RESTRICTED  
  
WT/DSB/M/433  
 
29 October 2019  
(19-7244) Page: 1/38 
Dispute Settlement Body  
15 August 2019    
 
MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD   
ON 15 AUGUST 2019  
Chairman: H.E. Dr David Walker (New Zealand)  
Prior to the adoption of the Agenda , the item concerning the adoption of the Panel Report in the 
dispute : "United  States - Certain Measures Relating to the Renewable Energy Sector" (DS510) was 
removed from the proposed Agenda following the decision of the United States to appeal the 
Panel  Report.  
Table of Contents  
1   SURVEILLANCE OF IMPLEMENTATION OF RE COMMENDATIONS ADOPTE D  
BY THE  DSB ................................ ................................ ................................ ......................  2 
A. United  States – Anti-dumping measures on certain hot rolled steel products from Japan:  
Status report by the United  States  ................................ ................................ ........................  3 
B. United States – Section  110(5) of the US Copyright Act: Status report by the United  States  ..... 3 
C. European  Communities – Measures affec ting the approval and marketing of biotech products: 
Status report by the European  Union  ................................ ................................ .....................  4 
D. United  States – Anti-dumping and counte rvailing measures on large residential washers from 
Korea: Status report by the United  States  ................................ ................................ ..............  5 
E. United  States – Certain methodologies and their application to anti -dumping proceedings 
involving China: Status report by the United  States  ................................ ................................ . 6 
F. Indonesia – Importation of horticultural products, animals and animal products: Status report  
by Indonesia  ................................ ................................ ................................ ......................  7 
2   UNITED  STATES – CONTINUED DUMP ING AND SUBSIDY OFFS ET ACT OF  2000: 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE DSB  ..........................  8 
A. Statement by the European  Union  ................................ ................................ .....................  8 
3   EUROPEAN COMMUNI TIES AND CERTAIN MEM BER STATES – MEASURE S AFFECTING 
TRADE IN LARGE CIVIL  AIRCRAFT: IMPLEMENT ATION OF THE RECOMMENDATIONS 
ADOPTED BY THE DSB  ................................ ................................ ................................ ...... 9 
A. Statement by the United  States  ................................ ................................ ........................  9 
4   UNITED STATES – SAFEGUARD MEASURE ON IM PORTS OF CRYSTALLINE   
SILICON PHOTOVOLTAIC  PRODUCTS  ................................ ................................ .............  10 
A. Request for the establishment of a panel by China  ................................ ............................. 10 
5   INDIA – MEASURES  CONCERNING SUGAR AN D SUGARCANE  ................................ ..... 11 
A. Request for the establishment of a panel by Brazil  ................................ ............................. 11 
6   INDIA – MEASURES  CONCERNING SUGAR AN D SUGARCANE  ................................ ..... 12 
A. Request for the  establishment of a panel by Australia  ................................ ......................... 12 WT/DSB/M/433  
 
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  7   INDIA – MEASURES  CONCERNING SUGAR AN D SUGARCANE  ................................ ..... 13 
A. Request for the establishment of a panel by Guatemala  ................................ ..................... 13 
8   TURKEY – CERTAIN  MEASURES CONCERNING  THE PRODUCTION, IMP ORTATION  
AND MARKETING OF PHA RMACEUTICAL PRODUCTS  ................................ ......................  14 
A. Request for the establishment of a panel by the European Union ................................ .......... 14 
9   UNITED STATES – COUNTERVAILING DUTY MEASURES ON CERTAIN PRODUCTS  
FROM CHINA: RECOURSE  TO ARTICLE 21.5 OF THE DSU BY CHINA  ................................  15 
A. Report of the Appellate Body and Report of the Panel  ................................ ......................... 15 
10   APPELLATE BODY APPOINTMENTS: PROPOS AL BY ANGOLA; ARGENTINA;  
AUSTRALIA; BENIN; PL URINATIONAL STATE OF  BOLIVIA; BOTSWANA; BRAZIL;  
BURKINA FASO; BURUND I; CABO VERDE; CAMER OON; CANADA; CENTRAL  AFRICAN 
REPUBLIC; CHAD; CHIL E; CHINA; COLOMBIA; CONGO; COSTA RICA; C ÔTE D'IVOIRE; 
CUBA; DEMOCRATIC REP UBLIC OF CONGO; DJIBOUT I; DOMINICAN REPUBLI C;  
ECUADOR; EGYPT; EL S ALVADOR; ESWATINI; T HE EUROPEAN UNION; G ABON; THE 
GAMBIA; GHANA; GUATE MALA; GUINEA; GUINEA -BISSAU; HONDURAS; H ONG KONG, 
CHINA; ICELAND; INDI A; INDONESIA; ISRAEL ; KAZAKHSTAN; KENYA;  REPUBLIC OF  
KOREA; LESOTHO; LIEC HTENSTEIN; MADAGASCA R; MALAWI; MALI; MAU RITANIA; 
MAURITIUS; MEXICO; M OROCCO; MOZAMBIQUE; NAMIBIA; NEW ZEALAND ;  
NICARAGUA; NIGER; NI GERIA; NORTH MACEDON IA; NORWAY; PAKISTAN ; PANAMA; 
PARAGUAY; PERU; QATA R; RUSSIAN FEDERATIO N; RWANDA; SE NEGAL; SEYCHELLES; 
SIERRA LEONE; SINGAP ORE; SOUTH AFRICA; S WITZERLAND; THE SEPA RATE CUSTOMS 
TERRITORY OF TAIWAN,  PENGHU, KINMEN AND MATSU; TANZANIA; TOG O; TUNISIA; 
TURKEY; UGANDA; UKRA INE; URUGUAY; THE BO LIVARIAN REPUBLIC OF  VENEZUELA; 
VIET NAM; ZAMBIA AND  ZIMBABWE  ................................ ................................ ..............  32 
11   STATEMENT  BY THE EUROPEAN UNI ON REGARDING CANADA/EU INTERIM AP PEAL 
ARBITRATION ARRANGEM ENT PURSUANT TO ARTICLE 25 OF THE DS U .........................  38 
1   SURVEILLANCE OF IMPL EMENTATION OF RECOMM ENDATIONS ADOPTED BY  THE DSB 
A. United  States – Anti-dumping measures on certain hot -rolled stee l products from Japan: Status 
report by the United  States (WT/DS184/15/Add .198)  
B. United  States – Section  110(5) of the US Copyright Act: Status report by the United  States  
(WT/DS160/24/ Add.173)  
C. European  Communities – Measures affecting the approval and marketing of biotech products : 
Status report by the European  Union (WT/DS291/37/ Add.136)  
D. United  States – Anti-dumping and countervailing measures on large residential washers from  
Korea : Status report by the United  States (WT/DS464/17/ Add.20) 
E. United  States – Certain methodologies and their application to anti -dumping proceedings 
involving China : Status report by the United  States (WT/DS471/17/ Add.12) 
F. Indonesia – Importation of horticultural products, animals and animal products : Status  report by 
Indonesia (WT/DS477/21/ Add.7 – WT/DS478/22/ Add.7) 
1.1.  The Chairman  noted that there were six sub -items under this Agenda item concerning status 
reports submitted by delegations pursuant to Article  21.6 of the DSU. He recalled that Article 21.6 
required that: "[u]nless 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 and shall re main on the DSB's 
Agenda until the issue is resolved". Under this Agenda item, he invited delegations to provide 
up-to-date information about their compliance efforts. He also reminded delegations that, as 
provided for in Rule 27 of the Rules of Procedure for DSB meetings: "[r]epresentatives should make 
every effort to avoid the repetition of a full debate at each meeting on any issue that has already WT/DSB/M/433  
 
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  been fully debated in the past and on which there appears to have been no change in Members' 
positions already on record". He then turned to the first status report under this Agenda item.   
A. United  States – Anti-dumping meas ures on certain hot rolled steel products from Japan: 
Status report by the United  States (WT/DS184/15/Add.198)  
1.2.  The Chairman  drew attention to document WT/DS184/15/Add.198, which contain ed the status 
report by the United  States on progress in the implementa tion of the DSB 's recommendations in the 
case concerning US  anti-dumping measures on certain hot -rolled steel products from Japan.  
1.3.  The representative of the United  States  said that the United States had provided a status report 
in this dispute three weeks ago on 22 July 2019 , and again  two weeks ago  on 2 August 2019, in 
accordance with Article 21.6 of the DSU. The United States had addressed the DSB's 
recommendations and rulings with respect to the calculation of anti -dumping margins in the 
hot-rolled steel anti -dumping duty investigation at issue. With respect to the DSB's 
recommendations and rulings that had yet to be addressed, the US Administration would work with 
the US Congress with respect to appropriate statutory measures that would resol ve this matter . 
1.4.  The representative of  Japan  said that his country wished to thank the United States for its most 
recent status  report and its statement made at the present meeting . Japan , once again , called on 
the United States to fully implement the DSB 's recommendations and rulings so as to resolve this 
matter.  
1.5.  The DSB took note of the statements and agree d to revert to this matter at its next regular 
meeting.  
B. United  States – Section  110(5) of the US Copyright Act: Status report by the 
United  States (WT/DS160/24/Add.173)  
1.6.  The Chairman  drew attention to document WT/DS160/24/Add.173, which contain ed the status 
report by the United  States on progress in the implementation of the DSB 's recommendations in the 
case concerning Section  110(5) of the US Copyright Act.  
1.7.  The representative of the United  States  said that the United States had provided a status report 
in this dispute three weeks ago on 22 July 2019 , and again  two weeks ago  on 2 August 2019, in 
accordance with Article 21.6 of the DSU. The US Administration would  continue to confer with the 
European Union, and to work closely with the US Congress, in order to reach a mutually satisfactory 
resolution of this matter . 
1.8.  The representative of  the European Union  said that his delegation wished to  thank the 
United  States for its status report and its statement  made  at the present meeting  and wished  to 
refer to its previous statements  made on this matter.  The European Union wished  to resolve this 
case as soon as possible.  
1.9.  The representative of  China  said that, nearly two decades after the DSB had adopted the Panel 
Report in DS160, the United  States still fell short of full compliance as required by the DSU. Since 
none of its 174 status reports provided thus far indicate d any progress  on implementation , this 
dispute remain ed unresolved. As a result, the United States had become the only WTO Member who 
failed to implement the adopted recommendations and rulings of the DSB under the 
TRIPS  Agreement. As long as Section  110(5) of the US Copyright Act , which had been  found to be 
WTO-inconsistent , remained  in force , the United  States would continue to fail to accord th e minimum 
standard of protection as required by the TRIPS Agreement. Article  21.1 of the DSU state d that: 
"[p]rompt compliance with recommendations or rulings of the DSB is essential in order to ensure 
effective resolution of disputes to the benefit of all Members ". China, therefore, urged the 
United  States to faithfully honour its commitments under the DSU and the TRIPS Agreement by 
implementing the DSB's recommendations and rulings in this dispute without further delay.  
1.10.   The DSB took note of the stateme nts and agree d to revert to this matter at its next regular 
meeting.  WT/DSB/M/433  
 
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  C. European  Communities – Measures affecting the approval and marketing of biotech 
products: Status report by the European  Union (WT/DS291/37/Add.136)  
1.11.   The Chairman  drew attention to docum ent WT/DS291/37/Add.136, which contained the 
status report by the European  Union on progress in the implementation of the DSB 's 
recommendations in the case concerning measures affecting the approval and marketing of biotech 
products.  
1.12.   The representative of the European  Union  said that the EU continue d to progress with the 
authori zations where the European Food Safety Authority ha d finalized its scientific opinion and 
concluded that there were no safety concerns. As explained by the EU and confirmed by the US 
delegation during the EU -US biannual consultations held on 12 June 2019, efforts to reduce delays 
in authori zation procedures were constantly maintained at a high level. This ha d resulted in a clear 
improvement of the situation. It was also important to  note that the slow reaction of applicants in 
certain applications also increase d the overall average time needed for risk assessment. On 
26 July 2019, the European Commission authori zed ten genetically modified organisms (GMOs): 
seven for food and feed us e,1 two renewal authori zations2 also for food and feed use and one 
carnation as ornamental cut flower. The authori zations were valid for ten years. This brought  the 
total number of GMOs authori zed in the EU to 145: 96 GM maize, 13 GM cotton, 20 GM soybean,  
9 GM oilseed rape, 1 GM sugar beet and 6 GM carnations. No meetings of the member States 
Committee voting on proposals or of the Appeal Committee were organi zed since the most recent  
regular meeting of the DSB. At past DSB meetings, the United States had referred to what was 
known as the EU "opt-out Directive ". The EU wished to reiterate that the DSB 's recommendations 
and rulings d id not cover that "opt-out Directive ". At past DSB meetings, the United States had also 
made ce rtain references to the statement of the EU Group of Scientific Advisors. The EU wished to 
clarify that this statement focuse d on the futur e challenges for products obtained by new 
mutagenesis techniques. The statement did not state  expressly  nor imply tha t Directive 2001/18 
would not be "fit for purpose " as regard ed "conventional GMOs ". The EU act ed in line with its WTO 
obligations. Finally,  the EU wished  to recall that the EU approval system was not covered by the 
DSB's recommendations and rulings.  
1.13.   The representative of  the United  States  thank ed the European Union (EU) for its status report 
and its statement made at the present meeting . The United  States remain ed concerned with the 
EU's approval of biotech products. While the United States  appreciate d and welcome d the European 
Commission 's approval of several soy and corn products in July 2019, the United States  continue d 
to see delays that affect ed dozens of applications that had been awaiting approval for months or 
years, or that had already received approval. Even when the EU finally approve d a biotech product, 
EU member States continue d to impose bans on the supposedly approved product. The amendment 
of EU Directive 2001/18, th rough EU Directive 2015/413, permit ted EU member States to, in effect, 
restrict or prohibit cultivation of genetically -modified organisms (GMOs), even where the European 
Food Safety Authority (EFSA) ha d concluded that the product was safe. This legislation  permit ted 
EU member States to restrict for non -scientific reasons certain uses of EU -authorized biotech 
products in their territories by demanding that EU cultivation authorizations be adjusted to exclude 
portions of an EU member State 's territory from cu ltivation. At least 17 EU member States, as well 
as certain regions within EU member States, ha d submitted such requests with respect to MON -810 
maize. The United States  again emphasize d the public statement issued by the EU 's Group of Chief 
Scientific Adv isors on 13 November 2018, in response to the 25 July 2018, European Court of Justice 
(ECJ) ruling that addresse d the forms of mutagenesis that qualif ied for the exemption contained in 
EU Directive 2001/18/EC. The Directive had been  a central issue in disp ute in these WTO 
proceedings, and concern ed the deliberate release into the environment of genetically modified 
organisms, or GMOs .  
1.14.   The United States said that c ontrary to the EU 's statement at prior DSB meetings, this ECJ 
ruling relate d to previously aut horized GMOs. The EU Group of Chief Scientific Advisors ' statement 
spoke to the lack of scientific support for the regulatory framework under EU Directive 2001/18. The 
message provided in that statement was clear: "in view of the Court 's ruling, it becomes  evident 
that new scientific knowledge and recent technical developments have made the GMO Directive no 
longer fit for purpose ". The statement further advise d that current scientific knowledge call ed into 
                                                
1 Cotton GHB614xLLCotton25xMON1598, maize 5307, maize MON 87403, maize 4114, 
maize  MON87411, maize Bt11xMIR162x1507xGA21, soybean MON87751.  
2 Oilseed rape Ms8xRf3 and maize 1507xNK603.  WT/DSB/M/433  
 
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  question the definition of "GMOs " under the Directi ve and note d that mutagenesis, as well as 
transgenesis, occur red naturally. The EU should take this guidance into account in its reconsideration 
of the GMO Directive, in light of the evident advancements in scientific knowledge and technology. 
The United S tates urge d the EU to ensure that all of its measures affecting the approval of biotech 
products, including measures adopted by individual EU member States, were based on scientific 
principles, and that decisions were taken without undue delay . 
1.15.   The representative of  the European Union  said that the WTO Agreements d id not require full 
international harmoni zation and le ft some regulatory space or autonomy to individual WTO Members. 
The European Union ha d different regula tory approaches to non -GMOs and to GMOs but, in all cases, 
such regulations d id not discriminate between imported and domestic like products. Contrary to 
what the United States ha d just asserted, n o EU member State ha d imposed any "ban". Under the 
terms of the  relevant EU  Directive, an EU member State c ould adopt measures restricting or 
prohibiting cultivation only when such measures were in line with EU law and were reasoned, 
proportional, non -discriminatory and based on compelling grounds.  The fre e movement of seeds 
was embedded in Article 22 of Directive 2001/18/EC: "[m]ember States may not prohibit, restrict 
or impede the placing on the market of GMOs, as or in products, which comply with the requirements 
of this Directive ". The EU  also note d that according to the provisions of the opt -out Directive 
(Article  26b, point 8) the measures adopted under the Directive "shall not affect the free circulation 
of authori zed GMOs " in the EU.  The United States had made a brief reference to product MON -810 
as an example of a product subject to a ban.  The EU wished  to inform delegations  that currently , 
the EU Common Catalogue of varieties of agricultural species include d 150 varieties of maize 
MON-810 which were allowed to be marketed in the EU. Up to now , the European Commission ha d 
never received any complaints from seed operators or other stakeholders concerning the restriction 
of marketing of MON -810 seeds in the EU. This confirm ed the smooth functioning of the internal 
market of MON -810 seeds.  The EU  invite d the U nited States to provide any evidence they might 
have at their disposal substantiating the disruption of the free movement of MON -810 seeds in the 
EU. In relation to the statement of the Group of Chief Scientific Advisors, the EU wished  to rec all 
that the Group of Chief Scientific Advisors was an independent group of scientific experts providing 
scientific advice to the European Commission. There had been many reactions to the judgement of 
the Court of Justice of the European Union, bringing fo rward a wide range of different views. The 
statement to which the United States had referred fed into on -going discussions on new mutagenesis 
techniques with all stakeholders. Some stakeholders agree d with that statement. However, many 
others consider ed that the current legislation was adequate to address the risks from new 
biotechnology developments. The European Commission , in particular , had a strong interest in this 
debate, which should go beyond the regulatory status of new technologies and focus on the way 
new products could help address societal challenges, such as climate change or reduction of use of 
pesticides, without negative consequ ences on health and environment protection.  
1.16.   The DSB took note of the statements and agree d to revert to this matter at its next regular 
meeting.  
D. United  States – Anti-dumping and countervailing measures on large residential 
washers from Korea: Status rep ort by the United  States (WT/DS464/17/Add.20)  
1.17.   The Chairman  drew attention to document WT/DS464/17/Add.20, which contain ed the status 
report by the United  States on progress in the implementation of the DSB 's recommendations in the 
case concerning anti -dumping and countervailing measures on large residential washers from Korea.  
1.18.   The representative of the United  States  said that the United States had provided a status 
report in this dispute three weeks ago on 22 July 2019  and again two weeks ago  on 2 Augus t 2019 , 
in accordance with Article 21.6 of the DSU. On 6 May 2019, the US Department of Commerce had 
published a notice in the US Federal Register announcing the revocation of the anti -dumping and 
countervailing duty orders on imports of large residential washers from Korea (84 Fed. Reg. 19,763 
(6 May 2019)). With this action, the United  States ha d completed implementation of the DSB 's 
recommendations concerning those anti -dumping and countervailing duty orders. The United  States 
continue d to consult with i nterested parties on options to address the DSB's recommendations 
relating to other measures challenged in this dispute .  
1.19.   The representative of  Korea  said that his country  wished to thank the United States for its 
status report. Korea was currently evaluating if the revocation, in its effect, would  achieve full 
compliance with the DSB's rulings and recommendations in terms of the "as applied " measures at WT/DSB/M/433  
 
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  issue. At the same time, Korea  again urge d the United  States to take prompt and appropriate steps 
to implement the DSB 's recommendations for the "as such " measure in this dispute.  
1.20.   The representative of  China  said that t he Panel and the Appellate Body in this dispute  had 
made a number of important clarifications on relevant provisions of the Anti -Dumping Agreement, 
which include d that: (i) both quantitative and qualitative assessments were required to establish a 
pattern of export prices which differ ed significantly; ( ii) an investigating authority had to  explain 
why both the W -W and the T -T methodologies could  take into account appropriately the identified 
differences in export prices before resorting to the W -T methodolo gy; and ( iii) the use by the 
United  States of differential pricing methodology and zeroing when applying the W -T methodology 
were "as such " WTO-inconsistent. Thus far, the United States ha d yet to fully address the DSB 's 
recommendations and rulings in this dispute, especially regarding  its "as such " WTO-inconsistent  
measures. Such behaviour  left other Members with no other choice , but to repeatedly raise these 
same issues before panels and the Appellate Body. In addition to resources being  wasted in future 
dispute settlement proceedings, the effectiveness of the dispute settlement mechanism would also  
be compromised. Article  21.1 of the DSU explicitly set out the implementation obligations , which 
should be observed by all Members without any derogation. The United States was not entitled to 
any exception to these rules agreed by Members back in 1995. China,  therefore , urged the 
United  States to faithfully implement the DSB's recommendations and rulings in all of its defensive 
cases , including this one.  
1.21.   The representative of Canada  said that the United  States continue d to fail to comply with the 
DSB's ruling, arising out of the Appellate Body report in this dispute , that the "differential pricing 
methodology " was "as such"  WTO-inconsistent. The United States  had also ignored the DSB 's 
recommendation that the United States bring itself into compliance with its obligations. Instead, the 
United States continue d to apply the "as su ch" inconsistent differential pricing methodology  in 
investigations with respect to foreign companies and continue d to collect cash deposits from foreign 
exporters based on its inconsistent methodology. As a result, Canada had been  forced to challenge 
the differential pricing methodology  measure in the "US - Differential Pricing Methodology " dispute 
(DS534) and Viet Nam was currently doing the same in the "US - Fish Fillets " dispute (DS536) . 
Before these Panels, the United States had simply re -litigated the dispute concerning the 
WTO-consistency of the differential pricing methodology  and ha d asked the Panels to ignore the 
Appellate Body 's findings. Canada remain ed deeply concerned with the failure  of the United States  
to comply with the DSB 's recommendations and rulings in this dispute. This failure seriously 
undermine d the security and stability of the multilateral trading system.  
1.22.   The representative of the United  States  recalled that Canada ha d commenced a dispute 
settlement proceeding against  the United States concerning the use of a differential pricing analysis 
and zeroing. Canada had lost that dispute before the Panel. The United  States was willing, of course, 
to discuss Canada 's concerns bilaterally . 
1.23.   The DSB took note of the statements and agree d to revert to this matter at its next regular 
meeting.  
E. United  States – Certain methodologies and their application to anti -dumping 
proceedings involving China: Status report by the United  States (WT/DS471/17/Add.12)  
1.24.   The Chairman  drew attention to document WT/DS471/17/Add.12, which contain ed the status 
report by the United  States on progress in the implementation of the DSB 's recommendations in the 
case concerning certain methodologies and their application to anti -dumping pro ceedings involving 
China.  
1.25.   The representative of the United  States  said that the United  States had provided a status 
report in this dispute three weeks ago on 22 July 2019  and again two weeks ago  on 2 August 2019 , 
in accordance with Article 21.6 of the DSU. As explained in that report, the United  States continue d 
to consult with interested parties on options to address the  DSB's  recommendations . 
1.26.   The representative of  China  said that on 22 May 2017, the DSB had adopted the Appellate 
Body report and the modified Panel report in this dispute , which had found that certain measures 
taken by the United  States were inconsistent with requirements of the Anti -Dumping Agreement, 
including  that: (i) the use of zeroing under the W -T methodology were "as such " inconsistent with WT/DSB/M/433  
 
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  Article 2.4.2; ( ii) the so -called "single rate presumption " "as such " violate d Article s 6.10 and 9.2 ; 
and (iii) the "adverse facts available " was a norm of general and prospectiv e application , which could 
be subject to future "as such " challenges. China was deeply disappointed that, more than two years 
after the DSB had adopted recommendations and rulings  in this dispute , and nearly  12 months after 
the expiry of the reasonable per iod of time, the United  States continue d to prolong  implementation 
in this dispute. When China had sought the authorization to suspen d in accordance with the DSU, 
rather than bringing its measures into  conformity, the United  States had chose n to further delay the 
resolution of this dispute by referring the matter to arbitration  pursuant to  Article 22.6  of the DSU . 
As such, its WTO -inconsistent measures continue d to infringe China 's legitimate economic i nterests, 
distort ed relevant international markets and undermine d the rules -based dispute settlement system. 
China  noted, however, that when the United  States was the complainant  in a dispute, it never shie d 
away from aggressively pursuing prompt implementation. This behaviour  reflect ed a clear double 
standard employed by the United States,  which breache d the good faith obligation in resolving 
dispute s under the DSU. Article 21.1 of the DSU provide d that: "[p]rompt compliance with 
recommendations or rulings of the DSB is essential in order to ensure effective resolution of disputes 
to the benefit of all Members ". China,  therefore , urged the United  States to take concrete actions to 
fulfil its WTO obligations a nd promptly bring its measures in conformity with the DSB 's 
recommendations and rulings in this dispute.  
1.27.   The DSB took note of the statements and agree d to revert to this matter at its next regular 
meeting.  
F. Indonesia – Importation of horticultural products, animals and animal products: Status 
report by Indonesia (WT/DS477/21/Add.7 – WT/DS478/22/Add.7)  
1.28.   The Chairman  drew attention to document WT/DS477/21 /Add.7 – WT/DS478/22/Add.7, 
which contain ed the status report by Indonesia on progress in the implementation of the DSB 's 
recommendations in the case concerning importation of horticultural products, animals and animal 
products.  
1.29.   The representative of Indon esia said that his country  submit ted this report pursuant to 
Article  21.6 of the DSU. As reported at the most recent DSB meeting, Indonesia ha d made further 
amendment s to existing regulations by issuing Minister of Trade Regulation No. 29/2019 concerning 
Provisions for Import and Export of Animals and Animal Products and Minister of Trade Regulation 
No. 44/2019 concerning the Import Provision on Horticultural Products. In the meantime, the draft 
Minister of Agriculture regulations were still under going the  enactment process. With regard to 
Measure  18, the draft amendment along with its academic drafts would  be discussed in a meeting 
at the Ministerial level. Indonesia would  continue to  update and engage with New Zealand and the 
United States regarding matte rs related to the recommendation and rulings of the DSB.  
1.30.   The representative of  New Zealand  said that New Zealand wished  to thank Indonesia for its 
statement and its status report although his country  was disappointed that the status report did not 
seem to convey any progress since the July 2019 status report. New Zealand acknowledge d the 
steps that Indonesia had taken to date to bring its regulations into compliance with the DSB's 
recommendations and rulin gs in this dispute , and Indonesia 's commitment to comply fully with the se 
recommendations and rulings . New Zealand note d that both of the compliance deadlines that had 
been agreed between the parties had since expired. New Zealand was seriously disappointe d that 
full compliance ha d still not been reached in respect of a number of measures addressed in th is 
dispute . New Zealand was particularly concerned about : (i) the failure to meet the 22 June 2019 
deadline for the removal of Measure  18; (ii) the continue d enforcement by Indonesia of limited 
application windows and validity periods;  (iii) harvest period import bans; (iv) import reali zation 
requirements; and (v) restrictions placed on import volumes based on storage capacity. These 
issues, and others, contin ued to adversely impact New Zealand exporters. The New  Zealand 
Embassy in Jakarta , therefore , continue d to follow developments closely and would also appreciate 
direct updates on progress, including concrete timelines for further regulatory and legislative 
changes. New  Zealand strongly encourage d Indonesia to take appropriate steps, swiftly, to achieve 
long-term, commercially meaningful, compliance with the DSB's recommendations and rulings  in 
this dispute .  WT/DSB/M/433  
 
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  1.31.   The representative of  the United  States  said that Indonesia continue d to fail to bring its 
measures into compliance with WTO rules. The United  States an d New Zealand agree d that 
significant concerns remain ed with the measures at issue, including the continued imposition of: 
harvest period restrictions, import realization requirements, warehouse capacity requirements, 
limited application windows, limited v alidity periods, and fixed licensed terms. The United  States 
remain ed willing to work with Indonesia to fully and meaningfully resolve this dispute. The United 
States was still waiting to hear from Indonesia the concrete actions it would  take to bring its 
measures into full compliance. The scope of Indonesia 's "further amendment " to Measures 1 -17 
remain ed unclear, and it was not clear that Indonesia intend ed to make any changes with regard to 
Measure 18. The United  States look ed forward to receiving further detail from Indonesia regarding 
the planned changes to its regulations and laws . 
1.32.   The DSB took note of the statements and agree d to revert to this matter at its next regular 
meeting.  
2  UNITED  STATES – CONT INUED DUMPING AND SU BSID Y OFFSET ACT OF  2000 : 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE DSB  
A. Statement by the European  Union  
2.1.  The Chairman  said that this item was on the Agenda of the present meeting at the request of 
the European  Union. He then invited the representa tive of the European  Union to speak . 
2.2.  The representative of the European Union  said that his delegation  request ed, once again , that 
the United  States stop transferring anti -dumping and countervailing duties to the US industry. Even 
if the amounts ha d considerably decreased, the most recent CDSOA report from December 2018 
showed that amounts were still being disbursed. Every disbursement that still took place was clearly 
an act of non -compliance with the DSB's recommendations and rulings. As long as th e United States  
did not fully stop transferring collected duties, this item would  rightly  be under the DSB 's 
surveillance. The EU  assure d delegations that , due to the long-standing  nature of this breach, it 
would  continue to insist  – as a matter of princip le – independently of the cost resulting from the 
application of such limited duties. The EU renew ed its call on the United  States to abide by its clear 
obligation under Article 21.6 of the DSU to submit implementation reports in this dispute. The EU 
would  continue to place this item on the Agenda of the DSB as long as the United States  had not 
fully implemented the WTO ruling s in this dispute and until the disbursements cease d completely.  
2.3.  The representative of  Canada  said that his country wished to thank the EU for placing this item 
on the DSB's Agenda. Canada agreed with the EU that this matter should remain subject to the 
surveillance of the DSB until the United States ceased to apply the measures at issue in this dispute .  
2.4.  The representative of  Brazil  said that , as an original party to the Byrd Amendment dispute, his 
country wished to  thank , once again , the EU for keeping this item on the Agenda  of the DSB . After 
more than 16  years since the adoption of the DSB's  recommendations in this dispute , and more than 
13 years after the date of the Deficit Reduction Act that  had repealed the Byrd Amendment, 
anti-dumping and countervailing duties were still being disbursed to US domestic petitioners . Brazil 
called on the United  States to comply fully with the DSB 's recommendations and rulings in this 
dispute.  
2.5.  The representative of  the United  States  said that as  the United States ha d noted at previous 
DSB meetings, the Deficit Reduction Act – which include d a provision repealing the Continued 
Dumping and Sub sidy Offset Act of 2000  (CDSOA)  – had been  enacted into law in February 2006. 
Accordingly, the United  States ha d implemented the DSB 's recommendations and rulings in these 
disputes. The United States  recall ed, furthermore, that the EU ha d acknowledged that  the Deficit 
Reduction Act did not permit the distribution of duties collected on goods entered after 
1 October  2007, more than 11 years ago. Even aside from this, the United States  question ed the 
trade rationale for inscribing this item  on the Agenda of the DSB . In May 2019, the EU had notified 
the DSB that disbursements related to EU exports to the United  States had totalled US$4,660.86 in 
fiscal year 2018. As such, the level of countermeasures under the Arbitrator 's formula in relation  to 
goods entered before 2007 was US$3,355.82. The EU had announced that it would apply an 
additional duty of 0.001 %– that is, one -one thousandth of a percent – on certain imports of the 
United  States. These values were no doubt outweighed by the associate d costs resulting from the WT/DSB/M/433  
 
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  application of these countermeasures – or the DSB 's taking up this Agenda item. With respect to the 
EU's request for status reports in this matter, as the United States  had already explained at previous 
DSB meetings, there was no obligation under the DSU to provide further status reports once a 
Member announce d that it ha d implemented the DSB 's recommendations, regardless of whether the 
complaining party disagree d about compliance. The practice of Members – including the 
European  Union as a responding party – confirm ed this widespread understanding of Article 21.6  of 
the DSU . Accordingly, since the United  States ha d informed the DSB that it ha d come into compliance 
in this dispute, there was nothing more for the United  States to pr ovide in a status report . 
2.6.  The DSB took note of the statements.  
3  EUROPEAN COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN LARGE CIVIL  AIRCRAFT: IMPLEMENT ATION OF THE RECOMME NDATIONS 
ADOPTED BY THE DSB  
A. Statement by the United  States  
3.1.  The Chairman  said that this item was on the Agenda of the present meeting at the request of 
the United  States. He then invited the representative of the United States to speak . 
3.2.  The representative of the United  States  said that the United States note d that, once again , the 
European  Union ha d not provided Members with a status report concerning the dispute "EC – Large 
Civil Aircraft" (DS316). As the United states  had noted at several recent DSB meetings, the EU ha d 
argued – under a different Agenda item  – that where the EU as a complaining party did not agree 
with another responding party Member's "assertion that it has implemented the DSB ruling", "the 
issue remains unresolved for the purposes of Article 21.6 DSU". Under this Agenda item, however, 
the E U argue d that by submitting a compliance communication, the EU no longer need ed to file a 
status report, even though the United States as the complaining party disagree d that the EU ha d 
complied. At recent DSB meetings, the European Union ha d attempted to reconcile this view with 
the EU's long -standing, contrary position. The EU argue d that the situation in the "US — Offset Act 
(Byrd Amendment)" dispute (DS217)  differed from that of the "EC – Large Civil Aircraft" dispute 
(DS316)  because, in CDSOA, the disp ute ha d been adjudicated and there were no further 
proceedings pending. With this statement, the EU suggest ed that the issue of compliance in the 
"US — Offset Act (Byrd Amendment)" dispute (DS217)  had been adjudicated; in fact, it ha d not. 
The United States had repealed the Continued Dumping and Subsidy Offset Act of 2000  measure 
after all of the proceedings in the dispute. By way of contrast, in the "EC – Large Civil Aircraft" 
dispute (DS316) , the EU' s claim of compliance ha d already been rejected by the DSB through its 
adoption of compliance panel and appellate reports. The EU ha d also erroneously argued that where 
"a matter is with the adjudicators, it is temporarily taken out of the DSB's surveillan ce". The EU 
provide d no explanation for how it read Article 21.6 of the DSU to contain this limitation. The EU 
essentially read the DSU as though the authorities given to the DSB were mutually exclusive rather 
than mutually complementary – but point ed to nothing in the text of the DSU to support that 
argument. Under the EU's own view, the EU should have provid ed a status report. Yet it ha d failed 
to do so, demonstrating the inconsistency in the EU's position depending on its status as complaining 
or respond ing party. The US position ha d been consistent and clear: Under Article 21.6 of the DSU, 
once a responding Member provide d the DSB with a status report that announce d compliance, there 
was no further "progress" on which it could  report and , therefore , no further obligation to provide a 
report. But as the EU allegedly disagree d with this position, it should for future meetings provide 
status reports in the "EC – Large Civil Aircraft"  dispute  (DS316 ). 
3.3.  The representative of the European Union  said that, in response to the US reference to the 
"US — Offset Act (Byrd Amendment)" dispute (DS217) , the EU  wished  to clarify , in relation  to its 
statement under the previous  Agenda item,  that it maintain ed its statement that the Byrd 
Amendment dispute ha d been adjudicated and that there were currently no further proceedings 
pending.  This was a statement of fact . This statement  did not suggest  – as the United States  seemed 
to imply – that the issue of compliance had been adjudicated. Regarding  the "EC – Large Civil 
Aircraft" dispute (DS316) , as in previous DSB meetings, the United States had again implied that 
the EU was taking inconsistent positions under Article 21.6 of the DSU, depending on whether the 
EU was a complaining party or a defending party in  a dispute. The US assertions remain ed without 
merit. As the EU ha d repeatedly explained in past meetings of the DSB, the crucial point for the 
defending party 's obligation to provide status reports to the DSB was the stage of the dispute . In 
the "EC – Large Civil Aircraft"  dispute (DS316) , the dispute was at a stage where the responding  WT/DSB/M/433  
 
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  party did not have an obligation to submit status reports to the DSB. The E U wished  to remind 
delegations  that in th is dispute , the EU had notified to the WTO a new set of measures in a 
compliance communication which had been  tabled at the 28 May 2018  DSB meeting. The 
United  States had responded that the measures included in that communication did not bring the 
EU in full compliance with DSB 's recommendations and rulings. In light of the US position, on 
29 May 2018 the EU had requested consultations with the United  States, under Articles  4 and 21.5 
of the DSU. These consultations  had failed to resolve the dispute. Consequently, the EU had asked 
for the establishment of a compliance panel. The compliance panel had been  established by the DSB 
on 27  August 2018. That compliance panel was currently reviewing "the existence or consistency 
with a covered agreement of measures taken to comply with the recommendations and rulings " of 
the DSB. As part of that review, the compliance panel had held a meeting with the parties and 
third parties, and was assessing the parties ' replies to its questions on compliance of the EU. The 
EU wished  to stress that a compliance proceeding was still ongoing in this dispute. Whether or not 
the matter was "resolved " in the sense of Article 21.6 of the DSU was the very  subject matter of 
this ongoing litigation. He questioned how it could  be said that the defending party should submit 
"status reports " to the DSB under  these circumstances . The EU would  have been very concerned 
with a reading of Article 21.6 of the DSU that would  have require d the defending party to notify the 
purported "status of its implementation efforts " through the submission of status reports to the DSB, 
while dispute settlement proceedings on that precise issue were ongoing. The view of the EU was 
further supported by Article 2 of the DSU on the administration of the dispute settlement rules and 
procedures: where, further to the disagreement between the parties on compliance, a matter was 
with the adjudicators, it was temporarily taken out of the DSB 's surveillance.  
3.4.  The DSB took note of the statements.  
4  UNITED STATES – SAFE GUARD MEASURE ON IMP ORTS OF CRYSTALLINE SILICON 
PHOTOVOLTAIC PRODUCT S 
A. Request for the establishment of a panel by China (WT/DS562/8)  
4.1.  The Chairman  recall ed that the DSB had considered this matter at its meeting on 22 July 2019 
and had agreed to revert to it , should a requesting Member  wished to do so.  He drew attention to 
the communication from China contained in docu ment WT/DS562/8 , and invited the representative 
of China to speak . 
4.2.  The representative of China  said that on 22 July 2019, China had respectfully requested that 
the DSB establish a panel, with standard terms of reference , to examine the matter contained  in 
document WT/DS562/8. At that meeting, the DSB had decided to defer the establishment of a panel 
due to the US opposition to the request. In particular, the United States had argued that it had 
exercised its legitimate ri ght to impose safeguard measures on imports of crystalline silicon 
photovoltaic (CSPV) products. According to the United  States, the safeguard measures had been  
imposed on the basis of an open and transparent process, allegedly complying with both its dome stic 
laws and WTO obligations. China did not deny the right of WTO Members to temporarily suspend 
concessions and take safeguard measures consistent with WTO rules. However, China note d that 
Article XIX of the GATT 1994 qualifie d safeguards as an "emergenc y action on imports " that had to  
be seen as an "extraordinary remedy " subject to specific and strict requirements. Non-compliance 
with these requirements impermissibly disrupt ed global trade flow s as a whole since such measures 
were applied without regard for  the origin of product s. As China had explained at the 22 July 2019  
DSB meeting, the United  States had failed to conform to the most essential conditions that would 
have justified the imposition of safeguard measures on CSPV products. China  was confiden t that the 
panel would  also find the United  States had not respect ed many of the procedural guarantees 
governing safeguard proceedings. These defects had resulted in the imposition of safeguard 
measures that did not constitute relief limited to what  was necessary to "prevent or remedy serious 
injury and facilitate adjustment "3, in accordance with the obligations under the Safeguards 
Agreement. As a final point, China wished  to express its surprise at the contention of the 
United  States that China 's panel request include d a claim that had not been  referred to  in the request 
for consultations, though the United  States had not specif ied which claim China  would not have 
referred to. As a matter of fact, China 's panel request fully complie d with Article 6.2 of the DSU. 
China 's panel request contain ed exactly the same claims and the sa me exact obligations that had 
                                                
3 Article 5.1 of the Safeguard Agreement.  WT/DSB/M/433  
 
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  been referred to in its request for consultations. In light of the above, China wished to reiterate  its 
request and urge d the DSB to establish a panel, with standard terms of reference.   
4.3.  The representative of the United  States  said that the United  States had stated at the 
22 July 2019 DSB meeting that: (i) the WTO Agreement  recognized the right of  Members to 
temporarily suspend concessions and other obligations when a product was being import ed into its 
territory in such increased quantities and under such conditions as to cause serious injury or threat 
of serious injury to the Member's domestic industry; and (ii) the United States ha d exerci sed this 
right with respect to imports of crystallin e silicon photovoltaic  (CSPV)  products. The United  States 
had imposed a safeguard measure after the competent authority, the US International Trade 
Commission, had determined that increased imports of CSPV products were the substantial cause of 
serious inj ury to the domestic industry producing like or similar products. Accordingly, the 
United  States regret ted that China ha d chosen , for a second time , to request establishment of a 
panel with regard to this matter. The United  States was prepared to engage in these proceedings 
and to explain to the panel that China ha d no legal basis for its claim . In light of China's stated 
confidence in the claims brought, the United  States would expect China to support, in the context of 
this dispute, making the panel meetin gs open to observation by other WTO Members and the public 
and to making China's submissions publicly available. Indeed, the United States  noted that China 
had made publicly available a submission in one recent dispute, "European Union – Measures Related 
to Price Comparison Methodologies" (DS516),4 and the United States  saw no reason why China 
would be less transparent in this dispute, challenging a safeguard me asure, than in that dispute, 
challenging anti -dumping measures . 
4.4.  The DSB took note of the statements and agree d to establish a panel in accordance with the 
provisions of Article  6 of the DSU , with standard terms of reference.  
4.5.  The representatives of Brazil , Canada , the European Union ; India, Japan , Malaysia , the 
Philippines , the Russian Federation  and Chinese Taipei  reserved their third -party rights to participate 
in the Panel 's proceedings.  
5  INDIA – MEASURES CON CERNING SUGAR AND SU GARCANE  
A. Request for the establishment of a panel by Brazil (WT/DS579/7)  
5.1.  The Chairman  recall ed that the DSB had considered this matter at its meeting on 22 July 2019 
and had agreed to revert to it  should a requesting Member wish to do so . He drew attention to the 
communication  from Brazil contained in document WT/DS579/7 . He then invite d the representative 
of Brazil to speak.  
5.2.  The representative of Brazil  said that his country  was request ing that the DSB establish a panel 
at the present meeting , with standard terms of reference , in order to examine India 's measures on 
sugar and sugarcane. This was the second time Brazil was request ing the establishment of a panel, 
as India had blocked this panel request , for the first time,  at the 22 July 2019 DSB meeting. Brazil 
continue d to have serious concerns with regard to India 's actions to provid e support that exceed ed 
the levels of domestic support that India was allowed to  provide under  the Agreement on Agriculture,  
and grant ed export subsidies that were prohibited under the  SCM Agreement . Brazil  had already 
noted the harmful consequences of India 's measures for Brazilian sugar producers. The panel 
requests of Australia and Guatemala show ed that producers from those countries were also being 
negatively affected by those measures. Brazil was still hopeful that India would  make every effort 
to bring its measures into conformity with its WTO obligations. Given that the subject matter of the 
panel requests under this and the next two Agenda items were similar, Br azil request ed that a single 
panel be established in accordance with Article  9.1 of the DSU to examine the complaints of 
Australia, Brazil and Guatemala. Brazil  believe d this was the most efficient course of action and the 
best u se of WTO resources.  
5.3.  The representative of India said that his country  was disappointed that Brazil ha d chosen to 
move forward with its second request for the establishment of a panel regarding  India's m easures  
                                                
4 Opening Statement by Ambassador Zhang Xiangchen as a part of the Oral Statement of China at the 
First Substantive Meeting of the Panel in the dispute: "European Union – Measures Related to Price Comparison 
Methodologies" (DS516) (Geneva, 6 December 2017), available at: 
http://images.mofcom.gov.cn/wto2/201712/20171213174424357.pdf . WT/DSB/M/433  
 
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  concerning sugar and sugarcane. As India had explained in its statement made at the 22 July 2019  
DSB meeting  in response to Brazil's first request for the establishment of a panel, the m easures  that 
were the subject matter of Brazil's request neither had any trade distorting effect on global sugar 
trade nor d id they adversely  affect Brazil's commercial interest s. India wished to reiterate  that these 
measures  were consistent with its WTO obligations and were aimed at preventing the exploitation 
of over 35 million vulnerable, low -income, resource -poor farmers, and to enable them to have a just 
and equitable share in economic development. India note d that Brazil ha d requested the 
establishment of a single panel to examine its claims along with certain other matters that were on 
the Agenda o f the present meeting. India did not agree to the establishment of a single panel, as 
these matters were distinct and separate.  
5.4.  The representative of  Brazil  said that his country  regret ted India's decision to have separate 
panels for very similar disputes, dealing with essentially the same subject matter and being 
established concurrently. Brazil  failed to see any advantage in having separate panels in these 
disputes. On the contrary, Brazil  believed that separate panels would  unduly burden an already 
overburdened Secretariat 's resources.  Nevertheless, Brazil remain ed ready to work constructively 
in order to harmonize  the procedures to ensure coherence in the work of the panels.  
5.5.  The DSB took note of the statements and agree d to establish a panel in accordance with the 
provisions of Article  6 of the DSU , with standard terms of reference.  
5.6.  The representatives of Australia , Canada , China , Colombia , Costa Rica , the European  Union , 
Guatemala , Honduras , Japan, Panama , the Russian Federation , Thailand  and the United  States  
reserved their third -party rights to participate in the Panel 's proceedings.  
6  INDIA – MEASURES  CONCERNING SUGAR AN D SUGARCANE  
A. Request for the establishment of a panel by Australia (WT/DS580/7)  
6.1.  The Chairman  recall ed that the DSB had considered this matter at its meeting on 22 July 2019 
and had agreed to revert to it  should a requesting Member wish to do so. He  drew attention to the 
communication from Australia contained in document WT/DS580/7 , and invited the representative 
of Australia to speak.  
6.2.  The representative of Australia  said that her  country  request ed that the DSB establish a panel , 
with standard terms of reference , to examine India's measures concerning sugarcane and sugar. 
Australia  recall ed that it had first requested the establishment of a panel to examine this dispute at 
the 22 July 2019 DSB meeting as consultations held in April 2019 with India had failed to re solve 
the matter. Australia  further note d that India had objected to its first panel request. Australia 
remain ed seriously concerned that the overproduction of highly subsidi zed sugar in India was 
contributing to a significant oversupply in the global suga r market. Australia  wished to reiterate  its 
view that India's domestic support and export subsidies for sugarcane and sugar were inconsistent 
with India's obligations under the WTO Agreement on Agriculture and the WTO SCM Agreement  and, 
further , that India  had failed to comply with its notification obligations in relation to sugarcane and 
sugar under the Agreement on Agriculture, the SCM Agreement and the GATT 1994. Australia  noted 
that Brazil and Guatemala continue d to share their concerns and that both Members also request ed 
for a second time that the DSB establish a panel in relation to the same measure. Australia , 
therefore , repeat ed its request that a single panel be established in accordance with Article 9.1 of 
the DSU to exami ne the complaints of Australia, Brazil and Guatemala. To do so would best facilitate 
a consistent, clear and certain resolution of the dispute, and enable this matter to be dealt with most 
efficiently at a time whe n the resources of the WTO were constraine d. Australia value d its strong 
political, economic and community ties with India. However, as India ha d taken no concrete steps 
to date to respond to Australia's  long-standing concerns, Australia  repeat ed its request that a panel 
be established.  
6.3.  The repre sentative of India said that his country  was disappointed that Australia ha d moved 
forward with its second request for the establishment of a panel regarding  India's m easures  
concerning sugar and sugarcane. As India had explained in its statement made at the 22 July 2019  
DSB meeting  in response to Australia's request for the establishment of a panel, the m easures  that 
were the subject matter of Australia's request had no bearing on world sugar trade or Australia's 
ability to compete in the global trade of sugar. India repeat ed that these measures  were consistent WT/DSB/M/433  
 
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  with its WTO obligations and were aimed at preventing the exploitation of o ver 35 million vulnerable , 
low-income , resource -poor farmers, and to enable them to have a just and equitable share in 
economic development. India note d that Australia ha d requested the establishment of a single panel 
to examine its claims along with certain other matters that were on the Agenda of the present 
meeting. India did not agree to the establishment of a single panel , as these matters were distinct 
and separate.  
6.4.  The representative of  Australia  said that her country  wished to reiterate  its strong view that a 
single panel should be established under Article  9.1 of the DSU, p articularly  since the complainants' 
requests relate d to the same matter . Australia  believe d that it was in the interest of all Members 
that matters be considered in an efficient way, especially when the dispute settlement system was 
facing resourcing constraints. Australia  consider ed that the certainty and the predictability of the 
WTO system would be best served by the establishment of a single panel under Article  9.1. It was 
obvious that India ha d failed to provide an explanation as to why it would not be feasible for the  
matter to be heard by a single panel.  
6.5.  The DSB took note of the statements and agree d to establish a panel in accordance with the 
provisions of Article  6 of the DSU , with standard terms of reference.  
6.6.  The representatives of Brazil , Canada , China , Colombia , Costa Rica , the European  Union , 
Guatemala , Honduras , Japan , Panama , the Russian Federation , Thailand  and the United  States  
reserved their third -party rights to participate in the Panel 's proceedings.  
7  INDIA – MEASURES  CONCERNING SUGAR AN D SUGARCANE  
A. Request for the establishment of a panel by Guatemala (WT/DS581/8)  
7.1.  The Chairman  recall ed that the DSB had considered this matter at its meeting on 22 July 2019 
and had agreed to revert to it  should a requesting Member wish to do so. He then drew attention to 
the communication from Guatemala contained in document WT/DS581/8 , and  invite d the 
representative of Guatemala to speak.  
7.2.  The representative of Guatemala  recalled  that, at the 22 July 2019  DSB meeting, India  had 
objected to the establishment of a panel in this dispute. Guatemala, therefore, request ed for the 
second time that the DSB establish a panel , with standard terms of reference , to examine India 's 
measures concerning sugarcane and sugar as elaborated in Gua temala 's request for the 
establishment of a panel contained in document WT/DS/581/8. To ensure the efficiency of the 
proceedings, Guatemala further request ed that, in accordance with Article 9.1 of the DSU, a single 
panel be established to jointly examine the complaints of Guatemala, Australia and Brazil. In 
particular, Guatemala note d that India ha d not provided an adequate explanation as to why it would 
not be "feasible " for the matter to be heard by a single panel.  In "India – Patents  (EC)" (DS79), the 
Panel had suggested that it was feasible for multiple complaints to be heard by a single panel if 
two requirements were fulfilled: first, the complaints had to  deal with the same matter, and second, 
the panel requests had to  be submitted at th e same time.5 In the dispute at hand, the complaints 
relate d to the same matter, that is, the WTO -inconsistency of India 's measures concerning 
sugarcane and sugar. In addition, the panel requests of Guatemala, Australia and Brazil were being 
submitted at t he same time. Therefore, it was "feasible " for the matter to be heard by a single panel.  
Moreover, having multiple panels would require additional resources from India. For example, 
India would need to : (i) deal with three separate set s of hearings (one he aring for each dispute);  
(ii) respond individually to each written submission; and (iii) respond to different questions from 
different panels. Having multiple panels would not be in the interest of using scarce resources wisely 
and efficiently.  Having multiple panels would also require additional resources from Guatemala, 
which was a small developing country with resource constraints. For example, Guatemala would 
need to deploy additional resources in requesting third party rights in the two para llel proceedings. 
Guatemala hope d that India would reconsider its objection to the establishment of a single panel 
under Article 9.1 of the DSU, and that India would use this opportunity to cooperate with the 
co-complainants to ensure  the most efficient us e of the parties ', third  parties ' and Secretariat 's 
resources in this dispute. Notwithstanding Guatemala 's request for the establishment of a panel, 
                                                
5 See Panel R eport, " India – Patents" , para. 7.16.  WT/DSB/M/433  
 
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  Guatemala remain ed open to discussing a possible mutually agreed solution with India that would 
address its concerns.  
7.3.  The representative of India said that India was disappointed  that Guatemala ha d chosen to 
move forward with its second request for the establishment of a panel regarding India's m easures  
concerning sugar and sugarcane. As India had explained in its statement made at the 22 July 2019  
DSB meeting  in response to Guatemala's request for the establishment of a panel, the m easures  
that were the subject matter of Guatemala's request neither had any trade distorting effect on global 
sugar trade nor did they adversely  affect Guatemala's commercial interest s. India wished to reiterate  
that these m easures  were consistent with its WTO obligations and were aimed at preventing the 
exploitation of o ver 35 million vulnerable, low -income, resource -poor farmers, and to enable them 
to have a just and equitable share in economic development. India note d that Guatemala ha d 
requested the establishment of a single panel to examine its claims along with certain ot her matters 
that were on the Agenda of the present meeting. India did not agree to the establishment of a single 
panel,  as these matters were distinct and separate.  
7.4.  The DSB took note of the statements and agree d to establish a panel in accordance with the 
provisions of Article  6 of the DSU , with standard terms of reference.  
7.5.  The representatives of Australia , Brazil , Canada , China , Colombia , Costa Rica , the 
European  Union , Honduras , Japan , Panama , the Russian Feder ation, Thailand  and the United  States  
reserved their third -party rights to participate in the Panel 's proceedings.  
8  TURKEY – CERTAIN MEA SURES CONCERNING THE  PRODUCTION, IMPORTA TION AND 
MARKETING OF PHARMAC EUTICAL PRODUCTS  
A. Request for the establishment of  a panel by the European Union (WT/DS583/3)  
8.1.  The Chairman  drew attention to the communication from the European  Union contained in 
document WT/DS583/3 . He then invite d the representative of the European Union to speak.  
8.2.  The representative of the European Uni on said that the Turkish authorities had adopted 
measures to achieve progressively the locali zation in Turkey of the production of a substantial part 
of the pharmaceutical products consumed in Turkey. In order to achieve that objective, Turkey had 
implemented several measures. One such measure was a localization requirement, whereby Turkey 
require d foreign producers of pharmaceutical products exporting to Turkey to move their production 
into Turkey, in order for their products to be eligible for the national reimbursement scheme. As the 
Turkish social security scheme cover ed the vast majority of sal es of medicines to patients, it was 
much more difficult for a product that was not reimbursed to access the Turkish market. Another 
measure  was an import ban on localized products, whereby the importation of a pharmaceutical 
product that was localized was no longer permitted.  A third category of  measures was a prioritization 
measure. This consist ed of Turkey giving priority to the review of applications of domestic 
pharmaceutical products for inclusion in the list of products covered by the reimbursement scheme, 
as well as with respect to any pricing and licensing policies and processes, over the re view of the 
applications of like imported products. These measures were a clear violation of Turkey 's WTO 
obligation to treat foreign companies on an equal footing with domestic ones.  EU exports of 
pharmaceutical products to Turkey were worth more than EUR 2.5 billion each year. Already at the 
time of the present meeting , the competitive opportunities of EU pharmaceutical products imported 
into Turkey were significantly reduced compared to like domestically produced products.  The EU had 
raised this issue wit h Turkish authorities repeatedly over a long period of time without success. The 
present  request for the establishment of a panel c ame after consultations with the Turkish 
government which had taken  place in May of 2019. The se consultations had failed to r esolve the 
matter. The EU urge d Turkey to bring these measures in line with its WTO obligations. To this end, 
the EU request ed the establishment of a panel to assess fully the relevant measures.  
8.3.  The representative of Turkey  said that her country  deeply regret ted that the European Union 
had decided to request establishment of a panel in this dispute. Turkey consider ed the EU's panel  
request to be premature. Turkey ha d fully engaged in consultations with the European Union and 
remain ed ready to con tinue a constructive discussion in order to arrive at a mutually acceptable 
solution in this dispute. Turkey also consider ed the European  Union's request to be misplaced. 
Indeed, the matter raised in the EU's request for the establishment of a panel relate d to Turkey's WT/DSB/M/433  
 
- 15 - 
 
  social security system and policies that were aimed at ensuring a fair and uninterrupted access to 
medicines for all patients in Turkey. These healthcare policies and any specific measures taken in 
their context were fully consistent with Tur key's rights and obligations under the WTO covered 
agreements. The EU's allegations against Turkey were based on a misunderstanding of Turkey's 
social security and healthcare systems. Turkey disagree d with the EU's decision to rely on the WTO 
dispute settl ement system to challenge what were essentially measures adopted to ensure that its 
citizens had a reliable and affordable access to healthcare. Each WTO Member should be free to 
organi ze its social security system in a way which maximi zed accessibility wh ile guaranteeing 
financial sustainability. Given the societal importance of providing affordable healthcare, any 
concerns relating to Turkey's public health policies were not matters that should be referred to a 
panel. In these circumstances, Turkey could not  agree to the establishment of a panel as requested 
by the European Union at the present meeting .  
8.4.  The DSB took note of the statements and agree d to revert to this matt er should a requesting 
Member wish to do so.  
9  UNITED STATES – COUN TERVAILING DUTY MEAS URES ON CERTAIN PROD UCTS FROM 
CHINA: RECOURSE TO A RTICLE 21.5 OF THE D SU BY CHINA  
A. Report of the Appellate Body (WT/DS437/AB/RW and WT/DS437/AB/RW/ Add.1) and 
Report of the Panel (WT/DS437/RW and WT/DS437/RW/ Add.1) 
9.1.  The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS437/28 transmitting the Appellate Body Report in the dispute: "United  States – 
Countervailing Duty Measures on Certain Products from China: Recourse to Article  21.5 of the D SU 
by China ", which had been  circulated on 16 July 2019 in document WT/DS437/AB/RW and Add.1. 
He remind ed delegations that the Appellate Body Report and the Panel Report pertaining to this 
dispute had been circulated as unrestricted documents.  As Members were aware, Article  17.14 of 
the DSU require d that: "an Appellate  Body report shall be adopted by the DSB and unconditionally 
accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the 
Appellate Body report within 30  days following its circulation to Members. This adoption procedure 
is without prejudice to the right of Members to express their views on an Appellate Body report ". He 
then asked if any representative of the parties to the dispute wish ed to present views on the Reports 
before the DSB . 
9.2.  The representative of  China  said that his country had  initiated this dispute nearly seven years 
ago in order to address one of the most pernicious and unlawful aspects of how the US Department 
of Commerce ( USDOC ) conduct ed countervailing duty investigations against Chinese products. In 
truth, there were many  aspects of the USDOC 's countervailing duty practice that China could have 
challenged. However,  China had decided to focus on the USDOC 's practice of manufacturing 
non-existent "input subsidies " in order to inflate countervailing duty margins far beyond what any 
impartial and u nbiased investigating authority could lawfully determine. As China ha d consistently 
explained, the USDOC 's identification of alleged "input subsidies " to downstream manufacturers of 
finished products fail ed all three elements of an actionable subsidy: ther e was no financial 
contribution, there was no benefit, and there was no basis to conclude that any "subsidy ", even if it 
had existed, was specific to certain enterprises. What the USDOC identifie d as "input subsidies " 
were, in fact, ordinary commercial tra nsactions between unrelated parties at prevailing market prices 
for the input in question. The recommendations and rulings that the DSB  was adopting at the present 
meeting  had confirm ed that China was right about at least two of these three elements. For t he 
reasons that China  would explain  at the present meeting , China was not entirely satisfied with the 
Panel and Appellate Body reports that Members were considering, just as the United States was not 
entirely satisfied with these reports. But these reports were nevertheless sufficient to establish that 
the United States ha d acted unlawfully in the investigations at issue by countervailing alleged "input 
subsidies " that did not, in fact, exist.  
9.3.  With regard to  the notion of "public body", the findings of the Panel and Appellate Body 
concerning the proper interpretation of the term "public body " under Article 1.1(a)(1) of the SCM 
Agreement , China said that n early a decade ago, the Appellate Body had rejected the USDOC 's 
application of a per se  rule of majority government ownership to determine whether Chinese 
enterprises were "public bodies " under Article 1.1(a)(1) of the SCM Agreement. In  the "US – 
Anti-Dumping and Countervailing Duties (China) " disput e (DS379), the Appellate Body had explained 
that an investigating authority conducting a public body analysis instead had to determine whether WT/DSB/M/433  
 
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  the entity was "vested with authority to exercise governmental functions ". The Appellate Body had 
explained that an investigating authority had to "engage in a careful evaluation of the entity in 
question " in order to "identify its common features and relationship with government in the narrow 
sense, having regard, in particular, to whether the entity exercises authority on behalf of 
government ". In the wake of the adoption of the Appellate Body report in the "US – Anti-Dumping 
and Countervailing Duties (China)" dispute ( DS379 ), the USDOC had made no attempt to come into 
compliance with the DSB's recomm endations and rulings by engaging in a "careful evaluation ", as 
described by the Appellate Body , when conducting a public body analysis of Chinese enterprises. 
Instead, the USDOC  had simply taken the per se rule of majority government ownership that the 
Appellate Body had expressly rejected and had replaced it with a per se  rule that was substantially 
broader. The old per se  rule had led the USDOC to conclude that all majority government -owned 
entities in China were public bodies. The new per se  rule led th e USDOC to conclude that all 
companies in China were public bodies, because the USDOC took the view that all companies in 
China were allegedly vested with authority to perform the so -called "government function " of 
"maintaining and upholding the socialist market economy ". To China, it was immediately evident 
that the USDOC 's new per se  rule was irreconcilable with the Appellate Body 's interpretive analysis 
in the "US – Anti-Dumping and Countervailing Duties (China)" dispute ( DS379 ). China was a socialist 
market economy, and so China  believed that the USDOC 's conclusion that "maintaining and 
upholding the socialist market economy " was a "government function " in China was meaningless in 
the absence of any attempt to demonstrate that this alleged "government function " had a connection 
to the conduct alleged to constitute a financial contribution. Yet the USDOC had never made any 
attempt to demonstrate such a connection, because the USDOC took the view that an entity vested 
with authority to perform a ny "government function " was a public body, even when the authority 
vested in the entity had no connection whatsoever with the conduct at issue under Article 1.1(a)(1)  
of the SCM Agreement . The fact th at the Panel and the Appellate Body had upheld this swe eping 
interpretation in the reports that were being considered at the present meeting was dumbfounding 
to China. The purpose of Article 1.1(a)(1) of the SCM Agreement was to "set out rules relating to 
the question of attribution of conduct to a State ". China believed that it confound ed the entire 
purpose of the inquiry to attribute conduct to a WTO Member even when that conduct was unrelated 
to any government authority with which an entity had been vested. What was deeply disappointing 
to China about the Ap pellate Body 's analysis was its utter failure to even address this fundamental 
issue. In the "US – Anti-Dumping and Countervailing Duties (China)" dispute (DS379 ), the Appellate 
Body had found that its public body interpretation "coincide[d] with the essence of Article 5 " of the 
ILC Articles, which attribute d to the State the conduct of a person or entity that was not an organ 
of the State if "empowered by the law of the State to exercise elements of the governmental 
authority provided the person or entity is acting in that capacity in the particular instance ". In the  
Report  before the DSB at the present meeting , the Appellate Body had not even attempt ed to explain 
how its interpretation "coincide[ d] with the essence of Article 5 " of the ILC Articles if any entity 
"empowered by the law of the State to exercise elements of the governmental authority " could be 
deemed a public body regardless of whether that entity had been acting in that capa city when 
engaged in the conduct that was the subject of the financial contribution inquiry. In the "US – 
Anti-Dumping and Countervailing Duties (China)" dispute ( DS379 ), the Appellate Body had found 
that "too broad an interpretation of the term 'public bo dy'" could "risk upsetting the delicate balance 
embodied in the SCM Agreement because it could serve as a license for investigating authorities to 
dispense with an analysis of entrustment and direction and instead find entities with any connection 
to gover nment to be public bodies ". China believe d that the Appellate Body 's interpretative analysis 
under Article 1.1(a)(1) in the current report should be of grave concern to all Members – if 
investigating authorities treat ed entities vested with authority to pe rform any "government function " 
as public bodies, the "delicate balance embodied in the SCM Agreement " would be upset in precisely 
the way that the Appellate Body had once feared.  
9.4.  With regard to the findings of the Panel and Appellate Body relate d to the USDOC 's use of 
non-Chinese benchmarks to evaluate the adequacy of remuneration under Article 14(d) of the SCM 
Agreement , China said that t he USDOC 's abuses of Article 14(d) were well known to the Membership . 
There had been no fewer than eight separate challenges to the USDOC 's use of out -of-country 
benchmarks under this provision. Several of these disputes remain ed underway. China considered  
that it was useful to evaluate the present Reports in their broader historical context. The history of 
the "out-of-country benchmark " issue under Article 14(d) provide d a case study of how the 
United  States abuse d trade remedies and ignore d the rulings of this body. This history also illustrate d 
the inconsistent attitudes of the United  States toward the role of panel s and the Appellate Body in 
interpreting and applying the covered agreements. The representative of China invited Members  to 
be honest with each other, especially as people who negotiate d and interpret ed treaties: the text of WT/DSB/M/433  
 
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  Article 14(d)  of the SCM Agree ment did not contemplate the use of out -of-country benchmarks under 
any circumstance. The text was clear: the adequacy of remuneration for the provision of a good was 
to be determined "in relation to prevailing market conditions for the good in the country of provision ". 
Yet in the "US – Softwood Lumber IV " dispute (DS257) , the United  States  had persuaded the 
Appellate Body to overrule the Panel in that dispute and to create an exception to this unambiguous 
rule. The Appellate Body had held that an i nvestigating authority may, in "very limited " 
circumstances, use a benchmark other than private prices for the good in the country of provision.  
9.5.  China observed , first of all, that the United  States  did not seem to have a problem with the 
Appellate Body cr eating "judge -made " rules when they were rules that the United  States  agreed 
with. When the United  States accuse d the Appellate Body of "straying from the text " or 
"overreaching ", what the United  States really mean t was that it  was dissatisfied with how the 
Appellate Body ha d interpreted a particular provision in the covered agreements. The United States  
believed that  the Appellate Body "exceeds its authority " or "departs from what the Members agreed " 
whenever it did not accept whatever interpretation the  United States favoured . China invited 
Members to  look at what the United States had proceeded to do with this newly -created exception. 
Far from constraining its use of out -of-country benchmarks to "very limited " circumstances, as the 
Appellate Body had envisioned, the USDOC had started to find "distortions " around every corner. 
The USDOC 's use of out -of-country benchmarks had rapidly bec ome the norm, not the exception. It  
was not difficult to see why: by replacing available in -country prices with benchmark s of its own 
choosing, the USDOC was able to manufacture "subsidies " and increase countervailing duty margins 
to practically whatever level it wishe d. The 15 years of litigation under Article 14(d) that  had ensued 
were the predictable consequence of giving  in to the US demand for an exception to the text that 
the Members had negotiated. The focus of these disputes had quickly moved away from the text of 
the provision and toward the meaning of the exception that the Appellate Body had created. Canada, 
China,  India, Indonesia and Turkey had all been forced to come before the DSB, some more than 
once, in their efforts to rein in the USDOC 's abuses of the "very limited " exception to the clear 
requirement of Article 14(d). These disputes had consumed a significant amount of the DSB 's 
resources and of those of the Secretariat. China had hoped that, in view of this unfortunate history, 
the Appellate Body would have used this appeal to return to the text of Article 14(d) and impose 
more clearly defined limi tations on when, as a matter of law, an investigating authority could reject 
in-country prices as benchmarks. Such an approach would have brought greater certainty to this 
area of jurisprudence and, perhaps, have reduced the volume of litigation under Arti cle 14(d) in the 
years to come . China regret ted that the Appellate Body had opted, once again, to focus on the 
meaning of its own prior reports instead of the meaning of the provision it had been called upon to 
interpret.  
9.6.  China said that a t the same time,  both the Panel and the Appellate Body in these compliance 
proceedings had made clear that the Appellate Body meant what it had said in the "US – Softwood 
Lumber IV " dispute  (DS257) : that  is, that  the circumstances in which an investigating authority 
could  resort to out -of-country benchmarks were indeed "very limited ". By setting a high evidentiary 
bar for when an investigating authority could reject in -country prices as benchmarks, the Panel and 
the Appellate Body had indicated to investigating authorities  and reviewing panels that it should be 
only in  rare circumstance s that an investigating authority was allowed to reject in -country prices as 
benchmarks. The recommendations and rulings that the DSB would  adopt at the present meeting 
should, in particular,  bring to an end one of the most dangerous aspects of the USDOC 's practice 
under Article 14(d)  of the SCM Agreement . In investigation after investigation, the USDOC ha d 
identified aspects of a Member 's economy or market regulation that it did not agree wit h and ha d 
cited those factors as reasons for rejecting in -country prices, without ever demonstrating that those 
factors had any effect upon in -country prices. The USDOC 's "distortion " findings had been based on 
presumptions and inferences, at best, not hard evidence that specific government "interventions " 
had materially affected in -country prices to such an extent that they could no longer be considered 
market -determined. The USDOC had apparently b elieved that Article 14(d) embodie d the US 
understanding of how markets should be regulated, and that any deviation from this understanding 
was, necessarily, a "distortion ". Going forward, the USDOC would need to base any decision to reject 
in-country pric es on positive evidence that "price distortion actually results from government 
intervention in the market ". The USDOC could no longer presume that in -country prices were 
"distorted " and could no longer force respondents to prove the contrary. In addition,  the USDOC had 
to cease its well -documented practice of simply ignoring evidence that parties place d on the record 
to demonstrate that in -country prices were, in fact, market -determined. As a result of this decision , 
the USDOC must now  "engage with and analyse the methods, data, explanations, and supporting 
evidence put forward by interested parties in order to ensure that its finding of price distortion is WT/DSB/M/433  
 
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  supported, and not diminished or contradicted, by evidence and explanations on the  record ". The 
decision to adopt these reports at the present meeting mean t, moreover, that the USDOC could no 
longer rely on its "cookie -cutter " rationales for routinely rejecting in -country benchmarks. 
Henceforth, the USDOC would have to engage with the f acts of each investigation. If the 
United  States implement ed these obligations in good faith, as China presume d that it would , the 
recommendations and rulings that Members would adopt at the present meeting  should go a long 
way toward addressing the concer ns that China and other WTO Members had had with the USDOC 's 
abuse of  the limited exception created in the "US – Softwood Lumber IV " dispute  (DS257) . The use 
of in-country benchmarks should be the norm, not the exception. China trust ed that the USDOC 
would  revise its practices accordingly so that China and other Members were not forced to challenge 
the USDOC 's determinations on a regular basis, as had been the case since the "US – Softwood 
Lumber IV " dispute (DS257) . 
9.7.  With regard to  the DSB 's recommendations and rulings concerning specificity under 
Article  2.1(c) of the SCM Agreement , China said that the findings and conclusions of both the Panel 
and the Appellate Body in this matter reaffirm ed that an investigating authority could not simply  
summon specificity into existence, which was what the USDOC ha d been doing for years. A valid 
finding of specificity was a separate and independent requirement for imposing a countervailing 
duty. It was not merely a consequence of finding that there was a "subsidy ". The USDOC 's approach 
to specificity in its investigations of Chinese products, including in the determinations at issue, 
illustrate d the ficti tious nature of the "input subsidies " that the USDOC purport ed to identify. In the 
real world, the inp ut sales that the USDOC consider ed to be "subsidies " were garden -variety 
transactions between independent sellers and purchasers operating at arm 's length. By using an 
out-of-country benchmark (unlawfully), the USDOC f ound these transactions to be "subsidi es". The 
USDOC then reason ed that because these transactions occur red repeatedly – which, of course, they 
did, because the manufacturers of a product had to procure the necessary inputs on a regular basis 
– it had to be the case that these alleged "subsidi es" were provided pursuant to a "subsidy 
programme ". The findings of the Panel and the Appellate Body made clear that the USDOC had to 
stop engaging in this self -fulfilling approach to specificity. In assessing whether there was specificity 
under the first factor of Article 2.1(c)  of the SCM Agreement , an investigating authority first had to 
identify the relevant "subsidy programme ". A "subsidy programme " within th e meaning of 
Article  2.1(c) was a "plan or scheme " pursuant to which financial contributions that confer red a 
benefit were provided to certain enterprises. The mere repeat provision of inputs to downstream 
enterprises did not constitute a "subsidy programm e". An investigating authority could not observe 
the existence of the individual transactions that it ha d found to constitute subsidies and conclude, 
on that basis alone, that there was a "subsidy programme ". Nor may an investigating authority rely 
on the fact that the input s in question ha d been provided on a regular basis. As the Appellate Body 
had rightly held, this "would circumvent the legal disciplines of Article 2.1(c) ". Rather, an 
investigating authority had to identify a plan or scheme pursuant to which the subsidy in question 
had been provided, as evidenced by a systematic series of actions. That was what a "subsidy 
programme " was.  
9.8.  China said that i f the USDOC were to faithfully implement these recommendations and rulings, 
it would find that no such "subsidy programmes " existed for the inputs in question (or, indeed, for 
any ordinary industrial input). That was because China did not subsidize industrial inputs. If and 
when the USDOC use d proper in -country benchmarks to evaluate the t ransactions in question, it 
would find that there was no "subsidy " and hence no "subsidy programme " even under its 
self-fulfilling approach to specificity. Beyond that, even if the USDOC were to identify a subsidy 
"benefit " in certain individual transactio ns, it would not find that any such "subsidies " had been 
provided systematically such that they would provide evidence of an unwritten "plan or scheme ". 
While China presume d that the United  States would implement its obligations under Article 2 of the 
SCM Agreement in good faith, China wished to take this opportunity to remind the United  States 
that any affirmative finding of specificity "shall be clearly substantiated on the basis of positive 
evidence ", in accordance with Article 2.4. As anyone who deal t with the USDOC on a regular basis 
was aware, the USDOC ha d a practice of issuing burdensome questionnaires that presume d the 
existence of the matter being investigated and then resorting to so -called "adverse facts available " 
when the respondents were unabl e to demonstrate to the USDOC 's satisfaction that the matter did 
not exist. This was clearly an abuse of  the procedural requirements of the SCM Agreement, and one 
that China would be monitoring carefully against.  WT/DSB/M/433  
 
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  9.9.  In conclusion,  China said that it  hoped that its remarks made clear that the United  States did 
not have a monopoly on dissatisfaction with Appellate Body reports. Any Member that was active in 
WTO dispute settlement ha d received an Appellate Body report with which it di sagree d, sometimes 
strongly. The report  at issue at the present meeting  was such a report for China, at least with respect 
to the public body issue. Where the United  States d id appear to have a monopoly was in thinking 
that an adverse Appellate Body report  mean t that the Appellate Body ha d somehow exceeded its 
authority under the DSU. China did not believe that was the case . China believe d that Members 
should work together to ensure that this vitally important system kep t working. As for the specific 
disput e at issue , the recommendations and rulings that the DSB  would adopt at the present meeting  
made clear that the USDOC should cease its practice of countervailing alleged "input subsidies " in 
investigations of Chinese products. These countervailing duty det erminations were, at a minimum, 
based on unlawful approaches to the evaluation of benefit and specificity. Once these errors were 
corrected, there was no basis in law or fact to conclude that the manufacturers of the products under 
investigation  had receiv ed inputs for less than adequate remuneration pursuant to a subsidy 
programme that was limited to certain enterprises. While the recommendations and rulings that the 
DSB would adopt at the present meeting  relate d only to the specific countervailing duty 
investigations at issue, China call ed upon the United  States to reform its countervailing duty 
practices more generally to conform to these rulings, with respect to investigations of both Chinese 
products and those of other Members. The USDOC 's abuse of Article 14(d)  of the SCM Agreement , 
in particular, had gone on for far too long. Especially at a time when the resources of the DS  
mechanism  were under strain, Members should not be forced to keep returning to the DSB to ensure 
that the United States adher ed to its commitments under the SCM Agreement. China trust ed that 
the United States would take this consideration into account when evaluating how it would bring 
itself into compliance with these recommendations and rulings.  
9.10.   The representative of  the Unite d States  said that t his proceeding had involved important 
questions concerning the types of analysis that the Subsidies Agreement6 require d for the imposition 
of countervailing duties in order to address injury caused by subsidized imports.  In the original  
proceeding, the Appellate Body had found that the US Department of Commerce (Commerce) had 
not adequately explained its countervailing duty determinations in certain respects.  The 
United  States strongly criticized that Appellate Body report on two grounds .7 First, because the 
Appellate Body report had adopted an approach suggesting that WTO adjudicators were to conduct 
independent  investigations and apply new legal standards, regardless of what a party had actually  
argue d before  the panel.  Second, because the Appellate Body had found that an administering 
authority need ed to examine prices from State -Owned Enterprises (SOEs) for the purpose of 
determining market benchmarks, rather than looking primarily to private  prices from arm 's-length 
transactions .  
9.11.   Despite these criticisms, to implement the DSB 's recommendations, Commerce had made 
revised determinations, adding detailed analysis that the DSB had found lacking in the original 
determinations.  Under any fair reading of the Commerce determ inations, the Subsidies Agreement, 
and the DSB recommendations in this dispute, the United States had brought the challenged 
measures into compliance with WTO rules.  Regrettably, the compliance Panel and two of three 
persons on appeal had continued to find  fault with certain aspects of Commerce 's determinations.  
The three issues on appeal had involved the compliance Panel 's findings on ( i) public body, 
(ii) third-country benchmarks and market distortion, and ( iii) de facto  specificity.  On the issue of 
public body, although the appellate report recognize d that Commerce ha d proved through an 
exhaustive analysis that China use d SOEs to subsidize and distort its economy, the report ha d 
repeated an unclear and inaccurate statement of the criteria for determining whether an entity was 
a public body.  Rather than clarify how that approach was mistaken, the appellate report continue d 
to endorse an approach that was nowhere reflected in the text of the Subsidies Agreement.  The 
result was to significantly limit the abil ity of governments to effectively combat unfairly subsidized 
imports.  On the issue of out -of-country benchmarks and market distortion, the appellate report had 
found that, notwithstanding that China use d SOEs to subsidize and distort its economy, Commerce 
had to  use distorted Chinese prices to measure subsidies, unless Commerce provide d even more 
analysis than the hundreds of pages in these investigations.  This conclusion ignore d the findings of 
the World Bank, OECD working papers, economic surveys, and oth er objective evidence, all cited by 
Commerce in the determinations at issue.  On the issue of de facto  specificity, the report had 
                                                
6 Agreement on Subsidies and Countervailing Measures ("Subsidies Agreement").  
7 See US Statement at 26 January 2015, Meeting of WTO Dispute Settlement Body 
(https://geneva.usmission.gov/wp -content/uploads/sites/290/Jan 16.DSB_.Stmt_.as -delivered.Fin_.Public.pdf).  WT/DSB/M/433  
 
- 20 - 
 
  proceeded to find that evidence of a "systematic series of actions " was required and had agreed with 
the compliance Panel that Commerce had not adequately explained the "systematic " nature of the 
subsidies at issue.  Yet none of these so -called requirements was reflected in the Subsidies 
Agreement.  On each of these three issues, the dissent had strongly criticized the findings as, among 
other things, reflecting a fundamental misunderstanding of the Subsidies Agreement, exceeding the 
mandate of the Appellate Body to review issues of law covered in the panel report, and articulating 
an incoherent legal standard that was not in accordance with the ordinary principles of treaty 
interpretation.  Through the interpretations applied in this proceeding, based primarily on erroneous 
approaches by the Appellate Body in past reports, the WTO dispute settleme nt system was 
weakening the ability of WTO Members to use WTO tools to discipline injurious subsidies.  The 
Subsidies Agreement was not meant to provide cover for, and render untouchable, one Member 's 
policy of providing massive subsidies to its industries through a complex web of laws, regulations, 
policies, and industrial plans.  Finding that the kinds of subsidies at issue in this dispute could not  be 
addressed using existing WTO remedies, such as countervailing duties, call ed into question the 
usefulness of the WTO to help WTO Members address the most urgent economic problems in today’s  
world economy.  In its statement  under this Agenda item , the United  States would  address specific 
aspects of the findings of the appellate report that were erroneous and und ermine d the interests of 
all WTO Members in a fair -trading system.  These serious substantive concerns include d erroneous 
interpretations of "public body " and out -of-country benchmark, diminishing US rights and adding to 
US obligations, engaging in fact -finding, and treating prior reports as "precedent ". 
9.12.   First, w ith respect to the issue of public body, the United States said that it  was pleased that 
the compliance Panel and the appeal had decisively rejected China 's proposed interpretation.  China 
had argued that an investigating authority  had, in all cases, to establish a "clear logical connection " 
between an identified "government function " and the conduct alleged to constitute a financial 
contribution.8 The compliance Panel had rejected China 's contention and found that Article 1.1(a)(1) 
of the Subsidies Agreement "does not prescribe a 'connection ' of a particular degree or nature that 
must necessarily be established between an identified government function and a financial 
contribution ".9 The appellate report had agreed and found that "the relevant inquiry hinges on the 
entity ", the "core characteristics " of the entity, and the entity 's "relationship with the government ".10 
While it had been  correct to reject the interpretation that China had proposed on appeal, the 
approach of the so -called "majority " to the interpretation of the term "public body " continue d to be 
deeply problematic.  As the dissenting member had emphasized, "the majority has repeated an 
unclear and inaccurate statement of the criteria for determining whether an entity is a public body, 
and [the dissenting member] disagree[d] with the majority 's implication that a clearer arti culation 
of the criteria is neither warranted nor necessary ".11 The dissent had continued that "the continuing 
lack of clarity as to what is a 'public body ' represents an undue emphasis on 'precedent ', which has 
locked in a flawed interpretation that has gr own more confusing with each iteration, as litigants and 
Appellate Body divisions repeated the original flaw while trying to navigate around it ".12 The "original 
mistake ", as the dissent had put it,13 was the Appellate Body 's attempt, in the "US – Anti-Dumping 
and Countervailing Duties ( China )" dispute (DS379), to define the term "public body " as "an entity 
that possesses, exercises or is vested with governmental authority ", including because the entity 
had "the effective power to regulate, control or su pervise individuals, or otherwise restrain their 
conduct, through the exercise of lawful authority ".14 Under the Appellate Body 's interpretation, even 
where a government own ed or control led an entity, that would not have been sufficient to hold the 
governme nt responsible for any injurious subsidies the entity provide d. The Appellate Body 's 
"governmental authority " test significantly limit ed the ability of governments to effectively combat 
unfairly subsidized imports.  The Appellate Body 's approach was nowhere  reflected in the text of the 
Subsidies Agreement.  If an entity ha d no regulatory or supervisory authority, but was nonetheless 
able to be controlled by the government – making any transfer of economic resources by that entity 
a conveyance of the governmen t's own resources – it would have made no sense to conclude that 
this transfer of public resources was not a financial contribution under Article 1.1(a)(1).  On the other 
hand, if an entity ha d the power to "regulate " individuals or "otherwise restrain their conduct ", but 
not the power to provide financial contributions of government resources, its regulatory powers were 
                                                
8 Appellate report, para. 5.90.  
9 "US – Countervailing Measures" (China) (Article 21.5 – US) (Panel), para. 7.28.  
10 Appellate report, para. 5.100.  
11 Appellate report, para. 5.243 (separate opinion of one division member).  
12 Appellate report, para. 5.244 (separate opinion of one division member).  
13 Appellate report, para. 5.245 (separate opinion of one division member).  
14 "US – Anti-Dumping and Countervailing Duties" (China) (AB), para. 290 (citing Canada – Dairy (AB), 
para. 97).  WT/DSB/M/433  
 
- 21 - 
 
  not relevant to the Subsidies Agreement.  The Appellate Body 's interpretation , therefore , did not 
reflect the structure of eith er Article 1.1(a)(1) or of the Subsidies Agreement.  The failure of the 
Appellate Body 's interpretation to capture a potentially vast number of government -controlled 
entities undermine d the disciplines of the Subsidies Agreement.  The Appellate Body 's "original 
mistake "15 also ha d led to no end of confusion for WTO Members and panels .  
9.13.   The United States said that f or its part, China had advocated throughout this dispute for three 
different incorrect interpretations of the term "public body ", all of which China  had argued were 
consistent with the Appellate Body 's prior findings.  Before the original Panel, China had argued that 
"a public body  … must itself possess the authority to 'regulate, control, supervise or restrain ' the 
conduct of others ".16 The original Pa nel had rejected China 's proposed interpretation.17 The Appellate 
Body had rejected that interpretation as well in  the "US – Carbon Steel ( India)" dispute (DS436) .18 
Early in this compliance Panel proceeding, China  had argued that an entity could  be deemed a "public 
body" only when the "entity alleged to be providing a financial contribution has been vested with 
governmental authority to carry out governmental functions, and is exercising that authority to 
perform those  functions, when it engages in the conduct enumerated in Article  1.1(a)(1) ".19 The 
United States had observed, as had certain of the third parties, that an implication of China 's 
proposed interpretation was that the "governmental function " and the conduct u nder 
Article  1.1(a)(1) had to  be the same, but such an interpretation was not supported by the Subsidies 
Agreement or findings in prior reports.20 China had abandoned that proposed interpretation.  Late in 
the compliance Panel proceeding, and on appeal, Chin a had shifted its position again, arguing that 
Article  1.1(a)(1) require d that there be "a 'clear logical connection '" between  "the 'government 
function ' identified by the investigating authority " and the "conduct alleged to constitute a financial 
contribu tion under Article 1.1(a)(1) ".21 China had insisted before the compliance Panel and on appeal 
that it "[did] not mean that the 'government function ' and the conduct at issue under 
Article  1.1(a)(1) must be identical ".22 But China had continued throughout to make statements 
demonstrating that China actually h eld this incorrect view.23 As explained earlier , the compliance 
Panel and the appeal had come  to the correct conclusion, and had rightly rejected China 's proposed 
interpretations.  It was evide nt, though, that WTO Members and panelists remain ed confused by 
interpretive findings in prior Appellate Body reports concerning the meaning of the term "public 
body". As noted, China ha d engaged in various misguided efforts to further misinterpret the ter m 
"public body ". And the Panel in the "US – Pipe and Tube Products  (Turkey)"  dispute (DS523), in its 
report circulated to Members on 18 December 2018,  had misinterpret ed the term "public body " on 
the basis of past reports, finding, inter alia , that the ability of the government to intervene in an 
entity 's critical operations and key decisions was not relevant to a public body determination; that 
Panel had required  evidence that the government actually had exercised  that control.24 Such a 
requirement was not supported by prior Appellate Body findings, and conflate d the analysis of 
entrustment or direction of a private body with a public body analysis.  The United States ha d 
appealed that Panel's findings .  
9.14.   The United States had explained during the oral hearing in this appeal that, because of prior 
Appellate Body findings, clarification was sorely needed.  Such clarification could  be found by 
returning to the text of the Subsidies Agreement itself.  Article 1.1(a)(1) of the Subsidi es Agreement 
concern ed whether there was a "financial contribution " by a government or any public body.  The 
broad language used and the multiple methods of conveying value described in Article 1.1(a)(1) 
                                                
15 Appellate report, para. 5.245 (separate opinion  of one division member).  
16 "US – Countervailing Measures" (Panel), para. 7.35 (summarizing the main arguments of China).  
17 See "US – Countervailing Measures" (China) (Panel), para. 7.67.  
18 See "US – Carbon Steel" (India) (AB), para. 4.17.  
19 First Written Submission of China (4 Janu ary 2017) ("China's First Written Submission"), para. 79 
(italics in original).  
20 See, e.g., First Written Submission of the United States of America (6 February 2017) ("US First 
Written Submission"), paras. 29 -30; Third Party Written Submission by the Eur opean Union 
(13 February  2017), para. 11; Third Party Submission of Japan (13 February 2017), para. 3; Third Party Oral 
Statement of Australia (11  May 2017), para. 6; Responses of Canada to Questions to the Third Parties from the 
Panel in Connection with t he Substantive Meeting (31 May 2017), para. 4.  
21 China's Other Appellant Submission, para. 30. See also Answers of the People's Republic of China to 
Questions from the Panel (31 May 2017) ("China's Responses to Panel Questions"), para. 4.  
22 China's Respons es to Panel Questions, para. 4. See also US – Countervailing Measures (China) 
(Article  21.5 – US) (Panel), para. 7.27; China's Other Appellant Submission, footnote 15.  
23 See US Appellee Submission, para. 98.  
24 "US – Pipe and Tube Products" (Turkey) (Panel) , para. 7.42. On 30 January 2019, the United States 
appealed the findings of the panel in US – Pipe and Tube Products" (Turkey) (Panel). WT/DS523/5.  WT/DSB/M/433  
 
- 22 - 
 
  reveal ed an intention to capture within the meaning o f "financial contribution " a wide array of 
transfers of value.  That is, the purpose of the financial contribution analysis was to determine 
whether a transfer of value had been  made and could  be attributed to the government.  As explained 
in an earlier Appe llate Body report, Article 1.1(a)(1)  "define s and identifie s the governmental 
conduct that constitute s a financial contribution.  It does so both by listing the relevant conduct, and 
by identifying  certain entities and the circumstances in which the conduct  of those entities will be 
considered to be conduct of , and therefore be attributed to, the relevant WTO Member ".25 If the 
entity was "a government or any public body ", and its conduct fell within the scope of 
subparagraphs  (i)-(iii) or the first clause of subparagraph (iv), there was a financial contribution.26 
The use of distinct terms in Article 1.1(a)(1) to describe the relevant entities – "a government " and 
"any public body " – suggest ed that these terms had distinct meanings.27 That both entities were 
referred to collectively as "government " and were capable of making a "financial contribution " 
suggest ed that the core attribute they share d was the ability to convey the economic resources of 
the public.  After all, control over and  authority to dispose of the public 's economic resources was a 
core function of government in every WTO Member.  The context supplied by the term "financial 
contribution " was a further indication of the common concept between "government " and "public 
body". The list of actions described in the subparagraphs of Article 1.1(a)(1) demonstrate d that to 
make a "financial contribution " was to convey value.  Thus, if a "financial contribution " mean t to 
convey something of value, this suggest ed that the concept that the Subsidies Agreement term 
sought  to capture was the use by a government of its resources, or resources it control led, to convey 
value to economic actors.  If a government  undert ook the activities described in Article 1.1(a)(1), 
there was a conveyance of value from a Member to a recipient.  Equally, when there was an entity 
with resources the Member could  control, and the entity engage d in the same activities, there was 
a conveyance of value from a Member to a recipient.  Indeed, even under the Appellate Body 's 
approach of seeking an "exercise of governmental authority ", an entity that was able to be controlled 
by the government had "authority " over government resources – and thus should be found to be a 
"public body ". The United States had called upon the Appellate Body to clarify findings in prior 
Appellate Body reports regarding the interpretation of the term "public body ". Specifically, the 
United  States had requested that the Appellate Body confirm that a public body was any entity that 
a government meaningfully control led, such that when the entity convey ed economic resources, it 
was transferring the public 's resources.  Under such circumstances, the transfer of financ ial resources 
would constitute a "financial contribution " attributable to the government .  
9.15.   The United States said that r egrettably, the appeal ha d not clarified the Appellate Body 's 
interpretation28 but ha d stuck with an approach that ha d no basis in the te xt of the Subsidies 
Agreement.29 One Division member, though, "[i]n the hope of providing clearer guidance to future 
litigants and panels, and of encouraging them not to feel unduly constrained by past statements on 
this subject ", had offered a "restatement , which incorporates many of the concepts developed by 
the Appellate Body, while  … clarifying the criteria properly ".30 The "restatement " reads as follow s: 
"Whether an entity was a public body must be determined on a case -by-case basis with due regard 
being had for the characteristics  of the relevant entity, its relationship with the government, and the 
legal and economic environment prevailing in the country in which the entity o perate d. Just as no 
two governments were exactly alike, the precise contours and characteristics of a public body were 
bound to differ from entity to entity, State to State, and case to case.  An entity may be found to be 
a public body when the government h ad the ability to control that entity and/or its conduct to convey 
financial value.  There was no requirement for an investigating authority to determine in each case 
whether the investigated entity 'possesses, exercises or is vested with governmental autho rity'".31 
The United States encourage d all WTO Members – as well as future WTO adjudicators – to reflect 
on this "restatement ", which reflect ed the notion that a "public body " was an entity that can convey 
                                                
25 "US – Anti-Dumping and Countervailing Duties" (China) (AB), para. 284.  
26 "US – Anti-Dumping and Counterva iling Duties" (China) (AB), para. 284.  
27 See "US – Countervailing Duty Measures on Certain Products from China" (Panel), para. 7.68.  
28 Appellate report, para. 5.97 (views of two Division members; italics in original).  
29 See Cartland, Depayre, & Woznowski, Is Something Going Wrong in the WTO Dispute Settlement? 
Journal of World Trade 46, no. 5 (2012), at 1004 -05 ("Article 1 of the SCMA is  not about restraining behaviour 
of anyone; to the contrary, in some sense it is about describing what kinds of entities might provide 'gifts' to 
certain other entities , with disciplines where those gifts distort trade. It is simply not necessary for a par ticular 
entity to have regulatory power (to constrain others' behaviour) for that entity to be able to provide gifts that 
might distort trade, that is, to channel trade distorting government resources to particular recipients in an 
economy ".) (italics adde d). 
30 Appellate report, para. 5.248 (separate views of one Division member).  
31 Appellate report, para. 5.248 (separate views of one Division member).  WT/DSB/M/433  
 
- 23 - 
 
  the government 's financial resources – the very iss ue the Subsidies Agreement had been  intended 
to discipline .  
9.16.   Second , with regard to the issue of benchmarks, and turning to Article 14(d) of the Subsidies 
Agreement and the use of out -of-country benchmarks, "[t]his should have been a relatively simple 
issue for the Appellate Body to decide on appeal, for the Panel did not do its job in reviewing the 
USDOC record, and applied th e wrong legal standard ".32 But "[r]ather than reviewing the Panel 's 
findings to determine whether the Panel had erred in its interpre tation and application of 
Article  14(d), it seems  ... that the majority instead engaged in its own review of the USDOC 's 
determinations and, based on that review, upheld the Panel 's findings that were based on the wrong 
legal standard and reflected virtually no engagement with the USDOC 's determinations ".33 Instead 
of undertaking "an analysis of the reasoning provided by the Panel ",34 the majority "effectively acted 
as a panel in the first instance, and, having done that, articulat[ed] an incoherent legal standard ".35 
The strong language of this criticism c ame from the separate opinion of the dissent.  The separate 
opinion recognize d that it "does not make for easy reading ", but conclude d that it was nonetheless 
"important to explain at length the errors at both the Panel and majority levels on this issue so that 
this dissent may serve as guidance for future litigants and panels ".36 The United States agree d that 
it was important to take th e time to understand and reflect upon these errors.  The United States, 
too, recognize d that it would be easier to simply accept the conclusions of the appellate report.  But 
it was precisely that kind of uncritical and unquestioning approach, coupled with r eliance on certain 
words in past Appellate Body reports, that had led the compliance Panel to apply the wrong legal 
interpretation in this dispute.  The effectiveness of WTO subsidies disciplines would  be seriously 
undermined if this erroneous approach to A rticle 14(d) was applied in future disputes.  The 
United  States said that the ability to use out -of-country benchmarks when prices were distorted in 
the country where the subsidy was provided was critical to the proper functioning of the agreed 
disciplines on subsidies.  This was because Article 14 contemplate d market -determined prices as the 
appropriate benchmark for measuring the adequacy of remuneration.  Prior reports had consistently 
reach ed the same conclusion that, properly interpreted, Article 14(d) re ferred to market -determined 
prices and permit ted out-of-country prices to be used as a benchmark where market -determined 
prices were not found in the country of provision.  This approach comport ed with the references to a 
"market " in the text of Article 14 and ensure d that any benchmark used to measure the adequacy 
of remuneration reflect ed a market price resulting from arm 's-length transactions between 
independent buyers and sellers.  And indeed, as an initial matter, the complianc e Panel had first 
considered and correctly rejected China 's argument that out -of-country benchmarks could only be 
used if domestic prices had been  effectively determined by the government.37 The compliance Panel 
report, like the appellate report, had correc tly found that Article 14(d) did not support such an 
interpretation – and the United States  noted there was no dissent on that point.38 However, the 
compliance Panel then proceeded to find that the USDOC had failed to "explain how government 
intervention in  the market resulted in domestic prices for the inputs at issue deviating from a 
market -determined price ".39 The compliance Panel had never questioned the extensive evidence the 
USDOC had relied on, but rather faulted the USDOC because it had not rel ied upon a quantitative  
price analysis.  By limiting itself to such an approach, the compliance Panel had set aside, without 
examining, the USDOC 's comprehensive analysis of the evidence that these prices in China could 
not be considered market -determined.  The dis sent in the appellate report explain ed that: "[T]he 
USDOC 's analysis led it to conclude that 'the prices of steel produced by China 's SIEs in the domestic 
market cannot be considered to be 'market -determined ' for purposes of a benchmark analysis under 
Article 14(d) of the Subsidies Agreement '"; "Similarly, the USDOC found that 'the entire structure of 
the steel market is distorted by long -standing, systemic and pervasive government intervention, 
which so dimin ishes the impact of market signals that, based on the records in these proceedings, 
private prices  cannot be considered market based or usable as potential benchmarks '"; "T he 
                                                
32 Appellate report, para. 5.268.  
33 Appellate report, para. 5.256.  
34 Appellate report, para. 5.256.  
35 Appel late report, para. 5.268.  
36 Appellate report, para. 5.269.  
37 "US – Countervailing Measures" (Article 21.5 – China ) (Panel) , para. 7.174.  
38 See "US – Countervailing Measures" (Article 21.5 – China ) (Panel) , para. 7.174; appellate report, 
para. 5.148; see also 5.249 ("I concur with the majority in rejecting China's interpretation of Article 14(d) of 
the Subsidies Agreement, including China's claim that circumstances justifying recourse to out -of-country 
prices are limited to those in which the government 'e ffectively determines' the price at which a good is sold".).  
39 "US – Countervailing Measures" (Article 21.5 – China ) (Panel), paras. 7.204 -206; see id. at 
para. 7.223.  WT/DSB/M/433  
 
- 24 - 
 
  emphasis of the USDOC 's analysis in the Benchmark Memorandum was on the extent to  which 
China 's SIEs and private actors in the steel sector are insulated from market forces and not 
responsive to market pressures and disciplines, i.e. , on a qualitative assessment of the nature and 
effects of the various government interventions in the s teel market "; "T hese government 
interventions, taken together, are at the very least capable of significantly hampering competition 
in the market and thereby distorting firms ' decision -making process with regard to prices.  This 
conclusion is in line with t he understanding that government interventions that do not impact prices 
directly may distort market conditions to such an extent that prices can no longer be considered as 
market -determined "; "Therefore, only a meaningful examination by the Panel of the U SDOC 's 
analysis, reasoning, and underlying evidence could allow for a conclusion as to whether or not the 
USDOC provided in this case a sufficient explanation for its decision to have recourse to 
out-of-country prices. Yet, the Panel did not carry out any such review of the USDOC 's analysis ".40 
9.17.   As the United States had explained during the appeal, "[i]t appears that the compliance Panel 
understood its approach to be based on the approach that the Appellate Body has articulated, 
particularly in US – Carbon St eel (India) . However  ... the compliance Panel misconstrued the 
Appellate Body 's approach in that report ".41 In doing so, the compliance Panel had examined the 
USDOC 's determinations by looking only for a single kind of price analysis, specifically, one that  
would have demonstrate d the "deviat[ion] " from "in-country prices " and "a market -determined 
price".42 Effectively, the compliance Panel had considered that the only way to show whether the 
price was a valid benchmark price was to compare it to a valid benchmark price. Of course, where 
there were no valid benchmark prices, that approach ma de no sense.  And such a nonsensical 
interpretation of Article 14(d) could not  be the correct interpretation.  Yet the compliance Panel 
believed  it had been  following what the Appellate Body had said in prior reports.  The United  States 
had highlighted this misapprehension in the appeal and had explained that "[t]he compliance Panel 's 
confusion suggests  ... that the Appellate Body should take this opportunity to clarify its articulation 
of the proper approach under Article  14(d) and, if necessary, modify that approach " to ensure that 
panels could  apply it in a manner that reflect ed the correct interpretation of that provision.43 Yet 
instead of clarif ying the matter, the so -called "majority " had committed the same error as the 
compliance Panel.  Both findings purport ed not to require a quantitative price analysis, but in effect 
both require d exactly that. The dissent set out how the compliance Panel and  the majority had erred 
by "effectively reading Article 14(d) as imposing an obligation on investigating authorities to always 
justify recourse to out -of-country prices through a quantitative analysis of in -country prices 
themselves, regardless of whether those prices have already been found to be distorted, including 
in cases where they have not even been placed on the record ".44 It was all the more troubling that 
the compliance Panel and the majority had " professed " to recognize that the type of benchmark 
analysis an investigating authority could  conduct would  vary depending on the circumstances of the 
case and the characteristics of th e relevant market .45  
9.18.   The United States said that the dissent explain ed that: "The majority said it accepted that 
different methods – including a qualitative analysis – may serve as a basis for a domestic authority 
to explain how government intervention res ults in distortion of in -country prices, but in fact, the 
majority rejected the USDOC 's extensive qualitative analysis and wrote an opinion that, in my view, 
can only be read as requiring a quantitative analysis in all cases involving resort to out -of-country 
prices ".46 The dissent, at paragraph 5.252, illustrate d how both the compliance Panel and the 
majority had dismissed the "extensive qualitative analysis " as inadequate while they had never 
engaged with or questioned the validity of the evidence.  "Here i s what the USDOC did, which the 
Panel dismissed in three sentences and without any objection from the majority . In its Benchmark 
Memorandum, the USDOC assessed a number of factors relating to the Government of the People 's 
Republic of China 's (GOC 's) inter vention with state -invested enterprises (SIEs) in general, and in 
China 's steel sector specifically . In particular, the USDOC examined: (i) the involvement of the GOC 
in the functioning of China 's SIEs; (ii) detailed industrial plans directing ministries t o reduce the 
number of firms, and to increase the scale of production; (iii) government control exerted over 
appointments to the board of directors and corporate positions; (iv) evidence regarding controlled 
mergers and acquisitions; and (v) bankruptcy pre vention and other indicia of government 
                                                
40 Appellate report, para. 5.255 (italics in original) (citations omitted).  
41 See US Appe llant Submission, para. 81.  
42 See " US – Countervailing Measures" (Article 21.5 – China ) (Panel), para. 7.204.  
43 See US Appellant Submission, para. 81.  
44 Appellate report, para. 5.250.  
45 See Appellate report, para. 5.253.  
46 Appellate report, para. 5.251.  WT/DSB/M/433  
 
- 25 - 
 
  intervention with the functioning of the market . In assessing the functioning of SIEs in the steel 
sector in particular, the USDOC pointed to the sector 's place as a 'pillar' industry in which the state 
retains 'some what strong influence '; evidence of increasing excess capacity; export restraints; 
"five-year plans " detailing favoured and unfavoured production scales, investments, technologies, 
products, and production locations; strict control over investments; contro l over SIEs ' appointment 
processes; hindered bankruptcy of large SIEs; and preferential access to capital, land, and energy ". 
With respect to the prices of private steel producers in China, the USDOC  examined a number of 
factors, including the SIEs ' significant market share, the presence of many SIE steel producers 
shielded from competitive market forces, export restraints on steel input products, restrictions on 
foreign investment, and other factors . "In addition, in the Supporting Benchmark Memorandum, the 
USDOC referred to the inadequacy of questionnaire responses leading to an absence of 
representative price data, and a need to rely, in part, on facts available with respect to the 
input-specific ma rket analysis of the three steel inputs . In the Final Benchmark Determination, the 
USDOC additionally explained why it could not carry out a price alignment analysis to further support 
its explanation that private steel input prices in the underlying proce edings were distorted . Finally, 
with respect to the Solar Panels investigation and in light of the GOC 's failure to respond to the 
USDOC 's request for information, the USDOC relied entirely on facts available . The Benchmark 
Memorandum and Supporting Benchm ark Memorandum, together with the underlying evidence in 
support of the USDOC 's conclusions, ran to hundreds of pages ".47 
9.19.   The United States said that the  dissent had explained further that "somehow, the Panel 
discarded the entire reasoning and supporting ev idence in the Benchmark Memorandum and 
Supporting Benchmark Memorandum in a single paragraph, characterizing the USDOC 's 
determinations as 'not even [an] attempt ' to provide an explanation as to why in -country steel prices 
are not market -determined. And th e majority, writing more extensively, upheld the Panel ".48 The 
dissent was right to be alarmed and perplexed at this outcome.49 For example, with respect to the 
Solar Panels  determination, the dissent state d: "Inexplicably, the majority upheld this finding  .... I 
see no basis whatsoever in Article 14(d) for this approach, nor do I agree with the manner in which 
the majority reviewed the Panel 's analysis . ... Given that the Panel did not even begin  to examine 
the substance of the evidence  ... it is unclear on what basis the majority upheld the Panel 's 
conclusion, or what the majority considered the USDOC was required to do ".50 It was also important 
to note, however, that the dissent did much more than simply disagree with the conclusions of the 
Panel and the maj ority.  In fact, the dissent took on the majority 's analysis at every point along the 
way to the majority 's erroneous conclusion.51 And the dissent show ed how the majority had erred 
in each and every one of those points .  
9.20.   The United  States said that it appreciate d the diligent approach that had been  undertaken in 
the dissent and regret ted that the United States  could  only summarize three main points in this 
meeting.  First, the USDOC 's analysis might  have been qualitative, but it expressly st ated that it had 
                                                
47 Appellate report, para. 5.252 (citations omitted).  
48 Appellate report, para. 5.253.  
49 See Appellate report, para. 5.254 ("In finding that the USDOC 'failed to explain how government 
intervention in the market resulted in domestic prices for the inputs at i ssue deviating from a 
market -determined price' without any assessment of the USDOC's arguments and evidence, the Panel in effect 
faulted the USDOC for not having further analysed in -country prices, even where it had already found those 
prices to have been distorted. Why that should have been required in this case is not clear. Provided that it has 
sufficiently explained why it considers the respective government interventions to have distorted domestic 
prices, I do not see why the USDOC should have been req uired to rely on or further analyse such in -country 
prices in the context of a benchmarking analysis by, for example, comparing in -country prices with a 
hypothetical market -determined benchmark and finding the existence of a deviation. Indeed, such prices may 
reflect the very same government interventions that gave rise to the subsidy the USDOC sought to countervail. 
The Panel does not appear to have recognized this in its review of the USDOC's determinations. Nor, 
regrettably, have my colleagues. In any ev ent, the result is that the Panel considered the USDOC's analysis 
and reasoning regarding various types of government interventions and policies affecting prices to be a priori 
insufficient to establish price distortion".).  
50 Appellate report, para. 5.259 (italics added).  
51 See, e.g., Appellate report, para. 5.263 ("Thus, instead of being 'largely ignored as the Panel 
asserted, and the majority appears to have implied, in -country prices and the Ordover Report were discussed 
by the USDOC, but their relevance  was rejected. This was not only because their underlying rationale was 
different from that of the USDOC, but also because the evidence therein was not particularly probative for, and 
did not cast doubt on, its own analysis in the Benchmark Memorandum".).  WT/DSB/M/433  
 
- 26 - 
 
  been focused on prices  of SIEs and private prices .52 Second, the USDOC 's analysis had, in fact, 
consider ed the specific input markets.53 Third, the compliance Panel and the majority had applied 
the standard in an impossible way – a way which  "suggests that, in the Panel 's view, the USDOC 's 
approach would never  sufficiently justify recourse to out -of-country prices, independently of the 
evidence before it ".54 The dissent further explain ed that the compliance Panel 's "analysis of whether 
the USD OC provided a reasoned and adequate explanation for its conclusion that in -country prices 
are not market -determined was divorced from its discussion of the record evidence " and, therefore, 
could not  be considered to reflect the correct interpretation of Article  14(d).55 This result diminishe d 
the rights of WTO Members to counteract subsidies that were resulting in harms to their workers 
and businesses and impose d additional obligations that were not f ound in the text of the 
Agreement.56 Ultimately, the compliance Panel in this dispute had sought to avoid error by simply 
reciting what prior appellate reports had said about benchmarks.  And, ultimately, the compliance 
Panel had been  successful in avoiding reversal by taking this approach.  But in doing so the 
compliance Panel had failed to interpret the text of Article 14(d) and to consider whether it had been  
applying an interpretation that made any sense under the facts of this case. And it was that kind o f 
approach that led panels to confusion and error when they simply attempt ed to apply what the 
Appellate Body ha d said in prior reports as if those words constitute d "precedent " that had to  be 
followed absent "cogent reasons ".57 As this dispute illustrate d, taking this approach had led the 
compliance Panel to forego engaging with the question at issue and thus had appeared to encourage 
the Appellate Body to step in the shoes of the Panel at the appellate stage and, "[i]n this way  ... 
assume[] the role of a p anel in drawing conclusions from its own analysis of the record evidence, 
rather than through an analysis of reasoning provided by the Panel ".58 As the dissent point ed out, 
"that would appear to exceed the Appellate Body 's mandate ".59 
9.21.   Third,  turning to the issue of specificity under Article 2.1(c) of the Subsidies Agreement, the 
United  States said that it was  concerned that the findings of the compliance Panel and the so -called 
majority evince d a similarly problematic approach.  The United Sta tes had appealed the compliance 
Panel 's finding that the USDOC had needed more evidence of a "plan or scheme " to establish that 
the subsidies at issue had been  provided pursuant to a subsidy "program me". The compliance Panel 
had erred in its assessment of the "existence of a subsidy programme " by interpreting "programme " 
in a manner that was not consistent with the ordinary meaning of the term in Article 2.1 or the 
object and purpose of the Subsidies Agreement.  Specifically, the compliance Panel had erred b y 
interpreting the obligation under Article 2.1(c) as a requirement to demonstrate that subsidies had 
been "systematically " provided pursuant to an overarching "subsidy programme ".60 The majority 
had explained that it had disagreed with the premise of the US claim on appeal, i.e., that the 
compliance Panel had required a demonstration of "systematic subsidization ".61 The majority state d 
that "[i]n our view, the Un ited States draws inferences fro m the Panel 's statement it references that 
                                                
52 See Appellate report, para. 55.256 ("Where did the majority get this, considering that the Panel did 
not engage in any such assessment and indeed provided no substantive analysis of the USDOC's reasoning and 
underlying evidence?").  
53 Appellate report, pa ra. 5.257 ("While the USDOC did not base, and indeed was not required to base, 
its analysis on input -specific prices, it appears, even from the Panel's description of the USDOC's analysis, that 
the USDOC did in fact make findings with regard to the specifi c steel markets at issue".).  
54 Appellate report, para. 5.258.  
55 Appellate report, para. 5.258 -259. 
56 Appellate report, para. 5.266 ("[T]he compliance Panel engaged in an] overly narrow application of 
the standard requiring the conduct of a price analysis as a condition for recourse to out -of-country prices. 
Despite the fact that the Panel rejected China' s assertion that the only situation that merits recourse to 
out-of-country prices is where the government is so predominant that it effectively determines the prices of the 
goods in question, it appears that the Panel was looking for a kind of price alignm ent analysis that requires a 
quantification of the impact of government intervention on in -country prices by establishing the extent to which 
they deviate from a market -determined benchmark. In endorsing the Panel's standard, the majority appears 
also to h ave required an analysis of in -country prices as a condition for recourse to an alternative benchmark, 
even in cases where in -country prices are not available on the record. In this way, the result of the majority's 
analysis contradicts its stated understa nding of Article 14(d) as allowing for different types of analysis and 
evidence for purposes of arriving at a proper benchmark, depending on the circumstances of the case".).  
57 See Appellate report, para. 5.244 ("I believe the continuing lack of clarity as  to what is a 'public body' 
represents an instance of undue emphasis on "precedent", which has locked in a flawed interpretation that has 
grown more confusing with each iteration, as litigants and Appellate Body divisions repeated the original flaw 
while t rying to navigate around it. That is what I believe the majority has done here".) (citations omitted).  
58 Appellate report, para. 5.256.  
59 Appellate report, para. 5.256.  
60 See US Appellant Submission, paras. 192 -195 (quoting Panel Report, para. 7.263).  
61 Appellate report, para. 5.233.  WT/DSB/M/433  
 
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  the Panel did not make ".62 Yet, later within the very same paragraph, the majority concede d, "[t]hat 
said, in establishing an unwritten subsidy programme, adequate evidence is required of a systematic  
series of actions ".63 In other words, the majority actually consider ed that evidence of systematic  
subsidization was required, even though no such obligation was found in the text of the Subsidies 
Agreement.  The United States agree d with the dissent that "the Panel and majority fundamentally 
misunderstand the role of Article  2.1 within the Subsidies Agreement, give the term 'subsidy 
programme ' a meaning that is not supported by the text and that is unreasonable, and ignore 
reasoning and analysis by the USDOC that was part of the case and should have been considered ".64 
The dis sent went further, warning Members that "[t]he Panel and majority decisions, would, I 
believe, if followed in the future, enable circumvention of the disciplines of the Subsidies Agreement 
and even discourage the transparent management of subsidies ".65 The United States urge d other 
Members to read closely the concerns that were expressed in the dissent on this issue.  The dissenting 
opinion expresse d grave concern with the approach taken by the majority, stating:  "I also consider 
that the majority 's decision upholding the Panel 's finding is wrong in several important respects and 
would, if followed, enable circumvention of the disciplines of the Subsidies Agreement and even 
discourage the transparent management of subsidies.  I believe such a result is not cont emplated 
under the Subsidies Agreement, was not intended by the Subsidies Agreement 's drafters, and is not 
in accordance with customary principles of treaty interpretation ".66 The United States share d these 
concerns.  Any other Member that consider ed subsidi es to be a major contributor to current tensions 
in the global trading system should be concerned as well.  It was difficult to view this appeal, and 
past Appellate Body reports on these issues, as anything other than a serious weakening of WTO 
subsidy disc iplines .  
9.22.   With regard to the status of the appellate report, t he United States said that it viewed the 
document before the DSB at the present meeting  as not a valid Appellate Body report and object ed 
to its adoption. The United States wishe d to raise two i mportant systemic concerns.  The first concern 
regard ed the service on this appeal of an ex -Appellate Body member whose term had expired on 
30 September  2018.67 The DSB  had taken no action to permit him to continue to serve as an 
Appellate Body member.  Therefore, he had not been an Appellate Body member on the date of 
circulation of this document.  As the United States ha d explained with respect to prior reports for 
appea ls on which an ex -Appellate Body member had served, under these circumstances, the 
appellate "report " had not been provided and circulated on behalf of three Appellate Body members, 
as required under Article 17.1  of the DSU .68 In fact, given that the two va lid Appellate Body members 
might  have voted in opposite ways on the issues of public body, benchmark, and specificity, there 
might  not even have been  a "majority " view in the document, only two separate opinions. With 
regard to the second systemic concern,  mandatory language in Article 17.5 of the DSU state s: "In 
no case shall the proceedings exceed 90 days ". And that provision specifically state d that "the 
proceedings " encompass ed "the date the Appellate Body circulates its report ". The Appellate Body 
had notified the DSB through a letter dated 26 June 2018, that it would not be able to complete its 
report within 60  days.  The letter had gone on to state that it would not be possible for the Appellate 
Body to circulate a report within the 90 -day time -frame r equired by Article 17.5.  And, in fact, 
446 days had passed between the date of the Notice of Appeal in this dispute and circulation of the 
document as a purported Appellate Body report.  As the document ha d not been issued by 
three  Appellate Body members an d had not been issued within 90 days, consistent with the 
requirements of Article 17 of the DSU, it was not an "Appellate Body report " under Article 17 and , 
therefore , it was not subject to the adoption procedures reflected in Article 17.14.  Rather, the DSB 
would have to consider its adoption subject to the positive consensus rule applicable to DSB 
decisions, pursuant to Article  2.4 of the DSU and WTO Agreement Article  IX:1, note  3.  
9.23.   In closing, the United States said that it was deeply troubl ing that China was using the 
WTO dispute settlement system to seek to evade the disciplines on subsidies that all WTO Members 
                                                
62 Appellate report, para. 5.233.  
63 Appellate report, para. 5.233 (underline added; italics in original).  
64 Appellate report, para. 5.270.  
65 Appellate report, para. 5.270.  
66 Appellate report, para. 5.280.  
67 Dispute Settlement Bo dy, Minutes of Meeting Held on 26 September 2014, Document 
WT/DSB/M/350, paras. 2.2 -2.3 ("[2.2] Therefore, he wished to propose that, at the present meeting, the DSB 
take a decision to appoint Mr. Servansing as a member of the Appellate Body for a four -year term starting on 
1 October 2014. [2.3.] The DSB so agreed".).  
68 Article 17.1 of the DSU ("The Appellate Body shall hear appeals from panel cases. It shall be 
composed of seven persons, three of whom shall serve on any one case".).  WT/DSB/M/433  
 
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  had agreed  to in the Subsidies Agreement.  While the United States ha d been the responding Member 
in several disputes China ha d brought, China ha d been – and continue d to be – the serial offender.  
The continuing and increasing role that the Chinese government took in managing the economy in 
China, including by providing massive subsidies that distort ed both China 's economy and the wor ld 
economy, was a fact widely known by observers, commentators, and WTO Members.  China 's 
assertion during the present  proceeding that the subsidies that Commerce had found to exist were 
"completely fictitious " was patently absurd.  In the section 129 procee dings to implement the original 
DSB recommendations, the U.S. Department of Commerce had explained its conclusions in 
preliminary and final determinations and supporting analysis memoranda that, altogether, span ned 
almost 150 pages.  Commerce 's determinations were supported by literally thousands of pages of 
evidence, which Commerce had discussed at length, and Commerce 's determinations were based on 
the totality of that evidence.  It was clear on the face of Commerce 's determinations that they were 
unbiased and objective, they present ed reasoned and adequate explanations for the conclusions that 
Commerce reached, and those conclusions were supported by ample – truly massive amounts of – 
evidence on the administrative record.  An unbiased and obje ctive investigating authority in any WTO 
Member could have reached the same conclusions.  The idea that what Commerce had done  in the 
section 129 determinations was not sufficient to meet the requirements of the Subsidies Agreement 
was, simply put, incredib le. The dissent was correct that, if followed, the approach of the compliance 
Panel and the appellate report would enable circumvention of the disciplines of the Subsidies 
Agreement, discourage the transparent management of subsidies, and that such a resul t was not 
contemplated under the Subsidies Agreement, had not been intended by the Subsidies Agreement 's 
drafters, and was not in accordance with customary principles of treaty interpretation.  The approach 
in the appellate report call ed into question the a bility of Members to use WTO tools to counteract 
subsidies provided by a Member like China that were damaging a Member 's workers and businesses.  
That was a very serious problem, with grave implications for the global trading system . 
9.24.   The representative of  China  said that,  with regard to the separate opinion, China noted that 
the United States had repeatedly mentioned and commended the separate dissenting opinion in this 
Appellate Body report. China respect ed the right of individual members of the Appellate Body to 
provide separate opinions. It was, however, the majority opinion that provide d the basis for the 
DSB's recommendations and rulings . To the extent that the United States was suggesting that future 
panels should follow the opinion of the dissenting member rather than the recommendations and 
rulings that Members would adopt at the present meeting , China did not see how this would have 
contribute d to the DSU 's goal of "providing security and predictabili ty to the multilateral trading 
system ". A critical function of the dispute settlement system was to "clarify " the provisions of the 
covered agreements "in accordance with customary rules of interpretation of public international 
law". When provisions of th e covered agreements had been "clarified " in this manner and such 
clarifications had been adopted by the DSB, those clarifications should govern future disputes absent 
cogent reasons.  
9.25.   With regard to the issue of public body, China said that the United Stat es had argued in  the 
"US – Carbon Steel (India) " dispute (DS436)  that an entity was a "public body " when the government 
had the ability to control that entity 's resources as its own. The Appellate Body had considered and 
rejected this interpretation. China  agree d with the United  States that the Appellate Body ha d overly 
complicated the interpretation of the term "public body ". The problem had begun in the "US – 
Anti-Dumping and Countervailing Duties (China)" dispute (DS379)  when the Appellate Body had 
invented the ambiguous concept of "meaningful control ". Not surprisingly, the United States had 
exploited this opening to try to enforce its position that government control of an entity was sufficient 
to conclude that the entit y was a "public body " – a position that the Appellate Body had rejected in 
that dispute . As a result of the report that was being considered for adoption  at the present meeting , 
Members had an interpretation of the term "public body " that bore no connectio n to the question of 
state attribution, which, in China 's view, was what the term "public body " must have been concern ed 
with. The Appellate Body had been right that a "public body " was an entity that "possesses, exercises 
or is vested with governmental au thority ", but wrong in its conclusion that the "governmental 
authority " with which an entity was vested need ed not bear any relationship to the conduct being 
attributed to the state. This made no sense. It did not make sense, for example, that a company 
vested with governmental authority to carry out certain police functions on its industrial properties 
was considered a "public body " when it engage d in its entirely ordinary business of selling the 
products it manufacture d. Yet that appear ed to be the consequence of the report that was being 
considered for  adoption at the present meeting . China believed that the proper interpretation of the 
term "public body " was nowhere near as complicated or contradictory as the Appellate Body ha d 
made it out to be. An entity was a "public body " when it was vested with governmental authority WT/DSB/M/433  
 
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  and exercise d that authority when engaged in the conduct that was being attr ibuted to the state. 
Full stop. This was the interpretation of the term "public body " that best comport ed with accepted 
principles of treaty interpretation, and that properly recognize d that the interpretation of the term 
"public body " was fundamentally a question of state attribution. Notwithstanding China 's concerns 
about the interpretation of the term "public body " articulated by the Appellate Body in the present 
report, China was prepared to adopt this report and move on. However, if the United States i ntend ed 
to keep advocating its understanding of the term "public body " in future dispute settlement 
proceedings, China would do the same. Because China 's understanding of this term was correct, and 
the US understanding of that matter was not. 
9.26.   With regard t o the non -existence of a subsidy, China noted that  the United States in its 
statement had suggested the so -called existence of the subsidy. However, the United States 
misapprehend ed the consequences of the reports that were being considered for  adopti on at the 
present meeting . As a result of the recommendations and rulings contained in these reports, there 
was no valid finding that the Government of China  had provided "input subsidie s" to manufacturers 
of the products under investigation. As everyone here was aware, a "subsidy " under the SCM 
Agreement was a financial contribution that confer red a benefit. Because the USDOC 's benefit 
determinations had been unlawful, there was no findi ng that the provision of inputs had given rise 
to a subsidy. The United States was, therefore , mistaken when it claim ed that the present reports 
acknowledge d that the Government of China had provided "input subsidies " to manufacturers of the 
products under  investigation. There was no such finding by the Panel or the Appellate Body. It was 
characteristic of the United States, however, to assume the conclusion of what it claim ed to be 
investigating. In its countervailing duty investigations of Chinese product s, the USDOC beg an with 
the conclusion that inputs were subsidized, and then ben t the law and the facts to fit that 
predetermined conclusion. That was what the USDOC had to stop doing as a result of the 
recommendations and rulings that w ere being considere d for adoption at the present meeting . 
9.27.   With regard to a so -called price distortion in China, China said that in its statement, the 
United  States had continued with its false accusations on a so-called price distortion in China. It was 
time for the United S tates to stop trafficking in ridiculous caricatures of the Chinese economy. 
According to the US distorted worldview, there was not a single market -determined price in China. 
The United States maintain ed this position notwithstanding the fact that the USDOC 's decision in 
2007 to begin applying countervailing duties to Chinese products had been premised on its own 
finding that "market forces now determine the prices of more than 90% of products traded in C hina". 
Notwithstanding this finding, the USDOC had not, to the best of China 's knowledge, identified a 
single market -determined price in a countervailing duty investigation of Chinese products in the 
12 years that ha d passed since the USDOC 's decision. Thi s was all a charade . The United  States 
knew perfectly well that market forces determine d the prices of industrial inputs in the Chinese 
economy. The problem for the USDOC was that these market -determined benchmark prices would 
not have given it the "input subsidies " that it was looking for . As the Panel and Appellate Body had 
correctly found, the USDOC had simply ignored undisputed evidence on the record that domestic 
Chinese prices for steel inputs had been determined by market forces. The USDOC had ignore d this 
undisputed evidence because it had not fit the USDOC 's predetermined conclusion that Chinese steel 
prices were "distorted ". As a result of the recommendations and rulings that were being considered 
for adoption at the present meeting , the USDOC could no longer operate on the basis of 
presumptions and preordained conclusions. Going forward, it had to base any decision to reject 
Chinese benchmark prices on hard evidence that those prices were "distorted " as a result of 
government intervention. The days  of "cookie -cutter " rationales for rejecting all Chinese prices were 
over. 
9.28.   With regard to the negative consensus rule for adopting Appellate Body reports, China said 
that the United States had suggested that the negative consensus rule could not be applied to this 
report since it had not been circulated within 90 days and one adj udicator had ceased to be an 
Appellate Body member when the report had been circulated. China disagree d. China wished to 
stress that the report before Members at the present meeting was an Appellate Body report which 
had to be adopted under the negative co nsensus rule set out in Article 17.14 of the DSU. 
Article  17.14 of the DSU was crystal clear that : "[a]n Appellate Body report shall be adopted by the 
DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus 
not to  adopt the Appellate Body report within 30 days following its circulation to the members ". At 
the present meeting, there was no consensus among Members not to adopt this Appellate Body 
report. Therefore, this Appellate Body report would be adopted in accor dance with Article 17.14 of WT/DSB/M/433  
 
- 30 - 
 
  the DSU. Any suggestion to derogate from the application of the negative consensus rule or to 
impose precondition to it was without legal merit.  
9.29.   The representative of  Australia  said that her country  noted the views expressed by the 
United States regarding the status of the Appellate Body report in this dispute. Australia confirm ed 
its view that the report would  be adopted at the present meeting  under the three stages  provided 
for by Article 17.14 of the DS U, specifically that the report would  be adopted by the DSB and 
unconditionally accepted by the parties to the dispute unless the DSB decide d by consensus 
otherwise. Australia  further underscore d the principle of binding adoption of panel and appellate 
body reports by negative consensus as fundamental to the assurance of security and predictability 
provided by the WTO dispute settlement system.  
9.30.   The representative of  the European Union  said that  the European Union was a third party in 
this dispute the import ance of which ha d been significant also for the European Union in relation to 
several of the matters at issue.  The European Union wished  to make several points related to the 
separate opinion expressed in the Appellate Body report. Pursuant to the DSU, an individual 
Appellate Body member was entitled to set out his or her views in a separate opinion. However, that 
opinion should also aspir e to being capable of being a correct decision of the matter at issue in the 
dispute at hand. In this respect, a calling into question of prior jurisprudence would have had to be 
combined with a separation between those aspects which the original dispute  had already settled in 
a binding manner and those not yet clarified at that stage. It should also have explained how the 
majority 's alleged errors relate d to any grounds of appeal actually raised by the parties. There was 
another observation which the Europ ean Union wished  to express in relation to the separate opinion, 
namely the accusation levelled at the majority of the Division of acting like a panel and of making 
factual findings. It appear ed to the European Union that the separate opinion itself made  a significant 
number of statements on facts, namely as to what findings the US Department of Commerce  had 
made or had not made . Be that as it may, the even more important point to make might  be that it 
was perfectly correct for the Appellate Body to review panel findings where they consist ed of legal 
evaluations of certain facts, in order to decide on the consistency of the measures at issue with the 
WTO Agreements.  With these important caveats, the European Union wished  to thank the Panel and 
the Appellate Body, including the member of the Division having expressed a separate opinion, for 
their work in this dispute. As had been stated, the DSU allow ed separate opinions by individual 
Appellate Body members on a division. Also, such an individual Appellate Body member was entitled 
to consider his or her individual opinion to constitute more correct and hence better guidance than 
the majority decision for  future panels and Appellate Body divisions. Likewise , the majority was 
entitled to consider its findings to be the correct, and hence better guidance. Future litigants or 
panels in other disputes could  rely on either in support of their arguments, but thi s did not change 
the fact that this Appellate Body report stood  for the legal interpretations as expressed by the 
majority and hence as expressed by the Appellate Body as a collegial body. There was a final 
important point which the European Union had to raise in relation to the separate opinion contained 
in this Appellate Body report. The Appellate Body was a standing and collegial adjudicative 
institution. This collegial character had not only been considered paramount by virtually everyone  
who had ever s erved on the Appellate Body and had spoke n to this aspect. It was also an aspect 
which the European Union ha d consistently considered important, including in the consideration of 
nominated candidates proposed for appointment to the Appellate Body.  The righ t of individual 
members to express separate opinions had to  be exercised with respect for the integrity of that 
collegial institution overall. Disagreements between individual members of a collegial adjudicative 
body were legitimate and normal, but it was also important that the institution as a whole was intact. 
Therefore, it appear ed more appropriate to express such disagreements, if chosen to do so in a 
separate opinion, in a sober and nuanced legal explanation of what was considered more accurate.  
9.31.   The European Union also wished  to comment on the US  statement ma de at the present 
meeting . Negative consensus was applicable to the adoption of the Appellate Body report, including 
the Panel report as modified by the Appellate Body report , in the present dispute.  Pursuant to 
Article  17.14 of the DSU, Appellate Body reports were adopted by the DSB and unconditionally 
accepted by the parties. The only circumstance in which this did not occur was if the DSB decide d 
by consensus not to adopt an Appellate Body report . The European Union did not join such a 
consensus at the present meeting  and, consequently, the Appellate Body report would  be adopted 
by the DSB. The Appellate Body report was adopted by the DSB and unconditionally accepted by the 
parties by "operation of law ", as the Appellate Body ha d confirmed in its report in the "US – 
Continued Suspension " dispute (DS320) , at paragraphs 310, 355 and 367; or "automatically ", as 
the Appellate Body ha d confirmed in its report in the "US – Large Civil Aircraft (2nd complaint) " WT/DSB/M/433  
 
- 31 - 
 
  dispute (DS353 ), at paragraphs 524, 531, 532 and 549. Neither the responding  party, nor any other 
WTO Member ha d the legal authority to prevent this from occurring  by any means. Whatever any 
Member  said, whatever any Member  did and whatever was recorded in the minutes of the DSB 
meeting was incapable as a matter of law of negating the observation that what was provided for in 
Article 17.14 of the DSU ha d occurred. With these remarks, the European Union wished  again to 
thank all involved in this dispute for the contribution they had made.  
9.32.   The representative of  Canada  said that Canada had participated as a third  party in this dispute 
because of its systemic interest in the appropriate application of the SCM Agreement concerning the 
test to determine what properly constitute d a "public body", the use of out -of-country benchmarks 
under Article 14(d), and the legal standard for measures implementing DSB recommendations to 
fall within a compliance panel 's terms o f reference. Canada  would  comment on each of these points 
in turn. First, in general, Canada was pleased with the Appellate Body 's findings rejecting China 's 
interpretation of the legal standard for a "public body " under the SCM Agreement, which would have  
rendered the term "public body " redundant, effectively making it equivalent to a private body 
entrusted or directed by the government. The Appellate Body ha d confirmed that public body 
determinations were made based on the core characteristics of an entity, not its conduct in granting 
an individual contribution. While this outcome was consistent with prior Appellate Body 
determinations, Canada nevertheless continue d to have concerns that this standard was unwieldly 
and impractical for investigating authorities to implement in practice. Second, Canada was also 
pleased with the Appellate Body 's clarification that the use of out -of-country benchmarks under 
Article 14(d) of the SCM Agreement could  only occur in "very limited " circumstances. The Appellate 
Body had properly found that investigating authorities could not  reject in -market prices on the basis 
of all government interventions, or any price distortion. Rather, it found that a reasonable and 
unbiased inve stigating authority had to  provide an adequate explanation based on positive record 
evidence of how a government intervention result ed in price distortion such that the in -market prices 
could  no longer be considered market determined. Third, Canada agree d with the Appellate Body 's 
finding that the measures at issue fell within the Panel's terms of reference due to their close nexus 
with the original measure, independent of the timing of the measure taken to comply. The exclusion 
of measures completed during  the compliance proceedings from the scope of those proceedings 
would  have frustrate d the objectives of the dispute settlement system. Canada was also pleased 
that the Appellate Body had affirmed the Panel 's finding that the interrelated effects of original, 
Section 129, administrative and sunset review determinations were sufficient for the subsequent 
reviews to be considered measures taken to comply. Additionally, Canada recognize d the separate 
opinion issued by one member of the Division in this dispute . Canada note d that while separate 
opinions could  play a healthy  role in the WTO dispute settlement system , as they did in many 
systems of adjudication, they must not be provided or construed so as to underm ine the objectives 
of that system, including providing security and predictability to the multilateral trading system. 
That objective entail ed that disputes pertaining to similar situations be resolved in the same way, 
absent cogent reasons. It was Canada 's view  that separate opinions could  contribute to a productive 
discussion on the different ways a particular claim could  be approached or thought of so as to 
broaden the Members ' understanding of the disciplines in various WTO Agreements. However, such 
a discussion could not  contribute to the system without a functioning Appellate Body to clarify the 
provisions of the covered agreements. As another point, Canada wished to reiterate  its view that 
the fact that an Appellate Body report ha d been circulated after 90 days did not modify its character 
as a valid AB report subject to the negative consensus rule for its adoption. Finally, Canada wished 
to thank the AB members and the Secretariat staff for their work  in this dispute.  
9.33.   The DSB took note of the statements and adopt ed the Appellate Body Report contained in 
WT/DS437/AB/RW and Add.1 and the Panel Report contained in WT/DS437/RW and Add.1, as upheld 
by the Appellate Body Report.  
9.34.   Following the adoption , the representative of  the United  States said that the United States 
had described serious substantive concerns, including erroneous interpretations of "public body ", 
out-of-country benchmark, and specificity; diminishing US rights and adding to US obligations; 
engaging in fact -finding; and treating prior reports as "precedent ". Given these concerns, the 
United  States did not endorse the findings set out in the document circulated as a purported 
Appellate Body report. Nor could  the United  States support an ex -Appellate Body member 's 
continuation of service without authorization by the DSB, or a failure to adhere to the dea dline in 
Article 17.5  of the DSU . Accordingly, the United  States reiterate d its view that the document before 
the DSB at the present meeting was  not a valid Appellate Body report, object ed to adoption of the 
document, and did not join a consensus to adopt it. WT/DSB/M/433  
 
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  9.35.   Prior to the consideration of item 10, the  Chairman  invited the representative of the 
European  Union to make a statement with regard to item 9. T he representative of  the 
European  Union  said that his delegation wished to make a statement that related to  item 9 of the 
Agenda of the present meeting. Under that Agenda item, t he DSB had adopted the Appellate Body 
Report  and the corresponding Panel Report in the "US – Countervailing Measures (China)" dispute 
(DS437) . Following the adoption of the Appellate Bo dy Report  by the DSB , the United States had 
made a certain statement. In response to that statement, the European Union wished  to remind 
Members  that the DSB had adopted the Appellate Body Report in that dispute . Therefore, subsequent 
adjudicators in th is same dispute, including arbitration panels, would  proceed on the basis that the 
Appellate Body Report ha d been adopted and unconditionally accepted by the parties. They would  
quantify nullification or impairment accordingly. They would  reject any attempt by the defending 
party to frustrate their work by asserting that, at the relevant DSB meeting, the defending party 
purported to "object " to the adoption of the Appellate Body Report.   
10  APPELLATE BODY APPOI NTMENTS: PROPOSAL BY  ANGOLA; ARG ENTINA; AUSTRALIA; 
BENIN; PLURINATIONAL  STATE OF BOLIVIA; B OTSWANA; BRAZIL; BUR KINA FASO; 
BURUNDI; CABO VERDE;  CAMEROON; CANADA; C ENTRAL AFRICAN REPUB LIC; CHAD; 
CHILE; CHINA; COLOMB IA; CONGO; COSTA RIC A; CÔTE D 'IVOIRE; CUBA; DEMOCR ATIC 
REPUBLIC OF CONGO; D JIBOUTI; DOMINICAN R EPUBLIC; ECUADOR; EG YPT; 
EL SALVADOR; ESWATINI; THE EUROPEAN UNION; GABON; THE GAMBIA; G HANA; 
GUATEMALA; GUINEA; G UINEA -BISSAU; HONDUR AS; HONG KONG, CHINA ; ICELAND; 
INDIA; INDONESIA; IS RAEL; KAZAKHSTAN; KE NYA; REPUBLIC OF KOR EA; LESOTHO ; 
LIECHTENSTEIN; MADAG ASCAR; MALAWI; MALI;  MAURITANIA; MAURITI US; MEXICO; 
MOROCCO; MOZAMBIQUE;  NAMIBIA; NEW ZEALAN D; NICARAGUA; NIGER;  NIGERIA; 
NORTH MACEDONIA; NOR WAY; PAKISTAN; PANAM A; PARAGUAY; PERU; Q ATAR; 
RUSSIAN  FEDERATION; RWANDA; SENEGAL; SEYCHELLE S; SIERRA LEONE; SIN GAPORE; 
SOUTH AFRICA; SWITZE RLAND; THE SEPARATE CUSTOMS TERRITORY OF  TAIWAN, 
PENGHU, KINMEN AND M ATSU; TANZANIA; TOGO ; TUNISIA; TURKEY; U GANDA; UKRAINE; 
URUGUAY; THE BOLIVAR IAN REPUBLIC OF VENE ZUELA; VIET NAM; ZAM BIA AND 
ZIMBABWE (WT/DS B/W/609/REV.13)  
10.1.   The Chairman  said that t his item was on the Agenda of the present  meeting at the request of 
Mexico, on behalf of a number of delegations. He drew attention to the proposal contained in 
document WT/DSB/W/609/Rev.13  and invited the representa tive of Mexico to speak.  
10.2.   The representative of Mexico , speaking on behalf of the co -sponsors of the proposal contained 
in document  WT/DSB/W/609/Rev.13 , said that the delegations in question  had agreed to submit the 
joint proposal dated 2 August 2019 to launch the AB selection processes. Her delegation , on behalf 
of these 114 Members, wished  to make the following statement . The increasing and considerable 
number of Members submitting this joint pr oposal, reflect ed a common concern with the current 
situation in the Appellate Body that was seriously affecting its functioning  and the overall dispute 
settlement system against the best interest of its Members. WTO Members had a responsibility to 
safegua rd and preserve the Appellate Body, the dispute settlement system and the multilateral 
trading system. Thus, it was the Members' duty to launch the AB selection processes, as set out in 
the joint proposal before the DSB  at the present meeting . This proposal sought  to: "(i) start 
six selection processes: one process to replace Mr. Ricardo Ramírez -Hernández, whose second term 
expired on 30 June 2017; a second process to fill the vacancy due to  the resignation of Mr. Hyun 
Chong Kim with effect fr om 1 August 2017; a third process to replace Mr. Peter Van den Bossche, 
whose second term expired on 11 December 2017; a fourth process to replace Mr. Shree Baboo 
Chekitan Servansing, whose four -year term of office expired on 30 September 2018; a fifth pro cess 
to replace Mr. Ujal Singh Bhatia, whose second term will expire on 10 December 2019; and a sixth 
process to replace Mr. Thomas R. Graham whose second term will expire on 10 December 2019; 
(ii) to establish a Selection Committee; (iii) to set a deadlin e of 30 days for the submission of 
candidacies; and (iv) to request that the Selection Committee issues its recommendation within 
60 days after the deadline for nominations of candidates ". The proponents were flexible with regard 
to the deadlines for the AB selection processes, but  believed  that Members  should consider the 
urgency of the situation. Mexico  continue d to urge all Members to support this proposal in the 
interest of the multilateral trading system and the dispute settlement system.  
10.3.   The representative of  Qatar  said that Qatar was deeply concerned about the  continuing 
absence of consensus in the DSB to fill the vacancies in the Appellate Body , which risk ed undermining 
the functioning of the WTO's dispute settlement system as a whole. The W TO dispute settlement WT/DSB/M/433  
 
- 33 - 
 
  system , including the Appellate Body, had provided an important contribution to the WTO's 
rules-based  system. This being said, Qatar took note of, and share d some of the concerns expressed 
by Members and support ed the efforts that had been undertaken to improve the functioning of the 
Appellate Body in line with the mandate given to the Appellate Body by Members under  the DSU. 
Qatar expresse d its gratitude to Amb. Walker for his efforts in facilitating the informal process on 
matters re lated to the functioning of the Appellate Body and in seeking convergence in the position s 
of Members. The informal process ha d allowed Members to focus on the main issues that seem ed to 
trouble the Membership in respect of the functioning of the Appellate  Body and ha d identified a 
number of possible clarifications that could be made either through informal guidance or decisions 
to be adopted by the DSB or the General Council. At the present meeting , Qatar wished  to share 
some of its views on the issues rai sed in the informal process which reflect ed the key concerns of 
Members.  
10.4.   With regard to Rule 15 of the Working Procedures for Appellate Review, Qatar note d that the 
DSU fail ed to address the issue of how to deal with Appellate Body members whose term expir ed in 
the course of an appeal proceeding. Although Qatar consider ed that Rule 15 of the Working 
Procedures for Appellate Review offer ed a possible solution to the problem, Qatar share d the view 
of certain Members that this was ultimately a question for the Membership to decide on. Moreover, 
Qatar was of the view that the possible extension of an Appellate Body member's mandate should 
remain exceptional and limited to circumstances where  not doing so would lead to undue delays in 
the process and a wasteful use of resources. Therefore, Qatar believed that it should be clarified 
that an Appellate Body member could only continue to serve on a division after the expiry of its term 
in case the  oral hearing in the relevant proceeding ha d already taken place before the expiry of the 
member's mandate. This , in turn , mean t that it should also be clarified that a member whose term 
expire d within 60 days following the start of the appeal process shou ld not be appointed to serve on 
the division hearing the appeal. It was the DSB that should have the final word in approving the 
extension of a member's mandate in such circumstances.  
10.5.   With regard to the 90 -day rule, Qatar consider ed that Article 17.5 of th e DSU was very clear 
in stating that : "[i]n no case shall the proceedings exceed 90 days". The Appellate Body was thus 
required to complete its review within the 90 -day deadline. This being said, as with any rule, there 
should be the possibility, in except ional circumstances and with the consent of the parties and the 
DSB, to deviate from this rule where the appeal raise d issues of particular complexity or in other 
exceptional circumstances. In an effort to enable the Appellate Body to meet this demanding 9 0-day 
deadline, Qatar support ed the idea of allowing the issuance of Appellate Body report s in the original 
language only to be followed later by the translations into the two other languages. In addition, 
Qatar would be willing to consider proposals to in crease the number of Appellate Body members 
from seven  to nine and to make membership in the Appellate Body a full -time occupation. Qatar 
was also not opposed to discussing further the possibility of making additional resources available 
to the Appellate B ody Secretariat for purposes of assisting the Appellate Body members in meeting 
the deadline of 90 days. Qatar was of the view that if the Members impose d compliance with such a  
deadline, they should also be willing to provide the means and resources neces sary for making it 
possible to comply with such deadline.  
10.6.   With regard to issues of law including municipal law, Qatar note d that Article 17.6 of the DSU 
was also very clear in that it limit ed the review by the Appellate Body to issue s of law and legal 
interpretations. The panels were the trier of facts. In this respect, Qatar agree d with the view 
expressed by other Members that the meaning of municipal law was a matter of fact under public 
international law. A panel's finding on the meaning of a Member's domestic law was thus not subject 
to review by the Appellate Body. Only the panel's legal characterization of such municipal law for 
purposes of its consistency with WTO law was a matter that could be reviewed by the Appellate 
Body. In respect of Members' frequent resort to Article 11 of the DSU to address factual findings by 
panels, Qatar consider ed that the Appellate Body should urge restraint in the development of such 
claims by limiting such  appeals to basic questions of due process and respect of fundamental rights 
of the parties to a fair and unbiased process. However, Qatar did not consider that the system would 
be served by effectively preventing any appeal from panels ' examination of the  facts and evidence. 
As long as such appeals were limited to clear and manifest errors in panels ' process of evaluation of 
the evidence and arguments before them, appeals under Article 11 of the DSU could play an 
important part in the proper functioning of  the system.  
10.7.   With regard to advisory opinions , in a similar vein, Qatar consider ed that Article s 17.12 and 
17.13 of the DSU were clear: the Appellate Body had to address each of the issues raised on appeal WT/DSB/M/433  
 
- 34 - 
 
  by the parties to the dispute to the extent this was necessary for upholding, modifying or reversing 
the legal findings and conclusions of panel s. These provisions did not entitle the Appellate Body to 
engage in " obiter dicta " or provide what effectively were "advisory opinions" on issues not directly 
relevant to the resolution of the dispute or that had not been raised by the parties. To the extent 
possible, Qatar support ed the Appellate Body's use of "judicial economy" whenever it ha d made such 
findings as suffice d to settle the dispute.  
10.8.   With regard to  precedent, Qatar note d Amb. Walker's conclusion that there was no 
disagreement that binding precedent was not created through WTO dispute settlement proceedings. 
However, Qatar also agree d that consistency and predictability in the interpretation of Members' 
rights and obligations was of significant value to Members and provide d the kind of security and 
predictability to the multilateral trading system that was envisaged in Article 3.2 of t he DSU. Qatar 
believed , therefore , that adopted panel and Appellate Body reports were to be taken into 
consideration and provide d guidance to panels and the Appellate Body in subsequent disputes. A 
system where the same issues and legal provisions were interpreted differently depending on the 
composition of the panel or the Appellate Body would not serve the system's objective of providing 
security and predictability.  
10.9.   With regard to overreach, Qatar said that t here was no doubt that Article 3.2 of the DSU made 
it very clear that the DSB's rulings and recommendations could not add to or diminish the rights and 
obligations provided for in the covered agreements. Qatar consider ed that it was difficult ex ante  to 
develop guidelines that would ensure that the Ap pellate Body would not exceed its mandate and 
refrain from issuing findings that would add to or diminish the rights and obligations provided in the 
covered agreements. Therefore, Qatar support ed the notion of institutionalizing a mechanism that 
ensure d appropriate oversight by the Membership of the functioning of the Appellate Body in the 
light of this essential limitation. In particular, Qatar consider ed that an annual review meeting 
between the Appellate Body and the Membership could provide the proper f orum for exercising the 
necessary checks and balances on the Appellate Body.  
10.10.   In conclusion, Qatar said that the WTO dispute settlement system was an essential 
component of the rules-based  system that ha d served international trade so well. The Appellate 
Body was an important part of the system and had been a deliberate creation by the Members. 
Article 17 of the DSU and the possibility of bringing an appeal before the standing Appellate Body 
was as much pa rt of the rights and obligations of Members as any other provision, unless and until 
the Members decide d by consensus to do away with the Appellate Body. The system was not perfect 
and a review of the functioning of the system in general and the Appellate Body in particular was a 
welcome endeavour  that Qatar was keen to actively be a part of. However, Qatar was concerned 
that this valuable discussion was being overshadowed by the threat of paralysis of the Appellate 
Body if Members did  not immediately start the AB selection processes . A discussion on how to 
improve the functioning of the Appellate Body presuppose d that there still was a functioning 
Appellate Body to begin with. To ensure that this was the case by the end of 2019, Member s had to 
act with urgency  as of this moment . 
10.11.   The representative of  the European Union  said that his delegation  wished to refer to  its 
statements made  on this matter  at previous DSB meetings, starting in February 2017. The gravity 
and urgency of the situati on was increasing as months went by. WTO Members had a shared 
responsibility to resolve this issue as soon as possible  and to fill the outstanding vacancies as 
required by Article 17.2 of the DSU. The EU wished to thank  all Members that had co-sponsored the 
proposal to launch the AB selection processes . The European Union  invite d all other Members to 
endorse this proposal  so that new AB members could  be appointed as soon as possible. The EU also 
wished to recall that concrete proposals had been  submitted to the General Council with a view to 
unblocking the AB selection processes . These proposals amount ed to serious attempt s at responding 
to the concerns related to AB appointments , and were currently being discussed under the auspices 
of the  General Council Chair. The EU invite d all Members to engage constructively in these 
discussions so that the AB vacancies could be filled as soon as possible.  
10.12.   The representative of  the United  States  thank ed Amb. Walker  for the continued work on 
these issues. As the United States  had explained at prior DSB meetings, the United States  was not 
in a position to support the proposed decision. The systemic concerns that the United States  had 
identified remain ed unaddressed. As the United  States ha d explained at recent DSB meetings, for 
more than 16 y ears and across multiple US Administrations, the United States ha d been raising 
serious concerns with the Appellate Body 's overreaching and disregard for the rules set by WTO WT/DSB/M/433  
 
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  Members, and the appellate document in the "US – Countervailing Measures (China)" dispute 
(DS437)  discussed under the previous Agenda item  was another egregious example of many of the 
concerns the United States  had been raising. The United States would  continue to insist that WTO 
rules be followed by th e WTO dispute settlement system, and would  continue its efforts and its 
discussions with Members and with the Chair to seek a solution on these important issues . 
10.13.   The representative of  Canada  said that Canada support ed the statement made by Mexico, 
and shar ed the concerns expressed by many Members. There were 114 official co -sponsors to this 
proposal  at the present meeting . The fact that such a critical mass sought  to launch the AB selection 
processes was a testimony to the importance that the WTO Membership  accord ed to the dispute 
settlement system, particularly a fully -functioning Appellate Body. Canada remain ed committed to 
working with other interested Members, including the United  States, with a view to addressing 
concerns and undertaking the AB selectio n processes expeditiously. However, Canada deeply 
regret ted that the DSB ha d not been able to comply with its legal obligation under Article 17.2 of 
the DSU to appoint AB members to fill the vacancies. The text of the DSU was clear: "[v]acancies 
shall be filled as they arise ". This requirement did not provide for exceptions or justifications not to 
replenish the Appellate Body.  
10.14.   The representative of  China  said that China support ed the statement made by Mexico on 
behalf of 114 Members. China  welcome d the African Group for coming on board and also wished to 
encourage those who had not co -sponsored the proposal contained in document  
WT/DSB/W/609/Rev.13  to do so in order to support the well -function ed dispute settlement system , 
which benefit ted the entire  Membership. China  regret ted that the AB selection process es had, once 
again , not been launched due to the illegal blockage of the United States. More regrettably, in less 
than four months from the present meeting , the Appellate Body, a cornerstone of "the glorious 
experiment with the rule of law in international relations " and an indispensable component of the 
single undertaking of the Uruguay Round negotiation s, would  be inc apable of hearing new appeals 
and would gradually come to a halt. In response to this unprecedented crisis created by the 
United  States, Members continue d to try every means to accommodate the concerns of the 
United  States as long as the essential features of the dispute settlement system could be preserved, 
which include d the independence and impartiality of the Appellate Body and the negative consensus 
rule for the adoption  of reports . Yet, these efforts still fell short of making a breakthrough b ecause 
the United States ha d not changed its passive approach  in the informal process  on matters related 
to the functioning of the Appellate Body .  
10.15.   China recalled that a t the General Council meeting held on 23 -24 July 2019 , the 
United  States had, for the f irst time since February  2019, made  comments on specific elements  of 
the proposed reforms.  However, those comments appear ed not materially different from those made 
by the United States  back in February. Aside from criticism against proposals and the Facil itator 's 
Report  regarding the informal process on matters related to the functioning of the Appellate Body , 
the United States continue d to fail to come up with concrete solutions. In addition, some of the 
US interpretations of the DSU provisions appear ed even contradictory to one another. For example, 
the United States  highlight ed the mandatory term "shall" to suggest the obligation of the 90 -day 
deadline rule. Ironically, by blocking the AB selection process es, the United States appear ed to reject 
the mandatory nature of the same "shall" used in Article 17.2 of the DSU. The existing two -tier 
system serve d the entire  Membership well, which was especially the case for the United  States. As 
the main architect and principal beneficiary of the  current system, the wining rate  of the United 
States , both in its offensive and defensive cases, surpasse d that of the global average. Although the 
appellate procedures and practices could be further improved, blocking the AB selection process es 
was not a feasible means to achieve that end. Without a well -functioning Appellate Body, the dispute 
settlement system would  gradually slide from a rules-based system  to a power -based one. In the 
long term, no Member  could capitalize on the collapse of the Appellat e Body. If one were truly 
obsesse d with its might, it was important to remember that "might ebbs and flows ". Given the 
increasing urgency faced by Members , China renew ed its firm support to Amb. Walker  as Facilitator 
of the informal process  on matters related to the functioning of the Appellate Body  and stood  ready 
to continue to work with others in a constructive and responsible manner with a view to solving this 
deadlock expeditiously.  WT/DSB/M/433  
 
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  10.16.   The representative of  Cuba said that Cuba wishe d to reiter ate its deep concern with the 
on-going, prolonged situation in which the AB selection process es found itself due to a blockage 
caused by  a single Member. The  constantly increasing number of  co-sponsors of the proposal 
contained in document WT/DSB/W/609/Rev.13  reflect ed a concern shared by  the majority of the 
Membership. This was affecting the functioning of the dispute settlement system general ly and 
harmed the interests of its Members which were trying to find a solution to this  impasse . The practice 
of voicing concerns without propos ing solutions was neither positive nor constructive for this 
Organization. At the 23 -24 July 2019 General Council  meeting,  the Facilitator of the informal process 
on the functioning of the Appellate Body had presented a new progress report aimed at seeking  a 
solution . This report r eflect ed certain  points of convergenc e in some areas. The reality was that the 
Member  that expresse d concerns was not satisfied with  the proposals that had been presented.  
However, this same Member ha d not presented a proposal of its own in order to find a solution.  
Instead, this Member ha d simply repeated the same  concerns. Cuba was concerned  that the current 
situation would be prolong ed until December 2019, at which point  the Appellate Body would  cease 
its operations.  If so, this  would  be very harmful to th e Organization , especially in light of the 
forthcoming 12th Ministerial Conference, during which the main themes on which Members  had to  
focus their attention would result exclusively from the Ministerial mandates.  All Members  should 
show good will in order to find solutions and commit themselves  to genuine dialogues .  
10.17.   The representative of  New Zealand  said that New Zealand wished to reiterate  its support for 
the co-sponsored proposal  contained in document WT/DSB/W/609/Rev.13 . It also wished to  
emphasi ze the systemic importance of commencing the AB selection process es as soon as possible 
and to refer to  its statements made at previous DSB meetings on this critical issue.  
10.18.   The representative of  Hong Kong, China  said that  his delegation  wished to refer to  its 
statements made at previous DSB meetings and wished  to reiterate its disappointment  and concern 
that the impasse ov er the AB selection processes  remain ed unresolved. Hong Kong, China  
appreciate d efforts made by various Members to address some Member's concerns with the Appellate 
Body in the informal process under the auspices of the General Council. Hong Kong , China  was 
committed to engaging constructively to find a solution as soon as possible. His delegation  urged all 
Members, and in particular those who had raised systemic concerns , to do the same. Hong Kong, 
China  wished  to emphasize  that the discussion on improving the DSU should not be a reason to 
delay the AB appointments . It was not justifiable to attach preconditions to the launch of the 
AB selection process es. Hong Kong, China  called on Members to lift the blockage of the AB selection 
process es without further delay.  
10.19.   The representative of  Malaysia  said that her delegation  wished  to add Malaysia  to the list of 
cosponsors of the proposal  contained in document WT/DSB/W/609/Rev.13 .  
10.20.   The representative of India said that  his country  wished to refer to  its statements made at 
previous  DSB meetings  on this matter and wished to reiterate  its serious concerns regarding the 
DSB's inability to commence the AB selection process es. Members had a collective responsibility to 
fill the va cancies in the Appellate Body as they arose  under Article 17.2 of the DSU. Therefore, India 
called on all WTO Members to engage constructively , pursuant  to Article 17.2 of the DSU , to 
immediately start the AB selection process es as a priority.  
10.21.   The representative of  Chinese Taipei  said that his delegation simply wished to refer to  its 
statement s made at previous DSB meetings  on this matter . Again, Chinese Taipei  wished to call for 
all Members' constructive engagement to find a solution to this impass e as soon as possible.  
10.22.   The representative of  Brazil  said that Brazil wished to refer to  its statements made at 
previous  DSB meetings  regarding the urgency of launching the AB selection process es. At present , 
there was  a very significant majority of WTO Members who formally support ed the proposal under 
this Agenda item. Brazil, of course, support ed the immediate launching of the AB selection process es. 
Otherwise, the Membership would  continue to be in breach of its colle ctive obligation to maintain a 
standing Appellate Body, in which vacancies had to  be filled as they arose. As Members  all knew, an 
informal process was taking place within the ambit of the General Council under the guidance  of 
Amb. Walker  so as to help Members overcome this impasse. Brazil was prepared to continue 
engaging with Members in this context . As Brazil had  noted elsewhere, in the coming  months 
Members  needed to think of the end  game, and to work constructively towards the successful 
conclusion of that process.  WT/DSB/M/433  
 
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  10.23.   The representative of  Norway  said that Norway welcome d the new co-sponsors  of the 
proposal  contained in document WT/DSB/W/609/Rev.13 . Norway wished  to refer to its statement s 
made at previous  DSB meetings  under this Agenda item, and to underline , once again,  its serious 
concerns  about  the need to solve this situation , which was  becoming  increasingly urgent.  
10.24.   The representative of  Singapore  said that Singapore wished to refer to  its statements made 
at previous DSB meetings and wished to reiterate  its serious systemic concerns regarding  the failure 
to launch the AB selection process es. Singapore  welcome d the 38 members of the African Group 
who had formally joined as co -sponsors of the proposal contained in document 
WT/DSB/W/609/Rev.13 , as well as Malaysia which ha d expressed its intention of joining as a 
co-sponsor of the same proposal at the present meeting . This brought  the total number of 
co-sponsors to 115. While the number of co -sponsors cont inued to increase, the time left until 
10 December 2019 was decreasing, and Members  did not appear to be any closer to a solution to 
the impasse. Singapore  looked forward to redoubled efforts in the informal  process on matters 
related to the functioning of the Appellate Body after the summer break and urge d all Members, 
especially those who had raised concerns, to actively engage. The AB selection process es should 
also be allowed to proceed unconditionally in the mean time. Singapore would  continue to engage 
constructively and collaboratively towards resolving this impasse.  
10.25.   The representative of  Mexico , speaking  on behalf of the 114 co -sponsors of this proposal, 
expressed regret  that for the twent y-sixth occasion, Members  had still not been able to start the AB 
selection processes and had continuously failed to fulfill their duties as Members of this Organization. 
The fact that a Member might have concerns about certain aspects of the functioning of the Appellate 
Body should  not serve as a pretext to impair and disrupt the work of the Appellate B ody. There was 
no legal justification for the current blocking of the AB selection processes, which was causing 
concrete nullification and impairment for many  Members. Article 17.2 of the DSU clearly state d that 
"[v]acancies shall be filled as they arise ". No discussion should prevent the Appellate Body from 
continuing to operate fully and Members had to  comply with their obligation under the DSU to fill 
the AB vacancies. By failing to act at the present meeting , Members  would  maintain the current 
situatio n, which was seriously affecting the functioning  of the Appellate Body against the best 
interest of all WTO Members.  
10.26.   The representative of Mexico  said that Mexico wished to welcome the countries that had 
decided to join the list of cosponsors of the proposal  contained in document WT/DSB/W/609/Rev.13 , 
which accordingly comprise d 115 Members, including Malaysia, which had expressed its interest in 
becoming a co -sponsor during the present  meeting. Mexico  encourage d all other Members to also 
co-sponsor th e proposal. Despite the repeated attempts to launch the AB selection process es to fill 
its vacancies, the Appellate Body would  no longer be operational  in 17 weeks . To date, over ten 
proposals had been submitted as part of the informal process on Appellate  Body matters conducted 
under the auspices of the General Council, with the aim of addressing the concerns expressed . This  
should be reason enough to launch the AB selection process es to fill the AB vacancies. However, 
more importantly, Members  had to  separate the AB selection processes  from any other concerns. 
All Members had a shared responsibility to resolve this issue as soon as possible. Therefore , Mexico , 
wished to reiterate  its willingness to work on finding a solution and urgently appeal ed to all Members 
to immediately initiate, in a responsible manner, the selection process es to replace six of the 
seven  Appellate Body members.  
10.27.   The representative of  Australia  said that  her country wished to refer to  its statements made 
at previous DSB meetings on this matter and to reiterate  its serious concerns regarding the DSB's 
inability to commence the AB selection process es. Australia welcome d progress to  date in the 
General Council's informal process o n the Appellate Body matters and the anticipated transition to  
text-based  discussions after the summer break as a positive step forward. In this regard, Australia 
recognize d the significant contributions of many Members to the discussions and of Amb. Walke r's 
leadership. However, Australia was  clear-eyed about the hard work  required in the second half of 
2019 to address key concerns regarding the functioning of the Appellate Body. Australia was strongly 
committed to the work ahead and encourage d Members to continue solution s-focused , active 
engagement and to demonstrate the necessary flexibility to agree to pragmatic solutions in the 
interest of all Members.  
10.28.   The representative of  Korea  said that his country  welcome d the new co -sponsors and 
support ed the statement made by Mexico based on the joint proposal  contained in document 
WT/DSB/W/609/Rev.13 . Korea wished  to refer to its statements made at  previous DSB meetings.  WT/DSB/M/433  
 
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  10.29.   The representative of  Japan  said that Japan wished to refer to  its statements made a t 
previous DSB meetings. Japan continue d to support the informal process on matters related to the 
functioning of the Appellate Body that was being facilitated  by Amb. Walker . The active engagement 
of all WTO Members was essential in their common endeavours . 
10.30.   The representative of  Switzerland  said that Switzerland wished to refer to  its statements 
made on this matter at previous DSB meetings. The situation was alarming,  and Swi tzerland deeply 
regret ted that the DSB was still unable to launch the AB selection process es. Switzerland stood  ready 
to continue the discussions in the context of the informal process  on matters related to the 
functioning of the Appellate Body  under the auspices of the General Council with a view to finding 
concrete solutions. Once again, Switzerland urged all Members to engage constructively in order to 
solve this impasse without further delay.  
10.31.   The Chairman  thank ed all delegations for their statements. He said that, a s in the past, the 
DSB would  take note of the statements  expressing the respective positions, which would  be reflected 
in the minutes of this meeting. As a certain number of delegations had noted again  at the present 
meeting, this matter require d urgent engagement on the part of all WTO Members. As Members  
were aware , under the auspices of the General Council, he had  agreed to assist the Chair of the 
General Council, as Facilitator, in an informal proces s of focused discussions on Appellate Body 
matters. He then recalled  that on 23 July 2019, he had  provided a third progress report to the 
General Council on these  informal consultations. This report had been  circulated to all Members in 
document JOB/GC/220. The Chairman said that, a s he had  stated at the 23 July 2019 General 
Council meeting, he would  be relying on feedback from the General Council Chair and Members in 
taking  forward the next phase of this work , and that his  door remain ed open to all delegations.  
10.32.   the DSB took note of the statements . 
11   STATEMENT BY THE EUROPEAN UNIO N REGARDING  CANADA /EU INTERIM APPEAL  
ARBITRATION ARRANGEM ENT PURSUANT TO ARTICLE  25 OF THE DSU  
11.1.   The representative of  the European Union , speaking under "Other Business",  recalled  that, o n 
25 July 2019, the European Union and Canada had notified the DSB of their Interim Appeal 
Arbitration Arrangement  pursuant to Article 25 of the DSU.  He said that t he text  of the arrangement  
had been circulated to the WTO Membership in document  JOB/DSB/1/Add.11 . The EU  had agreed 
with Canada that both delegations  would jointly present their Interim Appeal Arbitration 
Arrangement at the 30 September 2019 DSB meeting.  
11.2.   The DSB took note of the statement.  
__________