The Three Big Rounds of US Unilateralism Versus WTO Multilateralism During the Last Decade: A Combined Analysis of the Great 1994 Sovereignty Debate Section 301 Disputes (1998–2000) and Section 201 Disputes (2002–2003)

CHEN, An

doi:10.1007/978-3-642-40817-5_4

An CHEN⁴

Part of the book series: Understanding China ((UNCHI))

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Abstract

Is international trade the guarantor of peace, liberty, and security? In my view, the answer to this question can be in either way: Yes! or No! To be brief, if international trade is conducted on the basis of equity and mutual benefit, it can be the guarantor of global peace, liberty, and security. However, if international trade is based on inequity and unilateral selfishness, it can otherwise be the destroyer of peace, liberty, and security and even the motivation of war—not only trade war but real war with fire, cannons, and bombs!

This article was first published in the Temple International & Comparative Law Journal (TICLJ), 2003, Vol. 17, No. 2, pp. 409–466. It was then updated and amended in July 2004. Under TICLJ’s kind permission, the article was selected and republished in the form of a pamphlet by the South Centre (Geneva) as its T.R.A.D.E. working papers series No. 22 and was posted on the website of South Centre, to make it more widely known and accessible. After preliminary comments and discussions by some international scholars, the article was amended again and submitted to ASIL/IELG Conference held in Washington, DC, February 24–26, 2005. The topic of this Conference is “International Trade as the Guarantor of Peace, Liberty and Security?” Afterward, this long article was revised and re-entitled “International Trade as the Guarantor of Peace, Liberty and Security?” as compiled in the collect book Redefining Sovereignty in International Economic Law (edited by W. Shan et al.), Hart Publishing, 2008, pp. 87–145.

The author would like to thank Dr. Chen Huiping, Dr. Cheng Hongxing, and Dr. Chi Manjiao at Xiamen University School of Law, for their kind help with the English version of this article. The author is also grateful to TICLJ editors in chief Dr. David B. McGinty and Dr. Mark Urbanski as well as article editor Dr. Laura K. Kolb for their kind support.

The citations and commentary on legal provisions in this article were based upon the related laws and regulations effective during 2000–2004. It is hereby suggested to check and compare them with the further development of these legal provisions since then, so as to better understand their historical, gradual maturity and obtain the most recent information.

Furthermore, please note that the phrase “The Great 1994 Sovereignty Debate,” which is used throughout this paper to discuss a series of debates in the United States, derives from Professor John H. Jackson’s article, The Great 1994 Sovereignty Debate: United States Acceptance and Implementation of the Uruguay Round Results, 36 Colum. J. Transnat’l L. 157, 162 (1997). These debates are often referred to as the Great Debate(s).

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Notes

1.
See Section 201 of the Trade Act of 1974, 19 U.S.C.§2251.
2.
WTO Final Panel Report [1] [hereinafter U.S. Certain Steel Products]. The Secretariat noted at the beginning of the Report that
In the disputes, WT/DS248, WT/DS249, WT/DS251, WT/DS252, WT/DS253,WT/DS254, WT/DS258, and WT/DS259, as explained in paragraph 10.725 of the Panel’s Findings, the Panel decided to issue its Reports in the form of a single document constituting eight Panel Reports, each of the Reports relating to each one of the eight complainants in this dispute. The document comprises of a common cover page, a common Descriptive Part, and a common set of Findings in relation to the complainants’ claims that the Panel decided to address. This document also contains Conclusions and Recommendations that, unlike the Descriptive Part and the Findings, are particularized for each of the complainants. Specifically, in the Conclusions and Recommendations, separate document numbers/symbols have been used for each of the complainants (WT/DS248 for the European Communities, WT/DS249 for Japan, WT/DS251 for Korea, WT/DS252 for China, WT/DS253 for Switzerland, WT/DS254 for Norway, WT/DS258 for New Zealand, and WT/DS259 for Brazil).
The background for such an approach is: Although all complaints made by the eight co-complainants were considered in a single panel process, the United States requested the issuance of eight separate panel reports, claiming that to do otherwise would prejudice its WTO rights, including its right to settle the matter with individual complainants. The complainants vigorously opposed to this request, stating that to grant it would only delay the panel process. The Panel decided to issue its decisions in the said form of “one document constituting eight Panel Reports.” Thus, for WTO purposes, this document is deemed to be eight separate reports, relating to each of the eight complainants in this dispute. In the Panel’s view, this approach respected the rights of all parties while ensuring the prompt and effective settlement of the disputes. See United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Final Reports of the Panel (circulated 11/07/2003), WT/DS248/R, WT/DS249/R, WT/DS251/R, WT/DS252/R, WT/DS253/R, WT/DS254/R, WT/DS258/R, and WT/DS259/R.
3.
Letter from Robert B. Zoellick [2].
4.
Proclamation No. 7529, 67 Fed. Reg. 10553 (Mar. 5, 2002); Memorandum of March 5, 2002, 67 Fed. Reg. 10593.
5.
EU Draws up Steel Sanctions List, CNN.COM (Mar. 23, 2002), at http://edition.cnn.com/2002/WORLD/europe/03/23/steel/?related
6.
Patrick Lannin [3].
7.
EU Draws up Steel Sanctions List, supra note 5.
8.
Lannin, supra note 6; see also 2002 J.O. (L. 85) 1.
9.
2002 J.O. (L. 85) 1.
10.
United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request to Join Consultations-Communications from Korea, WTO Doc. WT/DS258/4 (Jun. 4, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request to Join Consultations-Communications from Norway, WTO Doc. WT/DS258/5 (Jun. 4, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request to Join Consultations-Communications from China, WTO Doc. WT/DS258/6 (Jun. 4, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request to Join Consultations-Communication from the European Communities WTO Doc. WT/DS258/2 (May 29, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request to Join Consultations-Communication from Japan, WTO Doc. WT/DS258/3 (May 29, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for Consultations by New Zealand, WTO Doc. WT/DS258/1 (May 21, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for Consultations by Chinese Taipei, WTO Doc. WT/DS274/1 (Nov. 11, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for Consultations by Brazil, WTO Doc. WT/DS259/1 (May 23, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for Consultations by Switzerland, WTO Doc. WT/DS253/1 (Apr. 8, 2002). Canada, Chinese Taipei, Cuba, Mexico, Thailand, Turkey, and Venezuela participated in the Panel proceedings as third parties. U.S. Certain Steel Products, supra note 2.
11.
United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by Brazil, WTO Doc. WT/DS259/10 (Jul. 22, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by New Zealand, WTO Doc. WT/DS258/9 (Jun. 28, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by Norway, WTO Doc. WT/DS254/5 (Jun. 4, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by Switzerland, WTO Doc. WT/DS253/5 (Jun. 4, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by China, WTO Doc. WT/DS252/5 (May 27, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by Korea, WTO Doc. WT/DS251/7 (May 24, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by Japan, WTO Doc. WT/DS249/5 (May 24, 2002); United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Request for the Establishment of a Panel by European Communities, WTO Doc. WT/DS248/12 (May 8, 2002).
12.
U.S.-Certain Steel Products, supra note 2.
13.
Id.
14.
Id.
15.
Id. These Panel Reports must be adopted by the DSB within sixty days after the date of its circulation unless a party to the dispute decides to appeal, or the DSB decides by consensus not to adopt the report. See Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, art. 16(4), Legal Instruments-Results of the Uruguay Round vol. 31, 33 I.L.M. 81 (1994) [hereinafter DSU]. If the Panel Reports are appealed to the Appellate Body, they cannot be considered for adoption by the DSB until after the completion of the appeal. Id.
16.
USA-Steel: Full Victory for the Co-Complainants in the WTO Panel against the U.S. Steel Safeguards (Jul. 11, 2003), http://europa.eu.int/comm/trade/issues/sectoral/industry/steel/legis/pr_110703_en.htm
17.
Id.
18.
Id.
19.
Id.
20.
Meng Yan [4].
21.
Id.
22.
Id.
23.
Id.
24.
United States-Definitive Safeguard Measures on Imports of Certain Steel Products-Notification of an Appeal by the United States under Paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, WTO Doc., WT/DS248/17, WT/DS249/ll, WT/DS251/12, WT/DS252/10, WT/DS253/10, WT/DS254/10, WT/DS258/14, WT/DS259/13 (Aug. 14, 2003) [hereinafter Safeguards Agreement], available at http://www.wto.org/english/tratop_e/dispu_e/appellate_body_e.htm
25.
Id.
26.
Id.
27.
Id.
28.
Id.
29.
United States-Definitive Safeguard Measures on Imports of Certain Steel Products-AB-2003-3-Report of the Appellate Body (circulated 10/11/2003), WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, and WT/DS259/AB/R.
30.
Minutes of Meeting, DSB,WTO,10 December, WT/DSB/M/160, 27 January 2004, (04-0286).
31.
Id.
32.
[US] President’s Statement on Steel, at
http://www.whitehouse.gov/news/release/2003/12/20031204-5.html
33.
This phrase was first coined by John H. Jackson in his article, The Great 1994 Sovereignty Debate: United States Acceptance and Implementation of the Uruguay Round Results, 36 Colum. J. Transnat’l L. 157, 160, 162, 174, 179, 182, 188 (1997), available at http://www.worldtradelaw.net/articles/jacksonsovereignty.pdf
34.
Id.
35.
Id.
36.
Id. at 166; see also World Trade Organization, Accession: Technical note, Completion of the Working Party Mandate,
http://www.wto.org/english/thewto_e/acc_e/tn_4accprocess_e_e.htm
37.
Philip Jessup, A Modern Law of Nations 1–3, 12–13, 40–42 (Macmillan 1948). Jessup was a professor at Columbia University from 1949 to 1953. He was appointed as the Ambassador-at-Large, playing an active role in foreign affairs. In 1970, he was chosen as a Judge of the International Court of Justice.
38.
Louis Henkin, The Mythology of Sovereignty, ASIL Newsletter, March–May 1993, 1–2, available at http://www.asil.org/pres.htm; Louis Henkin, International Law: Politics and Values, xi, 1–2 (Mantinus Nijhoff 1995). “This volume derives from a series of lectures delivered as the ‘general course’ at the Hague Academy of International Law in July 1989.” Id. Mr. Henkin served as President of the American Society of International Law and was a long-time professor at the Columbia Law School.
39.
See Henkin, supra note 38.
40.
Id. at 1.
41.
Id. at 2.
42.
Id. at 8.
43.
Id. (emphasis added).
44.
See Henkin, supra note 38, at 10 (emphasis added).
45.
Id. (emphasis added).
46.
Id. at 2.
47.
Id.
48.
Louis Henkin [5].
49.
Id. (emphasis added). “S” is the first letter of the word sovereignty. This sentence means that sovereignty should be relegated away to the shelf of history as a relic. If “S” and “word” are read together, the sentence reads, “Away with the sword,” thus implying that sovereignty is an old but “terrible” sword that needs to be done away with.
50.
Matthew Schaefer, Sovereignty, Influence, Realpolitik and the World Trade Organization, 25 Hastings Int’l & Comp. L. Rev. 341 (2002); Patrick J. Buchanan, The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy (Little Brown 1998); Patrick J. Buchanan, Showdown at the GATT Corral, Denver Post, Oct. 9, 1994, at E4.
51.
Schaefer, supra 46, at 341; Patrick J. Buchanan, Fritz Hollings Derails the GATT Express, Denver Post, Oct. 2, 1994, at F4 (arguing that “[i]n the World Trade Organization, established by GATT, America surrenders her national sovereignty, her freedom of action to defend her own economic vital interests from the job pillagers of Tokyo and Beijing. We give up our freedom to foreign bureaucrats who will assume authority over America’s commerce that the Founding Fathers gave exclusively to the Congress of the United States. And, if we are outraged by WTO’s decisions, we have just one vote, out of 123, to challenge those decisions… And in [the] WTO, the U.S. has no veto power.”)
52.
Jackson, supra note 33.
53.
Id. at 188 n. 3.
54.
Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, LEGAL INSTRUMENTS-RESULTS OF THE URUGUAY ROUND vol. 1 (1994), 33 I.L.M. 81 (1994) [hereinafter Final Act].
55.
Jackson, supra note 33, at 166.
56.
Id. at 165.
57.
General Agreement on Tariffs and Trade, Oct. 30, 1947, art. XXII, 61 Stat. A- 11, T.I.A.S. 1700, 55 U.N.T.S. 194, available at http://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm#articleXXII [hereinafter GATT].
58.
Id. art. XXIII.
59.
Jackson, supra note 33, at 165.
60.
Id.
61.
Id.
62.
Id. at 189 n. 16.
63.
Id. at 176.
64.
DSU, supra note 15, art. 2(1).
65.
Id.
66.
Jackson, supra note 33, at 176; DSU, supra note 15, art. 16(4).
67.
DSU, supra note 15, art. 16(4).
68.
Id. arts. 6(1), 16(4), 17(14).
69.
Id. arts. 3(7). The other party may suspend the application of the concessions or other obligations under the covered agreements on a discriminatory basis to those members who neither abide by the WTO rule nor accept the rulings of the DSB. Id.
70.
Jackson, supra note 33, at 168–169.
71.
Id. at 169; The World Trade Organization and U.S. Sovereignty: Hearings before the Senate Committee on Foreign Relations, 103rd Cong. (1994) (testimony of Ralph Nader, Center for Responsive Law), available at 1994 WL 4188790 [hereinafter Ralph Nader Testimony]. The heated argument between the two factions of Congress, “combined with a general public debate in all the various media, as well as many academic, business, and other public forums,” created a great debate that swept across the nation. Jackson, supra note 33, at 169–70. Professor Jackson named it “The Great 1994 Sovereignty Debate” and proclaimed 1994 a year of “historic importance” in US history. Id.
72.
See Ralph Nader Testimony, supra note 71; Ross Perot, Appeal to Trade Body Carries Risks for U.S., HOUSTON CHRON. 2, Jun. 14, 1996.
73.
See, e.g., 140 Cong. Rec. H11492 (Nov. 29, 1994) (statements of Rep. Archer, Rep. Coble, Rep. Richardson, and Rep. Bunning); 140 Cong. Rec. S15,342 (Dec. 1, 1994) (statements of Sen. Domenici, Sen. Cochran, Sen. Hutchison, Sen. Roth, Sen. Gramm, and Sen. Grassley).
74.
Jackson, supra note 33, at 177 (emphasis added).
75.
Id. at 174.
76.
Id. at 179.
77.
Id. at 173.
78.
Id. at 172 (emphasis added).
79.
Jackson, supra note 33, at 172.
80.
Id. at 160, 179, 182, 187–188.
81.
Id. at 160.
82.
Id. at 175.
83.
Results of the Uruguay Round Trade Negotiations: Hearings Before the Senate Finance Committee, 103d Cong. 114 (1994) (Mar. 23, 1994, testimony of John H. Jackson); John H. Jackson et al., Legal Problems of International Economic Relations: Cases, Materials and Text 305 (3d ed. 1995) [hereinafter Legal Problems of International Economic Relations].
84.
Legal Problems of International Economic Relations, supra note 79.
85.
140 Cong. Rec. S15, 342 (Dec. 1, 1994) (statements of Sen. Domenici, Sen. Cochran, Sen. Hutchison, Sen. Roth, Sen. Gramm, and Sen. Grassley).
86.
Id.
87.
Id.
88.
140 Cong. Rec. H11493 (Nov. 29, 1994); S. Vote RPT. 329 (Dec. 1, 1994).
89.
Jackson, supra note 33, at 186; A Bill to Establish a Commission to Review the Dispute Settlement Reports of the World Trade Organization and for Other Purposes, S. 16, 104th Cong. (1995) [hereinafter A Bill to Establish a Commission]. “This proposal has not become law, although a series of attempts were made to enact it in 1995 and 1996.” Jackson, supra note 33, at 186.
90.
Jackson, supra note 33, at 186; A Bill to Establish a Commission, supra note 89.
91.
A Bill to Establish a Commission, supra note 89.
92.
Id.
93.
Id.; Gary Horlick [6].
94.
Jackson, supra note 33, at 187.
95.
See Jackson, supra note 33, at 158–59.
96.
Id.
97.
See Video Record, “the Conference on International Economic Law and China in Its Economic Transition,” held in Xiamen, China, Nov. 4–5, 2004.
98.
19 U.S.C. §§2411–2420 (2003). Section 301 refers to §301 of the US Trade Act of 1974, whose contents have been expanded through several amendments, and incorporated into the Omnibus Trade and Competitiveness Act of 1988, as Section 301–310. These ten sections, as a whole, are habitually referred to as Section 301.
99.
The USTR is appointed by the US President and approved by the Senate, with the rank of Ambassador Plenipotentiary and Extraordinary. Formerly, the USTR conducted US foreign trade negotiations. Since 1974, its office has been located in Washington, D.C., and has become a permanent institution of the US government. Its authority has been extended constantly, participating in the US government’s foreign trade decision-making, issuing policy guidance on foreign trade to other branches and departments of the US federal government, representing the US government in presiding or presenting various foreign trade negotiations, accepting the “petition” of the US commercial actors and defending their rights and interests in foreign trade, implementing Section 301 to initiate “tort and contract breach” investigations on its trading partners of foreign governments, and determining whether or not to take retaliatory actions or impose sanction measures.
100.
For example, take the three retaliatory measures and economic sanctions that China encountered. In November of 1991, the USTR, under the pretext that China had failed to provide “sufficient” and “effective” protection for the intellectual property rights of US businesses and failed to provide “equitable” market access opportunity to those American businessmen, listed China as a “Priority Foreign Country” to which Section 301 should apply. Peter K. Yu, From Pirates to Partners: Protecting Intellectual Property in China in the Twenty-First Century, 50 Am. Univ. L.R. 131, 141 (2001). Meanwhile, it unilaterally published a “retaliatory list” against China with a resulting cost of $1.5 billion. Id. at 142. Through repeated consultations between the two sides, the dispute was ultimately resolved. Memorandum of understanding between China (PRC) and the United States on the Protection of Intellectual Property, Jun. 17, 1993, P.R.C.-U.S., T.I.A.S. No. 12036 (1995). However, on June 30, 1994, the United States played the old trick again, listing China once more as a Priority Foreign Country. UTSR, 1995 ANNUAL RPT., available at http://www.ustr.gov/html/1996_tpa_monitor_3.html. Simultaneously, the USTR put forward many harsh requirements that directly contravened and interfered with China’s legislation, jurisdiction, and internal affairs. For example, the United States required the amendment of Chinese civil law, shortening the time limit for judicial hearings, revising the provisions on the charge for civil litigation with the purpose of lowering the charge, engaging in a large-scale attack on torts committed against US intellectual property rights in China, reporting the results of such actions to the United States until it was satisfied, and quarterly reporting to the US government the situation of China’s investigation and disposal of the torts on US intellectual property rights. As the US requirements were too harsh, after seven rounds of consultations, the dispute remained unsolved. David E. Sanger, U.S. Threatens $2.8 Billion on Tariffs on China Exports, N.Y. TIMES, Jan. 1, 1995, at A14. Then, on December 31, 1994, the United States unilaterally announced its retaliatory list against China would increase in cost, to approximately $2.8 billion, in an attempt to compel China to succumb. Id. In response, China carried out direct, justified, favorable, and dignified counterattacks. Martha M. Hamilton, U.S. to Hit China with Stiff Tariffs; Sanctions are Largest Ever Imposed, WASH. POST, Feb. 5, 1995, at A1; Yu, supra, at 144. On the one hand, China pointed out that the United States’ use of unilateral retaliatory measures to cope with its trading partners was obviously in breach of the principle that disputes should be resolved through multilateral consultations, which is required by many international treaties and conventions, and thus should receive general condemnation in the international community. On the other hand, in accordance with Article 7 of the Foreign Trade Law of the People’s Republic of China—which provides that if any country or region takes discriminatory, restrictive, or other similar measures of trade against China—China can take corresponding measures on the basis of factual circumstances. The Ministry of Foreign Trade and Economic Cooperation of the PRC (MOFTE.C.) published an “intended anti-retaliatory list on the United States,” which provided that double tariffs would be levied on some large quantity goods imported from the United States, suspension of the import of other large quantity goods from the United States, suspension of the negotiations of some large-scale joint venture projects with US partners, and suspension of the applications of American businessmen to establish investment corporations in China. Yu, supra, at 144. Meanwhile, it was clearly announced that “the above measures would come into effect when the United States officially implemented its retaliation on Chinese exported goods.” Id. at 144. Considering that its “retaliation” and “sanctions” on China could not be fulfilled, along with the possibility of losing the big market in China, the United States had to restrain itself from its former attitude and abolish some of its formerly adhered to harsh requirements. See Julia Chang Bloch, Commercial Diplomacy, in Living with China: U.S.-China Relations in the Twenty-First Century 185, 197–198 (Ezra F. Vogel ed. 1997). On February 26, 1995, China and the United States reached a “win-win” compromise in the form of “exchange of notes”; thus, an on-the-trigger “trade war,” evoked by the United States, was avoided. See Agreement Regarding Intellectual Property Rights, Feb. 26, 1995, P.R.C.-U.S., 34 I.L.M. 881 (1995). Between the spring and summer of 1996, a trade dispute between China and the United States rose again. Richard W. Stevenson, U.S. Cites China for Failing to Curb Piracy in Trade, N.Y. Times, May 1, 1996, at D4; Yu, supra, at 148. The United States unilaterally listed China as the Priority Foreign Country under Section 301 and announced a retaliatory list on China to the value of $2 billion. Id. at D4; Yu, supra, at 148. Correspondingly, the department of Chinese government solemnly declared again that “[t]o safeguard our national sovereignty and dignity,… we are forced to take corresponding anti-retaliation measures.” The Announcement of the MOFTE.C.: The PRC’s Anti-retaliation List on the U.S., People’s Daily, May 16, 1996 (on file with author); Sanger, supra, at A1. The anti-retaliation list contained eight items and provided that “[t]he above measures would come into effect once the United States implemented its retaliatory measures on Chinese exported goods.” Id.; Sanger, supra, at A1. On June 17, 1996, through arduous negotiations, the two sides reached an acceptable agreement. China Implementation of the 1995 Intellectual Property Rights Agreement, Jun. 17, 1996, P.R.C.-U.S., available at http://www.mac.doc.gov/China/Agreements.htm. This new “contest” demonstrated once again that the trade disputes between states, especially between large, powerful ones, should and could only be resolved justifiably and reasonably through equitable consultations. An action such as unilateral retaliation, which is merely bullying the weak by relying on one’s power, is destined to end fruitlessly, and what is left is an arbitrary image.
101.
19 U.S.C. §2411(a).
102.
Id. §2411; Yuqing Zhang and Yue Guan, Section 301 of the US Trade Act, Intl. Trade 6–9 (1992); Guohua Yang, Study on the Section 301 of the U.S. Trade Act 36–57 (1998); see generally United States-Sections 301–310 of the Trade Act of 1974, WTO Panel Report WT/DS/152/R (Dec. 22, 1999).
103.
Jackson, supra note 33, at 183.
104.
Id.
105.
Id.
106.
Id. at 183–184 (emphasis added).
107.
Guanying Zhen, Frightening Words In The Flourishing Age: Law Of Justice 42 (1898). It is amazing that since human society has stepped into the twenty-first century, the sigh of regret uttered by a thinker from a weak nation in the late nineteenth century is still of realistic importance and is a sharp satire to the history and hegemony who do not change their mode of operation.
108.
Referring to A Bill to Establish a Commission to Review the Dispute Settlement Reports of the World Trade Organization and for Other Purposes, S. 16, 104th Cong. (1995).
109.
Letter from Michael Kantor to Renato Ruggiero (May 9, 1995), in 141 Cong. Rec. S6433; James Gerstenzang, US, Japan Still on Collision Course over Trade Diplomacy: Clinton and Murayama Meet at Summit, but Neither Budges on Sanction Threat, L.A. Times, Jun. 16, 1995, at 18.
110.
Statement by Ambassador Michael Kantor, Office of the USTR, Executive Office of the President (May 16, 1995), available at http://www.ustr.gov/releases/1995/05/95-36.html [hereinafter Kantor Statement]; William E. Scanlan, A Test Case for the New World Trade Organization’s Dispute Settlement Understanding: The Japan-United States Auto Parts Dispute, 45 Kan. L. Rev. 591, 605 (Mar. 1997). This rate of duty is much higher than the binding tariff of 2.5 % that the United States committed to on the tariff concession schedule. Calculated on the basis of the total value of the same category of imported goods in 1994, the total amount of the newly imposed tariff is $590 million.
111.
Kantor Statement, supra note 110.
112.
United States-Imposition of Import Duties on Automobiles from Japan under Sections 301 and 304 of the Trade Act of 1974, WTO Doc. WT/DS6/1 (May 22, 1995) [hereinafter US-Japan Auto Disputes]; GATT, supra note 57, art. 1 (providing that each contracting member must accord mutually with “general Most-Favored-Nation Treatment, [w]ith respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and charges, and with respect to all rules and formalities in connection with importation and exportation,” and that no discriminatory measures may be taken at will); GATT, supra note 57, art. 2 (providing that each contracting member pledge to each other to levy tariffs subject to the listed preferential tariff in the annexed “tariff concession schedule” of each member, and not to increase tariffs arbitrarily); DSU, supra note 15, art. 23 (providing that the trade disputes arising between contracting members should be resolved in accordance with the DSU multilateral procedures and rules, and unilateral measures must not be taken willfully).
113.
US–Japan Auto Disputes, supra note 112.
114.
US–Japan Automotive Agreement, Aug. 23, 1995, reprinted in 34 I.L.M. 1482 (1995) [hereinafter Auto Agreement]; USTR Fact Sheet on US–Japan Auto and Auto Parts Agreement Released Jun. 28, 1995, 12 Int’l Trade Rep. (BNA) 1163, 1163–1164 (Jul. 5, 1995).
115.
Auto Agreement, supra note 114.
116.
Id.
117.
European Communities-Regime for the Importation, Sale and Distribution of Bananas-Recourse to Article 21.5 by Ecuador, WTO Panel Report, WT/DS27/RW/ECU (Apr. 12, 1999) [hereinafter Ecuador Panel Report].
118.
James Cooper, Spirits in the Material World: A Post Modern Approach to United States Trade Policy, 14 Am. U. Int’l L. Rev. 957, 972 (1999); Stephen Fidler & Neil Bucklar, U.S. Threatens 100 % Tax on European Union Exports in Banana Trade War, FIN. TIMES, Nov. 11, 1998, at 1 (including cheese, clothing, cosmetics, electronic goods, paper and wine among the products threatened with tariffs).
119.
EU Attacks Clinton over Bananas, BBC NEWS, Nov. 11, 1998, available at http://news.bbc.co.uk/1/hi/business/the_economy/212262.stm; Stephen Bates & Larry Elliott, Banana War Puts Global Economy at Risk, THE GUARDIAN, Nov. 12, 1998, available at http://www.guardian.co.uk/banana/Story/0,2763,208538,00.html [hereinafter Banana Wars]. In his letter to President Clinton, Jacques Santer stated that “[n]o WTO member had the right unilaterally to determine whether another member is in compliance with WTO rules.” Id.
120.
Press Release No. 97/98, European Union, Statement by Sir Leon Brittan: EU/US Banana Dispute (Nov. 10, 1998), available at http://www.eurunion.org/news/press/1998-4/pr97-98.htm. Nigel Gardner, spokesman for European Trade Commissioner Sir Leon Brittan, was also quoted as saying, “What we will not do is negotiate with the gun of unilateralism illegally at our heads.” Fight Over Banana Trade Escalates, Natl. L. J. (Nov. 30, 1998), at A14.
121.
Banana Wars, supra note 120.
122.
European Communities-Regime for the Importation, Sale and Distribution of Bananas-Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WTO Arbitrator Dec., WT/DS27/ARB (Apr. 9, 1999) [hereinafter European Communities Arbitration].
123.
Id. para. 1.1.
124.
John R. Schmertz, Jr. & Mike Meier, US–EU Banana Dispute Continues Despite WTO Arbitration: EU Issues Regulation to Increase Support to its ACP Banana Suppliers, Int’l L. Update, May 1999, at 5; Implementation of WTO Recommendations Concerning the European Communities’ Regime for the Importations, Sale, and Distribution of Bananas, 64 Fed. Reg. 19209 (Apr. 19, 1999); Eliza Patterson, The U.S.-EU Banana Dispute, ASIL INSIGHTS, Feb. 2001, http://www.asil.org/insights/insigh63.htm [hereinafter The US–EU Banana Dispute].
125.
John Lloyd, Yanks Go Home… But Not Just Yet: U.S. Sanctions, New Statesman, Mar. 12, 1999, at 14.
126.
Banana Deal Frittered Away, BBC News, Dec. 19, 1999, available at http://news.bbc.co.uk/1/hi/business/238370.stm; Charlotte Denny & Stephen Bates, Bananas: It’s a Trade War, THE GUARDIAN, Mar. 5, 1999, available at http://www.guardian.co.uk/banana/Story/0,2763,208540,00.html; Crisis Talks Over Bananas, BBC News, Mar. 8, 1999, available at http://news.bbc.co.uk/1/hi/business/the_economy/292041.stm; US Declaring War Over Bananas, BBC News, Mar. 8, 1999, available at http://news.bbc.co.uk/1/hi/world/292654.stm; Mark Milner, WTO Talks up Banana Peace, The Guardian, Mar. 8, 1999, available at http://www.guardian.co.uk/bnana/Story/0,2763,209337,00.html
127.
The US–EU Banana Dispute, supra note 120.
128.
European Communities-Regime for the Importation, Sale and Distribution of Bananas-Recourse to Article 21.5 by the European Communities, WTO Panel Report, WT/DS27/RW/EEC (Apr. 12, 1999), paras. 7.1–7.2 [hereinafter European Communities Panel Report].
129.
European Communities Arbitration, supra note 122, paras. 1.1, 8.1. On April 11, 2001, the United States and the EU reached an understanding in their long running dispute over bananas that called for the EU to adopt a new licensing system for bananas by July 1, 2001. In return, the United States lifted retaliatory duties on $191 million worth of EU products. See US Trade Representative Announces the Lifting of Sanctions on European Products as EU Opens Market to US Banana Distributors, Office of the United States Trade Representative, Executive Office of the President, Jul. 1, 2001, see:
http://www.useu.be/Categories/Bananas/BananaUSSanctionsEUJuly1.html
130.
The Week in Review, Natl. L. J., Apr. 19, 1999, at A8.
131.
United States-Sections 301–310 of the Trade Act of 1974, WTO Panel Report, WT/DS152/R (Dec. 22, 1999), para. 1.2 [hereinafter Sections 301–310 Panel Report]; Analysis of WTO Dispute Settlement Cases 563–571 (Lanye Zhu ed., 2000).
132.
See supra Part V.
133.
Sections 301–310 Panel Report, supra note 131, para. 5.150.
134.
See United States-Sections 301–310 of the Trade Act of 1974, Request to Join Consultations, WTO Doc. WT/DS152/9 (Dec. 14, 1998) (Communication from Columbia), WT/DS152/2 (Dec. 9, 1998) (Communication from Dominican Republic), WT/DS152/3(Dec. 9, 1998) (Communication from Panama), WT/DS152/4 (Dec. 9, 1998) (Communication from Guatemala), WT/DS152/5 (Dec. 14, 1998) (Communication from Mexico), WT/DS152/6 (Dec. 14, 1998) (Communication from Jamaica), WT/DS152/7 (Dec. 14, 1998) (Communication from Honduras), WT/DS152/8 (Dec. 14, 1998) (Communication from Japan), WT/DS152/10 (Dec. 14, 1998) (Communication from Ecuador); DSU, supra note 15, art. 4.11.
135.
Sections 301–310 Panel Report, supra note 131, para. 1.2.
136.
Id. para. 1.5.
137.
Id. para. 1.7.
138.
Id. para. 1.5.
139.
United States-Sections 301–310 of the Trade Act of 1974, Constitution of the Panel Established at the Request of the European Communities, WTO Panel Report, WT/DS152/12 (Apr. 6, 1999).
140.
Id.
141.
DSU, supra note 15, art. 12.8.
142.
Id. art. 12.9.
143.
Sections 301–310 Panel Report, supra note 128.
144.
Id.
145.
United States-Sections 301–310 of the Trade Act of 1974, WTO Panel Report, WT/DS152/14 (Feb. 28, 2000).
146.
Sections 301–310 Panel Report, supra note 124, paras. 3.1, 4.1–4.18, 4.26–4.48, 4.100–4.199, 4.126, 4.146–4.153.
147.
Id. paras. 4.1, 4.3; DSU, supra note 15, art. 23 (emphasis added).
148.
DSU, supra note 15, art. 23.2(a).
149.
Id.
150.
Id.
151.
19 U.S.C. §2414(a)(1)(A) (2003).
152.
19 U.S.C. §2416(b) (2003).
153.
DSU, supra note 15, art. 23.2(c).
154.
19 U.S.C. §2416.
155.
GATT, supra note 57, arts. I, II, III, VIII, XI.
156.
19 U.S.C. §2416.
157.
Sections 301–310 Panel Report, supra note 124.
158.
Id. para. 4.35.
159.
Id. paras. 4.43–4.44, 7.5–7.6. The term “Damocles sword effect” originates from Greek mythology in which the tyrant Dionysius ordered his official Damocles to be seated. A sword was hung by a horse’s mane over Damocles’ head, indicating that Damocles was in jeopardy.
160.
Id. para. 4.46.
161.
Id. paras. 4.45–4.48.
162.
Sections 301–310 Panel Report, supra note 131, para. 4.59.
163.
Id. (quoting WTO Agreement Article XVI:4).
164.
Id. para. 3.1.
165.
Id. para. 4.51.
166.
Id. para. 4.52.
167.
Sections 301–310 Panel Report, supra note 131, para. 4.58.
168.
Id. para. 4.62.
169.
Id. para. 4.65.
170.
Id. para. 4.121.
171.
Sections 301-310 Panel Report, supra note 131, para. 7.110 (emphasis added).
172.
Id. para. 7.115.
173.
Id. n. 683; The Uruguay Round Agreements Act: Statement of Administrative Action at 366, reprinted in H.R. Doc. No. 103–316 [hereinafter SAA].
174.
Sections 301–310 Panel Report, supra note 131, para. 4.65.
175.
Id. para. 3.2.
176.
Id. para. 4.145.
177.
United States-Sections 301–310 of the Trade Act of 1974, WTO Panel Report, WT/DS152/14 (Feb. 28, 2000).
178.
Id.
179.
Sections 301–310 Panel Report, supra note 131, para. 7.12 (emphasis added).
180.
Id. para. 7.13 (emphasis added).
181.
Id. para. 7.31(c) (emphasis added).
182.
Id. para. 7.31(d) (emphasis added).
183.
Sections 301–310 Panel Report, supra note 131, para. 7.97 (emphasis added).
184.
Id. para. 7.98.
185.
Id. para. 7.109 (emphasis added).
186.
Id. para. 7.111 (emphasis added).
187.
Id. para. 4.108 (emphasis added) (quoting SAA, supra note 164). The word “now,” as used in this paragraph refers to September of 1994, when the SAA was sent to Congress for approval. The WTO Agreement had not come into effect at that time, so international trade was conducted in accordance with the 1947 GATT.
188.
Sections 301–310 Panel Report, supra note 131, para. 7.113.
189.
Id.
190.
Id.
191.
Id. para. 8.1.
192.
Seung Wha Chang, Taming Unilateralism Under the Trading System: Unfinished Job in the WTO Panel Ruling on United States-Sections 301–310 of the Trade Act of 1974, 31 Law & Pol’y Int’l Bus. 1151, 1156 (2000) (emphasis added).
193.
Sections 301–310 Panel Report, supra note 131, para. 4.62.
194.
Id. para. 7.11
195.
Id.
196.
Id. para. 7.13.
197.
Id. para. 7.119 (emphasis in original); DSU, supra note 15, art. 11.
198.
The G7; they are Germany, United Kingdom, France, Italy, Japan, Canada, and the United States.
199.
Press Release No. 99–102, Office of the US Trade Representative, WTO Panel Upholds Section 301 (Dec. 22, 1999), available at http://www.ustr.gov/releases/1999/12/99-102.html
200.
Id.
201.
Sections 301–310 Panel Report, supra note 131, para. 7.115.
202.
Press Release No. 86/89, Delegation of the European Commission to the United States, WTO Report on US Section 301 Law: A Good Result for the European Union and the Multilateral System (Dec. 23, 1999), available at http://www.eurunion.org/news/press/1999/1999086.htm
203.
See supra Section VI.B.
204.
Chang, supra note 192, at 1185.
205.
Sections 301–310 Panel Report, supra note 131, para. 7.58–7.79.
206.
Id. para. 7.98.
207.
Id. paras. 7.104–7.113.
208.
Id. paras. 7.119, 7.13.
209.
Id. para. 7.98.
210.
Sections 301–310 Panel Report, supra note 131, para. 7.109.
211.
Id. n. 681.
212.
Id. 7.112.
213.
SAA, supra note 173, at 365–66 (emphasis added); see also Sections 301-310 Panel Report, supra note 131, para. 7.112 (quoting the SAA at 365-66.).
214.
SAA, supra note 213, at 1; see also Sections 301–310 Panel Report, supra note 131, para. 7.110.
215.
SAA, supra note 213, at 366.
216.
The Panel “recognize[d] of course that an undertaking given by one Administration can be repealed by that Administration or by another Administration.”Sections 301–310 Panel Report, supra note 131, para. 7.109.
217.
Sections 301–310 Panel Report, supra note 131, para. 7.128.
218.
On April 19, 1999, the WTO/DSU proceedings were exhausted and the United States was given permission to publish the retaliatory list by the DSB. However, on December 21, 1998, the United States unilaterally published its retaliatory list of sanctions on the E.C., four months prior to the exhaustion of the DSU proceedings.
219.
In the Automobile Parts Dispute, the United States unilaterally published its retaliatory list on May 16, 1995, without recourse to the DSB in accordance with the DSU.
220.
Notice of Determination and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: Barriers to Access to the Auto Parts Replacement Market in Japan, 60 Fed. Reg. 26745 (May 18, 1995); Press Release No. 98–113, Office of the US Trade Representative, Executive Office of the President, USTR Announcing List of European Products Subject to Increased Tariffs, (Dec. 21, 1998) (on file with author); Implementation of WTO Recommendations Concerning the European Communities’ Regime for the Importation, Sale and Distribution of Bananas, 63 Fed. Reg. 71,665-666 (Dec. 29, 1998); Press Release No. 99–17, United States Takes Customs Action on European Imports (Mar. 3, 1999) (on file with author); Section 301 Table of Cases, Japan Auto Parts No. 301–93, The E.C. and the Importation, Sale, and Distribution of Bananas No. 301–100 (Aug. 9, 1999), available at http://www.ustr.gov/reports/301report/act301.htm
221.
Sections 301–310 Panel Report, supra note 131, para. 7.13.
222.
Id. para. 7.130.
223.
Chang, supra note 192, at 1157; Jay L. Eizenstat, The Impact of the World Trade Organization on Unilateral United States Trade Sanctions under Section 301 of the Trade Act of 1974: A Case Study of the Japanese Auto Dispute and the Fuji-Kodak Dispute, 11 Emory Int’l L. Rev. 137, 153–54 (arguing that the Congressional intent underlying Section 301 is to open foreign markets by creating “credible threats of retaliation.”).
224.
See 19 U.S.C. §2411.
225.
Id.
226.
Id.
227.
Id.
228.
Id.
229.
19 U.S.C. §2411.
230.
DSU, supra note 15, art. 2.
231.
See Sections 301–310 Panel Report, supra note 131, paras. 7.89–7.92.
232.
See supra Part V of this paper.
233.
DSU, supra note 15, at pmbl.
234.
Id. art. 16.4.
235.
Id. art. 3.2 (emphasis added).
236.
Id. art. 3.7.
237.
Id. art. 11.
238.
Chang, supra note 192, at 1224–1226. The Seoul scholar, Seung Wha Chang, pointed out in the article that the Panel’s ruling stands on shaky legal ground, because the Panel did not sufficiently focus on the ambivalent position of the United States, which is expressed in the SAA as well as in other congressional records for the passage of the URAA in 1994. Id. The Panel did not make a formal ruling on the WTO consistency of specific US actions. Id. Instead, it directly supports the US denials. Id. It heavily relies on the assurances made by the United States before it during the proceeding. Id. All these pose a risk for the WTO/DSU dispute settlement mechanism. Id. These comments are of deep insight. However, at the end of the Chang’s paper, the author declared in particular that the goal of his article was not to unilaterally blame Section 301 on behalf of US trading partners, but to persuade the United States not to abuse Section 301 in the future. See id. The author claimed that Section 301 can coexist with the WTO multilateral system, that the WTO needs the United States to be a leader in maintaining its multilateral trading system, and so forth. Id. Those “good wills,” to a certain degree, demonstrate the bewilderment and naivety of the author: the hope to advise the tiger that a tiger could change its diet from meat to vegetables and the hope to cure the chronic disease of hegemony by simply applying some light, herbal medicine.
239.
Monkey King, a mythical hero of the Chinese classic novel, The Pilgrim to the West, is the apprentice to Saint Xuanzhang, an elite monk who contributed to the spread of Buddhism in China. St. Xuanzhang resolved to acquire the original Buddhist Classics from India, a country far from China, then in Tang Dynasty. Monkey King was an escort to St. Xuanzhang, but because he was intractable and sometimes disobedient, St. Xuanzhang had to utter the “splitting-headache incantation” to control him when he did not behave rightly.
240.
USTR Press Release, WTO Panel Upholds 301 (Dec. 22, 1999), available at http:/Iwww.ustr.gov/releases/1999/12/99-102.pdf
241.
See supra note, 32.

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International Law, Xiamen University Law School, Xiamen, Fujian, 361005, China
An CHEN (National Eminent & Senior Jurist Professor)

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CHEN, A. (2013). The Three Big Rounds of US Unilateralism Versus WTO Multilateralism During the Last Decade: A Combined Analysis of the Great 1994 Sovereignty Debate Section 301 Disputes (1998–2000) and Section 201 Disputes (2002–2003). In: The Voice from China. Understanding China. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-40817-5_4

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