## Facts

- Following a domestic safeguard investigation by the U.S. International Trade Commission, the United States imposed definitive safeguard measures on numerous steel product categories.
- The measures included additional tariffs on imports of various steel products and a tariff-rate quota on slabs, effective March 2002.
- Eight WTO Members filed complaints challenging the measures under GATT 1994 Article XIX and multiple provisions of the Agreement on Safeguards.
- A single WTO panel heard the consolidated disputes; the panel reports were circulated in July 2003.
- The United States appealed legal issues; the Appellate Body report was adopted by the WTO Dispute Settlement Body in December 2003.
- Shortly before adoption, the United States terminated the challenged safeguard measures.

## Issues

1. Whether the competent authorities adequately demonstrated “unforeseen developments” and the effect of GATT obligations as prerequisites for action under GATT 1994 Article XIX:1(a).
2. Whether the United States established that imports were “in such increased quantities” as required by Articles 2.1 and 4.2(a) of the Agreement on Safeguards.
3. Whether the safeguard measures satisfied “parallelism,” i.e., consistency between the scope of the investigation (imports counted) and the scope of the applied measures (imports covered).
4. Whether the United States demonstrated causation and conducted a proper non-attribution analysis under Article 4.2(b) of the Agreement on Safeguards.
5. Whether the published report contained findings and reasoned conclusions sufficient to meet Article 3.1 of the Agreement on Safeguards and allow review.

## Decision

- The Appellate Body largely upheld the panel’s findings that the U.S. safeguard measures were inconsistent with WTO obligations for most product categories.
- It affirmed that “unforeseen developments” and the effect of obligations incurred are justiciable prerequisites and must be demonstrated in the competent authorities’ published report and connected to increased imports and serious injury.
- It agreed that, for multiple products, the United States did not provide a reasoned and adequate explanation supporting findings of increased imports based on the data and trends.
- It upheld findings that the United States acted inconsistently with parallelism by excluding certain countries from the measure while including their imports in the injury and causation analysis, absent a legally sufficient reconciliation.
- It sustained findings that causation and non-attribution were inadequately explained, including failure to separate and distinguish injury from factors other than imports.
- It recommended that the Dispute Settlement Body request the United States to bring the measures into conformity with GATT 1994 and the Agreement on Safeguards.

## Legal Principles

- A safeguard measure under GATT 1994 Article XIX requires a demonstrated basis of “unforeseen developments” and the effect of obligations incurred, set out in the competent authorities’ published reasoning and linked to increased imports and serious injury.
- Findings of “increased imports” must rest on a reasoned and adequate explanation that connects the import data and relevant trends to the statutory standard, particularly where trends are mixed or declining.
- Parallelism requires alignment between the imports examined for injury/causation and the imports subject to the safeguard measure; if certain sources are excluded from application, the analysis must correspondingly exclude them or otherwise be legally justified.
- Under Article 4.2(b) of the Agreement on Safeguards, authorities must show a causal link between increased imports and serious injury and ensure injury from other factors is not attributed to imports through an explained separation and distinction.
- Article 3.1 requires publication of findings and reasoned conclusions on pertinent issues of fact and law sufficient for a reviewing body to assess consistency with safeguard disciplines.

## Conclusion

The Appellate Body confirmed stringent requirements for safeguard measures, including demonstrated unforeseen developments, coherent increased-imports findings, strict parallelism between analysis and measure, and a documented causation/non-attribution explanation, leading to findings of WTO inconsistency for most challenged U.S. steel safeguards.


United States—Definitive Safeguard Measures on Imports of Certain Steel Products (AB), WT/DS248/AB/R (WTO Dec. 10, 2003)