Trade

• Author: International Law Group

On May 1, 2001, the World Trade Organization (WTO) Dispute Settlement Body released the Appellate Body report in the dispute regarding U.S. import barriers to lamb meat from Australia and New Zealand. The dispute revolves around a safeguard investigation begun by the U.S. International Trade Commission (USITC) on October 7, 1998 as to imports of lamb meat.

The U.S. imposed a definitive safeguard measure in the form of a tariff-rate quota on July 7, 1999. Australia and New Zealand filed a complaint with the WTO, alleging that the U.S. safeguard measures are inconsistent with Articles I, II, and XIX of GATT 1994 and the Agreement on Safeguards.

In a Report circulated on December 21, 2000, a Dispute Settlement Panel found that the U.S. safeguard measure did in fact violate trading rules. For example, the U.S. had failed to demonstrate the existence of "unforeseen developments" (see Article XIX:1(a) of GATT 1994), and had broadly defined its "domestic industry" as including growers and feeders of live lambs (see 4.1(c) of the Agreement on Safeguards).

The Appellate Body Report essentially upholds the Panel's findings. In addition, the Appellate Body:

(1) Upholds the Panel's finding that the USITC used data that was not sufficiently representative of the U.S. "domestic industry";

(2) Finds that the Panel correctly interpreted the standard of review as set forth in Article 11 of the Dispute Settlement Understanding, which is appropriate to the review of claims under Article 4.2 of the Agreement on Safeguards.

(3) Concludes that the U.S. acted...