World Trade Organization

• Author: International Law Group

The Appellate Body of the World Trade Organization (WTO) has reversed parts of a Dispute Settlement Report regarding the U.S. safeguard measures imposed on European wheat gluten. See 2000 International Law Update 127. Wheat gluten is used for high-fiber and multi-grain bread. A U.S. International Trade Commission (USITC) investigation led to a quota on European wheat gluten pursuant to Section 201 of the Trade Act of 1974 in response to a 1996-1997 surge in wheat gluten imports.

The WTO Panel Report circulated on July 31, 2000 found that the U.S. quota imposed on European wheat gluten is inconsistent with Articles 2.1 and 4 of the Agreement on Safeguards because the causation analysis was flawed and did not consider Canadian imports. The U.S. appealed, claiming among other things that the USITC's "causation" analysis complies with Article 4.2 of the Agreement on Safeguards, that the U.S. properly excluded Canadian imports from the application of the safeguard measures. In particular, the Appellate Body: (1) agrees with the Panel's finding that the U.S. acted improperly under Article 4.2(a) of the Agreement on Safeguards by not evaluating the overall relationship between the protein content of wheat and the...