RESTRICTED  
  
WT/DSB/M/417  
 
30 November 2018  
(18-7596) Page: 1/39 
Dispute Settlement Body  
27 August 2018    
 
MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 27 AUGUST  2018 
Chairperson: Ms. Sunanta Kangvalkulkij (Thailand)  
Prior to the adoption of the Agenda , the item concerning the adoption of the Panel Report in 
"Australia – Certain Measures Concerning  Trademarks, Geographical Indications and Other Plain 
Packaging Requirements Applicable to Tobacco Products and Packaging " (DS441) was removed from 
the proposed Agenda following the Dominican Republic's decision to appeal the Report. Also, the 
item concern ing the adoption of the Panel Report in the dispute: "United States – Countervailing 
Measures on Supercalendered Paper from Canada" (DS505) was removed from the proposed Agenda 
following the decision by the United States to appeal the Panel Report. Similar ly, the item concerning 
the adoption of the Panel Report in the dispute: "Ukraine – Anti-Dumping Measures on Ammonium 
Nitrate" (DS493) was removed from the proposed Agenda following the decision by Ukraine to appeal 
the Panel Report. Finally, the item conc erning the adoption of the Panel Report in the dispute: 
"Russia  – Measures Affecting the Importation of Railway Equipment and Parts Thereof" (DS499) was 
removed from the proposed Agenda following the decision by Ukraine to appeal the Panel Report.  
 
 
Table of Contents  
1   SURVEILLANCE OF IMPLEMENTATION OF RE COMMENDATIONS ADOPTE D BY  
 THE DSB  ................................ ................................ ................................ ..........................  3 
A.  United  States – Anti-dumping measures on certain hot -rolled steel products from  
Japan: Status report by the United  States  ................................ ................................ ..............  3 
B.  United  States – Section  110(5) of the US Copyright Act: Status report by  
the United  States  ................................ ................................ ................................ ................  4 
C.  European  Communities – Measures affecting the approval and marketing of biotech  
products: Status report by the European  Union ................................ ................................ ....... 4 
D.  United  States – Anti-dumping and countervailing measures on large residential  
washers from Korea: Status report by the United  States  ................................ ..........................  5 
E.  European  Union – Anti-dumping measures on biodiesel from Indonesia: Status  
report by the European  Union  ................................ ................................ ...............................  6 
F.  United  States – Certain methodologies and their application to anti -dumping  
proceedings involving China: Status report by the United  States  ................................ ...............  7 
2   UNITED  STATES – CONTINUED DUMPING AN D SUBSIDY OFFSET ACT  OF 
2000: IMPLEMENTATION  OF THE RECOMMENDATI ONS ADOPTED BY THE D SB ................  7 
A.  Statement by the European  Union  ................................ ................................ ....................  7 
3   EUROPEAN  COMMUNI TIES AND CERTAIN MEM BER STATES – MEASURE S 
AFFECTING TRADE IN L ARGE CIVIL AIRCRAFT:  IMPLEMENTATION OF T HE 
RECOMMENDATIONS ADOP TED BY THE DSB  ................................ ................................ .... 9 
A.  Statement by the United  States  ................................ ................................ .......................  9 WT/DSB/M/417  
 
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  4   STATEMENT BY THE  UNITED  STATES CONCE RNING ARTICLE  17.6 O F THE 
UNDERSTANDING ON RUL ES AND PROCEDURES GO VERNING THE SE TTLEMENT  
OF DISPUTES AND APPE LLATE REVIEW OF PANE L FINDINGS OF FACT,  
INCLUDING DOMESTIC L AW ................................ ................................ ..........................  10 
5   EUROPEAN  COMMUNI TIES AND CERTAIN MEM BER STATES – MEASURE S 
AFFECTING TRADE IN L ARGE CIVIL AIRCRAFT ................................ ...............................  25 
A.  Recourse to Article  21.5 of the DSU by the European  Union and Certain member  
 States: Request for the establishment of a panel  ................................ ................................ ..25 
6   CANADA – MEASURE S GOVERNING THE SALE  OF WINE ................................ .............  26 
A.  Request for the establishment of a panel by Australia  ................................ ........................ 26 
7   UNITED  STATES – SAFEGUARD MEASURE ON  IMPORTS OF CRYSTALL INE 
SILICON PHOTOVOLTAIC PRO DUCTS  ................................ ................................ .............  27 
A.  Request for the establishment of a panel by Korea  ................................ ............................ 27 
8   UNITED  STATES – SAFEGUARD MEASURE ON  IMPORTS OF LARGE  
RESIDENTIAL WASHERS  ................................ ................................ ................................  28 
A.  Request for the establishment of a panel by Korea  ................................ ............................ 28 
9   AUSTRALIA – CERT AIN MEASURES CONCERN ING TRADEMARKS,  
GEOGRAPHICAL INDICAT IONS AND OTHER PLAIN  PACKAGING  
REQUIREMENTS APPLICA BLE TO TOBACCO PRODU CTS AND PACKAGING  ......................  29 
B.  Report of the Panel ................................ ................................ ................................ ........ 29 
C.  Report of the Panel  ................................ ................................ ................................ .......29 
10   INDONESIA – SAFEGUA RD ON CERTAIN IRON O R STEEL PRODUCTS  ......................  31 
A.  Report of the Appellate Body and Report of the Panel ................................ ........................ 31 
B.  Report of the Appellate Body and Report of the Panel ................................ ........................ 31 
11   APPELLATE BODY APPOINTMENTS: PROPOS AL BY ARGENTINA; AUS TRALIA; THE 
PLURINATIONAL STATE OF BOLIVIA; BRAZIL; CANADA; CHILE; CHINA ; COLOMBIA; 
COSTA  RICA; DO MINICAN REPUBLIC; EC UADOR; EL  SALVADOR; THE EUROPEAN  UNION; 
GUATEMALA; HONDURAS;  HONG  KONG, CHINA; I CELAND; INDIA; INDON ESIA; ISRAEL; 
KAZAKHSTAN; KOREA; M EXICO; NEW  ZEALAND; NICARAGUA; NORWAY; P AKISTAN; 
PANAMA; PARAGUAY; PE RU; THE RUSSIAN  FEDE RATION; SINGA PORE; SWITZERLAND; 
THE SEPARATE CUSTOMS  TERRITORY OF TAIWAN , PENGHU, KINMEN AND  MATSU; 
TURKEY; UKRAINE; URU GUAY; THE BOLIVARIAN  REPUBLIC OF VENEZUE LA AND 
VIET  NAM  ................................ ................................ ................................ .......................  35 
12   STATEMENT BY TH E CHAIRPERSON REGARD ING THE POSSIBLE  
REAPPOINTMENT OF ONE  APPELLATE BODY MEMB ER ................................ ....................  38 
 
  WT/DSB/M/417  
 
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1  SURVEILLANCE OF  IMPLEMENTATION OF R ECOMMENDATIONS ADOPT ED BY THE  DSB 
A.  United  States – Anti-dumping measures on certain hot -rolled steel products from Japan: Status 
report by the United  States (WT/DS184/15/Add.186)  
B.  United  States – Section  110(5) of the US Copyright  Act: Status report by the United  States 
(WT/DS160/24/Add.161)  
C.  European  Communities – Measures affecting the approval and marketing of biotech products: 
Status report by the European  Union (WT/DS291/37/Add.124)  
D.  United  States – Anti-dumping and coun tervailing measures on large residential washers from 
Korea: Status report by the United  States (WT/DS464/17/Add.8)  
E.  European  Union – Anti-dumping measures on biodiesel from Indonesia: Status report by the 
European  Union (WT/DS480/8)  
F.  United  States – Certain methodologies and their application to anti -dumping proceedings 
involving China: Status report by the United  States (WT/DS471/17)  
1.1.  The Chairperson  noted that there were six  sub-items under this Agenda item concerning status 
reports submitted by delegations pursuant to Article  21.6 of the DSU. She recalled that Article  21.6 
required that: "[u]nless the DSB decides otherwise, the issue of implementati on of the 
recommendations or rulings shall be placed on the Agenda of the DSB meeting after six  months 
following the date of establishment of the reasonable period of time and shall remain on the DSB's  
Agenda until the issue is resolved". Under this Agenda  item, she invited delegations to provide 
up-to-date information about their compliance efforts. She also reminded delegations that, as 
provided for in Rule  27 of the Rules of Procedure for DSB meetings: "[r]epresentatives should make 
every effort to avoid  the repetition of a full debate at each meeting on any issue that has already 
been fully debated in the past and on which there appears to have been no change in 
Members'  positions already on record".  
A.  United  States – Anti-dumping measures on certain h ot-rolled steel products from 
Japan: Status report by the United  States (WT/DS184/15/Add.186)  
1.2.  The Chairperson  drew attention to document WT/DS184/15/Add.186, which contained the 
status report by the United  States on progress in the implementation of the DS B's recommendations 
in the case concerning US  anti-dumping measures on certain hot -rolled steel products from Japan.  
1.3.  The representative of the United  States  said that the United  States had provided a status report 
in this dispute on 16  August  2018, in acco rdance with Article  21.6 of the DSU. The United  States 
had addressed the DSB's recommendations and rulings with respect to the calculation of 
anti-dumping margins in the hot -rolled steel anti -dumping duty investigation at issue. With respect 
to the recomme ndations and rulings of the DSB that had yet to be addressed, the US  Administration 
would work with the US  Congress with respect to appropriate statutory measures that would resolve 
this matter.  
1.4.  The representative of Japan  said that his country thanked the  United  States for the latest status 
report and the statement made at the present meeting. Japan, once again, called on the 
United  States to fully implement the DSB's recommendations and rulings so as to resolve this 
matter.  
1.5.  The DSB took note  of the statem ents and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/417  
 
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  B.  United  States – Section  110(5) of the US Copyright Act: Status report by the 
United  States (WT/DS160/24/Add.161)  
1.6.  The Chairperson  drew attention to document WT/DS160/24/Add.161, which  contained the 
status report by the United  States on progress in the implementation of the DSB's recommendations 
in the case concerning Section  110(5) of the US Copyright Act.  
1.7.  The representative of the United  States  said that the United States had provided  a status report 
in this dispute on 16  August  2018, in accordance with Article  21.6 of the DSU. The US  Administration 
would continue to confer with the European  Union, and to work closely with the US  Congress, in 
order to reach a mutually satisfactory reso lution of this matter.  
1.8.  The representative of the European  Union  said that his delegation thanked the United  States 
for its status report and the statement made at the present meeting. The EU referred to its previous 
statements made under this Agenda item, and reiterated that it would like to resolve this case as 
soon as possible.  
1.9.  The representative of China  said that the United States had submitted the 162nd status report 
in this dispute, and this report was not substantively different from the status repor ts presented by 
the United  States at previous DSB meetings, including the first status report, which had been 
submitted in November  2004. The United States had not provided any further implementation 
updates at the present meeting. China was curious about the reasons for the US failure to implement 
the DSB's  rulings and recommendations for more than ten  years. As result of US non -compliance, 
Section  110(5) of the US Copyright Act, which the Panel had found to be inconsistent with the 
requirements of the Ber ne Convention and the TRIPS  Agreement, was still in effect. The 
United  States had failed to provide intellectual property right holders the minimum standards of 
protection as required by the TRIPS Agreement. The United States remained the only WTO Member 
who failed to implement the DSB's recommendations and rulings under the TRIPS Agreement, this 
long after the expiry of the reasonable period of time. Article  II:2 of the Marrakesh Agreement 
Establishing the WTO provided that "[t]he agreements and associated  legal instruments included in 
Annexes  1, 2 and  3 are binding on all Members ". China, thus, urged the United States to faithfully 
honour its commitments under the DSU and the TRIPS Agreement by implementing the DSB's 
recommendations and rulings in this dis pute. China, once again, suggested that the United  States 
could include, in its next status report, the specific reasons for its failure to implement the DSB's 
recommendations and rulings, for this long.  
1.10.   The representative of the United  States  said that by  intervening under this item, China 
attempted to give the appearance of concern for intellectual property rights. At recent DSB meetings, 
the United  States had discussed at some length some significant and trade distorting shortcomings 
in China's  treatment  of intellectual property. If China was interested in discussing the protection of 
intellectual property rights, the United  States was certainly willing to cooperate by bringing that 
matter to the DSB's attention again. For now, the United  States could say  that, as the companies 
and innovators of China and other Members well knew, the intellectual property protection that the 
United  States provided within its own territory equalled or surpassed that of any other Member. 
Indeed, as China also well knew, none  of the damaging technology transfer practices of China that 
Members had discussed at recent DSB meetings were practices that Chinese companies or 
innovators faced in the United  States.  
1.11.   The representative of China  said that the United States intervened aga in to shift Members' 
focus away from this Agenda item. The matter at issue under this Agenda item was whether the 
United  States had implemented the DSB's recommendation and rulings in this dispute. The answer 
was negative. China, thus, continued to urge th e United States to comply with the DSB's rulings.  
1.12.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
C.  European  Communities – Measures affecting the approval and marketing of biotech 
products: Status report by the European  Union (WT/DS291/37/Add.124)  
1.13.   The Chairperson  drew attention to document WT/DS291/37/Add.124, which contained the 
status report by the European  Union on progress in the implementation of the DSB's WT/DSB/M/417  
 
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  recommendations in the case concerning  measures affecting the approval and marketing of biotech 
products.  
1.14.   The representative of the European  Union  said that, on 3  August  2018, the European 
Commission had adopted five  authorizations for genetically modified organisms for food and feed 
use, name ly: two  new genetically modified maize (corn)1, the renewal of two genetically modified 
maize (corn)2 and one genetically modified sugar beet3. The EU continued to progress with the 
authorizations where the European Food Safety Authority had finalized its scientific opinion and had 
concluded that there were no safety concerns. The EU remained committed to act in line with its 
WTO obligations. As had been stated previously, the EU recalled that the EU approval system was 
not covered by the DSB's recommendati ons and rulings.  
1.15.   The representative of the United  States  said that the United  States thanked the 
European  Union for its status report and its statement at the present meeting. The United  States 
remained concerned with the EU's measures affecting the approv al of biotech products. Delays in 
approvals continued to affect the dozens of applications that had been awaiting approval. Further, 
even when the EU finally approved a biotech product, EU member States continued to impose bans 
on the supposedly approved p roduct. As the United  States had discussed at prior meetings, the EU 
had adopted legislation that permitted EU member States to "opt out" of certain approvals, even 
where the European Food Safety Authority (EFSA) had concluded that the product was safe. At  least 
17 member States, as well as certain regions within EU member States, had submitted requests to 
opt out of EU approvals. The United  States again urged the EU to ensure that all of its measures 
affecting the approval of biotech products, including me asures adopted by individual EU member 
States, were based on scientific principles, and that decisions were taken without undue delay.  
1.16.   The representative of the European  Union  said that concerning the US  statement, his 
delegation wished to inform the DSB t hat no EU member State had imposed any ban. Moreover, the 
opt-out directive, as the United  States had just called it, provided that an EU member State could 
adopt measures prohibiting or restricting cultivation only if such measures were in line with EU la w, 
and if they were reasoned, proportional, non -discriminatory and based on compelling grounds. The 
EU also reminded the DSB that the opt -out directive was not covered by the DSB's  recommendations 
and rulings.  
1.17.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
D.  United  States – Anti-dumping and countervailing measures on large residential 
washers from Korea: Status report by the United  States (WT/DS464/17/Add.8)  
1.18.   The Chairperson  drew attention to document W T/DS464/17/Add.8, which contained the 
status report by the United  States on progress in the implementation of the DSB's recommendations 
in the case concerning anti -dumping and countervailing measures on large residential washers from 
Korea.  
1.19.   The representat ive of the United  States  said that the United  States had provided a status 
report in this dispute on 16  August  2018, in accordance with Article  21.6 of the DSU. On 
15 December  2017, the United  States Trade Representative had requested that the US  Departmen t 
of Commerce make a determination under Section  129 of the Uruguay Round Agreements Act to 
address the DSB's  recommendations relating to the Department's countervailing duty investigation 
of washers from Korea. On 18  December  2017, the Department of Comme rce had initiated a 
proceeding to make such determination. Following initiation, Commerce had issued initial and 
supplemental questionnaires seeking additional information. On 4  April 2018, Commerce had issued 
a preliminary determination revising certain a spects of its original determination. Following issuance 
of the preliminary determination, Commerce had provided interested parties with the opportunity to 
submit comments on the issues and analysis in the preliminary determination and rebuttal 
comments. C ommerce had reviewed those comments and rebuttal comments and had taken them 
into account for purposes of preparing the final determination. On 4  June 2018, Commerce had 
issued a final determination, in which Commerce had revised certain aspects of its ori ginal 
                                                
1 MON 87427xMON89034xNK603 and 1507x59122xMON810xNK603.  
2 DAS-59122 -7 and GA21.  
3 H7-1. WT/DSB/M/417  
 
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  determination. Specifically, Commerce had revised the analysis underlying the CVD determination, 
as it pertained to certain tax credit programs, in accordance with findings adopted by the DSB. The 
United  States continued to consult with interested pa rties on options to address the 
recommendations of the DSB  relating to anti -dumping measures challenged in this dispute.  
1.20.   The representative of Korea  said that his country thanked the United  States for its status 
reports and statement made at the present me eting. Korea noted that although the United States 
had informed the DSB that the US  Department of Commerce had issued a final determination to 
address the DSB's  recommendations and rulings, Korea questioned whether the results of the final 
determination pr operly reflected the DSB's recommendations and rulings. At the same time, Korea 
wished to reiterate its serious concern about the lack of implementation efforts regarding the 
anti-dumping measures at issue, more than 23  months after the adoption of the Pan el and Appellate 
Body Reports in this dispute. In this regard, Korea, once again, urged the United  States to faithfully 
implement the DSB's recommendations and rulings in this dispute to fully comply with its obligations 
under the covered agreements.  
1.21.   The representative of Canada  said that her country was concerned that the United  States had 
not implemented the DSB's recommendations and rulings in this dispute. In particular, Canada was 
deeply disappointed that, despite the expiry of the reasonable period of  time, the United  States 
continued to collect cash deposits from Canadian exporters based on a methodology that had been 
found to be "as such" inconsistent with WTO obligations in this dispute.  
1.22.   The representative of the United  States  said that the United  States had explained to Korea 
the special challenges arising from the recommendations in this dispute. Nevertheless, Korea had 
requested authorization pursuant to Article  22.2 of the DSU to suspend concessions and other 
obligations. Korea's decision to proc eed in that regard was disappointing and not constructive. As 
the United  States had objected to the level of suspension proposed by Korea, the matter had been 
referred to arbitration pursuant to Article  22.6 of the DSU.  
1.23.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
E.  European  Union – Anti-dumping measures on biodiesel from Indonesia: Status report 
by the European  Union (WT/DS480/8)  
1.24.   The Chairperson  drew attention to document WT/DS480/8, which contained the status report 
by the European  Union on progress in the implementation of the DSB's recommendations in the case 
concerning anti -dumping measures on biodiesel from Indonesia.  
1.25.   The representative of t he European  Union  said that his delegation wished to remind the DSB 
that the reasonable period of time within which the EU had to bring its measures into compliance 
with the DSB's recommendations and rulings would expire on 28  October  2018. The EU intended  to 
comply with the DSB's recommendations and rulings in this dispute within the agreed reasonable 
period of time, i.e. , no later than 28  October  2018. On 28  May 2018, the European Commission had 
reopened the anti -dumping investigation in this case by publ ishing a Notice in the Official Journal of 
the EU (OJ  C 181, 28  May 2018, page  5). On 24  July 2018, the European Commission had disclosed 
the findings of this investigation to interested parties who had been given the opportunity to provide 
their comments.  The relevant procedures based on the said Notice were ongoing and were expected 
to be finalized in the near future, and in any event before the expiry of the reasonable period of 
time. 
1.26.   The representative of Indonesia  said that her country took note of the  EU status report in this 
dispute. Indonesia would further discuss this matter with the EU.  
1.27.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/417  
 
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  F.  United  States – Certain methodologies and their application  to anti -dumping 
proceedings involving China: Status report by the United  States (WT/DS471/17)  
1.28.   The Chairperson  drew attention to document WT/DS471/17, which contained the status report 
by the United  States on progress in the implementation of the DSB's rec ommendations in the case 
concerning certain methodologies and their application to anti -dumping proceedings involving China.  
1.29.   The representative of the United  States  said that the United  States had provided a status 
report in this dispute on 16  August  2018,  in accordance with Article  21.6 of the DSU. As explained 
in that report, the United  States continued to consult with interested parties on options to address 
the recommendations of the DSB.  
1.30.   The representative of China  said that his country thanked the Uni ted States for its status 
report and the statement made at the present meeting. China was, however, very disappointed with 
the status report and was deeply concerned that no apparent measure had been taken by the 
United  States to implement the recommendati ons and rulings of the DSB in this dispute. Pursuant 
to the award of the DSU Article  21.3(c) arbitration, the reasonable period of time for implementing 
the DSB's  recommendations and rulings had already expired on  22 August  2018. China recalled that 
in the  DSU Article  21.3(c) proceedings, the United States had indicated its intention to undertake 
Section  123 and Section  129 proceedings to address the DSB's recommendations and rulings. 
Nevertheless, the status report submitted by the United States had indica ted that neither 
Section  123, nor Section  129 proceedings had been officially initiated, and no concrete measure or 
action, other than "consulting with the interested parties", had been taken to address the DSB's  
recommendations and rulings. China emphasiz ed that the DSB had adopted the recommendations 
and rulings in this dispute on  22 May 2017, and more than 15  months had passed since then. The 
United  States was, however, still in the process of "consulting with interested parties on options to 
address the  recommendations of the DSB", thus, no substantive effort and progress had been made 
by the United States to fulfil its implementation obligation. China, once again, urged the 
United  States to faithfully implement the DSB's recommendations and rulings in t his dispute to fully 
comply with its obligations under the covered agreements. China reserved its right to take further 
action in accordance with the WTO rules.  
1.31.   The representative of the United  States  said that the United  States took note of China's 
statem ent and would convey it to capital. The United  States was willing to discuss this matter with 
China on a bilateral basis. To be clear, however, it was incorrect to suggest that the United  States 
had taken no action. As the United States had reported to the  DSB, the United  States continued to 
consult with interested parties on options to address the recommendations of the DSB. That internal 
process was ongoing.  
1.32.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meetin g. 
2  UNITED  STATES – CONT INUED DUMPING AND SU BSIDY OFFSET ACT OF  2000: 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE  DSB 
A.  Statement by the European  Union  
2.1.  The Chairperson  said that this item was on the Agenda of the present meeting at the request 
of the European  Union, and invited the representative of the EU to speak.  
2.2.  The representative of the European  Union  said that his delegation requested, once again, that 
the United  States stop transferring anti -dumping and countervailing duties to the US indus try. Every 
disbursement that still took place was clearly an act of non -compliance with the DSB's  
recommendations and rulings. The EU renewed its call on the United  States to abide by its clear 
obligation under Article  21.6 of the DSU to submit status repo rts in this dispute. The EU would 
continue to place this item on the Agenda as long as the United States had not implemented the 
WTO ruling.  
2.3.  The representative of Brazil  said that her country thanked the EU for keeping this item on the 
Agenda of the DSB. A s an original party to the Byrd Amendment dispute, Brazil referred to its 
previous statements made on this matter. Specifically, concerning the continuation of illegal  WT/DSB/M/417  
 
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  disbursements, which despite allegations to the contrary, continued to this day ten  years after the 
repeal act; these should cease immediately. Brazil thus renewed its call on the United States to fully 
comply with the DSB's recommendations and rulings in this dispute. Until then, the United  States 
was under the obligation to submit status re port. 
2.4.  The representative of Chile said that his country thanked the EU for the statement made under 
this Agenda item, which it supported.  
2.5.  The representative of Canada  said that her country thanked the EU for keeping this item on 
the Agenda of the DSB. Can ada agreed with the EU that the Byrd Amendment remained subject to 
the surveillance of the DSB until the United  States ceased to administer it.  
2.6.  The representative of the United  States  said that as the United  States had noted at previous 
DSB meetings, the D eficit Reduction Act – which included a provision repealing the Continued 
Dumping and Subsidy Offset Act of  2000 – had been enacted into law in February  2006. Accordingly, 
the United  States had taken all actions necessary to implement the DSB's  recommendat ions and 
rulings in these disputes. The United  States recalled, furthermore, that the EU had acknowledged 
that the Deficit Reduction Act did not permit the distribution of duties collected on goods entered 
after 1  October  2007, more than 10  years ago. With  respect to the EU's request for status reports 
in this matter, as the United  States had already explained at previous DSB meetings, there was no 
obligation under the DSU to provide further status reports once a Member announced that it had 
implemented the  DSB recommendations and rulings, regardless of whether the complaining party 
disagreed about compliance. And as the United  States had noted many times previously, the EU had 
demonstrated repeatedly it shared this understanding, at least when it was the  responding party in 
a dispute.  
2.7.  Once again, this month the EU had provided no status report for disputes in which there was 
a disagreement between the parties on the EU's compliance. Once again, the EU had not submitted 
a status report this month in the "E U – Large Civil Aircraft" dispute (DS316), despite the fact that 
the DSB had recently adopted two further reports finding that the EU had not complied. The 
United  States failed to see how the EU's behaviour was consistent with the alleged systemic view it 
had been espousing under this item for more than 10  years. As the EU was aware, the United  States 
had announced in this dispute that it had implemented the DSB's recommendations and rulings. If 
the EU disagreed, there would simply appear to be a disagreeme nt between the parties to the dispute 
about the situation of compliance. The United  States took note of Canada's support for the EU's 
decision to place this item on the DSB  Agenda this month. In light of Canada's position, the 
United  States would expect Ca nada to object to the failure by a responding Member to place on the 
DSB Agenda any dispute where Canada considered that Member not to be in compliance. This 
situation could include "China – Cellulose Pulp" (DS483). Based on Canada's statement under this 
item, the United  States observed that a decision by Canada not to place its dispute with China on 
the DSB Agenda, or object to that failure, could be understood as agreement with a WTO Member's 
claim of compliance. The United States asked if it should under stand that to be the implication of 
Canada's st atement at the present meeting.  
2.8.  The representative of the European  Union  said that the United  States had just stated that the 
EU had failed to provide status reports on one or more disputes. The EU disagreed w ith that 
statement. The EU had provided status reports for all cases, in which it was involved. For the present 
meeting of the DSB, these were: the GMO case and the Biodiesel from Indonesia case. With regard 
to the US  statement referring to the Airbus case , the EU would provide a more detailed response 
under the relevant Agenda item.  
2.9.  The representative of Canada  said that her country, like the EU, disagreed with the US claim 
of compliance in this dispute. Therefore, Canada supported the EU's decision to rai se the issue of 
implementation so that the it remained subject to the DSB's surveillance. The United  States had 
taken the same course of action in disputes where it was the complaining party and it disagreed with 
the responding party's claim of compliance.  For example, DS413 had been placed on the Agenda for 
many meetings because the United  States had disagreed with the responding party's claim of 
compliance. Finally, Canada noted that its statement made no reference to the subject of status 
reports.  WT/DSB/M/417  
 
- 9 - 
 
  2.10.   The re presentative of the United  States  said that the United States appreciated Canada's  
clarification that it was not making a suggestion with regard to providing status reports. A Member 
was certainly free to place an item on the agenda of the DSB, but the que stion was whether a 
Member was required to provide a status report in a dispute once it had claimed compliance, and 
the United States had made clear it was not.  
2.11.   The representative of Brazil  said that his country was fortunately not mentioned by the 
United  States in its rebuttal statement, but perhaps to go one step beyond the procedural discussion 
that Members were having, which was important, whether Members were or were not obliged to 
present a status report once they had claimed compliance. The motive by  the original complainants 
for continuing to place the item on the Agenda, and this was a substantive issue, was that 10  years 
after the Repeal Act, as the United States had just mentioned, the United  States continued to make 
disbursements to the petitione rs of the anti -dumping countervailing investigations. This was the 
issue and it would be too easy if a country could simply claim, "I complied", while the core of the 
dispute still remained in the form of continuous and monthly disbursements in the million s of dollars. 
This was a reason to keep the item on the Agenda.  
2.12.   The DSB took note  of the statements.  
3  EUROPEAN  COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN LARGE CIVIL  AIRCRAFT: IMPLEMENT ATION OF THE RECOMME NDATIONS 
ADOPTED BY THE DSB  
A.  Statement by the United  States  
3.1.  The Chairperson  said that this item was on the Agenda of the present meeting at the request 
of the United  States, and invited the representative of the United States to speak.  
3.2.  The representative of the United  States  said that at the two  prior DSB meetings, the 
United  States had noted that the European  Union had not provided a status report concerning the 
dispute "EU – Large Civil Aircraft" (DS316). The EU had failed to provide such a report despite the 
recent adoptio n by the DSB of panel and appellate reports finding that the EU had failed to comply 
with the DSB's  recommendations to bring its subsidies for Airbus into compliance with WTO rules. 
Members would recall that for many years, and again this month, the EU had  taken the position 
that, under DSU Article  21.6, a responding party Member was required to provide a status report 
whenever a complaining party Member disagreed with the responding party's claim that it had 
complied. And yet, in this dispute (DS316), the United  States disagreed with the EU's most recent 
claim that it had complied. The United  States had therefore requested the WTO arbitrator to resume 
its work to determine the level of countermeasures in this dispute.4 
3.3.  Given the disagreement on compliance b etween the parties, the EU should, to be consistent 
with the view it had taken when it was a complaining party, now be providing status reports. Instead, 
now that the EU was a responding party, the EU was choosing to contradict the reading of DSU  
Article  21.6 it had long promoted. The EU's purported rationale was that it need not provide a status 
report because it was pursuing a second compliance panel under DSU Article  21.5. But as the 
United  States had explained at past DBS meetings, there was nothing in DSU Article  21.6 to support 
this position. In short, the conduct of every Member when acting as a responding party, including 
the EU, showed that WTO Members understood that a responding party had no obligation under DSU 
Article  21.6 to continue supplying status reports once that Member announced that it had 
implemented the DSB's recommendations. As the EU allegedly disagreed with this position, it should 
welcome the opportunity the United States was affording it to update the DSB on the status of its 
lengthy implementation efforts.  
3.4.  The representative of the European  Union  said that as his delegation had indicated in previous 
meetings, there was a difference between the Airbus case and the Byrd Amendment case. In the 
Byrd Amendment case, the dispute had been  adjudicated and there were no further compliance 
proceedings pending. Under Article  21.6 of the DSU, the issue of implementation should remain on 
the DSB's Agenda until the issue was resolved. In the Byrd Amendment case, the EU could not agree 
with the US ' assertion that it had implemented the DSB's recommendations and rulings. Therefore, 
                                                
4 See WT/DS316/37.  WT/DSB/M/417  
 
- 10 - 
 
  the issue remained unresolved for the purposes of Article  21.6 of the DSU. As to the Airbus case, 
when the Appellate Body Report on compliance had been issued, the EU had  notified to the WTO a 
new set of measures in a compliance communication, tabled at the DSB meeting of 28  May 2018.  
3.5.  With respect to the measures included in that communication, the United  States had expressed 
a view that the EU had not yet fully complied w ith the DSB's recommendations and rulings. In 
response, the EU had requested, on 29  May 2018, consultations with the United  States under 
Articles  4 and  21.5 of the DSU. These consultations had failed to resolve the disagreement, the EU 
was thus requesting the establishment of a compliance panel. Therefore, compliance proceedings in 
this dispute were still ongoing.  
3.6.  The DSB took note  of the statements.  
4  STATEMENT BY THE UNI TED STATES CONCERNIN G ARTICLE  17.6 OF TH E 
UNDERSTANDING ON RUL ES AND PROCEDURES GO VERNIN G THE SETTLEMENT OF 
DISPUTES AND APPELLA TE REVIEW OF PANEL F INDINGS OF FACT, INC LUDING DOMESTIC 
LAW 
4.1.  The Chairperson  said that this item was on the Agenda of the present meeting at the request 
of the United  States, and invited the representative of the Unit ed States to speak.  
4.2.  The representative of the United  States  said that the United  States had requested this Agenda 
item to draw Members' attention to an important systemic issue with significant implications for the 
operation of the dispute settlement syste m: Article  17.6 of the DSU and appellate review of panel 
findings of fact, including domestic (or municipal) law. The DSU reflected Members' agreement on 
the functions assigned to panels and the Appellate Body. In DSU Article  11, WTO Members had 
agreed tha t "a panel should make an objective assessment of the matter before it, including an 
objective assessment of the facts of the case and the applicability of and conformity with the relevant 
covered agreements". In other words, "the matter" in a dispute cons isted of the facts and the legal 
claims, and WTO panels were to make factual and legal findings. In Article  17.6 of the DSU, Members 
had agreed that the Appellate Body would have a significantly more limited role than panels. The 
DSU explicitly provided th at "[a]n appeal shall be limited to issues of law covered in the panel report 
and legal interpretations developed by the panel" . Yet, despite this clear, unambiguous text of 
Article  17.6, the Appellate Body had consistently reviewed and even reversed panel  fact-finding. It 
had done so under different legal standards that it had had to invent, and it had reached conclusions 
that were not based on panel factual findings or undisputed facts. Through this statement at the 
present meeting, the United  States woul d discuss two particular issues of concern relating to the 
Appellate Body's review of panel findings of fact. First, the United States would review the relevant 
provisions of the DSU to explain the Appellate Body's lack of authority to review a panel's fin dings 
of facts. The invention of an authority to review panel fact -finding, contrary to the DSU, had added 
complexity, duplication, and delay to every WTO dispute. Second, the United States would explain 
that the Appellate Body had compounded the error by asserting that it could review panel findings 
concerning the meaning of a Member's municipal law, which was the key fact to be demonstrated in 
any dispute.  
4.3.  First, appellate review of facts was contrary to the Appellate Body's limited authority under the 
DSU. The concerns involving appellate review of municipal law were just one symptom of a broader 
departure by the Appellate Body from the terms agreed by Members in the DSU. The fundamental 
issue was that the DSU explicitly limited the scope of an appeal, and there was no basis in the DSU 
for the Appellate Body to review a panel's findings of facts. Members had agreed in the DSU to 
expressly limit the authority of the Appellate Body to legal findings by a panel, not factual ones. 
Indeed, it was difficult to  see how Article  17.6 of the DSU could be any clearer: " An appeal shall be 
limited to issues of law covered in the panel report and legal interpretations developed by the panel ". 
In fact, in an early report, the Appellate Body had con ceded as much. It had stated that: "Findings 
of fact, as distinguished from legal interpretations or legal conclusions, by a panel are, in principle, 
not subject to review by the Appellate Body ".5 However, the Appellate Body at the same time had 
                                                
5 "EC – Measures Concerning Meat and Meat Products (Hormones) ", WT/DS26/AB/R, WT/DS27/AB/R, 
para. 132. WT/DSB/M/417  
 
- 11 - 
 
  asserted t hat there was a "standard of review" applicable for panels in respect of "the ascertainment 
of facts" under the relevant covered agreements.6 
4.4.  The Appellate Body's approach had skipped over the key threshold question: how, in light of 
the limitation of appe als in Article  17.6 of the DSU to "issues of law and legal interpretations" had 
the Appellate Body been authorized to "review" a panel's "ascertainment of facts"? This question 
needed to be addressed and resolved before moving on to determine what would be  the "standard" 
for any such review. But the Appellate Body had not engaged on this threshold question. It had not 
explained the basis for its assumption that it could review a panel's findings of fact when the DSU 
expressly limited the Appellate Body's re view to "issues of law and legal interpretations ".7 Then, 
even aside from the lack of any basis for the Appellate Body to review a panel's factual findings, 
there was a real question about what the Appellate Body considered to be the "standard of review" 
for a panel's factual findings. Not surprisingly, there was no provision in the DSU that referred to a 
"standard of review" for a panel's factual findings, since the DSU did not provide for the Appellate 
Body to conduct any such review.  
4.5.  Faced with this lack  of any agreed "standard of review," the Appellate Body had asserted that 
Article  11 of the DSU provided such a standard. In so doing, however, the Appellate Body had again 
ignored the text of the DSU and had simply asserted that the DSU text had said some thing different 
from what Members had agreed. The language in Article  11 of the DSU that the Appellate Body had 
relied upon is: " a panel should make an objective assessment of the matter before it, including an 
objective assessment of  the facts of the case ". Key to this text was the word "should". Members 
were all familiar with the difference between "should" and "shall" and chose carefully whether to use 
"should" or "shall" in particular parts of the agreements they negotiated. In fac t, Members had been 
known to spend weeks or even longer negotiating over exactly this point – whether to use "should" 
or "shall ". And in the DSU, Members had chosen to use "should" in 21  instances, and to use the 
word "shall" in 259  instances. Yet, in desc ribing the text of Article  11, the Appellate Body had not 
engaged on this important textual issue. Instead, the Appellate Body had simply referred to this 
"should make" language as a "mandate" and a "requirement" for panels. To the contrary, the 
decision o f WTO Members to use the term "should" indicated that Members had not intended to 
create a legal obligation subject to review, a conclusion that was directly reinforced by the limitation 
on appeals to issues of law in Article  17.6. From its assertion that "should make" set out a "mandate" 
and a "requirement", the Appellate Body had proceeded to state: "Whether or not a panel has made 
an objective assessment of the facts before it, as required by Article  11 of the DSU, is also a legal 
question which, if prop erly raised on appeal, would fall within the scope of appellate review".8 Over 
a year later, the Appellate Body had confirmed that it had failed to engage in a textual analysis of 
"should" in Article  11, when it had stated simply that: "The word 'should' h as, for instance, previously 
been interpreted by us as expressing a 'duty' of panels in the context of Article  11 of the DSU".9 But 
there had been no interpretation in the "EC – Hormones" report on the term "should make" or how 
it could be understood as ex pressing a "duty", or legal obligation.10 The Appellate Body had not 
explained how asserting that, contrary to the plain text, the language in Article  11 was a 
"requirement" could transform this "requiremen t" into a "standard of review".  
4.6.  The Appellate Body had correctly explained just prior to this erroneous statement that: "The 
consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty 
provision is, however, a legal characterization issue. It is a legal question ". The United  States agreed. 
But it did not follow that a panel's assessment of the facts became a "legal question" just because a 
party to the dispute had disagreed with it. It would still be an issue of "facts" and "factual findings" 
and would not become an "issue of law or legal interpretation ". The Appellate Body's decision to 
                                                
6 "EC – Measures Concerning Meat a nd Meat Products (Hormones) ", WT/DS26/AB/R, WT/DS27/AB/R, 
para. 116. 
7 "EC – Measures Concerning Meat and Meat Products (H ormones) ", WT/DS26/AB/R, WT/DS27/AB/R, 
para. 61 (Canada: claims relating to the panel 's alleged failure to make an objective assessment of the facts 
were, in reality, claims alleging errors of fact and "factual findings are, pursuant to Article  17.6 of the  DSU, 
beyond review by the Appellate Body "); id., para.  44 (United  States : party "improperly requests " appellate 
review of panel fact -finding because "according to Article  17.6 of the DSU, factual findings are clearly beyond 
review by the Appellate Body "). 
8 "EC – Measures Concerning Meat and Meat Products (Hormones)", WT/DS26/AB/R, WT/DS27/AB/R, 
para. 132. 
9 "Canada – Measures Affecting the Export of Civilian Aircraft", WT/DS70/AB/R, para.  187. 
10 See "EC – Measures Concerning Meat and Meat Products (Hormones)", WT/DS26/AB/R, WT/DS27/AB/R, 
paras.  131-133 (no interpretation of the term "should" or the phrase "should make").  WT/DSB/M/417  
 
- 12 - 
 
  undertake a review of panels' findings of fact therefore had no basis in the DSU. And the decision to 
review panel fact finding had had a number of adverse effects on the dispute sett lement system. 
For instance, the Appellate Body had itself repeatedly complained about the increased workload due 
to appeals under Article  11 of the DSU.11 The Appellate Body had complained that the number of 
Article  11 appeals had increased over time, and that Article  11 appeals had in turn increased the 
complexity of appeals, the length of submissions, and the need for the Appellate Body to devote 
time and resources to become familiar with the basis for a panel's factual findings.  
4.7.  The opportunity for Artic le 11 appeals of the facts had also meant that a party to a dispute 
may try to re -litigate the entire case it had presented to the panel. That is, it may challenge all the 
panel findings, or at least the key findings, under DSU Article  11, and then all the  panel legal 
interpretations and legal conclusions under the relevant provisions of the covered agreements. These 
developments in turn were then cited as reasons explaining the difficulties of the Appellate Body to 
meet the 90 -day deadline mandated under A rticle 17.5 of the DSU. But these difficulties were, as 
the United States had explained, significantly of the Appellate Body's own creation, and another 
source of serious concern with the functioning of the Appellate Body. Appellate Body review of facts 
also undermined the value of the interim review of panel reports and could make the panel process 
significantly less efficient. A party may consider that the availability of Appellate Body review of the 
facts meant that the party should refrain from providin g corrections or clarifications of the factual 
section of a panel's interim report. The party could consider that it was better off reserving its 
criticisms of a panel's factual findings for an appeal since that could result in reversing the ultimate 
findings of the panel. This meant that a panel did not benefit from the party's comments, and the 
panel's final report did not present factual findings of as high quality as it otherwise could. The 
Appellate Body's approach to the standard of review under Artic le 11 had also been inconsistent. 
Initially, the Appellate Body had set a very high threshold and had explained that for an Article  11 
appeal to succeed, the party needed to demonstrate that the panel had committed "egregious error 
that calls into question  the good faith of the panel".12 However, over time, the Appellate Body had 
altered its approach. For instance, more recently the Appellate Body had explained that "for a claim 
under Article  11 to succeed, we must be satisfied that the panel has exceeded it s authority as the 
trier of facts". The Appellate Body had gone on to explain this meant that "a panel must provide a 
'reasoned and adequate' explanation for its findings and coherent reasoning. It has to base its 
findings on a sufficient evidentiary basis  on the record, may not apply a double standard of proof, 
and a panel's treatment of the evidence must not lack 'even -handedness'".13 This would appear to 
be a much lower threshold that was significantly different from an "egregious error that calls into 
question the good faith of the panel". The shifting nature of the Appellate Body's approach under 
Article  11 would appear to be a result of the fact that Members had never agreed that the Appellate 
Body would review a panel's factual findings and therefore M embers had never negotiated the basis 
or standard for such a review. Instead, the Appellate Body had struggled to formulate its own 
approach, without the benefit of guidance from Members.  
4.8.  Second, the meaning of a Member's municipal law was an issue of fact . Following its assertion 
that it had the authority to review and even reverse panel findings of fact, the Appellate Body had 
also asserted that it had the authority to review panel findings on the meaning of a WTO  Member's  
challenged domestic law. This wa s another serious error. First, the United  States would explain that 
the meaning of domestic law was an issue of fact while the issue of law in a WTO dispute was 
whether that fact was consistent or not with WTO obligations. Second, the United States would 
explain how the Appellate Body's justification for its review on appeal of a Member's domestic law 
had no basis in the DSU and was logically flawed. In the WTO system, as in any international law 
dispute settlement system, the meaning of municipal law was an issue of fact. In a WTO dispute, 
the interpretation of the WTO Agreement or relevant covered agreements was the issue of law for 
the WTO dispute settlement system. The relevant provisions of the DSU reflected this 
straightforward division between issues  of fact and law. As Members knew, DSU Article  6.2 required 
a complaining party to set out "the matter" in its panel request comprised of "the specific measures 
at issue" – that is, the core issue of fact – and to "provide a brief summary of the legal basi s of the 
complaint" – that is, the issue of law. DSU  Article  11 similarly distinguished between the panel's 
"objective assessment of the facts of the case" and its assessment of "the applicability of and 
                                                
11 See, e.g., Appellate Body Report for  2013 (WT/AB/20), pp. 36 and 38, repro ducing the 30 May 2018, 
communication from the Appellate Body to the DSB concerning the Workload of the Appellate Body.  
12 "EC – Measures Concerning Meat a nd Meat Products (Hormones)", WT/DS26/AB/R, WT/DS27/AB/R, 
para. 133. 
13 "European Communities and Certa in Member States – Measures Affecting Trade in Large Civil Aircraft", 
WT/DS316/AB/R, para.  881. WT/DSB/M/417  
 
- 13 - 
 
  conformity with the covered agreements" – that is, t he issue of law. And DSU Article  12.7 made the 
same distinction in relation to the findings of fact and law in a panel's report. Thus, the DSU made 
clear that the measure at issue was the core fact to be established by a complaining party, and the 
WTO cons istency of that measure was the issue of law.  
4.9.  This proposition – that municipal law was an issue of fact – was not unique to the WTO dispute 
settlement system. In fact, it was well -recognized in international law generally. For example, one 
of the standard  treatises on international law (Brownlie) stated that "municipal laws are merely facts 
which express the will and constitute the activities of States".14 Not surprisingly, WTO panels had 
routinely repeated this proposition in a number of reports. For examp le: "US – Section  301 Trade 
Act": "In this case, too, we have to examine aspects of municipal law, namely Sections  301-310 of 
the US Trade Act of  1974. Our mandate is to examine Sections  301- 310 solely for the purpose of 
determining whether the US meets i ts WTO obligations. In doing so, we do not, as noted by the 
Appellate Body in "India – Patents (US) ", interpret US law "as such", the way we would, say, interpret 
provisions of the covered agreements. We are, instead, called upon to establish the meaning o f 
Sections  301- 310 as factual elements and to check whether these factual elements constitute 
conduct by the US contrary to its WTO obligations ".15 "US – Section  129(c)(1) URAA": "As a 
preliminary matter, we note that an assessment of whether Section  129(c )(1) is inconsistent with 
any of the aforementioned WTO provisions will inevitably involve us in a close examination of the 
meaning and scope of that section. It should be recalled, in this regard, that panels are entitled 
(indeed, even obliged) to conduct  a detailed examination of the domestic law of a Member, to the 
extent that doing so is necessary for the purposes of determining the WTO -conformity of that 
Member's domestic law. For the purposes of such an examination, the meaning and scope of relevant 
provisions of domestic law are questions of fact ".16 "Mexico – Olive Oil": "As noted above, we see 
the issue  … as one of municipal law, which is a matter of fact ".17 18 "Colombia – Ports of Entry": 
"WTO jurisprudence has established that municipal law is to be  approached as a 'factual issue' ".19 
"EC – Fasteners": "Thus, we consider that it falls upon us to clarify the scope/operation of Article  9(5) 
of the Basic AD Regulation as a factual matter before engaging in a substantive analysis of China's 
claims ".20 "US – Countervailing Measures on Certain EC Products": "[T]he Panel maintains that it 
was correct for it to examine the relevant aspects of the United  States' law and to establish the 
meaning of the legislation as a factual element ".21; "When analysing mun icipal law, a Panel should 
not interpret the law 'as such', but rather establish the meaning of the disputed legislation as a 
factual element and determine whether the factual element constitutes conduct by the respondent 
Member contrary to its WTO obligat ions".22 "EC – Bed Linen" (Article  21.5 – India): "We note that 
questions of municipal law are treated as matters of fact ".23 "US – Zeroing (EC)": "WTO panels and 
                                                
14 Brownlie, Principles of Public International Law, at 39 (5th ed. 1998) (quoting "Certain German Interests 
in Polish Upper Silesia", PCIJ, Series A, No. 7, p. 19.). 
15 Panel Report, "United  States – Sections 301 -310 of the Trade Act of 1974", WT/DS152/R, adopted 
27 January  2000, para. 7.18 (citations omitted). See also para. 7.19 ("It follows that in making factual findings 
concerning the meaning of Sections 301 -310 we are not bound to accept the interpretation presented by 
the US.").  
16 Panel Report, "United  States – Section 129(c)(1) of the Uruguay Round Agreements Act", WT/DS221/R, 
adopted 30 August 2002, para. 6.28 (citations omitted).  
17 Panel Report, "Mexico – Definitive Countervailing Measures on Olive Oil from the European 
Communities", WT/DS341/R, adopted 21 October 2008, para. 7.29; id., para. 7.30 ("We therefore find, as a 
matter of fact , that under Mexican law, the procedural act by which an investigation  is formally commenced in 
the Mexican system is the publication of the Initiation Resolution, which takes legal effect the following day.").  
18 Panel Report, "Mexico – Definitive Countervailing Measures on Olive Oil from the European 
Communities", WT/DS341/ R, adopted 21 October 2008, para. 7.30.  
19 Panel Report, "Colombia – Indicative Prices and Restrictions on Ports of Entry", WT/DS366/R and 
Corr. 1, adopted 20 May 2009, para. 7.93 (citing Appellate Body Report, "India – Patents (US)", para. 66, and 
referenc ing Panel Report on "US – Section 301 Trade Act", para. 7.18, and PCIJ, "Certain German Interests in 
Polish Upper Silesia", PCIJ, 1926, Rep., Series A, No. 7, p. 19.).  
20 Panel Report, "European Communities – Definitive Anti -Dumping Measures on Certain Iron  or Steel 
Fasteners from China", WT/DS397/R and Corr.1, adopted 28 July 2011, as modified by Appellate Body Report 
WT/DS397/AB/R, para. 7.68.  
21 Panel Report, "United  States – Countervailing Measures Concerning Certain Products from the European 
Communities ", WT/DS212/R, adopted 8 January 2003, as modified by Appellate Body Report WT/DS212/AB/R, 
para. 6.38.  
22 Panel Report, "United  States – Countervailing Measures Concerning Certain Products from the European 
Communities", WT/DS212/R, adopted 8 January 2003, as modified by Appellate Body Report WT/DS212/AB/R, 
para. 7.125.  
23 Panel Report, "European Communities – Anti-Dumping Duties on Imports of Cotton -Type Bed Linen 
from India – Recourse to Article 21.5 of the DSU by India", WT/DS141/RW, adopted 24 April 2003, fn 213.  WT/DSB/M/417  
 
- 14 - 
 
  the Appellate Body have applied the principle, articulated by the Permanent Court of Internatio nal 
Justice, that municipal laws are facts before international tribunals."; "The meaning of municipal law 
in a WTO dispute settlement proceeding is a fact to be established by relevant evidence." 24 "US – 
Poultry (China) ": "As explained by the panel in Co lombia – Ports of Entry, municipal law is to be 
approached as a 'factual issue' ".25 "US – Countervailing and Anti -Dumping Measures (China)": 
"[W]hen ascertaining the meaning of United  States law  … practice [by an administering authority] 
would need to be gi ven due weight in our factual analysis. This would be required to correctly 
establish the meaning of United  States law as a matter of fact ".26 
4.10.   Thus, the United  States was aware of at least 10  times that WTO panels had disagreed with 
the Appellate Body, and instead had found that the meaning or operation of a WTO Member's 
domestic law was an issue of fact, and not an issue of WTO law. That so many WTO panels had come 
to this conclusion in light of the clear text of the DSU was not surprising. Nor was it surpr ising that 
numerous WTO Members had also come to the same conclusion in their disputes. For example: 
Canada in "China – Auto Parts": "Canada expressed a similar view at the oral hearing in this appeal, 
stating that a panel's interpretation of municipal law  is a matter of fact and is subject to the standard 
of review to be accorded to factual findings ".27 China in "EC – Fasteners": "China submits that the 
issue of the 'meaning' or 'scope' of Article  9(5) of the Basic AD Regulation is an issue of fact. 
Therefo re, it rejects the European  Union's argument that the scope of Article  9(5) of the Basic 
AD Regulation is a legal issue and hence subject to appellate review pursuant to Article  17.6 of the 
DSU".28 China in "US – Countervailing and Anti -Dumping Measures (Ch ina)": "The meaning of prior 
municipal law must be determined as a matter of fact, by reference to the laws themselves and the 
manner in which those laws have been interpreted by domestic courts ".29 Colombia in "Colombia – 
Ports of Entry": "Colombia recalls  that from the standpoint of international law, "municipal laws are 
merely facts".30 Dominican Republic in "Dominican Republic – Import and Sale of Cigarettes": 
"Honduras' claim thus focuses on the meaning of a municipal law of the Dominican Republic. In 
addressing the meaning of municipal law, panels must examine the [municipal] law as a matter of 
fact, taking into account the evidence as to the meaning of the law presented by the parties ".31; "In 
this case, the Panel correctly treated the meaning of the Dom inican Republic's municipal law as a 
fact whose meaning was to be proved by evidence ".32 EU in "US – Large Civil Aircraft" (21.5 – EU): 
"Because the meaning of domestic law, including of the US Constitution, is a question of fact for a 
WTO panel, the United  States must rebut the EU's interpretation with actual evidence and argument 
regarding US law ".33 EU in "United  States – Conditional Tax Incentives for Large Civil Aircraft": "The 
interpretation of Washington State law is a question of fact before this Pane l that must be considered 
                                                
24 Panel Report, "United  States – Laws, Regulations and Me thodology for Calculating Dumping Margins" 
("Zeroing"), WT/DS294/R, adopted 9 May 2006, as modified by Appellate Body Report WT/DS294/AB/R, paras. 
7.53, 7.64.  
25 Panel Report, "United  States – Certain Measures Affecting Imports of Poultry from China", WT/DS 392/R, 
adopted 25 October 2010, paras. 7.104 and 7.381.  
26 Panel Report, "United  States – Countervailing and Anti -Dumping Measures on Certain Products from 
China", WT/DS449/R and Add.1, adopted 22 July 2014, as modified by Appellate Body Report WT/DS449/AB/ R, 
para. 7.163.  
27 Appellate Body Reports, "China – Measures Affecting Imports of Automobile Parts", WT/DS339/AB/R, 
WT/DS340/AB/R, WT/DS342/AB, adopted 12 January 2009, n. 306.  
28 Appellate Body Report, "European Communities – Definitive Anti -Dumping Measures on Certain Iron or 
Steel Fasteners from China", WT/DS397/AB/R, adopted 28 July 2011, para. 74.  
29 Panel Report, "United  States – Countervailing and Anti -Dumping Measures on Cer tain Products from 
China", WT/DS449/R and Add.1, as modified by Appellate Body Report WT/DS449/AB/R, para. 7.142. See also 
para. 7.160 ("China argues that in evaluating whether Section 1 effected an advance in a rate of duty on imports 
under an established  and uniform USDOC practice, the relevant baseline of comparison is the prior municipal law 
of the United  States, properly determined as a question of fact. According to China, it is by reference to the 
relevant United  States laws themselves and the manner  in which those laws have been interpreted by 
United  States courts that we should determine whether there has been an advance in a rate of duty.") and para. 
7.228 ("China considers the relevant baseline to be prior municipal law of the importing Member, pr operly 
determined as a question of fact.").  
30 Panel Report, "Colombia – Indicative Prices and Restrictions on Ports of Entry", WT/DS366/R and Corr.1, 
adopted 20 May 2009, para. 4.145.  
31 Appellate Body Report, "Dominican Republic – Measures Affecting the Im portation and Internal Sale of 
Cigarettes", WT/DS302/AB/R, adopted 19 May 2005, para. 45.  
32 Appellate Body Report, "Dominican Republic – Measures Affecting the Importation and Internal Sale of 
Cigarettes", WT/DS302/AB/R, adopted 19 May 2005, para. 46.  
33 Panel Report, "United  States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) – 
Recourse to Article 21.5 of the DSU by the European Union", WT/DS353/RW and Add.1, at Annex B -4, para. 2.  WT/DSB/M/417  
 
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  objectively..."34. EU in "European Communities – Trademarks and Geographical Indications 
(Australia)": "[The European Communities] submits that the Panel must take due account of the fact 
that the Regulation is a measure of EC dome stic law and establish its meaning as a factual element ". 
"[I]n making an objective assessment of the facts, and in particular of the meaning of 
Regulation  2081/92, the Panel must take due account of the fact that Regulation  2081/92 is a 
measure of EC dome stic law. It can therefore not "interpret" Regulation  2081/92, but rather must 
establish the meaning of its provisions as factual elements ".35 EU in "EU – Fatty Alcohols": "Many of 
the arguments, submitted by Indonesia, are matters of EU, rather than WTO la w…. The EU law 
characterisation of a particular fact pattern as consistent or not with the Basic Regulation is a 
question of fact, while the consistency of the contested measure with Article  2.4 of the ADA is a 
question of both law and fact ".36 Guatemala in  "Guatemala – Cement" (Panel): "This evidence is 
fatal to Mexico's claim because it is an accepted principle of international law that municipal law (and 
practice) is a fact which must be proven before an international dispute settlement body such as this 
Panel ".37 Hong Kong in "US – Shrimp": "With respect to the judgment of the CIT in the Turtle Island 
case, Hong  Kong, China, notes that in the absence of a clear mandate given to international 
adjudicating bodies, they commonly interpret only international l aw and treat domestic law, 
whenever warranted, as a factual matter ".38 India in "India – Patents (US)": "India asserts that the 
Panel erred in its treatment of India's municipal law because municipal law is a fact that must be 
established before an international tribunal by the party relying on it ".39 Mexico in "US – 
Anti-Dumping Measures on Oil Country Tubular Goods": "The [] [panel's] findings relate to the 
meaning and scope of a Member's municipal law  … [which] is a question of fact falling outside the 
scope of appellate review ".40 Peru in "EC – Sardines": "Peru thus contend s that, like municipal law, 
the Codex standard must be treated by an international tribunal as a fact to be examined, not as 
law to be interpreted ".41 Philippines in "Thailand – Cigarettes": "The Philippines relies on the 
Appellate Body US – Carbon Steel de cision to argue that the meaning of municipal law has to be 
determined by panels as a question of fact, taking into account not only the assertions of the 
regulating country, but also, necessarily, evidence provided as grounds for those assertions 
(typical ly including judicial rulings, opinions of legal experts, writings of recognized scholars) ".42 
Thus, in at least 15  instances of which the United States was aware, other WTO Members too had 
disagreed with the Appellate Body's assertion that it had the autho rity to review a panel's factual 
findings on the meaning of a WTO Member's domestic law. Despite this repeated disagreement with 
its approach, over many years, however, the Appellate Body had not reconsidered its view. Nor, as 
the United  States would expla in, had it ever engaged with the DSU text that demonstrated that its 
approach was erroneous and contrary to that text. The Appellate Body had not treated panel findings 
concerning the meaning of municipal law as a factual issue. Instead, it had treated the  meaning of 
municipal law as a matter of WTO law, to be decided by the Appellate Body de novo in an appeal 
under Article  17.6 of the DSU. The Appellate Body had given no interpretation of the text of the DSU 
for its statement that the meaning of domestic l aw was an issue of law in the WTO dispute settlement 
system. Despite its occasional citation to other international law authorities, the Appellate Body had 
                                                
34 See also Panel Report, "United  States – Condition al Tax Incentives for Large Civil Aircraft", WT/DS487/R 
and Add.1, adopted 22  September  2017, as modified by Appellate Body Report WT/DS487/AB/R, at Annex  B-1, 
para. 45. 
35 Panel Report, "European Communities – Protection of Trademarks and Geographical Indi cations for 
Agricultural Products and Foodstuffs – Complaint by the United States", WT/DS174/R, adopted 20  April 2005, 
para. 7.43; id., WT/DS174/Add.2, Annex  B-4, p. B-121 (Replies by the European Communities to Questions 
posed by the Panel following the F irst Substantive Meeting), para.  3 ("However, the EC would like to underline 
that in making an objective assessment of the facts, and in particular of the meaning of Regulation  2081/92, the 
Panel must take due account of the fact that Regulation  2081/92 is  a measure of EC domestic law. It can therefore 
not "interpret" Regulation  2081/92, but rather must establish the meaning of its provisions as factual 
elements ".). 
36 Appellate Body Report, "European  Union – Anti-Dumping Measures on Imports of Certain Fatty  Alcohols 
from Indonesia", WT/DS442/AB/R and Add.1, adopted 29  September  2017, at Annex  B-3, para.  28. 
37 Panel Report, "Guatemala – Definitive Anti -Dumping Measures on Grey Portland Cement from Mexico", 
WT/DS156/R, adopted 17  November  2000, para.  6.440.  
38 Appellate Body Report, "United  States – Import Prohibition of Certain Shrimp and Shrimp Products – 
Recourse to Article  21.5 of the DSU by Malaysia", WT/DS58/AB/RW, adopted 21  November  2001, para.  62. 
39 Appellate Body Report, "India – Patents (US)", para.  64. 
40 Appellate Body Report, "United  States – Anti-Dumping Measures on Oil – Country Tubular Goods 
(OCTG) from Mexico", WT/DS282/AB/R, para.  80. 
41 Appellate Body Report, "European Communities – Trade Description of Sardines", WT/DS231/AB/R, 
adopted 23  October 2002, para.  75. 
42 Panel Report, "Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines", 
WT/DS371/R, adopted 15  July 2011, as modified by Appellate Body Report WT/DS371/AB/R, para.  6.155.  WT/DSB/M/417  
 
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  also failed to point to any other source that would explain its departure from the approach followed  
generally in in ternational dispute settlement.  
4.11.   The only basis the Appellate Body had given for its proposition that the meaning of municipal 
law was an issue of law under Article  17.6 of the DSU was a citation to its own reports, most often 
the Appellate Body report in "India – Patents (US)".43 The appellate report in that dispute, however, 
provided no meaningful explanation for this proposition. In that appeal, India had asserted that the 
panel had erred in its treatment of India's municipal law.44 Ironical ly, the Appellate Body had begun 
its examination of this issue by citing the very same international law treatise quoted above. As 
noted, that treatise stated: "[M]unicipal laws are merely facts which express the will and constitute 
the activities of State s". That is, the treatise stated that municipal law was an issue of fact for the 
purpose of international dispute settlement.45 Ironically, then, the "India – Patents " appellate report 
cited a treatise that stood for the opposite of what the Appellate Body cited it for. In discussing the 
panel's examination of India's domestic law in that dispute, the Appellate Body had noted that 
"[p]revious GATT/WTO panels also have conducted a detailed examination of the domestic law of a 
Member in assessing the conformit y of that domestic law with the relevant GATT/WTO obligations ".46 
To be clear, this statement referred to a detailed examination of domestic law by panels. But from 
this reference to the detailed examination of domestic law by panels, the Appellate Body mad e the 
following leap: "And, just as it was necessary for the Panel in this case to seek a detailed 
understanding of the operation of the Patents Act as it relates to the "administrative instructions" in 
order to assess whether India had complied with Artic le 70.8(a), so, too, is it necessary for us in 
this appeal to review the Panel's examination of the same Indian domestic law".47 In other words, 
the Appellate Body had reasoned that, because the panel had been required to undertake a detailed 
examination of  the meaning of a domestic law (as a factual issue) to determine whether that 
domestic law had complied with the WTO Agreements (as a legal issue), the Appellate Body could 
also conduct a detailed examination of the meaning of that domestic law (the factua l issue) in 
reviewing the legal conclusions of the panel. There was no coherent logic in that statement. The 
authority to review a panel's legal conclusion implied no authority to also review a panel's factual 
findings. Those factual findings could simply be taken as a given.  
4.12.   The Appellate Body in fact provided no explanation of how its "detailed examination" of 
domestic law was consistent with the limits of appellate review imposed by Members in Article  17.6 
of the DSU. The stated rationale – that a "detai led understanding" was important – said nothing 
about the proper role of the Appellate Body in reviewing a panel's findings. Indeed, many factual 
issues in WTO dispute settlement required "detailed understanding." But that provided no basis for 
treating th ose factual issues as issues of law to be decided de novo by the Appellate Body on appeal. 
Unfortunately, in subsequent disputes, the Appellate Body had repeated and expanded on its flawed 
approach in "India – Patents (US)". For example, in US – Section  211 Appropriations Act, the 
Appellate Body had quoted from its report in India – Patents, and then had found that "[t]o address 
the legal issues raised in this appeal, we must, therefore, necessarily examine the Panel's 
interpretation of the meaning of Secti on 211 under United  States law" and "[t]he meaning given by 
the Panel to Section  211 is, thus, clearly within the scope of our review as set out in Article  17.6 of 
the DSU".48 Again, the Appellate Body had been saying that the meaning of a municipal law – a 
factual issue – was within the scope of its review, notwithstanding the express limitations imposed 
by Article  17.6 of the DSU. At the DSB meeting on 6  March  2002, when this report had been adopted 
– over 16  years ago – the United  States had expressed its  serious concerns with this approach as 
follows: "Under Article  17.6 of the DSU, the Appellate Body's review was limited to issues of law and 
legal interpretation, not issues of fact. In this dispute, the Appellate Body had blurred this distinction 
by conc luding that an examination of the meaning of municipal law – in this case Section  211 – was 
within its mandate. The Appellate Body had reached this conclusion based on a logical misstep. In 
paragraph  105 of its Report, the Appellate Body had correctly note d that a panel's assessment of 
whether a municipal law was consistent with WTO obligations was a legal characterization that was 
within the scope of appellate review. However, from this it had incorrectly concluded in the following 
paragraph that the Panel 's finding as to the meaning and operation of the municipal law was also 
within the scope of appellate review. This did not follow logically. It was one thing to determine what 
                                                
43 See, e.g., Appellate Body Report, "EU – Biodiesel", para. 6.155 (citing "India – Patents (US) "). 
44 Appellate Body Report, "India – Patents (US)", para. 64.  
45 Appellate Body Report, "India – Patents (US)", para. 65 and n. 52.  
46 Appellate Body Report, "India – Patents (US)", paras. 66 and 67.  
47 Appellate Body Report, "India – Patents (US)", para. 68.  
48 Appellate Body Report, "United  States – Section 211 Omnibus Appropriations Act of 1998", 
WT/DS176/AB/R, adopted 1  February  2002, para. 106.  WT/DSB/M/417  
 
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  a municipal law meant and how it operated. It was an entirely different matter to determine whether 
– given a particular meaning and operation – the municipal law was consistent with WTO obligations. 
The meaning and operation of municipal law fell within the panel's role as finder of fact, and was 
outside the scope of appellate revie w unless the finding was inconsistent with the obligation to make 
an objective assessment of the facts, in accordance with Article  11 of the DSU. Once the panel had 
made these factual findings, its legal findings as to whether the municipal law was consist ent with a 
WTO agreement were subject to appellate review. In the US view, the Appellate Body Report had 
not sufficiently distinguished between these factual and legal findings of a panel and thus risked 
encroaching on a panel's fact -finding role".49 
4.13.   And, u nfortunately, this same criticism remained valid today as the Appellate Body had 
continued to follow the same flawed approach in subsequent appeals. For example: "China – Auto 
Parts" (AB): "When a panel examines the municipal law of a WTO Member for purpos es of 
determining whether the Member has complied with its WTO obligations, that determination is a 
legal characterization by a panel, and is therefore subject to appellate review under Article  17.6 of 
the DSU…" .50 "China – Publications and Audiovisual Prod ucts": "We recall that a panel's assessment 
of the meaning and content of a Member's municipal law is subject to appellate review in order to 
determine whether the panel erred in its finding regarding the consistency of the Member's municipal 
law with the WTO agreements ".51 "EC – Fasteners (China)": "Therefore, we conclude that the Panel's 
assessment of the meaning and scope of Article  9(5) of the Basic AD Regulation, which is based on 
the text of the provision, its context within the structure of the other relevant provisions of the 
Regulation, and its operation is not a "factual matter" and is not excluded from appellate review. 
Rather, the Panel examined Article  9(5) for the purpose of determining its consistency with a number 
of provisions of the Anti -Dumping Agreement and the GATT  1994, which, as a matter of legal 
characterization, is subject to appellate review according to Article  17.6 of the DSU ".52 "US – 
Countervailing and Anti -Dumping Measures (China)": "Although factual aspects may be involved in 
the individuation of the text and of some associated circumstances, an assessment of the meaning 
of a text of municipal law for purposes of determining whether it complies with a provision of the 
covered agreements is a legal characterization ".53 These example s had repeatedly exhibited the 
same flawed logic. In short, the Appellate Body reasoned that when a panel examined a municipal 
law to assess compliance with the WTO  Agreements, examination of that municipal law became a 
legal question. This approach elimin ated the lines explicitly drawn by Members in the DSU between 
factual and legal issues. As the United  States had noted in the excerpt above, the fact that the 
                                                
49 WT/DSB/M/119, para. 27 (statement of the United  States); se e also id. ("A better approach, according 
to the United  States, was that of the International Court of Justice (ICJ) which was cited by the Appellate Body 
in its earlier report in the "India – Mailbox" dispute (WT/DS50). The ICJ has noted that from the sta ndpoint of 
international law "municipal laws are merely facts". The Appellate Body had a special role with respect to the 
interpretation of WTO Agreements, and Appellate Body proceedings – which were expedited and permitted only 
limited briefing and hearin gs – reflected this. In the US view, this special role did not extend to ascertaining the 
meaning and operation of municipal laws, and Appellate Body proceedings were ill -suited to such fact -finding ".). 
The United  States raised questions about this in Marc h 2005 (TN/DS/W/74) and submitted proposed guidance 
that: "The question of whether a measure does x is a factual question because at that point it is not a question 
of the interpretation of a provision of a covered agreement or of whether a provision appli es to the measure ". 
(TN/DS/W/82/Add.2.)  
50 Appellate Body Reports, "China – Measures Affecting Imports of Automobile Parts", WT/DS339/AB/R, 
WT/DS340/AB/R, WT/DS342/AB/R, adopted 12  January  2009, para. 225 (citations omitted).  
51 Appellate Body Report, "China  – Measures Affecting Trading Rights and Distribution Services for Certain 
Publications and Audiovisual Entertainment Products", WT/DS363/AB/R, adopted 19  January  2010, para. 117.  
52 Appellate Body Report, "European  Communities – Definitive – Anti-Dumping M easures on Certain Iron 
or Steel Fasteners from China", WT/DS397/AB/R, adopted 28  July 2011, para. 297. See also para. 295 ("We 
begin by addressing China's preliminary objection that the Panel's finding concerning the meaning and scope of 
Article  9(5) of the Basic AD Regulation is a matter of fact that is not subject to appellate review pursuant to 
Article  17.6 of the DSU. We disagree with China and the Panel. On several occasions, the Appellate Body has  
clarified that municipal law may serve both as evide nce of facts and evidence of a Member's compliance or 
non-compliance with its international obligations. In particular, in "US – Section 211 Appropriations Act ", the 
Appellate Body stated that, when a panel examines the municipal law of a WTO Member for th e purpose of 
determining whether that Member has complied with its WTO obligations, that examination is a legal 
characterization by a panel and is therefore subject to appellate review under Article 17.6 of the DSU ".). 
53 Appellate Body Report, "United  States – Countervailing and Anti -Dumping Measures on Certain Products 
from China", WT/DS449/AB/R and Corr.1, adopted 22  July 2014, para. 4.101. See also para. 4.99 ("In "India – 
Patents (US) " and "US – Section 211 Appropriations Act ", the Appellate Body stated  that municipal law may 
constitute evidence of facts as well as evidence of compliance or non -compliance with international obligations, 
and that a panel's examination of the municipal law of a WTO Member for the purpose of determining whether 
that Member has complied with its obligations under the WTO Agreement is a legal characterization by a panel 
subject to appellate review under Article 17.6 of the DSU ".). WT/DSB/M/417  
 
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  question of whether a particular municipal law was consistent with the WTO Agreements was a legal  
question did not change the nature of the factual determination of the meaning and content of that 
municipal law.  
4.14.   For a more recent example, Members would recall that at the DSB meeting on 
26 October  2016, the United  States had explained how the Appellate  Body's flawed approach had 
been highlighted by the appeal in "EU – Biodiesel (Argentina)". In that dispute, one of Argentina's 
claims had been that a provision of EU law, the Basic Regulation, had been inconsistent "as such" 
with the AD  Agreement. On appe al, Argentina had claimed that the panel had erroneously construed 
that EU law. Argentina's argument had been based on the text of the EU provision, legislative history, 
a supposed EU practice in several other investigations, and certain EU court decisions . On appeal, 
Argentina had claimed both that the Panel's interpretation of EU law had been wrong as a matter of 
law (although under what provision of the AD Agreement or the DSU remained unclear) and that 
the Panel had failed to make an "objective assessme nt of the matter" under Article  11 of the DSU. 
At a minimum, in light of the Appellate Body's conception of a different and higher standard to review 
findings of fact (which the United States had discussed earlier), the panel's factual findings would 
be su bject to review under that higher or more restrictive standard. The Appellate Body had 
examined the meaning of the EU law as a de novo legal issue, and had then proceeded to conduct 
a separate examination of whether the Panel had made an objective assessme nt.54 
4.15.   The lack of coherence in the Appellate Body's approach had been noted by other 
commentators. For example, an entry in The Oxford Handbook of International Trade Law stated: 
"[T]he logic of the Appellate Body's finding [that panel findings on municipal  law are issues of law 
under DSU Article  17.6] is difficult to understand. Just because a panel assesses whether a domestic 
legal act – which represents a fact from the perspective of WTO law – is consistent or inconsistent 
with WTO law does not suddenly t urn the meaning of the domestic legal act into a question of WTO 
law…. [T]here must… be a discernible line between issues of fact and issues of law. After all, the 
Appellate Body's jurisdiction is circumscribed precisely by this distinction ".55 Another set of 
commentators had similarly critiqued the Appellate Body's approach, noting that "maybe that 
limitation [of appellate review to the application of WTO law to the facts as found by the panel] was 
precisely what Article  17.6 DSU intended to impose on the A ppellate Body. The arguments offered 
by the Appellate Body for a more expansive review authority are not very convincing, as the 
determination of the implications of a Member's municipal law are not more "legal interpretations" 
than is the determination of  the implications of any other measure. It seems that the Appellate Body 
is simply keen to review a Panel's interpretation of the meaning of municipal law…".56 
4.16.   The Appellate Body's approach in conducting its own de novo review of the meaning of 
domestic law  was inconsistent with the appropriate functioning of the dispute settlement system. It 
departed from the basic division of responsibilities where panels determined issues of fact and law, 
and the Appellate Body may be asked to review specific legal interp retations and legal conclusions. 
It also represented a serious waste of the limited resources of the WTO dispute settlement system, 
adding complexity and delay to the process. No purpose was served by having a panel engage in a 
detailed review of a factual  record related to the meaning of a domestic measure, and then to have 
the Appellate Body engage in its own de novo review of the exact same factual issues, so that the 
parties had to argue all the sam e factual issues a second time.  
4.17.   Third,  to conclude, the representative of the United States said that the United  States had for 
many years been concerned with the Appellate Body's approach to review of findings of fact by WTO 
panels. In this statement, for the benefit of WTO  Members' reflection, the United States had drawn 
together an analysis of the DSU text, a critique of the Appellate Body's erroneous rationale, and a 
review of panel and WTO Member statements. As the United States had noted in this statement, 
                                                
54 The United  States explained to Members why this approach did not make sense, and departed from the 
Appellate Body's frequent admonition that a party should present an issue as an error of law or an error under 
Article  11, but not both types of claims with respect to the same issue. See, e.g., "EC – Fasteners (China)" (AB), 
para. 442; "Chile – Price Band System (Article  21.5 – Argentina) " (AB), para.  238. Furthermore, it raised the 
prospect that the Appellate Body might find that the Panel made an objective assessment of a complex factual 
record, and at the same time might find that precisely the same  panel finding was incorrect simply because the 
Appellate Body made a different factual determination based on its own de novo review.  
55 Bohanes and Lockhart, "Standard of Review in WTO Law", The Oxford Handbook of International Trade 
Law (2009), at 42.  
56 Wauters and Vandenbussche, "China – Measures Affecting Imports of Automobile Parts", American Law 
Institute Project, at n. 60).  WT/DSB/M/417  
 
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  DSU Article  17.6 expressly limited appellate review to issues of law and legal interpretation covered 
in a panel's report. On its face, this would not include panel fact -finding. When the United States 
looked back to the appellate report in which the Appellate Body had asserted it could review panel 
fact-finding under the "duty" or "requirement" in DSU Article  11 to make an objective assessment 
of the facts, the United  States found that there was no interpretation by the Appellate Body of the 
text of DSU Article  11, whic h stated that a panel "should make" an objective assessment. And 
because the DSU text did not support any appellate review of the facts, it also did not suggest any 
particular standard for that review. By recasting panel fact -finding as, instead, an issue of law subject 
to review, the Appellate Body had further asserted that it could review the meaning of a Member's 
domestic law on appeal. And it conducted that review de novo – that is, without any deference to 
the panel's findings on appeal. But the meanin g of a Member's domestic law – what a measure 
meant or did – was simply the key fact in a dispute while the issue of law was whether that fact was 
consistent or inconsistent with WTO obligations. The Appellate Body's expansion of its review 
authority, cont rary to the DSU text, had added complexity, duplication, and delay to almost every 
dispute, as a party to the dispute could now challenge on appeal every aspect of the panel's findings. 
The United  States did not consider this a desirable outcome. But more importantly, it did not reflect 
the WTO dispute settlement system as agreed by Members in the text of the DSU. Therefore, 
whether or not a WTO  Member considered appellate review of facts desirable, that review was neither 
legal nor legitimate under the agr eed WTO rules.  
4.18.   The representative of Chile thanked the United States for its statement and its explanation 
concerning Article  17.6 of the DSU. Chile noted that several DSB meetings had taken place, at which 
statements had been made by the United States on specific issues related to the dispute settlement 
system without providing any solutions. A process therefore had to be set up that would lead to 
solutions. Chile was ready to work towards such solutions if all Members were onboard to do so in 
the same spi rit. Finally, Chile wished to consult on the possible alternatives, which could be explored 
in light of the concerns raised in the DSB. Chile reiterated its availability to work on possible 
solutions.  
4.19.   The representative of Japan  said that his country thanked the United  States for its statement 
made at the present meeting. Japan wished to make an observation concerning one particular issue 
that had been raised by the United  States, namely, the issue of appellate review of a panel' s 
determination of the meaning of municipal law. The text of the DSU was clear and unequivocal that 
the Appellate Body's jurisdiction was limited to legal issues contained in a panel report and there 
was little scope for debate that municipal law itself wa s a matter of fact in WTO law. For example, 
in "India – Patents (US)", the Appellate Body had approvingly cited the PCIJ's observation that had 
been made several decades ago, which had stated: "municipal laws are mere facts which express 
the will and const itute the activities of States, in the same manner as do legal decisions and 
administrative measures ".57 The Appellate Body had repeatedly stated that "a panel's examination 
of the municipal law of a WTO Member for the purpose of determining whether that Me mber has 
complied with its obligations under the WTO Agreement is a legal characterization by a panel subject 
to appellate review under Article  17.6 of the DSU ".58 
4.20.   The Appellate Body had clarified "[t]his [appellate] review would include text and context, a s 
well as the 'structure and logic', of a legal instrument ".59 The Appellate Body had continued with 
caution, however, that there might be instances in which a panel's assessment of municipal law 
would go beyond the text of an instrument on its face, in whi ch case further examination might be 
required, and might involve factual elements. With respect to such elements, the Appellate Body 
would not lightly interfere with a panel's finding on appeal.60 According to the Appellate Body, such 
                                                
57 Appellate Body Report, "India – Patents (US)", para.  65. 
58 Appellate Body Report, "US – Countervailing and Anti -Dumping Measur es (China)", para.  4.99, citing 
Appellate Body Report, "US – Section 211 Appropriations Act", para.  105. See also Appellate Body Report, "China 
– Auto Parts", para.  225; Appellate Body Report, "China – Publications and Audiovisual products", para.  177; 
Appellate Body Report, "EC – Fasteners (China)", para.  295; Appellate Body Report, "EU – Biodiesel (Argentina)", 
para. 6.155.  
59 Appellate Body Report, "US – Countervailing and Anti -Dumping Measures (China)", para.  4.99 and 
footnote  467, citing Appellate Bo dy Report, "China – Auto Parts", para.  238. See also Appellate Body Report, 
"China – Publications and Audiovisual products", para.  177; Appellate Body Report, "EC – Fasteners (China)", 
para. 296; Appellate Body Report, "EU – Biodiesel (Argentina)", para.  6.169. 
60 Appellate Body Report, "China – Auto Parts", para.  225. See also Appellate Body Report, 
"US - Countervailing and Anti -Dumping Measures (China)", para.  4.99; Appellate Body Report, "EC – Fasteners 
(China)", para.  296; Appellate Body Report, "China – Publications and Audiovisual products", para.  177. WT/DSB/M/417  
 
- 20 - 
 
  "factual elements" mig ht include "evidence of how a municipal law has been applied, the opinions of 
experts, administrative practice, or pronouncements of domestic courts", the examinations of which 
"are more likely to be factual in nature".61 Appellate Body had also stated "an examination of whether 
the elements cited by the Appellate Body in "US – Carbon Steel" are legal characterizations, or 
involve also factual elements, depends on the circumstances of each case"62 but "the examination 
of the legal interpretation given by a do mestic court or by a domestic administrative agency as to 
the meaning of municipal law with respect to the measure being reviewed for consistency with the 
covered agreements may be a legal characterization ".63 Japan wished to make a couple of comments 
in this regard. First, Japan did not understand that the examination of municipal law could be a legal 
characterization simply because it involved "legal interpretation" of the municipal law. As the 
Appellate Body had stated in "China – Auto Parts", "[w]hen a p anel examines the municipal law of 
a WTO Member for purpose of determining whether the Member has complied with its WTO 
obligations, that determination is a legal characterization by a panel, and therefore subject to 
appellate review under Article  17.6 of the DSU ".64 Thus, for example, the review of municipal law to 
determine whether what the municipal law required would constitute an act prescribed by a covered 
agreement, or whether governmental actions taken under municipal law would fall within the scope 
of the measures as defined in, and thus covered by, a covered agreement was certainly a legal 
characterization of the municipal law at issue under WTO  law. However, the Appellate Body had also 
warned that a legal characterization of municipal law "will go beyond the text of an instrument on 
its face, in which case further examination may be required, and may involve factual elements". 
Thus, the examination of factual elements might be part of, not separate from, legal 
characterizations of municipal law unde r the WTO Agreement, and with respect to such factual 
elements, "the Appellate Body will not lightly interfere a panel's finding on appeal".65 
4.21.   Second, Japan acknowledged that there might be a situation where a panel could commit an 
egregious error in its de termination of the meaning of the municipal law at issue, and that in such a 
situation, a factual matter could be addressed by appellate review under Article  11 of the DSU, which 
required that a panel made an objective assessment of the fact before it. The  "deliberate disregard 
of, or refusal to consider, the evidence submitted to a panel" or the "wilful distortion or 
misrepresentation of the evidence put before a panel" were inconsistent with an objective 
assessment of the facts.66 As only "an egregious err or that calls into question the good faith of a 
panel"67 could be subject to appellate review under Article  11 of the DSU. Also, for preserving the 
prompt, effective and efficient functioning of the WTO dispute settlement system, the Appellate Body 
should b e encouraged to exercise extreme caution in addressing the determination by a panel of the 
meaning of the municipal law at issue, which would inevitably involve complex factual enquiries. 
Japan looked forward to further discussions with other WTO Members o n this important systemic 
matter.  
4.22.   The representative of Australia  said that her country noted the concerns raised by the 
United  States at the present meeting regarding compliance with Article  17.6 of the DSU. Article  17.6 
clearly delimited the scope of issues that might be properly put before the Appellate Body for its 
consideration to "issues of law covered in the panel report, and legal interpretations developed by 
the panel ". While the Appellate Body had noted in "US – Upland Cotton" (Article  21.5 – Brazil), the 
distinction between issues of law and issues of fact could be "difficult to draw"68, in Australia's view 
it was incumbent on the Appellate Body, and Members engaged in appellate proceedings, to maintain 
                                                
61 Appellate Body Report, "China – Publications and Audiovisual products", para.  177, citing Appellate 
Body Report, "US – Corrosion -Resistant Steel Sunset Review", para.  168. See also Appellate Body Report , 
"US - Countervailing and Anti -Dumping Measures (China)", paras.  4.100 – 4.101, citing Appellate Body Report, 
"US – Carbon Steel", para.  157; Appellate Body Report, "EC – Fasteners (China)", para.  296. 
62 Appellate Body Report, "US – Countervailing and Ant i-Dumping Measures (China)", para.  4.101. See 
also "US – Countervailing and Anti -Dumping Measures (China)", para.  4.100 and footnote  469 quoting Appellate 
Body Report, "US – Carbon Steel", para.  157. 
63 Appellate Body Report, "US – Countervailing and Anti -Dumping Measures (China)", para.  4.101.  
64 Appellate Body Report, "China – Auto Parts", para.  225. Compare the statement of the Appellate Body 
quoted above with the similar but slightly reformulated statements in Appellate Body Report, "US – 
Countervailing and Anti -Dumping Measures (China)", para.  4.99 and Appellate Body Report, "EC – Fasteners 
(China)", para.  295. 
65 Appellate Body Report, "China – Auto Parts", para.  225. See also Appellate Body Report, "US – 
Countervailing and Anti -Dumping Measures (China)" , para.  4.99; Appellate Body Report, "EC – Fasteners 
(China)", para.  296; Appellate Body Report, "China – Publications and Audiovisual products", para.  177. 
66 Appellate Body Report, " EC – Hormones" , paras.  133. 
67 Appellate Body Report, " EC – Hormones" , paras. 133. 
68 Appellate Body Report, "US – Upland Cotton" (Article  21.5 – Brazil), para.  385 WT/DSB/M/417  
 
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  this distinction and respect the limits pl aced on the scope of appellate review under the DSU. 
Australia observed that the Appellate Body in "EC – Hormones" had described the distinction, as 
follows: "the determination of whether or not a certain event did occur in time and space is typically 
a question of fact  … the consistency or inconsistency of a given fact or set of facts with the 
requirements of a given treaty provision is, however, a legal characterization issue".69 In this light, 
Australia acknowledged the specific concern raised by the Unit ed States as to how the Appellate 
Body had characterized and dealt with domestic law in the context of certain appeals. Australia 
shared the general view that domestic law and meaning of domestic law was a question of fact, to 
be determined by a panel on t he basis of the evidence put before it by the parties to a dispute. As 
such, it was not within the mandate of the Appellate Body to undertake its own independent review 
of the meaning or interpretation of such laws. On the other hand, the question of the c onsistency of 
such laws with WTO obligations, which was a separate matter, might be an issue of law. Therefore, 
such matters might be properly put before the Appellate Body. As with other issues of concern 
regarding the operation of the WTO dispute settlem ent system, Australia was interested in other 
Members' views on this issue and remained willing to engage constructively in further producti ve 
discussions in these issues.  
4.23.   The representative of Canada  said that his country thanked the United  States for rai sing these 
issues with respect to the standard of review. Canada would review the issues carefully. While it was 
important to discuss these issues in the DSB, it was also incumbent on Members to discuss a method 
by which these concerns could be addressed. Canada remained willing and available to discuss these 
issues going forward.  
4.24.   The representative of Brazil said that his country thanked the United  States for its statement 
made on an issue that was conceptually complex and defied simple categorizations. Un like the 
previous statements about Rule  15 and the 90 -day period for appeal reports, the present topic was, 
as some commentators put it, fraught with difficulties. The US statement raised several interesting 
questions that called for a thorough analysis. A  proper debate would involve further opportunities to 
correctly understand and frame the issue. A set of initial questions, however, did emerge in light of 
some of the claims raised by the United States, and Brazil therefore wished to make some 
preliminary  remarks, despite of not having read the US statement in advance. First, although the 
item placed on the Agenda made reference only to Article  17.6 of the DSU, the concerns expressed 
by the United States had to be considered by taking account of other lega l provisions, such as 
Article  11 of the DSU and the objective assessment of facts by panels (which could be appealed), 
Article  17.6(ii) of the Anti -Dumping Agreement and its specific standard of review, Article  3.2 of the 
DSU and the explicit function of t he dispute settlement system to clarify the provisions in accordance 
with customary rules of interpretation of public international law, which, in turn, led to Articles  31 
and 32 of the VCLT. Also relevant, was Article  XVI:4 of the Marrakesh Agreement Esta blishing the 
WTO, which stipulated that "each Member shall ensure the conformity of its laws, regulations and 
administrative procedures with its obligations as provided in the annexed Agreements".  
4.25.   First, concerning standard of review, the issue, which had been brought to the DSB by the 
United  States, seemed to revolve around the concepts of standard of review and the characterization 
of domestic or municipal law. Standard of review was the term used to define the margin of 
appreciation – or deference – that panels and the Appellate Body left to national authorities when 
enacting and enforcing their obligations under the WTO Agreements. It could also be read in the 
context of the deference granted by the Appellate Body to panels in discharging their specific function 
in the DSU, especially as the triers of facts. As per the current doctrine and jurisprudence, it seemed 
that the standard of review in the dispute settlement system was neither a de novo review, nor one 
of total deference. Its scope would define " the degree to which a panel should second -guess a 
measure to determine whether it is WTO consistent or not" (Mattias Oesche, Standards of Review in 
WTO Dispute Resolution, p.  161) and in fact, "shapes the jurisdictional competence of the 
WTO's  adjudicating  bodies vis-à-vis WTO members" (Oesche, p.  14). 
4.26.   Brazil believed that no one was better placed to state the meaning of domestic legislation or 
practice than the national authorities, and panels and the Appellate Body should not lightly interfere 
in this cha racterization. On the other hand, in the exercise of its objective assessment of facts 
(Article  11 of the DSU), panels had to ascertain, on the basis of evidence and arguments brought 
by the parties, what the meaning of the domestic legislation was, its ef fects, its operation and, 
ultimately, its consistency with WTO  provisions. A total deference could not reasonably be the 
                                                
69 Appellate Body Report, "EC – Hormones", para. 132.  WT/DSB/M/417  
 
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  standard, for it would confer on the national authority the role as the ultimate judge of its 
compatibility not with its own domestic l egislation – which would be normal – but with WTO law. As 
one author put it, panels and the Appellate Body "cannot exclusively rely on the reading of domestic 
law as presented by the defending member, nor can they accept at face value the characterization 
that the Member attaches to its laws. An overly deferential approach would arguably leave domestic 
authorities too much scope to put forward only WTO -compatible interpretations" (Oesch, p.  20-21). 
In practice, however, several authors argued that the stand ard was not static, but depended on the 
circumstances of the case, the nature of the measure and the scope of the obligation. The debate 
about standard of review took on still a bigger proportion when referring to questions of law and 
questions of facts. T he distinction between these two, however, was not always clear -cut. To start 
with, in the exercise of its functions, panels issued findings that were (i) purely legal ; (ii) purely 
factual ; and (iii) findings that reflected the application of the law to th e facts (Ehlermann/Lockhart, 
Standard of Review in WTO Law, in JIEL 7(3) 491 -521).  
4.27.   Second, concerning domestic law as a factual issue, the main issue in the statement made by 
the United States at the present meeting, however, seemed to be the assertion tha t it was 
well-recognized in international law that "municipal law is an issue of fact". Brazil believed that this 
assertion alone might not so quickly dispose of the issue, namely: Was municipal law always and 
only an issue of fact? Or, as the Appellate Bo dy had already put it, did it also serve "as evidence of 
compliance or non -compliance with international obligations" (US -Omnibus Appropriation Act, 
para. 105; "India -Patents", para.  65)? In the same publication  (Principles of Public International 
Law), Ia n Brownlie, as quoted by the United  States, added that "the general proposition that 
international tribunals take account of municipals only as facts, is, at most, a debatable proposition 
the validity and wisdom of which are subject, and call for, further discussion and review" (p.  38, 
7th edition,  2008), "municipal law may be evidence of conduct in violation of a rule of treaty or 
customary law" (p.  38) and that, "in cases in which vital issues (whether classified as facts or 
otherwise) turn on investigati on of municipal law, the International Court has duly examined such 
matters…"(p.  39). 
4.28.   Against this background, Brazil wished to put forward some ideas for Members to consider. It 
seemed clear that the "application by the panel of WTO Law to the facts is a legal question", that is, 
the application of the law to the facts was a legal question that was subject of appellate review. It 
involved "weighing and appreciation of the facts and their characterization in terms of the legal rules" 
(Ehlerman/Lockhart). Th is might require sometimes the Appellate Body to conduct a scrutiny of the 
Panel's factual findings in determining whether a panel correctly applied WTO law to the facts of the 
case (Voon/Yanovich, The Facts Aside: The Limitation of WTO Appeals to Issues o f Law, JWT  40(2),  
239-258). In sum, when a panel assessed the consistency of the domestic measure (in its factual 
and legal dimensions) with the specific WTO provisions, it constituted a legal interpretation 
developed by the panel, as mentioned in Article  17.6 of the DSU. However, to pursue the 
assessment, the panel had to have understood and interpreted the facts before it – and it might 
have gotten it right or not. In reviewing the matter before it, the Appellate Body would be confronted 
with legal issues  and legal interpretations developed by the panel, which often contained a mix of 
facts and law, as construed and structured by the panel, and could thus not always be easily 
separated. Once the Appellate Body was called to review a panel's findings, it wo uld revisit the legal 
reasonings adopted by it and verify whether there had been any legal error committed; but this legal 
exercise could not be done in a vacuum, it had to be done based on the panel's factual findings. Far 
from exercising a reassessment o f the facts, the Appellate Body, in the exercise of its function, would 
have to delve into an analysis of the measure at issue, namely, the legal effect, which was attributed 
to a factual record, was considered a question of law, and this was not the equiv alent of allowing 
the Appellate Body to decide on purely factual questions. As the Appellate Body had stated in the 
case EC -Hormones (para.  132), "[d]etermination of the credibility and weight properly to be ascribed 
(that is, the appreciation of) a given piece of evidence is part and parcel of the fact -finding process. 
The consistency or inconsistency of a given fact or set of facts with the requirements of a given 
treaty provision is, however, a legal characterization issue. It is a legal question ". This compatibility 
exercise between domestic legislation and WTO provisions was a legal issue and could, as such, be 
reviewed by the Appellate Body. In fact, this was the raison  d'être  of the Appellate Body, to review 
the consistency of domestic legislation wit h WTO Agreements, knowing that the Appellate Body 
would not review the legislation "as such", but solely for the purposes of determining its consistency. 
Also on a purely preliminary basis, the following questions could be addressed to the United States:  
4.29.   Concerning the standard of review and factual and legal issues, what would be the role of the 
Appellate Body, and what would be its functions? If the meaning of domestic law were to be WT/DSB/M/417  
 
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  considered strictly a factual question and not subject to appeal, what w ould be the relevance of the 
Appellate Body's review role as enshrined in the DSU? In a more practical example, what did the 
"meaning" of municipal law mean? What did it include? For example, could the specific municipal 
law, assessed by a panel, serve as evidence of contingency of the use of domestic over imported 
goods? Should this be treated as a factual or legal question? How should a panel (and the Appellate 
Body), in the US' view, perform the task of determining consistency of domestic law and WTO 
Agreements? Did it not have to scrutinize and compare both? What if the domestic interpretation of 
the legislation was misconstrued by the panel? Would the United  States accept that this finding could 
not be appealed? Did the United  States consider that ident ical terms might have different meanings 
in the domestic/municipal and international sphere, for example, "necessary" as in Article  XX of the 
GATT  1994 or "determination" as in "injury determination"? How did the United  States understand 
the standard of re view in Article  11 of the DSU? Did the United  States agree that claims that the 
panel had not performed an objective assessment of facts was a legal question and could be subject 
to review by the Appellate Body? When a panel assessed whether a domestic inv estigation authority 
had provided, for example, a reasoned and adequate explanation for a certain conclusion, was it 
making a factual or legal assessment? And how could the Appellate Body not be able to consider 
this, as it was connected to the essential l egal question of application of the correct legal standard?  
4.30.   Finally , to conclude,  Brazil noted that when Members considered the function of law in the 
multilateral trading system – the function of each trade agreement, of the DSU, of the rules of 
procedure  – Members realized that it was not only about resolving disputes, as Brazil had already 
stated in the DSB meeting of November  2017, to quote Rosalyn Higgins, to "provide an operational 
system for securing values that we all desire". Brazil was of the view  that most Members would 
agree that they more or less knew which values they wished to see reflected in the WTO's dispute 
settlement system and in the Appellate Body: independence, professional competence and 
efficiency, clarity and high -quality reports, b oth at panel and appeal levels. This meant that any 
proposal to change established rules of the DSU or the Working Procedures, although welcome in 
the perspective of attempting to improve the system and to adjust it to new developments in the 
WTO's legal a nd economic environment, should be tested and argued in light of the values they 
embodied or the new values Members might want it to embody. In essence, Members were 
discussing, under this Agenda item, the very nature of the W TO's dispute settlement system . 
4.31.   The representative of China  said that his country took note of the statement made by the 
United  States and the statements made by other delegations at the present meeting. Given the 
complexity of the issue, prior to any preliminary comments, China wished  to reserve its rights to 
make further comments on this important issue in the future. First, according to Article  17.6 of the 
DSU, an appeal should be limited to issues of law covered in the panel report and legal interpretations 
developed by the panel. H ence, factual issues generally fell outside the scope of  Appellate Body's 
jurisdiction.  
4.32.   Second, China believed that the major function and value of the Appellate Body was to 
conduct a secondary and independent review of a panel report. This was what the ne gotiators in the 
Uruguay Round had agreed based on their GATT dispute settlement experience. In fact, not all issues 
related to domestic law should be categorized as factual issues. In China's view, at least two sets of 
issues fell within the scope of appe llate review: the first one was the legal characterization of 
domestic law under WTO rules; and the second, the review by the Appellate Body on whether a 
panel objectively assessed the meaning of domestic law as contemplated by Article  11 of the DSU. 
Under  the latter in particular, some panels' assessments of domestic law were clearly erroneous and 
should be corrected by means of an appellate review. Third, in practice, issues of law and fact were 
usually mixed together, which created the difficulty to draw  a clear distinction. China believed that 
a practical solution would be to conduct a case -by-case analysis for each specific dispute. China 
reiterated that its comments at the present meeting were without prejudice to its position on this 
matter. China was  open to further discuss this systemic issue with Members on future occasions.  
4.33.   The representative of the Philippines  said that his country wished to make some preliminary 
comments on this Agenda item. The Philippines thanked the United  States for its state ment made 
regarding DSU Article  17.6, which it would carefully review. For this, it would welcome a copy of the 
full statement. The Philippines also wished to thank Japan for its well -considered remarks and 
comments on this very serious issue. The US state ment dealt with a very important principle of 
international law, namely, the distinction between questions of fact and questions of law, was 
fundamentally important, and the Appellate Body, as the ultimate reviewer of facts and law, was an 
important guardi an of international law principles. The issue of whether it was purely a question of WT/DSB/M/417  
 
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  domestic law or interpretation of the practice of the domestic law at issue, or whether it was a 
question of compliance by the domestic authorities with WTO obligat ions, h ad become quite complex.  
4.34.   The Philippines thus believed that the issue brought forward by the United  States was aimed 
at preserving the important international law principle, creating a distinction between questions of 
fact and questions of law. The Appella te Body only had jurisdiction over issues of law. As pointed 
out in prior interventions, it could become quite complex when there was a mix of these very issues 
as to how the domestic law was interpreted by domestic authorities, how the domestic law was 
interpreted by the panel, and the tricky question was then, how could the Appellate Body review 
what the panel had done. The Philippines noted that under the recognized principles, errors of fact 
or errors of interpretation of findings of fact could not be r eviewed by the Appellate Body. The 
Philippines thus welcomed this discussion, which could result in constructive guidance by the DSB 
for the Appellate Body.  
4.35.   Questions about the process had been raised by Chile, Canada and other delegations that had 
interve ned. The questions included: "What process does the United  States propose, assuming 
without agreeing or conceding that that there has been an error in certain Appellate Body reports 
regarding this important international law principle? What is the process by which the WTO system 
could then move further towards strengthening a rules -based system that the WTO Appellate Body 
and the WTO system has made great strides in?" It was on this basis that the Philippines welcomed 
the discussion, including on how to adv ance this process. Other questions included: "Is there a 
procedure for [the] correction of Appellate Body reports? Or, is there a [way] by which the [DSB] in 
adopting Appellate Body reports, even though [the Members] are aware of the reverse consensus 
rule, is there a procedure by which qualified adopting of the Appellate Body report can be made by 
the [DSB]? Or is there a process by which the [DSB] can adopt by consensus certain guiding 
principles or certain guidance for consideration by the Appellate Body ?" These were open questions 
and the Philippines thanked the United States, once again, for raising such questions. While the 
issue of questions of fact and questions of law could become very complex as pointed out in prior 
interventions, it was the duty o f the Appellate Body to preserve as much as possible of the distinction 
in order to promote and safeguard the achievements of the DSB and the Appellate Body in enhancing 
a rules -based WTO system that allowed for greater confidence in, and the promotion of,  the 
international rule of law.  
4.36.   The representative of Mexico  said that her country thanked the United States for its 
statement. Mexico would look, in detail, into the different elements that had been identified and the 
proposals that had been made. Mexico agreed with the statements made by other Members, namely, 
that facts and laws, which were addressed by these special procedures and the legal issues, which 
were raised by them, could sometimes be very complex. In light of this, Mexico understood that 
there  were cases where domestic law could not only be considered a question of fact but could be 
considered in terms of its compliance and thus become an issue of law. In addition to the elements 
proposed by the United States, Mexico was open to other options a nd views on this matter.  
4.37.   The representative of the European  Union  said that Article  17.6 of the DSU provided that "[a]n 
appeal shall be limited to issues of law covered in the panel report and legal interpretations 
developed by the panel". This provision r eflected the idea that only the panels were the triers of 
facts and that the scope of appellate review should be limited to legal issues. This was further 
reflected in Article  17.12 of the DSU, which provided that  "[t]he Appellate Body shall address each 
of the issues raised in accordance with paragraph  6 during the appellate proceedings". The EU did 
not wish to enter, at the present meeting, into a detailed discussion on particular Appellate Body 
reports mentioned by the United States in its statement. The  EU recalled that these reports had 
been adopted by the DSB. As a general observation, the EU noted that, in its view, the Appellate 
Body had fully respected the relevant provisions of the DSU. In any event, the EU was open to 
discussions on possible impro vements in the operation of the dispute settlement system.  
4.38.   The representative of the United  States  said that the United  States thanked the delegations 
that had intervened for their comments and the United States looked forward to further discussing 
this is sue with Members. With respect to Brazil's intervention, the statement would seem to overly 
complicate what was a relatively straightforward issue. The United States would again refer to its 
past DSB statement on this issue highlighting the straightforward  distinction between issues of fact 
and issues of law: "It was one thing to determine what a municipal law meant and how it operated ".70 
                                                
70 WT/DSB/M/119, para.  27 (statement of the United  States ). WT/DSB/M/417  
 
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  That was the issue of fact. "It was an entirely different matter to determine whether – given a 
particular meaning and o peration – the municipal law was consistent with WTO obligations ".71 That 
was the issue of law. And so, the United States would agree with Australia's statement that this was 
an important distinction to maintain, and it was a distinction Members had agreed to in the DSU. 
Second, the United  States would appear to have a different understanding from Brazil and China 
with respect to the purpose of the Appellate Body. China's intervention had suggested that the 
purpose of the Appellate Body was to provide a seco nd, independent review of panel reports. And 
Brazil had suggested the purpose was to review the consistency of domestic laws with the 
WTO Agreement. The United States disagreed. The limited role of the Appellate Body, as set out in 
Article  17.6 of the DSU,  was to review issues of law and legal interpretations in panel reports.  
4.39.   The DSB took note  of the statements.  
5  EUROPEAN  COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN LARGE CIVIL  AIRCRAFT  
A.  Recourse to Article  21.5 of the DSU by the E uropean  Union and Certain member States: 
Request for the establishment of a panel (WT/DS316/39)  
5.1.  The Chairperson  recalled that the DSB had considered this matter at its meeting on 
15 August  2018 and had agreed to revert to it. She drew attention to the comm unication from the 
European  Union and Certain member States contained in document WT/DS316/39, and invited the 
representative of the EU to speak.  
5.2.  The representative of the European  Union  said that the EU was requesting, for the second time, 
the establishme nt of a panel with respect to a set of additional measures taken by the EU to comply 
with the DSB's recommendations and rulings adopted on 28  May 2018 in the original compliance 
proceedings in "EC – Large Civil Aircraft" (DS316). This item had already appe ared on the Agenda 
of the special DSB meeting held on 15  August  2018. At that time, the United States had not agreed 
to the establishment of a panel. Through the specific measures detailed in the EU's second 
compliance communication, notified to the DSB on  17 May 2018, the EU had informed the DSB that 
the EU had achieved full compliance with its WTO obligations. More specifically, the EU had 
withdrawn the remaining subsidies, and/or taken appropriate steps t o remove their adverse effects.  
5.3.  At the DSB meeting  of 28 May 2018, the United  States had expressed the view that the EU had 
not yet fully complied with the recommendations and rulings of the DSB. The United  States had also 
requested the re -initiation of arbitration proceedings, indicating that it disagree d that the measures 
in the EU's second compliance communication had achieved full compliance with the EU's  WTO 
obligations. To address this disagreement, on 29  May 2018, the EU had requested consultations with 
the United  States. Those consultations had bee n held in Geneva on 27  June 2018. Unfortunately, 
these consultations had failed to resolve the dispute. Accordingly, the EU was requesting, for the 
second time, the establishment of a panel pursuant to Article  21.5 of the DSU and Article  7.4 of the 
SCM Agreement, with standard terms of reference, as provided for in Article  7 of the DSU. Given 
that this was the second time that this item appeared on the Agenda, a panel would now have to be 
established accor ding to Article  6.1 of the DSU.  
5.4.  The representative o f the United  States  said that as the United States had explained earlier 
this month of  August  2018 when the EU had first put this panel request on the Agenda, the EU's 
decision to move forward with a request for yet another compliance panel in this 14 -year dispute 
did a disservice to the WTO and its dispute settlement system. The United States referred Members 
to its statement made at the 15  August  2018 DSB meeting, and would not repeat it at the present 
meeting. Suffice it to say that instead of bringing y et another compliance proceeding in the largest 
dispute in WTO  history, the EU should make the decision to actually comply with its WTO subsidies 
obligations and seek to resolve this dispute with the United  States. The EU's failure to do so raised 
serious questions about its willingness to tax the resources of the WTO and about its oft -professed 
devotion to the multilateral trading system.  
                                                
71 WT/DSB/M/119, para.  27 (statement of the United  States). WT/DSB/M/417  
 
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  5.5.  The DSB took note  of the statements and agreed , pursuant to Article  21.5 of the DSU, to refer 
to the original Panel, if possible, the matter raised by the European  Union and Certain member 
States in document WT/DS316/39. The Panel would ha ve standard terms of reference.  
5.6.  The representatives of Australi a, Brazil , China , India, Japan  and the Russian  Federation  
reserved their third -party rights to participate in the Panel's proceedings.  
6  CANADA – MEASURES GO VERNING THE SALE OF WINE  
A.  Request for the establishment of a panel by Australia (WT/DS537/8)  
6.1.  The Chairperson  drew attention to the communication from Australia contained in document 
WT/DS537/8, and invited the representative of Australia to speak.  
6.2.  The representative of Australia  said that on 12  January  2018, his country had requested 
consultations wit h Canada on a range of measures, which discriminated against Australian wine 
imports in a manner that Australia considered to be inconsistent with Canada's WTO obligations 
under the GATT  1994. Australia and Canada had held consultations on 1  March  2018. Un fortunately, 
these consultations, and subsequent informal technical discussions with Canada, had failed to 
resolve this matter. Australia greatly valued its strong bilateral relationship with Canada and 
remained open to further discussions, both at federal  and provincial level, with a view to resolving 
the issues it had raised. However, as no concrete steps had been taken to date to respond to 
Australia's longstanding concerns, Australia was now requesting the establishment of a WTO panel 
to examine this ma tter with standard terms of reference. Australia noted that a panel was 
established by the DSB at the request of the United  States in DS531 on 20  July 2018 related to the 
same matter, Australia thus expected that the procedures for multiple complainants se t out in the 
DSU would be applicable.  
6.3.  The representative of Canada  said that his country was deeply disappointed by Australia's 
decision to request the establishment of a panel at the present meeting with respect to Canadian 
measures governing the sale of wine. Canada first flagged the serious concerns it had about 
deficiencies in the consultations request filed in this matter, which Canada had previously expressed 
to Australia. The defective consultations request had adversely affected Canada's due process  rights, 
by preventing Canada from knowing the case against it. Specifically, the request failed to sufficiently 
identify the "measures at issue", as required under DSU Article  4.4. Instead, the measures were 
defined in the request in broad and vague terms . For example, the second paragraph of the 
consultations request referred to "a range of distribution, licensing and sales measures such as 
product mark -ups, market access and listing policies, as well as duties and taxes on wine" at both 
the federal and p rovincial level, but failed to provide any information regarding the federal measures 
challenged other than simply listing two federal acts (i.e. , the Federal Importation of Intoxicating 
Liquors Act and the Federal Excise Act,  2001).  
6.4.  With respect to provin cial measures, several of the "legal and policy instruments and practices" 
listed in the consultation request simply identified "mark -ups, fees, and taxes" of a given provincial 
liquor board, without identifying any instrument. Additionally, measures  14, 15, 19, 20 and  24 listed 
"Regulations" under the corresponding provincial legislative instruments, appearing to encompass 
all regulations without distinction based on relevance for the purposes of Australia's challenge. 
Despite these concerns, Canada had en gaged constructively with Australia during consultations in 
Geneva on 1  March  2018 in order to try to resolve the matter. Given the complexity of the measures 
at issue, and the fact that Australia's challenge implicated five  Canadian jurisdictions, a resol ution 
in this regard would not come overnight. Canada believed that the parties would benefit from further 
discussions and was therefore surprised to learn that Australia had nonetheless decided to proceed 
with a panel request. Canada considered that the p anel request was premature. Furthermore, it 
appeared that the panel request actually replicated some of the defects in the consultations request. 
As a result, Canada believed it was unlikely that the panel request met the requirements of 
Article  6.2 of the  DSU. Again, this resulted in Canada's due process rights being adversely affected 
by preventing Canada from knowing the case against it. For these reasons, Canada reserved its right 
to raise its concerns under DSU Article  4.4 and DSU  Article  6.2 before a panel, should one eventually 
be established in this matter on the basis of the panel request before the DSB at the present meeting. 
Based on the foregoing, Canada was unable to agree to the establishment of a panel at the present 
meeting. Canada wished to underline the strength of its bilateral trade and overall relationship with WT/DSB/M/417  
 
- 27 - 
 
  Australia and remained open to continue its discussions with Australia with a view to resolving this 
matter.  
6.5.  The representative of the United  States  said that the United  States ful ly supported Australia's  
request for the establishment of a panel in this dispute. As the United  States had explained 
previously when it had requested the establishment of a panel in "Canada – Measures Governing 
the Sale of Wine in Grocery Stores" (Second Complaint) (DS531), the United  States had serious 
concerns that British  Columbia (BC) regulations governing the sale of wine in grocery stores 
discriminated against imported wine. On 20  July 2018, the DSB had established a panel in DS531. 
To enhance effici ency of the dispute settlement process, the United  States suggested that if and 
when a Panel was established to examine Australia's complaint contained in document  WT/DS537/8, 
the matter should be referred to the panel established on 20  July 2018 to examin e the complaint by 
the United  States, co ntained in document  WT/DS531/7.  
6.6.  The representative of Australia  said that his country took note of the matters raised by Canada 
at the present meeting in response to Australia's request for the establishment of a pan el. For the 
record, Australia disagreed with Canada's claims that Australia's consultation and panel requests did 
not meet the requirements of the DSU. The legal basis of Australia's concerns was set out properly, 
and simply reflected the breadth of concer ns that Australian producers had been raising over a 
number of years in respect of a range of measures governing the sale of wine in Canad a, and their 
WTO inconsistency.  
6.7.  The representative of Canada  said that in response to the statement made by the 
United  States, his country did not consider that it was the appropriate time to consider the issue of 
harmonization with the panel established in DS531.  
6.8.  The DSB took note  of the statements and agreed  to revert to this matter.  
7  UNITED  STATES – SAFE GUARD MEASURE ON  IMPORTS OF CRYSTALL INE SILICON 
PHOTOVOLTAIC PRODUCT S 
A.  Request for the establishment of a panel by Korea (WT/DS545/7)  
7.1.  The Chairperson  drew attention to the communication from Korea contained in document 
WT/DS545/7, and invited the representative of Kore a to speak.  
7.2.  The representative of Korea  said that on 14  August  2018, Korea had submitted its request for 
the establishment of a panel regarding "United  States – Safeguard Measure on Imports of Crystalline 
Silicon Photovoltaic Products" (DS545). For the reasons indicated in the panel request, Korea was 
concerned that the conditions for the application of a safeguard measure had not been met by the 
United  States, and that the safeguard measure was being applied in a manner that was inconsistent 
with the ob ligations of the United  States under the GATT  1994 and the Agreement on Safeguards. 
In particular, in addition to a number of procedural concerns identified in the panel request, Korea 
considered that there was no reasoned and adequate explanation of any o f the essential 
circumstances and conditions that could justify the application of safeguard measures, i.e. the 
existence of unforeseen developments, a relevant increase in imports, "serious injury" to the 
relevant domestic industry and the existence of a causal link between the allegedly increased imports 
and serious injury. Furthermore, in respect of the application of the safeguard measure, the 
United  States had failed to respect the obligation that such measures should be imposed only "to 
the extent nec essary" to prevent or remedy serious injury. In sum, as described in more detail in 
Korea's panel request, Korea considered that the US safeguard measure at issue violated a number 
of US WTO obligations and nullified or impaired the benefits accruing to Ko rea directly or indirectly 
under the said WTO Agreements. Korea had requested formal consultations with the United  States 
on this matter on 14  May 2018, in which it had engaged in good faith with a view to reaching a 
mutually satisfactory solution. Unfortu nately, the consultations had failed to resolve the dispute and 
Korea thus felt obliged to request the establishment of a panel, with standard terms of reference, to 
examine the matter set out in Korea's panel request with the  aim of resolving this dispute . 
7.3.  The representative of the United  States  said that the WTO Agreement recognized the right of 
Members to temporarily suspend concessions and other obligations when a product was being 
imported into its territory in such increased quantities and under such conditions as to cause serious WT/DSB/M/417  
 
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  injury or threat of serious injury to the Member's domestic industry. The United  States had exercised 
this right with respect to imports of crystalline silicon photovoltaic products. An independent 
investigative authority, th e US International Trade Commission, had determined that the domestic 
industry producing like or similar products had been seriously injured and that the cause of that 
injury had been increased imports of the products at issue. The US process had been open  and 
transparent, and fully in accord with both domestic US safeguard laws and WTO obligations. In 
addition, the request to establish a panel improperly included a claim, which had not been included 
in Korea's request for consultations. For these reasons, the United  States was not in a position to 
agree to the establishment of a panel at the present meeti ng. 
7.4.  The DSB took note  of the statements and agreed  to revert to this matter.  
8  UNITED  STATES – SAFE GUARD MEASURE ON IMP ORTS OF LARGE RESIDE NTIAL 
WASHERS  
A.  Request for the establishment of a panel by Korea (WT/DS546/4)  
8.1.  The Chairperson  drew attention to the communication from Korea contained in document 
WT/DS546/4, and invited the representative of Korea to speak.  
8.2.  The representative of Korea  said that on 14  August 2018, Korea had submitted its request for 
the establishment of a panel regarding the matter "United  States – Safeguard Measure on Imports 
of Large Residential Washers" (DS546). For the reasons indicated in the panel request, Korea was 
concerned that t he conditions for the application of a safeguard measure had not been met by the 
United  States, and that the safeguard measure was being applied in a manner that was inconsistent 
with the obligations of the United  States under the GATT  1994 and the Agreeme nt on Safeguards. 
In particular, and in addition to a number of procedural concerns identified in the panel request, 
Korea considered that there was no reasoned and adequate explanation of any of the essential 
circumstances and conditions that could justif y the application of safeguard measures, i.e. a relevant 
increase in imports, "serious injury" to the relevant domestic industry and the existence of a causal 
link between the allegedly increased imports and serious injury. Korea noted that the United  States 
had not even begun to examine whether the alleged increase in imports was the result of any 
unforeseen developments and of the obligations incurred by the United  States. Furthermore, in 
respect of the application of the safeguard measure, the United Sta tes had failed to respect the 
obligation that such measures should be imposed only "to the extent necessary" to prevent or 
remedy serious injury. In sum, as described in more detail in the panel request, Korea considered 
that the US safeguard measure ident ified in the panel request violated a number of US  WTO 
obligations and nullified or impaired the benefits accruing to Korea directly or indirectly under the 
said WTO Agreements. Korea noted that it had requested formal consultations with the United  States 
on this matter on 14  May 2018, in which it had engaged in good faith with a view to reaching a 
mutually satisfactory solution. Unfortunately, the consultations had failed to resolve the dispute, and 
Korea thus felt obliged to request the establishment of a  panel, with standard terms of reference, to 
examine the matter set out in its panel request to  resolve this dispute.  
8.3.  The representative of the United  States  said that as the United  States had noted with respect 
to the prior Agenda item, the WTO Agreement recognized the right of Members to temporarily 
suspend concessions and other obligations when a product was being imported into its territory in 
such increased quantities and under such conditions as to cause serious injury or threat of serious 
injury to t he Member's domestic industry. The United  States had exercised this right with respect to 
imports of large residential washers. An independent investigative authority, the US  International 
Trade Commission, had determined that the domestic industry produci ng like or similar products 
had been seriously injured and that the cause of that injury had been increased imports of the 
products at issue. The US process had been open and transparent, and fully in accord with both 
domestic US safeguard laws and WTO obl igations. For these reasons, the United  States was not in 
a position to agree to the establishment of a  panel at the present meeting.  
8.4.  The DSB took note  of the statements and agreed  to revert to this matter.  WT/DSB/M/417  
 
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  9  AUSTRALIA – CERTAIN MEASURES CONCERNING TRADEMARKS, GEOGRAPH ICAL 
INDICATIONS AND OTHE R PLAIN PACKAGING RE QUIREMENTS APPLICABL E TO TOBACCO 
PRODUCTS AND PACKAGI NG 
B.  Report of the Panel (WT/DS458/R, WT/DS458/R/Add.1 and WT/DS458/R/Suppl.1)  
C.  Report of the Panel (WT/DS467/R, WT/DS467/R/Add.1 and  WT/DS467/R/Suppl.1)  
9.1.  The Chairperson  proposed that the two sub -items under Agenda item  9 concerning the Panel 
Reports in the disputes on: "Australia – Certain Measures Concerning Trademarks, Geographical 
Indications and Other Plain Packaging Requirements A pplicable to Tobacco Products and Packaging", 
in relation to the complaints by Cuba and Indonesia in DS458 and DS467 respectively, be considered 
together. She recalled that at the meeting on 25  April 2014, the DSB had established a Panel to 
examine the com plaint by Cuba pertaining to this dispute. She also recalled that at the meeting on 
26 March  2014, the DSB had established a Panel to examine the complaint by Indonesia. The 
Reports of the Panel had been circulated on 28  June 2018, as unrestricted document s. The Panel 
Reports were, at the present meeting, before the DSB for adoption at the request of Australia. The 
adoption procedure was without prejudice to the right of Members to express their views on the 
Panel Reports. She then invited the parties to th e dispute to present views on the Reports before 
the DSB.  
9.2.  The representative of Australia  said that her country thanked the panelists for their rigorous 
and comprehensive examination of the evidence and arguments submitted by the parties in these 
disputes.  Australia also thanked the WTO Secretariat for its hard work and dedication in this dispute. 
In addition, Australia thanked the record number of third parties for their thoughtful and active 
engagement in these disputes, particularly in light of the globa l significance of the public policy 
issues under challenge. Australia welcomed the Panel Reports in DS458 and DS467, in particular the 
Panel's comprehensive:(i) rejection of all claims that Australia's tobacco plain packaging measure 
was inconsistent with WTO rules; (ii) confirmation that WTO rules did not inhibit the right of Members 
to implement legitimate, non -discriminatory public health measures; and (iii) confirmation that 
Australia's measure was making a meaningful contribution to improving public he alth in Australia. 
Australia had consistently maintained that tobacco plain packaging – a legitimate public health 
measure endorsed by leading public health experts and the World Health Organization – fully 
respected Australia's WTO  obligations. Australia regretted that it had taken more than six  years – 
from consultations to the circulation of the Panel Reports – to confirm comprehensively what 
Australia had always maintained. While Australia understood the complexity and volume of evidence 
and arguments c ontributed to the delay in the resolution of these disputes, Australia considered 
such delays an important systemic issue for the entire WTO Membership and remained keen to work 
with other Members and the Secretariat to agree concrete action that would red uce the time taken 
to resolve disputes. Australia was pleased that, despite the length of time it had taken to resolve 
these disputes, Members, including the UK, France, Ireland, New  Zealand, Hungary and Slovenia, 
had already implemented their own tobacco plain packaging measures to protect the health of their 
nationals and that a number of other Members, including Canada, Uruguay, Singapore, Belgium and 
Chile, had also already taken steps to adopt such measures. Australia welcomed the decision by 
Cuba and Indonesia not to appeal the Panel findings in these disputes, and looked forward to the 
adoption of the respective reports in DS458 and DS467 by the DSB at the present meeting. Australia 
noted that Honduras and the Dominican Republic had appealed the relat ed Panel Reports in DS435 
and DS441. Australia remained firmly committed to defending its legitimate public health measure 
in those appellate proceedings.  
9.3.  The representative of Cuba said that her country welcomed the opportunity to make the 
following state ment. The historical and cultural significance of tobacco cultivation for Cuba was 
beyond question a fact that explained Cuba's decision to submit a claim. Tobacco represented more 
than 9  per cent of the total value of Cuban exports72 and this sector was li nked to women, elderly 
people and rural workers on whom other family members depended economically. This was thus an 
essential economic pillar for various regions of Cuba, such as the province of Pinar del Río. The 
adoption of the plain packaging measures affected the legitimate interests of tobacco trademark 
owners and was not proportionate to the objective pursued, since the alleged health benefits for 
consumers had not been shown to be greater than the effects it generated. The evidence produced 
by Cuba and other complainants demonstrated that plain packaging did not contribute to any change 
                                                
72 According to official statistics from the National Statistics Office (ONEI).  WT/DSB/M/417  
 
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  in smoking behaviour. In fact, when it came to the relevant mechanisms by which plain packaging 
was supposed to help to curb smoking, the results confirmed Cuba's pos ition that the measure had 
had no effect.  
9.4.  Cuba believed that the market data and studies on smoking behaviour in Australia revealed 
that the said measure had not contributed to a reduction in smoking. There was no empirical 
evidence that linked plain packa ging with a drop in tobacco consumption. Although the declared 
purpose of the plain packaging measure might be health as a right that had to be protected by the 
state, being of general interest, the fact was that these measures contributed to the loss of a ttributes 
and functions of brands, thereby increasing the risk of confusion among consumers. The packaging 
of tobacco products was no less attractive following the implementation of plain packaging, since 
graphic health warnings had already taken up 75  per cent of the packaging. In fact, the consumer 
behaviour that Cuba recognized with plain packaging brought down trading rather than reducing 
consumption or the prevalence of smoking, which was the said objective pursued by Australia in 
implementing the meas ure in question. Cuba confirmed that the plain packaging measures could not 
"justify" the total "encumbrance" imposed on Cuban trademarks for the purposes of Article  20 of the 
TRIPS Agreement. Moreover, Australia had reduced the protection of geographical indications in 
violation of Article  24.3 of the TRIPS  Agreement. The plain packaging measures were much more 
trade restrictive than necessary to fulfil Australia's objective to curb tobacco consumption, and 
therefore violated Article  2.2 of the TBT Agreeme nt. Similarly, the measures violated Article  IX:4 of 
the GATT  1994 in that they limited the use of trademarks for products. Cuba found the Panel Report 
extremely disappointing, not only because it rejected the claims of the complainants, but also 
because o f the way in which it did so. The Panel's general approach and the numerous specific 
elements of the Report suggested that the Panel's analysis essentially consisted of arguments 
against smoking and was not based on any objective evaluation of the argument s and evidence 
before it. Instead, the Report gave the impression that the analysis had been drafted to justify a 
conclusion that had been reached in advance. In other words, this was a case of "reverse 
engineering". Plain packaging was too drastic a measu re to meet the objective of protecting health; 
in fact, it could be counter -productive by making counterfeiting easier and cheaper, and by 
increasing tobacco consumption. Despite Cuba's serious concerns with the Panel Report, Cuba 
wished to notify official ly that it wou ld not appeal the Panel Report.  
9.5.  The representative of Indonesia  said that her country wished to recognize the thorough 
assessment by the Panel of Indonesia's claims in DS467. Indonesia also welcomed the participation 
of numerous other WTO Mem bers who had expressed their interest in this matter, which would have 
far-reaching implications and create precedent for other product labelling/packaging regulations. 
Indonesia recognized that this dispute raised serious questions about the integrity of the multilateral 
trading system and the ability of WTO Members to safeguard public health. The Panel's decision was 
certainly not what Indonesia had expected. While Indonesia understood and respected Australia's 
desire to protect public health and reduce t he consumption of tobacco products within its borders, 
Indonesia remained concerned that its plain packaging requirements were more restrictive of trade 
than necessary to accomplish legitimate health objectives. Indonesia was and had been a major 
producer and exporter of tobacco products. Millions of Indonesians depended on the local tobacco 
industry for employment and support. Nevertheless, Indonesia was not against all efforts to address 
the harmful effects of tobacco products. In fact, Indonesia had adop ted measures designed to 
discourage people from consuming tobacco products. The latest measure adopted by Indonesia was 
the mandatory display of graphics on tobacco packaging that illustrated health risks caused by 
smoking. Indonesia believed that the deci sion of the Panel in DS467 was not just about the regulation 
of tobacco products and packaging, but that the Panel Report in this dispute would harm trade of 
other perfectly legal and legitimate products such as certain foods and drinks. There had been cal ls 
to introduce measures similar to tobacco plain packaging to high -fat and high -sugar products in 
order to combat obesity and diabetes. As a result of the Panel's decision, plain packaging 
requirements might now be applied to alcoholic beverages for relig ious or moral reasons. In short, 
Indonesia feared that the ruling in DS467, and its companion disputes, signalled the beginning of a 
slippery slope to fundamental disruption of global consumer markets. Indonesia would continue 
defending the interests of it s key industries and sectors against measures that were incon sistent 
with international law.  
9.6.  The representative of Canada  said that his country appreciated the opportunity to make a 
statement on the adoption of the Panels' findings in these disputes. These  disputes were significant 
and consequential given their public health dimension. Canada had participated as a third party in 
these disputes because it had a systemic interest in preserving an interpretation of the WT/DSB/M/417  
 
- 31 - 
 
  WTO Agreements that reflected the careful  balance struck between rights and obligations to facilitate 
trade and a Member's right to take legitimate public health measures, such as tobacco plain 
packaging. Further, as WTO Members might be aware, Canada was currently moving forward on its 
own commi tment to introduce plain packaging measures for tobacco products. Canada believed that 
the Panel had been correct to conclude that Australia's plain packaging measures were consistent 
with the provisions under the WTO Agreement that had been at issue in th ese disputes. Canada 
wished to thank the Panel and the Secretariat for their time and dedicatio n in these important 
disputes.  
9.7.  The representative of New Zealand  said that his country welcomed the Panel Reports in the 
disputes brought by the Dominican  Republ ic, Cuba and Indonesia on Australia's plain packaging 
regime. The decisions had fully upheld Australia's right to regulate for public health purposes by 
means of tobacco plain packaging. New  Zealand supported the adoption of the Reports by the WTO 
Membersh ip in the usual way. The Panel had ultimately found that Australia's plain packaging 
measures had not violated the WTO Agreements, nor undermined the protection afforded to 
trademarks and geographical indications under the TRIPS Agreement. New  Zealand had actively 
supported Australia's defence of its plain packaging regime as a third party to these disputes and 
New Zealand would continue to participate as a third party in the appeal's proceedings, in support 
of the Panel's confirmation of the fundamental ri ght of Members to implement measures neces sary 
to protect public health.  
9.8.  The representative of Uruguay  said that her country had participated as a third party in this 
dispute, which was an issue of great interest to her country. Uruguay fully supported he statement 
made by Australia. In particular, Uruguay welcomed the conclusions of the Panel and supported the 
adoption of the Reports at the present meeting.  
9.9.  The representative of Norway  said that, as had been repeatedly stressed in various fora, public 
health and tobacco control were topics of particular interest to Norway. In Norway's view, it was 
within the rights of each WTO Member to adopt measures, which were necessary to protect pu blic 
health, as long as the measures chosen were consistent with the WTO Agreements. Plain packaging 
of tobacco products was a recommended measure under the WHO Framework Convention on 
Tobacco Control. It was Norway's firm view that the Framework Conventio n and the relevant 
WTO Agreements were mutually supportive, and that it was possible to implement measures 
intended to regulate the packaging of tobacco products in line with both sets of binding obligations. 
Norway was therefore pleased to note the Panel' s acknowledgement of Australia's right to introduce 
this type of measures, in consistency with its WTO obligations, to fulfil its obligations under the 
Framework Convention in order to protect public health.  
9.10.   The representative of European  Union  said that h is delegation thanked the Panel for its work 
on the complex issues raised in these cases. The EU welcomed the clarifications brought by these 
Reports on the balance between health and other interests in domestic measures, under the prism 
of three WTO Agree ments, namely the TRIPS Agreement, the TBT Agreement and the GATT  1994.  
9.11.   The DSB took note  of the statements and adopted  the Panel Reports contained in 
WT/DS458/R, Add.1 and Suppl.1 and WT/DS467/R, Add.1 and Suppl.1.  
10  INDONESIA – SAFEGUAR D ON CERTAIN IRON OR  STEEL PRODUCTS  
A.  Report of the Appellate Body (WT/DS490/AB/R and WT/DS490/AB/R/Add.1) and 
Report of the Panel (WT/DS490/R and WT/DS490/R/Add.1)  
B.  Report of the Appellate Body (WT/DS496/AB/R and WT/DS496/AB/R/Add.1) and 
Report of the Panel (WT/DS496/R and WT/DS496/R/Add.1)  
10.1.   The Chairperson  proposed that the two sub -items under Agenda item  13 concerning the 
Appellate Body Reports and the Panel Reports in DS490 and DS496 respectively were taken up 
together. She drew attention to the communication from the Appellate Body contained in documents 
WT/DS490/9 – WT/DS496/10 transmitting the Appellate Body Reports on: "Indonesia – Safeguard 
on Certain Iron or Steel Products", which had been circulated on 15  August  2018 in documents 
WT/DS490/AB/R and  Add.1, and in W T/DS496/AB/R and  Add.1. She reminded delegations that the 
Appellate Body Reports and the Panel Reports pertaining to these disputes had been circulated as WT/DSB/M/417  
 
- 32 - 
 
  unrestricted documents. As Members were aware, Article  17.14 of the DSU required that: "[a]n 
Appellat e Body report shall be adopted by the DSB and unconditionally accepted by the parties to 
the dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 
30 days following its circulation to Members. This adoption procedure is without prejudice to the 
right of Members to express their view s on an Appellate Body report".  
10.2.   The representative of Chinese  Taipei  said that his delegation thanked the Appellate Body, the 
Panel and the Secretariat for their hard work on these disputes. Ch inese Taipei also thanked the 
parties and all third participants for their constructive participation during the course of these 
proceedings. Chinese Taipei was pleased that the Appellate Body had confirmed that the Panel 
requests had properly raised a cla im under Article  I:1 of the GATT  1994 against the Indonesian 
specific duty as a stand -alone measure, and thus, upheld the Panel's finding that the application of 
the specific duty was inconsistent with Indonesia's MFN obligation under Article  I:1 of the 
GATT 1994. Chinese Taipei was, however, disappointed that the Panel and the Appellate Body had 
not accepted the parties' arguments regarding characterization of the disputed measure. According 
to the Panel and the Appellate Body, to constitute a safeguard me asure within the meaning of 
Article  XIX of the GATT  1994 and Article  1 of the Agreement on Safeguards, a measure had to result 
in the suspension of a GATT obligation or the withdrawal or modification of a tariff concession, and 
such suspension, withdrawal or modification had to be designed to prevent or remedy the serious 
injury. As Chinese Taipei had demonstrated throughout the course of proceedings, it did not think 
that the language of Article  XIX of the GATT  1994 required such "constituent features". 
Chinese Taipei was concerned that the finding of the Panel and the Appellate Body might add a 
degree of uncertainty to the multilateral safeguard mechanism. Specifically, Members now had to 
conduct their own independent assessment of whether a purported safe guard measure possessed 
these so -called "constituent features" before they could decide to exercise their rights under the 
Agreement on Safeguards, for example, to request for consultations under Article  12 or to pursue 
retaliatory actions under Article  8. Chinese Taipei also recalled that one of the purposes of the 
Agreement on Safeguards was "to re -establish multilateral control over safeguards and eliminate 
measures that escape such control". In the event that a Member was willing to subject its measure 
to stricter scrutiny under the Agreement on Safeguards, as in this dispute, Chinese  Taipei did not 
see why the multilateral trading system should refuse it. Despite the above -mentioned concerns, 
Chinese Taipei was overall pleased with the outcome in this d ispute and welcomed the adoption of 
the Appellate Body and the Panel Reports. Chinese Taipei looked forward to working with its 
co-complainant and Indonesia to achieve prompt, effective  and WTO -consistent compliance.  
10.3.   The representative of Viet Nam said tha t her country echoed the statement made by 
Chinese  Taipei in thanking the Appellate Body, the Panel and the Secretariat for their hard work on 
these disputes. Viet Nam also thanked the parties and third participants for their constructive 
participation dur ing these proceedings. Viet Nam welcomed the adoption of the Appellate Body and 
Panel Reports in these disputes. In Viet Nam's view, the measure at issue was clearly inconsistent 
with the WTO  Agreement. However, it had taken almost three  years of proceedin gs to obtain a 
positive ruling. The panel process had been beset with delays because of human resource constraints 
in the WTO  Rules Division. Viet  Nam's panel had been established on 28  October  2015 to examine 
a measure that was supposed to expire on 21  July 2017. However, the Panel had taken almost 
22 months to complete its work. If the Panel had done its work in accordance with the DSU  
time-frame, or even within a year from its establishment or composition, the Report would have 
been circulated almost a y ear in advance of the extension of the original measure. Thus, it would 
have been unnecessary to debate on appeal whether the extension had been within the terms of 
reference of this dispute. Furthermore, Viet  Nam was also concerned about the findings of t he Panel 
and the Appellate Body that Indonesia's specific duty was not a safeguard measure under Article  XIX 
of the GATT  1994 and the Agreement on Safeguards. Viet  Nam was afraid that Members that were 
requested to conduct a safeguard investigation could n ow skip their relevant obligations under the 
Agreement on Safeguards, including notification, consultations and gradual liberalization 
requirements, if they decided not to impose measures that exceeded their tariff binding or impose 
quantitative restrictio ns. Nonetheless, if a Member wished its measure to be a "WTO safeguard" (for 
example, because of regional commitments that only allow the imposition of WTO safeguards against 
regional partners), it had to impose a more trade -restrictive measure, such as hi gher duties above 
the bound rates or quotas in the case of unbound items. Only in this manner could a Member apply 
a "safeguard measure" for purposes of Article  XIX of the GATT  1994. The Appellate Body had not 
considered that the exclusion of developing co untry imports from a safeguard measure was a 
relevant suspension under Article  XIX. Viet  Nam recalled that the exclusion of developing country 
imports was part of the requirement to apply a measure "only to the extent necessary". However, WT/DSB/M/417  
 
- 33 - 
 
  the Appellate Bod y had regarded the "necessity" requirement as unrelated to the legal 
characterization of a measure as a safeguard. Viet  Nam was not convinced about this point. For 
example, for an item bound at the level of 50  per cent ad valorem , the choice of imposing a measure 
"only to the extent necessary" at levels above or below 50  per cent would be determinative of 
whether the measure was a safeguard. If it was set at above 50  per cent, it would be so. If not, the 
measure would not be a safeguard. Thus, in establishi ng the extent necessary of a measure, a 
Member might or might not have suspended the GATT  1994 obligation, and affected the legal 
characterization of the measure as a safeguard, contrary to what the Appellate Body had stated in 
its Report. Viet  Nam was loo king forward to the implementation of these Reports. Viet Nam hoped 
that Indonesia would decide to comply with the rulings and recommendatio ns immediately.  
10.4.   The representative of Indonesia  said that on the 15  August  2018, Indonesia had received the 
Appellat e Body Report concerning "Indonesia – Safeguard on Certain Iron on Steel Products". 
Although Indonesia, Chinese  Taipei and Viet  Nam had appealed that the measure at issue was, in 
fact, a safeguard measure, the Appellate Body, however, upheld the Panel's fi nding to rule otherwise, 
and had, therefore, rejected all claims submitted by Chinese  Taipei, Viet  Nam and Indonesia relating 
to Article  XIX of the GATT  1994 or the Agreement on Safeguards. In accordance with the Appellate 
Body Report, the measure at issue  had only been found to be inconsistent with Article  I:1 of the 
GATT  1994. This was due to the fact that during its implementation there had been certain WTO 
developing countries, which had been exempted from the said measure. Although Indonesia had 
appeal ed that this so -called stand -alone claim had not been clearly identified in the Panel request, 
Indonesia, nevertheless, respected the result of Appellate Body ruling, which was the highest 
adjudicative body in the WTO dispute settlement system. Indonesia a ppreciated the Panel's and 
Appellate Body's decision to reject Chinese  Taipei's request for a recommendation that the only way 
for Indonesia to implement the Panel's and Appellate Body's ruling was to immediately withdraw the 
measure at issue and to grant Indonesia discretion on how to implement the ruling. Indonesia took 
note that the Panel and the Appellate Body also clarified that commitments under FTAs were not 
part of WTO covered agreements and therefore could not be raised in a WTO dispute settlement 
proceeding. Indonesia respected the Panel's and Appellate Body's ruling that would be adopted at 
the present DSB meeting and noted that Indonesia would endeavour to implement the adopted 
Report withi n a reasonable period of time.  
10.5.   The representative of European  Union  said that his delegation thanked the Panel, the 
Appellate Body and the Secretariat for their work in these disputes. The EU wished to highlight 
several of the Appellate Body's clarifications. The EU welcomed the clarification that Article  XIX:1(a) 
of the GATT  1994 did not expressly define the scope of the measures that fell within the WTO  
safeguard disciplines, nor did it list the GATT  1994 obligations that might be suspended, for a 
measure to qualify as a safeguard measure (paragraphs  5.57 a nd 5.58 of the Appellate Body 
Report). Instead, whether a measure constituted a safeguard measure could be determined only on 
a case -by-case basis. The Appellate Body had cautioned that in carrying out the analysis, a 
distinction had to be made between the  features that characterized a safeguard measure and the 
conditions for the measure to be consistent with the Safeguards Agreement and the GATT  1994, 
"[p]ut differently, it would be improper to conflate factors pertaining to the legal characterization of 
a measure for purposes of determining the applicability of the WTO  safeguard disciplines with the 
substantive conditions and procedural requirements that determine the WTO -consistency of a 
safeguard measure" (paragraph 5.57 of the Appellate Body Report). Fo r example, the specifications 
in Articles  5.1 and  7.1 of the Agreement on Safeguards that safeguard measures should be applied 
"only to the extent" and "only for such period of time" as might be "necessary to prevent or remedy 
serious injury and to facilit ate adjustment" were not relevant for the legal characterization of a 
measure as a safeguard measure, for purposes of determining the applicability of WTO safeguard 
disciplines. In contrast, they related to the WTO -conformity of a safeguard measure (paragr aph 5.59 
of the Appellate Body Report). On the question which measure could be considered a safeguard 
measure under Article  XIX of the GATT  1994, the Appellate Body had further clarified that it had to 
present certain constituent features, absent of which it could not be considered a safeguard measure. 
Such constituent features included, "[f]irst, that measure must suspend, in whole or in part, a 
GATT  1994 obligation or withdraw or modify a GATT  1994 concession. Second, the suspension, 
withdrawal or modific ation in question must be designed to prevent or remedy serious injury to the 
Member's domestic industry caused or threatened by increased imports of the product" 
(paragraph  5.60 of the Appellate Body Report). The Appellate Body had further developed in 
paragraph  5.60 of its Report that "[i]n order to determine whether a measure presents such 
features, a panel is called upon to assess the design, structure, and expected operation of the 
measure as a whole. In making its independent and objective assessment,  a panel must identify all WT/DSB/M/417  
 
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  the aspects of the measure that may have a bearing on its legal characterization, recognize which 
of those aspects are the most central to that measure, and thereby, properly determine the 
disciplines to which the measure is subj ect". However, the Appellate Body had pointed out that "no 
one such factor is, in and of itself, dispositive of the question of whether the measure constitutes a 
safeguard measure within the meaning of Article  1 of the Agreement on Safeguards" 
(paragraph  5.60 of the Appellate Body Report).  
10.6.   The representative of Australia  said that her country welcomed the Appellate Body's findings 
in this dispute. Australia particularly welcomed the Appellate Body's clarification of two fundamental 
legal issues, namely (i) the constituent elements of a safeguard; and (ii) the obligations that could 
relevantly be suspended for the purpose of Article  XIX:1(a) of the GATT  1994. In Australia's view, 
these appellate proceedings had underscored the importance of third party partic ipation in the 
adjudication of WTO disputes since all the participants had adopted identical positions with respect 
to a number of fundamental legal issues, the input of third participants had been essential for raising 
a broader spectrum of interpretative  perspectives. In this regard, Australia noted that it had 
advocated the approach ultimately taken by the Appellate Body in this case, which had confirmed 
that a safeguard measure had to have a particular content (the suspension of a GATT  1994 
obligation, or withdrawal or modification of a concession) and a particular objective (preventing or 
remedying serious injury to the Member's domestic industry); and importantly, the content and 
objective of a safeguard measure were linked – namely that in order to co nstitute a safeguard 
measure under Article  XIX:1(a), the suspension of the obligation (or withdrawal or modification of 
the concession) had to have the aim of preventing or remedying serious injury to the Member's 
domestic industry. As Australia had argued  during the appellate proceedings, giving proper effect to 
these constituent elements of a safeguard measure preserved the balance of rights and obligations 
of Members by ensuring that measures that did not involve any suspension of a GATT  1994 obligation 
– and which Members were therefore free to impose – were not subject to additional disciplines; and 
measures that purported to "suspend" a GATT  1994 obligation but not for the purpose provided in 
Article  XIX:1(a) constituted a breach of the relevant obliga tion and were action able as such by 
another Member.  
10.7.   The representative of Mexico  said that her country had not participated as a third party in this 
dispute. Nevertheless, Mexico thanked the members of the Appellate Body for their dedication in the 
analysi s of the nature of safeguard measures. The Report covered the key elements and 
characterizations of safeguard measures, and highlighted that, irrespective of the characterization 
of a measure by a Member (whether they were a complainant or a defendant), an d the internal 
procedures through which such safeguard measures were adopted. These measures were subject to 
review by panels, which were required to carry out an evaluation of the application of the relevant 
covered agreements. Mexico also appreciated the  guidance provided with respect to the two main 
issues addressed in the Report, namely, first, the distinction made by the Appellate Body between 
the elements that defined a safeguard measure and that determined the applicability of the relevant 
WTO Agreem ent, and the elements that related to the conformity of the measure with WTO  
provisions; and second, the possibility to suspend the MFN obligation when a specific objective was 
being pursued. Mexico welcomed  the adoption of these Reports.  
10.8.   The representativ e of Canada  said that his country was pleased that the Appellate Body had 
confirmed the legal standard for determining whether a measure qualified as a safeguard measure 
within the meaning of the Agreement on Safeguards and Article  XIX of the GATT  1994. In  particular, 
Canada noted that the Appellate Body had clarified that a panel was not constrained by how a 
responding Member characterized its measure. Rather, panels had to undertake an objective 
assessment of the design, structure and operation of the mea sure in determining whether it 
constituted a safeguard measure. Canada agreed with the Appellate Body that it was necessary for 
a panel to undertake such an objective assessment in determining whether an impugned measure 
constituted a safeguard measure.  
10.9.   The DSB took note  of the statements and adopted  the Appellate Body Report contained in 
WT/DS490/AB/R and Add.1, and the Panel Report contained in WT/DS490/R and Add. 1, as modified 
by the Appellate Body Report ; and the DSB adopted  the Appellate Body Report  contained in 
WT/DS496/AB/R and Add.1, and the Panel Report contained in WT/DS496/R and Add. 1, as modified 
by the Appellate Body Report.  WT/DSB/M/417  
 
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  11  APPELLATE BODY APPOI NTMENTS: PROPOSAL BY  ARGENTINA; AUSTRALI A; THE 
PLURINATIONAL STATE OF BOLIVIA; BRAZIL; CANADA; CHI LE; CHINA; COLOMBIA;  
COSTA  RICA; DOMINICAN REPU BLIC; ECUADOR; EL  SALVADOR; THE EUROPEAN  UNION; 
GUATEMALA; HONDURAS;  HONG  KONG, CHINA; I CELAND; INDIA; INDON ESIA; ISRAEL; 
KAZAKHSTAN; KOREA; M EXICO; NEW  ZEALAND; NICARAGUA; NORWAY; P AKISTAN; 
PANAMA; PARAGUAY; PERU; THE RUSSIAN  FEDERATION; SINGAPORE;  SWITZERLAND; 
THE SEPARATE CUSTOMS  TERRITORY OF TAIWAN , PENGHU, KINMEN AND  MATSU; 
TURKEY; UKRAINE; URU GUAY; THE BOLIVARIAN  REPUBLIC OF VENEZUE LA AND VIET  NAM 
(WT/DSB/W/609/REV.4)  
11.1.   The Chairperson  said that this item w as on the Agenda of the present meeting at the request 
of Mexico, on behalf of several d elegations. In this regard, she  drew attention to the proposal 
contained in document WT/DSB/W/609/Rev.4 and invited the representative of Mexico to speak.  
11.2.   The represent ative of Mexico  said that the delegations who co -sponsored document 
WT/DSB/W/609/Rev.4 had agreed to submit the joint proposal dated 17 May  2018, to launch the 
selection processes to fill the vacancies in the Appellate Body. Mexico, speaking on behalf of 
67 Members, said that the considerable number of Members supported this joint proposal and this 
reflected their joint concern with the current situation in the Appellate Body. This situation was 
seriously affecting the AB work and the overall dispute settle ment system against the best interest 
of Members. WTO Members had a responsibility to safeguard and preserve the Appellate Body, the 
dispute settlement and the multilateral trading systems. Thus, it was the WTO  Membership's duty 
to proceed with the launch of the selection processes for new Appellate Body members, as set out 
in the proposal that was before the DSB at the present meeting. This proposal sought: (i) to start 
three selection processes, namely: to replace Mr. Ricardo Ramírez -Hernández, whose seco nd term 
had expired on 30  June 2017; to fill the vacancy that had arisen with the resignation of Mr. Hyun 
Chong Kim with effect from 1  August  2017; and to replace Mr. Peter Van den Bossche, whose second 
term had expired on 11  December  2017; (ii) to establi sh a Selection Committee; (iii) to set a 
deadline of 30  days for the submission of candidacies; and (iv) to request the Selection Committee 
to make its recommendation within 60  days, from the deadline for nominations of candidates. While 
the proponents wer e flexible with regard to the deadlines for the selection processes, these should, 
however, take into account the urgency of the situation. The co -sponsors of the proposal continued 
to urge all Members to support this proposal in the interest of the multil ateral trading system and  
the dispute settlement system.  
11.3.   The representative of the United  States  said that the United  States thanked the Chairperson 
for the continued work on these issues. As the United States had explained in prior meetings, the 
United  States was not in a position to support the proposed decision. The systemic concerns that 
the United States had identified remain unaddressed. For example, at the DSB meeting in 
August  2017, the United States had made clear its concerns with the issuance of appellate reports 
by individuals who were no longer members of the Appellate Body. Yet, one year later, an individual 
who was not currently a member of the Appellate Body continued to decide appeals. As the 
United  States had explained many times, it was fo r the DSB, not the Appellate Body, to decide 
whether a person who was no longer an Appellate Body member could continue to serve on an 
appeal.73 The United States referred back to its statements at earlier DSB meetings for more 
elaboration on its concerns. The United States therefore would continue its efforts and its discussions 
with Members and with the Chairperson to seek a solution on these important issues.  
11.4.   The representative of Argentina  said that in addition to co -sponsoring the proposal that had 
just been re -submitted, more than one year after it had been first submitted to the DSB, Argentina 
wished to express its commitment to the rules -based multilateral trading system. This commitment 
had been reflected in its decisions to host the MC -11 and to put  forward an Argentine candidate to 
fill one of the vacancies in the WTO  Appellate Body. In this context, Argentina wished to express its 
grave concern regarding the current situation of the multilateral trading system, and the "abnormal" 
functioning of the  Appellate Body in particular. For over a year, the DSB had been unable to meet 
its obligation to initiate the selection processes to replace the Appellate Body members whose 
mandates had come to an end. Several Members had requested that measures be taken  regarding 
both substantive and procedural matters relating to the dispute settlement system, before the 
Appellate Body selection processes could be launched. Members had also flagged the possible risks 
                                                
73 "Understanding on Rules and Procedures Governing the Settlement of Disputes ", Arts. 17.1, 17.2 
("DSU").  WT/DSB/M/417  
 
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  that a delay in initiating the selection processes wo uld pose for the dispute settlement system, and 
the impact that such a situation would have on the multilateral trading system if it was not resolved 
swiftly. The current deadlock regarding the selection processes could bring the system to a standstill, 
if it continued. To address the present situation, Argentina thus requested, as a matter of urgency, 
the initiation of a frank and pragmatic dialogue, which should include all stakeholders and focus on 
specific issues that were considered as obstacles to the  launch of the selection processes. It appeared 
that several informal proposals had already been placed on the table. These proposals had been 
circulated in various forms by a number of Members, and aimed to address the concerns raised. 
Given the urgency o f the situation, Members had to take action and quickly decide on an appropriate 
forum in which such technical discussions could be held, so that measures could be taken promptly 
to launch the selection processes. Argentina agreed that Members could first address the concerns 
that had been raised, which, given their procedural nature, could be addressed in the short term to 
unblock the selection processes. Then, Members could turn to the more substantive matters that 
required more time for discussion. Argen tina was willing to contribute towards the clarification of 
the relevant rules of the Working Procedures for Appellate Review, and eventually those of the DSU, 
which were directly related to the issues that were preventing the launch of the selection proce sses, 
and to address the initiatives that would ensure the smooth and more effective functioning of  the 
dispute settlement system.  
11.5.   The representative of Canada  said that his country deeply regretted that the DSB had been 
unable to meet its legal obligation  under DSU Article  17.2 to appoint Appellate Body members as 
vacancies arose. Canada agreed that it was time to start a process or, if necessary, several processes 
to select new Appellate Body members for the three current vacancies. Canada was pleased to join 
the proposal and urged the DSB to adopt it without further delay. Like other Members, Canada was 
disappointed that the United  States had linked the start of the Appellate Body selection processes 
to the resolution of certain procedural concerns it had  shared with Members. Canada invited the 
United  States to engage in discussions with interested Members with a view to expeditiously 
developing a solution to the concerns that it had raised. Canada remained committed to working 
with other interested Member s, including the United States, with a view to finding a way to address 
those concerns so as to allow the selection processes to start and be completed as soon as possible.  
11.6.   The representative of Brazil  said that his country shared the disappointment expres sed by 
other Members regarding the long and continued impasse concerning the selection processes of new 
Appellate Body members, and was ready to engage with all Members in a serious, concrete and 
substantive discussion to overcome the impasse. Any concerns  that the United  States might have 
regarding Rule  15, or any other issue, could not serve as a justification for violating other mandatory 
obligations, such as the one contained in Article  17.2 of the DSU. There was no need to elaborate 
on the consequences  of accepting the proposition that any concerns raised by Members could block  
the functioning of WTO bodies.  
11.7.   The representative of Thailand  said that her country wished to refer to its statements made 
in previous DSB meetings, and reiterated its support fo r launching the selection processes as soon 
as possible.  
11.8.   The representative of China  said that his country wished to echo the statement made by 
Mexico, on behalf of 67  Members, and was disappointed that the selection processes could, once 
again, not be initiated. China referred to its previous statements made on this matter. China believe d 
that when Members had different views on a specific issue, discussion and negotiation were the only 
way to move forward. However, the United States constantly refused to engage in meaningful 
discussions after raising its concerns with respect to the func tioning of the Appellate Body. Again, 
China urged the United States to meet its commitments under the WTO Agreements and to interpr et 
all WTO rules in good faith.  
11.9.   The representative of Australia  said that her country referred to its previous statements mad e 
on this matter and reiterated its serious concerns regarding the DSB's longstanding inability to 
commence Appellate Body appointment processes. Australia remained committed to resolving this 
impasse as a priority, and was ready and willing to work with o ther Members on pragmatic solutions.  
11.10.   The representative of Norway  said that her country referred to previous statements made in 
the DSB related to the same Agenda item. Norway continued to encourage all Members to support 
the proposal to launch the process  of filling the vacancies in the Appellate Body without further 
delay, in order to surpass the deadlock that Members had been facing for over a year. Norway WT/DSB/M/417  
 
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  continued to have the well -functioning of the dispute settlement system and the Appellate Body as 
a key priority. Although Norway did not agree that there was a link between filling the vacancies and 
resolving the procedural and systemic issues raised before the DSB, Norway reiterated its continued 
openness and willingness to engage constructively with all and any Member on their grievances with 
the system.  
11.11.   The representative of Switzerland  said that her country referred to its statements made on 
this matter at previous DSB meetings. Once again, Switzerland reiterated its deep systemic concerns 
about thi s ongoing deadlock. This situation was worsening with detrimental consequences for the 
integrity of the multilateral trading system. Switzerland reiterated its call on all Members, and in 
particular major ones, to engage seriously in order to find a way fo rward and overcome this impasse 
witho ut further delay.  
11.12.   The representative of Korea  said that his country supported the statement made by Mexico, 
on behalf of the proponents of the joint proposal. Korea wished to refer to its previous statements 
made in t he DSB, under this Agenda item.  
11.13.   The representative of Japan  said that his country supported the joint proposal and referred 
to its previous statements made on this matter.  
11.14.   The representative of Singapore  said that his country referred to its previous stateme nts 
made on this matter, and reiterated its serious systemic concerns about the lengthy delays in 
launching the Appellate Body selection processes. Following the present meeting, there would be 
only one more regular DSB meeting, i.e. on 26  September  2018, before the term of another 
Appellate Body member would expire on 30  September  2018. Given the great urgency of the 
situation, Singapore welcomed the Chairperson's efforts with regard to the possible reappointment 
of that Appellate Body member and the filli ng the other Appellate Body vacancies. Systemic issues, 
which had been raised, could be discussed in a separate process. Singapore stood ready to engage 
constructively and work with other Members, as well as the Chairperson, to help resolve this 
impasse.  
11.15.   The representative of Chinese  Taipei  said that his delegation referred to its statements made 
in previous DSB meetings, and reiterated its support to initiate the selection processes as soon as 
possible.  
11.16.   The representative of Chile said that his country sup ported the statement made by Mexico 
under this Agenda item, and wished to reiterate its statement made under item  4 of the present 
meeting, namely, that Chile wishe d to work on finding solutions.  
11.17.   The representative of India said that her country referred t o its previous statements made 
on this matter and emphasized India's willingness to engage constructively with Members that 
offered concrete proposals and solutions to address the concerns that they had raised about the 
functioning of the Appellate Body. I ndia believed, however, that the Appellate Body selection 
processes should not b e held hostage to this process.  
11.18.   The representative of Hong Kong, China  said that his delegation referred to its statements 
made in previous DSB meetings on this matter. Hong Ko ng, China reiterated its deep concerns with 
the prolonged impasse over the selection process. While some procedural and systemic concerns 
about the dispute settlement system had been raised, Hong Kong, China did not see any linkage 
between those concerns a nd the launch of the AB selection processes. The WTO Membership's 
imminent task was to avoid a dysfunctional Appellate Body that would seriously affect the normal 
operation of the dispute settlement system. Hong Kong, China urged Members to show flexibilit y in 
resolving the deadlock  as soon as possible.  
11.19.   The representative of New Zealand  said that his country referred to its previous statements 
made on this issue. New Zealand associated itself with the statement made by Mexico in particular, 
and the comment made by Singapore. Obviously, this was an issue of great systemic importance 
and one that New Zealand wished to se e resolved as soon as possible.  
11.20.   The representative of Mexico , speaking on behalf of the 67  co-sponsors of the proposal, said 
that the proponen ts regretted that, for the fifteenth time, the WTO Membership was unable to reach WT/DSB/M/417  
 
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  consensus to start the Appellate Body vacancies selection processes and had, thus, failed to fulfil 
their duty as WTO Members. No discussion should prevent the Appellate Body  from continuing to 
function fully and WTO Members should comply with their DSU obligation to fill the vacancies as they 
arose. By failing to act at the present meeting, the WTO Membership would maintain the current 
situation, which was seriously affecting  the work of the Appellate Body against the best interest of 
its Members.  
11.21.   The representative of European  Union  said that his delegation wished to make brief 
comments for the record. The EU noted that with each passing month, the gravity and urgency of 
the situation increased. WTO Members had a shared responsibility to resolve this issue as soon as 
possible. The EU thanked all Members that co -sponsored the joint proposal, and referred to its 
statements made on this issue in previous DSB meeti ngs, starting in  February  2017.  
11.22.   The representative of Guatemala  said that his country wished to join other delegations that 
had already expressed their concerns, and referred to its statements made on this m atter at previous 
DSB meetings.  
11.23.   The representative of Costa Rica , speaking on behalf of the GRULAC,  said that the WTO was 
undergoing a delicate situation due to the deadlock in replacing and appointing new Appellate Body 
members. First, the GRULAC wished to recognize the Chairperson's efforts towards finding a solution 
to this problem and appreciated the opportunities that the Chairperson had provided to Members to 
express their views on the situation. In this respect, the GRULAC wished to emphasize its deep 
concern about the current situation, which affected the functio ning of one of the WTO's principal 
bodies. If this problem was not resolved, it would lead, in the short term, to the paralysis of the 
Appellate Body, putting the entire dispute settlement system at risk. The GRULAC noted that the 
delay in launching the se lection processes, with three vacancies at present, meant that WTO 
Members were failing to comply with an existing mandate, and thus, amounted to a breach of a legal 
obligation under a covered agreement. This had serious systemic consequences and set a bad  
precedent for the WTO, causing damage and affecting the image and credibility of the WTO, in 
particular, in light of the complex international environment that adversely affected the multilateral 
trading system. The GRULAC had heard the concerns raised wi th regard to the functioning of the 
dispute settlement system, and the specific issues regarding decision -making processes, which 
prevented the launch of the AB selection processes. The GRULAC did not accept that the concerns 
raised should prevent Members to meet their legal obligation, or that these concerns were linked to 
the current or future selection processes. The functioning of the system could not be brought to a 
halt because the concerns of some Members had not been addressed. The GRULAC further no ted 
that a proper interpretation of Article  17 and Article  2 of the  DSU did not suggest the requirement 
for positive consensus to launch the selection processes to fill the vacancies in the Appellate Body. 
The GRULAC, therefore, failed to understand why th ese processes had not yet been initiated. The 
GRULAC called on Members to understand the serious repercussions of a continued blockage 
concerning the start of the selection processes. The GRULAC also believed that the selection 
processes should not be link ed to a separate process, but should be addressed on their own merit. 
It was therefore urgent to find a solution swiftly to ensure compliance with the said legal obligation. 
Finally, the GRULAC asked the Chairperson to continue to actively  seek a solution to this issue.  
11.24.   The Chairperson  thanked all delegations for their statements. She regretted that the DSB, 
once again, was not in a position to agree to launch the selection processes to fill the three vacancies 
in the Appellate Body. She understood that thi s matter required a political engagement on the part 
of all Members. She said that her door was open to any delegation wishing to share ideas or views 
on this matter and invited any delegations with views on this matter to contact her directly.  
11.25.   The DSB took note  of the statements.  
12  STATEMENT BY THE CHA IRPERSON REGARDING T HE POSSIBLE REAPPOIN TMENT OF 
ONE APPELLATE BODY M EMBER  
12.1.   The Chairperson  said that  under this Agenda item, she wished to report back to delegations 
on the results of her informal consultations on the issue of possible reappointment of Mr.  Shree 
Baboo Chekitan Servansing, whose first four -year term of office would expire on 
30 September  2018. She recalled that starting in May  2018, following Mr.  Servansing's indication of 
his interest to the DSB to be considered for reappointment as a member of the Appellate Body, she WT/DSB/M/417  
 
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  had been consulting informally with delegations on this matter at the le vel of Ambassadors. In this 
regard, she had followed past practice established in the context of previous reappointment 
processes. As part of the process, she had made herself available to all interested delegations to 
hear their views on the issue of poss ible reappointment and the process to be followed. She had also 
encouraged delegations with views on this matter to contact her directly. She used the opportunity 
of the present meeting to thank all delegations for their participation in this informal proc ess. Finally, 
she wished to report to delegations that, on the basis of these consultations, it was her 
understanding that there would be no consensus to support Mr. Servansing's reappointment. Given 
that this process of informal consultations on the issue  of possible reappointment was now 
concluded, she wished to confer with all delegations on the way forward. Her door was als o open for 
any suggestion.  
12.2.   The representative of the United  States  said that for more than 15  years, across multiple 
US Administrati ons, the United  States had been raising serious concerns with the Appellate Body's 
disregard for the rules set by WTO Members. Through persistent overreaching, the WTO Appellate 
Body had been adding obligations that had never been agreed by the United  States and other 
WTO Members. The President's  2018 Trade Policy Agenda had outlined several longstanding 
US concerns.74 The United  States had raised repeated concerns that appellate reports had gone far 
beyond the text setting out WTO rules in varied areas, suc h as subsidies, anti -dumping duties, 
anti-subsidy duties, standards and technical barriers to trade, and safeguards, restricting the ability 
of the United  States to regulate in the public interest or protect US workers and businesses against 
unfair trading  practices.  On procedural, systemic issues, for example, the Appellate Body had issued 
advisory opinions on issues not necessary to resolve a dispute, had reviewed panel fact -finding 
despite appeals being limited to legal issues, had asserted that panels m ust follow its reports 
although there was no system of precedent in the WTO, and had continuously disregarded the 
90-day mandatory deadline for appeals – all contrary to the WTO's agreed dispute settlement rules. 
And for the last year, the United  States ha d been calling for WTO Members to correct the situation 
where the Appellate Body acted as if it had the power to permit ex -Appellate Body members to 
continue to decide appeals even after their term of office – as set by the WTO Members – had 
expired. This so-called "Rule  15" was, on its face, another example of the Appellate Body's disregard 
for the WTO's rules. The US concerns had not been addressed. When the Appellate Body abused the 
authority it had been given within the dispute settlement system, it und ermined the legitimacy of 
the system and damaged the interests of all WTO Members who cared about having the agreements 
respected as they had been negotiated and agreed. The United  States would continue to insist that 
WTO rules be followed by the WTO dispu te settlement system. In this circumstance, the 
United  States had determined that it was not prepared to support the reappointment of 
Mr. Servansing to the Appellate Body. This position was no reflection on any one individual but 
reflected its principled c oncerns.  
12.3.   The DSB took note  of the statements.  
__________  
                                                
74 Office of the US  Trade Representative, 2018 President 's Trade Policy Agenda, at 22 -28.