In this dispute settlement action in the General Agreement on Tariffs and Trade (GATT), the complainant European Communities (EC) challenged the 1986 Japan-U.S. Arrangement on Semiconductor Trade (Arrangement). The panel of three experts found that (1) export regulations that prevent or quantitatively restrict exports below a minimum price level are inconsistent with GATT Article XI; (2) a complex of Japanese government measures including non-legally binding administrative guidance to prevent semiconductor exports below cost were such export restrictions and, hence, inconsistent with GATT Article XI; (3) the GATT’s provisions on dumping in Article VI neither justify nor forbid such restraints by exporting countries; and (4) the evidence did not show that Japanese actions to improve market access for foreign semiconductors had discriminated in favor of U.S. products.

The successive holders of the office of Secretary-General of the United Nations have displayed considerable boldness and resourcefulness in the exercise of powers not spelled out in the Charter of the Organization but regarded as inherent in the office. Not surprisingly, the majority, but not all, of the numerous instances in which the United Nations Secretary-General has acted under those powers have concerned political questions. This activity, which usually aims either at forestalling potential disputes or at settling or assisting in the settlement of actual ones, has taken on a multiplicity of forms. In fact, just prior to the substantive involvement of the Secretary-General in the Central American situation, which was initiated in November 1986 and constituted yet another example of the use of his inherent powers, a point had been reached where very little room appeared to remain for significant innovation in the use of those powers to promote the settlement of disputes. Nevertheless, that situation gave the UN Secretary-General an opportunity to demonstrate that new ground could still be broken in this respect.