World Trade Organization Appeal Proceedings INDONESIA SAFEGUARD ON CERTAIN IRON OR STEEL PRODUCTS (DS490/DS496) (AB )
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1 Please check against delivery World Trade Organization Appeal Proceedings INDONESIA SAFEGUARD ON CERTAIN IRON OR STEEL PRODUCTS (DS490/DS496) (AB ) European Union Third Participant Opening Statement Geneva, 8 May 2018
2 N 1. Presiding member, members of the Division, We thank you, and the Secretariat assisting you, for your work on this appeal. Our oral statement focusses on a couple of specific issues, under the DSU and under the Agreement on Safeguards. 1. Issues under tue DSU 2. A panel's obligation to "make an objective assessment" pursuant to Article 11 of the DSU includes the assessment of the applicability of the relevant agreement. Where it has doubts, a panel must consider, as a threshold matter, the qualification of the measure at issue, even if the issue is not disputed between the parties. This rule applies with respect to other WTO agreements, such as the Anti-Dumping Agreement, the SCM Agreement and the SPS Agreement. We see no reason why it would not also apply with respect to the Agreement on Safeguards. 3. Contrary to the legal characterisation of a measure, claims can only be considered if, and to the extent that, they have been made by the complainant - i.e., identified in the panel request. In the EU's view, the standalone MFN claim has not been validly made in the panel requests. In the panel requests, the alleged MFN violation was conditioned upon the applicability of the Agreement on Safeguards, being in essence a consequential violation of Article 9.1 thereof. In examining the - fundamentally different - standalone MFN claim, the Panel exceeded its terms of reference. 4. The EU would like to insist on the importance of clear and complete panel requests. If panel requests are deficient, it is not for a panel to cure these deficiencies by reference to later submissions, by asking questions or by reinterpreting the panel requests. If a panel makes findings on a claim that the complainant cannot be considered to have made in its panel request, it makes a finding on a matter that is not before it and acts ultra petita. There is a clear prohibition on panels to make the case for a complainant1, and the EU attaches great importance to it. See, for instance, Appellate Body Reports, Chile - Price Band System, para. 168; Japan - Agricultural Products II, paras
3 5. Panel requests must explain how and why the measure at issue violates the provisions it allegedly breaches2, i.e., "plainly connect the challenged measure(s) with the provision(s) of the covered agreements claimed to have been infringed"3. Depending on the nature of the alleged violation, simply citing provisions may not be precise enough, and the nature of the complaint cannot be presented clearly without some additional identification of the main elements of the alleged violation(s)4. 6. Where a violation of Article 1:1 of the GATT 1994 is invoked in the context of another Agreement which contains MFN-related rules, the relationship between Article 1:1 and that Agreement is a relevant factor that requires further explanation in the panel request. This is true for the present case, where the applicability of Article 9.1 of the Agreement on Safeguards fundamentally changes the nature of the MFN-claim. Another example are MFNclaims in the field of Anti-dumping, as Article VI:2 of the GATT 1994 permits the imposition of anti-dumping duties, which may otherwise be inconsistent with Article I: l5. П. Specific issues under the Agreement on Safeguards 7. This dispute also raises systemic issues related to the Agreement on Safeguards. 8. The EU recalls that the nature of a measure can be discerned by examining its 'design', including its content, structure and expected operation.6 A Member's subjective characterisation of a measure is not dispositive, as the characterisation of a measure by a Member is not self-determining but rather objective.7 This also applies to safeguards. An adopting Member's characterisation of a measure as a safeguard or not is neither a sufficient nor necessary basis on which to make an objective determination about the applicability of the relevant covered agreements. The objective characterisation of a measure, and consequently the applicable covered agreements, may have other important legal therein. Appellate Body Report, US - Countervailing and Anti-Damping Measures (China), para. 4.9 and citations 3 Appellate Body Report, US Oil Country Tubular Goods Sunset Reviews, para See the recent Panel Report, Korea - Pneumatic Valves, para Appellate Body Report, EC - Fasteners (China), paras E.g. Appellate Body Report, EC - Seal Products, para Appellate Body Report, US Large Civil Aircraft (2nd complaint), para. 593; Appellate Body Report, Canada Renewable Energy / Canada Feed-in Tariff Program, para
4 consequences, including, for example, in the case of safeguards, the rights of other Members to counterbalance pursuant to Article XLX:3(a) of the GATT 1994 and Article 8 of the Agreement on Safeguards. 9. Article 1 of the Agreement on Safeguards specifies that "safeguard measures" "shall be understood to mean those measures provided for in Article XIX of GATT 1994". 10. The features defining a safeguard measure must be distinguished from the conditions that need to be fulfilled for a safeguard measure to be WTO consistent under Article XIX of the GATT 1994 and the Agreement on Safeguards. If such distinction would not be made, a Member could seek to take its measures outside the scope of Article XIX and the Agreement on Safeguards by simply not complying with one or several of the conditions, and then arguing that the measure should not be defined as a safeguard measure, to which Article XIX and the Agreement on Safeguards are applicable. However, depending on the circumstances of a particular case, factors referenced in such conditions might nevertheless provide additional or secondary indicators relevant to the characterization of the particular measure at issue. 11. The EU submits that a safeguard measure has the following defining features: it is a measure provided for in Article XIX of GATT By the terms of that provision, it is anchored in an "obligation incurred by a (Member)", which we understand to relate to "any product being imported". It also constitutes an action on "imports of particular products", those being the same products as the "product being imported".9 Also by the terms of that provision, it involves the suspension of that obligation in whole or in part or the withdrawal or modification of the concession relating to that product. 12. Normally, one would expect the measure to reflect the other elements of Article XIX of the GATT That is, one would expect it to be in the nature of emergency action, and responsive to increased imports that are the result of unforeseen developments and the effect of the obligations incurred, and such as to cause or threaten injury to domestic producers. However, these elements are rather in the nature of conditions as opposed to defining characteristics. We would tend to take the view that failure to comply with one or more of 8 Article 1 of the Agreement on Safeguards. Panel Report, para. 7.16, referring to Panel Report, Dominican Republic - Safeguard Measures, para
5 these conditions would have as a consequence that the measure would be inconsistent with Article XIX and the Agreement on Safeguards, not that the measure would thereby fall outside the scope of these provisions. 13. In the analysis of applicability, that is, in the analysis of whether or not the measure exhibits the defining characteristics of a safeguard measure, we would expect an objective analysis of the revealing design and architecture of the measure to have an important role to play. Normally, we would expect that to indicate that the measure has as its objective purpose to safeguard (or protect) the importing Member's domestic industry from injury (of an economic or commercial nature) by restricting the importation of like or directly competitive products, whether or not it actually has those effects. However, in conducting such an objective assessment, an adjudicator would have to exercise care in order to ensure that the focus remains on the question of what the defining characteristics of a safeguard measure are, and does not stray into the error of reasoning that, because one or more of the conditions is not complied with, the measure is taken outside the scope of the applicable disciplines. 14. Also in the analysis of applicability', we would expect an adjudicator to take into consideration the treaty terms that determine the applicability of other covered agreements, such as the Anti-Dumping Agreement or the SCM Agreement. 15. We are looking forward to any questions you might have. 4
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