RESTRICTEDWORLD TRADE
ORGANIZATIONWT/DSB/M/53
18 March 1999
(99-1088)
Dispute Settlement Body
12 January 1999
MINUTES OF MEETING
Held in the Centre William Rappard
on 12 January 1999
Chairman:  Mr. Kamel Morjane (Tunisia)
1. European Communities - Regime for the importation, sale and distribution of bananas
(a) Recourse to Article 21.5 of the DSU by the European Communities (WT/DS27/40)
(b) Recourse to Article 21.5 of the DSU by Ecuador (WT/DS27/41)
The Chairman said that the DSB had before it two items for consideration:  (i)  recourse to
Article 21.5 of the DSU by the EC;  and (ii) recourse to Article 21.5 of the DSU by Ecuador.
The representative of Ecuador proposed that the DSB consider Ecuador's request as the first
item on the agenda.
The Chairman said that it was his understanding there was an agreement on this course of
action among the parties concerned, including the EC.  He proposed that the DSB agree that Ecuador's
request be considered as the first item on the agenda.
The DSB so agreed.
The Chairman recalled that the DSB had agreed to place this item on the agenda of the
25 November meeting and had agreed to adjourn that meeting with a view to revert to this matter at a
later date.  At the request of the EC, the DSB had reconvened on 15 December 1998 to take up this
matter.  No decision had been taken at that meeting and the DSB had agreed to adjourn itsproceedings until further notice.  On 21 December the DSB had reconvened in order to consider
separate requests by the EC and Ecuador to reconvene the original panel.  Therefore, at the present
meeting the DSB would consider the two requests for the second time.  He then drew attention to the
communication from Ecuador contained in document WT/DS27/41.
The representative of Ecuador said that the DSB had considered his country's request at its
meeting on 21 December.  At that meeting many delegations had expressed their views but no
substantive objections had been raised with regard to Ecuador's request.  He hoped that at the present
meeting the DSB would agree to this request which was under consideration for the second time.
The representative of the European Communitie s recalled that at the 21 December meeting,
the EC had supported Ecuador's request and this position remained unchanged.  Certain controversial
points contained in the request such as reference to Article 19 of the DSU could be raised before the
panel.WT/DSB/M/53
Page 2
The representative of Mexico recalled that at the 21 December meeting his delegation had
reserved its right to request a panel under Article 21.5, if necessary.
The Chairman proposed that the DSB take note of the statements and agree to refer to the
original panel, pursuant to Article 21.5, the matter raised by Ecuador in document WT/DS27/41.  The
panel would have standard terms of reference.
The DSB so agreed.
The representatives of Colombia, Costa Rica , Côte d'Ivoire , Dominica , Dominican  Republic ,
Jamaica, Mauritius , Nicaragua , Saint Lucia  and Saint Vincent and the Grenadines  reserved their third-
party rights to participate in the Panel's proceedings.
The representative of Japan asked whether the other parties to the dispute, namely Honduras,
Guatemala, Panama and the United States would also be parties to the panel.  He believed that even if
they were not, they would still be bound by the outcome of the panel report.
The Chairman recalled that Mexico had reserved its rights to request a panel on the same
matter, if it deemed necessary.  This implied that the other parties to the dispute were not committed
by Ecuador's request.  He proposed that the question raised by Japan could be taken up before the
Panel.
The representative of Mexico said that the panel should not decide on the question raised by
Japan in the DSB.  This matter was not part of the terms of reference for the panel, and he did not
wish the panel to rule on this matter.
The Chairman said that only Ecuador had requested the establishment of a panel.  However, if
this question were to be raised before the panel, the panel would have to rule on it.  He then proposed
turning to the next item and drew attention to the communication from the EC contained in document
WT/DS27/40.
The representative of the European Communities said that at the 15 December meeting of the
DSB the EC had requested a panel under Article 21.5.  The text of the request outlined the regulations
issued by the EC to implement the DSB's reco mmendations.  The EC sought standard terms of
reference similar to those contained in Ecuador's request.  The present meeting was the second time
that the EC was requesting a panel on this matter.
   
The representative of the United States said that since the DSB had agreed to refer the matter
raised by Ecuador to the original panel, it was no longer necessary to move forward with the EC's
request.  In the last paragraph of its request, the EC had indicated that the mandate of the panel would
be to make a presumption of conformity with WTO rules "unless their conformity has been duly
challenged under appropriate DSU procedures".  Ecuador had duly challenged, under appropriate
DSU procedures, the conformity of the EC's banana regime with WTO rules.  Therefore there was no
basis for the EC to maintain its request.  The EC  had stated that the purpose of its request was to
induce a challenge to its banana regime.  Although Ecuador had made such a request, the EC
continued to confuse Members.  It was not clear what was the EC's position:  that contained in its
written communications or found in its statements in the DSB meetings or other announcements made
by the  Commission.
In December 1998, the EC had surprisingly claimed that it would have accepted a request for
a panel by the complaining parties, if such a request had been made.  However, since the complaining
parties had not made such a request, the EC had been obliged to make its panel request.  It was not
clear what the EC was requesting as it could not request a panel to rule against its own measures.  TheWT/DSB/M/53
Page 3
EC had continued to confuse Members by its oral clarification to the request.  At the 21 December
meeting the EC had stated that the terms of reference could be clarified by the panel after it had been
established.  She noted that the same delegation had insisted that normal procedures under
Article 21.5 required that consultations should precede a panel.  Furthermore, in the proceedings of
the panel and the Appellate Body, the EC had claimed that the banana dispute had to start againbecause the complaining parties had not made a panel request that was sufficiently specific.
A number of questions related to the EC's request had been raised by Guatemala, Honduras,
Panama and the United States in their letter of 11 January to the DSB Chairman (WT/DS27/42).  The
EC's efforts aimed at reconvening the original panel had gone beyond the specific purpose of the
November and December meetings.  The purpose of these meetings had been to determine whether
the parties could arrive at a mutually-agreed approach  to this matter.  However, no such an agreement
had been reached.  Therefore, there had been no legitimate basis for the DSB to consider the EC's
request at the extended 25 November meeting.  The issue of whether the EC's request had been
considered for the first time by the DSB at its meeting on 21 December would have to be decided by
the DSB and not by the panel.  In the view of the United States, that meeting was not the first
consideration by the DSB of the EC's request.  Furthermore, the DSB's decision to adjourn its
25 November meeting was not a decision to waive "the notice and prior documentation requirements"
with regard to circulation of documents.  The EC's request had not complied with these requirements
and the United States could not accept the EC's attempt to modify orally its panel request.  In the letter
of 11 January the parties concerned had pointed to obvious substantial defects in the EC's request.
The EC had sought recourse to Article 21.5 in order not to review the consistency of its measures butto consider its legal position on Article 21.5.  There was no legal basis under the DSU for such a
request.  It was not clear what measures the EC wished  the original panel to review.  If, as the EC had
claimed, the procedures of Article 6 of the DSU were applicable in this case, the following points
should be clarified:  (i) whether the EC would be both the complainant and the defendant;
(ii) whether the EC had identified the specific measures to be reviewed by the panel;  and (iii) whetherthe EC had provided a brief summary of the legal basi s of its complaint.  Furthermore, if consultations
were required under Article 21.5 as the EC had insisted in the past, then the EC had not met this
requirement.  This implied that the EC would ne ed to hold consultations before making a panel
request.
The representative of Panama supported the statement by the United States.  He drew
attention to document WT/DS27/42 outlining the con cerns with regard to the EC's request.  At the
21 December meeting his delegation had expressed its concerns with regard to the EC's request,
which had been described orally by the EC as a request to reconvene the original panel to examine the
consistency of its new banana regime with the WTO Agreement.  At that meeting, Panama had
pointed out that the text of the request stated th at the EC was seeking an interpretation of the WTO
Agreement.  He noted that Article IX:2 of the WTO Agreement stipulated that the MinisterialConference and the General Council had the exclusive authority to decide on any interpretation of the
WTO Agreement.  Neither the DSB nor a panel could be granted such authority.  Panama had made it
clear that the 21 December meeting could not be the first meeting at which the EC's Article 21.5
request had been considered by the DSB because that request was not a request under Article 21.5.
Since no modifications had been made to the request, Panama continued to believe that the EC'srequest submitted at the present meeting was not a request under Article 21.5.  The negative
consensus rule could not apply to the EC's request.  The EC had claimed that the operative language
of its request had only defined the terms of reference for a panel.  However, this argument was not
convincing.  The only objective of the EC's request was for a panel to find that the EC's banana
regime was in conformity with WTO rules since its conformity had not been challenged under theDSU procedures.  This was beyond defining terms of reference since it would determine the nature of
the request.  He was concerned that the establishment of a panel on the basis of the EC's request
would raise some procedural questions such as w ho would be the opposing party.  The EC did not
seek a determination on measures adopted.  It was not clear whether the EC was the complainant, theWT/DSB/M/53
Page 4
respondent or both.  This request, which would have multilateral implications, was far too similar to
an ex parte  procedure for the comfort of any Member.  Since there was no opposing party to the EC
and participation of third parties was limited, it was not clear who would submit rebuttals to the Panel.
The request was also inconsistent with the EC's interpretation of the procedural requirements under
Article 21.5.  The EC had argued that under Article 21.5 consultations should be held before a panelrequest could be made.  The EC had not followed this procedure as it was not possible to establish
with whom such consultations could be held.  U nder the EC's own arguments, the DSB should reject
the request as the EC had not complied with Article 4 of the DSU.
 The EC's position on the procedure of Article 21.5 was inconsistent.  If the EC wished its
position to be taken seriously, it would have to withdraw this request as unacceptable.  This request
should be submitted either as a request under Article IX:2 of the WTO Agreement, or it should bereformulated to reflect the clarification made orally by the EC.  The DSB should not consider a
request without any legal or formal justification.  Instead of making new procedural obstacles, the EC
should modify its banana regime without delay in or der to bring it into conformity with the DSB's
recommendations.  The steps taken by the EC would only delay this process and undermine the
principles and the integrity of the dispute settlement system.
The representative of Guatemala reiterated her country's disagreement with the procedural
and substantive aspects of the EC's request.  There was no legal basis under the DSU for the
establishment of a panel with the terms of reference proposed by the EC.  All modifications or
clarifications made orally by the EC did not have any legal standing.  The only relevant document wasthe EC's written request which had not been properly submitted to the DSB.  The text of Article 21.5
was clear.  The panel should not be reconvened to agree with the requesting party's interpretation of
Article 21.5, nor with a request for a panel to make a presumption not provided for in the DSU
provisions.  If the DSB were to take such a decision, this would lead to an amendment of the DSU in
relation to one isolated case and would create a precedent in terms of dispute settlement differencesfor all Members.  Guatemala had demonstrated its confidence in the dispute settlement system as the
only means of resolving trade disputes.  Developing countries, in particular those with small
economies did not have any alternative other than the strict observance of the WTO Agreements and
procedures.  The legal certainty of any dispute settlement system, especially one that regulated world
trade, required parties to act in a responsible ma nner and in conformity with the multilateral rules.
The DSB should not reconvene the original panel with terms of reference other than those provided
for in Article 21.5.
The representative of Honduras expressed his delegation's concern with regard to the EC's
request.  Honduras considered that there were no legal grounds for the EC to introduce a new request
after the 25 November meeting had been suspended.  Therefore, at the 21 December meeting the DSB
had not been authorized to consider the EC's request.  The present meeting should not be consideredthe second meeting at which the EC's request was being considered by the DSB.  It was not the
intention of the drafters of Article 21.5 to permit a Member to request the DSB to reconvene a panel
to examine a matter not relevant to this Article.  The EC had not requested the panel to examine the
conformity of its measures taken to comply with the DSB's recommendations.  The request was in
violation of the letter and spirit of Article 21.5 and was inconsistent with the WTO Agreement.  To
request the original panel to deal with a matter outside its competence would be a waste of time and
resources.  In accordance with its interpretation of  Article 21.5, the EC had requested the inclusion in
the terms of reference for a panel a presumption of consistency which was not provided for under the
DSU.  The EC's request was aimed at modifying not only the functions and powers of the DSB but
also the wording of the DSU. He expressed his coun try's disappointment that it had not been possible
to end the EC's delaying tactics.  It was unacceptable that the DSU provisions which had been
designed to provide security and predictability had been misused in this case.  The system should be
able to meet these expectations. Since it was the Members' obligation to safeguard the objectives of
the dispute settlement system, the EC's request should not be accepted.WT/DSB/M/53
Page 5
The representative of Saint Lucia expressed his delegation's concern with Ecuador's request
and in particular the reference contained therein to the effect that the EC Regulation 1637/98
"discriminates in favour of traditional and non-traditional ACP bananas".  This Regulation was in line
with the Lomé Convention for which the EC had obtained a waiver.  His delegation could accept the
establishment of a panel at the present meeting.  With regard to the argument that the EC's requestwas superfluous, he noted that the panel established at the request of Ecuador would not terminate the
dispute.  It would only deal with one element thereo f.  The other complainants might decide to initiate
new panel proceedings or could take a unilateral action.  This uncertainty was damaging to the banana
trade.  The DSB had the responsibility to uphold the principles of dispute resolution and to ensure a
secure and predictable framework for the banana trade.  For these reasons, his delegation supported
the establishment of a panel as requested by the EC.
The representative of the European Communities recalled that the letter of 11 January
(WT/DS27/42) had stated that the DSB's decision to adjourn its 25 November meeting, pending an
agreement between the parties, was not "to waive the notice and prior documentation requirements"
with regard to the 10-day rule.  Therefore, if some  delegations believed that the EC's request was in
breach of the rules of procedure the same would apply to Ecuador's request and yet that request hadbeen accepted without any objections.
He recalled that the EC was seeking standard terms of reference to guide the panel.
Article 21.5 referred to a disagreement with regard to  consistency of measures taken to comply with a
covered agreement.  In case of such a disagreement any dispute should be decided through recourse todispute settlement procedures, including wherever possible resort to the original panel.  Therefore, the
original panel had to examine whether the EC's im plementing measures were in compliance with the
DSB's recommendations.  This was clear in Article 21.5 and therefore questions about the formulation
of the EC's request were not appropriate.  At the 25 November meeting no party had made a request
under Article 21.5.  The United States had correctly stated that the purpose of the EC's request was toinduce a challenge since the EC could not be both the complainant and the defendant in the same case.
When the panel would take up Ecuador's request the roles of the parties would be conventional:
i.e., Ecuador would present its case against the EC's compliance and the EC would present its case in
defence of its compliance.
The letter of 11 January had stated that the EC was not requesting the panel to review the
consistency of its banana measures but to agree with the EC's legal position on Article 21.5.  This wasnot contained in the EC's request.  The EC was asking the panel to establish a presumption of
consistency, unless the conformity of the EC's implementing measures was challenged and now this
was the case.  That point was no longer relevant.  That letter had also stated that the EC had requested,
as was now the case, a panel to interpret Article 21.5 but this was not in the text of the request.
Therefore, the request should be maintained, the EC would accept standard terms of reference and thepanel in terms of Article 21.5 would examine th e disagreement about the consistency of the EC's
measures.
Ecuador was one of the five original complainants and the other four had not joined its
request.  Therefore, it was possible that the other parties would also make similar requests.  He hopedthat if two panels were established, which was the normal procedure, one could be sure that a proper
examination would take place under Article 21.5 to determine whether the EC was in compliance or
not.  In order to ensure such an examination and a firm ruling, the EC wished to maintain its request.
The EC was not certain as to the intentions of the United States and the other parties.  In July, August
and September 1998, the parties had asked for a review under Article 21.5.  In November the UnitedStates had indicated that it wanted a review under Article 21.5 that would be carried out in a very
short period of time which was not practical.  In December the United States had blocked the EC's
efforts to place this item on the agenda and had not joined Ecuador's initiative.  Finally, it was now
blocking the proceedings from moving forward.WT/DSB/M/53
Page 6
The representative of the United States said that her delegation did not agree with the
Chairman's statement that at the present meeting the EC's request was being considered for the second
time.  In the letter of 11 January, the United States had indicated that the EC would be making its
purported Article 21.5 request for the first time at the present meeting.  No consensus had beenreached in the DSB to establish a panel on the basis of the first request and there was no basis for the
DSB to decide to establish a panel at the present meeting.  This would have to be done at the next
DSB meeting, if the EC would pursue its request.  The present meeting was also the first time that
Ecuador's request was before the DSB for consideration.  Under the DSU provisions, the DSB could
establish a panel at the first meeting and the United States supported the establishment of the panel
requested by Ecuador.  If a panel were to be established as requested by the EC it was not clear who
would be the parties to the panel's proceedings.  The United States was not a party to the panelestablished at the request of Ecuador and no Member would be a party to the panel requested by the
EC, if such panel were to be established.  She recalled that Panama had asked about the identity of the
party vis-à-vis  the EC pursuant to its request.  This issue raised some confusion.
With regard to further steps to be taken, the United States would make a timely request to
suspend concessions in accordance with the time-frame under Article 22 of the DSU.  The United
States expected that the DSB would act on such a request in the manner specified in Article 22.  The
United States would also renew its request to the EC to negotiate a substantive solution to this dispute.
The EC had stated that the United States had requested that a panel review under Article 21.5 be
completed on an accelerated basis.  This issue had been discussed on many occasions and Memberswere aware of the conclusions of these discussions.  The EC had indicated that the United States was
mistaken and the United States had claimed that the EC was not prepared to negotiate a WTO
consistent solution to this matter.  The United States had always been prepared to meet at any venue
and time with the EC.  The United States was now trying to convince the EC that it would be in the
interest of both parties to negotiate the substance of this dispute.  If such a solution were to be found
there would be no need for further WTO litigation and for the United States to exercise its right to
suspend concessions.  However, the United States would reserve its rights and would exercise them, if
necessary.  The EC had stated that the United States had not challenged its banana regime.  However,
in July, September, October and November 1998, the United States had asked the EC to refer the
matter to the original panel.  Each time the EC had either rejected the US request or had imposed
unacceptable conditions.  It was the right of the complaining party to determine when to request a
panel.  The United States had not ruled out any of its rights under the WTO.  However, in order toavoid additional litigation in the WTO, it continued to believe that the substance of the dispute had to
be resolved.  This dispute had been under consideration for more than six years and had been
examined by two panels under the GATT 1994, one panel and the Appellate Body under the WTO, as
well as arbitration over a reasonable period of time.  The objective of the WTO was to resolve
disputes not to prolong them through litigation.  The United States called upon the EC to negotiate aWTO-consistent solution.
The representative of the European Communities regretted that the United States considered
that the normal DSU procedures with regard to a disagreement between the parties about compliance,
constituted additional litigation.  In the course of 1998, the United States and other delegations hadmade statements to the effect that the EC would not be able to comply with the DSB's
recommendations.  This argument had been made before the EC had made its first proposal on
implementation.  The only way for the EC to defe nd itself was to have recourse to the DSU
procedures.  He reiterated that this was not additional litigation but procedures provided for under the
DSU.
The United States had underlined that it was still open to discussions on a substantive solution
to this matter.  So was the EC.  However, this in volved two problems.  The first was that the United
States, under its own legislation, had drafted a list of products for retaliation to be submitted forWT/DSB/M/53
Page 7
authorization to the DSB and the EC was not keen to negotiate under a threat.  If the United States
wished to negotiate a solution with the EC it should not threaten to retaliate.  Another problem related
to the issue of consistency.  Before negotiating a solution it was necessary to establish the nature of
the problem.
The EC considered that the present meeting was the second meeting at which the EC's request
had appeared on the agenda.  With regard to the question of the identity of parties to the panel, if the
two requests were accepted, the panel would discuss with Ecuador and the EC how to proceed.
Ecuador would make its submission to the effect that the EC's measures were not consistent and the
EC would make its submission that its measures were consistent.  This problem had been triggered at
the 25 November meeting since no party had invoked the Article 21.5 procedure, which was
obligatory.  Therefore, the EC which had no option and was faced with a possible retaliation, hadlaunched the procedure under Article 21.5 in order to induce the other parties to take action.
The Chairman said that he wished to refer to one point raised by Guatemala, Honduras,
Panama and the United States in their letter of 11 January as well as to the points raised by them at the
present meeting.  He understood and respected their view but his sole objective was to bring thismatter back to the system in the interest of the WTO and its dispute settlement system.  He had
previously indicated his position with regard to the procedural question of whether this was the first or
the second consideration of the EC's request.  At the 25 November meeting, he had stated that the
item concerning Article 21.5 had been placed on the agenda on the understanding that it would not be
considered at that meeting but in order to make it possible for the DSB to meet on short notice whenthe matter would be ready for consideration.  The phrase "ready for consideration" did not imply that
the parties or all the parties had to reach an ag reement before a DSB meeting could be reconvened.
For his part, he had made efforts aimed at reaching such an agreement but unfortunately this had not
been possible.  Therefore, in response to the point of order raised at that meeting, he had ruled that the
21 December meeting, reconvened at the request of the EC to consider its panel request underArticle 21.5, had been duly reconvened.  Therefore, the present meeting was the second meeting at
which the EC's request was being considered by the DSB.  With regard to the question of the identity
of parties it would be up to the panel to deal with  this matter.  At its first meeting the panel would
draw up a time-table for written submissions and would determine the parties and the third parties
thereto.
The representative of the Philippines said that his delegation had systemic concerns with
regard to the Chairman's statement.  The Chairman  had ruled that the present meeting was the second
meeting at which the EC's request was being considered by the DSB.  The item on the agenda of the
present meeting was "European Communities - Regime for the Importation, Sale and Distribution of
Bananas: Recourse to Article 21.5".  Members could have recourse to Article 21.5 "when there is a
disagreement as to the conformity of a specific measure".  The EC's request was not a proper requestunder Article 21.5 since the EC was requesting a panel to establish a presumption.  If a panel were to
be established to make a legal interpretation this would be another matter.  However, if for the sake of
automaticity of the DSU procedures with regard to the establishment of panels, the Chairman had
sought to justify that the present meeting was the second meeting at which the DSB was considering
the EC's request, his delegation could not agree with the Chairman's statement.  The present meetingshould be the first meeting since at the previous meeting the item on the Agenda had referred to
recourse to Article 21.5, but in fact had not been made in accordance with the provisions of
Article 21.5.  Therefore, this should be the first meeting at which the EC's request was being
considered by the DSB.
The representative of Mexico said that his delegation had a systemic concern with regard to
standard terms of reference.  It was not up to a panel to determine its terms of reference.  In
accordance with the DSU procedures, the DSB was requested to establish panels on the basis of terms
of reference specified in panel requests.  Therefore, in order for the terms of reference to cover theWT/DSB/M/53
Page 8
issue referred to by the Chairman, namely the determination of parties and third parties to the dispute,
the issue would have had to be outlined in the panel request.  Another possibility was for the parties to
the dispute to agree to the terms of reference other than standard terms of reference.  However, the
identity of parties was not clear in this case.  He recalled that in an anti-dumping case which involved
Mexico and Guatemala, the terms of Mexico's written request had been given strict consideration.The Appellate Body had examined Mexico's fi rst written document without considering its
subsequent communications to the panel referring to any type of measure.  His delegation wished to
ensure that decisions by the DSB, panels and th e Appellate Body would be taken in a consistent
manner.  If not, the credibility of the system would be seriously undermined.
The representative of Honduras supported the statement by the Philippines.
The representative of the United States reiterated that, in light of the procedural defects in
reconvening the 25 November meeting and the manner in which the EC's request had been placed on
the agenda as well as the lack of compliance with regard to the notification requirements, there was no
basis for the DSB's decision at the present meeting.  The statement by the EC that the panel would
meet with Ecuador and the EC had only proved that the EC's request was redundant.  She said that the
panel could not decide on the question of the identity of the parties thereto.
The representative of Ecuador said that in accordance with Article 6.2 of the DSU, a Member
requesting a panel had the obligation to comply with certain procedural requirements concerning the
format for such a request.  If, in future, a Member decided to make a request similar to that of the ECat the present meeting and the DSB proceeded as suggested, then the DSB would have an obligation
to approve any request which did not comply with the basic requirements established through
practice.  He asked whether Ecuador's request, which had been accepted by the DSB, would have
been accepted if it had been submitted without the necessary specificity.  He believed that if Ecuador's
request had not met the necessary criteria it would not have been accepted by the DSB.
Ecuador did not wish the two panels to be merged.  The terms of reference requested by
Ecuador were different from the terms of reference requested by the EC.  The 25 November meeting
had been suspended and had then been reconvened which did not constitute two meetings but one
meeting which had first been held on 25 November and had continued on 15 and 21 December.
Therefore, the requests by the EC and Ecuador had been submitted for the first time at the present
meeting, and Ecuador's request had been accepted by the DSB at the first meeting.
The Chairman confirmed that the 15 and 21 December meetings were the continuation of the
25 November meeting.  With regard to the terms of reference for the panel he had stated that the panel
could examine certain issues, including the identity of parties.  This was not because the panel had
decision-making power but because the DSB could not refuse the request for a panel.  It was the firsttime that a defendant was requesting a panel to examine the consistency of its measures.  He did not
wish to make any evaluation of the EC's request and therefore the panel would have to decide on this
matter.  The last paragraph of the EC's request stated that "…the above-mentioned implementing
measures of the European Communities must be presumed to conform to WTO rules unless their
conformity has been duly challenged under the DSU procedures".  This question would have to bedecided by the panel.
He confirmed that the two requests would not be merged although the original panel would
examine both matters.  The DSB had, on a separate basis, taken a decision with regard to Ecuador's
request.  In accordance with the DSB's decision at its 21 December meeting, the present meeting wasthe second consideration of the EC's request.  Both requests would be considered in the same manner:
i.e., the DSB would take note of the statements and agree to refer these matters to the original Panel in
accordance with Article 21.5.  He proposed that the DSB take note of the statements and agree to referWT/DSB/M/53
Page 9
to the original panel the matter raised by the EC in document WT/DS27/40 in accordance to
Article 21.5 of the DSU.  The Panel would have standard terms of reference.
The representatives of the Philippines wished to know how standard terms of reference under
Article 7.1 of the DSU would read in relation to the EC's request.
The Chairman said that as provided for in Article 7.1 of the DSU, the panel would have the
following terms of reference: " To examine in the light of the relevant provisions (the name of the
covered agreement(s) cited by the European Comm unities) the matter referred to the DSB by the
European Communities in document WT/DS27/40 and to make such findings as will assist the DSB
in making the recommendations or in giving the rulings provided for in those agreement(s)"
The representative of the Philippines said that in accordance with Article 6.2, a party could
specify the terms of reference, if it so wished.  On the basis of the EC's request it seemed that the EC
was not seeking standard terms of reference but other terms of reference in order to determine that its
implementing measures had to be presumed to conform to WTO rules unless their conformity had
been challenged.  The EC did not wish to test its measures against the WTO Agreement.  Thereforethe Chairman should take into account that the EC was not requesting standard terms of reference.
The Chairman recalled that the EC had insisted, on many occasions, that it was seeking
standard terms of reference.
The representative of the Philippines said that, in order to amend its request for a panel, a
party had to submit an amendment in writing not late r than 24 hours prior to the meeting.  However,
the EC had only provided an oral explanation concerning the interpretation of its request.
The Chairman said that the parties to the dispute could decide within 20 days on terms of
reference other than standard terms of reference.
The representative of the United States said  that, like the Philippines, her delegation had
similar concerns with regard to the identity of parties and third parties to this dispute.  Therefore the
point made by the Philippines was important.  She wished to know which covered agreements would
be relevant in this case and requested the EC to provide some explanation.
The representative of the European Commun ities said that the Chairman had already
answered many points which his delegation supported.  Some delegations had stated that the EC was
trying to amend this request and he clarified that he had not tried to amend the EC's request.  The
Chairman had indicated that the panel would have st andard terms of reference.  With regard to the
identity of parties, in his view there were two part ies to this dispute.  The question was rather who was
not a party to this dispute.  It was not clear whether the other parties involved in the banana case
would join Ecuador's request or whether Ecuador was acting alone.  On the basis of the letter of
11 January it was clear that Guatemala, Honduras, Panama and the United States were not parties to
this review.  Mexico had reserved its right to request the establishment of a panel.  After
consultations, the panel would invite the parties and third parties to participate in the proceedings.With regard to the US question concerning the covered agreements, under Article 21.5 the panel
would examine the consistency of the measures taken by the EC with the rulings and
recommendations of the DSB.  This procedure was different to the procedure concerning violation
complaints.
The representative of Mexico said that as stated by the EC, his country would not be a party
to this panel.  Mexico could become a third party in the panel within the next ten days.WT/DSB/M/53
Page 10
The representative of the United States asked Ecuador whether it considered to be a party to
the EC's request.
The representative of Panama said that the DSU was clear that a panel request had to be
submitted in writing.  Although the EC had made an oral clarification its written request was different.
If a panel were to be established such a panel should be established on the basis of the written request.
The EC considered that there were two parties in this case.  He believed that this argument was based
on the fact that Ecuador had also made its request and there was some confusion as to whether or not
these two requests were the same.  As Ecuador had stated these two requests were separate.
Therefore, the question remained who would be the other party vis-à-vis  the EC.  If one delegation
decided unilaterally on this issue this would set a dangerous precedent.
The representative of India said that his delegation was ready to accept any decision to be
taken by the DSB at the present meeting.  The dispute before the DSB raised some broad and sensitive
issues.  The provisions of Article 21.5 should not be considered to be the same as the provisions with
regard to violation complaints.  It was important fo r these issues to be analyzed separately from the
banana case.  One could analyze this issue as a di spute between two parties A and B in which party B
had lost.  Subsequently, party B would state that it had brought its measure into compliance as
recommended by the DSB.  However party A challenged this and requested to have recourse to
Article 22.  Due to the negative consensus rule a request for retaliation would be authorized the DSB.
Therefore, a party seeking a review by the multilateral forum should not be denied this option on the
ground that it did not refer to any other party as a respondent.  In India's legal system any criminal actwas considered to be a crime against the state.  The other party would be India's Government.  In this
case, one party was seeking a review of its measure by the original panel.  The question of who was
the other party because no other party had challenged this, could be examined by legal experts.  The
panel should inform the DSB members that the EC had made its request and that it had claimed that it
was in compliance with the DSB's recommendations.  Any Member interested in the matter couldmake its submission to the panel.  This could lead to a situation where there would be only two
parties.  If the party that had won did not seek a panel under Article 21.5 but requested recourse to
Article 22, then the party that had lost would be at a disadvantage.  It should be able to seek a ruling
from the original panel.  If not, the purpose of the WTO Agreement would have no meaning.
The Chairman proposed that the DSB take note of the statements and agree to refer to the
original panel pursuant to Article 21.5 of the DSU the matter raised by the European Communities in
document WT/DS27/40.  The panel would have standard terms of reference.
The DSB so agreed.
The representatives of Colombia, Costa Rica,  Côte d'Ivoire , Dominica , Dominican Republic ,
India, Jamaica , Mauritius , Nicaragua,  Saint Lucia  and Saint Vincent and the Grenadines  reserved their
third-party rights to participate in the Panel's proceedings.
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