Short title | Full case title and citation |
Australia – Automotive Leather II | Panel Report, Australia – Subsidies Provided to Producers and Exporters of Automotive Leather, WT/DS126/R, adopted 16 June 1999, DSR 1999:III, p. 951 |
Brazil – Aircraft | Appellate Body Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, p. 1161 |
Brazil – Aircraft | Panel Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/R, adopted 20 August 1999, as modified by Appellate Body Report WT/DS46/AB/R, DSR 1999:III, p. 1221 |
Canada – Aircraft | Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, p. 1377 |
Canada – Aircraft | Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report WT/DS70/AB/R, DSR 1999:IV, p. 1443 |
Canada – Aircraft (Article 21.5 – Brazil) | Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft – Recourse by Brazil to Article 21.5 of the DSU, WT/DS70/AB/RW, adopted 4 August 2000, DSR 2000:IX, p. 4299 |
Canada – Aircraft Credits and Guarantees | Panel Report, Canada – Export Credits and Loan Guarantees for Regional Aircraft, WT/DS222/R and Corr.1, adopted 19 February 2002, DSR 2002:III, p. 849 |
Canada – Autos | Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, p. 2985 |
Canada – Periodicals | Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449 |
Canada – Renewable Energy / Canada – Feed-in Tariff Program | Appellate Body Reports, Canada – Certain Measures Affecting the Renewable Energy Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program, WT/DS412/AB/R / WT/DS426/AB/R, adopted 24 May 2013, DSR 2013:I, p. 7 |
China – Auto Parts | Appellate Body Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted 12 January 2009, DSR 2009:I, p. 3 |
Colombia – Ports of Entry | Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, WT/DS366/R and Corr.1, adopted 20 May 2009, DSR 2009:VI, p. 2535 |
EC – Hormones | Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, p. 135 |
EC and certain member States – Large Civil Aircraft | Appellate Body Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1 June 2011, DSR 2011:I, p. 7 |
EC and certain member States – Large Civil Aircraft | Panel Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/R, adopted 1 June 2011, as modified by Appellate Body Report, WT/DS316/AB/R, DSR 2011:II, p. 685 |
India – Patents (US) | Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, p. 9 |
Indonesia – Autos | Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R, Corr.1 and Corr.2, adopted 23 July 1998, and Corr.3 and Corr.4, DSR 1998:VI, p. 2201 |
Japan – Alcoholic Beverages II | Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97 |
Japan – DRAMs (Korea) | Panel Report, Japan – Countervailing Duties on Dynamic Random Access Memories from Korea, WT/DS336/R, adopted 17 December 2007, as modified by Appellate Body Report WT/DS336/AB/R, DSR 2007:VII, p. 2805 |
Korea – Alcoholic Beverages | Appellate Body Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, p. 3 |
Korea – Alcoholic Beverages | Panel Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/R, WT/DS84/R, adopted 17 February 1999, as modified by Appellate Body Report WT/DS75/AB/R, WT/DS84/AB/R, DSR 1999:I, p. 44 |
US – Anti-Dumping Measures on Oil Country Tubular Goods | Appellate Body Report, United States – Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico, WT/DS282/AB/R, adopted 28 November 2005, DSR 2005:XX, p. 10127 |
US – Carbon Steel | Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779 |
US – Carbon Steel (India) | Appellate Body Report, United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India, WT/DS436/AB/R, adopted 19 December 2014, DSR 2014:V, p. 1727 |
US – Corrosion-Resistant Steel Sunset Review | Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, p. 3 |
US – Countervailing and Anti-Dumping Measures (China) | Appellate Body Report, United States – Countervailing and Anti-Dumping Measures on Certain Products from China, WT/DS449/AB/R and Corr.1, adopted 22 July 2014, DSR 2014:VIII, p. 3027 |
US – FSC | Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, p. 1619 |
US – FSC | Panel Report, United States – Tax Treatment for "Foreign Sales Corporations", WT/DS108/R, adopted 20 March 2000, as modified by Appellate Body Report WT/DS108/AB/R, DSR 2000:IV, p. 1675 |
US – FSC (Article 21.5 – EC) | Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, p. 55 |
US – FSC (Article 21.5 – EC) | Panel Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/RW, adopted 29 January 2002, as modified by Appellate Body Report WT/DS108/AB/RW, DSR 2002:I, p. 119 |
US – Gambling | Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475) |
US – Hot-Rolled Steel | Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, p. 4697 |
US – Hot-Rolled Steel | Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/R, adopted 23 August 2001 modified by Appellate Body Report WT/DS184/AB/R, DSR 2001:X, p. 4769 |
US – Large Civil Aircraft (2nd complaint) | Appellate Body Report, United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint), WT/DS353/AB/R, adopted 23 March 2012, DSR 2012:I, p. 7 |
US – Large Civil Aircraft (2nd complaint) | Panel Report, United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint), WT/DS353/R, adopted 23 March 2012, as modified by Appellate Body Report WT/DS353/AB/R, DSR 2012:II, p. 649 |
US – Offset Act (Byrd Amendment) | Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003, DSR 2003:I, p. 375 |
US – Poultry (China) | Panel Report, United States – Certain Measures Affecting Imports of Poultry from China, WT/DS392/R, adopted 25 October 2010, DSR 2010:V, p. 1909 |
US – Shrimp | Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, p. 2755 |
US – Softwood Lumber IV | Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R, adopted 17 February 2004, DSR 2004:II, p. 571 |
US – Upland Cotton | Panel Report, United States – Subsidies on Upland Cotton, WT/DS267/R, Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II, p. 299 |
US – Wool Shirts and Blouses | Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, p. 323 |
Short Title | Full Case Title and Citation |
Japan – Alcoholic Beverages I | GATT Panel Report, Japan – Customs Duties, Taxes and Labelling Practices on Imported Wines and Alcoholic Beverages, L/6216, adopted 10 November 1987, BISD 34S/83 |
US – Section 337 Tariff Act | GATT Panel Report, United States Section 337 of the Tariff Act of 1930, L/6439, adopted 7 November 1989, BISD 36S/345 |
US – Superfund | GATT Panel Report, United States – Taxes on Petroleum and Certain Imported Substances, L/6175, adopted 17 June 1987, BISD 34S/136 |
Abbreviation | Description |
B&O tax | Business and occupation tax |
BCI | Business Confidential Information |
DSB | Dispute Settlement Body |
DSU | Understanding on Rules and Procedures Governing the Settlement of Disputes |
ESSB 5952 | Washington State Legislature Engrossed Substitute Senate Bill 5952 |
GATT 1994 | General Agreement on Tariffs and Trade 1994 |
HB 2294 | Washington State Legislature House Bill 2294 |
HB 2466 | Washington State Legislature House Bill 2466 |
HSBI | Highly Sensitive Business Information |
RCW | Revised Code of Washington (Washington State) |
SCM Agreement | Agreement on Subsidies and Countervailing Measures |
SSB 6828 | Washington State Substitute Senate Bill 6828 |
Vienna Convention | Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679 |
WAC | Washington Administrative Code (Washington State) |
WTO | World Trade Organization |
To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the matter referred to the DSB by the European Union in document WT/DS487/2 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.5
Chairperson: Mr Daniel Moulis
Members: Mr Terry Collins-Williams
Mr Wilhelm Meier
a. a 0.2904% business and occupation tax rate with respect to the manufacture or sale of commercial airplanes, contained in RCW Section 82.04.260(11);
b. tax credits for property taxes and leasehold excise taxes on commercial airplane manufacturing facilities, contained in RCW Section 82.04.4463;
c. tax credits for aerospace product development, contained in RCW Section 82.04.4461;
d. sales tax exemption for computer hardware, software, and peripherals, contained in RCW Section 82.08.975;
e. sales tax exemption for construction services and materials, contained in RCW Section 82.08.980;
f. use tax exemption for computer hardware, software, and peripherals, contained in RCW Section 82.12.975;
g. use tax exemption for construction services and materials, contained in RCW Section 82.12.980;
h. leasehold excise tax exemption, contained in RCW Section 82.29A.137; and
i. leaseholder property tax exemption, contained in RCW Section 84.36.655.
The function of panels is to assist the DSB in discharging its responsibilities under this Understanding and the covered agreements. Accordingly, a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements.
As part of their duties under Article 11 of the DSU, panels have the obligation to examine the meaning and content of the municipal law at issue in order to make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability and conformity with the covered agreements. This obligation under Article 11 means that panels must conduct their own objective and independent assessment of the meaning of municipal law, instead of deferring to a party's characterization of such law.56
[P]recisely how much and precisely what kind of evidence will be required to establish such … [presumptions] will necessarily vary from measure to measure, provision to provision, and case to case.66
ARTICLE 31 General rule of interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
ARTICLE 32 Supplementary means of interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.
(a) reduced business and occupation (B&O) tax rate for the manufacture and sale of commercial airplanes (B&O aerospace tax rate)74;
(b) B&O tax credit for pre-production development for commercial airplanes and components (B&O tax credit for aerospace product development)75;
(c) B&O tax credit for property taxes on commercial airplane manufacturing facilities (B&O tax credit for property and leasehold excise taxes)76;
(d) exemption from sales and use taxes for certain computer hardware, software, and peripherals (computer sales and use tax exemptions)77;
(e) exemption from sales and use taxes for certain construction services and materials (construction sales and use tax exemptions)78;
(f) exemption from leasehold excise taxes on port district facilities used to manufacture superefficient airplanes (leasehold excise tax exemption)79; and
(g) exemption from property taxes for the personal property of port district lessees used to manufacture superefficient airplanes (leaseholder property tax exemption)80.
[A]n airplane program in which the following products, including final assembly, will commence manufacture at a new or existing location within Washington state on or after the effective date of this section:
(i) The new model, or any version or variant of an existing model, of a commercial airplane; and
(ii) Fuselages and wings of a new model, or any version or variant of an existing model, of a commercial airplane.110
With respect to the manufacturing of commercial airplanes or making sales, at retail or wholesale, of commercial airplanes, this subsection (11) [i.e. the B&O aerospace tax rate] does not apply on and after July 1st of the year in which the department [i.e. the Department of Revenue] makes a determination that any final assembly or wing assembly of any version or variant of a commercial airplane that is the basis of a siting of a significant commercial airplane manufacturing program in the state under section 2 of this act [i.e. the First Siting Provision] has been sited outside the state of Washington. This subsection (11)(e)(ii) [i.e. the Second Siting Provision] only applies to the manufacturing or sale of commercial airplanes that are the basis of a siting of a significant commercial airplane manufacturing program in the state under section 2 of this act.
1.1 For the purpose of this Agreement, a subsidy shall be deemed to exist if:
(a)(1) there is a financial contribution by a government …, i.e. where:
(ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits); (footnote omitted)
In our view, the "foregoing" of revenue "otherwise due" implies that less revenue has been raised by the government than would have been raised in a different situation, or, that is, "otherwise". Moreover, the word "foregone" suggests that the government has given up an entitlement to raise revenue that it could "otherwise" have raised. This cannot, however, be an entitlement in the abstract, because governments, in theory, could tax all revenues. There must, therefore, be some defined, normative benchmark against which a comparison can be made between the revenue actually raised and the revenue that would have been raised "otherwise".153 (emphasis original)
(11)(a) Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing commercial airplanes, or components of such airplanes, or making sales, at retail or wholesale, of commercial airplanes or components of such airplanes, manufactured by the seller, as to such persons the amount of tax with respect to such business is, in the case of manufacturers, equal to the value of the product manufactured and the gross proceeds of sales of the product manufactured, or in the case of processors for hire, equal to the gross income of the business, multiplied by the rate of:
(i) 0.4235 percent from October 1, 2005, through June 30, 2007; and
(ii) 0.2904 percent beginning July 1, 2007.
(b) Beginning July 1, 2008, upon every person who is not eligible to report under the provisions of (a) of this subsection (11) and is engaging within this state in the business of manufacturing tooling specifically designed for use in manufacturing commercial airplanes or components of such airplanes, or making sales, at retail or wholesale, of such tooling manufactured by the seller, as to such persons the amount of tax with respect to such business is, in the case of manufacturers, equal to the value of the product manufactured and the gross proceeds of sales of the product manufactured, or in the case of processors for hire, be equal to the gross income of the business, multiplied by the rate of 0.2904 percent.173
The legislature finds that the people of Washington have benefited enormously from the presence of the aerospace industry in Washington state. The legislature further finds that the industry continues to provide good wages and benefits for the thousands of engineers, mechanics, and support staff working directly in the industry throughout the state. The legislature further finds that suppliers and vendors that support the aerospace industry in turn provide a range of well-paying jobs. In 2003, and again in 2006, and 2007, the legislature determined it was in the public interest to encourage the continued presence of the aerospace industry through the provision of tax incentives. To this end, and in recognition of the continuing extreme importance of the aerospace industry in Washington, it is the legislature's intent to reaffirm and build upon prior aerospace tax incentive legislation in a fiscally prudent manner.
…
It is the legislature's specific public policy objective to maintain and grow Washington's aerospace industry workforce. To help achieve this public policy objective, it is the legislature's intent to conditionally extend aerospace industry tax preferences until July 1, 2040, in recognition of intent by the state's aerospace industry sector to maintain and grow its workforce within the state.182
Manufacturing: Upon every person engaging within this state in business as a manufacturer, except persons taxable as manufacturers under other provisions of this chapter; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, manufactured, multiplied by the rate of 0,484 percent.191 (emphasis added)
Wholesale: Upon every person engaging within this state in the business of making sales at wholesale, except persons taxable as wholesalers under other provisions of this chapter; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of such business multiplied by the rate of 0,484 percent.192 (emphasis added)
Retail: Upon every person engaging within this state in the business of making sales at retail, except persons taxable as retailers under other provisions of this chapter, as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of 0,471 percent.193 (emphasis added)
[G]oods and services are taxed multiple times as they move through the production chain, with a successively greater effective tax rate for each business in the chain. As a result, industries with multiple steps, such as the aerospace industry, have higher effective tax rates. In part to address this "pyramiding", Washington has introduced a number of industry-specific B&O tax rates.199
(1)(a)(i) In computing the tax imposed under this chapter [the B&O tax], a credit is allowed for each person for qualified aerospace product development. For a person who is a manufacturer or processor for hire of commercial airplanes or components of such airplanes, credit may be earned for expenditures occurring after December 1, 2003. For all other persons, credit may be earned only for expenditures occurring after June 30, 2008.
…
(2) The credit is equal to the amount of qualified aerospace product development expenditures of a person, multiplied by the rate of 1.5 percent.
…
(5) The definitions in this subsection apply throughout this section.
…
(b) "Aerospace product development" means research, design, and engineering activities performed in relation to the development of an aerospace product or of a product line, model, or model derivative of an aerospace product, including prototype development, testing, and certification. …
(c) "Qualified aerospace product development" means aerospace product development performed within this state.
(d) "Qualified aerospace product development expenditures" means operating expenses, including wages, compensation of a proprietor or a partner in a partnership as determined by the department, benefits, supplies, and computer expenses, directly incurred in qualified aerospace product development by a person claiming the credit provided in this section. …211
(1) In computing the tax imposed under this chapter [the B&O tax], a credit is allowed for property taxes and leasehold excise taxes paid during the calendar year.
(2) The credit is equal to:
(a)(i)(A) Property taxes paid on buildings, and land upon which the buildings are located, constructed after December 1, 2003, and used exclusively in manufacturing commercial airplanes or components of such airplanes; and
(B) Leasehold excise taxes paid with respect to buildings constructed after January 1, 2006, the land upon which the buildings are located, or both, if the buildings are used exclusively in manufacturing commercial airplanes or components of such airplanes; and
(C) Property taxes or leasehold excise taxes paid on, or with respect to, buildings constructed after June 30, 2008, the land upon which the buildings are located, or both, and used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services … ; or
(ii) Property taxes attributable to an increase in assessed value due to the renovation or expansion, after: (A) December 1, 2003, of a building used exclusively in manufacturing commercial airplanes or components of such airplanes; and (B) June 30, 2008, of buildings used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services, …229
(1) The tax levied by RCW 82.08.020 [the sales tax] does not apply to sales of computer hardware, computer peripherals, or software … used primarily in the development, design, and engineering of aerospace products or in providing aerospace services, or to sales of or charges made for labor and services rendered in respect to installing the computer hardware, computer peripherals, or software.247
(1) The provisions of this chapter [the use tax] do not apply in respect to the use of computer hardware, computer peripherals … used primarily in the development, design, and engineering of aerospace products or in providing aerospace services, or to the use of labor and services rendered in respect to installing the computer hardware, computer peripherals, or software.248
(1) The tax levied by RCW 82.08.020 does not apply to:
(a) Charges, for labor and services rendered in respect to the constructing of new buildings, made to (i) a manufacturer engaged in the manufacturing of commercial airplanes or the fuselages or wings of commercial airplanes or (ii) a port district, political subdivision, or municipal corporation, to be leased to a manufacturer engaged in the manufacturing of commercial airplanes or the fuselages or wings of commercial airplanes;
(b) Sales of tangible personal property that will be incorporated as an ingredient or component of such buildings during the course of the constructing; or
(c) Charges made for labor and services rendered in respect to installing, during the course of constructing such buildings, building fixtures …277
(1) The provisions of this chapter do not apply with respect to the use of:
(a) Tangible personal property that will be incorporated as an ingredient or component in constructing new buildings for (i) a manufacturer engaged in the manufacturing of commercial airplanes or the fuselages or wings of commercial airplanes or (ii) a port district, political subdivision, or municipal corporation, to be leased to a manufacturer engaged in the manufacturing of commercial airplanes or the fuselages or wings of commercial airplanes; or
(b) Labor and services rendered in respect to installing, during the course of constructing such buildings, building fixtures …278
(1) All leasehold interests in port district facilities exempt from tax under [the construction sales and use tax exemptions] and used by a manufacturer engaged in the manufacturing of superefficient airplanes … are exempt from tax under this chapter. A person claiming the credit under [the B&O tax credit for property and leasehold excise taxes] is not eligible for the exemption under this section.284
(1) Effective January 1, 2005, all buildings, machinery, equipment, and other personal property of a lessee of a port district eligible under [the construction sales and use tax exemptions], used exclusively in manufacturing superefficient airplanes, are exempt from property taxation. A person taking the credit under [the B&O tax credit for property and leasehold excise taxes] is not eligible for the exemption under this section. …302
The [First] Siting Provision and the [Second] Siting Provision in ESSB 5952 make no mention of goods. They make no mention of the use of goods. They make no mention of the domestic nature of goods. They make no mention of imported goods. They contain no text that requires the use of domestic over imported goods, nor even encourages it. They therefore do not result in any discrimination against imported goods.357 (emphasis added)
Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited:
(a) subsidies contingent, in law or in fact4, whether solely or as one of several other conditions, upon export performance, including those illustrated in Annex I5;
(b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods. (footnotes original) 4 This standard is met when the facts demonstrate that the granting of a subsidy, without having been made legally contingent upon export performance, is in fact tied to actual or anticipated exportation or export earnings. The mere fact that a subsidy is granted to enterprises which export shall not for that reason alone be considered to be an export subsidy within the meaning of this provision.
5 Measures referred to in Annex I as not constituting export subsidies shall not be prohibited under this or any other provision of this Agreement.
Only those subsidies that are conditioned on export performance or on import substitution are prohibited per se under Article 3 of Part II of the SCM Agreement. In contrast, all other subsidies are allowed under the SCM Agreement, albeit a Member granting such subsidies should not cause, through the use of the subsidies, adverse effects within the meaning of Article 5 of Part III, in which case it must remove the adverse effects or must withdraw the subsidies themselves.414 (original italics)
The broad and fundamental purpose of Article III is to avoid protectionism in the application of internal tax and regulatory measures. More specifically, the purpose of Article III "is to ensure that internal measures 'not be applied to imported or domestic products so as to afford protection to domestic production'".418 Toward this end, Article III obliges Members of the WTO to provide equality of competitive conditions for imported products in relation to domestic products.419,420
The provisions of this Article [Article III of the GATT 1994] shall not prevent the payment of subsidies exclusively to domestic producers, including payments to domestic producers derived from the proceeds of internal taxes or charges applied consistently with the provisions of this Article and subsidies effected through governmental purchases of domestic products.
In our view, the key word in Article 3.1(a) is "contingent". As the Panel observed, the ordinary connotation of "contingent" is "conditional" or "dependent for its existence on something else". This common understanding of the word "contingent" is borne out by the text of Article 3.1(a), which makes an explicit link between "contingency" and "conditionality" in stating that export contingency can be the sole or "one of several other conditions".423 (emphasis original)
An inquiry into the meaning of the term "contingent…" in Article 3.1(a) must, therefore, begin with an examination of the ordinary meaning of the word "contingent". The ordinary meaning of "contingent" is "dependent for its existence on something else", "conditional; dependent on, upon".424
[W]e believe that the Panel erred in finding that Article 3.1(b) does not extend to subsidies contingent "in fact" upon the use of domestic over imported goods. We, therefore, reverse the Panel's broad conclusion that "Article 3.1(b) extends only to contingency in law."426
[T]he existence of that condition can be demonstrated on the basis of the very words of the relevant legislation, regulation or other legal instrument constituting the measure. The simplest, and hence, perhaps, the uncommon, case is one in which the condition … is set out expressly, in so many words, on the face of the law, regulation or other legal instrument. We believe, however, that a subsidy is also properly held to be de jure … contingent where the condition … is clearly, though implicitly, in the instrument comprising the measure. Thus, for a subsidy to be de jure … contingent, the underlying legal instrument does not always have to provide expressis verbis that the subsidy is available only upon fulfillment of the condition … Such conditionality can also be derived by necessary implication from the words actually used in the measure.429 (emphasis added)
Proving de facto … contingency is a much more difficult task. There is no single legal document which will demonstrate, on its face, that a subsidy is "contingent … in fact…". Instead, the existence of this relationship of contingency, between the subsidy and … performance, must be inferred from the total configuration of the facts constituting and surrounding the granting of the subsidy, none of which on its own is likely to be decisive in any given case.431 (emphasis original)
The existence of de facto export contingency, as set out above, "must be inferred from the total configuration of the facts constituting and surrounding the granting of the subsidy"433, which may include the following factors: (i) the design and structure of the measure granting the subsidy; (ii) the modalities of operation set out in such a measure; and (iii) the relevant factual circumstances surrounding the granting of the subsidy that provide the context for understanding the measure's design, structure, and modalities of operation.434 (emphasis original)
[T]he conditional relationship between the granting of the subsidy and export performance must be objectively observable on the basis of such evidence in order for the subsidy to be geared to induce the promotion of future export performance by the recipient. The standard for de facto … contingency is therefore not satisfied by the subjective motivation of the granting government … In this respect, we note that the Appellate Body and panels have, on several occasions, cautioned against undue reliance on the intent of a government behind a measure to determine the WTO‑consistency of that measure.435 The Appellate Body has found that "the intent, stated or otherwise, of the legislators is not conclusive" as to whether a measure is consistent with the covered agreement.436 In our view, the same understanding applies in the context of a determination on … contingency, where the requisite conditionality … must be established on the basis of objective evidence, rather than subjective intent. We note, however, that while the standard for de facto … contingency cannot be satisfied by the subjective motivation of the granting government, objectively reviewable expressions of a government's policy objectives for granting a subsidy may, however, constitute relevant evidence in an inquiry into whether a subsidy is geared to induce the promotion of future export performance by the recipient.437 (emphasis added)
[A] subsidy that is inconsistent with Article 3.1(b) requires the use of domestic goods "in preference to," i.e., instead of, imported goods. For this reason, Article 3.1(b) is often referred to as relating to "import substitution subsidies."440 It does not cover measures simply because they involve some sort of domestic activity, but rather it is focused specifically on subsidies that depend on the substitution of domestic over imported goods.441
NEW SECTION. Sec. 2. A new section is added to chapter 82.32 RCW to read as follows:
(1) Chapter..., Laws of 2013 3rd sp. sess. (this act) takes effect contingent upon the siting of a significant commercial airplane manufacturing program in the state of Washington. If a significant commercial airplane manufacturing program is not sited in the state of Washington by June 30, 2017, chapter..., Laws of 2013 3rd sp. sess. (this act) does not take effect.
(2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Commercial airplane" has the same meaning provided in RCW 82.32.550.
(b) "New model, or any version or variant of an existing model, of a commercial airplane" means a commercial airplane manufactured with a carbon fiber composite fuselage or carbon fiber composite wings or both.
(c) "Significant commercial airplane manufacturing program" means an airplane program in which the following products, including final assembly, will commence manufacture at a new or existing location within Washington state on or after the effective date of this section:
(i) The new model, or any version or variant of an existing model, of a commercial airplane; and
(ii) Fuselages and wings of a new model, or any version or variant of an existing model, of a commercial airplane.
(d) "Siting" means a final decision, made on or after November 1, 2013, by a manufacturer to locate a significant commercial airplane manufacturing program in Washington state.
(3) The department must make a determination regarding whether the contingency in subsection (1) of this section occurs and must provide written notice of the date on which such contingency occurs and chapter..., Laws of 2013 3rd sp. sess. (this act) takes effect. If the department determines that the contingency in subsection (1) of this section has not occurred by June 30, 2017, the department must provide written notice stating that chapter..., Laws of 2013 3rd sp. sess. (this act) does not take effect. Written notice under this subsection (3) must be provided to affected parties, the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the department.474
[A]n airplane program in which the following products, including final assembly, will commence manufacture at a new or existing location within Washington state on or after the effective date of this section:
(i) The new model, or any version or variant of an existing model, of a commercial airplane; and
(ii) Fuselages and wings of a new model, or any version or variant of an existing model, of a commercial airplane.475
The department [of Revenue of the state of Washington] must make a determination regarding whether the contingency in subsection (1) of this section [the siting] occurs and must provide written notice of the date on which such contingency occurs and [this act] takes effect. If the department determines that the contingency in subsection (1) of this section has not occurred by June 30, 2017, the department must provide written notice stating that [this act] does not take effect. Written notice under this subsection (3) must be provided to affected parties, the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the department.477
With respect to the manufacturing of commercial airplanes or making sales, at retail or wholesale, of commercial airplanes, this subsection (11) does not apply on and after July 1st of the year in which the department makes a determination that any final assembly or wing assembly of any version or variant of a commercial airplane that is the basis of a siting of a significant commercial airplane manufacturing program in the state under section 2 of this act has been sited outside the state of Washington. This subsection (11)(e)(ii) only applies to the manufacturing or sale of commercial airplanes that are the basis of a siting of a significant commercial airplane manufacturing program in the state under section 2 of this act.479
"To manufacture" embraces all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different or useful substance or article of tangible personal property is produced for sale or industrial use…482
An aircraft gets its essential structure, its aerodynamic and load-bearing qualities, from its airframe. The main airframe structures are the fuselage, wing, and tail.492 (emphasis original)
The fuselageis the long tube that forms the longitudinal axis of the aircraft, running from nose to tail. It forms the exterior structure that houses the aircraft's interior accommodations and payload – e.g., passengers, crew, flight deck, cargo.494 (emphasis original)
a. Skins: the panels that form the exterior of the fuselage, with cutouts for windows and doors;
b. Frames: stronger, hoop-shaped structures positioned perpendicular to the skins at intervals along the length of the fuselage; and
c. Stringers: long, thin structures running parallel to, and reinforcing, the skins.495
a. The forward part of the fuselage incorporates Section 41, which is the foremost fuselage section that will eventually house the flight deck, which is joined to Section 43.502
b. The center part of the fuselage consists of Section 44, which unlike other fuselage sections does not have a keel panel; rather, Section 11/45 forms the bottom of the center part of the fuselage, and is itself constructed from various structures: [[BCI]].503
c. The aft part of the fuselage is formed by joining three separate fuselage sections (Sections 46-48).504
The wings join the aircraft at roughly the mid-point along the length of the fuselage. In addition to providing lift and flight control surfaces, the wings carry the engine installations and fuel.505 (emphasis original)
a. The main wing box, which forms most of the wing's visible surface area;
b. The wing tip, which is static in flight but folds at airport gates to meet certain wingspan constraints;
c. The fixed leading and trailing edges that run most of the span of the visible wing; and
d. The center wing box, which sits under the fuselage and is not visible on a finished aircraft.506
[I]ndependently results in a de jure violation of Article 3.1(b).559 At the same time, these conditions act together to maximize trade distortions in favour of domestic goods, and to the detriment of competitive opportunities for imported goods. While the [First Siting Provision] focuses on component sourcing decisions made at the beginning of a new aircraft programme, the [Second Siting Provision] focuses on later stages.560 (emphasis original)
[U]nder the [First Siting Provision] established in Section 2 [of ESSB 5952], the aerospace tax incentive extensions and expansion provided for in [ESSB 5952] were made contingent upon Boeing's decision to locate in Washington State both (i) production of the wings and fuselage for the 777X and (ii) final assembly of the 777X.562,563