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Decisions of the Appellate Body of the World Trade Organization

Korea-Measures Affecting Imports of Fresh, Chilled and Frozen Beef

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Joel P. Trachtman

WTO Appellate Body Report: Korea-Measures Affecting Imports of Fresh, Chilled and Frozen Beef, AB-2000-8 WT/DS161, 169/AB/R (00-5347), adopted by Dispute Settlement Body, 10 January 2001, 2001. Korea, Appellant, Australia and United States, Appellees, Canada and New Zealand, Third Participants. Division: Ehlermann, Abi-Saab, and Feliciano. Major Topics Addressed by Appellate Body: National Treatment under Article III:4 of GATT; Necessity under Article XX(d) of GATT; Articles 3, 4, 6, and 7 of Agreement on Agriculture.

1. Abstract

This case involved two separate measures, each tending to protect the Korean beef industry from import competition. The first involved the interpretation of Korea's obligations under the Agreement on Agriculture, in connection with the reduction of domestic support. Here, the Appellate Body found that the Panel failed to examine all of the appropriate components of Korea's treaty obligations. The Appellate Body found however that the method of calculation in respect of compliance with these reductions was that specified in the relevant Annex to the Agreement on Agriculture, rather than that specified in Korea's schedule.

The second measure, broadly speaking, involved Korea's dual retail system. Here, the Appellate Body confirmed that this system constituted differential and less favourable treatment in violation of Article III:4 of GATT. The Appellate Body also confirmed that this measure was not "necessary" to secure compliance with consumer protection laws within the meaning of Article XX(d) of GATT. Along the way, the Appellate Body developed a novel balancing test, relating the degree of trade restriction to the degree of contribution to the regulatory goal. This approach, also developed in part in the recent Asbestos decision,1 will stimulate much discussion.

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1 Appellate Body Report, European Communities-Measures Affecting Asbestos and Asbestos-Containing Products, adopted 5 April 2001, WT/DS135/AB/R.

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