RESTRICTED  
  
WT/DSB/M/413  
 
31 August 2018  
(18-5432) Page: 1/33 
Dispute Settlement Body  
28 May 2018    
 
MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 28 MAY 2018 
Chairperson : Ms. Sunanta Kangvalkulkij  (Thailand)  
Table of Contents  
1   SURVEILLANCE OF IMPLEMENTATION OF RE COMMENDATIONS ADOPTE D BY 
THE DSB ................................ ................................ ................................ ...........................  2 
A.  United  States – Anti-dumping measures on certain hot -rolled steel products from 
Japan: Status report by the United  States ................................ ................................ ..............  2 
B.  United  States – Section 110(5) of the US  Copyright Act: Status report by the 
United  States  ................................ ................................ ................................ .....................  3 
C.  European  Communities – Measures affecting the approval and marketing of biotech 
products: Status report by the European  Union ................................ ................................ ....... 4 
D.  United  States – Anti-dumping and countervailing measures on large residential 
washers from Korea: Status report by the United  States  ................................ ..........................  5 
2   UNITED  STATES – CONTINUED DUMPING AN D SUBSIDY OFFSET ACT  OF 
2000: IMPLEMENTATION  OF THE RECOMMENDATI ONS ADOPTED BY THE  DSB ................  5 
A.  Statement by the European  Union  ................................ ................................ ....................  5 
3   EUROPEAN  COMMUNI TIES AND CERTAIN MEM BER STATES – MEASURE S 
AFFECTING TRADE IN L ARGE CIVIL AIRCRAFT – COMMUNICATION BY T HE 
EUROPEAN  UNION  ................................ ................................ ................................ ...........  7 
4   CHINA'S TECHNOLO GY TRANSFER POLICIES  ................................ ...............................  8 
A.  Statement by the United  States  ................................ ................................ .......................  8 
5   UNITED  STATES – ANTI -DUMPING AND COU NTERVAILING DUTIES O N 
CERTAIN PRODUCTS AND  THE USE OF FACTS AV AILABLE  ................................ ..............  13 
A.  Request for the establishment of a panel by the Republic of  Korea  ................................ ......13 
6   PAKISTAN – ANTI -DUMPING MEASURES ON BIAXIALLY ORIENTED 
POLYPROPYLENE FILM F ROM THE UNITED ARAB EMIRATES  ................................ ..........  14 
A.  Request for the establishment of a panel by the United Arab Emirates  ................................ .14 
7   INDIA – EXPORT R ELATED MEASURES  ................................ ................................ ...... 15 
A.  Request for the establishment of a panel by the United  States  ................................ ............ 15 
8   EUROPEAN  COMMUNI TIES AND CERTAIN MEM BER STATES – MEASURE S 
AFFECTING TRADE IN L ARGE CIVIL AIRCRAFT:  RECOURSE TO ARTICLE  21.5 OF 
THE DSU BY THE UNITE D STATES  ................................ ................................ ...................  16 
A.  Report of the Appellate Body and Report of the Panel  ................................ ........................ 16 WT/DSB/M/413  
 
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  9   EUROPEAN  COMMUNI TIES AND CERTAIN MEM BER STATES – MEASURE S 
AFFECTING TRADE IN L ARGE CIVIL AIRCRAFT:  RECOURSE TO ARTICLE  21.5 OF 
THE DSU BY THE UNITE D STATES  ................................ ................................ ...................  20 
A.  Report of the Panel and the report contained in WT/DS316/AB/RW and 
WT/DS316/AB/RW/Add.1  ................................ ................................ ................................ ....20 
10   EUROPEAN  UNION – COUNTERVAILING MEA SURES ON CERTAIN 
POLYETHYLENE TEREPHT HALATE FROM PAKISTAN  ................................ ........................  20 
A.  Report of the Appellate Body and Report of the Panel  ................................ ........................ 20 
11   APPELLATE BODY APPOINTMENTS: PROPOSAL BY ARGENTIN A; AUSTRALIA; 
THE PLURINATIONAL ST ATE OF BOLIVIA; BRAZ IL; CANADA; CHILE; C HINA; 
COLOMBIA; COSTA  RICA ; DOMINICAN  REPUBLIC ; ECUADOR; EL  SALVAD OR; THE 
EUROPEAN  UNION; GUAT EMALA; HONDURAS; HON G KONG, CHINA; ICELA ND; 
INDIA; INDONESIA; IS RAEL ; KAZAKHSTAN; KOREA;  MEXICO; NEW  ZEALAND ; 
NICARAGUA; NORWAY; P AKISTAN; PANAMA; PAR AGUAY; PERU; THE 
RUSSIAN  FEDERATION; SINGAPORE; SWITZERLA ND; THE SEPARATE CUS TOMS 
TERRITORY OF TAIWAN,  PENGHU, KINMEN AND MATSU; TURKEY; UKRAI NE; 
URUGUAY; THE BOLIVAR IAN REPU BLIC OF VENEZUELA AN D VIET  NAM  ........................  26 
12   STATEMENT BY TH E CHAIRPERSON REGARD ING THE POSSIBLE 
REAPPOINTMENT OF ONE  APPELLATE BODY MEM BER ................................ ....................  33 
 
 
1  SURVEILLANCE OF IMPL EMENTATION OF RECOMM ENDATIONS ADOPTED BY  THE DSB 
A.  United  States – Anti-dumping measures on certain hot -rolled steel products fr om Japan: Status 
report by the United  States (WT/DS184/15/Add.183)  
B.  United  States – Section  110(5) of the US  Copyright Act: Status report by the United  States 
(WT/DS160/24/Add.158)  
C.  European  Communities – Measures affecting the approval and marketing  of biotech products: 
Status report by the European  Union (WT/DS291/37/Add.121)  
D.  United  States – Anti-dumping and countervailing measures on large residential washers from 
Korea: Status report by the United  States (WT/DS464/17/Add.5)  
1.1.  The Chairperson  noted that there were four sub -items under this Agenda item concerning 
status reports submitted by delegations pursuant to Article  21.6 of the DSU. She recalled that 
Article  21.6 of the DSU required that, "[u]nless the DSB decides otherwise, the issue of 
implementation of the recommendations or rulings shall be placed on the Agenda of the DSB 
meeting after six  months following the date of establishment of the reasonable period of time and 
shall remain on the DSB's Agenda until the issue is resolved". Under thi s Agenda item, she invited 
delegations to provide up to date information about compliance efforts and to focus on new 
developments, suggestions and ideas on progress towards the resolution of disputes. She also 
reminded delegations that, as provided for in  Rule 27 of the Rules of Procedure for DSB meetings: 
"[r]epresentatives should make every effort to avoid the repetition of a full debate at each meeting 
on any issue that has already been fully debated in the past and on which there appears to have 
been n o change in Members' positions already on record".  
A.  United  States – Anti-dumping measures on certain hot -rolled steel products from 
Japan: Status report by the United  States (WT/DS184/15/Add.183)  
1.2.  The Chairperson  drew attention to document WT/DS184/15/A dd.183, which contained the 
status report by the United States on progress in the implementation of the 
DSB's  recommendations in the case "US – Hot-Rolled Steel".  WT/DSB/M/413  
 
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  1.3.  The representative of the United  States  said that the United States had provided a status 
report in this dispute on 17  May 2018, in accordance with Article  21.6 of the DSU. The 
United  States had addressed the DSB's recommendations and rulings with respect to the 
calculation of anti -dumping margins in the hot -rolled steel anti -dumping duty investig ation at 
issue. With respect to the recommendations and rulings of the DSB that had yet to be addressed, 
the US  Administration would work with the US  Congress with respect to appropriate statutory 
measures that would resolve this matter.  
1.4.  The representative  of Japan  said that his country thanked the United  States for the latest 
status report and the statement made at the present meeting. Japan, once again, called on the 
United  States to fully implement the DSB's recommendations and rulings so as to resolve t his 
matter.  
1.5.  The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
B.  United  States – Section 110(5) of the US  Copyright Act: Status report by the 
United  States (WT/DS160/24/Add.158)  
1.6.  The Chairperson  drew atten tion to document WT/DS160/24/Add.158, which contained the 
status report by the United  States on progress in the implementation of the 
DSB's  recommendations in the case "US – Section 110(5) Copyright Act".  
1.7.  The representative of the United  States  said that the United States had provided a status 
report in this dispute on 17  May 2018, in accordance with Article  21.6 of the DSU. The 
US Administration would continue to confer with the European  Union, and to work closely with the 
US Congress, in order  to reach a mutually satisfactory resolution of this matter.  
1.8.  The representative of the European  Union  said that his delegation thanked the United  States 
for its status report and its statement made at the present meeting. The EU referred to its 
previous st atements and reiterated that it would like to resolve this case as soon as possible.  
1.9.  The representative of China  said that his country noted that the United States had submitted 
the 159th status report without demonstrating any progress in the implementati on of the 
DSB's  recommendations and rulings. This status report was substantively not different from the 
first status report, which had been submitted by the United States in November  2004. More than 
ten years had passed and Members were still waiting. The  WTO Membership was waiting for the 
US implementation. China was interested in the reasons and the intent behind the US continued 
non-compliance. China reminded the WTO Membership that Section  110(5) of the US  Copyright 
Act, which had been found by the Pan el to be inconsistent with the requirements of the 
Berne  Convention and the TRIPS  Agreement, was still in effect. The United States failed, for more 
than a decade, to provide intellectual property right holders with the minimum standards of 
protection as r equired by the TRIPS  Agreement. The United States remained the only WTO 
Member who failed to comply with the DSB's recommendations and rulings under the 
TRIPS  Agreement, long after the expiry of the reasonable period of time. China believed that no 
WTO Mem ber should be above WTO rules to which WTO Members had explicitly agreed. China 
urged the United States to honour its obligations under the DSU and the TRIPS  Agreement by 
implementing as soon as possible the DSB's recommendations and rulings in this disput e. 
1.10.   The representative of the United  States  said that by intervening under this Agenda item, 
China attempted to give the appearance of concern for intellectual property rights. Under Agenda 
item 4, the United  States  would discuss the significant and trade d istorting shortcomings in China's 
treatment of intellectual property. For now, the United States could say that, as the companies 
and innovators of China and other WTO Members well knew, the intellectual property protection 
that the United  States provided within its own territory equalled or surpassed that of any other 
WTO Member. Indeed, as China also well knew, none of the damaging technology transfer 
practices of China that were at issue under Agenda item  4 were practices that Chinese companies 
or innova tors faced in the United  States.  WT/DSB/M/413  
 
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  1.11.   The representative of China  said that, as at pr evious DSB meetings, the United  States 
intervened, once again, to divert the focus from this Agenda item. The matter at issue under this 
Agenda ite m was whether or not the Unit ed States had implemented the DSB's recommendations 
and rulings. The answer was negative. As always, China looked forward to an explanation by the 
United  States regarding the reason or reasons for its continued non -compliance, which had already 
lasted more  than a decade.  
1.12.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
C.  European  Communities – Measures affecting the approval and marketing of biotech 
products: Status report by the European  Union (WT/DS291 /37/Add.121)  
1.13.   The Chairperson  drew attention to document WT/DS291/37/Add.121, which contained the 
status report by the European Union on progress in the implementation of the 
DSB's  recommendations in the case "EC – Approval and Marketing of Biotech Products ". 
1.14.   The representative of the European  Union  said that his delegation continued to progress 
with the authorizations where the European Food Safety Authority had finalised its scientific 
opinion and had concluded that there were no safety concerns. On 23  April 2018, two draft 
authorizations had been presented for vote to the member States committee, one for a renewal of 
genetically modified maize1 and one new authorization for genetically modified maize2. As the 
votes resulted in "no  opinion", the draft measures would be submitted for a vote to the Ap peal 
Committee in  May 2018. While the EU continued to be committed to acting in line with its WTO 
obligations, the EU also recalled that the EU approval system was not covered by the 
DSB's  recommendations and rulings.  
1.15.   The representative of the United  State s said that the United States thanked the EU for its 
status report and its statement at the present meeting. The United  States continued to have 
concerns with the EU's approval of biotech products. The United States continued to see 
prolonged, unpredictabl e and unexplained delays at every stage of the approval process. The 
delays had affected the products that had been previously approved by the EU, and continued to 
affect the dozens of applications that had been awaiting approval for months or years. Even when 
the EU finally approved a biotech product, the EU had facilitated the ability of individual EU 
member States to impose bans on the supposedly approved product. As the United  States had 
noted at previous DSB meetings, the EU had adopted legislation tha t permitted EU member States 
to "opt -out" of certain approvals, even where the European Food Safety Authority had concluded 
that the product was safe. In its intervention at the  April 2018 DSB meeting, the EU's response to 
the United States' concerns with the "opt -out" legislation3 had been that the EU had enacted this 
legislation after the adoption of the DSB's recommendations in this dispute. The EU's response was 
particularly unconvincing. The EU surely did not take the position that measures serving to move a 
WTO Member further out of compliance were somehow irrelevant to the DSB's surveillance of a 
Member's implementation of a DSB recommendation to bring WTO -inconsistent measures into 
compliance with WTO rules. The EU's opt -out legislation permitted EU member States to restrict, 
for non -scientific reasons, certain uses of EU -authorized biotech products in their territories. At 
least seventeen member States, as well as certain regions within EU member States, had 
submitted requests to opt -out of EU approv als. The United  States again urged the EU to ensure 
that all of its measures affecting the approval of biotech products, including measures adopted by 
individual EU member States, were supported by scientific evidence, and that decisions were taken 
without  undue delay.  
1.16.   The representative of the European  Union  said that the United States had referred to the 
EU's opt-out legislation. The EU understood that the United States referred to the so -called 
"opt-out Directive". The EU noted that the said "opt -out Dir ective" was not covered by the DSB's  
recommendations and rulings. As provided under the Directive, the applicants had accepted to 
reduce the geographical scope of their cultivation applications for specific EU member States. As a 
result, no EU member State  had imposed any ban. Moreover, under the terms of the Directive, an 
EU member State could adopt measures restricting or prohibiting cultivation only if such measures 
                                                
1 Maize GA21.  
2 Maize  1507 × 59122 × MON 810 × NK603.  
3 EU Directive 2015/412.  WT/DSB/M/413  
 
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  were in line with EU law and if such measures were reasoned, proportional, non -discrimina tory and 
based on compelling grounds.  
1.17.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
D.  United  States – Anti-dumping and countervailing measures on large residential 
washers from Korea: Status report b y the United  States (WT/DS464/17/Add.5)  
1.18.   The Chairperson  drew attention to document WT/DS464/17/Add.5, which contained the 
status report by the United  States on progress in the implementation of the 
DSB's  recommendations in the case "US – Washing Machines".  
1.19.   The representative of the United  States  said that the United States had provided a status 
report in this dispute on 17  May 2018, in accordance with Article  21.6 of the DSU. On 
15 December  2017, the US Trade Representative had requested that the US  Departm ent of 
Commerce make a determination under Section  129 of the Uruguay Round Agreements Act to 
address the DSB's  recommendations relating to the Department's countervailing duty investigation 
of washers from Korea. On 18  December 2017, the Department of Com merce had initiated a 
proceeding to make such determination. Following initiation, Commerce had issued initial and 
supplemental questionnaires seeking additional information. On 4  April 2018, Commerce had 
issued a preliminary determination revising certain  aspects of its original determination. 
Specifically, Commerce had revised the analysis underlying the CVD determination, as it pertained 
to certain tax credit programs, in accordance with findings that had been adopted by the DSB. 
Following issuance of th e preliminary determination, Commerce had provided interested parties 
with the opportunity to submit comments on the issues and analysis in the preliminary 
determination. Interested parties then had had an opportunity to provide rebuttal comments. 
Commerce  was reviewing the comments and rebuttal comments for purposes of preparing a final 
determination. The United  States continued to consult with interested parties on options to 
address the recommendations of the DSB relating to anti -dumping measures challen ged in this 
dispute.  
1.20.   The representative of Korea  said that his country thanked the United  States for its latest 
status report and statement at the present meeting. Korea noted that the United  States had taken 
steps to revise its countervailing duty determ ination by issuing its preliminary determination on 
4 April 2018, however, it had some concerns about the results of the preliminary determination, 
which Korea believed did not properly address the DSB's recommendations and rulings. At the 
same time, Korea  was deeply concerned that, until now, there was barely any development in the 
US implementation efforts regarding the anti -dumping measures at issue, more than 20  months 
after the adoption of the Panel and Appellate Body reports in this dispute. In this r egard, Korea, 
once again, urged the United  States to faithfully implement the DSB's  recommendations and 
rulings in this dispute to fully comply with its obligations under the covered agreements.  
1.21.   The representative of Canada  said that his country was concer ned that the United  States 
had not implemented the DSB's recommendations and rulings in this dispute. In particular, Canada 
was deeply disappointed that, despite the expiry of the reasonable period of time, the 
United  States continued to collect cash depos its from Canadian exporters based on a methodology 
that had been found to be "as such" inconsistent with WTO obligations in this dispute.  
1.22.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
2  UNITED  STATES – CONTINUED DU MPING AND SUBSIDY OF FSET ACT OF 2000: 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE  DSB 
A.  Statement by the European  Union  
2.1.  The Chairperson  said that this item was on the Agenda of the present meeting at the request 
of the European  Union and invited the representative of the EU to speak.  WT/DSB/M/413  
 
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  2.2.  The representative of the European  Union  said that his delegation requested, once again, that 
the United  States stop transferring anti -dumping and countervailing duties to the US  industry. 
Every disbursement that still took place was clearly an act of non -compliance with the 
DSB's  recommendations and rulings. The EU renewed its call on the United  States to abide by its 
clear obligation under Article  21.6 of the DSU to submit status reports regardi ng the US 
implementation in this dispute. The EU would continue to put this point on the Agenda as long as 
the United States had not implemented the WTO ruling.  
2.3.  The representative of Canada  said that his country thanked the EU for having placed this 
item o n the DSB Agenda. Canada shared the EU's view that the Byrd Amendment should remain 
under surveillance by the DSB until the United States stopped its application.  
2.4.  The representative of Brazil  said that his country, a s an original party to the Byrd 
Amendmen t dispute, thanked the EU, once again, for keeping this item on the DSB Agenda. 
Despite that more than 15  years had passed since the DSB's recommendations in this dispute and 
more than 12  years had passed since the enactment of the Deficit Reduction Act, w hich had 
repealed the Amendment at issue, millions of dollars' worth of anti -dumping and countervailing 
duties applied to Brazilian and other WTO Members' exports, were still illegally disbursed to 
US domestic petitioners. Brazil called on the United  State s to fully comply with the 
DSB's  recommendations and rulings in this dispute.  
2.5.  The representative of the United  States  said that, as the United States had noted at previous 
DSB meetings, the Deficit Reduction Act, which included a provision repealing the C ontinued 
Dumping and Subsidy Offset Act of 2000, had been enacted into law in February  2006. 
Accordingly, the United  States had taken all actions necessary to implement the 
DSB's  recommendations and rulings in these disputes. The United States recalled, fu rthermore, 
that the EU had acknowledged that the Deficit Reduction Act did not permit the distribution of 
duties collected on goods entered after 1  October  2007, more than 10  years ago. With respect to 
the EU's request for status reports in this matter, as  the United States had already explained at 
previous DSB meetings, there was no obligation under the DSU to provide further status reports 
once a Member announced that it had implemented the DSB recommendations and rulings, 
regardless of whether the compla ining party disagreed about compliance. As the United States had 
noted many times previously, the EU had demonstrated repeatedly that it shared this 
understanding, at least when it was the responding party in a dispute.  
2.6.  Once again, this month the EU had p rovided no status report for disputes in which there was 
a disagreement between the parties on the EU's compliance. In fact, while the EU had put on the 
Agenda of the present meeting an item relating to the "EC and Certain Member States – Large 
Civil Aircr aft" dispute (DS316), it had not submitted a status report despite the US view that the 
EU had not complied in that dispute, a view that had been confirmed by two  sets of conclusions 
that the United  States  would discuss shortly. Finally, the United States noted the EU's recent 
announcement that it would maintain its suspension of concessions on US goods at a very low 
level. This was regrettable, especially given our close collaboration generally. The United  States 
continued to review the action by the EU an d would not accept any characterization of such 
continued countermeasures – no matter how small – as consistent with the DSB's authorization. 
The United States also took note of Canada's support for the EU's decision to place this item on the 
DSB Agenda  of the present meeting . In light of Canada's position, the US would expect Canada to 
object to the failure by a responding Member to place on the DSB Agenda any dispute where 
Canada considered that Member not to be in compliance. That situation could include  "China – 
Cellulose Pulp"  (DS483). Based on Canada's statement under this item, the United  States 
observed that the decision by Canada not to place its dispute with China on the DSB Agenda, or 
object to that failure, could be understood as agreement with a WTO Member's claim of 
compliance . The United States asked whether it should underst and that  to be the implication of 
Canada's statement at the present meeting.  
2.7.  The representative of the European  Union  said that the United States had mentioned that the 
EU had failed to provide status reports in one or more disputes in which the EU was involved. The 
EU disagreed with that statement. The EU had provided status reports for all disputes, in which the 
EU was involved, at the present meeting, this was only one, n amely "EC – Approval and Marketing 
of Biotech Pro ducts" (DS291). The United  States had made a reference to "EC and Certain Member 
States – Large Civil Aircraft" (DS316). As the EU had mentioned before, there was a difference 
between the mentioned case and the case that the DSB was discussing under the present Agenda WT/DSB/M/413  
 
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  item. In the present case, the dispute had been adjudicated and there were no further compliance 
proceedings pending. With regard to "EC and Certain Member States – Large Civil Aircraft" 
(DS316) , the DSB would have a more detailed discussion at the next Agenda item.  
2.8.  The representative of Canada  said that, contrary to the suggestion by the United  States, 
Canada did not agree that China's measures taken to comply in "China – Cellulose Pulp" (DS483)  
had brought China into compliance. In this regard, Canada and China had jointly notified a 
sequencing agreement to the DSB recently. Canada would initiate compliance proceedings in this 
dispute if and when it deemed it appropriate.  
2.9.  The DSB took note  of the statements.  
3  EUROPEAN  COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN LARGE CIVIL  AIRCRAFT – COMMUNIC ATION BY THE EUROPEA N UNION 
(WT/DS316/34)  
3.1.  The Chairperson  said that this item was on the Agenda of the present meeting at the request 
of the European Union, and drew attention to the communication from the EU contained in 
document WT/DS316/34. She then invited the representative of the EU to speak.  
3.2.  The representative of the European  Union  said that his delegation referred to  its 
communic ation dated 17  May 2018, which had been circulated to all WTO Members in advance of 
the present meeting. By means of that communication, the EU informed the DSB that it had taken 
appropriate steps to bring its measures fully into conformity with its WTO ob ligations, and to 
comply with the recommendations and rulings in this dispute. Specifically, among the measures, 
which had been notified by the EU, were contractual changes to the loan terms for the  A380 and 
the A350XWB  aircraft models, where it had been found that the repayable loans, which had been 
provided to Airbus for these aircrafts, had not sufficiently reflected market conditions. The EU 
measures, contained in the compliance communication, included contractual cha nges to these loan 
terms in order to bring them in line with market benchmarks. The EU stood ready to engage with 
the United  States on the basis of the EU's compliance communication to close the aircrafts -chapter 
at long last. Finally, the EU expected the adoption of the reports of the Appellate Body and the 
Panel at the present meeting , under Agenda item  8, in line with the rules applicable to all 
Appellate Body reports, pursuant to Article  17.14 of the DSU, through the procedure known as 
"negative consens us". 
3.3.  The representative of the United  States  said that the United States was surprised to receive 
this communication only when circulated to all WTO Members. Given that the United  States had 
brought this dispute, and would be entitled to take further steps  under WTO rules once the 
compliance reports were adopted later in this meeting, the United States would have thought that 
the EU would contact the United States directly if it had information relevant to resolving the 
dispute. The EU's failure to communic ate directly with the United States might therefore 
communicate a lack of seriousness about resolving this dispute. It would be for the EU and its 
member States to confirm or disprove that impression. Based on the US review since 
WTO Members had received t his communication, the EU document did not reflect new 
developments that might somehow resolve this long -standing dispute. To the contrary, over 
six years ago, back in December  2011, the EU had submitted a similar document.4 
That 2011 document had itemized  36 so -called "steps" that the EU had characterized as actions 
taken to come into compliance with the original WTO findings. The compliance panel, however, 
had found that 34  of these supposed steps were not even actions at all.5 In short, the 36  "steps" 
that had been listed in the 2011 document certainly had not brought the EU into compliance with 
the recommendations of the DSB. The present  document identified 18  so-called "steps ". Most of 
them were essentially the same as the items listed in the 2011  docum ent. The Reports proposed 
for adoption at the present meeting had found the EU's supposed "steps" had done nothing to end 
the inconsistency with Articles  5 and  6.3 of the SCM  Agreement. For instance, in the present  
document, the EU characterized as a "meas ure taken to comply" the "attenuation, through the 
passage of time and events that occurred during that time" of a causal link. The United  States 
failed to see how anyone could characterize this as a "step", let alone a "measure taken to 
comply". Indeed, t he EU itself seemed to have difficulty deciding how to characterize it – the EU 
                                                
4 WT/DS 316/17.  
5 "EC and Certain Member States  – Large Civil Aircraft " (21.5) (Panel),  para. 6.42.  WT/DSB/M/413  
 
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  document alternated between "step", "measure taken to comply" and "measure that constitutes 
appropriate step". There were a handful of new assertions, namely that the EU member  States had 
renegotiated certain financing packages to reflect "a contemporaneous market benchmark". But 
these assertions were so vague, they indicated nothing about what, if anything, may have been 
done.  
3.4.  The EU had been arguing for a decade that its finan cing of Airbus had reflected market 
benchmarks. Four sets of dispute reports had disagreed with that assertion. In this light, it was 
difficult to give any credence to the EU's latest assertions. Indeed, in the past, the EU had used 
these sorts of vague as sertions to cloak non -compliance with its WTO obligations. The 
United  States remained ready to hold serious discussions with the EU with the goal of reaching a 
mutually agreed solution. But this would require the EU to communicate directly and candidly wit h 
the United  States, rather than indirectly and vaguely through a communication to all WTO 
Members. The United States said that it would be regrettable if this document signalled not a 
desire to fix EU contraventions of WTO rules, but rather an intention t o prolon g this already 
lengthy dispute.  
3.5.  The DSB took note  of the statements.  
4  CHINA'S TECHNOLOGY T RANSFER POLICIES  
A.  Statement by the United  States  
4.1.  The Chairperson  said that this item was on the Agenda of the present meeting at the request 
of the United  States and invited the representative  of the United  States to speak.  
4.2.  The representative of the United  States  said that, as Members were aware, at the past 
two monthl y DSB meetings, China had raised the US investigation of China's technology transfer 
policies. As Members were also aware, the United  States had initiated a WTO dispute in relation to 
one aspect of those technology transfer policies.6 The problems, however , were much broader than 
the matters covered by the dispute, and ran contrary to basic notions of fairness that underlay the 
multilateral trading system. The United States had issued a factual report that detailed China's 
distortive policies on technology transfer in March  2018. Two  months had passed, and China had 
yet to provide any evidence to refute the Report's facts or conclusions. At the last DSB meeting, 
China had asserted that the findings in the US report were "baseless". For China to say this was 
unfortunate. In fact, the US  findings were explained in great detail in that 200 -page report. The 
report was publicly available on the USTR website, and Members were encouraged to review it.7 
The report analysed four  particular aspects of China's distortiv e policies on technology transfer. At 
the present meeting, the United  States would respond to China's assertions by summarizing one 
aspect of China's policies that had been covered in the investigation. China's state -centered, 
non-market policies on trade and technology transfer affected all WTO Members. The policies 
created the legal conditions for Chinese economic actors to effectively coerce foreign companies to 
transfer technology to Chinese firms on non -market terms. If left unchecked, the commercial 
effect of these policies would erode all of our economies and our long -term competitiveness. 
Central pillars of China's technology transfer regime were China's foreign ownership restrictions, 
such as joint venture requirements and foreign equity limitations , and various administrative 
review and licensing processes. In combination, these policies required or pressured technology 
transfer from foreign companies. The foreign ownership restrictions prohibited foreign investors 
from operating in certain industri es unless they partnered with a Chinese company, and in some 
cases, unless the Chinese partner was the controlling shareholder.8 
4.3.  These requirements precluded foreign companies from entering the market on their own 
terms, and laid the foundation for China t o coerce the transfer of technology. The United  States 
documented in the factual report how this co -opting of foreign technology was accomplished. 
When companies negotiated the terms of the joint venture, the foreign side may be asked  – or 
required – to transfer its technology in order to finalize the partnership. Especially in instances 
                                                
6 "China – Certain Measures Concerning the Protection of Intellectual Property Rights " (WT/DS542/1).  
7 The report is available at: https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF . 
8 Office of the United  States Trade Representative, Findings of the Investigation into China's Acts, 
Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section  301 
of the Trade Act of 1947, at 23 -35. WT/DSB/M/413  
 
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  where the Chinese partner was a state -owned or state -directed company, foreign companies had 
limited leverage in the negotiation if they wished to access the market. This t ype of technology 
transfer was often an unwritten rule for market access.9 China argued that foreign companies 
willingly enter ed into these agreements. China's tilting of the commercial playing field, however, 
created a lose -lose choice for foreign compani es: they must either transfer their technology to the 
new China -based joint venture, or they must cede access to one of the world's fastest -growing 
markets, thus harming both their short term growth and their long -term competitiveness. China 
also used its administrative licensing and approvals processes to coerce technology transfer in 
exchange for the numerous approvals needed to establish and operate a business in China. 
Foreign investment in China required obtaining numerous government approvals dependin g on the 
terms of the investment and the industry and location in which the investment occurred. At each 
stage of the approval process, vaguely worded provisions provided government officials with 
significant discretion to impose technology transfer requir ements or otherwise pursue China's 
industrial policy objectives.10 
4.4.  One of the US leading industry associations had described how the Chinese government used 
its discretion in the review process to apply vague and unwritten rules in a selective and 
non-transparent manner as follows: "The relatively opaque nature of the inbound FDI approval 
processes enable s China's investment approval authorities to favor domestic competitors over 
foreign investors, should they so desire, without leaving a paper trail of disc riminatory written 
regulations  …. Foreign investors ha ve reported this favoritism occurring in two  ways: (i) through 
the application of vaguely worded or unpublished rules or requirements in ways that discriminate 
against foreign investors; and (ii)  throug h the imposition of deal -specific conditions that go beyond 
any written legal requirements ".11 This was not the rule of law. In fact, it was China's laws 
themselves that enabled this coercion. Fundamentally, China had made the decision to engage in a 
systematic, state -directed, and non -market pursuit of other Members' cutting -edge technology in 
service of China's industrial policy. This was not fair. This was not how Chinese companies or 
individuals were treated when they went out to engage in activi ty in other markets. The 
United  States had only touched on one aspect of China's technology transfer policies of concern. 
China needed to re -evaluate and undertake a serious change in its policies of seeking development 
at the e xpense of its trading partners . 
4.5.  The representative of China  said that first of all, the DSB was not the suitable forum to 
discuss Members' trade policies in specific sectors. Before moving to the substance, China would 
briefly comment on the relevance of this Agenda item for the  DSB, a s proposed by the 
United  States. As specified in Article  2.1 of the DSU, the DSB was established to administer the 
Understanding on Rules and Procedures Governing the Settlement of Disputes, as well as the 
consultation and dispute settlement provisions of the covered agreements. The technology transfer 
policies of China were a broad issue in nature and not the subject of dispute settlement 
proceedings, which had been initiated by the United States. Hence, this issue was out of the scope 
of the DSB's functio ns. The DSB was not a suitable forum to discuss such issue. China questioned 
the legal basis for inclusion of this item on the DSB Agenda. Moreover, at t he last DSB meeting on 
27 April 2018, the United States had clearly stated that three  categories of Chi na's policies, 
including the technology transfer policies, under Section  301 investigation, did not appear to 
implicate specific WTO obligations. Therefore, the US request to include item  4 on the DSB Agenda 
demonstrated either a self -contradictory positio n or a change of position. If it was the latter, 
namely that the United States had decided to abandon its unilateral position and return to 
multilateralism, China would welcome such a change. Although China had serious doubts on the 
appropriateness to incl ude item  4 on the DSB Agenda of the present meeting, China had chosen 
not to block the adoption of the Agenda. China emphasized, however, that the inclusion should not 
constitute a precedent, and could not be understood as consensus among Members to includ e 
similar issues on the DSB Agenda in future. China requested that the DSB take note of China's 
position.  
                                                
9 Office of the United  States Trade Representative, Findings of the Investi gation into China's Acts, 
Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section  301 
of the Trade Act of 1947, at 22 -23. 
10 Office of the United  States Trade Representative, Findings of the Investigation into China's Acts, 
Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section  301 
of the Trade Act of 1947, at 35 -43. 
11 Office of the United  States Trade Representative, Findings of the Investigation into Ch ina's Acts, 
Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section  301 
of the Trade Act of 1947, at 37.  WT/DSB/M/413  
 
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  4.6.  China said that before responding to the questions raised by the United States with regard to 
China's technology transfer policies, China wished to u nderscore a few points. First, China believed 
that the DSB was facing many more pressing issues that needed to be discussed and resolved, in 
particular, the impasse of the selection of new Appellate Body members. This issue required the 
most urgent action.  The issue of technology transfer raised by the United States only diverted 
Members' attention. Second, it seemed that the United  States had placed itself in the position of a 
judge to "adjudicate" the trade policies of other WTO Members, but no matter how  many pages of  
a report the United  States would draft, it would never change th e nature of unilateralism of US  
Section  301 measures.  Third, irrespective of the US concern, as long as the United States took 
measures such as tariff retaliation, the United St ates would inevitably be subject to the jurisdiction 
of the WTO and would inevitably violate WTO rules. As Mr.  Frederick  Abbott, a professor of 
international law in the United  States had recently pointed out in his article: "The retaliatory tariff 
measures  that the United States proposed would clearly violate WTO norms. They would be 
inconsistent with MFN treatment under Article  I of GATT 1994 as they apply to China only. Almost 
certainly, they would be inconsistent with US  commitments on bou nd tariffs unde r Article  II of the  
GATT  1994. As the US  tariff measures would be imposed without the authorization of the DSB, 
they would be inconsistent with US  obligations under the DSU". According to the US view, China 
forced US companies to transfer technologies by i mposing joint venture requirements, foreign 
equity limitations and administrative licensing procedures. But the fact was that nothing in these 
regulatory measures required technology transfer from foreign companies. These two things were 
entirely different  animals like a deer and a horse.  
4.7.  China referred to a following ancient Chinese fable. He said that once upon a time, there was 
a powerful minister in the Qin Dynasty. One  day, this minister worked out a way to test how many 
people in the court would dare to challenge him. He led a deer to the court and said, "[t]his is a 
horse". The Emperor did not believe him and asked around, "[i]s this a deer or a horse?" Some 
ministers, out of fear, said it was a horse. Other ministers who were honest said it was a dee r. 
Later, those who called the deer a deer were persecuted by that powerful minister.  No matter how 
the story would end, the truth was, "a deer is a deer", it could never turn into a horse, and the 
Minister was remembered fo r his arrogance and ignorance.  
4.8.  China then turned to the findings of the US Section  301 report, demonstrating how the said 
report was trying to turn "a deer into a horse". This was illustrated through the US approach in 
determining alleged forced technology transfer policies in the repor t. First, on page  24 of the said 
report, it was stated that "[a]ccording to submissions and testimony in this investigation, China's 
imposition of [joint venture requirements and foreign equity limitations] … lays the foundation for 
the Chinese government to require or pressure technology transfer". Second, on page  26, the 
report listed the evidence of joint venture requirements, all of which were explicitly or implicitly 
allowed by the WTO, like the ones in the telecommunication and banking services sector s, which 
were in accordance with China's schedules, annexed to China's Protocol of Accession. Third, on 
page 45, the report concluded that "China's technology transfer regime is unfair, inequitable". At 
the present meeting, the United States referred to it  as forced technology transfer. To sum up, the 
US logic appeared to be the following: first,  the US companies believed that joint venture 
requirements constituted forced technology transfers and the USTR agreed, without providing 
evidence of a linkage betw een the  two in the said report, and since China appeared to have joint 
venture requirements, it had, thus, forced technology transfer policies. To follow the logic of 
"presumption of guilt", which prevailed throughout the entire said report, on page  39, fo r example, 
the report accepted a US association's speculation with regard to China's telemedicine policy as a 
fact and evidence. On page  28, the report attributed private infringement of trade secrets to the 
Chinese Government, while ignoring the fact that  this infringement had actually been penalized by 
a Chinese court. Moreover, the whole Section  IV of the report attributed pure market transactions 
of Chinese companies in overseas mergers and acquisitions as conspired acts of the Chinese 
Government. As a matter of fact, in the dozens of submissions, which had been made by US 
companies and associations, not a single Chinese regulation had been identified, which contained a 
forced technology transfer requirement, and none of the submissions had provided any tangible 
evidence that could demonstrate that the Chinese Government had actually forced foreign 
companies to transfer technology. The Section  301 report relied heavily on unverifiable 
anonymous surveys. However, even in those anonymous surveys, most respo ndents had denied 
that any forced technology transfer had taken place. China provided another example, and 
referred to the determination in Section  IV of the report, whereby China allegedly aimed to acquire 
foreign technology through outbound investments, China's "International Industrial Capacity 
Cooperation Policy" was indicated as evidence in this regard.  WT/DSB/M/413  
 
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  4.9.  However, the "International Industrial Capacity Cooperation Policy" applied to the industries 
where China had a comparative advantage, such as textile,  construction materials, railway 
equipment and electric infrastructure. The outbound investment under this initiative was to share 
and disseminate China's advanced technologies, rather than acquiring any technology from others. 
One more example, with respe ct to a submission made by Rohdium Group, a US consulting firm, 
the USTR selectively had used only the part that supported its "presumed conclusion" that 
investment in the United  States was targeted at acquiring technology and transferring it back to 
China . However, the report had intentionally ignored the following statements in the same 
submission, i.e. the magnitude of Chinese investment in the United  States was in line with the 
expectations of typical growth in outbound direct investment for nations at China's stage of 
economic development: there was no simple correlation between Chinese industrial policy and the 
investment in the United  States. China asked why the USTR had chosen to ignore these facts in 
the same submission. One reasonable answer could be that these facts would lead to the opposite 
conclusion. In the Section 301 investigation, the USTR had attempted to exaggerate the 
complaints of a small number of companies and associations, using it as "public opinion" and, thus, 
as a basis to take tou gh policy decisions vis -à-vis China. However, the record showed that most 
stakeholders who had made submissions to the USTR, including the US  Chamber of Commerce, 
the US China Business Council, the Software Alliance, the Pharmaceutical Research and 
Manufac turers of America, the Semiconductor Industry Association, the Computing Technology 
Industry Association, the Consumer Technology Association and the American Apparel and 
Footwear Association, they all had indicated in their submissions that the economic a nd trade 
frictions and differences between the United  States and China should be resolved through dialogue 
and consultations in accordance with WTO rules. Most stakeholders had provided positive 
comments on the efforts and achievements of the Chinese Gover nment with regard to in tellectual 
property protection.  
4.10.   China said that there was no forced technology transfer in China. With regard to China's 
technology transfer policy, China wished to make three clarifications. First, technology transfer 
was a normal c ommercial activity, and normal commercial activities were not mandatory 
government actions. Companies needed to commercialize their innovations. Otherwise, they could 
not pay off the investment that had gone into developing the innovations. As the most dev eloped 
country in the world, the United  States was the largest beneficiary of technology transfer. China, 
as a developing country, was one of the main export destinations of US technology. China's law 
allowed foreign investors to bring technologies as a ty pe of investment into joint ventures. Chinese 
companies welcomed the introduction of new technologies and paid fair and reasonable royalties to 
use them, which accounted for the US companies' profits in technology transfer. China, thus, 
emphasized that the  transfer of technology from US companies to China was normal business. It 
was done based on mutually agreed terms between businesses, and such transactions represented 
the companies' will. The principles of commercial considerations, contractual freedom a nd market 
competition were fully observed in these transactions. In fact, many US companies had made 
great profits by establishing joint ventures in China, with profits earned in China exceeding their 
profits  earned in the US home market.  
4.11.   Second, WTO Memb ers had legitimate rights to make reservations on market access, and 
these reservations were listed in the Members' WTO commitments. Market access and forced 
technology transfer were "two different animals". The main targets of the Section 301 report were 
China's joint ventures and cooperation requirements, foreign ownership restrictions and 
administrative review and licensing procedures. These were essentially market access regulations 
and were not linked to forced technology transfers. There were indeed j oint venture requirements 
and foreign ownership restrictions in certain areas in China, but they were the result of 
negotiations between China and other WTO Members, including the United States, and were fully 
in line with WTO rules and China's WTO commitm ents. Market access reservations for foreign 
investors were common practices by most WTO Members, including the United States. Examples 
for this were administrative review and licensing procedures. All WTO Members would provide their 
government agencies in  administrative review and licensing procedures with certain levels of 
discretion. This was a common feature of public administrative systems of most WTO Members. 
Nevertheless, China had continuously deepened the reform of its administrative review and 
licensing procedures, and had promoted the streamlining of government functions, delegating 
powers and improving regulations. The United States' accusation that China had abused the joint 
venture requirements, foreign ownership restrictions and administrative  discretion to achieve 
forced technology transfers, was neither based on evidence, nor convincing.  WT/DSB/M/413  
 
- 12 - 
 
  4.12.   Third, the original purpose of the protection of intellectual property rights was to promote 
the transfer and dissemination of technology and should not be abused, nor should it be a tool for 
trade protectionism. In fact, the US Section  301 investigations had no evidence that China's law 
had stipulated that foreign companies should transfer technologies to Chinese partners, nor had it 
provided evidence on the  alleged violation of China's WTO commitment not to use the transfer of 
technology as a prerequisite for foreign investment to access its market. The Section  301 
investigations had generalized and exaggerated the concept of forced technology transfer, so a s to 
intentionally mix up normal commercial activities with government actions. The United  States was 
a global leader in innovation, but innovation was not unique to the United  States. Chinese 
companies were advanced in artificial intelligence, financial t echnology and robotics. China's 
progress and achievements in innovation were based on the diligence and entrepreneurship of the 
Chinese people, investment in education and research, and efforts to improve the protection of 
intellectual property. It was not  the result of alleged forced technology transfer. Further, 
strengthening the protection of intellectual property rights served not only the need to expand 
China's openness to the world, but also the need for China's own development. Intellectual 
property and technology should serve as a bridge for innovation and cooperation among countries 
around the world, contributing to the goal of promoting technological innovation and technology 
transfer and dissemination, as had been stipulated in the WTO TRIPS  Agree ment, and enabling the 
benefits of innovation to be shared by all humankind. Intellectual property could neither be used 
as a tool for trade protectionism, nor could it be used as an obstacle to contain the development of 
other WTO Members. As China had st ated at the May  2018 General Council meeting with regard to 
the Section  301 investigation, the United  States had essentially sought to obtain free market 
access from China. If that was the case, it could only be achieved through bilateral or multilateral 
negotiations, not by blatant threat ening with unilateral measures.  
4.13.   China said that it would safeguard its rights in accordance with WTO rules. China noted that 
the United  States had initiated WTO dispute settlement procedures with respect to China's 
measure s regarding the conditions for technology licensing. This specific issue was within the 
DSU's  mandate. China had always respected WTO rules and supported the multilateral trading 
system, and China would not hesitate to use WTO rules to safegu ard its own le gitimate rights.  
4.14.   The representative of the European  Union  said that his delegation shared both, the concerns 
expressed by the United States  and the description of the problem regarding China's technology 
transfer policies. Foreign ownership restrictions, opaque administrative procedures, vague and 
unclear rules that left discretionary margins to the administration, discriminatory laws and 
practices, lack of transparency and consistency, were all elements that created the conditions for 
the Chinese Governme nt and State -influenced actors to pressure foreign companies to transfer 
their technology to Chinese entities. Foreign investors knew that the transfer of technology 
represented an unavoidable requirement, which would have to be met, if they wished to acce ss the 
Chinese market. Most of them had no choice, but to accept these conditions if they wished to 
survive in the global market. Foregoing the Chinese market was simply not an option, as this 
would mean undermining their short -term growth and profitabilit y to the advantage of 
competitors. Typically foreign companies were pressured into transferring their technology through 
informal and non -written practices that were steered by an internal eco -system, which had been 
developed through top -down education, st rategic planning and industrial policy. Companies were 
afraid to complain openly about this situation. They faced a tangible and concrete risk of retaliation 
to their businesses, and this was a risk they could not afford to take. Having said this, the EU w as 
of the view that there were ways to find solutions to these issues other than resorting to unilateral 
actions that would pose a risk of undermining the multilateral trading system and triggering 
unnecessary trade wars. The EU would therefore not support  any measure, which would be 
contrary to the WTO, and called on the relevant WTO Members to ensure WTO com pliance of their 
trade actions.  
4.15.   The representative of Japan  said that his country referred to its statement made at the 
General Council meeting on 8  May 2018 under Agenda item  6.12 Japan recalled that in that 
statement, it had stated that stronger protection of intellectual property rights and their effective 
enforcement were important. Japan recognized and shared the concerns raised by the 
United  States  regarding the requirement for disclosure of technological information and 
discriminatory licensing practices. Japan also emphasized that no one would benefit from unilateral 
                                                
12 WT/GC/M/172  WT/DSB/M/413  
 
- 13 - 
 
  measures and counter -measures. Furthermore, any trade measure had to be taken in a manner 
consistent with the WTO Agreement.  
4.16.   The representative of Pakistan  said that his country echoed China's view that the DSB was 
not the suitable forum to discuss Members' trade policies in specific sectors. Previously, Pakistan 
had also expressed it s systemic concerns on this matter. Pakistan was of the view that unilateral 
measures could disrupt global trading patterns, not to mention their detrimental impact in 
particular for developing countries. Unilateral action triggered a wave of concerns and fears among 
the global trading community and had the potential to spur a worldwide protectionist reaction from 
other WTO Members, which would in turn lead to dire consequences for the overall global trading 
system. While larger economies could be able to a bsorb the consequent shocks, this could leave 
developing countries in an uncomfortable and difficult situation. As had been mentioned before, 
Pakistan encouraged all WTO Members to continue to work towards trade multilateralism and 
avoid taking steps to re strict free trade. Pakistan believed that this was the only path which would 
benefit all WTO Members, es pecially the smaller economies.  
4.17.   The representative of Chinese  Taipei  said that his delegation had reviewed the Section  301 
report13 and had carefully assessed the facts contained therein, and Chinese Taipei shared the 
US concerns with regard to intellectual property protection and forced technology transfers. All of 
China's trading partners were affected by China's technology transfer  policies. Chinese Taipei was 
of the view that any measures, which had an impact on fairness and the world market, irrespective 
of whether such measures implicated specific WTO obligations, should be properly addressed, 
especially when such measures could result in advancing interest of certain WTO Members at the 
expense of others in a systematic way. Therefore, Chinese Taipei encouraged all WTO Members to 
work together to uphold the spirit and fundamental essence of the TRIPS  Agreement and provide 
effectiv e and adequate protection o f intellectual property rights.  
4.18.   The representative of Brazil  said that as his country had already stated at previous DS B 
meetings, as well as at the 8  May 2018 General Council meeting, Brazil had been following with 
close attenti on the recent actions taken under Section  301 of the Trade Act of  1974. Brazil 
considered that while WTO Members were entitled to implement their trade policies according to 
their national legislation, including by promoting investigations into alleged unl awful practices, any 
actions to remedy such practices should be fully consistent with their obl igations and the 
WTO Agreement.  
4.19.   The representative of  the Bolivarian Republic of Venezuela  said that his country would also 
like to add its voice to the systemic  concerns expressed by previous speakers with regard to the 
application of unilateral measures that were contrary to  the WTO rules and principles.  
4.20.   The DSB took note  of the statements.  
5  UNITED  STATES – ANTI -DUMPING AND COUNTER VAILING DUTIES ON CE RTAIN 
PRODU CTS AND THE USE OF F ACTS AVAILABLE  
A.  Request for the establishment of a panel by the  Republic of  Korea (WT/DS539/6)  
5.1.  The Chairperson  recalled that the DSB had considered this matter at its meeting on 
27 April 2018 and agreed to revert to it. She drew atte ntion to the communication from Korea 
contained in document WT/DS539/6, and invited the re presentative of Korea to speak.  
5.2.  The representative of  the Republic of  Korea  said that, in its panel request, Korea had raised 
its concerns about the use of facts avai lable by the authorities of the United  States in its 
anti-dumping and countervailing duty proceedings vis -à-vis certain products from Korea. 
Subsequently, on 27  April 2018, Korea had requested the establishment of a panel to review this 
matter. As explaine d in its panel request, Korea considered that the US measures, with regard to 
the use of adverse facts available in the challenged anti -dumping and countervailing duty 
proceedings, were inconsistent with the US obligations under the Anti -Dumping Agreement,  the 
                                                
13 Office of the United  States Trade Representative, "Findings of the Investigation in to China's 
Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under 
Section  301 of the Trade Act of 1947" (22  March  2018), available at 
https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF.  WT/DSB/M/413  
 
- 14 - 
 
  SCM Agreement and the relevant provisions of other WTO Agreements. Therefore, Korea was 
requesting, for the second time, the establishment of a panel, wit h standard terms of reference.  
5.3.  The representative of the United  States  said that the United States was disappointed that 
Korea had chosen to move forward with a request for panel establishment. As the United  States 
had explained to Korea, the determinations that had been identified in Korea's request for panel 
establishment were fully consistent with US  obligations under the WTO Agreement. Additionally, as 
the United  States had noted at the April  DSB meeting, Korea sought to challenge certain items 
that were not measures and did not fall within the scope of a dispute settleme nt proceeding. For 
these  reasons, the United States was disappointed that Korea had submitted its pa nel request for 
a second time.  
5.4.  The DSB took note  of the statements and agreed  to establish a panel in accordance with the 
provisions of Article  6 of the DSU  with standard terms of reference.  
5.5.  The representatives of Canada , China , Egypt , the European  Union , India, Japan , Kazakhstan , 
Norway  and the Russian  Federation  reserved their third -party rights to particip ate in the Panel's 
proceedings.  
6  PAKISTAN – ANTI -DUMPING MEASURE S ON BIAXIALLY ORIEN TED POLYPROPYLENE 
FILM FROM THE UNITED  ARAB EMIRATES  
A.  Request for the establishment of a panel by the  United Arab Emirates (WT/DS538/2)  
6.1.  The Chairperson  drew attention to the communication from the United Arab Emir ates 
contained in document WT/DS538/2, and invited the representative of the United Arab Emirates to 
speak.  
6.2.  The representative of the United Arab Emirates  said that, on 24  January  2018, his country 
had requested consultations with Pakistan regarding the di spute: " Pakistan – Anti-Dumping 
Measures on Biaxially Oriented Polypropylene Film from the United Arab Emirates" (DS538) . The 
UAE had engaged in consultations with Pakistan in good faith with a view to reaching a mutually 
satisfactory solution. Unfortunate ly, these consultations had not been fruitful and had failed to 
resolve the dispute. The UAE thus felt obliged to request the establishment of a panel to resolve 
this dispute. As had been outlined in the UAE's request for panel establishment, contained in 
document WT/DS538/2, the UAE was concerned that the anti -dumping measures, which had been 
imposed and maintained by Pakistan on BOPP Film from the UAE were inconsistent with Pakistan's 
obligations under the GATT  1994 and the Anti -Dumping Agreement. As refl ected in the UAE's panel 
request, the UAE's list of concerns with regard to the definitive anti -dumping measures was long. 
The UAE's concerns related, amongst other things, to the initiation of the investigation without 
sufficient evidence, the determinati on of dumping and injury based on an outdated period of 
investigation, the rejection of accurate cost data inflating the margin of dumping, the lack of fair 
comparison between normal value and export price at the same level of trade, the lack of an 
objecti ve examination of virtually all aspects of injury and causation and the continuation of the 
measures beyond the initial five -year period, which was based on a flawed sunset review 
determination. It also appeared that numerous procedural errors nullify and impair the 
determinations that had been made on this basis. The UAE was, thus, requesting the DSB to 
establish a panel to examine this matter, as set out in the UAE's panel request, with standard 
terms of reference.  
6.3.  The representative of Pakistan  said that  his country regretted the UAE's decision to request 
the establishment of a panel at the present meeting. Pakistan felt that this request was premature, 
because in Pakistan's view, the parties had not yet exhausted all possibilities to reach a mutually 
convenient solution in this dispute. At present, efforts were underway in both Pakistan and the 
UAE to find ways to resolve this dispute. In this regard, a meeting with UAE officials had taken 
place in Islamabad on 15  May 2018 and Pakistan envisaged more bila teral meetings to reach a 
mutually agreed solution in this dispute. Under the circumstances, Pakistan was not in a position 
to agree to the establishment of a  panel at the present meeting.  
6.4.  The DSB took note  of the statements and agreed  to revert to this m atter.  WT/DSB/M/413  
 
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  7  INDIA – EXPORT RELAT ED MEASURES  
A.  Request for the establishment of a panel by  the United  States (WT/DS541/4)  
7.1.  The Chairperson  drew attention to the communication from the United  States contained in 
document WT/DS541/4, and invited the representativ e of the United  States to speak.  
7.2.  The representative of the United  States  said that the United States recalled that all 
WTO Members, including India, were required to provide any subsidies consistently with the 
obligations in the Agreement on Subsidies and Countervailing Measures ("SCM Agreement"). In 
the case of India, this included the obligation of Article  3.1(a) of the SCM Agreement that 
prohibited subsidies contingent upon export performance. Regrettably, it appeared that India 
provided subsidies contin gent upon export performance inconsistently with its WTO obligations. In 
particular, India appeared to provide export subsidies through:  (i) the Export -Oriented Units 
Scheme and sector specific schemes, including Electronics Hardware Technology Parks Schem e 
and Bio -Technology Parks Scheme;  (ii) the Merchandise Exports from India Scheme; (iii) the 
Export Promotion Capital Goods Scheme; (iv)  Special Economic Zones; and (v) a duty -free imports 
for exporters program. Prior to initiating this dispute, the United  States had attempted to resolve 
its concerns with India's subsidy programs, both bilaterally and in the SCM Committee. However, 
India had continued to grant these export -contingent subsidies. Further, India had expanded the 
scope and scale of its export subsidies. The United  States and India had consulted on the matters 
set out in the US request for consultations, but the consultations had failed to resolve the dispute. 
For these reasons, the United  States requested that the DSB establish a panel to exami ne the 
matter set out in the US  panel request, with standard terms of reference. Consistent with 
Article  4.4 of the SCM  Agreement, which provided for "the immediate establishment of a panel" 
upon a party's request, the DSB would establish the  panel at the present meeting.  
7.3.  The representative of India said that her country was disappointed that the United  States had 
chosen to move forward with a request for the establishment of a panel in this dispute, as India 
believed that the bilateral consultations of 11  April 2018 had been constructive. During these 
consultations, India had provided details about the schemes implemented under India's Foreign 
Trade Policy by answering all the questions raised by the United  States. India would also like to 
reiterate that t he schemes identified by the United States, did not violate India's WTO obligations. 
These schemes were in conformity with all the elements of the SCM Agreement, as well as its 
Annexes. India had concerns with the broad and imprecise nature of the US initi al request for 
consultations, which was not in conformity with the requirements under the SCM Agreement and 
the DSU. This also applied to the US panel request, which was unspecific. India maintained that 
the request for consultations and panel establishmen t were not in accordance with the relevant 
provisions of the SCM Agreement and the DSU. Additionally, India was of the view that this case 
involved a substantive interpretation of Article  27 of the SCM Agreement, as well as the Annexes 
thereof. A panel cou ld, thus, not be established under Article  4 of the SCM  Agreement. The panel 
establishment can only be governed by Article  7 and Article  30 of the SCM Agreement read 
together with Article  6 of the DSU. For these reasons, India could not agree to the establ ishment 
of a panel under Article  4.4 of the SCM  Agreement. India was willing to work with the 
United  States bilaterally to seek a mutually beneficial solution. India believed that open, bilateral 
discussions between the two  parties would result in a more c onstructive outcome, rather than 
seeking recourse to the already stretched resources of the WTO dispute settlement system. India 
would also be willing to seek the good offices of the  Director -General t o resolve this matter 
amicably.  
7.4.  The representative of t he European  Union  said that, with regard to this Agenda item, his 
delegation understood that consultations in this dispute had already taken place. This was 
surprising, as the EU had asked India on 23  March  2018, thus, within the timeline set by the SCM 
Agreement and the DSU to be joined in the consultations. India had not yet replied to the EU's 
request. In the EU's view, it should be good practice for all WTO Members to respond in a timely 
manner to requests to be joined in the consul tations made by other  Members. The EU was 
disappointed that India had not replied to the request and the EU had thus been unable to 
participate in the consultations.  
7.5.  The representative of Canada  said that his country was in the same position like the EU. 
Canada fully supported  the EU's statement on this matter.  WT/DSB/M/413  
 
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  7.6.  The representative of the United  States  said that the United States took note of India's 
statement at the present meeting. The text of the DSU and the SCM Agreement were clear that a 
panel must be established at the pres ent DSB m eeting. Accordingly, the United  States insisted that 
a panel must be established by the DSB at the present meeting.  
7.7.  The DSB took note  of the statements and agreed  to establish a panel in accordance with the 
provisions of Article  4.4 of the SCM Agr eement and Article  6 of the DSU, with th e standard terms 
of reference.  
7.8.  The representatives of Canada , China , Egypt , the European  Union , Japan , Kazakhstan , Korea , 
the Russian  Federation  and Sri Lanka  reserved their third -party rights to particip ate in the Panel's 
proceedings.  
8  EUROPEAN  COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN LARGE CIVIL  AIRCRAFT: RECOURSE TO ARTICLE  21.5 OF T HE DSU BY THE 
UNITED  STATES  
A.  Report of the Appellate Body (WT/DS316/AB/RW and 
WT/DS316/AB/RW/Add.1)and R eport of the Panel (WT/DS316/RW and 
WT/DS316/RW/Add.1)  
8.1.  The Chairperson  drew attention to the communication from the Appellate Body contained in 
document WT/DS316/33 transmitting the Appellate Body Report in the dispute: "EC and Certain 
Member States  – Large Civil Aircraft: Recourse to Article  21.5 of the DSU by the United  States", 
which had been circulated on 15  May 2018 in document WT/DS316/AB/RW and Add.1. She 
reminded delegations that the Appellate Body Report and the Panel Report pertaining to this 
dispute had been circulated as unrestricted documents. As Members were aware, Article  17.14 of 
the DSU required that: "An Appellate 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  days following its circulation to Members. This adoption procedure 
is without prejudice to the right of Members to express their views on an Appellate Body report". 
She invited the parties to the dispute to present views  on the Reports before the DSB.  
8.2.  The representative of the European  Union  said that his delegation welcomed the Report of 
the Appellate Body, which had been issued on 15  May 2018, in this long -standing dispute. In 
particular, the EU welcomed the fact that the Appellate Body had dismissed all US claims that any 
of the EU's support was outright "prohibited" under WTO rules. The EU further noted that the 
Appellate Body had stated that a Member could not be required to take steps to remov e adverse 
effects of subsidies that had already expired. The Appellate Body had found that the EU had no 
compliance obligations for adverse effects in the single -aisle large civil aircrafts market. The 
Appellate Body had also reduced the EU's compliance ob ligations with regard to the twin -aisle and 
the very large aircraft. At the same time, the EU acknowledged that the Appellate Body's ruling left 
the EU with certain limited steps to take in order to bring itself into full compliance with the Panel's 
findin gs, as modified by the Appellate Body. The EU had promised to take swift action with respect 
to these remaining obligations. It was precisely in recognition of thos e outstanding obligations that 
the EU had informed the DSB Members, in its compliance commun ication of 17  May 2018, which 
had been discussed under Agenda item 3, of the measures that the EU had taken to bring itself 
fully in line with WTO rules. The EU wished to stress that there was no doubt that the Report 
before the DSB at the present meeting was an Appellate Body Report, and the EU looked forward 
to its adoption in accordance with the adoption rules applicable to Appellate Body reports, 
pursuant to DSU  Article  17.14, i.e. the procedure known as "negative consensus". The EU also 
noted that the United  States had included item  9 on the Agenda of the present meeting. The EU 
considered that this item was of no consequence, not because it came after item  8, but because it 
did not reflect a proper interpr etation of the DSU provisions.  
8.3.  The representat ive of the United  States  said that the United States thanked the Panel, the 
members of the division, and the Secretariat staff assisting them for their work on this matter. 
This had been a large and complicated proceeding, and the United  States sincerely a ppreciated 
their efforts to produce high -quality reports. These reports found that the EU and the Airbus 
member States, namely, France, Germany, Spain, and the United Kingdom, had failed to bring 
WTO-inconsistent subsidies into compliance with WTO rules an d had continued to breach their WT/DSB/M/413  
 
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  WTO obligations by giving massive amounts of subsidized financing to Airbus. These subsidies had 
caused adverse effects on US  aircraft sales and exports worth tens of billions of dollars. This was 
as true now as it had been when Airbus began 50  years ago. The reports at issue at the present 
meeting concluded explicitly that EU member State financing of the  A380 and A350  XWB had been 
at below -market rates and had resulted in massive lost sales and market share losses. The Unit ed 
States had seen an EU statement, in which it asserted some small vindication in the findings that 
some of its oldest subsidies had been found to have expired. The United States had heard some of 
these assertions again at the present meeting. However, th is view ignored that the latest report 
had not disturbed the compliance Panel's findings that all of the EU launch aid financing of Airbus 
had been subsidized, and had caused immense adverse effects to the interests of the 
United  States. Thus, the launch a id had been inconsistent with Articles  5 and  6.3 of the 
SCM Agreement. The findings in the more recent report meant only that those older subsidies had 
created a wrong under the SCM  Agreement that no  longer had a remedy.  
8.4.  With respect to adoption of the re ports, the United  States raised again an important systemic 
concern regarding the service on appeals of Appellate Body members whose terms had expired. As 
the United  States had explained at the November 2017 meeting of the DSB in the context of the 
"Indone sia – Horticultural Products, Animals and Animal Products" dispute, Mr.  Ramirez's term had 
expired on 30  June 2017. The DSB had taken no action to permit him to continue to serve as an 
Appellate Body member, and, therefore, he had not been an Appellate Bod y member on the date 
of circulation of this report. Similarly, Mr.  Van den Bossche's term had expired on 
11 December  2017, and the DSB also had taken no action to permit him to continue to serve as an 
Appellate Body member. Furthermore, no DSB authorizatio n had been sought or obtained by the 
division to exceed the mandatory 90 -day deadline for an appellate report under Article  17.5 of the 
DSU. The United  States therefore considered that the implications for this report were the same as 
in the "Indonesia – Horticultural Products, Animals and Animal Products" dispute, specifically, that 
the report had not been issued consistent with the requirements of Article  17 of the DSU. 
Accordingly, it cannot be an "Appellate Body report" subject to the special adoption p rocedures set 
out in Article  17.14 of the DSU, which applied to an appellate report in conformity with that Article. 
The United  States supported the adoption of the panel and appellate repo rts in this dispute. The 
United  States understood that the EU and t he Airbus member States, the other parties to the 
dispute, did also, as the EU had proposed this Agenda item so that the DSB could adopt these 
reports. As Article  3.7 of the DSU made clear, "[t]he aim of the dispute settlement mechanism is 
to secure a posi tive solution to a dispute". Therefore, as the parties considered that adoption of 
these reports would help them achieve a "positive solution to the dispute", the United  States 
invited other Members to join the parties' consensus to adopt the reports propo sed for adoption at 
the present meeting, that is, the report contained in WT/DS316/AB/RW and 
WT/DS316/AB/RW/Add.1 and the panel report contained in WT/DS316/RW and 
WT/DS316/RW/Add.1, as modified by the former re port.  
8.5.  The United States also wished to addre ss next steps in this dispute, which was very 
economically significant for the United  States and had occupied so many WTO dispute settlement 
resources. To be clear, t he United States'  preferred outcome was a mutually agreed solution with 
respect to aircraf t financing. The United  States remained ready to hold serious discussions to 
achieve this goal. But, again, this would require the EU to communicate directly and candidly with 
the United  States, rather than indirectly and vaguely through a communication to  all WTO 
Members. The United States was ready to discuss with the EU and its member States how the 
parties might resolve both sides' disagreements with respect to existing WTO -inconsistent 
subsidies and reach an agreement so that neither side adopt ed new W TO-inconsistent subsidies. If 
necessary, the United  States was prepared to move forward with a process to impose 
countermeasures on EU  products. But in the US view, what was needed to resolve this dispute was 
not more WTO litigation, but a real desire to r esolve this dispute.  
8.6.  The representative of the European  Union  said that his delegation recalled that the DSU 
excluded the right of any particular WTO  Member to block the adoption of panel or Appellate Body 
reports. This was a central feature of the DSU, and a major difference with the dispute settlement 
mechanism that had operated under the GATT  1947. Article  17.14 of the DSU was clear: "[a]n 
Appellate  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 […]". The 
EU understood that, at the present meeting, there was no formal objecti on to the adoption of the 
Appellate Body Report, and in any event, the EU emphasized that it would not be the case at the 
present meeting that "the DSB decides by consensus not to adopt" the Reports. Therefore both WT/DSB/M/413  
 
- 18 - 
 
  Panel and Appellate Body Reports would in  any event be "adopted by the DSB" within the meaning 
of Articles  16.4 and  17.14 of the DSU. The EU recalled that these provisions were without 
prejudice to the right of WTO Members to express their views on the Report, and such views had 
been expressed at  the present meeting. However, while there was a right to express a view, there 
was no right to veto. Any theories attempting to underpin such a right to veto were without any 
merit.  
8.7.  The representative of Canada  said that his country's statement was in res pect of items  8 
and 9 of the Agenda of the present meeting. Canada wished to comment both on the Report of the 
Appellate Body and the assertion of the United  States that  the reverse -consensus rule in 
Article  17.14 of the DSU did not apply to this Appellate  Body Report. First, regarding the Appellate 
Body Report, Canada had participated as a third party in this dispute, and wished to thank the 
Panel, the Appellate Body, and the Secretariat for their hard work in these proceedings. Canada 
had participated in this dispute because of its substantial systemic interest in the interpretation 
and application of WTO rules on subsidies. Canada welcomed the Appellate Body's confirmation 
that a subsidy that required the production by the recipient of both specialized in put goods and 
final goods did not constitute a prohibited subsidy under Article  3.1(b) of the SCM  Agreement. In 
addition, Canada was pleased that the Appellate Body had reversed the compliance Panel's 
findings with respect to the nature and scope of the co mpliance obligation under Article  7.8 of the 
SCM Agreement. In particular, Canada welcomed the Appellate Body's clarification that Article  7.8 
permitted a Member to comply through either removing the adverse effects of the subsidy, or 
withdrawing the subsi dy altogether. Canada further considered it important that the Appellate 
Body had made explicit that the compliance obligation in Article  7.8 had exclusively concerned 
subsidies that continued to be "grant(ed) or maintain(ed)" at the end of the implementat ion 
period. Accordingly, Canada considered that the Appellate Body had correctly concluded that a 
WTO Member had no compliance obligation with respect to subsidies that had expired, or 
otherwise no longer existed, at the end of the implementation period. R egarding the assertion of 
the United  States that the reverse -consensus rule in Article  17.14 of the DSU did not apply to this 
Appellate Body Report, Canada wished to register its disagreement. In Canada's view the 
reverse -consensus rule  applied. Canada had  heard the US concern about the continued service of 
certain Appellate Body members. In this respect, the United  States reiterated its invitation to the 
United  States and other Members to work together to resolve the procedural issues that had be en 
raised by the United  States.   
8.8.  The representative of Brazil  said that his country took note of the views expressed by the 
United  States regarding in particular the DSB procedure for adoption of the Panel and Appellate 
Body Reports in this dispute. Brazil understoo d that these views, however, were to be taken as no 
more than a Member's opinion about procedural rules, as set out in the last sentence of 
Article  17.14 of the DSU that "this adoption procedure is without prejudice to the right of Members 
to express their  views on an Appellate Body report". It was clear that these views or opinions 
certainly could not and did not override the rules set forth in Article  17.14 of the DSU in its first 
part, explicitly established the negative consensus rule for the adoption o f Appellate Body Reports. 
The Reports at issue under the present Agenda item complied with all of the DSU requirements 
and, thus, had to be subject to the negative consensus adoption procedure. The fact that the 
disposition of an appeal had been completed in compliance with Rule  15 of the Working Procedures 
for Appellate Review, to which we had all agreed, had no bearing on the nature of the adoption of 
the Reports. These Working Procedures for Appellate Review had been adopted in strict conformity 
with Art icle 17.9 of the DSU. The link being made between a certain novel reading of Rule  15 and 
the rule of negative consensus for adoption of reports was unwelcome and had no legal merit. In 
conclusion, the Reports, which were before the DSB for adoption at the present meeting, had the 
same nature and were being adopted in the same manner as all of the Appellate Body Reports, 
which had been adopted previously.  
8.9.  The representative of Australia  said that her country wished to comment briefly on the 
procedural issues  that had been raised with regard to the adoption of the Reports at the present 
meeting. Australia was of the view that the correct process for adopting the Report of the 
Appellate Body in this dispute was set out in Article  17.14 of the DSU. Australia bel ieved that the 
negative consensus principle was central to the ongoing effectiveness of the WTO dispute 
settlement system and should be applied in this instance. However, Australia also noted the 
concerns that had been raised by the United States, and unde rscored Australia's willingness to 
discuss how to resolve these concerns in a constructive and pragmatic way.  WT/DSB/M/413  
 
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  8.10.   The representative of Japan  said that, as a third party in this dispute, his country thanked 
the compliance Panel, the Appellate Body and the resp ective Secretariats for their hard work in 
this dispute. Japan was in the process of reviewing both the Panel Report and the Appellate Body 
Report and reserved its right to express its views on these Reports, pursuant to Articles  16.4 
and 17.14 of the DSU.  Japan had carefully listened to the respective statements by the EU and the 
United  States, expressing divergent views on the adoption procedure that should be applied. On 
the one hand, the United  States argued that the adoption procedure set out in Articl e 17.14 did 
not apply to the Report in question because it had not been issued by the Appellate Body in 
accordance with Article  17 of the DSU. The EU, in contrast, stated that Article  17.14 of the DSU 
applied irrespective of any alleged procedural defects.  Japan did not believe any WTO Member 
questioned the legitimacy, propriety or legality of the adoption procedure itself, which WTO 
Members had es tablished under Article  17.14.  
8.11.   All WTO Members, including the disputing parties in this dispute, shared the co mmon 
interest in preserving and maintaining the integrity and functionality of the adoption procedure 
under Article  17.14. The question was how Members could ensure that a Report, prepared by the 
Appellate Body, was an "Appellate Body report" within the me aning of Article  17 of the DSU, and 
thus, was subject to the DSU Article  17.14 adoption procedure. When faced with specific 
challenges in a specific dispute, WTO  Members had always found a way to overcome such 
challenges in accordance with the DSU. Given b oth disputing parties' apparent support for the 
adoption, there was no reason not to adopt the Reports in question at the present meeting, as 
there was no procedural hurdle that would hinder the DSB's  ability to act accordingly.  
8.12.   The representative of New Zealand  said that, as her country had stated at the time of 
adoption of Reports in  DS477/DS478, New  Zealand did not see the application of Rule  15 as 
affecting the nature of reports as Appellate Body reports, or their method of adoption through 
negative con sensus. As stated many times under the Agenda ite m "Appellate Body Matters", 
New Zealand remained willing to work with other delegations to engage constructively in 
discussions with regard to the concerns about Rule  15, to try finding a way forward.  
8.13.   The re presentative of Norway  said that her country noted with interest the views that had 
been expressed by other WTO Members under this Agenda item. From Norway's point of view, it 
was crucial to have a well -functioned WTO dispute settlement system where all stages of a dispute 
could operate in an efficient and effective manner. Extending the mandate of Appellate Body 
members to let them complete the work on a dispute, to which they had been assigned, had been  
common practice for years in the WTO; which was also the case in other international tribunals. 
This was a sensible way to address a practical matter and one that had been accepted by the WTO 
Membership in a number of disputes. Norway did not see the alle ged need for a sudden change in 
this practice. Norway was, however, willing to engage in a constructive dialogue on the possibility 
of exploring alternatives to the current Rule  15 of the Working Procedures for Appellate Review. 
This should nonetheless not  prejudge the effective operation of the WTO dispute settlement 
system, including the adoption of the Reports under this Agen da item at the present meeting.  
8.14.   The representative of China  said that his country's statement referred to Agenda items  8 
and 9. Chi na welcomed the Panel and the Appellate Body Reports in this dispute, and hoped that 
these Reports would help solve the long -standing dispute between the parties. China reiterated its 
position that the Appellate Body was acting well within its mandate by i ncluding Rule  15 of the 
Working Procedures for Appellate Review. Therefore, the Appellate Body Report, contained in 
WT/DS316/AB/RW and Add.1, should be adopted in line with the negative consensus rule pursuant 
to Article  17.14 of the DSU. In addition to th e procedures for the adoption of Appellate Body 
Reports, China also had to address the current situation where the United States appeared to 
utilize its concerns over Rule  15 as an excuse to challenge the negative consensus rule, and 
ultimately, the rules -based multilateral trading sy stem. It seemed that the United  States 
selectively chose to acknowledge the WTO rules that could be distorted to serve the US interests 
and to disregard other rules if those rules prevent the United States from taking unilatera l actions. 
An example of the former would be the United States expressing concerns about Rule  15 based on 
its own interpretation of the DSU, attempting to expand the negative impact of such a distorted 
interpretation. An example of the latter would be the United States taking unilateral action under 
Section  301, disregarding its obligations under WTO rules. This was certainly not what had been 
agreed upon the establishment of the WTO. China emphasized th at the assertions by the 
United  States did not have an y legal basis and should, thus, not have any influence or effect on 
the Reports to be adopted at the present  meeting.  WT/DSB/M/413  
 
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  8.15.   The representative of Mexico  said that although her country was not involved in this dispute 
as a third party, Mexico would like to expres s its opinion with regard to a systemic issue. Mexico 
reiterated what had been stated by previous speakers with regard to the adoption procedure of the 
Appellate Body Report and what had been set out in Article  17.14 of the DSU. Members should not 
be chall enging the validity of the Reports and Mexico believed that Rule  15 should not be affected. 
Similarly, Mexico reiterated its availability to discuss the concerns about Rule  15 raised by the 
United  States.  
8.16.   The DSB took note  of the statements and adopted  the Appellate Body Report contained in 
document WT/DS316/AB/RW and Add.1 and the Panel Report contained in document 
WT/DS316/RW and Add.1, as modifie d by the Appellate Body Report.  
9  EUROPEAN  COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN L ARGE CIVIL AIRCRAFT:  RECOURSE TO ARTICLE  21.5 OF THE DSU BY THE 
UNITED  STATES  
A.  Report of the Panel (WT/DS316/RW and WT/DS316/RW/Add.1) and the report 
contained in WT/DS316 /AB/RW and WT/DS316/AB/RW/Add.1  
9.1.  The Chairperson  said that, in connection with this  Agenda item, she wished to note that the 
Reports pertaining to this dispute had just been adopted under the previous Agenda item. She 
asked if any representative  wished to speak at this point.  
9.2.  The representative of the United  States  said that the DSB had adopted the reports contained 
in WT/DS316/RW and WT/DS316/AB/RW under Agenda item  8 of the present meeting. Therefore, 
there was no further action for the DSB to take under the present Agenda item, and in this 
circumstance, the DSB may move on to item  10. Rather than reiterate its views on this dispute, 
the United  States referred Members to the views it had expressed under Agenda i tem 8 in relation 
to this item.  
9.3.  The DS B took note  of the statements.  
10  EUROPEAN  UNION – COUNTERVAILING MEASURES  ON CERTAIN POLYETH YLENE 
TEREPHTHALATE FROM P AKISTAN  
A.  Report of the Appellate Body (WT/DS486/AB/R and WT/DS486/AB/R/Add.1) and 
Report of the Panel (WT/DS486/R, WT/DS486/R/Add.1 and WT/DS486/R/Corr.1)  
10.1.   The Chairperson  drew attention to the communication from the Appellate B ody contained in 
document WT/DS486/10 transmitting the Appellate Body Report in the dispute: "European Union – 
Countervailing Measures on Certain Polyethylene Terephthalate from Pakistan", which had been 
circulated on 16  May 2018, in document WT/DS486/AB/R  and Add.1. She reminded delegations 
that the Appellate Body Report and the Panel Report pertaining to this dispute had been circulated 
as unrestricted documents. As Members were aware, Article  17.14 of the DSU required that: "[a]n 
Appellate Body report sh all 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 days following its circulation to Members. This adoption procedure is without prejudic e to the 
right of Members to express their views on an Appellate Body report ". 
10.2.   The representative of Pakistan  said that his country thanked the Panel, the Appellate Body, 
as well as the Legal Affairs Division and the Appellate Body Secretariat, for their w ork in this 
dispute. As a developing country Member that used the WTO dispute settlement system very 
infrequently, Pakistan very much appreciated the contribution of the WTO dispute settlement 
process to the rules -based multilateral trading system. In this  context, Pakistan appreciated that 
both the Panel and the Appellate Body had vindicated Pakistan's right to continue proceedings 
despite that the measure at issue had expired during the Panel proceedings. The measure in this 
dispute had expired before the  Panel's ruling, in fact, before the Panel had begun its work. This 
was the case for a simple reason, namely, Pakistan had to wait for almost an entire year for the 
Panel to start its work, due to the backlog of WTO disputes, which was, in turn, caused due  to the 
shortage of WTO Secretariat staff. If the Panel would have begun its work immediately upon 
composition, as envisaged by the DSU, under the DSU timelines, the measure would have most WT/DSB/M/413  
 
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  likely expired only after the issuance of the interim report. As t he Panel and Appellate Body had 
confirmed, consistent with prior jurisprudence, a dispute did not vanish simply because a measure 
had expired. This notion was important for developing countries that would neither have the time, 
nor the resources to "chase moving target measure s", through repeated disputes.  
10.3.   Pakistan welcomed the clear guidance on the definition of a subsidy in cases of duty 
drawback schemes and the rules pertaining to those schemes under Article  1, Footnote  1 and 
Annexes  I to III of the SCM  Agreement. Both Reports made evident that only an excess remission 
of duties could be treated as a subsidy under those schemes and that investigating authorities had 
to always investigate whether an excess remission had occurred, on the basis of record ev idence. 
Moreover, investigating authorities had to provide a genuine and timely opportunity to exporting 
WTO Members to conduct "further examination", as had been envisaged in Annexes  II and III of 
the SCM Agreement. This ruling was of great practical and systemic relevance to all 
WTO Members, in particular, developing countries that exercised their WTO right to use duty 
drawback schemes to promote the competitiveness of their export industries, in a WTO -consistent 
manner. Pakistan also appreciated that the  Panel had sided with Pakistan concerning two factors 
relevant to the causation analysis. However, Pakistan was disappointed with the Panel's and the 
Appellate Body's ruling on the "breaking the causal link" approach. By upholding the approach, the 
Appella te Body had interpreted the two -step non -attribution analysis by prioritizing the first step of 
identifying a link between the dumped/subsidized imports over the second step of examining the 
effect of other factors in a manner that made a negative finding highly unlikely. Finally, Pakistan 
also welcomed the Panel's and the Appellate Body's ruling on disclosure of the results of 
verifications. A proper disclosure of the results of verification was important for the exporters' and 
the governments' ability to defend interests before investigating authorities, as well as in 
subsequent ju dicial or multilateral reviews.  
10.4.   The representative of the European  Union  said that his delegation took note of the Appellate 
Body Report. The EU also took note of Pakistan's stat ement with regard to the issue of delays. The 
dispute concerned EU countervailing duties, which had expired almost three years ago. 
Accordingly, the Appellate Body had made no recommend ations to implement the ruling.  
10.5.   The representative of the United  States  said that, as a third pa rty in this dispute, the 
United  States had provided views primarily focused on the interpretation of the DSU with respect 
to the matter that Pakistan had put before the Panel. In the course of the Panel proceedings, the 
measure at issue had terminated and Pakistan had confirmed that it did not seek  a 
recommendation from the Panel. In other words, Pakistan had confirmed that no dispute remained 
between the parties that the challenged measure had been brought into conformity with WTO 
rules. Nevertheless, Pakistan had continued to request findings from the Panel and later from the 
Appellate Body. The EU had appealed the Panel's issuance of findings in this dispute, and the 
United  States had supported the EU's appeal. As the United State s had explained14, the DSU did 
not grant WTO  adjudicators the authority to issue advisory opinions regarding the interpretation of 
the covered agreements in the abstract. A complaining party may not structure its case in a 
manner that in effect would create  such an authority. Rather, the WTO dispute settlement system 
aimed to secure a positive solution to a dispute between the parties.15 Pakistan had confirmed 
before the Panel and on appeal that it did not seek a recommendation from the DSB when it had 
stated  "that panels cannot make recommendations on expired measures under Article  19.1 of the 
DSU".16 
10.6.   Pakistan's statement that it did not seek  a recommendation confirmed that there had been 
no dispute between the parties. Rather, as the Panel had found, Pakistan  had sought findings 
                                                
14 EU Ap pellant Submission, paras. 35 -37. 
15 DSU Article  3.7 ("The aim of the dispute settlement mechanism is to secure a positive solution to a 
dispute.").  
16 See Pakistan Response to EU Request for Preliminary Ruling, para.  4.19 ("Pakistan acknowledges, of 
course,  that panels cannot make recommendations on expired measures under Article  19.1 of the DSU. This 
makes sense, because Article  19.1 foresees only one type of recommendation, that is, that a Member must 
'bring the measure into conformity' with a covered agre ement. Logically, measures cannot be brought into 
conformity if they no longer exist. As panels and the Appellate Body have repeatedly shown, however, panels 
may – and regularly do – make rulings on measures that expired after the panel was established.") (citing "US 
– Certain EC Products" (AB), para.  81; "US – Poultry" (China) (Panel), para.  7.56; "US – Upland Cotton" (AB), 
para. 272; and "EC – Bananas III" (Article  21.5 – Ecuador II) / "EC – Bananas III" (Article  21.5 – US) (AB), 
para. 271).  WT/DSB/M/413  
 
- 22 - 
 
  because "the parties dispute, on a fundamental level, how investigating authorities should 
determine the extent to which duty drawback schemes like the [one at issue] may constitute 
countervailable subsidies within the meaning of the S CM Agreement".17 That was, Pakistan had 
sought an advisory opinion regarding the application of the SCM Agreement in the future, with 
respect to different duties on different products, and potentially based on different programs. The 
appellate report confir med that the finding was advisory in nature. The appellate report appeared 
to agree with the Panel that it had been relevant to "resolve" the issue under the SCM Agreement 
because "similar" cases could arise and "similar" reasoning could be applied in thos e cases.18 A 
disagreement between the parties "on how investigating authorities should" administer the 
countervailing duty law, in other circumstances that had not been presented in this dispute, did 
not fall within the terms of reference for the Panel, whi ch also delimited appellate review, as set 
out by the DSB for th is dispute.  
10.7.   As the text of the DSU indicated, the terms of reference of a panel under Article  7.1 of the 
DSU provided for a panel to make an "objective assessment of the matter", words Members  all 
knew well, but to make the "findings as will assist the DSB in making the recommendation" under 
the DSU to bring a WTO -inconsistent measure into conformity with WTO rules.19 Article  11 of the 
DSU, on the function of panels, repeated these words and thi s structure.20 But those latter words – 
to make "findings as will assist the DSB in making the recommendation" under the DSU – had 
been essentially disregarded in the reports before the DSB at the present meeting. Where a 
complaining party requested an adju dicator to make findings not consistent with the terms of 
reference established by the DSB, the panel must decline to do so. As Pakistan had requested 
findings with respect to the interpretation and application of the SCM Agreement, but no 
recommendation o n the challenged EU measure, the Panel should have found Pakistan's request to 
be outside its terms of reference and refrained from making the requested, purely advisory, 
findings on that basis. The United  States therefore agreed with the EU's appeal that Pakistan's 
alleged "dispute" had been a purely advisory exercise. The United  States further agreed with the 
EU that the DSU did not grant WTO adjudicators the authority to issue advisory opinions regarding 
the interpretation of provisions of the covered ag reements in the abstract, and outside the context 
of resolving a dispute.21 The United  States had been warning Members for some time about the 
concern that WTO adjudicators had been giving "findings" that were advisory, or unnecessary to 
resolve the dispute .22 The United States recalled one egregious instance, in the appeal in 
"Argentina – Financial Services", in which more than two -thirds of the Appellate Body's analysis – 
46 pages – had been in the nature of obiter  dicta. This was not only inconsistent with  the DSU and 
terms of reference established by the DSB, but contributed to delays in dispute settlement and 
increased complexity for all WTO Members.  
10.8.   This dispute could and should have been resolved upon Pakistan's statement that it had 
sought no recommend ation on the EU's withdrawn measure. In that circumstance, there had been 
no "findings as w[ould] assist the DSB in making the recommendations" in the DSU. The reports in 
this dispute had not been necessary to resolve a dispute, but rather, as the EU had r ightly pointed 
out, an exercise in making unnecessary interpretations. With respect to the appellate report in this 
dispute, the United  States raised again an important systemic concern regarding the service on 
appeals of an Appellate Body member whose ter m had expired. In this proceeding, the term of 
                                                
17 Panel Repor t, para.  7.13 (emphasis added), citing to Pakistan's response to the European  Union's 
preliminary ruling request, para.  4.72. 
18 Appellate Report, paras.  5.48-5.49. 
19 DSU Article  19.1 ("Where a panel or the Appellate Body concludes that a measure is inconsi stent with 
a covered agreement, it shall recommend that the Member concerned bring the measure into conformity with 
that agreement.") (footnotes omitted);  see DSU Article  21.1 ("Prompt compliance with recommendations or 
rulings of the DSB is essential in o rder to ensure effective resolution of disputes to the benefit of all 
Members.").  
20 DSU Article  11 ("The function of panels is to assist the DSB in discharging its responsibilities under 
this Understanding and the covered agreements. Accordingly, a panel should make an objective assessment of 
the matter before it, including an objective assessment of the facts of the case and the applicability of and 
conformity with the relevant covered agreements, and make such other findings as will assist the DSB in 
making the recommendations or in giving the rulings provided for in the covered agreements.").  
21 See "US — Wool Shirts and Blouses" (AB), WT/DS33/AB/R and WT/DS33/AB/R /Corr.1, at 19 ("Given 
the explicit aim of dispute settlement that permeates the DSU, we do not consider that Article  3.2 of the DSU 
is meant to encourage either panels or the Appellate Body to 'make law' by clarifying existing provisions of the 
WTO Agreement outside the context of resolving a particular dispute.").  
22 See, e.g., The President's 2 018 Trade Policy Agenda, at 26 -27 (available at https://ustr.gov/about -
us/policy -offices/press -office/reports -and-publications/2018/2018 -trade-policy -agenda -and-2017).  WT/DSB/M/413  
 
- 23 - 
 
  Mr. Van den Bossche had expired on 11  December  2017, and the DSB had taken no action to 
permit him to continue to serve as an Appellate Body member. Therefore, the report in this appeal 
had not been issued by three Appellate Body members. Furthermore, the report had been issued 
well beyond the mandatory 90 -day deadline in Article  17.5 of the DSU. The DSB had taken no 
action to authorize that departure from WTO rules. The United  States therefore considered that the 
implications for this report were the same as in the "EC – Large Civil Aircraft" dispute and others in 
which WTO rules had been broken by the adjudicator. Specifically, the report had not been issued 
consistent with the requirements of Article  17 of th e DSU and so could not be an "Appellate Body 
report" subject to the adoption procedures reflect ed in Article  17.14 of the DSU.  
10.9.   The United  States had serious concerns with these reports. The United States did not 
support adoption of alleged "findings" that were merely advisory and inconsistent with the DSU 
and the terms of reference  established by the DSB. However, the United States understood that 
both parties would agree to adoption of these reports because they both agreed that the absence 
of any recommen dation by the DSB would help them reach a positive solution. If the statements in 
the panel and appellate reports that no recommendation was being made helped the parties reach 
a positive solution, the United  States could support adoption to the extent of that statement. 
However, and especially given the breaches of Article  17 of the DSU the United States had outlined 
at the present meeting , the United States  did not support adoption of any of the alleged "findings" 
contained in the panel and appellate repo rts. The United States therefore did not consider those 
alleged "findings" to be adopted by the DSB at the present meeting.  
10.10.   The representative of Japan  said that his country was not a third party in this dispute. 
However, Japan noted that the Panel and the Appellate Body pertaining to this dispute had dealt 
with the issue of whether the measures in question, which had expired during the Panel's 
proceedin gs, were subject to the Panel's assessment and findings. As this matter would concern all 
WTO Members, including Japan, his delegations wished to offer some observations. Japan noted 
that the Appellate Body had set the following standard with regard to whe ther an expired measure 
was subject to Panel's findings, namely, the fact that a measure had expired was not decisive in 
answering the question whether a panel could address claims with respect to the expired measure 
at issue. Instead, among a panel's inhe rent adjudicative powers was the authority of a panel to 
assess objectively whether the "matter" before it, within the meaning of Article  7.1 of the DSU and  
Article  11 of the DSU, had been fully resolved or still required to be examined despite the expiry of 
the measure at issue.23 The Appellate Body had then applied this standard to the case in question 
and had enquired whether the Panel had made an objective assessment on the issue of the 
expired measure. In reviewing the Panel's considerations of the spec ific circumstances surrounding 
this dispute, the Appellate Body had made several critical findings. First, the Appellate Body had 
found that the Panel had not erred "by giving importance to the fact that, in the present dispute, 
the measure expired after t he DSB had established the Panel".24 The Appellate Body had explained 
"generally speaking, the demands of due process are such that a complaining party should not 
have to adjust its pleadings throughout dispute settlement proceedings in order to deal with a  
disputed measure as a 'moving target'".25 To decline to rule on expired measures, simply due to 
their expiry, "may have the unintended consequence of providing a tool for shielding measures 
from scrutiny by" a WTO adjudicator.26 
10.11.   Second, given the self -regulating nature of a WTO Member's decision to initiate a WTO 
dispute settlement process under Articles  3.3 and 3.7 of the DSU, the Appellate Body had found 
that "a complaining Member's continued request for findings following the expiry of the measure at 
issue is a relevant consideration".27 After making these findings, the Appellate Body had turned to 
the Panel's consideration of the third and final factor, i.e. the "reasonable possibility that the 
European  Union could impose CVDs on Pakistani goods in a manne r that may give rise to certain of 
the same, or materially similar, WTO inconsistencies that are alleged in this dispute".28 While 
rejecting the "reasonable possibility" of reimposition of "the very same measure that had expired 
and had ceased to have legal  effect" as a relevant factor to consider29, the Appellate Body had 
observed, approvingly, that the Panel had been concerned with the correct interpretation of the 
                                                
23 Appellate Body Report, para. 5.19. See also paras. 5.40, 5.43, 5.49, 5.51, 5.54, 5.55,  5.58 and 6.2.  
24 Appellate Body Report, para. 5.39.  
25 Appellate Body Report, para. 5.39.  
26 Appellate Body Report, para. 5.39.  
27 Appellate Body Report, para. 5.42.  
28 Panel Report, para.7.13. See also Appellate Body Report, paras. 5.46, 5.47 and 5.48.  
29 Appellate Body Report, para. 5.47.  WT/DSB/M/413  
 
- 24 - 
 
  relevant provisions of the SCM  Agreement and the GATT  1994, and the conformity, with this 
correct interpretation, of the Commission's reasoning and findings underpinning the measure that 
had expired.30 The Appellate Body had further stated that the expired measure at issue "continued 
to serve as the framework for" the Panel's assessment under Artic le 11 of the DSU.31 In contrast, 
the separate opinion had implied that the Panel's ruling was "based on the possibility of re -
imposition of the same or similar measure, as well as the fact that such investigations had been 
initiated in other jurisdiction, a nd that a wide range of Pakistani exports other than PET benefit 
from the MBS".32 Japan was not sure what the Appellate Body had meant by the phrase "the 
Commission's findings underpinning the now expired measure"33, but it appeared that the 
Appellate Body h ad understood the Panel's concerns to be "the correct interpretation of the 
relevant provisions"34, with the measure at issue only serving "as framework for"35 the Panel's 
assessment. Or alternatively, "on the minority's reading", the Panel could have wished  to give 
some guidance for similar but distinct CVD investigations that had been initiated or would be 
initiated in the EU or other jurisdictions with regard to a range of Pakistani exports allegedly 
benefitting from the MBS, which could give rise to WTO i nconsistencies, similar to the one in this 
dispute. To the extent that the Panel's concerns were a clarification and the correct interpretation 
of the relevant provisions of the SCM Agreement outside the context of resolving a particular 
dispute36, as claim ed by the EU, Japan agreed that WTO dispute settlement "should not serve as a 
vehicle to obtain 'advisory opinions' on legal matters".37 
10.12.   Japan noted, however, that the Appellate Body had also observed "the Panel's legal 
interpretations and reasoning were made in the context of addressing Pakistan's claims that 
specifically challenged a measure that was in existence at the time that the DSB established the 
Panel and set out its terms of reference".38 Importantly, toward the end of its analyses, the 
Appellate  Body had emphasized that "there still existed a dispute between the parties on the 
'applicability of and conformity with the relevant covered agreements' as regards the Commission's 
findings underpinning the measure at issue, despite its expiry".39 Due to this continued dispute or 
"disagreement"40 between the parties with respect to the WTO consistency of the expired 
measures at issue, the Appellate Body had ultimately found that "the 'matter' within the 
jurisdiction of the Panel was not fully resolved by th e expiry of the measure".41 In other words, the 
Panel's objective determination that "a dispute still persisted between the parties as regards the 
'applicability of and conformity with the relevant covered agreements' with respect to the expired 
measure at issue"42 had been the key for the Appellate Body to uphold the Panel's decision to 
make findings on the expired measure at issue. Japan agreed that the continued existence of the 
parties' "disagreement" with regard to the WTO  consistency of the expired meas ure at issue was 
the decisive factor, together with the timing of a measure's expiry and a complaining Member's 
continued request for findings, in deciding whether to make findings on a complainant's claim with 
respect to the measure at issue, which had ha ppened to have expired during the Panel's 
proceedings.  
10.13.   Finally, Japan noted the Appellate Body's conclusion that "the measure at issue in this 
dispute has expired and has ceased to have legal effect" and "[t]herefore, we do not make any 
recommendation to t he DSB under Article  19.1 of the DSU".43 Similarly, as noted by the Appellate 
Body, the Panel had not "consider[ed] it possible to issue meaningful recommendations under 
Article  19.1 of the DSU"44 and had made no recommendations.45 The approach that had been 
advocated by the Appellate Body and the Panel had no basis in the text of the DSU and was deeply 
troubling. Article  19.1 of the DSU expressly stated, that "[w]here a panel or the Appellate Body 
                                                
30 Appellate Body Report, para. 5.48.  
31 Appellate Body Report, para. 5.48. See also Appellate Body Report, para. 5.44.  
32 Appellate Body Report, para.5.57.  
33 Appellate Body Report, para. 5.48. See also Appellate Body Report, paras. 5.49, 5.51, 5.58 and 6.2.  
34 Appellate Body Report, para. 5.48. See also Appellate Body Report, para. 5.58.  
35 Appellate Body Report, para. 5.48. See also Appellate Body Report, para. 5.44.  
36 Appellate Body Report, para. 5.46.  
37 Appellate Body Report,  para. 5.31.  
38 Appellate Body Report, para. 5.32.  
39 Appellate Body Report, para. 5.49.  
40 See Appellate Body Report, paras. 5.49, 5.51, and 6.2.  
41 Appellate Body Report, para. 5.49. See also Appellate Body Report, para.5.51 and 6.2.  
42 Appellate Body Report,  para. 5.49.  
43 Appellate Body Report, para. 6.16.  
44 Appellate Body Report, para. 5.36.  
45 Panel Report, para. 8.3.  WT/DSB/M/413  
 
- 25 - 
 
  concludes that a measure is inconsistent with a covered agreem ent, it shall recommend that the 
Member concerned" bring the measure into conformity with the agreement in question. The text of 
Article  19.1 of the DSU was written "in mandatory terms" and made no distinction between 
expired and non -expired measures. Unde r the terms of this provision, there was no room for any 
discretion for the WTO adjudicator to decide whether or not making a recommendation was 
"meaningful" with respect to the measure that had been found to be WTO -inconsistent. The 
preferred approach by a panel and the Appellate Body would effectively require that a WTO 
adjudicator determine whether a recommendation was implemented before making such a 
recommendation. However, such a determination was the task of a WTO adjudicator at the 
compliance stage,  not at the original proceedings stage. Indeed, if the measure at issue had 
actually expired and had ceased to have legal effect and the implementing Member considered 
that the expiry of the measure had already achieved compliance, the respondent could sim ply 
notify to that effect and declare its compliance with the DSB's recommendations. If the 
complaining Member was satisfied, the dispute was resolved. If there was any disagreement 
between the parties as to the implementing Member's compliance, with the r ecommendations, 
such "disagreement" could be resolved through recourse to a compliance proceeding under the 
DSU. By contrast, should there be no recommendation there would be no implementation 
obligations irrespective of whether there was any "disagreement " between the parties. Unsatisfied, 
the complaining Member may have to start the dispute settlement process all over again. It was 
difficult to ascertain why making a recommendation in such circumstances was not "meaningful". 
As observed by the Appellate B ody in the past, in the absence of a recommendation, a finding of 
WTO inconsistency "would not result in implementation obligations for a responding Member, and 
in that sense would merely be declaratory".46 
10.14.   The representative of Mexico  said that her country  thanked the Appellate Body and the 
Panel for their work. Mexico was not a party to this dispute, but wished to express its position on a 
systemic issue concerning the situation in which a measure had expired while a dispute settlement 
procedure was ongoin g and related to that the discretion of panels to determine as to whether or 
not the expired measure should continue to be analysed by a panel. Mexico agreed that the expiry 
of a measure was not a decisive factor for determining whether or not a panel shou ld continue to 
analyse a matter.47 Mexico, likewise, agreed that the repeal of a measure did not, in and of itself, 
constitute a satisfactory settlement of the matter within the meaning of Article  3.4 of the DSU.48 
However, Mexico considered that, under the circumstances of this case, the Panel should have 
carefully considered whether there were good reasons for continuing with the analysis, particularly 
in light of the fact that the measure in question could not be re -imposed and that the provisions, 
on whic h the measure had been based, had been modified.49 Thus, in this particular case, Mexico 
had sympathy for the individual opinion expressed by one member of the division. At a time when 
the WTO dispute settlement mechanism was subject to a heavy workload, pa nels should exercise 
the utmost care when exercising their discretion to resolve a dispute.  
10.15.   The representative of the European  Union  said that the United  States had drawn a 
distinction between the adoption of the Reports and the "adoption of the alleged fi ndings" 
contained in the Reports. The EU did not understand the distinction that the United  States was 
trying to draw between the Reports and the findings contained in these Reports. At the present 
meeting, the Appellate Body Report was being adopted by th e DSB pursuant to DSU Article  17.14. 
This meant that it would be adopted in its entirety and unconditionally.  
10.16.   The representative of China  said that his country noted the statements made at the 
present meeting. With regard to the issue of "expired measures" , China noted that there was great 
divergence between the parties in this dispute. Thus, the dispute would not be appropriately 
resolved if the Panel and the Appellate Body would "rule silence". The Panel's terms of reference 
had been determined at the tim e of the establishment of the Panel. China recalled that under 
Articles  7.1 and  11 of the DSU, a panel had to make findings regarding the measure at issue, 
which formed part of the Panel's terms of reference. The Panel and the Appellate Body had to do 
so in order to secure a prompt and positive resolution to the dispute, as required by Articles  3.4 
and 3.7 of the DSU. As stated previously, China did not believe that the US assertions had any 
legal basis and should thus not have any influence or effect on th e Reports to be adopted at the 
                                                
46 AB Report, "China – Raw Materials", para. 264.  
47 AB Report, paragraph 5.25.  
48 AB Report, paragraph 5.27.  
49 AB Report , paragraph 5.70.  WT/DSB/M/413  
 
- 26 - 
 
  present meeting. China understood that the Appellate Body Report was adopted in accordance 
with Article  17.14 of the DSU and that the negative consensus rule applied in this instance.  
10.17.   The representative of the United  States  said that the US view was that the report in this 
appeal had not been issued consistent with the requirements of Article  17 of the DSU and so could 
not be an "Appellate Body report" subject to the adoption procedures reflected in Article  17.14 of 
the DSU. The report could therefore be adopted by consensus of the DSB at the present meeting. 
The United  States had explained its serious concerns with the alleged "findings" in the reports that 
were purely advisory. Given Pakistan's statement that it had sought n o recommendation on the 
EU's withdrawn measure, there had been no "findings as w[ould] assist the DSB in making the 
recommendations" in the DSU. Accordingly, those alleged "findings" were contrary to Articles  7, 
11, 17 and 19 of the DSU and were outside th e terms of reference established by the DSB. The 
United  States also had expressed that it understood that both parties would agree to the adoption 
of these reports because they both agreed that the absence of any recommendation by the DSB 
would help them r each a positive solution. Therefore, to assist the parties to the dispute, the 
United  States was willing to join a consensus to adopt that conclusion, that is , that no 
recommendation was being made in this dispute. The United States did not support the ado ption 
of those alleged "findings" in the reports that were inconsistent with the DSU and outside the 
terms of reference established by the DSB. The United States did not understand why any WTO 
Member would wish to adopt statements by WTO adjudicators that were inconsistent with WTO 
rules.  
10.18.   The DSB took note  of the statements and adopted  the Appellate Body Report contained in 
WT/DS486/AB/R and Add.1, and the Panel Report contained in WT/DS486/R, Add.1 and Corr.1, as 
uphel d by the Appellate Body Report.  
11  APPELL ATE BODY APPOINTMENT S: PROPOSAL BY ARGEN TINA; AUSTRALIA; THE  
PLURINATIONAL STATE OF BOLIVIA; BRAZIL; CANADA; CHILE; CHINA ; COLOMBIA; 
COSTA  RICA; DOMINICA N REPUBLIC; ECUADOR;  EL SALVADOR; THE EU ROPEAN  UNION; 
GUATEMALA; HONDURAS;  HONG  KONG, CHINA; I CELAND; I NDIA; INDONESIA; ISR AEL; 
KAZAKHSTAN; KOREA; M EXICO; NEW  ZEALAND; NICARAGUA; NORWAY; P AKISTAN; 
PANAMA; PARAGUAY; PE RU; THE RUSSIAN  FEDE RATION; SINGAPORE; S WITZERLAND; 
THE SEPARATE CUSTOMS  TERRITORY OF TAIWAN , PENGHU, KINMEN AND  MATSU; 
TURKEY; UKRAINE; URU GUAY; THE BOLIVARIAN R EPUBLIC OF VENEZUELA  AND 
VIET  NAM (WT/DSB/W/6 09/REV.4)  
11.1.   The Chairperson  said that this item had been placed on the Agenda of the present meeting 
at the request of Mexico, on behalf of several delegations. She drew attention to the propos al, 
contained in document WT/DSB/W/609/Rev.4, and invited the representative of Mexico to speak.  
11.2.   The representative of Mexico  said that the delegations of Argentina; Australia; the 
Plurinational State of Bolivia; Brazil; Canada; Chile; China; Colombia; Cos ta Rica; 
Dominican  Republic; Ecuador; El  Salvador; the European  Union; Guatemala; Honduras; 
Hong Kong, China; Iceland; India; Indonesia; Israel; Kazakhstan; Korea; Mexico; New  Zealand; 
Nicaragua; Norway; Pakistan; Panama; Paraguay; Peru; the Russian  Federa tion; Singapore; 
Switzerland; the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Turkey; 
Ukraine; Uruguay; the Bolivarian Republic of Venezuela  and Viet  Nam had agreed to submit the 
joint proposal dated 17  May 2018, contained in document W T/DSB/W/609/Rev.4, to launch the 
Appellate Body selection processes.  Mexico, speaking on behalf of 67 Members, said that t he 
considerable  number of co -sponsors of this joint proposal expressed their  concern s about the 
current situation in the Appellate  Body, which was affecting the WTO's work and the functioning of 
the dispute settlement system and was against the best interest of Members. Mexico noted that 
WTO Members had a responsibility to safeguard and preserve the Appellate Body, the dispute 
settle ment system and the multilateral trading system. Thus, it was their duty to launch the 
selection processes for new Appellate Body members, as set out in the proposal that was before 
the DSB at the present meeting. This proposal sought to (i) start three se lection processes, 
namely: to replace Mr. Ricardo Ramírez -Hernández, whose second term had expired on 
30 June 2017; to fill the vacancy that had arisen with the resignation of Mr. Hyun Chong Kim with 
effect from 1  August  2017; and to replace Mr.  Peter Van den Bossche, whose second term had 
expired on 11  December  2017; (ii) to establish a Selection Committee to carry out the processes; 
(iii) to set a deadline of 30  days for the nominations of candidates; (iv) to request the Selection 
Committee to make its re commendations after 60  days from the deadline for nominations of WT/DSB/M/413  
 
- 27 - 
 
  candidates. While the proponents were flexible with regard to the deadlines for the selection 
processes, these should, however, take into account the urgency of the situation. The co -sponsors  
of the proposal continued to urge all Members to support this proposal before the DSB at the 
present meeting in the interest of safeguarding the multilateral trading system as well as the 
dispute settlement system.  
11.3.   The representative of the Bolivarian Rep ublic of Venezuela  said that his country thanked the 
delegation of Mexico for introducing the joint proposal, contained in WT/DSB/W/609/Rev.4, which 
was co -sponsored by Venezuela. Venezuela urged all Members to support the joint proposal and to 
start the s election processes for new Appellate Body members. Venezuela wished to reiterate its 
deep concern about the major delay in appointing new Appellate Body members due to the lack of 
consensus. Venezuela, once again, called on the WTO Member that objected to this proposal to 
understand the urgency of the situation and the need to unblock the selection processes to appoint  
new Appellate Body members.  
11.4.   The representative of the United  States  said that the United States thanked the Chairperson 
for the continued wo rk on these issues. As the United States had explained in prior meetings, the 
United  States was not in a position to support the proposed decision. For at least the past eight 
months, the United  States had been raising and explaining the systemic concerns that arose from 
the Appellate Body's decisions that purport to "deem" as an Appellate Body member someone 
whose term of office had expired and thus was no longer an Appellate Body member, pursuant to 
its Working Procedures for Appellate Review (Rule  15). D uring that period of time, the DSB had 
adopted by positive consensus four reports signed by someone no longer an Appellate Body 
member, and there currently remained two ongoing appeals where the term of one of the persons 
appointed to the division had expi red. However, the DSB had not yet addressed the problem of 
persons continuing to hear appeals well after their terms had expired. Under the DSU, it was the 
DSB that had the authority to appoint Appellate Body members and to decide when their term in 
office  expired50, and so it was up to the DSB to decide whether a person who was no longer an 
Appellate Body member could continue to serve on an appeal. Last month, the United  States had 
repeated concerns with the Background Note circulated by the Appellate Body  on Rule  15 and had 
asked for Members to be provided additional information. To recall, the United States had pointed 
out that, unlike other international tribunals cited in the Background Note, Rule  15 was not set out 
in the constitutive text of the WTO d ispute settlement system – that is , the DSU. It had therefore 
not been agreed to by WTO Members. This was contrary to what the delegate from Brazil may 
have suggested earlier at the present meeting. The United States therefore asked to be informed 
by the A ppellate Body why this basic difference between the DSU and "some international 
tribunals" was not reflected in what had been purported to be a background document.  
11.5.   The United States had also called Members' attention again to a misleading, at best, 
statem ent that appeared to have been very carefully crafted to avoid mentioning that Rule  15 had 
been, in fact, "criticized by [a WTO] Member in the DSB" and had been "called into question" at 
the time of its adoption51, contrary to assertions in the Background N ote. The criticism of Rule  15 
in the DSB by a WTO Member at the time of its adoption was the type of basic information one 
would expect to be included in a document with the intention to make an objective presentation of 
the issue. The United  States theref ore had asked to be informed by the Appellate Body why India's 
intervention had not been drawn to the attention of WTO Members in the Background Note and 
had further asked why the Appellate Body's statement had been drafted in the manner it had 
been. The U nited States had yet to receive information in response to either of these inquiries.  
                                                
50 Understanding on Rules and Procedures Governing the Settlement of Disputes, Art icles 17.1 and 17.2 
("DSU"). 
51 DSB Meeting Minutes for 21  February  1996 at 12 (WT/DSB/M/11) ( 19 March  1996): India raised "a 
systemic concern with regard to Rule  15 which impli ed that the Appellate Body could authorize a member to 
continue to be a member after it ceased to be a member. This was contrary to Article  17.1 of the DSU which, 
inter alia, provided that a standing Appellate Body shall be established by the DSB and that it shall be 
composed of seven persons. Rule  15 would lead to a situation where the Appellate Body could consist of more 
than seven members or an Appellate Body member continued after the expiry of his term without the approval 
of the DSB. While the practic al need for the provision contained in Rule  15 was understandable, he would be 
seriously concerned if a member of the Appellate Body could continue without concurrence or approval by the 
DSB. This Rule provided for notification to the DSB instead of approv al and therefore was in violation of 
Article  17.1 of the DSU ". WT/DSB/M/413  
 
- 28 - 
 
  11.6.   The United States appreciated the recognition by Members at the previous DSB meeting of 
the fact that addressing this issue was a joint responsibility of all Members, and  the United States 
appreciated the willingness these Members had expressed to engage on this issue. The 
United  States remained resolute in its view that Members needed to resolve that issue as a 
priority. A number of ideas had been mentioned in the context  of informal discussions in which the 
United States had participated, representing a diversity of views on  possible solutions. The 
United  States therefore would continue its efforts and its discussions with Members and with the 
Chairperson to seek a soluti on on this important issue.  
11.7.   The representative of Canada  said that his country regretted that the DSB had been unable 
to fulfil its legal obligation under DSU Article  17.2 to appoint Appellate Body members as vacancies 
arose. Canada agreed that it was time  to start a process or, if necessary, several processes to 
select new Appellate Body members for the three current vacancies. Canada was pleased to join 
the proposal and urged the DSB to adopt it without further delay. Like other Members, Canada was 
disapp ointed that the United  States had linked the start of the Appellate Body selection processes 
to the resolution of certain procedural concerns it had shared with the WTO Membership. Canada 
invited the United  States to engage in discussions with interested M embers with a view to 
expeditiously developing a solution to the concerns that it had raised. Canada remained committed 
to working with other interested Members, including the United States, with a view to finding a 
way to address those concerns so as to a llow the selection processes to start and be completed as 
soon as possible. On a related matter, in response to the assertion by the United  States that the 
DSB had adopted four reports of the Appellate Body lately, Canada wished to register its 
disagreemen t. Canada was not aware of any such instances where an Appellate Body Report had 
been adopted by positive consensus. All Appellate Body Reports had been adopted by reverse 
consensus, in accordance with Article  17.14 of the DSU.  
11.8.   The representative of Austr alia said that her country referred to its previous statements on 
this matter and reiterated its serious concerns regarding the long -standing impasse, which had 
prevented the appointment of Appellate Body members. Australia was, once again, pleased to join  
so many other WTO Members in co -sponsoring the proposal for the DSB to commence immediately 
a process to make appointments to the Appellate Body. Australia invited other Members to support 
this proposal to help meet the obligation under Article  17.2 of th e DSU to fill vacancies as they 
arose. Australia also remained willing to explore options for addressing the concerns that had been 
identified regarding the functioning of the WTO dispute settlement system. Australia was 
committed to efforts to find positi ve, long -term solutions to the matters before the DSB and asked 
other Members to join and engage in good faith in such efforts.  
11.9.   The representative of Colombia , speaking on behalf of the GRULAC, said that the countries 
in question wished to acknowledge the Chairperson's efforts to seek a solution to the problem 
related to the AB deadlock and thanked her for the opportunities to express views on this matter 
at the present meeting.  In this regard, the countries reiterated their deep concern about the 
present s ituation, which affected the functioning of one of the central WTO body. If this problem 
was not solved the Appellate Body would be paralysed in the near future. This would put the entire 
dispute settlement system at risk. With the continued delay in launc hing the selection processes, 
with three vacancies at present, the WTO Membership failed to comply with its mandate, and 
therefore breached its legal obligations under the covered agreements. This had serious systemic 
consequences and set a bad precedent f or the WTO. This situation caused damage and affected 
the image and credibility of the WTO, in particular, under the complex international environment 
that was adversely affecting the multilateral trading system. Concerns had been raised regarding 
the func tioning of the dispute settlement system and some specific issues regarding the decision -
making process. These concerns blocked the Appellate Body selection processes and prevented 
Members from meeting their legal obligations.  The proper functioning of the  system should not be 
undermined because the systemic concerns of some Members had not been addressed. Colombia 
warned WTO  Members to understand the consequences of the prolonged blockage of the AB 
selection processes and believed that systemic concerns sh ould be addressed on the basis of their 
own merit. In this regard, Colombia urged Members to find a solution to resolve this matter.  
Colombia asked the Chairperson to continue to seek a solution to this matter.  
11.10.   The representative of Chinese  Taipei  said tha t her delegation shared the concerns 
expressed by other colleagues regarding the current situation. The credibility and effectiveness of 
the Appellate Body was at the heart of the WTO. Chinese Taipei was open to ideas pertaining to 
reform the system. Chine se Taipei was of the view that the WTO Membership could benefit from WT/DSB/M/413  
 
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  further discussions on the issues that had been raised. Chinese Taipei, however, failed to see the 
need to link the appointment of new Appellate Body members to the systemic issues that h ad been 
raised. The Appellate Body played a very important role in the WTO system and therefore the 
vacancies should be filled urgently. Chinese Taipei, once again, expressed its readiness to engage 
with others, in a pragmatic manner, to ensure a swift res olution of this matter, which would be in 
the interest of the entire WTO Membership.  
11.11.   The representative of Thailand  said that her country thanked the Members who had 
submitted the joint proposal, and reiterated its support to launch the Appellate Body sele ction 
processes as soon as possible. Thailand also referred to its statements on this matter made at 
previous DSB meetings, and noted that Thailand continued to stand ready to engage constructively 
with all Members to find a prompt resolution of this matte r. 
11.12.   The representative of Singapore  said that his country reiterated its systemic concerns 
about the lengthy delays in launching the Appellate Body selection processes. Singapore had co -
sponsored the joint proposal to launch the selection processes, since i t had been first submitted at 
the November  2017 DSB meeting. The significant number of co -sponsors since then indicated the 
grave concerns that Members had over this impasse. There were only four out of seven Appellate 
Body positions filled, and the term o f another Appellate Body member was due to expire in 
four months, i.e. on 30  September  2018. Singapore noted that the Chairperson would be making a 
statement under the following Agenda item on the possible reappointment of this Appellate Body 
member. Singa pore called for constructive efforts in this regard. For as long as the vacancies were 
not filled as they arose, Singapore was moving even closer to an imminent paralysis of the 
Appellate Body. Given its heavy workload and significance, a fully -staffed App ellate Body was 
crucial to the proper functioning of the WTO dispute settlement mechanism, which, in turn, was an 
integral part of the rules -based multilateral trading system. The continued impasse adversely 
affected the credibility and functioning of the WTO, and it was essential that all current and future 
Appellate Body vacancies would be filled without any further delays. The systemic issues that had 
been raised could be discussed in a separate process. Singapore stood ready to engage 
constructively and  work with other Members, as well as the Chairperson, to help resolve this 
impasse.  
11.13.   The representative of India said that his country referred to its previous statements on this 
matter. India was a co -sponsor of the proposal to start the Appellate Body sel ection processes on 
a priority basis. India recognized that the WTO dispute settlement system was a central pillar in 
providing security and predictability to the multilateral trading system. The wide use of the WTO  
dispute settlement system, in the 23  years since its existence, was a testament to Members' trust 
in the independence and effectiveness of the system. It would be a severe blow to the rules -based 
multilateral trading system, if one of its central pillars would become ineffective.  India deeply 
regretted that the DSB had been unable to fulfil its legal obligation under Article  17.2 of the DSU 
to appoint Appellate Body members as vacancies arose. This was a serious and urgent concern for 
the multilateral trading system and threatened to undermine WT O Members' rights and 
obligations. India, therefore, urged all Members to engage constructively to resolve this issue as 
soon as possible. India remained committed to work with other interested Members to find a way 
to allow the selection processes to star t and to be completed as soon as possible.  
11.14.   The representative of Norway  said that it was essential for her country to maintain a well 
functioned dispute settlement system. Norway continued to encourage all Members to support the 
joint proposal to launch th e Appellate Body selection processes without further delay. It was 
imperative that all WTO Members worked together and showed flexibility and commitment to find 
solutions to surpass the current deadlock. As had been stated on previous occasions, Norway did  
not agree that the Appellate Body selection processes should be dependent on finding solutions to 
procedural issues related to the practice of the Appellate Body. Norway, however, reiterated its 
openness and willingness to listen seriously and engage cons tructively with all and any Member on 
their grievances with the system.  
11.15.   The representative of Pakistan  said that his country referred to its previous statements on 
this matter made at previous regular DSB meetings. Pakistan expressed, once again, its conce rn 
about the current impasse. Pakistan agreed that the WTO dispute settlement system was not 
perfect and that there were issues that needed to be fixed. However, the current priority was to 
ensure a fully operational Appellate Body. A dysfunctional system would not serve the rules -based 
system in the present environment, which required, at present more than ever, certainty and WT/DSB/M/413  
 
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  predictability. Pakistan supported the proposal that had been put forward at the present meeting 
by Mexico with regard to the Appell ate Body selection processes. Pakistan was one of the co -
sponsors and called on all Members to support the joint proposal.  
11.16.   The representative of the Russian  Federation  said that her country was deeply concerned 
about the continued US blockage with regard t o the selection processes, and the fact that the 
United  States linked the selection processes to the resolution of the problem. For the past half 
year, the United  States had neither indicated the concrete problem, nor suggested possible means 
for a resolut ion. WTO Members were thus unable to engage in a meaningful discussion and to 
move towards a resolution of the issue that had been raised. Despite of having been taken under 
the pretence of complying with existing rules, unilateral actions, such as these, destroyed the trust 
in the multilateral process and contributed to chaos in the rules -based multilateral trading system. 
There was always scope for improvement, however, such improvement should not be contrary to 
the well -functioned  WTO dispute settlement mechanism, and the multilateral trading system, as a 
whole. The Russian Federation called on the United  States to either provide a clear picture of the 
problem at issue and possible solutions, or to stop the blockage.  
11.17.   The representative of Switzerland  said that his country referred  to its previous statements 
on this matter. In particular, Switzerland reiterated its deep systemic concerns about this ongoing 
deadlock and the threat that it posed to the functioning and effectiveness of the WTO dispute 
settlement mechanism. Switzerland noted a broad readiness across the WTO Membership to seek 
a workable way forward and called for urgent, constructive engagement by all interested Members, 
especially the Member that had, once again, expressed its concerns abo ut the functioning of the 
Appellate Body.  
11.18.   The representative of Brazil  said that, for the past 18  months, Members had been 
concerned about t he unfilled vacancies in the Appellate Body. Brazil regretted that this serious 
crisis was bringing the WTO dispute settlement system very close to the risk of a paralysis. The 
current impasse undermined the rules -based multilateral trading system. One could not have a 
well-functioned rules -based system without a well -functioning and well -structured body that acted 
as the guarantor of the rules. The ongoing deadlock already resulted in nullification and 
impairment of the rights of Members under the DSU. Constant and longer delays were now a 
reality, and legal uncertainties arose that could a ffect Members' rights under Articles  16.4 and  17.4 
of the DSU. Brazil wondered who would bear the costs of tangible and substantial damages 
incurred by Members if they could no longer count on this system to settle their trade disputes. 
Sixty-seven Members , including Brazil, had co -sponsored the joint proposal to immediately launch 
the Appellate Body selection processes, which Brazil considered a collective legal obligation. The 
DSU rules were clear in this regard, a reading of Articles  2 and  17.2 of the DS U demonstrated that 
a formal action or decision, on the part of the DSB, was not required to launch such a process.  
This task would seem to fall into the range of the Chairperson's regular duties of conducting DSB 
matters and the Agenda for DSB meetings. A  formal decision was mandatory for the appointment 
or reappointment of a member to serve or to continue to serve on the Appellate Body. For 
example, the first sentence of Article  17.2 of the DSU provided that the "DSB shall appoint" 
persons to the Appellat e Body, the latter part of that Article used the passive voice to indicate that 
"vacancies shall be filled as they arise", suggesting that the previous procedural steps to initiate or 
launch a selection or reappointment process would not require a DSB deci sion. 
11.19.   Like others, Brazil had consistently stated that it was ready to discuss, in a constructive 
manner, the concerns of any Member with regard to the functioning of the Appellate Body, 
including Rule  15. Although Members were willing to engage in substan tive discussions, 
unfortunately no ideas or proposals on how to address these concerns were forthcoming.  It was 
hard to see how Members would make any progress on this issue. Conceptual texts and proposals 
were needed in order for Members to exchange ideas  and to permit distinct interpretative views to 
be put to test. This eventually could enable Members to reach a solution that would be acceptable 
to all Members. If not, Members would continue to go round in circles and would get no results. 
Brazil also st rongly believed that linking the two issues, namely, the Appellate Body selection 
processes and the discussions on the functioning of the Appellate Body, was not helpful and lacked 
any merits. Finally, Brazil invited the Member who made this link to recons ider its position.  
11.20.   The representative of Korea  said that his country supported the statement made by 
Mexico, on behalf of the co -sponsors of the joint proposal. As had  been mentioned at the 
27 April 2018 DSB  meeting, it was not only the Appellate Body itse lf but the entire multilateral WT/DSB/M/413  
 
- 31 - 
 
  trade system that had weakened due to the current deadlock. If there was any need to discuss 
systemic concerns surrounding the Appellate Body, Korea believed that this could be done 
separately, while proceeding with the Appel late Body selection processes in a swift manner. With 
this in mind, Korea stood ready to engage in the discussions and to show flexibilities so as to 
resolve the current situation.  
11.21.   The representative of Ukraine  said that his country wished to be associated  with the 
statement made by Mexico, on behalf of the co -sponsors of the joint proposal, and expressed its 
serious concern about the current situation regarding the Appellate Body selection processes. 
Ukraine reiterated that the proper functioning of the Ap pellate Body was of utmost importance, 
and remained fully committed to ensure the proper functioning of the Appellate Body. Ukraine 
regretted that, once again, the WTO Membership could not take a decision on this important issue. 
Ukraine was disappointed t hat the deadlock continued. The present situation gave rise to questions 
with regard to the predictability of the situation which the WTO Member ship would face in 
September  2018. The only option was a constructive dialogue and comprehensive engagement. 
Ukraine invited Members to make all possible efforts to resolve this situation.  
11.22.   The representative of Hong Kong, China  said that her delegation wished to refer to its 
statement made on this matter previously. Hong Kong, China was one of the co -sponsors of the  
joint proposal submitted by Mexico at the present meeting. Hong Kong, China encouraged other 
Members to support this proposal. Hong Kong, China reiterated its deep concern with the 
prolonged impasse over the Appellate Body selection processes. The present  situation was 
threatening the effective functioning of the WTO dispute settlement system. Vacancies in the 
Appellate Body should be filled as quickly as possible without any delay. While Hong Kong, China 
took note that some procedural concerns had been ra ised by a Member, it did not see a linkage 
between the Appellate Body selection processes and a discussion to address the systemic concerns 
that had been raised. Hong  Kong, China was prepared and committed to engage with all Members, 
in a constructive mann er, to address these concerns. Hong  Kong, China invited the concerned 
Members to submit concrete proposals to facilitate meaningful discussions.  
11.23.   The representative of China  said that his country referred to its previous statements made 
on this matter and i ts statement made under Agenda items  8 and  9 at the present meeting. As 
China had stated at previous DSB meetings, the United States had an obligation to respect all 
rules, to which it had previously agreed, and to interpret those rules in good faith. Arti cle 17.1 of 
the DSU provided that, "such rotation shall be determined in the working procedures of the 
Appellate Body". Rule  15 of  the Working Procedures for Appellate Review was in line with the 
mandate of the Appellate Body under the DSU. China was well aware that its own understanding of 
this matter was different from that of the United States. In this regard, China believed that when 
Members' views on specific issues differed, discussions and negotiations were the only way 
forward. The WTO Membership co uld start such a discussion as soon as possible. However, given 
the US refusal to engage in meaningful discussions, China was skeptical about the US intentions in 
raising concerns regarding Rule  15. 
11.24.   The representative of Japan  said that his country support ed the joint proposal and referred 
to Japan's statements made on this matter at previous DSB meetings.  
11.25.   The representative of Honduras  said that her country supported the statement made by 
Mexico, on behalf of the co -sponsors, as well as the statement made by Colombia, on behalf of the 
GRULAC. The WTO dispute settlement system was one of the key pillars of the WTO. Honduras 
was an active user of the system and, thus, reiterated its concern with regard to the present 
impasse, which challenged the entire pilla r and, as a consequence, the entire rules -based 
multilateral trading system. Honduras encouraged all Members to show flexibility and their will to 
reach an outcome and a solution to overcome the present impasse, as this would be beneficial for 
every WTO Me mber.  
11.26.   The representative of Mexico , speaking on behalf of the 67 co -sponsors of the proposal, 
said that the proponents regretted that, for the eleventh time, the WTO Membership had not 
achieved consensus to start the Appellate Body selection processes and had, thus, failed to fulfil 
their duty as WTO Members. No discussion should prevent the Appellate Body from continuing to 
function fully and WTO Members should comply with their DSU obligations to fill the vacancies as 
they arose. By failing to act at the present meeting, the DSB would sustain the current situation, WT/DSB/M/413  
 
- 32 - 
 
  which was seriously affecting the work of the Appellate Body against the best interest of its 
Members.  
11.27.   The representative of Uruguay  said that her country referred to the statements made at 
previous DSB meetings on this matter. Uruguay was one of the 67  Members that supported the 
joint proposal, which had been introduced by Mexico at the present meeting. Uruguay also 
supported the statement made by Colombia, on behalf of the GRULAC.  
11.28.   The represent ative of Guatemala  said that his country understood and shared the 
disappointment and concerns, which had been expressed by other Members. Guatemala had 
listened carefully to the statements made by all Members. It was encouraging to hear many 
expressions i n favour of a constructive dialogue and readiness to address the concerns raised by 
the United States. In this regard, the present DSB meeting was not different from the previous 
DSB meetings. Until now, Members had not formally engaged in substantive conv ersations to 
resolve the current crisis. There was no clarity on whether a solution to the procedural issues 
identified by the United States would lead to its agreement to appoint new Appellate Body 
members. WTO Members needed clarity about the extent and the nature of the problem and the 
concerns that they should address, as well as the outcome, which could be expected, if Members 
would engage with the United  States on this matter. Guatemala stood ready to work with the 
United  States and all Members in fin ding solutions. On a related issue , it was  Guatemala's view 
that the DSU did not provide for the adoption of Panel and Appellate Body reports by positive 
consensus. There were no rules in the DSU that would allow a Member to unilaterally qualify the 
legal nature or existence of an Appellate Body report.  
11.29.   The representative of Ecuador  said that his country referred to its statement made at the 
previous DSB meeting. Ecuador reiterated its position that, pursuant to Article  17.2 of the DSU, 
vacancies should be filled as soon as they arose. In Ecuador's view, it was the prerogative of the 
Chairperson to make a decision to start the selection processes as soon as possible to fill the AB 
vacancies for the benefit of the dispute settlement system.  Ecuador supported Brazil's position that 
it was not necessary to seek a decision on this matter and that the selection process could start 
without a formal DSB decision, as suggested by Brazil.  
11.30.   The representative of Turkey  said that as a co -sponsor of the joint proposal, hi s country 
was, once again, deeply disappointed to see that the DSB had failed yet again to launch the 
Appellate Body selection processes. The concerns, which had been raised by the United States vis-
à-vis the Working Procedures for Appellate Review should be dealt with separately and should not 
block the start of the selection processes. Turkey also urged the United States to table concrete 
proposals to facilitate the discussion. Turkey stood ready to work with the United States and other 
WTO Members.  
11.31.   The r epresentative of Costa  Rica said that his delegation echoed the concerns that had 
been raised with regard to this matter. Costa Rica supported the statements made by Mexico, on 
behalf of the co -sponsors of the joint proposal, as well as by Colombia, on beh alf of the GRULAC. 
Costa  Rica underscored the importance of maintaining an operational DSB, as well as the WTO 
Membership's compliance with Article  17.2 of the DSU by filling the Appellate Body vacancies as 
soon as possible. Costa  Rica stood ready to addre ss any systemic concerns and to consider any 
proposal to improve the WTO dispute settlement system. Such discussions, however, should not 
obstruct the designation of new Appellate Body members. The Appellate Body selection processes 
should start as soon as  possible, as set out in the joint proposal.  
11.32.   The representative of New Zealand  said that her country referred to its  previous 
statements and reiterated its serious concern with reg ard to the ongoing impasse. New  Zealand 
considered that the Appellate Body s election processes should be a routine matter and that the 
WTO Membership had to urgently launch a process to make Appe llate Body appointments. As 
New Zealand had stated previously, delays in appointing Appellate Body members threatened the 
efficient and e ffective functioning of the WTO dispute settlement system, and had the potential to 
undermine the broader rules -based multilateral trading system. This should be of concern to all 
Members. New  Zealand was pleased to co -sponsor, along with so many other Mem bers, the joint 
proposal, which had been introduced by Mexico, to launch the Appellate Body selection processes. 
New Zealand encouraged other Members to join the proposal. As had been stated previously, while 
New Zealand did not agree with the linkages dra wn, New  Zealand once again wished to confirm its 
willingness to engage constructively with all Members and the Chairperson in order to address the WT/DSB/M/413  
 
- 33 - 
 
  concerns that had been raised, so that the WTO Membership could move forward and fill the 
Appellate Body vaca ncies as soon as possible.  
11.33.   The Chairperson  thanked all delegations for their statements and said that it was 
regrettable that the DSB was not in a position, at the present meeting, to agree to launch the 
selection processes to fill the Appellate Body vacan cies. She noted that this matter required 
political engagement on the part of all Members. The Chairperson said that she was in the hands 
of Members and her door was open to any delegation wishing to share ideas or views on how to 
proceed with this matter.  She then invited the delegations that had any views on this matter to 
contact her directly.  
11.34.   The DSB took note  of the statements.  
12  STATEMENT BY THE CHA IRPERSON REGARDING T HE POSSIBLE REAPPOIN TMENT OF 
ONE APPELLATE BODY M EMBER  
12.1.   The Chairperson  said that, unde r this Agenda item, she would like to make a short 
statement concerning the issue of possible reappointment of one Appellate Body member. The first 
four-year term of office of Mr. Shree Baboo Chekitan Servansi ng would expire on 
30 September  2018. Pursuant to Article  17.2 of the DSU, he was eligible for reappointment to a 
second and final term of office. In light of this, the Chairperson informed th e WTO Membership 
that on 15  May 2018, she had received a letter from Mr. Servansing regarding this issue. In th e 
mentioned letter, Mr.  Servansing had indicated that, as envisaged in Article  17.2 of the DSU, he 
would like to convey his interest to the DSB to be considered for reappointment as an Appellate 
Body member. The Chairperson said that it was her intention t o consult informally with delegations 
on the issue of possible reappointment of Mr. Servansing as well as on the process to be followed 
in this regard. She also invited any delegation with views on this matter to contact her directly, 
and said that she wou ld report on her consultations at the next regular DSB meeting.  
12.2.   The representative of South Africa , speaking on behalf of the African Group, thanked the 
Chairperson for this Agenda item and for her proposal to initiate consultations with regard to 
Mr. Servansing's possible reappointment. The African Group was concerned with regard to the 
recent developments that could undermine the functioning of the WTO dispute settlement system, 
and could pose unprecedented systemic risks to the multilateral trading syste m. At the centre of 
this matter had been the prolonged impasse in initiating the Appellate Body selection processes to 
fill the three current vacancies. South Africa had heard the concerns, which had been raised with 
regard to the current functioning of th e Appellate Body, and was of the view that, in an effort to 
address them, these concerns could be subject to engagement and discussions in good faith. In 
some cases, the concerns needed to be identified more clearly. South Africa was of the view that, 
all in all, some of the concerns appeared amenable for resolution in the short term, while some 
other concerns could require deeper discussion. In any case, South Africa would support an 
engagement on all the issues, which had been raised, with a degree of urg ency. With regard to the 
question of Mr. Servansing's possible reappointment for a second term, South Africa understood 
that this would need to be resolved by September  2018. The A ppellate Body member seeking 
re-appointment was from Africa. South  Africa be lieved that the consultations had to begin instantly 
to ensure that the DSB would be in a position to take a decision by September 2018. Recent 
practices, which had been adopted by the DSB in this regard, could be followed. South Africa 
called on WTO Membe rs to act in good faith. South  Africa also supported the launch of the 
Appellate Body selection processes to fill the three current vacancies  in the Appellate Body , and 
called on all Members to engage in a constructive discussion with regard to the concern s in 
question, with a view to improving the effective functioning of the Appellate Body.  
12.3.   The DSB took note  of the statements.  
__________