INTRODUCTION

On 4 June 1998, the European Communities requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter the “DSU”), Article XXIII of the General Agreement on Tariffs and Trade 1994 (hereinafter the “GATT 1994”) and Article 17.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereinafter the “Anti-Dumping Agreement”) regarding failure on the part of the United States to repeal Title VIII of the US Revenue Act of 1916, also known as the US Antidumping Act of 1916 (hereinafter the “1916 Act”).

Consultations were held in Geneva on 29 July 1998, but did not lead to a mutually satisfactory resolution of the matter.

On 11 November 1998, the European Communities requested the Dispute Settlement Body (hereinafter the “DSB”) to establish a panel pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU and Article 17 of the Anti- Dumping Agreement. The European Communities claimed that the 1916 Act was inconsistent with Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter the “Agreement Establishing the WTO” - the Marrakesh Agreement Establishing the World Trade Organization including its annexes being referred to as the “WTO Agreement”); Articles VI:1 and VI:2 of the GATT 1994; and Articles 1, 2.1, 2.2, 3, 4 and 5 of the Anti-Dumping Agreement. In the alternative, the European Communities claimed that the 1916 Act was in breach of Article III:4 of the GATT 1994.

On 1 February 1999, the DSB established a panel pursuant to the request made by the European Communities, in accordance with Article 6 of the DSU. In document WT/DS136/3, the Secretariat reported that the parties had agreed that the panel would have the standard terms of reference. The terms of reference are the following: