RESTRICTEDWORLD TRADE
ORGANIZATIONWT/DSB/M/106
17 July 2001
(01-3534)
Dispute Settlement Body
20 June 2001
MINUTES OF MEETING
Held in the Centre William Rappard
on 20 June 2001
Chairman:  Mr. R. Farrell (New Zealand)
Subjects discussed: Page
1. Surveillance of implementation of recommendations adopted by the DSB.........................2
(a) European Communities – Regime for the importation, sale and distribution of
bananas:  Status report by  the European Communities...............................................................2
(b) Japan – Measures affecting agricultural  products:  Status report by Japan ................................5
(c) Turkey – Restrictions on imports of textile and clothing products:  Status Report by
Turkey......................................................................................................................... ................6
2. United States – Safeguard measures on imports of fresh, chilled or frozen lamb
meat from New Zealand and Australia...................................................................................7
(a) Implementation of the reco mmendations of the DSB.................................................................7
3. Egypt – Definitive anti-dumping measures on steel rebar from Turkey .............................8
(a) Request for the establishm ent of a panel by Turkey...................................................................8
4. Peru – Taxes on cigarettes................................................................................................... .....9
(a) Request for the establishm ent of a pane l by Ch ile......................................................................9
5. United States – Anti-dumping and countervailing measures on steel plate from
India .......................................................................................................................... .................9
(a) Request for the establishm ent of a panel by India ......................................................................9
6. European Communities – Trade description of sardines....................................................11
(a) Request for the establishm ent of a pane l by Peru .....................................................................11
7. European Communities – Anti-dumping duties on malleable cast iron tube or
pipe fittings from Brazil ...................................................................................................... ...12
(a) Request for the establishm ent of a panel by Brazil...................................................................12
8. Remuneration of Appellate Body members..........................................................................12
9. Proposed nomination for the indicative list of governmental and
non-governmental panelists ...................................................................................................15WT/DSB/M/106
Page 2
10. Statement by the Chairman concerning a DSB meeting in November  2001 ....................15
11. Deadline for submission of candidates for Appellate Body members................................15
12. Statement by the Deputy Director-General concerning Article 5 of the DSU...................15
1. Surveillance of implementation of recommendations adopted by the DSB
(a) European Communities – Regime for the importation, sale and distribution of bananas:
Status report by the European Communities
(b) Japan – Measures affecting agricultural products:  Status report by Japan(c) Turkey – Restrictions on imports of textile an d clothing products:  Status report by Turkey
1. The Chairman recalled that Article 21.6 of the DSU required that "unless the DSB decides
otherwise, the issue of implementation of the recommendations or rulings shall be placed on the
agenda of the DSB meeting after six months following the date of establishment of the reasonable
period of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue isresolved".  He proposed that the three sub-items to which he had just referred be considered
separately.
(a) European Communities – Regime for the importation, sale and distribution of bananas:
Status report by the European Communities (WT/DS27/51/Add.19)
2. The Chairman  drew attention to document  WT/DS27/51/Add.19 which contained the status
report by the EC on its progress in the implementation of the DSB's recommendations concerning its
banana import regime.
3. The representative of the European Communities said that at the 16 May DSB meeting, the
EC had provided details of the solution that had been  found to settle the banana dispute.  Since then,
the EC had faithfully implemented the first phase of the interim regime, covering the second half of2001.  He noted that, for the sake of transparency, the EC had circulated the full text of the
management regulation.  He confirmed that import certificates had started to be distributed to
operators on the basis of requests made.  The EC had also started to prepare for the second phase of
the interim regime, which would start on 1 January 2002.  In this regard, the EC was certain that
Members would support its waiver request, to be submitted shortly, for the implementation of this
phase.
4. The representative of Colombia said that, as indicated in the status report, the new banana
regime would not be implemented in a comprehensive way and in order for the regulation of the
second phase of the new system to be effective, various stages in the decision-making process would
still have to be completed.  Furthermore, it would be unacceptable if the initial premise was that the
regime was designed in such a way so as to relieve the EC of some of its WTO obligations.  Second,
the new system was viewed by Colombia's exporters as less harmful than the first-come, first-served
system.  Notwithstanding those factual circumstances relating to the conditions that would govern the
access for bananas to the EC's market,  he wished to reiterate the statement made by Colombia at the
16 May DSB meeting with regard to country quotas.  He noted that under the Uruguay Round
Agreement, the EC was bound to meet its obligations concerning its quotas allocated to Colombia and
to other countries.  In this sense, his country welcomed the decisions recently adopted by the EC inorder to meet its commitments and hoped that th e EC would come up with similar proposals with
regard to its obligations towards Colombia.WT/DSB/M/106
Page 3
5. The representative of the United States said that his country was following closely the steps
being taken by the EC in relation to this case.  The United States looked forward to the prospect of a
resolution to this long-standing dispute.  His countr y would continue to consult with the EC and other
interested parties as the EC proceeded with implementing its regulations in accordance with the
Understandings.
6. The representative of Honduras said that the EC's status report referred solely to the interim
regime for tariff quotas and their administration, as outlined in Commission Regulation (EC)
No. 896/2001.  The EC had not taken into account his country's desire that the negotiation should
include rules to guarantee access for its bananas.  Honduras believed that the Understanding between
the EC and the United States, if properly implemented, could contribute towards the settlement of the
banana dispute.  However, his country was concerned about the implementation of the Understanding
and wished to ensure that its rights were properly protected.  The issue of waivers was of the utmostimportance for the proper implementation of the Understanding.  Honduras would closely follow
developments in this area.  His country would only be  sure that the rights of producing countries were
adequately protected, if waivers were properly requested and approved.  The scope of waivers should
be as limited as possible and should not contain any ambiguities which could lead to different
interpretations.  Furthermore, no other documents should be incorporated by reference in suchrequests.  He pointed out that it was inappropriate to begin examination on the basis of  the current
request submitted by the EC.  In this sense, in light of the Understanding between the United States
and the EC, Honduras wished to reiterate its procedur al reservations with regard to the request for a
waiver.  The EC should amend its waiver request currently under discussion in order to adapt it to the
current situation. Honduras requested that its views be taken into consideration in order to end thebanana dispute in a fair and technically sound way that would respect its rights.
7. The representative of Guatemala said that her delegation had noted the statement made by the
EC concerning the measures taken in an effort to implement the EC/US Understanding.  The manner
in which that Understanding was to be implemented would constitute a determining factor in
preserving Guatemala's rights and in putting an end to this dispute.  Guatemala would follow closelyany action to be taken by the EC aimed at comply ing with the terms of the Understanding. Guatemala
considered that waivers referred to in the Understanding were of crucial importance because the
conditions governing such waivers would determin e access for bananas to the EC market.  The
Understanding contained the right elements for settlin g the dispute, but in order to defend its rights,
Guatemala would monitor closely its implementation.  Her delegation considered that this matter
should remain on the DSB's agenda until the end of the negotiations on waivers.
8. The representative of Ecuador said that his country would monitor closely the implementation
of the Understanding reached between the EC and Ecuador, which provided that a new banana regime
based on tariffs would become effective in 2006.  Ecuador would also monitor closely a transitional
regime to be put in place in the meantime.
9. The representative of Costa Rica said that in his country's view the information contained in
the status report represented a positive step forward towards a resolution of this dispute.  As
previously indicated, any solution should contain elements leading to improvements in comparison to
the previous arrangements.  At this stage, not all elements of the new regime were known and Costa
Rica still had some concerns about this regime.  He noted that the EC had stated that a waiver was a
prerequisite for the implementation of the second phase of the regime.  He underlined that such a
waiver should be viewed in its proper context, namely, as one of the conditions contained in thebilateral Understanding.  Like Colombia, Costa Rica continued to have concerns about the way in
which the EC had sought to resolve this dispute.  In particular, Costa Rica was concerned that the EC
had sought to maintain tariff quotas and favoured some of the parties while no solution had yet been
found with other interested parties.  Further information should be provided.WT/DSB/M/106
Page 4
10. The representative of Panama said that his country shared the views expressed by Costa Rica
concerning the waiver and the fact that a solution had not been found with all the parties concerned.
The EC had an obligation to implement the DSB's recommendations, but thus far an agreement had
only been reached with two countries.  Discussions were required with other interested parties.  A lot
had to be done before one could consider that the EC had implemented the DSB's recommendations.Panama would monitor closely any future developm ents and in order to terminate this dispute
successfully, the EC had to take into account the in terests of the parties with whom it had not reached
agreement.  The bilateral Understandings did not co ver all the aspects of its banana import regime and
Panama urged the EC to take into account other aspects.  Once this was done, it would be possible to
remove this item from the DSB's agenda.
11. The representative of Saint Lucia, speaking also on behalf of Belize, Dominica, Jamaica,
St. Vincent and the Grenadines and Surinam, thanke d the delegation of the EC for its comprehensive
and informative status report.  The countries in question welcomed the level of progress achieved in
recent months, culminating in the settlement of this long and damaging dispute.  She noted that
arriving at the solution had been a complex process demanding that concessions be made.  In order to
secure viable market access, the countries in question also had to pay a price.  Nonetheless, they
recognized the political will which was evident.  The fundamental aim of the dispute settlement
mechanism was to secure a positive solution, preferably one which was acceptable to the parties.  In
these circumstances, one which preserved the access rights of banana supplying countries, including
the most vulnerable.  To have opted for a different course – as would have been the case if the first
come, first served system, as previously discussed, had been adopted – would have left supplying
countries exposed to being played off one against the other by the dominant multinationalcorporations, entailing complete loss of security of access.  None of the parties would have truly
gained anything.
12. The countries in question had very real and worrying concerns regarding the final regulation,
scheduled to cover the period up to 2006.  The span was too brief to facilitate the level of adaptation
required of their economies and domestic industries to an open market.  The tariff-only system wasnot a viable option.  Further, they were concerned and disappointed that the access for ACP bananas
was to be reduced when the second phase of the regime was introduced.  The countries in question
had had a long-standing export trade with the EC market and it seemed particularly unfortunate and,
indeed, unfair that their secure exports should be reduced by 100,000 tonnes during the second phase
as ACP exports had exceeded the proposed reduction level in previous years.  With respect to
licensing, the countries in question would be particularly vigilant since it was the licensing system
which would buttress security of access for them, making it a reality.  It was the manner in which thiswas operated which would, in practical terms, decide whether or not the proposed settlement enabled
them to continue marketing their bananas on a viable and predictable basis; alternatively, whether the
EC market, on which they had relied for so ma ny years would be lost in the near future.
13. The representative of Belize, speaking also on behalf of Suriname, said that while the
countries in question welcomed the fact that a solution to the long-standing dispute was close, the
details of the Understanding might have an impact on some countries.  While they accepted that the
first phase of the EC's implementation had now been completed, the details of the second phase were
of paramount importance to the ACP countries.  The countries in question supported the second phase
plan to designate a separate quota for the ACP countries, however, they were deeply concerned by
some other suggested implementation details.  In reality, since the implementation of EC's Regulation404/93, banana production in some ACP countries, including Belize and Suriname, had been severely
restricted by that regime.  Progressive and efficient ACP producers had to resort to purchasing
licenses to deliver their full production.  This placed an unfair economic burden on growers in some
ACP countries, including Belize and Suriname.  For the ACP countries, the second phase
implementation of the EC banana regime would have to  result in a viable and fair return to producers.
This was the letter and the spirit of the Lomé and Cotonou Agreements, the foundation on which theirWT/DSB/M/106
Page 5
market access and their place in this dispute rested.  Accommodation had to be made for the ACP
countries to begin marketing their produce through specific designation of a new category of
"operators".  This had to be clearly defined in the proposed EC Regulation and should be included in
the waiver request put forward by the EC for the second phase of implementation of an "ACP quota".
Without this, banana producers in Belize and Suriname could only remain in the market at the mercyof transnational companies, some of which appeared  to have more interest in the trading of unused
licenses, than in the long-term viability of their banana industry and national economies.  He
underlined that it had to be kept in mind that this was only a transitional regime.  It thus should offer
the options that would translate into increased development in the ACP countries, not increased
poverty.  Belize and Suriname were prepared to face the challenge of the proposed transitional period,
however, they had to be given a fair chance to do so.  The countries in question called on all the
parties to this dispute, in particular the EC a nd the United States, to give them the opportunity to
engage appropriately.
14. The representative of Mexico said that his country would closely follow any developments
related to the transitional regime and reiterated that a tariff-only system was Mexico's preferred option
with a tariff set at an appropriate level.
15. The representative of Mauritius wished to associate her country with the statements made by
Saint Lucia and Belize who had spoken on behalf of several other countries.
16. The representative of the European Communities said that his delegation had noted carefully
the statements made at the present meeting and wished to assure delegations that it would continue to
listen carefully to their views.  Difficult negotiations were ahead concerning the waiver requested by
the EC.  In this regard, he noted that no delegation had spoken against the principle of the granting ofsuch a waiver.  With regard to the implementation of the second phase of the regime, the EC
envisaged a transfer of 100,000 tonnes of bananas from quota C to quota B.  This implied a
modification in the Regulation, and since quota C would be reserved for ACP countries it also implied
a need for a waiver, which was a precondition for the adoption of the change in the Regulation.  This
matter was under discussion and negotiations would be undertaken in this regard.  The EC wascurrently in the process of preparing a notification under Article 3.6 of the DSU and hoped to be able
to complete this shortly.
17. The representative of Cuba said that her delegation supported the statement made by Saint
Lucia on behalf of other small economies and urged that a satisfactory solution be found with all the
parties, especially developing countries.
18. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
(b) Japan – Measures affecting agricultural products:  Status report by Japan
(WT/DS76/11/Add.15)
19. The Chairman drew attention to document WT/DS76/11/Add.15 which contained the status
report by Japan on its progress in the implementation of the DSB's recommendations with regard to its
measures affecting agricultural products.
20. The representative of Japan said that in addition to the information contained in the status
report submitted at the present meeting, he wished to inform the DSB that his country was carrying
out the necessary domestic procedures in order to implement the new quarantine methodologies.  In
this regard, various meetings were being held to explain the content of the new methodologies to the
domestic producers of the fruits concerned, with a view to concluding these steps by the end ofJune 2001.  Once that process was completed, a formal public hearing would be held and then theWT/DSB/M/106
Page 6
relevant Ministry Ordinances would be amended.  He hoped that Japan would shortly be in a position
to formally notify the DSB of a mutually satisfactory solution.
21. The representative of the United States thanked the delegation of Japan for its status report
and for the additional information provided at the present meeting.  As the Untied States had
previously stated, since technical discussion s were now over, Japan should undertake the
administrative steps necessary to put its plans into place.  He noted that, to some extent, Japan had
referred to this issue at the present meeting.  The United States urged Japan to complete these steps as
rapidly as possible in order to end this dispute.  His country hoped that the parties to the dispute
would be in a position to notify the DSB of a mutual ly satisfactory solution in the near future after
Japan had taken prompt action to complete the implementation process.
22. The representative of Australia said that his delegation had noted the status report submitted
by Japan and the supplementary information which had just been provided.  Australia wished to
register its continued interest in this regard.
23. The representative of the European Communities said that the EC continued to have concerns
about the delay in the notification of a mutually satisfactory solution in this case.  Although the EC
respected Japan's wish to prevent the introduction of a codling moth, it considered that the DSB's
recommendations should be strictly followed.  In particular, the EC was concerned that Japan still hadto provide guidelines concerning the date by which it would complete its administrative process in
order to put into place the new methodology following completion of technical consultations.  The EC
urged Japan to proceed as rapidly as possible in applying the new quarantine methodology in full
conformity with the DSB's recommendations.
24. The representative of Japan said that he had noted the statements made by some delegations at
the present meeting, and would convey them to his authorities.
25. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
(c) Turkey – Restrictions on imports of textile and clothing products:  Status Report by Turkey
(WT/DS34/12/Add.8)
26. The Chairman drew attention to document WT/DS34/12/Add.8 which contained the status
report by Turkey on its progress in the implementation of the DSB's recommendations with regard to
its restrictions on imports of textiles and clothing products.
27. The representative of Turkey said that, as stated in the status report, the discussions between
the capitals in the respective countries continued.  It was his understanding that these discussions were
positive.  Turkey hoped to be in a position to come to a mutually satisfactory arrangement in the very
near future.
28. The representative of India said that, as indicated by Turkey, the parties were working
towards developing mutually acceptable compensation in accordance with Article 22 of the DSU, as a
temporary measure, pending compliance by Turkey of the DSB's recommendations.  He underlined
that even after the expiry of the reasonable period of time for implementation in this case
(19 February 2001), India had continued to work with Turkey with regard to its implementation.  Thisreflected the fact that India attached importance to full compliance with the DSB's recommendations.
India hoped that the appropriate compensation could be worked out expeditiously and that Turkey
would meet its obligations as soon as possible.WT/DSB/M/106
Page 7
29. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
2. United States – Safeguard measures on imports of fresh, chilled or frozen lamb meat
from New Zealand and Australia
(a) Implementation of the recommendations of the DSB
30. The Chairman recalled that in accordance with the DSU provisions, the DSB was required to
keep under surveillance the implementation of recommendations and rulings of the DSB in order to
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of
the DSU provided that the Member concerned shall inform the DSB within 30 days after the adoption
of the panel or Appellate Body report of its intentions in respect of implementation of the
recommendations and rulings of the DSB.  He recalled that at its meeting on 16 May 2001, the DSB
had adopted the Appellate Body Report on "Safeguard Measures on Imports of Fresh, Chilled orFrozen Lamb Meat from New Zealand and Australia" and the Panel Report on the same matter, as
modified by the Appellate Body Report.  He noted that the 30-day period in this case had expired on
15 June and on 14 June, pursuant to the agreement between the parties to the dispute, the United
States had informed the DSB in writing of its intentions in respect of implementation in document
WT/DS177/11 - WT/DS178/12.
31. The representative of the United States said that, as indicated by the Chairman, on 14 June his
country had informed the DSB in writing of its inte ntions with respect to the implementation of the
DSB's recommendations and rulings in this case.  The United States had requested that this item be
placed on the agenda to confirm its intention to implement the DSB's recommendations in a manner
that respected its WTO obligations and that it needed a reasonable period of time in which to do so.His delegation was ready to discuss the matter with New Zealand and Australia, in accordance with
Article 21.3(b) of the DSU.
32. The representative of New Zealand welcomed the undertaking by the United States to comply
with the DSB's recommendations in a manner that respected its WTO obligations.  He noted that the
United States had requested a reasonable period of time for implementation.  The removal of thesafeguard measure was the only route by which the United States could faithfully implement the
DSB's recommendations in this case, and this should be done as soon as possible.  New Zealand
recalled the comprehensive nature of the DSB's recommendations in this case and, as had been
pointed out upon the adoption of the Reports, the safeguard measure imposed by the United States had
failed to satisfy not just one, but four of the essential elements that had to be demonstrated prior to the
imposition of a safeguard measure.  The restrictions on lamb exports from New Zealand and
Australia, which had been in place for almost two years, had no legal basis under the WTO rules, yetthey were still in place.  He drew attention to Article 21.1 of the DSU which stated that prompt
compliance was essential to ensure effective resolution of disputes to the benefit of all Members.  His
country was concerned that the United States had not indicated its intentions to remove the trade
restrictive measures immediately, but had requested a reasonable period of time for implementation.
New Zealand did not understand why the United States appeared to be contemplating the need for anyadditional time-period.  Nevertheless, New Zealand welcomed the US advice that it was ready to
discuss this mater with the complainants and noted that, in order to respect the time-frames contained
in the DSU, discussions on the reasonable period of time had to be initiated without delay.  New
Zealand, therefore, requested an early proposal from the Untied States and advice of arrangements for
such discussions.  New Zealand stood ready to respond to such a proposal immediately.
33. The representative of Australia welcomed the United States' commitment to implement the
DSB's recommendations and rulings in this case.  Australia did, however, regret that the United States
had found itself unable to comply immediately, particularly in view of the length of time that hadWT/DSB/M/106
Page 8
already elapsed since the illegal safeguard measure had been introduced.  He recalled that the DSU
provided for the Member concerned to have a reasonable period of time for implementation only
where it was impracticable to comply immediately with the DSB's recommendations and rulings.  The
governing principle in those situations, as developed through arbitration awards, was that the
reasonable period of time should be the shortest period possible within the legal system of a Member.Australia called on the United States not to delay implementation, but to do so at the earliest possible
time.  Australia, once again, wished to refer to th e comprehensive nature of the rulings against the US
actions in this case and the fundamental inconsistencies found in the US approach in imposing the
safeguard measure on lamb meat.  Australia reiterated its view that implementation of the DSB's
rulings could, therefore, only be achieved by the removal of the safeguard measure.  His country
welcomed the United States' readiness, as stated in its notification, to discuss this matter with
Australia and New Zealand in accordance with Article 21.3(b) of the DSU, which provided for theparties to the dispute to determine a reasonable period of time through mutual agreement.  Australia
looked forward to such discussions at the earliest possible time in accordance with the overall
objective of resolving this dispute promptly.  On a separate matter, but still relevant to the dispute,
Australia noted that the United States was yet to notify to the Committee on Safeguards the results of
the mid-term review of the lamb meat safeguard measure as required by the Agreement onSafeguards.  While this was a separate process, Australia hoped that the United States would take this
opportunity "to kill two birds with one stone".
34. The representative of the European Communities said that the US safeguard measure had
been clearly condemned by both the Panel and the Appellate Body.  The safeguard instrument was an
extraordinary remedy against fair trade which could only be used when strict conditions wererespected.  In this case, the immediate compliance prescribed by the DSU required an immediate
withdrawal of the WTO-incompatible measure.   The United States had the legal ability to
immediately withdraw the safeguard measure which had no legal basis and it should do so.
35. The DSB took note of the statements and of the information provided by the United States
regarding its intentions in respect of implementation of the DSB's recommendations.
3. Egypt – Definitive anti-dumping measures on steel rebar from Turkey
(a) Request for the establishment of a panel by Turkey (WT/DS211/2 and Corr.1)
36. The Chairman recalled that the DSB had considered this matter at its meeting on
16 May 2001 and had agreed to revert to it.  He drew attention to the communication from Turkey
contained in documents WT/DS211/2 and Corr.1.
37. The representative of Turkey said that his country wished to reiterate its request for the
establishment of panel to examine this matter.
38. The representative of Egypt noted that Turkey's request was on the DSB's agenda for the
second time.  She said that during the consultations with Turkey in Cairo, Ankara and Istanbul, her
country had stressed the fact that the measures in question were consistent with provisions of
GATT 1994 and of the Anti-Dumping Agreement.  At the present meeting, Egypt wished to reaffirm
that its investigation and the measures in questio n were in conformity with the above-mentioned
provisions as well as with its obligations under the GATT 1994 and the WTO Agreement.
39. The representative of Turkey said that his delegation had noted the statement made by Egypt
but it was up to the panel to rule in this case.
40. The DSB took note of the statements and agreed  to establish a panel in accordance with the
provisions of Article 6 of the DSU with standard terms of reference.WT/DSB/M/106
Page 9
41. The representatives of the EC, Chile , Japan  and the United States  reserved their third-party
rights to participate in the Panel's proceedings.
4. Peru – Taxes on cigarettes
(a) Request for the establishment of a panel by Chile (WT/DS227/2)
42. The Chairman recalled that the DSB had considered this matter at its meeting on
16 May 2001 and had agreed to revert to it.  He then drew attention to the communication from Chile
contained in document WT/DS227/2.
43. The representative of Chile said that since the 16 May DSB meeting his country had been
unable to make progress with Peru or to bring their positions closer together with a view to reaching a
mutually satisfactory settlement to this dispute.  While Chile would continue to make efforts in order
to find a solution, it wished to request for the second time, the establishment of a panel to determine,
among other things, that the differential treatment applied to cigarettes in Peru was WTO-inconsistentas it discriminated against imported goods, including those from Chile.  His country was, therefore,
requesting the establishment of a panel with standard terms of reference.
44. The representative of Peru said that at the 16 May DSB meeting, his delegation had stated
that the competent Peruvian authorities had noted the concerns expressed by Chile about the current
tax treatment of cigarettes in Peru.  In this regar d, he wished to point out that the consultation held on
20 April 2001 was very important since it had initiated a very positive exchange of information on the
aspects of Supreme Decree No. 158-99-EF that were a cause of concern to Chile.  Taking into account
the positive spirit which characterized the consultation, it would have been desirable to continue the
discussion in a bilateral setting, with a view to  reaching a mutually satisfactory solution.  Peru,
therefore, regretted Chile's decision to proceed with  its request for the establishment of a panel.  As
the competent authorities of Peru had explained in the course of the consultations, Decree 158-99-EF
was not discriminatory, nor did it seek to protect the domestic industry.  He reiterated that Peru was
willing to continue to seek a mutually satisfacto ry solution.  Nevertheless, since Chile had decided to
pursue its request for the establishment of a panel, Peru would defend the legislation within the DSU
framework.
45. The DSB took note of the statements and agreed  to establish a panel in accordance with the
provisions of  Article 6 of the DSU with standard terms of reference.
5. United States – Anti-dumping and countervailing measures on steel plate from India
(a) Request for the establishment of a panel by India (WT/DS206/2)
46. The Chairman drew attention to the communication from India contained in document
WT/DS206/2.
47. The representative of India said that his country was requesting the establishment of a panel
to examine the US measures which had resulted in the imposition of anti-dumping duties on imports
of cut-to-length carbon quality steel plate from India. These anti-dumping duties had closed
effectively the US market to the sole Indian producer of cut-to-length plate,  i.e. the Steel Authority of
India (SAIL).  He drew attention to India's panel re quest and said that at the core of many of the
claims and measures contained therein was the the US Department of Commerce application and
practice of applying "total facts available".  This practice was not found in the Anti-Dumping
Agreement, rather it was developed by the US Department of Commerce.  It meant that if the US
Department of Commerce found that a substantial portion of the information provided by the
company being investigated was not useable in its view, then all of the company's data would beWT/DSB/M/106
Page 10
rejected and it would seek information from other sources.  It was not clear what happened to the
information provided by the respondent that was found to be verifiable, timely submitted and that
which could be used without undue difficulty.  It  was rejected by the US Department of Commerce,
which then used instead alternative, adverse sources of information to calculate the dumping margins,
including the information submitted by the petitioning domestic industry.
48. He noted that the result in the investigation of  cut-to-length plate, as in other investigations
involving other Members in which the US Department of Commerce had applied this practice, was a
dramatic and artificial inflation of the anti-dumping margins.  For example, the US Department of
Commerce had rejected SAIL's entire US sales database even though it had verified those data and
had found that they were complete and submitted in a timely fashion.  Instead it had applied "total
facts available" because it had claimed that other information relating to SAIL's home market sales
was not verifiable, timely submitted or otherwise useable without undue difficulty.  As a result, adumping margin of 72.49 per cent had been imposed.  He drew attention to the first sentence of
paragraph 3 of Annex II to the Anti-dumping Agreement, which stated that all information should be
used if it was verifiable, submitted in a timely fashion and would not cause undue difficulties in the
investigation.  He noted that SAIL's US sales data fell clearly within the criteria established in
Annex II, paragraph 3.  Had the US Department of  Commerce used such data as well as other
verifiable, submitted in a timely fashion and easily useable information it had received from SAIL, the
result would have significantly lowered SAIL's margins from 72.49 per cent to a mere fraction of this
figure.
49. India would demonstrate that the US statutes implementing the "facts available" provisions of
the Anti-Dumping Agreement had been interpreted by the US Department of Commerce and the USCourt of International Trade in a manner which constituted a per se  violation of various provisions of
the Anti-Dumping Agreement.  The US Department of Commerce had utterly ignored the obligation
to take into account India's developing-country status in deciding whether to accept SAIL's submitted
information, or in exploring other constructive reme dies before imposing final anti-dumping duties, in
violation of Article 15 of the Anti-Dumping Agreement.  It was time to ensure that the promiseextended by Article 15 was fulfilled.  Many developing countries were concerned about the state of
implementation of Article 15 of the Anti-Dumping Ag reement.  This Article provided that special
regard had to be given by developed-country Members to the special situation of developing-country
Members when considering application of anti-dumping measures.  However, in practice and in law,
major users of anti-dumping measures did not distinguish between developed and developing
countries in their application of such measures.  The initiation of anti-dumping proceedings might
lead the importers to switch sources of supply in favour of suppliers not targeted for anti-dumpingaction, thus resulting in financial and practical difficulties for the concerned exporters.  Those
difficulties were exacerbated in the case of developing-country exporters and overall the initiation of
anti-dumping proceedings disproportionately burdened them whether or not the final determination
was affirmative.  India was thus requesting a panel to examine this matter and looked forward to
eliminating both the application and the existence of the protectionist practice that had unfairly denied
India's access to the US market.
50. The representative of the United States said that his country regretted that India had chosen to
request the establishment of panel.  As a substantive matter, the United States believed that India's
assertions were devoid of merit and should a panel be established, it would so find.  It was clear from
India's panel request that it had declined to limit its dispute to the issue of the application by the USDepartment of Commerce of facts available.  As India was aware this issue was the subject of
ongoing private litigation in the US Courts.  Theref ore, it would be prudent for India to await the
judicial outcome of that litigation in order to determine what actual effect it had on India's view of the
proper application of the facts available.  If India chose not to await the outcome of the judicial
proceedings, the United States wished to make one comment regarding the panel request.  Indiachallenged the practice of the US Department of Commerce in applying "total facts available" both asWT/DSB/M/106
Page 11
such and as applied.  India's request for consultations did not refer to any such Department of
Commerce practice and the parties to the dispute had not consulted on the issue.  Neither
section 1677 m (d) nor 1677 m (e) of the Untied States Tariff Act of 1930 mandated any particular
action by the US Department of Commerce.  From th e US point of view, this alleged practice did not
constitute a measure and was, therefore, not properly a subject for panel review.  Thus, the UnitedStates could not agree to the establishment of a panel at the present meeting and urged India to
reconsider its approach to the matter.
51. The DSB took note of the statements and agreed
 to revert to this matter.
6. European Communities – Trade description of sardines
(a) Request for the establishment of a panel by Peru (WT/DS231/6)
52. The Chairman drew attention to the communication from Peru contained in document
WT/DS231.
53. The representative of Peru said that his country was requesting the establishment of a panel to
examine the common marketing standards for preserve d sardines as stipulated in Council Regulation
(EEC) No. 2136/89 of 21 June 1989.  He recalled that, on 20 March 2001, Peru had formally
requested consultations with the EC with a view to settling this dispute.  These consultations had been
held on 31 May 2001 and, although a useful exchange of views had taken place, no mutuallysatisfactory solution had been found.  Peru considered that the above-mentioned Regulation
constituted an unnecessary obstacle to international trade and was discriminatory since Article 2
thereof stipulated that only preserved sardines that  were prepared exclusively "from fish of the species
Sardina pilchardus Walbaum" might be marketed as preserved sardines.  This Regulation had no
justification under the WTO rules and violated, inter alia,  Articles 2 and 12 of the Agreement on
Technical Barriers to Trade and Articles I.1, III.4 and XI.1 of the GATT 1994.  He stressed that
Peruvian preserved sardines prepared from Sardinops sagax sagax  had legally entered the German
market under the description "Pacific Sardines" until June 1999.  They had satisfied the criteria
relating to safety, origin and quality established in the Community Regulation and had therefore
proved very popular on the German market.  However, their entry had been subsequently prohibitedby the application of Council Regulation (EEC) No. 2136/89, thereby causing injury to Peruvian
exporters and affecting their legitimate expectations under the WTO Agreement.  It had also
contributed to a significant decline in the activities of sardine processing plants and a rise in
unemployment, coupled with the corresponding adverse social effects, in many towns dependent upon
this industry.  Peru was surprised that, in spite of recent statements by the EC Trade Commissioner
reaffirming the EC's commitment to ensuring that  the interests and needs of developing countries
were a core component of the multilateral trading system and were fully incorporated in the context ofa fresh round of trade negotiations, the EC was implementing the provision which was not only in a
breach of WTO commitments, but was also severely detrimental to Peru's fishing industry, which was
one of the key sectors of its economy and a major source of employment.  Accordingly, Peru was
requesting the establishment of a panel with standard terms of reference.
54. The representative of the European Communities said that, in the consultations held with Peru
on 31 May 2001 as well as in other fora, the EC had expressed its readiness to seek a solution in order
to meet Peru's concerns.  The EC was in the process of collecting all the necessary information
concerning this matter in order to respond to the questions asked by Peru.  However, the EC was
disappointed about Peru's hasty decision to request the establishment of  a panel and hoped that the
parties would continue to seek a solution.  Theref ore, the EC was opposing the establishment of a
panel at the present meeting and hoped that this delay would enable the parties to find a mutually
agreed solution.WT/DSB/M/106
Page 12
55. The DSB took note of the statements and agreed  to revert to this matter.
7. European Communities – Anti-dumping duties on malleable cast iron tube or pipe
fittings from Brazil
(a) Request for the establishment of a panel by Brazil (WT/DS219/2)
56. The Chairman drew attention to the communication from Brazil contained in document
WT/DS219/2.
57. The representative of Brazil said that on 21 December 2000 his country had requested
consultations with the EC on the latter's anti-dumping measures in respect of imports of malleable
cast iron tube or pipe fittings originating in Brazil, including the initiation of the anti-dumping
investigation carried out by the EC.  He recalled that the investigation in question had led to the
imposition and collection of definitive and provisional anti-dumping duties on malleable cast iron
tube or pipe fittings from Brazil and the imposition and collection of provisional and definitive duties.These consultations had been held in Geneva on 7 February 2001, but had not resulted in a mutually
agreed solution.  Thus Brazil had no alternative but to request the establishment of a panel to examine
this matter.  The EC had started the investigation by publishing a notice of initiation on 29 May 1999
in the Official Journal of the European Communities and provisional anti-dumping duties had been
imposed by way of Commission Regulation (E C) No. 449/2000, dated 28 February 2000.  The
imposition of definitive anti-dumping duties and the collection of provisional duties had been effected
by way of Council Regulation (EC) No. 1784/2000, dated 11 August 2000.  In Brazil's view the EC
had acted and was acting in a manner inconsistent with its obligations under the GATT 1994 and the
Anti-Dumping Agreement.  Thus, the benefits accruing to Brazil either directly or indirectly under the
Anti-Dumping Agreement and the GATT 1994 had been nullified or impaired by the EC and/or theachievement of objectives of the Anti-Dumping Agreement and the GATT 1994 were being impeded
by the EC.  The EC's actions including, but not limited to, the initiation of the investigation and the
imposition and collection of provisional and definitive anti-dumping duties had significantly impacted
upon Brazil's exports of malleable cast iron tube or pipe fittings to the EC.  Brazil believed that the
EC's actions;  i.e. initiation of the investigation and the imposition and collection of provisional anddefinitive anti-dumping duties were inconsistent with several previsions of the Anti-Dumping
Agreement and of the GATT 1994 and involved not only substantive questions but also procedural
ones.  Brazil was thus requesting the establishment of a panel to examine this matter.
58. The representative of the European Communities said that the EC believed that all correct
procedures had been followed in this case and did not understand why Brazil wished to engage in
needless litigation.  The EC was confident that its findings, evaluations and determinations were
proper, unbiased, objective, transparent and in conformity with the WTO Agreement.  He noted thatall due process requirements had been strictly observed and the parties concerned, including the
Brazilian exporter, had been heard while all arguments submitted had been fully taken into
consideration.  Furthermore, the possibility of alternative solutions, in accordance with the relevant
EC legislation had been raised on several occasions .  Under these circumstances, the EC was not in a
position to agree to the establishment of the panel requested by Brazil.
59. The DSB took note of statements and agreed
 to revert to this matter.
8. Remuneration of Appellate Body members
60. The Chairman said that he had taken over this subject from his predecessor as Chairman of
the DSB and had continued the discussion on this matter with Members.  He expressed appreciation
for the Secretariat's factual contribution to the discussion.  He said that he had engaged in a variety ofinformal consultations, including with the entire DSB membership and other groups who hadWT/DSB/M/106
Page 13
expressed particular interest in the subject.  His sense was that there was no consensus on the subject
of remuneration of Appellate Body members and, therefore, he had placed this item on the agenda of
the present meeting.  While no delegation was obliged to make a statement on this matter, any
delegation wishing to express its views could do so at the present meeting.
61. The representative of Malaysia expressed his delegation's appreciation to the Chairman for
holding informal consultations.  In Malaysia's view the proposal to move from a part-time to a
full-time system had long-term systemic implications.  Therefore, as had been indicated in the
informal consultations, his country was not ready to join in a consensus on this matter.  Malaysia
believed that this was not a matter of urgency and that no further action should be taken on the
proposal at this stage.
62. The representative of Canada said that his delegation noted the Chairman's statement that
there was no consensus on this matter but nevertheless wished to make a statement at the present
meeting.  He thanked both the Chairman and the Secretariat for the consultations and the
documentation provided to Members thus far.  Canada had been an active participant in these
consultations and continued to attach great importance to this issue.  His country was prepared to keep
an open mind on the proposed conversion of Appellate Body members from part-time to full-time
status.  However, at this stage, it was not convinced that a case had been made in support of such afundamental change.  He questioned whether it was true that the current remuneration arrangements
for Appellate Body members had failed to attract and retain the best possible candidate.  Canada was
by no means persuaded that this was the case, but would welcome further consideration of this key
issue.  Moreover, while some might consider budgetary considerations to be of secondary importance
in this exercise, they did remain crucial for Canada.  In this regard, Canada believed that theSecretariat's simulation could benefit from further elaboration, particularly when it came to the
average age of Appellate Body members at retirement.  The simulation currently assumed that
Appellate Body members would continue to be of a certain age.  However, it was quite possible that
in the future there could be younger Appellate Body  members.  In Canada's view, this possibility
could have a significant impact on the projected cost of the Secretariat's proposal and should bereflected in the simulation.  Overall, Canada believed that the underlying rationale for the proposed
conversion as well as the broader implications of some of its elements, such as the Geneva-based
residency requirement, on the fundamental character of the dispute settlement system merited further
consideration and discussion by Members.  Canada looked forward to participating in this process.
63. The representative of Japan said that his country shared the view that it had become necessary
for Members to seriously consider how to overco me the current problem faced by Appellate Body
members, namely, their heavy workload.  This problem had to be examined both from the point ofview of the smooth overall functioning of the disput e settlement system, and from the point of view of
efficient budgetary management.  As pointed out in the paper prepared by the Secretariat, the current
situation of the overburden of work for each member of the Appellate Body was not foreseen by the
drafters of the DSU at the outset, and it had to be rectified within a reasonable period of time.
Conversion of Appellate Body members' remuneration to full-time basis, as proposed by theSecretariat, was one of the options.  However, Japan believed that the proposed changes to the system
might have substantive impact on the available choice of future Appellate Body members.  Japan
believed that there was a need for further discussions on the implications of the proposal on the
overall functioning of the dispute settlement mechanism, as well as on future budget expenses.  It
might be useful to have views from actual and futu re Appellate Body members.  As it would not be
easy to come back to the old system once a decision to transform the current remuneration
arrangement was taken, it would be wiser to spend more time to study the issue.  Japan also believed
that its proposal to increase the actual number of  Appellate Body members instead of modifying the
current remuneration was another option to overcome the current problem.  Japan, therefore, wished
to request Members to consider the usefulness of this proposal and was ready to actively participate inany discussions on this matter.WT/DSB/M/106
Page 14
64. The representative of the European Communities said that the Appellate Body was an element
of paramount importance for the satisfactory functioning of the dispute settlement mechanism.  It was
therefore Members' responsibility to ensure that the Appellate Body was in a position to carry out its
tasks under optimal conditions.  The EC, for its part, had always been ready to actively take part in a
debate on the definition of such optimal conditions.  In this context, the EC had noted with interest allthe information provided by the Secretariat on the cost-neutrality of moving towards a full-time status
for Appellate Body members.  The EC had a "préjugé favorable" on this proposal, and despite the
current difficulties, it remained ready to participate in further discussions, if necessary.
65. The representative of India said that his country had already expressed its views on this matter
in the course on the informal consultations.  India wished to be associated with the views expressed
by Malaysia and Japan and believed that no hasty decision should be taken on this matter.
66. The representative of Hong Kong, China thanked the Chairman for conducting informal
consultations on this matter.  Hong Kong, China had an open mind on this proposal and was ready to
participate actively, if necessary.  His delegation believed that the question of cost should not be a
major consideration and noted that the paper prepared by the Secretariat adopted a conservative
approach in the simulation.  However, like Canada , Hong Kong, China believed that the scenario
might change if younger Appellate Body members we re to be appointed in the future.  Therefore,
further information from the Secretariat would be required to demonstrate the sustainability of the
proposal.  If Members wished to further consider the proposal it would be useful to have the
Secretariat's assessment as to what extent this proposal would reduce the problem of the current
workload, ensuring availability and allowing Appe llate Body members to work more efficiently.
Hong Kong, China was ready to participate in any consultations to be held on this matter.
67. The representative of Chile said that his delegation regretted that no consensus had been
reached on this matter. He noted that Malaysia had stated that the proposal had long-term
implications.  Chile believed that there was going to be an increase in the use of the dispute settlement
system, including the services of the Appellate Body.  Currently, the Appellate Body reports were
being issued after 90 days not 60 days as prescribed in the DSU.  Therefore, long-term implicationswere clear:  if nothing was going to be done now, the situation would become worse and the weakest
and poorest countries, which benefited from the rules, would lose.  Although budgetary implications
were important, one should not approach this issue from such a narrow prospective.  Given the
increasing recourse to the dispute settlement system, greater cost would be involved.  Therefore, there
was a need to reallocate resources or to increase contributions.  However, it was not appropriate to
approach this matter exclusively from the budgetar y point of view.  There were also other options
such as to increase the number of Appellate Body members, but this had other consequences andimplications.  Perhaps both options, namely, to move to a full-time system and to increase the number
of Appellate Body members, would have to be taken into consideration.  However, the matter had to
be resolved and thus there was a need to continue discussions.  Chile wished to join previous speakers
requesting the Chairman to leave the matter open and to carry out consultations.
68. The representative of Brazil said that his delegation noted the Chairman's statement that there
was no consensus on this matter.  While agreeing with those delegations who had cautioned against
hasty decisions, Brazil believed that this matter should be kept under regular review.  For its part,
Brazil would continue to consider all the implications of the proposal as well as other alternatives for
improving or modifying the status of Appellate Body members taking into account not only the
budgetary implications, but especially looking at the possible impact on the optimal functioning of the
Appellate Body.
69. The representative of the United States said that his country remained open to discussions of
any proposals that would strengthen and improve the functioning of the Appellate Body.  At the same
time,  the United States did not think that it was necessary to reach a decision on this issue before theWT/DSB/M/106
Page 15
three new Appellate Body members were to be selected.  The United States believed that Japan,
Canada and other Members had raised some very valid concerns about the best means to ease the
Appellate Body's heavy workload, and the impact of any major changes to the structure of the
Appellate Body as well as the budget implications.  The United States also shared the concerns raised
about the justification for providing pension benefi ts to Appellate Body members who were serving
only four year or, at most eight, year terms.  A long term pension benefit for full-time Appellate Body
members would not seem warranted.  As the United States continued to consider all options, it
recognized that some options such as increas ing the number of AB members would require an
amendment of the DSU.  The United States did not believe that that should prevent serious
consideration of such options.
70. The Chairman said that his conclusion that there was no consensus on this matter had been
confirmed by the statements made at the present meeting.  He proposed that the DSB might
potentially revert to this matter at a later date.
71. The DSB took note of the statements and agreed  to potentially revert to this matter at a later
date.
9. Proposed nomination for the indicative list of governmental and non-governmental
panelists (WT/DSB/W/165)
72. The Chairman drew attention to document WT/DSB/W/165 which contained an additional
name proposed for inclusion on the indicative list in accordance with Article 8.4 of the DSU.  He
proposed that the DSB approve the name contained in document WT/DSB/W/165.
73. The DSB so agreed.
10. Statement by the Chairman concerning a DSB meeting in November 2001
74. The Chairman, speaking under "Other Business", drew Members' attention to the fact that
there was a regular meeting of the DSB scheduled for 13 November 2001.  Since this date coincided
with the dates of the Fourth Ministerial Conference in Doha, he proposed that the meeting scheduled
for 13 November be cancelled and that, if necessary, a special meeting of the DSB be held after the
Fourth Ministerial Conference, if there were any matters which could not await the regular meetingscheduled for 18 December 2001.
75. The DSB so agreed.
11. Deadline for submission of candi dates for Appellate Body members
76. The Chairman, speaking under "Other Business", recalled that the deadline for submission of
candidates for Appellate Body members had been set by the DSB as closing on 29 June 2001.  He
said that nominations should be addressed to the Director-General and should reach his office by
5 p.m. on 29 June 2001.
77. The DSB took note of this information.
12. Statement by the Deputy Director-General concerning Article 5 of the DSU
78. The Deputy Director-General, Mr. A. Stoler, speaking under "Other Business", said that the
purpose of the DSU was to provide avenues for the settlement of disputes among Members.  He noted
that to date, nearly all disputes involving provisions of covered agreements had been settled throughrecourse to panel proceedings.  Article 5 of the DSU provided for the use of good offices, conciliationWT/DSB/M/106
Page 16
and mediation, but this provision had not been used since the inception of the WTO.  Because the
Director-General was of the view that Members should be afforded every opportunity to settle their
disputes through negotiations wherever possible,  the Director-General wished to call Members'
attention to the fact that he was ready and willing to assist them by making Article 5 operational.
Article 5.6 of the DSU provided that the Director-General might offer his services in regard to goodoffices, conciliation and mediation in his ex offici o capacity; that was, within the powers inherent in
his office.  In order to facilitate the use of good offices, conciliation and mediation, the
Director-General planned to issue a note to Members in the near future.  The note would explain the
background of this provision of the DSU, and would provide some specific procedures for Members
to use in requesting his assistance.  This note and the procedures were intended to help Members
resolve their differences and would in no way limit their rights under the WTO Agreement.  The
purpose of the forthcoming note would be to make operational the Director General's specific roleenvisioned in Article 5.6 of the DSU.  These sp ecific procedures would not in any way limit the
Director-General's availability to assist Members more generally whenever they requested his help.
He said that the Director-General looked forward to working with delegations and hoped that the note
would be useful to Members who might wish to avail themselves of the provisions of Article 5 of the
DSU.
79. The DSB took note of the statement.
__________