WT/DS492/R/Add.1  
 
28 March 2017 
(17-1642) Page: 1/70 
  Original: English  
 
  EUROPEAN UNION – MEASURES AFFECTING T ARIFF CONCESSIONS ON  
CERTAIN POULTRY MEAT  PRODUCTS  
REPORT OF THE PANEL  
Addendum  
This addendum  contains Annexes A to C to the  Report of the Panel to be found in document  
WT/DS492/R . 
 
 
_______________  
 
 WT/DS492/R/Add.1  
 
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  LIST OF ANNEXES  
ANNEX A 
WORKING PROCEDURES O F THE PANEL  
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 arguments o f 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 THIRD 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 a rguments 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/Add.1  
 
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  ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedu res of the Panel  A-2 
Annex A -2 Amended Working Procedures of the Panel  A-7 
 WT/DS492/R/Add.1  
 
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  ANNEX A -1 
WORKING PROCEDURES O F THE PANEL  
Adopted on 16 December 2015  
 
 
1.  In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules 
and Proc edures Governing the Settlement of Disputes ("DSU"). In addition, the following Working 
Procedures shall apply.  
General  
 
2.  The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Pro cedures shall preclude a party to the dispute ("party") 
from disclosing statements of its own positions to the public. Members shall treat as confidential 
information submitted to the Panel by another Member which the submitting Member has 
designated as co nfidential. If  a party submits a confidential version of its written submissions to 
the Panel, it shall also,  upon request of a Member, provide a non -confidential summary of the 
information contained in its submissions that could be disclosed to the public .  
3.  The Panel shall meet in closed session. The parties, and Members having notified their interest 
in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU  ("third 
parties"), shall be present at the meetings only when invited by the Panel to appear before it.  
4.  Each party and third party has the right to determine the composition of its own delegation  
when meeting with the Panel. Each party and third party shall have the responsibility for all 
members of its own delegation and s hall ensure that each member of such delegation acts in 
accordance with the DSU and these Working Procedures, particularly with regard to the 
confidentiality of the proceedings.  
Submissions  
 
5.  Before the first substantive meeting of the Panel with the parti es, each party shall submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with 
the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to the second 
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by 
the Panel.  
6.  A party shall submit any request for a preliminary ruling at the earliest possible opportunity 
and in any event no later than in its first written submission to the Panel. I f China requests such a 
ruling, the European Union shall submit its response to the request in its first written submission. 
If the European Union requests such a ruling, China shall submit its response to the request prior 
to the first substantive meeting  of the Panel, at a time to be determined by the Panel in light of 
the request. Exceptions to this procedure shall be granted upon a showing of good cause.  
7.  Each party shall submit all factual evidence to the Panel no later than during the first 
substantive  meeting, except with respect to evidence necessary for purposes of rebuttal, answers 
to questions or comments on answers provided by the other party. Exceptions to this procedure 
shall be granted upon a showing of good cause. Where such exception has been  granted, the Panel 
shall accord the other party a period of time for comment, as appropriate, on any new factual 
evidence submitted after the first substantive meeting.   
8.  Where the  original language of an exhibit is not a WTO working language, the submitti ng party 
or third party shall submit a translation into the WTO working language of the submission  at the 
same time. The Panel may grant reasonable extensions of time for the translation of such exhibits 
upon a showing of good cause. Any objection as to th e accuracy of a translation should be raised 
promptly  in writing, preferably no later than the next filing or meeting (whichever occurs earlier) WT/DS492/R/Add.1  
 
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  following the submission which contains the translation in question. Any objection shall be 
accompanied by a de tailed explanation of the grounds of objection and an alternative translation.  
9.  In order to facilitate the work of the Panel, each party and third party  is invited to make its 
subm issions in accordance with the attached WTO Editorial G uide for Panel Submis sions, to the 
extent that it is practical to do so .  
10.  To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute.  For example, exhibits submitted by China could be numbered CHN -1, 
CHN-2, etc. If the last exhibit in connection with the first submission was numbered CHN -5, the 
first exhibit of the next submission thus would be numbered CHN -6. 
Questions  
 
11.  The Panel may a t any time pose questions to the parties and third parties, orally or in writing, 
including prior to each substantive meeting.   
Substantive meetings  
 
12.  Each party shall provide to the Panel the list of members of its delegation in advance of each 
meeting w ith the Panel and no later than 5.00  p.m. the previous working day.  
13.  The first substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall invite China to make an opening statement to present its case first. 
Subsequentl y, the Panel shall invite the European Union to present its point of view. 
Before each party takes the floor, it shall provide the Panel and other participants at the 
meeting with a provisional written version of its statement. In the event that 
interpreta tion is needed, each party shall provide additional copies for the interpreters, 
through the Panel Secretary. Each party shall make available to the Panel and the other 
party the final version of its opening statement as well a s its closing statement, if a ny, 
preferably at the end of the meeting, and in any event no later than 5.00  p.m. on the 
first working day following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make c omments, through the Panel. Each party shall then  
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which it wishes to receive a re sponse in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then  have 
an opportunit y to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with China presenting its statement first.  
14.  The second substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall ask the European Union if it wishes to avail itself of the right to present 
its case first. If so, the Panel shall invite the European Union to present its opening 
statement, followe d by China. If the European Union chooses not to avail itself of that 
right, the Panel shall invite China to present its opening statement first. Before each 
party takes the floor, it shall provide the Panel and other participants at the meeting 
with a pro visional written version of its statement. In the event that interpretation is WT/DS492/R/Add.1  
 
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  needed, each party shall provide additional copies for the interpreters, through the Panel 
Secretary. Each party shall make available to the Panel and the other party the final 
version of its opening statement as well a s its closing statement, if any, preferably at the 
end of the meeting, and in any event no later than 5.00  p.m. of the first working day 
following the meeting.  
b. After the conclusion of the statements, the Panel shal l give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then  
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Pan el, any questions to the other party to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently p ose questions to the parties. Each party shall then  have 
an opportunity to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with th e party that presented its opening statement 
first, presenting its closing statement first.  
Third parties  
 
15.  The Panel shall invite each third party to transmit to the Panel a written submission prior to 
the first substantive meeting  of the Panel with the p arties, in accordance with the timetable 
adopted by the Panel.  
16.  Each third party shall also be invited to present its views orally during a session of this first 
substantive meeting, set aside for that purpose. Each third party shall provide to the Panel t he list 
of members of its delegation in advance of this session and no later than 5.00  p.m. the previous 
working day.  
17.  The third -party session shall be conducted as follows:  
a. All third parties may be present during the entirety of this session.  
b. The Panel s hall first hear the arguments of the third parties in alphabetical order. Third 
parties present at the third -party session and intending to present their views orally at 
that session, shall provide the Panel, the parties and other third -parties with provis ional 
written versions of their statements before they take the floor. Third parties shall make 
available to the Panel, the parties and other third parties the final versions of their 
statements, preferably at the end of the session, and in any event no la ter than 
5.00 p.m. of the first working day following the session.  
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties questions for clarification on any 
matter raised i n the third parties' submissions or statements. Each party shall send in 
writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a response in writing.  
d. The Panel may subsequently pose questio ns to the third parties. Each third party shall 
then have an opportunity to answer these questions orally. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the third parties to 
which it wishes to receive a respon se in writing. Each third party shall be invited to 
respond in writing to such questions within a deadline to be determined by the Panel.  WT/DS492/R/Add.1  
 
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  Descriptive part  
 
18.  The description of the arguments of the parties and third parties in the descriptive part of the 
Panel report shall consist  of executive summaries provided by the parties and third parties, which 
shall be annexed  as addenda to the report. These executive summaries shall not in any way serve 
as a substitute for the submissions of the parties and third par ties in the Panel's examination of 
the case.  
19.  Each party shall submit executive summaries of the facts and arguments as presented to the 
Panel in its written submissions and oral statements, in accordance with the timetable adopted by 
the Panel . These summ aries may also include a summary of responses to questions . Each such 
executive summary shall not exceed 15 pages. The Panel will not summarize in the descriptive 
part of its report, or annex to its report, the parties' responses to questions.  
20.  Each third p arty shall submit an executive summary of its arguments as presented in its 
written submission and statement in accordance with the timetable adopted by the Panel. This 
summary may also include a summary of responses to questions, where relevant. The execu tive 
summary to be provided by each third party shall not exceed 6  pages.  
Interim review  
 
21.  Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Panel, in accordance 
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for review is submitted.  
22.  In the event that no further meeting with the Panel is requeste d, each party may submit 
written comments on the other party's written request for review, in accordance with the timetable 
adopted by the Panel. Such comments shall be limited to commenting on the other party's written 
request for review.  
23.  The interim rep ort, as well as the final report prior to its official circulation, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 
24.  The following procedures regarding service of documents shall apply:  
a. Each party and third party  shall submit all documents to the Panel by filing them with 
the DS  Registry (office No. 2047) .  
b. Each party and third party shall file 5 paper copies of all documents it submits to the 
Panel. Exhibits may be filed in 4 copies on CD -ROM and 2 paper  copies. The DS  Registrar 
shall stamp the documents with the date and time of the filing. The paper version shall 
constitute the official version for the purposes of the  record of the dispute.  
c. Each party and third party shall also provide an electronic copy of all documen ts it 
submits to the Panel at the same time as the paper versions, preferably in Microsoft 
Word format, either on a CD -ROM, a DVD or as an e -mail attachment. If the electronic 
copy is provided by e -mail, it should be addressed to DSRegistry@wto.org, with a  copy 
to ****.****@wto.org , ****.****@wto.org , and ****.****@wto.org .  If a CD -ROM is 
provided, it shall be filed with the DS Registr y.  
d. Each party shall serve any document submitted to the Panel directly on the other party. 
Each party shall, in addition, serve on all third parties its written submissions in advance 
of the first substantive meeting with the Panel. Each third party shall  serve any 
document submitted to the Panel directly on the parties and all other third parties. Each 
party and third party shall confirm, in writing, that copies have been served as required 
at the time it provides each document to the Panel.  WT/DS492/R/Add.1  
 
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  e. Each party and third party  shall file its documents with the DS Registry and serve  copies 
on the other party (and third parties where appropriate) by 5.00  p.m. (Geneva time) on 
the due dates established by the Panel.  A party or third party may submit  its documents 
to another party or third party in electronic  format only,  subject to the recipient party or 
third party's prior written approval and provided that the Panel Secretary  is notified . 
f. The Panel shall provide the parties with an electronic version of the descripti ve part, the 
interim report and the final report, as well as of other documents as appropriate. When 
the Panel transmits to the parties or third parties both paper and electronic versions of a 
document, the paper version shall constitute the official versi on for the purposes of the 
record of the dispute.  
25.  The Panel reserves the right to modify these procedures as necessary, after consultation with 
the parties.  
 
 
 
 WT/DS492/R/Add.1  
 
- A-7 - 
 
   
ANNEX A -2 
AMENDED WORKING PROC EDURES OF THE PANEL  
Adopted on 16 December 2015  
Amended on 3 Fe bruary 2016  
1.  In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes ("DSU"). In addition, the following Working 
Procedures shall apply.  
General  
 
2.  The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Procedures shall preclude a party to the dispute ("party") 
from disclosing statements of its own positions to the public. Members shall treat as confidential 
information submitted to the Panel by another Member which the submitting Member has 
designated as confidential. If  a party submits a confidential version of its written submissions to 
the Panel, it shall also,  upon request of a Member, pro vide a non -confidential summary of the 
information contained in its submissions that could be disclosed to the public.  
3.  The Panel shall meet in closed session. The parties, and Members having notified their interest 
in the dispute to the Dispute Settlement  Body in accordance with Article 10 of the DSU  ("third 
parties"), shall be present at the meetings only when invited by the Panel to appear before it.  
4.  Each party and third party has the right to determine the composition of its own delegation  
when meeting  with the Panel. Each party and third party shall have the responsibility for all 
members of its own delegation and shall ensure that each member of such delegation acts in 
accordance with the DSU and these Working Procedures, particularly with regard to t he 
confidentiality of the proceedings.  
Submissions  
 
5.  Before the first substantive meeting of the Panel with the parties, each party shall submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with 
the timet able adopted by the Panel. Each party shall also submit to the Panel, prior to the second 
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by 
the Panel.  
6.  A party shall submit any request for a preliminary rulin g at the earliest possible opportunity 
and in any event no later than in its first written submission to the Panel. If China requests such a 
ruling, the European Union shall submit its response to the request in its first written submission. 
If the Europea n Union requests such a ruling, China shall submit its response to the request prior 
to the first substantive meeting of the Panel, at a time to be determined by the Panel in light of 
the request. Exceptions to this procedure shall be granted upon a showin g of good cause.  
7.  Each party shall submit all factual evidence to the Panel no later than during the first 
substantive meeting, except with respect to evidence necessary for purposes of rebuttal, answers 
to questions or comments on answers provided by the o ther party. Exceptions to this procedure 
shall be granted upon a showing of good cause. Where such exception has been granted, the Panel 
shall accord the other party a period of time for comment, as appropriate, on any new factual 
evidence submitted after the first substantive meeting.   
8.  Where the  original language of an exhibit is not a WTO working language, the submitting party 
or third party shall submit a translation into the WTO working language of the submission  at the 
same time. The Panel may grant re asonable extensions of time for the translation of such exhibits 
upon a showing of good cause. Any objection as to the accuracy of a translation should be raised 
promptly  in writing, preferably no later than the next filing or meeting (whichever occurs ear lier) 
following the submission which contains the translation in question. Any objection shall be 
accompanied by a detailed explanation of the grounds of objection and an alternative translation.  WT/DS492/R/Add.1  
 
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  9.  In order to facilitate the work of the Panel, each party and third party  is invited to make its 
subm issions in accordance with the attached WTO Editorial G uide for Panel Submissions, to the 
extent that it is practical to do so .  
10.  To facilitate the maintenance of the record of the dispute and maximize the clarity of  
submissions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute. For example, exhibits submitted by China could be numbered CHN -1, 
CHN-2, etc. If the last exhibit in connection with the first submission was numbered CHN -5, the 
first exhibit of the next submission thus would be numbered CHN -6. 
Questions  
 
11.  The Panel may at any time pose questions to the parties and third parties, orally or in writing, 
including prior to each substantive meeting.   
Substantiv e meetings  
 
12.  Each party shall provide to the Panel the list of members of its delegation in advance of each 
meeting with the Panel and no later than 5.00  p.m. the previous working day.  
13.  The first substantive meeting of the Panel with the parties shall be c onducted as follows:  
a. The Panel shall invite China to make an opening statement to present its case first. 
Subsequently, the Panel shall invite the European Union to present its point of view. 
Before each party takes the floor, it shall provide the Panel an d other participants at the 
meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies for the interpreters, 
through the Panel Secretary. Each party shall make availab le to the Panel and the other 
party the final version of its opening statement as well a s its closing statement, if any, 
preferably at the end of the meeting, and in any event no later than 5.00  p.m. on the 
first working day following the meeting.  
b. After th e conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determin ed by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity t o 
present a brief closing statement, with China presenting its statement first.  
14.  The second substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall ask the European Union if it wishes to avail itself of the right to  present 
its case first. If so, the Panel shall invite the European Union to present its opening 
statement, followed by China. If the European Union chooses not to avail itself of that 
right, the Panel shall invite China to present its opening statement fi rst. Before each 
party takes the floor, it shall provide the Panel and other participants at the meeting 
with a provisional written version of its statement. In the event that interpretation is 
needed, each party shall provide additional copies for the int erpreters, through the Panel 
Secretary. Each party shall make available to the Panel and the other party the final 
version of its opening statement as well a s its closing statement, if any, preferably at the WT/DS492/R/Add.1  
 
- A-9 - 
 
  end of the meeting, and in any event no later th an 5.00  p.m. of the first working day 
following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to  the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, wit hin a 
timeframe to be determined by it, any questions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the question ing has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the party that presented its opening statement 
first, presenting its closing statement first.  
Third parties  
 
15.  The Panel shall invite each third p arty to transmit to the Panel a written submission prior to 
the first substantive meeting  of the Panel with the parties, in accordance with the timetable 
adopted by the Panel.  
16.  Each third party may be present during the entirety of the substantive meetings  with the 
Panel.  
17.  Each third party shall also be invited to present its views orally during a session of this first 
substantive meeting, set aside for that purpose. Each third party shall provide to the Panel the list 
of members of its delegation in advanc e of this session and no later than 5.00  p.m. the previous 
working day.  
18.  The third -party session shall be conducted as follows:  
a. All third parties may be present during the entirety of this session.  
b. The Panel shall first hear the arguments of the third par ties in alphabetical order. Third 
parties present at the third -party session and intending to present their views orally at 
that session, shall provide the Panel, the parties and other third -parties with provisional 
written versions of their statements bef ore they take the floor. Third parties shall make 
available to the Panel, the parties and other third parties the final versions of their 
statements, preferably at the end of the session, and in any event no later than 
5.00 p.m. of the first working day fo llowing the session.  
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties questions for clarification on any 
matter raised in the third parties' submissions or statements . Each party shall send in 
writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a response in writing.  
d. The Panel may subsequently pose questions to the third parties. Each third party shal l 
then have an opportunity to answer these questions orally. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the third parties to 
which it wishes to receive a response in writing. Each third party shall be invit ed to 
respond in writing to such questions within a deadline to be determined by the Panel.  WT/DS492/R/Add.1  
 
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  Descriptive part  
 
19.  The description of the arguments of the parties and third parties in the descriptive part of the 
Panel report shall consist  of executive summaries  provided by the parties and third parties, which 
shall be annexed  as addenda to the report. These executive summaries shall not in any way serve 
as a substitute for the submissions of the parties and third parties in the Panel's examination of 
the case.  
20.  Each party shall submit executive summaries of the facts and arguments as presented to the 
Panel in its written submissions and oral statements, in accordance with the timetable adopted by 
the Panel . These summaries may also include a summary of responses to questions . Each such 
executive summary shall not exceed 15 pages. The Panel will not summarize in the descriptive 
part of its report, or annex to its report, the parties' responses to questions.  
21.  Each third party shall submit an executive summary of its arguments as presented in its 
written submission and statement in accordance with the timetable adopted by the Panel. This 
summary may also include a summary of responses to questions, where relevant. The executive 
summary to be provided by each third part y shall not exceed 6  pages.  
Interim review  
 
22.  Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Panel, in accordance 
with the timetable ad opted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for review is submitted.  
23.  In the event that no further meeting with the Panel is requested, each party may submit 
written comments on t he other party's written request for review, in accordance with the timetable 
adopted by the Panel. Such comments shall be limited to commenting on the other party's written 
request for review.  
24.  The interim report, as well as the final report prior to its official circulation, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 
25.  The following procedures regarding service of documents shall apply:  
a. Each party and third party  shall submit all documents to the Panel by filing th em with 
the DS  Registry (office No. 2047) .  
b. Each party and third party shall file 5 paper copies of all documents it submits to the 
Panel. Exhibits may be filed in 4 copies on CD -ROM and 2 paper  copies. The DS  Registrar 
shall stamp the documents with the d ate and time of the filing. The paper version shall 
constitute the official version for the purposes of the  record of the dispute.  
c. Each party and third party shall also provide an electronic copy of all documents it 
submits to the Panel at the same time as  the paper versions, preferably in Microsoft 
Word format, either on a CD -ROM, a DVD or as an e -mail attachment. If the electronic 
copy is provided by e -mail, it should be addressed to DSRegistry@wto.org, with a copy 
to ****.****@wto.org , ****.****@wto.org , and ****.****@wto.org .  If a CD -ROM is 
provided, it shall be filed with the DS Registry.  
d. Each party shall serve any document submit ted to the Panel directly on the other party. 
Each party shall, in addition, serve on all third parties its first and second written 
submissions, written responses to questions and comments, and related exhibits. Each 
third party shall serve any document s ubmitted to the Panel directly on the parties and 
all other third parties. Each party and third party shall confirm, in writing, that copies 
have been served as required at the time it provides each document to the Panel.  WT/DS492/R/Add.1  
 
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  e. Each party and third party  shall f ile its documents with the DS Registry and serve  copies 
on the other party (and third parties where appropriate) by 5.00  p.m. (Geneva time) on 
the due dates established by the Panel.  A party or third party may submit  its documents 
to another party or third  party in electronic  format only,  subject to the recipient party or 
third party's prior written approval and provided that the Panel Secretary  is notified . 
f. The Panel shall provide the parties with an electronic version of the descriptive part, the 
interim report and the final report, as well as of other documents as appropriate. When 
the Panel transmits to the parties or third parties both paper and electronic versions of a 
document, the paper version shall constitute the official version for the purposes o f the 
record of the dispute.  
26.  The Panel reserves the right to modify these procedures as necessary, after consultation with 
the parties.  
 
_______________  
 
 
 
 
 WT/DS492/R/Add.1  
 
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  ANNEX  B 
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 First executive summary of the argument s 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 
 WT/DS492/R/Add.1  
 
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  ANNEX B -1 
FIRST EXECUTIVE SUMMARY  OF THE ARGUMENTS OF CHINA  
I. Introduction  
1. In this dispute, China challenges the European Union's determination and allocation of tariff 
rate quotas (TRQs) which are the sole compensation for the withdrawal of its unlimited tariff 
concessions for poultry meat.  
2. China is the second largest producer of poultry in the world and a significant exporter of 
poultry meat products, including to the European Union. Yet, in denying China's principal or 
substantial supplying interest, the Eur opean Union stated that China's share in the trade affected 
by the concessions was insufficient, while choosing to ignore the effect of the sanitary measures 
(SPS) measures that it had imposed on Chinese poultry meat products which had acted effectively 
as a ban on imports into the European Union of Chinese products.  
3. China contends that the European Union's TRQs for poultry meat products (1) do not 
maintain the balance of tariff concessions existing prior to the withdrawal, (2) do not give due 
credit to China's future trade propects or its share of the European Union market absent the TRQs, 
and (3) do not offer to Chinese poultry meat products the share of imports into the European 
Union commensurate with their comparative advantages.  
II. The European Un ion's SPS Measures Imposed On Imports Of Poultry Meat 
Products From China And Their Impact  
4. China is not challenging the European Union's SPS measures per se . China nevertheless 
submits that the the impact of these SPS measures on the trade flows of the products in question 
should have been taken into account in the process of determining the TRQs, their level and their 
allocation.  
5. Imports of Chinese poultry meat were completely banne d in the European Union from 
23 May 1996 through 8 February 2000 and from 14 March 2002 to 30 July 2008. Even when 
special heat treatment requirements allow certain types of cooked poultry meat products from 
China to be imported into the EU as exceptions to the import ban on all poultry meat products 
from China, between 8 F ebruary 2000 to 14 March 2002 and after 30 July 2008, uncooked poultry 
meat or cooked poultry that did not undergo the specific heat treatment could not be imported into 
the EU.  
III. Legal Claims  
A. China's Claims Under Article XXVIII  
6. Pursuant to Arti cle XXVIII:1, a WTO Member may withdraw or modify a concession provided 
that it negotiates with the WTO Members who have initial negotiating rights and a principal 
supplying interest (PSI) or consult with WTO Members who have a substantial supplying intere st 
(SSI). Paragraphs 4 and 7 of Note Ad Article XXVIII:1 establish the rules on how to appropriately 
determine which Members have PSI or SSI, i.e. by the actual share of imports or the share of 
imports that should have been obtained in the absence of the d iscriminatory quantitative 
restrictions. Essentially, all products are equally expect ed to have access to the EU market based 
on the tariff concessions that were negotiated and extended to all on an MFN basis. Accordingly, 
any discriminatory quantitative r estriction that has affected the shares of imports should be taken 
into account and allowance should be made for such restriction. To do otherwise would mean that 
the Article XXVIII:2 requirement to maintain a general level of reciprocal concessions would not be 
satisfied.  WT/DS492/R/Add.1  
 
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  1. The European Union Violated Article XXVIII:1 By Failing To 
Recognise China's PSI or SSI Status  
a. The European Union Import Bans Were Discriminatory 
Quantitative Restrictions   
7. The fact that the European Union subjects Chinese poult ry meat to import bans is not in 
question. What is at issue is whether the import bans are "discriminatory quantitative restrictions " 
within the meaning of paragraphs 4 and 7 of Note Ad Article XXVIII:1.  
8. The term "restriction " has a broad scope which id entifies not just a condition placed on 
importation but a condition that has a limiting effect. As a result of the EU's various SPS measures, 
from 2002 to 2008,  there was an effective import ban on poultry meat products from China. An 
import ban, by its n ature, is a "prohibition " that not only restricts but prevents imports of the 
product subject to the regulatory measure. Accordingly, the import ban resulting from the EU's 
SPS measures falls within the scope of "quantitative restrictions ". 
9. The concept of "discriminatory " quantitative restrictions covers not only those that are 
prohibited by the covered agreements but also others that are justifiable under relevant provisions 
of the covered agreements. China agrees with the Appellate Body that the determ ination of 
"discriminatory " should be based on the provision concerned, which in this case is Article XXVIII. 
The overall purpose, as provided in Article XXVIII:2, is to "endeavour to maintain a general level 
of reciprocal and mutually advantageous concess ions not less favourable to trade than that 
provided in this Agreement ". By only taking actual import volumes into consideration but not 
import bans due to SPS measures when identifying WTO Members for Article XXVIII negotiations 
or consultations, this wou ld mean that:  
(i) WTO Members whose imports were affected by import bans due to SPS measures 
would be prevented from participation in the negotiations or consultations;  
(ii) The condition of "in the absence of discriminatory restrictions " in paragraphs 4 a nd 7 
of the Note Ad Article XXVIII:1 would be rendered meaningless; and  
(iii) The TRQ or the TRQ plus compensation would not result in the maintenance of 
concessions at the general level of reciprocity and mutual advantages that had existed 
before the modi fication of concessions.  
10. Negotiations under Article XXVIII aim to maintain a general level of reciprocal and mutually 
advantageous concessions not less favourable than what existed in the period preceding the 
withdrawal of concessions. What that level  is should be a function of the tariff bindings for 
unlimited import volumes that existed prior to their withdrawal or modification, and not a function 
of imports that are affected by differential treatment. The import bans on all Chinese poultry meat 
products from 2002 to 2008, clearly show that a distinction was made between imports from China 
and those from other WTO Members, and have affected the shares of China's imports of poultry 
products in the European Union. In other words, the EU's SPS measures a re "discriminatory 
quantitative restrictions " for the purpose of the application of Article XXVIII within the meaning of 
Notes 4 and 7 of Ad Article XXVIII:1.  
b. The European Union Used Non -representative Periods To 
Determine PSI or SSI  
11. The identifica tion of the reference period for the determination of PSI or SSI must be 
compatible with the purpose of the determination of WTO Members with PSI or SSI, that is to 
identify which of the WTO Members have or would have had large enough exports of the subjec t 
products in the absence of discriminatory quantitative restrictions. In keeping with that purpose 
and in light of the rights and interests of other Members that will otherwise be excluded from 
negotiations or consultations, the period to be taken into ac count must be representative  so as to 
permit an accurate determination of the Members with a PSI or SSI.  
12. The adjustment of the reference period is necessary where the three -year period preceding 
the notification of the intention to withdraw or amend a concession was tainted by the existence of WT/DS492/R/Add.1  
 
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  discriminatory quantitative restrictions and/or data for a more recent period has become available 
before the end of the negotiations and consultations.  
13. China has submitted sufficient factual evidence to supp ort its claims of a substantial or a 
principal supplying interest. The evidence includes, inter alia , China's poultry meat production 
capacity, its poultry meat imports to the world in general and to specific other countries, as well as 
to the European Uni on following the partial lifting of the import bans.  
14. In protracted negotiations such as those for part of the TRQs that lasted three years, China 
submit s that at the very least, re -assessment should occur as soon as there is evidence of the 
developmen ts materially affecting the determination of who holds a PSI or SSI, or affecting the 
determination of the future trade prospects. By failing to account for import developments since 
the relaxation of its import ban, the reference period used by the Europe an Union is not 
"representative ". 
15. In the present case, China higlights three facts (1) the three -year period mentioned in the 
European Union's initial notification was affected by the import bans; (2) the negotiations and 
consultations by the European Union were so protracted as to render the trade data for the period 
used by the EU ancient history; and (3) the statistical data show resumption of imports into the 
European Union of China poultry meat after the partial relaxation of the import bans. China  
submits that, based on this data and the information generally available on China’s production and 
competitiveness in the field of poultry meat, the European Union should have reconsidered 
whether it was negotiating or consulting with all WTO Members hold ing a PSI or SSI.  
2. The European Union Violated Article XXVIII:2 and P aragraph 6 of 
the Understanding on the Interpret ation of Article XXVIII of 
GATT  1994   
16. Article XXVIII allows WTO Members  to m odify concessions bound under Article II but 
requires the  balance in the general level of reciprocal concessions to be maintained. There is no 
discretion in this regard, especially since tariff liberalisation is one of the fundamental goals of the 
WTO.  
17. Article XXVIII:2 directs the Members involved in negotia tion and consultations to maintain a 
general level of reciprocal and mutually advantageous concessions not only vis-à-vis themselves 
but also vis-à-vis all other WTO Members. The use of the word "general " in Article XXVIII:2 
supports that view. If Article XXVIII:2 only intended to maintain the level of concessions as 
between the withdrawing WTO Member and the WTO Members with which it negotiates or which it 
consults, the provision should have read that the aim was to maintain "the level of reciprocal and 
mutually advantageous concessions " or "the level of reciprocal and mutually advantageous 
concessions between them ". 
18. This also finds support in the findings by the Appellate Body who agreed with the panel in EC 
– Poultry , which stated that:  
If a preferent ial treatment of a particular trading partner not 
elsewhere justified is permitted under the pretext of ‘compensatory 
adjustment’ under Article XXVIII:2, it would create a serious 
loophole in the multilateral trading system. Such a result would 
fundamental ly alter the overall balance of concessions Article 
XXVIII is designed to achieve .  (emphasis added)  
19. It is further supported by the negotiating history of Article XXVIII of the GATT 1994.  
20. Thus, the outcome of a modification of concessions must:  
(i) Achieve an overall balance of concessions assessed within the multilateral context, 
taking into consideration the interests of WTO Members without an initial negotiating 
right, PSI or SSI;  WT/DS492/R/Add.1  
 
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  (ii) Maintain a general level of reciprocal and mutually advantag eous concessions as 
provided in its Schedule of Concessions prior to the modification; and  
(iii) Be extended to all other WTO Members on a n MFN basis.  
21. What that outcome should be is further guided by paragraph 6 of the Understanding on the 
Interpretati on of Article XXVIII of GATT 1994, which specifically applies to the replacement of an 
unlimited tariff concession by a TRQ, as well as provides the basis for the calculation of 
compensation.  
22. Where TRQs are allocated during the modification negotiatio ns, compliance w ith 
Article  XXVIII:2 necessitates a comparison at the level of the WTO Members to which the quota 
was allocated rather than at the global level only. It would not make any sense to fix a global TRQ 
taking into account overall future prospec ts without taking into account future trade prospects at 
the level of the separate TRQs in which the global TRQ is broken down. To do otherwise would 
result in over -compensation for some and under -compensation for others, thereby creating 
discrimination. T hus, in reading Article XXVIII:2 together with paragraph 6 of the Understanding 
and applied in the context of the current dispute, the assessment must be at the level of  the 
allocated TRQ as well as at the level of the global TRQ.  
23. In order for the TR Qs to be compensation, they should be set at the level allowing China to 
import such quantities of poultry meat products into the European Union within the TRQ as are in 
line with its future trade prospects. Pursuant to paragraph 6 of the Understanding, th e WTO 
Member replacing an unlimited tariff concession by a TRQ must accord compensation based on the 
greater of (i) trade "in the most recent representative three -year period increased by the average 
annual growth rate or 10 percent or (ii) trade in the mo st recent year increased by 10 percent ". In 
other words, the volume of the TRQ should reflect  the natural growth level of exports of Chinese 
poultry meat products to the European Union . 
24. In the case of protracted negotiations, the period for determinati on of compensation should 
be adjusted in light of latest available trade data. Adjustments should also be made to account for 
the existence of the import bans. Being kept out of a market due to import bans as a result of 
sanitary requirements is different from being shut out due to modified concessions. Chinese 
poultry meat producers understood that they would have access to the European Union's market 
based on the European Union's tariff commitments, as soon as they/their products meet the 
European Union's  sanitary controls. But now, because of the European Union's modified 
concessions in the form of TRQs, most Chinese poultry meat products would be subject to the 
higher out -of-quota tariff rates (because the compensatory TRQs for "Others " are small), even 
though their improved sanitary controls and practices meet the European Union's sanitary 
requirements.  
25. By using a period tainted by a ban on imports of Chinese poultry meat products into the 
European Union, the TRQs determined by the European Union ar e not at a level reflecting future 
growth prospects. The European Union's modifications of concessions have disturbed its balance of 
concessions vis-a-vis China. It also means that the European Union has in effect extended the 
effect of  the SPS measures i t imposed on China  permanently . 
B. China's Claims Under Article XIII  
1. The European Union's Administration of TRQs Is Discriminatory 
And Violates Article XIII:1  
26. China contends that the general application of the provisions of Article XIII are necessar ily 
applicable to all TRQs. As explicitly acknowledged by the Appellate Body in EC – Poultry , 
irrespective of the status of the TRQs instituted under the provisions of Article XXVIII, they must 
equally respect Article XIII of the GATT 1994. Otherwise, the object and purpose of the non -
discrimination provision of Article XIII would be defeated.  
27. First, the requirement of Article XIII:1 is that imports from all third countries must be 
similarly restricted. As the Appellate Body in EC – Bananas II (Article 21.5 – Ecuador II)/EC – 
Bananas III (Article 21.5 – US) established, there can be no discrimination in the level of access WT/DS492/R/Add.1  
 
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  that is given to the import market. The mere fact the the European Union allocated a share of the 
TRQs for poultry meat to "others " does not mean that products from such other Members are 
similarly restricted to those from Thailand and/or Brazil. In the present case, for those poultry 
meat products where the European Union has allocated TRQ shares to WTO Members other than 
Brazil and/or  Thailand, it did so in volumes and portions that are so small as to allow no 
meaningful access to or participation in the TRQs. Thus, the benefit afforded by the TRQ is 
reserved nearly exclusively to two WTO Members and other WTO Members , especially China  which 
had and has substantial supplying interests,  are precluded de facto from having access to (and 
participating in) the TRQs in violation of Article XIII:1 of the GATT 1994.  
28. Second, if all countries must be similarly restricted, then all Members wi th a substantial 
supplying interest must be similarly restricted. In the present case, the European Union negotiated 
with and allocated country -specific shares to Brazil and Thailand which it recognised as having 
principal or substantial supplying interest s. China submits and has demonstrated that it held a 
substantial supplying interest and thus accordingly, should have been (but was not) allocated a 
country -specific share of the TRQ, similar to those allocated to Brazil and Thailand.  
29. Third, where ther e is an allocation of a TRQ, "[m]embers not having a substantial supplying 
interst will be able, if sufficiently competitive, to gain market share in the "others " category and 
possibly achieve "substantial supplying interest " status which, in turn, would p rovide them the 
opportunity to receive a country -specific allocation by invoking the provisions of Article XIII:4 ", as 
noted by the panel in EC – Bananas III (Ecuador) . In the present dispute, the European Union has 
allocated very small "others " shares in the TRQs (and for certain tariff lines, none) and the new 
out-of-quota tariff rates are much higher than the in -quota rates. The only conclusion here is that 
all WTO Members are not given "access and an opportunity of participation ", and are not "similarly  
restricted ".  
30. Finally, where import bans due to SPS measures are applied to a WTO Member but not to 
others, the determination of TRQs without taking into account the existence and impact of such 
import bans would lead to a long -term freezing of those SPS measures, hardly a situation where 
all third countries are "similarly restricted ". 
2. The European Union's Failure To Establish TRQs Based On A 
Representative Period And Take Into Account The Import Bans And 
Comparative Advantages Violates Article XIII :2 
31. The chapeau of Article XIII:2 of the GATT 1994 sets forth a general non -discriminatory 
obligation with respect to the allocation of tariff quota among Members, whether they hold a n SSI 
or not. The Appellate Body in EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III 
(Article 21.5 – US) confirmed that the standard for compliance with the chapeau of Article XIII:2 is 
high; the TRQs must be set at levels such as to be the least trade-distortive possible. The TRQs 
must afford:  
(i) all WTO Mem bers access to the TRQs; and  
(ii) all WTO Members competitive opportunities under the TRQs that mimics "their 
comparative advantage " vis-à-vis other WTO Members participating in the TRQs.  
32. TRQs must be allocated such that WTO Members are in a position t o exploit their 
comparative advantages -- be that in terms of their cost of production, the nature and properties 
of their products or other factors -- and, thus, to make use of competitive opportunities to increase 
their trade with the WTO Member imposing  the TRQs. They will then achieve the share they would 
have obtained in the absence of the TRQs.  
33. In line with the panel reports in US – Line Pipe  and in EEC – Chilean Apples , the historical 
trade patterns used for the determination of the share that W TO Members might be expected to 
obtain in the absence of TRQs must be the trade patterns during a period preceding the imposition 
or allocation  of the TRQs. By using 2006 -2008, a period remote from the allocation of the TRQs in 
the Second Modification Pack age, as the reference period, the EU violated the chapeau of  
Article  XIII:2.  WT/DS492/R/Add.1  
 
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  34. In addition , Article XIII:2(d) provides that the representative period must be selected with 
due account being taken of special factors , such as  import bans due to SPS measure s which curb 
the natural comparat ive advantages of a WTO Member.  They are not themselves an element of 
competition. The facts in this case demonstrate that China could satisfy the sanitary requirements 
and that its exports of poultry meat to the European U nion increased significantly after the lifting 
of the import bans. As such, the natural comparative advantages of the WTO Member once the 
SPS measures are lifted or relaxed must be the basis for the determination of the TRQs.  
35. Accordingly, determining TRQs based on a reference period that is affected by import bans 
due to SPS measures violates the requirements of the chapeau of Article XIII:2. A s stipulated by 
Article XIII:2(d), the reference period must also take into account special factors. Import ba ns 
clearly affect trade in the product; trade flows in a period where import bans are in place can not 
be said to be representative. Thus, the reference period affected by import bans must be adjusted. 
Otherwise, the country -specific TRQs and the "other " shares would not reflect the comparative 
advantages nor accord competitive opportunities that WTO Members might have expected to 
obtain in the absence of the TRQs.  
36. China has shown that the import bans due to the European Union's SPS measures have 
affect ed Chinese poultry meat imports into the European Union for all periods taken into account 
by the EU. Older periods were also not representative because they too were affected by import 
bans. As a result, adjustments should have been made to neutralize the  impact of the import 
bans. In light of the Havana Reports and the GATT panel findings in EEC – Chilean Apples , such 
adjustments could have been made by considering China's comparative advantages in terms of its 
cost of production, the nature and propertie s of its products, export capacity, the position of 
China's exports of poultry meat products to non -EU markets .  
37. Finally, the TRQs that are allocated to "all others " must be at a sufficient level in order to 
allow the relevant WTO Members going forward  to make use of their comparative advantages so 
as to obtain a n SSI. What that level is will depend on the circumstances of each case, and as the 
panel in EC – Banana III  noted, the level might vary based on the structure of the market.  
38. Relying on Arti cle XIII:4, the Appellate Body in EC – Bananas III (Article 21.5 – Ecuador II) 
/ EC – Bananas III (Article 21.5 – US) established that a country -specific TRQ may not lead to 
long-term freezing of the shares of imported products and cannot be applied in suc h a way as to 
create an artificial hurdle preventing the natural evolution of the import market structure. A stifling 
of the trade flows that could be anticipated without the imposition of the TRQ is especially likely to 
happen when the out -of-quota tariff  rate is set at a very high level in both absolute and relative 
terms.  
39. In this dispute, the "all others " shares of the TRQs for poultry meat for one tariff heading is 
non-existent while those for four tariff headings fall below five percent. In contras t, China's poultry 
meat imports to the European Union had reached very significant levels in the years preceding the 
imposition of the TRQs in 2012. Thus, based on the evidence provided by China, China had a 
substantial supplying interest that should have been recog nized by the EU and should have  led to 
the attribution of a commensurate country -specific share in the TRQs. Absent such attribution, the 
"all others " share should have been established at a much higher level than is currently the case, 
to allow China to reach SSI.  
3. The European Union's Failure To Enter Into Meaningful 
Consultations Violates Article XIII:4  
40. Article XIII:4 provides for consultations. However, mere consultations followed by no 
adjustment of a TRQ when the conditions for an adju stment are met, would mean that the 
consultations under Article XIII:4 are a dead letter. That cannot be the purpose and objective of 
the mandatory consultations provided for in Article XIII:4. It would also be inconsistent with the 
findings of the Appella te Body in EC – Bananas III (Article 21.5 – Ecuador II)/EC – Bananas III 
(Article 21.5 – US) that a country -specific TRQ may not lead to long -term freezing of the shares of 
imported products and cannot be applied in such a ways as to create an articifical hurdle 
preventing the natural evolution of the import market structure. As such, consultations under 
Article XIII:4 must consider issues of substance, i.e. they must  relate as mentioned in 
Article  XIII:4 to "the need for an adjustment of the proportion det ermined or of the base period WT/DS492/R/Add.1  
 
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  selected, or for the appraisal 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 unrestri cted utilisation ". 
C. China's Claims Under Article II  
41. According to Article II:7 of the GATT 1994, the schedules of concessions are an integral part 
of the GATT 1994. In line with the Decision of 26 March 1080 on the Procedures for Modification 
and Rec tification of Schedules of Tariff Concessions and pursuant to paragraph 8 of the Procedures 
for Negotiations under Article XXVIII, the modification of schedules is subject to certification. Thus, 
in the context of modification of schedules of concessions, certification of modified schedules is a 
requirement that a WTO Member must undertake before the application erga omnes  of any revised 
concession; otherwise, implementation of the modification will be in violation of the Schedule 
annexed to the GATT 1994.  
42. Nothing in paragraph 7 of the Procedures for Negotiations under Article XXVIII explicitly 
waives the obligations in Article II. If paragraph 7 of the Article XXVIII Procedures were to be read 
as waiving the obligation in Article II for the results of A rticle XXVIII negotiations, the certification 
process to which it refers would be reduced to inutility, contrary to the principle of effective 
interpretation. It would also run contrary to the object and purpose of all the WTO rules regarding 
certification , which is to allow the entire Membership to acquiesce in modifications to Schedules, 
since Schedules contain obligations that are an integral part of the WTO Agreement and give rise 
to rights enjoyed by all Members.  
43. The tariffs and TRQs implemented by  the EU have not been certified nor been given legal 
effect. And by applying tariffs well in excess of the tariff rates that are certified in its Schedule of 
Concessions, the European Union violated Article II:1.  
D. China's Claims Under Article I  
44. Article I:1 of the GATT 1994 prohibits discriminatory measures in connection with 
importation that confer an "advantage, favour, privilege or immunity " to products from certain 
countries and not to like products from other countries.  
45. The preparatory work o f Article XXVIII of the GATT supports the view that Article I of the 
GATT 1994 is applicable to any action taken and outcome resulting from modification of 
concessions under Article XXVIII of the GATT 1994. The Appellate Body in EC – Bananas III 
(Article 2 1.5-Ecuador II)  also found that it is possible for a more favourable TRQ allocation to 
violate Article I of the GATT 1994.  
46. The majority of the TRQs for the products at issue are allocated to only two WTO Members -
- Brazil and Thailand. Imports of the p roducts at issue from China are subject to the higher out -of-
quota rates under the 2007 and 2012 Modification Packages – that is, they face vastly different 
and more adverse market access conditions in the EU market as compared to like products from 
Brazil  and Thailand.  
47. As such, the tariffs and TRQs negotiated by the European Union and implemented under the 
First and Second Modification Packages are per se violations of Article I:1.  
IV. Conclusion  
48. The legal possibility of withdrawing tariff concessi ons is not at dispute here. However, such a 
withdrawal must occur in the strictest respect of the legal requirements so as to maintain the 
balance of concessions and the predictability and security that tariff commitments are supposed to 
achieve. Moreover,  where TRQs are imposed and allocated, these TRQs should respect the share of 
imports that each WTO Member would have had in  the absence of the TRQs based on its own 
comparative advantages. All China is seeking here is for the European Union to honor its 
obligations under the WTO.  WT/DS492/R/Add.1  
 
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  ANNEX B -2 
SECOND EXECUTIVE SUM MARY OF THE ARGUMENT S OF CHINA   
I. Introduction  
1. In this Second Executive Summary China focuses on the key issues in this dispute that were 
discussed during the Panel's second substantive meeting w ith the Parties and the responses to the 
Panel's questions.  
II. China's Claims Under Article XXVIII  
A. China's Claims Under Article XXVIII:1  
1. The European Union's SPS Measures Are Discriminatory 
Quantitative Restrictions  
2. China submits, with support fr om various panels and the Appellate Body, that prohibitions or 
restrictions on importation under Article XI:1 may be taken in the form of sanitary and 
phytosanitary ("SPS") measures. Even the European Union ("EU") itself admits that "[f]ailure to 
comply wi th such requirements may entail the imposition of import restrictions, including the 
prohibition of the imports concerned". China has clearly demonstrated that the EU's SPS measures 
had a material impact on imports of poultry meat products from China. They  in fact resulted in an 
import ban. Even when special exceptions were given to (1) fresh poultry meat from certain 
production areas in China; and (2) poultry meat products subject to special heat treatment 
requirements, these only had the effect of narrowi ng the scope of the import bans (i.e. the 
limitation on production areas and the heat treatment requirements had a limiting effect on 
China's imports of the products in question into the EU). Thus, the volume of imports under each 
of the tariff lines in qu estion would not fully reflect nor would it be truly representative of China's 
full import potential.  
3. There are several instances where the impact of the EU's SPS measures during the relevant 
reference periods were different as between China and Thailan d.. These instances clearly show 
that the effect of adopting the import bans is straightforward: products from certain countries may 
be imported while products from other countries may not. Therefore, a distinction – a 
differentiation – is made between pou ltry originating in one country and poultry originating in 
another. Whether such disparate treatment is justifiable is not relevant in assessing whether a 
measure constitutes a "discriminatory quantitative restriction" in the sense of Ad Note 
Article  XXVII I:1. Article XXVIII and paragraphs 4 and 7 of Ad Note Article XXVIII:1 are concerned 
with the impact that such restrictions had on the imports from supplying World Trade Organization 
("WTO") Members. That being the case, import bans, whether WTO -consistent  or not, must be 
taken into account to determine whether the WTO Members affected should have had a principal 
or substantial supplying interest in the absence of the import bans.  
4. Contrary to the EU's flawed assertions, China is not suggesting that the E U must abolish or 
replace its SPS regime, nor is it requesting compensation for measures that are presumably WTO 
consistent. First, China is not advocating for the replacement  of WTO consistent measures in the 
form of import bans based on SPS measures. Chi na and Chinese poultry meat producers have 
every reasonable expectation that their products would have access to the EU market upon 
meeting the EU's SPS requirements in accordance with the EU's commitments under its Schedule 
of Concessions. What is being r eplaced is the withdrawn concession. Before the re -binding 
exercise, China was entitled to un -limited access for its poultry meat at the bound rate set forth in 
the EU's Schedule of Concessions. And following the re -binding, the balance of concessions and 
future prospects must be maintained in order to have full effect for the time when compliance with 
the EU's SPS measures is achieved. Second, compensation under Article XXVIII is for the 
modification of concessions, it is not to address other WTO obligatio ns. Just because an SPS 
measure is WTO compliant – which is not at issue here – does not mean that it can serve as a 
basis for the determination of compensatory tariff -rate quotas ("TRQs") in case of withdrawn tariff WT/DS492/R/Add.1  
 
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  bindings. In order to achieve the purpo se of maintaining a general level of reciprocal and mutually 
advantageous concessions not less favourable than what existed in the period preceding the 
withdrawal of concessions pursuant to Article XXVIII:2, the determination of the total quantity of 
each TRQ and its allocation among supplying countries should be based on the future trade 
prospects of China's poultry meat exports to the EU taking into account the impact of import bans 
imposed by the EU.  
2. The European Union Used Non -representative Periods To 
Determine Which WTO Members Held Principal Or Substantial 
Supplying Interests  
5. The identification of the reference period for the determination of principal supply ing interest 
("PSI") or substantial supplying interest ("SSI") must be compatible with t he purpose of a 
reference period, which is to identify the WTO Members having sufficiently large exports of the 
subject products (or who would have had such exports in the absence of discriminatory 
quantitative restrictions). In keeping with that purpose a nd in light of the rights and interests of 
other Members that will otherwise be excluded from negotiations or consultations, the period to be 
taken into account must be representative  so as to permit an accurate determination of the 
Members with a PSI or S SI.  
6. The adjustment of the reference period or at least an adjustment to the data for the 
reference period is necessary where the three -year period preceding the notification of the 
intention to withdraw or amend a concession was tainted by the existenc e of discriminatory 
quantitative restrictions and/or data for a more recent period has become available before the end 
of the negotiations and consultations. Brazil supports China's view, stating that "there is no reason 
to consider that adjustments cannot  happen if the circumstances require. In many cases they may 
actually be necessary in light of the very purpose of Article XXVIII".  
7. Furthermore, in the case of protracted negotiations (such as those in connection with the so -
called "Second Modification  Package"), China submit s that at the very least, re -assessment should 
occur as soon as there is evidence of the developments materially affecting the determination of 
who holds a PSI or SSI, or affecting the determination of the future trade prospects. Bo th Brazil 
and Argentina lends support to China's position on re -assessment. By failing to account for import 
developments since the relaxation of its import ban, the reference period used by the European 
Union was not "representative".  
8. In the present ca se, China highlights three facts. First, the three -year period mentioned in 
the EU's initial notification was affected by the import bans. Second, the negotiations and 
consultations by the EU were so protracted as to render the trade data for the period us ed by the 
EU "ancient history". Third, the statistical data show resumption of imports into the EU of China 
poultry meat after the partial relaxation of the import bans. China submits that, based on this data 
and the information generally available on Chin a’s production and competitiveness in the field of 
poultry meat, the EU should have reconsidered whether it was negotiating or consulting with all 
WTO Members holding a PSI or SSI. An inappropriate determination of Members with a PSI or an 
SSI would not yi eld negotiations consistent with Article XXVIII.  
3. There Is No Bright Line Rule On Using A 10% Import Share 
Threshold To Determine SSI  
9. While now stating that it did not "apply a rigid 10 percent test", the EU then strangely 
questions that "China has no where identified the specific characteristics of the poultry market that 
would make inappropriate the use of the customary 10% threshold". As provided in paragraph 7 of 
the Ad Note to Article XXVIII:1, China consistently argues against a bright line rule f or determining 
who is or is not an SSI; there is nothing "customary" about the 10% threshold. China is of the 
opinion that one needs to take into account the circumstances of each case, such as the structure 
of the market, and special factors or discrimina tory quantitative restrictions affecting the Member's 
import share.  
10. The EU's insistence on the 10% threshold is not supported by its own trade statistics. For 
example, the EU imported zero volume of tariff heading 1602 39 21 from Thailand in the three  
years prior to the conclusion of the negotiations for the Second Modification Package in 2012, WT/DS492/R/Add.1  
 
- B-11 - 
 
  namely 2009, 2010 and 2011. Moreover, total Thai imports over the period 1996 -2015 accounted 
for less than 2% of the total imports by the EU28. Yet, the EU allo cated 100% of the TRQ for tariff 
heading 1602 39 21 to Thailand based on the import statistics for the period 2006 -2008.  
11. In this case, the EU (a) failed to establish 10% as the appropriate threshold that reflected a 
"significant share" as regards the market concerned, and (b) applied a 10% test to actual import 
columes without taking into account the quantitative restrictions and special factors affecting 
China's market share in the EU.  
B. China's Claims Under Article XXVIII:2  
1. Article XXVIII:2 And Paragraph 6 Of The Understanding Address 
The Allocation Of Compensation In The Form Of TRQs  
12. Article II of the GATT 1994 specifically requires Members to be bound by their schedule of 
concessions. Contrary to the EU's assertion, China submits that Artic le XXVIII  does not leave a 
wide margin of discretion when allowing WTO Members  to modify Article II concessions lest the 
fundamental goals of the WTO are undermined. Furthermore, TRQs are inherently more trade 
restrictive than unlimited tariff concessions.  China notes that this is the reason why paragraph 6 of 
the Understanding provides that compensation must exceed the amount of trade affected. 
Otherwise, the compensation would not reflect future trade prospects.  
13. The EU argues that Article XXVIII:2 and  paragraph 6 of the Understanding do not address 
the allocation of TRQs among supplying countries. China is not suggesting that these provisions 
require Members to allocate compensation in the form of TRQs among supplying countries. 
However, where a Member  chooses to allocate (or break down) the total compensation among 
supplying countries and records the shares of the compensation as part of its modification of 
concessions, as the EU did in this case, China contends that the sufficiency of the compensation  
under Article XXVIII:2 and paragraph 6 of the Understanding must be examined not only at the 
level of total compensation, but also at the level of the compensation received by each supplying 
country or group of countries. Brazil supports China's views, st ating that "in negotiations under 
Article XXVIII, the provision of the total amount of compensation in the form of TRQs is 
intrinsically tied to the specific amount given to each participating Member".  
2. Compensation Must Reflect Future Trade Prospects Ex empt From 
The Impact Of Import Bans And Calculated Based On The Formula 
In Paragraph 6 Of The Understanding  
14. To the EU, the wording of paragraph 6 of the Understanding, read with paragraph 6 of Ad 
Note Article XXVIII:1, means that the most recent three -year period preceding the notification of 
the intention to withdraw concessions should always be used as the reference period. China 
disagrees.  
15. Paragraph 6 of Ad Note Article XXVIII:1 provides that compensation should be judged "in 
the light of the co nditions of trade at the time of the proposed withdrawal or modification". The 
moment of the "proposed withdrawal or modification" is not the moment of the notification of the 
mere intention to withdraw or modify concessions. It is the moment at which the details of the 
withdrawal or modification are agreed immediately preceding their implementation. And the 
reference to "future" in paragraph 6 of the Understanding confirms the intention to make sure that 
the compensation is as close as possible to economic  reality at the time of the implementation of 
the withdrawal of the concession.  
16. Furthermore, for the general balance of concessions to be restored pursuant to 
Article  XXVIII:2, the future trade prospects under paragraph 6 of the Understanding should ta ke 
into account the future trade prospects of all WTO Members exempt from the impact of import 
bans. In other words, where warranted in light of the circumstances of a particular case, another 
period which is more representative should be used, or alternat ively, the trade data during the 
most recent period should be duly adjusted. In fact, the EU itself has modified the reference period 
from that initially notified for two tariff headings covered by the First Modification Package.  WT/DS492/R/Add.1  
 
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  17. The EU claims that co mpensation in the form of the global volume of the TRQs is at least 
equal to, but most often in excess of, the formula set out in paragraph 6 of the Understanding. 
However, a quick calculation by China shows that not only do the global volumes of several T RQs 
fall short of the requirements of paragraph 6 of the Understanding, the allocation to 'all others' is 
extremely small and falls short of what is required under paragraph 6 of the Understanding. 
Indeed, for some tariff lines, even if the periods selecte d by the EU are used as the basis for 
calculation, the allocation falls short as well. That said, certain Chinese poultry meat under the 
tariff lines in question could not be imported into the EU due to the import bans in place during the 
periods selected by the EU. The EU did not take these bans into account in determination of the 
global volume of the TRQs, nor in their allocation.  
18. The EU further claims that allocation of unusable shares to China "would have reduced the 
size of the shares allocated to  imports from other sources which do comply with the EU's SPS 
requirements and, consequently, limited the total volume of imports under the TRQs for as long as 
China remains unable to comply with the EU's SPS requirments". First, to be clear, the EU is not  
under an obligation to allocate its TRQs on a country -specific basis. However, having decided to do 
so, the EU was under an obligation pursuant to Article XXVIII to, among other things, ensure that 
the modified concessions maintain "a general level of rec iprocal and mutually advantageous 
concessions not less favourable to trade than that provided for in this Agreement prior to such 
negotiations". Assuming the SPS measures are in place and the EU allocates a TRQ to China, 
Chinese poultry products will not b e imported into the EU, a situation similar to that prior to 
modification. If China subsequently complies with the SPS measures, Chinese products should be 
able to access the EU market, as it was able to under concessions prior to modification. As for 
imports from other sources that comply with the EU's SPS requirements, they would still have the 
same access, as the global volume of the TRQs would be adjusted accordingly to account for 
China's share.  
III. China's Claims Under Article XIII  
19. China submits that Article XIII imposes an ongoing  obligation to ensure that the actual 
allocation of shares in the TRQs throughout their entire period of validity is not discriminatory. Not 
only did the EU act inconsistently with Article XIII in its disciminatory initial allocation of shares in 
the TRQs in the First and Second Modification Packages, the EU continues to act inconsistently with 
Article XIII because of the continuous  application of this discriminatory allocation from one quota 
year to another without adjus tment, notwithstanding subsequent trade developments. In the 
present dispute, China argues that (a) the allocated shares in the TRQs as applied by the EU (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 (b) such updating must be based on trade flows during a representative period preceding the 
continued application of the allocated shares. The EU should not re ly on outdated trade data to 
allocate TRQs concerned among supplying Members.  
A. China's Claims Under Article XIII:1  
20. The EU partially concedes that Article XIII:1 applies to the allocation of TRQs "for aspects of 
the allocation of TRQs that are not cov ered by Article XIII:2 ... to the extent that its 
[Article  XIII:1] application does not lead to results that would conflict with the outcome resulting 
from the application of Article XIII:2". The EU's new position is built upon the EC-Banana III 
(Ecuador)  panel's statement that "[Article XIII:2(d)] may be regarded, to the extent that its 
practical application is inconsistent with [Article XIII:1], as lex specialis  in respect of Members with 
a substantial interest in supplying the product concerned". However , China notes that the panel in 
that dispute referred to substantial suppliers only and only to the extent that the practical 
application of Article XIII:2(d) is inconsistent with Article XIII:1. The panel was not (and certainly 
not China) suggesting that Article XIII:2(d) overrides Article XIII:1.  
21. China submits that the "similarly restricted" provision in Article XIII:1 requires , inter alia , 
that: 
(i) If all countries must be similarly restricted, then, all Members with an SSI must be 
similarly restric ted. This means that  the process for determining the TRQs should 
be the same for all WTO Members holding an SSI (i.e. negotiations must be held WT/DS492/R/Add.1  
 
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  with all Members holding an SSI; if negotiations are held with some and not with 
others, that means that all Mem bers holding an SSI are not similarly restricted).  
(ii) If a country -specific share is allocated to some Members with an SSI, a country -
specific share must be allocated to all Members wi th an SSI. If not, these Members 
are not similarly restricted.  
(iii) Where there is an allocation of the TRQs, not only the WTO Members with an SSI 
must be granted a share of the quota that is proportionate to the share they would 
have had absent the TRQs, but all other countries as well. In the absence thereof, 
all countr ies are not similarly restricted.  
22. And, as mentioned above, these requirements must be complied with on an ongoing basis 
throughout the period of validity of the allocated shares in the TRQs.  
23. In the present case, the EU failed to negotiate with or  similarly allocate a country -specific 
share of the TRQs to China, which was a Member holding an SSI, unlike what it did with Brazil and 
Thailand.  
24. China further notes that the EU omitted to take into account a very important statement by 
the panel in EC – Bananas III (Ecuador) . Specifically, the panel noted that in the case of an 
"others" category for all Members not having a substantial interest in supplying the product, the 
allocation must comport with the object and purpose of Article XIII, which in cludes Article XIII:1, 
to have a significant share of a tariff quota assigned to "others" such that the import market will 
evolve with the minimum amount of distortion and "[m]embers not having a substantial supplying 
interest will be able, if sufficiently  competitive, to gain market share in the "others" category and 
possibly achieve "substantial supplying interest" status which, in turn, would provide them the 
opportunity to receive a country -specific allocation by invoking the provisions of Article XIII: 4". In 
the instant case, China argues, with support from Argentina, that when a very small TRQ share is 
allocated to "others" and the new out -of-quota tariff rates are much higher than the in -quota rate, 
every Member is not given "access and an opportunity  of participation" in each TRQ similarly and 
the importation of the products concerned from all third countries is not similarly restricted under 
Article XIII:1.  
B. China's Claims Under Article XIII:2  
1. The TRQs Established By The European Union Violate T he Chapeau 
of Article XIII:2 And Lead To A Permanent Allocation of TRQ Shares  
25. The EU argues that its TRQ allocation was conducted under Article XIII:2(d), which provides 
a safe harbour such that the allocation was not required to be based on a differen t reference 
period for all others, nor make adjustments for special factors. It states that this safe harbour 
extends to the allocation or non -allocation of TRQs to all other Members.  
26. However, the Appellate Body has clarified that Article XIII:2(d) pro vides a safe harbour "as 
far as substantial suppliers are concerned". It does not exempt the importing Member from its 
obligations, such as those under the chapeau of Article XIII:2 as regards non -substantial suppliers. 
China argues that the chapeau of Art icle XIII:2 of the GATT 1994 sets forth a general non -
discriminatory obligation with respect to the allocation of TRQs among Members, separate from the 
provisions of Article XIII:2(a) to (d) and thus requires a separate analysis.  
27. China addresses the E U's violation of Article XIII:2(d) when it failed to negotiate with China 
as a WTO Member with an SSI in supplying the poultry meat concerned, as it did with Brazil and 
Thailand, in the section below. But even if assuming that China is not a WTO Member wit h an SSI, 
the EU would still need to comply with the requirements of the chapeau of Article XIII:2 in setting 
the TRQs for all other countries (i.e. the TRQs for all others should reflect the shares of imports 
that these other Members could have been expec ted to obtain in the absence of the TRQs). And 
that share will not be achieved if the allocation does not take into account the special factors that 
affect the share of imports of the other WTO Members. The mere use of objective and pertinent 
criteria is n ot enough. The special factors that affect imports of the other WTO Members must be 
taken into account and must be reflected in the allocation of the TRQs. Moreover, to measure the WT/DS492/R/Add.1  
 
- B-14 - 
 
  share s Members might be expected to obtain in the absence of allocation, th e trade during  the 
most recent period preceding the allocation  provides an objective basis, provided that trade is 
representative and there are no special factors. This is confirmed by the findings of the WTO panel 
in US – Line Pipe  and the GATT panel in EEC – Chilean Apples . Trade data for an outdated period, 
even if it is "objective" and somehow "pertinent", cannot be representative of the shares that 
various Members could be expected to obtain in the absence of the TRQs or in the absence of the 
allocatio n of the TRQs among supplying Members.  
28. The EU states there is no freezing of trade flows, even if a small or no share is allocated to 
"Other" suppliers, when a TRQ is allocated pursuant to Article XIII:2; after all says the EU, these 
"Other" suppliers can always import outside the TRQ. As Argentina points out, in this present 
dispute, the "Other" suppliers wishing to increase their market share would face high tariff rates, 
while domestic suppliers and Members with country -specific TRQs enjoy a competit ive advantage 
simply due to the existence of the TRQs. Even if there are still imports at the higher out -of-quota 
tariff rate, the much higher tariff rate must have a stifling effect; normal trade flows are thus 
distorted, leading to a permanent allocation  of TRQ shares. Such a result would not be consistent 
with the reasoning of the panel in EC – Bananas III , which states that an “all others” share of TRQ 
is required in all circumstances to allow new entrants to compete in the market and to avoid the 
long-term freezing of market shares.  
2. The European Union Acted Inconsistently With Article XIII:2(d) By 
Denying SSI Status To China  
29. China now turns to the EU's reiteration of its argument that: (a) the terms "substantial 
supplying interests" in Article XI II and Article XXVIII have the same meaning; (b) the import bans 
are not "special factors"; and (c) the evidence available at the time that the EU notified its 
intention to negotiate the modification of the concession did not demonstrate China's SSI status . 
30. As to the EU's first argument, China has previously noted the differences between the notion 
of SSI in Article XIII and that in Article XXVIII. One key difference is the reference period. 
Assuming that there is no "discriminatory quantitative restric tions" nor "special factors", the 
reference period to be used under Article XXVIII:1 should be the most recent representative period 
preceding the initiation of a modification negotiation or preceding the conclusion of the 
negotiations if they are prolonge d, while the reference period to be used under Article XIII shall be 
the most recent representative period preceding the allocation of the TRQs for any given period. 
To put it another way, allocation under Article XXVIII if undertaken is done once during a  
modification of concessions; while allocation under Article XIII needs to be re -examined as 
warranted in order to ensure that the allocation for a given quota year is based on the most recent 
trade data with special factors being taken into account. Secon d, China contends, and Brazil, 
Canada and the United States agree, that the concept of "special factors" is broader than that of 
"discriminatory quantitative restrictions". Paragraph 7 of Ad Note Article XXVIII:1 provides that the 
expression "substantial i nterest" is "intended to be construed to cover only those contracting 
parties which have, or in the absence of discriminatory quantitative restrictions affecting their 
exports could reasonable by expected to have, a significant share in the market of the c ontracting 
party seeking to modify or withdraw the concession". On the other hand, Article XIII:2 does not 
refer to "discriminatory quantitative restrictions", but to "special factors" that must be taken into 
account for the determination of the WTO Member s holding a substantial interest as well as for the 
allocation of the shares in the tariff rate quotas. In this dispute, the import bans that affected 
Chinese poultry meat were both discriminatory quantitative restrictions and special factors that 
should b e taken into account in affording to China its supplier status under Article XXVIII and 
under Article XIII:2. However, if ever the import bans were not considered to be discriminatory 
quantitative restrictions, they should at least be considered as special  factors and be taken into 
account both for the determination of the supplier status and the allocation of TRQ shares under 
Article XIII:2.  
31. Regarding its second argument that the import bans are not special factors, the EU 
maintains that the ability of  a WTO Member to comply with a set of SPS requirements is an 
element of competition and, where this led to the imposition of an import ban, it would allow the 
exclusion of this WTO Member from the TRQs. The EU is wrong. First, compliance with sanitary 
requirements is not a factor of competition; the EU's views to the contrary are unfounded and 
without support in WTO law and practice. Second, the EU's views are based on the unfounded 
assumption that a WTO Member may never be able to comply with the sanitary requirements. WT/DS492/R/Add.1  
 
- B-15 - 
 
  Third, the facts in this case demonstrate that China could satisfy the sanitary requirements and 
that its exports of poultry meat to the EU increased significantly after the lifting of the import ban. 
This demonstrate s that Chinese poultry  meat has comparative advantages that are precisely the 
conditions of competition that must be taken into account when determining and allocating the 
TRQs. Thus, in this dispute, by failing to account for the import bans (special factors), the EU has 
failed t o properly identify China as a Member having substantial supplying interests . 
32. Without repeating China's rebuttal of the EU's third argument, China stresses two key 
points:  
(i) The reference period to determine SSI status under XIII is not a period pre ceding 
the EU's notification of its intention to modify its concessions. Therefore, whether 
sufficient evidence is available at the time of the EU's notification is irrelevant.  
(ii) China has already presented evidence supporting its SSI status, such as it s 
production capacity, in view of the existing import bans which are "special factors". 
Instead, it is the EU that has failed to disclose the historical trade data, the base 
period, the basis for the allocating the shares and the presence or absence of 
special factors. Without such data, WTO Members will be in the dark and will not 
be in a position to determine SSI and request the Member allocating the TRQs 
among supplying countries to enter into consultation 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" pursuant to Article XIII:4. Argentina 
agrees with China on the disclosure requirements. Argentina points out that the 
information submitted by the EU  in G/SECRET/25/Add.1 and G/SECRET/32/Add.1 
did not explain the procedure used to determine the TRQs, or whether a single 
methodology was used for the TRQ distribution among the supplying Members, or 
the calculation of the growth rate under paragraph 6 of the Understanding, or the 
methodology used to determine the representative reference period and whether 
they have taken into account special factors.  
IV. China's Claims Under Article II  
33. Certification is the act, at the international level, that modif ies the terms of a Member's 
Schedule, which is an integral part of the multilateral WTO Agreement s. Even though there are 
instances where a modification entered into force before a certification was officially issued, 
Members do submit requests for a certi fication prior to the planned implementation date, and 
leave time for the certification process. In any event, China submits that a practice cannot 
supersede the law.  
34. The applicant Member must certify to the WTO's Director General the proposed changes to 
its concessions pursuant to paragraph 1 of the Procedures for Modification and Rectification of 
Schedules of Tariff Concessions, within three months after the action has been completed. This 
paragraph is couched in mandatory terms but this three -month p eriod has in fact not been 
respected by the EU either for the First or for the Second Modification Package. The EU itself 
concedes that very significant delays have occurred and the fact is that the changes in the EU's 
bound tariffs as a result of the Firs t and Second Modification Packages have not been the subject 
of certifications and thus do not have formal legal effect. Thus, in applying the out -of-quota tariff 
rates for poultry meat originating in China, which are substantially higher than the bound ra tes 
currently still provided for in the EU's Schedule of Concessions, the EU is in violation of Article II.  
 
 WT/DS492/R/Add.1  
 
- B-16 - 
 
  ANNEX B -3 
FIRST EXECUTIVE SUMM ARY OF THE ARGUMENTS  OF THE EUROPEAN UNIO N 
1. CLAIMS UNDER ARTICLE  XXVIII:1 OF THE GATT  1994  
1.1. CHINA DID NOT CLA IM ANY PSI IN THE FIRST MODIFICATION PA CKAGE AND FAILED TO MAKE A TIMELY CLAIM 
OF INTEREST IN RESPE CT OF THE SECOND MODIFICATION P ACKAGE  
1. The European Union was not required to take into account either China 's claims of PSI in the 
First package of modifi cations, which China has put forward for the first time in these panel 
proceedings, or China 's claims of interest in the Second package of modifications, which were not 
raised by China until nearly three years after the deadline provided for in the Procedu res, when 
agreements had already been negotiated with both Brazil and Thailand.  
2. The Procedures for Negotiations under Article XXVIII provide that "claims of interest should 
be made within ninety days following the circulation of the import statistics ". This provision 
underlines the importance of submitting the claims of interest in a timely manner. Members are 
not free to submit a claim of interest at any point in time during the Article XXVIII procedures. It 
would be manifestly unreasonable to force a Member seeking to modify a concession to take into 
account late claims of interest where doing so would cause undue delay in ongoing negotiations or, 
as in the present case, require the re -opening of negotiations already concluded.  
1.2. THE SPS MEASURES C ITED BY CHINA ARE NEITHER "QUANTITATIVE RESTRIC TIONS" NOR "DISCRIMINATORY " 
3. The EU 's sanitary regime for animal products (including poultry products) is based on the 
fundamental principle that imported products must comply with the same or equivalent san itary 
requirements as the EU domestic products. The SPS measures at issue are part of a 
comprehensive system of regulations put in place by the EU authorities in order to enforce at the 
border those sanitary requirements with regard to imported products. T herefore, in accordance 
with the Note Ad Article III, those measures are not "quantitative restrictions " within the meaning 
of either Article XI:1 or, consequently, of the Note Ad Article XXVIII:1.  
4. Furthermore, the SPS measures at issue are not "discri minatory ". The principle that 
imported products must comply with the same or equivalent sanitary requirements as the 
domestic products applies equally to all imports of poultry products, irrespective of the country of 
origin. Whether or not imports from a given country are restricted will depend on whether they 
comply with those sanitary requirements. In turn, this will depend on the sanitary situation in each 
country of origin. Where the sanitary situation in any two countries is the same or equivalent the  
European Union will treat imports from those two countries in the same manner . 
5. China contends that the term "discriminatory " covers any situation "where imports from a 
WTO Member are treated differently from other WTO Members, irrespective of the groun d of such 
disparate treatment ". The European Union disagrees: treating differently two different situations is 
not discriminatory. Quite to the contrary, it would be discriminatory to treat in identical manner 
the imports from a Member which comply with th e EU sanitary requirements and the imports from 
another Member which do not comply with the same or equivalent requirements.   
6. The Appellate Body Report in Canada – Wheat does not support China 's position. The 
findings of the Appellate Body in EC – Tariff Preferences confirm  that, contrary to China 's 
assertions, when used in the WTO Agreement, the term "non-discriminatory " can be interpreted as 
covering different treatment of Members which are in different situations.  Further confirmation of 
this is pro vided by the respective preambles to the WTO Agreement and the GATT, which both cite 
among the objects and purposes of those agreements "the elimination of discriminatory  treatment 
in international commerce ". Clearly, in this context the term "discriminato ry" cannot be read as 
referring to any situation "where imports from a WTO Member are treated differently from other 
WTO Members, irrespective of the ground of such disparate treatment ", as it is beyond doubt that 
the WTO Agreement does not seek to "elimin ate" all such differences of treatment.  
7. It is necessary, therefore, to examine the term "discriminatory " in the context of 
Article  XXVIII:1 and having regard to the objective pursued by that provision, as well as the WT/DS492/R/Add.1  
 
- B-17 - 
 
  objects and purposes of the GATT and  the WTO Agreement. Article XXVIII:1 seeks to facilitate the 
negotiation of the modification of tariff concessions, so as to limit the uncertainty which is inherent 
in such negotiations. This is achieved by providing that those modifications are to be nego tiated, 
or consulted, with a few Members having a special interest, rather than with the entire WTO 
membership; and by laying down a straightforward, easy -to-apply rule for identifying those 
Members, namely the share of imports over a previous representati ve period. This objective, in 
turn, contributes to one of the objects and purposes of both the GATT and the WTO Agreement: to 
increase the predictability and security of tariff concessions. The overbroad reading of the term 
"discriminatory " invoked by Chin a would undermine the described objective. Sanitary 
requirements, such as those at issue in this dispute, and many other legitimate regulatory 
requirements often have the effect, in law or in fact, of restricting imports from certain countries 
which fail t o comply with such requirements (for example, by reason of deficiencies in their own 
regulatory systems). Making adjustments to the import shares for all such restrictions would be an 
extremely complex task involving the use of highly speculative estimates . The results would be 
necessarily inaccurate and likely to be a source of disputes. Furthermore, since those regulatory 
requirements are often a necessary and permanent feature of the markets for the products 
concerned, the import shares estimated by maki ng allowance for those requirements would fail to 
capture the genuine relative importance of each Member 's supplying interest. As a result, China 's 
interpretation could have the anomalous result that negotiations would have to be undertaken with 
Members wh ose supplying interest is largely theoretical, at least in the short or medium term, 
instead of other Members with a far more immediate supplying interest. This would be detrimental 
to all WTO Members since a Member with a genuine supplying interest is mor e likely to commit the 
necessary efforts to ensure adequate compensation for the benefit of all WTO Members.  
8. China 's interpretation of the term " discriminatory " would have required the European Union 
to make allowance not only for the specific SPS meas ures applied 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. Indeed, that regime rests on the fundamental principle that 
the SPS measures applied to the imports from any given country must address the specific 
sanitary situation in that country, a principle which China regards as being inherently 
"discriminatory ". Therefore, on China 's interpretation of the term "discriminatory ", the Europea n 
Union would have been required to estimate what would have been the import shares of all 
potential suppliers of poultry products in the absence of the EU 's sanitary regime for imports of 
those products. In practice, that estimate would have been extremel y complicated and grossly 
inaccurate.  
9. Even more important, that estimate would not reflect the import shares which each Member 
could have reasonably expected to achieve either during the period of reference or in the 
foreseeable future. China does not contest that, even if the EU 's sanitary regime for imports of 
poultry products was "discriminatory " (as contended by China), it would be compatible with the 
WTO Agreement. In view of this, there is no reason to expect that the European Union will replace 
that regime with another regime which China would regard as "non-discriminatory " (i.e. a regime 
where imports from all sources are treated in identical way, irrespective of the sanitary situation in 
each country of origin). Since there can be no reasonable expectation that the European Union will 
replace the current sanitary regime with a "non-discriminatory " regime (according to China 's 
interpretation), making allowance for the existing EU 's sanitary regime would have gone against 
the rationale behind the r equirement in Note Ad Article XXVIII:1 to make allowance for the 
"discriminatory quantitative restrictions ". This confirms that China 's reading of the term 
"discriminatory " cannot be correct in the context of that provision.  
1.3. IN THE ALTERNATIVE , IF THE  EUROPEAN UNION HAD BEEN REQUIR ED TO MAKE ALLOWANCE  FOR THE SPS 
MEASURES , THE EVIDENCE AVAILAB LE AT THE TIME WHEN THE EU NOTIFIED ITS INTENTI ON TO NEGOTIATE 
THE MODIFICATION OF THE CONCESSIONS DID NOT WARRANT CHINA'S PRESENT CLAIMS OF PSI OR SSI  
10. Most of the evidence relied upon by China was not provided to the European Union in 
support of China 's claims of interest pursuant to paragraph 4 of the Procedures for Negotiations 
under Article XXVIII. China cannot rely on evidence that was not made available to the European 
Union in a timely manner in the course of the Article XXVIII procedures, in particular given that 
most of such evidence does not concern the EU market.   
11. Paragraph 4 of the Note Ad Article XXVIII:1 makes it clear that the existence of a  PSI must 
be determined on the basis of the import share which a Member had, or would have had in the WT/DS492/R/Add.1  
 
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  absence of discriminatory quantitative restrictions "over a reasonable period of time prior to the 
negotiations ". Moreover, the determination of a PSI mus t, by definition, be made before the 
opening of the negotiations. Accordingly, in assessing whether the European Union fulfilled its 
obligations under Article XXVIII:1, only the evidence that was available to the European Union 
prior to the opening of the negotiations can be taken into consideration. Therefore, the import data 
for the period 2009 -2015 provided by China is not pertinent for assessing this claim and must be 
disregarded.  
12. Having regard to the above considerations, the European Union submit s that the import data 
concerning the period immediately preceding the entry into force of Decision 2002/69/EC, of 30 
January 2002, is both the most pertinent and the most reliable source of evidence in order to 
estimate the import share that China would h ave had in the absence of the SPS measures..  
13. China has argued that prior to the entry into force of Decision 2002/69/EC in 2002, its 
imports into the European Union were "growing ". However, during the years preceding 2002 
China 's import shares for all  the tariff lines concerned were negligible. The fact that China was the 
second largest world producer of poultry meat products during the two reference periods is only to 
be expected given the very large size of China 's own domestic market. Similarly, Chi na's share of 
the world exports of poultry meat is not a reliable indicator of its export prospects to the EU 
market. China 's import share may vary considerably from one country market to another. 
Moreover, China 's share of world exports varies considerabl y among the various categories of 
poultry products concerned by this dispute. In any event, the European Union observes that 
China 's share of world export trade fell from 5 % in 2003 to just 3 % in 2009. These percentages 
are well below the 10 % benchmark for recognising a SSI. China provides data on China 's share of 
world imports only for tariff items 1062 32 and 1602 39. This suggests that the shares for the 
remaining tariff items covered by this dispute are not regarded as "significant " even by China. As  
regards item 1602 39, according to China 's own data, China 's share was on average 5.16 % during 
the first reference period and 5.71 % during the second reference period. Both percentages are 
well below the 10 % benchmark. China 's share of world imports wa s above 10 % during both 
reference periods only for item 1602 32 (on average, 19.87 % during the first reference period; 
and 18.20 % during the second reference period). Nevertheless, these are global figures. Given 
these broad variations among geographica lly close countries where China is a major supplier, 
China 's share of global imports of 1602 32 cannot be reliably used to estimate what would have 
been China 's share of the EU imports of the item 1602 32. The data on China 's share of imports in 
a handful of selected import country markets where China holds a "major share " is manifestly 
unrepresentative and unreliable. China has not explained why the markets of the selected 
countries are analogous to the EU market and can be considered as sufficiently repre sentative.  
1.4. AS REGARDS THE SECOND MODIFICATION P ACKAGE , THE EUROPEAN UNION  WAS NOT REQUIRED TO 
RE-DETERMINE THE MEMBERS HAVING A PSI OR SSI ON THE BASIS OF IMPO RT DATA SUBSEQUENT T O THE 
INITIAL DETERMINATIO N  
14. Neither Article XXVIII:1 nor the Proce dures provide for a re -determination of the Members 
having a PSI or SSI after the initiation of the negotiations. China suggests that the obligation to 
make such a re -determination would arise when negotiations are not completed within the time 
limits prov ided for in Article XXVIII:1. However, those time limits do not apply to 'reserved ' 
negotiations pursuant to Article XXVIII:5. The European Union is not aware of any single instance 
where the Member seeking to modify a concession has, during the course of the negotiations, 
proceeded to re -determine the Member having a PSI on the basis of more recent import data and 
resumed the negotiations with a different Member.  
15. Article XXVIII:1 seeks to facilitate the negotiation of modification of tariff concessions  with a 
view to putting an end as quickly as possible to the uncertainty created by such negotiations. 
Reading into Article XXVIII:1 an obligation to "re-assess " on a continuous basis the reference 
period on the basis of the most recent import data at each  point in time during the negotiations 
and to re -determine as many times as necessary the Members having a PSI or a SSI would 
undermine that objective.  WT/DS492/R/Add.1  
 
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  2. CLAIMS UNDER ARTICLE  XXVIII:2 OF THE GATT  1994  
2.1. THE UNDERSTANDING DO NOT ADDRESS THE ALLOCATI ON OF TRQ S AMONG SUPPLYING CO UNTRIES  
16. The objections raised by China as part of its claims under Article XXVIII:2 relate to the 
country allocation of the TRQs, rather than the total amount of compensation provided by the 
European Union in the form of TRQs.  Since, Article XXVIII:2 and paragraph 6 of the Understanding 
do not address the allocation of TRQs, the Panel should reject the claims brought by China under 
those two provisions.  
17. China 's position has no basis on the wording of either Article XXVIII: 2 or paragraph 6 of the 
Understanding. China contends that paragraph 6 of the Understanding is equally applicable in 
respect of each of the country -specific shares of an allocated TRQ because that provision refers to 
"a tariff rate quota " in the singular. Yet a "tariff quota " is not the same as a "share " of an allocated 
tariff quota. Moreover, reading additional rules on the allocation of TRQs into the provisions of 
Article XXVIII:2 and paragraph 6 of the Understanding would result in the application of two  
different and potentially conflicting sets of requirements.  
2.2. THE AMOUNT OF COMPENS ATION PROVIDED BY TH E EUROPEAN UNION IN THE FORM OF TRQ S IS FULLY 
CONSISTENT WITH ARTICLE XXVIII:2,  READ IN CONJUNCTION WITH PARAGRAPH 6 OF THE 
UNDERSTANDING  
18. The am ount of trade covered by each of the three TRQs included in the First modification 
package 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.  Likewise, the amount of trade 
covered by each of the TRQs included in the Second modification package exceeds largely the 
greatest of the amounts that would result from applying each of the three formulae included in 
paragraph 6 of the Understanding.  
19. The European Un ion was not required to use import data for the period following the 
initiation of the negotiations, including data for the period 2009 -2011. Paragraph 6 of the Note Ad 
Article XVIII:1 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 at the time where the modification is eventually agreed. In view of this, the terms of 
paragraph 6 of the Understanding terms must be read as r eferring to the most recent year or 
three -year period preceding the moment where the Member concerned formally initiates the 
modification process. The guidelines set out in paragraph 6 of the Understanding seek to facilitate 
the negotiations by providing a  benchmark that the negotiators can use as a "basis" for the 
calculation of compensation. In order to achieve that purpose, the benchmark must be known in 
advance of the negotiations and fixed. The use of import data pre -dating the initiation of the 
negoti ations as a benchmark for negotiating the amount of compensation offers certainty and 
predictability to both negotiating sides and is not inherently biased in favour of either of them. 
Rather, the opposite is true: the uncertainty created by the opening of  negotiations can have a 
chilling effect on imports. In contrast, the use of a 'moving ' benchmark based on the most recent 
post-initiation data available at any point in the course of the negotiations would create an 
incentive for the parties to delay the conclusion of negotiations while waiting for more favourable 
trade data to emerge.  
3. CLAIMS UNDER ARTICLE  XIII OF THE GATT 199 4 
3.1. ARTICLE XIII:1  DEALS NEITHER WITH T HE ALLOCATION OF SHA RES WITHIN A TRQ  NOR WITH LEVEL OF 
ACCESS TO BE GRANTED  TO EACH MEMBER  
20. Article XIII:1 establishes a principle of non -discriminatory access to, and participation in, a 
TRQ. It requires that a TRQ is applied by a Member on a product -wide basis without discrimination 
as to the origin of the product. On the other hand, i t deals neither with the allocation of shares 
within a TRQ nor with the level of access to be granted to that each Member.  
21. The TRQs at issue in this dispute are defined only by reference to the tariff line and there is 
manifestly no discrimination bet ween products based on the origin. Hence, imports of every 
Member are given access and an opportunity of participation in each TRQ within the meaning of 
Article XIII:1.  WT/DS492/R/Add.1  
 
- B-20 - 
 
  22. The access to the TRQs and their allocation to different suppliers are two concept ually 
distinct questions. The share allocated to each Member within each TRQ results from the 
application of the rules contained in Article XIII:2. Since, Article XIII:2 is lex specialis  with respect 
to Article XIII:1, the arguments of China concerning the  allocation of the TRQ are to be examined 
in the light of that provision.  
3.2. THE EU WAS REQUIRED NEITHER  TO BASE THE ALLOCATI ON OF THE TRQ S ON A DIFFERENT REF ERENCE 
PERIOD NOR TO MAKE A DJUSTMENTS FOR SPECI AL FACTORS  
23. The European Union agreed with t he substantial suppliers (i.e. Brazil and/or Thailand) the 
method for the allocation of the TRQs. This allocation was based on the share of EU imports held 
by Brazil and/or Thailand and "all others " over the same period used to calculate the total amount 
of each individual TRQ.  
24. It is manifest that the European Union followed the first allocation method set out in 
Article  XIII:2(d), which provides a "safe harbour " to the Member applying the TRQ. In turn, the 
European Union was not required to comply with  the requirements of the second allocation method 
provided for by Article XIII:2(d), including the use of a "representative period " or making 
adjustment for "special factors ".  
25. By providing that a TRQ can be allocated by agreement with the substantial suppliers, 
Article  XIII:2(d) admits implicitly that the Member allocating the TRQ and its negotiating partners 
have a certain margin of discretion in choosing the allocation key. Panels should not interfere with 
the discretion accorded to the negotiating M embers under Article XIII:2, notably in a case as the 
present one where the method selected by the European Union and its partners is based on 
objective factors (i.e. import shares over a past reference period), it is not inherently biased in 
favour of any  supplier, it is in line with past practice and, furthermore, it reflects the method used 
for calculating the total amount of the TRQs, which in turn is based on paragraph 6 of the 
Understanding.  
26. In summary, even though the European Union negotiated on ly with substantial suppliers, as 
explicitly provided for by Article XIII:2(d)), the resulting agreements treat substantial suppliers 
and non -substantial suppliers in the same way by applying an impartial allocation method based 
on objective factors.  
27. Moreover, neither Article XIII nor the WTO jurisprudence concerning that Article imposes a 
rule whereby a Member allocating a TRQ must always set aside a minimum share for Members 
that are not substantial suppliers, regardless of the level of imports from those suppliers in the 
past. 
28. Finally, the SPS sanitary measures mentioned by China are not special factors as their 
objective is to ensure equal treatment between domestic and foreign suppliers and among foreign 
suppliers, from the point of view of the  EU sanitary requirements. Moreover, the willingness and 
ability of one country to produce poultry products in compliance with a given set of SPS 
requirements at any point in time is part of the elements that contribute to determine the 
comparative advanta ge of that country in the production and export of poultry products. 
Therefore, no Member should be required to allocate a TRQ by making abstraction of the sanitary 
situation prevalent in any other country over the period used for the allocation of the TRQ , 
because that would not describe the real supplying interest of that country and ultimately it would 
lead to highly speculative results, to the detriment of those suppliers that complied with those 
sanitary requirements over the same period.   
3.3. THE CH APEAU OF ARTICLE XIII:(2)  DOES NOT REQUIRE THE  EUROPEAN UNION TO ALLOCATE A S HARE FOR 
"ALL OTHER " COUNTRIES IN EACH TRQ  AT LEVELS THAT ALLOW  THEM TO ACHIEVE AN SSI  
29. The European Union submits that this is a new legal claim developed for the first time in 
China 's first written submission, which was neither mentioned nor implied in China 's Panel request. 
It is therefore a new claim that falls outside the scope of the Panel request and thus also outside 
the terms of reference of the Panel pursuant to Artic le 7(1) of the DSU.  
30. In any event, the EU submits that neither Article XIII nor the WTO jurisprudence concerning 
that Article imposes a rule whereby a Member allocating a TRQ must always set aside a minimum WT/DS492/R/Add.1  
 
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  share for Members that are not substantial su ppliers, regardless of the level of imports from those 
suppliers in the past, let alone a share allowing suppliers going forward to claim a substantial 
interest.  
31. The Appellate Body Report in EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III 
(Article 21.5 – US) does not support that claim. In any event that Report contains some obiter 
dicta concerning Article XIII:2 and Article XIII:4, which were made by the Appellate Body ad 
abundantiam . As a consequence the Panel is not legally obliged t o follow those obiter dicta .  
32. Finally, China 's claim cannot be justified by the objective to avoid a freezing the TRQ 
allocation. Indeed, China ' idea would not prevent a freezing of the TRQ allocation, but just 
postponing that effect. Moreover, China 's reasoning does not take into account that TRQs do not 
prevent imports outside the quota and indeed China has been able to export to the EU market also 
outside the TRQs.  
3.4. THE EUROPEAN UNION DID NOT VIOLATE  THE CHAPEAU OF ARTICLE XIII:2  AND ARTICLE XIII:4 BY NOT 
EXPLICITLY IDENTIFYI NG THE DATA THAT IT TOOK INTO ACCOUNT TO  DETERMINE THE TRQ S 
33. China 's first written submission develops these two legal claims for the first time. They are 
neither mentioned, nor implied in China 's Panel request. They are th erefore new claims that fall 
outside of the scope of the Panel request and thus also outside the terms of reference of the Panel 
pursuant to Article 7(1) of the DSU.  
34. In any event, these claims are groundless, because nothing in Article XIII:2 or in 
Article XIII:4 refers, even implicitly, to an obligation to disclose proactively the trade data on the 
basis of which the allocation is done (or has been done).  
35. Moreover, the EU considers that such an obligation is not implicit in Article XIII:4 as any 
Member can assess for itself if it holds a substantial supplying interest in exporting a given product 
to another Member, on the basis of available export statistics or during consultations with the 
Member imposing the TRQ. In any event China argues that it  had a substantial supplying interest 
in supplying the products concerned for the purpose of Article XIII:4, and not that it could not 
appreciate whether or not it had such interest.  
36. Finally, the disclosure invoked by China is not foreseen in Article X III:3, which sets out the 
disclosure obligations that a Member applying a restriction should respect.  
3.5. THE EUROPEAN UNION DID NOT VIOLATE  ARTICLE XIII:2( D) OF THE GATT  1994  BY DENYING SSI 
STATUS TO CHINA  
37. There is no reason to interpret the notion  of SSI in a different way in Article XXVIII and 
Article XIII. That notion is only defined in the context of Article XXVIII by Ad Article XXVIII(1), 
paragraph 7, and the negotiation of a TRQ pursuant to Article XXVIII and the subsequent 
allocation of the s hares within that TRQ in accordance with Article XIII, are closely related issues. 
In the present case, moreover, the Article XXVIII negotiations on the opening of the TRQs and the 
negotiations on the allocation of the TRQs took place concomitantly. It wou ld be both illogical and 
unpractical to have negotiations under Article XXVIII with some Members considered to have a 
substantial supplying interest in respect of the overall amount of the TRQ and, in parallel, to hold 
negotiations with other Members consi dered to have a different substantial supplier interest in 
respect of the allocation of the same TRQ in compliance with Article XIII:2(d).  
38. Second, China has not demonstrated that the specific context or object/purpose of each of 
those two Articles req uires giving to the terms "substantial supplying interest " a different meaning 
in each of them.  
39. Third, WTO jurisprudence confirms that it is reasonable to give to the notion of SSI the same 
meaning in Article XXVIII and Article XIII.  
40. Therefore, si nce China did not have a substantial supplying interest in the tariff items 
covered by the TRQs at issue in the present case under Article XXVIII, the European Union WT/DS492/R/Add.1  
 
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  complied with Article XIII:2(d), first sentence by negotiating and agreeing the allocation  of the 
TRQ with all substantial suppliers (i.e. Brazil and Thailand).  
3.6. THE EUROPEAN UNION DID NOT VIOLATE  ARTICLE XIII:(4)  BY REFUSING TO ENTER  INTO MEANINGFUL 
CONSULTATIONS WITH CHINA  
41. China and the EU held consultations at the request of China on 19 May 2014, which 
explicitly invoked Article XIII:4. The EU clarified that it was accepting to hold the consultations 
without prejudice to its interpretation of Article XIII.  
42. During the consultations, it emerged that the EU was not convinced that Article XIII:4 
applied in the present case. Nevertheless, the European Union agreed to look into China 's 
arguments in that respect and showed its openness to look at additional information that China 
had undertaken to send following the 19 May meeting, but  then did not send. During the 19 May 
meeting, China requested the EU to adjust the shares allocated to other partners, specifically in 
relation to two tariff lines based on a different reference period, and in the light of special factors 
(the SPS measure s). 
43. China 's assertion that the European Union refused to enter i nto consultations under 
Article  XIII:4 is, therefore, unfounded as a matter of facts.  
3.7. CLAIMS UNDER ARTICLE II:1  OF THE GATT  1994  
44. The certification of the changes to the schedule has the sole purpose of formally 
incorporating into a Member 's schedule the modifications made in accordance with Article XXVIII 
or other relevant provisions, but it is not a prerequisite for implementing such changes. This is 
made clear by the Procedures for Negotiations under Article XXVIII, which state that:  
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 from the date on 
which the conclusion of all the negotiations have been n otified as set out 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.  
45. The European Union notified the conclusion of the negotiatio ns in accordance with 
paragraph  6 of the Procedures on Negotiations under Article XXVIII on 27 May 2009, as regards 
the First modification  package, and on 20 December 2012, as regards the Second modification 
package. Hence, in accordance with paragraph 7 of the same Procedures, the European Union was 
free to give effect to the agreed changes as of the date of the relevant notification. There fore, by 
implementing those changes before the certification of the changes to its schedule, the European 
Union has not acted in violation of its tariff bindings pursuant to Article II:1 of the GATT 1994.  
3.8. CLAIMS UNDER ARTICLE I:1 OF THE GATT  1994  
46. According to the Appellate Body Report in EC – Bananas III (Article 21.5 – Ecuador II) / EC 
– Bananas III (Article 21.5 – US), Article I:1 is violated when a Member imposes differential 
in-quota duties on imports of like products from different supplier c ountries within a TRQ. In the 
present case, it is plain that the in -quotas duties are the same for all suppliers. It is also 
uncontested that the TRQs are defined on a product -wide basis and taking into account only the 
custom classification of the product s concerned.  
47. It follows that China 's claim is groundless.  
4. CONCLUSION  
48. For the reasons set out in this submission, the European Union requests the Panel to reject 
all the claims submitted by China.  
 WT/DS492/R/Add.1  
 
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  ANNEX B -4 
SECOND EXECUTIVE SUM MARY OF THE ARGU MENTS OF THE EUROPEA N UNION  
1. CLAIMS UNDER ARTICLE  XXVIII:1 OF THE GATT  1994  
1.1. CHINA DID NOT CLAIM A NY PSI IN THE FIRST MODIFICATION PA CKAGE AND FAILED TO MAKE A TIMELY 
CLAIM OF INTEREST IN  RESPECT OF THE SECOND MODIFICATION P ACKAGE  
1. In response to a  question from the Panel, most Third Parties have agreed that the Member 
seeking the modification of a concession is entitled to disregard claims of interest which have not 
been submitted in a timely manner and that the 90 -day period mentioned in Paragraph  4 of the 
Procedures for Negotiations under Article XXVIII provides guidance for assessing whether a claim 
has been timely submitted. China itself concedes that it may be possible to depart from the 90 -day 
time limit provided for in Paragraph 4 of the Proc edures only with "due cause".  
2. As regards the First modification package, China has confirmed that it never made a claim of 
PSI until the present proceedings. China has not invoked any circumstance in order to justify its 
failure to submit its claims of PSI within the 90 -day time limit. As regards the Second modification 
package, none of  circumstances cited by China may justify China's delay of more than three years 
in submitting the claims of interest.  
1.2. THE EUROPEAN UNION WAS NOT REQUIRE D TO MAKE AL LOWANCE FOR THE SPS MEASURES APPLIED 
TO CHINA, AS THEY ARE NEITHER QUANTITATIVE RESTRIC TIONS NOR DISCRIMINA TORY 
3. China appears to agree that the European Union is not required to make allowance for 
measures that have the effect of limiting imports but ar e not "discriminatory quantitative 
restrictions" within the meaning of Ad Article XXVIII:1. China also appears to agree that the notion 
of "discriminatory quantitative restriction" must be interpreted in the light of Article XI of the 
GATT  1994 and, theref ore, of the note Ad Article III of the GATT 1994.  Nevertheless, China 
contends that the SPS measures which it has identified in this dispute are "discriminatory 
quantitative restrictions". China has failed to substantiate this allegation.  
1.2.1.  The SPS m easures are not "quantitative restrictions"  
4. China has not contested that the SPS measures at issue are applied in order to enforce at 
the border sanitary requirements which apply also to the domestic EU products. Instead, China 
limits itself to argue, in the abstract, that "different aspects" of a measure may fall under 
Article  III or under Article XI of the GATT 1994. But China has not shown that, in the case at hand, 
the SPS measures which it has identified include any restrictive "aspect" without equ ivalent in the 
sanitary requirements applied to the EU's domestic products.  
5. China misrepresents the panel's findings in EC – Seal Products . The measure at issue in that 
case prohibited the placing on the market of seal products. In the case of imports this prohibition 
was enforced at the border. The finding cited by China was not reached under Article XI of the 
GATT 1994, but instead under Article 2.2 of the TBT Agreement. Moreover, the panel did not find 
that the measure at issue was "a restriction on importation", but rather that it was "trade 
restrictive" within the meaning of Article 2.2 TBT.  
6. The panel report in US – Shrimp  (Article 21.5)  does not support China's position. The United 
States did not argue in that case that the measure fell within the s cope of Article III of the 
GATT  1994. Indeed, the import prohibition at issue in US – Shrimp had no domestic equivalent.   
1.2.1.1  The SPS measures are not "discriminatory"  
7. China has not alleged, let alone proven, that imports from other countries posing similar 
sanitary risks as the imports from China are not similarly restricted. Instead, China limits itself to 
argue that the term "discriminatory" covers any situation "where imports from a WTO Member are WT/DS492/R/Add.1  
 
- B-24 - 
 
  treated differently from other WTO Members,  irrespective of the ground of such disparate 
treatment".  
8. In its first oral statement China has conceded that "whether a restriction is discriminatory 
must be determined based on the text as well as the object and purpose of the provision in which 
the word is used". Nevertheless, China goes on to argue that its reading of the term 
"discriminatory" is necessary in order to achieve the objective pursued by Article XXVIII, which 
China describes as "reinstating the general level of concessions that had exis ted before the 
increase of the bound rates".  
9. The specific objects and purposes of Article XXVIII are not limited to the single objective 
mentioned by China. They may be described as follows:   
1) encouraging Members to make tariff concessions by provid ing them with flexibility to 
withdraw or modify those concessions subsequently, if necessary;  
2) ensuring that the modified or withdrawn concessions are replaced with equivalent 
concessions, so as to maintain the "general level of reciprocal and mutually 
advantageous concessions"; and  
3) facilitating the negotiation of the modification or withdrawal of tariff concessions, so as 
to limit the uncertainty which is inherent in such negotiations.  
10. The reading of the term "discriminatory" invoked by China wou ld undermine the first and the 
third of the objects and purposes of Article XXVIII described above by rendering unduly 
complicated the negotiation of the modification of concessions. Sanitary requirements, such as 
those at issue in this dispute, and many o ther legitimate regulatory requirements often have the 
effect, in law or in fact, of restricting imports from certain countries which fail to comply with such 
requirements (for example, by reason of deficiencies in their own regulatory systems). Making 
adjustments to the import shares for all such restrictions would be an extremely complex task 
involving the use of highly speculative estimates.  
11. In the present case, China's interpretation of the term " discriminatory" would have required 
the European Un ion to make allowance not only for the specific SPS measures applied to imports 
from 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. Indeed, it must be 
emphasised that that regime (like the sanitary regimes applied by most, if not all, countries) rests 
on the fundamental principle that the SPS measures applied to the imports from any given country 
must address the specific sanitary risks posed by the imports from that country, a principle which 
China regards as being inherently "discriminatory". Therefore, on China's interpretation of the term 
"discriminatory", the European Union would have been required to estimate what would have been 
the impo rt shares of all potential suppliers of poultry products in the absence of the EU's sanitary 
regime for imports of those products.  
12. For example, if China's interpretation were upheld, the European Union would have had to 
make allowance also for inter a lia:  
the restrictions applied pursuant to Regulation 798/2008and its predecessors, which 
lay down the list of countries from which imports of fresh poultry meat are authorized;  
the restrictions adopted by the Commission in order to address specific sanitary  risks, 
such as the decisions restricting imports from China, Thailand and other countries on 
grounds of avian influenza; or  
the restrictions applied pursuant to Directive 96/23/EC.  
13. Moreover, contrary to China's allegations, its reading of the term "discriminatory" is not 
required in order achieve the second objective described above i.e. the objective of maintaining 
the general level of concessions. To the contrary, China's interpretation would have the 
consequence that, in order to modify a concess ion, a Member could be required to provide 
compensation which is well in excess of the value of the modified concession. The value of any 
tariff concessions made by a Member is implicitly limited by the regulatory restrictions, such as WT/DS492/R/Add.1  
 
- B-25 - 
 
  sanitary restriction s, which a Member is entitled to impose or maintain in accordance with the 
relevant provisions of the WTO Agreement. China has not argued that the SPS measures at issue 
are WTO inconsistent. Nor has China argued that those SPS would otherwise impair or nul lify the 
concessions within the meaning of Article XXIII:1 of the GATT 1994. Since those SPS measures do 
not diminish the original value of the concessions granted by the European Union, there is no 
reason why the European Union should make allowance for s uch measures in order to maintain the 
general level of concessions.  
14. Moreover, China's interpretation could have the anomalous result that negotiations would 
have to be undertaken with Members whose supplying interest is largely theoretical, instead of  
other Members with a far more immediate supplying interest. This would be detrimental to all WTO 
Members, since a Member with a genuine supplying interest is more likely to commit the necessary 
efforts to ensure adequate compensation for the benefit of al l WTO Members.  
1.2.2.  In the alternative, if the European Union had been required to 
make allowance for the SPS measures, the evidence in China's first 
written submission does not substantiate China's claims of PSI or 
SSI  
15. In its opening oral statemen t, China claimed that the issue before this Panel is whether the 
European Union should have taken into account the SPS measures identified by China and that it is 
irrelevant whether or not China has adduced evidence that it should have had a PSI or SSI in the 
absence of those measures. The European Union disagrees. The only obligation imposed by 
Article  XXVIII is to negotiate or consult, respectively, with the Members holding a PSI or SSI. The 
note Ad Article XXVIII provides guidance in order to identify th ose Members, but it does not create 
self-standing process obligations. Therefore, if the Panel finds that China did not hold a PSI or SSI, 
there can be no violation of Article XXVIII.  Moreover, China's position raises an issue of terms of 
reference as thi s claim was not included in the panel request.  
1.2.2.1  China cannot rely on evidence that was not made available to 
the European Union during the Article XXVIII procedures  
16. China concedes that it was required to submit evidence in support of its claims  of PSI, but 
not in support of its claims of SSI. China invokes the fact that paragraph 2 of the Understanding 
on the Interpretation of Article XXVIII, unlike its paragraph 5, only refers to the provision of 
supporting evidence by the Members claiming a PS I. However, the provisions cited by China 
provide no basis for making that distinction.  
17. China further contends that its claims of PSI in respect of the Second modification package 
were supported by evidence. However, as explained by the European Union , such evidence 
consisted exclusively of import statistics for the period 2010 -2012. All the other evidence included 
in China's first written submission (including detailed data on China's share of world production 
and world trade and China's exports to th ird countries) was not provided in support of China's 
claims of PSI during the Article XXVIII procedures and, therefore, cannot be relied upon by China 
in this dispute.  
1.2.2.2  China cannot rely on import data for a period subsequent to the 
opening of open ing of the negotiations  
18. China argues that, in view of the duration of the negotiations, the European Union was 
required to make a re -determination of the Members holding a PSI or SSI based on the import 
data available at that point in time. For the rea sons explained below, the European Union submits 
that it was not required to make such a re -determination. At any rate, the European Union submits 
in the alternative that, even if it had been required to make a re -determination of the Members 
holding a PSI  or SSI during the negotiations, the import data for the period following the 
conclusion of the negotiations (i.e. period 2012 -2015) would still not be pertinent for assessing 
this claim.  
19. China also invokes paragraph 3 of the Understanding in support o f its position that it may be 
necessary to take into account import data for a period following the initiation of the negotiations. 
However, paragraph 3 of the Understanding does not provide for the use of such post -initiation WT/DS492/R/Add.1  
 
- B-26 - 
 
  import data. The determinatio n of whether trade in the affected product "has ceased" to benefit 
from preferences or "will do so" by the conclusion of the negotiations is to be done when the 
negotiations are opened. 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. Thus, far from supporting China's position, paragraph 3 of the 
Understanding comforts the EU's view that only impor t data pre -dating the initiation of the 
negotiations is to be taken into account.   
1.2.2.3  The evidence in China's first written submission does not 
warrant China's claims of PSI or SSI  
20. The European Union is providing as Exhibit EU – 40 a table showin g China's import share in 
the top largest third -country import markets for the tariff items 0210 99, 1602 32 and 1602 39 
(i.e. the same items for which China has provided import share data in its first written submission) 
during the period 2002 -2012. The t able evidences that China's share only exceeded 10 % in a few 
of the top largest import markets: 1 out of the 18 largest import markets in the case of 0210 99; 3 
out 11 in the case of 1602 32; and 3 out of 14 in the case of 1602 39. This confirms that, in 
practice, China's import shares may vary considerably from one import market to another and, 
consequently, that neither global data nor data for a handful of unrepresentative import markets, 
such as the data included in China's first written submission, ca n be considered as a reliable 
indicator of China's future trade prospects in the EU market.  
1.2.2.4  As regards the Second modification package, the European 
Union was not required to re -determine the Members having a PSI or SSI 
on the basis of import data  subsequent to the initial determination  
21. China contends that there is an obligation to make a re -determination when negotiations do 
not comply with the time limits provided for in Article XXVIII:1. But, as explained by the European 
Union, those time l imits do not apply to so -called 'reserved' negotiations under Article  XXVIII:5. 
The time limits provided for in Article XXVIII:1 are linked to the requirement to make the 
modifications on the first day of each three year period, the first of which began on  1 January 
1958. The defining feature of the negotiations 'reserved' under Article XXVIII:5 is precisely that 
they are not subject to that requirement. Consequently, the time limits linked to that requirement 
are not applicable to 'reserved' negotiations.  
22. In practice, and since the 1960s, most negotiations have been conducted as 'reserved' 
negotiations under Article XXVIII:5. The reason for this is that, in many cases, Article XXVIII:1 
does not afford the necessary flexibility due to its tight deadline s. Applying the deadlines provided 
for in Article XXVIII:1 to 'reserved' negotiations under Article XXVIII:5 would eviscerate the latter 
provision of its effet utile  and deprive Members of much needed flexibility in negotiating the 
modification of concessi ons. In turn, this would undermine the objective of encouraging Members 
to make further concessions.  China insists that applying the time limits provided for in 
Article  XXVIII:1 also to negotiations 'reserved' under Article XXVIII:5 is es sential in order to 
ensure the objective of ending the negotiations as quickly as possible. Yet, on China's own 
interpretation, the Member seeking the modification of a concession would have to re -determine 
the Members having a PSI or SSI every six months. It is difficult to see how such a constant re -
determination of the negotiating and consulting partners could have contributed to the objective of 
speeding up the negotiations.  
2. CLAIMS UNDER ARTICLE  XXVIII:2 OF THE GATT  1994  
2.1. GATT  ARTICLE XXVIII  AND PARAGRAPH 6 OF T HE UNDERSTANDING DO NOT ADDRESS THE 
ALLOCATION OF TRQ S AMONG SUPPLYING CO UNTRIES – PARAGRAPH 6 OF THE UNDERSTANDING 
DOES NOT APPLY AT TH E LEVEL OF EACH OF T HE COUNTRY SHARES OF  A TRQ   
23. Paragraph 6 only refers to "tariff quotas". It makes no reference wh atsoever to the shares of 
a tariff quota allocated to certain supplying countries or groups of countries.  
24. The European Union does agree with China that paragraph 6 provides guidelines for 
calculating the amount of compensation to be provided to all Members. But from this it does not 
follow that paragraph 6 must be applied separately at the level of each country share of an WT/DS492/R/Add.1  
 
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  allocated TRQ. Rather, the opposite is true.  China further argues that, unless paragraph 6 is 
applied at the level of each share o f the TRQ, it would "create discrimination". However, if the total 
amount of compensation resulting from the application of paragraph 6 of the Understanding is 
allocated consistently with Article XIII:2, such allocation cannot be considered as "discriminat ory". 
Moreover, reading additional rules on the allocation of TRQs into the provisions of Article XXVIII:2 
and paragraph 6 of the Understanding would result in the application of two different and 
potentially conflicting sets of requirements. TRQs negotiat ed pursuant to Article XXVIII would have 
to comply with the rules of Article XIII and, at the same time, with the additional requirements 
read by China into Article XXVIII:2 and paragraph 6 of the Understanding.  
25. China argues that Article XXVIII:2 "gov erns the allocation of tariff quotas in the Schedule of 
concessions", while "what Article XIII governs is the allocation of tariff quotas in reality, i.e. in a 
WTO Member's domestic regulations or in the implementation of these regulations". This 
distincti on is specious. It is beyond dispute that, "in reality", one and the same TRQ cannot be 
allocated simultaneously in two different ways. If a Member allocates "in reality" a TRQ in order to 
comply with Article XIII:2 in a manner which departs from the alloc ation bound in its schedule, it 
would violate its obligations under Article II of the GATT. Therefore, it is plain that China's position 
would lead to a genuine conflict between, on the one hand, Article XIII and, on the other hand, 
Article XXVIII:2 and pa ragraph 6 of the Understanding. China cannot but recognise this conflict, 
but seeks a way out by arguing that the Member concerned could always avoid a violation of its 
obligations by opening a larger TRQ than that bound in that Member's Schedule. However,  a 
'solution' to a conflict between two obligations which involves the imposition on the Member 
concerned of an additional obligation going beyond either of those two obligations is not a proper 
solution. Article XIII:2 of the GATT governs exclusively the allocation of TRQs. It cannot be 
interpreted and applied in such a way as to impose upon a Member an obligation to open a TRQ 
which exceeds the compensation previously agreed and bound by that Member in its Schedule 
consistently with Article XXVIII.  
2.1.1.  The appropriate reference period for the application of paragraph 6 
of the Understanding is the period preceding the opening of the 
negotiations  
26. China argues that the EU's position is contradicted by the fact that the compensation for one 
of the tarif f items included in the First modification package (0210 99 39) was calculated on the 
basis of the imports for the period 2000 -2002 instead of the imports for the reference period 
2003-2005, whereas the compensation for another item in the same package (16 02 3219) was 
calculated on the basis of the imports for the period July 2005 -June 2006, rather than for the  last 
calendar year of the reference period (i.e. 2005). China's criticism is misguided. The European 
Union has never contested that the negotiating  Members may agree to depart from the guidelines 
provided in paragraph 6 of the Understanding, provided that, as in the present case, the amount 
of compensation exceeds that which would result from such guidelines. Indeed, if the negotiating 
Members could not depart from the benchmark provided for in paragraph 6 of the Understanding, 
it would be pointless to engage in negotiations. In particular, the negotiating Members may agree 
to use a different reference period from that provided for in paragraph 6 if t hat results in a larger 
amount of compensation. But this is not the same as saying that the negotiating Member are 
always required to do so. Contrary to what appears to be China's view, neither Article XXVIII:2 nor 
paragraph 6 of the Understanding impose a ny obligation to use always the reference period which 
is most favourable to the supplying Members, let alone to one supplying Member.  
27. Moreover, in the two instances mentioned by China, the compensation agreed by the 
European Union was based on import data pre -dating the initiation of the negotiations, which data 
was, therefore, fixed and known in advance to the negotiating parties.  
28. As further explained by in the EU's first written submission, there is no reason why the post -
initiation import volum es should necessarily be higher than the pre -initiation volumes. The present 
case illustrates this. According to China's own data and calculations, the amount of the TRQs for 
two of the tariff items included in the second modification package (1602 39 21 a nd 1602 39 80) is 
lower if the formulae of paragraph 6 of the Understanding are applied on basis of import data for 
the period 2009 -2011, instead of import data for the reference period 2006 -2008.  WT/DS492/R/Add.1  
 
- B-28 - 
 
  2.1.2.  The compensation provided by the European Union in t he form of 
TRQs is fully consistent with paragraph 6 of the Understanding  
29. China concedes that the size of the TRQs agreed by the European Union exceed the amount 
that would result from the application of the formulae in paragraph 6 of the Understanding , on the 
basis of data for the reference periods 2003 -2005 and 2006 -2008, in all cases but one: the TRQ 
for tariff item 1602 31. The difference, however, is minimal. The TRQ agreed by the European 
Union covers 103.896 tonnes whereas, according to China's c alculations in Exhibit CHN - 49, the 
compensation required pursuant to paragraph 6 of the Understanding would amount to 103.953 
tonnes, i.e. a difference of just 57 tonnes.  
30. Moreover, the difference appears to be due to the use of a different set of imp ort data. For 
the purposes of the negotiations, the European Union relied on the import data contained in the 
notification made by the European Union to the WTO in June 2006, which covers the imports into 
"EU 25" in 2006 and the imports into "EU 27" in 200 7 and 2008.. In contrast, the data set used by 
China appears to cover all imports into "EU 28", i.e. including the imports into Romania, Bulgaria 
and Croatia made into those countries before they joined the European Union.  
31. The data on imports into Rom ania, Bulgaria or Croatia before those countries joined the 
European Union is not representative because they may be affected by import conditions which are 
different from those prevailing in the European Union. Moreover, 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.  
32. China also concedes that the "all oth ers" share determined by the European Union is larger 
than the share calculated by China by applying the formulae of paragraph 6 of the Understanding 
on the basis of import data for the reference periods 2003 -2005 and 2006 -2008, with only two 
exceptions: t he tariff items 1602 39 21 and 1602 39 80. In fact, however, China's calculations in 
Exhibit CHN 49 show that, in the case of item 1602 39 21, the share for "all others" would be nil, 
as there were no imports from "all others" during the reference period 2 006-2008. China's 
calculation of the "all others" share in tariff item 1602 39 80 also appears to be incorrect. The 
European Union notes that, in particular, according to Exhibit CHN – 49, imports from China would 
have reached 201 tonnes in 2006. Yet, acco rding to the data notified by the European Union to the 
WTO in 2006 (Exhibit CHN – 25) and to the 2016 Eurostat figures provided as Exhibit EU – 30, 
there were no imports at all from China during the reference period 2006 -2008. Again, this 
discrepancy appe ars to be due to the fact that China has used import data into EU 28.   
3. CLAIMS UNDER ARTICLE  XIII OF THE GATT 199 4 
3.1. ARTICLE XIII:1  DEALS NEITHER WITH T HE ALLOCATION OF SHA RES WITHIN A TRQ  NOR WITH LEVEL 
OF ACCESS TO BE GRAN TED TO EACH MEMBER  
33. The European Union recalls that Article XIII:1 establishes a principle of non -discriminatory 
access to, and participation in, a TRQ. It requires that a TRQ is applied by a Member on a product -
wide basis without discrimination as to the origin of the product.  The Appellate Body has stressed 
that access to a TRQ and its allocation to different suppliers are two conceptually distinct 
questions. They must therefore be appreciated separately.  
34. Moreover, it results from the structure of Article XIII and from th e finding of the Panel in EC-
Bananas III (Ecuador) , that Article XIII:2 is lex specialis  with respect to Article XIII:1. Hence, 
China 's arguments concerning the allocation of the TRQ are to be examined in the first place in the 
light of the first provision . Article XIII:1 cannot be relied upon to overrule the provisions of 
Article  XIII:2. That means that for TRQs allocation 's aspects that are not covered by Article XIII:2, 
Article XIII:1 still applies, to the extent that its application does not lead to res ults that would 
conflict with the outcome of the application of Article XIII:2. This does not read out of 
Article  XIII:1 the provision that imports from all WTO Members must be " similarly  restricted".  
35. In paragraph 7.76  of the panel report in EC – Bananas III (Ecuador) , the Panel simply made 
some comments on the fact that, in its view, it would be preferable not to allocate the ‘all others ' 
share among non -substantial suppliers (even if specific shares are allocated to the substantial WT/DS492/R/Add.1  
 
- B-29 - 
 
  suppliers). Hence,  that Panel statement does not support the view that Article XIII requires that an 
‘all others ' share must be allocated to non -substantial suppliers so that, going forward, they can 
obtain a substantial supplying interest.  
36. China 's contention that Arti cle XIII:1 requires to allocate  a share to 'all others ' at a level that 
permits the non-substantial suppliers to increase their exports so as to obtain a n SSI would 
require either to reduce the share allocated to the substantial suppliers (possibly also to  zero) or 
would transform the TRQ in an unlimited tariff concession.  
37. Paragraph 476 of the Appellate Body report in EC- Bananas III (Article 21.5 – USA) does not 
confirm China 's argument to the effect that the EU should have reserved a "significant" sh are for 
all others. That paragraph relates essentially to the interpretation of Article 3.8 of the DSU and not 
to Article XIII.  
3.2. THE EUROPEAN UNION WAS REQUIRED NE ITHER TO BASE THE AL LOCATION OF THE TRQ S ON A 
DIFFERENT REFERENCE PERIOD NOR TO MAKE A DJUSTMENTS FOR SPECIAL  FACTORS  
38. In allocating the TRQs at issue the European Union followed the first allocation method set 
out in Article XIII:2(d), which provides a "safe harbour" to the Member applying the TRQ, and 
does not impose any specific obligat ion as to the reference period or special factors. China 
therefore cannot pretend that the European Union was required to comply with the same legal 
criteria set in the second allocation method provided for by Article XIII:2(d).  
39. In any event, the agre ement with the substantial suppliers on the allocation of the TRQs 
treats substantial suppliers and non -substantial suppliers in the same way by applying an impartial 
allocation method based on objective factors. It is quite obvious that a method that disr egards 
special factors affecting any of the suppliers of a given product would not be objective and 
unbiased.  
40. China 's argument that chapeau of Article XIII:2 requires to set aside a minimum share for 
non-substantial suppliers, regardless of the trade data considered, would be discriminatory vis -à-
vis substantial suppliers.  The Appellate Body Report in EC – Bananas III (Article 21.5 – 
Ecuador  II) / EC – Bananas III (Article 21.5 – US), is of no avail to China. That Report did not 
require setting  aside a minimum share for Members that are non -substantial suppliers, regardless 
of the level of imports from those suppliers in the past.  
41. Finally, the European Union demonstrated that the SPS measures mentioned by China are 
not "special factors", but measur es that define the relevant product market and the nature of the 
competitive relationship between products. China, on the other hand, explains that compliance 
with sanitary requirements is not a factor of competition. The European Union fails to see how 
product 's properties, which are dealt with by the SPS requirements (such as the presence in the 
product of pathogenic agents or substances harmful for human and animal health) can be ignored 
when apprehending the comparative advantage of one country and the relevant product market. 
Since EC – Asbestos the Appellate Body has clarified that properties of a product that make it 
dangerous for human health are relevant to determine the competitive relationship between that 
product and other allegedly like products . 
42. China argues that when it allocates a TRQ, a Member should make abstraction of the SPS 
measures, even if those measures are perfectly legal, otherwise the effect of the TRQ will be to 
perpetuate the SPS measures. In reality, what China calls a perpet uation of the SPS measures is 
the effect of any allocation of a TRQ in line with Article XIII:2(d). In any event, the expected 
import growth in the European Union of poultry meat products that do not comply with the EU's 
SPS requirements was and remains ze ro, regardless of China 's production capacity, its 
investments, its position in other selected export markets or its ability at a given point in time to 
partially meet those requirements for certain tariff lines.  
43. In summary, the European Union reitera tes that since the SPS measures are not special 
factors, the European Union was not required to adjust the ‘all others ' share or set aside a specific 
share for China or base the allocation of the TRQ on a different reference period not affected by 
those me asures.  WT/DS492/R/Add.1  
 
- B-30 - 
 
  3.3. THE CHAPEAU OF ARTICLE XIII:(2)  DOES NOT REQUIRE THE  EUROPEAN UNION TO ALLOCATE A 
SHARE FOR "ALL OTHER " COUNTRIES IN EACH TRQ  AT LEVELS THAT ALLOW  THEM TO ACHIEVE AN SSI  
44. According to China, the European Union violated the chapeau of Arti cle XIII:2 because it did 
not establish the shares of the TRQs for ‘all others ' at levels that allow these countries “going 
forward” to achieve a substantial interest. China explained in its oral statement that it did not 
mean that, if a non -substantial su pplier captures the entire ‘all others ' share, there would be no 
share left in the TRQ for others . However, unless the dimension of the ‘all others ' share and also 
the amount of the TRQ is a moving target (which would transform a TRQ in an open ended tarif f 
concession), China 's reasoning implies necessarily that a non -substantial supplier may at a certain 
point capture the whole ‘all others ' share. That is confirmed by China 's assertion that the ‘all 
others ' share must be sufficient to allow at least one no n-substantial supplier to gain an SSI. 
Hence, China 's line of argument on top of being contradictory, it would only postpone the freezing 
of the TRQs allocation.  
45. China is also incapable to indicate what is the minimum share that the EU should have 
allocated to "all others" to comply with the chapeau of Article XIII:2 when allocating the TRQs at 
issue, but it suggests that it should be established at a level allowing all non -substantial supplier to 
gain an SSI. But China 's argument lead to a paradoxical  situation where either the ‘all others ' 
share would overrun the shares allocated to the substantial suppliers or the TRQs would need to 
be transformed in unlimited tariff concessions.  
46. Finally, China 's claims are not confirmed by the practice of the M ember. The European Union 
provided examples of other TRQs included in the schedule of other Members that do not 
contemplate an ‘all others ' share or contemplate only a symbolic share for ‘all others '.  
3.4. THE EUROPEAN UNION DID NOT VIOLATE  THE CHAPEAU OF  ARTICLE XIII:2  AND ARTICLE XIII:4  BY 
NOT EXPLICITLY IDENT IFYING THE DATA THAT  IT TOOK INTO ACCOUNT  TO DETERMINE THE TRQ S 
47. China argued that, unles s the historical trade data, the base period, the basis for allocating 
the shares and the presence or abse nce of special factors are disclosed, WTO Members will be in 
the dark and will not be in a position to determine whether or not they hold an SSI and can ask for 
consultations under Article XIII:4.  
48. The European Union wonders how this reasoning accords w ith China 's claims according to 
which, even in the absence of that information disclosure, China has demonstrated to the Panel 
that it holds an SSI on the basis of its poultry meat production and its export to some other 
Members? Moreover, the European Uni on wonders why China did not ask for all the clarifications 
that it considered appropriate on those matters during the meeting of 19 May 2014?  
3.5. THE EUROPEAN UNION DID NOT VIOLATE  ARTICLE XIII:2( D) OF THE GATT  1994  BY DENYING SSI 
STATUS TO CHINA  
49. China reiterates its arguments that the notion of SSI is different in Article XXVIII and in 
Article XIII and that the European Union should have assessed China 's supplying interest by taking 
into account the SPS measures as a special factor. However, China is incapable to come up with 
any alternative definition of substantial supplier for the purpose of Article XIII:4. If the European 
Union should have recognised China 's SSI because China is one of the biggest world producers of 
poultry meat products and it holds a leading supplying position in certain other Members, that 
would imply that China should be recognised as a substantial supplier of poultry meat products by 
all Members, regardless of their actual imports from China.  
50. Moreover, by making an exam ple China itself demonstrated that the notion of substantial 
supplier under Article XXVIII and Article XIII should be interpreted in a harmonious way. Indeed, if 
the SSI status of a Member was excluded because it was subject to a WTO incompatible import 
ban, that means in all likelihood that the party imposing the TRQ did not take into account the 
discriminatory quantitative restrictions affecting that Member. In other words, the notion of 
substantial interest was applied in violation of paragraph 7 of  Ad Note Article XXVIII:1. That, in 
turn, would mean that the agreement reached with the other substantial suppliers for the 
allocation of the TRQ would not comply with Article XIII:2(d), because the agreement would not 
include all substantial suppliers.  WT/DS492/R/Add.1  
 
- B-31 - 
 
  3.6. THE EUROPEAN UNION DID NOT VIOLATE  ARTICLE XIII:(4)  BY REFUSING TO ENTER  INTO 
MEANINGFUL CONSULTAT IONS WITH CHINA  
51. China's assertion that the European Union refused to enter into consultations under 
Article  XIII:4 is unfounded as a matter of facts, gi ven that the European Union and China met and 
discussed China 's request to adjust the allocation of two tariff lines based on a different reference 
period, and in the light of special factors (the SPS measures). And indeed, consultations between 
the partie s on those matters are still ongoing.  
52. The proposition that the obligation to enter into consultations with a substantial supplier 
should be construed as an obligation to agree with that substantial supplier is simply untenable as 
Article XIII:4 only s ets out a procedural obligation.  
53. Finally, Article XIII:4 does not apply when the allocation among substantial suppliers is 
based on the first sentence of Article XIII:2(d), but only when it has been decided "unilaterally". In 
any event China did not ma ke a duly justified claim of SSI when requesting consultations pursuant 
to Article XIII:4.  
3.7. CHINA'S NEW CLAIMS UNDER ARTICLE XIII OF PERIODIC REVIEW A ND ADJUSTMENT OF THE  TRQ  
ALLOCATION  
54. In its second written submission China raised new claims, acco rding to which Article XIII 
would require a Member applying a TRQ to review and adjust its allocation an a periodic basis in 
the light of market developments.  
55. Besides not being based on the text or the case law concerning Article XIII, these claims ar e 
clearly not covered by the Panel 's request and therefore they fall outside the Panel 's terms of 
reference.  
4. CLAIMS UNDER ARTICLE  I:1 OF THE GATT 1994  
56. China response to Panel 's Question No. 58, confirms that China 's claims under Article I:1 are 
consequential to China 's claims concerning Article XIII:2. In any event they are also outside the 
scope of Article I:1.  
5. CONCLUSION  
57. For the reasons set out in this submission, the European Union reiterates its request that the 
Panel reject all the clai ms submitted by China.  
 
_______________  
 
 
 
 
 
 
 
 
 
 WT/DS492/R/Add.1  
 
- C-1 - 
 
  ANNEX  C 
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex  C-1 Executive summary of the arguments of Argentina  C-2 
Annex  C-2 Executive summary summary of the arguments of Brazil  C-6 
Annex  C-3 Executive summary summary of the arguments of Canada  C-9 
Annex C -4 Executive summary summary of the arguments of the Russian Federation  C-13 
Annex C -5 Executive summary summary of the arguments of Thailand  C-15 
Annex C -6 Executive summary summary of the arguments  of United States  C-22 
 
 WT/DS492/R/Add.1  
 
- C-2 - 
 
  ANNEX C -1 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF ARG ENTINA* 
1. The Argentine Republic is participating and setting out its views in this case due to its 
systemic and trade interest in the correct interpretation of certain obligati ons contained in the 
legal provisions invoked in this dispute.  
Article XXVIII of the GATT: The definition of "substantial interest" in Article XXVIII 
of the GATT . 
2. Argentina considers it important to reach an interpretation of the phrase "substantial 
interest" in accordance with the text, object and purpose of Articles XIII and XXVIII, and the  
GATT  1994 in general, since there is no definition in the covered agreements. Argentina notes 
that Note 7 to Article  XXVIII:1 of the GATT  1994 states that "substant ial interest" covers  only 
those contracting parties which have or could be expected to have a "significant" share in the 
market of the Member seeking to modify or withdraw the concession.  
3. In Argentina's view, the word "significant" must be interpreted a s a share in the market of 
the importing Member that is perceptible  or, in statistical terms, measureable , whether or not less 
than 10 %. For Argentina, the alleged minimum threshold of 10 % participation in the market of the 
country modifying the concession  as a basis for the right to claim the existence of a "substantial 
interest" has no textual basis in the GATT 1994.  
4. Argentina also believes that the 10 % criterion cannot be considered one of the "other 
decisions of the CONTRACTING PARTIES" within the me aning of paragraph 1(b)(iv) of the 
GATT  1994. Similarly, it is Argentina's understanding that this criterion is not a "decision[…], 
procedure[…] [or] customary practice[…] followed by the CONTRACTING PARTIES", within the 
meaning of Article XVI:1 of the Mar rakesh Agreement Establishing the World Trade Organization. 
Nor is the 10 % criterion a "subsequent agreement" or a "subsequent practice" within the meaning 
of Article 31.3(a) and (b) of the Vienna Convention on the Law of Treaties.  
Discriminatory quantitat ive restrictions and the determination of substantial interest  
5. Furthermore, Argentina considers that when determining which Members have a substantial 
interest in the concession the modification of which is being sought, consideration must be given 
to all the circumstances  that might have affected the trade t hat had existed on the basis 
of most-favoured -nation (MFN) treatment conditions, in particular, "discriminatory quantitative 
restrictions". Argentina takes the view that an import ban is a "quant itative restriction" within the 
meaning of Note 7 to Article  XXVIII:1 of the GATT, given that its effect  is to reduce imports 
to "zero".  
Trade restrictions and the maintenance of a "general level of … concessions" under 
Article XXVIII:2  
6. Argentina also point s out that the determination of the general level of reciprocal and 
mutually advantageous concessions under Article XXVIII:2 must be made on the basis of the 
"concessions" that existed prior to the initiation of the negotiations, irrespective of the 
circum stantial trade restrictions.  
7. Likewise, Argentina notes that the determination of Members with a principal supplying 
interest or substantial interest must take into account the share in the market they would have 
had "in the absence of discriminatory qua ntitative restrictions". Since Notes 4 and 7 to 
Article  XXVIII:1 of the GATT do not establish how that share in the market is to be determined, 
paragraph 4 of the Understanding on the Interpretation of Article XXVIII of the GATT  1994 may be 
relevant, as th is clause applies in the absence of statistical data.  
                                               
* Original Spanish.  WT/DS492/R/Add.1  
 
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  8. Argentina wishes to highlight that the period used for the determination of Members with a 
principal supplying interest or substantial interest must be "representative" and "recent". It is not 
repres entative if there are import bans or other discriminatory quantitative restrictions. And it is 
not recent if, in the context of Article XXVIII, there is a significant lapse of time between 
notification of the intention to withdraw or modify a concession an d the point in time at which it is 
planned to bring the modification into effect.  
9. Paragraph 1 of the Understanding on the Interpretation of Article XXVIII of the GATT sheds 
light on the notions of "representative" and "recent". The verb "has" in the pre sent tense in this 
paragraph implies that the principal supplying interest is not frozen in the period that ends when a 
Member notifies its intention to modify or withdraw a concession; on the contrary, its status as a 
principal supplier lasts for as long as it continues to have the highest ratio of exports. Therefore, if 
a Member did not have a principal supplying interest in the period preceding the negotiations, it 
could acquire that interest if the period following the notification referred to in paragr aph 2 of the 
Procedures for Negotiations under Article XXVIII is taken into consideration when determining 
its status.  
10. Furthermore, it is Argentina's understanding that the compensatory agreements reached by 
a Member modifying the concession in the con text of a procedure under Article  XXVIII of the 
GATT  must ensure the maintenance of a general level of reciprocal and mutually advantageous 
concessions not less favourable to trade than that obtained before the negotiations pursuant to 
Article  XXVIII:2 of the GATT  1994, in  particular for trade with those Members which had not 
participated in the compensatory negotiations on account of not being considered to have a 
principal supplying interest or a substantial interest.  
Article XIII:1 of the GATT and non -discriminatory tariff quota access  
11. Argentina considers that the allocation of tariff rate quotas almost exclusively to 
two WTO Members (and on some tariff lines an almost exclusive allocation to a single Member) 
may be considered inconsistent with Articl e XIII:1 of the GATT. Argentina also considers the term 
"similarly restricted" to mean, in the case of tariff quotas, that imports of like products of 
third countries must have access to, and be given an opportunity of, participation.  
12. In addition, Arge ntina takes the view that the allocation of a practically insignificant segment 
to "other countries" implies a de facto  impossibility for third countries to have access to, and 
effectively participate in, the tariff quota, and consequently establishes an  allocation inconsistent 
with the principle of non -discrimination captured by Article  XIII:1, owing to discriminatory 
administration of the restriction.  
The chapeau of Article XIII:2 and the non -distortive distribution of the tariff quota  
13. Argentina highl ights the existence of the obligation to share the tariff quota among all 
Members supplying the product in the least distortive manner possible, on the basis of the 
competitive opportunities of each supplying country, so that their access to and share in t he tariff 
quota mimics their comparative advantages.  
14. Argentina considers that the allocation of an insignificant quota to "other countries", 
together with the establishment of out -of-quota tariffs at very high levels, places Members which 
only have acc ess to the quota allocated to "other countries" at a disadvantage vis-à-vis other 
supplying Members which have a specific quota. Consequently, the distribution of the tariff quota 
becomes de facto  a permanent allocation of the quota share and a long -term f reeze which 
constitutes an impediment or obstacle to the normal development of trade, inconsistent with the 
chapeau of Article XIII:2.  
15. Furthermore, pursuant to Article XIII:2 of the GATT, the determination of tariff quotas must 
be based on statistical data that discount the impact of import restrictions.  
16. Argentina considers that the period used as a basis for allocation of the tariff quota must be 
the period immediately preceding the modification of the tariff concession, provided that the period 
is representative in terms of Article XIII:2(d). If a reference period were permitted that did not 
approach as closely as possible what the various Members might have expected in the absence of WT/DS492/R/Add.1  
 
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  the tariff quotas, a Member introducing a tariff quota could arb itrarily select a period of time and 
distribute the quota in a trade -distorting manner inconsistent with the chapeau of Article  XIII:2.  
17. In Argentina's view, the logic of Article XIII:2(d), especially as regards the weighing of 
special factors, should b e applied in the interpretation of the chapeau of Article XIII:2, both to the 
allocation of specific quotas and to the establishment of quotas for "other countries". A Member, in 
determining a tariff quota for "other countries", must weigh the special fact ors that may be 
affecting or may have affected trade in the product, so as to ensure a distribution of trade that 
approaches as closely as possible the shares which the different Members might be expected to 
obtain in the absence of the tariff quota.  
18. Argentina considers that the Note to Article XI of the GATT, and the interpretative note to 
Article 22 of the Havana Charter, could help in the interpretation of the term "special factors" 
under Article XIII:2(d). Evidence of the existence of a new or great er export capacity, among 
others, constitutes a "special factor" that must be taken into account by the Member establishing a 
tariff quota.  
19. In short, Argentina maintains that even when acting consistently with Article XIII:2(d) in the 
allocation of tar iff quotas, there are various instances in which the Member establishing a quota 
may violate the chapeau of Article XIII:2.  
Articles XIII:2 and XIII:4 of the GATT and the availability of information on the method 
used in the establishment of a tariff quota  
20. Argentina agrees with China's argument concerning the chapeau of Article  XIII:2 and 
Article  XIII:4 of the GATT  1994, to the effect that a Member that establishes a tariff rate quota 
must make clear the statistical methodology used to determine the rep resentative reference period 
and the manner in which the special factors which may have affected or may be affecting the trade 
in that product are taken into account and weighed.  
21. Argentina argues that it is necessary to have access  to the statistical d ata used in the 
allocation of the tariff rate quotas in order for WTO  Members to be able to determine whether 
there was a  distribution of trade approaching as closely as possible the shares which the various 
contracting parties might be expected to obtain in the absence of restrictions.  
22. Failure to disclose the methodology used in the establishment of a tariff rate quota violates 
the chapeau of Article XIII:2 and the provisions of Articles XIII:2 and XIII:4, as it encourages the 
exercise of discretion in  the distribution of trade under a tariff rate quota.  
23. Furthermore, in Argentina's view there is no legal basis for having to determine the 
substantial interest provided for in XXVIII:1 and XIII:2(d) on the basis of different statistical data.  
Article X III:4 of the GATT and the obligation to enter into consultations on the allocation 
of a quota  
24. Argentina believes that the Panel should analyse whether the obligation to enter into 
consultations on the allocation of a quota is exhausted through the hold ing of such consultations, 
for example through the consent of the Member establishing a tariff quota to hold a meeting, or 
whether, on the contrary, it implies the obligation to hold a deeper discussion with the Member 
claiming to have a substantial intere st 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 in 
the allocation of a quota, as provided in Article  XIII:4 of the GATT  1994.  
China's claims regardi ng the procedures for modification and rectification of schedules 
of tariff concessions  
25. Argentina considers that the certification provided for in the Procedures for Modification and 
Rectification of Schedules of Tariff Concessions is mandatory under p aragraph 8 of the Procedures 
for Negotiations under Article  XXVIII.  WT/DS492/R/Add.1  
 
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  26. Given the significance of certification, Argentina considers that the Panel should analyse the 
legal nature of the normative provisions relating to the procedures for modification and 
rectification of tariff schedules, especially if non -compliance by a  Member with those rules impairs 
the legal validity of the modified or withdrawn concessions.  
27. Argentina considers both the Procedures for Negotiations under Article  XXVIII and the 
Procedures for Modification and Rectification of Schedules of Tariff Concessions to fall under "other 
decisions of the CONTRACTING PARTIES to GATT 1947" provided for in Article 1(b)(iv), as well as 
under "decisions, procedures [or] customary practices" referre d to in Article XVI:1 of the 
WTO Agreement. Argentina, for its part, does not view either set of procedures as "subsequent 
agreement[s]" or "subsequent practice[s]" within the meaning of Article 31.3(a) or (b) of the 
Vienna Convention on the Law of Treatie s. 
28. Regarding paragraph 4 of the Procedures for Negotiations under Article  XXVIII, Argentina 
takes the view that Members cannot dismiss claims of interest simply because they are made 
outside the 90 -day time -frame. Paragraph 4 of the Procedures grants a  degree of flexibility for 
both the modifying Member and the Member claiming an interest.  
Request by the European Union for a preliminary Panel ruling  
29. First, at various points in the panel request China claimed a violation of the chapeau of 
Article  XIII:2. Argentina considers that this was sufficient for the European  Union to have been 
aware that it would be required to prepare its defence on the basis of an alleged violation of 
that provision.  
30. Similarly, Argentina believes that China's claim that " diminishing for the other 
WTO Members the market access commitments that the EU undertook to maintain on a 
non-discriminatory basis" may be seen as a claim of violation of the chapeau of Article  XIII:2 , 
as from there stems the claim that it was prevented f rom achieving "… a distribution of trade … 
approaching as closely as possible the shares which [China] might be expected to obtain in the 
absence of such restrictions ..." in the terms of the chapeau of Article  XIII:2.  
31. Argentina considers the provision  of statistical data to constitute a fundamental element for 
the correct allocation of tariff rate quotas, and it should therefore be concluded that China's claim 
falls within the Panel's terms of reference. For this reason, in Argentina's view, these clai ms 
concerning both the chapeau of Article XIII:2 and Article XIII:4 are included in the request for the 
establishment of a panel.  
 WT/DS492/R/Add.1  
 
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  ANNEX C -2 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF BRA ZIL 
I. INTRODUCTION  
1. Brazil has a clear and legitimate interest in the outcome of this dispute: annual poultry 
exports of around 1.2 billion USD rely on the Tariff -Rate Quotas (TRQ) presently challenged, and 
such sales have a significant impact on Brazil's poultry sector, including investment decisions and 
numerous jobs. Braz il would, therefore, like to summarize its views on some key issues before the 
Panel, in particular the scope and the dynamics of renegotiations under Article XXVIII of 
GATT  1994.  
2. Brazil stresses the importance of safeguarding the legitimate rights acq uired through such 
renegotiations. The outcome of the present dispute should fully comply with Article 3.5 of the DSU, 
pursuant to which decisions within the WTO dispute settlement system "shall not nullify or impair 
benefits accruing to any Member under t he covered agreements, nor impede the attainment of any 
objective of those agreements".  
3. Schedules are an integral part to the covered Agreements and, thus, the outcomes of the 
renegotiations with the EU under Article XXVIII (including the shared adminis tration of quotas and 
its distribution among exporters), are also part of the covered Agreements within the meaning of 
the DSU, and should not be invalidated by the present dispute.  
4. This dispute raises complex legal issues regarding the interactions of  Article XXVIII of 
GATT  1994 with Article XIII, and also on the applicable rules and procedures for negotiations 
under Article XXVIII.  Because a definite interpretation on such interplay has not yet been provided 
by the dispute settlement system, it is es sential that the Panel bear in mind the potential systemic 
repercussions of this case and the need to safeguard the stability of existing commitments and the 
legitimate interests of third parties.  
II. The scope of negotiations under Article XXVIII of GATT 1994 and the balance 
between flexibility and predictability  
5. It is not uncommon that negotiations under Article XXVIII result in the establishment of 
country -specific quotas. Yet, the establishment of such quotas certainly poses challenges to the 
functio ning of the multilateral trade system. In essence, they amount to a quantitative restriction 
within the meaning of Article XIII of GATT and as such can be trade -distortive. As a matter of fact, 
when combined, for instance, with prohibitively high extra -quota tariffs, TRQs may result in a 
virtual freeze of trade flows, contrary to WTO's long -standing purpose of progressively improving 
market access. In this sense, the consistency of the application of this instrument with the 
obligations inscribed in Article  XIII is in the interest of the whole WTO Membership.  
6. While Article XXVIII allows for significant flexibility to introduce modifications to 
commitments, Article XXVIII:2 provides that renegotiations must maintain "a general level of 
reciprocal and mutu ally advantageous concessions not less favorable to trade than that provided 
for in this Agreement prior to such negotiations".  
7. At the same time, Article XXVIII relies on certain objective criteria and procedures 
established over time to facilitate nego tiations and minimize uncertainty. These criteria and 
procedures are not mandatory, but provide a useful guidance that should help indicate whether a 
XXVIII negotiation is consistent with WTO rules. Predictability also being an essential goal of the 
procee dings, those criteria and procedures seek to facilitate the process for modification of 
concessions with a view to promptly ending the uncertainty created by renegotiations.  
8. Criteria and procedures under Article XXVIII, thus, offer Members a significant  margin of 
discretion in reaching a mutually beneficial agreement, encompassing new rights and obligations 
which should be considered legitimate. With regard to the TRQs at issue in the present dispute, it 
was only after long exchanges with the EU that it was possible to agree on the TRQs and their WT/DS492/R/Add.1  
 
- C-7 - 
 
  shared administration (which, in Brazil's view, constitutes an integral part of the renegotiations).  
9. A key question under the present dispute is whether the procedures and practices of 
Article  XXVIII of GATT 1994 related to the renegotiations leading to the 2007 and 2012 
modifications of the EU Schedule were consistent with EU's obligations, specifically with regard to 
China's claims that its export interests have not been taken into account.  
10 Brazil reitera tes that it acted in good faith and in full observance of the rules and related 
practices of Article XXVIII of GATT 1994 and of the Covered Agreements in the negotiations which 
resulted in the TRQs under dispute. Brazil has no reason to believe that the cr iteria for 
renegotiations under Article XXVIII were not followed. Regarding specifically the criteria adopted to 
establish who were the Members with "substantial interest" at the beginning of each negotiation, 
Brazil recalls that, based on the relevant dat a, even if the SPS measure applied to Chinese exports 
at the time were not in place, China would not have met the 10% market -share criterion usually 
adopted in Article XXVIII processes to define the Members with a substantial interest.  
11. Another importan t matter before this Panel is whether adjustments in the reference periods 
and the definition of negotiating Members, among other criteria, can take place in the course of 
negotiations. There is no reason to believe that the procedures of Article XXVIII do  not allow for 
such adjustments. How these adjustments would apply in practice can, however, only be defined 
on a case -by-case basis, provided that the rights of the other parties involved in the negotiation 
are not affected.  
12. Brazil submits that the fi ndings stemming from this dispute cannot affect the integrity of the 
bona fide renegotiations leading to the two packages of reconsolidation (and the resulting shared 
administration of quotas and allocation between importers), legally and legitimately obta ined 
through Article XXVIII proceedings. In our view, this would reflect the balance sought between 
flexibility and predictability under Article XXVIII.  
13. In this context, Brazil emphasizes, once again, that EU's argument that "the objections 
raised by C hina as part of its claims under Article XXVIII:2 relate to the country allocation of the 
TRQs, rather than the total amount of compensation provided by the European Union in the form 
of TRQs"  has no legal ground. A similar total TRQ, but with a smaller s hare for Brazil due to a 
hypothetical participation of another Member in the process, would not have appropriately 
reflected the balance of mutually agreed commitments and the trade to be preserved, pursuant to 
Article XXVIII.  
III. The relationship between  Articles XIII and XXVIII  
14. Concerning claims of violation of Article XIII, Brazil understands that there is no definitive 
precedent on whether and how Members not holding a substantial interest could be taken into 
account in the distribution of a TRQ i n light of Article XIII.  Brazil, however, agrees with Canada's 
contention in its Third Party Submission that Article XIII contains its own procedures that not 
necessarily replicate those under Article XXVIII, and considers that, depending on the specific 
circumstances of each situation, initial allocations made under Article XIII:2(d) may evolve due to 
relevant factors affecting the trade of the relevant product, as acknowledged in the panel in 
EC-Bananas III (Ecuador)1. Brazil holds that the consistency o f the application of both provisions 
and should be assessed on a case -by-case basis.  
15. In Brazil's view, Article XIII:2(d) defines a specific methodology to apply import restrictions 
to a product among supplying countries. That does not necessarily mean  that such methodology 
ensures, in every case, full compliance with the obligation set in the caput of Article XIII:2, which 
is of a more general nature, encompassing an obligation to achieve an approximate result: 
"distribution of trade in such product ap proaching as closely as possible the shares which the 
various contracting parties might be expected to obtain in the absence of such restrictions."  
16. Brazil insists that, should the Panel understand that, in light of Article XIII, China's interests 
must be taken into account in the application of the TRQs under dispute, any modification in the 
allocation of these quotas could only come from an increase of the total volume of the current 
                                               
1 Panel Report, EC – Bananas III (Ecuador) , paras. 7.91-7.92.  WT/DS492/R/Add.1  
 
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  quotas, rather than a mere reallocation, which would otherwise disrup t the balance achieved under 
both negotiations under Article XXVIII.  
17. In light of the above, Brazil believes that the elements underlying the dispute (namely, the 
agreements reached in the 2007 and 2012 modification packages and the shared administratio n 
system contained therein) are a crucial part of the balance of the general level of reciprocal and 
mutually advantageous concessions achieved under WTO -compliant negotiations, and as such, 
should not be affected by the present dispute.  WT/DS492/R/Add.1  
 
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  ANNEX C -3 
EXECUTI VE SUMMARY OF THE AR GUMENTS OF CANADA  
I. INTRODUCTION  
1. Canada has intervened in this dispute because of its systemic interest in the interpretation 
of the WTO Agreements and in ensuring that the Article XXVIII process remains functional and 
practical.  
II. AD ARTICLE XXVIII AN D THE MEANING OF "DI SCRIMINATORY QUANTIT ATIVE 
RESTRICTIONS"  
A. The Article XXVIII Process  
2. The Article XXVIII process for the modification or withdrawal of tariff concessions consists of 
the following related provisions and procedur es: Article  XXVIII,  Interpretative Note Ad 
Article  XXVIII from Annex I, Understanding on the Interpretation of Article XXVIII of GATT 1994, 
and Procedures for Negotiations Under Article XXVIII (Procedures)1. 
3. The Procedures were adopted by Council on 10 November 1980 on the recommendation of 
the Committee on Tariff Concessions but, as they are non -binding in nature2, Canada's view is that 
they fall within the meaning of Article  XVI:1 of the WTO Agreement under all three elements of 
"decisions, procedures and customary practices".  As noted by the panel in US – FSC, this means 
the Procedures would serve as guidance3.  Canada submits that the Procedures also satisfy the 
test set out in US – Clove Cigarettes4 to be considered a subsequent agreement in the con text of 
Article 31(3)(a) of the Vienna Convention on the Law of Treaties (Vienna Convention)5.  As 
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.  
4. An element of the Article XXVIII process has been the use of a ten per cent market share 
rule to identify the existence of a Member with a substantial supplying interest.  Canada submits 
that the use of this rule has been "concordant, common and consistent"6 and thus qualifies as 
"subsequent practice" within the meaning of Article 31(3)(b) of the Vienna Convention.  It would 
also be logical for the rule to qualify as "customary practice" pursuant to Article XVI:1 of th e 
WTO Agreement.  
5. The Article XXVIII process has the following attributes:  
i) to provide an opportunity for Members potentially most affected by the 
modification or withdrawal to protect rights under existing concessions by 
engagement with the modifying Member regarding the level of compensation7; 
ii) to provide adequate compensation to Members for the modification or withdrawal 
of tariff concessions8; 
iii) to be capable of timely completion, i.e. not be unduly complex or difficult and not 
be vulnerable t o delays from claims of interest9; and  
                                               
1 Procedures for Negotiations Under Article XXVIII, adopted by the Council on 10 November 1980, 
C/113 and C/113 Corr. 1, 6 November 1980.  
2 Committee on Tariff Concessions, Minutes of the Meeting held in the Centre William Rappard on 
3 November 1980, TAR/M/3, 10 March 1981, para. 4.7.  
3 Panel Report, US – FSC, para. 7.78.  
4 Appellate Body Report, US – Clove Cigarettes , paras. 262 and 265.  
5 The Vienna Convention on the Law of Treaties (Vienna Convention), done at Vienna, 23 May 1969, 
1155 U.N.T.S. 331; 8 International Legal Materials 679.  
6 Appellate Body Report, Japan – Alcoholic Beverages II , p. 13.  
7 Article XXVIII:4 of GATT 1994.  
8 Ibid. WT/DS492/R/Add.1  
 
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  iv) to provide for retaliation in the event that concurrence on compensation is not 
attained10. 
B. Meaning of "Quantitative Restriction"  
6. Whether a particular measure amounts to a "quantitative restriction" in the se nse of 
paragraphs 4, 6 and 7 of Article XXVIII must be determined on case -by-case basis, taking into 
consideration all relevant factors.  In this regard, Article XI (General Elimination of Quantitative 
Restrictions) is relevant as interpretative context, b ut the introductory paragraph of Ad Article III 
must be taken into account in the interpretation of Article XI:1 and, by extension, the reference to 
the term "quantitative restriction" in paragraphs 4, 6 and 7 of Ad Article XXVIII:1.  Whether a 
measure is a quantitative restriction barred by Article XI:1 or an internal regulation and thus 
subject to the requirements of Article III:4 calls for a detailed analysis of the measure in question.  
C. Meaning of "Discriminatory"  
7. The phrase "discriminatory quantit ative restriction" has not been interpreted in WTO 
jurisprudence nor has the word "discriminatory" in the context of the Article XXVIII process been 
interpreted in WTO jurisprudence.  The Appellate Body has noted that the plain language meaning 
of "discrim ination" can encompass both a "neutral meaning of making a distinction" and "a 
negative meaning carrying the connotation of a distinction that is unjust or prejudicial" and that a 
full and proper interpretation of the provision is necessary to determine wh ich meaning was 
intended11. 
8. It is Canada's view that the word "discriminatory" in Ad Article XXVIII bears the meaning of 
a distinction that is drawn on an improper basis, not a distinction drawn per se .  Further, it is 
Canada's view that a measure that i s otherwise consistent with WTO obligations would not be a 
distinction drawn on an improper basis and thus would not be "discriminatory" within the context 
of Ad Article XXVIII.  
9. Canada's views in this regard are supported by the following:  
i) it realize s the object and purpose of the Article XXVIII process to afford Members 
with a principal or substantial supplying interest with an opportunity to protect the 
contractual rights they enjoy under the Agreement while balancing the interest of 
Members utilizi ng Article  XXVIII to achieve modifications or withdrawals of 
concessions within a reasonable period of time and thereby minimize uncertainty 
or disruption to trade;  
ii) it maintains a functional and practical Article XXVIII process, which has been a 
preocc upation of Members since GATT 194712; and  
iii) it is consistent with the overall aims of the WTO Agreement to achieve the 
"substantial reduction of tariffs and other barriers to trade and [...] the elimination 
of discriminatory treatment in international tr ade relations"13 while recognizing that 
Members have the right to take measures to protect a variety of interests, for 
example under Articles XX and XXI.  
10. Were the word "discriminatory" to be interpreted as meaning a distinction regardless of 
reason, it becomes difficult to maintain the attributes of the Article XXVIII process.  For example, a 
Member modifying or withdrawing its concessions cannot be expected, as a matter of course, to 
speculate on the market share of any number of possible suppliers that  might exist in a world that 
is devoid of distinctions, essentially the absence of its laws, regulations and other measures, 
including those that are consis tent with its WTO obligations. Doing so would render the 
                                                                                                                                               
9 Ad Article XXVIII:4 of GATT 1994 and timeframes expressed throughout Article XXVIII, Ad Article 
XXVIII of GATT 1994 and the Procedures.  
10 Article XXVIII:4(d) of GATT 1994.  
11 Appellate Body Report, Canada – Wheat Exports and Grain Imports , para. 87.  
12 See, f or example, Verbatim Report, Fourteenth Meeting of the Tariff Agreement Committee Held on 
Tuesday, 9 September 1947 at 2:30 PM in the Palais Des Nations, EP/CT/T/TAC/PV/14, pp. 14 -15. 
13 Marrakesh Agreement Establishing the World Trade Organization, preambl e. WT/DS492/R/Add.1  
 
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  Article  XXVIII process unduly complicated a nd raise issues of procedural fairness vis-à-vis 
Members able to demonstrate an interest through a record of past imports. Such a process would 
likely result in a tariff rate quota (TRQ) not fit for its purpose as it would not be representative of 
genuine interests capable of supplying the market of the modifying Member.  This would lead to 
further difficulties at the allocation stage under Article XIII and the administration and utilization of 
the TRQ.  It is also neither logical nor just to require a modi fying Member to provide compensation 
for the effect of measures that respect the overall requirements of the WTO agreements, especially 
when the Article has the limited purpose of providing compensation for lost access due to the 
withdrawal or modification  of tariff concessions pursuant to Article XXVIII.  
D. Flexibility in the Article XXVIII Process  
11. It should be remembered that the Article XXVIII process provides for its own remedies and 
that the process also has some flexibility: it is a floor, not a c eiling in terms of the interests of 
suppliers to be protected and the compensation (e.g. size of TRQ) to be determined.  By providing 
for negotiations and consultations, the Article inherently contains a degree of flexibility to permit 
arrival at a mutuall y agreed result.  This includes flexibility to adjust a reference period to ensure 
that it is representative.  However, balancing this with need to preserve the workability of the 
process, adjusting a reference period to something other than the usual thre e years immediately 
prior to notification would normally involve looking back further in time than three years, not 
employing hypothetical considerations.  There is a systemic interest in quickly and clearly 
identifying Members holding a principal or subst antial supplying interest so that negotiations can 
begin and the TRQ can be set.  If a Member could insist that the reference period be continually 
adjusted forward in time to a period that it considers to be more "representative", it would impede 
the iden tification of those Members holding principal or supplying interests and the conclusion of 
negotiations with those Members.  
12. Timely expressions of interest from Members believing they have a principal or substantial 
supplying interest are essential for the workability of the process. However, there may be 
instances (to be determined on a case -by-case basis) where it would be appropriate for a Member 
to accept an untimely claim of interest so long as issues of procedural fairness towards Members 
who have provided a timely claim of interest are taken into account.  
III. THE OPERATION OF ART ICLE XIII  
A. Interaction of Article XIII and Article XXVIII  
13. Article XXVIII provides for the establishment of the level of compensation (e.g. a TRQ); 
Article XIII relat es to the administration and allocation of a TRQ and may occur at times when 
Article XXVIII is not being used.  However, if Article  XXVIII is being used, it is very likely that 
allocation under Article XXIII will occur coincident with the establishment of a TRQ under 
Article  XXVIII.  In this instance, it is virtually certain that the Members determined to have initial 
negotiating rights, a principal supplying interest or a substantial interest will be the main recipients 
of the allocations.  As the compensa tion (TRQ) determined under Article XXVIII might not be large 
enough to accommodate the introduction of another Member with a substantial interest in 
supplying the product into the allocation process at this stage using a different set of criteria, this 
could raise issues of procedural fairness vis-à-vis the Members involved in the determination of 
compensation under Article XXVIII.  However, the plain language of Article  XIII:2(d) would not 
preclude the allocating party from doing so, so long as the rights  of the Members whose initial 
negotiating rights, or principal or substantial supplying interests were protected through 
negotiations or consultation (as applicable) under Article XXVIII continue to be protected at this 
point in time.  
14. Article XIII cont ains its own procedures; those related to Article XXVIII are not imported into 
Article XIII.  There are attractions of methodological ease and consistency in using a ten per cent 
share of imports as the means of determining "substantial interest" in Articl e XIII as is the practice 
for Article XXVIII.  However, the ten per cent threshold is not a bright line and some flexibility may 
be desirable given the range of market situations to which Article XIII can apply14 and that 
                                               
14 Panel Report,  EC – Bananas III (Ecuador) , paras. 7.83-7.84. The panel did not take issue with the ten 
per cent threshold applied by the European Community in the context of Article XIII:2(d) but did not find it 
necessary to set a precise import share to determine the existence of a substantial interest in supplying a WT/DS492/R/Add.1  
 
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  supplying interests can evolve with  time15.  The determination of "s ubstantial interest" in 
Article  XIII:2(d) could vary with time or round of allocation so long as, in a particular round, the 
same parameters for determining substantial interest in a particular product are used vis-à-vis 
each potential supplier and allocation does not discriminate between similar situations.  Consistent 
with the explanation of the Appellate Body16, Canada's view is that following either method of 
allocation in Article XIII:2(d) satisfies the aim expressed in t he chapeau of that paragraph.  
B. Meaning of "Special Factors"  
15. Further acknowledgement that supplying interests can evolve with time is found in the 
possibility of taking into account, when using the second method of allocation under 
Article  XIII:2(d) ( unilateral imposition), "special factors which may have affected or may be 
affecting the trade in the product".  Ad Article XIII suggests that "special factors" is broader in 
scope than the term "discriminatory quantitative restrictions". However, Ad Artic le XIII also 
suggests that there is a desire to keep the determination of a substantial interest grounded in 
genuine and demonstrated market access and to ensure that the process of allocation remains 
practicable.  
C. Establishment of an Allocation for "Oth ers" 
16. The text of Article XIII does not require a Member to establish an allocation for others: 
whether this is done will depend on the interests to supply a product that exist and the outcome of 
the process in Article XIII:2(d).  In this respect, an al locating Member must have regard to the 
admonition in EC – Bananas III  that it cannot discriminate by providing country specific allocations 
to some with a non -substantial interest in supplying the product but not to others with a 
non-substantial interest17.  Should an allocation for others be established, there is also no general 
obligation in the text of Article XIII to set it at a particular size.  This will also be an outcome of a 
particular fact situation and the application of Article XIII:2 taken as a  whole and read in 
conjunction with Article XIII:4.  
                                                                                                                                               
product, noting: "A determination of substantial interest might well vary somewhat based on the structure of 
the market. " 
15 Panel Report, EC – Bananas III (Ecuador) , paras. 7.91 -7.92.  
16 Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – 
US), para. 338. 
17 Appellate Body Report, EC – Bananas III , para. 161.  WT/DS492/R/Add.1  
 
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  ANNEX C -4 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF THE  RUSSIAN FEDERATION  
1. The Russian Federation would like to present, as a third party in this  dispute,  the summary 
of its arguments that mostly relate to t he issues concerning Article II of the General Agreement on 
Tariffs and Trade (GATT) and the Procedures for Modification and Rectification of Schedules of 
Tariff Concessions adopted by the Council on 26 March 1980 . 
2. In its First Written Submission China cla ims that without certification the first and the second 
modifications have no legal effect and, therefore, the European Union 's implementation of these 
modifications violate Article II of the GATT 1994.1 
3. Article II of the GATT 1994 imposes an obligation on  an importing Member to accord to the 
commerce of other Members treatment no less favorable than that provided for in the relevant part 
of its Schedule.  
4. In the view of the Russian Federation all modifications of tariff concessions should be 
certified under  the Procedures for Modification and Rectification of Schedules of Tariff Concessions 
adopted by the Council on 26 March 1980.  
5. According to the Panel in US – FSC for a decision to be classified as "other decisions of the 
CONTRACTING PARTIES to the GATT 194 7" within the meaning of  paragraph 1(b)(iv) of the 
GATT  1994 "it must be a legal instrument within the meaning of the chapeau to paragraph 1, i.e., 
it must be a formal legal text which represented a legally binding determination in respect of the 
rights an d/or obligations generally applicable to all contracting parties to GATT 1947 "2. 
 
6. Modifications of Member 's tariff commitments could be the outcome of action under various 
provisions of the WTO Agreement, including Articles II, XVIII, XXI V, XXVII and XXVII I of the 
GATT  1994, and, as the results, will probably affect the existing rights and obligations of WTO 
Members. Thereby, the Procedures for Modification and Rectification of Schedules of Tariff 
Concessions may constitute "other decisions of the CONTRACTI NG PARTIES to the GATT 1947 " 
within the meaning of paragraph 1(b)(iv) of the GATT 1994. Thus, all WTO Members should follow 
these Procedures as they contain a legally binding determination in respect of the rights and/or 
obligations generally applicable to  all contracting parties to GATT 1947.  
7. The Russian Federation disagrees with the EU 's arguments that "[t]he certification of the 
changes to the schedule has the sole purpose of formally incorporating into a Member 's schedule 
the modifications made in accor dance with Article XXVIII or other relevant provisions, but it is not 
a prerequisite for implementing such changes "3 and that "the certifications do not have any effect 
on the entry into force of the proposed modification or rectification. The idea is to f ormally 
incorporate in the schedules of members modifications and rectifications which, in most cases, 
have already entered into force ".4 
8. The Appellate Body in EC – Computer Equipment  noted: "[a] Schedule is made an integral 
part of the GATT 1994 by Articl e II:7 of the GATT 1994. Therefore, the concessions provided for in 
that Schedule are part of the terms of the treaty. As such, the only rules which may be applied in 
interpreting the meaning of a concession are general rules of treaty interpretation set o ut in the 
Vienna Convention ".5 
9. Article 26 of the Vienna Convention requires that "[e]very treaty in force is binding upon the 
parties to it and must be performed by them in good faith ". The chapeau of the Procedures for 
Modification and Rectification of Sc hedule of Tariff Concessions requires that "[…] changes in the 
authentic texts of Schedules which record […] modifications resulting from action taken under 
Article II, Article XVIII, Article XXIV, Article XXVII and Article XXVIII shall be certified withou t 
delay ". Furthermore, paragraph 4 of the same Procedures provides that "[w]henever practicable 
                                               
1 The China 's First Written Submission, para. 270.  
2 Panel  Report, US – FSC, para. 7. 63. 
3 The European  Union 's First Written Submission, para.300. (emphasis added)  
4 Ibid., para. 301. (emphasis added)  
5 Appellate Body Report, EC – Computer Equipment , para. 84. (emphasis added)  WT/DS492/R/Add.1  
 
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  Certifications shall record the date of entry into force of each modification ". Taking into account 
that the European Union failed to obtain certification from the WTO Members, the EU 's Modification 
Packages have no legal effect. Thus, it would appear that the European Union is obliged to comply 
with its current Schedule, including for the purposes of Articles II:1(a) and II:1(b) of the 
GATT  1994.  
10. The significanc e of following procedural rules was noted by the Рanel in  
EC – Bananas III (Article 21.5 -Ecuador II) :  
There is no provision in the WTO Agreement that would allow a Member to unilaterally 
modify the concessions contained its Schedule, unless procedures for renegotiation of 
such Schedule are formally con cluded.6 
Accordingly, the appropriate procedures must be finalized, before the concession can 
be legitimately modified or withdrawn and replaced with a new one.7 
11. The European Union also states that the certification process of changes to the Schedule is 
going to start only after the conclusion of certification process started in March 2014 for changes 
made pursuant to Article XXIV:6 (2004 Enlargement).8 According to the Procedures for Modification 
and Rectification of Schedules of Tariff Concessions, a Memb er should communicate a draft within 
three months after the negotiation has been completed. There is nothing in the Procedures that 
can be interpreted to suggest that certification process for modific ations made pursuant to 
Article  XXVIII should be initiat ed only after certification process for modifications made pursuant to 
Article XXIV has been completed. On the contrary, the word "or" in paragraph 1 of the Procedures 
for Modification and Rectification of Schedule of Tariff Concessions means that A rticles  XXIV 
and XXVIII should be considered separately and should not follow one after a nother in any 
particular order.
                                               
6 Panel Report, EC – Bananas III (Article 21.5 -Ecuador II) , para. 7.447.  
7 Ibid., para.7.451.  
8 The European Union 's First Written Submission, para. 299.  WT/DS492/R/Add.1  
 
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  ANNEX C -5 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF THA ILAND  
I  INTRODUCTION  
1.1.  This case raises issues of fundamental importance regarding the  manner in which World 
Trade Organization ( "WTO") Members modify their tariff concessions and provide compensation in 
the form of tariff rate quotas ( "TRQs") to WTO Members affected by the modification.    
1.2.   China 's argument, in essence, is that the E uropean Union ( "EU") should have identified 
China as a Member that had a principal supplying interest ( "PSI") or substantial supplying interest 
("SSI") in the products at issue in the EU 's tariff modifications. I n China 's view, the EU did not do 
so because  China 's poultry imports were subject to an import ban for SPS reasons during the 
relevant reference period used by the EU to determine the Members that had a PSI or SSI, with 
which it had to negotiate appropriate compensation.  China further argues that i t should have 
received a share of the TRQs because it is the world 's largest producer of poultry and it had growth 
potential in the affected products.   
1.3.  Thailand considers China 's arguments to be unfounded. It fully supports the EU 's request that 
the Panel reject all claims made by China. The EU complied fully with its obligations under the 
relevant provisions of the GATT 1994 and related instruments in modifying its tariff concessions 
and in allocating compensation to Thailand and Brazil following th e tariff modifications. Thailand 
endorses the legal arguments set out in the EU 's first written submission.  
A. Article XXVIII and Article XIII contain related, but separate, obligations  
1.4.    In this case, the EU modified its tariff schedule pursuant t o Article XXVIII of the GATT 1994 
and allocated compensation in TRQs to Thailand and Brazil pursuant to Article XIII:2  of the 
GATT  1994. Article XXVIII:1 (and related instruments) address with which countries the EU had to 
negotiate or consult when it deci ded to modify its tariff concessions. Article XIII (and related 
instruments) refer to how the EU has to determine the allocation of compensation in the TRQs. In 
other words, Article XXVIII:1 deals with "with whom to negotiate/consult when modifying a tarif f 
concession " and Article XIII:2 deals with "how to allocate compensation after modifying a tariff 
concession. "      
1.5.  Article XXVIII of the GATT 1994 sets out the conditions that apply when a WTO Member 
seeks to modify its tariff schedule. The applica nt Member, Members with initial negotiating rights, 
and Members with a principal supplying interest are referred to as the "contracting parties 
primarily concerned " and the fourth is a Member with a substantial interest. Article XXVIII:1 treats 
these categ ories of Members differently.  
1.6.  Paragraph 7 of Note Ad Article XXVIII1 states that "the expression 'substantial interest ' is not 
capable of precise definition and accordingly may present difficulties for [WTO Members]. It is, 
however, intended to be c onstrued to cover only those [Members] which have, or in the absence 
of discriminatory quantitative restrictions affecting their exports could reasonably be expected to 
have, a significant share in the market of the contracting party seeking to modify or w ithdraw the 
concession. "     
1.7.  Paragraph 4 of the 1980 Procedures for the Negotiations under Article XXVII  of the 
GATT  1994 ("1980 Procedures ") provides that claims of interest by a PSI or SSI holder should be 
made within ninety days following the circ ulation of the import statistics by the applicant country, 
in this case, the EU. Paragraph 5 of the Understanding on the Interpretation of Article XXVIII of 
the GATT 1994 ("Understanding on Article XXVIII ") provides that where a Member considers that it 
has a PSI or SSI, it shall communicate its claim in writing to the [applicant Member and the 
Secretariat]. It further provides that paragraph 4 of the 1980 Procedures "shall apply in these 
                                               
1 This Note applies to Article XXVIII and not Article XIII.  However, as the provisions contain identical 
terms, Thailand considers that the clarification provided for Article XXVIII could be used to interpret the term in 
Article XIII.  WT/DS492/R/Add.1  
 
- C-16 - 
 
  cases ". The Understanding on Article XXVIII is part of the GATT 1994 and is, therefore, legally 
binding.  
1.8.  Article XXVIII:2 provides that the compensatory adjustment provided by the applicant 
Member "shall endeavour " to maintain a general level of reciprocal and mutually advantageous 
concessions.  The obligation in Art icle XXVIII:2 is thus not 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 " but rather to "endeavour to  maintain " such a level.   
Paragraph 6 of the Understanding on Article XXVIII may be used to determine the compensation 
for WTO Members that have an SSI when a tariff concession is replaced by a TRQ.    
1.9.  Article XIII of the GATT 1994 is entitled "Non-discriminatory Administra tion of Quantitative 
Restrictions. " Article XIII:1 provides that no import or export restriction may be applied to a single 
Member, unless imports or exports from all other countries are similarly restricted. The remaining 
provisions of Article XIII provid e guidance as to how this non -discriminatory obligation is to be 
applied.   The chapeau to 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 a s 
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 conditions ....". This provision therefore 
requires the EU, in this case, to provide different allo cations in the TRQs based on historical trade 
patterns from countries with supplying interests.  
1.10.  Article XIII:2(d) provides for two different processes for determining the allocation of quotas 
among supplying countries. First, the applicant Member ca n seek agreement on the allocation of 
shares with those Members that had a SSI. Second, if there is no agreement on the allocation, the 
applicant Member can allot shares in the quota to Members that have a substantial interest on the 
basis of the criteria specified in  Article XIII:2(d) , second sentence, including taking account of 
special factors that may have affected the trade in the product.2 Thus, the consideration of special 
factors is relevant only when there is no agreement on the allocation of the shares within a TRQ 
between the applicant Member and the Members that had an SSI.  
1.11.  China incorrectly suggests that the principles outlined  in paragraph 4 of the Understanding 
on Article XXVIII to determine Members that had a PSI or SSI on new products (for which three 
years ' trade statistics are not available) may also be used to determine such interests when an 
import ban has been applied. However, paragraph 4 addresses a completely different situation. 
When a tariff on a new product is being modified, it may be necessary to take into account 
"production capacity and investment in the affected product in the exporting Member and 
estimates of  export growth, as well as forecasts of demand in the importing Member " because 
three years ' statistics are not available.  Where three years ' statistics are in fact readily available 
(even if a legitimate SPS measure was in place) there is no basis to exa mine production capacity 
and other criteria to determine whether a Member "could have had " a PSI or SSI.  
1.12.  In Thailand 's view, China 's attempt to mix up the applicable concepts is incorrect. The 
factors that are used to determine the amount of compens ation to be provided should not be used 
to identify a Member with a PSI or SSI, and vice versa .  
B. China 's argument that the EU should have identified that China had a PSI or SSI 
based on a counterfactual reference period is incorrect  
1.13.  China argues that the reference periods used by the EU to identify that Thailand and Brazil 
had a PSI or SSI were "tainted " by the application of an import ban to China 's imports during the 
reference periods used by the EU, namely 2003 –2005 for the Firs t Modification P ackage 
and 2006-2008 for the Second Modification Package. China further argues that the EU should have 
examined the share China "would have had in the absence of the import ban and whether such 
share constitutes a PSI or SSI ". Lastly, China argues that, du e to the extended nature of the 
negotiations for the Second Modification Package, the EU should have used a more recent 
reference period to correctly identify the WTO Members that had a PSI or SSI.     
                                               
2 Panel Report,  EC — Bananas III (Ecuador) , paras. 7.71–7.72.  WT/DS492/R/Add.1  
 
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  1.14.  In order for an applicant Member to determine w hich Members have a PSI or SSI and 
therefore, with which Members it must negotiate or consult prior to modifying its tariff 
concessions, the applicant Member must analyse import data in an appropriate reference period.     
1.15.  Article XXVIII does not sp ecify the appropriate time period for this reference period. 
However, paragraph 4 of Note Ad Article XXVIII provides that the determination of a Member that 
had a PSI should be made if the Member had "over a reasonable period of time prior to the 
negotiati ons, a larger share in the market [than a Member with INRs] ". Logically, this temporal 
requirement should apply equally to the determination of a Member that had a SSI. Thus, the 
reference period must be "prior to the negotiations ". The practice in the GAT T and the WTO has 
been to rely upon the three -year period prior to the notification of the intention to modify the 
concession.  
1.16.  China incorrectly suggests that the principles outlined in paragraph 4 of the Understanding 
on Article XXVIII to determin e Members that had a PSI or SSI on new products (for which three 
years ' trade statistics are not available) may also be used to determine such interests when an 
import ban has been applied. However, paragraph 4 addresses a completely different situation. 
When a tariff on a new product is being modified, it may be necessary to take into account 
"production capacity and investment in the affected product in the exporting Member and 
estimates of export growth, as well as forecasts of demand in the importing Me mber" because 
three years ' statistics are not available.  Where three years ' statistics are in fact readily available 
(even if a legitimate SPS measure was in place), there is no basis to examine production capacity 
and other criteria to determine whether a Member "could have had " a PSI or SSI.  
1.17.  China also incorrectly argues that due to the extended nature of the negotiations for the 
Second Modification Package and the application of the import ban, the EU should have used a 
more recent reference peri od, such as from 2009 -2011, to correctly identify the Members that had 
a PSI or SSI.  There is no legal basis for this argument. As the EU explains, this argument has no 
basis in "any provision of Article XXVIII or the 1980 Procedures or on past practice, and would 
undermine the objective pursued by Article XXVIII:1. This was also acknowledged by the Arbitrator 
in EC – The ACP -EC Partnership Agreement. The Arbitrator further stated that "[t]he use of the 
most recent representative reference period minimizes  the need for ad hoc adjustments to be 
made to the data and corresponds as closely as possible to the trade regime as applied ".3 Thus, it 
is important to use trade statistics for a period as close as possible to the trade regime in place 
prior to the notif ication of the modification.  
1.18.  The practice of using three years ' trade statistics prior to the negotiations  allows for 
predictability and certainty. It is not clear how the proper reference period could be chosen in the 
circumstances described by Ch ina. China does not propose any guidelines to determine which 
period should be used other than, apparently, to suggest a period that would "reflect the more 
natural export strength of the WTO Member(s) affected by the discriminatory quantitative 
restrictio ns" in casu , China. This is not a guideline that could be applied in a manner that promotes 
predictability and certainty in the multilateral trading system.    
1.19.  China also incorrectly argues that the "requirement in paragraph 6 of the Understanding o n 
Article XXVIII that the three -year reference period for determining compensation must be 
representative or that trade in the most recent year be taken into account should equally apply for 
the determination of the supplying interests. " It suggests that t he determination of the existence 
of a PSI or SSI based on one period and the calculation of compensation based on a different 
period would seem illogical. In Thailand 's view, China fundamentally misunderstands the different 
purpose of each of these provis ions. The determination of which Members have a PSI or SSI must 
necessarily be based on import data from the past. The review of the import data in the trade 
actually affected over the relevant three -year reference period shows which Members have a 
special  interest in the concessions to be modified, and therefore, with which Members the applicant 
Member must negotiate or consult. This backward -looking exercise must be conducted before the 
applicant Member can modify its tariff concessions. As the EU explain s, as "those Members stand 
to lose the most from the intended modification, they can be trusted to negotiate compensation 
which is adequate for all Members ". Paragraph 6 of the Understanding on Article XXVIII addresses 
a very specific situation, namely the  compensation that should be provided when a Member 
replaces an unlimited tariff concession with a TRQ. As the EU notes, paragraph 6 is expressed in 
                                               
3 Award of the Arbitrator, EC – The ACP -EC Partnership Agreement , para. 83.  WT/DS492/R/Add.1  
 
- C-18 - 
 
  "hortatory terms ". As is clear from the terms of paragraph 6, "the amount of the compensation 
should exceed  the amount of trade actually affected by the modification of the concession ". The 
compensation must be calculated on "future trade prospects ", which should be based on the 
greater of the average annual trade in the more recent three -year period or trade i n the most 
recent year increased by 10 percent.  This must be a forward -looking exercise as it seeks to 
compensate the affected Members for the changes brought about by the tariff modification. 
Therefore, contrary to China 's assertions, it is not at all il logical that the determination of the 
existence of a PSI or SSI would be made based on a different period from that used to determine 
compensation.      
1.20.  China submits that the EU should have made allowances for the import ban imposed for SPS 
reasons  and used a different reference period to determine the Members that had a PSI or SSI.  To 
this end, China submits that its exports to the EU of products classified under CN 1602 32 19 in 
particular were "growing ". The EU has explained that even if it had taken into account import data 
before the SPS measures were introduced in 2002, China did not have sufficient imports to qualify 
as a Member that had a SSI as its imports were well below the 10 per cent benchmark for a SSI 
Member. China has also submitted that where "significant time " has lapsed since the notification of 
the intention to modify a concession, the three -year reference period must be re -assessed and the 
latest available data must be used. To this end, China submits import data for 2009 –2011.  The EU 
has explained that there is no legal basis to require such a re -determination. Moreover, such a 
re-determination would adversely affect the due process rights of Thailand (and Brazil), which 
entered into good faith discussions with the EU on the bas is of Article XXVIII and the 
1980 Procedures.     
1.21.  China also submits detailed trade statistics to demonstrate its production capacity and 
export growth potential. It refers to its share of world imports for products classified under 
CN 1602 32 and C N 1602 39 in Japan, Singapore, Korea, Hong Kong, China, Mauritius and South 
Africa. As explained by the EU, the "data on China 's share of imports in a handful of selected 
import country markets where China holds a 'major share ' is manifestly unreliable and  
unrepresentative. " There is no legal basis to look at import shares in other (selected) markets to 
determine whether Members have a PSI or SSI in the tariff lines being modified in the market of 
the applicant Member, in this case, the EU.   
1.22.  In any event, it is too late for China to now claim a PSI or SSI status for the First and 
Second Modification Packages . At the time of the First Modification Package, China did not claim a 
PSI. It made a claim of SSI only on 6 September 2006, without providing an y evidence of its 
alleged substantial interest in the tariff lines at issue. At the time of the Second Modification 
Package, China did not make a timely claim of interest, but waited three years before submitting 
its claim of a PSI on 9 May 2012.     
1.23.  Thailand recalls that paragraph 4 of the 1980 Procedures provides that claims of interest of 
a PSI or SSI should be made within ninety days following the circulation of the import statistics by 
the applicant Member, in this case, the EU.  Paragraph 5 of the Understanding on Article XXVIII 
provides that where a Member considers that it has a PSI or SSI, it shall communicate its claim in 
writing to the [applicant Member and the Secretariat]. It further p rovides that paragraph 4 of 
the 1980 Procedures "shall apply in these cases ". The Understanding on Article XXVIII is part of 
the GATT 1994,4 and is therefore legally binding.    
C. China 's argument that the EU 's SPS measure "tainted " the identification of 
Members that had a PSI or SSI within the meanin g of Ar ticle XXVIII of the 
GATT  1994 is incorrect  
1.24.  China claims that the three -year period preceding the EU 's notification of its intention to 
modify its tariff concessions is "tainted " by the EU 's import ban on poultry products. China argues 
that the refer ence period did not take into account the import ban that adversely affected its share 
of imports in the EU.  
1.25.  In particular, China contends that the import ban was a "discriminatory quantitative 
restriction " within the meaning of paragraph 7 of the Note Ad Article XXVIII that affected the 
exports that China could reasonably be expected to have made to the EU. In China 's view, as the 
                                               
4 See paragraph 1(c) (vi) of the General Agree ment on Tariffs and Trade 1994.  WT/DS492/R/Add.1  
 
- C-19 - 
 
  reference period was not representative, it could not have resulted in an accurate determination of 
the Members that ha d a SSI or PSI. China argues that the import ban, which had a limiting effect 
on importation by prohibiting imports of poultry products, was a "quantitative restriction " within 
the meaning of Article XI:1 of the GATT 1994. It further argues that the import  ban was a 
"discriminatory " quantitative restriction within the meaning of paragraphs 4 and 7 of Note Ad 
Article XXVIII because it treated imports from one WTO Member differently than it treated imports 
from other WTO Members, "irrespective of the ground f or such disparate treatment, and, in 
particular, whether such difference in treatment was justified or not ".         
1.26.  Paragraphs 4 and 7 of Ad Note to Article XXVIII provide that the determination of whether a 
Member has a PSI or SSI, respectively, s hould take into account whether "discriminatory 
quantitative restrictions " affected the share of imports a Member would have had in the absence of 
those discriminatory restrictions.   
1.27.  First, Thailand notes that the EU rebutted China 's claim that the  import ban should be 
characterised as a "quantitative restriction " on "importation " by explaining that Article XI should be 
interpreted in the light of the Ad Note to Article III. Accordingly, a measure that prohibits the sale 
of like domestic and foreign  products should be considered as an internal law or regulation 
regardless of whether enforcement of the measure takes place at the border.5    
1.28.  Second, Thailand agrees with the EU that the SPS measure is not a "discriminatory " 
measure. Measures that  apply different treatment to Members that are in different situations may 
be seen as non -discriminatory. In the case at hand, the EU 's regime applied the same or 
equivalent requirements to imported products as it did to domestic products. The only differe nce in 
treatment was to prohibit products that did not comply with the sanitary requirements and allow 
those that did comply. This difference in treatment is based on legitimate regulatory requirements 
and, therefore, does not constitute a "discriminatory " measure.   
D. China 's arguments that the allocation of most of the TRQs to Thailand and Brazil is 
inconsistent with Article XIII:1 and Article XIII:2 are incorrect  
1.29.  China argues that Article XIII:1 requires that exportation or importation of like pr oducts to 
or from all third countries must be "similarly prohibited or restricted ". It therefore argues that 
there can be no discrimination in the level of access to the TRQs.  China also argues that the EU 's 
allocation of the TRQs is inconsistent with the  chapeau of Art icle XIII:2, which requires 
WTO 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. " It 
argues that Members  that do not have a SSI "must still be afforded access to the TRQs (through 
the TRQs for all other countries) such that they obtain the share they might expect to have in the 
absence of the TRQs ".  To this end, the allocation of the TRQs must take into acc ount the 
comparative advantages of the WTO Members participating in the TRQ and the import ban in the 
representative period. Lastly, China argues that the EU acted inconsistently with  
Article XIII:2(d), second sentence, which requires that the shares of T RQs must be 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 affecti ng the trade in the product. "    
1.30.  As the Appellate Body has explained, the principle of non -discriminatory application 
governed by Article XIII:1, as applied to tariff quotas, means that "if a tariff quota is applied to 
one Member, it must be applied  to all... ".6  China argues that the allocation of the majority of the 
TRQs to Thailand and Brazil is inconsistent with Article XIII:1. As the EU explains, however, this 
provision governs access  to the TRQ, not the allocation  of shares in the TRQ to differ ent suppliers. 
Therefore, Article XIII:1 cannot be used as a basis to claim that the allocation of shares in the TRQ 
was inconsistent with this provision. As the EU also explains, Article XIII:1 requires that a TRQ be 
applied by a Member on a product -wide basis without discrimination as to the origin of the 
product. The TRQs established by the EU following the First and Second Modification packages do 
not discriminate on the basis of the origin of the products.  
                                               
5 Panel Report, EC – Asbestos , paras. 8.88 -8.93.    
6 Appellate Body Reports, EC – Bananas III (Article 21.5 - Ecuador II); EC – Bananas III (Article 21.5 - 
US), para. 337.  WT/DS492/R/Add.1  
 
- C-20 - 
 
  1.31.  The Appellate Body has explained in EC  – Bananas III (Article 21.5 - Ecuador: II); EC  - 
Bananas III (Article 21.5 - US)7 that: 
... 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 stipulate s a 
principle regarding the distribution of the tariff quota in the least 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 .  
Article XIII:2(d) allows for the case where a quota is allocated among supplying 
countries, either by way 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 Arti cle 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 (emphasis added).  
Footnote 408: If a Member allocates quota shares to Members with a substantial in terest 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 to 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.    
1.32.  In this case, the EU allocated specific TRQs as a me ans of compensation to two substantial 
suppliers (Thailand and Brazil) by agreement under Article XIII:2(d), first sentence, and in 
accordance with paragraph 6 of the Understanding on Article XXVIII. The EU did so based on the 
shares held by each of the Me mbers that had a SSI in each relevant tariff line during the same 
reference period that was used to determine the "all others " share in the TRQs. Thus, the share in 
each TRQ for "all others " was determined as a reflection of the shares allocated to Members  that 
had a SSI. The EU complied with Article XIII:2(d), first sentence, in allocating shares in the TRQ to 
the Members that had a SSI as well as to Members in the "all others " category. It follows that the 
EU respected the chapeau of Article XIII:2 both i n terms of the Members that had a SSI and of 
Members in the "all others " category.  
1.33.  Thailand notes that there is a TRQ in CN 1602 39 21 (processed duck, geese, guinea fowl 
meat, uncooked containing 57% or more of weight of poultry meat or offal) was  accorded 100% to 
Thailand. This allocation reflects the fact that during the relevant representative period, 100% of 
imports of these products in the EU came from Thailand. No other WTO Member had any share of 
the trade in these products even though there  were no restrictions in place at the time. In this 
situation, even a 100% TRQ can be consistent with the chapeau of Article XIII:2. The Appellate 
Body itself recognised this possibility when it stated in footnote 408: [The distribution of trade 
approachin g as closely as possible the trade that that Members may be expected to obtain in the 
absence of the restriction] ... is usually  done by allocating a share to a general "others " category 
for all suppliers other than Members with a substantial interest in s upplying the product. In 
situations where other Members are not expected to obtain a share of the trade, the importing 
Member, in casu , the EU is not required to allocate an "all others " category.   
1.34.  "Special factors " that may have affected trade in the product are only required to be taken 
into account in Article XIII:2(d), second sentence, which does not apply in this case . The term 
"special factors " does not appear in Article XIII:2(d), first sentence. It appears only i n 
Article  XIII:2(d), second s entence, to address situations where it is not possible to arrive at an 
agreement on the allocation of shares in a TRQ with Members that had a SSI. It is not necessary 
to conduct an analysis of what does (or does not) constitute a special factor as the con ditions in 
Article XIII:2, second sentence, do not apply in this case.   
                                               
7 Appellate Body Reports, EC – Bananas III (Article  21.5 - Ecuador II); EC – Bananas III (Article 21.5 - 
US), para. 338 and footnote 408.  WT/DS492/R/Add.1  
 
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  E. China 's claims under Article II:1 and Article I:1 of the GATT 1994 should be 
consequentially dismissed   
1.35.  China 's claim that the EU acted inconsistently with its obligations under Article II:1 of the 
GATT 1994 because it implemented changes in its Schedule even though those changes had not 
been certified by the Director -General is without merit. Certification is an administrative procedure 
that allows for the incorporation of modifications in the applicant Member 's Schedule. It is not a 
substantive requirement that must be completed before the modifications may enter into force.8 
1.36.  China 's claim that the EU acted inconsistently with its obligations under Article I:1 of the  
GATT 1994 because the EU granted market access to Thailand and Brazil in the TRQs and not to 
other Members, including China, is also without merit. The EU 's actions are consistent with its 
obligations to provide non -discriminatory treatment under Article XIII:1. Therefore, a harmonious 
interpretation of both non -discriminatory provisions requires that its actions also be considered as 
consistent with its obligations under Article I:1 of the GATT  1994.  
 
 
                                               
8 See EU 's first written submission citing Anwarul Hoda, Tariff negotiations and renegotiations under the 
GATT and the WTO , Cambridge University Press; 2001, p.115.    WT/DS492/R/Add.1  
 
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  ANNEX C -6 
EXECUTIVE SUMMARY THE ARGUMENTS OF THE  UNITED STATES   
EXECUTIVE SUMMARY OF THE U.S.  THIRD PARTY ORAL STATEMENT  
I. Introduction  
1. At the outset, we wish to note that certain of the claims and arguments in this dispute  
involve the procedures for modification or withdrawal of concessions and for cer tification of those 
changes that have long been applied by WTO Members, and before them, the Contracting Parties.  
Historically, there have been numerous discussions by Members to amend those procedures or 
introduce further refinements.   
2 .In 1980, the C ONTRACTING PARTIES approved the procedures for modification and the 
procedures  for rectification.  In 1995, WTO Members brought into effect the Understanding on the 
Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994 .  Despi te the 
limited agreement on refinement to these procedures achieved by Members over time, they 
nonetheless have served Members well.   
3. In the view of the United States, further elaboration of those procedures, therefore, should 
be undertaken by Members through negotiation , to the extent they find areas in which 
improvements are desirable.  We would invite the Panel to consider carefully in its report whether 
findings are necessary on all of the issues raised by the parties to the dispute and to tailor it s 
findings to those issues that will assist the parties in securing a positive solution to the dispute.    
II. The Panel May Dispose of China's Claim under GATT 1994 Article XXVIII:1 Relating 
to a "Substantial Interest" Without Reaching the Legal Issue  
4. China claims that the EU acted inconsistently with Article XXVIII:1 of the GATT 1994 by 
failing to recognize China as having a "principal supplying interest" or a "substantial interest" in 
tariff concessions for certain poultry and meat products and reject ing China's request to participate 
in negotiations on the EU's modification of such concessions.  These negotiations took place 
in 2006 and 2009 to 2012, respectively.  The United States wishes to comment on one legal issue 
and one key fact in relation to this claim.  
5. First, from a legal perspective, it is not clear that an alleged failure to follow the procedures 
in GATT 1994 Article XXVIII necessarily gives rise to a breach of that provision cognizable under 
the DSU.  Article XXVIII:1 establishes that a  WTO Member "may" modify or withdraw a concession 
following certain actions.  Those actions are "negotiation and agreement" with certain Members, 
"subject to consultation" with certain other Members.  Article XXVIII:3 then establishes that, if 
agreement wi th the first set of Members cannot be reached, the Member proposing "to modify or 
withdraw the concession shall, nevertheless, be free to do so."  If the proposing Member chooses 
to so act, the first and second set of Members "shall then be free" to withdr aw "substantially 
equivalent concessions" initially negotiated with that Member.  
6. This procedure, then, would appear to provide its own remedy for the withdrawal or 
modification of the concession by that proposing Member.  That is, the first and second s et of 
Members can rebalance their own concessions in light of the withdrawal or modification.  It could 
be viewed as incongruous to both permit a self -judging rebalancing of concessions under the 
Article XXVIII procedures and a claim for breach of the Arti cle XXVIII procedures.  And it is not 
clear how an alleged failure to follow a procedure resulting in a change to a Member's WTO 
Schedule  would constitute a "measure affecting the operation of any covered agreement taken 
within the territory of" the propos ing Member.  In substance, of course, a Member may potentially 
challenge the treatment accorded to imports, following a modification or withdrawal, pursuant to 
numerous Articles of GATT 1994, including Articles I, II, XI, and XIII.  
7. Even were a claim for  a procedural breach of Article XXVIII susceptible to action under the 
DSU, however, from the U.S. review of the parties' submissions it is not clear that China has set 
out a necessary fact to advance its claim under Article XXVIII:1.   WT/DS492/R/Add.1  
 
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  8. Specifically, th e United States understands that China asserts the inconsistency arises from 
the EU's failure to recognize China as having a "principal supplying interest" or a "substantial 
interest" in the relevant tariff concession.  Under the text of Article XXVIII:1, however, this 
assertion would not be enough.  
9. As mentioned, Article XXVIII:1 establishes that a Member proposing to modify or withdraw a 
concession may do so "by negotiation and agreement" with any Member having an initial 
negotiating right "and with any  other [Member] determined by the CONTRACTING PARTIES to 
have a principal supplying interest" and "subject to consultation with any other [Member] 
determined by the CONTRACTING PARTIES to have a substantial interest in such concession."  
Thus, by the very terms of Article XXVIII:1, a Member entitled to negotiate and agree is that 
"determined by the CONTRACTING PARTIES to have a principal supplying interest".  Likewise, the 
Member entitled to "consultation" on the proposed modification or withdrawal is that "determined 
by the CONTRACTING PARTIES to have a substantial interest."  
10. China has not established or even alleged that it was "determined by the CONTRACTING 
PARTIES" (to be understood as a reference to Ministerial Conference or General Council, or as 
delegated) to have a principal supplying interest or a substantial interest in any such concession.  
Nor does China allege that the EU accepted China's assertion of a substantial interest, which under 
the Procedures for Negotiations under Article XXVIII, co uld be deemed to constitute such a 
determination. Therefore, the United States does not understand the basis on which China 
considers that it could make a claim under Article XXVIII:1 in relation to a status that it does not 
even allege it had.  
11. As note d above, China's claim under Article XXVIII:1 raises a novel legal issue, one which 
has been discussed by the GATT Contracting Parties and which, pragmatically, did not result in 
review by a GATT panel.  As the United States understands the facts in this d ispute, the Panel may 
similarly decline to make a finding on this legal issue.  China has not asserted or established a fact 
that is a necessary element of its claim, even assuming, for the limited purposes of this analysis, 
that such a claim can be consid ered under the DSU.  
II. The Relationship between Article XIII and Article XXVIII  
12. The parties differ significantly in their approach to the obligations in Articles XIII and XXVIII 
and the relationship between the two.  The United States considers that these provisions address 
different situations and impose different requirements for a Member.  We would like to highlight 
certain key differences between Articles XXVIII and XIII.    
13. As discussed, Article XXVIII sets forth the procedural steps a Member  must take to "modify 
or withdraw a concession" set out in its Schedule to GATT 1994.  Once a Member completes the 
process specified in Article XXVIII, it is "free to" modify or withdraw the concession at issue – that 
is, to affect the legal obligation to which it commits in its Schedule, apart from whatever treatment 
it may actually accord to imports into its territory.   
14. If a proposing Member has modified or withdrawn the concessions without "agreement" of 
any Member with an initial negotiating right or that has been determined to have a principal 
supplying interest, the Member may be subject to a compensatory withdrawal of "substantially 
equivalent concessions" initially negotiated with that Member.  This compensatory withdrawal too 
occurs in relation  to the aggrieved Member's concessions set out in its GATT 1994 Schedule.  
There is no WTO obligation that requires any particular distribution or structure to the tariff 
commitments set out in a Member's Schedule, including any that may be expressed as a tariff rate 
quota.  
15. Article XIII:2 differs in important respects.  First, it applies not to the concessions in a 
Member's Schedule  but to the application  of restrictions to imports , including tariff -rate quotas.  
Article XIII:2 refers to a Member "appl ying import restrictions to any product"; the title of 
Article  XIII refers to "Non -Discriminatory Administration of Quantitative Restrictions"; and 
Article  XIII:1 refers to any "restriction … applied by any contracting party on the importation of 
any produ ct". 
16.  Second, as the obligations in Article XIII apply to the application or administration of 
restrictions on imports, they apply whenever a Member seeks to apply or administer such a WT/DS492/R/Add.1  
 
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  restriction.  That is, while the procedure in Article XXVIII comes to a close with the possible 
modification or withdrawal of concessions in the relevant Members' Schedules, the treatment of 
imports by a Member at any given time must comply with Article XIII, and other provisions that 
govern "treatment" of imports, such a s Articles I, II, III, or XI.  
17. Accordingly, the United States considers that the existence of a tariff concession in the form 
of a tariff -rate quota in a Schedule does not determine the WTO -consistency of the treatment of 
imports under a tariff -rate qu ota that is applied by a Member through a domestic tariff measure.  
As noted, a concession in a Member's GATT 1994 Schedule is not – at the level of the concession – 
subject to an ongoing WTO obligation.  Rather, a failure to accord to imports the treatmen t set out 
in the Schedule – such as concession for a particular Member expressed as a tariff -rate quota – 
would give rise to a claim under GATT 1994 Article II:1(b).  If a tariff -rate quota is imposed by a 
Member through a domestic tariff measure, the trea tment given to imports through that import 
restriction must conform to the requirements of Article XIII.   
18. A Member may then have to adjust its treatment of imports to ensure that it meets both its 
obligations under Article XIII (on non -discrimination)  and Article II (treatment no less favorable 
than that set out in its Schedule).  Because they are addressed to different situations, a Member 
could not justify its treatment of imports inconsistently with Article XIII by pointing to completion 
of the proc edures under Article XXVIII applicable to modifying tariff concessions in a GATT 1994 
Schedule.  Logically, nor would satisfying the obligation to treat imports in a non -discriminatory 
manner under Article XIII have relevance for the concessions in a Membe r's Schedule resulting 
from the procedures pursuant to Article XXVIII.  
EXECUTIVE SUMMARY OF RESPONSES OF THE UNITED STATES OF AMERICA TO THE PANEL'S QUESTIONS FOR 
THE THIRD PARTIES  
1. If China were dissatisfied with the EU's non -recognition of its status u nder Article XXVIII, its 
proper recourse was to the Ministerial Conference or the General Council.  It would not be for the 
Panel to determine whether those bodies had failed to make the proper determination, even aside 
from the fact that China has not eve n asked those bodies to make such a determination.  
2. As described above, Article XXVIII allows a Member to modify or withdraw a scheduled 
commitment as long as it negotiates and consults with the appropriate WTO Members.  According 
to the text of Article XXVIII and the Procedures for Negotiations under Article XXVIII , the Members 
having a right to participate in these negotiations and consultations as determined by the 
Contracting Parties at the start of the negotiations.  If the Contracting Parties did no t make such a 
determination with respect to a Member, that Member does not have recourse to the remedy 
provided for in paragraph 3 of Article XXVIII.  
3. Paragraph 7 to the Note Ad Article XXVIII establishes that the concept of "discriminatory 
quantitative restrictions" is one that the then -CONTRACTING PARTIES agreed for purposes of 
guiding their own  "judgment" on whether a Member would merit the status of having a "principal 
supplying interest" or a "substantial interest" .  In this, the Ad Article correspon ds to the language 
of Article XXVIII previously reviewed, which establishes that a Member's status for purposes of 
negotiations or consultations on proposed modifications of concessions is a matter reserved to the 
decision of the Ministerial Conference or General Council.  
4. Again, as elaborated in the U.S. third -party oral statement, this is not an interpretive issue 
for the Panel to resolve.   China has not established or even alleged that it was "determined by the 
CONTRACTING PARTIES" (to be understood a s a reference to Ministerial Conference or General 
Council, or as delegated) to have a principal supplying interest or a substantial interest in any such 
concession.   If China were dissatisfied with the EU's non -recognition of its status under 
Article  XXVIII, its proper recourse was to the Ministerial Conference or the General Council.   It 
would not be for the Panel to determine that those bodies had failed to make a determination, 
even aside from the fact that China has not even asked those bodies to make that determination.  
 
 
__________