WT/DS537/R  
 
25 May 2021 
(21-4272) Page: 1/5 
  Original: English   
 
  
CANADA – MEASURES GOVERNING THE SALE OF WINE   
REPORT OF THE PANEL  
 
 
 
 
  WT/DS5 37/R 
 
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TABLE OF CONTENTS  
1   COMPLAINT BY AUSTRALIA  ................................ ................................ .........................  3 
2   PANEL ESTABLISHMENT AND COMPOSITION  ................................ ..............................  3 
3   NOTIFICATION OF A MUTUALLY AGREED SOLUTION  ................................ ...................  4 
 
  WT/DS537/R  
 
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1  COMPLAINT BY AUSTRALIA  
1.1.  On 12 January 2018, Australia requested consultations with Canada pursuant to Articles 1 
and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) 
and Article  XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT  1994) , with respect 
to "a range of di stribution, licensing and sales measures such as product mark -ups, market access 
and listing policies, as well as duties and taxes on wine applied at the federal and provincial level 
may discriminate, either directly or indirectly, against imported wine."1 
1.2.  According to Australia, these measures appeared to be inconsistent with Canada's obligations 
pursuant to Articles III, XVII and XXIV:12 of the GATT 1994.2 
1.3.  Consultations were held on 1 March 2018 .3 
2  PANEL ESTABLISHMENT AND COMPOSITION  
2.1.  On 13 August 2018, Australia requested the establishment of a panel pursuant to Article  6 of 
the DSU with standard terms of reference.4  
2.2.  In its panel request , Australia allege d that " Canada, at a federal level and at a provincial level 
in BC, Ontario, Quebec and Nova Scotia , applies a range of distribution, licensing and sales 
measures, product mark -ups as well as duties and taxes on wine that discriminate, either directly 
or indirectly against imported wine."5  
2.3.  Australia challenge d the following measures:  
a. "Federal – federal excise duty exemption for Canadian wine";  
b. "British Columbia – Discriminatory measures governing sale of wine in grocery "; 
c. Ontario – "Measures governing sale of wine in grocery that favour domestic wine " and 
"Reduced wine basic tax rate for Ontario wines sold through winery retail store system 
and wine boutiques "; 
d. "Quebec  – Discriminatory measures governing the sale of wine in grocery that provide 
domestic wine access to grocery and convenience stores "; and  
e. "Nova Scotia – reduced product mark -ups for local wine producers ".6 
2.4.  Australia claimed  inter alia  that these measures were inconsistent with Articles III:1, III: 2 
and/or III:4 of the GATT 1994.7 
2.5.  At its meeting on 26 September 2018, the Dispute Settlement Body (DSB) established a panel 
pursuant to Australia's request  in document WT/DS 537/8 , in accordance with Article  6 of the DSU.8 
2.6.  The Panel's terms of reference are the following:  
To examine, in t he light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by Australia in document 
 
1 Request for consultations by Australia, WT/DS537/1  (Australia's consultation s request) , p. 1 . 
2 Australia 's consultation s request , WT/DS537/1, p. 3.  
3 Request for the establishment of a panel by Australia, WT/DS537/8  (Australia's panel request) , p. 1. 
4 Australia's panel request, p. 5. 
5 Australia's panel request, p. 1. 
6 Australia's panel request, p p. 1-4.  
7 Australia's panel request , pp. 1 -4. 
8 DSB, Minutes of the meeting held on 26 September 2018, WT/DSB/M/419, pa ra. 5.6.  WT/DS5 37/R 
 
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WT/DS537/8 and to make such findings as will assist the DSB in making the 
recommendations or in givin g the rulings provided for in those agreements.9 
2.7.  On 25 February 2019 , Australia requested the Director -General to determine the composition 
of the panel, pursuant to Article  8.7 of the DSU . On 7 March 2019 , the Director -General accordingly 
composed the Panel as follows:  
Chairperson:  Mr Stuart Harbinson  
 
Members:   Ms Gisela Bolívar -Villagómez  
Mr Gabriel Duque  
 
2.8.  Argentina, Chile, China, the European  Union , India, Israel, the Republic of Korea, Mexico, 
New Zealand, the Russian Federation, South Africa, Chinese Taipei, Ukraine, the United  States , and 
Uruguay reserved their rights to participate in the Panel proceedings as third parties .10 
3  NOTIFICATION OF A MUTUALLY AGREED SOLUTION  
3.1.  On 12 April 2019, Australia informed the Panel that Australia and Canada had reached an 
agreement on measures governing the sale of wine in grocery stores in the province of 
British  Columbia .11 Canada confirmed that an understanding on the "measures governing the sale 
of wine in grocery stores in the province of British Columbia" had been reached with Australia, as 
outlined in Australia's letter of 12 April 2019.12 
3.2.  On 3 July 2020, Australia and Canada informed the Panel that they had reached "a mutually 
agreed solution regar ding Australia's claims with respect to the federal excise duty exemption and 
the Nova Scotia Emerging Wine Regions Policy" .13 
3.3.  On 22 July 2020, Australia and Canada informed the Panel that the y had reached "a mutually 
agreed solution regarding Australia's claims with respect to the disputed Ontario measures on the 
sale of wine ."14 
3.4.  On 8 February 2021 and on 8 April 2021, t he Panel informed the DSB that it had accepted 
several requests by the parties to delay the issuance of its interim report in order to all ow the parties 
to find a mutually agreed solution .15 
3.5.  On 22 April 2021, Australia and Canada informed the Panel that the y had reached "a mutually 
agreed solution regarding  Australia's claims with respect to the disputed Quebec measures on the 
sale of wine. " The parties considered that, as a result of that agreement, the matters raised in this 
dispute had been resolved.16 
3.6.  By a letter dated 12 May  2021, the parties notified t he DSB that they had reached a mutually 
agreed solution  pursuant to Article 3.6 of the DSU . The mutually agreed solution reached by the 
parties , was circulated as document WT/DS537/ 18 on 18 May 2021.  
3.7.  The Panel welcomes the fact that the parties have reach ed a mutually agreed solution and 
recalls that , pursuant to  Article 3.7 of the DSU , "[t]he aim of the dispute settlement mechanism is 
to secure a positive solution to a dispute. A solution mutually acceptable to the parties to a dispute 
and consistent with  the covered agreements is clearly to be preferred."  
 
9 Constitution note of the Panel, WT/DS537/9  and WT/DS537/9/Corr.1 , para. 2.  
10 Constitution note of the Panel, WT/DS537/9  and WT/DS537/9/Corr.1 , para. 5 . 
11 Australia's communication , 12 April 2019, p. 1.  
12 Canada's communication , 12 April 2019.  
13 Joint communication , 3 July 2020.  
14 Joint communication , 22 July 2020.  
15 Communications from the Panel, WT/DS537/16, 11 February 2021 , and WT/DS537/17, 9 April 2021.  
16 Joint communication , 22 April 2021.  WT/DS537/R  
 
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3.8.  The Panel also takes note of Article 12.7 of the DSU, which provides that "[w]here a settlement 
of the matter among the parties to the dispute has been found, the report of the panel shall be 
confined to a brief description of the case and to reporting that a solution has been reached ."  
3.9.  Accordingly, the Panel concludes its work by reporting that a mutually agreed solution to this 
dispute has been reached between the parties.  
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