RESTRICTEDWORLD TRADE
ORGANIZATIONWT/DSB/M/42
16 March 1998
(98-1030)
Dispute Settlement Body
13 February 1998
MINUTES OF MEETING
Held in the Centre William Rappard
13 February 1998
Chairman:  Mr. Wade Armstrong (New Zealand)
Subjects discussed: Page
1. India - Patent protection for pharmaceutical and agricultural chemical products ...... 2
- Implementation of the reco mmendations of the DSB ................................... 2
2. Canada - Measures affecting the importation of milk and the exportation of dairy
products ...................................................................................................................... 4
- Request for the establishment of a panel by the United States ...................... 4
3. Turkey - Restrictions on imports of  textile and clothing products ............................. 5
- Request for the establishmen t of a panel by India ......................................... 5
4. European Communities - Measures concerning meat and meat products (hormones) 8
- Report of the Appellate Body and Reports of the Panel ............................... 8
5. European Communities - Regime for the importation, sale and distribution of bananas 14
- Statement by Mexico ..................................................................................... 14
6. Procedural aspects of the DSU review ....................................................................... 16
- Statement by th e Chairman ........................................................................... 16
7. Concluding remarks by the Chairman ........................................................................ 16
Prior to the adoption of the agenda the items entitled "Ireland - Measures Affecting the Grant
of Copyright and Neighbouring Rights" (WT/DS82/2) and "European Communities  - Measures
Affecting the Grant of Copyright and Neighbouring Rights (Ireland)" (WT/DS115/2) were removed
from the proposed agenda at the request of the United States.  In addition, the consideration of theitem concerning nominations proposed for inclusion on the indicative list of governmental and non-
governmental panelists was postponed for a future meeting.WT/DSB/M/42
Page 2
1. India - Patent protection for pharmaceutical and agricultural chemical products
- Implementation of the recommendations of the DSB
The Chairman said that in accordance with the DSU provisions, the DSB was required to
keep under surveillance the implementation of recommendations and rulings of the DSB in order to
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of
the DSU provided that,"... the Member concerned shall inform the DSB, within 30 days after the dateof adoption of the panel or Appellate Body report, of its intentions in respect of implementation of the
recommendations and rulings of the DSB."  He recalled that on 16 January 1998, the DSB had
adopted the Appellate Body Report and the Panel Re port as modified by the Appellate Body Report.
 The representative of India recalled his detailed statement made at the DSB meeting on
16 January 1998, which contained India's views on the Reports of the Panel and the Appellate Body.
India had recognized that the final results of the Panel's proceedings had been substantially more
limited than those originally sought by the United States.  His country had also recognized that theAppellate Body had rectified some of the errors contained in the Panel Report.  Nevertheless, his
delegation was disappointed with the conclusions of the Appellate Body Report regarding India's
compliance with Article 70.8 and 70.9 of the TRIPS Agreement.  He noted that India had always
acknowledged its obligations under these articles.  The dispute regarding Article 70.8 was only about
how India should carry out its obligations.  Al though the Panel had concluded that India's
administrative instructions for receiving mailbox applications were inconsistent with Article 70.8(a)
of the TRIPS Agreement and this conclusion had been upheld by the Appellate Body, it should be
borne in mind that the Panel had observed that it was up to India to decide how to implement its
obligations under the respective article.
The dispute regarding Article 70.9 of the TRIPS Agreement was only about when India
should carry out its obligations under this Article.  India's position was that Article 70.9 established an
obligation that exclusive marketing rights be granted for a product after the conditions specified in
Article 70.9 had been fulfilled.  However, the Panel and the Appellate Body believed that India should
have had a mechanism for the granting of exclusive marketing rights as from 1 January 1995.  It was
therefore obvious that the conclusions of the Panel and the Appellate Body with regard to India'sperceived failure to comply with its obligations under Article 70.8(a) and 70.9 of the TRIPS
Agreement had been based on narrow technicalities.  He mentioned this point to highlight the fact that
these conclusions could not be related to any deliberate intent or unwillingness on the part of India to
comply with its obligations.
Under Article 21.3 of the DSU, India was required to inform the DSB of its intentions in
respect of the implementation of the DSB's recommendations.  It was India's intention to meet its
obligations under the WTO, but his country would re quire a reasonable period of time to comply with
the DSB's recommendations.  In light of the present situation and taking into consideration all relevant
circumstances, India would require time until at least 16 June 1999.  He would appreciate it if the
DSB approve India's request with regard to the reasonable period of time for implementation.
The representative of the United States expressed his delegation's appreciation for the
statement made by India concerning its intentions  in respect of the DSB's recommendations. In order
to implement the DSB's recommendations, India was obliged to amend its law in order to provide a
legally sound mailbox system for filing patent applications and a system for granting exclusive
marketing rights for qualifying products.  These obligations formed part of the transitional
arrangements under the TRIPS Agreement.  Under the TRIPS Agreement, countries, such as India,
that could take advantage of a ten-year transition period for providing patent protection forpharmaceuticals and agricultural chemicals were required to provide  mailbox and exclusive
marketing right systems during the transition period.  In the statement by the representative of India
he had referred to his country's intention to "meet its obligations under the WTO".  The US
representative assumed that this meant that India intended to implement the DSB's recommendations.WT/DSB/M/42
Page 3
The Panel and the Appellate Body had found that India was obliged to establish mailbox
exclusive marketing rights systems as of 1 January 1995.  It was now 1998, and India was already
three years overdue to meet these transitional obligations.  After such a lengthy period of non-
compliance there was no basis for any further delay and the United States looked forward to India's
full and prompt implementation of the DSB's r ecommendations.  India had requested the DSB to
approve a period of time up to 16 June 1999 to implement the DSB's recommendations.  TheUnited States was unable to accept such a period of time.  Timely implementation by India of these
obligations were of particular importance to US right-holders.  India had indicated that it intended to
take advantage of the ten-year transition period in the TRIPS Agreement for providing patent
protection for pharmaceutical and agricultural chemical products.  However, it had also a
corresponding obligation under the TRIPS Agreement -- now reaffirmed by the Panel and the
Appellate Body -- to implement a mailbox system a nd a system of exclusive marketing rights during
the transition period.  Under Article 21.3 of the DSU, Members should, where practicable, complyimmediately with the DSB's recommendations.  This would protect the interests of all Members and
the DSB system. Countries that could implement their WTO obligations immediately should do so.
He noted that, in paragraphs 62 and 80 of its report, the Appellate Body had found that India's
Government had the power, pursuant to Article 123 of the Indian Constitution, to promulgate an
ordinance when Parliament was not in session.  This procedure had been used in 1995 when theIndian executive branch had sought to comply with India's obligations under Article 70.8 and 70.9 of
the TRIPS Agreement.  Therefore, there was no reason why India could not use such a procedure to
comply immediately with the DSB's recommendations .  The temporary legislation could subsequently
be made permanent by the legislature.  He reiterated that there was no basis on which to accept a
period of time until 16 June 1999.  The United Stat es looked forward to India's immediate compliance
with the DSB's recommendations.
The representative of India, said that first he  wished to address the United States' concerns
with regard to the phrase which read as follows: "In this context I would like to state that it is India's
intention to meet its obligations under the WTO with respect to this matter."  He understood that the
United States had sought confirmation that this phrase meant that India would comply with the DSB'srecommendations.  He noted that the same phrase had been used by the United States in the
Gasoline Case .
1  If this phrase meant that the United States intended to comply with the DSB's
recommendations, the same was true for India.
With regard to the United States' comment that  India was obliged to amend its law, at this
stage he did not wish to enter into detail regardin g this matter.  He highlighted that the Panel, in
paragraph 7.33 of its report, had cited Article 1.1 of the TRIPS Agreement.  This Article provided,
inter alia , that:  "Members shall be free to determine the appropriate method of implementing the
provisions of this Agreement within their own legal system and practice."  Neither the Panel nor the
Appellate Body had given India any specific instru ctions about the manner of implementation.  While
other Members were entitled to ensure that the Appellate Body's rulings would be implemented, it
was up to India to determine the manner in which these obligations would be fulfilled.  He reiterated
that it was India's intention to meet its obligations under the WTO with respect to this matter.
With regard to the issuance of an ordinance, he did not consider it necessary to address at the
present meeting India's Constitutional law as it was up to the Government of India to decide on the
manner of implementation of the DSB's recommendations.  He regretted that the US delegation was
not in a position to accept that India be granted a period of time, at least until 16 June 1999, in order
to comply with the DSB's recommendations. Ther efore, India wished to enter into bilateral
                                                     
1 WT/DSB/M/19.WT/DSB/M/42
Page 4
consultations with the United States in order to explore the possibility of finding a mutually agreed
reasonable period of time pursuant to Article 21.3(b) of the DSU.
The representative of the United States said that, as indicated in India's statement, it was up to
India to decide how to meet its obligations.  Th e dispute examined by the Panel and the Appellate
Body concerned transitional obligations of India before it would meet its full obligations under the
TRIPS Agreement.  It was not up to India to decide  when to meet its transitional obligations, which
should have been in place as from 1 January 1995.  The Appellate Body had found, and in his
understanding the representative of India had not disagreed, that it was possible for India to comply
immediately with the transitional obligations.  Th ere was no reason why the Government of India
should seek an extended period of time beyond the three years that had already elapsed with regard to
these transitional obligations.
The representative of India said that, since the United States was not in a position to agree to
the time period requested by his delegation, India wished to hold bilateral consultations in order to
explore the possibility of finding a mutually satisfactory period of time.  He presumed that there was
no objection with regard to this.  When he had stated that it was up to India to determine the manner
of implementation, he had not referred to the time period.  He had only cited Article 1.1 of the TRIPS
Agreement which had repeatedly been highlighted by the Panel and the Appellate Body.  India was
aware of the DSU provisions and it had first requested that the DSB approve a period of time until16 June 1999.  Subsequently, in accordance with Article 21.3 of the DSU, it had requested bilateral
consultations with the United States.  He did not im ply that India had an absolute freedom of choice
with respect to the time period for implementation.
The Chairman noted that, since there was no agreement on the acceptable period of time, in
accordance with Article 21.3(b) of the DSU, a period of time mutually agreed by the parties to the
dispute should be indicated within 45 days after the date of adoption of the recommendations.  In this
case, the 45-day period would expire on 2 March 1998.
The DSB took note of the statements.
2. Canada - Measures affecting the importation of milk and the exportation of dairy products
- Request for the establishment of a panel by the United States (WT/DS103/4)
The Chairman drew attention to the communication from the United States contained in
document WT/DS103/4.
The representative of the United States said that his delegation requested that the DSB
establish a panel to determine whether Canada's special milk class pooling system was inconsistent
with its WTO obligations.  Through its special milk class pricing, Canada provided subsidies onexports of dairy products without regard to the ceilings on the quantity of subsidized exports that had
been agreed in the Uruguay Round.  Canada subsidized such exports by making milk available at a
lower price for processors who exported their finished dairy products.  The pooling system was in
breach of Canada's export subsidy reduction commitments under the Agreement on Agriculture.  The
restrictions on export subsidies were a fundamental part of the commitments undertaken under the
Agreement on Agriculture and a failure to adhere to them threatened that those disciplines would be
unravelled to the detriment of all Members.  In addition to the determination sought by the UnitedStates with respect to Canada's export subsidies, the United States also requested that Canada's
administration of its tariff-rate quota on fluid milk be examined by a panel.  Canada did not permit
commercial shipments within the tariff-rate quota.  The exclusion of such trade was unprecedented
and inconsistent with Canada's concessions undertaken during the Uruguay Round.WT/DSB/M/42
Page 5
The representative of Canada said that her Government considered that the dairy pricing
system and the tariff-rate quota for fluid milk maintained by it were in compliance with its WTO
obligations.  Canada was not in a position to agree to the establishment of a panel at the present
meeting.
The DSB took note of the statements and agreed  to revert to this matter.
3. Turkey - Restrictions on imports of textile and clothing products
- Request for the establishment of a panel by India (WT/DS34/2)
The Chairman drew attention to the communication from India contained in document
WT/DS34/2.
The representative of India recalled that, as contained in document WT/DS34/1, dated
21 March 1996, his country had requested consultations with Turkey pursuant to Article 4 of the DSU
and Article XXIII:1 of GATT 1994, with regard to the unilateral imposition by Turkey, on
1 January 1996, of quantitative restrictions on imports of a broad range of textiles and clothing
products from India.  Turkey had accepted India's request for consultations on 1 April 1996.Subsequently, India had scheduled the consultations with Turkey in Geneva for 18-19 April 1996.
After Turkey's acceptance of the proposed dates, India had brought a delegation from the capital to
conduct these consultations.  However, Turkey had not entered into these consultations within the
stipulated period of time in accordance with Article 4.3 of the DSU.  In the absence of any other
mutually agreed period of time, India had the right to proceed directly to request the establishment ofa panel.  He recalled that India had specifically referred to these provisions of the DSU in its
statement made at the DSB meeting on 24 April 1996
2, with regard to this unfortunate situation.
India considered that the restrictions imposed by Turkey were inconsistent with its obligations
under Articles XI and XIII of GATT 1994, which did not permit any Member to impose
discriminatory quantitative restrictions.  It also considered that these restrictions were inconsistent
with Turkey's obligations under Article 2 of the Agreement on Textiles and Clothing (ATC).  India
further considered that these restrictions nullified or impaired the benefits accruing directly or
indirectly to it under the GATT 1994 and the ATC.  His country requested  the DSB to establish a
panel with standard terms of reference to examine this matter in light of GATT 1994 and the ATC andto find that Turkey's measure nullified and impaired the benefits accruing to India under the WTO
Agreement.
The representative of Turkey said that the quantitative restrictions on the importation of
certain textile and clothing products from India had been introduced in accordance with the provisions
of the Customs Union between Turkey and the European Community, effective from 1 January 1996.
The representative of India had qualified these restrictions as "unilateral imposition."  However,
Turkey had requested consultations aimed at signing of a memorandum of understanding with India,
which laid down arrangements for trade in textiles and clothing.  There was no reply to this request.
His delegation strongly disagreed with India's position that Turkey had not entered into consultationsand consequently this dispute had not been resolved.  The consultations could not have been held
because India had refused to recognize the parties to the dispute.  The reasons why consultations
could not have been held were outlined in the same  document to which the representative of India had
referred in his statement (WT/DSB/M/15).
He recalled that Article XXIV:8 of GATT 1994 stated that:  "A customs union shall be
understood to mean the substitution of a single cust oms territory for two or more customs territories."
Therefore, the Customs Union encompassed one legal entity and both partners were bound by its
                                                     
2 WT/DSB/M/15.WT/DSB/M/42
Page 6
provisions.  He considered that the quantitative restrictions resulted from Turkey's obligations under
the Customs Union and constituted the joint responsibility of Turkey and the European Communities.
Bearing this in mind, he underlined that any request for consultations with regard to a measure taken
consequent to the establishment of the Customs Union should be addressed to both partners, in this
case, Turkey and the Communities.  He recalled that his delegation had been willing, at that time, for
the purpose of reaching an amicable solution, to  hold consultations with India in which the
Communities would participate on the same footing as Turkey.  This position had also been reiterated
by both parties to the Customs Union at the DSB meeting on 24 April 1996.  It was regrettable that
India had not accepted this proposal and had abstained from participating in the consultations.  After
having rejected the consultation, India had brought this case before the DSB.  India would have had a
better understanding of the situation if it had participated in the consultations.
The matter brought by India before the DSB was of a systemic nature.  This issue as well as
other systemic issues were currently under discussion in the Committee on Regional Trade
Agreements.  This Committee had been mandated to review some concepts of Article XXIV of GATT1994, including those related to customs unions.  Furthermore, the Customs Union between Turkey
and the European Community was currently under the examination by the Committee which held its
last meeting on 1 October 1997.  His delegation strongly believed that India's request for the
establishment of a panel was untimely and seemed to be aimed at pre-empting discussions in the
relevant WTO bodies and decisions to be reached by consensus.  It was only through suchnegotiations that the multilateral trading system could be consolidated.  Turkey was willing to reach
an amicable solution with India.  Bearing this in  mind, Turkey was ready to enter into consultations
with India together with the European Communities as its partner to the Customs Union.  His
delegation was not in a position to accept India's request for the establishment of a panel at the present
meeting.
The representative of the European Communities said that Turkey had provided some of the
background relating to this complaint and had indicated that it could not agree to the establishment of
a panel.  Therefore, no decision could be made at the present meeting.  However, for the record, hewished to make a few points since it would be desirable to take account of the particular
circumstances of this case.  This was not a simple case of an alleged breach of the ATC Agreement.
India's request recognized this when reference had been made to the fact that the restrictions "are not
justified under Article XXIV of GATT 1994".  The Communities disagreed on this point, but it was
clear that this case would concern the interpretation of Article XXIV of GATT 1994, and in particularparagraph 8 thereof which laid down the obligations of a customs union.  Turkey had mentioned the
Customs Union context and in this case the joint responsibility of both partners.  Like the
representative of Turkey, he was not comfortable with the situation that the Committee on Regional
Trade Agreements would examine the conformity of the Customs Union with Article XXIV of GATT
1994 and in parallel a panel might carry out the same work from a different and more legal angle.The basic policy on Turkey's future textiles regime had been agreed by the Communities and Turkish
Ministers and was contained in the Decision N o. 1/95 of the EC-Turkey Association Council.
3  The
Turkish measures had simply been introduced in appl ication of this policy.  This raised the issue of
whether the Indian complaint had addressed the right target, namely the basic regulation or the
implementing measure.
In his delegation's view, the Chairman, the DSB and the delegation of India would need to
carefully consider a situation where an issue of vital importance to the Communities, with the
Communities directly involved in the decision-making, was to be examined without  directparticipation of the Communities.  It would be difficult if a panel found that the measure was
unjustified -- not a likely scenario, but it could be possible -- and one party to the decision would only
                                                     
3 The text of the Decision 1/95 is contained in WT/REG22/1.WT/DSB/M/42
Page 7
be partly present as an interested bystander not as a defendant.  The Communities could request to be
a third party in this dispute, but this solution was inadequate.  The Communities should be able, inter
alia, to work together with Turkey, submit joint submissions and oral arguments as well as answer
questions in a coordinated manner.  The procedural question in this case was a clearer status of the
Communities in the proceedings.  The wording in th e DSU was not helpful.  He recalled the saying de
minimis non curat lex  and said that this could be a case where the de minimis  stood in the way of the
smooth functioning of the DSU.  Therefore an innovative look might be needed to find how the
Communities could become more directly involved in this case.  His delegation believed that in the
absence of a solution to this matter, the Communities would be deprived of their right to defend their
interests and this procedure was questionable.
The representative of India said that he did not consider it necessary to reply to some of the
comments made by Turkey and the European Communities.  In his view, the point was simple.  India
had made a request for the establishment of a panel.  He noted that the establishment of a panel couldonly be delayed but not denied and as on other occasions, delegations could raise their concerns
before a panel.  As far as India was concerned, the restrictions had been imposed and notified to India
by Turkey.  In India's view, Turkey was the only party to this dispute.  This position had also been
taken previously by other delegations in the DSB.  He did not wish to explain India's position at the
present meeting since this would be raised before the panel.  Under the DSU procedures, India had theright for the establishment of a panel if not at the present meeting then at the next meeting.  Turkey, as
a respondent in this case would have the opportunity to explain its position before the panel.  Third
parties interested in this case would also have the opportunity to explain their position before the
panel. He reiterated India's request for the establishment of a panel.  Since Turkey did not accept this
request at the present meeting, which was Turkey's right, he inquired about the dates of the next DSBmeeting because he wished that this panel be established as quickly as possible.  At the same time he
did not wish to request a special meeting for this purpose.
The Chairman, in response to India's queries, said that in accordance with the schedule of
meetings, the next regular meeting of the DSB would be held on 25 March.  However, there was a
particular reason for an earlier meeting of the DSB which would be held on 13 March.
The representative of India said that if he could be given confirmation that India's request for
a panel be included on the agenda of the DSB meeting scheduled for 13 March, he would not request
a special meeting.
The Chairman confirmed that India could request the inclusion of this item on the agenda of
the next DSB meeting.
The representative of the European Communities said that his delegation did not question
India's right to request the establishment of a panel, nor Turkey's refusal of this request at this stage.
The Communities were only concerned about their rights and how they could defend their interests
with regard to the Customs Union in which they were jointly responsible for decisions.  He wished to
ask this question but at the same time he recognized that this was a difficult question for the
Chairman, the Secretariat and the DSB members.
The representative of Turkey wished to associate his delegation with the statement made by
the European Communities.  Turkey, which wished its partner to participate in defending this case,
also posed the same question to the DSB.
The representative of India  said that all the rights were defined in the DSU.  It was not
possible to accept more nor to expect less.  The rights were contained in the DSU and India would
proceed strictly by the terms of the DSU.WT/DSB/M/42
Page 8
The Chairman noted India's statement that Members would be guided by the provisions of the
DSU in response to the questions which had been raised.
The DSB took note of the statements and agreed  to revert to this matter at its next meeting.
4. European Communities - Measures concerning meat and meat products (hormones)
- Report of the Appellate Body (WT/DS26/AB/R - WT/DS48/AB/R)
and Reports of the Panel (W T/DS26/R/USA, WT/DS48/R/CAN)
The Chairman said that this item was on the agenda at the request of the United States and
Canada.   He drew attention to the communicati on from the Appellate Body contained in document
WT/DS26/12 - WT/DS48/10 transmitting the Appellate Body Report which had been circulated in
accordance with Article 17.5 of the DSU.  He reminded delegations that in accordance with the
Decision on Procedures for the Circulation and Derestrictions of WTO documents contained in
WT/L/160/Rev.1 the Appellate Body Report and the Panel Report had been circulated as unrestricted
documents.  Under Article 17.14 of the DSU:  "An A ppellate Body report shall be adopted by the
DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus
not to adopt the Appellate Body report within 30 da ys following its circulation to the Members.  This
adoption procedure is without prejudice to the right of Members to express their views on an
Appellate Body Report."
The representative of the United States said that his country supported the adoption of the
Appellate Body and the Panel Reports.  These Reports were significant because they contained first
interpretations of  the provisions of the Agreement on the Application of Sanitary and Phytosanitary
Measures (SPS).  Much more importantly, however , the Appellate Body had addressed two of the
most fundamental principles contained in the SPS Agreement.  Foremost among those principles was
that the sanitary measure that implemented a Member's chosen level of protection should be based onscientific principles and should not be maintain ed without sufficient scientific evidence.  Such
measures, moreover, had to be justified by a risk assessment and the Appellate Body had affirmed that
the requirement for a risk assessment was a substantive requirement, not merely a procedural one.
The Appellate Body had found that the SPS Agreement reserved for each Member the right to
establish its own level of protection respecting sanitary and phytosanitary risks to life and health.Thus, the Panel and the Appellate Body had confirmed that a Member might depart from international
standards where those international standards would not achieve the level of protection that a Member
determined to be appropriate.  However, the Reports had found that the right to depart from
international standards was conditioned on compliance with the requirements of the SPS Agreement.
The Appellate Body had recognized that a Member could and had to exercise its sovereign rights toprotect human health in a manner that complied with the necessary disciplines on sanitary measures
adopted by Members in the SPS Agreement.
Each of these principles was a cornerstone of the SPS Agreement and the Appellate Body's
application of those principles in its analysis of the Communities' ban on beef from animals treated
with growth-promoting hormones was a validation of the SPS Agreement.  The Appellate Body's
conclusions that the disciplines contained in Article 5 of the SPS Agreement, including the
requirement of a risk assessment, had to be informed by the provisions of Article 2 of the SPSAgreement was also an important contribution to the WTO jurisprudence.  Unless SPS measures were
justified by the objective criteria of scientific evidence and scientific principles, they could easily
come to reflect unwarranted prejudices and degenerate into disguised restrictions on trade.  The
integrity of dispute settlement could only be maintained if the DSB's recommendations were
implemented by Members.  His delegation encouraged the Communities to take the appropriate actionat the next DSB meeting, and to state their intentions to implement the DSB's recommendations by
removing the ban as soon as possible.  Anything short of a clear commitment to the removal of theWT/DSB/M/42
Page 9
unjustified ban would threaten mutually shared in terests in maintaining an effective rules-based
trading system.  The United States was ready to work with the Communities toward achieving this
objective.
The representative of Canada  supported the adoption of the Appellate Body Report and the
Panel Report as modified by the Appellate Body Report.  Canada was pleased that both the Panel and
the Appellate Body had reaffirmed the key-principle of the SPS Agreement that SPS measures shouldbe based on a risk assessment.  Her country expected the Communities to bring their measure into
compliance with the Panel Reports as amended by the Appellate Body Report and remove as soon as
possible their import prohibition which was restricting Canadian exports of beef for nearly 10 years.
Internationally recognized risk assessments had co nfirmed that beef produced with growth-promoting
hormones was safe.  She noted that the risk assessment performed by the Communities had reached
the same conclusions.  Therefore, there was no reas on for the Communities to delay lifting their ban.
Her delegation looked forward to hearing from the Communities about their intentions with regard to
implementation as well as when the Communities would be in a position to implement the
recommendations of the Reports.
The representative of the European Commun ities said that the Communities accepted and
welcomed the Appellate Body Report, which had significantly modified the Panel Reports on a
number of important points.  The implications of the Reports, read together, were now being carefullyexamined by his authorities.  In accordance wi th Article 21.3 of the DSU, the Communities would
indicate, within the next 30 days, their intentions in respect of the implementation of the
recommendations to be adopted at the present meeting.  At this stage, he wished to limit his comments
to certain general observations regarding the Appellate Body Report, which might also be of interest
to other Members.  The Communities considered the Appellate Body Report to be very helpful inclarifying the general approach towards interpreting the rights and obligations of Members, in
particular in areas such as human health, where, on the one hand consumers were seriously concerned
about the quality and safety of products and, on the other hand governments had vital responsibilities
towards their population.  In this respect, the Appellate Body provided a number of important
guidelines.
With regard to the issue of the burden of pr oof, the Appellate Body had made it clear that
whether or not the EC measure was based on international standards, the burden had remained on the
complaining parties to present evidence and legal arguments sufficient to demonstrate that this
measure was incompatible with the WTO obligations (paragraph 102 of the Appellate Body Report).
In this respect the Appellate Body had reversed th e Panel's arguments.  Another important guideline
was contained in paragraph 124 of the Report in which the Appellate Body stated that, "... a panel
charged with determining, for instance, whether 'suf ficient scientific evidence' exists to warrant the
maintenance by a Member of a particular SPS measure may, of course, and should, bear in mind that
responsible, representative governments commonly act from perspectives of prudence and precaution
where risks of irreversible, e.g.life-terminating, damage to human health are concerned".  The
Appellate Body had also ruled, in this context, that the right of Members to act on the basis of
prudence and precaution was not limited to situations described in Article 5.7 of the SPS Agreement.In this respect, the Appellate Body's finding in paragraph 165 was relevant which stated that:  "It is
clear to us that harmonization of SPS measures of Members on the basis on international standards is
projected in the Agreement as a  goal , yet to be realized in the future ."  Such international standards
could not be considered as amounting to binding norms, as the Panel had done.  The Appellate Body
had also clarified that, contrary to the Panel's interpretation, the right of a Member to establish its ownlevel of sanitary protection under Article 3.3 of the SPS Agreement was an autonomous right not an
exception from a general obligation under Article 3.1 of the SPS Agreement.  As a result of this
general approach, the Communities had been found not to have violated Article 3.1 of the SPS
Agreement, although the Panel had found a violation.WT/DSB/M/42
Page 10
In examining whether the EC measure resulted in discrimination or a disguised restriction on
international trade, the Appellate Body had take n into account the carcinogenic potential  of
hormones, the dangers of abuse of hormones, and the concerns in the Communities over the quality
and drug-free character of meat.  This had led the A ppellate Body to conclude the following: "We are
unable to share the inference that the Panel apparently draws that the import ban on treated meat and
the Community-wide prohibition of the use of hor mones here in dispute for growth promotion
purposes in the beef sector were not really designed  to protect its population from the risk of cancer,
but rather to keep out US and Canadian hormone-treated beef and thereby to protect the domestic beef
producers in the European Communities." (paragraph 245 of the Appellate Body Report).  The
Communities were satisfied that this claim of protectionism had now been conclusively rejected.  In
consequence, the Communities had been found by the Appellate Body not to have violated Article 5.5
of the SPS Agreement.
The only inconsistency that had been upheld by the Appellate Body was that the EC ban on
hormone-treated meat did not comply with requirements of Article 5.1 of the SPS Agreement that
such a measure be based on an assessment, as appropriate to the circumstances, of the risks to human
health.  However, it was important to note the significant qualifications made by the Appellate Body
in this respect.  First, the Appellate Body had confirmed that for a measure to be "based on" a risk
assessment meant that it had to be "sufficiently warranted or reasonably supported by" a riskassessment (paragraph 193 of the Appellate Body Report).  This had made a big difference compared
with the Panel's finding that "based on" meant "con forming to".  This was especially relevant for
Members who in this area acted cautiously and wished to achieve a level of sanitary protection higher
than that recommended by international standards.
Second, the Appellate Body had also confirmed that it was not necessary for a Member  to
perform its own risk assessment.  An SPS measure mi ght well find its objective justification in a risk
assessment carried out by another Member or an international organization (paragraph 190 of the
Appellate Body Report).  This should be reassuring to all Members, and in particular developing-
country Members who might not be in a position to ma ke their own risk assessment.  In this respect,
he noted that the Communities found it disconcerting that the complainants had refused to provide theEC with the scientific information in their posse ssion on which their risk assessment regarding the
hormone MGA
4 was based.  It would have certainly been possible to cope with any concerns for
confidentiality of data.  This general issue could be considered by the DSB during the review of the
DSU.
As a third qualification to the obligation to base sanitary measures on a risk assessment, the
Appellate Body had rejected the notion that a risk assessment had to be quantitative in nature and had
to establish a minimum magnitude of risk.  As stated by the Appellate Body, "... the imposition of
such a quantitative requirement finds no basis in the SPS Agreement" (paragraph 186 of the Appellate
Body Report).  Fourth, the Appellate Body had ruled that a risk assessment did not have to come to a
monolithic conclusion reflecting the mainstream of scientific opinion.  In paragraph 194, the
Appellate Body stated that, "... equally responsible and representative governments may act in good
faith on the basis of what, at a given time, may be a divergent opinion from qualified and respectedsources."
The Appellate Body had held that the scientific evidence presented by the Communities had
been relevant and had demonstrated that the hormones concerned had a carcinogenic potential.  The
only shortcoming in the scientific evidence had been that it had not appeared to be sufficiently
specific to the case at hand.  This meant that it had not focused enough on the carcinogenic potential
of those hormones when used specifically for growth promotion purposes, in particular the potential
                                                     
4 Synthetic hormone: melengestrol acetate.WT/DSB/M/42
Page 11
for carcinogenic effects arising from the presence in meat of residues of the hormones concerned
(paragraphs 199 and 200 of the Appellate Body Report).  Since this was a possible lacuna there was a
need to find out how it could be filled more specifically.
In paragraph 205 of its Report, the Appellate Body had considered that the language of
Article 5.2 of the SPS was "... amply sufficient to authorize the taking into account of risks arising
from failure to comply with requirements of good veterinary practice in the administration of
hormones for growth promotion purposes, as well as the risks arising from difficulties of control,
inspection and enforcement of the requirements of good veterinary practice." This was an important
finding.  The risk to be evaluated in a risk assessment was not only risk ascertainable in a sciencelaboratory operating under strictly controlled conditions, but also, as stated by the Appellate Body "...
risk in human societies as they actually exist, in other words, the actual potential for adverse effects
on human health in the real world where people live and work and die." (paragraph 187 of the
Appellate Body Report).
In the above-mentioned instances, the Appellat e Body had provided much needed guidelines
for Members and panels to deal with future cases where trade obligations would have to be reconciledwith other legitimate interests such as human, animal or plant life or health protection or
environmental protection.  This would help to increase Members' confidence in the ability of the
dispute settlement system to deliver fair, workable and prudent rulings. It was therefore clear that the
Communities supported the adoption of the Appellate Body Report and the Panel Reports.
The representative of Norway underlined that with reference to information found in the press
that Norway supported the United States and Canada with regard to this matter, his country, through
the EEA Agreement, was an integral member of th e EC internal market even though it was not a
member of the European Communities.  One aspect in this dispute, although not necessarily a matterof cause and effect was the fact that Norway and the Communities had a very similar legal situation
regarding regulations on imports of meat and meat  products.  Norway welcomed the Appellate Body
Report and the fact that this Report had modified or reversed important aspects of the Panel Reports.
In this regard, his delegation supported the statement made by the Communities.  Norway was glad
that the Appellate Body had reversed the Panel's ru ling in general with regard to the question of the
burden of proof and in particular with regard to a situation where a measure was not based on
international standards in accordance with Article 3.1 of the SPS Agreement.  He emphasized the
importance of the Appellate Body's ruling that Article 3.3 of the SPS Agreement was not an exception
to Article 3.1 of the SPS Agreement and, like the Communities, noted the importance of clarifying the
relationship between Articles 3.1 and 3.3 of the SPS Agreement and of the concepts: "based on" and"conforming to".  Norway considered that the A ppellate Body had made important modifications with
regard to the Panel's interpretation on the concept of risk assessment and the fact that factors which
were not susceptible of quantitative analysis could not be excluded a priori  from the scope of a risk
assessment.
The representative of New Zealand said that his country had participated as a third party in
the proceedings of the Panel and the Appellate Body.  New Zealand welcomed the adoption of the
Panel and the Appellate Body Reports.  These Report s would serve to reinforce the trade facilitating
objectives that underpinned the SPS Agreement.  Both the Panel and the Appellate Body hadconfirmed that it was not permissible to maintain SPS measures that were not "sufficiently supported"
or "reasonably warranted" by a risk assessment carried out in accordance with Article 5 of the SPS
Agreement.  As a result, they had left no doubt that the SPS Agreement included a range of
substantive -- and not merely procedural -- risk assessment disciplines that had to be followed by
Members in order to justify the imposition of SPS measures.  In this regard, New Zealand welcomedthe Appellate Body's analysis of the substantive requirements for a risk assessment.
New Zealand had the following observations with regard to the Appellate Body Report.  The
Appellate Body had upheld the right of Members to determine their own appropriate level of sanitaryWT/DSB/M/42
Page 12
or phytosanitary protection.  However, as the Appellate Body had made it clear, this right was not "an
absolute or unqualified right".  It had to be exercised in conjunction with the other provisions of the
Agreement, and, in particular, those relating to risk assessment as set out in Article 5 of the SPS
Agreement.   The Appellate Body had also stressed that an integrated approach was required when
interpreting the various provisions of the SPS Agreement.  The provisions of the SPS Agreement, in
particular Articles 2 and 5 thereof, should be read together; one could not be interpreted in isolationfrom the other.  With  regard to the importance of a risk assessment, he quoted paragraph 177 of the
Appellate Body Report which stated that:  "The requirements of a risk assessment under Article 5.1 as
well as of 'sufficient scientific evidence' under Article 2.2 are essential for the maintenance of the
delicate and carefully negotiated balance in the SPS Agreement, between the shared, but sometimes
competing, interests of promoting international trad e and of protecting the life and health of human
beings."  In the view of New Zealand, this was a succinct and instructive determination that ought to
be respected by all Members.
However, the Appellate Body seemed to leave two areas open for further consideration.  First,
its interpretation of Article 3.1 of the SPS Agreement had displaced the balance away from the Panel's
interpretation of an obligation to harmonize SPS meas ures with relevant international standards, to
one in which the provision was depicted as e xpressing a goal of harmonization.  Second, the
Appellate Body's discussion of Article 5.5 of the SPS Agreement  -- a provision that sought to
advance the principle of consistency in the application of SPS measures at the domestic level -- haddemonstrated that jurisprudence in this area remained to be fully elaborated.  In this regard, he noted
that the SPS Committee had been mandated to develop guidelines to further the practical
implementation of Article 5.5.  Such guidelines could play an important role not only as guidance
provided to Members in elaborating SPS measures, but also by assisting future Panels and the
Appellate Body to develop a consistent approach to questions regarding Article 5.5 of the SPSAgreement.
He noted that applying the relevant requirements of the SPS Agreement, both the Panel and
the Appellate Body had determined that the EC ban on imports of meat from animals treated withhormonal growth promoters was contrary to the Communities' obligations under Article 3.3 and 5.1 of
the SPS Agreement.  New Zealand fully agreed with these findings.  The disputed EC measures were
of long-standing concern, not only to countries that  wished to export meat treated with hormonal
growth promoters to the Communities, but also to a much broader range of agricultural exporting
countries, including New Zealand, which remained seriously concerned about the systemicimplications to global agricultural trade of sanitary and phytosanitary measures that were not
supported by scientific evidence.  The measures were in place for over a decade, generating a debate
in the GATT as well as in the WTO.  As the Appe llate Body had now settled the issue by confirming
the incompatibility of the ban with the Communities' obligations under the SPS Agreement,
New Zealand believed that it was now incumbent on the Communities to take prompt action to lift theban.  New Zealand believed that this was the only course of action both compatible with Appellate
Body ruling and consistent with the objective of maintaining the integrity of the dispute settlement
system.
The representative of Australia said that her country had also participated as a third party in
this dispute.  Australia supported the adoption of the Appellate Body Report and the Panel Reports as
modified by the Appellate Body Report and welcomed the findings of the Reports that the EC
measure was inconsistent with the Communities' obligations under the SPS Agreement.  Her country
also welcomed the important contribution made  by the Appellate Body Report to the WTO
jurisprudence and to the quality and soundness of the legal reasoning adopted in the dispute settlement
system.  Her delegation looked forward to the Commun ities' statement, within the next thirty days, in
regard of their intentions in bringing their meas ure into compliance with the findings of the Reports.
She noted that the findings of the Appellate Body had not questioned the right of countries to take
measures necessary for the protection of life and health.  However, they had upheld the key role of theSPS Agreement in minimizing the scope for SPS measures to operate as unjustifiable barriers to trade.WT/DSB/M/42
Page 13
Her delegation hoped that the Communities and the complaining parties would be able to reach
mutual agreement on the time-frame and basis for the Communities to achieve full compliance with
their SPS obligations while also respecting the rights of other Members.  Her delegation looked
forward to contributing to surveillance of the im plementation of the DSB's recommendations in this
case in future DSB meetings.
The representative of Argentina said that his delegation supported the adoption of the Panel
Reports as modified by the Appellate Body Report and wished to make some comments on specific
points in accordance with Article 16.4 of the DSU.  In the view of Argentina, the finding contained in
paragraph 253(j) of the Appellate Body Report could open the way for diverging  interpretations of
the scope of obligations set out in Article 5.1 of the SPS Agreement, which defined the elements to be
taken into account in risk assessment.  In modi fying the finding of the Panel, the Appellate Body
appeared to widen the basis for justifying SPS measures.  This was because the Appellate Body had
placed the scientific basis for assessing "risks to human life or health" on the same footing as otherfactors that could not be assessed on the basis of scientific principles and evidence.
He recalled that in the Uruguay Round, the negotiators of the SPS Agreement had explicitly
decided to disregard non-scientific factors, as far as possible.  The decision with regard to the level of
protection was sovereign but it had to comply with  the provisions of Article 2 of the SPS Agreement,
the overall risk-assessment methodology derived from all the provisions of Article 5 of the SPSAgreement and the objectives and other provisions of the SPS Agreement.  Therefore, this could not
be a sovereign decision of a political nature.  The level of protection should systematically stem from:
(i) a risk analysis based on the techniques "developed by the relevant international organizations"
(Article 5.1), which had to take into account the pr evailing specific sanitary conditions (Article 5.2);
(ii) the economic effects of the protective measure (Article 5.3); (iii) a consideration of the objectiveof "minimizing negative trade effects" (Article 5.4);  and (iv) a search to achieve consistency "in risk
management" (Article 5.5).  These elements defining the level of protection under the SPS Agreement
highlighted the contractual nature of the provisions  and the principal idea that the sovereign decision
with regard to the level of protection required the largest possible number of objective references, in
particular those of a scientific nature.  Any interpretation which viewed the definition of the level ofprotection as a "political decision" would diverge from the provisions of the SPS Agreement.
Argentina was therefore concerned with regard to the grounds for the Appellate Body's
finding contained in paragraph 187 of its Report.  In its reasoning, the Appellate Body had followed
the interpretation that factors enumerated in Article 5.2 such as: "relevant processes and production
methods" and "relevant inspection, sampling and testing methods" should, for the purposes of "riskassessment", be placed on an equal footing with the "scientifically based" grounds, which, in
Argentina's view, were the primary factor justifying a measure.  This reversal of the Panel's finding on
the "risk assessment" concept in Article 5.1 had widened the scope of the factors to be assessed and
had indirectly diminished the weight, within the risk assessment process, of the other factors that were
indeed "susceptible of verification in a science laboratory".  The Appellate Body stated as follows:  "It
is essential to bear in mind that the risk that is to be evaluated in a risk assessment under Article 5.1 is
not only risk ascertainable in a science laboratory operating under strictly controlled conditions, butalso risk in human societies as they actually exis t, in other words, the actual potential for adverse
effects on human health in the real world where people live and work and die." (paragraph 187 of the
Appellate Body Report).
In the real world, properly carried out risk assessments would allow for the possibility that
laboratory testing might not be foolproof, and there was generally a tendency to quantify the riskinvolved for human, animal and plant health, as well as the possible economic and sanitary effects
that might ensue from such situations.  Nobody could rely one hundred per cent on the assessments
since the purpose of the SPS Agreement was to ab andon the "zero risk" concept, but the aim of the
multilateral disciplines was to determine the conditions in which trade could be carried on with theWT/DSB/M/42
Page 14
least reasonable risk.  The work of the scientific community was precisely to determine the conditions
in which trade could be carried on within the parameters of the Agreement.  Therefore, the argument
of the Appellate Body to reverse the Panel's finding might open the way for the introduction of
political considerations that would be difficult to assess and potentially subjective and conflictual, as
they could be determined according to national in terests rather than their contractual international
obligations.  This possibility of using factors which might alter the balance of the text of the SPSAgreement and be used as a basis for trade restrictions might distort the application of one of the most
laboriously negotiated Agreements of the Uruguay Round.  He reiterated that Argentina supported the
adoption of the Reports.
The representative of Switzerland said that his country welcomed the strict interpretation of
the SPS Agreement by the Appellate Body which had confirmed the fact that, while respecting certain
conditions, a Member might choose a protection level deviating from international standards.
Switzerland agreed with the findings of the Panel and the Appellate Body, in particular with the
recognized necessity for a scientifically based risk assessment, which had  provided evidence and
sufficiently supported the need and justification of possible protection measures.  Consequently,Switzerland understood the Appellate Body Report in th e sense that in line with Article 2.2 of the SPS
Agreement, the risk assessment had to be undertaken before any measures of protection would be
applied, except when measures of an urgent nature were required.
The DSB took note of the statements and adopted
 the Appellate Body Report in
WT/DS26/AB/R-WT/DS48/AB/R and the Panel Reports in WT/DS26/R/USA, WT/DS48/R/CAN as
modified by the Appellate Body Report.
5. European Communities - Regime for the importation, sale and distribution of bananas
- Statement by Mexico
The representative of Mexico, speaking under "Other Business", also on behalf of Ecuador,
Guatemala, Honduras, Panama and the United States, recalled that at the DSB meeting on
22 January 1998, they had individually expressed con cerns with regard to the Commission's proposal
concerning the European Communities' banana import regime.  At the present meeting, he wished to
inform the DSB of the following: (i) on 28 January 1998, the above-mentioned countries had received
the Commission's proposal regarding the EC banana import regime as well as a brief explanation
regarding its main aspects; (ii) after the examination of the Commission's proposal and the
explanation provided by the Communities, the six countries believed that if this proposal wasimplemented it would result in a banana im port regime incompatible with the WTO rules.
Consequently, on 5 February 1998, a document had been sent to the Communities which summarized
preliminary views regarding the Commission's proposal .  He drew to Members' attention that his
statement and the document to which he had referred would be made available at the end of the
meeting.  He stressed that the Governments of the six countries were ready to work with theCommunities to ensure that, as from 1 January 1999, the banana import regime would fully comply
with the Communities' obligations under the WTO.  In  this context, they looked forward to working
with the Commission and the member States in the forthcoming months, to ensure that a banana
import regime, compatible with the WTO, w ould be implemented in accordance with the
recommendations of the Panel and the Appellate Body.
The representative of Ecuador noted the steps and procedures of the Communities to discuss
the terms of the Commission's proposal aimed at amending Council Regulation 404/93 establishing
the common organization of the market for bananas.  Ecuador hoped that the suggestions and
comments made by Members, including Ecuador, would contribute to this process, so that this
proposal would specifically incorporate the recomm endations of the Panel and Appellate Body that
had not yet been included therein.  The final outcome of this process should bring satisfactory results
to all Members with interests in the banana sector, in particular to Ecuador, the world's largest bananaWT/DSB/M/42
Page 15
exporter into the European market.  It should also resolve the conflict of interests among the member
States regarding bananas.
Ecuador believed that the most important result would be the strengthening of confidence of
all Members regarding the benefits and efficiency of the dispute settlement mechanism.  All
Members, but in particular developed-country Members, had a responsibility not to cause frustration,
disenchantment and mistrust in the efficiency of  the dispute settlement system.  Undoubtedly, the
consequences of disregarding the DSB's recommendations would be carefully weighed by the
Commission and member States.  The precedent that  would be created would be unfavourable for the
proper functioning of the system.  The trading powers which most frequently used the dispute
settlement mechanism were undoubtedly aware of the implications of non-compliance and had
therefore been first to recognize the need to demons trate their readiness and willingness to respect the
WTO rules.
Ecuador had brought to the attention of the Commission certain aspects to be taken into
account which would enable the banana import regime to be fully compatible with the
recommendations of the Panel and Appellate Body.  He recalled that in his statement made at the
DSB meeting on 22 January 1998, he had stressed his concern that bananas from Ecuador would
gradually be displaced from the European market.  On that occasion, he had also stated that the
following elements of the proposal were incompatible with the WTO: (i) the application ofArticle XIII of GATT 1994 with regard to diff erent quotas proposed by the Commission.  The
obligation of non-discrimination was fundamental and had to be respected, since no Member had been
granted a waiver enabling it not to comply with prov isions of this Article.  The waiver had only been
granted with regard to Article I of GATT 1994, as confirmed by the Appellate Body;  (ii) the volumes
and levels of the tariffs that would be imposed on imports of bananas into three new member Statesand the imports of other countries that would join the Communities in the future.  If the banana
imports were subject to new rules and new terms were established, the interests of some Latin
American countries would be affected, in particular the trade interests and investments made by
Ecuador's nationals and firms involved in the various stages of the process, aimed at, inter alia,
improving their competitiveness and securing a stronger position on the European market; (iii) theattempt to extend the application of the preferential regime for bananas up to the year 2005, as set out
in the proposal;  and (iv) the licensing system, the details of which had not yet been disclosed by the
Commission and were therefore a so urce of concern because the functioning and administration of the
system would have implications on the banana trade and might create a risk of injury with
unpredictable consequences.
The representative of the European Communities acknowledged the receipt of the document.
This document had been circulated to all member States of the Communities and had been transmitted
to his authorities in Brussels.  As he had stated at the DSB meeting on 22 January 1998, he recognized
that other parties had the right under the DSU to raise the issue of implementation at any time, but the
Communities, currently in the process of implementation pursuant to their internal procedures, had an
equal right not to reply to such issues in detail while undertaking these procedures.  He added that it
was possible that the parties to this dispute would read the Panel and the Appellate Body reportsdifferently and that they would have different interpretations on some points contained therein.  He
noted that this was a result of rulings which had not been clear with regard to all elements of this
dispute.  If this persisted and parties continued to have different views on implementation it would be
difficult to conclude that a definite solution to this problem had been reached.  This could be
considered when judging the ultimate effectiveness of the procedures.  The parties to the dispute hadstated and continued to state their views regarding the requirement of implementation.  The
Communities maintained their view but they had decided to pursue their own course and internal
procedures and interested parties were invited to remain in contact with Brussels to discuss how to
resolve this issue.
The DSB took note of the statements.WT/DSB/M/42
Page 16
6. Procedural aspects of the DSU review
- Statement by the Chairman
The Chairman, speaking under "Other Business", said that he had circulated to delegations a
self-explanatory note outlining his consultations on procedural aspects of the review of the DSU.  He
recalled that in 1997, he had invited delegations to  make their views known to him and a substantial
number of delegation had done so.  This note was factual and practical.  He noted that Membersshared the desire to clarify procedural matters to the extent possible before considering the substance
of the review.  He had also received some positive response to this report on his consultations and he
proposed that the DSB take note of it as a basis for future discussion.
In looking forward to this discussion, which would be a matter for his successor as
Chairperson of the DSB, he wished to make three brief observations: (i) this was a Member-driven
Organization and it was clear that inputs for the review and the review process were exclusively a
matter for Members; (ii) suggestions had been made  as to how Members might benefit from hearing
the ideas of others as they would develop their thinking, including the scope to draw on informed
views of participants within the structure of the dispute settlement mechanism, and even the
possibility of ideas from informed observers outside this house.  At present this issue was unresolved,
but he hoped the incoming Chairperson would quickly find a constructive way forward;  (iii) the
consultations had given him a sense of confidence that Members attached great value to the disputesettlement mechanism, and that they would addres s with care, precision and foresight the fine-tuning
of this central feature of the rules-based multilateral trading system.  He proposed that the DSB take
note of the report as a basis for future discussion.
5
The DSB so agreed.
7. Concluding remarks by the Chairman
The Chairman, speaking under "Other Business", said that subject to satisfactory conclusion
of the consultations conducted by the Chairman of the General Council, it was expected that the DSBwould formally elect its new Chairman at its meeting on 13 March 1998.  Since he would complete
his posting in Geneva on 2 March, he proposed that the next DSB meeting be opened either by the
Chairman of the General Council or the Chairman of the Trade Policy Review Body, with the electionof the DSB Chairperson as the first item on the agenda.
The representative of India said that since the Chairman would be absent at the time of the
next DSB meeting, he believed that it was his duty,  as well as other members of the DSB, to thank the
Chairman for his excellent and outstanding work.  It had been a pleasure to have Mr. W. Armstrong as
Chairman of the DSB.  As someone who had worked closely with the Chairman, he wished, at thepresent meeting, also on behalf of other DSB members, to pay tribute to him for his outstanding
performance.
The Chairman said that, given the hour, and consistent with what he hoped had been the
practice during the past year of discharging the business efficiently, he did not wish to detain
delegations.  He noted that the past year had been an active one.  Like his predecessors, he had seen
delegations making full use of the dispute settlement system. The number of requests for consultations
initiated under the DSU had risen from 83 in 1996 to 118.  To date, eight Appellate Body reports hadbeen circulated as compared to two in 1996. This increasing use of the system was a positive sign, as
                                                     
5 Subsequently circulated in WT/DSB/W/74.WT/DSB/M/42
Page 17
Ministers had noted in Singapore.  The structure of the rules-based dispute settlement system was
being progressively reinforced through use and interpretation.  This evolution into an even more
juridical atmosphere was perhaps inevitable.  But it would be important that the system retained the
flexibility which had been a feature to-date and which had allowed Members to resolve disputes in
advance of final legal determination. That point was, of course, underlined in Article 3.7 of the DSU.
He said that it had been an honour and a privilege to be the Chairman of the DSB. He thankedMembers for their cooperation and assistance during his term
The DSB took note of the statements.
__________