JOB/DSB/1/Add.6 
 
3 August 2016 
(16-4159)  Page: 1/4 
 Original: English 
 
STATEMENT ON A MECHANISM FOR DEVELOPING, DOCUMENTING AND SHARING 
PRACTICES AND PROCEDURES IN THE CONDUCT OF WTO DISPUTES 
Addendum 
The following communication, dated 29 July 2016, is being circulated at the request of the 
Delegation of Canada.  
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ADDITIONAL PRACTICES AND PROCEDURES  IN THE CONDUCT OF WTO DISPUTES 
ANNOTATED SEQUENCING AGREEMENT 
The "sequencing" issue involves a potential confli ct between the procedures for compliance review 
under Article 21.5 of the Dispute Settlement Understanding (DSU) and the procedures for the DSB 
to authorize suspension of concessions under DS U Article 22.6. DSU Article 21.5 provides that 
disagreements over measures taken to comply must be decided through recourse to the 
procedures set out in the DSU. DSU Article 22.6 provides that where a Member has failed to bring 
a measure into compliance by the expiry of the re asonable period of time (RPT), the DSB shall 
grant authorization to the complaining Member to suspend concessions or other obligations "within 
30 days" of the expiry of the RPT. 
 In circumstances where a measure is taken to comply at the end of the RTP but the parties disagree about whether it achieves compliance, both Articles 21.5 and 22.6 apply. However, while 
Article 21.5 compliance proceedings may take several months, DSU Article 22.6 requires the DSB 
to authorise the suspension of concessions within 30 days of the end of the RPT. This raises two 
issues: whether compliance proceedings need to precede an authorization request, and if so, the 
compliance proceedings cannot be completed in time to make the request. 
 "Sequencing Agreements" concluded between the disputing parties have emerged as a practice to 
address these issues by setting out the procedure that will be followed when these circumstances 
arise. They set out, for the purposes of the spec ific dispute, that the parties agree first that 
compliance review will precede the grant of au thorization, and second that the request for 
authorization can be made after the deadline provided to do so, following the completion of 
compliance proceedings. In this way, Sequencing Agreements overcome the uncertainty that the 
text of the DSU creates in the compliance phase of  disputes and contribute to the effectiveness 
and predictability of the WTO DS system. 
 
Sequencing Agreements are typically agreed prior to or shortly after the expiration of the RPT. 
Since one of the main objectives of such agreements is to preserve a complaining party's right to 
obtain the DSB's authorization to suspend concessi ons, it is important that these agreements be 
concluded before the expiration of the deadline to request such authorization (which would be less 
than 20 days after the expiry of  the RPT once the requirement to call a DSB meeting and circulate 
the request are taken into account). 
 
What follows is an annotated version of the Sequencing Agreement concluded between Canada and the United States in the "United States – Certain Country of Origin Labelling Requirements" 
(DS384) dispute that was circulated to the DSB as document WT/DS384/25. 
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  Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding 
 
United States – Certain Country of Origin Labelling (COOL) Requirements  (WT/DS384) 
 
 
The Dispute Settlement Body ("DSB") adopte d its recommendations and rulings in the 
dispute "United States – Certain Country of Origin Labelling (COOL) Requirements" (WT/DS384) 
on 23 July 2012. 
 Pursuant to Article 21.3(c) of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU"), the arbitrator fixe d the reasonable period of time ("RPT") for the 
United States to implement the recommendations and rulings of the DSB at 10 months from 
23 July 2012 (WT/DS384/24). The RPT expired on 23 May 2013. On that date, the US Department of Agriculture adopted a final rule modifying the US COOL regulations. 78 Fed. Reg. 31,367 
(24 May 2013). 
 
Comment: These introductory provisions provide the important context, including the 
date of the expiry of the RPT, which sign als the start of the 30-day deadline under DSU 
Article 22.6 to request authorization from th e DSB to suspend concessions, and that a 
compliance measure was taken, which is wh at triggers the sequencing conflict. 
 
Canada and the United States (the "Parties") have agreed on the following procedures for 
the exclusive purposes of this dispute. They are de signed to facilitate the resolution of the dispute 
and reduce the scope for procedural disputes and are without prejudice to either Party's views on 
the correct interpretation of the DSU: 
 
1. If Canada considers that the United States has adopted a measure to comply with the 
recommendations and rulings of the DSB in DS384 that is inconsistent with the covered 
agreements or there is disagreement between  the Parties as to the existence of a 
measure taken to comply, Canada may request the establishment of a panel pursuant to DSU Article 21.5 at any time. 
 
Comment: This paragraph clarifies that the complaining party can request the 
establishment of a compliance panel at any ti me in the future, dispelling any uncertainty 
about whether there is a time limit on doing so. 
 
2. Canada is not required to hold consultations with the United States prior to requesting 
the establishment of an Article 21.5 panel. 
 
Comment: There are differing views among Members on whether consultations are 
required in compliance proceedings. In this case, the parties agreed that consultations 
are not required. Some Sequencing Agreemen ts will instead require consultations but 
stipulate that the responding party will no t block the establishment of the compliance 
panel on the first request. These issues ar e the subject of negotiations between the 
disputing parties.  
 
3. The Parties shall cooperate to enable the DSU Article 21.5 panel to circulate its report 
within 90 days of the panel's establishment, excluding such time during which the 
panel's work may be suspended pursuant to DSU Article 12.12. 
 
4. Either Party may request the DSB to adopt the report of the DSU Article 21.5 panel at a 
DSB meeting held at least 20 days after the circulation of the report to Members unless 
either Party appeals the report to the Appellate Body. 
 
Comment: In the event that there is no appeal , pursuant to this paragraph, either party 
may request that the DSB adopt the panel repo rt at any time so long as 20 days have 
passed since its circulation.  
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  5. In the event of an appeal of the DSU Ar ticle 21.5 panel report, the Parties shall 
cooperate to enable the Appellate Body to circulate its report to the Members within 90 days from the date of notification of the appeal to the DSB. Further, either Party may 
request the DSB to adopt the reports of the Appellate Body and of the DSU Article 21.5 
panel (as modified or upheld by the Appellate Body report) at a DSB meeting held within 
30 days of the circulation of the Appellate Body report to Members. 
 
Comment: This paragraph commits the parties to cooperate to have an appeal resolved 
expeditiously and requires that the Appellate  Body report (and the panel report as 
modified or upheld by the Appellate Body report) be adopted within 30 days of its 
circulation to Members.  
 
6. In the event that the DSB, following a proceeding under DSU Article 21.5, rules that a 
measure taken to comply does not exist or is inconsistent with a covered agreement, 
Canada may request authorization to suspend the application of concessions or other 
obligations under the covered agreements to the United States pursuant to DSU Article 22. The United States shall not assert that Canada is precluded from obtaining 
such DSB authorization on the ground that the request was made outside the 30-day 
time-period specified in DSU Article 22.6. This  is without prejudice to the right of the 
United States to refer the matter to arbitration in accordance with DSU Article 22.6. 
 
Comment: This is the key provision of Sequen cing Agreements. It both establishes that 
compliance proceedings will precede a request for authorization and commits the 
responding party not to object to the request at any time in the future despite the fact 
that the deadline in DSU Article 22.6 will have  expired by the time it is made. Without 
this commitment, the responding party could attempt to object, which would cast 
serious doubt on the applicability of the reve rse consensus rule in DSU Article 22.6 that 
requires the DSB to grant the request for authorization to suspend. 
 
This paragraph also preserves the right of the responding party to request that the level 
of concessions to be suspended be determined  through arbitration if it objects to the 
level of suspension proposed by the compla inant or claims that the principles and 
procedures in DSU Article 22.3 have not be en followed. The next three paragraphs 
confirm that the process outlined in DS U for arbitration proceedings will apply.  
 
7. If Canada requests authorization to suspend the application of concessions or other 
obligations under the covered agreements to the United States pursuant to DSU 
Article 22, the United States may object under DSU Article 22.6 to the level of 
suspension of concessions or other obligations and/or claim that the principles and procedures set forth in DSU Article 22.3 have not been followed, thereby referring the matter to arbitration pursuant to DSU Article 22.6. 
 
8. The Parties will cooperate to enable the arbi trator under DSU Article 22.6 to circulate its 
decision within 60 days of the referral to arbitration. 
 
9. If any of the original panelists is not avai lable for either the DSU Article 21.5 panel or 
the Article 22.6 arbitration (or both), the Parties will promptly consult on a replacement, 
and either Party may request the Director-General of the WTO to appoint, within 
ten days of being so requested, a replacement for the proceeding or proceedings in which a replacement is required. If an original panelist is unavailable to serve in either of the proceedings, the Parties will further requ est that, in making this appointment, the 
Director-General seek a person who will be available to act in both proceedings. 
 
10. The Parties will continue to cooperate in all matters related to these agreed procedures 
and agree not to raise any procedural object ion to any of the steps set out herein. If, 
during the application of these procedures, the Parties consider that a procedural aspect has not been properly addressed in these pr ocedures, they will endeavour to find a 
solution within the shortest time possible that will not affect the other aspects and steps 
agreed herein. 
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  11. These agreed procedures in no way prejudice other rights of either Party to take any 
action or procedural step to protect its righ ts and interests, including recourse to the 
DSU. 
 
Comment: The intent of many of the provisions  of Sequencing Agreements is to minimize 
any uncertainty that despite the parties havi ng waived some of the provisions of the 
DSU (e.g., with respect to deadlines fo r granting authorization), the remaining 
provisions continue to apply to other aspects of the proceeding. 
 
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