RESTRICTED
WORLD TRADE W/DS32/1
15March 1996
ORGANIZATION(96-0970)
Original: English
UNITED STATES -MEASURES AFFECTING IMPORTS OF
WOMEN 'SAND GIRLS 'WOOL COATS
Request fortheEstablishment ofaPanel
Communication from India
Thefollowing communication, dated 14March 1996, from thePermanent Mission ofIndia
tothePermanent Mission oftheUnited States andtotheDispute Settlement Body, iscirculated in
accordance withArticle 1.2oftheDSU andArticle 8.10oftheATC.
_______________
1. TheGovernment ofIndia received arequest forconsultations regarding imports ofCategory
435(women 'sandgirls'wool coats) from theGovernment oftheUnited States ofAmerica on
30December 1994under paragraphs 19and20ofthe"Agreement between theGovernment ofIndia
andtheGovernment oftheUnited States ofAmerica concerning Trade inTextiles andTextile Products"
(Bilateral Textile Agreement) which hadbeeninoperation under theaegisoftheArrangement Regarding
International Trade inTextiles (MFA).
2. Delegations ofthetwocountries metinGeneva on18-19 April 1995todiscuss certain textile
issues ofmutual interest including therequest forconsultations onCategory 435issued on
30December 1994. Even astheIndian Delegation wasexplaining totheUnited States Delegation
atGeneva on18April 1995 thelegalunsustainability ofpursuing arequest forconsultations issued
under theoldBilateral Textile Agreement, which hadceased tooperate by31December 1994, and
theanomalies andinconsistencies withreference totheprovisions oftheAgreement onTextiles and
Clothing (ATC) thatcould ariseifthecallsissued under theoldbilateral textile agreement werepursued
andacted uponafterthecoming intoforce ofthenewmultilateral agreement ontextiles, namely, the
ATC, afresh request forconsultations wasmade bytheGovernment oftheUnited States through the
Embassy ofIndia inWashington D.C. inrespect ofthesame category (Category 435)under Article 6
oftheATC, andcopies ofthestatement of"serious damage" annexed totherequest forconsultations
werehanded overtotheIndian Delegation onthesame dayinGeneva. On19April 1995, theUnited
States Delegation provided certain clarifications totheIndian Delegation onthese newstatements of
serious damage.
3. Onthebasis ofthefresh request forconsultations issued bytheGovernment oftheUnited
States under Article 6oftheATC inrespect ofCategory 435on18April 1995, bilateral consultations
wereheldinWashington D.C. on14-16 June1995. During these consultations theIndian Delegation
pointed outthatwhile thenoteverbale oftheUnited States Government conveying theirrequest for
consultations referred to"serious damage oractual threat thereof" toUnited States industry withoutW/DS32/1
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indicating clearly whether theUnited States haddetermined thesituation tobeoneof"serious damage"
or"actualthreat",thestatementaccompanyingthenoteverbaleconsistentlyreferredto"seriousdamage".
During these bilateral consultations, theIndian Delegation, onthebasis ofdatafurnished along with
therequest forconsultations, andotherfigures published byUnited States Government agencies having
arelevance fortherequest forconsultations, pointed outthatthere wasnojustification foranyaction
under Article 6oftheATCinrespect ofCategory 435.However, theUnited States Delegation refused
toaccept thisposition andsubsequently (i.e.on14July1995) established aunilateral restraint onimports
inCategory 435from India withretrospective effect, i.e.witheffect from 18April 1995.
4. Asrequired under paragraph 10ofArticle 6oftheATC, theTextiles Monitoring Body (TMB)
examined thematter atitsThird andFourth meetings on28August -1September 1995 and12-
15September 1995. TheIndian Delegation made adetailed presentation totheTMB onalltherelevant
parameters referred toinArticle 6oftheATC, andalsoprovided answers tothequestions putbythe
TMB members. During thepresentation, India hadpointed out,byanalysing thedataprovided by
theUnited States andbyusing thedatapublished byUnited States authorities, thattheUnited States
hadnotdischarged itsburden ofproving serious damage oractual threat ofserious damage toits
producers.
5. TheTMB subsequently issued areport oftheThird andFourth meetings which, interalia,
covered itsexamination under Article 6.10oftheUnited States action inrespect ofCategory 435imports
from India (Document No.G/TMB/R/3 dated 3October 1995). Paragraph 19ofthisreport reads
asfollows:
"During itsreview under paragraphs 2and3ofArticle 6,ofthesafeguard action taken by
theUnited States against imports ofCategory 435from India, theTMB found thatserious
damage, asenvisaged inthese provisions, hadnotbeendemonstrated. TheTMB could not,
however, reach consensus ontheexistence ofactual threat ofserious damage. When reviewing
theimplications ofthediscussions intheTMB andtheBody'sfinding inthismatter, theparties
should keepinmind thefactthattheAgreement issilent astowhether theimport restraint
cancontinue tobemaintained".
6. TheGovernment ofIndia hadhoped thatthefinding arrived atbytheTMB initsThird and
Fourth meetings would result inwithdrawal oftherestraint bytheUnited States. Asthisdidnothappen,
on17October1995,theGovernmentofIndiasentacommunication(DocumentNo.G/TMB/SPEC/119)
totheTMB under Article 8.6oftheATC, without prejudice toitsrights under theWTO Agreement,
drawing theattention oftheTMB tothecontinuation oftherestraint onCategory 435imports from
India intotheUnited States. Inthiscommunication, India pointed outthatArticle 6oftheATC in
itsgeneral thrust envisaged thattransitional safeguard measures could continue toexistandbetreated
asjustified onlywiththeendorsement oftheTMB. Theabsence ofaconsensus wasindicative that
theaction under examination hadnotbeendetermined tobejustified andthus,lacking injustification,
wasnotvalid under theprovisions andconditions setforth inArticle 6oftheATC. Inthis
communication, India alsohighlighted anumber ofpoints ithadmade atthetimeoftheexamination
bytheTMB under Article 6.10oftheATC, which haddemonstrated clearly onthebasis ofdata
published byUnited States Government sources thatthere wasnoserious damage oractual threat of
serious damage tothedomestic producers ofCategory 435intheUnited States.
7. TheTMB reviewed thismatter atitsSeventh Meeting on13-17 November 1995 during the
course ofwhich itconsidered thewritten submission made byIndia through itscommunication dated
17October 1995 andoralpresentation made before theTMB.W/DS32/1
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8. TheTMB issued areport oftheSeventh Meeting (Document No.G/TMB/R/6 dated
8December 1995) which, interalia,covered itsexamination ofthecommunication sentbyIndiaunder
Article 8.6oftheATC. Paragraph 9ofthisreport reads asfollows:
"The TMB reviewed thematter referred toitbyIndia under paragraph 6ofArticle 8inits
letter dated 17October 1995. TheTMB heard thepresentation byIndia, andconsidered the
elements putforward. TheBody could notmake anyrecommendation inaddition tothe
conclusionsithadreachedatitsmeetingon12-15September1995,(G/TMB/R/3,paragraph19),
norcould theTMB reach aconsensus onwhether ornottherestraint onCategory 435could
continue tobemaintained inlightoftheabsence ofconsensus ontheexistence ofactual threat
ofserious damage. TheTMB therefore considered itsreview ofthematter under therelevant
provisions oftheATC completed."
9. Since thematter arising outoftherequest forconsultations issued bytheUnited States on
18April 1995toIndiainrespect ofCategory 435andrestraint imposed bytheUnited States onIndia's
exports ofCategory 435on14July1995, effective from18April 1995, remains unresolved inspite
of:
- bilateral consultations between India andtheUnited States heldunder paragraph 7of
Article 6oftheATC inApril andJune1995;
- theexamination ofthematter bytheTMB under Article 6.10oftheATC atitsThird
andFourth Meetings inAugust andSeptember 1995;
- thecommunication sentbytheGovernment ofIndiainOctober 1995, without prejudice
toitsrights under theWTO Agreement, totheTMB under Article 8.6oftheATC
regarding continuation, bytheUnited States, oftherestraint onCategory 435imports
fromIndiaintotheUnitedStatesnotwithstandingtheabsenceofaTMBrecommendation
upholding thesafeguard action taken under Article 6bytheUnited States; and
- thereview ofthematter bytheTMB initsSeventh Meeting inNovember 1995 and
thereport oftheTMB onthisSeventh Meeting,
myGovernment considers thatallrequirements inArticle 8.10oftheATC fordirect recourse to
paragraph 2ofArticle XXIII ofGATT 1994 havebeenmet. India therefore requests thatapanel be
established atthenextmeeting oftheDSBpursuant toArticle XXIII:2 ofGATT 1994, Article 6of
theDSU andArticle 8.10andother relevant provisions oftheATC.
10. India requests thatthepanel consider andfindthat:
1. Therestraint introduced bytheUnited States on14July1995onimports ofCategory
435(Women 'sandgirls'wool coats) from India effective from 18April 1995 is
inconsistent withArticle 6,8and2oftheATC.
2. Theaction oftheUnited States inimposing therestraint onimports ofCategory 435
fromIndianullifies orimpairs thebenefits accruing toIndiaunder theWTO Agreement,
andunder GATT 1994 andtheATC inparticular.
3. Theaction oftheUnited States incontinuing withtherestraint onCategory 435isalso
unjustified inthelight oftheTMB'sfinding thatserious damage hasnotbeen
demonstrated andinthelightofabsence ofconsensus intheTMB ontheexistence
ofactual threat ofserious damage.W/DS32/1
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4. TheGovernment oftheUnited States should bring themeasure intoconformity with
theATC bywithdrawing therestraint imposed bythem onimports ofCategory 435
from India.
11. India alsorequests asupplementary finding bythepanel that:
(i) Absence ofaclearrecommendation bytheTMB upholding thesafeguard action taken
bytheUnited States implies thattheTMB doesnotfindthesafeguard action justified
andtherefore theimporting country hasalegalobligation towithdraw therestraint.
(ii) According totheATC, notably itsArticle 6,theonusofdemonstrating serious damage
oractual threat isontheUnited States astheimporting country. TheUnited States
therefore hadtochoose atthebeginning oftheprocess whether itwillclaim the
existence oftheserious damage oractual threat. These arenotinterchangeable because
thedatarequirement would varywiththechosen situation.
(iii) ThereisnoprovisionintheATCunderwhichtheUnitedStatesastheimportingcountry
canimpose arestraint withretrospective effect.
12. IndiarequeststhatthepanelbeestablishedwithstandardtermsofreferenceassetoutinArticle7
oftheDSU.
13. Indiafurther requests thatthisrequest fortheestablishment ofapanel beinscribed ontheagenda
ofthenextmeeting oftheDSBscheduled for27March 1996andbecirculated toallWTO Members.