RESTRICTED  
  
WT/DSB/M/423  
 
4 April 2019  
(19-2162) Page: 1/47 
Dispute Settlement Body  
18 December 2018    
 
 
 
MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 18 DECEMBER 2018 
Chairperson: Ms. Sunanta Kangvalkulkij (Thailand)  
Prior to the adoption of the Agenda , the item concerning the adoption of the Panel Report in the 
dispute on: "India – Certain Measures on Imports of Iron and Steel Products"  (DS518) was removed 
from the proposed Agenda following India's  decision to appeal the Panel Report.  
 
Table of Contents  
1   SURVEILLANCE OF IMPLEM ENTATION OF RECOMMEN DATIONS ADOPTED  
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: Stat us report by the  
United  States  ................................ ................................ ................................ .....................  3 
C.  European  Communities – Measures affecting the approval and marketing of  
biotech products: Status report by the European  Union  ................................ ...........................  4 
D.  United  States – Anti-dumping and countervailing measures on large residential  
washers from Korea: S tatus 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 – Measures concerning the importation of chicken meat and chicken  
products : Status report by Indonesia ................................ ................................ .....................  6 
G.  United  States – Anti-dumping measures on certain oil country tubular goods  
from Korea: Status  report by the United  States  ................................ ................................ ...... 7 
2   UNITED  STATES  – CONTINUED DUMPING  AND SUBSIDY OFFSET ACT OF  2000: 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE  DSB ..........................  8 
A.  Statement by the Eur opean  Union  ................................ ................................ ....................  8 
3   EUROPEAN  COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN LARGE CIVIL  AIRCRAFT: IMPLEMENT ATION OF T HE RECOMMENDATIONS 
ADOPTED BY THE DSB  ................................ ................................ ................................ ...... 9 
A.  Statement  by the United  States  ................................ ................................ .......................  9 WT/DSB/M/423  
 
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4   STATEMENT BY THE  UNITED  STATES ON TH E PRECEDENTIAL VALUE  OF PANEL OR 
APPELLATE BODY REPOR TS UNDER THE WTO AGR EEMENT AND DSU  .............................  10 
5   COSTA  RICA – MEASURES CONCERNING THE  IMPORTATION OF FRES H AVOCADOS 
FROM MEXICO  ................................ ................................ ................................ ................  34 
A.  Request  for the establishment of a panel by Mexico  ................................ ........................... 34 
6   RUSSIAN  FEDERATION – ADDITI ONAL DUTIES ON CERTAIN PRODUCTS FROM THE 
UNITED  STATES  ................................ ................................ ................................ .............  35 
A.  Request  for the establishment of a panel by the United  States  ................................ ............ 35 
7   SAUDI  ARABIA – MEASURES CONCERNING T HE PROTECTION OF INT ELLECTUAL 
PROPERTY RIGHTS  ................................ ................................ ................................ .........  36 
A.  Request  for the establishment of a panel by Qatar  ................................ ............................ 36 
8   UNITED  STATES – TARIFF MEASURES ON C ERTAIN GOODS FROM CH INA .................  38 
A.  Request  for the establishment of a panel by China  ................................ ............................ 38 
9   APPELLATE BODY A PPOINTMENTS: PROPOSA L BY ARGENTINA; AUST RALIA; THE 
PLURINATIONAL STATE OF BOLIVIA; BRAZIL; CANADA; CHILE; CHINA ; COLOMBIA; 
COSTA RICA; CUBA; DO MINICAN REPUBLIC; EC UADOR; EGYPT; EL SAL VADOR; THE 
EUROPEAN UNION; GUAT EMALA; HONDURAS; HON G KONG, CHINA; ICELA ND; INDIA; 
INDONESIA; ISRAEL; K AZAKHSTAN; KO REA; LIECHTENSTEIN; MEXICO; NEW  
ZEALAND; NICARAGUA; NORWAY; PAKISTAN; PANAMA; PARAGUAY; PE RU; THE 
RUSSIAN FEDERATION; SINGAPORE; SWITZERLA ND; THE SEPARATE CUS TOMS 
TERRITORY OF TAIWAN,  PENGHU, KINMEN AND MATSU; THE FORMER YU GOSLAV 
REPUBLIC OF MACEDONI A; TURKEY; UKRAINE; URUG UAY; THE BOLIVARIAN  
REPUBLIC OF VENEZUELA AND VIET N AM ................................ ................................ ...... 42 
 
1  SURVEILLANCE OF IMPL EMENTATION OF RECOMM ENDATIONS ADOPTED BY  THE DSB 
A.  United  States – Anti-dumping measures on certain hot -rolled steel products from Japa n: Status 
report by the United  States (WT/DS184/15/Add.190)  
B.  United  States – Section  110(5) of the US Copyright Act: Status report by the United  States 
(WT/DS160/24/Add.165)  
C.  European  Communities – Measures affecting the approval and marketing of bio tech products: 
Status report by the European  Union (WT/DS291/37/Add.128)  
D.  United  States – Anti-dumping and countervailing measures on large residential washers from 
Korea: Status report by the United  States (WT/DS464/17/Add.12)  
E.  United  States – Certa in Methodologies and their application to anti -dumping proceedings 
involving China: Status report by the United  States (WT/DS471/17/Add.4)  
F.  Indonesia – Measures concerning the importation of chicken meat and chicken products: Status 
report by Indonesia (WT/DS484/18/Add.3)  
G.  United  States – Anti-dumping measures on certain oil country tubular goods from Korea: Status 
report by the United  States (WT/DS488/12/Add.3)  
1.1.  The Chairperson  noted that there were seven  sub-items under this Agenda item concerning 
status reports submitted by delegations pursuant to Article  21.6 of the DSU. She recall ed that  
Article  21.6 require d 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 remain on the DSB's 
Agenda until the issue is resolved".  Under this Agenda item, she invite d deleg ations to provide 
up-to-date information about their compliance efforts. She also  remind ed delegations that, as WT/DSB/M/423  
 
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 provided for in Rule  27 of the Rules of Procedure for DSB meetin gs: "[r] epresentatives should make 
every effort to avoid the repetition of a ful l debate at each meeting on any issue that has already 
been fully debated in the past and on which there appears to have been no change in Members' 
positions already on record".  She then  turned to the first status report under this Agenda item . 
A.  United  States – Anti-dumping measures on certain hot -rolled steel products from 
Japan: Status report by the United  States ( WT/DS184/15/ Add.190) 
1.2.  The Chairperson  drew attention  to document WT/DS184/15/Add.190 , which contained the 
status report by the United States on progress in the implementation of the DSB's recommendations 
in the case concerning 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 st atus report 
in this dispute on 6  Decem ber 2018, in accordance with Article 21.6 of the DSU. The United States 
had addressed the DSB's recommendations and rulings with res pect to the calculation of 
anti-dumping margins in the hot -rolled steel anti -dumping duty investigat ion at issue. With respect 
to the recommendations and rulings of the DSB that had yet to be addressed, the US Administration 
would work with the US Congress with respect to appropriate statutory measures that would resolve 
this matter . 
1.4.  The representative o f Japan  said that Japan wished to thank the United States for its most 
recent  status report and the statement made at the present meeting. Japan, once again, called on 
the United States to fully implement the DSB's recommendations and rulings in order to r esolve 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.16 5) 
1.6.  The Chairperson  drew attention to document WT/DS160/24/Add.16 5, which contained 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 on 6 Decem ber 2018, in accordance with Article 21.6 of the DSU. The 
US Administration would continue to confer with the EU, 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 the EU wished to thank the United States 
for its status report  and for its statement made at the present meeting. The EU wished to refer to  
its statements made at previous DSB meetings under this Agenda item . The EU said that it wished  
to resolve this case as soon as possible . 
1.9.  The representative of China  said that t he United States had  submitted its 16 6th status report 
for th e present  meeting. This most recent  status report , as was the case for the status reports 
submitted by the U nited States ahead of  previous DSB meetings , was not different from the very 
first status report submitted in this dispute 14 years ago. As time pass ed, this dispute  remain ed 
unresolved.  Section 110(5) of the US Copyright Act, which long ago had been found inconsistent 
with the requirements of the Berne Convention and the TRIPS Agreement, was still in effect.  Article 
21.1 of the DSU state d that: "[p]rompt comp liance with recommendations or rulings of the DSB is 
essential in order to ensure effective resolution of disputes to the benefit of all Members ". 
Regrettably, without further concrete actions, the United States continued to fail to accord to 
intellectual property right holders the minimum standard of protection required by the TRIPS 
Agreement . 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 ruli ngs in this 
dispute .  WT/DSB/M/423  
 
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1.10.   The representative of the United States  said that as the United States had noted at prior 
meetings of the DSB, by intervening under this Agenda item, China attempted to give the 
appearance of concern for intellectual property rights. The United States referred delegations to its 
statements made  at prior DSB meetings on China's purported interest in protecting intellectual 
property rights, as well as to its statement under Agenda item 8 of the present meeting.  
1.11.   The representative of China  said that his delegation  took note of the US statement s under 
this Agenda item . Protection of intellectual property right s would benefit all Members. As always, 
China welcome d and wa s willing to engage in good faith and objective discussions with other 
Members on any intellectual property issues.  China, once again , urged the United States to faithfully 
and promptly honour  its implementation obligation . 
1.12.   The DSB took note of the statements  and agree d to revert to this matter at its next regular 
meeting.  
C.  European  Communities – Measures affecting the approval and marketing of biotech 
products: Status report by the  European  Union ( WT/DS291/37/ Add.12 8) 
1.13.   The Chairperson  drew attention to document WT/DS291/37/Add.12 8, 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 ap proval and marketing of 
biotech  products . 
1.14.   The representative of the European  Union  said that t he EU continue d to progress with the 
authori zations where the E uropean Food Safety Authority ha d finalized its scientific opinion and ha d 
concluded that there were no safety concerns . On 3 December  2018, four draft authori zations – one 
for a renewal of genetically -modified  oilseed rape1, two for new genetically -modified  maize2 and one 
for new cotton3 – had been  presented for a vote in a Member States Committee  with a "no opinion" 
result . These measures would  be submitted for a vote in the Appeal Committee in January 2019.  On 
7 December  2018, one draft  authori zation for a cut flower4 had been  submitted for a vote to the 
Appeal Committee as it had received "no opinion " in an EU member State Committee on 18 October  
2018. The EU was committed to acting in accordance with its WTO obligations. More generally, and 
as the EU had stated many times at previous DSB meetings , the EU approval system was not covered 
by the DSB's recommendations and rulings  in this dispute . 
1.15.   The representative of the United States  said that the United States thanked the European 
Union (EU) for its status report and its statement made at the present meeting. The United States 
remained concerned with the EU's measures affecting the approval of biotech products. De lays 
persisted and affected dozens of applications that had been awaiting approval for months or years, 
or that had already received approval. While the United States noted and welcomed the approval of 
authorizations for three products in December 2018, th e United States also noted that these products 
had been subject to significant delays. The United States further noted its concern that even when 
the EU finally approved a biotech product, EU member States continued to impose bans on the 
supposedly approve d product. The EU maintained legislation that permitted EU member States to 
"opt out" of certain approvals, even where the European Food Safety Authority (EFSA) had concluded 
that the product was safe. The United States continued to stress that at least 17  EU member States, 
as well as certain regions within EU member States, had submitted requests to opt out of EU 
approvals. The United States again noted a recent public statement issued by the European Union's 
Group of Chief Scientific Advisors on 13 Novemb er 2018, in response to the ruling dated 25 July 
2018 by the European Court of Justice (ECJ) that addressed the forms of mutagenesis that qualified 
for the exemption contained in EU Directive 2001/18/EC. This Directive was a central issue in dispute 
in the se WTO proceedings, and concerned the Deliberate Release into the Environment of Genetically 
Modified Organisms, or GMOs. The EU Group of Chief Scientific Advisors' statement recognized that: 
"in view of the Court's ruling, it becomes evident that new scie ntific knowledge and recent technical 
developments have made the GMO Directive no longer fit for purpose". The United States urged the 
                                                
1 Renewal of oilseed rape Ms8xRf3 (for feed) . 
2 Maize 5307 and Maize MON 87403 . 
3 Cotton GHB614xLLCotton25xMON15985 . 
4 Carnation "Dianthus caryophyllus " L. line FLO -40685 -2. WT/DSB/M/423  
 
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 EU to finally act in a manner that would bring into compliance the measures at issue in this dispute. 
The United States f urther urged 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.  
1.16.   The repres entative of the European Union  said that t he United States ha d touched upon a 
number of issues in its statement under this Agenda item . The EU wished  to provide clarifications  
on some of these issues . The delays asserted by the United States were simply  the result of an 
in-depth  investigation aimed at  making sure that all the relevant new goods were scientifically safe 
for the environment and for consumers. Accordingly , there was no delay , only the passage of the 
amount of time necessary  to confirm that th e relevant goods were safe. On the issue of the "Opt -out" 
Directive, the EU wished to note  that no EU member State  had imposed any ban thus far. The EU  
also wished to note that an EU m ember State could adopt measures restricting or prohibiting 
cultivation o nly if such measures were: in line with EU law ; reasoned, proportional and 
non-discriminatory ; and based on compelling grounds.  The United States ha d not asserted that any 
such measure fail ed to meet those criteria. In any event, and as the EU had mentione d previously 
at the present meeting , the "opt-out" Directive was not covered by the DSB 's recommendations and 
rulings. The United States had referred to a judgment of the European Court of Justice (ECJ) from 
July 2018. That judgment ha d provided important clarifications on the scope of application of the 
GMO legislation in relation to organisms obtained by mutagenesis techniques. The ECJ found that 
organisms obtained by means of new techniques  or methods of mutagenesis, which ha d appeared 
or had been mostly developed since the adoption of Directive 2001/18, f ell within the scope of that 
Directive. The judgment of the ECJ had not extended the scope of the legislation. It ha d simply 
clarified how the legislation should be read. The European Commiss ion was working together with 
EU member States to ensure the proper application of the ECJ judgment. EU member States were 
responsible at the national level for the relevant control activities regarding the placing on the market 
of both products  produced i n the EU and imported products . To this effect, the Joint Research Centre 
was helping national laboratories to develop relevant detections methods. The United States ha d 
also referred to the Group of Chief Scientific Advisors. The EU wished  to clarify that  this Group 
provide d independent scientific advice to the European Commission. The recent statement on gene 
editing made by the Group of Chief Scientific Advisors provide d a scientific perspective on the most 
recent  developments on the use of directed muta genesis , and in particular on their regulatory status. 
This was an element for discussions with all stakeholders.  
1.17.   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 report by the United  States ( WT/DS464/17/ Add.12) 
1.18.   The Chairperson  drew attention to document WT/DS464/17/Add. 12, which contained the 
status report by the United States o n progress in the implementation of the DSB's recommendations 
in the case concerning anti -dumping and countervailing measures on large residential washers from 
Korea . 
1.19.   The representative of the United  States  said that t he United States had provided a status  
report in this dispute on 6 Decem ber 2018, in accordance with Article  21.6 of the DSU.  On 
15 December  2017, the US  Trade Representative had requested that the US Department of 
Commerce make a determination under section  129 of the Uruguay Round Agreements  Act to 
address the DSB 's recommendations relating to the Department 's countervailing duty investigation 
of washers from Korea. On 18 December  2017, the Department of Commerce had initiated a 
proceeding to make such determination. Following initiation, Com merce had issued initial and 
supplemental questionnaires seeking additional information.  On 4 April 2018, Commerce had issued 
a preliminary determination revising certain aspects of its original determination. Following issuance 
of the preliminary determin ation, Commerce had provided interested parties with the opportunity to 
submit comments on the issues and analysis in the preliminary determination and rebuttal 
comments.  Commerce had reviewed those comments and rebuttal comments and had taken  them 
into ac count for purposes of preparing the final determination.  On 4 June 2018, Commerce had 
issued a final determination, in which Commerce had revised certain aspects of its original 
determination.  Specifically, Commerce had revised the analysis underlying the CVD determination, WT/DSB/M/423  
 
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as it pertain ed to certain tax credit programs, in accordance with findings adopted by the DSB.  The 
United  States continue d to consult with interested parties on options to address the DSB 's 
recommenda tions relating to anti -dumping measures challenged in this dispute .  
1.20.   The representative of Korea  said that Korea wished to thank the United States for its status 
report and the statement made at the present meeting. Korea wished to refer to its statements 
made at previous DSB meetings. Korea urged the United States to faithfully implement the DSB's 
recommendati ons and rulings in this dispute.   
1.21.   The representative of Canada  said that Canada was concerned that the United States had not 
implemented the DSB's re commendations and rulings in this dispute. In particular, Canada was 
deeply disappointed that, despite the expiry of the reasonable period of time, the United States 
continued to collect cash deposits from Canadian exporters based on a methodology that had  been 
found to be "as such" inconsistent with WTO obligations in this dispute . 
1.22.   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. 4) 
1.23.   The Chairperson  drew attention to document WT/DS471/17/Add. 4, which contain ed the 
status report by the United States on progress in the implementation of the DSB's r ecommendations 
in the case concerning certain methodologies and their application to anti -dumping proceedings 
involving China . 
1.24.   The representative of the United  States  said that t he United States had provided a status 
report in this dispute on 6  December  2018, 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 .  
1.25.   The representative of  China  said that the Appellate Body r eport in this dispute  had been  
circulated to Members  on 11 May 2017. On 22 May 2017, the DSB had adopted the Appellate Body  
report  and the Panel r eport, as modified by the App ellate Body r eport. The Arbitration pursuant to 
Article 21.3(c) of the DSU had determined  the reasonable period of time (RPT) to be 15 months . 
The RPT had expired on 22 August 2018 . On 9 September 2018, China had requested authorization 
from the DSB to suspend concessions or other obligations and the matter ha d been referred to 
arbitration in line with the Article 22.6 of  the DSU . Thus far, the U nited States had submitted five 
status reports . None of the  status reports  indicate d any substantive implementation progress by the 
United States to address the DSB 's recommendations in this dispute oth er than "consulting with the 
interested parties ". China was very disappointed and deeply concerned with the US failure to 
implement the DSB's recommendations and rulings . The WTO -inconsistent measures taken by the 
United States had seriously infringed China 's legitimate economic and trade interests, distorted the 
relevant international market as well as seriously damaged the rule s-based multilateral trading 
system . This should alert all Members and the international community . China, once again, urged  
the U nited States to take concrete actions, to fully respect  WTO rules, and faithfully implement the 
DSB's recommendations and rulings in this dispute .  
1.26.   The DSB took note of the  statements and agree d to revert to this matter at its next regular 
meeting.  
F.  Indonesia – Measures concerning the importation of chicken meat and chicken 
products : Status report by Indonesia ( WT/DS484/18 /Add.3 ) 
1.27.   The Chairperson  drew attention to document WT/DS484/18 /Add.3 , which contain ed the 
status report by Indonesia on progress in the implementation of the DSB's recommendations in the 
case on measures concerning the importation of chicken meat and chicken products . WT/DSB/M/423  
 
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 1.28.   The representative of Indonesia  said that  Indonesia w ished  to refer to  its statement made at  
the 21 November 2018  DSB meeting  on this matter . His delegation wished to indicate that Indonesia 
had undertaken the necessary steps to adjust the relevant measures by amendi ng its regulations, 
namely: (i) Ministry of Agriculture Regul ation No.  23/2018, which entered i nto force on 
24 May 2018; and (ii) Ministry of Trade Regulation No.  65/2018, which entered into force on 
31 May 2018.  The essence of the amendments to these regulations  was that products covered in 
this dispute could  be imported, eith er included or excluded in the A nnex. It was  confirm ed that 
importers were allowed to modify information contained in the import licenses. Hence, there w ould 
be no sanction for such modifications. With regard to the distribution plan, Indonesia's  domestic 
producers also had a plan for their products to be distributed.  With respect to the submi tted 
questionnaire, it wa s currently under rigorous internal examination by the Ministry of Agriculture. 
Indonesia stood  ready to continue to consult  and would remain in constant communication with 
Brazil with respect to any matter relating thereto .  
1.29.   The representative of  Brazil  said that his country  wished to thank Indonesia for its status 
report  of 7 December 2018 , which it was currently in the proce ss of reviewing. As in previous DSB 
meetings,  Brazil wished  to share with Members some concerns regarding Indonesia 's implementation 
of the DSB 's recommendations and rulings in the present dispute . These concerns relate d to the 
following topics: (i) the " positive list requirement "; (ii) the distribution plan  requirement; 
(iii) amendments to the terms of import licences ; and, most importantly, (iv ) the prompt analysis 
of Brazil 's veterinary health certificate for the importation of chicken meat and chicken products.  
With regard to the first issue, Brazil note d that Indonesia 's positive list had not cease d to exist. 
Indonesia had chose n to maintain the list and had include d some of the HS codes of chicken meat 
and chicken products that had been the subject of  Brazil 's complaint. However, o ne HS code had yet 
to be included in Indonesia 's positive list.  Indonesia's status  report  contained the following sentence : 
"the essence of modification is that products covered in this dispute may be imported, either included 
or excluded in the Annex ". This sentence seemed to indicate that Indonesia ha d not completely 
eliminated the positive list approach. As for distribution plans, Indonesia had further eliminated the 
requirement of distribution reports with informati on regarding use or place of sale of imported 
chicken meat and chicken products.  However, the requirement of distribution plans continue d to be 
in force by virtue  of Article  22(1)(l) of Ministry of Agriculture  Regulation  34/2016 . Brazil noted 
moreover  that Indonesia ha d introduced the possibility of making changes to the terms of the import 
licenses.  Notwithstanding this, amendments to import licenses were subject to several requirements. 
Sanctions on importers continued to apply in the event that these req uirements were not strictly 
observed.  Brazil  wished to note that in its status report, Indonesia  said that: "hence, there would 
be no sanction for such modification ". Brazil also wished to highlight the unsatisfactory status of the 
analysis of Brazil 's veterinary health certificate for the importation of chicken meat and chicken 
products. After  nearly  ten years, Brazil was still waiting for concrete progress  in this respect . Brazil 
believed that  Indonesia continue d to cause  undue delay s prior to  the approval of Brazil's  veterinary 
health certificate. Brazil , once again, ask ed Indonesia to include in its future status reports the status 
of the analysis and approval of this certificate , which wa s a fundamental step for opening the 
Indonesian market . The reasonable period of time for Indonesia to comply with the DSB 's 
recommendations and rulings in this dispute ha d expired on 22 July 2018 . Full implementation, as 
Brazil had explained  at the present meeting , remain ed to be seen . Brazil  thus urge d Indonesia to 
approve Brazil 's veterinary health certificate in a timely manner and to fully comply with the DSB 's 
recommendations and rulings in the present dispute. Brazil remain ed ready to work with Indonesia 
with respect to any aspect of this dispute . 
1.30.   The DSB took note of the statements  and agree d to revert to this matter at its next regular 
meeting.  
G.  United  States – Anti-dumping measures on certain oil country tubular goods from 
Korea: Status report by the United  States ( WT/DS488/12 /Add.3 ) 
1.31.   The Chairperson  drew attention to document WT/DS488/12 /Add.3 , 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 measures on certain oil country tubular good s from Korea . 
1.32.   The representative of the United  States  said that t he United States had provided a status 
report in this dispute on 6 Decem ber 2018, in accordance with Article  21.6 of the DSU . As explained WT/DSB/M/423  
 
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in that report, the US Department of Commerce had published a notice in the Federal Register 
indicating that it "is commencing a proceeding to gather information, analy ze record evidence, and 
consider the determinations which would be necessary to bring its measures into conformity with 
the recommendations and rulings of the Dispute Settlement Body … in United States  – Antidumping 
Measures in Certain Oil C ountry Tubular Goods from Korea".5  
1.33.   The representative of  Korea  said that  Korea wished to thank the United States for its status 
report  and for its statement made at the present meeting , including recent developments, such as 
the notice on this matter published by the US Department of Commerce in November  2018. 
However, Korea wa s still concerned about the uncertainty surrounding the imple mentation of the 
DSB's recommendations and rulings . Korea strongly request ed that the U nited States resolve the 
uncertainty surrounding implementation without delay .  
1.34.   The DSB took note of the statements and agree d to revert to this matter at its next regul ar 
meeting.  
2  UNITED  STATES  – CONTINUED DUMPING  AND SUBSIDY OFFSET ACT OF  2000: 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE  DSB 
A.  Statement by the European  Union  
2.1.  The Chairperson  said that t his item was on the Agenda of the present  meeting at the request 
of the European  Union . She then invite d the representative of the European  Union to speak . 
2.2.  The representative of the European  Union  said that t he EU request ed, once again , that the 
United  States stop transferring anti -dumping and co untervailing duties to the US industry . Every 
disbursement that was still tak ing place was clearly an act of non -compliance with the DSB 's 
recommendations and rulings  in this dispute . The EU renew ed its call on the United States to abide 
by its clear oblig ation under Article  21.6 of the DSU to submit status  reports in this dispute . The EU 
would continue to place this item on the Agenda of the DSB as long as the United  States ha d not 
implemented the DSB's recommendations and  ruling s in this dispute .  
2.3.  The representative of Brazil  said that as an original party to this dispute, Brazil wished to thank 
the EU , once again , for placing this item on the Agenda of the DSB . The main aspect of this item on 
the Agenda – beyond the discussion about the obligation or not for the concerned Member to 
continue to submit status reports – was that after more than 15  years of the DSB's recommendations 
and rulings in this dispute, and more than 12  years after the date of the Deficit Reduction Act that 
had repealed the Byrd  Amendment, millions of dollars in anti -dumping and countervailing duties 
charged on Brazilian and other Members' exports were still being illegally disbursed to US domestic 
petitioners . Brazil called on the United States to fully comply with the DSB's rec ommendations and 
rulings in this dispute . 
2.4.  The representative of  Canada  said that Canada wished to thank the European Union for placing 
this item on the Agenda of the present meeting. Canada shared the EU's view that this dispute had 
to remain subject to mo nitoring by the DSB until the United States ceased to apply the measures at 
issue in this dispute . 
2.5.  The representative of the United States  said that as the United States had noted at previous 
DSB meetings, the Deficit Reduction Act – which included a provision repeal ing the Continued 
Dumping and Subsidy Offset Act of  2000 – had been enacted into law in February  2006.  Accordingly, 
the United States had taken all actions necessary to implement the DSB's recommendations and 
rulings in these disputes . The United States recalled , furthermore,  that the EU had acknowledged 
that the Deficit Reduction Act did not permit the distribution of duties collected on goods entered 
after 1  October  2007, more than 10  years ago.  With respect to the EU's request for status reports 
in this matter, as the United  States had explained at previous DSB meetings, there was no obligation 
under the DSU to provide further status reports once a Member announced that it had implemented 
the DSB's recommendations and rulings, regardless o f whether the complaining party disagreed 
                                                
5 "Notice of Commencement of a Compliance Proceeding Pursuant to Section 129 of the Uruguay Round 
Agreements Act", 83 Fed. Reg. 59,359 ( 23 November  2018).  WT/DSB/M/423  
 
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 about compliance . The practice of Members confirm ed this widespread understanding of Article 21.6 
of the DSU as no status report had been submitted by any Member in any dispute this month, or for 
previous DSB meeti ngs, where the responding Member ha d claimed compliance and the complaining 
Member disagree d. The EU had explained that, in its view, the issue of compliance "remains  
unresolved for the purposes of Article 21.6 ". Under such a standard, the United States  would expect 
the EU to provide status repo rts in any dispute where there wa s a disagreement between the parties 
on the EU 's compliance, including the "EC – Large Civil Aircraft" dispute (DS316) . Given the EU's 
failure to provide a status report in the DS316  dispute again prior to the present meeting, the United 
States failed to see how the EU's behaviour was consistent with the alleged systemic view it had 
been espousing under this Agenda item for more than ten years . As the EU was aware, the United 
States ha d announced in this dispute that it had implemented the DSB's recommendations and 
rulings. If the EU dis agreed, there would simpl y appear to be a disagreement between the parties 
to this dispute about the situation of compliance . 
2.6.  The representative of  the European Union  said that t he United States had mentioned that the 
EU ha d failed to provide status reports in one or more disputes in which the EU was involved.  The 
EU disagree d with that statement. The EU had  provided status reports for all disputes that involve d 
the EU.  For purposes of the present meeting, there was only one such dispute:  the "EC – Approval 
and Marketing of Biotech Products" (DS291) dispute . The United States ha d referred to the "EC – 
Large Civil Aircraft" dispute (DS316)  at the present meeting . As the EU had indicated in previous 
DSB meetings, there was a difference between the "EC – Large Civil Aircraft" dispute (DS316) and 
the "US — Offset Act (Byrd Amendment)" (DS217 , DS234 ) dispute s. In the "US — Offset Act (Byrd 
Amendment)" (DS217 , DS234 ) dispute s, the dispute s had been adjudicated and there were no 
further compliance proceedings pending . In any event, in relation to the "EC – Large Civil Aircraft" 
dispute (DS316) , the U nited States had requested a separate Agenda item on this matter.  The EU  
would respond to US comments regarding that dispute under th at Agenda  item.  
2.7.  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 Chairperson  said that t his item was on the Agenda of the present meeting at the r equest 
of the United  States . She then  invite d the representative of the United States to speak . 
3.2.  The representative of the United  States  said that the United States noted that, once again, the 
EU had not provided Members with a status report concerning the "EC – Large Civil Aircraft" dispute 
(DS316) . As the United States had noted at several recent DSB meetings , the EU had argued that 
Article 21.6 of the DSU required that : "the issue of implementation … shall remain on the DSB's 
agenda until the issue is resolved".  And t he EU had argued that where the EU did not agree with 
another Member's "assertion that it has implemented the DSB recommendations and rulings", "the 
issue r emains unresolved for the purposes of Article  21.6 DSU" . This stated EU position simply 
contradicted the EU's actions in this dispute.  The EU had admitted that there remained a 
disagreement as to whether the EU had complied in this dispute . Under the EU's own view, therefore, 
the EU should have been providing status reports. Yet it had once again failed to do so . At the 
present meeting, the EU should have welcome d the opportunity that the United States had afford ed 
it to update the DSB with any detail on it s alleged implementation efforts . 
3.3.  The representative of the European Union  said that as the EU had indicated at previous DSB 
meetings, there was a difference between the "EC – Large Civil Aircraft" dispute (DS316) and the 
"US — Offset Act (Byrd Amendment)"  dispute s (DS217 , DS234 ). In the "US — Offset Act (Byrd 
Amendment)" dispute s (DS217 , DS234 ), the dispute s had been adjudicated and there were no 
further compliance proceedings pending . Under Article  21.6 of the DSU, the issue of implementation 
shall remain  on the DSB's Agenda until the issue was resolved . In the "US — Offset Act (Byrd 
Amendment)" (DS217 , DS234 ) dispute s, the EU d id not agree with the US assertion that the United 
States had implemented the DSB's recommendations and rulings . As a result, the issue remain ed 
unresolved for purposes of Article 21.6 DSU. In the "EC – Large Civil Aircraft" dispute (DS316) , once WT/DSB/M/423  
 
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the Appellate Body report on compliance had been issued, the EU had notified to the WTO a new set 
of measures in a compliance communication , submitt ed at the 28  May 2018 DSB meeting . With 
respect to the measures included in that communication, the United  States had expressed the view 
that the EU had not yet fully complied with the DSB 's recommendations . In response  to this US view , 
on 29  May 2018, the EU had requested consultations with the United States pursuant to  Articles  4 
and 21.5 of the DSU . After the consultations had failed to resolve the disagreement, the E U had 
asked for the establishment of a compliance panel. The compliance panel had been  established by 
the DSB on 27 August 2018. Therefore, compliance proceedings in this dispute were still ongoing 
and whether or not the matter was resolved was the very subject matter of this ongoing litigation. 
With regard to the US comment on Artic le 21.6 of the DSU, the EU would be very concerned with a 
reading of this provision which would require the implementing Member to notify the status of 
implementation while litigation on this matter  was ongoing . This view wa s further supported by 
Article 2  of the DSU on the administration of the dispute settlement rules and procedures . In the 
dispute  at hand, and further to  disagreement between the parties regarding  compliance, the DSB 
had exercised its function through the establishment of a compliance pan el. The matter was currently 
with the adjudicators and had therefore been temporarily taken out of the DSB 's surveillance .  
3.4.  The DSB took note of the statements.  
4  STATEMENT BY THE UNI TED STATES ON THE PR ECEDENTIAL VALUE OF PANEL OR 
APPELLATE BODY REPOR TS UND ER THE WTO AGREEMENT  AND DSU  
4.1.  The Chairperson  said that t his item was on the Agenda of the present meeting at the request 
of the United  States . She then  invite d the representative of the United States to speak . 
4.2.  The representative of the United  States  said t hat for more than 15 years, the United States 
had sounded the alarm about the Appellate Body exceeding its authority and straying from the role 
agreed for it by WTO Members.  More recently, over the course of 2018, the United States ha d 
delivered detailed interventions here at the DSB that had comprehensively outlined  specific  
concerns.  At several DSB meetings, including at the 28 February 2018 DSB meeting, the United 
States  had explained that the Appellate Body simply d id not have the a uthority to deem someone 
who was not an Appellate Body member to be a member. 6 At the  22 June 2018 DSB meeting, the 
United States  had highlighted how the Appellate Body ha d repeatedly issued its reports beyond the 
90-day deadline mandated by the DSU.7 At the 27 August 2018 DSB meeting, the United States  
had outlined how the Appellate Body ha d consistently engaged in review o f panel fact -finding, 
including  the meaning of a Member 's municipal law, despite lacking the authority to do so. 8 At the 
29 October 2018 DSB meeting , the United States had explained that the Appellate Body 's issuing 
advisory opinions by making findings that were not necessary to resolve a dispute was contrary to 
the DSU. 9 At the present meeting , the United States would  focus on the Appell ate Body 's misguided 
insistence that its reports had to  serve as precedent "absent cogent reasons ". Before moving to the 
detailed interpretive discussion under this Agenda item, the United States  wished to repeat the US 
position expressed at the 12 December 2018 General Council meeting: the United States was ready 
to engage with other Members on these and other important issues related to the proper functioning 
of the dispute settlement system. As part of this process, it w ould be critical for  Members to consider 
why the Appellate Body ha d felt free to depart from the clear rules Members ha d agreed to. Through 
                                                
6 See, e .g., US Statement at the 31 August 2017, Meeting of the DSB, available at: 
https://geneva.usmission.gov/wp -content/uploads/sites/290/Aug31.DSB_.Stmt_.as -delivered.fin_.public.pdf 
and US Statement at the 28 February 2018, Meeting of the DSB, available at: h ttps://geneva.usmission.gov/wp -
content/uploads/sites/290/Feb28.DSB_.Stmt_.as -delivered.fin_.public -1.pdf.  
7 Statement by the United States Concerning Article 17.5 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes, Meeting of  the DSB on 22 June 2018, available at: 
https://geneva.usmission.gov/wp -content/uploads/sites/290/Jun22.DSB_.Stmt_.as -
delivered.fin_.public.rev_.pdf.  
8 Statement by the United States Concerning Article 17.6 of the "Understanding on Rules and Procedures 
Governing the Settlement of Disputes" and Appellate Review of Panel Findings of Fact, Including Domestic Law, 
Meeting of the DSB on 27 August 2018, available at: https://geneva.usmission.gov/wp -
content/uploads/sites/290/Aug27.DSB_.Stmt_.as -delivered.fin_.rev_ .public.pdf.  
9 Statement by the United States Concerning the Issuance of Advisory Opinions on Issues Not Necessary 
to Resolve a Dispute, Meeting of the DSB on 29 October 2018, available at:  https://geneva.usmission.gov/wp -
content/uploads/sites/290/Oct29.DS B_.Stmt_.as -delivered.fin_.rev_.public.pdf.  WT/DSB/M/423  
 
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 such a discussion, Members  could consider how best to ensure that the dispute settlement system 
adhere d to WTO rules as written.  
4.3.   By wa y of introduction, the United States addressed the following issue: "WTO Members have 
the exclusive authority to adopt authoritative interpretations in the Ministerial Conference, and the 
DSU does not assign precedential value to panel or Appellate Body re ports." The United States said 
that it had requested th is Agenda item to draw Members ' attention to an important systemic issue , 
the concern that the Appellate Body ha d sought to change the nature of WTO dispute settlement 
reports from ones that assist ed in resolving a dispute, and may be considered for persuasive value 
in the future, to ones that carried  precedential weight, as if WTO Members had agreed in the DSU 
to a common law -like system of precedent. This was an issue of fundamental importance to the 
WTO. It was not for WTO adjudicators to seek to change the nature of the WTO dispute settlement 
system as agreed by Members in the text of the DSU. A failure by WTO adjudicators to follow the 
agreed rules, including those rules that define d the adjudicator s' role and authority, undermine d 
Members ' support for the WTO dispute settlement system.  In short, the DSU d id not assign 
precedential value to panel or Appellate Body reports adopted by the DSB or interpretations 
contained in those reports. Instead, it r eserve d such weight to authoritative interpretations adopted 
by WTO Members in a different body, the Ministerial Conference or General Council, acting not by 
negative consensus but by positive consensus and under different procedures that promote d 
awarenes s and participation by Members.10 The DSU explicitly note d that the dispute settlement 
system operate d without prejudice to this interpretative authority.11 The DSU state d that it exist ed 
to resolve disputes arising under the covered agreements, not under pa nel or Appellate Body 
interpretations of those agreements, and that a panel or the Appellate Body was to apply customary 
rules of interpretation of public international law in assisting the DSB in determining whether a 
measure was inconsistent with a Membe r's commitments under the covered agreements. Those 
rules of interpretation d id not assign to interpretations given as part of dispute settlement a 
precedential value for purposes of discerning the meaning of agreement text. In this, the DSU 
presented no c hange from the dispute settlement system under the "General Agreement on Tariffs 
and Trade " (1947) (GATT), a point which the Appellate Body had understood and expressed clearly 
in its early years. Remarkably, the Appellate Body ha d more recently suggested that a panel had to  
follow a prior Appellate Body interpretation absent undefined "cogent reasons " for departing from 
that interpretation. The Appellate Body 's statement was wrong under the DSU and the WTO 
Agreement, as the United States  would  explain in detail. WTO Members had not establish ed a 
common law system or a system of precedent, but rather they had reserved to themselves, in the 
Ministerial Conference, the authority to establish precedent through an "authoritative 
interpre tation ".12 It was not for WTO adjudicators, through their reports, which were adopted by 
negative consensus, to change the nature of the WTO dispute settlement system, and certainly WTO 
adjudicators may not and must not alter the rights and obligations of M embers under the covered 
agreements.13 What was more, the United States would not agree, as a matter of the design of an 
adjudicatory system, that assigning precedential weight (or a "cogent reasons " approach) was 
appropriate or positive for the WTO. The Ap pellate Body 's assertion diminishe d the value of the work 
of panels. It inhibit ed the engagement of panels with the text of the covered agreements, contrary 
to a panel 's function to make an objective assessment of the applicability of and conformity with t he 
covered agreements. The result of diminishing the role of each panel was that errors w ould become 
locked in , and persuasive interpretations were less likely to arise from the dispute settlement 
system. To think otherwise would require one to consider th at the first time  the Appellate Body 
consider ed an interpretive issue, it w ould necessarily render not only a correct  interpretation, but 
the best interpretation. The United States consider ed that proposition to be contrary to experience 
and human nature. Through its statement at the present meeting , the United States again attempt ed 
to facilitate a broader discussion on whether Members share d a common understanding of, and 
respect for, the rules they had written and agreed to. To advance this discussion, in its statement 
the United States w ould highlight the relevant text of the WTO Agreement and the DSU. The United 
States  would then explain why recent Appellate Body reports d id not provide a justificatio n or 
legitimate basis for a panel or the Appellate Body to disregard the pertinent provisions of the WTO 
Agreement or the DSU that d id not accord precedential value to adopted dispute settlement reports.  
                                                
10 WTO Agreement, Art icle IX:2. 
11 Article 3.9 of the DSU . 
12 WTO Agreement, Art icle IX:2. 
13 Article 3.2 and 19.2  of the DSU . WT/DSB/M/423  
 
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4.4.  With regard to the issue that t he DSU d id not require, or even permit, a panel to apply as law 
or controlling "precedent" a prior Appellate Body interpretation , the United States said that t he DSU 
did not assign precedential value to panel or Appellate Body reports adopted by the DSB, or 
interpre tations contained in those reports. Instead, it reserve d such weight to authoritative 
interpretations adopted by WTO Members in a different body, the Ministerial Conference or General 
Council, acting not by negative consensus but under different procedures . The DSU explicitly note d 
that the dispute settlement system operate d without prejudice to this interpretative authority. The 
DSU state d that a panel or the Appellate Body was to apply customary rules of interpretation of 
public international law in assis ting the DSB in determining whether a measure was inconsistent with 
a Member 's commitments under the covered agreements. Those rules of interpretation d id not assign 
to interpretations given as part of dispute settlement a precedential value for purposes o f discerning 
the meaning of agreement text. A panel was not required – nor was it permitted – to ignore this 
task and instead simply treat prior panel or Appellate Body reports as binding "precedent".  
4.5.  With regard to t he function of panels and the Appellate  Body under the DSU , the United States 
said that, f undamentally, the purpose of the WTO dispute settlement system was to resolve trade 
disputes between Members. In Article 3.7  of the DSU , Members had agreed  that: "[t]he aim of the 
dispute settlement mechan ism is to secure a positive solution to a dispute ". To achieve this focused 
aim, Members  had established in the DSU particular processes for resolving disputes promptly, 
including panels, and the Appellate Body where appropriate, assisting the DSB for this  purpose.  
When a Member ha d not been able to resolve a dispute with another Member through consultations, 
it could  request the DSB to establish a panel to examine a matter. Through the standard terms of 
reference for panels in Article 7 of the DSU, the DSB  charge d the panel with two tasks: to "examine 
… the matter referred to the DSB " in a panel request and "to make such findings as will assist the 
DSB in making the recommendations " provided for in the DSU.14 Article 19.1 of the DSU was explicit 
in what the recommendation was: "[w]here a panel or the Appellate Body concludes that a measure 
is inconsistent with a covered agreement, it shall recommend that the Member concerned bring the 
measure into conformity with that agreement ". Thus, it was through such a finding of 
WTO-inconsistency and through such a recommendation "to bring the measure into conformity " that 
panels carr ied out the terms of reference "to make such findings as will assist the DSB in making 
the recommendations " provided for in the covered ag reements.15 Members had reinforced in Article 
11 of the DSU that the "function of panels is to assist the DSB in discharging its responsibilities 
under [the DSU] ". In exercising this function, Article 11 of the DSU  stated that a panel "should make 
an object ive assessment of the matter before it, including an objective assessment of the facts of 
the case and the applicability of and conformity with the relevant covered agreements ". That 
objective assessment call ed on the panel to weigh the evidence and make f actual findings based on 
the totality of the evidence. That objective assessment also call ed on the panel to interpret the 
relevant provisions of the covered agreements to determine how they appl ied to the measures at 
issue and whether those measures confo rmed with a Member 's commitments.16 Article 3.2 of the 
DSU further inform ed the function of a panel established by the DSB to assist it. Article 3.2 of the 
DSU explain ed that "Members recognize that [the dispute settlement system] serves to preserve 
the rig hts and obligations of Members under the covered agreements, and to clarify the existing 
provisions of those agreements in accordance with customary rules of interpretati on of public 
international law".  Thus, it was "the rights and obligations of Members u nder th[ose] covered 
agreements " that were fundamental. And for purposes of understanding the "existing provisions " of 
the covered agreements – namely , their text – the DSU direct ed WTO adjudicators to apply 
"customary rules of interpretat ion of public int ernational law",  reflected in Articles 31 to 33 of the 
Vienna Convention on the Law of Treaties . Thus, a panel 's task was straightforward and also limited. 
The Appellate Body 's task under the DSU was similarly limited to assisting the DSB in discharging 
its functions under the DSU, albeit more so than panels. Under Article 17.6  of the DSU , an appeal 
was "limited to issues of law covered in the panel report and legal interpr etations developed by the 
panel".  Further, under Article 17.13  of the DSU , the Appe llate Body was only authorized to "uphold, 
modify or reverse the legal findin gs and conclusions of the panel".  Since a panel 's function under 
Article 11 of the DSU was  "to assist the DSB in discharging its responsibilities " under the DSU, the 
Appellate Bod y, in reviewing a panel 's legal conclusion or interpretation, was thus also assisting the 
                                                
14 Article 7.1 of the DSU . 
15 Article 7.1 of the DSU . 
16 Article 11 of the DSU ("[a] ccordingly, a panel should make an objective assessment of the matter before 
it, including an objective assessment of the facts of the case and the applicability of and conformity with the 
relevant covered agreeme nts ..."). WT/DSB/M/423  
 
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 DSB in discharging its responsibilities to find whether the responding Member 's measure was 
consistent with WTO rules.  
4.6.  With regard to the issue that t he DSU d id not establish a system of precedent , the United 
States said that a s was clear from the for egoing, there was no provision in the DSU that establishe d 
a system of "case-law" or "precedent",  or otherwise require d that a panel apply the provisions of 
the covered a greements consistently with the adopted findings of previous panels or the Appellate 
Body. Nor was there any provision that refer red to "cogent reasons " or suggest ed that a panel had 
to justify legal findings not consistent with the reasoning set out in pr ior reports. Indeed, were a 
panel to decide to simply apply the reasoning in prior Appellate Body reports alone, it would fail to 
carry out its function, as established by the DSB, under Articles 7.1, 11, and 3.2 of the DSU to make 
findings on the applicab ility of existing provisions of the covered agreements, as understood 
objectively through customary rules of interpretation. In so doing, the panel would risk creating 
additional obligations for Members that were beyond what ha d been provided for in the co vered 
agreements – an act strictly prohibited under Articles 3.2 and 19.2 of the DSU. To say that an 
Appellate Body interpretation in one dispute was precedent or controlling for later disputes would 
effectively convert that interpretation into an authorit ative interpretation of a covered agreement. 
But such an approach would directly contradict the agreed text of the WTO Agreement. In Article 
IX:2, the WTO Agreement provide d that: "[t]he Ministerial Conference and the General Council shall 
have the exclusi ve authority to adopt interpretations  of this Agreement and of the Multilateral Trade 
Agreements " [italics added] . Through this provision, Members  had reserved the "exclusive authority " 
to adopt interpretations to themselves acting in the Ministerial Conference (or General Council), not 
the DSB. The specification that the authority of the Ministerial Conference or General Council to 
adopt an authoritative interpretation was "exclusive",  and the requirements in the WTO Agreement 
for exercising this authority, ma de clear that such authority was not exercised by the DSB when it 
adopt ed a panel or Appellate Body report.  The WTO Agreement specifie d the process for adopting 
such an authoritativ e interpretation. It provide d that "[i]n the case of an interpretation of a 
Multilateral Trade Agreement in Annex 1, [the Ministerial Conference or General Council] shall 
exercise their authority on the basis of a recommendation by the Council overseeing  the function of 
that Agreement". Proceeding in such a manner would provide for transparency, participation, and 
consent of all Members. It would permit all Members to become aware of the issue, to discuss the 
issue with other Members, and to participate – first in the relevant Council and then at the Ministerial 
Conference or in the General Council – based on instructions from capital reflecting input from all 
relevant stakeholders. And, critically, in light of the relevant decision -making rules and practice  in 
the WTO, the recommendation by the relevant Council and the subsequent adoption by the 
Ministerial Conference or General Council would normally proceed based on the consensus of WTO 
Members. This would thereby ensure that Members consent to an interpre tation that could serve as 
precedent in future disputes. The level of transparency, participation, and consent by Members in 
the process of adopting an authoritative interpretation d id not resemble the process for adopting 
reports under the DSU. One obviou s difference concern ed the participation by Members. Whereas 
the process for adopting an authoritative interpretation would involve all Members, a report adopted 
by the DSB might  reflect varying degrees of participation by only a handful of Members.  
4.7.  The U nited States said that a s discussed, Members had set out a special decision -making rule 
for adopting an authoritative interpretation, which was different from the negative consensus 
adoption that applie d to reports under the DSU. Given the important implic ations that flow ed from 
an authoritative interpretation, it ma de sense that Members would have agreed to the process set 
out in Article IX:2  of the WTO Agreement, which envision ed participation by the full Membership and 
informed consent. At the same time,  it made little sense to suggest , given these provisions and the 
structure described , that a particular interpretation contained within a report that reflect ed input 
from only a limited subset of Members, and that ha d been adopted by negative consensus, co uld 
similarly be regarded as setting out an authoritative interpretation for all disputes and all Members.  
That Article IX:2 of the WTO Agreement reserve d to WTO Members in the Ministerial Conference the 
critical authority to adopt authoritative interpreta tions ha d been emphasized by Members. In the 
discussion on "amicus procedures " promulgated by the Appellate Body, for example, numerous 
Members had spoke n in the General Council to argue that it was for Members to exercise their 
exclusive authority to adop t an authoritative interpretation under Article IX:2 of the WTO Agreement 
should Members consider it appropriate to permit amicus submissions in disputes generally.17 Article 
                                                
17 See Minutes of Meeting of the General Council on 22 November 2000, WT/GC/M/60.  WT/DSB/M/423  
 
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IX:2 of the WTO Agreement was conclusive that there was but one means in the WTO t o obtain an 
authoritative interpretation. But if this had not been enough, the DSU also expressly confirm ed that 
panel and Appellate Body reports d id not set out authoritative interpretations. Article 3.9 of the DSU 
stated that: "[t]he provisions of this Understanding are without prejudice to the rights of Members 
to seek authoritative interpretation of provisions of a covered agreement through decision -making 
under the WTO Agreement or a covered agreement which is a Plurilateral Trade Agreement ". Thus, 
WTO Members had again expressed that the adoption by negative consensus of an interpretation 
contained in a panel or Appellate Body report d id not make that interpretation authoritative, which 
could only be adopted by the Ministerial Conference (or General C ouncil) acting according to different 
decision -making rules. Put differently, if the DSB d id not have the authority under the DSU to adopt 
an authoritative interpretation, then a panel or the Appellate Body assisting the DSB d id not have 
this authority eit her. This d id not mean that the United States consider ed a prior panel or Appellate 
Body interpretation to be without any value. For example, to the extent that a panel f ound prior 
Appellate Body or panel reasoning to be persuasive, a panel could  refer to that reasoning in 
conducting its own objective assessment of the matter. Such a use of prior reasoning would likely 
add to the persuasiveness of the panel 's own analysis, whether or not the panel agree d with the 
prior reasoning. But considering an interpre tation in a prior Appellate Body report was very different 
from a statement that the interpretation was controlling or "precedent " in a later dispute.  
4.8.  With regard to the issue that p anel reports were not treated as precedent under the GATT 
dispute settleme nt rules and procedures , the United States note d that not treating an interpretation 
in an adopted report as controlling or a precedent was consistent with the treatment of reports under 
the GATT dispute settlement rules and procedures.  There had been  no question that GATT dispute 
settlement had not treat ed reports as binding precedent. For example, a Report by the Chairman of 
the GATT Negotiating Group on Dispute Settlement had noted that : "[s]everal delegations express 
the view than an appeals procedure m ight lead to the dilution of the importance of panels and, 
unless the appellate decisions were submitted for adoption by the Council, of the authority of the 
CONTRACTING PARTIES ". But the Chair man had gone  on to record that : "[o]ther delegations note 
that despite the creation of an appellate body, the CONTRACTING PARTIES would retain their 
authority to interpret the General Agreement pursuant to Article XXV [of the GATT] ".18 A draft text 
on dispute settlement prepared by the GATT Secretariat at the request o f the Negotiating Group had 
recorded the same view: "[t]he CONTRACTING PARTIES retain their authority to interpret the 
General Agreement pursuant to Article XXV ".19 Provisions of the GATT dispute settlement rules and 
procedures – provisions nearly identical  to analogous provisions of the DSU – confirm ed that GATT 
panels had functioned to assist the Contracting Parties in making the recommendations or in giving 
the rulings provided for in the GATT – not to provide authoritative interpretations.  Paragraph F(b)(1) 
of the Montreal Rules had provided that GATT panels would have standard terms of reference.20 Just 
like Article 7.1  of the DSU , this text had made explicit that GATT panels had functioned to assist the 
Contracting Parties in making the rec ommendations to bring a measure found inconsistent with the 
GATT into conformity with those rules. The terms of reference of GATT panels, like WTO panels 
today , had not empower ed them to make interpretations that would be considered precedent for 
future pa nels. Paragraph A1 of the Montreal Rules21 had included language identical in relevant part 
to the language in Article 3.2 of the DSU on the WTO dispute settlement system preserving the 
rights and obligations of Member s and serving to clarify the existing p rovisions of the covered 
agreements. The use of "clarify " in this text had not authorize d GATT panels to provide 
interpretations that would constitute precedent. Rather, it had simply been a statement of what 
Contracting Parties had agreed flowed from the GATT dispute settlement system when it operated 
in accordance with the agreed provisions.  The DSU had also carried forward the GATT 's 
                                                
18 Negotiating Group on Dispute Settlement: Report by the Chairman,  MTN.GNG/NG13/W/43, para. 7 
(18 July 1990).  
19 Negotiating Group on Dispute Settlement: Draft Text on Dispute Settlement, MTN.GNG/NG13/W/45 
(General Provisions, para. 5) (21 September 1990).  
20 "Decision of 12 April 1989 on Improvements to the GATT Dispute Settlement Rules and Procedures" 
("Montreal Rules") , para. F(b)(1) ("To examine, in the light of the relevant GATT provisions, the matter refe rred 
to the CONTRACTING PARTIES by (name of contracting party) in document L/... and to make such findings as 
will assist the CONTRACTING PARTIES in making the recommendations or in giving the rulings provided for in 
Article XXIII:2.").  
21 Montreal Rules, p ara. A1 ("Contracting parties recognize that the dispute settlement system of GATT 
serves to preserve the rights and obligations of contracting parties under the General Agreement and to clarify 
the existing provis ions of the General Agreement. It is a cen tral element in providing security and predictability 
to the multilateral trading system.").  WT/DSB/M/423  
 
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 understanding that the "aim of the CONTRACTING PARTIES [in dispute settlement] has always been 
to secure a positive soluti on to the dispute "22 – not to render authoritative interpretations. The 
approach to dispute settlement under the GATT had never been understood as giving adjudicators 
the authority to make interpretations that would constitute precedent for the Contracting Parties 
and future adjudicators. That authority had been  understood to reside in the CONTRACTING PARTIES 
acting under Article XXV. The GATT dispute settlement language carried forward into the DSU d id 
not provide panels and the Appellate Body such authorit y. And as noted previously, Members had 
agreed to provisions in both the WTO Agreement (in Article IX:2 ) and the DSU  (in Article 3.9 ) that 
had made explicit what had been understood and practiced in the GATT.  
4.9.  With regard to the issue that t he Appellate Bo dy's own reports d id not support a proposed 
"cogent reasons" approach , the United States said that w ith increasing frequency, the Appellate 
Body ha d summarily suggested that, absent cogent reasons, an adjudicatory body should "resolve 
the same legal questi on in th e same way in a subsequent case".23 In doing so, the Appellate Body 
would seem to consider the interpretation found in Appellate Body reports to be authoritative. Yet, 
in claiming this authority, the Appellate Body ha d not grappled with the relevant legal text, discussed 
above, or even with the Appellate Body 's own prior reports. As the United States would  discuss, 
these reports d id not provide a basis for a panel to disregard pertinent provisions of a panel 's function 
under the DSU. The Appellate Body, in its report in the "Japan – Alcoholic Beverages II " disputes 
(DS8, DS10, DS11) , properly understood the value the DSU assigns to prior reports. However, 
several years later, and without any change in the relevant text o f the DSU or the WTO Agreement, 
the Appellate Body asserted a very different approach in the "US – Stainless Steel (Mexico)" dispute 
(DS344) , without explaining the basis for that changed approach. The statements in that report, in 
addition to constituting  obiter dicta , are fundamentally flawed and provide no support for a "cogent 
reasons " approach. Ironically, if the Appellate Body actually believed that any prior interpretation in 
an adopted report must be followed absent cogent reasons, it would not have , without any 
explanation, departed from its understanding in the "Japan – Alcoholic Beverages II " disputes (DS8, 
DS10, DS11) . 
4.10.   With regard to the issue that t he Appellate Body report in the "Japan – Alcoholic Beverages 
II" disputes (DS8, DS10, DS11) had explicitly recognized that adopted panel and Appellate Body 
reports d id not create binding precedent , the United States said that i n the "Japan – Alcoholic 
Beverages II " disputes (DS8, DS10, DS11) , the Appellate Body had explicitly found that adoption of 
reports under the WTO did not create "precedent " or assign a special status for interpretations 
reached in reports. Rather, the Appellate Body had noted that that status ha d been reserved for 
authoritative interpretations reached by the Ministerial Conference . The Appellate Body 's report in 
that appeal directly contradict ed the Appellate Body 's later statements concerning "cogent reasons ". 
In the "Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11) , the Appellate Body had been  
confronted with a question  concerning the status of panel reports adopted by the GATT Contracting 
Parties and the WTO DSB.24 Looking first to the GATT, the Appellate Body had expressed the view 
that the GATT Contracting Parties, in deciding to adopt a panel report, had not intend ed that their 
decision would constitute a definitive interpretation of the relevant provisions of the GATT.25 It had 
then added the following: "[n]or do we believe that this is contemplated under GATT 1994 ".26 The 
Appellate Body had stated that the "specific cause for this conclusion " was Article IX:2 of the WTO 
Agreement. The Appellate Body had stated the following with regard to this provision:  "[t]he fact 
that such an 'exclusive authority ' in interpreting the treaty has been established so specifically in 
the WTO Agreement is reason enough to conclude that such authority does not exist by implication 
or inadvertence elsewhere ".27 The United States  agree d. It was remarkable that the Appellate Body 
had later contradicted this statement in the "US – Stainless St eel (Mexico)" dispute (DS344) , without 
explaining any basis for so doing, such as that it had considered that it had wrongly decided the 
"Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11) . In the "Japan – Alcoholic Beverages 
II" disputes (DS8, DS1 0, DS11) , the Appellate Body had also explained that the decisions to adopt 
panel reports under Article XXIII of the GATT had been  different from joint action of the Contracting 
                                                
22 Annex: Agreed Description of the Customary Practice of the GATT in the Field of Dispute Settlement, 
L/4907, para. 4.  
23 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 160.  
24 "Japan – Alcoholic Beverages II" (DS8, DS10, DS11)  (AB), p. 12.  
25 "Japan – Alcoholic Beverages II" (DS8, DS10, DS11)  (AB), p. 13.  
26 "Japan – Alcoholic Beverages II" (DS8, DS10, DS11)  (AB), p. 13.  
27 "Japan – Alcoholic Beverages II" (DS8,  DS10, DS11)  (AB), p. 13.  WT/DSB/M/423  
 
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Parties under Article XXV of the GATT. The Appellate Body had considered that under the WTO 
Agreement the nature of adopted panel reports continued to differ from interpretations made under 
the WTO Agreement by the Ministerial Conference or the General Council.28 According to the 
Appellate Body, "[t]his is clear from a reading of Art icle 3.9 of the DSU ". The United States agreed,  
as Article 3.9 of the DSU confirm ed that panel and Appellate Body reports d id not set out 
authoritative interpretations.  Thus, the Appellate Body in an early report shortly after conclusion of 
the Uruguay Rou nd had made clear that the DSB c ould not supplant the "exclusive authority " of the 
Ministerial Conference and the General Council to adopt, by positive consensus,29 an "authoritative 
interpretation " of a covered agreement, as explicitly established in Artic le 3.9  of the DSU30 and WTO 
Agreement Article IX:2.31 The Appellate Body Report in the "Japan – Alcoholic Beverages II " disputes 
(DS8, DS10, DS11)  had also made clear that adopted panel reports were often considered by 
subsequent panels, and could  be taken into account where they are relevant, but "they are not 
binding ".32 As stated earlier, the United States consider ed that a panel could  take into account the 
reasoning in prior reports and, to the extent a panel finds the reasoning persuasive, rely  on that 
reasoning in conducting its own objective assessment of the matter. To be clear, the United States 
would encourage this and expect ed prior reports could  have valuable insight. This was why parties 
to a dispute often cite d to prior reports for thei r persuasive value. But this was very different than 
saying panels were bound to follow prior Appellate Body reports, or that they could  rely on those 
reports instead of conducting their own objective assessment.  
4.11.   With regard to the issue that t he Appellate  Body report in the "US – Stainless Steel (Mexico)" 
dispute (DS344) d id not support the "cogent reasons" approach , the United States said that  the 
Appellate Body r eport in the "US – Stainless Steel (Mexico)" dispute (DS344)  contain ed the Appellate 
Body's first effort to introduce the concept of "cogent reasons".  The Appellate Body 's articulation of 
the "cogent reasons " approach had comprised several disparate statements; key among them was 
the contention that "[e]nsuring 'security and predictability ' in the  dispute settlement system, as 
contemplated in Article  3.2 of the DSU, implies that, absent cogent reasons, an adjudicatory body 
will resolve the same legal question in th e same way in a subsequent case".33 The United States 
explained  how this report d id not support a "cogent reasons " approach for several reasons. The 
Appellate Body 's statement was, by definition, an "advisory opinion " or obiter dicta  that, even under 
the Appellate Body 's logic, c ould not serve as a precedent. More importantly, the "cogen t reasons " 
approach was fundamentally flawed and at odds with the text of the DSU and WTO Agreement.  
4.12.   With regard to the issue that t he Appellate Body's statements concerning cogent reasons in 
the "US – Stainless Steel (Mexico)" dispute (DS344) were obiter dicta, the United States said that  
as an initial matter, and even setting aside for a moment the fundamental flaws under the DSU with 
the "cogent reasons " approach, the United States would see no basis to cite and follow Appellate 
Body statements that ha d appeared in the "US – Stainless Steel (Mexico)" dispute (DS344) . In the 
"US – Stainless Steel (Mexico)" dispute (DS344) , the discussion of "cogent reasons " appear ed in the 
context of Mexico 's appeal under Article 11  of the DSU .34 Mexico had argued on appeal that the 
Panel had acted inconsistently with Article 11 of the DSU by failing to follow what it had considered 
to be "well-establish ed Appellate Body jurisprudence".35 The Appellate Body had not, however, ma de 
a finding on Mexico 's appeal  under Article 11  of the DSU . Rather, it had exercised judicial economy 
on Mexico 's claim.36 Thus, there had been  no "legal finding " on Mexico 's claim of error, and the 
Appellate Body 's discussion was not reasoning "resolv[ing a] legal question ". The "cogent reasons " 
approach (as explained by the Appellate Body) would thus not even apply  to the Appellate Body 's 
own statement on "cogent reasons ". That the Appellate Body had made no legal finding on Mexico 's 
appeal was made explicit by the Appellate Body 's concl usion at paragraph 162 of its report, where 
it had stated the following:  "[s]ince we have [elsewhere in the report] corrected the Panel 's 
                                                
28 "Japan – Alcoholic Beverages II" (DS8, DS10, DS11)  (AB), pp. 13 -14. 
29 WTO Agreement, Art icle IX:1. 
30 DSU, Art icle 3.9 ("[t] he provisions of this Understanding are without prejudice to the rights of Members 
to seek authoritative interpretation of provisions of a covered agreement through decision -making under the 
WTO Agreement or a covered agreement which is a Plurilateral Trade Agreement.").  
31 WTO Agreement, Art icle IX:2 (" [t]he Ministerial Conference and the General Council shal l have the 
exclusive authority to adopt interpretations of this Agreement and of the Multilateral Trade Agreements.").  
32 "Japan – Alcoholic Beverages II" (DS8, DS10, DS11)  (AB), p. 14.  
33 "US – Stainless Steel (Mexico)" (DS344) , para. 160  
34 "US – Stainless Steel (Mexico)" (DS344) , para. 154.  
35 "US – Stainless Steel (Mexico)" (DS344) , para. 154.  
36 "US – Stainless Steel (Mexico)" (DS344) , para. 162.  WT/DSB/M/423  
 
- 17 - 
 
 
 
  
 
 erroneous legal interpretation and have reversed all of the Panel 's findings and conclusions that have 
been appealed, we do not, in this case, make an additional finding that the Panel also failed to 
discharge its duties under Article 11 of the DSU ".37 Therefore, the entire discussion of "cogent 
reasons " and any reasoning leading up to the conclusion not to make a finding on Mexico 's appeal 
was, by definition, an "advisory opinion " or obiter dicta . As the United States  had explained in its 
statement made at  the 29 October 2018  DSB meeting , "advisory opinions " were commonly defined 
as "a non -binding statem ent on a point of law given by [an adjudicator] before a case is tried or 
with resp ect to a hypothetical situation".38 Obiter dictum  had been defined as "an opinion not 
necessary to a judgment; an observation as to the law made by a judge in the course of a  case, but 
not necessary to its decision, and therefore of no binding effect ".39 Given that the Appellate Body 
had expressly declined to make any finding on Mexico 's Article 11 appeal, the preceding discussion 
– including on "cogent reasons " – was, by defin ition, merely advisory, or dicta.  In this regard, the 
United States  noted that the Appellate Body itself elsewhere confirm ed that, on its approach, 
statements that were not necessary to "resolve [a] legal question " would not be subject to its 
approach. At paragraph 158 of its report, the Appellate Body itself state d the following:  "[i]t is well 
settled that the Appellate Body reports are not binding, except with respect to resolving the particular 
dispute between the parties. This, however, does not mean th at subsequent panels are free to 
disregard the legal interpretations and the ratio decidendi  contained in previous Appellate Body 
reports that have been adopted by the DSB ".40 The implication of this statement, particularly the 
second sentence, was that the Appellate Body in this report consider ed panels could  not disregard 
the "ratio decidendi " contained in previous reports adopted by the DSB. Given that the Appellate 
Body had not ma de findings on Mexico 's claim under Article 11  of the DSU , the Ap pellate Body 's 
"cogent reasons " analysis had not formed and could not form part of the "ratio decidendi " of the 
Report in the "US – Stainless Steel (Mexico)" dispute (DS344) . Therefore, even under the Appellate 
Body's own approach, its discussion of "cogen t reasons " was "not binding " on a subsequent panel, 
and a panel was "free to disregard " it.  
4.13.   The United States said that  more fundamentally, however, the Appellate Body 's statement 
concerning "cogent reasons " in the "US – Stainless Steel (Mexico)" dispute (DS344)  were profoundly 
flawed in several respects. These include d: (i) a failure to properly appreciate the functions of panels 
and the Appellate Body within the WTO dispute settlement system; ( ii) an erroneous interpretation 
of Article 3.2 of the DSU tha t did not reflect the text of that provision; ( iii) a reliance on reports that 
did not support a "cogent reasons " approach; ( iv) a misunderstanding (or misstatement) of why 
parties cite d prior reports; ( v) inappropriate and incomplete analogies to other international 
adjudicative fora; and ( vi) incorrect assumptions concerning the existence of a hierarchical structure 
that d id not reflect the limited task assigned to the Appellate Body in the DSU. The United States 
would  discuss each of these in turn.  
4.14.   The United States said that a f irst error concerned the Appellate Body's failure to properly 
appreciate the functions of panels and the Appellate Body within the WTO dispute settlement system, 
including Article 11 of the DSU. T he Appellate Body 's statements c oncerning "cogent reasons " 
reflect ed a failure to properly appreciate the tasks assigned to panels and the Appellate Body by the 
relevant provisions of the DSU. Although the Appellate Body purport ed to "begin [its] consideration 
with th e text of Article 11  of the DSU",  the Appellate Body subsequently ignore d the limitations of 
this text.  As discussed, Article 11 of the DSU stipulate d that: "[t]he function of panels is to assist 
the DSB in discharging its responsibilities " under the DSU and the covered agree ments. In exercising 
this function, Article 11 of the DSU stated that a panel was to conduct "an objective assessment of 
the matter before it, including an objective assessment of the facts of the case and the applicability 
of and conformity with the relev ant covered agreements ". An objective assessment call ed for the 
panel to weigh the evidence and make factual findings based on the totality of the evidence. An 
objective assessment also call ed for a panel to interpret the relevant provisions of the covered  
agreements to determine how they appl ied to the measures at issue and whether those measures 
                                                
37 "US – Stainless Steel (Mexico)" (DS344) , para. 162.  
38 See, e.g., Oxford Dictionaries, "advisory opinion" 
(https://en.oxforddictionaries.com/definition/advisory_opinion ); Statement by the United States Concerning the 
Issuance of Advisory Opinions on Issues Not Necessary to Resolve a Dispu te, Meeting of the DSB on 
29 October  2018, available at: https://geneva.usmission.gov/wp -
content/uploads/sites/290/Oct29.DSB_.Stmt_.as -delivered.fin_.rev_.public.pdf.  
39 Wharton's Law Lexicon (14th Ed. 1993).  
40 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 158.  WT/DSB/M/423  
 
- 18 - 
 
 
 
conform ed with a Member 's commitments. As  the United States had  noted previously , nowhere in 
this Article was a panel 's objective assessment linked to prior Appel late Body interpretations. Nor 
did the context of Article 3.2 of the DSU (which the United States would  discuss next) or the structure 
of WTO Agreement Article IX:2 or Article 3.9  of the DSU , support reading into Article 11  of the DSU  
a requirement for pan els to establish "cogent reasons " to depart from findings by the Appellate Body 
in a separate dispute. The Appellate Body ma de no real attempt to ground such a requirement in 
the text of Article 11 of the DSU.  
4.15.   The United States said that a s econd  error concerned the Appellate Body's erroneous 
interpretation of Article 3.2 of the DSU.  T he Appellate Body relie d on an interpretation of Article 3.2 
of the DSU that fail ed to reflect the plain reading of that provision. At paragraph 160 of its report, 
the Appellate Body state d that: "[e]nsuring 'security and predictability ' in the dispute settlement 
system, as contemplated by Article 3.2 of the DSU, implies that , absent cogent reasons, an 
adjudicatory body will resolve the same legal question in th e sam e way in a subsequent case".41 
There were a number of evident flaws in this assertion. The statement that Article 3.2 of the DSU 
"implies " an approach reveal ed the weakness of the Appellate Body 's argument. The Appellate Body 
through this language concede d that Article 3.2 of the DSU did not require or even set out a "cogent 
reasons " approach.  Also, the statement that Article 3.2 of the DSU implie d a "cogent reasons " 
approach to past Appellate Body interpretations plainly contradict ed the Appellate Body 's own 
understanding of the DSU in the "Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11) . In 
that report , after examining Article 3.9 of the DSU and Article IX:2 of the WTO Agreement, the 
Appellate Body had correctly concluded that "[t]he fact that su ch an 'exclusive authority ' in 
interpreting the treaty has been established so specifically in the WTO Agreement is reason enough 
to conclude that such authority does not exist by implication  or inadvertence elsewhere ".42 
Apparently, what the DSU "implies " could  and had change d for the Appellate Body.  Moreover , the 
Appellate Body statement that Article 3.2 of the DSU " implie [d]" a "cogent reasons " approach also 
rested on a misunderstanding of the text of Article 3.2 of the DSU . Article 3.2 of the DSU  provide d 
in relevant part:  "[t]he dispute settlement system of the WTO is a central element in providing 
security and predictability to the multilateral trading system. The Members recognize that it serves 
to preserve the rights and obligations of Members under t he covered agreements, and to clarify the 
existing provisions of those agreements in accordance with customary rules of interpretation of 
public international law ". The "it" in the second sentence of Article 3.2 of the DSU referred to the 
subject of the fi rst sentence, "the dispu te settlement system of the WTO".  In other words, Members 
had recognized that the dispute settlement system of the WTO – as set out in the DSU – serve d to 
preserve the rights and obligations of Members under the covered agreements, and the dispute 
settlement system of the WTO – as set out in the DSU – serve d to clarify the existing provisions of 
those agreements. This text of Article 3.2 of the DSU wa s neither a directive to panels or the 
Appellate Body nor an authorization for them.  There was no "shall" or "may" in this text. Instead, it 
was a statement of what Members ha d agreed flow ed from the system when it operate d in 
accordance with the provisions agreed by Members in the DSU. Moreover, the text of Article 3.2 of 
the DSU  did not contain any mention of precedent or cogent reasons, and immediate context in 
Article 3.9 of the DSU  (and WTO Agreement Article IX:2) reinforce d that these concepts could not 
be inserted through implication in Article 3.2 of the DSU . The United States also noted that the 
Appellate Body d id not appear to take seriously its own statement on "cogent reasons".  Aside from 
the Appellate Body 's own failure to resolve the issue of the value of prior adopted reports the same 
way it had resolved that question in the "Japan – Alcoholic Beverages II " disputes (DS8, DS10, 
DS11) , the Appellate Body  statement confuse d the "adjudicatory body " at issue. The relevant 
passage read:  "Article 3.2 of the DSU, implies that, absent cogent reasons, an adjudicatory body 
will resolve the same legal question in th e same way in a subsequent case".  This statement describe d 
"an adjudicatory body " – for example, the Appellate Body. But it d id not address a different 
adjudicatory body, such as a panel. Thus, whether or not the Appellate Body  statement could be 
correct as applied to "an adjudicatory body " said nothing about the approach of a different 
"adjudicatory body ", like a panel. On the other hand, if the Appellate Body had considered the DSB 
to be "an adjudicatory body",  the Appellate B ody's logic would suggest that, once a panel ha d given 
a legal interpretation adopted by the DSB, then the Appellate Body  would need to follow that adopted  
panel  interpretation "absent cogent reasons".  But the Appellate Body ha d never  suggested it would 
accept that outcome. The Appellate Body  report thus d id not address or explain the discrepancy in 
using the phrase "an adjudicatory body " to imply something about a panel 's relationship to a prior 
                                                
41 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 160.  
42 "Japan – Alcoholic Beverages II " (DS8, DS10, DS11)  (AB), p. 13.  (Emphasis added.)  WT/DSB/M/423  
 
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 Appellate Body  interpretation. For all these reasons, the App ellate Body 's reasoning on Article 3.2 of 
the DSU did not support a "cogent reasons " approach to dispute settlement.  
4.16.   The United States said that a third error concerned the Appellate Body's reliance on prior 
Appellate Body reports that did not support a "c ogent reasons" approach. The Appellate Body, in its 
discussion of cogent reasons, also cite d to its reports in the "Japan – Alcoholic Beverages II " disputes 
(DS8, DS10, DS11) , in the "US – Shrimp" dispute (Article 21.5 of the DSU – Malaysia) (DS58) , and 
in the "US – Oil Country Tubular Goods Sunset Reviews" dispute (DS268) . However, these reports 
provide d no basis for a "cogent reasons " approach. The United States said that the Appellate Body 
report in the " Japan – Alcoholic Beverages II " disputes (DS8, D S10, DS11) , in particular, was 
contrary to such an approach. In fact, the Appellate Body provide d no "cogent reasons " for departing 
from the reasoning in that prior report. This obvious failure to follow its own approach supposedly 
based on a systemic unde rstanding of the DSU rather suggest ed the "cogent reasons " approach was 
directed towards an outcome of ensuring panels follow Appellate Body  statements, regardless of the 
lack of basis in the DSU for that approach.  Rather than focus on the thrust of its de cision in the 
"Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11) , the Appellate Body dr ew attention to 
its statement in that report that adopted panel reports were "an important part of the GATT acquis ".43 
The United States had  heard some Members q uote this statement, without any explanation, as if its 
mere recitation provide d the answer to the question of precedent. But what d id it actually mean to 
say a report form ed part of the GATT acquis? Very little in isolation. Given the way it ha d been 
misunderstood and misused, it was important to recall the context in which it had been  made, which 
made clear it contradict ed, rather than support ed, the assertion for which it was often cited – and 
for which the Appellate Body appear ed to cite it in the "US – Stainless Steel (Mexico)" dispute 
(DS344)  (AB). The statement  appeared in a paragraph of the R eport in the "Japan – Alcoholic 
Beverages II " disputes (DS8, DS10, DS11)  where the Appellate Body was discussing the coming into 
force of the WTO Agreement and whether this ha d changed the character and legal status of adopted 
reports. The Appellate Body beg an this paragraph by stating that Article XVI:1 of the WTO 
Agreement had brought forward the experience and legal history under the GATT into the WTO.44 
The Appellate Body had considered this to "affirm the importance to the Members of the WTO of the 
experience acquired by the CONTRACTING PARTIES to the GATT 1947 – and acknowledges the 
continuing relevance of that experience to the new t rading system served by the WTO".45 The 
Appellate Body had then stated that "[a]dopted panel reports are an important part of the GATT 
acquis ".46 Read in context with the preceding state ments, this reflected  the view that the reports 
adopted under the GATT were an important part  of the experience acquired by the Contracting 
Parties  to the GATT. It sa id nothing about the precedential weight, if any, to be accorded to such 
reports. Continuing on, however, the Appellate Body ma de the statements quoted in the "US – 
Stainless Steel (M exico)" dispute (DS344) , and then immediately state d: "[h]owever, they are not 
binding , except with respect to resolving the particular dispute between the parties to that dispute. 
In short, their character and their legal status have not been changed  by the coming into force of 
the WTO Agreement ".47 It was unfortunate, and perhaps telling, that the Appellate Body in the "US 
– Stainless Steel (Mexico)" dispute (DS344)  omitted this key text from its selective quotation of  the 
Appellate Body Report in the "Japan – Alcoholic Beverages II"  disputes  (DS8, DS10, DS11) . This full 
text ma de abundantly clear that the Appellate Body in the "Japan – Alcoholic Beverages II " disputes 
(DS8, DS10, DS11)  had considered that adopted reports, notwithstanding their status a s part of the 
"GATT acquis ", were not binding on future panels. To suggest now that adopted reports were 
precedent precisely because they were part of the "GATT acquis " was to turn the original statement 
in the "Japan – Alcoholic Beverages II " disputes (DS 8, DS10, DS11)  on its head.  
4.17.   The United States said that the second report cited by the Appellate Body – "US – Shrimp" 
(Article 21.5 of the DSU – Malaysia)  (DS58)  – similarly d id not support a "cogent reasons " approach. 
The Appellate Body cite d to paragraph  109 of that Report, which follow ed a quotation from the 
Report in the "Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11) concerning the s tatus of 
adopted panel reports.  Paragraph 109 of the report in  the "US – Shrimp" dispute (Article 21.5 of the  
DSU – Malaysia) (DS58)  provide d in part:  "[t]his reasoning applies to adopted Appellate Body 
                                                
43 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 158 (citing  "Japan – Alcoholic Beverages II" (DS8, 
DS10, DS11)  (AB), p. 14).  
44 "Japan – Alcoholic Beverages II " (DS8, DS10, DS11)  (AB), p. 14.  
45 "Japan – Alcoholic Beverages II " (DS8, DS10, DS11)  (AB), p. 14.  
46 "Japan – Alcoholic Beverages II " (DS8, DS10, DS11)  (AB), p. 14.  
47 "Japan – Alcoholic B everages II " (DS8, DS10, DS11)  (AB), p. 14.  (Emphasis added.)  WT/DSB/M/423  
 
- 20 - 
 
 
 
Reports as well. Thus, in taking into account the reasonin g in an adopted Appellate Body R eport ⎯ a 
Report, moreover, that was directly relevant to the Panel's disposition of the issues before it ⎯ the 
Panel did not err. The Panel was correct in using our findings as a tool for its own reasoning ".48 With 
regard to the first sentence of this paragraph, the United States would agree that the Appellate 
Body's reasoning in the "Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11)  concerning 
the status of adopted panel reports also "applies to adopted  Appellate Body Reports as well".49 In 
other words,  a panel could  rely on them, but they were not binding and should not be understood 
as supplanting the "exclusive authority " of the Ministerial Conference (or General Council) to provide 
authoritative interpretations of the covered agreements. In the second and third sentences of the 
paragraph, the Appellate Body point ed out that the panel in that dispute had not err ed by "taking 
into account " the reasoning of an adopted Appellate Body report. Here too, the United States  would 
agree for the reasons explained.  Moreover, it was critical to note that the Appellate Body had 
explained the Panel had been  correct in relying on prior findings "as a tool for its own reasoning ". In 
other words, the Panel had not use d those prior findings as a substitute for its own reas oning or in 
place of conducting its own objective assessment, and the Appellate Body had not suggest ed it would 
be appropriate or permissible under the DSU for the Panel to do so. Thus, rather than support the 
Appellate Body 's statement concerning "cogent reasons ", this report too contradict ed it. 
4.18.   The third report cited by the Appellate Body in the "US – Stainless Steel (Mexico)" dispute 
(DS344)  was no more helpful. In the "US – Oil Country Tubular Goods Sunset Reviews" dispute 
(DS268) , the Appellate Body had found that it had been  appropriate for the Panel to rely on a 
conclusion made by the Appellate Body in a prior dispute in determining whether a particular policy 
bulletin was a measure.50 In particular, the Appellate Body had stated that "following the Appellate 
Body's conclusions in earlier disputes is not only appropriate, but is what would be expected from 
panels, especially where the issues are the same".51 This assertion, which was not explained or 
supported in the text of the Appellate Body report, would seem to itself contradict earlier statements 
by the Appellate Body, including in the "Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11). 
There was a significant difference between stating that one would expect panels to reach similar 
conclus ions where the issues were similar (i.e., conducting their own objective examination, they 
may reach a similar outcome), on the one hand, and saying that one would expect a panel to simply 
follow a prior decision without conducting an objective examination  of its own, on the other. There 
was no support in the DSU for the latter approach. This statement by the Appellate Body was also 
problematic in its use of the phrase "especially where the issues are the same".  The report thus 
implie d that following a prio r conclusion "is not only appropriate " but was also "what would be 
expected " from a panel even "where the issues are [ not] the same".  There was no explanation given 
for this implication of the statement in the report. Further, the Appellate Body report 's use of the 
passive voice – "is what would be expected  from panels " – avoid ed expressing who expect ed this 
from a panel. It was understood that the Appellate Body expect ed this as the author of the passage. 
But this Appellate Body expectation was irrelevant.  What matter ed in the dispute settlement system 
was the expectations of WTO Members  as specifically expressed through their agreement in the 
DSU. The Appellate Body cite d to no language in the DSU that suggest ed that WTO Members 
expect ed panels to disregar d the text and structure of the DSU, as elaborated earlier in this 
statement.  Thus, the United States consider ed that none of the reports cited provide d any legal 
basis for the Appellate Body to depart from the text of the WTO Agreement and the DSU in adop ting 
a "cogent reasons " approach.  
4.19.   The United States said that a f ourth  error concerned the Appellate Body's misunderstanding 
(or misstatement) on why parties cited to prior reports. I n its discussion of cogent reasons , the 
Appellate Body also misunderst ood or misrepresent ed why parties often cite d to adopted panel and 
Appellate Body reports in dispute settlement proceedings .52 There was nothing surprising about the 
fact that parties in WTO disputes cite d to reports to the extent they m ight consider them pers uasive. 
As mentioned, the United States  would expect this, and expect ed panels to do the same. But there 
was no support for the proposition that parties cite d to reports because they consider ed them 
somehow binding on or precedential for subsequent panels and the Appellate Body, which was what 
the Appellate Body appear ed to imply. Here again, the Appellate Body ignore d that there was a 
                                                
48 "US – Shrimp" (Article 21.5 of the DSU – Malaysia) (DS58)  (AB), para. 109.  (Emphasis added.)  
49 "US – Shrimp" (Article 21.5 of the DSU – Malaysia) (DS58)  (AB), para. 109.  
50 "US – Oil Country Tubular Goods Sunset Reviews" (DS268)  (AB), para. 188.  
51 "US – Oil Country Tubular Goods Sunset Reviews" (DS268)  (AB), para. 188.  
52 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 158.  WT/DSB/M/423  
 
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 significant difference between citing a report for its persuasive value, on the one hand, and arguing 
that the report was binding or precedential for future panels, on the other. The Appellate Body also 
assert ed that "when enacting or modifying laws and national regulations pertaining to international 
trade matters, WTO Members take into account the legal interpretation of the  covered agreements 
developed in adopted p anel and Appellate Body reports".53 The report cite d no evidence for this 
proposition. To the extent the Appellate Body statement had intended to refer to compliance actions 
taken by Members, those Members would be looking to the recommendations of the DSB in a 
particular dispute. More generally, the United States  would expect Members to look first to the text 
of the covered agreements in enacting or modifying their national measures. And Members were 
entitled to act  according to the text of those agreements embodying their commitments, as 
understood through customary rules of interpretation, rather than according to an interpretation 
rendered in a dispute settlement report. This was particularly so given the probabil ity that some 
interpretations might  be in error, and pa nel or Appellate Body findings could  not add to or diminish 
the rights or obligations of Members under the covered agreements.  
4.20.   The United States said that a fif th error concerned the Appellate Body's inappropriate and 
incomplete analogies to other international adjudicative fora.  T o support its statement tha t Article 
3.2 of the DSU implied  that "absent cogent reasons, an adjudicatory body will resolve the same leg al 
question in the same way in a subsequent case ", the Appellate Body report in the "US – Stainless 
Steel (Mexico)" dispute (DS344)  included  a lengthy footnote that attempt ed to draw significance 
from how consistency of disputes could  be regarded in other international fora for dis pute settlement. 
This attempt wa s incomplete, at best, and misguided.  In footnote 313 of its r eport, the Appellate 
Body had cited tribunal decisions from the International Criminal Tribunal for the Former Yugoslavia 
(ICTY) and the  International Centre for Settlement of Investment Disputes (ICSID) Arbitration 
Tribunal, apparently as support for why precedent should be adopted in WTO dispute settlement. 
These examples, however, were of no relevance. First, the Appellate Body provide d no explanation 
as to whether or how the relevant rule s and structures of these fora we re relevant for understanding 
the WTO dispute settlement system. The United States note d, for example, that the Tribunal for the 
former Yugoslavia was, just that, a trib unal, and therefore structured differently from the DSB 
administering the DSU and making recommendations based on panel and Appellate Body reports. 
Thus, the grounds for treating prior tribunal interpretations as precedent that might  apply to an 
entity lik e the Tribunal were not applicable to the DSB.54 In stating that the Tribunal should follow 
its prior legal interpretations absent cogent reasons for departing from that interpretation, the 
Tribunal had reasoned that the Security Council envisaged a tribuna l comprising three trial chambers 
and one appeals chamber.55 In other words , while the Appeals Chamber ha d a particular function, 
the different "Chambers " were all part of one "Tribunal ", which should resolve a legal question in 
one way. As explained, this structure d id not exist in the DSU; there was no one tribunal with trial 
and appellate chambers.  The Appellate Body had also cited to a decision by the ICSID Arbitration 
Tribunal, in which the Tribunal had stated that "[i]t believes that, subject to compel ling contrary 
grounds, it has a duty to adopt solutions established in a series of consistent cases ".56 But the 
Appellate Body report provide d no explanation for the basis on which the ICSID Tribunal considered 
"it has a duty " to follow prior interpretations. The Tribunal had also gone on to state that "[i]t also 
believes that, subject to the specifics of a given treaty  and of the circumstances of the actual case, 
it has a duty to seek to contribute to the harmonious developmen t of investment law ". Whatever 
the reasons for that belief, this statement reveal ed that this Tribunal would consider that the 
"specifics of a given treaty " should prevail for its interpretive approach and outcome. As the United 
States had  shown, the DSU d id not support an approach in which prior Appellate Body interpretations 
were treated as binding, or precedent. To the extent the Appellate Body had intended to suggest 
"precedent " had been  reflective of customary international law, the United States would  note that 
the statement of two tribunals would not establish the existence of such a rule.57 Moreover, under 
                                                
53 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 160.  
54 The ICTY is the first international war crimes tribunal since Nuremberg. It was established by the UN 
Security Council as a result of a 1993 resolution finding the existence of widespread humanitarian law violations 
in the former Yugoslavia and directing the creation of the Tribunal as a means to contribute to the restoration of 
peace and stability in the region.  
55 See "Prosecutor v. Aleksovski", Case No. IT -95-14/1-A, at para. 113 (24 March 2000).  
56 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 160 n. 313 (citing the Decision of 21 March 2007 
of the ICSID (International Centre for Settlement of Investment Disputes) Arbitration Tribunal, Case No. 
ARB/05/07, "Saipem S.p.A. v. The People's Republic of Bangladesh", ICSID IIC 280 (2007), p.  20, para.  67).  
57 A rule of customary law is understood to comprise widespread and consistent State practice and "opinio 
juris" (or "a belief in legal obligation"). See, e.g., North Sea Continental Shelf cases, ICJ Reps, 1969, p. 3 at 44.  WT/DSB/M/423  
 
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international law, treaty text would  prevail over customary law as between parties to the treaty. 
Customary law c ould not override clear treaty tex t as to rights and obligations between parties to 
the treaty. The view that a "cogent reasons " approach was justified based on customary international 
law would conflict with the text of Articles 3.2, 3.9, 11 and other relevant provisions of the DSU and 
the WTO Agreement. The approach of the DSU – that prior reports were not binding or precedent – 
would therefore prevail.  
4.21.   Finally, the United States said that a sixth error concerned the Appellate Body's incorrect 
assumptions concerning the existence of a hi erarchical structure that did not reflect the limited task 
assigned to the Appellate Body in the DSU . The Appellate Body 's discussion of "cogent reasons " was 
based on an asserted "hierarchical structure contemplated in the DSU " that fail ed to accurately 
reflect the important, but limited, role assigned to the Appellate Body, and was divorced from the 
text of the DSU. At paragraph 161 of its report in the "US – Stainless Steel (Mexico)" dispute 
(DS344) , the Appellate Body suggest ed that it had been  created by Members and "vested with 
authority " pursuant to Articles 17.6 and 17.13 of the DSU so as to promote security and predictability 
in the dispute settlement system.58 And so, according to the Appellate Body, a panel 's "failure to 
follow previously adopted Appellate Body reports addressing the same issues undermines the 
development of a coherent and predicable body of jurisprudence clarifying Members ' rights and 
obligations under the covered agreem ents as contemplated by the DSU".59 Articles 17.6 and 17.13 
of the DSU d id not "vest" the Appellate Body with broad authority to develop "a coherent and 
predictable body of jurisprudence ". The latter phrase d id not appear in those provisions – nor was 
there any hint of them. In fact, those articles were limitations  on the parameters of appellate review 
and on the permissible actions of the Appellate Body. For example, Article 17.6 of the DSU provide d 
that: "[a]n appeal shall be limited  to issues of law covered in the panel report and legal 
interpretations ".60 And Article 17.13  of the DSU  limited the Appellate Body 's functions by saying it 
"may uphold, modify or reverse the legal findin gs and conclusions of the panel".  Of course, this list 
of authorized actions d id not include issuing authoritative interpretation s that had to  be followed by 
subsequent panels.  Given these limitations, it was not consistent with these texts to read them to 
provide the Appellate Body with the authority to render an interpretation in one dispute that would 
relieve a panel of the respo nsibility it ha d toward the DSB to conduct an objective assessment of the 
applicability of a covered agreement, using customary rules of interpretation, in a separate dispute. 
Rather, as discussed, authoritative interpretations of the covered agreements were reserved 
exclusively to WTO Members acting in the Ministerial Conference (or General Council).  The notion of 
a "hierarchical structure " in the dispute settlement system also fail ed to acknowledge the role of the 
DSB. It was the DSB that establishe d a panel and charge d it with making those findings necessary 
for the DSB to provide a recommendation to bring a WTO -inconsistent measure into conformity with 
the WTO agreements.61 It was the DSB that panels and the Appellate Body assist ed by carrying out 
their functions as set out in the DSU. As noted above, panel findings adopted by the DSB were of 
equal legal status as findings by the Appellate Body that were adopted by the DSB. The Appellate 
Body ha d never suggested that it would accept that it was bound to follow adopted panel findings 
as a consequence of the "hierarchical structure " of the DSU – likely because this would restrict its 
influence in the dispute settlement system. But the United States view ed the notion of a hierarchical 
structure in the DSU  to be misguided, in any event. DSB recommendations resulting from panel or 
Appellate Body findings, or arbitration awards under Article 25  of the DSU , were of equal value and 
directed at resolving a dispute between Members. Should a Member wish to obtain an authoritative 
interpretation that w ould serve as precedent in a future dispute, it had to  have recourse to the 
different process set out in Article IX:2 of the WTO Agreement for the hierarchically superior body, 
the Ministerial Conference.  
4.22.   With regard to Members' r eactions to the Appellate Body r eport in the "US – Stainless Steel 
(Mexico)" dispute (DS344),  the United States said that w hen the report in the "US – Stainless Steel 
(Mexico)" dispute (DS344)  had been  considered by the DSB, the United States had expressed that 
                                                
58 "US – Stainless Steel (Mexico) " (DS344)  (AB), para. 161.  
59 "US – Stainless Steel (Mexico)" (DS344)  (AB), para. 161.  
60 Article 17.6 of the DSU  (emphasis added).  
61 Article  7.1 of the DSU  ("Panels shall have the following terms of reference unless the parties to the 
dispute agree otherwis e within 20 days from the establishment of the panel: To examine, in the light of the 
relevant provisions in (name of the covered agreement(s) cited by the parties to the dispute), the matter referred 
to the DSB by (name of party) in document ... and to ma ke such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in that/those agreement(s).").    WT/DSB/M/423  
 
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 its "systemic concern was of … enormous institutional significance fo r the dispute settlement 
system".  The United States had elaborated its concerns that the approach of the Appellate Body 
would transform the WTO dispute settlement syste m, contrary to the structure set out in the DSU 
and WTO Agreement.62 Some Members, while agreeing with the Appellate Body 's substantive 
findings in that dispute, had expressed concern that the Appellate Body 's statements regarding 
"cogent reasons " not be un derstood as "crossing the line " of suggesting prior reports were binding 
on panels. For example, the minutes of the relevant DSB meeting reflect ed the following statement 
by Chile: "[i]n keeping with Chile's line of thought, the Appellate Body had confirme d that its reports 
created legitimate expectations among Members and should, therefore, be taken into consideration, 
although they were not – he reiterated not – binding. Chile thanked the Appellate Body for its 
confirmation in this regard and for refraini ng from crossing the 'obligation ' line … By crossing the 
line in stating that previous reports would provide a mandatory framework in subsequent disputes, 
according to the wish of some Members, the Panel would have not only prejudged future disputes 
and even tied the hands of future panels, but it would have also created rights and obligations when 
the Membership alone could do so.  That bein g said, certain phrases in the R eport gave Chile some 
cause for concern. According to paragraph 160, '[e]nsuring "security and predictability " in the 
dispute settlement system, as contemplated in Article 3.2 of the DSU, implied that, absent cogent 
reasons, an adjudicatory body would resolve the same legal question in the same way as had been 
done in previous cases. ' Paragraph 162 likewise stated as follows: '[w]e are deeply concerned about 
the Panel's decision to depart from well -established Appellate Body jurisprudence clarifying the 
interpretation of the same legal issues. ' Such phrases could lead to unfortunate conclusions 
regarding the nature of the dispute settlement system, and Chile hoped that this would not become 
a trend likely to constrain panels in future disputes, and above all, that this would not alter the 
nature of the rights and obligations negotiated by the Membership ".63 
4.23.   The United States said th at in a similar vein, Colombia had welcomed the Appellate Body 's 
substantive findings but had expressed its disagreement with the "cogent reasons " approach on 
systemic grounds: "Colombia wished to express its views on the systemic issue as to whether … 
panels were required to follow the Appellate Body's findings. In this connection, Colombia agreed 
with the reasoning of the Panel that there was no provision in the DSU that required WTO panels to 
follow the findings of previous panels or of the Appellate Bod y on the same issues brought before 
them. In fact, a panel or Appellate Body decision bound only the pa rties to the relevant dispute 
[and] the Ministerial Conference and the General Council alone were empowered to adopt 
authoritative interpretations ".64 The complaining party in the  "US – Stainless Steel (Mexico)" dispute 
(DS344) , while minimizing the concerns being raised, had not endorse d the "cogent reasons " 
approach (that it had not even argued for), but had merely stated that a panel "must pay attention 
to" prior Appellate Body interpretations.65 Unfortunately, the Member that had held an expectation 
at the time of the adoption of the report  in the "US – Stainless Steel (Mexico)" dispute (DS344)  that 
the Appellate Body would not "cross the line " of suggest ing an adopted Appellate Body report was 
binding misunderstood the meaning of that report. Although the Appellate Body had avoided using 
the word "binding ", the meaning of its dicta and phrases such as "the panel 's failure to follow " had 
been clear – Appellate Body reports should be treated as precedent. But neither wishing Appellate 
Body reports to have a different status, nor repeating the Appellate Body 's dicta, made the analysis 
and statement of the Appellate Body any less erroneous. It was simply inconsistent with the text 
and structure of the DSU and the WTO Agreement for a panel to treat prior interpretations in 
Appellate Body reports  as binding, or precedent.  
4.24.   With regard to the issue that certain panels had followed a "cogent reasons" a pproach without 
considering the basis for such an approach, the United States would  note with concern that, in 
several recent panel reports, certain panels ha d simply applied the Appellate Body 's dicta on "cogent 
reasons " as the Appellate Body had intended . In those reports, the panels ha d failed to engage with 
                                                
62 Minutes of the Meeting of the DSB on May 20, 2008 (WT/DSB/M/250), paras. 50 -55. 
63 Minutes of the Meeting of the D SB on May 20, 2008 (WT/DSB/M/2 50), paras. 67 -68 (statement 
of Argentina).  
64 Minutes of the Meeting of the DSB on May 20, 2008 (WT/DSB /M/250), para. 72 (statement 
of Colombia).  
65 Minutes of the Meeting of the DSB on 20 May 2008 (WT/DSB/M/250), para. 73 (statement of Mexico) 
("With regard to certain comments made by some delegations at the present meeting, Mexico pointed out that 
the decision by the Appellate Body should not be quo ted out of its context. Panels must pay attention to the 
Appellate Body's findings particularly when dealing with the same legal questions.").   WT/DSB/M/423  
 
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the legal text of the DSU and WTO Agreement that the United States ha d discussed in this 
statement.66 This raise d grave concerns for the dispute settlement system as it suggest ed that 
serious, systemi c errors were increasingly being made without any consideration of the actual text 
that WTO Members ha d agreed to. If these errors were being made by panels at the urging of a 
party to the dispute, then certain WTO Members b ore responsibility for promoting  this breaking of 
WTO rules. These panel errors also reinforce d the danger to the WTO and the dispute settlement 
system from the issuance of advisory opinions by the Appellate Body – an issue the United States  
had discussed at length  at previous DSB meetin gs67 – as this "cogent reasons " approach contradict ed 
the clear text of the DSU and the WTO Agreement.  
4.25.   In conclusion, with regard to th e issue that the Appellate Body's "cogent reasons" approach 
usurped authority expressly reserved to Members , the United States recall ed the role of WTO 
Members, on the one hand, and WTO adjudicators, on the other. The text of the WTO Agreement 
and the DSU ma de clear that only Members, acting in the Ministerial Conference  or the General 
Council – and not the DSB – had the ri ght to issue authoritative interpretations. The role of WTO 
adjudicators was different. The Appellate Body and panels were only to issue those findings 
necessary to resolve a dispute, and specifically, findings that w ould assist the DSB in making a 
recomme ndation to bring a measure into conformity with a WTO agreement. Those findings were to 
be based on the text of the covered agreements, not the text of prior appellate reports . While DSB 
recommendations resulting from reports "cannot add to or diminish the  rights and obligations 
provided in the covered agreements ",68 the Appellate Body 's approach would set the system on a 
path of departing from the agreed rights and obligations of Members under the WTO Agreement. 
Where the Appellate Body ha d not made a corre ct interpretation, panels would nonetheless be 
required to follow it. Those errors would accumulate over time, and where the Appellate Body in a 
subsequent appeal buil t its interpretation on a flawed interpretation, the interpretations and resulting 
findin gs would become more and more removed from what Members had agreed. This was exactly 
the opposite of the system that Members had agreed to.  The United States ha d long been concerned 
with actions by the Appellate Body that s ought  to usurp the authority expr essly reserved to Members. 
In claiming the authority to issue authoritative interpretations through its "cogent reasons " 
approach, the Appellate Body upset the careful balance of rights and obligations that exist ed within 
the WTO agreements. This was yet a nother example of a failure by the Appellate Body to follow the 
rules agreed by Members, undermining support for a rules -based trading system.  
4.26.   The representative of Colombia  said that Colombia wished to thank the United States for 
including this issue on the Agenda of the present meeting. He  noted that it was an issue  of historical 
interest for his delegation. Colombia believed that the discussion and any concerns regarding this 
issue d id not justify the existing deadlock in the AB selection processes , or the failure of Members 
to fulfil their obligations in this respect. Colombia, in accordance with the statement made by seven 
Latin American countries at the 12 December 2018 General Council meeting, wished to reiterate its 
interest in finding a prompt  solution to this matter.  Regarding th is Agenda item , Colombia agree d 
with other Members that Article 3 of the DSU did not imply the establishment of a system of 
                                                
66 See, e.g., Panel Report, "European Union and its Member States – Certain Measures Relating to the 
Energy Secto r", WT/DS476/R and Add. 1, circulated 10 August 2018, para. 7.1350 ("[w] e find no cogent reason 
to disagree with the legal interpretation of the panel in 'India – Solar Cells '"); Panel Report, "United States – 
Countervailing Measures on Supercalendered Pap er from Canada", WT/DS505/R and Add. 1, circulated 5 July 
2018, para. 7.306 ("we do not see any 'cogent reasons' to depart from the Appellate Body's approach to 'ongoing 
conduct' expressed in 'US – Continued Zeroing '"); Panel Report, "European Union – Anti-Dumping Measures on 
Biodiesel from Indonesia", WT/DS480/R and Add. 1, adopted 28 February 2018, para. 7.26 ("we see no basis to 
deviate from the findings by the panel in 'EU – Biodiesel ' (Argentina) in respect of Indonesia's claim concerning 
Article 2.2.1 .1 of the Anti -Dumping Agreement. Nor has the European Union identified any cogent reasons for us 
to do so"); Panel Report, "Canada – Anti-Dumping Measures on Imports of Certain Carbon Steel Welded Pipe 
from The Separate Customs Territory of Taiwan, Penghu , Kinmen and Matsu", WT/DS482/R and 
WT/DS482/R/Add.1, adopted 25 January 2017, para. 7.37 (" [f]or the rea sons explained above, we  find that 
Canada has failed to establish that there are cogent reasons for us to depart from those decisions"); and Panel 
Report, "European Union – Anti-Dumping Measures on Biodiesel from Argentina", WT/DS473/R and Add. 1, 
adopted 26 October 2016, as modified by Appellate Body Report WT/DS473/AB/R, para. 7.276 (" [i]n the absence 
of cogent reasons for departing from the approach o f the Appellate Body in prior cases, we adopt the same 
approach").  
67 Statement by the United States Concerning the Issuance of Advisory Opinions on Issues Not Necessary 
to Resolve a Dispute, Meeting of the DSB on October 29, 2018, available at: https://gen eva.usmission.gov/wp -
content/uploads/sites/290/Oct29.DSB_.Stmt_.as -delivered.fin_.rev_.public.pdf.  
68 Article 3.2 of the DSU . WT/DSB/M/423  
 
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 precedent as construed within  common law systems . Colombia wished to note that the Appellate 
Body ha d established the theory of "cogens rationae" o r "causa  cogens" (cogent reasons or very 
strong reasons) for panels  and the Appellate Body itself  in the absence of which neither panels nor 
the Appellate Body  could deviate  from the reasoning previously  established by the Appellate Body . 
Colombia believe d that the predictability requirement, provided for in Article 3.2 of the DSU, d id not 
necessarily make it possible to infer the existence of the aforementioned theory . In 2008, Colombia 
had expressed its  position in this regard: " (…) Colombia wished to express its views on the systemic 
issue as to whether a panel may rely on the findings of previous panel reports that the Appellate 
Body had reversed, and in particular whether panels were required to follo w the Appellate Body's 
findings. In this connection, Colombia agreed with the reasoning  of the Panel  that there was no 
provision in the DSU that required WTO panels to follow the findings of previous panels or of the 
Appellate Body on the same issues broug ht before them. In fact, a panel or Appellate Body decision 
bound only the parties to the relevant dispute. On the other hand, in compliance with the last 
sentence of Article 3.2 of the DSU: 'recommendations and rulings of the DSB cannot add to or 
diminish  the rights and obligations provided in the covered agreements'. While recognizing the need 
to provide security and predictability to the multilateral trading system through the development of 
a consistent line of jurisprudence, Colombia wished to recall t hat the Ministerial Conference and the 
General Council alone were empowered to adopt author itative interpretations ".69 Colombia believe d 
that Members ha d greatly contributed to this "jurisprudential" approach. In their submissions and 
statements before the DSB, panels and the Appellate Body, Members  had often argue d by citing 
precedents, and had discuss ed those precedents as if they had been  an extension o f the provisions 
of the covered agreements . This practice by Members, panels and the Appellate Body mean t that 
issues discussed in previous WTO dispute settlement  cases contribute to settling subsequent cases, 
or cases currently before the DSB. Colombia  believed that  there was simply no support for this 
practice in the provisions of the DSU. Colombia asked what was the value of such panel and Appellate 
Body rulings if they did not constitute "precedent" within the meaning of Anglo -Saxon law . Colombia 
believ ed that prior appellate and panel  reports constituted  important doctrine for clarifying and 
interpreting the legal standards established in WTO agreements. Nevertheless, their value was 
purely indicative and referential, and  could not be considered as bind ing jurisprudence. The system 
was therefore designed so that disputes would  be resolved through the application of the covered 
agreements and the rules of interpretation provided for in customary international law,  without any 
obligation to take into accou nt prior appellate and panel  reports . Without prejudice to the foregoing, 
Colombia d id not preclude the establishment of a rule of precedent in the WTO context . Colombia  
did, however, believe that this rule should be expressly negotiated and set out in the  covered 
agreements.  In practical terms, Colombia underst ood that a n adjudicator  who was exposed for the 
first time to a complex and substantial legal discussion concerning a multilateral rule m ight not be 
in a position to comprehensively interpret the rul e in question and properly rule on the facts before 
them. Setting in stone every DSB decision as a means of resolving future cases was not something 
that Colombia believe d should be provided for in the DSU. Furthermore, specialized literature ha d 
shown the  possible contradictions that derived from cases in which the Appellate Body ha d had to 
correct itself, thereby affecting the application of its "causa cogens" doctrine .70 Colombia therefore 
prefer red the civil law approach, which prescribe d that only after  more than two cases, in which  an 
adjudicator  had been exposed to similar matters , which ha d been settled in the same manner , was 
it possible to consider  the establishment of a line of doctrine that would be a case -law precedent.  
Colombia wishe d to reitera te that it underst ood and share d the concerns regarding the use of 
precedent at the WTO. However, Colombia  believe d that these concerns, while valid, were not 
enough to justify blocking of the appointments of the AB members.  
4.27.   The representative of Chile said that Chile wished  to thank the United States for placing  this 
item on the A genda  of the present meeting.  He wished to reiterate Chile's position regarding the 
precedenti al value of panel and Appellate  Body reports, which Chile had  previously shared with the 
Membership at the 20  May 2008 DSB meeting . At the 20  May 2008 DSB meeting , when adopting 
the Appellate Body r eport in the "US – Stainless Steel (Mexico)" dispute (DS344) , Chile had  
expressed concern about the Appellate Body's statements in paragraphs 160 and 162 of its report, 
where it had held that "absent cogent reasons, an adjudicatory body will resolve the same legal 
                                                
69 Minutes of the WTO Dispute Settlement Body meeting held on 20 May 2008 (WT/DSB/M/250) , para. 
72. 
70 Frieder Roessler; "Changes in The Jurisprudence of The WTO Appell ate Body during The 
Past Twenty  Years " Journal of International Trade Law and Policy as part of the Sel ected Proceedings of the 
WTO 20 Conference hosted by the European University Institute in Florence on 15 May 2015 . WT/DSB/M/423  
 
- 26 - 
 
 
 
question in the same way in a subsequent case" , and had stated  that it was "deeply concerned about 
the Panel's decision to  depart from well -established Appellate Body jurisprudence clarifying the 
interpretation of the same legal issues" . In Chile's view , statements such as these c ould lead to 
unfortunate conclusions regarding the nature of the WTO dispute settlement system, w hich was 
covered by , and operated within, an inter -governmental, rules -based and Member -driven system, 
and not a system under which individuals instituted proceedings  before a domestic tribunal. Indeed, 
Article IX:2 of the WTO Agreement provide d that it was exclusively up to Members to adopt 
interpretations of that Agreemen t and of the Multilateral Trade  Agreements.  At the 20  May 2008 
DSB meeting , Chile had noted with satisfaction that the Appellate Body had previously been clear 
as to the effect of prior p anel and Appellate Body reports, in the sense that panels were not oblig ed 
to follow previous reports, which, nevertheless, create d legitimate expectations among Members 
and should, therefo re, be taken into account.  
4.28.   The representative of Canada  said that Canada wished to thank the United States for placing 
this important systemic issue on the Agenda of the present meeting. Canada  welcome d this 
opportunity to provide its views.  It was well established that the DSU d id not provide for stare decisis  
in a stri ct sense.  What ha d been agreed to by Members, however, was that "the dispute settlement 
system of the WTO is a central element in providing security and predictability  to the multilateral 
trading system " and that dispute settlement serves, inter alia , to clarify the provisions of the covered 
agreements . This was articulated in Article 3.2 of the DSU. This security and predictability ar ose 
notably as a result of the hierarchical dispute settlement system in the DSU, in which the Appellate 
Body review ed issues of law and legal interpretations developed by panels, and uph eld, modifie d or 
reverse d the legal findings and conclusions of panels.  It follow ed that the clarification of the covered 
agreements provided in adopted Appellate Body reports c ould not simply be ignored when 
subsequent panels deal t with the same issues. Were panels to ignore Appellate Body guidance, 
uncertainty and instability would be introduced into the dispute settlement and multilateral trading 
systems.  The Appellate Body ha d rightly determ ined that ensuring "security and predictability ", as 
contemplated in Article 3.2  of the DSU , implie d that, "absent cogent reasons , an adjudicatory body 
will resolve the same legal question in the same way in a subsequent case ". This approach ensure d 
that m eaningful value was given to previous findings and analysis of WTO adjudicators , while 
acknowledging that there was no formal  stare decisis . At the same time, the "absent cogent reasons " 
approach d id not, and should not, prevent WTO adjudicators from analy sing issues on a case -by-
case basis . Canada  believed that  WTO adjudicators should first consider the specific facts at issue 
and the specific legal arguments raised by the parties and third parties in a given dispute.  However, 
reliable  and consistent  interpretation of the covered agreements  was necessary to maintain the  
legitimacy of the rules -based multilateral trading system.  Adopted  Appellate Body reports enabl ed 
WTO Members of all sizes and at all levels of development to better assess their rights and obligations 
under the covered agreements. These reports g ave rise to legitimate expectations amongst the 
Membership. Consequently, where there was express Appellate Body guidance with respect to the 
interpretation of the provisions in question or findings with respect to the exact same legal issue, a 
subsequent panel was expected to follow this guidance, absent cogent reasons.  Canada wished to 
thank  the Chairperson  and other Members for their engagement on this important issue.  
4.29.   The r epresentative of Brazil  said that Brazil wished to thank the U nited States for having 
shared its views on this important matter  for the Membership. Brazil also wished  to share its views  
on this matter  at the present meeting.  Brazil agree d with the US asse rtion that panel and Appellate 
Body reports were not binding precedents for subsequent cases. In other words, there was no rule 
of stare decisis  in WTO dispute settlement. This understanding derive d from a number of provisions 
in the DSU, such as Articles 3.2 and 17.14, and from the Marrakesh Agreement – Article IX:2.  One 
of the issues relate d to whether the Appellate Body ha d made statements about the reach of its 
decisions, which were incongruent with the relevant legal texts. A nother related issue concern ed the 
assumption apparently held by the U nited States that, if prior rulings by the A ppellate Body were 
not legally binding, then  panels should disregard them. Regarding  the first issue, the United States 
seem ed concerned with specific instances in which the Appellate Body would have stated that, unless 
there were "cogent reasons " to depart from a previous interpretation where similar circumstances 
were present, panels and the Appellate Body should abide by the same previous und erstanding. To 
the United States, such statement would be akin to the Appellate Body applying a rule of precedent 
in the WTO 's dispute settlement mechanism.  Brazil wished to  note that there were other cases in 
which the Appellate Body had expressly acknowl edged that its reports were not binding, except with 
respect to resolving the particular dispute between the parties  ("US – Stainless Steel (Mexico)" WT/DSB/M/423  
 
- 27 - 
 
 
 
  
 
 (DS344) ).71 In other examples ( the "Japan – Alcoholic Beverages II " disputes (DS8, DS10, DS11)  
and the "US – Shrimp" dispute (Article 21.5 of the DSU – Malaysia) (DS58) ), the Appellate Body had 
stated that panel reports and Appellate Body reports "create legitimate expectations among WTO 
Members, and, therefore, should be taken into account where they are relev ant to any dispute ". To 
"take into account " was not the same as "to be bound by " the report or legal interpretation developed 
by the Appellate Body.  Brazil was therefore inclined to read the Appellate Body 's statement in a 
more generous light. In Brazil 's view, the different wordings used by the Appellate Body convey ed, 
in essence, the same message that the Appellate Body was mindful of its role in the overall objective 
of the dispute settlement system to ensure security and predictability in the multilater al trading 
system, contained in Article 3.2 of the DSU. The same provision confer red an additional purpose to 
the dispute settlement system , which was to provide "clarity " to the existing provisions of the WTO 
Agreements. Brazil was  sceptical  that security , predictability and clarity  could result from a system 
in which previous rulings were constantly disregarded or in which there was an incentive for panels 
to do so.  Regard ing the second point under discussion ( whether  prior rulings were a valid source of 
interpretation for panels and the Appellate Body ), Brazil believe d that the consideration of previous 
cases by WTO adjudicators was desirable from a systemic perspective, in order to provide coherence 
to the  dispute settlement mechanism. This consideration of past rulings was also welcome from a 
"judicial and administrative economy " perspective. Article 3.3 of the DSU, for example, call ed for 
the "prompt settlement " of disputes. Article 17.5 of the DSU establishe d a 90-day deadline for the  
conclusion of appellate review procedures. It seem ed clear to Brazil  that the panels and the A ppellate 
Body would be not only more coherent but also more efficient if they look ed to previous reports for 
background and guidance. From the perspective of  Members, as potential parties to a dispute, the 
reasonable expectation that prior interpretations of the same provision w ould carry weight in 
deciding subsequent  cases should also be viewed positively  and encourag e parties to think through 
the issue s and argu ments more carefully whe n deciding to  litigat e them  before a panel and/or the 
Appellate Body. Of course, Members retain ed the right to re -argue interpretations arrived at by  
panel s and/or the A ppellate Body, but they w ould not be able to start from  a clean slate.  WTO 
Members recognize d the value of interpretations provided in prior disputes . Evidence  of such 
recognition  could be found in the great extent to which they ha d come to rely on prior panel and 
Appellate Body reports  in their submissions to panels and the Appellate Body. The U nited States 
itself regularly refer red to Appellate Body reports in its submissions . This clearly signall ed to panels 
that they should follow the Appellate Body 's prior interpretations.  Brazil  could forese e a scenario 
where greater uncertainty in the dispute settlement system could provoke an increase in the number 
of cases brought to the dispute settlement system  and a decrease in the willingness  of Members to 
have recourse to mutually agreed sol utions . This would  undermin e the clear preference for amicable 
settlement reflected in Article 3.7 of the DSU. The increased uncertainty over the manner in which 
provisions would be interpreted would make it more difficult for part ies to find common ground  and 
might make parties more willing to proceed to adjudication when they might otherwise have reached 
a settlement.  Furthermore, interpretations in the context of the dispute settlement system  were 
useful for policy -making: they ga ve significant guidance to governments and to traders for the design 
of WTO -consistent trade measures and for the assessment of measures taken by other Members  
that had affect ed their exports or imports.  Finally,  although comparisons  between international law  
and municipal  legal systems were never perfect, it was impossible to overlook the fact that this 
system ha d tended to mirror  the legal practice of common law countries, like the U nited States. Civil 
law systems, like Brazil 's, although currently more reliant on past ju dicial decisions  than in the past, 
with varying degrees of binding force, ha d had to adapt to the weight of pr ior case law in the WTO. 
Brazil  wonder ed how many other examples of common law concepts and practices could or should 
be reviewed in light of crit icisms related to interpretati ve choices by panels and the A ppellate Body. 
Brazil  believed that  previous rulings in the dispute settlement system  did not constitute binding 
precedent. The real issue here was whether the A ppellate Body was acting in a manne r inconsistent 
with this common understanding. Brazil  believed  that it was  not. Brazil  also believed  that prior 
interpretations of the A ppellate Body provide d useful guidance to panels and the Appellate Body 
itself in deciding subsequent disputes . That, of  course, d id not absolve panels or the Appellate Body 
from addressing each case based on its own merits, and from deciding the extent to which a given 
precedent w ould be relevant in light of the specific facts of each case.  
4.30.   The representative of Australia  said that Australia wished to thank the U nited States for its 
statement made at the present meeting  on the precedential value of reports issued by panels and 
                                                
71 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para. 158.  WT/DSB/M/423  
 
- 28 - 
 
 
 
the Appellate Body. Australia believed  that it was helpful to refer to Articles 3.2 and 19.2 of th e DSU, 
as well as Articles IX and X of the Marrakesh Agreement establishing the WTO.  Specifically, Article 
3.2 of the DSU state d that : "the dispute settlement system of the WTO is a central element in 
providing security and predictability to the multilater al trading system ". Article 3.2 of the DSU  went 
on to require the WTO dispute settlement to:  "preserve the rights and obligations of Members under 
the covered agreements , and  to clarify the existing provisions of those agreements ". However, 
Article 3.2 of the DSU  stated that recommendations and rulings of the DSB  could " not add to or 
diminish the rights and obligations provided in the covered agreements ". Australia believed that  
requiring dispute settlement to provide predictability implie d that some level of consistency in 
dispute settlement was appropriate . However,  Australia did not believe  that should go so far as to 
create a separate body of law, developed through jurisprudence, which had to  then be rigorously 
applied in future disputes through the doct rine of stare decisis . Rather,  Australia believed that  
previous decisions of panels and the Appellate Body should only guide future panels and the 
Appellate Body on how to clarify the provisions of the covered agreements in a manner which 
predictably prese rved the rights and obligations of Members under those agreements.  Further, 
Australia wished to  draw attention to the distinction between clarifying, interpreting, and amending 
the covered agreements. Article IX of the Marrakesh Agreement provide d exclusiv e authority to WTO 
Members to interpret WTO covered agreements, while Article X provide d exclusive authority to WTO 
Members to amend those agreements . This authority to interpret and amend had to  be distinguished 
from the role of panels and the Appellate B ody, under the DSU , to "clarify the existing provisions " 
of the covered agreements.  Australia's  views were supported by Article s 3.2 and  19.2 of the DSU, 
which p rovide d that panels and the Appellate Body "cannot add to or diminish the rights and 
obligation s provided in the covered agreements ". Australia was  interested in the views of other 
Members on this matter  and st ood ready to engage in future discussions on these and other issues 
of concerns regarding the functioning of the WTO dispute settlement system.  
4.31.   The representative of Japan  said that Japan  wished to thank the United States for its 
statement made at the present  meeting . In the US President 's 2018 Trade Policy Agenda, the United 
States had expressed the concerns , which were further elaborated at the present meeting , that 
"[w]ithout basis in the DSU, the Appellate Body has asserted its reports effectively serve as  
precedent and that panels are to follow prior Appellate Body reports absent 'cogent reasons '".72 In 
its Report in the "US – Stainless Steel (Mexico)" dispute (DS344)73, the Appellate Body had stated 
that "ensuring 'security and predictability ' in the disput e settlement system, as contemplated in 
Article 3.2 of the DSU, implies that, absent cogent reasons, an adjudicatory body will resolve the 
same legal questions in th e same way in a subsequent case ".74 The Appellate Body had expressed 
this approach, which could be referred to as  the "cogent reasons doctrine ", notwithstanding its 
recognition in the same report that "it is well settled that Appellate Body reports are not binding, 
except with respect to resolving the particu lar dispute between the parties ".75 Japan believed that  
the right approach was that : "Appellate Body reports are not binding, except with respect to 
resolving the particu lar dispute between the parties ".76 In the past, the Appellate Body had also 
explained  that: "[a]dopted panel reports are an  important part of the GATT acquis . They are often 
considered by subsequent panels. They create legitimate expectations among WTO Members, and, 
therefore, should be taken into account where they are relevant to any dispute ".77 As observed by 
the Appellate B ody, the same rationale applie d to adopted Appellate Body reports .78 Japan  would 
agree that the dispute settlement system "serves … to clarify the existing provisions of [the covered] 
agreements in accordance with customary rules of interpretatio n of public  international law "79 and 
prior adopted reports c ould and "should be taken into account " to the extent they were "relevant " 
to a particular case. However, measures and claims differ ed from one case to another  and so d id 
the relevance of prior adopted reports to a particular case. Ultimately, the significance of prior 
reports would turn on their persuasive value. Prior reports were not a treaty text and were not 
binding in subsequent cases. Japan should emphasize that  what would constitute "cogent reasons " 
                                                
72 President's 2018 Trade Policy Agenda, page 28.  
73 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , paras.160 and 161.   
74 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para.160 (emphasis added).  
75 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para.158.  
76 Appellate Body Report, "Japan – Alcoholic Beverages II " (DS8, DS10, DS11) , p.14 (emphasis added).  
77 Appellate Body Report, "Japan – Alcoholic Beverages II " (DS8, DS10, DS11) , p.14.  
78 See Appellate Body Report, "US – Shrimp" (Article 21.5 of the DSU – Malaysia) (DS58) , para.  109; 
Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para.160 (emphasis added).  
79 Article 3.2 of the DSU.   WT/DSB/M/423  
 
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 was not clear . Japan asked whether they would include : a certain amount  of time that would have 
passed after a  report was issued ; Members ' reliance on interpretation s included in reports ; change s 
of circumstances; non -workability; deficiencies in reasoning, logic and/or analyses; ambiguity of 
reports ; conflicting readings of a given report  by subsequent panels; manifest error s; whether 
passages of a given report amounted to  obiter dicta; and/or any  other reason.  Japan  believed that  
the lack of clarity in the concept  of "cogent reasons ", which ha d no textual basis in the DSU, was 
indicative of the deficient nature of this "cogent reasons doctrine ". This could be one issue that 
Members c ould discuss further with respect to t his matter . To support its "cogent reasons doctrine ", 
the Appellate Body had emphasized "the hierarchical structure " between panels and the Appellate 
Body, which, according to the Appellate Body, would show the Members ' recognition of "the 
importance of consistency and stability in the interpretation of [Members '] rights and obligations 
under the covered agreements ".80 Indeed, under the DSU, "[t]he Appellate Body may uphold, modify 
or reverse the legal findings  and conclusions of the panel "81 in a particula r dispute. This appear ed to 
be the provision in the  DSU that touche d on the relationship between the Appellate Body and panels. 
This mean t that in each dispute , the interpretation of a certain provision by the Appellate Body was 
superior to that of the pan el for that particular case only. Without this order of superiority between 
decisions  of two bodies in the same case, no two -tier judicial system would work. This principle 
based on the two -tier judicial system d id not automatically mean that there was a g eneral 
"hierarchical structure " between the Appellate Body and panels. Most importantly, Japan f ound no 
textual basis in the DSU that suggest ed any institutional hierarchy between the Appellate Body and 
panels. In this regard, and as noted by the Appellate  Body, its reports "are not binding, except with 
respect to resolving the particu lar dispute between the parties ".82 Indeed, this "cogent reasons 
doctrine " might imply that only the Appellate Body c ould depart from its prior decision s if there were 
cogent r easons, whatever they m ight be, but a panel could  not do so with or without cogent reasons. 
This could  be contrary to the fundamental function assumed by a panel under Article 11 of the DSU 
to "make an objective assessment of the matter before it, including the objective assessment of … 
the applicability of and conformity with the relevant covered agreements ". In discharging this duty, 
each panel, as well as the Appellate Body, had to  act so as not to compromise its own integrity.  
Japan also note d that the Appellate Body had also explained that "[t]he Panel 's failure to follow 
previously adopted Appellate Body reports addressing the same issue undermines the development 
of a coherent and predictable body of jurisprudence clarifying Members ' rights an d obligations under 
the covered agreement s as contemplated under the DSU ".83 The "development of a coherent and 
predictable body of jurisprudence " might  arguably be one of the goals of the dispute settlement 
system, which was "a central element in providing  security and predictability to the multilateral 
trading system ".84 Even assuming that would be case, achieving such goal would be the task of the 
dispute settlement system as a whole. The development of case law was an on -going and dynamic 
process and the coherence and predictability of jurisprudence c ould be achieved in the long term 
through the continu ous operation of, and through robust adjudicative dialogues within, the system 
as a whole. And as Japan had previously mentioned  at the present meeting , there could be many 
ways to achieve such objective . And Japan d id not believe that the clarification of Members ' rights 
and obligations under covered agreements c ould be made in the abstract, divorced from the 
particular context and circumstances of each disp ute, and c ould always transcend "the application 
of a particula r provision in a specific case ".85 Finally, w hile "consistency and coherence in decision -
making "86 of the Appellate Body was certainly important, the Appellate Body should be vigilant and 
stand ready to review its prior interpretations, where appropriate. Japan wished to  note that in 
practice, any standing judicial body often depart ed from its prior decisions by distinguishing  the case 
at hand from the previous case(s) without formally denouncing the latter  and without compromising 
its integrity. In this respect, more robust adjudicative dialogues m ight serve as a basis for this 
self-reflecting process of reviewing its prior re ports. From the perspective of the entire WTO regime, 
of which the dispute settlement system was an integral part, and its institutional structures, WTO 
Members ' close oversight and frequent reviews of past decisions through the DSB and, where 
appropriate,  recourse to authoritative interpretations under Article IX:2 of the WTO Agreement, 
                                                
80 Article 3.2 of the DSU.  
81 Article 17.13 of the DSU.  
82 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para.158.  
83 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para. 16 1 (emphasis added).  
84 Article 3.2 of the DSU. 
85 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para. 161.  
86 Rule 4(1) of the Working Procedures for Appellate Review.  
 WT/DSB/M/423  
 
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might also be required to maintain the proper balance of rights and obligations under the covered 
agreements. For this purpose, Members m ight wish  to establish a common sub sidiary committee 
that would review prior decisions of WTO adjudicators and mak e recommendations, if necessary. 
Such committee might  serve all WTO Councils overseeing the functions  of the covered agreements 
and would be open to all Members.  
4.32.   The representative of Singapore  said that the  United States had raised concerns that the 
Appellate Body (AB) ha d asserted that its reports effectively serve d as precedent , and that panels 
were to follow prior AB reports absent "cogent reasons ". The U nited States consider ed that this was 
inconsistent with WTO rules , as the only means for adopting binding interpretations was in Article 
IX:2 of the Marrakesh Agreement. One of the examples of US concerns was in p aragraph 160 of the 
Appellate Body r eport in the "US – Stainless Steel (Mexico)" dispute (DS344) , which state d that 
Article 3.2 of the DSU implie d that "absent cogent reasons, an adjudicatory body will resolve the 
same legal question in th e same way in a subsequent case ". However,  his delegation wished t o note 
that paragraph 158 of the same AB r eport also affirm ed that: "it is well settled that Appellate Body 
reports are not binding, except with respect to resolving the particular dispute between the parties ". 
Singapore  consider ed this statement of the A ppellate Body to be significant because, unlike the ICJ 
Statute, whose Article 59 explicitly provide d that "[t]he decision of the Court has no binding force 
except between the parties and in respect of that particular case ", there was no such explicit 
langu age in the DSU. Article 3.2 of the DSU stated, inter alia , that "the dispute settlement system 
of the WTO is a central element in providing security and predictability  to the multilateral trading 
system ". Therefore, even if past AB reports were, strictly speaking, not binding, it would clearly be 
in accordance with Article 3.2 of the DSU if adjudicators were to refer to past report s and would 
treat them as being highly persuasive. A predictable and certain  legal environment allow ed traders 
and bu sinesses to make informed business decisions and to conduct their affairs effectively.  These 
were his delegation's preliminary observations on this matter , which would likely be among the 
issues that w ould be addressed in the informal process for focused d iscussions on dispute settlement 
matters, conducted under the auspices of the General Council Chair person . He said that Singapore 
stood ready to constructively engage in this process and look ed forward to a fruitful discussion , with 
the view to unblocking the AB selection  processes .  
4.33.   The representative of the Philippines  said that his delegation had listened carefully to the full 
statement of the United States  made under this Agenda item . The Philippines  continue d to study US 
views not only on this matter , but also US statements made at  previous DSB meetings  on DSU and 
DSB issues.  On the one hand, h is country wished to express  some  appreciation of the relevance of 
US statements on the basis of past experience in relation to certain panel and Appellate Body  rulings.  
On the other hand , predictability in the DSU was helpful, if not crucial, in strengthening the 
multilateral trading system. There was, therefore , a balance between these two seemingly opposing 
views. Currently, t he important matter  was to pursue what need ed to be pursued in order to address 
the views expressed by the United States and other Members, should there be agreement to do so. 
A discussion of these issues m ight be integral to resolving other and more urgent matters before 
the DSB. In this regard, the Philippines welcome d the opportunity  to engage in constructive 
discussions  with interested Members  in order to address all areas  of concern, with the aim of 
contribut ing to the strengthening and improvement of  the WTO rules -based system .  
4.34.   The r epresentative of Mexico  said that his country wished to  thank the United States for 
having placed this item on the Agenda of the present meeting and for providing delegations  with the 
opportunity to discuss this matter in greater  depth.  The WTO Membership had decided to in clude  
the following general provision  in the DSU : "[t]he dispute settlement system of the WTO is a central 
element in providing security and predictability to the multilateral trading system" (Article 3.2 of the 
DSU).  In this respect, emph asis was given to the terms "security" and "predictability" , which were 
precisely what form ed the legal basis for the use of previous decisions as "precedent" (or " acquis ") 
by panels and the Appellate Body – something that was in fact desirable.  Mexico d id not share the 
position of the United States.  First, panel and Appellate Body decisions were binding only for the 
parties to the dispute, and while it was recogniz ed that they could  serve as reference, the very 
notion of "cogent reasons" ma de it possible t o depart from prior decisions.  Panels themselves and 
the Appellate Body ha d recogni zed that no system of stare decisis  existed.87 In cases such as  the 
                                                
87 See, for example: Appellate Body Report, "United States – Final Anti -Dumping Measures on Stainless 
Steel from  Mexico", WT/DS344/AB/R, paras. 158 -160, in particular footnote 308; Appellate Body Report, 
"United  States – Measures Affecting the Production and Sale of Clove Cigarettes", WT/DS406/AB/R, para. 258; WT/DSB/M/423  
 
- 31 - 
 
 
 
  
 
 "US – Anti-Dumping and Countervailing Duties (China) " dispute (DS379) , the Appellate Body stated 
that: "the legal interpretation embodied in adopted panel and Appellate Body reports become part 
and parcel of the WTO acquis  and have to be taken into account as such".88 Second , Mexico did  not 
know why the United States implie d that precedent equate d to a bindi ng interpretation under Article 
IX:2 of the WTO Agreement.  Mexico wished to reiterate that the General Council and the Ministerial 
Conference were the bodies  that ha d exclusive authority to adopt authoritative interpretations of 
WTO rules . Third, the funct ion of panels and the Appellate Body was to interpret legal texts, and it 
was precisely in carrying out this function that they need ed to interpret the rules as provided for in 
the DSU , namely,  "[t]he Members recognize that [the WTO dispute settlement syst em] serves  … to 
clarify the existing provisions of [the covered] agreements in accordance with customary rules of 
interpretation of public international law" (Article 3.2 of the DSU).  Fourth , regarding public 
international law, it was common for decisions to be treated as a source of ideas, even though the 
principle of stare decisis  did not exist. Members of international courts in most for a were not required 
to follow the particular legal analysis of a previous decision , and yet d id so in practice in order to 
foster the coherence and consistency of decisions , including where there had been  no legal 
requirement for this.  Moreover, in public international law, judicial decisions ha d been considered 
subsidiary means for the determinatio n of rules of law.  Fifth, in international law there was no 
doctrine of precedent (understood as the legal obligation to follow  previous decisions). The position 
of the United States was therefore surprising, as this doctrine d id not in any case exist in e ither the 
WTO or any other forum of public international law.  Sixth, the US statement raise d a number of 
questions , including  what was meant by "precedent" . If the United States d id not want precedent to 
be used in the sense of "WTO acquis ", Mexico wondere d whether it would agree to one case being 
resolved one way, while a nother  similar case w ould be  resolved differently . Mexico asked h ow 
security and predictability could be ensured through divergent rulings that were not based on the 
WTO acquis . Mexico als o asked whether the United States could  name an international court in which 
precedent was not used . Seventh , Mexico said that what the United States fail ed to take into account 
was that panel and Appellate Body reports were ultimately adopted by the DSB, which mean t that 
in the final instance it was the DSB itself that provide d guidance to panels and the Appellate Body, 
including with statements made by Members during DSB meetings when reports  were adopt ed. 
Lastly, Mexico wished to reiterate its readiness to continue  and deepen discussions of the concerns 
that exist ed with respect to the WTO dispute settlement system , and to the Appellate Body in 
particular . However, such concerns c ould not serve as reasons to prolong the blockage of the AB 
selection proces ses.  
4.35.   The representative of China  said that China wished to thank the United States for having 
placed  this item on the Agenda of th e present  meeting. As discussed during the General Council 
meeting on 12 December 2018, the joint proposal contained in docum ent WT/GC/W/752 and 
cosponsored by the EU, China and many other Members had made concrete effort s to address US 
concerns o ver the "precedential value " of panel or Appellate Body reports. China  believe d that this 
issue w ould be discussed in detail in the informal process t hat would  be set up by the Chair of the 
General Council soon  after the present meeting . Without prejudice to China's position  on this 
important issue, China  would be happy to share some preliminary observati ons at the present 
meeting . It seem ed that the exact meaning of the term "precedent " varied depending on the  context  
in which it was used . In legal theory, it might  have different meanings, such as binding precedent, 
persuasive precedent, de jure  precedent , or de facto  precedent. To avoid theoretical debate s on this 
complex issue, China rather wished to suggest that the discussion should focus on what had 
happen ed under the current Appellate Body practice.  First, it wa s well settled that p anel or Appellate 
Body reports we re not binding, except with respect to the parties to a particular dispute.89 The DSU 
did not explicitly provide that panel or Appellate Body reports were  "precedent " or a source of WTO 
jurisprudence. By contrast, Article 9.2 of the Marrakesh Agreement explicitly state d that the 
                                                
Appellate Body Report, "United States – Definitive Anti -Dumping and Countervailing Duties on Certain Products 
from China", WT/DS379/AB/R, para. 325; Panel Report, "India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products", Complaint by the European Communities and their member States, WT/ DS79/R, 
paras. 7.25 –7.30; Panel Report, "United States – Use of Zeroing in Anti -Dumping Measures Involving Products 
from Korea", WT/DS402/R, para. 7.31; Panel Report, "China - Countervailing and Anti -Dumping Duties on Grain 
Oriented Flat -Rolled Electrical Steel from the United States", WT/DS414/R, para.  7.392.  
88 Appellate Body Report, "United States – Definitive Anti -Dumping and Countervailing Duties on Certain 
Products from China", WT/DS379/AB/R, para. 325.  
89 "Japan – Alcoholic Beverages II " (DS8, DS10, DS 11); "US – Shrimp" (Article 21.5 of the DSU – Malaysia) 
(DS58) ; "US – Stainless Steel (Mexico)" (DS344) .  WT/DSB/M/423  
 
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Ministerial Conference and General Council were the exclusive bodies for rendering a definitive 
interpretation of the GATT provisions or the Uruguay Round A greement .  Second, the "precedential 
value " of panel or Appellate Body reports was the natural effect of the requirement of Article 3.2 of 
the DSU, which provide d that: "[t]he dispute settlement system of the WTO is a central element in 
providing security and predictability to t he multilateral trading system ". "Security and predictability " 
did not imply that deviation from prior decisions  was impermissible . Rather , it underscore d the legal 
presumption that the same legal issue had to  be treated in the same manner . In that regard,  it was 
necessary to take into account prior panel or Appellate Body reports adopted by Members and not 
depart from well -established jurisprudence clarifying  the interpretation of the same legal issue unless 
because of  compelling reasons. Failure by subsequent panels to follow previously adopted panels 
and Appellate Body reports which had address ed the same issue would undermine the development 
of a coherent and predictable body of jurisprudence that clarified Members' rights and obligations 
under the covered agreements. During the GATT -era, Panel s had issued reports with conflicting 
interpret ations, and that had been  seen as problematic. For example, regarding the issue of 
equitable share rule, the Panel Report in the "EEC-Subsidies on Export of Wheat Flour " dispute 
(1983) and Panel Report i n the "French Assistance to Exports of Wheat and Wheat Flour " dispute 
(1958) had reached conflicting findings which thereafter  had caused great concerns f or some 
delegates to the Subs idies Committee.90 The Appellate Body had been , in part, a deliberate response 
to the problem of inconsistent panel interpretations. By saying  that that panels had to  follow  adopted 
Appellate Body reports absent "cogent reasons " one implied that the jurispr udence  would become 
more consistent and Members would have  a much clearer and more predictable understanding of 
what the rules mean t. Third, the prevailing practice of Members had also indicated the common 
interest of Members in  maintain ing the "precedential value " of adopted panel and Appellate Body 
reports. WTO Members, including the United States, frequently cite d adopted panel and Appellate 
Body reports to support their legal arguments in dispute settlement proce dures . This  suggest ed that 
they fully recognize d the "precedential value " of these reports. Moreover, as China recall ed, the 
"precedential value " of adopted Appellate Body reports had been extensively debated in various 
occasions , and the vast majority of Members seem ed to agree with th e Appellate Body 's approach 
that an adjudicatory body should  resolve the same legal question in the same way absent cogent 
reasons. For instance, at the 20 May 2008 DSB meeting, while  discussing the Appellate Body R eport 
in the "US – Stainless Steel (Mexic o)" dispute (DS344) , the EU had stated that the Appellate Body 's 
approach confirm ed the rules -based nature of the WTO as well as the multilateral aspects of dispute 
settlement . At the same DSB meeting,  India stated that it believed that legal interpretatio ns 
embodied in the adopted Panel and Appellate Body Reports had become part and parcel of the acquis  
of the WTO dispute settlement system. Rejecting this prior jurisprudence by a panel amounted to 
undermining Members ' faith that adopted reports created legitimate expectations for the purpose of 
consistency and stability in the interpretation of their rights and obligations under the covered 
agreements.  Furthermore, according to Article 11 of the DSU, "a panel should ma ke an objective 
assessment of the matter before it, including an objective assessment of the facts of the case and 
the applicability of and conformity with the relevant covered agreements ". Taking the adopted panel 
or Appellate Body interpretations into co nsideration d id not amount to the abdicat ion of a  panel 's 
responsibility to conduct an objective assessment. Where there was cogent reason  to do so , a panel 
or the Appellate Body could depart from prior interpretations in adopted reports. Fourth, the 
"precedential value " of Panel and Appellate Body reports was compatible with other provisions of 
WTO agreements. According to Article 3.9 of the DSU, prior judicial interpretations by panels and 
the Appellate Body did not prejudice the right of WTO M embers to e xercise their competence under 
Article 9.2 of the Marrakesh Agreement. Although panels and the Appellate Body exercise d 
interpretive autonomy, the ultimate interpretive authority was with WTO Members. Simply put, 
judicial interpretation was not a freewheel ing instrument that operat ed without checks and balances. 
For instance, Members ha d full authority under Article 9.2 of the Marrakesh Agreement to correct 
views of the Appellate Body or trends in its reports on any specific treaty interpretati on issue. Fro m 
that perspective, revitalization of the negotiation pillar of the WTO could  greatly alleviate Members ' 
concerns on the "precedential value " of panel and Appellate Body reports.  China wished to conclude  
its statement by expressing the great importance that China attached to this systemic issue . China 
did not think that p aralyzing  the Appellate Body was the right way to solve th is concern. China  
looked forward to more detailed discussion s in the informal process to be set up by the Chair man of 
                                                
90 Robert Howse, "The World Trading System: Critical Perspectives on the World Economy", Routledge, p . 
100. WT/DSB/M/423  
 
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 the General Council shortly.  China  also call ed for the immediate launch of  the AB selection process es 
and for AB vacancies to be filled as soon as possible , in accordance with the Article 17.2 of the DSU.  
4.36.   The representative of New Zealand  said that New Zealand wished to thank the U nited States 
for having explain ed its concerns on this issue  at the present meeting . New Zealand  value d the 
opportunity for Members to exchange views  on this matter . New Zealand  acknowledge d US concern s 
regarding the precedential value of Appellate Body reports.  New Zealand  agree d that Appellate Body 
reports were not a substitute for the text agreed by Members, and that the ability to adopt 
authoritative interpretations of WTO rights and obligations was reserved for WTO Members pursuant 
to Article IX:2 of the Marrakesh Agreement.  A panel established to hear a dispute ha d a duty to 
carefully consider the facts of the case and apply the agreed text to those facts.  Having  said that, 
New Zealand  also acknowle dged that Appellate Body reports provide d helpful guidance for future 
cases, and that reference to previous Appellate Body reports c ould support greater security and 
predictability in the multilateral trading system.  New Zealand  looked forward to a deeper discussion 
with the U nited States and other Members on the functioning of the Appellate Body, including 
through processes proposed at the 12 December 2018 General Council meeting .  
4.37.   The representative of the European Union  said that a t the outset, the Europ ean Union w ished 
to stress that there was no stare decisis  or formal rule of precedent in WTO law. Any suggestion that 
such rules exist ed in the WTO, or that they ha d been asserted to exist by WTO adjudicators was 
misleading. The principle of stare decisis , or binding judicial precedent, by which courts were bound 
by their previous decisions, was traditionally recogni zed in common law jurisdictions. It was often 
regarded as one of the distinctive aspects of Anglo -American common law systems, which set them 
apart from other legal systems. Indeed, the doctrine of stare decisis  was generally unknown to civil 
law jurisdictions. Neither d id it generally apply to international jurisdictions. To cite but one example, 
Article 59 of the Statute of the International C ourt of Justice emphasi zed that: "[t]he decision of the 
Court has no binding force except as between the parties and in respect of that particular case ". A 
rejection of the doctrine of stare decisis  should not however be mistaken for a rejection of continu ity 
and consistency in jurisprudence. First, all legal systems shared a  common an interest in the 
continuity and consistency of their jurisprudence. Whether as a matter of doctrine or practice, a high 
value was placed on consistency, certainty and predicta bility of the jurisprudence, particularly as 
regard ed decisions rendered by the highest courts. Second, decisions rendered by the hierarchical ly 
superior court or tribunal were, in all legal systems, followed by subsidiary courts or tribunals. The 
absence of stare decisis  merely mean t that the decision b ound only the parties to a particular case. 
However, it d id not prevent that decision from being treated in a later case as the correct legal 
position. Regarding the WTO dispute settlement system specificall y, it was undisputed that Appellate 
Body or panel reports d id not have precedential effect or automatic applicability beyond the specific 
dispute and the immediate parties. The Appellate Body ha d clearly and consistently held that, under 
the DSU, "Appellat e Body reports are not binding, except with respect to resolving the particular 
dispute between the parties" .91 At the same time, and notwithstanding any specific characteristics 
of the WTO dispute settlement system that m ight differentiate it from internat ional or national courts 
or tribunals, there was no doubt that it also serve d to provide security and predictability to WTO 
Members and the multilateral trading system as a whole. It d id so by clarifying and interpreting the 
rules, so that Members could  act accordingly. This objective of the WTO dispute settlement system 
was reflected expressis verbis  in Article 3.2 of the DSU. It was also clear that, in accordance with 
Article 3.2 of the DSU, the need for security and predictability require d consistency in WTO 
jurisprudence, including in particular Appellate Body decisions relating to questions of law and legal 
interpretations of the covered agreements. This d id not of course mean that departures from 
previous decisions were impossible. Secur ity and predictability should not be equated with rigidity 
and inflexibility. The EU believed that  there should be enough room for the evolution of the 
jurisprudence which could  sometimes be necessary, for instance due to changing circumstances. 
However, h aving regard to the objectives of the dispute settlement system, departures from 
previous decision had to  be carefully considered and require d the identification of cogent reasons 
for doing so. The EU  recall ed that the approach followed by the Appellate Bo dy was that "absent 
cogent reasons, an adjudicatory body will resolve the same legal question in the same way in a 
subsequent case" .92 The EU believed that t his approach  struck the right balance between security, 
predictability and coherence on the one hand , and flexibility, on the other hand. In particular, the 
                                                
91 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para. 158.  
92 Appellate Body Report, "US – Stainless Steel (Mexico)" (DS344) , para. 160.  WT/DSB/M/423  
 
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reference to "cogent reasons" obviously allow ed for evolution of the jurisprudence, where warranted 
in the presence of such cogent reasons. Any suggestion that each case should stand on its own and 
should be decided without regard to the recommendations and rulings of the DSB in prior cases 
would deny the major achievement of the WTO dispute settlement system and undermine t he central 
feature of the rules -based multilateral trading system. The EU wish ed to conclude by stating that  
ensuring security and predictability through consistency of the jurisprudence d id not, by any means, 
amount to the application of the stare decisis  doctrine in the WTO system or to asserting that 
Appellate Body or panel repor ts had precedential value.  
4.38.   The DSB took note of the statements . 
5  COSTA  RICA – MEASURE S CONCERNING THE IMP ORTATION OF FRESH AV OCADOS 
FROM MEXICO  
A.  Request  for the establishment of a panel by Mexico  (WT/DS524/2)  
5.1.  The Chairperson  recall ed that the DSB had considered this matter at its meeting on 
4 December  2018,  and had agreed to revert to it. She then  drew attention to the communication 
from Mexico contained in document WT/DS524/2, and invited the representative of Mexico to speak . 
5.2.  The representative of Mexico said that  his country  welcome d the opportunity at the present 
meeting to raise this matter for a second time in order to address the ongoing dispute regarding the 
measures adopted by Costa Rica concerning the importation of fresh avocados for consumpt ion from 
Mexico.  Mexico had held consultations with Costa Rica on 26 and 27 April 2017 with a view to 
resolving this matter.  Regrettably, and in spite of the considerable efforts and patience of Mexican 
authorities, the dispute ha d not yet been settled.  Mexico was extremely disappointed by Costa Rica's 
measures, especially because this Member was a trading partner that had been  known to  guarante e 
free trade, and mo re specifically because Mexican  avocados had been exported to Costa Rica without 
any problems for more than 20 years.  Mexico therefore ha d no choice but to proceed with this 
dispute in light of Costa Rica's failure to duly comply with its obligations under the Agreement on 
Sanitary and Phytosanitary Measures  and the GATT 1994, and the continuing ba n on the importation 
of Mexican avocados.  Mexico therefore request ed, for the second time, that the DSB establish  a 
panel with the standard terms of reference provided for in Article 7.1 of the DSU, to examine the 
consistency of the measures adopted by Cos ta Rica.  
5.3.  The representative of Costa  Rica said that Costa Rica regret ted Mexico's decision to request, 
for the second time, the establishment of a panel on this matter. Costa Rica d id not see any need 
for the establishment of this panel,  since Costa  Rica a nd Mexico had signed a bilateral agreement 
under which both parties had agreed to establish a joint technical work programme that would enable 
the parties  to settle this dispute.  In any event, Costa Rica consider ed its phytosanitary measures to 
be consiste nt with the provisions of the Agreement on Sanitary and Phytosanitary Measures and the 
GATT 1994. The phytosanitary requirements applied by Costa Rica were fully justified and were 
supported by a risk analysis that complie d with WTO rules. Costa Rica there fore believed  that the 
panel w ould reject Mexico's claims.  Furthermore, Costa Rica was assessing Mexico's panel request 
in light of the relevant requirements of the DSU and w ould assert its procedural rights should this 
be deemed necessary.   
5.4.  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.  
5.5.  The representatives of Canada , China , El Salvador , the European Union , Honduras , India, 
Panama , the Russian Federation  and the United States  reserved their third -party rights to participate 
in the Panel's proceedings.  WT/DSB/M/423  
 
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 6  RUSSIAN  FEDERATION – ADDITI ONAL DUTIES ON CERTA IN PRODUCTS FROM THE  
UNITED  STATES  
A.  Request  for the establishment of a panel by the United  State s (WT/DS5 66/2) 
6.1.  The Chairperson  recall ed that the DSB had considered this matter at its meeting on 
4 December  2018,  and had agreed to revert to it. She then  drew attention to the communication 
from the United  States contained in document WT/DS566/2 , and invited the representative of the 
United  States to speak . 
6.2.  The representative of the United  States  said that the United States ha d explained  that the US 
actions taken on imports of steel and aluminium  pursuant to Section 232 were to address a threat 
to its national security. Every sovereign ha d the right to take action it consider ed necessary for the 
protection of its essential security. This inherent right had not been forfeited in 1947 with the GATT 
or in 1994 with the creation of the WTO. Instead, t his right had been  enshrined in Article XXI of the 
GATT 1994. The actions of the United States were completely justified under this Article. What 
remain ed inconsistent with the WTO Agreement, however, was the unilateral retaliation against the 
United State s by various WTO Members including Russia. These Members pretend ed that the US 
actions under Section 232 were so-called "safeguards ", and claim ed that their unilateral, retaliatory 
duties constitute d suspension of substantially equivalent concessions under  the WTO "Agreement on 
Safeguards ". Just as these Members appear ed to be ready to undermine the dispute settlement 
system by ignoring the plain meaning of Article XXI and 70 years of practice, so too were they ready 
to undermine the WTO by pretending to fo llow its rules while imposing measures that blatantly 
disregard ed them. This was all too apparent, not only to the United States, but to the Members 
themselves. Russia, for example, ha d not addressed whether its action was in response to an alleged 
"safeguard " taken as a result of a n absolute increase in imports.  If there had been  an absolute 
increase, the right to suspend substantially equivalent concessions under the Safeguard s Agreement 
could  not be exercised for the first three years of the safegu ard measure. There was no doubt that 
Article XIX of the GATT 1994 could  be invoked by a Member to depart temporarily from its 
commitments in order to take emergency action with respect to increased imports. The United 
States, however, was not invoking Arti cle XIX as a basis for its Section 232 actions and ha d not 
utilized its domestic law on safeguards. Thus, Article XIX and the Safeguards Agreement were not 
relevant to the US actions under Section 232. Because the United States was not invoking Article 
XIX, there was no basis for another Member to pretend that Article XIX should have been invoked 
and to use safeguards rules that were simply inapplicable. The additional, retaliatory duties were 
nothing other than duties in excess of Russia 's WTO commitments and were applied only to the 
United States, contrary to Russia 's most -favoured -nation obligation. The United States w ould not 
permit its businesses, farmers, and workers to be targeted in this WTO -inconsistent way. For these 
reasons, the United States requ ested that the DSB establish a panel to examine this matter with 
standard terms of reference.  
6.3.  The representative of the Russian  Federation  said that Russia  was disappointed by the decision 
of the United States to request  the establishment of a panel for th e second time. Russia  reaffirm ed 
its position that Russia's challenged measures constitute d a WTO -consistent step taken due to the 
imposition of additional duties on steel and aluminium  by the United States. Russia had already 
explained it in detail at the  4 December  2018 DSB meeting. It was most bewildering to hear from 
the delegation of the United States that it was Russia who undermine d the dispute settlement 
system. It was the United States who had arbitrarily imposed additional duties on steel and 
aluminium  and who had used them as leverage  that would allow the United States , with varying  
degree s of success, to secure  trade concessions from certain Members. Russia also wished to  note 
that due to US efforts to "improve" the WTO dispute settlement mec hanism , which had left  the 
Organization with a paralyzed dispute settlement system, the U nited States was the last Member to 
deserve  the title of guardian of the dispute settlement system in particular, and of the multilateral 
trading system, in general.  With all the damage already done, at the present meeting  the United 
States was requesting the establishment of a panel to challenge measures explicitly authoriz ed by 
WTO law in cases, such as  the imposition of additional duties in the way that the United S tates ha d 
done. Russia believed that  all US actions were merely another attempt at turning the WTO "upside  
down ". WT/DSB/M/423  
 
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6.4.  The representative of the European Union  said that the DSB had considered this US panel 
request at the 4 December  2018 DSB meeting . The DSB had considere d four similar panel requests 
by the United States  at the 21 November 2018 DSB meeting . The EU had then spoke n in relation to 
the panel request that had related to the EU suspension of equivalent GATT obligations in response 
to the undeclared safeguard measures which the U nited States had taken  in support of its steel and 
aluminium industries. The EU welcome d the fact that Russia, like quite a number of other WTO 
Members, had likewise resorted to its right to suspend equivalent obligations vis-à-vis the United 
States. The EU look ed forward to defending, before the panels, its right and the right of other WTO 
Members to suspend equivalent obligations, and to defending the rules -based multilateral trading 
system. The United States remain ed wrong i n suggesting that the actions of the EU  and of other 
Members undermine d the WTO, that their actions were blatantly against WTO rules and that they 
were undermining the dispute settlement system by standing up to the abuse by the United States 
of Article XX I of the GATT. The EU  indeed firmly believe d that the US measures were safeguards and 
that other WTO Members therefore ha d the right to suspend  the GATT obligations.  
6.5.  The DSB took note of the statements and agreed  to establish a panel in accordance with the 
provisions of Article  6 of the DSU with standard terms of reference.  
6.6.  The representatives of Brazil , Canada , China , Egypt , the European Union , India, Indonesia , 
Kazakhstan , Japan , Malaysia , Mexico , New Zealand , Norway , Qatar , the Kingdom of Saudi Arabia , 
Singapore , Switzerland , Chinese Taipei , Thailand , Turkey  and the Bolivarian Republic of Venezuela  
reserved their third -party rights to participate in the Panel's proceedings.  
7  SAUDI  ARABIA – MEASU RES CONCERNING THE  PROTECTION OF INTEL LECTUAL 
PROPERTY RIGHTS  
A.  Request  for the establishment of a panel by Qatar  (WT/DS567/3)  
7.1.  The Chairperson  recall ed that the DSB had considered this matter at its meeting on 
4 December  2018,  and had agreed to revert to it. She then  drew attention to the communication 
from Qatar contained in document WT/DS567/3, and invite d the representative of Qatar to speak.  
7.2.  The representative of Qatar  said that Qatar wished to reiterate at the present meeting its 
request t hat the DSB establish a panel to examine  this dispute . Qatar had  explained the subject 
matter and circumstances of this dispute at the 4 December  2018 DSB meeting. In short, Saudi 
Arabia fail ed to protect intellectual property rights contrary to its obligations under the TRIPS 
Agreement. Copyrighted media conten t owned by a Qatari company, b eIN Corporation, was subject 
to widespread, wilful and commercial scale piracy in Saudi Arabia. Yet, th is Qatari company c ould 
not seek civil remedies against the Saudi -based pirate to protect its rights or otherwise benefit from 
copyright protection in Saudi Arabia. Moreover, Saudi Arabia ha d not applied criminal procedures 
and penalties to the pirate, far from it. Remarkably, Saudi authorities aid ed the pirate in its business 
of distributing s tolen content including content licensed to beIN by rights holders from around the 
world . Such content includ ed the 2018 FIFA World Cup, the 2018 Super Bowl and many other games 
and events. Further, the Saudi pirate' s set-top boxes enable d access to hundre ds of proprietary 
television channels and thousands of on -demand program mes from around the world without the 
authorization of the rights holders. Saudi Arabia's tolerance of and support for intellectual property 
theft threaten ed in particular the  business model of professional sport. And Saudi Arabia's  apparent 
belief  that its measure s were immune from review undermine d the foundation s of international 
intellectual property  protection  and extend ed far beyond copyright s. Qatar wished to  comment on a 
few points raised at the 4 December  2018 DSB meeting . Saudi Arabia had contended that the 
absence of diplomatic relations between it and Qatar ma de it impossible to conduct dispute 
settlement proce dures . Another Member had expressed the preference that t his dispute be resolved 
without recourse to WTO dispute settlement. Qatar wishe d that it would not have  to initiate  dispute 
settlement proce dures  at the present meeting . Indeed, the preamble to the TRIPS Agreement 
highlight ed that issues of intellectual pr operty  infringement concern ed private rights. As such, these 
issues should be adjudicated in Saudi Arabia's domestic courts , and dealt with through the Saudi 
criminal justice system. This was precisely what was required by the TRIPS Agreement. However,  
with the unchecked violations of intellectual property  rights having persisted for well over a year and 
with Saudi Arabia refusing to engage in opportunities for dialogue with Qatar, a WTO panel was one 
of the few for a open to Qatar  to effectively address this dispute. The absence of diplomatic relations WT/DSB/M/423  
 
- 37 - 
 
 
 
  
 
 did not render dispute settlement impossible. Saudi Arabia ha d not freed itself of any WTO obligation 
by severing relations with Qatar , and diplomatic relations were not required to eng age in dispute 
settlement proce dures . Indeed, it would be incompatible with the whole purpose of the DSU if dispute 
settlement were not open to the parties to this dispute , precisely at the moment when such recourse 
was needed the most.  This was the second  time that  Qatar's  panel request appeared on the DSB's 
Agenda , therefore,  pursuant to  Article 6.1 of the DSU, a panel must to be established at the present 
meeting . 
7.3.  The representative of the Kingdom of Saudi Arabia  said that Saudi  Arabia  deeply regret ted that 
a panel ha d been requested for a second time with regard to  a matter that ha d no legitimate 
connection to the WTO or to compliance with WTO rules. As Saudi Arabia had  explained in its 
statement made at the 4 December 2018 DSB meeting  on this matter, establishing and maintaining 
diplomatic relations between nation States was a fundamental exercise of a State's sovereignty  on 
which the WTO agreements d id not and c ould not infringe. Saudi Arabia had severed diplomatic 
relations with the comp laining party in June 2017 in order to protect its essential security interest s. 
The severance of diplomatic relation s render ed impossible the conduct of any dispute settlement 
procedures in this matter , consistent with Saudi Arabia's essential security in terest s. As Members 
were aware, consistent with Article 73 of the TRIPS Agreement, nothing c ould compel  any Member 
to engage in dispute settlement proce dures  in circumstances of national security. Indeed, a panel 
would have no power to make findings in thi s matter , other than to recognize that Saudi Arabia ha d 
invoked Article 73 of the TRIPS Agreement. Therefore, Saudi Arabia did not  see any point regarding 
this panel request. Saudi Arabia w ished , once again , to reconfirm that it fully respect ed all obligat ions 
that appl ied under WTO A greements , including under the TRIPS Agreement. His delegation  strongly 
submit ted that the WTO wa s not and c ould not be turned  into a venue to resolve national security 
dispute s. Saudi Arabia simply w ould not engage in dispute settlement procedures or any other 
international interaction with a party that it d id not recognize diplomatically , due to an emergency 
in international relation s, other than to assert its invocation of the national security exceptio n under 
Article 73 of the TRIPS Agreement. Therefore, Saudi Arabia  continue d to see no basis for this dispute 
and did not  agree to establish a panel  in this matter . 
7.4.  The representative of the United Arab Emirates  said that his  delegation wished  to be associated  
with the statement made by the Kingdom of Saudi Arabia, the Kingdom of Bahrain and  the Arab 
Republic of Egypt at the 4 December  2018 DSB meeting , as well as with the statement  made by 
Saudi Arabia at the present meeting . The United Arab Emirates  (UAE) strongly support ed the 
rejection by Saudi Arabia of the request to establish a panel on the matter related to national security 
exceptions under  Article 73 of the TRIPS Agreement and Article XXI of the GATT 1994. Therefore, 
the UAE w ished  to underline that the measures taken by Saudi Arabia were necessary to protect its 
national security interests. The UAE regret ted that this matter ha d been brought to the DSB. The 
UAE consider ed that a panel would not have  proper jurisdiction to hear this  dispute.  
7.5.  The representative of the Kingdom of Bahrain  said that his delegation  regret ted that this matter 
had been brought before  the DSB for the second time . Bahrain wished to  reiterate its 
position  that issues related to national security c ould not be r esolved in the WTO. As stated at the 
4 December  2018 DSB meeting , Bahrain noted that Saudi Arabia ha d invoked Article 73 of the TRIPS 
Agreement . Bahrain therefore believe d that there was no basis for a panel to review the 
complainant's claims.  
7.6.  The representative of the European Union  said that the EU  wished to recall its position on some 
procedural aspects raised in the context of this dispute. The EU wished to note that Qatar had 
requested that a panel be established with the standard terms of reference, as provided by Article 
7.1 of the DSU. Pursuant to Article 7.1 of the DSU, these had to be the terms of reference of the 
panel, unless the parties to the dispute agree d otherwise within 20 days from the establishment of 
the panel. The EU took note of Members'  views regarding the panel's jurisdiction or authority over 
certain issues that m ight be raised in this dispute. If such issues indeed ar ose, these arguments 
could be raised  before the panel which  would examine  these issues , in accordance wit h its terms of 
reference. The EU w ould offer its views before the panel in its capacity as third party in this dispute. 
With respect to security exceptions, such as Article XXI of the GATT 1994 and the equivalen t 
provision of the TRIPS  Agreement, the EU c ould already recall its position , which  it had regularly 
expressed at recent  DSB meetings , namely , that these provisions were GATT and TRIPS  exceptions 
and, therefore, justiciable for panels and the Appellate Body.  WT/DSB/M/423  
 
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7.7.  The representative of the United States  said that Saudi Arabia ha d, once again , indicated at 
the present meeting that its measures were justified on the basis of essential security. As the United 
States had observed at the 4 December  2018 DSB meeting and previous ly, from the very beginning 
of the international trading system, Members ha d understood that each WTO Member retain ed the 
authority to determine for itself the actions it consider ed necessary to protect its essential security 
interests under provisions such as Article 73  of the TRIPS Agre ement . A WTO panel 's review of a 
Member 's invocation of its essential security interests would be contrary to the text of Article 73  of 
the TRIPS Agreement , which – like GATT 1994 Article XXI – made clear that this provision was self-
judging, meaning that every WTO Member ha d the right to determine, for itself, what actions were 
in its own essential security interests. Under these circumstances, the United States consider ed that 
the parties should resolve the issues raised in this dispute outside the contex t of WTO dispute 
settlement.  
7.8.  The representative of China  said that China had taken  note of the panel request made by Qatar 
under the DSU to resolve its dispute with  Saudi Arabia  regarding the TRIPS measures.  China was 
closely following this dispute, which potentially involve d the application of provisions on security 
exception s. China recognize d that security exceptions were sensitive provisions relating to the 
sovereignty and security interests of Members. Given the p otential implications to the multilateral 
trading system if abused , China was of the view  that the security exception provisions should only 
be invoked to safeguard genuine national interests and be implemented in a faithful and cautious 
manner. China also acknowledge d that under WTO  rules, WTO Members had the legitimate right  to 
defend their trade interests through the dispute settlement mechanism. Measures alleged to be in 
relation to security d id not constitute  an exception to the application of DSU, since neither the 
relevant security  exception s provisions  under the covered agreements, nor the negotiation  history 
had specified such exception s.  
7.9.  The representative of Canada  said that Canada had  taken note of Saudi Arabia's position 
regarding the absence of diplomatic relations with Qatar. When a country bec ame a Member of the 
WTO, it accept ed the compulsory jurisdiction of the WTO dispute settlement system. The DSU did 
not foresee exceptions to that rule. The sole basis for the DSB not to establish a panel when one 
was requested was if there was a consensus amongst all WTO Members to that effect in the DSB. 
The authority of a panel to adjudicate was not negated by the absence of diplomatic relati ons 
between disputing parties. Saudi Arabia's position, if it w ere to prevail, would "add to or diminish 
rights or obligations" under the DSU, contrary to Article 3.2  of the DSU . In addition, Canada  wished 
to recall that, pursuant to Article 3.10  of the DS U, "the use of the dispute settlement procedures 
should not be intended or considered as contentious act s" and that, "if a dispute arises, all Members 
will engage in these procedures in good faith and in an effort to resolve the dis pute".  
7.10.   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.  
7.11.   The representatives of Australia , the Kingdom of Bahrain , China , the European Union , India, 
Japan , Korea , Mexico , Norway , the Russian Federation , Singapore , Chinese Taipei , Turkey , the 
United Arab Emirates  and the United States  reserved their third -party rights to participate in the 
Panel's proceedings.  
8  UNITED  STATES – TARI FF MEASURES ON CERTA IN GOODS FROM CHINA  
A.  Request  for the establishment of a panel by China  (WT/DS543/7)  
8.1.  The Chairperson  drew attention to the communication from  China contained in document 
WT/DS543/7 , and invited the representative of China to speak.  
8.2.  The representative of China  said that China had requested consultations with the U nited States 
in this dispute on 4 April 2018, and had filed addenda to its request for consultations on 6 July, 
16 July, and 18 September 2018. Consultations had been  held on 28 August and 22 October 2018. 
These cons ultations had failed to resolve th is dispute. Due to the urgency of the dispute which 
brought  tremendous damages to the rules -based trading system and China ' trade interests, China 
had no other choice but to request that the DSB establish a panel at the present meeting  in 
accordance with WTO rules. The measures at issue affect ed significant trade interests of China. WT/DSB/M/423  
 
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 Following the report released on 22 March 2018 by the US  Trade Representative  under Section 301 
of the Trade Act 1974, on 6 July 2018, t he United States had  unilaterally imposed a 25  percent 
additional import duty on US$34 billion of imports from China, starting from 20 June 2018 based on 
its own determination under Section 301. Subsequently, on 24 September 2018, the U nited States 
had taken  further action by imposing a 10 percent additional import duty on US$200 billion of 
imports from China. The US unilateral measures imposing additional tariffs on Chinese products 
affect ed thousands of tariff lines of Chinese products worth hundreds of billio ns of dollars of trade 
from China . These US measures  further worsen ed the global economic and trade environment, 
damage d global industrial supply chains and hurt the interests of numerous companies a nd 
consumers around the world. China wished to reiterate its position that the unilateral actions taken 
by the U nited States not only infringe d China 's rights and interests, but also flagrantly violate d WTO 
rules. The measures at issue taken by the U nited States appear ed to violate the WTO 's fundamental 
principl es of non -discrimination, bound tariffs and strengthening of the multilateral system, as set 
forth in Article s I and II of the GATT 1994, as well as Artic le 23 of the DSU respectively. As China 
had stated at the 8 May 2018 General Council meeting, the WTO was indeed a shield for Members 
to defend themselves against trade protectionism. And it was not a shield to hide measure s that 
went against WTO rules. If unilateralism were unrestrained, it would bring destruction to the world 
economy to the detriment of all Members, especially de veloping countries. Any Member could  be the 
target of such actions, and no Member, especially small and medium economies, c ould defend itself 
on its own. The unilateral tendency of US trade policy was of serious concern to all Mem bers and 
had to  be firmly rejected. Silence on th ese unilateral action s would compromise the rules and 
disciplines that were the foundation of the multilateral trading system. China was extremely 
concerned and resolutely opposed to th ese unilateral action s. China urge d the U nited States to take 
immediate action to restore the bound tariffs. The U nited States should never  engage in actions so 
obviously WTO -inconsistent and had to  reject this path and return to complying with  WTO rules. At 
the present meeting , China request ed that the DSB establish a panel and firmly believe d that the 
DSB w ould deal with this matter in an objective and fair manner, and restore orderly global trade.  
8.3.  The representative of the United States  said that the  United States ha d serious  concerns with 
China 's request for establishment of a panel. First, in bringing this dispute, China s ought  to use the 
WTO dispute settlement system as a shield for a broad range of trade -distorting policies and 
practices not covered by WTO rules.  In doing so, it wa s China, and certainly not the United States, 
that was threatening the overall viabili ty of the WTO system. Second, China 's request was 
hypocritical. China was currently retaliating against the United States by imposing duties on over 
US$100 billion in US trade. China c ould not challenge US tariff measures for being "unilateral " and 
WTO-inconsistent, while at the same time openly adopting its own tariff measures in connection with 
the very same issue. Third, in these circumstances, the outcome  of any dispute settlement 
proceeding would be pointless. As the United States had noted, China ha d already taken the 
unilateral decision that the US measures c ould not be justified, and China ha d already imposed tariff 
measures on US goods. China 's unfair  trade practices with respect to forc ed technology transfer 
were well -documented. China c ould not credibly dispute their existence , their unfairness or their 
distortionary impacts on world trade. The United States ha d previously addressed China 's technolog y 
transfer policies at the DSB meetings held in March, April, and May 2018. In addition to the US 
statement at the present meeting , the United States  referred Members to the US statements  made 
at those prior DSB meetings . In March 2018, the United States had released a comprehensive report 
on four aspects of China 's policies regarding technology transfer. The report was over 200 pages in 
length, and was based on public testimony, public submissions, an d other evidence.93 The report 
had supported the followin g conclusions.  
8.4.  First, the United States said that China use d foreign ownership restrictions, such as joint 
venture requirements and foreign equity limitations, and various administrative review and licensing 
processes, to require or pressure technology transfer from foreign companies. China's foreign 
ownership rest rictions prohibit ed foreign investors from operating in certain industries unless they 
partner ed with a Chinese company, and in some cases, unless the Chinese partner was the 
controlling shareholder. China's requirements la id the foundation for China to re quire or pressure 
the transfer of technology. Pressure was applied through administrative licensing and approvals 
processes which had to  be completed in order to establish and operate a business in China.  Second, 
China's regime of technology regulations fo rced foreign companies seeking to license technologies 
                                                
93 The report is available at: https://ustr.gov/sites/default/fil es/Section%20301%20FINAL.PDF  WT/DSB/M/423  
 
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to Chinese entities to do so on non -market -based terms that favour ed Chinese recipients. These 
rules d id not apply to technology transfers occurring between two domestic Chinese companies. 
Third, China  direct ed and unfairly facilitate d the systematic investment in, and acquisition of, foreign 
companies and assets by Chinese companies to obtain cutting -edge technologies and intellectual 
property and generate the transfer of technology to Chinese companie s. The role of the Chinese 
State in directing and supporting this outbound investment strategy was pervasive, and evident at 
multiple levels of government – central, regional, and local. China ha d devoted massive amounts of 
financing to encourage and facil itate outbound investment in areas it deem ed strategic. China 
employ ed tools such as investment approval mechanisms and a system of encouraged sectors to 
channel and support outbound investment. Fourth, China conduct ed and support ed unauthorized 
intrusions  into, and theft from, the computer networks of foreign companies to access their sensitive 
commercial information and trade secrets. Through these cyber intrusions, China ha d gained 
unauthorized access to a wide range of commercially -valuable business inf ormation, including trade 
secrets, technical data, negotiating positions, and sensitive and proprietary internal communications. 
China ha d used cyber -enabled theft and cyber intrusions to serve its industrial policy objectives.  
8.5.  In November 2018, the United  States had issued a 50 -page supplemental report.94 The 
supplemental report explain ed that China ha d not fundamentally altered its unfair, unreasonable, 
and market -distorting practices that had been  the subject of the March 2018 report. Indeed, certain 
practices, such as cyber -enabled theft of intellectual property, appear ed to have grown worse.  These 
four technology transfer policies harm ed every Member, and every indus try in every Member, that 
relied  on technology for maintaining competitiveness in world m arkets. From the outset of the US 
technology transfer investigation, the United States had been  clear that where a Chinese policy had 
appeared to involve WTO rules, the United States would pursue the matter through WTO dispute 
settlement. The investigation  revealed that the concerns with China 's technology licensing measures 
appear ed to be amenable to WTO dispute settlement. Accordingly, immediately following the 
issuance of the March 2018 report, the United States had initiated a WTO dispute.95 Consultation s 
had not resolve d the matter, and the DSB had established a panel  at the 21 November 2018 DSB 
meeting. As China was well aware, the United States ha d made no findings that the licensing 
measures at issue in the WTO dispute were inconsistent with China 's WTO obligations. Further, the 
US trade measures taken in subsequent phases of the US investigation were unconnected to the 
matters covered in the ongoing WTO dispute involving China 's technology licensing measures.  In 
contrast, the three other categories of  policies covered in the US investigation d id not appear to 
implicate WTO obligations. And, China ha d had many opportunities to argue otherwise. For example, 
at the 27 March 2018 DSB meeting, the United States had invited China to inform the DSB if China 
believed that the technology transfer policies addressed in the US investigation could amount to 
breaches of WTO rules. To date, China ha d not responded to this invitation. As the United States 
had repeatedly stated, the goal of the US technology transfer i nvestigation was to obtain the 
elimination of the unfair acts, policies, and practices adopted by China. China, however, was trying 
to use the WTO system not as a means for promoting conditions for fair trade, but rather as a shield 
to defend China 's unila teral, unfair, and economically damaging technology transfer policies. These 
efforts by China, and not actions taken by the United States to address China 's unfair and 
economically damaging policies, constitute d the real threat to the viability of the WTO system.  
8.6.  Second,  the United States said that  China 's decision to bring this matter to the DSB was 
hypocritical. On the one hand, China complain ed that the United States was being "unilateral " in 
adopting trade measures as part of the US investigation. At the very same time, however, China 
had openly adopted retaliatory trade measures on over US$100 billion in US goods. On  16 June 
2018, China had issued State Council Customs Tariff Commission Public Notice  on Additionally 
Imposing Tariffs  on US$50 Billion of Imported Products Originating from the United States .96 
Through this legal instrument, the Government of China had announced two lists of tariff 
subheadings subject to an additional 25 percent duty on US goods. The 25 percent additional  duties 
on the first list – containing 545 tariff subheadings – had gone  into effect on 6 July 2018. According 
to China, this list applie d to US goods with an annu al trade value of US$34 billion. On 8 August 
                                                
94 The supplemental report is available at 
https://ustr.gov/sites/default/files/enforcement/301Investigations/301%20Rep ort%20Update.pdf .  
95 "China — Certain Measures Concerning the Protection of Intellectual Property Rights" (DS542).  
96 "State Council Customs Tariff Commission Public Notice on Additionally Imposing Tariffs on 
US$50  Billion of Imported Products Originating f rom the United States"  (State Council Customs Tariff Co mmission 
2018 Public Notice No.5, 16 June 2018).  WT/DSB/M/423  
 
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 2018, China had issued State Council Customs Tar iff Commission Public Notice on Additionally 
Imposing Tariffs on US$16 Billion of Imported Products Originating from the United States .97 Under 
this notice, China was imposing additional tariffs of 25 percent on US goods with a purported trade 
value of approximately US $16 billion dollars. Most recently, on 18 September 2018 – the same date 
as China's letter requesting supplemental consultations in this dispute – China had issued State 
Council Customs Tariff Commission Public Notice on Additionally Imposi ng Tariffs on Approximately 
US$60 Billion of Products Originating from the United States . Under this announcement, China was 
imposing additional tariffs of either 5 percent or 10 percent on over 5 ,000 products, with 
a purported  trade value of approximately  US$60 billion dollars.98 These tariffs had taken  effect on 
24 September 2018.  
8.7.  In sum, China was currently imposing retaliatory tariffs on US goods with an annual trade value 
of approximately US$110 billion. These retaliatory duties cover ed more than half o f all US exports 
to China. China ha d made no claim of any WTO justification for taking these measures. It was 
hypocritical to the extreme that, with respect to the very same matter, China attempt ed to invoke 
WTO rules, while at the same time ignoring those  rules by imposing retaliatory duties on more than 
US$100 billion in US goods.  Third, and finally, given that China ha d already taken the decision to 
retaliate against US goods, any findings in a dispute settlement proceeding would be pointless. At 
most, a  Member that prevail ed in a WTO dispute c ould obtain the authority to suspend WTO 
concessions. But here, China ha d already taken the decision to suspend tariff concessions owed to 
the United States by imposing increased duties on most  US goods exported to China. In conclusion,  
Members  had arrived at this point because China ha d chosen to adopt aggressive, unfair policies 
regarding technology transfer in pursuit of its industrial policy goals. As Members were likely aware, 
the Leaders of the United States an d China ha d agreed to enter into negotiations to address these 
issues. It was those discussions, and certainly not a WTO dispute settlement proceeding, that were 
the appropriate forum for addressing the technology transfer issues covered by the US investigation.  
For these reasons, the United States w ould not agree to establishment of the panel requested by 
China at the present meeting .  
8.8.  The representative of China  said that China simply  wished to respond briefly  to the US 
statement. With respect to  US claims against China 's economic policy, China wished  to refer to its 
statements made at  previous General Council meetings, CTG meetings as well as DSB meetings in 
2018. In those statements, China had  fully rebutted the arguments made by the U nited States at 
the present meeting . With respect to Section 301 measures of the US Trade Act 1974, they were 
unilateral in nature and were as such and as appl ied inconsistent with US WTO obligations.  China 
saw no reason that attacking China or blaming China 's polic y could provide any legitimacy for its 
Section 301 measures.  
8.9.  The representative of Japan  said that China request ed that the DSB establish a panel to 
examine the WTO -consistency of the tariff measures taken by the United States. Japan wished to 
note that China ha d also imposed additional duties on products from the United States. Japan w ished 
to emphasize that any trade measure  had to  be consistent with the WTO Agreement , and no country 
benefit ted from exchanges of trade restrictive measures and counter -measures taken against each 
other.  
8.10.   The DSB took note of the statements  and agree d to revert to this matter.  
                                                
97 "State Council Customs Tariff Commission Public Notice on Additio nally Imposing Tariffs on 
US$16  Billion of Imported Products Originating from the Uni ted States" , Public Notice No.7 (8 August 2018).  
98 "State Council Customs Tar iff Commission Public Notice on  Additionally Imposing Tariffs 
on Approximately US$60 Billion of Products Originating from the United States" , Public Notice No.8 
(18 September 2018 ).  
 WT/DSB/M/423  
 
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9  APPELLATE BODY APPOI NTMENTS: PROPOSAL BY  ARGENTINA; AUSTRALI A; THE 
PLURINATIONAL STATE OF BOLIVIA; BRAZIL; CAN ADA; CHILE; CHINA; C OLOMBIA; COSTA 
RICA; CUBA; DOMINICA N REPUBLIC; ECUADOR;  EGYPT; EL SALVADOR;  THE EUROPEAN 
UNION; GUATEMALA; HO NDURAS; HONG KONG, C HINA; ICELAND; INDIA ; INDONESIA; 
ISRAEL; KAZAKHSTAN; KOREA; LIECHTENSTEIN ; MEXICO; NEW ZEALAND; NICARAGUA; 
NORWAY; PAKISTAN; PA NAMA; PARAGUAY; PERU ; THE RUSSIAN FEDERA TION; 
SINGAPORE; SWITZERLA ND; THE SEPARATE CUS TOMS TERRITORY OF TA IWAN, PENGHU, 
KINMEN AND MATSU; TH E FORMER YUGOSLAV RE PUBLIC OF MACEDONIA;  TURKEY; 
UKRAINE; URUGUAY; TH E BOLIV ARIAN REPUBLIC OF VE NEZUELA AND VIET NAM  
(WT/DSB/W/609/REV.7)  
9.1.  The Chairperson  said that this item was on the Agenda of the present meeting at the request 
of Mexico, on behalf  of several delegations. She then drew attention to the proposal contained in 
document WT/DSB/W/609/Rev. 7 and invited the representative of Mexico to speak . 
9.2.  The representative of Mexico  said that the delegations referred to in document 
WT/DSB/W/609/Rev.7, wh ose number ha d grown in relation to Mexico's previous  proposal, ha d 
agreed to su bmit the joint proposal dated 6 December 2018 to launch the AB selection processes. 
His delegation , on behalf of 71 Members, wished  to state the following. The considerable number of 
Members submitting this joint proposal reflect ed a common concern with the current situation in the 
Appellate Body that was seriously affecting its workings and the overall dispute settlement system 
against the best interest of its Members. WTO Members ha d a responsibility to safeguard 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  at the present 
meeting . This proposal sought  to: (i) start four selection proces ses: one proc ess to replace 
Mr. Ricardo Ramírez -Hernández, whose second term expired on 30 June 2017; a second process to 
fill the vacancy that resulted from  the resignation of Mr. Hyun Chong Kim with effect from 
1 August  2017; a third process to replace Mr. Peter Van den Bossche, whose second term expired 
on 11 December, 2017; and a fourth process to replace Mr. Shree Baboo Chekitan Servansing,  
whose four -year term of office  expire d on 30 September  2018; (ii) to establish a Selection 
Committee; (iii) to set a deadline of 30 days for the submission of candidacies; and (iv) to request 
that the Selection Committee issue its recommendation s within 60  days after the deadline for 
nominations of candidates . The proponents were flexible in the determination of the deadlines for  
the selection processes, but 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 trad ing system and 
the dispute settlement system . 
9.3.  The representative of the European Union  said that t he European Union wished to refer to its 
statements made on this issue at previous DSB meetings, starting in February 2017. With each 
passing month, the gravity and urgency of the situation increase d. Members ha d a shared 
responsibility to resolve this issue as soon as possible. The EU  wished to thank all Members who 
co-sponsored the proposal  contained in document WT/DSB/W/609/Rev. 7. The EU  invite d all other 
Members to endorse this proposal  so that AB appointments c ould be made  as soon as possible .  
9.4.  The representative of the United States  said that t he United States thank ed the Chair person  
for the continued work on these issues . As the United States  had explained in prior DSB meetings, 
the United States  was not in a position  to support the proposed decision  contained in document 
WT/DSB/W/609/Rev. 7. The systemic concerns that the United States  had identified at the present 
meeting  and in p revious  DSB meetings remain ed unaddressed. As the United States ha d explained 
at recent D SB meetings, for more than  15 years and across multiple US  Administrations, the United 
States ha d been raising serious concerns with the Appellate Body's disregard for the rules set by 
WTO Members. The United States  recognize d the proposals presented by so me WTO Members at 
the 12 December 2018  General Council  meeting . These proposals to some extent acknowledge d the 
systemic concern the United States ha d been raising in the WTO for years – namely, that the 
Appellate Body ha d strayed from the role agreed for it by WTO Members. As the United States had  
noted in detailed statements in DSB  meetings over the past year, and again at the present meeting , 
many WTO Members share d this concern, whether on the mandatory 90 -day deadline for appeals, 
or review of panel fi ndings on domestic law, or issuing advisory opinions on issues not necessary to 
resolve a dispute, or the treatment of Appellate Body reports as precedent, or persons serving on 
appeals after their term ha d ended. However, on a close reading, the proposals  would not effectively WT/DSB/M/423  
 
- 43 - 
 
 
 
  
 
 address the concerns that WTO Members ha d raised. The United States ha d made its views on these 
issues very clear: if WTO Members sa id that they support ed a rules -based trading system, then the 
Appellate Body had to  follow the rules  Members had  agreed in 1995. For many years, the United 
States and other WTO Members ha d also been sounding the alarm about the Appellate Body adding 
to or diminishing rights or obligations under the WTO Agreement in areas as varied as subsidies, 
anti-dumpi ng and countervailing duties, standards under the TBT Agreement, and safeguards. Such 
overreach restrict ed the ability of the United States to regulate in the pub lic interest or protect US  
workers and businesses against unfair trading practices. The United  States share d the view that it 
was "the collective responsibility of all Members to ensure the proper functioning of the WTO dispute 
settlement system, including the Appellate Body" .99 As the United States  had stated many times in 
the DSB, the United States  was ready to engage with other Members on the important issues raised. 
The United States  looked forward to further discussions with Members on these critical issues.  
9.5.  The representative of Costa Rica  said that o n behalf of the group of Latin American  and 
Caribbean (GRULAC) countries  that were also Members of the WTO, Costa Rica wished to reiterate 
its concern regarding the delicate situation that Members  were currently facing  as a result of the 
deadlock in the AB selection process es. This situation af fected the proper functioning of one of the 
WTO's central bodies and breache d an obligation under  a covered agreement. Costa Rica was  aware 
of the concerns that ha d been raised in respect of the functioning of the Appellate Body and some 
specific issues re garding decision -making, which were preventing the launch of the AB selection 
process es. However, the search for a solution to these concerns should not stop the system from 
continuing to function. Nowhere was it suggested in the text of Article 17 of the DSU, read together 
with Article 2 of the DSU , that positive consensus was required to launch the AB selection process es. 
Costa Rica asked the  Chair person , once again, to continue her efforts to r esolve this issue.  
9.6.  The representative of Canada  said that Canada wishe d to be associate d with the statement 
made by Mexico. Canada deeply regret ted that the DSB ha d been unable to meet its legal obligation 
under Article 17.2  of the DSU  to appoint Appellate Body members as vacancies ar ose. Canada agree d 
that it was time to start a process or, if necessary, several processes to select new Appellate Body 
members for the four current vacancies. Canada wished to  note that the serious effect of these 
vacancies on the ability of the Appellate Body to function c ould not b e overstated. Canada was  
pleased to join the proposal contained in document WT/DSB/W/609/Rev. 7 and urge d the DSB to 
adopt it without further delay. The failure to launch the AB selection process es for new Appellate 
Body members w ould only prolong the delay s that necessitate d recourse to Rule 15  of the Working 
Procedures for Appellate Review , about which the United States ha d expressed concerns. Like other 
Members, Canada  was disappointed that the United States ha d decided not to join the consensus to 
adopt the proposal  contained in document WT/DSB/W/609/Rev. 7. Canada  invite d the United States 
to engage in discussions with interested Members with a view to expeditiously developing a solution 
to the concerns that it ha d raised. Canada  remain ed committed to working with other interested 
Members – including the United States – with a view to finding a way to address those concerns so 
as to allow the AB selection processes to start and to be completed as soon as possible.  
9.7.  The representative of Brazil said that Brazil wished to be associate d with the statement made  
at the present meeting by Costa Rica  on behalf  of the GRULAC  under this Agenda item . His delegation 
did not wish  to fully repeat its statement made at the 21 November DSB meeting under th is Agenda 
item, when the group of Members co -sponsoring th e proposal contained in document 
WT/DSB/W/609/Rev. 7 had reintroduced it, with a view to finally unblock ing the AB selecti on 
processes. That statement remain ed valid in its entirety and contain ed Brazil's view, which Brazil  
believe d was shared by many, that the launch of the AB selection processes wa s not an option that 
require d positive consensus in the DSB , but rather was an obligation that b ound all Members by 
virtue of a number of provisions  of the DSU . The situation ha d simply  become more urgent and 
critical with each passing DSB meeting. At the present meeting, Brazil wished  to reiterate some key 
messages . First, there was no legal justification for blocking the AB selection process es and the 
appointment of Appellate Body members. The Appellate Body was a standing , permanent body 
established by consensus when the Marrakesh Agreement and the DSU had been  negotiated. The 
essential feature of the A ppellate Body was its members. Only they could collectively deliver on the 
function conferred upon the Appellate Body  by the Agreement. In summary, the DSB was not entitled 
to decide on the existence of the Appellate Body, but only to guarantee that it function ed 
                                                
99 See WT/GC/W/754.  WT/DSB/M/423  
 
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uninterruptedly according to DSU provisions. Notwithstanding Brazil's willingness to discuss systemic 
concerns, systemic concerns d id not qualify as legal justification for blocking the AB selection 
process es. In reality, the systemic concern that overr ode all others result ed from the fai lure to 
proceed with the AB selection process es. The DSB had  a collective responsibility to comply with the 
mandatory rules of the DSU. The DSU, in Article 17, d id not leave room for a decision on whether it 
will appoint persons to serve on the Appellate B ody. The only requirement was that the DSB take a 
decision on whom  it should  appoint. The initiation of selection process es to establish  selection 
committee s was an automatic procedure to be followed by the DSB Chair person . The Appellate Body 
had now been reduced to three members, a condition not envisaged in and not allowed by the text 
of the DSU. As a consequence, the Appellate Body  was already in breach of the expected 
geographical representativeness and variety of legal traditions and, in this highly pr ecarious 
situation, it was unable to perform its duties as foreseen in the DSU, and ha d to incur constant 
delays  that affect ed all Members. If the current crisis were not addressed, the situation w ould 
become more critical at the end of 2019, when the terms of two other AB members would expire. 
The breadth and scope of the consequences caused by the current deadlock c ould not be 
underestimated. It was causing nullification and impairment of benefits under the WTO Agreement 
to all Members that wish ed to make use of their rights to solve trade disputes through the dispute 
settlement mechanism.  As Brazil had already mentioned  at the previous DSB meeting , Brazil ha d 
counted a pproximately  50 ongoing  disputes, at consultation and panel phases, that could p otentially 
not benefit from an appeal or not even be adopted, absent agreement between the parties. Members 
affected by this state of affairs include d Brazil, the EU, China, Canada, Japan, India, Vietnam, Korea, 
Mexico, Turkey, Ukraine, Switzerland, the Un ited Arab Emirates and others, besides the United 
States. The dispute settlement system was essential for the effective functioning  of the other WTO 
pillars . As debate around the issue of "WTO reform" gain ed momentum, the deadlock in the Appellate 
Body risked to undermi ne Members' confidence in the negotiating pillar and in the effectiveness of 
new rules. In light of the foregoing, Brazil therefore urge d the DSB to launch the AB selection 
process es. This w ould help all Members, including the United States, to meet their collective 
responsibility to comply with the obligations that they had  voluntarily accepted under the DSU. Brazil 
also wished to  thank Mexico for the statement made at the present meeting on behalf of the co -
sponsors . 
9.8.  The representative of India said that India refer red to its statements made at previous DSB 
meetings on this matter and wished to reiterate its serious concerns about the current impasse in 
filling vacancies in the Appellate Body and its effect on the credibility of the WTO.  India, along with 
the European Union and some other Members, ha d put for ward concrete textual proposals as a 
starting point to begin an open, inclusive and expeditious process for unblocking the AB selection 
processes . India called on all Members to engage  constructively with these proposals, in the process 
to be launched by the G eneral Council  Chairperson , with a view to promptly ending the impasse in 
the Appellate Body.  
9.9.  The representative of Switzerland  said that Switzerland regret ted that the DSB continu ed to be 
unable to launch the AB selection processes towards filling the Appellate Body vacancies.  
Switzerland  wished to  note with satisfaction the constructive discussion that had taken  place at the 
12 December 2018 General Council  meeting . This discussio n demonstrated  that Members were 
willing to engage constructively in order to find a way forward. Switzerland  believe d that different  
proposals  regarding dispute settlement matters currently on the table form ed a comprehensive basis 
to address the concerns  that ha d been raised concerning the functioning of the dispute settlement 
system. Switzerland consider ed that a solution -oriented process to be conducted under the auspices 
of the General Council would be the best way forward. Switzerland  hoped that the m odalities for 
such a process w ould be agreed upon in the coming days, and that substantive discussions c ould 
start soon.  
9.10.   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. 7 and emphasi zed the 
importance of launching the AB  selection process es as soon as possible. New Zealand was  a staunch 
supporter of the multilateral dispute settlement system, and ha d repeatedly emphasi zed the 
importance of lookin g to find solutions to the current impasse through discussions among Members, 
including through suggestions that New Zealand  and other co -sponsors had made at the 
12 December 2018 General Council meeting. New Zealand  looked forward to a deeper discussion o n 
these issues.  WT/DSB/M/423  
 
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 9.11.   The representative of Qatar  said that his delegation  support ed the proposal for the DSB to 
commence in parallel a substantive reform of various Appellate Body practices and rules as well as 
the initiation of the important AB selection proce sses. Qatar wished to reiterate its support for a 
robust, rule s-based multilateral trading system. For such a system to function, there had to  be an 
effective and credible mechanism for the resolution of disputes among Members. As confirmed by 
the DSU, the  WTO dispute settlement system was a central element in providing security and 
predictability to the multilateral trading system. The current lack of consensus to begin the AB 
selection process es threaten ed the effectiveness of the dispute settlement system. Without an 
effective dispute settlement mechanism, the capacity of the WTO to enforce the right s and 
obligation s that Members ha d negotiated over decades would be put at risk. Weakening of the WTO 
rules-based multilateral trading system  should be avoided. It risk ed allowing international disorder, 
it threaten ed to release  unpredictability and instability in the international order. The Appellate Body 
review mechanism was an essential pillar of an effectiv e dispute settlement system. The Appellate 
Body ha d made valuable contribution s to the multilateral trading system. Yet, the Appellate Body 
had not been a perfect instrument of dispute settlement. With this agreed principle and objective in 
mind, Qatar sup ported the immediate negotiation and early harvest of various legitimate Appellate 
Body reform issue s raised by many Members at the present meeting . Qatar endorse d Member s' 
concerns regarding the compulsory requirement  of the 90 -day deadline for deciding a ppeals , as set 
out in Article 17.5 of the DSU, with an exception in a situation where parties would agree to a longer 
timeline. Qatar also believe d it was appropriate to address the interpretation of appellate review 
under Article 17.6 of the DSU with a view to limiting appeals to issues of law and legal interpretation s 
of domestic measures. Qatar would further agree to negotiations on the current use of Rule 15 of 
the Working Procedures for A ppellate Review . With such an early harvest in mind, Qatar beli eved 
that Members should initiate in parallel the process of selecting and ultimately appointing new 
Appellate Body members. Many Members including Qatar rel ied on the dispute settlement system 
as a tool for the peaceful settlement of dispute s concerning t he interpretation and application of 
WTO rules.  A properly functioned  Appellate Body was a critical component of the current system. 
Qatar believe d such reforms would send a positive signal that appellate procedures adhere d to the 
rules-based system agreed  to by all WTO Members. Qatar believe d that the successful negotiation 
of such reforms could be achieved relatively  quickly as it depended  upon the willingness of all 
Members to achieve a balanced outcome.  
9.12.   The representative of Chinese Taipei  said that  his delegation  simply wished to refer to its 
statements made at previous DSB meetings . Chinese Taipei  urged Members to agree to launch the 
AB selection process es as soon as possible.  
9.13.   The representative of Norway  said that Norway wished to refer to its statements made at 
previous  DSB meetings under this Agenda item. Norway wished to  reiterate its serious concerns 
about the current impasse in the Appellate Body. Norway regret ted that the United States still c ould 
not join consensus and suppor ted the proposal to launch the AB selection process es. Norway was  
pleased that the General Council , at its meeting o f 12 December 2018, had agreed to establish an 
informal open -ended process to discuss different concerns raised  in the DSB and addressed by the 
proposals and communications put forward at that General Council meeting , some of which Norway 
was co-sponsoring. Norway wished  to express its support for that informal open -ended process. 
Norway  looked forward to engaging with Members in active and co nstructive discussions.  
9.14.   The representative of Hong Kong , China  said that his delegation  wished to refer to its 
statement s made at previous DSB meeting s on this matter. Hong Kong, China wished to  reiterate 
its deep concern with the prolonged impasse over the AB selection process es. Hong Kong, China  
wished to note that momentum was building up  to discuss improvements to the WTO dispute 
settlement system. Hong Kong, China  was prepared and committed to constructiv ely engage with 
all Members in th is discussion. But that discussion should not be a reason to delay appointments to 
the Appellate Body. Hong Kong, China  urged Members to agree to start a process for filling the 
vacancies of the Appellate Body immediately.  
9.15.   The representative of Singapore  said that Singapore wished to refer to its statements made 
at previous DSB meetings and reiterate d its serious systemic concerns on the failure to launch the 
AB selection process es. More appeals continue d to be filed even as the number of Appellate Body 
members decrease d by attrition. Given the strain that the Appellate Body was facing, Singapore  
called on Members to bear this in mind when considering the filing of appeals. Systemic issues which WT/DSB/M/423  
 
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had been r aised c ould be discussed in a separate process. In this regard, Singapore view ed the 
informal process for focused discussions under the auspices of the General Council as a positive 
step, and hope d that it c ould bring about the unblocking of the impasse. S ingapore wished to 
reiterate  its readiness to engage constructively and collaboratively with other Members, as well as 
the Chair person , to help resolve this impasse.  
9.16.   The representative of Japan  said that Japan support ed the proposal to launch the AB select ion 
processes. Japan wished to note in this respect that solution -oriented proposals had been  
communicated at the 12 December 2018 General Council meeting . The proposals put forward specific 
ways to address the specific concerns on the functioning of the d ispute settlement system, including 
the Appellate Body, which ha d been raised for years but ha d remained  unaddressed. Japan 
consider ed that the proposals were a valuable contribution and would provide a good start and basis 
for Members'  solution -focused di alogues. Following the recent discussions at the General Council, 
Japan w ould actively engage in focused discussions with other Members in order to restore and 
improve the proper functioning of the WTO dispute settlement system.  
9.17.   The representative of Austr alia said that Australia wished to refer to its previous statements 
made on this matter , and reiterate d its serious concerns regarding the DSB 's inability to commence 
the AB  selection process es. Australia had  joined a number of  other Members to co -sponsor pragmatic 
and constructive proposals at the 12 December 2018  General Council meeting, which was intended 
to help Members overcome this impasse. Members ha d a collective responsibility to resolve the 
challenges threatening the d ispute settlement system. Therefore, Australia call ed on all Members to 
engage constructively to find mutually agreeable solutions to address all outstanding concerns and 
to move forward with the A B selection process es as a priority.  
9.18.   The representative of Korea  said that Korea , as one of the co -sponsors of the proposal made  
at the 12 December 2018  General Council  meeting , share d the urgency related to this i ssue. Korea 
support ed the statement made by Mexico on  behalf of the proponents of the  proposal  contai ned in 
document WT/DSB/W/609/Rev. 7. Korea  simply wished to refer to its previous statement on this 
matter.  
9.19.   The representative of China  said that China w ished  to echo the statement made by Mexico on 
behalf of 71 Members  under this Agenda item . Ensuring the integrity and functioning of the Appellate 
Body was not only a collective obligation of Members, but it also serve d the common interests of the 
whole M embership. China regret ted that the collective efforts by these Members was , once again , 
frustrated by a particular Member’s persistent blockage o f the AB selection process es without any 
legitimacy. While the appointment of a specific  individual as Appellate Body member m ight require 
positive consensus, positive consensus  was not required for t he launch of the AB selection process es. 
Article 17.2 of the DSU clearly stated that:  "[v]acancies shall be filled as they arise ". The choice of 
using "shall" in this provision  was more than adequate to suggest the automatic nature of the AB 
selection proc esses. China note d that Members ha d made earnest efforts to try to accommodate the 
concerns of the concerned Member and to safeguard the central nature of the dispute settlement 
system. Various proposals ha d been tabled to address the current impasse , including joint proposals 
co-sponsored by China, the EU and other Members which had been  discussed at the 12 December 
2018 General Council Meeting. Such efforts ha d already formed a solid basis for future text -based 
consultations. It was time to substanti ate the se discussions.  China believed  that when Members had 
different views on a ny specific concern , solution -oriented discussion s were the only way to move 
forward.  China call ed on all Members to have meaningful and substantive participation in the releva nt 
process and to strive to solve the current AB selection impasse without further delay.  
9.20.   The representative of Thailand  said that Thailand wished to refer to its statements made at 
previous DSB meetings on this matter.  Thailand wished to  thank Mexico and Members that had 
co-sponsored the proposal contained in document WT/DSB/W/609/Rev. 7 under this Agenda item. 
Thailand support ed the launching of the AB selection processes as soon as possible. All WTO 
members ha d a shared responsibility to promptly resolve the vacancies in the Appellate Body.  While 
Thailand was open to discuss any systemic concerns which ha d been raised, such a discussion should 
be held on a separate track and should not prevent the start of the A B selection processes.  Thailand 
wished to reiterate its commitment to working constructively with all Members to resolve the 
Appellate Body impasse as a priority.  WT/DSB/M/423  
 
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 9.21.   The representative of Mexico  said that his  delegation, on behalf of the 71 co -sponsors of th e 
proposal  contained in document WT/DSB/W/6 09/Rev. 7, wished  to express its  regret that for the 
nineteenth occasion, Members had  still not been able to start the AB selection processes , and that 
they had  thus continuously failed to fulfil their duty as Members of this Organization.  The fact that 
a Member m ight have concerns about certain aspects of t he functioning of the Appellate  Body c ould 
not serve as pretext to impair and disrupt its work. There was no legal justification for the current 
blocking of the AB selection process es, which resulted in nullification and i mpairment for many 
Members. As A rticle 17.2 of the DSU clearly state d: "[v]acancies shall be filled as they arise ". By 
failing to act at the present meeting , Members  would maintain the current situation which was 
seriously affecting the work of the Appellate Body against the best interest of all WTO Members.  
9.22.   The Chairperson  thanked all delegations for their statements . She said that, a s in the past, 
the DSB would take note of the statements expressing the respect ive positions, which would be duly 
reflected in the minutes of the present meeting. As Members were aware, this matter required 
political engagement on the part of all Members .  At the same time, she said that her door was open 
to any delegation wishing to  share ideas or views on this matter . 
9.23.   The DSB took note of the statements.  
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