Third Participant Oral Statement of Australia
25 October 2011
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Philippines - Taxes on Distilled Spirits - Third Participant Oral Statement of Australia [PDF 50 KB]
Members of the Division.
- Thank you for the opportunity to present Australia's views on this appeal.
Australia has provided a written submission identifying some key issues of
systemic and legal interest raised by the Philippines' appeal on the panel's
findings in this dispute and the European Union's other appeal on the panel's
approach to the European Union's claim under the second sentence of Article
III:2 of General Agreement on Tariffs and Trade (GATT 1994). Australia
would like to briefly address some of those key issues.
A. The Issues Under Appeal
(i) Article III:2 and Ad Article III of GATT 1994 - "like products"
and "directly competitive or substitutableproducts"
- In its written submission Australia briefly outlined the different
criteria based on existing WTO jurisprudence which might be used by a panel
to determine whether products are "like" for the purposes of the
first sentence of GATT 1994 Article III:2, and whether products are "directly
competitive or substitutable" for the purposes of the second sentence
of that article.
- In Australia's view the evaluation of these factors will differ in relation
to the first and second sentence of the Article III:2. Australia further notes
that the Appellate Body has described "like" products as a narrower
subset of the broader category of "directly competitive or substitutable
products". Therefore, while the panel's
finding in relation to the categorisation of products as "like"
under the first sentence of Article II:2 might reasonably inform its conclusion
as to whether the products are also "directly competitive or substitutable",
Australia submits that the panel was correct to also give full consideration
to the remaining elements of a claim under the second sentence of Article
III:2 of GATT 1994.
- Australia submits that panel has the responsibility to determine the weight
to be placed on particular factors and criteria in the interpretation of GATT
1994 Article III:2. In the current dispute, Australia considers that the comparison
of the physical characteristics of the products under consideration is a key
factor. However, Australia agrees with the reasoning of the panel, which is
consistent with previous panels and the Appellate Body, that no one criterion,
such as a difference in physical characteristics, should be considered determinative
and the evidence as a whole must be examined to determine the characterisation
of the products at issue. By way of example,
Australia notes the panel finding in Japan-Alcoholic Beverages II that
shochu and vodka were "like" products even though they contained
similar but not identical raw materials. Further,
in considering whether the shochu and imported spirits were "directly
competitive or substitutable" under the second sentence of GATT 1994
Article III:2 the panel in the same dispute found that the term '"directly
competitive or substitutable" does not suggest at all that physical resemblance
is required.. .the decisive criterion... is whether they have common end uses'.
- In considering that panel's findings in relation to the second sentence
of Article III:2 and the proximity of the relationship between the products
in this dispute, Australia observed in its submission that previous panels
have found that products with different net retail prices can be "directly
competitive" even if the products are not purchased with the same frequency.
(ii) Article 11 of the DSU
- In relation to the Philippines' claim under Article 11 of the
DSU the Appellate Body is called upon to determine whether the panel has made
an "objective assessment" of the evidence adduced by the parties.
Australia considers that claims under Article 11 go to the heart of the WTO
dispute panel's primary responsibility in the resolution of disputes and therefore
such claims must be supported by strong evidence.
- In considering the Philippines appeal, Australia notes the repetition of
allegations applied both to claims in relation to Article III:2 of GATT 1994
and under Article 11 of the DSU. Australia therefore
submits that the Appellate Body may wish to draw a distinction between allegations
related to errors in the panel's appreciation of the facts and evidence, and
those related to errors of law, in order to determine how such claims should
appropriately be dealt with.
- Members of the Division, Australia would be pleased to provide
answers to any questions on these or any other matters related to the appeal.
- Appellate Body Report, Korea-Alcoholic Beverages, para. 118.
- Appellate Body Report, Japan-Alcoholic Beverages II, p. 24. See also
Ad Article III of GATT 1994.
- Appellate Body Report, EC-Asbestos, para. 109.
- Panel Report, Japan-Alcoholic Beverages II, para.
- Panel Report, Japan Alcoholic Beverages II, para.
- Panel Report, Korea - Alcoholic Beverages, para.
10.74; Panel Report, Chile-Alcoholic Beverages, para. 7.37.
- See for example: European Union Appellee Submission, paras.
163, 185. and 191; and United States Appellee Submission para. 99.