Decisions of the Appellate Body of the World Trade Organization

Canada-Certain Measures Affecting the Automotive Industry

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Joel P. Trachtman

WTO Appellate Body Report: Canada-Certain Measures Affecting the Automotive Industry, AB-2000-2, WT/DS139/AB/R, WT/DS142/AB/R (00-2170), adopted by Dispute Settlement Body, 19 June 2000. Canada, Appellant/Appellee; European Communities, Appellant/Appellee; Japan, Appellant/Appellee; Korea and United States, Third Participants. Division: Ehlermann, Bacchus and Feliciano. Major Topics addressed by Appellate Body: Definition of `MFN' under GATT 1994; definition of `subsidy' and of `export subsidy' under the Agreement on Subsidies and Countervailing Measures; coverage of GATS.

1. Abstract

This case deals with the Canadian duty-free treatment of certain automobiles and other motor vehicles. The Appellate Body found that this treatment, based on the importer's level of manufacturing within Canada, export performance, and Canadian value-added, violates the requirement of MFN treatment under Article I of GATT 1994, as well as the prohibition on export subsidies of Article 3.1(a) of the Agreement on Subsidies and Countervailing Measures (SCM Agreement). The Appellate Body could not reach conclusions with respect to the prohibition of import substitution subsidies under Article 3.1(b) of the SCM Agreement, or with respect to Article II of GATS, because the panel had not made sufficient factual findings.

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