IX. DISCLOSURE AT A PANEL MEETING

1 ^ Paragraph 12 of Article 4 of the SCM Agreement provides:
"For purposes of disputes conducted pursuant to this Article, except for time-periods specifically prescribed in this Article, time-periods applicable under the DSU for the conduct of such disputes shall be half the time prescribed there."

2 Except as otherwise noted, the footnotes and citations, and the emphasis in the text are as contained in the parties’ submissions.

3 Brazil – Measures Affecting Desiccated Coconut (Complaint by the Phillippines) (1997), WTO Doc. WT/DS22/AB/R at 21 (Appellate Body Report) hereinafter Brazil – Desiccated Coconut.

4 European Communities - Regime for the Importation, Sale and Distribution of Bananas (Complaints by Ecuador, Guatemala, Honduras, Mexico and the United States) (1997) WTO Doc. WT/DS27/AB/R at para. 142 (Appellate Body Report) hereinafter European Communities - Bananas.

5 Id.. at para. 143:

“We do not agree with the Panel that ‘even if there was some uncertainty whether the panel request had met the requirements of Article 6.2, the first written submission of the Complainants “cured” that uncertainty because their submissions were sufficiently detailed to present all the factual and legal issues clearly.’ Article 6.2 of the DSU requires that the claims, but not the arguments, must all be specified sufficiently in the request for the establishment of a panel in order to allow the defending party and any third parties to know the legal basis of the complaint. If a claim is not specified in the request for the establishment of a panel, then a faulty request cannot be subsequently ‘cured’ by a complaining party’s argumentation in its first written submission to the panel or in any other submission or statement made later in the panel proceeding.”

6India - Patent Protection for Pharmaceutical and Agricultural Chemical Products (Complaint by the United States) (1997) WTO Doc. WT/DS50/AB/R at para. 92 (Appellate Body Report) [hereinafter India – Pharmaceuticals]:

“We note also the Panel's statement that it "ruled, at the outset of the first substantive meeting held on 15 April 1997, that all legal claims would be considered if they were made prior to the end of that meeting; and this ruling was accepted by both parties". We do not find this statement at all persuasive in advancing the argument made by the United States on this issue. Nor do we find this statement consistent with the letter and the spirit of the DSU. Although panels enjoy some discretion in establishing their own working procedures, this discretion does not extend to modifying the substantive provisions of the DSU. To be sure, Article 12.1 of the DSU says: "Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise after consulting the parties to the dispute". Yet that is all that it says. Nothing in the DSU gives a panel the authority either to disregard or to modify other explicit provisions of the DSU. The jurisdiction of a panel is established by that panel's terms of reference, which are governed by Article 7 of the DSU. A panel may consider only those claims that it has the authority to consider under its terms of reference. A panel cannot assume jurisdiction that it does not have. In this case, Article 63 was not within the Panel's jurisdiction, as defined by its terms of reference. Therefore, the Panel had no authority to consider the alternative claim by the United States under Article 63.”

7 See for example, Japan – Measures Affecting Consumer and Photographic Film and Paper (Complaint by the United States) (1998), WTO Doc. WT/DS44/R at para. 10.21 (Panel Report) hereinafter Japan - Film; Indonesia – Certain Measures Affecting the Automobile Industry (Complaints by Japan, European Communities, United States) (1998), WTO Doc. WT/DS54,55,59,64/R at para. 14.3 (Panel Report) hereinafter Indonesia - Automobiles.

8 In European Communities – Bananas, at para. 144, the Appellate Body noted:

“We note, in passing, that this kind of issue could be decided early in panel proceedings, without causing prejudice or unfairness to any party or third party, if panels had detailed, standard working procedures that allowed, inter alia, for preliminary rulings.”

9 European Communities - Regime for the Importation, Sale and Distribution of Bananas (Complaints by Ecuador, Guatemala, Honduras, Mexico, United States) (1997) WTO Doc. WT/DS27/ECU at para. 7.6 (Panel Report).

10 United States – Import Prohibition of Certain Shrimp and Shrimp Products (Complaints by India, Malaysia, Pakistan, Thailand) (1998), WTO Doc. WT/DS58/AB/R hereinafter United States - Shrimp.

11 Id.. at para. 83.

12 Indonesia –Automobiles, at para. 14.3.

13 Brazil – Desiccated Coconut, at 21.

14 (1997) WTO Doc. WT/DS22/AB/R.

15 (1997) WTO Doc. WT/DS27/AB/R.

16 DSU Article 4.3 provides, inter alia, that if a request for consultations is made under a covered agreement, the Member to which the request is made shall enter into consultations in good faith, with a view to reaching a mutually satisfactory solution.

17 The issue here is not what took place during the consultations between Canada and Brazil: WTO panels have no mandate to inquire into the adequacy of consultations. The issue of the adequacy of consultations arose before the panels in European Communities - Bananas, and more recently in Korea – Taxes on Alcoholic Beverages (Complaints by European Communities and United States) (1998), WTO Doc. WT/DS75,84/R (Panel Report)hereinafter Korea – Liquor Taxes. In the latter case, the Panel noted the report in European Communities - Bananas, and agreed that it was impossible for a Panel to adjudicate on what occurred in the consultations (at para. 10.19):

“In our view, the WTO jurisprudence so far has not recognized any concept of ‘adequacy’ of consultations. The only requirement under the DSU is that consultations were in fact held, or were at least requested, and that a period of sixty days has elapsed from the time consultations were requested to the time a request for a panel was made. What takes place in those consultations is not the concern of a panel. The point was put clearly by the Panel in Bananas III, where it was stated:

‘[7.19] Consultations are . . . a matter reserved for the parties. The DSB is not involved; no panel is involved; and the consultations are held in the absence of the Secretariat. While a mutually agreed solution is to be preferred, in some cases it is not possible for parties to agree upon one. In those cases, it is our view that the function of a panel is only to ascertain that the consultations, if required, were in fact held. ...’

We do not wish to imply that we consider consultations unimportant. Quite the contrary, consultations are a critical and integral part of the DSU. But, we have no mandate to investigate the adequacy of the consultation process that took place between the parties and we decline to do so in the present case.”

18 India - Pharmaceuticals, at para. 94.

19 European Communities - Regime for the Importation, Sale and Distribution of Bananas (Complaints by Ecuador, Guatemala, Honduras, Mexico, United States) (1997) WTO Doc. WT/DS27/ECU at paras. 7.17-7.20 (Panel Report). See also Korea - Taxes on Alcoholic Beverages (1998) WTO Doc. WT/DS75,84/R (Panel Report) at paras 10.17-10.19.

20Request for consultations by Brazil, WTO document WT/DS70/1, G/SCM/D12/1, 14 March 1997.

21Letter from the Government of Canada to the Government of Brazil dated 19 March 1997. [TAB D, 23 October 1998 preliminary submission of Canada]

22 Letter from the Government of Brazil to the Government of Canada dated 2 April 1997. [TAB E 23 October 1998 preliminary submission of Canada]

23 Export Development Corporation, 1996 Annual Report at 38, 43, 68. [TAB F 23 October 1998 preliminary submission of Canada]

24 SCM Agreement Article 1.1(a)(1)(i) lists loans and equity infusions as distinct forms of financial contribution.

25 Exh. BRA-18

26 Exh. BRA-28

27 Exh. BRA-69, which is an extract from the Canadian Parliamentary reporter, Hansard, demonstrates that responses to the inquiry of Ministry included as Exh. BRA-28 were tabled in Parliament on 16 September 1996.

28 Transport Finance No. 74, 3 October 1996, Exh. BRA-18.

29 Government of Canada, Preliminary Submission, dated 23 October 1998, at para. 34.

30 (1998) WTO Doc. WT/DS44/R, at para. 10.8.

31 (1997) WTO Doc. WT/DS50/AB/R, at para. 94.

32 (1998) WTO Doc. WT/DS75, 84/R, at para. 10.23.

33 Industry Canada, Aerospace and Defence: Part C, online: Industry Canada homepage http://strategis.ic.gc.ca/SSG/ad01475e.html (last modified: 8 December 1995). [TAB G 23 October 1998 preliminary submission of Canada]

34 Id..

35 Industry Canada, Aerospace and Defence: Part B, online: Industry Canada homepage http://strategis.ic.gc.ca/SSG/ad01541e.html (last modified: 16 May 1997). [TAB H 23 October 1998 preliminary submission of Canada]

36 Government of Brazil, Proposed Memorandum of Understanding between the Government of Brazil and the Government of Canada on Exchange of Information on the Aircraft Industry, 26 June 1998. [TAB J 23 October 1998 preliminary submission of Canada]

37 Korea – Liquor Taxes..

38 Japan - Taxes on Alcoholic Beverages (Complaints by European Communities, Canada and the United States) (1996), WTO Doc. WT/DS8,10,11/AB/R (Appellate Body Report).

39 Korea – Liquor Taxes, para. 10.16.

40 India - Pharmaceuticals, at para. 94.

41 Korea – Liquor Taxes, at para. 10.23.

42 Article 3.2 of the DSU.

43Redfern, A. and M. Hunter, Law and Practice of International Commercial Arbitration, 2^nd ed. (London: Sweet & Maxwell, 1991) at 320-21. The authors were referring to the withholding of principal arguments in the written submission, only to make them in the oral hearing; in the context of this case, however, and in view of Article 6.2, their observation is apposite. [TAB I 23 October 1998 preliminary submission of Canada]

44 (1997) WTO Doc. WT/DS50/AB/R, at para. 94.

45 (1997) WTO Doc. WT/DS27/AB/R, at para. 143.

46 Id. at para. 142 (emphasis added by Brazil).

47 Government of Brazil, Request for the Establishment of a Panel.

48 (1997) WTO Doc. WT/DS27/AB/R, at paras. 139-144.

49 (1997) WTO Doc. WT/DS50/AB/R, at para. 94.

50 Id. at para. 37.

51 Brazil – Export Financing Programme for Aircraft, WT/DS/46/5.

52 (1998) WTO Doc. WT/DS62, 67/AB/R, at para. 70.

53 Korea - Taxes on Alcoholic Beverages, (1998) WTO Doc. WT/DS75, 84/R, at para. 10.16, citing European Communities - Customs Classification of Certain Computer Equipment, (1998) WTO Doc. WT/DS62,67/AB/R, at paras. 58-73.

54 (1998) WTO Doc. WT/DS75, 84/R, at para. 10.16.

55 Id.

56 Exh. BRA-28

57 Brazil – Measures Affecting Desiccated Coconut, WTO Doc. WT/DS22/AB/R Report of the Appellate Body adopted on 20 March 1997, at 15.

58 AB-1997-5, WT/DS50/AB/R (19 December 1997) para. 94.

59 Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R (2 July 1998) para. 14.7.

60 AB-1997-5, WT/DS50/AB/R (19 December 1997) Para. 94

61 The impact of a particular interpretation of Article 6.10 on private persons was an element for consideration by the Appellate Body in United States - Restrictions on Imports of Cotton and Man-made Fibre Underwear (Cotton Underwear), WT/DS24/AB/R, Report of the Appellate Body Adopted on 25 February 1997, at 15.

62 India - Patent Protection for Pharmaceutical and Agricultural Chemical Products (India - Pharmaceuticals II), WT/DS50/AB/R, Report of the Appellate Body adopted on 16 January 1998.

63 Id.. at para. 93.

64 Id.. at para. 94.

65 Id.. at para. 94.

66 See, for example, European Communities – Measures Concerning Meat and Meat Products (Hormones), WT/DS48/R/CAN, Report of the Panel adopted on 13 February 1998, at paras. 8.5 and 8.11.

67 J.G. Merrills states that ‘inquiry’ can be defined as: “a specific institutional arrangement which states may select in preference to arbitration or other techniques, because they desire to have some disputed issue independently investigated.” [emphasis added] See J.G. Merrills, International Dispute Settlement, 2^nd ed. (Cambridge: Grotius Publications Ltd., 1991), at 43. TAB A 23 October 1998 preliminary submission of Canada According to Merrills, commissions of inquiry were introduced by the Hague Convention for the Pacific Settlement of International Disputes, 1899. Among the limitations on their mandate was that they should handle only questions of fact and not of law, and that their findings should not be seen as obligatory. See Id.. at 44. TAB A October 1998 preliminary submission of Canada  This is manifestly at odds with the objectives and the nature of WTO dispute settlement.

68 The basic instruments to ensure that an arbitral tribunal has the authority to order a discovery of evidence are “through certain specific stipulations.” See V.S. Mani, International Adjudication: Procedural Aspects, (The Hague: Martinus Nijhoff Publishers, 1980), at 212. TAB B October 1998 preliminary submission of Canada  The power to order evidentiary discovery is therefore not inherent in arbitral tribunals.

For example, evidentiary discovery has been explicitly provided for in the Statute of the International Court of Justice. [Annex to the Charter of the United Nations, 26 June 1945, 15 U.N.C.I.O. 335 at 355 (entered into force 24 October 1945)] Article 49 provides that “[t]he Court may, even before the hearing begins, call upon the agents to produce any document or to supply any explanations. Formal note shall be taken of any refusal.” TAB C October 1998 preliminary submission of Canada  The Optional Rules for Arbitrating Disputes between Two States of the Permanent Court of Arbitration TAB D October 1998 preliminary submission of Canada  provides, in its Article 24.3, that:

At any time during the arbitral proceedings the arbitral tribunal may call upon the parties to produce documents, exhibits or other evidence within such a period of time as the tribunal shall determine. The Tribunal shall take note of any refusal to do so as well as any reasons given for such refusal.

The specific grants of authority noted above may be contrasted with Article 13 of the DSU, which provides that:

1. Each panel shall have the right to seek information and technical advice from any individual or body which it deems appropriate. However, before a panel seeks such information or advice from any individual or body within the jurisdiction of a Member it shall inform the authorities of that Member. A Member should respond promptly and fully to any request by a panel for such information as the panel considers necessary and appropriate. Confidential information which is provided shall not be revealed without formal authorization from the individual, body, or authorities of the Member providing the information.

2. Panels may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter. With respect to a factual issue concerning a scientific or other technical matter raised by a party to a dispute, a panel may request an advisory report in writing from an expert review group. Rules for the establishment of such a group and its procedures are set forth in Appendix 4.

This clearly is not a “specific stipulation” of authority for discovery, as noted by Mani and as provided for in the Statute of the ICJ.

69 Indonesia - Certain Measures Affecting the Automobile Industry (Indonesia - Automobiles), Report of the Panel adopted on 23 July 1998, at para. 14.6.

70 Id.. at para. 14.7.

71 United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India (Shirts and Blouses), WT/DS33/AB/R, Report of the Appellate Body adopted on 23 May 1997, at 14.

72 Id..

73 Argentina – Footwear at paras. 6.52-6.53

74 Argentina – Footwear at para. 6.58

75 Argentina – Footwear, at para. 6.40.

76 Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/R, Report of the Panel adopted as modified by the Appellate Body on 22 April 1998.

77 Id.., at para 6.40.

78 INA Corporation v. The Government of the Islamic Republic of Iran, Award No. 184-161-1 (13 August 1985), reprinted in 8 Iran-US CTR, 373-384, at Westlaw pg. 8 (extracted in Exh. BRA-100); William J. Levitt v. Islamic Republic of Iran, Ministry of Agriculture and Natural Resources of Iran, et al., Award No. 520-210-3 (29 August 1991), reprinted in 27 Iran-US CTR, 145-187, at paras. 56-66 (extracted in Exh. BRA-101).

79 Tom Farer, “Finding the Facts: The Procedures of the Inter-American Commission on Human Rights of the Organization of American States,” in Fact-Finding by International Tribunals (R. Lillich, Ed., 1991), pgs. 275-287, at 281 (extracted in Exh. BRA-102).

80 Thomas Buergenthal, “Judicial Fact-Finding: Inter-American Human Rights Court,” in Fact-Finding by International Tribunals (R. Lillich, Ed., 1991), pgs. 261-274, at 266 (extracted in Exh. BRA-103).

81 Exh. CDN-106 (letter to Blair Hankey, Associate General Counsel, Trade Law Division, Department of Foreign Affairs and International Trade, from Peter Keyser, Manager, Business Development Programmes, Allied Signal, at pg. 2).

82 The Panel notes that Canada, in its 29 January 1999 cover letter transmitting Canada’s comments on the draft descriptive part of this report, denies as unfounded and untrue this allegation by Brazil.

83 Indonesia – Certain Measures Affecting the Automobile Industry (Complaints by Japan, European Communities, United States) (1998), WTO Doc. WT/DS54,55,59,64/R (Panel Report) [hereinafter Indonesia – Automobiles].

84 Id.. at para 4.56.

85 Id.. at para. 4.51.

86 Id.. at para. 14.7.

87 Id.. at para. 14.235.

88 Id.. at para. 14.236.

89 Vienna Convention on the Law of Treaties, Art. 31; see also, United States - Standards for Reformulated and Conventional Gasoline, WTO Doc. WT/DS2/R at para. 6.7.

90 The Panel notes that Canada, on 21 December 1998, sought clarification in the procedures to indicate that the “representative” referred to in Articles VI.2 and VIII.3 shall be an approved person. The procedures in Annex 1 reflect this change.

91 Indonesia –Automobiles, WT/DS54,55,59,64R (Panel Report) at para. 14.7.

92 Except as otherwise noted, the footnotes and citations, and the emphasis in the text in this section are as contained in the parties’ submissions.

93Vienna Convention on the Law of Treaties (Vienna Convention), 1969, 1155 U.N.T.S. 332 (entered into force 1980) (Exh. CDN-4).

94United States - Standards for Reformulated and Conventional Gasoline (Reformulated Gasoline), W/DS2/AB/R, Report of the Appellate Body adopted on 20 May 1997, at 16-17; Japan - Taxes on Alcoholic Beverages (Japan Liquor Tax), WT/[DS8/DS10/DS11]/AB/R, Report of the Appellate Body adopted on 11 November 1997 at 10; most recently reaffirmed in India - Patent Protection for Pharmaceutical and Agricultural Chemical Products (Pharmaceuticals), WT/DS50/AB/R, Report of the Appellate Body adopted on 16 January 1998, at paras. 43-48.

95Vienna Convention, at Article 31.

96Id. at Article 32.

97 Reformulated Gasoline, at 23.

98I. Sinclair, The Vienna Convention on the Law of Treaties, 2^nd rev. ed. (Manchester U.K.: Manchester University Press: 1984) at 120 (Exh. CDN-5).

99WT/DS33/AB/R, Report of the Appellate Body adopted on May 23, 1997 (“Shirts and Blouses”).

100Id.., at 12-17.

101Id.., at 14.

102See M. Kazazi, Burden of Proof and Related Issues: A Study on Evidence Before International Tribunals (The Hague: Kluwer Law International, 1996) at 326-343 (Exh. CDN-6).

103Id.., at 39-42 quoting Further Decisions and Opinions of Commissioners, Claim of W. Allen Odell, p. 63 (Exh. CDN-6).

104 European Communities - Measures Concerning Meat and Meat Products (European Communities - Hormones), WT/DS26/AB/R and WT/DS48/AB/R, Report of the Appellate Body adopted on 13 February 1998, at para. 104.

105 Id.. at para. 109.

106 Id.. at paras. 214-15.

107 United States – Measures Affecting Imports of Woven Wool Shirts and Blouses from India (Shirts and Blouses), WT/DS33/AB/R, Report of the Appellate Body adopted on 23 May 1997, at 14.

108 Id..

109 India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, Report of the Appellate Body adopted on 16 January 1998, at paragraph 74.

110 Keith Highet, “Evidence and Proof of Facts” in The International Court of Justice at Crossroads, (New York: Transactional Publishers, Inc., 1987) at 367 (Exh. CDN-54).

111 Kazazi, at 326

112 Shirts and Blouses, at 18-19.

113 Exh. CDN-54.

114United States – Restrictions on Imports of Cotton and Man-made Fibre Underwear (United States - Cotton Underwear) WT/DS24/AB/R, Report of the Appellate Body adopted 25 February 1997, at 15.

115That is, for Canada, the use of the term “i.e.” indicates that the items that follow are intended to be an exhaustive, rather than an illustrative list. In this regard, Canada notes that the Uruguay Round negotiators agreed to replace the term “such as” in the Cartland I draft of the SCM Agreement (18 May 1989)(Exh. CDN‑21), with “i.e.” in Cartland II (Exh. CDN-22), thus clearly indicating an intent to move from an illustrative definition to an exhaustive definition. Canada also notes that “e.g.” is also used within the subsidy definition in Article 1 to indicate an illustrative list.

116 The “revenue foregone” is not to be confused with the “cost to government” method set out in Annex IV. The cost to the Government of Canada of a contribution cannot, by definition, exceed the value of that contribution as an outright grant. The “cost” to the Government, in the case of a TPC contribution, therefore would be calculated by subtracting repayments from the original contribution.

117 The

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