RESTRICTED  
  
WT/DSB/M/372  
 
7 March 2016  
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Dispute Settlement Body 
21 December 2015    
 
 MINUTES OF MEETING 
HELD IN THE CENTRE WILLIAM RAPPARD 
ON 21 DECEMBER 20151 
Chairman: Mr. Harald Neple (Norway) 
1  UNITED STATES – CERTAIN COUNTRY OF ORIGIN LABELLING (COOL) REQUIREMENTS 
A.  Recourse to Article 22.7 of the DSU by Canada (WT/DS384/38) B.  Recourse to Article 22.7 of the DSU by Mexico (WT/DS386/39) 1.1.  The Chairman proposed that the DSB take  up these two sub-items together since they 
pertain to the same matter. First, he drew attention to the communication from Canada contained 
in document WT/DS384/38, and invited the representative of Canada to speak. 
1.2.  The representative of Canada said that first of all, Canada would like to start by 
acknowledging that over the weekend the United St ates had taken a number of steps that put it on 
a path to finally resolving this long-standing dispute between the two countries. This was a positive development for both economies in general and for the integrated North American 
livestock market in particular. Canada was plea sed with where this was heading and appreciated 
the efforts made, in both the US administration and in the US Congress, to bring about this positive result. Once the United States had completed the remaining steps necessary to remove the discrimination in the US market, this result would also constitute further proof of the 
effectiveness of the WTO as a forum for dispute settlement, even though Canada would have 
preferred to have achieved this result much ea rlier. However, before making a statement about 
the developments in this dispute, Canada would like to comment on the actions of the 
United States on 18 December 2015, which were particularly puzzling given the positive direction 
that this dispute had taken. As delegations were aware, Canada and Mexico had requested this meeting to be held on Friday, 18 December 2015.  But when the election convenor attempted to 
open the meeting, the United States had prevente d it from taking place by threatening to block 
the election of an interim Chair. As a result, Canada had no choice but to go along with the suspension of the meeting until Monday 21 December 2015. With apologies to those who had also been present on 18 December 2015, Canada would take this opportunity to repeat, for the record, 
some of the points made in its statement on 18 December 2015. Canada reiterated its deep 
disappointment and regret about the decision of the United States to prevent the meeting from 
proceeding. The opposition of the United States to the meeting taking place on 18 December 2015 
was a clear attempt to interfere with the rights of Canada and Mexico to have the DSB grant 
authorization to suspend concessions and other obligations to the United States. One had to be clear about the significance of the actions of the United States. The authorization of suspension of 
concessions was one of the most important function s of the DSB. It was the DSB's last act at the 
culmination of a long process in disputes where a responding party had failed to bring itself into compliance, despite having had numerous occasions to do so. And as one of the acts of the DSB that is done by negative consensus, the grant of authorization to suspend concessions was also 
based on one of the most important innovations of the WTO, and was a primary source of the 
success and credibility this institution had achieved for effective dispute settlement. Any attempt therefore to interfere with a grant of authorization, no matter how indirectly, was an assault on a 
                                               
1 This meeting was originally scheduled for 18 December 2015 at 3pm (WTO/AIR/DSB/20). WT/DSB/M/372 
 
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  fundamental component of the system. In its effo rt to prevent the DSB from considering Canada 
and Mexico's requests on 18 December 2015, the United States invoked a set of 1995 "Guidelines on the Arrangements for Scheduling of Meetings of WTO Bodies" (WT/L/106), and several provisions of the Marrakesh Agreement. Their arguments were unconvincing on 18 December 2015 
and would remain unconvincing if they were repeated at the present meeting. 
1.3.  First, the Guidelines cited by the United States were simply guidelines. Indeed, the Guidelines 
stated that only one Council meeting "should" be held at a time, a clear use of language that 
confirmed their non-mandatory character. Moreover, the Guidelines explicitly acknowledged, in 
Footnote 1, that the DSB had "particular requir ements" for meetings and, therefore, that the 
Guidelines required certain flexibility when a pplied to DSB meetings. The Guidelines had been 
drafted in 1995, in the early days of the Organiza tion when the volume and complexity of matters 
that would be subject to DSB authority currently ha d not yet been fully appreciated. As a result of 
these particular requirements, the prerogative of Members to call for a "special" meeting of the DSB had become routine practice, and this prerogative was not undermined by a set of 
non-mandatory Guidelines. Second, the United States cited Article IV of the Marrakesh Agreement, 
which they raised for the first time in their statement at the meeting on 18 December 2015, despite the fact that we had been discussing this  issue with them for several weeks. While the 
second sentence of Article IV:2 did provide that the General Council shall carry out the functions of 
the Ministerial Conference between Ministerial m eetings, nowhere did it suggest that the General 
Council ceased to exist when the Ministerial Co nference was meeting. Moreover, in the third 
sentence Article IV:2 further provided that th e General Council shall carry out other functions 
assigned to it by that Agreement, includin g convening "as appropriate to discharge the 
responsibilities of the DSB provided for in the DSU". These other functions were completely separate from those it performed on behalf of th e Ministerial Conference. Furthermore, it was not 
because Article IV:1 provided that the Ministerial Conference had the authority to take decisions 
on any matter under any agreement that another body responsible for a specific agreement could not meet at the same time as the Ministerial Co nference. To accept this argument would mean 
that no WTO Body could ever meet while the General Council itself was also meeting because, 
according to the US own argument, the General Co uncil performed the functions of the Ministerial 
Conference between meetings, including the author ity to take decisions under any Agreement. It 
was clear nonetheless that there was a significan t disagreement between the United States, on the 
one hand, and Canada, Mexico and many other Members, on the other hand, about the 
interpretation and application of Article IV and the Guidelines. But instead of working to resolve the disagreement, the United States decided to take matters into its own hands and unilaterally 
prevent the DSB meeting from proceeding. The Un ited States effectively had imposed its own 
interpretation of the Marrakesh Agreement and the 1995 Guidelines on other Members. This was an unprecedented move in the history of the DSB, one that was all the more concerning given that 
the item on the Agenda was an issue that was subject to reverse consensus. The negative 
implications of such a move should therefore not be underestimated. The United States could have and should have pursued a more constructive approach, one that would have preserved the integrity of the reverse consensus rule as well as the prerogative of the General Council to 
interpret the WTO Agreement. It could have, fo r example, recorded its reservation about the 
meeting taking place, but allowed it to proceed anyway given the importance of the principle at 
stake. It then could have sought to reach agreement in the General Council on the US 
interpretation, possibly even through an amendmen t to clarify and strengthen the 1995 Guidelines 
on this point. Canada therefore encouraged othe r Members to reject the approach taken by the 
United States to solve the disagreement over  the appropriateness of the DSB meeting on 
18 December 2015. Canada would also discourage all Members, including the United States, from 
considering this kind of approach as an acceptable tactic in the future to resolve disagreements about the interpretation of this Organization's legal structure and its Rules of Procedure. 
1.4.  Turning to the substance of this Agenda item, Canada returned to the DSB at the present 
meeting to submit, this time under Article 22.7 of the DSU, its request for authorization from the 
DSB to suspend concessions and other obligations to the United States. Canada recalled that at its meeting on 29 May 2015, the DSB had adopted the Appellate Body and compliance Panel Reports 
in the compliance phase of this dispute. The re sulting recommendations and rulings of the DSB 
concluded that the amended COOL measure continued to be inconsistent with the WTO obligations of the United States. At the 17 June 2015 DSB meeting, Canada had requested authorization to 
suspend concessions and other obligations to the United States. As a result of the US objection at 
that meeting to the amount requested by Canada, the matter had been referred to arbitration. The report of the Arbitrator had been circulated on 7 December 2015. In its decision, the Arbitrator WT/DSB/M/372 
 
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  had determined the annual level of nullification or impairment of benefits to Canada to be 
CDN$1,054,729,000. Canada was pleased that the am ount fixed by the Arbitrator confirmed the 
serious adverse impact that the COOL measure had on Canada's cattle and hog industries. Canada was pleased not only with the overall result of  the Arbitrator's Report, but also with many 
elements of the analysis. Canada certainly apprecia ted the work of the Arbitrator and all those in 
the Secretariat supporting the Arbitrator for their hard work in dealing with what was very complicated subject matter. Canada would nonetheless like to take this opportunity to comment 
on certain aspects of the Report. 
1.5.  First, it was regrettable that the Arbitrator had excluded Canada's losses arising from 
domestic price suppression caused by the COOL measure from the calculation of the level of nullification or impairment. This exclusion unduly narrowed the scope of the review of the adverse 
effects of an infringing measure in the calculation of the level of nullification or impairment by an 
arbitrator under Article 22.6 of the DSU.  Canada  was concerned that the views of the Arbitrator 
on this point could, if followed in the future, in appropriately limit the broad concept of nullification 
and impairment in Article 22.6 of the DSU. Second, regarding the particular methodology used by 
the Arbitrator, while Canada was pleased that the Arbitrator largely adopted Canada's methodology for calculating the price portion of th e export revenue losses, Canada did have some 
concerns with the methodology developed by the Ar bitrator for other aspects. The Arbitrator chose 
not to use well-established statistical and economic procedures to assess the impact that the COOL measure had on Canadian export quantities. The Ar bitrator avoided the use of the historical data 
on export quantities and thereby missed the oppo rtunity to improve upon the WTO's methods for 
calculating export quantity losses. More specifically with regard to its calculation of loss of export 
quantities, the Arbitrator chose to assess export quantity losses that would occur only over a short-run horizon, rather than the complete losses that occurred when a trade measure was 
imposed. This choice was manifested in the use of short-run elasticities over long-run elasticities, 
in paragraphs 6.30 - 6.32 of the Report. That ch oice significantly reduced the quantities concerned 
and therefore the total calculation of the nullification or impairment suffered by Canada. As a 
procedural matter, Canada noted that the issue of short-run versus long-run elasticities and their 
relationship with the appropriate counterfactual had not been discussed to any significant extent in the parties' written submissions, their answers to  the Arbitrator's written questions, or in the 
meeting of the Arbitrator with the parties in Gene va. Given the importance of this issue, Canada 
should have been given an opportunity to discuss that issue in more detail. In Canada's view, 
substantively short-run elasticities were inappropriate because, among other things, they presupposed an ability of the market to return to  normal over an unrealistically short period of 
time after the disruptions caused by the COOL meas ure. In addition, the Arbitrator's position on 
the counterfactual suggested that the level of nullification or impairment suffered by a Member could be found to be non-existent or minimal if a WTO-inconsistent measure of another Member 
decimated an industry in its territory. Based on the reasoning of the Arbitrator, no or very small 
losses would be estimated in such a case given that the removal of the measure was considered to occur after the damage to the industry had been done. 
1.6.  Finally, Canada wished to comment briefly on an issue that was included in the decisions in 
both disputes, but that applied only to the disput e in DS386, namely, the jurisdictional issue raised 
initially in the DSB by the EU and the subject of a follow-up communication from the EU in WT/DS384/39. Canada considered that the Arbitrator's analysis and ruling on this point was 
unnecessary and that the manner by which it proceeded in conducting that analysis raised due 
process concerns. First, neither of the parties in that dispute had challenged the jurisdiction of the Arbitrator. In fact, the parties to the DS386 dispute themselves denied that there were any 
questions of a "fundamental nature" that needed to  be addressed by the Arbitrator. Even the EU 
clearly indicated that it did not and would not seek to undermine the jurisdiction of the Arbitrator. So it was not entirely clear why the Arbitrator felt it necessary to rule on this question, and the fact that it did so remained a concern to Canada. Second, Canada's concern about the Arbitrator's 
ruling on this matter was exacerbated by the manner by which it had conducted the analysis. 
While the Arbitrator acknowledged that the issue of the DSB's role in referrals to arbitration was controversial among Members, the Arbitrator had ultimately based its ruling on the input of only 
three Members. The parties to the DS386 dispute were the only two Members provided with an 
opportunity to comment in detail, and they presen ted a single view. The Arbitrator also relied in 
some detail, but apparently incompletely and incorrectly, on views provided by the EU in its 
statement to the DSB. Canada had submitted what  the Arbitrator referred to as "unsolicited 
comments", which had been rejected outright on the basis that Canada had only limited intervention rights in the DS386 dispute that did not allow Canada to comment on this issue. But it WT/DSB/M/372 
 
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  was hard to reconcile the Arbitrator's outright rejection of Canada's so-called "unsolicited" written 
submission and the failure to even acknowledge the comments made by Canada and others in the 
same DSB meeting in which the EU had raised the issue, on the one hand, with the Arbitrator's extensive reliance on the EU statement in the DS B, on the other. The failure to, at a minimum, 
refer to the views of other Members on the issue was all the more troubling given that a number of 
Members in the DSB supported an interpretation that was different to both of those advanced by the parties to the DS386 dispute and the EU. The Ar bitrator did not even consider this alternative 
interpretation, highlighting again the concerns about the Arbitrator's ruling on a matter that was at 
its heart about the responsibilities of the DSB. The serious due process concerns and the resulting 
flaws and gaps in the analysis ultimately undermined the Arbitrator's analysis and conclusions on this issue. For that reason, Canada considered that the Arbitrator's Report did not settle the matter 
and encouraged Members to continue to discuss and arrive at a permanent resolution of this issue. 
In the meantime, to mitigate any legal uncertainty, Canada would invite Members to ensure that future referrals to arbitration take place at the DSB meeting. 
1.7.  While these concerns were significant systemically, Canada would like to reiterate its 
fundamental satisfaction that the final determinat ion of the Arbitrator confirmed unequivocally the 
serious magnitude of the losses suffered by Canada's cattle and hog industries. These were losses 
Canada's industry had been suffering since September 2008. As Canada already mentioned, the 
United States repealed the COOL statute, as it applied to beef and pork, on 18 December 2015, in 
the evening in fact. In a statement issued on the same day, the US Secretary of Agriculture had confirmed that the US Department of Agriculture would still need to amend the COOL regulations. 
This part of the repeal of the COOL measure re mained to be completed. Accordingly, Canada 
would need an opportunity to review both the statutory and regulatory aspects of the COOL 
measure’s repeal to determine whether it had been brought into full compliance with the WTO 
obligations of the United States. Pending completion  of that review of the recent steps taken by 
the United States, Canada was resubmitting its request that the DSB authorize Canada to suspend concessions and other obligations in the ma ximum amount of CDN$1,054,729,000 annually, 
consistent with the decision of the Arbitrator. According to Article 22.7 of the DSU, Canada was 
entitled to have this request granted on reverse consensus on 18 December 2015 and was still entitled to have this request granted at the present meeting, also on reverse consensus. Of course, in the light of steps taken over the weekend by the United States, Canada did not intend 
to impose retaliatory measures immediately, but would monitor the situation to ensure that the 
discrimination had been fully removed. Despite the many substantive and procedural disagreements and controversies that had arisen throughout the history of this dispute, Canada 
looked forward to working with the United States to arrive at a point where it could notify the DSB 
that this dispute had finally, after all these years, been fully resolved. 
1.8.  The Chairman drew attention to the communication from Mexico contained in document 
WT/DS386/39, and invited the representative of Mexico to speak. 1.9.  The representative of Mexico said that his country was in the process of examining the recent 
action taken by the United States to comply with  the recommendations and rulings of the DSB, in 
particular the approval by Congress of a measure re pealing country of origin labelling for beef and 
its enactment by the Chief Executive. The restoratio n of full market access to the United States for 
Mexican cattle would benefit producers and Mexico's economy. This result was the fruit of close cooperation between Mexico and Canada. Mexico regretted that the United States was unwilling to 
hold a meeting on 18 December 2015 on the ground s that the Ministerial Conference and the DSB 
could not take place at the same time. There were no rules that expressly prohibited the DSB from 
meeting during a session of the Ministerial Conf erence. Article IV:2 of the Marrakesh Agreement 
stated that the General Council "…shall also carry out the functions…". This meant that the General 
Council had specific functions in addition to acting as a Ministerial Conference which, in this case, would meet as the DSB. The General Council had adopted "The Guidelines on the Arrangements for Scheduling of Meetings of WTO Bodies" on 15 November 1995 (WT/L/106). The second 
paragraph of the Guidelines stated that Council meetings, including the General Council and the 
DSB, should not take place at the same time. No where did the Guidelines refer to the Ministerial 
Conference. Moreover, the English version used the verb "should", and there was a clear difference 
between the use of "shall" and "should". Indeed, Mexico considered this to be merely a guideline 
that did not establish any obligation but simply provided a recommendation. 
1.10.  The Guidelines themselves pointed out in Footnote 1 that "[u]pon agreement on the 
guidelines the Chairman said that the DSB … had particular requirements for meetings and that it WT/DSB/M/372 
 
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  should therefore be understood that while all effo rts would be made to schedule the meetings of 
these bodies in accordance with these guidelines  the necessary flexibility would be applied in 
instances where this would not be possible". This was a case in which flexibility could have been applied. Moreover, Article 21.1 of the DSU provided that: "[p]rompt compliance with 
recommendations or rulings of the DSB is essential in order to ensure effective resolution of 
disputes to the benefit of all Members". Postponi ng the meeting, even by one day, unnecessarily 
delayed the settlement of a dispute that had already been going on for more than seven years. In 
short, although everything possible was done so that the meeting of 18 December 2015 could start 
as soon as the Ministerial Conference was concluded, this did not happen. However, all the requirements to hold the meeting on 18 December 2015 were fulfilled: (i) the meeting was requested in time; (ii) the agenda was issued on time; and (iii) all of the documents were 
submitted in time, so that there was no reason for the United States to object to this meeting. 
WTO Members had a responsibility to keep the dispute settlement system in operation. The 
objection raised by the United States was a threat to that system. Mexico regretted that the 
United States had acted in this way. 
1.11.  At the present meeting, Mexico wished to  thank the Arbitrator, the Secretariat staff that 
assisted him and the translators for the Decision issued on 7 December 2015. This case had 
started with a request for consultations on 17 December 2008; i.e., seven years and one day ago. 
During that time, Mexico had been able to demonstrate successfully that the country of origin labelling (COOL) measure imposed by the United States, in its original version and as amended, was inconsistent with US obligations under the covered agreements. At the conclusion of the 
original procedure in mid-2012, the United States had a reasonable period of time to bring its 
measure into conformity. At the end of that reasonable period of time (2013), the United States had amended the measure. However, not only did it fail to comply, it actually exacerbated the 
consequences of its regulations by making the measure more trade restrictive. As this was a clear 
case of non-compliance by the United States, Mexico had no choice but to resort to the last remedy provided for under the DSU, namely, the suspension of concessions and other obligations. 
1.12.  Regarding the Decisions by the Arbitrator, Mexico wished to take this opportunity to 
comment on some of his reasons and conclusions, which would serve to guide future Arbitrators in proceedings in which the level of nullification or impairment was challenged. First, the Arbitrator had assumed the legal duty to seize himself of questions that were of a "fundamental nature", 
including the vesting of jurisdiction, so that the case had been referred to arbitration without a 
DSB meeting being required for that purpose. Th e Arbitrator had explained that the text of 
Article 22.6 of the DSU did not explicitly require referral to arbitration by the DSB. He further 
explained that the context found in other provisions of the DSU, in particular regarding other 
arbitration procedures, suspension and lapsing of pa nels, and initiation of appeals, suggested that 
it was not necessary for the DSB to have an active role in all dispute settlement procedures. 
Mexico agreed with the Arbitrator's interpretation  in this respect for the reasons summarized in the 
decision (WT/DS386/ARB, paragraph 2.9), which was clear as to what the interpretation should be. Nevertheless, it was surprising that in his decision the Arbitrator should have addressed this issue in the light of a communication from a Member  that did not have any third-party rights in the 
proceedings, a communication that was addressed to the DSB and not the Arbitrator and in which 
the Member itself pointed out that it did "not in tend … to intervene further in these particular 
proceedings" (WT/DS386/38). Second, although the DSU did not expressly establish third-party 
rights for this kind of arbitration, the Arbitrator had afforded Canada and Mexico the access and 
the right to participate in the proceedings, including the opportunity to comment on "issues of comparison" for purposes of each respective arbitration. Mexico considered that the Arbitrator had 
adopted the right approach, and in fact, Mexico be lieved that third-party rights should be granted 
in proceedings under Article 22.6 of the DSU. Third, the Arbitrator had rightly concluded that "in order to meet its prima facie  burden, an objecting party under Article 22.6 of the DSU must 
engage with the methodology used to arrive at th e proposed level of suspension and that it was 
not sufficient merely to assert that another me thodology was more appropriate. Mexico therefore 
found that, in merely proposing an alternative methodology, the United States had not validly 
established a prima facie  case against the levels of suspension proposed by Canada and Mexico". 
Fourth, Mexico regretted that the Arbitrator had decided that domestic price suppression losses for 
Mexican beef producers were not covered by Article 22.6 of the DSU. This price suppression on the Mexican domestic market was clearly the result of the COOL measure. Consequently, Mexico was 
doubly affected since not only did the measure limit access to the US market, but it also had an 
effect on the Mexican export market. Fifth, the Arbitrator had correctly refrained from using the equilibrium displacement model (EDM) presented by the United States in making his own WT/DSB/M/372 
 
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  determination, although this was the first time that an affected Member had presented its own 
methodology. Moreover, the Arbitrator essentially based his own determination on elements of the methodology put forward by Mexico and Canada. Although he had unfortunately failed to take certain important aspects into consideration, such as the elasticity proposed by Mexico or the use 
of weekly rather than monthly price data, elements  that would have helped the Arbitrator to make 
a pertinent assessment. 
1.13.  Finally, it was important to mention with respect to the Arbitrator's decision that this case 
had highlighted the need to improve the DSU as re gards effective compliance – an area in which 
the negotiations had not been completed and in which Mexico had submitted proposals – because what happened in cases like this one, where a Member maintained an offending measure for more than seven years without any consequences, was that while the industry concerned in the 
complaining party continued to suffer, it was in the respondent's interest to maintain those 
measures. This situation had been made worse by  the dispute settlement system's workload and 
the resulting delays. Mexico noted that in the Decision of 7 December 2015, the Arbitrator had 
concluded that Mexico "may request authorizat ion from the DSB to suspend concessions and 
related obligations in the goods sector under the GATT 1994 at a level not exceeding US$227.758 million annually". Therefore, in accord ance with document WT/DS386/39, Mexico was 
requesting DSB authorization to suspend concessions to the United States. 
1.14.  The representative of the United States sa id that the United States regretted that the DSB 
was meeting to consider these requests that were now obsolete. As the United States would 
explain, given that the COOL legislation had been repealed, in relevant part, the WTO-inconsistent 
measure had been fully withdrawn. Because the level of authorization in that circumstance was 
zero – the DSU permitted only an authorization equivalent to the current level of nullification or impairment – the reasonable and constructive approach for Canada and Mexico would have been 
to set aside these requests in light of the repe al. But before turning to the requests and the 
Arbitrators' decisions in substance, the United States would like to address another systemically flawed decision by the complaining parties – that is, the attempt by those parties to convene a 
meeting of the DSB on 18 December 2015 while th e Ministerial Conference was ongoing. The 
United States appreciated the appropriate reschedulin g of this DSB meeting in light of the conflict 
with the scheduling of the Ministerial Conference in  Nairobi. The United States was disappointed by 
the positions of Canada and Mexico seeking to have the DSB hold a meeting on 
18 December 2015. It was clear that as the Ministerial Conference was ongoing in Nairobi, the 
WTO rules and guidelines for the scheduling of meetings indicated that there should not be a meeting of the Dispute Settlement Body, which was the General Council, where a Ministerial 
Conference was ongoing. The US position was su pported by the WTO Agreement, the Guidelines 
for scheduling meetings adopted by the General Council, and past practice. The United States had not been able to identify any other instance of the DSB or the General Council convening during a 
Ministerial Conference. That practice was consistent with the powers given to the Ministerial 
Conference. The United States noted that, pursuant to Article IV:1 of the WTO Agreement, the "Ministerial Conference shall have the authority to take decisions on all matters under any of the Multilateral Trade Agreements". Pursuant to Article II:2 of the WTO Agreement, the DSU was one 
of those Multilateral Trade Agreements. Therefore, while "representatives of all the Members" were 
meeting in a Ministerial Conference pursuant to Article IV:1 of the WTO Agreement, it was for the Ministerial Conference, which had "the authority to take decisions on all matters" under the DSU, 
to take those decisions. And it is only "[i]n the intervals between meetings of the Ministerial 
Conference" that "its functions shall be conducte d by the General Council" (Article IV:2), which 
would include the General Council convening as th e DSB (Article IV:3). The United States also 
noted that the General Council had adopted "Guidelines on the Arrangements for Scheduling of 
Meetings of WTO Bodies" (WT/GC/W/16), which provided that "Only one Council meeting (i.e. the General Council, DSB, TPRB, and the Councils on Good s, Services and TRIPS) should be held at a 
time". Canada and Mexico were both well aware that they were asking the DSB to meet at a time 
that was not appropriate under the rules – well aware because the United States had so alerted 
them on multiple occasions. And the United States noted the Canadian delegate's recognition that the United States had brought this issue to their attention several weeks ago. What was 
unprecedented was not the rescheduling of th e DSB meeting to avoid a conflict with the 
Ministerial, what was truly unprecedented was an effort to hold such a meeting during the Ministerial. As noted, the United States was not aware of a single instance in this organization's 
20 years in which a meeting of the DSB or General Council was scheduled while Ministers were 
meeting. And even more concerning was the fact that Canada and Mexico were insisting on a meeting at a time where they knew the United States Congress was voting on withdrawing the WT/DSB/M/372 
 
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  measure at issue. They provided no explanatio n for why delegations should be diverted from 
efforts supporting the Ministerial Conference in order to attend a meeting at a time when it was improper for the DSB to meet and that woul d not promote the settlement of the dispute. 
1.15.  Turning to the substance, the United States would like to inform the DSB that the 
United States had in fact now withdrawn the meas ure at issue in this dispute and subject to the 
DSB recommendation. Specifically, the US Congress had passed legislation on 18 December 2015, the Omnibus Appropriations Act, that repealed co untry-of-origin labeling for beef and pork, the 
two products subject to this dispute. On th e same day, President Obama had signed that 
legislation, and it took effect upon signature. Therefore, the amended COOL measure for beef and 
pork, which was the subject of the DSB's findings that the United States had not brought its measure into compliance with the DSB's recommendation, has been terminated. Further, the US 
Department of Agriculture had publicly indicated that, pursuant to the repeal, it was no longer 
enforcing the amended COOL measure for beef an d pork. In this regard, the United States 
appreciated the public statements of Canada and Mexico over the weekend stating that they were 
pleased with the repeal of "COOL for beef and pork , effective immediately". Accordingly, in light of 
Article 22.8 of the DSU, there was no longer an y basis for the DSB to grant authorization to 
Canada or Mexico to suspend concessions. Indeed, Article 3.7 of the DSU explains that: "In the 
absence of a mutually agreed solution, the first objective of the dispute settlement mechanism is 
usually to secure the withdrawal of the measures concerned if these are found to be inconsistent with the provisions of any of the covered agreements". Consequently, any authorization to suspend concessions would be an obsolete action. Article 22.4 of the DSU states that "[t]he level 
of the suspension of concessions or other obligations authorized by the DSB shall be equivalent to 
the level of the nullification or impairment".  In this instance, the subject of the DSB 
recommendations and rulings had been repealed in full and compliance was thus complete. The 
nullification or impairment of benefits considered by the Arbitrators no longer existed. Therefore, 
the authorization requested was now inaccurate. As the DSU did not contemplate the authorization of punitive levels of suspension of concessions or obligations, Canada's and Mexico's requests for 
authorization to suspend concessions were also now obsolete. Nonetheless, as Canada and Mexico 
were proceeding with their requests at the presen t meeting, the United States understood that the 
action by the DSB would necessarily have to be consistent with Article 22.4 of the DSU. Therefore, in light of the repeal of the COOL measure, and the removal of the nullification or impairment, the 
authorization by the DSB today would essentially be a formality. In light of the facts and DSU 
provisions described, the level of authorized suspension would be zero. And in that regard, the United States regretted the decisions of Canada and Mexico to push ahead with these requests, 
which were unnecessary, and not a constructive or judicious use of WTO dispute settlement 
procedures. 
1.16.  With respect to the decisions of the Arbi trators that had been no tified to the DSB, the 
United States would like to thank the Arbitrators and the Secretariat assisting them for their work 
on these Article 22.6 arbitrations. The United States was obviously disappointed in the levels of nullification or impairment determined by the Ar bitrators. There were however some aspects of 
those decisions worth noting. Canada and Mexico had each made a novel argument that the level 
of nullification and impairment should include an element unrelated to the benefits under the trade 
agreements at issue – they argued for a substant ial increase in the level of nullification or 
impairment based on so-called domestic price suppression which did not involve market access for 
Canadian or Mexican livestock. The United States was pleased that the Arbitrators rejected these 
unfounded arguments by Canada and Mexico. Instead, the Arbitrators found that under the covered agreements at issue "the relevant benefit in this case is the market access" and therefore 
the Arbitrators did "not include domestic prices suppression losses claimed by Canada and Mexico 
in the level of nullification or impairment of benefits" (paragraph 5.27). The United States was disappointed that throughout their analysis the Arbitrators relied on inconsistent and unofficial data sources, rather than officially compiled and co rrected US trade statistics. The use of data that 
was not designed to be official, reviewed data for the purposes for which it was being used, 
particularly where such data diverges significantl y from US official import data and Canadian or 
Mexican export data raises significant concerns. In particular, this selection introduced 
unnecessary inconsistencies into the trade effects analysis. 
1.17.  Finally, these arbitrations raised some important procedural issues that the United States 
understood were of interest to Members more generally. The Arbitrator in the dispute involving 
Mexico analyzed a question with respect to whet her DSB action was required to refer a matter to 
arbitration under Article 22.6 of the DSU. That is sue was not presented directly to the Arbitrator, WT/DSB/M/372 
 
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  but the Arbitrator nonetheless considered it important to investigate the issue. The Arbitrator had 
properly concluded that the text of the DSU, when  read in context, did not require DSB action in 
order to refer a matter to arbitration. In addition, the Arbitrators dealt with the requests of Canada and Mexico to be third parties in each other's proceedings. The Arbitrator had correctly 
distinguished between third-party rights provided  for panels under the DSU and the lack of any 
such rights for Article 22.6 arbitrations under the DSU. The Arbitrators instead, with the agreement of the parties, organized their procedures in an efficient way, given the overlap in 
parties, issues, and the members of the Arbitrators. The Arbitrators afforded to Canada and Mexico 
the ability to fully participate in each other's proceeding to the extent necessary to avoid their 
rights being adversely affected, while noting that neither Canada nor Mexico were receiving rights 
to as great a degree as are afforded to thir d parties in panel proceedings. Finally, the 
United States thanked the Chairman and the delegations present for their attention to these 
important systemic issues and important developments bringing an end to this long-standing dispute. 
1.18.  The representative of Canada said that hi s delegation wished to comment on the statement 
made by the United States. With respect to th e point that the developments over the weekend 
related to the COOL measure somehow affected Canada and Mexico's ability to receive 
authorization at the present meeting from the DSB, Canada would simply refer again to its original 
statement. Canada continued to evaluate the effo rts by the United States to bring itself into 
compliance in this dispute. Since the United Stat es only took action over the weekend and more 
steps needed to be completed, Canada could not yet agree that this dispute had been completely 
resolved. Regarding the references by the United States to statements in the press by Canadian 
representatives about the repeal of the COOL meas ure, Canadian public officials have expressed 
its government's positive reaction to the steps taken so far by the United States to repeal COOL. 
At no time, however, had any representative of Canada stated that Canada was fully satisfied that 
the measure had been withdrawn such that the discrimination had been fully removed in the US market. The statute had been modified only on 18 December 2015 in the evening, and it would 
take some time to evaluate the effects of those modifications. Just as the United States had 
quoted from statements of a Canadian Minister, Canada would point to the statement by the US 
Agriculture Secretary, Tom Vilsack, released on 18 December 2015 in the evening, in which Secretary Vilsack indicated that the "USDA will be  amending the COOL regulations as expeditiously 
as possible to reflect the repeal of the beef and pork  provisions". It is clear therefore that there are 
still a few steps involved. And finally, regarding the amount that the DSB was being asked to authorize, in fact the United States cited Articl e 22.4 of the DSU to suggest that the authorized 
level of suspension of concessions should be zero $, based on the claim by the United States that 
with the withdrawal of the COOL measure the level of nullification was now equivalent to zero. But in fact Canada was making this request under Article 22.7, which provides that the DSB "shall 
upon request, grant authorization to suspend concessions or other obligations where the request is 
consistent with the decision of the Arbitrator unless the DSB decides by consensus to reject the request." Since all of the conditions for Article 22.7 had been met, the DSB was required to grant authorization to suspend concessions up to the level that was determined by the Arbitrator, so that 
was the amount that Canada now expected the DSB to authorize. 
1.19.  The representative of Mexico said that his country wished to thank the United States for the 
information it presented orally at the present meeting on the compliance measures taken by its 
Government on 18 December 2015. As his country had mentioned in the first statement, Mexico 
was currently examining these measures. However, the DSB had not received this information in writing 10 days in advance as required by the Rules of Procedure for DSB meetings. Consequently 
the US actions could not be evaluated. Nor was the present meeting the right place to analyse 
US compliance with the measures adopted on 18 December 2015. The parties to the dispute had not found a mutually agreed solution, so the dispute continued. Consequently, the DSB's authorization should be granted as provided for in the Agenda issued in accordance with the Rules 
of Procedure for DSB meetings. In fact, this meeting was supposed to take place on 18 December. 
However, the meeting had been blocked in an illegal and unprecedented manner by the United States, which once again at the present meeting was trying to prevent the requested 
authorization. Article 22.7 of the DSU provided that  "[t]he DSB shall be informed promptly of the 
decision of the arbitrator and shall upon reques t, grant authorization to suspend concessions or 
other obligations where the request is consistent with the decision of the arbitrator, unless the 
DSB decides by consensus to reject the request." In  this case, the provisions of the DSU had been 
complied with and the DSB should authorize the suspension of concessions. WT/DSB/M/372 
 
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  1.20.  The representative of the European Union said that, like others, the EU was very concerned 
about last week's events, which cast doubt on th e predictability of procedures on which Members 
had to rely. The EU recalled that Article 22.7 of the DSU provided that: "the DSB shall be informed promptly of the decision of the arbitrator and shall upon request, grant authorization to suspend 
concessions or other obligations where the request is consistent with the decision of the arbitrator, 
unless the DSB decides by consensus to reject the re quest". The EU also recalled the provisions of 
the DSU which provided that, if a DSB meeting was not already scheduled during the relevant 
period, such a meeting of the DSB shall be held for the relevant purpose: Footnote 5 (panel 
requests); Footnote 7 (adoption of panel reports); Footnote 8 (adoption of Appellate Body Reports); and Footnote 11 (with respect to compliance intentions). The EU considered that the same principle applied in the case at hand. The EU  therefore considered that the complainants in 
this case had the right to request and obtain authorization to suspend concessions or other 
obligations at the DSB meeting convened on 18 December 2015, by negative consensus, and that suspension or postponement of the meeting until 21 December 2015 had no impact on the 
respective legal positions of the parties. 
1.21.  At this point, the EU wished to comment on the US statement. The EU noted that 
Article 22.8 of the DSU provided that the suspensi on of concessions or other obligations shall be 
temporary and shall only be applied until such time as the measure found to be inconsistent with a 
covered agreement had been removed, or the Member that must implement recommendations or rulings provided a solution to the nullification or impairment of benefits, or a mutually satisfactory solution was reached. If the conditions of this provision were fulfilled, the EU would expect a 
complainant not only to stop any retaliation that had already been started, but also to refrain from 
commencing such retaliation in the first place, even if a DSB authorization had already been given. The EU noted that Canada and Mexico intended to proceed in this way. Whether or not the 
conditions of this provision were fulfilled should be determined by following the guidance provided 
by the Appellate Body in the "Continued Suspension" dispute. In this respect, the EU would expect 
all parties to act in good faith with a view to reaching agreement. If agreement was impossible, 
one would expect both parties to submit the matter to a second compliance panel and co-operate 
in order to obtain a rapid adjudication. 
1.22.  With regard to the Arbitration award, the EU would like to comment on one procedural 
matter. The EU would like to refer to paragraphs 2.1 to 2.18 of the Arbitration Panel Report, which 
addressed the procedural question raised by the EU, namely whether referrals to arbitration under 
Article 22.6 were done by the DSB or by the part y objecting to the request for authorization to 
suspend concessions made pursuant to Article 22. 2 of the DSU. The EU had sent a communication 
regarding this matter to the Chair of the DSB, which had been circulated to Members on 
11 December 2015 in documents WT/DS384/39 and WT/DS386/40. The EU welcomed the fact that the Arbitration Panel expressly decided to follow th e guidance previously provided by the Appellate 
Body to the effect that, as a matter of due process and the proper exercise of its judicial function, 
and in order to ensure that issues of a fundamen tal nature were addressed and disposed of, it was 
appropriate for the Arbitration Panel to deal with the issue raised by the European Union. However, the EU considered that the Arbitration Panel should have provided the EU, and any other Members 
wishing to participate, with an opportunity to ma ke their views known to the Arbitration Panel. The 
EU considered that this was particularly appropriat e in this case given that both parties disagreed 
with the EU and rather agreed with each other. The Arbitration Panel had thus decided without 
hearing all interested parties, which the EU believed substantially diminished the weight of its 
decision. The EU would particularly note that the summary of the EU position was very substantially incomplete insofar as it failed to address the two most salient points. First, there was 
no discussion of the relationship between the fi rst sentence of Article 22.6 of the DSU and the 
second sentence of Article 22.6 of the DSU, whic h started with the word "however". Second, the 
Arbitration Panel relied throughout its analysis on a supposed distinction between "arbitrations" and "panels" but failed to address the express term s of Article 22.6 of the DSU, which stipulated 
clearly that the arbitration was to be conducted "by the original panel". In referring to this part of 
the provision, the Arbitration Panel altered the terms actually used by the treaty, replacing them with the phrase "by the original panelists". Thus , while professing adherence to the "text" of 
Article 22.6 of the DSU the Arbitration Panel's interpretation was, in fact, not faithful to that text, 
and in departing from it, provided no explanation. Furthermore, in other respects, it was not consistent with the customary rules of interpretation of public international law, as codified, at 
least in part, in Articles 31 to 33 of the Vienna Convention. WT/DSB/M/372 
 
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  1.23.  The EU had already explained that it disagreed with the substantive analysis of the 
Arbitration Panel on this point for the reasons set out in its communication. The EU noted that it had not had the benefit of appellate review. The EU further took note of the fact that the Arbitration Panel based its conclusion, in this particular case, on the absence of any disagreement 
between the parties. At the same time it recognized that this "is a contentious issue among 
Members"; that Article 22.6 "did not provide clear guidance"; and that "a resolution of this issue by Members would be desirable". Pending such reso lution, either by Members or by the Appellate 
Body, and given the substantial legal uncertainty thus persisting, for its part the EU intended to 
continue the practice used in the past in almost all cases. In particular, as a complainant, 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 from the defendant. Rather, the EU preferred the legal 
certainty that resulted from the referral to arbitration taking place in the DSB meeting, and the EU 
invited other Members to consider continuing with the same approach. 
1.24.  The representative of Australia said that his delegation noted the fax from the Secretariat 
dated 18 December 2015 suggesting that this m eeting had been "rescheduled" from that date. 
Australia did not accept that characterisation of events. As far as Australia was concerned, the present meeting was a continuation of the DSB meeting, which had started as scheduled on 
18 December 2015. In Australia's view, that meet ing had been suspended in recognition of the 
fact that the position of Chair was vacant and could not be filled on that day because one Member would not approve the appointment of an interim Chair. In Australia's view, to consider that the present meeting was rescheduled would imply th at one Member could prevent the commencement 
of a meeting that had been duly convened but th at was not a right available to any Member. Thus 
Australia requested that its view be recorded in the minutes of this meeting. 
1.25.  For the record, Australia would also like to set out its views on the position taken by the 
United States on the rules applying to convening of meetings. Australia did not accept that there 
was anything in the Marrakesh Agreement that prevented the DSB from meeting while the Ministerial Conference was in session. It was clear from the wording of Article IV that the General 
Council could exercise the functions of the Mi nisterial Conference in the intervals between 
meetings of the Ministerial Conference, but th ere is nothing in the Marrakesh Agreement to 
suggest that that authority in any way detracted from the General Council's authority to carry out 
its other functions, even when the Ministerial Co nference was meeting. Nor did Australia see any 
problem in practice with a meeting of the DSB be ing convened during a Ministerial Conference. The 
decision that was before the DSB for this meet ing was one that could be made by the General 
Council sitting as the DSB, and in practice one that was always made by the General Council. 
Australia was not aware of any instance where the Ministerial Conference had taken a decision of 
the type before the DSB at the present meeting. Moreover, it was clear that there was no problem 
in terms of personnel. Most of the delegates at  the present meeting had also been present on 
18 December 2015, including the representatives of the parties to the dispute. As was clear from 
the DSU, the DSB was required to meet as often as necessary to conduct its functions within the 
time-frames provided for in the DSU that included meeting to grant authorization to suspend concessions or other obligations, in line with the last sentence of Article 22.7 of the DSU. 
1.26.  Australia did not believe that "The Guid elines on the Arrangements for Scheduling of 
Meetings of WTO Bodies" (1995) cited by the United States had any bearing on the legal status of a meeting of the DSB convened while a Minister ial Conference was in session. As their name 
suggested, those Guidelines were an administrative tool, designed to promote a shared 
understanding among Members and the Secretariat about how meetings were to be arranged. They were clearly not binding in any respect, and could not in Australia's view supersede the rights 
and obligations provided in any of the covered agreements. In any event, Australia did not accept 
that the US reading of the Guidelines properly reflected how they might apply in the situation 
Members faced on 18 December 2015. The United States focused selectively on paragraph 2, which provided that only one Council meeting should be held at a time. The US view ignored 
paragraph 7, which provided that multilateral meetings should only be cancelled or postponed for 
reasons of overriding importance. Australia was aw are of no suggestion that the meeting had been 
improperly convened. 
1.27.  In Australia's view, to postpone the meeting on 18 December 2015 consistently with the 
Guidelines would have required one or more "reasons of overriding importance", but there was nothing to suggest that paragraph 2 overrides paragraph 7 so there was no reason of overriding 
importance. Even if the Guidelines were relevant, they provided no justification for the WT/DSB/M/372 
 
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  postponement of the meeting scheduled for 18 December 2015. Against this background, Australia 
remained of the view that the present meeting wa s a resumption of the meeting that had properly 
started on 18 December 2015, in accordance with the Airgram dated 8 December 2015. Australia considered that the actions of the United States on 18 December 2015 were all the more 
regrettable in light of the fact that the United St ates was at the present meeting seeking to benefit 
from the delay of the completion of the meeting. There were obviously very serious implications if 
Members attempt to delay meetings of the DSB in order to avoid the assertion against them of 
rights conferred under the DSU. Australia would hope that the United States would reflect on the 
ramifications of its position for the effectiveness of the system if that position were to be accepted. 
1.28.  On the question of compliance, Australi a considered that the DSB should authorize the 
suspension of concessions or other obligations in accordance with the views of the Arbitrator. This 
view took into account the circumstances of this particular case, including the actions by the 
United States on 18 December 2015, as well as th e statements by at least one of the complainants 
about its intention not to retaliate should one or more of the parties make subsequent claims 
regarding compliance, this would appropriately be dealt with through an Article 21.5 proceeding. 
1.29.  The representative of Japan said that, first of all, Japan wished to express its deep concern 
with the fact that in any case the procedures related to the very critical stage of the dispute 
settlement system was prevented since what happened on 18 December 2015 undermined the 
effective function and credibility of the disput e settlement system. Despite the fact that this 
dispute had entered into the critical stage which was suspending concessions and other obligations and that Japan as a non-party of this dispute could not understand all facts and sensitivities 
related to this dispute, Japan wished to point out that it was not normal that the non-parties to 
these disputes had to wait more than two hours in room W on 18 December 2015. Japan would also like to point out that parties had to make best efforts to avoid such situations in advance 
under the leadership of the DSB Chair. Generally speaking, Member should respect these 
guidelines which had been decided by consensu s. The DSB had many guidelines, Japan had to 
point out that if these guidelines were not respected, it would create serious problems. The 
differences among parties on procedural matters should not undermine the rights of Members 
provided in the DSU. Members should make best efforts to avoid any precedents which could have negative impact on the system. 
1.30.  The representative of Korea said that his delegation wished to add its voice to what was 
stated by many other delegations. Korea did not be lieve that the kind of procedural issues raised 
by the United States was reflective of an appropriate manner for moving forward in any dispute. If anything, it bought the United States one additional working day to face what was inevitable. That 
extra day came at the expense of denying – however briefly – Canada and Mexico's legitimate 
right to request authorization from the DSB to suspend concessions. Korea did not agree with the US interpretation that Article IV:2 of the Ma rrakesh Agreement prevented the General Council 
from holding a meeting during the Ministerial Conference. That Article only noted that the General 
Council carried out the functions of the Ministerial Conference in the intervals between the Ministerial meetings. No more, no less. "The Guid elines on the Arrangements for Scheduling of 
Meetings of WTO Bodies" were only guidelines – and the language therein, again, did not support 
the US position. This was a regrettable incident that Korea hoped would prove to be a single and 
isolated event in dispute settlement. 
1.31.  The representative of the United States sa id that his delegation took note of the EU's 
concern that the matter had not been referred to arbitration through a correct procedure. The 
United States said it would like to make a few comments on that issue. First, the United States welcomed the opportunity to discuss the issue furt her with the EU and other interested Members. 
The United States thought that the DSU text was clear and the Arbitrator's reasoning was 
compelling. The only reason that the United States could see for arguing against the clear DSU text would be to support a position that, if the DSB acted to refer the matter to the arbitrator, which consisted of the original panel, if members ar e available, then the decision of that arbitrator 
should be subject to appeal. This view was hinted at in the EU's comments at the present meeting. 
But an attempt to appeal an arbitrator's decision would also be contrary to the plain text of DSU 
Articles 17.4, 17.6, and 22.7. Amendments to the DSU should not be attempted through contorted 
legal arguments but through agreement by Members. Second, the EU appeared to have stated 
that, despite its concern that the matter was not referred to arbitration through the correct procedure, it had no concern with the DSB's taking a decision at the present meeting to authorize 
Mexico's request in conformity with the Arbitrator’s decision. The United States considered that WT/DSB/M/372 
 
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  this would be a pragmatic and correct position for a Member that was not a party where the 
parties to the dispute accepted the decision as validly rendered. Third, the EU's position that it had no concern with the DSB's taking this decision would imply that, in another dispute, the EU might take a different position. Thus, the EU appeared to be asserting that, due to the alleged deviation 
from the correct procedure in the DSU, the DSB would not be deciding by negative consensus 
under DSU Article 22.7, but rather would be taking  a decision through the positive consensus rule 
governing DSB decisions generally under Article 2.4 of the DSU. The implications of this position 
should be considered further as its logic would apply to other negative consensus decisions in the 
event that the procedural rules laid out in the DSU were not strictly followed. 
1.32.  The DSB took note of the statements and pursuant to the request by Canada under 
Article 22.7 of the DSU contained in document WT/DS384/38 agreed to grant authorization to 
suspend the application to the United States of tariff concessions or other obligations consistent 
with the Arbitrator's decision contained in document WT/DS384/ARB. Furthermore, pursuant to the request by Mexico under Article 22.7 of the DSU contained in document WT/DS386/39, the DSB 
agreed to grant authorization to suspend the application to the United States of tariff concessions 
or other obligations consistent with the Arbitrator's decision contained in document 
WT/DS386/ARB. 
__________