CYIL vol. 8 (2017)

ELISA BARONCINI CYIL 8 ȍ2017Ȏ claiming the benefit of this defence must demonstrate that the measure at issue is introduced upon the formation of a customs union that fully meets the requirements of sub-paragraphs 8(a) and 5(a) of Article XXIV. And, second, that party must demonstrate that the formation of that customs union would be prevented if it were not allowed to introduce the measure at issue. Again, both these conditions must be met to have the benefit of the defence under Article XXIV. We would expect a panel, when examining such a measure, to require a party to establish that both of these conditions have been fulfilled. It may not always be possible to determine whether the second of the two conditions has been fulfilled without initially determining whether the first condition has been fulfilled. In other words, it may not always be possible to determine whether not applying a measure would prevent the formation of a customs union without first determining whether there is a customs union. In this case, the Panel simply assumed, for the sake of argument, that the first of these two conditions was met and focused its attention on the second condition. 27 In this dispute on the legitimacy of a US tariff quota, the Panel could intervene on the level of evidence to fulfill by a defendant invoking Article XXIV of the GATT 1994 to justify an alleged WTO violation because of the existence on an RTA. In fact, Korea attacked the safeguard measure imposed by the United States on imports of circular welded carbon quality line pipe, which is a tubular product used primarily in the gathering and transmission of oil and gas. As the oil and gas industries have very fluctuating prices, the demand and pricing for line pipe necessary to transport those natural resources have similar cyclical swings. In order to preserve the US industry of line pipe, the International Trade Commission of the United States therefore introduced a quota of zero rate of duty for line pipe originating in each WTO Member, combined with a tariff duty for goods imported exceeding the assigned quota. The safeguard measure, lasting for three years and one day, established a reduction for the rate of duty on the second and third year. However, the US trade defense instrument excluded Mexico and Canada from the remedy. 28 In front of the Panel, the US defended its safeguard measures also arguing to be entitled to treat imports from Canada and Mexico differently because of the existence of the North American Free Trade Agreement (NAFTA), 29 thus of a RTA providing for better trade conditions for its contracting parties. The US had consequently to demonstrate the consistency of NAFTA with Article XXIV of the GATT 1994. While assessing the US defense, the Panel had therefore the chance to dwell upon the level of evidence, i.e. the 4. The quantum of the burden of proof to establish a prima facie case of the WTO consistency of an RTAs: the US – Line Pipe case 27 Appellate Body Report, Turkey – Restrictions on Imports of Textile and Clothing Products , WT/DS34/AB/R, adopted 19 November 1999, paras. 58 and 59. 28 Cfr. Panel Report, United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea , WT/DS202/R, adopted 8 March 2002, paras. 2.1 – 2.5. 29 The North American Free Trade Agreement among the United States, Mexico and Canada, entered into force on January 1, 1994. For the text of NAFTA see the official website of the Government of Canada http://www. international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/index.aspx?lang=eng (accessed on January 2017).

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