Causal Link, Non Attribution and Contingent Protection in the WTO

This was the second of two early papers I wrote on how the WTO dispute settlement system was interpreting the trade defence agreements within the organisation’s extensive legal framework. Written in December 2002, it examined a deceptively simple question: when a domestic industry is struggling, how do you establish that imports are responsible?

I subsequently presented the paper to the WTO dispute settlement lawyers of Korea’s Ministry of Foreign Affairs during a visit to Seoul in February 2003.

What caused the injury?

An industry can lose sales, profits or jobs for many reasons. Imports may be one of them, but so might falling demand, competition between domestic producers or changes in costs. Before imposing trade remedies, an investigating authority has to establish the required causal link between the imports under investigation and the injury to domestic producers. It must also avoid attributing harm caused by other factors to those imports.

That second obligation—non-attribution—was the source of considerable difficulty. Stating the principle was relatively easy. Explaining how an authority should separate the effects of different causes, using the evidence available in a real investigation, was much harder.

Why safeguards mattered

The paper traced causation requirements from the original GATT through the successive negotiating rounds and into the WTO agreements on antidumping, subsidies and countervailing measures, and safeguards. Its main case-law analysis focused on safeguards disputes involving footwear, wheat gluten, lamb and line pipe.

Safeguards were particularly important because they offered temporary relief from injurious increases in imports without requiring a finding of dumping or subsidisation. But that relief came with demanding conditions. The question was whether the interpretation of those conditions was leaving national authorities with a standard they could realistically apply.

My concern was that panels and the Appellate Body were insisting on increasingly rigorous explanations of causation and non-attribution without providing sufficiently clear, workable guidance. Legal formulations could sound convincing while leaving the people conducting investigations unsure what evidence or analysis would actually satisfy them.

Looking back

In my view, the high bar set by this jurisprudence helped make safeguards an unattractive—and for many governments, practically unusable—route to import relief. The political pressure to assist struggling producers did not disappear. It encouraged governments to look to other instruments.

Causation remained contentious for years, although the centre of gravity in trade-remedy litigation shifted. Zeroing in antidumping calculations and the meaning of a “public body” in subsidy cases became especially divisive. Those disputes featured prominently among the United States’ stated objections to the Appellate Body’s approach.

I see those later battles as part of the same broader tension over how adjudicators interpreted the trade defence rules governments had negotiated. They contributed to the confrontation that ultimately disabled the appellate tier. The immediate institutional outcome was that, in December 2019, the Appellate Body lost the ability to form the three-member divisions needed to hear new appeals because expiring members were not replaced. That did not bring all WTO dispute settlement activity to an end, but it broke an essential part of the system.

This paper belongs to an earlier stage of that story. Its central concern was whether the legal interpretation of a negotiated remedy was making that remedy too difficult to use. My conclusion was that the ambiguities deserved to be addressed through negotiation, rather than left entirely to dispute settlement.

Read the paper

Causal Link, Non Attribution and Contingent Protection in the WTO, Simon Lacey. Written on 1 December 2002, posted on SSRN on 20 May 2008 and last revised on 30 December 2008.

Download the full paper (PDF) · View the paper on SSRN

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