Every now and then, there is a fairly straightforward interpretive disagreement among the various participants and third participants in a dispute. In this situation, panels and the Appellate Body generally have to pick a side. They can't make everyone happy. Unless, of course, they exercise judicial economy, but sometimes the issue just can't be avoided. Here's an example from the U.S. - Anti-Dumping and Countervailing Duties (China) (DS379) dispute.
SCM Agreement Article 1.1(a)(1) refers to a "public body" in the context of defining "financial contribution":
(a)(1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as "government")
What exactly is a "public body"? There was disagreement among the parties and third parties to the dispute on this point. The Panel found the following:
8.94. ... we conclude that a "public body", as that term is used in Article 1.1 of the SCM Agreement, is any entity controlled by a government.
China appealed this finding. Here are the various views of the participants and third participants to the appeal, taken from the argument summaries in the Appellate Body report:
China (the appellant)
21. China requests the Appellate Body to reverse the Panel's finding that "any public body" in Article 1.1 means "any government-controlled entity", and to find that a "public body" is an entity that exercises authority vested in it by the government for the purpose of performing functions of a governmental character.
The United States (the appellee)
128. The United States argues that the Panel examined the ordinary meaning of the term "public body" in its context and in the light of the object and purpose of the SCM Agreement, and correctly found that the term "public body" means an entity controlled by a government and that such entities are not necessarily, as China contends, limited to entities vested with government authority to perform governmental function.
Third Participants (those who disagreed with the Panel's view)
India
254. With respect to the definition of "public body" under Article 1.1(a)(1) of the SCM Agreement, India asserts that the degree of government ownership is not, in itself, sufficient to consider an entity to be a public body, but that the exercise of governmental authority and power is also necessary.
Norway
262. Norway disagrees with the Panel's interpretation of the term "public body". For Norway, the dividing line between "public bodies" and "private bodies" is not based on control or ownership, but on a functional delimitation based on whether the body in question performs governmental functions or not. If the body in question performs governmental functions, then its conduct is to be attributed to the State according to Article 1.1(a)(1).
Saudi Arabia
265. Saudi Arabia disagrees with the Panel's interpretation of the term "public body" and submits that a public body is an entity acting under government authority that also performs functions of a governmental character.
Third Participants (those who agreed with the Panel's view)
Argentina
234. With respect to the definition of "public body" under Article 1.1(a)(1)(i) of the SCM Agreement, Argentina agrees with the Panel's interpretation of "public body" as meaning "any government-controlled entity".
Australia
236. Australia agrees with the Panel's interpretation of the term "public body" in Article 1.1(a)(1) of the SCM Agreement as "an entity controlled by a government", and that such control may be determined principally, but not solely, on majority ownership.
Canada
243. Canada requests the Appellate Body to uphold the Panel's findings that SOEs and SOCBs are public bodies within the meaning of Article 1.1(a)(1) of the SCM Agreement. Canada submits that the Panel was correct in finding that an entity controlled by a government is a "public body", and that a government may exercise such control through whole or majority ownership.
Japan
256. Japan agrees with the Panel's finding that the term "public body" in Article 1.1(a)(1) of the SCM Agreement refers to any entity controlled by the government.
Mexico
261. Mexico disagrees with China that the defining characteristic of a public body is that "it exercises authority vested in it by the government for the purpose of performing functions of a governmental character"…. Mexico maintains that the term "public body" must be interpreted broadly and that a subsidy is deemed to exist where a body controlled by the government provides a financial contribution that confers a benefit.
Turkey
268. Turkey agrees with the Panel that government control should be the criterion for determining whether an entity is a "public body" within the meaning of Article 1.1(a)(1) of the SCM Agreement, and that ownership is the main, but not necessarily the exclusive, indicator of control.
EU
246. The European Union submits that the Panel's interpretation and application of the term "public body" in Article 1.1(a)(1) of the SCM Agreement as including, in this particular case, entities controlled by the government does not amount to a legal error, … The European Union suggests that the Appellate Body uphold the Panel's findings, but make it clearer that ownership or control is not necessarily dispositive of this matter in all cases.
247. The European Union views the actual dispute between the participants as relating to presumptions, burden of proof, and evidence before an investigating authority, with China appearing to argue that a publicly owned or controlled enterprise should be considered to be presumptively private and the United States appearing to argue that such enterprises should be considered presumptively public bodies. Therefore, the question is whether the Panel erred in finding that the evidence before the USDOC reasonably supported the determination of "public body" in the investigations at issue, and the answer to this question appears to be affirmative. ... The European Union considers that a high level of government ownership is a very relevant, potentially determinant, factor, depending on the level of cooperation from the responding parties and the evidence on the record. The degree or nature of control that government ownership entails is also relevant. As the Panel found, there could be cases where government ownership would not lead to government control, since, in a determination of whether an entity is a public body, all relevant facts and evidence should be taken into account.
So does "public body" mean "an entity controlled by a government" or does it mean "an entity that exercises authority vested in it by the government for the purpose of performing functions of a governmental character"? It wasn't possible for the Appellate Body to keep everyone happy. Here's how it came out on the issue:
317. ... We see the concept of "public body" as sharing certain attributes with the concept of "government". A public body within the meaning of Article 1.1.(a)(1) of the SCM Agreement must be an entity that possesses, exercises or is vested with governmental authority.
As the responding party in the dispute, the United States obviously has to implement. In addition, though, presumably some of the other governments who supported the Panel's interpretation did so based on how their own law works. How will they "implement" the Appellate Body's findings?
