WT/DS492/R  
 
28 March 2017  
(17-1663) Page: 1/173 
  Original: English  
 
 
  EUROPEAN UNION – MEASURES AFFECTING T ARIFF CONCESSIONS ON  
CERTAIN POULTRY MEAT  PRODUC TS 
REPORT  OF THE PANEL  
 
 WT/DS492/R  
 
- 2 - 
 
  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  15 
1.1   Complaint by China  ................................ ................................ ................................ ... 15 
1.2   Panel establishment and composition  ................................ ................................ ..........  15 
1.3   Panel proceedings  ................................ ................................ ................................ ..... 15 
1.3.1   General  ................................ ................................ ................................ ................  15 
1.3.2   Requests for enhanced third -party rights  ................................ ................................ ... 16 
1.3.3   Requests for preliminary rulings  ................................ ................................ ...............  16 
2   FACTUAL ASPECTS  ................................ ................................ ................................ ..... 16 
3   PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  ................................  19 
4   ARGUMENTS OF THE PAR TIES  ................................ ................................ ...................  22 
5   ARGUMENTS OF THE THI RD PARTIES  ................................ ................................ ........  22 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 22 
6.1   Factual aspects and General overview of China's claims and horizontal arguments  .............  22 
6.2   The tariff ra te quotas and the SPS measures  ................................ ................................  23 
6.3   Terms of reference issues  ................................ ................................ ..........................  23 
6.4   Claims under Article XXVIII:1 of the GATT 1994  ................................ ............................  25 
6.5   Claims under Article XXVIII:2 read in conjunction with paragraph 6 of the 
Understanding on Article XXVIII of the GATT 1994  ................................ ................................  28 
6.6   Claims under Article XIII:2(d) of the GATT 1994  ................................ ...........................  29 
6.7   Claims under the chapeau of Article XIII:2 of the GATT 1994  ................................ ..........  30 
6.8   Claims under Article XIII:1 of the GATT 1994  ................................ ...............................  31 
6.9   Claims under Article I:1 of the GATT 1994 ................................ ................................ .... 32 
6.10   Claims under Arti cle XIII:4 of the GATT 1994  ................................ ..............................  32 
6.11   Claims under Article II:1 of the GATT 1994  ................................ ................................ . 33 
7   FINDINGS  ................................ ................................ ................................ .................  34 
7.1   General  ................................ ................................ ................................ ...................  34 
7.1.1   General overview of China's claims and horizontal arguments ................................ ....... 34 
7.1.2   Order of analysis  ................................ ................................ ................................ ... 36 
7.1.3   Function of the Panel  ................................ ................................ ..............................  36 
7.1.4   Interpretation of the GATT 1994  ................................ ................................ ..............  37 
7.1.5   Burden of proof  ................................ ................................ ................................ ..... 39 
7.1.6   Request for enhanced third -party rights  ................................ ................................ .... 40 
7.2   The tar iff rate quotas and the SPS measures  ................................ ................................  44 
7.2.1   The First Modification Package  ................................ ................................ .................  44 
7.2.2   The Second Modification Package  ................................ ................................ .............  47 
7.2.3   The SPS measures applicable to poultry products from China  ................................ ....... 53 
7.2.4   Import statistics  ................................ ................................ ................................ .... 56 
7.3   Terms of reference issues  ................................ ................................ ..........................  61 WT/DS492/R  
 
- 3 - 
 
  7.3.1   Introduction  ................................ ................................ ................................ ..........  61 
7.3.2   The scope of China's claims u nder Article XIII of the GATT 1994  ................................ ... 62 
7.3.2.1    China's contention that the European Union violated the chapeau of 
Article  XIII:2 because it did not set the shares of the TRQs allocated to the  "all others" 
category at sufficient levels  ................................ ................................ ...............................  62 
7.3.2.2    China's contention that the European Union violated the chapeau of 
Article  XIII:2 and Article XIII:4 because it failed to disclose the trade data it used to 
determine the TRQs  ................................ ................................ ................................ .........  64 
7.3.2.3    China's contention that the European Union violated Article XIII:1 and the 
chapeau of Article XIII:2 by failing to annually review and rea llocate the TRQ shares  .................  67 
7.3.3   The scope of China's claims relating to certification  ................................ .....................  70 
7.3.3.1    China's contentions that th e European Union did not respect paragraph 7 of the 
Procedures for Negotiations under Article XXVIII and paragraph 1 of the Procedures for 
Modification and Rectification of Schedules  ................................ ................................ ..........  70 
7.3.3. 2   China's contention of a possible violation of Article II:1 in the period 2007 -2009 
arising from the European Union applying new rates prior to notifying all Members of the 
completion of the negotiations  ................................ ................................ ...........................  75 
7.4   Claims under Article XXVIII:1 of the GATT 1994  ................................ ............................  76 
7.4.1   Introduction  ................................ ................................ ................................ ..........  76 
7.4.2   Relevant provisions  ................................ ................................ ................................  76 
7.4.3   Analysis by the Panel  ................................ ................................ .............................  81 
7.4.3.1    Whether the SPS measures at issue constitute "discriminatory quantitative 
restrictio ns" ................................ ................................ ................................ ....................  81 
7.4.3.1.1    Main arguments of the parties  ................................ ................................ ............  81 
7.4.3.1.2    Findings of the Panel  ................................ ................................ .........................  83 
7.4.3.2    Whether the European Union was obliged to re -determine which Members held a 
supplying interest to reflect changes in import shares that took place following the 
initiation of the negotiations  ................................ ................................ ..............................  87 
7.4.3.3    Whether the European Union's decision not to recognize China as a Member 
holding a supplying interest was justified by the timing of China's claim  ................................ ... 94 
7.4.4   Conclusion  ................................ ................................ ................................ ............  95 
7.5   Claims under Article XXVIII:2 read in conjunction with paragraph 6 of the 
Understanding on Article XXVIII of the GATT 1994  ................................ ................................  95 
7.5.1   Introduction  ................................ ................................ ................................ ..........  95 
7.5.2   Relevant legal provisions  ................................ ................................ ........................  96 
7.5.3   Analysis by the Panel  ................................ ................................ .............................  98 
7.5.3.1    Whether different reference periods can be used for the determinations under 
Article XXVIII:1 and Article XXVIII:2 read in conjunction with paragraph 6 of the 
Understanding  ................................ ................................ ................................ .................  98 
7.5.3.2    Whether the total amount of the TRQs is consistent with paragraph 6 of the 
Understanding  ................................ ................................ ................................ .................  99 
7.5.3.2.1    Whether the European U nion was obliged to calculate the total amount of the 
TRQs on the basis of an estimate of what import levels would have been in the absence 
of the SPS measures  ................................ ................................ ................................ ...... 100 
7.5.3.2.2    Whether the Euro pean Union was obliged to calculate the total amount of the 
TRQs on the basis of import levels over the three years preceding the conclusion of the 
Article XXVIII negotiations  ................................ ................................ ..............................  102 WT/DS492/R  
 
- 4 - 
 
  7.5.3.2.3    Whether the European Union was required to account for poultry imports into 
Romania, Bulgaria and Croatia in the years before they acceded to the European Union  ...........  104 
7.5.3.3    Whether the alloc ation of the TRQs is inconsistent with Article XXVIII:2 read in 
conjunction with paragraph 6 of the Understanding  ................................ .............................  106 
7.5.4   Conclusion  ................................ ................................ ................................ ..........  109 
7.6   Claims under Article XIII:2(d) of the GATT 1994  ................................ .........................  109 
7.6.1   Introduction  ................................ ................................ ................................ ........  109 
7.6.2   Relevant provisions  ................................ ................................ ..............................  110 
7.6.3   Analysis by the Panel  ................................ ................................ ...........................  112 
7.6.3.1    Separate analysis of China's claims under Article XIII:2(d) and the chapeau of 
Article XIII:2  ................................ ................................ ................................ .................  112 
7.6.3.2    Relevance of "special factors" to the determination of which Members hold a 
"substantial interest" within the meaning of Article XIII:2(d)  ................................ ................  113 
7.6.3.3    Whether different reference periods can be used for the determinations under 
Article XXVIII:1, Article XXVIII:2, and Article XIII:2(d)  ................................ .......................  114 
7.6.3.4   Whether the European Union was obliged to determine which Members were 
substantial suppliers based on an estimate of what their import shares would have been 
in the absence of the SPS measures  ................................ ................................ .................  115 
7.6.3.5    Whether the European Union was obliged to determine which Members were 
substantial suppliers taking into account changes in import shares following the initiation 
of the negotiations on TRQ allocation  ................................ ................................ ................  118 
7.7   Claims under the chapeau of Article XIII:2 of the GATT 1994  ................................ ........  127 
7.7.1   Introduction  ................................ ................................ ................................ ........  127 
7.7.2   Relevant provisions  ................................ ................................ ..............................  128 
7.7.3   Analysis by the Panel  ................................ ................................ ...........................  129 
7.7.3.1    Separate analysis of China's claims under Article X III:2(d) and the chapeau of 
Article XIII:2  ................................ ................................ ................................ .................  129 
7.7.3.2    Relevance of "special factors" in the determination of whether the allocation of 
TRQ shares to "all others" complies with the general r ule in the chapeau of Article XIII:2  .........  130 
7.7.3.3    Whether the European Union was obliged to allocate a greater TRQ share to "all 
others" based on an estimate of what their import shares would  have been in the 
absence of the SPS measures  ................................ ................................ ..........................  131 
7.7.3.4    Whether the European Union was obliged to allocate a greater TRQ share to "all 
others" taking into account changes in import shares following the initiation of the 
negotiations on TRQ share allocations  ................................ ................................ ...............  132 
7.7.3.5    Whether the European Union was under an obligation to allocate an "all others" 
share of at least 10% for eac h of the TRQs under the First and Second Modification 
Packages  ................................ ................................ ................................ ......................  134 
7.8   Claims under Article XIII:1 of the GATT 1994  ................................ .............................  137 
7.8.1   Introduction  ................................ ................................ ................................ ........  137 
7.8.2   Relevant legal provisions  ................................ ................................ ......................  138 
7.8.3   Analysis by the Panel  ................................ ................................ ...........................  138 
7.8.4   Conclusion  ................................ ................................ ................................ ..........  141 
7.9   Claims under Article I:1 of the GATT 1994 ................................ ................................ .. 141 
7.9.1   Introduction  ................................ ................................ ................................ ........  141 
7.9.2   Relevant legal provisions  ................................ ................................ ......................  142 WT/DS492/R  
 
- 5 - 
 
  7.9.3   Analysis by the Panel  ................................ ................................ ...........................  142 
7.9.4   Conclusion  ................................ ................................ ................................ ..........  144 
7.10   Claims under Article XIII:4 of the GATT 1994  ................................ ............................  145 
7.10.1    Introduction  ................................ ................................ ................................ ...... 145 
7.10.2    Relevant legal provisions  ................................ ................................ .....................  145 
7.10.3    Analysis by the Panel  ................................ ................................ ..........................  146 
7.10.3 .1   Whether Article XIII:4 applies in cases where TRQ shares are allocated among 
supplying countries by agreement with substantial suppliers pursuant to Article  XIII:2(d) 
first sentence  ................................ ................................ ................................ ................  146 
7.10.3.2    Whether China had a substantial interest in supplying the products concerned 
at the time of its request under Article XIII:4  ................................ ................................ ..... 148 
7.10.3.3    Whether Article XIII:4 imposes an obligati on to reallocate TRQ shares upon 
request from a Member with a substantial interest in supplying the product  ...........................  150 
7.10.3.4    Whether the European Union refused to consider the need for an adjust ment of 
the TRQ shares or the reference period or reappraisal of special factors  ................................ . 153 
7.10.4    Conclusion  ................................ ................................ ................................ ........  156 
7.11   Claims under  Article II:1 of the GATT 1994  ................................ ...............................  156 
7.11.1    Introduction  ................................ ................................ ................................ ...... 156 
7.11.2    Factual background  ................................ ................................ ............................  157 
7.11.3    Paragraph 1 of the Procedures for Modification and Rectification of Schedules and 
paragraph 7 of the Procedures for Negotiations under Article XXVIII  ................................ ...... 158 
7.11.4    Analysis by the Panel  ................................ ................................ ..........................  159 
7.11.5    Conclusion  ................................ ................................ ................................ ........  171 
8   CONCLUSIONS AND RECO MMENDATION  ................................ ................................ . 171  WT/DS492/R  
 
- 6 - 
 
  LIST OF ANNEXES  
ANNEX A  
WORKING PROCEDURES  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex A -2 Amended Working Procedures of the Panel  A-7 
 
ANNEX B  
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 First executive summary of the arg uments of China  B-2 
Annex  B-2 Second executive summary of the arguments of China  B-9 
Annex  B-3 First executive summary of the arguments of the European Union  B-16 
Annex  B-4 Second executive summary of the arguments of the European Union  B-23 
 
ANNEX C  
ARGUMENTS OF THE THIR D PARTIES  
Contents  Page  
Annex  C-1 Executive summary of the arguments of Argentina  C-2 
Annex  C-2 Executive summary of the arguments of Brazil  C-6 
Annex  C-3 Executive summary of the arguments of Canada  C-9 
Annex C -4 Executive summary of the arguments of the Russian Federation  C-13 
Annex C -5 Executive summary of the arguments of Thailand  C-15 
Annex C -6 Executive summary of the arguments of United States  C-22 
 
 
 
 WT/DS492/R  
 
- 7 - 
 
   
WTO CASES CITED IN THIS REPORT  
Short title  Full case title and citatio n 
Argentina – Poultry 
Anti-Dumping Duties  Panel Report, Argentina – Definitive Anti -Dumping Duties on Poultry from Brazil , 
WT/DS241/R , adopted 19 May 2003, DSR 2003:V, p. 1727  
Argentina – Textiles and 
Apparel  Appellate Body Report, Argentina – Measures A ffecting Imports of Footwear, 
Textiles, Apparel and Other Items , WT/DS56/AB/R  and Corr.1, adopted 22 April 
1998, DSR 1998:III, p. 1003  
Canada – Dairy  Panel Report, Canada – Measures Affecting the Importation of Milk and the 
Exportation of Dairy Products , WT/DS103/R , WT/DS113/R , adopted 27 October 
1999, as modified by Appellate Body Report WT/DS103/AB/R, WT/DS113/AB/R, 
DSR 1999:VI, p. 2097  
Canada – 
Pharmaceutical Patents  Panel Report, Canada – Patent Protection of Pharmaceutical Products , 
WT/DS114/R , adopt ed 7 April 2000, DSR 2000:V, p. 2289  
Canada – Wheat Exports 
and Grain Imports  Appellate Body Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/AB/R , adopted 27 September 2004, DSR 
2004:VI, p. 2739  
China – Auto Parts  Appellate Body Reports, China – Measures Affecting Imports of Automobile Parts , 
WT/DS339/AB/R  / WT/DS340/AB/R  / WT/DS342/AB/R , adopted 12 January 2009, 
DSR 2009:I, p. 3  
China – Publications and 
Audiovisual Products  Panel Report, China – Measures Affecting Trading Rights and Distribution Services 
for Certain Publications and Audiovisual Entertainment Products , WT/DS363/R  and 
Corr.1, adopted 19 January 2010, as modified by Appellate Body Report 
WT/DS363/AB/R, DSR 2010:II, p. 261  
China – Rare Earths  Appellate Body Reports, China – Measures Related to the Exportation of Rare 
Earths, Tungsten, and Molybdenum , WT/DS431/AB/R  / WT/DS432/AB/R  / 
WT/DS433/AB/R , adopted 29 August 2014, DSR 2014:III, p. 805  
China – Rare Earths  Panel Reports, China – Measures Related to the Exportation of Rare Earths, 
Tungsten, and Molybdenum , WT/DS431/R  and Add.1 / WT/DS432/R  and Add.1 / 
WT/DS433/R  and Add.1, adopted 29 August 2014, upheld by Appellate Body 
Reports WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, DSR 2014:IV, p.  
1127 
Colombia – Textiles  Appellate Body Report, Colombia – Measures Relating to the Importation of 
Textiles, Apparel and Footwear , WT/DS461/AB/R  and Add. 1, adopted 22 June 2016  
Dominican Republic – 
Import and Sale of 
Cigarettes  Appellate Body Report, Dominican Republic – Measures Affecting the Importation 
and Internal Sale of Cigarettes , WT/DS302/AB/R , adopted 19 May 2005, DSR 
2005:XV, p. 7367  
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, Sale 
and Distributio n of Bananas , WT/DS27/AB/R , adopted 25 September 1997, DSR 
1997:II, p. 591  
EC – Bananas III  Panel Reports, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas , WT/DS27/R/ECU (Ecuador)  / WT/DS27/R/GTM, 
WT/DS27/R/HND (Guatema la and Honduras)  / WT/DS27/R/MEX (Mexico)  / 
WT/DS27/R/USA (US), adopted 25  September 1997, as modified by Appellate Body 
Report WT/DS27/AB/R, DSR 1997:II, p.  695 to DSR 1997:III, p.  1085 
EC – Bananas III  
(Article  21.5 – Ecuador)  Panel Report, European Co mmunities – Regime for the Importation, Sale and 
Distribution of Bananas – Recourse to Article  21.5 of the DSU by Ecuador , 
WT/DS27/RW/ECU , adopted 6 May 1999, DSR 1999:II, p.  803 
EC – Bananas III  
(Article  21.5 – Ecuador 
II) /  
EC – Bananas III  
(Article  21.5 – US) Appellate Body Reports, European Communities – Regime for the Importation, Sale 
and Distribution of Bananas – Second Recourse to Article  21.5 of the DSU by 
Ecuador , WT/DS27/AB/RW2/ECU , adopted 11 December 2008, and Corr.1 / 
European Communities – Regime for the Importation, Sale and Distribution of 
Bananas – Recourse to Article  21.5 of the DSU by the United States , 
WT/DS27/AB/RW/USA  and Corr.1, adopted 22 December 2008, DSR 2008:XVIII, 
p. 7165 
EC – Bananas III  
(Article  21.5 – Ecuador 
II) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Second Recourse to Article  21.5 of the DSU by Ecuador , 
WT/DS27/RW2/ECU , adopted 11 December 2008, as modified by Appellate Body 
Report WT/DS27/AB/RW2/ECU, DSR 200 8:XVIII, p.  7329 WT/DS492/R  
 
- 8 - 
 
  Short title  Full case title and citatio n 
EC – Bed Linen  
(Article  21.5 – India)  Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton -
Type Bed Linen from India – Recourse to Article  21.5 of the DSU  by India , 
WT/DS141/RW , adopted 24 April 2003, as modified  by Appellate Body Report 
WT/DS141/AB/RW, DSR 2003:IV, p.  1269 
EC – Chicken Cuts  Appellate Body Report, European  Communities – Customs Classification of Frozen 
Boneless Chicken Cuts , WT/DS269/AB/R , WT/DS286/AB/R , adopted 27 September 
2005, and Corr.1, DSR  2005:XIX, p.  9157 
EC – Export Subsidies 
on Sugar (Australia)  Panel Report, European Communities – Export Subsidies on Sugar, Complaint by 
Australia , WT/DS265/R , adopted 19 May 2005, as modified by Appellate Body 
Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS 283/AB/R, DSR 2005:XIII, p. 
6499 
EC – Fasteners (China)  Appellate Body Report, European Communities – Definitive Anti -Dumping Measures 
on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R , adopted 28 July 
2011, DSR 2011:VII, p. 3995  
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , adopted 13 February 1998, DSR 
1998:I, p. 135  
EC – IT Products  Panel Reports, European Communities and its member States – Tariff Treatment of 
Certain Information Technology Products , WT/DS375/R  / WT/DS376/R  / 
WT/DS377/R , adopted 21 September 2010, DSR 2010:III, p. 933  
EC – Poultry  Appellate Body Report, European Communities – Measures Affecting the 
Importation of Certain Poultry Products , WT/DS69/ AB/R, adopted 23 July 1998, 
DSR 1998:V, p. 2031  
EC – Tariff Preferences  Panel Report, European Communities – Conditions for the Granting of Tariff 
Preferences to Developing Countries , WT/DS246/R , adopted 20 April 2004, as 
modified by Appellate Body Report  WT/DS246/AB/R, DSR 2004:III, p. 1009  
EC and certain member 
States – Large Civil 
Aircraft  Panel Report, European Communities and Certain Member States – Measures 
Affecting Trade in Large Civil Aircraft , WT/DS316/R , adopted 1 June 2011, as 
modified by Appe llate Body Report, WT/DS316/AB/R, DSR 2011:II, p. 685  
Guatemala – Cement II  Panel Report, Guatemala – Definitive Anti -Dumping Measures on Grey Portland 
Cement from Mexico , WT/DS156/R , adopted 17 November 2000, DSR 2000:XI, p. 
5295 
India – Additional 
Import Duties  Panel Report, India – Additional and Extra -Additional Duties on Imports from the 
United States , WT/DS360/R , adopted 17 November 2008, as reversed by Appellate 
Body Report WT/DS360/AB/R, DSR 2008:XX, p. 8317  
India – Patents (US)  Appellate Body Re port, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R , adopted 16 January 1998, DSR 
1998:I, p. 9  
India – Solar Cells  Appellate Body Report, India – Certain Measures Relating to Solar Cells and Solar 
Modules , WT/DS456/AB/R  and Add.1, circulated to WTO Members 16 September 
2016, adopted 14 October 2016  
Indonesia – Autos  Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry , 
WT/DS54/R , WT/DS55/R , WT/DS59/R , WT/DS64/R , Corr.1 and Corr.2, ado pted 23 
July 1998, and Corr.3 and Corr.4, DSR 1998:VI, p. 2201  
Japan – Alcoholic 
Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R , 
WT/DS10/AB/R , WT/DS11/AB/R , adopted 1 November 1996, DSR 1996:I, p. 97  
Korea – Alcohol ic 
Beverages  Appellate Body Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/AB/R , 
WT/DS84/AB/R , adopted 17 February 1999, DSR 1999:I, p. 3  
Korea – Dairy  Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain 
Dairy Products , WT/DS98/AB/R , adopted 12 January 2000, DSR 2000:I, p. 3  
Russia – Tariff 
Treatment  Panel Report, Russia – Tariff Treatment of Certain Agricultural and Manufacturing 
Products , WT/DS485/R, Corr.1, Corr.2, and Add.1, adopted 26 September 2016  
US – 1916 Act  Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R , WT/DS162/AB/R , adopted 26 September 2000, DSR 2000:X, p. 
4793 WT/DS492/R  
 
- 9 - 
 
  Short title  Full case title and citatio n 
US – 1916 Act (EC)  Panel Report, United States – Anti-Dumping Act of 1916, Complaint by the 
European Communities , WT/DS136/R  and Corr.1, adopted 26 September 2000, 
upheld by Appellate Body Report WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 
p. 4593  
US – 1916 Act (Japan)  Panel Report, United States – Anti-Dumping Act of 1916, Complaint by Japan , 
WT/DS162/R  and Add.1, a dopted 26 September 2000, upheld by Appellate Body 
Report WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, p. 4831  
US – Anti-Dumping and 
Countervailing Duties 
(China)  Appellate Body Report, United States – Definitive Anti -Dumping and Countervailing 
Duties on Cer tain Products from China , WT/DS379/AB/R , adopted 25 March 2011, 
DSR 2011:V, p. 2869  
US – Carbon Steel 
(India)  Appellate Body Report, United States – Countervailing Measures on Certain Hot -
Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R , adopt ed 19 
December 2014, DSR 2014:V, p. 1727  
US – Certain EC 
Products  Appellate Body Report, United States – Import Measures on Certain Products from 
the European Communities , WT/DS165/AB/R , adopted 10 January 2001, DSR 
2001:I, p. 373  
US – COOL  Appellate Bod y Reports, United States – Certain Country of Origin Labelling (COOL) 
Requirements , WT/DS384/AB/R  / WT/DS386/AB/R , adopted 23 July 2012, DSR 
2012:V, p. 2449  
US – COOL (Article 21.5 
– Canada and Mexico)  Panel Reports, United States – Certain Country of Ori gin Labelling (COOL) 
Requirements – Recourse to Article 21.5 of the DSU by Canada and Mexico , 
WT/DS384/RW  and Add.1 / WT/DS386/RW  and Add.1, adopted 29 May 2015, as 
modified by Appellate Body Reports WT/DS384/AB/RW / WT/DS386/AB/RW  
US – COOL (Article 22.6  
– United States)  Decisions by the Arbitrator, United States – Certain Country of Origin Labelling 
(COOL) Requirements – Recourse to Article 22.6 of the DSU the United States , 
WT/DS384/ARB  and Add.1 / WT/DS386/ARB  and Add.1, circulated to WTO 
Members 7 Dec ember 2015  
US – Corrosion -
Resistant Steel Sunset 
Review  Panel Report, United States – Sunset Review of Anti -Dumping Duties on Corrosion -
Resistant Carbon Steel Flat Products from Japan , WT/DS244/R , adopted 9 January 
2004, as modified by Appellate Body Repo rt WT/DS244/AB/R, DSR 2004:I, p. 85  
US – FSC (Article 21.5 – 
EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations " – Recourse to Article 21.5 of the DSU by the European Communities , 
WT/DS108/AB/RW , adopted 29 January 20 02, DSR 2002:I, p. 55  
US – Gambling  Appellate Body Report, United States – Measures Affecting the Cross -Border Supply 
of Gambling and Betting Services , WT/DS285/AB/R , adopted 20 April 2005, DSR 
2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)  
US – Large Civil Aircraft 
(2nd complaint)  Panel Report, United States – Measures Affecting Trade in Large Civil Aircraft 
(Second Complaint) , WT/DS353/R , adopted 23 March 2012, as modified by 
Appellate Body Report WT/DS353/AB/R, DSR 2012:II, p. 649  
US – Line Pip e Panel Report, United States – Definitive Safeguard Measures on Imports of Circular 
Welded Carbon Quality Line Pipe from Korea , WT/DS202/R , adopted 8 March 2002, 
as modified by Appellate Body Report WT/DS202/AB/, DSR 2002:IV, p. 1473  
US – Shrimp  Appellat e Body Report, United States – Import Prohibition of Certain Shrimp and 
Shrimp Products , WT/DS58/AB/R , adopted 6 November 1998, DSR 1998:VII, p. 
2755 
US – Softwood Lumber 
IV Appellate Body Report, United States – Final Countervailing Duty Determination 
with Respect to Certain Softwood Lumber from Canada , WT/DS257/AB/R , adopted 
17 February 2004, DSR 2004:II, p. 571  
US – Steel Plate  Panel Report, United States – Anti-Dumping and Countervailing Measures on Steel 
Plate from India , WT/DS206/R  and Corr.1, adopt ed 29 July 2002, DSR 2002:VI, p. 
2073 
US – Tuna II (Mexico)  Appellate Body Report, United States – Measures Concerning the Importation, 
Marketing and Sale of Tuna and Tuna Products , WT/DS381/AB/R , adopted 13 June 
2012, DSR 2012:IV, p. 1837  
US – Tuna II ( Mexico) 
(Article 21.5 – Mexico)  Appellate Body Report, United States – Measures Concerning the Importation, 
Marketing and Sale of Tuna and Tuna Products – Recourse to Article 21.5 of the 
DSU by Mexico , WT/DS381/AB/RW  and Add.1, adopted 3 December 2015  WT/DS492/R  
 
- 10 - 
 
  Short title  Full case title and citatio n 
US – Wool Shirts and 
Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven Wool 
Shirts and Blouses from India , WT/DS33/AB/R , adopted 23 May 1997, and Corr.1, 
DSR 1997:I, p. 323  
US – Zeroing (EC) 
(Article 21.5 – EC) Appellate Body Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ( "Zeroing ") – Recourse to Article 21.5 of the DSU by 
the European Communities , WT/DS294/AB/RW  and Corr.1, adopted 11 June 2009, 
DSR 2009:VII, p. 2911  
 
GATT CASES CIT ED IN THIS REPORT  
Short title  Full case title and citation  
Canada – Lead and Zinc  GATT Panel Report, Canada – Withdrawal of Tariff Concessions (Lead and Zinc) , 
L/4636 , adopted 17  May 1978, BISD  25S/42  
EEC – Apples  (Chile I)  GATT Panel Report, EEC Restric tions on Imports of Apples from Chile , L/5047, 
adopted 10  November  1980, BISD  27S/98  
EEC – Dessert Apples  GATT Panel Report, European Economic Community – Restrictions on Imports of 
Dessert Apples – Complaint by Chile , L/6491, adopted 22  June 1989, BISD  36S/93  
US/EEC – Poultry  GATT Panel Report, US/EEC – Panel on Poultry , L/2088, 21  November  1963, 
unadopted   WT/DS492/R  
 
- 11 - 
 
   
ABBREVIATIONS USED I N THIS REPORT  
 
Abbreviation  Description  
AI Avian Influenza  
CN Combined Nomenclature  
DSB Dispute Settlement Body  
DSU Unders tanding on Rules and Procedures Governing the Settlement of Disputes  
EU Schedule   Schedule CXL - European Communities  
First Modification Package  Modifications to the European Union's tariff concessions notified on 29 May 
2009 (G/SECRET/25 ADD.1)  
GATT 19 94 General Agreement on Tariffs and Trade 1994  
MFN Most-Favoured -Nation  
Procedures for Negotiations 
under Article XXVIII  Procedures for Negotiations under Article XXVIII, adopted by the Council on 
10 November 1980, C/113 and Corr. 1, BISD 27S/26 -29. 
Procedures for Modification 
and Rectification of Schedules  Decision of 26 March 1980, Procedures for Modification and Rectification of 
Schedules of Tariff Concessions, GATT document L/4962, BISD S27/25  
PSI Principal supplying interest  
Second Modification Package  Modifications to the European Union's tariff concessions notified on 17 
December 2012 (G/SECRET/32/ADD 1)  
SPS Agreement  Agreement on the Application of Sanitary and Phytosanitary Measures  
SSI Substantial supplying interest  
TRQ  Tariff rate quot a 
Understanding  Understanding on the Interpretation of Article XXVIII of the GATT 1994  
Vienna Convention  Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 
1155 UNTS 331; 8 International Legal Materials 679  
WTO Agreement  Marrakesh Agreement Establishing the World Trade Organization  
 WT/DS492/R  
 
- 12 - 
 
   
 
EXHIBITS CITED IN TH IS REPORT  
 
Exhibit Number  Title 
CHN-5/EU-15 Commission Decision 2002/69/EC, of 30 January 2002, concerning certain protective 
measures with regard to the products of animal origi nal imported from China, OJ L 30/50 
of 31.1.2002  
CHN-6/EU-19 Commission Decision 2004/122/EC of 6 February 2004 concerning certain protective 
measures in relation to Avian Influenza in several Asian countries (O.J. L 36, 7 February 
2004, p. 59).  
CHN-8/EU-13 Commission Decision 2007/77 7/EC of 29 November 2007 laying down the animal and 
public health conditions and model certificates for imports of certain meat products and 
treated stomachs, bladders and intestines for human consumption from third countries  
and repealing Decision 2005/432/EC (O.J. L 312, 20 November 2007, p. 49).  
CHN-9/EU-23 Commission Decision 2008/638/EC of 30 July 2008, amending Decision 2007/777/EC 
concerning the authorisation of China for the importation of heat treated poultrymeat 
products, OJ L 207/24 of 5.8.2008  
CHN-10/EU -22 Commission Decision 2008/640/EC of 30 July 2008, concerning certain protection 
measures in relation to avian influenza in several third countries, OJ L 207/32 of 
5.8.2008  
CHN-15 Article XXVIII:5 negotiations sc hedule CXL — Europe an Communities, G/SECRET/25 
(15 June 2006).  
CHN-16 Note Verbal e from China to the EU (6 September 2006).  
CHN-17 Letter from Amb. Carlo Trojan to Amb. Sun (18 October 2006).  
CHN-18 Letter from Amb. Sun to Amb. Trojan (16 November 2006) . 
CHN-19 Letter from Vice Minister Yi to DG O 'Sullivan (19 April 2007) . 
CHN-20 / EU-34 Council Decision of 29 May 2007 on the conclusion of agreements in the form of agreed 
minutes between the European Community and the Federative Republic of Brazil, and  
between the European Community and the Kingdom of Thailand pursuant to 
Article  XXVIII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) relating 
to the modification of concessions with respect to poultry meat (2007/360/EC).  
CHN-22 Council Re gulation of 29 May 2007 concerning the implementation of Agreements in the 
form of Agreed Minutes between the European Community and Brazil, and between the 
European Community and Thailand pursuant to Article XXVIII of General Agreement on 
Tariffs and Trad e 1994 (GATT 1994), amending and supplementing Annex I to 
Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the 
Common Customs Tariff, O.J. L 138, 30 M ay 2007, p. 1.  
CHN-23 Commission Regulation (EC) No 616/2007 of 4 June 2007 opening and providing for the 
administration of Community tariff quotas in the sector of poultry meat originating in 
Brazil, Thailand and other third countries, OJ L 142/5 of 5.6.2007  
CHN-24 Commission Regulation (EC) No 1549/2007 of 20 December 2007 amen ding Regulation 
(EC) 616/2007 opening and providing for the administration of certain Community tariff 
quotas in the sector of poultry meat originating in Brazil, Thailand and other third 
countries, OJ L 337/75 of 21.12.2007  
CHN-25 Article XXVIII:5 notifi cations, G/SECRET/32 dated 11  June 2009 and circulated on 
16 June 2009  
CHN-27 Council Decision 2012/231/EU of 23 April 2012 on the signing on behalf of the EU of the 
Agreement in the Form of an Exchange of Letters between the EU and Brazil pursuant to 
Article XXVIII of the GATT 1994 relating to the modification of concessions with respect 
to processed poultry meat provided for in the EU Schedule annexed to GATT 1994, and 
of the Agreement in the Form of an Exchange of Letters between the EU and Thailand 
pursuant to Article XXVIII of the GATT 1994 relating to the modification of concessions 
with respect to processed poultry meat provided for in the EU Schedule annexed to GATT 
1994 (O.J. L 117, 1 May 2012, p. 1).  
CHN-28 / EU-35 Regulation (EU) No 1218/2012 of  the European Parl iament and of the Council of 
12 December 2012 concerning the implementation of the Agreement in the Form of an 
Exchange of Letters between the EU and Brazil pursuant to Article XXVIII of the General 
Agreement on Tariffs and Trade (GATT) 1 994 relating to the modification of concessions 
with respect to processed poultry meat provided for in the EU Schedule annexed to GATT 
1994, and of the Agreement in the Form of an Exchange of Letters between the EU and WT/DS492/R  
 
- 13 - 
 
  Exhibit Number  Title 
Thailand pursuant to Article XXVIII o f the General Agreement on Tariffs and Trade 
(GATT) 1994 relating to the modification of concessions with respect to processed 
poultry meat provided for in the EU Schedule annexed to GATT 1994, and amending and 
supplementing Annex I to Council Regulation ( EEC) No 2658/87 on the tariff and 
statistical nomenclature and on the Common Customs Tariff  (O.J. L 351, 20 December 
2012, p. 36).  
CHN-29 Letter from China to the EU requesting to enter into negot iations under Article XXVIII 
(9 May 2012)  
CHN-30 Letter f rom China to the EU (2 October 2012)  
CHN-31 Letter from the EU to China responding to China 's request for negotiation (1 June 2012)  
CHN-32 Letter from the EU to China (12 October 2012)  
CHN-34 Council Decision 2012/792/EU of 6 December 2012,  on the conc lusion of the Agreement 
in the form of an Exchange of Letters between the EU  and Brazil pursuant to 
Article  XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the 
modification of concessions with respect to processed poultry meat provided for in the 
EU Schedule annexed to GATT 1994, and of the Agreement in the form of an Exchange 
of Letters between the EU and Thailand pursuant to Article XXVIII of the General 
Agreement on Tariffs and Trade (GATT) 1994 relating to the modification o f concessions 
with respect to processed poultry meat provided for in the EU Schedule annexed to GATT 
1994, OJ L 351/44 of  20.12.20012  
CHN-36 O.J. L 352, 21 December 2012, p. 16  
CHN-37 O.J. L 90, 28 March 2013, p. 86  
CHN-38 O.J. L 56, 28 February 2013, p. 2 
CHN-39 Letter of 19 December 2013 requesting consultation under Article XIII:4 of the GATT 
1994 
CHN-40 Response letter from the EU to China  dated 21 February 2014   
CHN-47 Summary of EU 's SPS measures with heat treatment requirements applicable to t ariff 
lines at issue  
CHN-48 China 's claims of supplying interests for the poultry meat products concerned  
CHN-49 The all other share of the tariff rate quotas are below the share obtained based on 
paragraph 6 of the Understanding even for the reference p eriods selected by the EU  
CHN-50 Letter from China to the European Union requesting to enter into negotiations under 
Article XXVIII (9 May 2012), i.e. Ex CHN 29 but with trade data attached  
CHN-52 Statistical data from Eurostat on imports into the EU fro m Brazil, China, Thailand, and 
Extra EU28, per tariff line for the period 1996 – 2015 (collected for EU15 for 1996 -1998, 
and EU 28 for 1999 -2015)  
CHN-54 Detailed timeline for the EU 's SPS measures  
EU-1 Letter from the Permanent Mission of Brazil to the U nited Nations in Geneva to 
Ambassador Trojan, Permanent Representative of the European Communities to the 
WTO, dated 24 July 2006  
EU-2 Letter from the Permanent Mission of Thailand to the WTO to Ambassador Trojan, 
Permanent Representative of the European Communities to the WTO, dated 11 August 
2006 
EU-3 Agreed Minutes initialled in Geneva by J.L Demarty (Commission of the EC) and Roberto 
C. De Azevedo (Delegation of Brazil), 26 October 2006  
EU-4 Agreed Minutes initialled in Bangkok by F. Coturni (Commiss ion of the EC) and B. 
Chutima (Delegation of Thailand), 23 November 2006  
EU-5 Agreed Minutes initialled in Geneva by J.L Demarty (Commission of the EC) and Roberto 
C. De Azevedo (Delegation of Brazil), 6 December 2006  
EU-6 G/SECRET/25/Add.1, 29 May 2009  
EU-7 Letter from the Permanent Mission of Thailand to the Ambassador of the Permanent 
Mission of the European Communities to the WTO, 18 August 2009  
EU-8 Letter from the Ambassador of the Permanent Mission of Brazil to the WTO to the 
Ambassador of the Pe rmanent Mission of the European Communities to the WTO, 8 
September 2009  
EU-9 G/SECRET/32/ADD 1, 20 December 2012  
EU-16 Commission Decision 2002/994/EC, of 20 December 2002, concerning certain protective 
measures with regard to products of animal origin imported from China  WT/DS492/R  
 
- 14 - 
 
  Exhibit Number  Title 
EU-17 Commission Decision 2008/639/EC, of 30 July 2008, amending Decision 2002/994/EC 
concerning certain protective measures with regard to products of animal origin imported 
from China, OJ L 207/30, of 5.8.2008  
EU-20 Commission Decis ion 2004/84/EC, of 23 January 2004, concerning protection measures 
relating to avian influenza in Thailand, OJ L 17/57 of 24.1.2004  
EU-21 Commission Decision 2005/692/EC, of 6 October 2005, concerning certain protection 
measures in relation to avian influ enza in several third countries, OJ L 263/20 of 
8.10.2005  
EU-24 Commi ssion Decision 2005/432/EC, of 3  June 2005, laying down the animal and public 
health conditions and model certificates for imports of meat products for human 
consumption from third count ries and repealing Decisions 97/41/EC, 97/221/EC and 
97/222/EC, OJ L 151/3 of 14.6.2005  
EU-25 Commission Decision 97/222/E C, of 28 February 1997, laying down the list of third 
countries from which the Member States authorize the importation of meat produc ts, OJ 
L 89/39 of 4.4.1997  
EU-28 Letter from David O 'Sullivan (Director General of DG TRADE) to Mr Yi, Vice -Minister of 
MOFCOM (Chinese Ministry of Commerce), 8 May 2007  
EU-30 Import statistics for the products concerned into the EU, 1995 -2015 
EU-39 Table summarising the various sanitary measures applied to imports from China from 
1995 until 2010  
EU-41 WTO documents circulating the communications of the European Union reserving its 
rights under Article XXVIII:5 for the periods 2009 -2011 and 2012 -2014 
EU-43 (corr.)  TRQs: Salted Processed Poultrymeat – EU28 Imports from the World 1996 -2015 
EU-44 (corr.)  Import data for tariff lines 16023940 and 16023980 during the period 1999 -2015 
 WT/DS492/R  
 
- 15 - 
 
  1  INTRODUCTION  
1.1  Complaint by China  
1.1.  On 8 April 2015 , China  requested consu ltations with the European Union  pursuant to 
Articles  1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes (DSU) and Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 
(GATT  1994)  with respect to the mea sures and claims set out below.1 
1.2.  Consultations were held on 26 May 2015 . 
1.2  Panel establishment and composition  
1.3.  On 8 June 2015 , China  requested the establishment of a panel pursuant to Article s 4.7 
and 6 of the DSU  and Article XXIII of the GATT 1994  with stan dard terms of reference.2 At its 
meeting on 20 July 2015 , the Dispute Settlement Body (DSB) established a panel pursuant to the 
request of China , in accordance with Article  6 of the DSU.3 
1.4.  The Panel 's terms of reference are the following:  
To examine, in the  light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by China  in document s 
WT/DS492/2 and WT/DS492/ 2/Corr.1  and to make such findings as will assist the 
DSB in making the recommenda tions or in giving the rulings provided for in those 
agreements.4 
1.5.  On 23 November 2015 , China requested the Director -General to determine the composition 
of the panel, pursuant to Article 8.7 of the DSU. On 3 December 2015 , the Director -General 
composed the  Panel as follows:  
Chairperson:  Mr Hugo Cayrús  
 
Members:   Mr Masanori Hay ashi 
   Ms Penelope Ridings  
 
1.6.  Argentina, Brazil, Canada, India, the Russian Federation , Thailand  and the United States 
notified their interest to participate  as third parties  in the Pa nel proceedings . 
1.3  Panel proceedings  
1.3.1   General  
1.7.  After consultation with  the parties, the Panel adopted the Working Procedures5 and the 
timetable for these proceedings on 16 December 2015 . The Panel adopted Amended Working 
Procedures6 on 3 February 2016  to refle ct the Panel 's decision to grant enhanced third -party 
rights . 
1.8.  The Panel held a first substantive meeting with the parties on 22-23 March 2016 . The third -
party session took place on 23 March 2016 . The Panel held a second substantive meeting with the 
parties  on 5-6 July 2016 . On 12 August 2016 , the Panel issued the descriptive part of its Report to 
the parties. The Panel issued its Interim Report to the parties on 21 October 2016 . The Panel 
issued its Final Report to the parties on 2 December 2016 . 
                                               
1 See China's request for consultations, WT/DS492/1.   The European Union replaced and succeeded the 
European Communities as of 1 December 2009. In their s ubmissions in these proceedings, the parties have  
generally referred  to the "European Union" when describing events that took place prior to 2009.  This Report 
follows the same approach.  
2 WT/DS492/2 and WT/DS492/2/Corr.1.  
3 See WT/DSB/M/365.  
4 WT/DS492/3.  
5 See the Panel's Working Procedures in Annex A -1. 
6 See the Panel's Amended Working Procedures in Annex A -2. WT/DS492/R  
 
- 16 - 
 
  1.3.2   Request s for enhanced third -party rights  
1.9.  On 17 December 2015, Brazil, Canada  and Thailand  each requested enhanced third-party 
rights in these proceedings. The Panel considered the request s and consulted the parties on this 
matter. On 3 February 2016, the Panel infor med the parties and third parties that for reasons to 
be elaborated in its  Report, it had decided to grant  the following enhanced rights to all third parties 
in these proceedings:  
a. the right to be present and observe the entirety of the first and second su bstantive 
meetings with the parties; and , 
b. the right to receive the parties ' first and second written submissions, written responses 
to questions and comments thereupon, and related exhibits.  
1.10.  The reasoning for the Panel 's decision is elaborated in section 7  of this Report.  
1.3.3   Requests for p reliminary ruling s 
1.11.  In its first written submission of 9 February 2016, the European Union requested the Panel 
to make preliminary ruling s that two issues  raised by China in its first written submission were 
outside the scope of the Panel 's term s of reference. At the invitation of the Panel, China submitted 
its response to the European Union 's request s on 26 February 2016. The t hird parties  were also 
invited to comment on  the European Union 's request s in their third-party written submissions. On 
7 March 2016, the Panel informed the parties that it had decided not to make a ruling on the 
European Union 's request s prior to the first substantive meeting with the parties. At the first 
substantive meeting held on 2 2-23 March 2016, th e Panel sought further clarification from the 
parties on several issues relating to the European Union 's request s. In a communication dated 
15 April 2016, the Panel ruled on one of the  issues raised by the European Union, and reserved 
judgment until the Pa nel Report on the other  issue. The Panel 's rulings and reasoning  regarding 
the European Union 's request s for preliminary rulings are set forth in section 7 of this Report.  
2  FACTUAL ASPECTS  
2.1.  This section of the Report aims to provide  a brief description of t he measures at issue  in this 
dispute . The facts relating to the measures at issue  are elaborated in the context of our Findings in 
section 7 of this Report.   
2.2.  The claims brought by China concern the modification  by the European Union of tariff 
concessions o n certain p oultry products pursuant to negotiations held under  Article XXVIII of the 
GATT 1994.  The European Union modified its concessions on the poultry products relevant to this 
dispute through two distinct negotiation exercises . The first negotiation e xercise  was initiated 
in 2006 and covered  the modification of the tariff concessions on poultry products falling  under 
tariff items 0210 99 39, 1602 31 and 1602 32 19 (the "First Modification Package "). The second 
negotiation exercise was initiated in 2009  and covered the modification of the tariff concessions on 
poultry products falling under tariff items 1602 20 107, 1602 32 1 1, 1602 32 30, 1602 32 90, 
1602 39 21, 1602 39 29, 1602 39 40 and 1602 39 808 (the "Second Modification Package "). 
2.3.  In both negotiat ion exercises , the European  Union  notified its intention to modify its tariff 
concessions under Article XXVIII of the GATT 1994. It subsequently entered into negotiations with 
Brazil and Thailand, which the European Union considered to have the requisite l egal interest to 
participate in the  negotiations . Pursuant to agreements reached with Brazil and Thailand , the 
European Union replaced its previous tariff concessions on the poultry products concerned with 
tariff rate quotas (TRQs). The TRQs and their allo cation among supplying countries are as follows : 
 
                                               
7 As noted in China's panel request, "no change was made to the existing tariff rate for tariff subheading 
1602 20 10" (China's request for the es tablishment of a panel, footnote 3, p. 2).  
8 As noted in China's panel request, "[t]ariff subheadings 1602 39 40 and 1602 39 80 were combined in 
2012 to create a new tariff subheading 1602 39 85" (China's request for the establishment of a panel, 
footnote  2, p. 2).   WT/DS492/R  
 
- 17 - 
 
  With respect to the First Modification Package : 
Tariff item 
number  Description of 
product  Prior 
tariff 
rate  New 
in-
quota  
tariff 
rate New 
out-of-
quota 
tariff  
rate TRQ 
volume 
(metric 
tons)  Allocation 
(metric  
tons)  
0210 9939  Salted poultry meat  15.4%  15.4%  1,300 
EUR/MT  
 
 264,245  Brazil : 
170,807  
Thailand : 
92,610  
Others :  
828   
1602 31  Prepared turkey meat  8.5%  8.5%  1,024 
EUR/MT  
 
 103,896  Brazil :  
92,300  
Others :  
11,59 6 
1602 32 19  Cooked chicken meat  10.9%  8.0%  1,024 
EUR/MT  
 
 250,953  Brazil :  
79,477  
Thailand : 
160,033  
Others:   
11,443  
 
With respect to the Second Modification Package : 
Tariff item 
number  Description of the 
product  Prior 
tariff rate  New in -
quota 
tariff 
rate New out -
of-quota 
tariff  rate TRQ 
volume 
(metric 
tons)  Allocation 
(metric 
tons)  
1602 32 11  Processed chicken meat, 
uncooked, containing 57% 
or more by weight of 
poultry meat or offal  867 
EUR/MT  630 
EUR/MT  2,765 
EUR/MT  16,140  Brazil:   
15,800 
Others :  
340 
 
1602 32 30  Processed chicken meat, 
containing 25% or more 
but less than 57% by 
weight of poultry meat or 
offal  10.9%  10.9%  2,765 
EUR/MT  
 
 79,705  Brazil:   
62,905  
Thailand : 
14,000  
Others :  
2,800  
1602 32 90  Processed chicken meat, 
containing less than 25% 
by weight of poultry meat 
or offal  10.9%  10.9%  2,765 
EUR/MT  
 
 2,865  Brazil :  
295 
Thailand : 
2,100  
Others :  
470  
1602 39 21  Processed duck, geese, 
guinea fowl meat, 
uncooked, containing 57% 
or more by weight of 
poultry meat or offal  867 
EUR/MT  630 
EUR/MT  2,765 
EUR/MT  10  Thailand :  
10 
1602 3 9 29 Processed duck, geese, 
guinea fowl meat, cooked, 
containing 57% or more 
by weight of poultry meat 
or offal  10.9%  10.9%  2,765 
EUR/MT  
 
 13,720  Thailand : 
13,500  
Others :  
220 
1602 39 40  Processed duck, geese, 
guinea fowl meat, 
containing 25% or more 
but less than 57% by 
weight of poultry meat or 
offal 10.9%  10.9%  2,765 
EUR/MT  
 
 748  Thailand : 
600 
Others : 
148 
1602 39 80  Processed duck, geese, 
guinea fowl meat, 
containing less than 25% 
by weight of poultry meat 
or offal  10.9%  10.9%  2,765 
EUR/MT  
 
 725  Thailand: 
600 
Others : 
125 WT/DS492/R  
 
- 18 - 
 
  2.4.  According to China 's panel request , the measures at issue are "the modification s of the EU's 
tariff concessions and the institution of the TRQs as part of the modification packages ", and "the 
following instruments and decision " that implement  the modifications and  the TRQs9:  
"A. For The 2007  Modification Package  [10]:  
(i) Council Regulation (EC) No 580/2007 of 29 May 2007 concerning the implementation 
of agreements in the form of Agreed Minutes between the European Community and 
Brazil, and between the European Community and Thailand pursuant to Article XXVIII 
of the GATT 1994, amending and supplementing  Annex I to Regulation (EEC) 
No 2658/87 on the tariff and statistical nomenclature a nd on the Common Customs 
Tariff.   
(ii) Commission Regulat ion (EC) No 616/2007 of 4 June 2007 opening and providing for 
the administration of Community tariff quotas in the sector of poultry meat originating 
in Brazil, Thailand and other third coun tries.  
(iii) Commission Regulation (EC) No 1549/2007 of 20 December 200 7 amending 
Regulation (EC) No 616/2007 opening and providing for the administration of certain 
Community tariff quotas in the sector of poultry meat originating in Brazil, Thailand 
and other third countries . 
B.  For The 2012 Modification Package  [11]: 
(i) Regul ation (EU) No 1218/2012 of the European Parl iament and of the Council of 
12 December 2012 amending and supplementing Annex I  to Council Regulation (EEC) 
No 2658/87 on the tariff and statistical nomenclature and on the Common Customs 
Tariff  which was adopt ed after the adoption of Council Decision 2012/792/EU of 6 
December 2012 approving the conclusion of the Agreement in the form of an 
Exchange of Letters between the European Union and Brazil pursuant to Article XXVIII 
of the General Agreement on Tariffs an d Trade (GATT) 1994 relating to the 
modification of concessions with respect to processed poultry meat provided for in the 
EU Schedule annexed to GATT 1994, and of the Agreement in the form of an 
Exchange of Letters between the European Union and Thailand pursuant to 
Article  XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to 
the modification of concessions with respect to processed poultry meat provided for in 
the EU Sched ule annexed to GATT 1994 . 
(ii) Commission Regulation (EU) No 1246 /2012 of 19 December 2012 amending 
Regulation (EC) No 616/2007 opening and providing for the administration of 
Community tariff quotas in the sector of poultry meat originating in Brazil, Thailand 
and other third countries and derogating from that Regulati on for 2012 -2013.  
(iii) Commission Implementing Regulation (EU) No 302/2013 of 27 March 2013 amending 
Regulation (EC) No 616/2007 opening and providing for the administration of 
Community tariff quota in the sector of poultry meat originating in Brazil, Thailan d and 
other countries . 
Whilst this Commission Regulation entered into force on 31 March 2013, a notice 
published on 28 February 2013 indicated that the agreements between the EU and 
Brazil on the one hand, and the EU and Thailand on the other hand, entered  into force 
on 1 March 2013.  
(iv) Refusal by the European Union in consultations held on 19  May 2014  under Article XIII 
of GATT 1994 to adjust the TRQs on the basis of recent import statistics establishing 
China 's substantial supplying interests  as had been req uested by letter of Ambassador 
Yu of 19 December 2013.  
                                               
9 China's request for the establishment of a panel, p. 2.  
10 China's reference to the 2007 Modification Package is a reference to the First Modification Package.  
11 China's reference to the 2012 Modification Package is a reference to the Second M odification Package.  WT/DS492/R  
 
- 19 - 
 
  In addition to the measures cited in the above paragraphs, this request also covers any 
amendments, supplements, extensions, replacement measures, renewal measures, related 
measures, or implementing me asures. "12 
3  PARTIES ' REQUESTS FOR FINDING S AND RECOMMENDATION S 
3.1.  In its panel request, China claims that  "the above measures appear to be inconsistent with 
the EU 's obligations under Articles I, II, XIII and XXVIII of the GATT 1994 ", as follows :  
"A.  Claims W ith Respect To The 2007 Modification Package :  
(i) The modification negotiation initiated by the EU in 2006 is inconsistent with 
Article  XXVIII:1 of the GATT 1994 , read in conjunction with Ad Article XXVIII and with 
the Understanding on the Interpretation of Article XXVIII, as the EU failed to negotiate 
or consult with all the WTO Members having a principal supplying interest or a 
substantial interest, or that could have had such an interest in the absence of a 
discriminatory quantitative restriction.  
(ii) The tariff rates and the TRQs negotiated and then implemented by the EU in the 
measures identified above are inconsistent with Article XXVIII:2, read in conjunction 
with the Understanding on the Interpretation of Article XXVIII and in particular 
Paragraph 6 thereof, because they failed to maintain a general level of reciprocal and 
mutually advantageous concessions not less favorable to trade than that existing prior 
to the modification.  
(iii) The country -specific TRQs allocated  by the EU to two of the WTO M embers and then 
implemented by the EU in the measures identified above violate GATT 1994 
Article  XIII by diminishing for the other WTO Members the market access 
commitments that the EU undertook to maintain on a non -discriminatory basis.  
(iv) The allocation of all or the vast majority of the TRQs to two of the WTO Members 
implemented by the EU in the measures identified above, is inconsistent with GATT 
1994 Article XIII:1 because the importation of the like product from the WTO 
Members is not similarly prohibite d or restricted as a result.  
(v) The allocation of all or the vast majority of the TRQs to two of the WTO Members as 
implemented by the EU in the measures identified above is inconsistent with the 
chapeau of GATT 1994 Article XIII:2 read in conjunction wit h the Understanding on 
the Interpretation of Article XXVIII and in particular Paragraph 6 thereof , which 
requires the allocation of a TRQ to approach  as closely as possible the shares that the 
WTO Members might be expected to obtain  in the absence of the T RQs. 
(vi) The allocation of all or the vast majority of the TRQs to two of the WTO Members as 
implemented by the EU in the measures identified above is inconsistent with GATT 
1994 Article XIII:2(d) because the EU failed to seek agreement with all WTO Membe rs 
having a substantial interest in supplying the product concerned, nor did it allot to 
such Members shares based upon the proportions supplied by them during a previous 
representative period, due account being taken of any special factors which affected 
the trade in the product.  
(vii) The allocation of all or the vast majority of the TRQs to two of the WTO Members as 
implemented by the EU in the measures identified above is inconsistent with GATT 
1994 Article XIII:2, including its chapeau, read in conjunc tion with  Article XIII:4, 
which confirms that the base period must be selected and special factors must be 
taken into account such as to allot to Members a TRQ that approaches as closely as 
possible the shares that they might be expected to obtain in the absence of the TRQs.  
(viii) The EU violated GATT 1994 Article II:1 by adopting tariff rates that exceeded the 
bound tariff rates in its Schedule for the three tariff subheadings at issue, as the tariff 
                                               
12 China's request for the establishment of a panel, pp.  2-3. (footnotes omitted)  WT/DS492/R  
 
- 20 - 
 
  rates and the TRQs which the EU negotiated and  then i mplemented under 
Article  XXVIII in 2007 are inconsistent with GATT 1994 Articles XIII and XXVIII:2, and 
are, therefore, ineffectual to replace the bound rates in its Schedules preceding its 
implementation of the 2007 Modification Package.  
(ix) In the abse nce of notification for certification, notification of the date on which the 
changes to the goods schedule come into force to the WTO Secretariat, and 
notification of the draft modification to its Schedule, the EU acted inconsistently with 
the procedures s et forth in paragraph 7 of the Procedures for Negotiations under 
Article XXVIII and paragraph 1 of the Procedures for Modification and Rectification of 
Schedules and Tariff Concessions. The absence of a notification for certification of the 
modified schedu le and of the certification following notification and the other violations 
mentioned herein, results in the EU having acted inconsistently with GATT 1994 
Articles II:1 and II:2 by affording imports of poultry meat from China less favorable 
treatment than that provided for in its Schedule.  
(x) The tariff rates and the TRQs negotiated and then implemented by the EU in the 
measures identified above are  inconsistent with GATT 1994 Article I:1 which requires 
that any advantage, favor, privilege or immunity gran ted by any WTO Member to any 
product originating in any other country shall be accorded immediately and 
unconditionally to the like product originating in the territories of all other WTO 
Members.  
B.  Claims With Respect to the 2012 Modification Package:   
(i) The modification negotiation initiated by the EU in 2009 is inconsistent with 
Article  XXVIII:1 of the GATT 1994 , read in conjunction with Ad Article XXVIII, and 
with the Understanding on the Interpretation of Article XXVIII, as the EU failed to 
negotia te or consult with all the WTO Members having a principal supplying interest or 
a substantial interest or that could have had such an interest in the absence of a 
discriminatory quantitative restriction. [13] 
(ii) The tariff rates and the TRQs negotiated and  then implemented by the EU in the 
measures identified above are inconsistent with Article XXVIII:2, read in conjunction 
with the Understanding on the Interpretation of Article XXVIII and in particular 
Paragraph 6 thereof, because they fail to maintain a g eneral level of reciprocal and 
mutually advantageous concessions not less favorable to trade than that existing prior 
to the modification.  
(iii) The country -specific TRQs allocated by the EU to two of the WTO Members as 
implemented in the measures and deci sion mentioned above [14] violate GATT 1994 
Article XIII by diminishing for the other WTO Members the market access 
commitments that the EU undertook to maintain on a non -discriminatory basis.  
(iv) The allocation of all or the vast majority of the TRQs to two of the WTO Members  as 
implemented in the measures and decision mentioned above [15] is inconsistent with 
GATT 1994 Article XIII:1 as the importation of the like product of all the WTO 
Members is not similarly prohibited or restricted as a result.  
                                               
13 In a footnote to this item, China states that "[t]he EU refused to change the TRQs and its allocation 
mentioned in (ii) above so as to reflect China's r ecent shares of importation into the EU. In letters dated 1  June 
2012 and 12 October 2012 addressed by EU Ambassador Pangratis to Ambassador Yi of China in response to 
letters from Ambassador Yi dated 9 May 2012 and 2 October 2012, respectively, the EU ref used China's 
request to enter into consultations under Article  XXVIII of the GATT 1994 on the grounds that China had 
become the biggest supplier in a certain number of poultry products based on EU statistical data for the period 
from 2009 – 2011" (China's request for the establishment of a panel, footnote 12).  
14 In a footnote to this item of its panel request, China states: "See Section I.B(iv) for the referred 
decision" (China's request for the establishment of a panel, footnote 13).  Section I.B(iv) of Chi na's panel 
request refers to "[t]he refusal by the EU in consultations held on 19 May 2014 under Article XIII of GATT 1994 
to adjust the TRQs on the basis of recent import statistics establishing China's substantial supplying interests", 
as had been reques ted by China.  
15 Ibid. WT/DS492/R  
 
- 21 - 
 
  (v) The a llocation of all or the vast majority of the TRQs to two of the WTO Members  as 
implemented in the measures and decision mentioned above [16] is inconsistent with 
the chapeau of GATT 1994 Article XIII:2 read in conjunction with the Understanding 
on the Interp retation of Article XXVIII and in particular Paragraph 6 thereof , because 
the allocation of the TRQs do not approach as closely as possible the shares that the 
WTO Members might be expected to obtain  in the absence of the TRQs . 
(vi) The allocation of all o r the vast majority of the TRQs to two of the WTO Members as 
implemented by the EU in the measures and decisions identified above is inconsistent 
with GATT 1994 Article XIII:2(d) because the EU failed to seek agreement with all 
WTO Members having a substan tial interest in supplying the product concerned, nor 
did it allot to such Members shares based upon the proportions supplied by them 
during a previous representative period, due account being taken of any special 
factors which may have affected or may be affecting the trade in the product.  
(vii) The allocation of all or the vast majority of the TRQs to two of the WTO Members as 
implemented by the EU in the measures identified above is inconsistent  with GATT 
1994 Article XIII:2, including its chapeau, read in conjunction with Article XIII:4, 
which confirms that the base period for the determination of the TRQs must be 
selected and special factors must be taken into account so as to allot to Members a 
TRQ that approaches as closely as possible the shares that  they might be expected to 
obtain in the absence of the TRQs.  
(viii) The EU 's refusal in consultations with China on 19 May 2014 to consider an adjustment 
of the allocation of the TRQs based on a change in the base period or a reappraisal of 
the special fa ctors involved is inconsistent with GATT 1994 Article XIII:4.  
(ix) The EU violated GATT 1994 Article II:1 by adopting tariff rates that exceeded the 
bound tariff rates in its Schedule for the tariff subheadings at issue, as the tariff rates 
and the TRQs wh ich the EU negotiated and then implemented under Article XXVIII in 
2013 are inconsistent with GATT 1994 Articles XIII and XXVIII:2, and are, therefore, 
ineffectual to replace the EU 's bound rates in its Schedules preceding its 
implementation of the 2012 Mo dification Package.  
(x)  In the absence of notification for certification, notification of the date on which the 
changes to the goods schedule come into force to the WTO Secretariat, and 
notification of the draft modification to its Schedule, the EU acted inconsistently with 
the procedures set forth in paragraph 7 of the Procedures for Negotiations under 
Article XXVIII and paragraph 1 of the Procedures for Modification and Rectification of 
Schedules and Tariff Concessions. The absence of a notification for certification of the 
modified schedule and of the certification following notification and the other violations 
mentioned herein, results in the EU having acted inconsistently with GATT 1994 
Articles II:1 and II:2 by affording imports of poultry meat from China less favorable 
treatment than that provided for in its Schedule.  
(xi)  The tariff rates and the TRQs negotiated and then implemented by the EU in the 
measures identified above are  inconsistent with GATT 1994 Article I:1 which requires 
that any advan tage, favor, privilege or immunity granted by any WTO Member to any 
product originating in any other country shall be accorded immediately and 
unconditionally to the like product originating in the territories of all other WTO 
Members.  
The EU 's measures an d decision also nullify or impair the benefits accruing to China directly 
or indirectly under the cited agreements. "17 
3.2.  The European Union  requests the Panel to reject all of China 's claims.  
                                               
16 Ibid. 
17 China's request for the establishment of a panel, pp. 3 -6. WT/DS492/R  
 
- 22 - 
 
  4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments of the parties are reflected  in their executive summaries, provided to the 
Panel in accordance with paragraph 20 of the Amended Working Procedures adopted by the Pan el 
(see Annexes B -1, B-2, B-3 and B -4). 
5  ARGUMENTS OF THE THI RD PARTIES  
5.1.  The arguments of Argentina, Brazil, Canada, the Russian Federation, Thailand and the United 
States  are reflected in their executive summaries, provided in accordance with paragraph 21 of the 
Amended Working Procedures adopted by the Panel (see Annexes C -1, C-2, C-3, C-4, C-5 
and C-6). India did not subm it written or oral arguments to the Panel.  
6  INTERIM REVIEW  
6.1.  On 21 October 2016, the Panel issued its Interim Report to the parties. On 4 November 
2016, China and the European Union each submitted written requests for the Panel to review 
aspects of the Interi m Report. On 11 November 2016, each party submitted comments on the 
other's requests for review. Neither party requested an interim review meeting.  
6.2.  In accordance with Article 15.3 of the DSU, this section of the Report sets out our response 
to the parties'  requests for review of precise aspects of the Report made at the interim review 
stage. We discuss the parties' requests for substantive modifications below, in sequence according 
to the sections and paragraphs to which the requests pertain. In addition to  the substantive 
requests that are discussed below, various editorial and drafting improvements were made to the 
Report.  
6.3.  The numbering of some of the footnotes in the Final Report has changed from the numbering 
in the Interim Report. The discussion below refers to the numbering in the Interim Report and, 
where it differs, includes the corresponding numbering in the Final Report.  
6.4.  Before proceeding on a section -by-section basis, we note that the European Union raised a 
cross-cutting issue with reference to paragraphs 7.380, 7.386, 7.399, 7.402, and 7.406 and 
8.1(e) . The European Union observes that the Panel uses different expressions to indicate 
apparently the same thing, including "the size of the 'all others ' share" (para. 7.380), "amount of 
the 'all other s' share" (para. 7.380), or "the amount of the 'all others ' shares" (para. 7.402) and 
"the size of the TRQ shares to be allocated to countries that were not recognized as substantial 
suppliers" (para. 7.406). For the sake of clarity, the European Union pro poses that the panel 
replace those expressions with the simpler and clearer expression "the TRQ(s) share(s) allocated 
to 'all others'" ,  or "the TRQ(s) share(s) to be allocated to ''all others'" , as appropriate. China 
considers that the most accurate expre ssion would be "the size of the TRQ(s) share(s) allocated to 
'all others'" , or "the size of the TRQ(s) share(s) to be allocated to 'all others'" . We note that these 
different expressions were used to indicate the same thing. In the interest of consistent 
expression, we have harmonized the expressions used in these paragraphs.   
6.1  Factual aspects and General overview of China's claims and horizontal arguments  
6.5.  China requests the Panel to revise the first sentence of paragraph 2.2  and the first sentence 
of paragraph 7.2  to reflect that t he claims brought by China in this dispute are not only about the 
modification by the European Union of its tariff concessions on certain poultry products, "but also 
about the administration, allocation in particular, by the Eur opean Union through its legislations 
and other domestic measures of the tariff rate quotas  opened as a result of the modification". The 
European Union does not comment on China's request. We note that these sentences are not 
intended to provide a thorough description of the scope of China's claims in this dispute. 
Furthermore, we consider that the terminology proposed by China in its request to revise these 
sentences, in particular the reference to the "administration" of the tariff rate quotas, does not 
correspond to the panel request and could potentially prejudge some of the disputed issues in this 
case. Accordingly, we have not adjusted the wording of these sentences.  
6.6.  China requests the Panel to revise paragraph 7.3  by adding the words "by the European 
Union" after the words "during the reference period s selected", for greater clarity. The European WT/DS492/R  
 
- 23 - 
 
  Union does not comment on China's request. We have adjusted the wording of paragraph 7.3, as 
requested by China.  
6.7.  With respect to paragraph 7.6 , the European Un ion suggests the following drafting change: 
"Following a relaxation of the SPS measures by the European Union in July 2008, imports of heat 
treated  poultry products from China into the European Union were allowed  increased significantly 
under some of the t ariff lines at issue ." China considers that these words should not be deleted, 
because the fact that imports of heat treated products increased significantly under some of the 
tariff lines is factually correct. Moreover, China considers that the statement supports the analysis 
of the Panel that China held a substantial supplying interest as regards these tariff lines. We 
consider that the change requested by the European Union would introduce imprecision into this 
sentence and potentially alter its meaning,  and have therefore left it unchanged.  
6.2  The tariff rate quotas and the SPS measures  
6.8.  The European Union suggests five drafting changes to the description of the SPS measures: 
(i) with respect to paragraph 7.85 , first sentence, specifying that the requiremen ts referenced 
therein are "sanitary" requirements; (ii) adding the words "due to animal health reasons" at the 
end of the third sentence of paragraph 7.86 ; (iii) clarifying that the decision referred to in 
paragraph 7.88  provides for the importation of pou ltry products subject to a declaration 
"amongst other sanitary requirements (i.e. heat treatment)"; (iv) revising paragraph 7.89 , third 
sentence, to clarify that the importation of the products referred to therein are still subject to heat 
treatment "B", " amongst other sanitary requirements"; and (v) revising paragraph 7.92  by 
replacing the words "at the time of" with the word "until" in the second sentence, and revising the 
formulation of the condition relating to heat treatment "B" in the last sentence by  adding the 
words "… and fulfil the other applicable sanitary requirements". China does not comment on any of 
the foregoing drafting suggestions. We have made drafting changes along the lines proposed by 
the European Union.  
6.9.  With respect to paragraph 7.91 , fourth sentence, the European Union suggests deleting the 
words "under the heat treatment measure". China considers that the words should not be deleted 
because they are necessary to ensure clarity and completeness, and notes that the European 
Union has no t provided reasons for deleting these words. We consider that the change requested 
by the European Union would introduce imprecision into this sentence and potentially alter its 
meaning, and we have therefore left it unchanged.  
6.10.  China requests the Panel to modify the discussion in paragraph 7.97 concerning the 
discrepancies between the 2000 -2006 import statistics submitted by the parties for tariff line 1602 
39 80. China notes that the Panel generally uses the import statistics provided by China for the 
reasons set out there, but that for tariff line 1602 39 80, the Panel  decides to use the statistics 
provided by the European Union for 2005 and 2006 based on the fo llowing two considerations: 
(i) China's statistics appear implausibly large (17.6% and 30.5% of the total EU imports), given 
the SPS measures in place at the time; and (ii) the final statistics that China submitted in Exhibit 
CHN-52 are inconsistent with the statistics it submitted previously in Exhibit CHN -43.  As regards 
the second consideration, C hina notes that in both Exhibits CHN -52 and CHN -43, China 
consistently reported Chinese imports of 101.4 metric tonnes and 201.5 metric tonnes for 2005 
and 2006, respectively, and there is thus no discrepancy between the statistics reported in these 
two Ex hibits. China also notes that it obtained the statistics directly from Eurostat, which China 
understood to be the source of the European Union's statistics as well.  China submits that it 
retrieved trade statistics multiple times from Eurostat during the co urse of this dispute settlement 
proceeding, and the data it retrieved are consistent.  The European Union recalls that, as explained 
by the European Union (second written submission, para. 85), the discrepancy is due to the fact 
that China's statistics incl ude imports into Bulgaria, Romania and Croatia made before those 
countries became Member States of the European Union, whereas the EU statistics do not include 
those imports. We have revised paragraph 7.97, along with a consequential change to 
footnote  207, in the light of the parties' comments.  
6.3  Terms of reference issues  
6.11.  Regarding paragraph 7.106 , the European Union invites the Panel to amend this 
paragraph by adding some additional text summarizing an additional argument that had been WT/DS492/R  
 
- 24 - 
 
  presented by the Eur opean Union on this issue. China does not object to the addition, but offers 
several drafting suggestions for the new text proposed by the European Union. We have added 
text along the lines requested by the European Union.  
6.12.  Beginning with the  title of Secti on 7.3.2.3 , China requests that it be changed from 
"China's contention that the European Union violated Article XI II:1 and the chapeau of 
Article  XIII:2 by failing to annually review and reallocate the TRQ shares" to "China's contention 
that the European U nion violated Article XIII with respect to the allocation of the TRQs in the 
subsequent years" to more accurately describe China's complaint. The European Union "firmly 
opposes China's attempt to reformulate one of the claims that it has formulated during the 
litigation, and notably in its second written submission, as cl early demonstrated in 
paragraph  7.128 of the interim report". The European Union submits that it "is clear from 
paragraphs 7.128 and 7.130 that the Panel has made an objective reading of Ch ina's submission 
and now China tries to move the focus of its claim to what it now pretends to be the essence of 
China's complaint". The European Union submits that "[i]n reality, what China is doing is to 
perpetuate its litigation tactics of formulating i ts claims in an ambiguous and constantly evolving 
manner in order to take advantage from this situation, in an attempt to avoid its claims being 
dismissed". We consider that the title of section  7.3.2.3 precisely reflects our understanding of 
China's claim . Our understanding of China's claim is based on our analysis of the argumentation 
presented by China in its submissions in the course of these proceedings. Accordingly, we decline 
to make the change requested by China.  
6.13.  China notes the Panel's statement i n paragraph 7.133  that "having carefully reviewed 
Section I of the panel request, we do not see any reference to the European Union's failure to 
annually review and reallocate the TRQs from quota year to quota year to take account of trade 
developments as one of the challenged measures at issue", and the Panel's statement in 
paragraph 7.135  that "Section I.B(iv) does not identify, as a measure at issue in this dispute, the 
failure by the European Union to annually review and reallocate the TRQs from year to  year, on its 
own initiative". China submits that it " appears that the Panel has considered that, in order for 
China's claim to fall within its terms of reference, China should have explicitly mentioned in 
Section I of the panel request the European Union' s "failure to annually review and reallocate the 
TRQs from quota year to quota year to take account of trade developments" as a separate and 
distinct measure at issue." In China's view, however, "[s]uch a standard goes significantly beyond 
the requirement under Article 6.2 of the DSU, which does not require the complainant to set out 
the arguments in support of a particular claim in the panel request". In the European Union's view, 
the comments made by China concerning these paragraphs do not require the Pa nel to amend its 
interim report "as they constitute a mere attempt to reargue the case by trying to convince the 
Panel once again" that the claim discussed in the relevant part of the interim report was within the 
Panel's terms of reference.  Our view is in deed that  in order for China's claim that the European 
Union violated the provisions of Article XIII by failing to annually review and reallocate the TRQs 
from quota year to quota year to take account of trade developments, the corresponding omission 
shoul d have been identified, in China's words, as "a separate and distinct measure at issue" in 
Section I.B(iv) of the panel request. We do not agree with China's view that such a standard goes 
beyond the requirement under Article 6.2 of the DSU because we do n ot agree with China that this 
is properly characterized as an "argument[] in support of a particular claim in the panel request".  
6.14.  China requests the deletion of paragraphs 7.136 and 7.137 , in which the Panel suggests 
that China's arguments in respect of t he subsequent allocation by the European Union of the TRQs 
were "apparently only in response to" the European Union's submission about some kind of "time 
limit" on the validity of the allocation or a " periodic  review mechanism". According to China, this 
suggestion "has no basis". China states that in its panel request, China claimed that "the allocation 
of TRQs by the EU, which naturally includes both initial allocation and subsequent allocation, was 
inconsistent with Article XIII". China submits that altho ugh "it might be true that China reinforced 
arguments to support its challenge against the subsequent allocation when it noticed that the EU 
overlooked the ongoing nature of the Article XIII obligations", it "does not follow that China did not 
properly mak e such a claim in its panel request  and that such arguments of China were 
"apparently only in response to" the EU's submission merely because of sequence of these two 
events". The European Union submits that paragraph 7.136 "makes an objective description of the 
evolution of China's claims during the litigation", and that "China does not argue that this 
description is incorrect". The European Union submits that in paragraph 7.137, the Panel makes 
clear what understanding it draws from such evolution and con cludes that such an understanding 
reinforces the conclusion, derived from the text of the Panel request, that these are new claims. WT/DS492/R  
 
- 25 - 
 
  The European Union submits that China's observation that the Panel's understanding "has no 
basis" is therefore unwarranted a nd "constitutes an attempt to reargue the case". We decline 
China's request to delete these paragraphs. They set forth an objective description of the evolution 
of China's claims and argumentation during these proceedings. The basis for that description is  our 
analysis of the panel request and the subsequent argumentation presented by China in the course 
of these proceedings. To avoid any misunderstanding, we wish to clarify that it was not "merely 
because of the sequence of these two events" that we reache d the conclusion that China did not 
properly make the relevant claim in its panel request, and that such arguments were made only in 
response to the European Union's submissions.  
6.4  Claims under Article XXVIII:1 of the GATT 1994  
6.15.  China requests the Panel to r evise its statement in paragraph 7.178  that " China does not 
claim that the European Union violated Article XXVIII:1 by applying a 10% import share 
benchmark to determine which Members held a 'substantial interest '", and the statement that 
"there is no issu e regarding the 10% benchmark per se  that we are called upon to resolve in the 
present dispute". China recalls that it has argued that what is a substantial interest in one case 
might not be a substantial interest in another case, and that a 10% import sha re benchmark 
cannot be used as a "bright line". With reference to its arguments in paragraphs 74 -84 of its 
second written submission as well as paragraphs 16 -17 and 19 of its response to Panel question 
No. 68, China states that it "submitted and continues to consider that the application of a bright 
line test of 10% violates Article XXVIII when - as was done by the EU in the present instance - the 
circumstances of the case were not considered". China requests the Panel "to consider the issue 
whether there i s a 10% bright line benchmark, no matter it is an actual share or a counter -factual 
share, in determining a substantial supplying interest, and to consider this issue separately from 
the issue of the existence and impact of discriminatory quantitative rest rictions". The European 
Union responds that t his paragraph "neither states nor suggests in any way that the 10% import 
threshold should be considered as a bright line test to assess whether a Member holds a 
substantial supplying interest for the purposes o f Articles XXVIII and XIII GATT". Rather, the 
European Union submits that this paragraph provides "a description of the evolution of China's 
arguments concerning the 10% import threshold in the context of China's claims, as well as of the 
European Union's arguments". According to the European Union, that description is correct and 
based on the parties' submissions, and here again "China tries to move the focus of its claims 
pointing to certain paragraphs of its submissions and ignoring others". In the light  of China's 
comments on the interim report, which implies that China now considers that the use of a 10% 
benchmark is an ipso facto violation of Article XXVIII and Article XIII, we have revised paragraph 
7.178 to clarify the basis for our understanding tha t "China does not claim that the European 
Union violated Article XXVIII:1 by applying a 10% import share benchmark to determine which 
Members held a 'substantial interest '".  
6.16.  China submits that there is an inconsistency between the statements made by the P anel in 
paragraphs 7.195 and 7.201. China notes that paragraph 7.195 states that the cited passage 
from Canada – Wheat Exports and Grain Imports  "supports the proposition that the term 
'discrimination ' may be interpreted relatively narrowly, so as to cover  only unjustifiable 
distinctions, or relatively broadly, so as to also cover distinctions that are legitimate and justifiable. 
To that extent, we agree that the word 'discrimination ' may be given different meanings depending 
on the context in which that wo rd appears, and depending on the context, may have a broad 
meaning that covers legitimate and justifiable distinctions". China submits that this is inconsistent 
with the Panel's statement in paragraph 7.201 that "when the term 'discrimination ' is accompani ed 
by the qualifying terms 'arbitrary or unjustifiable ' (or comparable terms) and 'where the same 
conditions prevail ' (or comparable terms) in certain provisions, these additional terms serve the 
purpose of bringing greater precision to how the general con cept and legal standard of 
'discrimination ' is to be applied in a given provision or context. These qualifying terms do not, in 
our view, serve the purpose of narrowing the ordinary meaning of the term 'discrimination ' in the 
manner suggested by China." Ch ina submits that there is an inconsistency between these 
statements because " language that brings greater precision of necessity eliminates certain possible 
interpretations that a more general term may allow and is therefore necessarily narrowing". In 
addition, China finds an inconsistency "between the Panel stating that the sole word 
'discrimination' may have a broad meaning and then to say that the absence of qualifying terms 
may mean that it does not have a broad meaning". The European Union does not com ment on 
China's observation. We do not apprehend the alleged inconsistency between the propositions 
presented in paragraph 7.195 (read together with paragraph 7.196) and paragraph 7.201. Among WT/DS492/R  
 
- 26 - 
 
  other things, we do not equate the notion of " bringing greater precision to how the general 
concept and legal standard of 'discrimination' is to be applied in a given provision or context" to 
the notion of " narrowing  the ordinary meaning of the term 'discrimination'". Accordingly, we have 
made no change to these parag raphs.  
6.17.  China requests the Panel to add a new sentence at the beginning of paragraph 7.202  to 
more accurately summarize its argument, stating that "[i]n addressing the European Union's 
argument that China and a third country that was not subject to similar  import 
prohibitions/restrictions are not similarly situated, China submits that in determining if two 
countries are similarly situated, only the conditions that are relevant for the purpose of the 
provision concerned should be considered ." China submits t hat this would more accurately 
summarize the arguments presented at paragraphs 29 -31 of its oral statement at the first 
meeting. The European Union believes that the Panel has summarized correctly China's position.  
In any event, the European Union disagree s with the phrasing of the additional sentence proposed 
by China. The European Union reiterates that all third countries are subject to the same sanitary 
regulatory requirements; if all third countries are not "similarly situated", it is because their 
sanitary situation is different and not because they are "not subject to similar import 
restrictions/prohibitions". We have not added the additional text requested by China. The focus of 
this paragraph, and the one that follows, is not on China's argument abou t the meaning and 
application of the "similarly situated" standard; rather, the focus of these paragraphs is on China's 
argument that the term "discriminatory" must be interpreted in the context of Article XXVIII:1 and 
paragraphs 4 and 7 of its accompanyin g Ad Note, which in no way prohibit or require the 
elimination of any measure characterized as a "discriminatory quantitative restriction" within the 
meaning of those provisions. However, in the light of China's comment, we have added a reference 
to paragr aph 31 of China's opening statement at the first meeting, and also revised paragraph 
7.203 , to clarify the focus of these paragraphs. Furthermore, we have added a reference to 
paragraphs 29 -31 of China's opening statement at the first meeting in paragraph 7.204, which is 
where we address China's argument regarding the meaning of "similarly situated".  
6.18.  Regarding the statement in paragraphs 7.205  and 7.206  that " China has not attempted 
to argue that imports from any other similarly situated country were not s ubject to the same 
restrictions", China reiterates that it "is of the view that the sanitary situation is not the condition 
that is relevant  for the purpose of the provisions concerned in this dispute, i.e. Article XXVIII:1 
and its accompanying Ad Notes, a nd thus would not permit to conclude [sic] whether China and 
other countries are or are not similarly situated for the purpose of these provisions". In China's 
view, for the purpose of these provisions, "the fact that Chinese poultry meat products and poul try 
meat products originated in other countries are like products is the condition that is relevant and 
this fact is sufficient to establish that China and other countries are similarly situated". In view of 
this, China considers that it is incorrect for t he Panel to find that China "has not attempted to 
argue that imports from any other similarly situated country were not subject to the same 
restrictions". On the contrary, China has submitted that "given that Chinese poultry meat products 
and poultry meat products originated in other countries are like products, they are similarly 
situated". As a result, China submits that "because poultry meat products originating in other 
countries were not subject to the same or similar restrictions, the restrictions wer e discriminatory". 
China therefore requests the Panel to modify the sentence quoted above. China requests that, t o 
the extent that the Panel intends to say that China has not attempted to argue that imports from 
any other country that is in the same sanita ry situation  were not subject to the same restrictions, 
"it is appropriate for it to explicitly say so". The European Union believes that the Panel has 
summarized correctly China's position, and disagrees with China's request. The European Union 
reiterates  that all third countries are subject to the same sanitary regulatory requirements. The 
European Union states that if all third countries are not "similarly situated", it is because their 
sanitary situation is different and not because they are "not subjec t to similar import 
restrictions/prohibitions". We agree with China that the clarity of the analysis would benefit from 
drawing out the Panel's assessment of China's argument on the notion of "similarly situated" more 
explicitly. We have done so by revisin g paragraphs 7.204, 7.205, and 7.206.  
6.19.  Regarding paragraph 7.206 , China requests the Panel not to exercise judicial economy 
with respect to the parties' disagreement as to: (i) whether the scope of the terms "discriminatory 
quantitative restrictions" in th e context of paragraphs 4 and 7 of the Ad Note  to Article XXVIII:1 
covers only unjustifiable distinctions, or is broad enough to also cover justifiable distinctions; (ii) 
whether the SPS measures at issue constitute "quantitative restrictions"; and (iii) w hat share of 
imports into the European Union market China could reasonably be expected to have had, in the WT/DS492/R  
 
- 27 - 
 
  absence of the SPS import prohibitions, over period 2002 -2008. China requests the Panel "to 
engage [in] analysis in these respects even on an arguend o basis". The European Union does not 
comment on China's request. We note that it is well established that a panel has "the discretion to 
address only those arguments  it deems necessary to resolve a particular claim" (Appellate Body 
Report, EC – Poultry , para. 135). We consider that a panel "may be guided by a range of different 
considerations when deciding whether to address arguments beyond those strictly necessary to 
resolve the matter, and the manner in which a panel may do so, including the scope and n ature of 
any such other alternative findings, may also vary depending on the issues before the panel" 
(Panel Report, India – Solar Cells , para. 7.76). We are not convinced that addressing the above 
issues on an arguendo  basis will assist the DSB in making the recommendations or in giving the 
rulings provided for in the covered agreements. Accordingly, we decline China's request.  
6.20.  China considers that, contrary to the Panel's assessment in paragraph 7.219 , there is no 
lack of clarity in China's argumentation regarding "the scope and nature of an obligation of re -
appraisement". With reference to its response to Panel question No. 23 and paragraph 40 of its 
opening statement at the second meeting, China states that its view "has consistently been that if 
the neg otiations / consultations last beyond six months, the Member withdrawing the concession 
should assess  whether a re -appraisement should be made", and that a "re -appraisement need not 
necessarily be made after each period of six months, but must occur when m aterial trade 
developments have occurred that influence the supplying interest status of the WTO Members". 
The European Union does not comment on China's request. We have adjusted paragraph 7.219 
and its accompanying footnotes in the light of China's comme nt.  
6.21.  With regard to paragraphs 7.224 -7.227 , China states that the Panel gives a cursory 
conclusion in the first sentence of paragraph 7.227 by stating that "[i]t appears to us that, if 
anything, prior practice does not support China's contention that there  is a legal obligation of re -
appraisement". China observes that the Panel "fails to determine on which basis this conclusion 
was taken". In addition, China states that the Panel "fails to consider and respond to China's full 
argumentation and in particular  to that set forth in its response to the Panel's question 106". The 
European Union does not comment on China's request. We have revised paragraph 7.227 to clarify 
the basis for this assessment.  
6.22.  China makes several interrelated requests relating to the Pa nel's discussion, in 
section  7.4.3.3 , of whether the European Union 's refusal to recognize China as a Member holding 
a supplying interest was justified by the timing of China's claim. First, China requests that the 
Panel rule on whether the European Union' s decision not to recognize China as a Member holding a 
principal or substantial supplying interest was justified in the absence of a claim of supplying 
interest by China within the 90 -day period . China states that this "is particularly because China 
considers that the Panel should revise its analysis on the existence of discriminatory quantitative 
restrictions and on the re -appraisement of the interest based on the latest import data for the 
reasons mentioned above".  The European Union does not comment on China's request. We recall 
that it is well established that a panel has the discretion to address only those arguments  it deems 
necessary to resolve a particular claim. We are not convinced that addressing the above issues on 
an arguendo  basis will assist the DSB in making the recommendations or in giving the rulings 
provided for in the covered agreements. Accordingly, we decline China's request.  
6.23.  With regard to paragraph 7.233  in particular, China requests that the Panel clarify that 
paragraph 4 of the Proc edures for Negotiations under Article XXVIII and paragraphs 2 and 5 of the 
Understanding on the Interpretation of Article XXVIII are not couched in mandatory terms. China 
submits that the current paragraph is phrased as if this 90 -day is mandatory, which i n China's 
view it is not. The European Union does not comment on China's request. We do not see the basis 
for China's comment in the text of paragraph 7.233, as this paragraph refers to the 90 -day 
"guideline". Accordingly, we have not amended this paragrap h.  
6.24.  China requests that paragraph 7.234  be revised to state in clear terms that China's claim 
of a substantial supplying interest for the First Modification Package was filed within the 90 -day 
period. The European Union does not comment on China's request.  We have made the change 
requested by China.  WT/DS492/R  
 
- 28 - 
 
  6.5  Claims under Article XXVIII:2 read in conjunction with paragraph 6 of the 
Understanding on Article XXVIII of the GATT 1994  
6.25.  Regarding paragraph 7.261 , China states that "[f]irst of all, in making its analysis, the 
Panel has omitted to take into account and should do so that the global TRQs for several tariff lines 
do not reflect the future trade prospects of the WTO Members". In this regard, China refers to 
paragraph 106 of its second written submission and to p aragraph 50 of the China's opening 
statement at the second substantive meeting. China submits that it "has therefore shown that the 
total amount of imported poultry products into the European Union from all sources would have 
been greater had a representat ive period been chosen", and "requests the Panel to take this data 
into account". The European Union observes that the calculations cited by China purport to show 
that the amount of compensation provided by the European Union was below the compensation 
that would have resulted from the application of the formulae of paragraph 6 of the Understanding 
on the basis of a different reference period, but that those calculations "do not prove that the total 
trade during the reference period used by the European Uni on would have been larger in the 
absence of the SPS measures applied to China". We have revised paragraph 7.261 to more clearly 
draw out the premise that, assuming that the amount of imports supplied from China would have 
been greater in the absence of the  SPS measures, there may well have been a corresponding 
decrease in the amount of imports supplied from other sources in the absence of any change in 
overall demand.  
6.26.  With respect to paragraph 7.272 , China requests the Panel to identify the legal ground on 
which it concludes that "it cannot be the case that the Members engaged in the negotiations would 
be legally obliged to change the benchmark defined in that provision from year to year until the 
negotiations have been concluded". China states that "[i]f, a s the Panel admits, the benchmark 
must not necessarily be fixed in advance of the negotiations, then, there is no legal ground on 
which to claim that it must be a three -year period or year preceding the negotiations". China 
further states that the wording of paragraph 6 of the Understanding o n the Interpretation of 
Article  XXVIII "is what it is" and requires the use of "the most recent" three -year period or year 
"and that, as mentioned above, is the period preceding the replacement of the tariff concession by 
the tariff quota". China adds that "to adjust the benchmark year -to-year is not as complicated as 
the Panel seems to believe", and this "is the result of a simple mathematical formula applied to 
import statistics". The European Union does not comment on  China's request. We have revised 
paragraph 7.272 to more clearly draw out the problem that we see with requiring the Members 
engaged in the negotiations to change the benchmark defined in that provision from year to year 
until the negotiations have been c oncluded.  
6.27.  China additionally requests that the Panel clarify the basis on which it drew the conclusion, 
in the accompanying footnote  to this paragraph ( footnote 412 of the Interim Report, 
footnote  426 of the Final Report ), that the fact that the European U nion agreed not to base the 
calculation of the compensation on calendar year 2005, but rather to base it on a more recent 
twelve -month period of July 2005 to June 2006, does not lend support to the conclusion that the 
most recent period can be the most rec ent period preceding the conclusion of the negotiations. 
The European Union does not comment on China's request. We have rephrased footnote 412 of 
the Interim Report ( footnote 426 of the Final Report ) in the light of China's request.  
6.28.  Regarding  paragraph 7 .275, China states that the Panel appears to support "without 
analysis and without reference to the data and analysis submitted by China the assertion of the EU 
that the amount of trade covered by each of the TRQs in the Second Modification Package exceeds  
largely the greatest of the amounts that would result from each of the three formulae of paragraph 
6 of the Understanding  on the Interpretation of Article XXVIII". China requests the Panel to 
provide an analysis on why it supports this assertion by the Eu ropean Union, and to consider and 
take into account China's data showing that the global TRQs for several tariff lines do not reflect 
the future trade prospects of the WTO Members. Reference is made to paragraph 106 of China's 
Second Written Submission, to  paragraph 50 of the China's opening statement at the second 
substantive meeting, and to China's response to Panel question No. 71. The European Union 
recalls that it has rebutted China's arguments in its second written submission (at paras. 77 -85). 
We not e that the purpose of the statement that is the subject of China's comment was not to 
make a finding on the question of whether the amount of trade covered by each of the TRQs in the 
Second Modification Package "exceeds largely the greatest of the amounts"  that would result from 
each of the three formulae of paragraph 6 of the Understanding  on the Interpretation of 
Article  XXVIII. The point was simply to illustrate, with actual examples, that paragraph 6 of the WT/DS492/R  
 
- 29 - 
 
  Understanding establishes the basis for determ ining the minimum  amount of compensation that 
must be provided, and that it is always open for the Members involved in negotiations under 
Article XXVIII to agree on compensation that exceeds the minimum amount required. We have 
deleted this sentence in the  light of China's comment.  
6.29.  With reference to paragraphs 7.291 and 7.293 , China submits that the arguments 
developed by the Panel do not respond to China's argument that " it would not make any sense to 
fix a global TRQ taking into account overall future pr ospects without taking into account future 
trade prospects at the level of the separate TRQs in which the global TRQ is broken down", and 
that to do otherwise "would result in over -compensation for some and under -compensation for 
others, thereby creating d iscrimination" (China's first written submission, para. 138; China's 
second written submission, para. 110). The European Union does not comment on China's request. 
We have added a reference to this argument in paragraph 7.291. We have added additional 
language in paragraph 7.299 to more explicitly address this argument.  
6.30.  China offers several observations on paragraph 7.301 . First, China states that "[i]n 
response to the Panel's question in paragraph 7.301, China refers to paragraph 43 of its Opening 
Stateme nt at the Second Substantive Meeting. China submits that the Panel has not responded to 
the example given in that case which addresses the issue raised by the Panel in paragraph 7.301." 
Second, China takes issue with the statement that "China has not expla ined why it would be the 
case that, in a situation where a Member replaces an unlimited tariff concession with a TRQ that is 
not allocated among supplying countries, it could be presumed that the value of that compensation 
for each single Member would be e quivalent to the value, for that Member, of the concession prior 
to its modification or withdrawal" (emphasis added). The European Union does not comment on 
China's request. We do not see how paragraph 43 of China's opening statement at the second 
meeting is relevant to the focus of paragraph 7.301. Howev er, we have rephrased 
paragraph  7.301 in the light of the second point made by China.  
6.31.  Regarding paragraph 7.302 , China requests the Panel "to complete its analysis on an 
arguendo  basis that Article XXVIII: 2 and paragraph 6 of the Understanding apply to the allocation 
of TRQ shares among supplying countries". China disagrees with the Panel's statement that 
"China's claims of violation relating to the allocation of the TRQs are for the most part based on 
the same grounds as its claims relating to the total amount of the TRQs. Having rejected China's 
claims of violation relating to the total amount of the TRQs, the same conclusions would apply 
mutatis mutandis  to these additional claims insofar as they are the same". Specifically, China 
states that it does not consider that "the same conclusions would apply mutatis mutandis  to these 
additional claims insofar as they are the same". China gives two examples of reasoning by the 
Panel that "applies solely with regar d to the total amount of the TRQs" and not to the share of 
TRQs assigned to China or "all others". The European Union does not comment on China's request. 
We recall that it is well established that a panel has the discretion to address only those arguments  
it deems necessary to resolve a particular claim. We are not convinced that addressing the above 
issues on an arguendo  basis will assist the DSB in making the recommendations or in giving the 
rulings provided for in the covered agreements. Accordingly, we  decline China's request. However, 
in the light of China's comment, we have rephrased this paragraph and we have deleted the 
statement referred to above.  
6.6  Claims under Article XIII:2(d) of the GATT 1994  
6.32.  With respect to paragraph 7.320 , China requests the P anel to indicate the factual basis for 
the statement that negotiations on the total amount of the TRQs under Article XXVIII "frequently  
occur simultaneously" with negotiations on the allocation of the TRQs under Article XIII:2(d). The 
European Union does n ot comment on China's request. The basis for our statement is cited in the 
accompanying footnote, namely  Canada's observation in its third -party submission that " [i]f 
Article  XXVIII is being used, it is very likely that allocation under Article XIII will o ccur coincident 
with the establishment of a TRQ under Article XXVIII." However, in the light of China's comment, 
we have rephrased the wording of this sentence to clarify that the Panel is not making any factual 
finding on the frequency with which negotiat ions under Article XXVIII and XIII:2(d) occur 
simultaneously.  
6.33.  With reference to paragraphs 7.332 and 7.333 , China requests the Panel to clarify why 
the fact that the import restrictions may have included WTO -inconsistent measures in EEC – 
Apples (Chile I)  or the fact that import restrictions in the form of WTO -consistent SPS measures WT/DS492/R  
 
- 30 - 
 
  "has any link with the assessment of whether a representative period was selected". China notes 
that, as mentioned by the Panel, Article XIII:2(d) does not have a qualificatio n of "discriminatory 
quantitative restrictions" and hence, whether or not the import restrictions are discriminatory or 
not or whether they are WTO -consistent or not, has no relevance in the view of China. The 
European Union does not comment on China's req uest. We consider that although the WTO -
consistency of any import restrictions in place during a period selected is not a decisive factor for 
the purpose of determining whether that period is "representative", it is a relevant consideration. 
Therefore, we have clarified this point in paragraph 7.333.  
6.34.  China also requests that the Panel clarify its analysis in paragraph 7.337 , as China does 
not see the link that the Panel attempts to establish between the fact that the objective of the EU 
measures was to mak e sure that domestic and foreign suppliers respect the same sanitary 
requirements, and the issue of whether these SPS measures are "special factors" or not. The 
European Union considers that "unless a measure is WTO inconsistent or it can be said to be out of 
the ordinary, unusual, exceptional for some other reasons, than it cannot be characterised as a 
special factor". The European Union recalls the dictionary definition of "special": "Of an abstract 
concept, immaterial thing, etc.: out of the ordinary, un usual; exceptional in quality or degree" or 
"Of a material thing, event, etc.: out of the ordinary; excelling in some (usu. positive) quality". We 
have clarified this point in paragraph 7.337 in the light of China's comment.   
6.35.  China requests clarification o f the Panel's suggestion in paragraph 7.350  that the 
consideration of "special factors" would be redundant if a TRQ allocation must as a rule always be 
based on a representative period immediately preceding the opening of the TRQ. In this regard, 
China sub mits that the determination of "a previous representative period" and of "special factors" 
are separate determinations and it must be determined whether a previous representative period 
was affected by special factors. In China's view, there is "no automat ism between a period 
preceding the allocation of the TRQ and the existence of special factors". The European Union does 
not comment on China's request. We did not intend to suggest that consideration of "special 
factors" would be redundant if a TRQ allocat ion must as a rule always be based on a 
representative period immediately preceding the opening of the TRQ. In order to clarify that our 
interpretation of the terms "special factors" in Article XIII:2 does not rest on that premise, we 
have modified  this pa ragraph in the light of China's comment .   
6.7  Claims under the chapeau of Article XIII:2 of the GATT 1994  
6.36.  The European Union observes that paragraphs 7.313, 7.379, and 7.388 all convey the idea 
that the Panel's findings in relation to China's claims under the  chapeau of Article XIII:2 are made 
in the alternative to the findings that the panel reached (in the first place) on China's claims under 
Article XIII:2(d). However, the European Union considers that when one reads the finding of the 
Panel in paragraph 7. 406 and the conclusion in paragraph 8.1(e) , that idea is not clearly 
conveyed. For the sake of clarity, the European Union suggests that the Panel recall in 
paragraph  7.406 and again in the conclusion in paragraph 8.1(e) that those findings and 
conclusion are made in the alternative to the findings concerni ng China's claims under 
Article  XIII:2(d), i.e. they are relevant to the extent that the conclusion reached by the panel in 
paragraph 7.378 and recalled in paragraph 8.1(d) would be incorrect. The Europea n Union submits 
in this regard that if the Panel is right in concluding that the European Union violated 
Article  XIII:2(d) by not recognising China as a Member holding a substantial interest in supplying 
the products under tariff lines 1602 39 29 and 1602 39 80 and by failing to seek agreement with 
China, then the European Union cannot be faulted at the same time for not having allocated a 
greater "all others" share under the same tariff lines. China sees no reason to make the 
amendments requested by the Eu ropean Union, "precisely because the Panel's findings and 
conclusions are clear". We consider that our findings and conclusions are sufficiently clear, and we 
therefore see no need to amend these paragraphs as suggested by the European Union.  
6.37.  The European Union notes that paragraph  7.409  states that "… establishing an 'all others ' 
share in a TRQ without regard to the actual import shares held over a previous representative 
period would, unless agreed by all substantial suppliers, be at odds with the general  rule that TRQ 
shares should be allocated in a way that approaches 'as closely as possible the shares which the 
various Members might be expected to obtain in the absence of such restrictions '." The European 
Union observes, however, that in the Panel's vie w the general rule of the chapeau of Article XIII:2 
applies also when allocation of the TRQ is agreed with all substantial suppliers. Accordingly, the 
European Union suggests that the Panel qualify the phrase "unless agreed by all substantial WT/DS492/R  
 
- 31 - 
 
  suppliers" or  delete it altogether. The European Union notes that this applies mutatis mutandis  to 
paragraph 7.418 . China does not comment on the European Union's suggestion. We have 
deleted the reference to "unless agreed by all substantial suppliers" in paragraphs 7. 409 and 
7.418.   
6.38.  With respect to paragraph 7.418 , China notes the Panel's assessment that nowhere in the 
statements invoked by China from EC – Bananas III  did the Panel or the Appellate Body mention 
or imply the obligation to reserve a share in the TRQ to "all other" suppliers of any specific 
magnitude. However, China states that "the issue that China brought up is not about the specific 
magnitude of the share" reserved for "all others", but rather "the fact that there should not be a 
permanent allocation o f tariff rate quotas". The European Union comments that China "again tries 
to alter the claim it presented during the Panel proceedings, by arguing that it did not bring up the 
issue of a minimum size of the TRQ share to be allocated to 'all others '. Howev er, this was 
precisely one of China's claims (see para. 7.407 which contains a reference to China's submissions 
and it is not contested by China) which was discussed at length during the Panel's meetings with 
the parties." Moreover, the European Union cons iders that the Panel has also adequately 
addressed China's argument that without a minimum "all others" share the TRQs allocation would 
be frozen (see paragraph 7.419). Therefore, the European Union considers that whilst objectively 
speaking there is no ne ed to amend this point of the panel interim report, it does not oppose any 
clarification that the Panel may consider appropriate in this respect. We have rephrased paragraph 
7.418 in the light of China's comment.  
6.39.  China asks the Panel to revise paragraph 7 .419, which states in relevant part: "As the 
European Union observes, the objective of preventing a long -term freeze of the allocation cannot 
necessarily be prevented by reserving a given share to 'all others ' in the TRQ, but may instead 
require other mean s, such as setting a time limit to the validity of the allocation (or a periodic 
review thereof). As we explained elsewhere in our Report, China's response to this argument was 
to claim that the European Union violated Article XIII:1 and XIII:2 by failing to annually review 
and reallocate the TRQ shares based on the most recent trade developments." Specifically, China 
requests the deletion of the final sentence. China submits that, as noted above in the comments 
made with regard to paragraphs  7.136 and 7.13 7, China's arguments in respect of the subsequent 
allocation by the E uropean Union of the TRQs "were not in response to the EU's relevant 
argument". The European Union responds that, for the same reasons explained above concerning 
China's comments to parag raphs 7.136 and 7.137, the European Union does not agree with 
China's request to delete the last sentence of this paragraph. However, the European Union adds 
that "it could be helpful if the Panel referred to the precise points of China's submissions where  
this claim is presented as a response to the European Union's argument", including paragraph 102 
of China's first oral statement (reference is also made in this connection to the EU second written  
submission, para. 144) . We decline China's request to dele te this sentence. As noted above, it sets 
forth an objective description of the evolution of China's claims and argumentation during these 
proceedings. The basis for that description is our analysis of the panel request and the subsequent 
argumentation pre sented by China in the course of these proceedings. We have added an 
additional reference to China's submissions to sustain the conclusion presented.   
6.8  Claims under Article XIII:1  of the GATT 1994  
6.40.  Regarding the discussion of China's claim under Article XIII :1 (paragraphs 7.422 -7.437 ), 
China submits that the Panel's analysis on Article XIII:1 is incomplete "inasmuch as it does not 
address the arguments that China advanced in its response to the Panel's question 64(b) and in 
particular to the section on Articl e XIII:1 therein". China recalls that it "raised therein the 
arguments and examples of an allocation of shares in a TRQ that would meet the requirements of 
Article XIII:2(d) but still violate Article XIII:1". China requests the Panel to also "complete its 
analysis" on this point. The European Union states that it does not understand the purpose of 
China's request to the Panel to examine the two abstract examples it fo rmulated in its response to 
Panel question No. 64(b). Moreover, the European Union states t hat those two examples have 
nothing to do with the facts of the present case, so it is really hard to grasp their relevance for 
solving the present dispute. The European Union observes that "China itself, also in its comments 
on the interim report, is unab le to explain the relevance of those examples for the present dispute 
and it does not suggest how any possible position that the Panel might take in replying to them 
would impact on its findings". In these circumstances, the European Union believes that th e 
Panel's thorough analysis contained in this section is complete as it addresses all the arguments 
raised by the parties "that are objectively relevant to respond to the claim raised by China". We WT/DS492/R  
 
- 32 - 
 
  note that our findings summarize the parties' arguments to  the extent necessary to facilitate 
understanding of our own assessment and reasoning, and do not aim to fully reproduce the 
parties' arguments as set forth in their submissions. We consider that paragraph 7.435 provides an 
adequate exposition of China's a rgumentation on the relationship between Article XIII:1 and 
Article XIII:2.  
6.41.  Regarding paragraph 7.434 , China requests the Panel to modify the statement that "[a]ll 
of China's argumentation under Article XIII:1 relates to the amount of the TRQ shares alloc ated to 
'all others '". In this regard, China recalls that it also claims that the European Union acted 
inconsistently with Article XIII:1 "by allocating country -specific shares only to Brazil and/or 
Thailand but not to China which was also a substantial su pplier". Reference is made to 
paragraph  127 of China's second written submission, and to the fact that the Panel itself also 
acknowledges this at paragraph 7.423 of its Interim Report. The European Union does not 
comment on China's request. We have revised  the wording of this paragraph in the light of China's 
comment.  
6.9  Claims under Article I:1 of the GATT 1994  
6.42.  Regarding paragraph 7.448 , China requests the Panel to clarify why it surmises from 
China's response to the Panel's question 59(c) that whether a TRQ  allocation is "disproportionate" 
under Article I:1 is to be assessed on a basis that is different from the TRQ rules set forth in 
Article  XIII:2. In this respect, China notes that "all China stated was that its claim under Article I:1 
does not depend on t he outcome of claims under Article XIII or XXVIII". And in support, China 
referred to paragraph 344 of the Appellate Body's decision in EC – Bananas III (Article 21.5 – 
Ecuador II)  in which it is stated that the ACP duty -free quota is not a limitation on a  tariff 
preference that is subject only to Article I:1 but a tariff quota subject also to Article XIII. In 
addition, China observes that the Panel claims that China has not elaborated its argument that the 
TRQ allocation to Brazil and Thailand is "dispropo rtionate". China nevertheless refers to its 
response to Panel question No. 59 and to paragraph 207 of its second written submission and 
requests the Panel to take this into account. According to the European Union, China's comments 
"appear to be the result  of a hasty reading of the interim report". The European Union notes that 
the Panel's reasoning is explained in clear terms in this paragraph, and China's arguments 
(developed in Panel question 59 and in paragraph 207 of its second written submission) are 
properly summed up in this section of the interim report. Accordingly the European Union does not 
see the need to amend this paragraph of the interim report. We consider that paragraph 7.448 
already sets forth the basis upon which "it might be surmised" th at, in China's view, whether a 
TRQ allocation is "disproportionate" under Article I:1 is to be assessed on a basis that is different 
from the TRQ allocation rules set forth in Article XIII:2.  In addition, having reviewed China's 
response to Panel question  No. 59 and to paragraph 207 of its second written submission, we still 
do not find any additional substantial elaboration of its argument beyond stating that the TRQ 
allocation is "disproportionate". Accordingly, we have not revised paragraph 7.448.  
6.43.  Regarding paragraph 7.449 , China requests the Panel to add ", while other substantial 
suppliers such as China are not" at the end of the first sentence to accurately reflect China's 
arguments as acknowledged by the Panel at paragraph 7.438 of the Report. The E uropean Union 
does not comment on China's request. We have adjusted the wording of this paragraph, as 
requested by China. We have also added an accompanying citation to paragraph 208 of China's 
second written submission.  
6.10  Claims under Article XIII:4 of the  GATT 1994  
6.44.  The European Union considers that given that import figures postdating December 2013 are 
irrelevant for the present dispute, they should be deleted from the tables contained in the panel 
report ( paragraph 7.466 ). China objects to such deletion, and observes that these import figures 
were provided in response to questions from the Panel; they are part of the record and should, as 
a result, remain in the tables contained in the report to accurately reflect the data supplied by 
China and the Europea n Union. We note that our findings under Article XIII:2 and XIII:4 are not 
based on import statistics post -dating December 2013. However, we do not see why it follows that 
those figures should be deleted from the tables contained in the panel report.  Accor dingly, we 
have not deleted the data from the tables.  WT/DS492/R  
 
- 33 - 
 
  6.45.  Regarding paragraph 7.491 , China notes the Panel's statement th at "China's request to 
enter into consultations under Article XIII:4 does not contain a reference to the specific tariff lines 
upon which i ts request is based." China observes that the request to enter into consultations is 
contained in Exhibit CHN -39. The Note Verbal e refers to Council Regulation (EC) No. 1218/2012, 
through which a new tariff regime on the tariff items concerned had been ado pted. In the Note 
Verbal e, China referred to "the tariff lines" concerned, as the tariff lines that were affected by 
Council Regulation (EC) No. 1218/2012. China submits that it was therefore abundantly clear to 
the European Union, on 19 December 2013, tha t China had requested to enter into consultations 
on all the tariff lines affected by Council Regulation (EC) No. 1218/2012. China requests the Panel 
"to clarify whether its analysis took into account the fact that Exhibit CHN -39 contains an explicit 
reference to the document containing information on the tariff lines that China sought to consult 
on". Moreover, if the Panel confirms that it took Exhibit CHN -35 into account in its analysis, China 
requests the Panel "to clarify whether it considers that the r equest to enter into consultations 
under Article XIII:4 itself should contain an explicit reference to the relevant tariff lines and 
whether a reference to the document directly implementing the changes to those tariff lines is 
insufficient". The European Union states that China "tries once again to amend its arguments and 
claim at this stage of the proceedings". The European Union observes that "the interim report 
recalls, in its comments to the EU response to question 123 of the panel, China recognised th at its 
request was addressing tariff lines 1602 39 29 and 1602 39 85". The European Union observes 
that now China argues instead that the European Union should have understood that its request 
was addressing all of the tariff lines concerned by Council Reg ulation (EC) No. 1218/2012, because 
its Note Verbal e contains a cross reference to that Regulation. Hence, the European Union 
considers that not only is China trying to reargue the case by attempting to amend its claim", but 
it is also explicitly admitting  that its request to enter into consultations with the European Union 
under Article XIII:4 did not identify "in a clear and unequivocal manner the specific tariff line(s) 
upon which that request was based, as in order to guess what those tariff lines are o ne should 
refer to other documents mentioned in that request". Furthermore, the European Union observes 
that as recalled by the Panel in paragraph 7.492, in its Note Verbal e China claimed to have "a 
substantial supplying interest in several  of the tariff i tems concerned" by Council Regulation (EC) 
No. 1218/2012 (emphasis added). Therefore, the European Union submits that "this Note Verbal e 
made clear one thing only i.e. that China did not claim an SSI on all the tariff lines concerned by 
Council Regulation (EC) No. 1218/2012, but on several of those tariff lines, without specifying 
which ones". The European Union states that this "contradicts openly" China's new argument to 
the effect that it was abundantly clear to the European Union, on 19 of December 2013 , that China 
had requested to enter into consultations "on all the tariff lines affected by that Regulation". We 
have adjusted paragraphs 7.491 and 7.492 in the light of the parties' comments.   
6.46.  Regarding paragraph 7.492 , China observes that the Panel cont inues its analysis by 
observing that China took an "all inclusive" approach with respect to its claims of interest in 
supplying the products covered by the First and Second Modification Packages. China requests the 
Panel to clarify its understanding of an "all inclusive" approach, which the Panel refers to again in 
the eighth sentence of this paragraph. China also requests the Panel to clarify how a WTO Member 
can ensure that it meets the Panel's proposed standard of "specificity" regarding which tariff lin es 
and special factors were concerned, other than by referring to the very document that 
implemented the changes to the tariff regime. We have adjusted paragraph 7.492 to clarify what 
we mean by an "all inclusive" approach. We have also revised paragraph 7 .492 to clarify that there 
is no general standard of "specificity" that we are reading into Article XIII:4.    
6.11  Claims under Article II:1 of the GATT 1994  
6.47.  China observes, in relation to paragraph 7.527 , that WTO Members and in particular the 
European Union distinguish between the "entry into force" and the "application" of legal 
instruments, with the entry into force being capable of preceding the application by several years. 
China respectfully requests the Panel "to consider this in the context of its anal ysis in 
paragraph  7.527 and to determine whether and how this impacts its analysis". The European 
Union does not comment on China's request. We have considered the distinction referred to by 
China, but we do not see how it impacts on our analysis in paragr aph 7.527 or this section more 
generally. Accordingly, we have made no change as a consequence of China's comment.  WT/DS492/R  
 
- 34 - 
 
  7  FINDINGS  
7.1  General  
7.1.1   General overview of China 's claims and horizontal arguments  
7.1.  This section aims to provide a general overview of several horizontal arguments that underlie 
China 's claims in this dispute. The measures at issue, and the distinct claims that China advances, 
are elaborated in greater detail in the subsequent sections of this Report.  
7.2.  The claims brought by China concern the modifi cation by the European Union of bound duties 
inscribed in its Schedule of concessions on certain poultry products pursuant to negotiations with 
Brazil and Thailand held under Article XXVIII:5 of the GATT 1994. A first negotiation exercise (the 
"First Modif ication Package "), which was initiated in 2006 and sa w the negotiations concluded 
in 2006, resulted in the European Union replacing its ad -valorem duties with tariff  rate quotas 
(TRQs) on poultry products classified under three tariff items. A second negot iation exercise (the 
"Second Modification Package "), which was initiated in 2009 and according to the European Union 
concluded at negotiators ' level in late -201118, resulted in the European Union replacing its ad -
valorem bound duties with TRQs for poultry p roducts classified under seven other tariff items.  
7.3.  In each negotiation exercise, the European Union determined that Brazil and Thailand were 
the only WTO Members that held a "principal supplying interest " or "substantial interest ", within 
the meaning of A rticle XXVIII:1, in any of the tariff concessions at issue and entered into 
negotiations under Artic le XXVIII:5 with these Members. The European Union based its 
determination of which Members held a principal or substantial supplying interest on actual imp ort 
data covering the three -years preceding the initiation of each of the two negotiation exercises (i.e. 
2003-2005 for the First Modification Package, and 2006 -2008 for the Second Modification 
Package). It is not in dispute that, during the reference peri ods selected  by the European U nion, 
imports of the poultry products concerned from China into the European Union were negligible.  
7.4.  Each of the TRQs agreed with Brazil and Thailand provides for an in -quota tariff at a rate that 
is equal to or lower than the European Union 's previously bound rate of duty, together with an out -
of-quota tariff rate that is in all cases higher than the European Union 's bound rate of duty before 
the modification. Under all of the TRQs resulting from the First Modification Package,  Brazil and/or 
Thailand are each allocated their own country -specific share, with an "all others " share set aside 
for all other countries. The situation is similar for all of the TRQs resulting from the Second 
Modification Package, whereby Brazil and/or Th ailand are each allocated their own country -specific 
share, with an "all others " share set aside for all other countries (except for one tariff line (HS1602 
3921) where there is no "all others " share and the entirety of the TRQ is allocated to Thailand ).  
The majority of each TRQ, and in some cases the vast majority (or all) of the TRQ, is allocated to 
Brazil and/or Thailand (the "all others " TRQ share is below 20% in all cases).  
7.5.  The total volume of each TRQ and the allocation of TRQ shares among supplying  countries 
was determined, with some exceptions, on the basis of actual import data for the three -year 
period preceding the initiation of each of the two negotiation exercises (i.e. 2003 -2005 for the First 
Modification Package19, and 2006 -2008 for the Secon d Modification Package). As noted above, 
during these reference periods, imports of the poultry products concerned from China into the 
European Union were negligible.  
7.6.  As elaborated in greater detail later in our Report, the European Union had applied sever al 
SPS measures throughout the period concerned by the two Article  XXVIII negotiations, i.e. 
2003-2008. Following a relaxation of the SPS measures by the European Union in July 2008, 
imports of heat treated poultry products from China into the European Uni on increased 
significantly under some of the tariff lines at issue. This increase was taking place while the 
European Union 's negotiations with Brazil and Thailand in relation to the Second Modification 
Package were still ongoing. The European Union did no t update the reference period selected for 
the purpose of determining which Members to negotiate with regarding the modification of its 
                                               
18 See footnote  128 below.  
19 EU's first written submission, para 32, page 9. In the case of the TRQs for tariff lines 0210 9939 and 
1602 3219, the European Union agreed, at the request of Brazil and Thailand, to use a different reference 
period. See paras . 33-35. WT/DS492/R  
 
- 35 - 
 
  concessions, or for the purpose of calculating the total volume of the TRQs or the respective TRQ 
shares allocated to di fferent countries. With respect to the TRQs under the Second Modification 
Package, the European Union made no adjustment to the TRQ allocations to reflect more recent 
data and the increase in China 's share of imports.   
7.7.  Against this background, China claim s that the European Union acted inconsistently with 
various articles of the GATT 1994 by basing the above determinations on actual import levels over 
the periods 2003 -2005 and 2006 -2008. China advances distinct claims of violation under 
Article  XXVIII:1, A rticle XXVIII:2 in conjunction with paragraph 6 of the Understanding on the 
Interpretation of Article XXVIII, Article XIII:1, the chapeau and paragraph (d) of Article XIII:2, 
Article XIII:4, Article II:1, and Article I:1. In these findings, the Panel will consider China 's claims 
and arguments on a provision -by-provision basis, so as to ensure that due account is taken of the 
applicable legal standard and subject -matter of each provision. However, there is significant 
degree of overlap in China 's argumentati on under these provisions, and many of its claims under 
these provisions rest on one or more of the same grounds. Therefore, it is helpful to provide an 
overview of three fundamental arguments that underlie China 's claims in this dispute. Each 
argument rel ates in one way or another to the European Union 's use of data regarding actual 
import levels over the periods 2003 -2005 and 2006 -2008.  
7.8.  First, China argues that the European Union was prohibited from basing its determinations on 
actual import levels durin g the periods 2003 -2005 and 2006 -2008 on the grounds that, throughout 
both of these periods, there were SPS measures in place that prohibited or significantly restricted 
the importation of poultry products from China into the European Union. According to C hina, the 
European Union was obligated to base its determinations under these provisions on either a 
different reference period, or on an estimate of the import shares that China would have had in the 
absence of those SPS measures. China argues that in det ermining the share that China would have 
had absent the import ban, the European Union  should have taken into account factors such as 
China 's production capacity and investment in the affected products, estimates of export growth, 
and forecasts of demand i n the European Union . China provides information on the level of its 
poultry exports before, during and after the ban, both to the European Union  and other countries, 
to support its contention that China could reasonably be expected to have had a significa nt share 
of the EU market in the absence of the SPS measures that were in place. China claims that by not 
basing its determinations under these provisions on an estimate of the import shares that China 
would have had in the absence of those SPS measures, t he European Union violated 
Article  XXVIII:1, Article XXVIII:2 read in conjunction with paragraph 6 of the Understanding, 
Article XIII:1, and the provisions of Article XIII:2.  
7.9.  Second, China argues that the European Union was required to use the most recent  reference 
period of 2009 -2011 as the basis for its determinations in the context of the Second Modification 
Package . As noted above, the negotiations under the Second Modification Package were initiated in 
2009, but did not conclude at the negotiators ' level until September 2011, according to the 
European Union, and the completion of the negotiations was not notified to the WTO until 
December 2012. During that period, China 's share of imports under several tariff lines increased 
following the relaxation of  the SPS measures. China submits that the European Union was under 
an obligation to base its determinations on the most recent three -year period preceding the 
conclusion of the negotiations (2009 -2011), not the three -year period preceding the initiation of  
the negotiations (2006 -2008). China claims that by not doing so in respect of its initial TRQ 
allocations, the European Union violated Article XXVIII:1, Article XXVIII:2 read in conjunction with 
paragraph 6 of the Understanding, and Article XIII:2 (d) and the chapeau of A rticle XIII:2 . China 
further claims that by subsequently making no adjustment to the TRQ allocation following  a 
request for reappraisal by China in 2013, the European Union violated Article XIII:4.  
7.10.  Third, China argues that the European Uni on was obligated to set aside an "all others " share 
of at least 10% when allocating the TRQs among supplying countries, regardless of the actual level 
of imports and whatever the reference period selected. According to China, the amount set aside 
for "all others " must be sufficient to allow at least one other Member going forward to achieve a 
substantial interest as a supplier of the products subject to the TRQs. In this case, the European 
Union recognised Members as holding a substantial supplying interest  if they accounted for 10% 
share of imports in the tariff line concerned. Accordingly, China claims that by not setting aside an 
"all others " rate of at least 10% within each TRQ, the European Union violated Article XIII:1 and 
Article XIII:2.  WT/DS492/R  
 
- 36 - 
 
  7.11.  In addition to these three horizontal arguments, China advances various additional claims 
and arguments under Article XXVIII:2 read in conjunction with paragraph 6 of the Understanding, 
Article XIII:1, Article II:1, and Article I:1. These are elaborated in the context  of analysing China 's 
claims under those provisions.  
7.1.2   Order of analysis  
7.12.  A panel enjoys a degree of discretion to structure the order of its analysis as it deems 
appropriate.20 In exercising that discretion, a panel may decide to follow, but is not bound by,  the 
manner in which the complainant presented its claims.21  
7.13.  We begin by examining China 's claims that the European Union violated Article XXVIII:1 by 
failing to recognize China as a Member with a principal or substantial supplying interest for 
purposes of  the negotiations under Article XXVIII. We then examine China 's claims that the 
compensation provided by the European Union, including the total amount of the TRQs and their 
allocation among supplying countries, is inconsistent with Article XXVIII:2 read i n conjunction with 
paragraph 6 of the Understanding on the Interpretation of Article XXVIII.  
7.14.  We will then examine China 's claims under Article XIII regarding the European Union 's 
allocation of TRQs among supplying countries. We first consider China 's clai ms under the 
provisions of Article XIII:2, as both parties agree that Article XIII:2 refers specifically to the 
allocation of TRQs.22 After addressing China 's claims regarding the initial TRQ allocation under the 
provisions of Article XIII:2(d) followed by China 's claims under the chapeau of Article XIII:2, we 
will then proceed to address China 's claims regarding the initial TRQ allocation under Article XIII:1 
and Article I:1. After we have addressed China 's claims regarding the initial TRQ allocation, we wi ll 
then turn to China 's claim that, following the entry into force of the TRQs under the Second 
Modification Package, the European Union violated Article XIII:4 by failing to enter into meaningful 
consultations with China regarding the need for an adjustme nt of the TRQ shares allocated among 
supplying countries.  
7.15.  Finally, we address China 's claims that the European Union violated Article II:1 by applying 
the modifications agreed in the Article XXVIII negotiations prior to those changes being 
incorporated in to the text of its Schedule of concessions through the certification process.  
7.1.3   Function of the Panel  
7.16.  According to Article 11 of the DSU, the function of a panel is "to assist the DSB in 
discharging its responsibilities under this Understanding and the cov ered agreements. " The same 
Article provides that a panel is to make an "objective assessment of the matter before it ", 
including :  
[A]n objective assessment of the facts of the case and the applicability of and 
conformity with the relevant covered agreemen ts, and make such other findings as 
will assist the DSB in making the recommendations or in giving the rulings provided 
for in the covered agreements.  
7.17.  Regarding the requirement to conduct an "objective assessment " of the facts, the Appellate 
Body has state d that it is not for panels to undertake a de novo  review, nor to show 
total deference to the findings of the national authorities.23 On the specific subject of the 
assessment of evidence, the Appellate Body has stated that:  
[I]n accordance with Article 11 of the DSU, a panel is required to "consider all the 
evidence presented to it, assess its credibility, determine its weight, and ensure that 
its factual findings have a proper basis in that evidence ". It must further provide in its 
report "reasoned and ade quate explanations and coherent reasoning " to support its 
findings. Within these parameters, "it is generally within the discretion of the [p]anel 
                                               
20 Appellate Body Report, Colombia – Textiles , para. 5.20.  
21 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 277. See, e.g., Panel Report, US 
– Large Civil Aircraft (2nd complaint) , footnote 1005.  
22 See e.g. China's response to Panel question No. 29(b), para. 147.  
23 Appellate Body Report, EC – Hormones , para. 117.  WT/DS492/R  
 
- 37 - 
 
  to decide which evidence it chooses to utilize in making findings ". Although a panel 
must consider evidence b efore it in its totality, and "evaluate the relevance and 
probative force " of all of the evidence,  a panel is not required "to discuss, in its report, 
each and every piece of evidence " put before it, or to "accord to factual evidence of 
the parties the sam e meaning and weight as do the parties ".24 (footnotes omitted)  
7.18.  A panel 's obligation to make an objective assessment of the matter also refers to the legal 
assessment, that is, the analysis of the consistency or inconsistency of the challenged measures 
with the applicable provisions.25 To that end, a panel is free "to use arguments submitted by any 
of the parties – or to develop its own legal reasoning – to support its own findings and conclusions 
on the matter under its consideration. "26 
7.1.4   Interpretation of the GATT 1994  
7.19.  Article 3.2 of the DSU states that the WTO dispute settlement system serves to "clarify the 
existing provisions of those agreements in accordance with customary rules of interpretation of 
public international law ". The "customary rules of interpr etation of public international law " 
referred to by the DSU include Articles 31, 32 and 33 of the Vienna Convention on the Law of 
Treaties (the Vienna Convention).   
7.20.  Article 31(1) of the Vienna Convention provides that "[a] treaty shall be interpreted in g ood 
faith in accordance with the ordinary meaning to be given to the terms of the treaty in their 
context and in the light of its object and purpose ".27 It is well established that a treaty interpreter 
must "read all applicable provisions of a treaty in a w ay that gives meaning to all of them, 
harmoniously ".28 
7.21.  Under the terms of Article 31(2) of the Vienna Convention, the context for the purpose of 
the interpretation of a treaty shall comprise the text of the relevant agreement, including its 
preamble and ann exes, along with agreements or instruments made in connection with the 
conclusion of the treaty. The text of the GATT 1994 includes not only the articles contained 
therein, but also the Ad Notes contained in Annex I of the GATT. In this connection, we reca ll that 
the articles of the GATT and the accompanying Ad Notes "have equivalent treaty status in that 
both are treaty language which was negotiated and agreed at the same time ", and that they must 
"be read together in order to give them proper meaning ".29 By virtue of paragraph 1(c)(vi) of the 
GATT 1994, the Understanding on the Interpretation of Article XXVIII of the GATT 1994 (the 
Understanding) is also an integral part of the GATT 1994. Thus, there can be no question that 
Article XXVIII of the GATT 1994, and any related provisions, must be interpreted harmoniously 
with the relevant Ad Note s and the Understanding.  
7.22.  In their submissions, the parties have referred to the Procedures for Negotiations under 
Article XXVIII30 and the Procedures for Modification and  Rectification of Schedules.31 Both of these 
procedures were adopted in 1980, in the context of the GATT 1947. In these proceedings, diverse 
views have been presented by the parties and third parties on the proper legal characterization of 
these procedures.  However, it is common ground between the parties and third parties expressing 
                                               
24 Appellate Body Reports, US – COOL , para. 299.  
25 Appellate Body Report, EC – Hormones , para. 118.  
26 Appellate Body Report, EC – Hormones , para. 156.  
27 With respect to good faith, the Appellate Body has indicated that "[t]hat means, inter alia , that terms 
of a treaty are not to be interpreted based on t he assumption that one party is seeking to evade its obligations 
and will exercise its rights so as to cause injury to the other party" (Appellate Body Report, US – Anti-Dumping 
and Countervailing Duties (China),  para. 326).  
28 Appellate Body Report, Korea – Dairy , para. 81.  
29 Appellate Body Report, Japan – Alcoholic Beverages II , p. 24.  
30 Procedures for Negotiations under Article XXVIII, adopted by the Council on 10 November 1980, 
C/113 and Corr. 1, BISD 27S/26 -29. 
31 Decision of 26 March 1980, Procedures fo r Modification and Rectification of Schedules of Tariff 
Concessions, GATT document L/4962, BISD S27/25  WT/DS492/R  
 
- 38 - 
 
  a view on the matter that, at a minimum, both procedures qualify as "decisions ", "procedures " or 
"customary practices " within the meaning of Article XVI:1 of the WTO Agreement.32  
7.23.  Article XVI:1 instructs that:  
Except as otherwise provided under this Agreement or the Multilateral Trade 
Agreements, the WTO shall be guided by the decisions, procedures and customary 
practices followed by the CONTRACTING PARTIES to GATT 1947 and the bo dies 
established in the framework of GATT 1947.  
7.24.  The Appellate Body has stated that "Article XVI:1 of the WTO Agreement … bring[s] the 
legal history and experience under the GATT 1947 into the new realm of the WTO in a way that 
ensures continuity and consis tency in a smooth transition from the GATT 1947 system ", and 
"acknowledges the continuing relevance of that experience to the new trading system served by 
the WTO".33 
7.25.  We agree with the parties and third parties that both sets of procedures qualify as 
"decisions", "procedures " or "customary practices " within the meaning of Article XVI:1 of the WTO 
Agreement. First, we see no basis to question that these procedures qualify either as "decisions ", 
"procedures " or "customary practices " within the meaning of Artic le XVI:1 of the WTO Agreement. 
Second, it is clear that both sets of procedures were  "followed by the CONTRACTING PARTIES to 
GATT 1947 and the bodies  established in the framework of GATT 1947 " since their adoption in 
1980. Third, neither the WTO Agreement nor the GATT 1994 made provision for any new 
procedures to supersede the se procedures. To the contrary, the Procedures for Negotiations under 
Article XXVIII continue to serve as the basis for all negotiations under Article XXVIII.34 These same 
procedures ar e expressly referred to, in whole or in part, in several WTO instruments.35 The 
Procedures for Modification and Rectification of Schedules continue to apply under the WTO as 
well. This is evidenced, inter alia, by the fact that they have been applied in sev eral prior disputes 
by WTO panels and the Appellate Body.36 
7.26.  Article XVI:1 states that "the WTO " shall be guided by the decisions, procedures and 
customary practices followed by the CONTRACTING PARTIES to GATT 1947 and the bodies  
established in the framework  of GATT 1947.  This reference to the WTO would include the Dispute 
Settlement Body, and we therefore see no reason why the sphere of application of Article XVI:1 
would not extend to a dispute settlement panel. Accordingly, we consider that we are under a d uty 
("shall be guided by ") to take account of these procedures in our interpretation of the relevant 
provisions of the GATT 1994.  
7.27.  In this case, diverse views have been presented on whether one or both of these procedures 
might additionally be characterize d as "decisions of the CONTRACTING PARTIES to GATT 1947 " 
within the meaning of paragraph 1(b)(iv) of the GATT 199437, as a "subsequent agreement 
                                               
32 China's response to Panel question No. 10, paras. 62, 70; EU's response to Panel question No. 10, 
para. 33. In response to Panel question No. 1 to the third parties, Argentina, Brazil, Canada, Russia, and 
Thailand expressed the view that both procedures fall within the scope of Article XVI:1 of the WTO Agreement.  
33 Appellate Body Report, Japan— Alcoholic Beverages  II, p. 14.  
34 EU's first written submissi on, para. 99.  
35 For example, see paragraphs 2 and 5 of the Understanding on the Interpretation of Article XXVIII; 
paragraph 4 of the Understanding on the Interpretation of Article XXIV; paragraph 6 of the Marrakesh Protocol 
to the GATT 1994; and the decisi ons adopted by the General Council for introducing Harmonized System 
changes into the Schedules (i.e. the Decision of 30 November 2011, WT/L/831, footnote 3; the Decision of 18 
July 2001, WT/L/407, footnote 10; the Decision of 15 December 2006, WT/L/673, f ootnote 4).  
36 For example, see Panel Report, Russia – Tariff Treatment , para. 7.52; Panel Report, EC – Bananas III 
(Article 21.5 – Ecuador II) , para. 7.452; Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / 
EC – Bananas III (Article 21 .5 – US), para. 451.  
37 China considers that the Procedures for Negotiations under Article XXVIII do not fall within the scope 
of paragraph 1(b)(iv) of the GATT 1994, whereas the Procedures for Modification and Rectification of Schedules 
do fall within the scope of paragraph 1(b)(iv) of the GATT 1994 (China's response to Panel question No. 10, 
paras. 61, 64 -70). The European Union considers that neither of these procedures falls within the scope of 
paragraph 1(b)(iv) (EU's response to Panel question No. 10, paras. 34 -39, and to No. 102(b)). In response to 
Panel question No. 1 to the third parties, Argentina and the United States expressed the view that both 
procedures fall within the scope of paragraph 1(b)(iv) of the GATT 1994; Canada and Russia expressed th e 
view that the Procedures for Negotiations under Article XXVIII do not, whereas the Procedures for Modification WT/DS492/R  
 
- 39 - 
 
  between the parties regarding the interpretation of the treaty or the application of its provisions " 
within the meaning of Article 31(3)(a) of the Vienna Convention, or form the basis for "subsequent 
practice in the application of the treaty which establishes the agreement of the parties regarding 
its interpretation " within the meaning of Article 31(3)(b) of the Vie nna Convention.38 Recalling that 
there is no disagreement that both procedures fall within the scope of Article XVI:1 of the WTO 
Agreement, and thus no disagreement that the Panel should take them into account in its 
examination of China 's claims under the GATT 1994, we see no need to decide on whether any of 
the foregoing may constitute additional legal justifications for taking the two procedures into 
account.39 We note that there have been several prior cases in which panels and the Appellate 
Body referred  to these procedures without elaborating on their legal status.40   
7.28.  We recall that Article 32 of the Vienna Convention provides that recourse may be had to 
supplementary means of interpretation, including the "preparatory work " of the treaty and "the 
circum stances of its conclusion ", in order to confirm the meaning resulting from the application of 
Article 31, or to determine the meaning when the interpretation according to Article 31 leaves the 
meaning ambiguous or obscure, or leads to a result that is mani festly absurd or unreasonable.41 
The Appellate Body has stressed that Article 32 does not define exhaustively the supplementary 
means of interpretation, so that an interpreter has a certain degree of flexibility in considering 
relevant supplementary means i n a given case so as to assist in ascertaining the common 
intentions of  the parties.42 
7.1.5   Burden of proof  
7.29.  The DSU does not contain any express provision governing the burden of proof. However, 
by application of general principles of law the WTO dispute settlem ent system has recognized that 
the burden of proof lies with the party asserting a fact, whether that party is the complainant or 
the responding Member.43 
7.30.  The burden of proving that a challenged measure is inconsistent with the relevant provisions 
of the co vered agreements lies with the complaining party. Once the complaining party has made 
a prima facie  case of such inconsistency, the burden shifts to the defending party, which must then 
refute the alleged inconsistency.44 Precisely how much and precisely wh at kind of evidence will be 
                                                                                                                                               
and Rectification of Schedules do; Thailand expressed the view that neither of the procedures falls within the 
scope of paragraph 1(b)(iv).  
38 China considers that both procedures constitute "subsequent agreements" within the scope of Article 
31(3)(a) of the Vienna Convention (China's response to Panel question No. 10, paras. 63, 71). The European 
Union considers that it is "debatable whether they  can be regarded as a 'subsequent' agreement within the 
meaning of Article 31(3)(a)" of the Vienna Convention, and that "[g]iven that, in any event, the Procedures fall 
clearly within the scope of Article XVI:1 of the WTO Agreement, it seems that the Panel  need not reach this 
issue" (EU's response to Panel question No. 102(c) , para. 74 ). Without reference to Article 31(3)(b) of the 
Vienna Convention, the European Union observes in respect of the Procedures for Negotiations under Article 
XXVIII that "[a]ll r enegotiations under Article XXVIII are now being conducted under those procedures" (EU's 
first written submission, para. 99).  
In response to Panel question No. 1 to the third parties, Argentina and Thailand expressed the view that 
neither of the procedures  falls within the scope of Article 31(3)(a) or 31(3)(b) of the Vienna Convention; 
Canada expressed the view that the Procedures for Negotiations under Article XXVIII constitute a subsequent 
agreement in the context of Article 31(3)(a) of the Vienna Convent ion, and that because Members have 
followed the Procedures "they have created a significant body of subsequent acts that Canada submits 
constitute subsequent practice" under Article  31(3)(b) of the Vienna Convention; Russia stated that the 
Procedures for M odification and Rectification of Schedules may constitute a "subsequent agreement" within the 
meaning of Article 31(3)(a) or (b) of the Vienna Convention.  
39 If a claim of violation of either of these procedures was properly before the Panel, it would then be 
necessary to resolve whether either of these procedures is part of a "covered agreement" as defined in 
Appendix 1 to the DSU. To resolve that issue, we would need to arrive at a conclusion as to whether either of 
these procedures are "decisions of the C ONTRACTING PARTIES to GATT 1947" within the meaning of 
paragraph 1(b)(iv) of the GATT 1994. However, for the reasons set out further below in  section 7.3.3.1, we do 
not consider any such claim to be properly before the Panel in this case.  
40 See footnote  36.  
41 Appellate Body Report, EC – Chicken Cuts , para. 282.  
42 Appellate Body Report, EC – Chicken Cuts , para. 283.  
43 Appellate Body Report, US – Wool Shirts and Blouses , pp. 12 -16. 
44 Appellate Body Report, EC – Hormones, para. 9 8. WT/DS492/R  
 
- 40 - 
 
  required for the complaining party to establish its case will necessarily vary from measure to 
measure, provision to provision and case to case.45 In any event, it should be borne in mind that:  
A prima facie  case must be based on  "evidence and legal argument " put forward by 
the complaining party in relation to each of the elements of the claim. A complaining 
party may not simply submit evidence and expect the panel to divine from it a claim 
of WTO -inconsistency. Nor may a complain ing party simply allege facts without 
relating them to its legal arguments.46  
7.31.  In the matter before us, the burden is on China to persuade the Panel that the measures at 
issue are inconsistent with the provisions of the GATT 1994 allegedly violated.  
7.32.  In thi s dispute, China claims that all ten of the TRQs arising from the First and Second 
Modification Packages are inconsistent with the GATT 1994 and for that reason, in order to meet 
its burden of proof, China is required to prove its claims in respect of each  of the TRQs at issue. 
The European Union requests the Panel to make, "in respect of each claim, a separate finding with 
regard to each of the TRQs at issue ".47 By this, we understand the European Union to mean that 
"China should not be allowed to make its case in respect of a TRQ on the basis of argument or 
evidence pertaining to another TRQ ".48 We do not understand the European Union to suggest that 
our Report should be structured so as to present a separate, individualized analysis of each of the 
TRQs at i ssue under each of the different GATT provisions at issue. Leaving aside the degree of 
repetition that this would involve in a case involving ten different TRQs that share many common 
features49, neither party has structured its own submissions in that way.  Of course, where claims 
or arguments are specific to only one or a few of the TRQs, our analysis will make that clear.  
7.1.6   Request for enhanced third -party rights  
7.33.  On 17 December 2015, Brazil, Canada and Thailand each requested the Panel to grant 
enhanced thi rd-party rights in these proceedings. The scope of the rights requested by these three 
third parties was similar, but not identical. The rights requested were the following: (i) the right to 
be present for the entirety of all substantive meetings with the parties50; (ii) the right to receive all 
submissions and statements of the parties, including responses to questions from the Panel, 
throughout the proceedings51; (iii) the right to respond to questions from the Panel52; and, (iv) the 
right in the substantive  meetings to ask questions, at the invitation of the Panel, to the parties or 
the other third parties without any obligation to respond on the part of the parties or the other 
third parties.53 
7.34.   Brazil and Thailand based their requests on the understanding t hat the measures 
challenged by China concern the TRQ shares that were allocated to them by the European Union. 
Furthermore, they note that these TRQs were adopted by the European Union to implement the 
separate bilateral agreements reached with Brazil and Thailand as a result of negotiations to 
                                               
45 Appellate Body Report, US – Wool Shirts and Blouses , p. 14.  
46 Appellate Body Report, US – Gambling,  para. 140. (emphasis original, footnotes omitted)  
47 EU's first written submission, para. 2. See also EU's opening statement at the first meeting of the  
Panel, para. 9.  
48 EU's first written submission, para. 2.  
49 Panels may structure their reports in a manner that avoids repetition. This is commonly achieved by 
grouping together measures or claims that raise the same issues. See e.g. Panel Reports, Guatem ala – Cement 
II, para. 7.5; EU – Footwear,  para. 7.114. Naturally, care must be taken to ensure that such grouping does not 
lead to important differences being obscured. Appellate Body Report, Korea – Taxes on Alcoholic Beverages , 
para. 142.  
50 Request by B razil (Letter from Brazil dated 17 December 2015, p. 2), request by Canada (Letter from 
Canada dated 17 December 2015, p.2) and request by Thailand (Letter from Thailand, p. 7).  
51 Request by Brazil (Letter from Brazil dated 17 December 2015, p. 2), request  by Canada (Letter from 
Canada dated 17 December 2015, p.2) and request by Thailand (Letter from Thailand dated 17 December 
2015, p. 7). Thailand also requested the right to receive the exhibits related to all submissions and statements 
by the parties.  
52 Brazil requested the right to respond to questions from the Panel "whenever it finds appropriate" 
(Letter from Brazil dated 17 December 2015, p. 2). Thailand requested the right to respond to questions from 
the Panel "during the proceedings, up to immediate ly prior to the issuance of the interim report" (Letter from 
Thailand dated 17 December 2015, p. 7).  
53 Request by Thailand (Letter from Thailand dated 17 December 2015, p. 7).  WT/DS492/R  
 
- 41 - 
 
  modify the European Union 's concessions pursuant to Article XXVIII of the GATT 1994.54 Brazil 
additionally points out that China 's panel request specifically referred to these bilateral agreements 
in the context of id entifying the measures at issue.55 Brazil and Thailand consider that any possible 
modification or withdrawal of the TRQs negotiated with the European Union as a result of the 
Panel 's rulings could negatively affect their economic interests, as well as their  legal rights 
pursuant to these bilateral agreements.56 In addition, both Brazil and Thailand noted that the 
negotiations under Article XXVIII of the GATT 1994 were related to the European Union 's 
implementation of the DSB 's recommendations and rulings in EC – Chicken Cuts , a prior dispute 
brought against the European Union by Thailand and Brazil. Finally, Thailand and Brazil submit 
that they are significant exporters of poultry products, both globally and to the European Union.57 
In these circumstances, Braz il argued that it had "a direct and concrete interest in participating 
appropriately in this dispute "58, and Thailand likewise argued that it "ha[d] a unique economic and 
legal interest " in these proceedings.59 
7.35.  Canada requested enhanced third -party rights on  the basis that the dispute raises important 
issues for the modification of tariff commitments and the administration of TRQs. Since Canada 
administers TRQs in the agriculture sector, it argued that "the outcome of this dispute could have 
important legal a nd policy implications for Canada ".60  
7.36.  The European Union did not object to Brazil 's, Canada 's and Thailand 's requests for 
enhanced third -party rights.61 However, China considered that the circumstances of this dispute 
did not warrant the grant of enhanced t hird-party rights, as requested by Brazil, Canada or 
Thailand.62 China noted that previous panels have only granted requests for additional third -party 
rights when the requesting third party could show "specific reasons " that differentiated it from 
other th ird parties to the proceedings, all of which may be presumed to have a "substantial 
interest " in the proceedings before a panel.63 According to China, a potential and indirect impact of 
a panel ruling on the economic interests of the third party making a re quest for enhanced rights, 
as in the present case, is not a sufficient reason to grant those rights.64 
7.37.  The Panel considered the requests of Brazil, Canada and Thailand, and the views of the 
parties. On 3 February 2016, the Panel informed the parties and thi rd parties that it had decided to 
grant the following enhanced rights to all third parties in these proceedings:  
a. the right to be present and observe the entirety of the first and second substantive 
meetings with the parties; and  
b. the right to receive the p arties ' first and second written submissions, written responses 
to questions and comments thereupon, and related exhibits.65 
7.38.  In its communication, the Panel indicated that it would provide its reasoning on this matter 
in its Report. Our reasons are as follo ws.  
7.39.  The Panel recalls that Articles 10.2 and 10.3 of the DSU and paragraph 6 of Appendix 3 of 
the DSU provide for the rights of third parties in panel proceedings. Pursuant to these provisions, 
third parties have the right to receive the parties ' first wr itten submission to the panel, and to 
present their views orally to the panel during the first substantive meeting. It is well established 
                                               
54 Letter from Brazil dated 17 December 2015, p.1; Letter from Thailand dated 17 December 2015, 
paras. 2.2, 2.3 and 4.6 . 
55 See China's request for the establishment of a panel, Section I, items (i) and (ii).  
56 See letter from Brazil dated 17 December 2015, pp. 1 -2; Letter from Thailand dated 17 December 
2015, para. 4.6.  
57 Letter from B razil dated 17 December 2015, p. 2; Letter from Thailand dated 17 December 2015, 
para. 4.2.  
58 Letter from Brazil dated 17 December 2015, p. 2.  
59 Letter from Thailand dated 17 December 2015, para. 1.1.  
60 Letter from Canada dated 17 December 2015, p. 1.  
61 Letter from the European Union dated 12 January 2016.  
62 Letter from China dated 19 January 2016, para. 1.  
63 Letter from China dated 19 January 2016, para. 3, citing to Panel Report, US – Large Civil Aircraft (2nd 
Complaint) , para. 7.16.  
64 Letter from China d ated 19 January 2016, para. 7.  
65 Letter from the Panel to the parties and third parties dated 3 February 2016.  WT/DS492/R  
 
- 42 - 
 
  that a panel may exercise the discretion afforded to it under Article 12.1  of the DSU66 to grant 
enhanced third -party rights in a dispute, provided that the additional rights are consistent with the 
provisions of the DSU and the principles of due process.67 Panels have exercised this discretion 
where there were special circumstances that justified the grant of enhanced thi rd-party rights. We 
consider that decisions on whether to grant enhanced third -party rights should be made on a case -
by-case basis, and that any such decision should be informed by the factors considered in previous 
disputes.68 We also recall the need to ma intain the distinction drawn in the DSU between the rights 
afforded to parties and those afforded to third parties.69  
7.40.  One of the special circumstances that have led previous panels to grant enhanced third -
party rights was when "third parties enjoyed certai n economic benefits that were directly 
implicated by the measure at issue ".70 This was the basis for granting enhanced third -party rights 
in the proceedings in EC – Bananas III and EC – Tariff Preferences .  
7.41.  We consider that, for present purposes, there are significant similarities between the 
measures at issue in EC – Bananas III  and the measures at issue in the current dispute. In EC – 
Bananas III , the measures at issue included the allocation of a TRQ to certain countries, with ACP 
countries benefitting fr om a relatively large share of the lower in -quota rate.71 The complainants 
claimed that the TRQ shares were determined and allocated in a discriminatory manner, and 
violated the European Union 's obligations under Article XIII of the GATT 1994.72 The panel ag reed 
to grant a request for enhanced third -party rights made by the countries benefitting from the TRQ 
allocation on the basis that, among other considerations, "the economic effect of the disputed EC 
banana regime on certain third parties appeared to be v ery large ", and "the economic benefits to 
certain third parties from the EC bananas regime were claimed to derive from an international 
treaty between them and the European Communities ".73 The international treaty referred to was 
the Bananas Framework Agree ment signed between the European Communities and certain ACP 
countries that established a TRQ with respect to the importation of bananas and the country -
specific allocation of the TRQ.74 
7.42.  We consider that, for present purposes, there are also some significan t similarities between 
the measures at issue in EC – Tariff Preferences  and the measures at issue in the current dispute. 
In EC – Tariff Preferences , certain third parties were beneficiaries of the tariff preference scheme 
at issue in that case. They reque sted enhanced third -party rights because, according to them, the 
tariff preferences in dispute determined the conditions of access of their exports to the European 
market.75 The panel granted those rights considering, among others factors, the economic impa ct 
of the tariff preference programmes on third -party developing countries. The panel found it 
significant that "those third parties that are beneficiaries under the EC 's [tariff preferences] and 
those that are excluded have a significant economic interest  in the matter before the Panel. "76 
7.43.  The TRQs at issue in this dispute, as is generally the case for all TRQs, comprise a two -
tiered tariff rate in which the in -quota tariff rate is lower than the out -of-quota tariff rate. The 
TRQs have been allocated by the  European Union in varying amounts among supplying countries. 
More precisely, under most of the TRQs at issue, Brazil and Thailand have each been allocated 
their own country -specific share of the TRQ, whereas all other Members are able to export at the 
lower in-quota tariff rate only within the "all others " share that is provided for under the relevant 
                                               
66 Article 12.1 of the DSU provides that "[p]anels shall follow the Working Procedures in Appendix 3 
unless the panel decides otherwise after cons ulting the parties to the dispute."  
67 Appellate Body Reports, US – 1916 Act , para.  150, EC – Hormones , para.  154, and US – FSC 
(Article  21.5 – EC), para.  243. 
68 See Panel Report, China – Rare Earths , para. 7.7.  
69 Panel Reports, US – 1916 Act (EC) , para.  6.33, and US – 1916 Act (Japan) , para.  6.33, and EC – 
Export Subsidies on Sugar (Australia) , para.  2.5. 
70 Panel Report, China – Rare Earths , para. 7.8. Other circumstances mentioned by that panel are "(ii) 
the economic and social impact of the measures in th ird countries; (iii) whether enhanced third -party rights 
had been granted in previous disputes relating to the measure; (iv) the impact of the dispute on other 
Members maintaining similar measures; (v) the similarity of the dispute to related disputes; and /or (vi) the 
imperative of avoiding repetition" (para. 7.8).  
71 Panel Report, EC – Bananas III , para.  7.64.  
72 Panel Report, EC – Bananas III , paras. 4.9, 4.10.   
73 Panel Report, EC – Bananas III , para. 7.8.  
74 Panel Report, EC – Bananas III , para. 3.30.  
75 Panel Report, EC – Tariff Preferences , Annex A, para.  1. 
76 Panel Report, EC – Tariff Preferences , Annex A, para. 7.  WT/DS492/R  
 
- 43 - 
 
  TRQs. What this means is that Brazil and Thailand are entitled to export the volumes set out in 
their country specific shares at the lower, in -quota tariff r ate, as compared with other Members. In 
this case, therefore, Brazil and Thailand enjoy economic benefits that are directly implicated by the 
measures at issue. China directly challenges the allocation of shares under the TRQs at issue. In 
this regard, Chi na's panel request claims that the tariff rates and the TRQs that the European 
Union negotiated with Brazil and Thailand violate several provisions of the GATT 1994, and 
contains ten different claims of violation of the GATT 1994 arising from "[t]he alloca tion of all or 
the vast majority of the TRQs to two of the WTO Members " (i.e. Brazil and Thailand).77  
7.44.  In the Panel 's view, the foregoing is sufficient to establish that Thailand and Brazil enjoy 
certain economic benefits that are directly implicated by the  measures at issue. In addition, these 
benefits are derived from international agreements entered into between these Members and the 
European Union. We also note that one of the disputing parties indicated that it had no objection 
to the Panel granting enh anced third -party rights. We consider that the foregoing constitutes a 
prima facie  basis for concluding that there are special circumstances that support the grant of 
enhanced third -party rights to Brazil and Thailand in these proceedings.   
7.45.  China sought t o distinguish the present case from the circumstances in EC – Bananas III 
and EC – Tariff Preferences . China noted that in both cases, the measure at issue was "a 
preferential scheme the withdrawal of which would have a direct and automatic impact on the 
TRQs afforded by the European Union to other exporting countries ".78 China further argued that 
unlike the claims in EC – Bananas III , China in the current proceedings is not challenging Brazil 's 
and Thailand 's "share in the EU TRQ allocation as such ". Rather , China states that it "considers 
that the EU should have negotiated or consulted with China as [a] country with principal or 
substantial supplying interests and that in the determination of the global TRQ and the attribution 
of the TRQ to China individual ly or as part of the all other countries, the impact of the EU 's SPS 
measures on Chinese poultry meat products should have been taken into account ".79   
7.46.  In our view, China has not explained how or why the modification or withdrawal of the 
TRQs, or their all ocation among different supplying countries, would not have a "direct and 
automatic impact " on the TRQ shares allocated to Brazil and Thailand. Furthermore, although 
China states that it is not challenging Brazil 's and Thailand 's "share in the EU TRQ alloc ation as 
such", as we have already noted, China 's panel request contains a number of claims based on "the 
allocation of all or the vast majority of the TRQs to two of the WTO Members " (Brazil and 
Thailand). We have no intention, in the context of deciding on the preliminary procedural question 
of whether to grant enhanced third -party rights, of either prejudging the merits of China 's claims, 
or opining on how the European Union might potentially bring its measures into conformity with 
the GATT 1994 should C hina's claims be upheld. However, given the way that China has defined 
the alleged violations, it stands to reason that compliance would likely entail either a reduction of 
the share of the TRQs currently allocated to Brazil or Thailand in order to allow f or a country -
specific share for China or a relatively larger share of the "all others " category to accommodate 
China 's exports, the withdrawal of country -specific shares and the opening of the TRQ on a global 
basis, or even the complete withdrawal of the T RQs. In any of those scenarios, there would be a 
"direct and automatic impact " on the TRQ shares allocated to Brazil and Thailand.  
7.47.  In light of the foregoing, the Panel decided that there were special circumstances that 
warranted the granting of enhanced th ird-party rights in these proceedings. In accordance with 
previous practice and as a matter of due process80, the Panel decided to extend the enhanced 
rights to all third parties to this dispute. For this reason, combined with the fact that Canada did 
not request any enhanced third -party rights going beyond those requested by Brazil or Thailand, 
the Panel did not consider it necessary to separately examine Canada 's request for enhanced third -
party rights.  
                                               
77 See China's request for the establishment of a panel, pp. 3 -5, item s A(iii), A(iv), A(v), A(vi), A(vii), 
and B(iii), B(iv), B(v), B(vi) and  B(vii) . 
78 Letter from China dated 19 January 2016, para. 8.  
79 Letter from China dated 19 January 2016, paras. 13, 16 . 
80 Panel Report, EC – Tariff Preferences , Annex A, para. 7.  See also Panel Report, EC – Export Subsidies 
on Sugar , para.  2.7 and Panel Rep ort, Dominican Republic — Safeguard Measures , para.  1.8 (enhanced third -
party rights not granted in that case).  WT/DS492/R  
 
- 44 - 
 
  7.48.  As noted above, the Panel decided to grant all third  parties the right to be present and 
observe the entirety of the first and second substantive meetings with the parties, and the right to 
receive the parties ' first and second written submissions, written responses to questions and 
comments thereupon, and related exhibits. The Panel considered that in the circumstances of this 
case, the granting of these additional rights to third parties would not impose additional burdens 
on the parties, the Panel or the Secretariat, and would not result in any delays.  
7.49.  However, the Panel declined to grant third parties the right in the substantive meetings to 
ask questions to the parties or the other third parties. In the Panel 's view, granting such a right to 
third parties would risk blurring the distinction between thir d parties and parties established in the 
DSU. Nor did the Panel consider it necessary to grant third parties the right to respond to written 
questions from the Panel during the proceedings, up to the issuance of the interim report. In the 
Panel 's view, thi s would be redundant in light of paragraph 11 of the Working Procedures, which 
already states that "[t]he Panel may at any time pose questions to the parties and third parties, 
orally or in writing, including prior to each substantive meeting. "81 
7.2  The tariff  rate quotas and the SPS measures  
7.2.1   The First Modification Package  
7.50.  On 7 June 2006, the European Union notified WTO Members of its intention to modify its 
concessions on certain poultry products, pursuant to Article XXVIII:5 of the GATT 1994.82 The 
notificati on covered the products classified in the following tariff lines: (i) 0210 99 3983 (salted 
poultry meat); (ii) 1602 31 (prepared turkey meat); and  (iii) 1602 32 19 (cooked chicken meat).84 
In this notification, the European Union stated that it was "prepared  to enter into negotiations and 
consultations with the appropriate Members under Article XXVIII for the modification of 
concessions with respect to the above -mentioned tariff lines ".85 The European Union 's notification 
indicated that it intended to "replace  with tariff rate quotas " the concessions on the above -
mentioned tariff lines.86 The notification provided import statistics by country of origin, for the 
period 2003 -2005, for each of the tariff lines covered by the notification. These statistics indicated  
that Brazil accounted for the largest share of imports into the European Union of products under 
tariff lines 0210 99 39 and 1602 3187, and that Thailand accounted for the largest share of imports 
to the  European Union of products under tariff line 1602 32  19.88 
7.51.  On 24 July 2006, Brazil reserved its rights under Article XXVIII of the GATT 1994 to enter 
into negotiations or consultations with the European Union for the modifications of these 
concessions, claiming a principal supplying interest on tariff lines in Harmonized System 
headings  0210 and 1602.89 On 11 August 2006, Thailand requested to "enter into negotiations on 
compensatory adjustments " with the European Union, claiming a principal supplying interest in 
products falling under tariff lines 0210 99 39 and 1602 32 19.90  
7.52.  The European Union agreed to enter into negotiations with Brazil and Thailand, recognizing 
that Brazil held a principal supplying interest in tariff lines 0210 99 39 and 1602 31 and a 
substantial su pplying interest in tariff line  1602 32 19, and recognizing that Thailand held a 
                                               
81 Panel's Working Procedures, para. 11.  
82 Article XXVIII:5 Negotiations, Schedule CXL – European Communities, G/SECRET/25, circulated on 15 
June 2006 ("G/SECRET/25")(Exhibit CHN -15). In its legislation, the European Union distinguishes between 
fresh poultry meat and poultry meat products (EU's first written submission, para. 71). In this Report, we use 
the term "poultry meat" to cover these two ca tegories.  
83 The notification indicated that item 0210 90 20 was "now 0210 99 39".  
84 The descriptions of the products are taken from Council Regulation (EC) No 580/2007 of 29 May 2007 
concerning the implementation of the Agreements in the form of Agreed Min utes between the European 
Community and Brazil, and between the European Community and Thailand, pursuant to Article XXVIII of GATT 
1994 amending and supplementing Annex I to Regulation (EEC) 265/87, OJ L 138/1 of 30.05.2007 (Exhibit 
CHN-22). 
85 G/SECRET/25 , p. 2 (Exhibit CHN -15). 
86 G/SECRET/25, p. 2 (Exhibit CHN -15). 
87 G/SECRET/25, pp. 3 -4 (Exhibit CHN -15). 
88 G/SECRET/25, p. 5 (Exhibit CHN -15). 
89 Letter from the Permanent Mission of Brazil to the United Nations in Geneva to Ambassador Trojan, 
Permanent Repr esentative of the European Communities to the WTO, dated 24 July 2006 (Exhibit EU -1). 
90 Letter from the Permanent Mission of Thailand to the WTO to Ambassador Trojan, Permanent 
Representative of the European Communities to the WTO, dated 11 August 2006 (Ex hibit EU -2). WT/DS492/R  
 
- 45 - 
 
  principal supplying interest in tariff line 1602 32 19 and a substantial supplying interest in tariff 
lines 0210 99 39 and 1602 31.91  
7.53.  On 6 September 2006, China requested the European Union to enter into bilateral 
negotiations on the proposed modifications. China claimed to hold a substantial supplying 
interest.92 The European Union informed China that it did not recognize its claim of substantial 
supplying interest, "given that China [did] not have a significant shar e in the trade affected by 
these concessions ".93 China subsequently requested the European Union to reconsider its position, 
arguing that its smaller share in the European poultry market was due to the imposition by the 
European Union of an import ban on Ch ina's poultry products over the last five years.94 The 
European Union reiterated its refusal to recognize China 's claim of substantial interest, noting that 
China did not "have a significant share in the trade affected by the modification of the concessions  
on these products ".95  
7.54.  On 26 October 2006, the European Union concluded an agreement with Brazil pursuant to 
Article XXVIII of the GATT 1994.96 On 23 November 2006, the European Union concluded an 
agreement with Thailand, also pursuant to Article XXVIII of the GATT 1994.97 These agreements 
were approved by the European Council in Council Decision 2007/360/EC98 and implemented 
through several regulations:  
i. Council Regulation (EC) No 580/200799, which amends the tariff legislation of the 
European Union and sup plements it with the duties and volumes resulting from the 
agreements with Brazil and Thailand;  
ii. Commission Regulation (EC) No 616/2007, which opens the TRQs for the products 
covered by the First Modification Package originating in Brazil, Thailand, ot her third 
countries, and provides for their administration100; and  
iii. Commission Regulation (EC) 1549/2007, which amends Commission Regulation (EC) 
No. 616/2007.101   
                                               
91 EU's first written submission, paras. 20 -25 and Council Decision 2007/360/EC of 29 May 2007 on the 
conclusion of Agreements in the form of Agreed Minutes between the European Community and the Federative 
Republic of Brazil, and between the E uropean Community and the Kingdom of Thailand pursuant to 
Article  XXVIII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) relating to the modification of 
concessions with respect to poultry meat, OJ L 138/10 of 30.5.2007, 3rd preamble (Exhibi ts CHN -20 and CHN -
21 and Exhibit EU -34). 
92 Note Verbal e from China to the EU, 6 September 2006 (Exhibit CHN -16). See also China's opening 
statement at the second meeting of the Panel, para. 25.  
93 Letter from Amb. Trojan to Amb. Sun (18 October 2006) (Exhib it CHN -17). 
94 Letter  from Amb. Sun to Amb. Trojan (16 November 2006) (Exhibit CHN -18); see also Letter from 
Vice Minister Yi to David O'Sullivan, Director -General for Trade, European Commission (19 April 2007) (Exhibit 
CHN-19). 
95 Letter from David O'Sulliv an to Vice Minister Yi (8 May 2007) (Exhibit EU -28). The EU referred the 
rules set out in Article XXVIII of the GATT 1994 and stated that "China is not in the same situation as certain 
other WTO Members (Brazil, Thailand) who historically have delivered su bstantial quantities of chicken meat 
into the European Union and were therefore invited to negotiate compensation in return for lost market access 
resulting from the tariff increase."  
96 Agreed Minutes initialled in Geneva by J.L Demarty (Commission of the EC) and Roberto C. De 
Azevedo (Delegation of Brazil), 26 October 2006 (Exhibit EU -3); EU's first written submission, para. 21. This 
agreement was revised on 6 December 2006 (EU's first written submission, para. 21 and Agreed Minutes 
initialled in Geneva by  J.L Demarty (Commission of the EC) and Roberto C. De Azevedo (Delegation of Brazil), 
6 December 2006 (Exhibit EU -5). 
97 Agreed Minutes initialled in Bangkok by F. Coturni (Commission of the EC) and B. Chutima 
(Delegation of Thailand), 23 November 2006 (Exh ibit EU -4). 
98 Exhibits CHN -20 and CHN -21 and Exhibit EU -34. 
99 Exhibit CHN -22. 
100 Commission Regulation (EC) No 616/2007 of 4 June 2007 opening and providing for the 
administration of Community tariff quotas in the sector of poultry meat originating in Brazi l, Thailand and other 
third countries, OJ L 142/5 of 5.6.2007 (Exhibit CHN -23). 
101 Commission Regulation (EC) No 1549/2007 of 20 December 2007 amending Regulation (EC) 
616/2007 opening and providing for the administration of certain Community tariff quotas in the sector of 
poultry meat originating in Brazil, Thailand and other third countries, OJ L 337/75 of 21.12.2007 (Exhibit CHN -
24). WT/DS492/R  
 
- 46 - 
 
  7.55.  These measures opened the TRQs for the importation of products classified under the three 
tariff lines covered by the First Modification Package, and provided for their administration. These 
TRQs replaced the tariff rates previously applicable to these products.102  
7.56.  The total amount of the TRQs and their allocation were determined by the European Union 
in agreement with Brazil and Thailand in the context of the negotiations held pursuant to 
Article  XXVIII:5 of the GATT 1994. According to the European Union, it sought to calculate the 
total amounts of the TRQs "on the basis of the guidelines provide d in paragraph 6 of the 
Understanding on the Interpretation of Article XXVIII of the GATT 1994, using as a reference 
period the three -year period immediately preceding the notification of the European Union 's 
intention to modify the concessions, i.e . 2003-2005".103  
7.57.  With respect to tariff line 0210 99 39, the European Union agreed, at the request of Brazil 
and Thailand, to calculate the total amount of the TRQ on the basis of the average import volume 
for the period 2000 -2002, increased by the annual average growth rate for the same period. This 
period was chosen instead of the period 2003 -2005, as this was a period during which the imports 
of products originating from Brazil and Thailand were restricted.104 The European Union allocated 
that TRQ among supplying countries on the basis of the average import shares held by Brazil, 
Thailand, and other supplying countries during the period 2000 -2002.105 The total amount of the 
TRQ applicable to products classified under tariff line 1602 31 was calculated using the refer ence 
period 2003 -2005, based on the import volume for calendar year 2005 increased by 10%.106 The 
European Union allocated that TRQ among supplying countries on the basis of the import shares 
for 2005.107 The total amount of the TRQ applicable to tariff line 1 602 32 19 was calculated "on the 
basis of the import volume for the last twelve -month period, instead of the last calendar year, 
preceding the initiation of the negotiations (i.e. July 2005 -June 2006) increased by the growth rate 
of imports during the same  period ".108 According to the European Union, Thailand requested the 
use of this formula, which led to a TRQ amount that is greater than the amount that would have 
resulted from the application of the formulas in paragraph 6.109 The European Union allocated th at 
TRQ among supplying countries on the basis of the import shares for the same period, July 2005 -
June 2006.  
7.58.  The tariff rates, the total volume of the TRQs and their allocation among supplying countries 
are as follows110:  
Tariff line   Prior tariff 
rate  New in-
quota tariff  New out -of-
quota tariff  TRQ volume 
(metric 
tons)  Allocation 
(metric tons)  Allocation 
share  
0210 99 39  15.4%  15.4%  1,300 
EUR/MT  
 
 264,245  Brazil :  
170,807  
Thailand : 
92,610  
Others :  
828   Brazil :  
64.64%  
Thailand : 
35.05%  
Others : 
0.031%  
1602 31  8.5%  8.5%  1,024 
EUR/MT  
 
 103,896  Brazil :  
92,300  
Others :  
11,592  Brazil :  
88.84%  
Others : 
11.16%  
1602 32 19  10.9%  8.0%  1,024 
EUR/MT  
 
 250,953  Brazil :  
79,477  
Thailand : 
160,033  
Others:   
11,443  Brazil :  
31.67%  
Thailand : 
63.77%  
Others :  
4.56%  
                                               
102 China's first written submission, para. 136; EU's first written submission, para. 30.  
103 EU's first written submission, pa ra. 32.  
104 EU's first written submission, para. 33. The restrictions applicable to these products resulted from 
the changes to the EU's customs classification, which were the subject of the EC – Chicken Cuts disputes.  
105 EU's first written submission, para. 33. 
106 EU's first written submission, para. 34.  
107 EU's first written submission, para. 34.  
108 EU's first written submission, para. 35.  
109 EU's first written submission, paras. 35 -36. 
110 EU's first written submission, Table EU -2: Old and New Tariff Bindings in the First Modification 
Package (para. 30) and Table EU -3: Agreed TRQs in the First Modification Package (para. 31).  WT/DS492/R  
 
- 47 - 
 
  7.59.  The TRQs under the First Modification Package entered into force on 4 June 2007.111 Two 
years later, on 27 May 2009, the European Union notified the WTO that it had concluded its 
negotiations for the modification of concessions under Article XXVIII of the GATT 1 994.112 The 
notification referred to the bilateral agreements concluded with Brazil and Thailand, indicated the 
bound rates that were to be modified on the products, and contained the final report of 
negotiations under Article XXVIII of the GATT 1994. The no tification was circulated to WTO 
Members on 29 May 2009.113 The European Union explained that the delay in notifying the 
completion of the negotiations and the bilateral agreements with Brazil and Thailand, which were 
concluded in 2006, was "largely due to a n administrative oversight ".114 
7.60.  In the notification, the European Union stated that it also held consultations with Argentina, 
China, and the United States. However, the European Union determined that these Members "did 
not have either Initial Negotiating Ri ghts, principal supplying interest or substantial interest in any 
of the products that the EC had notified in its proposal for modifying existing bindings ", and 
therefore "there was no need to hold substantive Article XXVIII negotiations " with them.115 The 
notification states that "[s]ince no other WTO Member expressed its interest to enter into 
negotiations, the EC considers its negotiations under Article XXVIII to be completed. "116   
7.61.  On 24 March 2014, the European Union communicated for certification a re vised schedule of 
concessions which contained "consolidations, modifications and rectifications in this Schedule, in 
relation to the previous certified CXL schedule of the EU " (Schedule CXL – EC15) .117 The draft 
schedule of the European Union (Schedule CLXXIII – EU25) was circulated to the WTO Membership 
on 25 April 2014, in document G/MA/TAR/RS/357.118 The European Union confirmed in these 
proceedings that the modifications resulting from the First Modification Package are included in this 
draft schedule.119 At the time of this Report, the draft schedule has not yet been certified.120  
7.2.2   The Second Modification Package  
7.62.  On 11 June 2009, the European Union notified WTO Members of its intention to modify its 
tariff concessions applicable to a number of other poultry product s pursuant to Article XXVIII:5 of 
the GATT 1994.121  The products covered by the notification were those classified in tariff lines: 
(i) 1602 20 10 (goose duck or liver); (ii) 1602 32 11 (processed chicken meat, uncooked, 
containing 57% or more by weight of poultry meat or offal); (iii) 1602 32 30 (processed chicken 
meat, containing 25% or more but less than 57% by weight of poultry meat or offal); (iv) 1602 32 
90 (processed chicken meat, containing less than 25% by weight of poultry meat or offal); 
(v) 1602 39 21 (processed duck, geese, guinea fowl meat, uncooked, containing 57% or more by 
weight of poultry meat or offal); (vi) 1602 39 29 (processed duck, geese, guinea fowl meat, 
cooked, containing 57% or more by weight of poultry meat or offal); (vii) 1602 3 9 40 (processed 
duck, geese, guinea fowl meat, containing 25% or more but less than 57% by weight of poultry 
meat or offal ); and  (viii) 1602 39 80 (processed duck, geese, guinea fowl meat, containing less 
than 25% by weight of poultry meat or offal).122  
                                               
111 Commission Regulation (EC) No 616/2007 of 4 June 2007 opening and providing for the 
administration of Community tariff quotas in the secto r of poultry meat originating in Brazil, Thailand and other 
third countries, OJ L 142/5 of 5.6.2007 (Exhibit CHN -23). 
112 G/SECRET/25/Add.1, 29 May 2009 (Exhibit EU -6). 
113 G/SECRET/25/Add.1., 29 May 2009 (Exhibit EU -6). 
114 EU's response to Panel question No. 5 3, para. 156.  
115 G/SECRET/25/Add.1, 29 May 2009, page 6 (Exhibit EU -6). 
116 G/SECRET/25/Add.1, 29 May 2009, page 6 (Exhibit EU -6). 
117 G/MA/TAR/RS/357, 25 April 2014 , page 1.  
118 A corrigendum (G/MA/TAR/RS/357/Corr.1) was circulated on 19 February 2015,  an addend um 
(G/MA/TAR/RS/357/Add.1) was circulated on 1 September 2016, and a corrigendum to the addendum was 
circulated on 19 September 2016.   
119 EU's response to Panel question No. 54, para. 158.  
120 The European Union confirmed that the certification process of th e changes to the draft schedule 
communicated on 24 March 2014 is ongoing (EU's first written submission, para. 299).  
121 Article XXVIII:5 Negotiations, Schedule CXL – European Communities,  G/SECRET/32, dated 11 June 
2009 and circulated 16 June 2009 ("G/SECR ET/32") (Exhibit CHN -25).   
122 The product descriptions of tariff lines 1602 32 11, 1602 32 30, 1602 32 90, 1602 39 21 and 1602 
39 29 are taken from Exhibits CHN -28 and CHN -35, as well as China's second written submission, para. 6. The 
product description o f tariff line 1602 20 10 is taken from the European Union's Customs Code available at 
http://ec.europa.eu.  WT/DS492/R  
 
- 48 - 
 
  7.63.  In the notification, the European Union noted that it was "prepared to enter into 
negotiations and consultations with the appropriate Members under Article XXVIII for the 
modification of concessions with respect to the above -mentioned tariff lines ".123 The noti fication 
provided import statistics by country of origin, for the period 2006 -2008, for each of the products 
classified under the tariff lines covered by the notification. These statistics indicated that Thailand 
accounted for the largest share of imports into the European Union of products under tariff lines 
1602 32 90, 1602 39 21, 1602 39 29, 1602 39 40, and 1602 39 80124, and that Brazil accounted 
for the largest share of imports into the European Union of products under tariff lines 1602 32 11 
and 1602 32  30.125 
7.64.  On 18 August 2009, Thailand requested to enter into negotiations with the European Union, 
claiming a "principal " supplying interest in products classified under five tariff lines (1602 32 90, 
1602 39 21, 1602 39 29, 1602 39 40 and 1602 39 80), and a "substantial interest " in products 
classified under one tariff line (1602 32 30).126 On 8 September 2009, Brazil sent a letter to the 
European Union claiming a principal supplying interest in products classified under two tariff lines 
(1602 32 11 and 1602 32  30), and a substantial interest in products falling under tariff line 1602 
32 90.127 Brazil reserved its rights to enter into negotiations or consultations with the European 
Union regarding the modification of these concessions.  
7.65.  The European Union held bil ateral negotiations with Brazil and Thailand. According to the 
European Union, negotiations were completed "at the negotiators ' level" on 23 September 2011.128 
The agreement resulting from the Article XXVIII negotiations with Thailand was initialled on 
22 November 2011, and the agreement resulting from the Article XXVIII negotiations with Brazil 
was initialled on 7 December 2011.129 The two agreements were authorised for signature by the 
Council of the European Union on 23 April 2012.130 
7.66.  On 9 May 2012, China requ ested to enter into negotiations with the European Union under 
Article XXVIII on the basis that it was a Member with a principal supplying interest "with respect to 
relevant tariff lines ".131 China also provided statistics on imports into the European Union from 
China of products classified under four tariff lines (1602 20 10, 1602 39 29, 1602 39 40 and 
1602 39 80) for the years 2009, 2010 and 2011.    
                                               
123 G/SECRET/32, p. 1 (Exhibit CHN -25). 
124 G/SECRET/32, pp. 2 -3 (Exhibit CHN -25). 
125 G/SECRET/32, p. 2 (Exhibit CHN -25). 
126 Letter from the Permanent Miss ion of Thailand to the Ambassador of the Permanent Mission of the 
European Communities to the WTO, 18 August 2009 (Exhibit EU -7). 
127 Letter from the Ambassador of the Permanent Mission of Brazil to the WTO to the Ambassador of the 
Permanent Mission  of the E uropean Communities to the WTO, 8 September 2009 (Exhibit EU -8). 
128 EU's first written submission, para. 40; EU's response to Panel question No. 107(b), para. 85. China 
does not consider that the negotiations were concluded in September 2011 (China's openin g statement at the 
second meeting of the Panel, para. 7; China's response to Panel question No. 107, paras. 96 -98). In this 
regard, China does not contest the European Union's explanations that negotiations were completed "at the 
negotiators' level" on 23 September 2011, or that the agreements with Thailand and Brazil were initialled at 
the time that the European Union claims. Rather, China argues that because the European Union did not 
complete its internal processes to give legal effect to changes agreed with Thailand and notify other WTO 
Members of the completion of the negotiations until December 2012, it is legally incorrect to characterize the 
negotiations as having been concluded prior to that time. Further, China suggests that because China claimed 
a principal supplying interest in May 2012, and the European Union never entered into negotiations with China 
under Article XXVIII, the European Union's negotiations under Article XXVIII were never actually completed 
(China's opening statement at the second  meeting of the Panel, para. 7).  
129 EU's response to Panel question No. 107, para. 83. See also Council Decision 2012/231/EU of 23 
April 2012 on the signing on behalf of the EU of the Agreement in the Form of an Exchange of Letters between 
the EU and Brazil  pursuant to Article XXVIII of the GATT 1994 relating to the modification of concessions with 
respect to processed poultry meat provided for in the EU Schedule annexed to GATT 1994, and of the 
Agreement in the Form of an Exchange of Letters between the EU and Thailand pursuant to Article XXVIII of 
the GATT 1994 relating to the modification of concessions with respect to processed poultry meat provided for 
in the EU Schedule annexed to GATT 1994 (O.J. L 117, 1 May 2012, p. 1) (Exhibit CHN -27). 
130 Exhibit CHN -27. 
131 Letter from China to the EU requesting to enter into negotiations under Article XXVIII (9 May 2012) 
(Exhibit CHN -50). WT/DS492/R  
 
- 49 - 
 
  7.67.  On 1 June 2012, the European Union informed China that it did not recognize China 's claims 
of a principal su pplying interest or substantial interest under Article XXVIII.132 More specifically, 
the European Union informed China that:  
Following the Understanding on the Interpretation of the Article XXVIII GATT and the 
Procedures for the Negotiations under Article X XVIII GATT adopted on 10 November 
1980 (BISD27S/26 -28), a principal supplying interest is recogni sed only for the WTO 
Member which had, for a given concession and in the most recent representative 
period prior to the notification of a WTO Member 's intentio n to modify concessions 
included in its tariff schedule, the largest share in the market of the WTO Member 
seeking to modify concessions. Likewise, substantial supplying interest is recognised 
only for those WTO Members which had in that period a significa nt share, i.e. at least 
10 per cent according to continuous practice of WTO Members, in the market of the 
WTO Member seeking to modify concessions.  
The European Union 's notification G/SECRET/32 dated 16 June 2009 included import 
data for the 2006 -2008 per iod, during which imports from China did not correspond to 
10 per cent or more of total imports. Therefore, the European Union is not in a 
position to recognize China 's claims under Article XXVIII GATT.133 
7.68.  The European Union signed the agreement resulting fr om the negotiations under 
Article  XXVIII with Thailand on 18 June 2012, and it signed the agreement with Brazil on 26 June 
2012.134  
7.69.  On 2 October 2012, China reiterated its request to enter into consultations with respect to 
"relevant tariff lines of poultry  products " as notified by the European Union.135 China contested the 
European Union 's reliance on import statistics covering the period 2006 -2008 to determine which 
Members held the right to participate in consultations and negotiations pursuant to Article X XVIII, 
stating that :  
China believes that 2006 -2008 period does not constitute the representative three -
year period in this case. Before 2008, the EU prohibited imports from China for SPS 
reasons, which completely stopped any exports of poultry from China.  However, since 
the release of the SPS measures against China in 2008, China 's export of poultry has 
increased rapidly. According to the EU statistics, from 2009 -2011, China has become 
the biggest supplier in a certain number of poultry products in the EU market, the 
percentage of which has exceeded 10%, with some products even reaching 86%. All 
above -mentioned facts and evidences show that 2006 -2008 period is inconsistent with 
the provisions on the most recent representative three -year period as stipulated  in the 
Understanding on the Interpretation of Article XXVIII of the GATT 1994 .136 
7.70.  On 12 October 2012, the European Union responded that it had already provided 
explanations of why China 's claims could not be recognized, in writing as well as in bilateral 
meetings. The European Union also noted that it had not received a claim of interest from China 
within ninety days following the June 2009 notification of its intention to modify its concessions, 
contrary to the time -period provided in paragraph 4 of the Pro cedures for Negotiations under 
Article XXVIII. The European Union further stated that:  
                                               
132 Letter from the EU to China responding to China's request for negotiation (1 June 2012) (Exhibit 
CHN-31). 
133 Letter from the EU to China responding to China's request for negotiation (1 June 2012) (Exhibit 
CHN-31). 
134 EU's response to Panel question No. 107, para. 83. See also Council Decision 2012/792/EU of 
6 December 2012 on the conclusion of the Agreement in the form of an Exchange of Letters between the EU 
and Brazil pursuant to Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to 
the modification of concessions with respect to processed poultry meat provided for in the EU Schedule 
annexed to GATT 199 4, and of the Agreement in the form of an Exchange of Letters between the EU and 
Thailand pursuant to Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the 
modification of concessions with respect to processed poultry mea t provided for in the EU Schedule annexed to 
GATT 1994, OJ L 351/44 of  20.12.2012 (Exhibit CHN -34). 
135 Letter from China to the EU (2 October 2012) (Exhibit CHN -30). See also China's opening statement 
at the first meeting of the Panel, para. 37.  
136 Exhibit CHN-30. See also China's opening statement at the first meeting of the Panel, para. 37.  WT/DS492/R  
 
- 50 - 
 
  The statistics contained in communication G/Secret/32 have been defined in 
accordance with paragraph 4 of the procedures for  the negotiations under 
Article  XXVIII which provides that "the notification or request should be accompanied 
by statistics of imports of the products involved, by country of origin, for the last three 
years for which statistics are available ". In this case, the "last three years " preceding 
the notif ication dated 16 June 2009 are 2006, 2007, 2008. The argument developed 
by China in its letter of 2 October 2012 according to which the "2006-2008 period 
does not constitute the representative three year period " is therefore in contradiction 
with the proce dures for the negotiations under Article XXVIII. The statistics of the 
period 2009 -2011 -posterior to the notification - cannot be taken into consideration. 
Using a different period for China would not only be in breach of Article XXVIII but 
would also resu lt in a discriminatory treatment vis -a-vis the other WTO Members.137 
(emphasis original)  
7.71.  The European Union Council approved the agreements with Brazil and Thailand on 
6 December 2012.138 The agreements were implemented through several regulations:  
i. Council  Regulation (EU) 1218/2012139, which amends the tariff legislation of the 
European Union to add the new duties applicable to the poultry products and amends 
and supplements the TRQ legislation of the European Union140 with the duties and 
volumes resulting from  the agreements with Brazil and Thailand;  
ii. Commission Regulation (EU) 1246/2012141, which amends Commission Regulation 
(EC) No 616/2007, and opens the TRQs for the products covered by the Second 
Modification Package originating from Brazil, Thailand and o ther third countries, and 
provides for the administration of the TRQs;  
iii. Notice of entry into force of the Agreement in the form of an Exchange of Letters 
between the European Union and Brazil, and between the European Union and 
Thailand pursuant to Art icle XXVIII of the GATT 1994, which provides that the 
agreements signed with Thailand and Brazil will enter into force on 1 March 2013142; 
and, 
iv. Commission Regulation (EU ) No 302/2013143, which also amends Commission 
Regulation (EC) No 616/2007.  
7.72.  These measu res opened the TRQs on the importation of the products classified under the 
tariff lines covered by the Second Modification Package, and provided for their administration. The 
TRQs replaced the tariff rates previously applicable to these products.144  
7.73.  The to tal amounts of the TRQs and their allocation were determined by the European Union 
in agreement with Brazil and Thailand, using import data for the period 2006 -2008. The European 
Union allocated the TRQs based on the average import shares for the same peri od.145 
7.74.  The tariff rates, the volume of the TRQs and their allocation among supplying countries are 
as follows146:  
                                               
137 Letter from the EU to China (12 October 2012) (Exhibit CHN -32). 
138 Exhibit CHN -34 and EU's response to Panel question No. 107, para. 83.  
139 Exhibit  CHN-28 and Exhibit C HN-35. 
140 Regulation (EEC) No  2658/87, Part Three, Section III, Annex 7 (Exhibits CHN -28 and CHN -35). 
141 O.J. L 352, 21 December 2012, p. 16 (Exhibit CHN -36). 
142 O.J. L 56, 28 February 2013, p. 2. (Exhibit CHN -38). 
143 O.J. L 90, 28 March 2013, p. 86 (Exhibit CHN-37). 
144 China's first written submission, para. 136; EU's first written submission, para. 56.  
145 EU's first written submission, paras. 59 -60. 
146 EU's first written submission, Table EU -6: Old and New Tariff Bindings in the Second Modification 
Package (par a. 56) Table EU -7: Agreed TRQs in the Second Modification Package (para. 57).  WT/DS492/R  
 
- 51 - 
 
  Tariff line  Prior tariff 
rate New in -
quota 
tariff rate  New out -
of-quota 
tariff rate  TRQ 
volume 
(metric 
tons)  Allocation 
(metric 
tons)  Allocation 
share  
1602 32 11  867 EUR/MT  630 
EUR/MT  2,765 
EUR/MT  16,140  Brazil:   
15,800  
Others :  
340 Brazil:   
97.89%  
Others :  
2.11%  
1602 32 30  10.9%  10.9%  2,765 
EUR/MT  
 
 79,705  Brazil:   
62,905  
Thailand : 
14,000  
Others :  
2,800  Brazil:   
78.92%  
Thailand : 
17.56%  
Others : 
3.51%  
1602 32 90  10.9%  10.9%  2,765 
EUR/MT  
 
 2,865  Brazil :  
295 
Thailand : 
2,100  
Others :  
470  Brazil :  
10.3%  
Thailand : 
73.3%  
Others :  
16.4%  
1602 39 21  867 EUR/MT  630 
EUR/MT  2,765 
EUR/MT  10  Thailand :  
10 Thailand : 
100%  
1602 39 29  10.9%  10.9%  2,765 
EUR/M T 
 
 13,720  Thailand : 
13,500  
Others :  
220 Thailand : 
98.4%  
Others :  
1.6%  
1602 39 40  10.9%  10.9%  2,765 
EUR/MT  
 
 748  Thailand :  
600 
Others : 
148 Thailand : 
80.21%  
Others : 
19.79%  
1602 39 80  10.9%  10.9%  2,765 
EUR/MT  
 
 725  Thailand :  
600 
Others : 
125 Thailand :  
82.76%  
Others : 
17.24%  
7.75.  Tariff line 1602 20 10 was included in the European Union 's notification to modify the 
concessions under the Second Modification Package, but this tariff line was not the subject of 
subsequent negotiations with Brazil and Thailand.147 China confirmed that it is not challenging any 
measure related to this tariff line.148 Two of the tariff lines included in the Second Modification 
Package, 1602 39 40 and 1602 39 80, were merged into a single tariff line, 1602 39 85 ( processed 
duck, geese, g uinea fowl meat, containing less than 57% by weight of poultry meat or offal) 
effective on 1 January 2012.149 Although these two tariff lines were merged, the European Union 
has explained that it opened and continues to apply two separate TRQs for the produc ts previously 
covered by tariff lines 1602 39 40 and 1602 39 80.150 
7.76.  On 17 December 2012, the European Union notified the WTO that it had concluded its 
negotiations pursuant to Article XXVIII:5.151 The notification referred to the bilateral agreements 
concluded  with Brazil and Thailand, indicated the bound rates that were to be modified on the 
products, and included the final report of negotiations under Article XXVIII. It was circulated to 
WTO Members on 20 December 2012.152 The notification states that Argentina  contacted the 
European Union to enter into consultations. The European Union, however, "did not hold 
consultations with Argentina as Argentina did not have Initial Negotiating Rights, a principal 
supplying interest or a substantial interest in any of the products " covered by the Second 
Modification Package.153 The notification also states that:  
                                               
147 EU's first written submission, footnote 25. The European Union noted that "there were no imports 
under that subheading during the reference period" (2006 -2008).  
148 China's respo nse to Panel question No. 4, para. 12.  
149 EU's response to Panel question No. 63 (c), para. 4.  
150 EU's response to Panel question No. 63 (c), para. 6.  
151 G/SECRET/32/Add.1, circulated 20 December 2012 (Exhibit EU -9). 
152 G/SECRET/32/Add.1 (Exhibit EU -9). 
153 G/SECRET/32/Add.1, p. 7 (Exhibit EU -9). WT/DS492/R  
 
- 52 - 
 
  No other WTO Member expressed its interest to enter into negotiations in accordance 
with the provisions of Article XXVIII GATT 1994 within the 90 day period referred  to in 
paragraph 4 of the Guidelines on Procedures for Negotiations under Article XXVIII 
(documents C/113 and Corr.1 of 10 November 1980); therefore, the E U considers its 
negotiations under Article XVIII to be completed.154  
7.77.  At the time of this Report, t he European Union has not yet submitted for certification the 
changes to its schedule of concessions resulting from the Article XXVIII:5 negotiations relating to 
the Second Modification Package. The European Union explained that as the Second Modification 
Package was concluded in 2012, after the enlargement of the European Union to 27 member 
States, it was considered "more appropriate to submit for certification the changes included in that 
package as part of the draft schedule EU27 " which will be submitted "as soon as the draft EU25 
schedule is certified ".155  
7.78.  The TRQs negotiated under the Second Modification Package ent ered into force on 1 March 
2013.156  
7.79.  On 19 December 2013, China requested to enter into consultations with the European Union 
pursuant to Article X III:4 of the GATT 1994.157 In its request, China noted that the European Union 
had "adopted a new tariff regime […] whereby the duties rates are increased significantly while a 
tariff rate quota is open for each item " and allocated the "majority and even all  shares of the tariff 
quotas to Brazil and/or Thailand " and "very limited shares to other Members, including China. "158 
China recalled that it had previously raised concerns with regard to these modifications, and had 
requested the European Union to enter in to negotiations or consulta tions with China, under 
Article  XXVIII, on 9 May 2012 and 2 October 2012. In its letter, China stated:  
China has a substantial supplying interest in several of the tariff items concerned, as 
evidenced by the statistics of imports  of the European Union from China in the most 
recent years prior to the adopting of the new tariff regime …  
As required by Article XIII:4 of GATT 1994, a Member applying a tariff quota shall, 
upon the request of any other Member having a substantial suppl ying interest, consult 
promptly with the other Member regarding, inter alia, the need for an adjustment of 
the proportion determined or of the base period selected, or for the reappraisal of the 
special factors involved. Without prejudice to China 's rights  under other provisions of 
GATT 1994 as well as other covered agreements, China hereby requests the European 
Union to enter into consultations with China in accordance with Article XIII:4.159  
7.80.  On 21 February 2014, the European Union responded that:  
[T]he Eur opean Union has recently completed a tariff re -binding exercise, in 
accordance with Article XXVIII of the GATT. Representatives of the European Union 
have discussed trade in processed poultry meat with representatives of China on a 
number of occasions, at technical and senior official level as well as in the Committee 
on Agriculture. Some of these discussions included representatives of the Chinese 
industry. There has also been extensive correspondence on this matter. We conclude 
that China did not meet the  conditions for participation in the relevant negotiations.160  
                                               
154 G/SECRET/32/Add.1, 20 December 2012 p. 7 (Exhibit EU -9). 
155 EU's response to Panel question No. 54(c), para 160.  
156 O.J. L 56, 28 February 2013, p. 2. (Exhibit CHN -38). In its response to Panel question No. 107(b), 
the European Union notes that: "[i]nitially , the implementing EU domestic legislation provided that the TRQs 
would enter into force on 1 January 2013. But, due to a delay in the completion of the internal procedures in 
Brazil, the entry into force was post -poned until 1 March 2013" (para. 86).  
157 Letter of 19 December 2013 requesting consultation under Article XIII:4 of the GATT 1994 (Exhibit 
CHN-39). 
158 Letter of 19 December 2013 requesting consultation under Article XIII:4 of the GATT 1994 (Exhibit 
CHN-39). 
159 Letter of 19 December 2013 requesting consultation under Article XIII:4 of the GATT 1994 (Exhibit 
CHN-39). 
160 Response letter from the EU to China  dated 21 February 2014  (Exhibit CHN -40). WT/DS492/R  
 
- 53 - 
 
  7.81.  The European Union informed China that it was willing to continue the discussions with 
China in a spirit of cooperation and good faith, "without prejudice to the position of the European 
Union a s regards the interpretation or application of Articles XIII or XXVIII of the GATT ".  On 19 
May 2014, a meeting was held between China and the European Union.161 In its panel request, 
China claims that during the meeting the European Union refused to adjust to TRQs, as had been 
previously requested by China.162   
7.2.3   The SPS measures applicable to poultry products from China  
7.82.  China 's claims in this dispute are related to a number of SPS measures163 adopted by the 
European Union which have restricted or prohibited the importation of certain poultry products 
from China. The SPS measures applied to a number of products, including those poultry products 
included in the First and Second Modification Packages.  
7.83.  At the outset, the Panel notes that China is not challenging the  consistency of the SPS 
measures with any provision of the covered agreements. The panel request does not include any 
claims of violation relating to the SPS measures, and China stated in these proceedings that "it is 
not China 's intention nor the focus of  this dispute to examine the SPS measures taken by the EU in 
relation to imports of poultry meat products ".164 The SPS measures are relevant to this dispute 
because China argues that the European Union should have taken these SPS measures into 
account when m aking its determinations of: which Members held a principal or substantial interest 
in supplying in the products covered  by the First and Second Modification Packages; the amount of 
compensation under Article XXVIII:2; and the allocation of TRQ shares amon g supplying countries. 
Essentially, China claims that the European Union should not have relied on import statistics based 
on time periods during which the SPS measures were in effect, as they had a negative impact on 
the importation of poultry products fr om China. According to China, the two reference periods used 
by the European Union in its notifications of modification of concessions under Article XXVIII:5 
(2003 -2005 for the First Modification Package and 2006 -2008 for the Second Modification 
Package) w ere not representative, since these periods were "tainted "165 by the existence of the 
SPS measures affecting the importation of poultry products from China.  
7.84.  In this  section, we will briefly describe the SPS measures that were applicable, and which in 
some i nstances are still applicable, to the poultry products at issue in this dispute. We focus on 
three SPS measures that were in place during the periods at issue and which, according to China, 
should have been taken into account by the European Union. As elab orated below, these measures 
are the "heat treatment measure ", the "residues measure " and the "avian influenza measure ". We 
describe these SPS measures to the extent that they are relevant to our assessment of the 
arguments of the parties in this case.  
7.85.  According to the European Union, in order to ensure that imported poultry products "comply 
with the same or equivalent sanitary requirements as domestic products ", the imported products 
must originate from a country included in a list of approved countries an d must satisfy sanitary 
requirements, including a heat treatment measure.166 The heat treatment measure that applies to 
the products originating from the listed countries differs in terms of the severity of requirements. 
In the case of China, the importation  of poultry products into the European Union was authorised 
on the condition that the products undergo the most severe heat treatment known as "treatment 
B".167 According to the European Union, the requirement that poultry products from China undergo 
                                               
161 China's first written submission, para. 48; EU's first written submis sion, para. 54.  
162 China's request for the establishment of a panel, Section II.B.(viii), p. 5.  
163 Throughout these proceedings, various terms have been used by the parties to refer to these 
measures. Both parties agree that it is appropriate in this Report to refer to them as "SPS measures" (China's 
response to Panel question No. 81, para. 44; EU's response to Panel question No. 81, para. 40).  
164 China's first written submission, para. 31. See also China's opening statement at the first meeting of 
the Panel, para.5; China's second written submission, paras. 46; China's response to Panel question No. 6, 
para. 23; China's response to Panel question No. 81, para. 43).  
165 China's first written submission, paras. 78, 80, 194, and 246.  
166 EU's first written submission , para. 69. See also paras. 70 -71. 
167 Part 4 of Annex II of Commission Decision 2007/777/EC distinguishes 6 categories of heat 
treatment: one non -specific treatment (called treatment "A" under which any specific heat treatment is not 
required) and five spec ific treatments, from "B" to "F", in descending order of severity. Treatment "B", which is 
the most severe heat treatment measure, is defined as "treatment in a hermetically sealed container to an Fo 
value of three or more" (Exhibit CHN -8 and Exhibit EU -13) and China's first written submission, footnote 24.  WT/DS492/R  
 
- 54 - 
 
  "treatm ent B " had been in force since 1997.168 The heat treatment measure applicable to the 
importation of meat products into the European Union is currently provided in Commission 
Decision 2007/777/EC (as amended).169 In addition to the heat treatment measure, "if there is 
evidence that imported products from a listed country no longer comply with the same or 
equivalent sanitary requirements as those prescribed for the EU products, the European 
Commission may adopt protective measures restricting those imports "170, including the two types 
of SPS measures as described below.  
7.86.  On 30 January 2002, the European Union suspended the importation of all products of 
animal origin from China, including poultry products.171 The measure applied to animal products 
intended for human co nsumption or animal feed use, and was adopted to protect against the risks 
posed by deficiencies in the regulation of veterinary medicine and the control of residues in 
China.172 This prohibition initially provided for a derogation for certain animal product s, but these 
products did not include the poultry products at issue in this dispute , due to animal health reasons . 
All products classified under the tariff lines included in the First and Second Modification Packages 
originating from China were prohibited under this measure.173 We refer to this measure, which was 
specific to China, as the "residues measure ".  
7.87.  On 6 February 2004, the European Union suspended the importation of fresh poultry meat, 
meat preparations and meat products consisting of or containing any parts of poultry originating 
from China and several other Asian countries.174 This measure was adopted in response to an 
outbreak of avian influenza in the region.175 This prohibition applied in addition to the above -noted 
prohibition imposed due to residu e concerns, and it also covered all products falling under the 
tariff lines included in the First and Second Modification Packages. A derogation applied to the 
products of certain countries, but not to the products from China.176 We refer to this measure, 
which was not specific to China, as the "avian influenza measure ".  
                                               
168 EU's first written submission, footnote 65; Commission Decision 97/222/EEC, of 28 February 1997, 
laying down the list of third countries from which the Member States authorize the importation of meat 
products, OJ L 89/39 of 4.4.1997 (Exhibit EU -25); Commission Decision 2005/432/EC, of 5 June 2005, laying 
down the animal and public health conditions and model certificates for imports of meat products for human 
consumption from third countries and repeali ng Decisions 97/41/EC, 97/221/EC and 97/222/EC, OJ L 151/3 of 
14.6.2005  (Exhibit EU -24). During the same period, treatment A applied to the products of Thailand. The heat 
treatment measure applicable to the products of China was amended in 2008, as describ ed in paragraph 7.89. 
169 Exhibit CHN -8 and Exhibit EU -13. See Commission Decision 2008/640/EC of 30 July 2008 amending 
Decision 2005/692/EC concerning certain protection measures in relation to Avian Influenza in  several third 
countries (O.J. L 207, 5 August 2008, p. 32) (Exhibit CHN -10 and Exhibit EU -22). 
170 EU's first written submission, para. 72.  
171 Commission Decision 2002/69/EC of 30 January 2002 concerning certain protective measures with 
regard to the product s of animal origin imported from China (O.J. L 30, 31 Ja nuary 2012, p. 50) (Exhibit 
CHN-5 and Exhibit EU -15), replaced by Commission Decision 2002/994/EC, of 20 December 2002, concerning 
certain protective measures with regard to products of animal origin imported from China (Exhibit EU -16). This 
decision was amended several times. See also China's first written submission, para. 23 and footnote 18; 
China's second written submission, footnotes 13 and 66; Exhibits CHN -47 and CHN -54; EU's first written 
submis sion, paras.74 -75; EU's response to Panel question No. 6, para. 7; Exhibit EU -39. 
172 EU's first written submission, para. 73; Exhibit CHN -5 and EU -15, 5th and 6th recitals.  
173 At that time, poultry products from Thailand were authorised, subject to chemical testing and heat 
treatment "D". See China's second written submission, para. 21; EU's response to Panel question No. 6, 
paras.  8 et seq . 
174 Commission Decision 2004/122/EC of 6 February 2004 concerning certain protection measures in 
relation to avian influe nza in several Asian countries, OJ L 36/59 of 7.2.200 4 (Exhibit CHN -6 and Exhibit 
EU-19).See also China's first written submission, para. 24; EU's first written submission, para.77. Commission 
Decision 2004/122/EC was replaced by Commission Decision 2005/6 92/EC of 6 October 2005 concerning 
certain protection measures in relation to Avian Influenza in several third countries (O.J. L 263, 8 October 
2005, p. 20)  (Exhibit EU -21). It  maintained the prohibitions against the importation of products from China and 
other Asian countries.  
175 China's first written submission, para. 24; EU's first written submission, para. 77.  
176 China pointed out that Thailand also suffered from the outbreak of avian influenza but its products 
were not subject to the same heat treatment measure (China's first written submission, para. 31). The 
European Union explained that the imports from Thailand that had undergone treatment "D" were authorised 
for importation because that treatment was effective against avian influenza (EU's first writ ten submission, 
paras. 82 -83; EU's response to Panel question No. 8, para. 18, Commission Decision 2004/84/EC, of 23 
January 2004, concerning protection measures relating to avian influenza in Thailand, OJ L 17/57 of 24.1.2004 
(Exhibit EU -20)). WT/DS492/R  
 
- 55 - 
 
  7.88.  On 30 July 2008, the European Union  "relaxed "177 the above SPS measures that applied to 
the importation of poultry products from China. The European Union amended the residues 
measure which ad dressed the risks posed by residues in animal products, because an "appropriate 
residue monitoring plan" had been provided by China and the result of verification was 
favourable.178 The amended decision allows for the importation of poultry products from Chi na, 
provided that the products are accompanied by a declaration of the Chinese competent authority 
that each consignment has been subjected to a chemical test , among other sanitary requirements  
(including the heat treatment measure ).179  
7.89.  The European Union a lso modified the heat treatment measure applicable to Chinese poultry 
products. The specific heat requirement was modified from treatment "B" to the less severe 
treatment "D" for poultry products originating from the province of Shandong, on the basis that  
the competent authority of the province of Shandong complied with the specific animal health 
requirement.180 The importation of poultry products originating from the rest of the Chinese 
territory is still subject to heat treatment "B", among other sanitary requirements . The European 
Union additionally modified the avian influenza measure and authorized the importation of poultry 
products from China, subject to the same specific heat treatment measure noted above, on the 
basis that "such heat treatment is suf ficient to inactivate the avian influenza virus ".181 
7.90.  The European Union has indicated that  "[t]he scope of application of the EU sanitary 
measures is not defined by reference to CN or HS codes. "182 In order to evaluate the effects of the 
above -noted SPS measur es on the importation of Chinese poultry products, we use the product 
categories "uncooked " and "cooked ", upon which both parties agree.183   
7.91.  The category of "uncooked poultry products " covers tariff item 0210 99 39 (salted poultry 
meat), 1602 32 11 (process ed chicken meat, uncooked, containing 57% or more by weight of 
poultry meat or offal) and 1602 39 21 (processed duck, geese, guinea fowl meat, uncooked, 
containing 57% or more by weight of poultry meat or offal).184 According to China, these 
"uncooked " poultry products by definition cannot be subjected to a heat treatment measure, and 
therefore remain subject to an import ban.185 The European Union has confirmed that these three 
tariff lines cover uncooked products.186 The Panel understands from the parties ' subm issions in this 
regard that the importation into the European Union of products classified under tariff lines 0210 
99 39, 1602 32 11 and 1602 39 21 and originating from China were prohibited under the heat 
treatment measure at the time of the application o f the residue measure in January 20 02. The 
imports of these products from China in the European Union remain prohibited until the present 
since they were not affected by the lifting of the prohibition under the residue measure , the avian 
influenza measure and the modification of the heat treatment measure on 30 July 2008.187 
7.92.  The poultry products falling under tariff lines 1602 32 19 (cooked chicken meat) and 1602 
39 29 (processed duck, geese, guinea fowl meat, cooked, containing 57% or more by weight of 
                                               
177 China's f irst written submission, para. 93.  
178 Third and fourth recitals of Commission Decision 2008/639/EC of 30 July 2008 amending Decision 
2002/994/EC concerning certain protective measures with regard to products of animal origin imported from 
China, OJ L 207/30 , of 5.8.2008 (Exhibit EU -17). 
179 Second recital of Commission Decisi on 2008/638/EC (Exhibit EU -17). 
180 Third recital of Commission Decision 2008/638/EC of 30 July 2008 (O.J. L 207, 5 August 2008, p. 24) 
(Exhibit CHN -9 and Exhibit EU -23). See also China's se cond written submission, para. 21 ; EU's opening 
statement at the second meeting of the Panel, para. 83.  
181 Third recital of  Commission Decision 2008/ 640/EC of 30 July 2008 amending Decision 2005/692/EC 
concerning certain protection measures in relation to A vian Influenza in several  third countries (O.J. L 207, 5 
August 2008, p. 32) (Exhibit CHN -10 and Exhibit EU -22). 
182 EU's response to Panel question No. 8, para. 20.  
183 China's second written submission, para. 16; EU's response to Panel question No.  77(b), pa ra. 35.  
184 China's response to Panel question No. 5, paras. 17 -19 and question No. 8, paras. 37 -38; China's 
second written submission, para. 15.  
185 China's second written submission, paras. 13 -15. See also China's response to Panel question No. 8, 
para. 35;  China's opening statement at the first meeting of the Panel, para. 50.  
186 EU's response to Panel question No. 77(b), para. 35.  
187 China's second written submission, para.15. See also China's opening statement at the first meeting 
of the Panel, para. 50; Chi na's response to Panel question No. 5, paras. 17 -19 and question No. 8, paras. 37 -
38; China's comments on the EU's responses to the Panel' question No.  77(b) , para. 22. The Panel also notes 
the EU's response to Panel question No. 79, at para. 36 that "[i]m ports of fresh poultry meat from China are 
currently not authorised."  WT/DS492/R  
 
- 56 - 
 
  poultry meat or offal) are "cooked poultry products ".188  We understand that these products were 
authorized for importation into the European Union if they had undergone treatment "B", until the 
application of the residue measure in 2002. Since 30 July 2008, thes e products are authorized for 
importation into the European Union if they are accompanied by the required veterinary 
certification and declaration of chemical testing, and have undergone heat treatment "D" (if the 
products are from the province of Shandong ), or treatment "B" (if the products originate from 
other parts of China and fulfil the other applicable sanitary requirements ).  
7.93.  The remaining four tariff lines comprise both cooked and uncooked poultry products: these 
include tariff lines 1602 31 (prepar ed turkey meat); 1602 32 30 (processed chicken meat, 
containing 25% or more but less than 57% by weight of poultry meat or offal); 1602 32 90 
(processed chicken meat, containing less than 25% by weight of poultry meat or offal) and 1602 
39 85 ( processed du ck, geese, guinea fowl meat, containing less than 57% by weight of poultry 
meat or offal).189 We understand that the importation into the European Union of poultry products 
originating from China that is classified in these tariff lines were and are subject to the SPS 
measures described above, depending on which category they fall (cooked or uncooked).   
7.94.  As noted above, it is not in dispute that these measures are SPS measures.190 China agrees 
that: 
[T]he EU 's SPS measures discussed in this dispute are "sanitar y measures " within the 
meaning of Annex A:1 of the SPS Agreement, and that it would be appropriate to refer 
to them as "SPS measures " in the Panel Report. Without conducting a detailed 
examination of the EU 's SPS measures given that the measures are not th e subject of 
this dispute, China would like to briefly note that the EU 's measures are applied (1) 
"to protect human life or animal life or health within the territory of the Member from 
risks arising from additives, contaminants, toxins or disease -causing  organisms in 
foods, beverages or feedstuffs ", as described in Annex A:1(b), and (2) in the form of 
regulations, as provided in the second paragraph of Annex A:1.191 
7.2.4   Import statistics  
7.95.  The parties have each provided the Panel with information on the import sh ares held by 
Brazil, China, Thailand, and other countries over the period 1996 -2015. China has provided the 
percentages in Exhibit CHN -52, and the European Union has provided these percentages in Exhibit 
EU-43.192 The European Union also separately provided,  in Exhibit EU -44193, the volumes of 
imports from different countries under tariff lines 1602 39 40 and 1602 39 80 up until the merger 
of these two tariff lines into tariff line 1602 39 85 , effective 1 January 2012. This exhibit does not 
however present data  expressed in percentages of shares.  
7.96.  We note the existence of multiple discrepancies between the import shares submitted in 
Exhibit CHN -52 and Exhibit EU -43, and also with the information in Exhibit EU -44. For the most 
part, it appears that these discrepa ncies are not material to our analysis of China 's claims in this 
dispute. We further note that the data on import percentages provided to the Panel by both parties 
(in Exhibits CHN -52 and EU -43) appear to be derived from data covering EU28 imports, which 
includes "the imports into Romania, Bulgaria and Croatia made into those countries before they 
joined the European Union. "194 However, as discussed later in our Report, we understand from the 
parties that the use of EU28 data may be expected to have a negligi ble impact on the overall 
import shares.195 
                                               
188 China's second  written submission, para. 17.  
189 Tariff line 1602 39 85 results from the merger of tariff line 1602 39 40 (processed duck, geese, 
guinea fowl meat, containing 25% or more  but less than 57% by weight of poultry meat or offal) and tariff line 
1602 39 80 (processed duck, geese, guinea fowl meat, containing less than 25% by weight of poultry meat or 
offal) effective 1 January 2012.  
190 See above,  footnote 163.  
191 China's response to Panel question No. 81, para. 44.  
192 We note that Exhibit EU -43 is mistakenly identified, on its cover page, as EU -44. 
193 We note that Exhibit EU -44 is mistakenly identified, on its cover page, as EU -45. 
194 EU's second writte n submission, para. 81.  
195 See section  7.5.3.2.3.  WT/DS492/R  
 
- 57 - 
 
  7.97.  In relation to tariff line 1602 39 80, there is a significant discrepancy between the 
information provided in Exhibit CHN -52 and the information contained in Exhibit EU -44 regarding 
the import shares held by differ ent countries over the years 2000 -2006. Among other things, the 
information in Exhibit CHN -52 indicates that in the years 2005 and 2006, China accounted for 
17.6% and 30.5% of imports into the European Union under tariff line 1602 39 80. We recall that 
during this period, the SPS measures generally prohibited importation of poultry products into the 
European Union from China, and at no point in these proceedings has China indicated that it would 
have been able to or did export products under 1602 32 80 in s ignificant quantities during that 
period. We understand that the discrepancy is due to the fact that China's statistics in Exhibit 
CHN-52 (and Exhibit CHN -43) include imports into Bulgaria, Romania and Croatia made before 
those countries became Member Stat es of the European Union, whereas the EU statistics do not 
include those imports. For the foregoing reasons, the figures in the table below for 1602 39 80 for 
the years 2000 -2006 are based on the data provided in Exhibit EU -44.  
7.98.  The shares of imports into the European Union of Brazil, China and Thailand of the products 
classified under the tariff lines covered by the First and Second Modification Packages for years 
2000-2015 are reproduced below. The year 2000 was the earliest year included by the European 
Union in one of the reference periods (for tariff line 0210 99 39).196 Throughout these proceedings, 
the parties have made reference to the percentage of import shares based on the quantity of 
imports, as well as the value of imports. Both parties have subse quently confirmed that for the 
purposes of determining which Member holds a substantial supplying interest, it is more 
appropriate to examine import shares based on quantity, rather than value.197 The import shares 
in the table that follows are based on quan tity. The figures in the table below are rounded to the 
nearest decimal point.  
                                               
196 EU's first written submission, para. 33.  
197 EU's response to Panel question No. 61(a), para. 1; China's response to Panel question No. 61(a), 
para. 4 .  
  WT/DS492/R  
 
- 58 - First Modification Package: Shares of imports into the EU of Brazil, China, Thailand and other countries, 2000 -2015 (in quantity)  
 
Tariff line 0210 99 39198 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  52.2%  63.3%  72.9%  64.4%  98.9%  98.8%  98.2%  98.3%  95.8%  94.3%  95% 92.1%  83.1%  75.2%  70.4%  66.5%  
China  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
Thailand  47.8%  36.3%  26.6%  34.5%  0.0%  0.0%  0.0%  0.0%  0.1%  0.0%  0.0%  0.1%  10.1%  22.6%  28.3%  31.9%  
Others  0.0%  0.4%  0.5%  1.1%  1.1%  1.2%  1.8%  1.7%  4.1%  5.7%  5% 7.9%  6.8%  2.2%  1.3%  1.6%  
Tariff line 1602 31199 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008 2009  2010  2011  2012  2013  2014  2015  
Brazil  72.4%  76.4%  85.8%  85.6%  86.4%  89.5%  94.4%  91.3%  87.8%  90.8%  93.3%  93.7%  93.4%  92.3%  94.8%  97.2%  
China  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
Thailand  0.6%  0.2%  0.1%  0.3% 0.0%  0.0%  0.1%  0.0%  0.0%  0.0%  0.1%  0.0%  0.0%  0.0%  0.0%  0.0%  
Others  27.0%  23.4%  14.1%  14.1%  13.6%  10.5%  5.5%  8.7%  12.2%  9.2%  6.6%  6.3%  6.6%  7.7%  5.2%  2.8%  
Tariff line 1602 32 19200 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013 2014  2015  
Brazil  16.9%  20.8%  29.2%  34.7%  32.2%  31.7%  33.2%  32.0%  32.1%  27.8%  23.4%  24.9%  19.9%  23.2%  26.9%  26.7%  
China  0.0%  0.2%  0.6%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  1.5%  2.8%  3.7%  3.5%  5.2%  5.9%  4.8%  
Thailand  77.2%  73.6%  65.8%  62.4%  64.9%  65.8%  64.6% 65.3%  66.2%  69.1%  72.4%  69.9%  75.2%  70.8%  66.1%  67.0%  
Others  5.9%  5.4%  4.4%  2.9%  2.9%  2.5%  2.2%  2.7%  1.7%  1.6%  1.4%  1.5%  1.4%  0.8%  1.1%  1.5%  
 
Second Modification Package: Shares of imports into the EU of Brazil, China, Thailand and other countries, 200 0-2015 (in quantity)  
 
Tariff line 1602 32 11201 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  77.1%  56.0%  73.3%  55.0%  92.7%  96.7%  99.2%  93.1%  99.2%  99.7%  99.3%  96.7%  96.1%  97.7%  99.6%  99.7%  
China  0.0%  0.0%  0.2% 0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
Thailand  13.5%  22.8%  14.3%  17.8%  2.0%  0.3%  0.2%  0.3%  0.4%  0.1%  0.7%  0.0%  1.5%  0.0%  0.1%  0.0%  
Others  9.4%  21.2%  12.2%  27.2%  5.3%  3.0%  0.6%  6.6%  0.4%  0.2%  0.0%  3.3%  2.4%  2.3%  0.3%  0.3%  
Tariff line 1602 32 30202 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  1.1%  0.3%  0.0%  3.3%  64.1%  92.2%  93.3%  77.3%  75.4%  79.0%  79.5%  72.7%  70.4%  75.6%  75.8%  73.7%  
China  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0% 0.0%  0.4%  0.9%  0.9%  0.8%  3.1%  4.2%  5.0%  
Thailand  68.5%  96.8%  98.4%  90.7%  33.3%  7.2%  6.0%  21.9%  23.8%  19.9%  19.0 26.0%  28.3%  21.0%  19.9%  21.1%  
Others  30.4%  2.9%  1.6%  6% 2.6%  0.6%  0.7%  0.8%  0.8%  0.7%  0.6%  0.4%  0.5%  0.3%  0.1%  0.2%  
                                               
198 These figures are based on Exhibit CHN -52. However, E xhibit CHN -52 appears to be missing data for the years 2000 -2001 for tariff line 0210 99 39. The information 
presented in this table for these years is based on the information presented in Exhibit EU -43 for tariff line 0210 99 39.   
199 These figures are ba sed on Exhibit CHN -52. However, Exhibit CHN -52 appears to be missing data for the year 2000 for tariff line 1602 31. The information presented in 
this table for this year is based on the information presented in Exhibit EU -43 for tariff line "1602 3 1 11". 
200 These figures are based on Exhibit CHN -52. 
201 These figures are based on Exhibit CHN -52. 
202 These figures are based on Exhibit CHN -52.  
  WT/DS492/R  
 
- 59 - Tariff line 1602 32 90203 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  28.8%  0.0%  17.3%  28.7%  18.3%  11.1%  8.8%  13.2%  12.0%  4.8%  9.5%  10.6%  8.6%  0.0%  0.3%  0.0%  
China  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.2%  0.8%  0.0%  2.8%  1.5%  2.9%  0.8%  0.0%  1.6%  0.0%  
Thailand  55.8%  84.0%  39.9%  69.3%  80.3%  85.9%  88.6%  82.8%  84.8%  90.8%  88.5%  86.3%  90.5%  99.9%  98.0%  99.7%  
Others  15.4%  16% 42.8%  2.0%  1.4%  3% 2.4%  3.2%  3.2%  1.7%  0.5%  0.2%  0.1%  0.1%  0.1%  0.3%  
Tariff item 1602 39 21204 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  100.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
China  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
Thailand  0.0% 0.0%  0.0%  0.0%  0.0%  100.0%  0.0%  100.0%  100.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
Others  100%  100%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
Tariff item 1602 39 29205 
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010 2011  2012  2013  2014  2015  
Brazil  2.6%  0.4%  0.0%  0.1%  2.9%  1.3%  0.8%  0.0%  0.2%  0.0%  0.0%  0.2%  0.1%  0.0%  0.0%  0.0%  
China  0.0%  0.0%  0.0%  0.0%  0.6%  0.4%  0.3%  0.2%  0.0%  27.1%  40.7%  52.8%  62.0%  58.4%  59.0%  59.4%  
Thailand  91.9%  88.6%  96.3%  96.8%  92.7%  96.6%  97.8%  99.0%  99.6%  72.8%  57.2%  46.7%  37.9%  41.6%  40.9%  40.6%  
Others  5.5%  11% 3.7%  3.1%  3.8%  1.7%  1.1%  0.8%  0.2%  0.1%  2.1%  0.3%  0.0%  0.0%  0.1%  0.0%  
Tariff item 1602 39 40206 (merged with 1602 39 80 into tariff line 1602 39 85 effective 1 January 2012)  
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  0.0%  94.1%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  - - - - 
China  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  25.3%  - - - - 
Thailand  0.0%  0.0%  100.0%  98.3%  96.0%  99.6%  99.3%  90.8%  100.0%  95.1%  100%  74.7%  - - - - 
Others  100%  5.9%  0.0%  1.7%  4.0%  0.4%   0.7%  9.2%  0.0%  4.9%  0.0%  0.0%  - - - - 
                                               
203 These figures are based on Exhibit CHN -52. 
204 These figures reflect the information contained in Exhibit CHN -52 read in conjunction with the information contained in Exhibit EU -30 for the years 2000 and 2001. 
According to Exhibit EU -30, there were imports from unspecified Members in 2000 and 2001. We note that according to Exhibit EU -30, there was 1 tonne of imports under 1 602 39 
21 in the year 2009. According to Exhibit CHN -43, there was 1.2 tonnes of imports from Brazil for that same year. Exhibit CHN -52 also suggests that these imports originated in 
Brazil. Exhibit EU -43 only indicates the percentage of imports into the E uropean Union held by Thailand for this product.  
205 These figures are based on Exhibit CHN -52. 
206 These figures are based on Exhibit CHN -52.  
  WT/DS492/R  
 
- 60 -  
Tariff item 1602 39 80207 (merged with 1602 39 40 into tariff line 1602 39 85 effective 1 January 2012)  
Share  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  0.0%  4.2%  0.0%  0.0%  0.0%  0.0%  0.0%  2.3%  19.3%  0.0%  0.0%  0.0%  - - - - 
China  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  8.7%  17.6%  61.1%  - - - - 
Thailand  50.0%  95.8% 50.0%  95.0%  81.4%  99.6%  76.0%  96.6%  72.4%  88.7%  78.8%  38.8%  - - - - 
Others  50.0%  0.0%  50.0%  5.0%  18.6%  0.4%  24.0%  1.1%  8.3%  2.6%  3.6%  0.1%  - - - - 
Tariff item 1602 39 85208 (merged from tariff lines 1602 39 40 and 1602 32 80 effective 1 January 2012)  
Share 2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  
Brazil  (0.0%)  (8.5%)  (0.0%)  (0.0%)  (0.0%)  (0.0%)  (0.0%)  (1.6%)  (11.6%)  (0.0%)  (0.0%)  (0.0%)  0.0%  0.0%  0.0%  0.0%  
China  (0.0%)  (0.0%)  (0.0%)  (0.0%)  (0.0%)  (0.0%)  (0.0%)  (0.0%) (0.0%)  (3.9%)  (8.3%)  (52.8%)  82.5%  81.7%  80.9%  86.2%  
Thailand  (36.4%)  (87.7%)  (61.4%)  (97.9%)  (91.7%)  (99.6%)  (92.9%)  (95.8%)  (83.5%)  (92.2%)  (90.0%)  (47.1%)  17.1%  11.2%  10.1%  6.4%  
Others  (63.6%)  (3.8%)  (38.6%)  (2.1%)  (8.3%)  (0.4%)  (7.1%)  (2.6%)  (4.9%) (3.9%)  (1.7%)  (0.1%)  0.4%  7.1%  9.0%  7.4%  
 
 
 
 
 
 
 
 
 
 
                                               
207 These figures are based on Exhibit EU -44 for the years 2000 -2006, and on Exhibit CHN -52 for the years 2007 -2011. We  note that the figures provided by the parties 
generally align for the years 2007, 2008, 2009, 2010, and 2011. As already noted, however, there are significant discrepancie s between the information provided in Exhibit CHN -
52 and Exhibit EU -44 regarding the  share of imports into the European Union under tariff line 1602 39 80  in the years 2000 -2006.  More specifically: (i) Exhibit CHN -52 indicates 
that Thailand accounted for 37.9% of imports into the European Union in 2000; however, according to Exhibit EU -44, in 2000, Thailand accounted for 6 of the 12 tonnes imported 
(i.e. 50%); (ii) Exhibit CHN -52 indicates that Thailand and Brazil respectively accounted for 17.9% and 0.5% of imports into the EU in 2001; however, acco rding to Exhibit EU -44, 
in 2001, Thaila nd accounted for 23 of the 24 tonnes imported (i.e. 95.8%) and Brazil accounted for the remaining 4.2%; (iii) according to Ex hibit CHN -52, Thailand accounted for 
21.1% of imports into the European Union in 2002; however, according to Exhibit EU -44, in 2002 , Thailand accounted for 74 of the 128 tonnes imported into the EU (i.e. 5 7.8%); 
(iv) Exhibit CHN -52 indicates that Thailand accounted for 37.6% of imports into the European Union in 2003; however, according to Exhibit EU -44, in 2003, Thailand accounted fo r 
134 of the 141 tonnes imported (i.e. 95.0%); (v) Exhibit CHN -52 indicates that Thailand accounted for 38.1% of imports into the European Union in 2004; however, according to 
Exhibit EU -44, in 2004, Thailand accounted for 162 of the 199 tonnes imported (i .e. 81.4%) ; (vi) Exhibit CHN -52 indicates that Thailand and China respectively accounted for 
46.2% and 17.6% of imports into the European Union in 2005; however, according to Exhibit EU -44, in 2005, Thailand accounted for 266 of the 267 tonnes imported in 2005 
(99.6%), and China exported no poultry products under tariff line 1602 32 80 (i.e. 0.0%); and (vii) Exhibit CHN -52 indicates that Thailand and China respectively accounted for 
31.5% and 30.5% of imports into the European Union in 2006; however, accord ing to Exhibit EU -44, in 2006, Thailand accounted for 209 of the 275 tonnes imported (76.0%), and 
China exported no poultry products under tariff line 1602 32 80 (i.e. 0.0%).  We understand that the discrepancy may be  due to the fact that China 's statistics  in Exhibits CHN -52 
(and Exhibit CHN -43) include imports into Bulgaria, Romania and Croatia made before those countries became Member States of the European Union, wh ereas the EU statistics do 
not include those imports.  
208 These figures are based on Exhibit  CHN-52. This average is based on Exhibit EU -43, which provides merged statistics for tariff line 1602 39 85 including for years prior to 
the merger of tariff lines 1602 39 40 and 1602 39 80 (effective 1 January 2012). Exhibit CHN -52 does not provide merge d statistics for the tariff lines 1602 3940 and 1602 39 80 
prior to their merger effective 1 January 2012.  WT/DS492/R  
 
- 61 - 
 
  7.3  Terms of reference issues  
7.3.1   Introduction  
7.99.  According to the European Union, China has advanced certain claims of violation in the 
course of the proceedings that are  not identified in the panel request, and which therefore fall 
outside of the Panel 's terms of reference.  
7.100.   In its first written submission, the European Union requested that the Panel make a 
preliminary ruling that the following claims advanced by China in its first written submission fall 
outside of the scope of the Panel 's terms of reference:  
a. China 's claim that European Union violated the chapeau of Article XIII:2 by allocating 
small TRQ shares to "all others ", at levels that do not allow these countries going 
forward to achieve substantial  supplying interest status209; and  
b. China 's claim that the European Union violated the chapeau of Article XIII:2, and Article 
XIII:4, by not explicitly identifying the data that it took into account to determine the 
TRQs.210  
7.101.   During the second meeting of the  Panel, and in its responses and associated comments to 
the second set of questions, the European Union argued that two other issues fall outside of the 
Panel 's terms of reference:  
c. China 's claim s, developed in its second written submission, that the Eur opean Union 
violated Article XIII:1 and the chapeau of Article XIII:2 by failing to annually review and 
adjust the TRQ allocations on an ongoing basis to reflect recent trade developments211; 
and,  
d. any claim by China that the European Union violated parag raph 7 of the Procedures for 
Negotiations under Article XXVIII or paragraph 1 of the Procedures for Modification and 
Rectification of Schedules.212 
7.102.   We recall that Article 6.2 of the DSU establishes the requirements that apply to a panel 
request. Article 6.2 provides that a panel request "shall be made in writing ", "shall indicate 
whether consultations were held ", "identify the specific measures at issue " and "provide a brief 
summary of the legal basis of the complaint sufficient to present the problem clearly ".  
7.103.   With respect to each of the issues identified above, the European Union has indicated that 
China 's panel request fails to satisfy the requirements of Article 6.2 of the DSU.213 However, we 
understand the European Union to be arguing that the issues raise d by China are "new claims " 
that fall outside of the scope of the panel request, and not that there is any defect in the panel 
request itself.214 Thus, the terms of reference issues before us are not about the adequacy of one 
or more items of the panel reque st judged against the requirements of Article 6.2 , but rather 
about whether the complaining party has broadened the scope of the measures or claims in the 
dispute by advancing new claims as compared with those identified in the panel request.  
                                               
209 EU's first written submission, para. 7. See also paras. 239 -249. 
210 EU's first written submission, para. 8. See also paras. 269 -270.   
211 EU's openin g statement at the second meeting of the Panel, paras. 33 -35. See also the EU's 
comments on China's response to Panel question No. 121, paras. 58 -67. 
212 EU's response to Panel question No. 100, paras. 61 -64.  
213 EU's first written submission, paras. 239, 270 ; EU's response to Panel question No. 100, para. 63; 
EU's comments  on China's response to Panel question No. 121(b), para. 67.   
214 At the first meeting, the Panel asked the European Union to clarify whether it was arguing that one 
or more items of the pane l request itself failed to meet the requirements of Article 6.2 (and if so, to specify 
which items of the panel request fail to meet which requirement of Article 6.2), or instead that the panel 
request itself may meet the requirements of Article 6.2, but t hat China's first written submission challenged 
new measures or claims that fall outside of the scope of the panel request (Question 1(a) of the set of 
questions sent to the parties in advance of the first meeting). The European Union responded that China' s first 
written submission developed legal claims that were not mentioned in the panel's request, and therefore 
constitute "new claims" falling outside of the Panel's terms of reference.  WT/DS492/R  
 
- 62 - 
 
  7.104.   China conside rs that some of the issues that the European Union characterizes as new 
"claims " are arguments in support of claims identified in the panel request. We recall that 
Article  6.2 of the DSU requires that the claims , but not the arguments in support of those c laims , 
must be identified in the panel request in order to allow the defending party and any third parties 
to know the legal basis of the complaint.215 In this regard, the Appellate Body has consistently 
distinguished between claims of violation and the arguments presented in support of those 
claims.216  
7.3.2   The scope of China 's claims under Article XIII of the GATT 1994  
7.3.2.1   China 's contention that the European Union violated the chapeau of 
Article  XIII:2 because it did not set the shares of the TRQs allocated to the "all others " 
category at sufficient levels  
7.105.   In its first written submission, China contends that the European Union violated the 
chapeau of Article XIII:2 because the shares of the TRQs allocated to the "all others " category are 
not sufficient to allow othe r WTO Members to obtain a substantial supplying interest going forward 
in the products covered by the TRQs.217 According to China, the chapeau of Article XIII:2 requires 
that the determination of the TRQs be a "dynamic process based on market developments " and 
not be "cast in stone "218, as evidenced by the possibility to request adjustments to the base period 
and reappraisal of special factors under Article XIII:4. For that reason, China argues, the shares of 
TRQs afforded to the "all others " category must be l arge enough to ensure that countries which did 
not receive a country -specific share are able to use their comparative advantages to achieve a 
substantial supplying interest in the future. China claims that by not allocating an "all others " 
share of at leas t 10% for all of the TRQs, the European Union violated the chapeau of 
Article  XIII:2.219 
7.106.   The European Union submits that this is a new claim that falls outside the Panel 's terms of 
reference because it was not identified in China 's panel request.220 The Europe an Union submits 
that China 's panel request only claims a violation of the chapeau of Article XIII:2 in connection 
with other provisions or paragraphs of Article XIII, including Article XIII:4, by using the 
expressions "including the chapeau " and "read in conjunction with ".221 According to the European 
Union, there is no "stand -alone ", independent claim of violation of the chapeau of Article XIII:2 in 
China 's panel request based on the purported obligation of a country establishing a TRQ to set 
aside a share for "all others " at levels sufficient to allow these countries going forward to obtain a 
substantial supplying interest.222 The European Union submits that there is nothing in the panel 
request hinting at that obligation, or at how or why the measure at issu e might be considered by 
China to violate such an obligation, nor is there mention of such a dynamic interpretation of the 
chapeau.223 In this regard, the European Union notes that the chapeau "does not impose a clear 
cut obligation whose contours are easily  understandable from its wording ", and that China 's itself 
"reads in the chapeau of Article XIII:2 several distinct obligations with a very different content ".224 
Moreover, the European Union considers that item (vii) of China’s panel request alleges that th e 
chapeau of Article XIII:2, together with Article XIII:4, have been violated because the European 
                                               
215 Appellate Body Report, EC – Bananas III, paras. 141 - 143. 
216 See, e .g., Appellate Body Reports, China – Raw Materials , para. 220;  Appellate Body Report, 
Dominican Republic — Import and Sale of Cigarettes , para. 121.  
217 China's first written submission, paras. 208 et seq , section IV.3.c., entitled "the EU violated the 
chape au of Article XIII:2 because it did not establish the level of the TRQs for all other countries at levels that 
allow these countries going forward to achieve a substantial interest as suppliers of the products subject to the 
TRQs." See also China's first w ritten submission, para. 280(8).  
218 China's first written submission, para. 209.  
219 China claims that this also violates Article XIII:1. The European Union has not argued that the claim 
under Article XIII:1 falls outside of the scope of the Panel's terms of reference.  
220 EU's first written submission, paras. 238 -248 and EU's opening statement at the first substantive 
meeting of the Panel, para. 27.  
221 See China's request for the establishment of a panel, items (v) (vii) of Sections II.A. and II.B. See 
EU's firs t written submission, paras. 246 -247 and EU's opening statement at the first substantive meeting of 
the Panel, paras. 38 et seq . 
222 EU's first written submission, para. 247; EU's opening statement at the first substantive meeting of 
the Panel, para. 43.  
223 EU's first written submission, para. 248, EU's opening statement at the first substantive meeting of 
the Panel, para. 45.  
224 EU's opening statement at the first substantive meeting, paras. 32 -33. WT/DS492/R  
 
- 63 - 
 
  Union has not ensured that the base period is selected and special factors are taken into account 
such as to allot to Members a TRQ that approaches as close as possible the shares that they might 
be expected to obtain in the absence of the TRQs. Hence, the references to Article XIII:4, to the 
base period and to special factors are not described in the panel request as mere examples, but 
constitute defining fea tures of the obligation described in item (vii) of China’s panel request, 
which, according to China, the E uropean Union  has violated .225 China’s claim that the European 
Union violated the chapeau of Article XIII:2 because the shares of the TRQs allocated to the "all 
others" category are not sufficient to allow other WTO Members to obtain a substantial supplying 
interest going forward in the products covered by the TRQs is completely independent from the 
need to make adjustments to the base period selected and  reappraise special factors in accordance 
with Article XIII:4.226  
7.107.   According to China, its contention that the European Union violated the chapeau of 
Article  XIII:2 by failing to allocate an adequate "all others " share sufficient to allow other WTO 
Members t o obtain a substantial supplying interest going forward is an argument in support of the 
claim presented in item (vii) of Section II.A and item (vii) of Section II.B of its panel request.227 
Item (vii) sets forth the claim that "the allocation of all or the vast majority of the TRQs to two of 
the WTO Members " is inconsistent with "Article XIII:2, including its chapeau, read in conjunction 
with Article  XIII:4 ". According to China, the panel request thus makes clear that the consistency of 
the TRQs with the cha peau of Article XIII:2 is challenged, even if the words "including the 
chapeau " are used.228 China also considers that the chapeau of Article XIII:2 contains a single, 
distinct obligation that requires Members to "aim at a distribution of trade in such produ ct 
approaching as closely as possible the shares which the various contracting parties might be 
expected to obtain in the absence of such restrictions. "229 While China recognizes that it has 
alleged several different violations of the chapeau of Article XIII :2, it explains that this is not 
because the provision of the chapeau contains several distinct obligations, but because the sole 
requirement that it contains was violated in several different ways by the European Union.230 
7.108.   The main issue before the Panel is  whether China 's contention that the European Union 
violated the obligation in the chapeau of Article XIII:2 by failing to allocate the "all others " shares 
at a levels sufficient to allow other Members to obtain a substantial supplying interest is properly  
characterized as a new claim, in which case it would fall outside the Panel 's terms of reference, or 
rather as an argument in support of the claim included in item (vii) of China 's panel request.  
7.109.   We note that China 's panel request is divided into two sec tions. Section I identifies the 
measures at issue, and Section II identifies the legal basis for the complaint. Section II.A presents 
the claims of violation in respect of the First Modification Package, and Section II.B presents the 
claims of violation in  respect of the Second Modification Package. Items II.A(vii) and II.B(vii) set 
forth the following claim:  
The allocation of all or the vast majority of the TRQs to two of the WTO Members  as 
implemented by the EU in the measures identified above is inconsi stent with GATT 
1994 Article XIII:2, including its chapeau , read in conjunction with Article XIII:4, 
which confirms that the base period must be selected and special factors must be 
taken into account such as to allot to Members a TRQ that approaches as cl osely as 
possible the shares that they might be expected to obtain in the absence of the TRQs. 
(emphasis added)  
7.110.   First, we observe that item (vii) specifies that the violation arises from "the allocation of all 
or the vast majority of the TRQs to two of the  WTO Members ", i.e. to Brazil and Thailand. While 
the European Union argues that there is nothing in the panel request to suggest a claim that the 
chapeau of Article XIII:2 contains an obligation to allocate a share of the TRQ to an "all others " 
category s o as to allow other countries going forward to achieve a substantial interest, we consider 
that item (vii) of China 's panel request clearly alleges a violation on the basis of the "allocation of 
all or vast majority of the TRQs to two of the WTO Members ". The contention that the European 
                                               
225 EU's opening statement at the first substantive meeting of t he Panel, para s. 39-42. 
226 EU's opening statement at the first substantive meeting of the Panel, para s. 43 and 45.  
227 China's response to the EU's request for preliminary rulings, para. 4.  
228 China's response to the EU's request for preliminary rulings, para.  6. 
229 China's response to the EU's request for preliminary rulings, para. 11.  
230 China's response to the EU's request for preliminary rulings, para. 13.  WT/DS492/R  
 
- 64 - 
 
  Union did not "allocate a share for 'all other ' countries at levels sufficient to allow these countries 
going forward to achieve a substantial interest " is closely related to the contention that the 
European Union failed to  allocate a sufficiently large amount of the TRQ shares to the "all others " 
category, and instead allocated "all or the vast majority of the TRQs to two of the WTO Members ". 
In our view, it is an elaboration of why China considers that "the allocation of a ll or the vast 
majority of the TRQs to two Members " violates the chapeau of Article XIII:2.  
7.111.   Second, we observe that item (vii) states that the allocation of all or the vast majority of 
the TRQs to two Members "is inconsistent with GATT 1994 Article XIII:2 , including its chapeau ". 
We consider that the claim of violation of "GATT Article XIII:2, including its chapeau, read in 
conjunction with Article XIII:4 " is not a model of clarity in drafting. However, we do not consider 
that the phrase "read in conjuncti on with Article XIII:4 " negates the express claim based on the 
chapeau of Article XIII:2. In this regard, we note that item (vii) of the panel request not only 
references "Article XIII:2, including its chapeau ", but also reproduces the actual wording of th e 
obligation that is provided for in the chapeau, namely to "allot to Members a TRQ that approaches 
as closely as possible the shares that they might be expected to obtain in the absence of the 
TRQs".  
7.112.   Third, to the extent that the European Union 's objecti on is grounded on the premise that 
the chapeau of Article XIII:2 contains multiple, distinct obligations, we disagree. In our view, 
Article XIII is an example of a provision that contains multiple, distinct obligations as set forth in 
Article XIII:1, the c hapeau of Article XIII:2, the sub -paragraphs of Article XIII:2, the sub -
paragraphs of Article XIII:3, and Article XIII:4. However, we read the chapeau of Article XIII:2  as 
containing a single obligation, namely, that in applying import restrictions to any product, 
Members "shall aim at a distribution of trade in such product approaching as closely as possible 
the shares which the various Members might be expected to obtain in the absence of such 
restrictions ".  
7.113.   The Panel considers that, based on the wording  of item (vii) of the panel request, China 's 
contention that the European Union violated the chapeau of Article XIII:2 by failing to set aside 
TRQ shares for "all others " at levels that allow other WTO Members to achieve a substantial 
supplying interest st atus going forward falls within the scope of the panel 's terms of reference.  
7.3.2.2   China 's contention that the European Union violated the chapeau of 
Article  XIII:2 and Article XIII:4 because it failed to disclose the trade data it used to 
determine the TRQs  
7.114.   In its first written submission, China contends that the European Union violated the 
chapeau of Article XIII:2 and Article XIII:4 by not disclosing the data that it took into account to 
determine the TRQs. More precisely, China submits that none of the inst ruments, regulations or 
decisions adopted by the European Union with respect to the First and Second Modification 
Packages "describe with any degree of precision the historical trade data " relied upon by the 
European Union to determine the TRQs allocated t o specific countries and the TRQs allocated to all 
other countries.231 China contends that there is no indication of how the European Union calculated 
the amount of the TRQs under paragraph 6 of the Understanding on the Interpretation of 
Article  XXVIII, and that this violates the chapeau of Article XIII:2.232 China also contends that the 
European Union violated Article XIII:4 by failing to disclose the representative period taken into 
account to determine the TRQS, and whether "special factors " were considered.233 
7.115.   The European Union submits that these are new claims that fall outside the scope of the 
Panel 's terms of reference. The European Union argues that nothing in China 's panel request, 
including in the claims listed in items (v) and (vii) of Section II.A reg arding the First Modification 
Package, and the corresponding claims in items (v) and (vii) of Section II.B regarding the Second 
Modification Package, indicate that the European Union violated the chapeau of Article XIII:2 or 
Article XIII:4 by failing to di sclose the data that it took into account to determine the shares in the 
TRQs.234 The European Union submits that the text of the chapea u of Article XIII:2, of 
Article  XIII:4 and of paragraph 6 of the Understanding do not refer to any obligation to disclose 
                                               
231 China's first written submission, para. 217.  
232 China's first written submission, para. 218.  
233 China's first written submission, para. 222.  
234 EU's first written submission, para. 268.  WT/DS492/R  
 
- 65 - 
 
  the trade data upon which the allocation of the TRQ is made. The European Union argues that "a 
simple reference to those provisions did not allow the European Union to anticipate that China 
intended to refer to the violation of the alleged disclosure oblig ation".235  
7.116.   China responds that these are not new claims, but rather an argument in support of 
China 's claims in items (v) and (vii) of Section II.A and Section II.B of its panel request. In these 
items of China 's panel request, China claims that "the alloca tion of all or the vast majority of the 
TRQs to two Members " violates "Article XIII:2 read in conjunction with the Understanding on the 
Interpretation of Article XXVIII and in particular Paragraph 6 thereof " (item (v) of the panel 
request), and "Article XI II:2, including its chapeau, read in conjunction with Article XIII:4 " (item 
(vii) of the panel request).236 China submits that compliance with these obligations "requires 
disclosure of the basis and data taken into account for the determination of the TRQs ".237 Thus, 
China considers that its contention that the European Union violated these provisions by failing to 
disclose the data used to determine the TRQs are properly characterized as arguments in support 
of its claims under these provisions.   
7.117.   According to  China, its contention that the European Union violated the chapeau of 
Article  XIII:2 and Article XIII:4 because it failed to disclose the data used to determine the TRQs is 
an argument in support of the claim set forth items II.A(v) and (vii) and II.B(v) and (vii) of the 
panel request. The main issue before the Panel is whether China 's contention that the European 
Union violated the obligation in the chapeau of Article XIII:2 and Article XIII:4 by failing to 
disclose the data used to determine the TRQs is properly characterized as a new claim that is 
outside the Panel 's terms of reference, or rather as an argument in support of the claims included 
in items (v) and (vii) of China 's panel request.   
7.118.   We have already examined item (vii) of the panel request abo ve, in the context of 
examining the first terms of reference issue raised by the European Union. We recall that item (vii) 
of the panel request reads as follows:  
The allocation of all or the vast majority of the TRQs to two of the WTO Members  as 
implemente d by the EU in the measures identified above is inconsistent with GATT 
1994 Article XIII:2, including its chapeau, read in conjunction with Article XIII:4 , 
which confirms that the base period must be selected and special factors must be 
taken into account such as to allot to Members a TRQ that approaches as closely as 
possible the shares that they might be expected to obtain in the absence of the TRQs. 
(emphasis added)  
7.119.   Item (v) of the panel request also concerns the "allocation of all or the vast majority o f the 
TRQs to two Members ". It reads as follows:  
The allocation of all or the vast majority of the TRQs  to two of the WTO Members  as 
implemented by the EU in the measures identified above is inconsistent with the 
chapeau of GATT 1994 Article XIII:2  read i n conjunction with the Understanding on 
the Interpretation of Article XXVIII and in particular Paragraph 6 thereof , which 
requires the allocation of a TRQ to approach  as closely as possible the shares that the 
WTO Members might be expected to obtain  in the  absence of the TRQs . (emphasis 
added)  
7.120.   First, we observe that items (v) and (vii) of the panel request make no reference to the 
disclosure of data, or to any alleged failure by the European Union to disclose historical trade data, 
or to disclose any other type of information. Rather, items (v) and (vii) both specify that the 
violation of the cited provisions arises from "the allocation of all or the vast majority of the TRQs to 
two of the WTO Members ", i.e. to Brazil and Thailand. In addition, none of the p rovisions of the 
GATT 1994 cited in these items of the panel request make reference to the disclosure of data. 
Furthermore, the manner in which the panel request summarizes the obligations in the chapeau of 
Article XIII:2, Article  XIII:4 and paragraph 6 of  the Understanding makes no reference to any 
obligation in these provisions, express or implied, to disclose information.  
                                               
235 EU's opening statement at the first meeting of the Panel, para. 55.  
236 China's response to the EU's request for preliminary rulings, para. 22; China's response to Panel 
quest ion No. 91, para. 61.  
237 China's response to the EU's request for preliminary rulings, para. 26.  WT/DS492/R  
 
- 66 - 
 
  7.121.   In addition, we note that the alleged omission at issue – the failure by the European Union 
to disclose certain data – is not identif ied as one of the challenged measures listed in Section I of 
China 's panel request. As noted above, China 's panel request is separated into two sections. 
Section I identifies the measures at issue, and Section II identifies the legal basis for the 
complain t. The scope of China 's claims must be discerned by reading the relevant items in 
Sections II .A and II.B of the panel request, together with the identification of the measures at 
issue in Section I of the panel request. We do not see in the measures listed  in Section I of China 's 
panel request any reference to the European Union 's failure to disclose the historical trade data, 
the selection of a base period and how special factors were appraised.  
7.122.   Throughout its submissions in these proceedings, China has p resented the alleged failure 
to disclose data as the action or omission that constitutes the viol ation of the chapeau of 
Article  XIII:2 and Article XIII:4, and not as an explanation of why some other action or omission is 
inconsistent with these provisions . In this regard, we observe that the section of China 's first 
written submission developing this claim is entitled "The EU violated the chapeau of Article XIII:2 
and Article XIII:4 by not explicitly identifying the data that it took into account to determ ine the 
TRQs".238 In its first written submission, China requests a finding that "By not explicitly identifying 
the data that it took into account to determine the TRQs, the EU violate[d] the chapeau of 
Article  XIII:2 and Article XIII:4 ".239 The corresponding section of its second written submission is 
entitled, "The chapeau of Article XIII:2 and Article XIII:4 Were Violated By Not Explicitly 
Identifying The Data That The European Union Took Into Account To Determine The Tariff Rate 
Quotas ".240 The requirement of  disclosure, as advanced by China throughout its submissions, is 
presented as a constitutive element of its claim of violation under the chapeau of Article XIII:2 and 
Article XIII:4.  
7.123.   Based on the foregoing, the Panel considers that China 's contentions tha t the European 
Union violated the chapeau of Article XIII:2 and Article XIII:4 by failing to proactively disclose the 
historical trade data, the reference period selected and how special factors were appraised are new 
claims that fall outside the Panel 's terms of reference.  
7.124.   In any event, the Panel considers that there is no textual basis to conclude that either the 
chapeau of Article XIII:2 or the provisions of Article XIII:4 impose an obligation on a Member 
adopting a TRQ to proactively disclose the histo rical trade data which was relied upon to determine 
the TRQ allocation, the representative period selected or the special factors considered.  
7.125.   No such obligation is identified in the text of either provision. Beginning with the obligation 
in the chapeau Ar ticle XIII:2, we note that the text of this provision does not explicitly or implicitly 
refer to the disclosure of any information. It refers to the obligation applicable to a Member 
imposing a TRQ "to aim at a distribution of trade in such product approac hing as closely as 
possible the shares which the various Members  might be expected to obtain in the absence of such 
restrictions ". The Panel cannot read these words to suggest an obligation to proactively disclose 
the import data used by a Member to determ ine and allocate TRQs. Article XIII:4 provides for the 
possibility for a Member holding a substantial interest in supplying a product that is subject to an 
import restriction to request consultations "regarding the need for an adjustment of the proportion 
determined or of the base period selected , or for the reappraisal of the special factors involved ". 
There is nothing in the wording of Article XIII:4 that suggests in any way that the Member 
imposing a TRQ must "explicitly identify ", or proactively disclos e, any information. Article XIII:4 
rather empowers a Member holding a substantial interest to undertake a certain action, which is to 
request consultations with the Member imposing the TRQ. It also obliges the Member imposing the 
TRQ to "consult promptly " upon request. A requirement to proactively disclose certain information 
relating to the historical trade data, the reference period and the consideration of special factors, if 
any, is not mentioned in the text of Article XIII:4.  
7.126.   Turning to the context of these provisions, the Panel notes that other provisions of the 
GATT 1994 contain express disclosure and publication obligations which are applicable to TRQs. 
Notably, Article XIII:3(b) states that Members "applying restrictions shall give public notice of the 
total quantity or value of the product or products which will be permitted to be imported during a 
specified future period and of any change in such quantity or value ". Article XIII:3(c) requires that 
                                               
238 China's first written submission, section IV.B.3.d.  
239 China's first written submission, para. 280(9).  
240 China's second written submission, section IV.D.  WT/DS492/R  
 
- 67 - 
 
  Members allocating TRQs among supplying countries "shall promptly inform all other Members  
having an interest in supplying the product concerned of the shares in the quota currently 
allocated, by quantity or value, to the various supplying countries and shall give public notice 
thereof ". These provisions, which apply to a Member imposing a TRQ, do not refer to any 
requirement to proactively disclose the historical trade data upon which the TRQ was determined, 
or of the selection of the base period or consideration of special factors. More generally, Article  X:1 
obliges Members to ensure that trade regulations pertaining to rates of duty and restrictions on 
imports "be published promptly in such a manner as to enable governments or traders to become 
acquainted with them ". The existence of these other provisio ns of the GATT 1994 that expressly 
require the disclosure or publication of information precludes us from reading disclosure 
obligations into the chapeau of Article XIII:2 or Article XIII:4, especially insofar as such proactive 
disclosure obligations would  be of a more far -reaching scope than those expressly provided for in 
Article XIII:3(b) and (c), and Article X:1 of the GATT 1994.  
7.127.   Based on the foregoing, even if the Panel were to find th at the p anel request covers these 
claims, the Panel would be compel led to reject China 's claims that the European Union violated the 
chapeau of Article XIII:2 and Article XIII:4 by failing to proactively disclose the data that it took 
into account to determine the TRQs in the instruments, regulations or decisions adopted by the 
European Union with respect to the First and Second Modification Packages.  
7.3.2.3   China 's contention that the European Union violated Article XIII:1 and the 
chapeau of Article XIII:2 by failing to annually review and reallocate the TRQ shares  
7.128.   In its seco nd written submission, China claimed that the failure by the European Union to 
update and reallocate the TRQ shares annually was inconsistent with Article XIII:1 and 
Article  XIII:2(d).241 More precisely, China stated that TRQ shares had to be reviewed and ad justed 
"from time to time "242; "before a new quota year starts "243; "preceding each allocation "244; "when 
trade developments occur and the allocated shares are no longer representative of the import of a 
WTO Member in the absence of the TRQs "245; and "over time ".246 China explained that in this 
dispute, it advances two categories of claims regarding the allocation of shares in the TRQs:  
China makes claims under Article XIII challenging the initial allocation of shares in the 
TRQs in the First and the Second Modificat ion Packages but also challenges the 
ongoing application thereof from quota year to quota year without  adjustment in light 
of trade developments such that the allocated shares in the TRQs no longer reflect the 
shares WTO Members would have had in the absen ce of the TRQs. China submits that 
(i) the allocated shares in the TRQs as applied by the European Union since 2007 and 
2012 respectively  and going forward during their period of validity must be updated 
from time to time to reflect the share that each WTO  Member could have had without 
the TRQs and (ii) such updating must be based on trade flows during a representative 
period preceding the continued application of the allocated shares.247 (emphasis 
original)  
7.129.   At the second meeting with the Panel, the European Union indicated that China 's challenge 
to the ongoing application of the TRQs from quota year to quota year, without adjustment in light 
of trade developments, is a new claim which "has not been made before, either in China 's Panel 
request, or in its first  written submission, or elsewhere. It is therefore manifestly outside the 
Panel 's terms of reference. "248 
7.130.   In its responses to the second set of questions249, China indicated that these claims are 
covered by items (iii), (iv), (v), (vi), (vii) of Section II.B o f the panel request, regarding the 
Second Modification Package, read together with the footnotes accompanying some of these items. 
China recalled that "[t]he allocation of all or the vast majority of the TRQs to two of the WTO 
                                               
241 China's second written submission, paras. 127 and 175.  
242 China's second written submission, para. 121.  
243 China's second written submission, para. 127.  
244 China's second written submission, para. 137; see also para. 147 . 
245 China's second written submission, pa ra. 165.  
246 China's second written submission, para. 196.  
247 China's second written submission, para. 121.  
248 EU's opening statement at the second meeting of the Panel, para. 33.  
249 China's response to Panel question No. 121(b); China's response to the EU's question No. 1(a).  WT/DS492/R  
 
- 68 - 
 
  Members as implemented in the  measures and decision mentioned above " is the aspect of the 
measures being challenged. China observed that the allocation of all or the vast majority of the 
TRQs to two of the WTO Members has remained in place in the years 2013 -2015, and that this 
TRQ sha re allocation was implemented in the measures and decisions mentioned in Section I.B of 
the panel request. China notes that the measures identified in that section, e.g. Commission 
Regulation (EU) No 1246/2012 of 19 December 2012, were in effect in the yea rs 2013 -2015 and 
are still effective now.  
7.131.   In its comments on China 's response250, the European Union responded, inter alia , that the 
panel request shows that what is challenged is only the initial allocation of the TRQ shares by the 
European Union at the mo ment of opening those TRQs, and that the panel request makes no 
reference to any obligation to periodically review and adjust the allocation.  
7.132.   Beginning with the text of China 's panel request, we note that the claims under 
Article  XIII:1 and Article XIII:2 as set forth in section II.B of the panel request all refer to the 
"allocation of all or the vast majority of the TRQs to two Members ".251 We consider that the 
reference to the "allocation of all or the vast majority of the TRQs to two Members ", if taken alo ne, 
is broad enough to embrace a claim of violation not only in respect the initial allocation of shares 
in the TRQs in the First and the Second Modification Packages, but also a claim of violation in 
respect of a failure to annually review and reallocate the TRQs from quota year to quota year to 
take account of trade developments. The items referring to the "allocation of all or the vast 
majority of the TRQs to two Members " are not temporally limited in a way that would confine the 
scope of the claims only  to the initial TRQ allocation.  
7.133.   However, we consider that the scope of China 's claims must be discerned by reading the 
relevant items in Section II.B of the panel request together with the identification of the measures 
at issue in Section I of the panel request. And, having carefully reviewed Section I of the panel 
request, we do not see any reference to the European Union 's failure to annually review and 
reallocate the TRQs from quota year to quota year to take account of trade developments as one 
of the  challenged measures at issue. These claims pertain to a measure in the form of an 
omission, namely, the failure by the European Union to update and reallocate the TRQ shares set 
forth in the measures identified in Section I of the panel request. This omis sion is not identified as 
one of the measures at issue in Section I of the panel request. In our view, the identification of the 
regulations as the measures at issue does not, by implication, encompass claims relating to the 
European Union 's subsequent fai lure to modify the TRQ allocations provided for in those 
instruments.  
7.134.   China points out that the items in Section II.B advancing claims under Article XIII:1 and 
Article XIII:2 refer to the "allocation of all or the vast majority of the TRQs to two Members ", and 
are accompanied by a cross -reference back to the following "decision " that is identified in Section 
I.B(iv) of the panel request:  
Refusal by the EU in consultations held on 19 May 2014 under Article XIII of 
GATT  1994 to adjust the TRQs on the basis o f recent import statistics establishing 
China 's substantial supplying interests as had been requested by letter of Ambassador 
Yu of 19 December 2013.  
7.135.   We agree that, by virtue of its inclusion in Section I.B(iv) of the panel request, this alleged 
refusal to  adjust the TRQs in consultations held on 19 May 2014 is a measure at issue in this 
dispute. We further note that items (iv), (v), and (vi) of Section II.B of the panel request each 
explicitly refers back to this decision, either in the body text of the it em or in an accompanying 
footnote. However, we do not consider that this supports China 's argument that the ongoing 
application of the TRQs from quota year to quota year, without adjustment, is a claim identified in 
                                               
250 EU's comments on China's response to Panel question No. 121(b).  
251 See items (iv), (v), (vi) and (vii) of Section II.A of the panel request, and items (iv), (v), (vi) and 
(vii) of Section II.B of the panel request. Item (iii) of the pane l request states that "[t]he country -specific TRQs 
allocated by the EU to two of the WTO Members as implemented in the measures and decision mentioned 
above  violate GATT 1994 Article XIII by diminishing for the other WTO Members the market access 
commitmen ts that the EU undertook to maintain on a non -discriminatory basis". This item contains no 
reference to any subparagraph of Article XIII, and it is not clear which of the various paragraphs and 
obligations of Article XIII would be linked to "diminishing fo r the other WTO Members the market access 
commitments that the EU undertook to maintain on a non -discriminatory basis".  WT/DS492/R  
 
- 69 - 
 
  the panel request. To the contrary, the specific measure identified in Section I.B(iv) is the 
European Union 's refusal, in May 2014, following a request for consultations under Article XIII:4 
dated 19 December 2013, to adjust the TRQs on the basis of recent import statistics establishing 
China 's substantial supplying interest. The "recent import statistics " referred to in the 
19 December 2013 letter were statistics "in the most recent years prior to the adoption of the new 
tariff regime ".252 Section I.B(iv) does not identify, as a measure at issue in this dispute, the failure 
by the European Union to annually review and reallocate the TRQs from year to year, on its own 
initiative.253  
7.136.   Furthermore, we consider that the evolution of China 's claims in its submissions reinforces 
the conclusion that these are new claims that were developed in the course of the proceedings. In 
its first written submission, China argued that in order to avoid a long -term freeze in the allocation 
of TRQ shares among supplying countries, Article XIII:1 and the chapeau of Articl e XIII:2 should 
be interpreted as requiring a Member to reserve at least a 10% share of the TRQ allocation to an 
"all others " category. In its first written submission, China did not refer to any obligation in 
Article  XIII:1 or XIII:2 to annually review an d reallocate the TRQs, and did not refer to any 
violation of those provisions arising from the European Union 's failure to do so in this case. In the 
context of responding to the argument that China made in its first written submission, the 
European Union  pointed out that allocating a minimum 10% TRQ share to "all others " would not 
necessarily prevent a permanent freeze in the allocation of TRQ shares among supplying countries, 
because one or more countries might proceed to capture the entirety of that "all others " share. 
The European Union explained that the way to avoid a permanent freeze would not therefore be to 
always allocate an "all others " share at a certain minimum level, as proposed by China, but rather 
by having some kind of "time-limit" on the v alidity of the allocation, or a "periodic review 
mechanism "; the European Union emphasized, however, that there is no such obligation in 
Article  XIII.254 In its second written submission, China then explained that it is also challenging the 
absence of any an nual review and adjustment of the TRQs at issue by the European Union. China 
subsequently explained that it "considered it unnecessary to explicitly draw a distinction between 
its challenges to the initial TRQ allocations and those against the continuous a pplication of these 
allocations without change in the subsequent periods, until it noticed that the EU overlooked the 
ongoing nature of the obligations in Articles XIII:1 and XIII:2 ".255  
7.137.   We understand that a claim or defence  being raised for the first time in a party 's second 
written submission is not, in and of itself, grounds for a panel declining to rule on such claim or 
defence.256 However, in this case China did not articulate any claims of violation based on the 
"ongoing " obligations in Article XIII:1 or  the chapeau of Article XIII:2 prior to its second written 
submission, and then did so apparently only in response to the European Union 's argument that 
the only way to avoid a permanent freeze in the allocation of TRQs would be through by having 
some kind  of "time-limit" on the validity of the allocation, or a "periodic review mechanism ". The 
manner in which China ' raised its claims regarding an alleged ongoing obligation under 
Article  XIII:1 and XIII:2 to annually reallocate TRQ shares reinforces the conc lusion, derived from 
the text of the panel request, that these are new claims.  
7.138.   Based on the foregoing, and in particular our analysis of the text of the panel request, we 
conclude that China 's claims that the European Union violated Article XIII:1 and the  chapeau of 
Article XIII:2 by failing to annually update the initial TRQ allocations constitute new claims that are 
not identified in the panel request, and which therefore fall outside of the panel 's terms of 
reference.  
7.139.   We note that in the present case, China has advanced several claims under Article XIII in 
connection with the absence of any adjustment to the initial TRQ allocation following the opening 
of the TRQs. These claims include, in addition to those under consideration here, China 's claim that 
the European Union violated Article XIII:4 by refusing to enter into "meaningful consultations " with 
                                               
252 Letter of 19 December 2013 requesting consultation under Article XIII:4 of the GATT 1994 (Exhibit 
CHN-39). See paragraph 7.79. 
253 We recall that panels may apply the rule of interpretation expressio unius est exclusio alterius , i.e. to 
express or include one thing implies the exclusion of the other, when determining whether a particular claim i s 
covered by a panel request. See Panel Reports, China – Publications and Audiovisual Products , para. 7.60; 
China – Raw Materials , para. 7.49, footnote 91.   
254 EU's first written submission, para. 263.  
255 China's response to the EU's question No. 1(b).  
256 See, e.g., Appellate Body Report, US – Gambling , paras. 270 -273. WT/DS492/R  
 
- 70 - 
 
  China concerning the need for an adjustment of the TRQ shares, the reference period selected, or 
the appraisal of special factors.  
7.140.   It is not in dispute tha t China 's claim under Article XIII:4, regarding the European Union 's 
alleged refusal to enter into "meaningful consultations ", falls within the scope of our terms of 
reference. Accordingly, we address the merits of that claim in our Report.257 In the course of 
addressing the merits of that claim, we are confronted with the same fundamental legal issue that 
we would be confronted with in the event that we were to reach the merits of the claims under 
consideration here. That issue is whether, in cases where a TRQ has been allocated among 
supplying countries on the basis of historical market shares in accordance with Article XIII:2(d), 
there is a legal obligation on the importing Member to reallocate TRQ shares among supplying 
countries to reflect an updated refe rence period or a reappraisal of special factors, and if so, 
whether there is a requirement that such reallocation occur within any particular time -frame.  
7.141.   In the course of addressing China 's claim under Article XIII:4 regarding the absence of 
"meaningful consultations ", we conclude that in cases where a TRQ has been allocated among 
supplying countries on the basis of historical market shares,  there is no legal obligation on the 
importing Member to reallocate TRQ shares among supplying countries to reflect  an updated 
reference period or a reappraisal of special factors, or at least not within any particular time -frame 
or with any particular frequency. Therefore, even if we were to find that the panel request includes 
China 's claims that the European Union v iolated Article XIII:1 and Article XIII:2 by failing to 
annually update the initial TRQ allocations, we would be compelled to reject those claims on the 
merits.  
7.3.3   The scope of China 's claims relating to certification  
7.142.   China claims that the European Union 's application of the higher out -of-quota tariff rates 
arising from the First and Second Modification Packages are in violation of Article II:1 of the GATT 
1994 because they exceed the bound rates currently inscribed in the European Union 's schedule of 
conces sions. This is so, China argues, because the changes agreed with Brazil and Thailand in the 
Article XXVIII negotiations have not yet been incorporated into the text of the European Union 's 
schedule through the certification procedure, and therefore are leg ally ineffective to replace the 
existing bound duties. In China 's view, the absence of certification means that the bound rates 
that existed in the Schedule prior to the completion of the Article XXVIII negotiations remain 
unchanged, from which it follows that the European Union 's application of the higher out -of-quota 
tariff rates violates Article II:1.  
7.143.   It is not in dispute that the above claim falls within the scope of our terms of reference, 
and we address the merits of that claim elsewhere in our Repor t.258 In the course of presenting its 
arguments in support of that claim, however, China has made statements that might be construed 
as advancing additional claims of violation relating to the European Union 's alleged failure to 
respect certain requirements contained in the Procedures for Negotiations under Article XXVIII, 
and in the Procedures for Modification and Rectification of Schedules. In this section of our Report, 
we will consider whether any additional claims of violation stemming from the European Union 's 
alleged failure to respect these requirements are properly before the Panel.  
7.3.3.1   China 's contentions that the European Union did not respect paragraph 7 of the 
Procedures for Negotiations under Article XXVIII and paragraph 1 of the Procedures for 
Modi fication and Rectification of Schedules  
7.144.   In its panel request and in the course of these proceedings, China has made several 
statements relating to the European Union not respecting the requirements of paragraph 7 of the 
Procedures for Negotiations under A rticle XXVIII, and paragraph 1 of the Procedures for 
Modification and Rectification of Schedules.  
7.145.   Paragraph 7 of the Procedures for Negotiations under Article XXVIII provides that:  
                                               
257 See section  7.10 below.  
258 See section  7.11 below.  WT/DS492/R  
 
- 71 - 
 
  Contracting parties will be free to give effect to the changes agreed upon  in the 
negotiations as from the first day of the period referred to in Article XXVIII:1, or in 
the case of negotiations under paragraph 4 or 5 of Article XXVIII, as from the date on 
which the conclusion of all the negotiations have been notified as set ou t in 
paragraph  6 above. A notification shall be submitted to the secretariat, for circulation 
to contracting parties, of the date on which these changes will come into force . 
(emphasis added)  
7.146.   Paragraph 1 of the  Procedures for Modification and Rectification  of Schedules provides 
that: 
Changes in the authentic texts of Schedules annexed to the General Agreement which 
reflect modifications resulting from action under Article II, Article XVIII, Article XXIV, 
Article XXVII or Article XXVIII shall be certified by  means of Certifications. A draft of 
such change shall be communicated to the Director -General within three months after 
the action has been completed . (emphasis added)  
7.147.   In its panel request, China suggests that the European Union acted inconsistently with  
Article II as a result of the  European Union  having acted inconsistently with paragraph 7 of the 
Procedures for Negotiations under Article XXVIII  and paragraph 1  of the Procedures for 
Modification and Rectification of Schedules .259 The panel request states in relevant part :   
In the absence of notification for certification, notification of the date on which the 
changes to the goods schedule come into force to the WTO Secretariat, and 
notification of the draft modification to its Schedule, the EU acted incon sistently with 
the procedures set forth in paragraph 7 of the Procedures for Negotiations under 
Article XXVIII and paragraph 1 of the Procedures for Modification and Rectification of 
Schedules and Tariff Concessions . The absence of a notification for certi fication of the 
modified schedule and of the certification following notification and the other violations 
mentioned herein, results in the EU having acted inconsistently with GATT 1994 
Articles II:1 and II:2  by affording imports of poultry meat from China  less favorable 
treatment than that provided for in its Schedule.260 (emphasis added)  
7.148.   In its subsequent submissions in these proceedings, however, China did not request any 
findings of violation under paragraph 7 of the Procedures for Negotiations under Arti cle XXVIII or 
paragraph 1 of the Procedures for Modification and Rectification of Schedules. Instead, China 
argued that the European Union violated Article II because the changes agreed to in the 
Article  XXVIII negotiations had not been formally incorporat ed into the European Union 's Schedule 
of concessions through certification, and were therefore legally ineffective to replace its existing 
bound duties.261 In the concluding section of its first written submission, there is no reference to 
paragraph 7 of the  Procedures for Negotiations under Article XXVIII or paragraph 1 of the 
Procedures  for Modification and Rectification of Schedules , and China requested the Panel to make 
the following findings in relation to the claims under Article II:  
By applying the tar iffs and TRQs that have not been certified, have not been given 
formal effect and are thus ineffectual to replace the EU 's obligations under the 
unmodified schedule, the EU acts in violation of Article II:1 of the GATT 1994;  
By applying tariffs in excess o f the bound level, the EU acts in violation of Article II:1 
of the GATT 1994 .262  
                                               
259 China's request for the establishment of a panel, item (ix) of Secti on II.A and item (x) of 
Section  II.B. 
260 China's request for the estab lishment of a panel, item (ix) of Secti on II.A and item (x) of 
Section  II.B.  
261 China's arguments in relation to this claim were set forth in Section IV.C of its first written 
submission, under the heading "The EU's Tariffs And TRQs Implemented Under Artic le XXVIII Of The 
GATT  1994 Are Inconsistent With Article II Of GATT 1994 Because They Exceed The EU's Current Schedule Of 
Concessions". Section V of China's second written submission, entitled "The EU's Tariffs and TRQs Implemented 
Under Article XXVIII Of The GATT 1994 Are Inconsistent With Article II Of GATT 1994 Because They Exceed 
The EU's Current Schedule Of Concessions".  
262 China's first written submission, para. 280, subparagraphs (14) and (15).  WT/DS492/R  
 
- 72 - 
 
  7.149.   In its first written submission, China  did refer to paragraph 8 of the Procedures for 
Negotiations under Article XXVIII and to paragraphs 1 and 3 of the Procedures for Modifica tion and 
Rectification of Schedules, observing that the European Union had not communicated the draft of 
the changes to its Schedule to the Director -General and that the European Union failed to obtain 
certification of its modified concessions.263 China did not, however, explicitly request that the Panel 
make any finding that the European Union acted inconsistently with any of these provisions under 
the respective Procedures; nor did it  argue that the alleged inconsistency with Article II arose by 
virtue of a ny such inconsistency with the Procedures. Rather, the reference to the procedures 
appeared to be in the nature of factual observations and explanations as to why the changes had 
not yet been certified.264  
7.150.   In its second written submission, China reiterated that the requirement in the second 
sentence of paragraph 1 "has in fact not been respected by the European Union either for the First 
or for the Second Modification Package ".265 However, here again, China did not argue explicitly 
that this gave rise to the i nconsistency with Article II:1; rather, this statement was made in the 
context of the section of its submission with the heading, "The EU 's Tariffs and TRQs Implemented 
Under Article XXVIII Of The GATT 1994 Are Inconsistent With Article II Of GATT 1994 Bec ause 
They Exceed The EU 's Current Schedule Of Concessions ". This statement apparently served to 
reiterate why the changes resulting from the First and Second Modification Package s have not yet 
been certified .  
7.151.   At the second meeting with the Panel, the Pane l sought to resolve any ambiguity as to the 
existence of any claims of violation relating to paragraph 7 of the Procedures for Negotiations 
under Article XXVIII or paragraph 1 of the Procedures for Modification and Rectification of 
Schedules, by asking Chi na to clarify whether it was requesting the Panel to find a violation of 
these provisions. China indicated that it would respond in its written responses to the panel 's 
second set of questions. This prompted the European Union to comment that it was operat ing on 
the understanding that no such claims of violation were being made by China in these proceedings, 
and that depending on China 's forthcoming written response to this question, it may have to raise 
issues relating to the Panel 's terms of reference and  due process.  
7.152.   The second set of questions from the Panel to the parties included several questions 
pertaining to the requirements in paragraph 7 of the Procedures for Negotiations under 
Article  XXVIII and paragraph 1 of the Procedures for Modification and Rectification of Schedules, 
and the question of whether any claims of violation were being requested under these procedures. 
In response to a question from the Panel regarding the second sentence of paragraph 7, the 
European Union indicated that although i t had informed all of the Members with a principal or 
substantial supplying interest  of the date of entry into force of the changes arising from the Article 
XXVIII negotiations, "[t]he date [of] entry into force of those changes has not been notified under  
paragraph 7 of the Procedures ".266 In its subsequent comments on the EU  response, China 
observed that "[t]he notification to the secretariat is intended to allow the secretariat to notify the 
date to all WTO Members and not only to the Members holding a PSI  or a SSI ", and that "[o]ther 
Members not holding a PSI or SSI were accordingly not informed of the date notwithstanding their 
immediate interest in the matter ".267 However, China did not request any finding of inconsistency 
with this provision.  
7.153.   To the cont rary, in its written response to Panel question No. 99, China clarified that:  
For the purpose of finding whether the EU acted inconsistently with Article II, the 
Panel needs to ascertain whether paragraph 1, read together with paragraph 8, 
provides certifi cation as a mandatory precondition for the modified concessions come 
                                               
263 China's first written submission, paras. 264, 270.  
264 For example, in its response to the first set of questions, China stated that it had previously "noted" 
that "the three month period set forth in paragraph 1 has in fact not been respected by the EU" (China's 
response to question No. 50, para. 194).  
265 China' s second written submission, para. 199.  
266 EU's response to Panel question No. 97.  
267 China's comments on the 'EU's response to Panel question No. 97.  WT/DS492/R  
 
- 73 - 
 
  into effect. The Panel is not required nor requested to make a finding that the EU 
acted inconsistently with paragraph 7 and paragraph 1 .268 (emphasis added)  
7.154.   In a response to a question fro m the Panel, the European Union elaborated on its 
understanding that China was not making any claims of violation under paragraph 7 of the 
Procedures for Negotiations under Article XXVIII or paragraph 1 of the Procedures for Modification 
and Rectification of Schedules. The European Union set forth its understanding that the panel 
request "did not raise separate claims of violation of either of those two provisions ", and that 
China had not asked the Panel to rule on any such claims in its previous submission s, but rather 
that China "relied on those provisions in support of its claim under Article II:1 ". According to the 
European Union, the fact "[t]that the Panel considered it necessary to raise this question at this 
very late stage of the proceedings confirm s the lack of clarity of the Panel request on this point ", 
and reiterated that "making those claims for the first time in response to a Panel question after the 
second hearing would raise issues of due process ".269   
7.155.   In its comments on the EU response, China  reproduced the text of the items in its panel 
request referring to paragraphs 7 and 1 of the above -mentioned Procedures, and stated:  
The EU is thus wrong in its response to the above question stating that China made no 
claims based on the two Procedures. To the contrary, two of China 's claims are 
directly based on these two Procedures, as well as other provisions of the GATT 1994.  
China further refers to its response to the Panel 's question 99.  
Considering that China and the EU hold different views on whet her the Modification 
Procedures qualify as "decisions " within the meaning of paragraph 1(b)(iv) of the 
GATT 1994, an issue decides directly the legal status of the Modification Procedures 
where China 's claims are hinged upon, China sees no reason for the P anel not to rule 
on this issue.270 
7.156.   We recall that it was in its response to Panel question No. 99 that China had clarified that 
the Panel "is not required nor requested to make a finding that the EU acted inconsistently with 
paragraph 7 and paragraph 1 ".271  
7.157.   We consider that while the identification of a claim in a panel request is a necessary 
condition for a Panel to rule on that claim, it is not always a sufficient condition for a Panel to rule 
on that claim. In some circumstances, a panel may be precluded fr om ruling on a claim, even 
where it is included in the panel request, if the complainant does not articulate the claim in a clear 
and timely manner in its subsequent submissions.  
7.158.   In EU – Fasteners (China)  the Appellate Body found that a claim under Articl e 6.5 of the 
Anti-Dumping Agreement  was identified in the panel request, and thus within the Panel 's terms of 
reference. However, the Appellate Body found that the panel erred in ruling on this claim. After 
reviewing the manner in which the particular clai m was pursued, the Appellate Body explained 
that: 
[T]he Panel record shows that China asserted its claim … only in response to questions 
from the Panel, and articulated this claim only after the parties had provided the Panel 
with written submissions and h ad attended a substantive meeting.  We do not find 
that assertions made so late in the proceedings, and only in response to questioning 
by the Panel, can comply with either Rule 4 of the Panel 's Working Procedures, or the 
requirements of due process of law .  The late assertion of a claim …, and the absence 
of proper argumentation and of the provision of relevant evidence in support of this 
assertion, demonstrates that the European Union was not called upon to respond to 
China 's claim under Article 6.5.272 
                                               
268 China's response to Panel question No. 99. See also China's response to Panel question No. 100.  
269 EU's response to Panel question No. 100, paras. 61 -63. 
270 China's comments on the EU response to Panel question No. 102(a).  
271 China's response to Panel question Nos. 99 and 100.  
272 Appellate Body Report, EC – Fasteners (China) , para. 574.  WT/DS492/R  
 
- 74 - 
 
  7.159.   In India – Additional Import Duties , the panel found that a claim under Article III:2 of the 
GATT 1994 was identified in the panel request, and therefore fell within the scope of its terms of 
reference. The panel noted that in its submissions to the panel, th e complainant had referred to 
this provision, and even to the alleged inconsistency of the measures with this provision. However, 
the panel was unable to discern from the complainant 's submissions any arguments in support of a 
separate and independent clai m under Article  III:2. In addition, the panel noted that the 
complainant did not request any findings under this provision in the concluding section of its first 
or second written submissions. The panel noted that the statements alleging a lack of consiste ncy 
with this provision were embedded in a discussion of a different claim and argument, and that it 
"would be improper for the Panel proprio motu  to take these statements out of their specific 
context and rely on them to rule on an alternative claim " under Article  III:2, especially where the 
complainant "has not requested any findings in relation to a claim " under this provision.273 In 
these circumstances, the panel found that the claim under Article  III:2 was not properly before it, 
and made no findings on the merits of any such claim.274  
7.160.   In US – Steel Plate , the panel request identified a claim under Article  6.6, Article 6.8 and 
Annex II(7) of the Anti -Dumping Agreement regarding the failure to exercise special 
circumspection in using information supplied in  the petition. The complainant explicitly abandoned 
these claims in its first written submission. It subsequently stated its intention, prior to the first 
meeting with the panel, to pursue one of those claims. Despite the lack of a specific objection by 
the responding party, the panel found that the complainant could not "resurrect " this claim. The 
panel considered that "[w]hile it is true that the claim in question was set out in the request for 
establishment, and is therefore within our terms of reference , we are not persuaded that fact alone 
requires us to rule on it ".275 The panel found that in the absence of any extenuating circumstances 
to justify the reversal of its abandonment of this claim, the complainant should not be allowed to 
resurrect it.  
7.161.   In the present case, the items of China 's panel request alleging a violation of Article II 
include the statement that "the EU acted inconsistently with the procedures set forth in 
paragraph  7 of the Procedures for Negotiations under Article XXVIII and paragraph  1 of the 
Procedures for Modification and Rectification of Schedules and Tariff Concessions ". However, in its 
subsequent submissions, China never requested a finding that the European Union acted 
inconsistently with either of these provisions, nor did it  ever argue that the alleged inconsistency 
with Article II arose as a result of any inconsistency with paragraph 1 or paragraph 7 of the above -
mentioned procedures.   To the contrary, we understand that China 's claim under Article II is not 
dependant on the p remise that the European Union acted inconsistently with paragraph 1 or 
paragraph 7.276 Furthermore, as noted above, in response to a question posed by the panel at the 
second meeting, China clarified that the Panel "is not required nor requested to make a f inding 
that the EU acted inconsistently with paragraph 7 and paragraph 1 ".277  
7.162.   Based on the foregoing, we do not understand China to be requesting a  finding that the 
European Union acted inconsistently with paragraph 7 of the Procedures for Negotiations unde r 
Article XXVIII  or paragraph 1 of the Procedures for Modification and Rectification of Schedule. 
Insofar as China is making any such claims, then we conclude that such claim has not been made 
in a sufficiently clear and timely manner, and is therefore not  properly before the Panel.  
                                               
273 Panel Report, India – Additional Import Duties , para. 7.412.  
274 Panel Report, India – Additional Import Duties , paras. 7.402 -7.418.  
275 Panel Report, US – Steel Plate , para. 7.26.  
276 At paragraph 73 of its response to Panel question No. 99, China explained that " China takes the view 
that in accordance with paragraph 1 of the Procedures for Modification and Rectification of Schedules and Tariff 
Concessions, read together with paragraph 8 of the Procedures for Negotiations under Article XXVIII, 
modifications of a schedule of concessions  are subject to certification, without which the new modified 
concessions are not yet given legal effect and the original concessions remain in force. Based on this legal 
interpretation as well as the fact that the EU's modified concessions have not been c ertified, China claims that 
the EU violated Article II of the GATT 1994 by applying customs duties in excess of the current bound rates 
that are still in effect ". 
277 China's response to Panel question Nos. 99 and 100, paras. 74 and 75.  WT/DS492/R  
 
- 75 - 
 
  7.3.3.2   China's c ontention of a possible violation of Article II:1 in the period 2007 -2009 
arising from the European Union applying new rates prior to notifying all Members of the 
completion of the negotiations  
7.163.   Paragraph 6 of the Proc edures for Negotiations under Article XXVIII provides that:  
Upon completion of all its negotiations the contracting party referred to in paragraph  1 
above should send to the secretariat, for distribution in a secret document, a final 
report on the lines of  the model in Annex C attached hereto.  
7.164.   As noted earlier, the first sentence of paragraph 7 of those procedures states that in the 
case of negotiations under Article XXVIII:5, Members "will be free to give effect to the changes 
agreed upon in the negotiatio ns … as from the date on which the conclusion of all the negotiations 
have been notified " in accordance with paragraph 6 of those procedures.  
7.165.   As elaborated later in our Report in the context of addressing the merits of China 's claim 
under Article II:1, Ch ina's position is that changes agreed in Article XXVIII negotiations cannot be 
implemented, insofar as they exceed the bound rates inscribed in a Member 's Schedule, until such 
time as those changes are formally incorporated into its Schedule through certif ication.278 The 
European Union disagrees, and argues that the first sentence of paragraph 7 reflects the right of 
Members to apply tariff rates in excess of those set forth in the text of the Schedule prior to the 
changes being formally incorporated through certification.279 In its second written submission, 
China notes, in the context of responding to that argument, that the European Union implemented 
the higher out -of-quota rates over the period 2007 -2009, prior to notifying other Members of the 
conclusion of  the negotiations on 27 May 2009. Thus, China submits that even if the European 
Union 's position regarding paragraph 7 were correct, which in China 's view it is not, then there was 
still a violation of Article II:1, in respect of the First Modification Pac kage, over that 2007 -2009 
period.280  
7.166.   We recall that the European Union notified the WTO of the conclusion of the negotiations 
relating to the First Modification Package on 27 May 2009, and of the conclusion of the 
negotiations relating to the Second Modific ation Package on 17 December 2012.281 We note that it 
is not in dispute that the European Union implemented the higher out -of-quota rates established 
by the First Modification Package nearly two years before it notified the WTO Membership of the 
conclusion o f the negotiations on 29 May 2009.282 In response to a question from the Panel, the 
European Union explained that this was "largely due to an administrative oversight " on its part.283 
7.167.   We observe that China 's panel request does not appear to articulate any clai m that the 
European Union violated Article II:1 on the grounds that it gave effect to the results of the First 
Modification Package prior to notifying other Members of the completion of the negotiations. The 
relevant item of the panel request, already repr oduced further above, refers to the absence of 
"notification for certification ", "notification of the date on which the changes to the goods schedule 
come into force ", and "notification of the draft modification to its Schedule ".284  
7.168.   In any event, even if th e panel request could be read as including such a claim, we 
consider that any violation of Article II:1 arising from the European Union 's implementation of the 
results of the Article XXVIII negotiations prior to notifying Members would have ceased to exist  on 
29 May 2009, which was more than six years prior to the panel request in these proceedings. In 
EC – Chicken Cuts , the Appellate Body confirmed that "[t]he term 'specific measures at issue ' in 
Article  6.2 suggests that, as a general rule, the measures i ncluded in a panel 's terms of reference 
must be measures that are in existence at the time of the establishment of the panel. "285 We 
                                               
278 China's first writt en submission, paras. 260 -264, para. 268.  
279 EU's first written submission, para. 300.  
280 China's second written submission, para. 200.  
281 See, respectively, G/SECRET/25/Add.1, circulated on 29 May 2009 (Exhibit EU -6) and 
G/SECRET/32/Add.1., circulated on 20 December 2012 (Exhibit EU -9). 
282 G/SECRET/25/Add.1, 29 May 2009 (Exhibit EU -6). 
283 EU's response to question 53, para. 156.  
284 China's request for the establishment of a panel, item (x) of Section II.A and item (x) of Section II.B.  
285 Appellate Body Report, EC – Chicken Cuts , para.  156. For a review of WTO jurisprudence dealing 
with measures that were withdrawn, repealed, or expired prior to the request for the establishment of a panel, 
see Panel Report, China – Electronic Payment Services , paras. 7.224 -7.229.  WT/DS492/R  
 
- 76 - 
 
  recognize that there may well be particular circumstances in which a panel would be justified in 
making findings in respect o f a measure that ceased to exist prior to its establishment. However, 
in this case China has not advanced any argument as to why the Panel should rule on whether the 
European Union violated Article II:1 by implementing the higher out -of-quota rates over th e period 
2007-2009.286 
7.169.   Based on the foregoing, we  do not understand China to be requesting a finding  that the 
European Union violated Article II:1 by implementing the higher out -of-quota rates over the period 
2007-2009, prior to the point in time when it not ified other Members of the conclusion of the 
negotiations (on 29 May 2009). Insofar as China 's statement to that effect287 is to be construed as 
making such a claim , then for the reasons above we conclude that it is not properly before us.  
7.4  Claims under Arti cle XXVIII:1 of the GATT 1994  
7.4.1   Introduction  
7.170.   China claims that the European Union violated Article XXVIII:1 of the GATT 1994 by 
refusing to recognize China 's "principal supplying interest " and "substantial interest " in the 
concessions at issue in the First a nd Second Modification Packages.288 In China 's view, the 
reference periods used by the European Union to determine which Members held a principal or 
substantial supplying interest were inconsistent with Article XXVIII:1 for two different reasons. 
First, we u nderstand China to claim that the European Union violated Article XXVIII:1 by not 
determining which Members held a principal or substantial supplying interest on the basis of an 
estimate of what Members ' shares would have been in the absence of the SPS mea sures restricting 
poultry imports from China. Second, we understand China to claim that the European Union 
violated Article XXVIII:1 by not re -determining which Members held a relevant supplying interest 
on the basis of the increase in imports from China o ver the period 2009 -2011.  
7.171.   The European Union responds that its  determinations of which Members held a principal or 
substantial supplying interest were entirely consistent with the requirements of Article XXVIII:1.289 
The European Union submits that it was un der no obligation to determine which Members held a 
supplying interest on the basis of an estimate of what Members ' shares would have been in the 
absence of the SPS measures restricting poultry imports from China, or to re -determine which 
Members held a su pplying interest on the basis of the increase in imports from China over the 
period 2009 -2011. In addition, the European Union submits that it was entitled not to take into 
account China 's claims of supplying interest insofar as China did not claim any pri ncipal supplying 
interest in the First Modification Package, and failed to make a timely claim of either principal or 
substantial supplying interest in respect of the Second Modification Package.  
7.4.2   Relevant provisions  
7.172.   Article XXVIII is entitled "Modificatio n of Schedules ". China 's claim of violation is based on 
Article XXVIII:1, which reads as follows:  
On the first day of each three -year period, the first period beginning on 1 January 
1958 (or on the first day of any other period* that may be specified by [the 
CONTRACTING PARTIES ] by two -thirds of the votes cast) a Member  (hereafter in this 
Article referred to as the "applicant Member ") may, by negotiation and agreement  
with any Member  with which such concession was initially negotiated and with any 
                                               
286 In response to Panel question No. 53, the European Union  acknowledged the delayed notification, but 
then stated that "the notification to the WTO was made well before the establishment of the present Panel" 
(para. 157). China did not subsequently advance  any counterargument, or raise the issue concerning the 
2007-2009 period again.  
287 China's second written submission, para. 64.  
288 China's first written submission, paras. 49 -117; China's opening statement at the first meeting of the 
Panel, paras. 11 -55; Chi na's responses to Panel question Nos. 13 -20, 22 -23; China's second written 
submission, paras. 31 -95; China's opening statement at the second meeting of the Panel, paras. 3 -40; China's 
responses, or comments on EU's  responses, to Panel question Nos. 68 -70, 72-75, 82 -84, 106 -110. 
289 EU's first written submission, paras. 86 -153; EU's opening statement at the first meeting of the 
Panel, paras. 10 -17; EU's responses to Panel question Nos. 14 -16, 18, 21 -22, 24; EU's second written 
submission, paras. 2 -59; opening statement at the second meeting of the Panel, paras. 3 -40; EU's responses, 
or comments on China responses, to Panel question Nos. 68 -70, 72 -75, 82 -84, 106 -110. WT/DS492/R  
 
- 77 - 
 
  other Member determined by [the CONTRACTING PARTIES ] to have a principal 
supplying interest * (which two preceding categories of Members , together with the 
applicant Member , are in this Article hereinafter referred to as the "Members  primarily 
concerned "), and subje ct to consultation  with any other Member  determined by [the 
CONTRACTING PARTIES ] to have a substantial interest* in such concession , modify or 
withdraw a concession* included in the appropriate schedule annexed to this 
Agreement. (emphasis added)  
7.173.   Thus Arti cle XXVIII:1 establishes certain conditions as to when modifications of 
concessions contained in a Schedule can be made, as well as when concessions can be withdrawn. 
It also  indicates which Members are entitled to participate in negotiations or consultati ons 
regarding the proposed modification or withdrawal. This includes any Member with which the 
concession was initially negotiated, any Member determined to have a "principal supplying 
interest ", and any other Member determined to have a "substantial inter est" in the concession 
subject to renegotiation. In this case, the European Union stated that China did not possess initial 
negotiating rights in any of the concessions at issue under the First or Second Modification 
Package s. China 's claim in relation to the First Modification Package was to be recognized as a 
Member with a substantial supplying interest in the three tariff lines at issue.290 With regard to the 
Second Modification Package, China has claimed a principal supplying interest with regard to all 
the relevant tariff lines and provided import statistics with respect to four tariff lines.291 As no ted 
earlier, the European Union did no t recognize China as a Member holding a principal or substantial 
supplying interest in any of the concessions at issue.  
7.174.   The Ad Note to Article XXVIII:1 provides additional information on which Members should 
be determined to hold a principal supplying interest and a substantial supplying interest. With 
regard to the concept of a principal supplying interest, paragraph 4 of the Ad Note sets forth the 
following objectives:  
The object of providing for the participation in the negotiation of any Member with a 
principal supplying interest , in addition to any Member with which the concession was 
originally negotiated, is to ensure  that a Member with a larger share in the trade 
affected by the concession than a Member with which the concession was originally 
negotiated shall have an effective opportunity to protect the contractual right which it 
enjoys under this Agreement . On the o ther hand, it is not intended that the scope of 
the negotiations should be such as to make negotiations and agreement under Article 
XXVIII unduly difficult nor to create complications in the application of this Article in 
the future to concessions which re sult from negotiations thereunder… (emphasis 
added)  
Paragraph 4 then sets out the criteria to define the principal supplying interest:  
…. Accordingly, [the CONTRACTING PARTIES ] should only determine that a Member 
has a principal supplying interest  if that  Member  has had, over a reasonable period of 
time prior to the negotiations , a larger share in the market of the applicant Member  
than a Member  with which the concession was initially negotiated or would , in the 
judgement of [the CONTRACTING PARTIES ], have had such a share in the absence of 
discriminatory quantitative restrictions  maintained by the applicant Member . It would 
therefore not be appropriate for [the CONTRACTING PARTIES ] to determine that more 
than one Member , or in those exceptional cases where  there is near equality more 
than two Members , had a principal supplying interest. (emphasis added)  
7.175.   Paragraph 4 of the Ad Note to Article XXVIII:1 clarifies several important points. The first 
is that a Member with a principal supplying interest must "have an effective opportunity to protect 
the contractual right which it enjoys " under the GATT, but at the same time, the scope of the 
negotiations should not be such as to make "negotiations and agreement under Article XXVIII 
unduly difficult nor to create co mplications in the application " of Article XXVIII. Second, 
paragrap h 4 clarifies that, as a general rule, a Member should only be found to hold a principal 
                                               
290 China's response to Panel question No. 17, para. 101 and Exhibit CHN -16. 
291 China's response to  Panel question No. 17, para. 102 and Exhibits CHN -29 and CHN -50. In Exhibit 
CHN-48, China identified the type of supplying interest that it claimed with respect to the ten tariff lines at 
issue under both of the modification packages.  WT/DS492/R  
 
- 78 - 
 
  supplying interest based on its share of the market "over a reasonable period of time prior to the 
negotiations " or based on the market share it would be expected to have in the absence of 
"discriminatory quantitative restrictions ". 
7.176.   Regarding the meaning of the term "substantial interes t", paragraph 7 of the Ad Note to 
Article XXVIII:1 states that:  
The e xpression "substantial interest " is not capable of a precise definition and 
accordingly may present difficulties for [the CONTRACTING PARTIES ].  It is, however, 
intended to be construed to cover only those Members  which have, or in the absence 
of discrimin atory quantitative restrictions  affecting their exports could reasonably be 
expected to have , a significant share  in the market of the Member  seeking to modify 
or withdraw the concession.  (emphasis added)  
7.177.   Thus, as a general rule, a Member should be determi ned to have a substantial supplying 
interest only where it has, or would expect to have in the absence of discriminatory quantitative 
restrictions affecting its exports, a significant share of the market.292 The notion of a significant 
share of the market is  not further clarified in the text of paragraph 7.  
7.178.   The ordinary meaning of the word significant is "[i]mportant, notable; consequential ".293 
Thus, the general standard seems to be whether a Member has, or in the absence of 
discriminatory quantitative restri ctions could reasonably be expected to have, an important share 
in the market of the importing Member. In the context of Article XXVIII:1, a 10% import share 
benchmark has been applied for the purpose of determining which Members hold a substantial 
supplyi ng interest.294 In this case, China argues that the 10 % import share benchmark cannot be 
invoked to exclude a Member whose import share is below the 10% benchmark, insofar as that 
Member demonstrates a substantial supplying interest taking into account the e xistence of 
discriminatory quantitative restrictions in the context of Article XXVIII, and taking into account any 
"special factors " in the context of determining which Members hold a substantial supplying interest 
under Article XIII:2. However, subject to  this understanding, China states that it "does not 
consider that it is an ipso facto  violation of Articles XXVIII and XIII for a member to use the 10 
percent threshold to determine SSI status ".295 Thus, based on its submissions in these proceedings 
that the  use of the 10 % import share threshold is not an ipso facto  violation of Article  XXVIII or 
Article XIII, our understanding is that China does not claim that the European Union violated 
Article XXVIII:1 by applying a 10% import share benchmark to determine which Members held a 
"substantial interest ".296 For its part, the European Union does not argue that the 10% import 
                                               
292 The Understanding on the Interpretation of Article XXVIII provides further guidance on the 
interpretation of the terms "principal supplying interest" and "substantial interest" with regard to three specific 
issues. Paragraph 1 of the Understanding, elaborating on paragraph 5 of the Ad Note to Article  XXVIII:1, 
broadens the definition of "principal supplying interest" to also include the Member which has the highest ratio 
of its exports affected by the concession. Paragraph 3 clarifies the conditions under which trade in the affected 
product that did not take place on an MFN basis should be taken into account when determining which 
Members hold a "principal supplying interest". Finally, paragraph 4 clarifies how "principal" and "substantial" 
supplying interest is to be determi ned in respect of a "new product" for which three years' trade statistics are 
not available.  
293 Shorter Oxford English Dictionary , 5th ed, W.R. Trumble, A. Stevenson (eds.) (Oxford University 
Press, 2002), Vol . 2, p. 2835.  
294 See e.g. Negotiating Rights unde r Article XXVIII of the GATT, Note by the Secretariat, 2 July 1987, 
GATT Doc. MTN.GNG/NG7/W/9, pp. 2 -3 ("In actual practice, contracting parties which have invoked 
Article  XXVIII, have in their bilateral negotiations interpreted the term ꞌsignificant share  in the marketꞌ to be at 
least 10 per cent, although nothing would prevent a country from recognizing substantial interest for a lower 
percentage."); A. Hoda, Tariff Negotiations under the GATT and the WTO, Procedures and Practices , Cambridge 
UP 2001, p. 1 4 ("[i]n practice, contracting parties (Members) having 10 per cent or more of the trade shares 
have been recognized as having a substantial interest."); Panel Report, EC – Bananas III , paragraphs 7.83 -
7.85 and footnote 369 (finding that the EC's determina tions of which Members held a substantial supplying 
interest, on the basis of the 10% market share benchmark, was not unreasonable).   
295 China's response to Panel question No. 68(a) and 68(b).  
296 In the course of the proceedings, China stated that what is " a significant share" varies "depending on 
the market", and that if the Member concerned uses a particular threshold, e.g. 10%, that is higher than the 
appropriate threshold which reflects "a significant share" in the particular market, e.g. 9%, the Member may 
violate Articles XXVIII and XIII (China's response to Panel question No. 68(a), para. 17 ). That might be 
understood to mean that, in China's view, the use of a 10% import share benchmark for determining which 
Members hold a "substantial interest" would  indeed constitute  an ipso facto violation of Article XXVIII and 
Article XIII.. However, China's clarification that it "does not consider that it is an ipso facto  violation of WT/DS492/R  
 
- 79 - 
 
  share benchmark can be applied without taking account of discriminatory quantitative restrictions 
or special factors. Accordingly, there is no  issue regarding the 10% benchmark per se  that we are 
called upon to resolve in the present dispute.297 
7.179.   The parties agree on the meaning of the term "consultation " in the context of 
Article  XXVIII:1. The text of this provision specifies that the applicant Me mber may modify or 
withdraw a concession "by negotiation and agreement " with any Member with which the 
concession was initially negotiated and with any Member determined by the Members to have a 
principal supplying interest298, and "subject to consultation " with any other Member determined  to 
have a substantial interest in the concession. In this case, t he parties agree that the obligation to 
consult with Members holding a substantial interest is not the same as an obligation to negotiate 
with Members holding  a principal supplying interest (or initial negotiating rights).299 However, the 
European Union has not suggested that the exchanges that occurred between the European Union 
and China amounted to consultation (or, a fortiori , negotiation) within the meaning of 
Article  XXVIII:1.300   
7.180.    Both parties also agree that the failure to negotiate or consult with a Member that has a 
duly justified claim of a principal or substantial supplying interest is cognizable under the DSU. In 
this regard, the European Union does no t question that Article XXVIII:1 imposes , on the Member 
seeking the modification of a concession, an obligation to recognize any duly justified claim of 
principal or substantial supplying interest and to negotiate or consult with the parties holding such 
claims.  
                                                                                                                                               
Articles  XXVIII and XIII for a member to use the 10 percent threshold to determi ne SSI status" leads us to 
conclude that China does not claim that the European Union violated Article XXVIII:1 by applying a 10% import 
share benchmark to determine which Members held a "substantial interest". We note that insofar as any such 
claim has be en made by China, as the party alleg ing a violation it would have the burden of proof in connection 
with any such claim. That means that it would be for China to, at a minimum, clearly articulate what 
alternative percentage import share (e.g. 9%) or other alternative criterion or benchmark should have been 
used in the market(s) at issue, if not the 10% import share benchmark that was used by the European Union.  
The fact that China has not done so reinforces our understanding that it is not advancing any suc h claim, and 
in any event would mean that China has not discharged its burden of proof in relation to any such claim.  
297 Accordingly, we consider it unnecessary to rule on whether the 10% benchmark constitutes 
"subsequent practice in the application of the  treaty which establishes the agreement of the parties regarding 
its interpretation" within the meaning of Article 31(3)(b) of the Vienna Convention, or a "customary practice" 
within the meaning of Article XVI:1 of the WTO Agreement. The European Union, Br azil, Canada, and Thailand 
all consider that there is subsequent practice establishing the agreement of Members, within the meaning of 
Article 31(3)(b) of the Vienna Convention, that an importing Member may rely on a 10% import share 
benchmark to determine  which Members have a "substantial interest" under Article XXVIII. The European 
Union and these third parties, and also Russia, further consider that this qualifies as a "customary practice" 
within the meaning of Article XVI:1 of the WTO Agreement. China a nd Argentina disagree with both 
conclusions.  See China's first written submission, paras. 56, 214 -215; China's response to Panel question Nos. 
10-11; China's second written submission, paras. 74 -78; EU's first written submission, paras. 91, 191, 282; 
EU's response to Panel question No. 10; responses of Argentina, Brazil, Canada, Russia, Thailand, and the 
United States to Panel question No. 1 to third parties.  
298 If agreement cannot be reached, paragraph 3(a) of Article XXVIII of the GATT 1994 provides that the 
Member can still modify or withdraw its concession. However, if it does, the Members primarily concerned (i.e. 
the Members with initial negotiating rights or a principal supplying interest) can withdraw substantially 
equivalent concessions initially ne gotiated with the Member modifying the concession. It must be noted that, 
even if Members with initial negotiating rights or a principal supplying interest have the right to negotiate, 
whereas Members with substantial supplying interest have the right be c onsulted, the latter category of 
Members is also entitled to withdraw equivalent concessions if they are not satisfied with the proposed 
modification. See Article XXVIII:3(b).  
299 At paragraph 229 of its first written submission, China contrasts the obligati on to negotiate with the 
obligation to consult, in the context of contrasting Article XXVIII and Article XIII:2(d). See also EU's first 
written submission, para. 109.  
300 In its response to Panel question No. 18(a), the European Union confirms that "[t]he Eu ropean Union 
consulted with China on the justification of its claims of interest. Since the European Union did not recognize 
those claims, it did not consult with China on the compensation to be provided for the intended modification of 
concessions." In it s response to the same question, China states that " the exchange on whether or not China is 
a WTO Member with a substantial supplying interest is not the same as consultations on the withdrawal of the 
concession itself and the maintenance of the balance of  concessions."  WT/DS492/R  
 
- 80 - 
 
  7.181.   Although there is no disagreement between the parties, the United States raised the 
question of whether that is so because t he original t ext of Article XXVIII:1 of the GATT 1947301 as 
incorporated by reference into the GATT 1994 establishes an obliga tion to negotiate or consult only 
with those Members "determined by the CONTRACTING PARTIES " to have a principal or substantial 
supplying interest (and p aragraphs 3, 4, 5, and 7 of the original Ad Note to Article XXVIII:1 also 
contain language to the same effect). Moreover, in the present case, there was no determination 
by the Council for Trade in Goods or the General Council302 that China had a principal or 
substantial supplying interest in the concessions at issue because China never referred the matter 
to the Council.  In the United States ' view, the foregoing casts doubt on whether a Member 's 
refusal to recognize such a claim is justiciable before a dispute settlement panel.303  
7.182.   In response to the question raised by the United States, China responds that the  
"determination by the CONTRACTING PARTIES " could take place through dispute settlement304, 
and points out the consequences that would arise from finding that only the Council on Trade in 
Goods or General Council could make such a determination.305 The Europea n Union considers that 
the text of Article XXVIII:1 must be interpreted in the light of paragraph 4 of the Procedures for 
Negotiations under Article XXVIII, which provides that where a claim of interest is recognized by 
the Member seeking the withdrawal or  modification of a concession, such recognition "will 
constitute a determination by the CONTRACTING PARTIES in the sense of Article XXVIII:1 ".306 
7.183.   We are obligated to consider the issue of our jurisdiction on our own initiative.307 However, 
we do not consider i t necessary to address this issue in any great detail in the absence of any 
disagreement between the disputing parties. We note that while the original text of 
Article  XXVIII:1 of the GATT 1947 (and its related Ad Note) as incorporated by reference into th e 
GATT 1994 refers to a determination by the CONTRACTING PARTIES as to which Members hold a 
principal or substantial supplying interest, the text of paragraph 4 of the Procedures for 
Negotiations under Article XXVIII blurs the distinction between determina tions by the 
CONTRACTING PARTIES and determinations by the applicant Member. We further note that the 
Understanding on the Interpretation of Article XXVIII, negotiated in the Uruguay Round, makes no 
reference to determinations of a principal or substantial  supplying interest being made by the 
CONTRACTING PARTIES  (today, the Genera l Council or the Council for Trade in Goods) . In the 
absence of any disagreement between the disputing parties on this issue, we proceed on the 
premise that we have jurisdiction to  review China 's claims that the European Union violated 
Article  XXVIII:1 by refusing to recognize its claims of principal or substantial supplying interest.  
7.184.   The parties also agree that the applicable provisions that regulate the determination of 
which Mem bers hold a supplying interest in the context of Article XXVIII negotiations apply both to 
negotiations under Article XXVIII:1 and "reserved " negotiations under Article XXVIII:5. The tariff 
renegotiations under the First and the Second Modification Package s were reserved negotiations 
                                               
301 We note that Article XXVIII is part of the original GATT 1947, but the text was extensively revised in 
the 1954 -1955 Review Session. See Analytical Index: Guide to GATT Law and Practice , 6th edition (1995), 
pp. 963-964.   
302 Paragraph 2(b) of the Explanatory Note to the GATT 1994 provides that certain functions assigned to 
the CONTRACTING PARTIES under the GATT 1947, including this one, shall be allocated by the Ministerial 
Conference. The Panel understands that this function under Article X XVIII:1 would be carried out either by the 
Council for Trade in Goods or the General Council. In response to Panel question No 14(b), China confirms that 
it did not refer the European Union's refusal to grant a supplying interest status to China to the Gen eral Council 
or the Council on Trade in Goods.  China notes that paragraph 4 of the Procedures for Negotiations under 
Article XXVIII, which provides that where a claim of interest is not recognized the party making the claim "may 
refer the matter to the Co uncil", is "permissive but not mandatory"(China's response to Panel question No. 14, 
paras. 83, 85).   
303 United States' third -party statement, paras. 5 -12. 
304 China's response to Panel question No. 14, para. 87.  
305 China's response to Panel question No. 14, para. 88. In China's view, these consequences would 
include the fact that an importing Member's failure to take "discriminatory quantitative restrictions" into 
account could never be reviewed in proceedings initiated under the DSU.  
306 EU's response to Panel  question No. 14, para. 48. See also China's response to Panel question No. 14 
and also parties' responses to Panel question No. 15.  
307 As the Appellate Body has observed, "it is a widely accepted rule that an international tribunal is 
entitled to consider the issue of its own jurisdiction on its own initiative, and to satisfy itself that it has 
jurisdiction in any case that comes before it"( Appellate Body Report, US – 1916 Act , footnote 30). See also 
Decision by the Arbitrator, US – COOL (Article 22.6 – United States) , paras. 2.6 -2.7. WT/DS492/R  
 
- 81 - 
 
  conducted pursuant to Article XXVIII:5, not Article XXVIII:1.308 The text of Article XXVIII:5 
provides that reserved negotiations conducted pursuant to that provision are to be conducted "in 
accordance with the procedures of paragraph 1 to 3 " of Article XXVIII.309 The parties agree that 
the initial determination of which Members hold a principal or substantial supplying interest in the 
context of reserved negotiations conducted pursuant to Article XXVIII:5 is governed by the same 
provisions that apply in the case of negotiations under Article XXVIII:1. These provisions include, 
as indicated above, paragraphs 4 and 7 of the Ad Note to Article XXVIII:1.  
7.4.3   Analysis by the Panel  
7.185.   Turning to the issues in dispute, China 's claims under Artic le XXVIII:1 and the arguments 
of the parties present three main issues. The first issue is w hether the SPS measures that 
restricted Chinese poultry imports over the reference periods used by the European Union in both 
the First and Second Modification Pack ages constitute "discriminatory quantitative restrictions " 
within the meaning of the Ad Note to Article XXVIII:1. The second issue is whether the European 
Union additionally violated Article XXVIII:1 in the Second Modification Package by not re -
determining , prior to the conclusion of the negotiations, which Members held a principal or 
substantial supplying interest on the basis of the increase in imports from China over the period 
2009-2011. The third issue is whether the European Union was entitled to disr egard China 's claims 
of a principal and substantial supplying interest on the grounds that they were not presented in a 
timely manner.   
7.4.3.1   Whether the SPS measures at issue constitute "discriminatory quantitative 
restrictions "  
7.4.3.1.1   Main arguments of the parties  
7.186.   China claims that the European Union violated Article XXVIII:1 by determining which 
Members held a principal or substantial supplying interest on the basis of the import statistics over 
the three years preceding the notification of its intention to modify  its concessions (2003 -2005 for 
the First Modification and 2006 -2008 for the Second Modification Package) when imports from 
China were subject to the European Union 's SPS measures. China submits that the European Union 
was under a legal obligation to estim ate what Members ' shares would have been in the absence of 
the SPS measures restricting poultry imports from China. The reason, according to China, is that 
the European Union 's SPS measures on Chinese poultry imports were "discriminatory quantitative 
restrictions " within the meaning of paragraphs 4 and 7 of the Ad Note to Article XXVIII:1 and, as 
such, they should have been taken into account by the European Union when determining which 
Members had a supplying interest in the concessions subject to renegoti ations.  
7.187.   China interprets the term "discriminatory " so as to include situations where imports from a 
WTO Member are "treated differently from imports from other WTO Members, irrespective of the 
ground of such disparate treatment and, in particular, whether  such difference in treatment was 
justified or not ".310 In arguing that the SPS measures are discriminatory, China considers that it is 
legally irrelevant whether those measures are unjustified, or WTO -inconsistent. In China 's view, 
"discriminatory quantitat ive restrictions " in the context of the Ad Note to Article XXVIII:1 "covers 
not only those discriminatory restrictions that are prohibited by the covered agreements, but also 
others that are justifiable under relevant provisions of the covered agreements ".311  
                                               
308 In the course of the proceedings, China stated that the European Union had provided no evidence to 
prove that the negotiations resulting in the Second Modification Package were conducted under paragraph 5 of 
Article XXVIII, a nd that "[i]ts notification for this negotiation only referred to Article XXVIII in general" ( China's 
second written submission, para. 54 (citing Exhibit CHN-25)). However, we note that both the WTO document 
circulating the notice of the EU's intention to modify the concessions ( Exhibit CHN -25) and the WTO document 
circulating the communication by the European Union of the results of the negotiations ( Exhibit EU -9) refer to 
"Article XXVIII:5 Negotiations". As additional evidence, the European Union has prov ided the WTO documents 
circulating the communications of the European Union reserving its rights under Article XXVIII:5 for the periods 
2009-2011 and 2012 -2014 (Exhibit EU -41). In the light of the foregoing, we do not see the basis for 
questioning whether the negotiations were conducted under Article XXVIII:5.  
309 Paragraph 1 of the Procedures for Negotiations under Article XXVIII reiterates that the procedures of 
Article XXVIII:1 "are also applicable to negotiations under paragraph 5".  
310 China's first writte n submission, para. 65.  
311 China's first written submission, para. 64.  WT/DS492/R  
 
- 82 - 
 
  7.188.   The European Union submits that it was entitled to determine which Members held a 
principal or substantial supplying interest on the basis of actual import levels over the three years 
preceding the notification of its intention to modify its concessions  (2003 -2005 and 2006 -2008). It 
was under no legal obligation to estimate what Members ' shares would have been in the absence 
of the SPS measures restricting poultry imports from China. The reason, according to the 
European Union , is that the SPS measures a t issue are not "discriminatory quantitative 
restrictions ", and therefore the European Union was not required to estimate what Members ' 
imports shares would have been in the absence of those measures.  According to the European 
Union, whether import s from a given country are restricted "will depend on the sanitary situation 
in each country  of origin" .312 The European Union considers that a restriction on imports based on 
SPS grounds is discriminatory within the meaning of the Ad Note to Article XXVIII:1 "if, and only if, 
imports from two countries posing similar sanitary risks are not similarly treated ".313 According to 
the European Union , it follows that if a quantitative restriction on imports is applied consistently 
with all the relevant provisions of the WTO Agreement (including in particular provisions such as 
Article XX of the GATT 1994, Article 2.3 of the SPS Agreement or Article 2.1 of the TBT 
Agreement) it would not be "discriminatory " according to the discrimination test described 
above.314  
7.189.   Regarding the second element of the term "discriminatory quantitative restrictions ", China 
argues that, as import prohibitions, the SPS measures are clearly "quantitative restrictions " within 
the meaning of Article XI of the GATT 1994.315 China submits that even if the SP S requirements 
are compliant with Article III, it would not follow that the import bans do not fall under the scope 
of Article XI:1. China submits that various panels and the Appellate Body have found that 
measures that affected both imported and domestic products, but resulted in an import ban, may 
fall within the scope of "[import] prohibitions or restrictions, other than duties, taxes or other 
charges " in violation of Article XI:1.316 
7.190.   In response, the European Union argues that the SPS measures at issue ar e not 
quantitative restrictions. The European Union agrees with China that the term  "quantitative 
restrictions ", as used in the Ad Note to Article XXVIII:1, must be interpreted in the light of 
Article  XI:1.317 However, the European Union argues that Article XI:1 must in turn be interpreted 
in the light of the introductory paragraph to the Ad Note to Article III, which provides that a 
measure that is applied to an imported product and to the like domestic product, and which is 
enforced in the case of the impor ted product at the time or point of importation, "is nevertheless 
to be regarded as an internal tax or other internal charge subject to Article III ". In the present 
case, the European Union submits that its SPS regime for animal products (including poultry  
products) "is based on the fundamental principle that imported products must comply with the 
same or equivalent sanitary requirements as the EU domestic products ".318 The European Union 
reasons that, in accordance with the Ad Note to Article III, such measu res are not "quantitative 
restrictions " within the meaning of either Article XI:1 or, conseque ntly, of the Ad Note to 
Article  XXVIII:1.  
7.191.   Proceeding on the premise that the European Union was required to estimate the import 
share that China could reasonably be expected to have  in the absence of the SPS measures, China 
observes that the Ad Note to Article XXVIII does not clarify how such a determination is to be 
made. Arguing by analogy on the basis of paragraph 4 of the Understanding, concerning "new 
products " for which trade statistics from the prior three years are not available, China argues that, 
to determine the share that China could reasonably be expected to have had absent the SPS 
import bans, the European Union should have taken into account factors s uch as production 
capacity, investment in the product, estimates of export growth, and forecasts of demand in the 
European Union . China provides information on the level of its poultry exports before, during and 
                                               
312 EU's first written submission, para. 118. The European Union adds that "[w] here the sanitary 
situation in  any two countries is the same or equivalent the European Union will treat impo rts from those two 
countries in the same manner".  
313 EU's response to Panel question No. 21, para. 63.  
314 EU's response to Panel question No. 21, para. 64.  
315 China's first written submission, para. 60.  
316 China's opening statement at the first meeting of the Panel, paras. 8-12, 14-18; China's second 
written submission, para. 34.  
317 EU's first written submission, paras. 59 -60. 
318 EU's first written submission, para. 117.  WT/DS492/R  
 
- 83 - 
 
  after the prohibition – both to the European  Union  and globally – to support its contention that 
China could reasonably be expected "to at least have had an SSI in the EU market ".319 
7.192.   The European Union disagrees with China on this point as well. The European Union 
submits that even if the import data relied upon by the European Union had been "tainted " by the 
application of those SPS measures, the other evidence available at the time when the European 
Union notified its intention to negotiate the modification of the concessions would not have 
warranted  recognizing that China held either a principal or substantial supplying interest in any of 
the concessions at issue under both renegotiations. According to the European Union , the 
existence of a principal or substantial supplying interest cannot be determ ined on the basis of 
evidence that was not provided to the European Union at the relevant time in support of China 's 
claims of interest pursuant to paragraph 4 of the Procedures for Negotiations under Article XXVIII, 
or on the basis of evidence post -dating  the opening of the negotiations. Thus, the European Union 
submits that the import data concerning the period immediately preceding the entry into force of 
the SPS measure in 2002 is both the most pertinent and the most reliable source of evidence in 
order  to estimate the import share that China would have had in the absence of the SPS measures 
for both Modification Packages. The European Union submits that during the years preceding 2002, 
China 's import shares in the European Union for all the tariff lines  concerned were negligible.320 
7.4.3.1.2   Findings of the Panel  
7.193.   The threshold legal issue raised by China 's claim is w hether the SPS measures that 
restricted Chinese poultry imports over the reference periods used by the European Union in both 
the First and Second Modi fication Packages constitute "discriminatory quantitative restrictions " 
within the meaning of the Ad Note to Article XXVIII:1. The relevant facts321 are not in dispute, and 
the parties ' disagreement turns on their opposing interpretations of the terms "discriminatory 
quantitative restrictions ".  We will begin our analysis by interpreting the term "discriminatory " in 
the context of the Ad Note to Article XXVIII:1, taking into account the ordinary meaning of the 
term "discriminatory ", the immediate and wider co ntext in which it appears, and the object and 
purpose of Article XXVIII.  
7.194.   In its first written submission, China referred to a passage from the Appellate Body Report 
in Canada – Wheat Exports and Grain Imports  to support its contention that the "ordinary 
meaning " of the concept of "discrimination " may, depending on the context of the provision, be 
interpreted broadly. The Appellate Body stated:  
When viewed in the abstract, the concept of discrimination may encompass both the 
making of distinctions between s imilar situations, as well as treating dissimilar 
situations in a formally identical manner.322  The Appellate Body has previously dealt 
with the concept of discrimination and the meaning of the term "non-
discriminatory "323, and acknowledged that, at least ins ofar as the making of 
distinctions between similar situations is concerned , the ordinary meaning of 
discrimination can accommodate both drawing distinctions per se, and drawing 
distinctions  on an improper basis .324 Only a full and proper interpretation of a  
provision containing a prohibition on discrimination will reveal which type of 
differential treatment is prohibited.325 (emphasis added)  
7.195.    China cites this passage as support for the proposition that "[t]he concept of 
'discriminatory ' quantitative restrictio ns covers not only those discriminatory restrictions that are 
prohibited by the covered agreements, but also others that are justifiable under relevant 
                                               
319 China's first written submission, para. 109.  
320 EU's first written submission, paras. 134 -140. 
321 See section  7.2.3 above.  
322 (footnote original ) See the reasoning of the Appellate Body with respect to Article III:4 of the GATT 
1994 in its Report in  Korea – Various  Measures on Beef , para. 136, referring to the GATT Panel Report, US – 
Section 337 . As this case does not include any claim based on discrimination arising from formally identical 
treatment , we do not address this type of discrimination in our discussion.  
323 (footnote original ) Appellate Body Report, EC – Tariff Preferences , paras. 142 –173.  In that case, the 
Appellate Body examined the meaning of the term "non -discriminatory" in footnote 3 to paragraph 2(a) of the 
Enabling Clause.  
324 (footnote original ) Appellate Body Report, EC – Tariff Preferences , para. 153.  
325 Appellate Body Report, Canada – Wheat Exports and Grain Imports , para. 87.   WT/DS492/R  
 
- 84 - 
 
  provisions of the covered agreements ".326 In our view, the above passage supports the proposition 
that the  term "discrimination " may be interpreted relatively narrowly, so as to cover only 
unjustifiable distinctions, or relatively broadly, so as to also cover distinctions that are legitimate 
and justifiable. To that extent, we agree that t he word "discriminati on" may be given different 
meanings depending on the context in which that  word appears, and depending on the context, 
may have a broad meaning that covers legitimate and justifiable distinctions.  
7.196.   However, the passage above and prior Appellate Body jurisp rudence establishes that, 
under both the relatively narrow meaning of "discrimination " and this relatively broad meaning of 
"discrimination ", the outer limit of the ordinary meaning of the term "discrimination " only extends 
to situations in which different ial treatment, whether justified or not, is accorded to entities that 
are similarly situated . In other words, we read the Appellate Body to say that even where the term 
"discrimination " is to be interpreted relatively broadly, in a way that would cover "both drawing 
distinctions per se, and drawing distinctions  on an improper basis ", this would still only be "insofar 
as the making of distinctions between similar situations  is concerned ".327  
7.197.   In addition to what the Appellate Body stated in the above passage f rom Canada – Wheat 
Exports and Grain Imports  in the context of interpreting the term "discriminatory " in 
Article  XVII:1(a) of the GATT 1994, this was the essence of the prior finding in the Appellate Body 
Report that was being summarized in  Canada – Wheat Exports and Grain Imports . In EC –Tariff 
Preferences , the Appellate Body addressed the meaning of the term "discrimination " in the context 
of footnote 3 of the Enabling Clause. The Appellate Body recognized that the ordinary meaning of 
the term may include  a relatively broad and "neutral " meaning "of making a distinction ", or a 
relatively narrow and "negative " meaning "carrying the connotation of a distinction that is unjust 
or prejudicial ". However, the Appellate Body clarified that under both the broad an d the narrow 
meaning of the term "discrimination ", the sine qua non  is that the different treatment must be 
accorded to "similarly -situated " entities. This is apparent from the following passage of its Report 
in EC – Tariff Preferences : 
[W]e are able to di scern some of the content of the "non-discrimination " obligation 
based on the ordinary meanings of that term .  Whether the drawing of distinctions is  
per se discriminatory, or whether it is discriminatory only if done on an improper 
basis, the ordinary mea nings  of "discriminate " converge in one important respect :  
they both suggest that distinguishing among similarly -situated beneficiaries is 
discriminatory. For example, India suggests that all beneficiaries of a particular 
Member 's GSP scheme are similarly -situated , implicitly arguing that any differential 
treatment of such beneficiaries constitutes discrimination. The European Communities, 
however, appears to regard GSP beneficiaries as similarly -situated when they have 
"similar development needs ". Althoug h the European Communities acknowledges that 
differentiating between similarly -situated GSP beneficiaries would be inconsistent with 
footnote  3 of the Enabling Clause, it submits that there is no inconsistency in 
differentiating between GSP beneficiaries w ith "different development needs ".  Thus, 
based on the ordinary meanings of "discriminate ", India and the European 
Communities effectively appear to agree that, pursuant to the term "non-
discriminatory " in footnote  3, similarly -situated  GSP beneficiaries s hould not be 
treated differently. The participants disagree only as to the basis for determining 
whether beneficiaries are similarly -situated .328 (emphasis added)  
7.198.   The Appellate Body explained that "the convergence of those definitions on the fact that 
simila rly-situated  entities should not be treated differently " finds reflection in the use of the term 
"discrimination " in general international law.329 The Appellate Body, applying that interpretation of 
                                               
326 China's first written submission, para. 64.  
327 Appellate Body Report, Canada – Wheat Exports and Grain Imports , para. 87. (emphasis added)  
328 Appellate Body Report, EC – Tariff Preferences , para. 153.  
329 Appellate Body Report, EC – Tariff Preferences , footnote 318. (emphasis added) As examples, the 
Appellate Body quoted from R. Jennings and A.  Watts (eds.),  Oppenheim's International Law , 9th ed. 
(Longman, 1992), Vol.  I, p. 378 ("Mere differences of treatmen t do not necessarily constitute discrimination … 
discrimination may in general be said to arise where those who are in all material respects the same are 
treated differently, or where those who are in material respects different are treated in the same way "); and 
from E.W. Vierdag, The Concept of Discrimination in International Law , (Martinus Nijhoff, 1973), p.  61 
("Discrimination occurs when in a legal system an inequality is introduced in the enjoyment of a certain right, WT/DS492/R  
 
- 85 - 
 
  the term "discrimination ", concluded that "preference -grant ing countries are required, by virtue of 
the term "non-discriminatory ", to ensure that identical treatment is available to all similarly -
situated  GSP beneficiaries ".330  
7.199.   Based on the foregoing, we consider that the ordinary meaning of the term 
"discriminator y" is somewhat elastic and may be interpreted narrowly or broadly, depending on 
the context. However, even if this concept is stretched to include the broader meaning of 
discrimination, the ordinary meaning of the term "discriminatory quantitative restrict ions" would 
still only cover, in the context of paragraphs 4 and 7 of Note Ad Article XXVIII:1, quantitative 
restrictions that draw distinctions between imports from different countries that are similarly -
situated .  
7.200.   Turning to the context of paragraphs 4 a nd 7 of the Ad Note to Article XXVIII:1, the 
concept of "discrimination " appears in numerous provisions of the GATT 1994 and the other 
covered agreements. The term "discrimination " is used in some WTO provisions accompanied by 
the associated terms "arbitra ry or unjustifiable " (or comparable terms) and "where the same 
conditions prevail " (or comparable terms).331 In the context of certain provisions, the term 
discrimination is accompanied by one of those associated terms, but not the other.332 In the 
context of some other provisions, such as paragraphs 4 and 7 of the Ad Note to Article XXVIII:1, 
the term "discriminatory " or "discrimination " is not accompanied by the qualifying terms "arbitrary 
or unjustifiable ", or by the terms "between countries where the same c onditions prevail ". China 
argues that the phrase "discriminatory quantitative restrictions " should therefore be interpreted to 
cover "both arbitrary or unjustifiable discrimination, as well as non -arbitrary or justifiable 
discrimination -- regardless of th e application to countries where the same conditions prevail ".333 
7.201.   We agree with the premise that when the same term is accompanied by qualifying terms 
that narrow or broaden the ordinary meaning of that term in the context of some provisions, but 
that same t erm is used in the context of other provisions unaccompanied by any such qualifying 
language, then the omission of the qualifying language must be given meaning and, all else being 
equal, it must be interpreted in accordance with its unqualified ordinary m eaning. However, the 
function of qualifying terms is not always to narrow or broaden the ordinary meaning of the term. 
To the contrary, qualifying language may serve the purpose of bringing greater precision to how a 
general concept or legal standard is to  be applied in a given provision or context, when the 
ordinary meaning of that term is general enough to accommodate an interpretative range with 
different shades of meaning.  The foregoing consideration is particularly relevant in the context of 
interpreti ng a general concept such as "discrimination ".334 It appears to us that when the term 
"discrimination " is accompanied by the qualifying terms "arbitrary or unjustifiable " (or comparable 
terms) and "where the same conditions prevail " (or comparable terms) in certain provisions, these 
additional terms serve the purpose of bringing greater precision to how the general concept and 
legal standard of "discrimination " is to be applied in a given provision or context. These qualifying 
terms do not, in our view, serve  the purpose of narrowing the ordinary meaning of the term 
"discrimination " in the manner suggested by China.   
                                                                                                                                               
or in a duty, while there is no s ufficient connection between the inequality upon which the legal inequality is 
based, and the right or the duty in which this inequality is made.")  
330 Appellate Body Report, EC – Tariff Preferences , para. 173. (emphasis added) The Appellate Body's 
interpret ation of the ordinary meaning of term "discrimination" in the above cases is consistent with the 
meaning given to the term in other contexts. For example, as regards the term "discrimination" in the context 
of Article XX, the Appellate Body has explained t hat "discrimination results not only when countries in which 
the same conditions prevail are differently treated, but also when the application of the measure at issue does 
not allow for any inquiry into the appropriateness of the regulatory program for th e conditions prevailing in 
those exporting countries"(Appellate Body Report, US – Shrimp , para. 165).  
331 For example, the chapeau of Article XX of the GATT 1994 refers to "arbitrary or unjustifiable" 
discrimination between countries "where the same conditi ons prevail", and the sixth recital of the preamble to 
the TBT Agreement uses identical terminology, as does the first recital to the SPS Agreement; the chapeau of 
Article XIV of the GATS refers to "arbitrary or unjustifiable" discrimination between countr ies "where like 
conditions prevail"; Article 2.3 of the SPS Agreement refers to "arbitrary or unjustifiable" discrimination 
between counties "where identical or similar conditions prevail".  
332 For example, Article 5.5 of the SPS Agreement refers to certain "arbitrary or unjustifiable 
distinctions", insofar as such distinctions "result in discrimination".  
333 China's response to Panel question No. 82, para. 46.  
334 Panel Report, Canada – Pharmaceutical Patents , paras. 7.94 and 7. 98. WT/DS492/R  
 
- 86 - 
 
  7.202.   China argues that the provisions of relevance in this case are Article XXVIII:1 and 
paragraphs 4 and 7 of its accompanying Ad Note, and points ou t that these provisions in no way 
prohibit or require the elimination of any measure characterized as a "discriminatory quantitative 
restriction " within the meaning of those provisions. China emphasizes that these provisions are 
simply about the impact tha t restrictions have had on the imports from supplying WTO Members, 
and therefore any import restriction that has affected the shares of imports should be taken into 
account and allowance should be made for such restriction. In its view, "for the purpose of  Article 
XXVIII:1, the similarity or dissimilarity in sanitary situations is not relevant. What is relevant is the 
existence of import restrictions on some products and not on others whilst all products whichever 
their origin, are like products" .335 
7.203.   The term  "discriminatory" must be interpreted in the particular context of Article XXVIII:1 
and paragraphs 4 and 7 of its accompanying Ad Note. In our view, characterizing a measure as 
discriminatory in the context of the Ad Note triggers significant legal consequ ences. Specifically, 
when a quantitative restriction is characterized as a "discriminatory quantitative restriction " for the 
purpose of the Ad Note to Article XXVIII:1, the legal consequence is that actual import shares that 
Members held over a reference p eriod cannot be used as the basis to determine which Members 
hold a principal or substantial supplying interest. Rather, such determination must be made either 
on the basis of a different reference period, or on the basis of a counterfactual estimate of wh at 
import shares Members would reasonably be expected to have in the absence of the quantitative 
restriction. Thus, the broader the interpretation of the term "discriminatory ", the wider the 
universe of measures that would fall into that category of discri minatory quantitative restrictions, 
and the more complex the ensuing counterfactual analysis.336 We agree with China that such 
complexity is not a reason in and of itself for adopting a narrower interpretation of the term 
"discriminatory ".337 However, such com plexity cannot be regarded as insignificant, especially 
taking into account that one of the objectives of Article XXVIII:1 is to ensure that negotiations and 
agreement under Article XXVIII are not "unduly difficult " and that "complications in the applicati on 
of this Article " are avoided.  
7.204.    Having examined the ordinary meaning of the term "discriminatory ", and having further 
examined the context and object and purpose of paragraphs 4 and 7 of the Ad Note to 
Article  XXVIII:1, we conclude that the terms "discriminatory quantitative restrictions " only cover 
situations in which differential treatment is accorded to imports from Members that are similarly 
situated.  Applying this general concept of discrimination to the SPS measures, we consider that 
restrictions a pplied  to imports based on sanitary grounds are "discriminatory ", within the meaning 
of paragraphs 4 and 7 of the Ad Note to Article XXVIII:1, only if imports from different countries 
that are similarly situated in terms of the sanitary situation  or sanita ry risks are not similarly 
restricted.338 Thus, we do not agree with China's view that China and other countries are "similarly 
                                               
335 China's oral statement at th e first meeting, para. 31.   
336 This is illustrated by China's arguments in the present case. China argues that all of the import bans 
applying to Chinese poultry imports constitute discriminatory quantitative restrictions. In response to questions 
from the  Panel, China has confirmed that the heat treatment measure, including the limitation on the 
production areas ( see paragraphs  7.85 and 7.91 -93), also falls within its definition of "discriminatory 
quantitative restriction" (China's response to Panel questi on Nos. 9(b), 19, and 76). If this definition of 
"discriminatory quantitative restrictions" is accepted, this would mean that all of the tariff lines at issue were 
subject to "discriminatory quantitative restrictions" even before the import prohibition in 2002, and also after 
the relaxation of the SPS measures in 2008.  The European Union submits that under China's definition of 
discriminatory quantitative restriction, the European Union would have been obligated to take into account not 
only the specific S PS measures applied to China which are of concern to China, "but also for the SPS measures 
applied to many other WTO Members and, more generally, for the entire sanitary regime applied to imports of 
poultry products" (EU's first written submission, para. 1 32). The European Union submits that estimating what 
poultry imports would be without any of the SPS measures "would be an extremely complex task involving the 
use of highly speculative estimates" (EU's first written submission, para. 131; EU's second writ ten submission, 
para. 29; EU's response to Panel question No. 74).  
337 China's response to Panel question No. 74(a), para. 15.  
338 In this regard, Annex A:1 of the SPS Agreement explicitly defines SPS measures in relation to the 
"risks" they seek to prevent. W e also note  that in the context of the chapeau of Article XX, the Appellate Body 
has clarified that the assessment of whether or not a measure is applied in a manner that gives rise to 
discrimination "between countries where the same conditions prevail" ma y focus on the extent to which the 
same risks are posed. See e.g. Appellate Body Report, US – Tuna II (Art. 21.5 – Mexico) , para. 7.308 (finding 
that "the prevailing conditions between countries are the risks of adverse effects on dolphins arising from tun a 
fishing practices").  WT/DS492/R  
 
- 87 - 
 
  situated" by virtue of the fact that Chinese poultry meat products and poultry meat products 
originating in other countries are "l ike products".339 
7.205.   In this case, in response to the European Union’s argument that its import restrictions 
depend on the sanitary situation or sanitary risks of different countries, China has not attempted 
to argue that imports from any other similarly situat ed country were not subject to the same 
restrictions. Accordingly, we find, on the basis of our interpretation of the term "discriminatory ", 
that China has not demonstrated that the SPS measures at issue are "discriminatory quantitative 
restrictions ". Ther efore, we reject China 's claim that  the European Union violated Article XXVIII:1 
by determining which Members held a principal or substantial supplying interest on the basis of 
actual import levels over the three years preceding the notification of its int ention to modify its 
concessions (2003 -2005 and 2006 -2008), rather than on the basis of an estimate of what 
Members ' shares would have been in the absence of the SPS measures restricting poultry imports 
from China.  
7.206.   Our interpretation of the terms " discrimi natory quantitative restrictions " and the resulting 
conclusions that we have reached renders it unnecessary to rule on several disputed issues raised 
by the parties. First, we have concluded that the sine qua non  of characterizing a measure as a 
"discrimin atory quantitative restriction " is the existence of differential treatment between countries 
that are similarly situated , and that in this case China has not attempted to argue that imports 
from any other similarly situated country (in the sense referred t o above ) were not subject to the 
same restrictions. Accordingly, it is not necessary for us to resolve the parties ' disagreement as to 
whether the scope of the terms " discriminatory quantitative restrictions " in the context of 
paragraphs 4 and 7 covers onl y unjustifiable distinctions in treatment accorded to countries that 
are similarly situated, or is broad enough to also cover justifiable distinctions in treatment 
accorded to countries that are similarly situated.340 Second, given that China has not 
demonst rated that the SPS measures are discriminatory, it is not necessary to rule on the disputed 
issue of whether these measures constitute "quantitative restrictions ". Finally, having found that 
the SPS measures do not constitute "discriminatory quantitative r estrictions " within the meaning of 
paragraphs 4 and 7 of the Ad Note to Article XXVIII:1, it is not necessary to resolve the parties ' 
disagreement as to what share of imports into the European Union market China could reasonably 
be expected to have  had, in  the absence of the SPS import prohibitions , over period 2002 -2008.  
7.4.3.2   Whether the European Union was obliged to re -determine which Members held a 
supplying interest to reflect changes in import shares that took place following the 
initiation of the negotiat ions 
7.207.   We now turn to the second ground for China 's claim that  the European Union violated 
Article XXVIII:1.  
7.208.   China argues that in light of the lapsing of substantial time between the notification of its 
intention to modify its concessions in 2009 and the co nclusion of the negotiations three years later 
in the case of the Second Modification Package, it was necessary for the European Union to engage 
in a re -determination of which Members held a principal or substantial supplying interest , based on 
actual impo rts from the most recent three -year reference period, which in China 's view is 
2009-2011.341 According to China, where negotiations and consultations under Article XXVIII 
extend beyond the six -month period provided for in paragraph 3 of the Ad Note to 
Article XXVIII:1, the determination of which WTO Members hold a principal or substantial 
supplying interest must be updated to reflect changes in import shares.342 China submits that 
because the Article XXVIII negotiations were not concluded until 2012, the Europe an Union should 
                                               
339 China's oral statement at the first meeting, paras. 29 -31. 
340 In this regard, the basis for our conclusion is similar to the basis for the conclusion reached by the 
Appellate Body in EC – Tariff Preferences . In deciding to rule on t he issues relating to the interpretation of the 
term "discriminatory" that are necessary to resolve the question before us, our approach is also similar to that 
followed by the panel in Canada – Pharmaceutical Patents.  In the context of examining the term 
"discrimination", that panel observed that "[g] iven the very broad range of issues that might be involved in 
defining the word", it would "be better to defer attempting to define that term at the outset, but instead to 
determine which issues were raised by  the record before the Panel, and to define the concept of discrimination 
to the extent necessary to resolve those issues"(Panel Report, Canada – Pharmaceutical Patents , para. 7. 98). 
341 China's first written submission, para. 88.  
342 China's first written sub mission, para. 79; China's response to Panel question No. 22.  WT/DS492/R  
 
- 88 - 
 
  have re -determined which Members held a principal or substantial supplying interest based on 
import levels over the most recent period of 2009 -2011.  
7.209.   The European Union submits that it was not required to re -determine which Members had 
a principal or substantial supplying interest on the basis of import data for a period subsequent to 
the initial determination. According to the European Union , China 's claim has no basis in any 
provision of Article XXVIII or the Procedures for Negotiations und er Article XXVIII, or on past 
practice, and would undermine the objective pursued by Article XXVIII:1.   
7.210.   The fundamental legal issue raised by China 's claim is whether, in the context of 
negotiations under Article XXVIII:5, the importing Member is under a l egal obligation to reappraise 
which WTO Members hold a principal or substantial supplying interest to reflect changes in import 
shares that have taken place following the initiation of the negotiations.343 The parties have 
presented a series of arguments in support of their respective positions. The starting point of our 
analysis is the ordinary meaning of the applicable provisions that regulate the determination of 
which Members hold a supplying interest in the context of Article XXVIII negotiations. We will  then 
examine these provisions in the light of the parties ' arguments concerning the context of those 
provisions, their object and purpose, and their prior application.  
7.211.   The text of Article XXVIII:1 itself does not go into detail on the modalities of negoti ations 
to modify concessions, and is silent on the question of when and how determinations of principal 
and supplying interest are to be made. This is elaborated in its Ad Note. Specifically, paragraph 4 
of the Ad Note to Article XXVIII:1 provides that a M ember should only be determined to have a 
principal supplying interest if it "has had, over a reasonable period of time prior to the 
negotiations ", the requisite market share (or would have had such a share in the absence of 
discriminatory quantitative res trictions).344 Although this applies only to the determination of which 
Members hold a principal supplying interest, we see  no reason why a different approach to the 
reference period should be followed for the purpose of determining which Members hold a 
substantial supplying interest.345 
7.212.   The Procedures for Negotiations under Article XXVIII set forth guidelines for determining 
which Members hold a principal or supplying interest. They specify when such a determination is to 
be made, and on what basis. Paragraph 1 of these Procedures provides that the Member intending 
to negotiate the modification or withdrawal of concessions should transmit a notification to that 
effect for circulation to all Members. Paragraph 2 provides that the notification should be 
accompani ed "by statistics of imports of the products involved, by country of origin, for the last 
three years for which statistics are available ".346 Furthermore, paragraph 4 of these Procedures 
provides that any Member which considers that it has a principal or sub stantial supplying interest 
in the concessions that have been identified in the notification should communicate its claim in 
writing to the applicant Member, and that the claim should be made "within ninety days  following 
the circulation of the import stat istics referred to in paragraph 2 ". The Understanding on the 
Interpretation of Article XXVIII provides that the guidelines provided in paragraph 4 of the 
Procedures for Negotiations under Article XXVIII are equally applicable when determining the 
existence  of a principal or substantial supplying interest in the particular situations identified in 
paragraph 1 (highest ratio of exports) and paragraph 4 (new products) of the Understanding.347  
7.213.   What emerges from the foregoing is that the determination of which Me mbers hold a 
principal or substantial supplying interest in the concessions subject to renegotiations is to be 
made on the basis of the data preceding the initiation of the negotiations, and more specifically, 
the data for the last three years accompanying  the notification which the importing Member 
circulates to initiate the process. These provisions do not directly speak to the separate issue of 
whether, having made this initial determination, a Member may then be required to subsequently 
reappraise that determination, at a later stage, to reflect any changes in import shares that have 
                                               
343 We recall that the negotiati ons were conducted under Article XXVIII:5. See footnote 308 above.   
344 Emphasis added.  
345 We note that the paragraph 4 o f the Ad Note regarding determinations of which Members hold a 
principal supplying interest is considerably more detailed than paragraph 7, which concerns substantial 
supplying interest. Thus, the omission of this particular element from paragraph 7 would not suggest that the 
drafters intended for a different approach to apply under paragraph 7.  
346 Emphasis added.  
347 See paragraphs 2 and 5 of the Understanding.  WT/DS492/R  
 
- 89 - 
 
  taken place following the initiation of the negotiations.  The absence of any guidance on that issue 
is notable for the following reasons.  
7.214.   First, t he identification of the M embers having a supplying interest would seem to be a 
necessary pre -condition for the opening of negotiations. Therefore, such a determination must 
obviously be made before the initiation of the negotiations. It is also relatively straightforward that 
such a determination must, given this timing, be made on the basis of a reference period covering 
a period of time prior to the negotiations. Notwithstanding, the Procedures for Negotiations under 
Article XXVIII contain the above -mentioned provisions elaborati ng on the length of that reference 
period and related trade statistics and on the modalities and time -frame for making a claim of 
interest. We consider that if Members were under a far less -obvious legal obligation to reappraise 
and re -determine which othe r Members hold a principal or substantial supplying interest, one 
would expect the Ad Note, the Procedures for Negotiations under Article XXVIII, or the 
Understanding to also provide at least some form of guidance on when and on what basis such a 
reapprais al is to be made. They do not. This serves as an indication that no such requirement 
exists.  
7.215.   Second, t his indication is reinforced by the existence of other provisions of the covered 
agreements that expressly indicate when there may be a requirement to re view and reappraise the 
reference period used to determine the existence of a supplying interest. Notably, Article XIII:4 of 
the GATT  1994348 expressly provides for such a mechanism in the context of allocating TRQs, and 
quantitative restrictions more genera lly, among supplying countries. This provision indicates what 
may be reappraised (the reference period selected, special factors, and other points); what 
procedure is to be followed (a request, followed by consultations); and which Members are be 
involved (those with a substantial supplying interest). The absence of any provision akin to 
Article  XIII:4 in the context of Article XXVIII is not dispositive. However, it reinforces the 
impression that emerges from the text of the applicable provisions relating t o the determination of 
supplying interests.  
7.216.   Turning to the object and purpose of Article XXVIII, which must inform our analysis, we 
are of the view that the rules applicable to the determination of which Members hold a supplying 
interest under Article XXV III should be interpreted in a way that strikes a balance between the 
several competing objectives that find expression in the text of the Ad Note to Article XXVIII:1. On 
the one hand, it is important to ensure that negotiations and agreement under Article  XXVIII are 
not "unduly difficult ", that "complications in the application of this Article " are avoided, and that 
the negotiations should "come to an end as quickly as possible ".349 On the other hand, it is equally 
important to ensure that any Member that ho lds a principal supplying interest "shall have an 
effective opportunity to protect the contractual right which it enjoys under this Agreement "350, and 
we recognize that Article XXVIII "is not only about an expeditious conclusion of modification 
negotiations ".351 
7.217.   We consider that there would be circumstances in which it would not be "unduly difficult " 
or complicated to reappraise which Members hold a substantial supplying interest. For example, it 
could be the case that for some reason, and shortly after the sta rt of the negotiations, a Member 
that had previously been determined to hold a principal supplying interest is rendered unable to 
supply that product at all in the long term.352 On the other hand, we consider that there would be 
other circumstances in which the balance between these competing objectives would tilt the other 
                                               
348 Article XIII:4 provides that:  
With regard to restrictions applied in accordance with [Article XI II:2(d)] or under [Article 
XI:2(c)] the selection of a representative period for any product and the appraisal of any special 
factors affecting the trade in the product shall be made initially by the Member applying the 
restriction;  Provided that such Mem ber shall, upon the request of any other Member having a 
substantial interest in supplying that product or upon the request of the [CONTRACTING 
PARTIES], consult promptly with the other Member or the [CONTRACTING PARTIES] regarding 
the need for an adjustme nt of the proportion determined or of the base period selected, or for 
the reappraisal of the special factors involved, or for the elimination of conditions, formalities or 
any other provisions established unilaterally relating to the allocation of an adeq uate quota or its 
unrestricted utilization.  
349 Paragraph 4 of the Ad Note to Article XXVIII:1. EU's first written submission, para. 153; China's 
response to Panel question No. 22(c), paras. 126 -127. 
350 Paragraph 4 of the Ad Note to Article XXVIII:1.  
351 China' s second written submission, para. 45.  
352 Canada's response to Panel question No. 4(b) to third parties.  WT/DS492/R  
 
- 90 - 
 
  way, and mitigate against re -determining which WTO Members hold a principal or substantial 
supplying interest in the midst of ongoing negotiations. For example, it could be the case that l ong 
after the initiation of negotiations, a relatively minor change in the import shares leads to one 
Member temporarily overtaking another as the supplier with a principal interest, such that a re -
determination would lead to negotiations that have reached  an advanced stage having to be 
restarted again, with a different Member.353  
7.218.   The issue before the Panel is not, however, whether, in the circumstances of this case, the 
European Union should have re -determined which Members held a principal or substantial 
supplying interest. In this regard, both parties agree that this particular issue should not be 
resolved on the basis of a "reasonableness " standard.354 Rather, the issue is whether or not there 
is a legal rule that applies to all cases, putting a Member unde r a legal obligation, in all cases, to 
reappraise which WTO Members hold a principal or substantial supplying interest to reflect changes 
in import shares that have taken place following the initiation of the negotiations. We have already 
noted the absence  of any guidance in the text of the Ad Note and the Procedures for Negotiations 
under Article XXVIII on when and how a Member might reappraise which WTO Members hold a 
principal or substantial supplying interest following the initiation of the negotiations . When this 
silence is read in the light of the need to strike a delicate balance between the different objectives 
of Article XXVIII, it leads us to the conclusion that we cannot, as treaty interpreters, formulate a 
general rule on this matter.    
7.219.   In this regard, we note that there is a lack of clarity in China 's own argumentation 
regarding the scope and nature of such an obligation. China states that w hether the three -year 
period prior to the notification seeking to modify or withdraw a concession is repre sentative, or 
another representative period must be used, "will depend on the circumstances and the facts of 
each case ".355 China also suggests that the obligation to re -determine which Members hold a 
principal or substantial supplying interest following the  initiation of negotiations would be triggered 
where the negotiations were protracted and substantial time lapsed between the notification of the 
intention to withdraw or amend a concession and the conclusion of negotiations and/or 
consultations.356 With ref erence to paragraph 3 of the Ad Note to Article XXVIII:1, China has 
argued that  if the negotiations under Article XXVIII:5 continue past six months, " the assessment 
on the WTO Members holding principal or substantial supplying interests and the relevant 
reference period must be re -assessed", and that the "re-determination should occur after the 
expiry of the six -month deadline" .357 China then added that, "[a] t the very least", the "re -
assessment" should occur as soon as there is evidence of the "developments materially affecting" 
the determination of who holds a principal or substantial supplying interests or affecting the 
determination of the future trade prospects.358 We are not faulting China 's argumentation. Rather, 
we believe that China 's argumentation on t his issue illustrates the difficulty in fashioning an 
                                               
353 In the present case, the European Union points out that "[i]n the case at hand the negotiations were 
difficult and long because of the demanding reque sts put forward by Brazil and Thailand for the benefit of all 
Members. Negotiations would have been even longer if the European Union had been required to discard the 
results of two years of negotiations with those two Members and to start over again the n egotiations on the 
basis of the claim of a principal supplying interest submitted by China in May 2012, nearly three years after the 
initiation of the negotiations" (EU's second written submission, para. 153). In its third -party written 
submission, Brazil states that "it was only after long negotiations with the European Union that it was possible 
to agree on the shared administration of quotas", and that "[b]oth negotiations proved highly complex and 
time-consuming, in particular the second process, which took three years to be completed" (Brazil's third -party 
written submission, paras. 9, 23).  
354 Parties' responses to Panel question No. 106(a).  
355 China's first written submission, para. 76.  
356 China's first written submission, para. 82.  
357 China's response to Panel question Nos. 22 and 23, paras. 125, 128.  
358 China's response to Panel question No. 23, para. 129. In its opening statement at the second 
meeting, China subsequently stated  that "[c]ontrary to the EU’s groundless assertion that China believes the 
determination of Members with a principal or substantial supplying interest would have to occur every six 
months ", China's view is  rather that "such redetermination must occur at such periods of time when material 
trade developments have occurred " that influen ce the supplying interest status of the WTO Members"  (China's 
opening statement at the second meeting of the Panel, para. 40 ). In its comments on the Interim Report, 
China stated that its position is that "if the negotiations / consultations last beyond si x months, the Member 
withdrawing the concession should assess  whether a re -appraisement should be made", but that a " re-
appraisement need not necessarily be made after each period of six months, but must occur when material 
trade developments" have occurre d that influence the supplying int erest status of the WTO Members (China's 
comments on the Interim Report, para. 29) (emphasis original) . WT/DS492/R  
 
- 91 - 
 
  unwritten rule on this matter, in the absence of any textual guidance and in the light of the 
competing objectives of Article XXVIII.  
7.220.   China has argued that even if the negotiations under the Second Mod ification Package 
were conducted under Article XXVIII:5, the six -month time -limit for negotiations envisaged in 
paragraph  3 of the Ad Note, which applies to negotiations under Article XXVIII:1, is nonetheless 
directly applicable.359 We observe that t he text of Article XXVIII specifies that the modification or 
withdrawal of concessions can be done at three different points in time.360 The main difference 
between the three different kinds of Article XXVIII negotiations relates to the time limits for 
concluding su ch negotiations. Paragraph 3 of the Ad Note is explicitly linked to the time limits in 
Article XXVIII:1 negotiations. In the case of negotiations under Article XXVIII:1, the parties must 
aim to reach an agreement before the end of the triennial period, and  the Member wishing to 
modify a concession should notify other Members "not earlier than six months, nor later than three 
months prior to … the termination date of any subsequent period " of its intention to do so.361 In 
this context, there is a six -month tim e-limit. However, in the case of reserved negotiations 
pursuant to Article XXVIII:5, there are no time -limits specified regarding when such negotiations 
are to be concluded. Indeed, this is the defining feature of reserved negotiations under 
Article  XXVIII :5.362 Accordingly, insofar as China is arguing that negotiations under 
Article  XXVIII:5 are subject to the same time -limit that applies in the case of Article XXVIII:1 
negotiations, we consider, based on the above explanation, that there is no time -limit sp ecified for 
reserved negotiations under Article XXVIII:5.  
7.221.   China further argues that an adjustment of the reference period to take account of 
changes in import shares following the initiation of the negotiations is "all the more necessary " 
where the three -year period preceding the notification of the intention to withdraw or amend a 
concession was tainted by the existence of discriminatory quantitative restrictions, and where data 
for a more recent period have become available before the end of the negotiati ons and 
consultations showing developments for a period that reflects the consequences of the partial 
lifting of the discriminatory restrictions.363 We agree that an adjustment of some kind to the 
2006-2008 reference period, used in the Second Modification P ackage, would have been necessary 
if, as argued by China, import data from this period was tainted by the existence of discriminatory 
quantitative restrictions. However, we recall that we have already found that China has failed to 
demonstrate that the SPS  measures at issue constitute discriminatory quantitative restrictions 
within the meaning of paragraphs 4 and 7 of the Ad Note to Article XXVIII:1.  
7.222.   China advances an additional argument based on paragraph 3 of the Understanding on the 
Interpretation of Art icle XXVIII. This provision states that in the determination of which Members 
have a principal supplying interest or substantial interest, only trade in the affected product which 
has taken place on a  most-favoured -nation  (MFN) basis shall be taken into co nsideration. It adds 
that trade in the affected product which has taken place under non -contractual preferences "shall 
also be taken into account if the trade in question has ceased to benefit from such preferential 
treatment, thus becoming MFN trade, at t he time of the negotiation for the modification or 
                                               
359 China's opening statement at the first meeting of the Panel, para. 52; China's response to Panel 
question No. 22(a),  paras 121 -123, China's statement at the second meeting of the Panel, para. 39. China's 
position is not clear. The Panel asked China to clarify the difference between reserved negotiations under 
Article XXVIII:5 and Article XXVIII:1 if both are subject to the same time -limit. China responded that "[t]he 
difference is one of timing. If they reserve their rights to rebinding, WTO Members are not limited to the timing 
set forth for modifications under Article XXVIII:1. The explicit reference in Article XXVIII: 5 to the applicability 
of the procedures of paragraphs 1 to 3 makes it clear that the negotiations of the modifications under Article 
XXVIII:1 or Article XXVIII:5 are the same in other respects" (China's response to Panel question No. 109).  
360 These are: (i ) on the first day of each three -year period, the first of which began on 1 January 1958 
(so-called "open season" negotiations, provided for in Article XXVIII:1); (ii) at any time in special 
circumstances with the authorization of the CONTRACTING PARTIES ( so called "special circumstances" 
negotiations, provided for in Article XXVIII:4); or (iii) during the three -year period referred to above if the 
Member concerned has, before the beginning of the period, elected to reserve the right to renegotiate (so -
called "reserved" negotiations, provided for in Article XXVIII:5).  
361 In the case of negotiations authorized under Article XXVIII:4, an agreement must be reached within 
"60 days or any longer period" depending on the number of items to renegotiate (Article XXVI II:4(c) and Ad 
Article XXVIII:4).  
362 A. Hoda, Tariff negotiations and renegotiations under the GATT and the WTO, Procedures and 
Practices , Cambridge University Press, 2001, at p. 11 (stating that, in the case of reserved negotiations, "there 
are no time lim its at all regarding when they are to be begun or concluded").  
363 China's first written submission, para. 80.  WT/DS492/R  
 
- 92 - 
 
  withdrawal of the  concession,  or will do so by the conclusion of that negotiation ".364 China 
observes that although this provision applies in the case of the transition of preferential trade to 
non-preferent ial trade, it demonstrates that trade levels at the time of the negotiations or by the 
conclusion of negotiations will be taken into account  in the determination of which Members hold a 
principal or substantial supplying interest.365 
7.223.   From a grammatical persp ective, we consider that the wording of paragraph 3 could 
accommodate China 's reading of this provision. However, we also agree with the European Union 
that, from a grammatical perspective, paragraph 3 can be read to mean that a determination of 
whether tr ade in the affected product "has ceased " to benefit from preferences or "will do so " by 
the conclusion of the negotiations is to be made when the negotiations are opened; and that, if 
that is the case, the trade to be taken into account is the trade "which  has taken place " under the 
preferences prior to the initiation of the negotiations, rather than the subsequent non -preferential 
trade.366 We note that paragraph 3 applies to "the determination of which Members have a 
principal supplying interest (whether un der paragraph 1 above or in paragraph 1 of 
Article  XXVIII) ", and determinations of a principal supplying interest under those provisions are to 
be made in accordance with the guideline in paragraph 4 of the Procedures for Negotiations under 
Article XXVIII.  As we emphasized earlier, paragraph 4 provides that a claim of interest is to be 
made "within ninety days  following the circulation of the import statistics  referred to in 
paragraph  2". Those import statistics, as stated in paragraph 2 of the Procedures f or Negotiations 
under Article XXVIII, are statistics of imports for the last three years for which statistics are 
available as from the time that the Member notifies its intention to modify its concessions. Insofar 
as paragraph 3 is open to two different r eadings, we must adopt the reading that is harmonious 
with these elements of the Procedures for Negotiations under Article XXVIII. In addition, we note 
that paragraph 3 refers, in the singular, to "the determination " of which Members have a principal 
or substantial supplying interest.  
7.224.   In support of its contention that an importing Member is under a legal obligation to 
reappraise which WTO Members hold a principal or substantial supplying interest to reflect changes 
in import shares that have taken place fo llowing the initiation of the negotiations, China relies on 
the following statement by the GATT panel in Canada – Lead and Zinc : 
The Panel does not consider that full statistics for the applicable base period must be 
available at the very beginning of the negotiations, provided that these data become 
available later in the negotiations and the latter are not unduly delayed.367 
7.225.   The European Union counters that the panel report in Canada – Lead and Zinc  confirms 
that it is a long -standing practice to determine the value of tariff concessions on the basis of the 
three -year period prior to the initiation of the negotiations pursuant to Article XXVIII.368 The 
European Union notes that in that case, the GATT panel had agreed with the parties that the entire 
calendar y ear of 1974 was part of the three -year base period preceding the initiation of the 
negotiations, even if the notification of the intention to withdraw the concessions had been 
circulated only on 23 December 1974, since negotiations had not effectively star ted until 1975.369 
The European Union notes that, on this premise, the GATT panel went on to find that the EEC 
should have taken into account the statistics for the first 10 or 11 months of 1974 when they 
became available in the course of 1975.370 Thus, the Eu ropean Union submits that, contrary to 
what China alleges, "nothing in these findings suggests that the EEC should have taken into 
account import data for the period after the effective initiation of the negotiations (i.e. 1975 and 
onwards) ".371 On the contr ary, the European Union notes that "the whole report is based on the 
uncontested assumption that only data pre -dating the effective opening of the negotiations 
                                               
364 Emphasis added.  
365 China's first written submission, para. 84; China's opening statement at the first meeting with the 
Panel, para. 37.  
366 EU's sec ond written submission, para. 47.  
367 GATT Panel Report, Canada – Lead and Zinc , para. 17.  
368 At paragraph 15 of its Report, the panel "noted that as a general principle, Article XXVIII 
negotiations had in the past been based on the most recent three -year per iod for which trade statistics were 
available, for the purpose of determining principal or substantial supplier rights".  
369 GATT Panel Report, Canada – Lead and Zinc , para. 16.  
370 GATT Panel Report, Canada – Lead and Zinc , para. 17.  
371 EU's first written subm ission, para. 181.  (emphasis added)  WT/DS492/R  
 
- 93 - 
 
  in 1975 was relevant for the determination of the value of the concession ".372 In addition, Thaila nd 
has drawn the Panel 's attention to the fact that, in that case, the panel report also reflects that the 
EEC was of the view that "there was no precedent in Article XXVIII negotiations for bringing 
forward the base period to incorporate statistical data becoming available after negotiations had 
begun ", and that the EEC had voluntarily agreed "in a desire to adopt a reasonable approach, to 
take account of the trends in trade and in prices in 1974 " instead of using only the reference 
period of 1971 -1973.373 
7.226.   China also notes that the GATT panel in US/EEC – Poultry lends further support to its 
position, as that panel had stated that "[i]n its choice of a reference period, the Panel was guided 
by the practice normally followed by contracting parties in tariff neg otiations, namely to lay 
particular emphasis on the period for which the latest data were available ".374 The European Union 
responds that in US/EEC –Poultry , the GATT panel was requested by the parties to issue an 
advisory opinion on the question of the valu e of a tariff concession, as of 1 September 1960, in the 
context of negotiations under Article XXIV:6 of the GATT. The European Union notes that the panel 
decided to use, as a reference period, the 12 -month period from 1 July 1959 to 30 June 1960. The 
European Union notes that the reason why the parties requested the panel to determine the value 
of the concession as of 1 September 1960, rather than as of the date when the establishment of 
the panel was requested in 1963, is not explained in the report. As a  result, the European Union 
states that "this advisory opinion provides little guidance in relation to the issue raised in this 
claim ".375  
7.227.   We observe that in practice, most negotiations under Article XXVIII have been conducted 
as reserved negotiations under  Article XXVIII:5.376 The European Union has indicated that it is 
unaware that, in practice, any such re -determination of the Members having a principal or 
substantial supplying interest has ever been made, either under the GATT 1947 or under the GATT 
1994. We recognize, as Argentina has pointed out377, that Members participating in a procedure 
under Article XXVIII should conduct the negotiations and consultations "with the greatest possible 
secrecy "378, and that given this secrecy, there is some difficulty in ac cessing information 
concerning instances where the Member seeking to modify a concession has, during the course of 
the negotiations, proceeded to re -determine the Members having a principal or substantial 
suppling interest on the basis of more recent impor t data. For that reason, in the course of these 
proceedings we sought information on this point from China and the third parties.  China states 
that it "has no information to discern whether an updating of data is done " in prior cases where 
the negotiations  took several years .379 Furthermore, no third party indicated that it was aware 
that, in practice, any re -determination of the Members having a principal or substantial supplying 
interest has ever been made, either under the GATT 1947 or under the GATT 1994.380  Based on 
all of the foregoing, it appears to us that, if anything, prior GATT/WTO practice does not support 
China's contention that there is a legal obligation to reappraise which WTO Members hold a 
principal or substantial supplying interest to reflect  changes in import shares that have taken place 
following the initiation of the negotiations.  
                                               
372 EU's first written submission, para. 181.  
373 GATT Panel Report, Canada – Lead and Zinc , para. 8. See Thailand's response to Panel question 
No. 4(a) to third parties.  
374 China's first written submission, para. 83. Panel R eport, US/EEC Poultry , L/2088, 21 November 1963, 
BISD 12S/65, para. 6 . (emphasis added)  
375 EU's first written submission, para. 181.  
376 A. Hoda, Tariff negotiations and renegotiations under the GATT and the WTO, Procedures and 
Practices , Cambridge University  Press, 2001, p. 88; see also Committee on Market Access, Factual report on 
the status of renegotiations under Article XXVIII of the GATT 1994 – Report by the Secretariat, WTO Doc. 
G/MA/W/123, dated 12 May 2016.  
377 Argentina's response to Panel question No.  4(a) to third parties.  
378 The chapeau of Ad Article XXVIII states that parties "should arrange to conduct the negotiations and 
consultations with the greatest possible secrecy in order to avoid premature disclosure of details of prospective 
tariff changes" . It adds that "[t]he [CONTRACTING PARTIES] shall be informed immediately of all changes in 
national tariffs resulting from recourse to this Article".  
379 A. Hoda, Tariff negotiations and renegotiations under the GATT and the WTO, Procedures and 
Practices , Cambridge University Press, 2001, p. 92 (with regard to the Article XXVIII:5 negotiations held 
between 1958 and 1994, that "in some cases the process was concluded within a few months while in others it 
took up to six years or more"); see also Committee on Market Access, Factual report on the status of 
renegotiations under Article XXVIII of the GATT 1994 – Report by the Secretariat, WTO Doc. G/MA/W/123, 
dated 12 May 2016.  
380 See responses by Argentina, Brazil, Canada, Thailand to Panel question No. 4(a) to th ird parties.   WT/DS492/R  
 
- 94 - 
 
  7.228.   Based on all of the foregoing, we are unable to agree with China that an importing Member 
is under a legal obligation to reappraise which WTO Members hold a princ ipal or substantial 
supplying interest to reflect changes in import shares that have taken place following the initiation 
of the negotiations. Therefore, we reject China claims that the European Union violated 
Article  XXVIII:1 by not re -determining which M embers held a relevant supplying interest on the 
basis of the increase in imports from China over the period 2009 -2011.  
7.4.3.3   Whether the European Union 's decision not to recognize China as a Member 
holding a supplying interest was justified by the timing of Chi na's claim  
7.229.   The European Union submits that it was "not required to take into account "381 China 's 
claims of a principal supplying interest in respect of the concessions included in the First 
Modification Package, which China has raised for the first time in t his dispute. The European Union 
submits that it was also not required to take into account China 's claims of a principal or 
substantial supplying interest in respect of the concessions included in the Second Modification 
Package, which China did not raise until May 2012, i.e. nearly three years after the expiry of the 
90-day time limit mentioned in Paragraph 4 of the Procedures for Negotiations under 
Article  XXVIII.  
7.230.   The European Union submits that, by the time China made its claims of interest in respect 
of the Second Modification Package, "the negotiations had already been concluded with both 
Thailand and Brazil and the EU Council had already approved the signature of the agreements 
reached with those two Members ".382 The European Union submits that while th e term "should " 
used in paragraph 4 of the Procedures may suggest that the 90 -day time limit is a guideline, from 
which it may be possible to depart with "due cause ", there are no circumstances in this case that 
would justify such a departure. The European  Union observes that China has not invoked any 
circumstances to justify its failure to submit its claims of a "principal " supplying interest within the 
90-day time-limit in the context of the First Modification Package383, and that the circumstances 
invoked by China in respect of the Second Modification Package do not justify the delay in 
submitting its claims of "principal " and "substantial" supplying interest.384 
7.231.   China does not dispute that Paragraph 4 of the Procedures for Negotiations under 
Article  XXVIII p rovide s for the filing of a claim of interest as a WTO Member holding a principal or 
substantial supplying interest. However, China submits that the 90 -day period for making a claim 
of interest is not couched in mandatory terms and, as a result, does not s et an absolute 
deadline.385 China notes that the European Union does not deny that China 's claim of a 
"substantial " supplying interest for the First Modification Package was introduced within the 90 -day 
period.386  
7.232.   As regards the Second Modification Package, C hina argues that several circumstances 
justify the fact that it did not submit any claim of a principal or substantial supplying interest 
within the 90 -day period, including: (i) the European Union 's refusal to recognise China 's claims of 
a substantial sup plying interest in respect of the First Modification Package387; (ii) at the time 
where the European Union notified its intention to modify concessions on 16 June 2009, "the 
favourable effects of the relaxation of the import bans on 30 July 2008 were barely felt"388; and 
(iii) following the notification of the European Union 's intention to modify the concessions, "no 
information transpired ", so that China did not become aware that negotiations were "carried out " 
until the publication of the agreements  with Braz il and Thailand .389 
7.233.   We note that Article XXVIII of the GATT 1994 does not explicitly identify the time -period 
during which a claim of principal or supplying interest must be made. However, as already 
discussed, paragraph 4 of the Procedures for Negotiations under Article XXVIII sets out a 90 -day 
guideline, running from the date that the Member seeking to modify its concession circulates 
                                               
381 EU's second written submission, para. 2.  
382 EU's second written submission, para. 2.  
383 EU's second written submission, para. 6.  
384 EU's second written submission, paras. 8 -12. 
385 China's second written submission, para. 86.  
386 China's second w ritten submission, para. 87.  
387 China's response to Panel Question No 16, para. 97; China's second written submission, para. 88.  
388 China's response to Panel Question No 16, para. 97; China's second written submission, para. 88.  
389 China's response to Panel Q uestion No 16, para. 97; China's second written submission, para. 88.  WT/DS492/R  
 
- 95 - 
 
  import statistics for the last three years for which statistics are available.390 The Understanding on 
the Interpretation of A rticle XXVIII clarifies that the same 90 -day guideline is applicable in the 
special cases provided for in paragraphs 1 and 4 of the Understanding.391  
7.234.   In this case, China's claim of a substantial supplying interest for the First Modification 
Package was file d within the 90 -day period. China 's claims of a "principal " supplying interest in 
respect of the concessions at issue in the First Modification Package were raised for the first time 
in this dispute, notwithstanding that the European Union had notified WTO  Members of its 
intention to modify those tariff concessions in June 2006. China 's claims of a supplying interest  
(whether "principal" or "substantial")  in respect of the concessions at issue in the Second 
Modification Package were not made until May 2012,  notwithstanding that the European Union had 
notified its intention to modify its concessions and circulated the accompanying import statistics in 
June 2009.392  
7.235.   We have already found that the SPS measures in place over the reference periods selected 
by the European Union did not constitute "discriminatory quantitative restrictions " within the 
meaning of paragraphs 4 and 7 of the Ad Note to Article XXVIII:1. We have also found that , for 
the purpose of the Article XXVIII negotiations,  the European Union was un der no legal obligation to 
re-determine which Members held a principal or substantial supplying interest based on the latest 
available import data for 2009 -2011. In the light of these findings on the two grounds upon which 
China alleges a violation of Arti cle XXVIII:1, it is unnecessary, for the purpose of assessing 
whether the European Union acted consistently with Article XXVIII:1, to additionally rule on 
whether the European Union 's decision not to recognize China as a Member holding a principal or 
subst antial supplying interest was justified by the absence of a timely claim of supplying interest 
by China.393 
7.4.4   Conclusion  
7.236.   Based on the foregoing, the Panel finds that China has failed to demonstrate that the 
European Union violated Article XXVIII:1 of the GATT 1994 by not recogniz ing that China held a 
principal or substantial supplying interest in the concessions at issue in the First and Second 
Modification Packages.  
7.5  Claims under Article XXVIII:2 read in conjunction with paragraph 6 of the 
Understanding on Arti cle XXVIII of the GATT 1994  
7.5.1   Introduction  
7.237.   China claims that the TRQs negotiated in the First and Second Modification Packages are 
inconsistent with Article XXVIII:2, read in conjunction with paragraph 6 of the Understanding on 
the Interpretation of Article XXVIII ( "the Understanding ").394 According to China, the TRQs do not 
maintain "a general level of reciprocal and mutually advantageous concessions not less favourable 
                                               
390 Paragraph 4 provides in relevant part:  
Any contracting party which considers that it has a principal or a substantial supplying interest in 
a concession which is to be the subject of n egotiation and consultation under Article XXVIII 
should communicate its claim in writing to the contracting party referred to in paragraph 1 above 
[the Member seeking to modify or withdraw a concession] and at the same time inform the 
secretariat. … Claims  of interest should be made within ninety days following the circulation of 
the import statistics referred to in paragraph 2 above.  
391 See paragraphs 2 and 5 of the Understanding on the Interpretation of Article XXVIII of the General 
Agreement on Tariffs an d Trade 1994.  
392 China's claims of supplying interests for the poultry meat products concerned  (Exhibit CHN -48). 
393 The European Union raises the timeliness of China's claims in the context of rebutting China's claims 
under both Article XXVIII:1 and Article XIII:2. The European Union has confirmed that the issue of the timing 
of China's claims of principal or substantial supplying interest is not relevant to the assessment of China's 
claims under Article XXVIII:2 and paragraph 6 of the Understanding, Article XIII:1, or Article XIII:4 (EU's 
response to Panel question No. 69(b), para. 17). Insofar as the European Union raises the timing of China's 
claim of supplying interest under Article XXVIII as a defence to China's claims under Article XIII:2, we will 
addres s that issue in the context of our evaluation of China's claims under Article XIII:2.  
394 China's first written submission, paras. 118 -146, 280(3) -(5); China's opening statement at the first 
meeting of the Panel, paras. 56 -75; China's responses to Panel ques tion Nos. 26 -29, 31; China's second 
written submission, paras. 96 -119; China's opening statement at the second meeting of the Panel, paras. 41 -
50; parties' responses, and comments on one another's responses, to Panel question Nos. 64, 66 -67, 85, 111.  WT/DS492/R  
 
- 96 - 
 
  to trade than that provided for in this Agreement prior to such negotiations " within the me aning of 
Article XXVIII:2.  That is because, China argues, the TRQs do not reflect "future trade prospects " 
calculated in accordance with paragraph 6 of the Understanding. We understand China 's claims 
under Article XXVIII:2 and paragraph 6 to rest on multip le grounds, relating both to the total 
amount of the TRQs and the allocation of the TRQs among supplying countries.  
7.238.   The European Union responds that there is no violation of Article XXVIII:2 and paragraph 6 
of the Understanding.395 The European Union submit s that the total amount of the TRQs equals or 
exceeds the greatest of the amounts that would result from applying each of the three formulae 
set out in paragraph 6 of the Understanding based on the relevant reference periods and import 
data. The European U nion submits that the allocation of TRQs among supplying countries is not 
governed by Article XXVIII:2 or paragraph 6 of the Understanding.  
7.5.2   Relevant legal provisions  
7.239.   Article XXVIII:2 of the GATT 1994 reads:  
2. In such negotiations and agreement, which ma y include provision for 
compensatory adjustment with respect to other products, the Members  concerned 
shall endeavour to maintain a general level of reciprocal and mutually advantageous 
concessions not less favourable to trade than that provided for in thi s Agreement prior 
to such negotiations . (emphasis added)  
7.240.    Paragraph 6 of the Understanding on the Interpretation of Article XXVIII of the GATT 1994 
refers to the amount of compensation to be provided when, as in the First and Second Modification 
Packages, an unlimited tariff concession is replaced by a TRQ. Paragraph 6 of the Understanding 
requires that compensation be provided insofar as the "level of the quota ", i.e. the total volume of 
imports subject to the lower in -quota tariff rates, is less than the amount of "future trade 
prospects ". Paragraph 6 reads as follows:  
6. When an unlimited tariff concession is replaced by a tariff rate quota , the 
amount of compensation provided should exceed the amount of the trade actually 
affected by the modification of the concession . The basis for the calculation of 
compensation  should be the amount by which future trade prospects exceed the level 
of the quota .  It is understood that the calculation of future trade prospects should be 
based on the greater of:  
(a) the av erage annual trade in the most recent representative three -year 
period , increased by the average annual growth rate of imports in that same 
period, or by 10 per cent, whichever is the greater; or  
(b) trade in the most recent year increased by 10 per cent.   
In no case shall a Member 's liability for compensation exceed that which would be 
entailed by complete withdrawal of the concession. (emphasis added)  
7.241.   For the purpose of determining the amount of compensation to be provided, 
subparagraphs (a) and (b) of p aragraph 6 sets out three different formulae for calculating the 
amount of future trade prospects against which the level of the quota must be compared. These 
formulae provide that future trade prospects are to be calculated on the basis of historical trad e 
levels, in either "the most recent representative three -year period ", or the "most recent year ". The 
resulting amount is to be increased either by the average annual growth rate of imports in the 
same period (in case a three -year period is selected), or by 10%. Whichever formula yields the 
greatest amount in the circumstances is to be used.  
                                               
395 EU's first written submission, paras. 154 -182; EU's opening statement at the first meeting of the 
Panel, paras. 18 -19; EU's responses to Panel question Nos. 25 -28, 30; EU's second written submission, paras. 
60-85; EU's opening statement at the second meeting of the Panel, paras. 21 -31; parties' responses, and 
comments on one another's responses, to Panel question Nos. 64, 66 -67, 85, 111.  WT/DS492/R  
 
- 97 - 
 
  7.242.   Article XXVIII:2 provides that Members "shall endeavour to maintain " a general level of 
reciprocal and mutually advantageous concessions not less favourable to trade than that provided 
for in this Agreement prior to such negotiations.  The European Union refers to Article XXVIII:2 as a 
"best efforts " obligation and considers that in assessing the level of compensation the "negotiating 
Members must be accorded a wide mar gin of discretion ".396 China responds that Members are not 
accorded "a wide margin of discretion " in determining the appropriate level of compensation, and 
notes that the word "endeavour " used in Article XXVIII:2 is accompanied by the verb "shall", 
meaning t hat Members are compelled to work towards the maintenance of the general level of 
reciprocal concessions.397 However, it does not appear to us that the parties ' disagreement on how 
best to characterize Article XXVIII:2, to the extent that there is such a dif ference, raises any issue 
for the Panel to resolve.398 For its part, the European Union has not argued that China 's claims of 
violation under Article XXVIII:2 read in conjunction with paragraph 6 of the Understanding should 
be dismissed on the basis that Article XXVIII:2 reflects a "best efforts " obligation. In addition, 
China appear s to accept that the meaning of Article XXVIII:2 and paragraph 6 of the 
Understanding is that "it may be difficult to have a compensation that is mathematically the exact 
counterf actual of the concession being withdrawn ", and that what is required is that Members "do 
all in their power to reach that goal ".399  
7.243.   Furthermore, the European Union does not contest that Article XXVIII:2 "establishes a 
mandatory obligation which is cognizabl e under the DSU ".400 The European Union also agrees with 
China that, regardless of which Members are involved in the negotiations under Article XXVIII, any 
WTO Member has the right to challenge the compensation agreed pursuant to Article XXVIII under 
the DSU , if they consider that it is not adequate in view of Article XXVIII:2 and paragraph 6 of the 
Understanding.401 In sum, whatever the differences between the parties ' respective positions on 
certain aspects relating to the contours of this obligation, there i s no disagreement that Article 
XXVIII:2 establishes a legally enforceable obligation.  
7.244.   The parties agree that if compensation is calculated in accordance with paragraph 6 of the 
Understanding, it would normally be presumed to be compliant with Article XXVI II:2.402 We see no 
reason to disagree. Article XXVIII:2 is a generally worded provision. Article XXVIII:2 does not 
include any specific rules in order to determine the amount of compensation to be accorded by the 
Member seeking the modification of a concessi on, and in practice assessments of the "level of 
concessions " may be a very complex and difficult task, which can be approached by the 
negotiating Members in very different ways.403 The Understanding is an integral part of the GATT 
1994, the purpose of which  is to set forth an agreed interpretation among Members on the 
meaning to be given to certain aspects of Article XXVIII, including Article XXVIII:2. Moreover, 
paragraph 6 specifically addresses the question of the level of compensation to be provided when,  
as in the present case, an unlimited tariff concession is replaced with a TRQ. As China notes, 
"[t]he EU 's unlimited tariff concessions with regard to the poultry products at issue were replaced 
by TRQs in the 2007 and 2012 Modification Packages . As such,  paragraph 6 of the Understanding 
on the Interpretation of Article XXVIII of the GATT 1994 is clearly applicable ."404 
7.245.   Consistent with this understanding of the relationship between Article XXVIII:2 and 
paragraph 6 of the Understanding, China 's claims of viol ation in this case are based on 
Article  XXVIII:2, "read in conjunction " with the Understanding "and in particular paragraph 6 
                                               
396 EU's response to Panel question No. 25, para. 78.  
397 China's second written submission, paras. 96 -101. 
398 In our view, China 's claims in this case under Article XXVIII:2 read in conjunction with paragraph 6 
of the Understanding could be characterized in terms of the European Union not endeavouring to achieve the 
result set forth in Article XXVIII:2, and would thus fall within t he scope of the obligation in that provision 
insofar as it is characterized as a "best efforts" obligation. Thus, in the circumstances of this case, whether 
Article XXVIII:2 is properly characterized as a "best efforts" obligation is not an issue we need t o resolve.  
399 China's second written submission, para. 101.  
400 EU's response to Panel question No. 25, para. 78.  
401 See EU's response to Panel question No. 12, para. 42.  
402 China considers that "where paragraph 6 of the Understanding is strictly adhered to, th e resulting 
tariff rate quota should normally be in compliance with Article XXVIII:2"(China's response to Panel question 
No. 26(b), para. 132). The European Union also considers that "if compensation is consistent with paragraph  6 
of the Understanding it m ust be deemed compliant with Article XXVIII:2"  (EU's response to Panel question No. 
26, para. 83) . See also EU's second written submission, para. 60.  
403 A. Hoda, Tariff Negotiations under the GATT and the WTO, Procedures and Practices , CUP 2001, 
pp. 52-53. 
404 China's first written submission, para. 136.  WT/DS492/R  
 
- 98 - 
 
  thereof ".405 China has claimed that the total amount of the TRQs and their allocation among 
supplying countries is inconsistent with  these provisions in a number of different respects. China 
has clarified that each of those claims rests on the same legal basis, namely Article XXVIII:2 taken 
together with paragraph 6 of the Understanding, as opposed to some claims being based on the 
obligation in Article XXVIII:2, and others being based on the terms of paragraph 6 of the 
Understanding.406  
7.246.   Finally, in accordance with the findings of the panel and the Appellate Body in EC – Poultry,  
the parties agree that compensation negotiated within the framework of Article XXVIII is not 
"exempt from compliance with the non -discrimination principle inscribed in Articles I and XIII of 
the GATT 1994 ", and if "preferential treatment of a particular trading partner not elsewhere 
justified is permitted under t he pretext of 'compensatory adjustment ' under Article  XXVIII:2, it 
would create a serious loophole in the multilateral trading system ".407  The European Union  agrees 
with China that, in accordance with EC – Poultry , the "compensation provided pursuant to an 
agreement under Article XXVIII is not meant to compensate exclusively the Member which has 
negotiated the compensation and must be made available to all Members on a MFN basis ".408 
7.5.3   Analysis by the Panel  
7.247.   Turning to the issues that are in dispute, o ur underst anding is that China 's claims under 
Article XXVIII:2 and paragraph 6 of the Understanding rest on several different grounds, relating 
both to the total amount of the TRQs and to the allocation of the TRQs among supplying countries.  
7.248.   The precise scope and na ture of China 's claims of violation under Article XXVIII:2 have 
been clarified in the course of the proceedings. Initially, the European Union understood that 
China 's claims under Article XXVIII:2 and paragraph 6 of the Understanding did "not relate to the  
overall size of the TRQs at issue, but instead to the allocation of each of those TRQs among 
different supplying Members ".409 In the course of the proceedings, it has become apparent that 
China 's claims under Article XXVIII:2 and paragraph 6 of the Understa nding relate not only to the 
allocation of the TRQs among supplying countries, but also to the total amount of the TRQs.  
7.249.   The parties agree that the obligation in Article XXVIII:2 read in conjunction with 
paragraph  6 of the Understanding applies to the cal culation of the total amount of the TRQs. We 
further note that China 's claims of violation relating to the allocation of the TRQs among supplying 
countries are for the most part based on the same grounds as its claims relating to the total 
amount of the TR Qs. Accordingly, we consider it logical to first examine the claims that China 
advances regarding the total amount of the TRQs, and thereafter, in the light of the findings that 
we have reached, proceed to examine China 's claims under Article XXVIII:2 and paragraph 6 of 
the Understanding relating to the allocation of the TRQs among supplying countries.  
7.250.   Before turning to the analysis of China 's claims relating to the total amount of the TRQs 
and their allocation among supplying countries, however, we briefl y recall our findings under 
Article  XXVIII:1, and the implications that these findings have on our assessment of China 's claims 
under Article XXVIII:2 read in conjunction with paragraph 6 of the Understanding.  
7.5.3.1   Whether different reference periods can be us ed for the determinations under 
Article XXVIII:1 and Article XXVIII:2 read in conjunction with paragraph 6 of the 
Understanding  
7.251.   China 's principal claims under Article XXVIII:2 and paragraph 6 of the Understanding, both 
at the level of the total amount of the TRQs and at the level of their allocation among supplying 
                                               
405 China's request for the establishment of a panel, items (ii) of section II.A and (ii) of section II.B.  
406 China's response to the Panel's Question 26, para.131. The European Union shares this 
understanding as  well. See EU's response to Panel question No. 26, para. 81; EU's second written submission, 
para. 60.  
407 Appellate Body Report, EC – Poultry , paras. 100 -101. 
408 China's first written submission, paras. 120 -129; EU's response to Panel question No. 30, para. 87 
(citing Appellate Body Report, EC – Poultry , paras. 96 -102).  
409 EU's first written submission, para. 163. In its response to Panel question No. 26, the European 
Union still understood that "the allegations made by China in both section IV.A.2(a) and sect ion IV.A.2(b) do 
not relate to the amount of compensation provided by the European Union, but instead to the allocation of 
such compensation among supplying countries" (EU's response to Panel question No. 26, para. 82).  WT/DS492/R  
 
- 99 - 
 
  countries, include the same two horizontal arguments that we have already considered in the 
context of examining China 's claims under Article XXVIII:1. First, we understand China to argue 
that f or both the First and Second Modification Packages, the European Union was under a legal 
obligation to estimate what the import levels would have been in the absence of the SPS measures 
restricting poultry imports from China. Second, we understand China to argue that the European 
Union was required to base its determinations , of the total amount and allocation of the TRQs for 
the Second Modification Package , on actual imports from the most recent three -year reference 
period preceding the conclusion of the n egotiations. China considers that the Article XXVIII 
negotiations concluded in December 2012, and therefore the three preceding years are 
2009-2011.  
7.252.   China has claimed that the European Union violated Article XXVIII:1 on essentially the 
same two grounds. We  have already rejected China 's claims under  Article XXVIII:1, and instead 
found that the European Union was free to determine which Members held a principal and 
substantial supplying interest in the concessions at issue in the First and Second  Modification  
Packages on the basis of actual imports into the European Union over the three -year period 
preceding the European Union notification of its intention to modify concessions under 
Article  XXVIII. Given that finding, we consider it is necessary to explain ou r understanding of the 
implications that this finding has on our assessment of China 's claims under Article XXVIII:2 read 
in conjunction with paragraph 6 of the Understanding, given the significant degree of overlap in 
China 's argumentation under these pro visions.  
7.253.   We do not consider that the conclusions that we have reached in relation to China 's claims 
under Article XXVIII:1 necessarily dispose of China 's claims under Article XXVIII:2 read in 
conjunction with paragraph 6 of the Understanding. The reason is  that each provision contains its 
own applicable legal standard, which applies to a different subject -matter. We are well aware that 
the subject matter of Article XXVIII:2 and paragraph 6 of the Understanding is distinct from the 
subject matter of Article XXVIII:1.  
7.254.   Accordingly, having found that the European Union was free to base its determinations of 
which Members held a relevant supplying interest on actual imports over the reference periods 
that it selected for that purpose (2003 -2005 and 2006 -2008), w e do not a priori  exclude the 
possibility that the European Union might have been obligated to calculate the compensation 
required under Article XXVIII:2 and paragraph 6 of the Understanding on the basis of a different 
period.410  
7.5.3.2   Whether the total amount of  the TRQs is consistent with paragraph 6 of the 
Understanding  
7.255.   China  submits that the total amount of the TRQs is less than the minimum levels 
calculated in accordance with paragraph 6 of the Understanding. China presents a series of 
arguments in this rega rd. First, we understand China to argue that the total amount s of the TRQs 
are not based on a "representative " period within the meaning of paragraph 6 because they were 
calculated on the basis of reference periods during which Chinese poultry products wer e subject to 
SPS import bans. Second, China submits that the total amounts of the TRQs for four of the TRQs 
under the Second Modification Package (tariff lines 1602 32 11, 1602 32 30, 1602 32 90 and 1602 
39 29) fall below the minimum amount required by par agraph 6 when applied to imports into the 
European Union over the 2009 -2011 period, which in China 's view is "the most recent three -year 
period " within the meaning of paragraph 6 of the Understanding. Third, China argues that even if 
the 2006 -2008 period i s used, the total amount s of the TRQs should have been calculated on the 
                                               
410 China's views on this matter appea r to have evolved in the course of these proceedings. In its first 
written submission, China stated that "the determination of the existence of a PSI or SSI in one period and the 
calculation of compensation on a different period would seem illogical", and that "[d]iscussions with WTO 
Members that may have PSI or SSI rights during one reference period, whilst agreeing on compensation based 
on data for another reference period, would create an imbalance that is neither logical nor reasonable" (China's 
first w ritten submission, para. 86). At the first substantive meeting of the Panel, China stated that "the base 
period to be taken into account for the calculation of the compensation … may then be a period that is different 
from the period used to determine the WTO members with principal or substantial supplying interests" (China's 
opening statement at the first meeting of the Panel, para. 70). Along the same lines, at the second meeting of 
the Panel, China stated that "[l]egally speaking, the reference period us ed to determine Members with a PSI or 
SSI is different from that used to calculate compensation" (China's opening statement at the second meeting of 
the Panel, para. 48).  WT/DS492/R  
 
- 100 - 
 
  basis of imports into all EU28 countries over the 2006 -2008 period, and that the total amount of 
one of the TRQs in the First Modification Package (tariff line 1602 31) falls below th e minimum 
amount required by paragraph 6 of the Understanding when EU28 data is used.  
7.256.   The European Union rejects China 's arguments . First, the European Union submits that 
there is no evidentiary basis for China 's contention that, in the absence of the SPS measures 
applied to imports from China, the total amount of the TRQs deter mined on the basis of 
paragraph  6 of the Understanding would have been larger than the total amount of the TRQs 
agreed by the European Union. Second, the European Union submits that "the most recent 
representative three -year period " in paragraph 6 of the Understanding refers to the most recent 
years preceding the initiation of the negotiations under Article XXVIII, and not the three -year 
period preceding the conclusion of the negotiat ions as maintained by China. Accordingly, the 
European Union submits that it was under no obligation to calculate the total amount s of the TRQs 
for the Second Modification Package on the basis of import levels over the 2009 -2011 period. 
Third, the European  Union rejects China 's contention that it was required to account for poultry 
imports into Romania, Bulgaria, or Croatia in the years prior to these countries becoming Members 
of the European Union.   
7.257.   In the light of the foregoing, we understand China to c laim that the total amount of the 
TRQs is inconsistent with Article XXVIII:2 and paragraph 6 of the Understanding on three separate 
grounds. To resolve these claims, the Panel must resolve the following issues. First, whether the 
European Union was obliged  to calculate the total amount of the TRQs for the First and Second 
Modification Packages on the basis of an estimate of what import levels would have been in the 
absence of the SPS measures prohibiting or restricting certain poultry imports from China. Se cond, 
whether the European Union was obliged to calculate the total amount of the TRQs for the Second 
Modification Package on the basis of import levels over the 2009 -2011 period. Third, whether the 
European Union was required, in the context of the Second  Modification Package, to account for 
poultry imports into Romania, Bulgaria and Croatia in the years before they acceded to the 
European Union. We will proceed to examine these issues in turn.  
7.5.3.2.1   Whether the European Union was obliged to calculate the total  amount of the 
TRQs on the basis of an estimate of what import levels would have been in the absence 
of the SPS measures  
7.258.   China claims that where as in this case SPS import bans are imposed, the period of 
application of these import bans cannot be used as a  representative basis for determining the 
amount of compensation under Article XXVIII:2 and paragraph 6. Otherwise "it is impossible to 
provide compensation that [is] based on the future trade prospects of China ".411 Rather, China 
considers that the period s elected "must be representative of China 's future trade prospects which 
must be trade prospects free from import bans ".412 China submits that this applies both to the 
determination of "the global TRQs " (i.e. the total amount  of each TRQ, as distinguished fro m the 
shares of the TRQ) and also the TRQ allocations among supplying countries.413 In other words, 
China contends that, "pursuant to Article XXVIII:2, for the global TRQ volume to restore the 
general balance of concessions, the future trade prospects of par agraph 6 of the Understanding on 
the Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994 should 
take into account the future trade prospects of all WTO Members exempt from the impact of 
import bans ".414  
7.259.   We recall that paragra ph 6 of the Understanding requires that when an unlimited tariff 
concession is replaced by a TRQ, the amount of compensation provided should be based on a 
calculation of the amount by which "future trade prospects " exceed the level of the quota. 
Paragraph 6 specifies how "future trade prospects " are to be calculated, based on the formulae in 
sub-paragraphs (a) and (b). Paragraph 6(a) provides that if "future trade prospects " are calculated 
based on average annual trade over a three -year period, that period must be a "representative " 
three -year period.  
                                               
411 China's first written submission, para. 143.  
412 China's first written submission, pa ra. 143.  
413 China's first written submission, para. 145.  
414 China's second written submission, para. 102.  WT/DS492/R  
 
- 101 - 
 
  7.260.   We consider that, for the purpose of calculating the total amount of the TRQ s under 
paragraph 6 of the Understanding, a three -year period would be "representative " if the total 
amount of the average annual tra de during that period is typical of, and serves to represent, the 
total amount of annual trade in the product which has occurred in the past or could be expected to 
occur in the future. Conversely, for the purpose of calculating the total amount of the TRQ s under 
paragraph 6 of the Understanding, a three -year period may not be "representative " if the total 
amount of the average annual trade during that period is not typical of, and could not serve to 
represent, the total amount of annual trade in the produc t which has occurred in the past or could 
be expected to occur in the future.  
7.261.   Accordingly, we consider that in order to find that the reference periods selected by the 
European Union were not "representative " for the purpose of calculating the total amount  of the 
TRQs because of the SPS measures that were in place during this time, it would be necessary to 
establish that these SPS import restrictions significantly altered the total amount of annual trade in 
the poultry products concerned  from all sources, a nd not merely that the amount from China 
would have been greater . However, China has not asserted that in the absence of the SPS 
measures applied to imports from China, the total amount of imported poultry products into the 
European Union from all sources  would have been any greater. We cannot assume that this would 
have been so, because imports from China compete directly with imports from other sources, 
which were not subject to those measures.415 Assuming that the amount of poultry imports 
supplied from Ch ina into the European Union would have been greater in the absence of the SPS 
measures  at issue , one might expect to find a  corresponding decrease in the amount of imports of 
the like products supplied from other sources into the European Union in the abse nce of any 
change in overall demand  for those products in the European Union . In the absence of any 
assertion or demonstration by China that the total amount of imports into the European Union 
from all sources of the poultry products concerned would have b een any different in the absence of 
the SPS measures, China has not provided any calculation of whether the total amount of the 
TRQs determined on the basis of paragraph 6 of the Understanding would have been larger than 
the total amount of the TRQs agreed  by the European Union for any of the tariff lines at issue in 
the First or Second Modification Packages.  
7.262.   While our analysis of this claim could stop at this point, we recall our prior finding that 
China has failed to demonstrate that the SPS measures at issue are "discriminatory quantitative 
restrictions " within the meaning of paragraphs 4 or 7 of the Ad Note to Article XXVIII:1. The same 
legal standard is not directly referenced in the text of Article XXVIII:2 or paragraph 6 of the 
Understanding. However , paragraph 6 of the Ad Note to Article XXVIII:1, which relates to the 
amount of compensation that is negotiated, links back to the concept of "discriminatory 
quantitative restrictions ". Paragraph 6 of the Ad Note to Article XXVIII:1 states:  
"It is not in tended that provision for participation in the negotiations of any Member  
with a principal supplying interest, and for consultation with any Member  having 
substantial interest in the concession which the applicant is seeking to modify or 
withdraw , should h ave the effect that it should have to pay compensation or suffer 
retaliation greater than the withdrawal or modification sought, judged in the light of 
the conditions of trade at the time of the proposed withdrawal or modification, making 
allowance for any  discriminatory quantitative restriction maintained by the applicant 
Member ." (emphasis added)  
7.263.   The Ad Note suggests that, when calculating the amount of the compensation for the 
purpose of Article XXVIII:2 and paragraph 6 of the Understanding, there is no requirement to 
make allowance for each and every measure that may have had the effect of restricting the 
importation of the products concerned under that concession, but only for those measures that 
constitute "discriminatory quantitative restrictions ".416  
7.264.   Based on the foregoing,  we reject China 's claims that the European Union acted 
inconsistently with Article XXVIII:2 read in conjunction with paragraph 6 of the Understanding by 
calculating "future trade prospects " and the total amount of the TRQs, on the b asis of actual 
imports of the products concerned into the European Union over the periods selected by the 
                                               
415 EU's comments on China's response to Panel question No. 71(a), para. 14.  
416 EU's first written submission, para. 160.  WT/DS492/R  
 
- 102 - 
 
  European Union, rather than on an estimate of what those import levels would have been in the 
absence of the SPS measures.  
7.5.3.2.2   Whether the European Union was obliged to calculate the total amount of the 
TRQs on the basis of import levels over the three years preceding the conclusion of the 
Article XXVIII negotiations  
7.265.   We now turn to the second ground of China 's claim that  the total amount of the TRQs is 
inconsistent with Article XXVIII:2 read in conjunction with paragraph 6 of the Understanding.   
7.266.   China claims that based on the more recent representative period 2009 –2011 for the 
Second Modification Package, the total amount of the TRQs determined by the Europ ean Union 
falls short of the total amount that China calculated, pursuant to paragraph 6 of the 
Understanding, for tariff lines 1602 32 11, 1602 32 30, 1602 32 90 and 1602 39 29.417 China 
stresses that, according to paragraph 6 of the Understanding, compensa tion should be based on 
trade data for the "most recent representative three -year period " or for the "most recent year ".418 
According to China, these terms must be understood to mean the most recent year, or three -year 
period, before the conclusion of the ne gotiations on compensation.419 As noted above, China 
considers that the Article XXVIII negotiations under the Second Modification Package concluded in 
December 2012, and therefore the three preceding years are 2009 -2011.  
7.267.   It is not in dispute that under para graph 6 of the Understanding, the compensation should 
be based on trade data for the "most recent " representative three -year period or for the "most 
recent " year. The legal issue raised by China 's claim is whether these terms should be interpreted 
to mean the most recent period or year preceding the conclusion of the negotiations, as China 
contends, or rather the most recent period or year preceding the initiation of the negotiations, as 
the European Union contends.  
7.268.   Before commencing with our analysis of t his issue, we recall that we have already found, 
in the context of our examination of China 's claims under Article XXVIII:1, that the European 
Union was free to determine which Members held a principal and substantial supplying interest on 
the basis of act ual imports into the European Union over the three -year period preceding the 
European Union 's notification of its intention to modify concessions under Article XXVIII. The 
European Union was under no obligation to re -determine that issue to take into accou nt changes in 
import shares over the period 2009 -2011.420 In the course of analysing that issue, we addressed a 
number of arguments that are specific to the legal standards that apply to the determination of 
which Members hold a principal or substantial supp lying interest under Article XXVIII:1. However, 
some of the arguments that we addressed have been reiterated by the parties in their 
argumentation under Article XXVIII:2 and paragraph 6 of the Understanding. To avoid addressing 
the same arguments multiple times, our analysis of China 's parallel claim under Article XXVIII:2 
and paragraph 6 of the Understanding will focus on those arguments and interpretative elements 
that are specific to paragraph 6 of the Understanding and Article XXVIII:2, and that we have  not 
already addressed in the context of our findings under Article XXVIII:1.421  
7.269.   Paragraph 6 of the Understanding states that the amount of the compensation and future 
trade prospects must be based on the "most recent " three-year period or year, but is sile nt on 
whether this refers to the most recent period or year preceding the initiation of negotiations under 
Article XXVIII, the most recent period or year preceding the conclusion of negotiations under 
Article XXVIII, or the most recent period or year prece ding some other point in time.422 Thus, we 
                                               
417 China's response to Panel quest ion No. 29, paras. 144 -145; China's second written submission, 
para. 106. 
418 China's second written submission, para. 106.  
419 China's first written submission, paras. 86 and 111; China's response to Panel question No. 29, 
para. 149; China's opening statement  at the second meeting of the Panel, para. 48; China's response to Panel 
question No. 107(a), para. 96.  
420 See section  7.4.3.2 above.  
421 We see nothing to be gained, and a potential for confusion, from reproducing the same analysis 
multiple times through the  Report in respect of overlapping arguments.   
422 Paragraph 6 of the Understanding does not contain comparable language to, for example, 
paragraphs 2 and 3 of Annex IV of the Agreement on Subsidies and Countervailing Measures, which refers to 
"the most rece nt 12 -month period … preceding the period in which the subsidy is granted".  WT/DS492/R  
 
- 103 - 
 
  consider that, as a textual matter, the ordinary meaning of the terms "the most recent " three-year 
period or year is inconclusive with regard to the question before us.423  
7.270.   Turning to the context of paragraph 6 of the  Understanding, both parties submit that their 
opposing interpretations are supported by paragraph 6 of the Ad Note to Article XXVIII:1. 
Paragraph 6 of the Ad Note reads as follows:  
It is not intended that provision for participation in the negotiations of  any Member 
with a principal supplying interest, and for consultation with any Member having 
substantial interest in the concession which the applicant is seeking to modify or 
withdraw should have the effect that it should have to pay compensation or suffe r 
retaliation greater than the withdrawal or modification sought, judged in the light of 
the conditions at the time of the proposed withdrawal or modification, making 
allowance for any discriminatory quantitative restriction maintained by the applicant 
Member. (emphasis added)  
7.271.   According to the European Union, this paragraph "makes it clear that the adequacy of 
compensation must be judged in the light of the conditions prevailing at the moment where the 
modification of the schedule is proposed, rather than a t the time where the modification is 
eventually agreed ", and submits that this is confirmed by the wording of the French and Spanish 
versions  of paragraph 6 .424 China disagrees with the European Union 's reading of paragraph 6 of 
the Ad Note, and instead cons iders that t he moment of the "proposed withdrawal or modification " 
is not the moment of the notification of the mere intention to withdraw or modify concessions, but 
rather the moment at which the details of the withdrawal or modification are agreed immedi ately 
preceding their implementation.425 In our view, the parties ' arguments show that the ordinary 
meaning of the wording of paragraph 6 of the Ad Note is capable of accommodating both of those 
interpretations. Accordingly, while we agree that this provisio n is relevant context, we consider 
that it is of limited assistance in resolving the interpretative issue before us.  
7.272.   However, we do not consider that China 's interpretation of paragraph 6 of the 
Understanding can be reconciled with the object and purpose of this provision and Article XXVIII:2. 
In particular, paragraph 6 of the Understanding seeks to facilitate the negotiations under 
Article  XXVIII:2 by providing a benchmark that the negotiating Members can use as a basis for the 
calculation of compensation  in the case of TRQs. We do not agree with the European Union that 
the benchmark must necessarily be "known in advance of the negotiations " and "fixed", insofar as 
this would suggest that the Members concerned could not agree, as part of the ir negotiations , to 
use a different period.426 However, we consider that, in order to achieve the purpose of facilitating 
the negotiations under Article XXVIII:2 by providing a benchmark that the negotiating Members 
can use as a basis for the calculation of compensation, i t cannot be the case that the Members 
engaged in the negotiations would be legally obliged to change the benchmark defined in that 
provision from year to year until the negotiations have been concluded. We note that to adjust the 
benchmark year -to-year wou ld not be complicated as such, insofar as it would be the result of a 
simple mathematical formula applied to import statistics. The difficulty that would arise is that the 
                                               
423 We note that the immediate context of these terms is also inconclusive, insofar as the content of the 
three formulae set forth in paragraph 6(a) and (b) are neutral as to whether  the calculation called for is to be 
based on the most recent period or year preceding the initiation of negotiations under Article XXVIII, or the 
most recent period or year preceding the conclusion of negotiations under Article XXVIII.  
424 EU's first writte n submission, paras. 159, 177. The French and Spanish versions refer, respectively, 
to "les conditions du commerce au moment où sont projetés le retrait ou la modification " and " las condiciones 
del comercio en el momento en que se proyecte dicho retiro o m odificación ". 
425 China's opening statement at the first meeting, para. 69; China's second written submission, 
para. 104. 
426 EU's first written submission, para. 179. As China observes, in the First Modification Package (tariff 
line 0210 99 39), the European Union modified the reference period that covered initially 2003 -2005 to the 
period of 2000 -2002 due to changes to the European Union customs classification regulations adopted in 2002, 
and that for another line of the First Modification Package (tariff lin e 1602 32 19), the European Union 
admitted that it agreed, "upon the insistence of Thailand", not to base the calculation of the compensation on 
the most recent calendar year  preceding the initiation of the negotiations , i.e. 2005, but to base it on a more  
recent twelve -month period  preceding the initiation of negotiations , i.e. July 2005 to June 2006. This does not, 
in our view, lend support to the conclusion that "the most recent " period or year can be interpreted to mean 
"the most recent " period or year preceding the conclusion of the negotiations . However, it does show that the 
period or year used to calculate the compensation need not necessar ily "be known in advance of the 
negotiations" and "fixed".  WT/DS492/R  
 
- 104 - 
 
  benchmark is meant to serve as the basis for negotiations and the calculation of com pensation. To 
require the negotiating Members to use of a continually moving benchmark as the basis for 
negotiations could perpetuate negotiations indefinitely.  
7.273.   We consider that Article XXVIII:2 is relevant context for the interpretation of paragraph 6 
of the Understanding, given the close relationship between these two provisions. Therefore, we 
have also considered whether a requirement to base the calculation of the total amount of a TRQ 
on the most recent three -year period preceding the conclusion of the  negotiations would serve the 
objective, reflected in Article XXVIII:2, of the Members concerned to "endeavour to maintain a 
general level of reciprocal and mutually advantageous concessions not less favourable to trade " 
than that provided for prior to the  modification. For the reasons that follow, we are not persuaded 
that it would necessary serve this objective.  
7.274.   First, as the European Union has pointed out, there is no reason why the import volumes 
following the initiation of negotiations should necessar ily be higher than the pre -initiation import 
volumes. For example, a ccording to China 's data and calculations, the amount of the TRQs for two 
of the tariff items included in the Second Modification Package (1602 39 21 and 1602 39 80) is 
lower if the formul ae of paragraph 6 of the Understanding are applied on the basis of import data 
for the period 2009 -2011, instead of import data for the reference period 2006 -2008.427 
Furthermore , we consider that  a "moving " benchmark would have the potential to create an 
incentive for the parties to delay the conclusion of negotiations while waiting for more favourable 
trade data to emerge.428  
7.275.   Second, we note that the benchmark in paragraph 6 of the Understanding establishes the 
basis for calculating the minimum  amount of com pensation that must be provided. In this regard, 
paragraph 6 states that the calculation of future trade prospects must be "based on the greater " of 
the three formulae contained in subparagraphs (a) and (b). Because paragraph  6 establishes the 
formulae for  defining the minimum amount of the TRQ, we consider that it is not necessary to 
interpret the terms the "most recent " three-year period in paragraph 6 of the Understanding to 
mean the most recent period preceding the conclusion of the negotiations in orde r to provide for 
the possibility that the amount of the TRQs is adjusted to reflect an y increase in imports that may 
take place in the course of the negotiations. It is always open for the Members involved in 
negotiations under Article XXVIII to agree on c ompensation that exceeds the minimum amount 
required.  
7.276.   Finally, with regard to prior practice, the Panel has asked the parties whether, in prior 
cases where the negotiations under Article XXVIII took several years, it is possible to discern 
whether the Mem bers concerned determined the level of compensation under Article XXVIII:2 on 
the basis of import data that became available during the negotiations. China responds that it "has 
no information to discern whether an updating of data [was] done ".429  
7.277.   Based on the foregoing, we conclude that  the European Union was not obliged to calculate 
the total amount of the TRQs on the basis of import levels over the three years preceding the 
conclusion of the Article XXVIII negotiations. Accordingly, we reject China 's clai ms that the 
European Union acted inconsistently with Article XXVIII:2 read in conjunction with paragraph 6 of 
the Understanding by calculating "future trade prospects " and the total amount of the TRQs on the 
basis of imports of the products concerned into the European Union over the period 2006 -2008 in 
the context of the Second Modification Package, and not on the basis of imports over the 2009 -
2011 period.  
7.5.3.2.3   Whether the European Union was required to account for poultry imports into 
Romania, Bulgaria and Cr oatia in the years before they acceded to the European Union  
7.278.   China submits that even using the reference periods selected by the European Union, i.e. 
2006-2008, the total amount of one of the TRQs in the First Modification Package (tariff line 1602 
                                               
427 EU's second written submission, para. 76.  
428 EU's fi rst written submission, para. 180.  
429 China's response to Panel question No. 111, para. 104.  WT/DS492/R  
 
- 105 - 
 
  31) fal ls below the minimum amount required by paragraph 6 of the Understanding when EU28 
data is used.430 
7.279.   We recall that the total amount of the TRQ for tariff line 1602 31 was determined in the 
context of the First Modification Package. The negotiations in the Fi rst Modification Package took 
place in 2006. Romania and Bulgaria did not accede to the European Union until 1 January 2007. 
Croatia acceded to the European Union on 1 January 2013. The European Union confirms that it 
did not account for imports into these  countries when determining the total amount of the TRQs.  
7.280.   China argues that the European Union was required to do so. Firstly, as regards Romania 
and Bulgaria, China submits that when the First Modification Package was negotiated in 2006, the 
European Uni on knew that the two countries would be joining the European Union in 2007.431 
Secondly, as regards Croatia, China agrees that, "technically the EU was not required to take into 
account Croatia 's imports when the First Modification Package was negotiated and  reached in 
2006, as there was uncertainty as to whether and when Croatia would become a member "; 
however, China nonetheless submits "for the purpose of this dispute settlement, the Panel should 
use the import data that includes those of Croatia, as the EU  is obliged to increase the Union 
concession level when Croatia became a member, in exchange for Croatia 's withdrawal of its own 
concession ".432  
7.281.   China observes, however, that "whether or not to include import data for these three 
countries will have a negli gible impact on the present dispute ".433 In this regard, China explains 
that throughout the period 2000 -2012, Croatia imported only 6.8 tonnes under tariff line 1602 31, 
and all of these imports took place in 2012. By way of comparison, China notes that the 
corresponding EU28 imports under 1602 31 in 2012 alone were 77,659 tonnes. For Romania and 
Bulgaria, China explains that for tariff line 1602 31, total imports of 25.4 metric tonnes were 
recorded for Romania in 2003 and 8.3 metric tonnes for Bulgaria in 20 05. By way of comparison, 
China notes that the corresponding EU28 imports under tariff line 1602 31 were 63,883 tonnes in 
2003, and 94,500 tonnes in 2005.434 
7.282.   The European Union submits that it was under no obligation to account for imports into 
these countri es in the years preceding their accession to the European Union, and that to the 
extent that the accession of those countries to the European Union resulted in an increase of the 
applicable duty rates, the European Union would have been required to provide  compensation in 
accordance with Article XXIV:6 of the GATT 1994.435 In addition, the European Union notes that 
the difference arising from using import data including imports into these three countries only 
leads to a minimal difference. Specifically, the E uropean Union observes that the total amount of 
the TRQ agreed by the European Union for tariff line 1602 31 covers 103,896 tonnes. According to 
China 's alternative calculation in Exhibit CHN -49, the compensation required pursuant to 
paragraph 6 of the Und erstanding including imports into these countries would amount to 103,953 
tonnes, i.e. a difference of just 57 tonnes per year.436  
7.283.   We are not persuaded that the European Union was obliged to account for imports into 
Romania, Bulgaria, or Croatia when determ ining in the total amount of the TRQ for tariff line 1602 
31 in the context of the First Modification Package. As noted above, Romania and Bulgaria did not 
accede to the European Union until 2007, and Croatia did not accede until 2013. However, the 
initiat ion and conclusion of the Article XXVIII negotiations under the First Modification Package 
occurred in 2006.437 Furthermore, the total amount of the TRQ for tariff line 1602 31 was 
determined on the basis of imports over the period 2003 -2005.438  
7.284.   In addition, China acknowledges that including the import data for these three countries 
would have a negligible impact  on the total amount of the TRQ . We note that insofar as the 
                                               
430 China's response to Panel question No. 29, paras. 144 -145; China's second written submission, 
para. 106. 
431 China's response to Panel question No. 71(b), para. 24.  
432 China's response to Panel question No. 71(b), para. 25.  
433 China's response to Panel question No. 71(b), para. 26.  
434 China's response to Panel question No. 71(b), para. 26.  
435 EU's second written submission, paras. 81 -82. 
436 EU's second written submission,  para. 80.  
437 See paragraphs  7.50 to 7.54. 
438 See paragraph  7.57. WT/DS492/R  
 
- 106 - 
 
  information contained in Exhibit CHN -49 is accurate439, it would follow that the total amou nt of the 
TRQ for 1602 31 is 0.05% less than required by Article XXVIII:2 and paragraph 6 of the 
Understanding. However, we understand China to accept that the meaning of Article XXVIII:2 and 
paragraph 6 of the Understanding is that "it may be difficult to  have a compensation that is 
mathematically the exact counterfactual of the concession being withdrawn ", and that what is 
required is that Members "do all in their power to reach that goal ".440 
7.285.   In addition, we note the argument by the European Union that to the extent that the 
accession of those countries to the European Union resulted in an increase of the applicable duty 
rates, the European Union would have been required to provide compensation in accordance with 
Article XXIV:6 of the GATT 1994.  
7.286.   Based on th e foregoing, we are not persuaded that the European Union acted 
inconsistently with Article XXVIII:2 read in conjunction with paragraph 6 of the Understanding by 
calculating "future trade prospects " and the total amount of the TRQs on the basis of import 
statistics that exclude imports into Romania, Bulgaria and Croatia which took place in the years 
before they acceded to the European Union.   
7.5.3.3   Whether the allocation of the TRQs is inconsistent with Article XXVIII:2 read in 
conjunction with paragraph 6 of th e Understanding  
7.287.   Having addressed China's claims regarding the total amount of the TRQs, w e now turn to 
China 's claims that the allocation of the TRQs among supplying countries is inconsistent with 
Article  XXVIII:2 and paragraph 6 of the Understanding.  
7.288.   China argues that if a TRQ resulting from Article XXVIII negotiations is allocated among 
supplying countries, the provisions of Article XXVIII:2 and paragraph 6 of the Understanding apply 
at the level of the individual shares allocated. China submits that t he allocation of all or the vast 
majority of the TRQs to Brazil and Thailand, with a relatively small "all others " share and no 
country -specific share allocated to China, does not reflect China 's future trade prospects. In this 
connection, China argues that there are several different violations of paragraph 6. First, China 
submits that by using reference periods during which Chinese poultry products were subject to 
SPS measures, the TRQ allocation is not based on a "representative " period within the meaning of 
paragraph 6. Second, China submits that by basing the TRQ allocation for the Second Modification 
Package on the 2006 -2008 period, the TRQ allocations are not based on "the most recent three -
year period " within the meaning of paragraph 6. Third, China ar gues that the "all others " share for 
one of the TRQs (tariff line 1602 30 80) is less than that required if EU28 data is used.441 Fourth, 
China contends that the absence of any "all others " share for one of the TRQs (tariff line 
1602 39 21) violates paragrap h 6.442 
7.289.   The European Union submits that Article XXVIII:2 and paragraph 6 regulate the overall 
value for all Members of the compensation provided, and apply only at the level of the total 
amount of each TRQ. The European Union submits that Article XXVIII and paragraph 6 of the 
Understanding do not address or apply to the allocation of TRQs among supplying countries, which  
is specifically and exhaustively addressed by Article XIII of the GATT. Without prejudice to this 
position, the European Union submits that China has in any event failed to demonstrate that any 
of the TRQ allocations are inconsistent with the requirements of paragraph 6.   
7.290.   The threshold legal issue raised by China 's claims is whether Article XXVIII:2 and 
paragraph  6 of the Understanding apply to the allocation of TRQ shares among supplying 
countries, as China contends, or merely apply to the total amount of the TRQs, as the European 
Union contends.  
                                               
439 It is not entirely clear how these figures relate to the figures that China presents in its response to  
Panel question No. 71(b), para. 26.  
440 China's second written submission, para. 101.  
441 China's response to Panel question No. 29(a), paras. 144 -145.   
442 China's response to Panel question No. 29(a), paras. 144 -145. China accepts that there were no 
imports from countries falling under the category of "all others", and that a "technical application of the 
formulas of Paragraph 6 of the Understanding thus results in zeros, as indicated in Exhibit CHN -49".  However, 
China explains that "even when there were act ually no imports during the reference period, the EU is required 
to create a TRQ that is larger than the trade actually affected, namely larger than zero imports".  China's 
response to Panel question No. 71(c), paras. 27 -28. WT/DS492/R  
 
- 107 - 
 
  7.291.   Beginning with the text of paragraph 6 of the Understanding, we note that it contains no 
referen ce to the shares of a TRQ allocated to certain supplying countries or group of countries. 
Rather, paragraph 6  refers in the singular to "a tariff rate quota " in its first sentence, and to "the 
quota " in its second sentence. When read as a whole, paragraph 6 establishes the basis for 
calculating the total amount of the TRQ. However, China submits that where "a global TRQ " is 
broken down into what China terms "country -specific TRQs " and what China terms "an 'all others ' 
TRQ", it follows that the provisions of  paragraph 6 of the Understanding must be applied "at the 
level of each TRQ ", as well as at the level of "the global TRQ ".443 Thus, China refers to each of the 
shares  of a TRQ as a "TRQ" on its own, and refers to each of the TRQs as a "global TRQ ". 
Proceedin g on the basis of this terminology, China argues that the use of the singular in relation "a 
tariff rate quota " and "the quota " actually signifies that the calculations provided for in paragraph 
6 should be applied for each of the TRQ shares allocated amon g supplying countries. In China's 
view, " it would not make any sense to fix a global TRQ taking into account overall future prospects 
without taking into account future trade prospects at the level of the separate TRQs in which the 
global TRQ is broken dow n", and that to do otherwise "would result in over -compensation for some 
and under -compensation for others, thereby creating discrimination".444 
7.292.   We are not persuaded by China 's interpretation of paragraph 6 of the Understanding. 
Beginning with the ordinary m eaning of the terms used, it is evident that the term "tariff quota " is 
not the same as a "share " of an allocated tariff quota. China rightly notes that paragraph 6 does 
not refer to the "total amount of compensation ".445 However, in our view this does not h ave the 
implications drawn by China. As discussed above, paragraph 6 refers to "a tariff rate quota " and 
"the quota ", but not to the shares of TRQ allocated among supplying countries. In the absence of 
any juxtaposition of these different terms in the text  of paragraph 6, there would be no need, in 
the text of paragraph 6, to include such qualifiers as the "global " or the "total" quota, or level of 
compensation.   
7.293.   Turning to the context of paragraph 6 of the Understanding, we consider that paragraph 6 
can b e presumed to use the term "tariff quota " with the same meaning as that term is elsewhere 
used in the GATT 1994. That includes Article XIII:5 of the GATT 1994, which states that the 
provisions of Article XIII apply "to any tariff rate quota " instituted or maintained by a Member. We 
consider that the term "tariff rate quota " cannot, in the context of Article XIII, be used 
interchangeably with the concept of a "share " of an allocated tariff quota. Article XIII:2(d) 
distinguishes "a quota " which is allocated a mong supplying countries from the "shares in the 
quota " that has been allocated. We note that interpreting the two terms interchangeably in the 
context of Article XIII:2(d) would lead to the absurd result that any share of a TRQ allocated to 
one country wo uld then have to be allocated among different supplying countries.   
7.294.   We consider that Article XXVIII:2 is relevant context for the interpretation of paragraph 6 
of the Understanding, given the close relationship between these two provisions. Therefore, we 
next consider whether the text of Article XXVIII:2 supports the conclusion that if a withdrawing 
Member allocates a tariff rate quota during Article XXVIII negotiations, "compliance with 
Article  XXVIII:2 requires a comparison at the level of the WTO Member s to which the quota was 
allocated rather than at the global level only ".446 For the reasons that follow, we do not consider 
that Article XXVIII:2 supports that conclusion .  
7.295.   Article XXVIII:2 states that the Member concerned must endeavour to maintain a "general 
level" of reciprocal and mutually advantageous concessions not less favourable to trade than that 
provided for prior to the modification. In calling for an examination of whether the "general level " 
of concessions has been maintained, the text of Artic le XXVIII:2 suggests that the overall value of 
the compensation for all Members should be equivalent to the overall value for all Members of the 
modified concession. This is reinforced by the focus being on whether the compensation maintains 
a "general lev el" of concessions not less favourable to "trade", without any further precision.  
7.296.   China recognizes that the use of the word "general " implies that "what must be done is to 
aggregate the level of concessions of each WTO Member ".447 However, China points out that the 
                                               
443 China's first written submiss ion, para. 137.  
444 China's first written submission, para. 138; China's second written submission, para. 110.  
445 China's response to Panel's question No 2 9, para. 14 1. 
446 China's opening statement at the first meeting of the Panel, para. 64.  
447 China's comment s on the EU's response to Panel question No. 67, para. 7.  WT/DS492/R  
 
- 108 - 
 
  text of Article XXVIII:2 does not simply state that the Member concerned should endeavour to 
maintain the "general level " of tariff concessions, but refers rather to a general level of "reciprocal 
and mutually advantageous " concessions not less fa vourable to trade than that provided for in this 
Agreement prior to such negotiations.448   
7.297.   We consider that China 's argument seeks to read too much into the term "reciprocal " in 
Article XXVIII:2. The ordinary meaning of the term "reciprocal " is "[o]f the na ture of a return 
made for something; given, felt, shown, etc., in return ", and "[e]xisting on both sides; mutual; (of 
two or more things) done, made, etc., in exchange ".449 Other provisions of the GATT 1994 refer to 
"reciprocal and mutually advantageous " concessions and arrangements.  Notably, the preamble to 
both the GATT 1994 and the WTO Agreement recognize the objective of entering into "reciprocal 
and mutually advantageous arrangements " directed to the substantial reduction of tariffs and 
other barriers to  trade and to the elimination of discriminatory treatment in international trade 
relations.450 It seems to us that they basically convey the notion of balanced  concession s and 
arrangements. As the Panel in EC – Chicken Cuts  observed:  
Taken together, the rel evant aspects of the WTO Agreement and the GATT 1994 
indicate that concessions made by WTO Members should be interpreted so as to 
further the general objective of the expansion of trade in goods and the substantial 
reduction of tariffs. It is also clear th at such an interpretation is limited by the 
condition that arrangements entered into by Members be reciprocal and mutually 
advantageous.  In other words, the terms of a concession should not be interpreted in 
such a way that would disrupt the balance of co ncessions negotiated by the parties.451  
7.298.   In the context of Article XXVIII:2, the use of the term "reciprocal " does not shed any light 
on whether : (i) the value of the compensation resulting from the negotiations , for each single 
Member , must be equivalent to  the value , for that Member , of the concession prior to its 
modification or withdrawal, or rather (ii) the value of the overall compensation resulting from the 
negotiations , for all other Members , must be equivalent to the overall value , for all other Memb ers, 
of the concession as it existed prior to its modification or withdrawal. The term "reciprocal " can be 
just as easily understood as referring to the relationship between the Member modifying the 
concession, on the one side, and all other Members, on th e other side, rather than to each of the 
multiple relationships between the Member modifying the concession and every other Member.  
7.299.   Continuing with our textual analysis, both parties agree that Article XIII:2 refers 
specifically to the allocation of TRQs.452 In our view, Article XIII:2 is therefore also relevant 
context for the purpose of the interpretation of Article XXVIII:2 and paragraph 6 of the 
Understanding. Specifically, if the allocation of TRQ shares among supplying countries is not 
regulated by Arti cle XXVIII:2 and paragraph 6 of the Understanding, it does not follow that the 
allocation of TRQ shares among supplying countries is unregulated, or "would result in over -
compensation for some and under -compensation for others, thereby creating discriminat ion".453 
Rather, it would mean that the allocation of TRQs shares among supplying countries is regulated 
only by the relevant obligations in Article XIII. I nterpreting Article XXVIII:2 and paragraph 6 of the 
Understanding  as also regulating the allocation of  TRQs among supplying countries would thus 
mean that there are two sets of requirements in the GATT 1994 regulating the allocation of TRQ 
shares among supplying countries. To the extent that the requirements of paragraph 6 of the 
Understanding would be int erpreted differently from the TRQ allocation requirements found in 
Article XIII:2, this would mean that there are different and potentially conflicting requirements  
regulating the allocation of TRQ shares among supplying countries .  
7.300.   According to China, par agraph 6 of the Understanding applies "at the level of the share 
allocation of each tariff rate quota as well as at the level of the global tariff rate quota ".454 
However, we recall that paragraph 6 contains three different formula e for calculating future tr ade 
                                               
448 China's opening statement at the first meeting of the Panel, para. 64.  
449 Shorter Oxford English Dictionary , 5th ed, W.R. Trumble, A. Stevenson (eds.) (Oxford University 
Press, 2002), Vol. 2, p. 24 87. 
450 We also note that Article XVII:3 of the GATT 1994 and Article XXVIII bis both refer to negotiations on 
a "reciprocal and mutually advantageous basis" to reduce obstacles to trade.    
451 See Panel Reports, EC – Chicken Cuts , para. 7.320.  
452 See e.g. Chin a's response to Panel question No. 29(b), para. 147.  
453 China's first written submission, para. 138; China's second written submission, para. 110.  
454 China's response to Panel question No. 29, para. 143.  WT/DS492/R  
 
- 109 - 
 
  prospects, and the importing Member is required to select the formula that yields the greatest 
amount. Therefore, if paragraph 6 of the Understanding applies at the level of the share allocation , 
the importing Member would have to apply different formu lae to different Members  insofar as that 
would yield a greater amount in any case . Based on the text of paragraph 6 of the Understanding, 
we consider that the application of the formulae set forth in paragraph 6(a) and 6(b) at the level of 
TRQ allocation w ould not only lead to results that conflict with the allocation rules set forth in 
Article XIII:2, but which would also be unworkable.    
7.301.   Before concluding, we recall that China stresses that "[t]o be clear, China is not suggesting 
that a Member is require d to allocate among supplying countries the compensation provided in the 
form of TRQs under Article XXVIII:2 and paragraph 6 of the Understanding ". Rather, China clarifies 
that "in cases where the Member chooses to allocate or break down the total compensa tion among 
supplying countries and records the shares of the compensation of various supplying countries as 
part of its modification of the concessions, the compensation is provided not only at the global 
level, but also at the level of each supplying coun try or group of countries ".455 However, we do not 
understand the basis for the distinction that China draws between how Article XXVIII:2 would 
apply to assessing the adequacy of the value of compensation in the form of a TRQ that is not 
allocated among suppl ying countries , and how Article XXVIII:2 would apply to assessing the 
adequacy of the value of compensation in the form of a TRQ allocated among supplying countries. 
If Article XXVIII:2 is interpreted to require that the value of the compensation resulting  from the 
negotiations for each single Member be equivalent to the value for that Member of the concession 
prior to its modification or withdrawal, then that general principle would apply irrespective of the 
form of the compensation. A global TRQ that is n ot allocated among supplying countries would 
therefore be subject to that same principle. In this regard, we do not consider  that, in a situation 
where a Member replaces an unlimited tariff concession with a TRQ that is not allocated among 
supplying countr ies, the value of that compensation for each single Member would necessarily be 
equivalent to the value, for that Member, of the concession prior to its modification or withdrawal.   
7.302.   Based on the foregoing, we conclude that Article XXVIII:2 and paragraph 6 of the 
Understanding do not apply to the allocation of TRQ shares among supplying countries. Therefore 
it is not necessary to consider China 's claims relating to the allocation of TRQ shares further. In 
any event, we note that China 's claims of violation r elating to the allocation of the TRQs are to 
some extent based on the same grounds as its claims relating to the total amount of the TRQs. 
Accordingly, we reject China 's claims that the European Union acted inconsistently with Article 
XXVIII:2 read in conj unction with paragraph 6 of the Understanding by allocating the TRQs among 
supplying countries in a manner that does not reflect China 's "future trade prospects ".  
7.5.4   Conclusion  
7.303.   The Panel finds that China has failed to demonstrate that the tariff rates and th e TRQs 
negotiated and implemented by the European Union are inconsistent with Article XXVIII:2, read in 
conjunction with paragraph 6 of the Understanding on the Interpretation of Article XXVIII of the 
GATT 1994, by failing to maintain a general level of re ciprocal and mutually advantageous 
concessions not less favourable to trade than that existing prior to the modification.  
7.6  Claims under Article XIII:2(d) of the GATT 1994  
7.6.1   Introduction  
7.304.   China claims that by allocating "all or the vast majority of the TRQs to  two of the WTO 
Members " (i.e. Brazil and Thailand), the European Union acted inconsistently with Article XIII:2(d) 
of the GATT 1994.456 According to China, it had a "substantial interest in supplying the product 
concerned ", and the European Union therefore violated Article XIII:2(d) because it failed to seek 
agreement with all WTO Members having a substantial interest in supplying the product 
concerned, and did not allocate to all such Members shares based upon the proportions supplied 
                                               
455 China's opening statement at the second meeting of t he Panel, para. 42.  
456 China's first written submission, paras. 223 -252; China's opening statement at the first meeting of 
the Panel, paras. 109 -112; China's responses to Panel question Nos. 41 -42; China's second written 
submission, paras. 172 -175; China's opening statement at the second meeting of the Panel, paras. 76 -81; 
parties' responses, and comments on one another's responses, to Panel question Nos. 69, 72 -74, 106 -109, 
111-120. WT/DS492/R  
 
- 110 - 
 
  by them during a previ ous representative period, due account being taken of any special factors 
which affected the trade in the product.  
7.305.   China argues that all of the determinations under Article XIII:2 must be based on a 
"previous representative period ", taking due account of "special factors which may have affected 
or may be affecting the trade in the product ", including not only the allocation of TRQ shares vis -à-
vis substantial suppliers under Article XIII:2(d) in accordance with the second sentence of 
Article  XIII:2(d), but also the initial, threshold determination of which Members have a "substantial  
interest " in supplying the products concerned under Article XIII:2(d). In this case, China argues 
that the reference periods upon which the European Union made those determinati ons were not 
"representative ", and that China 's reduced ability to export as a result of import bans due to SPS 
measures, as well as its increased ability to export after the relaxation of the SPS measures in July 
2008, were "special factors " that had to b e taken into account. With respect to both the First and 
Second Modification Package s, China claims that the European Union should have determined that 
China was a substantial supplier and sought an agreement with China on the TRQ share allocations 
based o n an estimate of the share of imports that China would have had in the absence of the SPS 
measures that restricted Chinese poultry imports over the reference periods used. With respect to 
the Second Modification Package, China additionally claims that the European Union was obligated 
to seek an agreement with China on the TRQ share allocations taking into account the increase in 
poultry imports from China over the 2009 -2011 period, which China considers to be the most 
recent three -year period preceding the determination of the TRQs.  
7.306.   The European Union responds that China 's claims rest on an incorrect interpretation of 
Article XIII:2(d).457 Regarding the determination of which Members are substantial suppliers for 
the purpose of Article XIII:2(d), the European  Union submits that there is no reason for 
interpreting the term "substantial interest " differently in the context of Article XXVIII:1 and 
Article  XIII:2, especially in cases where the negotiations on the total amount of the TRQs pursuant 
to Article XXVIII  take place concurrently with the negotiations on the allocation of those same 
TRQs pursuant to Article XIII:2(d). In addition to questioning whether consideration of "special 
factors " is required when determining which Members are substantial suppliers un der Article 
XIII:2(d), the European Union considers that the SPS measures mentioned by China are not 
"special factors " within the meaning of Article XIII:2(d), and that the European Union was 
therefore under no obligation to determine which Members held a substantial supplying interest on 
the basis of an estimate of what China 's share of imports into the European Union would have 
been in the absence of the SPS measures. The European Union also rejects China 's claim that, in 
respect of the Second Modificatio n Package, it was required to determine which Members held a 
substantial supplying interest based on more recent data regarding imports over the period 2009 -
2011.  
7.6.2   Relevant provisions  
7.307.   China advances separate claims of violation under the chapeau of Articl e XIII:2, and under 
Article XIII:2(d). The chapeau of Article XIII:2 provides that:  
In applying import restrictions to any product, Members shall aim at a distribution of 
trade in such product approaching as closely as possible the shares which the various  
Members might be expected to obtain in the absence of such restrictions and to this 
end shall observe the following provisions…  
7.308.   The provisions that follow include paragraphs (a) through (d) of Article XIII:2. Of 
relevance to the present case is paragraph (d), which clarifies how the chapeau of Article XIII:2 is 
to be complied with as regards WTO Members that hold a "substantial interest " in supplying the 
product concerned . Article  XIII:2(d) states:  
In cases in which a quota is allocated among supplying cou ntries the Member applying 
the restrictions may seek agreement with respect to the allocation of shares in the 
quota with all other Members having a substantial interest  in supplying the product 
                                               
457 EU's first written submission, paras. 278 -287; EU's opening statement at the first meeting of the 
Panel, paras. 20 -25; EU's responses to Panel question Nos. 39, 42; EU's second written submission, paras. 
163-176; EU's opening statement at the second meeting of the Panel, paras. 97 -99; parties' responses, and 
comments on one ano ther's responses, to Panel question Nos. 69, 72 -74, 106 -109, 111 -120. WT/DS492/R  
 
- 111 - 
 
  concerned.  In cases in which this method is not reasonably p racticable, the Member 
concerned shall allot to Members having a substantial interest in supplying the product 
shares based upon the proportions, supplied by such Members during a previous 
representative period , of the total quantity or value of imports of  the product, due 
account being taken of any special factors which may have affected or may be 
affecting the trade in the product . No conditions or formalities shall be imposed which 
would prevent any Member from utilizing fully the share of any such total  quantity or 
value which has been allotted to it, subject to importation being made within any 
prescribed period to which the quota may relate. (emphasis added)  
7.309.   In EC – Bananas III (Art. 21.5 – Ecuador II)  / EC – Bananas III (Art. 21.5 – US), the 
Appellate  Body clarified that Article XIII:2(d) is a permissive "safe harbour " insofar as substantial 
suppliers are concerned. However, the Appellate Body explained that even where a TRQ is 
allocated among supplying countries in accordance with Article XIII:2(d), t hat allocation must also 
respect the requirement in the chapeau of Article XIII:2 vis -à-vis non -substantial suppliers  (i.e. 
countries not recognized as having a "substantial interest " in supplying the product concerned ). 
The Appellate Body stated:  
The prov isions of Article  XIII:2(a) -(d) are specific instances of authorized forms of 
allocation when a Member chooses to allocate shares of the tariff quota.  
Article  XIII:2(d) allows for the case where a quota is allocated among supplying 
countries, either by wa y of agreement or, where this is not reasonably practicable, by 
allotment to Members having a substantial interest in supplying the product 
concerned, and in accordance with the proportions supplied by those Members during 
a previous representative period,  taking due account of "special factors ".  In other 
words, Article  XIII:2(d) is a permissive "safe harbour "; compliance with the 
requirements of Article  XIII:2(d) is presumed to lead to a distribution of trade as 
foreseen in the chapeau of Article  XIII:2, as far as substantial suppliers are 
concerned .408   
____________  
408 If a Member allocates quota shares to Members with a substantial interest in 
supplying the product, in accordance with Article XIII:2(d), it must also respect the 
requirement in the chape au of Article XIII:2  — that distribution of trade approach as 
closely as possible the shares that Members may be expected to obtain in the absence 
of the restriction.  This is usually done by allocating a share to a general "others " 
category for all suppli ers other than Members with a substantial interest in supplying 
the product.458 (emphasis added)  
7.310.   The second sentence of Article XIII:2(d) refers to "special factors ".459 An Ad Note that 
applies to both Article XI and XIII of the GATT 1994 states that the term "includes changes in 
relative productive efficiency as between domestic and foreign producers, or as between different 
foreign producers, but not changes artificially brought about by means not permitted under the 
Agreement ".460 Another Ad Note that is speci fic to Article XIII:2(d) clarifies that no mention was 
made of "commercial considerations " as a rule for the allocation of quotas because "it was 
considered that its application by governmental authorities might not always be practicable ", and 
because "in cases where it is practicable, a Member  could apply these considerations in the 
                                               
458 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II)  / EC – Bananas III (Article 21.5 
– US), para. 338 and fn 408.  
459 The term is also found in several other provisions of the covered agreements, including 
Article  XI:2(c) of the GATT 1994 (providing that "the Member shall pay due regard to the proportion prevailing 
during a previous representative period and to any special factors which may have affected or may be affecti ng 
the trade in the product concerned"); Article XII:2(a) and Article XVIII:9 of the GATT 1994 (both providing that 
"[d]ue regard shall be paid in either case to any special factors which may be affecting the reserves of such 
Member"); Article XVI:3 of the  GATT 1994 (referring to "account being taken of the s hares of the Members  in 
such trade in the product during a previous representative period, and any special factors which may have 
affected or may be affecting such trade in the product"). Article 5.2(a)  of the Agreement on Safeguards refers, 
reiterates the relevant portion of the second sentence of Article XIII:2(d), including the reference to "special 
factors".  
460 The Ad Note applies to the term "special factors" in Article XI:2, but applies to Article X III:2(d) and 
Article XIII:4 by virtue of an Ad Note to Article XIII:4 that cross -references the Ad Note to Article XI:2.  WT/DS492/R  
 
- 112 - 
 
  process of seeking agreement, consistently with the general rule laid down in the opening 
sentence of paragraph 2 ".  
7.311.   By its own terms, Article XIII:2(d) provides that a Member seeking to allocate a TRQ 
among supplying countries may seek agreement with respect to the allocation of shares in the 
quota "with all other Members " having a substantial interest in supplying the product concerned.  
In EC – Poultry , the Appellate Body con firmed that for a TRQ allocation to be in conformity with 
the first method set forth in Article XIII:2(d), the Member concerned cannot enter into agreements 
with some substantial suppliers and not others. In that case, the Appellate Body found that:  
To con form to Article XIII:2(d), all other Members having a "substantial interest " in 
supplying the product concerned would have to agree.  That is not the case here.  As 
the European Communities did not seek an agreement with Thailand, the other 
contracting par ty having a substantial interest in the supply of frozen poultry meat to 
the European  Communities at that time, the Oilseeds Agreement cannot be considered 
an agreement within the meaning of Article  XIII:2(d) of the GATT  1994.461  
7.6.3   Analysis by the Panel  
7.312.   Turning to the issues in dispute, w e understand China 's claims under Article XIII:2(d) to 
rest on two different grounds, raising the following issues. First, whether the European Union was 
obliged to determine which Members held a "substantial interest " on the  basis of an estimate of 
what import shares would have been in the absence of the SPS measures. Second, whether the 
European Union was obliged to determine which Members held a substantial supplying interest 
taking into account changes in import shares tha t occurred in the course of the negotiations under 
the Second Modification Package concurrently addressing the total amount of the TRQs and their 
allocation among supplying countries.  
7.6.3.1   Separate analysis of China 's claims under Article XIII:2(d) and the cha peau of 
Article XIII:2  
7.313.   In this case, China has advanced one set of claims of violation under Article XIII:2(d), and 
another set of parallel claims of violation under the chapeau of Article XIII:2. These appear to be 
claims in the alternative, insofar as Ch ina's claims under Article XIII:2(d) are directed at 
establishing that it was a Member with a substantial supplying interest, whereas its claims under 
the chapeau of Article XIII:2  are premised on the assumption that "it was not WTO Member with 
an SSI ".462   
7.314.   The parties have presented their argumentation in respect of these two sets of claims in 
separate sections of their first and second written submissions, notwithstanding that there is a 
substantial degree of overlap between China 's claims and the parties ' arguments under 
Article  XIII:2(d) and the chapeau of Article XIII:2. China has clarified that its claim that the 
European Union was under an obligation to allocate an "all others " share of at least 10% within 
each of the TRQs under the First and Second Mo dification Package s is relevant only to China 's 
claims under the chapeau of Article XIII:2. However, it would appear that China 's other claims 
under the chapeau of Article XIII:2 rest on the same supporting arguments as its claim that it had 
a "substantial  interest " within the meaning of Article XIII:2(d).463 The overlap between China 's 
arguments under these provisions derives from the fact that, in China 's view, there is significant 
overlap between the legal standards that apply under paragraph (d) and the c hapeau of 
Article  XIII:2. In particular, China considers that the European Union was required to determine 
which Members had a "substantial interest " within the meaning of Article XIII:2(d) based on a 
previous "representative " period, taking due account of  "special factors which may have affected 
or may be affecting the trade in the product ", and that the same  legal standards apply in the 
context of the chapeau of Article XIII:2 when determining the amount of the TRQ share to be 
allocated to "all others".    
                                               
461 Appellate Body Report, EC – Poultry , para. 93.  
462 China's second written submission, para. 144.  
463 The Panel asked China to clarify whe ther its China's claim under the chapeau of Article XIII:2 rests 
on the same argument as its claim that it had a "substantial interest" within the meaning of Article XIII:2(d). 
China responded that "[t]he argument in Section IV -B-3-b is the same as that un der Article XIII:2(d)" (China's 
response to Panel question No. 41(b), para. 173).  WT/DS492/R  
 
- 113 - 
 
  7.315.   Notwithstanding the substantial degree of overlap between China 's claims and the parties ' 
arguments under Article XIII:2(d) and the chapeau of Article XIII:2, we shall address these claims 
separately, in the same manner as the parties have in their submis sions.  
7.6.3.2   Relevance of "special factors " to the determination of which Members hold a 
"substantial interest " within the meaning of Article XIII:2(d)  
7.316.   An important interpretative issue that arises in connection with China 's claim under 
Article  XIII:2(d) is wh ether consideration of "special factors " is relevant to the determination of 
which WTO Members hold a substantial interest under Article XIII:2(d).   
7.317.   We recognize that the text of the first sentence of Article XIII:2(d) does not explicitly state 
that "special factors " must be taken into account for that purpose. However, in our view this does 
not imply that "special factors " can be ignored in the context of determining which Members hold a 
substantial supplying interest. If that were the case, then followin g that same logic, the 
determination of which Members hold a substantial supplying interest would also not need to be 
based on a "previous representative period ", because this legal criterion, like "special factors ", is 
only referred to explicitly in the s econd sentence of Article XIII:2(d).  
7.318.   Furthermore, we can see no reason why Article XIII:2(d) would establish a legal obligation 
to take due account of "special factors " only when unilaterally allocating the shares of a TRQ 
among WTO Members having a "substantial interest " in supplying a product, but not in the initial, 
threshold determination of which Members hold a substantial supplying interest under the first 
sentence of Article XIII:2(d). We consider that the explicit reference to a "previous represent ative 
period " and "special factors " in the second sentence of Article XIII:2(d) can be explained by the 
need to "set the minimum standards for the determination of the TRQs if no negotiations are 
held", and that Article XIII:2(d) "assumes that, where there  are negotiations, the negotiating WTO 
Members with [substantial supplying interests] will defend their interests and make certain that 
special factors are taken into account for the determination of the TRQs ".464  
7.319.   In addition, we consider that Article XIII: 4 offers some contextual support for the view that 
consideration of "special factors " is relevant to the determination of which Members hold a 
"substantial interest " for the purpose of the first sentence of Article XIII:2(d). As elaborated later 
in our Rep ort in the course of addressing China 's claim of inconsistency with Article XIII:4, we 
conclude that Article  XIII:4 applies to both the first and second sentences of Article XIII:2(d).465 
The obligation in Article XIII:4 relates to the subsequent "reappraisa l" of the "special factors " 
involved . This implies that consideration of "special factors " cannot be ignored in the initial 
appraisal of which Members hold a "substantial interest " for the purpose of the first sentence of 
Article XIII:2(d).   
7.320.    The European  Union argues that that there is no reason to interpret the notion of a 
"substantial interest " in different ways in Article XXVIII and Article XIII.466 To be clear, we are not 
suggesting that the meaning of the terms "substantial interest " in the context of Article XIII:2(d) 
should be interpreted without regard to the parallel determination that must be made in the 
context of Article XXVIII negotiations. We consider that the need for a harmonious interpretation is 
particularly important taking into account th e existence of situations where, a s in the present case, 
negotiations on the total amount of the TRQs under Article XXVIII occurs simultaneously with 
negotiations on the allocation of the TRQs under Article XIII:2(d).467 Thus, we consider that these 
two prov isions should be interpreted harmoniously.  
                                               
464 China's second written submission, para. 174.  
465 See paragraph 7.464.    
466 EU's first written submission, paras. 279 -283. In its response to Pane l question No. 118(a), the 
European Union agrees that although the first sentence of Article XIII:2(d) does not make any reference to 
"special factors", "a method that disregards special factors affecting any of the suppliers of a given product 
would not b e objective as it would be biased against the suppliers affected by those factors and in favour of the 
others". In its comments on the EU's response to Panel question No. 118(a), China sets forth its understanding 
that "it is not disputed between China and  the EU that special factors should be taken into account in 
determining which Members are "'substantial suppliers"' under the first sentence of Article XIII:2(d)".  
467 At paragraph 33 of its third -party written submission, Canada observes that " [i]f Article  XXVIII is 
being used, it is very likely that allocation under Article XIII will occur coincident with the establishment of a 
TRQ under Article XXVIII."  WT/DS492/R  
 
- 114 - 
 
  7.321.   More specifically, we consider that a determination of which Members hold a principal or 
substantial supplying interest under Article XXVIII based on trade statistics for the last three -year 
period preceding the notification of the intention to modify concessions, in accordance with 
paragraph 4 of the Procedures for Negotiations under Article XXVIII, would generally satisfy the 
requirement, in Article XIII:2(d), that the determination be based on a "previous repre sentative 
period ". Furthermore, there are  the attractions of methodological ease and consistency in using a 
10% import share benchmark as the means of determining "substantial interest " in Article XIII as 
has been done in the context of Article XXVIII.468 In this regard, China stated that it "does not 
consider that it is an ipso facto  violation of Articles XXVIII and XIII for a member to use the 10% 
threshold to determine SSI status ".469 In these and other respects, we consider that the 
determination of which M embers hold a "substantial interest " under Article XIII:2(d) may generally 
rely on the determination that has been made in the context of Article XXVIII.  
7.322.   However, in the context of Article XIII:2, we consider that the determination of which 
Members hold a  "substantial supplying interest " under Article XIII:2(d) must be supplemented by 
the cumulative consideration of whether there are "special factors " within the meaning of 
Article  XIII:2. In our view, this reading seeks a harmonious interpretation and appl ication of 
Article  XIII:2 and Article XXVIII, and at the same time gives due regard to the particular legal 
standards reflected in the text of the provisions concerned.  
7.6.3.3   Whether different reference periods can be used for the determinations under 
Article X XVIII:1, Article XXVIII:2, and Article XIII:2(d)  
7.323.   China 's claims under Article XIII:2(d) are founded on the same two horizontal arguments 
that we have already considered in the context of examining China 's claims under Article XXVIII:1, 
and also in the con text of examining China 's claims under Article XXVIII:2 and paragraph 6 of the 
Understanding. First, we understand China to argue that, in respect of both the First and Second 
Modification Packages, the European Union was obligated  to estimate what import shares into the 
European Union would have been in the absence of the SPS measures restricting poultry imports 
from China. Second, we understand China to argue that, in respect of the Second Modification 
Package, the European Union was required to base its determinations on actual imports from the 
most recent three -year reference period prior to the conclusion of the negotiations. China 
considers that the negotiations concluded when the European Union notified Members of the same 
in December 2012, and theref ore in its view the determinations under Article XIII:2(d) should 
have used 2009 -2011 as the reference period.  
7.324.   China has claimed that the European Union violated Article XXVIII:1 and Article XXVIII:2 
on essentially the same grounds. We have already reject ed China 's claims under  Article XXVIII:1, 
finding that  the European Union was free to determine which Members held a principal and 
substantial supplying interest in the First and Second  Modification Packages on the basis of actual 
imports into the European  Union over the three -year period preceding the European Union 
notification of its intention to modify concessions under Article XXVIII (i.e. 2003 -2005 and 
2006-2008). We have also rejected China 's claims under  Article XXVIII:2 and paragraph 6 of the 
Under standing, again finding that the European Union was free to determine the total amount of 
the TRQs in the First and Second  Modification Packages on the basis of actual imports into the 
European Union over the three -year period preceding the European Union notification of its 
intention to modify concessions under Article XXVIII (i.e. 2003 -2005 and 2006 -2008).  
7.325.   However, we do not consider that the conclusions that we have reached in relation to 
China 's claims under Article XXVIII:1 and Article XXVIII:2 are ne cessarily dispositive of China 's 
claims under Article XIII:2(d). The reason is that each of these provisions contains its own 
applicable legal standard, as elaborated in the different terms used in each provision. In addition, 
each of these provisions appl ies to a different subject. The subject -matter of China 's claims under 
Article XXVIII:1 is the reference period used to determine which Members hold a principal or 
substantial supplying interest for the purpose of entering into negotiations or consultation s under 
Article XXVIII. This is distinct from the subject -matter of China 's claims under Article XXVIII:2 and 
                                               
468 Canada's third -party written submission, para. 35. We note that the panel in EC-Bananas III  
(Ecuador)  found the approach of the European Union in that case (to interpret this language in conformity with 
Ad Article XXVIII:1 paragraph 7 and the 10% rule developed in that context) to be reasonable(Panel Report 
EC-Bananas III (Ecuador) , para. 7.83 -7.85).   
469 China's response to Panel question No. 68(a).  WT/DS492/R  
 
- 115 - 
 
  paragraph 6 of the Understanding, which is the reference period used to determine the total 
amount of the TRQs. Both of the foregoing are distinct  from the subject -matter of China 's claims 
under Article XIII:2(d), which is the reference period used to determine which Members held a 
"substantial interest " in supplying the products at issue for the purpose of determining the 
allocation of the TRQ shar es among supplying countries.    
7.326.   Accordingly, having found that the European Union was free to base its determinations 
under Article XXVIII:1 and Article XXVIII:2 on actual imports over the reference periods that it 
selected for that purpose (2003 -2005 and  2006-2008), we cannot a priori  exclude the possibility 
that the European Union might have been obligated to allocate the TRQ shares among supplying 
countries on the basis of a different reference period taking into account the particular legal 
standards t hat apply in the context of Article XIII:2(d). Specifically, we do not exclude a priori that 
a different reference period could be used for the different determinations, insofar as that 
conclusion would be warranted on the basis of the legal standard that  applies under 
Article  XIII:2(d).  
7.327.   We are presented with a number of arguments that are specific to the legal standards that 
apply under Article XIII:2, and in particular the notion of "special factors which may have affected 
or may be affecting the trade i n the product ". Some of the arguments presented by the parties in 
relation to China 's claims under Article XIII:2 reiterate arguments that were also advanced, and 
that we have already addressed, in the context of addressing China 's claims under Article XXV III:1 
and Article XXVIII:2 and paragraph 6 of the Understanding. To avoid addressing the same 
arguments multiple times, our analysis of China 's claims under Article XIII:2(d) will focus on those 
arguments and interpretative elements that are specific to Ar ticle XIII:2, and that we have not 
already addressed in the context of our findings under Article XXVIII:1 and Article XXVIII:2.  
7.6.3.4   Whether the European Union was obliged to determine which Members were 
substantial suppliers based on an estimate of what their  import shares would have been 
in the absence of the SPS measures   
7.328.   China claims that where SPS import bans are imposed, the period of application of these 
import bans cannot be used as a previous "representative " period for the purpose of determining 
which Members have a "substantial interest " in supplying that product. In addition, China argues 
that "its reduced ability to export as a result of import bans due to SPS measures " was a "special 
factor that affected trade in the products " concerned, and that had to be taken into account by the 
European Union. With respect to both the First and Second Modification Package s, we understand 
China to claim that the European Union acted inconsistently with Article XIII:2(d) by not 
determining which Members held a su bstantial supplying interest on the basis of an estimate of the 
share of imports that China would have had in the absence of the SPS measures.  
7.329.   As we understand it, China 's contention is that the European Union was obligated to 
estimate what other Members ' poultry import shares into the European Union would be without 
any of the SPS measures on Chinese poultry imports, at a time when those SPS measures were 
still in force, and then determine that China held a "substantial interest " on the basis of that 
count erfactual estimate. We understand this contention to be distinct from China 's additional 
claim, which we address in the next subsection, that the European Union was obliged to determine 
which Members held a substantial interest taking into account changes in import shares into the 
European Union in some poultry products after those SPS measures were relaxed in July 2008. We 
will analyse China 's contention first in the light of the notion of a "previous representative period ", 
and then in the light of the co ncept of "special factors ".  
7.330.   We understand China 's view to be that for a period to be "representative " within the 
meaning of Article XIII:2, the "period cannot be affected by an import ban ".470 We agree with 
China that the European Union was obliged to base its determinations under Article XIII:2(d) on a 
"previous representative period ". We also consider that the existence of one or more import 
restrictions during the reference period selected for the purpose of Article XIII:2(d) could, 
depending on the facts  of a case, warrant the conclusion that the reference period selected might 
not be "representative ". The GATT panel report in EEC – Apples I (Chile)  supports this 
understanding. When considering the representative period for the imposition of quantitative 
restrictions, the years 1975, 1977 and 1978 were taken into account by the panel, while 1976 was 
                                               
470 China's first written submission, para. 252.  WT/DS492/R  
 
- 116 - 
 
  excluded because it was not "representative " as voluntary restraint agreements with the EEC were 
in effect at that time. In these circumstances, the panel stat ed: 
Due to the existence of restrictions in 1976, the Panel held that that year could not be 
considered as representative, and that the year immediately preceding 1976 should 
be used instead. The Panel thus chose the years 1975, 1977 and 1978 as a 
"represe ntative period ".471  
7.331.   Likewise, we note that the panel in EC – Bananas III (Art. 21.5 – Ecuador)  considered that 
a period during which some EC member States applied "import restrictions or prohibitions " could 
not serve as a previous representative period.472  
7.332.   However, we do not read either of these prior reports to say that the existence of any 
import restrictions during a previous period means that ipso facto , such a period cannot be 
"representative ". Thus, we do not agree with the sweeping conclusion that for a period to be 
"representative " within the meaning of Article XIII:2, the "period cannot be affected by an import 
ban".473  Our reasons are as follows.  
7.333.   Firstly, it appears that the import restrictions in question in both of these previous cases 
may have inc luded WTO -inconsistent measures. In this regard, we recall that in EEC – Apples 
(Chile I) , the restrictions were described as "voluntary restraint agreements ". In the present case, 
China is not challenging the consistency of the SPS measures with any provi sion of the covered 
agreements.474 Moreover, we have found that the SPS measures were not "discriminatory 
quantitative restrictions " within the meaning of paragraphs 4 and 7 of the Ad Note to 
Article  XXVIII:1. Accordingly, the present case is one in which th e import restrictions that were 
maintained during the reference periods must be presumed to be WTO -consistent. In our view, 
there is nothing unusual about Members maintaining measures that may, directly or indirectly , 
affect the importation of certain prod ucts. It follows, for the purpose of calling into question the 
representativeness of the period selected , that a  relevant consideration would be whether those  
measur es are WTO-consistent or not.  
7.334.   Secondly, if it were the case that the existence of any impor t restriction during a previous 
period meant that ipso facto  such a period cannot be considered "representative " for the purpose 
of Article XIII:2, we would expect this limitation to be reflected in some way in the text of 
Article  XIII:2, just as the conce pt of "discriminatory quantitative restrictions " is explicitly 
mentioned in the context of Article XXVIII. However, Article XIII:2(d) contains only a reference to 
a "previous representative period ", with no such qualification. While the chapeau of Article XIII:2 
refers to "the shares which the various Members might be expected to obtain in the absence of 
such restrictions ", when applied to a tariff rate quota, this means the shares which the various 
Members might be expected to obtain in the absence of the tariff rate quota. In other words, the 
chapeau refers to "such restrictions ", and not to import restrictions in general.  
7.335.   Thirdly, whether the existence of certain import restrictions over a period mean s that the 
period is one that is not "representative " depends on the particular factual circumstances of a 
case. In the present case, it is not in dispute that all tariff items at issue were prohibited or 
restricted before and after the period 2002 -2008, when importation of all Chinese poultry products 
was pr ohibited.475 It appears that EU imports from China under all of the tariff lines at issue had 
been at 0% or negligible levels over the 1999 -2002 period, and that EU imports from China under 
a number of the tariff lines at issue were still prohibited as a con sequence of the heat treatment 
measure, until 2015 at least.476 From this perspective, we are not persuaded by the argument that 
the existence of the SPS measures in place during the reference periods 2003 -2005 and 
2006-2008 means that these periods were, in  the circumstances of this case, not "representative ".  
                                               
471 Panel Report, EEC – Apples I (Chile) , para. 4.8.  
472 Panel Report, EC – Bananas III (Art. 21.5 – Ecuador) , para. 6.42.  
473 China's first written submission, para. 25 2. 
474 China's first written submission, para. 31. See also China's opening statement at the first meeting of 
the Panel, para.5; China's second written submission, paras. 42, 46; China's response to Panel question No. 6, 
para. 23; China's response to Panel q uestion No. 81, para. 43).  
475 See section  7.2.3 above.  
476 See the import statistics in section 7.2.4  above.  WT/DS492/R  
 
- 117 - 
 
  7.336.   We turn now to the concept of "special factors ". China contends that by using a reference 
period that was tainted by the existence of import prohibitions due to the SPS measures, the 
European Union di d not base its determinations of which Members held a substantial supplying 
interest, or the TRQ allocation, taking due account of "special factors which may have affected or 
may be affecting the trade in the product ". According to China, the "special fact or" in this regard 
was "the reduced ability to export as a result of import bans due to SPS measures ".477 
7.337.   In this respect , we find it difficult to characterize the SPS measures as such as "special 
factors ", insofar as they apply equally to imports from all M embers in the same situation .478 As 
already noted, in our view, there is nothing unusual about Members applying WTO -consistent 
measures which may, directly or indirectly, affect the importation of certain products.  It is not in 
dispute that "the reduced abil ity to export as a result of import bans due to SPS measures " was 
the result of the determination that Chinese poultry producers had not complied with the 
applicable SPS measures maintained by the European Union. We have some difficulty with the 
notion tha t a Member setting a TRQ would need to make allowance for import restrictions arising 
from foreign producers ' non-compliance with applicable SPS measures.  
7.338.   In our view, the Ad Note to Article XIII:2(d) is relevant context to the interpretation of the 
conce pt of "special factors " in Article XIII:2. The Ad Note clarifies that:  
No mention was made of "commercial considerations " as a rule for the allocation of 
quotas because it was considered that its application by governmental authorities 
might not always be practicable . Moreover, in cases where it is practicable , a Member 
could apply these considerations in the process of seeking agreement, consistently 
with the general rule laid down in the opening sentence of paragraph 2. (emphasis 
added)  
7.339.   The ordinary meani ng of the word "practicable " is "[a]ble to be put into practice; able to 
be effect, accomplished or done; feasible ".479  The Ad Note makes clear that in requiring that due 
account be taken of "special factors ", but including no mention of "commercial conside rations ", the 
intention was to avoid establishing a rule for the allocation of quotas whose application "might not 
always be practicable ". The Ad Note clarifies that commercial considerations could be applied 
"where it is practicable " in the process of see king agreement. Likewise, Article XIII:2(d) provides 
that a Member seeking to allocate a TRQ among supplying countries may seek agreement with all 
Members holding a substantial supplying interest, but has the right to unilaterally allocate the TRQ 
among su bstantial suppliers in cases where allocation by agreement is not reasonably 
"practicable ".  
7.340.   We consider that the Ad Note to Article XIII:2(d), and the text of that provision itself, 
convey that the rules governing the allocation of TRQs among supplying co untries should not be 
interpreted in a manner that would establish requirements that governmental authorities cannot 
put into practice , or which are otherwise not feasible. This mirrors the objective, expressed in the 
text of paragraph 4 of the Ad Note to Article XXVIII:1, of ensuring that negotiations and 
agreement under Article XXVIII are not "unduly difficult " and that "complications in the application 
of this Article " are avoided.480 
7.341.   In our view, treating the SPS measures that were in place over the 2003 -2005 and 
2006-2008 periods as "special factors " would result in a rule for the allocation of the TRQs that is 
not practicable. The reason is that estimating what poultry imports would be without any of the 
SPS measures affecting Chinese poultry imports wou ld be an extremely complex task involving the 
use of highly speculative estimates.481 Under such an approach, the European Union would have 
been obligated to take into account not only the range of SPS measures that applied to China and 
which are of concern to China (including the residues measure, the avian influenza measure, and 
                                               
477 China's response to Panel question No. 119, para. 108.  
478 EU's first written submission, para. 232.  
479 Shorter Oxford English Dictionary , 5th ed, W. R. Trumble, A. Stevenson (eds.) (Oxford University 
Press, 2002), Vol. 2, p. 2309.  
480 See the import statistics in section 7.2.4 above.  
481 EU's first written submission, para. 131; EU's second written submission, para. 29  WT/DS492/R  
 
- 118 - 
 
  the heat treatment measure), but also the SPS measures applied to many other WTO Members 
and, more generally, for its entire sanitary regime applied to imports of poultry products.482  
7.342.   Furthermore, we note that imports of all of the poultry products under the First 
Modification Package were still prohibited at the time of the allocation  of the TRQs among 
supplying countries , and it appears that imports of a majority of the products und er the Second 
Modification Package remained prohibited at the time of the allocation as well.483 Therefore, 
accepting China 's interpretation of Article XIII:2(d) would  lead to the result that the European 
Union was obliged to recognize China as a substantia l supplier of poultry products that China was 
prohibited from exporting to the European Union , obliging the European Union to seek agreement 
with China on the TRQ allocation in respect of such products, and ultimately allocating an unusable 
country -specifi c share of the TRQs for such products to China, reducing the size of the shares 
allocated to imports from other sources. Alternatively, the European Union would have been 
obliged to increase the amount of the "all others " share to reflect the amount that C hina would be 
able to export, if and when the import restrictions affecting poultry imports from China under 
those tariff lines were removed.  
7.343.   Based on the foregoing, we find that China has not demonstrated that the European Union 
acted inconsistently with  Article XIII:2(d) by determining which countries had a substantial 
interest in supplying the products concerned on the basis of their actual share of imports into the 
European Union , rather than on the basis of an estimate of what import shares into the E uropean 
Union would have been in the absence of the SPS measures restricting poultry imports from China.  
7.6.3.5   Whether the European Union was obliged to determine which Members were 
substantial suppliers taking into account changes in import shares following th e 
initiation of the negotiations on TRQ allocation    
7.344.   With respect to the Second Modification Package, we understand China to claim that the 
European Union acted inconsistently with Article XIII:2(d) by not recognizing  that China was a 
substantial supplier , and seeking an agreement with China on the TRQ allocation , on the basis of 
changes in import shares over the period 2009 -2011.  
7.345.   We understand this second claim to rest on two different lines of argument. First, we 
understand China to argue that, as a gen eral rule, Article XIII:2(d) requires that the determination 
of which Members hold a "substantial interest " must always be based on a reference period closely 
preceding the entry into force of the TRQ. Second, we understand China to argue that, in the 
particular circumstances of this case, China 's increased ability to export after the relaxation of the 
SPS measures in July 2008 was a "special factor " that had to be taken into account by the 
European Union when making its determination of which Members held a "substantial interest " in 
supplying the products at issue.  
7.346.   We consider that China 's claims and the arguments of the parties raise several issues, 
which we will proceed to examine in turn. We will begin by examining whether, as a general rule, 
Article XI II:2(d) requires that the determination of which Members hold a substantial interest in 
supplying the products concerned must always be based on a period immediately preceding the 
entry into force of the TRQ in situations where, as in a case like the prese nt one, there is a period 
of several years between the initiation of the negotiations with substantial suppliers aimed at 
allocating the TRQs, and the subsequent entry into force of the TRQ. If we conclude that there is 
no such rule requiring the use of th e most recent three -year period prior to the entry into force of 
the TRQs, we will then consider whether, in the particular circumstances of this case, China 's 
increased ability to export following the relaxation of the SPS measures in July 2008 was a "special 
factor " within the meaning of Article XIII:2. If we conclude that China 's increased ability to export 
following the relaxation of the SPS measures in July 2008 was a "special factor ", we will then 
proceed to examine whether the European Union was obli gated to take into account the increased 
                                               
482 EU's response to Panel question No . 74(a), para. 23.  The European Union also stated in its response 
to Panel question No. 74, para. 29, that "if China's interpretation is followed, that type of estimate will be far 
more complicated and speculative, because of the very large number of facto rs that could have to be controlled 
for: not just for WTO inconsistent measures, but any SPS measure or any other regulatory requirements that 
may have the effect of restricting imports from certain countries".  
483 After the relaxation of the SPS measures in  July 2008, "uncooked" poultry products remained 
prohibited as a consequence of the heat treatment.  See paragraphs 7 .85 and 7.91 -7.93. WT/DS492/R  
 
- 119 - 
 
  imports of Chinese poultry products over the period 2009 -2011 on its own initiative and in the 
absence of any related request by China until May 2012 and, on the basis of those increased 
imports, have recognized Chi na as a substantial supplier in respect of any of the TRQs at issue in 
the Second Modification Package.  
7.347.   Beginning with the first issue, China submits that the European Union was required to base 
its determination under Article XIII:2(d) on a reference peri od preceding the entry into force of the 
TRQs, and in China 's view that reference period was the period 2009 -2011 for the Second 
Modification Package.484 China considers that the existence of a general rule requiring the use of 
the most recent data that beco mes available in the course of the negotiations  is supported by the 
chapeau of Article XIII:2, which requires that the allocation of a TRQ must aim at a distribution of 
trade in such product "approaching as closely as possible the shares which the various Members 
might be expected to obtain in the absence of " the allocation. In China 's view, the trade in the 
period immediately preceding the TRQ allocation provides an objective basis to measure the 
share s Members might be expected to obtain in the absence of  the TRQ. China finds additional 
support for its interpretation of Article XIII:2 in the statement by the panel in US – Line Pipe that 
"trade flows before the imposition  of a safeguard measure provide an objective, factual basis for 
projecting what might h ave occurred in the absence of that measure ".485 In addition, China notes 
that the GATT panel in EEC – Apples  (Chile I) considered appropriate to use as a "representative 
period " a three -year period previous to 1979, "the year in which the EEC measures were in 
effect ".486   
7.348.   We recall that in the present case, in June 2009 the European Union notified Members of 
its intention to modify certain tariff concessions under Article XXVIII, accompanied by statistics on 
imports from other Members for the last three years  (2006 -2008) in accordance with the 
Procedures for Negotiations under Article XXVIII. Following the EU notification in 2009 , Thailand 
and Brazil each claimed a principal or substantial supplying interest in the concessions at issue in 
the Second Modificati on Package. The European Union entered into negotiations with Brazil and 
Thailand, and following five rounds of negotiations, reached agreement with Thailand and Brazil on 
both the total amount of the TRQs, and the allocation of the TRQs among supplying co untries. 
According to the European Union, negotiations at negotiators ' level were concluded with Brazil and 
Thailand in September 2011.487 The draft agreements with Thailand and Brazil were initialled on 
22 November 2011 and 7 December 2011, respectively. Th is was followed by approval of the 
bilateral agreements by each party in accordance with its internal procedures. The TRQs ultimately 
entered into force in March 2013. Thus, there was a period of several years in between the 
initiation of the negotiations with substantial suppliers  in 2009 , and the subsequent entry into 
force of the TRQs.  
7.349.   Beginning with the text of Article XIII:2(d), we consider that if the drafters intended for a 
general rule requiring the use of the most recent data that becomes availabl e in the course of the 
negotiations to  apply to the determination of which Members hold a "substantial interest ", then a 
fortiori that same rule  would also apply to the allocation of TRQs among substantial suppliers in 
cases falling under the second senten ce of Article XIII:2(d). However, the second sentence of 
Article refers only to "a previous representative period ", and does not specify that such period 
must precede the opening of the TRQs. In addition, the reference to "a" previous representative 
period  in Article XIII:2(d) implies that there is no general rule that applies in all cases regarding 
the selection of the reference period.488 Furthermore, Article XIII:4 envisages the "the selection of 
                                               
484 China's first written submission, paras. 198, 248.  In its response to Panel question No. 107(a), 
para. 97, China expla ins that "[i]n the context of Article XIII, the reference period for the initial allocation in 
the first quota year should be a period preceding the entry into force of the TRQ. It is acknowledged that the 
importing Member needs some time to determine the allocation and to make necessary arrangement for the 
implementation, and therefore the reference period should not necessarily be a period immediately preceding 
the entry into force of the TRQ, to the extent '"immediately'" means one day or very few days."  We note that 
the TRQs under the Second Modification Package entered into force in March 2013. Accordingly, if the use of a 
reference period immediately preceding the entry into force is required, this would be the period 2010 -2012, 
and not 2009 -2011.  
485 Panel Report, US – Line Pipe , para. 7.55. (emphasis added)  
486 GATT Panel Report, EEC – Apples (Chile I) , para. 4.8 . (emphasis added)  
487 See footnote 128 above.  
488 By way of analogy, we note that in Argentina – Poultry Anti -Dumping  Duties , the panel considered 
the requirement, in Article 2.4.2 of the Anti -Dumping Agreement, that the existence of margins of dumping 
shall normally be established on the basis of a comparison of " a weighted average normal value with a 
weighted average o f prices of exports". The Panel stated that "Article 2.4.2 refers to a weighted average WT/DS492/R  
 
- 120 - 
 
  a representative period " being made "initially " by the impor ting Member, subject to reappraisal. 
The clear implication is that there is no general rule , applicable to all cases,  regarding the 
reference period that must be used  for the purpose of Article XIII:2(d) .  
7.350.   Turning to the wider context of Article XIII, we r ecall that we have already found that a 
Member is entitled to base its determinations under Article  XXVIII:1 and Article XXVIII:2 on a 
reference period covering the three years preceding the notification of the intention to modify 
concessions, and is under  no obligation to update those determinations based on changes in 
import levels and shares that may occur  in the course of negotiations. In our view, to read such a 
general requirement into Article XIII:2, as a general rule applicable in all cases, would b e 
incoherent and impracticable. Furthermore, we consider that reading such a far -reaching rule into 
Article XIII:2 would potentially render the concept of "special factors" redundant. As we discuss 
further below, we consider that changes which may have occ urred since the representative period 
may have to be taken into account in re -determining which Members hold a "substantial interest" 
under Article XIII:2(d), insofar as those changes qualify as "special factors which may have 
affected or may be affecting trade in the product concerned".  
7.351.   In addition, we consider that there are other practical difficulties that would arise from 
mandating, as a general rule, the use of a reference period immediately preceding the opening of 
a TRQ for the purpose of re -determ ining which Members hold a "substantial interest " under 
Article  XIII:2(d). In this regard, the European Union has elaborated on how there is necessarily a 
time-lag between the conclusion of the negotiations leading to bilateral agreements pursuant to 
Articles XXVIII and XIII:2(d), and the adoption of domestic legislation implementing those 
agreements. The European Union has explained how the approval of international agreements 
pursuant to Articles XXVIII and XIII in the context of EU law involves a rather complex process 
with different procedural stages, which usually takes more than one year.489 We consider that the 
determination of which Members are substantial suppliers could not be based on a reference 
period that is after the conclusion of the negotiatio ns with the Members recognized as substantial 
suppliers, let alone after the approval of the agreements by those negotiating Members  in 
accordance with their internal procedures.  
7.352.   Finally, we do not consider that China 's interpretation of Article XIII:2(d)  finds support in 
the statement by the panel in US – Line Pipe that "trade flows before the imposition of a safeguard 
measure provide an objective, factual basis for projecting what might have occurred in the 
absence of that measure "490, or with the fact tha t the GATT panel in EEC – Apples (Chile I)  
considered it appropriate to use as a "representative period " a three -year period previous to 1979, 
"the year in which the EEC measures were in effect ".491 In both of those cases, the TRQ was 
imposed unilaterally by  the importing Member. Neither panel was confronted with a situation in 
which there was a time -lag of several years between the initiation of the negotiations with 
substantial suppliers aimed at allocating the TRQs, and the subsequent determination and ent ry 
into force of a TRQ.  
7.353.   For these reasons, we conclude that there is no general rule always requiring the use of 
the most recent three -year period prior to the entry into force of a TRQ to determine which 
Members hold a substantial supplying interest. We will now consider whether, in the particular 
circumstances of this case, China 's increased ability to export following the relaxation of the SPS 
measures in July 2008 was a "special factor " within the meaning of Article XIII:2. We will first set 
out our in terpretation of the term "special factors ", and then turn to the facts of this case.  
7.354.   Article XIII:2(d) refers to "special factors which may have affected or which may be 
affecting the trade in the product ". Similar formulations are used in other provision s of the covered 
agreements.492 We consider that, in certain circumstances, consideration of "special factors " in the 
context of Article XIII:2(d) could require the Member allocating a TRQ among supplying countries 
to take into account changes in the import shares held by different Members which may have 
                                                                                                                                               
normal value, and not the weighted average normal value.  In our view, use of the word "'a'" simply means 
that there are various ways of establishing a weighted average " (Panel Report, Argentina – Poultry Anti -
Dumping Duties , para. 7.273).  
489 EU's response to Panel question No. 107(a).  
490 Panel Report, US – Line Pipe , para. 7.55.  
491 Panel Report, EEC – Apples (Chile I) , para. 4.8 . 
492 See footnote 459. WT/DS492/R  
 
- 121 - 
 
  occurred between the end of the representative period selected and the time of the TRQ being 
allocated. In other words, while for the reasons set forth above we consider that there is no 
general requirement i n Article  XIII:2 to always use more recent data taking into account 
developments subsequent to the reference period to re -determine which Members hold a 
substantial interest in supplying the products at issue, we are of the view this may be required in 
particular circumstances insofar as such changes in import shares are linked to "special factors ".  
7.355.   We consider that our understanding is supported by the ordinary meaning of the terms 
accompanying "special factors " in the text of Article XIII:2(d). In this c onnection, we recall that 
the text of Article XIII:2(d) refers to the proportions supplied by different countries during a 
"previous " representative period, with due account being taken of any special factors "which may 
have affected or may be affecting " the trade in the product. We consider that the reference to 
special factors including not only those which may have affected trade in the previous reference 
period, but also those which "may be affecting " trade, implies consideration of trade developments  
which may have occurred between the end of the representative period selected and the time of 
the TRQ being allocated.  
7.356.   We consider that this understanding is also consistent with the text of the Ad Note which 
clarifies that the term "special factors " includes "changes " in relative productive efficiency as 
between domestic and foreign producers, or as between different foreign producers, but not 
"changes " artificially brought about by means not permitted under the Agreement. We understand 
the basic thrust of  this clarification to be that changes artificially brought about by certain forms of 
unfair trade, e.g. dumping or subsidization , should not be taken into account under the rubric of 
"special factors ". In that respect, the Ad Note is not directly relevant  to the circumstances in this 
case. However, the fact that "special factors " is explicitly linked in the Ad Note to "changes 
brought about " lends support to the view that an analysis of special factors is dynamic, and may 
entail consideration of developmen ts that have taken place between the end of the reference 
period selected and the time of the TRQ being allocated .  
7.357.   This understanding is also consistent with the following Ad Note that accompanied the 
provisions of the Havana Charter corresponding to Arti cle XIII:2(d):  
The term "special factors " as used in [Article XIII:2(d)] includes among other factors 
the following changes, as between the various foreign producers, which may have 
occurred since the representative period : 
(1) changes in relative producti ve efficiency;  
(2) the existence of new or additional ability to export ;  and  
(3) reduced ability to export.493 (emphasis added)  
7.358.   In addition to the clarification provided in this Ad Note, the Sub -Committee at the Havana 
Conference which considered the prov isions of the Havana Charter corresponding to Articles XI and 
XIII of the General Agreement "agreed that it was desirable to make clear that, in cases where 
separate import quotas were allotted to the various foreign suppliers, a country whose productive 
efficiency or ability to export had increased relatively to other foreign suppliers since the 
representative period on which import quotas were based  should receive a relatively larger import 
quota ".494  
7.359.   Although the Ad Note that accompanied the provisions of  the Havana Charter 
corresponding to Article XIII:2(d) was ultimately not included in the General Agreement, several 
panels have been guided by it when interpreting and applying the concept of "special factors " in 
Article XIII:2. In two cases, GATT panels found that the existence of a new or additional ability to 
export  may constitute a "special factor " within the meaning of Article XIII:2(d). In EEC – Apples 
(Chile I) , the panel found that:  
                                               
493 Havana Charter Interpretative Note ad Article 22, cited in GATT Analytical Index: Guide to GATT Law 
and Practice , at 403. (emphasis added)  
494 Havana Reports, page 95, para. 52, cited in GATT Analytical Index: Guide to GATT Law and P ractice , 
at 403.  (emphasis added)  WT/DS492/R  
 
- 122 - 
 
  [E]xports from Chile into the EEC had been expanding rapidly . Chil e had more than 
doubled its share among Southern Hemisphere suppliers into the EEC market over a 
recent period, accounting for 5 per cent in 1974, 10 per cent in 1975, 13 per cent in 
1976, 14 per cent in 1977 and 17 per cent in 1978. The Panel believed tha t Chile's 
increased export capacity should have been taken into account by the EEC in its 
allocation of shares  among the Southern Hemisphere suppliers. The Panel felt such a 
consideration was in line with the interpretative note to the term "special factor s" as 
drafted in the Havana Charter, in particular with reference to "the existence of new or 
additional ability to export " as between foreign producers.495 
7.360.   In EEC – Dessert Apples , the panel found that "the overall trend towards an increase in 
Chile's relat ive productive efficiency and export capacity had not been duly taken into account, nor 
had the temporary reduction in export capacity caused by the 1985 earthquake ", and therefore 
"the Panel found that the account taken of special factors by the EEC in al locating Chile 's quota 
share did not meet the requirements of Article XIII:2(d) ".496 
7.361.   We consider that our understanding of "special factors " is also consistent with the 
immediate context, including the general rule in the chapeau of Article XIII:2. In our vi ew, taking 
due account of changes in the relative import shares held by Members  which may have occurred 
between the end of the representative period and the time of the TRQ being allocated is consistent 
with the requirement in the chapeau of ensuring that TRQ allocations "aim at a distribution of 
trade in such product approaching as closely as possible the shares which the various Members 
might be expected to obtain in the absence of " the TRQ.   
7.362.   Finally, we have carefully considered the practical difficulti es and complications that could 
arise from re -determining which Members hold a "substantial interest " for the purpose of 
Article  XIII:2(d) on a different and more recent reference period and set of trade statistics from 
those used to determine the total am ount of the TRQ, in a situation in which these matters are 
being negotiated concurrently. We do not consider that doing so in exceptional circumstances 
would be illogical, impossible, or impracticable. In this regard, we recall the Appellate Body 's 
finding  in EC – Bananas III (Art. 21.5 – Ecuador II)  / EC – Bananas III (Art. 21.5 – US) that, in 
principle, "the overall tariff quota quantity " and "the allocation of the quota shares among 
suppliers " are "elements that distinct and severable from one another ".497  
7.363.   Based on the foregoing, we consider that consideration of "special factors which may have 
affected or which may be affecting the trade in the product " may include, in certain exceptional 
(i.e. "special ") circumstances, changes in the import shares held b y different Members that have 
occurred between the end of the representative period selected and the time of the TRQ being 
allocated.  
7.364.   Turning to the facts of the present case, we recall that the European Union determined 
which Members held a "substantial interest " under the Second Modification on the basis of their 
imports shares over the period 2006 -2008. During that period, China held a 0% or negligible share 
of imports into the European Union for all of the products concerned.498 Following the relaxation of 
the SPS measures in July 2008, it appears that imports of poultry products from China did not 
increase over the remaining half of 2008.499 However, over the period 2009 -2011, imports from 
China increased significantly under several of the tariff lines at issue in the Second Modification 
Package, including in particular 1602 39 29 and 1602 39 80 (the latter being merged with 1602 39 
40, at the beginning of 2012, into 1602 39 85). For ease of reference, the import statistics are set 
out below500: 
                                               
495 GATT Panel Report, EEC – Apples (Chile I) , para. 4. 17 (citing Havana Charter Interpretative Note ad 
Article 22, paragraphs 2(d) and 4) . (emphasis added)  
496 GATT Panel Report, EEC – Dessert Apples , para. 12.24.  
497 Appellate  Body Reports, EC – Bananas III (Art. 21.5 – Ecuador II)  / EC – Bananas III (Art. 21.5 – 
US), para. 426.  
498 See the import statistics in section 7.2.4 above.  
499 See the import statistics in section 7.2.4 above.  
500 See the import statistics in section 7.2.4 a bove. WT/DS492/R  
 
- 123 - 
 
  Tariff line  China 's share 
of imports into 
the EU in 2006 -
2008  China 's 
share of 
imports into 
the EU in 
2009  China 's 
share of 
imports into 
the EU in 
2010  China 's 
share of 
imports into 
the EU in 
2011  TRQ share 
allocation  
1602 32 11  0.0%  0.0%  0.0%  0.0%  Brazil:  97.89%  
Others: 2.11%  
 
1602 32 30  0.0%  0.4%  0.9%  0.9%  Brazil:  78.92%  
Thailand : 17.56%  
Others : 3.51%  
 
1602 32 90  0.0%  2.8%  1.5%  2.9%  Brazil : 10.3%  
Thailand : 73.3%  
Others : 16.4%  
 
1602 39 21  0.0%  0.0%  0.0%  0.0%  Thailand : 100%  
Others : 0.0%  
 
1602 39 29  0.0%  27.1%  40.7% 52.8%  Thailand : 98.4%  
Others : 1.6%  
 
1602 39 40  0.0%  0.0%  0.0%  25.3%  Thailand : 80.21%  
Others : 19.79%  
 
1602 39 80  0.0%  8.7%  17.6%  61.1%  Thailand : 82.76%  
Others : 17.24%  
 
 
7.365.   The word "special " means "[e]xceptional in quality or degree; unusual; out of the 
ordinary ".501 The word "factor " refers to "[a] circumstance, fact, or influence which tends to 
produce a result ".502 We consider that the increase in imports from China under the tariff lines 
1602 39 29 and 1602 39 80 as set forth above is a development that f alls within the ordinary 
meaning of an "unusual ", or "out of the ordinary ", "circumstance " or "fact".  
7.366.   The European Union argues that "special factors " alludes to "observable factual 
circumstances directly affecting the ability of one country to produce a given product and to 
compete with other suppliers ".503 We consider that China 's new ability to export after the 
relaxation of the SPS measures in July 2008 also falls within that definition of a "special factor ", as 
an "observable factual circumstance direct ly affecting the ability of one country to produce a given 
product and to compete with other suppliers ". It was observable from the dramatic increase in 
imports into the European Union under tariff lines 1602 39 29 and 1602 39 80 (the latter merged 
with 16 02 39 40, in 2012, into 1602 39 85) that occurred in the years immediately following the 
relaxation of the SPS measures in July 2008.  
7.367.   In this case, we consider that the changes in the import shares held by different Members 
which occurred between the end of the representative period selected and the time of the TRQ 
shares being allocated, which were a consequence of China 's increased ability to export certain 
poultry products into the European Union following the relaxation of the SPS measures in July 
2008, was a "special factor … affecting trade in the product ".  We have agreed with the European 
Union that the SPS measures are not themselves "special factors ", but we must distinguish the 
SPS measures per se  from China 's new ability to export after the rela xation of the SPS measures 
in July 2008.  
7.368.   In sum, we have concluded that there is no rule in Article XIII:2 requiring that the 
determination of which Members hold a substantial supplying interest always be based on a period 
                                               
501 Shorter Oxford English Dictionary , 5th ed, W.R. Trumble, A. Stevenson (eds.) (Oxford University 
Press, 2002), Vol. 2, p. 2945.  
502 Shorter Oxford English Dictionary , 5th ed, W.R. Trumble, A. Stevenson (eds.) (Oxford University 
Press, 2002), Vol. 1, p. 912.  
503 See e.g. EU's response to Panel question No 117, para. 110.  With respect to Article XIII:2, Canada 
likewise considers that " the operation of this Article is based on information that can be documented, i.e. it 
serves to adjust in light of observe d developments, not hypothesized ones"(Canada's third -party written 
submission, para. 38).  WT/DS492/R  
 
- 124 - 
 
  immediately preceding the entry into force of the TRQ in situations where, as in a case like the 
present one, there is a period of several years between the initiation of the negotiations with 
substantial suppliers aimed at allocating the TRQs, and the subsequent determination of the TRQ  
allocation and entry into force of the TRQ. However, we have found that, in the particular 
circumstances of this case, China 's increased ability to export poultry products under certain tariff 
lines following the relaxation of the SPS measures in July 200 8 was a "special factor " within the 
meaning of Article XIII:2(d). Having concluded that China 's increased ability to export following 
the relaxation of the SPS measures in July 2008 was a "special factor ", we must now assess 
whether the foregoing establish es that the European Union was obligated to take into account the 
increased imports of Chinese poultry products over the period 2009 -2011 and, on the basis of 
those increased imports, recognize China as having a substantial interest in supplying the produc ts 
concerned in respect of any of the TRQs at issue in the Second Modification Package.  
7.369.   We have already identified a number of issues with respect to the trade statistics provided 
by the parties, and we therefore approach them with an appropriate degree o f caution.504 
However, it is clear that over the period 2009 -2011, imports from China had increased significantly 
under tariff lines 1602 39 29 and 1602 39 80 (the latter being merged with 1602 39 40, at the 
beginning of 2012, into 1602 39 85). Imports from China under most of the other tariff lines in the 
Second Modification Package remained at zero or negligible levels, as some or all of these products 
were still restricted by the heat treatment measure in force. Accordingly, if the European Union 
was under  an obligation to take into account the changes in import shares that occurred following 
the 2006 -2008 reference period, we see no basis to find any violation of Article  XIII:2(d) in 
respect of the TRQ for tariff lines 1602 32 11, 1602 32 30, 1602 32 90, o r 1602 39 21. While 
imports from China under tariff line 1602 39 40 increased sharply in 2011, the increase only 
occurred in 2011. In our view, this distinguishes the increase in  imports under tariff line 
1602 39 40 from the steady and continuous increase in imports under tariff lines 1602 39 29 and 
1602 39 80 over the period 2009 -2011. As set out above, China 's share of imports into the 
European Union under these two tariff lines increased steadily in 2009 (27.1% and 8.7%, 
respectively), 2010 (40.7% and 17 .6%, respectively), and 2011 (52.8% and 61.1%, respectively).  
7.370.   If the European Union was under an obligation to take into account the changes in import 
shares that occurred following the 2006 -2008 reference period on its own initiative and in the 
absence o f any related request by China until May 2012 , the issue that we will address below, we 
consider that the most recent data to be taken into account would have been from the data 
available to the European Union at the time that the negotiations with Thailan d and Brazil were 
concluded. According to the European Union, negotiations at the negotiators ' level were effectively 
concluded as of September 2011, and the draft agreements with Thailand and Brazil were initialled 
on 22 November 2011 and 7 December 2011,  respectively.  As China points out, the European 
Union did not notify the conclusion of the Article XXVIII negotiations until December 2012, after 
the bilateral agreements negotiated with Thailand and Brazil had been approved in accordance 
with each party 's respective internal procedures. However, as noted above, the European Union 
has explained how under EU law the approval of international agreements pursuant to 
Articles  XXVIII and XIII involves a rather complex process with different procedural stages, which 
usually takes more than one year. China has not contested that the negotiations at the 
negotiators ' level were already concluded in September 2011, or that the draft agreements 
initialled before the end of 2011.505  
7.371.   We understand that in September 2011 , the European Union would have had available 
preliminary import data on imports into the European Union covering approximately the first half 
of 2011.506 Based on the trade statistics that were available to the European Union at that time, 
the change in the  import trends under tariff lines 1602 39 29 and 1602 39 80 (the latter being 
merged with 1602 39 40, at the beginning of 2012, into 1602 39 85) would have already been 
apparent. While the parties have provided us with annual and not monthly import statist ics, 
China 's share of imports into the European Union in the year 2011 was 52.8% for 1602 39 29,  
and 61.1% for 1602 39 80. The trend over the period 2009 -2011 was similar in respect of each of 
                                               
504 See the import statistics in section 7.2.4 above . 
505 See footnote 128 above.  
506 In its response to Panel question No. 107(c), the Europ ean Union explains that "preliminary" import 
data " becomes generally available with a three -month delay". Thus, we understand that as of September 2011, 
the European Union had preliminary import data on imports into the European Union covering approximatel y 
the first half of 2011.   WT/DS492/R  
 
- 125 - 
 
  these tariff lines. Based on the foregoing, we consider that h ad the European Union been obliged 
to take into account the trend of the increased imports from China as of at least September 2011, 
that increase in China 's share of imports at that time would have required the European Union to 
recognize China as having a "substantial interest " within the meaning of Article XIII:2(d) with 
respect to tariff lines 1602 39 29 and 1602 39 80 (the latter being merged with 1602 39 40, at the 
beginning of 2012, into 1602 39 85) to reflect the increased imports from China.  
7.372.   Turning now to the question of whether the European Union was under a legal obligation to 
take into account the changes in import shares that occurred over the 2009 -2011 period, we have 
already concluded that, in the particular circumstances of this case, China 's increased ability to 
export poultry products under certain tariff lines following the relaxation of the SPS measures in 
July 2008 was a "special factor " within the meaning of Article XIII:2. An additional question that 
arises, however, is whether the Eu ropean Union was under an obligation to take this change in 
import shares into account on its own initiative, in the course of the negotiations with Thailand and 
Brazil, and in the absence of any related request from China until May 2012 .  
7.373.   We recall that C hina requested the European Union to enter into Article XXVIII negotiations 
in May 2012, claiming a principal supplying interest in all of the products at issue in the Second 
Modification Package. We recall that by May 2012, the two agreements with Thailan d and Brazil 
had already been initialled, and the domestic legal procedure to authorize their implementation 
was already underway. The European Union has raised the issue of the timeliness of China 's claims 
of a supplying interest in the context of respond ing to China 's claims that the European Union 
acted inconsistently with Article XXVIII:1. We have already concluded that for the purpose of 
assessing whether the European Union acted consistently with Article XXVIII:1, it is unnecessary 
for the Panel to ru le on whether its decision not to recognize China as a Member holding a principal 
or substantial supplying interest was justified by the absence of a timely claim of supplying 
interest by China.507 However, the European Union has also raised the issue of the  timeliness of 
China 's claims of a principal or substantial supplying interest in the context of Article XIII:2. 
Specifically, the European Union argues that while the 90 -day time -limit that applies for making a 
claim of supplying interest under Article XX VIII does "not apply to negotiations under 
Article  XIII:2 ", that deadline "is but one expression of a generally applicable due process 
requirement ".508 The European Union submits that "[o]nce a Member announces its intention to 
negotiate the opening of a TRQ , the Members claiming a SSI must have made known their claims 
within a reasonable period of time ".509 The European Union indicates that this is "[a]ll the more so 
when such claims are not based on import data for a previous period but on other evidence not 
immediately available to the Member opening the TRQ ".510 The European Union argues that in this 
case China failed to make its claims known within a reasonable period of time, and that the 
European Union "was not required to reopen the negotiations under Arti cle XIII:2 (d) already 
concluded with Brazil and Thailand in order to take into account China 's manifestly untimely 
claim ".511 
7.374.   In our view, the issue raised by the foregoing is whether the European Union was under an 
obligation to take into account the chang e in import shares that occurred over the 2009 -2011 
period on its own initiative in the course of its negotiations with Thailand and Brazil, in the absence 
of any related request from China being made prior to May 2012. We consider that the European 
Union was under such an obligation for the following reasons.  
7.375.   First, we are not persuaded by the European Union 's suggestion that once a Member 
announces its intention to negotiate the opening of a TRQ, other Members could be understood as 
waiving a claim of su bstantial supplying interest for the purpose of Article XIII if they do not make 
known "their claims within a reasonable period of time ".512 The European Union itself 
acknowledges that the Procedures for Negotiations under Article XXVIII, including the 90 -day 
time-limit mentioned in paragraph 4, do not apply to negotiations under Article XIII:2.513 There is 
no comparable provision in Article XIII:2(d) requiring a supplying Member to claim the status of a 
substantial supplier at all, let alone to make such a cla im within any prescribed time -limit. 
                                               
507 See section 7.4.3.3 above.  
508 EU's response to Panel question No. 69(b), para. 18.  
509 EU's response to Panel question No. 69(b), para. 18.  
510 EU's response to Panel question No. 69(b), para. 18.  
511 EU's response to Panel questio n No. 69(b), para. 18.  
512 EU's response to Panel question No. 69(b), para. 18.  
513 EU's response to Panel question No. 69(b), para. 18.  WT/DS492/R  
 
- 126 - 
 
  Furthermore, in the circumstances of this case, the European Union 's notification for the First 
Modification had put Members on notice that it intended to "replace with tariff rate quotas " the 
concessions at issue in th e First Modification Package .514 However , in the notification of its 
intention to modify the concessions for the poultry products covered by the Second Modification 
Package, the European Union did not put Members on notice that it intended to "replace with t ariff 
rate quotas " the concessions at issue.515 Thus, in the case of the Second Modification Package,  
nothing was disclosed to China as to whether the European Union would replace the concessions 
with TRQs, nor whether it would allocate TRQs among supplying countries, nor whether 
negotiations under Article XIII:2(d) would be conducted concomitantly with the negotiations under 
Article XXVIII.516 Moreover , given the requirement of secrecy that applies in Article XXVIII 
negotiations517, the Panel does not consider t hat China was in a position of being aware of what 
stage of the EU 's Article XXVIII negotiations were under way at any point in time prior to the 
notification of the conclusion of those negotiations in December 2012. Thus, China had no reason 
to claim subs tantial supplying interest status for the purpose of Article XIII:2(d) negotiations, nor 
to request any reappraisal of "special factors " by the European Union in the course of its ongoing 
negotiations with Thailand and Brazil.518  
7.376.   Secondly, the concept of "special factors which may have affected or which may be 
affecting the trade in the product concerned " appears to be an inherently dynamic concept, and 
thus it is not clear why an importing Member 's consideration of special factors would not be of an 
ongoing  nature in the course of the negotiations. Furthermore, if the reference period and 
appraisal of special factors was appraised only at the point in time when the negotiations 
commenced, and thereafter fixed, there would, in the words of the European Union,  "be very little 
to negotiate and agree about ".519 Where a TRQ is allocated by agreement, the subject -matter of 
the negotiations leading to that agreement would include negotiations on the selection of a 
previous representative period, and the extent to whic h there were any special factors to be taken 
into account. Thus, it may be presumed that those matters may be subject to ongoing discussion 
and reappraisal in the course of the negotiations, rather than being settled and fixed from the 
outset.  
7.377.     Finally, i n the present case, the "special factor " that we have found to exist was China 's 
increased ability to export poultry products under certain tariff lines following the relaxation of the 
SPS measures in July 2008. We recall that this manifested itself in a r apid and dramatic increase in 
Chinese poultry imports into the European Union under tariff lines 1602 39 29 and 1602 39 80 
(the latter being merged with 1602 39 40, at the beginning of 2012, into 1602 39 85) as 
evidenced by the import shares set out furthe r above. According to the European Union, 
negotiations at the negotiators' level concluded in September 2011 ; at that time, these 
developments in the preceding years cannot be regarded as a factual circumstance that the 
European Union would have been unawa re of in the absence of any request for reappraisal by 
China.  
7.378.   Based on the foregoing, we find that China has demonstrated that the increase in EU 
imports from China over the period 2009 -2011 following the relaxation of the SPS measures in 
July 2008 was a "special factor " that had to be taken into account by the European Union when 
determining which countries had a substantial interest in supplying the products concerned, and 
that the European Union acted inconsistently with Article XIII:2(d) by not recogniz ing China as a 
Member holding a "substantial interest in supplying the products " under tariff lines 1602 39 29 and 
1602 39 80520 and by failing to seek agreement with China on the allocation of the TRQs for those 
particular tariff lines. However, we find tha t the European Union did not act inconsistently with 
Article XIII:2(d) by failing to recognize China as holding a substantial interest in the other products 
concerned in the Second Modification Package (i.e. tariff lines 1602 32 11, 1602 32 30, 
1602 32 90, 1602 39 21, and 1602 39 40521). 
                                               
514 G/SECRET/25, p. 2 (Exhibit CHN -15). 
515 See G/SECRET/32 (Exhibit CHN -25).  
516 China's comments on the EU's response to Panel  question No. 69(b), para. 12.  
517 See paragraph  7.227 . 
518 China's comments on EU response to Panel question No. 69(b), para. 12.  
519 EU's first written submission, para. 226.  
520 Merged with tariff line 1602 39 40  into tariff line 16 02 39 85, effective 1  January 2012.  
521 Merged with tariff line 1602 39 80  into tariff line 1602 39 85, effective 1  January 2012.  WT/DS492/R  
 
- 127 - 
 
  7.7  Claims under the chapeau of Article XIII:2 of the GATT 1994  
7.7.1   Introduction  
7.379.   China claims that by allocating "all or the vast majority of the TRQs to two of the WTO 
Members " (i.e. Brazil and Thailand), the European Union acted in consistently with the chapeau of 
Article XIII:2.522 The basis for China 's claims under the chapeau of Article XIII:2 is that "even 
assuming that it was not "523 a Member with a substantial supplying interest, the allocation of TRQ 
shares agreed with Thailand an d Brazil does not comply with the requirements of the chapeau of 
Article XIII:2 vis -à-vis other WTO Members, including China, that were not recognized as having a 
substantial interest in supplying the products concerned.  
7.380.   China argues that all of the deter minations under Article XIII:2 must be based on a 
"previous representative period ", taking due account of "special factors which may have affected 
or may be affecting the trade in the product ".524 These determinations include not only the 
allocation of TRQ s hares vis -à-vis substantial suppliers under Article XIII:2(d) in accordance with 
the second sentence of Article XIII:2(d) and the determination of which Members are substantial 
suppliers under Article XIII:2(d), but also the allocation of TRQ shares vis -à-vis Members not 
recognized as having a substantial interest.525 In this case, China argues that the reference periods 
upon which the European Union made those determinations were not "representative "526, and that 
China 's reduced ability to export as a result o f import bans due to SPS measures, as well as the 
increased ability to export after the relaxation of the bans in July 2008, were "special factors " that 
had to be taken into account.527 With respect to both the First and Second Modification Package s, 
China c laims that the European Union should have determined the TRQ shares allocated to "all 
others"  based on an estimate of the share of imports that China would have had in the absence of 
the SPS measures that restricted Chinese poultry imports over the referen ce periods used.528 With 
respect to the Second Modification Package, China additionally claims that the European Union 
should have determined the TRQ shares allocated to "all others"  taking into account the increase in 
poultry imports from China over the 200 9-2011 period, which China considers to be the most 
recent three -year period preceding the determination of the TRQs.529 Finally, China claims that the 
European Union was in any event under an obligation to allocate an "all others " share of at least 
10% for each of the TRQs under the First and Second Modification Package s, so as to enable at 
least one other Member to achieve a substantial interest in supplying the products.530   
7.381.   The European Union responds that China 's claims rest on an incorrect interpretation  of the 
obligations in Article XIII:2.531 We understand the European Union to accept that, although the 
general rule in the chapeau of Article XIII:2 does not explicitly require that "special factors " 
affecting non -substantial suppliers be taken into account , the chapeau of Article XIII:2 may be 
violated if a TRQ allocation disregards a "special factor " affecting one or more non -substantial 
suppliers, in a manner that was biased against non -substantial suppliers.532 However, the 
European Union considers that th e SPS measures mentioned by China are not "special factors " 
within the meaning of Article XIII:2, and that it was therefore under no obligation to allocate a 
greater "all others " TRQ share on the basis of an estimate of what China 's share of imports into 
                                               
522 China's first written submission, paras. 169 -207; China's opening statement at the first meeting of 
the Panel, paras. 85 -103; China's responses to Panel question Nos. 41 -43; China's second written submission, 
paras. 140 -171; China's opening statement at the second meeting of the Panel, paras. 66 -75; parties' 
responses, and comments on one another's responses, to Panel question No s. 69, 72 -74, 86 -90, 106 -109, 
111-120. 
523 China's second written submission, para. 144.  
524 China's second written submission, para. 145.  
525 China 's first written submission, para. 171; China's second written submission, para. 141.  
526 China's second written sub mission, para. 151.  
527 China's first written submission, paras. 193 -194. See also China's response to Panel question 
No. 119, para. 108.  
528 China's first written submission, paras. 197, 199, 201; China's second written submission, paras. 
147, 159 -160.  
529 China's first written submission, para. 198; China's second written submission, para. 160.  
530 China 's first written submission, paras. 212 -216.  
531 EU's first written submission, paras. 210 -237; EU's opening statement at the first meeting of the 
Panel, paras. 2 0-25; EU's responses to Panel question Nos. 39 -40, 42, 44; EU's second written submission, 
paras. 114 -152; opening statement at the second meeting of the Panel, paras. 63 -96; parties' responses, and 
comments on one another's responses, to Panel question No s. 69, 72 -74, 86 -90, 106 -109, 111 -120. 
532 EU's response to Panel question No. 118(b), para. 118.  WT/DS492/R  
 
- 128 - 
 
  the European Union would have been in the absence of the SPS measures. 533 The European Union 
also rejects China 's claim that in respect of the Second Modification Package, it was required to 
allocate TRQ shares based on more recent data regarding imports ove r the period 2009 -2011.534 
Finally, the European Union submits that there is no legal obligation in Article XIII:2 to always 
allocate an "all others " share of a minimum amount, independently from the import data over the 
reference period.535 
7.7.2   Relevant provision s  
7.382.   We recall that the chapeau of Article XIII:2 provides that:  
In applying import restrictions to any product, Members shall aim at a distribution of 
trade in such product approaching as closely as possible the shares which the various 
Members might be exp ected to obtain in the absence of such restrictions and to this 
end shall observe the following provisions…  
7.383.   The chapeau states that Members "shall aim at a distribution of trade  […] approaching as 
closely as possible the shares which the various Members mi ght be expected to obtain in the 
absence of such restrictions ". The wording of the chapeau ( "shall") suggests that it contains a 
binding obligation, and this is reinforced by the fact that the Ad Note to Article XIII:2(d) refers to 
the chapeau as containin g a "general rule ". In this case, the parties agree that the chapeau of 
Article XIII:2 imposes a mandatory legal obligation that must be respected when allocating a TRQ 
among supplying countries. In that sense, we understand the European Union to agree wit h China 
that the chapeau of Article XIII:2 "states a general rule capable of being violated separately from 
the provisions of Article XIII:2(d) ".536   
7.384.   We see no reason to disagree with the parties, taking into account that in several prior 
cases, panels or t he Appellate Body have upheld claims of violation based on the chapeau of 
Article XIII:2.537 In US – Line Pipe , the panel found that the measure at issue was "not consistent 
with the general rule contained in the chapeau of Article XIII:2 because it has been  applied 
without respecting traditional trade patterns ".538 The panel stated that:  
In our view, the chapeau of Article XIII:2 contains a general rule, and not merely a 
statement of principle. This is confirmed by the Note Ad Article XIII:2, which refers to 
"the general rule laid down in the opening sentence of paragraph 2 ".539 
7.385.   This understanding is further confirmed by the Appellate Body 's finding that 
Article  XIII:2(d) is a permissive "safe harbour " only insofar "as substantial suppliers are 
concerned ", and th at a Member allocating shares to substantial suppliers in accordance with 
Article  XIII:2(d) "must also respect the requirement in the chapeau of Article XIII:2 ".540 We 
understand this to mean that the general rule in the chapeau of Article XIII:2 contains a legal 
requirement relating to the allocation of TRQ shares among supplying countries that is capable of 
being violated separately from the provisions of Article XIII:2(d). We understand the parties to 
agree on this point as well. Specifically, the European  Union agrees with China that, even where 
the allocation of TRQ shares among supplying countries has been agreed with the substantial 
suppliers in accordance with Article XIII:2(d), this does not necessarily mean that the TRQ 
                                               
533 EU's first written submission, para. 232; EU's second written submission, paras. 114 -132. 
534 EU's response to Panel question No. 106(a), para. 77; EU's respons e to Panel question No. 109(b), 
para. 90.  
535 EU's first written submission, paras. 250 -266; EU's second written submission, para. 141.  
536 EU's response to Panel question No. 40, paras. 114 -116. 
537 Appellate Body Report, EC – Bananas III , para. 163; Panel Repo rt, US – Line Pipe , para. 7.55; 
Appellate Body Reports, EC – Bananas III (Art. 21.5 – Ecuador II)  / EC – Bananas III (Art. 21.5 – US), 
para. 353. 
538 Panel Report, US – Line Pipe , para. 8.1(1).  
539 Panel Report, US – Line Pipe , footnote 64.  
540 Appellate Body Re ports, EC – Bananas III (Article 21.5 – Ecuador II)  / EC – Bananas III (Article 21.5 
– US), para. 338 and fn 408.  WT/DS492/R  
 
- 129 - 
 
  allocation complies with the g eneral rule in the chapeau in respect of the non -substantial 
suppliers.541  
7.7.3   Analysis by the Panel  
7.386.   Turning to the issues in dispute, w e understand China 's clai ms under the chapeau of 
Article  XIII:2 to rest on three different grounds, raising the following is sues. First, whether the 
European Union was obliged to determine the TRQ shares allocated to "all others" on  the basis of 
an estimate of what import shares would have been in the absence of the SPS measures. Second, 
whether the European Union was obliged t o determine the TRQ shares allocated to "all others" 
taking  into account changes in import shares that occurred in the course of the negotiations 
regarding the total amount of the TRQs and their allocation among supplying countries. Third, 
whether the Euro pean Union was under an obligation to allocate an "all others " share of at least 
10% for each of the TRQs, so as to enable at least one other Member to achieve a substantial 
supplying interest.  
7.387.   We will examine these issues in turn. Before doing so, howeve r, we will explain our 
approach to examining China 's claims under Article XIII:2(d) and the chapeau of Article XIII:2, 
and then address the interpretative issue of the relevance of "special factors " in the determination 
of whether the allocation of the TRQ shares to "all others " complies with the general rule in the 
chapeau of Article XIII:2. This interpretative issue relates to China 's first and second claims of 
violation under the chapeau of Article XIII:2.   
7.7.3.1   Separate analysis of China 's claims under Arti cle XIII:2(d) and the chapeau of 
Article XIII:2  
7.388.   In this case, China has advanced one set of claims of violation under Article XIII:2(d), and 
another set of parallel claims of violation under the chapeau of Article XIII:2. As explained in the 
context of our  evaluation of China 's claims under Article XIII:2(d), these appear to be claims in the 
alternative, insofar as China 's claims under Article XIII:2(d) are directed at establishing that it was 
a Member with a substantial supplying interest, whereas its clai ms under the chapeau of 
Article  XIII:2 are "even assuming that it was not ".542 
7.389.   In examining China 's claims under Article XIII:2(d),  we have already found that the 
European Union acted inconsistently with Article XIII:2(d) by refusing to recognize China as a 
Member holding a "substantial interest in supplying the products " under tariff lines 1602 39 29 and 
1602 39 80 (the latter being merged with 1602 39 40, at the beginning of 2012, into 1602 39 85) 
and by failing to seek agreement with China on the allocatio n of the TRQ shares for those 
particular tariff lines. Given these findings, we recognize that it may not be strictly necessary for 
the Panel to proceed to assess China 's alternative claims of violation under the chapeau of 
Article  XIII:2, insofar as they rest on the same grounds.  
7.390.   However, it  is well established that panels have the discretion to address arguments and 
make additional findings beyond those strictly necessary to resolve a particular claim or 
defence.543 These could include, for example, altern ative findings that could serve to assist the 
                                               
541 EU's response to Panel question No. 39, para. 111; EU's opening statement at the second meeting of 
the Panel, paras. 68 -69. 
542 China's second  written submission, para. 144.  
543 The Appellate Body has confirmed that "[j]ust as a panel has the discretion to address only those 
claims which must be addressed in order to dispose of the matter at issue in a dispute, so too does a panel 
have the discret ion to address only those arguments it deems necessary to resolve a particular claim" 
(Appellate Body Report, EC – Poultry , para.  135). (emphasis original) The logical corollary of this proposition is 
that a panel has the discretion based on the circumstan ces of each case to address certain claims and 
arguments even where it is not strictly necessary to do so to resolve the matter at issue. We observe that 
Article 11 of the DSU provides that a panel should make an objective assessment of the matter before i t, "and 
make such other findings as will assist the DSB in making the recommendations or in giving the rulings 
provided for in the covered agreements". While Article 11 does not specify what "such other findings" might 
include, the Appellate Body has confi rmed that panels have the discretion to make alternative findings, 
including alternative factual findings (Appellate Body Reports, US – Softwood Lumber IV , para. 118; Canada – 
Wheat Exports and Grain Imports , para. 126; China – Auto Parts , para. 208; US – Carbon Steel (India) , 
para. 4.274; and India – Solar Cells , para. 5.152. See, e.g. Panel Reports, India – Patents (US), paras. 6.11 -
6.12 and 7.44 -7.50; Canada – Dairy , para. 7.119; EC – Bed Linen (Article 21.5 – India) , paras. 6.234 -6.246; WT/DS492/R  
 
- 130 - 
 
  Appellate Body in completing the legal analysis should it disagree with legal interpretations 
developed by a panel.544 A panel may be guided by a range of different considerations when 
deciding whether to address  arguments beyond those strictly necessary to resolve the matter545, 
and the manner in which a panel may do so, including the scope and nature of any such other 
alternative findings, may also vary depending on the issues before the panel.546 
7.391.   In this case, we c onsider it appropriate to make findings on all of China 's claims under the 
chapeau of Article XIII:2. In assessing China 's claims under the chapeau of Article XIII:2, we are 
presented with some issues that we have not already addressed in the context of ou r examination 
of China 's claims under Article XIII:2(d). This includes, most notably, the relevance of the notion 
of "special factors which may have affected or may be affecting the trade in the product " in the 
determination of whether the allocation of TRQ shares to "all others " complies with the general 
rule in the chapeau of Article XIII:2. However, some of the arguments presented by the parties in 
relation to China 's claims under the chapeau of Article XIII:2 reiterate arguments that were also 
advanced,  and that we have already addressed, in the context of China 's claims under 
Article  XIII:2(d). To avoid addressing the same arguments multiple times, our analysis of China 's 
claims under the chapeau of Article XIII:2 will focus on those arguments and inter pretative 
elements that are specific to the chapeau of Article XIII:2, and that we have not already addressed 
in the context of our findings, in the previous section of this Report, under Article XIII:2(d).  
7.7.3.2   Relevance of "special factors " in the determinat ion of whether the allocation of 
TRQ shares to "all others " complies with the general rule in the chapeau of Article XIII:2  
7.392.   We observe that reference to a "previous representative period " and "special factors " is 
made only in the second sentence of Articl e XIII:2(d), in the context of the unilateral allocation of 
TRQ shares among substantial suppliers. These terms are not referred to in the chapeau of 
Article  XIII:2, which refers in more general terms to an obligation to "aim at a distribution of trade 
in such product approaching as closely as possible the shares which the various Members might be 
expected to obtain in the absence of such restrictions ". The chapeau does not specify the criteria 
by which one judges what shares the various Members might be ex pected to obtain in the absence 
of the TRQ547, but the chapeau also states that "to this end " Members "shall observe the following 
provisions " set forth in sub -paragraphs (a) through (d) of Article XIII:2. Thus, these provisions 
must inform the interpretatio n of the chapeau.  
7.393.   The parties agree that a TRQ allocation agreed among substantial suppliers could 
nonetheless be inconsistent with general rule in the chapeau vis -à-vis non -substantial suppliers, at 
least insofar as a TRQ allocation was not based on actua l import shares held by different countries 
during a "previous representative period " and taking due account of "special factors ", in such a 
way that was biased against one or more non -substantial suppliers.548 China considers that these 
legal criteria set f orth explicitly in Article XIII:2(d) "form context for satisfying the chapeau of 
Article XIII:2 as regards WTO Members that hold no substantial supplying interest ".549 The 
European Union considers that "to remain reasonable and fair the method agreed with th e 
substantial suppliers should also be applied to non -substantial suppliers and should be based on 
objective and unbiased criteria ", and that "a method that disregards special factors affecting any 
of the suppliers of a given product would not be objective  as it would be biased against the 
suppliers affected by those factors and in favour of the others ".550 On that basis, the European 
Union accepts that although the chapeau of Article XIII:2 "does not require explicitly to take into 
consideration special fact ors affecting non -SSI Members it would appear that if the TRQ is 
                                                                                                                                               
US – Corrosion -Resistant Steel Sunset Review , paras. 7.172 -7.184; China – Auto Parts , fn 641 to para. 7.371; 
EC and certain member States – Large Civil Aircraft , para. 7.224; China – Raw Materials , paras. 7.229 -7.230; 
China – Rare Earths , para. 7.140; and US – COOL (Artic le 21.5 – Canada and Mexico) , paras. 7.672).  
544 See, e.g. Appellate Body Reports, US – Softwood Lumber IV , para. 118; US – Tuna II 
(Mexico) ,para.  405. 
545 See, e.g. Panel Reports, Canada – Dairy , para. 7.119, and China – Auto Parts , fn 641 to para. 7.371.  
546 See, e.g. Panel Reports, US – COOL (Article 21.5 – Canada and Mexico) , paras. 7.672.  
547 John Jackson, World Trade and the Law of GATT  (Bobbs -Merrill Company, Inc., 1969) p. 323.  
548 China's first written submission, paras. 186 -188; China's response to Panel qu estion No. 41(a), para. 
10; EU's opening statement at the second meeting of the Panel, para. 72; EU's response to Panel question No. 
118. 
549 China's response to Panel question No. 41(a), para. 10.  
550 EU's response to Panel question No. 118(a), paras. 115 -116. WT/DS492/R  
 
- 131 - 
 
  allocated on the basis of a method that disregards a special factor affecting one or more non -
substantial suppliers, that method would not contribute to attain the objective of the chapeau ".551  
7.394.   We see no reason to disagree with the parties. Indeed, we consider that this interpretation 
is supported by the Appellate Body 's clarification of the relationship between Article XIII:2(d) and 
the chapeau of Article XIII:2. When allocating a TRQ among su pplying countries, the amount of 
any "all others " share allocated to non -substantial suppliers will be the amount of the TRQ that has 
not been allocated among substantial suppliers. The Appellate Body has found that 
Article  XIII:2(d) is a permissive "safe harbour " only insofar "as substantial suppliers are 
concerned ", and that a Member allocating shares to substantial suppliers in accordance with 
Article  XIII:2(d) "must also respect the requirement in the chapeau of Article XIII:2 ".552  This 
supports the unde rstanding that a TRQ allocation agreed among substantial suppliers could be 
inconsistent with the rights of non -substantial suppliers under the general rule in the chapeau of 
Article XIII:2 insofar as the basis for the allocation, as agreed by the substant ial suppliers, was not 
based on a "previous representative period " or did not take due account "special factors ", in a 
manner that was biased against one or more non -substantial suppliers.  
7.395.   In addition, without making express reference to any "special fact ors which may have 
affected or may be affecting trade in the product ", we note that the panel in US – Line Pipe 
suggested that "changed circumstances " may need to be taken into account in the context of 
evaluating a TRQ allocation under the chapeau of Arti cle XIII:2. The panel was of the view that:  
In our view, Korea is correct to argue that a Member would violate the general rule 
set forth in the chapeau of Article XIII:2 if it imposes safeguard measures without 
respecting traditional trade patterns (at le ast in the absence of any evidence 
indicating that the shares a Member might be expected to obtain in the future differ, 
as a result of changed circumstances , from its historical share). Trade flows before the 
imposition of a safeguard measure provide an o bjective, factual basis for projecting 
what might have occurred in the absence of that measure.553 (emphasis added)  
7.396.   Based on the foregoing, we consider that to comply with the obligation in the chapeau of 
Article XIII:2, "special factors which may have affec ted or may be affecting trade in the product " 
cannot be disregarded in the determination of the TRQ shares allocated to "all others " in a manner 
that would be biased against one or more non -substantial suppliers. We consider that this 
interpretation reflec ts a harmonious interpretation of the chapeau of Article XIII:2 and paragraph 
(d), and is in line with the Appellate Body 's prior statements regarding their relationship. Under 
this interpretation, the general rule in the chapeau of Article XIII:2 serves t o protect the rights and 
interests of Members that are not recognized as having a substantial supplying interest under 
Article XIII:2(d).  
7.7.3.3   Whether the European Union was obliged to allocate a greater TRQ share to "all 
others " based on an estimate of what t heir import shares would have been in the 
absence of the SPS measures   
7.397.   China claims that where SPS import bans are imposed, the period of application of these 
import bans cannot be used as a previous "representative " period for the purpose of the TRQ 
allocation. In addition, China argues that "its reduced ability to export as a result of import bans 
due to SPS measures " was a "special factor that affected trade in the products concerned ", and 
that had to be taken into account by the European Union. With re spect to both the First and 
Second Modification Package s, we understand China to claim that the European Union acted 
inconsistently with the chapeau of Article XIII:2(d) by not allocating a greater "all others " share on 
the basis of an estimate of the shar e of imports that China would have had in the absence of the 
SPS measures.  
7.398.   In the context of examining China 's parallel claim under Article XIII:2(d), we found that 
the European Union did not act inconsistently with Article XIII:2(d) by basing its determin ations of 
which Members were substantial suppliers on their actual share of imports into the E uropean 
                                               
551 EU's response to Panel question No. 118(b), para. 118.  
552 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II)  / EC – Bananas III (Article 21.5 
– US), para. 338 and fn 408.  
553 Panel Report, US – Line Pipe , para. 7.54.  WT/DS492/R  
 
- 132 - 
 
  Union , rather than on the basis of on an estimate of the share of imports that China would have 
had in the absence of the SPS measures. We consider that o ur reasoning and conclusion applies 
mutatis mutandis  to China 's alternative claim under the chapeau of Article XIII:2.  
7.399.   Based on the foregoing, we find that China has not demonstrated that the European Union 
acted inconsistently with the chapeau of Article  XIII:2 by determining the TRQ shares allocated to 
"all others"  on the basis of the actual share of imports into the European Union , rather than on the 
basis of an estimate of what import shares would have been in the absence of the SPS measures 
restrictin g poultry imports from China.  
7.7.3.4   Whether the European Union was obliged to allocate a greater TRQ share to "all 
others " taking into account changes in import shares following the initiation of the 
negotiations on TRQ share allocations    
7.400.   With respect to the S econd Modification Package, we understand China to claim that the 
European Union acted inconsistently with the chapeau of Article XIII:2 by not allocating a greater 
share of the TRQs to "all others " to take into account the increase in imports over the pe riod 
2009-2011 from countries that were not recognized as having a substantial interest (including, and 
largely accounted for by, China).  
7.401.   In the context of examining China 's parallel claim under Article XIII:2(d), we found that 
the changes in the import sh ares held by different Members which occurred between the end of 
the representative period selected and the time of the TRQ being allocated, which were a 
consequence of China 's increased ability to export certain poultry products into the European 
Union fo llowing the relaxation of the SPS measures in July 2008, qualified as a "special factor … 
affecting trade in the product " within the meaning of Article XIII:2(d).  We further found that this 
special factor had to be taken into account for the purpose of de termining which Members held a 
"substantial interest " for the purpose of the first sentence of Article XIII:2(d).  We found that the 
European Union was obliged to take into account the trend of the increased imports from China, 
and the resulting change in import shares  at the time negotiations with Brazil and Thailand 
concluded at negotiators level, in September 2011 . In our view, those aspects of the Panel 's 
reasoning in the context of Article XIII:2(d) apply mutatis mutandis  to China 's alternative claim 
under the chapeau of Article XIII:2, regarding the determination of the size of the "all others " 
shares for the TRQs.   
7.402.   The separate issue that arises in the context of examining China 's claims under the 
chapeau of Article XIII:2 is whether the TRQ shares a llocated to "all others" in the Second 
Modification Package reflects the data showing the trend of the increased imports from China, and 
the resulting change in import shares, that would have been available to the European Union in 
September 2011.  
7.403.   Based on  the trade statistics provided by the parties, the actual share of imports into the 
European Union held by countries that were not allocated a country -specific share in the particular 
TRQ in question554 was the following : 
 
 
                                               
554 See the  import sta tistics in section 7.2.4 above. In the case of tariff line 1602 32 11, "Others" 
includes all countries other than Brazil (the only country allocated a country -specific share in this TRQ). In the 
case of tariff lines 1602 32 30 and 1602 32 90, "Others" incl udes all countries other than Brazil and Thailand 
(both of which were allocated their own country -specific shares in these two TRQs). In the case of tariff lines 
1602 39 21, 1602 39 29, 1602 39 40, and 1602 39 80, "Others" includes all countries other than  Thailand (the 
only country allocated a country -specific share in these four TRQs).  WT/DS492/R  
 
- 133 - 
 
  Tariff line  Share of 
imports by 
countries in 
the "Others " 
category into 
the EU in 
2006 -2008 
(average)  Share of 
imports by 
countries 
in the 
"Others " 
category 
into the EU 
in 2009  Share of 
imports by 
countries in 
the "Others " 
category into 
the EU in 
2010  Share of 
imports by 
countries in 
the "Others " 
category into 
the EU in 
2011  TRQ share 
allocation  
1602 32 11  2.83%  0.3%  0.7%  3.3%  Brazil:  97.89%  
Others : 2.11%  
 
1602 32 30  0.76%  1.1%  1.5%  1.3%  Brazil:  78.92%  
Thailand : 17.56%  
Others : 3.51%  
 
1602 32 90  7.7%  4.5%  2.0%  3.1%  Brazil : 10.3%  
Thailand : 73.3%  
Others : 16.4%  
 
1602 39 21  0.0%  0.0%  0.0%  0.0%  Thailand : 100%  
Others : 0.0%  
 
1602 39 29  1.1%  27.2%  42.8%  53.1%  Thailand : 98.4%  
Others : 1.6%  
 
1602 39 40  3.3%  4.9%  0.0%  25.3%  Thailand : 80.21%  
Others : 19.79%  
 
1602 39 80  18.3%  11.3%  21.2%  61.2%  Thailand: 82.76%  
Others : 17.24%  
 
 
7.404.   We have already identified a number of issues with respect to the trade statistics provided 
by the parties, and we therefore approach them with an appropriate degree of caution.555 
However, it is clear that over the period 2009 -2011, imports from countries that were not 
allocated a country -specific share (including and largely accounted for by China) had increased 
significantly under tariff lines 1602 39 29 and 1602 39 80 (the latter being merged with 1602 39 
40, at the beginning  of 2012, into 1602 39 85). Imports from countries that were not allocated a 
country -specific share (including China) under most of the other tariff lines in the Second 
Modification Package remained at zero or negligible levels, as some or all of these pro ducts 
remained prohibited. Accordingly, as in the case of Article XIII:2(d), we see no basis for find ing 
any violation of the chapeau of Article XIII:2 in respect of the TRQ for tariff lines 1602 32 11, 1602 
32 30, 1602 32 90, or 1602 39 21. While imports from countries that were not allocated a 
country -specific share (including and largely accounted for by China) under tariff line 1602 39 40 
increased as well, the increase only occurred in 2011. In our view, this distinguishes the increase 
in imports under  tariff line 1602 39 40 from the steady and continuous increase in imports under 
tariff lines 1602 39 29 and 1602 39 80 over the period 2009 -2011. As set out above, imports from 
countries that were not allocated a country -specific share (including and larg ely accounted for by 
China) into the European Union under these two tariff lines increased steadily in 2009 (27.2% and 
11.3%, respectively), 2010 (42.8% and 21.2%, respectively), and 2011 (53.1% and 61.2%, 
respectively).  
7.405.   We recall our understanding that in September 2011, the European Union had preliminary 
import data on imports into the European Union covering approximately the first half of 2011. 
Based on the trade statistics that were available to the European Union as of that time, the change 
in the imp ort trends under tariff lines 1602 39 29 and 1602 39 80 was already apparent. While the 
parties have provided us with annual and not monthly import statistics, the share of imports by 
countries in the "all others " category into the European Union in 2011 w as 53.1% for 1602 39 29, 
and 61.2% for 1602 39 80.  
7.406.   Based on the foregoing, we find  that China has demonstrated that the increase in imports 
from China over the period 2009 -2011 following the relaxation of the SPS measures in July 2008 
was a "special facto r" that had to be taken into account by the European Union when determining 
                                               
555 See section  7.2.4 above.  WT/DS492/R  
 
- 134 - 
 
  the TRQ shares allocated to "all others" , and that the European Union acted inconsistently with the 
chapeau of Article XIII:2 by not allocating a greater "all others " share under tariff lines 1602 39 29 
and 1602 39 80 (the latter tariff line was merged with tariff line 1602 39 40 into tariff line 1602 39 
85, effective 1 January 2012).  
7.7.3.5   Whether the European Union was under an obligation to allocate an "all others " 
share of at least 1 0% for each of the TRQs under the First and Second Modification 
Package s 
7.407.   We turn now to China 's third claim under the chapeau of Article XIII:2, which rests on an 
additional, alternative line of argumentation from that which we have just considered. China 
interprets Article XIII:2 as requiring a Member imposing a TRQ to always allocate a share to "all 
others ", independently from the factual situation considered, and without regard to the import 
data over the reference period.556 According to China, "the all o thers share should be at a level 
that allows at least one Member within that group to reach SSI status if its products are 
sufficiently competitive ".557 China argues that because the European Union recognizes a country as 
a substantial supplier only if it ac counts for 10 % of imports in the product concerned, the 
European Union was accordingly required to allocate at least 10 % of each TRQ to "all others ".558  
7.408.   China claims that the TRQ for all other countries for several of the tariff headings 
concerned is below a share of 10 %, and this is in violation of the general rule in the chapeau of 
Article XIII:2.559 We understand China 's claims to include, in this regard, the six TRQs under the 
First and Second Modification Packages for which the "all others " share was less  than 10 %. These 
TRQs include 0210 9939 (0.31%), 1602 32 19 (4.56%), 1602 32 11 (2.11%), 1602 32 30 
(3.51%), 1602 39 21 (0.0%), and 1602 39 29 (1.6%).  
7.409.   We begin our analysis with the text of the provision at issue. The chapeau of Article XIII:2 
requires th at the allocation of TRQ shares approach "as closely as possible the shares which the 
various Members might be expected to obtain in the absence of such restrictions ". We see nothing 
in the terms of the chapeau of Article XIII:2 establishing an obligation to allocate a minimum share 
to an "all others " category in a TRQ. To the contrary, establishing an "all others " share in a TRQ 
without regard to the actual import shares held over a previous representative period would  be at 
odds with the general rule that  TRQ shares should be allocated in a way that approaches "as 
closely as possible the shares which the various Members might be expected to obtain in the 
absence of such restrictions ". In this regard, we agree with the panel in US – Line Pipe  that: 
[A] Memb er would violate the general rule set forth in the chapeau of Article XIII:2 if 
it imposes safeguard measures  without respecting traditional trade patterns  (at least 
in the absence of any evidence indicating that the shares a Member might be 
expected to ob tain in the future differ, as a result of changed circumstances, from its 
historical share). Trade flows before the imposition of a safeguard measure provide an 
objective, factual basis for projecting what might have occurred in the absence of that 
measure .560 (emphasis added)  
7.410.   Furthermore, we consider that an obligation to allocate a minimum share to "all others " 
irrespective of actual historical import levels would conflict with the obligation in the second 
sentence of Article XIII:2(d). This could have been the case if the European Union had , for 
example,  allocate d an "all others" share for tariff line 1602 39 21, in respect of which there have 
been no imports from any Member other than Thailand since 2001.  The text of Article XIII:2(d), 
second sentence,  mandates that when allocating TRQ shares in cases where it is not practicable to 
reach agreement with all substantial suppliers, the importing Member must allocate "the product 
shares based on the proportions, supplied by such Members during a previous repres entative 
period… ".   
                                               
556 China's second written submission, para. 146.  
557 China's opening statement at the second meeting of the Panel, para. 65. See also China's respon se 
to Panel question No. 88, and China's response to the EU's question No. 3.  
558 China's response to Panel question No. 71(c), para. 30.  
559 China's first written submission, para. 216.  
560 Panel Report, US – Line Pipe , para. 7.5 4.  WT/DS492/R  
 
- 135 - 
 
  7.411.   China relies on two statements made by the Appellate Body in EC – Bananas III 
(Article  21.5 – Ecuador II) / EC – Bananas III (Article  21.5 – US) in support of its contention that a 
Member allocating a TRQ among supplying countries must  always allocate a share to the "all 
others " category large enough to enable at least one Member to achieve a substantial supplying 
interest. First, China refers to the Appellate Body 's statement that:  
If a Member allocates quota shares to Members with a s ubstantial interest in 
supplying the product, in accordance with Article XIII:2(d), it must also respect the 
requirement in the chapeau of Article XIII:2  - that distribution of trade approach as 
closely as possible the shares that Members may be expected t o obtain in the absence 
of the restriction. This is usually done  by allocating a share to a general "others " 
category for all suppliers other than Members with a substantial interest in supplying 
the product.561 (emphasis added)  
7.412.   We do not read the words "[t]his is usually done " in this passage to mean or imply that 
there is an obligation "to allocate always a share to 'all others ' … independently from the factual 
situation considered, and notably the import data over the reference period ".562 It appears to us 
that when the Appellate Body stated that "allocating a share to a general 'others ' category for all 
suppliers other than Members with a substantial interest " is what is "usually done ", the Appellate 
Body was merely stating that when  Members allocate TRQ sha res to non -substantial suppliers, that 
is "usually done " through an "all others " share, as opposed to being done through individual, 
country -specific allocations for all other countries.  
7.413.   The underlying panel report in  EC – Bananas III (Article  21.5 – Ecuador) had explained this 
point as follows:  
The general rule laid down in Article XIII:2 of GATT requires Members to "aim at a 
distribution of trade … approaching as closely as possible the shares which the various 
Members might be expected to obtain in the absence of such restrictions ".  To this 
end, where the option of allocating a tariff quota among supplying countries is chosen, 
Article XIII:2(d) provides that allocations of shares (i.e. country -specific allocations for 
substantial suppliers; and a global  allotment in an "other " category for non -substantial 
suppliers unless country -specific allocations are allotted to each and every non -
substantial supplier ) should be based upon the proportions supplied during a previous 
representative period.563 (emphasis a dded)  
7.414.   This explanation by the panel in EC – Bananas III (Article  21.5 – Ecuador)  followed on 
from an earlier, and even more detailed explanation of the same point by the original panel in EC – 
Bananas III . That panel explained why it is more practicable t o allocate a share to an "all others " 
category, rather than giving every country its own country -specific share corresponding to its 
historical import levels:  
[I]f a Member wishes to allocate shares of a tariff quota to some suppliers without a 
substantial  interest , then such shares must be allocated to all such suppliers. 
Otherwise, imports from Members would not be similarly restricted as required by 
Article XIII:1. As to the second point, in such a case it would be required to use the 
same method as was used to allocate the country -specific shares to the Members 
having a substantial interest in supplying the product, because otherwise the 
requirements of Article XIII:1 would also not be met.  
The allocation of country -specific  tariff quota shares to all supplying countries on the 
basis of the first method (agreement) may in practice be difficult since there will likely 
be demand for more than 100 per cent of the tariff quota and, furthermore, there 
would be no possibility to make provision for new suppliers . This would leave the 
second method as the only practical alternative - a result that, however, runs counter 
to the provision of Article XIII:2(d) to first seek agreement with all Members having a 
substantial interest in supplying the product concerned.  
                                               
561 Appellate Body Report, EC – Bananas III (Article  21.5 – Ecuador II) / EC – Bananas III (Article  21.5 
– US), footnote 408.  
562 China's second written submission, para. 146.  
563 Panel Report, EC – Bananas III (Article  21.5 – Ecuador) , para. 6.27.  WT/DS492/R  
 
- 136 - 
 
  The consequence of the foregoing analysis is that Members may be effectively 
required to use a general "others " category for all suppliers other than Members with 
a substantial interest in supplying the product.564 (emphasis added)  
7.415.   In addition, we note that i mmediately after making the statement as to how the allocation 
of TRQs shares is "usually done ", the Appellate Body proceeded to find a violation of Article XIII:2 
in that case on the grounds that the TRQ at issue was not "based on the respective shares of  the 
ACP and non -ACP supplier countries in the European Communities ' banana market ".565 Thus, the 
Appellate Body found a violation based on the fact that the TRQ allocation did not reflect actual 
market shares. China has not identified any prior WTO panel or  Appellate Body report that found a 
violation of Article XIII:2 based on a failure to set aside a minimum "all others " share, irrespective 
of actual imports shares held during the reference period.  
7.416.   China relies on a second statement from EC – Bananas III (Article 21.5 – Ecuador II) / EC 
– Bananas III (Article 21.5 – US) in support of its argument. In that case, the Appellate Body 
interpreted the terms of the EC Schedule and the Bananas Framework Agreement to mean that 
the TRQ allocation agreed in 1994 was set to expire in 2002, but not the concessions in the EU 
Schedule establishing the total amount of the TRQ. The Appellate Body observed that this reading 
of Section  I-B of the European Communities ' Schedule and, specifically, of paragraph 9 of the 
Bananas Framework Agreement, was consistent with Article  XIII:2(d) and Article  XIII:4. In 
connection with Article XIII:4, the Appellate Body recalled the statement by the original panel in 
EC – Bananas III , that:  
[A]lthough the EC reached an agreement with all Mem bers who had a substantial 
interest in supplying the product at one point in time, under the consultation 
provisions of Article  XIII:4, the EC would have to consider the interests of a new 
Member who had a substantial interest in supplying the product if t hat new Member 
requested it to do so.  The provisions on consultations and adjustments in Article 
XIII:4 mean in any event that the [Bananas Framework Agreement] could not be 
invoked to justify a permanent allocation  of tariff quota shares. 566 (emphasis add ed) 
The Appellate Body then stated that, in its view, paragraph 9 of the Bananas Framework 
Agreement reflected the requirements of Article  XIII:4.  
7.417.   China reads this passage from the Appellate Body to mean that Article XIII:4 prohibits a 
"permanent allocatio n of tariff quota shares ", and therefore a TRQ allocation may not be "cast in 
stone, but must be a dynamic process based on market developments ".567 China argues that this 
in turn means "that a country -specific TRQ may not lead to long -term freezing of the s hares of 
imported products and cannot be applied in such a way as to create an artificial hurdle preventing 
the natural evolution of the import market structure ".568 China argues that it follows from this that 
"the TRQs for other countries must be fixed at l evels to allow a supplying WTO Member within the 
all other category to compete and increase its share so as to allow it to request consultations to 
recognize its SSI or PSI and obtain country -specific TRQs ", and that in this way, "the TRQs will not 
lead to  a long -term freeze of the import shares, as the shares of the suppliers will evolve in 
accordance with their comparative advantage ".569 
7.418.   We consider that China reads too much into the statement that the provisions on 
consultations and adjustments in Article XIII:4 mean in any event "that the [Bananas Framework 
Agreement] could not be invoked to justify a permanent allocation of tariff quota shares ".570 
Nowhere in the statements invoked by China did the panel or the Appellate Body mention or imply 
any obligation  to reserve a share in the TRQ to "all other " suppliers  to prevent a long -term freeze 
of the TRQ allocation . Furthermore, the statement was made in relation to Article XIII:4, and not 
                                               
564 Panel Report, EC – Bananas III (Article  21.5 – Ecuador) , paras. 7.73 -7.75.  
565 Appellate Body Report, EC – Bananas III (Article  21.5 – Ecuador II) / EC – Bananas III (Article  21.5 
– US), para. 340.  
566 Panel Report, EC – Bananas III (Ecuador) , para. 7.92, cited in Appellate Body Report, EC – Banana s 
III (Article 21.5 – Ecuador II) ; Appellate Body Report,  EC – Bananas III (Article 21.5 – US), para. 427.  
567 China's first written submission, para. 209.  
568 China's first written submission, para. 210.  
569 China's first written submission, para. 212.  
570 Panel Report, EC – Bananas III (Ecuador) , para. 7.92, cited in Appellate Body Report, EC – Bananas 
III (Article 21.5 – Ecuador II) ; Appellate Body Report,  EC – Bananas III (Article 21.5 – US), para. 427.  WT/DS492/R  
 
- 137 - 
 
  the terms of Article  XIII:2 on which China 's claim of violation is based . To the extent that the 
Appellate Body was recognizing that the objective of preventing a long -term freeze of the TRQ 
allocation finds reflection in Article XIII:4, we do not see how this would justify reading into 
Article  XIII:2 a requirement to allocate  a minimum share of a TRQ to the "all others ", regardless of 
actual import levels. As discussed at the outset, doing so would appear to violate the obligation 
that is expressly contained in the chapeau of Article XIII:2.  
7.419.   In addition, we do not consider th at China has adequately responded to the European 
Union 's point that allocating a 10% share to the "all others " category , so as  to enable at least  one 
other Member to achieve a substantial supplying interest, would not actually prevent a freezing of 
the TR Q allocation, but merely postpone that effect.571 As the European Union observes, the 
objective of preventing a long -term freeze of the allocation cannot necessarily be achieved  by 
reserving a given share to "all others " in the TRQ, but may instead require o ther means, such as 
setting a time limit to the validity of the allocation (or a periodic review thereof).572 As we 
explained elsewhere in our Report573, China 's response to this argument was to claim that the 
European Union violated Article XIII:1 and XIII:2 by failing to annually review and reallocate the 
TRQ shares based on the most recent trade developments.574 
7.420.   Finally, in these proceedings China has suggested that the Panel should at least find an 
inconsistency with the chapeau of Article XIII:2 in respect o f the one TRQ where there is a 0.0% 
"all others " share (tariff line 1602 39 21).  However, we see no legal basis for drawing this 
distinction. Based on the trade data provided by the parties, it appears that there have been no 
imports of the poultry product s under tariff line 1602 39 21 from any Member other than Thailand 
over the period 2006 -2008, or from any other Member since 2001. Furthermore, leaving aside that 
there appears to be no legal basis for requiring a Member to allocate an all others share, it  is not 
clear why a 0.0% share that reflects actual imports during the reference period should be treated 
differently from a 0.31% share (0210 99 39), or from a 1.6% share (1602 39 29), or from a 
2.11% share (1602 32 11) that reflects actual imports  during  the reference period .  
7.421.   Based on the foregoing, we find that China has failed to demonstrate that the European 
Union acted inconsistently with the chapeau of Article XIII:2 by not allocating an "all others " share 
of at least 10% for all of the TRQs under t he First and Second Modification Package s. 
7.8  Claims under Article XIII:1 of the GATT 1994  
7.8.1   Introduction  
7.422.   China claims that the "allocation of all or the vast majority of the TRQs to two of the WTO 
Members " (i.e. Brazil and Thailand) violates not only Article X III:2, but also Article XIII:1 of the 
GATT 1994. According to China, this is so because the importation of the like product from other 
WTO Members is not "similarly prohibited or restricted " as required by the terms of that 
provision.575  
7.423.   China considers tha t like products are not "similarly prohibited or restricted " for the 
following reasons. First, because the TRQ for tariff line 1602 39 21 was allocated entirely to 
Thailand.576 Second, because for the other TRQs where the European Union has allocated a share  
to "all others ", it did so in volumes and portions "that are so small as to allow no meaningful 
                                               
571 We agree with the European Union that a non -substantial supplier could at a certai n point capture 
the whole "all others"  share, which would then lead to a permanent freeze in the TRQ allo cation unless the "all 
others"  share was a moving target and thus also the amount of the TRQ is a moving target (which would 
transform a TRQ in an open ended tariff concession) (EU's second written submission, para. 146).  
572 EU's first written submission, paras. 262 -263. 
573 See paragraph 7.136.   See also China's opening statement at the first meeting o f the Panel, 
para. 102. 
574 As explained in section 7.3.3.1 above, these claims are outside the Panel's terms of reference.  
575 China's request for the establishment of a Panel, items II.A(iv) and II.B(iv). China's first written 
submission, paras. 151 -168; Ch ina's opening statement at the first meeting of the Panel, paras. 76 -84; China's 
responses to Panel question Nos. 35 -38; China's second written submission, paras. 122 -139; China's opening 
statement at the second meeting of the Panel, paras. 56 -65; parties'  responses, and comments on one 
another's responses, to Panel question Nos. 60, 64 -65, 87 -88. 
576 China's first written submission, paras. 158 -159; China's opening statement at the first meeting of 
the Panel, para. 81; China's second written submission, para s. 129, 131 -132. WT/DS492/R  
 
- 138 - 
 
  access to or participation in the TRQs ", rendering it significantly more difficult or impossible for the 
WTO Members concerned to obtain SSI status going forwa rd.577 China submits that this 
"reinforces " the effect of the very small "all others " share.578 Third, China argues that like products 
are not similarly restricted on the basis that the European Union negotiated country -specific TRQ 
shares with Brazil and Thai land, but not for other WTO Members that were substantial suppliers, 
including China.579 Finally, China submits that where the restrictions in the form of TRQs are 
determined on the basis of a reference period tainted by SPS import bans that applied to only 
some WTO Members, this means that imports from all third countries are not "similarly 
restricted ".580 According to China, "[t]he fact that Article XIII:2 regulates allocation of a TRQ does 
not in any way preclude Article XIII:1 from regulating allocation ".581 In China 's view, "the same 
measure, including those relating to the allocation of TRQs, could violate Article XIII:1 and 
Article  XIII:2, simultaneously ".582 
7.424.   The European Union responds that China 's claims under Article XIII:1 are unfounded 
because Article XI II:1 generally does not deal with the allocation of TRQ shares among supplying 
countries.583 More precisely, the European Union considers that Article XIII:2 is lex specialis584 vis-
à-vis Article XIII:1, in the sense that Article XIII:1 is applicable only "for aspects of the allocation 
of TRQs that are not covered by Article XIII:2 ", and only "to the extent that its application does 
not lead to results that would conflict with the outcome resulting from the application of 
Article  XIII:2 ".585 In the European Union 's view, Article XIII:1 requires that a TRQ be "applied on a 
product -wide basis and no Member is excluded from participation in the TRQ ", but this "does not 
govern the level of access  that each Member must have in a TRQ ".586 The European Union 
observes that the TRQs at issue in this dispute "are defined only by reference to the tariff line, 
which in turns refers to the intrinsic characteristics of the products, such as percentage of meat 
contained in the product and whether or not the product is cooked ".587 
7.8.2   Relevant legal provisions  
7.425.   Article XIII:1 reads as follows:  
No prohibition or restriction shall be applied by any Member on the importation of any 
product of the territory of any other Member or on the exportation of any product 
destined for the territory of a ny other Member, unless the importation of the like 
product of all third countries or the exportation of the like product to all third countries 
is similarly prohibited or restricted . (emphasis added)  
7.8.3   Analysis by the Panel  
7.426.   China claims that the "allocatio n of all or the vast majority of the TRQs to two of the WTO 
Members " (i.e. Brazil and Thailand) violates Article XIII:1 of the GATT 1994 because the 
                                               
577 China's first written submission, paras. 161 -164, 167; China's opening statement at the first meeting 
of the Panel, paras. 81 -82; China's second written submission, paras. 129 -139. 
578 China's second written submission, para. 135; China's response to Panel question No. 60.  
579 China's first written submission, paras. 165 -166; China's opening statement at the first meeting of 
the Panel, paras. 79 -80, 84; China's second written submission, para. 127; China's opening statement at the 
second meet ing of the Panel, para. 61. China agrees with the European Union "that there is no requirement to 
negotiate with WTO Members not holding a substantial supplying interest" (China's response to Panel question 
No. 37).  
580 China's first written submission, para . 168.  
581 China's opening statement at the second meeting of the Panel, para. 57. See also China's response 
to Panel question No. 64(a), para. 3.  
582 China's opening statement at the second meeting of the Panel, para. 59. See also China's responses 
to Panel q uestion No. 64, para. 7, and No. 65, para. 11.  
583 EU's first written submission, paras. 196 -209; EU's responses to Panel question Nos. 32 -34; EU's 
second written submission, paras. 86 -113; EU's opening statement at the second meeting of the Panel, paras. 
42-62; parties' responses, and comments on one another's responses, to Panel question Nos. 60, 64 -65, 87 -
88. 
584 EU's first written submission, paras. 186, 201, 204 -205; EU's second written submission, paras. 90, 
96; EU's opening statement at the second meetin g of the Panel, para. 45; EU's  response to Panel question 
No. 64(a), paras. 7 -9. 
585 EU's response to Panel question No. 64(a), para. 10.  
586 EU's first written submission, para. 198. (emphasis original)  
587 EU's first written submission, para. 199.  WT/DS492/R  
 
- 139 - 
 
  importation of the like product from other WTO Members is not "similarly prohibited or restricted " 
as requi red by the terms of that provision. China 's claim and the arguments of the parties raise 
the issue of the relationship between the obligations found in Article XIII:1 and Article XIII:2, and 
in particular whether the allocation of TRQ shares among supplyin g countries is governed by the 
general non -discrimination obligation in Article XIII:1.   
7.427.   We note that the terms of Article XIII:1 could be read to mean that no tariff rate quota 
may be applied by any Member on the importation of any product of the territo ry of any other 
Member (e.g. poultry from China), unless the importation of the like product of all third countries 
(e.g. Brazil and Thailand) is "similarly restricted ". However, Article  XIII:1 does not provide any 
specific guidance on how to administer TR Qs in a manner that avoids discrimination in the 
allocation of shares.  
7.428.   A TRQ will, by definition, comprise a two -tier tariff rate in which the in -quota tariff rate is 
lower than the out -of-quota tariff rate. In every case in which a TRQ is allocated among  supplying 
countries, some Member(s) will be allocated a share of the TRQ that is larger than the share that is 
allocated to other Members. Taken together, this means that the Member(s) with the larger TRQ 
shares will be entitled to export the volumes set out in their country specific shares at the lower, 
in-quota tariff rate, as compared with other Members. That could be understood to mean that 
products from different Members are not "similarly restricted ". When a TRQ is allocated in varying 
amounts among supplying countries, then each Member is not, and by definition cannot be, 
"similarly restricted " vis-à-vis any other Member that is allocated a greater or smaller share (or no 
share) of the TRQ.  
7.429.   Of course, it would follow from such an interpretation of A rticle XIII:1 that Members are 
legally prohibited, by the terms of Article XIII:1, from ever allocating a TRQ among supplying 
countries.  This is because where a TRQ is allocated among supplying countries, the "similarly 
restricted " requirement of Article X III:1 would never be met, insofar as that requirement is applied 
at the level of the amount of the shares allocated. It is axiomatic that the terms of Article XIII:1 
cannot be read in isolation from Article XIII:2, which expressly authorizes a Member to al locate 
shares in a TRQ, in varying amounts, among different supplying countries.588 Therefore, we cannot 
interpret Article XIII:1 as prohibiting a Member from allocating shares in a TRQ in varying amounts 
among different supplying countries insofar as this w ould conflict with Article XIII:2.  
7.430.   Prior panel and Appellate Body Reports have, unsurprisingly, interpreted Article XIII:1 so 
as not to conflict with the obligations in Article XIII:2 relating to the allocation of TRQs. Notably, 
the panel in EC – Bananas I II explained:  
While the requirement of Article XIII:2(d) is not expressed as an exception to the 
requirements of Article XIII:1, it may be regarded, to the extent that its practical 
application is inconsistent with it, as lex specialis  in respect of Member s with a 
substantial interest in supplying the product concerned.589 
7.431.   In EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), the 
Appellate Body sought to delineate the scope of Article XIII:1 from the scope of Article XIII:2. 
Beginning with an examination of the terms of Article XIII:1 taken together with Article XIII:5, the 
Appellate Body set forth its understanding of the scope of Article XIII:1:  
Applying Article XIII:1 to a tariff quota requires that the word "restriction " be read as 
a reference to a tariff quota. Article XIII:1 is then rendered thus: no tariff quota shall 
be applied by a Member on the importation of any product of the territory of any other 
Member, unless the importation of the like product of all third coun tries is similarly 
made subject to the tariff quota . The application of the tariff quota is thus on a 
                                               
588 We recall that Article XIII:2(d) provides that the importing Member "may seek agreement with 
respect to the allocation of shares in the quota with all other Members having a substantial interest in 
supplying the product concerned"; and  provides that, in cases in wh ich this method is not reasonably 
practicable, the importing Member "shall allot to Members having a substantial interest in supplying the 
product shares based upon the proportions, supplied by such Members during a previous representative period, 
of the t otal quantity or value of imports of the product, due account being taken of any special factors which 
may have affected or may be affecting the trade in the product".  
589 Panel Report, EC-Bananas III , para. 7.75.  WT/DS492/R  
 
- 140 - 
 
  product -wide basis . The principle of non -discriminatory application captured by 
Article  XIII:1 requires that, if a tariff quota  is applied to one Member, it must be 
applied to all; and, consequently, the term "similarly restricted " means, in the case of 
tariff quotas, that imports of like products of all third countries must have access to, 
and be given an opportunity of, participation. If a Member is exclu ded from access to, 
and participation in, the tariff quota , then imports of like products from all third 
countries are not "similarly restricted ".590 (emphasis added)  
7.432.   Thus, the Appellate Body did not read the "similarly restricted " requirement of 
Article  XIII:1 as applying at the level of the amount of the TRQ shares allocated  among supplying 
countries . Rather, the Appellate Body equated the term "restriction " in Article XIII:1 with the TRQ 
as a whole, rather than at the level of the individual shares allocat ed among supplying countries. 
The Appellate Body understood the obligation in Article XIII:1 to be that no tariff quota shall be 
applied by a Member on the importation of any product from some Members, unless the 
importation of the like product of all thir d countries is similarly "made subject to the tariff quota ". 
Under this reading, a violation of Article XIII:1 would be established if the products from one 
Member are "made subject to the tariff quota ", but the products of one or more other Members 
are no t made subject to the tariff quota.  
7.433.   After clarifying how Article XIII:1 applies to TRQs, the Appellate Body then immediately 
turned to the subject -matter of Article XIII:2. The Appellate Body stated that:  
Article XIII:2 regulates the distribution of the t ariff quota among Members . The 
chapeau of Article XIII:2 requires that the tariff quota be distributed so as to serve 
the aim of a distribution of trade approaching as closely as possible the shares that 
various Members may be expected to  obtain in the ab sence of the tariff quota. In this 
way, all Members producing the like product are afforded access to, and competitive 
opportunities under, the tariff quota in a manner that mimics their comparative 
advantage vis -à-vis other Members who would participate u nder the quota. Thus, 
while Article XIII:1 establishes a principle of non -discriminatory access to and 
participation in the overall tariff quota, the chapeau of Article XIII:2 stipulates a 
principle regarding the distribution  of the tariff quota in the lea st trade -distorting 
manner. The provisions of Article XIII:2(a) -(d) are specific instances of authorized 
forms of allocation when a Member chooses to allocate shares of the tariff quota.591 
(emphasis added)  
7.434.   In the present case, China has not alleged that Bra zil or Thailand were not "made subject 
to the tariff quota ". Nor has China alleged that the TRQ is applied other than "on a product -wide 
basis". China has not articulated what are the different elements of the TRQs, or their allocation, 
that China is chall enging under Article XIII:1, separately from that which China has already 
challenged under Article XIII:2. Rather, China 's claims under Article XIII:1 appear to be based on 
essentially the same elements as its claims regarding the TRQ allocation under the chapeau of 
Article XIII:2. All of China 's argumentation under Article XIII:1 relates to the amount of the TRQ 
shares allocated to "all others ", or to the allocation of country -specific shares only to Brazil and/or 
Thailand but not to China which claimed it  was also a substantial supplier .   
7.435.   China did not expressly address the relationship between Article XIII:1 and XIII:2 in its 
first written submission. The Panel solicited China 's views of the relationship between Article XIII:1 
and XIII:2 with regard to t he allocation of TRQ shares among supplying countries, with a view to 
understanding the difference between China 's claims and arguments under Article XIII:1 and those 
China has advanced under Article XIII:2. China has stated that it disagrees with the Euro pean 
Union that Article XIII:2 is lex specialis  with respect to TRQ share allocation.592 However, in setting 
forth its views on how Article XIII:1 applies to the allocation of TRQ shares among supplying 
countries, China advanced an interpretation of Article XIII:1 under which this provision would 
seem to impose essentially the same rule that is already expressed in Article XIII:2 (including both 
                                               
590 Appellate Body Reports, EC – Bananas III ( Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 
– US), para. 337.  
591 Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 
– US), para. 338.  
592 China's comments on the EU's response to Panel questi on No. 64(a).  WT/DS492/R  
 
- 141 - 
 
  its chapeau and paragraph (d)).593 In addition to the requirements that China sees as being 
common to both Article XI II:1 and Article XIII:2, China states that:  
In addition, however, Article XIII:1 has a broader scope of application compared to 
Article XIII:2 inasmuch as it also provides that no conditions or formalities are 
established with regard to access to the tarif f rate quotas that differentiate between 
WTO Members such that the importation from all WTO Members is not similarly 
restricted. Thus, as mentioned in Question 34(a) above that was addressed to the EU, 
China also believe that Article XIII:1 also requires s imilar treatment with respect to 
matters such as the product coverage of the tariff rate quotas, applying the same in -
quota tariff rates, applying the same out -of-quota tariff rates or similarity in the 
procedures and formalities to access the tariff rate quotas.594 
7.436.   We have already addressed the substance of all of the arguments that China advances 
under Article XIII:1 in the context of addressing China 's arguments regarding the allocation of the 
TRQs under Article XIII:2. As for the additional elements that China considers would fall within the 
broader scope of application of Article XIII:1, and which may not be subject to Article XIII:2, China 
has not alleged that there are any "conditions or formalities …established with regard to access to 
the tariff rate quotas that differentiate between WTO Members ", or that the TRQs at issue accord 
any dissimilar treatment "with respect to matters such as the product coverage of the tariff rate 
quotas, applying the same in -quota tariff rates, applying the same out -of-quota tariff rates or 
similarity in the procedures and formalities to access the tariff rate quotas ". 
7.8.4   Conclusion  
7.437.   Based on the foregoing, we find that China has failed to demonstrate that the "allocation of 
all or the vast majority of the TRQs to two of the WT O Members " (i.e. Brazil and Thailand) violates 
the requirement , in Article XIII:1 , that no tariff rate quota be applied by any Member on the 
importation of any product of the territory of any other Member unless the importation of the like 
product of all t hird countries is "similarly prohibited or restricted ". 
7.9  Claims under Article I:1  of the GATT 1994  
7.9.1   Introduction  
7.438.   China claims that the "allocation of all or the vast majority of the TRQs to two of the WTO 
Members " (i.e. Brazil and Thailand) violates not only  Article XIII:2, but also the requirement in 
Article I:1 that any "advantage, favour, privilege or immunity " granted to any Member be 
"accorded immediately and unconditionally " to the like product originating in any other Member.595 
According to China, the f irst "advantage " or "favour " granted to products of Brazil and Thailand 
that is not "accorded immediately and unconditionally " to the like products from all other Members 
is the "disproportionate high allocation " of the share in the TRQs to Brazil and Thai land together 
with "the difference between the in -quota rates and the much higher out -of-quota rates ".596 The 
second "advantage " or "favour " is the granting of  "a country -specific volume of the tariff rate 
quotas " to Brazil and Thailand, whereas "[o]ther WTO  Members with substantial supplying 
interests, such as China, have a volume of imports that cannot be predicted since it is in 
competition with imports originating in other countries ".597 China states that its claims under 
Article I:1 are "independent legal claims ", and "not a consequential claim that depends on the 
outcome of claims under Articles XIII or X XVIII".598 
                                               
593 China's response to Panel question No. 35, paras. 155, 157. See also China's second written 
submission, paras. 127 -128. 
594 China's response to Panel question No. 35, para. 158.  
595 China's first written submission, para. 280(16). The arguments  in supports of China's claims under 
Article I:1 are found in China's first written submission, paras. 271 -279; China's responses to Panel question 
Nos. 58 -59; China's second written submission, paras. 202 -208; parties' responses, and comments on one 
anoth er's responses, to Panel question Nos. 60, 64.  
596 China's second written submission, para. 207.  
597 China's second written submission, para. 208.  
598 China's first written submission, para. 275; see also China's response to Panel question No.59(b), 
and Panel qu estion No. 59(c), para. 207; China's second written submission, para. 205.  WT/DS492/R  
 
- 142 - 
 
  7.439.   The European Union responds that China 's claims under Article I:1 are unfounded because 
this provision does not govern the allocation of TRQs amo ng supplying countries.599 According to 
the European Union, Article I:1 would only be implicated insofar as a Member imposes differential 
in-quota duties on imports of like products from different supplier countries.600 The European 
Union submits that if China 's claim were upheld, "it would mean that any time a Member allocates 
a TRQ (regardless of whether it has complied with Article XIII:2 or not) there would be a violation 
of Article I:1 because it would not grant immediately and unconditionally the same acc ess to the 
TRQ to all other Members ".601 The European Union does not consider the relationship between 
Article XIII:2 and Article I:1 to be one of lex specialis vs lex generalis , because the European 
Union considers that even in the absence of Article XIII:2 , the terms of Article I:1 do not regulate 
the allocation of TRQ shares among supplying countries.602  
7.9.2   Relevant legal provisions  
7.440.   Article I of the GATT 1994 is entitled "Most-Favoured -Nation Treatment ". Article I:1 states:  
With respect to customs duties and c harges of any kind imposed on or in connection 
with importation or exportation or imposed on the international transfer of payments 
for imports or exports, and with respect to the method of levying such duties and 
charges, and with respect to all rules and  formalities in connection with importation 
and exportation, and with respect to all matters referred to in paragraphs 2 and 4 of 
Article III, any advantage, favour, privilege or immunity granted by any Member to 
any product originating in or destined for any other country shall be accorded 
immediately and unconditionally to the like product originating in or destined for the 
territories of all other Members.  
7.9.3   Analysis by the Panel  
7.441.   China claims that the "allocation of all or the vast majority of the TRQs to  two of the WTO 
Members " (i.e. Brazil and Thailand) violates the terms of Article I:1 because the TRQ allocation 
results in an "advantage, favour, privilege or immunity " being accorded to Brazil and Thailand 
which is not accorded "immediately and unconditi onally " to the like product originating in or 
destined for the territories of all other Members. China 's claim and the arguments of the parties 
raise the issue of the relationship between the obligations found in Article I:1 and Article XIII:2, 
and in part icular whether the allocation of TRQ shares among supplying countries is governed by 
the general MFN obligation in Article I:1.  
7.442.   We note that the terms of Article I:1  require that, with respect to the tariffs applied to 
poultry products ( "customs duties an d charges of any kind imposed on or in connection with 
importation "), any "advantage, favour, privilege or immunity " granted by the European Union to 
any poultry product originating in Brazil or Thailand must "be accorded immediately and 
unconditionally " to the like poultry product originating in China or any other Member. However, 
Article  I:1 does not provide specific guidance on how to administer TRQs in a manner that avoids 
discrimination in the allocation of shares.603  
7.443.   A TRQ will, by definition, comprise  a two -tier tariff rate in which the in -quota tariff rate is 
lower than the out -of-quota tariff rate. In every case in which a TRQ is allocated among supplying 
countries, some Member(s) will be allocated a share of the TRQ that is larger than the share tha t is 
allocated to other Members. Taken together, this means that the Member (s) with the larger TRQ 
                                               
599 EU's first written submission, paras. 303 -308; EU's opening statement at the first meeting of the 
Panel, para. 6; EU's second written submission, paras. 189 -195; EU's opening stat ement at the second 
meeting of the Panel, para. 107; parties' responses, and comments on one another's responses, to Nos. 60, 
64. 
600 EU's first written submission, para. 306; EU's second written submission, paras. 190, 194.  The 
European Union submits that Article XIII:1 "does not necessarily require that the same in -quota tariff rates 
applies to all Members as that matter is already regulated by Article I:1 of the GATT 1994. It would make little 
sense to hold that two provisions of the same agreement impose  the same identical obligation, because that 
would imply that one of those provisions is redundant" (EU's response to Panel question No. 32 para. 97).  
601 EU's first written submission para. 308.  
602 EU's response to Panel question No. 64(a), paras. 8 -9, 12.  
603 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 
– US), para. 343.  WT/DS492/R  
 
- 143 - 
 
  shares will be entitled to export the volumes set out in their country specific shares at the lower, 
in-quota tariff rate, as compared with other Members. Th at could be understood to constitute an 
"advantage " or "favour " with respect to "customs duties and charges of any kind imposed on or in 
connection with importation ". When a TRQ is allocated in varying amounts among supplying 
countries, then such "advantag e" or "favour " is not, and by definition cannot, be "accorded 
immediately and unconditionally " to any other Member that is allocated a smaller share (or no 
share) of the TRQ.  
7.444.   Of course, it would follow from such an interpretation of Article I:1 that Membe rs are 
legally prohibited, by the terms of Article I:1, from ever allocating a TRQ among supplying 
countries. This is because where a TRQ is allocated among supplying countries, the advantages 
granted to those who receive the largest TRQ shares would not b e accorded "immediately and 
unconditionally " to all other Members ".604 It is axiomatic that the terms of Article I:1 cannot be 
read in isolation from Article XIII:2, which expressly authorizes a Member to allocate shares in a 
TRQ, in varying amounts, among d ifferent supplying countries.605 Therefore, to interpret Article I:1 
as prohibiting a Member from allocating shares in a TRQ in varying amounts among different 
supplying countries would conflict with Article XIII:2.  
7.445.   Prior panel and Appellate Body Reports ha ve, unsurprisingly, interpreted Article I:1 so as 
not to conflict with the obligations in Article XIII:2 specifically relating to the allocation of TRQs. 
The panel in EEC – Apples (Chile I)  considered it "more appropriate to examine the matter in the 
conte xt of Article XIII which deals with the non -discriminatory administration of quantitative 
restrictions  rather than Article I:1 ".606 Likewise, the panel in EEC – Dessert Apples  also "considered 
it more appropriate to examine the consistency of the EEC measure s with the most -favoured -
nation principles of the General Agreement in the context of Article XIII ", as "[t]his provision deals 
with the non -discriminatory administration of quantitative restrictions and is thus the lex specialis 
in this particular case ".607 In EC – Bananas III , the panel found that "it is more appropriate to 
consider these issues under Article XIII because that is the more specific provision ", and 
accordingly made "no finding on the compatibility of the EC 's tariff quota share allocations an d BFA 
reallocation rules with Article I:1 ".608  
7.446.   In EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), the 
Appellate Body sought to delineate the scope of Article I:1 from the scope of Article XIII, indicating 
that they are "distinct " and that the two provisions may apply to "different elements " of a measure 
or import regime.609 The Appellate Body stated : 
We consider that the notion of "non-discrimination " in the application of tariffs under 
Article  I:1 and the notion of non -discriminatory application of a "prohibition or 
restriction " under Article  XIII are distinct , and that Article  XIII ensures that a Member 
applying a restriction or prohibition does not discriminate among all other Members.  
Article  I:1, which applies to tarif fs, and Article  XIII:1, which applies to quantitative 
restrictions and tariff quotas, may apply to different elements  of a measure or import 
regime.  Article XIII adapts the MFN -treatment principle to specific types of measures, 
that is, quantitative restr ictions, and, by virtue of Article XIII:5, tariff quotas. Tariff 
                                               
604 EU's first written submission para. 308.  
605 We recall that Article XIII:2(d) provides that the importing Member "may seek agreement wi th 
respect to the allocation of shares in the quota with all other Members having a substantial interest in 
supplying the product concerned"; and provides that, in cases in which this method is not reasonably 
practicable, the importing Member "shall allot to Members having a substantial interest in supplying the 
product shares based upon the proportions, supplied by such Members during a previous representative period, 
of the total quantity or value of imports of the product, due account being taken of any special factors which 
may have affected or may be affecting the trade in the product".  
606 GATT Panel Report, EEC – Apples (Chile I) , para. 4.1.  
607 GATT Panel Report, EEC – Dessert Apples , para. 12.28.  
608 Panel Report, EC – Bananas III (Guatemala / Honduras) , paras. 7.129 -7.130. In EC – Bananas III , 
the Appellate Body stated, in the context of a different issue, that " although Articles I and XIII of the GATT 1994 
are both non -discrimination provisions, their relationship is not such" that a waiver from the obli gations under 
Article  I implies a waiver from the obligations under Article XIII ( Appellate Body Report, EC – Bananas III , para. 
183).   Apart from indicating that the relationship between these two provisions is such that a waiver of the 
obligation under t he former does not imply a waiver of the obligations under the latter, the Appellate Body did 
not further elaborate on the different scope and subject -matter of these two provisions.  
609 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 
– US), para. 343.  WT/DS492/R  
 
- 144 - 
 
  quotas must comply with the requirements of both Article I:1 and Article XIII of the 
GATT 1994. This, in our view, does not make Article XIII redundant in respect of tariff 
quotas: if a Membe r imposes differential in -quota duties on imports of like products 
from different supplier countries under a tariff quota, Article I:1 would be implicated ; 
if that Member fails to give access to or allocate tariff quota shares on a non -
discriminatory basis  among supplier countries, the requirements of Articles XIII:1 and 
XIII:2 would apply. In the absence of Article  XIII, Article  I would not provide specific 
guidance on how to administer tariff quotas in a manner that avoids discrimination in 
the allocation  of shares.610 (emphasis added)  
7.447.   In the present case, China has not alleged that the TRQs impose "differential in -quota 
duties on imports of like products from different supplier countries under a tariff quota ". Nor has 
China articulated what are the "differe nt elements " of the TRQs or their allocation that is being 
challenged under Article I:1, as opposed to Article XIII. Rather, China 's claim under Article I:1 
appears to be based on essentially the same elements as its claims regarding the TRQ allocation 
under Article XIII:2, simply articulated in a more general way.    
7.448.   First, China asserts that the TRQ allocation to Brazil and Thailand is "disproportionate ". 
However, China does not articulate the basis upon which this "disproportionate " standard is to be 
assessed. Given that China argues that its claims under Article I:1 are "independent legal claims " 
that are "not a consequential claim that depends on the outcome of claims under Articles XIII or 
XXVIII"611, it might be surmised that in China 's view , whether a TRQ allocation is 
"disproportionate " under Article I:1 is to be assessed on a basis that is different from the TRQ 
allocation rules set forth in Article XIII:2. However, China has not elaborated its argument beyond 
stating that the TRQ allocation is "disproportionate ". We see no basis in the text of Article I:1 for 
apply ing a stand -alone "disproportionate " standard to assess the GATT -consistency of the 
allocation of TRQ shares among supplying countries. Moreover, to read such a standard into Article 
I:1 wou ld mean that there are different and potentially conflicting requirements under Article I:1 
and Article XIII governing the allocation of TRQs among supplying countries.  
7.449.   In the context of its argumentation under Article I:1, China also notes that Brazil an d 
Thailand are granted a country -specific volume of the tariff rate quotas, with a volume that is 
transparent, predictable, and free from competition from other supplying countries , while other 
substantial suppliers such as China are not .612 However, as the European Union has observed, 
these "are inherent features of any share allocated to any substantial supplier pursuant to 
Article  XIII:2(d) ".613 Thus, to find a violation of Article I:1 on that basis would again require 
interpreting Article I:1 to mean that M embers are legally prohibited, by the terms of Article I:1, 
from allocating a TRQ among supplying countries.  
7.450.   The Appellate Body has clarified that Article I and XIII may apply to "different elements " of 
a measure or import regime614, and we do not exclude, a priori, that certain elements relating to 
the allocation of a TRQ among supplying countries could potentially fall within the scope of the 
general MFN obligation in Article I:1. However, in the present case, China has not identified any 
elements of the TR Q allocation that fall within the scope of Article I:1.615  
7.9.4   Conclusion  
7.451.   Based on the foregoing, we find that China has failed to demonstrate that the "allocation of 
all or the vast majority of the TRQs to two of the WTO Members " (i.e. Brazil and Thailand) vio lates 
the requirement in Article I:1 that any "advantage, favour, privilege or immunity " granted to any 
Member be "accorded immediately and unconditionally " to the like product originating in any other 
Member.  
                                               
610 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 
– US), para. 343.  
611 China's first written submission, para. 275; see also China's response to Panel q uestion No.59(b), 
and Panel question No. 59(c), para. 207; China's second written submission, para. 205.  
612 China's second written submission, para. 208.  
613 EU's second written submission, para. 193.  
614 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 
– US), para. 343.  
615 Appellate Body Report, US – Gambling,  para. 140. (emphasis original, footnotes omitted)  WT/DS492/R  
 
- 145 - 
 
  7.10  Claims under Article XIII:4 of the GATT 1994  
7.10.1   Introduction  
7.452.   China claims that the European Union violated Article XIII:4 of the GATT 1994 by refusing 
to enter into "meaningful consultations " with China .616 We understand China to acknowledge that, 
following its request for consultations under Article XIII: 4, the parties did in fact hold consultations 
on 19 May 2014. However, China claims that these were not "meaningful consultations ", on the 
grounds that the European Union "stated that Article XIII did not apply and failed to reappraise the 
quota allocation  to account for the SPS measures ".617 China disagrees with the European Union 's 
position that Article XIII:4 only establishes a "procedural obligation " to consult, and argues that 
"consultations followed by no adjustment when the conditions for an adjustment  are met, would 
mean that the consultations under Article XIII:4 are a dead letter ".618 China considers that it made 
a duly justified claim of substantial supplying interest pursuant to A rticle XIII:4, and that 
Article  XIII:4 applies when the allocation amon g substantial suppliers is based on either the first or 
second sentences of Article XIII:2(d).619 
7.453.   The European Union responds that there is no violation of Article XIII:4 because it 
discharged any obligation that it had to consult with China by meeting with China on 19 May 
2014.620 In this regard, the European Union submits that Article XIII:4 only sets out a "procedural 
obligation " to consult, and that "it is not required to adjust the allocation of the TRQ in response to 
the requests from a Member having a SS I".621 The European Union additionally argues that China 
did not make a duly justified claim of substantial supplying interest when it requested 
consultations pursuant to Article XIII:4, and that Article XIII:4 only applies when the allocation 
among substant ial suppliers is done unilaterally pursuant to the second sentence of 
Article  XIII:2(d) .622 
7.10.2   Relevant legal provisions  
7.454.   Article XIII:4 reads as follows:  
4. With regard to restrictions applied in accordance with paragraph 2 (d) of this 
Article or under paragrap h 2 (c) of Article XI, the selection of a representative period 
for any product and the appraisal of any special factors affecting the trade in the 
product shall be made initially by the Member applying the restriction;  Provided that 
such Member shall, up on the request of any other Member having a substantial 
interest in supplying that product or upon the request of [the CONTRACTING 
PARTIES], consult promptly with the other Member or [the CONTRACTING PARTIES] 
regarding the need for an adjustment of the pro portion determined or of the base 
period selected, or for the reappraisal of the special factors involved, or for the 
elimination of conditions, formalities or any other provisions established unilaterally 
relating to the allocation of an adequate quota or  its unrestricted utilization.  
7.455.   Article XIII:4 refers explicitly to the request of "any other Member having a substantial 
interest in supplying that product ". The parties agree that a WTO Member may, but is not 
required, to consult under Article XIII:4 with  a Member that does not hold a substantial interest.623 
                                               
616 China's first written submission, paras. 253 -257, 280(13); China's responses to Panel question 
Nos. 48-49; China's second written submission, paras. 193 -196; China's opening statement at the second 
meeting of the Panel, para. 82; parties' responses, and comments on one another's responses, to Panel 
question Nos. 123 -128. 
617 China's first written submissi on, para. 253; China's second written submission, para. 194.  
618 China's response to Panel question No. 49(a), para. 191.  
619 China's comment on the EU's response to Panel question No. 123(a), para. 73 and China's comment 
on the EU's response to Panel question  No. 127, paras. 82 et seq . 
620 EU's first written submission, paras. 288 -297; EU's responses to Panel question Nos. 47 -48; EU's 
second written submission, paras. 177 -183; EU's opening statement at the second meeting of the Panel, paras. 
104-106; parties' re sponses, and comments on one another's responses, to Panel question Nos. 123 -128. 
621 EU's first written submission, para. 195; see also EU's response to P anel question No. 123(a), 
para. 119. 
622 EU's responses Panel question No. 123(a), paras. 120 -121 and Pan el question No. 127, para. 143.  
623 Parties' response to Panel question No. 48.  WT/DS492/R  
 
- 146 - 
 
  7.10.3   Analysis by the Panel   
7.456.   It is not in dispute that China sent a letter to the European Union on 19 December 2013 
requesting to "enter into consultations with the European Union in accordance with 
Article  XIII:4 ".624 It is also not in dispute that a meeting was subsequently held between China and 
the European Union pursuant to that request on 19 May 2014.625 We understand that the 
European Union refused to recognize that China had the requisite substantial supp lying interest 
status to invoke Article XIII:4, and the European Union made no adjustment to the allocation of 
TRQ shares among supplying countries following this meeting.  
7.457.   We consider that China 's claims under Article XIII:4 raise a number of disputed iss ues. 
First, whether the obligation in Article XIII:4 is applicable to cases where the shares of a TRQ are 
allocated among supplying countries by agreement with substantial suppliers pursuant to the first 
sentence of Article XIII:2(d). Second, whether China  was a Member having a substantial interest 
in supplying that product, and thus entitled to invoke Article XIII:4 , at the time that it requested 
consultations pursuant to Article XIII:4 . Third,  whether Article XIII:4 establishes a legal obligation 
on the i mporting Member to reallocate TRQ shares among supplying countries to reflect an 
updated reference period or a reappraisal of special factors, as China contends, or merely a 
procedural obligation to consult as the European Union argues. Fourth, whether the  European 
Union refused to consult with China in the sense of refusing to meet with China to consider the 
need for an adjustment of the proportion determined or of the base period selected, or for the 
reappraisal of the special factors involved. We will ad dress these issues in turn.  
7.10.3.1   Whether Article XIII:4 applies in cases where TRQ shares are allocated among 
supplying countries by agreement with substantial suppliers pursuant to 
Article  XIII:2(d) first sentence  
7.458.   We understand the European Union to argue tha t the obligation to consult provided for in 
Article XIII:4 only applies when the TRQ shares are allocated unilaterally pursuant to the second 
sentence of Article XIII:2(d), and that in cases where a Member allocating the shares of a TRQ has 
reached an agre ement with all Members having a substantial interest in supplying the product 
under the terms of the first sentence of Article XIII:2(d), there is no obligation to enter into 
consultations pursuant to Article XIII:4.  
7.459.   The scope of Article XIII:4 is set out  in its introductory sentence, which states that it 
applies "[w]ith regard to restrictions applied in accordance with paragraph 2(d) of this Article… ". 
Paragraph 2(d) applies "in cases in which a quota is allocated among supplying countries ". The 
text of A rticle XIII:4 does not distinguish between allocation by agreement under the first sentence 
of paragraph 2(d), and unilateral allocation under the second sentence of paragraph 2(d). Rather, 
it refers generally to restrictions imposed pursuant to paragraph 2(d). We believe that more 
precise language would have been needed to exclude from the scope of application of Article XIII:4 
the situation where a Member allocates the shares of a TRQ based on agreements reached 
pursuant to Article XIII:2, first sentence.   
7.460.   The European Union argues that its interpretation of the scope of Article XIII:4 is 
supported by the phrase "established unilaterally " appearing in the last sentence of Article XIII:4, 
which, according to the European Union, refers back only to the unila teral allocation of the shares 
under the second sentence of Article XIII:2(d).626 We observe that the phrase "established 
unilaterally " in Article XIII:4 appears in the phrase providing for consultations regarding "the 
elimination of conditions, formalities or any other provisions established unilaterally relating to the 
allocation of an adequate quota or its unrestricted utilization ".627 We note that this phrase is in 
part linked to the last sentence of Article XIII:2(d), which provides that:  
No conditions or  formalities shall be imposed which would prevent any Member from 
utilizing fully the share of any such total quantity or value which has been allotted to 
                                               
624 Letter of 19 December 2013 requesting consultation under Article XIII:4 of the GATT 1994 (Exhibit 
CHN-39). 
625 See paragraph 7.81.  
626 EU's response t o Panel question No. 124(b)(i), paras. 131 -132. 
627 See China's comment on the EU's response to Panel question No. 127, para. 82.  WT/DS492/R  
 
- 147 - 
 
  it, subject to importation being made within any prescribed period to which the quota 
may relate.  
7.461.   The phrase "established unilaterally " in Article XIII:4 is not specifically linked to the 
allocation of shares among different supplying countries as provided under the first or the second 
sentence of Article XIII:2. We also note that the word "unilateral " does not appear in the text of 
the second sentence of Article XIII:2(d). Contrary to what the European Union argues, we do not 
consider that the phrase "established unilaterally " qualifies all the matters which can be the object 
of the consultations provided  for in Article XIII:4, on the grounds that it is placed at the end of the 
list of matters that are subject to consultations as specified in Article XIII:4.628 Rather, we read 
this language as relating more to the conditions or formalities regarding the util ization of the quota 
as per the terms of the third sentence of Article XIII:2(d).  
7.462.   Continuing with our textual analysis of Article XIII:4, we note that it provides for 
consultations regarding the need for an adjustment to the reference period selected  (i.e. the "base 
period") , or the reappraisal of special factors. The European Union observes that reference to a 
"representative period " and "special factors " is explicitly made only in the second sentence of 
Article XIII:2(d).629 We agree that, if the subject -matter of the consul tations provided for in 
Article  XIII:4 were clearly confined to matters that only arise in cases of unilateral allocation of 
TRQ shares under the second sentence of Article XIII:2(d), then it may follow, by necessary 
implication, that the  scope of the obligation to enter into consultations would not extend to cases 
where TRQ shares are allocated by agreement. However, the European Union itself acknowledges 
that consideration of " special factors " is also relevant in the context of allocatin g the shares of a 
TRQ by agreement pursuant to the first sentence of Article  XIII:2(d).630 We have found that due 
account must be taken of a previous representative period and special factors in the context of 
allocating the shares of a TRQ by agreement with  substantial suppliers631, and also in determining 
which Members are substantial suppliers, in the context of the first sentence of Article XIII:2(d).632 
Therefore, we are not persuaded that consideration of the subject -matter of the consultations 
under Articl e XIII:4 gives rise to the necessary implication that the scope of the obligation to enter 
into consultations extends only to cases where shares of a TRQ are allocated unilaterally pursuant 
to the second sentence of Article XIII:2(d).  
7.463.   We further note that  the narrow interpretation of Article XIII:4 proposed by the European 
Union has been previously rejected by the panel in EC – Bananas III . In that case, the shares of a 
TRQ had been allocated by agreement with all the Members which held a substantial inter est in 
supplying the product in question. The panel stated that:  
While the provisions of Article XIII:4 on consultations and adjustments seem to be 
primarily aimed at adjustments to quota shares allocated pursuant to Article XIII:2(d), 
second sentence, they also apply in the case where agreements were reached 
pursuant to Article XIII:2(d), first sentence, with Members having a substantial 
interest in supplying the product concerned . In addition, in so far as a new Member 
has a substantial interest in suppl ying that product, its share of the "others " category 
can be viewed, for purposes of Article XIII:4, as a provision established unilaterally 
relating to the allocation of an adequate quota.633 (emphasis added)  
7.464.   This finding supports our understanding that the re is nothing in the language of 
Article  XIII:4 to suggest that its scope of application is confined to the allocation of TRQ shares 
under the second sentence of Article XIII:2(d). For these reasons, we find that the right to request 
consultations under Ar ticle XIII:4 is available to Members holding a substantial supplying interest 
in cases in which the allocation of TRQ shares among supplying countries is agreed pursuant to the 
first sentence of Article XIII:2(d), and not only in those cases in which the T RQ shares are 
allocated unilaterally pursuant to the second sentence of Article XIII:2(d).  
                                               
628 EU's response to Panel question No. 124(b)(i), para. 132.  
629 EU's response to Panel question No. 124(b)(i), para. 132.  
630 See pa ragraph 7.393 . 
631 See paragraphs 7.392  to 7.396 . 
632 See paragraphs  7.316  to 7.322 . 
633 Panel Report, EC – Bananas III (Ecuador) , footnote 373.  WT/DS492/R  
 
- 148 - 
 
  7.10.3.2   Whether China had a substantial interest in supplying the products concerned 
at the time of its request under Article XIII:4  
7.465.   Article XIII:4 provides that a Member a llocating TRQ shares among supplying countries 
pursuant to Article XIII:2(d) shall consult with any other Member having a substantial interest in 
supplying the product (or the WTO Members acting jointly) upon request. We recall that China 
sent a letter to the European Union on 19 December 2013 to request consultations under 
Article  XIII:4.634 In its letter, China stated that it was a Member with a substantial supplying 
interest in several of the tariff lines covered by the Second Modification Package, "as evi denced by 
the statistics of imports of the European Union from China in the most recent years prior to the 
adoption of the new tariff regime ".635 On 21 February 2014, the European Union responded by 
informing China that it did not meet the conditions to part icipate in the relevant negotiations.636 
The European Union has confirmed in these proceedings that it considered that, at the time of 
China 's request for consultations under Article XIII:4, China did not have the substantial supplying 
interest necessary to request consultations under Article XIII:4.637 
7.466.   The parties have provided the Panel with import statistics for the period 1996 -2015. We 
recall that China 's shares of imports into the European Union of the poultry products covered by 
the Second Modification Pa ckage for years 2009 -2015 were as follows638:   
Tariff line  2009  2010  2011  2012  2013  2014  2015  
 
1602 32 11  0% 0.0%  0.0%  0.0%  0.0%  0.0%  0.0%  
1602 32 30  0.4%  0.9%  0.9%  0.8%  3.1%  4.2%  5.0%  
1602 32 90  2.8%  1.5%  2.9%  0.8%  0.0%  1.6%  0.0%  
1602 39 21  0.0%  0.0%  0.0% 0.0%  0.0%  0.0%  0.0%  
1602 39 29  27.1%  40.7%  52.8%  62.0%  58.4%  59.0%  59.4%  
1602 39 40  0.0%  0.0%  25.3%  - - - - 
1602 39 80  8.7%  17.6%  61.1%  - - - - 
1602 39 85639 (resulting 
from the merger of tariff 
lines 1602 39 40 and 
1602 39 80 , effective 1 
January 20 12) (3.9%)  (8.3%)  (52.8%)  82.5%  81.7%  
 
 80.9%  86.2%  
 
7.467.    We note from these statistics that when China requested consultations on 19 December 
2013, China held significant import shares in tariff lines 1602 39 29 and 1602 39 85 (58.4% and 
81.7% for the year  2013, respectively). We also note that imports from China into the European 
Union under tariff lines 1602 39 29 and 1602 39 85 already accounted for more than 50% of 
imports of those poultry products by 2011 and continued to account for more than 50% of i mports 
in 2012 ( 62.0% and 82.5%, respectively) . Based on the import data submitted by the parties, 
China held an average import share of 51.8% in the importation into the European Union of 
products classified in tariff line 1602 39 29 for the years 2010 -2012. China also held an average 
share of 47.9% of imports into the European Union of products under tariff line 1602 39 85 for the 
years 2010 -2012.  
                                               
634 Letter of 19 December 2013 requesting consultation under Article XIII:4 of the GATT 1994 (Exhibit 
CHN-39). 
635 Letter of 19 December 2013 requesting consultation under  Article XIII:4 of the GATT 1994 (Exhibit 
CHN-39). 
636 Response letter from the EU to China  dated 21 February 2014  (Exhibit CHN -40). 
637 EU's first written submission, para. 296; EU's response to Panel question No. 47, para. 147; 
Response letter from the EU to  China  dated 21 February 2014  (Exhibit CHN -40). See  paragraph s 7.79 to 7.81. 
638 See the import statistics in section 7.2.4 above.  
639 We note that when China made its request, tariff lines 1602 39 40 a nd 1602 39 80 had been merged 
into tariff line 1602 39 85 (effective 1 January 2012). For this reason, in this section we consider it necessary 
to also examine China's share of imports under the merged tariff line 1602 39 85.  WT/DS492/R  
 
- 149 - 
 
  7.468.   These numbers indicate that China had a "substantial interest " in supplying the products 
classified under ta riff line 1602 39 29 and 1602 39 85 when it made its request for consultations in 
2013. We understand that the complete definitive import data from the year 2013 was not 
available to the European Union when China sent its request for consultations on 19 De cember 
2013, or when the parties met to discuss the TRQs on 21 May 2014.640 However, even the data for 
the year 2012 indicates that China had already achieved a substantial supplying interest in tariff 
lines 1602 39 29 and 1602 39 85 by that time. In light o f China 's significant import shares in these 
products during the years preceding the request for consultation, the Panel does not consider it 
necessary to determine the precise import share that is required for a supplying interest of a 
Member to be consid ered as "substantial " under Article XIII:4.641 When China made its request for 
consultations under Article XIII:4 on 19 December 2013, China 's import shares in the European 
Union market for the products classified under tariff lines 1602 39 29 and 1602 39 85  were clearly 
large enough for China to be considered a Member with a "substantial interest " in supplying these 
products (58.4% and 81.7%, respectively in 2013).  
7.469.   The European Union disagrees that China held a substantial supplying interest in these 
produc ts when it made its request for consultation. It submits that since the processes of opening 
the TRQs and allocating the TRQ shares both occurred at the same time, "it follows that in 2014, 
just after the termination of the rebinding exercise by the EU pur suant to Article XXVIII and the 
implementation of the TRQs at issue, the EU was of the view that China did not hold a SSI 
necessary to request consultations under Article XIII:4. "642 In response to a question by the Panel, 
the European Union indicated that, at least for the years 2012 to 2015, the import shares held by 
China in tariff lines 1602 39 29 and 1602 39 85 were however sufficient to confer upon China the 
status of substantial interest supplier under both Article XXVIII:1 and Article XIII:2, "provide d that 
imports were made during the relevant reference period ".643 Based on the above, we understand 
the European Union to be arguing that, for the purpose of Article XIII:4, the determination of 
which Members hold a substantial supplying interest may be bas ed on the same reference period 
selected by the Member when it initially allocated the TRQ shares among supplying countries, in 
this case 2006 -2008, and may disregard changes in import shares which may have occurred 
subsequent to that time.  
7.470.   In our view, t he determination of which Members have a substantial supplying interest 
under Article XIII:4 cannot be based solely on import shares held during the reference period 
initially used to determine which Members held a substantial supplying interest under 
Article XIII:2, without taking into account changes in market shares that occurred following the 
initial TRQ share allocation. This is because Article XIII:4 aims in part to provide the opportunity 
for a Member which has increased its market share in a product  subject to a TRQ to request, 
among other things, a readjustment of the TRQ shares based on more recent market 
developments. As the panel in EC – Bananas III observed, where a Member not having a 
substantial supplying interest is able to gain market share in the "others " category and possibly 
achieve a substantial supplying interest, this, in turn, "would provide them the opportunity to 
receive a country -specific allocation by invoking the provisions of Article XIII:4 ".644 This recognizes 
that a Member that d id not have a substantial supplier interest during the initial allocation of a TRQ 
can nonetheless become a substantial supplier at a later point in time, such that it can request 
consultation s with the Member that imposed the TRQ to adjust the TRQ shares under 
Article  XIII:4. We note that the European Union itself recognizes that "a Member which was not a 
substantial supplier at the moment of the opening of the TRQ, and which at a certain point in time 
acquires an important import share in the product conc erned (in or outside the TRQ) could claim a 
                                               
640 At the second meeting of the  Panel, the European Union informed the Panel that import data for 
products imported into the European Union becomes available within a delay of three months, on a preliminary 
basis. Definitive data is available within one year. This was confirmed by the E uropean Union in its response to 
Panel question No. 107(c), para 87: "[i]mport data becomes generally available with a three -month delay. But 
this is just preliminary data, which is subject to modification by the reporting authorities of the member States 
for up to one year." The Panel understands that in December 2013, the European Union had at its availability 
definitive data up to December 2012.  
641 We note that the Panel in EC – Bananas III  also did not consider it necessary to rule on the "precise 
import  share" that is required for a Member to have a substantial supplying interest in a product under 
Article  XIII (Panel Report, EC – Bananas III  (Ecuador) , para. 7.84 ). 
642 EU's response to Panel question No. 47(c), para. 146.  
643 EU's response to Panel question  No.124(a), para. 129.  
644 Panel Report, EC – Bananas III , para. 7.76.  WT/DS492/R  
 
- 150 - 
 
  substantial supplying interest under Article XIII:4 ".645 There is nothing in the text of Article XIII:4 
to suggest that the possibility to request consultations is limited only to Members that held a 
substantial su pplying interest when the TRQ was initially allocated under Article XIII:2(d). It 
follows that the reference period used to determine which Members held a substantial supplying 
interest at the moment of the initial TRQ allocation can be different from the reference period 
relied upon to determine substantial supplying interest under Article XIII:4.  
7.471.   For these reasons, we conclude, on the basis of the import shares made available to the 
Panel, that China was a Member having a substantial interest in supplyin g the products under tariff 
lines 1602 39 29 and 1602 39 85 at the time of its request for consultations under Article  XIII:4, 
in December 2013. We disagree with the European Union insofar as it considers that, for the 
purpose of Article XIII:4, the determ ination of which Members hold a substantial supplying interest 
may be based on the reference period initially used to determine the TRQ share allocation, without 
taking into account changes in market shares that occurred following the initial TRQ share 
allocation.  
7.10.3.3   Whether Article XIII:4 imposes an obligation to reallocate TRQ shares upon 
request from a Member with a substantial interest  in supplying the product  
7.472.   Having found that China was a Member with a substantial interest in supplying the 
products under  tariff lines 1602 39 29 and 1602 39 85 at the time of its request for consultations 
under Article XIII:4 in December 2013, the next question we have to consider is whether 
Article  XIII:4 imposed an obligation on the European Union to reallocate the TRQ sh ares in respect 
of these products to reflect China 's increased share of imports. As noted above, the European 
Union submits that Article XIII:4 only sets out a "procedural obligation " to consult, and that the 
Member maintaining a TRQ "is not required to ad just the allocation of the TRQ in response to the 
requests from a Member having a SSI ".646 China disagrees, and submits that "consultations 
followed by no adjustment when the conditions for an adjustment are met, would mean that the 
consultations under Artic le XIII:4 are a dead letter ".647   
7.473.   We recall that Article XIII:4 states that a Member imposing a TRQ shall "consult promptly " 
upon request from a Member holding a substantial supplying interest. On its face, the wording of 
Article XIII:4 only imposes a manda tory obligation to consult upon the request of a Member 
holding a substantial supplying interest. The obligation to "consult " contained in Article XIII:4 is, in 
accordance with its ordinary meaning, an obligation to "confer about ", "deliberate upon ", or 
"consider " the matters listed in Article XIII:4.648 There is nothing in the ordinary meaning of this 
term, or in the text of Article XIII:4, to suggest that the consultations should lead to a specific 
outcome, in this case the reallocation of the TRQ shares. W e note that our reading of Article XIII:4 
conforms to a general understanding of the term "consultations " as used elsewhere in the covered 
agreements.649 Based on the ordinary meaning of the term "consult ", we are therefore inclined to 
agree with the Europea n Union that Article XIII:4 only imposes an obligation to "confer about ", 
"deliberate upon ", or "consider " the matters listed in Article XIII:4, and not an obligation to 
reallocate TRQ shares upon request from a Member with a substantial supplying interest .650  
7.474.   In addition, we consider that the context of Article XIII:4 suggests that it only imposes an 
obligation on the Member receiving a request from a substantial supplier to enter into 
consultations, but not an obligation to reallocate TRQ shares. In partic ular, we have already 
concluded that the obligation to enter into consultations under Article XIII:4 applies in the 
situation where the Member imposing the TRQ has allocated the shares under the first sentence of 
Article XIII:2(d) (allocation by agreement) , and not only in the situations falling under the second 
sentence of Article XIII:2 (d) (unilateral allocation by the Member imposing the TRQ). It follows 
from this interpretation that any Members with whom agreements are reached under the first 
                                               
645 EU's response to Panel question No. 42, para. 124.  
646 EU's first written submission, para. 195; EU's response to Panel question No. 123(a), para. 119.  
647 China's response to Panel questio n No. 49(a), para. 191.  
648 Shorter Oxford English Dictionary , 5th ed, W.R. Trumble, A. Stevenson (eds.) (Oxford University 
Press, 2002), Vol. 1, p. 497.  
649 Article 4 of the DSU, for example, also imposes a mandatory obligation to consult before requesting 
the establishment of a panel, but this obligation to consult clearly does not require that a specific outcome 
emanates from the consultations.  
650 See the EU's first written submission, para. 295; EU's second written submission, para. 182; EU's 
response to Pan el question No. 123(a), para. 119.  WT/DS492/R  
 
- 151 - 
 
  sentence o f Article XIII:2(d) are also substantial suppliers within the meaning of Article XIII:4, and 
that these Members may also therefore request consultations under that provision. Thus, if 
Article  XIII:4 implied an obligation to reallocate the shares of a TRQ t o reflect changes in import 
shares held by substantial suppliers, the beneficiaries of that obligation would include not only new 
substantial suppliers, but also any Members that have already entered into allocation agreements 
pursuant to the first sentenc e of Article XIII:2(d). Imposing an obligation on the Member allocating 
the TRQ to readjust the shares allocated could deprive these agreements of any binding effect, and 
these agreements would no longer constitute a "safe harbour " as far as these same sub stantial 
suppliers are concerned, contrary to the findings of the Appellate Body in EC – Bananas III 
(Article  21.5 – US I) / (Article 2 1.5 – Ecuador II) .651 Thus, the applicability of Article XIII:4 to 
situations where agreements regarding the TRQ allocation  were reached with Members having a 
substantial supplying interest, potentially following years of negotiations, suggests that the 
Member imposing and allocating the TRQ must have a degree of discretion as to whether or not it 
should reallocate the TRQ sha res following a request for consultations under Article XIII:4.  
7.475.   However, we do not consider that this discretion is unfettered, such that a Member 
maintaining a TRQ is free to ignore significant changes in imports shares held by different 
countries followi ng the opening of a TRQ. Our view is consistent with the fact that, in the same 
report, the Appellate Body suggested that Article XIII:4 could require an adjustment of a TRQ 
allocation, including in situations where the TRQ has been allocated by agreement.  When 
examining the allocation agreement originally entered into between the European Communities 
and several other Members,  as contained in paragraph 9 of the Bananas Framework Agreement, 
the Appellate Body stated in passing that:  
In our view, paragraph 9 of the Bananas Framework Agreement, which set an expiry 
date for the agreement at 31 December 2002, provided for consultations between the 
European Communities and "Latin American suppliers that are GATT Members " by 
2001, and the review of the functionin g of the agreement within three years, reflects 
the requirements of Article XIII:4 , which requires consultation with substantial 
suppliers, reappraisal of special factors, and an adjustment of the allocation 
agreement .652 (emphasis added)  
7.476.   Furthermore, we rec all that the panel in EC – Bananas III had also previously suggested 
that if a Member not having a substantial supplying interest is able to gain market share in the 
"others " category and possibly achieve a substantial supplying interest, this, in turn, "would 
provide them the opportunity to receive a country -specific allocation by invoking the provisions of 
Article XIII:4 ".653  
7.477.   We observe that Article XIII:4 was not at issue in either of those cases, and both 
statements were in the nature of obiter dicta  made in passing. We further note that the panel in 
EC – Bananas III  only stated that Article XIII:4 would provide such substantial suppliers with the 
"opportunity to receive " a country -specific allocation, and did not say that the Member applying 
the TRQ woul d have been obliged to allocate a specific share to that supplier in all 
circumstances.654 However, these statements by the Appellate Body and the panel are both 
consistent with our understanding that,  although a Member maintaining a TRQ that has been 
alloca ted among supplying countries must enjoy a degree of discretion as to whether or not to 
reallocate the TRQ shares following a request for consultations under Article XIII:4, such discretion 
is not unfettered.  
7.478.     Proceeding on the understanding that a Member  does not have unfettered discretion to 
refuse to reallocate the TRQ shares upon the request of a Member holding a substantial supplying 
interest following a change in import shares, we do not however see any indication in the wording 
of Article XIII:4 of any time frame as to when or how often such reallocation would have to take 
place, or based on the occurrence of which events. There is no specific guidance in the text of 
Article XIII:4 on whether, for example, the reallocation would have to be done yearl y or instead at 
                                               
651 Appellate Body Report, EC – Bananas III (Article 21.5 – US I) / (Article 21.5 – Ecuador II ), 
para. 338. 
652 Appellate Body Reports in EC – Bananas III (Article  21.5 – Ecuador II) / EC – Bananas III  
(Article  21.5 – US), para. 428.  
653 Panel Report, EC – Bananas III , para. 7.76.  
654 EU's response to Panel question No. 123(b), para. 127.  WT/DS492/R  
 
- 152 - 
 
  some other regular interval, or whether it would have to be done when any Member that did not 
receive a country -specific share experiences a surge in its import shares of the relevant product, 
or even when a Member that has already received  a country -specific share significantly increases 
its share of imports beyond that which it has been allocated. We note in that regard that 
paragraph 9 of the Bananas Framework Agreement, which was at issue in the EC – Bananas III 
(Article 21.5 – US I) / ( Article 21.5 – Ecuador II)  dispute, provided that the initial allocation of the 
TRQ shares was set to expire on 31 December 2002. We understand that the Bananas Framework 
Agreement was agreed in 1994. Paragraph 9 also expressly provided that "full consulta tions with 
the Latin American suppliers that are GATT Members should start no later than in year 2001. "655 
As noted above, the Appellate Body suggested that the foregoing "reflects the requirements of 
Article XIII:4 ".656 While the Appellate Body did not elabor ate, this suggests that an allocation 
agreement which was set to remain in force for eight years was nonetheless considered to meet 
the requirements of Article XIII:4, taking into account that it had an expiry date and provided for 
consultations. Based on the foregoing, we do not see that any purported obligation to reallocate 
TRQ shares arising under Article XIII:4 is subject to any particular time frame.  
7.479.   We note that China itself, in these proceedings, has been unable to clearly specify the time 
frame, f requency and the basis upon which the redetermination of the TRQ allocation would have 
to be made. In its second written submission, China stated for example that the allocation of TRQ 
shares is not static, and must "develop and be updated over time ".657 In the context of its claims 
under Article XIII:1 and XIII:2, China also submitted that the reassessment of the TRQ share 
allocation had to be reviewed and adjusted "from time to time "658; "before a new quota year 
starts "659; "preceding each allocation "660; and "when trade developments occur and the allocated 
shares are no longer representative of the import of a WTO Member in the absence of the 
TRQs. "661 At the second meeting of the Panel, China stated that since the TRQs in dispute operate 
on an annual basis, the Eu ropean Union in this case is required to review the TRQ allocation every 
year, so as to determine whether the allocation should be updated in light of trade 
developments.662 China also submitted that depending on the conditions of the market, a Member 
imposi ng a TRQ would also have the obligation under Article  XIII to adjust the shares of the TRQ 
"on an as -needed basis ".663 We recall that we have ruled that China 's claims based on an ongoing 
obligation under Article XIII:1 and XIII:2 to reallocate or reassess t he TRQs applicable to the 
products covered by the First and Second Modification Packages are outside the Panel 's terms of 
reference.664 Nevertheless, China 's inability, in this case, to clearly specify the time frame, 
frequency and the basis upon which the r edetermination of the TRQ allocation should be made, 
further highlights that insofar as there is an obligation to reallocate under Article XIII:4, there is 
no indication, in the text of this provision, as to when that reallocation should be made.  
7.480.   Finally,  we note that the prevalence and centrality of historical market shares in TRQ share 
allocations also suggest that, insofar as there is indeed an obligation to reallocate the shares 
allocated among supplying countries upon the request of a Member holding a  substantial supplying 
interest under Article XIII:4, there is no obligation to do within any specified time frame, or with 
any particularly frequency.665 
                                               
655 See paragraph 9 of the Bananas Framework Agreement, reproduced in Appellate Body Report, EC – 
Bananas III (Article  21.5 – Ecuador II) / EC – Bananas III (Article  21.5 – US), para. 420.  
656 Appellate Body Reports in EC – Bananas III (Article  21.5 – Ecuador II) / EC – Bananas III  
(Article  21.5 – US), para. 428.  
657 China's second written submission, para. 196.  
658 China's second written submission, pa ra. 121.  
659 China's second written submission, para. 127.  
660 China's second written submission, para. 137; see also para. 147 . 
661 China's second written submission, para. 165.  
662 China's response to Panel question No. 121(a), para. 111. See also China's respon se to the EU's 
question No.2, para. 14.  
663 China's response to the EU's response to Panel question No.2, para. 14.  
664 See section 7.3.2.3 above.  
665 See e.g. J. Jackson, World Trade and the Law of GATT  (Bobbs -Merrill Company, Inc., 1969) pp. 323 -
324; P. Mavro idis, Trade in Goods, 2nd Edition  (Oxford, 2012), p. 85 ("Art. XIII GATT thus, by preserving 
historic shares, does not account for changes in supply and demand"); S. Schropp and D. Palmeter, 
"Commentary on the Appellate Body Report in EC–Bananas III (Artic le 21.5) : Waiver -Thin, or Lock, Stock, and 
Metric Ton?"  World Trade Review , Volume 9, Issue 01, January 2010, pp. 7 -57, at p. 42 ("even after some 
careful study, the authors are unaware of a single case where uncompensated reallocation among quota 
holders  occurred in accordance with Article XIII:2(d), first sentence"); T. Josling, "Agriculture and the Next WT/DS492/R  
 
- 153 - 
 
  7.481.   The issue raised in this case is whether Article XIII:4 can be interpreted as establishing a 
legal obli gation on the importing Member to reallocate TRQ shares among supplying countries, to 
reflect an updated reference period or a reappraisal of special factors, in situations where import 
shares held by different countries have changed in the years immediate ly following the initial TRQ 
allocation agreed among substantial suppliers on the basis of historical market shares. For the 
foregoing reasons, we conclude that insofar as such an obligation arises from Article XIII:4, there 
is no obligation to reallocate the TRQ shares within any particular time frame, and at least not in 
the years immediately following the initial TRQ allocation.  
7.482.   Accordingly, we find that the European Union did not violate Article XIII:4 when it refused 
to reallocate the TRQ allocations arising from the Second Modification Package in May 2014. 
Accordingly, we reject China 's claim of violation under Article XIII:4, insofar as this claim is based 
on the fact that the European Union did not reallocate the TRQ allocation among supplying 
count ries in May 2014, following China 's request for consultations under Article XIII:4.  
7.10.3.4   Whether the European Union refused to consider the need for an adjustment of 
the TRQ shares or the reference period or reappraisal of special factors  
7.483.   The remaining issue i s whether the European Union failed to discharge its obligation to 
consult with China in the sense of refusing to consider the need for an adjustment of the TRQ 
shares determined, for an adjustment of the reference period selected, or for the reappraisal o f 
the special factors involved. In approaching this issue, we are guided by several principles that 
constitute the framework for our review of the facts before us.  
7.484.   First, we consider that the obligation to consult pursuant to Article XIII:4 should not be 
interpreted in an overly formalistic manner. In our view, the fact that the European Union 
apparently did not consider Article XIII:4 to be legally applicable in the circumstances, and agreed 
to consult with China only on a "without prejudice " basis and wi thout acknowledging that China 
was entitled to invoke Article XIII:4666, does not suffice, in and of itself, to establish a violation of 
this provision.667 On the other hand, the fact that the European Union held a meeting with China 
on 19 May 2014 is not, in and of itself, sufficient to establish that the European Union discharged 
its obligation to consider the need for an adjustment of the TRQ shares determined, the reference 
period selected, or the reappraisal of special factors. Rather than adopting a forma listic approach, 
we consider that it is necessary to consider the totality of the information provided to the Panel 
regarding the exchanges that took place between the parties.  
7.485.   Second, we recall that as the complaining party alleging a violation of Articl e XIII:4, the 
burden of proof is on China to demonstrate that the European Union refused to consider the need 
for an adjustment of the proportion determined or of the base period selected, or for the 
reappraisal of the special factors. We recognize that th is may not be an easy burden to discharge. 
                                                                                                                                               
WTO Round", in J. Schott (ed.), The WTO After Seattle  (Institute for International Economics, Washington, July 
2000), pp. 91 -118, at 101 ("[i]n some cas es, allocation is done on a government -to-government basis, usually 
in accordance with historical market shares. But this perpetuates distortions in trade"); S. Tangermann, "The 
European Common Banana Policy", in T. Josling and T. Taylor (eds.), Banana War s: The Anatomy of a Trade 
Dispute  (CABI Publishing, Cambridge, 2002), at p. 55 ("the systems based on a historical reference period … 
tend to freeze the market"); D. Skully, "Tariff rate quotas" in W. Kerr and J. Gaisford (eds.), Handbook on 
International Trade Policy  (Edward Elgar, Cheltenham, 2007), at p. 273 ("[t]he prior -market -share rule, 
although imperfect, has been deemed practical and legitimate. An obvious problem with the prior -market -share 
rule is that things change: suppliers can gain or lose co mparative advantage. Ideally, one would reallocate 
quota shares to reflect such changes. But this proves difficult to negotiate, suppliers who face an erosion of 
their quota shares tend to be adamantly opposed to any change. As a result, historical allocat ion is infrequently 
revised"); A. Sykes, The WTO Agreement on Safeguards: A Commentary  (Oxford University Press, 2006), 
pp. 223-224 ("[t]o be sure, in dynamic industries where market shares change significantly and quickly, an 
allocation of shares on histo rical information may be quite imperfect, but a workable alternative may be 
difficult to devise"). At the second meeting of the Panel, the European Union posed the rhetorical question of 
how it was possible "that all scholars that ever wrote about Article XIII have never seen this yearly updating 
obligation?" (EU's opening statement at the second meeting of the Panel, para. 40)  
666 See EU's first written submission, para. 291; Exhibit CHN -40 
667 To find otherwise would mean that the European Union breached its obligation under Article XIII:4 to 
enter into consultations, not on the grounds that it refused to enter into consultations, but on the grounds that 
it entered those consultations without acknowledging that it was legally required to do so, and without 
acknowledging that the consultations were being conducted, legally speaking, pursuant to Article XIII:4.  WT/DS492/R  
 
- 154 - 
 
  We note that in assessing whether China has discharged its burden, we are confined to the facts 
that the parties have provided to us.  
7.486.   Third, we consider that consultations must be meaningful, and cannot be "mere 
formalities ".668 As indicated by the International Court of Justice in the North Sea Continental Shelf  
cases, State parties to international negotiations "are under an obligation so to conduct 
themselves that the negotiations are meaningful, which will not be  the case when either of them 
insist upon its own position without contemplating any modification to it ".669 While Article XIII:4 
speaks of consultations, rather than negotiations, the principle that discussions between states be 
meaningful also applies to c onsultations.  
7.487.   There is no disagreement between the parties that a meeting was held between them on 
19 May 2014, subsequent to China 's request for consultations under Article XIII:4 on 19 December 
2013. In its panel request and first written submission, Ch ina even characterizes this meeting as 
"consultations held on 19 May 2014 ".670 China claims, however, that the European Union refused 
to enter into "meaningful consultations ", because the European Union denied during those 
consultations that Article XIII:4 a pplied to the determination of the TRQs on the poultry products 
at issue in this dispute,671 and "failed to reappraise the quota allocation to account for the SPS 
measures. "672 According to China, its "right to consultation under Article XIII:4 was effectively  
denied ".673  
7.488.   The European Union responds however that China did not duly justify its claim of being a 
Member with a substantial interest when it lodged its request.674 It submits that China 's 19 
December 2013 request was "formulated in very general terms "675, and did not provide any import 
figures to justify its request nor did it indicate on which yearly period its request was based.  
7.489.   We recall that China 's request for consultations under Article XIII:4 stated that:  
China has a substantial supplying interest i n several of the tariff lines concerned, as 
evidenced by the statistics of imports of the European Union from China in the most 
recent years prior to the adopting of the new tariff regime. However, the new tariff 
regime, particularly the discriminatory all ocation of tariff quotas contained therein, 
seriously prejudiced China 's export interest. Indeed, in the eight months starting from 
March 1, 2013, imports from China under the tariff lines concerned declined by more 
than 50% in value, compared with the sam e period in 2012.676 
7.490.   The letter also referred to China 's previous requests to enter into negotiations or 
consultations under Article XXVIII, dated 9 May 2012 and 2 October 2012, and to the European 
Union 's notification of the conclusion of the Article XXVIII  negotiations for the Second Modification 
Package.  
7.491.   We note that China 's request to enter into consultations under Article XIII:4 does not 
contain any reference to the specific tariff lines upon which its request is based. The Note Verbal e 
refers to Counci l Regulation (EC) No. 1218/2012, through which a new tariff regime on the tariff 
                                               
668 See Lac Lanoux Arbitration  (Spain v. France), (1957) 12 R.I.A.A. 281, 315 at para. 22; 24 I.L.R. 
101, 139 at para. 22 . 
669 North Sea Continental Shelf  (Federal Republic of Germany v. Denmark; Federal Republic of Germany 
v. Netherlands) , Judgment, I.C.J. Reports 1969, at para. 85.   
670 The panel request includes, as the relevant measure, the "[r]efusal by the European Union in 
consultations held on 19 May 201 4 under Article XIII of the GATT 1994 to adjust the TRQs on the basis of 
recent import statistics establishing China's substantial supplying interests as had been requested by letter of 
Ambassador Yu of 19 December 2013" (China's request for the establishm ent of a panel, Section I.B item(v), 
p. 3). The claim under Article XIII:4 likewise refers to "The EU's refusal in consultations with China on 19 May 
2014 to consider an adjustment of the allocation of the TRQs based on a change in the base period or a 
reappraisal of the special factors involved is inconsistent with GATT 1994 Article XIII:4" (China's request for 
the establishment of a panel, Section II.B item (viii)). At paragraph 256 of its first written submission, China 
states that the European Union "de nied during consultations in May 2014 that Article XIII applied".  
671 China's first written submission, paras. 253 -257. 
672 China's second written submission, para. 194.  
673 China's first written submission, para. 256.  
674 EU's response to Panel question No. 123, para. 121.  
675 EU's response to Panel question No. 123, para. 124.  
676 Exhibit CHN -39. WT/DS492/R  
 
- 155 - 
 
  items concerned had been adopted , suggesting that the request for consultations may have been 
in respect of a ll of the tariff lines concerned by Council Regulation (EC) No. 12 18/2012 ; however,  
the Note Verbal e refers to China's substantial supplying interest in "several of the tariff lines  
concerned ", implying that in others it did not have a substantial supplying interest . It appears from 
the submissions of the European Union that it was not until the meeting of 19 May 2014 that China 
indicated that its request was more precisely based on its belief that it held a substantial supplying 
interest in products classified in tariff lines 1602 39 29 and 1602 39 85.677 This has been 
recognized by China in these proceedings.678 We also note that China 's request does not indicate 
the issues on which China was seeking to consult upon under Article XIII:4. China simply referred 
to the provisions of Article XIII:4 requiring a Member imposing a TRQ to consult upon request with 
a Member holding a substantial interest regarding the need for an adjustment of the TRQ shares, 
the selection of a base period and the consideration of special factors. It did not state on which of 
these grounds, specifical ly, it sought to consult with the European Union. Again, it appears from 
the record that it was not until the 19 May 2014 meeting that China informed the European Union 
that it was seeking the readjustment of the TRQ shares of tariff lines 1602 39 29 and 1 602 39 85 
on the basis of a different reference period, taken into account the existence of the SPS measures 
as special factors.679 Furthermore, China 's request for consultations under Article XIII:4 referred to 
its multiple earlier requests to be recognized  as a substantial supplier in the different context of 
the negotiations under Article XXVIII, and those requests had been based on several different 
grounds. In response to a question by the Panel, China has indicated that it did provide the 
European Union  with the trade data showing that it had, at least for tariff lines 1602 39 29 and 
1602 39 80, a substantial supplying interest.680  
7.492.   We are sympathetic to China 's argument that there is no specific guidance in Article XIII:4 
on how a Member should make its r equest for consultations under that provision , and we do not 
consider that there is any particular "specificity" requirement that can be read into 
Article  XIII:4 .681 However, we note that China has consistently taken an "all inclusive " approach 
with respect to its claims of interest in supplying the products covered by the First and Second 
Modification Packages , in the sense of alleging a substantial or principal supplying interest in all of 
the tariff lines at issue, without distinguishing between the differ ent products at issue, and the 
different levels of importation into the European Union from China in respect of those products . 
China 's reference in its letter dated 19 December 2013 to its requests for negotiations or 
consultations under Article XXVIII is  illustrative in this regard. To recall, on 9 May 2012, China 
requested to enter into negotiations with the European Union, under Article XXVIII, on the basis 
that it was a Member with a principal supplying interest "with respect to relevant tariff lines ".682 
China also provided statistics on imports into the European Union from China of products classified 
under four tariff lines (1602 20 10, 1602 39 29, 1602 39 40 and 1602 39 80) for the years 2009, 
2010 and 2011. On 2 October 2012, China reiterated its req uest to enter into consultations with 
respect to "relevant tariff lines of poultry products " as notified by the European Union, and 
contested the use of the 2006 -2008 reference period.683 In these proceedings, China has 
confirmed that it claimed a substantia l supplying interest under Article XXVIII "for all of the tariff 
lines covered by the First Modification Package "684 and it claimed a "principal supplying interest 
with regard to the relevant tariff lines mentioned in the EU 's notification of its intention t o 
withdraw concessions " under the Second Modification Package .685 With respect to its request for 
consultations under Article XIII:4, China has confirmed that it was claiming a substantial supplying 
interest "for all of the tariff lines covered by the Second  Modification Package ".686 These 
statements by China highlight that China has consistently adopted an "all inclusive " approach to its 
claim s of interests in the products covered by both the First and the Second Modification Package. 
China 's general approach to extend its claims of interests to all the products covered by the 
                                               
677 EU's first written submission, para 292; EU's response to Panel question No. 47(a), para. 140.  See 
also the EU's response to Panel question No. 123, para. 126.  
678 China's comment on the EU's response to Panel question No. 123, para. 74.  
679 EU's response to Panel question No. 47(a), para. 140. See also the EU's second written submission, 
para. 179.  
680 China's response to Panel question No. 128, para. 123.  
681 China's comment on the EU's response to Panel question No. 123, para. 73.  
682 Letter from China to the EU requesting to enter into negotiations under Article XXVIII (9 May 2012) 
(Exhibit CHN -50). 
683 Letter from China to the EU (2 October 2012) (Exhibit CHN -30). See also China's  opening statement 
at the first meeting of the Panel, para. 37.  
684 China's response to Panel question No. 17(b), para. 101, referring to Exhibit CHN -16. 
685 China's response to Panel question No. 17(b), para. 102, referring to Exhibit CHN -29. 
686 China's respon se to Panel question No. 17 (b), para. 103.  WT/DS492/R  
 
- 156 - 
 
  modification packages further confirms that China 's request to consult under Article XIII:4, based 
on its substantial supplying interest in "several of the lines concerned ", was lacking i n specificity 
regarding which tariff lines and special factors were concerned, and on which grounds.  
7.493.    In addition, we note that there is disagreement between the parties as to the events that 
took place after the 19 May 2014 meeting. The European Union has  indicated that it invited China 
to provide it with more information, including the trade figures upon which it based its claims, but 
that China did not follow -up.687 China has indicated that the European Union did not seek 
clarification or question China 's claim of substantial supplying interest for the purpose of 
Article  XIII:4, "either at or after the meeting ".688 China has also informed us that it again sought 
to consult with the European Union regarding the need for a readjustment of the TRQ shares in 
September 2015, after the beginning of the current proceedings.689 The European Union has for its 
part indicated that the Article XIII:4 consultations between the parties could be considered as still 
ongoing.690 China responds that the European Union agreed to "continue consultation in form, not 
in substance ".691  
7.494.   We have concluded that China held a substantial supplying interest in tariff lines 1602 39 
29 and 1602 39 85 at the time of its request under Article XIII:4. However, having considered the 
limited informati on that has been provided to the Panel regarding the issues touched upon at the 
May 2014 meeting, and the limited information provided to the Panel regarding further exchanges 
between the parties following that meeting, we consider that there are insuffici ent agreed facts 
concerning the conduct of the consultations to determine whether the European Union acted 
inconsistently with Article XIII:4. Accordingly, recalling that China has the burden of proof, we 
conclude that China has failed to discharge its bur den of demonstrating that the European Union 
refused to consider the need for an adjustment of the proportion determined or of the base period 
selected, or for the reappraisal of the special factors involved.  
7.10.4   Conclusion  
7.495.   Based on the foregoing, we find tha t China has failed to demonstrate that the European 
Union violated Article XIII:4 by refusing to enter into meaningful consultations with China . 
7.11  Claims under Article II:1 of the GATT 1994  
7.11.1   Introduction  
7.496.   China claims that the European Union 's application of the higher out -of-quota tariff rates 
arising from the First and Second Modification Packages is in violation of Article II:1 of the 
GATT  1994 because those rates exceed the bound rates currently inscribed in the EU Schedule of 
concessions.692 We understand C hina to argue that because the changes have not yet been 
incorporated into the EU Schedule through the certification procedure, they have no legal effect to 
replace the existing bound duties. In China 's view, therefore, the absence of certification means 
that the bound rates that existed in the EU Schedule prior to the completion of the Article XXVIII 
negotiations remain unchanged, and that the European Union 's application of the higher out -of-
quota tariff rates violates Article II:1.  
7.497.   The European Union su bmits that its application of the higher out -of-quota rates does not 
violate Article II:1.693 We understand the European Union to argue that there is no violation of 
                                               
687 EU's first written submission, para. 293; EU's secon d written submission, para. 179 ; EU's comment 
on China's response to Panel question No. 128, para. 81.  
688 China's comment on the EU's response to Panel questio n No. 125, para. 78.  
689 China's second written submission, para. 195.  
690 EU's opening statement at the second meeting of the Panel, para. 105, EU's comments on China's 
response to Panel question No. 128, para. 80 and EU's response to Panel question No. 47, p ara. 139.  
691 China's response to Panel question No. 128, para. 123.  
692 China's arguments regarding its claim under Article II and related points are found in China's first 
written submission, paras. 260 -270; China's opening statement at the first meeting of the Panel, paras. 113 -
118; China's responses to Panel question Nos. 50, 55 -57; China's second written submission, paras. 197 -201; 
parties' responses, and comments on one another's responses, to Panel question Nos. 94 -105. 
693 The European Union's arguments r egarding the claim under Article II and related points are found in 
EU's first written submission, paras. 298 -302; EU's responses to Panel question Nos. 51 -54, 56 -57; EU's WT/DS492/R  
 
- 157 - 
 
  Article II:1 because, contrary to what China argues, the certification of the changes to its  Schedule 
is not a legal prerequisite for giving effect to the modifications agreed in Article XXVIII 
negotiations .  
7.11.2   Factual background  
7.498.   The in -quota tariff rate for each of the TRQs at issue in this dispute is the same or lower 
than the bound rate currentl y inscribed in the EU Schedule for the tariff line in question. However, 
it is not in dispute that the out -of-quota rates that the European Union currently applies to the 
poultry products at issue resulting from its Article XXVIII negotiations are in exces s of the bound 
rates currently inscribed in its Schedule.694  
7.499.   As regards the First and Second Modification Packages, we recall that, at the time of this 
Report, the bound rates inscribed in its Schedule (the prior tariff rate) and the rates that the 
European  Union currently applies (the new out -of-quota tariff) are as follows695: 
First Modification Package  
Tariff item number  Prior tariff rate  New in -quota tariff rate  New out -of-quota tariff 
rate 
0210 99 39  15.4%  15.4%  1,300 EUR/MT  
1602 31  8.5%  8.5%  1,024 EUR /MT 
1602 32 19  10.9%  8.0%  1,024 EUR/MT  
 
Second Modification Package  
Tariff item number  Prior tariff rate  New in -quota tariff rate  New out -of-quota tariff 
rate 
1602 32 11  867 EUR/MT  630 EUR/MT  2,765 EUR/MT  
1602 32 30  10.9%  10.9%  2,765 EUR/MT  
1602 32 9 0 10.9%  10.9%  2,765 EUR/MT  
1602 39 21  867 EUR/MT  630 EUR/MT  2,765 EUR/MT  
1602 39 29  10.9%  10.9%  2,765 EUR/MT  
1602 39 40  10.9%  10.9%  2,765 EUR/MT  
1602 39 80  10.9%  10.9%  2,765 EUR/MT  
 
7.500.   As regards both the First and Second Modification Packages, the chang es that the 
European Union, Thailand and Brazil agreed upon in the negotiations under Article XXVIII:5 have 
been notified to all Members, but those changes have not yet been incorporated into the EU 
Schedule by means of certification.  
7.501.   The European Union h as submitted for certification the changes to its Schedule resulting 
from the Article XXVIII:5 negotiations relating to the First Modification Package, but at the time of 
the Report the draft Schedule has not yet been certified. Specifically, on 24 March 2 014, the 
European Union communicated for certification a re vised Schedule which contained 
"consolidations, modifications and rectifications in this Schedule, in relation to the previous 
certified CXL schedule of the EU " (Schedule CXL – EC15) .696 The draft Sc hedule of the European 
Union (Schedule CLXXIII – EU25), was circulated to the WTO Membership on 25 April 2014, in 
                                                                                                                                               
second written submission, paras. 184 -188; parties' responses, and comments on one a nother's responses, to 
Panel question Nos. 94 -105. 
694 See EU's response to Panel question No. 51, para. 151, p. 44; China's second written submission, 
para. 8.   
695 See the  import statistics in section 7.2.4 above.  
696 G/MA/TAR/RS/357, 25 April 2014 , page 1.  WT/DS492/R  
 
- 158 - 
 
  document G/MA/TAR/RS/357.697 The European Union confirmed in these proceedings that the 
results of the Article XXVIII negotiations under the Fir st Modification Package are included in this 
draft Schedule698, and that the certification process of the changes to the draft Schedule 
communicated on 24 March 2014 was still ongoing .699  
7.502.   At the time of this Report, t he European Union has not yet submitted fo r certification the 
changes to its Schedule resulting from the Article XXVIII:5 negotiations relating to the Second 
Modification Package. The European Union explained that as the Second Modification Package was 
concluded in 2012, after the enlargement of t he European Union to 27 member States, it was 
considered "more appropriate to submit for certification the changes included in that package as 
part of the draft schedule EU27 " which will be submitted "as soon as the draft EU25 draft schedule 
is certified ".700  
7.503.   Furthermore, we recall that although China does not contest that the changes that the 
European Union, Thailand and Brazil agreed upon in the negotiations under Article XXVIII:5 have 
been notified to all Members in accordance with paragraph 6 of the Procedures for Negotiations 
under Article XXVIII , the European Union confirms that it did not notify all Members of the date on 
which the changes agreed in the negotiations under Article XXVIII:5 entered into force as referred 
to in the second sentence of para graph 7 of those same procedures. Specifically, the European 
Union indicated that although it had informed all of the Members with a principal or substantial 
supplying interest, "[t]he date [of] entry into force of those changes has not been notified " under 
paragraph 7 of the Procedures for Negotiations under Article XXVIII.701 
7.11.3   Paragraph 1 of the Procedures for Modification and Rectification of Schedules 
and paragraph 7 of the Procedures for Negotiations under Article XXVIII  
7.504.   The Procedures for Modification an d Rectification of Schedules and the Procedures for 
Negotiations under Article XXVIII set forth a number of requirements that Members are expected 
to follow when they seek to modify or withdraw concessions pursuant to Article XXVIII. In the light 
of the im portance of the certification procedures and the objective of ensuring that the authentic 
texts of Schedules annexed to the General Agreement are up to date and properly reflect the legal 
rights and obligations of Members, it is important to recall at the outset that several issues fall 
outside of the scope of the Panel 's terms of reference in the present case.  
7.505.   Paragraph 1 of the Procedures for Modification and Rectification of Schedules confirms that 
"[c]hanges in the authentic texts of Schedules annexed to the General Agreement which reflect 
modifications resulting from action under … Article XXVIII shall be certified by means of 
Certifications ", and requires that a "draft of such change shall be communicated to the Director -
General within three months  after the action has been completed ".702 As regards both the First and 
Second Modification Packages, the European Union accepts that the "action was completed " no 
later than the time that it notified Members of the conclusion of the negotiations pursuant to 
paragraph 6 of the Procedures for Negotiations under Article XXVIII.703  
7.506.   Paragraph 7 of the Procedures for Negotiations under Article XXVIII provides that Members 
will be free to give effect to the changes agreed upon in negotiations under Article XXVIII:5 as 
from the date on which the conclusion of all the negotiations have been notified, but then requires 
that a "notification shall be submitted … of the date on which these changes will come into force ". 
This requirement, set forth in the second sentence of pa ragraph 7, is linked to the requirement, 
                                               
697 An addendum (G/MA/TAR/RS/357/Add.1) was circulated on 1 September 2016, and a corrigendum 
to the addendum was circulated on 19 September 2016. In light of this addendum, the three -month period of 
review is currently ongoing.  
698 EU's response to Panel quest ion No. 54, para. 158.  
699 EU's first written submission, para. 299. See also the EU's response to Panel question No. 52, 
para. 153. 
700 EU's response to Panel question No. 54(c), para 159.  
701 EU's response to Panel question No. 97.  
702 Emphasis added.  
703 EU's re sponse to Panel question No. 52, para. 152. The European Union states that "[i]n the case at 
hand, the relevant 'action' is the conclusion of modification agreements with Brazil and Thailand, as required by 
Article XXVIII. As explained in the EU's first wr itten submission (para. 302), such action has been completed 
and notified to the WTO in accordance with paragraph 6 of the Procedures for negotiations under 
Article  XXVIII."  WT/DS492/R  
 
- 159 - 
 
  set forth in the chapeau of the Ad Note to Article XXVIII, that Members "shall be informed  
immediately of all changes in national tariffs resulting from recourse to this Article ".704 These 
requirements both support th e objectives of transparency, security and predictability.   
7.507.   We recall that, in this case, China has stated that "[t]he Panel is not required nor 
requested to make a finding that the EU acted inconsistently  with paragraph 7 and 
paragraph  1".705 We have found that i nsofar as China is making any claims of inconsistency with 
these procedural requirements, such claims have not been made in a sufficiently clear and timely 
manner, and are therefore not properly before the Panel.706 Accordingly, our analysis of China 's 
claims under Article  II:1 of the GATT 1994 is confined to the issues that fall within the scope of the 
Panel 's terms of reference. This does not mean or imply that the European Union is in any way 
absolved or exempted from complying with the requirements set forth in the Procedures for 
Modification and Rectification of Schedules and the Procedures for Negotiations under 
Article  XXVIII.  
7.11.4   Analysis by the Panel   
7.508.   The issue raised by China 's claim is whether the European Union has acted inconsistently 
with Arti cle II:1 by applying the higher out -of-quota tariff rates agreed with Brazil and Thailand in 
the Article XXVIII:5 negotiations prior to the changes being incorporated into its Schedule through 
the applicable certification procedure. To resolve this issue, the Panel must determine whether 
certification is a legal prerequisite that must be completed before a Member modifying its 
concessions can proceed to implement the changes agreed upon in Article XXVIII negotiations at 
the national level, without violating  Article II of the GATT 1994.  
7.509.   China 's claims and the arguments of the parties concern the meaning of and relationship 
between various provisions of the GATT 1994, the Procedures for Negotiations under 
Article  XXVIII, and the Procedures for Modification and  Rectification of Schedules. We will begin 
our analysis by examining the issue raised in the light of the relevant provisions of the GATT 1994, 
and we will then proceed to consider the provisions found in the two sets of Procedures.  
7.510.   Article II is entitled  "Schedules of Concessions ". Article II:7 provides that "[t]he Schedules 
annexed to this Agreement are hereby made an integral part of Part I of this Agreement ". 
Article  II:1 sets forth the following obligations:  
(a)  Each Member shall accord to the commer ce of the other Members treatment no 
less favourable than that provided for in the appropriate Part of the appropriate 
Schedule annexed to this Agreement.  
(b)  The products described in  Part I  of the Schedule relating to any Member, which 
are the products of territories of other Members, shall, on their importation into the 
territory to which the Schedule relates, and subject to the terms, conditions or 
qualifications set forth in that Schedule, be exempt from ordinary customs duties in 
excess of those set forth and provided therein.   
7.511.   Article II is one of the key provisions of the GATT 1994, and of the entire WTO legal 
system. The importance of Schedules of concessions, as sources of predictable and enforceable 
legal obligations, has been recognized by numer ous panels and by the Appellate Body. Among 
other things, it has been recognized that "a basic object and purpose of the GATT 1994, as 
reflected in Article II, is to preserve the value of tariff concessions negotiated by a Member with its 
trading partners,  and bound in that Member 's Schedule ".707  
7.512.   On the other hand, one of the specific objects and purposes of Article XXVIII is to allow 
Members to make tariff concessions by providing them with flexibility to withdraw or modify those 
concessions subsequently, i f necessary, in accordance with the procedures provided for therein. In 
this way, the right to modify or withdraw concessions supports the overarching object and 
purpose, which finds reflection in the preambles of both the GATT 1994 and the WTO Agreement, 
                                               
704 Emphasis added.  
705 China's response to Panel question No. 99, para. 74.  
706 See section 7.3.3.1.  
707 Appellate Body Report, Argentina – Textiles and Apparel , para. 47.  WT/DS492/R  
 
- 160 - 
 
  of Members "entering into  reciprocal and mutually advantageous arrangements directed to the 
substantial reduction of tariffs and other barriers to trade ".   
7.513.   Article II of the WTO Agreement stipulates that "[t]he agreements and associated legal 
instruments included in Annexes 1, 2 and 3 (hereinafter referred to as "Multilateral Trade 
Agreements ") are integral parts of this Agreement, binding on all Members. " The general rule for 
amending provisions of the covered agreements is set forth in Article X of the W TO Agreement, 
entitled "Amendments ". Article X:2 provides that amendments to certain provisions shall "take 
effect only upon acceptance by all Members "; Article X:3 provides that amendments to other 
provisions "shall take effect for the Members that have a ccepted them upon acceptance by two 
third of the Members "; and Article X:4 states that amendments "of a nature that would not alter 
the rights and obligations of Members " shall "take effect for all Members upon acceptance by two 
thirds of the Members ".  
7.514.   However, in EC – Bananas III (Article 21.5 – Ecuador II)  / EC – Bananas III (Article 21.5 – 
US), the Appellate Body confirmed that the modification of Schedules "does not require formal 
amendment " pursuant to Article X of the WTO Agreement, and is not subjec t to the "formal 
acceptance process " provided for in Article X:7 of the WTO Agreement. The Appellate Body set 
forth its understanding of the relationship between Article X of the WTO Agreement and 
Article  XXVIII of the GATT 1994 as follows:  
Article  X of th e WTO Agreement  sets out rules and procedures to amend the 
provisions in the Multilateral Trade Agreements. Article  X specifies the process and 
quorum required to amend particular provisions or covered agreements.  
Amendments, unlike waivers, are not limit ed in time and create new or modify 
existing rights and obligations for WTO Members. Special rules on acceptance and 
entry into force apply, depending on the provisions that are being amended and on 
whether the amendment "would alter the rights and obligat ions of the Members ".  
Amendments to the WTO Agreement  and to a Multilateral Trade Agreement in Annex  1 
enter into force following a formal acceptance process pursuant to Article  X:7. 
The modification of Schedules of Concessions, which are an integral part  of the GATT 
1994, does not require a formal amendment pursuant to Article  X of the WTO 
Agreement , but is enacted through a special procedure set out in Article  XXVIII of the 
GATT 1994 or through multilateral rounds of tariff negotiations.  Pursuant to 
Article XXVIII, a Member may modify or withdraw a concession annexed to the GATT 
1994 by negotiation and agreement with other Members that are "primarily 
concerned ", and in consultation with Members that have a substantial interest in the 
concession.  Article  XXVIII:2 provides that, in an agreement on the renegotiation of a 
concession, which may include compensatory adjustment, WTO Members "shall 
endeavour to maintain a general level of reciprocal and mutually advantageous 
concessions not less favourable to tr ade than that provided for in this Agreement prior 
to such negotiations ".  If an agreement cannot be reached, the modifying Member is 
free to modify or withdraw the concession, while other Members that are primarily 
concerned or have a substantial interest  in the concession are free to withdraw 
substantially equivalent concessions initially negotiated with the modifying Member.708 
7.515.   Thus, the Appellate Body explained that Article XXVIII is a "special procedure " through 
which the "modification " of a Schedule "is enacted ".  China has suggested that "[c]onsistent with 
the principle set forth in Article 40 of the Vienna Convention on the Law of Treaties, unless the 
treaty otherwise provides, amendments to a multilateral treaty can only occur with the 
participation o f all contracting States ".709 We observe however that Article 40 of the Vienna 
Convention is, by its own terms, a default rule that applies "[u]nless the treaty otherwise 
provides ".710 In stating that Article XXVIII is a "special procedure " through which the 
"modification " of a Schedule "is enacted ", the Appellate Body has recognized that Article XXVIII is 
a sui generis  procedure.  
                                               
708 Appellate Body Reports, EC – Bananas III (Art. 21.5 – Ecuador II)  / EC – Bananas III (Art. 21.5 – 
US), paras. 384 -385. 
709 China's response to Panel question No. 50, footnot e 70. 
710 Article 40(1) of the Vienna Convention states that "[u]nless the treaty otherwise provides, the 
amendment of multilateral treaties shall be governed by the following paragraphs."  WT/DS492/R  
 
- 161 - 
 
  7.516.   Article XXVIII is entitled "Modification of Schedules ". Paragraph 1 provides that on the first 
day of every 3 -year period a Member may seek to modify or withdraw a concession included in the 
appropriate Schedule annexed to the Agreement through negotiation with those Members with 
initial negotiating rights and a principal supplying interest, and in consultation with those Members 
with a substantial supplying interest. Paragraph 3 of Article XXVIII addresses the situations in 
which agreement cannot be reached with the Members engaged in the negotiations, or where the 
agreement reached is not satisfactory to Members with a substantial su pplying interest. In the 
case of reserved negotiations under paragraph 5, a Member may reserve "the right … to modify 
the appropriate Schedule " in accordance with the procedures of paragraphs 1 to 3.  Paragraph 5 
states that if a Member so elects, other Me mbers with initial negotiating rights or the requisite 
supplying interest "shall have the right ", during the same period, "to modify or withdraw ", in 
accordance with the same procedures, concessions initially negotiated with that Member.   
7.517.   Paragraph 3(a) o f Article XXVIII provides that where agreement with the Members 
concerned cannot be reached, the Member proposing to modify or withdraw the concession "shall, 
nevertheless, be free to do so ". Paragraph 3(a) then stipulates that if such action is taken, the  
Members concerned shall then be free "not later than six months after such action is taken, to 
withdraw, upon the expiration of thirty days from the day on which written notice of such 
withdrawal is received by the Members, substantially equivalent conces sions initially negotiated 
with the applicant Member ". Article XXVIII:3(b) further provides that if agreement with Members 
concerned is reached, but the agreement reached is not satisfactory to Members having a 
substantial supplying interest, those Members  "shall be free, not later than six months after the 
action under such agreement is taken, to withdraw, up the expiration of thirty days from the day 
on which written notice of such withdrawal is received by the Members, substantially equivalent 
concession s initially negotiated with the applicant Member ".  
7.518.   China considers that the prior incorporation of such changes into the Schedule through 
certification is a legal prerequisite for giving effect to the changes in the context of 
Article  XXVIII:3.711 We have d ifficulty reconciling such an interpretation with the ordinary meaning 
of this provision . The specification of a timeframe for the modification or withdrawal of 
concessions, by reference to the point in time when "such action is taken " by the applicant 
Member or when "action under such agreement is taken ", implies that this may be undertaken 
prior to the changes being introduced into the Schedule through the certification process. 
Article  XXVIII:3 addresses situations in which agreement cannot be reached wi th the Members 
engaged in the negotiations, or where the agreement reached is not satisfactory to Members with 
a substantial supplying interest. Insofar as the terms of Article XXVIII:3 imply that Members 
concerned are "free" to withdraw or modify concessi ons prior to certification of the changes to the 
Schedule in those situations, then we consider that such a right must exist a fortiori  where, as in 
the present case, the modification has been agreed by the Members holding initial negotiating 
rights, a pri ncipal supplying interest, and a substantial supplying interest.712 
7.519.   The Procedures for Modification and Rectification of Schedules, which we examine in 
greater detail below, provide that changes in the authentic texts of Schedules annexed to the 
General Agre ement "which reflect modifications resulting from action under Article II, Article XVIII, 
Article XXIV, Article XXVII or Article XXVIII " shall be certified by means of certifications.  The 
Articles specified in paragraph 1 of the Procedures all provide for  actions that may be taken to 
modify concessions, which are then submitted for certification under the Procedures. Articles XVIII, 
XXIV and XXVII each use a similar phrase to that used in paragraph 3 of Article XXVIII, namely 
that the Member concerned "shall be free to modify or withdraw " the concession, and affected 
Members that do not agree to the modification of concession "shall be free to withdraw 
substantially equivalent concessions ".713 These provisions specify the conditions, including the 
                                               
711 China's response to Panel question No. 103(a).  
712 We recall our earl ier finding, in the context of examining China's claims under Article XXVIII:1 of the 
GATT 1994, that China has failed to demonstrate that it held a principal or substantial supplying interest in the 
concessions at issue in the First and Second Modificatio n Packages.  
713 Article XVIII relates to Governmental Assistance to Economic Development.  Section A: paragraph 7 
provides that countries with a low standard of economic development may, in order to promote the 
establishment of a particular industry, negotia te with those Members with initial negotiati ng rights or 
substantial supply interest. If agreement is reached "they shall be free to modify or withdraw concessions 
under the appropriate Schedules to this Agreement in order to give effect to such agreement" .  Even if 
agreement is not reached, in certain circumstances the Member "shall be free to modify or withdraw the 
concession" or "shall be free to proceed with such modification or withdrawal". Paragraph 6 of Article XXIV WT/DS492/R  
 
- 162 - 
 
  timeframes,  when the Members concerned "shall be free to modify or withdraw " the concession. In 
our view, the argument that prior incorporation of such changes into the Schedule through 
certification is a legal prerequisite for giving effect to the changes in the con text of Article XXVIII:3 
is also difficult to reconcile with the terms of these other provisions  of the GATT 1994.   
7.520.   Continuing with our examination of the text of the GATT 1994, we note that the chapeau 
of the Ad Note to Article XXVIII states that negotiat ions to modify or withdraw concessions under 
Article XXVIII should be conducted "with the greatest possible secrecy in order to avoid premature 
disclosure of details of prospective changes ", and then states that Members "shall be informed 
immediately of al l changes in national tariffs resulting  from recourse to this Article ".714 Thus, the 
chapeau distinguishes the "prospective changes " that are the subject of negotiations from the 
subsequent "changes in national tariffs resulting from " those negotiations. By distinguishing the 
"prospective changes " from the "changes in national tariffs resulting from " Article XXVIII, and 
requiring that Members be informed immediately of the latter, the wording of the chapeau implies 
that Members may be informed of those change s in national tariffs after they have already been 
made.715  
7.521.   Thus, our review of the foregoing provisions of the GATT 1994 reinforces the Appellate 
Body's statement that Article XXVIII is a special procedure through which the "modification " of a 
Schedule "is enacted ".716  We now turn to t he Procedures for Negotiations under Article XXVIII, 
which set forth the procedural arrangements to be followed when a Member seeks to modify or 
withdraw a concession in its Schedule. As explained earlier in our Report, we agre e with the 
parties and third parties expressing a view on the matter that these procedures qualify, at a 
minimum, as "decisions ", "procedures " or "customary practices " within the meaning of 
Article  XVI:1 of the WTO Agreement.717  
7.522.   These Procedures provide in relevant part as follows:  
6. Upon completion of all the negotiations the contracting party referred to in 
paragraph 1 above should send to the secretariat, for distribution in a secret 
document, a final report on the lines of the model in Annex C attached hereto.  
7.  Contracting parties will be free to give effect  to the changes agreed upon in the 
negotiations as from the first day of the period referred to in Article XXVIII:1, or, in 
the case of negotiations under paragraph 4 or 5 of Article XXVIII, as fro m the date on 
which the conclusion of all the negotiations have been notified as set out in paragraph 
                                                                                                                                               
provides that in the establishment  of a customs union or free trade area, where a Member proposes to increase 
any rate of duty inconsistently with the provisions of Article II, "the procedure set forth in Article XXVIII shall 
apply".  Paragraph 5 of the Understanding on the Interpretation of Article XXIV of the General Agreement on 
Tariffs and Trade 1994 elaborates on the procedures in paragraph 6 of Article XXIV. It includes the following: 
"[w]here, despite such efforts, agreement in negotiations on compensatory adjustment under Article XX VIII of 
GATT 1994 cannot be reached within a reasonable period from the initiation of negotiations, the customs union 
shall, nevertheless, be free to modify or withdraw the concessions; affected Members shall then be free to 
withdraw substantially equivale nt concessions in accordance with Article XXVIII". Article XXVII, which deals 
with countries which do not or cease to become WTO Members provides: "[a]ny Member shall at any time be 
free to withhold or to withdraw in whole or in part any concession, provid ed for in the appropriate Schedule 
annexed to this Agreement, in respect of which such Member determines that it was initially negotiated with a 
government which has not become, or has ceased to be, a Member."  
714 Emphasis added. We note that this Ad Note ap pears to be the basis for the requirement, in 
paragraph 6 of the Procedures for Negotiations under Article XXVIII, that the Member concerned notify the 
Secretariat of the completion of negotiations. As discussed further below, the text of paragraph 7 of th ose 
Procedures for Negotiations under Article XXVIII provides that the Member shall be free to give effect to the 
changes agreed from the date that the conclusion of negotiations has been notified pursuant to paragraph 6.  
715 Furthermore, we note that Paragr aph 1 of the Procedures for Modification and Rectification of 
Schedules provides that the draft of the Schedule containing the changes resulting from Article XXVIII 
negotiations shall be communicated by the Director -General to all Members. Insofar as the " changes in 
national tariffs" correspond to the "changes resulting from Article XXVIII negotiations", then those changes in 
national tariffs would have already been previously communicated to all Members in the course of the 
certification procedure. Thus, i f certification were a legal prerequisite for giving effect to the changes agreed in 
Article XXVIII negotiations, then it is not clear why the chapeau of the Ad Note would require that all Members 
be "informed" immediately of "all changes in national tarif fs resulting from" recourse to Article XXVIII.  
716 Appellate Body Reports, EC – Bananas III (Art. 21.5 – Ecuador II)  / EC – Bananas III (Art. 21.5 – 
US), para. 385.  
717 See paragraphs  7.22 to 7.27.  WT/DS492/R  
 
- 163 - 
 
  6 above.  A notification shall be submitted to the secretariat, for circulation to 
contracting parties, of the date on which these changes will come into f orce. 
8. Formal effect  will be given to the changes in the schedules  by means of 
Certifications in accordance with the Decision of the CONTRACTING PARTIES of 26 
March 1980. (emphasis added)  
7.523.   The current Procedures for Negotiations under Article XXVIII were adopted in 1980. 
However, paragraphs 7 and 8 of those procedures are based on similar provisions in the 
arrangements for Article XXVIII negotiations that had been followed since the 1950s. In the 1957 
"Arrangements for Negotiations under Article XXVIII in 1957" (L/635), GATT Contracting Parties 
agreed on the arrangements for the first three -year period referred to in the text of 
Article  XXVIII:1, which would begin 1 January 1958. The arrangements contained in L/635 
subsequently served as a guideline for the  procedural arrangements for all subsequent 
negotiations under Article XXVIII for the next twenty years.718 Paragraphs 7 and 8 of the 1980 
Procedures for Negotiations under Article XXVIII  are based on paragraphs 12 and 14 of L/635, 
which provided that:  
12.  Contracting parties will be free to give effect to the changes  agreed upon in the 
negotiations as from 1 January 1958 . 
 
13.   Contracting parties should notify the Executive Secretary of the date on which 
they give effect to the agreed schedules, and compe nsatory concessions should be 
made effective not later than that date.  
 
14.  Formal effect  will be given to the changes in the schedules  by a protocol of 
rectifications and modifications.  (emphasis added)  
 
7.524.   Paragraph 7 of the Procedures for Negotiations u nder Article XXVIII states that the 
Member "will be free to give effect to the changes " agreed in Article XXVIII:5 negotiations "as from 
the date on which the conclusion of all the negotiations ha ve been notified ". We consider that 
there might well have be en reasons for the GATT Contracting Parties to have followed a different 
approach, and drafted paragraph 7 so as to instead authorize Contracting Parties to be "free to 
give effect to the changes agreed upon in the negotiations " only as from the date on wh ich the 
changes have been introduced into the authentic text of the Schedule through certification (or 
alternatively, only as from the date that the draft of such changes had been communicated to the 
Director -General for certification in accordance with pa ragraph 1 of the Procedures for Modification 
and Rectification of Schedules, or only from the date that the notification of the date when these 
changes will come into force was made in accordance with the second sentence of paragraph 7 of 
the Procedures fo r Negotiations under Article XXVIII). However, had the GATT Contracting Parties 
intended to make certification of these other actions the legal prerequisite for a Contracting Party 
being free to give effect to the changes agreed in Article XXVIII negotiati ons, we would expect 
paragraph 7 of the Procedures for Negotiations under Article XXVIII to use different words to that 
effect.  
7.525.   China has not attempted to argue that the phrase "as from the date on which the 
conclusion of all the negotiations have been no tified" is capable of being understood in more than 
one way.  Rather, China focuses on the terms "free to give effect to the changes ", and submits that 
these terms must be interpreted to allow only "the adoption by the WTO Member of the national 
legal provi sions providing for the tariff rate quotas but not the actual implementation of these tariff 
rate quotas until certification has occurred ".719  
7.526.   We are unable to agree with China 's restrictive interpretation of the terms "free to give 
effect to the changes ". China 's interpretation of these terms, as we understand it, is that they 
serve the limited purpose of allowing a Member to begin to put in place domestic legal provisions 
                                               
718 The introductory note to the 1980 Procedures for Negotiations under Article XXVIII explained that 
"[o]n 31 May 1957 the Executive Secretary in compliance with instructions given to him by the CONTRACTING 
PARTIES (L/641, BISD 6S/158), issued a note concernin g arrangements for negotiations under Article XXVIII in 
1957 (document L/635). This note has served as a guideline for the procedural arrangements for all 
subsequent negotiations under Article XXVIII."  
719 China's response to Panel's Question No 50, para. 19 7-198. WT/DS492/R  
 
- 164 - 
 
  or processes to eventually give effect to the changes agreed, but that Member could n ot actually 
"give effect to " or "implement " the changes agreed (nor could a Member "give effect to " or 
"implement " the domestic legal provisions being put in place). In our view, such a reading is at 
odds with the ordinary meaning of the terms "free to giv e effect to the changes ".  
7.527.   This reading is also at odds with the wording of paragraph 7 in the French and Spanish 
versions of the Procedures. These provide, respectively, that "[i]l sera loisible aux parties 
contractantes de mettre en vigueur les modificat ions agréées au cours des négociations ", and 
"[l]as partes contratantes podrán poner en vigor las modificaciones acordadas en las 
negociaciones ". Furthermore, we consider that a WTO Member does not need to be 'allowed ' by 
the WTO to begin to put in place d omestic legal provisions or processes if they are not actually 
implemented.  Therefore, in addition to being at odds with the ordinary meaning of the terms used 
in paragraph 7, China 's restrictive interpretation of the terms "free to give effect " would app ear to 
render paragraph 7 legally redundant and inutile.  
7.528.   Of course, we must read all of the relevant provisions of the Procedures in a way that gives 
meaning to all of them, harmoniously, rather than taking any one provision in isolation.720 Thus, 
we must r ead paragraph 7 in a manner that gives full weight to paragraph 8 of the same 
Procedures, which provides that "[f]ormal effect  will be given to the changes in the schedules by 
means of Certifications in accordance with the Decision of the CONTRACTING PARTI ES of 26 March 
1980".721  The need for a harmonious interpretation of paragraphs 7 and 8 is compelled by the fact 
that these provisions appear side -by-side in the same set of Procedures. In addition, the 
Procedures for Modification and Rectification of Sched ules referenced in paragraph 8 and the 
Procedures for Negotiations under Article XXVIII were adopted only a few months apart in 1980. It 
is well established that "in public international law there is a presumption against conflict ", and 
that "this presumpt ion is especially relevant " in respect of instruments that "were negotiated at 
the same time, by the same Members and in the same forum ".722  
7.529.   Paragraph 8 refers to "formal effect " being given to the changes in a Schedule. The 
ordinary meaning of the term "formal" includes "[o]f or pertaining to the form or constitutive 
essence of a thing; essential ", "[o]f, pertaining to, or in accordance with recognized rules or 
conventions… ", "[m]ade in proper form, complete; veritable, unmistakable ", "[h]aving a definite 
principle; regular, methodical ", "[w]ell formed, regular, shapely ", and "[v]alid or correctly so called 
in virtue of its form; explicit and definite, not merely tacit or accepted as equivalent ".723 Thus, the 
ordinary meaning does not in any way suggest a dimi nutive reading of the concept of "formal 
effect ", or of paragraph 8, or of certification more generally.  
7.530.   However, we do not consider that interpreting paragraph 7 in accordance with its ordinary 
meaning conflicts with the fact, reflected in paragraph 8, t hat "formal effect " is given to the 
changes "in the schedules " by means of certification . Rather, it appears to us that, if anything, the 
interpretation of paragraph 7 arising from the ordinary meaning of its terms is reinforced by the 
ordinary meaning of the terms of paragraph 8. By its terms, the subject -matter of paragraph 7 is 
the point in time at which a Member is "free to give effect to the changes agreed upon " (i.e. "as 
from the date that the conclusion of all the negotiations have been notified "). By its terms, the 
subject -matter of paragraph 8 is something different, namely, the point in time when "formal 
effect " will be given to the changes "in the schedules " (i.e. "by means of Certifications "). The 
terms of paragraphs 7 and 8, and the very fact th at these two provisions are juxtaposed side -by-
side in the same set of Procedures, makes clear that each provision is addressing a different issue. 
Thus, when read together, these provisions make clear that the question of when and under what 
conditions a Member is "free to give effect to the changes agreed " in Article XXVIII negotiations is 
different from the question of when and under what conditions "formal effect " will be given to the 
changes "in the schedules ". If paragraph 8 served as the answer to bo th questions, then there 
would be no need for paragraph 7 (and vice versa). The reference to "formal effect " in paragraph 8 
further reinforces that the subject -matter of this provision concerns "changes in the Schedules ", 
and that this is different from th e point in time that a Member is "free to give effect to the 
changes ".  
                                               
720 Appellate Body Report, Korea – Dairy , para. 81.  
721 Emphasis added.  
722 Panel  Report , Indonesia – Autos , para. 14.28.  
723 Shorter Oxford English Dictionary , 5th ed, W.R. Trumble, A. Stevenson (eds.) (Oxford University 
Press, 2002), Vol. 1, p. 1014 . WT/DS492/R  
 
- 165 - 
 
  7.531.   We further note that paragraph 10 of the Procedures for Negotiations under Article XXVIII 
states that "[t]hese procedures are in relevant parts also valid for renegotiations under 
Article XVIII, paragraph 7, and Article XXIV, paragraph 6 ". Article XVIII:7 and the Understanding 
on Article XXIV also provide, in terms similar to Article XXVIII:3, that the relevant Member is "free 
to modify or withdraw " concessions.  Paragraph 7 of the Proc edures for Negotiations would also 
therefore be applicable to these negotiations, and is consistent with the language of those 
provisions. It follows that the language of paragraph 3 of Article XXVIII, which provides that a 
Member is "free to modify or wit hdraw " concessions (the same procedures which apply to reserved 
negotiations under paragraph 5 of Article XXVIII), is consistent with the language in paragraphs 7 
and 8 of the Procedures for Negotiations. This further suggests that certification is not a l egal 
prerequisite for implementing the results of negotiations under Article XXVIII.  
7.532.   We note that the wording of paragraph 7 of the Procedures for Negotiations under 
Article  XXVIII is significantly different from the wording used in the context of the proc edures that 
apply to the modification of Schedules annexed to the GATS. Paragraph 6 of the Procedures for the 
Implementation of Article XXI, adopted by the Council for Trade in Services in 1999, states:  
A modifying Member which has reached agreement with a ll Members that had 
identified themselves under paragraph 3 above shall, no later than fifteen days after 
the conclusion of the negotiations, send to the Secretariat a final report on 
negotiations under Article  XXI, which will be distributed to all Members  in a secret 
document. After completing the certification procedure under paragraphs  20 to  22, 
such a modifying Member will be free to implement the changes agreed upon in the 
negotiations and specified in the report, and it shall notify the date of implem entation 
to the Secretariat, for circulation to the Members of the WTO. Such changes shall not 
exceed the modification or withdrawal initially notified and shall include any 
compensatory adjustment agreed upon in the negotiations.724 (emphasis added)  
7.533.   There i s more than one possible explanation as to why this difference exists in the case of 
services. It might be that Members considered that the drafting of paragraphs 7 and 8 of the 
Procedures for Negotiations under Article XXVIII should be changed in the ligh t of the importance 
of certification in the WTO legal system, and desired not to replicate the same approach, in the 
services context. It might be that Members considered that a different approach was warranted in 
the context of services as a consequence o f the different subject -matter and the differences 
between the rules governing the modification of Schedules in Article XXI of the GATS, as compared 
with those found in Article XXVIII of the GATT 1994. Whatever the reason, the wording of 
paragraph 6 of the  Procedures for the Implementation of Article XXI of the GATS stands in stark 
contrast to the wording used in paragraphs 7 and 8 of the Procedures for Negotiations under 
Article XXVIII of the GATT. The wording of paragraph 6 is that the  Member modifying it s 
concessions "will be free to implement the changes agreed upon " in the negotiations "[a]fter 
completing the certification procedure ", whereas the wording of paragraph 7 is that the Member 
"will be free to give effect to the changes agreed upon in the neg otiations … as from the date on 
which the conclusion of all the negotiations have been notified " with paragraph 8 addressing the 
separate question of when the formal effect is given to the changes "in the schedule s".  
7.534.   China argues that allowing a Member to  give effect to changes agreed in Article XXVIII 
negotiations prior to those changes being introduced in its Schedule through certification would 
reduce to inutility the certification procedures which, as China emphasizes, are mandatory in 
nature.725 China s tates that such an interpretation would entail the consequence that "the process 
of certification is meaningless and is reduced to no more than paper "726, and "would run contrary 
to the object and purpose of all the WTO rules regarding certification, which i s to allow the entire 
Membership to acquiesce in modifications to Schedules "727 and to "review and accept the 
modifications that a WTO member proposes to make ".728  
                                               
724 Procedures for the Implementation of Article XXI of the General Agreement on Trade in Services, 
adopted by the Council for Trade in Services on 19 July 1999, WTO doc. S/L/80, para. 6.  
725 China's first written submission, paras. 262 -263. 
726 China's opening sta tement at the first meeting of the Panel, para. 116.  
727 China's response to Panel question No. 50, para. 198.  
728 China's response to Panel question No. 56, para . 200. WT/DS492/R  
 
- 166 - 
 
  7.535.   The 1980 Procedures for Modification and Rectification of Schedules, which supersede the 
certification procedures originally adopted in 1968, set forth the procedures through which 
rectifications and modifications to a Member 's Schedule are certified. As noted earlier in our 
Report, we agree with the parties and third parties expressing a view on th e matter that these 
procedures qualify, at a minimum, as "decisions ", "procedures " or "customary practices " within the 
meaning of Article XVI:1 of the WTO Agreement.729  
7.536.   In our view, a finding that Members are free to give effect to modifications to their 
concessions in certain situations prior to those changes being given formal effect in its Schedule, 
including in the situation where the changes have been agreed in Article XXVIII negotiations and 
notified to all other Members, would not imply that "the proc ess of certification is meaningless ". As 
we have already noted, the ordinary meaning of the terms "formal effect " does not in any way 
suggest a diminutive reading of the concept of certification. Furthermore, we do not doubt that 
there are other situations  where the introduction of changes into the text of a Schedule is a legal 
prerequisite for effecting any change in Members ' substantive rights and obligations. For example, 
a proposed rectification to correct an alleged error in a Schedule would have no le gal effect until 
such time as the text of the Schedule is changed through certification.730 Likewise, an agreement 
among Members to reduce tariffs may not be legally enforceable in WTO dispute settlement until 
such time as the change has been introduced into  the text of the Schedule through certification.731 
In our view, however, t he legal consequence of certification varies in different situations, and 
therefore must be analysed in relation to the particular situation at hand. In the present case, the 
issue is  whether certification is a legal prerequisite that must be completed before a Member 
modifying its concessions can proceed to give effect to the changes agreed upon in negotiations 
under Article XXVIII of the GATT 1994. With this in mind, we proceed to ex amine whether the 
Procedures for Modification and Rectification of Schedules shed light on that issue, beginning with 
the text of the Procedures.  
7.537.   We note that the preamble to the Procedures for Modification and Rectification of 
Schedules emphasizes "the importance of keeping the authentic texts of Schedules annexed to the 
General Agreement up to date and of ensuring that they tally with the texts of corresponding items 
in national customs tariffs ". The preamble further states that, as a consequence, "chang es in the 
authentic texts of Schedules which record … modifications resulting from action taken under 
Article  XXVIII shall be certified without delay ". Paragraph 1 of the Procedures establishes that 
"[c]hanges in the authentic texts of Schedules annexed to  the General Agreement which reflect 
modifications resulting from action under …  Article XXVIII shall be certified by means of 
Certifications ", and requires that a "draft of such change shall be communicated to the Director -
General within three months aft er the action has been completed ". Paragraph 3 of the Procedures 
establishes that the draft will then be communicated by the Director -General to all Members, and 
become a Certification "provided that no objection has been raised by a contracting party with in 
three months on the ground that, in the case of changes described in paragraph 1, the draft does 
not correctly reflect the modifications ". Paragraph 4 of the Procedures provides that whenever 
practicable, certifications "shall record the date of entry i nto force of each modification ".   
7.538.   Thus, the Procedures generally speak to the question of how changes in the authentic texts 
of Schedules are to be made. We understand the Procedures to clarify that certification is the legal 
prerequisite for altering the  authentic text of a Schedule annexed to the General Agreement. 
However, the question before the Panel is not whether certification is a legal prerequisite for 
introducing changes into the text of a Schedule in the context of Article XXVIII negotiations.  
Rather, the question before the Panel is whether, a Member is free to give effect to the changes 
                                               
729 See paragraphs 7.22 to 7.27. 
730 See e.g. Panel Report, Russia – Tariff Treatment , para. 7.54 ("In responses to questions from the 
Panel, Russia acknowledged that when its proposed rectification was circulated in document G/MA/TAR/RS/406  
in accordance with its request, both the European U nion and Japan objected to Russia's proposed rectification. 
No further action was taken with respect to Russia's Schedule. In particular, no certification was circulated by 
the Director -General. As indicated, Russia is not challenging the European Union's objection in the context of 
the present proceedings and has not questioned Japan's objection. Thus, for the purposes of our task in this 
dispute, Russia's Schedule remains unaltered.")  
731 See e.g. Panel Report, EC – IT Products , paras. 7.18 ("In accordance with paragraph 2 of the ITA 
Annex and the Decision of 26 March 1980 on Procedures for Modification and Rectification of Schedules of Tariff 
Concessions  (the "1980 Procedures"), each ITA participant submitted a proposed modification to its own 
Schedule for review by all WTO Members.  Each participant's schedule was certified following a three -month 
review period for that particular schedule.") (footnotes omitted)  WT/DS492/R  
 
- 167 - 
 
  agreed in Article XXVIII negotiations prior to the changes having been introduced into the 
authentic text of its Schedule. Our examination of the relevant provi sions of the GATT 1994 and 
the Procedures for Negotiations under Article XXVIII supports the conclusion that the two 
questions are distinct from one another. In our view, and as elaborated below, there are several 
elements in the text of the Procedures for  Modification and Rectification of Schedules, including the 
preamble and paragraphs 1, 3, and 4 thereof, that also suggest that certification is not a legal 
prerequisite for implementing the changes resulting from Article XXVIII negotiations.  
7.539.   The preamble  of the Procedures states that the objective of certification is to keep the 
authentic texts of the Schedules "up to date " and to ensure "that they tally with the texts of 
corresponding items in national customs tariffs ", and that, in consequence, to ensur e that changes 
in the authentic texts of Schedules to "record " modifications are certified without delay. We 
consider that if a Member were not free to implement tariff changes agreed in Article XXVIII 
negotiations (or any other specified articles of the G ATT 1994, including Article XVIII, Article XXIV, 
and Article XXVII ) prior to introducing the changes into the authentic text of its Schedule through 
certification, then it would arguably be unnecessary to ensure that the authentic text of the 
Schedules are  "kept up to date " and "tally with " the texts of the corresponding items in national 
customs tariffs. Insofar as modifications are concerned, the latter could never diverge from the 
former without violating Article II:1 of the GATT. In other words, if cert ification were a legal 
prerequisite before a Member could implement changes resulting from Article XXVIII negotiations 
at the national level, it would follow that Schedules would always be up to date and tally with the 
texts of corresponding items in natio nal customs tariffs.    
7.540.   Furthermore, we note that paragraph 1 of the Procedures refers to "[c]hanges in the 
authentic texts of Schedules " being certified to "reflect " modifications  "resulting from action under " 
Article XXVIII (and the other articles of the  GATT 1994 specified therein). However, if certification 
were a legal prerequisite for being able to give effect to those modifications, then it would follow 
that the introduction of the changes to the authentic texts of Schedules through certification wou ld 
be the action that would "give effect to ", and not "reflect ", any modifications  resulting from action 
under Article XXVIII. In addition, the wording of paragraph 1 makes clear that certification reflects 
"modifications resulting from action " that "has b een completed " prior to certification, and this is 
reinforced by the French and Spanish versions of paragraph 1, which respectively state that "[l]es 
projets de changement se ront communiqués au Directeur géné ral dans les trois mois à compter du 
moment où les mesures auront été mises en place ", and "[s]e enviará al Director General un 
proyecto de dichos cambios dentro de los tres meses siguientes al momento en que hayan 
quedado adoptadas las medidas ".732 This too seems to presuppose that changes resulting from  
Article XXVIII negotiations may be implemented prior to certification.  
7.541.   We also find it significant that paragraph 3 of the Procedures for Modification and 
Rectification of Schedules provides that, in the case of changes which reflect modifications 
result ing from action under Article XXVIII (and also modifications resulting from the other specified 
Articles of the GATT 1994), Members may object to a certification only "on the ground that … the 
draft does not correctly reflect the modifications ". The fact t hat objections are confined to the 
ground that "the draft does not correctly reflect the modifications " has at least two important 
implications. The first, as pointed out by the European Union, is that the certification process does 
not confer a "veto" right733 upon those Members which did not participate in the negotiations and 
who may not be satisfied with the compensation agreed, or upon those Members which did 
participate in the negotiations but failed to reach an agreement. The second implication is that  the 
absence of an objection on the part of another Member cannot be construed as a Member 
"acquiescing " or "accepting " that the changes introduced into the authentic text of the Member 's 
Schedule are consistent with the Member 's obligations under the GATT . In the light of the 
foregoing, we are not persuaded by China 's argument that the "object and purpose " of the 
certification procedure is to ensure that all Members have the opportunity to "acquiesce in " and 
"review and accept the modifications that a WTO member proposes to make " in the context of 
Article XXVIII negotiations.734 
                                               
732 Emphasis added.  
733 EU's second written submission, para. 186.  
734 In response to a question from the Panel, China submits that it agrees that the grounds for raising 
an objection in the context of certification are limited to the situation where the changes "do not correctly 
reflect the modifications" agreed under Article XXVIII, but then China adds t hat "[i]n addition, for WTO WT/DS492/R  
 
- 168 - 
 
  7.542.   Continuing with our review of the text of the Procedures, we also find it significant that 
paragraph 4 provides that "[w]herever practicable Certifications shall record the date of en try into 
force of each modification and the effective date of each rectification ". In our view, the significance 
of paragraph 4 lies in the fact that it clarifies that the "entry into force " of a modification is distinct 
from the point in time when the cor responding change in the authentic text of the Schedule is 
certified. We further note that the French and Spanish versions of paragraph 4 respectively refer 
to the "la date d 'entrée en vigueur " and "la fecha de entrada en vigor ", which recall the terms use d 
in the French and Spanish versions of paragraph 7 of the Procedures for Negotiations under 
Article  XXVIII ( "de mettre en vigueur " and "poner en vigor ").  
7.543.   In addition to these elements of the text of the Procedures for Modification and 
Rectification, we c onsider that the history of those certification procedures sheds light on the issue 
before us. Shortly after its adoption, the GATT 1947 and the annexed Schedules had been subject 
to several amendments by the Contracting Parties.735 In the early years of the  GATT, attempts to 
amend Schedules of concessions were carried out by means of "Protocols ", providing that the 
rectifications or modifications contained therein would "become an integral part of the General 
Agreement on the day on which this Protocol has b een signed by all the Governments which are on 
that day contracting parties to the General Agreement. "736 A series of "Protocols of Rectifications 
and Modifications " were circulated in the 1950s.737 The Protocols were collections of rectifications 
and modifica tions, and intended to amend the Schedules of concessions to reflect those 
rectifications and modifications, including modifications arising from negotiations under 
Article  XXVIII. The preamble to most of the protocols that were circulated stated that thei r aim 
was: 
[T]o make certain modifications in the authentic text of certain Schedules to the 
General Agreement, which reflect modifications of concessions which have already 
been made effective  in accordance with established procedures under the General 
Agreement.738 (emphasis added)  
7.544.   This means that the GATT Contracting Parties considered that the modifications had 
"already been made effective " by operation of the relevant provision of the General Agreement, 
and that the purpose of modifying the text of the S chedule was to reflect those modifications.739 
                                                                                                                                               
Members that did not participate in the negotiations or consultations of the changes, it is the only opportunity 
to review and accept the modifications that a WTO Member proposes to make through changes to this 
Member's Schedule " (China's response to Panel question No. 56, para. 200).  
735 Due to their provisional nature, tariff commitments made in the 1947 Geneva negotiations had an 
initial validity of three years. Consequently, the original drafting of GATT Article XXVIII containe d no provision 
for the modification or withdrawal of these commitments before 1 January 1951. Contracting Parties initially 
extended the validity of these Schedules through "Declarations on the Continued Application of Schedules". 
During the Torquay Tariff  Conference of 1950 the negotiations for new concessions took place in parallel with 
some renegotiations. The Review Session of the GATT that took place subsequently disposed of the need to 
extend the validity of the Schedules periodically. It also propose d amendments to several Articles of the GATT 
(including Article XXVIII) and proposed the incorporation of a new Article XXVIII bis entitled "Tariff 
negotiations". These amendments were formally adopted through the Protocol Amending the Preamble and 
Parts II  and III of the General Agreement of 10 March 1955, which entered into force on 7 October 1957.  
736 GATT Analytical Index: Guide to GATT Law and Practice , p. 1005.   
737 There were in all five protocols of rectifications, one protocol of modifications, and nin e protocols of 
rectifications and modifications.  
738 See Fourth Protocol (7 March 1955); Fifth Protocol (3 December 1955); Sixth Protocol (11 April 
1957); Seventh Protocol (30 November 1957); Eighth Protocol (18 February 1959); Ninth Protocol (17 August 
1959). 
739 See J.S. Stanford, "Treaty Amendment: the Problem of the GATT Tariff Schedules" (1969) The 
Canadian Yearbook of Internal Law  1969, at 263 -264: 
The first and most obvious fact  that the conduct of the parties discloses  is that the right of the 
parties t o take internal action to modify their national tariffs following action taken pursuant to 
one of the modification articles of the General Agreement  does not depend upon the entry into 
force of the protocols . If it did, the protocols could not refer to mod ifications " which have already 
been made effective ." Both the language of the protocols  and the conduct of the contracting 
parties  make it clear that the entry into force of the protocols is not the measure which affects 
the rights and obligations of the c ontracting parties under Article II:1.  What then is the function 
of the protocols ? […] With respect to modifications they set out changes to be made to the 
authentic text of the Schedules to reflect modifications which have already been made legally 
effect ive in accordance with procedures established by the General Agreement . Both of these WT/DS492/R  
 
- 169 - 
 
  7.545.   On 29 August 1968, the Director -General circulated a draft decision establishing new 
procedures for modifications and rectifications to Schedules (L/3062). The introduction to the new 
draft procedures set forth the following understanding:  
Several provisions of the GATT - contained in Articles II, XVIII, XXIV, XXVII and 
XXVIII - permit action by contracting parties, in certain circumstances and subject to 
specified procedures and conditions, to modify concessions  in their schedules. The 
modifications are legally valid upon the completion of the action and the contracting 
parties are informed of the results of each action. But there remains the formality  of 
making the changes, in appropriate form, in the authentic texts of the schedules. It is 
proposed that this be done by means of certifications  issued by the Director -General 
after all contracting parties have had an opportunity to examine the text.740 (emphasis 
added)  
7.546.   Thus, it was understood that "[t]he modification s are legally valid upon the completion of 
the action and the contracting parties are informed of the results of each action " with respect to 
modifications under Article XXVIII (and also under Articles II, XVIII, XXIV, and XXVII). As we 
noted earlier, Arti cles XVIII, XXIV and XXVII use a similar phrase to that used in paragraph 3 of 
Article XXVIII, namely that the Member concerned "shall be free to modify or withdraw " the 
concession, and affected Members that do not agree to the modification of concession "shall be 
free to withdraw substantially equivalent concessions ". It was understood that certification relates 
not to the legal validity of the modifications, which occurs "upon completion of the action " and the 
GATT Contracting Parties being informed there of, but rather to "the formality  of making the 
changes, in appropriate form, in the authentic texts of the schedules ". 
7.547.   The Procedures for Modification and Rectification of Schedules were adopted by the Council 
on 19 November 1968.741 Similar to the language  used in the earlier Protocols, paragraph 1 of the 
1968 Procedures provided that changes in the authentic texts of the Schedules to "reflect 
modifications which have entered into force  in accordance with the provisions of paragraph 6 of 
Article II, Article  XVIII, Article XXIV, Article XXVII or Article XXVIII, shall be certified by means of 
Certification. "742 As we noted earlier in connection with the Protocols pre -dating the certification 
procedures, if certification were a legal prerequisite for a Member bei ng free to give effect to 
changes agreed in Article XXVIII negotiations, then it would not have been possible for those 
modifications to "have entered into force " prior to certification. Thus, the wording of paragraph 1 
of the 1968 Procedures suggests that  GATT Contracting Parties adopted those Procedures on the 
understanding that they could give effect to the agreed changes pursuant to Article XXVIII 
negotiations prior to their incorporation into the Schedules of concessions through certification.743 
7.548.   On 26 M arch 1980, the revised Procedures for Modifications and Rectification of Schedules 
were approved by the Council.744 The 1980 Procedures are similar to the 1968 Procedures in many 
respects. However, one difference is that, in paragraph 1, the reference to cha nges to the 
Schedules being made to reflect modifications "which have entered into force " in accordance with 
Article XXVIII (and the other specified articles of the GATT) was replaced with a reference to 
                                                                                                                                               
functions are textual and non -substantive . It is clear that the sole object  of the protocols of 
rectifications and modifications is to assure that the authentic texts of the Schedules constitute 
an accurate and up -to-date reflection of the tariff obligations of the contracting parties as these 
have been established in accordance with the terms o f the General Agreement. […] o nce the 
requirements of the appropriate article o f the General Agreement have been fulfilled, the 
modifying contracting party is then free to take internal action, if it wishes, to alter its national 
tariff, and its Schedule no longer accurately represents its tariff obligations to all the other 
contract ing parties. Withholding of signature by a contracting party cannot alter this situation. Its 
sole effect is to prevent the authentic text of the Schedule from accurately reflecting the duly 
established legal rights and obligations of the modifying party, with the result that the " authentic 
text" is out -of-date. 
740 L/3062.  
741 L/3131.  
742 L/3131, paragraph 1. (emphasis added)  
743 L/3062, pages 1 -2. J.S. Stanford, "Treaty Amendment: the Problem of the GATT Tariff Schedules" 
(1969) The Canadian Yearbook of Internal Law 1969, at 267 ( stating, with regard the 1968 Procedures for 
Modification and Rectification of Schedules, that "[t]he wording of the decision clearly establishes that the 
certification relates only to effecting textual changes and does not relate to the actual implementation of 
modifications in accordance with the General Agreement").  
744 C/M/139 page 6. The Decision was circulated in L/4962.  WT/DS492/R  
 
- 170 - 
 
  changes to Schedules being made to reflect modificat ions "resulting from action " under the 
respective provision.745 We are not aware of the reason for this change, but we do not see that it 
signals that the Contracting Parties were seeking to effect a substantive change in the existing 
procedures, so as to ma ke certification a legal prerequisite for giving effect to changes agreed in 
Article XXVIII negotiations. Among other things, in the same year the revised Procedures for 
Negotiations under Article XXVIII were adopted, with no substantive change to the prov ision 
expressly authorizing that Contracting Parties "will be free to give effect to changes " agreed upon 
in Article XXVIII negotiations "as from the first date of the period referred to in Article XXVIII:1 " 
or, in the case of negotiations under Article XX VIII:4 or XXVIII:5, "as from the date on which the 
conclusion of all the negotiations have been notified " as set out in accordance with paragraph 6.746  
7.549.   It appears to the Panel that there is no subsequent practice in the application of 
Article  XXVIII establi shing the agreement of Members on whether certification is a legal 
prerequisite that must be completed before a Member modifying its concessions can proceed to 
apply the changes agreed upon in Article XXVIII negotiations. China submits that "there is no 
practice among Members whereby certification is not required for a modification reached under 
Article XXVIII negotiations to enter into force and to take formal legal effect ", and notes that 
"though there are instances where a modification entered into force  before a certification was 
officially issued ", "Members do submit requests for a certification prior to the planned 
implementation date, and leave time for the certification process ".747 The European Union submits 
that "[t]he certification of changes to a M ember 's schedule is often delayed, sometimes for very 
long periods of time, due to the unjustified reservations made by some Members ", and that "[a]s a 
result, the changes agreed in accordance with Article XXVIII are sometimes implemented many 
months, or e ven years, prior to the certification of such changes ".748 The parties have provided 
examples of cases in which certification occurred after the entry into force of changes resulting 
from Article XXVIII negotiations, and where certification occurred before s uch changes were made 
effective.749 The absence of agreement among Members on whether certification is a legal 
prerequisite that must be completed before a Member modifying its concessions can proceed to 
                                               
745 There appear to be three other differences between the 1980 Procedures and the 1968 Procedures: 
(i) two paragraphs  were added on the importance of "keeping the authentic texts of Schedules annexed to the 
General Agreement up to date" and that "changes in the authentic texts of Schedules shall be certified without 
delay"; (ii) also in paragraph 1, the time -bound submis sion of changes, which "shall be communicated to the 
Director -General within three months after the action has been completed", was added for the first time; and 
(iii) in paragraph 3, the time -limit for review and objection was changed to three months as c ompared to sixty 
days under the 1968 procedures.  
746 A 1978 "Explanatory Note" by the Secretariat explained that the new paragraphs 7 and 8 of the 
Procedures for Negotiations under Article XXVIII were not meant to introduce any substantive change to the 
corresponding provisions in L/635 : 
7. Paragraph 7 of document L/4651/Rev.1 corresponds to paragraph 12 of document L/635. 
Since the old text was related to the particular situation in 1957, the new text has been made 
more general. The essence of the text of pa ragraph 13 of document L/635 has also been 
included in this paragraph.  
8. Paragraph 8 of document L/4651/Rev.1 takes account of the modifications that have been 
agreed upon as regards the legal instruments in question but has otherwise the same content as 
paragraph 14 of document L/635. (Procedures for Negotiations under Article XXVIII, Explanatory 
Note by the Secretariat, 13 September 1978, C/W/306.)  
Furthermore, A. Hoda states the following with respect to the 1980 Procedures for Modification and 
Rectific ation of Schedules:  
An important aspect of the decision on the procedures for certification has to be highlighted here. 
As in the case of protocols to which the list of modifications and rectifications was attached, the 
certifications do not have any effe ct on the entry into force of the proposed modification  or 
rectification. The idea is to formally incorporate in the schedules of Members modifications and 
rectifications which, in most cases,  have already entered into force . In the case of modifications, 
the procedures to bring about changes in the legal obligations of the Members have already to be 
followed as a prerequisite for action to bring about changes in the authentic text. Thus, in the 
case of renegotiations under Article XXVIII, for instance, the  procedures for these renegotiations 
should have already been complied with, before a request for modification of the schedule is 
made.  (emphasis added)  (A. Hoda, Tariff negotiations and renegotiations under the GATT and 
the WTO, Procedures and Practices  (Cambridge University Press, 2001) pp. 115 -116.) 
747 China's response to Panel question No. 96, para. 70.  
748 EU's response to Panel question No. 96, para. 55.  
749 Parties' responses to Panel question No. 96.  WT/DS492/R  
 
- 171 - 
 
  apply the changes agreed upon in Article XXVIII negoti ations is also demonstrated by the diverse 
views presented by the third parties in this case.750  
7.550.   We are well aware of the importance of certification in the context of the WTO legal 
system. However, having carefully considered the existing provisions of the  GATT 1994, the 
Procedures for Negotiations under Article XXVIII, and the Procedures for Modification and 
Rectification of Schedules, it does not appear to be the case that certification is a legal prerequisite 
that must be completed before a Member modify ing its concessions can proceed to implement the 
changes agreed upon in Article XXVIII negotiations at the national level.  
7.11.5   Conclusion  
7.551.   In the present case, China has not suggested that the tariff rates applied by the European 
Union exceed those agreed upon in the Article XXVIII negotiations with Brazil and Thailand.751 
Accordingly, having found that certification is not a legal prerequisite that must be completed 
before a Member modifying its concessions can proceed to implement the changes agreed upon in 
Article XXVIII negotiations at the national level, we are unable to uphold China 's claims that the 
European Union violated Article II by giving effect to the modifications arising from the 
Article  XXVIII negotiations prior to the changes being reflected in the  authentic text of its Schedule 
through certification.  
7.552.   In arriving at this conclusion, we wish to stress that pursuant to Article 3.2 of the DSU, the 
task of panels in the dispute settlement system of the WTO is "to preserve the rights and 
obligations of M embers under the covered agreements, and to clarify the existing provisions  of 
those agreements in accordance with customary rules of interpretation of public international 
law."752 As the Appellate Body has previously confirmed, determining what the applica ble rules and 
procedures ought to be is not "the responsibility of panels; it is clearly the responsibility solely of 
the Members of the WTO ".753 
8  CONCLUSIONS AND RECO MMENDATION  
8.1.  For the reasons set forth in this Report, the Panel concludes as follows:  
a. In resp ect of the Panel 's terms of reference,  
i. China 's contention that the European Union acted inconsistently with the chapeau of 
Article XIII:2 of the GATT 1994 by failing to set aside TRQ shares for "all others " at 
                                               
750 See responses of Argentina, Brazil, Canada, Russia,  Thailand and the United States to Panel question 
No. 10 to third parties. Argentina states that "pursuant to Article II of the GATT and similar WTO provisions, 
the lack of the fulfillment of the certification obligation could put into question the consist ency of the change 
introduced in the national custom tariff with a Member's Schedule of Concessions and, as a result, with its WTO 
obligations". Russia agrees with China that "changes that were agreed upon in Article XXVIII negotiations and 
include tariff rates in excess of a Member's bound rates cannot be implemented prior to certification" of the 
modified schedule. Canada states that "[a]t the point where negotiations are concluded and the relevant period 
(for negotiations under Article  XXVIII:1) or notic e (for negotiations conducted under Article XXVIII:4 or 
Article  XXVIII:5) has occurred, then the substantive changes to Schedules have been determined" and "[w]hat 
remains is to formally incorporate the substantive changes into the Schedules through use of  the 1980 
Procedures". Thailand states that certification is "an administrative procedure that allows for the incorporation 
of the new tariff concessions in the modifying Member's Schedule", and "is not a substantive requirement that 
must be completed befo re a Member can implement the changes in its modified Schedule". Brazil states that 
"[s]ince Schedules are an integral part to the covered Agreements, it is certainly useful that any changes to 
them be certified accordingly", but then states that "[i]t see ms, however, that GATT/WTO practice indicates 
that the certification is not indispensable prior to the modification of the Schedule by the Member". The United 
States indicates that the Member modifying concessions "may 'give effect to' such changes before  they are 
formally certified pursuant to paragraph 8 of the Procedures for Modification and Rectification of Schedules of 
Tariff Concessions" (emphasis original); however, the United States then states that because "formal effect" 
will only be given to thos e changes after the modified schedule is certified, then "so long as the modified 
schedule remains uncertified, the prior, certified schedule would continue to constitute the formal legal basis 
for the Member's rights and obligations under the WTO Agreemen ts". 
751 We recall that paragraph 7 of the Procedures for Negotiations under Article XXVIII provides that a 
Member will be free to give effect to "the changes agreed upon" in the negotiations.  
752 Appellate Body Report, US – Certain EC Products , para. 92. (emp hasis original)  
753 Appellate Body Report, US – Certain EC Products , para. 92.  WT/DS492/R  
 
- 172 - 
 
  levels that allow other WTO Members to achiev e a substantial supplying interest 
going forward falls within the scope of the panel 's terms of reference;  
ii. China 's contention s that the European Union acted inconsistently with the chapeau of 
Article XIII:2 and Article XIII:4 of the GATT 1994 by failing to  proactively disclose 
the historical trade data, the representative period selected or the special factors 
appraised are new claims that are outside the Panel 's terms of reference;  
iii. China 's contention s that the European Union acted inconsistently with Arti cle XIII:1 
and the chapeau of Article XIII:2 of the GATT 1994 by failing to annually update the 
initial TRQ allocations constitute new claims that are outside the Panel 's terms of 
reference;  
iv. Insofar as China is claiming that the European Union acted incon sistently with 
paragraph 7 of the Procedures for Negotiations under Article XXVIII or paragraph 1 
of the Procedures for Modification and Rectification of Schedules, such claims are not 
properly before the Panel;  
v. Insofar as China is claiming that the Europ ean Union acted inconsistently with 
Article  II of the GATT 1994 by implementing the higher out -of-quota rates arising 
from the First Modification Package over the period 2007 -2009, such claim is not 
properly before the Panel;  
b. China has not demonstrated tha t the European Union acted inconsistently with 
Article  XXVIII:1  of the GATT 1994 by not recognizing  China as a Member holding a 
principal or substantial supplying interest in the concessions at issue in the First and 
Second Modification Packages;  
c. China ha s not demonstrated that the tariff rates and the TRQs negotiated and 
implemented by the European Union under the First and Second Modification Packages  
are inconsistent with Article XXVIII:2 of the GATT 1994, read in conjunction with 
paragraph 6 of the Und erstanding on the Interpretation of Article XXVIII of the GATT  
1994, by failing to maintain a general level of reciprocal and mutually advantageous 
concessions not less favourable to trade than that existing prior to the modification;  
d. In respect of China 's claims under Article XIII:2(d) of the GATT 1994,  
i. China has not demonstrated that the European Union acted inconsistently with 
Article XIII:2(d) by determining which countries had a substantial interest in 
supplying the products concerned on the basis of their actual share of imports into 
the E uropean Union , rather than on the basis of an estimate of what import shares  
would have been in the absence of the SPS measures restricting poultry imports 
from China;  
ii. China has demonstrated that the increase in imp orts from China over the period 
2009-2011 following the relaxation of the SPS measures in July 2008 was a "special 
factor " that had to be taken into account by the European Union when determining 
which countries had a substantial interest in supplying the products concerned, and 
the European Union acted inconsistently with Article XIII:2(d) by not recognizing 
China as a Member holding a substantial interest in supplying the products under 
tariff lines 1602 39 29 and 1602 39 80754 and by failing to seek agreem ent with 
China on the allocation of the TRQs for those particular tariff lines;  
e. In respect of China 's claims under the chapeau of Article XIII:2 of the GATT 1994,  
i. China has not demonstrated that the European Union acted inconsistently with the 
chapeau of A rticle XIII:2 by determining the TRQ shares allocated to "all others" on 
the basis of actual share of imports into the European Union , rather than on the 
                                               
754 Tariff line 1602 39 80 m erged with tariff line 1602 39 40 into ta riff line 1602 39 85, effective 
1 January 2012.  WT/DS492/R  
 
- 173 - 
 
  basis of an estimate of what import shares  would have been in the absence of the 
SPS measures restrict ing poultry imports from China;   
ii. China has demonstrated that the increase in imports from China over the period 
2009-2011 following the relaxation of the SPS measures in July 2008 was a "special 
factor " that had to be taken into account by the European Uni on when determining 
the size of the TRQ shares to be allocated to "all other s", and that the European 
Union acted inconsistently with the chapeau of Article XIII:2 by not allocating a 
greater "all others " share under tariff lines 1602 39 29 and 1602 39 80755;  
iii. China has failed to demonstrate that the European Union acted inconsistently with 
the chapeau of Article XIII:2 by not allocating an "all others " share of at least 10% 
for all of the TRQs under the First and Second Modification Package s; 
f. China has not d emonstrated that the European Union acted inconsistently with 
Article  XIII:1 of the GATT by allocating all or the vast majority of the TRQs to Brazil and 
Thailand;  
g. China has not demonstrated that the European Union acted inconsistently with 
Article  I:1 of the GATT 1994 by allocating all or the vast majority of the TRQs to Brazil 
and Thailand;   
h. China has not demonstrated that the European Union acted inconsistently with 
Article  XIII:4 of the GATT 1994 by refusing to enter into meaningful consultations  with 
China; and  
i. China has not demonstrated that the European Union acted inconsistently with 
Article  II:1 of the GATT 1994 by giving effect to the modifications resulting from the 
Article XXVIII negotiations prior to the changes being reflected in the authentic  text of 
its Schedule through certification.  
8.2.  Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or impairmen t. We conclude that, to the extent that the measures at issue are 
inconsistent with Article XIII:2(d) and the chapeau of Article XIII:2 of the GATT 1994, they have 
nullified or impaired benefits accruing to China under the GATT 1994 . 
8.3.  Pursuant to Article 19 .1 of the DSU, having found that the European Union has acted 
inconsistently with its obligations under Article XIII:2(d) and the chapeau of Article XIII:2 of the 
GATT 1994, the Panel recommends that the Dispute Settlement Body request  that the European 
Union bring its measure s at issue into conformity with its obligations under the GATT 1994.  
___________  
                                               
755 Tariff line 1602 39 80 m erged with tariff line 1602 39 40 into  tariff line 1602 39 85, effective 
1 January 2012.