanctions in the event that the commitments contained in the\nLetters are not complied with.\n10.101 Canada denies that the Letters were required of the motor vehicle producers as a condition of\nCanada's signing the Auto Pact, that the Letters were negotiated between the Government of Canada\nand the firms in question, and that the firms have assumed that a failure to meet the commitments in\nthe Letters would result in a withdrawal of the impor t duty exemption. Canada explains that at the\nconclusion of the Auto Pact the Canadian Government sought assurances from the affected companies\nthat they understood the new system and provided them with a draft letter outlining what the\nrequirements would be under the Auto Pact and what it hoped would be achieved as a result. The\ncommitments contained in the Letters are statements of what was hoped to be achieved under\nCanada's implementation of the Auto Pact system. Canada submits that the Letters are not legally\nbinding under Canadian law. The Letters are not c ontracts or statutory instruments. Neither the\nGovernment of Canada nor the companies consider the Letters binding in any way. Canada also\nsubmits that the Letters are not enforceable because the Government of Canada lacks the legal\nauthority to deny the benefits under the MVTO or SROs for a failure to meet the commitments in the\nLetters. The Panel Reports on Canada – FIRA and on EEC – Parts and Components support the\nview that the Letters are not \"requirements\" with in the meaning of Articl e III:4 because compliance\nwith the Letters is neither legally enforceable nor a condition necessary to obtain an advantage.\nFinally, Canada points out that it does not gather information pertaining to status of compliance with\nthe commitments contained in the Letters.\n10.102 We note that several GATT and WTO Panel Reports have found that actions by private\nparties can constitute \"requirements\" within the meaning of Article III:4.\n10.103 The Panel Report in Canada – FIRA discusses the status of certain undertakings offered by\nforeign investors as \"requirements\" within the meaning of Article III:4:\n\n\"The Panel first examined whether the purchase undertakings are to be considered\n'laws, regulations or requirements' within the meaning of Article III:4. As both parties\nhad agreed that the Foreign Investment Review Act and the Foreign Investment\nReview Regulations –whilst providing for the possibility of written undertakings- did\nnot make their submission obligatory, the question remained whether the\nundertakings given in individual cases are to be considered \"requirements\" within the\nmeaning of Article III:4. In this respect the Panel noted that Section 9(c) of the Act\nrefers to \"any written undertakings…relating to the proposed or actual investment\ngiven by any party thereto conditional upon the allowance of the investment\" and that\nsection 21 of the Act states that 'where a person who has given a written\nundertaking…fails or refuses to comply with the undertaking' a court order may be\nmade \"directing that person to comply with the undertaking\". The Panel further noted\nthat written purchase undertakings –leaving aside the manner in which they may have\nbeen arrived at (voluntary submission, encouragement, negotiation, etc)- once they\nwere accepted, became part of the conditions under which the investment proposals\nwere approved, in which case compliance could be legally enforced. The Panel\ntherefore found that the word \"requirements\" as used in Article III:4 could be\nconsidered a proper description of existing undertakings.\"\n854\n10.104 The Panel Report on EEC – Parts and Components states the following:\n\"The Panel noted that Article III:4 refers to 'all laws, regulations or requirements\naffecting the internal sale, offering for sale, purchase, transportation, distribution or\nuse'. The Panel considered that the comprehensive coverage of 'all laws, regulations\nor requirements affecting (emphasis added) the internal sale, etc. of imported\nproducts suggests that not only requirements which an enterprise is legally bound to\ncarry out, such as those examined by the FIRA Panel (BISD 30S/140, 158), but also\nthose which an enterprise voluntarily accepts in order to obtain an advantage from the\ngovernment constitute 'requirements' within the meaning of that provision.\"\n855\n10.105 More recently, the question of the interpretation of the phrase \"laws, regulations and\nrequirements\" in Article III:4 was considered in the Panel Report on Japan – Film but the Panel did\nnot actually make findings on this question.856\n10.106 It is evident from the reasoning of the Panel Reports in Canada – FIRA and in EEC – Parts\nand Components that these Reports do not attempt to state general criteria for determining whether a\ncommitment by a private party to a particular course of action constitutes a \"requirement\" for\npurposes of Article III:4. While these cases are instructive in that they confirm that both legally\nenforceable undertakings and undertakings accepted by a firm to obtain an advantage granted by a\ngovernment can constitute \"requirements\" within the meaning of Article III:4, we do not believe that\nthey provide support for the proposition that either legal enforceability or the existence of a link\nbetween a private action and an advantage conferred by a government is a necessary condition in\norder for an action by a private party to constitute a \"requirement.\" To qualify a private action as a\n\"requirement\" within the meaning of Article III:4 means that in relation to that action a Member is\n\n854 Panel Report on Canada – FIRA , supra note 126, para. 5.4.\n855 Panel Report on EEC – Parts and Components, supra note 127, para. 5.21.\n856 The Panel stated: \"A literal reading of the words all laws, regulations and requirements in\nArticle III:4 could suggest that they may have a narrower scope than the word measure in Article XXIII:1(b).\nHowever, whether or not these words should be given as broad a construction as the word measure, in view of\nthe broad interpretation assigned to them in the cases cited above, we shall assume for the purposes of our\nanalysis that they should be interpreted as encompassing a similarly broad range of government action and\naction by private parties that may be assimilated to government action. \" Panel Report on Japan – Film , supra\nnote 93, para. 10.376.\n\nbound by an international obligation, namely to provide no less favourable treatment to imported\nproducts than to domestic products.\n10.107 A determination of whether private action amounts to a \"requirement\" under Article III:4\nmust therefore necessarily rest on a finding that there is a nexus between that action and the action of\na government such that the government must be held responsible for that action. We do not believe\nthat such a nexus can exist only if a government makes undertakings of private parties legally\nenforceable, as in the situation considered by the Panel on Canada – FIRA , or if a government\nconditions the grant of an advantage on undertakings made by private parties, as in the situation\nconsidered by the Panel on EEC – Parts and Components . We note in this respect that the word\n\"requirement\" has been defined to mean \"1. The action of requiring something; a request. 2. A thing\nrequired or needed, a want, a need. Also the action or an instance of needing or wanting something.\n3. Something called for or demanded; a condition which must be complied with.\"\n857 The word\n\"requirements\" in its ordinary meaning and in light of its context in Article III:4 clearly implies\ngovernment action involving a demand, request or the imposition of a condition but in our view this\nterm does not carry a particular connotation with respect to the legal form in which such government\naction is taken. In this respect, we consider that, in applying the concept of \"requirements\" in\nArticle III:4 to situations involving actions by privat e parties, it is necessary to take into account that\nthere is a broad variety of forms of government of action that can be effective in influencing the\nconduct of private parties.\n10.108 In light of these considerations, we proceed to analyze whether in the case at hand there is a\nconnection between the undertakings given by the four motor vehicle manufacturers and actions of\nthe Government of Canada such that these undertakings must be regarded as \"requirements\" within\nthe meaning of Article III:4. To this end, we consider first the arguments and evidence presented by\nthe parties with respect to the nature of the in volvement of the Government of Canada in the\nsubmission of the Letters. We next examine the arguments and evidence presented by the parties\nwith respect to the question as to whether or not the commitments contained in the Letters are binding\nand enforceable, and whether or not the Government of Canada monitors compliance with these\ncommitments.\n10.109 With respect to the circumstances surrounding th e submission of the Letters of Undertaking,\nthe evidence before us shows that the Letters were submitted by Canadian motor vehicle\nmanufacturers in response to a request made by the Government of Canada in the context of the\nanticipated conclusion of the Auto Pact between Canada and the United States.\n10.110 That the Letters were submitted in response to a request from the Canadian Government is\nevident from the text of the Letters. First, the opening sentence of one of these Letters reads:\n\"This letter is in response to your request for a statement with respect to the proposed\nagreement between the Governments of Canada and the United States concerning\ntrade and production in automotive products, as you have described it to us.\"\n10.111 Second, there is substantial similarity in structure and content and wording of the Letters. In\nthis regard, it has been confirmed by Canada in the proceedings before the Panel that the Government\nof Canada provided the motor vehicle manufacturers in question with a draft letter. Third, the text of\nthe Letters shows that the Canadian Government had made requests for specific commitments\nregarding Canadian value added.\n858 In the proceedings before the Panel, Canada has confirmed that\n\n857 The New Shorter Oxford English Dictionary (Clarendon Press, 1993) Vol. II, 2557.\n858 One of the Letters states: \"You have requested that we should increase Canadian value added in our\nproducts by $121 million between 1964 and the end of the model year 1968, as outlined under condition (4).\nAlso you have requested that the amount should be further increased to the extent required under condition (3)\nstated above.\"\n\nthe Government of Canada did request undertakings respecting Canadian value added. Finally,\ntestimony before the United States Congress of the chief executives of the companies in question also\nconfirms that the Letters were written in response to a request by the Government of Canada.859\n10.112 The European Communities and Canada disagree on the question of whether the Letters were\nthe subject of \"negotiations\" between the companies in question and the Government of Canada. 860\nWe believe that the evidence before us is not conclusive with respect to whether or not the Letters\nwere the subject of negotiations between the motor vehicle manufacturers and the Government of\nCanada. However, this lack of clarity as to whether or not the content of the Letters was the subject of\nnegotiations between the manufacturers and the Government of Canada does not detract from the\nundisputed evidence that the Letters were submitted in response to a request from the Government of\nCanada.\n10.113 Another relevant aspect of the role of the Government of Canada with regard to the\nsubmission of the Letters of Undertaking concerns the relationship between the submission of these\nLetters and the conclusion of the Auto Pact. In this respect, the evidence before us shows that the\nLetters were requested by the Government of Canada, and submitted by the companies in question, in\nconnection with the anticipated conclusion of the Auto Pact. The Letters were submitted several days\nbefore the signature of the Auto Pact. The opening sentence of each of the Letters refers to \"the\n\n859 Supra para. 5.62.\n860In support of its view that the Letters were negotiated with the Government of Canada, the European\nCommunities refers to the following statements made before the US Congress: \"The Canadian Government\nasked us to write them a letter stating our understanding of the provisions of the agreement as it was finally\ndetermined and to ask for our endorsement of the principles to the extent that we did understand them and\nassigned to us an objective whereby, over the 4 years that are involved in this agreement, we would undertake to\nincrease out Canadian production or our Canadian value.\"\n\"The agreement was entered into by Canada only after Canada received assurances from the Canadian\nvehicle manufacturers which were designed to protect and stimulate Canada's much smaller and less developed\nmanufacturing industry.\"\n\"…it ought to be a matter of record that there have been such conversations between the\nCanadian Government and each of the Canadian automobile manufacturers, and that the results of\nthose conversations –that is the letters of assurance, or statements of intentions, are an important part of\nthis agreement as a whole from the Canadian standpoint.\"\n\"…we knew during the course of the negotiations that went on for many, many months that\nthe Minister of Industry of Canada was holding conversations with the automobile manufacturing\ncompanies in Canada in respect of their intentions as to production under the differing conditions of the\nprospective agreement. …It took the Canadian government some time to formulate what was in the\nletters but I would say [that we became aware of the terms of the letters] in the winter certainly of\n1964. …I imagine that during the separate conversations that the companies had with the Minister of\nIndustry, that the discussion was perhaps a common one, and perhaps the Minister of Industry drafted a\nproposed letter that he discussed with each of them that had identical language in it, and that these\nletters were taken by the Canadian companies and modified to suit their particular circumstances and\nreturned to the ministry with a lot of common language remaining.\"\nBy contrast, Canada has referred to the following statement of a chief executive of one of the companies in\nquestion:\n\"I can speak for General Motors and I can say that there have been no secret agreements, there have\nbeen no negotiations. The Canadian Government asked us to write them a letter stating our understanding of the\nprovisions of the agreement as it was finally determined and to ask for our endorsement of the principles to the\nextent that we did understand them and assigned to us an objective whereby, over the 4 years that are involved\nin this agreement, we would undertake to increase our Canadian production or our Canadian value.\" (emphasis\nadded by Canada).\n\nagreement between the Governments of Canada and the United States concerning trade and\nproduction in automotive products.\" It is evident that the companies had been informed of the\nobjectives and provisions of the proposed agreement: the Letters mention the main objectives of the\nagreement, express the companies' support for these objectives, and note the conditions under which\nthe Auto Pact provides for the duty-free importation of motor vehicles and certain automotive parts\ninto Canada. In three of the Letters, the para graph containing the undertakings with regard to\nCanadian value added starts with the following sentence:\nIn addition to meeting these stipulated conditions and in order to contribute to\nmeeting the objectives of the agreement…\" ( emphasis added)\n10.114 Finally, in two Letters the implementation of the Auto Pact is mentioned as a condition for the\nundertakings:\n\"The following comments assume that the proposed agreement for duty-free\ntreatment has the full support of the respective Governments, and that the program\nmay be expected to continue for a considerable period of time.\"\n and\n\"Our undertakings are, of course, conditional upon the execution of that agreement,\nupon the adoption of an order in council, and regulations substantially in the form of\nthe drafts that you have already delivered to us, and upon an acceptable response in\nrespect of the enclosed supplementary letter.\"\n10.115 It follows that the anticipation of the conclusion of the Auto Pact was a key factor in the\ndecision of the companies to respond positively to th e request of the Government of Canada that the\ncompanies make commitments with regard to the growth in the level of Canadian value added in their\noperations. The companies made their undertakings conditional upon the conclusion and\nimplementation of the Auto Pact and viewed these undertakings as contributing to the objectives of\nthe Auto Pact. Given that, in submitting the undertakings before the conclusion of the Auto Pact, the\ncompanies in question were motivated by expectations concerning the benefits they would derive\nfrom this agreement through the import duty exemptio n, it is possible to view this aspect of the\nrelationship between the action of the private parties and the role of the Government of Canada in\nterms of an undertaking offered by private parties as a condition for obtaining a benefit from a\ngovernment. Though the information before us does not establish conclusively that, as alleged by the\nEuropean Communities, the undertakings contained in the Letters were regarded by the Government\nof Canada as a condition sine qua non for the conclusion of the Auto Pact, there is sufficient evidence\nto conclude that the actions of the companies ma nifestly depended upon (anticipated) action by the\nGovernment of Canada in the form of the conclusion of an international agreement.\n10.116 We now turn to the issues raised by the partie s with respect to whether or not the Letters of\nUndertaking are binding and enforceable and whether or not the Government of Canada monitors\ncompliance with the Letters.\n10.117 The parties differ as to whether or not the commitments contained in the Letters of\nUndertaking are \"binding\". In this respect, we note first that the Letters provide that the companies\n\"undertake\" to achieve very specific, verifiable objectives with respect to the level of Canadian value\nadded in their operations. Several Letters discuss in detail the companies' understanding of, and their\nconcerns regarding, particular technical aspects of the implementation of the value added criteria,\nnotably the methodology for the computation of Canadian value added, and draw attention to factors\nthat may limit the ability of the companies to meet the stated objectives. Second, various statements in\nthe Letters indicate that the word \"undertake\" was used in the sense of a formal commitment. For\nexample, one of the Letters states:\n\n\"Subject to the imponderables mentioned above, it is our intention and that of our\naffiliates to make every effort feasible to meet the objectives of the agreement to be\nmade between the Governments of Canada and the United States, and to achieve the\nindicated goal as rapidly as possible.\n(…)\nIn conclusion, therefore, I am prepared to say at this time that, first (name of the\ncompany) has plans underway to increase Canadian value added by about $ 30\nmillion in each of the first 2 years of the plan; and, second, we are continuing our\nstudies of ways to accomplish the remainder of the program and will undertake to\nmeet the full objective of $121 milion by the end of the model year 1968.\nIt is anticipated that these studies will take between 3 and 4 months to finish, and I\nwill be prepared to discuss the results with you when they are completed. From time\nto time, as requested, we will be glad to discuss our current operations and our plans\nfor future development with the Minister of Industry, and to receive and consider his\nsuggestions.\"\nIn three of the four Letters of Undertaking the final paragraphs read as follows:\n\"(name of the company) also agrees to report to the Minster of Industry, every 3\nmonths beginning April 1, 1965, such information as the Minister of Industry\nrequires pertaining to progress achieved by our company, as well as plans to fulfill\nour obligations under this letter. In addition, (name of the company) understands that\nthe Government will conduct an audit each year with respect to the matters described\nin this letter. (emphasis added)\nWe understand that before the end of model year 1968 we will need to discuss\ntogether the prospects for the Canadian automotive industry and our company's\nprogram.\"\nIn one of these Letters, these paragraphs are preceded by the following statement:\n\"The undertakings given in this letter are to be adjusted to the extent necessary for\nconditions not under the control of the (name of the company) or of any affiliated\n(name of the company) company, such as acts of God, fire, earthquake, strikes at any\nplant owned by (name of the company) or by any of our suppliers, and war\n.\"\n10.118 In view of the specificity of the undertakings; the precision as regards the modalities of their\nimplementation; the reference to the undertakings as \"obligations\"; the commitment to provide\ninformation \"required\" by the Ministry of Industry pertaining to \"progress achieved…as well as plans\nto fulfill\" these obligations; and the explicit reference to the need to adjust the undertakings in case of\nforce majeure, it is reasonable to conclude that the companies, by submitting these Letters, accepted\nresponsibility vis-à-vis the Government of Canada with respect to the achievement of the conditions\ncontained in the Letters. We therefore consider that the commitments contained in the Letters were\nintended to be binding as obligations of the companies in question notwithstanding that, as argued by\nCanada, the Letters do not have a specific legal status under Canadian law.\n10.119 Japan and the European Communities argue that the Letters are enforceable because there is\nnothing to prevent Canada from amending or repealing the MVTO 1998 or the SROs to withdraw the\nimport duty exemption as a response to non-compliance with the commitments contained in the\nLetters of Undertaking. The European Communities also submits that, because of the link between the\nsubmission of the Letters of Undertaking and the conclusion of the Auto Pact, the beneficiaries have\n\nassumed that, were they to disregard the commitments contained in the Letters, the Canadian\nGovernment would withdraw the import duty exemptio n. Canada points out that the Letters are not\nenforceable because there is no legal basis upon which Canadian authorities can deny the right of duty\nfree importation in response to a failure to meet a commitment in the Letters. In Canada's view,\nwhether or not the letters could be made enforceable through amendments to the MVTO and the SRO\nis irrelevant as the WTO Agreements only deal with measures actually applied by Members. Canada\nfurther rejects as unsupported by evidence the argument of the European Communities that there has\nbeen a tacit understanding between the companies and the Government that the import duty\nexemption would be revoked in case of non-compliance with the commitments provided for in the\nLetters.\n10.120 The information before us shows that Canada has not taken steps to create specific legal\nauthority under its domestic law that would enable the Government of Canada to take action in\nresponse to a failure by the companies to meet th e commitments given in the Letters of Undertaking.\nSpecifically, there is nothing in the legal instruments adopted by Canada in connection with its\ndomestic implementation of the Auto Pact to indicate that the import duty exemption can be\nwithdrawn in case of a failure to meet these comm itments. In this respect, we consider that the\narguments of the European Communities and Japan regarding steps that Canada could take to make\nthe Undertakings enforceable by amending relevant regulations are somewhat speculative.\n10.121 However, we do not believe that the issue of whether or not the Letters of Undertaking are\nenforceable through the use of sanctions in case of non-compliance through the withdrawal of the\nimport duty exemption is of decisive importance. Rather, the procedures for the provision of\ninformation to the Minister of Industry, the comm itment \"to discuss together the prospects for the\nCanadian industry and our company's program\" and the conduct of a yearly audit demonstrate that the\nGovernment of Canada would play an active role in ascertaining implementation of the commitments.\nThe choice of an informal mechanism with regard to the implementation of the Letters rather than a\nformal enforcement mechanism involving the possibility of sanctions in case of non-compliance does\nnot mean that there was no active involvement of the Government of Canada with regard to\ncompliance with these commitments. In the latter regard, we note that in the proceedings before the\nPanel Canada has confirmed that at least until model year 1996 it gathered information on an annual\nbasis with respect to the achievement of the Canadi an value added levels stipulated in the Letters of\nUndertaking.\n10.122 In sum, the evidence before the Panel shows that: (i) in making the undertakings contained in\nthe Letters, the companies acted at the request of the Government of Canada; (ii) the anticipated\nconclusion of the Auto Pact was a key factor in the decision of the companies to submit these\nundertakings; (iii) the companies accepted responsibility vis-à-vis the Government of Canada with\nrespect to the implementation of the undertakings contained in the Letters, which they described as\n\"obligations\" and in respect of which they undertook to provide information to the Government of\nCanada and indicated their understanding that the Government of Canada would conduct yearly\naudits; and (iv) at least until model year 1996, the Government of Canada gathered information on an\nannual basis concerning the implementation of the conditions provided for in the Letters.\n10.123 In light of this evidence, we consider that the involvement of the Government of Canada in\nthe action taken by the four companies was such that the commitments contained in the Letters of\nUndertaking can be regarded as \"requirements\" within the meaning of Article III:4. Where a\ngovernment requests a firm to make commitments as specific as those contained in the Letters of\nUndertaking and to record them in writing in letters addressed to the government, and these\ncommitments are described by the firms as \"obligations\" in respect of the fulfilment of which they\nundertake to provide information to, and to consult with, the government, it is evident that there is\naction of private parties directed by, or at the very least expected by, the government. That the Letters\ndo not have a specific legal status under Canadian law in the sense that they are not contracts or\n\nstatutory instruments does not negate the fact that government action was effective in inducing\ncompanies to make commitments vis-à-vis the Canadian Government with respect to the conduct of\ntheir business operations in Canada in a manner that was regarded as binding by the companies. The\nordinary meaning of the term \"requirement\" does not support the proposition that, where a\ngovernment induces a firm to make a clearly specified, verifiable commitment vis-à-vis that\ngovernment to act in a particular manner, such a commitment only qualifies as a \"requirement\" if it is\nembodied in an instrument with a defined legal status under the law of the country in question.\n10.124 We note Canada's argument that, regardless of the past status of the Letters, they are not\n\"requirements\" today. Canada submits that, even before the complaints had brought this case, Canada\nhad publicly stated that the Letters were not binding, and that it has stopped making any effort to\nverify whether companies achieved the amounts contained in the Letters.\n10.125 We note that, except for the conditions relating to the achievement of a specific level of\nCanadian value added in 1968, the commitments made in the Letters of Undertaking were not limited\nin time. The commitments to increase Canadian value added by a specified percentage of market\ngrowth applied to \"each model year over the preceding model year.\" The Letters contain no expiry\ndate. Evidence before the Panel indicates that the undertakings have not been terminated.\n10.126 The information before us does not indicate that the companies in question no longer consider\nthemselves to be bound vis-à-vis the Government of Canada in respect of the commitments contained\nin the Letters. On the contrary, statements made in October and November 1997 by chief executive\nofficers of the Ford Motor Company of Canada and of Chrysler Canada Ltd. suggest that these\ncompanies continued to regard these commitments as binding on them ( \"each member must meet a\n60 per cent Canadian value added commitment\" and \"we have exceeded those requirements by a\ncountry mile\").\n861 We also note that in a publication dated 10 June 1998 which provides background\ninformation on the Auto Pact, Industry Canada explicitly mentions commitments made by\nmanufacturers with respect to Canadian value added:\n\"Assemblers also undertook to achieve CVA in vehicle assembly and/or parts\nproduction by a fixed dollar amount set for each company (1964 value) plus 60\npercent of the annual growth in the value of their Canadian sales of cars, by 50\npercent of growth in truck sales, and by 40 percent of growth in bus sales. These\nconditions are outlined in a letter of undertaking by each company and, while non-\nbinding, typically have been met.\"\n10.127 This clearly suggests that as recently as June 1998 the Government of Canada viewed such\nundertakings as part of its policy respecting the implementation of the Auto Pact and that at least at\nthat time the Government of Canada possessed the information necessary to ascertain the status of\ncompliance with the conditions contained in the Letters of Undertaking. Finally, while Canada has\nindicated that it has ceased verifying compliance with the undertakings, we recall that nothing in the\ninformation before us suggests that the Government of Canada has taken steps to terminate the\nUndertakings.\n10.128 Under these circumstances, we believe that the information provided by Canada during the\nPanel proceedings that it has recently ceased gathering information on the CVA amounts contained in\nthe Letters of Undertaking is not a sufficient basis for us to conclude that the Letters should no longer\nbe treated as \"requirements\" within the meaning of Article III:4 as of the date on which the terms of\nreference of this Panel were established.\n10.129 We consider that, as requirements within the meaning of Article III:4, the commitments\ncontained in the Letters of Undertaking with respect to Canadian value added affect the internal sale\n\n861 Supra paras. 5.49 and 5.50.\n\nor use of imported products and afford less favourable treatment to imported products than to like\ndomestic products because these commitments are easier to meet if domestic products are used than if\nimported products are used. In this connection, we recall that in our analysis of the claims raised with\nrespect to the CVA requirements provided for in the MVTO 1998 and the SROs we have rejected\nCanada's argument that a measure relating to the use of domestic products is inconsistent with\nArticle III:4 only if that measure in law or in fact requires the use domestic products. Similarly, we\nrecall our view expressed in that connection that the actual trade effects of the CVA requirements are\nof no legal consequence in the context of Article III:4. We therefore do not believe it is necessary to\nexamine the arguments of the parties on the question of whether or not the commitments contained in\nthe Letters of Undertaking in practice can easily be met by the firms in question.\n10.130 In light of the foregoing considerations, we find that Canada acts inconsistently with\nArticle III:4 of the GATT by according less favourable treatment to imported products than to like\ndomestic products with respect to their internal sale or use as a result of the conditions contained in\nLetters of Undertaking with respect to Canadian value added.\n10.131 For reasons explained in paragraph 10.91, we do not consider it necessary to make a finding\non whether these conditions are inconsistent with Article 2.1 of the TRIMs Agreement.\n(b) Ratio requirements\n10.132 We now proceed to examine whether Canada acts inconsistently with Article III:4 of the\nGATT by reason of the provisions of the MVTO 1998 and of the company-specific SROs which\nstipulate that, as a condition for eligibility for duty-free importation of motor vehicles, manufacturers\nmust maintain a certain ratio between the net sales value of vehicles produced in Canada and the net\nsales value of all vehicles of that class sold for consumption in Canada (\"ratio requirements\").\n10.133 We note that, while the European Communities explicitly requests us to find that these ratio\nrequirements are inconsistent with Article III:4 of the GATT, Japan's initial presentation of its\narguments does not include a request for such a finding.\n862 In this argumentation, Japan presents\nseveral arguments on this issue and reserves its right to elaborate on the claims presented on this\nmatter in Japan's request for the establishment of a panel. 863 At the first meeting with the parties, we\nrejected a preliminary objection raised by Canada with respect to Japan's reservation of its right to\nelaborate on these claims. 864 At that meeting, we also posed several questions to Japan on the\narguments presented by Japan in its initial argumentation regarding the inconsistency of the ratio\nrequirements with Article III:4.865 Though Japan responded that it would address the issues raised by\nthe Panel in its rebuttal, Japan's subsequent argumentation is completely silent on the matter of the\nalleged inconsistency of the ratio requirements with Article III:4.\n10.134 In light of the fact that Japan's request for fi ndings as set out in its initial argumentation does\nnot include the issue of the inconsistency of the ratio requirements with Article III:4, that\nsubsequently Japan has offered no further argumentation on this matter during the course of the panel\nproceedings, and that it has not responded to our que stions on this issue, we conclude that Japan has\nnot presented a claim that the ratio requirements are inconsistent with Article III:4 of the GATT.\nAlternatively, assuming arguendo that the arguments presented by Japan in its initial argumentation\ncan properly be described as amounting to a claim, we find that Japan has failed to substantiate this\nclaim. We therefore limit ourselves to a consideration of the claim raised by the European\nCommunities.\n\n862 Supra para. 3.1.\n863 Supra para. 4.2.\n864 Supra Section VI.C.\n865 Question 14 from the Panel.\n\n10.135 The European Communities claims that the ratio requirements provided for in the MVTO\n1998 and the SROs are inconsistent with Article III:4 because they provide less favourable treatment\nto imported motor vehicles than to like domestic motor vehicles with respect to their internal sale.\n10.136 As noted above, the parties agree that the MVTO and the SROs are covered by the term\n\"laws, regulations or requirements\" in Article III:4. It is also undisputed that the ratio requirements\napply to imported and domestic motor vehicles that are like products within the meaning of\nArticle III:4.\n10.137 In the view of the European Communities, the ra tio requirements \"affect\" the internal sale of\nmotor vehicles because they provide an incentive to limit the sales of imported motor vehicles,\nthereby modifying the conditions of competition between those vehicles and domestic motor vehicles\nthe internal sale of which is not subject to any similar restriction.\n10.138 In support of its view that the ratio requirements afford less favourable treatment to imported\nmotor vehicles than to like domestic vehicles w ith respect to their internal sale, the European\nCommunities submits that the ratio requirements place a maximum limit on the total sales value of all\nmotor vehicles sold for consumption in Canada which in practice operates so as to restrict exclusively\nthe sales of imported motor vehicles. While an increase in the sales value of motor vehicles produced\nin Canada by the beneficiary will automatically give rise to an identical increase in the value of\npermitted domestic sales, an increase in imports of motor vehicles does not entail an increase in the\nvalue of permitted domestic sales. As a result, the beneficiaries cannot, without losing the entitlement\nto the import duty exemption, sell in Canada any imported motor vehicles in excess of a certain\namount which is directly related to the sales value of their domestic production of motor vehicles.\nBecause no similar limit is placed on the internal sale of domestic motor vehicles, the ratio\nrequirements afford less favourable treatment to imported motor vehicles with respect to their internal\nsale in Canada.\n10.139 In response to questions from the Panel, the European Communities has stated that it claims\nthat the ratio requirements limit the internal sale in Canada of motor vehicles imported under the\ntariff exemption\n866 and that the ratio requirements are internal measures in the sense of Article III and\nnot border measures because \"they limit the right to sell in Canada vehicles already imported in\nCanada under the tariff exemption.\" 867 We therefore proceed on the understanding that the claim of\nthe European Communities concerns the implications of the ratio requirements with respect to the\ninternal sale of those motor vehicles which have been imported duty-free.\n10.140 Canada submits that the ratio requirements do not fall within the scope of Article III:4\nbecause they do not affect the internal sale of any motor vehicles in Canada, imported or domestic. In\nthe view of Canada, the argument of the European Communities that the ratio requirements entail a\nrestriction on the internal sale of imported motor vehicles rests on a misunderstanding of the operation\nof the ratio requirements. In this regard, Canada points out that, since manufacturers can always\nensure that they stay within their ratios by paying duty on imported motor vehicles, the ratios cannot\nlimit the internal sale of imported vehicles. The ratio requirements have an effect on the importation\nof motor vehicles in that they limit the total value of motor vehicles that a manufacturer may import\nduty-free. However, the ratio requirements do not affect the conditions of sale of motor vehicles after\ntheir importation. In this connection, Canada argues that the European Communities fails to make a\ndistinction between measures affecting the importation of products and measures affecting imported\nproducts after their importation.\n10.141 In light of the claim of the European Communities and the counterarguments of Canada, we\nmust determine whether and how the ratio requirements affect the conditions of the internal sale in\n\n866 Supra para. 7.164.\n867 Supra para. 7.165.\n\nCanada of motor vehicles imported under the import duty exemption, i.e. motor vehicles imported\nduty-free by beneficiaries of the MVTO 1998 and of the company-specific SROs, as compared with\nthe conditions of sale of like vehicles produced in Canada by the beneficiaries. Specifically, we must\nestablish whether or not the ratio requirements entail a restriction on \"the right to sell in Canada\nvehicles already imported under the tariff exemption\", as alleged by the European Communities and\nas contested by Canada.\n10.142 The ratio requirements mean that a certain ratio must be maintained between the net sales\nvalue of vehicles produced by a manufacturer and the net sales value of all vehicles of that class sold\nfor consumption in Canada by the manufacturer. The net sales value of all vehicles sold for\nconsumption in Canada includes the value of domestic vehicles and the value of vehicles which have\nbeen imported duty free but does not include the value of motor vehicles on the importation of which\nimport duties have been paid. As a consequence of the ratio requirements, the net sales value of all\nvehicles of a class sold for consumption in Canada by a manufacturer cannot exceed the sales value of\nvehicles of that class produced in Canada by the same manufacturer by a certain amount.\n10.143 Since the ratio requirements apply to \"the net sales value of all vehicles of that class sold for\nconsumption in Canada\" there is no formal distinction between vehicles on the basis of their origin.\nThus, on its face, the limitation on the sales value of vehicles sold for consumption in Canada operates\nwithout distinction between imported and domestic vehicles. The question before us is whether in\npractice this limitation has the effect of restricting the internal sale of motor vehicles which have been\nimported duty-free, without imposing a similar restriction on the internal sale of like domestically\nproduced motor vehicles.\n10.144 We note that, if a vehicle imported under the import duty exemption is sold for consumption\nin Canada, the sales value of that vehicle will lead to an increase in the net sales value of vehicles sold\nfor consumption in Canada but will not affect the net sales value of vehicles produced in Canada. The\nratio between these values will therefore decline. On the other hand, in the case of a domestically\nproduced vehicle, production and sale of such a vehicle lead to identical increases in the net sales\nvalue of vehicles produced in Canada and the net sales value of vehicles sold for consumption in\nCanada. Hence, the ratio between these values will not be affected.\n10.145 It follows that, as a result of the ratio requirements, the net sales value of vehicles sold for\nconsumption in Canada and imported duty-free is subject to a limitation. The maximum possible sales\nvalue of vehicles sold for consumption in Canada and imported duty-free is realized if a manufacturer\nexports its entire production of domestically produced vehicles, in which case the net sales value of\nvehicles sold for consumption in Canada and accounted for by vehicles which have been imported\nduty free is equal to the net sales value of the vehicles produced in Canada by the manufacturer.\n10.146 However, the notion of a limitation of the net sales value of motor vehicles sold for\nconsumption in Canada and imported duty free is not by itself sufficient to find in favour of the claim\nof the European Communities. Rather, to substantiate this claim, it must be shown that this limitation\narises from a restriction on the internal sale of such imported motor vehicles. In other words, it must\nbe demonstrated that, because of the ratio requirements, motor vehicles which have been imported\nduty-free are subject to a restriction as regards the internal sale of such vehicles in Canada.\n10.147 In this respect, we note that, where the net sales value of duty-free imported motor vehicles\nsold for consumption in Canada reaches the limit allowed under the ratio requirements, the\nbeneficiary is no longer entitled to duty-free treatment of imports. Further sales in Canada of imported\nmotor vehicles will therefore be sales of vehicles on which import duties will have been paid. At the\nsame time, vehicles already imported duty-free will not be affected. We note that the European\n\nCommunities has not contested Canada's explanation of this aspect of the operation of the ratio\nrequirements.868\n10.148 We therefore consider that the effect of the ratio requirements in limiting the share of the net\nsales value of all vehicles sold for consumption in Canada which is accounted for by vehicles that\nhave been imported duty-free is a direct consequence of the fact that, beyond a certain value of\nimports, further imports of motor vehicles become subject to payment of import duty. This limitation\non the net sales value of duty-free imported motor vehicles is not effected through a restriction on the\ninternal sale of such motor vehicles subsequent to their importation. While the European\nCommunities claims that the ratio requirements \"limit the right to sell in Canada vehicles already\nimported under the Tariff Exemption\", it has not s hown how the ratio requirements could create a\nsituation in which a motor vehicle manufacturer who has been allowed to import a vehicle duty-free is\nsubsequently confronted with a limitation of his \"right to sell\" such a vehicle in Canada. What is\nreferred to by the European Communities as a \"limitation\" on the internal sale of such vehicles in fact\nis a limitation on the value of vehicles that can be imported duty-free.\n10.149 For purposes of Article III, the manner in which the ratio requirements affect the treatment\naccorded to motor vehicles with respect to the condit ions of their importation is irrelevant. That there\nis a limitation on the net sales value of vehicles which can be imported duty-free therefore cannot\nconstitute a grounds for finding a violation of Article III:4. The fact that internal sales of domestic\nvehicles are not subject to a \"similar\" limitation is also without relevance. By definition, a violation of\nArticle III cannot be established on the basis of a comparison between the conditions of internal sale\nof domestic products with the conditions of importation of imported products.\n10.150 In light of the foregoing considerations, we find that the European Communities has failed to\ndemonstrate that, by applying ratio requirements under the MVTO 1998 and the SROs as one of the\nconditions determining the eligibility of duty-free importation of motor vehicles, Canada is according\nto motor vehicles imported duty free less favourable treatment with respect to their internal sale than\nto like domestic motor vehicles. The claim of the European Communities regarding the inconsistency\nof the ratio requirements with Article III:4 must therefore be rejected. Because of this finding with\nrespect to the claim of the European Communities regarding the consistency of the ratio requirements\nwith Article III:4 of the GATT, we must also reject the claim of the European Communities that these\nrequirements are inconsistent with Article 2.1 of the TRIMs Agreement. We note in this regard that\nthe European Communities claims that these ratio requirements are trade-related investment measures\nwhich are inconsistent with Article 2.1 of the TRIMs Agreement because they violate Article III:4 of\nthe GATT.\nC. C\nLAIMS UNDER THE SCM AGREEMENT\n10.151 The European Communities and Japan claim that the import duty exemption provided by the\nCanadian Government to certain motor vehicle manufacturers under the MVTO 1998 and the SROs\nconstitutes a subsidy within the meaning of Article 1 of the Agreement on Subsidies and\nCountervailing Measures (SCM Agreement). They further claim that, because this import duty\nexemption is accorded upon fulfilment of certain ratio requirements and CVA requirements, it is\ncontingent upon export performance within the meaning of Article 3.1(a) of the SCM Agreement and\ncontingent upon the use of domestic over imported goods within the meaning of Article 3.1(b) of the\nSCM Agreement and is thus prohibited under those provisions.\n1. Ratio requirements\n10.152 In the view of the European Communities and Japan, the import duty exemption constitutes\n\"revenue . . . foregone\" which is \"otherwise due\", and hence a financial contribution exists within the\n\n868 Supra para. 6.369.\n\nmeaning of Article 1.1(a)(1)(ii) of the SCM Agreement. This import duty exemption confers a benefit\non the manufacturers in question in that the manufacturers are allowed to retain funds that they would\notherwise have been obliged to pay as import dutie s. The complainants further consider that the\nimport duty exemption is contingent, in law and in fact, upon export performance, because eligibility\nfor it is based on the fulfilment of production-to-sales ratios which require a manufacturer beneficiary\nto export.\n10.153 Canada contends that the import duty exemption does not represent a subsidy within the\nmeaning of Article 1 of the Agreement or an export subsidy within the meaning of Article 3.1(a) of\nthe Agreement. The overriding purpose of the SCM Ag reement is to discipline subsidies that distort\ntrade, and it would be contrary to the objective of trade liberalisation to characterise a measure that\nfacilitates imports as an improper trade distortion. Further, the import duty exemption is unlike any of\nthe practices identified in the Illustrative List of Export Subsidies contained in Annex I to the SCM\nAgreement (Illustrative List).\n10.154 Canada submits that the ratio requirements do not make the import duty exemption contingent\nin law upon export performance, because nothing in either the MVTO 1998 or any of the SROs\nindicates that the import duty exemption is available only on the condition that the subject\nmanufacturers achieve any particular export performance. Canada also argues that the ratio\nrequirements do not make the import duty exemption contingent in fact upon export performance,\nbecause the import duty exemption is not \"tied to\" exportation or export earnings within the meaning\nof footnote 4 of the SCM Agreement. In this context, Canada explains how, in its view, the import\nduty exemption is entirely independent of export volume.\n(a) Order in which issues will be addressed\n10.155 Article 3.1(a) of the SCM Agreement provides that subsidies \"within the meaning of\nArticle 1\" which are contingent upon export performance are prohibited. Consequently, in order for a\nmeasure to be an export subsidy within the meaning of Article 3.1(a) of the SCM Agreement, it must\nbe a subsidy within the meaning of Article 1 of that Agreement. Accordingly, we will first examine\nwhether the import duty exemption identified by the European Communities and Japan is a subsidy\nwithin the meaning of Article 1 of the SCM Agreem ent, and then consider whether that subsidy is\ncontingent upon export performance within the meaning of Article 3.1(a) of the Agreement.\n(b) Whether the import duty exemption is a subsidy within the meaning of Article 1\n10.156 Article 1.1 of the SCM Agreement provides, in relevant part, that:\n\"For the purposes of this Agreement, a subsidy shall be deemed to exist if:\n(a)(1) there is a financial contribution by a government or any public body within\nthe territory of a Member (referred to in this Agreement as \"government\"), i. e.\nwhere:\n\n(ii) government revenue that is otherwise due is foregone or not collected (e. g.\nfiscal incentives such as tax credits) (footnote omitted);\n\nand\n(b) a benefit is thereby conferred.\"\n\nIt is clear from Article 1.1 that two criteria must be met in order for a subs idy to exist within the\nmeaning of that Article. First, there must be a financial contribution by a government. Second, a\nbenefit must thereby be conferred. We will consider each criterion in turn.\n(i) Financial contribution by a government\n10.157 The European Communities argues that, because customs duties are imposed, collected and\nappropriated by the Canadian Government, they constitute \"government revenue\". Given that the\nimportation of motor vehicles into Canada is, in principle, subject to customs duties, an exemption\nfrom such duties means that the Canadian Government is \"foregoing\" revenue that would otherwise\nbe \"due\". A financial contribution therefore exists within the meaning of Article 1.1(a)(1)(ii) of the\nSCM Agreement. Japan argues that \"government revenue\" is raised through internal taxes and other\ncharges, including customs duties. Since government revenue is foregone when a customs duty is\nwaived, the import duty exemption amounts to a financial contribution\n10.158 Canada argues that an import duty exemption for goods does not necessarily constitute\nrevenue foregone under Article 1.1(a)(1)(ii). If it did, then a subsidy would exist whenever a Member\nunilaterally applied a rate of duty lower than its bound rate. To define such a programme as\n\"subsidies\" would be contrary to the object and purpose of the WTO Agreement, which explicitly\nidentifies tariff reductions as contributing to the objectives of the Agreement.\n10.159 It will be recalled that, under Article 1 of the SCM Agreement, there is a financial\ncontribution and hence a possible subsidy where \"government revenue that is otherwise due is\nforegone or not collected (e.g. fiscal incentives such as tax credits)\". The term \"revenue\" has been\ndefined, inter alia, as \"[t]he annual income of a government or State, from all sources, out of which\npublic expenses are met\".\n869 The word \"otherwise\" has been defined, inter alia, to mean \"in other\ncircumstances\".870 The adjective \"due\" has been defined, inter alia , to mean \"[t]hat is owing or\npayable as an obligation or debt\".871\n10.160 Examining the Canadian import duty exemption in light of the ordinary meaning of the words\nabove, we consider that customs duties represent \"government revenue\". In respect of whether the\ncustoms duties at issue in this case represent government revenue otherwise due, we recall that the\nimport duty exemption is accorded to particular importers and not to others, and further consider that,\nin the absence of the import duty exemption, imports by manufacturer beneficiaries which are\nshielded from duties by that exemption would be subject to duties. In respect of whether those\ncustoms duties represent the foregoing of government revenue otherwise due, we recall that Canada\napplies an MFN duty on motor vehicles originating in non-NAFTA countries at the rate of 6.1 per\ncent. We further recall that certain duties conti nue to apply with respect to imports originating in\nNAFTA countries. While light trucks from Mexico and all motor vehicles from the United States\nenter Canada duty-free under the NAFTA, motor vehicles from Mexico other than light trucks are\nsubject to 1.3 or 2.4 per cent duties.\n872 Finally, we recall that, in order for motor vehicles to qualify\nfor the preferential duty treatment applicable with respect to imports originating in NAFTA countries,\nthey must satisfy certain rules of origin and reporting requirements which are not applicable in order\nto receive the import duty exemption at issue in th is dispute. Thus, even motor vehicles imported\nfrom Mexico and the United States in a tariff cate gory subject to zero duty would not necessarily be\neligible for duty-free treatment absent the import duty exemption. Accordingly, absent the import\nduty exemption accorded to certain companies under the MVTO 1998 and the SROs, those companies\nwould be liable to pay duties of up to 6.1 per cent on the motor vehicles in question. We find,\n\n869 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. 2, 2579.\n870 Ibid., 2032.\n871 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. 1, 761.\n872 See supra footnote 492.\n\ntherefore, that the import duty exemption constitutes the \"foregoing\" of government revenue which is\n\"otherwise due\".\n10.161 We now address Canada's argument that, if an import duty exemption were necessarily\ntreated as revenue foregone, a subsidy would exist every time a WTO Member applied a rate lower\nthan its bound rate, and this would be contrary to the object and purpose of the WTO Agreement,\nwhich explicitly identifies tariff reductions as contributing to the objectives of the Agreement. In our\nview, a Member's bound rate merely represents the maximum duty a Member may impose in respect\nof imports from WTO Members; the mere fact that a WTO Member applies a level of duties lower\nthan the bound rate would not mean that it is fo regoing revenue that is \"otherwise due\". More\nimportantly, while the preamble to the WTO Agreement recognises that the \"substantial reduction of\ntariffs\" contributes to fulfilling certain objectives of the WTO Agreement, it does not follow that tariff\nreductions will always be WTO-consistent. For example, the reduction of tariffs in a discriminatory\nmanner could give rise to a violation of Article I of GATT 1994. Similarly, we consider that the\nforegoing of government revenue otherwise due, in the form of customs duties, and in a manner\nwhich is specific within the meaning of Article 2, ma y give rise to a subsidy which is subject to the\ndisciplines of the SCM Agreement.\n873\n10.162 Canada also argues that, if an import duty exemption were necessarily treated as revenue\nforegone, a subsidy would exist every time generalised preferences or duty drawbacks were granted\nby a WTO Member. In our view, however, these examples advanced by Canada involve factual and\nlegal considerations distinct from those in the case at hand. For instance, a generalised system of\npreferences accords favourable treatment to certain products from certain countries, and all such\nproducts from those countries receive favourable treatment. That situation is distinct from the case at\nhand, where some importers of a product – the manufacturer beneficiaries – are accorded favourable\ntreatment as compared with other importers of the same product from the same country . As for duty\ndrawbacks, item (i) of the Illustrative List indicates the circumstances in which the remission or\ndrawback of import charges on imported inputs consumed in the production of the exported product\nconstitutes an export subsidy. When read in conjunction with footnote 1 to the SCM Agreement, item\n(i) would appear to indicate – although this is not an issue we need decide in this dispute – that non-\nexcessive duty drawback is not to be considered a subsidy within the meaning of Article 1 of the\nAgreement.\n10.163 Having concluded that the Canadian import duty exemption constitutes the \"foregoing\" of\ngovernment revenue which is \"otherwise due\" within the meaning of Article 1.1(a)(1)(ii) of the SCM\nAgreement, we find that it gives rise to a financial contribution within the meaning of\nArticle 1.1(a)(1) of the Agreement.\n(ii) Benefit\n10.164 Having found that a financial contribution exists on the part of the Canadian Government\nthrough the import duty exemption provided to ce rtain motor vehicle manufacturers, we must now\nconsider the second criterion set out in the definition of a subsidy in Article 1, that is, benefit.\n10.165 A benefit has been defined, inter alia, as \"(An) advantage\".\n874 Further, the Appellate Body\nhas stated in Canada – Aircraft:\n\"The dictionary meaning of 'benefit' is 'advantage', 'good', 'gift', 'profit', or, more\ngenerally, 'a favourable or helpful factor or circumstance'. ( footnote omitted ) . . .\n\n873 Our conclusions in this respect are consistent with those reached by the panel in Indonesia – Autos.\nIn that dispute, the panel found that exemptions from import duties involved the foregoing of government\nrevenue otherwise due. Panel Report on Indonesia – Autos, supra note 270, para. 14.155.\n874 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. 1, 214.\n\nThese definitions also confirm that the Panel correctly stated that 'the ordinary\nmeaning of 'benefit' clearly encompasses some form of advantage.' ( footnote\nomitted)\"875\nIn our view, the fact that the manufacturer beneficiaries need not pay customs duties that would\notherwise be due – and that would be paid by non- qualifying manufacturers – constitutes just such an\nadvantage. We find that the financial contribution made through the import duty exemption,\ntherefore, confers a benefit within the meaning of Article 1.1(a)(2) of the SCM Agreement.\n(iii) Illustrative List as context\n10.166 Canada posits that footnotes 1 and 5, in conjunction with items (g), (h) and (i) of the\nIllustrative List of Export Subsidies, make it clear that non-excessive exemption or remission\nprogrammes are not subsidies. Footnote 1 to Article 1.1(a)(1)(ii) excludes certain non-excessive\nexemptions or remissions such as duty drawbacks from the definition of a \"subsidy\", notwithstanding\nthat they confer a benefit directly on exports. It is therefore difficult, in Canada's view, to justify\nextending the definition of \"subsidy\" to capture non-excessive duty exemptions or remissions on\nimports.\n10.167 We note that Canada does not contend that the measure at issue here falls within the scope of\nfootnote 1. Rather, it would appear that Canada is making the contextual argument that, based on a\nprinciple derived from footnotes 1 and 5 and items (g), (h) and (i) of the Illustrative List, \"non-\nexcessive exemptions [from] or remissions\" of duties are not subsidies, and that the import duty\nexemption in this case is just such a \"non-excessive\" exemption or remission. In response to a\nquestion from the Panel, Canada explains that \"[a]n excessive duty rebate would, in practical terms,\nbe no different from a legal duty exemption coupled with a cash subsidy.\"876\n10.168 We recall that footnote 1 to Article 1.1(a)(1)(ii) provides that:\n\"In accordance with the provisions of Article XVI of GATT 1994 (Note to Article\nXVI) and the provisions of Annexes I through III of this Agreement, the exemption of\nan exported product from duties or taxes borne by the like product when destined for\ndomestic consumption, or the remission of such duties or taxes in amounts not in\nexcess of those which have accrued, shall not be deemed to be a subsidy.\"\nItems (g), (h) and (i) of the Illustrative List (i. e., Annex I referred to in footnote 1) provide further\nelaboration regarding the application of this principle.\n10.169 Item (i) of the Illustrative List relates to import charges, and is thus most closely related to the\nmeasures at hand. Under item (i), the remission or drawback of import charges \"in excess of those\nlevied on imported inputs that are consumed in the production of the exported product\" is a prohibited\nexport subsidy. Thus, the concept of \"excessive\" remission or drawback of import charges involves a\ncomparison between the import duties levied on inputs consumed in the production of an exported\nproduct\n877, on the one hand, and the amount of the remission or drawback granted on the other. In the\ncase at hand, Canada has never contended that the import duty exemption in question represents the\nremission or drawback of import charges on imported inputs that are consumed in the production of\nexported products. On the contrary, qualifying motor vehicle manufacturers earn an import duty\nexemption in respect of motor vehicles that are sold in the Canadian market. Nor has Canada made\nany effort to demonstrate that the amount of the import duty exemption was calculated as a function\n\n875 Appellate Body Report on Canada – Measures Affecting the Export of Civilian Aircraft, adopted on\n20 August 1999, WT/DS70/AB/R (hereinafter Appellate Body Report on Canada – Aircraft), para. 153.\n876 Supra para. 7.236.\n877 As defined in footnote 61 to Annex II of the SCM Agreement.\n\nof, or in fact bears any relationship to, the import charges levied on imported inputs that are consumed\nin the production of an exported product. Thus, we fail to understand how the concept of \"excessive\"\nexemption or remission is of relevance to this dispute, or in what sense it could be said that Canada's\nimport duty exemption in this case is not \"excessive\".878\n10.170 Having concluded that the import duty exemption represents a financial contribution by the\nCanadian Government and that a benefit is thereby conferred, we find that the import duty exemption\nconstitutes a subsidy within the meaning of Article 1 of the SCM Agreement.\n(iv) Specificity\n10.171 We note that Article 1.2 of the SCM Agreement states:\n\"A subsidy as defined in paragraph 1 shall be subject to the provisions of Part II\n['Prohibited Subsidies'] or shall be subject to the provisions of Part III ['Actionable\nSubsidies'] or V ['Countervailing Measures'] only if such a subsidy is specific in\naccordance with the provisions of Article 2.\"\n10.172 We further note that Article 2.3 of the SCM Agreement states:\n\"Any subsidy falling under the provisions of Article 3 shall be deemed to be\nspecific.\"\nGiven that the central issue of the claims under the SCM Agreement in this dispute is whether the\nimport duty exemption falls within the provisions of Article 3, we need not, and do not, address the\nquestion of specificity separately.\n(c) Whether the import duty exemption is \"contingent . . . upon export performance\"\n10.173 In the previous section, we have concluded that the import duty exemption under the MVTO\n1998 and the SROs gives rise to a financial contribution that confers a benefit, and thus represents a\nsubsidy within the meaning of Article 1 of the SCM Agreement. We now consider whether that\nsubsidy is contingent upon export performance within the meaning of Article 3.1(a) of the Agreement.\n10.174 Article 3.1 of the SCM Agreement provides, in relevant part:\n\"Except as provided in the Agreement on Agriculture, the following subsidies, within\nthe meaning of Article 1, shall be prohibited:\n(a) subsidies contingent, in law or in fact ( footnote omitted), whether solely or as\none of several other conditions, upon export performance, including those illustrated\nin Annex I (footnote omitted);\n10.175 The European Communities and Japan argue that the import duty exemption is contingent\nupon export performance by reason of the ratio requirements. The European Communities explains\nhow, where the required ratio is 100:100 or higher, a beneficiary cannot sell in Canada any value of\nmotor vehicles imported under the import duty exemption unless it exports an equivalent value of\n\n878 Our views with respect to paragraphs (g) and (h) of the Illustrative List, relating to indirect taxes, are\nsimilar. Put simply, an export subsidy exists under these two items if the Member exempts or remits indirect\ntaxes \"in excess\" of the amount of indirect taxes that would be payable if the product were sold in the domestic\nmarket. Given that the measure in question here has no relation to the amount of indirect taxes that would be\npayable if the exported product had been sold in the domestic market, we fail to grasp how the concept of\n\"excessive\" remission is relevant to the case at hand.\n\ndomestically manufactured motor vehicles. Where the requirement is less than 100:100, by exporting\npart of its domestic production, a beneficiary would see the value of motor vehicles which it may\nimport duty-free into Canada increase by an amount equal to the value of the exported vehicles. It\nwould therefore qualify for a larger subsidy than if it sold all its domestic production in Canada. The\nratio requirements hence function as requirements to export. Japan explains how, where the ratio\nrequirement is 100:100, the only way for a manufacturer beneficiary importing motor vehicles and\nselling them in Canada to maintain compliance with this requirement is to export the vehicles it\nproduces. Where the ratio requirement is less than 100:100, the only way for a manufacturer\nbeneficiary importing motor vehicles and selling th em in Canada to maintain compliance with this\nrequirement is to export the vehicles it produces, but a lower requirement imposes a lesser degree of\npressure in comparison with the situation in which the requirement is 100:100.\n10.176 In Canada's view, even if there is a subsidy, there is no export contingency in law. A subsidy\nis export-contingent in law where the underlying legal instruments establishing that subsidy expressly\nprovide for it to be available only on condition of export performance. The relevant legal condition\nfor the import duty exemption is achievement of a production-to-sales ratio, and neither production\nnor sales, nor a ratio of the one to the other, is synonymous with exportation.\n10.177 Canada further argues that there is no export contingency in fact, because the import duty\nexemption is available to manufacturer beneficiaries whether they export or not and the import duty\nexemption is entirely independent of export volume. Specifically, there is no direct nexus between\nreceipt of the import duty exemption and the exportation of vehicles. Not only are there no penalties\nif exports do not take place or bonuses if additional exports do take place, but the benefit of the import\nduty exemption can be increased while exports are decreased. The only way to increase the benefit of\nthe import duty exemption is to increase imports, which can be done even while decreasing\nproduction and exports.\n10.178 As a threshold matter, we note the disagreement of the parties regarding the concepts of \"in\nlaw\" and \"in fact\" export contingency. The European Communities argues that, where the\nrequirement to export is stated expressly in the law or is implicit in other requirements that are so\nstated in the law, the subsidy is contingent in law upon export performance. Where the requirement to\nexport does not result from the terms of the law, or at least from those terms alone, but from factual\nelements outside the law, the subsidy is contingent in fact upon export performance. Japan does not\nspecifically address this issue. Canada, on the othe r hand, argues that a subsidy is contingent in law\nupon export performance where the underlying legal instruments of that subsidy expressly provide\nthat the subsidy is available to enterprises only on condition of export performance. In response to a\nquestion from the Panel, Canada argues that a subsidy is contingent in fact upon export performance\nwhere there is no express requirement to export, but the facts and circumstances are such that there is\nan implicit requirement to export.\n10.179 The term \"law\" has been defined, inter alia , as \"that which is laid down, ordained, or\nestablished.\"\n879 Following from this definition, export contingency in law, in our view, must refer to\nthe situation where one can ascertain, on the face of the law (or other relevant legal instrument), that\nexport contingency exists. In other words, an examination of the terms of the underlying legal\ninstruments of the subsidy in question would suffice to determine whether or not export contingency\nin law exists. We do not mean by this, however, that the terms of the law must – as Canada suggests\n– \"expressly provide\" that the subsidy is contingent upon export performance, but rather, that the\nexistence of export contingency can be demonstrated on the basis of the law or other relevant legal\ninstrument, without reference to external factual elements.\n10.180 We find confirmation of our view on this issue in a recent statement of the Appellate Body in\nCanada – Aircraft:\n\n879 Black's Law Dictionary (West Publishing Co.,1968, Fourth Edition), 1028.\n\n\"In our view, the legal standard expressed by the word 'contingent' is the same for\nboth de jure or de facto contingency. There is a difference, however, in what\nevidence may be employed to prove that a subsidy is export contingent. De jure\nexport contingency is demonstrated on the basis of the words of the relevant\nlegislation, regulation or other legal instrument. Proving de facto export contingency\nis a much more difficult task. There is no single legal document which will\ndemonstrate, on its face, that a subsidy is 'contingent . . . in fact . . . upon export\nperformance'. Instead, the existence of this relationship of contingency, between the\nsubsidy and export performance, must be inferred from the total configuration of the\nfacts constituting and surrounding the granting of the subsidy, none of which on its\nown is likely to be decisive in any given case.\"\n880 (first emphasis added)\n10.181 In light of our view regarding the distinction between \"in law\" and \"in fact\" export\ncontingency, we now consider whether the Canadian import duty exemption is contingent in law upon\nexport performance.\n10.182 We note that the ratio requirements applicable to the MVTO 1998 beneficiaries are, \"as a\ngeneral rule\", 95:100 for automobiles, at least 75:100 for SCVs and at least 75:100 for buses. 881 With\nrespect, specifically, to the four automobile manufacturer beneficiaries under the MVTO 1998,\nCanada has stated, in response to a question from the Panel, that the amounts of the ratio requirements\nare confidential.882 Canada adds that they range from the low-80s:100 to the high-90s:100, and the\naverage of the four amounts is approximately 95:100. We further note that the SROs issued prior to\n1997 set the minimum ratio requirement at 75:100. Regarding the SROs issued since 1997, almost all\nsuch SROs have the ratio requirement set at 100:100.883\n10.183 The word \"contingent\" has been defined, inter alia, as \"conditional, dependent\". 884 Further,\nthe Appellate Body has stated in Canada – Aircraft:\n\"In our view, the key word in Article 3.1(a) is 'contingent'. As the Panel observed,\nthe ordinary connotation of 'contingent' is 'conditional' or 'dependent for its existence\non something else'. ( footnote omitted ) This common understanding of the word\n'contingent' is borne out by the text of Article 3.1(a), which makes an explicit link\nbetween 'contingency' and 'conditionality' in stating that export contingency can be\nthe sole or 'one of several other conditions'.\"885\n10.184 In light of the above ordinary meaning of the word \"contingent\", we first examine the\nsituation in which the ratio requirement is 100:100 or higher886. For instance, a company selling $100\nworth of motor vehicles in Canada must produce $100 worth of motor vehicles in Canada in order to\nreceive an import duty exemption for its imports of motor vehicles. However, for every unit value of\nmotor vehicles that it imports duty-free, it would ha ve to export an equivalent unit value of motor\n\n880 Appellate Body Report on Canada – Aircraft, supra note 875, para. 167.\n881 Supra para. 2.25.\n882 Supra para. 7.3. We recall the Appellate Body's statement in Canada – Aircraft: \" . . . [A] panel has\nbroad legal authority to request information from a Member that is a party to a dispute, and . . . a party so\nrequested has a legal duty to provide such information.\" ( emphasis added) While we do not consider that the\nprecise amounts of the ratio requirements for the MVTO manufacturers are necessary to our analysis, we note\nthat the Appellate Body further stated: \" . . . [A] panel should be willing expressly to remind parties – during the\ncourse of dispute settlement proceedings – that a refusal to provide information requested by the panel may lead\nto inferences being drawn about the inculpatory character of the information withheld.\" Appellate Body Report\non Canada – Aircraft, supra note 875, paras. 197 and 204.\n883 Supra para. 2.34.\n884 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. 1, 494.\n885 Appellate Body Report on Canada – Aircraft, supra note 875, para. 166 (emphasis in original).\n886 We note that one ratio requirement – that for Navistar International – is higher than 100:100.\n\nvehicles produced in Canada, in order to maintain its production-to-sales ratio. Notwithstanding the\nfact that the requirement is set out as a production-to-sales ratio, we fail to see how a manufacturer\nbeneficiary could access the import duty exemption – and still maintain its production-to-sales ratio –\nwithout exporting. In cases where the production- to-sales ratio is 100:100, the only way to import\nany motor vehicles duty-free is to export, a nd the amount of import duty exemption allowed is\ndirectly dependent upon the amount of exports achieved. Given that, where the ratio requirement is\n100:100, it is impossible to import duty-free withou t exporting, the import duty exemption is clearly\n\"conditional\" or \"dependent\" upon exportation.\n10.185 Canada contends that a manufacturer beneficiary subject to a 100:100 ratio requirement\nwhich is in fact performing at a higher-than-required ratio could increase its duty-free imports while at\nthe same time reducing its exports. We agree with Canada that such a situation is in fact possible.\nThus, for example, a manufacturer might, in year x, produce $500 worth of motor vehicles in Canada,\nexport $450 worth of motor vehicles from Canada, import $50 worth of motor vehicles pursuant to the\nimport duty exemption and thus, in total, sell $100 worth of motor vehicles in Canada. In this case,\nthe manufacturer beneficiary has achieved a production-to-sales ratio of 500:100. The following year,\nthat manufacturer beneficiary might continue to produce $500 worth of motor vehicles in Canada, but\nreduce its exports to $400 while increasing its duty-free imports to $100 (leaving an actual\nproduction-to-sales ratio of 500:200, well in excess of the required ratio). Under these circumstances,\nthe manufacturer beneficiary has decreased its exports while increasing the amount of its duty-free\nimports (and thus the amount of the subsidy).\n10.186 Canada considers that the type of situation set out above establishes that there is no sufficient\n\"nexus\" between the exports and the subsidy and th at the import duty exemption is not, therefore,\n\"contingent . . . upon export performance\". We disagree. In our view, the situation posited by Canada\nsimply demonstrates that a manufacturer beneficiary may in a given year choose not to fully exercise\nits entitlement to the import duty exemption, while in a subsequent year more fully availing itself of\nthat entitlement. Looked at from another angle, it could be said that the manufacturer beneficiary\nexceeded the production-to-sales ratio necessary in order to obtain the amount of import duty\nexemption it required, and that it therefore had a certain margin of flexibility to reduce exports and/or\nincrease duty-free imports in subsequent years. The fact remains, however, that the manufacturer\nbeneficiary could not have imported any motor vehicles duty-free in either year without exporting an\nequivalent value of motor vehicles in that year. Thus, the subsidies are clearly contingent upon export\nperformance, in as much as the import duty exemption obtained was conditional or dependent upon\nexporting an equivalent value of motor vehicles. The fact that the manufacturer beneficiary exceeded\nthe amount of exports necessary to obtain the amount of subsidy in question in no way changes this.\n10.187 We have noted that ratio requirements for some manufacturer beneficiaries are set at 100:100\nor higher and for others at less.\n887 We have examined the situation in which the ratio requirement is\n100:100 in light of the ordinary meaning of the word \"contingent\". Accordingly, we now consider the\nsituation in which the ratio requirement is less than 100:100 in light of the ordinary meaning of the\nword \"contingent\".\n10.188 Let us assume that the ratio requirement is 75:100, the \"minimum allowable ratio\nrequirement\"\n888. A manufacturer beneficiary sells $100 wort h of motor vehicles in Canada and must,\ntherefore, produce $75 worth of motor vehicles in Canada in order to satisfy the ratio requirement.\nHaving done so, it is entitled to import $25 worth of motor vehicles duty-free or, in other words, has a\nduty-free \"allowance\" or \"entitlement\" of up to $25. Admittedly, no exports have occurred, nor do\nthey need to, for the manufacturer beneficiary to receive the import duty exemption up to this amount.\nWe accept that the import duty exemption is not contingent upon export performance up to this\namount.\n\n887 See supra para. 10.182.\n888 Supra para. 7.1.\n\n10.189 However, if the manufacturer beneficiary wishes to import any amount above its duty-free\n\"allowance\" and still receive the import duty exemption, it would have to export an amount equivalent\nto that exceeding this \"allowance\", so as to ensure that the production-to-sales ratio remains unaltered.\nIn the present case, if it wishes to import $75 rather than $25 worth of motor vehicles duty-free, which\nis $50 more than its \"allowance\", it would have to export $50 worth of motor vehicles. For every unit\nvalue of duty-free imports above the \"allowance\", it is required to export an equivalent unit value of\nits production in Canada. Indeed, other things being equal, the more the manufacturer beneficiary\nexports, the more it can import duty-free. For instance, if it then exports $100 worth of motor\nvehicles, it can import $125 worth of motor vehicles duty-free. In our view, the relationship between\nthe import duty exemption and export performance in this situation is such that the former is\n\"conditional\" or \"dependent\" on the latter.\n10.190 Of course, the manufacturer beneficiary could steadily increase its domestic production and\nits domestic sales, all the while respecting the 75:100 ratio, and the value of duty-free imports that it is\nallowed would increase proportionally without any exports occurring. However, this does not change\nthe fact that, to import duty-free in excess of its \"allowance\", the manufacturer beneficiary is obliged\nto export an amount equivalent to that in excess.\n10.191 We therefore find that, with the exception of the one situation where the ratio requirement is\nless than 100:100 and the manufacturer beneficiary wishes to access an import duty exemption only\nup to the amount of its duty-free \"allowance\", there is a clear relationship of contingency between the\nimport duty exemption and export performance. The fact that, where the ratio requirement is less than\n100:100, some amount of import duty exemption is accessible without exports occurring cannot\npossibly mean that the import duty exemption in its totality should be considered not to be export-\ncontingent. In other words, the import duty exemption is contingent upon export performance even if,\nwhere the ratio requirement is less than 100:100, th e manufacturer beneficiary may fulfil it to receive\na certain amount of import duty exemption without exporting, because , in order to receive a greater\namount of import duty exemption, it is obliged to export.\n10.192 We note that it is the law (or other relevant legal instrument) – the MVTO 1998 and the SROs\n– that creates this construct, i.e., an import duty exemption upon condition of meeting certain ratio\nrequirements. It is the law that determines what a particular manufacturer beneficiary's ratio\nrequirement will be. And, in the case of a ratio requirement lower than 100:100, although the\nmanufacturer beneficiary has a choice as to the amount of the import duty exemption it wishes to\naccess, it is the law that determines the consequences of that choice for the manufacturer beneficiary,\nor, otherwise put, it is the law that then establishes contingency upon export performance. We find,\non the basis of our foregoing discussion, that the MVTO 1998 and the SROs demonstrate, on their\nface, that the import duty exemption is contingent upon export performance, and we have not needed\nto refer ourselves to \"the total configuration of the facts constituting and surrounding the granting of\nthe subsidy\"\n889. Being demonstrable \"on the basis of the words of the relevant legislation, regulation\nor other legal instrument\" 890, export contingency in respect of the Canadian import duty exemption\nexists in law.\n10.193 With specific reference to the four MVTO automobile manufacturer beneficiaries, Canada\nclaims, in response to a question from the Panel, that there is no statutory instrument setting out the\nratio requirement.891 Canada submits that the actual ratio requirement for each MVTO automobile\nmanufacturer beneficiary was determined on a company-by-company basis for each class of vehicle.\nEach company was informed of the production-to-sales ratio it had achieved in the base year, and that\nis the ratio that each company must maintain in order to qualify as an MVTO manufacturer\n\n889 Appellate Body Report on Canada – Aircraft, supra note 875, para. 167.\n890 Ibid.\n891 Supra para. 7.3.\n\nbeneficiary each year.892 We consider, however, that, while no statutory instrument sets out the ratio\nrequirement for each automobile manufacturer beneficiary, it is the Canadian Government which\ndetermined, pursuant to the MVTO 1998 , the ratio requirement for each automobile manufacturer\nbeneficiary. That is, the MVTO 1998 requires that each automobile manufacturer beneficiary be\nsubject to a ratio requirement and establishes a formula on the basis of which the individual ratio\nrequirement for each automobile manufacturer benefici ary is to be calculated. Thus, the existence of\nexport contingency with respect to the four MV TO automobile manufacturer beneficiaries can be\ndetermined on the basis of the MVTO 1998 itself.\n10.194 We note that the European Communities and Japan have, in the alternative , made an\nargument as to export contingency in fact. Ha ving found that the Canadian import duty exemption is\ncontingent in law upon export performance, we need not, and do not, address this argument.\n10.195 Having examined the import duty exemption in light of the ordinary meaning of the text of\nArticle 3.1(a), we now address what Canada considers to be the context in which Article 3.1(a) must\nbe interpreted, i.e. the Illustrative List. Canada argues that the Illustrative List is an important guide\nto identifying the practices that constitute export subsidies, and the Canadian import duty exemption\nis unlike any of the measures in the Illustrative List. Canada emphasises that, in each of the practices\nidentified in the Illustrative List, there is a cl ear and direct nexus between the subsidy and the\nexported product, and the amount of the subsidy increases with the volume of exports. We recall,\nhowever, that the test set out in Article 3.1(a) is contingency upon export perfomance, and not a\n\"nexus\" between the subsidy and the exported product. And we have established that the import duty\nexemption is contingent upon export performance by reason of the ratio requirements.\n10.196 Canada posits that, because the only remissions of import charges identified in the Illustrative\nList are those that are both excessive and linked directly to an exported product, only such remissions\nof import charges may be considered subsidies contingent upon export performance. We recall that\nArticle 3.1(a) prohibits \"subsidies contingent . . . upon export performance, including those illustrated\nin Annex I [the Illustrative List]\". It is thus reasonable, in our view, to consider that the Illustrative\nList may be of some utility in informing the notion of export contingency in certain precise situations.\nWe find it difficult to accept, however, that the practices identified in the Illustrative List represent a\ncircumscription – in the manner suggested by Canada – of the conditions under which a subsidy is\ndeemed to be contingent upon export performance. Indeed, the use of the words \"including\" and\n\"illustrated\" makes it clear that, while all practices identified in the Illustrative List are subsidies\ncontingent upon export performance, there may be other practices not identified in the Illustrative List\nthat are also subsidies contingent upon export performance.\n10.197 Accordingly, the Illustrative List does not establish any general definition of the\ncircumstances in which an exemption or remission is to be considered an export subsidy.\nSpecifically, we do not find any basis in the cited provisions – or, for that matter, anywhere else in the\nSCM Agreement – for Canada's view that, because the only remissions of import charges identified in\nthe Illustrative List are those that are both excessive and linked directly to an exported product, only\nsuch remissions of import charges may be considered subsidies contingent upon export performance.\nItem (i) is the only one in the Illustrative List th at deals with the remission of import charges, but it is\nspecific to imported inputs. It cannot be considered to establish a general rule as to all remissions of\nimport charges.\n10.198 Turning now to the object and purpose of the SCM Agreement, Canada submits that the\npurpose of the SCM Agreement is to discipline subsidies that distort trade, and that the only real\neffect on trade of the Canadian import duty exemption is to increase the volume of duty-free imports\ninto Canada of vehicles that would not qualify for such treatment under the NAFTA. Canada also\nargues that, even assuming that the import duty exemption can be considered a subsidy, it is a subsidy\n\n892 Supra para. 7.2.\n\nof imports, not of exports. In response to a question from the Panel, Canada submits that, in the\nalternative, the import duty exemption is a produc tion-based subsidy by virtue of the production-to-\nsales ratio requirements.\n10.199 In order for a measure to fall within the scope of the SCM Agreement's prohibition of export\nsubsidies, it need only be a subsidy within the m eaning of Article 1 which is contingent upon export\nperformance within the meaning of Article 3.1(a). In this case, while the subsidy in question is\nprovided through the mechanism of a duty exemption for imports and thus arguably \"facilitates\nimports\", that does not change the fact that the subsidy is contingent upon export performance and\nthus falls within the scope of Article 3.1(a). In any event, and whether or not it also \"facilitates\nimports\", a subsidy which is contingent upon export performance can be expected to affect exporters'\nbehaviour. Thus, even if a showing that an export subsidy did not have any \"real effect\" on exports\nwere a defence to a claim under Article 3.1(a) – which of course it is not – Canada has not convinced\nus that the subsidy in question has not had any \"real effect\" in increasing Canadian exports of motor\nvehicles. Finally, we note that Canada's argument could, taken to its extreme, lead to the conclusion\nthat a financial contribution in the form of the foregoing of import duties could never give rise to an\nexport subsidy or, indeed, to any subsidy. Item (i) of the Illustrative List, however, clearly foresees\nthat the excessive remission or drawback of certain import charges constitutes a prohibited export\nsubsidy.\n10.200 We recall Japan's argument that the Canadian import duty exemption falls within item (a) of\nthe Illustrative List of Export Subsidies, that is, \"the provision by governments of direct subsidies to a\nfirm . . . contingent upon export performance.\" Having established that the Canadian import duty\nexemption violates Article 3.1(a) of the SCM Ag reement by reason of its being contingent upon\nexport performance, we need not, and do not, address this argument.\n10.201 For the reasons discussed in this section, we find that the Canadian import duty exemption is\na subsidy within the meaning of Article 1 of the SCM Agreement which is \"contingent . . . in law . . .\nupon export performance\" within the meaning of Article 3.1(a) of the Agreement. We therefore find\nthat Canada acts inconsistently with its obligations under Article 3.1(a) of the SCM Agreement.\n2. CVA requirements\n10.202 In the previous section of this report, we concluded that the import duty exemption provided\nby the Canadian Government to certain motor vehicle manufacturers under the MVTO 1998 and the\nSROs constitutes a subsidy within the meaning of Article 1 of the SCM Agreement ( supra paras.\n10.156-10.170). We now consider whether, as the European Communities and Japan claim, the\nimport duty exemption is contingent upon the use of domestic over imported goods within the\nmeaning of Article 3.1(b) of the SCM Agreement because it is accorded upon fulfilment of certain\nCanadian value-added (\"CVA\") requirements, and is thus prohibited under that provision.\n(a) Factual considerations\n10.203 We recall that three types of CVA requirements are at issue in this dispute.\n10.204 First, there are the CVA requirements under the MVTO 1998 itself. Under the MVTO 1998,\na manufacturer is entitled to benefit from the import duty exemption if, inter alia, that manufacturer's\ntotal Canadian value added with respect to a class of vehicles is equal to or greater than that\nmanufacturer's total value added with respect to that same class of vehicles in the base year. The term\n\"Canadian Value Added\" is defined in the MVTO 1998 as including: (i) the cost of parts produced in\nCanada and of materials of Canadian origin that are incorporated in the motor vehicles; (ii) direct\nlabour costs incurred in Canada; (iii) manufacturing overheads incurred in Canada; (iv) general and\nadministrative expenses incurred in Canada that are attributable to the production of motor vehicles;\n(v) depreciation in respect of machinery and permanent plant equipment located in Canada that is\n\nattributable to the production of motor vehicles; and (vi) a capital cost allowance for land and\nbuildings in Canada that are used in the production of motor vehicles.\n10.205 Second, there are CVA requirements in the SROs. SROs issued after 1984 typically require\nthat the total CVA of a manufacturer's vehicles produced in Canada in a given year must be at least 40\nper cent of the cost of sales of vehicles sold in Canada in the same year. By way of exception, one\nmanufacturer (CAMI) must meet a requirement that the total CVA of its vehicles and original\nequipment manufacturing parts produced in Canada in a given year must be at least 60 per cent of the\ncost of sales of vehicles sold in Canada in the same year.\n10.206 Third, there are Letters of Undertaking. Letters signed by General Motors, Ford, Chrysler\nand American Motors provide for two additional commitments with respect to CVA, i.e ., to increase\nin each ensuing model year over the base model year CVA in the production of vehicles by an amount\nequal to 60 per cent of the growth in their market for automobiles sold for consumption in Canada and\nby an amount equal to 50 per cent of the growth in their market for commercial vehicles sold for\nconsumption in Canada, and to achieve a stipulated increase in the annual CVA by the end of model\nyear 1968.\n(b) Arguments of the parties\n10.207 The European Communities acknowledges that access to the import duty exemption is not\nexplicitly conditioned upon the use of domestic over imported goods, but that it is rather conditioned\nupon reaching a certain level of CVA. It asserts, however, that because the use of domestic parts and\nmaterials may be sufficient, or at least contribute, to meeting the CVA requirements, the import duty\nexemption is contingent in law upon the use of domestic over imported goods. In short, the European\nCommunities considers that Article 3.1(b) prohibits any condition that gives preference to domestic\nover imported goods, irrespective of whether in practice domestic goods are actually used by the\nbeneficiary. The European Communities further argues in the alternative that the import duty\nexemption is in fact contingent upon the use of domestic over imported goods. In this respect, the\nEuropean Communities asserts that parts and materials amount on average to as much as 80 per cent\nof the cost of sales of motor vehicles assembled in Canada.\n10.208 Japan claims that the import duty exemption is contingent in law upon the use of domestic\nover imported goods, in that Article 3.1(b) prohibits subsidies that are contingent upon a condition\nthat requires the use of domestic over imported goods, as well as subsidies contingent on a condition\nthat favours the use of domestic over imported goods. Japan further argues in the alternative that the\nimport duty exemption is contingent in fact upon the use of domestic over imported goods in the case\nof the SROs to automobile manufacturers and the Letters of Undertaking which impose 60 per cent\nCVA requirements.\n10.209 Canada responds that the import duty exemption is not contingent in law on the use of\ndomestic over imported goods. Moreover, Canada contends that Article 3.1(b) contains no reference\nto contingency in fact and extends only to contingency in law. Even if Article 3.1(b) did extend to\ncontingency in fact, the import duty exemption is not contingent in fact upon the use of domestic\ngoods, because the words \"contingent upon\" should be interpreted to apply to subsidies that are\nconditional upon or tied to the use of domestic over imported goods. The import duty exemption is\navailable to manufacturers whether or not they use domestic goods, provided they meet their CVA\nrequirements. Canada points to the fact that a manufacturer may include in the calculation of CVA\nnot only goods, but direct labour costs, overhead, general and administrative expenses, depreciation\nand capital cost allowance for land and buildings.\n\n(c) Contingency in Law\n10.210 We first consider whether the Canadian import duty exemption is contingent in law upon the\nuse of domestic over imported goods.\n10.211 Article 3.1 provides, in relevant part:\n\"Except as provided in the Agreement on Agriculture, the following subsidies, within\nthe meaning of Article 1, shall be prohibited:\n……………………\n(b) subsidies contingent, whether solely or as one of several other conditions,\nupon the use of domestic over imported goods.\"\n10.212 In our examination of the complainants' claims under Article 3.1(a) of the SCM Agreement,\nwe examined the concepts of \"in law\" and \"in fact\" export contingency ( supra paras. 10.178-10.179)\nand concluded that export contingency in law refers to the situation where one can ascertain, on the\nface of the law (or other relevant legal instrument), that export contingency exists. Equally,\ncontingency in law upon the use of domestic over imported goods must refer to the situation where\nthe contingency is demonstrable \"on the basis of the words of the relevant legislation, regulation or\nother legal instrument\"\n893 rather than \"the total configuration of the facts constituting and surrounding\nthe granting of the subsidy\"894. Accordingly, we must first exam ine the legal instruments in question\nhere in order to determine whether eligibility fo r the import duty exemptions is contingent in law\nupon the use of domestic over imported goods.\n10.213 As we noted in the section of our report relating to claims under Article 3.1(a) of the SCM\nAgreement, the word \"contingent\" has been defined, inter alia, as \"conditional, dependent\".895 It is in\nlight of this ordinary meaning of the word \"con tingent\" that we must examine whether, under the\nCVA requirements outlined above, access to the import duty exemption is conditional or dependent\nupon the use of domestic over imported goods.\n10.214 We recall the view of the European Communities and Japan that Article 3.1(b) extends to\nsubsidies contingent on a condition that favours or gives preference to the use of domestic over\nimported goods. The complainants argue that the words \"over imported\" would be redundant if this\nprovision were interpreted to mean simply \"contingent on the use of domestic goods\". We note\nhowever that the text of Article 3.1(b) refers to subsidies \"contingent upon the use\" of domestic over\nimported goods. This language thus creates a direct link between the subsidy and the use of domestic\ngoods. We do not believe that the addition of the words \"over imported\" can be construed to weaken\nthat link. Rather, we believe that they were intended simply to emphasize that such subsidies are\nprohibited because of their probable adverse effects on other Members.\n10.215 The European Communities further argues that its interpretation furthers the object and\npurpose of Article 3.1(b), which it considers to be to avoid that subsidies be used to discriminate\nbetween domestic and imported goods used in the manufacture of other goods. We recognize that\nArticle 3.1(b) in some sense has its roots in Article III:4 of GATT and in certain interpretations of that\nprovision, which relates to non-discrimination. We do not consider however that Article 3.1(b) ipso\nfacto has the same scope as Article III:4. To the contrary, while Article III:4 of GATT speaks of\n\"treatment no less favourable\" and of requirements \"affecting\" internal sale, Article 3.1(b) speaks of\nsubsidies \"contingent upon the use of domestic over imported goods\". We are unwilling to import\n\n893 Appellate Body Report on Canada – Aircraft, supra note 875, para. 167.\n894 Ibid.\n895 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), supra note 884.\n\ninto Article 3.1(b) legal principles derived from the interpretation of a text which differs so markedly\nfrom that of Article 3.1(b).\n10.216 In applying these principles to the case at hand, we note that, while under the MVTO 1998\nand SROs access to the import duty exemption is contingent upon satisfying certain CVA\nrequirements,896 a value-added requirement is in no sense synonymous with a condition to use\ndomestic over imported goods. In this regard, we recall that the definition of \"CVA\" in the MVTO\n1998 includes, in addition to parts and materials of Canadian origin, such other elements as direct\nlabour costs, manufacturing overheads, general and administrative expenses and depreciation. Thus,\nand depending upon the factual circumstances, a manufacturer might well be willing and able to\nsatisfy a CVA requirement without using any domestic goods whatsoever. Under these\ncircumstances, it would be difficult for us to co nclude that access to the import duty exemption is\ncontingent, i.e. conditional or dependent, in law on the use of domestic over imported goods within\nthe meaning of the SCM Agreement.\n10.217 Finally, we recall the European Communities' argument that Article 3.1(b) prohibits\nsubsidies contingent, whether solely or as one of several other conditions, on the use of domestic over\nimported goods. The European Communities concedes that this may cover the situation where a\nsubsidy is simultaneously subject to two or more cumulative conditions (including the use of domestic\nover imported goods). The European Communities asserts, though, that this may also cover the\nsituation where a subsidy is subject to two or more alternative conditions, so that compliance with any\nof them gives a right to the subsidy. If one of those conditions is \"the use of domestic over imported\ngoods\" the subsidy must be deemed prohibited by Article 3.1(b), even if it is also possible to qualify\nfor the subsidy by complying with other alternative non-prohibited conditions, such as using domestic\nlabour or domestic services. Thus, the European Communities argues that the use of domestic over\nimported goods need not be a \"necessary\" condition in order for a subsidy to be prohibited under\nArticle 3.1(b) of the SCM Agreement.\n10.218 According to Canada, use of the clause \"whether solely or as one of several other conditions\"\nin Article 3.1(a) and (b) of the SCM Agreement means that the use of domestic goods or export\nperformance does not have to be the only condition for the receipt of the subsidy. There may also be\nadditional conditions to fulfil, but each condition must be mandatory. Canada contends that the clause\nis not satisfied simply because the use of domestic goods or export performance is among the ways to\nqualify for the subsidy. In the context of Article 3.1(a), for example, Canada denies that a subsidy is\ncontingent on export performance if receipt of the subsidy depends on either exporting or selling\ndomestically.\n10.219 The basic disagreement between the parties concerns whether the phrase \"several other\nconditions\" in Article 3.1(b) of the SCM Agreement would include several alternative conditions\n(including the use of domestic over imported goods). We do not consider it necessary to resolve this\ndisagreement, since we are not confronted with a situation where the bestowal of a subsidy is\ncontingent in law on the fulfilment of several alternative conditions. The import duty exemption at\nissue is contingent in law on three clear conditions, all of which must be met: (1) manufacturing\npresence, (2) ratio requirements, and (3) CVA requirements. The use of domestic over imported\ngoods is not an alternative condition, in law, for access to the import duty exemption. For that reason,\nthe question of whether the prohibition in Article 3.1(b) applies in circumstances where the use of\ndomestic over imported goods is one of several, alternative, conditions for the bestowal of a subsidy\ndoes not arise.\n\n896 However, with regard to the CVA requirements in the Letters of Undertaking, we recall our\nobservation in para. 10.120 that the legal instruments adopted by Canada in connection with the implementation\nof the Auto Pact do not provide for the authority to withdraw the import duty exemption in case of a failure to\nmeet the commitments contained in these Letters. Compliance with these commitments is not explicitly a factor\nin determining the eligibility for the import duty exemption.\n\n(d) Contingency in fact\n10.220 Having concluded that the import duty exemptions in this dispute are not contingent in law\nupon the use of domestic over imported goods, we must now consider the complainants' assertion in\nthe alternative that those exemptions are contingent in fact upon the use of domestic over imported\ngoods.\n10.221 We note the disagreement of the parties as to whether Article 3.1(b) extends to the situation\nwhere a subsidy is contingent in fact upon the use of domestic over imported goods. In this context,\nwe recall that Article 3.1 is, as clearly indicated by its chapeau, the provision that sets out the\nsubsidies prohibited under the SCM Agreement. Paragraphs (a) and (b) are both part of Article 3.1\nand manifestly similar. It is hard to imagine how the inclusion of the words \"in law or in fact\" in\nparagraph (a) and the absence of such words in paragraph (b) could be but a reflection of the intention\nof the drafters. We further recall that the Appellate Body has held in Japan – Alcoholic Beverages\nthat \"omission must have some meaning\". 897 That two provisions so alike and juxtaposed together\nshould differ from each other in such specific respect signals, in our view, that the omission of the\nwords \"in law or in fact\" from Article 3.1(b) was deliberate and that Article 3.1(b) extends only to\ncontingency in law.\n10.222 For the reasons discussed in this section, we are unable to find that the Canadian import duty\nexemption is a subsidy within the meaning of Article 1 of the SCM Agreement which is \"contingent\n… upon the use of domestic over imported goods\" within the meaning of Article 3.1(b) of the\nAgreement. We reject the European Communities' and Japan's claim accordingly.\nD. C\nLAIMS UNDER THE GATS\n1. Introduction\n10.223 The complainants argue that the import duty exemption granted to some\nmanufacturers/wholesalers of motor vehicles in Canada (\"manufacturer beneficiaries\") by the MVTO\n1998 and by the SROs, is inconsistent with Canada's obligations under Article II of the GATS, in that\nit grants more favourable treatment to suppliers of the United States than to suppliers of the European\nCommunities and Japan. Japan alone claims that the import duty exemption is inconsistent with\nCanada's obligations under Article XVII of the GATS in that it grants more favourable treatment to\nCanadian suppliers of wholesale trade services for motor vehicles, which benefit from duty-free\ntreatment, than to Japanese suppliers, which do not.\n10.224 Both complainants also claim that the CVA requirements in the MVTO 1998 and in the SROs\nare inconsistent with Article XVII of the GATS, in that they require manufacturers of motor vehicles\nto achieve a minimum of Canadian value added in order to benefit from the import duty exemption,\ntherefore according more favourable treatment to services supplied in Canada than to services of other\nMembers supplied through modes 1 (\"cross-border supply\") and 2 (\"consumption abroad\"). The\ncomplainants point out that the CVA requirements create an incentive for manufacturer beneficiaries\nto procure services from suppliers established in Canada to the detriment of services supplied through\nmodes 1 and 2.\n10.225 Canada rejects the claims of the complainants on the grounds, first, that the import duty\nexemption is not a measure affecting trade in services within the meaning of Article I of the GATS.\nWith respect to the Article II claim, Canada argues that the import duty exemption does not modify\nthe conditions of competition in favour of services and service suppliers of the United States, for two\nreasons: (i) there are European and Japanese wholesale trade service suppliers of motor vehicles\nwhich benefit from the import duty exemption; and (ii) due to vertical integration between\n\n897 Appellate Body Report on Japan – Alcoholic Beverages, supra note 271, p. 18.\n\nmanufacturers and wholesalers in the motor vehicle industry, there is no effective competition at the\nwholesale trade level, so that granting the import duty exemption to manufacturer beneficiaries cannot\nbe said to affect competition. With respect to the claim by Japan that the import duty exemption also\nviolates Article XVII of the GATS, Canada responds that it has no specific commitments in wholesale\ntrade services for motor vehicles and that therefore it is not bound by the national treatment obligation\nin this sector. In addition, Canada argues that there are no \"like\" Canadian and Japanese suppliers of\nwholesale trade services for motor vehicles to whom national treatment would apply and that, as for\nArticle II, due to vertical integration between ma nufacturers and wholesale trade service suppliers,\nthere is no competition which can be affected at the wholesale trade level.\n10.226 With respect to the claim that the CVA re quirements in the MVTO 1998 and in the SROs\nviolate Article XVII of the GATS, Canada responds th at a series of circumstances exclude that these\nmeasures could violate any of its specific commitments: (i) Canada has inserted relevant limitations to\nits commitments in the relevant sectors; (ii) the supply of many of the relevant services through\nmodes 1 and 2 is not technically feasible; (iii) where it is technically feasible, the supply of the\nrelevant services through modes 1 and 2 suffers from a competitive disadvantage, due to the inherent\nforeign character of these services and not to the CVA requirements; and (iv) most manufacturer\nbeneficiaries achieve the required proportion of Canadian value-added through their employment of\nCanadian labour so that the effect of the CVA requirements on their procurement of services is\nminimal.\n10.227 In addition, if the Panel were to find that the import duty exemption was a measure affecting\ntrade in services within the meaning of Article I of the GATS, Canada endorses the suggestion made\nby the United States in its third-party submission that Article V:1 would apply to any alleged violation\nof Article II arising from a provision of the NAFTA, such as the measures at issue in this case.\n10.228 In our consideration of the claims raised under the GATS, we first examine the general issue\nof whether the measures, which the complainants claim to be in violation of Articles II and XVII of\nthe GATS, constitute \"measures affecting trade in services\" within the meaning of Article I of the\nGATS. Second, we examine the consistency of the import duty exemption, granted under the MVTO\n1998 and the SROs, with Article II and with Canada's specific commitments under Article XVII of\nthe GATS in wholesale trade services. We then consider the compatibility of the CVA requirements\nin the MVTO 1998 and in the SROs with Canada's specific commitments under Article XVII of the\nGATS in various services sectors related to the production of motor vehicles, which the complainants\nclaim to be affected by the CVA requirements. Finally, we address the role of Article V of the GATS\nwith respect to the import duty exemption, which the complainants claim to be in violation of\nArticle II of the GATS.\n2. Measures affecting trade in services\n10.229 The complainants argue that the import duty exemption and the CVA requirements in the\nMTVO 1998 and in the SROs are \"measures affec ting trade in services\" within the meaning of\nArticle I of the GATS. They note that the panel and the Appellate Body in EC – Bananas III\n898 found\nthat the term \"affecting\" has a broad scope of application and that accordingly no measures are a\npriori excluded from the scope of application of the GATS. They also point out that the panel in EC –\nBananas III found that the list of matters in Article XXVIII(c) in respect of which measures by\nMembers affecting trade in services can be taken is an illustrative one and that the word \"affecting\" in\nArticle XXVIII cannot be read as meaning merely \"in respect of\".\n10.230 Canada responds that the import duty exemption is not a \"measure affecting trade in services\"\nwithin the meaning of Article I of the GATS, because, as a tariff measure, it affects the goods\nthemselves and not the supply of distribution services. According to Canada, the import duty\n\n898 Panel Report on EC – Bananas III, supra note 269.\n\nexemption does not affect a manufacturer in its capacity as a service supplier and in its supply of a\nservice.\n10.231 We note that Article I:1 of the GATS establishes that \"this Agreement applies to measures by\nMembers affecting trade in services\". The panel and the Appellate Body in EC – Bananas III found\nthat the term \"affecting\" in Article I of the GATS has a broad scope of application and that\naccordingly no measures are a priori excluded from the scope of application of the GATS. The panel\nin EC – Bananas III pointed out that:\n\" ... the drafters [of the GATS] consciously adopted the terms 'affecting' and 'supply\nof a service' to ensure that the disciplines of the GATS would cover any measure\nbearing upon conditions of competition in supply of a service, regardless of whether\nthe measure directly governs or indirectly affects the supply of the service.\"\n899\n10.232 The Appellate Body upheld this finding of the panel and noted that:\n\" ... the use of the term 'affecting' reflects the intent of the drafters to give a broad reach\nto the GATS. The ordinary meaning of the word 'affecting' implies a measure that has\n'an effect on', which indicates a broad scope of application.\"900\n10.233 The Appellate Body also found that, in addition to measures affecting trade in g oods as goods\nand measures affecting the supply of services as services, falling respectively and exclusively within the\nscope of the GATT 1994 or GATS:\n \"there is yet a third category of measures that could be found to fall within the scope\nof both the GATT 1994 and the GATS. These are measures that involve a service\nrelating to a particular good or a service supplied in conjunction with a particular\ngood. In all such cases in this third category, the measure in question could be\nscrutinized under both the GATT 1994 and the GATS.\"\n901\n10.234 We note that Article I of the GATS does not a priori exclude any measure from the scope of\napplication of the Agreement . The determination of whether a measure affects trade in services\ncannot be done in abstract terms in isolation from examining whether the effect of such a measure is\nconsistent with the Member's obligations and commitments under the GATS. In this case, the\ndetermination of whether the MVTO 1998 and SROs are measures affecting trade in services within\nthe meaning of Article I of the GATS should be done on the basis of the determination of whether\nthese measures constitute less favourable treatment for the services and service suppliers of some\nMembers as compared to those of others (Article II) and/or for services and service suppliers of other\nMembers as compared to domestic ones (Article XVII).\n10.235 Therefore, we do not address the issues of whether the MVTO 1998 and SROs affect trade in\nservices in isolation from the issue of whether such measures have an effect that is inconsistent with\nan obligation in the Agreement.\n3. Claims Under Article II of the GATS\n10.236 The complainants claim that the import duty exemption granted by the MVTO 1998 and\nSROs to some manufacturers/wholesalers of motor vehicles – the manufacturer beneficiaries –\nviolates Article II of the GATS in that it const itutes more favourable treatment accorded to services\n\n899 Panel Report on EC – Bananas III (USA), supra note 269, para. 7.281.\n900 Appellate Body Report on EC – Bananas III, supra note 49, para. 220.\n901 Ibid., para. 220.\n\nand service suppliers of the United States than that accorded to those of other Members. We note that\nArticle II (1) of the GATS establishes that:\n\"With respect to any measure covered by this Agreement, each Member shall accord\nimmediately and unconditionally to services and service suppliers of any other\nMember treatment no less favourable than that it accords to like services and service\nsuppliers of any other country\".\n10.237 The complainants argue that the import duty exemption constitutes de facto discrimination\nbecause, although the criteria for obtaining the exemption contained in the MTVO 1998 and SROs are\nnot based on nationality, in fact all the beneficiaries are suppliers of the United States. Japan also\nclaims that the import duty exemption is inconsistent with the requirement in Article II that treatment\nno less favourable be granted \"immediately and unconditionally\". Canada argues that among the\nbeneficiaries of the exemption there are companies which are suppliers of the European Communities\nand of Japan. It argues further that it is not possible to maintain that the measure modifies the\nconditions of competition among wholesale trade suppliers of motor vehicles because, due to vertical\nintegration and exclusive distribution between manufacturers and wholesalers of motor vehicles, there\nis no competition to be affected at the wholesale trade level.\n(a) Whether the import duty exemption affects wholesale trade services\n10.238 The complainants claim that the import duty exemption affects the supply of wholesale trade\nservices, as it modifies the conditions of competition between the beneficiaries of the duty-free\ntreatment and other wholesale trade service suppliers of imported motor vehicles which do not benefit\nfrom the same treatment. In particular, the import duty exemption would directly affect the cost of the\ngoods being distributed and indirectly affect the cost and/or profitability of the related wholesale trade\nservices. Canada responds that the import duty exemption is not a measure affecting trade in services\nwithin the meaning of Article I of the GATS, because, as a tariff measure, it affects the goods\nthemselves and not the supply of distribution services. According to Canada, such measures do not\naffect a service supplier in its capacity as service supplier and in its supply of a service. On the basis\nof the Report of the Appellate Body in EC – Bananas III , Canada argues that the import duty\nexemption is a measure falling exclusively within the scope of the GATT 1994, as it affects trade in\ngoods as goods, unlike other measures which involve a service relating to a particular good or a\nservice supplied in conjunction with a particular good, which are subject to both the GATT 1994 and\nthe GATS.\n10.239 We note that if, on the one hand, it could be argued that the import duty exemption directly\naffects trade in goods and that it does not directly govern the supply of distribution services, on the\nother hand it cannot be maintained that it does not indirectly affect the supply of distribution services.\nLike the measures at issue in the EC – Bananas III case, the import duty exemption granted only to\nmanufacturer beneficiaries bears upon conditions of competition in the supply of distribution services,\nregardless of whether it directly governs or indirectly affects the supply of such services. In our view,\ntherefore, the import duty exemption falls in the third category of measures, identified by the\nAppellate Body in EC – Bananas III, as involving \"a service relating to a particular good or a service\nsupplied in conjunction with a particular good\", which \"could be scrutinized under both the GATT\n1994 and the GATS\".\n10.240 Canada points out that potentially all tariff measures could be found to affect trade in\nservices, and particularly distribution services. It therefore argues that, if it is found that the import\nduty exemption is a measure affecting trade in services, other tariff measures would have to be seen as\n\"measures affecting trade in services\", which might lead to the anomalous result that some measures\nwhich are legal under the GATT could be found to be in violation of the GATS. For example,\n\ndifferential tariffs which are legal under GATT Articles XXIV and VI might be found to violate\nArticle II of the GATS.\n10.241 Canada also points out that its view that tariff measures cannot be considered measures\naffecting trade in services is supported by Addendum 1 to the Scheduling Guidelines ( Scheduling of\nInitial Commitments in Trade in Services: Explanatory Note - Addendum , MTN.GNS/W/164/Add.1)\nwhich provides the following answer to question 6 on whether it is \"necessary to reserve the right to\nimpose customs duties and regulations on the movement of goods in relation to the supply of a\nservice\":\n\"There is no requirement in the GATS to schedule a limitation to the effect that the\ncross-border movement of goods associated with the provision of a service may be\nsubject to customs duties or other administrative charges. Such measures are subject\nto the disciplines of the GATT.\".\n10.242 In the present case the issue of measures which maybe legal under the GATT but constitute a\nviolation of the GATS does not arise. More importantly, the issue before us is not the effect of the\ndifferential between the MFN rate of duty and the preferential zero-duty itself, but rather, the effect of\nmeasures which reserve access to duty-free goods to a closed category of service suppliers, while\nexcluding others.\n10.243 We note that although the answer to the quest ion on custom duties in the Addendum to the\nScheduling Guidelines makes it clear that Members are not required to schedule customs duties, the\nmeasures which are claimed to be inconsistent with the GATS in this case are not \"customs duties and\nregulations on the movement of goods in relation to the supply of a service\", but regulations which\nreserve access to duty-free goods to a closed category of service suppliers, i.e. manufacturer\nbeneficiaries, while excluding others. Canada would not therefore be required to schedule the\ndifferential tariff rates applied to imports of motor vehicles; it would only be required to schedule\nlimitations and/or list MFN exemptions relating to measures which prevent certain distributors from\nhaving access to the right to import motor vehicles duty free.\n10.244 The complainants argue that there is no difference in nature between the import duty\nexemption and the measures at issue in the EC – Bananas III case. The first, like the second, confers\na tariff advantage on a restricted category of suppliers, which allows them to import and resell under\nmore favourable conditions. The complainants note that the tariff quota at issue in EC – Bananas III\ndid not prevent operators from obtaining licences , as licences were freely tradeable. However,\nimporters who had been allocated licences by the European Communities would be able to retain the\n\"tariff quota rent\" (the advantage of importing in-quota goods at preferential rates), while other\noperators would have to buy licences at an additional cost on the market. The complainants also note\nthat if it is the case that the measures at issue in EC – Bananas III and the import duty exemption are\nof the same type, differences in the intensity of their restrictive effect should not matter in the\ndetermination of whether the measures affect trade in services, as there is no de minimis rule in\nArticle II or XVII of the GATS.\n10.245 Regarding the analogy with the measures at issue in the EC – Bananas III case, Canada\nresponds that the measure which determined the allocation of licences in that case directly affected the\nimporters/distributors of bananas, while in the present case the differential duty on motor vehicles\naffects only trade in goods. Moreover, according to Canada, in EC – Bananas III the issue of the\neffect on distribution services of an existing differential duty was not even addressed by the panel.\nCanada also makes the point that, unlike differential duties such as those resulting from the import\nduty exemption, the quota for the allocation of licences in EC – Bananas III made it impossible for\nsome distributors to obtain licences and this restrictive effect was not mitigated by the fact that the\nlicences were freely tradeable, as the tariff quota rent charged by licence holders was substantial.\n\n10.246 We note that both sets of measures allow some wholesale trade service suppliers to import\nand resell under more favourable conditions, while putting at a competitive disadvantage other\nsuppliers, who have to pay the tariff or buy licences out of the tariff quota. Canada's claim that the\ntariff quota and licensing system in EC – Bananas III , unlike the import duty exemption under the\nAuto Pact, \"was critical to the scope and profitability of the provision of services by the independent\nbanana distributors and to the ability of even the in tegrated distributors to import at all\" appears to be\nbased on a quantitative assessment of the effect of the measures at issue, rather than on a distinction\nbetween tariff measures and import quotas: in the EC – Bananas III case, in spite of the quota system,\nlicences were freely tradeable, so that the effect of the system was to put some distributors at a\ncompetitive disadvantage rather than to prevent th em from selling in-quota bananas. In both cases\nthere is an economic disadvantage. We note, therefore, that it is not relevant to distinguish between\nthe measures at issue in EC – Bananas III and the measures at issue in this case on the basis of the\nextent of their effect on trade in services.\n(b) Whether service suppliers are \"like\"\n10.247 The complainants argue, and Canada does not contest, that manufacturer beneficiaries and\nnon-manufacturer-beneficiaries provide \"like\" services and are \"like\" service suppliers, irrespective of\nwhether their services are supplied with respect to motor vehicles imported by the manufacturer\nbeneficiaries or with respect to motor vehicles imported by non-manufacturer-beneficiaries, and\nregardless of whether or not they have production facilities in Canada.\n10.248 We agree that to the extent that the service suppliers concerned supply the same services, they\nshould be considered \"like\" for the purpose of this case.\n(c) Whether treatment no less favourable is accorded\n(i) Structure of competition in the wholesale trade services market\n10.249 Canada argues that it is not possible to establish whether treatment no less favourable has\nbeen granted or not, due to vertical integration and exclusive distribution arrangements existing in the\nmotor vehicle industry between manufacturers a nd wholesale trade service suppliers, which exclude\nany actual or potential competition at the wholesale trade level. Canada points out that the\ncharacteristics of the motor vehicles industry also prevent vertically integrated companies from\nwholesaling vehicles manufactured by other compan ies. According to Canada, this factor should\ndistinguish this case from EC –- Bananas III , where it was held that, in spite of vertical integration,\nthe characteristics of the industry allowed even operators forming part of vertically integrated\ncompanies to enter the wholesale service market.\n10.250 The complainants point out that, in spite of vertical integration and exclusive distribution\nagreements in the motor vehicle industry, it is possible to establish less favourable treatment of\nwholesale trade services suppliers because there is potential competition among wholesalers for the\nprocurement of vehicles from manufacturers and actual competition for sales to retailers of directly\ncompetitive vehicles. They argue that the existence of potential competition for purchases from\nmanufacturers is confirmed by the fact that in the past Chrysler, a company of United States origin,\ndistributed in Canada vehicles manufactured by Mitsubishi, a company of Japanese origin. The\ncomplainants also rely on the ruling of the Appellate Body in EC – Bananas III, which held that \"even\nif a company is vertically integrated ... to the exte nt that it is also engaged in providing 'wholesale\ntrade services' ... that company is a service supplier within the scope of the GATS.\"\n902\n10.251 Canada responds that the Chrysler-Mitsubishi relationship is not a good example of\ncompetition in the wholesale trade market, as the two companies were related through a joint venture\n\n902 Ibid., para. 227.\n\nagreement. It also contests that actual competition exists for sales to retailers, as, due to exclusive\ndistribution arrangements between manufacturers and wholesalers, retailers will always have to\naddress the same wholesaler for a particular brand of vehicle.\n10.252 We note that in the EC – Bananas III case the Appellate Body found that:\n\" ... even if a company is vertically integrated ... to the extent that it is also engaged in\nproviding 'wholesale trade services' ... that company is a service supplier within the\nscope of the GATS\". 903\n10.253 In our view, vertical integration of prod uction and distribution does not exclude the\npossibility of considering the distribution operator as a service supplier, which may be affected in its\ncapacity as a service supplier by measures such as the import duty exemption, regardless of whether\nactual competition exists in the wholesale trade market. We also note that vertical integration might\ndetermine the absence of actual competition among wholesalers with respect to the procurement of\nvehicles from manufacturers, but it neither rules out potential competition in the wholesaler-\nmanufacturer relationship, nor actual competition in the wholesaler-retailer relationship. Although\ndue to the existing structure of the market, wholesale trade service suppliers procure their vehicles\nfrom the same manufacturers, no government measure prevents even a vertically integrated wholesale\ndistributor from approaching different manufacturers for the procurement of motor vehicles.\nRegarding competition for sales to retailers, the fact that, due to exclusive distribution arrangements\nbetween manufacturers and wholesalers, retailers have to address the same wholesaler for a particular\nbrand of vehicle (absence of intra-brand competition), does not exclude competition among\nwholesalers providing directly competitive vehicles (inter-brand competition).\n10.254 We therefore find that vertical integration and exclusive distribution arrangements between\nmanufacturers and wholesalers in the motor vehicle industry do not rule out the possibility that\ntreatment less favourable may be granted to suppliers of wholesale trade services for motor vehicles.\nWe also find that vertical integration and exclusive distribution arrangements do not preclude\npotential competition among wholesalers for the pr ocurement of vehicles from manufacturers and\nactual inter-brand competition for sales to retailers.\n(ii) Manufacturing presence and closed list of Auto Pact manufacturer beneficiaries\n10.255 The complainants argue that although the criteria for eligibility for the import duty exemption\nare not expressly based on nationality, the import duty exemption constitutes de facto discrimination\nunder Article II of the GATS as all or almost all services suppliers of other Members who benefit\nfrom the exemption are of the United States. Canada responds that not only is nationality not a\ncriterion for granting the import duty exemption under the Auto Pact, but also that the measures do\nnot de facto grant more favourable treatment to the suppliers of one Member, namely, the United\nStates. Canada points out that at least two manufacturer beneficiaries are of EC origin (Volvo Canada\nLtd. and DaimlerChrysler Canada Inc.), and one is a 50/50 joint venture between juridical persons of\nJapan and the United States (CAMI Automotive Inc.). This claim is rejected by the European\nCommunities and Japan. In their replies to question 57 from the Panel both complainants have\nmaintained that the import duty exemption results in de facto discrimination, but have also pointed out\nthat in their view the existence of a closed list of manufacturer beneficiaries constitutes formally\ndifferent treatment.\n10.256 We note that Article XXVIII(m) of the GATS provides the following definition of a \"juridical\nperson of another Member\":\n\"'juridical person of another Member' means a juridical person which is either:\n\n903 Ibid., para. 227.\n\n(i) constituted or otherwise organized under the law of that other Member, and is\nengaged in substantive business operations in the territory of that Member or any\nother Member; or\n(ii) in the case of the supply of a service through commercial presence, owned or\ncontrolled by:\n1. natural persons of that Member; or\n2. juridical persons of that other Member identified under\nsubparagraph (i).\"\n10.257 In our view, DaimlerChrysler Canada Inc. is a service supplier of the United States within the\nmeaning of Article XXVIII(m)(ii)(2) of the GATS, because it is controlled by DaimlerChrysler\nCorporation, a juridical person of the United States according to subparagaph (i) of\nArticle XXVIII(m). What is relevant, therefore, is that DaimlerChrysler Corporation is a juridical\nperson of the United States. The fact that, in turn, DaimlerChrysler Corporation may be controlled by\na juridical person of another Member is not releva nt under Article XXVIII of the GATS. In order to\ndefine a \"juridical person of another Member\" Article XXVIII(m) of the GATS does not require the\nidentification of the ultimate controlling juridical or natural person: it is sufficient to establish\nownership or control by a juridical person of another Member, defined according to the criteria set out\nin subparagraph (i).\n904\n10.258 Regarding CAMI Automotive Inc., it appears that it is a company jointly owned by Suzuki\nMotor Co. of Japan and by General Motors Corp. of the United States. The European Communities\nhave argued that, although CAMI is jointly owned by juridical persons of Japan and of the United\nStates, it should be regarded as a juridical person of the United States as it is controlled by General\nMotors Corp., a juridical person of the United States. The European Communities points out that\nGeneral Motors Corp. is the largest single shareholder of Suzuki Motor Co. and that Japanese\nnationals constitute a minority in the board of directors of CAMI. In our view, however, no evidence\nhas been presented which would allow the Panel to determine which juridical person \"controls\"\nCAMI, within the meaning of Article XXVIII(n)(ii) of the GATS.\n10.259 As regards Volvo Canada Ltd., it should be noted that ownership and control of this company\npassed from Volvo AB of Sweden to Ford Motor C o. of the United States in January 1999, when the\nformer agreed to sell its passenger car business to the latter. As a consequence, Volvo Canada Ltd. is\nnow a juridical person of the United States according to Article XXVIII(m) of the GATS. Moreover,\nas Volvo Canada Ltd. closed its Canadian plant in December 1998, it would lose its right to import\nmotor vehicles duty free under the import duty exemption.\n10.260 The MVTO 1998 restricts eligibility for the import duty exemption to manufacturers who had\noperated in Canada in the base year 1963-64, while SROs allowed other individual manufacturers to\nqualify until 1989, subject to manufacturing presence and CVA requirements referring to different\nbase years. Eligibility for SROs, howev er, ended in 1989, effectively freezing the status quo of the\nbeneficiaries of the import duty exemption. This is confirmed by Canada's reply to question 37 from\nthe Panel, which says that the list of manufacturers under the SROs cannot be expanded, but only\n\n904 In the EC – Bananas III case, on the point of the determination of the origin of a juridical person,\nthe panel stated that: \"… suppliers which are commercially present within the EC territory and owned or\ncontrolled by, for example, Del Monte Mexico would be entitled to benefit from GATS rights because it would not\nmatter under Article XXVIII(m) of GATS whether Del Monte Mexico was owned or controlled by natural or\njuridical persons of Jordan, i.e. a WTO non-Member, as long as Del Monte Mexico was incorporated in Mexico\nand engaged in substantive business operations in the territory of Mexico or any other Member.\" See, Panel Report\non EC – Bananas III (USA), supra note 269, footnote 493, para. 7.318.\n\nupdated to reflect a change in a company's name or to remove companies that have ceased\nmanufacturing. The category of manufacturer beneficiaries is therefore currently a closed one, so that\nafter 1989 it became impossible for other manufacturers/wholesalers to fulfil the criteria required in\norder to qualify for the import duty exemption.\n10.261 Although none of the criteria for granting the import duty exemption is expressly based on\nnationality, the manufacturing presence requirement, referring to the period 1 August 1963 – 31 July\n1964 in the MVTO 1998, has allowed only three service suppliers of the United States (Chrysler\nCanada Ltd., General Motors of Canada Ltd. and Ford Motor Company of Canada Ltd.) and one\nservice supplier of Sweden (Volvo Canada Ltd.) to qualify for the import duty exemption. 905 It was\nnoted above that Volvo Canada Ltd. recently passed under the control of a juridical person of the\nUnited States (Ford Motor Co.). SROs have been used to expand the category of manufacturer\nbeneficiaries by allowing two other manufacturers/wholesalers of automobiles (Intermeccanica of\nCanada and CAMI, a 50/50 joint venture between Suzuki Motor Co. of Japan and General Motors\nCorp. of the United States) and several manufacturers/wholesalers of buses and specified commercial\nvehicles to qualify for the import duty exemption.\n10.262 In our view, the import duty exemption, as provided in the MVTO 1998 and SROs, results in\nless favourable treatment accorded to services and service suppliers of any other Member within the\nmeaning of Article II:1 of the GATS, as such benefit is granted to a limited and identifiable group of\nmanufacturers/wholesalers of motor vehicles of some Members, selected on the basis of criteria such\nas the manufacturing presence in a given base year. We also note that the manufacturing presence\nrequirements in the MVTO 1998 and in the SROs explicitly exclude suppliers of wholesale trade\nservices of motor vehicles, which do not manufacture vehicles in Canada, from qualifying for the\nimport duty exemption. In addition, the fact that in 1989 the Government of Canada stopped granting\nSROs makes the list of the beneficiaries of the import duty exemption a closed one. As a result,\nmanufacturers/wholesalers of motor vehicles of some Members can import vehicles into Canada duty-\nfree, while manufacturers/wholesalers of other Members are explicitly prevented from importing\nvehicles duty free into Canada.\n10.263 We do not address separately the claim by Japan that the import duty exemption is\ninconsistent with the requirement in Article II that treatment no less favourable be accorded\n\"immediately and unconditionally\", as in our view this claim is addressed by our finding relating to\nwhether the import duty exemption constitutes \"treatment less favourable\" within the meaning of\nArticle II of the GATS.\n10.264 In light of the foregoing, we find that with respect to the import duty exemption, granted to a\nlimited number of manufacturers/wholesalers of motor vehicles, Canada has failed to accord\nimmediately and unconditionally to services and service suppliers of any other Member treatment no\nless favourable than it accords to like services and service suppliers of any other country. We find,\ntherefore, that the import duty exemption acco rded pursuant to the MVTO 1998 and the SROs is\ninconsistent with the requirements of Article II:1 of the GATS.\n4. Applicability of Article V of the GATS\n10.265 In its third-party submission the United States claims that the MVTO 1998 and SROs, to the\nextent that they provide more favourable treatment to service suppliers of the United States, are\nsubject to the exception to Article II of the GATS conferred by Article V:1 of the GATS. According\nto the United States this is so, because the more favourable treatment the complainants are seeking to\n\n905 The MVTO 1965, which implemented the Canada-US Auto Pact in Canada, originally applied to six\nautomobile producers (American Motors, Chrysler, Ford, General Motors, Studebaker and Volvo), all of North\nAmerican origin with the exception of Volvo, and to a number of producers of specified commercial vehicles\nand buses.\n\ncondemn is being accorded by a member of an economic integration agreement of the type specified\nby Article V:1, the North American Free Trade Agreement (NAFTA), to the service suppliers of\nanother Member of that agreement. The United States also points out that the services provisions of\nNAFTA clearly fall within the terms of GATS Article V:1. Canada does not invoke Article V, as it\nmaintains that the MVTO 1998 and SROs are not measures affecting trade in services within the\nmeaning of Article I of the GATS. However, if the Panel were to find that the MVTO 1998 and\nSROs were measures affecting trade in services inconsistent with Article II of the GATS, Canada\nargues that they are covered by Article V:1 of the GATS.\n10.266 The complainants argue that Article V cannot apply to the facts of this case, because the\nMVTO 1998 and SROs are unilateral measures and cannot be considered an \"agreement\" within the\nmeaning of Article V:1 of the GATS (the original Auto Pact is no longer being implemented by the\nUnited States). The complainants also point out that even if the MVTO 1998 and SROs were to be\nconsidered an agreement within the meaning of Article V:1 of the GATS, this would lack the\nsubstantial sectoral coverage required by Article V:1(a), it would fail to eliminate substantially all\ndiscrimination in the sense of Article XVII between or among the parties (Article V:1(b)) and it\nwould raise the overall level of barriers to trade in services in the sector (Article V:4). Both\ncomplainants also point out that the MVTO 1998 and SROs cannot be considered a part of NAFTA,\nas NAFTA contains prohibitions on import duty exemptions and perfomance requirements. They\nnote that NAFTA does not require, it merely allows Canada to maintain the MVTO 1998 and SROs\nby means of express exceptions.\n10.267 We note that Article V:1 of the GATS provides in relevant part:\n\"1. This Agreement shall not prevent any of its Members from being a party to or\nentering into an agreement liberalizing trade in services between or among the parties\nto such an agreement, provided that such an agreement:\n(a) has substantial sectoral coverage ( footnote omitted), and\n(b) provides for the absence or elimination of substantially all discrimination, in\nthe sense of Article XVII, between or among the parties, in the sectors covered under\nsubparagraph (a), through:\n(i) elimination of existing discriminatory measures, and/or\n(ii) prohibition of new or more discriminatory measures\"\n10.268 We note the argument of the United States that the measures at issue in this case are covered\nby Article V:1 of the GATS because they are accorded by a member of NAFTA to the service\nsuppliers of another member of the same economic integration agreement. In our view, however, the\nMVTO 1998 and SROs are measures which cannot be considered as part of NAFTA provisions on\nliberalization of trade in services; rather, NAFTA members have agreed to allow their continued\nimplementation through specific exceptions granted to Canada. Paragraph 1 of Annex 300-A.1 of\nNAFTA states that \"Canada and the United States may maintain the Agreement Concerning\nAutomotive Products between the Government of Canada and the Government of the United States of\nAmerica\". Annex I – Canada of the NAFTA also states that \"Canada may grant waivers of custom\nduties conditioned, explicitly or implicitly, on the fulfilment of performance requirements\".\n10.269 Even assuming that the MVTO 1998 and the SROs could be brought within the scope of the\nservices liberalization provisions of NAFTA, we note that the import duty exemption under the\nMVTO 1998 and SROs is accorded to a small num ber of manufacturers/wholesalers of the United\nStates to the exclusion of all other manufacturers/wholesalers of the United States and of Mexico.\nThe MVTO 1998 and SROs, therefore, provide more favourable treatment to only some and not all\n\nservices and service suppliers of Members of NAFTA, while, according to Article V:1(b), an\neconomic integration agreement has to provide for \"the absence or elimination of substantially all\ndiscrimination, in the sense of Article XVII\", in or der to be eligible for the exemption from Article II\nof the GATS.\n10.270 Although the requirement of Article V:1(b) is to provide non-discrimination in the sense of\nArticle XVII (National Treatment), we consider that once it is fulfilled it would also ensure non-\ndiscrimination between all service suppliers of other parties to the economic integration agreement. It\nis our view that the object and purpose of this provision is to eliminate all discrimination among\nservices and service suppliers of parties to an economic integration agreement, including\ndiscrimination between suppliers of other parties to an economic integration agreement. In other\nwords, it would be inconsistent with this provision if a party to an economic integration agreement\nwere to extend more favourable treatment to service suppliers of one party than that which it extended\nto service suppliers of another party to that agreement.\n10.271 Moreover, it is worth recalling that Article V provides legal coverage for measures taken\npursuant to economic integration agreements, which would otherwise be inconsistent with the MFN\nobligation in Article II. Paragraph 1 of Article V refers to \"an agreement liberalizing trade in\nservices\". Such economic integration agreements typically aim at achieving higher levels of\nliberalization between or among their parties than that achieved among WTO Members. Article V:1\nfurther prescribes a certain minimum level of liberalization which such agreements must attain in\norder to qualify for the exemption from the general MFN obligation of Article II. In this respect, the\npurpose of Article V is to allow for ambitious liberalization to take place at a regional level, while at\nthe same time guarding against undermining the MFN obligation by engaging in minor preferential\narrangements. However, in our view, it is not within the object and purpose of Article V to provide\nlegal coverage for the extension of more favourable treatment only to a few service suppliers of\nparties to an economic integration agreement on a selective basis, even in situations where the\nmaintenance of such measures may explicitly be provided for in the agreement itself.\n10.272 In light of the foregoing, we find that Article V:1 of the GATS does not exempt Canada from\nits obligations under Article II of the GATS with respect to the MVTO 1998 and SROs.\n5. Claims Under Article XVII of the GATS – import duty exemption\n10.273 Japan alone claims that the import duty exemption also violates Article XVII of the GATS in\nthat it constitutes more favourable treatment accorded to Canadian services and service suppliers,\nwhich have the right to import vehicles duty free, than to Japanese ones who do not.\n10.274 We note that Article XVII of the GATS establishes that:\n\"1. In the sectors inscribed in its Schedule, and subject to any conditions and\nqualifications set out therein, each Member shall accord to services and service\nsuppliers of any other Member, in respect of all measures affecting the supply of\nservices, treatment no less favourable than that it accords to its own like services and\nservice suppliers. ( Footnote reads: Specific commitments assumed under this\nArticle shall not be considered to require any Member to compensate for any inherent\ncompetitive disadvantages which result from the foreign character of the relevant\nservices or service suppliers.)\n2. A Member may meet the requirement of paragraph 1 by according to services\nand service suppliers of any other Member, either formally identical treatment or\nformally different treatment to that it accords to its own like services and service\nsuppliers.\n\n3. Formally identical or formally differ ent treatment shall be considered to be\nless favourable if it modifies the conditions of competition in favour of services or\nservice suppliers of the Member compared to like services or service suppliers of any\nother Member.\"\n10.275 Japan claims that the import duty exemption affects the supply of wholesale trade services, as\nit modifies the conditions of competition between Canadian beneficiaries of the duty-free treatment\nand foreign wholesale trade service suppliers of imported motor vehicles which do not benefit from\nthe same treatment. In particular, the import duty exemption would directly affect the cost of the\ngoods being distributed and indirectly affect the cost and/or profitability of the related wholesale trade\nservices.\n10.276 Canada argues that the import duty exemption is not a measure affecting trade in services\nwithin the meaning of Article I of the GATS, because, as a tariff measure, it affects the goods\nthemselves and not the supply of distribution services. According to Canada, such measures do not\naffect a service supplier in its capacity as service supplier and in its supply of a service. Canada\nfurther argues that: (i) it has not undertaken co mmitments in wholesale trade services of motor\nvehicles; (ii) if it had undertaken commitments it did not need to schedule custom duties as national\ntreatment limitations; (iii) there are no \"like\" Canadian and Japanese suppliers of wholesale trade\nservices for motor vehicles in Canada; and (iv) as with Article II, it is not possible to argue that the\nimport duty exemption modifies the conditions of competition among wholesale trade suppliers of\nmotor vehicles because, due to vertical integration and exclusive distribution between manufacturers\nand wholesalers of motor vehicles, there is no competition to be affected at the wholesale trade level.\n10.277 Our analysis with respect to the Article II claim on how the import duty exemption affects\nwholesale trade services of motor vehicles, within the meaning of Article I of the GATS, also applies\nto this claim under Article XVII of the GATS (see above, paragraphs 10.239-10.246).\n(a) Whether Canada has undertaken commitments on wholesale trade services of motor\nvehicles\n10.278 Japan argues that Canada's Schedule of Specific Commitments includes wholesale trade of\nmotor vehicles either under the general entry \"B. Wholesale trade services\" or under the more specific\nentry \"Sale of motor vehicles including autom obiles and other road vehicles\", United Nations\nProvisional Central Product Classification (CPC) number 6111. Japan also points out that under\n\"B. Wholesale trade services\", Canada lists a limitation for the state of Saskatchewan applying to \"sale\nof motor vehicles\". According to Japan, by inse rting this limitation Canada is implying that its\ncommitments on wholesale trade services also include wholesale services for motor vehicles. Canada\nresponds that its entry \"B. Wholesale trade services\" expressly refers to CPC 622, which excludes\ndistribution of motor vehicles and that the insertion of a limitation with respect to motor vehicles is a\nscheduling error. It also points out that CPC entry \"6111\" is inscribed under the heading \"C. Retail\nservices\" and therefore should be read as a commitment only on retail services for motor vehicles.\n10.279 We note that the CPC entry 622 (Wholesale trade services) does not have a sub-heading for\nmotor vehicles, and that sub-heading 62282 (Wholesale trade services of transport equipment other\nthan motor vehicles, motorcycles and bicycles) expressly excludes motor vehicles. In our view, the\nfact that Canada has inscribed a limitation applying to motor vehicles with respect to the entry\n\"Wholesale trade services (622)\" in its schedule does not in itself constitute sufficient evidence to\nconclude that it has undertaken a commitment on wholesale trade services of motor vehicles.\n10.280 Nevertheless, Canada has also listed in its schedule of commitments an entry for \"Sale of\nmotor vehicles including automobiles and other road vehicles\" with an explicit reference to CPC\nnumber 6111. In the United Nations Provisional Central Product Classification, the entry \"6111 Sale\nof motor vehicles including automobiles and othe r road vehicles\" includes two sub-headings: \"61111\n\nWholesale trade services of motor vehicles\"; and \"61112 Retail sales of motor vehicles\". In our view,\nif Canada had meant to limit this commitment only to retail services it should have inscribed entry\n61112 (Retail sales of motor vehicles) in its schedule rather than 6111 (Sale of motor vehicles).\n10.281 We note that there is a discrepancy between the inclusion of the whole CPC entry 6111 and\nthe heading of the commitment (\"C. Retailing services\") in page 48 of Canada's schedule. However,\nthe fact that entry 6111 has been listed under the heading C. Retailing services does not constitute\nsufficient evidence to exclude a commitment with respect to wholesale trade services of motor\nvehicles. If the heading were to prevail, the systemic impact would be that all unqualified CPC\nnumbers in Members' schedules of commitments, referring to clearly and precisely defined\nsubsectors, would be undermined, at least when their combination with headings is inconsistent. For\nthese reasons we consider that the description of the CPC should prevail and that the commitments\ncontained in page 48 of Canada's schedule also apply to wholesale trade of motor vehicles.\n10.282 We find therefore that, by inscribing the CPC entry \"6111 Sale of motor vehicles including\nautomobiles and other road vehicles\" in its schedule of specific commitments, Canada has undertaken\na commitment also covering \"61111 Wholesale trade services of motor vehicles\".\n(b) Whether services are \"like\"\n10.283 Japan contends that there are \"like\" Japanese and Canadian wholesale service suppliers of\nmotor vehicles, including automobiles as well as buses and specified commercial vehicles. Canada\ncontests the existence of like wholesale service suppliers. Japan points out that while some Canadian\nsuppliers have qualified for the import duty exemption under SROs (Intermeccanica and three\nmanufacturers of buses and specified commercial vehicles), Japanese suppliers cannot import vehicles\nduty-free, unless they acquire, or are acquired by, a Canadian subsidiary of one of the existing\nmanufacturer beneficiaries.\n10.284 Canada points out that Intermeccanica is \"unlike\" any Japanese wholesale service supplier of\nmotor vehicles because it is not a wholesaler but only a manufacturer and even if it were a wholesaler,\nits size, sales volumes and the products it manufactures are vastly different from those of any of the\nestablishments identified by Japan as suppliers of wholesale trade services of motor vehicles.\nAccording to Japan, the scale of companies and the nature of the products they supply should not\naffect the determination of likeness, insofar as se rvice suppliers supply services listed in the same\nCPC category. In this respect Japan argues that Intermeccanica is \"like\" other Japanese suppliers of\nwholesale trade services for motor vehicles in Canada.\n10.285 In our view, Intermeccanica, which manufactures and sells directly to consumers a small\nnumber of vehicles (artisanal replica racing cars) per year, should not be considered a supplier of\nwholesale trade services of motor vehicles, as it does not seem to be supplying \"wholesale trade\nservices of motor vehicles\" as defined in CPC 6111.\n10.286 With respect to wholesale trade services suppliers of buses and specified commercial\nvehicles, Canada argues that Japan has failed to id entify any Canadian or Japanese suppliers of these\nservices. Japan contests this allegation, arguing that there is at least one Japanese supplier operating\nin Canada (Hino Diesel Trucks) and that other Japanese wholesale trade service suppliers of motor\nvehicles have the capability to produce and distribute buses or specified commercial vehicles. Japan\nalso points out that in response to question 2(4) from Japan, Canada has listed 15 companies which\nhave imported and distributed vehicles other than automobiles under the MVTOs and SROs at least\nonce in the last 10 years. According to Japan, at least three of these companies are of Canadian origin\nin accordance with Article XXVIII(m) of the GATS.\n10.287 In response to a supplemental question from the Panel, Japan has produced supporting\nmaterial to demonstrate that three companies which were granted the import duty exemption under\n\nSROs, A. Girardin Inc., Michel Corbeil Inc., and Western Star Trucks Inc., are juridical persons of\nCanada according to Article XXVIII(m) of the GATS. In response to another supplemental question\nfrom the Panel, Canada has confirmed that, to its knowledge A. Girardin Inc. and Michel Corbeil Inc.\nare Canadian-owned companies. Regarding Western Star Trucks Inc., Canada has pointed out that it\nis wholly owned by another Canadian incorporated company (Western Star Trucks Holding Ltd.),\nwhich in turn is controlled by a Singaporean incorporated company (Western Star International).\n10.288 Canada, however, argues that Japan has failed to prove that the three Canadian companies,\nwhich have benefited from the import duty exemption, are suppliers of wholesale trade services.\nCanada points out that these companies may import buses or chassis for specified commercial\nvehicles as inputs for finished vehicles; they may re-import vehicles of their own manufacture that\nhave been exported for modification in other countries; or they may import vehicles as retailers.\nCanada points out, however, that none of these activities would constitute supply of wholesale trade\nservices, which consists principally in re-selling merchandise, according to the definition contained in\nSection 6 of the CPC.\n10.289 Regarding wholesale trade services of buses and specified commercial vehicles, we note that\nJapan has identified one Japanese service supplier and argued that Japanese wholesale suppliers of\nautomobiles could enter the market. We further note that the CPC entry \"6111 sale of motor vehicles\nincluding automobiles and other road vehicles\" also includes wholesale trade of buses and specified\ncommercial vehicles. In our view, however, there is no clear evidence before the Panel that the\nCanadian manufacturers of buses and specified commercial vehicles, which benefit from the import\nduty exemption, also supply wholesale trade servi ces of motor vehicles as defined in the CPC.\nCanada has contested that these companies are \"like\" suppliers of wholesale trade services for motor\nvehicles and Japan, with whom the burden of proof rests, has not produced evidence to demonstrate\nthe contrary. We note that, in the absence of \"like\" domestic service suppliers, a measure by a\nMember cannot be found to be inconsistent with the national treatment obligation in Article XVII of\nthe GATS.\n10.290 Accordingly, we find that Japan has failed to demonstrate that the import duty exemption\naccorded pursuant to the MVTO 1998 and the SROs constitutes treatment less favourable accorded to\nJapanese service suppliers than that accorded to like Canadian service suppliers.\n6. Claims Under Article XVII of the GATS – CVA requirement\n10.291 The CVA requirements in the MVTO 1998 and in SROs require manufacturer beneficiaries to\nachieve a minimum of Canadian value-added, a part of which may be made up through the purchase\nof services supplied in Canada, as a condition for obtaining the import duty exemption. With respect\nto services, Canadian value-added means the part of the following costs that is reasonably attributable\nto the production of motor vehicles: (i) the cost of maintenance and repair work executed in Canada\non buildings, machinery and equipment used for pro duction purposes; (ii) the cost of engineering\nservices, experimental work and product development work executed in Canada; (iii) administrative\nand general expenses incurred in Canada. The European Communities notes that CVA also includes\n(iv) \"fire and insurance premiums, in respect of production inventories and the production plant and\nequipment, paid to a company authorised by federal or provincial law to carry on business in Canada\nor a province\".\n(a) CVA requirements as affecting services related to the production of motor vehicles\n10.292 The complainants argue that the CVA requirements provide an incentive for the beneficiaries\nof the import duty exemption to use services supplie d within the Canadian territory rather than like\nservices supplied in or from the territory of other Members, thus modifying the conditions of\ncompetition among them. Canada does not contest the claim that CVA requirements affect the supply\nof services.\n\n10.293 We note that the CVA requirements, in stipulating that only services supplied domestically\nmay count toward CVA, affect directly the services which are supplied through modes 1 and 2 . We\ntherefore need to determine whether such effect is consistent with Canada's commitments under\nArticle XVII.\n(b) Whether services affected by the CVA requi rements are covered by Canada's specific\ncommitments in services\n10.294 The complainants argue that all services affected by the CVA requirements are included in\nCanada's schedule of specific commitments, while none of the limitations inscribed cover the CVA\nrequirements. Canada points out that relevant national treatment limitations have been inscribed for\npotentially affected services listed by the complainants.\n10.295 In addition, the complainants argue that there are several services affected by the CVA\nrequirements which can be supplied though modes 1 and 2, where Canada has scheduled no\nlimitations and that, even in those sectors where limitations have been scheduled, such limitations do\nnot exempt Canada from its Article XVII obligations with respect to the CVA requirements. 906 They\npoint out that the CVA requirements are not listed as limitations in Canada's schedule of\ncommitments and that other limitations such as natio nality, residency or establishment requirements,\nwhich would impede the supply of a service cross-border, cannot be used to justify the CVA\nrequirements. For this purpose the complainants refer to the answer to question 7 in the Addendum 1\nto the Scheduling Guidelines ( Scheduling of Initial Commitments in Trade in Services: Explanatory\nNote - Addendum , MTN.GNS/W/164/Add.1).\n907 Canada responds that limitations which it had\nscheduled such as nationality, residency or establishment requirements make the supply of a service\nthrough modes 1 and 2 impossible, so that where these limitations exist, the CVA requirements cannot\nviolate Article XVII.\n10.296 We note that Canada has undertaken specific commitments in all the sectors listed by the\ncomplainants as being affected by the CVA requirements and that it has inscribed some partial\nlimitations on national treatment with respect to some of these sectors. In our view, however, even\nthe national treatment limitations which have been scheduled, however restrictive, cannot be deemed\n\n906 (1) With respect to the first CVA requirement, \"maintenance and repair work executed in Canada on\nbuildings, machinery and equipment used for production purposes,\" the complainants note that Canada has\nincluded the following services in its schedule of specific commitments: repair services incidental to metal\nproducts, machinery and equipment including computers and communication equipment on a fee or contract\nbasis (CPC 8861 to 8866) ; (2) with respect to the second CVA requirement, \"engineering services,\nexperimental work and product development work executed in Canada,\" the complainants note that Canada's\nhas included the following services in its schedule of specific commitments: engineering services (CPC 8672) ;\n(3) With respect to the third CVA requirement, \"administrative and general expenses incurred in Canada,\" the\ncomplainants note several services sectors included in Canada's schedule of specific commitments including:\nprofessional services, computer related services, other business services, banking services, telecommunication\nservices, courier services and travel services ; (4) With respect to the fourth CVA requirement, \"fire and\ninsurance premiums, in respect of production inventories and the production plant and equipment, paid to a\ncompany authorised by federal or provincial law to carry on business in Canada or a province\" the European\nCommunities notes that Canada has included the following services in its schedule of specific commitments:\nnon-life insurance services (CPC 8129).\n907 \" How relevant is a reservation for a residence requirement, nationality condition or commercial\npresence requirement under cross-border trade: does that not rather imply that cross-border trade is not\nallowed and therefore the correct entry should be 'unbound'?\"\n\"It is correct to use the term 'unbound' for a mode of supply in a given sector where a Member wishes\nto remain free to introduce or maintain measures in consistent with market access or national treatment.\nHowever, it has been pointed out by participants that in some cases there is advantage in inscribing a particular\nlimitation (e.g., a residency requirement or a commercial presence requirement) instead of the term 'unbound' in\nthat trading partners have the certainty that there are no other limitations with respect to the cross-border mode.\n(See also para. 8 of the scheduling guide on residency requirements, and para. 6 on nationality requirements.)\"\n\nto also cover the CVA requirements. Only a specific limitation referring to the CVA requirements or\nan \"unbound\" entry would achieve this effect, as the inscription of another specific limitation (such\nas a residency requirement or a commercial presence requirement) would imply that there are no other\nlimitations than the one listed with respect to the cross-border mode.\n10.297 We find, therefore, that Canada has undertaken specific commitments in those sectors which\nthe complainants claim to be affected by the CVA requirements, and that the limitations that have\nbeen listed do not cover the CVA requirements.\n(c) Technical feasibility and inherent competitive disadvantage of modes 1 and 2 services\n10.298 Canada points out that with respect to the first CVA requirement relating to services,\n\"maintenance and repair work executed in Canada on buildings, machinery and equipment used for\nproduction purposes\", there can be no discrimination against services supplied through modes 1 and 2,\nas cross-border supply and consumption abroad of these services are not technically feasible. On\nhotel and other lodging services and food and beverages services, it argues that choices regarding\nthese services are dictated by geography and have nothing to do with the CVA requirements.\nAccording to Canada, the competitive disadvantage in the foreign provision of many services listed by\nthe complainants as being affected by the CVA requ irements is inherent in the foreign character of\nthese services and, as stated in footnote 10 to Article XVII, should not be regarded as a national\ntreatment restriction.\n10.299 The complainants argue that even if inherent disadvantages due to foreign character existed\nfor some modes 1 and 2 services, the disadvantages caused by the CVA could not be considered\ninherent. They point out that Canada's argument that modes 1 and 2 services relating to the\nproduction of motor vehicles are already inherently disadvantaged due to their foreign character\ncontradicts the very aim of the CVA requirements, that is, to favour services supplied in Canada. In\naddition the complainants note that footnote 10 to Article XVII only exempts Members from having\nto compensate for inherent competitive disadvantages due to foreign character, while in this case\nCanada would only be required to abstain from taking a measure which creates a disadvantage for\nmodes 1 and 2 suppliers.\n908\n10.300 We consider that, although the supply of some repair and maintenance services on machinery\nand equipment through modes 1 and 2 might not be technically feasible, as they require the physical\npresence of the supplier, all other services listed by the complainants as being affected by the CVA\nrequirements, including some consulting and advisory services relating to repair and maintenance of\nmachinery, can be supplied through modes 1 and 2. We further consider that treatment less\nfavourable granted to services supplied outside Canada cannot be justified on the basis of inherent\ndisadvantages due to their foreign character. Footnote 10 to Article XVII only exempts Members\nfrom having to compensate for disadvantages due to foreign character in the application of the\nnational treatment provision; it does not provide cover for actions which might modify the conditions\nof competition against services and service suppliers which are already disadvantaged due to their\nforeign character.\n10.301 We therefore find that lack of technical feasibility only excludes the supply of some repair\nand maintenance services on machinery and equipment through modes 1 and 2 from Canada's national\ntreatment obligation. We also find that any eventual inherent disadvantages due to the foreign\ncharacter of services supplied through modes 1 and 2 do not exempt Canada from its national\ntreatment obligation with respect to the CVA requirements.\n\n908 Footnote to Article XVII states: \"Specific commitments assumed under this Article shall not be\nconsidered to require any Member to compensate for any inherent competitive disadvantages which result from\nthe foreign character of the relevant services or service suppliers.\"\n\n(d) Whether it is relevant that CVA requirements might be met on the basis of labour costs\nalone\n10.302 Canada argues that, considering that (1) any possible effects of the CVA requirements\nimpinge only on services supplied through modes 1 and 2, (2) relevant limitations have been inscribed\nin the schedule for the services sectors at issue, (3) the supply of some services through modes 1 and 2\nis not technically feasible, and (4) no compensation is due for any inherent competitive disadvantage\nresulting from the foreign character of services; the complainants' national treatment claims should\nthus be limited to certain services that constitute \"general and administrative expenses\". According to\nCanada the inclusion of this last category of services in the list of CVA eligible expenses, however,\ndoes not affect the conditions of competition between Canadian and foreign service suppliers, as there\nis evidence that most of the qualifying manufacturers exceed their CVA requirement on the basis of\nlabour costs alone.\n10.303 The complainants note that the national treatment obligation in Article XVII of the GATS,\nlike that of Article II of the GATT, protects competitive opportunities, not actual trade flows. They\nnote that, if measures such as the CVA requirements create an incentive for using locally supplied\nservices, it is not necessary to show that they have any actual effect on trade flows. Therefore, even if\nthe CVA requirements were met by all manufacturer beneficiaries on the basis of labour costs alone,\nsuch measure would still constitute a violation of Article XVII, so long as there was discrimination in\nfavour of services supplied in Canada against like services supplied outside Canada. Moreover, the\ncomplainants point out that with respect to the Article XVII claim, Canada argues that most of the\nqualifying manufacturers exceed their CVA requirements on the basis of labour costs alone, thus\nadmitting implicitly that some manufacturers might not do so.\n10.304 We note that Article XVII requires each Member to accord to services and service suppliers\nof any other Member treatment no less favourable than it accords to its own like services and service\nsuppliers, and that it defines treatment less favourable as formally different or formally identical\ntreatment which modifies the conditions of competition in favour of domestic services and service\nsuppliers. In our view, the CVA requirements may affect the conditions of competition between\nservices supplied in Canada and services of other Members supplied from outside Canada through\nmodes 1 and 2, even where a manufacturer meets its CVA requirements on the basis of labour costs\nalone. In fact, CVA requirements constitute an incentive to purchase services supplied in Canada and\nsuch incentive will be effective unless the requirements for a given period of time have already been\nmet through labour costs. Moreover, even where for a given period of time it is clear that CVA\nrequirements are going to be met on the basis of labour costs alone, thus rendering redundant any\npossible incentive to purchase services supplied in Canada, there is no evidence that the CVA\nrequirements will also be met in the future on the basis of labour costs alone and that, consequently,\nthere will be no discriminatory effect on trade in services.\n10.305 We, therefore, find that the fact that most manufacturer beneficiaries currently exceed their\nCVA requirements on the basis of labour costs alone does not undermine the role of the CVA\nrequirements as a discriminatory incentive favouring services supplied in Canada against services\nsupplied from outside Canada through modes 1 and 2.\n(e) Whether treatment no less favourable is accorded\n10.306 The complainants argue that the phrases \"executed in Canada\" and \"incurred in Canada\"\nprevent the inclusion in the CVA requirements of all services supplied under modes 1 and 2. The\ncomplainants therefore claim that the CVA requirem ents constitute less favourable treatment granted\nto like services and service suppliers of other Members, in that they create an economic incentive for\nmanufacturer beneficiaries to purchase services supplied in Canada, thus modifying the conditions of\ncompetition in favour of services supplied in Ca nada compared to those of other Members supplied\n\nthrough modes 1 and 2 (from and in the territory of other Members). Canada points out that the\nsupply of services through modes 3 (\"commercial presence\") and 4 (\"presence of natural persons\") is\nunaffected by the CVA requirements as all mode 3 and 4 suppliers, Canadian and non-Canadian, can\nbenefit from the CVA requirements.\n10.307 We note that the CVA requirements in the MVTO 1998 and SROs do not discriminate\nbetween domestic and foreign services and service suppliers operating in Canada under modes 3 and\n4. This observation, however, does not suffice to conclude that the requirements of Article XVII are\nmet. In our view, it is reasonable to consider for the purposes of this case that services supplied in\nCanada through modes 3 and 4 and those supplied from the territory of other Members through modes\n1 and 2 are \"like\" services. In turn, this leads to the conclusion that the CVA requirements provide an\nincentive for the beneficiaries of the import duty exemption to use services supplied within the\nCanadian territory over \"like\" services supplied in or from the territory of other Members through\nmodes 1 and 2, thus modifying the conditions of competition in favour of services supplied within\nCanada. Although this requirement does not distinguish between services supplied by service\nsuppliers of Canada and those supplied by service suppliers of other Members present in Canada, it is\nbound to have a discriminatory effect against services supplied through modes 1 and 2, which are\nservices of other Members.\n10.308 In light of the foregoing, we find that the CVA requirements on manufacturer beneficiaries\ncontained in the MVTO 1998 and the SROs accord less favourable treatment to services of other\nMembers supplied though modes 1 and 2 and are therefore inconsistent with Canada's obligations\nunder Article XVII of the GATS.\nXI. CONCLUSIONS AND RECOMMENDATIONS\nA. C\nONCLUSIONS\n11.1 In light of the above findings, we conclude as follows:\n(a) Canada acts inconsistently with Article I:1 of the GATT 1994 by according the\nadvantage of an import duty exemption to motor vehicles originating in certain\ncountries, pursuant to the MVTO 1998 and the SROs, which advantage is not\naccorded immediately and unconditionally to like products originating in the\nterritories of all other WTO Members;\n(b) the inconsistency of these measures with Article I:1 of the GATT 1994 cannot be\njustified under Article XXIV of the GATT 1994;\n(c) Canada acts inconsistently with Article III:4 of the GATT 1994 by according less\nfavourable treatment to imported parts, materials and non-permanent equipment than\nto like domestic products with respect to their internal sale or use, as a result of\napplication of the CVA requirements as one of the conditions determining eligibility\nfor the import duty exemption on motor vehicles under the MVTO 1998, the SROs\nand as a result of conditions concerning CVA requirements contained in certain\nLetters of Undertaking;\n(d) the European Communities has failed to demonstrate that Canada acts inconsistently\nwith Article III:4 of the GATT 1994 by applying ratio requirements under the\nMVTO 1998 and the SROs as one of the conditions determining eligibility for the\nimport duty exemption on motor vehicles;\n\n(e) Canada acts inconsistently with its obligations under Article 3.1(a) of the\nSCM Agreement by granting a subsidy which is contingent in law upon export\nperformance, as a result of the application of the ratio requirements as one of the\nconditions determining eligibility for the import duty exemption on motor vehicles\nunder the MVTO 1998 and the SROs;\n(f) The European Communities and Japan have failed to demonstrate that Canada acts\ninconsistently with its obligations under Article 3.1(b) of the SCM Agreements by\ngranting a subsidy which is contingent upon the use of domestic over imported goods,\nas a result of the application of the CVA requirements as one of the conditions\ndetermining eligibility for the import duty exemption on motor vehicles under the\nMVTO 1998 and the SROs;\n(g) Canada acts inconsistently with Article II of the GATS by failing to accord\nimmediately and unconditionally to services and service suppliers of any other\nMember treatment no less favourable than that it accords to like services and service\nsuppliers of any other country, with respect to the granting of the import duty\nexemption to a limited number of manufacturers/wholesalers of motor vehicles\npursuant to the MVTO 1998 and the SROs;\n(h) the inconsistency of these measures with Article II of the GATS cannot be justified\nunder Article V of the GATS;\n(i) Japan has failed to demonstrate that the import duty exemption granted pursuant to\nthe MVTO 1998 and the SROs constitutes treatment less favourable accorded to\nJapanese suppliers of wholesale trade services of motor vehicles than that accorded to\nlike Canadian service suppliers, within the meaning of Article XVII of the GATS;\nand\n(j) Canada acts inconsistently with Article XVII of the GATS by according treatment\nless favourable to services and service suppliers of other Members, supplied through\nmodes 1 and 2, than it accords to its own like services and service suppliers, as a\nresult of the application of the CVA requirements as one of the conditions\ndetermining eligibility for the import duty exemption on motor vehicles under the\nMVTO 1998 and the SROs.\n11.2 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed\nunder a covered agreement, the action is considered prima facie to constitute a case of nullification or\nimpairment of benefits under that agreement. Accordingly, we conclude that to the extent that Canada\nhas acted inconsistently with the provisions of the covered agreements, as described in the preceding\nparagraph, it has nullified or impaired benefits accruing to the complainants under those agreements.\nB. R\nECOMMENDATIONS\n11.3 With respect to our conclusions regarding Canada's obligations under Articles I:1 and III:4 of\nthe GATT 1994, and Articles II and XVII of the GATS, the Panel recommends that the Dispute\nSettlement Body request Canada to bring its measures into conformity with its obligations under the\nWTO Agreement.\n11.4 With respect to our conclusions regarding Canada's obligations under the SCM Agreement,\nwe note that Article 4.7 of the SCM Agreement provides:\n\"If the measure in question is found to be a prohibited subsidy, the panel shall recommend\nthat the subsidising Member withdraw the subsid y without delay. In this regard, the panel\n\nshall specify in its recommendation the time-period within which the measure must be\nwithdrawn.\"\n11.5 Accordingly, we recommend that the Dispute Settlement Body request Canada to withdraw\nthe export subsidy without delay.\n11.6 With respect to the time-period within which the measure must be withdrawn, Article 4.7 of\nthe SCM Agreement requires a Member to withdraw the prohibited subsidy \"without delay\" and it is\n\"in this regard\" that a panel must specify a time-period within which the prohibited subsidy must be\nwithdrawn. The noun \"delay\" has been defined to mean, inter alia, \"the action or process of delaying;\nprocrastination; lingering; putting off\", while the verb to \"delay\" has been defined, inter alia, as to\n\"put off to a later time; postpone, defer\".909 Thus, in its ordinary meaning, the phrase \"without delay\"\nsuggests that the Member must not put off, postpone or defer action, but must rather act as quickly as\npossible to withdraw the prohibited subsidy. T hus, in examining what time-period would represent\nwithdrawal \"without delay\" in a particular case, we consider that we may take into account the nature\nof the steps necessary to withdraw the prohibited subsidy. We do not, however, agree with Canada\nthat we should take into account the existence or absence of adverse or trade-distorting effects\nresulting from the prohibited subsidy, nor the time required to design replacement measures, as these\nfactors are not related to the consideration of wh at time-period would repres ent withdrawal \"without\ndelay\".\n11.7 Applying these principles to the case at hand, we note that the MVTO 1998 and the SROs are\nboth Orders-in-Council, and as such are acts of the executive, and not the legislative, branch of\ngovernment. The amendment or revocation of an act of the executive branch can normally be\neffectuated more quickly than would be the case if legislative action were required. In light of the\nforegoing and of the information before the Panel, we consider that a time-period of 90 days would be\nappropriate.\n910 We therefore recommend that the Dispute Settlement Body request Canada to\nwithdraw the export subsidy within 90 days."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.256504"}}},{"rowIdx":1687,"cells":{"folder_number":{"kind":"string","value":"142"},"case_number":{"kind":"string","value":"142"},"original_filename":{"kind":"string","value":"DS142_SEQ05_Arbitration_Award.pdf"},"new_filename":{"kind":"string","value":"DS142_SEQ05_Arbitration_Award.pdf"},"doc_sequence":{"kind":"number","value":5,"string":"5"},"doc_type":{"kind":"string","value":"Arbitration_Award"},"doc_type_raw":{"kind":"string","value":"Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes Award of the Arbitrator Julio Lacarte-Muró"},"doc_class":{"kind":"string","value":"ARBITRATION"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY"},"date":{"kind":"string","value":"4 October 2000"},"header_codes":{"kind":"string","value":"WT/DS139/12; WT/DS142/12"},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['EU']"},"respondent":{"kind":"string","value":"['Canada']"},"third_parties":{"kind":"string","value":"['India', 'South Korea', 'U.S.']"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European\n Communities.\nOn 3 July 1998, Japan requested consultations\n with Canada in respect of measures being taken by Canada in the automotive\n industry. Japan contended that under Canadian legislation implementing an\n automotive products agreement (Auto Pact) between the US and Canada, only\n a limited number of motor vehicle manufacturers are eligible to import\n vehicles into Canada duty free and to distribute the motor vehicles in\n Canada at the wholesale and retail distribution levels. Japan further\n contended that this duty-free treatment is contingent on two requirements:\nOn 17 August 1998, the EC requested\n consultations with Canada in respect of the same measures raised by Japan\n in WT/DS139 and cites the same provisions alleged to be in violation,\n except for Article XXIV of GATT 1994, which was cited by Japan but is not\n cited by the EC.\nOn 12 November 1998, Japan requested the\n establishment of a panel in respect of WT/DS139. At its meeting on 25\n November 1998, the DSB deferred the establishment of a panel.\n\nPanel and Appellate Body proceedings\nFurther to\n requests to establish a panel by Japan and the EC, at its meeting on 1\n February 1999, the DSB established a single panel, pursuant to Article 9.1\n of the DSU, to examine the complaints WT/DS139 and WT/DS142. India, Korea,\n and the US reserved their third-party rights. On 15 March 1999, the EC and\n Japan requested the Director-General to determine the composition of the\n Panel. On 25 March 1999, the Panel was composed. The report of the panel\n was circulated to Members on 11 February 2000. The panel found that:\nOn 2 March 2000, Canada notified its intention\n to appeal certain issues of law and legal interpretations developed by the\n panel. The Appellate Body report was circulated to Members on 31 May 2000.\n The Appellate Body:\nThe DSB adopted the Appellate Body report and\n the Panel report, as modified by the Appellate Body report, on 19 June\n 2000.\n\nImplementation of Adopted Reports\nPursuant to Article 21.3 of the DSU, Canada\n informed the DSB on 19 July 2000 that it would comply with the\n recommendations of the DSB. One of the recommendations made by the DSB\n was that Canada withdraw within 90 days the export subsidy found to be\n inconsistent with Article 3.1(a) of the Subsidies Agreement. On 4 August\n 2000, Japan and the European Communities requested, pursuant to Article\n 21.3(c) of the DSU, that the reasonable period of time be determined by\n arbitration. The arbitrator determined that the “reasonable period of\n time” was 8 months from the date of adoption of the Appellate Body and\n Panel Reports, as modified by the Appellate Body Report. The\n “reasonable period of time” was thus to expire on 19 February 2001.\n At the DSB meeting of 12 March 2001, Canada stated that, as of 18\n February 2001, it had complied with the DSB’s recommendations."},"page_count":{"kind":"number","value":18,"string":"18"},"clean_text":{"kind":"string","value":"CANADA – CERTAIN MEASURES AFFECTING THE\nAUTOMOTIVE INDUSTRY\nArbitration\nunder Article 21.3(c) of the\nUnderstanding on Rules and Procedures\nGoverning the Settlement of Disputes\nAward of the Arbitrator\nJulio Lacarte-Muró\n\nWT/DS/142/12\n\nI. Introduction\n1. On 19 June 2000, the Dispute Settlement Body (the \"DSB\") adopted the Appellate Body\nReport\n1, and the Panel Report\n2 as modified by the Appellate Body Report, in (\"Canada – Automotive Industry \"). On 19 July 2000,\nCanada informed the DSB, pursuant to Article 21.3 of the Understanding on Rules and Procedures\nGoverning the Settlement of Disputes (the \"DSU\"), that it would implement the recommendations and\nrulings of the DSB in this dispute.\n3 At the DSB meeting of 27 July 2000, Canada said that it would\nrequire a \"reasonable period of time\" to do so, under the terms of Article 21.3 of the DSU, with regard\nto certain aspects of the measures at issue in the dispute, in particular, the DSB's recommendations\npursuant to Article I:1 and Article III:4 of the General Agreement on Tariffs and Trade 1994\n(\"GATT 1994\") and Article XVII of the General Agreement on Trade in Services (\"GATS\").\n\n4\n2. In view of the impossibility to reach an agreement with Canada on the period of time required\nfor the implementation of those recommendations and rulings, the European Communities and Japan\nrequested that such period be determined by binding arbitration pursuant to Article 21.3(c) of the\nDSU.\n\n5\n3. By joint letter of 23 August 2000, Canada, the European Communities and Japan notified the\nDSB that they had agreed that the duration of the \"reasonable period of time\" for implementation\nshould be determined through binding arbitration, under the terms of Article 21.3(c) of the DSU, and\nthat I should act as Arbitrator. The parties also indicated in that letter that they had agreed to extend\nthe time period for the arbitration, fixed at 90 days by Article 21.3(c) of the DSU, until\n6 October 2000. Notwithstanding this extension of the time period, the parties stated that the\narbitration award would be deemed to be an award made under Article 21.3(c) of the DSU. My\nacceptance of this designation as Arbitrator was conveyed to the parties by letter of 24 August 2000.\n4. Written submissions were received from Canada, the European Communities and Japan on\n31 August 2000, and an oral hearing was held on 14 September 2000.\n\n1WT/DS139/AB/R, WT/DS142/AB/R.\n2WT/DS139/R, WT/DS142/R.\n3Communication from Canada, WT/DS139/9, WT/DS142/9, 19 July 2000.\n4DSB Meeting of 27 July 2000, WT/DSB/M/86, para. 40. With respect to the findings under\nArticle 3.1(a) of the Agreement on Subsidies and Countervailing Measures, the DSB recommended that Canada\nwithdraw the export subsidy within 90 days. Accordingly, these findings are not at issue in this arbitration\nunder Article 21.3(c) of the DSU.\n5WT/DS139/10, WT/DS142/10, 8 August 2000.\n\nII. Arguments of the Parties\nA. Canada\n5. Canada submits that the \"reasonable period of time\" needed for full compliance with the\nrecommendations and rulings of the DSB relating to the Canadian value-added requirements (the\n\"CVA requirements\") and the duty exemption is \"11 months, 12 days\", that is, until 1 May 2001. In\nits written submission, Canada proposes to implement these recommendations and rulings through the\nrepeal or amendment of the Motor Vehicles Tariff Order, 1998 (the \"MVTO 1998\")\n\n6 and the Special\nRemission Orders (the \"SROs\")\n7 promulgated by the Government of Canada.\n6. Canada noted that it was on schedule to withdraw the export subsidy component of the\nmeasures, namely the production-to-sales ratio requirements, by 17 September 2000, as recommended\nby the DSB. However, to do so, Canada \"drastically foreshortened\" its normal law-making process.\nCanada's ability to withdraw the export subsidy component so quickly has no bearing on the\n\"reasonable period of time\" for implementing recommendations and rulings of the DSB relating to the\nCVA requirements and the duty exemption.\n7. Canada argues that for these aspects of the measures at issue, the normal rules for determining\na \"reasonable period of time\" under Article 21.3(c) arbitrations apply. According to Canada, past\nArbitrators have recognized the sovereign prerogative of Members to determine the most appropriate\nand effective method of implementing the recommendations and rulings of the DSB, including the\nchoice and timing of the steps necessary to do so. Canada states that the \"reasonable period of time\"\nwhich it has proposed is based on this rule.\n8. Canada notes that it will implement the recommendations and rulings through administrative\nmeasures, and explains the regulation-making process in Canada as follows.\n9. In Canada's legal system, the basic process to be followed for the making of regulations is\nprescribed by the Statutory Instruments Act and the Government of Canada Regulatory Policy\n(the \"Regulatory Policy\"). The Regulatory Policy imposes a succession of steps on authorities\n\n6The MVTO 1998 is a regulation promulgated by the Governor-General-in-Council, on the\nrecommendation of the Minister of Finance, under the authority of the Customs Tariff, S.C. 1997, c. 36,\nsubsections 14(2) and 16. See Panel Report, Canada – Automotive Industry , WT/DS139/R, WT/DS142/R,\nadopted 19 June 2000, as modified by the Appellate Body Report, footnote 24.\n7The SROs are regulations promulgated by the Governor-General-in-Council, on the recommendation\nof the Minister of Finance and the Minister of Industry, under the authority of the Financial Administration Act,\nR.S.C. 1985, c. F-11, s. 23. Ibid., footnote 25.\n\nsponsoring regulations, as well as obligations of transparency and consultation. Canada explains that\nthe length of time required for each of the steps in the regulatory process depends on both the nature\nand the consequences of the proposed regulation. The Federal Regulatory Process Guide (the\n\"Process Guide\") elaborates the process for obtaining approval for Governor-in-Council regulations.\n10. Once the Canadian government has identified a problem, it is required to consult with all\nconcerned stakeholders in order to determine the key elements of the issue, identify the best course of\naction for remedying the situation, and allow Canadians an opportunity to participate in developing or\nmodifying regulations and regulatory programs. Consultation occurs prior to the drafting of the\nregulations and following \"pre-publication\" of the draft regulations.\n11. In the normal course of events, the department with responsibility for the area in which the\nproblem has arisen (in this case, Canada's Department of Finance) will include information about the\nproblem in its Report on Plans and Priorities, a document which is tabled in Parliament. Where this is\nnot possible, in order to ensure that the public is involved in isolating and defining the problem and\nselecting a solution, the department may use other forms of early notice. For example, the department\nmay publish a \"Notice of Intent\" seeking public advice and comment.\n12. The responsible department is then required to draft a proposed regulation. It must also\nprepare a Regulatory Impact Analysis Statement (\"RIAS\"), which describes the purpose of the draft\nregulation, the alternatives considered, a benefit-cost analysis, the results of consultations with\ninterested parties, the department's response to the concerns raised, and how the regulation will be\nenforced. The RIAS is to be drafted both to provide concise information for decision-makers, and to\ngive the public the information it needs to evaluate and comment upon a regulatory proposal.\n13. Once the proposed regulation and supporting documentation, including the RIAS, have been\nprepared in both of Canada's official languages and approved by the responsible department's legal\nservices and senior management, they must be sent to three central agencies. The Department of\nJustice must examine the regulation to ensure that it has a proper legal basis and is not inconsistent\nwith the Canadian Charter of Rights and Freedoms or the Canadian Bill of Rights . The Clerk of\nthe Privy Council Office (\"PCO\") must ensure that th e proposal is consistent with the government's\noverall program, and that the responsible department has adequately considered the communications\naspects of the proposed regulatory action. The Regulatory Affairs and Orders-in-Council Secretariat\nof the PCO must review the proposal in order to ensure that it is consistent with the Regulatory Policy\nand, in particular, that: the responsible department has considered alternatives; the benefits of the\nregulation or amendments clearly outweigh the costs; adequate consultation with the public has taken\nplace; and the responsible department has cooperated with Canada's provincial governments.\n\n14. Once the foregoing reviews have been completed, the Minister of the responsible department\napproves the regulation and supporting documentation and submits them to the PCO for consideration\nby the Cabinet's Special Committee of Council (\"SCC\"). The SCC is the Cabinet committee that\ngives Governor-in-Council approval for the pre-publication of a draft regulation and its accompanying\nRIAS.\n15. The Regulatory Policy requires pre-publication of a regulation in order to provide the\nCanadian public at large with an opportunity to comment. Upon approval by the SCC ministers, the\nregulation and its RIAS are pre-published in the Canada Gazette, Part I, and are open for public\ncomment for a minimum period of 30 days. This period will vary from case-to-case depending on the\nimpact of the proposed regulatory changes and the extent of the consultation that occurred prior to\ndrafting. Comments received from the public must be weighed on their merits and changes to the\nproposed regulation must be considered. If the proposed regulation is changed, the Department of\nJustice must again examine and approve the revised version before it is sent to the SCC for final\napproval by the ministers. If the proposed regulation is amended, its RIAS must also be changed to\nreflect the amendment.\n16. If the ministers approve the regulation, it is registered under a statutory orders and regulations\nnumber within seven days. The regulation will come into force on a date specified or, where not so\nspecified, on the day of registration.\n17. The approved regulation and its RIAS are then forwarded for publication in the\nCanada Gazette, Part II. Pursuant to subsection 11(1) of the Statutory Instruments Act, publication\nmust take place no later than 23 days after registration. Once published, the regulation becomes\nenforceable as law, since the public is deemed to have notice of the change in the regulatory regime.\n18. Canada presents a chart in which it estimates the time needed for each stage of the\nimplementation process. Canada submits the following estimated periods. First, Canada estimates\n150 days for the \"Pre-Drafting\" process, including identification and assessment of the problem and\npublication of a Notice of Intent in the Canada Gazette. Then, Canada estimates 178 days for the\n\"Drafting/Approval Process\", which includes the following time periods: 60 days for drafting\nthe proposed regulation and completing the RIAS, submission to central agencies, submission to PCO\nfor SCC approval, and SCC decision, followed by pre-publication in the Canada Gazette; 30 days\nfor receipt of questions and comments from the public; 30 days for a response to the public questions\nand comments; 30 days for the amendment of the regulation and the RIAS as required; 14 days for\nsubmission to PCO for SCC final approval; 7 days for SCC final approval and signature of the\nGovernor General; and 7 days for registration of the regulations.\n\n19. In addition, Canada submits that two other factors are relevant in determining the \"reasonable\nperiod of time\" in this dispute. First, the el imination of the customs duty exemption for motor\nvehicles has significant implications for the administration of Canada's customs regime. The\nGovernment of Canada is currently undertaking a major re-engineering of customs operations to\ndevelop enhanced processes available to all impor ters. A new customs system, known as \"Customs\nSelf-Assessment\", or \"CSA\", will streamline the import process. Because qualifying manufacturers\nunder the Agreement Concerning Automotive Products Between the Government of Canada and the\nGovernment of the United States of America (the \"Auto Pact\")\n\n8, are the largest users of Canada's\ncustoms system, Canada's measures to comply w ith the recommendations and rulings of the DSB in\nthis dispute must fully address the planned CSA system. In making the changes necessary to comply\nwith the recommendations of the DSB, the Government of Canada has a responsibility to find ways to\navoid administrative delays and other trade disruptions resulting from a change in tariff regimes and\nto ensure the earliest transition to the new CSA sy stem. At the oral hearing, Canada cited previous\narbitration awards as establishing a preference for full and effective implementation\n\n9, and as allowing\na period for transition to replacement measures as part of the \"reasonable period of time\".\n10\n20. Second, Canada argues that its treaty obligations under the Auto Pact must be taken into\naccount in determining the \"reasonable period of time\". Under the Auto Pact, Canada is required to\naccord duty-free treatment to motor vehicles from the United States, if they are imported by\nmanufacturers that meet certain conditions. Since Canada will have to eliminate this duty-free\ntreatment in order to comply with the recommendations of the DSB, Canada will have to strike a\nbalance between its co-existing international obligations. To achieve this balance, Canada considers\nthat it will need to consult with the United States. During the oral hearing, Canada clarified that it is\nnot seeking to extend the \"reasonable period of time\" because of such consultations, as it believes that\nsuch consultations can be carried out simultane ously with the regulatory reform needed for\nimplementation.\n\n8See 4 International Legal Materials 302.\n9Canada's Oral Statement, para. 23 (citing Award of the Arbitrator under Article 21.3(c) of the DSU,\nChile – Taxes on Alcoholic Beverages (\" Chile – Alcoholic Beverages \"), WT/DS87/15, WT/DS110/14,\n23 May 2000).\n10Canada's Oral Statement, para. 26 (citing Award of the Arbitrator under Article 21.3(c) of the DSU,\nEuropean Communities – Regime for the Importation, Sale and Distribution of Bananas , WT/DS27/15, 7\nJanuary 1998; Award of the Arbitrator under Article 21.3(c) of the DSU, Australia – Measures Affecting\nImportation of Salmon (\"Australia – Salmon\"), WT/DS18/9, 23 February 1999).\n\nB. European Communities\n21. The European Communities notes that the DSB's recommendations gave Canada 90 days to\nwithdraw the export subsidy component of the measures found to be inconsistent with Canada's WTO\nobligations. With regard to the aspects of the measures that were found to be inconsistent with\nArticle I:1 and Article III:4 of the GATT 1994 and Article XVII of the GATS, Canada's obligation\nwas to brings its measures into conformity with its obligations under these provisions. The European\nCommunities notes that Canada indicated that it would require a \"reasonable period of time\" for\nimplementation of these aspects of the measures under Article 21.3(c), as Canada considered that it\nwould be \"impracticable\" to comply with the recommendation \"immediately\".\n22. The European Communities submits that the 15 month period mentioned in Article 21.3(c)\nfor the \"reasonable period of time\" is a \"guideline\" for the arbitrator, not an \"average\" or \"usual\"\nperiod. The European Communities argues that past arbitrations make clear that the \"reasonable\nperiod of time\" should be the shortest period of time possible within the legal system of the Member\nto implement the recommendations and rulings of the DSB. Article 21.3(c) refers to the notion of\n\"particular circumstances\" that can influence the \"reasonable period of time\". The \"particular\ncircumstances\" of each case determine the length of this period.\n23. Examining the \"particular circumstances\" of this dispute, the European Communities\nconsiders that a period of three months from the adoption of the Panel and Appellate Body reports,\nthat is, until 17 September 2000, is a \"reasonable period of time\" for implementation. The European\nCommunities' assessment is based on the following \"particular circumstances\".\n24. The European Communities first notes that the MVTO 1998 and the SROs are not legislative\nacts, but regulations in the form of Orders in Council, which can, therefore, be amended or repealed\nby means of another Order in Council. The European Communities further argues that most of the\nsteps in Canada's regulation making process are not subject to any deadlines, either mandatory or\nindicative. As a result, there is a large measure of discretion for the Canadian administrative\nauthorities to act promptly if they wish to do so.\n25. Next, the European Communities submits that the \"problem\" requiring the adoption of a\nregulation has already been clearly identified by the DSB's recommendations, and the Government of\nCanada has stated that it has consulted with \"stakeholders\" throughout the WTO dispute process, so\ntheir views are well-known. The European Communities also states that the implementing options are\nlimited since Canada has no choice but to repeal the MVTO 1998 and the SROs, and the drafting of\n\nsuch a regulatory change is a simple task. Moreover, given that repeal is the only option, comments\nfrom the public cannot result in much alteration of the proposed regulatory text.\n26. The European Communities raises two examples of regulatory amendments that were\naccomplished in only three months, as evidence that Canada could bring the measures at issue into\nconformity within this time-period. First, Canada will withdraw the export subsidy component of the\nmeasures at issue within three months. Second, in another WTO dispute, Canada accomplished a\nregulatory change within three months as well.\n27. At the oral hearing, the European Communities challenged Canada's reliance on the reform of\nits customs regime, as well as its reliance upon the need to consult with the United States regarding\nthe Auto Pact, as factors relevant to the determination of a \"reasonable period of time\" for\nimplementation. In the view of the European Communities, Canada has provided no evidence in\nsupport of its assertions that massive and costly changes to its system will be necessary, that no\nalternative solutions can be put in place until the new customs system has begun operation, or that\nneither the \"Big Three\"\n\n11 nor the Canada customs regime can quickly shift to the procedures used for\nimportation under the NAFTA. As regards the alleged need for consultations with the United States\nregarding the Auto Pact, the European Communities notes that Canada does not argue that it needs to\namend or terminate the Auto Pact in order to implement the DSB's recommendations and rulings.\nFurthermore, since the Marrakesh Agreement Establishing the World Trade Organization (\"WTO\nAgreement\") is a subsequent treaty to the Auto Pact, the rule set out in Article 30.3 of the Vienna\nConvention on the Law of Treaties\n\n12 means that the Auto Pact continues to apply between the United\nStates and Canada only to the extent that it is still \"compatible\" with the provisions of the WTO\nAgreement.\nC. Japan\n28. Japan believes that Canada should take all necessary steps to implement all of the\nrecommendations of the DSB within 90 days of the date of the adoption of the Panel and Appellate\nBody reports.\n29. Japan notes that Canada has accepted that the measures found to be inconsistent with the\nAgreement on Subsidies and Countervailing Measures (\" SCM Agreement \") will be brought into\nconformity within such a 90-day period, and emphasizes that all measures addressed by the Panel and\n\n11DaimlerChrysler Canada Inc., Ford Motor Company of Canada Limited and General Motors of\nCanada Limited.\n12Done at Vienna, 23 May 1969, 1155 U.N.T.S. 33; 8 International Legal Materials 679.\n\nthe Appellate Body are administrative rather than legislative measures. For these reasons, Japan\nconsiders that all DSB recommendations and rulings should be implemented \"immediately\" by\nCanada, unless Canada can demonstrate that immediate implementation is impracticable. In Japan's\nview, the reference to \"prompt compliance\" in Ar ticle 21.1 of the DSU and previous arbitration\nawards establish that an implementing Member bears the burden of proving that immediate\ncompliance is impracticable, and that the \"reasonab le period of time\" it proposes for implementation\nis appropriate.\n30. Japan recalls that a \"reasonable period of time\" is the shortest period of time required to\namend the relevant laws and provisions in order to implement DSB recommendations and rulings. In\ndetermining a \"reasonable period of time\" relevant factors include whether implementation will occur\nby administrative or legislative means, the \"complexity\" of the measures required for implementation,\nand the extent to which specific procedures, such as opportunity for public comments, are legally\nrequired as part of the process for introducing implementing measures. In contrast, Japan argues that\nother factors, such as the domestic, social and economic impact of implementing measures, and any\nnecessary structural adjustment, are irrelevant to the determination of a \"reasonable period of time\".\n31. In this case, Japan stresses the \"inseparable nature\" of the measures at issue. The import duty\nexemption is granted only when qualifying manufacturers satisfy both the CVA requirements and the\nratio requirements. The two requirements and the duty exemption are properly regarded as\ninseparable elements of one system, all of which should be simultaneously brought into conformity\nwith the WTO Agreement in order to comply with the DSB's recommendations and rulings. Japan\nconsiders that the two-stage implementation proposed by Canada would effectively remove a\nquantitative limit on the number of motor vehicles imported duty-free, thereby allowing qualifying\ncompanies to benefit from the tariff exemption as long as they satisfy the CVA requirements, and\neffectively leading to an \"aggravation\" of Canada's violation of the WTO Agreement for as long as\nthe remaining measures remain in force. Japan concludes that, in order for Canada to comply with the\nrecommendations and rulings of the DSB, Canada mu st repeal both the ratio requirements and the\nCVA requirements simultaneously, within 90 days of the adoption of the Panel and Appellate Body\nreports.\n32. At the oral hearing, Japan expressed \"strong reservations\" concerning the need for\nconsultations prior to the various steps of regulatory reform proposed by Canada, as well as the length\nof time that Canada allocates to each step in the process. Canada has consulted with interested parties\nthroughout these dispute settlement proceedings, and further consultations should not be necessary.\nJapan does not accept other Canadian estimates of the time needed for each step of the regulatory\n\nprocess, in particular since most of these steps have no legally binding duration, and the fact that\nCanada will simply repeal the MVTO 1998 and the SROs means that the drafting of regulations and\nimpact analysis statements should be easy.\n33. Japan rejects Canada's reliance on the proposed reform of its customs procedures and on the\nneed for consultations with corporations, such as the \"Big Three\", that may be affected by\nimplementation. For Japan, neither the administrative burden nor the effect of implementation on\nconcerned private corporations are relevant to the determination of a \"reasonable period of time\".\nIII. Reasonable Period of Time\n34. Canada has stated that it will comply with the recommendations and rulings of the DSB in\nCanada – Automotive Industry.\n\n13 There are two aspects to these recommendations and rulings. First,\nthe DSB recommended that Canada bring its meas ures found to be inconsistent with Canada's\nobligations under Article I:1 and Article III:4 of the GATT 1994 and Article XVII of the GATS into\nconformity with its obligations under those agreem ents. Second, with respect to the findings under\nArticle 3.1(a) of the SCM Agreement , the DSB recommended that Canada withdraw the export\nsubsidy within 90 days.\n35. Canada has taken steps to comply with the latter aspect of the DSB's recommendations, that\nis, that Canada withdraw the export subsidy within 90 days.\n\n14 Canada's actions relating to compliance\nwith this recommendation of the DSB are not at issue in this arbitration under Article 21.3(c) of the\nDSU.\n36. With respect to the DSB's recommendations relating to Article I:1 and Article III:4 of the\nGATT 1994 and Article XVII of the GATS, Canada has asserted that it is \"impracticable to comply\nimmediately with the recommendations and rulings\" and, therefore, Canada requests a \"reasonable\nperiod of time\" in which to implement the DSB's recommendations under Article 21.3 of the DSU.\n37. As the duration of the \"reasonable period of time\" in this case has not been agreed by the\nparties, they have requested that I determine this period of time through binding arbitration under\nArticle 21.3(c) of the DSU. Thus, the issue to be reso lved in this arbitration is the following: what is\nthe \"reasonable period of time\" for implementation of the recommendations and rulings of the DSB\n\n13Communication from Canada, WT/DS139/9, WT/DS142/9, 19 July 2000. Canada's submission,\npara. 5.\n14Canada's submission, para. 5.\n\nin Canada – Automotive Industry relating to Article I:1 and Article III:4 of the GATT 1994 and\nArticle XVII of the GATS?\n38. My mandate in this arbitration is governed by Article 21.3(c) of the DSU. Article 21.3(c)\nprovides that when the \"reasonable period of time\" is determined through arbitration:\n… a guideline for the arbitrator should be that the reasonable period of\ntime to implement panel or Appellate Body recommendations should\nnot exceed 15 months from the date of adoption of a panel or\nAppellate Body report. However, that time may be shorter or longer,\ndepending upon the particular circumstances.\n39. Thus, when the \"reasonable period of time\" is determined through arbitration, the guideline\nfor the arbitrator is that this period should not exceed 15 months from the date of adoption of the\npanel report and/or the Appellate Body report. This does not mean, however, that the arbitrator is\nobliged to grant 15 months in all cases. Article 21.3(c) makes clear that the \"reasonable period of\ntime\" may be shorter or longer, depending upon the \"particular circumstances\". The \"particular\ncircumstances\" of a dispute may influence the determ ination of what is a \"reasonable period of time\"\nfor implementation, as has been stated by previous Arbitrators.\n\n15\n40. The meaning of Article 21.3(c) is elucidated by its context. Paragraph 1 of Article 21\nprovides:\nPrompt compliance with recommendations or rulings of the DSB is\nessential in order to ensure effective resolution of disputes to the\nbenefit of all Members. (emphasis added)\n41. Thus, the DSU explicitly recognizes the importa nce of \"prompt\" compliance. In recognition\nof this principle, previous Arbitrators have established that the most important factor in establishing\nthe length of the \"reasonable period of time\" is the following:\n… it is clear that the reasonable period of time, as determined under\nArticle 21.3(c), should be the shortest period possible within the legal\nsystem of the Member to implement the recommendations and rulings\nof the DSB.\n\n16 (emphasis added)\n\n15See, e.g., Award of the Arbitrator under Article 21.3(c) of the DSU, Chile – Alcoholic Beverages ,\nsupra, footnote 9, paras. 39, 41-45; Award of the Arbitrator under Article 21.3(c) of the DSU, Canada – Patent\nProtection of Pharmaceutical Products (\"Canada – Pharmaceutical Patents\"), WT/DS114/13, 18 August 2000,\npara. 48.\n16Award of the Arbitrator under Article 21.3(c) of the DSU, EC Measures Concerning Meat and Meat\nProducts (Hormones), WT/DS26/15, WT/DS48/13, 29 May 1998, para. 26; quoted with approval in Award of\nthe Arbitrator under Article 21.3(c) of the DSU, Korea – Taxes on Alcoholic Beverages , WT/DS/75/16,\nWT/DS84/14, 4 June 1999, para. 37; and Award of the Arbitrator under Article 21.3(c) of the DSU, Australia –\nSalmon, supra, footnote 10, para. 38.\n\n42. I now turn to an examination of the arguments made by Canada, the European Communities\nand Japan in order to determine what would be a \"reasonable period of time\" in the \"particular\ncircumstances\" of this dispute.\n43. In its written submission, Canada requested \"11 months, 12 days\" from the adoption of the\nPanel and Appellate Body Reports on 19 June 2000 for implementation, which, according to Canada,\nis until 1 May 2001.\n\n17 I note that the period from 19 June 2000 to 1 May 2001 is actually 10 months\nand 12 days. However, since Canada has made reference to the date 1 May 2001 four times in its\nwritten submission and twice in its oral statement at the hearing, I consider that Canada's request is\nthat the \"reasonable period of time\" expire on 1 May 2001.\n\n18\n44. Canada has made arguments in its written submission and at the oral hearing in justification\nof the period it has proposed for the \"reasonable period of time\". First, Canada estimates 150 days for\nthe \"Pre-Drafting\" process, including identification and assessment of the problem and publication of\na Notice of Intent in the Canada Gazette . Then, Canada estimates 178 days for the\n\"Drafting/Approval Process\", which includes the foll owing time periods: 60 days for drafting the\nproposed regulation and completing the Regulatory Impact Analysis Statement (\"RIAS\"), submission\nto central agencies, submission to the Privy Council Office (\"PCO\") for Special Committee of\nCouncil (\"SCC\") approval, and the SCC decision, followed by pre-publication in the Canada\nGazette; 30 days for receipt of questions and comments from the public; 30 days for a response to\nthe public questions and comments; 30 days for the amendment of the regulation and the RIAS as\nrequired; 14 days for submission to PCO for SCC fi nal approval; 7 days for SCC final approval and\nsignature of the Governor General; and 7 days for registration of the regulations.\n\n19 Canada notes that\nthese estimates will result in implementation by mid-May 2001, but Canada expects to be able to\naccomplish some of these steps in less time, and, therefore, Canada considers that it can achieve\nimplementation by 1 May 2001.\n\n20\n45. In response, the European Communities and Japan argue that Canada needs only 90 days to\nimplement the DSB's recommendations, that is, until 17 September 2000. Both the European\nCommunities and Japan argue that Canada was able to implement the other recommendation of the\nDSB, that it withdraw the export subsidy, within 90 days, and that Canada has provided insufficient\n\n17Canada's submission, para. 9.\n18Ibid., paras. 7, 9, 45 and 70; Canada's oral statement, paras. 36 and 38.\n19Canada's submission, Annex.\n20Ibid., para. 45.\n\njustification as to why it cannot also implement the DSB's recommendations at issue here within\n90 days.\n46. In the present case, the parties agree that the measures at issue are certain regulations of the\nGovernment of Canada, namely the MVTO 1998 and the SROs. In the oral hearing, Canada stated\nthat \"in all likelihood\" it would implement the DSB's recommendations through the repeal of these\nregulations, and would also make consequential amendments to other regulations.\n\n21 I note that the\nspecific implementation steps proposed by Canada are required under the Statutory Instruments Act\n 22\nand/or prescribed in the Government of Canada Regulatory Policy (the \"Regulatory Policy\")\n23 and the\nFederal Regulatory Process Guide (the \"Process Guide\").\n24 I have taken both the steps required under\nthe Statutory Instruments Act and the steps (and any durations specified) under the Regulatory Policy\nand the Process Guide into account in evaluating and calculating a \"reasonable period of time\".\n25\n47. After examining Canada's arguments concerning the \"reasonable period of time\", it is clear\nthat certain of the steps proposed by Canada for implementation of the DSB's recommendations and\nrulings in this dispute are not fixed either by law or by regulation. Rather, they are estimates made by\nthe Government of Canada. The actual time taken to implement the DSB's recommendations and\nrulings in this case is subject to the discretion of the Government of Canada, and Canada has\nconsiderable flexibility in this regard. I recall the guidance provided by Article 21.1 of the DSU,\nwhich states that \"[ p]rompt compliance with recommendations or rulings of the DSB is essential in\norder to ensure effective resolution of disputes to the benefit of all Members.\" (emphasis added)\nThus, it is incumbent upon the Government of Canada to use its discretion to ensure that compliance\nwith the DSB's recommendations at issue is \"prompt\".\n48. I am not persuaded that the implementation schedule proposed by Canada properly reflects\nthe objective of \"prompt\" compliance. In particular, it appears that the Government of Canada could\nuse the discretion inherent in its Regulatory Po licy to implement the recommendations of the DSB\nin this case in a shorter period of time while still following the normal procedures for modifying\n\n21Canada's response to questioning at the oral hearing.\n22Statutory Instruments Act, R.S.C. 1985, c. S-22 (Exhibit 2 of Canada's submission).\n23Government of Canada Regulatory Policy, November 1999 (Exhibit 3 of Canada's submission). The\nRegulatory Policy was approved by Cabinet in November 1999.\n24Federal Regulatory Process Guide (Exhibit 4 of Cana da's submission). The Process Guide sets out\nthe steps required to develop, process and obtain approval of regulations.\n25These same instruments were at issue before the Arbitrator in Canada – Pharmaceutical Patents .\nLike the Arbitrator in that dispute, I accept, for purposes of this arbitration, that the steps mandated under the\nRegulatory Policy, though not legally binding in the sense of a law or regulation, can nevertheless constitute part\nof the \"reasonable period of time\" for implementation. Supra, footnote 15, para. 54.\n\nregulations. Two of the steps proposed by Canada illustrate the generous nature of the estimates\nprovided by Canada.\n49. First, Canada has proposed that it be given 150 days for what it terms \"Pre-Drafting\". Canada\nidentifies two aspects of the \"Pre-Drafting\" process. The first aspect is \"Identification and assessment\nof problem\". The second aspect is \"Publication of Notice of Intent in Canada Gazette , Part I.\"\nCanada notes that the explanation of this stage can be found in the Process Guide, at pages 3-4\nand 38-39. However, nowhere in the Process Guide is a time period specified. In response to\nquestioning at the oral hearing, Canada was not able to provide me with a sufficient justification for\nits request of 150 days for this stage of the implementation process. Canada's primary explanation\nappears to be the need for consultations between certain Canadian government departments, as well as\nconsultations between the Canadian government and various \"stakeholders\". While I agree that such\nconsultations are important, 150 days appears to be more than is reasonably necessary when \"prompt\ncompliance\" is the objective. In my view, Canada did not provide a satisfactory explanation as to\nwhy these consultations should take 150 days. I note further that Canada, in its RIAS relating to its\nefforts to withdraw the export subsidy published in the Canada Gazette on 5 August 2000, indicates\nthat it will \" continue consultations with stakeholders and the provinces to determine how and when\nCanada will implement those findings .\"\n\n26 (emphasis added) Moreover, in this same RIAS, Canada\nacknowledges that various Canadian government departments have been consulting with\n\"stakeholders\" throughout the WTO dispute settlement process.\n27 Under these circumstances,\nCanada's request for 150 days for consultations in the \"Pre-Drafting\" stage appears excessive.\n50. Second, in the \"Drafting/Approv al\" stage, upon receipt of public questions and comments\nafter pre-publication of draft regulations in the Canada Gazette, Canada has asked for 30 days so that\nit might prepare a \"response to public comments\" and another 30 days for \"amendment of regulation\nand RIAS as required\" in response to the public comments. However, I note that the regulations in\nquestion are likely to be very straightforward. In response to questioning at the oral hearing, Canada\nstated that \"in all likelihood\" it would simply repeal the MVTO 1998 and the SROs. Thus, 30 days to\nprepare a \"response to public comments\" and another 30 days for \"amendment of regulation and RIAS\nas required\" are unlikely to be necessary.\n\n26See Exhibit 1 of Canada's submission.\n27Ibid.\n\n51. In my view, Canada's proposal does not make sufficient use of the discretion built into the\nRegulatory Policy to achieve the \"prompt\" compliance required by Article 21.1 of the DSU.\n52. The European Communities and Japan have both argued that Canada should be able to\nimplement the DSB's recommendations here at issue within 90 days. The European Communities and\nJapan argue that since Canada was able to implement the DSB's recommendations under\nArticle 3.1(a) of the SCM Agreement within 90 days, it should be able to implement the DSB's\nrecommendations relating to Article I:1 and Article III:4 of the GATT 1994 and Article XVII of the\nGATS within 90 days as well.\n53. I agree with Canada, taking account of the normal process for adopting regulations in Canada,\nthat 90 days does not constitute a \"reasonable period of time\" for implementation of the DSB's\nrecommendations relating to Article I:1 and Article III:4 of the GATT 1994 and Article XVII of the\nGATS.\n\n28 In its written submission, Canada confirmed that it intends to withdraw the export subsidy\nwithin 90 days.\n29 However, Canada took this action in accordance with the DSB's recommendations\nand rulings relating to Article 3.1(a) of the SCM Agreement, made pursuant to the special dispute\nsettlement procedures in Article 4 of that Agreement. Article 4.7 of the SCM Agreement requires\nthat if a measure is found to be a prohibited subsidy, the panel shall recommend that the subsidizing\nMember \"withdraw the subsidy without delay\". To this end, the DSB recommended that Canada\nwithdraw the export subsidy within 90 days. Canada has stated that it will comply with this\nrecommendation, and in order to do so, will take, in its words, \"extraordinary action\".\n\n30 In my view,\nCanada's ability to take \"extraordinary action\" to withdraw the export subsidy \"without delay\", in\naccordance with the provisions of Article 4.7 of the SCM Agreement and pursuant to the\nrecommendation of the DSB, is not relevant for determining the \"reasonable period of time\" under\nArticle 21.3(c) of the DSU for implementation of the recommendations of the DSB relating to\nArticle I:1 and Article III:4 of the GATT 1994 and Article XVII of the GATS.\n54. Canada has placed great emphasis on the \"significant implications\" that implementation of the\nDSB's recommendations in this case will have for the \"administration of Canada's customs regime\".\n\n31\nCanada has explained, in detail, how implementation will cause difficulties for the ongoing \"major\nre-engineering\" of its customs operations, under which it is establishing a new system known as\n\n28For example, I note that Canada has highlighted the risk that regulations may be subject to judicial\nchallenge by affected parties if there has not been sufficient opportunity for public consultation. Canada's\nsubmission, para. 25.\n29Ibid., para. 5.\n30Ibid.\n31Ibid., paras. 46-66.\n\n\"Customs Self-Assessment\".\n32 This reform process was begun at the end of 1999, and the legislation\nnecessary to effect it is scheduled to be introduced into Parliament this fall. This reform is a\ncontinuing process, with the final phase of implementation to begin in late April 2001, and the\ntesting of the system with clients to continue through 2004.\n\n33 The relevance of the implementation of\nthis new customs administration system to Canada's argument on the \"reasonable period of time\" for\nimplementation is not clear. In its written submission, Canada appears to be arguing that the\nestablishment of the new customs system would require a delay in implementation of the DSB's\nrecommendations in this case.\n\n34 However, in response to questioning at the oral hearing, Canada\nstated that implementation of the DSB's recommendations would occur sooner a s a r e s u l t o f t h e\nadoption of the new customs administration system, if I accept the \"reasonable period of time\"\nproposed by Canada.\n55. Regardless of Canada's specific argument on this issue, I wish to emphasize that factors\nunrelated to an assessment of the shortest period of time possible for a Member to implement, within\nits legal system, the recommendations and rulings of the DSB in a particular case are irrelevant to\ndetermining the \"reasonable period of time\" under Article 21.3(c) of the DSU.\n\n35 While it might be\nmore convenient for Canada to implement the DSB's recommendations in this case on the same\ntimeline as it has planned for the reform of its customs administration regime, this factor is not\nrelevant in determining the \"shortest period possible\" within Canada's legal system for\nimplementation of the DSB's recommendations.\n\n36 As noted by the Arbitrator in Canada –\nPharmaceutical Patents , the determination of the \"reasonable period of time\" for implementation\nmust be a legal judgment based on an examination of relevant legal requirements.\n37\n\n32Canada's submission, paras. 53, 55.\n33See Exhibit 6 of Canada's submission.\n34Canada's submission, paras. 56-58.\n35See Award of the Arbitrator under Article 21.3(c) of the DSU, Canada – Pharmaceutical Patents ,\nsupra, footnote 15, para. 52. See also, Award of the Arbitrator under Article 21.3(c) of the DSU, Indonesia –\nCertain Measures Affecting the Automobile Industry , WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12,\n7 December 1998, para. 23; Award of the Arbitrator under Article 21.3(c) of the DSU, Japan – Taxes on\nAlcoholic Beverages, WT/DS8/15, WT/DS10/15, WT/DS11/13, 14 February 1997, paras. 19 and 27.\n36I note further that, according to Canada, legislat ion relating to the proposed reform of Canada's\ncustoms regime is scheduled to be introduced into Parliame nt this fall. As with any legislative process, there is\nalways an element of uncertainty in the specific timing for enactment of legislation. Therefore, it seems to me\nthat Canada has placed undue reliance on its customs reform process as a factor in determining the \"reasonable\nperiod of time\" for implementation.\n37Supra, footnote 15, para. 52.\n\nIV. The Award\n56. I determine that the \"reasonable period of time\" for Canada to implement the\nrecommendations and rulings of the DSB relating to Article I:1 and Article III:4 of the GATT 1994\nand Article XVII of the GATS in this case is 8 months from the date of adoption of the Appellate\nBody Report and the Panel Report, as modified by the Appellate Body Report, by the DSB on\n19 June 2000. The \"reasonable period of time\" will thus expire on 19 February 2001.\nSigned in the original at Geneva this 18th day of September 2000 by:\nJulio Lacarte-Muró"},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.264687"}}},{"rowIdx":1688,"cells":{"folder_number":{"kind":"string","value":"143"},"case_number":{"kind":"string","value":"143"},"original_filename":{"kind":"string","value":"DS143_SEQ01_Request_For_Establishment_Of_Panel.pdf"},"new_filename":{"kind":"string","value":"DS143_SEQ01_Request_For_Establishment_Of_Panel.pdf"},"doc_sequence":{"kind":"number","value":1,"string":"1"},"doc_type":{"kind":"string","value":"Request_For_Establishment_Of_Panel"},"doc_type_raw":{"kind":"string","value":"Request for the Establishment of a Panel by Hungary"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT DUTY ON WHEAT FROM HUNGARY"},"date":{"kind":"string","value":"9 October 1998"},"header_codes":{"kind":"string","value":"WT/DS143/2"},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['Hungary']"},"respondent":{"kind":"string","value":"['Slovak Republic']"},"third_parties":{"kind":"string","value":"[]"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. I, II GATT 1994Art. 4 Agriculture"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 12 October 2012\nConsultations\nComplaint by Hungary.\nOn 18 September 1998, Hungary\n requested consultations with the Slovak Republic in respect of a\n regulation adopted by the Slovak Republic which entered into force on 10\n September 1998, which allegedly increased the import duty of wheat\n originating in Hungary. Hungary asserted that the increased import duty on\n wheat (HS1001.1000, 1001.90) amounts to 2,540 SKK/t which equals to\n approximately 70% ad valorem. Hungary alleged that:\nHungary invoked the urgency provision of the DSU due to\n the severe economic and trade losses that are being caused by this\n measure, which was expected to remain in force until 10 March 1999.\nOn 8 October 1998, Hungary requested the establishment of a panel. At its meeting on 21 October 1998, the DSB deferred the establishment of a panel."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT\nDUTY ON WHEAT FROM HUNGARY\nRequest for the Establishment of a Panel by Hungary\nThe following communication, dated 8 October 1998, from the Permanent Mission of\nHungary to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the\nDSU.\nHungary requested consultations with the Slovak Republic on 18 September 1998 under\nArticle 4.8 of the Understanding on Rules and Procedures Governing the Settlement of Disputes\n(DSU), Article XXIII:1(a) of the General Agreement on Tariffs and Trade 1994 and Article 19 of the\nAgreement on Agriculture regarding import measures imposed on wheat originating in Hungary.\nOn 28 September 1998, consultations were held between the two parties. Unfortunately, up\ntill now the consultations did not lead to a mutually satisfactory solution.\nHungary hereby requests that a panel be established at the next meeting of the Dispute\nSettlement Body (DSB) pursuant to Articles 4. 9 and 6 of the DSU and Article XXIII:2 of GATT\n1994.\nHungary claims that the Slovak Republic, by increasing the import duties on wheat\n(HS 1001.1000, 1001.90) originating in Hungary above the respective bound rates, has acted\ninconsistently with Articles I and II of GATT 1994 and Article 4 of the Agreement on Agriculture,\ntherefore nullifying or impairing the benefits accruing to Hungary under GATT 1994 and the\nAgreement on Agriculture.\nHungary requests that the Panel be established with standard terms of reference as set out in\nArticle 7 of the DSU."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.279449"}}},{"rowIdx":1689,"cells":{"folder_number":{"kind":"string","value":"143"},"case_number":{"kind":"string","value":"143"},"original_filename":{"kind":"string","value":"DS143_SEQ02_Request_For_Consultations.pdf"},"new_filename":{"kind":"string","value":"DS143_SEQ02_Request_For_Consultations.pdf"},"doc_sequence":{"kind":"number","value":2,"string":"2"},"doc_type":{"kind":"string","value":"Request_For_Consultations"},"doc_type_raw":{"kind":"string","value":"Request for Consultations from Hungary"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT DUTY ON WHEAT FROM HUNGARY"},"date":{"kind":"string","value":"21 September 1998"},"header_codes":{"kind":"string","value":"WT/DS143/1; G/AG/GEN/26"},"agreement_indicators":{"kind":"string","value":"Agriculture (AG)"},"complainant":{"kind":"string","value":"['Hungary']"},"respondent":{"kind":"string","value":"['Slovak Republic']"},"third_parties":{"kind":"string","value":"[]"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. I, II GATT 1994Art. 4 Agriculture"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 12 October 2012\nConsultations\nComplaint by Hungary.\nOn 18 September 1998, Hungary\n requested consultations with the Slovak Republic in respect of a\n regulation adopted by the Slovak Republic which entered into force on 10\n September 1998, which allegedly increased the import duty of wheat\n originating in Hungary. Hungary asserted that the increased import duty on\n wheat (HS1001.1000, 1001.90) amounts to 2,540 SKK/t which equals to\n approximately 70% ad valorem. Hungary alleged that:\nHungary invoked the urgency provision of the DSU due to\n the severe economic and trade losses that are being caused by this\n measure, which was expected to remain in force until 10 March 1999.\nOn 8 October 1998, Hungary requested the establishment of a panel. At its meeting on 21 October 1998, the DSB deferred the establishment of a panel."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT\nDUTY ON WHEAT FROM HUNGARY\nRequest for Consultations from Hungary\nThe following communication, dated 18 September 1998, from the Permanent Mission of\nHungary to the Permanent Mission of the Slovak Republic and to the Chairman of the Dispute\nSettlement Body, is circulated in accordance with Article 4.4 of the DSU.\nThe Government of Hungary requests urgent consultation with the Slovak Republic pursuant\nto Article 4.8 of the Understanding on Rules and Procedures Governing the Settlement of Disputes,\nArticle XXIII:I(a) of the General Agreement on Tariffs and Trade 1994 and Article 19 of the\nAgreement on Agriculture regarding a regulation adopted by the Slovak Republic which entered into\nforce on 10 September 1998 and which increased the import duty of wheat originating in Hungary.\nThe increased import duty on wheat (HS 1001.1000, 1001.90) amounts to 2540 SKK/t which\nequals approximately to 70% ad valorem. The bound rates for these tariff lines in the Slovak\nSchedule for the year 1998 are set at the level of 4,4% (HS 1001.1000), 27% (HS 1001.9010) and\n22,5% (HS 1001.9091, 1001.9099). The only country subject to this measure is Hungary. The\nGovernment of Hungary is of the view that this measure is inconsistent with the obligations of the\nSlovak Republic under the General Agreement on Tariffs and Trade 1994 and the Agreement on\nAgriculture. The provisions of the agreements with which this measure is inconsistent include, but\nare not limited to, the following:\n(i) General Agreement on Tariffs and Trade 1994, Article I\n(ii) General Agreement on Tariffs and Trade 1994, Article II\n(iii) Agreement on Agriculture, Article 4\nTaking into account the clear inconsistency of this measure with the most fundamental\nobligations of the Slovak Republic under the WTO and the severe economic and trade losses that are\nbeing caused by this measure and in view of the fact that the measure is expected to remain in force\nuntil 10 March 1999, the solution of this case is of extreme urgency. It is for this very reason that\nHungary invokes the urgency provision of the DSU as indicated above.\nThe Government of Hungary reserves the right to raise additional claims, legal matters and\nany other matters regarding the measure of the Slovak Republic during the course of the\nconsultations.\nWe look forward to receiving your reply to this request within a short period of time so as to\nenable us to hold consultations before 28 September 1998 in line with Article 4.8 of the\nUnderstanding on Rules and Procedures Governing the Settlement of Disputes."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.280067"}}},{"rowIdx":1690,"cells":{"folder_number":{"kind":"string","value":"144"},"case_number":{"kind":"string","value":"144"},"original_filename":{"kind":"string","value":"DS144_SEQ01_Request_For_Consultations.pdf"},"new_filename":{"kind":"string","value":"DS144_SEQ01_Request_For_Consultations.pdf"},"doc_sequence":{"kind":"number","value":1,"string":"1"},"doc_type":{"kind":"string","value":"Request_For_Consultations"},"doc_type_raw":{"kind":"string","value":"Request for Consultations from Canada"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"UNITED STATES - CERTAIN MEASURES AFFECTING THE IMPORT OF CATTLE, SWINE AND GRAIN FROM CANADA"},"date":{"kind":"string","value":"29 September 1998"},"header_codes":{"kind":"string","value":"WT/DS144/1; G/L/260; G/SPS/W/90; G/TBT/D/18; G/AG/GEN/27"},"agreement_indicators":{"kind":"string","value":"Agriculture (AG); General Council; Sanitary and Phytosanitary Measures (SPS); Technical Barriers to Trade (TBT)"},"complainant":{"kind":"string","value":"['Canada']"},"respondent":{"kind":"string","value":"['U.S.']"},"third_parties":{"kind":"string","value":"[]"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. 4 AgricultureArt. I, III, V, XI, XXIV:12 GATT 1994Art. 2, 3, 4, 5, 6, 13, Annex B, Annex C Sanitary and Phytosanitary Measures (SPS)Art. 2, 3, 5, 7 Technical Barriers to Trade (TBT)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\nConsultations\nComplaint by Canada.\nOn 25 September 1998, Canada requested\n consultations with the US in respect of certain measures, imposed by the\n US state of South Dakota and other states, prohibiting entry or transit\n to Canadian trucks carrying cattle, swine, and grain. Canada alleged\n that these measures adversely affect the importation into the United\n States of cattle, swine, and grain originating in Canada. Canada alleges\n violations of Articles 2, 3, 4, 5, 6, 13 and Annexes B and C of the SPS\n Agreement; Articles 2, 3, 5 and 7 of the TBT Agreement; Article 4 of the\n Agreement on Agriculture; and Articles I, III, V, XI and XXIV:12 of GATT\n 1994. Canada also made a claim of nullification or impairment of\n benefits accruing to it under the cited Agreements. Canada invoked\n Article 4.8 of the DSU for expedited consultations in view of the\n perishable nature of the goods in question."},"page_count":{"kind":"number","value":2,"string":"2"},"clean_text":{"kind":"string","value":"UNITED STATES - CERTAIN MEASURES AFFECTING THE IMPORT\nOF CATTLE, SWINE AND GRAIN FROM CANADA\nRequest for Consultations from Canada\nThe following communication, dated 25 September 1998, from the Permanent Mission of\nCanada to the Permanent Mission of the United States and to the Chairman of the Dispute Settlement\nBody, is circulated in accordance with Article 4.4 of the DSU.\nThe Government of Canada requests consultations with the Government of the United States\npursuant to Article XXIII of the General Agreement on Tariffs and Trade 1994, Article 11 of the\nAgreement on the Application of Sanitary and Phytosanitary Measures, Article 14 of the Agreement\non Technical Barriers to Trade, Article 19 of the Agreement on Agriculture, and Article 4 of the\nUnderstanding on Rules and Procedures Governing the Settlement of Disputes, regarding certain\nmeasures imposed by South Dakota and other States prohibiting entry or transit to Canadian trucks\ncarrying cattle, swine and grain.\nThese measures adversely affect the importation into the United States of cattle, swine and\ngrain originating in Canada. The Government of Canada is of the view that these measures are\ninconsistent with the obligations of the United States under the Agreement on the Application of\nSanitary and Phytosanitary Measures, the Agreement on Technical Barriers to Trade and the General\nAgreement on Tariffs and Trade 1994. The provisions of these agreements with which these\nmeasures are inconsistent include, but are not limited to, the following:\n(i) Agreement on the Application of Sanitary and Phytosanitary Measures, Articles 2, 3,\n4, 5, 6, 13 and Annexes B and C;\n(ii) Agreement on Technical Barriers to Trade, Articles 2, 3, 5 and 7;\n(iii) Agreement on Agriculture, Article 4;\n(iv) General Agreement on Tariffs and Trade 1994, Articles I, III, V, XI, and XXIV:12.\n\nWT/DS144/1, G/L/260,\nG/SPS/W/90, G/TBT/D/18\n\nThe Government of Canada is of the view that these measures nullify or impair the benefits\naccruing to Canada directly or indirectly under the cited Agreements, regardless of whether violations\nof these Agreements occurred.\nIn accordance with Article 4.8 of the Understanding on Rules and Procedures Governing the\nSettlement of Disputes, the Government of Canada requests consultations with the Government of the\nUnited States to discuss this matter with the intention of reaching a satisfactory result. In view of the\nperishable nature of the goods in question, the Government of Canada welcomes any suggestions the\nGovernment of the United States may wish to make concerning dates on which the consultations\ncould take place within ten days from the date of receipt of this request."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.290630"}}},{"rowIdx":1691,"cells":{"folder_number":{"kind":"string","value":"145"},"case_number":{"kind":"string","value":"145"},"original_filename":{"kind":"string","value":"DS145_SEQ01_Request_For_Consultations.pdf"},"new_filename":{"kind":"string","value":"DS145_SEQ01_Request_For_Consultations.pdf"},"doc_sequence":{"kind":"number","value":1,"string":"1"},"doc_type":{"kind":"string","value":"Request_For_Consultations"},"doc_type_raw":{"kind":"string","value":"Request for Consultations from the European Communities"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF WHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES"},"date":{"kind":"string","value":"29 September 1998"},"header_codes":{"kind":"string","value":"WT/DS145/1; G/SCM/D29/1"},"agreement_indicators":{"kind":"string","value":"Subsidies and Countervailing Measures (SCM)"},"complainant":{"kind":"string","value":"['EU']"},"respondent":{"kind":"string","value":"['Argentina']"},"third_parties":{"kind":"string","value":"[]"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. 10, 11.11 Subsidies and Countervailing Measures (SCM)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\nConsultations\nComplaint by the European Communities.\nOn 23 September 1998, the EC requested\n consultations with the Argentina in respect of definitive countervailing duties\n allegedly imposed by Argentina on imports of wheat gluten from the EC.\n The EC stated that Argentina imposed a countervailing duty on wheat\n gluten imports from the EC with effect from 23 July 1998. The\n investigation which led to the imposition of these duties had been\n initiated on 23 October 1996 and, consequently, the EC contended that\n the investigation exceeded 18 months, contrary to Article 11.11 of the\n Subsidies Agreement. The EC also claimed a violation of Article 10 of\n the same Agreement."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF\nWHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES\nRequest for Consultations from the European Communities\nThe following communication, dated 23 September 1998, from the Permanent Delegation of\nthe European Communities to the Permanent Mission of Argentina and to the Chairman of the\nDispute Settlement Body, is circulated in accordance with Article 4.4 of the DSU.\nOn behalf of the European Communities, I hereby request consultations with Argentina\npursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of\nDisputes (DSU) and Articles 10, 11 and 30 of th e Agreement on Subsidies and Countervailing\nMeasures (SCM Agreement), with regard to definitive countervailing duties imposed by Argentina on\nimports of wheat gluten from the European Union.\nArgentina imposed a countervailing duty on the above imports with effect from 23 July 1998.\nThe investigation which led to the imposition of these duties had been initiated on 23 October 1996.\nArticle 11.11 of the SCM Agreement specifies that investigations shall in no case be concluded more\nthan 18 months after their initiation. In the case in question, Argentina's investigation exceeded\n18 months; it has consequently not complied with this provision and has violated Article 10 of the\nSCM Agreement.\nI look forward to receiving your reply to this request from the European Communities and to\nsetting a mutually convenient date for these consultations.\nA copy of this letter is being sent to the Chairman of the Dispute Settlement Body and to the\nDirector of the Legal Department of the Secretariat for onward distribution\nto the Chairman of the Subsidies and Countervailing Measures Committee."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.303521"}}},{"rowIdx":1692,"cells":{"folder_number":{"kind":"string","value":"145"},"case_number":{"kind":"string","value":"145"},"original_filename":{"kind":"string","value":"DS145_SEQ02_Request_For_Consultations_Rev.pdf"},"new_filename":{"kind":"string","value":"DS145_SEQ02_Request_For_Consultations_Rev.pdf"},"doc_sequence":{"kind":"number","value":2,"string":"2"},"doc_type":{"kind":"string","value":"Request_For_Consultations"},"doc_type_raw":{"kind":"string","value":"Request for Consultations from the European Communities Revision"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"string","value":"Rev"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF WHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES"},"date":{"kind":"string","value":"12 October 1998"},"header_codes":{"kind":"string","value":"WT/DS145/1/Rev.1; G/SCM/D29/1/Rev.1"},"agreement_indicators":{"kind":"string","value":"Subsidies and Countervailing Measures (SCM)"},"complainant":{"kind":"string","value":"['EU']"},"respondent":{"kind":"string","value":"['Argentina']"},"third_parties":{"kind":"string","value":"[]"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. 10, 11.11 Subsidies and Countervailing Measures (SCM)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\nConsultations\nComplaint by the European Communities.\nOn 23 September 1998, the EC requested\n consultations with the Argentina in respect of definitive countervailing duties\n allegedly imposed by Argentina on imports of wheat gluten from the EC.\n The EC stated that Argentina imposed a countervailing duty on wheat\n gluten imports from the EC with effect from 23 July 1998. The\n investigation which led to the imposition of these duties had been\n initiated on 23 October 1996 and, consequently, the EC contended that\n the investigation exceeded 18 months, contrary to Article 11.11 of the\n Subsidies Agreement. The EC also claimed a violation of Article 10 of\n the same Agreement."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF\nWHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES\nRequest for Consultations from the European Communities\nRevision\nThe following communication, dated 7 October 1998, from the Permanent Delegation of the\nEuropean Communities to the Permanent Mission of Argentina and to the Chairman of the Dispute\nSettlement Body, is circulated in accordance with Article 4.4. of the DSU.\nOn behalf of the European Communities, I hereby request consultations with Argentina\npursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of\nDisputes (DSU) and Article 30 of the Agreement on Subsidies and Countervailing Measures\n(SCM Agreement), with regard to definitive countervailing duties imposed by Argentina on imports\nof wheat gluten from the European Union. The European Communities intend that these\nconsultations be conducted in accordance with the procedures and practices of Article XXIII GATT.\nArgentina imposed a countervailing duty on the above imports with effect from 23 July 1998.\nThe investigation which led to the imposition of these duties had been initiated on 23 October 1996.\nArticle 11.11 of the SCM Agreement specifies that investigations shall in no case be concluded more\nthan 18 months after their initiation. In the case in question, Argentina's investigation exceeded\n18 months; it has consequently not complied with this provision and has violated Article 10 of the\nSCM Agreement.\nI look forward to receiving your reply to this request from the European Communities and to\nsetting a mutually convenient date for these consultations.\nA copy of this letter is being sent to the Chairman of the Dispute Settlement Body and to the\nDirector of the Legal Department of the Secretariat for onward distribution\nto the Chairman of the Subsidies and Countervailing Measures Committee."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.304014"}}},{"rowIdx":1693,"cells":{"folder_number":{"kind":"string","value":"146"},"case_number":{"kind":"string","value":"146"},"original_filename":{"kind":"string","value":"DS146_SEQ01_Request_For_Consultations.pdf"},"new_filename":{"kind":"string","value":"DS146_SEQ01_Request_For_Consultations.pdf"},"doc_sequence":{"kind":"number","value":1,"string":"1"},"doc_type":{"kind":"string","value":"Request_For_Consultations"},"doc_type_raw":{"kind":"string","value":"Request for Consultations"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR"},"date":{"kind":"string","value":"12 October 1998"},"header_codes":{"kind":"string","value":"WT/DS146/1; G/L/261; G/TRIMS/D/14"},"agreement_indicators":{"kind":"string","value":"General Council; Trade-Related Investment Measures (TRIMS)"},"complainant":{"kind":"string","value":"['EU']"},"respondent":{"kind":"string","value":"['India']"},"third_parties":{"kind":"string","value":"['Japan', 'South Korea']"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European Communities.\nOn 6\n October 1998, the EC requested consultations with India concerning certain\n measures affecting the automotive sector being applied by India. The EC\n stated that the measures include the documents entitled “Export and\n Import Policy, 1997-2002”, “ITC (HS Classification) Export and\n Import Policy 1997-2002” (“Classification”), and “Public Notice No. 60 (PN/97-02) of 12 December 1997, Export and\n Import Policy April 1997-March 2002”, and any other legislative or\n administrative provision implemented or consolidated by these policies, as\n well as MoUs signed by the Indian Government with certain manufacturers of\n automobiles. The EC contended that:\nOn 1 May 1999, the United States requested\n consultations (WT/DS175) with India in respect of certain Indian measures\n affecting trade and investment in the motor vehicle sector. The United\n States contended that the measures in question required manufacturing\n firms in the motor vehicle sector to:\nAccording to the United States, these measures were\n enforceable under Indian law and rulings, and manufacturing firms in the\n motor vehicle sector must comply with these requirements in order to\n obtain Indian import licenses for certain motor vehicle parts and\n components. The United States considered that these measures violate the\n obligations of India under Articles III and XI of GATT 1994, and Article 2\n of the TRIMS Agreement.\nOn 15 May 2000, the US requested the establishment of a\n panel. At its meeting on 19 June 2000, the DSB deferred the establishment\n of a Panel.\n\nPanel and Appellate Body proceedings\nFurther to a second request to establish a panel by the US,\n the DSB established a panel at its meeting on 27 July 2000. The EC, Japan\n and Korea reserved their third-party rights.\nOn 12 October 2000, the EC also requested the\n establishment of a panel. At its meeting on 23 October 2000, the DSB\n deferred the establishment of a Panel. Further to a second request by the\n EC, the DSB established a panel at its meeting of 17 November 2000. Since\n a panel had already been established with a similar mandate in the\n framework of the case WT/DS175, the DSB decided to join\n the panel with the already established panel in that case pursuant to\n Article 9.1 of the DSU. Japan reserved its third-party rights. On 14\n November 2000, the US requested the Director-General to determine the\n composition of the Panel. On 24 November 2000, the Panel was composed.\nOn 21 December 2001, the Panel circulated its report to\n the Members. The Panel concluded that:\nThe Panel recommended that the DSB requests India to\n bring its measures into conformity with its obligations under the WTO\n Agreements.\nOn 31 January 2002, India appealed the above Panel\n Report. In particular, India sought review of the following Panel’s\n conclusion on the grounds that they are in error and based upon erroneous\n findings on issues of law and related legal instruments:\nOn 14 March 2002, India withdrew its appeal. Further to\n India’s withdrawal of its appeal, the Appellate Body issued a short Report\n outlining the procedural history of the case. At the DSB meeting on 5\n April 2002, the US commended India’s decision to withdraw its appeal and\n shared some of India’s reservations with regard to Section VIII of the\n Panel Report. The EC considered that the Panel’s findings were justified.\n Despite its decision to withdraw its appeal as a result of the\n introduction of its new auto policy, India indicated that the findings\n contained in Section VIII were outside of the Panel’s terms of reference\n and were both factually and legally incorrect. India requested that the\n DSB adopt only a part of the Panel Report and consider the adoption of\n Section VIII only at its next meeting. The EC responded that the Reports\n should be adopted unconditionally by the parties, thus there was no\n justification for India’s request. The DSB proceeded with the adoption in\n full of the Appellate Body and Panel reports.\n\nImplementation of adopted reports\nOn 2 May 2002, India informed the DSB that\n\t\t it would need a reasonable period of time to implement the recommendations\n\t\t and rulings of the DSB and that it was ready to enter into discussions\n\t with the EC and the US in this regard.\nOn 18 July 2002, the parties informed the DSB that they\n had mutually agreed that the reasonable period of time to implement the\n recommendations and rulings of the DSB, shall be five months, that is from\n 5 April 2002 to 5 September 2002.\nOn 6 November 2002, India informed the DSB that it had\n fully complied with the recommendations of the DSB in this dispute by\n issuing Public Notice No. 31 on 19 August 2002 terminating the trade\n balancing requirement. India also informed that earlier it had removed the\n indigenization requirement vide Public Notice No. 30 on 4 September 2001."},"page_count":{"kind":"number","value":2,"string":"2"},"clean_text":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR\nRequest for Consultations\nThe following communication, dated 6 October 1998, from the Permanent Delegation of the\nEuropean Commission to the Permanent Mission of India and to the Chairman of the Dispute\nSettlement Body, is circulated in accordance with Article 4.4 of the DSU.\nOn behalf of the European Communities, I hereby request consultations with India pursuant\nto Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes\n(DSU), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and\nArticle 8 of the Agreement on Trade-Related Investment Measures (TRIMs Agreement), concerning\ncertain measures affecting the automotive sector.\nThe measures in question include, but are not limited to, the documents entitled (\"Export and\nImport Policy, 1997-2002\", \"ITC (HS Classification) Export and Import Policy 1997-2002\"\n(\"Classification\") and \"Public Notice No 60 (PN/97-02) of 12 December 1997, Export and Import\nPolicy April 1997-March 2002 – Policy relating to import of CKD/SKD kits/components by Joint\nVenture Car manufacturer companies under the MoU to be signed with the Government of India\"\n(\"Public Notice No 60\"); as well as any other legislative or administrative provision implemented or\nconsolidated therein; and any implementing measures taken thereunder, including in particular the\nMemorandums of Understanding (\"MoU\") signed by the Indian Government with certain\nmanufacturers of automobiles.\nUnder the above measures, imports of complete automobiles and of certain parts and\ncomponents therefor are subject to a system of non-automatic import licenses. Furthermore, it\nappears that, in practice, non automatic import licenses are also required for the importation of other\nautomotive parts and components, despite the fact that, according to the Classification as well as to\nthe notifications made by India to the WTO, imports of those parts and components are \"free\" from\nquantitative restrictions. In accordance with Public Notice No 60, import licenses may be granted\nonly to local joint venture automotive manufacturers that have signed a MoU with the Government of\nIndia whereby they undertake to comply with, inter alia, certain local content and export balancing\nrequirements.\nThe European Communities wish to express their concern with the apparent lack of\nconformity of the above measures with the oblig ations of India under GATT 1994 and the TRIMs\nAgreement. In particular, the Communities' concerns related to the following provisions:\n- Articles III and XI of GATT 1994;\n- Article 21 of the TRIMs Agreement.\n\nI look forward to receiving your reply to this request from the European Communities and to\nsetting a mutually convenient date for these consultations.\nA copy of this letter has been sent to the Chairman of the Dispute Settlement Body and to the\nChairman of the Council for Trade in Goods."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.332400"}}},{"rowIdx":1694,"cells":{"folder_number":{"kind":"string","value":"146"},"case_number":{"kind":"string","value":"146"},"original_filename":{"kind":"string","value":"DS146_SEQ02_Request_To_Join_Consultations_00.pdf"},"new_filename":{"kind":"string","value":"DS146_SEQ02_Request_To_Join_Consultations_00.pdf"},"doc_sequence":{"kind":"number","value":2,"string":"2"},"doc_type":{"kind":"string","value":"Request_To_Join_Consultations"},"doc_type_raw":{"kind":"string","value":"Request to Join Consultations"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"number","value":0,"string":"0"},"case_title":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR"},"date":{"kind":"string","value":"26 October 1998"},"header_codes":{"kind":"string","value":"WT/DS146/2"},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['EU']"},"respondent":{"kind":"string","value":"['India']"},"third_parties":{"kind":"string","value":"['Japan', 'South Korea']"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European Communities.\nOn 6\n October 1998, the EC requested consultations with India concerning certain\n measures affecting the automotive sector being applied by India. The EC\n stated that the measures include the documents entitled “Export and\n Import Policy, 1997-2002”, “ITC (HS Classification) Export and\n Import Policy 1997-2002” (“Classification”), and “Public Notice No. 60 (PN/97-02) of 12 December 1997, Export and\n Import Policy April 1997-March 2002”, and any other legislative or\n administrative provision implemented or consolidated by these policies, as\n well as MoUs signed by the Indian Government with certain manufacturers of\n automobiles. The EC contended that:\nOn 1 May 1999, the United States requested\n consultations (WT/DS175) with India in respect of certain Indian measures\n affecting trade and investment in the motor vehicle sector. The United\n States contended that the measures in question required manufacturing\n firms in the motor vehicle sector to:\nAccording to the United States, these measures were\n enforceable under Indian law and rulings, and manufacturing firms in the\n motor vehicle sector must comply with these requirements in order to\n obtain Indian import licenses for certain motor vehicle parts and\n components. The United States considered that these measures violate the\n obligations of India under Articles III and XI of GATT 1994, and Article 2\n of the TRIMS Agreement.\nOn 15 May 2000, the US requested the establishment of a\n panel. At its meeting on 19 June 2000, the DSB deferred the establishment\n of a Panel.\n\nPanel and Appellate Body proceedings\nFurther to a second request to establish a panel by the US,\n the DSB established a panel at its meeting on 27 July 2000. The EC, Japan\n and Korea reserved their third-party rights.\nOn 12 October 2000, the EC also requested the\n establishment of a panel. At its meeting on 23 October 2000, the DSB\n deferred the establishment of a Panel. Further to a second request by the\n EC, the DSB established a panel at its meeting of 17 November 2000. Since\n a panel had already been established with a similar mandate in the\n framework of the case WT/DS175, the DSB decided to join\n the panel with the already established panel in that case pursuant to\n Article 9.1 of the DSU. Japan reserved its third-party rights. On 14\n November 2000, the US requested the Director-General to determine the\n composition of the Panel. On 24 November 2000, the Panel was composed.\nOn 21 December 2001, the Panel circulated its report to\n the Members. The Panel concluded that:\nThe Panel recommended that the DSB requests India to\n bring its measures into conformity with its obligations under the WTO\n Agreements.\nOn 31 January 2002, India appealed the above Panel\n Report. In particular, India sought review of the following Panel’s\n conclusion on the grounds that they are in error and based upon erroneous\n findings on issues of law and related legal instruments:\nOn 14 March 2002, India withdrew its appeal. Further to\n India’s withdrawal of its appeal, the Appellate Body issued a short Report\n outlining the procedural history of the case. At the DSB meeting on 5\n April 2002, the US commended India’s decision to withdraw its appeal and\n shared some of India’s reservations with regard to Section VIII of the\n Panel Report. The EC considered that the Panel’s findings were justified.\n Despite its decision to withdraw its appeal as a result of the\n introduction of its new auto policy, India indicated that the findings\n contained in Section VIII were outside of the Panel’s terms of reference\n and were both factually and legally incorrect. India requested that the\n DSB adopt only a part of the Panel Report and consider the adoption of\n Section VIII only at its next meeting. The EC responded that the Reports\n should be adopted unconditionally by the parties, thus there was no\n justification for India’s request. The DSB proceeded with the adoption in\n full of the Appellate Body and Panel reports.\n\nImplementation of adopted reports\nOn 2 May 2002, India informed the DSB that\n\t\t it would need a reasonable period of time to implement the recommendations\n\t\t and rulings of the DSB and that it was ready to enter into discussions\n\t with the EC and the US in this regard.\nOn 18 July 2002, the parties informed the DSB that they\n had mutually agreed that the reasonable period of time to implement the\n recommendations and rulings of the DSB, shall be five months, that is from\n 5 April 2002 to 5 September 2002.\nOn 6 November 2002, India informed the DSB that it had\n fully complied with the recommendations of the DSB in this dispute by\n issuing Public Notice No. 31 on 19 August 2002 terminating the trade\n balancing requirement. India also informed that earlier it had removed the\n indigenization requirement vide Public Notice No. 30 on 4 September 2001."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR\nRequest to Join Consultations\nThe following communication, dated 21 October 1998, from the Permanent Mission of Japan\nto the Permanent Mission of India and to the Chairman of the Dispute Settlement Body, is circulated\nin accordance with Article 4.11 of the DSU.\nPursuant to paragraph 11 of Article 4 of the Understanding on Rules and Procedures\nGoverning the Settlement of Disputes, the Government of Japan hereby notifies the Government of\nIndia that, in light of the substantial trade interest of Japan, it desires to be joined in the consultations\nrequested by the European Communities in a communication circulated to WTO Members on\n12 October 1998 (, G/ L/261, ) entitled \"\"."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.332703"}}},{"rowIdx":1695,"cells":{"folder_number":{"kind":"string","value":"146"},"case_number":{"kind":"string","value":"146"},"original_filename":{"kind":"string","value":"DS146_SEQ03_Request_To_Join_Consultations_01.pdf"},"new_filename":{"kind":"string","value":"DS146_SEQ03_Request_To_Join_Consultations_01.pdf"},"doc_sequence":{"kind":"number","value":3,"string":"3"},"doc_type":{"kind":"string","value":"Request_To_Join_Consultations"},"doc_type_raw":{"kind":"string","value":"Request to Join Consultations Communication from the United States"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"number","value":1,"string":"1"},"case_title":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR"},"date":{"kind":"string","value":"28 October 1998"},"header_codes":{"kind":"string","value":"WT/DS146/3"},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['EU']"},"respondent":{"kind":"string","value":"['India']"},"third_parties":{"kind":"string","value":"['Japan', 'South Korea']"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European Communities.\nOn 6\n October 1998, the EC requested consultations with India concerning certain\n measures affecting the automotive sector being applied by India. The EC\n stated that the measures include the documents entitled “Export and\n Import Policy, 1997-2002”, “ITC (HS Classification) Export and\n Import Policy 1997-2002” (“Classification”), and “Public Notice No. 60 (PN/97-02) of 12 December 1997, Export and\n Import Policy April 1997-March 2002”, and any other legislative or\n administrative provision implemented or consolidated by these policies, as\n well as MoUs signed by the Indian Government with certain manufacturers of\n automobiles. The EC contended that:\nOn 1 May 1999, the United States requested\n consultations (WT/DS175) with India in respect of certain Indian measures\n affecting trade and investment in the motor vehicle sector. The United\n States contended that the measures in question required manufacturing\n firms in the motor vehicle sector to:\nAccording to the United States, these measures were\n enforceable under Indian law and rulings, and manufacturing firms in the\n motor vehicle sector must comply with these requirements in order to\n obtain Indian import licenses for certain motor vehicle parts and\n components. The United States considered that these measures violate the\n obligations of India under Articles III and XI of GATT 1994, and Article 2\n of the TRIMS Agreement.\nOn 15 May 2000, the US requested the establishment of a\n panel. At its meeting on 19 June 2000, the DSB deferred the establishment\n of a Panel.\n\nPanel and Appellate Body proceedings\nFurther to a second request to establish a panel by the US,\n the DSB established a panel at its meeting on 27 July 2000. The EC, Japan\n and Korea reserved their third-party rights.\nOn 12 October 2000, the EC also requested the\n establishment of a panel. At its meeting on 23 October 2000, the DSB\n deferred the establishment of a Panel. Further to a second request by the\n EC, the DSB established a panel at its meeting of 17 November 2000. Since\n a panel had already been established with a similar mandate in the\n framework of the case WT/DS175, the DSB decided to join\n the panel with the already established panel in that case pursuant to\n Article 9.1 of the DSU. Japan reserved its third-party rights. On 14\n November 2000, the US requested the Director-General to determine the\n composition of the Panel. On 24 November 2000, the Panel was composed.\nOn 21 December 2001, the Panel circulated its report to\n the Members. The Panel concluded that:\nThe Panel recommended that the DSB requests India to\n bring its measures into conformity with its obligations under the WTO\n Agreements.\nOn 31 January 2002, India appealed the above Panel\n Report. In particular, India sought review of the following Panel’s\n conclusion on the grounds that they are in error and based upon erroneous\n findings on issues of law and related legal instruments:\nOn 14 March 2002, India withdrew its appeal. Further to\n India’s withdrawal of its appeal, the Appellate Body issued a short Report\n outlining the procedural history of the case. At the DSB meeting on 5\n April 2002, the US commended India’s decision to withdraw its appeal and\n shared some of India’s reservations with regard to Section VIII of the\n Panel Report. The EC considered that the Panel’s findings were justified.\n Despite its decision to withdraw its appeal as a result of the\n introduction of its new auto policy, India indicated that the findings\n contained in Section VIII were outside of the Panel’s terms of reference\n and were both factually and legally incorrect. India requested that the\n DSB adopt only a part of the Panel Report and consider the adoption of\n Section VIII only at its next meeting. The EC responded that the Reports\n should be adopted unconditionally by the parties, thus there was no\n justification for India’s request. The DSB proceeded with the adoption in\n full of the Appellate Body and Panel reports.\n\nImplementation of adopted reports\nOn 2 May 2002, India informed the DSB that\n\t\t it would need a reasonable period of time to implement the recommendations\n\t\t and rulings of the DSB and that it was ready to enter into discussions\n\t with the EC and the US in this regard.\nOn 18 July 2002, the parties informed the DSB that they\n had mutually agreed that the reasonable period of time to implement the\n recommendations and rulings of the DSB, shall be five months, that is from\n 5 April 2002 to 5 September 2002.\nOn 6 November 2002, India informed the DSB that it had\n fully complied with the recommendations of the DSB in this dispute by\n issuing Public Notice No. 31 on 19 August 2002 terminating the trade\n balancing requirement. India also informed that earlier it had removed the\n indigenization requirement vide Public Notice No. 30 on 4 September 2001."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR\nRequest to Join Consultations\nCommunication from the United States\nThe following communication, dated 22 October 1998, from the Permanent Mission of the\nUnited States to the Permanent Mission of India and to the Chairman of the Dispute Settlement Body,\nis circulated in accordance with Article 4.11 of the DSU.\nPursuant to paragraph 11 of Article 4 of the Understanding on Rules and Procedures\nGoverning the Settlement of Disputes, the United States Government hereby notifies the Government\nof India that, in light of the substantial trade interest of the United States, it desires to be joined in the\nconsultations under Article XXII:1 of the General Agreement on Tariffs and Trade 1994\n(\"GATT 1994\") requested by the European Communities in a communication circulated to WTO\nMembers on 12 October 1998 (), entitled \"\".\nThe United States has a substantial trade interest in the automobiles and automobile parts and\ncomponents that are the subject of the EC request. The U.S. trade interest in the Indian automotive\nregime, and the restrictive nature of this regime on U.S. trade can be seen in the following figures.\nThe United States exported only $29 million in automotive vehicles and parts (HS chapter 87) to India\nin calendar year 1997. By contrast, U.S. exports of automotive vehicles and parts in chapter 87 to\nEast Asia amounted to $61 billion in the same period. U.S. chapter 87 exports were 9 per cent of total\nU.S. exports to East Asia and less than one per cent of U.S. exports to India."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.333193"}}},{"rowIdx":1696,"cells":{"folder_number":{"kind":"string","value":"146"},"case_number":{"kind":"string","value":"146"},"original_filename":{"kind":"string","value":"DS146_SEQ04_Request_For_Establishment_Of_Panel.pdf"},"new_filename":{"kind":"string","value":"DS146_SEQ04_Request_For_Establishment_Of_Panel.pdf"},"doc_sequence":{"kind":"number","value":4,"string":"4"},"doc_type":{"kind":"string","value":"Request_For_Establishment_Of_Panel"},"doc_type_raw":{"kind":"string","value":"Request for the Establishment of a Panel by the European Communities"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR"},"date":{"kind":"string","value":"13 October 2000"},"header_codes":{"kind":"string","value":"WT/DS146/4"},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['EU']"},"respondent":{"kind":"string","value":"['India']"},"third_parties":{"kind":"string","value":"['Japan', 'South Korea']"},"dispute_stage":{"kind":"string","value":"Consultation"},"agreements_cited":{"kind":"string","value":"Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European Communities.\nOn 6\n October 1998, the EC requested consultations with India concerning certain\n measures affecting the automotive sector being applied by India. The EC\n stated that the measures include the documents entitled “Export and\n Import Policy, 1997-2002”, “ITC (HS Classification) Export and\n Import Policy 1997-2002” (“Classification”), and “Public Notice No. 60 (PN/97-02) of 12 December 1997, Export and\n Import Policy April 1997-March 2002”, and any other legislative or\n administrative provision implemented or consolidated by these policies, as\n well as MoUs signed by the Indian Government with certain manufacturers of\n automobiles. The EC contended that:\nOn 1 May 1999, the United States requested\n consultations (WT/DS175) with India in respect of certain Indian measures\n affecting trade and investment in the motor vehicle sector. The United\n States contended that the measures in question required manufacturing\n firms in the motor vehicle sector to:\nAccording to the United States, these measures were\n enforceable under Indian law and rulings, and manufacturing firms in the\n motor vehicle sector must comply with these requirements in order to\n obtain Indian import licenses for certain motor vehicle parts and\n components. The United States considered that these measures violate the\n obligations of India under Articles III and XI of GATT 1994, and Article 2\n of the TRIMS Agreement.\nOn 15 May 2000, the US requested the establishment of a\n panel. At its meeting on 19 June 2000, the DSB deferred the establishment\n of a Panel.\n\nPanel and Appellate Body proceedings\nFurther to a second request to establish a panel by the US,\n the DSB established a panel at its meeting on 27 July 2000. The EC, Japan\n and Korea reserved their third-party rights.\nOn 12 October 2000, the EC also requested the\n establishment of a panel. At its meeting on 23 October 2000, the DSB\n deferred the establishment of a Panel. Further to a second request by the\n EC, the DSB established a panel at its meeting of 17 November 2000. Since\n a panel had already been established with a similar mandate in the\n framework of the case WT/DS175, the DSB decided to join\n the panel with the already established panel in that case pursuant to\n Article 9.1 of the DSU. Japan reserved its third-party rights. On 14\n November 2000, the US requested the Director-General to determine the\n composition of the Panel. On 24 November 2000, the Panel was composed.\nOn 21 December 2001, the Panel circulated its report to\n the Members. The Panel concluded that:\nThe Panel recommended that the DSB requests India to\n bring its measures into conformity with its obligations under the WTO\n Agreements.\nOn 31 January 2002, India appealed the above Panel\n Report. In particular, India sought review of the following Panel’s\n conclusion on the grounds that they are in error and based upon erroneous\n findings on issues of law and related legal instruments:\nOn 14 March 2002, India withdrew its appeal. Further to\n India’s withdrawal of its appeal, the Appellate Body issued a short Report\n outlining the procedural history of the case. At the DSB meeting on 5\n April 2002, the US commended India’s decision to withdraw its appeal and\n shared some of India’s reservations with regard to Section VIII of the\n Panel Report. The EC considered that the Panel’s findings were justified.\n Despite its decision to withdraw its appeal as a result of the\n introduction of its new auto policy, India indicated that the findings\n contained in Section VIII were outside of the Panel’s terms of reference\n and were both factually and legally incorrect. India requested that the\n DSB adopt only a part of the Panel Report and consider the adoption of\n Section VIII only at its next meeting. The EC responded that the Reports\n should be adopted unconditionally by the parties, thus there was no\n justification for India’s request. The DSB proceeded with the adoption in\n full of the Appellate Body and Panel reports.\n\nImplementation of adopted reports\nOn 2 May 2002, India informed the DSB that\n\t\t it would need a reasonable period of time to implement the recommendations\n\t\t and rulings of the DSB and that it was ready to enter into discussions\n\t with the EC and the US in this regard.\nOn 18 July 2002, the parties informed the DSB that they\n had mutually agreed that the reasonable period of time to implement the\n recommendations and rulings of the DSB, shall be five months, that is from\n 5 April 2002 to 5 September 2002.\nOn 6 November 2002, India informed the DSB that it had\n fully complied with the recommendations of the DSB in this dispute by\n issuing Public Notice No. 31 on 19 August 2002 terminating the trade\n balancing requirement. India also informed that earlier it had removed the\n indigenization requirement vide Public Notice No. 30 on 4 September 2001."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR\nRequest for the Establishment of a Panel by the European Communities\nThe following communication, dated 12 October 2000, from the Permanent Delegation of the\nEuropean Commission to the Chairman of the Disp ute Settlement Body, is circulated pursuant to\nArticle 6.2 of the DSU.\nOn 6 October 1998 the European Communities (EC) requested consultations with the\nGovernment of India pursuant to Article 4 of the Understanding on Rules and Procedures Governing\nthe Settlement of Disputes (DSU), Article XXII of the General Agreement on Tariffs on Trade 1994\n(GATT) and Article 8 of the Agreement on Trade-Related Investment Measures (TRIMs Agreement)\nwith respect to certain measures affecting the im portation and internal sale of automotive products\n\nThe EC and India held consultations in Ge neva on 2 December 1998. Unfortunately those\nconsultations failed to resolve the dispute.\nThe measures concerned are contained in:\n- Public Notice No. 60 (PN 97-02) of the Indian Ministry of Commerce, effective\n12 December 1997; and\n- the Memorandums of Understanding (MoUs) entered into by certain manufacturers of\nautomobiles with the Government of India pursuant to Public Notice No 60.\nThe above measures require manufacturers of automobiles to sign an MoU as a condition for\nobtaining licenses for importing automotive products that are currently subject to import restrictions.\nAccording to the Indian authorities, the MoUs are “binding” and “enforceable” instruments, which\nshall remain valid after the date when those rest rictions are eliminated. The MoUs require (i) to\nestablish “actual production facilities” in India; (ii) to make a minimum investment; (iii) to achieve a\ncertain level of \"indigenisation\"; and (iv) to export a certain amount of automotive products.\nThe EC considers that the requirements imposed by the above measures are in violation of\nArticles III:4 and XI:1 of GATT and of Article 2.1 of the TRIMs Agreement.\nIn view of the above, the EC hereby request that a panel be established at the next meeting of\nthe Dispute Settlement Body pursuant to Articles 4.7 and 6 of the DSU, Article XXIII of GATT and\nArticle 8 of the TRIMs Agreement, in accordance with the standard terms of reference provided for in\nArticle 7.1 of the DSU."},"processing_date":{"kind":"string","value":"2026-03-15T15:40:59.333778"}}},{"rowIdx":1697,"cells":{"folder_number":{"kind":"string","value":"146"},"case_number":{"kind":"string","value":"175"},"original_filename":{"kind":"string","value":"DS175_SEQ01_Note_By_Secretariat.pdf"},"new_filename":{"kind":"string","value":"DS175_SEQ01_Note_By_Secretariat.pdf"},"doc_sequence":{"kind":"number","value":1,"string":"1"},"doc_type":{"kind":"string","value":"Note_By_Secretariat"},"doc_type_raw":{"kind":"string","value":"Constitution of the Panel Established at the Requests of the United States and the European Communities Note by the Secretariat"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"null"},"case_title":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR"},"date":{"kind":"string","value":"30 November 2000"},"header_codes":{"kind":"string","value":"WT/DS146/5; WT/DS175/5; WT/DS175/4."},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['U.S.']"},"respondent":{"kind":"string","value":"['India']"},"third_parties":{"kind":"string","value":"['EU', 'Japan', 'South Korea']"},"dispute_stage":{"kind":"string","value":"Appellate Body"},"agreements_cited":{"kind":"string","value":"Art. III:4, XI:1 GATT 1994Art. 2.1, 2.2 Trade-Related Investment Measures (TRIMs)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European Communities.\nOn 6 October 1998, the EC requested consultations with\n India concerning certain measures affecting the automotive sector being\n applied by India. The EC stated that the measures include the documents\n entitled “Export and Import Policy, 1997-2002”, “ITC (HS\n Classification) Export and Import Policy 1997-2002”\n (“Classification”), and “Public Notice No. 60 (PN/97-02) of\n 12 December 1997, Export and Import Policy April 1997-March 2002”,\n and any other legislative or administrative provision implemented or\n consolidated by these policies, as well as MoUs signed by the Indian\n Government with certain manufacturers of automobiles. The EC contended\n that:\nOn 1 May 1999, the United States requested\n consultations (WT/DS175) with India in respect of certain Indian measures\n affecting trade and investment in the motor vehicle sector. The United\n States contended that the measures in question required manufacturing\n firms in the motor vehicle sector to:\nAccording to the United States, these measures were\n enforceable under Indian law and rulings, and manufacturing firms in the\n motor vehicle sector must comply with these requirements in order to\n obtain Indian import licenses for certain motor vehicle parts and\n components. The United States considered that these measures violate the\n obligations of India under Articles III and XI of GATT 1994, and Article 2\n of the TRIMS Agreement.\nOn 15 May 2000, the US requested the establishment of a\n panel. At its meeting on 19 June 2000, the DSB deferred the establishment\n of a Panel.\n\nPanel and Appellate Body proceedings\nFurther to a second request to establish a panel by the US,\n the DSB established a panel at its meeting on 27 July 2000. The EC, Japan\n and Korea reserved their third-party rights.\nOn 12 October 2000, the EC also requested the\n establishment of a panel. At its meeting on 23 October 2000, the DSB\n deferred the establishment of a Panel. Further to a second request by the\n EC, the DSB established a panel at its meeting of 17 November 2000. Since\n a panel had already been established with a similar mandate in the\n framework of the above-mentioned case WT/DS175, the DSB decided to join\n the panel with the already established panel in that case pursuant to\n Article 9.1 of the DSU. Japan reserved its third-party rights. On 14\n November 2000, the US requested the Director-General to determine the\n composition of the Panel. On 24 November 2000, the Panel was composed.\nOn 21 December 2001, the Panel circulated its report to\n the Members. The Panel concluded that:\nThe Panel recommended that the DSB requests India to\n bring its measures into conformity with its obligations under the WTO\n Agreements.\nOn 31 January 2002, India appealed the above Panel\n Report. In particular, India sought review of the following Panel’s\n conclusion on the grounds that they are in error and based upon erroneous\n findings on issues of law and related legal instruments:\nOn 14 March 2002, India withdrew its appeal. Further to\n India’s\n withdrawal of its appeal, the Appellate Body issued a short Report\n outlining the procedural history of the case. At the DSB meeting on 5\n April 2002, the US commended India’s decision to withdraw its appeal and\n shared some of India’s reservations with regard to Section VIII of the\n Panel Report. The EC considered that the Panel’s findings were justified.\n Despite its decision to withdraw its appeal as a result of the\n introduction of its new auto policy, India indicated that the findings\n contained in Section VIII were outside of the Panel’s terms of reference\n and were both factually and legally incorrect. India requested that the\n DSB adopt only a part of the Panel Report and consider the adoption of\n Section VIII only at its next meeting. The EC responded that the Reports\n should be adopted unconditionally by the parties, thus there was no\n justification for India’s request. The DSB proceeded with the adoption in\n full of the Appellate Body and Panel reports.\n\nImplementation of adopted reports\nOn 2 May 2002, India informed the DSB that it would\n\t\t need a reasonable period of time to implement the recommendations and\n\t\t rulings of the DSB and that it was ready to enter into discussions with\n\t the EC and the US in this regard.\nOn 18 July 2002, the parties informed the DSB that they\n had mutually agreed that the reasonable period of time to implement the\n recommendations and rulings of the DSB, shall be five months, that is from\n 5 April 2002 to 5 September 2002.\nOn 6 November 2002, India informed the DSB that it had fully complied\n with the recommendations of the DSB in this dispute by issuing Public\n Notice No. 31 on 19 August 2002 terminating the trade balancing\n requirement. India also informed that earlier it had removed the\n indigenization requirement vide Public Notice No. 30 on 4 September 2001."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR\nConstitution of the Panel Established at the Requests of the United States\nand the European Communities\nNote by the Secretariat\n1. At its meeting of 27 July 2000 (WT/DSB/M/86), the DSB established a panel at the request of\nthe United States to examine the complaint contained in On 14 November 2000, the\nUnited States requested the Director-General to determine the composition of the Panel, pursuant to\nArticle 8.7 of the DSU.\n2. At its meeting of 17 November 2000, the DSB agreed that, in accordance with Article 9.1 of\nthe DSU, the panel established on 27 July to examine the complaint by the United States should also\nexamine the complaint by the European Communities contained in and agreed that the\nPanel should have standard terms of reference. The terms of reference of the Panel are therefore as\nfollows:\n\"To examine, in the light of the relevant provisions of the covered agreements cited\nby the United States in WT/DSB/175/4 and by the European Communities in\n, the matters referred to the DSB by the United States and the European\nCommunities in those documents and to make such findings as will assist the DSB in\nmaking the recommendations or in giving the rulings provided for in those\nagreements.\"\n3. On 24 November, in accordance with Article 8.7 of the DSU, the Director-General composed\nthe Panel as follows:\nChairman: Mr. John Weekes\nMembers: Ms. Gloria Peña\nMr. Jeffrey Waincymer\n4. Korea and Japan have reserved their rights to participate in the panel proceedings as third\nparties."},"processing_date":{"kind":"string","value":"2026-03-15T15:41:01.558297"}}},{"rowIdx":1698,"cells":{"folder_number":{"kind":"string","value":"146"},"case_number":{"kind":"string","value":"175"},"original_filename":{"kind":"string","value":"DS175_SEQ02_Communication_00.pdf"},"new_filename":{"kind":"string","value":"DS175_SEQ02_Communication_00.pdf"},"doc_sequence":{"kind":"number","value":2,"string":"2"},"doc_type":{"kind":"string","value":"Communication"},"doc_type_raw":{"kind":"string","value":"Communication from the Chairman of the Panel"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"number","value":0,"string":"0"},"case_title":{"kind":"string","value":"INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR"},"date":{"kind":"string","value":"21 August 2001"},"header_codes":{"kind":"string","value":"WT/DS146/6; WT/DS175/6"},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['U.S.']"},"respondent":{"kind":"string","value":"['India']"},"third_parties":{"kind":"string","value":"['EU', 'Japan', 'South Korea']"},"dispute_stage":{"kind":"string","value":"Appellate Body"},"agreements_cited":{"kind":"string","value":"Art. III:4, XI:1 GATT 1994Art. 2.1, 2.2 Trade-Related Investment Measures (TRIMs)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European Communities.\nOn 6 October 1998, the EC requested consultations with\n India concerning certain measures affecting the automotive sector being\n applied by India. The EC stated that the measures include the documents\n entitled “Export and Import Policy, 1997-2002”, “ITC (HS\n Classification) Export and Import Policy 1997-2002”\n (“Classification”), and “Public Notice No. 60 (PN/97-02) of\n 12 December 1997, Export and Import Policy April 1997-March 2002”,\n and any other legislative or administrative provision implemented or\n consolidated by these policies, as well as MoUs signed by the Indian\n Government with certain manufacturers of automobiles. The EC contended\n that:\nOn 1 May 1999, the United States requested\n consultations (WT/DS175) with India in respect of certain Indian measures\n affecting trade and investment in the motor vehicle sector. The United\n States contended that the measures in question required manufacturing\n firms in the motor vehicle sector to:\nAccording to the United States, these measures were\n enforceable under Indian law and rulings, and manufacturing firms in the\n motor vehicle sector must comply with these requirements in order to\n obtain Indian import licenses for certain motor vehicle parts and\n components. The United States considered that these measures violate the\n obligations of India under Articles III and XI of GATT 1994, and Article 2\n of the TRIMS Agreement.\nOn 15 May 2000, the US requested the establishment of a\n panel. At its meeting on 19 June 2000, the DSB deferred the establishment\n of a Panel.\n\nPanel and Appellate Body proceedings\nFurther to a second request to establish a panel by the US,\n the DSB established a panel at its meeting on 27 July 2000. The EC, Japan\n and Korea reserved their third-party rights.\nOn 12 October 2000, the EC also requested the\n establishment of a panel. At its meeting on 23 October 2000, the DSB\n deferred the establishment of a Panel. Further to a second request by the\n EC, the DSB established a panel at its meeting of 17 November 2000. Since\n a panel had already been established with a similar mandate in the\n framework of the above-mentioned case WT/DS175, the DSB decided to join\n the panel with the already established panel in that case pursuant to\n Article 9.1 of the DSU. Japan reserved its third-party rights. On 14\n November 2000, the US requested the Director-General to determine the\n composition of the Panel. On 24 November 2000, the Panel was composed.\nOn 21 December 2001, the Panel circulated its report to\n the Members. The Panel concluded that:\nThe Panel recommended that the DSB requests India to\n bring its measures into conformity with its obligations under the WTO\n Agreements.\nOn 31 January 2002, India appealed the above Panel\n Report. In particular, India sought review of the following Panel’s\n conclusion on the grounds that they are in error and based upon erroneous\n findings on issues of law and related legal instruments:\nOn 14 March 2002, India withdrew its appeal. Further to\n India’s\n withdrawal of its appeal, the Appellate Body issued a short Report\n outlining the procedural history of the case. At the DSB meeting on 5\n April 2002, the US commended India’s decision to withdraw its appeal and\n shared some of India’s reservations with regard to Section VIII of the\n Panel Report. The EC considered that the Panel’s findings were justified.\n Despite its decision to withdraw its appeal as a result of the\n introduction of its new auto policy, India indicated that the findings\n contained in Section VIII were outside of the Panel’s terms of reference\n and were both factually and legally incorrect. India requested that the\n DSB adopt only a part of the Panel Report and consider the adoption of\n Section VIII only at its next meeting. The EC responded that the Reports\n should be adopted unconditionally by the parties, thus there was no\n justification for India’s request. The DSB proceeded with the adoption in\n full of the Appellate Body and Panel reports.\n\nImplementation of adopted reports\nOn 2 May 2002, India informed the DSB that it would\n\t\t need a reasonable period of time to implement the recommendations and\n\t\t rulings of the DSB and that it was ready to enter into discussions with\n\t the EC and the US in this regard.\nOn 18 July 2002, the parties informed the DSB that they\n had mutually agreed that the reasonable period of time to implement the\n recommendations and rulings of the DSB, shall be five months, that is from\n 5 April 2002 to 5 September 2002.\nOn 6 November 2002, India informed the DSB that it had fully complied\n with the recommendations of the DSB in this dispute by issuing Public\n Notice No. 31 on 19 August 2002 terminating the trade balancing\n requirement. India also informed that earlier it had removed the\n indigenization requirement vide Public Notice No. 30 on 4 September 2001."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR\nCommunication from the Chairman of the Panel\nThe following communication, dated 21 May 2001, addressed to the Dispute Settlement Body\n(DSB), is circulated in accordance with Article 12.9 of the Dispute Settlement Understanding (DSU).\nArticle 12.8 of the Understanding on Rules and Procedures Governing the Settlement of\nDisputes (DSU) provides that the period in which a panel shall conduct its examination, from the date\nthat the composition and terms of reference of the panel have been agreed upon until the date that the\nfinal report is issued to the parties, shall, as a general rule, not exceed six months.\nArticle 12.9 states that when a panel considers that it cannot issue its report within six\nmonths, it shall inform the Dispute Settlement Body (DSB) in writing of the reasons for the delay\ntogether with an estimate of the period within which it will issue its report.\nAt is meeting of 17 November 2000, the DSB agreed that, in accordance with Article 9.1 of\nthe DSU, the panel established on 27 July to examine the complaint by the United States, contained in\n, should also examine the complaint by the European Communities, contained in\n The Panel was constituted on 24 November 2000. Primarily due to requests by the\nParties for more time in making their submissions, the Panel will not be able to issue its report within\nsix months.\nThe Panel, in agreement with the Parties, expe cts to complete its work by the end of the\nsummer."},"processing_date":{"kind":"string","value":"2026-03-15T15:41:01.558845"}}},{"rowIdx":1699,"cells":{"folder_number":{"kind":"string","value":"146"},"case_number":{"kind":"string","value":"175"},"original_filename":{"kind":"string","value":"DS175_SEQ03_Communication_01.pdf"},"new_filename":{"kind":"string","value":"DS175_SEQ03_Communication_01.pdf"},"doc_sequence":{"kind":"number","value":3,"string":"3"},"doc_type":{"kind":"string","value":"Communication"},"doc_type_raw":{"kind":"string","value":"Communication from the Chairman of the Panel"},"doc_class":{"kind":"string","value":"NUMBERED"},"variant":{"kind":"null"},"part_number":{"kind":"number","value":1,"string":"1"},"case_title":{"kind":"string","value":"INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR"},"date":{"kind":"string","value":"8 November 2001"},"header_codes":{"kind":"string","value":"WT/DS146/7; WT/DS175/7"},"agreement_indicators":{"kind":"string","value":""},"complainant":{"kind":"string","value":"['U.S.']"},"respondent":{"kind":"string","value":"['India']"},"third_parties":{"kind":"string","value":"['EU', 'Japan', 'South Korea']"},"dispute_stage":{"kind":"string","value":"Appellate Body"},"agreements_cited":{"kind":"string","value":"Art. III:4, XI:1 GATT 1994Art. 2.1, 2.2 Trade-Related Investment Measures (TRIMs)"},"case_summary":{"kind":"string","value":"The summary below was up-to-date at\n 24 February 2010\n\n See also: One-page summary of key findings of this dispute\nConsultations\nComplaint by the European Communities.\nOn 6 October 1998, the EC requested consultations with\n India concerning certain measures affecting the automotive sector being\n applied by India. The EC stated that the measures include the documents\n entitled “Export and Import Policy, 1997-2002”, “ITC (HS\n Classification) Export and Import Policy 1997-2002”\n (“Classification”), and “Public Notice No. 60 (PN/97-02) of\n 12 December 1997, Export and Import Policy April 1997-March 2002”,\n and any other legislative or administrative provision implemented or\n consolidated by these policies, as well as MoUs signed by the Indian\n Government with certain manufacturers of automobiles. The EC contended\n that:\nOn 1 May 1999, the United States requested\n consultations (WT/DS175) with India in respect of certain Indian measures\n affecting trade and investment in the motor vehicle sector. The United\n States contended that the measures in question required manufacturing\n firms in the motor vehicle sector to:\nAccording to the United States, these measures were\n enforceable under Indian law and rulings, and manufacturing firms in the\n motor vehicle sector must comply with these requirements in order to\n obtain Indian import licenses for certain motor vehicle parts and\n components. The United States considered that these measures violate the\n obligations of India under Articles III and XI of GATT 1994, and Article 2\n of the TRIMS Agreement.\nOn 15 May 2000, the US requested the establishment of a\n panel. At its meeting on 19 June 2000, the DSB deferred the establishment\n of a Panel.\n\nPanel and Appellate Body proceedings\nFurther to a second request to establish a panel by the US,\n the DSB established a panel at its meeting on 27 July 2000. The EC, Japan\n and Korea reserved their third-party rights.\nOn 12 October 2000, the EC also requested the\n establishment of a panel. At its meeting on 23 October 2000, the DSB\n deferred the establishment of a Panel. Further to a second request by the\n EC, the DSB established a panel at its meeting of 17 November 2000. Since\n a panel had already been established with a similar mandate in the\n framework of the above-mentioned case WT/DS175, the DSB decided to join\n the panel with the already established panel in that case pursuant to\n Article 9.1 of the DSU. Japan reserved its third-party rights. On 14\n November 2000, the US requested the Director-General to determine the\n composition of the Panel. On 24 November 2000, the Panel was composed.\nOn 21 December 2001, the Panel circulated its report to\n the Members. The Panel concluded that:\nThe Panel recommended that the DSB requests India to\n bring its measures into conformity with its obligations under the WTO\n Agreements.\nOn 31 January 2002, India appealed the above Panel\n Report. In particular, India sought review of the following Panel’s\n conclusion on the grounds that they are in error and based upon erroneous\n findings on issues of law and related legal instruments:\nOn 14 March 2002, India withdrew its appeal. Further to\n India’s\n withdrawal of its appeal, the Appellate Body issued a short Report\n outlining the procedural history of the case. At the DSB meeting on 5\n April 2002, the US commended India’s decision to withdraw its appeal and\n shared some of India’s reservations with regard to Section VIII of the\n Panel Report. The EC considered that the Panel’s findings were justified.\n Despite its decision to withdraw its appeal as a result of the\n introduction of its new auto policy, India indicated that the findings\n contained in Section VIII were outside of the Panel’s terms of reference\n and were both factually and legally incorrect. India requested that the\n DSB adopt only a part of the Panel Report and consider the adoption of\n Section VIII only at its next meeting. The EC responded that the Reports\n should be adopted unconditionally by the parties, thus there was no\n justification for India’s request. The DSB proceeded with the adoption in\n full of the Appellate Body and Panel reports.\n\nImplementation of adopted reports\nOn 2 May 2002, India informed the DSB that it would\n\t\t need a reasonable period of time to implement the recommendations and\n\t\t rulings of the DSB and that it was ready to enter into discussions with\n\t the EC and the US in this regard.\nOn 18 July 2002, the parties informed the DSB that they\n had mutually agreed that the reasonable period of time to implement the\n recommendations and rulings of the DSB, shall be five months, that is from\n 5 April 2002 to 5 September 2002.\nOn 6 November 2002, India informed the DSB that it had fully complied\n with the recommendations of the DSB in this dispute by issuing Public\n Notice No. 31 on 19 August 2002 terminating the trade balancing\n requirement. India also informed that earlier it had removed the\n indigenization requirement vide Public Notice No. 30 on 4 September 2001."},"page_count":{"kind":"number","value":1,"string":"1"},"clean_text":{"kind":"string","value":"INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR\nCommunication from the Chairman of the Panel\nThe following communication, dated 5 November 2001, addressed to the Dispute Settlement\nBody (DSB), is circulated in accordance with Article 12.9 of the Dispute Settlement\nUnderstanding (DSU).\nArticle 12.8 of the Understanding on Rules and Procedures Governing the Settlement of\nDisputes (DSU) provides that the period in which a panel shall conduct its examination, from the date\nthat the composition and terms of reference of the panel have been agreed upon until the date the final\nreport is issued to the parties to the dispute, shall, as a general rule, not exceed six months.\nArticle 12.9 states that when a panel considers that it cannot issue its report within six\nmonths, it shall inform the Dispute Settlement Body (DSB) in writing of the reasons for the delay\ntogether with an estimate of the period within which it will issue its report.\nAt its meeting of 17 November 2000, the DSB agreed that, in accordance with Article 9.1 of\nthe DSU, the panel established on 27 July to examine the complaint by the United States, contained in\nWT/DS/175/4, should also examine the complain t by the European Communities, contained in\nWT/DS/146/4. The Panel was constituted on 24 November 2000.\nWhile the Panel had hoped to complete its work by the end of summer (see WT/DS/146/6;\nWT/DS/175/6), it has not, due to various scheduling delays, been able to do so. The Panel expects that\nthe final report will be available for circulation by the end of the third week of December."},"processing_date":{"kind":"string","value":"2026-03-15T15:41:01.559304"}}}],"truncated":false,"partial":false},"paginationData":{"pageIndex":16,"numItemsPerPage":100,"numTotalItems":9414,"offset":1600,"length":100}},"jwt":"eyJhbGciOiJFZERTQSJ9.eyJyZWFkIjp0cnVlLCJwZXJtaXNzaW9ucyI6eyJyZXBvLmNvbnRlbnQucmVhZCI6dHJ1ZX0sImlhdCI6MTc3OTUxNjkyMiwic3ViIjoiL2RhdGFzZXRzL2RlYW4yMjAyOS9XVE9fRG9jcyIsImV4cCI6MTc3OTUyMDUyMiwiaXNzIjoiaHR0cHM6Ly9odWdnaW5nZmFjZS5jbyJ9.C4uLmycE93fpuMftSQr3UKdh8A6wz-kDE-WalEkjoMfPWqMVzzcQ-BIb2ejvucQlSBrs7owURG3_tQHbXr1OAQ","displayUrls":true,"splitSizeSummaries":[{"config":"default","split":"train","numRows":9414,"numBytesParquet":235278256}]},"discussionsStats":{"closed":0,"open":1,"total":1},"fullWidth":true,"hasGatedAccess":true,"hasFullAccess":true,"isEmbedded":false,"savedQueries":{"community":[],"user":[]}}">
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136 | 162 | DS162_SEQ33_Status_Report_Add28.pdf | DS162_SEQ33_Status_Report_Add28.pdf | 33 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – ANTI-DUMPING ACT OF 1916 | 9 July 2004 | WT/DS136/14/Add.28; WT/DS162/17/Add.28 | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 1 | UNITED STATES – ANTI-DUMPING ACT OF 1916
Status Report by the United States
Addendum
The following communication, dated 8 July 2004, from the delegation of the United States to
the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.6 of the DSU.
Status Report Regarding Implementation ... | 2026-03-15T15:40:31.666125 | |
136 | 162 | DS162_SEQ34_Status_Report_Add29.pdf | DS162_SEQ34_Status_Report_Add29.pdf | 34 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – ANTI-DUMPING ACT OF 1916 | 23 August 2004 | WT/DS136/14/Add.29; WT/DS162/17/Add.29 | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 1 | UNITED STATES – ANTI-DUMPING ACT OF 1916
Status Report by the United States
Addendum
The following communication, dated 19 August 2004, from the delegation of the
United States to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.6
of the DSU.
Status Report Regarding Implementati... | 2026-03-15T15:40:31.666664 | |
136 | 162 | DS162_SEQ35_Status_Report_Add30.pdf | DS162_SEQ35_Status_Report_Add30.pdf | 35 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – ANTI-DUMPING ACT OF 1916 | 17 September 2004 | WT/DS136/14/Add.30; WT/DS162/17/Add.30 | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 1 | UNITED STATES – ANTI-DUMPING ACT OF 1916
Status Report by the United States
Addendum
The following communication, dated 16 Sept ember 2004, from the delegation of the
United States to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.6
of the DSU.
Status Report Regarding Implemen... | 2026-03-15T15:40:31.667203 | |
136 | 162 | DS162_SEQ36_Status_Report_Add31.pdf | DS162_SEQ36_Status_Report_Add31.pdf | 36 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – ANTI-DUMPING ACT OF 1916 | 8 October 2004 | WT/DS136/14/Add.31; WT/DS162/17/Add.31 | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 1 | UNITED STATES – ANTI-DUMPING ACT OF 1916
Status Report by the United States
Addendum
The following communication, dated 7 October 2004, from the delegation of the
United States to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.6
of the DSU.
Status Report Regarding Implementati... | 2026-03-15T15:40:31.667742 | |
136 | 162 | DS162_SEQ37_Status_Report_Add32.pdf | DS162_SEQ37_Status_Report_Add32.pdf | 37 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – ANTI-DUMPING ACT OF 1916 | 11 November 2004 | WT/DS136/14/Add.32; WT/DS162/17/Add.32 | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 1 | UNITED STATES – ANTI-DUMPING ACT OF 1916
Status Report by the United States
Addendum
The following communication, dated 10 November 2004, from the delegation of the
United States to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.6
of the DSU.
Status Report Regarding Implementa... | 2026-03-15T15:40:31.668403 | |
136 | 162 | DS162_SEQ38_Appellate_Body_Report_And_Panel_Report.pdf | DS162_SEQ38_Appellate_Body_Report_And_Panel_Report.pdf | 38 | Appellate_Body_Report_And_Panel_Report | Appellate Body Report and Panel Reports Action by the Dispute Settlement Body | AB_REPORT | null | null | UNITED STATES - ANTI-DUMPING ACT OF 1916 | 2 October 2000 | WT/DS136/8; WT/DS162/11; WT/DS162/AB/R; WT/DS136/R; WT/DS162/R | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 1 | UNITED STATES - ANTI-DUMPING ACT OF 1916
Appellate Body Report and Panel Reports
Action by the Dispute Settlement Body
At its meeting on 26 September 2000, the Dispute Settlement Body adopted the Appellate
Body report on "" (WT/DS136/ AB/R, )
and the panel reports ( and Corr.1, and and Add.1), as upheld by the
Appellat... | 2026-03-15T15:40:31.668824 | |
136 | 162 | DS162_SEQ39_Request_For_Arbitration.pdf | DS162_SEQ39_Request_For_Arbitration.pdf | 39 | Request_For_Arbitration | Request by the European Communities and Japan for Arbitration under Article 21.3(c) of the DSU | ARBITRATION | null | null | UNITED STATES – ANTI-DUMPING ACT OF 1916 | 21 November 2000 | WT/DS136/9; WT/DS162/12 | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 1 | UNITED STATES – ANTI-DUMPING ACT OF 1916
Request by the European Communities and Japan
for Arbitration under Article 21.3(c) of the DSU
The following communication, dated 17 November 2000, from the Permanent Delegation of
the European Commission and the Permanent Mission of Japan to the Chairman of the Dispute
Settleme... | 2026-03-15T15:40:31.669151 | |
136 | 162 | DS162_SEQ40_Arbitration_Award.pdf | DS162_SEQ40_Arbitration_Award.pdf | 40 | Arbitration_Award | Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes Award of the Arbitrator A.V. Ganesan | ARBITRATION | null | null | UNITED STATES – ANTI-DUMPING ACT OF 1916 | 28 February 2001 | WT/DS136/11; WT/DS162/14 | ['Japan'] | ['U.S.'] | ['EU', 'India'] | Appellate Body | 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 | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See also DS136)
On 10 February 1999, Japan requested consultations with the United States in respect of the US Anti-Dumping Act of 1916, 15 U.S.C. 72 (19... | 17 | UNITED STATES – ANTI-DUMPING ACT OF 1916
Arbitration
under Article 21.3(c) of the
Understanding on Rules and Procedures
Governing the Settlement of Disputes
Award of the Arbitrator
A.V. Ganesan
I. Introduction
1. On 26 September 2000, the Dispute Settlement Body (the "DSB") adopted the Panel Reports
in (" United State... | 2026-03-15T15:40:31.676578 | |
137 | 137 | DS137_SEQ01_Request_For_Consultations.pdf | DS137_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations by Canada | NUMBERED | null | null | EUROPEAN COMMUNITIES – MEASURES AFFECTING IMPORTS OF WOOD OF CONIFERS FROM CANADA | 24 June 1998 | WT/DS137/1; G/L/246; G/SPS/GEN/84; G/TBT/D/17 | General Council; Sanitary and Phytosanitary Measures (SPS); Technical Barriers to Trade (TBT) | ['Canada'] | ['EU'] | [] | Consultation | Art. I, III, XI GATT 1994Art. 2, 3, 4, 5, 6 Sanitary and Phytosanitary Measures (SPS)Art. 2 Technical Barriers to Trade (TBT) | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by Canada.
On 17 June 1998, Canada requested
consultations with the EC in respect of certain measures concerning the
importation into the EC market of wood of conifers from Canada. The
measures include, but ar... | 1 | EUROPEAN COMMUNITIES – MEASURES AFFECTING IMPORTS
OF WOOD OF CONIFERS FROM CANADA
Request for Consultations by Canada
The following communication, dated 17 June 1998, from the Permanent Mission of Canada
to the Permanent Delegation of the European Commission and to the Dispute Settlement Body, is
circulated in accordan... | 2026-03-15T15:40:31.686609 |
138 | 138 | DS138_SEQ01_Request_For_Consultations.pdf | DS138_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations by the European Communities | NUMBERED | null | null | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 6 July 1998 | WT/DS138/1; G/SCM/D26/1 | Subsidies and Countervailing Measures (SCM) | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 3 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS
ORIGINATING IN THE UNITED KINGDOM
Request for Consultations by the European Communities
The following communication, dated 12 June 1998, from the Permanent Delegation of the
European Commission to the Perman... | 2026-03-15T15:40:35.258269 |
138 | 138 | DS138_SEQ02_Request_To_Join_Consultations.pdf | DS138_SEQ02_Request_To_Join_Consultations.pdf | 2 | Request_To_Join_Consultations | Request to Join Consultations Communication by Canada | NUMBERED | null | null | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 21 July 1998 | WT/DS138/2 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS
ORIGINATING IN THE UNITED KINGDOM
Request to Join Consultations
Communication by Canada
The following communication, dated 16 July 1998, from the Permanent Mission of Canada to
the Permanent Mission of the U... | 2026-03-15T15:40:35.258854 | |
138 | 138 | DS138_SEQ03_Request_For_Establishment_Of_Panel_00.pdf | DS138_SEQ03_Request_For_Establishment_Of_Panel_00.pdf | 3 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by the European Communities | NUMBERED | null | 0 | UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 14 January 1999 | WT/DS138/3 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS
ORIGINATING IN THE UNITED KINGDOM
Request for the Establishment of a Panel by the European Communities
The following communication, dated 14 January 1999, from the Permanent Delegation of the
European Commis... | 2026-03-15T15:40:35.259611 | |
138 | 138 | DS138_SEQ04_Panel_Composition.pdf | DS138_SEQ04_Panel_Composition.pdf | 4 | Panel_Composition | Constitution of the Panel Established at the Request of the European Communities | NUMBERED | null | null | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 25 March 1999 | WT/DS138/4; WT/DS138/3; WT/DS138/3/Corr.; WT/DS138/3/Corr. | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
Constitution of the Panel Established at the Request of the European Communities
1. At its meeting on 17 February 1999 the Dispute Settlement Body (DSB) established a panel
... | 2026-03-15T15:40:35.259962 | |
138 | 138 | DS138_SEQ05_Notification_Of_Appeal.pdf | DS138_SEQ05_Notification_Of_Appeal.pdf | 5 | Notification_Of_Appeal | Notification of an Appeal by the United States under paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) | NUMBERED | null | null | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 27 January 2000 | WT/DS138/5 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 2 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
Notification of an Appeal by the United States under
paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU)
The fo... | 2026-03-15T15:40:35.260728 | |
138 | 138 | DS138_SEQ06_Communication_00.pdf | DS138_SEQ06_Communication_00.pdf | 6 | Communication | Communication from the Appellate Body | NUMBERED | null | 0 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 27 March 2000 | WT/DS138/6 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
Communication from the Appellate Body
The following communication, dated 23 March 2000, from the Chairman of the Appellate
Body addressed to the Chairman of the Dispute Sett... | 2026-03-15T15:40:35.261230 | |
138 | 138 | DS138_SEQ07_Communication_01.pdf | DS138_SEQ07_Communication_01.pdf | 7 | Communication | Communication from the Appellate Body | NUMBERED | null | 1 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 4 April 2000 | WT/DS138/7 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
Communication from the Appellate Body
The following communication, dated 30 March 2000, from the Chairman of the Appellate
Body addressed to the Chairman of the Dispute Sett... | 2026-03-15T15:40:35.261696 | |
138 | 138 | DS138_SEQ08_Communication_02.pdf | DS138_SEQ08_Communication_02.pdf | 8 | Communication | Communication from the Appellate Body | NUMBERED | null | 2 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 10 May 2000 | WT/DS138/8 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
Communication from the Appellate Body
The following communication, dated 10 May 2000, from Mr. Florentino Feliciano, Chairman
of the Appellate Body, addressed to the Chairma... | 2026-03-15T15:40:35.262014 | |
138 | 138 | DS138_SEQ09_Request_For_Establishment_Of_Panel_01.pdf | DS138_SEQ09_Request_For_Establishment_Of_Panel_01.pdf | 9 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by the European Communities Corrigendum Document WT/DS138/3 is amended by adding after paragraph 3 the following paragraph: In particular, no attempt has ever been made in the final determinations to justify or rationalise what benefits continue to result from subsidies followin... | NUMBERED | null | 1 | UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 25 January 1999 | WT/DS138/3/Corr.; WT/DS138/3 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | 1
UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS
ORIGINATING IN THE UNITED KINGDOM
Request for the Establishment of a Panel by the European Communities
Corrigendum
Document is amended by adding after paragraph 3 the following paragraph:
In particular, n... | 2026-03-15T15:40:35.262292 | |
138 | 138 | DS138_SEQ10_Report_Of_Panel_00.pdf | DS138_SEQ10_Report_Of_Panel_00.pdf | 10 | Report_Of_Panel | REPORT OF THE PANEL | PANEL_REPORT | null | 0 | UNITED STATES – IMPOSITION OF COUNTERV AILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM REPORT OF THE PANEL | 23 December 1999 | WT/DS138/R | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 51 | UNITED STATES – IMPOSITION OF COUNTERV AILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
REPORT OF THE PANEL
The report of the Panel on United States – Imposition of Countervailing Duties on Certain Hot-Rolled
Lead and Bismuth Carbon Steel Products Originating ... | 2026-03-15T15:40:35.293693 | |
138 | 138 | DS138_SEQ11_Report_Of_Panel_01.pdf | DS138_SEQ11_Report_Of_Panel_01.pdf | 11 | Report_Of_Panel | III. THE ECONOMICS OF PRIVATIZATION .......................................................................... 60 A. H OW MARKETS VALUE COMPANIES AND WHY PRIVATIZATION IN AN ARM’S- LENGTH MARKET-BASED SALE NECESSARILY EXTINGUISHES PRIOR SUBSIDIES TO THE STATE-OWNED FIRM..................................................... | PANEL_REPORT | null | 1 | PRIVATIZATION ON SUBSIDIES PREVIOUSLY BESTOWED ON A STATE-OWNED ENTERPRISE............................................................................................................................ 50 B. H ISTORY OF US IMPOSITION OF US COUNTERVAILING DUTIES ON CERTAIN LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING... | 27 April 1999 | WT/DS138/R | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 245 | I. INTRODUCTION
1. This dispute arises under Articles 1.1(b), 10, 14, and 19 of the WTO Agreement on Subsidies
and Countervailing Measures (“ASCM”). The dispute concerns the failure of the US authorities to
recognize the impact of an arm’s-length and fair market value privatization transaction on subsidies
granted to a... | 2026-03-15T15:40:35.450091 | |
138 | 138 | DS138_SEQ12_Report_Of_Panel_Corr2.pdf | DS138_SEQ12_Report_Of_Panel_Corr2.pdf | 12 | Report_Of_Panel | Corrigendum The Note by the Secretariat at the foot of page 1 should read: "This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days …" and not 30 days as shown. | PANEL_REPORT | Corr | null | UNITED STATES – IMPOSITION OF COUNTERV AILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM REPORT OF THE PANEL | 25 February 2000 | WT/DS138/R/Corr.2 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES – IMPOSITION OF COUNTERV AILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
REPORT OF THE PANEL
Corrigendum
The Note by the Secretariat at the foot of page 1 should read:
"This Panel Report shall be adopted by the Dispute Settlement Body (DSB) with... | 2026-03-15T15:40:35.450367 | |
138 | 138 | DS138_SEQ13_Appellate_Body_Report_And_Panel_Report.pdf | DS138_SEQ13_Appellate_Body_Report_And_Panel_Report.pdf | 13 | Appellate_Body_Report_And_Panel_Report | Appellate Body Report and Panel Report Action by the Dispute Settlement Body On 7 June 2000, the Dispute Settlement Body adopted the Appellate Body report on "United States - Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom " (WT/DS138/AB... | AB_REPORT | null | null | UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 21 June 2000 | WT/DS138/9; WT/DS138/AB/R; WT/DS138/R | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
Appellate Body Report and Panel Report
Action by the Dispute Settlement Body
On 7 June 2000, the Dispute Settlement Body adopted the Appellate Body report on
" " () and the ... | 2026-03-15T15:40:35.450902 | |
138 | 138 | DS138_SEQ14_Appellate_Body_Report_And_Panel_Report_Corr.pdf | DS138_SEQ14_Appellate_Body_Report_And_Panel_Report_Corr.pdf | 14 | Appellate_Body_Report_And_Panel_Report | Appellate Body Report and Panel Report Action by the Dispute Settlement Body Corrigendum In the fourth line "as modified by the Appellate Body report." should read "as upheld by the Appellate Body report." ÉTATS-UNIS - IMPOSITION DE DROITS COMPENSATEURS SUR CERTAINS PRODUITS EN ACIER AU CARBONE, PLOMB ET BISMUTH LAMINÉ... | AB_REPORT | Corr | null | UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM | 27 June 2000 | WT/DS138/9/Corr.1 | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 1 | UNITED STATES - IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
Appellate Body Report and Panel Report
Action by the Dispute Settlement Body
Corrigendum
In the fourth line "as modified by the Appellate Body report." should read "as uphel... | 2026-03-15T15:40:35.451278 | |
138 | 138 | DS138_SEQ15_Report_Of_Appellate_Body.pdf | DS138_SEQ15_Report_Of_Appellate_Body.pdf | 15 | Report_Of_Appellate_Body | Report of the Appellate Body | AB_REPORT | null | null | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL PRODUCTS ORIGINATING IN THE UNITED KINGDOM AB-2000-1 | 10 May 2000 | WT/DS138/AB/R | ['EU'] | ['U.S.'] | ['Brazil', 'Mexico'] | Consultation | Art. 1.1(b), 10, 14, 19.4 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 30 June 1998,
the EC requested consultations with the US in respect of the alleged
imposition of countervailing duties on ... | 32 | UNITED STATES – IMPOSITION OF COUNTERVAILING DUTIES ON
CERTAIN HOT-ROLLED LEAD AND BISMUTH CARBON STEEL
PRODUCTS ORIGINATING IN THE UNITED KINGDOM
AB-2000-1
Report of the Appellate Body
APPELLATE BODY
United States – Imposition of Countervailing Duties
on Certain Hot-Rolled Lead and Bismuth Carbon
Steel Products Origi... | 2026-03-15T15:40:35.463687 | |
139 | 139 | DS139_SEQ01_Request_For_Consultations.pdf | DS139_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations by Japan | NUMBERED | null | null | CANADA – CERTAIN AUTOMOTIVE INDUSTRY MEASURES | 8 July 1998 | WT/DS139/1; G/L/250; G/TRIMS/D/12; G/SCM/D27/1; S/L/58 | General Agreement on Trade in Services (GATS); General Council; Subsidies and Countervailing Measures (SCM); Trade-Related Investment Measures (TRIMS) | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 2 | CANADA – CERTAIN AUTOMOTIVE INDUSTRY MEASURES
Request for Consultations by Japan
The following communication, dated 3 July 1998, from the Permanent Mission of Japan to
the Permanent Mission of Canada and to the Dispute Settlement Body, is circulated in accordance
with Article 4.4 of the DSU.
Upon instruction from my au... | 2026-03-15T15:40:35.996928 |
139 | 139 | DS139_SEQ02_Request_For_Establishment_Of_Panel.pdf | DS139_SEQ02_Request_For_Establishment_Of_Panel.pdf | 2 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by Japan | NUMBERED | null | null | CANADA – CERTAIN AUTOMOTIVE INDUSTRY MEASURES | 13 November 1998 | WT/DS139/2 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 3 | CANADA – CERTAIN AUTOMOTIVE INDUSTRY MEASURES
Request for the Establishment of a Panel by Japan
The following communication, dated 12 November 1998, from the Permanent Mission of
Japan to the Chairman of the Dispute Settlement Body, is circulated in accordance with Article 6.2 of
the DSU.
On 3 July 1998, the Government... | 2026-03-15T15:40:35.998356 | |
139 | 139 | DS139_SEQ03_Note_By_Secretariat.pdf | DS139_SEQ03_Note_By_Secretariat.pdf | 3 | Note_By_Secretariat | Constitution of the Panel Established at the Request of Japan and the European Communities Note by the Secretariat | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 25 March 1999 | WT/DS139/3; WT/DS142/3; WT/DS139/2; WT/DS142/2 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Constitution of the Panel Established at the Request of
Japan and the European Communities
Note by the Secretariat
1. At its meeting on 1 February 1999, the DSB established panels pursuant to requests by Japan
() and the European Communities (). The DSB agreed... | 2026-03-15T15:40:35.998992 | |
139 | 139 | DS139_SEQ04_Communication_00.pdf | DS139_SEQ04_Communication_00.pdf | 4 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 1 October 1999 | WT/DS139/4; WT/DS142/4 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Communication from the Chairman of the Panel
The following communication, dated 30 September 1999, addressed to the Dispute Settlement
Body, is circulated in accordance with Article 12.9 of the DSU.
Article 12.8 of the DSU stipulates that the period in which a... | 2026-03-15T15:40:35.999397 | |
139 | 139 | DS139_SEQ05_Notification_Of_Appeal.pdf | DS139_SEQ05_Notification_Of_Appeal.pdf | 5 | Notification_Of_Appeal | Notification of an Appeal by Canada under paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 2 March 2000 | WT/DS139/5; WT/DS142/5 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 2 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Notification of an Appeal by Canada under
paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU)
The following notification, dated 2 March 2000, sent by Canada to the Dispute Settlement
Body (DSB), is ... | 2026-03-15T15:40:36.000043 | |
139 | 139 | DS139_SEQ06_Communication_01.pdf | DS139_SEQ06_Communication_01.pdf | 6 | Communication | Communication from the Appellate Body | NUMBERED | null | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 28 April 2000 | WT/DS139/6; WT/DS142/6 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Communication from the Appellate Body
The following communication, dated 28 April 2000, from the Chairman of the Appellate
Body addressed to the Chairman of the Dispute Settlement Body, is circulated in accordance with
Article 17.5 of the Understanding on Rule... | 2026-03-15T15:40:36.000467 | |
139 | 139 | DS139_SEQ07_Communication_02.pdf | DS139_SEQ07_Communication_02.pdf | 7 | Communication | Communication from the Appellate Body | NUMBERED | null | 2 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 30 May 2000 | WT/DS139/7; WT/DS142/7; WT/DS139/AB/R; WT/DS142/AB/R. | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Communication from the Appellate Body
The following communication, dated 30 May 2000, from Mr. Florentino Feliciano, Chairman
of the Appellate Body, addressed to the Chairman of the Dispute Settlement Body, is circulated in
accordance with Article 17.5 of the ... | 2026-03-15T15:40:36.000747 | |
139 | 139 | DS139_SEQ08_Communication_03.pdf | DS139_SEQ08_Communication_03.pdf | 8 | Communication | Communication from Canada | NUMBERED | null | 3 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 19 July 2000 | WT/DS139/9; WT/DS142/9 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
Communication from Canada
The following communication, dated 19 July 2000, from the Permanent Mission of Canada to
the Chairman of the Dispute Settlement Body, is circulated at the request of Canada.
As you will recall, on 19 June 2000, the DSB adopted the pan... | 2026-03-15T15:40:36.001080 | |
139 | 139 | DS139_SEQ09_Appointment_Of_Arbitrator.pdf | DS139_SEQ09_Appointment_Of_Arbitrator.pdf | 9 | Appointment_Of_Arbitrator | Surveillance of Implementation of Recommendations and Rulings Appointment of Arbitrator under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 23 August 2000 | WT/DS139/11; WT/DS142/11 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
Surveillance of Implementation of Recommendations and Rulings
Appointment of Arbitrator under Article 21.3(c) of the
Understanding on Rules and Procedures Governing the Settlement of Disputes
The following communication, dated 23 August 2000, from the Permanen... | 2026-03-15T15:40:36.001680 | |
139 | 139 | DS139_SEQ10_Appellate_Body_Report_And_Panel_Report.pdf | DS139_SEQ10_Appellate_Body_Report_And_Panel_Report.pdf | 10 | Appellate_Body_Report_And_Panel_Report | Appellate Body Report and Panel Report Action by the Dispute Settlement Body On 19 June 2000, the Dispute Settlement Body adopted the Appellate Body report on "Canada - Certain Measures Affecting the Automotive Industry " (WT/DS139/AB/R- WT/DS142/AB/R) and the panel report (WT/DS139/ R-WT/DS142/R), as modified by the A... | AB_REPORT | null | null | CANADA - CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 22 June 2000 | WT/DS139/8; WT/DS142/8; WT/DS139/AB/R-; WT/DS142/AB/R; WT/DS142/R | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA - CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
Appellate Body Report and Panel Report
Action by the Dispute Settlement Body
On 19 June 2000, the Dispute Settlement Body adopted the Appellate Body report on
" " (
) and the panel report (WT/DS139/ R-), as modified by the Appellate
Body report. The panel repo... | 2026-03-15T15:40:36.002179 | |
139 | 139 | DS139_SEQ11_Report_Of_Appellate_Body.pdf | DS139_SEQ11_Report_Of_Appellate_Body.pdf | 11 | Report_Of_Appellate_Body | Report of the Appellate Body | AB_REPORT | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY AB-2000-2 | 31 May 2000 | WT/DS139/AB/R; WT/DS142/AB/R | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 66 | CANADA – CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
AB-2000-2
Report of the Appellate Body
APPELLATE BODY
Canada – Certain Measures Affecting the
Automotive Industry
Canada, Appellant/Appellee
Japan, Appellant/Appellee
European Communities, Appellant/Appellee
Korea, Third Participant
United States, Third Parti... | 2026-03-15T15:40:36.030604 | |
139 | 139 | DS139_SEQ12_Request_For_Arbitration.pdf | DS139_SEQ12_Request_For_Arbitration.pdf | 12 | Request_For_Arbitration | Request by the European Communities and Japan for Arbitration under Article 21.3(c) of the DSU | ARBITRATION | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 8 August 2000 | WT/DS139/10; WT/DS142/10 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Request by the European Communities and Japan for Arbitration
under Article 21.3(c) of the DSU
The following communication, dated 4 August 2000, from the Permanent Delegation of the
European Commission and the Permanent Mission of Japan to the Chairman of the ... | 2026-03-15T15:40:36.031060 | |
139 | 142 | DS142_SEQ01_Understanding.pdf | DS142_SEQ01_Understanding.pdf | 1 | Understanding | Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 3 October 2000 | WT/DS139/13; WT/DS142/13 | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Arbitration under Article 21.3(c) of the Understanding
on Rules and Procedures Governing the Settlement of Disputes
The following communication, dated 3 October 2000, from the Arbitrator,
Mr. Julio Lacarte-Muró, to the Chairman of the Dispute Settlement Body, ... | 2026-03-15T15:40:41.723658 | |
139 | 142 | DS142_SEQ02_Report_Of_Panel.pdf | DS142_SEQ02_Report_Of_Panel.pdf | 2 | Report_Of_Panel | Report of the Panel | PANEL_REPORT | null | null | 11 February 2000 | WT/DS139/R; WT/DS142/R | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 431 | Canada – Certain Measures Affecting
the Automotive Industry
Report of the Panel
The report of the Panel on " Canada – Certain Measures Affecting the Automotive Industry" is being
circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted
document from 11 February 2000 pursuant to ... | 2026-03-15T15:40:41.980840 | ||
139 | 142 | DS142_SEQ03_Arbitration_Award.pdf | DS142_SEQ03_Arbitration_Award.pdf | 3 | Arbitration_Award | Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes Award of the Arbitrator Julio Lacarte-Muró | ARBITRATION | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 4 October 2000 | WT/DS139/12; WT/DS142/12 | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 18 | CANADA – CERTAIN MEASURES AFFECTING THE
AUTOMOTIVE INDUSTRY
Arbitration
under Article 21.3(c) of the
Understanding on Rules and Procedures
Governing the Settlement of Disputes
Award of the Arbitrator
Julio Lacarte-Muró
WT/DS/142/12
I. Introduction
1. On 19 June 2000, the Dispute Settlement Body (the "DSB") adopted th... | 2026-03-15T15:40:41.989014 | |
140 | 140 | DS140_SEQ01_Request_For_Consultations.pdf | DS140_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations from India | NUMBERED | null | null | EUROPEAN COMMUNITIES – ANTI-DUMPING INVESTIGATIONS REGARDING UNBLEACHED COTTON FABRICS FROM INDIA | 7 August 1998 | WT/DS140/1; G/L/252; G/ADP/D12/1 | Anti-Dumping Practices (ADP); General Council | ['India'] | ['EU'] | [] | Consultation | Art. 2, 3, 4, 5, 6, 7, 9, 12, 15 Anti-dumpingArt. I, VI GATT 1994 | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of alleged repeated recourse by the
EC to anti-dumping investigations on unbleached cotton fabrics (UCF), from
India. India considered... | 2 | EUROPEAN COMMUNITIES – ANTI-DUMPING INVESTIGATIONS
REGARDING UNBLEACHED COTTON FABRICS FROM INDIA
Request for Consultations from India
The following communication, dated 3 August 1998, from the Permanent Mission of India to
the Permanent Delegation of the European Commission and the Dispute Settlement Body, is
circulat... | 2026-03-15T15:40:42.012075 |
140 | 140 | DS140_SEQ02_Request_To_Join_Consultations.pdf | DS140_SEQ02_Request_To_Join_Consultations.pdf | 2 | Request_To_Join_Consultations | Request to Join Consultations | NUMBERED | null | null | EUROPEAN COMMUNITIES – ANTI-DUMPING INVESTIGATIONS REGARDING UNBLEACHED COTTON FABRICS FROM INDIA | 25 August 1998 | WT/DS140/2 | ['India'] | ['EU'] | [] | Consultation | Art. 2, 3, 4, 5, 6, 7, 9, 12, 15 Anti-dumpingArt. I, VI GATT 1994 | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of alleged repeated recourse by the
EC to anti-dumping investigations on unbleached cotton fabrics (UCF), from
India. India considered... | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING INVESTIGATIONS
REGARDING UNBLEACHED COTTON FABRICS FROM INDIA
Request to Join Consultations
The following communication, dated 17 August 1998, from the Permanent Mission of
Pakistan to the Permanent Delegation of the European Commission and to the Dispute Settlement
Body, is circulat... | 2026-03-15T15:40:42.012420 | |
141 | 141 | DS141_SEQ01_Request_For_Consultations_00.pdf | DS141_SEQ01_Request_For_Consultations_00.pdf | 1 | Request_For_Consultations | Request for Consultations from India | NUMBERED | null | 0 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED-LINEN FROM INDIA | 7 August 1998 | WT/DS141/1; G/L/253; G/ADP/D13/1 | Anti-Dumping Practices (ADP); General Council | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 2 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED-LINEN FROM INDIA
Request for Consultations from India
The following communication, dated 3 August 1998, from the Permanent Mission of India to
the Permanent Delegation of the European Commission and the Dispute Settlement Body, is
circulated in ac... | 2026-03-15T15:40:52.255539 |
141 | 141 | DS141_SEQ02_Request_To_Join_Consultations.pdf | DS141_SEQ02_Request_To_Join_Consultations.pdf | 2 | Request_To_Join_Consultations | Request to Join Consultations | NUMBERED | null | null | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED-LINEN FROM INDIA | 25 August 1998 | WT/DS141/2 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED-LINEN FROM INDIA
Request to Join Consultations
The following communication, dated 17 August 1998, from the Permanent Mission of
Pakistan to the Permanent Delegation of the European Commission and to the Dispute Settlement
Body, is circulated in ac... | 2026-03-15T15:40:52.255985 | |
141 | 141 | DS141_SEQ03_Request_For_Establishment_Of_Panel_00.pdf | DS141_SEQ03_Request_For_Establishment_Of_Panel_00.pdf | 3 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by India | NUMBERED | null | 0 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BEDLINEN FROM INDIA | 8 September 1999 | WT/DS141/3 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 4 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BEDLINEN FROM INDIA
Request for the Establishment of a Panel by India
The following communication, dated 7 September 1999, from the Permanent Mission of India
to the Chairman of the Dispute Settlement Body is circulated pursuant to Article 6.2 of the ... | 2026-03-15T15:40:52.258425 | |
141 | 141 | DS141_SEQ04_Note_By_Secretariat_00.pdf | DS141_SEQ04_Note_By_Secretariat_00.pdf | 4 | Note_By_Secretariat | Constitution of the Panel Established at the Request of India Note by the Secretariat | NUMBERED | null | 0 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BEDLINEN FROM INDIA | 24 January 2000 | WT/DS141/4; WT/DS141/3.; WT/DS141/3; WT/DS141/3 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF
COTTON-TYPE BEDLINEN FROM INDIA
Constitution of the Panel Established at the Request of India
Note by the Secretariat
1. At its meeting on 27 October 1999, the Dispute Settlement Body (DSB) established a Panel in
accordance with the request made by India in docum... | 2026-03-15T15:40:52.258961 | |
141 | 141 | DS141_SEQ05_Communication_00.pdf | DS141_SEQ05_Communication_00.pdf | 5 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 23 June 2000 | WT/DS141/5 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Communication from the Chairman of the Panel
The following communication, dated 21 June 2000, addressed to the Dispute Settlement
Body, is circulated in accordance with Article 12.9 of the DSU.
Article 12.8 of the DSU stipulates t... | 2026-03-15T15:40:52.259442 | |
141 | 141 | DS141_SEQ06_Notification_Of_Appeal_00.pdf | DS141_SEQ06_Notification_Of_Appeal_00.pdf | 6 | Notification_Of_Appeal | Notification of an Appeal by the European Communities under paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) | NUMBERED | null | 0 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 1 December 2000 | WT/DS141/6 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Notification of an Appeal by the European Communities
under paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU)
The following notification, dated 1 December 2000, sent ... | 2026-03-15T15:40:52.259914 | |
141 | 141 | DS141_SEQ07_Communication_01.pdf | DS141_SEQ07_Communication_01.pdf | 7 | Communication | Communication from the Appellate Body | NUMBERED | null | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 26 January 2001 | WT/DS141/7 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Communication from the Appellate Body
The following communication, dated 26 January 2001, from the Chairman of the Appellate
Body addressed to the Chairman of the Dispute Settlement Body, is circulated in accordance with
Article 1... | 2026-03-15T15:40:52.260329 | |
141 | 141 | DS141_SEQ08_Communication_02.pdf | DS141_SEQ08_Communication_02.pdf | 8 | Communication | Communication from the Appellate Body | NUMBERED | null | 2 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 28 February 2001 | WT/DS141/8; WT/DS141/AB/R. | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Communication from the Appellate Body
The following communication, dated 28 February 2001, from Mr. Claus-Dieter Ehlermann,
Chairman of the Appellate Body, addressed to the Chairman of the Dispute Settlement Body, is
circulated in... | 2026-03-15T15:40:52.260638 | |
141 | 141 | DS141_SEQ09_Agreement_Art_21_3.pdf | DS141_SEQ09_Agreement_Art_21_3.pdf | 9 | Agreement_Art_21_3 | Agreement under Article 21.3(b) of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 1 May 2001 | WT/DS141/10 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Agreement under Article 21.3(b) of the DSU
The following communication, dated 26 April 2001, from the Permanent Mission of India and
the Permanent Delegation of the European Commission to the Chairman of the Dispute Settlement
Bod... | 2026-03-15T15:40:52.261033 | |
141 | 141 | DS141_SEQ10_Understanding.pdf | DS141_SEQ10_Understanding.pdf | 10 | Understanding | Understanding between India and the European Communities Regarding Procedures under Articles 21 and 22 of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 21 September 2001 | WT/DS141/11 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 2 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Understanding between India and the European Communities
Regarding Procedures under Articles 21 and 22 of the DSU
The following communication, dated 13 September 2001, from the Permanent Mission of
India and the Permanent Delegati... | 2026-03-15T15:40:52.261657 | |
141 | 141 | DS141_SEQ11_Request_For_Consultations_01.pdf | DS141_SEQ11_Request_For_Consultations_01.pdf | 11 | Request_For_Consultations | Recourse to Article 21.5 of the DSU by India Request for Consultations | NUMBERED | null | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 14 March 2002 | WT/DS141/12 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 3 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Request for Consultations
The following communication, dated 8 March 2002, from the Permanent Mission of India to
the Permanent Delegation of the European Commission and to the Chairman... | 2026-03-15T15:40:52.263555 | |
141 | 141 | DS141_SEQ12_Request_For_Establishment_Of_Panel_01.pdf | DS141_SEQ12_Request_For_Establishment_Of_Panel_01.pdf | 12 | Request_For_Establishment_Of_Panel | Recourse to Article 21.5 of the DSU by India Request for the Establishment of a Panel | NUMBERED | null | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 5 April 2002 | WT/DS141/13 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 4 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Request for the Establishment of a Panel
The following communication, dated 4 April 2002, from the Permanent Mission of India to
the Chairman of the Dispute Settlement Body, is circulat... | 2026-03-15T15:40:52.265836 | |
141 | 141 | DS141_SEQ13_Request_For_Establishment_Of_Panel_Rev.pdf | DS141_SEQ13_Request_For_Establishment_Of_Panel_Rev.pdf | 13 | Request_For_Establishment_Of_Panel | Recourse to Article 21.5 of the DSU by India Request for the Establishment of a Panel Revision | NUMBERED | Rev | null | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 8 May 2002 | WT/DS141/13/Rev.1 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 3 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Request for the Establishment of a Panel
Revision
The following communication, dated 7 May 2002, from the Permanent Mission of India to the
Chairman of the Dispute Settlement Body, is c... | 2026-03-15T15:40:52.267960 | |
141 | 141 | DS141_SEQ14_Note_By_Secretariat_01.pdf | DS141_SEQ14_Note_By_Secretariat_01.pdf | 14 | Note_By_Secretariat | Recourse by India to Article 21.5 of the DSU Constitution of the Panel established Note by the Secretariat | NUMBERED | null | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON TYPE BED LINEN FROM INDIA | 02 July 2002 | WT/DS141/14; WT/DS141/13/Rev.1; WT/DS141/13/Rev.1 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON
IMPORTS OF COTTON TYPE BED LINEN FROM INDIA
Recourse by India to Article 21.5 of the DSU
Constitution of the Panel established
Note by the Secretariat
1. At its meeting on 22 May 2002, the DSB referred this dispute to the original Panel in
accordance with Article 21.5 of th... | 2026-03-15T15:40:52.268480 | |
141 | 141 | DS141_SEQ15_Note_By_Secretariat_Corr.pdf | DS141_SEQ15_Note_By_Secretariat_Corr.pdf | 15 | Note_By_Secretariat | Recourse by India to Article 21.5 of the DSU Constitution of the Panel established Note by the Secretariat Corrigendum The last sentence in WT/DS141/14 should read as follows: | NUMBERED | Corr | null | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON TYPE BED-LINEN FROM INDIA | 10 July 2002 | WT/DS141/14/Corr.1; WT/DS141/14 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON
IMPORTS OF COTTON TYPE BED-LINEN FROM INDIA
Recourse by India to Article 21.5 of the DSU
Constitution of the Panel established
Note by the Secretariat
Corrigendum
The last sentence in should read as follows:
5. Japan, Korea and the United States reserved their third-party r... | 2026-03-15T15:40:52.268761 | |
141 | 141 | DS141_SEQ16_Communication_03.pdf | DS141_SEQ16_Communication_03.pdf | 16 | Communication | Recourse to Article 21.5 of the DSU by India Communication from the Chairman of the Panel | NUMBERED | null | 3 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 22 August 2002 | WT/DS141/15 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Communication from the Chairman of the Panel
The following communication, dated 19 August 2002, addressed to the Chairman of the
Dispute Settlement Body, is circulated pursuant to Artic... | 2026-03-15T15:40:52.269180 | |
141 | 141 | DS141_SEQ17_Notification_Of_Appeal_01.pdf | DS141_SEQ17_Notification_Of_Appeal_01.pdf | 17 | Notification_Of_Appeal | Recourse to Article 21.5 of the DSU by India Notification of an Appeal by India under paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") | NUMBERED | null | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 9 January 2003 | WT/DS141/16 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 2 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Notification of an Appeal by India
under paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU")
The following notification, ... | 2026-03-15T15:40:52.269813 | |
141 | 141 | DS141_SEQ18_Communication_04.pdf | DS141_SEQ18_Communication_04.pdf | 18 | Communication | Recourse to Article 21.5 of the DSU by India Communication from the Appellate Body | NUMBERED | null | 4 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 7 March 2003 | WT/DS141/17 | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES
ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Communication from the Appellate Body
The following communication, dated 6 March 2003, from the Chairman of the Appellate
Body addressed to the Chairman of the Dispute Settlement Body, ... | 2026-03-15T15:40:52.270251 | |
141 | 141 | DS141_SEQ19_Communication_05.pdf | DS141_SEQ19_Communication_05.pdf | 19 | Communication | Recourse to Article 21.5 of the DSU by India Communication from the Appellate Body | NUMBERED | null | 5 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 9 April 2003 | WT/DS141/18; WT/DS141/AB/RW. | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES
ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Communication from the Appellate Body
The following communication, dated 8 April 2003, from Mr. James Bacchus, Chairman of the
Appellate Body, addressed to the Chairman of the Dispute S... | 2026-03-15T15:40:52.270561 | |
141 | 141 | DS141_SEQ20_Executive_Summary_01.pdf | DS141_SEQ20_Executive_Summary_01.pdf | 20 | Executive_Summary | WT/DS141/R Page 78 ANNEX 1-1 FIRST SUBMISSION OF INDIA (6 March 2000) CONTENTS Page EXECUTIVE SUMMARY .................................................................................................................85 A. DUMPING ISSUES........................................................................................ | NUMBERED | null | 1 | 6 March 2000 | WT/DS141/R | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 223 | LIST OF ANNEXES
1. Council Regulation (EC) No 384/96 on protecti on against dumped imports from countries not
members of the European Community
2. Notice of initiation of the Bed linen I anti-dumping proceeding
3. Non-Confidential Complaint leading to the Bed linen I anti-dumping proceeding
4. Evidence on co-operation ... | 2026-03-15T15:40:52.385549 | ||
141 | 141 | DS141_SEQ21_Submission_02.pdf | DS141_SEQ21_Submission_02.pdf | 21 | Submission | Oral Statement | NUMBERED | null | 2 | 15 May 2000 | WT/DS141/R | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 323 | ANNEX 1-5
QUESTIONS FROM INDIA TO THE EUROPEAN COMMUNITIES AND THE UNITED STATES
(15 May 2000)
To the EC
1. The EC states at paragraph 38 of its First Oral Statement that "even if, during the course of
the investigation, information became available which caused the authorities to conclude that they
had been mistaken r... | 2026-03-15T15:40:52.565408 | ||
141 | 141 | DS141_SEQ22_Submission_01.pdf | DS141_SEQ22_Submission_01.pdf | 22 | Submission | WT/DS141/RW Annex A-1 Page 1 ANNEX A First Submission by the Parties Contents Page Annex A-1 First Written Submission of India A-2 | NUMBERED | null | 1 | null | WT/DS141/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 100 | Annex A-1
ANNEX A
First Submission by the Parties
Contents Page
Annex A-1 First Written Submission of India A-2
Annex A-2 First Submission of the European Communities A-50
Annex A-1
LIST OF EXHIBITS
INDIA-RW-1 of 22 March 2001
INDIA-RW-2 of 1 May 2001
I
NDIA-RW-3 General disclosure document of 19 June 2001, EC ... | 2026-03-15T15:40:52.627259 | ||
141 | 141 | DS141_SEQ23_Submission_02.pdf | DS141_SEQ23_Submission_02.pdf | 23 | Submission | WT/DS141/RW Annex B Page 1 ANNEX B Third Parties' Submissions Content Page Annex B-1 Third Party Submission of Japan B-2 Annex B-2 Third Party Submission of the United States B-3 | NUMBERED | null | 2 | null | WT/DS141/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 7 | Annex B
ANNEX B
Third Parties' Submissions
Content Page
Annex B-1 Third Party Submission of Japan B-2
Annex B-2 Third Party Submission of the United States B-3
Annex B-1
ANNEX B-1
THIRD PARTY SUBMISSION OF JAPAN
1. The Government of Japan does not take any specific position on the issue of terms of
reference of the... | 2026-03-15T15:40:52.630714 | ||
141 | 141 | DS141_SEQ24_Submission_03.pdf | DS141_SEQ24_Submission_03.pdf | 24 | Submission | WT/DS141/RW Annex C-1 Page 1 ANNEX C Second Submission by the Parties Content Page Annex C-1 Second Written Submission of India C-2 Annex C-2 Second Submission of the European Communities C-42 | NUMBERED | null | 3 | null | WT/DS141/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 44 | Annex C-1
ANNEX C
Second Submission by the Parties
Content Page
Annex C-1 Second Written Submission of India C-2
Annex C-2 Second Submission of the European Communities C-42
Annex C-1
I. INTRODUCTION
1. India respectfully submits to the Panel its second written submission in rebuttal to the first
written submission ... | 2026-03-15T15:40:52.654925 | ||
141 | 141 | DS141_SEQ25_Submission_04.pdf | DS141_SEQ25_Submission_04.pdf | 25 | Submission | WT/DS141/RW Annex D-1 Page 1 ANNEX D ORAL STATEMENTS Content Page Annex D-1 Oral Statement of Korea D-2 Annex D-1 Oral Statement of the United States at the Third-Party Session D-5 Annex D-3 Oral Statement of the European Communities D-8 Annex D-4 Closing Statement of the European Communities D-33 Annex D-5 Oral Statem... | NUMBERED | null | 4 | null | WT/DS141/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 55 | Annex D-1
ANNEX D
ORAL STATEMENTS
Content Page
Annex D-1 Oral Statement of Korea D-2
Annex D-1 Oral Statement of the United States at the Third-Party Session D-5
Annex D-3 Oral Statement of the European Communities D-8
Annex D-4 Closing Statement of the European Communities D-33
Annex D-5 Oral Statement of India D-35
... | 2026-03-15T15:40:52.686079 | ||
141 | 141 | DS141_SEQ26_Questions_And_Replies_05.pdf | DS141_SEQ26_Questions_And_Replies_05.pdf | 26 | Questions_And_Replies | WT/DS141/RW Annex E Page 1 ANNEX E QUESTIONS AND ANSWERS Content Page Annex E-1 India's Answers to the Panel's Questions E-2 Annex E-2 Answers of the European Communities to the Questions from the Panel E-36 Annex E-3 Answers of the European Communities to the Questions from India E-49 Annex E-4 Responses of the United... | NUMBERED | null | 5 | null | WT/DS141/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 92 | Annex E
ANNEX E
QUESTIONS AND ANSWERS
Content Page
Annex E-1 India's Answers to the Panel's Questions E-2
Annex E-2 Answers of the European Communities to the Questions from the
Panel
E-36
Annex E-3 Answers of the European Communities to the Questions from India E-49
Annex E-4 Responses of the United States to Questio... | 2026-03-15T15:40:52.734757 | ||
141 | 141 | DS141_SEQ27_Report_Of_Panel_00.pdf | DS141_SEQ27_Report_Of_Panel_00.pdf | 27 | Report_Of_Panel | Report of the Panel | PANEL_REPORT | null | 0 | EUROPEAN COMMUNITIES — ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 30 October 2000 | WT/DS141/R | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 83 | EUROPEAN COMMUNITIES — ANTI-DUMPING DUTIES
ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA
Report of the Panel
The report of the Panel on European Communities – Anti-Dumping Duties on Imports of
Cotton-Type Bed Linen from India is being circulated to all Members, pursuant to the DSU. The
report is being circulated as an... | 2026-03-15T15:40:52.788474 | |
141 | 141 | DS141_SEQ28_Report_Of_Panel_00.pdf | DS141_SEQ28_Report_Of_Panel_00.pdf | 28 | Report_Of_Panel | Recourse to Article 21.5 of the DSU by India Report of the Panel | PANEL_REPORT | null | 0 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 29 November 2002 | WT/DS141/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 79 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON
IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Report of the Panel
The report of the Panel on - Recourse to Article 21.5 of the DSU by India is being circulated to all
Members, pursuant to the DSU. The report is being circulated as ... | 2026-03-15T15:40:52.840048 | |
141 | 141 | DS141_SEQ29_Appellate_Body_Report_And_Panel_Report_00.pdf | DS141_SEQ29_Appellate_Body_Report_And_Panel_Report_00.pdf | 29 | Appellate_Body_Report_And_Panel_Report | Appellate Body Report and Panel Report Action by the Dispute Settlement Body | AB_REPORT | null | 0 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 22 March 2001 | WT/DS141/9; WT/DS141/AB/R; WT/DS141/R | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Appellate Body Report and Panel Report
Action by the Dispute Settlement Body
At its meeting on 12 March 2001, the Dispute Settlement Body adopted the Appellate Body
report on "" (), and the panel report (), as modified by the Appe... | 2026-03-15T15:40:52.841659 | |
141 | 141 | DS141_SEQ30_Appellate_Body_Report_And_Panel_Report_01.pdf | DS141_SEQ30_Appellate_Body_Report_And_Panel_Report_01.pdf | 30 | Appellate_Body_Report_And_Panel_Report | Appellate Body Report and Panel Report pursuant to Article 21.5 of the DSU Action by the Dispute Settlement Body | AB_REPORT | null | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA | 29 April 2003 | WT/DS141/19; WT/DS141/AB/RW; WT/DS141/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Appellate Body Report and Panel Report pursuant to Article 21.5 of the DSU
Action by the Dispute Settlement Body
At its meeting on 24 April 2003, the Dispute Settlement Body adopted the Appellate Body
report on : Recourse to Artic... | 2026-03-15T15:40:52.842204 | |
141 | 141 | DS141_SEQ31_Report_Of_Appellate_Body_00.pdf | DS141_SEQ31_Report_Of_Appellate_Body_00.pdf | 31 | Report_Of_Appellate_Body | Report of the Appellate Body | AB_REPORT | null | 0 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA AB-2000-13 | 1 March 2001 | WT/DS141/AB/R | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 32 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
AB-2000-13
Report of the Appellate Body
APPELLATE BODY
European Communities – Anti-Dumping Duties
on Imports of Cotton-Type Bed Linen from
India
European Communities, Appellant/Appellee
India, Appellant/Appellee
Egypt, Third Part... | 2026-03-15T15:40:52.855874 | |
141 | 141 | DS141_SEQ32_Report_Of_Appellate_Body_01.pdf | DS141_SEQ32_Report_Of_Appellate_Body_01.pdf | 32 | Report_Of_Appellate_Body | Report of the Appellate Body | AB_REPORT | null | 1 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA RECOURSE TO ARTICLE 21.5 OF THE DSU BY INDIA AB-2003-1 | 8 April 2003 | WT/DS141/AB/RW | ['India'] | ['EU'] | ['Egypt', 'Japan', 'South Korea', 'U.S.'] | Consultation | Art. VI, I GATT 1994Art. 2, 3, 4, 5, 15, 12 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 3 August 1998, India requested
consultations with the EC in respect of Council Regulation (EC) No 2398/97
of 28 November 1997 on imports of c... | 82 | EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
RECOURSE TO ARTICLE 21.5 OF THE DSU BY INDIA
AB-2003-1
Report of the Appellate Body
APPELLATE BODY
European Communities – Anti-Dumping Duties
on Imports of Cotton-Type Bed Linen from India
Recourse to Article 21.5 of the DSU by I... | 2026-03-15T15:40:52.894433 | |
142 | 139 | DS139_SEQ01_Note_By_Secretariat.pdf | DS139_SEQ01_Note_By_Secretariat.pdf | 1 | Note_By_Secretariat | Constitution of the Panel Established at the Request of Japan and the European Communities Note by the Secretariat | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 25 March 1999 | WT/DS139/3; WT/DS142/3; WT/DS139/2; WT/DS142/2 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Constitution of the Panel Established at the Request of
Japan and the European Communities
Note by the Secretariat
1. At its meeting on 1 February 1999, the DSB established panels pursuant to requests by Japan
() and the European Communities (). The DSB agreed... | 2026-03-15T15:40:53.454155 | |
142 | 139 | DS139_SEQ02_Communication_00.pdf | DS139_SEQ02_Communication_00.pdf | 2 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 1 October 1999 | WT/DS139/4; WT/DS142/4 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Communication from the Chairman of the Panel
The following communication, dated 30 September 1999, addressed to the Dispute Settlement
Body, is circulated in accordance with Article 12.9 of the DSU.
Article 12.8 of the DSU stipulates that the period in which a... | 2026-03-15T15:40:53.454581 | |
142 | 139 | DS139_SEQ03_Notification_Of_Appeal.pdf | DS139_SEQ03_Notification_Of_Appeal.pdf | 3 | Notification_Of_Appeal | Notification of an Appeal by Canada under paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 2 March 2000 | WT/DS139/5; WT/DS142/5 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 2 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Notification of an Appeal by Canada under
paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU)
The following notification, dated 2 March 2000, sent by Canada to the Dispute Settlement
Body (DSB), is ... | 2026-03-15T15:40:53.455239 | |
142 | 139 | DS139_SEQ04_Communication_01.pdf | DS139_SEQ04_Communication_01.pdf | 4 | Communication | Communication from the Appellate Body | NUMBERED | null | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 28 April 2000 | WT/DS139/6; WT/DS142/6 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Communication from the Appellate Body
The following communication, dated 28 April 2000, from the Chairman of the Appellate
Body addressed to the Chairman of the Dispute Settlement Body, is circulated in accordance with
Article 17.5 of the Understanding on Rule... | 2026-03-15T15:40:53.455661 | |
142 | 139 | DS139_SEQ05_Communication_02.pdf | DS139_SEQ05_Communication_02.pdf | 5 | Communication | Communication from the Appellate Body | NUMBERED | null | 2 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 30 May 2000 | WT/DS139/7; WT/DS142/7; WT/DS139/AB/R; WT/DS142/AB/R. | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Communication from the Appellate Body
The following communication, dated 30 May 2000, from Mr. Florentino Feliciano, Chairman
of the Appellate Body, addressed to the Chairman of the Dispute Settlement Body, is circulated in
accordance with Article 17.5 of the ... | 2026-03-15T15:40:53.455939 | |
142 | 139 | DS139_SEQ06_Communication_03.pdf | DS139_SEQ06_Communication_03.pdf | 6 | Communication | Communication from Canada | NUMBERED | null | 3 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 19 July 2000 | WT/DS139/9; WT/DS142/9 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
Communication from Canada
The following communication, dated 19 July 2000, from the Permanent Mission of Canada to
the Chairman of the Dispute Settlement Body, is circulated at the request of Canada.
As you will recall, on 19 June 2000, the DSB adopted the pan... | 2026-03-15T15:40:53.456282 | |
142 | 139 | DS139_SEQ07_Appointment_Of_Arbitrator.pdf | DS139_SEQ07_Appointment_Of_Arbitrator.pdf | 7 | Appointment_Of_Arbitrator | Surveillance of Implementation of Recommendations and Rulings Appointment of Arbitrator under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 23 August 2000 | WT/DS139/11; WT/DS142/11 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
Surveillance of Implementation of Recommendations and Rulings
Appointment of Arbitrator under Article 21.3(c) of the
Understanding on Rules and Procedures Governing the Settlement of Disputes
The following communication, dated 23 August 2000, from the Permanen... | 2026-03-15T15:40:53.456848 | |
142 | 139 | DS139_SEQ08_Appellate_Body_Report_And_Panel_Report.pdf | DS139_SEQ08_Appellate_Body_Report_And_Panel_Report.pdf | 8 | Appellate_Body_Report_And_Panel_Report | Appellate Body Report and Panel Report Action by the Dispute Settlement Body On 19 June 2000, the Dispute Settlement Body adopted the Appellate Body report on "Canada - Certain Measures Affecting the Automotive Industry " (WT/DS139/AB/R- WT/DS142/AB/R) and the panel report (WT/DS139/ R-WT/DS142/R), as modified by the A... | AB_REPORT | null | null | CANADA - CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 22 June 2000 | WT/DS139/8; WT/DS142/8; WT/DS139/AB/R-; WT/DS142/AB/R; WT/DS142/R | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA - CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
Appellate Body Report and Panel Report
Action by the Dispute Settlement Body
On 19 June 2000, the Dispute Settlement Body adopted the Appellate Body report on
" " (
) and the panel report (WT/DS139/ R-), as modified by the Appellate
Body report. The panel repo... | 2026-03-15T15:40:53.457251 | |
142 | 139 | DS139_SEQ09_Report_Of_Appellate_Body.pdf | DS139_SEQ09_Report_Of_Appellate_Body.pdf | 9 | Report_Of_Appellate_Body | Report of the Appellate Body | AB_REPORT | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY AB-2000-2 | 31 May 2000 | WT/DS139/AB/R; WT/DS142/AB/R | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 66 | CANADA – CERTAIN MEASURES AFFECTING
THE AUTOMOTIVE INDUSTRY
AB-2000-2
Report of the Appellate Body
APPELLATE BODY
Canada – Certain Measures Affecting the
Automotive Industry
Canada, Appellant/Appellee
Japan, Appellant/Appellee
European Communities, Appellant/Appellee
Korea, Third Participant
United States, Third Parti... | 2026-03-15T15:40:53.484861 | |
142 | 139 | DS139_SEQ10_Request_For_Arbitration.pdf | DS139_SEQ10_Request_For_Arbitration.pdf | 10 | Request_For_Arbitration | Request by the European Communities and Japan for Arbitration under Article 21.3(c) of the DSU | ARBITRATION | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 8 August 2000 | WT/DS139/10; WT/DS142/10 | ['Japan'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. 2 Trade-Related Investment Measures (TRIMs)Art. II, VI, XVII Services (GATS)Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. I:1, III:4 GATT 1994Art. 3.2 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan.
On 3 July 1998, Japan requested consultations with
Canada in respect of measures being taken by Canada in the automotive
industry. Japan contend... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Request by the European Communities and Japan for Arbitration
under Article 21.3(c) of the DSU
The following communication, dated 4 August 2000, from the Permanent Delegation of the
European Commission and the Permanent Mission of Japan to the Chairman of the ... | 2026-03-15T15:40:53.485365 | |
142 | 142 | DS142_SEQ01_Request_For_Consultations.pdf | DS142_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations by the European Communities | NUMBERED | null | null | CANADA - CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 21 August 1998 | WT/DS142/1; G/L/254; G/TRIMS/D/13; G/SCM/D28/1; S/L/60 | General Agreement on Trade in Services (GATS); General Council; Subsidies and Countervailing Measures (SCM); Trade-Related Investment Measures (TRIMS) | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 2 | CANADA - CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Request for Consultations by the European Communities
The following communication, dated 17 August 1998, from the Permanent Delegation of the
European Commission to the Permanent Mission of Canada and to the Dispute Settlement Body, is
circulated in accordance... | 2026-03-15T15:40:59.006068 |
142 | 142 | DS142_SEQ02_Request_For_Establishment_Of_Panel.pdf | DS142_SEQ02_Request_For_Establishment_Of_Panel.pdf | 2 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by the European Communities | NUMBERED | null | null | CANADA - CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 14 January 1999 | WT/DS142/2 | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 3 | CANADA - CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Request for the Establishment of a Panel by the European Communities
The following communication, dated 14 January 1999, from the Permanent Delegation of the
European Commission to the Chairman of the Disput e Settlement Body, is circulated in accordance
with ... | 2026-03-15T15:40:59.007229 | |
142 | 142 | DS142_SEQ03_Understanding.pdf | DS142_SEQ03_Understanding.pdf | 3 | Understanding | Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes | NUMBERED | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 3 October 2000 | WT/DS139/13; WT/DS142/13 | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 1 | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY
Arbitration under Article 21.3(c) of the Understanding
on Rules and Procedures Governing the Settlement of Disputes
The following communication, dated 3 October 2000, from the Arbitrator,
Mr. Julio Lacarte-Muró, to the Chairman of the Dispute Settlement Body, ... | 2026-03-15T15:40:59.007472 | |
142 | 142 | DS142_SEQ04_Report_Of_Panel.pdf | DS142_SEQ04_Report_Of_Panel.pdf | 4 | Report_Of_Panel | Report of the Panel | PANEL_REPORT | null | null | 11 February 2000 | WT/DS139/R; WT/DS142/R | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 431 | Canada – Certain Measures Affecting
the Automotive Industry
Report of the Panel
The report of the Panel on " Canada – Certain Measures Affecting the Automotive Industry" is being
circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted
document from 11 February 2000 pursuant to ... | 2026-03-15T15:40:59.256504 | ||
142 | 142 | DS142_SEQ05_Arbitration_Award.pdf | DS142_SEQ05_Arbitration_Award.pdf | 5 | Arbitration_Award | Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes Award of the Arbitrator Julio Lacarte-Muró | ARBITRATION | null | null | CANADA – CERTAIN MEASURES AFFECTING THE AUTOMOTIVE INDUSTRY | 4 October 2000 | WT/DS139/12; WT/DS142/12 | ['EU'] | ['Canada'] | ['India', 'South Korea', 'U.S.'] | Consultation | Art. I:1, III:4 GATT 1994Art. 3.1(a) Subsidies and Countervailing Measures (SCM)Art. II Services (GATS)Art. 3.1(b), 3.2 Subsidies and Countervailing Measures (SCM)Art. 2.1 Trade-Related Investment Measures (TRIMs)Art. XVII Services (GATS) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European
Communities.
On 3 July 1998, Japan requested consultations
with Canada in respect of measures being taken by Canada in the automotive
... | 18 | CANADA – CERTAIN MEASURES AFFECTING THE
AUTOMOTIVE INDUSTRY
Arbitration
under Article 21.3(c) of the
Understanding on Rules and Procedures
Governing the Settlement of Disputes
Award of the Arbitrator
Julio Lacarte-Muró
WT/DS/142/12
I. Introduction
1. On 19 June 2000, the Dispute Settlement Body (the "DSB") adopted th... | 2026-03-15T15:40:59.264687 | |
143 | 143 | DS143_SEQ01_Request_For_Establishment_Of_Panel.pdf | DS143_SEQ01_Request_For_Establishment_Of_Panel.pdf | 1 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by Hungary | NUMBERED | null | null | SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT DUTY ON WHEAT FROM HUNGARY | 9 October 1998 | WT/DS143/2 | ['Hungary'] | ['Slovak Republic'] | [] | Consultation | Art. I, II GATT 1994Art. 4 Agriculture | The summary below was up-to-date at
12 October 2012
Consultations
Complaint by Hungary.
On 18 September 1998, Hungary
requested consultations with the Slovak Republic in respect of a
regulation adopted by the Slovak Republic which entered into force on 10
September 1998, which allegedly incr... | 1 | SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT
DUTY ON WHEAT FROM HUNGARY
Request for the Establishment of a Panel by Hungary
The following communication, dated 8 October 1998, from the Permanent Mission of
Hungary to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the
DSU.
Hungary req... | 2026-03-15T15:40:59.279449 | |
143 | 143 | DS143_SEQ02_Request_For_Consultations.pdf | DS143_SEQ02_Request_For_Consultations.pdf | 2 | Request_For_Consultations | Request for Consultations from Hungary | NUMBERED | null | null | SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT DUTY ON WHEAT FROM HUNGARY | 21 September 1998 | WT/DS143/1; G/AG/GEN/26 | Agriculture (AG) | ['Hungary'] | ['Slovak Republic'] | [] | Consultation | Art. I, II GATT 1994Art. 4 Agriculture | The summary below was up-to-date at
12 October 2012
Consultations
Complaint by Hungary.
On 18 September 1998, Hungary
requested consultations with the Slovak Republic in respect of a
regulation adopted by the Slovak Republic which entered into force on 10
September 1998, which allegedly incr... | 1 | SLOVAK REPUBLIC – MEASURE AFFECTING IMPORT
DUTY ON WHEAT FROM HUNGARY
Request for Consultations from Hungary
The following communication, dated 18 September 1998, from the Permanent Mission of
Hungary to the Permanent Mission of the Slovak Republic and to the Chairman of the Dispute
Settlement Body, is circulated in ac... | 2026-03-15T15:40:59.280067 |
144 | 144 | DS144_SEQ01_Request_For_Consultations.pdf | DS144_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations from Canada | NUMBERED | null | null | UNITED STATES - CERTAIN MEASURES AFFECTING THE IMPORT OF CATTLE, SWINE AND GRAIN FROM CANADA | 29 September 1998 | WT/DS144/1; G/L/260; G/SPS/W/90; G/TBT/D/18; G/AG/GEN/27 | Agriculture (AG); General Council; Sanitary and Phytosanitary Measures (SPS); Technical Barriers to Trade (TBT) | ['Canada'] | ['U.S.'] | [] | Consultation | Art. 4 AgricultureArt. I, III, V, XI, XXIV:12 GATT 1994Art. 2, 3, 4, 5, 6, 13, Annex B, Annex C Sanitary and Phytosanitary Measures (SPS)Art. 2, 3, 5, 7 Technical Barriers to Trade (TBT) | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by Canada.
On 25 September 1998, Canada requested
consultations with the US in respect of certain measures, imposed by the
US state of South Dakota and other states, prohibiting entry or transit
to Canadian tr... | 2 | UNITED STATES - CERTAIN MEASURES AFFECTING THE IMPORT
OF CATTLE, SWINE AND GRAIN FROM CANADA
Request for Consultations from Canada
The following communication, dated 25 September 1998, from the Permanent Mission of
Canada to the Permanent Mission of the United States and to the Chairman of the Dispute Settlement
Body, ... | 2026-03-15T15:40:59.290630 |
145 | 145 | DS145_SEQ01_Request_For_Consultations.pdf | DS145_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations from the European Communities | NUMBERED | null | null | ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF WHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES | 29 September 1998 | WT/DS145/1; G/SCM/D29/1 | Subsidies and Countervailing Measures (SCM) | ['EU'] | ['Argentina'] | [] | Consultation | Art. 10, 11.11 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by the European Communities.
On 23 September 1998, the EC requested
consultations with the Argentina in respect of definitive countervailing duties
allegedly imposed by Argentina on imports of wheat gluten from the EC... | 1 | ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF
WHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES
Request for Consultations from the European Communities
The following communication, dated 23 September 1998, from the Permanent Delegation of
the European Communities to the Permanent Mission of Argentina and to the Chairman of ... | 2026-03-15T15:40:59.303521 |
145 | 145 | DS145_SEQ02_Request_For_Consultations_Rev.pdf | DS145_SEQ02_Request_For_Consultations_Rev.pdf | 2 | Request_For_Consultations | Request for Consultations from the European Communities Revision | NUMBERED | Rev | null | ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF WHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES | 12 October 1998 | WT/DS145/1/Rev.1; G/SCM/D29/1/Rev.1 | Subsidies and Countervailing Measures (SCM) | ['EU'] | ['Argentina'] | [] | Consultation | Art. 10, 11.11 Subsidies and Countervailing Measures (SCM) | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by the European Communities.
On 23 September 1998, the EC requested
consultations with the Argentina in respect of definitive countervailing duties
allegedly imposed by Argentina on imports of wheat gluten from the EC... | 1 | ARGENTINA – COUNTERVAILING DUTIES ON IMPORTS OF
WHEAT GLUTEN FROM THE EUROPEAN COMMUNITIES
Request for Consultations from the European Communities
Revision
The following communication, dated 7 October 1998, from the Permanent Delegation of the
European Communities to the Permanent Mission of Argentina and to the Chairm... | 2026-03-15T15:40:59.304014 |
146 | 146 | DS146_SEQ01_Request_For_Consultations.pdf | DS146_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations | NUMBERED | null | null | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR | 12 October 1998 | WT/DS146/1; G/L/261; G/TRIMS/D/14 | General Council; Trade-Related Investment Measures (TRIMS) | ['EU'] | ['India'] | ['Japan', 'South Korea'] | Consultation | Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 6
October 1998, the EC requested consultations with India concerning certain
measures affecting the automotive sector bein... | 2 | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR
Request for Consultations
The following communication, dated 6 October 1998, from the Permanent Delegation of the
European Commission to the Permanent Mission of India and to the Chairman of the Dispute
Settlement Body, is circulated in accordance with Article 4.4 of the... | 2026-03-15T15:40:59.332400 |
146 | 146 | DS146_SEQ02_Request_To_Join_Consultations_00.pdf | DS146_SEQ02_Request_To_Join_Consultations_00.pdf | 2 | Request_To_Join_Consultations | Request to Join Consultations | NUMBERED | null | 0 | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR | 26 October 1998 | WT/DS146/2 | ['EU'] | ['India'] | ['Japan', 'South Korea'] | Consultation | Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 6
October 1998, the EC requested consultations with India concerning certain
measures affecting the automotive sector bein... | 1 | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR
Request to Join Consultations
The following communication, dated 21 October 1998, from the Permanent Mission of Japan
to the Permanent Mission of India and to the Chairman of the Dispute Settlement Body, is circulated
in accordance with Article 4.11 of the DSU.
Pursuant ... | 2026-03-15T15:40:59.332703 | |
146 | 146 | DS146_SEQ03_Request_To_Join_Consultations_01.pdf | DS146_SEQ03_Request_To_Join_Consultations_01.pdf | 3 | Request_To_Join_Consultations | Request to Join Consultations Communication from the United States | NUMBERED | null | 1 | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR | 28 October 1998 | WT/DS146/3 | ['EU'] | ['India'] | ['Japan', 'South Korea'] | Consultation | Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 6
October 1998, the EC requested consultations with India concerning certain
measures affecting the automotive sector bein... | 1 | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR
Request to Join Consultations
Communication from the United States
The following communication, dated 22 October 1998, from the Permanent Mission of the
United States to the Permanent Mission of India and to the Chairman of the Dispute Settlement Body,
is circulated in a... | 2026-03-15T15:40:59.333193 | |
146 | 146 | DS146_SEQ04_Request_For_Establishment_Of_Panel.pdf | DS146_SEQ04_Request_For_Establishment_Of_Panel.pdf | 4 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by the European Communities | NUMBERED | null | null | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR | 13 October 2000 | WT/DS146/4 | ['EU'] | ['India'] | ['Japan', 'South Korea'] | Consultation | Art. III, XI GATT 1994Art. 2.1 Trade-Related Investment Measures (TRIMs) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 6
October 1998, the EC requested consultations with India concerning certain
measures affecting the automotive sector bein... | 1 | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR
Request for the Establishment of a Panel by the European Communities
The following communication, dated 12 October 2000, from the Permanent Delegation of the
European Commission to the Chairman of the Disp ute Settlement Body, is circulated pursuant to
Article 6.2 of the... | 2026-03-15T15:40:59.333778 | |
146 | 175 | DS175_SEQ01_Note_By_Secretariat.pdf | DS175_SEQ01_Note_By_Secretariat.pdf | 1 | Note_By_Secretariat | Constitution of the Panel Established at the Requests of the United States and the European Communities Note by the Secretariat | NUMBERED | null | null | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR | 30 November 2000 | WT/DS146/5; WT/DS175/5; WT/DS175/4. | ['U.S.'] | ['India'] | ['EU', 'Japan', 'South Korea'] | Appellate Body | Art. III:4, XI:1 GATT 1994Art. 2.1, 2.2 Trade-Related Investment Measures (TRIMs) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 6 October 1998, the EC requested consultations with
India concerning certain measures affecting the automotive sector being
... | 1 | INDIA – MEASURES AFFECTING THE AUTOMOTIVE SECTOR
Constitution of the Panel Established at the Requests of the United States
and the European Communities
Note by the Secretariat
1. At its meeting of 27 July 2000 (WT/DSB/M/86), the DSB established a panel at the request of
the United States to examine the complaint conta... | 2026-03-15T15:41:01.558297 | |
146 | 175 | DS175_SEQ02_Communication_00.pdf | DS175_SEQ02_Communication_00.pdf | 2 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR | 21 August 2001 | WT/DS146/6; WT/DS175/6 | ['U.S.'] | ['India'] | ['EU', 'Japan', 'South Korea'] | Appellate Body | Art. III:4, XI:1 GATT 1994Art. 2.1, 2.2 Trade-Related Investment Measures (TRIMs) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 6 October 1998, the EC requested consultations with
India concerning certain measures affecting the automotive sector being
... | 1 | INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR
Communication from the Chairman of the Panel
The following communication, dated 21 May 2001, addressed to the Dispute Settlement Body
(DSB), is circulated in accordance with Article 12.9 of the Dispute Settlement Understanding (DSU).
Article 12.8 of the Understanding on ... | 2026-03-15T15:41:01.558845 | |
146 | 175 | DS175_SEQ03_Communication_01.pdf | DS175_SEQ03_Communication_01.pdf | 3 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 1 | INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR | 8 November 2001 | WT/DS146/7; WT/DS175/7 | ['U.S.'] | ['India'] | ['EU', 'Japan', 'South Korea'] | Appellate Body | Art. III:4, XI:1 GATT 1994Art. 2.1, 2.2 Trade-Related Investment Measures (TRIMs) | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the European Communities.
On 6 October 1998, the EC requested consultations with
India concerning certain measures affecting the automotive sector being
... | 1 | INDIA — MEASURES AFFECTING THE AUTOMOTIVE SECTOR
Communication from the Chairman of the Panel
The following communication, dated 5 November 2001, addressed to the Dispute Settlement
Body (DSB), is circulated in accordance with Article 12.9 of the Dispute Settlement
Understanding (DSU).
Article 12.8 of the Understanding... | 2026-03-15T15:41:01.559304 |
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