Following up on my earlier post about U.S. allegations that the Appellate Body sometimes says more than it needs to say, here's another point the U.S. makes:
Second, in DS430, a dispute in which the United States was the complaining party and prevailed, we noted that the appellate report engaged in a lengthy abstract discussion of a provision of the SPS Agreement without ever tying that discussion to an issue on appeal, and even expressed “concerns” in that discussion on findings of the panel that were not raised by either party in the appeal. Furthermore, during the hearing, the Appellate Body devoted considerable time to an issue that the parties and the third parties agreed had not been raised on appeal, involving an item that was not on the record, that had not been raised by either party in its arguments, and had not been examined by the panel and was not the subject of any panel findings. The questioning was of such concern that the United States felt compelled to devote its entire closing statement to urging the Appellate Body not to opine on that non-appealed issue.
It is not the role of the Appellate Body to engage in abstract discussions or to divert an appeal away from the issues before it in order to employ resources on matters that are not presented in, and will not help resolve, a dispute.
The U.S. made reference to its earlier statement to the DSB about this case:
While we welcome these findings overall, the United States does have certain concerns with a portion of the Appellate Body report addressed to Article 6. The Article 6 analysis begins with a lengthy abstract discussion, before it reaches the issues on appeal and without tying that discussion to the issues on appeal.2 And the Appellate Body even expresses “concerns” in relation to certain findings by the Panel not raised in the appeal.3
In the view of the United States, issues not raised in the appeal are not on appeal, and a thorough, considered, and persuasive interpretation of the WTO Agreements is more likely to result where parties and third parties have engaged on the issues of legal interpretation actually at issue on appeal.
Moreover, particularly at a time when workload issues are increasingly affecting the timetable for the resolution of disputes, a focus on those issues that have been appealed, and on questions that need to be addressed in resolving arguments raised on appeal, would facilitate the efficient functioning of dispute settlement process
Focusing on the point about the Appellate Body expressing concerns in relation to Panel findings not raised on appeal, here are the paragraphs of the Appellate Body report that are at issue:
5.142. Before turning to the specific interpretative issue raised by India's appeal, we wish to express certain concerns as to whether some of the Panel's statements accord with our understanding of the content and structure of Article 6 of the SPS Agreement. We note, for example, that the Panel separately found that India's AI measures are inconsistent with each sentence of Article 6.1, and with each sentence of Article 6.2 of the SPS Agreement. Furthermore, the Panel seemed to consider that the second sentence of each of these paragraphs will inevitably be violated in situations where, respectively, no assessment of the SPS characteristics of a region has been conducted, and no specific determination has been made in respect of a specific area that is potentially pest or disease free or an area of low pest or disease prevalence.505 We note that these aspects of the Panel's analysis have not been appealed. Consequently, we neither endorse nor reject the Panel's understanding of Article 6 in this regard. However, we consider it important to emphasize that what constitutes an appropriate order of analysis and approach by a panel examining a claim under Article 6 may, at least in part, be a function of the nature of the claim and the circumstances of the case.
5.143. In addition, we observe that, while the Panel seems to have correctly understood the nexus between Articles 6.1 and 6.2 insofar as this was relevant in the context of the specific claims raised by the United States in this dispute, we are not persuaded that all of the statements made by the Panel would have the same resonance in every case. We recall, for example, that, in the Panel's view, "the 'adaptation' of a Member's SPS measures to the SPS characteristics of particular 'areas' presupposes that a Member has first 'recognized' the concept of such areas."506 To the extent that the Panel was suggesting that the obligation to ensure that a Member's SPS measures are "adapted" within the meaning of Article 6.1 always presupposes that a Member must have recognized the concepts mentioned in Article 6.2, we disagree. This is because, as explained above, we see pest- or disease-free areas and areas of low pest or disease prevalence as a subset of all the SPS characteristics of an area that may call for the adaptation of an SPS measure. In other words, "pest- or disease-free areas" and "areas of low pest or disease prevalence" are not the only SPS characteristics that are relevant for the adaptation obligation under Article 6.1. As a result, under certain circumstances, the SPS characteristics that are relevant in a specific case may not be related to the level of pest or disease prevalence in a particular area. In such circumstances, a panel assessing whether a Member has complied with the obligation to ensure that its SPS measures are adapted within the meaning of Article 6.1 may not need to inquire as to whether that Member has previously recognized the concepts contained in Article 6.2. In addition, we also question the Panel's statement that "adaptation" of an SPS measure "presupposes" that a Member has first "recognized" the concepts of such areas, inasmuch as such statement may suggest that recognition of the concepts must consist of an affirmative act that is distinct from and taken prior to the adoption of an SPS measure. In our view, this does not seem entirely consistent with the Panel's statement that there is no prescribed format for the recognition of the concepts and that it is the prerogative of Members to decide how to do so. Moreover, we question the Panel's statement to the extent that it may be read as excluding that recognition of the concepts could be done through and upon adoption of the very SPS measure that is adapted to the SPS characteristics of the relevant areas.
Here are some questions that may be relevant: When there is an appeal related to a specific issue under a sub-provision of an Article of a WTO agreement, to what extent can and should the Appellate Body discuss the broader operation of that Article? Should there be constraints on such a practice? If so, what would these constraints look like?
If the Appellate Body had said, "before we get to this issue on appeal under the SPS Agreement we would like to talk about some issues under the AD Agreement that have been bothering us," the objection would be obvious. Here, it is much less clear that the Appellate Body exceeded its discretion. We are still under the same Article, so it doesn't seem to me that the Appellate Body was pushing too far past any boundaries, wherever those boundaries may be. But I'm opening to hearing any specific proposals on how precise boundaries could be set going forward.
