RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/DS/M/14 
20 April 2004 
 (04-1773) 
Special Session of the Dispute Settlement Body  
13 -14 November 2003  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 13-14 November 2003  
 
Chairman:  Mr. Péter Balás (Hungary) 
 
 
 Prior to the adoption of the agenda , the Chairman  welcomed participants to the fourteenth 
formal meeting of the Special Session and said that this was the first meeting of the Special Session 
since the Cancún Ministerial Conference.  He re called that the General Council had agreed on 
24 July 2003 that the time-frame for completion of  the work was to be extended by one year, until 
May 2004 and that further work should build on the Chairman's text of 28 May 2003 and proposals put forward by Members.  It was also agreed that  the first reconvened meeting of the Special Session 
should be devoted to a discussion of conceptual issu es.  He further recalled that at the informal 
meeting held on 16 October 2003, Members had agreed to hold the present current meeting – its first 
meeting in this phase of the negotiations.  Members had agreed at that meeting to complement the 
conceptual discussion mandated by the General Coun cil, if time permitted, with a general issue-by-
issue discussion on the work done thus far.  He said that in response to the requests by some participants at the informal meeting, he had circ ulated a list of questions to assist the discussion 
informally, or at least to start the discussion whic h would follow the stages of the dispute settlement 
process starting with the panel phase.  He drew partic ipants' attention to the agenda of the meeting and 
said that it was his understanding that Malaysia mi ght be presenting a proposal at this meeting. 
 The representative of Malaysia
 said that the proposal was in the process of being finalized and 
that they hoped to present it at the next meeting of the Special Session. 
 The Chairman  proposed the deletion of the item relating to the submission of a proposal by 
Malaysia from the agenda and asked if any dele gation wished to raise any issue under "Other 
Business".  He said that he would address the issue of  further work.  As there was no request from the 
floor, the agenda of the meeting was adopted, as modified.   
I. DISCUSSION OF CONCEPTUAL ISSUES 
1. The Chairman  recalled the decision of the General Council which mandated that the first 
meeting of the Special Session should be devoted to a discussion of conceptual issues and said that 
Mexico had circulated a paper (Job (03)/208) inte nded to facilitate the discussion. He asked whether 
any delegation wished to make a general interventi on of a conceptual nature.  The  representative of 
the EC  stated that they intended to make an intervention after the presentation by Mexico. 
2. The Chairman  proposed to break up the discussion under agenda item 1 to have a full 
discussion of the Mexican paper and listen to r eactions, and thereafter have a presentation by the 
European Communities on conceptual ideas, which c ould also be commented upon by participants.  
Before giving the floor to Mexico, the Chairman  acknowledged and thanked Mexico for the hard TN/DS/M/14 
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 work and effort that had gone into the preparati on of its document and for the active interest Mexico 
had shown in moving the process forward.  On the c ontent of the paper, the Chairman said Mexico 
had stated in its view, the "lack of focus ha[d] be en the prevalent element in our failure to reach 
consensus".  Given that participants had different  interpretations of the mandate and the purpose of 
the negotiating exercise, it was to be expected that  achieving a convergence of views was going to be 
extremely difficult.  If the current contribution by Mexico – and more genera lly other contributions 
and the discussion held today and possibly tomorrow – could help delegations  find more convergence 
or "focus" towards a successful outcome to the work , this would be a very good start to this second 
phase of Members' work. 
3. The representative of Mexico
 welcomed delegations present at the meeting that did not have 
Permanent Missions in Geneva and said Members were fortunate to have them around, as it was 
important for Geneva-based Members to exchange vi ews and ideas with them on a regular basis.  He 
said that his presentation would revolve around four themes, namely, (i) the starting point;  (ii) how Mexico approached the task;  (iii) the findings of its document;  and (iv) the way forward – reflecting 
where Members should go from here.  As a starting poi nt, he said that it should be recognized that this 
was an extremely difficult exercise.  Reform of th e DSU had been on the agenda since 1998.  There 
had been three Ministerial Conferences and seve n Chairpersons in the intervening period, and 
countless hours of discussions in the Special Sessi on of the DSU, in the General Council, and at 
various missions.  Referring to the Chairman's text, he said that Mexico did not see any agreement in 
sight because of conceptual difficulties that a numbe r of delegations had with  some elements.  There 
were technical divergences and a basic disagreemen t over proposals that should be included in the 
text.  Instead of focusing on the whole universe of problems confronting the DSU, Members were 
looking at different parts of the problem making it difficult to devise a comprehensive solution that would improve and clarify the DSU.  To present a clear er picture, Mexico had approached the task at 
hand as follows:  It had proposed to look at the DS U's functions in an unbiased manner; to cover the 
whole range of problems and to attempt to depolitici ze the analysis.  It had started with a backward 
methodology by analyzing proposals that had been tabled and establishing which problems they were 
intended to resolve.  Mexico had focused on its ow n experiences with the dispute settlement system 
since its creation eight and half years ago and used hard statistical evidence instead of anecdotes.  It 
had decided to delve into the hard facts to  make a diagnosis of the DSU's problems. 
4. While the document was quite comprehensive, it did not incorporate qualitative analysis or 
astrology for that matter.  It did not make any definitive judgments on any of the problems nor did it 
rank problems or provide conclusions .  Mexico had decided that faced with the facts, participants 
could make their own assessments and draw the re levant conclusions.  The document did not also 
analyze the effectiveness of submitt ed proposals.  That task was best left to the proponents of such 
proposals.  The document, however, provided st atistical data to objectively assess dimensional 
problems and to facilitate informed discussions about  the functioning of the DSU.  This had been a 
bottom-up approach encompassing proposal-by-propo sal.  Problems had been defined, as the 
document was not meant to be about proposals.  The classification was not meant to serve any 
purpose, other than to facilitate the understanding of the document to the reader.  It had been decided 
to organize the discussion under three headings , namely access to the system, compliance and 
procedural issues.  Each section dealt with a vari ety of issues.  The section on access to the system 
covered access of least-develope d and developing countries, internal transparency and external 
transparency.  The compliance section covered th e limitations of present remedies and enhancement 
of compliance with DSB's recommendations and rulings, while the procedural section covered 
professionalizing the panel system, time-frames, alte rnative means, control of disputes and other 
miscellaneous elements.  Given time c onsiderations, he said that he woul d not go into the details of all 
these elements, but would go over the first basket as an example. 
5. One of the main problems that had been found  was the non-usage of the system by least-
developed countries (LDCs).  This was striking beca use of the relative importance of trade to these  TN/DS/M/14 
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 countries.  The share of trade in the GDP of LD C Group and also the African Group exceeded that of 
many countries, including the United States and the European Union.  The United States' share of 
trade was around 30 per cent of GDP, the European Un ion – aside from the internal trade between the 
15 member states – was 25 per cent of GDP, Brazil was 18 per cent, India was 25 per cent and Mexico's was around 60 per cent.  The correspondi ng shares of trade to the GDP for the African 
Group and the LDC Group were 72 per cent and 63 pe r cent, respectively.  It could perhaps be 
attributed to high litigation costs.  After checking, it had been determined that a case of 240 hours of 
work at a rate of US$25 per hour – a rate charge d by the advisory centre – was US$6,000.  It would 
be up to delegations to draw the necessary conclusion s if the non-participation could be attributed to 
legal costs or there were other reasons involved.  With respect to internal transparency, while it was 
true that third parties had access to essential info rmation, their views were not necessarily taken into 
account.  Third parties had participated in at least 90 per cent of WTO cases.  The rules for joining consultations, for instance, at the pre-panel stage we re not clear.  They did not establish standards and 
deadlines for acceptance or rejection of requests and this had generated uncertainty in some of the 
493 requests registered so far.  Regarding external transparency, amicus curiae  briefs had been 
submitted in just 9 per cent of all cases – 15 times – but in 13 of these cases, Members had expressed 
concerns at DSB meetings.   
6. This document did not purport to be definitive.  It basically espoused some ideas which could 
analyzed further by Members.  The exercise of diagnosing the DSU's problems had to be completed and thoroughly analyzed by Members, who should s eek to establish the underlying reasons for these 
problems.  This task should be undertaken collect ively by Members.  Once the analysis of the 
problems had been made, Members should discuss the solutions.  It would be advisable for Members 
to discuss alternatives and employ a scientific methodology to deal with the DSU amendment 
exercise.  Members should have a clear diagnosis  of the problems and then focus on the proposals 
most likely to deal with those problems.  This a pproach was likely to deliver a meaningful result in 
the shortest possible time. 
7. The representative of Chile
 said his delegation was sure that there was valid and legitimate 
interest in giving these negotiations a different direc tion and it shared this vision.  If Members wished 
to achieve a successful result, they had to change their working methodology and he thought this was 
a good point of departure.  Mexico's presentati on should have been done a long time ago before 
starting the discussions on the basis of specific pr oposals.  Members had to identify the problems 
affecting the dispute settlement mechanism and wit hout that diagnosis, one could not truly assess the 
most suitable remedies.  The analysis that had been carried out by Ambassador of Mexico fell short in 
the sense that it did not conclude or judge whet her the remedies proposed by Members during the 
negotiations were appropriate to solve the existing problems of the mechanism.  In addition, behind 
the figures and statistics that Mexico had analyzed, th ere were political decisions that had to be made.  
There were market features and structural problems that could not always be measured with figures.  
From that perspective, the analysis of these figur es should be approached with a certain amount of 
care.  However, Mexico had given Members the b asis to carry out this analysis and to draw 
conclusions.  It was still premature to make any conc lusions, but there were certain things that could 
be highlighted in the document.  At first sight, many proposals appeared to deal with specific 
problems that some Members had encountered.  The question might be asked whether it was 
worthwhile discussing a proposal or an idea that did not appear to be a priority for Members in 
general and whose contribution to improving the f unctioning of the DSU was not very obvious.  It 
was also apparent that some of the specific problems that Members were trying to solve were internal 
problems and not problems that affected the dis pute settlement understanding.  A persuasive case 
could be made for re-evaluating the strategy a nd methodology followed thus far.  The DSU was not 
like other WTO Agreements.  Consequently, it could not be the subject of trade-offs with other areas.  
If that was the intention, it would be better to do  nothing as it could negatively affect the DSU.  There 
was the need to critically examine all the proposal s on the table to establish the contribution they 
could make to the proper functioning of the disput e settlement system.  Some of the proposals were TN/DS/M/14 
Page 4  
 
 designed to solve problems which had been encountered  in the past.  These included some elements of 
the Mexican proposal, the EC proposal on permanen t panelists and the joint Chile/US proposal on 
giving greater control over the process to the parti es.   It was perhaps in these areas where Members 
should concentrate discussions over the next few months, before venturing to submit specific 
proposals without knowing whether or not they would meet the set objectives.   
8. Basically, Members were discussing the kind of DSU that they wanted:  either a judicial 
system that was regulated in detail or a mechanis m which through a flexible process brought together 
the parties with the aim of finding a negotiated solution to a dispute including through the conclusions of the reports of panels and th e Appellate Body.  Without being quite clear about what system 
Members wanted, Members would never be in a position to decide whether these areas were 
problematic and needed resolving or even whether the solution proposed was the correct one. He said 
that Chile was prepared to engage in a serious and detailed discussion on this issue and that the 
Mexican contribution was a good starting point.  It w as important to hear the opinions, not only of the 
delegations, but of others  who had valuable opinions such as the Secretariat, the Appellate Body, the 
ex-members of the Appellate Body, academics, lawyers and other people well placed to make 
substantive contributions.  While Chile was c onscious of the opposition of certain Members to 
involving outside persons and institutions in the negotiations, it believed that the discussions would be 
enriched by their participation given the breadth of their experience and ability to approach issues 
from a dispassionate point of view.  Government representatives tend to be influenced by national 
interests on the specific issues being dealt with in the negotiations.  There were two ways of doing 
this:  either delegations met together and held br ain-storming sessions outside the organization, trying 
to enrich Members' vision with the contributions of  others, or Members could negotiate in-house, in a 
structured and well ordered and transparent way so that  all could benefit.  For example, this could be 
done through a seminar that might be organized on  the subject over the next few months to have 
valuable contributions of others on the subj ect.  The Mexican document was an interesting 
contribution that not only reflected hard work, resear ch and dedication, but a legitimate interest in 
changing the course of these negotiations.  Chile shared  the view that if Members were to achieve a 
successful result, the work methodology should change.   
9. The Chairman
 thanked Chile for its thoughtful comme nts and added comments of his own on 
current and future work.  Concerning Chile's re mark about the possible involvement of outside 
experts, besides official delegations, he said that he had raised the possibility of inviting Appellate 
Body members to share their views and experi ences, but this was strongly opposed by some 
Members.  He said that outside experts could be  involved if there was a consensus on this issue 
among Members.  As regards the comment by Mexi co that it would have been more productive if 
Members had established their objectives prior to detailed discussions of specific proposals, he said that at least four sessions were devoted to the sc ope of the negotiations but consensus could not be 
achieved.  He said that as Chairman, his role was qu ite limited.  It was up to Members to decide what 
they wanted and provide strategic guidance so that the Chairman could assist them in attaining those 
set objectives.  On Chile's last remark about the or ganization of future work, he suggested that the 
discussion take place under "Other Business".  He said that it was his hope that there would be a fruitful discussion and a common understanding reached  as to how to proceed in the future.    
10. The representative of Djibouti
 asked why a number of countries, particularly least-developed 
and African countries were not making use of the dispute settlement system;  was it because of the 
lack of interest or the lack of expertise?  If it was the latter, more had to be done to facilitate their use 
of the system.   
11. The Chairman  said that both the African Group and the LDC Group had been quite active in 
the negotiations, notwithstanding their lack of resources.  The proposals submitted by these two 
groups underscored the importance which they a ttached to the dispute settlement system.    TN/DS/M/14 
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 12. The representative of Thailand  noted that his country had been active in the negotiations 
underscoring the importance it attached to the disput e settlement system.  He recalled that Thailand 
had tabled proposals on the composition of the Appella te Body and the so-called "carousel" issue.  
Thailand had continued its effort to promote a better panel system by also proposing some 
amendments to Article 8 of the DSU and would re main engaged in the negotiations.  He said that 
Thailand shared the view that it would be mo re productive to have a thorough discussion of the 
objectives sought to be achieved in the negotiations before entering into a detailed discussion of the 
various proposals.  It would be better if these di scussions took place in an informal mode, so that 
Members would feel free to exchange views.  He  recalled that Thailand had suggested before the 
extension of the mandate of the Special Session by the General Council that the Chairman's text 
should be left intact and that efforts should be c oncentrated on proposals not reflected in the text.  
Some of these proposals had attracted broad support during the discussions, but because of the lack of 
time, they could not be pursued further.  It woul d be better if there were no new proposals, as they 
would lengthen the time-frame for the conclusion of the negotiations.  It would, however, be 
preferable if proponents of similar proposals c ould get together and agree on a common text.  He 
further said that it was imperative that the negotia tions be concluded on time, given that the time-
frame had been extended once and bearing in mind th at the DSU negotiations were outside the single 
undertaking.  Given the need or transparency a nd inclusiveness, meetings of the Special Session 
should be scheduled so as to allow the participation of small delegations.   
13. He welcomed the conceptual ideas presented by  Mexico and said that they would make a 
substantive contribution to the nego tiations.  From the point of view of a practitioner-cum-negotiator, 
all of the proposals on the table could be categoriz ed into three groups as proposed with a view to 
focusing on each group and discussing one after the other.  However, a balance of time allocation for the discussions of each of them might need to be found.  Access to the system could be resolved by 
some other means without amending the DSU.  Thailand was convinced that the lack of compliance posed a threat to the credibility of the WTO and to  the effectiveness of the DSU itself.  It required 
more than amending the DSU to overcome this pr oblem, such as good faith and political will.  The 
reputation of the WTO rested in whole or in part  on strict compliance of rulings and recommendations 
of the DSB.  On procedural issues, he noted that the improvement and clarification of the DSU could be dealt with properly by the proposals put forward thus far, including the three proposals by his own 
delegation.  He said that it was the expectation of Thailand that there would be an in-depth 
examination of the conceptual ideas put forward by delegations and that his delegation was ready to 
contribute to it with a view to making further progress in the negotiations.   
14. The representative of New Zealand
 said his delegation's overall approach to these 
negotiations had been based on tw o considerations: The first was that the DSU had worked very 
effectively and fulfilled most expectations.  The dispute settlement system was used frequently by 
developed and many developing-country Members.  A significant body of jurisprudence had been 
developed which had helped Members to fu lly understand their obligations under the WTO 
Agreements.  With the exception of few high profil e cases, there had been a very good record of 
compliance with the recommendations and rulings of the DSB.  The second consideration was that the 
DSU was not perfect and that there was room for improvements.  The introduction of binding dispute 
settlement had been a crowning achievement of the Uruguay Round, and was in many ways unique in 
international law.  So Members should not be too surprised that there were some teething problems, 
nor should these teething problems be ignored.  Th is was where the DSU negotiations played an 
important role.  It allowed Members to take stock of their experiences after the first eight years of dispute settlement under the DSU, and to make chang es to improve the system and enable it to evolve 
in light of changing needs and circumstances.  For New Zealand, the negotiations presented an opportunity to learn from mistakes and create a more robust system to deal with the problems of the 
future.  But this should be done with care.  The system was working well and what was not broken did 
not need to be fixed. TN/DS/M/14 
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 15. In this context, New Zealand viewed Mexico 's paper positively, and as it understood, the 
paper called for developing a bette r understanding of the problems that needed to be addressed.  His 
delegation agreed that this would be a useful exercise.  Developing a better understanding of the 
problems, both by way of compiling a better factual foundation for Members' work, and through sharing individual experiences and perspectives fro m working within the system, would help to 
analyze problems, and put them into the proper cont ext making it possible for appropriate solutions to 
be found.  Members had tabled many proposals in these negotiations and perhaps Mexico was right in 
saying that sufficient time had not been found to ga ther the necessary information to evaluate them.  
There was the need for realism in terms of the resu lts that could be achieved from such a process.  It 
was unlikely, for example, to bridge significant and well-known divergences of views that existed on 
certain issues.  All Members would likely have di fferent perspectives on how significant and relevant 
certain facts and experiences were.  New Zealand di d not see this as a matter of detecting only the 
"fundamental" problems, as suggested in the Mexican  paper.  What was "fundamental" seemed to a 
certain degree to be in the eye of the beholder.   When something was considered "fundamental" by 
one delegation, it often seemed to be considered c ontroversial by other delega tions.  So, the problem 
with focusing on "fundamental" problems only, was th at Members might end up with nothing at the 
end of the process.  Further, there were many issues that might not fall into the "fundamental" 
category that nevertheless deserved attention.  Me mbers should not underestimate the value of gradual 
improvements to the dispute settlement system, and this , he hoped, at a minimu m would be realistic to 
achieve.  Such problems needed to be equally we ll-diagnosed and analyzed.  New Zealand saw much 
to commend in an approach to Members' work that focused on developi ng a better understanding of 
the problems, to enable the crafting of better and mo re appropriate solutions.  For this approach to 
achieve significant results, Members should be prepared  to take a fresh look at all of these issues, and 
not simply rehearse positions that had been alread y expressed.  New Zealand was prepared to do this 
itself and finally it would see great merit in broa dening the discussions along the lines suggested by 
Chile this morning.  Members should be worki ng from the best possible information base.   
16. The representative of the European Communities
 thanked Mexico for its paper which was 
neutral and intended to address the systemic problems that had been encountered with the operation of 
the DSU.  He said that the EC was in agreement with Chile that the objective of the negotiations 
should be to solve problems so as to clarify and im prove the DSU.  The EC had always kept this 
objective in view and hoped that other Members w ould do the same.  He said that it was not his 
intention to make substantive comments on the ma ny different, useful and interesting elements 
contained in the three areas covered by the Mexican paper, but to offer some comments as Members 
proceeded in the discussion on an item-by-item basi s.  Regardless of whether one agreed with the 
conclusions reflected in the Mexican paper, the diffe rent elements espoused in it, could be useful to 
delegations and help them to achie ve a satisfactory result in May.  The EC had two comments of a 
methodological nature and a general comment on the a pproach.  First, while the EC appreciated the 
importance of quantitative data, there were limits to its utility.  To have an accurate picture, it was 
necessary to also have a qualitative assessment base d on past or present experience in the application 
of the operation of the system.  It was, for exampl e, important to know whether it was worthwhile to 
improve internal transparency or external transp arency, or whether the terms of the Appellate Body 
members should be renewable or not.  Statistics were  not going to be very helpful in finding answers 
to these questions.  When one looked at quantitative data, it was useful to consider not only the 
overall picture over the period during which the DSU ha d been applied, but also see what had been 
the general trend over the past years.  For example, when discussing one of the most important issues in the course of the negotiations, which was how to  better integrate the developing countries in the 
dispute settlement mechanism, it seemed to the EC that it was important to bear in mind the most 
recent statistics.  If one looked at the data cove ring the period from 2001 to 2003, one would realize 
the sharp increase in the number of developing count ries who became complainants in disputes.   
17. The representative of Bangladesh
 said that Mexico's paper contained an in-depth analysis of 
the problems underlying the system as a whole.  Wh ile the paper did not provide any conclusions, it  TN/DS/M/14 
 Page 7 
 
 
 would help Members move in that direction.  It  was evident from the paper that LDCs and African 
countries had never resorted to the DSU process, d espite their high reliance on trade.  This did not 
indicate that they did not face any problems in ma rketing their products.  In fact, LDCs had several 
disputes, but because of underlying problems in the system, they could not pursue them.  The proposal submitted by LDCs was intended to address this syst emic problem and it was their expectation that 
Members would favourably consider it.   
18. The representative of Costa Rica
 said that despite the signifi cant process made in the last 
phase of negotiations, Costa Rica agreed with those who felt that on many occasions Members had failed to focus the work on the most important pr oblems facing the dispute settlement system.  The 
paper submitted by Mexico contained informati on which should have been available to Members 
from the very beginning.  The information would ha ve helped Members to focus on the problems that 
had been encountered by Members or those likely to  arise in the future.  It would be helpful to 
identify the causes of such problems and determine whether the proposed solutions were apposite.  
The methodology was therefore very useful.  These were by no means the only questions raised and the document did not reflect all the relevant inform ation that should be taken into account.  This was 
why all Members should follow Mexico's example a nd provide information and evidence concerning 
the relevance and importance of the ideas proposed.  Ho wever, it was also true that some problems, 
essentially those of a political nature, could not be ad equately reflected in statistics, and hence the 
importance of complementing a quantitative analysis  with a qualitative analysis.  He concluded by 
reiterating that Costa Rica was ready to work with  other Members to find appropriate solutions to 
existing problems facing the DSU as well as problems that might arise in the future. 
19. The representative of Colombia
 said that Mexico's paper was very useful and should help 
Members to identify and prioritize the problems bedevilling the DSU.  It should assist Members in establishing how often problems arose and how to rank them.  While it would contribute to an 
objective analysis of the dispute settlement mechanis m, it should be borne in mind that statistics were 
not completely neutral and could distort the real pi cture.  When a quantitative analysis was done, one 
saw that the African countries did not use the dis pute settlement mechanism very much, which might 
be due to cost involved.  It also might be b ecause their trade was based mainly on preferences and 
they did not really need to use the system at th is point.  However, countries which were experiencing 
an exponential growth in their trade, such as Brazil,  India or some Asian countries, were starting to 
make more use of the system.  Their growth and pa rticipation in world trade was important and when 
their participation in world trade increased, so too did trade disputes start to rise rapidly, which was 
normal.  Referring to the graphs on disputes per year, she said that it might be interesting to examine 
them in terms of dollars per trading or in terms of value of trade.  It would also be interesting to 
quantify the number of disputes submitted and the trad e participation by value of trade.  The United 
Stated had initiated 75 cases, but if one assessed it in terms of units of trade, one might see that Brazil and India use the dispute settlement mechanism mo re than the United States.  It was therefore 
essential not to take these figures  in absolute te rms.  Regarding the li mited participation of 
developing countries in the dispute settlement system, she said that legal costs could not be the sole reason.  A look at the statistics would reveal that developing countries had been successful in most 
cases initiated by them.  Furthermore, developing countries register their interest in cases by 
participating as third parties.  In other words, acc ount had to be taken of the free-riding within the 
system.  Developing countries might not initiate case s also because of trade reasons.  They might not 
feel comfortable in bringing cases to the system becau se of fear that this might in some way affect 
bilateral relations.   
20. On financial costs, she said that apart from pa ying the legal fees of the attorneys, it was 
important for the Member to direct the process in light  of its trading and other interests.  A number of 
developing-country Members had yet to develop th at capacity.  The WTO dispute settlement system 
was quite unique and its relationship with the domestic processes had to be carefully examined.  The 
WTO dispute settlement system had its limitations a nd Members could not expect it to be as effective TN/DS/M/14 
Page 8  
 
 as the domestic system in each country.  She said th at Colombia shared the view of Mexico that the 
issue of compliance was the most important one to be resolved in the long term to maintain the 
viability and credibility of the system.  The Mexican  paper showed that in general the rulings had 
been complied with.  However, the reasonable period of time for the implementation of the 
recommendations and rulings of the DSB had to be extended in most cases resulting in an increase in 
the costs to the complaining Member.  Should the respondent Member fail to implement the 
recommendations and rulings of the DSB, the comp laining Member might have to retaliate.  As 
experience had shown, this remedy had serious li mitations as far as developing countries were 
concerned.  Retaliation had the effect of increasing trade barriers which eventually could harm their 
trade interests.  Developed-country Members th erefore had an incentive to ignore or delay the 
implementation of the recommendati ons and rulings of the DSB.  The situation would have been 
different, if there was a mechanism which ensured prompt and effective compliance with the DSB's 
recommendations and rulings.  This issue had to be  addressed in order to increase the confidence of 
Members in the dispute settlement system.    
21. The representative of the United States
 welcomed the conceptual discussion at the present 
meeting and the opportunity for delegations to pr ovide their latest views on the negotiations.  It 
especially welcomed the non-Geneva-based delegations a nd this chance to hear their views.  It looked 
forward to hearing from all other delegations, and indeed the United States had been benefitting from 
the discussion thus far.  The United States also wi shed to thank Mexico for the obvious thought and 
effort which went into the preparation of its discu ssion paper.  The statistical work was particularly 
interesting, and should prove useful to Members in  considering the operation of the dispute settlement 
system.  Mexico was wrong to say that this work would win it no friends; all Members could 
appreciate the effort Mexico had made to try to  present an objective look at the dispute settlement 
system.  The United States was now analyzing the pa per, and thus its remarks at the present meeting 
would be of a preliminary nature.  As an initia l matter, it wanted to add to its expression of 
appreciation for Mexico’s statistical analysis a not e of caution concerning the inherent limitations of 
any such analysis, which was by nature retrospectiv e in approach.  Such an approach might not help 
in anticipating or predicting new problems.  For example, as Mexico’s paper itself noted, data was 
often lacking on a particular question.  In addition,  even when some data was available, it might be 
partial, or might be based on imperfect sources.  Fo r example, Mexico noted that it could identify only 
two disputes in which all parties disagreed with so me finding or conclusion in a panel or Appellate 
Body report.  In many cases, however, such "mutua l disagreements" were not on record anywhere so 
only the particular parties to that dispute would be  in a position to know for which issues this might be 
true.  The United States knew from its own experience that there had been other such cases, such as 
the Certain Import Measures  dispute.   
22. The third caution that the United States wanted  to raise was that numbers did not tell the 
whole story.  A single dispute could raise a structural issue that proved to be highly disruptive to the 
system.  Here, delegations needed only refer to the record of the Bananas  dispute.  In addition, even 
when a problem arose in only a few disputes, the problem could unnecessarily tie up system resources.  For example, in Certain Import Measures,  both the United States and the European 
Communities agreed that the Panel had made an  incorrect finding on GATT 1994 Article II.  
Notwithstanding this agreement, both parties found it necessary to brief the issu e before the Appellate 
Body, and the Appellate Body had to address the issue in its report.  Similarly, in India Autos , India 
initially considered it necessary to appeal an issue th at all parties agreed had been decided incorrectly.  
The United States therefore agreed with the EC and others a bout the need to have a qualitative 
perspective as well.  Having said this, the United States believed that Mexico’s paper was a very 
useful contribution to the discussions of this body.   It could bring a new perspective to issues as 
Members discussed them.  On the part of the United States, having looked at the Mexican paper and 
at the track record of the dispute settlement system  to date, it continued to believe as a conceptual 
matter that two areas in which the dispute settleme nt system could be improved were in providing 
greater external transparency and ensuring that th e system had sufficient flexibility to help Members  TN/DS/M/14 
 Page 9 
 
 
 resolve their disputes.  The United States looked fo rward to discussing this paper and other Members’ 
thoughts and contributions at the present meeting.  Fi nally, with respect to the suggestion made by the 
Ambassador of Chile, the United States recognized th e value that could be gained from the input of 
others, including academics and practitioners.  It wa s for this reason that the United States requested 
public comment at the start of  th ese negotiations on the issues involved.  It had received many good 
comments from the public, including from academics, private practitioners, and others.  There were 
indeed benefits in consulting such groups , and the United States had already done so. 
23. The representative of Indonesia  said that it was regrettable that the deadline could not be met 
in May.  Members were now aware of the funda mental problems facing the DSU and should build on 
the good work that had been done.  Indonesia was in  agreement with Mexico that analysis should be 
based on the empirical evidence accumulated during th e first eight years of the system.  He inquired 
about the status of proposals submitted by Members, including the one recently submitted by his delegation.   
24. The representative of Japan
 said the Mexican paper provided empirical data from past 
disputes and this was particularly useful as Member s started a fresh round of discussions on the issues 
that should be addressed.  She said that while statis tics could be useful, they could be misleading in 
some instances.  The statistics on panel rulings on issues which had been overturned on appeal by the 
Appellate Body, for example, needed to be qualif ied as the outcome depended on a number of things, 
including the number of claims made at the Panel stage and the number of issues raised on appeal.  She said that Japan was in agreement with the view  that recent trends had to be taken into account, 
including on-going cases before panels and the Appellate  Body.  Some of the issues being examined 
in these cases were complex and had never been cons idered before, so they could have a profound 
effect within the system.  Japan also shared the view of the Unit ed States that the frequency of the 
occurrence of problems did not necessarily dictate the importance of a problem.  Members might well decide to resolve an issue of systemic importan ce, even though it happened infrequently.  It was 
important to also engage in a qualitative anal ysis to complement the quantitative analysis. 
25. The representative of Canada
 said that Mexico had not claimed that its statistical analysis was 
anything other than a first step and that it was not making any qualitative judgments on its own presentation.  The criticisms that had been h eard about the Mexican paper had already been 
acknowledged by Mexico, but Members should not lose si ght of the fact that this was the first time 
that there had been a statistical look at the di spute settlement mechanism by a Member which should 
be taken advantage of at this particular moment.  Members should take advantage of the opportunity 
to build upon this work rather than criticize it as not  doing what it never set out to do.  Canada shared 
the view of Japan and the United States that statis tical analysis did not always identify the importance 
of a problem – even a single occurrence of an event could have serious ramifications.  Members needed to identify these big ticket issues and resolv e them on a timely basis.  Conceptually, problems 
in the system could be divided into certain categories such as Members' individual and collective 
experience with the dispute settleme nt, matters that were technical in nature, and hiccups in the 
process that had not been considered at the time th e DSU was negotiated.  With the benefit of eight 
years of experience, Members could turn to those t echnical matters and resolve them fairly quickly.  
The issue, for example, of the lack of transparen cy in responses to requests by Members to join 
consultations could be disposed of by establishing clear disciplines. 
26. There were matters that were systemic and of fundamental importance to Members, but that 
were also capable of being resolved through a gi ve-and-take by Members.  One could also identify 
those issues, their limits and the thresholds and basic parameters of the give-and-take at the end of the 
day.  There were matters of interest to the membership that had already been addressed through ad-
hoc agreements or in some cases by the Appellate Body.  Members might agree or disagree about, for 
example, the status of amicus curiae  briefs or with the nature of  sequencing but, in fact, these had 
been dealt with in one way or another, respec tively by the Appellate Body and Members through ad- TN/DS/M/14 
Page 10  
 
 hoc arrangements.  Members had to decide whethe r they wanted multilateral solutions to these 
problems or maintain the status quo .  There were matters that were political and global in nature  and 
might be intractable.  He referred to Chile's st atement regarding the nature of the WTO dispute 
settlement system and asked whether Members wanted to maintain its quasi-judicial nature or return 
to the less adjudicative model which existed under th e GATT.  He asked whet her Members wanted to 
continue to develop jurisprudence, have a body of  laws governing relations, or go back to the world 
where reports came to the DSB to be adopted or  not as one might please.  This issue was not, it 
seemed to him, capable of resolution by the Special Session.  This was a matter that had to be dealt 
with politically and in the context of a larg er view of the nature of the WTO itself. 
27. The representative of China
 said the Mexican paper provided a good background and 
reference for further negotiations.  Compared with previous submissions, this submission highlighted 
factual evidence using statistics.  Through many ch arts and tables, Members might find where their 
priorities laid, as well as identifying realistic and practical proposals which would resolve the 
difficulties that had been encountered.  The fact that  Appellate Body did not always issue its reports 
within the normal time-frame did not necessarily  indicate that the number of Appellate Body 
members had to be increased.  An increase in th eir number might affect the collegiality among the 
members.  It was debatable whether the panel ph ase should be strengthened as against the Appellate 
Body phase.  There were obvious limitations to a st atistical approach and any such study must be 
complemented with a qualitative analysis. 
28. The representative of Israel  said that to have a complete picture, it was necessary to have both 
a quantitative and qualitative assessment.  A cursory glance at the Mexican paper would reveal that 
the DSU had worked reasonably well, although ther e was room for improvement.  The paper was 
clear in its message that Members needed to prio ritize and focus on issues which most affected the 
functioning of the dispute settlement system.  She recalled that Israel was among the group of 
countries which had at the beginning of the process calle d for the prioritization of issues.  While Israel 
was conscious of the difficulties involved in this exercise, it remained willing to continue this 
diagnostic exercise to determine the real problems that had to addressed.   
29. The representative of India  said that Mexico deserved Members' compliments for providing at 
least a basis to start the discussion on conceptual  issues, without which the discussion might have 
been less structured and shed less light on the issues.   He said that as his delegation was in the process 
of reviewing the paper, he would only be making prel iminary comments.  Some of the concepts to be 
discussed did not necessarily depend upon the presence of data.  The lack of data could sometimes 
highlight the need for action to taken to resolve an  issue.  India shared the view that a quantitative 
analysis could be misleading a nd that it was also necessary to have a qualitative analysis.  The 
mandate for these negotiations was clear in that it was aimed at improving and clarifying the DSU based on the experience of the Members thus far.  In another dimension, when Members started 
working on the scope of such improvements and clar ifications, it became quite complex, as Members 
did not seem to be of one mind on what these terms m eant.  Members had to define their expectations 
from these negotiations, whether they wanted to ov erhaul the system, which the Mexican analysis 
pointed out was working fairly well, or whether to fix only the broken aspects.  Although the Mexican 
paper was not a qualitative analysis of the disput e settlement system, it provided Members with an 
incentive to engage in analytical thinking to driv e the discussion forward.  With developing countries, 
particularly LDCs, making little use of the disput e settlement system notwithstanding their heavy 
reliance on trade, Members could analyze whether this  was due to lack of interest or the lack of 
capacity.  If it was the latter, Members could examine how their participation in the system could be improved.  Similarly, if no pane l or Appellate Body had ruled ag ainst a developing country for not 
meeting deadlines, he asked whether this was becaus e they had found it easy to meet the deadlines or 
was it because they had met the deadlines, even by  compromising on the quality of the submissions.  
As was seen from the data given in the paper, 61 per cent of the developed countries and 39 per cent 
of the developing countries had initiated disputes, wh ich seemed fair.  This figure varied depending  TN/DS/M/14 
 Page 11 
 
 
 on whether account was taken of the fact that th e 15 members of the European Communities accessed 
the system collectively.  Could the relatively low part icipation of developing countries be attributed to 
the expenses involved in accessing the system.  If the answer was in the affirmative, consideration 
should be given to the proposal by India and other countries for the award of litigation costs to developing countries.  While it might be true that  countries such as Brazil and India were making 
greater use of the system, collectively developing c ountries made less use of the system than their 
developed counterparts.  The statistics provided by Me xico in its paper and cited by Colombia had to 
be carefully examined. 
30. On the issue of amicus curiae  briefs, the Mexican paper pointed out that while it had arisen in 
about fifteen cases, Members had made comments in  no less than thirteen cases underscoring the need 
for a multilateral solution to this problem.  It was imperative that the relevant provisions of the DSU 
be strictly interpreted and clarified to reflect the intention of Members.  This was not a matter which 
should be left to panels or the Appellate Body to decide.  Sometimes a single occurrence could be 
enough to need clarification.  He said sequencing was one such issue which was important enough to 
be discussed and to be resolved, irrespective of the fact that some of the Members had been able to 
make ad-hoc  arrangements for their own cases.  The same could be said of the issue of reappointment 
of Appellate Body members.  WTO Members had a responsibility to ensure that the Appellate Body 
members, after having been appointed to this high office, were not dependent on the support of the 
membership for securing a second term.  On mutua lly agreed solutions, the Mexican paper pointed 
out that details were only available for less than 50 per cent of cases.  In the other cases, Members did 
not get the opportunity to assess the impact of such solutions on their trade.  There was therefore a 
clear case for requesting Members to provide such  details.  In relation to notices of appeal, a 
persuasive case could be made that such notices s hould contain clear and detailed information in order 
to enable appellees and third participants to fully res pond to the claims raised by the appellant.  This 
was particularly important for developing countri es given the rigid time-frames at the Appellate Body 
phase.  He once again thanked Mexico for its useful paper and said that India was ready to work with 
other Members with a view to achieving a balanced  outcome in an efficient and timely manner.   
31. The representative of Nigeria
 said that he would only be making preliminary comments on 
the paper by Mexico, as it was being reviewed by the African Group.  He said that it was true that Members gave consideration to economic and politi cal factors before deciding whether to initiate a 
dispute.  With respect to compliance with the DS B's recommendations and rulings, he said that it was 
vitally important, as Members expected a result af ter expending substantia l resources to initiate a 
dispute.  He said that it was the expectation of the African Group that the negotiations would facilitate 
the participation of African countries in the dispute settlement system.   
32. The representative of Norway
 said that his delegation was disappointed by the failure to reach 
agreement at the end of May 2003, notwithstanding th e many hours put into the exercise by Members.  
The proposals submitted by Members revealed the di fferences of views on conceptual as well as 
technical and practical issues.  After recalling that  the objective of the negotiations was to improve 
and clarify the DSU, he said that Norway was among the group of countries that had from the very beginning urged a delineation of the scope of the ne gotiations in order for substantive progress to be 
made.  The objective of the negotiations was not to redraft the whole DSU, but to address those issues 
which really affected the operation of the DSU.  In  that context, Mexico's paper was a very useful 
contribution in that it pointed out the need for greater focus on areas of the DSU, where Members 
actually experienced problems.  In particular, Me xico was to be commended for the work they had 
undertaken in providing empirical material which coul d prove useful in further work to identify the 
areas of the DSU which actually needed improvement a nd clarification.  On the issue of access to the 
system, he said that while participation in the dis pute settlement system could be costly, the cost for 
not challenging an inconsistent WTO measure could be  far higher.  It was however uncertain whether 
it was the cost, lack of human resources or other f actors that had kept some developing countries from 
using the system.  Experience showed that a numbe r of developing countries were frequent users of TN/DS/M/14 
Page 12  
 
 dispute settlement system, while others had made little or no use of the system.  Lack of resources 
should not normally stop countries from addressing problems they had experienced in their trading relations within the dispute settlement system.  He  referred to the statistics concerning the Advisory 
Centre on WTO Law in the Mexican paper and sai d that a growing number of developing countries 
were making use of their services.  With respect to transparency, he said that this was a problem in 
some cases and that Norway would like to see more internal transparency, bu t was not sure whether 
this was one of the most pressing problems for the system for the moment.  On the issue of compliance, available information clearly showed th at there was a need to ensure that there were 
enough incentives for Members to comply with the recommendations and rulings of the DSB.  This 
was of particular importance to small countries with little leverage to retaliate.  Monetary 
compensation could be a useful alternative for such countries.  It appeared that Members had resolved 
the sequencing issue through bilateral arrangements.  It would, however, be necessary to codify the 
current practice in the DSU.  The carousel issue no longer seemed to pose serious problems for 
Members.   
33. On procedural issues, the figures presented indicat ed that the time spent in establishing panels 
and electing panelists was too long and that time coul d be saved here.  On the issue of time-frames, he 
said that Members had generally been reluctant to reduce the current tim e-frames for the panel 
process.  He recalled that Norway saw the possibilit y of saving time in the establishment of panels, 
the election of panelists and perhaps also during the interim report stage.  It did not, however, see this 
as possible with regard to the time-frame for the panel and Appellate Body proceedings themselves, 
with the exception of translation of panel reports .  The figures presented by Mexico also seemed to 
indicate that the problem of timing was more crucial after the adoption of the reports than in saving a 
few days or weeks in the panel process.  Finally, the Mexican paper raised some interesting issues 
with regard to the question of whether parties shoul d have more control over the process.  The facts 
and figures seemed to suggest that the interim review  stage could probably be dispensed with, and that 
there was probably no need to allow the partial a doption of panel reports.  Such a procedure was 
likely to protract the dispute.  He concluded by sayi ng that it was in every Me mber's interests that the 
system functioned efficiently and effectively and th at Norway would continue to play a constructive 
role in the negotiations. 
34. The representative of Brazil
 recalled two defining moments in the negotiations.  The first was 
in March 2002, when the European Communiti es presented its proposal covering over 40 issues 
which put Members on a methodological path.  The second was at this current meeting with the 
introduction of the paper by Mexico which offered Members the possibility to re-direct their work.  
Both approaches had their strengths and weaknesses.  While the EC text had injected some dynamism 
into the negotiations, it encouraged Members to nego tiate on the basis of concrete texts.  The Mexican 
paper was not prescriptive.  In posing 41 questions, the paper allowed Members to reflect on the work done so far and decide how progress could be made  in light of the experiences that had been 
accumulated over the years.  It was imperative that Members identified the fundamental problems 
within the system and made an assessment as to wh ich ones could be resolved and those which were 
unattainable at least during these negotiations.  Id entifying the fundamental problems would not be 
easy as Members might have different conceptions as to what was fundamental. He said that the 
greatest problems could be found in the complia nce phase.  He wondered whether Members would 
like to focus on this area and hope to achieve  some positive results by May 2004.  Given the 
fundamental nature of the problems in this area, would Members like to wait for the Round to finish 
before re-visiting them?  It was possible that new agreements might result from the Round and some 
issues such as the scope of "peace clause" would be clarified.  If these fundamental problems were cast aside, there would hardly be any substantive issues to negotiate.  There were some procedural 
issues that could probably be resolved before May.  Instead of a formal am endment to the DSU, the 
changes could be effected through decisions of th e General Council.  Should a decision be taken to 
leave the substantive issues aside, it might well be asked if the negotiating exercise was worthwhile.  
He said that it was not the number of times that a problem occurred that sh ould lead Members to a  TN/DS/M/14 
 Page 13 
 
 
 specific conclusion. It might be that a  problem occu rred just once, but because of its ramifications for 
the dispute settlement system, Members might deci de to find a solution in anticipation that its 
recurrence might be damaging.  He urged Members to  be cautious and said that any proposed changes 
should strengthen the dispute settlement system which,  on the whole, had been working quite well.   
35. The representative of Paraguay  said that the dispute settlement system was a central element 
in providing security and predictability to the multilat eral trading system and that improving the rules 
to ensure a speedy resolution of disputes should be a central objective in the negotiations.  He said in 
that connection that Article 5 of the DSU concer ning conciliation, mediation and good offices offered 
developing countries the opportunity  to have recourse to the WTO dispute settlement system without 
having to incur the substantial costs associated wi th the more formal panel and Appellate Body 
process.  He commended Mexico for its paper and sai d that Paraguay would work closely with it and 
other Members in strengthening the dispute settlement system.   
36. The representative of Korea  said that the Mexican paper contained several useful elements 
which merited recognition and appreciation.  It to ok a systematic approach, not a country-specific 
one, to the task of improving the dispute settlement system.  The quantitative analysis should help 
Members to concentrate on the most important issues.  However, Members should be mindful of the 
inherent weaknesses of a quantitative approach.  To get a fuller picture, it was necessary to 
complement the quantitative analysis with a quali tative analysis.  Referring to the exponential 
increase in the number of disputes under the WT O system, he said that there were qualitative 
differences between the dispute settlement system  under the GATT and the WTO.  During the GATT 
era, it often took several Council meetings to establish  panels or adopt panel reports, and in a limited 
of cases, panels were not established and reports were  not adopted.  The change in the number might 
represent enhanced efficiency or productivity of the dispute settlement system under the WTO, which 
ran on the basis of a tight time-frame.  Although th e Mexican paper did not make any value judgment 
on any proposals or any specific issues, it seemed to  emphasize identifying and tackling fundamental 
problems of the current dispute settlement system.  While Korea could go along with that suggestion, 
it believed that Members needed to be pragmatic.  There was widespread acknowledgement that the 
DSU had been working quite well and that only  few changes should be made to improve its 
efficiency.  The mandate given by Ministers was ra ther modest and Members needed to be realistic 
about what could be accomplished within six months. 
37. The representative of Venezuela  commended Mexico for its paper and said that it would 
make a useful contribution to the negotiations by helping Members to concentrate on the most 
important issues.  He said that the lack of a common objective had contributed to the failure by 
Members to fulfil the mandate given by Ministers at  Doha.  He said that the mandate was intended to 
identify fundamental improvements and clarifications , rather than just problems.  Members should 
have no difficulty in identifying the fundamental  problems which exist – compliance being one of 
them.  If Members did not improve on compliance, there could be no improvement to the DSU.  There 
was no point in perfecting or improving the pr ocess or improving access, if a better record on 
compliance could not be achieved.   
38. The representative of Singapore  said that her delegation had a pproached the negotiations from 
the perspective that the dispute settlement system  had been working reasonably well and that the 
review should address improvements to the system in areas where there were real problems.  She commended Mexico for its paper and said that it woul d make a useful contribution to the negotiations.  
She said, however, that there were inherent limitatio ns in quantitative analysis such as this.  Numbers 
did not always tell the whole story and it was necess ary to look behind them.  In some cases, perhaps 
there was no such thing as an appropriate statistic for a case in question.  She said that Mexico was 
conscious of the limitations of its paper and had no t claimed that it was comprehensive. She said that 
the paper per se  would not resolve the underlying questions  of the so-called fundamental problems, 
identify the places that had to be fixed, and the form  and content of the final package that could have TN/DS/M/14 
Page 14  
 
 broad support among the membership.  Nonetheless,  Singapore believed the paper to be a good 
diagnostic tool that would facilitate a deeper analys is of the facts and problems facing Members.   
39. The representative of Argentina
 said that it was appropriate to base the working methodology 
on a diagnosis of how the DSU operated, rather than  directly on proposals.  Discussion based on this 
methodology could help de-mystify certain issues or put them in their proper context and allow proper 
conclusions to be drawn.  To that extent, the Me xican paper should make a useful contribution to the 
negotiations.  However, as pointed out by a number of  delegations, there were i nherent limitations in  
quantitative analysis such as the one conducted by Me xico.  While figures could be extremely useful, 
they did not usually tell the whole story.  Their va lue was relative and they generally only indicated 
trends over a long period of time.  It was arguable th at eight years was not long for a legal regime. It 
should be recognized that resolving issues such as lack of compliance with DSB recommendations, 
which according to Mexico's document was the most  important problem within the dispute settlement 
system, might involve carrying out structural reform of the system.  In this respect, it was doubtful whether such a task was in keeping with the manda te or whether this was the right time to embark 
upon such an exercise.  Moving beyond Mexico's contribution, he asked whether it was appropriate to 
undertake an in-depth reform of th e DSU as part of the current exer cise.  He recalled that at last 
month's informal meeting, Argentina had expressed the view that the debate between maximalist and 
minimalist visions with respect to  improvements and clarifications of the DSU should be viewed 
within the context of "what was possible", both in terms of the current chances of consensus and in 
terms of keeping in mind the May 2004 deadline.  One step should be taken at a time.  Time and practical experience would show how to deal w ith some of the fundamental issues, such as 
compliance with the DSB's recommendations and ruli ngs.  One should not lose sight of the fact that 
the DSU had been in existence for only eight year s and it was widely acknowledged to have worked 
well  to work well.  Argentina had a positive view of the way in which the DSU currently operated, 
even if there was room for occasional improvements. 
40. Argentina was inclined to think that it might be  better to undertake a structural reform of the 
DSU at the end of the current Round of negotiations , when there was a clearer idea of the dispute 
settlement system's needs.  It should not be forgotten that there would be some important 
developments in the near future, such as the e xpiration of the transition periods, or the possible 
achievement of results in the current Round of negotiations, which could engender new experiences 
and problems that would lead to further challeng es for the settlement system.  Members should ask 
themselves whether they wanted to decide now on th e type of dispute settlement system that they 
wanted and whether it was really the right time to do so.  After repeated attempts to amend the DSU, 
Members had to be realistic and should capitalize on th e work done thus far.  Argentina felt that the 
Chairman's text of 28 May 2003 covered a set of issues – many of them discussed at length – on 
which it could be possible to obtain results.  This  did not imply that Members should immediately 
work on the text.  A frank discussion at a conceptual  level of some of the afore-mentioned issues, 
including sequencing and remand authority was stil l necessary.  Moreover, such discussions might 
reveal that consensus could only be reached on some of the issues included in the Chairman's text.  It 
was clear that if there was to be any chance of su ccess, Members first had to decide what was possible 
to be achieved by May 2004.  Given the level of  discussion they required and the different positions 
and reactions they inspired, many of the issues,  even fundamental ones such as compliance, would 
probably be more appropria tely addressed later when a clearer id ea existed of the new challenges to 
be faced by the dispute settlement system. 
41. The representative of Australia
 commended Mexico for its attempt to focus on the actual 
problems faced by users of the DSU particularly useful.  Australia's position remained that the DSU had served Members well to date, and any change s to the DSU should address real and significant 
problems and inconsistencies in the current pr ocess.  Solutions to these problems should be 
approached with simplicity and practicality.  Austra lia could join the emerging consensus on the need 
to identify fundamental problems facing the DSU and then examine the range of options that might be  TN/DS/M/14 
 Page 15 
 
 
 appropriate in dealing with them.  It should, howeve r, be expected that it would not be easy to reach 
an agreement on a list of fundamental problems for wh ich solutions should be sought in this process.  
As others had noted, what was fundamental was rela tive and might vary depe nding on the priorities of 
each delegation.  Members had heard several competing interpretations of what the data – or in some 
cases lack of it – in the Mexican paper demonstrated with respect to the fundamental nature of issues 
raised in proposals to date.  He said that Austra lia would be interested in hearing the views of 
Members on this issue.  Regarding the participation of outside experts in the process, he said that 
Australia was in agreement with the views expressed  by Chile, particularly as regards inviting past 
and present members of the Appellate Body to sh are their views and experiences with Members. 
42. The representative of Hungary , referring to the Mexican paper, said that it was interesting to 
note the increased participation of the developing countries in the dispute settlement system.  The 
trend had continued during the period  not covered by the paper.  The paper also showed that there was 
a fair amount of panelists from de veloping countries, but at the same time LDCs were not represented 
as had been highlighted by the LDC Group. She said that Hungary shared the view that the 
methodology used was only one among several and that  quantitative approaches did not usually show 
all aspects of the problem.  It was necessary to l ook at the qualitative as well as in some cases the 
political aspects.  For example, concerning the i ssue of sequencing, the paper mentioned only one 
case where the proper application of sequencing ha d been disputed.  This quantitative approach 
seemed to imply that it was not necessary to tackle  this problem multilaterally.  However, Hungary 
shared the opinion of India, Brazil and others that  this issue had systemic importance and required a 
multilateral solution.  Likewise, on the issue of litigation costs, using the example of Ecuador, the 
paper seemed to imply that the issue of litigation co sts was not a very serious problem.  However, the 
proposals and the comments of developing countries dur ing the process seemed to show the contrary.  
Finally, the fact that in some cases, the parties ha d been able to reach mutu ally agreed solutions, or 
that the Appellate Body had taken a position on specific issues such as amicus curiae  submissions did 
not mean that this solution was satisfactory.  She sh ared the view of Canada that instead of a case-by-
case solution, it would be preferable to have mu ltilateral solutions which provided general guidance 
for the treatment of such issues. 
43. The representative of Chile  said that it was important for the right questions to be asked in 
order to get a sense of what had to be done to strengthen the dispute settlement system.  As an 
example, with the data showing that no least-dev eloped country had made use of the system, it might 
be asked whether any LDC had felt the need to ha ve recourse to the system, but because of some 
particular problems it could not pursue its claim under the DSU.  Given that the DSU had been in 
existence for eight years, it was necessary to continue  gathering data so that corrective actions could 
be taken in light of developments and prevailing circumstances.  It would be useful for the Secretariat 
to build on the Mexican paper and issue a report annually covering recent trends.   
44. The Chairman  said that an annual report was prepared on the activities of the DSB, which 
contained some statistical data.  He said that perhap s the Secretariat could look into how the statistics 
could be further developed to make it more informative.   
45. The representative of Hong Kong, China  said that the Mexican paper was a useful tool that 
could help Members to take a fresh look at problem s facing the DSU.  He said that Hong Kong, China 
shared the view that there were some limitations  to a quantitative approach.  Citing the sequencing 
issue, as an example, he said whereas it might appear not to be a fundamental problem, it would be 
preferable if a multilateral solution was found.  With  regards to delays in the panel process, he said 
that there were different ways to tackle such problems as had been expounded in the a number of 
proposals.  These included creating a permanent body of  panelists, creating permanent panel chairs, or 
adopting some procedural actions to deal with th e problem.  There was still a long way to go before 
Members could agree on how to resolve particular problems.  The DSU had been working reasonably TN/DS/M/14 
Page 16  
 
 well and any proposed changes should focus on the r eal problems that had been encountered and what 
was attainable within the time-frame.  
46. The representative of Mexico
 said he did not wish to react to delegations' comments because 
its paper was intended to provoke delegations to discuss the substa ntive problems facing the dispute 
settlement system.  To that extent, Mexico had ach ieved its objective of concentrating the minds of 
delegations on the fundamental problems facing the DSU and how they might be resolved.   
47. The representative of the European Communities  said that the DSU negotiations were 
different from other negotiations currently taking place under the Doha Development Agenda.  Given 
the systemic importance of the dispute settlement sy stem, it was important for the negotiations to be 
carefully handled.  The negotiators during the Uruguay Round did a fine job by creating the DSU 
which had generally worked quite well, as had been  attested to by many Members and by Professor 
Claus Ehlermann in a recent article on his experiences as an Appellate Body member.  He recalled that a number of delegations had stated in the r ecent past that in reforming the DSU, it was more 
important to get things right than to rush through the process.  The negotiations to improve the dispute 
settlement mechanism had been going on for quite some time and it was important to build on the 
good work done thus far, as directed by the General Council in its July meeting.  The Chairman's text 
could serve as a useful basis for further negotiations .  He highlighted four areas in the text of 
importance to the EC:  (i) sequencing: while this i ssue was less controversial,  the relationship between 
Articles 21 and 22 of the DSU should be definitiv ely addressed;  (ii) compensation: up until now, 
retaliation had been practically the only available option in cases of non-compliance.  There should be 
more incentives for parties to agree on a temp orary compensation deal, without, of course, 
compromising on their right to apply countermeasures;  (iii) third party rights:  internal transparency 
was essential in enhancing the credibility of the di spute settlement system.  The fundamental purpose 
of increased third-party access was to give all Members an opportunity to contribute to the 
development of WTO law;  (iv) remand authority: there appeared to be a convergence of views on the 
need to grant the Appellate Body remand authority.  In view of the growing factual complexity of 
DSU cases, this would be an appropriate and timely step. 
48. The Chairman's text was, however, not exhaustiv e.  There were other areas which could be 
usefully clarified and improved, if Members showed  the necessary flexibility.  One of such issues was 
the selection process for panelists.  The EC was a fre quent user of the dispute settlement system and 
had come to the conclusion that the current ru les on panel composition could be significantly 
improved.  This was an assessment it had made essen tially on qualitative grounds.  The EC would be 
willing to elaborate on its claim during the item-by-item discussion.  The collection of evidence, 
factual analysis, and interim decisions on procedur al issues were all technical and time-consuming, 
but were essential functions of the dispute settleme nt system and a person serving in a dedicated body 
of panelists was more likely to perform th ese functions better and quickly than an ad-hoc  panelist.  
The EC continued to be attached to the idea of a body of permanent panelists.  Nonetheless, it also 
recognized that several WTO Members were not ready to deprive themselves of the flexibility 
provided by the present system, which they perceived – rightly or wrongly – as giving them more control over the selection process.  However, it should  also be possible for Me mbers, that so wished, 
to have panels composed from a roster of highly qua lified persons.  He said that the EC was ready to 
work with all Members on modalities for panel comp osition that combined flexibility in the selection 
process with the establishment of a roster of high ly qualified and dedicated panelists.  Regarding 
compliance, he asked whether the current provisions we re adequate.  There was the need to dispel the 
myth that more severe remedies would necessarily le ad to better and earlier compliance.  Indeed, the 
reluctance by WTO Members to actually apply retalia tion suggested that better records of compliance 
were unlikely to be achieved through a merely theo retical increase of retaliation rights in the DSU 
text.  By this, however, he did not mean that  Members should not have a serious debate on 
compliance.  The EC would participate constructiv ely in the discussion on this complex and important 
area.  It was important for Members to always keep  in mind the lack of balance between adjudicatory  TN/DS/M/14 
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 processes and political decision-making processes in the WTO.  Members should be careful not to 
expect to get from the adjudicatory system what should be demanded in the negotiating arena.  Transparency could increase public confidence in an  adjudicatory system and make it easier to 
introduce significant changes.  He invited Member s to put aside their prejudices and consider the 
possible benefits from opening up the dispute settleme nt system to the general public in cases where 
the parties to the dispute did not have any objectio n.  On developing countries, he said that it was 
clear that measures should be adopted to enhance thei r participation in the dispute settlement system.  
Members needed to put aside their preconceptions and address the real difficulties faced by developing countries.  It was the belief of the EC that a major effort should be made to train lawyers from developing countries in WTO law taking into c onsideration the differences that existed among 
developing countries.   
49. The Chairman
 said that this discussion had shown that Members were determined to reach a 
successful outcome by the target date of May 20 04.  Despite the various views on whether there 
should be any further work on the DSU, it was his sen se that the majority of delegations at this stage 
did not want to contemplate any work programme be yond this date.  On the contrary, his feeling was 
that after several unsuccessful attempts, both before and after Doha, there was a broadly felt wish to 
try to have some results from this exercise.  There was a challenge of ambition versus realities.  There 
was understandably an interest to try to correct th e problems which many delegations felt existed in 
the operation of the DSU based on the experiences of th e past eight years.  On the other hand, there 
was the question of what was doable in the relativel y short period until the mandate's deadline.  The 
Chairman recalled that he had attempted to restar t the work as early as possible and was glad that 
Members had been able to make a meaningful star t at the present meeting, but only six months 
remained to complete the work.  In order to reach  an agreement on improvements and clarifications to 
the DSU, Members needed to resume work from now  on at a sustained pace.  The discussion on the 
conceptual issues might help fo cus the issue-by-issue discussion a nd energize the process with some 
new perspectives on all issues under negotiations.  He  noted that comments had been made on how to 
deepen the diagnosis, including soliciting the views of past and current members of the Appellate 
Body. 
50. He said that the purpose of the issue-by-issue discussion was to take stock of where Members 
stood in respect of the various issues that have arisen  through the work done thus far.  This exercise 
was complementary to the discussion which had just  taken place and should be a logical continuation 
to it, as there some overlaps between these two agenda items.  He said that he had received some 
comments and useful proposals from Members, including preparation of a list of questions which 
Members could focus on in their work .  He said that with the assistance of the Secretariat, the first list 
of questions had been circulated covering the pre-panel phase.  The list was not meant to be 
exhaustive, nor intended to pre-judge the positi on of any delegation on any of the issues under 
discussion.  He said that Members could raise any i ssues of interest to them, but should be conscious 
of the lengthy and detailed discussions on the va rious issues contained in the proposals and the 
reactions proponents had heard from othe r delegations to some of their proposals.  He referred to the 
Mexican proposal and said that notwithstanding the i nherent limitations of quantitative analysis, it 
should make a useful contribution to the negotiati ons.  It was apparent from the discussions that 
Members had shown their readiness to supplem ent the quantitative analysis with qualitative 
assessments and also take into account political considerations. 
 
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