In its other appellant submission in the EC - Aircraft case, the U.S. criticizes certain aspects of the Panel's reasoning under the SCM Agreement Article 3.1(a) export contingency standard. In particular, the U.S. disagrees with what it says is the Panel's consideration of subjective motivations as a required element under this standard:
16. ... The Panel’s own characterization of its reasoning thus reveals that the Panel effectively required evidence of specific motivation in order to find a tie between the subsidy and anticipated exports.
...
19. Thus, instead of considering evidence of the subsidy granting authority’s “motivation” as part of the “total configuration of the facts”18 relevant to discerning the existence of a tie between the subsidy and the anticipated exports, the Panel effectively established a requirement of specific motivation in order find such a tie.
The U.S. was concerned that making such motivations a requirement element would make it to easy to avoid these obligations:
21. As panels and the Appellate Body have recognized, divining the subjective motivation of a Member pursuing a particular policy may not always be possible, particularly given the multiple motivations that may underlie the adoption of a given measure.20 If, as the Panel’s approach reflects, subjective motivation were a necessary requirement for reaching a finding of de facto export subsidization, a subsidizing Member could tie the grant of a subsidy to exports and still avoid a finding of WTO-inconsistency, for example, simply by ensuring no public statements of motivation were made or included in the measure or discussion of it, or by publicly declaring additional motivations that did not relate to the desire to increase exports.
22. The Panel’s findings in respect of the German, Spanish and UK A380 launch aid reinforce this concern. In each instance, as discussed above, the Panel searched for evidence of subjective motivation of the member State, having concluded that the exchange of commitments in the launch aid contracts did not provide such evidence. The Panel found such evidence primarily in language from the launch aid contracts that reveals that the member States’ decisions to enter into these contracts were driven by, or in “contractual reliance”21 on, Airbus’ assurance that a substantial amount of sales would be exports.22 By explicitly making this language the determinative basis for finding the subjective motivation that the Panel considered necessary for a claim of de facto export subsidization, the Panel has essentially reduced compliance with Article 3.1 and footnote 4 to a semantic matter of deleting a few phrases from future financing agreements. Nothing in the SCM Agreement permits such a formalistic means of evading the prohibition against export subsidies.
We were also skeptical of this part of the Panel's reasoning in our DSC (although we didn't put it exactly like the U.S. did):
The role of intent has not previously been referred to by the Appellate Body under this standard, and it is not clear what the Appellate Body will think of its inclusion here. Intent has been controversial under GATT Article III, and it is likely to be contentious here as well. There are different kinds of intent, and it is generally agreed that intent can be difficult to discern. As a result, the Appellate Body might be concerned about this aspect of the Panel's reasoning.
So if intent is out (or at least, cannot be a required element), what does the U.S. argue that the focus of the export contingency standard should be:
26. Before the Panel, the United States established that the member States expected certain levels of export performance in return for the provision of launch aid. These expectations were based not only on the significant export-oriented nature of Airbus, but also on assurances provided by Airbus forecasts and existing orders for certain models at the time the member States committed to provide launch aid. These expectations, and Airbus’ commitment to meet or exceed them, were codified in the form of launch aid contracts signed by each member State for a particular model of aircraft. Without these contracts, launch aid would not have been provided.
27. As is the nature of most contracts, each of these launch aid contracts reflected a commitment by one party to perform an act in exchange for a commitment from the other party to perform another act. In the launch aid context, this exchange of commitments specifically meant the commitment of the relevant member State to provide launch aid in exchange for Airbus’ express commitment to repay that launch aid on a per sale basis over a specified number of deliveries that could not be made without exports. The repayment terms of these contracts were therefore an integral component of the obligation Airbus was required to undertake in order to receive the launch aid.
...
31. To be clear, it is the particular structure of the launch aid contracts that provides the “conditionality” required under Article 3.1(a) and footnote 4. The member States could have structured these contracts in other ways more consistent with the central features of standard financing agreements, for example, by establishing a repayment calendar based on specific dates without regard to the deliveries made by Airbus. Alternatively, they could have insisted on repayment over much smaller numbers of deliveries than actually were set out in the contracts, that is, using numbers that could be reached without necessarily exporting. The member States, however, did not choose those options as commitments they would accept in exchange for the launch aid.27
Here's what I wonder: Did structuring the repayments in this way affect Airbus' thinking about whether to sell for export or on the domestic market? Would structuring the repayments in the alternative ways suggested by the U.S. -- based on dates, or tying the repayments to smaller sales numbers -- have had an impact on the amount of exports relative to domestic sales? And do the answers to these questions have any relevance under the export contingency standard?
