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WTO disputes

European Communities – Export Subsidies on Sugar - WT/DS 265

World Trade Organization - Panel established pursuant to Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes

Australia - Rebuttal Submission

21 April 2004

CONTENTS

DISPUTE SETTLEMENT CASES CITED IN THIS SUBMISSION

I. INTRODUCTION

II. PROCEDURAL ISSUES

A. Terms of Reference

1. Article 10.1 of the Agriculture Agreement

a. The EC did not raise its concerns in regard to alleged deficiencies in a seasonable and prompt manner

b. Australia did not identify exports of sugar by private parties as a "measure"

c. Australia has sufficiently identified the specific measures at issue

2. 'ACP/India equivalent' Sugar

B. Burden of Proof

III. ISSUES OF LEGAL INTERPRETATION

A. The EC provides Export Subsidies to 'C' Sugar

1. Agriculture Agreement Article 9.1(c)

a. Article 9.1(c) does not require that financing through price support to 'A' and 'B' quota sugar be contingent on the export of 'C' sugar

b. The EC incorrectly dismisses the application of the jurisprudence of Canada-Dairy

c. In the context of the application of Article 9.1(c) the factual situation in regard to 'C' sugar is even more compelling than that of Canada-Dairy

d. Cross-subsidies provided from price support are captured by WTO definitions of subsidies contingent on export performance

e. Payments by private parties come within the definitional scope of Article 9.1(c)

f. A payment has been made on the export

g. A payment has been made on the export of 'C' sugar which is financed by virtue of governmental action

2. Agriculture Agreement Article 10.1.

a. Export subsidies coming within the definition of Item (d) of the Illustrative List

b. Export subsidies coming within the definition of Article 1.1 of the Subsidies Agreement

3. Subsidies Agreement Article 3.1(a) and 3.2.

B. The EC applies Export Subsidies to 'ACP/India Equivalent' Sugar

1. Article 9.1(a) of the Agriculture Agreement

a. The scheduling of export subsidy reduction commitments did not involve bilateral offer and request negotiations. Neither the Agriculture Agreement nor the Modalities paper provide for exceptions from reduction commitments for developed countries

b. The unilateral inclusion of a Footnote to a schedule does not serve to cure an inconsistency with the Agriculture Agreement

c. The terms of the Footnote do not constitute a reduction commitment

d. 'ACP/India equivalent' sugar is not covered by the terms of the Footnote

2. Subsidies Agreement Article 3.1(a) and 3.2.

IV. THE EC NULLIFIES AND IMPAIRS BENEFITS ACCRUING TO AUSTRALIA UNDER THE AGRICULTURE AND SUBSIDIES AGREEMENTS

V. GOOD FAITH/ESTOPPEL

A. 'C' Sugar

1. Unreasonable exercise of rights

2. Estoppel

B. 'ACP/India equivalent' Sugar

VI. CONCLUSIONS

EXHIBITS

DISPUTE SETTLEMENT CASES CITED IN THIS SUBMISSION

Short Title Full Title

Argentina-Poultry AD Duties

Argentina – Definitive
Anti-Dumping Duties on Poultry from Brazil
, WT/DS241/R, Panel
Report

Canada-Dairy First Appellate
Body Report

Canada – Measures affecting
the importation of milk and the exportation of dairy products

WT/DS103/AB/R, Appellate Body Report

Canada-Dairy First Article
21.5 Appellate Body Report

Canada – Measures affecting
the importation of milk and the exportation of dairy products

WT/DS103/AB/RW First Article 21.5 Appellate Body Report

Canada-Dairy First Article
21.5 Panel Report

Canada – Measures affecting
the importation of milk and the exportation of dairy products

WT/DS103/RW First Article 21.5 Panel Report

Canada-Dairy First Panel
Report

Canada – Measures affecting
the importation of milk and the exportation of dairy products

WT/DS103/R, Panel Report

Canada-Dairy Second Article
21.5 Appellate Body Report

Canada – Measures affecting
the importation of milk and the exportation of dairy products

WT/DS103/AB/RW2, Second Article 21.5 Appellate Body Report

Canada-Dairy Second Article
21.5 Panel Report

Canada – Measures affecting
the importation of milk and the exportation of dairy products

WT/DS103/RW2 Second Article 21.5 Panel Report

Chile-Price Band

Chile – Price Band System
and Safeguard Measures relating to certain Agricultural Products
,
WT/DS207/AB/R, Appellate Body Report

EC-Bananas

European Communities - Regime
for the Importation, Sale And Distribution Of Bananas
, WT/DS27/AB/R,
Appellate Body Report

EC-Poultry

European Communities Measures
Affecting the Importation of Certain Poultry Products
, WT/DS69/AB/R
Appellate Body Report

EEC-Bananas

EEC – Member States' Import
Regimes for Bananas
, DS32/R , Panel Report, not adopted

GATT Sugar Panel Report

European Communities –
Refunds on exports of sugar
GATT Panel report L/4833

Guatemala Cement II

Guatemala – Definitive
Anti-Dumping Measures on Grey Portland Cement from Mexico
,
WT/DS156/R, Panel Report

India–Autos

India – Measures Affecting
the Automotive Sector
, WT/DS146/R, WT/DS175/R, Panel Report

Mexico-High Fructose Corn Syrup

Mexico – Anti-Dumping Investigation
of High Fructose Corn Syrup (HFCS) from the United States
,
WT/DS132/AB/RW, Article 21.5 Appellate Body Report

US–Continued Dumping and
Offsets Act

United States – Continued
Dumping and Offsets Act of 2000,
WT/DS217/AB/R, Appellate
Body Report

US-Cotton Yarn

United States – Transitional
Safeguard Measures on Combed Cotton Yarn from Pakistan
, WT/DS192/AB/R,
Appellate Body Report

US-FSC

United States – Tax Treatment
of Foreign Sales Corporations
WT/DS108/AB/R, Appellate Body
Report

US-Shrimp

United States – Import
Prohibition of Certain Shrimp and Shrimp Products,
WT/DS58/AB/R,
Appellate Body Report

Thailand-Steel

Thailand – Anti-Dumping
Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel
and H-Beams from Poland
, WT/DS122/AB/R Appellate Body Report

Turkey-Textiles

Turkey-Textiles, Appellate
Body Report, WT/DS34/AB/R

I. INTRODUCTION

1. The purpose of this submission is to rebut the arguments presented by the EC in its First Written Submission, its statements at the first meeting of the Panel and its preliminary oral replies to Questions from the Panel.

2. In addition to this document, Australia wishes to incorporate as part of its rebuttal, the statements made by Australia at the first meeting of the Panel and the written responses to the Questions. The responses will be provided separately.

3. Australia considers that there are few outstanding factual differences between Australia and the EC, except for conflicting statistical data supplied by the EC and apparent contradictions in the EC's description of commitments applying to 'ACP/India equivalent' sugar.

4. As noted in paragraphs 3 to 5 of Australia's Oral Statement of 30 March, this dispute is not a test case. The issues are not new to dispute settlement and have been clarified on several occasions in adopted findings of panels and the Appellate Body. The jurisprudence is clear and compelling. The factual situation is comparable to that of several other disputes examined by panels and the Appellate Body.

5. Australia also reiterates that this complaint is not directed at and does not affect the preferential access of ACP countries and India to the EC market. Australia emphasised this point at the Consultations and again in its Closing Statement at the first oral hearing.

II. PROCEDURAL ISSUES

A. Terms of Reference

6. The EC has raised two issues relating to the Panel's terms of reference in its First Written Submission:

  • in regard to Article 10.1 of the Agriculture Agreement (paragraphs 69 to 72)
  • in regard to 'ACP/India equivalent' sugar (paragraphs 162, 196 and 205.4).

1. Article 10.1 of the Agriculture Agreement

7. In paragraphs 69 to 72 of its First Written Submission, the EC asserts that Australia's claim in respect of Article 10.1 of the Agriculture Agreement is outside the terms of reference of the Panel. The EC argued that Australia failed to identify "the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly", as required by Article 6.2 of the DSU.

8. The EC's purported basis for this so-called failure is that Australia had identified (a) exports of sugar by private parties as measures; and (b) because Australia had referred to Council Regulation 1260/2001, as compared to identifying the specific elements of the EC sugar regime which provide export subsidies.[1]

9. In paragraph 72 of its First Written Submission, the EC goes on to state - in contradiction of its assertion in paragraph 71 - that while Australia has claimed that 'C' sugar exports are subsidised because they are made at prices below the average total cost of production, Australia's Panel request contains "no trace of the separate and distinct claim that the 'exemption' of 'C' beet from the minimum prices for A and B beet provides an export subsidy to the sugar producers".

a. The EC did not raise its concerns in regard to alleged deficiencies in a reasonable and prompt manner

10. As noted in Australia's response to Question 4, the EC refrained from raising any concerns in regard to alleged deficiencies in Australia's Panel request until six months after panel establishment and more than two months after the Panel was composed. The EC did not raise any concerns on panel establishment, nor did it seek a preliminary ruling at an early stage of the Panel processes, which it has done in recent disputes in which it is involved as a respondent. Instead, the EC waited until its First Written Submission to raise concerns in regard to Article 10.1.

11. In this regard, Australia recalls the statement of the Appellate Body in Thailand – Steel that:

nothing in the DSU prevents a defending party from requesting further clarification on the claims raised in a panel request from the complaining party, even before the filing of the First Written Submission.[2]

12. Nor did the EC seek to discuss the issue with Australia, in the context of the opportunity provided by Article 7 of the DSU to vary the standard terms of reference.

13. In regard to the provisions of Article 3.10 of the DSU the Appellate Body has clarified that responding Members must act promptly in identifying procedural deficiencies:

The same principle of good faith requires that responding Members seasonably and promptly bring claimed procedural deficiencies to the attention of the complaining Member, and to the DSB or the Panel, so that corrections, if needed, can be made to resolve disputes[3].

b. Australia did not identify exports of sugar by private parties as a "measure"

14. As is clear from Australia's Panel request, Australia identified the "measures" as the subsidies provided by the EC in excess of its reduction commitment levels for sugar and sugar containing products.[4]

15. Australia's panel request goes on to identify the operations of the EC sugar regime as the governmental measures delivering the subsidies and their specific application to 'C' sugar. Paragraphs 6 and 7 of the panel request elaborate on the operation of the regime and the way in which the regime cross-subsidises 'C' sugar. As is clear from paragraph 7 of the panel request, Australia describes the way in which 'C' sugar exports are financed.

16. The EC is confusing claims with arguments. The "exemption of C beet from the minimum prices for A and B beet" does not constitute a claim, but forms part of Australia's arguments in support of its claims in the alternative that the EC is applying export subsidies to 'C' sugar other than Article 9.1 listed export subsidies in a manner which circumvents the EC's obligations under Article 10.1 of the Agriculture Agreement. As noted by the Appellate Body in EC – Bananas:

Article 6.2 of the DSU requires that the claims, but not the arguments, must all be specified sufficiently in the request for the establishment of a panel in order to allow the defending party and any third parties to know the legal basis of the complaint.[5]

c. Australia has sufficiently identified the specific measures at issue

17. Australia refers to paragraphs 52 to 54 of its Oral Statement of 30 March and its response the Panel Question 4. The architecture and structure of the EC sugar regime provides an integrated regulatory system – including for 'C' sugar – for the purposes of delivering price support to EC beet growers and sugar processors through the interaction of various elements of the regime. The EC itself acknowledges the integrated nature of the regime, which one EC representative has described as comprising a number of inseparable interwoven "threads".

18. Australia also notes that the EC would fail to meet its own standard given that, on a number of occasions it has used comparable language in Panel requests, for example: "any other implementing measures"; "other relevant documents"; "any implementing measures thereof and all other related measures"; any implementing decrees and other regulations"; and any implementing measures taken hereunder".[6]

2. 'ACP/India equivalent' Sugar

19. The EC asserts that a "subsidiary claim" of Brazil and Thailand – with respect to the exact terms of the Footnote to the EC Schedule – are outside the Panel's terms of reference because the "claim" was not made in the request for Panel establishment.

20. Australia refers to its response to Panel Question 4. The issue is unrelated to Article 6.2 of the DSU. The EC assertion constitutes an attempt to re-define a measure at issue as the Footnote. Australia notes that the EC, in its First Written Submission, deliberately avoids claims of inconsistency arising from the export subsidies granted to 'ACP/India equivalent' sugar. Instead, it redefines the measure as the 'Footnote'.[7]

21. As the EC has itself acknowledged, 'ACP/India equivalent' sugar does not come within the description of the Footnote. The EC is however, seeking to argue justification – through the Footnote – for non-compliance with its export subsidy reduction commitments under the Agriculture Agreement. As such, the EC is again confusing claims with arguments.

22. As noted in Australia's response to Panel Question 4, Australia considers that there is nothing to prevent a complainant from anticipating a rebuttal argument by a respondent. As the EC itself has raised the Footnote as justification for non-compliance with its obligations, the complainant parties are entitled to provide rebuttal arguments in that context.

B. Burden of Proof

23. Australia has clearly demonstrated that the EC is exporting sugar in excess of its scheduled reduction commitments. In accordance with the provisions of Article 10.3 of the Agriculture Agreement, if the EC is claiming that none of those quantities are subsidised, the EC has the burden of proof under the Agriculture Agreement to establish that no export subsidies – whether Article 9.1 listed or not – are being granted on the quantities in excess of its reduction commitments.

24. As the EC has claimed that it is not granting export subsidies on the export of 'C' sugar, the burden of proof clearly rests with the EC to establish that no export subsidies are being granted to 'C' sugar exports. The EC has failed to meet its burden of proof in that regard.

III. ISSUES OF LEGAL INTERPRETATION

A. The EC provides Export Subsidies to 'C' Sugar

1. Agriculture Agreement Article 9.1(c)

25. Although not required to do so, Australia has presented evidence in support of arguments that the EC is providing export subsidies to 'C' sugar within the meaning of Article 9.1(c). Australia has shown that EC export subsidies on 'C' sugar are in excess of the EC's scheduled commitments and are inconsistent with the EC's obligations under Articles 3.3, 8 and 9.1(c) of the Agriculture Agreement.

26. The EC does not contest that the quantities of 'C' sugar exported are in excess of its scheduled reduction commitments. The EC has not disputed the factual and economic evidence put forward by Australia that 'C' sugar is being exported at below the total average cost of production.

27. Nor has the EC disputed that the EC sugar regime requires the export of 'C' sugar (unless carried over within prescribed limits and reclassified as quota sugar).

28. Nor, seemingly, does the EC dispute that the losses on 'C' sugar are being financed by the price support provided for quota sugar to the same producer under the EC sugar regime.

29. Instead, the EC disputes the application of Article 9.1(c) on interpretative grounds. The EC "rebuttal" in this regard involves an assertion that Australia "agreed' to the exclusion of 'C' sugar from its scheduled reduction commitments, seemingly because Australia knew that 'C' sugar exports were not included in the EC base commitments in its schedule, but should have been, and that the non-inclusion of 'C' sugar was a "shared and excusable error".[8]

a. Article 9.1(c) does not require that financing through price support to 'A' and 'B' quota sugar be contingent on the export of 'C' sugar

30. In paragraphs 36 to 45 of it First Written Submission, the EC argues that Article 9.1(c) should be interpreted in a way that the financing of the payment must be of a kind that is contingent on the export of the sugar in question.

31. In paragraph 42 of its First Written Submission, the EC incorrectly ascribes a test of Article 9.1(c) requiring that the financing provided by the EC to 'C' sugar exports be contingent on such exports.

32. In so doing, the EC collapses the export subsidy definition of Article 9.1(c) into one single element, i.e. that the governmental action constitutes the subsidy.

33. On the contrary, the export subsidy definition of Article 9.1(c) comprises three elements: (a) a payment; (b) a payment on the export; and (c) which is financed by virtue of governmental action.

b. The EC incorrectly dismisses the application of the jurisprudence of Canada-Dairy

34. The EC dismisses the application of the relevant jurisprudence of Canada-Dairy. In paragraph 53 of its First Written Submission, the EC asserts that the Appellate Body's consideration of Article 9.1(c) in Canada-Dairy is irrelevant in this case because a different factual situation exists. It is difficult to discern the distinction which the EC is attempting to draw. In paragraph 53 of the EC's First Written Submission it states that "Canada – Dairy stands for the proposition that the provision of an agricultural input below its average total cost of production constitutes a "payment" to the processor of that input". This appears to be a distinction on the basis of the degree of processing of the product.

35. In the first place, there is no basis in Canada-Dairy for the EC's conclusion that the legal reasoning and conclusions in that case were limited to the specific case of subsidised inputs for processing. The citations mentioned serve only to explain the factual situation existing in the Canada-Dairy case. They in no way directly state or imply the limitation the EC is asserting.

36. Canada-Dairy dealt with the provision of export subsidies under the Agriculture Agreement. It interpreted the precise Article in the Agriculture Agreement that the Complainants have argued is being breached in the present case. If the EC's assertion was to be accepted no Appellate Body or Panel reports would be considered relevant because of differing factual situations. While significant factual differences may go to the applicability of the legal tests set out in a particular case, it is illogical to dismiss the entire Canada-Dairy reports on the basis of minor factual differences, as discussed in Australia's answer to Panel Question 42.

37. Second, even if Canada-Dairy were to be construed in such a limited manner it is clear that the present case fits directly within the scope of Canada-Dairy. Specifically, it can be shown that an agricultural product is being provided at below its average total costs of production to a processor for export in a processed product. In this way a 'payment' has been made, as discussed below.

38. Third, there are many similarities between the milk regime in Canada-Dairy and the sugar regime in the present case, as elaborated in Australia's Oral Statement of 30 March[9] and in answer to Panel Question 42. In summary, both are quota based systems delivering price support; in both cases the product at issue is manufactured from a primary product; the product had to be exported; 'governmental action' provides for the supply of the primary product at prices below that for which the same product may be sold on the domestic market and in both cases the primary product was sold at below the average total cost of production and the losses financed by the governmental action.

c. In the context of the application of Article 9.1(c) the factual situation in regard to 'C' sugar is even more compelling than that of Canada-Dairy

39. The Appellate Body in Canada-Dairy emphasised the importance of maintaining the distinction between the domestic support and export subsidies disciplines in the Agriculture Agreement, as noted in Australia's response to Panel Question 44. The Appellate Body determined in that case that Canada had not maintained the distinction between the two disciplines in its milk regime. The regime undermined the benefits intended to accrue through the export subsidy obligations. The tests applied by the Appellate Body established this legally.

40. In the present case the arguments are even more compelling. The EC is significantly eroding the rights of other WTO Members accruing from its export subsidy commitments and obligations under the Agriculture Agreement. The level of 'C' sugar exports, and the EC's overall sugar exports have increased over the period 1995 to the present, and they have increased because the EC has failed to respect the twin disciplines under the Agriculture Agreement. As Australia notes in answer to Panel Question 42, unlike in the Canadian milk regime, in the EC sugar regime there are no independent producers of either 'C' beet or 'C' sugar. The cross-subsidisation is total. Thus, all 'C' sugar is exported at prices below cost of production with the losses financed from the sales of quota sugar in the domestic and export market with the benefit of EC price support.

41. The level of 'C' sugar production as a percentage of total production is much higher than in the Canadian dairy regime. The difference between the costs of production and the returns on 'C' sugar is also higher, so that the level of cross-subsidisation is greater.

42. The EC has complained, unjustifiably as Australia has demonstrated, that the complaint would make a legitimate domestic support regime illegal. This argument ignores the real need to maintain the distinction between the two disciplines in the Agriculture Agreement. There are many options available to the EC to deliver support in accordance with the Agriculture Agreement.

d. Cross-subsidies provided from price support are captured by WTO definitions of subsidies contingent on export performance

43. In conflict with the jurisprudence of Canada-Dairy, the EC's arguments rest on the proposition that domestic price support can never form part of an export subsidy definition within the meaning of Article 9.1(c).

44. On the contrary, subsidisation of exports though legitimate price support has long been captured by WTO export subsidy definitions since the early days of GATT. As Australia noted in Panel Question 54, it is not the system of income or price support that constitutes a subsidy contingent on export performance, but whether such support – in whole or in part - comes within the definitional scope of an export subsidy within the meaning of Article 9.1(c) of the Agriculture Agreement.

e. Payments by private parties come within the definitional scope of Article 9.1(c)

45. In paragraphs 56 to 62 of the EC's First Written Submission, the EC seemingly considers that payments by private parties are outside the scope of Article 9.1(c) and that the interpretation advanced by Australia – which finds support in the Canada–Dairy jurisprudence – would constitute "a sort of blunt anti-dumping instrument". In support of this assertion, the EC attempts to apply a test that a payment must involve a "benefit". Australia notes however that, at the Oral Hearings, the EC was not prepared to confirm whether or not a "benefit" should attach to a "payment". On this point Australia refers to its responses to Panel Questions 49 and 55.

46. The EC ignores the three elements in the definition of an export subsidy under Article 9.1(c). The subsidy is not found in the payment itself, but in regard to the three elements, taken together, which comprise the export subsidy definition of Article 9.1(c), i.e. where there is a 'payment' 'on the export' which is financed by virtue of governmental action.

f. A payment has been made on the export

47. The EC does not contest that 'C' sugar is exported at below the total average cost of production, within the meaning of the benchmark applied by the Panel and Appellate Body in Canada-Dairy Second Article 21.5 report. However, in paragraphs 63 to 65 of its First Written Submission, the EC asserts that the payments "are not contingent on exports" and goes on to incorrectly ascribe to Australia an interpretation that the "payments themselves are exports".

48. The EC's sole argument in that regard rests on the assertion that domestic support cannot form part of export subsidisation. Australia has already rebutted such arguments above.

49. As noted in Australia's response to Panel Questions 43 and 44, the payments on 'C' sugar are made on the export. 'C' sugar must be exported unless it is carried over. The export of 'C' sugar is an essential element of the EC sugar regime. The price support the regime delivers to both quota and non-quota sugar, is linked to the production and export of 'C' sugar, hence any financing it delivers to 'C' sugar is made contingent on it being exported. 'C' sugar exports have persistently been a significant structural component of EC sugar production. In the decade to 2001-02, 'C' sugar exports have fluctuated around 17 per cent of the combined A and B quota for the EC.[10]

50. Australia has shown that production of 'C' beet and 'C' sugar is due in part to the need for producers to insure their quota receipts and in part to the profits derived from A and B sugar and the consequent profits made on the marginal production costs of 'C' sugar.[11] Beet and sugar producers do not decide to produce and export 'C' sugar through market based decisions.

51. As set out in paragraph 123 of Australia's First Written Submission, 'C' sugar is regarded by the EC as a factor in market balance, fulfilling the market stabilisation objectives of the sugar regime. This is relevant in regard to the requirement that the payments be made 'by virtue of governmental action' but is also clearly relevant to the requirement that payments be made 'on the export'. The payments made to 'C' sugar, which have already been shown by Australia to be made 'by virtue of governmental action', are made on the export because they are contingent and dependent on 'C' sugar being exported.

g. A payment has been made on the export of 'C' sugar which is financed by virtue of governmental action

52. In order for the 'payment on the export' outlined above to constitute an export subsidy in accordance with Article 9.1(c) such payments must be financed 'by virtue of governmental action'. It is this additional requirement which makes the rule not a per se anti-dumping rule, as advanced by the EC. The 'demonstrable link' and 'clear nexus' between the payments and the governmental action, required by the Appellate Body, is well established in this case. Australia's First Written Submission in paragraphs 114 to 134 sets out the extensive governmental action and the demonstrable link with the payments in the case of 'C' sugar. In summary, the EC maintains the domestic supply controls including quotas and import restrictions, the EC delivers the income and price support to producers and allows producers to produce surplus to quota sugar and requires them to sell all 'C' sugar production (less permitted carryover) on the export market. The production and export of subsidised 'C' sugar is therefore the foreseeable and direct result of the EC's 'governmental action'.

2. Agriculture Agreement Article 10.1

53. Australia's claims in regard to Article 10.1 relate to alternative claims in the event that the Panel finds that the export subsidies being provided to 'C' sugar do not come within the definitional scope of Article 9.1(c).

54. In accordance with the provisions of Article 10.3, the EC has the burden of proof to demonstrate that no export subsidies coming within the scope of Article 10.1 (that is, export subsidies other than Article 9.1 listed subsidies) are being applied to 'C' sugar.

55. In its First Written Submission, Australia provided comprehensive argumentation that the export subsidies on 'C' sugar come within the definitional scope of an export subsidy, within the meaning of Item (d) of the Illustrative List of the Subsidies Agreement or alternatively, within the meaning of Article 1.1(a)(2) of the Subsidies Agreement.[12]

56. The EC has not contested the circumvention element of Australia's claim in regard to the application of Article 10.1.

a. Export subsidies coming within the definition of Item (d) of the Illustrative List

57. The EC's "rebuttal" is that the EC does not compel or require beet growers to grow or sell beet to exporters.[13]

58. The EC's interpretation suggests that the export subsidy definition should be restricted to state trading operations. The relative freedom of a beet grower to grow 'C' beet does not form part of the tests of Item (d). Instead, the test relates to whether the EC mandates the production of 'C' beet to exporters on the same terms as beet sold on the domestic market. This is clearly not the case. 'C' beet does not benefit from the fixed minimum price guarantee for quota beet and cannot be used to produce sugar for sale on the domestic market.

59. Further, in regard to the EC's assertion that the price of 'C' beet is freely agreed between the grower and processor[14], Australia notes that the EC sugar regime in fact provides for the regulation of 'C' beet prices.[15]

b. Export subsidies coming within the definition of Article 1.1 of the Subsidies Agreement

60. In its First Written Submission, Australia argued, in the alternative, that the export subsidies on 'C' sugar come within the definitional scope of Article 1.1(a) of the Subsidies Agreement.[16]

61. The EC "rebuttal" in its First Written Submission[17], is premised on the same legally incorrect arguments that it has used in relation to Article 9.1(c) of the Agriculture Agreement, viz, that the "contingency" must attach to the provision of price support, as compared to a "contingency" attached to export. As noted in paras 171-172 of Australia's First Written Submission, Article XVI of GATT 1994 is not predicated on the subsidy being contingent on export. On the basis of a plain reading of Article XVI of GATT 1994, it is the operation of the income or price support in increasing exports.

62. As noted in paragraphs 146-148 of Australia's First Written Submission, export subsidy definitions in the Subsidies Agreement provides contextual guidance on the definition of an export subsidy for the purposes of Article 10.1 of the Agriculture Agreement, as does Article 1.1 of the Subsidies Agreement (for the purposes of a definition of a subsidy).

63. In the context of Article 1.1 of the Subsidies Agreement, Article 1.1(a)(2) makes it clear that income or price support in the sense of Article XVI of GATT 1994 comes within the scope of a subsidy definition. For the purposes of those export subsidies listed in Annex I (Illustrative List) of the Subsidies Agreement and by way of illustration, the element of subsidisation provided through price or income support forms part of an export subsidy in the circumstances described in Items (b), (d) and (l) of the Illustrative List. Read in the context of Article 3.1(a) of the SCM Agreement, all subsidies included in the Illustrative List constitute 'subsidies contingent on export performance' in the circumstances defined in the respective items. The income or price support does not need to be provided exclusively for exports. For instance, in the case of Item (b), a currency retention scheme is not in itself an export subsidy; rather, it constitutes an export subsidy if it involves a bonus on exports.

64. In the context of Item (l) of the Illustrative List, theexport subsidy definitions of Article XVI:1 of GATT 1994 confirm that income or price support may constitute an export subsidy in circumstances where such support "operates directly or indirectly to increase exports of any products from ... its territory". It is the operation of the system in regard to exports that constitutes a subsidy contingent on export performance.

65. Also within the context of Item (l) of the Illustrative List, Article XVI:3 of GATT 1994, including the Ad Note, confirms that any form of subsidy which operates to increase the export of a primary product would constitute an export subsidy contingent on export performance. Indeed, the Ad Note to Article XVI:3, paragraph 2, directly addresses the situation in regard to 'C' sugar, in that the arrangements involve:

  • a system of price stabilization or of the return to domestic producers of a primary product independently of the movements of export prices;
  • which results in the sale of the product for export at a price lower than the price charged for the like product to buyers in the domestic market;

and

  • where the operations of that system are wholly or partly financed out of government funds in addition to the funds collected from producers in respect of the product concerned.

66. Article XVI:4 of GATT 1994 would also capture such forms of subsidy, in circumstances where such subsidy results in the sale of a product for export at a price lower than the comparable price charged for the like product to buyers in the domestic market.

3. Subsidies Agreement Article 3.1(a) and 3.2

67. In regard to the application of the Subsidies Agreement to 'C' sugar exports; Australia refers to its arguments in paragraphs 187-195 of its First Written Submission and to paragraphs 58-68 of this Rebuttal Submission, which incorporates by reference Australia's arguments in regard to Article 10.1 of the Agriculture Agreement.

68. Australia has made a prima facie case of inconsistency with the provisions of Article 3.1(a) and 3.2.

69. The EC's "rebuttal" in paragraphs 150-154 of its First Written Submission, includes some factual inaccuracies. In paragraph 150, the EC asserts that Australia's claim rests on an inconsistency with the Agriculture Agreement. On the contrary, Australia has argued inconsistency with specific provisions of the Subsidies Agreement because it considers that the EC is acting inconsistently with its obligations under the provisions of that Agreement.[18]

70. In regard to the EC's assertion in paragraph 151 of its First Written Submission that all of the Complainants consider that export subsidies maintained consistently with the Agriculture Agreement cannot be subject to the Subsidies Agreement, nowhere did Australia put forward such a proposition. Instead, Australia's arguments in relation to the application of the Subsidies Agreement relate, inter alia, to inconsistency with the provisions of the Agriculture Agreement.

71. As noted in Australia's response to Panel Question 1, Australia agrees with Brazil and Thailand that the chapeau to Article 3 of the Subsidies Agreement serves to clarify the application of that Agreement's export subsidy prohibitions to agricultural products. Australia also considers that Article 13 (c)(ii) of the Agriculture Agreement lends support to the generally accepted interpretation – as clarified in adopted Panel and Appellate Body findings – that the Subsidies Agreement applies to agricultural products.[19]

B. The EC applies Export Subsidies to 'ACP/India Equivalent' Sugar

1. Article 9.1(a) of the Agriculture Agreement

72. The EC has confirmed that it is applying export subsidies to 'ACP/India equivalent' sugar within the meaning of Article 9.1(a) of the Agriculture Agreement.[20]

73. This admission accords with the historical record. In a letter of 14 December 1993 from the then EC Permanent Representative to the GATT Director General the EC stated that "On export competition, the EC has not indicated the volume and budget outlays for sugar corresponding to its import of sugar from ACP countries and India. The European Communities will not take commitments on this part of its sugar exports."[21]

74. The EC also does not contest that subsidised exports of 'ACP/India equivalent' sugar are in excess of its scheduled budgetary and quantity outlay commitments. Instead, the EC "rebuttal" involves an assertion that Australia has "agreed" to the Footnote to the Schedule and accepted the Footnote as part of the Final Act.

a. The scheduling of export subsidy reduction commitments did not involve bilateral offer and request negotiations. Neither the Agriculture Agreement nor the Modalities paper provide for exceptions from reduction commitments for developed countries

75. The EC mistakenly characterises the scheduling of export subsidy reduction commitments as being conducted on a bilateral offer and request basis.

76. In paragraph 94 of its First Written Submission, the EC asserts:

The participants in the Uruguay Round could negotiate departures from the reduction formulae agreed in the Modalities Agreement. Indeed Footnote 1 of the EC's schedule constitutes one such departure.

77. The EC does not cite any relevant provision of the Modalities paper that would have permitted it to adopt a lesser obligation than that expressed in the language of paragraphs XI and XII. Nor does the EC assertion find support in Annexes 7 or 8 of the Modalities paper. Indeed, the Modalities paper is predicated on multilateral basic commitments.

78. The reduction commitments are multilateral in nature and do not constitute negotiated concessions. Unlike the access commitments, they were 'self-contained' in regard to the balance of concessions.

79. As provided in paragraphs XI and XII of the revised Modalities paper[22], the reduction commitments were not made contingent on concessions in other areas of the agriculture negotiations.[23] Apart from the additional commitment provisions of paragraph 10 of Annex 8 of the paper, which finds reflection in Article 9.3 of the Agriculture Agreement, all commitments for developed countries were expressed in compulsory language.

80. Australia notes that paragraph 7 of Annex 8 refers to "the scope for negotiating commitments on particular products within groups of products", in relation to the product coverage specified in paragraph 7. Paragraph 7 does not lend support to any notion that 'ACP/India equivalent' sugar - which the EC has acknowledged is quota sugar - might be distinguished from other quota sugar within a quantitative category.

81. Further, there is no provision in the Agriculture Agreement which provides for lesser reduction commitments for developed WTO Members in respect of any product or sub-category of a product.

82. The situation in regard to export competition can be compared to the provisions relating to market access and domestic support. It is noteworthy that, in the export competition section of the Agriculture Agreement, there is no counterpart provision to that of Annex 5, which allows for 'special treatment' in regard to products that were required to be tariffied in accordance with the provisions of Article 4.2. Even then, participants taking advantage of the 'special treatment' provisions of Annex 5 did not seek to avoid their Article 4.2 obligations either unilaterally or through bilateral negotiations. The multilateral cover was recorded in Annex 5 and, was paid for, by additional undertakings in regard to a product that was not tariffied (Article 1.1 of Annex 5).

83. If the EC is claiming that Australia somehow "agreed" to a departure from its export subsidy reduction commitments for sugar, why was this never recorded in a document, and what was the offsetting compensation provided to Australia?

84. Further, if the EC considers there was multilateral agreement for such departure, why is there no provision relating to EC sugar in the "General Agreement on Tariffs and Trade 1994" in Annex 1A of the WTO Agreement comparable to Article 3(a) of the Agreement.

b. The unilateral inclusion of a Footnote to a schedule does not serve to cure an inconsistency with the Agriculture Agreement

85. On the basis of the EC's interpretation of the Footnote, the Footnote to the EC's Schedule purports to diminish obligations under the Agriculture Agreement. Under Article 3.1 of the Agriculture Agreement "domestic support and export subsidy commitments in Part IV of each Member's Schedule constitute commitments limiting subsidization and are hereby made an integral part of GATT 1994." Article 3.3 further sets out that:

Subject to the provisions of paragraphs 2(b) and 4 of Article 9, a Member shall not provide export subsidies listed in paragraph 1 of Article 9 in respect of the agricultural products or groups of products specified in Section II of Part IV of its Schedule in excess of the budgetary outlay and quantity commitment levels specified therein and shall not provide such subsidies in respect of any agricultural product not specified in that Section of its Schedule.

86. Article 8 of the Agriculture Agreement is also relevant, it provides:

Each Member undertakes not to provide export subsidies otherwise than in conformity with this Agreement and with the commitments as specified in that Member's Schedule.

87. It is clear from the above Articles that while a Member can choose to not include a product in its Schedule, once included it cannot diminish its commitments in relation to that product. As explained in Australia's response to Question 18, neither Article 3 nor Article 8 can be given a meaning which is contrary to the letter and spirit of those provisions. As such, the Footnote is in conflict with the Agriculture Agreement.

88. Customary rules of interpretation of international law require that having applied Articles 31 and 32 of the Vienna Convention on the Law of Treaties, if the conflict cannot be resolved a choice must be made. In Australia's view the choice must be that the fundamental, multilaterally negotiated and agreed Articles of the Agriculture Agreement must prevail over a unilaterally inserted Footnote to a Member's Schedule.

89. The approach taken by the Appellate Body and Panels serves to support this view. In the EC-Bananas case the Appellate Body concluded that Schedules could yield rights but not diminish obligations. Both the Panel and the Appellate Body in EC-Bananas confirmed the earlier reasoning and conclusions reached in the GATT Sugar Panel Report [24]. The Appellate Body quoting from the GATT Sugar Panel Report, concluding as follows:

The market access concessions for agricultural products that were made in the Uruguay Round of multilateral trade negotiations are set out in Members' Schedules annexed to the Marrakesh Protocol, and are an integral part of the GATT 1994. By the terms of the Marrakesh Protocol, the Schedules are "Schedules to the GATT 1994", and Article II:7 of the GATT 1994 provides that "Schedules annexed to this Agreement are hereby made an integral part of Part I of this Agreement". With respect to concessions contained in the Schedules annexed to the GATT 1947, the panel in United States - Restrictions on Importation of Sugar ("United States - Sugar Headnote") found that:

... Article II permits contracting parties to incorporate into their Schedules acts yielding rights under the General Agreement but not acts diminishing obligations under that Agreement.[Footnote: Adopted 22 June 1989, BISD 36S/331, para. 5.2]

This principle is equally valid for the market access concessions and commitments for agricultural products contained in the Schedules annexed to the GATT 1994. The ordinary meaning of the term "concessions" suggests that a Member may yield rights and grant benefits, but it cannot diminish its obligations.[Footnote: Adopted 22 June 1989, BISD 36S/331, para. 5.2] This interpretation is confirmed by paragraph 3 of the Marrakesh Protocol, which provides:

The implementation of the concessions and commitments contained in the schedules annexed to this Protocol shall, upon request, be subject to multilateral examination by the Members. This would be without prejudice to the rights and obligations of Members under Agreements in Annex 1A of the WTO Agreement. [emphasis added].[25]

90. The GATT Sugar Panel Report also concluded that the provision in Article II that Schedules were "…subject to the terms, conditions or qualifications set forth in that Schedule" was used in conjunction with the words "shall…be exempt from ordinary customs duties in excess of those set forth and provided therein" and therefore did not provide an exemption from GATT Articles. There is no such provision in the Agreement on Agriculture which could provide the EC with any basis on which it could apply conditions, qualifications or limitations to its Schedule of export subsidy reduction commitments.

91. The Appellate Body in Chile-Price Band confirmed this approach, concluding:

We have observed in a previous case that "[t]he ordinary meaning of the term 'concessions' suggests that a Member may yield rights and grant benefits, but it cannot diminish its obligations". A Member's Schedule imposes obligations on the Member who has made the concessions.[26]

92. In its report on EC-Poultry the Appellate Body again reaffirmed this principle as one of general application, stating:

In United States - Restrictions on Imports of Sugar, the panel stated that Article II of the GATT permits contracting parties to incorporate into their Schedules acts yielding rights under the GATT, but not acts diminishing obligations under that Agreement. In our view, this is particularly so with respect to the principle of non-discrimination in Articles I and XIII of the GATT 1994. In EC - Bananas, we confirmed the principle that a Member may yield rights but not diminish its obligations and concluded that it is equally valid for the market access concessions and commitments for agricultural products contained in the Schedules annexed to the GATT 1994. The ordinary meaning of the term "concessions" suggests that a Member may yield or waive some of its own rights and grant benefits to other Members, but that it cannot unilaterally diminish its own obligations.[27]

93. The Footnote in the EC's Schedule clearly seeks to diminish specific obligations placed upon it by Article 9.1 of the Agreement on Agriculture. It cannot do so in a manner which would be inconsistent with that Agreement and inconsistent with the adopted findings of the Appellate Body.

94. It is also important to note, as the Panel in EC Bananas did, that the Uruguay Round schedules were prepared with the full knowledge of the Sugar Headnote Panel report, which was adopted in June 1989. As the Panel stated in EC Bananas:

This is particularly significant in light of the Appellate Body's statement that "[a]dopted panel reports are an important part of the GATT acquis. They are often taken into account by subsequent panels. They create legitimate expectations among Members, and, therefore should be taken into account where they are relevant to any dispute."716

716. Appellate Body report on "Japan – Taxes on Alcoholic Beverages" adopted on 1 November 1996 WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, AB-1996-2, p15[28]

95. It is therefore clear that the WTO Agreements, including the Agriculture Agreement do not - and were never intended to - enable Members to evade their treaty obligations through schedules. The EC's Footnote to its schedule, does not allow the EC to escape its obligations under Articles 3.3, 8 and 9 of the Agriculture Agreement and its export subsidy levels must be brought into conformity with those obligations.

c. The terms of the Footnote do not constitute a reduction commitment

96. Article 9.1 of the Agriculture Agreement requires that all export subsidies listed in Article 9.1 must be subject to reduction commitments. The Footnote, as interpreted by the EC, does not constitute a reduction commitment in accordance with Article 9.1(c). There is no basis in the Agriculture Agreement for the EC's claim that it had the right to make 'commitments' to retain export subsidies on a certain quantity of exports at the same levels. In fact, the EC's interpretation of the Footnote does not even limit subsidisation, the only effective limit is the amount of sugar the ACP and India can export to the EC. The interpretation of the Footnote provided by the EC could not be enforced.

97. The EC's argument that is has undertaken an obligation to limit budgetary outlays on quantities of 'ACP/India equivalent' sugar to 1.6 million tonnes times the difference between the community price and the world price is untenable.[29] This could in no way be implied from the Footnote and again would not be enforceable by other WTO Members. It does not constitute a separate obligation as it is unlimited, except by the supposed quantity outlay. This is underscored by the EC proposition that over recent years the budgetary outlay limits have acted as the real ceiling on the EC's export subsidies on sugar.[30] Moreover, the budgetary commitments need to be viewed against the fact that 'ACP/India equivalent' sugar is not subject to producer levies. The budget ceiling does not constitute a ceiling commitment, it merely informs that the per unit export subsidy is the same. This is the approach adopted for incorporated products, but sugar is not an incorporated product in the EC Schedule.

d. 'ACP/India equivalent' sugar is not covered by the terms of the Footnote

98. The EC has now admitted that it exports an amount of sugar 'equivalent' to the amount it imports from ACP countries and India.[31] In fact, the amount of sugar is not equivalent to the amount of sugar imported under the "Preferential" arrangements, as defined in Article 35 of Council Regulation 1260/2001[32], but is set at an arbitrary limit based on "Preferential" imports plus, it is assumed, so-called Special Preferential Sugar (SPS). This is despite the fact that SPS is not eligible for export refunds under the relevant EC regulations (1260/2001).

99. As Australia has explained in answer to Panel Question 19, the export of an 'equivalent' amount of EC sugar is not what is provided for in the Footnote, even assuming that the Footnote was a legitimate derogation from the Agriculture Agreement.

2. Subsidies Agreement Article 3.1(a) and 3.2

100. In regard to the application of the Subsidies Agreement to 'ACP/India equivalent' sugar, Australia refers to its arguments in paragraphs 209-210 of its First Written Submission. The EC has not contested Australia's arguments that the export subsidies to 'ACP/India equivalent' sugar constitute export subsidies coming within the description of Item (a) of the Illustrative List.

101. The EC's "rebuttal", in paragraph 203 of its First Written Submission, is that the Subsidies Agreement is inapplicable to export subsidies granted on agricultural products, on the same basis as the arguments it has provided in relation to 'C' sugar. Australia's rebuttal in argument to the 'C' sugar aspect, is equally applicable to 'ACP/India equivalent' sugar.

IV. THE EC NULLIFIES AND IMPAIRS BENEFITS ACCRUING TO AUSTRALIA UNDER THE AGRICULTURE AND SUBSIDIES AGREEMENTS

102. As a result of the EC's infringement of its obligations under the Agriculture Agreement and the Subsidies Agreement, there is a prima facie case, in regard to claims under both agreements, that nullification and impairment has been suffered by Australia. Pursuant to Article 3.8 of the DSU, the EC, as the defending party, must rebut the presumption of nullification and impairment. In paragraph 145 of the EC's First Written Submission it accepts that Article 3.8 explicitly requires the defending party to rebut the presumption in the Complainants' favour that there is a case of nullification and impairment.

103. The EC argues that Articles 3.3, 8 and 10 of the Agriculture Agreement offer the Complainants "expectations of improved competitive opportunities" and then asserts that the Complainants had no such expectations in relation to 'C' sugar and 'ACP/India equivalent' sugar and therefore the benefits have not been nullified or impaired. This is a novel argument and does not counter the presumption in Article 3.8 of the DSU that requires the EC to establish that its breach of its WTO obligations has not had an "adverse impact" on Australia.

104. In EC - Bananas, the Appellate Body referred to the discussion of "nullification and impairment" in the US – Superfund case and cited the following statement:

….a demonstration that a measure…has no or insignificant effects would not be a sufficient demonstration that the benefits accruing under that provision have not been nullified or impaired even if such a rebuttal were in principle permitted.[33]

105. The EC also argues that the Complainants have not suffered any injury as each of the Complainants have increased their exports.[34] This is not sufficient to rebut the presumption of nullification and impairment. In Turkey-Textiles, Turkey argued that India had not suffered any nullification or impairment as imports of textile and clothing had increased since the Turkish measures had entered into force.[35] The Appellate Body rejected this argument stating:

…even if Turkey were to demonstrate that India's overall exports of clothing and textile products to Turkey have increased from their levels of previous years, it would not be sufficient to rebut the presumption of nullification and impairment caused by the existence of WTO incompatible import restrictions. Rather, at a minimum, the question is whether exports have been what they would otherwise have been, were there no WTO incompatible quantitative restrictions against imports from India.[36]

106. In this case, the EC has not provided any evidence to rebut the presumption of nullification and impairment and the mere fact that the Complainants may have increased exports is irrelevant to the determination of this issue.

V. GOOD FAITH/ESTOPPEL

107. In the event that the Panel finds for the Complainants on their claims relating to 'C' sugar and the export of 'ACP/India equivalent' sugar, the EC calls on it to find that Australia has acted inconsistently with the principle of good faith and Article 3.10 of the DSU in bringing these claims and, in doing so, to reject the claims.

A. 'C' Sugar

108. In Section III.4 of its First Written Submission, the EC addresses good faith and Article 3.10 of the DSU in relation to Australia's 'C' sugar claims. There appear to be two arguments being run by the EC in this regard. The first is that the Complainants "are not exercising reasonably their rights under the DSU" by pursuing their claims in relation to 'C' sugar.[37] The second is that the Complainants are exploiting an "excusable scheduling error" and that the Complainants are estopped from doing so "because they contributed to this error through their own conduct".[38]

1. Unreasonable exercise of rights

109. The EC elaborates its argument on "unreasonable exercise of rights" at paragraphs 123 to 135 of its First Written Submission. It seeks to lend the argument credibility by referring to a number of Appellate Body reports. The first of these is the Report in US – Continued Dumping and Offsets Act from which the EC draws the following quote:

Clearly, therefore, there is a basis for a dispute settlement panel to determine, in appropriate cases, whether a Member has not acted in good faith.[39]

110. The EC has quoted selectively from those Reports to support its argument that the Complainants are not exercising their rights reasonably under the DSU. However, the cited Appellate Body statement was made in relation to a Member's breach of its obligations. Subsequent to the quoted text, the Appellate Body states that:

Nothing, however, in the covered agreements supports the conclusion that simply because a WTO Member is found to have violated a substantive treaty provision, it has therefore not acted in good faith. In our view, it would be necessary to prove more than mere violation to support such a conclusion.[40]

111. Of note is that the Appellate Body considers the fact that a Member has violated its obligation, in and of itself, does not lead to a finding that the Member has not acted in good faith. If a violation of an obligation does not lead, without more, to a finding that a Member has not acted in good faith, it is very difficult to see how a Member seeking to exercise its rights can be found not to have acted in good faith.

112. Accordingly, Australia submits that the EC cannot rely on the Appellate Body Report in US – Continued Dumping and Offsets Act to support its argument that the Complainant's have sought to exercise their rights unreasonably.

113. The EC goes on to refer to the Appellate Body Report in US – Shrimp, in particular, the statements made therein on "abuse of right". Again the EC fails to provide the context of Appellate Body statements it seeks to rely on. The Appellate Body does refer to the doctrine of "abuse of right", which it opines "prohibits the abusive exercise of a state's rights" and requires a right to be exercised "reasonably".[41] However, it does so in the context of considering Article XX of GATT 1994.

114. Analysing Article XX, the Appellate Body states that:

…a balance must be struck between the right of a Member to invoke an exception under Article XX and the duty of that same Member to respect the treaty rights of the other Members. To permit one Member to abuse or misuse its right to invoke an exception would be effectively to allow that Member to degrade its own treaty obligations as well as to devalue the treaty rights of other Members. If the abuse or misuse is sufficiently grave or extensive, the Member, in effect, reduces its treaty obligation to a merely facultative one and dissolves its juridical character, and, in so doing, negates altogether the treaty rights of other Members. The chapeau was installed at the head of the list of "General Exceptions" in Article XX to prevent such far-reaching consequences.[42]

115. The Appellate Body makes clear that the operation of Article XX involves a balance between the rights of Members, which would be upset if a Member were to be permitted to "abuse or misuse its right to invoke an exception". The Appellate Body finds that the chapeau to Article XX is critical to preserving the balance and preventing abuse by a Member of its right to have recourse to Article XX. In this regard, the Appellate Body considers the chapeau to be "but one expression of the principle of good faith"[43]. By way of illustration and not application, it cites the doctrine of "abuse of right" as another example of that principle in operation.

116. The Appellate Body jurisprudence in US – Shrimp is squarely linked then to the interpretation of GATT Article XX. In the present case, the Complainants are not seeking to rely on an exception which needs to be balanced against the treaty rights of other Members to ensure those rights are not devalued. The Complainants are seeking to exercise their rights to engage in dispute settlement in relation to the breach by another Member of its obligations under the WTO agreements.

117. The EC also refers to the Appellate Body Report in US – Cotton Yarn. Once again, the EC quotes selectively. Paragraph 127 of the EC's First Written Submission states as follows:

In U.S. - Cotton Yarn, the Appellate Body described the principle of good faith as "pervasive" [footnote omitted] and suggested that, by virtue of that principle, the United States could be required to withdraw a safeguard measure taken in accordance with the WTO Agreements: [footnote omitted] if post-determination evidence relating to pre-determination facts were to emerge revealing that a determination was based on … a critical factual error.

118. Examination of the full text of the Appellate Body's statement in US – Cotton Yarn demonstrates the misleading nature of the partial quote offered by the EC. The Appellate Body stated that:

There is no need for the purpose of this appeal to express a view on the question whether an importing Member would be under an obligation, flowing from the "pervasive" [footnote omitted] general principle of good faith that underlies all treaties [footnote omitted], to withdraw a safeguard measure if post-determination evidence relating to pre-determination facts were to emerge revealing that a determination was based on such a critical factual error that one of the conditions required by Article 6 turns out never to have been met.[44]

119. Far from suggesting that the US "could be required to withdraw a safeguard measure", the Appellate Body expressly declined to express a view on the matter.

120. Having selectively canvassed Appellate Body jurisprudence, the EC then calls upon Article 3.10 of the DSU in aid of its position. The EC claims that Article 3.10 requires that "the right to submit claims to a panel must be exercised reasonably".[45] Article 3.10 does not impose this requirement. It deals with the observance of procedural rules. This is made clear by the Appellate Body Report in US – FSC:

Article 3.10 of the DSU commits Members of the WTO, if a dispute arises, to engage in dispute settlement procedures "in good faith in an effort to resolve the dispute". This is another specific manifestation of the principle of good faith which, we have pointed out, is at once a general principle of law and a principle of general international law.[footnote omitted] This pervasive principle requires both complaining and responding Members to comply with the requirements of the DSU (and related requirements in other covered agreements) in good faith. By good faith compliance, complaining Members accord to the responding Members the full measure of protection and opportunity to defend, contemplated by the letter and spirit of the procedural rules. The same principle of good faith requires that responding Members reasonably and promptly bring claimed procedural deficiencies to the attention of the complaining Member, and to the DSB or the Panel, so that corrections, if needed, can be made to resolve disputes.[46]

121. The sentence shown in italics, which was not cited by the EC, makes clear that the Appellate Body did not intend its analysis of Article 3.10 to apply to the right of a WTO Member to bring a particular claim. Rather Article 3.10 deals with the good faith observance of procedural rules.

122. In fact, it is Article 3.7 of the DSU which addresses the launching of cases by Members. It provides, in part, that "[b]efore bringing a case, a Member shall exercise its judgement as to whether action under these procedures would be fruitful".

123. The weight to be given under Article 3.7 to the judgement of a Member was emphasised by the Appellate Body in EC – Bananas,in which it found that:

…a Member has broad discretion in deciding whether to bring a case against another Member under the DSU. The language of … Article 3.7 of the DSU suggests, furthermore, that a Member is expected to be largely self-regulating in deciding whether any such action would be "fruitful".[47]

124. The Appellate Body returned to Article 3.7 in Mexico – High Fructose Corn Syrup Article 21.5, stating that:

Given the "largely self-regulating" nature of the requirement in the first sentence of Article 3.7, panels and the Appellate Body must presume, whenever a Member submits a request for establishment of a panel, that such Member does so in good faith, having duly exercised its judgement as to whether recourse to that panel would be "fruitful". Article 3.7 neither requires nor authorizes a panel to look behind that Member's decision and to question its exercise of judgement. Therefore, the Panel was not obliged to consider this issue on its own motion.[48]

125. The Appellate Body's jurisprudence in Mexico – High Fructose Corn Syrup makes clear that, even if the EC had invoked Article 3.7 rather than Article 3.10, the Complainants would benefit from the presumption of good faith identified by the Appellate Body.

126. Having constructed a legal argument without foundation, the EC then makes various factual assertions in an attempt to establish its case. The EC asserts that Australia, in bringing its claims relating to 'C' sugar, is seeking to "exploit a shared and excusable scheduling error".[49] The EC also makes assertions of "bad faith" on the part of Australia.[50] Australia rejects these assertions. The EC is responsible for its own actions. It has no basis upon which to implicate Australia in the violation of its obligations.

127. The EC turns its assertion that Australia is seeking to exploit "a shared and excusable scheduling error" into something of a mantra, with three elements.

  • The EC has committed nothing more than a "scheduling error".
  • This error is excusable.
  • The Complainants in some manner shared in, or contributed to, this error.

128. In relation to the first element, the use of the word "error" appears intended to persuade the Panel that the EC has committed nothing more than a technical oversight. Nothing could be further from the case. The EC has failed to meet fundamental obligations in relation to its reduction commitments on a scheduled agricultural product under the Agriculture Agreement. It has benefited from this so-called "error" through the application of WTO-inconsistent subsidies for nearly a decade.

129. The use of the word "error" also appears directed at supporting the contention of the EC, expressed at paragraph 142, that the EC should be allowed to 'correct' the scheduling error. This paragraph is also linked to the following footnote:

The possibility to correct errors in the text of a treaty is specifically envisaged in Article 79 of the Vienna Convention.

130. Article 79 of the Vienna Convention on the Law of Treaties (VCLT) does indeed set out the process by which an error can be corrected in a treaty. The nature of the error it addresses is made clear by Article 48.3 of the VCLT, which states that Article 79 applies to an "error relating only to the wording of the text of a treaty". Clearly, it has no application to the case of a contracting State failing to meet its obligations under a treaty.

131. Australia notes that the EC did not refer to Article 48 of the VCLT, which deals with the much more serious case of error that may be invoked by a State to invalidate its consent to be bound by a treaty. While Australia is not suggesting that Article 48 is applicable in the present case, it observes that, in cases of fundamental error, a State may not invoke such an error to invalidate its consent to be bound by a treaty where the State has "contributed by its own conduct to the error or if the circumstances were such as to put that State on notice of a possible error" (Article 48.2).

132. The "error" of the EC is not "excusable". The decision on how to schedule support was one for each Member to take at the end of the day, based on its own interpretation of the application of the draft provisions to the regimes applying in each sector. Any risk in regard to so-called "under-calculations" of the base period outlays and quantities was the responsibility of the scheduling Member, in this case the EC.

133. Australia has in no manner shared in, or contributed to, the EC's breach of its obligations.

134. In paragraph 32 of its First Written Submission, the EC asserts that:

Consistent with the common understanding at the time of the conclusion of the WTO Agreement that the C sugar regime does not provide export subsidies, the EC did not include exports of C sugar in the base quantity from which the commitment levels shown in its schedule were calculated.

135. Australia rejects the existence of any such common understanding.

136. As noted in Australia's response to Question 41 put by the Panel, at the time of the Uruguay Round, Australia did not have access to information that would have enabled it to make a definitive assessment that 'C' sugar exports were being subsidised in the sense of Article 9.1(c) of the Agriculture Agreement.

137. On the other hand, as noted in paragraph 26 of Australia's Oral Statement of 30 March 2004, the EC[51] had access to a very wide range of information sources that would have enabled it to make an informed assessment of the cross subsidization of 'C' sugar exports. It knew, as far back as 1981, that the EC sugar regime resulted in the pooling of producers' receipts from sales in internal markets at supported prices.[52] It is apparent from the reports of the Court of Auditors[53], NEI [54]and Commission Decision of 20 December 2001[55], that the authors of those reports had access to information that was not made publicly available.

138. In conclusion, Australia submits that the Panel should reject the EC's fundamentally flawed argument that Australia and the other Complainants have sought to exercise their rights unreasonably in bringing their claims in relation to 'C' sugar.

2. Estoppel

139. The EC also runs an argument of estoppel in an effort to counter the Complainants' claims in relation to 'C' sugar.

140. It argues that "estoppel" is a general principle of international law that is linked to the principle of good faith and, accordingly, it is one of the principles which Members must "observe" when "engaging in dispute settlement" in accordance with Article 3.10 of the DSU.[56]

141. As noted above, Article 3.10 does not apply to the right of a WTO Member to bring a particular claim. Rather Article 3.10 deals with the good faith observance of procedural rules. It could not provide the basis for a claim of estoppel, assuming for the sake of argument that such a claim could be made.

142. Although the principle of estoppel is linked to the general principle of good faith, as noted by the International Court of Justice in the Gulf of Maine Case[57], this linkage does not mean that a WTO Member may rely on the principle of estoppel to defeat a claim brought by another Member. The principle of estoppel is not imported into the WTO Agreements by the reference in DSU Article 3.2 to the customary rules of interpretation of public international law. Estoppel is not a customary rule of interpretation.

143. Australia notes that States negotiating a treaty may exclude or modify the application of principles of customary international law as between themselves through the operation of the treaty.[58]

144. Although the principle of estoppel has been raised by parties in earlier disputes, it has never been applied by a panel in determining a claim before it. There is no Appellate Body jurisprudence on the issue. The EC suggests in footnote 81 of its First Written Submission that a number of panels have not questioned the applicability of estoppel in disputes. In this regard, it cites a number of cases, including India – Autos, Guatemala – Cement II and Argentina – Poultry AD Duties.

145. In India – Autos, the Panel did not suggest that estoppel "was applicable in WTO disputes". In footnote 364 to its Report, the Panel commented that "there may be an argument that a general principle such as estoppel may apply to WTO dispute settlement". This is hardly an unqualified statement supporting the application of estoppel in the WTO.

146. In Argentina – Poultry AD Duties, a case brought by Brazil concerning anti-dumping measures imposed by Argentina on Brazilian poultry imports, Argentina asserted that Brazil's conduct in bringing the dispute successively before different fora, first MERCOSUR and then the WTO, was contrary to the principle of good faith and warranted invocation of the principle of estoppel. Argentina did not allege that Brazil had violated any substantive provision of a covered agreement in bringing the case. Argentina argued:

[T]he essential elements of estoppel are "(i) a statement of fact which is clear and unambiguous; (ii) this statement must be voluntary, unconditional, and authorized; (iii) there must be reliance in good faith upon the statement…to the advantage of the party making the statement".[59]

147. As Argentina failed to satisfy the elements it had identified, the Panel did not consider it necessary to determine whether or not it would have had the authority to apply the principle of estoppel if the relevant conditions had been satisfied. Nor did it consider it necessary to determine whether the three conditions proposed by Argentina are sufficient for the application of that proposal.[60]

148. In Guatemala – Cement II, Guatemala argued that Mexico's failure to object immediately to a delay in notification by Guatemala required under Article 5.5 of the Anti-Dumping Agreement gave rise to an estoppel. Guatemala did not identify a provision of a covered agreement as supporting its reliance on the principle of estoppel. The Panel considered that:

[e]stoppel is premised on the view that where one party has been induced to act in reliance on the assurances of another party, in such a way that it would be prejudiced were the other party later to change its position, such a change in position is "estopped", that is precluded.[61]

149. The Panel did not find it necessary to determine whether a WTO Member could rely on the principle of estoppel, as it held that "Mexico was under no obligation to object immediately to the violations" it alleged before the Panel.[62] The Panel went on to hold that as Mexico had:

…raised its claims at an appropriate moment under the WTO dispute settlement procedures, Guatemala could not have reasonably relied upon Mexico's alleged lack of protest to conclude that Mexico would not bring a WTO complaint.[63]

150. Australia notes that neither in Argentina – Poultry AD Duties nor in Guatemala – Cement II did the Member raising the principle of estoppel identify any provision of a covered agreement which gave expression to that principle.

151. Australia also notes that in Guatemala – Cement II the Panel held that the fact that a Member does not complain about a measure at a given point in time cannot by itself deprive that Member of its right to initiate a dispute at some later point in time. The lack of complaint does not create an estoppel.

152. Having put forward a flawed case for the application of estoppel in WTO disputes, the EC goes on to advance the following description of the principle:

Despite a great variety of definitions in doctrine and practice, the following features are generally accepted today as essential elements [of estoppel]. The party invoking estoppel must have been induced to undertake legally relevant action or abstain from it by relying in good faith upon clear and unambiguous representations by the other State. Reliance must prejudice the addressee, i.e., subsequent deviation from the original representation must cause damage to the relying State, or result in advantages for the representing State.[64]

153. Not content with this description of the "essential elements" of estoppel, the EC immediately goes on to add that:

[e]stoppel may arise not only from express statements, but also from various forms of conduct, including silence, where, upon a reasonable construction, such conduct implies the recognition of a certain factual or juridical situation.[65]

154. If, despite Australia's arguments to the contrary, the Panel were to find that the principle of estoppel can be applied in WTO disputes, and accepting arguendo the description of the principle given by the EC, Australia submits that its conduct could in no way give rise to an estoppel.

155. The EC alleges certain conduct by the Complainants upon which it relied creates an estoppel. In paragraphs 139 and 140 of its First Written Submission, the EC asserts that the Complainants were aware of the base outlay levels in its draft schedules and that these levels did not include 'C' sugar.

156. Australia recalls that it rejected the EC's characterisation of its conduct in its Oral statement of 30 March.[66] In this regard, Australia also draws the Panel's attention to its answer to Question 41 put by the Panel.

157. The EC appears to be arguing that it was the Complainants' "lack of reaction" which "clearly represented to the EC that the Complainants shared the understanding that the C sugar regime did not provide export subsidies". The EC is not arguing then that it relied upon "clear and unambiguous representations" made by the Complainants. Rather it is arguing that it relied upon the Complainants' "silence".

158. It is difficult to understand how the EC could claim to have relied on the Complainants' "silence", when it itself would have been well aware at the time that it could place no such reliance on the inaction of the Complainants.

159. In EEC-Bananas, the Panel rejected an EC argument that the Complainants' silence regarding the GATT inconsistent banana import regimes at issue, resulted in the complaining parties being estopped from making such claims. The EC unsuccessfully argued that the Complainants were under a legal duty to complain about the banana import regime and their lack of reaction now estopped them from claiming inconsistency of the regime with the GATT. The Panel noted that "[e]stoppel could only result from the express, or in exceptional circumstances, implied, consent of the complaining parties".[67] Applying this standard the Panel found that "[t]he mere inaction of the contracting parties could not in good faith be interpreted as an expression of their consent to release the EEC from its obligations under Part II of the GATT".[68]

B. 'ACP/India equivalent' Sugar

160. In the event that the Panel finds for the Complainants in relation to their claims concerning the export of 'ACP/India equivalent' sugar, the EC submits in paragraph 188 of its First Written Submission that:

the Panel should reject the Complainants' claims as being inconsistent with the expressions of the international law principle of good faith as set out by the EC in sections III.4 and III.5 above and, therefore, with the Complainants' obligations under Article 3.10 of the DSU. The arguments set out there apply mutatis mutandis to the Complainants' claims in respect of ACP/India equivalent sugar.

161. Australia is unclear in this context about the reference to section III.5 of the EC's Submission, which deals with the issue of "nullification or impairment". Australia deals with the EC arguments on this issue in Section IV.

162. Australia relies on the arguments mutatis mutandis, which it advanced concerning the EC's flawed assertions of "unreasonable exercise of rights" and "estoppel" made in relation to the Complainants' claims concerning 'C' sugar, to rebut these assertions in the context of the Complainants' claims concerning the export of 'ACP/India equivalent' sugar.

VI. CONCLUSIONS

163. Australia reiterates its requests made in its First Written Submission for the following rulings by the Panel:

(a) 'C' sugar produced under the EC regime is provided with an export subsidy within the meaning of Article 9.1(c) of the Agriculture Agreement;

(b) this export subsidy has not been subjected to the EC's reduction commitments under the Agriculture Agreement, inconsistently with the provisions of Article 9.1 of the Agriculture Agreement;

(c) as 'C' sugar exports - which are provided with export subsidies defined under Article 9.1(c) - are in excess of the quantity outlay commitment levels specified in Section II of Part IV of the EC Schedule, the EC is acting inconsistently with the provisions of Article 3.3 of the Agriculture Agreement;

(d) alternatively, if the Panel finds that the EC's export subsidies on 'C' sugar are not export subsidies within the meaning of Article 9.1 of the Agriculture Agreement, the EC is applying other export subsidies in a manner which results in, or threatens to lead to, circumvention of export subsidy commitments, inconsistently with the provisions of Article 10.1 of the Agriculture Agreement;

(e) under either of the alternatives, as the EC provides export subsidies on 'C' sugar otherwise than in conformity with the Agriculture Agreement and with the commitments as specified in its Schedule, the EC is acting inconsistently with its undertaking under the provisions of Article 8 of the Agriculture Agreement;

(f) the EC is providing export subsidies to 'C' sugar inconsistently with the provisions of Articles 3.1(a) and 3.2 of the Subsidies Agreement;

(g) the EC grants direct export subsidies on the export of 'ACP/India equivalent' sugar, within the meaning of Article 9.1(a) of the Agriculture Agreement;

(h) the export subsidies have not been subjected to the EC's reduction commitments under the Agriculture Agreement, inconsistently with Article 9.1;

(i) the Footnote to the EC's Schedule does not permit the EC to derogate from its reduction commitment obligations under Articles 9.1, 3.3 and 8 of the Agriculture Agreement;

(j) the export subsidies on 'ACP/India equivalent' sugar are in excess of the budgetary outlay and quantity reduction commitments specified in the EC's Schedule, inconsistently with Article 3.3 of the Agriculture Agreement; and

(k) as the EC is providing export subsidies on 'ACP/India equivalent' sugar otherwise than in conformity with the Agriculture Agreement and with the commitments specified in its Schedule, it is acting inconsistently with the provisions of Article 8 of the Agriculture Agreement;

(l) the EC is providing direct export subsidies to 'ACP/India equivalent' sugar, within the meaning of paragraph (a) of Annex I of the Subsidies Agreement, inconsistently with the provisions of Article 3.1(a) of the Subsidies Agreement.

164. Australia requests that the Panel recommend to the Dispute Settlement Body, in accordance with Article 19.1 of the Understanding on Rules and Procedures Governing the Settlement of Disputes and Article 4.7 of the Subsidies Agreement, that the EC:

(a) bring its export subsidies for sugar into conformity with its obligations under the Agriculture Agreement;

and

(b) withdraw the export subsidies inconsistent with the Subsidies Agreement within 90 days.

AUSTRALIA'S SUPPLEMENTARY EXHIBITS[69]

ALA-2 GATT AG/W/9 26 June 1984
Special distribution
Committee on Trade in Agriculture Draft Recommendations
- Explanatory note by the Secretariat

ALA-3 G8 Technical Discussions on Agriculture Schedules Geneva, 23 to 26 March 1992
- Record of Discussion

ALA-4 4 March 1992
Letter from Trân Van-Thinh,
EC Permanent Representative, to Arthur Dunkel, Director-General, GATT, Chairman of the TNC

- agricultural negotiations – draft commitments (schedules)

ALA-5 Uruguay Round - Agriculture
10 December 1993 letter and accompanying paper, Issues Requiring Settlement – Australia, from Australian Minister for Trade, Peter Cook, to Mr Steichen EU Commissioner for Agriculture & Rural Development

ALA-6 14 December 1993
Letter from Trân Van-Thinh
EC Permanent Representative, to Peter Sutherland, Director-General GATT

- agricultural negotiations – draft commitments (schedules)

ALA-7 25 March 1994
Letter from Hervé Jouanjean, Deputy Head of EC Delegation, to A. Hoda, Deputy Director-General GATT
- agricultural negotiations – draft commitments (schedules)

ALA-8 Uruguay Round – Australia – Summary statement - Issues Still Requiring Settlement - Brussels, 31 January 1994

ALA-9 Judgment of the Court (Sixth Chamber) - 10 January 2002(1)
(Agriculture – Common organisation of the markets – Sugar – Attribution as C sugar of a quantity of sugar produced during a given marketing year – Charge payable in respect of sugar disposed of on the international market – Levied in the case of export with an export licence – Export refunds) - Case C-101/99

ALA-10 Opinion of Advocate General Stix-Hackl delivered on 10 September 2003(1) Case C-329/01 The Queen on the application of British Sugar plc v Intervention Board for Agriculture Produce
(Reference for a preliminary ruling from the High Court of Justice of England & Wales, Queen's Bench Division (Administrative Court))
(Common organisation of the markets in the sugar sector – Export licence for C sugar – Proof of export – Correction of licence – Principle of proportionality – Penalty)

ALA-11 Official Journal of the European Union - 1.10.2003
Commission Regulation (EC) No 1739/2003 of 30 September 2003
Reducing, for the 2003/2004 marketing year, the guaranteed quantity under the production quotas for the sugar sector and the presumed maximum supply needs of sugar refineries under preferential imports

ALA-12 Oxfam Briefing Paper 61 March 2004
Dumping on the world - How EU sugar policies hurt poorcountries


[1] EC's First Written Submission, para 71

[2] Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/AB/R, para. 97

[3] US-FSC WT/DS108/AB/R, para 166

[4] WT/DS265/21

[5] EC – Bananas, WT/DS27/AB/R, para. 143

[6] WT/DS142/2, WT/DS248/12, WT/DS39/2, WT/DS273/2, WT/DS54/6

[7] Part IV of the EC First Written Submission

[8] Australia addresses this claim in para 108 onwards of this submission

[9] Australia's Oral Statement, paras 41-48

[10] ALA-1, page 5

[11] see ALA-1 and responses to Questions 30 and 31.

[12] Australia's First Written Submission, paras 135-186

[13] EC First Written Submission, paras 73-83

[14] EC First Written Submission, para 73

[15] See Australia's response to Question 30(g)

[16] Australia's First Written Submission, paras 169 – 178

[17] EC First Written Submission, paras 84-85

[18] see Australia's response to Panel Question 1

[19] See US-FSC (WT/DS108/R, as modified by the Appellate Body report, WT/DS108/AB/R of 20 March 2000 (paras 177(a) and (d)); WT/DS108/RW, adopted 20 August; and WT/DS108/AB/RW (paras 256(b) and (d)), adopted 14 January 2002)

[20] EC First Written Submission, para 197

[21] Exhibit ALA-6

[22] Exhibit COMP-19

[23] In the export competition section of the paper, there are no counterpart provisions to paragraph VII dealing with expansion of current access, which allows for due account to be taken of reduction commitments in the export competition area.

[24] GATT Sugar Panel Report, in particular paras 5.2-5.3

[25] EC Bananas, Appellate Body Report, para 154

[26] Chile-Price Band, Appellate Body Report, para 272

[27] EC-Poultry, Appellate Body Report, para 98

[28] EC Bananas, First Panel Report para 7.114

[29] Certainly, the 'obligation' is not scheduled. Further, this contention is in conflict with the advice provided by the EC Permanent Representative to the GATT Director General in 1993 (ALA-6).

[30] EC First Written Submission, para 182

[31] EC First Written Submission, para 197

[32] Exhibit COMP-5F

[33] US – Superfund GATT Panel Report, BISD 34S/136, para 5.1.9; EC – Bananas III, Appellate Body Report, para 252

[34] EC Submission, para 25-26

[35] Turkey-Textiles, Appellate Body Report, WT/DS34/AB/R

[36] Turkey-Textiles, Appellate Body Report, WT/DS34/R, adopted by the Appellate Body, para 9.204

[37] EC First Written Submission, para 120

[38] EC First Written Submission, para 121

[39] EC First Written Submission, para 124; US – Continued Dumping and Offsets Act, Appellate Body Report, para 297

[40] US – Continued Dumping and Offsets Act, Appellate Body Report, para 298

[41] US – Shrimp, Appellate Body Report, para 158

[42] US – Shrimp, Appellate Body Report, para 156

[43] US – Shrimp, Appellate Body Report, para 158

[44] US – Cotton Yarn, Appellate Body Report, para 81

[45] EC First Written Submission, para 129

[46] US – FSC, Appellate Body Report, para 166

[47] EC – Bananas, Appellate Body Report, para 135

[48] Mexico - High Fructose Corn Syrup, Article 21.5 Appellate Body Report, para 74

[49] EC First Written Submission, paras 33, 121 and 131

[50] EC First Written Submission, paras 132 and 133

[51] Including EC institutions and Member State agencies, as well as EC sugar producers

[52] L/5113, para 33

[53] Exhibit COMP-1

[54] Exhibit COMP-2

[55] Exhibit COMP-10

[56] EC First Written Submission, para 136

[57] 1984 ICJ Reports, p 305, para 130

[58]Mc Nair, Law of Treaties, pp 213-215

[59]Argentina – Poultry AD Duties, Panel Report, para 7.20

[60] ibid, footnote 58

[61]Guatemala – Cement II, Panel Report, para 8.23

[62] Guatemala – Cement II, Panel Report, para 8.24

[63] Guatemala – Cement II, Panel Report, para 8.24

[64] EC First Written Submission, para 137

[65] EC First Written Submission, para 138

[66] Australia Oral Statement, paras 55 –66

[67] EEC – Bananas I, Panel Report, para 361

[68] Ibid, para 363.

[69] ALA-1 being Roger Rose, 'Sugar in the European Union: Sugar Production Costs and Cross Subsidies to C Sugar Exports', paper prepared for Australian Government Department of Agriculture, Fisheries and Forestry, 2004, was submitted with Australia's First Written Submission.

Last Updated: 9 January 2013
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