* This document was reproduced and reformatted from the text appearing at the WTO website (visited March 24, 2003)〜http://www.wto.org〞.Due to the substantial length of the original document and ILM space limitations, the ILM Office has decided not to reproduce Chapters III-V of the judgment. Please note that the included table of contents covers all of the chapters including those not reproduced in this issue.

1 WT/DS217/R, WT/DS234/R, 16 September 2002.

2 WT/DS217/5. Referred to in the Panel Report also as the “Byrd Amendment” and the “Offset Act”.

3 WT/DS234/12andWT/DS234/13.

4 WT/DS234/14.

5 Panel Report, para. 8.1.

6 Ibid., para. 8.4.

7 Ibid., para. 8.5.

8 WT/DS217/8, WT/DS234/16, 22 October 2002.

9 Pursuant to Rule 21(1) of the Working Procedures.

10 Pursuant to Rule 22(1) of the Working Procedures.

11 Pursuant to Rule 24( 1) of the Working Procedures.

12 Pursuant to Rule 24(2) of the Working Procedures.

13 Pursuant to Rule 27 of the Working Procedures.

14 Public Law 106-387, 114 Stat. 1549.

15 Section 754 of the Tariff Act corresponds to Section 1675c of Title 19 of the United States Code.

16 The CDSOA provides that: “[d]uties assessed pursuant to a countervailing duty order, an antidumping duty order, or a finding under the Antidumping Act of 1921 shall be distributed on an annual basis under this section to the affected domestic producers for qualifying expenditures. Such distribution shall be known as ‘the continued dumping and subsidy offset'.” (Section 754(a) of the Tariff Act)

17 Section 754(b)(l) of the Tariff Act defines “affected domestic producer” as: any manufacturer, producer, farmer, rancher, or worker representative (including associations of such persons) that — (A)was a petitioner or interested party in support of the petition with respect to which an anti¬ dumping duty order, a finding under the Antidumping Act of 1921, or a countervailing duty order has been entered, and (B)remains in operation. Companies, businesses, or persons that have ceased the production of the product covered by the order or finding or who have been acquired by a company or business that is related to a company that opposed the investigation shall not be an affected domestic producer.

18 Section 754(b)(4) of the Tariff Act defines the term “qualifying expenditure” as “an expenditure incurred after the issuance of the antidumping duty finding or order or countervailing duty order in any of the following categories: (A)Manufacturing facilities. (B)Equipment. (C)Research and development. (D)Personnel training. (E)Acquisition of technology. (F)Health care benefits to employees paid for by the employer. (G)Pension benefits to employees paid for by the employer. (H)Environmental equipment, training, or technology. (I)Acquisition of raw materials and other inputs. (J)Working capital or other funds needed to maintain production.“

19 Section 159.61(c) of Title 19, Code of Federal Regulations (“C.F.R.“).

20 Section 754(e)(l) of the Tariff Act, 19 C.F.R. § 159.64(a)(l)(i).

21 19 C.F.R. § 159.64(a)(2).

22 C.F.R. § 159.64(b)(l)(ii).

23 Customs defines “entry” as the process of presenting documentation for clearing goods through customs following the arrival of the goods at a port. (See United States Import Requirements at <www.customs.gov/impoexpo/import>).

24 19 C.F.R. § 159.64(b)(l)(ii). The United States explained in its first written submission to the Panel that “[u]nder United States’ law, liquidation is defined as the ‘final computation or ascertainment of duties’ it is Customs’ determination of the grand total to be paid by the importer.” (United States’ first written submission to the Panel, footnote 12.) Generally speaking, it may be said therefore that the United States uses a “retrospective” assessment system under which final liability for antidumping and countervailing duties is determined only after the goods have been imported. ﹛See “ Antidumping Duties; Countervailing Duties”, United States Federal Register, 19 May 1997 (Volume 62, Number 96), p. 27392)

25 19C.F.R. § 159.64(b)(l)(i).

26 United States’ first written submission to the Panel, para. 13.

27 Sections 754(d)(2) and (3) of the Tariff Act.

28 Section 754(c) of the Tariff Act.

29 “Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers”, United States Federal Register, 21 September 2001 (Volume 66, Number 184), p. 48549. See also Panel Report, para. 7.37.

30 Panel Report, para. 7.44.

151 Panel Report, para. 7.51.

152 Appellate Body Report, US —1916 Act para. 122.

153 Panel Report, para. 7.15.

154 Ibid., para. 7.16.

155 Ibid., para. 7.17.

156 Ibid., para. 7.18. In paragraph 7.18, the Panel refers only to dumping. We understand, however, that, in the light of the conclusion the Panel reached in paragraph 7.51, the two conditions set out in paragraph 7.18 extend mutatis mutandis to Article 32.1 of the SCM Agreement which deals with subsidies.

157 Panel Report, para. 7.23.

158 Panel Report, para. 7.21.

159 Ibid., para. 7.33.

160 Ibid.

161 Ibid., para. 7.7.

162 Ibid.

163 Ibid.

164 Appellate Body Report, US —1916 Act para. 122.

165 Appellate Body Report, US —1916 Act para. 130.

166 Ibid (original emphasis)

167 Appellate Body Report, US -1916 Act paras. 105-106 and 130.

168 In response to questioning at the oral hearing, the participants did not dispute that the constituent elements of dumping refer to the definition of dumping in Article VI: 1 of the GATT 1994, as elaborated in Article 2 of the Anti-Dumping Agreement and that the constituent elements of a subsidy refer to the definition of a subsidy found in Article 1 of the SCM Agreement.

169 Panel Report, para. 7.23.

170 Section 754(a) of the Tariff Act provides: Duties assessed pursuant to a countervailing duty order, an anti-dumping duty order, or a finding under the Antidumping Act of 1921 shall be distributed on an annual basis under this section to the affected domestic producers for qualifying expenditures. Such distribution shall be known as the “continued dumping and subsidy

171 offsetPanel Report, para. 7.21.

172 United States’ appellant's submission, para. 18.

173 Ibid., para. 20.

174 Appellate Body Report, US -1916 Act para. 130. (original emphasis)

175 Ibid., para. 122.

176 European Communities', India's, Indonesia's and Thailand's appellees’ submission, para. 14.

177 European Communities', India's, Indonesia's and Thailand's appellees’ submission, para. 14.

178 Section 754(a) of the Tariff Act.

179 Panel Report, para. 7.16.

180 Appellate Body Report, US —1916 Act para. 122.

181 Panel Report, para. 7.18 and footnote 271 thereto.

182 United States’ appellant's submission, para. 31.

183 Ibid., para. 32.

184 Ibid., para. 33.

185 Ibid.

186 Panel Report, para. 7.33.

187 United States’ appellant's submission, para. 31.

188 Ibid.

189 Further support for our view is found in the examples given by the New Shorter Oxford English Dictionary in relation to this definition: 17W. OWEN Under his helmet, up against his pack,.. Sleep took him by the brow and laid him back. R. CHANDLER There was a bar against the right hand wall.

190 See supra para. 231.

191 Panel Report, para. 7.33.

192 19 C.F.R. § 159.61(c).

193 “Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers,” United States Federal Register, 21 September 2001 (Volume 66, Number 184), p. 48549.

194 United States’ appellant's submission, para. 41. The Panel found that the CDSOA is a measure against dumping or a subsidy because it “has a specific adverse impact on the competitive relationship between domestic products and dumped [or subsidized] imports.“ (Panel Report, para. 7.39) According to the Panel, the CDSOA is against dumping or a subsidy because it affects competition between, on the one hand, dumped or subsidized products, and, on the other hand, domestic products, to the detriment of the imported products.

195 See supra para. 230.

196 Panel Report, para. 7.42.

197 United States’ appellant's submission, paras. 80-83. The United States, viewing the statutory provision entitled “Findings of Congress” as legislative history, stated at the oral hearing that a United States’ court will not look to the legislative history of a statute unless that statute is ambiguous.

198 Panel Report, para. 7.41.

199 We discussed the role of the legislative or regulatory intent in Japan —Alcoholic Beverages II where we examined whether a measure is consistent with Article 111:2 of the GATT 1994. We said: This third inquiry under Article 111:2, second sentence, must determine whether “directly competitive or substitutable products” are “not similarly taxed” in a way that affords protection. This is not an issue of intent. It is not necessary for a panel to sort through the many reasons legislators and regulators often have for what thev do and weigh the relative significance of those reasons to establish legislative or regulatory intent. If the measure is applied to imported or domestic products so as to afford protection to domestic production, then it does not matter that there may not have been any desire to engage in protectionism in the minds of the legislators or the regulators who imposed the measure. It is irrelevant that protectionism was not an intended objective if the particular tax measure in question is nevertheless, to echo Article 111:1, “applied to imported or domestic products so as to afford protection to domestic production.” This is an issue of how the measure in question is applied (original emphasis; underlining added) (Appellate Body Report, Japan —Alcoholic Beverages II at 119)

200 United States’ appellant's submission, paras. 25-29.

201 Appellate Body Report, US —1916 Act para. 123.

202 Appellate Body Report, US —1916 Act para. 125.

203 Ibid., para. 137.

204 United States’ appellant's submission, paras. 84-92.

205 The United States contrasts the terms “may levy … an anti-dumping duty” in Article VI:2 with “[n]o countervailing duty shall be levied” in Article VI:3; the United States also contrasts the reference to an “antidumping measure” and to “action … taken under anti-dumping legislation or regulations” in Article 1 of the Anti-Dumping Agreement with the use of the expression “countervailing duty” and “countervailing duties” in Article 10 of the SCM Agreement. (United States’ appellant's submission, para. 87)

206 Panel Report, para. 7.7.

207 Ibid.

208 Canada's appellee's submission, para. 78.

209 See Appellate Body Report, US — Gasoline at 21; Appellate Body Report, Japan —Alcoholic Beverages II at 106; Appellate Body Report, US — Underwear at 24; Appellate Body Report, US —Shrimp para. 131 (referencing various authors); Appellate Body Report, Korea —Dairy para. 81; Appellate Body Report, Canada —Dairy para. 133; and Appellate Body Report, Argentina — Footwear (EC), para. 88.

210 See Appellate Body Report, US —Gasoline at 21; Appellate Body Reportjapan —Alcoholic Beverages II at 106; Appellate Body Report, Korea — Dairy para. 80; Appellate Body Report, Canada — Dairy para. 133; Appellate Body Report, Argentina — Footwear (EC), para. 88; and Appellate Body Report, US —Section 211 Appropriations Act paras. 161 and 338.

211 Panel Report, para. 7.62.

212 Ibid., para. 7.45 and footnote 304 thereto.

213 Panel Report, para. 7.62.

214 Panel Report, para. 7.62.

215 Ibid., para. 7.63.

216 Ibid.

217 Ibid.

218 Ibid.

219 Ibid.

220 Ibid., para. 7.64.

221 Ibid., paras. 7.64-7.65.

222 Ibid.,paia. 7.65.

223 Panel Report, para. 7.66.

224 Ibid.

225 Ibid.

226 Similarly, Article 17.6 (ii) of the Anti-Dumping Agreement provides that “the panel shall interpret the relevant provisions of the Agreement in accordance with the customary rules of interpretation of public international law.“

227 We note that the parties’ submissions do not suggest otherwise.

228 Panel Report, para. 7.63.

229 Panel Report, para. 7.63.

230 Ibid., para. 7.64.

231 Ibid.

232 Ibid para. 7.65.

233 The Panel notes in this respect the argument advanced by the European Communities, India, Indonesia and Thailand that Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement ” were introduced in response to the controversial practice of the United States authorities of presuming that an application was made by or on behalf of the domestic industry unless a major proportion of the domestic industry expressed active opposition to the petition.” (Panel Report, para. 7.61, referring to the European Communities', India's, Indonesia's and Thailand's first written submission to the Panel, footnote 49; underlining added). In our view, this is not, in itself, sufficient evidence of the “object and purpose” of Articles 5.4 and 11.4.

234 In this respect, we note that the United States does not contest that it continues to be bound by the obligation set out in Articles 5.4 and 11.4 to ensure that anti-dumping and countervailing duty cases are not initiated unless the levels of support set out in Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement are met. (See United States’ second written submission before the Panel, para. 81)

235 Panel Report, para. 7.63.

236 Ibid para. 7.66.

237 Ibid., para. 7.65. (emphasis added)

238 Panel Report, para. 7.62.

239 Ibid (emphasis added)

240 United States’ first written submission to the Panel, para. 125.

241 Exhibit US-6 before the Panel.

242 In paragraph 116 of its appellant's submission, the United States also relies on the argument that a domestic producer can qualify for receipt of possible offset payments by expressing support as late as “the final injury investigation questionnaire, which can be issued more than 200 days after a petition is filed.” Although we note that support, for purposes of qualifying for CDSOA distributions, need not necessarily be expressed prior to initiation of the investigation, the incentive to express support may well exist at the stage of the initiation of the investigation. This is because if an investigation is not initiated, for example, due to lack of support, that investigation cannot, by definition, lead to a finding of dumping or subsidization and later to CDSOA distributions. This, however, does not affect our conclusion that Articles 5.4 and 11.4 do not require investigating authorities to determine the motivations of producers that choose to support an anti-dumping or countervailing duty investigation (or indeed the motivations of producers that choose to oppose such investigations).

243 Panel Report, para. 7.66. (emphasis added)

244 We consider this to be a factual finding of the Panel.

245 United States’ appellant's submission, para. 105.

246 Canada's appellee's submission, para. 101; the European Communities', India's, Indonesia's and Thailand's appellees’ submission, para. 146; Japan's and Chile's appellee's submission, para. 96.

247 The United States said, in response to questioning at the oral hearing, that it has no difficulty with the notion that Article 26 of the Vienna Convention expresses a customary international law principle.

248 United States’ second written submission before the Panel, para. 81. The United States reiterated this point in response to questioning at the oral hearing. See also, Appellate Body Report, EC —Sardines para. 278.

249 Appellate Body Report, US —Shrimp para. 158. See also, Appellate Body Report, US —FSC para. 166.

250 Appellate Body Report, US —Hot-RolledSteel para. 101.

251 United States’ appellant's submission, para. 133.

252 Panel Report, para. 7.4.

253 Ibid.

254 Ibid.

255 Ibid.

256 Ibid., para. 7.5.

257 Ibid., para. 7.6. In paragraphs 6.3-6.5 of its Report, the Panel provides further argumentation for why it rejected the United States' request.

258 United States’ appellant's submission, para. 140.

259 Panel Report, para. 6.3.

260 United States appellant's submission, para. 138, referring to the Panel Report in EC —Bananas III (US), para. 7.55.

261 Appellate Body Report, US —FSC para. 166.

262 Appellate Body Report, Mexico — Corn Syrup (Article 21.5 — US), para. 50. The Appellate Body also emphasized the need for procedural objections to be made in a timely manner in US —1916 Act para. 54.

263 Panel Report, para. 7.4.

264 The Panel was composed on 25 October 2001. See Panel Report, para. 1.7.

265 Appellate Body Report, EC —Hormones footnote 138 to para. 152.

266 The United States submits that a showing of prejudice is not required by the text of Article 9.2. In response to questioning at the oral hearing, the United States added that, although it was not aware of any prejudice that it would have suffered in this case, prejudice could have resulted if, for example, Mexico had chosen to cross-appeal the claim related to Article 5 of the SCM Agreement which only Mexico raised before the Panel.

267 We express no view on the question whether the Panel was correct in concluding, in paragraph 7.5 of the Panel Report, that it was “not entitled to issue a final report on the dispute brought by Mexico without first having issued an interim report on that dispute.“ In this respect, we note moreover that the United States has not requested a finding with respect to whether the Panel erred in its interpretation of Article 15.2 of the DSU