Australia and WTO Dispute Settlement

United States Lamb Safeguards: Appellate Body Findings

The Appellate Body upheld all of the Panelís findings that the United States safeguard measure was inconsistent with its obligations under the GATT 1994 and the Agreement on Safeguards.†

The Appellate Body also upheld Australiaís claim that the United States acted inconsistently by failing to demonstrate a threat of serious injury.

The Appellate Body ruled that the United Statesí investigation into the impact of imports on its domestic sheepmeat industry had contained a number of serious flaws.†

Of key significance was that the US had failed to prove that imports were in fact the cause of the injury to its industry.† The Appellate Body ruled that the USís approach did not establish clearly that factors other than imports could have been responsible for the injury.

In addition, the Appellate Body found that the US had not demonstrated that the increase in imports was unexpected; that its definition of the affected US industry was too broad and; that the data it had collected in the investigation was an inadequate basis on which to support its conclusions.

Taken together, the Appellate Body ruled that these flaws negated the conclusion of the investigation that imports were causing injury and that restrictions were justified.

On this basis, the Appellate Body recommended that the United States bring its safeguard measure into conformity with its obligations under the GATT 1994 and the Safeguards Agreement.