I was intrigued by this passage in the U.S. - Countervailing Measures (China) Article 22.6 Arbitration Decision circulated last week:
3.137. Basing our choice of the year-prior on the calendar year preceding the imposition of the preliminary CVDs would therefore secure a correct calculation, rather than, as the United States suggests, distort the purpose of this arbitration. Accordingly, we select the year-prior suggested by China for each of the six products in question.
3.138. In doing so, we consider it immaterial and unnecessary to explore whether our approach reflects a deviation, as the United States suggests, from US – Washing Machines (Article 22.6 – US) and US – Anti-Dumping Methodologies (China) (Article 22.6 – US).296 ...
What exactly was the U.S. saying about "a deviation" from past Arbitration decisions? And does this tell us anything about the U.S. view of precedent in WTO dispute settlement? I looked at the cites in FN. 296 to find out more.
This was from the U.S. written submission:
125. ... With respect to Pressure Pipe, which was not at issue in DS471, the United States has used the same process that was used in DS471, and has identified the year-prior based on the timing of the final determination for this product. China, on the other hand, again selected the year before the year-prior to the final determination. China has not explained why it departed from the method of identifying the year-prior that was used previously with respect to OCTG, Line Pipe, and Pressure Pipe. ...
This was from the U.S. comments on China's responses to Arbitrator questions:
54. In sum, China has not provided compelling evidence on why the Arbitrator should deviate from the approach taken by the arbitrators in DS471 and DS464: i.e., selecting the year prior to the imposition of the final CVD measure as the appropriate year-prior to use in this proceeding.75
And this was from the U.S. responses to the Arbitrator's questions:
137. Therefore, China still has not provided any actual evidence that Chinese exporters exited the U.S. market because of the relevant preliminary CVD measures. As the United States further explains in the U.S. response to question 109, below, China has failed to demonstrate why the Arbitrator should deviate from the correct and well-supported approach taken in the DS471 and DS464 arbitration proceedings, in which the arbitrators selected the year prior to the imposition of the final CVD measures as the year-prior.
It seems to me that the view that an Arbitrator should not "deviate" from the approach of past Arbitrators in the absence of "compelling evidence" is a lot like the view that panels and the Appellate Body should follow previous rulings unless there are "cogent reasons" not to do so. As a reminder, here's what the Appellate Body said in U.S. - Stainless Steel (Mexico):
160. Dispute settlement practice demonstrates that WTO Members attach significance to reasoning provided in previous panel and Appellate Body reports. Adopted panel and Appellate Body reports are often cited by parties in support of legal arguments in dispute settlement proceedings, and are relied upon by panels and the Appellate Body in subsequent disputes. In addition, when enacting or modifying laws and national regulations pertaining to international trade matters, WTO Members take into account the legal interpretation of the covered agreements developed in adopted panel and Appellate Body reports. Thus, the legal interpretation embodied in adopted panel and Appellate Body reports becomes part and parcel of the acquis of the WTO dispute settlement system. Ensuring "security and predictability" in the dispute settlement system, as contemplated in Article 3.2 of the DSU, implies that, absent cogent reasons, an adjudicatory body will resolve the same legal question in the same way in a subsequent case.
Is there a difference between the highly economic evidence-based Article 22.6 arbitration decisions and the more legally-focused panel/AB reports? Are there differences in the meaning of the words "cogent reasons"/"compelling evidence"? Perhaps. But it's also possible that governments' views on the issue of precedent are not as different as they sometimes appear.
