RESTRICTED
WORLD TRADE WT/DSB/M/27
15January 1997
ORGANIZATION(97-0115)
DISPUTE SETTLEMENT BODY
3December 1996
MINUTES OFMEETING
Held intheCentre William Rappard
on3December 1996
Chairman: Mr.Celso Lafer (Brazil)
Subjects discussed: Page
1. Adoption oftheRules ofConduct fortheUnderstanding onRules andProcedures
Governing theSettlement ofDisputes 1
2. United States -Standards forreformulated andconventional gasoline 2
- Period oftimeforimplementation oftheDSB'srecommendations 2
3. Requests tobejoined inconsultations under Article 4.11oftheDSU 2
Prior totheadoption oftheagenda, theUnited States withdrew itsrequest fortheestablishment
ofapanel on"European Communities -Duties onImports ofGrains" contained inWT/DS13/2 and
Add.1. Itwasunderstood thatthiswithdrawal waswithout prejudice totherightoftheUnited States
toinclude thismatter ontheagenda ofafuture DSBmeeting.
1. Adoption oftheRules ofConduct fortheUnderstanding onRules andProcedures Governing
theSettlement ofDisputes (WT/DSB/RC/W/1)
TheChairman recalled thatattheDSBmeeting on20November 1996, Mr.Armstrong had
reported ontheresults ofnegotiations ontheRules ofConduct fortheUnderstanding onRules and
Procedures Governing theSettlement ofDisputes. Atthatmeeting ithadappeared thatthere wasa
consensus infavour ofadoption oftheRules ofConduct circulated on15November 1996, in
WT/DSB/RC/W/1. TheDSBhadtherefore taken noteoftheconsensus andhadagreed torevert to
thismatter atthepresent meeting inorder toformally adopt theRules ofConduct. Hethenproposed
thattheDSBadopt theRules ofConduct contained indocument WT/DSB/RC/W/1.
TheDSBadopted theRules ofConduct contained inWT/DSB/RC/W/1.1
1Subsequently circulated asdocument WT/DSB/RC/1.WT/DSB/M/27
Page2
2. United States -Standards forreformulated andconventional gasoline
- Period oftimeforimplementation oftheDSB'srecommendations
Therepresentative ofVenezuela, speaking under "Other Business", announced thatthe
Governments ofVenezuela andtheUnited States hadagreed thatareasonable period oftimeforthe
implementation oftheDSB'srecommendations on"United States -Standards forReformulated and
Conventional Gasoline" would be15months. Venezuela would havepreferred tohaveashorter period
oftimebutwasaware ofthecomplexity oftheUSlegislation inthisarea. Thisreasonable period of
timewould startretroactively from20May1996, when theDSBhadadopted thereports ofthepanel
andtheAppellate Body. Itwastheunderstanding ofhisdelegation thatasofthenextmeeting inJanuary
1997, theDSBwould begin monitoring theimplementation oftherecommendations.
Therepresentative oftheUnited States confirmed theinformation provided byVenezuela
concerningthe15-monthperiodfortheimplementationoftherecommendationsoftheDSBandreminded
Members thatthereasonable period oftimebecame effective sixmonths ago. Therefore, atthefirst
meeting oftheDSBinJanuary 1997, theUnited States would provide itsstatus report onprogress
intheimplementation inaccordance withArticle 21.6oftheDSU.
Therepresentative ofBrazil thanked theUnited States forhaving expressed itsintention to
comply withtheprovisions ofArticle 21.6oftheDSUandtoreport atthefirstDSBmeeting in1997,
onprogress intheimplementation ofrecommendations oftheDSB. Herecalled thatoversixmonths
hadpassed since theDSBhadadopted thereport oftheAppellate Body andthatalmost twoyears had
elapsed since Brazilian exports ofgasoline totheUnited States hadbegun tobeadversely affected by
restrictions. Brazil hadalready presented itsviews regarding thereasonable period oftimeforthe
implementation oftherecommendations. Itconsidered thatinthiscase, a15-month implementation
period wasexcessive which would notonlyresult infurther damage toBrazilian exporters, butwould
alsosetanunfortunate precedent forthedispute settlement mechanism. However, hisGovernment
dulynoted thatthemaximum period oftimeforimplementation ofrulings provided forinArticle 21.3
oftheDSU would notbeexceeded bytheUnited States. Brazil would carefully review thereport to
beprovided bytheUnited States onprogress intheimplementation oftherecommendations ofthe
DSB. Hisdelegation expected that, inaccordance with Article 21.6 oftheDSU, theissue of
implementation would remain ontheDSB'sagenda untilitsresolution. Brazil alsoreserved itsrights
under Article 21.7and8oftheDSU.
TheDSBtooknoteofthestatements.
3. Requests tobejoined inconsultations under Article 4.11oftheDSU
Therepresentative oftheEuropean Communities, speaking under "Other Business", saidthat
hisdelegation wasconcerned withtherefusal byIndonesia toallow theCommunities tobejoined in
consultations requested byJapan2andtheUnited States3concerning Indonesia 'smeasures affecting
theautomobile industry. Since theCommunities hadasubstantial tradeinterest inthese consultations
hebelieved thatitwould beappropriate fortheChairman toconsult withinterested parties concerning
thisrefusal. Furthermore hesuggested thattheLegal Affairs Division oftheWTO Secretariat beinvited
togiveitsopinion onthismatter during suchconsultations.
2WT/DS55/1
3WT/DS59/1WT/DSB/M/27
Page3
Therepresentative oftheUnited States saidthathiscountry supported theCommunities 'request
forconsultations onpractices developed under Article 4.11oftheDSU.
Therepresentative ofJapan saidthatrecently hiscountry hadfaced twocases inwhich its
requests tobejoined inconsultations pursuant toArticle 4.11oftheDSU hadbeenrejected without
receiving anyreasons from therequested parties whyJapan'srequests werenotwell-founded. Japan
believed thatithadtherighttoclaim substantial trade interests inthese cases. Therejections without
anyrelevant reasons seriously risked toundermine thedispute settlement system which emphasised
transparency through participation ofthirdparties inthesettlement ofdisputes. Hetherefore wished
todraw attention oftheDSBtothese cases andrequested thattheMember which hadrefused Japan's
request reconsider itsposition. Hesupported theCommunities 'proposal fortheChairman tohold
consultations andfortheLegal Affairs Division toprovide itsopinion onthismatter.
TheChairman saidthatthismatter would betaken upinconsultations asrequested byMembers.
From thesystemic point ofview there wasnodoubt thattheroleofthirdparties wasanimportant
aspect ofthedispute settlement system. Aside fromthespecific question of"trade interests" therewas
alsoageneral question related totheparticipation inconsultations under Article 4.11oftheDSUwhich
needed tobeaddressed andexamined.
TheDSBtooknoteofthestatements.