World Trade Organization
Arguments concerning the submission of evidence in response to panel questions posed in connection with the second meeting
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Arguments concerning the submission of evidence in response to panel questions posed in connection with the second meetingComment of CanadaIn replying to the Panel’s questions posed in connection with the second meeting, Canada indicates that its replies are provided in the light of certain concerns. First, Canada states, the Panel has requested the production of evidence in respect of defences Canada has not made. Canada recalls that consistent with the principle of judicial economy, particularly in the context of the expedited proceedings under SCM Article 4, it is neither necessary nor desirable that the respondent make out a defense for both of the two prongs of the test for a prohibited export subsidy in Part II of the SCM Agreement. Canada states that Brazil must prove both that a subsidy exists within the meaning of Article 1, and that the subsidy is export contingent within the meaning of Article 3. In response, it is sufficient for Canada to demonstrate in relation to each impugned measure, the measure is either not a subsidy or not export contingent. Canada asserts that in its letter to the Chairman of the Panel of 13 December 1998, Brazil has agreed with this thesis. Second, Canada states, the Panel has requested the production of evidence in respect of matters where in Canada’s view Brazil has clearly not made out a prima facie case. Canada notes that the Panel has not ruled on whether Brazil has made out a prima facie case on any of the impugned programmes, activities or transactions. Canada notes that the covering letter to the Panel’s questions of 10 December 1998 states that the questions are posed without prejudice to the Panel’s eventual findings with respect to any issue raised by either party. Third, Canada objects that the Panel has requested the production of evidence in respect of transactions where Brazil has not even made an allegation. Canada does not consider it appropriate to adduce evidence in response to an allegation that has not been made and a case that has not been established. Finally, Canada states that it has been placed in a very difficult position because the Panel’s questions ask Canada to produce business confidential information, recalling its position (see paras. 4.173- 4.183) that the Procedures Governing Business Confidential Information do not provide the requisite level of protection for such information. Comment of BrazilRegarding Canada’s comments about the Panel’s questions, and Canada’s answers thereto, Brazil raises concerns regarding what it views as Canada’s failure to uphold its obligation to disclose information peculiarly within its control. Brazil notes its view that the Panel could, consistent with the principle of judicial economy, have decided the issues raised in this case on the basis of the facts before it as of the second meeting, rather than offer Canada yet another chance to present information in its defense (para. 4.126). Brazils states that regardless, the Panel exercised its right, pursuant to Article 13 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”), to request further information from Canada, and in Brazil’s view, this request triggered Canada’s obligation, again under the terms of Article 13, to “’respond promptly and fully‘” to the Panel’s request. Brazil asserts that Canada has failed to meet this obligation, noting Canada’s repeated invocation in its answers to the Panel’s questions of “’the lack of adequate procedures to protect business confidential information‘” to justify its failure to provide information specifically requested by the Panel. Brazil argues that where documentary evidence has been provided by Canada, it has been redacted to such an extreme degree that it contributes nothing to the Panel’s understanding of the programmes and issues involved. Brazil states that in other instances, Canada has selectively provided particular pages, lines or figures from various documents, claiming that these extracts support its defense. Brazil contends that Canada must bear the consequences of its decision to withhold information from the Panel. Where Canada has expressly refused to provide documentary information specifically requested, or where Canada has wholly or selectively redacted documentary information specifically requested, in Brazil’s view the Panel should adopt adverse inferences, presuming that the information withheld constitutes inculpatory evidence of Canada’s infringement of the SCM Agreement. In Brazil’s view, adoption of such adverse inferences is not prohibited by the DSU, and is entirely consistent with the practice of international tribunals such as the Iran-US Claims Tribunal,78 the Inter-American Commission on Human Rights,79 and the Inter-American Court of Human Rights.80 Moreover, Brazil asserts, reliance on adverse inferences in instances where a party fails to produce information specifically requested and within the party’s exclusive possession and control provides a Panel with the only practical means at its disposal of upholding the duty of collaboration recognized in Argentina - Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items as central to the WTO dispute settlement process, and of upholding the obligation incumbent on a WTO Member under Article 13 of the DSU to “’respond promptly and fully to any request by a panel‘” for information. Brazil argues that Canada’s claims concerning the “’inadequacy‘” of the Panel’s confidentiality procedures, if permitted, would make a sham of WTO dispute settlement proceedings concerning activities alleged to violate the SCM Agreement. Brazil submits that in requesting that private parties waive their confidentiality rights, Canada apparently represented that “’the Brazilian government (including Embraer)‘” would receive copies of confidential business information.81 Brazil states that this is simply untrue, and that it calls into question the sincerity of Canada’s effort to secure the agreement of private parties to the release of particular information.82 More importantly according to Brazil, activities reviewable under the SCM Agreement will nearly always involve contributions to a private party, and will therefore depend upon information which can be characterized by a private party as sensitive or business confidential. If dispute settlement proceedings under the SCM Agreement are to be at all meaningful, Brazil maintains, WTO Members must not be permitted to appeal to domestic confidentiality concerns as a way to impede a Panel’s right, under Article 13 of the DSU, to seek information, or its obligation, under Article 11 of the DSU, to undertake “’an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements . . .‘” Brazil states that it is for these reasons, and to ensure consistency with the obligation, under Article 3(10) of the DSU, of WTO Members to engage in dispute settlement in good faith, that Brazil has been responsive to questions requiring the submission of confidential business information to a separate Panel reviewing the consistency of Brazil’s PROEX programme with the terms of the SCM Agreement. Moreover, Brazil states, in some instances, Canada’s decision to withhold documentation from the Panel is based not upon the refusal of private parties to waive their confidentiality rights, but instead upon the Canadian government’s own refusal to release documents prepared for itself by itself. In particular, Brazil directs the Panel’s attention to Canada’s refusal to provide Canadian government documents constituting TPC “’project assessments and funding decisions.‘”(para. 6.260.) Brazil submits that the decision to withhold these documents, which are exclusively within the possession and control of the Canadian government, must carry adverse consequences for Canada, or the good faith obligation contained in Article 3(10) of the DSU will become meaningless. Brazil argues that he Panel should presume that these documents contain information prejudicial to Canada’s position. 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