China – Measures Affecting Imports of Automobile Parts (WT/DS 339, 340, 342)

Responses by Australia to Questions Posed by the Panel to the Third Parties

I. Questions to all third parties

1. We note that in paragraph 137 of its first written submission China refers, inter alia, to the anti-dumping regulations of certain third parties:

(a) Do you currently have, or have you ever had, anti-circumvention measures in place for (i) anti-dumping duties and/or (ii) ordinary customs duties? If yes, please explain your measure in detail (including the citation to any legislation or regulation that govern the application of these measures) and whether it is a border or internal measure within the meaning of Articles II and III of the GATT.

No.

(b) Are you aware of any such measures maintained by other WTO Members?

Australia prefers not to comment on measures maintained by other WTO Members in the context of the present dispute, in which China’s measures are the measures at issue.

2. Do you have significantly different tariff lines for a given "complete" product and for "parts and components" thereof?

The Harmonized System generally requires parts and complete goods to be classified within different subheadings, sometimes within the same heading or chapter, other times in different headings and chapters. In Australia, the duty rates for complete motor vehicles and for motor vehicle parts are the same. The duty rates for other complete goods and their parts do differ in many cases, but usually not to any significant degree.

If yes, how would your customs authority assess and charge ordinary customs duties in relation to:

(a) "parts and components" that enter your territory from multiple shipments and are imported by the manufacturer itself and assembled together with domestic parts into a complete product for sale in the domestic market;

If the parts in any particular individual shipment in multiple shipments (i.e. a series of individual shipments), constituted an unassembled/unfinished product that had the essential character of the complete product, those parts would be classified and assessed for ordinary customs duty purposes as a complete product. The remaining parts in that particular individual shipment would be classified and assessed for ordinary customs duty purposes as parts. In addition, the parts in the remaining individual shipments would be classified and assessed for ordinary duty purposes as parts. The identity of the importer, be that a supplier or a manufacturer, has no bearing on the classification of the goods.[1]

(b) "parts and components" that enter your territory from a single shipment and are imported by the manufacturer itself and assembled together with domestic parts into a "complete product" for sale in the domestic market;

If the parts in a single shipment constituted an unassembled/unfinished product that had the essential character of the complete product, those parts would be classified and assessed for ordinary customs duty purposes as a complete product. The remaining parts in the shipment would be classified and assessed for ordinary customs duty purposes as parts. The identity of the importer, be that a part supplier or a manufacturer, has no bearing on the classification of the goods.

(c) "parts and components" that enter your territory from multiple shipments and are imported by a part supplier/manufacturer and assembled together with domestic parts into a "complete product" for sale in the domestic market;

See response to 2(a) above.

(d) "parts and components" that enter your territory from a single shipment and are imported by a part supplier/manufacturer and assembled together with domestic parts into a "complete product" for sale in the domestic market;

See response to 2(b) above.

Would the duty assessment and charge of the "parts and components" in each of the scenarios cited above change if these imported goods would correspond to 100% of the "parts and components" needed to assemble the "complete product"? Would your answers in respect to the scenarios cited above involving multiple shipments change depending on the time differences between the arrival of the shipments concerned?

The fact that the imported goods correspond to 100% of the parts needed to assemble the ‘complete product’ would not alter the responses to 2(a)-(d) above. No regard would be had to whether the imported goods were to be assembled in Australia into a complete product without any domestic content. In addition, changes to the timing of the arrival of the multiple shipments would not alter the responses to 2(a) (c) above.

3. In your country, when do the customs authorities make a determination as to when a collection of parts cannot and/or should not be distinguished from the complete article that they are intended to form? How does your customs office interpret "as presented" in Rule 2(a) of General Rules for the Interpretative Notes of the HS in this relation?

In accordance with the Harmonized System, Australian customs authorities make this determination at the time of importation. Under rule 2(a) of the General Rules for the Interpretation of the Harmonized System (GIR 2(a) or the ‘essential character’ rule) parts can only be classified as completed products where, as presented, they have the essential character of the complete product. Australian custom authorities interpret ‘as presented’ to mean as imported.

4. Please comment on China's statement in paragraph 160 of its first written submission and in paragraph 13 of its oral statement in relation to the WCO affirmed decision concerning Rule 2(a) of the General Interpretative Rules. In particular, please clarify the legal status of this WCO decision, including whether it is binding on the parties to the WCO.

Australia considers that China’s statement in paragraph 160 of its first written submission[2] does not fully represent the WCO Harmonized System Committee’s (the Committee) Decision concerning GIR2(a). The extract referred to by China in relation to split consignments is obiter dictum that arose in relation to a Decision by the Committee interpreting the phrase ‘articles presented complete or unfinished.’ The true effect of the cited Decision is to clarify that no account is to be taken of the complexity of the assembly method in interpreting GIR 2(a).

In Australia’s view, the cited Decision is not legally binding on parties to the WCO. The Committee established under the Harmonized System Convention is comprised of a representative from all contracting parties and has the role of preparing recommendations, opinions, Explanatory Notes and decisions.[3] On 30 June 2001 the WCO issued a Recommendation of the Customs Co-operation Council on the Application of the Harmonised System Committee Decisions which recommended that decisions of the Committee become binding on parties unless they notify the Secretary General of their inability to comply within twelve months. However, a WCO recommendation is not legally binding on a WCO party unless it accepts the recommendation. [4] Further, the Decision referred to in paragraph 160 of China’s written submission was concluded in November 1995, before the above Recommendation could have been accepted by any of the parties. Consequently, parties are not bound by the 1995 decision of the Committee concerning GIR 2(a).

Given that the Decision raises the issue of split consignments it may be helpful to briefly summarise Australian practice in this regard. Australia considers split shipments/split consignments to cover goods that are split over two or more shipments which all arrive at the border at the same time. It does not mean multiple shipments that arrive at many different times. Usually split shipments are used to transport goods which are too large to be transported on a single shipment.

5. How should Rule 2(a) be interpreted in light of the decision cited in the preceding question?

As noted above, Australia considers that the Decision only deals with goods that have been imported over a number of shipments that arrive at the same time, not to multiple shipments arriving at different times. As a result the decision of the Harmonized System Committee is of limited scope and its impact on the interpretation of GIR 2(a) is minimal.

The Decision does not allow WCO parties to use alleged ‘split-consignments’ to circumvent the essential character rule (GIR 2(a)) in an attempt to alter the commitments under their tariff schedules. Such an interpretation would undermine the founding principle of the WCO and the Harmonised System, which is to create harmony and predictability in the application of tariff schedules.

6. Please comment on China's position that Note VII of the Explanatory Notes to Rule 2(a) of the General Interpretative Rules is relevant in delineating the boundary between complete articles and parts of those articles (paragraph 100 of China's first written submission).

Australia notes that, unlike the General Rules for the Interpretation of the Harmonized System, the Explanatory Notes are not annexed to the Harmonized System Convention and are not an integral part of that Convention. The Explanatory Notes merely offer guidance on the interpretation of the Harmonized System. They do not amend the ordinary meaning of the terms in the Harmonized System.

Australia considers that Note VII of the Explanatory Notes to GIR 2(a) simply confirms that following an application of the ‘essential character’ rule any parts imported in excess of those necessary to form the complete article should be classified separately as parts. NoteVII does not imply, as China suggests, that parts may only be classified as parts when they are not being imported for the purpose of assembling a complete article from imported parts.

7. Could different aspects of the challenged measures be respectively considered as either internal measures or border measures? In other words, could one part of the measures be a border measure while the other an internal measure? If yes, please indicate which specific part is border measure-related and which part is internal measure-related? What factors would you take into consideration to make such determination?

Australia does not consider that, in the circumstances of the present dispute, one part of the challenged measures could be a border measure while another part could be an internal measure.

8. In your view, if the measures were to be considered as border measures, would the Panel still be required to address the complainants' claims under Article III of the GATT and Article 2 of the TRIMs Agreement?

No. In this regard Australia notes the Appellate Body’s comments regarding judicial economy in Canada – Wheat Exports and Grain Imports.[5]

9. What is the difference between a charge imposed "on ... the importation" and a charge imposed "in connection with the importation" within the meaning of Article II:1(b), second sentence, of the GATT? What is the relevance of this difference, if any, to this case?

In Australia’s view the phrase ‘on or in connection with the importation’ represents a collective and interconnected obligation that is not divisible into its constituent parts. In any event, given that Australia considers China’s measures at issue to be internal measures, any alleged difference is irrelevant to the present dispute.

10. With respect to the phrase "on their importation into the territory" of Article II:1(b), first sentence GATT 1994, should this be understood as a reference to the time of presentation at the border or to some later point in time? If later, should the charge assessed be determined on the basis of the condition of the products as presented at the border or on the basis of their inclusion in a finished product after entry?

In Australia’s view the phrase ‘on their importation into the territory’ refers to the time of presentation of the product at the border.

11. Do your have a formal definition of CKD and SKD in relation to your specific Schedule or, more generally, in any pertinent legislation or regulation? If yes, please provide it. If not, what is, in your opinion, the meaning of these two terms? How are CKD and SKD kits classified in your country?

No. Australia’s understanding is that Completely Knocked Down (CKD) or Semi-Knocked Down (SKD) kits usually refer to substantially complete articles that are broken down into individual parts (CKD) or sub-assemblies (SKD). Minor parts, such as batteries, windscreens or tyres, may often be omitted, but once assembled a substantially complete article would be formed. In Australia, CKD and SKD kits are generally considered as unassembled articles which, if assembled, would have the essential character of the complete article. Consequently, they are generally classified as the complete article in accordance with GIR 2(a).

12. (All parties) The European Communities explains in paragraph 262 of its first written submission that a situation foreseen under Article 21(2)(a) of Decree 125, namely importation of both an engine assembly and a body assembly together, is far away from the categories foreseen by the Chinese tariff schedule examined in the light of the general Explanatory Notes for Chapter 87 whereby an incomplete or unfinished vehicle may be classified as the corresponding complete or finished vehicle provided it has the essential character of the latter.

(a) Do you consider that the two examples of incomplete or unfinished vehicles in the General Notes for Chapter 87 correspond to any of the criteria set out in Article 21 of Decree 125?; and

Australia accepts that the criteria set out in Article 21(1) of Decree 125 in relation to complete CKD or SKD kits, if presented to Customs as such at the time of importation, would usually be considered to have the essential character of complete goods and therefore classified as complete goods in accordance with GIR 2(a). However, Australia does not accept that goods meeting the remaining criteria in Article 21 of Decree 125 would automatically be considered to have the essential character of motor vehicles. Ultimately it would depend on exactly which parts or assemblies were included and which ones were not.

(b) In your view, what auto part products, other than those referred to the General Notes for Chapter 87, would qualify as an "incomplete or unfinished vehicle having the essential character of a complete or finished vehicle"? Please explain by referring to specific examples.

Australia does not consider that it is possible to provide an exhaustive list of what configurations would have the essential character of a motor vehicle. This determination needs to be made on a case-by-case basis taking into account all the relevant facts and circumstances. However, Australia is able to offer the following observations by way of illustration. There must be sufficient parts to assemble a machine that had more than two wheels connected by some sort of axle system driven by some form of motive power, and more than likely, provision for a driver. Absence of a windscreen, mirrors or bumper bars would not be fatal to a determination that a configuration has the essential character of a motor vehicle. However, absence of an engine and gearbox would be.

13. Argentina considers it not to be "appropriate to make a parallelism between ordinary customs duties and antidumping or countervailing duties" (paragraph 20 of Argentina's written submission). It seems that Argentina makes this argument in relation to the discussion regarding "subsequent practice" under the Article II claims.

(a) (Argentina) Given your above statement, do you see any usefulness in the findings of the GATT Panel decision in EEC – Parts and Components, cited by the parties in their written submission, to the question of the characterization of the measures?

(b) (All other third parties) Do you agree with Argentina's statement in paragraph 20 of its written submission?

Australia supports the thrust of Argentina’s concerns. In Australia’s view, provisions with respect to anti-circumvention of anti-dumping and countervailing duties are not directly applicable to tariff classification. Anti-dumping duties and countervailing duties are not ordinary customs duties within the meaning of Articles I and II of GATT 1994. Unlike anti-dumping and countervailing duties, ordinary customs duties are not directed at remedying injury to a Member’s domestic industry. However, it does not follow from this that EEC – Parts and Components, which dealt with an anti-circumvention provision for anti-dumping duties, is irrelevant to this dispute. Firstly, Argentina raised its concerns in the context of China’s reliance on subsequent practice as a means of interpreting its tariff schedule. On the other hand, the complainants rely on EEC – Parts and Components in addressing the question of whether the challenged measures are border measures or internal measures. Secondly, according to the Appellate Body in Japan-Alcoholic Beverages II, adopted GATT Panel Reports create legitimate expectations among WTO Members and should be taken into account.[6]

14. The following argument is contained in paragraph 14 of Australia's third party oral statement, which was made in relation to China's claim that a charge imposed after the time or point of importation can still be a border charge if it relates to a condition of liability that attached at the time of importation:

Presumably, in an attempt to establish a nexus with importation, the measures at issue include a declaration made at the time of importation. However, this declaration appears to be entirely focused on the way in which the imported parts will be used internally within China, rather than on the contents of a consignment upon importation. ... Therefore ... the liability attaches internally, after the vehicle has been manufactured. (emphasis added)

(a) (Australia) Please elaborate more on this argument.

According to China’s first written submission importers must declare, at the time of importation, whether imported parts will be used to assemble a vehicle model that has been ‘deemed’ a complete vehicle. The declaration is secured by the provision of a bond.

These bonding requirements appear to be solely designed to assist in the collection of a tax based on the internal use of imported parts in manufacturing. Although the bonding requirements ostensibly attach at the point of entry into China, in reality they regulate the internal use of the parts and administrative procedures necessary to attach the 25% charge. The decision of whether a particular part will be charged at the higher rate of 25% is not made at the border. It can only be made post-manufacture when it can be determined whether a particular part, in combination with other imported parts, constitutes a sufficient percentage of the completed vehicle to be charged at the higher rate. Therefore, the bonding requirements do not create a nexus between importation and the 25% charge. Contrary to China’s arguments, the final charge is not a condition of importation because it does not attach to the importation of all parts as they arrive at the border. It only attaches once the parts have entered the Chinese domestic market, based on their use in car manufacturing. It is for this reason that Australia considers that the liability attaches internally, after the vehicle has been manufactured.

In any event, Australia’s considers that if a WTO Member imposed a condition on the end use of an import that was not contained in its Schedule, that WTO Member would be in breach of Article II GATT 1994.

(b) (All other third parties) Do you agree with Australia?

15. In paragraph 8 of its third party oral statement, Brazil lists some elements of the measures that might help the Panel to assess what Brazil calls the "taxable event", which would be relevant to the characterization of the measures:

(a) (Brazil) You have mentioned that in examining these elements the Panel should consider them "in their appropriate context". Please elaborate on this.

(b) (All other third parties) Do you agree with Brazil, in particular to the non-exhaustive list of elements it listed as relevant to the characterization of the measures? Which of these elements would add or subtract from that list?

Australia considers that Brazil’s notion of the ‘taxable event’, together with its list of elements, might provide the Panel with a helpful analytical tool when assessing the proper characterisation of China’s measures at issue. Another important consideration is the substance of the measures over their form. However, ultimately in determining between the application of Article II or III of GATT 1994 the Panel needs to look to the ordinary meaning of the terms in these provisions accordance with the Vienna Convention on the Law of Treaties 1969.

(c) (All other third parties) Do you think these elements could be applied in general to any situation where is necessary to determine the character of a measure.

See response to 15(b) above.

II. Specific Questions to Argentina

16. In paragraph 137 of its first written submission China refers, inter alia, to Argentina's anti-circumvention measures in respect of anti-dumping and countervailing duties. Can Argentina confirm whether these measures are still in place and elaborate upon these and point in particular to the elements which distinguish them from the Chinese measures in question.

17. In paragraphs 15-16 of your written submission you state that Article 29 of Decree 125 suggests that there is an "import stage" in the procedures under the measures. It further suggests that after that "stage" all other collected charges could still not be considered as border measures. Please, elaborate on this argument?

III. Specific Questions to Australia

18. In paragraph 22 of its oral statement Australia states that there is a fundamental principle of the Harmonized System that when goods are classified "it is always done on the basis of the objective characteristics of the product at the time of importation, that is, as imported and presented to Customs on a shipment-by-shipment basis. The intention of the importer and differing duty rates are irrelevant".

Some of the reasoning underlying Australian practice in relation to the Harmonised System is set out below. Australia believes that this reasoning may be of assistance in considering the various WTO obligations raised in the present dispute.

(a) Could Australia define what it means by "objective characteristics" and if there is guidance for this in the Harmonized System?

The ‘objective characteristics’ that might be taken into account when identifying goods were discussed by Justice Lockhart in a decision of the Federal Court of Australia as follows:

Whether the goods [fall within a particular heading of] the customs tariff is determined by an objective test not by the intentions of the manufacturer in China or of the exporter or the importer. The test is applied at the port of entry of the goods and at the time of entry. The characteristics of the goods, their get-up, colour, decoration, labelling and packaging are all relevant considerations. In some cases a visual inspection of the goods and their packaging will disclose characteristics of the goods and enable a judgement to be made as to whether they are for therapeutic or prophylactic use. But visual inspection will not necessarily provide the answer in each case. Tests may have to be carried out and enquiries made to ascertain the relevant characteristics of the goods. In the present case samples were taken and sent for chemical analysis. As the Tribunal noted, the paucity of the information contained in the labelling of the goods necessitated further enquiries being made in respect of them.[7]

(b) Does Australia have any support or citations for the premise that Customs should only do its analysis on a shipment-by-shipment basis?

Under Australian law identification and classification of goods is carried out at the time of importation, taking into account the condition and state of the goods at that time. The Australian Tariff Act has limited provisions allowing for goods spread over split shipments to be classified as a single shipment. According to the Full Federal Court of Australia (emphasis added):

…in determining what is the essential character of goods it is the state or condition of the goods at the time of importation that is the determining factor and that it is wrong to classify goods or to determine their essential character by reference to the purpose of the importer or of the purchaser. Regard must be had to the characteristics of the goods themselves, as they would present themselves to an informed observer…[8]

(c) How does Australia respond to China's arguments that the decision of the Harmonized System Committee on the interpretation of GIR 2(a) specifically contemplates that national authorities may determine that parts constitute the essential character of a finished product based on multiple shipments?

Australia considers the Harmonized System Committee’s Decision relates to a good split over a number of shipments that all arrive at the same time. It does not contemplate goods that are spread over a number of different shipments all arriving at different times.

Further, Australia understands that China has adopted this approach in relation to motor vehicles only. Therefore, the question arises as to why China does not use this approach for all imports.

19. In paragraph 24 of its oral statement Australia states that in the application of the "essential character" test, the value of the parts in relation to the value of the completed good is irrelevant. Could Australia please elaborate on why it believes the value has no relevance, providing specific legal support for its reasoning.

Australia does not consider value to be an element of tariff classification. Nowhere in the Harmonised System or in the Australian Customs Tariff Act does it require that value be taken into account when performing the classification exercise.

Just because a complete good is missing something of low value does not mean that it still has the essential character of the complete good. For example, a collection of parts for a Central Processing Unit (CPU) of a computer would not have the essential character of a CPU if they did not include the processor, regardless of the value of the processor and whether it was worth 5% or 95% of the CPU.

In Australia’s view, the value of goods or their parts has no place in an objective international trading classification system. Customs valuation is distinct from tariff classification as evidenced by the existence of the Customs Valuation Agreement.[9] Values are subjective and can change according to factors such as seasons, fashion, exchange rates and fuel prices. This could lead to inconsistent classification of essentially the same goods from different sources. Under the Harmonised System, goods and their parts should be classified consistently based on what they are, not on how much they are worth.

When exploring the concept of ‘essential character’ under GIR 2(a), Australian courts and tribunals have found that value has no relevance. Rather, they have found that the term ‘essential character’ is concerned with the physical characteristics of the goods. The courts have used ordinary dictionary definitions to determine the meaning of ‘essential character’.

In Re Renault (Wholesale) Pty Ltd and Collector of Customs Australia’s Administrative Appeals Tribunal (AAT), dealing with the precursor to the current GIR 2(a), attempted to define ‘essential character’. The goods requiring classification were parts for Renault and Peugeot motor cars, which were to be used to assemble complete vehicles. The only parts missing were the fanbelts of the Renaults and the gearboxes of the Peugeots. The AAT said:

The Oxford Dictionary gives a meaning to the words [essential character] as follows:

“Essential (2) of or pertaining to essence, specific being, or intrinsic nature. Differentia: - essential character: in scientific classification the marks which distinguish a species, genus, etc. from the others included with it in the next superior division.”

Thus the term points to the characteristics, which distinguish the goods as belonging to a genus or a sub-genus. It is true this use of the words is ordinarily a scientific use. However, we are of the view that the term is not so limited and that it is appropriately so used in interpretative rule 2(1)(a).

The question thus arises whether the goods, though incomplete and unfinished, have a character which is sufficient to distinguish them, firstly, as belonging to the genus motor vehicles, secondly, as belonging to the sub-genus motor vehicles for the transport of persons, goods or materials of a kind operated by self-contained power and, thirdly, as belonging to the further sub-category unassembled motor vehicles of this type.

… On the evidence, we are of the view that the subject goods had the essential character of motor vehicles for the transport of persons, goods or materials of a kind operated by self-contained power, albeit unassembled motor vehicles. We are of the view that the type and quantity of work required to be done in Australia to the imported goods to form motor vehicles was consistent with the identity of the goods being unassembled motor vehicles, though unfinished vehicles. …We are of the view that, looked at collectively, the goods were sufficiently committed to assembly into motor vehicles of the designated type and were sufficiently complete to be identified as belonging to the specified class and to no other.[10]

In Re Phillips and House Group and Collector of Customs the AAT found that it was more than the visual appearance of the goods which determined their essential character. Although the Tribunal agreed with the definition adopted in Renault they also applied the following definition of essential character, saying:

We … would refer also to the Random House Dictionary of the English Language where one meaning assigned to the word "essential" is "pertaining to or constituting the essence of a thing", and where the word "essential" and its synonyms "inherent" and "intrinsic" are said to refer to "that which is in the natural composition of a thing", and where "essential" is said to suggest "that which is in the very essence or constitution of a thing". It follows that we consider that the adoption of the phrase "essential character" indicates clearly that the mere visual apparent character of an article was not the concept to which the attention of the By-Law was being directed. Rather a concept of essentiality was involved, in which it is necessary to establish what the article really is.[11]

In the cases of Putale and Zyfert[12] in the Federal Court of Australia the goods requiring classification were cars which were complete except for gear boxes and engines. Sheppard J said:

… the bodies in the Zyfert case lack motive power. They have no engines or gearboxes. … how can it be said, incomplete or unfinished though the vehicles may be, that they have the essential character of assembled motor vehicles? They have no motive power, which by any dictionary definition such vehicles must have …

Both Putale and Zyfert were appealed and separate benches of the Full Federal Court of Australia upheld the decision of Sheppard J.

20. In footnote 21 to paragraph 24, in describing the essential character of a motor vehicle, Australia cites to two Australian federal court decisions. Could Australia please provide copies of these decisions.

Copies of these decisions attached.

IV. Specific Questions to Japan

21. China has asserted in this dispute that the charges are imposed after the parts have conditionally entered (instead of unconditionally entered) in its territory to support its claim that they are ordinary customs duties. Please elaborate on your statement that the challenged measures fall under Article III of the GATT because they are not imposed conditional "merely" on importation of the parts (paragraph 10 of Japan's written submission).

22. Please elaborate on your statement that "the fact that the measures require some action at the time of importation does not mean that they are border measures." (paragraph 16 of Japan's written submission, emphasis added).

23. Please elaborate on your statement in paragraph 41 of your written submission, in particular on the issue of how much value is added to the assembling process of CKD or SKD kits. How is your answer relevant to the question of whether certain imported parts and components have the "essential character" of a complete product pursuant to Rule 2(a) of the General Rules for the Interpretation of the HS?

24. Paragraph 9 of the oral statement of Japan indicates that "the test concerning Article II and III is an autonomous test the outcome of which is not determined by the choice of Members to treat the measures as 'customs measures' or 'internal regulations' for domestic administrative or regulatory purposes." Which components are considered relevant for this test? In this respect, in your view, are the elements provided by Brazil in paragraph 8 of its oral submission helpful and/or comprehensive?

V. Specific Questions to Mexico

25. In paragraph 137 of its first written submission China refers, inter alia, to Mexico's anti-circumvention measures in respect of anti-dumping and countervailing duties. Can Mexico confirm whether these measures are still in place and elaborate upon these and point in particular to the elements which distinguish them from the Chinese measures in question.

Are you aware of any such practice maintained by any other WTO Members?

26. The Panel notes Mexico's statement in paragraph 3 of its written submission that the challenged measures violate, inter alia, the SCM Agreement. However, unlike the claims under GATT, TRIMs and the Accession Protocol of China, Mexico does not elaborate on its arguments in relation to the SCM claims. Could Mexico please elaborate on its assertion that the measures violate the SCM Agreement?


[1]This response does not cover the special situation of split shipments/split consignments. Australia currently has provisions to allow for split shipments to be classified as one item, in limited circumstances. See response to question 4 below.

[2]Australia’s response to this question is based solely on paragraph 160 of China’s first written submission as Australia has not seen paragraph 13 of China’s oral statement.

[3] Article 7(b) of the International convention on the Harmonised Commodity Description and Coding System.

[4] Australia adopted this recommendation in 2001.

[5] Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/AB/R, para. 133.

[6] Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, p. 14.

[7]Chinese Food Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591 at 599.

[8] Times Consultants Pty Ltd v Collector of Customs (1987) 76 ALR 313 at 327.

[9]Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994.

[10] Re Renault (Wholesale) Pty Ltd and Collector of Customs (No 3) (1978) 2 ALD 111 at 116

[11] Re Phillips and House Group and Collector of Customs (1979) 2 ALD 704 at 708

[12] Putale Pty Ltd v Collector of Customs (N.S.W.) (1982) 5 ALD 156: Zyfert v Minister for Industry and Commerce (1982) 5 ALD 156

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