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.
