RESTRICTED  
  
WT/DSB/M/406  
 
13 March  2018 
(18-1502) Page: 1/11 
Dispute Settlement Body  
12 January 2018    
 
MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 12  JANUARY  2018 
Chairman: Mr. Junichi I hara (Japan ) 
Table of Contents  
1   UNITED STATES – ANTI -DUMPING MEASURES ON CERTAIN OIL COUNTRY 
TUBULAR  GOODS FROM KOREA  ................................ ................................ ........................  1 
A.  Report of the Panel ................................ ................................ ................................ .........  1 
2   INDIA – CERTAIN MEASURES REL ATING TO SOLAR CELLS  AND SOLAR 
MODULES  ................................ ................................ ................................ .........................  3 
A.  Recourse to Article  22.2 of the DSU by the United  States  ................................ ....................  3 
 
 
1  UNITED STATES – ANTI -DUMPING MEASURES ON CERTAIN OIL COUNTRY TUBULAR 
GOODS FROM KOREA  
A.  Report of the Pane l (WT/DS488/R and WT/DS488/R/Add.1)  
1.1.  The Chairman  recalled that at its 25 March 2015 meeting, the DSB had established a Panel to 
examine the complaint by Korea pertaining to the dispute "US – OCTG (Korea)" . The Report of the 
Panel, contained in documents WT /DS488/R and WT/DS488/R/Add.1, had been circulated on 
14 November  2017, as unrestricted documents. He noted that the Panel Report was before the 
DSB for adoption at the request of Korea. This adoption procedure was without prejudice to the 
right of Members  to express their views on the Panel Report.  
1.2.  The representative of Korea  said that Korea wished to thank the members of the Panel and 
the Secretariat for their hard work in the dispute  "US – OCTG (Korea)". His country considered this 
dispute to be an important case that clarified the obligations of investigating authorities under the 
Anti-Dumping Agreement , especially in using data from a global producer with no record of sales 
or production in the exporting country's home market for the calcu lation of constructed value (CV) 
and in defining the concept of the "same general category of products" under Article  2.2.2 of the 
Anti-Dumping Agreement. In its Report, the Panel had correctly found that an investigating 
authority's discretion in selectin g a CV profit source was not without limits, and that investigating 
authorities must comport with the requirements of the Anti -Dumping Agreement when calculating 
CV profit. Specifically, the Panel had found that the chapeau of Article  2.2.2 required invest igating 
authorities to use respondents' actual data for sales of the like product in the ordinary course of 
trade, and that low volumes of sales did not absolve an investigating authority from meeting this 
obligation.1 Accordingly, the Panel had determined  that the USDOC had acted inconsistently with 
the Article  2.2.2 chapeau in failing to use the Korean respondents' own sales data to calculate CV 
profit.2 In addition, the Panel had found that the USDOC had applied an overly narrow definition of 
the "same g eneral category of products", by defining this as more narrow than its definition of a 
"like product". Korea noted that, accordingly,  the USDOC did not have a proper basis to conclude 
                                                
1 Panel Report, para. 7.47.  
2 Panel Report, para. 7.56. WT/DSB/M/406  
 
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  that the methods under Article  2.2.2(i) could not have been used, and th at it could not have 
calculated a profit cap in accordance with Article  2.2.2(iii).3 In its Report, the Panel had also found 
that Article  2.2.2(iii) imposed a mandatory requirement for investigating authorities to calculate 
and apply a profit cap when dete rmining CV profit, and accordingly, the USDOC's failure to 
calculate a profit cap had resulted in a violation of Article  2.2.2(iii) and Article  2.2.4 Korea also 
noted that, with these findings, the Panel had confirmed that the Korean respondents, despite 
their full cooperation in the investigation, had been subject to dumping rates that had been unfair 
and that had been calculated based on erroneous legal standards. While Korea was satisfied with 
the Panel's important findings on the issue of CV profit, Kor ea did have some concerns with some 
of the Panel's other findings. In particular, Korea said that it registered its disappointment that the 
Panel had failed to properly assess the magnitude of the US political pressure that had persistently 
forced the US i nvestigating authority to deviate from the legal standards set out in the 
Anti-Dumping Agreement throughout its investigation against targeted Korean producers. Korea 
was of the view that despite the USDOC's preliminary finding that the Korean OCTG produce rs had 
not engaged in unfair pricing practices, the USDOC, after having faced significant political 
pressure, has had to make a drastic change in its final determination where it had recalculated 
double digit and near double digit dumping margins on the Ko rean producers. For instance, the 
administrative record of the investigation contained evidence of dozens of ex parte 
communications between the USDOC, the US industry and Congressional representatives, 
including a letter that had been signed by over 50 US  senators discussing specific issues in the 
case, such as cost of production and profit rates. Another similar letter had also been signed by 
over 150 members of the US House of Representatives. Korea noted that this was the evidence 
that the Panel had fai led to take into account in assessing the impact of the political pressure on 
the outcome of the investigation. Moreover, the Panel had not fully recognized the legal 
significance of the USDOC's decision to accept the US petitioners' untimely submission of  the 
financial statements of Tenaris, a global OCTG producer that had no record of sales or production 
in Korea. This had been done without notifying all interested parties, which, as a result, had 
caused serious prejudice to the Korean respondents. Even t hough the Panel's findings were not 
100% satisfactory, Korea believed that the Panel's findings – if properly implemented by the 
United  States – would significantly alleviate the prejudice suffered by the Korean OCTG producers 
in this investigation. Taking  this into account, Korea closely consulted with the United States to 
examine the feasibility of not appealing, which in turn would also alleviate the current workload in 
the Appellate Body. Korea therefore requested the DSB to adopt the Report of the Pane l in dispute 
DS488, and looked forward to working with the United States to achieve the prompt and proper 
implementation of the DSB's recommendations and rulings.  
1.3.  The representative  of the United  States  said that the United  States would like to begin by 
thanking the members of the Panel and the Secretariat assisting them for their work on this 
dispute. W hile the United States was disappointed with certain aspects of the Panel's findings, the 
United States acknowledged the Panel's thorough review of the lega l arguments that had been put 
forward by the parties. Korea had raised a number of claims under a variety of provisions of the 
Anti-Dumping Agreement and the GATT  1994. The Panel had rightly rejected the majority of those 
claims. In particular, the United  States welcomed the Panel's finding that Korea had not 
established that Article  2.2 of the Anti -Dumping Agreement required an authority, where home 
market sales were not viable, to evaluate third -country export sales before determining whether to 
construct  normal value. No such requirement existed in the text of Article  2.2, and the Panel had 
been correct to decline Korea's invitation to read such an obligation into the Anti -Dumping 
Agreement. The United States also appreciated the Panel's rejection of Kore a's arguments under 
Article  2.3 of the Anti -Dumping Agreement. The United States said that Korea's arguments had 
essentially asked the Panel to review US compliance with US law, not with the text of the 
Anti-Dumping Agreement. That was not an appropriate task for a WTO panel, and the Panel had 
been correct to reject Korea's claim.  
1.4.  The United  States said, however, that it was disappointed with the Panel's findings that the 
US Department of Commerce's calculation of constructed value profit had not been cons istent with 
certain obligations set out in the Anti -Dumping Agreement. The Panel had found that the 
United  States had acted inconsistently with the chapeau of Article  2.2.2 because it had not 
determined profit for constructed value based on actual data per taining to sales of the like product 
in the home market. It made little sense in light of the structure of the Anti -Dumping Agreement 
                                                
3 Panel Report, para. 7.75.  
4 Panel Report, paras. 7.108 -7.109.  WT/DSB/M/406  
 
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  to suggest that, where an investigating authority determined under Article  2.2 that home market 
sales were inappropriate f or "a proper comparison", the authority was nevertheless obligated to 
collect data regarding those sales under Article  2.2.2 when constructing normal value. The Panel's 
findings were potentially very burdensome for foreign respondents, who must gather and provide 
this additional, and potentially voluminous, data. The Panel had also found that the United  States 
had acted inconsistently with Articles  2.2.2(i) and (iii) in relation to profit because the 
US Department of Commerce had supposedly relied on a narr ow definition of the "same general 
category of products". But the Panel appeared not to have understood the Department's definition 
of the "same general category of products", which had included all OCTG  products subject to the 
anti-dumping investigation. The United States noted that the Panel's mistake had been based in 
part on its reference to a separate anti -dumping determination submitted by Korea – evidence that 
had not formed part of the record before the Department of Commerce and upon which the Pane l 
therefore should not have relied. The Panel otherwise had rejected, had found to be outside of its 
terms of reference, or had exercised judicial economy on other claims raised in this dispute.  
1.5.  The United  States said that it appreciated the Panel's carefu l examination of the arguments 
presented by the parties and third parties to this dispute. The Panel had appropriately limited its 
findings only to those issues necessary to assist the DSB in making the recommendation provided 
for in the DSU, consistent wi th its terms of reference under DSU Article  7.1 and its role under DSU 
Article  11. Although the United States was disappointed with certain findings of the Panel, on 
balance, the United States had decided to permit the Report to be adopted at the present m eeting. 
The United States said that it took this step in light of all the circumstances, including the overall 
quality of the Panel Report, and encouraged other Members similarly to consider the nature and 
number of appeals they filed.  The United States sa id that it again thanked the Panel and the 
Secretariat assisting it for its work on this dispute, and it thanked Members for their attention to 
the US  statement.  
1.6.  The DSB took note  of the statements and adopted  the Panel Report contained in 
WT/DS488/R and A dd.1. 
2  INDIA – CERTAIN MEASURES REL ATING TO SOLAR CELLS  AND SOLAR MODULES  
A.  Recourse to Article  22.2 of the DSU by the United  States (WT/DS456/18)  
2.1.  The Chairman  drew attention to the communication from the United States contained in 
document WT/DS456/18, a nd invited the representative of the United States to speak . 
2.2.  The representative of the United  States  said that, on 19  December  2017, the United  States 
had requested  authorization from the DSB to suspend concessions or other obligations with 
respect to India due to its failure to comply with the recommendations and rulings of the DSB in 
this dispute.5 On 3 January  2018, India had submitted a communication in which it objected to the 
US request.6 The United States said that it had just used the term "objected", but it was necessary 
to be precise. Under Article  22.6 of the DSU, "the DSB, upon request, shall grant authorization to 
suspend concessions or other obligations within 30  days of the expiry of the reasonable period of 
time" unless the United States joined a consensus to reject the request – which the United States 
did not – or unless India, and the United States further quoted, "objects to the level of suspension 
proposed" by the United States.  India's communication made a bare reference to Article  22.6 of 
the DSU in a heading of the document. But India's communication nowhere stated that it "object s 
to the level of suspension proposed" by the United  States.  Theref ore, the DSB needed absolute 
clarity from India. If India clarified at the present meeting that it "object s to the level of 
suspension proposed" by the United States, then the matter was referred to arbitration pursuant 
to Article  22.6 of the DSU.  If India  failed to clarify that it was making the objection provided for in 
Article  22.6 of the DSU, then the matter will not have been referred to arbitration, and the DSB 
shall grant the authorization requested by the United States.  
2.3.  In its communication, India asserted that the US request was supposedly "invalid" for a 
number of reasons. The United States said that none of those reasons had merit, as it would 
explain shortly. But, the United States said that two points bore emphasis a t the outset. First, 
none of the reasons  cited by India had any basis in Article  22.6 of the DSU and thus could not 
                                                
5 WT/DS456/18.  
6 WT/DS456/19.  WT/DSB/M/406  
 
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  prevent the DSB from granting the authorization requested by the United  States. Second, nowhere 
in India's communication, nor in the "status  report" that India had submitted on 
14 December  2017 claiming compliance7, did India identify even a single measure or action that it 
had taken to come into compliance. Therefore, India had provided no basis for its assertion of 
compliance. In that circum stance, and without any other bilateral explanation from India, the 
United  States had no choice but to make the request for authorization to preserve its rights under 
the DSU – the same choice that many other WTO  Members had made in other disputes.  
2.4.  India's communication asserted three grounds on which the US request was supposedly 
"invalid", but India's complaints were unavailing. The United States said that it hesitated to take 
up the DSB's time unnecessarily, but because India had circulated its vi ews to Members, the 
United  States considered it useful to explain just why these three assertions were irrelevant, and 
would contradict and undermine the DSU as agreed by Members. The United States said that India 
was incorrect that the United States had n ot sufficiently indicated a level of nullification and 
impairment or why it considered that India had not complied , that there was an obligation on a 
complaining party to seek to negotiate compensation, or that no request under Article  22.2 could 
be made b efore procedures were completed under Article  21.5 of the DSU.  
2.5.  First, the text of the DSU contradicted India's contention that a Member must enter into 
negotiations on "mutually acceptable compensation" before requesting authorization to suspend 
concession s. Article  22.2 of the DSU provided that a responding Member was required to engage in 
negotiations for compensation only "if so requested…by the party that invoked the dispute 
settlement procedures" – in this case the United States. As the United States h ad made no such 
request, no such negotiations had been required under Article  22.2 of the DSU. Rather, DSU 
Article  22.2 provided in its second sentence that if no compensation had been agreed within 
20 days of the expiry of the reasonable period of time, a  complaining party could request DSB 
authorization. India simply misread the plain text of the DSU and sought to impose a new 
obligation on all WTO  Members.  
2.6.  Second, India complained that the US request had not indicated why the United  States 
considered tha t India had failed to comply with the DSB's  recommendations and rulings. In this 
respect, the United States noted, first, that India had provided the United States with no advance 
notice that India had intended to claim compliance with the DSB's recommenda tions and rulings 
on 14  December  2017; and that, second, India's claim of compliance had been wholly 
unsubstantiated and limited to the mere assertion that "India has ceased to impose any measures 
as found inconsistent in the DSB's findings and recommendations". Therefore, the United States 
had had no opportunity to evaluate any concrete compliance steps taken by India because India 
had identified none.  India was simply incorrect, moreover, in asserting that Article  22.2 r equired a 
complaining Member to include in its request for suspension an explanation of why it considered 
the responding Member to have failed to comply with the recommendations of the DSB. The 
second sentence of Article  22.2 set out that if no satisfactor y compensation had been agreed, a 
complaining Member could request authorization from the DSB. The United States said, therefore, 
for a second time, India had simply misread the plain text of the DSU and sought to impose a new 
obligation on all WTO Members . 
2.7.  Third, India argued that the US request for authorization had failed to specify a proposed 
level of suspension.  This too was simply incorrect. The US request stated the following: "the 
United  States requests authorization from the DSB to suspend concessi ons or other obligations 
with respect to India at an annual level based on a formula commensurate with the trade effects 
caused to the interests of the United States by the failure of India to comply with the 
recommendations and rulings of the DSB".  The Un ited States said that its request thus set out the 
"level of suspension proposed", in the terms of Article  22.6 of the DSU, in the form of a formula 
commensurate with the trade effects caused to the interests of the United States.  The 
United  States noted t hat Members' requests to suspend concessions under Article  22.2 of the DSU  
  
                                                
7 WT/DS456/17.  WT/DSB/M/406  
 
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  commonly expressed the proposed level of suspension in the form of a formula rather than a 
specific monetary amount.8 And if India was dissatisfied with the level of suspension pr oposed by 
the United States, it may object to the proposed level pursuant to Article  22.6 of the DSU for a 
determination of the level equivalent to the level of nullification or impairment.  
2.8.  Finally, India argued that the US request for authorization was in valid because the 
United  States had not previously established India's non -compliance through procedures under 
Article  21.5 of the DSU.  As apparently all Members other than India recognized, nothing in the 
DSU supported the view that a Member must proceed with full DSU Article  21.5 proceedings before 
the Member may even request authorization to suspend concessions under DSU Article  22.2. The 
United  States said that it was for this very reason that, in some circumstances, Members had 
entered into voluntary a greements on the sequencing of proceedings. In some disputes, an 
agreement provided for the completion of a DSU Article  21.5 compliance proceeding before a 
Member could request authorization to suspend concessions or other obligations. In others, the 
parties agreed that, once a Member requested authorization pursuant to DSU Article  22.2 and the 
responding Member objected, the arbitration could be suspended to permit DSU Article  21.5 
proceedings to occur. Where no sequencing agreement had been reached betwee n the parties, as 
was the case here, a complaining Member must request authorization to suspend concessions 
within the time -frame specified in Article  22.6 of the DSU or it risked prejudicing its rights to do so 
at a later date. The United States said that it could give numerous examples of Members acting to 
preserve their rights in this fashion. But Members, other than India, may recall that, in fact, just 
this month, in January  2018, the EU had acted in just this manner in relation to the "Russia – Pigs" 
(DS475) dispute.9 The EU request pursuant to Article  22.2 of the DSU had been considered by the 
DSB within 30  days of the expiry of Russia's compliance period, and despite Russia's claim of 
compliance, without a DSU Article  21.5 proceeding having been  completed, or even initiated. This 
action had been perfectly within the EU's rights under the DSU, and the United States said that it 
did not understand India to consider the request for authorization by the EU, or any other Member, 
to be "invalid". There fore, India's objections to the US request were without any legal basis, and 
could not prevent the US request from being approved at the present meeting by the DSB.  
2.9.  The United  States again noted that while India's communication made reference to 
Article  22.6 of the DSU in a heading, India did not state that it "objects to the level of suspension 
proposed" by the United States, as specified in DSU Article  22.6. It was on that basis that the 
matter would be referred to arbitration under Article  22.6 of the DS U. Having failed to make such 
an objection, the matter would not have been referred to arbitration, and the DSB shall grant 
the US request for authorization at the present meeting pursuant to DSU Article  22.6. The 
United  States said that, to the extent tha t India objected, at the present meeting, to the level of 
suspension proposed by the United States, the matter would be referred to arbitration, and there  
would remain no further action for the DSB to take with respect to this Agenda item. In that case, 
while it would not be an efficient use of the resources of the WTO and of Members, the 
United  States said that it would not object if the DSB wished to take affirmative note of the fact 
that no action on its part was necessary with respect to the US request for authorization because 
the matter had been referred to arbitration by virtue of India's objection under Article  22.6 of 
the DSU. 
2.10.   The representative of India said that India had submitted its communication, dated 
3 January  2018, to the DSB Chairman in response to the communication from the United States, 
                                                
8 See, e.g., "US – Clove Cigarettes: Recourse to Article 22.2 of the DSU by Indonesia"  (WT/DS406/12) 
("…the level of suspension proposed is equivalent on an annual basis to the nullification or impairment of 
benefits accruing to Indonesia…"); "EC – Approval and Marketing of Biotech Products: Recourse to Article  22.2 
of the DSU by the United  States"  (WT/DS291/39) ("…the United States requests authorization from the Dispute 
Settlement Body ("DSB") to suspend concessions and other obligations with respect to the European 
Communities under the covered agreements at an annual level equivalent to the annual level of nullification or 
impairment of benefits accruing to the United States resulting from the European Communities' failure to bring 
measures of the European Communities and its member States concerning the approval and marketing of 
biotech products into compliance with the recommendations and rulings of the DSB…"); and, in "US – Offset 
Act (Byrd Amendment) " (DS217 and DS234), requests by the European Union (WT/DS217/22), Brazil 
(WT/DS217/20), Japan (WT/DS217/24), Korea (WT/DS217/25), Canada (WT/DS234/25), Mexico 
(WT/DS234/26), Chile (WT/DS217/21) and India (WT/DS217/23).  
9 "Russia – Pigs (EU): Recourse to Article 22.2 of the DSU by the European Union"  (WT/DS475/17) 
("…the European Union requests authorization from the Dispute Settlement Body ("DSB") to suspend 
concessions and other obligations with respect to the Russian Federation as a result of the Russian Federation's 
failure to bring its measures into compliance with the recommendations and rulings of the DSB…").  WT/DSB/M/406  
 
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  dated 19  December  2017. India wished to highlight the key issues regarding its 3  January  2018 
communication. At the ou tset, India expressed its deep concerns regarding the events in this 
dispute (DS456). India had filed a report on its progress in the implementation of the DSB's 
recommendations and rulings, which dated 14  December  2017 (WT/DS456/17). Therein, it had 
informed the DSB that it had ceased to impose any measures that had been found inconsistent 
with the DSB's recommendations and rulings. India said that it was therefore surprised that the 
United  States had filed its request for suspension of concessions or othe r obligations on 
19 December  2017. If the United States had had any doubts or concerns regarding India's 
compliance, it should have sought discussions with India. India noted that instead there had been 
silence from the United States between the filing of India's report and the filing of the US request 
for suspension of concessions. The US request was silent on the fundamental prerequisites for 
initiating a request under Article  22.2 of the DSU. It was silent on why the United States believed 
that there was  non-compliance by India with the DSB's recommendations and rulings. It was silent 
on any negotiations preceding the request and it was silent on the level of suspension or 
retaliation that the United States was seeking to obtain from the DSB.  
2.11.   India was se verely prejudiced by the vagueness and opaqueness of the US request under 
Article  22.2 of the DSU, since the US request simply referred to Article  22.2 of the DSU in the 
abstract, without any indication as to why the United States considered that India did  not comply 
with the DSB's  recommendations and rulings, or what was the level of suspension that the 
United  States considered to be equivalent to the purported level of nullification or impairment, if 
any. India further emphasized that if the United States  had any disagreement with India as to 
whether there had been compliance, the fact of non -compliance must first be established in 
accordance with the procedures of Article  21.5 of the DSU. However, despite repeated requests, 
the United States had refused t o sign a sequencing agreement with India. India said that this went 
against past practice of WTO Members acting in good faith. India noted that in a recent dispute 
against the United States, namely "US  – Carbon Steel (India)" (DS436), India had acceded to the 
US request to sign a sequencing agreement. India emphasized that given the facts and 
circumstances of this matter, the determination of the consistency of measures implementing the 
DSB recommendations and rulings must take place under Article  21.5 of t he DSU before the level 
of suspension of concessions or obligations could be assessed under Article  22.6 of the DSU. India 
said that it was confident that proceedings under Article  21.5 of the DSU would lay to rest any 
doubts concerning India's compliance with the DSB's recommendations and rulings, and would 
thereby nullify the need for any proceedings under Article  22.2 of the DSU in the first place. India 
strongly objected to the US request, dated 19  December  2017, seeking authorization from the 
DSB for t he suspension of concessions or other obligations. India requested that its objection be 
placed on record.  
2.12.   The representative  of the European  Union  said that t he United States had stated that the 
DSB must authorize, at the present meeting, the United State s to suspend concessions because 
India had not objected to the US request.  First, the EU wished to recall  its well -established position 
that the referral to arbitration of an Article  22.2 DSU request to suspend concessions was done by 
the DSB. The EU refer red, for instance, to its communications contained in documents 
WT/DS386/38 and WT/DS386/40, in the context of the "US -COOL" (DS386) dispute. The EU noted 
that in India's communication of 3  January  2018 (WT/DS456/19), India had "strongly object[ed] to 
the US request, dated 19  December  2017, seeking authorization from the DSB for suspension of 
concessions or other obligations and request[ed] that this objection may be considered in the 
special meeting of the DSB scheduled for 12  January  2018".  In light of th ese circumstances, 
the EU considered that, at the present meeting, the DSB could not authorize the United  States to 
suspend concessions and that the DSB would refer the matter to arbitration in accordance with 
Article  22.6 of the DSU.  
2.13.   The representative of Canada  said that Canada wished to  express concern at the absence of 
a proposed level of suspension of concessions from the DSU Article  22.2 request of the 
United  States for authorization from the DSB.  Canada was of the view that a DSU  Article  22.2 
request should include either a proposed amount for the level of suspension or a description of the 
proposed formula  to determine that level. Canada also said that other provisions of Article  22 of 
the DSU confirmed that the level of suspensi on was a crucial element of a DSU Article  22.2 
request. Specifically, Article  22.4 of the DSU provided that "the level of the suspension of 
concessions or other obligations authorized by the DSB shall be equivalent to the level of 
nullification or impairme nt". Canada further noted that Article  22.6 of the DSU accorded the 
responding Member the right to object to "the level of suspension proposed", in which case the WT/DSB/M/406  
 
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  matter shall be referred to arbitration.  A responding Member should know the proposed amount or 
formula so that it could make an informed decision as to whether or not to avail itself of its right 
under DSU Article  22.6 to object to the proposed level of suspension. In the absence of an amount 
or formula, a responding Member would be compelled to object so as to trigger arbitration. 
Pursuant to Article  22.6 of the DSU, a responding Member had the right to object to the level of 
suspension proposed. Therefore, the failure to include a proposed level of suspension in an 
Article  22.2 request adversely  affected the right accorded by Article  22.6 of the DSU to the 
responding Member. Canada noted that most past DSU Article  22.2 requests included such an 
amount or description of a formula. Finally, Canada urged complaining Members to avoid calling on 
the D SB to authorize an unspecified level of suspension out of concerns for a lack of transparency.  
2.14.   The representative of Brazil  said that with respect to the US request to suspend concessions 
under Article  22.2 of the DSU, Brazil wished to comment on the minim um requirements necessary 
to ensure due process in arbitration procedures. Since there was no third -party participation  in 
Article  22.6 arbitrations, Brazil took this opportunity to present the following comments. A request 
for suspension of concessions or  other obligations must give appropriate notice to the other party 
and be apt to enable the DSB to properly authorize the suspension, or define the terms of 
reference of the Arbitrator, if the matter was referred to arbitration. For that purpose,  a request  
for suspension of concessions or other obligations must first set out, pursuant to Article  22.4 of 
the DSU, a specific level of suspension, i.e. , a level considered to be equivalent to the nullification 
and impairment caused by the WTO -inconsistent measur e and, second, pursuant to Article  22.3 of 
the DSU, must specify the agreements and sectors under which concessions or other obligations 
would be suspended. Brazil said that it seemed that the US request had not met the first 
requirement. Brazil further st ated that the United States had not indicated the level of suspension 
of concessions or other obligations, as it had not indicated an amount or, at least, specified a 
method or formula to calculate it. Brazil said that this raised serious concerns. First, the other 
party had not received proper notice of the level of suspensions, thus hindering its ability to 
defend itself. Therefore, the other party had to object to an unknown level of suspension. Second, 
the suspension of concessions or other obligations was a measure of last resort, which was not to 
be taken unilaterally, but rather authorized by the DSB. According to Article  22.4 of the DSU, 
the DSB could only authorize the suspension of concessions or other obligations at a level that was 
equivalent to the level of nullification or impairment. A request that did not indicate or explain the 
proposed level of suspension lacked a key procedural element and thus hampered the ability of 
the DSB to properly discharge its function at this stage of the dispute.  
2.15.   The representative of Japan  said that Japan would like to make a few observations on the 
matters raised at the present meeting. First, Japan noted that  Article  22.6 of the DSU stated "If 
the Member concerned objects to the level of suspension proposed, […]  the matter shall be 
referred to arbitration ". Japan said that the text was clear. Once the request for authorization was 
made and the objection was filed, the matter was automatically referred to arbitration. There was 
no need for the DSB to consider the objection. India claimed in its objection that the US request 
was invalid for several reasons. Japan noted that one of the reasons was that the United  States 
had failed to initiate negotiations on compensation. However, Article  22.2 of the DSU stated that 
the implementing Member "shall, if so requested, […] enter into negotiations" with the complaining 
party, and "[i]f no satisfactory compensation has been agreed", then the complaining party was 
entitled to make a request for an authorization to suspend con cessions or other obligations. Japan 
said that the complaining party was not obliged to initiate such negotiations, and as stated by 
India, "a necessary precondition to" a request for authorization was the lack of agreement about 
satisfactory compensation.  Japan noted that it appeared that this condition was met. Japan also 
noted that India claimed that the US request was invalid and requested the DSB to consider its 
objection. Japan noted that it was not clear what India sought with this claim. Japan wonde red 
whether India claimed that the DSB should decide whether the US request was valid or not, and if 
it was not valid, the DSB should decline the US request and that there was no legal basis for such 
claim. Japan reiterated that the text was clear: if the objection was filed, "the matter shall be 
referred to arbitration". The DSB was not in a position to make such judgement. For example, in 
the case of a panel establishment, irrespective of the responding party's view on the consistency of 
a panel request p ursuant to Article  6.2 of the DSU, the DSB had to establish a panel pursuant to 
Article  6.2 of the DSU. The issue of consistency of a panel request with Article  6.2 of the DSU was 
decided by the panel, once such a panel was established. Japan said that the  same logic applied in 
this case. Japan was of the view that if the deficiency of the request for authorization was of 
relevance, then the deficiency of the objection by the responding party was equally of relevance. 
Japan questioned what the consequence w ould be if the DSB decided that an objection was not WT/DSB/M/406  
 
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  valid, as claimed by the United States. Japan reiterated its view that the DSB was not in a position 
to make such judgement. It was therefore reasonable to read Article  22.6 of the DSU to imply that 
if an objection was made, the matter shall be automatically referred to arbitration.  
2.16.   The representative of China  said that his country shared the concerns expressed by some 
delegations. China believed that filing a request for authorization to suspend concessi ons or other 
obligations without specifying the anticipated level of suspension was not consistent with the 
requirements of the DSU. China recalled that Article  22.3 and  22.4 of the DSU established the 
principles and procedures  that a complaining party had  to follow when considering what 
concessions or obligations to suspend. China was of the view that in drafting the DSU, Members 
had assumed that the complaining party should make the initial proposal for the level of 
suspension when requesting authorizatio n to suspend concessions or other obligations. China 
noted that it was also implicit in other paragraphs of Article  22 of the DSU that there must first be 
a level of suspension proposed by the complaining party. Article  22.6 of the DSU provided that 
"[I]f the Member concerned objects to the level of suspension proposed, […], the matter shall be 
referred to arbitration". Article  22.7 of the DSU stated that the Arbitrator must determine whether 
the level of such suspension was equivalent to the level of nulli fication or impairment and whether 
the proposed suspension of concessions or other obligations was permitted under the covered 
agreements. Therefore, prior to the Arbitrator taking a decision, there should have already been a 
proposed level for considerati on. China did not understand the reason why the United States had 
failed to provide a level of suspension that it considered appropriate in its request. China urged the 
United  States to abide by the DSU rules.  
2.17.   The representative of the United  States  said t hat the United States would address the 
comments made  by a few delegations before reacting to India's statement . First, with reference to 
the EU assertion that DSB action was necessary to refer the matter to arbitration, the US position 
on this subject was  well-known. No decision by the DSB was necessary to refer the matter to 
arbitration. Article  22.6 of the DSU did not refer to any action of the DSB, and the text was clear 
that once a Member objected to another Member's request, that matter was automatica lly referred 
to arbitration.  The situation here was not unique. Members could  recall that no DSB decision had 
been needed in this dispute to refer the matter to the Appellate Body upon India's appeal, nor had 
any DSB decision been needed in past disputes t o refer the matter of the reasonable period of time 
to an Article  21.3(c) Arbitrator.  As just one illustration of why the DSB was not deciding at the 
present meeting to refer these matters to arbitration, the United States noted that the DSB did not 
have before it any proposed decision to refer the matter to arbitration. The DSB rules would 
require such a decision to be submitted 10  days before the DSB meeting. Clearly, the DSB was not 
taking a decision at the present meeting, nor had it on any of the prev ious occasions when 
requests had been referred to arbitration. Indeed, arbitration had commenced in the past without 
the need for a DSB meeting.10 The DSU text made clear that this was the correct reading of 
Article  22.6 of the DSU. Following a request by a  Member under Article  22.2 of the DSU for 
authorization to suspend concessions or other obligations, the text of the second sentence of 
Article  22.6 stated plainly: "If the Member concerned objects to the level of suspension 
proposed…the matter shall be re ferred to arbitration".  
2.18.   Second, with regard to the comments that had been made at the present meeting by 
Canada, China and Brazil, the United States noted that, as an initial matter, the suggestion that 
the US request did not specify a proposed level of su spension was incorrect.  The United  States 
said that, as it had explained earlier,  the US request had clearly stated that "the United  States 
requests authorization from the DSB to suspend concessions or other obligations with respect to 
India at an annual l evel based on a formula commensurate with the trade effects caused to the 
interests of the United States by the failure of India to comply with the recommendations and 
rulings of the DSB". The United States said that it was unclear whether these Members in tended to 
suggest a request under Article  22.2 of the DSU should specify a monetary amount or include a 
detailed formula, but neither was required by the text of the DSU. The United States referred 
these delegations to prior requests made under Article  22.2 of the DSU. While some requests had 
                                                
10 See, e.g., Minutes of 4 June 2007 DSB Meeting, WT/DSB/M/233 (relating to DS268), paras. 3, 4, 5 
(noting agreement of parties matter had already been referred to arbitration by filing of objection); Minutes of 
21 January  2008 DSB Meeting, WT/DSB/M/245 (relating to DS322), p. 2 (fi rst through fourth paragraphs) 
(noting agreement of parties matter had already been referred to arbitration by filing of objection; request for 
authorization withdrawn from DSB Agenda); Minutes of 13 May 2016 DSB Meeting, WT/DSB/M/376, (relating 
to DS381),  paras. 7.9 -7.11 (noting agreement of parties matter had already been referred to arbitration by 
filing of objection therefore need not remain on the DSB Agenda).  WT/DSB/M/406  
 
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  assigned a monetary value to the proposed level of suspension, others had not.11 Several requests 
had been made for a level of suspension commensurate with the annual level of nullification and 
impairment.12 While some s uch requests may have included an indicative monetary value for the 
first year, the request was nevertheless for an amount to be determined by formula as 
commensurate with the annual level of nullification and impairment.13 The United States also 
noted Indi a's request for authorization in the dispute "US  – Offset Act" (Byrd Amendment) 
(WT/DS217). The United States found it interesting that India complained that the US request did 
not specify a monetary value for the proposed level of suspension, when India i tself had not 
included such a value in the past.14 In any event, the DSB did not need to debate at the present 
meeting what some Members considered "should" be included in an Article  22.2 request, as 
opposed to what the text of the DSU required. The US requ est did in fact specify the proposed 
level of suspension consistent with Article  22.2 of the DSU.  
2.19.   Finally, with regard to India's statement at the present meeting, the United States still had 
not heard from India an objection to the proposed level of suspe nsion. As the United States had 
explained, the objections India had stated did not constitute legal bases for rejection of the 
US request. Article  22.6 of the DSU provided that the matter shall be referred to arbitration if the 
Member concerned objected to  the level of nullification and impairment indicated in the request.  
This was the only basis upon which the request for suspension would not be granted by the DSB 
under Article  22.6 of the DSU.  Absent an objection "to the level of suspension proposed", the  
US request for authorization was the item before the DSB, and "the DSB, upon request, shall grant 
authorization to suspend concessions or other obligations within 30  days of the expiry of the 
reasonable period of time unless the DSB decides by consensus t o reject the request". The DSU 
did not provide for any other outcome under these circumstances.  The United States said that it 
would therefore continue to insist that the DSB must grant the authorization as requested by the 
United  States.  
2.20.   The representativ e of India said that India wished to emphasize that in both, its 
communication, dated 3  January  2018, as well as its statement made at the present meeting, 
India had clearly objected to the DSU Article  22.2 request of the United States on two grounds: 
(i) non-compliance with the procedures and principles of the DSU; and (ii) failure to specify the 
level of suspension that the United States was seeking an authorization  for, which made it difficult 
for the responding party to decide whether or not to object  under Article  22.6 of the DSU. India 
reiterated its strong objection to the Article  22.2 request of the United States in this dispute.  
2.21.   The representative of the European  Union  said that the previous speakers had referred to a 
number of issues on which the  EU would like to provide its views. First, Japan and the 
United  States had mentioned the issue of who referred the matter to arbitration, when the 
defending party had already objected to the request for suspension prior to the meeting of 
the DSB. The EU s aid that, as mentioned by the United States, this was not the first time this issue 
was raised. The EU recalled its well -established position that the referral to arbitration of a DSU 
Article  22.2 request to suspend concessions was done by the DSB. Given t he substantial legal 
uncertainty persisting on this issue, the EU intended to continue the practice that had been used in 
                                                
11 See, e.g., "US – 1916 Act (Japan): Recourse by Japan to Article 22.2 of the DSU " (WT/DS162/ 18) 
("Since the recommendations and rulings of the DSB were that the Anti -Dumping Act of 1916 as such violated 
the US obligations under the GATT 1994, the AD Agreement and the WTO Agreement, it is not practical to 
indicate the level of nullification or imp airment in terms of monetary value." ). 
12 See, e.g., "US – Clove Cigarettes: Recourse to Article 22.2 of the DSU by Indonesia"  (WT/DS406/12) 
and "EC – Approval and Marketing of Biotech Products: Recourse to Article 22.2 of the DSU by the 
United  States"  (WT/DS291/39).  
13 See, e.g., "US – Large Civil Aircraft (2nd complaint): Recourse to Article 22.2 of the DSU, and 
Articles  4.10 and 7.9 of the SCM Agreement, by the European Union"  (WT/DS353/17) ("Accordingly, pursuant 
to Article 22.2 of the DSU and Articles 4. 10 and 7.9 of the SCM Agreement, the European Union requests 
the DSB to grant authorization to the European Union to take countermeasures that are appropriate, and 
commensurate with the degree and nature of the adverse effects determined to exist, respecti vely. Based on 
currently available data, countermeasures consistent with these s tandards total approximately US$  12 billion 
annually. The European Union may update this amount annually using the most recently available data.").  
14 See "US – Offset Act (Byrd Amendment): Recourse by India to Article 22.2 of the DSU " 
(WT/DS217/23) ("Pursuant to Article 22.2 of the DSU, India requests the authorization of the DSB to suspend 
the application to the United States of tariff concessions and related o bligations under the GATT 1994 in an 
amount that will be determined every year by the amount of offset payments made to affected domestic 
producers in the latest annual distribution of anti -dumping and countervailing duties under the CDSOA, as 
explained be low.").  WT/DSB/M/406  
 
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  past cases. In particular, as a complaining party, the EU did not intend to incur the unnecessary 
legal risk of withdrawing an Article  22.2 request from the DSB Agenda following an objection 
raised by the defending party. The EU said that it preferred the legal certainty that resulted from 
the referral to arbitration taking place in the DSB meeting. The EU invited other Members to 
consid er following the same approach.  
2.22.   Second, the United States had referred to the proper sequence between DSU Article  21.5 
proceedings and DSU Article  22 procedures. The EU said that it took note of India's statement that 
India had brought the measures at issu e into conformity with the DSB's recommendations and 
rulings. The EU also noted that the United States did not agree that India had brought its 
measures into compliance with the covered agreements. The EU noted that, therefore, it appeared 
that "there is a  disagreement as to the existence or consistency with a covered agreement of 
measures taken to comply with the recommendations and rulings" of the DSB within the meaning 
of Article  21.5 of the DSU. The EU recalled that, pursuant to that provision, "such di spute shall be 
decided through recourse to these dispute settlement procedures, including wherever possible 
recourse to the original panel". In cases of disagreement about the existence or consistency with 
WTO rules of compliance measures, concessions or o ther obligations could be suspended under the 
DSU once there was a multilateral determination on the alleged compliance action. The EU said 
that it trusted that India and the United States would ensure that the DSU procedures with regard 
to compliance and suspension of obligations in this dispute, would be conducted efficiently and in 
the correct sequence.  
2.23.   Third, Canada, Brazil and China had made references to the "formula" mentioned in the 
US request for retaliation. The EU observed that requests for retal iation under Article  22.2 of the 
DSU served similar due process objectives as requests under Article  6.2 of the DSU. First, such 
requests gave notice to the other party and enabled it to respond to the request for retaliation. 
Second, a request under Artic le 22.2 of the DSU by a complaining party defined the jurisdiction of 
the DSB in authorizing suspension. Therefore, requests under DSU Article  22.2 must, inter alia, set 
out a specific level of suspension, i.e. , a level equivalent to the nullification and impairment caused 
by the WTO -inconsistent measure, pursuant to Article  22.4 of the DSU. If the request did not 
indicate a specific number, that level must be otherwise specifically identifiable on the basis of the 
request. The EU agreed with the statement made by Japan that the question, as to whether or not 
the US request fulfilled these requirements, was a jurisdictional issue, which would need to be 
addressed by the Arbitrator in this dispute.  
2.24.   The representative of Japan  said that his delegation wished t o suggest a practical way 
forward. The US request for authorization stated that the United States requested authorization  to 
suspend "at an annual level based on a formula commensurate with the trade effects caused to the 
interest of the United States by t he failure of India to comply with the recommendations and 
rulings of the DSB". According to the United States, this described the proposed level of 
suspension. India, in turn, stated in its objection that it "strongly objects to the US request of 
19 Decem ber 2017", which included the US description of the level of suspension. Thus, read 
together, Japan was of the view that India had objected to the indicated level of suspension 
contained in the authorization request, hence the requirement in Article  22.6 o f the DSU had been 
met and the matter had already been referred to arbitration. Japan said that there was nothing 
further for the DSB to consider at the present meeting.  
2.25.   The representative of the United  States  said that , regarding the EU's statement, the 
United  States continued to be surprised by a suggestion by any delegate that the US request was 
somehow  deficient and did not specify the proposed level of suspension requested. The 
United  States said that it did: "the United States requests authorization from the DSB to suspend 
concessions or other obligations with respect to India at an annual level based on a formula 
commensurate with the trade effects caused to the interests of the United States by the failure of 
India to comply with the recommendations  and rulings of the DSB".  The United States asked 
Members to consider the EU's request under Article  22.2 of the DSU in "US — Large Civil Aircraft" 
(2nd complaint) (DS353). There, the European Union had "request[ed] the DSB to grant 
authorization to the Eu ropean Union to take countermeasures that are appropriate, and 
commensurate with the degree and nature of the adverse effects determined to exist, 
respectively".15 This statement was not unlike the framing of the US request. The United States 
also referred delegations to other requests, such as Indonesia's request in "US  – Clove 
                                                
15 WT/DS353/17.  WT/DSB/M/406  
 
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  Cigarettes"(DS406), where Indonesia had not included a monetary value or a detailed formula.16 
That request was almost identical to the request that the United States had submitted in  this 
dispute. Nonetheless, the issue of what "should" be included in a request under Article  22.2 of the 
DSU was not before the DSB at the present meeting.  The issue was whether India had objected 
consistently with Article  22.6 of the DSU. The United Stat es noted that the EU had stated that it 
understood India to have objected that "the principles and procedures of paragraph  3 have not 
been followed". The United States said that if that was India's position, India should confirm this.  
Alternatively, Japan had indicated that it understood India to be objecting to the level of 
suspension proposed. The United States said that if India were to confirm that it was , in fact,  
objecting to the level of suspension proposed, this would assist Members in this discussi on. The 
United States said, however, that it had  not heard India articulate such objections – not in India's 
"objection" submitted before the present meeting or in India's statement made at the present 
meeting. The United  States further stated that the fac t that India had not clarified the basis of 
their objection at the present meeting led the United States to understand that India was in fact 
not objecting to the level of suspension proposed by the United States, but rather to the 
sufficiency of the reque st, which was not a basis for referral to arbitration. Therefore, without 
clarification from India, the United  States insisted that the DSB must authorize, at the present 
meeting, the suspension of concessions as requested.  
2.26.   The representative of India said that India reiterated its objection to the US request under 
Article  22.2 of the DSU, as stated in its communication dated 3  January  2018 and its statement 
made at the present DSB meeting. India objected to the purported level of suspension without 
prejudi ce to the question of whether or not the DSU Article  22.2 request of the United  States 
contained such a level.  
2.27.   The DSB took note  of the statements and that the matter raised by India in document 
WT/DS456/19 has been referred to arbitration, as required by Article  22.6 of the DSU.  
2.28.   The representative of the United  States  said that the United States did not consider India's 
"objection " notification of 3  January  2018, to have clearly objected to the level of suspension 
proposed by the United States. The United States said, however, that as India had now clarified 
that it was objecting to the US request on that basis, the United States u nderstood that, upon 
India's objection, the matter had been referred to arbitration.  
2.29.   The DSB took note  of this statement.  
__________  
                                                
16 WT/DS406/12.