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AFFECTING IMPORTS OF WOVEN WOOL SHIRTS AND BLOUSES FROM INDIA Report of the Panel
The report of the Panel on United
States Measure Affecting Imports of Woven Wool Shirts
and Blouses from India is being circulated to all Members, pursuant
to the DSU. The report is being circulated as an unrestricted
document from 6 January 1997 pursuant to the Procedures
for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1).
Members are reminded that in accordance with the DSU only parties
to the dispute may appeal a panel report, an appeal shall be limited
to issues of law covered in the panel report and legal interpretations
developed by the panel, and that there shall be no ex parte
communications with the panel or Appellate Body concerning matters
under consideration by the panel or Appellate Body.
II. CHRONOLOGY OF EVENTS
B. Burden of Proof C. Standard of Review
G. Attribution to India
J. Date of the Safeguard Action VII. FINDINGS
B. Claims of the Parties C. General Interpretative Issues
2. Standard of Review 3. The Role of the TMB Process Versus the Role of the Dispute Settlement Mechanism of the DSU
2. India's Claim Regarding the Substantive Requirements in Article 6 of the ATC 3. Overall Assessment of the US Determination 4. Serious Damage or Actual Threat Thereof 5. The Obligation to Consult and the Alleged Need for TMB Endorsement 76 F. India's Claim that Article 2 of the ATC was Violated
I INTRODUCTION
1.1 In a communication dated
14 March 1996, India requested that a panel be established
at the next meeting of the Dispute Settlement Body (DSB) pursuant
to Article XXIII:2 of GATT 1994, Article 6 of the Understanding
on Rules and Procedures Governing the Settlement of Disputes (DSU)
and Article 8.10 and other relevant provisions of the Agreement
on Textiles and Clothing (ATC) (WT/DS33/1). This arose from a
restraint introduced by the United States in respect of India's
exports of woven wool shirts and blouses (US category 440),
under Article 6 of the ATC.
1.2 India noted that the matter
had remained unresolved in spite of bilateral consultations between
India and the United States held under Article 6.7 of the
ATC in April and June 1995; the examination of the
matter by the Textiles Monitoring Body (TMB) under Article 6.10
of the ATC in August and September 1995; the communication
sent to the TMB under Article 8.10 of the ATC, within one month
of the TMB recommendation under Article 6.10 of the ATC,
explaining the reasons for India's inability to conform to the
TMB recommendations; and the review of the matter by the TMB
under Article 8.10 of the ATC in November 1995. Consequently,
India considered that it had met all requirements in Article 8.10
of the ATC for direct recourse to Article XXIII:2 of GATT 1994.
At its meeting held on 17 April 1996, the DSB established
a panel pursuant to the request of India, with standard terms
of reference, in accordance with Article 6 of the DSU (WT/DSB/M/14).
1.3 On 27 June 1996,
the DSB informed Members that the terms of reference and the composition
of the panel (WT/DS33/2) were as follows:
"To examine, in the light
of the relevant provisions of the covered agreements cited by
India in document WT/DS/33/1, the matter referred to the DSB by
India in that document and to make such findings as will assist
the DSB in making the recommendations or in giving the rulings
provided for in those agreements."
Composition
Five Members reserved their rights
to participate in the Panel proceedings as third parties; namely
Canada, the European Communities, Norway, Pakistan and Turkey.
1.4 The Panel met with the parties
to the dispute on 9 and 10 September and on 4 October 1996. The
Panel submitted its complete findings and conclusions to the parties
to the dispute on 12 November 1996. * * * * *
II CHRONOLOGY OF EVENTS
United States Requests
Consultations under the MFA1 in December 1994
2.1 Since the inception of the
MFA in 1974, exports of textile and clothing products from India
to the United States had been regulated by bilateral textile
agreements under Article 4 of the MFA. The last bilateral
textile agreement between India and the United States expired
on 31 December 1994 and, effective from 1 January 1995,
trade in textiles and clothing between the two Members has been
governed by the ATC.
2.2 In the last bilateral textiles
agreement between India and the United States, India's exports
of several cotton and man-made fibre product categories had been
subject to specific quota limits (Group I) and those product
categories that were not so designated, plus all silk-blended
garments and vegetable fibre garments, were subject to a group
limit (Group II). Wool products (Group III) were not subject
to specific or group limits, but were subject to the consultation
mechanism in the bilateral agreement.
2.3 On 30 December 1994, the
United States issued a request for consultations with India under
paragraphs 19 and 20 of the bilateral agreement for the purpose
of establishing restraints on India's exports to the United States
of woven wool shirts and blouses (category 440 in Group III).2
The request for consultations, accompanied by a statement entitled
"Market Statement, Wool Woven Shirts and Blouses: Category 440",
stated that the United States had concluded that the level
of imports from India in this category was creating a real risk
of disruption in the United States' domestic industry.
2.4 Consultations between India
and the United States were held in Geneva on 18 April 1995
pursuant to the request issued in December 1994. India considered
that the request for consultations, issued one day before the
expiry of the MFA and the bilateral textiles agreement, was no
longer valid in April 1995; from 1 January 1995 the framework
for international trade in textiles was provided by the ATC and
the other WTO agreements.
United States Requests
Consultations Under the ATC in April 1995
2.5 On the same day, 18 April 1995,
the United States requested new consultations with India
on, inter alia, category 440 under the transitional
safeguard mechanism in Article 6 of the ATC. The United States
withdrew its previous consultation request issued on 30 December 1994
as India considered that the request was no longer valid due to
the entry into force of the ATC. The consultation request in the
form of a diplomatic note stated that the United States had concluded
that the sharp and substantial increase in imports from India
in this category "is causing serious damage, or actual threat
thereof to the United States industry", and was accompanied
by a "Statement of Serious Damage" (hereinafter referred
to as the Market Statement) which claimed that a "sharp and
substantial increase in imports of woven wool shirts and blouses,
Category 440, is causing serious damage to the US industry
producing woven wool shirts and blouses. The United States
proposed a quota limit for exports of category 440 of 76,698 dozen.
The request for consultations was officially published in the
US Federal Register on 23 May 1995 (60 Fed. Reg. 27274).
2.6 Further discussions were
held between the two delegations in Geneva on 19 April 1995
at the request of the United States. However, as the request
for consultations had been issued only on the previous day, India
had not had time to complete its review of the Market Statement
and, therefore, considered these consultations to be preliminary.
In the course of these consultations, India sought clarification
from the United States on a number of technical points raised
by the Market Statement. Further consultations were held in Washington
on 14-16 June 1995 which did not result in a mutual
settlement of the matter.
United States Imposes
Restraints on Imports from India in July 1995
2.7 On 14 July 1995,
as no mutual settlement was reached within the 60-day consultation
period provided in the ATC, India was informed by the United States
that a restraint would be applied on imports from India of the
products covered by US category 440, effective from 18 April 1995
and extending through 17 April 1996. The level of the
restraint was set at 76,698 dozen for the first 12month
period.
Review by the Textiles
Monitoring Body
2.8 Pursuant to Article 6.10
of the ATC, the United States notified the TMB of the restraint.
The TMB examined the matter at its sessions from 28 August
to 1 September and 12-15 September 1995 and
heard presentations from the United States and India.3 With
respect to category 440, the United States submitted
to the TMB a document entitled "Other Relevant Information",
containing information on the situation of the United States industry
producing woven wool shirts and blouses.
2.9 With respect to category
440, the TMB found:
India Requests Review of
TMB Finding in October 1995
2.10 India sent a communication
on 16 October 1995 to the TMB informing that Body of
its inability to conform with its recommendations and explaining
the reasons therefor, as provided in Article 8.10 of the
ATC. India requested the TMB to give a thorough consideration
to the reasons it had given and to recommend that the United States
rescind the restraint on India's exports in category 440.
2.11 The TMB reviewed the matter
raised by India at its meeting on 13-17 November 1995, and made
the following statement in its report: "The TMB reviewed the matter referred to it by India under Article 8.10 in its letter dated 16 October 1995. The TMB heard the presentation made by India and considered the elements put forward. The Body could not make any recommendation in addition to the conclusions it had reached at its meeting on 12-15 September 1995 (G/TMB/R/3, paragraph 26). The TMB therefore considered its review of the matter completed". (G/TMB/R/6)
India Requests the Establishment
of a Panel in March 1996
2.12 Since the matter relating
to category 440 remained unresolved, India brought the matter
before the DSB. India filed a request with the DSB on 14 March
1996 for the establishment of a panel on the restraint, pursuant
to Article XXIII:2 of GATT 1994, Article 6 of the DSU and Article
8.10 and other relevant provisions of the ATC. India requested
that the panel be established with standard terms of reference
as set out in Article 7 of the DSU (WT/DS33/1). At the meeting
held on 17 April 1996, the DSB agreed to establish the
panel in respect of category 440 with standard terms of reference
as requested by India (WT/DS33/2).
2.13 On 18 April 1996, the United
States announced the continuation of the restraint on category 440
until 17 April 1997.
2.14 On 24 June 1996, the present
Panel was constituted. (WT/DS33/2 dated 27 June 1996.)
* * * * *
III CLAIMS OF THE PARTIES
The Request of India
3.1 In its request for the establishment
of a panel (WT/DS33/1), India requested that the Panel consider
and find that:
(ii) The action of the United
States in imposing the restraint on imports of category 440 from
India nullified or impaired the benefits accruing to India under
the WTO Agreement and under GATT 1994 and the ATC in particular.
(iii) The Government of the
United States should have brought the measure into conformity
with the ATC by withdrawing the restraint imposed by it on imports
of category 440 from India.
3.2 India also requested
a supplementary finding by the Panel that:
(ii) There was no provision
in the ATC under which the United States, as the importing Member,
could have imposed a restraint with retrospective effect.
The Request of the United States
3.3 The United States
requested the Panel to find that:
(ii) the restraint was not inconsistent
with Article 2 or any other provision of the ATC; and
(iii) the measure did not nullify
and impair benefits accruing to India under the ATC or GATT 1994.
Comments on the Request
to the Panel
3.4 The United States
referred to India's request to the Panel which appeared to be
seeking a specific remedy in this dispute and expressed the opinion
that such a remedy fell outside the scope of the Panel's mandate
as provided in the DSU. India had requested that the Panel interpret
Article 19.1 of the DSU to require removal of a restraint
to bring the action "in conformity" with the relevant
agreement. The United States had taken issue with India's assertion
that bringing a safeguard action into conformity with the ATC
or, allegedly, with GATT 1994, to the extent it was relevant,
required withdrawing the restraint. What was clear was that the
DSU gave WTO panels explicit instructions with respect to
the one and only recommendation that properly may be offered if
the measures of a Member were found to be inconsistent with its
obligations: to bring the measures into conformity with its obligations.
The avoidance of granting specific remedies, such as the withdrawal
or modification of a measure, was a wellestablished practice
under GATT 1947 and had been codified in Article 19.1
of the DSU, which provided: "Where a panel or the Appellate
Body concludes that a measure is inconsistent with a covered agreement,
it shall recommend that the Member concerned bring the measure
into conformity with that agreement," rather than that the
Member "withdraw" the measure.
3.5 India noted the US
views in the preceding paragraph with concern and asked the United States
which legal options it wished to preserve by presenting them.
India stressed that it had not asked the Panel to make a recommendation
on the issue of implementation in accordance with Article 19.1,
first sentence, of the DSU, but to exercise the discretion that
the second sentence of Article 19.1 conferred upon it, namely,
that it could, in addition to its recommendations, "suggest
ways in which the Member concerned could implement the recommendations".
In the view of India, there were no alternatives as to how a
safeguard action taken inconsistently with Article 6 of the
ATC could be brought into conformity and the United States had
not been able to indicate any such alternatives. The rationale
of the second sentence of Article 19.1 of the DSU was procedural
economy; it was designed to reduce the likelihood of a second
proceeding about the implementation of the results of the first.
It would thus be perfectly consistent not only with the wording
but also the spirit of that provision if the Panel were to find
that there were no alternatives to withdrawal in the present case
and to suggest, therefore, that the United States implement the
Panel's recommendation by withdrawing the measure.
* * * * *
IV THIRD PARTY SUBMISSIONS
4.1 At the first substantive
meeting of the Panel on 10 September 1996, four Members
(Canada, EC, Norway and Pakistan) which had indicated their interests
in this matter as third parties at the DSU meeting on 17 April 1996
(DS33/2, paragraph 4) made submissions. Turkey had also
indicated its third party interests and attended the Panel meeting
but did not provide a submission.
Submission of Canada
4.2 Canada pointed out
that it had a substantial interest in several issues relating
to the interpretation of the ATC raised by the parties to the
dispute; namely, (i) the question of the ability of a Member
to maintain a restraint in the absence of an "endorsement"
by the TMB; (ii) the appropriate effective date for the
application of a restraint measure; (iii) the type of information
a Member had to submit to the TMB to justify a request for consultations
and the treatment given to additional information provided to
the TMB; and (iv) whether the Member making the request
had to specify from the outset the basis for the request.
4.3 Canada noted that
India had requested, inter alia, a supplementary finding
by the Panel that because the TMB had not specifically upheld
the safeguard action taken by the United States, this implied
that the TMB had not found the safeguard action to be justified
and, therefore, the United States had a legal obligation
to withdraw the restraint. It was Canada's view that such an
interpretation was too narrow and would unduly circumscribe the
ability of Members to take safeguard actions as provided for in
the ATC. While the TMB had a significant role to play in the
review of the safeguard actions, there was no requirement in the
ATC that the TMB had to "endorse" a safeguard action
in order for it to be maintained. On the contrary, during the
Uruguay Round negotiations leading to the ATC, several participants
had made proposals to require a positive decision of the multilateral
reviewing body (now the TMB) in order for a restraint measure
to remain in place. Canada noted that none of these proposals
had been incorporated into the ATC which reflected an implicit
rejection of the approach now advocated by India.
4.4 In the view of Canada,
if the TMB was required to specifically approve every safeguard
action taken, it would rarely be possible for any Member to avail
itself of the ATC safeguard clause because a single TMB member
could block a consensus. Such a result would clearly be at odds
with the intention of the ATC, which explicitly provided to the
Members the authority to make the determination of whether a safeguard
action was required.
4.5 Canada recalled that
India had submitted that the United States was incorrect
in imposing the restraint measure from the date of the request
for consultations with India under Article 6 of the ATC.
In this regard Canada noted that the ATC was silent with respect
to the appropriate effective date of implementation of a safeguard
action. In the absence of any specific prohibition, it was open
to an importing Member to apply the safeguard action from the
date of the request. It was more appropriate to implement the
restraint as close as possible to the date of the request so as
to avoid the possibility of having the domestic market flooded
with imports after the request, but before the consultations were
completed. A further element was that the calculation of the
restraint level, pursuant to Article 6.8 of the ATC, was
based on the MFA formula of the first 12 of the last 14 months
preceding the month in which the request for consultations was
made. The rationale for this calculation was to avoid including
in the base level what was usually the most severe part of the
import surge that had led to the request for consultations. The
calculation of this formula supported the argument that it was
more appropriate to implement any restraint as close as possible
to the date of the request for consultations.
4.6 Canada also referred
to India's submission that the review by the TMB should have been
conducted only on the basis of the information provided to India
at the time of the consultation request, rather than on supplementary
information provided by the United States to the TMB at the
time of its review. In this regard, Article 6.10 of the
ATC stated that in examining a safeguard action, the TMB shall
have at its disposal the factual data accompanying a request for
consultations as provided to the Chairman of the TMB at the time
of the request, pursuant to Article 6.7 of the ATC, "as
well as any other relevant information provided by the Members
concerned". The plain meaning of Article 6.10 of the
ATC was that the TMB, in conducting its examination, may consider
not only the information that was provided to it pursuant to Article 6.7
of the ATC, but also any additional submissions of a Member concerned.
As a practical matter, this allowed the TMB to consider the most
up-to-date data in its examination of the safeguard action, including
data that were not available at the time of the request for consultations.
4.7 With reference to India's
view that the onus of demonstrating serious damage or actual threat
was on the importing Member which must choose at the outset whether
it would claim the existence of "serious damage" or
of "actual threat thereof" and that these two categories
were not interchangeable because each category required different
supporting data, Canada noted that no distinction was made
between the definition of "serious damage" or "actual
threat thereof" in Article 6 of the ATC, nor in the
list of factors to be considered by a Member in making a determination
under Article 6.2 of the ATC. Accordingly, the practice
under the ATC had been for the Member taking such safeguard action
to allege "serious damage or actual threat thereof"
as a whole and to permit the TMB in its review under Article 6.10
of the ATC to determine whether either element, or both elements
of the standard had been satisfied. Canada considered that, when
reviewing an allegation of "serious damage or actual threat
thereof" the TMB must base its recommendations on the evidence
before it. It may find that the evidence supports a determination
of "serious damage" alone, of "actual threat"
alone, of both, or of neither. However, it did not follow that
an importing Member should be required to choose which component
of the standard to allege at the commencement of the Article 6
process. To impose such a requirement on an importing Member
would unreasonably restrict the scope of its case, and would infringe
upon the discretion of the TMB to conduct its examination and
base its recommendations on all the evidence before it.
4.8 In a subsequent submission,
India disagreed with the point in the first sentence of
paragraph 4.3, recalling that, under the MFA, the exporting
country had the right to refuse to accept a discriminatory restraint
while under the ATC, the exporting Members had lost that right.
The counterpart to that loss was the requirement of a TMB examination
and recommendation. The recourse available to importing Members
under the ATC was, therefore, not significantly different from
the recourse available to them under the MFA: the consent of
the exporting country was required under the MFA while under the
ATC, it was a TMB examination and recommendation that was required.
4.9 On the above point, the United States
disagreed with India's assertion as the MFA required TSB examination
of unilateral restraints and that the TSB make recommendations,
just as required of the TMB.
Submission of the European
Communities
4.10 The European Communities
expressed the opinion that a restraint could be justified for
either a case of imports having caused serious damage or for a
case of imports actually threatening to cause serious damage pursuant
to Article 6.2 of the ATC. Nowhere in the ATC was there
any obligation on the importing Member to choose at the beginning
of the process whether it would claim "serious damage"
or "actual threat". This was because any such obligation
would create consequences which were clearly not intended by the
ATC negotiators, namely: (i) that an importing Member claiming
"serious damage" might be persuaded by the exporting
Member during their consultations that the situation was really
one of "actual threat" but that no restraint could be
established simply because the importing Member had initially
claimed only "serious damage"; (ii) that importing
Members would, therefore, have simultaneously to request two parallel
sets of consultations, the first to discuss a restraint based
on "serious damage" and the second to discuss one based
on "actual threat". Clearly such situations did not
follow from the actual wording of the ATC and neither were they
intended by the negotiators. At another level, if the consultations
resulted in agreement under Article 6.9 of the ATC then presumable
the two parties were satisfied on this point. On the other hand,
if the consultations did not reach agreement then it would be
up to the TMB to "promptly conduct an examination of the
matter, including the determination of serious damage, or actual
threat thereof pursuant to Article 6.10 of the ATC".
In this case it would be the TMB's determination which would
matter and the option "chosen" by the importing Member
would be irrelevant.
4.11 The European Communities
considered the question of the standard of review to be of great
importance. The EC reminded the Panel that one of the most thorough
discussions of the problems relating to the standard of review
in cases involving the legal appreciation of facts in the light
of evidentiary requirements laid down in the Tokyo Round Subsidies
Code4, took place before the panel on the US countervailing
duties imposed on lead and bismuth steel originating in France,
the UK and Germany. Although that panel report was never adopted,
it contained valuable insights into the difference between the
issues to which the normal rules of treaty interpretation were
to be applied and the issues involving legal appreciation of the
facts in the light of evidentiary requirements laid down in the
relevant agreement (paragraphs 368 and 369).
4.12 The European Communities
also considered it important for the Panel to take account of
the fact that the test of reasonableness proposed by the US, even
though it was taken from the Fur Felt Hat case carried
for the US connotations of extreme deference to the judgement
of the national government. It should be noted that the panel
in Lead and Bismuth Steel said that:
The European Communities
attached great importance to an approach in these issues in the
spirit of the panel report on Lead and Bismuth Steel.
It should be clear that in the case of factual assessments by
national investigating authorities of Members in the light of
the requirements of the agreement (as interpreted in accordance
with the customary rules of interpretation of international law),
a margin of discretion should be left to these authorities, but
the Panel could not borrow from one particular legal system in
circumscribing this margin of discretion. In this case the Panel
must be inspired by the administrative law systems of the Members.
Submission of Norway
4.13 Norway stated that
its concern in this case was primarily of a systemic nature and
noted that the Panel was considering a dispute which twice, and
with consensus recommendations, had been dealt with by the TMB.
It was concerned that the effect of the case might not only be
the positive resolution of a dispute, but the undermining of future
TMB recommendations and thus the TMB's efficiency. The result
of this efficiency so far had been that quotas had been dismantled
considerably faster than what would have been possible by way
of panels. Norway questioned India's asking the panel to address
the issues of "TMB endorsement" and of "serious
damage" as opposed to "actual threat of serious damage".
On the question of retroactive implementation, it accepted India's
request for clarification.
4.14 It was the view of Norway
that both the TMB and India were wrong in claiming, with respect
to the introduction of a safeguard action, that the ATC did not
provide any indication with respect to the effective date of implementation
of a measure, although India was right in saying that there was
no "explicit authorization in the ATC's transitional safeguard
clause to impose the additional burden of retroactive application".
Norway was of the opinion that there were sufficient indications
to be found and that it was unnecessary as well as unjustifiable
to resort to Article XIII:3(b) of GATT 1994. Article 6.10
of the ATC suggested that the term "apply" was distinct
from the term "implement". Saying that a Member "... may
apply the restraint by date of import or date of export ..."
could not be read to mean the same as if the sentence had substituted
the word "implement" for "apply". The term
"apply" was concerned more with the manner of implementation
than with its effective timing. It was perfectly reasonable to
require that a measure be applied only after certain procedures
had been completed and then to allow discretion to implement the
same measure in such a way as to give it effect from a different
date. This was also indirectly supported by the fact that a measure
may be applied "within 30 days following the 60day
period for consultations". In the view of Norway it was,
therefore, legitimate to question whether one was, in fact, dealing
with a case of retroactive implementation. Another argument,
if one were indeed dealing with a retroactive measure, was the
fact that there was provision for it in the predecessor agreement,
suggesting that an explicit provision to the contrary would have
been included in the ATC if negotiators were concerned with making
a clean break with the past in this respect.
4.15 Norway also pointed
out that Article 6.10 of the ATC should be read in conjunction
with Article 6.11. If one were to accept India's arguments,
it would in all likelihood undermine the valuable consultation
procedure in Article 6.10 of the ATC and encourage importers
to introduce quotas without prior consultation, under Article 6.11
of the ATC. Norway also agreed with the US argument that India's
position would encourage an exporter to flood the importing market
with imports after the request and before consultations were completed.
Norway supported India to the extent that the matter needed clarification;
however, it disagreed with India's interpretation of the ATC
on several points and respectfully asked the Panel to give favourable
consideration to the interpretations and arguments it put forward.
Submission of Pakistan
4.16 Pakistan pointed
out that the ATC represented a balance of rights and obligations
between the exporting Members and the importing Members. The
ATC was an improvement over the MFA and even during the transitional
period the progress made in the negotiation of the ATC could not
be nullified. Pakistan urged the Panel to consider the systemic
implications of the present case from this perspective and to
reach a decision which did not in any way retard the progress
already made or impair the benefits accruing to the exporting
Members. Pakistan considered that the Panel should look into
the element of good faith on the part of authorities initiating
a safeguard action, including (a) whether the authorities
had based their decision on all available data; (b) whether
the analysis of available data was in accordance with normal and
generally recognized principles and procedures; (c) whether
there was an element of arbitrariness; and (d) whether any
action was taken on unsubstantiated presumptions. In examining
the different stages of the case it would be important to examine
whether the authorities had adopted a consistent position throughout
the different stages or whether they had changed their position
or introduced new elements at different stages of the process.
Good faith could not and should not coexist with expost
justifications.
4.17 Pakistan considered
that the Panel was required to pronounce on the distinction between
"serious damage" and "actual threat of serious
damage". While Article 6.2 and 6.3 of the ATC
listed the same economic variables to be considered in both cases,
it was also true that different analysis and information in respect
of the same economic variables would be required to prove either
serious damage or actual threat of serious damage, as the case
may be. In a case of serious damage, the analysis should clearly
demonstrate the damage that had already occurred, while in case
of a claim for actual threat of serious damage, the analysis should
include the reasons which may lead to serious damage. The Panel
should also determine what effect the introduction of new information
by parties could have on the legality of the whole proceeding.
An important step in the ATC was the consultations, which must
be based on the "specific and relevant" information
provided by the importing Member to the exporting Member under
Article 6.7 of the ATC. Any new information supplied at
the TMB's review of the safeguard action would put the exporting
Member at a great disadvantage. According to Article 6.10
of the ATC, the TMB may have "any other relevant information
provided by the Member concerned", but this could not be
interpreted to mean new information. Whenever any new information
was introduced, the legal process should start afresh. New information
introduced at the time of the TMB's review could be: (i) information
pertaining to the period after the request for consultations was
issued and should not be relevant to the case in question; (ii) information
available earlier but not used, which demonstrated a lack of serious
effort which would not support the contention of good faith;
or (iii) information pertaining to the period before the
request for consultations was issued but not available at the
time of the request. This would also be an expost justification
and would put the exporting Member at a disadvantage which could
be rectified only by issuing a fresh request for consultations.
* * * * * TO CONTINUE WITH USA - MEASURE AFFECTING IMPORTS OF WOVEN WOOL SHIRTS AND BLOUSES FROM INDIA
1 Arrangement Regarding International Trade in Textiles (the "Multifibre Arrangement" or "MFA"). 2 The action by the United States also covered two other product categories, wool coats etc. for men and boys (category 434 of Group III) and wool coats etc. for women and girls (category 435 of Group III) which are not part of this matter. 3 Restraints were also applied on categories 434 and 435, and at its session on 28 August to 1 September 1995, the TMB examined all three actions. For category 434, the TMB found that "serious damage, or actual threat thereof, had not been demonstrated and recommended that the United States rescind the measure". The United States rescinded the measure. For category 435, the TMB found that serious damage had not been demonstrated, but could not reach consensus on the existence of actual threat of serious damage. The TMB again reviewed the matter relating to category 435 which had been referred to it by India under Article 8.6 of the ATC during its meeting on 13-17 November 1995. However, the Body could not make any recommendations in addition to the conclusions it had reached during its earlier meeting. Since the matter relating to category 435 remained unresolved by the TMB, India brought the matter before the Dispute Settlement Body (DSB). On 23 April 1996, India was informed that the United States had removed the restraints on category 435 through a notification in the Federal Register on 23 April 1996. In the light of this, India terminated further action under the DSU without prejudice to its stand on the inconsistency of the US measure or on the various factual and legal issues outlined by India in its request for establishment of a panel. 4 Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade. |
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