Zeina Ahmad

Bashar H Malkawi

The Burden and Order of Proof in WTO Claims: Evolving Issues

I. Introduction

Burden of proof, in the context of international adjudication, denotes the party to a dispute who has the greatest risk of loss in the event that a fact or a proposition is not proven. 1 Therefore, the concept of burden of proof allocates the responsibility on the affected party to adduce sufficient evidence to either prove or disprove a claim. 2 The tribunal adjudicating a case will base its decision on the evidence that the affected party puts forth to support or refute a claim. The role that burden of proof plays in determining the outcome of a dispute often implies that it has a direct impact on the procedural aspects of a tribunal's decision. Consequently, the tribunal must always ensure that their decision is based on the facts that each party has presented, rather than on their subjective assessment of each party's arguments.

The general rule in issues of burden of proof is that the party seeking to prove a fact must bear the responsibility of adducing the nature of evidence that will convince the tribunal to accept his or her position regarding the issue in dispute and provide an award in his/her favor. 3 While this rule sounds simple and easy for all parties to appreciate, the reality of the matter is that it is everything else but simple. In many * Zeina Ahmad holds LLB from University of Sharjah, College of Law. She is pursuing her LLM at the University of Sharjah. ** Bashar H. Malkawi is Dean and Professor of Law, University of Sharjah, UAE. He holds S.J.D in Law from American University, Washington College of Law and LL.M in International Trade & Business Law from the University of Arizona.

2 cases of international adjudication, the parties seeking to establish a claim often do not have access to the types of evidence that will convince the tribunal to rule in their favor and make a suitable award. In such cases, the parties are often left with a sense of injustice when the tribunal adjudicating on their dispute comes to the conclusion that the evidence adduced is insufficient to warrant an award or a ruling in favor of the party. Common law attempted to remedy the situation through the introduction of concepts such as res ipsa loquitur in which the burden shifts to the party with easy access to the evidence. 4 However, the rules of international tribunals do not give parties access to similar rules and, as such, parties often face injustice whenever they are aggrieved, but lack sufficient evidence to prove their case.

The World Trade Organization (WTO) is one of the best dispute settlement mechanisms in the world, but developing countries have experienced immense difficulty in maximizing on the effectiveness of the institution because they lack the capacity to participate effectively. Under WTO rules, aggrieved parties must establish a "prima facie" case before the panel can call on the offending party to respond to the claims. 5 The rule regarding " prima facie" implies that aggrieved parties must produce evidence that is sufficient enough to convince the panel that they are entitled to the requested remedies before the burden of proof can shift to the offending party. 6 The burden of proof will never shift from the aggrieved party to the offending party if the panel is not satisfied that the aggrieved party has discharged that burden. The 4 See Buckley, W., & Okrent, C Torts and Personal Injury Law 49 (2003). 5 See Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, Final Act Embodying the Results of the Uruguay Round of Multinational Trade Negotiations, Annex 2, app. 1, in the Results of the Uruguay Round of Multilateral Trade Negotiations, 33 I.L.M. 1244, article 3(7).

3 objective of the present study is to critically evaluate the application of the concept of burden of proof under WTO dispute settlement mechanism. The paper will be divided into two main parts. The first part will focus on the development of dispute settlement within WTO. This part will also outline the history of dispute settlement at the WTO and the laws established to govern burden of proof.

The second part will focus on the standards of proof within the WTO dispute settlement system. The second part will be divided into several subsections that will focus on the burden of proof concept, burden of proof in common law, burden of proof in civil law, and the prima facie standard. Thereafter, the paper will conclude with a set of conclusions and recommendations.

II. Development of the WTO Dispute Settlement Mechanism

The emergence of the WTO as an effective dispute resolution body came against the backdrop of the ineffective GATT dispute settlement mechanism. The provisions in the GATT related to the settlement of disputes were enshrined under articles XXII and XXIII. The principles enshrined in the two articles were based on the notion that formal legal actions were unfriendly and would unnecessarily undermine international trade.

The European Community advocated for a rule widely regarded as the diplomacy rule 7 . The European Community adopted the pragmatic approach, which advocated for the view that GATT dispute settlement framework should be perceived as a . 193, 194-197 (1987). See Michael K. Young, Dispute Resolution in the Uruguay Round: Lawyers Triumph Over Diplomats 29 INT'L LAW 389 392-405 (1995).

natural outcome of the negotiation process. 8 The U.S., in contrast, adopted the adjudication approach, which took the view that the GATT dispute settlement mechanism that investigated violation of applicable treaties and subjected countries violating those treaties to hefty sanctions. 9

The GATT dispute settlement panels adopted an approach in which there was room for the party in dispute to challenge any or all of the decisions of the dispute settlement body. That approach was akin to the approach taken by the International Court of Justice (ICJ) in which the validity and enforceability of a decision hinges on the whether or not the parties in dispute have accepted the court's jurisdiction on the matter 10 . If one of the parties decides to reject its jurisdiction, then the ruling would be unenforceable. 11 Similarly, there was a risk that the GATT dispute settlement body would face the same risk of the body being used as an avenue for the settlement of political scores. The absence of a requirement or rule making the rulings of the body binding meant that the disputing parties could override its ruling.

Unlike the GATT dispute settlement tribunals, the WTO dispute settlement system has an unfettered dispute settlement authority. This not only implies that WTO panels can settle disputes between member states, but it also implies that decisions of WTO panels are binding on the parties to the dispute and there are trade sanctions that the panel can impose out on states that do not abide by its decisions. 12 The debates about jurisdiction that dogged the GATT dispute settlement body are non-existent under the WTO dispute settlement framework.

These unfettered powers are enshrined under rules of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). The DSU gives WTO panels the authority to settle disputes and prescribe trade sanctions for states that contravene the rules contained under WTO agreements. The extent of the powers of the WTO dispute settlement bodies is clearly outlined under article 2(1) of the DSU.

Under that article, the DSU establishes the Dispute Settlement Body (DSB) whose primary mandate will be to administer the dispute settlement rules enshrined under the DSU. 13 Further, the DSU provides that the DSB has the sole responsibility of not only establishing the panels that will adjudicate on disputes instituted by member states, but also of establishing the Appellate Body that will review the decision of the panel whenever a party of a dispute is dissatisfied with the ruling of the tribunal. 14 Additionally, the DSB will have the sole mandate of supervising the implementation of the DSU and supervising parties' adherence to panel rulings.

Article 3 of the DSU provides further support to the provisions in article 2 by outlining general rules that will govern dispute settlement under the WTO dispute settlement mechanisms. The DSU states that the primary objective of the rules enshrined under the DSU is to ensure predictability and security within the global 12 See Pauwelyn, supra note 2, at 227. 13 See Understanding on Rules and Procedures Governing the Settlement of Disputes, supra note 5, article 2(1).

14 Id.

trading system. 15 Further, the DSU states that the dispute settlement mechanism was developed because of member states' realization that there was need for a system to safeguard their rights and clarify existing rules. 16 Prompt settlement of dispute is a cornerstone of the dispute settlement mechanisms established under the DSU. 17

The discussion above suggests that the member states, in establishing the dispute settlement mechanisms under the WTO system, wanted to ensure that they had a mechanism that could settle international trade disputes in a prompt manner so as to avoid the disruption of trade. 18

III. Burden of Proof in WTO Law

When instituting disputes under the WTO dispute settlement mechanisms, parties must adhere to the rules set out in article 3(7) and article 3(8) of the DSU. According to the DSU, the member state instituting the action must consider the merits of their case and determine whether it will be fruitful. 19 The article goes on to state that the primary objective of the DSU is to ensure prompt and fruitful resolution of disputes. 20 Although this provision does not clearly outline the prima facie case, an analysis of its implication indicates that it requires all aggrieved parties to establish a prima facie case before the case can become the subject of a panel hearing.

15 Id. article 3(2). 16 Id.

17 Id. article 3(3).

18 See Palmeter and Mavroidis, Dispute Settlement in the World Trade Organization, Practice and Procedure 144 (2004).

19 See Understanding on Rules and Procedures Governing the Settlement of Disputes, supra note 5, article 3(7). 20 Id.

The rule implies that panels will have the responsibility of dismissing frivolous disputes or disputes whose evidence is so insufficient that it does not warrant an award in favor of the aggrieved party. The effect of article 3( 7) is that it places the burden of proof on the member state instituting the legal proceeding.

Once the DSB has established the panel and it finds that the aggrieved member state has established a prima facie case, the panel will call on the offending member state to respond to the complaint. Indeed, article 3(8) of the DSU clearly underscores this fact when it states that the presence of clear evidence of an infringement of WTO rules will be an indication that the aggrieved state has established a prima facie case that will give rise to a nullification of the action and the provision of an award. The article goes on to state that the establishment of a prima facie case will automatically lead to an assumption that the offending party has breached the stated WTO rules and, as such, it will be upon the offending state to adduce sufficient evidence to rebut the claim. 21 The implication of this article is that it acknowledges that the establishment of a prima facie case leads to a shift in the burden of proof from the aggrieved state to the offending state. The obligation of the offending state will be to adduce evidence that is cogent enough to cast doubt on the aggrieved state's claims.

On the face of it, the DSU provisions on the burden of proof seem concise and clear. However, a close analysis of those rules demonstrates that one important issue is missing. The rules do not specify the standards of evidence that will be deemed "prima facie" and the standards of evidence that will be deemed to have refuted the prima facie case established by the aggrieved state. The rules merely state what the aggrieved state needs to establish in order to obtain the remedy it desires, but they do not expressly state the quantity of the evidence that the panel will deem as prima 21 Id. article 3(8).

facie. The absence of clear rules on the standard of proof implies that panels have the discretion to determine whether the evidence that the aggrieved state submits meets the threshold for a prima facie case.

Additionally, the rules do not expressly outline the standards that the panel will use to assess whether the offending state has satisfied its burden. The panel has the discretion to decide these issues on a case by case basis and it opens up the possibility of the panel deciding on an issue in one way and later on deciding on a similar issue in a different way. 22 The decision to give the panel the leeway to make decisions on standards of proof severely limits aggrieved state's ability to obtain justice.

The limit imposed on aggrieved states is evidenced by the terms of reference of any panel. 23 The DSU rules play an important role in determining the manner in which the panel will interpret evidence adduced towards it. The DSU, under article 7(1), states clearly states that the parties to the dispute can establish the terms of reference that will govern the operations of the panel. However, when the parties fail to establish the terms of reference within 20 days, the rules under DSU will kick in and they will be forced to rely on the provisions of article 7 of the DSU. Article 7 of the DSU states that in the absence of agreement between parties, the terms of reference for the panel will be to critically evaluate the facts of the dispute from the prism of rules established under the DSU and other relevant conventions and to make findings that will make it easier for the DSB to decide the nature of punishment that fits the offending state. The wording of article 7(1) implies that there is a window for parties to the dispute to decide the terms of reference. The window is normally 20 days, but there is very little evidence that there will be consensus on the part of the offending state. The requirement of consensus among the parties demonstrates that the most probable terms of reference that the panel will use in the settlement of the dispute are the terms outlined in article 7(1).

IV. Burden of Proof in WTO Jurisprudence

The burden of proof concept is an evidentiary principle that is important in all legal systems. Under the WTO law, burden of proof usually rests on the state that seeks to prove or disprove a claim related to the violation of GATT 1994. 24 The DSU, under article 3(8), enshrines the principle of burden of proof under WTO law. The article states that the aggrieved member state must adduce evidence to demonstrate that it is entitled to the remedy it is seeking. 25 Once the WTO panel has established that the evidence is sufficient, the burden of proof will shift from the aggrieved state to the state alleged to have committed a violation of GATT 1994. 26 One of the important aspects of the burden of proof enshrined under the DSU is the concept of "prima facie". This concept implies that the evidence tabled to support the aggrieved state's claim must meet a given threshold in order for the tribunal to shift the burden from the aggrieved state to the offending state. The threshold, according to the DSU, is the existence of sufficient evidence that would enable the panel to grant the requested remedy in the absence of a rebuttal from the offending state.

An analysis of cases adjudicated upon by WTO panels demonstrates that they have applied the same rule on burden of proof as enshrined under article 3 of DSU. In 24 Id. article 3(8).

25 Id.

26 Id.

the Shirts and Blouses case, the U.S. implemented a transitional safeguard mechanism pursuant to article 2 of the Agreement on Textiles and Clothing (ATC). India, instituted a case alleging that the move violated ATC. 27 A WTO panel ruled that the burden of proving that the U.S.'s safeguard measure had violated the ATC rested in India. The panel argued that it was India's duty to adduce legal and factual evidence to demonstrate that the safeguards implemented by the U.S. violated article 2 of the ATC. 28 Furthermore, the panel argued that it was India's duty to demonstrate that the U.S. serious threat determination under article 6 of ATC had no legal basis.

The argument of the panel seemed to be that the aggrieved state must not only adduce evidence to support its claim, but they must also adduce evidence to poke holes on any defense that the offending party might raise. In the present scenario, India adduced evidence to support its claim that it deserves a remedy, but it failed to adduce evidence to dislodge the U.S. claim that it had implemented the safeguards pursuant to article 6 of the ATC.

The same view on burden of proof was confirmed in the Beef Hormones case. 29 In that case, the European Commission implemented a law prohibiting the importation of beef from countries that are known to inject their cattle with certain growth hormones. 30 This ban led to reaction from the U.S. and Canada because the two states believed that the law violated WTO rules. The panel ruled that the initial burden of proving a claim under the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) rests on the aggrieved state. 32 The panel argued that the scope of that burden was on the state to adduce prima facie evidence to back the claim that the offending state's conduct was inconsistent with the rules enshrined under the SPS. The panel further argued that the alleged violation breach of the SPS must identify the specific provision or provisions of that agreement that the offending state had breached. The panel argued that once the offending state has put forth a prima facie case, the burden will shift to the offending party. The panel, therefore, concluded by stating that the burden of proof will fall on a party, irrespective of whether it is the defendant or claimant, that claims a given issue or refutes it.

WTO panels have gone out of their way to guard against states that attempt to impose new rules on BOP. In the Shirts and Blouses case, the Indian representatives attempted to reject arguments that they present prima facie evidence because it was evident that the U.S. actions amounted to a violation of the ATC. However, the panel rejected this contention on the basis of the view that an absurd situation would arise when a state's claims would automatically amount to proof that the alleged offending state. In addition, the panel stated that the rule on the prima facie was clearly established under English common law.

The burden of proof concept plays an important role in ensuring that there is stability and certainty under the international trade system. Member states relying on the system are aware that other states cannot take away some of the rights they enjoy under GATT 1994. Whenever a member notices that its right has been infringed or nullified, it will be at to institute legal proceedings with the WTO. However, the legal 32 See Kurleka, M., & Turunen, S. Due process in international commercial arbitration 276 (2010).

dispute will become futile if there is no clear evidence to support the claim. Another important aspect of the WTO is that there is a presumption that one state party's decision to breach the rules adversely affects other states that are party to the WTO agreement. This implies that other states have a duty to institute the case against the individual state that violated the WTO agreement.

In certain instances, the actions of states can lead panels into difficult situations that might not have been contemplated by the DSU drafters. This is especially the case in instances where the states in question opt to flood the panel with evidence without due regard to the rules on presentation of evidence. The Panel on Japan -Measures Affecting Consumer Photographic Film and Paper is a classic case of a situation where states deliberately decided to ignore existing rules and developed their own procedures of presenting evidence.

In that case, the U.S. instituted a complaint against Japan and the latter instituted a complaint against the U.S. The two countries then decided to simultaneously offer evidence to support their claims. 33 This led to an absurd outcome where the panel could not determine what would happen when the two states put forth prima facie evidence and where the burden would shift to. This outcome prompted the panel to criticize the two states for relying on the American legal system where parties in dispute adduce as much evidence as they can to support their respective position. The panel argued that such tactics would adversely affect the WTO panel system and contribute to its collapse. 34 This ruling suggests that there are inherent weaknesses in the rules on burden of proof. These rules are not effective and, as such, there is need 33 See Panel Report, Japan -Measures Affecting Consumer Photographic Film and Paper, WT/DS44/R, adopted 22 April 1998, DSR 1998: IV, 1779.

34 Id.

for the development of a fool proof system that can effectively assign the burden of adducing evidence among parties to a dispute.

The nature of difficulties WTO panels face in defining burden of proof in the cases they are handling has been demonstrated in the wide array of cases that on the WTO agreement on Technical Barriers to Trade (TBT). To be more specific, panels have experienced difficulties in defining the scope of the concept of burden of proof as relates to the issue of 2(4) of the TBT. Article 2(4) of the TBT expressly mandates member states to use internationally accepted standards when defining the technical regulations that will determine the entry of goods into their country. The article states that the rule on technical standards will be ousted when it would be an inappropriate and ineffective strategy for the achievement of a state party's legitimate objectives.

The WTO panel has been experiencing challenges in determining the scope of the burden of proof in dispute arising from this provision. In the EC -Sardines case, the panel ruled that the burden of proving that a given restriction did not amount to an international standard rested with the party with access to information on policies that led to the decision, rather than the complainant. 35 In that case, the European Community had argued that the burden of proving that the Codex restriction was an international standard within the meaning of article 2(4) rested on Peru because it was the party that was asserting its inconsistency. 36 prompted the European Community to implement the Codex restriction. 37 The panel also argued that the burden rested on the European Community because it was in a better position to clearly outline the factors that made the restriction consistent with the international standard.

The European Community appealed this decision and the Appellate Body ruled in its favor by arguing that the burden fell on the complainant. It argued that that burden should be borne by the party arguing that a given restriction is inconsistent with article 2(4) of the TBT agreement. The Appellate Body argued that the presence of provisions in the TBT agreement providing adequate avenues of access to information on the objectives that a government or regional body will achieve when it implements technical regulation.

The divergence between the rulings of the panel with the original jurisdiction on the issue and the Appellate Body suggests that there was confusion in the application of the burden of proof concept. On the one hand, the panel felt that Peru could not effectively prove an issue that was ostensibly within the custody of the European Community and, as such, it argued that the European Community had the burden of proof. It made this ruling in spite of the knowledge that Peru was the party with the greatest risk of loss in the event that it failed to adduce evidence. It is highly probable that the panel made that decision because of its assumption that the rule on burden of proof being on the party with the greatest risk of loss would have occasioned an injustice in the circumstances before it.

On the other hand, the Appellate Body had different considerations when it overruled the panel. The Appellate Body made its decision on a strict interpretation of the law. The Appellate Body argued that the burden of proof must always rest with 37 Id. at paragraphs 277, 282.

the party who is at the greatest risk of loss in the event that no evidence is adduced.

The Appellate Body considered other relevant provisions of the TBT and argued that there were enough safeguards for ensuring that parties with burden of proof have access to all the evidence they require to prove support their claim. This move seemed to suggest that the Appellate Body would have ruled in favor of Peru if there were no provisions that would have given it access to the documents it required to prove its case. The absence of clarity is an indication that panels are facing challenges in their attempt to incorporate the burden of proof concept into their arguments. It is highly probable that the main factor accounting for this state of affairs could be the absence of a provision that clearly outlines how the WTO Panels will allocate the burden of proof in any given case.

V. Burden of Proof in Common Law

The cases analyzed above demonstrated that the concept of burden of proof is straight forward, but it might pose a challenge in its application. An analysis of literature on the possible causes of the difficulty demonstrates that it arises from parties' confusion regarding their respective roles in the process of adducing evidence. 38 Parties are no longer aware of their evidentiary burden and the result in certain cases like the one between Japan and the U.S. is that the parties might just decide to sit on their laurels and wait for the panel to make a determination on the decision that is the most credible. The main cause for this state of affair is the difficulty in WTO litigators' attempts to reconcile the rules of civil law systems and rules under common law systems. 39 Under common law system, the phrase burden of 38 See Pauwelyn, supra note 2, at 22.

39 Id. at 227.

proof has two meanings. First, it denotes the rule that the party with the risk of losing the case in the absence of evidence is the one who bears the responsibility of adducing the evidence. 40 Second, the phrase "burden of proof" denotes the division of labor that arises when a party adduces sufficient evidence for the jury or judge to rule if the other party does not produce sufficient evidence to rebut the claims. 41 This second aspect of the definition is what is widely referred to as the prima facie case and it plays an important role in defining the concept of burden of proof under the common law system.

The system under the second aspect of the common law definition of burden of proof is that there is no clear rule on the level of evidence that a party should adduce.

In most cases, the party to a dispute merely adduces evidence that is capable of sustaining a trial and the courts call on the other party to rebut the claims 42 . Although common law decisions clearly stipulate that the prima facie case requires the offended party to present evidence that is sufficient for him to obtain a ruling in his favor, courts operating under the common law system have generally tended to rule that a prima facie case has been established in situations where the aggrieved party adduces evidence that is capable of sustaining a trial, but is insufficient to obtain a favorable ruling. 43 Another difficulty that arises from the second common law definition of burden of proof is that it contradicts the first definition. Under the second definition, burden of proof arises when the aggrieved party to a dispute adduces evidence that seems 40 Id. at 22. 41 Id.

42 Id.

43 Id.

plausible enough for a judge to rule in his favor. Under the first definition, burden of proof denotes the rule requiring the party at risk of losing the case to adduce the requisite evidence. Under this definition, there is a clear indication that there is no need for the establishment of a prima facie case. The only thing that the court will consider is the party at risk and whether he or she has exercised the burden so as to increase his/her chances of obtaining a favorable ruling. This contradiction in the implication of the two common law definition of burden of proof is one of the factors that has led courts in common law states to make rulings that are contradictory.

In J Spurling Ltd v Bradshaw, 44 Lord Denning outlined the common law position on burden of proof in his discussion about contracts of carriage. In that case, Bradshaw had instituted a claim against J Spurling Ltd after it failed to deliver goods as stipulated in a contract of carriage. Lord Denning, delivering the majority opinion, argued that in a case involving the non-delivery of goods all the duty of the claimant is merely to adduce evidence on the existence of a contract and adduce further evidence to demonstrate that the defendant company had failed to deliver the goods as requested. 45 Once the claimant has adduced that evidence, it will be upon the defendant to adduce evidence demonstrating that it was not at fault for the failure to deliver or it failed to deliver but it is exempt from any claims by virtue of a clause in the contract of carriage. 46 The Glendarroch case is another common law case in which the reasoning of the judge on the concept of burden of proof contradicted that of Lord Denning. 47 In that 44 See J Spurling Ltd v Bradshaw (1956) 1WLR 461

45 Id. at 466. 46 Id. 47 See The Glendarroch p. 226 (1984).

case, a company failed to deliver goods to the intended customers because the ship transporting the goods sunk in the sea because it was unseaworthy. Thus, the fact related to non-delivery of goods and the question under consideration was the burden of proof in such instances. Lord Esher, delivering a unanimous verdict on behalf of the other judges, argued that there was a contract of carriage and the defendant company failed to deliver the goods that were subject of that contract. Thereafter, the defendant company will have to rebut the claimant's contentions by adducing evidence that bring it prima facie within an exception 48 . If the court is satisfied with the claim, the burden of proof would shift back to the claimant to demonstrate that so that he can disprove the company's arguments. 49 An analysis of these two common law cases demonstrates that there are glaring differences in the courts application of the concept. In the case of J Spurling v Bradshaw, the court relied heavily on the rule that states that the burden of adducing evidence rests squarely on the doorstep of the individual with the highest risk of losing the case. 50 In the second case of The Glendarroch, the judge based his arguments on the second definition of burden of proof. It is particularly interesting how the judge argued that once the claimant had proved that there was a contract of carriage and the defendant failed to deliver the goods, it was upon the defendant to adduce prima facie evidence that the failure to deliver was not his fault because the cause of the failure was one of the exceptions permitted within the contract. This use of the prima facie rule is unique because the judge required the individual with access to the evidence-48 Id.

49 Id. rather than the individual with the highest risk of losing-to present prima facie evidence to support his claim that the cause of the failure was part of the exceptions envisaged in the contract. 51 The contradictory nature in which the court applied the burden of proof concept is one of the factors that have prompted scholars to doubt the applicability of the prima facie concept in WTO proceedings.

The common law practice of developing a prima facie standard of proof in which panels thoroughly assess the evidence to determine whether a state has a case is erroneous. As noted in the foregoing paragraphs, the practice even goes against the literal meaning of the term prima facie. The practice even goes against the common law practice on prima facie cases where courts decided it on the basis a standard referred to as balance of probabilities. The "balance of probabilities" concept referred to a situation in which the courts would assess the merits of the case and decide whether on the face of it or on the assessment of different possibilities the claimant had a cause of action. When one compares that practice to the present WTO practice in which panels conduct thorough analysis of the merits of an aggrieved state's claim, then it becomes clear that the standard of proof that the WTO panels are relying on is much stringent than the one applied in common law courts. The standard of proof is also much more stringent than the literal meaning of the term prima facie. There is, therefore, need for WTO panels to develop a prima facie standard that is equivalent to the prima facie standard envisaged at common law and the prima facie standard that is closer to the general meaning of the phrase.

51 Id.

VI. Burden of Proof in Civil Law

Burden of proof in civil law jurisdictions pursues the same direction as the one outlined in the first definition on burden of proof in common law. Under civil law, the duty of adducing evidence rests on the party who will be at the greatest risk of failure.

In essence, it rests on the complaining party and, as such, the party must adduce evidence to back up his claim that a give set of facts is the correct state of affairs.52

This understanding of the concept of burden of proof is markedly different from the understanding of the concept under the second definition at common law where the courts placed a burden of production on one of the parties to the case. It is also different from the WTO system where panels rely heavily on the burden of production to undermine aggrieved states' capacity to present their respective cases.

The representation of the concept of burden of proof under the German system provides an apt illustration of how civil law countries approach the concept. In Germany, the law clearly states that a complainant's production of evidence will not in any way discharge him/her from the obligation of satisfying the burden of proof 53 .

In other words, the burden of proof rests on the complainant throughout the case and there is no instance where the burden will shift to the defendant, with the result being that the party at fault is found guilty or asked to produce compensation because he/she failed to adduce adequate evidence to rebut the presented claims.

The burden of proof concept also rests on the notion that the individual who will win when there is no conclusive evidence cannot decide on the nature of evidence that will be adduced. If, for instance, the defendant agrees that he killed the plaintiff, but 21 killed on the ground of self-defense, the court will not give him the opportunity of solving the question on whether it was self-defense because of the perception that he is the individual who will win in the event that there is inconclusive evidence. As such, the court will request the other party to adduce the evidence to demonstrate that the defendant not only killed the deceased, but also that he did it without any form of provocation or that the provocation did not warrant such an outcome. 54 Therefore, the issue under civil law is not for the claimant to prove anything; it is for the claimant to persuade the judge. Because the claimant bears the greatest risk of failure on the issue at hand, he will have the duty to persuade the judge on all elements of the case. 55 Further, it is important to note that the success of a case does not always depend on how a party persuades the judge; it depends on the judges' investigation of the facts.

Judges have a duty to investigate the issue so as to determine whether the persuasion is accurate or it is faulty.

One of the most peculiar aspects of the burden of proof concept in civil jurisdictions is that the parties will adduce evidence simultaneously throughout the proceedings. 56 In common law jurisdictions, parties can exercise their respective duties to exercise their burden of adducing evidence in turns. The case commences with the complainant adducing evidence and the defendant or respondent adduces evidence after the court rules that the plaintiff has adduced concrete evidence. In contrast, civil law jurisdictions do not have similar procedures when it comes to issues 54 Id.

55 Id. at 233. 56 See Barcelo, J., Burden of Proof, Prima Facie Case and Presumption in WTO Dispute Settlement, 42 Cornell International Law Journal, 33, 42 (2009).

related to burden of proof. 57 Parties to a dispute can exercise their respective burdens any time when there is need for them to refute or prove allegations. This exercise of the burden of proof makes the civil law jurisdictions markedly different from the common law jurisdiction and has been highlighted as one of the factors that make civil law cases stand out. For instance, under German law, the plaintiff will only be called upon to adduce evidence when the facts under issue are in dispute. When the parties outline their agreement about a given fact, the court will not call either of them forward to adduce evidence.

The court will only call upon the parties in dispute to adduce evidence when the facts have been contested. Thus, when a party argues that adduces evidence to prove that the defendant trespassed into his property, the judge will immediately call upon the opposite party to refute the evidence. The judge will ask the opposing party the type of evidence he has to refute the allegations. This system is known throughout the legal circles in Germany as Beweisfuhrungslast. 58 This is markedly different from the common law system where the court assesses the merits of the evidence prior to calling upon the defendant to refute it. In common law systems, there are no rules on prima facie evidence. In the common law concept of burden of production, the courts will test whether the adduced evidence is sufficient to merit it to call upon the other party to produce rebutting evidence.

Thus, the courts will only call on the defendant to adduce evidence when there is a clear suggestion that the burden has been sufficiently addressed. In the German

Beweisfuhrungslast system, the focus of the court will be on the plaintiff's willingness 57 Id.

58 Id.

to provide evidence. 59 As long as the plaintiff underscores his willingness to provide evidence, the court will accept it and will call on the other party to respond to the claims. 60 The court will not concern itself about the chances of the claimant winning the case; it will only focus on whether the plaintiff wants to produce the evidence.

VII. The Prima Facie Standard

WTO panels borrowed the prima facie model from the common law system, but their application of the rule is markedly different from the manner in which common law judges applied it. 61 The first time that a WTO panel applied the prima facie concept was in the Shirts and Blouses Case where a common law state (India) argued that it was applicable under the WTO rules. 62 The second time the rule became applicable was in the Hormones Case when the WTO Appellate Body attempted to define it. In the case, the Appellate Body argued that the prima facie case was present in cases where the absence of contrary evidence forces the panel, as a matter of law, to decide in favor of the complainant who has presented the prima facie evidence. 63 This definition demonstrated that the WTO Appellate Body was adopting the common law definitions of the concepts of prima facie case. While the panel's move to define the prima facie concept was commendable, it failed in one respect. Despite the absence of a WTO case that clearly outlines the prima facie standard, an analysis of recent WTO cases suggests that there is a pattern in which WTO panels are using thorough assessment of evidence as the prima facie standard. Unlike in the common law where courts assess the veracity of the prima facie evidence on the basis of their first impression of the presented facts, WTO dispute settlement panels are making decisions on prima facie on the basis of a thorough analysis of the evidence that the aggrieved party has presented. The panel rulings demonstrate that they are clumping down on cases where the aggrieved state fails to adduce concrete evidence.

The US-Section 211 Appropriations Act Case is an example of a case where a WTO panel attempted to outline the prima facie standard. 66 In that case, the panel argued that the task at hand was for the aggrieved party to present evidence that was cogent enough to raise a presumption in support of its claim and the panel's duty was to critically review the presented evidence to determine whether challenged state conduct was clearly inconsistent with WTO rules. The use of the phrase "critical review" highlights the clear pattern in which WTO panels are inventing a prima facie standard in which they seek to determine the merits of the case instead of seeking to clearly determine whether the facts and evidence presented can sustain a case. In essence, the panel's argument suggests that they always attempt to try the case even before the offending state is called in to answer the claim.

Korea Alcoholic Beverages Case is another example of a case in which the panel conducted a stringent analysis of the evidence presented in its quest to determine whether the aggrieved state had established a prima facie case. 67 In that case, the issue under determination was whether imported and Korean-produced beverages were substitutes or direct competitors. 68 The Korean government had implemented a policy in which it slapped a higher import duty on imported alcoholic beverages. The Korean government argued that they did that because imported alcoholic beverages were with this claim and found that certain aspects of the claim were missing. 72 The panel concluded that Brazil had not presented evidence that was concrete enough for the tribunal to back their case that the highlighted provisions of U.S. law had violated WTO rules. The panel, therefore, dismissed the case and argued that it could not analyze the case because the aggrieved state did not present sufficient evidence to demonstrate to the panel how U.S. laws contributed to the violation of WTO rules.

In the Gambling Case, the same issue of the absence of cogent evidence to support a prima facie case arose. 73 In that case, several U.S. states enacted and implemented laws forcing corporations from Antigua to pay taxes in the U.S. for all online gambling businesses in the U.S. Antigua brought in a claim against the U.S. on the ground that the eight states had violated article XVI of the GATS. Initially, the panel assessed the case and found that there was prima facie evidence. Based on that assessment, the panel concluded that the U.S. had a case to answer on all the issues that Antigua raised. 74 The U.S. appealed that ruling and argued that the case should be dismissed of the GATS. 75 The essence of this ruling was that, in the opinion of the Appellate Body, Antigua had not established a prima facie case.

Nevertheless, the Appellate Body did not clearly specify the nature of evidence that would constitute a violation of Article XVI of the GATS. This failure to specify meant that a state faced with similar facts in future would experience the same challenges because there are no guidelines on prima facie standards. In that case, the Appellate Body stated that such a case required additional evidence to bring forth a prima facie case.

The Appellate Body made that ruling even when the available evidence suggested that U.S. states had violated the rights of Antigua. 76 The original WTO panel found that the challenged state laws were in contravention of Article XVI of GATS and requested the U.S. to remove the offending provisions from its laws. The takeaway from all the reviewed cases is that panels have not developed a prima facie standard, but their rulings suggest that panels have interpreted the requirement for the establishment of a prima facie case in a strict manner. While this strict strategy is good by compelling aggrieved parties to deliver concrete evidence, it may create hardship for parties who do not have access to evidence or might experience difficulties in determining the nature of evidence that will eventually lead to the prima facie case. Most of the cases outlined in this section of the paper had a strong evidence for states to support their claims, but they failed in the initial hurdles related to establishment of a prima facie case. 77 Such a high failure rate demonstrates that the 75 Id.

76 See Barcelo, supra note 56, at 44.

77 See John J. Barceló III, Burden of Proof, Prima Facie Case and Presumption in WTO Dispute, 42 Cornell International Law Journal 23, 36-38 (2009).

present rule on prima facie cases is ineffective. There is, therefore, a need for stakeholders to adopt a new rule on the subject.

Conclusion

The objective of the article was to critically evaluate the burden of proof concept under the WTO dispute settlement mechanism. The DSU does not explicitly regulate how to allocate the burden of proof, but panels and the AB needed to address that issue early in their history. When instituting disputes under the WTO dispute settlement mechanisms, parties must adhere to the rules set out in article 3(7) and article 3(8) of the DSU. According to the DSU, any member state instituting the action must consider the merits of their case and determine whether it will be fruitful.

The primary objective of the DSU is to ensure prompt and fruitful resolution of disputes. Although provisions of the DSU do not clearly outline the prima facie case, the analysis indicates that it requires all aggrieved parties to establish a prima facie case before the case can become the subject of a panel hearing. This rule implies that panels will have the responsibility of dismissing frivolous disputes or disputes whose evidence is so insufficient that it does not warrant an award in favor of the aggrieved party. An analysis of the concept demonstrates that it is in need of reform as aggrieved states are losing cases because of their inability to establish a prima facie case.

There is a need for the WTO to change the current rules on prima facie evidence and adopt burden of proof concept that strikes the balance between the positive aspects of the common law burden of proof concept and civil law burden of proof concept. In essence, there is a need to adopt a burden of proof standard that assesses evidence on the basis of preponderance of the available evidence rather than on the basis of a party's failure to adduce evidence to back up or dispute a claim.

Introduction of such a concept will ensure that WTO panels assess evidence in a manner that protects the interests of both the claimant and the defendant state.

The dilemma facing the WTO might be understandable. It is true that it is not possible for the WTO panels to formulate a precise definition of the phrase "prima facie" and determine the appropriate standard of proof because the facts of one case and the circumstances of parties in a given case varies. However, WTO dispute settlement panels have the power to determine the general nature of circumstances that would constitute a prima facie case. The WTO dispute settlement panels can decide to use the literal meaning of prima facie and consider it as the basis for their

decisions. An analysis of the literal meaning of prima facie demonstrates that it means "on the face of it". Using this literal meaning implies that the panel assessing the merits of a case will assess whether the evidence that a state has adduced leads can, on the face of it, sustain a case. Thus, WTO panels can base their decisions on their first impression of the evidence provided, rather than on a careful analysis of that evidence. Such a move will permit the panel to dispense justice in a manner that is fair to all parties. It will also bring the present practice of issuing decisions based upon thorough analysis of evidence to an end.

The development of the new meaning does not imply that the WTO should prescribe a precise definition of the phrase. It merely implies that the WTO must develop a prima facie standard that is agreeable to all parties to a dispute. Further, it implies that panels must develop a prima facie standard that brings justice to all parties rather than one of the parties to a dispute. Under the present prima facie standards, WTO dispute settlement panels have the power to determine the cases whose facts merit a prima facie categorization and the cases whose facts do not merit.

However, there are no guidelines on the strategies that a panel will use to rank a given case as prima facie and another case as not constituting prima facie. As such, states presenting their claims to panels are often left disheartened whenever a panel rules that the evidence they have presented has not met the prima facie standard.

50

  See: Treitel, G., Reynolds, F., & Carver, T. Carver on Bills of Lading 721 (2011).

  established a prima facie case. This situation has been compounded by the fact that several WTO panel rulings after the Hormones case have held that there is no precise prima facie standard.64 The prima facie standard will vary from one panel to another depending on the set of unique facts under consideration. Such rulings demonstrate that there is no clear agreement among panels on the factors that constitute the prima facie standard. The absence of a clear agreement leads one to wonder why the Appellate Body in the Hormones Case decided to outline the definition of the term prima facie without outlining the nature of arguments or evidence that would be considered as constituting the prima facie evidence.The absence of a clear definition of the prima facie case is an indication that there is no definition of the prima facie standard.65 The act of merely recounting what a prima facie case entails does not in any way provide a concrete definition of the phrase if there is still need for additional facts on what constitutes the prima facie standard. For the prima facie case to have a clear definition, WTO panels must clearly define the factors that constitute the prima facie standard.

  31 27 See United States-Measures Affecting Imports of Woven Wool Shirts and Blouses from India, Report of the Appellate Body, 25 April 1997, WT/DS33/AB/R.

28 Id.

29

See Report of the Appellate Body, EC-Measures concerning meat and meat products (hormones), WT/DS26/AB/R and WT/DS48/AB/R, AB-1997-4.

30

Id.

31

Id.

  However, the panel overruled this view by arguing that the burden of proof rested with the European Community because Peru was not in a position to clearly spell out the legitimate objectives that

35

See Report of the Appellate Body, European Communities -Trade Description of Sardines, WT/DS231/AB/R,

June 26, 2002, paragraph 282. 36

Id.

  The Appellate Body failed to clearly point out the degree of persuasion that claimants must demonstrate before the panel analyzing the case can argue that they have 59 Id. Measures affecting imports of woven wool shirts and blouses from India, WT/DS33/AB/R and Corr. 1, adopted 23May 1997, DSR 1997:I, 323. 63 See: Appellate Body Report, European communities-Measures concerning meat and meat products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 135 at paragraph 104.

	60 Id.
	61 See Grando, M., Evidence, proof, and fact finding in WTO dispute settlement 108 (2009).

62 See Appellate Body Report, United States-

  and did not compete directly with the local alcoholic beverages.69 However, the claimants argued that the move violated WTO provisions because it amounted to giving local products a higher level of preference than imported products. The panel assessed the presented evidence and found that the claimants had presented evidence for certain alcoholic beverages-like vodka, admixtures, liqueurs, cognac, brandies, gin, rum, and whiskies-and decided against presenting other forms of evidence in support of a category of alcohol referred to as HS 2208. That finding led the panel to argue that it will not assess claims based on the alcoholic beverages within the HS 2208 category. The panel argued that it would only call upon the offending state to respond to the claims related to the alcoholic beverages that had been supported by clear evidence. Thus, the panel decided to call upon the Korean government to answer claims related to the alcoholic beverages that the claimant had provided evidence to demonstrate that they were in direct competition with Korean manufacturer alcoholic beverages.In the Upland Cotton Case, further evidence of the stringent pattern of assessment of prima facie case is demonstrated.70 In that case, the U.S. implemented the FSC Repeal and Extraterritorial Income Act of 2000.71 Brazil was offended by the demands of the law and instituted a case at the WTO in which it requested the panel to find that article 8 and article 10.1 of the U.S. statute violated article 3.1 and 3.2 of the Agreement on Agriculture. In the case, the panel assessed the evidence presented

	66 See Panel Report, United States-Section 211 Omnibus Appropriations Act of 1998, WT/DS176/R,
	adopted 1 February 2002 at paragraph 8.19
	67 See Panel Report, Korea-Taxes on alcoholic beverages, WT/DS75/R, ADOPTED 17 February
	1999 at paragraph 10.57.

68

Id. substitutes 69 Id. 70 See Panel Report, United States-Subsidies on upland cotton, WT/DS267/R and Corr. 1, adopted 21 March 2005 at paragraph 7. 71 Id.

  because Antigua did not present evidence to back up its claim that Article XVI had been violated. In fact, the Appellate Body ruled in favor of the U.S. by arguing that Antigua did not present sufficient evidence to demonstrate that U.S. laws were inconsistent with article XVI of the GATS. The Appellate Body argued that it was erroneous for the panel to assess these laws when there was a clear indication that Antigua had not expressly demonstrated how the state laws had violated Article XVI

	72 See Panel Report, United States-Subsidies on Upland Cotton, WT/DS267/R and Corr. 1, adopted
	21 March 2005 at paragraph 8.

73

See Appellate Body Report, United State-Measures Affecting the Cross-Border Supply of Gambling and Betting Service, WT/DS285/AB/R, adopted 20 April 2005 at paragraph 154.

74

Id.

See Kurleka, M., & Turunen, S. Due Process in International Commercial Arbitration 147 (2010).

See Pauwelyn, J., Evidence, Proof and Persuasion in WTO Dispute Settlement, Who Bears the Burden? 1 JOURNAL OF INTERNATIONAL ECONOMIC LAW 227, 231 (1998).

Id.

See Kazazi, Burden of Proof and Related Issues: A Study of Evidence before International Tribunals328-329 (1996).

See Understanding on Rules and Procedures Governing the Settlement of Disputes, supra note 5, article 7(1).

See Pfitzer, J., & Sabune, S, Burden of Proof in WTO Dispute Settlement: Contemplating Preponderance of the Evidence, 9 International Centre for Trade and Sustainable Development 10 (2009).


Keywords: , art, 8 , art, 8

2 different levels of economic development, the U.S.-Arab FTAs include exceptions.

These FTAs permits countries to depart "temporarily" from their obligations of liberalizing trade and apply safeguard measures.

In the U.S.-Jordan, U.S.-Bahrain, U.S.-Morocco, and U.S.-Oman FTAs (collectively referred to U.S-Arab countries FTAs), safeguard provisions are identical in terms of conditions and procedures. Safeguard measures are protective measures used whenever unexpected increases in imports cause, or threaten to cause, serious injury to the domestic industry. 6 Safeguard measures allow FTA parties to escape from their obligations in order to give affected industries temporary relief from competition. In effect, this process enables affected industries to adjust to heightened import levels.

The only import relief mechanisms available under the U.S.-Arab countries FTAs are safeguard measures. These FTAs do not include provisions on antidumping and countervailing duties. 7 In other words, the US-Arab countries FTAs leave domestic antidumping and countervailing duty determinations untouched. Several reasons can be offered to explain the exclusion of antidumping and countervailing duties from coverage under U.S.-Arab countries FTAs.

The U.S. has concluded trade agreements with selected Arab countries. First, the U.S. concluded an FTA with Jordan in 2001. 1 Then, the U.S. has launched a 10-year effort to form a US-Middle East free trade area. 2 The U.S. will employ a "buildingblock" approach. 3 This approach requires, as a first step, a Middle East country to accede to the WTO or concluding Trade and Investment Framework Agreement(s) (TIFA). Then, the U.S. will negotiate FTA with individual countries. Finally, a critical mass of bilateral FTAs would come together to form the broader US-Middle East FTA. To achieve this end, the U.S. successfully negotiated and signed FTA's with Bahrain (2006), Morocco (2006), and Oman (2009). 4 The purpose of all these FTAs with Arab countries is, among other things, to liberalize trade and increase market access. 5 Mindful that requiring trade liberalization could result in damaging consequences among the participating countries that are at measures under the U.S.-Arab countries FTAs reflects the U.S. requirement that all trade agreements must have, at minimum, a provision for safeguard measures. 8 Second, use of antidumping and countervailing measures between the U.S. and these Arab countries has rarely been invoked prior to signing the FTAs and may not occur afterward and thus seems unneeded. 9 Third, when these FTAs reduce or eliminate tariffs and other trade barriers, dumping would be less likely to occur as competition becomes more practical. 10 The present article consists of an analysis of the safeguard measures incorporated in the U.S.-Arab countries FTAs. Specifically, the article will outline the standardsinjury and causation-used to apply safeguard measures. Furthermore, the article illustrates remedies available for domestic industries and duration of these remedies.

The article also presents the issue of global safeguard measures and the exclusion of imports of parties in the FTAs from global safeguard actions. Finally, the article will address special safeguard measures for selected sectors namely textile and agriculture.

The article concludes by arguing that the presence of safeguard measures in any FTA is necessary to facilitate the transition to a liberalized trade regime and accommodate the needs of domestic industries in the face of increased competition from other industries in trading partners. However, survey of U.S.-Arab countries FTAs demonstrates the great influence the U.S. exerted in articulating the safeguard provisions with no or little consideration of the needs of Arab countries and their domestic industries. A flexible safeguard regime should be adopted.

8 Following World War II, the U.S. president continued this policy by issuing an executive order requiring the presence of an escape clause in all future trade agreements. See Paul C. Rosenthal & Robin H. Gilbert, The 1988 Amendments to Section 201: It is not Just for Import Relief Anymore, 20 Law & Policy Intl. Bus. 403, 406 (1989). 9 No Anti-dumping investigation or definitive anti-dumping measures were applied against Jordan, Morocco, or Oman. See P.K.M Tharakan, The Problem of Anti-Dumping Protection and Developing Country Exports, Working Paper No. 198, 35 (Sep. 2000). 10 However, the existence of a free trade area or any type of regional trade arrangement does not imply that dumping has disappeared. See Terence P. Stewart & Timothy C. Brightbill, Trade Law and Competition Policy in Regional Trade Arrangements, 27 Law & Pol'y Int'l Bus. 937, 942 (1996).

Before indulging into the discussions, a point of order and style must be stated.

Since the U.S.-Arab countries FTAs are treaties, the starting point for the analysis is to consult the relevant rules of the Vienna Convention on the Law of Treaties.11 These FTAs should not be read in clinical isolation from other international sources such as WTO and its dispute settlement cases concerning the treatment of safeguard measures. 12 The terms of U.S.-Arab countries FTAs are interpreted in good faith and in accordance with the ordinary meaning given to such terms in light of their context, object, and purpose. FTA party that are imported in such quantities that cause or threaten to cause serious injury.

Conditions: Injury and Causation

To invoke safeguard measures, FTAs parties need to prove that products are imported into the country's territory in such increased quantities "as a result of tariffs reduction" and under such conditions as to cause or threaten serious injury to domestic producers of like or directly competitive products. The first requisite is the connection between increased imports and the FTAs' obligations. 18 In other words, increasing imports must be an important factor in bringing about, producing, or inducing' serious injury to the domestic industry. sufficient. An FTA party cannot depend on a sporadic increase in imports without regard to the overall level of increase. Indeed, temporary fluctuation of imports does not necessarily mean increase in imports.

According to U.S.-Arab countries FTAs, a safeguard measure can be imposed if "an originating product is being imported… in such increased quantities… and under such conditions that the imports … constitute a substantial cause…". 22 The phrase "and under such conditions" refers generally to the obligation imposed on the importing country to perform an adequate assessment of the conditions of competition between the imported products and like or directly competitive products in the importing country's market. 23 These conditions of competition can determine if increased imports cause or threaten to cause serious injury to the domestic industry.

The requisite of connection between tariff concession and increased imports is not the only condition to impose safeguard measures. Increased imports must constitute a "substantial cause" of serious injury or threat to a domestic industry. 24 The term "substantial cause" is defined as a cause that is important and not less than any other cause, a definition directly derived from U.S. trade remedy law. 25 The U.S.-Arab countries FTAs do not set out precise rules or quantitative methodologies to determine when imports are substantial cause of injury. However, WTO jurisprudence provides some guidance by requiring in this case that all sources of injury be ranked and distinguished to gauge the effects caused by the different sources. 27 Then, a determination will be made whether increased imports constitute an important cause of serious injury and a cause that is greater than all other causes. For example, if imports cause seventy-five percent of injury to XYZ industry and twentyfive percent of injury is due to some other factors. Then imports are a substantial cause or the most important cause of injury.

In contrast, article 2 of the WTO Agreement on Safeguards allows a member to apply a safeguard measure to a product only if that member has determined that such product is being imported into its territory in such increased quantities as to "cause" or threaten to cause serious injury to domestic industry. 28 It is obvious the absence of "substantial cause" language from the text of the WTO Agreement on Safeguards.

The WTO Agreement on Safeguards does not require that imports be the most important cause of injury. For example, under the WTO Agreement on Safeguards, if imports cause twenty percent of injury to XYZ industry and another factor-say change in consumer taste-cause eighty percent of injury. Then, imports-though they form only twenty percent of injury-constitutes a cause of injury and thus satisfies the threshold set by the WTO Agreement on Safeguards. By adopting the substantial causation test, the U.S.-Arab countries FTAs provide a higher burden of proof than that contained in the WTO Agreement on Safeguards.

Under U.S.-Arab countries FTAs, safeguard measures can be applied if increased imports cause "serious injury" or "threat thereof" to the domestic industry. "Serious injury" is defined as a significant overall impairment in the position of a domestic industry. 29 Threat of serious injury is defined as serious injury that is clearly imminent. 30 Since the language of U.S.-Arab countries FTAs mirror U.S. trade remedy laws and these FTAs do not provide a list of the factors that must be evaluated to determine serious injury, referring to the U.S. Trade Act of 1974 is helpful. The U.S. Trade Act of 1974 sets forth several economic factors that FTA parties must consider in determining whether serious injury or threat thereof exists. In case of serious injury, factors include significant idling of productive facilities in the domestic industry, inability of a significant number of firms to carry out domestic production operations at a reasonable level of profit, and significant unemployment or underemployment within the domestic industry. 31 In case of threat of serious injury, the factors include a decline in sales or market share, a higher and growing inventory and the extent to which firms in the domestic industry are unable to generate adequate capital to finance the modernization of their domestic plants. 32 The overall position of the domestic industry can be evaluated in light of the economic factors mentioned above. Such an evaluation will be carried on a case-bycase basis which will differ from one industry to another. It is not necessary that the outcome of evaluation for each factor must be in the negative. 33 In other words, some factors may not be declining but nevertheless the overall status shows that there is a significant impairment.

A threat of serious injury must be based on facts and not on allegation, conjecture, or remote possibility. 34 Thus, to determine that there is a threat any evaluation must be based on data and facts not on allegation or conjecture or remote possibility. Threat of serious injury must be imminent. 35 In other words, an injury is about to happen in the near future.

The standard of "serious injury" is very high. Indeed, the standard of "serious injury" in safeguard actions is higher than the standard of "material injury" in antidumping or countervailing duty actions. 36 The word "serious" connotes a much higher standard of injury than the word "material". Moreover, based on the purpose and objective of safeguard actions the injury standard should be higher because a safeguard action does not depend on unfair practice as the case of dumping or subsidies. 37 Thus, Arab countries who contemplate using safeguard measures provided in their FTAs with the U.S. should be mindful of the high standard for injury determination in these FTAs.

A safeguard measure can be imposed on an imported product if that product has an effect on the domestic industry that produces "like or directly competitive products". 38 Again the FTAs do not provide a definition of "like or directly competitive products". The words "like" and "directly competitive" should not be regarded as the same but rather to differentiate between "like" articles and articles which, although not "like" are nevertheless "directly competitive". 39 Decisions on what constitutes like product are made on a case-by-case basis after applying a variety of criteria that GATT/WTO panels have found to be relevant, including product characteristics, consumer tastes and habits, and product end-uses in a particular market. 40 Directly competitive products are those which-although not substantially identical in their inherent or intrinsic characteristics-are substantially equivalent for commercial purposes i.e. are adapted to the same uses and are essentially exchangeable.

In general, "like product" has a broader interpretation when it is used in WTO basic obligations, such as the Most-Favored-Nation treatment (MFN), and a narrower interpretation in WTO exceptions, such as anti-dumping and countervailing duties. 41 The same goes for safeguard measures under U.S.-Arab countries FTAs. In other words, "like product" would be interpreted narrowly in these FTAs. However, the use of "directly competitive products" expands the range of products that can be included.

The use of "directly competitive products" allows certain physically dissimilar products to be included provided that there is sufficient market competition between them. For example, raw orange and orange juice can be directly competitive products despite physical dissimilarities between them. There is an overlap between the end Transnatl. L. 33, 45-51 (1994) (The GATT includes seventeen provisions using the words like product, like commodity, and like merchandise).

41 Id. at 78-83.

use of raw orange and orange juice that may justify their treatment as directly competitive products.

Procedural Issues

U.S.-Arab countries FTAs provide for steps to be taken prior to imposing safeguard measures. An FTA party must deliver a notice to the other party upon initiating an investigatory process relating to serious injury or threat, making a finding of serious injury, and making a decision to apply such a measure. 42 Adequate opportunity for prior consultations should be provided. 43 Notification and consultations with the FTA partner may facilitate an amicable solution thereby de facto reducing the application of trade remedies. 44 Also, an FTA party can apply safeguard measures only after an investigation has been carried out by the competent authorities of that party in accordance with the same procedures as those provided for in article 3 and article 4.c of the WTO Safeguard Agreement. 45 In applying safeguard measures, the competent authority in a FTA party must consider all the relevant factors in an objective and quantifiable manner relating to imports and the domestic industry. latter include detailed language regarding initiation and application of safeguard measures. 47 Parties to the U.S.-Arab countries FTAs adopted this approach because they may be satisfied with the settled rules of the WTO Agreement on Safeguard thus eliminating the need of re-inventing new and untested procedures.

Remedies

As a remedy to affected domestic industries, FTAs parties can either suspend the tariff reduction or increase the tariff from the preferential rate to the previous MFN level. 48 While available remedies are limited to suspension of tariff reduction or increase in tariffs, the WTO Agreement on Safeguards remedies include the possibility of imposing quantitative restrictions i.e. quotas. 49 There is no obvious reason why the FTAs' parties excluded quantitative restrictions from the list of available remedies. One anticipates that the parties wished to promote free trade among the parties even if some industries are negatively affected by increasing tariffs or suspending further tariff reductions which would still allow market access for imports albeit at higher prices. If quantitative restrictions where to be employed as a remedy they would limit and reduce the quantity of imports. So, the FTAs' parties chose suspension of or increasing tariffs as the most suitable remedies in light of the objectives of these FTAs.

Similar to the WTO Agreement on Safeguards, U.S.-Arab countries FTAs mandates that safeguard measures can only be applied to the extent necessary to 47 For example, the WTO Agreement on Safeguards include provisions concerning reasonable public notice, public hearing, and publication of a report that sets forth the findings and reasoned conclusions reached on all pertinent issues of facts and laws prevent or remedy serious injury and facilitate adjustment. 50 Thus, these FTAs impose an obligation on parties to ensure that the safeguard measure applied is commensurate with the goal of remedying serious injury and facilitating adjustment for the domestic industry. In accomplishing this goal, the domestic industry will have to submit an adjustment plan which will be examined and evaluated by the competent national authorities.

Duration

During the FTAs' transition periods, safeguard measures can be applied for period allow safeguard measures after the expiry of the transition periods but only with the approval of the other party. 52 The contingency of applying safeguard measures on the consent of the other party is maintained for a reason. When safeguard measures are used beyond the transition period(s), the efficiencies achieved by these FTAs and the commitments for economic integration would be jeopardized. Therefore, consent of the other party becomes important to impose safeguard measures. Morocco, Bahrain, and Oman could have followed the model of the U.S.-Jordan FTA by including infant industry provisions. The U.S.-Jordan FTA, after recognizing that an infant industry may face challenges that more mature industries do not encounter, requires each party to ensure that procedures for safeguard investigations do not create obstacles to infant industries that seek the imposition of safeguard measures. 58 An infant industry is defined, in the U.S.-Jordan FTA, as an industry that has recently begun to produce like or directly competitive product. 59 The infant industry provisions aim at giving such industry for example more time to respond for a request for a public hearing, present its evidence, or provide a counter-argument against an exporter or importer. Based on the infant industry provisions in the U.S.-Jordan FTA, the infant industry will not be guaranteed a positive determination by imposing a safeguard measure.

Compensation

All U.S. FTAs with Arab countries make provisions for compensation and retaliation. Any FTA party that might be affected by the safeguard measure is to be offered compensation in the form of substantially equivalent trade liberalization or equivalent to the value of the imposed safeguard measure. 60 If such compensation is not mutually agreed upon, the party against whose product the measure is taken may resort to compensatory action, which consists of suspension of concessions or tariff increase. 61 exercised during the first 24 months, if the safeguard measure was taken as a result of an absolute increase in imports.

The issue of compensation and retaliatory action conforms to what is required under the WTO Agreement on Safeguards. In reality, requiring compensation when safeguard measures are applied makes it thorny issue. On the one hand, the importing country can impose safeguard measures but on the other hand it will have to provide compensation or concession.

B. Global Safeguard Measures

In terms of applying global safeguard measures, U.S.-Arab countries FTAs can be divided into two types. First, the U.S.-Morocco, U.S.-Bahrain, and U.S.-Oman FTAs allow members to invoke safeguard measures irrespective of bilateral trade or trade with non-FTA members. 62 Second, the U.S.-Jordan FTA is the only FTA that allows in principle the application of global safeguard measures irrespective of sources of injury but can exclude imports of parties in the FTA from global safeguard measures when certain conditions are met. 63 Imports from one party can be excluded if such imports do not constitute "a substantial cause" of serious injury or threat thereof. 64 In this case, safeguard measures cannot be applied to exports of the other FTA party. The U.S-Jordan FTA does not provide for a numerical definition of "substantial cause" of serious injury i.e. if party's imports account say for less than six percent of the total volume of imports of that good.

The MFN doctrine is one of the cornerstones of the WTO system. According to the MFN doctrine, any concession agreed between two parties will extend automatically and unconditionally to a third contracting party without the latter's adherence to any obligation. 65 In the context of safeguard law, the MFN doctrine means that safeguard measures would have to apply to all countries without exception(s). However, the U.S.-Jordan FTA excludes imports of parties in the FTA from global safeguard measures. Non-application of safeguard measures for bilateral trade between the U.S. and Jordan was brought to the attention of WTO dispute settlement panel. In that case, the WTO panel faulted the U.S. for unfairly including imports from free trade partners-such as Jordan-in its safeguard investigation while excluding their products from the final safeguard measure. 66 In other words, the WTO panel prohibits an asymmetry between the safeguard investigation and the application of its resulting safeguard measure.

The issue of asymmetry between safeguard investigation and safeguard application has been litigated several times at the WTO panels in the Argentina-Footwear case, the U.S.-Wheat Gluten case, the U.S.-Lamb case, and the U.S. Line Pipe case. 67 In all those cases, it was concluded that non-application was inconsistent with the WTO rules. 68 The WTO Appellate Body decided that if a FTA partner relied on imports from all sources as the basis for the serious injury finding, then that FTA partner is obligated to apply the safeguard measures to imports from all sources. 69 However, WTO panels have avoided making any determination that directly affects the legality of the treatment of non-application of safeguard measure for bilateral trade among FTA parties.

C. Special Safeguard Actions

Special safeguard measures are designed to protect selected products-such as textile and agriculture-from an increase in imports or decline in price. 70 It is noted that special safeguard measures can be triggered based on volume or price. The U.S.-Jordan FTA is the only FTA that does not include special safeguard measures for either textile or agriculture. Thus, safeguard measures apply to "all products" without specification. On the other hand, U.S.-Bahrain and U.S.-Oman FTAs include safeguard measures for textile while the U.S.-Morocco FTA includes safeguard measures for both textile and agriculture. 71 In its FTAs with Arab countries, the U.S.

decided to include or exclude special safeguard measures after assessing whether potential exports from these countries could threaten sensitive sectors in the U.S. or not.

cause-not substantial cause-serious injury to the domestic industry. 78 Second, regarding duration, U.S. FTAs with Morocco, Bahrain, and Oman allow special safeguard measures ten years after tariffs have been eliminated on the product(s) in question. 79 In contrast, bilateral safeguard measures are applied during the transition period only. Moreover, special safeguards for textile products differ from global safeguards. While the former apply to textile products from FTA parties only the latter apply to all countries whether FTA parties or not.

Agricultural Products

The U.S.-Morocco FTA includes special safeguard measures for agricultural products deemed sensitive. The FTA contains a list of such sensitive products. 80 The FTA also includes procedural rules such as consultation, cooperation and evaluation of the operation the special safeguards for agricultural products. 81 The additional tariff and any other customs duty must not exceed the least of the prevailing MFN rate or the rate applied on the day preceding the entry date of the FTA. 82 Detailed rules are provided for applying special safeguards for agricultural products. For the U.S., it can invoke safeguard measures on thirty-five agricultural products. 83 The U.S. can invoke special safeguard actions based on price. Additional tariffs can be imposed if the unit import price of the product in question is below the trigger price. 84 The additional tariffs are imposed based on the difference between the There are several differences between textile safeguards and agricultural safeguards.

For instance, in imposing textile safeguards, the domestic industry must suffer "serious injury or threat thereof". There is not such "serious injury or threat thereof "criterion when applying agricultural safeguards. When agricultural imports exceed certain level then safeguard measures can be invoked. , Vol. 1, 28-29, 270 (1995).

safeguards can exceed the FTA implementation period up to twenty-five years for certain products.

Conclusion

Safeguard measures aim at protecting some industries that initially cannot offer competitive prices and quality as competing imports but nonetheless by giving them breathing room can develop over time into competitive price and quality industries.

Safeguard measures are temporary in nature intended not to last forever.

The U.S.-Arab countries FTAs include three kinds of safeguard measuresbilateral, global, and special safeguards. These safeguards look alike in certain aspects while differ in other aspects. For example, bilateral, global and special safeguards are similar in terms of procedural rules such as written notice, consultation, and compensation. There are also important differences between these safeguards.

Bilateral, global and special safeguards differ in injury analysis, duration, and available remedies. For example, bilateral safeguard measures permit as a remedy either tariff increase or a suspension of any further tariff reduction while under the global safeguard measures the importing country can impose quantitative limits.

In drafting the safeguards language, the FTAs merely reflect the views of the U.S. and indeed incorporate U.S. trade remedy laws by reference. For example, the term "substantial cause" of serious injury is directly derived from U.S. law. For Morocco, the scope of coverage for agricultural safeguards is limited. Moreover, the FTAs do not include special and differential treatment for Arab countries when applying safeguards. Apparently, the U.S.-Arab countries FTAs were negotiated with a major power that obviously had its own objectives, while Arab countries played the role of demandeur. Arab countries must be "rule-makers" rather than "rule-takers". Arab countries should assert their interests as much as possible and influence even to certain degree the drafting of these FTAs.

To date, bilateral and special safeguards-compared with global safeguards, have not been used in U.S.-Arab countries FTAs as one would have hoped. Several reasons could help explain this state of affair. Lack of technical expertise in investigating and applying safeguard measures could be one reason. In addition, the "substantial cause"

test could be so difficult to overcome in addressing injuries and threats from imports.

Many of the safeguard rules in these FTAs are untested compared with global safeguards which are litigated numerous times under the WTO jurisdiction. Further, trade volume between FTAs' parties may have not risen to the level that necessitates invoking safeguard measures. Finally, if safeguard measures were to be imposed, they will have far-reaching impact on the wider trade relationships between the U.S. and Arab countries. At any rate, safeguards should play an important role in U.S.-Arab countries FTAs. An effective use of safeguard measures can assist domestic industries as a powerful weapon in fighting the sharp pain that FTAs temporarily bring and thereby protect the importing country to a certain degree.

  not exceeding three years in U.S.-Oman and U.S.-Bahrain FTAs or three years plus two in U.S.-Morocco FTA or four years in U.S.-Jordan FTA. 51 The transitional periods differ from one FTA to another. For example, the transition period in the U.S.-Jordan FTA ended in 2010 when the free trade area was accomplished. At present, no bilateral safeguards can be undertaken between the U.S. and Jordan. However, with the exception of U.S.-Morocco FTA, other U.S.-Arab countries FTAs

  Three kinds of safeguard measures are incorporated in U.S.-Arab countries FTAs, including bilateral safeguards, global safeguards, and special safeguards.15 Bilateral safeguards are implemented during the transition period, a period that provides parties of the FTAs certain time to remove or reduce the tariffs as they committed to in the agreements. However, once the transition period ends, bilateral safeguards have to be removed. Under global safeguard measures, FTA parties maintain their commitments regarding global safeguards under Article XIX of the GATT and the WTO Agreement on Safeguards.

13

An interpreter of the U.S.-Arab countries FTAs should analyze the texts in honesty, fairness and reasonableness, adopting a literal or textual interpretation of the FTAs' words, and in light of the intentions of the FTAs' drafters. 14 II. Safeguard Measures in U.S.-Arab Countries FTAs 16 However, each party can exclude the other party's exports from its proposed safeguard action if such imports do not cause serious injury or threat thereof. 17 Special safeguard measures shield politically sensitive products such as textile and agriculture from increase in imports or decline in price. Bilateral safeguards, global safeguards, and special safeguards will be analyzed consecutively.

A. Bilateral Safeguards

According to U.S.-Arab countries FTAs, parties can apply safeguard measures based on a bilateral basis. A country can escape its obligations of an FTA under certain conditions. Safeguard actions can be imposed on originating goods from an work or negotiating history of the FTA because of lack of records and the possibility of conflicting negotiating statements by parties. Moreover, where necessary, reference will be made to decisions of the WTO panels and Appellate Body especially that some articles of the U.S.-Arab countries FTAs refer directly to WTO agreements or indirectly to WTO panel and Appellate Body decisions.

Other factors that could cause injury include for example changes in technology or

	Ramifications to Subsequent Trade Disputes and to Other Trade Industries, 26 Pac. McGeorge Global consumer taste, domestic competition from substitute products, or unsound management. 26

  U.S-Arab countries FTAs do not require a waiting period before concessions can be suspended if no mutually agreed compensation is in place. The exception is U.S.-Jordan FTA which stipulates that the right of suspension may not be

58 See United States.-Jordan FTA, supra note 1, art.10.5. 59 Id. 60 See U.S-Jordan Free Trade Agreement, supra note 1, art. 10.4; United States-Morocco Free Trade Agreement, supra note 5, art. 8.5; United States-Bahrain Free Trade Agreement, supra note 5, art. 8.3; and United States-Oman Free Trade Agreement, supra note 5, art. 8.3. 61 Id.

  This line of argument has come to be known as "parallelism". See David A. Gantz, GATT/WTO Rules Governing the Use of Safeguard Measures, supra note 17, at 284-285.Perhaps, as a result of WTO panel decisions, the U.S. opted not to incorporate in its FTAs with other Arab countries global safeguard provisions similar to those in its FTA with Jordan. Thus, global safeguards in the U.S. FTAs with Morocco, Bahrain and Oman apply on a MFN basis, i.e. both to the FTA parties and other WTO members without discrimination. In its FTAs, the U.S. reasoned that to include discriminatory global safeguards it would compromise its relations with the WTO and would be ultimately disputed before WTO panels.

	65 See Edward A. Laing, Equal Access/Non-Discrimination and Legitimate Discrimination in
	International Economic Law, 14 Wis. Int'l L.J. 246 (1996). See also Julia Ya Qin, Defining Non-
	Discrimination under the Law of the World Trade Organization, 23 B.U. Int'l L.J. 215, 222 (2005).
	66 See Daniel Pruzin and Rossella Brevetti, WTO Panel Issues Final Ruling Condemning U.S. steel
	Safeguard, 20 Int'l Trade Rep. (BNA) 812 (May 8, 2003) (A World Trade Organization panel issued a
	final ruling May 2 striking down President Bush's March 2002 proclamation slapping additional tariffs
	on imports of 10 categories of steel products for a three-year period).
	67 See Joost Pauwelyn, The Puzzle of WTO Safeguards and Regional Trade Agreements, 7 Journal of
	International Economic Law 109, 119-121 (2004).

68

Id.

69

  price and trigger price.85 The additional tariffs are then percentages between the MFN rate and the preferential rate as set out in the U.S. tariff schedule. The unit import price is assessed on the basis of Free on Board (FOB) import price of the product in U.S. dollars.86 For Morocco, it can impose safeguard measures based on quantity. If volume of imports exceeds the trigger levels then special safeguards can be applied.87 Morocco can invoke special safeguards on six agricultural products.88 The additional tariffs than can be applied are set out in Morocco's schedule per good per HS subheading in the FTA's annex and declines over the implementation period.

	78 See United States-Morocco Free Trade Agreement, supra note 5, art. 4.2(1); United States-Bahrain
	Free Trade Agreement, supra note 5, art. 3.1(1); and United States-Oman Free Trade Agreement, supra
	note 5, art. 3.1(1).
	79 See United States-Morocco Free Trade Agreement, supra note 5, art. 4.2(5); United States-Bahrain
	Free Trade Agreement, supra note 5, art. 3.1(5); and United States-Oman Free Trade Agreement, supra
	note 5, art. 3.1(5).

80

See United States-Morocco Free Trade Agreement, supra note 5, Annex 3-A.

81

For example, the special safeguards must be applied in a transparent manner with written notification taking place within 60 days of implementation and consultations on request. Id. art. 3.5 (

5

) & (

6

). 82 Id. art. 5.3(1).

83

Id. Annex 3-A, Table A, U.S. Agricultural Safeguard List. 84 Id. Annex 3-1(1), Schedule of the United States.

import

The terms "agreement" and "treaty" are used here in the manner defined and described in article 2 of the Vienna Convention on the Law of Treaties. See Vienna Convention on the Law of Treaties(May 23, 1969), 1155 U.N.T.S. 331.

This approach is similar to that followed by the WTO panels and Appellate Body. The Appellate Body in the United States-Reformulated Gasoline case stated regarding article 3.2 of the DSU that "that direction reflects a measure of recognition that the General Agreement is not to be read in "clinical isolation" from public international law". See United States-Standards for Reformulated and Conventional Gasoline, Apr. 29, 1996, WTO Doc. No. WT/DS2/AB/R, at 17.

The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. 3. There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties. 4. A special meaning shall be given to a term if it is established that the parties so intended. Moreover, article 32 is related to the supplementary means of interpretation. It states that recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable. See Vienna Convention on the Law of Treaties, supra note 10, art. 31.

An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility. See Appellate Body, Japan-Taxes on Alcoholic Beverages, WT/DS8/AB/R, at 12(Oct. 4, 1996). The principle of effective interpretation will be followed, effet utile, by giving the terms their full meanings. Additionally, little attention will be paid to preparatory

See U.S-Jordan Free Trade Agreement, supra note 1; United States-Morocco Free Trade Agreement, supra note 5; United States-Bahrain Free Trade Agreement, supra note 5; and United States-Oman Free Trade Agreement, supra note 5.

See U.S-Jordan Free Trade Agreement, supra note 1, art. 10.8; United States-Morocco Free Trade Agreement, supra note 5, art. 8.6; United States-Bahrain Free Trade Agreement, supra note 5, art. 8.4; and United States-Oman Free Trade Agreement, supra note 5, art. 8.4.

David A. Gantz, GATT/WTO Rules Governing the Use of Safeguard Measures, in INTERNATIONAL TRADE LAW AND THE WTO 281-283 (Indira Carr, Shawkat Alam, and Md Jahid Hossain Bhuiyan eds. 2013) (FTA parties thus may be excluded from any global safeguard measures otherwise imposed. NAFTA, as well as other free trade agreements, such as the United States has with Israel and Jordan provided for special treatment among FTA partners in the event that one of the parties imposes global safeguards).

Bus. & Dev. L.J. 187, 199 (2013) (The AB subsequently held that the term "increasing" required investigating authorities to evaluate import trends over a "sufficiently recent period," and to determine whether imports are significantly increasing within a short period of time).22 See U.S-Jordan Free Trade Agreement, supra note 1, art. 10.1; United States-Morocco Free Trade Agreement, supra note 5, art. 8.1; United States-Bahrain Free Trade Agreement, supra note 5, art. 8.1; and United States-Oman Free Trade Agreement, supra note 5, art. 8.1. 23 WTO Appellate Body Report, Argentina-Safeguard Measures on Imports of Footwear, supra note 21, at para.8.250 24 See U.S-Jordan Free Trade Agreement, supra note 1, art. 10.1; United States-Morocco Free Trade Agreement, supra note 5, art. 8.1; United States-Bahrain Free Trade Agreement, supra note 5, art. 8.1; and United States-Oman Free Trade Agreement, supra note 5, art. 8.1. 25 Section 201 of the U.S. trade act of 1974 permits imports to be restricted, for a limited time, and on a non-discriminatory basis, if they are substantial cause of serious injury to U.S. firms or workers. See Peter Bernardi, The Great Escape, 7 D.C.L. J. Intl. L. & Prac. 69, 80 (1998).

See Taiju[START_REF] Kitano | Did US Safeguards Resuscitate Harley-Davidson in the 1980s? 79[END_REF] Hiroshi Ohashi, Did US Safeguards Resuscitate Harley-Davidson in the 1980s? 79 Journal of International Economics 186, 193 (2009). See also Fabio Spadi, Discriminatory Safeguards in the Light of the Admission of the People's Republic of China to the World Trade Organization, 5 Journal of International EconomicLaw 421, 427-432 (2002).

See Appellate Body Report, United States-Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities, WTO Doc. WT/DS166/AB/R, para.68(Jan. 19, 2001).

See Jorge Miranda, Causal Link and Non-attribution as Interpreted in WTO Trade Remedy Disputes, 44 Journal of World Trade 729, 734-736 (2010).

When safeguard measures are imposed for a period over one year, there must be progressive phase-out of the imposed safeguard measures. 53 Regarding the repeated imposition of safeguard measures on the same products, U.S.-Arab countries FTAs make it mandatory not to impose a safeguard measure on the same product twice. 54 While bilateral safeguard measures can be invoked for a limited period of time, global safeguard measures can be applied at any time, not only during the transition period, as long as the requirements for the application of the safeguard measures are met. The provisions for global safeguard measures do not contain a specific time limit in the same way as the provision for bilateral safeguards. Further, anti-dumping and countervailing duties can last for longer periods although they can be re-evaluated every five years. For this reason, in part, countries prefer to apply anti-dumping or countervailing duties and indeed using safeguard has fallen into disuse. 55 The U.S.-Arab countries FTAs do not include provisions especially addressing the status of Arab countries as developing countries. 56 . 49, 53-54 (1997). 56 There are no WTO definitions of "developed" and "developing" countries. Members announce for themselves whether they are "developed" or "developing" countries. However, other members can challenge the decision of a member to make use of provisions available to developing countries. See World Trade Organization, Development: Definition, available at < http://www.wto.org/english/tratop_e/devel_e/d1who_e.htm> (last visited Jan. 2, 2014). 57 The principle of equality of treatment among countries is inappropriate when countries are not economic equals. Within the multilateral trading system, the concept of special and differential (S&D) treatment found its way into the permanent legal structure of GATT. See Kevin C. Kennedy, The Generalized System of Preferences After Four Decades: Conditionality and the Shrinking Margin of Preferences, 20 Mich. St. J. Int'l L. 521, 533 (2012).

Textile Products

The texts of the U.S.-Morocco, U.S.-Bahrain, and U.S.-Oman FTAs are identical when referring to safeguard measures for textile products. Special safeguard measures are linked to volume. In other words, special safeguards can be imposed if there is an increase in imports. 72 If there is an increase in the volume of imports, the FTA party may increase the rate of tariffs applicable to the product through the application of the tariff for such product at the current MFN rate or the base rate whichever is lower. 73 These FTAs, similar to bilateral safeguards, require an investigation by the competent authority before a safeguard measure can be imposed. 74 Also, these FTAs mandate an advance written notice to the exporting country whenever a safeguard measure is taken with the possibility of entering into consultations at the request of one of the parties. 75 Any FTA party invoking special safeguard measures must compensate the other party in form of concessions. 76 If compensation is impossible, then the affected FTA party can retaliate. 77 Special safeguard measures for textile products differ from bilateral safeguards in two aspects. First, the cause and injury requirements are lower than bilateral safeguards. For example, to invoke special safeguards, increased imports should 72 Id. 73 76 Concessions must have substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the safeguard measure. Such concessions must be limited to textile and apparel goods, unless the FTA parties otherwise agree. See United States-Morocco Free Trade Agreement, supra note 5, art. 4.2(6); United States-Bahrain Free Trade Agreement, supra note 5, art. 3.1(6); and United States-Oman Free Trade Agreement, supra note 5, art. 3.1(6). 77 Id.