At last Friday's DSB meeting, the U.S. had some positive things to say about how the MPIA arbitrators in the Colombia - Frozen Fries dispute handled the issue of the AD Agreement Article 17.6(ii) legal standard of review:
- The United States intervenes to comment on the Arbitrator’s findings with respect to Article 17.6(ii) of the Anti-Dumping Agreement (“AD Agreement”).
- Article 17.6(ii) was key to the acceptance of the other provisions of the AD Agreement. The existence of such a provision confirms that Members were aware that the text of the AD Agreement could pose particular interpretive challenges, at least in part because it was drafted to cover varying and complex anti-dumping regimes and long-standing differences concerning methodology. WTO Members agreed, therefore, that it would be a legal error not to respect a permissible interpretation of the AD Agreement.
- The question under Article 17.6(ii) is whether an investigating authority’s interpretation of the AD Agreement is a permissible interpretation. As the United States has explained for years, “permissible” means just that: a meaning that could be reached under the Vienna Convention.1
- Article 17.6(ii) itself confirms that provisions of the AD Agreement may “admit[] of more than one permissible interpretation.”
- Where that is the case, and where the investigating authority has relied upon one such interpretation, a panel must find the measure to be in conformity with the AD Agreement. As one panel report stated, “[I]n accordance with Article 17.6(ii) of the AD Agreement, if an interpretation is ‘permissible’, then we are compelled to accept it.”2
- The Arbitrator seriously engaged with the text of Article 17.6(ii). The Arbitrator appropriately recognized that the subparagraphs of Article 17.6 “must be understood in a manner granting special deference to investigating authorities under the Anti-Dumping Agreement.”3
- The Arbitrator undertook its textual analysis in a manner that gave effect to the terms of the provision.
- The analysis addressed directly the nature of treaty interpretation under the Vienna Convention. The Arbitrator explained that its “approach assumes, as the second sentence does, that different treaty interpreters applying the same tools of the Vienna Convention may, in good faith and with solid arguments in support, reach different conclusions on the ‘correct’ interpretation of a treaty provision.”4
- The Arbitrator went on to note favorably the observation that the Vienna Convention rules “are facilitative not disciplinary and do not ‘instruct the treaty interpreter to find a single meaning of the treaty’ as a former Appellate Body member has written.”5
- We agree with this observation and find the Arbitrator’s analysis of Article 17.6(ii) to be persuasive.
- The Arbitrator’s analysis differs from – and implicitly rejects – the past reports of the Appellate Body that expressed disregard for the meaning and importance of Article 17.6(ii).
- In no WTO dispute did the Appellate Body ever find that there was a permissible interpretation of the AD Agreement other than the interpretation favored by the Appellate Body. Instead, the Appellate Body simply asserted “the rules and principles of the Vienna Convention cannot contemplate interpretations with mutually contradictory results”6
- That assertion was unsupported. The ordinary meaning of “permissible” is “allowable” or “permitted” – that is, an interpretation that could be reached under customary rules of interpretation.
- We welcome the Arbitrator’s willingness to adopt an interpretation that is consistent with the text agreed by Members, even and especially if the interpretation differs from the Appellate Body’s erroneous views.7
- We recall that some Members appear to promote “security and predictability” as an independent goal for dispute settlement, and from that derive that appellate interpretations must simply be followed. But this Arbitrator has developed an interpretation that is more consistent with the text agreed by Members. Adherence to the texts as negotiated and agreed by Members – rather than consistency for consistency’s sake – assists in providing security and predictability to the multilateral trading system – per the precise words of Article 3.2 of the DSU.
- We look forward to engaging further with Members on the important issues raised in the Arbitrator’s Award.
This U.S. statement raises a few questions for me related to some of the big systemic questions hovering out there on WTO dispute settlement.
First, does the MPIA arbitrators' finding here make the U.S. more sympathetic to the MPIA, and would it considering using the MPIA, or DSU Article 25 on an ad hoc basis, as an appeals mechanism in the future?
Second, how does the U.S. see the precedential value of this finding? Would the U.S. want to see this MPIA finding treated by future WTO panels as a precedent with some degree of persuasive value? In the U.S. view, to what extent should the issue be reargued in future disputes based on the agreement text?
Third, how do other governments view the MPIA arbitrators' findings here? Were they persuaded by the reasoning, so there is now a consensus around this approach? Or do some of them prefer the Appellate Body's approach? (If anyone knows if other governments spoke on this issue at the DSB meeting or elsewhere, feel free to mention it in the comments).
