European Communities ± measures Affecting Asbestos and

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OUTLINE
INTRODUCTION ........................................................................................................................... 3
THE PANEL’S INTERPRETATION OF THE TERMS “LIKE PRODUCTS” IN
ARTICLE III:4 OF GATT 94 IS AN ERROR IN LAW ........................................................ 4
THE
1.1.
The Panel’s approach to the issue of likeness ............................................................. 4
1.2.
The Panel’s interpretation of the term “like products” in Article III.4 of
GATT 94 is erroneous and inconsistent with established case law............................. 7
1.3.
The Panel failed to compare the category of products claimed by Canada to
be “like” products (three fibre-cement substitute products for certain
industrial applications) with the category of products prohibited by the
French Decree at issue (all carcinogenic asbestos fibres) ......................................... 10
1.4.
The Panel committed an error of law in disregarding the reason for which
the French Decree at issue singled out for specific regulatory treatment all
kinds of carcinogenic asbestos fibres......................................................................... 15
1.5.
The Panel’s determination of “like” products is an error in law because it is
based on a misconception of the relationship between Article III.4 and
Article XX of GATT 94............................................................................................. 20
1.6.
Summary of the EC’s appellant claims concerning the Panel’s findings on
“like products” under Article III.4 of GATT 94 ........................................................ 27
PANEL’S APPROACH TO THE INTERPRETATION OF ARTICLE
XXXIII:1(B) OF GATT 94 IS AN ERROR IN LAW IN REGARD TO THE
FINDING OF PRINCIPLE THAT “LEGITIMATE EXPECTATIONS” CAN BE
RAISED FOR A MEASURE JUSTIFIED UNDER ARTICLE XX OF GATT 94 ............. 28
1.7.
The Panel’s finding appealed by the EC in this case................................................. 28
1.8.
The Panel’s reasoning is inconsistent with the system of GATT 94 and past
practice and relevant case law ................................................................................... 31
1.9.
The Panel’s interpretation failed to determine the scope of the benefits that
accrue to Canada under GATT 94 in accordance with its context, object and
purpose....................................................................................................................... 34
1.10. The Panel’s interpretation is contrary to other principles of customary
international law concerning treaty interpretation..................................................... 39
CONCLUSIONS ........................................................................................................................... 42
2
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1. The European Communities (hereinafter "EC") consider that the conclusions of the
Panel in this case and most of the legal reasoning on which they are based are
generally accurate and satisfactory. The EC’s counter-appeal is, therefore, limited to
some specific legal findings and certain issues of systemic or interpretative
importance that they regard as not being correctly assessed by the Panel and which
are not raised by Canada’s appeal.
2. In raising these issues in this appeal, the EC respectfully request the Appellate Body
to reverse the conclusion of the Panel in paragraph 9.1 (b) and (c) of the Report and
the legal reasoning on which they are based, namely that:
b) The Panel concludes that chrysotile asbestos fibres as such and fibres that can
be substituted for them as such are like products within the meaning of Article
III:4 of the GATT 1994. Similarly, the Panel concludes that the asbestoscement products and the fibre-cement products for which sufficient
information has been submitted to the Panel are like products within the
meaning of Article III:4 of the GATT 1994.
c) With respect to the products found to be like, the Panel concludes that the
Decree violates Article III:4 of the GATT 1994.
3. The EC appeals also the Panel’s finding in paragraphs 8.262, 8.264, 8.273 and 8.274
of the Report relating to the role of non-violation complaints. The EC consider that
the findings in those paragraphs and the legal reasoning on which they are based are
errors in law and legal interpretation by the Panel, and respectfully requests the
Appellate Body to reverse them. However, the EC agrees with the Panel’s reasoning
in paragraphs 8.275-8.304 of the Report and concurs with its final conclusion in
paragraphs 8.304 and 9.1(e) of the Report that Canada has not established in this case
that it suffered non-violation nullification or impairment of a benefit within the
meaning of Article XXIII:1(b) of GATT 94. As Canada did not appeal the Panel’s
conclusion on its non-violation claim, this is not an issue before the Appellate Body.
4. As a matter of law, the EC consider that the Panel reached the conclusions in
paragraphs 9.1 (b) and (c) of the Report on the basis of novel interpretations of
Article III:4 and XXIII:1(b) of GATT 94 that encroach upon the right of WTO
Members to adopt domestic regulations serving legitimate, non-protectionist
objectives. If the Panel’s interpretation were to be accepted, a whole range of
legitimate, non-protectionist regulatory measures taken for public policy objectives,
other than those mentioned in Article XX of GATT 94, would run the risk of being
found to be inconsistent with the GATT 94 and the WTO system. Moreover, WTO
Members would be seriously prevented from responding to new scientific knowledge
concerning risks to health from dangerous products, because they are likely to be
faced with demands under Article XXIII:1(b) for trade compensation or even
retaliatory action by Members claiming to be affected. Endorsing the Panel’s
reasoning and its legal interpretations on these issues would also extend the reach of
WTO law to regulatory areas far and clearly beyond the agreed object and purpose of
3
the WTO Agreements. Conversely, reversing the Panel’s conclusions on these issues
is, in the view of the EC, likely to enhance the legitimacy and public acceptability of
the WTO.
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5. France adopted in 1996 Decree No. 96-1133 prohibiting any kind of asbestos fibres
and products containing such fibres, including chrysotile fibres. Canada claimed
before the Panel that cement products containing chrysotile fibres and certain other
products containing fibres used as substitutes for chrysotile fibres, namely polyvinyl
alcohol (PVA), cellulose and glass fibres, were “like products” within the meaning of
Article III:4 of GATT 94, and that the French prohibition was consequently
inconsistent with that provision.
6. The EC argued that it has been scientifically established that chrysotile fibres, unlike
the substitute fibres mentioned by Canada, tend to break up into extremely fine
particles that can penetrate the pulmonary alveoli and cause, LQWHUDOLD, lung cancers
and mesotheliomas. Since 1977, the WHO and other competent institutions have
classified asbestos fibres in category 1 of proven carcinogens, while none of the
substitute products referred to by Canada is classified in that category as a
carcinogenic substance. The nature, composition, physical properties and proven
effects on human health of asbestos (including chrysotile) made it a product radically
different from the substitute products referred to by Canada. Chrysotile fibres and
substitute fibres should, therefore, in the view of the EC, not be deemed to be “like
products” within the meaning of Article III:4 of GATT 94.
7. Canada claimed that the nature of chrysotile fibres and of the substitute fibres is the
same because they are all fibres with similar end uses. These products should be
considered like despite their differing impact on human health. In Canada’s view,
there was no contradiction in distinguishing between two types of fibres on scientific
grounds and in accordance to their pathogenicity, on the one hand, and when applying
the criteria derived from WTO and GATT practice and case law in determining
whether these products are “like products”, on the other. The toxicity of a product
should not be recognised as a criterion for determining “likeness” in Article III.4 of
GATT 94.
8. The Panel found that chrysotile fibres, on the one hand, and PVA, cellulose and glass
fibres, on the other, are like products within the meaning of Article III:4 of the GATT
1994.1 The Panel finding is based essentially on the following reasons:
• “…[T]he context for the application of Article III:4 is not a scientific classification
exercise. The objective of Article III concerns PDUNHWDFFHVV for products. Its purpose
1
Panel Report on $VEHVWRVpara. 8.126.
4
is to prevent internal measures from being applied in such a way as to protect domestic
production. Article III:4 upholds this objective in respect of laws, regulations and
requirements affecting the sale, marketing, purchase, transportation, distribution and
use of products on the domestic market…It is thus with a view to PDUNHWDFFHVV that
the properties, nature and quality of imported and domestic products have to be
evaluated.”2
• “…In the context of market access, it is not necessary for domestic products to possess
all the properties of the imported product in order to be a like product. It suffices that,
for a given utilization, the properties are the same to the extent that one product can
replace the other. If the properties of products always had to be the same, the category
of like products would be very small, sometimes even just one product. We note in
this connection that the Panel in -DSDQ ± &XVWRPV 'XWLHV 7D[HV DQG /DEHOOLQJ
3UDFWLFHV RQ ,PSRUWHG :LQHV DQG $OFRKROLF %HYHUDJHV considered that gin, vodka,
whisky, brandy, liqueurs, still wine and sparkling wine should be considered as like
products within the meaning of Article III:2 in view of their similar properties and
end-uses, we consider that this Report upholds our approach. If products whose nature
is not exactly the same and whose properties are not always identical, for example
wine on the one hand and whisky on the other, can be considered like products, the
same approach can be followed pursuant to Article III:4 for chrysotile fibres on the
one hand and PVA, cellulose and glass fibres on the other.”3
• “In this case, even if the HQGXVHV of chrysotile fibres on the one hand and
PVA, cellulose and glass fibres on the other DUH RQO\ WKH VDPH IRU D VPDOO
QXPEHU RI WKHLU UHVSHFWLYH DSSOLFDWLRQV in some cases the applications are
similar. Their properties are then equivalent, if not identical. This is the
juncture of interest to us, the moment when the products are used for the same
purpose. As we have already mentioned above, the criteria proposed for
determining likeness should not be examined in isolation. In this particular
case, we consider that WKH HQGXVH RI WKH SURGXFWV VKRXOG DIIHFW WKH ZD\ LQ
ZKLFKZHH[DPLQHWKHSURSHUWLHVRIWKHILEUHVFRPSDUHG, inasmuch as none of
the fibres mentioned by Canada always fulfils the same functions.”4
9. The Panel concluded that “…bearing in mind the RYHUDOO HFRQRP\ of the WTO
Agreement, in particular the relationship between Article III and Article XX(b), it is
not appropriate to apply WKH µULVN¶ FULWHULRQ proposed by the EC, neither in the
criterion relating to the properties, nature and quality of the product, nor in the other
likeness criteria invoked by the parties.”5
2
Panel Report on $VEHVWRVpara. 8.122 (emphasis added, footnotes omitted).
3
Panel Report on $VEHVWRVpara. 8.124 (footnotes omitted).
4
Panel Report on $VEHVWRVpara. 8.125 (emphasis added).
5
Panel Report on $VEHVWRV, para. 8.132 (emphasis added).
5
10. The Panel based its conclusion on the proposition that Article XX’s “primordial role
is to ensure that a certain number of disciplines are applied to domestic trade
regulations. Article XX of the GATT, however, recognises that certain interests may
take precedence over the rules governing international trade and authorises the
adoption of trade measures aimed at preserving these interests while at the same time
observing certain criteria”.6 In the view of the Panel:
• “We consider that introducing a criterion on the risk of a product into the
analysis of likeness within the meaning of Article III would ODUJHO\QXOOLI\WKH
HIIHFW of Article XX(b). The protection of human health and life is specifically
covered by this Article. Article III, on the other hand, does not refer to this.
The burden of proof would not of course be greatly modified because the EC
would still have to prove the risk of the product, applying the principle of
SUREDWLRLQFXPELWHMXVTXHGL[LWWe nevertheless consider that other aspects
that form part of the rights and obligations negotiated by the Members would
be affected. Introducing the protection of human health and life into the
likeness criteria ZRXOGDOORZWKH0HPEHUFRQFHUQHGWRDYRLGWKHREOLJDWLRQV
in Article XX, particularly the test of necessity for the measure under
paragraph (b) and the control exerted by the introductory clause to Article XX
concerning any abuse of Article XX(b) when applying the measure. As the
Appellate Body has emphasized on a number of occasions, all these provisions
in the WTO Agreement must be given meaning. Introducing a risk criterion
into the examination of likeness under Article III would be contrary to this
basic principle of interpretation”.7
11. The Panel’s approach is of serious concern to the EC because the fact that chrysotile
fibres are established to be carcinogenic, while the three substitute fibres referred to
by Canada are not, was found by the Panel to be irrelevant in terms of market access
and was, consequently, not taken into account in determining their “likeness”. The
Panel stated that it was in the context of Article XX that “certain interests may take
precedence over the rules governing international trade”. Consequently, the
legitimate public policy objective of protecting human health, ZKLFK LV WKH )UHQFK
'HFUHH¶VH[FOXVLYHEDVLVRQZKLFKWKHUHJXODWRU\GLVWLQFWLRQWRSURKLELWDVEHVWRV
LVPDGH could be taken into account only in the context of Article XX of GATT 94.
The legal implication of this is that domestic regulators are allowed to distinguish
commercially similar or equivalent products only for the very few policy objectives
mentioned in Article XX of GATT 94. In addition, they are to bear the burden of
demonstrating the necessity of such origin-neutral and indistinctly applied measures
to protect human health, whereas one would have reasonably expected that the burden
should be placed primarily on the complaining party to establish the safety of the
product it wishes to export.
12. The reality is that domestic regulators of WTO Members frequently GLVWLQJXLVKIRU
VSHFLILF UHJXODWRU\ WUHDWPHQW commercially similar or equivalent products for a
6
Panel Report on $VEHVWRV, para. 8.129.
7
Panel Report on $VEHVWRV, para. 8.13 (emphasis added, footnotes omitted).
6
number of entirely legitimate, non-protectionist public policy reasons, some of which
are not mentioned in Article XX of GATT 94. The EC will demonstrate in this
appeal that the Panel’s approach is incompatible with the ordinary meaning of the
terms of Article III.4, in context and in light of their object and purpose, as well as
with the Appellate Body’s established jurisprudence. But more importantly, if the
Panel’s interpretation of likeness were to be accepted, it would extend the reach of
GATT 94 into areas of origin-neutral, non-discriminatory applied measures that are
clearly beyond the WTO’s agreed object and purpose.8
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The Appellate Body has so far not had the opportunity to made a specific ruling on
the concept of “like products” in Article III:4 of GATT 94. However, the Appellate
Body gave panels the following general guidance on the approach to follow in
deciding the likeness issue in Article III in the -DSDQ$OFRKROLF%HYHUDJHVcase:9
• The concept of “likeness” is different in the various provisions of the :72
$JUHHPHQW. Its meaning must therefore be determined by the particular
provision in which the term “like” is encountered;
• The panel must take into account the context and the circumstances that
prevail in any given case to which the relevant provision applies;
• There can be no one precise and absolute definition of what is ‘like”;
• No one approach to exercising judgement will be appropriate for all cases;
• The criteria suggested by the 1970 Working Party on %RUGHU 7D[
$GMXVWPHQWV10 and followed in almost all adopted panel reports,11 should be
examined, that is the product's end-uses in a given market; consumers' tastes
and habits, which change from country to country; the product's properties,
nature and quality;
8
The EC notes that the United States, in its third-party submission to the Panel, takes a similar position
(Panel Report on $VEHVWRV, at para. 4.65).
9
The citations that follow are taken from the Appellate Body report on -DSDQ 7D[HV RQ $OFRKROLF
%HYHUDJHV,WT/DS8/R, Section VIII. A. 1.
10
Report of the Working Party on %RUGHU7D[$GMXVWPHQWV, BISD 18S/97, para. 18.
11
7KH $XVWUDOLDQ 6XEVLG\ RQ $PPRQLXP 6XOSKDWH, BISD II/188; ((& 0HDVXUHV RQ $QLPDO )HHG
3URWHLQV, BISD 25S/49; 6SDLQ 7DULII 7UHDWPHQW RI 8QURDVWHG &RIIHH, BISD 28S/102; -DSDQ &XVWRPV 'XWLHV 7D[HV DQG /DEHOOLQJ 3UDFWLFHV RQ ,PSRUWHG :LQHV DQG $OFRKROLF %HYHUDJHV, BISD
34S/83; 8QLWHG6WDWHV7D[HVRQ3HWUROHXPDQG&HUWDLQ,PSRUWHG6XEVWDQFHV, BISD 34S/136. See
also 8QLWHG6WDWHV6WDQGDUGVIRU5HIRUPXODWHGDQG&RQYHQWLRQDO*DVROLQH, WT/DS2/9, adopted on
20 May 1996.
7
• In applying the criteria cited in the %RUGHU7D[$GMXVWPHQWV report to the facts
of any particular case, panels should use their best judgement in determining
whether in fact products are “like”;
• Panels should also apply “other criteria that may also be relevant in certain
cases”.
14. Article III:1 of GATT 94 declares that internal charges and regulations “should not be
applied to imported or domestic products so as to afford protection to domestic
production”. The Appellate Body ruled as follows on the relationship between this
provision and the remainder provision of Article III:
“Article III:1 articulates a general principle that internal measures should
not be applied so as to afford protection to domestic production. 7KLV
JHQHUDOSULQFLSOHLQIRUPVWKHUHVWRI$UWLFOH,,,. The purpose of Article
III:1 is to establish this general principle as a guide to understanding and
interpreting the specific obligations contained in Article III:2 and in the
other paragraphs of Article III, while respecting, and not diminishing in
any way, the meaning of the words actually used in the texts of those other
paragraphs. ,Q VKRUW $UWLFOH ,,, FRQVWLWXWHV SDUW RI WKH FRQWH[W RI
$UWLFOH ,,, LQ WKH VDPH ZD\ WKDW LW FRQVWLWXWHV SDUW RI WKH FRQWH[W RI
HDFKRIWKHRWKHUSDUDJUDSKVLQ$UWLFOH,,, Any other reading of Article
III would have the effect of rendering the words of Article III:1
meaningless, thereby violating the fundamental principle of effectiveness
in treaty interpretation.”12
15. The Appellate Body cited again with approval the above findings in the .RUHD ±
7D[HVRQ$OFRKROLF%HYHUDJHV report.13 It highlighted once again in that report that:
“Article III:1 sets forth the principle "that internal taxes … should not be applied
to imported or domestic products so as to afford protection to domestic
production." It is in the light of this principle, ZKLFKHPERGLHVWKHREMHFWDQG
SXUSRVH RI WKH ZKROH RI $UWLFOH ,,,, that the term "directly competitive and
substitutable" must be read. . As we said in -DSDQ±$OFRKROLF%HYHUDJHV:
“The broad and fundamental purpose of Article III is to DYRLGSURWHFWLRQLVP in
the application of internal tax and regulatory measures. … Toward this end,
Article III obliges Members of the WTO to SURYLGH HTXDOLW\ RI FRPSHWLWLYH
FRQGLWLRQV for imported products in relation to domestic products. …
Moreover, it is irrelevant that the "trade effects" of the tax differential
between imported and domestic products, as reflected in the volumes of
imports, are insignificant or even non-existent;
Article III SURWHFWV
12
Appellate Body report on -DSDQ7D[HVRQ$OFRKROLF%HYHUDJHV, at page 16 (emphasis added).
13
Appellate Body report on .RUHD ± 7D[HV RQ $OFRKROLF %HYHUDJHV WT/DS75 and WT/DS84 of 18
January 1999, at para. 119 and 120.
8
H[SHFWDWLRQV not of any particular trade volume but rather of the HTXDO
FRPSHWLWLYHUHODWLRQVKLS between imported and domestic products.”14
16. As we will show below, the Panel interpreted in the present case the terms “like
products” in Article III.4 in a way that is not compatible with the context of Article III
of GATT 94 and its more specific object and purpose, because it analysed these terms
exclusively in the light and for the purpose of ensuring market access for products
rather than for the purpose of providing equality of competitive conditions for
imported products in relation to like domestic products. The Panel’s approach
wrongfully appreciated the relevant context of Article III and, consequently,
disregarded the basic object and purpose of the WTO Agreement. The Appellate
Body has underlined several times that the Members of the WTO have “sovereign
authority” to determine the basis or bases on which they will impose tax or regulatory
measures. For example, in the -DSDQ±$OFRKROLF%HYHUDJHV report, it said:
“Members of the WTO are free to pursue their own domestic goals through
internal taxation or regulation so long as they do not do so in a way that violates
Article III or any of the other commitments they have made in the WTO
Agreement”.15
17. Broadly speaking, one of the difficulties arising in the interpretation of Article III
stems from the fact that the two sentences of Article III:2 governing internal taxes and
charges make a clear distinction between “like products” and “directly competitive or
substitutable products”, but refer to the general principle set out in Article III:1 only
with respect to the latter category of products. Conversely, Article III:4 governing
internal regulations, does not distinguish between “like products” and “directly
competitive or substitutable products” nor does it explicitly refer to the general
principle set out in Article III:1.
18. The Appellate Body concluded that the omission of any reference to Article III:1 in
the first sentence of Article III:2 of GATT 94 must be interpreted to have some
meaning:
“…The significance of this distinction lies in the fact that whereas Article III:1
acts implicitly in addressing the two issues that must be considered in applying
the first sentence, it acts explicitly as an entirely separate issue that must be
addressed along with two other issues that are raised in applying the second
sentence.”16
“We believe the meaning is simply that the presence of a protective application
need not be established separately from the specific requirements that are
14
Ibid., at para. 119 (emphasis added, footnote omitted).
15
Appellate Body report on -DSDQ7D[HVRQ$OFRKROLF%HYHUDJHV, at page 16.
16
Appellate Body report on -DSDQ7D[HVRQ$OFRKROLF%HYHUDJHV, at page 24.
9
included in the first sentence in order to show that a tax measure is inconsistent
with the general principle set out in the first sentence”.17
19. The legal implications of the above finding for the purpose of interpreting Article
III.4 have been clarified by the Appellate Body in the (&%DQDQDV case,18 where it
said that the same reasoning must be applied to the interpretation of Article III:4:
“Article III:4 does QRW specifically refer to Article III:1.
Therefore, a
determination of whether there has been a violation of Article III:4 does QRW
require a separate consideration of whether a measure “afford[s] protection to
domestic production”.19
20. It is consequently clear from the Appellate Body’s rulings that a Member claiming
violation of Article III:4 of GATT 94 need not demonstrate that the measure at issue
affords protection to domestic production. However, it is equally clear that Article
III:1 informs Article III:4 and acts implicitly in addressing the issue of likeness in
Article III:4. Panels, in attempting to give meaning to the terms “like products” in
Article III:4, should therefore not ignore the relevance of Article III:1. Article III:1
defines unambiguously the context, object and purpose of the whole Article III,
which, as explained above, is to SURYLGH HTXDOLW\ RI FRPSHWLWLYH FRQGLWLRQV for
imported products in relation to domestic products. An interpretation of the terms
“like products” in Article III:4 that actually or potentially expands that scope of
application of this provision beyond its object and purpose is an error in law because
it fails to give effect to a treaty provision.
7KH 3DQHO IDLOHG WR FRPSDUH WKH FDWHJRU\ RI SURGXFWV FODLPHG E\
&DQDGD WR EH ³OLNH´ SURGXFWV WKUHH ILEUHFHPHQW VXEVWLWXWH SURGXFWV
IRU FHUWDLQ LQGXVWULDO DSSOLFDWLRQV ZLWK WKH FDWHJRU\ RI SURGXFWV
SURKLELWHG E\ WKH )UHQFK 'HFUHH DW LVVXH DOO FDUFLQRJHQLF DVEHVWRV
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21. The EC is of the view that the Panel’s interpretation failed to abide by the above
principles enunciated by the Appellate Body in regard to the interpretation of the
terms “like products” in Article III.4 of GATT 94.
22. The French Decree in question prohibited all asbestos fibres, including chrysotile
fibres, because they were scientifically proven to be dangerous to human health and
were classified as proven carcinogenic substances. This scientific evaluation of all
kinds of asbestos is not disputed in the international scientific community, as the four
scientists consulted by the Panel in this case have unanimously and unambiguously
17
Ibid., at page 17.
18
Appellate Body report on (XURSHDQ&RPPXQLWLHV±5HJLPHIRUWKH,PSRUWDWLRQ6DOHDQG'LVWULEXWLRQ
RI%DQDQDV WT/DS27 of 9 September 1997, AB-1997-3.
19
Ibid., at para.216 (emphasis in the original).
10
confirmed. This is not disputed even by Canada in the present case, since it
acknowledges the carcinogenic nature of asbestos and only argues that the so-called
“controlled-use” could achieve France’s chosen level of health protection. It bears
repetition that the basic French prohibition applies irrespective of the possible
industrial application of all asbestos fibres (except for the transitional exceptions laid
down in the French Decree itself), because its exclusive objective is to protect human
health. The entire category of products which are subject to the French prohibition
can, therefore, be correctly described as “FDUFLQRJHQLFDVEHVWRVILEUHV´.
23. Canada contented before the Panel that only certain VXEVWLWXWHILEUHFHPHQWSURGXFWV,
i.e. certain cement products containing polyvinyl alcohol (PVA), cellulose and glass
fibres, are “like” the banned carcinogenic asbestos fibres, i.e. the high density
chrysotile-cement products, because they are used in certain industrial applications as
substitutes for chrysotile fibre-cement products.20
24. The EC argued that in its request for consultations and its request for the
establishment of a panel, Canada never claimed that this dispute concerned highdensity cement products containing chrysotile. The Panel’s terms of reference do not
refer to these products either. Moreover, the EC point out that Canada only exported
chrysotile asbestos as a raw material and not in the form of high-density cement
products containing chrysotile.21
25. Against this background of claims and arguments of the parties, the Panel unilaterally
decided to extend the scope of its mandate in regard to product coverage for the
purpose of Article III.4 by examining four categories of products:
– Chrysotile fibres;
– PVA, cellulose and glass fibres taken separately (i.e. not incorporated in a
product);
– Chrysotile-cement products;
– Fibre-cement substitute products (containing only one or the other of the above
three fibres).22
26. For the purpose of Article III.4 of GATT 94, the Panel then concluded that they are
like because:
– Chrysotile fibres, on the one hand, and PVA, cellulose and glass fibres, on the
other, are, in certain circumstances, similar in properties, nature and quality,
and that these products have similar end-uses;23
20
Panel report on $VEHVWRV, at paras. 8.105 and 8.109.
21
Panel report on $VEHVWRV, at paras. 8.106 and 8.110.
22
Panel report on $VEHVWRV, at para. 8.111.
11
– Chrysotile-fibre products and fibre-cement products are like products.24
27. The above phrase “LQFHUWDLQFLUFXPVWDQFHV”, employed in the analysis of the Panel,
means that chrysotile fibres were found to be “like” those substitute fibres only for
certain of their industrial applications.25 The Panel explained its reasoning as
follows:
³In this case, even if the HQGXVHV of chrysotile fibres on the one hand and PVA,
cellulose and glass fibres on the other DUHRQO\WKHVDPHIRUDVPDOOQXPEHURI
WKHLUUHVSHFWLYHDSSOLFDWLRQVLQVRPHFDVHVWKHDSSOLFDWLRQVDUHVLPLODU. Their
properties are then equivalent, if not identical. This is the juncture of interest to
us, the moment when the products are used for the same purpose. As we have
already mentioned above, the criteria proposed for determining likeness should
not be examined in isolation. In this particular case, we consider that WKHHQGXVH
RIWKHSURGXFWVVKRXOGDIIHFWWKHZD\LQZKLFKZHH[DPLQHWKHSURSHUWLHVRIWKH
ILEUHVFRPSDUHGLQDVPXFKDVQRQHRIWKHILEUHVPHQWLRQHGE\&DQDGDDOZD\V
IXOILOVWKHVDPHIXQFWLRQV´26
28. The EC consider that the Panel erred in law in interpreting so narrowly the criteria of
properties and end-use, while at the same time nearly ignoring the other criteria of
nature, quality, consumer taste and tariff classification. The EC consider that the
Panel also erred in law by placing so much, if not exclusive, importance on just one
(i.e. end-use) of the four criteria employed constantly by Panels to decide likeness.
This created a certain hierarchy among the four criteria and incorrectly privileged the
end-use criterion at the expense of all others. This method of analysis is in stark
contrast to established case law and is in itself sufficient to reverse the Panel’s
findings on the issue of “likeness”. The $11(;attached to the present submission
elaborates in more detail these arguments of the EC.
29. The EC believe that it was unfounded and arbitrary for the Panel to compare the
products at issue DV ILEUHV VHUYLQJ FHUWDLQ LQGXVWULDO XVHV for the purpose of
deciding likeness. It is true that the products mentioned by Canada and the chrysotile
fibres have certain similar or common industrial applications (for instance, they can
both be used for water pipes, thermal insulation, roofing, etc.). However, the evident
and undisputed purpose of the French prohibition, as set out in the Decree at issue, is
not to apply to fibres with certain (particular) industrial applications. It applies to all
asbestos fibres whose common characteristic is that they are proven to be
carcinogenic. 7KLVLVWKHVROHJURXQGWKHVROHEDVLVRQZKLFKWKH)UHQFK'HFUHH
VLQJOHVRXWWKHVHDVEHVWRVILEUHVIRUSDUWLFXODUWUHDWPHQWLHIRUWKHKRUL]RQWDO
DQG WRWDO SURKLELWLRQ It follows that the Panel did not compare the category of
23
24
25
Panel report on $VEHVWRV, at para. 8.125, in conjunction with para. 8.107 and footnote thereto.
26
Panel Report on $VEHVWRVpara. 8.125 (emphasis added).
12
products mentioned by Canada with the category of products singled out for a
particular treatment by France, but rather with an arbitrarily devised by the Panel
WKLUGcategory of products, namely “ILEUHVZLWKFHUWDLQLQGXVWULDODSSOLFDWLRQV´
30. The Panel not only misinterpreted and misapplied some of the four criteria laid down
in %RUGHU7D[$GMXVWPHQW report and in subsequent panel reports, but also erroneously
limited itself to an examination of these four criteria for determining the likeness of
carcinogenic chrysotile fibres and non-carcinogenic fibres. As indicated in the
$11(; to the present submission, this is contrary to the Appellate Body’s ruling
that these criteria are indicative, not exhaustive, and that they should only provide the
starting point in determining the likeness of products for the purposes of Article III of
GATT 94. In particular, despite the specific facts of this case, the Panel erroneously
dismissed the clear and undisputed health and safety factors that led to the adoption
of the total ban on asbestos by France, as DSULRUL irrelevant in the determination of
likeness even though the Appellate Body has ruled several times that panels should
make a case-by-case analysis and should take into account, in particular, the context
and the circumstances prevailing in the specific case under consideration.
31. The EC argued in this case that proper consideration of the “risk” criterion should
have led the Panel to a different appreciation and conclusion in light of the specific
facts of this case. The EC consider that, in the examination and interpretation of the
four criteria laid down in %RUGHU 7D[ $GMXVWPHQW report and in subsequent panel
reports, the Panel rejected, without proper consideration and in violation of
established case law, as irrelevant the “risk” criterion. The Panel explained:
“We note that the EC draw attention to the risk posed by chrysotile fibres not only
in connection with the properties, nature and quality criterion but also in relation
to the end-use and the tastes and habits of consumers. In this subsection,
however, we examine the criterion of the risk of a product inasmuch as the EC, in
its arguments, referred to this criterion mainly in relation to the criterion of the
properties, nature and quality of asbestos fibres. The conclusions of our
examination, however, will apply to all the circumstances in which the EC refer to
the risk of a product in relation to the determination of likeness within the
meaning of Article III:4 of the GATT 1994.”27
32. The Panel’s reasoning continued:
“We therefore conclude that, bearing in mind the overall economy of the WTO
Agreement, in particular the relationship between Article III and Article XX(b), it
is not appropriate to apply the "risk" criterion proposed by the EC, neither in the
criterion relating to the properties, nature and quality of the product, nor in the
other likeness criteria invoked by the parties.”28
27
Panel report on $VEHVWRV, footnote 95.
28
13
33. In doing so the Panel disregarded the admonition of the Appellate Body that panels
should exercise their best judgement in employing the criteria that the %RUGHU 7D[
$GMXVWPHQWreport laid down in deciding “likeness”. The Panel took it instead upon
itself to declare the FRPPHUFLDO RU PDUNHW DFFHVV DSSURDFK to the comparison of
like products as the only relevant approach permitted under Article III:4 of GATT 94,
even though the Appellate Body had ruled that “no one approach to exercising
judgement will be appropriate for all cases”. In addition, the Panel’s unwarranted
commercial or market access approach does not appear to conform with another
ruling by the Appellate Body which stated:
“In the context of violation complaints made under Article XXIII:1(a), it is true that
panels examining claims under Articles III and XI of the GATT have frequently
stated that the purpose of these articles is to protect the expectations of Members
concerning the competitive relationship between imported and domestic products,
as opposed to expectations concerning trade volumes. However, this statement is
often made DIWHU a panel has found a violation of, for example, Article III or
Article XI that establishes a SULPDIDFLH case of nullification or impairment. At that
point in its reasoning, the panel is examining whether the defending party has been
able to rebut the charge of nullification or impairment. It is in this context that
panels have referred to the expectations of Members concerning the conditions of
competition.”29
34. In other words, the impact of a measure on expectations concerning the competitive
relationship between imported and domestic products should better not be used as a
tool in deciding the issue of “likeness” as such under Article III.4, but only in
establishing the discrimination introduced by the measure. As the Appellate Body has
said, expectations concerning the competitive relationship can normally be invoked
DIWHU the violation of Article III is established in order to show nullification or
impairment. In the present case, the Panel and Canada failed to demonstrate such
impact on the competitive relationship between the three Canadian fibre-cement
substitute products and French asbestos.
35. Moreover, the Panel ignored the ruling of the Appellate Body that Article III:1
informs Article III:4 and, therefore, serves an important role in addressing the issue of
likeness in Article III:4. As a result, the Panel adopted an interpretation of the terms
“like products” that disregard entirely the “risk” criterion and, as a result, expanded the
scope of Article III:4 of GATT 94 clearly beyond its agreed scope of application.
Instead of interpreting the four criteria established by the %RUGHU7D[$GMXVWPHQWreport
and subsequent panel and Appellate Body reports in the light of the “risk” factor, the
Panel wrongfully stated that: “It is thus with a view to market access that the properties,
nature and quality of imported and domestic products have to be evaluated”.30
29
Appellate Body Report ,QGLD ± 3DWHQW 3URWHFWLRQ IRU 3KDUPDFHXWLFDO DQG $JULFXOWXUDO &KHPLFDO
3URGXFWV, WT/DS50/AB/R of 19 December 1997, AB-1997-5, at para. 40 (emphasis in the original,
footnote omitted).
30
Panel report on $VEHVWRV, at para. 8.122 in fine.
14
36. The following paragraphs address the above-identified errors in law and legal
interpretation of the Panel Report in greater detail.
7KH 3DQHO FRPPLWWHG DQ HUURU RI ODZ LQ GLVUHJDUGLQJ WKH UHDVRQ IRU
ZKLFK WKH )UHQFK 'HFUHH DW LVVXH VLQJOHG RXW IRU VSHFLILF UHJXODWRU\
WUHDWPHQWDOONLQGVRIFDUFLQRJHQLFDVEHVWRVILEUHV
37. Article III:4 of GATT 94 calls for a comparison of the WUHDWPHQW accorded to an
LPSRUWHG product with the WUHDWPHQW accorded to a OLNH QDWLRQDO product. The
starting point of the analysis should, therefore, be to identify the nature and type of
regulatory treatment as well as the category of products to which the Member applies
that particular treatment. In other words, it must be that specific treatment as applied
to that domestic product, DV WKLV LV GHILQHG LQ WKH FRQWHVWHG GRPHVWLF UHJXODWLRQ
which must be compared to the imported product for which the same national
treatment is claimed. The Panel should therefore have begun its analysis by asking
the question: what is the treatment France accords to asbestos fibres that are
carcinogenic? Instead, it began its analysis by asking the question: what is the
treatment France accords to fibres with certain industrial applications? As a result, it
compared the likeness of a category of products GHILQHGE\&DQDGD with a category of
products that does not exist under the French Decree at issue here. This is because
France has not singled out fibres with certain industrial applications for the treatment
that Canada claims to be inconsistent with Article III:4, and thus has not accorded
French fibres with certain industrial applications any particular treatment that Canada
can claim under Article III.4 for the fibres with certain industrial applications. 0RUH
JHQHUDOO\ZLWKLQWKHFRQWH[WDQGIRUWKHSXUSRVHVRILQWHUSUHWLQJ$UWLFOH,,,LW
LV DUELWUDU\ DQG ZURQJ WR FRPSDUH DQ LPSRUWHG SURGXFW ZLWK D FDWHJRU\ RI
QDWLRQDO SURGXFWV WKDW KDYH QRW EHHQ VLQJOHG RXW IRU VSHFLILF WUHDWPHQW LQ WKH
LQWHUQDOUHJXODWLRQXQGHUFRQVLGHUDWLRQ
38. One author explained appropriately the importance of comparing the category of
products claimed to be like with the category of products to which the internal
regulation applies the specific treatment, with the following example:
“In fact, the starting point of the analysis cannot be the concrete objects to which
an internal tax or regulation is applied but only the abstract categories of products
distinguished by the contracting party. For instance, in the context of an analysis
under Article III it is meaningless to say that the imported cup in my left hand is
like the cup of domestic origin in my right hand because their properties, nature,
quality and end-uses are the same and that, consequently, the cup in my left hand
must be accorded no less favourable treatment than the one in my right hand. ,W
PD\EHWUXHWKDWWKHWZRREMHFWVPLJKWEHWKHVDPHZKHQFRQVLGHUHGDVFXSVEXW
WKH IDFW WKDW WKH\ DUH FXSV PD\ QRW DW DOO EH UHOHYDQW XQGHU WKH GRPHVWLF
OHJLVODWLRQ DW LVVXH One of the cups might under that legislation fall under the
category of “non-recyclable beverage container” (subject to an environmental
tax), “material producing poisonous gases when incinerated” (subject to a sales
prohibition), or “household utensil” (subject to a reduced value-added tax). 7R
FRPSDUH WKH WZR REMHFWV DV FXSV ZKHQ WKH\ DUH QRW GLVWLQJXLVKHG E\ WKH
15
FRQWUDFWLQJ SDUW\ DV FXSV LV DUELWUDU\ ,Q RUGHU WR H[DPLQH ZKHWKHU WKH
FRQWUDFWLQJ SDUW\
V PHDVXUH PHHWV WKH QR OHVV IDYRXUDEOH VWDQGDUG RQH KDV WR
FRPSDUH WKH FDWHJRULHV RI SURGXFWV WKDW DUH GLVWLQJXLVKHG E\ LW QRW WZR
LQGLYLGXDOSURGXFWVWKDWKDSSHQWRIDOOZLWKLQWKHFDWHJRULHVFUHDWHG”31
39. Applying the above considerations to the facts of the present case, it may be true that
some of the chrysotile fibres covered by the French Decree are like the fibres of
substitute products ZKHQ FRQVLGHUHG DV ILEUHV ZLWK FHUWDLQ LQGXVWULDO DSSOLFDWLRQV.
However, the fact that such fibres are substitutable for certain industrial applications
is totally irrelevant for the Decree’s basic prohibition. The category of origin-neutral
products to which France applied indistinctly the specific regulatory treatment in
question, which Canada claimed is inconsistent with Article III:4, can only be
described as FDUFLQRJHQLF ILEUHV, because it is precisely the carcinogenic nature of
these fibres that forms the basis of the French prohibition. The burden was, therefore,
on Canada to demonstrate not only that the three fibre-cement substitute products,
which it claimed were like, were indeed OLNHFDUFLQRJHQLFILEUHV, but also that such
Canadian fibre-cement products received less favourable treatment. But Canada, in
fact, merely attempted to demonstrate that the three fibre-cement substitute products
were like to DILFWLWLRXVWKLUGFDWHJRU\ of products, that is ILEUHVVXLWDEOHIRUFHUWDLQ
LQGXVWULDODSSOLFDWLRQV which are of no regulatory concern whatsoever to the French
Decree in question.
40. Indeed, as a matter of fact, there is one other category of products, which is like the
carcinogenic chrysotile fibres, and which are also prohibited by France for the same
regulatory purpose: viz. the other types of asbestos (amphiboles) which are also
scientifically established to be carcinogenic substances.32 As footnote no 1 to the
Panel’s Report clarified, the French Decree in question does not distinguish for
specific treatment among the different types or varieties of asbestos (save for the
limited transitional provisions on the exceptions). In addition, the Panel clarified in
footnote 109 that Canada has not made any allegation concerning the less favourable
treatment of Canadian chrysotile fibres as compared with any kind of domestic
asbestos fibres. Therefore, the Panel made no findings also in this respect.
41. It follows that the Panel committed unfortunately the same legal error as Canada,
when interpreting the context as well as the object and purpose of Article III.4 of
GATT 94. It is useful to recall, once again, the Panel’s explanation:
“The objective of Article III concerns PDUNHWDFFHVV for products. Its purpose is
to prevent internal measures from being applied in such a way as to protect
domestic production. Article III:4 upholds this objective in respect of laws,
regulations and requirements affecting the sale, marketing, purchase,
transportation, distribution and use of products on the domestic market. «,WLV
31
Frieder Roessler, "Diverging Domestic Policies and Multilateral Trade Integration", in: J. Bhagwati
and R. Hudec (eds.), )DLU7UDGHDQG+DUPRQL]DWLRQ3UHUHTXLVLWHVIRU)UHH7UDGH", Vol.2, MIT Press,
1996, at page 29 (emphasis added).
32
Panel report on $VEHVWRV, e.g. at para. 3.13 et seq.
16
WKXV ZLWK D YLHZ WR PDUNHW DFFHVV WKDW WKH SURSHUWLHV QDWXUH DQG TXDOLW\ RI
LPSRUWHGDQGGRPHVWLFSURGXFWVKDYHWREHHYDOXDWHG.33
42. The Panel’s legal reasoning is based, therefore, on a misunderstanding of the object
and purpose of Article III.4 of GATT 94. Contrary to the Panel’s assertion, once
again, Article III:4 is QRW concerned with market access as such but with the
competitive relationship between imported and like domestic products. Its objective
is to ensure that imported products and like domestic products enjoy HTXDO conditions
of competition. As pointed out by the GATT panel on 8QLWHG6WDWHV6HFWLRQRI
WKH7DULII$FWRI: “[T]he words 'treatment no less favourable' in paragraph 4 call
for effective equality of opportunities for imported products”.34 Therefore, there is
nothing in Article III.4 of GATT that limits the WTO Members’ right to single out
and regulate in a non-discriminatory manner the access to the domestic market for a
particular product. The sole restriction under Article III.4 is to ensure that any
regulation the Member has decided to apply, it applies it in a non-discriminatory
manner to imported as well as to like domestic products. As we have already seen,
several panels examining claims under Articles III (and XI) of GATT have frequently
stated that the purpose of this Article is to protect the expectations of Members
concerning the competitive relationship between imported and domestic products, DV
RSSRVHG WR H[SHFWDWLRQV FRQFHUQLQJ WUDGH YROXPHV.35
This interpretation
demonstrates that market access for products and equal competitive opportunities for
imported and domestic products are separate concepts.
43. The GATT panel on 8QLWHG 6WDWHV 7D[HV RQ 3HWUROHXP DQG &HUWDLQ ,PSRUWHG
6XEVWDQFHV explained the function of the national treatment principle Article III as
follows:
“It is conceivable that a tax consistent with the national treatment principle (for
instance, a high but non-discriminatory excise tax) has a more severe impact on
the exports of other contracting parties than a tax that violates that principle (for
instance a very low but discriminatory tax). The case before the Panel illustrates
this point: the United States could bring the tax on petroleum in conformity with
Article III:2, first sentence, by raising the tax on domestic products, by lowering
the tax on imported products or by fixing a new common tax rate for both
33
Panel report on $VEHVWRV , at para. 8.122 (emphasis added).
34
See BISD 34S/158.
35
See, for example: Working Party Report, %UD]LOLDQ ,QWHUQDO 7D[HV, adopted 30 June 1949, BISD
II/181; Panel Report, 8QLWHG6WDWHV7D[HVRQ3HWUROHXPDQG&HUWDLQ,PSRUWHG6XEVWDQFHV, adopted
17 June 1987, BISD 34S/136; Panel Report, &DQDGD $GPLQLVWUDWLRQ RI WKH )RUHLJQ ,QYHVWPHQW
5HYLHZ$FW, adopted 7 February 1984, BISD 30S/140; Panel Report, -DSDQHVH0HDVXUHVRQ,PSRUWV
RI/HDWKHU, adopted 15/16 May 1984, BISD 31S/94; Panel Report, -DSDQ&XVWRPV'XWLHV7D[HVDQG
/DEHOOLQJ3UDFWLFHVRQ,PSRUWHG:LQHVDQG$OFRKROLF%HYHUDJHV, adopted 10 November 1987, BISD
34S/83; Panel Report, (XURSHDQ(FRQRPLF&RPPXQLW\5HVWULFWLRQVRQ,PSRUWVRI$SSOHV, adopted
22 June 1989, BISD 36S/135; and Panel Report, 8QLWHG6WDWHV0HDVXUHV$IIHFWLQJWKH,PSRUWDWLRQ
,QWHUQDO 6DOH DQG 8VH RI 7REDFFR, adopted 4 October 1994, DS44/R. See also the Appellate Body
Report ,QGLD ± 3DWHQW 3URWHFWLRQ IRU 3KDUPDFHXWLFDO DQG $JULFXOWXUDO &KHPLFDO 3URGXFWV,
WT/DS50/AB/R of 19 December 1997, AB-1997-5, at para. 40.
17
imported and domestic products. Each of these solutions would have different
trade results, and it is therefore logically not possible to determine the difference
in trade impact ... resulting from the non-observance of that provision. For these
reasons, Article III:2, first sentence, cannot be interpreted to protect expectations
on export volumes; it protects expectations on the competitive relationship
between imported and domestic products.”36
44. It should be noted that a similar idea is implied in the Panel’s section concerning the
determination of GLVFULPLQDWLRQ in the present case, where it stated:
“Inasmuch as the Decree GRHV QRW SODFH DQ LGHQWLFDO EDQ on PVA, cellulose or
glass fibre and fibre-cement products containing PVA, cellulose or glass fibres,
we must conclude that GHMXUHit treats imported chrysotile fibres and chrysotilecement products less favourably than domestic PVA, cellulose or glass fibre and
fibre-cement products.”37
45. The Panel’s market access approach in the present case for the determination of
likeness can not be reconciled with the purpose of Article III:4, as explained above.
The sole purpose of that Article is to prevent regulatory distinctions between products
that deny to imported products the competitive opportunities that are accorded to
domestic products. The concept of “like products” within the meaning of Article III:4
must, therefore, be determined with this clear objective in mind. )RUWKHSXUSRVHVRI
DSSO\LQJWKHQDWLRQDOWUHDWPHQWREMHFWLYHRI$UWLFOH,,,LWLVLQDSSURSULDWHWR
GHFODUH WZR SURGXFWV WR EH ³OLNH SURGXFWV´ DQG KHQFH UHTXLUH WKHP WR EH
WUHDWHG LQ D QRQGLVFULPLQDWRU\ PDQQHU ZKHQ WKH EDVLV RI WKH DSSOLHG
UHJXODWRU\GLVWLQFWLRQEHWZHHQWKHPGRHVQRWVKLIWWKHFRPSHWLWLYHRSSRUWXQLWLHV
LQDZD\WKDWLVPRUHIDYRXUDEOHWRGRPHVWLFSURGXFWV Therefore, two products
cannot be declared to be “like” merely because the market considers them to be like for
certain limited industrial applications, as was found by the Panel in the present case.
The central criterion for determining their likeness must be whether the regulatory
distinction between them entails the shift in the competitive opportunities. ,Q RWKHU
ZRUGV WKH GHFLVLYH FULWHULRQ IRU GHWHUPLQLQJ WKHLU OLNHQHVV PXVW EH ZKHWKHU WKH
EDVLVRIWKHUHJXODWRU\GLVWLQFWLRQEHWZHHQWKHPGHQLHVWRLPSRUWHGSURGXFWVWKH
WUHDWPHQWWKDWLVDFFRUGHGWRWKHGRPHVWLFSURGXFWVZKLFKDUHWKHVXEMHFWRIWKDW
UHJXODWLRQ
46. Article III:4 thus calls for an analysis of the objective of the regulatory distinction, as
this is “revealed or objectified in the measure itself”, and its impact on the equality of
competitive opportunities between imported and like domestic products.38 France’s
36
See Panel Report 8QLWHG 6WDWHV ± 7D[HV RQ 3HWUROHXP DQG &HUWDLQ LPSRUWHG 6XEVWDQFHV BISD
34S/136, adopted on 17 June 1987, at para. 5.1.9, page 158.
37
Panel Report on $VEHVWRV at para. 8.155 (emphasis added).
38
See Appellate Body report in &KLOH ± 7D[HV RQ $OFRKROLF %HYHUDJHV, WR/DS/87/AB/R of 13
December 1999, at para. 71, as well as paras. 61-62. The objective of the regulatory distinction and its
potential impact on the equality of competitive conditions between imported and like domestic
products can be ascertained from the design, the architecture and the revealing structure of the
measure. See, e.g., the Appellate Body reports in -DSDQ±$OFRKROLF%HYHUDJHV, supra, at page 29. See
18
prohibition of all FDUFLQRJHQLFDVEHVWRVILEUHV denies competitive opportunities to all
such fibres equally, whether domestic or imported, because they are all established to
be carcinogenic. In fact, as explained above, in the present case Canada did not even
claim less favourable treatment for these carcinogenic products.39 Even more
importantly, the fact that the basis of the regulatory distinction in the French
prohibition does not extend to PVA, cellulose and glass fibres (as suggested by the
Panel in para. 8.155), shows clearly that it does not alter or entail competitive
opportunities for domestic products that are not available or which are less favourable
to the three fibre-cement substitute products which Canada claimed to be “like”.
Most importantly, this has been recognised even by the Panel in the present case, in
paragraph 8.286 in fine of the Report, where it stated:
“…In these circumstances, the Decree could not be considered to have XSVHW the
competitive relationship between chrysotile and products containing it, on the one
hand, and substitute fibres and products containing them on the other.” (emphasis
in the original)
47. Indeed, as the EC have shown, it is quite indicative that France has a negative trade
balance in those three products.40 The information and data provided to the Panel by
the EC in response to written question no 3041 also show that:
• In regard to FHOOXORVH ILEUHV, in 1998, France produced 2,660,000 tonnes of
cellulose fibres and imported 2,030,000 tonnes (including 660,000 tonnes from
countries of the European Union and 740,000 tonnes from North America, of
which 380,000 tonnes from Canada). It should be noted that imports of
cellulose fibres from Canada increased by 14,000 tonnes between 1996 and
1998.
• In regard to 3RO\YLQ\O DOFRKRO ILEUHV, they are mainly used in the textile and
packaging industries and are made by only two factories in the world, one in
China and the other in Japan. In 1998, deliveries from French manufacturing
units amounted to 4,200 tonnes and imports to 11,400 tonnes.
• As far as other products are concerned (the remaining ten per cent of chrysotile
asbestos fibres consumed), the most popular substitute has been man-made
mineral fibres of the glass or rock fibre type (the great majority of
applications), with very limited use being made of para-aramid and ceramic
fibres (these two products are very expensive as compared with asbestos
also, by analogy, the Appellate Body rulings in 8QLWHV 6WDWHV ± ,PSRUWDWLRQ RI &HUWDLQ 6KULPS DQG
6KULPS3URGXFWV, WT/DS58/AB/R of 12 October 1998, at paras. 137 and 149; and in (& 0HDVXUHV
&RQFHUQLQJ0HDWDQG0HDW3URGXFWV+RUPRQHV±&RPSODLQWVE\WKH86DQG&DQDGDWT/DS26/12
of 16 January 1998, at paras. 244-246.
39
See Panel Report on $VEHVWRV , footnote 109 of the Report.
40
Panel Report on $VEHVWRV, at para. 8.153.
41
Panel Report on $VEHVWRV, Addendum 1, at page 31-32.
19
fibres). With regard to para-aramid fibres, in 1998, France recorded a trade
deficit of 400 tonnes or 26 million francs.
48. It follows from the clear and undisputed record before the Panel that imports into
France of the three fibre-cement substitute products from Canada, found to be like by
the Panel, were either increasing or at least remained unaffected; that France is
heavily dependent on imports of those substitute products and, most significantly, that
Canada has never raised in this proceeding any claim whatsoever to the effect that its
actual or potential exports to France of those three fibre-cement substitute products
encountered any GH MXUH or GH IDFWR discrimination resulting from the Decree in
question. To the contrary, the declared objective of Canada in this case is to be
allowed to continue to export its carcinogenic FKU\VRWLOH fibres to France.
49. The Panel committed, therefore, serious legal errors in finding that those three fibrecement substitute products are “like” chrysotile fibres for the purpose of Article III.4
of GATT 94. Instead, a proper “likeness” determination should have led the Panel to
conclude that the prohibited carcinogenic asbestos fibres and the permitted three
fibre-cement substitute products are not “like products” within the meaning of Article
III:4, because the application of the French regulatory distinction between them does
not alter or affect their competitive opportunities and, therefore, does not deny them
national treatment. The Panel’s erroneous determination of “likeness”, combined
with the automaticity by which GHMXUH discrimination is found in this case,42 render
the Panel’s whole legal approach regarding Article III.4 legally untenable.
7KH3DQHO¶VGHWHUPLQDWLRQRI³OLNH´SURGXFWVLVDQHUURULQODZEHFDXVH
LW LV EDVHG RQ D PLVFRQFHSWLRQRIWKHUHODWLRQVKLSEHWZHHQ $UWLFOH ,,,
DQG$UWLFOH;;RI*$77
50. Another serious legal error regarding the context of the terms “like products” was
committed by the Panel when interpreting the relationship of Article III.4 with Article
XX.b of GATT 94. According to the Panel, the risk a product poses to human health
can not be used as a factor in determining whether asbestos fibres and the three fibrecement substitute products are “like products” in the sense of Article III.4, because:
a) of the “overall economy” of GATT 1994 and the risk of largely nullifying the
effect of Article XX(b);
b) it would allow the Member concerned to avoid the obligations in Article XX,
in particular the test of necessity for the measure and the control exerted by
the introductory clause to Article XX;
c) it would be contrary to the basic principle of interpretation to give meaning to
all the provisions of the WTO Agreement;
42
Panel Report on $VEHVWRVat paras. 8.154-8.155, and compare with the Panel’s finding in para. 8.286
of the Report.
20
d) it would make redundant the other four criteria as it would become decisive
when assessing the likeness of products in every case in which it was invoked,
irrespective of the other criteria applied.43
51. For the above reasons, the Panel ruled that, within the framework of Article III:4, the
likeness of products had to be determined solely from the perspective of market
access. In the view of the Panel, two products are like if the market considers them to
be like, for instance because they share certain properties considered equivalent by
their consumers and are indeed used for the same purpose in certain applications.44
According to the Panel, the place to take into account the health, safety or other
regulatory concerns that lead regulators to distinguish products for specific regulatory
treatment is Article XX of GATT 94, which specifies the circumstances and the
conditions under which non-commercial policy objectives could take precedence over
rules governing international trade.
52. The EC will address below the four reasons invoked by the Panel to deny the
relevance of the “risk” criterion.
53. It should be recalled that the Appellate Body has summarised the role of Article XX
most recently in the 6KULPSV case, where it ruled that Article XX is a OLPLWHG DQG
FRQGLWLRQDO exception from the substantive obligations contained in the other
provisions of the GATT 1994.45 This has to be understood in the sense that the
ultimate availability of the exceptions set out therein is subject to the compliance by
the invoking Member with the requirements of the chapeau. Any measure, to qualify
finally for exception, must also satisfy the requirements of the chapeau to Article XX.
54. Since the Appellate Body regards the role of Article XX in the GATT system as that
of a “OLPLWHGDQGFRQGLWLRQDOH[FHSWLRQ”, and in conformity with established case law,
the burden is upon the party that asserts the affirmative of a particular claim or
defence.46 The implication of this standard, as the Panel stated in the present case, is
that: “Where the evidence concerning a claim or a particular form of defence is, in
general, equally balanced, a finding has to be made against the party on which the
burden of proof relating to this claim or this form of defence is incumbent”.47
55. For the Appellate Body the introductory clause to Article XX is a fundamental part of
the balance of rights and obligations struck by the original framers of the
GATT 1947. In the same 6KULPSV report, the Appellate Body clarified that:
43
Panel Report on $VEHVWRVat paras. 8.130-8.132.
44
Panel Report on $VEHVWRVat para. 8.125.
45
Appellate Body report in 8QLWHV 6WDWHV ± ,PSRUWDWLRQ RI &HUWDLQ 6KULPS DQG 6KULPS 3URGXFWV,
WT/DS58/AB/R of 12 October 1998, at para. 157.
46
See, e.g., Appellate Body report in 8QLWHG6WDWHV±0HDVXUHV$IIHFWLQJ,PSRUWVRIZRYHQ:RRO6KLUWV
DQG%ORXVHVIURP,QGLD, WT/DS33/AB/R, at page 14.
47
Panel Report on $VEHVWRVat para. 8.78-879.
21
“…[B]ecause the GATT 1994 itself makes available the exceptions of Article XX, in
recognition of the legitimate nature of the policies and interests there embodied, the
right to invoke one of those exceptions is not to be rendered illusory”.48 Still in the
same report, the Appellate Body clarified in regard to the type of discrimination
prohibited by Article XX the following:
“First, the application of the measure must result in GLVFULPLQDWLRQ. As we stated
in 8QLWHG 6WDWHV ± *DVROLQH, the nature and quality of this discrimination is
different from the discrimination in the treatment of products which was already
found to be inconsistent with one of the substantive obligations of the GATT
1994, such as Articles I, III or XI. Second, the discrimination must be DUELWUDU\
or XQMXVWLILDEOH in character. We will examine this element of DUELWUDULQHVV or
XQMXVWLILDELOLW\ in detail below. Third, this discrimination must occur EHWZHHQ
FRXQWULHV ZKHUH WKH VDPH FRQGLWLRQV SUHYDLO. In 8QLWHG 6WDWHV ± *DVROLQH, we
accepted the assumption of the participants in that appeal that such discrimination
could occur not only between different exporting Members, but also between
exporting Members and the importing Member concerned. Thus, the standards
embodied in the language of the chapeau are not only different from the
requirements of Article XX(g); they are also different from the standard used in
determining that Section 609 is violative of the substantive rules of Article XI:1
of the GATT 1994.”49
56. It should be noted from the outset that if two products are “like products” within the
meaning of Article III:4, any regulatory distinction between them is inconsistent with
this provision. For instance, if beverages in recyclable containers are determined to
be like beverages in non-recyclable containers, the interpretation enunciated by the
Panel in the present case would require that one of these products cannot be treated
less favourably than the other. The only way to meet the national treatment standard,
therefore, would be to accord the same treatment to both products.50 It follows that
any legal finding on the likeness of two products implies a pronouncement on the
product distinctions that WTO Members make in their domestic regulations. This
necessarily entails, therefore, a determination in regard to the scope of domestic
regulatory autonomy that WTO law acknowledged to its Members.
57. The Panel’s determination of likeness solely on the basis of commercial factors has
probably the attraction of simplicity, because it is relatively easy to determine the
impact of these factors on trade volumes. A panel following this approach can avoid
an inquiry into the question of whether the regulator distinguished the products so as
to protect domestic producers or to achieve a legitimate policy objective. However,
to determine the likeness of two products solely on the basis of commercial factors
leads to a serious curtailment of national regulatory autonomy. The public policy
48
Ibid., at para. 156.
49
Ibid., at para. 150 (emphasis in the original, footnotes omitted).
50
This is indeed what the $VEHVWRV Panel appears to have implied in para. 8.155 of the Report.
22
objectives can then be taken into account to the extent they are covered by Article XX
of GATT 94.
58. In regard to the Panel’s “RYHUDOO HFRQRP\” argument, therefore, it should be noted
that Article XX contains an exhaustive list of ten policy purposes justifying a
deviation from the other provisions of the GATT. Seven of the ten paragraphs of
Article XX deal, explicitly or implicitly, with measures affecting the importation or
exportation of products and, consequently, would normally not be invoked to justify
inconsistencies with Article III. The remaining three paragraphs of Article XX that
are relevant in practice for internal regulatory measures covered by Article III permit
the pursuit of the following policy objectives:
• protection of public morals;
• protection of human, animal or plant life or health; and
• conservation of natural resources.
59. If the issue of likeness of two products were determined exclusively on the basis of
commercial factors only the above three policy objectives could be taken into account
in determining the consistency of the regulatory product distinctions made by
Members with GATT 94. In other words, if in determining likeness only commercial
factors are taken into account, no policy objective other than the above three grounds
mentioned in Article XX could be used to justify a regulatory product distinction. To
express the same idea differently, the Panel’s approach implies that the limited
grounds for exception in Article XX define the content of the basic rule, the rule
under Article III.4 being that Members “are free to pursue their own domestic goals”
in a non-discriminatory fashion.
60. The list of policy objectives in Article XX covers, as explained above, cases where
the attainment of the policy objective requires the application of measures
GLVFULPLQDWLQJagainst goods of foreign RULJLQ or domestic goods destined for export
(e.g., quarantine requirements serving health purposes, prohibitions to export national
art treasures, or the enforcement of intellectual property rights in respect of imported
products). The other policy objectives that require regulatory distinctions between
categories of products on grounds RWKHU WKDQ WKHLU RULJLQ RU GHVWLQDWLRQ are not
mentioned in Article XX. For instance, governments frequently set technical
standards for products, permit the sale of certain products only on weekdays, prohibit
the sale of products below or above specified prices, impose lower sales taxes on
children’s clothes than on clothes for adults, permit the sale of certain drugs in
pharmacies only, etc. If the regulatory measures implementing such legitimate
policies were deemed inconsistent with Article III.4, as the Panel’s approach in this
case requires, Article XX could not be invoked to justify them. It should, therefore,
be assumed that the fathers of GATT intended that internal regulations distinguishing
for perfectly legitimate, non-protectionist policy reasons between commercially
equivalent products would not require justification under Article XX. The “overall
economy” argument is, therefore, unconvincing.
23
61. In regard to the “ULVNRIODUJHO\QXOOLI\LQJWKHHIIHFWRI$UWLFOH;;E´ the EC would
submit that it is, in light of the above, incorrect to say that Article XX (b) and the
disciplines it imposes would no longer have any functions if, for instance, health
considerations were included in the “like product” determination. First, Article
XX(b) applies not only to domestic regulations falling under Article III but also to
measures covered by Article XI. Furthermore, the issue of determining likeness
arises essentially in case of RULJLQQHXWUDO regulations that apply indistinctly between
different categories of products. But Article XX (b) would, and should, remain
applicable in the case of internal regulations that discriminate against imported
products solely on the basis of their QDWLRQDORULJLQ. For instance, in the case of an
applied prohibition to advertise cigarettes, whether of domestic or foreign origin, the
issue might arise whether cigars are like cigarettes. This would raise the likeness
issue that would have to be addresses in the context of Article III:4. By contrast, in
the case of a prohibition to advertise cigarettes manufactured abroad, the issue of
likeness is moot because the measure can be found to violate the national treatment
obligation without conducting an examination of the question whether cigarettes are
like another product. The justification of such a discriminatory prohibition would
have then to be examined under Article XX (b).51
62. The next argument of the Panel that Members “ZRXOG EH DOORZHG WR DYRLG WKHLU
REOLJDWLRQVLQSDUWLFXODUWKHWHVWRIQHFHVVLW\IRUWKHPHDVXUHDQGWKHFRQWUROH[HUWHG
E\ WKH LQWURGXFWRU\ FODXVH WR $UWLFOH ;;´, is also unfounded. As explained above,
Article XX will continue to play its role in the GATT system in the case of internal
regulations that discriminate against imported products on the basis of their national
origin. As regards specifically RULJLQQHXWUDO measures, the no less favourable
treatment requirement and the way this is interpreted and applied in established
GATT jurisprudence (the GHMXUH and, in particular, GHIDFWR discrimination concepts)
leave in reality no margin for the application of unjustifiable, arbitrary or disguised
restrictions that impact on the competitive opportunities between imported and like
domestic products.52 Other WTO Agreements, of course, in particular the TBT and
the SPS Agreements, will also play a significant role in that respect.
63. The other arguments of the Panel pertaining to the “DOORFDWLRQRIWKHEXUGHQRISURRI´
and the principle of “HIIHFWLYHWUHDW\LQWHUSUHWDWLRQ´ are also legally unsound. In the
words of the Appellate Body, Article XX is “a limited and conditional exception”
and, because of that, is interpreted restrictively. The reversal of the burden of proof,
which the invocation of Article XX as a defence implies, can in some cases prove
decisive. This is because, from the evidentiary point of view, it is not the same (from
the quantitative and qualitative points of view) when the defending party has to prove
51
The 7KDLODQG &LJDUHWWHV case provides an illustration for this point. See GATT panel report on
7KDLODQG5HVWULFWLRQVRQ,PSRUWDWLRQDQG,QWHUQDO7D[HVRQ&LJDUHWWHV BISD 34S/83, at 124.
52
A proper interpretation of Article III, therefore, would be as effective against protectionist measures as
the chapeau and the necessity test of Article XX of GATT 94. Indeed, it may be legally argued that
Article III may be even more effective, because the chapeau of Article XX was essentially meant to
address the abusive exercise of rights (see the Appellate Body report in the 6KULPSVcase, paras. 156158).
24
the necessity of a measure under Article XX(b), if this is compared to the situation
when the complaining party has only to prove SULPD IDFLH, under Article III.4 of
GATT 94, that a product is treated less favourably than a like domestic product. The
existing case law, applicable to a situation where there is equipoise of the evidence
adduced, increases further the burden imposed on the defending party. It follows that,
to the contrary, it is the Panel’s interpretation that fails to make an effective and
coherent interpretation of all the relevant GATT provisions in this case, in particular
it fails to address effectively the relationship between Article III.4 and Article XX(b)
of GATT 94, taking into account the context, object and purpose of all these
provisions.
64. The last of the Panel’s argument is also inappropriate, namely that the “risk”
criterion, if applied in the context of Article III.4, would make “totally redundant the
other criteria mentioned by the Working Party on %RUGHU7D[$GMXVWPHQWVbecause it
would become decisive when assessing the likeness of products in every case in
which it was invoked, irrespective of the other criteria applied.” This is not so. The
record before the Panel shows that if the approach suggested by the EC were
followed, all the four criteria would still play a useful role in deciding likeness and in
avoiding the application of protectionist measures. In this regard, it is important to
note what the Panel itself said:
– “The Panel notes that no party contests that the structure of chrysotile fibres is
unique by nature and in comparison with artificial fibres that can replace
chrysotile asbestos. The parties agree that none of the substitute fibres
mentioned by Canada in connection with Article III:4 has the same structure,
either in terms of its form, its diameter, its length or its potential to release
particles that possess certain characteristics. Moreover, they do not have the
same chemical composition, which means that, in purely physical terms, none
of them has the same nature or quality. It could therefore be concluded that
they are not like products.”53
– “In this particular case, because of its physical and chemical characteristics,
asbestos is a unique product.”54
– “As regards properties, we note that no substitute fibre alone combines all the
properties and qualities of chrysotile fibre itself.”55
– “In this particular case, we consider that the end-use of the products should
affect the way in which we examine the properties of the fibres compared,
inasmuch as none of the fibres mentioned by Canada always fulfils the same
functions.”56
53
54
55
56
Panel Report on $VEHVWRVat para. 8.125 in fine.
25
– “We do not consider that the fact that asbestos fibres are classified in their own
heading is decisive in this case. PVA, cellulose and glass fibres respectively
are also classified in different tariff headings. We note, however, that such a
classification reflects the difference in their nature, whether they are mineral or
vegetable, artificial or natural.”57
65. The above quoted passages from the Panel’s report demonstrate that the Panel had
sufficient grounds to interpret the four criteria in the light of the “risk” criterion and
in a manner coherent with established case law. Surprisingly, the Panel chooses
instead to place excessive importance on just one of the criteria, i.e. end-use. It
transformed thereby the whole exercise of deciding likeness under Article III.4 into
an issue of discovering which are the VXEVWLWXWH non-carcinogenic products that have
the same use for a small number of their respective commercial applications. This
exclusive reliance on substitutes in determining likeness flies in the face of the text of
Article III.4, which does not contain the phrase “directly competitive or substitutable
products”, that is found in Article III.2 and the accompanying $G Note thereto. The
Panel’s approach is also contrary to previous case law because it implies that the
concept of “substitutable products” is identical, or even narrower, than that of “like
products” in Article III.4. 58
66. The EC submit that not all products potentially harmful to human health are
prohibited by all WTO Members at any given point in time. In addition, the
Members’ chosen level of sanitary protection frequently varies. It follows that, had
the Panel followed the approach suggested by the EC, the four criteria would still be
relevant and important when interpreting the concept of “like” products in the light of
the “risk” criterion. In the present case, for example, they could have been used to
decide the treatment France accords to other types of carcinogenic asbestos
(amphiboles) fibres or to the asbestos products falling under the transitional
exceptions laid down in the French Decree.
57
58
See references to previous panel and Appellate Body reports cited in paragraphs 3.442-3.453 of the
Panel Report on $VEHVWRV. In particular, the adopted Panel report in (&±$QLPDOIHHG3URWHLQVfound
that: ³+DYLQJUHJDUGWRLWVRZQFRQFOXVLRQZLWKUHVSHFWWRµOLNHSURGXFWV¶WKH3DQHOZDVVDWLVILHGWKDW
DQLPDO ILVK DQG V\QWKHWLF SURWHLQV FRXOG QRW EH FRQVLGHUHG DV µOLNH SURGXFWV¶ IRU WKH SXUSRVH RI
$UWLFOH,,,6LQFHWKHREOLJDWLRQVXQGHU$UWLFOH,,,UHODWHWRµOLNHSURGXFWV¶WKH3DQHOFRQFOXGHG
WKDW WKH QRQDSSOLFDWLRQ RI WKH ((& PHDVXUHV WR WKHVH SURGXFWV ZDV QRW LQFRQVLVWHQW ZLWK WKH ((&
REOLJDWLRQV XQGHU WKH $UWLFOH´ (BISD 25S/49, para. 4.11). For a better understanding of this
conclusion, it should be noted that the same Panel report also pointed out that: “ « >9@HJHWDEOH
SURWHLQVDQGVNLPPHGPLONSRZGHUZHUHWHFKQLFDOO\VXEVWLWXWDEOHLQWHUPVRIWKHLUILQDOXVHDQGWKDW
WKHHIIHFWVRIWKH((&PHDVXUHVZHUHWRPDNHVNLPPHGPLONSRZGHUFRPSHWLWLYHZLWKWKHVHYHJHWDEOH
SURWHLQV´.
26
6XPPDU\RIWKH(&¶VDSSHOODQWFODLPVFRQFHUQLQJWKH3DQHO¶VILQGLQJV
RQ³OLNHSURGXFWV´XQGHU$UWLFOH,,,RI*$77
67. It has been argued that the issue of likeness in Article III goes to the very core of the
WTO’s policing functions over domestic regulatory policy - in some respects the
most important element of its legal character. We know from the experience of the
United States Supreme Court and European Court of Justice, both of whom are called
upon to make very similar rulings, that these are extremely sensitive and difficult
issues. Developing an accepted and effective jurisprudence in this area requires a
high degree of creativity in fashioning answers that provide a satisfactory balance.59
68. The Appellate Body has so far been very careful not to foreclose its options in
developing answers to the likeness issue that provide a satisfactory balance between
trade interests and public policy objectives. The Appellate Body made clear that a
case-by-case approach is the one according to which likeness must be determined,
taking into account not merely the physical characteristics relevant in the market for
the products at issue but also the context and the circumstances prevailing in any
given case, as well as the specific objective of Article III. The Appellate Body has
pointed out:
“Our interpretation of Article III is faithful to the “customary rules of
interpretation of public international law”.
WTO rules are reliable,
comprehensible and enforceable. WTO rules are not so rigid or so inflexible as
not to leave room for reasoned judgements in confronting the endless and everchanging ebb and flow of real facts in real cases in the real world. They will
serve the multilateral trading system best if they are interpreted with that in
mind.”60
69. The EC believe that this is a sound basis for the development of the jurisprudence in
this delicate and important case. The Panel’s exclusively commercial market access
approach, based solely on an examination of the potential industrial uses of certain
carcinogenic fibres, would put WTO jurisprudence into a doctrinal straightjacket
leading to a limitation of the WTO Members’ scope of regulatory autonomy on the
basis of sterile criteria unrelated to the object and purpose of Article III of GATT 94.
59
Robert E. Hudec, (VVD\VRQWKH1DWXUHRI,QWHUQDWLRQDO7UDGH/DZ, Cameron May, 1999, page 375.
60
Appellate body report in -DSDQ±7D[HVRQ$OFRKROLF%HYHUDJHV, supra, at page 31.
27
7+( 3$1(/¶6 $3352$&+ 72 7+( ,17(535(7$7,21 2) $57,&/( ;;;,,,% 2)
*$77 ,6 $1 (5525 ,1 /$: ,1 5(*$5' 72 7+( ),1',1* 2) 35,1&,3/( 7+$7
³/(*,7,0$7( (;3(&7$7,216´ &$1 %( 5$,6(' )25 $ 0($685( -867,),(' 81'(5
$57,&/(;;2)*$77
7KH3DQHO¶VILQGLQJDSSHDOHGE\WKH(&LQWKLVFDVH
70. The EC argued before the Panel that the rules on non-violation nullification or
impairment in Article XXIII:1 (b) of the GATT apply only if the measure in question
does not fall under other provisions of the GATT and that, while there may be
“legitimate expectations” in connection with a purely commercial measure, there can
be no such expectations with respect to a measure necessary to protect human health
and which can, therefore, be justified under Article XX:(b) of the GATT.
Article XXIII:1(b) is to prevent abuse of the provisions of the General Agreement. As
the Appellate Body had pointed out in the 8QLWHG6WDWHV±6KULPScase, the conditions
laid down in the chapeau of Article XX(b) are meant precisely to address situations in
which a Member applies in bad faith and in an abusive manner the exceptions laid
down in Article XX. There cannot be two sets of provisions that address the same
problem twice.
71. Canada argued before the Panel that the distinction between measures of a purely
commercial nature and measures which have health-protection related aspects has no
basis either in the texts of the WTO Agreement or in case-law. A legitimate
expectation does not in any way concern a particular measure adopted by a Member,
but rather the opportunities for competition agreed during multilateral trade
negotiations on a given product.
72. The Panel recognised that “…[T]he GATT 1947 and WTO panels have never
discussed the situation with respect to a measure designed to protect public health.
All previous cases have concerned situations in which a measure of a purely
commercial nature was adopted pursuant to the negotiation of a concession.”
However, the Panel did not consider this relevant because:
“…[N]either the text of Article XXIII:1(b) of the GATT 1994 nor that of Article
26:1 of the Understanding expressly incorporates the separation suggested by the
EC between measures of a purely commercial nature and measures designed to
protect human health. Although these articles require the existence of a PHDVXUH
– which neither of the Parties disputes - they do not distinguish between different
W\SHVof measures.”61
73. The Panel therefore concluded that “Article XXIII:1(b) applies to a measure whether
it is consistent with the GATT because the GATT does not apply to it or is justified
by Article XX.”62 As a result of this finding, the Panel did not examine whether it
was OHJLWLPDWH for Canada to expect to be able to export a carcinogenic product -
61
62
28
given the explicitly recognised right to restrict trade in such products accorded by
Article XX(b) - but whether Canada could DV D PDWWHU RI IDFW DQWLFLSDWH the
adoption of a measure restricting the use of asbestos. The Panel’s conclusion that the
asbestos ban does not impair the relevant tariff concessions is, therefore, based LQWHU
DOLDon the finding that Canada failed to present a detailed justification of its claim
that the hazardous nature of chrysotile and that restrictions on the use of asbestos by
France could not have been anticipated.63
74. The Panel’s approach, as explained in paragraphs 8.262-8.264 and 8.273-8.274 of the
Report, implies that Article XXIII:1(b) of GATT 94 may offer redress when the
regulatory framework applicable to a product is adapted in response to new scientific
knowledge concerning health risks. The EC appeal from this finding because they
consider that this possibility of redress is not among the benefits accruing under the
GATT 94 within the meaning of Article XXIII:1(b) and that, in that respect, the
Panel’s interpretation of this provision constitutes a serious legal error.64
75. This finding of the Panel is not a “descriptive and gratuitous comment” but “a legal
finding or conclusion”, within the meaning of Article 17.13 of the DSU, which the
EC requests the Appellate Body to reverse.65 Indeed, the EC is seriously concerned
with the Panel’s ruling on this point. Under Article XXIII:1(b) of GATT 94, WTO
Members are entitled to compensation or the compensatory withdrawal of
concessions when a benefit they could legitimately expect from the grant of a tariff
concession has been nullified or impaired by the application of a GATT-consistent
measure. As the Appellate Body pointed out, this provision was meant to ensure that
the benefits of negotiated tariff concessions are not negated through the use of nontariff barriers and other policy measures in areas not governed by substantive legal
rules.66 In all past cases, Article XXIII:1(b) was invoked in response to measures of a
purely commercial nature taken in an area unregulated by the GATT and with
protective effects equivalent to those of a tariff, such as production subsidies, tariff
reclassifications or measures relating to product distribution.67 In the asbestos case,
however, the Panel expanded the coverage of Article XXIII:1(b) by concluding that a
tariff concession may be impaired by the unanticipated application of a health
regulation that meets the requirements specifically set out in Article XX(b) and that
does not have protective effects equivalent to those of a tariff.68
63
Panel report on $VEHVWRV, at para. 8.291-8.303.
64
It should be noted that the United States’ third party submission before the Panel made similar
arguments, at para. 4.67.
65
See the Appellate Body report in 86±0HDVXUHV$IIHFWLQJ,PSRUWVRI:RYHQ:RRO6KLUWVDQG%ORXVHV
IURP,QGLD WT/DS33/AB/R of 25 April 1997, at page 17.
66
Appellate Body report on ,QGLD 3DWHQW 3URWHFWLRQ IRU 3KDUPDFHXWLFDO DQG $JULFXOWXUDO &KHPLFDO
3URGXFWV (WT/DS50/AB/R), para.41.
67
The $VEHVWRVPanel acknowledges this in para. 8.270 of its report.
68
Panel Report on $VEHVWRV, at para. 8.272.
29
76. The EC consider that the Panel did not examine whether it was OHJLWLPDWH for Canada
to expect to be able to export a carcinogenic product but, instead, whether Canada
could DVDPDWWHURIIDFWDQWLFLSDWH the adoption of a measure restricting the use of
asbestos. This finding of the Panel is a legal error because the broader issue of
whether it is legitimate to expect to be able to continue to export a product after it has
been proven to be carcinogenic was not considered to be relevant by the Panel. The
Panel’s approach thus implies that Article XXIII:1(b) protects the expectation that,
once a tariff concession has been made for a product, the regulatory framework
applicable to that product will not be adapted in response to new scientific knowledge
concerning health risks and changes in attitudes towards the levels of acceptable risk.
77. In the view of the EC, Article XXIII:1(b) was meant, and has in practice been applied,
to protect OHJLWLPDWH expectations arising from tariff concessions in respect of
measures that had a protective impact equivalent to tariffs but were not subject to any
substantive rules. It was never intended, nor has it ever been used, to provide redress
for all unanticipated regulatory changes. The Members of the WTO know and expect
their exports to be subject to the health regulations of the importing Members, which
are subject to the disciplines for health measures set out in Article XX (b) of the
GATT, the Agreement on the Application of Sanitary and Phytosanitary Measures
(SPS Agreement) and the Agreement on Technical Barriers to Trade (TBT
Agreement). They know that they cannot legitimately expect that they will be able to
export a hazardous product to another Member merely because that Member has
made a tariff concession on that product.
78. The systemic implications of the Panel’s ruling should not be underestimated. The
developed Members of the WTO have made tariff concessions on most products. As
science and technology advances, the hazards of products are becoming increasingly
better understood and regulators have the duty to re-assess regulations for the purpose
of protecting citizens. Many of the products on which WTO Members exchanged
tariff concessions since 1947 were deemed safe when the concession was made, but
could be prohibited today or in the future. According to the Panel’s ruling, a vast
array of measures could potentially be subjected to complaints under Article
XXIII:1(b) of GATT 94. It is true that a finding that the ban of a hazardous product
impairs a tariff concession does not entail the obligation to remove the ban, as the
Member imposing the ban may offer compensation instead. However, failure to
remove the ban may nevertheless have serious consequences because, if no agreement
on compensation is agreed, the Member that has brought the complaint may suspend
the application of concessions or other obligations to the Member imposing the ban.
The ultimate sanction available to a complaining party seeking the removal of a
measure found to impair a tariff concession is thus equivalent to that available in the
case of a failure to implement an obligation.69
69
Article 22:8 of the DSU makes clear that, in a non-violation case, the complainant may maintain its
suspension of concession or other obligations until “the Member that must implement
recommendations or rulings provides a solution to the nullification or impairment of benefits, or a
mutually satisfactory solution is reached”. Also Article 26:1(b) of the DSU clarifies that there is no
obligation to withdraw the measure but only to make “ a mutually satisfactory adjustment”.
30
79. The EC consider that the Panel’s erroneous interpretation results from inappropriate
consideration of the terms of Article XXIII:1(b) in their proper context and in light of
their object and purpose. It does not give effective meaning to the terms of GATT
and, indeed, the whole WTO Agreements and is also not consistent with past practice
and the relevant GATT jurisprudence.
7KH3DQHO¶V UHDVRQLQJLVLQFRQVLVWHQWZLWKWKHV\VWHPRI*$77DQG
SDVWSUDFWLFHDQGUHOHYDQWFDVHODZ
80. Non-violation complaints have been extremely rare both under the GATT and the
WTO. There were only eight complaints under the GATT,70 of which, however, only
three succeeded. Since the establishment of the WTO, there have been - apart from
the case under appeal - three panels that examined a non-violation complaint: First,
the panel on the -DSDQ)LOP dispute.71 This complaint failed. Second, the panel on
(&/$1 In this case the non-violation issue was raised as a subsidiary issue and the
panel did not have to address it because it found the measure at issue to be
inconsistent with the concession claimed to have been impaired.72 And, third, the
panel on .RUHD*RYHUQPHQW3URFXUHPHQWThis panel also rejected the complaint.
81. The three non-violation complaints that succeeded during the past 53 years were the
following:
a) In 1950, a working party established at the request of Chile examined the
decision of Australia to remove a purchase subsidy on sodium nitrate, which
was mainly imported, while maintaining it on ammonium sulphate, which was
mainly of domestic origin. The working party could have concluded that the
two directly competing fertilisers, distinguished for no apparent reason other
than to favour domestic producers, were like products within the meaning of
the national treatment provisions of Article III and that the differentiation
between them was therefore a failure to observe obligations. Instead, it found
70
Report of the Working Party on $XVWUDOLDQ6XEVLG\RQ$PPRQLXP6XOSKDWH, adopted on 3 April 1950,
BISD II/188; Panel Report on 7UHDWPHQWE\*HUPDQ\RI,PSRUWVRI6DUGLQHV ("*HUPDQ\6DUGLQHV"),
G/26, adopted on 31 October 1952, BISD 1S/53; 8UXJXD\DQ 5HFRXUVH, adopted on 16 November
1962, BISD 11S/95; Panel Report on (&7DULII 7UHDWPHQW RQ ,PSRUWV RI &LWUXV 3URGXFWV IURP
&HUWDLQ&RXQWULHVLQWKH0HGLWHUUDQHDQ5HJLRQ ("(&&LWUXV3URGXFWV"), GATT Doc. L/5576, dated 7
February 1985 (unadopted); Panel Report on ((&3URGXFWLRQ $LGV *UDQWHG RQ &DQQHG 3HDFKHV
&DQQHG 3HDUV &DQQHG )UXLW &RFNWDLO DQG 'ULHG *UDSHV ("((& &DQQHG )UXLW"), GATT Doc.
L/5778, dated 20 February 1985 (unadopted); -DSDQ6HPLFRQGXFWRUV, adopted on 4 May 1988,
BISD 35S/116; ((&2LOVHHGV, adopted on 25 January 1990, BISD 37S/86; 8QLWHG 6WDWHV
$JULFXOWXUDO:DLYHU, adopted on 7 November 1990, BISD 37S/228.
71
Panel report on -DSDQ0HDVXUHV$IIHFWLQJ&RQVXPHU3KRWRJUDSKLF)LOPDQG3DSHU, WT/DS44/R.
72
(XURSHDQ &RPPXQLWLHV &XVWRPV &ODVVLILFDWLRQ RI FHUWDLQ &RPSXWHU HTXLSPHQW (WT/DS62/R,
WT/DS67/R, WT/DS68/R), at paras. 8.69-8.72.
73
.RUHD0HDVXUHV$IIHFWLQJ*RYHUQPHQW3URFXUHPHQW (WT/DS163/R), at para. 7.126.
31
that the differentiation was legal but impaired a benefit accruing to Chile. The
working party reached this conclusion after having agreed on the following
test for determining the existence of an impairment within the meaning of
Article XXIII:1(b):
“It was agreed that such impairment would exist if the action of the
Australian Government which resulted in upsetting the competitive
relationship between sodium nitrate and ammonium sulphate could not
reasonably have been anticipated by the Chilean Government, taking into
consideration all pertinent circumstances and the provisions of the General
Agreement, at the time it negotiated for the duty-fee binding on sodium
nitrate.”74
b) In 1952, in a case involving the tariff treatment of sardines by Germany, a
panel established at the request of Norway declined to rule that two
commercially equivalent types of sardines, one mainly exported by Portugal,
the other mainly by Norway, were like products within the meaning of the
most-favoured nation provisions of Article I of the GATT and that the tariff
differentiation was therefore inconsistent with Germany’s obligations under
that provision.75 The panel stated that “although the Norwegian complaint
rested to a large extent on the concept of ‘like products’ . . the Panel was
satisfied that it would be sufficient to consider whether in the conduct of the
negotiations at Torquay the two parties agreed expressly or tacitly to treat
these preparations as if they were ‘like products’ for the purposes of the
Genera Agreement”. Based on an analysis of the course of the negotiations, it
concluded that the differentiation between the two products impaired a benefit
accruing to Norway under the tariff concession it had negotiated with
Germany.76
c) The third successful case was the 1989 ((&2LOVHHGV complaint by the United
States against the subsidies the EC paid to producers of oilseeds.77 This panel
ruled that these subsidies, which varied with the level of import prices, impaired
benefits accruing to the United States under a zero tariff concession for oilseeds
because they systematically offset the price effect of the negotiated tariff
reduction. The panel based its ruling on a decision adopted by consensus by the
CONTRACTING PARTIES in 1955, according to which:
“It was agreed that a contracting party which has negotiated a tariff concession
under Article II may be assumed, for the purposes of Article XXIII, to have a
reasonable expectation, failing evidence to the contrary, that the value of the
74
Working Party report on 7KH$XVWUDOLDQ6XEVLG\RQ$PPRQLXP6XOSKDWH BISD II/193-194.
75
Panel report on 7UHDWPHQWE\*HUPDQ\RI,PSRUWVRI6DUGLQHVBISD 1S/53-59.
76
Panel report on 7UHDWPHQWE\*HUPDQ\RI,PSRUWVRI6DUGLQHVBISD 1S/57.
77
Panel report on ((& 3D\PHQWV DQG 6XEVLGLHV 3DLG WR 3URFHVVRUV DQG 3URGXFHUV RI 2LOVHHGV DQG
5HODWHG$QLPDO)HHG3URWHLQV(DS28/R) BISD 39S/91-127.
32
concession will not be nullified or impaired by the introduction or increase of
a domestic subsidy on the product concerned.”78
The Appellate Body confirmed that fiscal discrimination between directly competing
products for the purpose of protecting a domestic industry, as Australia practised in
1949, violates Article III:2 of the GATT.79 The Appellate Body also ruled that the
most-favoured-nation provisions of the GATT apply to GHIDFWR discrimination of the
kind Germany introduced in its import regime for sardines in 1952.80 Moreover,
unlike in 1952, a panel can no longer refuse to consider a violation complaint and
examine it instead as a non-violation complaint. If the $XVWUDOLDQ 6XEVLG\ and the
*HUPDQ 6DUGLQH cases were to arise today, they would, therefore, most likely be
resolved through violation complaints. Perhaps these early GATT cases were
handled under the non-violation provisions to spare Australia and Germany the
opprobrium of illegality. Non-violation complaints against subsidies unexpectedly
granted subsequent to an exchange of tariff concessions are now subject to specific
provisions in the Agreement on Subsidies and Countervailing Measures (SCM
Agreement) that codify the decisions of the CONTRACTING PARTIES.81
83. The above brief presentation of past practice and case law suggests the following
conclusions. If all the successful complaints under Article XXIII:1(b) were to be
submitted again to the WTO dispute settlement procedures, they would most likely be
resolved either as violation complaints under Article XXIII:1(a) of GATT 94 or under
the special non-violation provisions of Article 7 of the SCM Agreement. The
existence of Article XXIII:1(b) of GATT 94 would thus make no legal difference.
84. There has always been scepticism among the GATT Members as to the scope and
reach of the concept of non-violation nullification and impairment. Members of the
WTO have consistently called upon panels to exercise caution with respect to Article
XXIII:1(b). Thus, in the ((& ± 2LOVHHGV case, the United States stated that it
“concurred in the proposition that non-violation nullification or impairment should
remain an exceptional concept. Although this concept had been in the text of
Article XXIII of the General Agreement from the outset, a cautious approach should
continue to be taken in applying the concept”.82 The EEC stated in that case that
“recourse to the 'non-violation' concept under Article XXIII:1(b) should remain
78
BISD 3S/224.
79
See Appellate Body report on -DSDQ7D[HVRQ$OFRKROLF%HYHUDJHV, WT/DS8/AB/R, pages 28-29.
80
See the references to this principle in (XURSHDQ&RPPXQLWLHV5HJLPHIRUWKH,PSRUWDWLRQ6DOHDQG
'LVWULEXWLRQRI%DQDQDV5HFRXUVHWR$UELWUDWLRQE\WKH(XURSHDQ&RPPXQLWLHVXQGHU$UWLFOHRI
WKH'68, WT/DS27/AB/R, at para. 5.38.
81
Footnote 12 to the Subsidies Agreement makes clear that the existence of nullification or impairment
resulting from a subsidy “shall be established in accordance with the practice of application of these
provisions”. Today, the ((& 2LOVHHGV case would therefore most likely be examined not under
Article XXIII:1(b) of the GATT as such but under Article 7 of the SCM Agreement.
82
((&2LOVHHGV, BISD 37S/86, 118.
33
exceptional, since otherwise the trading world would be plunged into a state of
precariousness and uncertainty”.83 Similar attitudes are reflected in the findings of
the -DSDQ)XML)LOP panel report:
“Although the non-violation remedy is an important and accepted tool of
WTO/GATT dispute settlement and has been “on the books” for almost 50 years,
we note that there have only been eight cases in which panels or working parties
have substantively considered Article XXIII:1(b) claims. This suggests that both
the GATT contracting parties and WTO Members have approached this remedy
with caution and, indeed, have treated it as an exceptional instrument of dispute
settlement…The reason for this caution is straightforward. Members negotiate
the rules that they agree to follow and only exceptionally would expect to be
challenged for actions not in contravention of those rules.84
85. The above considerations suggest that, as long as Article XXIII:1(b) forms part of the
law of the WTO, it should be applied with utmost circumspection. Above all, rulings
should be avoided that expand the coverage of Article XXIII:1(b) beyond the type of
factual and legal cases submitted in the past. Unfortunately, this is precisely what the
Panel did in the present case.
86. It should be underlined once again that all past complaints related to measures
imposed for commercial purposes because Article XXIII:1(b) was conceived as a
legal instrument designed to prevent the circumvention of tariff concessions.
According the Panel’s interpretation, however, measures that are not imposed to
circumvent a tariff concession but for a perfectly legitimate policy objective could
become subject to the duty to offer redress. All past complaints concerned measures
with economic effects equivalent to an import tariff, such as production subsidies.
The Panel’s interpretation would take the application of Article XXIII:1(b) into the
field of domestic, origin-neutral regulations that are applied in a non-discriminatory
fashion and can, therefore, not have such economic effects. Most importantly, all
past complaints involved measures that fall now within the overall competence of the
WTO. But as a result of the Panel’s ruling, WTO panels would become competent to
decide whether or not retaliatory actions may be taken in response to measures that
are completely outside the remit of trade policy area. This would take the WTO’s
reach far beyond the domains assigned to it by its Members.
7KH3DQHO¶VLQWHUSUHWDWLRQIDLOHGWRGHWHUPLQHWKHVFRSHRIWKHEHQHILWV
WKDW DFFUXH WR &DQDGDXQGHU*$77LQ DFFRUGDQFH ZLWK LWV FRQWH[W
REMHFWDQGSXUSRVH
86. The Panel’s ruling that a tariff concession can be impaired by an unanticipated health
measure justified by Article XX(b) is, as already explained, based essentially on two
83
Ibid.
84
WT/DS44/R, at para. 10.36.
34
findings: First, that Article XXIII:1(b) covers all types of measures and hence both
commercial and health measures. Second, that Article XXIII:1(b) covers both
measures that are GATT-consistent, because they are not covered by an substantive
rule of the GATT, and measures that fall under a specific exception from the basic
rules of the GATT.
87. The logical conclusion one may draw from the above considerations of the Panel
would have been to reject, as a matter of legal principle, the possibility of a finding of
non-violation nullification or impairment with respect to health and safety regulations
that respond to developments in scientific knowledge concerning risks to human
health or indeed any of the other grounds for mentioned in Article XX or, to give
other examples, Articles XIX and XXI of GATT 94.
88. The EC argued before the Panel that, in general, a Member of the WTO cannot
legitimately expect another Member to refrain from resorting to Article XX (b) when
this was necessary to protect human health or life. In the view of the EC, the
protection of the expectation to be able to continue to export a product after it has
been found to be hazardous is not a benefit accruing under the GATT. The only
response of the Panel to this argument of the EC was that the terms of Article XXIII:1
(b) applied to all types of GATT-consistent measures and that the reason why they
were GATT-consistent was irrelevant. In the Panel’s view, “neither the text of
Article XXIII:1(b) of the GATT 1994 nor that of Article 26:1 of the Understanding
expressly incorporates the separation suggested by the EC between measures of a
purely commercial nature and measures designed to protect human health”. But the
EC’s argument is not concerned with the meaning of the term “measure”; the
question relates to the scope of the benefits, if any, that can accrue in such a factual
and legal situation to a Member under the GATT, in addition to that of compliance
with its provisions by other Members. Already the panel report on 8UXJXD\DQ
5HFRXUVHWR$UWLFOH;;,,, made clear that nullification or impairment “does not arise
merely because of existence of any measures; the nullification or impairment must
relate to benefits accruing to the contracting party ‘under the General Agreement’”.85
However, nowhere in its report does the Panel make an attempt to define the meaning
of the terms “benefits accruing under this Agreement”. The Panel therefore examined
whether Canada could have foreseen the denial of the benefit it claimed to have
without first having examined the question of whether that EHQHILW is among the
“benefits accruing under this Agreement” within the meaning of Article XXIII:1(b).
Instead, the only question that the Panel addressed was whether the “measure” alleged
to have impaired the tariff concession was a PHDVXUH covered by Article
XXIII:1(b).86 The failure of the Panel to take this into account is, in the view of the
EC, fundamental legal error because it erroneously interpreted the terms of Article
XXIII:1(b) outside their context, object and purpose.
85
BISD 11S/99.
86
Admittedly, it is difficult to understand the legal significance of the Panel’s discussion in paragraphs
8.285 and 8.286 of the Report. The Panel there correctly distinguishes between benefits and
foreseability, but fails to explain how this distinction informed its conclusion.
35
89. Which benefits accrue to a Member under the GATT 94? It would be legally
inappropriate to attribute meaning to the terms “benefits accruing under this
Agreement” by examining exclusively the terms of Article XXIII and their immediate
context. The ordinary meaning of these terms simply does not give any indication
which benefits accrue to a Member under the GATT 94 in addition to those arising
from the other Members’ compliance with its provisions. According to the customary
principles of treaty interpretation followed by the Appellate Body, the scope of those
benefits must be determined in their proper context, and in light of the object and
purpose. This means that the benefits accruing under the GATT 94 have to be
determined by looking at the object of purpose of the whole of GATT 94, including
Article XX thereof.
90. The EC submits that the Panel committed a serious legal error because it constantly
confounds in its analysis the concepts of “OHJLWLPDWH expectation” and “UHDVRQDEOH
expectation”.87 Article XXIII:1(b) is to protect the expectations on the basis of which
the WTO Members negotiated their tariff concessions. Its function is to ensure that a
WTO Member obtains compensation, or a right to the compensatory withdrawal of
concessions, if a measure introduced subsequent to the negotiation of a concession
frustrates one of those expectations. All terms in Article XXIII:1(b) must, therefore,
be given meaning with the protection of expectations arising from a tariff concession
in mind.
91. $Q H[SHFWDWLRQ DULVLQJ IURP D WDULII FRQFHVVLRQ LV ³OHJLWLPDWH´ LI LW KDV PHULW DQG
WKHUHIRUHGHVHUYHVWREHSURWHFWHGE\$UWLFOH;;,,,E To say that an expectation
is legitimate is, therefore, in a way equivalent to saying that its protection is “a benefit
accruing under the GATT”. To answer the question of whether an expectation is
legitimate, a Panel must conduct a QRUPDWLYHLQTXLU\into the object and purpose of
the GATT and the balance of rights and obligations established under it.
92. $QH[SHFWDWLRQDULVLQJIURPDWDULIIFRQFHVVLRQLV³UHDVRQDEOH´LILWZDVORJLFDODQG
EDVHGRQVRXQGMXGJHPHQW To determine whether an expectation is reasonable, the
panel must conduct a IDFWXDOLQTXLU\ into the circumstances prevailing at the time of
the negotiation of the tariff concession.88 If the Panel determines that the expectation
that the measure at issue would not be taken after the grant of the tariff concession is
“reasonable”, it has found that an informed GATT Member applying logic and sound
judgement could have taken the possibility of such a measure into account in
assessing the value of the concession. The measure at issue can then not cancel or
weaken the value that the negotiators could realistically attach to the tariff
concession. A determination that a measure had to be reasonably expected is,
therefore, essentially a determination that it does not “nullify or impair” the value of
the tariff concession within the meaning of Article XXIII:1(b).
87
For instance, in paragraphs 8.299 and 8.300 and in paragraphs 8.285 and 8.286 of the Report, the
Panel uses the terms “legitimate” and “reasonable” as if they were interchangeable.
88
See, for example, the inquiry in the Appellate Body report in (XURSHDQ &RPPXQLWLHV ± &XVWRPV
&ODVVLILFDWLRQRI&HUWDLQ&RPSXWHU(TXLSPHQW WT/DS62/AB/R, AB-1998-2, at para. 74 et seq.
36
93. Under WTO law, tariff concessions are accorded subject to explicit conditions (such
as the right to take safeguard actions under Article XIX or adopt public policy
measures under Article XX). Members, when assessing the value of their trading
partners’ concessions and deciding on the commitments they “paid” for those
concessions, take this into account. There is, therefore, no legitimacy in the
expectation that a GATT Member will refrain from adopting a measure that is
specifically foreseen in the GATT Agreement itself. The protection of this
expectation under Article XXIII:1(b) would have the consequence that the Member
could seek compensation for the loss of trading opportunities they did not “pay” for
and should therefore not be regarded as a benefit accruing under the GATT 94.
94. As explained, past Panels that examined complaints under Article XXIII:1(b),
explicitly or implicitly, determined the benefits that accrue under the GATT in the
light of DOO provisions of the GATT. In the very first case, the $XVWUDOLDQ 6XEVLG\
case, the CONTRACTING PARTIES had already decided that those benefits had to
be determined “taking into consideration all pertinent circumstances DQG WKH
SURYLVLRQV RI WKH *HQHUDO $JUHHPHQW´.89 It should be recalled that, textually, the
terms of Article XXIII:1(b) do not make DQ\ of the distinctions that past panels have
considered to be relevant in determining the scope of its application. Thus, the terms
of Article XXIII:1(b) do not distinguish between benefits accruing under the
provisions of Article II of GATT governing tariff concession and benefits accruing
under the other provisions of GATT. Nevertheless, only benefits accruing under
tariff concessions had been recognised in adopted panel reports under GATT 47.
This follows from the fact that the object and purpose of GATT is to provide a legal
framework for the incorporation of the results of tariff negotiation and that, in the
absence of a tariff concession, WTO Members cannot have any expectation of market
access. The concept that there must be an upsetting of a competitive relationship and
that this upsetting could not be foreseen are also not in the terms of Article XXIII:1(b)
but have been considered relevant by all past panels.
95. The $VEHVWRV Panel’s sterile formalism in determining the issue of application of
Article XXIII:1(b) of GATT 94 is in stark contrast to the much more subtle and
cautious approach of the CONTRACTING PARTIES.
By basing their
determinations on the object and purpose of the GATT, the CONTRACTING
PARTIES kept the application of Article XXIII:1(b) within the four corners of the
GATT. Conversely, according to the approach of the $VEHVWRVPanel, the object and
purpose of the WTO Agreement and the balance of interests reflected in its provisions
would be irrelevant. As a result, the scope of applications of Article XXIII:1(b) could
become virtually limitless. There can be little doubt that this is likely to put the WTO
legal system into legal uncertainty. The EC would like to illustrate this with the
following examples and considerations.
• The Appellate Body is no doubt aware of the fact that the TBT and the SPS
Agreements constitute carefully crafted compromises between trade interests
and legitimate public policy objectives. The purpose of these agreements is to
89
Working Party report on 7KH$XVWUDOLDQ6XEVLG\RQ$PPRQLXP6XOSKDWH BISD II/193-194.
37
ensure that the tariff concessions and other market access obligations are not
undermined by measures serving no legitimate public policy objective. They
partly fill the legal void that prompted the drafters of the GATT 47 to provide
for the possibility of complaints against legal measures. If non-violation
complaints against measures specifically permitted under the TBT or the SPS
Agreement were possible, the delicate balance underlying these Agreements
would be seriously undermined. Therefore, to claim redress against measures
that fall under the TBT or the SPS Agreement and are fully compatible with
WTO law should not be recognised as a benefit accruing to a Member under
GATT 94.
• Article XIX of the GATT and the Agreement on Safeguards explicitly give the
right to take safeguard actions and regulate in detail the right to compensation
by the Members affected by actions. It would be inappropriate to protect under
Article XXIII:1(b) an expectation that a safeguard action would not be taken
because, as the Panel says, the terms of Article XXIII:1(b) do not distinguish
between different types of disputes and therefore must include Article XIX
actions.
• Another example would be measures falling under the security exceptions,
permitted under Article XXI of GATT. It is difficult indeed to assume that
non-violation claims could be made under this heading as well for the same
reasons.
96. The above considerations make clear that the benefits accruing under the GATT, and
hence the range of expectations that are legitimate in terms of the case-law on Article
XXIII:1 (b), must be determined in the light of the object and purpose of the whole of
GATT 94. This requires an analysis of the measure claimed to impair GATT benefits
in the light the Agreement governing that measure and the whole of GATT 94. The
legitimacy of the expectation that a health measure will not be taken can consequently
not be determined without examining the law governing health measures and the
balance of interests underlying that law.
97. One of the fundamental purposes of Article XXIII:1(b) is to offer redress when the
balance of rights and obligations has been disturbed E\DPHDVXUHIDOOLQJXQGHUWKH
*$77 ¶V MXULVGLFWLRQ EXW QRW FRYHUHG E\ LWV VXEVWDQWLYH REOLJDWLRQV90 The
balance of advantages that Article XXIII:1(b) protects today is the balance of
advantages under the GATT 94 as a whole, but not beyond. It is into this Agreement
that all the concessions negotiated in the Uruguay Round and previous rounds were
incorporated. The participants in that Round knew that the value of the concessions
could be adversely affected by the measures taken to protect human, animal or plant
life or health, national security interests, etc. imposed consistently with the WTO
agreements. The participants can, therefore, reasonably be expected to have taken this
fact into account in assessing the value of the concessions they obtained. If a
Member takes a GATT 94-consistent measure that is specifically foreseen in one of
90
See E/PC/T/A/PV/6 of 2 June 1947, page 5.
38
the WTO agreements, such as health measures consistent with Article XX (b) of the
GATT, it therefore does not disturb the balance of rights and obligations under GATT
94. However, if a Member taking a measure specifically foreseen in GATT 94 were
to offer redress under Article XXIII:1 (b), it is precisely WKHQ that the negotiated
balance of right and obligations for the defending Member that is disturbed.
7KH3DQHO¶VLQWHUSUHWDWLRQLVFRQWUDU\WRRWKHUSULQFLSOHVRIFXVWRPDU\
LQWHUQDWLRQDOODZFRQFHUQLQJWUHDW\LQWHUSUHWDWLRQ
98. The EC submits that the Panel’s interpretation is also contrary to the principle of LQ
GXELR PLWLXV, it fails to abide by the principle of judicial restraint and, therefore,
violates Articles 3:2 and 19:2 of the DSU for the following reasons.
99. The relevant preparatory history can be used here to confirm the above arguments.
The concept of nullification and impairment originated in trade agreements concluded
in the 1930s and 1940s, in particular by the United States. Most of these agreements
contained a clause providing for sympathetic consideration of any representation that
a measure, whether or not it conflicted with the agreement, had the effect of
nullifying or impairing an object of the agreement.91 If the representation did not bear
fruit, the disenchanted party’s only option was to withdraw from the agreement, an
option that was readily available since the agreements could be terminated on short
notice. In such a legal setting, a consultation on the interpretation or application of
the agreement is at the same time a negotiation about its continuation and,
consequently, the question of whether a measure affects the object of the agreement is
more important than the question of whether it is consistent with the agreement. In
the original GATT, one organ - the CONTRACTING PARTIES acting jointly - was
assigned to handle all such matters. Against this background, it was natural for the
drafters of Article XXIII to submit the responses to all measures causing impairment be they legal or illegal - to the same decision making procedures.92
100. The aim of Article XXIII was to ensure that the negotiated balance of concessions
was maintained even in situations that could not be foreseen and that could
consequently not be defined. Since the decisions under that provision could only be
taken by the community of trading nations as a whole, they could be expected to be
reasonable. If a government considered that a decision under Article XXIII
nevertheless ran against its fundamental interests, it could withdraw from the GATT
with a sixty-day notice. Given that sovereignty could be re-established so easily,
there was no reason to fear the transfer of decision-making power to the
91
See for instance Article XIV of the Reciprocal Trade Agreement Between the United States of America
and Mexico of 23 December 1942.
92
Frieder Roessler, “The Concept of Nullification and Impairment in the Legal System of the World
Trade Organization”, in Ernst-Ulrich Petersmann (ed.), ,QWHUQDWLRQDO7UDGH/DZDQGWKH*$77:72
'LVSXWH 6HWWOHPHQW 6\VWHP, Studies in Transnational Economic Law, Volume 11, Kluwer Law and
Taxation Publishers (Deventer and Boston: 1997), pages 123-142.
39
CONTRACTING PARTIES under Article XXIII.93 One author pointed out how the
framework for decision-making in which the concept of nullification and impairment
is applied evolved over the years:
“Originally, the concept served to define the scope of consultations under bilateral
trade agreements. The negotiators of the GATT conceived it as a benchmark
guiding multilateral decision-making and negotiations. The administrators of the
GATT applied the concept in the context of procedures under which each
contracting party had the possibility to block the adoption of a finding of
nullification or impairment. Under the WTO Agreement, however, the decisions
determining the benefits that might accrue under a provision in addition to the
benefit of its observation would be determined by the Appellate Body, whose
decisions must be unconditionally accepted. The drafters of the WTO Agreement
thus decided to define the scope of the jurisdiction of an independent tribunal
with a legal concept originally designed to set a framework for negotiations.”94
101. As the Appellate Body has ruled in the (&±+RUPRQHV case, we cannot lightly
assume that sovereign states intended to impose upon themselves the more onerous,
rather than the less burdensome obligation when assuming the obligations for
example under Article XX.95 It is not possible to sustain such an assumption and to
warrant such a far-reaching interpretation in the absence of specific treaty language.
As explained above, the Appellate Body and past panel reports have recognised that
WTO Members should be free to pursue their legitimate domestic goals. In the report
on the 86 ± *DVROLQH case, for example, the Appellate Body underlined that its
ruling:
“It does not mean, or imply, that the ability of any WTO Member to take
measures to control air pollution or, more generally, to protect the environment, is
at issue. That would be to ignore the fact that Article XX of the *HQHUDO
$JUHHPHQW contains provisions designed to permit important state interests including the protection of human health, as well as the conservation of
exhaustible natural resources - to find expression. The provisions of Article XX
were not changed as a result of the Uruguay Round of Multilateral Trade
Negotiations. Indeed, in the preamble to the :72$JUHHPHQW and in the 'HFLVLRQ
RQ7UDGHDQG(QYLURQPHQW, there is specific acknowledgement to be found about
the importance of coordinating policies on trade and the environment. WTO
93
Robert E. Hudec, 7KH*DWW/HJDO6\VWHPDQG:RUOG7UDGH'LSORPDF\, Second Edition, Butterworth
Legal Publishes, pages 37-46.
94
Frieder Roessler, The Concept of Nullification and Impairment in the Legal System of the World Trade
Organisation, in: E.-U. Petersmann (ed.), International Trade Law and the GATT/WTO Dispute
Settlement System, Studies in Transnational Economic Law, Kluwer 1997, page 142.
95
See Appellate Body report on (&±+RUPRQHV case, supra, at para. 165 and footnote thereto.
40
Members have a large measure of autonomy to determine their own policies on
the environment (including its relationship with trade), their environmental
objectives and the environmental legislation they enact and implement. So far as
concerns the WTO, that autonomy is circumscribed only by the need to respect
the requirements of the *HQHUDO$JUHHPHQW and the other covered agreements.”96
102. The $VEHVWRV Panel’s finding on this point disregards the above principles. It is
based on the erroneous assumption that:
“…[U]nder Article XXIII:1(b), in general, the risk of an effective increase
in WKH FRVW RI PHDVXUHV necessary to protect public health because of the
applicability of Article XXIII:1(b) to measures justified under Article XX
can only be YHU\PDUJLQDO. In fact, considering the criteria mentioned in
the previous paragraph, very few measures of this kind could give rise to
the application of Article XXIII:1(b).”97
103. The EC submits that this is a totally unsubstantiated and unfounded statement.
The Panel never requested and the parties to the present dispute provided no
information whatsoever indicating that the potential cost of taking the measure in
question was going to be “very marginal”. As a matter of fact, the EC does not know
from where and on what basis the Panel arrived at that conclusion. This shows that
the Panel clearly misunderstood the important implications of taking measures to
protect human health and the tremendous disincentive its finding on the potential
application of a non-violation complaint provides to Members wishing to apply
legitimate regulatory policy objectives.
104. Therefore, instead of exercising caution and judicial restraint, the Panel in the
present case laid down a legal principle that is an error in law because it does not give
effective interpretation to all the provisions of GATT and the WTO Agreement. It is
also contrary to the basic principle laid down in Articles 3.2 and 19.2 of the DSU.
WTO panels should, therefore, refrain from using their dispute settlement authority in
such a manner in cases of this nature.
105. For the above reasons, the EC requests the Appellate Body to reverse the Panel’s
findings in paragraphs 8.262, 8.264, 8.273 and 8.274 of the Report.
96
See Appellate Body report on 86 ± *DVROLQH case, supra, at pages 29-30 (emphasis in original,
footnote omitted). See also the adopted Panel report on 7KDLODQG±5HVWULFWLRQVRQ,PSRUWDWLRQRIDQG
,QWHUQDO7D[HVRQ&LJDUHWWHV DS10/R, of 5 October 1990, para. 74.
97
Panel Report on $VEHVWRV, at para. 8.273 (emphasis added).
41
&21&/86,216
106. For the above reasons, the EC requests the Appellate Body to reverse the
conclusions of the Panel in paragraphs 9.1(b) and (c) as well as the findings made in
paragraphs 8.262, 8.264, 8.273 and 8.274 of the Report.
**********************
$11(;:
One Annex attached
42
$11(;(
/H*URXSHVSpFLDODIDLWXQHPDXYDLVHDSSOLFDWLRQGHV
TXDWUHFULWqUHVGpJDJpVMXVTX¶jSUpVHQWSDUOD
MXULVSUXGHQFHSRXUGpFLGHUODTXHVWLRQGHVLPLODULWpDX
VHQVGHO¶DUWLFOH,,,GX*$77
$ ,QWURGXFWLRQ
1. En se référant au rapport du Groupe de travail sur les $MXVWHPHQWV ILVFDX[ j OD
IURQWLqUH, sur le rapport du Groupe spécial (WDWV8QLV ± HVVHQFH, et surtout sur le
rapport de l’Organe d’appel -DSRQ±ERLVVRQVDOFRROLTXHV, le Groupe spécial dans le
cas d’espèce a, dans ses remarques introductives concernant l’analyse de la similarité,
correctement défini son approche. C’est pourquoi les Communautés européennes (ciaprès « CE ») ne contestent pas en soi les constatations figurant aux paragraphes
8.112 à 8.116 et, notamment, pas celles du paragraphe 8.115 du rapport.
2. Nous rappelons pour mémoire la constatation du Groupe spécial que:
$ FHFL QRXV DLPHULRQV DMRXWHU TXH PrPH VL SRXU GHV UDLVRQV GH FODUWp LO HVW
QpFHVVDLUHG
pWXGLHUFKDTXHFULWqUHVpSDUpPHQWLOHVWIRUWSUREDEOHTX
LOV VRLHQW
ODUJHPHQW LQWHUGpSHQGDQWV (Q G
DXWUHV WHUPHV LO QH VHPEOH SDV DSSURSULp
G
H[DPLQHUFHVFULWqUHVLVROpPHQWOHVXQVGHVDXWUHV1RWUHH[DPHQGRLWVHIRQGHU
VXU O
pYDOXDWLRQ GH FKDTXH FULWqUH GDQV VRQ FRQWH[WH F
HVWjGLUH DX UHJDUG GHV
DXWUHV FULWqUHV MXJpV SHUWLQHQWV HQ O
HVSqFH (para. 8.115, c’est nous qui
soulignons
3. L’erreur du droit est qu’après avoir ainsi correctement souligné que les critères
relatifs à la similarité étaient LQWHUGpSHQGDQWV le Groupe spécial a mal appliqué ce
rapport d’interdépendance entre les critères puisqu’il a en réalité fait dépendre
certains critères, qu’il a pourtant jugé pertinents (caractéristiques physiques,
classement tarifaire), du seul critère des utilisations finales. En établissant ainsi une
43
hiérarchie entre les critères, il a fait une mauvaise application de la jurisprudence.
Cette erreur a été d’autant plus dommageable que le Groupe spécial a, en outre, fait
une application erronée du critère des utilisations finales.
% /H *URXSH VSpFLDO D IDLW XQH DSSOLFDWLRQ HUURQpH GH OD
MXULVSUXGHQFHHQPDWLqUHGHVLPLODULWp
4. Il est important de remarquer d’emblée que le Groupe spécial a reconnu qu’aucun des
critères pertinents ne serait, en l’espèce, rempli en cas d’interprétation stricte.
• C’est vrai des caractéristiques physiques de l’amiante et des produits de
substitution, qu’il s’agisse de leur QDWXUHRXTXDOLWp
− « /H*URXSHVSpFLDOFRQVWDWHTX
DXFXQHSDUWLHQHFRQWHVWHTXHODVWUXFWXUHGHV
ILEUHV GH FKU\VRWLOH VRLW XQLTXH GDQV OD QDWXUH DLQVL TX
DX UHJDUG GHV ILEUHV
DUWLILFLHOOHVVXEVWLWXDEOHVjO¶DPLDQWHFKU\VRWLOH/HVSDUWLHVV
DFFRUGHQWjGLUH
TX
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O
DUWLFOH,,,Q
DODPrPHVWUXFWXUHTXHFHVRLWSDUVDIRUPHVRQGLDPqWUHVD
ORQJXHXURXVRQpYHQWXHOOHSURSHQVLRQjOLEpUHUGHVSDUWLFXOHVD\DQWFHUWDLQHV
FDUDFWpULVWLTXHV(QRXWUHHOOHVQ
RQWSDVODPrPHFRPSRVLWLRQFKLPLTXHFH
TXL IDLW TX
DXFXQH G
HQWUH HOOHV Q
D HQ WHUPHV SXUHPHQW SK\VLTXHV OD PrPH
QDWXUHRXODPrPHTXDOLWp(QFHVHQVLOSRXUUDLWrWUHFRQFOXTX
HOOHVQHVRQW
SDVVLPLODLUHV» (para. 8.121 ) ;
• ou même de OHXUVSURSULpWpV
− « (Q FH TXL FRQFHUQH OHV SURSULpWpV QRXV QRWRQV TX
DXFXQH ILEUH GH
VXEVWLWXWLRQQ
DjHOOHVHXOHWRXWHV OHV SURSULpWpV HW TXDOLWpV UpXQLHV GDQV OD
VHXOHILEUHGHFKU\VRWLOH /
DUWLFOH SDUDJUDSKH , VHFRQG DOLQpD GX 'pFUHW
UHFRQQDvW FH IDLW HQ IRQGDQW VHV FULWqUHV GH VXEVWLWXWLRQ QRWDPPHQW VXU OHV
JDUDQWLHV WHFKQLTXHV GH VpFXULWp FRUUHVSRQGDQW j OD ILQDOLWp GH O
XWLOLVDWLRQ
8QH LQWHUSUpWDWLRQ pWURLWH GH OD QRWLRQ GH SURGXLW VLPLODLUH QRXV FRQGXLUDLW
SHXWrWUH j H[FOXUH OD VLPLODULWp GH SURGXLWV TXL QH SUpVHQWHQW SDV HQ WRXWH
FLUFRQVWDQFHVOHVPrPHVSURSULpWpV » (para. 8.124 )
• C’est aussi vrai du FODVVHPHQWWDULIDLUH :
44
− « 1RXVQHFRQVLGpURQVSDVTXHOHIDLWTXHOHVILEUHVG
DPLDQWHVRLHQWFODVVpHV
VRXV GHV SRVLWLRQV SURSUHV VRLW GpWHUPLQDQW GDQV OH FRQWH[WH GH OD SUpVHQWH
DIIDLUH /HV ILEUHV G
$39 GH FHOOXORVH HW GH YHUUH VRQW DXVVL FODVVpHV
UHVSHFWLYHPHQWVRXVGHVSRVLWLRQVWDULIDLUHVGLIIpUHQWHV » (para. 8.143 )
• Et c’est vrai également des XWLOLVDWLRQVILQDOHV :
− «(QO
HVSqFHPrPHVLOHVXWLOLVDWLRQVILQDOHVGHVILEUHVGHFKU\VRWLOHG
XQHSDUW
HWOHVILEUHVG
$39GHFHOOXORVHHWGHYHUUHG
DXWUHSDUWQHVRQWOHVPrPHVTXH
GDQV XQH IDLEOH SDUWLH GH OHXUV DSSOLFDWLRQV UHVSHFWLYHV LO \ D GHV
FLUFRQVWDQFHVRFHVDSSOLFDWLRQVVRQWVLPLODLUHV » (para. 8.125 )
5. Il semble paradoxal et, en droit, erroné que, en dépit de toutes les constatations de fait
précitées, le Groupe spécial soit en définitive arrivé à la conclusion que l’amiante et
les produits de substitution étaient juridiquement similaires. Cette conclusion erronée
résulte de deux types d’erreur d’interprétation : d’abord, concernant l’application
critère par critère ; ensuite et surtout, concernant l’instauration d’une hiérarchie entre
les critères.
(UUHXUVGDQVO¶DSSOLFDWLRQFULWqUHSDUFULWqUH
D 3URSULpWpVQDWXUHHWTXDOLWpGHVSURGXLWV
6. Les CE ne reviendront pas sur les constatations des paragraphes 8.121 et 8.124, aux
termes desquels il résulte que l’amiante et les produits de substitution ont des
propriétés, nature et qualité différentes. Ces constatations de fait, qui n’ont du reste
pas été contestées, même par le Canada, ne sont pas susceptibles d’un réexamen en
appel.
7. Nous ne voudrions pas non plus laisser entendre que les CE aient pu raisonnablement
soutenir qu’il fallait que des produits aient une composition chimique identique pour
être jugés similaires. Du reste, le Groupe spécial -DSRQ±ERLVVRQVDOFRROLTXHV a déjà
constaté que la différence dans une caractéristique physique de deux produits
45
n’empêche pas de constater leur similarité dès lors que la plupart d’entre elles sont les
mêmes.98
8. Les CE auraient toutefois souhaité que le Groupe spécial donne des exemples
concernant son raisonnement que les produits qui, selon lui, n’ayant « ULHQ j YRLU
HQWUH HX[ VXU OH SODQ GH O
XVDJH TXL HQ HVW IDLW GDQV OD YLH UpHOOH SRXUUDLHQW rWUH
FRQVLGpUpV FRPPH VLPLODLUHV VXU OD EDVH GH OHXU FRPSRVLWLRQ FKLPLTXH » (para.
8.123). En effet, il semble hautement improbable que des produits ayant la même
composition chimique n’aient pas des utilisations finales communes. Il faut
remarquer que la constatation d’un autre Groupe spécial, ,QGRQpVLH ± DXWRPRELOHV,
selon laquelle :
« &HUWHV LO HVW SRVVLEOH TXH GHV SURGXLWV SK\VLTXHPHQW WUqV GLIIpUHQWV SXLVVHQW
VHUYLUDX[PrPHVXWLOLVDWLRQVPDLVOHVGLIIpUHQFHVG
XWLOLVDWLRQVRQWJpQpUDOHPHQW
LPSXWDEOHV DX[ GLIIpUHQFHVGRQW HOOHV SHUPHWWHQW G
pYDOXHU O
LPSRUWDQFHHQWUH
OHVFDUDFWpULVWLTXHVSK\VLTXHVGHVSURGXLWV'HPrPHOHGHJUpGHVXEVWLWXDELOLWp
GHV SURGXLWV SHXW DXVVL rWUH GpWHUPLQp SRXU XQH WUqV JUDQGH SDUW SDU OHXUV
FDUDFWpULVWLTXHVSK\VLTXHV »,99
paraît plus correct et correspond davantage à la notion d’interdépendance des
critères dégagée dans l’approche initiale du Groupe spécial.
LGRQQpHVpOpPHQWDLUHVVXUO
DPLDQWH
9. Il n'est sans doute pas inutile de rappeler, comme l'a fait du reste le Groupe spécial
aux paragraphes 2.1 et 2.2 de son rapport, que :
•
L'amiante est un "minéral fibreux de silicates hydratés"100 qui se divise en deux
groupes: les amphiboles et les serpentines. Dans le groupe des amphiboles, on
distingue cinq variétés d'amiante: anthophyllite, amosite (ou amiante brun),
crocidolite (ou amiante bleu), actinolite, et trémolite. Le groupe des serpentines
98
WT/DS8/10/11/R, adopté le 11-07-1996, para. 6.23.
99
WT/DS54/55/59/64/R, adopté le 23-07-1998, para. 14.173.
100
3HWLW5REHUW, Dictionnaire de la langue française.
46
se limite au chrysotile (ou amiante blanc).
propriétés physiques et chimiques différentes.
•
Ces variétés d'amiante ont des
Ce sont principalement l'amosite, le crocidolite et le chrysotile qui ont été
exploités à des fins industrielles et commerciales. Les qualités particulières des
fibres d'amiante (par exemple, résistance à des températures très élevées, ainsi
qu'à diverses agressions chimiques), dues à leurs propriétés physiques et
chimiques propres, en ont permis de multiples applications, que ce soit pour des
produits industriels ou de grande consommation, ou dans le domaine de la
construction.
10. Or, il nous semble qu’en partant du postulat que l’amiante était un « produit unique »,
le Groupe spécial a biaisé son raisonnement. S’il avait fait une analyse correctement,
plus fine, produit par produit, il aurait pu, en dépit du fait que les « variétés d’amiante
ont des propriétés physiques et chimiques différentes », parvenir à la conclusion que
l’amiante amphibole était similaire, au sens de l’article III.4 du GATT 94, à l’amiante
chrysotile, constatation sur laquelle les parties avaient du reste fini par tomber
d’accord101, mais il n’aurait pas pu aboutir à une constatation analogue pour les
différentes variétés d’amiante et les différents produits de substitution invoqués par le
Canada.
11. Du reste, il est impossible de savoir à la lecture du rapport quelles sont exactement les
caractéristiques physiques de tel ou tel produit de substitution invoqué par le Canada
qui ont permis au Groupe spécial d’aboutir à la conclusion selon laquelle : « $X
UHJDUG GX FULWqUH GH SURSULpWpV OHV ILEUHV GH FKU\VRWLOH VRQW VLPLODLUHV DX[ ILEUHV
G¶$39GHFHOOXORVHHWGHYHUUHª (para. 8.125).
12. En outre, l’argument selon lequel :
«… /HJURXSHVSpFLDOJapon – Droits de douaneILVFDOLWpHWSUDWLTXHVHQPDWLqUH
G
pWLTXHWDJH FRQFHUQDQW OHV YLQV HW OHV ERLVVRQV DOFRROLTXHV LPSRUWpV D
FRQVLGpUpTXHOHJLQODYRGNDOHZKLVN\OHVEUDQGLHVOHVOLTXHXUVOHVYLQVQRQ
PRXVVHX[ HW OHV YLQV PRXVVHX[ GHYDLHQW rWUH FRQVLGpUpV FRPPH GHV SURGXLWV
VLPLODLUHVDXVHQVGHO
DUWLFOH,,,FRPSWHWHQXQRWDPPHQWGHOHXUVSURSULpWpVHW
GHOHXUVXWLOLVDWLRQVILQDOHVVLPLODLUHV »
101
Cf. réponse du Canada à la première question du Groupe spécial posée à l’issue de la deuxième
réunion (WT/DS135/R/Add.1, para. 212 , p.60), et premier exposé oral des Communautés européennes
du 1er juin 1999, para. 112.
102
Adopté le 10 novembre 1987, IBDD S34/92, ci-après "-DSRQ±%RLVVRQVDOFRROLTXHV".
103
,ELGHP, para. 5.6.
47
passe étrangement sous silence le rapport d’un autre Groupe spécial du GATT de
1994 &RUpH ± ERLVVRQV DOFRROLTXHV selon lequel le Groupe a jugé qu’il n’avait pas
d’éléments de preuve suffisants pour déterminer que la vodka et le soju étaient des
produits similaires, alors même qu’il avait été jugé au préalable qu’ils étaient des
produits directement concurrents ou directement substituables.104
13. Les CE auraient souhaité que le Groupe spécial réponde précisément à l’argument
résumé au paragraphe 3.444 du rapport en ne se bornant pas à citer, comme il l’a
fait à la note de bas de page no 92 que: « Le Groupe spécial n'estime pas que les
éléments de fait propres à cette affaire et les conclusions du groupe spécial 0HVXUHV
DSSOLTXpHV SDU OD &(( DX[ SURWpLQHV GHVWLQpHV j O
DOLPHQWDWLRQ GHV DQLPDX[ (voir
para. 4.2) permettent de tirer dans la présente affaire les conclusions suggérées par les
Communautés européennes. » Le rapport est en conséquence insuffisamment motivé
dès lors que les raisons qui ont conduit le Groupe spécial à rejeter l’argument des CE
n’apparaissent pas complètement. Le Groupe spécial n’a, du reste, même pas pris la
peine de répondre aux arguments développés dans les paragraphes suivant le
paragraphe 3.444, tiré de la distinction que fait la jurisprudence entre produits
similaires et produits concurrents ou substituables. Les CE renouvellent donc les
arguments qu’elles ont développés à ce titre des paragraphes 3.442 à 3.453 du rapport
du Groupe spécial, et demandent respectueusement à l’Organe d’appel d’y répondre.
E 8WLOLVDWLRQVILQDOHV
14. Nous reviendrons plus tard sur l’erreur d’analyse juridique qu’a commise le Groupe
spécial s’agissant de ce critère. Il est néanmoins paradoxal de constater que la partie
du rapport consacrée au critère des utilisations finales est la moins motivée alors
même que le Groupe spécial s’est fondé principalement, voire même uniquement, sur
ce critère. Il n’est mentionné dans cette partie, ni dans le paragraphe 8.125, auquel
elle fait référence à la note de bas de page 101, aucune utilisation finale ! Il est donc
impossible de déterminer, à la lecture du rapport, quelles utilisations finales ont en
commun, respectivement, les fibres d’APV, de cellulose, et de verre, d’une part, et les
différentes fibres d’amiante, d’autre part.
15. Le Groupe spécial s’est contenté des constatations selon lesquelles :
104
Rapport, DS75/84/R, para. 10.104, adopté le 17-02-1994 (cette constatation n’a pas fait l’objet d’un
appel).
48
« OHVSURSULpWpVUHVSHFWLYHVGHVILEUHVGHFKU\VRWLOHG
XQHSDUWHWGHVILEUHVG
$39GH
FHOOXORVH RX GH YHUUH G
DXWUH SDUW SHUPHWWDLHQW FHUWDLQHV XWLOLVDWLRQV ILQDOHV
LGHQWLTXHVRXGXPRLQVVLPLODLUHV » (para. 8.136, c’est nous qui soulignons) ;
ou encore :
« PrPH VL OHV XWLOLVDWLRQV ILQDOHV GHV ILEUHV GH FKU\VRWLOH G
XQH SDUW HW OHV ILEUHV
G
$39 GH FHOOXORVH HW GH YHUUH G
DXWUH SDUW QH VRQW OHV PrPHV TXH GDQV XQH IDLEOH
SDUWLHGHOHXUVDSSOLFDWLRQVUHVSHFWLYHVLO\DGHVFLUFRQVWDQFHVRFHVDSSOLFDWLRQV
VRQWVLPLODLUHV » (para. 8.125).
16. De telles constatations nous semblent insuffisamment motivées au regard des
standards élevés dont devraient témoigner les rapports des groupes spéciaux. Il est
vrai que le Canada n’a pas, en l’espèce, apporté des éléments suffisants pour
présumer des utilisations finales communes aux fibres de substitution et aux fibres
d’amiante. Ces lacunes sont d’autant plus graves que, nous allons voir, le Groupe
spécial s’est fondé exclusivement sur le critère des utilisations finales.
F &ODVVHPHQWWDULIDLUH
17. Après avoir constaté que les fibres d’amiante, d’APV, de cellulose et de verre étaient
toutes classées sous des positions tarifaires différentes, le Groupe spécial rejette ce
critère comme non pertinent au motif que :
« FHFODVVHPHQWODLVVHDSSDUDvWUHOHXUGLIIpUHQFHGHQDWXUHjVDYRLUPLQpUDOHRX
YpJpWDOHHWOHIDLWTX
HOOHVVRQWDUWLILFLHOOHVRXQDWXUHOOHV » (para. 8.143).
18. Le fait que le classement tarifaire reprenne des distinctions liées à la nature des
produits (fait guère étonnant au regard de l’interdépendance des critères) devrait, en
toute logique, souligner l’importance des caractéristiques physiques pour l’étude de la
similarité. Mais, encore une fois, le Groupe spécial privilégie indûment le critère
d’utilisation finale.
49
G *RWVHWKDELWXGHVGHVFRQVRPPDWHXUV
19. Même si la constatation du Groupe spécial selon laquelle :
« (QO
RFFXUUHQFHQRXVFRQVWDWRQVWRXWG
DERUGTXHSRXUGpWHUPLQHUOHVJRWVHW
KDELWXGHVGHVFRQVRPPDWHXUVLOIDXGUDLWQRXVSODFHUGDQVOHWHPSVDYDQWO
HQWUpH
HQYLJXHXUGHO
LQWHUGLFWLRQFRQWHQXHGDQVOH'pFUHW. » (para. 8.139)
est sans portée juridique, puisque le Groupe spécial n’a pas finalement retenu le critère
des goûts et habitudes des consommateurs comme pertinent en l’espèce, les CE pensent
que cette constatation est entachée d’erreur de droit car il est bien établi par la
jurisprudence que, pour établir la compatibilité d’une mesure, le juge de l’OMC doit se
placer jusqu’à la date d’établissement du Groupe spécial, et non nécessairement remonter
à la date à laquelle la mesure est entrée en vigueur, dans son appréciation de la validité
de ce critère105.
+LpUDUFKLVDWLRQHUURQpHGHVFULWqUHV
20. La primauté du critère de l’utilisation finale transpire tout au long de l’analyse de la
similarité mais elle ressort particulièrement au paragraphe 8.125, relatif aux
SURSULpWpVSK\VLTXHV, qu’il convient de citer LQH[WHQVR :
©(QO
HVSqFHPrPHVLOHVXWLOLVDWLRQVILQDOHVGHVILEUHVGHFKU\VRWLOHG
XQHSDUWHW
OHVILEUHVG
$39GHFHOOXORVHHWGHYHUUHG
DXWUHSDUWQHVRQWOHVPrPHVTXHGDQV
XQHIDLEOHSDUWLHGHOHXUVDSSOLFDWLRQVUHVSHFWLYHVLO\DGHVFLUFRQVWDQFHVRFHV
DSSOLFDWLRQV VRQW VLPLODLUHV $ FH PRPHQW OHXUV SURSULpWpV VRQW pTXLYDOHQWHV
VLQRQ LGHQWLTXHV &
HVW FH PRPHQWOj TXL QRXV LQWpUHVVH FHOXL R HOOHV VRQW
XWLOLVpHVjODPrPHILQ&RPPHQRXVO
DYRQVPHQWLRQQpSOXVKDXWLOLPSRUWHGHQH
SDVH[DPLQHUOHVFULWqUHVVXJJpUpVSRXUO
pWDEOLVVHPHQWGHODVLPLODULWpLVROpPHQW
OHVXQVGHVDXWUHV'DQVOHFDVSUpVHQWQRXVFRQVLGpURQVTXHO
XWLOLVDWLRQILQDOH
GHV SURGXLWV GRLW LQIOXHQFHU OD IDoRQ GRQW QRXV GHYRQV HQYLVDJHU OHV SURSULpWpV
105
Cf. notamment rapport du Groupe spécial ,QGH±5HVWULFWLRQVTXDQWLWDWLYHVjO¶LPSRUWDWLRQGHSURGXLWV
DJULFROHVWH[WLOHVHWLQGXVWULHOV, WT/DS90/R, adopté le 22-09-1999, paragraphes 5.159 à 5.163.
50
GHV ILEUHV FRPSDUpHV GDQV OD PHVXUH R DXFXQH GHV ILEUHV PHQWLRQQpHV SDU OH
&DQDGDQHUHPSOLWHQ WRXWHV FLUFRQVWDQFHV OHV PrPHV IRQFWLRQVª (para. 8.125 ;
c’est nous qui soulignons)
21. Les autres critères sont également subordonnés à celui des utilisations finales :
q C’est vrai du FODVVHPHQWWDULIDLUH (para. 8.143 ):
o « QRXV DYRQV GpMj FRQVWDWp TXH FH IDFWHXU Q
DIIHFWDLW SDV OH IDLW TXH
OHXUV SURSULpWpV HW OHXU XWLOLVDWLRQ ILQDOH VRLHQW GDQV FHUWDLQHV
FLUFRQVWDQFHVOHVPrPHV »
q C’est vrai aussi de laQDWXUHHWTXDOLWpGHVSURGXLWV (para. 8.123 ):
o « (QO
HVSqFHO
DPLDQWHHVWXQSURGXLWXQLTXHSDUVHVFDUDFWpULVWLTXHV
SK\VLTXHV HW FKLPLTXHV 7RXWHIRLV QRXV QRWRQV TXH GDQV QRPEUH
G
XWLOLVDWLRQV LQGXVWULHOOHV G
DXWUHV SURGXLWV UHFRXYUHQW GHV
DSSOLFDWLRQV GH O
DPLDQWH 6L OHV FDUDFWpULVWLTXHV FKLPLTXHV HW
SK\VLTXHV GHYDLHQW rWUH UHFRQQXHV FRPPH GpWHUPLQDQWHV GDQV FHWWH
DIIDLUHQRXVGHYULRQVLJQRUHUWRXVOHVDXWUHVFULWqUHVFHTXLQHQRXV
VHPEOHSDVFRKpUHQWDYHFODIOH[LELOLWpUHFRQQXHDX[JURXSHVVSpFLDX[
SDUO
2UJDQHG
DSSHOGDQVOHXUH[DPHQGXSULQFLSHGHVLPLODULWp »
22. Pour parodier ce dernier passage du Groupe spécial, les CE soutiennent qu’en
reconnaissant le critère des utilisations finales comme déterminant, le Groupe spécial
a, en fait, ignoré les autres critères, ce qui ne semble pas cohérent avec la flexibilité
reconnue aux groupes spéciaux par l’Organe d’appel dans l’examen de la question de
similarité.
23. En effet, on se demande même pourquoi le Groupe spécial perdu son temps à
examiner ces critères, puisqu’il a en définitive fondé sa constatation de similarité sur
le seul fait que les fibres de substitution et les fibres d’amiante avaient seulement
certains usages communs, constatation relevant d’une lapalissade s’agissant de
produits dits « de substitution ». Si on pousse le raisonnement du Groupe spécial
jusqu’à l’extrême, il suffirait que deux produits aient une certaine utilisation finale
commune pour qu’ils soient similaires. On pourrait ainsi aboutir à la conclusion
paradoxale selon laquelle la catégorie des produits directement concurrents ou
directement substituables est plus étroite que la catégorie des produits similaires106.
106
Or, le Groupe spécial -DSRQ ± ERLVVRQ DOFRROLTXHV est arrivé à la conclusion inverse
(WT/DS8/10/11/R, adopté le 11-07-1996, para. 6.21.
51
Au mieux, le Groupe spécial assimile ces deux catégories, ce qui est nous semble être
contraire à la jurisprudence abondamment citée par les CE dans ses soumissions,107
et à laquelle, nous l’avons vu, le Groupe spécial n’a pas répondu précisément et que
les CE resoumettent donc à l’examen de l’Organe d’appel.
24. On remarquera qu’accepter la primauté du critère des utilisations finales aurait par
exemple abouti, dans le cadre du contentieux ,QGRQpVLH ± DXWRPRELOHV, à accepter
l’argument des Communautés européennes selon lequel toutes les voitures de
tourisme devraient être considérées comme des "produits similaires". Or, dans le cas
,QGRQpVLH±DXWRPRELOHV, le Groupe spécial a estimé que, s’il est vrai que toutes les
voitures de tourisme "ont les mêmes caractéristiques physiques essentielles et sont
destinées à une utilisation finale identique", ces voitures sont des produits fortement
différenciés108. De même, le rapport du Groupe spécial -DSRQ±ERLVVRQVDOFRROLTXHV
a jugé que le libellé de l'expression "SURGXLWVVLPLODLUHV" suggère que des utilisations
finales communes constituent un critère nécessaire, mais pas suffisant, pour définir la
similarité.109
25. Certes, cette dernière constatation a été faite dans le cadre de l’article III:2 du GATT 94,
pour lequel l’Organe d’appel a jugé que l’accordéon de la similarité avait un étirement
particulièrement étroit. Cependant, aussi largement étendu que puisse être l’accordéon
de la similarité au titre de l’article III:4, sa portée ne saurait aller jusqu’à imiter le son
des produits substituables.
26. Non seulement, nous semble-t-il, le Groupe spécial a commis une erreur en
appliquant le seul critère des utilisations finales, mais il a, en outre, mal appliqué ce
critère. En effet, après avoir constaté que « les utilisations finales des fibres de
chrysotile, d'une part, et les fibres d'APV, de cellulose et de verre, d'autre part, ne sont
les mêmes que dans une faible partie de leurs applications respectives », le Groupe
spécial, selon son propre aveu, ne s’est intéressé qu’au moment où ces fibres sont
utilisées à la même fin. Il a ainsi implicitement rejeté comme inopérant l’argument
des CE tiré de ce que les fibres d’amiante et les fibres de substitution avaient des
utilisations finales globalement très différentes. Or, la constatation du Groupe spécial
contredit la remarque de l’Organe d’appel, dans le rapport &DQDGD ± SpULRGLTXHV,
selon laquelle l’argument tiré de l’« imparfaite substituabilité » est inopérant dans le
cadre de l’examen de la deuxième phrase de l’article III:2 (produits directement
concurrents ou directement substituables), et qu’ « un cas de substituabilité parfaite
relèverait des dispositions de la première phrase de l’article III:2. » (produits
similaires).110
107
Cf. para. 3.442 à 3.453 du présent rapport.
108
WT/DS54/55/59/64/R, adopté le 23-07-1998, para. 14.175.
109
Cf. WT/DS8/10/11/R, adopté le 11-07-1996, para. 6.22.
110
WT/DS31/AB/R, adopté le 30-07-1997, p.31.
52
&
&RQFOXVLRQ
27. Les CE estiment que l'analyse du Groupe spécial est erronée parce qu'elle n'est en
conformité ni avec les termes de l'article III:4 du GATT 1994, ni avec la
jurisprudence dégagée jusqu'à maintenant par les groupes spéciaux et l'Organe
d'appel.
*****************
53

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