… by imposing countervailing duties on 1994, 1995 and 1996 imports of leaded bars produced by UES and BSplc/BSES respectively, the United States violated Article 10 of the SCM Agreement.12
1. The rules and procedures of this Understanding shall apply to disputes brought pursuant to the consultation and dispute settlement provisions of the agreements listed in Appendix 1 to this Understanding (referred to in this Understanding as the "covered agreements"). …
2. The rules and procedures of this Understanding shall apply subject to such special or additional rules and procedures on dispute settlement contained in the covered agreements as are identified in Appendix 2 to this Understanding. …
We also note that Article 30 of the SCM Agreement specifies:
The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding shall apply to consultations and the settlement of disputes under this Agreement, except as otherwise specifically provided herein.
We further note that the SCM Agreement does not contain any "special or additional rules" on the standard of review to be applied by panels.
… bears directly on [the] matter [of standard of review] and, in effect, articulates with great succinctness but with sufficient clarity the appropriate standard of review for panels in respect of both the ascertainment of facts and the legal characterization of such facts under the relevant agreements.37
More recently, in our Report in Argentina – Footwear Safeguards, which involved a dispute under the Agreement on Safeguards, we observed that:
We have stated, on more than one occasion, that, for all but one of the covered agreements, Article 11 of the DSU sets forth the appropriate standard of review for panels.38
Recognize, with respect to dispute settlement pursuant to the Agreement on Implementation of Article VI of GATT 1994 or Part V of the Agreement on Subsidies and Countervailing Measures, the need for the consistent resolution of disputes arising from anti-dumping and countervailing duty measures.
The standard of review in paragraph 6 of Article17 of the Agreement on Implementation of Article VI of GATT1994 shall be reviewed after a period of three years with a view to considering the question of whether it is capable of general application.
This Decision provides for review of the standard of review in Article 17.6 of the Anti-Dumping Agreement to determine if it is "capable of general application" to other covered agreements, including the SCM Agreement. By implication, this Decision supports our conclusion that the Article 17.6 standard applies only to disputes arising under the Anti-Dumping Agreement, and not to disputes arising under other covered agreements, such as the SCM Agreement. To date, the DSB has not conducted the review contemplated in this Decision.
… the countervailing duties imposed as a result of the USDOC's 1995, 1996 and 1997 administrative reviews are not in accordance with the premise underlying Articles 19.1, 19.4 and 21.2 of the SCM Agreement, Article VI:3 of the GATT 1994, and the object and purpose of countervailing duties as expressed in footnote 36 to Article 10. … Accordingly, we conclude that the countervailing duties imposed as a result of the USDOC's 1995, 1996 and 1997 administrative reviews are inconsistent with Article 10 of the SCM Agreement.40
In reaching this conclusion, the Panel found:
… the USDOC should have examined the continued existence of "benefit" already deemed to have been conferred by the pre-1985/86 "financial contributions" to BSC, and it should have done so from the perspective of UES and BSplc/BSES respectively, and not BSC.41
… fair market value was paid for all productive assets, goodwill etc. employed by UES and BSplc/BSES in the production of leaded bars imported into the United States in 1994, 1995 and 1996. In these circumstances, we fail to see how pre-1985/86 "financial contributions" bestowed on BSC could subsequently be considered to confer a "benefit" on UES and BSplc/BSES during the relevant periods of review.42
The United States appeals the above findings of the Panel.43
For the purpose of this Agreement, a subsidy shall be deemed to exist if:
(a)(1) there is a financial contribution by a government or any public body within the territory of a Member …
(b) a benefit is thereby conferred.
The existence of a "financial contribution" is not at issue in this appeal. The principal issue in this appeal concerns the interpretation of the term "benefit" in Article 1.1 above.
The United States has not denied that the BSC spin-off was negotiated for fair market value.54
Both parties agree that the privatization of British Steel plc was "at arm's length, for fair market value and consistent with commercial considerations".55
However, the United States, in its appellant's submission, argued that the Panel engaged "in a de novo review" and made factual findings "not adequately supported by the record" by finding "that the purchase price in each of the two BSC privatization transactions was a 'fair market value' purchase price".56
Given the explicit aim of dispute settlement that permeates the DSU, we do not consider that Article 3.2 of the DSU is meant to encourage either panels or the Appellate Body to "make law" by clarifying existing provisions of the WTO Agreement outside the context of resolving a particular dispute. A panel need only address those claims which must be addressed in order to resolve the matter in issue in the dispute.59
We added that :
… Article IX of the WTO Agreement provides that the Ministerial Conference and the General Council have the "exclusive authority" to adopt interpretations of the WTO Agreement and the Multilateral Trade Agreements. This is explicitly recognized in Article 3.9 of the DSU …60
Signed in the original at Geneva this 10th day of April 2000 by:
Said El-Naggar Julio Lacarte-Muró