. /.  WORLD TRADE  
ORGANIZATION   
WT/DS353/20 
5 November 2012 
 (12-6064) 
  
  
 
UNITED STATES – MEASURES AFFECTING TRADE  
IN LARGE CIVIL AIRCRAFT  
(SECOND COMPLAINT) 
 
Recourse to Article 22.6 of the DSU by the United States 
 
Constitution of the Arbitrator 
 
Note by the Secretariat 
  
1. At the meeting of the Dispute Settlement Body (DSB) on 23 October 2012, the 
European Union stated that the United States had not brought measures found to result in adverse 
effects into compliance with their obligations under the Agreement on Subsidies and Countervailing 
Measures (SCM Agreement) and that it had requ ested authorization to take countermeasures.
1   
2. The United States objected to the level of su spension of concessions or other obligations 
contained in the European Union's request and clai med that the principles and procedures set forth in 
Article 22.3 of the DSU had not been followed.   The United States also stated that the 
European Union was not entitled to request aut horization under Article 4 of the SCM Agreement 
because the DSB's recommendations and rulings do not  include any recommendation with respect to 
Article 4.  The United States requested the matter be  referred to arbitration under Article 22.6 of the 
DSU.  The DSB agreed that the ma tter raised by the United States2 is referred to arbitration as 
required by Article 22.6 of the DSU. 
3. Article 22.6 of the DSU provides as follows: 
"When the situation described in paragraph 2 occurs, 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 unl ess the DSB decides by consensus to reject 
the request.  However, if the Member con cerned objects to the level of suspension 
proposed, or claims that the principles and procedures set forth in paragraph 3 have 
not been followed where a complaining part y has requested authorization to suspend 
concessions or other obligations pursuant to pa ragraph 3(b) or (c), the matter shall be 
referred to arbitration. Such arbitration sha ll be carried out by the original panel, if 
members are available, or by an arbitrator15 appointed by the Director-General and 
shall be completed within 60 days after the date of expiry of the reasonable period of 
time.  Concessions or other obligations sh all not be suspended during the course of 
the arbitration." 
(original footnote) 15  The expression "arbitrator" shall be interpreted as referring either to an 
individual or a group. 
                                                      
1 See WT/DS353/17. 
2 See WT/DS353/19. WT/DS353/20 
Page 2  
 
  4. Article 4.10 of the SCM Agreement provides as follows: 
"In the event the recommendation of the DSB is not followed within the time-period 
specified by the panel, which shall comme nce from the date of adoption of the 
panel’s report or the Appellate Body's report,  the DSB shall grant authorization to the 
complaining Member to take appropriate
9 countermeasures, unless the DSB decides 
by consensus to reject the request." 
(original footnote) 9  This expression is not meant to allow countermeasures that are 
disproportionate in light of the fact that the subsidies dealt with under these provisions are 
prohibited.  
5. Article 4.11 of the SCM Agreement provides as follows: 
In the event a party to the dispute request s arbitration under paragraph 6 of Article 22 
of the Dispute Settlement Understanding (" DSU"), the arbitrator shall determine 
whether the countermeasures are appropriate.10 
(original footnote) 10 This expression is not meant to allow countermeasures that are 
disproportionate in light of the fact that the subsidies dealt with under these provisions are 
prohibited.  
6. Article 7.9 of the SCM Agreement provides as follows: 
"In the event the Member has not taken a ppropriate steps to remove the adverse 
effects of the subsidy or withdraw the subs idy within six months from the date when 
the DSB adopts the panel report or the Appellate Body report, and in the absence of agreement on compensation, the DSB shall grant authorization to the complaining 
Member to take countermeasures, commensur ate with the degree and nature of the 
adverse effects determined to exist, unless th e DSB decides by consensus to reject the 
request." 
7. Article 7.10 of the SCM Agreement provides as follows: 
"In the event that a party to the dispute requests arbitration under paragraph 6 of 
Article 22 of the DSU, the arbitrator sha ll determine whether the countermeasures are 
commensurate with the degree and nature of the adverse effects determined to exist." 
8. The Arbitration will be carried out by the original panel, namely: 
 Chairperson: Mr Crawford Falconer 
  Members: Mr Francisco Orrego Vicuña 
   Mr Virachai Plasai 
  
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