The canon of interpretation ejusdem generis states that where a listing of particular persons or things is FOLLOWED by a general term, the general term must refer to the same kinds of persons or things previously listed. In other words, the general term is limited by things ejusdem generis - “of the same species.” So a list of “carrots, corn, potatoes and other agricultural products” should be read to include soy beans, but not eggs, cheese or chickens, the delimiting genus being vegetation.
The Appellate Body has reformulated without justification this canon by extending it in a footnote (as an obiter dictum) to a situation where the general word or phrase PRECEDES the specified list:
At the oral hearing, the United States referred to the Latin canon of construction, "ejusdem generis", which provides that, when a general word or phrase follows a list of specific persons or things, the general word or phrase will be interpreted to include only persons or things of the same type as those listed... In our view, the doctrine would equally apply to situations where the general word or phrase PRECEDES the specified list.
The consequence of this “view” is crucial for the legal status of China's exchange rate policy . It means for exemple that the illustrative examples “grants, loans, and equity infusion” following the expression “direct transfer of funds” in Article 1 of the SCM, constrain the meaning of what is a direct transfer of funds. In other words, ONLY transactions similar to those given as examples could be considered as a direct transfer of funds. Note that this is completely different from saying reasonably that a transaction similar to one the examples is certainly a direct transfer of funds. This is in fact the original position of the AB, but unfortunately the previous footnote opens unreasonably another door.
To illustrate the importance of this issue, consider for example the issue of whether China’s exchange rate transactions could be considered as a financial contribution under the form of a direct transfer of funds. According to Magnus and Brightill a financial contribution exists ‘any time a government and a company trade one thing for another, even RMB for dollars’. However, according to Coppens:
it seems unlikely that the Appellate Body would accept this reasoning, because the scope of direct transfers of funds is confined to those transactions that have ‘sufficient characteristics in common’ with one of the listed items (i.e., grants, loans, and equity infusion). An exchange transaction as such does not appear to be of ‘the same type as those listed’.
Coppen’s view is valid only if we accept the obiter dictum reformulation of the ejusdem generis canon by the AB in its footnote. Considering that illustrative examples of a general term constrain completely the meaning of this term is a hazardous interpretation. Is it conform to the spirit of the ejusdem generis canon where the general term FOLLOWS the examples?
