RESTRICTED  
  
WT/DSB/M/385  
 
1 November  2016 
(16-5977) Page: 1/18 
Dispute Settlement Body  
26 September 2016    
 
MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 26 SEPTEMBER 2016  
Chairman: Mr. Xavier  Carim  (South Africa ) 
Prior to the adoption of Agenda , the item concerning the adoption of the Panel Report in the 
dispute on: " Russian  Federation – Measures on the Importation of Live Pigs, Pork and Other Pig 
Products from the European  Union " (DS475) was removed from the proposed Agenda following the 
Russian Federation's decision to appeal the Report.  
Table of Contents  
1   SURVEILLANCE OF IMPL EMENTATION OF RECOMM ENDATIONS ADOPTED BY  
THE DSB ................................ ................................ ................................ ...........................  2 
A.  United  States – Anti–dumping measures on certain hot –rolled steel products from 
Japan: Status repor t 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 ................................ ................................ ....... 3 
2   UNITED  STATES – CONTINUED DUMPING AN D SUBSIDY OFFSET ACT  
OF 2000: IMPLEMENTATION O F THE RECOMMENDATION S ADOPTED BY THE  DSB ...........  4 
A.  Statements by the European  Union and Japan  ................................ ................................ ... 4 
3   CHINA – CERT AIN MEASURES AFFECTI NG ELECTRONIC PAYMEN T SERVICES  .............  5 
A.  Statement by the United  States  ................................ ................................ .......................  5 
4   UNITED STATES - COUNTERVAILING MEA SURES ON CERTAIN HOT -ROLLED 
CARBON STEEL FLAT PR ODUCTS FROM INDIA  ................................ ................................ . 5 
A.  Statement by India  ................................ ................................ ................................ ........  5 
5   INDIA – MEASURES CONCERNING THE IMPORTATION OF CERTA IN 
AGRICULTURAL PRODUCT S ................................ ................................ ..............................  7 
A.  Statement by the United  States  ................................ ................................ .......................  7 
6   COLOMBIA – MEASURES CONCERNING IMPORTED  SPIRITS  ................................ ...... 10 
A.  Request for the establishment of a panel by the European Union ................................ ......... 10 
7   RUSSIA – TARIFF TREATMENT OF CERTAIN AGRIC ULTURAL AND 
MANUFACTURING PRODUC TS................................ ................................ .........................  10 
A.  Report of the Panel ................................ ................................ ................................ ........ 10 WT/DSB/M/385  
 
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  8   UNITED  STATES – ANTI -DUMPING AND COUNTERV AILING MEASURES ON  
LARGE RESIDENTIAL WA SHERS FROM KOREA  ................................ ...............................  12 
A.  Report of the Appellate Body and Report of the Panel  ................................ ........................ 12 
9   APPELLATE BODY MATTE RS ................................ ................................ ......................  17 
10   ANNOUCEMENT BY ARGEN TINA REGARDING THE S ESSION ENTITLED: "WT O 
DISPUTE SETTLEMENT S YSTEM FROM A LATIN A MERICAN PERSPECTIVE"  ....................  18 
11   DISPUTE SETTLEMENT W ORKLOAD  ................................ ................................ .........  18 
A. Statement by the Chairman  ................................ ................................ ............................. 18 
 
 
1  SURVEILLANCE OF IMPL EMENTATION OF RECOMM ENDATIONS ADOPTED BY  THE DSB 
A.  United  States – Anti–dumping measures on certain hot–rolled steel products from Japan: 
Status report by the United  States (WT/DS184/15/Add.164)  
 
B.  United  States – Section  110(5) of the US Copyright Act: Status report by the United  States 
(WT/DS160/24/Add.139)  
 
C.  European  Communities – Measures affecting the approval and marketing of biotech products: 
Status report by the European  Union (WT/DS291/37/Add.102)  
 
 
1.1.  The Chairman  noted that there were three sub -items under this Agenda item concerning 
status reports submit ted by delegations pursuant to Article  21.6 of the DSU. He recalled that 
Article  21.6 required that: "Unless 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 this Agenda item, he 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. He reminded delegations that, as provided 
for in Rule  27 of the Rules of Procedure for DSB meetings: "Representatives should make every 
effort to avoid the re petition 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 no change in Members' 
positions already on record". He then turned to the first status report under this Agenda i tem. 
A.  United  States – Anti–dumping measures on certain hot–rolled steel products from 
Japan: Status report by the United  States (WT/DS184/15/Add.164)  
1.2.  The Chairman  drew attention to document WT/DS184/15/Add.164, which contained the 
status report by the U nited States on progress in the implementation of the DSB's 
recommendations in the case concerning US anti -dumping measures on certain hot -rolled steel 
products from Japan.  
1.3.  The representative of the United  States  said that his country had provided a status  report in 
this dispute on 15  September  2016, in accordance with Article  21.6 of the DSU. The United  States 
had addressed the DSB's recommendations and rulings with res pect to the calculation of 
anti-dumping margins in the hot -rolled steel anti -dumping dut y investigation 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 repr esentative of Japan  said his country thanked the United  States for its statement and 
its status report submitted on 15  September  2016. Japan referred to its previous statements that 
this issue should be resolved as soon as possible.  
1.5.  The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/385  
 
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  B.  United  States – Section  110(5) of the US Copyright Act: Status report by the 
United  States (WT/DS160/24/Add.139)  
1.6.  The Chairman  drew attention to document WT/DS160/24/Add.139, which contained the 
status report by the United  States on progress in the implementation of the DSB's 
recommendations in the case concerning Section  110(5) of the US Copyright Act.  
1.7.  The representative of the United  States  said that his country had provided a status report in 
this dispute on 15  September  2016, in accordance with Article  21.6 of the DSU. 
The US Administration would continue to confer with the E U, and work closely with the 
US Congress, in order to reach a mutually satisfactory resolution of thi s matter.  
1.8.  The representative of the European  Union  said that the EU thanked the United  States for its 
status report and its statement. The EU referred to its statements made under this Agenda item at 
previous DSB meetings. The EU wished to resolve this dis pute as soon as possible.  
1.9.  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.102)  
1.10.   The Chairman  drew attention to document WT/DS291/37/Add.102, which contained the 
status report by the European  Union on progress in the implementation of the DSB's 
recommendations in the case concerning measures affecting the approva l and marketing of 
biotech products.  
1.11.   The representative of the European  Union  said that on 16  September  2016, the Commission 
had adopted an authorisation decision for one GM maize.1 Two other GMOs had been voted on, 
with a no opinion result, in the Standin g Committee on 8  July 2016 and in the Appeal Committee 
on 15  September  2016. In accordance with the applicable regulations, it was now for the 
Commission to decide on these authorisations. As stated pr eviously on many occasions, the  EU 
wished to recall tha t the EU approval system was not covered by the DSB's recommendations and 
rulings.  
1.12.   The representative of the United  States  said that his country thanked the EU for its status 
report and its statement at the present meeting. As the United  States had noted r epeatedly at past 
meetings of the DSB, EU measures affecting the approval and marketing of biotech products 
remained of substantial concern to the United  States. The EU measures were characterized by 
lengthy, unpredictable, and unexplained delays in approv als, even after the EU's scientific body 
had completed exhaustive and time -consuming safety reviews. The unwarranted delays between 
the mid -2015 scientific assessments and the final EU approvals of three soy products illustrated 
the ongoing problems with t he EU measures. Indeed, those delays had already caused adverse 
effects on trade in soybeans, and similar delays continued to affect corn exports. The 
United  States encouraged the EU to ensure that products in the biotech approval pipeline moved 
forward in  a timely manner as was required by EU regulations. For instance, many corn and soy 
products had now been under EFSA consideration for several years. The United  States urged the 
EU to ensure that its biotech approval measures were consistent with its oblig ations under the SPS 
Agreement.  
1.13.   The representative of the European  Union  thanked the representative of the United  States 
for his statement. The Commission was proceeding with the authorization of all genetically 
modified organisms that had received a favou rable opinion from the European Food Safety Agency. 
Therefore, the EU considered that it was complying with its obligations.  
1.14.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
                                                
1 Bt11 × MIR162 × MIR604 × GA21 . WT/DSB/M/385  
 
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  2  UNITED  STATES – CONTINUED DUMP ING AND SUBSIDY OFFS ET ACT OF  2000: 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE  DSB 
A.  Statements by the European  Union and Japan  
2.1.  The Chairman  said that this item was on the Agenda of the present meeting at the request of 
the European  Union and J apan, and he invited the respective representatives to speak.  
2.2.  The representatives of the European  Union  said that the EU requested, once again, that the 
United  States stop transferring anti -dumping and countervailing d uties to the US industry. 
Every  disbur sement 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 regarding imp lementation in this 
dispute.  
2.3.  The representative of Japan  said that since the distributions under the CDSOA continued, 
Japan urged the United  States to stop illegal distributions, once again, in order to resolve this 
long-standing dispute. As had been state d in previous meetings, Japan was of the view that the 
United  States was under obligation, in accordance with Article  21.6 of the DSU, to provide the DSB 
with a status report in this dispute.  
2.4.  The representative of Brazil  said that his country, as an origin al party to this dispute, thanked 
the EU and Japan, once again, for keeping this item on the Agenda of the DSB. Brazil referred to 
its previous statements made on this matter. Brazil referred specifically to the continuation of 
illegal disbursements, which  had continued even after the Byrd Amendment had been revoked 
in 2006, with effects starting in 2007. On the basis of the flawed argument that the disbursements 
referred to investigations initiated before that date, millions of dollars continued to be ille gally 
disbursed to the original petitioners of the investigations. Once a measure had been declared by 
the DSB to be WTO -inconsistent, it could not continue to produce its illegal effects into the future. 
Brazil renewed its call on the United  States to ful ly comply with the DSB's recommendations and 
rulings in this dispute. Until then, the United  States was under an obligation to submit status 
reports, in accordance with Article  21.6 of the DSU.  
2.5.  The representative of Canada  said his country thanked the EU a nd Japan for placing this 
matter on the Agenda of the DSB. Canada shared their view that the Byrd Amendment should 
remain under the surveillance of the DSB until the United  States stopped applying it.  
2.6.  The representative of China  said her country thanked th e EU and Japan for placing this item 
on the Agenda of the DSB . China  urged the United  States to come into full compliance with the 
DSB's rulings and recommendations on this matter  as soon as possible . 
2.7.  The representative of the United  States  said that, as h is country had noted at previous DSB 
meetings, the Deficit Reduction Act – which included a provision repealing the Continued 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, furthermore, that the EU, Japan, and other 
Members had acknowledged that the Deficit Reduction Act did not permit the distribution of duties  
collected on goods entered after 1  October  2007, ne arly nine years ago. The United  States 
therefore did not understand the purpose for which the EU and Japan had inscribed this item at the 
present meeting. With respect to comments regarding further status  report s in this matter, as the 
United  States had already explained at previous DSB meetings, the United  States failed to see 
what purpose would be served by further submission of status reports which would repeat, again, 
that the United  States had taken a ll actions necessary to implement the DSB's recommendations 
and rulings in these disputes. Indeed, as these very WTO Members had demonstrated repeatedly 
when they had been a responding party in a dispute, there was no obligation under the DSU to 
provide fu rther status reports once a Member announced that it had implemented those DSB 
recommendations and rulings, regardless of whether the complaining party disagreed about 
compliance.  
2.8.  The DSB took note  of the statements.  WT/DSB/M/385  
 
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  3  CHINA – CERTAIN MEASURES AFF ECTING ELEC TRONIC PAYMENT SERVI CES 
A.  Statement by the United  States  
3.1.  The Chairman  said that this item was on the Agenda of the present meeting at the request of 
the United  States and he invited the representative of the United  States to speak.  
3.2.  The representative of the United  States  said that his county recalled that the DSB had 
adopted its recommendations and rulings in this dispute in August  2012, and that the reasonable 
period of time had expired in July  2013. In June, China had issued a regulation that appeared t o 
set out a licensing application process for electronic payment service (EPS) suppliers to obtain 
authorization to do business in China. The United  States expected that with these regulations, 
China would allow for the approval of foreign EPS suppliers wi thout further delay, in accordance 
with China's WTO obligations. It continued to remain unclear whether China would, in fact, allow 
foreign EPS providers to operate in China. In the meantime, more than three years after the expiry 
of the RPT in this disput e, China's domestic supplier and national champion, China UnionPay , a 
business set up by the People's Bank of China and other Chinese Government -related entities, 
remained the only entity authorized to provide electronic payment services in China.  
3.3.  The repr esentative of China  said her country regretted that the United  States had, once 
again, brought this matter before the DSB. China referred to its statements made at previous DSB 
meetings and emphasized that China had taken all necessary actions and had full y implemented 
the DSB's recommendations and rulings in this dispute. China wished to reiterate that the 
regulation referred to by the United  States was not relevant to the implementation of the DSB 
recommendations and rulings in this dispute. Nor was the D SB meeting an appropriate forum to 
discuss China's domestic regulatory action, which was not relevant to this specific dispute.  
3.4.  The DSB took note  of the statements.  
4  UNITED STATES - COUNTERVAILING MEASU RES ON CERTAIN HOT -ROLLED CARBON 
STEEL FLAT PRODUCTS FROM INDIA  
A.  Statement by India  
4.1.  The Chairman  said this item was on the Agenda of the present meeting at the request of 
India and he invited the representative of India to speak.  
4.2.  The representative of India said that his country was, once again, forced t o raise the issue of 
the United  States' non -compliance and its failure to submit a status report, in accordance with 
Article  21.6 of the DSU, in this dispute. At the present meeting, India wished to highlight why it 
had, once again, raised this issue. This di spute involved certain countervailing duty investigations 
conducted by the US  Authorities that had been found to be inconsistent with th e WTO obligations 
of the United  States. Further, the Appellate Body had found that Sec tion 1677(G)(iii) of the 
Tariff Act of 1930 was inconsistent with the SCM Agreement since it required the USITC to 
cumulate the effects of subsidized imports with the effects of dumped, non -subsidized imports 
when petitions to initiate countervailing duty investigations or anti -dumping dut y investigations 
were filed on the same day and countervail ing duty investigations or anti -dumping duty 
investigations were initiated by the investigating authority. Consequently, the Appellate Body had 
found Section  1677(7)(G)(iii) of the US Statute to be  inconsistent "as  such" with Article  15.3 and 
Articles  15.1, 15.2, 15.4, and 15.5 of the SCM  Agreement.  
4.3.  The reasonable period of time to implement the rulings and recommendations of the DSB in 
this dispute had long expired. However, the United  States had n either repealed this sect ion nor 
modified it. The United  States had explained, in the previous DSB meeting that,  under US law, the 
US Department of Commerce "has discretion with respect to the timing of a self -initiated 
investigation. And, Commerce has con firmed its commitment to exercise its discretion in a manner 
that is consistent with the international obligations of the United  States". Therefore, the US 
claimed that no further action was needed. This explanation was erroneous, legally unsustainable 
and indicated a lack of understanding of the rulings and recommendations of the DSB in this 
dispute. The Appellate Body had categorically found, after a detailed analysis of the provisions and 
the SCM  Agreement, that Section  1677(7)(G)(iii) required cross -cumulation, which was, in fact WT/DSB/M/385  
 
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  prohibited under WTO law. The law, as it existed on the statute, was WTO -inconsistent. Therefore, 
for the United  States to argue that it had discretion to initiate an investigation and that it would 
exercise this discretion cons istently with its WTO obligations meant disregarding the DSB rulings 
and recommendations in this regard.  
4.4.  It was inappropriate for the United  States to dispute  this fact at this stage and re -open the 
arguments about the consistency of the statute on which t here had been a clear finding. 
The Appellate Body had completed its legal analysis and held that the relevant provision was 
inconsistent with the WTO obligations of the United  States. The Appellate Body's findings indicated 
a stage of finality and required  compliance. The US could not now disregard its obligations to 
comply with the Appellate Body's findings and the DSB recommendations by merely giving an oral 
commitment to act in a WTO -consistent manner . This was no t sufficient to remove the 
WTO-inconsiste ncy of the law.  
4.5.  The US approach undermined the integrity and effectiveness of the dispute settlement 
system. By merely stating that it would act in a WTO -consistent manner without either modifying 
or repealing the measure could not, ipso facto, result in c ompliance with WTO obligations. If that 
had been the case, it would have cast a serious doubt on the e ffectiveness of the system. The  
United  States was therefore bound to remove the inconsistency, by either deleting 
Section  1677(7)(G)(iii) entirely, or by amending it to ensure that USITC could not cumulate the 
effects of subsidized imports with the effects of dumped, non -subsidized imports. 
The United  States could not absolve itself from this responsibility by stating that an illusory 
"discretion" would be exercised in a manner consistent with its international obligations. India thus 
urged the United  States to fully comply with the DSB rulings and recommendations in this dispute 
and to provide a status reports as it was doing in other similar disputes.  
4.6.  The representative of the United  States  said that, as his delegation had explained at prior 
DSB meetings, the United  States had completed implementation with respect to the DSB 
recommendations and rulings in this dispute. As the United  States had also previous ly remarked, 
the US remained willing to discuss with India any questions it may have. India, however, had not 
contacted the United  States to do so. As the United  States had consistently explained to the DSB, 
and again today  under Agenda item  2, there was n o obligation under the DSU to provide further 
status reports once a Member announced that it had implemented those DSB recommendations 
and rulings, regardless of whether the complaining party disagreed about compliance. Based on its 
own decision not to pro vide a status report in the DS430 dispute, India would appear to share the 
US view, at least when it was India that was in the position of the responding party. Therefore, it 
was not clear on what basis India continued to press this erroneous point. With r espect to the "as 
such" finding on Section  1677(7)(G)(i)(III) of the Tariff  Act of 1930, the US had explained, both to 
India and to the DSB, that no further US action was needed. As the U nited States had explained 
before, under US law, the US Department of  Commerce had discretion with respect to the timing 
of a self -initiated investigation. And, to reiterate, Commerce had confirmed its commitment to 
exercise this discretion in a manner that was consistent with the international obligations of the 
United  States. Therefore, no further action was needed and India had no basis for its insistence 
that US law had to be changed in order for the United  States to comply with the DSB 
recommendations in this dispute. India was incorrect that the US claim of compliance was based 
on the statute never having been applied. While it was true that the statutory provision at issue 
had never been applied, as had just been noted, that was not the reason a change to the statute 
was not necessary. Given that the United  States had fully complied in this dispute, the 
United  States was not required to submit further status reports in this  matter.  
4.7.  The representative of India said his country thanked the United  State s for its statement. 
The issues pertaining to the DS430 dispute would b e addressed by India under the next agenda 
item in line with India's principled view on status reports. The United  States, however, could not 
absolve itself from its WTO obligations in this dispute an d India would assist the United  States with 
its obligati ons in the present dispute. As previously stated, there existed on the statute book a law 
that had been found to be WTO -inconsistent. Did that law exist at the present moment in the 
United  States? The answer was a categorical yes. The US explanation that C ommerce would act 
consistently with US WTO obligations, in spite of the law mandating cross -cumulation, flew in the 
face of logic. It did not remove or modify the WTO -inconsistent law from the statute book.  
4.8.  It was also pertinent to note that under Agenda i tem 1(a) and (b) of the present meeting, 
there were two disputes wherein provisions of a statute had been found to be inconsistent with the WT/DSB/M/385  
 
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  WTO obligations of the United  States. And the United  States was, to date, still providing status 
reports since these  provisions had remained on the statute book. Further, the statement s in the 
DSB with regard to these two disputes was educative of the US's inconsistent stand in the present 
dispute. Under Agenda item  1(a), the United  States explained: "With respect to th e 
recommendations and rulings of the DSB that have yet to be addressed, the US  Administration will 
work with the US Congress with respect to appropriate statutory measures that would resolve this 
matter".  Under  Agenda item  1(b) the United  States explained that: "The US  Administration will 
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". Therefore, in both these disputes, the US 
law continued to be WTO -inconsistent on the statute book, and the United  States stated that it 
was working with the US Congress to bring in appropriate measures.  
4.9.  India noted that the United  States continued to submit status reports which pertained to 
work on statutory amendments to domestic laws that had been found to be inconsistent with its 
WTO obligations and was yet to be modified or repealed. Though compliance was less strict  in the 
DSB, in terms of the time taken to comply, the approach of the United  States in providing a st atus 
report was consistent with the DSU. It was disappointing to note a different legal standard being 
pursued in the present dispute, which pertained to essentially the same issue – a law  which was 
WTO-inconsistent. Though these were different disputes wi th different sets of facts and law, the 
legal qu estion was the same. The United  States, surprisingly, did not believe that it was necessary 
to provide a status report in this case. Neither did it believe that it needed to work on repealing or 
modifying the  statute. A mere statement that it would exercise "discretion" in a WTO -consistent 
manner did not remedy the inconsistency or lack of compliance. While one standard recognized the 
inconsistency and continued to file status reports, the other absolved any r esponsibility. India 
therefore urged the United  States to follow the standard it had set in other disputes and to fully 
comply with the rulings and recommendations of the DSB in this d ispute. Until  then, it had to file 
status reports as it did in other sim ilar disputes.  
4.10.   The DSB took note  of the statements.  
5  INDIA – MEASURES CONCERNING THE IMPORTATION OF C ERTAIN AGRICULTURAL 
PRODUCTS  
A.  Statement by the United  States  
5.1.  The Chairman  said that this item was on the Agenda of the present meeting at the request of 
the United  States and he invited the representative of the  United  States to speak.  
5.2.  The representative of the United  States  said that Members would recall that this dispute had 
been discussed at three recent meetings of the DSB. India had objected to the le vel of suspension 
requested by the United  States, referred the matter to arbitration, and that arbitration was 
currently in progress. Nonetheless, the United  States remained open to working with India on a 
mutually agreed resolution to this dispute and had  been engaging with India to this end. In late 
July, India had adopted a measure that revised certain aspects of the measure at issue in the 
dispute. Unfortunately, the revised measure had appeared to retain many of the features of India's 
prior measure th at the DSB had already found to be inconsistent with India's obligations under the 
SPS Agreement. At the previous DSB meeting, the United  States had provided several examples. 
On 22  September 2016, India had notified an amendment to the measure that it had  notified 
in July. The United  States was studying this ame ndment carefully. As the United  States had had it 
for only one full business day prior to the present meeting, the United  States was not prepared to 
comment on it.  
5.3.  With respect to India's claim in i ts communication of 22  September  2016 that its measures 
were now in compliance with the DSB's recommendations, the United  States noted that India had 
now made three different claims of compliance to the DSB in this dispute. First, in India's status 
report of 10  June 2016, India had claimed that finalization of its draft measure "would bring India 
into full compliance".2 Second, in India's communication of 19  July 2016, India had claimed that, 
due to the final measure it had published on 8  July 2016, which h ad been different from its draft 
measure, India had fully complied with the DSB recommendations and rulings.3 Third, as noted, 
                                                
2 WT/DS430/15.  
3 WT/DS430/18.  WT/DSB/M/385  
 
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  India had now amended the measure that it notified on 19  July 2016 and made a third compliance 
claim. Given the number of measure s India had pointed to, one wondered which of those 
compliance claims India considered to be correct. The United  States would continue to preserve 
and enforce US rights under the DSU. Despite the fact that India had not engaged with the 
United  States on th e substance of any changes to its measure until after both the expiry of the 
reasonable period of time and the US submission of a request under Arti cle 22.2 of the DSU, the 
United  States was actively engaging with India to seek the resolut ion of this dispu te. 
The United  States hoped that India would come into compliance with its WTO obligations without 
need for further proceedings under the DSU.  
5.4.  The representative of India said that, on 19  June 2015, the DSB had adopted its 
recommendations and rulings i n "India – Measures Concerning the Importation of Certain 
Agricultural Products" (DS430). At the  following DSB meeting, India had informed the DSB of its 
intention to implement the DSB's recommendations and rulings in connection with this matter. On  
8 December  2015, India and the United  States had informed the DSB that they had agreed on a 
reasonable period of time, up to 19  June 2016, for India to implement the recommendations and 
rulings. On 8  July 2016, India had published, notification S.O. 2337(E) in its O fficial Gazette, which 
had superseded the previous notification S.O. 1663(E).4 India had notified the DSB, on 
18 July 2016 that  it had adopted measures necessary to comply with the recommendations of the 
DSB.5 Notification  S.O. 2337(E) complied with the re commendations of the DSB in this dispute as 
it: (i) allowed import of poultry and poultry products into India in accordance with the relevant 
international standard, i.e. the OIE Terrestrial Animal Health Code ("Terrestrial Code"); 
(ii) recognized the conc ept of disease -free areas; and (iii) provided for a process to be followed for 
recognition of such disease -free areas, zones/compartments, in conformity with the Terrestrial 
Code and the SPS  Agreement. In this respect, India had also issued the relevant gu idelines 
referred to in notification S.O. 2337(E) as well as the questionnaire for recognizing a part of a 
country, zone/compartment for the purpose of trade in poultry and poultry products.  
5.5.  After the publication of S.O. 2337(E), India and the United  State s had entered into bilateral 
discussions to address additional concerns raised by the United  States and, pursuant to the same, 
India had further amended notification S.O. 2337(E) vide S.O. 2998(E) dated 
19 September  2016.6 The amendment notification had be en notified to the SPS Committee.7 It had 
also been notified to the DSB on 22  September  2016 and was found in WT/DS430/19. 
Notification  S.O. 2337(E), dated 8  July 2016, and the amendment notification S.O. 2998(E) dated 
19 September  2016, the guidelines, an d the questionnaire, together formed the "revised Avian 
Influenza measures". The notifications had been issued in exercis e of the power conferred by 
sub-section  (1) of Section  3 and Section  3A of the Livestock Act, 1898 (9 of 1898) and had come 
into effect  from the date of their publication in the Official Gazette. In view of the above, India 
strongly considered that it had brought itself into conformity with its WTO obligations. It had 
complied with the recommendations of the DSB by rectifying the inconsis tencies in S.O 1663(E) 
and by issuing notification S.O. 2337(E) and amendment notification S.O. 2998(E), as well as the 
guidelines and questionnaire.  
5.6.  India was disappointed that the United  States had raised this issue at the DSB again despite 
the fact that  India was engaged in good faith efforts to discuss and resolve the issue with the 
United  States. The measure that had been found to be inconsistent by the DSB was no longer in 
force. It had been superseded and a revised measure consisting of S.O.  2337(E) and 
S.O. 2998(E), as well as the guidelines and questionnaire, were in force. Unlike the previous 
dispute, where the United  States had not taken any measure to remove the inconsistent statute 
and still claimed compliance, it was abundantly clear that India  had "revised measures" in place in 
this dispute.  
5.7.  Finally, India drew attention to the fact that, despite requests from India, the United  States 
had not entered into a sequencing agreement in this dispute which was a standard practice among 
the WTO Members . A sequencing agreement was entered into in order to ensure that, in the event 
of disagreement between the parties with respect to compliance with the DSB's rulings and 
recommendations, recourse under Article  21.5 of the DSU should be pursued as the first  option. 
                                                
4 See http://egazette.nic.in/WriteReadData/2016/170589.pdf . 
5 Communication from India, WT/DS430/18 circulated on 19 July 2016.  
6 See http://egazette.nic.in/WriteReadData/2016/171799.pdf . 
7 See G/SPS/N/IND/160 . WT/DSB/M/385  
 
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  It brought about predictability and certainty to the dispute settlement process and had been 
consistently used by Members over time . It would be relevant to note in this context that in the 
dispute that the US had been a respondent,  which was the subject matter of the previous Agenda 
item, India had entered into a sequencing agreement without any conditions. It would augur well 
for the system if the United  States maintained a uniform practice when it was a complainant as 
well as a respondent, in th e interests of the WTO dispute settlement system as a whole. Instead, 
on 7 July 2016, the United  States had made a request pursuant to Article  22.2 of the DSU seeking 
authorization from the DSB to suspend concessions under the covered agreements in the amo unt 
of US$450 million in  2016, which would be updated annually. India had objected to this request.8 
To date, the United  States had not agreed to suspend the arbitration proceedings under 
Article  22.6 of the DSU. In view of the fact that India had brought itself into conformity with its 
WTO obligations, India would urge the United  States to terminate the Article  22.6 proceedings in 
this dispute.  
5.8.  The representative of the United  States  said that, under Article  22.6 of the DSU, the negative 
consensus rule app lied within 30  days of the end of the period for compliance. By submitting the 
Article 22.2 request, the United  States had preserved its negative consensus rights. Taking this 
step had neither been surprising nor unusual. Similar actions had been taken in other disputes. 
The United  States noted that, as of the end of the reasonable period of time, and indeed as of the 
time of the US request under Article  22.2 of the DSU, India had not even claimed that the 
measures that were the subject of the DSB 's recomme ndations and rulings had been withdrawn or 
modified. As the United  States had noted, it remained prepared to engage with the Government of 
India to facilitate its coming into compliance with the DSB's recommendations and rulings in the 
DS430 dispute. Regar ding India's point on sequencing agreements, there was nothing in the DSU 
that required Members to enter into a sequencing agreement. Members had found it appropriate to 
do so in many circumstances. But India had taken no steps to address the DSB's recomme ndations 
as of the time when the United  States had taken procedural action to preserve its rights under 
Article  22. Members had often agreed, through sequencing agreements or otherwise, to conduct 
proceedings in such an order, but as Members were well awar e, this is not required under the 
DSU. 
5.9.  The representative of India said that the United  States had asserted that, at the end of the 
reasonable period of time, and indeed as of the time of the US request under Article  22.2 of the 
DSU, India had not even cla imed that the measures, that were the subject of the DSB's 
recommendations and rulings, had been withdrawn or modified and that it had been necessary to 
preserve and enforce US rights under the DSU. It must be noted that India had repeatedly been 
pursuing the issue of the sequencing agreement, as was the practice, even during the reasonable 
period of time. Entering into a sequencing agreement at this stage would have continued to 
preserve and enforce US rights under the DSU. India had notified its revised m easure on 
8 July 2016, just a day after the United  States had made a request under Article  22.2 of the DSU. 
Thereafter, India had requested the United  States to suspend the arbitration request in light of 
India's revised measure. This too could have been a ccomplished with a simple sequencing 
agreement, which preserved the rights of both parties. The United  States had not shown any 
willingness to do so; even after India's revised measure. Therefore, while India continued to take 
all good faith efforts to eng age with the United  States to resolve the dispute, it was disappointing 
that the United  States raised this Agenda item again at the DSB. India continued to be ready to 
engage with the United  States to resolve the issue.  
5.10.   The representative of the European  Union said the EU referred to its statement made at the 
special DSB meeting on 19  July 2016. The EU continued to hope that India and the US would 
ensure that the DSU provisions, with regard to compliance and suspension of obligations in this 
dispute, were c onducted efficiently and in the correct sequence. The EU would continue to follow 
the developments in this dispute.  
5.11.   The DSB took note  of the statements.  
                                                
8 See its communication to the DSB dated 18  July 2016 and at the DSB meeting held on 19  July 2016.  WT/DSB/M/385  
 
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  6  COLOMBIA – MEASURES CONCERNING IMPORTED SPIRITS  
A.  Request for the establishment of a panel by the Eur opean Union (WT/DS502/6)  
6.1.  The Chairman  recalled that the DSB had considered this matter at its meeting on 
5 September  2016 and had agreed to revert to it. He drew attention to the communication from 
the EU contained in document WT/DS502/6, and invited the r epresentative of the EU to speak.  
6.2.  The representative of the European  Union  recalled that, at the 5  September  2016 DSB 
meeting Colombia had objected to the EU request for a panel concerning Colombia's discriminatory 
treatment of imported spirits. Therefore,  in accordance with the DSU, such a panel would be 
established at the present DSB meeting. The EU reiterated its support of the ongoing legislative 
process in Colombia and encouraged Colombia to continue its good efforts towards the long 
awaited reform of the spirits regime so that EU spirits would no longer be discriminated against in 
the Colombian market.  
6.3.  The representative of Colombia  said that his country regretted the EU's request for the 
establishment o f the panel in this matter. As indicated at the p revious DSB meeting, Colombia was 
working hard to adopt a Reform Bill that would make extensive changes to its spirits regime. 
Colombia had been working with a wide range of stakeholders, including the exporters represented 
by the EU, to ensure the adoptio n of a comprehensive and effective reform package. Since the 
previous DSB meeting, Colombia had continued to make significant progress on the enactment of 
the bill. There had been continuing discussions of the bill with stakeholders, including those that 
represented diverse importer interests. This should be viewed in the context of a busy legislative 
agenda due to the peace agreement that would be signed on the day. As a result, Colombia's 
Congress would not be in session that week. Colombia expected Congr ess to resume work on the 
bill in the week beginning 3  October  2016, and, with the cooperation of all concerned, Colombia 
hoped that the process would be completed in the following weeks. As it had been consistently 
explained to the EU, Colombia was concer ned that the establishment of a panel at the present 
meeting could have adverse effects on the legislative process in Colombia by undermining the 
political support for the bill. Colombia would therefore have preferred it if the EU had awaited the 
outcome o f the legislative process before pursuing the WTO dispute settlement process any 
further. Colombia considered that it was more productive to look forward and to achieve effective 
reforms than to have to divert attention to looking back at wh ether there mig ht have been 
WTO-inconsistencies in the previous system. Therefore, Colombia regretted the EU's premature 
decision to seek the establishment of a panel in this matter. Now that the EU had chosen to take 
this step, Colombia hoped the EU would take pause to allow and facilitate the conclusion of the 
reform process. Colombia's expectation was also that the EU would work cooperatively with 
Colombia concerning the next steps in this dispute.  
6.4.  The representative of the United  States  said his country had participat ed as a third party in 
the consultations in this dispute, in light of the US substantial tr ade interest in the matter. 
The United  States had repeatedly expressed concerns to Colombia regarding the taxation of 
alcoholic beverages and certain practices of de partmenta l level alcohol monopolies. 
The United  States urged Colombia to address this matter expeditiously.  
6.5.  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.  
6.6.  The representatives of Brazil , Canada , Chile, China , El Salvador , Guatemala , India, 
Kazakhstan , Korea , Mexico , Panama , the Russian  Federation , Chinese  Taipei  and the United  States  
reserved their third -party rights to participate in the Panel's proceedings.  
7  RUSSIA – TARIFF TREATMENT OF CERTAIN AGRICULTURAL  AND MANUFACTURING 
PRODUCTS  
A.  Report of the Panel (WT/DS485/R , WT/DS485/R/Add.1 , WT/DS485/R/Corr.1 and 
WT/DS485/R/Corr.2)  
7.1.  The Chairman  recalled that, at its meeting on 25  March  2015, the DSB h ad established a 
Panel to examine the complaint by the EU pertaining to this dispute. The Report of the Panel, WT/DSB/M/385  
 
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  contained in document WT/DS485/R and Add.1 had been circulated on 12  August  2016 as an 
unrestricted document. The Panel Report was now before the  DSB for adoption at the request of 
the EU. This adoption procedure was without prejudice to the right of Members to express their 
views on the Panel Report.  
7.2.  The representative of the European  Union  thanked the Panel and the Secretariat for their  
work in t his dispute. The EU welcomed the findings of the Panel. The Panel had upheld EU claims 
with regard to eleven out of twelve measures challenged by the EU in this dispute. Thus, the Panel 
had confirmed that the customs duties that the Russian  Federation was required to apply pursuant 
to the Common Customs Tariff of the Eurasian Economic Union, with respect to products such as 
paper and paperboard, palm oil, refrigerators and refrigerator -freezers, exceeded Russia's bound 
rates, and were inconsistent with Arti cle II:1(b) of the GATT  1994. The EU believed that these 
clear findings also had an effect beyond the particular products at issue in this d ispute. 
For example, the Panel had made it clear that the application of combined rates (for instance "x%, 
but not l ess than y EUR per unit of measurement") for products for which Russia's Schedule 
provides for simple ad valorem  rates (for instance "x%") violated Article  II:1(b) of the GATT  1994. 
In this context, the Panel had also made some systemically important findi ngs. For example, the 
Panel had confirmed that such violation could be established on the basis of mathematical 
calculations showing that the binding was exceeded below a "break even" price, and that concrete 
evidence on specific transactions was not requi red. The Panel had also rejected Russia's defence 
based on paragraph  313 of the Working Party Report on the accession of the Russian  Federation to 
the WTO. The EU noted that some of the measures challenged in the dispute had been modified in 
the course of the Panel proceedings. In the light of clear findings of the Panel, the EU hoped that 
the Russian  Federation would promptly take the necessary steps to ensure WTO compatibility of 
the measures for which inconsistency remained, in full respect of the bindin gs that it had 
committed to in its Schedule.  
7.3.  The representative of the Russian  Federation  said that her country was pleased to see the 
Panel Report in this dispute on the DSB Agenda at the present meeting. In Russia's view, the 
Report clarified a number of  systemic issues regarding the WTO jurisprudence. Russia thanked the 
panelists, and the Secretariat who had assisted the parties for their work and efforts in resolving 
this dispute. The Panel had recommended that Russia bring duties on certain goods into 
conformity with its WTO commitments. In fact, for certain measures, the Russian  Federation had 
already amended its applied rates prior to, and in the course of, these proceedings. Before the first 
Panel meeting, the Eurasian Economic Commission had issued a decision in relation to duties on 
palm oil and certain types of paper (measures 6, 7 and 8). The measures challenged by the EU 
had lapsed on 1  September  2015 and the applied duties had been established in full accordance 
with Russia's tariff commitments.  Before the first Panel meeting, the Eurasian Economic 
Commission had also issued a decision in relation to EU's claims on  refrigerators (measures  10 
and 11). Before the second meeting of the Panel, the applied tariffs had been amended in 
accordance with R ussia's WTO commitments. As of 1  September  2016 the duty applied by Russia, 
in relation to the 9th measure at issue in this dispute, had also been brought into conformity with 
Russia's WTO tariff commitments.  
7.4.  Russia continued to communicate with the EU wit h a view to resolving this dispute before and 
throughout these proceedings. Despite the fact that this dispute had moved forward, the 
amendments to the Common Customs Tariff of the Eurasian Economic Union for the products 
concerned had been introduced due to the EU's requests, which Russia had received prior to these 
Panel proceedings. In this regard, the EU's course of action to resort to formal resolution of a 
dispute in this case raised certain concerns in light of the already overburdened dispute settle ment 
system. Russia was grateful for the comprehensive examination provided for in the Panel's Report 
in relation to the 12th measure challenged by the EU that had aimed to cast an overarching 
shadow over the Common Customs Tariff of the Eurasian Economic Union . The rulings issued by 
the Panel on this matter had confirmed the very high threshold that had been established in the 
WTO jurisprudence for this type of blanket  and overambitious challenge.  Russia considered that 
the Panel had made the necessary fin dings so as to secure a positive solution to the dispute. 
Therefore, Russia had decided not to appeal the Report of the Panel and looked forward to working 
constructively with the EU to address the recommendations and rulings of the DSB in this dispute.  WT/DSB/M/385  
 
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  7.5.  The representative of Ukraine  said that her country welcomed the conclusions of the Panel in 
this dispute and found the legal qualification and explanation provided by the Panel to be useful 
from a systemic point of view. This case had raised a number of com plex questions of systemic 
importance, in particular for Ukraine. Her country welcomed the conclusions regarding the eleven 
challenged measures regarding the tariff treatment of certain goods that the Russian Federation 
Customs Authority had been required to apply in respect of individual tariff lines. Ukraine expected 
the Russian  Federation to fully and timeously implement the recommendations of the Panel, and 
bring the measure at issue into conformity  with its obligations under the  GATT  1994, by revoking 
the measures.  
7.6.  The DSB took note of the statements and adopted  the Panel Report contained in 
WT/DS485/R, Add.1, Corr.1 and Corr.2.  
8  UNITED  STATES – ANTI -DUMPING AND COUNTERV AILING MEASURES ON L ARGE 
RESIDENTIAL WASHERS FROM KOREA  
A.  Report of the Appellate Body (WT/DS464/AB/R and WT/DS464/AB/R /Add.1) and 
Report of the Panel (WT/DS464/R and WT/DS464/R /Add.1)  
8.1.  The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS464/11 transmitting the Appellate Body Report in the dispute: "United  States – 
Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea", which had 
been circulated on 7  September  2016 in document WT/DS464/AB/R and Add.1. The Chairman 
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".  
8.2.  The representative of Korea  said his country welcomed the adoption of the Panel and the 
Appellate Body Reports in this complicated dis pute on: "United  States – Anti-dumping and 
Countervailing Measures on Large Residential Washers from Korea" (DS4 64). At the same time, 
Korea appreciated the diligent work done by the Panel, the Appellate Body, and the respective 
Secretariats during this dispute. Korea believed that the Appellate Body's findings on the issues in 
this dispute were very important to th e interpretation and application  of the core provisions of 
Anti-Dumping Agreement9 and the SCM Agreement.10 
8.3.  First of all, Korea welcomed the Appellate Body's findings on the use of the zeroing 
methodology. As WTO Members were well aware, the zeroing methodo logy had been repeatedly 
found to be WTO -inconsistent by panels and the Appellate Body. In this regard, the Appellate 
Body's findings on the inconsistency of the use of zeroing, both under the normal comparison 
methods of the first sentence of Article  2.4.2 and under the exceptional comparison method of the 
second sentence of Article  2.4.2, were all important.  
8.4.  Second, Korea also welcomed the Appellate Body's guidance in interpreting and properly 
applying the second sentence of Article  2.4.2 of the Anti -Dump ing Agreement. Through this 
dispute, the Members of the WTO had shown keen interest in the interpretation of the second 
sentence, and, thus, had actively participated in both the Panel and the Appellate Body discussions 
as third -party participants. Korea a ppreciated the active participatio n and contribution of the 
third-party Members in this dispute.  
8.5.  On the question of "systemic disregarding ", however, Korea was of the view that the principle 
of "product as a whole" should be maintained in determining "dump ing" and "margin of dumping", 
pursuant to the Appellate Body jurisprudence, by considering "non -pattern transactions" in the 
numerator without allowing "systemic disregarding". Additionally, Korea appreciated the Appellate 
Body's clarification of the oblig ations that applied under Article  19.4 of the SCM Agreement and 
Article  VI:3 of the GATT 1994 to the calculation of the countervailing duty rate.  
                                                
9 Agreement on Implementation of Article VI of the General Agreement on Tariffs a nd Trade 1994 . 
10 Agreement on Subsidies and Countervailing Measures.  WT/DSB/M/385  
 
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  8.6.  However, Korea was disappointed with the findings on regional specificity under Article  2.2 of 
the SCM Agreeme nt. As Members were all aware, the WTO did not regulate every subsidy within 
the meaning of Article  1.1 of the SCM Agreement. The WTO regulated a subsidy under Part  II, III, 
or V of the SCM Agreement, but only if the subsidy was specific. As such, the WTO allowed policy 
space for a Member to pursue its legitimate policy objectives. In this regard, Korea believed that 
the Panel and the Appellate Body had mechanically interpreted Article  2.2 of the SCM Agreement 
without accounting for adverse practical implic ations of such an interpretation. RSTA Article  26 
subsidies were not regionally specific under a correct interpretation and application of Article  2.2. 
RSTA Article  26 subsidies sought to discourage investment in a smal l area in order to relieve 
over-conge stion. They were broadly available to any company located in Korea that made 
investments in 98% of Korea's territory, and, thus, they were not trade -distorting. The exclusion 
of a small territory from the area in which a subsidy could be used for legitimat e purposes, as in 
this case, should not constitute a regionally specific subsi dy under Article  2.2 of the 
SCM Agreement.  
8.7.  Finally, Korea expected the United  States to promptly implement the recommendations and 
rulings of the DSB, as set forth by the Panel a nd the Appellate Body in their reports. For the 
prompt settlement of this dispute pursuant to Article  3.3 of the DSU, Korea was ready to engage 
immediately with the United  States, including on the reasonable period of time needed to 
implement the recommend ations and rulings adopted by the DSB at the present meeting.  
8.8.  The representative of the United  States  said his country thanked the Panel, the Appellate 
Body, and the Secretariat staff assisting them for their hard work in this dispute. The Reports 
covered numerous issues under the Anti -Dumping Agreement11 and the SCM Agreement.12 In this 
statement, the United  States would draw Members' attention to certain aspects of the Appellate 
Body Report that were of serious concern. These issues related to the Appellate  Body's approach 
to substantive claims under the Anti -Dumping Agreement and the SCM Agreement as well as the 
proper role of the Appellate Body reviewing claims by a party and findings by a panel.  
8.9.  Important aspects of the Appellate Body Report appeared to b e at odds with the basic 
purpose of dispute settlement, as had been set out in the DSU and as had been understood by the 
Appellate Body in prior reports. As contemplated by Article  3.7 of the DSU, "[t]he aim of the 
dispute settlement system is to secure a positive solution to a dispute". Findings on claims or 
issues not raised by the parties to the dispute were, by necessity, not necessary to secure a 
positive solution to their dispute. Indeed, in "US – Wool Shirts and Blouses", the Appellate Body 
had state d that it "do[es] 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".13 
8.10.   The Appellate  Body Report here, however, went beyond the resolution of the issues raised 
by the disputing parties to prescribe particular methodological approaches  to the application of the 
Anti-Dumping Agreement. The Appellate Body Report also adopted an interpretive approach that 
was not – as required under Articles  3.2, 11, and 19.2 of the DSU – based on the text of the 
covered agreements, but rather was focused on the application of language from prior Appellate 
Body reports addressing different legal issues. Regret tably, a majority of the Appellate Body 
Division hearing this appeal had effectively read the methodology in the second sentence of 
Article  2.4.2 out of the Anti -Dumping Agreement, a result which a dissenting Appellate Body 
member could not join.  
8.11.   This was the first dispute involving a Member's application of the alternative comparison 
methodology that was set forth in the second senten ce of Article  2.4.2 of the Anti -Dumping 
Agreement , the so -called "targeted dumping" provision. The Appellate Body's finding had little 
basis in the plain text of Article  2.4.2, and essentially rewrote the provision by prescribing a wholly 
new methodology for addressing "targeted dumping". The methodology created by the Appellate 
Body had never been contemplated at the time the Anti-Dumping Agreement had been negotiated 
and adopted. That methodology had never, to US knowledge, been used by a ny Member at any 
time in the 20 -plus years since. And no party in the dispute had advocated the methodology 
ultimately prescribed by the Appe llate Body.  
                                                
11 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994.  
12 Agreement on Subsidies and Countervailing Measures.  
13 "US – Wool Shirts and Blouses " (AB), p. 19.  WT/DSB/M/385  
 
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  8.12.   Before discussing US concerns with specific Appellate Body findings, the United  States noted 
that it appreciated that the Appellate Body rejected Korea's most extreme legal theories. 
In particular, Korea had argued for an interpretation of Arti cle 2.4.2 that would have resulted in 
the alternative, average -to-transaction comparison methodology yielding precisely the same result 
as the normal, average -to-average comparison methodology in all cases. The Appellate Body had 
correctly recognized the e xceptional nature of the second sentence of Article  2.4.2, and had 
acknowledged that it had to be possible for Members, in some way, to use that provision to 
address "targeted dumping".  
8.13.   However, in elaborating its vision of the "targeted dumping" methodolo gy provided for 
under the second sentence of Article  2.4.2, the Appellate Body had found that the Anti -Dumping 
Agreement prohibited the combined application of the average -to-transaction and 
averag e-to-average comparison methodologies.14 Nothing in the text  of the second sentence of 
Article  2.4.2, nor elsewhere in the Anti -Dumping Agreement, addressed s uch a combined 
application. The  parties and third parties had never disputed that a combined application could be 
necessary and appropriate in certain situati ons. 
8.14.   The Appellate Body's finding that a combined application was not permitted, together with 
its finding that the second sentence of Article  2.4.2 required that the alternative comparison 
methodology be applied only to a subset of transactions – the so -called "pattern transactions" – 
also conflicted with the Appellate Body's prior finding, in at least three reports, that margins of 
dumping had to be determined for the "product as a whole", and the failure to "take into account 
the entirety of the prices o f some export transactions" was inconsistent with the Anti -Dumping 
Agreement.15 
8.15.   To be sure, if the Appellate Body Report had acknowledged this tension and had gone on to 
state that its prior findings related to determining dumping margins only for a "produc t as a whole" 
had been incorrect, this would have been a positive development.16 But to the contrary, elsewhere 
in this very same Report, the Appellate Body majority continued to rely on the flawed "product as 
a whole" theory to find that "zeroing" was impe rmissible with respect to targeted sales. The result 
was that the Appellate Body's view of the pr oper interpretation of the Anti -Dumping Agreement 
was internally inconsistent; what was consistent was that a flawed interpretation had once again 
led to findi ngs against the use of trade remedies.  
8.16.   The Appellate Body had found that the combined application of the average -to-transaction 
and average -to-average comparison methodologies was inconsistent wit h the Anti -Dumping 
Agreement even though Korea had never adv anced any claim against the use of such a combined 
application. Indeed, neither of the disputing parties had appealed the Panel Report's brief 
reference to this issue. The Panel "assume[d] that the combined application of methodologies 
[was] not excluded",  noting, appropriately, that "Korea ha[d] not advanced any claim" against 
such a combined application, and thus "there [had been] no need for [the panel] to rule on [the] 
matter".17 In contrast to the Panel's restrained, and correct, approach of not making findings on an 
issue not raised by the complaining party, the Appellate Body had announced a prohibition on the 
use of a combined application, even though it had not even been asked to consider the issue on 
appeal.  
8.17.   In rewriting the second sentence of Artic le 2.4.2, the Appellate Body majority had also 
incorrectly expanded its prior findings against the use of "zeroing". In particular, the majority had 
found that the use of "zeroing", in connection with the application of the average -to-transaction 
compariso n methodology to so -called "pattern transactions",18 was inconsistent with the 
                                                
14 Appellate Body Report, para. 5.120.  
15 "US – Softwood Lumber V " (AB), para. 101 (emphasis in original). See also, e.g., "EC – Bed Linen " 
(AB), para. 53, "US – Softwood Lumber V " (AB), paras. 97 -102; "US – Zeroing " (EC) (AB), para. 132.  
16 In previ ous communications to the DSB, the United States has explained in detail its concerns about 
the Appellate Body 's findings related to "zeroing " and the Appellate Body 's elaboration of its concept of 
"product as a whole ". See "United States – Laws, Regulatio ns and Methodology For Calculating Dumping 
Margins (Zeroing) ", Communication from the United States, WT/DS294/16 ( 17 May 2006), "United States – 
Laws, Regulations and Methodology For Calculating Dumping Margins (Zeroing) ", Communication from the 
United Sta tes, WT/DS294/18 ( 19 June 2006), "United States – Measures Relating to Zeroing and Sunset 
Reviews ", Communication from the United States, WT/DS322/16 ( 26 February  2007).  
17 Panel Report, para. 7.161.  
18 Appellate Body Report, paras. 5.141 -5.171.  WT/DSB/M/385  
 
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  Anti-Dumping Agreement. As one Appellate Body member had explained in dissent, this finding 
could not be supported under the rules of interpretation provided for under the DSU. G iven the 
importance of this issue, the United  States called the DSB's attention to the cogent explanation in 
the dissenting opinion: "the majority's interpretation would permit investigating authorities to deal 
with 'targeted dumping' only partially, and p ossibly ineffectively. Within the 'pattern', prices above 
normal value will cancel out – or 're -mask' – partly or completely, the 'targeted dumping' that 
results from prices below normal value. … [S]uch an incomplete approach is not required by the 
text of  the second sentence read in the context of the entire Article  2.4.2 and in light of the object 
and purpose of the Anti -Dumping Agreement, and it unduly restricts the regulatory leeway that 
should be accorded to investigating authorities to deal with 'targ eted dumping' ".19 The dissenting 
Appellate Body member had further reasoned that "allowing an investigating authority to zero 
within the 'pattern' under the second sentence of Article  2.4.2 not only is a permissible 
interpretation within the meaning of the second sentence of Article  17.6(ii) of the Anti -Dumping 
Agreement, but … it is a more defensible interpretation within the meaning of the first sentence of 
that provision".20 
8.18.   The majority's prescribed approach for addressing "targeted dumping" simply was no t the 
average -to-transaction comparison to which Members agre ed in Article  2.4.2. The United  States 
had definitively established that applying the average -to-transaction comparison methodology 
(without zeroing) would, as a mathematical certainty, always yi eld the same result as applying the 
average -to-average comparison methodology (without zeroing). This was true whether these 
comparison methodologies were applied to all export sales or t o a subset of export sales. 
The Appellate Body majority itself had ac knowledged as a "fact" that "the application of the 
[average -to-transaction] comparison methodology to [a] pattern of export prices leads to 
equivalent results as the application of the [average -to-average] comparison methodology to the 
same pattern".21 Yet, the Appellate Body majority had ignored this key "fact".22 In doing so, it had 
effectively rewritten the second sentence of Article  2.4.2, changing it from permitting Members to 
apply an average -to-transaction comparison methodology under certain circumst ances to 
permitting Members to apply the average -to-average comparison methodology to a subset of 
transactions under certain circumstances. Ultimately, the majority had read the specific reference 
to the average -to-transaction comparison methodology out of  the second sentence of Article  2.4.2 
of the Anti -Dumping Agreement altogether, which was contrary to the customary rules of 
interpretation of public international law.  
8.19.   As the Appellate Body had explained in prior reports, "a fundamental tenet of treaty 
interpretation flowing from the general rule of interpretation set out in Article  31 [of the Vienna 
Convention] is the principle of effectiveness ".23 "One of the corollaries of 'the general rule of 
interpretation' in the Vienna Convention is that interpretati on must give meaning and effect to all 
the terms of a treaty. An interpreter is not free to adopt a reading that would result in reducing 
whole clauses or paragraphs of a treaty to redundancy o r inutility ."24 It was troubling that a 
majority of the Appellat e Body Division hearing this appeal had chosen not to abide by established 
customary rules of interpretation that the Appellate Body had recognized previously; though the 
United  States appreciated that one dissenting Appellate Body member had decided not t o join the 
majority in doing so.  
8.20.   Turning to the CVD issues in this dispute, the United  States agreed with certain findings of 
the Appellate Body. In particular, the United  States found persuasive the rejection of Korea's 
assertion that subsidies limited to  a designated geographical region somehow were not regionally 
specific under the SCM Agreement.25 The Appellate Body had found, among other things, that the 
size of a designated region was irrelevant to the specificity inquiry.26 
8.21.   The United  States also agree d with aspects of the Appellate Body's findings regarding the 
calculation of subsidy margins. The United  States agreed that the SCM Agreement did not dictate 
any particular methodology for calculating subsidy ratios, leaving the investigating authority wit h 
                                                
19 Appellate Body Report, para s. 5.19 5-5.196.  
20 Appellate Body Report, para. 5.202.  
21 Appellate Body Report, para. 5.165.  
22 Appellate Body Report, para. 5.165.  
23 "Japan – Alcoholic Beverages II " (AB), p. 12.  
24 "US – Gasoline " (AB), p. 23 (emphasis added).  
25 Appellate B ody Report, paras. 5.204 -5.246.  
26 Appellate Body Report, para. 5.236.  WT/DSB/M/385  
 
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  discretion to choose the most appropriate methodology.27 In particular, the SCM Agreement did 
not expressly set forth a method for determining whether a given subsidy was "tied" to a particular 
product.28 As the Appellate Body had observed, any "tying" det ermination would depend on the 
specific circumstances of each case, focusing on the "design, structure, and operation of the 
measure granting the subsidy".29 
8.22.   The United  States had concerns, however, with respect to the Appellate Body's findings that 
these p rinciples had not been adequately addressed and applied in the subsidy determinations 
made by the US Department of Commerce. The United  States thanked the DSB for its attention to 
the important issues covered in its statement at the meeting.  
8.23.   The representa tive of Canada  said that his country, as a third party to this dispute, also 
wished to thank the Panel, the Appellate Body and their Secretariats for their work in these 
proceedings. Canada had participated in this dispute because of its substantial system ic interest in 
the interpretation and application of WTO rules on dumping. Canada took the opportunity to 
comment on an issue on which Canada had provided views throughout the proceedings, namely, 
the calculation of a margin of dumping pursuant to the weig hted average -to-transaction 
comparison methodology described in the second senten ce of Article  2.4.2 of the Anti -Dumping 
Agreement. Canada welcomed the Panel's and the Appellate Body's interpretation according to 
which, in order to use that comparison meth odology, a pattern of prices which differed significantly 
had to be identified among different purchasers, or among different regions, or among different 
time periods, and could not transcend these categories. Canada also welcomed the Appellate 
Body's clar ification that, in assessing whether prices differed significantly, an investigating 
authority was required to assess whether the differences in prices were significant, both 
quantitatively and qualitatively, and that this could require consideration of ob jective market 
factors. Canada was also pleased by the Panel's and the Appellate Body's finding that zeroing was 
prohibited in the application of the weighted average -to-transac tion comparison methodology. 
In particular, Canada appreciated the Appellate Bo dy's explicit indication that all transactions that 
fell within the relevant pattern had to be aggregated, irrespective of whether those transactions 
occurred above or below normal value. Canada likewise welcomed the Panel's and the Appellate 
Body’s coroll ary finding that the use of zeroing in the weighted average -to-transaction comparison 
methodology was "as such" inconsistent with the "fair comparison" requirement under Article  2.4 
of the Anti -Dumping Agreement.  
8.24.   The representative of China  said her countr y was grateful for the work done in relation to 
this dispute by the Appellate Body, the Panel, and the Secretariat teams assisting them. This 
dispute was important from the systemic point of view. It spoke to a number of issues that had 
similarly been rais ed in China's complaint regarding methodologies used by the US investigating 
authority in "United  States – Certain Methodologi es and their Application to Anti-Dumping 
Proceedings Involving China"  (DS471). China looked forward to faithful implementation by the 
United States of the result in the DS464 dispute . 
8.25.   The representative of Brazil  said that the use of the "zeroing" methodology in anti -dumping 
proceedings had mobilized WTO Members and its dispute settlement mechanism for more than 
15 years. From 2000 u ntil now, this practice had been challenged and found to be 
WTO-inconsistent many times. The list of cases was long and Brazil would not recall them at the 
present meeting. The result of this intense litigation had been a consistent and coherent line of 
decisions, which had found "zeroing" to be "as such" and "as  applied", in original investigations 
and in reviews, in any of the three methods of comparison, inconsistent with the GATT  1994 and 
the Anti -Dumping Agreement. Despite this vast jurisprudence, "zer oing" had still been used in 
"targeted dumping" situations, foreseen in the second sentence of Article  2.4.2 of the 
Anti-Dumping Agreement. This was due to the fact that the W -T method of comparison in 
"targeted dumping" had never been analysed in the disp ute settlement mechanism. Precisely 
because it had been the "last frontier" for the possibility of zeroing, the task of the Appellate Body 
had not been easy. It had had to reconcile, on the one hand, the concern shared by many 
Members with pricing behaviou r targeted to a purchaser, region or time period, and, on the other 
hand, the established principle that "dumping " and "margins of dumping " had to be calculated for 
                                                
27 Appellate Body Report, para. 5.269.  
28 Appellate Body Report, para. 5.269.  
29 Appellate Body Report, para. 5.270.  WT/DSB/M/385  
 
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  the product under investigation "as a whole"; any methodology that had disregarded or zeroe d 
export transactions had already been found to be inherently unfair.  
8.26.   In Brazil's view, the Appellate Body's decision in the DS464 dispute - in addition to being 
concise, direct and clear – had been a balanced one. The Appellate Body had imposed strict 
obligations on the investigating authorities, who were admonished not to lightly determine the 
existence of a "targeted dumping" scenario. In this context, it had ruled that not all differences in 
prices constituted a "pattern" for the purpose of the second s entence of Article  2.4.2, and that the 
investigating authority had to convincingly explain why both of the symmetrical methods could not 
adequately take these differences into account. Under these stringent obligations, methods that 
had too easily, almost automatically, found a "pattern of export prices which differ significantly" 
were no longer permitted. Likewise, in line with past jurisprudence, the Appellate Body had 
maintained that all export transactions falling within the "pattern" had to be consider ed when 
calculating the margin of dumping. " zeroing" within tha t "pattern" was, therefore, 
WTO-inconsistent.  
8.27.   At the same time, Brazil understood that the present decision had also given due account to 
the concerns of Members with targeted behaviour and the  corresponding need to address this 
behaviour in an effective way. In finding that the second sentence of Article  2.4.2 allowed an 
investigating authority to establish the existence of margin of dumping by focusing only on the 
transactions that constituted  the "pattern", the Appellate Body delimitated with more precision the 
meaning of the "product as a whole" principle. This principle was now to be interpreted with 
reference to the specific universe of transactions to which the m ethod of comparison applied . 
In the case of the W -T method in the second sentence of Article  2.4.2, the "product as a whole" 
meant the export transactions that fell within the pattern. Thus the Appellate Body had highlighted 
the importance of defining and using the correct "universe " of export transaction in each 
investigation. Some could argue that this solution still did not  deal completely with "targeted  
dumping" situations, as, within the "pattern", prices above normal value would cancel out – or 
"re-mask" – partly or completely,  the "targeted dumping". In Brazil's view, this decision seemed to 
be an adequate response to an intense intellectual debate. Now that the Appellate Body had 
spoken again on the issue, it was probably about time that this debate came to an end.  
8.28.   The DSB took note  of the statements and adopted  the Appellate Body Report contained in 
document WT/DS464/AB/R and Add.1 and the Panel Report contained in document WT/DS464/R 
and Add.1, as modified by the Appellate Body Report.  
9  APPELLATE BODY MATTE RS 
9.1.  The Chairman  said that, under this Agenda item, he would make a short statement regarding 
the new selection process that had been agreed to by the DSB at its meeting on 21  July 2016. 
As Members were all aware, the names of seven candidates had been submitted by the agreed 
nomination deadline of 14  September for the vacancy left by the non -reappointment of one 
Appellate Body member. Pursuant to the 21  July DSB decision, Australia, China, Japan and Nepal 
had re -submitted their candidates for the new vacancy. Letters to this e ffect from the respective 
Missions had been circulated as addenda to the original Job documents containing the CVs of the 
candidates and were available online. In addition, new nominations had been submitted by 
Chinese  Taipei and Korea. The CVs of these tw o candidates had been circulated as Job documents 
and were also available online. The Chairman recalled that, pursuan t to the 21  July DSB decision, 
the re -nominated candidates from Australia, China, Japan and Nepal would not be interviewed for 
the second t ime by the Selection Committee. The interviews of the two new candidates would be 
held on Monday 17  October  2016 in the morning. On 1  and 2  November  2016, the Selection 
Committee would make itself available to hear views of delegations on the candidates. D elegations 
wishing to meet the Selection Committee were invited to contact the Secretariat – Council/TNC 
Division to make an appointment. A fax setting out the details would be circulated shortly after the 
present meeting. Alternatively, delegations could send comments in writing to the Chairman, as 
the Chair of the DSB, in care of the Council/TNC Division, by no later than 2  November, by close of 
business. Following the consultations with delegations, the Selection Committee would need to 
make its recommen dation by no later than 10  November for consideration by the DSB at its 
regular meeting on 23  November. With regard to the previous selection process, he said that the 
Selection Committee would need to make a recommendation as soon as possible and by no la ter 
than 10  November so that the two new Appellate Body members could be approved by the DSB at 
its regular meeting in November.  WT/DSB/M/385  
 
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  9.2.  The representative of Korea  said that his delegation wished to take the opportunity to make a 
short statement to say a few word s of gratitude in order to thank the outgoing Appellate Body 
member, Professor Seung Wha Chang . Korea would like to express heartfelt appreciation for 
Professor Chang's dedication and the excellent service he had rendered to the work of the 
Appellate Body during the past four years. Korea believed that he had done his best to remain 
faithful to the letter and spirit of the DSU in carrying out his responsibilities as an A ppellate Body 
member and in safeguarding the WTO Members' rights provided for in the cov ered agreements. 
Professor Chang left a valuable legacy in the WTO dispute settlement system and Korea would like 
to wish him all the best in his future endeavours.  
9.3.  The DSB took note  of the statement.  
10  ANNOUCEMENT BY ARGEN TINA REGARDING THE SESSION ENTITLED : "WTO 
DISPUTE SETTLEMENT S YSTEM FROM A LATIN A MERICAN PERSPECTIVE"  
10.1.   The representative of Argentina , speaking under "Other Business", said that his delegation 
wished to make a brief "save -the-date" announcement regarding the Public Forum, which would 
start on 27  September  2016 at the WTO. In this regard, he noted that Argentina, Brazil, Colombia, 
Guatemala and Mexico were organizing a session entitled: "WTO Dispute Settlement System from 
a Latin American Perspective ". Argentina wished to invite all delegate s to participate in this event, 
which would take place on 29  September  2016 at 9  am in Room  W. Argentina said that seven 
highly talented colleagues who were very experienced with the operation of the dispute settlement 
system, would give their perspectives  on this subject matter. In the context of this event, 
Argentina welcomed other Member s to share  their perspectives and points of view regarding the 
functioning of the system.  
10.2.   The DSB took note  of the statement  
11  DISPUTE SETTLEMENT W ORKLOAD  
A. Statement by t he Chairman  
11.1.   The Chairman , speaking under "Other Business",  said that, as he had announced at the 
beginning of the meeting, he would now like to make a report to provide the DSB with information 
about the Appellate Body's workload, the number of disputes be fore panels and at the panel 
composition stage, and the ability of the Secretariat to meet expected demand over the coming 
period. The Appellate Body was currently dealing with two appeals.30 In addition, the Panel Report 
in the extremely complex compliance  proceedings in "EC and Certain Member States – Large Civil 
Aircraft" (Airbus) that had been circulated to Members on 22  September  2016, and two additional 
panel reports expected to be circulated in the following three months could also be appealed 
before the end of 2016.31 Given the limited number of staff available in the Appellate Body 
Secretariat, there was soon likely to be a waiting period before appeals could be staffed and 
Appellate Body members could turn to dealing with them. Currently, there were 17 active panels 
(including three panels under Article  21.5 of the DSU) that had not yet issued a final report to the 
parties. The Chairman noted that he was counting multiple disputes that were being considered 
simultaneously by the same panel as one. As of 26  September  2016, there were four composed 
panels awaiting staff to assist them32, and the DSB expected to have more clarity within the next 
4-6 weeks as to when these panels could be staffed and their  proceedings could commence. 
In addition, there were  seven panels at the composition stage. Furthermore, two matters had been 
referred to arbitration under Article  22.6 of the DSU.  
11.2.   The DSB took note  of the statement.  
__________  
                                                
30 DS473 "EU – Biodiesel"; and DS475 "Russia – Pigs".  
31 DS471 " US – Anti-Dumping Methodologies" (China); and DS487 "US – Tax Incentives".  
32 DS480 "EU – Biodiesel" (Indonesia); DS427 " China – Broiler Products" (Article  21.5 – United  States); 
DS504 "Korea – Pneumatic Valves " (Japan) ; and DS505 "US – Supercalendared Paper" (Canada ).