WORLD TRADE
ORGANIZATIONTN/DS/W/11
11 July 2002
(02-3865)
Dispute Settlement Body
Special SessionOriginal:  English
CONTRIBUTION OF THE REPUBLIC OF KOREA TO THE IMPROVEMENT
OF THE DISPUTE SETTLEMENT UNDERSTANDING OF THE WTO
Communication from the Republic of Korea
The following communication, dated 10 July 2002, has been received from the Permanent
Mission of the Republic of Korea.
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I. INTRODUCTION
On 21 May 2002, 15 co-sponsors submitted a concept paper on the issue of sequencing.  The
concept paper, JOB(02)/45, was designed to clarify the basic principle that a multilateraldetermination on the WTO-consistency of an implementation measure should precede any request for
the authorization of suspension of concessions by the DSB.
This paper has been prepared by Korea to complement the concept paper and deals with
issues closely related with "sequencing".  This does not represent the collective view of the
15 co-sponsors.  The textual changes of the DSU reflecting the ideas expressed in this paper shall be
proposed at a later stage when a broad agreement on the scope of the issues to be included in the finalpackage would emerge.
II. GUIDELINE
It is generally accepted that the DSU has been functioning without serious problems during
the last seven and half years since its entry into force.  Based on such an assessment, Korea interpretsthe mandate given by Ministers at Doha, namely, "to conduct negotiations to improve and clarify the
DSU" as meaning to do so on the basis of the basic principles of the DSU.  More specifically, the
following basic principles would apply in this paper:
- Prompt settlement of a dispute situation (Article 3.3)
- Prompt compliance with recommendations or rulings of the DSB (Article 21.1)
III. ISSUES
The co-sponsors, in their concept paper, introdu ced the possibility of an appeal into the
compliance panel process in line with Article 17 of th e DSU.  This appeal procedure, if resorted to,
will result in adding two-three additional months to  the implementation process.  Therefore, it would
be advisable to offset this delay by making changes to other parts of the implementation stage.TN/DS/W/11
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A. STRENGTHENING THE DISCIPLINE AT THE INITIAL STAGE OF IMPLEMENTATION
Korea believes strengthening disciplines on the initial stage of implementation can be a good
starting point.  Such a need is demonstrated by the number of days usually taken to fix the reasonable
period of time (RPT) through binding arbitration under Article 21.3(c).
The statistics based on the working schedules of the past 14 RPT arbitration cases show that it
took from the date of adoption of the Panel/Appellate Body report(s) on average 137 days to issue an
award, while Article 21.3(c) stipulates that the dete rmination of the RPT by the arbitrator should be
completed within 90 days.  It should be noted that the situation is worsening these days as the average
number of days between the adoption of the Panel/A ppellate Body reports and the scheduled issuance
of an award extended to 157 days since 2000, surpassing the 90-day time frame by as long as 67 days.
A major cause for such a delay is that, as a practice, no substantive efforts are made for
implementation in the 30 day period between the adop tion of panel and/or Appellate Body reports and
the declaration of Member's intention under the chapeau of Article 21.3.
Since each day that passes without the implementation of the DSB ruling means another day
of lost trade opportunities for legitimate exporters, the complaining party should be given the explicit
right to engage the responding party in bilateral discussions on the RPT immediately after the
adoption of the Panel/Appellate Body reports.  If th e parties to the dispute fail to agree on a mutually
acceptable RPT or an arbitrator until the DSB meeting held within 30 days after the adoption of the
reports, the complaining party should be allowed at that DSB meeting to announce its intention to
request the Director-General to appoint an arbitrator within 10 days if the complaining party so
wishes.  This would ensure that, in normal cases ,  arbitration award would be made within 90-day
deadline under Article 21.3(c), in line with the principle of prompt compliance stipulated inArticle 21.1.
In this connection, it should be recalled that panel reports are adopted after 20 and within
60 days from the date of their circulation and that  Appellate Body reports are adopted within 30 days
from the date of circulation.  The Members concerned can take advantage of these periods for
conducting preparatory studies for implementation.  Thus, 30 days from the date of adoption of
reports by the DSB would provide sufficient time for the Members concerned to reach an agreementon either the RPT or the arbitrator.
B. D
ETERMINATION OF THE LEVEL OF THE NULLIFICATION / IMPAIRMENT AT AN EARLY STAGE
During the surveillance phase of the implem entation of recommendations and rulings, two
kinds of disputes often arise among parties.  One is a dispute over the existence of, or consistencywith, a covered agreement of measures taken to comply with the recommendations and rulings
(Article 21.5).  The other is a dispute over the (1) level of suspension proposed, and/or (2) whether the
principles and procedures concerning cross-retaliation have been followed or not (Article 22.6).
Korea believes that, if an Article 21.5 panel were required to determine the level of the
nullification or impairment, it would importantly facilitate the implementation of the rulings of the
Article 21.5 panel either without or with reference to Article 22.6 arbitration.
As the compliance panel is mandated to examine in detail the existence or consistency of
measures taken to comply with the DSB rulings, the compliance panel would not be overburdened if itwere charged with the additional task of determining the level of the nullification or impairment.  It
should also be recalled that both the compliance panel and the arbitration panel are to be composed of
the members of the original panel.TN/DS/W/11
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The advantages of "frontloading" the determination of the level of the nullification or
impairment would be:
(a) As the Member concerned would have a clear picture of the consequences of non-
compliance by the end of the compliance pa nel/Appellate Body procedure, it would
provide a stronger incentive for the Member to bring the measure into conformity.
(b) Since the level of the nullification or impairment has already been decided, it will
substantially facilitate the negotiation for compensation.
(c) Even in cases where the Members concerned fail to agree on compensation and a
complaining party seeks suspension of concessions, the Article 22.6 arbitration panel
procedure may not be necessary in many instances, since the level of the nullification
or impairment is already known.TN/DS/W/11
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ATTACHMENT:  STATISTICS ON RPT ARBITRATION
Dispute WT/DS
NumberNumber of Days Between Adoption
of Panel/Appellate Body Report(s)
and Scheduled Issuance of Award*
Japan – Alcoholic Beverages II 8/10/11 105
EC – Bananas III 27 90
EC – Hormones 26/48 103
Indonesia – Autos 54/55/59/64 137
Australia – Salmon 18 109
Korea – Alcoholic Beverages 75/84 110
Chile – Alcoholic Beverages 87/110 140
Canada – Pharmaceutical Patents 114 146
Canada – Autos 139/142 109
US – Section 110(5) Copyright Act 160 183
US – 1916 Act 136/162 155
Canada – Patent Term 170 139
Argentina – Hides and Leather 155 206
US – Hot-Rolled Steel 184 180
Average since 1995 136.57
Average since 2000 157.25
* Not necessarily same date as circulation to all Members.
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