RESTRICTED  
  
WT/DSB/M/393  
 
11 April 2017 
(17-1943) Page: 1/5 
Dispute Settlement Body  
6 March 2017    
 
 MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 6 MARCH 2017  
Chairman: Mr. Xavier  Carim  (South Africa ) 
1  COLOMBIA – MEASURES RELATING TO  THE IMPORTATION OF T EXTILES, APPAREL 
AND FOOTWEAR  
A.  Recourse to Article 21.5 of the DSU by Colombia: Reques t for the establishment of 
a panel (WT/DS461/17)  
1.1.  The Chairman  recalled that the DSB had considered this matter at its meeting on 
20 February  2017. He then drew attention to the communication from Colombia contained in 
document WT/DS461/17, and invited the representative of Colombia to speak.  
1.2.  The representative of Colombia  said that, first of all, his delegation thanked the Chairman for 
agreeing to convene the special meeting pursuant to footnote  5 to Article  6.1 of the DSU. He 
recalled that, on 20  February  2017, Panama had objected to Colombia's panel request to examine 
Panama's implementation of the DSB's recommendations and rulings in DS461. In accordance with 
Article  21.5 of the DSU, Colombia was requesting, for the second time, that the matter be referre d 
to the original Panel, if possible, to determine whether, the expiry of the compound tariff provided 
for in Decree  456 of 2014, and the new tariff applicable to imports of certain apparel and footwear 
products under Decree  1744, issued by Colombia in 201 6 had brought Colombia into conformity 
with the covered agreements, pursuant to the DSB rulings and recommendations of 22  June 2016. 
Colombia noted that, as it had indicated in WT/DS461/17, in spite of the fact that Colombia had 
already notified its compli ance with the DSB recommendations and rulings (WT/DS461/15, dated 
15 December  2016), and had done so promptly and effectively, before the expiry of the 
reasonable period of time, Colombia was forced to seek recourse to Article  21.5 of the DSU 
because Panam a did not recognize Colombia's implementation and had requested authorization to 
suspend the application of concessions or other obligations to Colombia, without first referring the 
matter to a panel under Article  21.5 of the DSU. Panama had made this requ est despite the fact 
that Colombia had already notified its compliance with the DSB's recommendations and rulings.  
Colombia recalled that at the 20  February  2017 DSB meeting, it had stated that Panama's reasons 
for objecting the establishment of a panel we re not supported by the text of Article  21.5 of the 
DSU. Furthermore, Colombia considered Panama's objection to be contrary to the principles set 
out in Article  3.10 of the DSU, specifically where Panama had stated that "[c]onsultations prior to 
a panel re quest are a fundamental requirement of the DSU. To the extent that the preference 
expressed in the DSU of promoting and arriving at a mutually agreed arrangement among the 
parties is a core principle of the Understanding, this requirement cannot be simply disregarded. 
Colombia has not requested consultations to address the subject of its request."1 
1.3.  At the 20  February  2017 DSB meeting, some delegations had stated that Panama's 
opposition was inappropriate and that it amounted to a procedural remedy that was contrary to 
Article  3.10 of the DSU. This was because it reflected a contentious strategy that sought to block 
Colombia's right to demonstrate its compliance with the recommendations and rulings of the DSB.2 
                                                
1 Statement made by Panama at the 20  February  2017 DSB meeting . 
2 See the minutes of the 20 February  2017 DSB meeting (WT/DSB/M/392).  WT/DSB/M/393  
 
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  At the same time, some delegations had stated th at nothing in Article  21.5 of the DSU indicated 
that consultations were required. Members had supported Colombia's position that consultations 
prior to the establishment of a panel under Article  21.5 of the DSU were not a prerequisite in 
certain circumstan ces. Such circumstances included when the complainant had refused to initiate 
proceedings under Article  21.5 of the DSU where there was disagreement as to the existence or 
consistency with a covered agreement of measures taken to comply with the recommenda tions 
and rulings of the DSB, as was the case in DS461. Colombia reiterated that Article  21.5 of the DSU 
was silent with respect to the obligation to request consultations under Article  4 of the DSU. 
Consequently, such consultations could not be interprete d as a mandatory procedural remedy. This 
was particularly the case because, in DS461, Panama had initiated proceedings under Article  22.6 
of the DSU in the absence of any determination of Colombia's compliance with the DSB 
recommendations and rulings or th e existence of nullification or impairment affecting Panama.  
1.4.  In Colombia's view, Panama had failed to comply with the logical sequence of the WTO 
dispute settlement process. Despite this, Colombia said that it had reasserted its good faith by 
proposing to Panama the conclusion of a sequencing agreement (WT/DS461/20) on 
22 February  2017. This would allow the parties to organize different stages of this dispute, in 
accordance with the DSU and Members' practice for the past 20  years. Colombia had also 
reassert ed its good faith through the request for consultations (WT/DS461/19) it had submitted to 
Panama on 27  February  2017. The request was made with a view to establishing the 
meaninglessness and absurdity of Panama's essentially procedural opposition to Colomb ia's 
request for the establishment of a compliance panel. Colombia's request for consultations was 
made without prejudice to Colombia's position that, even if consultations were necessary, 
Colombia and Panama had already held extensive consultations on thi s and on Decree 1744.3 
Colombia regretted that Panama had not responded either to invitation to conclude a sequencing 
agreement or to the invitation to hold consultations. Colombia hoped that the panel established at 
the present meeting would find a "reaso nable way" to expedite the proceedings and settle all 
outstanding issues in this dispute in order to guarantee the proper functioning of the dispute 
settlement mechanism. Prompt findings by the DSB would assist the parties in securing a positive 
solution t o the dispute, in accordance with Article  3.7 of the DSU. Finally, he said that, as had 
already been stated on several occasions, Colombia had replaced the compound tariff found to be 
inconsistent with an ad valorem tariff that did not exceed its WTO bound  tariff and therefore it had 
brought the measure subject to the DSB's recommendations and rulings into compliance with its 
WTO obligations. On 2  November  2016, the Colombian Government had issued Decree  1744 
of 2016 modifying the tariffs applicable to impo rts of products classified in Chapters  61, 62 and 63 
of the Customs Tariff, and certain items in Chapter 64. By doing so, Colombia had complied fully, 
and timely, with the DSB's rulings. This had been notified to the WTO in document WT/DS461/15 
of 15 Decem ber 2016. In the light of the above, Colombia looked forward to the establishment of a 
compliance panel in DS461.  
1.5.  The representative of Panama  noted that Colombia had requested the establishment of a 
panel under Article  21.5 of the DSU for a second time. H e recalled that Panama had already 
expressed its concerns with regard to Colombia's panel request. Based on past experience in 
similar situations, Panama believed that it was appropriate for the panel requested by Colombia to 
be established at the present meeting. However, Panama reserved the right to raise its concerns 
before the panel.  
1.6.  The representative of the United  States  said that the United  States  regretted that a second 
meeting was necessary in order to move forward with this proceeding. It was in b oth parties' 
interest, in order to reach a final resolution of this dispute, to move efficiently to resolve the 
fundamental issue of compliance. With regard to the issue of consultations, the United  States 
noted  that there  was no   requirement   to request   consultations  under Article  4  of the DSU   as a  
                                                
3 For example, the meeting between the Vice Ministers of Trade of Colombia and Panama held in Bogota 
on 8  February  2017, and the constant telephone communication at that level between the capitals. 
Furthermore, on 9  February  2017, the Ministers of Foreign Affairs and th e Ministers of Trade of the 
two countries met in Cartagena to hold consultations on this matter. Fina lly, on 22  February  2017 Colombia 
formally submitted to Panama a proposal for a sequencing agreement, recognizing the specificities of the 
current situation in the dispute, a proposal to which Panama has not responded.  WT/DSB/M/393  
 
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  condition for requesting the establishment of a compliance panel pursuant to Article  21.5 of the 
DSU – a point that the Appellate Body had made in two reports.4 Consultations were not referred 
to in Arti cle 21.5 of the DSU, and the parties had already consulted on the initial matter giving rise 
to the situation under Article  21.5 of the DSU. The United  States said that , indeed,  it could not see 
how Article  4 of the DSU could apply to an instance in which – as in this instance – it was the 
Member concerned who was requesting a compliance panel to confirm that Member's compliance. 
As the compliance panel would be established at the present meeting, and an arbitration 
proceeding had been commenced under Artic le 22.6 of the DSU, the parties and the individuals 
comprising the Panel and the Arbitrator should consider how to efficiently structure the two 
proceedings. In doing so, whether the measure at issue achieved compliance could and should be 
taken into accou nt in determining, in the Article  22.6 proceeding, the level of nullification and 
impairment. Specifically, any level of suspension of concessions determined in that proceeding 
must be equivalent to the current level of nullification and impairment.  
1.7.  The Un ited States considered that the issue of whether Colombia's actions removed the 
WTO-inconsistency found by the DSB could be addressed in the context of the Article  22.6 
proceeding or in a proceeding under Article  21.5 of the DSU. The United  States  recalled  that the 
WTO dispute settlement system was designed to support the prompt resolution of disputes and 
must fulfil that function if the system was to function efficiently, as the Members intended. The 
United  States said that it regretted that these rules we re, at times, being used to impede, rather 
than further, resolution of disputes among Members.  
1.8.  The representative of Australia  said that her country would like to comment on some of the 
systemic issues raised in the current dispute. In Australia's view, Co lombia was entitled to request 
the establishment of an Article  21.5 panel to determine whether its new measure was consistent 
with the GATT  1994. As this was Colombia's second such request, Australia expected that a Panel 
would be established at the presen t meeting. Further, Australia recalled that the dispute had also 
been referred to arbitration under Article  22.6 of the DSU at the 20  February  2017 DSB meeting. 
Therefore, the establishment of a compliance panel at the present meeting gave rise to question s 
as to the appropriate sequencing of the related proceedings. Members had raised this issue at the 
20 February  2017 DSB meeting. In Australia's view, there was no legal basis for the DSB to 
require the suspension of an Article  22.6 arbitration contingent on an Article  21.5 panel finding. 
This would prevent a complaining Member from exercising its rights under the DSU and would 
unfairly delay the rights of a Member to seek suspension of concessions for WTO -inconsistent 
measures. However, Australia was mindf ul of the complex systemic issues, and the potential for 
uncertainty, arising from holding parallel compliance and retaliation proceedings in the current 
dispute. In principle, in the absence of agreement from the Membership on codification of 
appropriate procedures, Australia considered that an agreement between parties on the 
sequencing of compliance and retaliation proceedings was the preferred mechanism to resolve any 
uncertainty about sequencing in a particular dispute. This was consistent with establi shed practice, 
and had been effective in the past. Australia recalled that all Members shared a responsibility to 
support and improve the efficiency, effectiveness and operation of the WTO dispute settlement 
system. Australia,  therefore , supported calls ma de by other Members for the parties to cooperate 
with a view to finding a pragmatic solution that both protected the rights of each party and took 
into account the systemic interests of all Members.  
                                                
4 See "Mexico – HFCS"  (Article  21.5) (AB), para. 65 ("[W]e conclude that even if the general obligations 
in the DSU regarding prior consultations were applicab le in proceedings under Article  21.5 of the DSU – a 
matter which we do not decide – non-compliance with those obligations would not ha ve the effect of depriving 
a panel of its authority to deal with and dispose of the matter. It follows that, in this case, the Panel was not 
required to consider, on its own motion, whether the lack of consultations deprived it of its authority to assess 
the consistency of the redetermination with the Anti -Dumping Agreement. "); "US - Continued  Suspension " 
(AB), para. 340 ( "Thus, it is important to distinguish between these consensual means of dispute resolution, 
which are always at the Members ' disposal, an d adjudication through panel proceedings, which are 
compulsory. I t is in this sense that Article  21.5 is cast in obligatory language. In this dispute, it is clear that a 
mutually acceptable solution was not reached and the European Communities decided to r esort to adjudication. 
In addition, the parties to this dispute were unable to agree on an arbitratio n procedure pursuant to Article  25 
of the DSU. The issue before us, therefore, is which procedure must be followed when parties do  not avail 
themselves of the consensual and alternative means of dispute resolution provided in the DSU, and the dispute 
must proceed to the adjudication phase "). WT/DSB/M/393  
 
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  1.9.  The representative of Mexico  said that his delegation had  previously expressed its views on 
the procedural matters involved in this dispute. Mexico  believed  that consultations under 
Article  21.5 of the DSU were necessary before proceeding with the compliance panel,  unless the 
parties  to the dispute agreed otherw ise in their sequencing agreement.  However, in this dispute 
there was no sequencing agreement . Therefore, c onsultations were necessary and it would now be 
for the panel to rule on this matter.  
1.10.   The representative of Canada  said that, in his country's view, Members should be pragmatic 
with respect to the issue of consultations at the compliance phase of a dispute. While the DSU was 
ambiguous as to whether or not consultations were required at that stage, it nevertheless provided 
that the prompt settlement of disputes was essential to the effective functioning of the WTO. As a 
result, where the parties disagreed as to whether or not consultations were required, they should 
try to reach a compromise. For instance, they could agree on a shorter period of time for  
consultations, and to establish a panel at the first DSB meeting at which it was requested. In the 
context of this dispute, it was Canada's understanding that Colombia considered that it had 
complied with the DSB's recommendations and rulings. Panama disa greed with this claim. 
Otherwise, Panama would not have insisted on proceeding with its request to suspend 
concessions. As such, it was unclear to Canada what purpose consultations would serve in the 
compliance phase of this dispute.  
1.11.   The representative of the Russian  Federation  said that without commenting on the merits of 
this dispute, her country wished to join other Members who had made statements at the previous 
DSB meeting and at the present meeting expressing some systemic concerns regarding this 
dispute. As some Members had pointed out, disagreement s over WTO -consistency of measures 
taken to comply should be resolved through recourse to the dispute settlement proceedings, 
including, wherever possible, resorting to the original panel. Consequently, Rus sia welcomed 
Colombia's recourse to Article  21.5 of the DSU to resolve the disagreement between the parties 
over compliance issues. Russia hoped that the parties would find a constructive solution to address 
their disagreements without any prejudice to the ir respective rights and obligations under the 
DSU. 
1.12.   The representative of India said his country did not intend to comment on the merits of this 
dispute. India noted that Colombia had made a second request for the establishment of a 
compliance panel and be lieved that Colombia was within its rights to do so. India also agreed with 
Colom bia and the United  States that consultations were not required in this context. India believed 
that the best way to resolve this issue or impasse would b e through mutual discu ssions and 
understanding. India noted that, unfortunately, there was no sequencing agreement in this dispute 
and expressed its disappointment with the systemic implications involved in this situation. 
Although many Members had stated that a sequencing agre ement was not legally mandated  and 
that a practice had evolved in this regard to ensure certainty under the DSU. As Australia had 
rightly stated, there were complex systemic issues surrounding the holding of parallel processes 
under arbitration and a compl iance panel. Members should be pragmatic in taking this process 
forward. Colombia's proposal on agreed procedures  (WT/DS461/20) , in paragraph  2 of the 
sequencing agreement, clearly stated that, even after a request for suspension had been made, 
there was s till scope for the parties to enter into a sequencing agreement, in view of a suspension 
and a subsequent compliance panel. Therefore, India urged both parties to explore the possibility 
of entering into a sequencing agreement which would provide legal cer tainty and avoid inefficiency 
in the dispute settlement process, in light of the significant workload issues that the system was  
facing.  
1.13.   The representative of China  said that his country had systemic concern s with regard to the 
procedural issues raised in this dispute. In order to ensure the smooth operation of the WTO 
dispute settlement mechanism , China encouraged  both parties to act in good faith  and to follow  
the current practice of  entering into sequencing agreements, as soon as possible , so as to resolve 
the dispute in an orderly manner . 
1.14.   The DSB took note  of the statements and agreed , pursuant to Article  21.5 of the DSU, to 
refer to the original Panel, if possible, the matter raised by Colombia in document WT/DS461/17. 
The Panel would have standard term s of reference.  WT/DSB/M/393  
 
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  1.15.   The representatives of Australia , China , Ecuador , the European  Union , Guatemala , 
Honduras , India, the Russian  Federation , Chinese  Taipei  and the United  States  reserved their 
third-party rights to participate in the Panel' s proceedings.  
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