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Argentina — Textiles and Apparel1

Appellate Body report, Argentina — Measures Affecting Imports of


1

Footwear, Textiles, Apparel and other Items – Complaint by United


States, WT/DS56/AB/R, adopted 27/03/1998

Facts: Argentina appealed the panel’s findings about the following


things: first, second.US and the third parties present their argument. The
appellate body upheld all of the panel’s original findings and
conclusions.

Issue: There were five issues in the case: first, whether Argentina’s
application of the DIEM violated the Article II of GATT 1994. Second,
whether the panel had made a mistake when concluding that Argentina’s
usage of the DIEM means that Argentina had violated the Article II of
the GATT 1994 “in all cases”. Third, Whether by ignoring Argentina’s
duties to IMF, the panel had let the Article VIII of GATT 1994 to be
wrongly applied to the 3% Ad valorem statistical tax. Fourth, whether
the Article 11 of DSU had been violated by the panel.

Law: Article II of the GATT 1994; Article VIII of the GATT 1994;
Agreement Between the IMF and the WTO; The Declaration on the
Relationship of the World Trade Organization with the International
Monetary Fund; The Declaration on the Contribution of the World Trade
Organization to Achieving Greater Coherence in Global Economic
Policymaking; Article 11 of the DSU.

Holding: The Appellate Body had made five conclusions: first, yes,
Argentina had violated the Article II of GATT 1994 through the
application of the DIEM. Second, no, the panel never made the
conclusion the conclusion that Argentina had violated the Article II of
GATT 1994 “ in all cases”. Third, no, the panel’s application of Article
VIII of GATT 1994 to the 3% Ad valorem statistical tax is correct.
Fourth, no, the panel did not violate the Article 11 of DSU.

Reasoning: The Appellate Body’s decision could be explained as


followed: First, Argentina application of the DIEM allowed them to
collect and ad valorem higher 35%, which was what agreed in their
schedule, the LXIV that went into effect in 1/1/1995. This is because in
the event that the import price is lower than the representative
international price, 35% of the DIEM or less than 35% of the DIEM
could still be bigger than the 35% ad valorem duties. For example, if the
import price is 100 dollars and the representative international price is
150 dollars , the 35% ad valorem duties would be 35 dollars and 25 % of
the DIEM would be 37.5 dollars. This combining with the fact that the
Argentina customs was instructed to choose the duties that was higher
means that there was definitely cases when Argentina is applying tariff
that is higher than 35% ad valorem. Second, the Panel said that “... the
very nature of the minimal particular obligation gadget imposed in
Argentina at the objects at difficulty will necessarily lead, in sure
instances, to the imposition of responsibilities above 35 consistent with
cent advert valorem.” . This reference to "in sure instances" suggests that
the Panel did now no longer finish that there has been infringement "in
all cases". Third, The Agreement Between the IMF and the WTO,
however, does now no longer adjust, upload to or decrease the rights and
responsibilities of Members beneath the WTO Agreement, nor does it
adjust man or woman States' commitments to the IMF. It does now no
longer offer any noticeable policies regarding the decision of feasible
conflicts among responsibilities of a Member beneath the WTO
Agreement and responsibilities beneath the Articles of Agreement of the
IMF or any settlement with the IMF. However, paragraph 10 of the
Agreement Between the IMF and the WTO includes a route to the body
of workers of the IMF and the WTO Secretariat to seek advice from on
"troubles of feasible inconsistency among measures beneath discussion".
Fourth, concerning the truth that the panel admitted the United States
proof overdue and permitting Argentina to counter it. Article eleven of
the DSU does now no longer set up closing dates for the submission of
proof to a panel. Article 12.1 of the DSU directs a panel to observe the
Working Procedures set out in Appendix three of the DSU, however on
the identical time authorizes a panel to do in any other case after
consulting the events to the dispute. The Working Procedures in
Appendix three additionally do now no longer set up unique closing
dates for the 66See Panel Report, paras. three.179 and 6.55.
67Argentina's appellant's submission, paras. 107-108. WT/DS56/AB/R
Page 29 presentation of proof with the aid of using a celebration to the
dispute. sixty eight It is real that the Working Procedures "do now no
longer prohibit" submission of extra proof after the primary noticeable
assembly of a panel with the events. Regarding the consulting IMF
difficulty. The most effective provision of the WTO Agreement that
calls for consultations with the IMF is Article XV: 2 of the GATT 1994.
This provision calls for the WTO to seek advice from the IMF while
dealing with "issues regarding economic reserves, balances of bills or
forex arrangements". seventy three However, this situation does now no
longer relate to those matters. Article 13.1 of the DSU offers a panel "...
the proper to are seeking for records and technical recommendation from
any man or woman or frame which it deems appropriate." This is a
supply of discretionary authority: a panel isn't always obligation-certain
to are seeking for records in every and each case or to seek advice from
specific specialists beneath this provision.
REFFERENCE:

Appellate Body report, Argentina — Measures Affecting Imports of


Footwear, Textiles, Apparel and other Items – Complaint by United
States, WT/DS56/AB/R, adopted 27/03/1998

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