RESTRICTED  
  
WT/DSB/M/402  
 
24 January  2018 
(18-0596) Page: 1/23 
Dispute Settlement Body  
29 September 2017    
 
 MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 29 SEPTEMBER  2017 
Chairman: Mr. Junichi I hara (Japan ) 
Prior to the adoption of the Agenda : the item concerning the adoption of the Panel Reports in the 
disputes: "Indonesia – Safeguard on Certain Iro n or Steel Products" (DS490; DS473), was 
removed from the proposed Agenda following the decision by Indonesia to appeal the Panel 
Reports . Also  the item concerning the adoption of the Panel Reports in the disputes: "Brazil – 
Certain Measures Concerning Tax ation and Charges" (DS472; DS497), was removed from the 
proposed Agenda following the decision by Brazil to appeal the Panel Reports.  
TABLE OF CONTENTS  
1   SURVEILLANCE OF IMPL EMENTATION OF RECOMM ENDATIONS ADOPTED BY 
THE DSB  ................................ ................................ ................................ ...........................  2 
A.  United States – Anti-Dumping Measures on Certain Hot Rolled Steel Products from 
Japan: Status Report by the United States  ................................ ................................ .............  2 
B.  United States – Section 110(5) of the US Copyright Act: Status Report by the 
United  States  ................................ ................................ ................................ .....................  3 
C.  European Communities – Measures Affecting the Approval and Mar keting of Biotech 
Products: Status Report by the European Union  ................................ ................................ ...... 3 
D.  European Union – Anti-Dumping Measures on Biodiesel from Argentina: Status Report 
by the European Union  ................................ ................................ ................................ ........  4 
E.  Canada – Anti-Dumping Measures on Imports of Certain Carbon Steel Welded Pipe 
from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu: Status 
Report by Canada  ................................ ................................ ................................ ...............  5 
2   UNITED STATES – CONTINUED DUMPING AN D SUBSIDY OFFSET ACT  OF 
2000: IMPLEMENTATION  OF THE RECOMMENDATIO NS ADOPTED BY THE DS B ................  5 
A.  Statement by the Europ ean Union  ................................ ................................ ....................  5 
3   UNITED STATES – MEASURES AFFECTING T HE CROSS -BORDER SUPPLY OF 
GAMBLING AND BETTING  SERVICES  ................................ ................................ ................  6 
A.  Statement by A ntigua and Barbuda  ................................ ................................ ..................  6 
4   CANADA – MEASURES CONCERNING TRADE IN COMMERCIAL AIRCRAFT  ....................  9 
A.  Request for the establishment of a pane l by Brazil  ................................ .............................  9 
5   EUROPEAN UNION – ANTI -DUMPING MEASURES ON IMPORTS OF CERTAIN 
FATTY ALCOHOLS FROM INDONESIA ................................ ................................ ..............  10 
A.  Report of th e Appellate Body and Report of the Panel  ................................ ........................ 10 
6   APPELLATE BODY MATTE RS ................................ ................................ ......................  15 
A.  Statement by the Chairman  ................................ ................................ ............................ 15 WT/DSB/M/402  
 
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  7   PROPOSAL REGARDING T HE APPELLATE BODY SE LECTION PROCESS  .......................  18 
8   APPOINTMENT OF APPEL LATE BODY MEMBERS: P ROPOSAL BY THE 
EUROPEAN UNION  ................................ ................................ ................................ .........  18 
9   DISPUTE SETTLEMENT W ORKLOAD  ................................ ................................ ...........  23 
A.  Statement by the Chairman  ................................ ................................ ............................ 23 
 
 
1  SURVEILLANCE OF IMPL EMENTATION 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.176)  
 
B.  United States – Section 110(5) of the US Copyright Act: Status report  by the United States 
(WT/DS160/24/Add.151)  
 
C.  European Communities – Measures affecting the approval and marketing of biotech products: 
Status report by the European Union (WT/DS291/37/Add.114)  
 
D.  European Union – Anti-dumping measures on biodiesel fr om Argentina: Status report by the 
European Union (WT/DS473/17/Add.3)  
 
E.  Canada – Anti-dumping measures on imports of certain carbon steel welded pipe from the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu: Status report by Canada 
(WT/DS 482/7/Add.1)  
 
1.1.  The Chairman  noted that there were five sub -items under this Agenda item concerning status 
reports submitted by delegations pursuant to Article  21.6 of th e DSU. He recalled that Article  21.6 
required that: "Unless the DSB decides otherwise, t he issue of implementation of the 
recommendations or rulings shall be placed on the Agen da 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 reso lved". Under this Agenda item, he invited delegations to provide up 
to date information about compliance efforts and to focus on new developments, suggestions and 
ideas on progress towards the resolution of disputes. He also reminded delegation s that, as 
provided for in Rule  27 of the Rules of Procedure for DSB meetings: "Representatives 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". He then turned to the first status report under this Agenda item.  
A.  United States – Anti-dumping measures on certain hot rolled steel products from 
Japan: status report by the United States ( WT/DS184/15/Add.176)  
1.2.  The Chairman  drew attention to document WT/DS184/15/Add.176, which contained the 
status report by the United States on progress in the implementation of the DSB's 
recommendations in the case concerning US anti -dumping measures on certa in hot -rolled steel 
products from Japan.  
1.3.  The representative of the United  States  said that the United States  had provided a stat us 
report in this dispute on 18  September  2017, in accordance with Arti cle 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 recommendations 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.  WT/DSB/M/402  
 
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  1.4.  The representative of Japan  thanked the United States for its statement and status report. 
Japan 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 statements and agreed  to revert to this matter at its next regular 
meeting.  
B.  United States – Section 110(5) of the US Copyright Act: Status report by the 
United  States (WT/DS160/24/Add.151)  
1.6.  The Chairman  drew attention to document WT/DS160/24/Add.151, 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 stat us 
report in this dispute on 1 8 September  2017, 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 resolution of this matter.  
1.8.  The representative of the European  Union  thanked the United States for its status report and 
its statement. The EU referred to its previous statements and said that it wished to resolve this 
dispute as soon as possible.  
1.9.  The representative of China  noted that the United States had, once again, submitted a status 
report on its implementation in DS160. However, it was China's unde rstanding that the Panel  
Report in DS160 ha d been adopted by the DSB on 27  July 2000. More than 17  years had passed 
since then and the United States was still in violation of the relevant articles of the 
Berne  Convention for the Protection of Literary and Artistic Works, as incorporated into the 
TRIPS Agreement pursuant to Article  9.1. China noted that the TRIPS Agreement set out the 
minimum standards of protection of intellectual property rights to be provided by all WTO 
Members. In this regard, the United  States did not provide the required level of protection under 
the TRIPS Agreement. Therefore China urged the United States to amend the legislation at issue to 
bring itself into compliance with the TRIPS Agreement, and to faithfully fulfil its obligations  under 
the TRIPS Agreement to protect the intellectual property rights of their holders without any further 
delay.  
1.10.   The representative of the United  States  said that the United States considered that China's 
criticism was completely unfounded. The intellect ual property protection th at the United  States 
provided within its own territory equalled or surpassed that of any o ther Member. Indeed, the 
United  States would find it interesting if a Member criticizing the United States' commitment to 
strong intellectua l property rights had a domestic record of protecting intellectual property rights 
that appeared less than robust.  
1.11.   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 Europ ean Union (WT/DS291/37/Add.114)  
1.12.   The Chairman  drew attention to document WT/DS291/37/Add.114 which contained the 
status report by the European Union on progress in the implement ation of the DSB's 
recommendations in the case concerning measures affecting the approval and marketing of 
biotech products.  
1.13.   The representative of the  European  Union  said that on 14  September  2017 the draft 
authorisation decision for one type of geneticall y modified soybean , one type of ge netically 
modified oilseed rape  and the renewal of one type  of genetically modified maize (for food and feed 
use) had been submitted for a vote at the member States committee, with a "no opinion" result. 
These measures wou ld now be submitted for discussion and possible opinion to the Appeal 
Committee in October  2017. Moreover, the draft authorisation decisions for two types of 
genetically modified soybean  (for food and feed use) had been submitted for a vote to the Appeal WT/DSB/M/402  
 
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  Committee, with a "no opinion" result. It was now for the European Co mmission to decide on these 
two authorisations. The EU continued to be committed to acting in line with its WTO obligations. 
More generally, and as it had stated previously, the EU recalle d that the EU approval system was 
not covered by the DSB's recommendations and rulings.  
1.14.   The representative of the United  States  said that the United States thanked the EU for its 
status report and its statement  at the present meeting . As the United States had noted at prior 
meetings of the DSB, EU  measures affecting the approval of biotech products continued to involve 
prolonged, unpredictable, and unexplained delays at every stage of the approvals process. The 
United  States at the present meeting also woul d recall  the DSB's findings with respect to EU 
member State bans on biotech products approved at the EU level. The DSB had found that the 
member State bans covered in the dispute lacked a scientific basis and were thus inconsistent with 
the EU's obliga tions under the SPS  Agreement. Despite those findings, the EU had failed to lift all 
of the member State bans covered by the DSB findings. Moreover, EU member States had 
proceeded to adopt additional bans on the same products as those covered by the DSB's find ings. 
Even the EU's own courts recognized that any member State bans had to have a scienti fic basis. 
Most recently, on 13  September  2017, the C ourt of Justice of the European  Union had ruled in 
favour of Italian farmers in their challenge to a ban that Ita ly had imposed on one of the biotech 
corn products covered in the dispute.  The EU Court of Justice had found that an EU member State 
could not ban a biotech product without evidence of serious risk to health or the environment. And 
in this case, the EU's s cientific authority had found that the biotech corn product had not posed 
such risks. The United States urged the EU to ensure that its measures affecting the approval of 
biotech products, including measures adopted by individual EU member States, were bas ed on 
scientific evidence, and that decisions were taken without undue delay.  
1.15.   The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  
D.  European Union – Anti-dumping measures on biodiesel from Argentina: Status report 
by the European  Union (WT/DS473/17/Add.3)  
1.16.   The Chairman  drew attention to document WT/DS473/17/Add.3 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 Argentina.  
1.17.   The representative of the European  Union  said that his delegation believed that this was the 
final status report on this matt er. As notified to the DSB on 9  August  2017 (WT/DS473/18), 
Argentina and the EU had m utually agreed to modify the reasonable period of time (RPT) in this 
dispu te to expire on 28  September  2017. At the present meeting, the EU wished to inform the DSB 
that it had adopted the measure necessary to comply with the DSB's recommendations and ruli ngs 
in DS473 before the expiry of the modified RPT agreed with Argentina. In particular, on 
18 September  2017 the EU had adopted Commission Implementing Regulation (EU) 2017/1578 
which had amended Implementing Regulation (EU) No 1194/2013 by imposing a def initive 
anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel 
originating in Argentina and Indonesia. The Regulation had been published in the Official Jour nal of 
the European Union on 19  September  2017 (OJ L 23 9, 19.9.2017, p. 9) and, according to Article  2 
of thereof, it had entered  into force on 20  September  2017. The adoption of this Regulation had 
ensured the full implementation of the DSB's recommendations and rulings in this dispute.  
1.18.   The representative of Argentina  said that his country thanked the EU for its status report 
and noted, with satisfaction, that the EU had complied with the DSB's recommendations and 
rulings through the adoption of Implementing Regulation (EU) 2017/1578 of 18  September  2017. 
This had amended Implementing Regu lation (EU) No. 1194/2013 of 19  November  2013. Argentina 
continued to follow the proceedings before the European Court of Justice regarding anti -dumping 
duties on Argentine exports. In relation to this matter, he noted that th e European Commission 
had appealed a judgement of the General Court of the European Union, which had annulled the 
anti-dumping duties imposed o n Argentine exports in November  2013. Argentina expressed its 
deep concern regarding th e press release issued onl y two  days ago, in which the European  
Biodiesel Board (EBB) had announced that it would request an investigation to be launched into 
subsidies on Argentine biodiesel exports. Argentina considered that any decision to initiate a 
procedure of this nature was  groundless, as there were no subsidies for the production of biodiesel WT/DSB/M/402  
 
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  in Argentina. Argentina said that, if necessary, it would defend its rights, including through dispute 
settlement.  
1.19.   The DSB took note  of the statements.  
E.  Canada – Anti-dumping measur es on imports of certain carbon steel welded pipe 
from the  Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu: Status 
Report by Canada (WT/DS482/7/Add.1)  
1.20.   The Chairman  drew attention to document WT/DS482/7/Add.1 which contained the status 
report  by Canada on progress in the implementation of the DSB's recommendations in the case 
concerning anti -dumping measures on imports of certain carbon steel welded pipe from the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.  
1.21.   The representativ e of Canada  said that his delegation wished to refer to the statement 
made  by Canada at the 31  August  2017 DSB meeting. Canada had no new developments to report 
at the present meeting.  
1.22.   The representative of Chinese  Taipei  said that his delegation thanked C anada for its status 
report and its statement. Chinese Taipei was looking into the legislative amendments and was 
monitoring the development of review proceedings. It hoped to work with Canada to resolve this 
matter very soon.  
1.23.   The DSB took note  of the stat ements and agreed  to revert to this matter at its next regular 
meeting.  
2  UNITED STATES – CONTINUED DUMPING AN D SUBSIDY OFFSET ACT  OF 2000: 
IMPLEMENTATION OF TH E RECOMMENDATIONS AD OPTED BY THE DSB  
A.  Statement by the European  Union  
2.1.  The Chairman  noted that t his item was on the Agenda of the present meeting at the request 
of the European Union and invited the representative of the European Union to speak.  
2.2.  The representative of the European  Union  said that his delegation, o nce again, requested the 
United  States  to stop transferring anti -dumping and countervailing duties to the US industry. 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 reports on implementation in this 
dispute. The EU said that it would continue to place this matter on the A genda for as long as the 
United  States had not implemented the DSB's recommen dations and rulings.  
2.3.  The representative of Brazil  said that, once again, her country thanked the EU for keeping 
this item on the DSB's Agenda. As one of the parties to the Byrd Amendment disputes, Brazil 
wished to refer to its previous statements made on t his matter. In particular, Brazil wished to refer 
to its statements regarding the continuation of illegal disbursements, which should cease 
immediately. Brazil renewed its calls on the United States to fully comply with the DSB's 
recommendations and ruling s in this dispute. Until then, the United States was under an obligation 
to submit stat us reports, pursuant to Article  21.6 of the DSU.  
2.4.  The representative of Canada  said that his country thanked the EU for placing this item on 
the DSB's Agenda. Canada shar ed the EU's view that the Byrd Amendment remained under the 
DSB's surveillance until it was no longer applied.  
2.5.  The representative of the United  States  said that, as the United States had noted at previous 
DSB meetings, the Deficit Reduction Act – which inc luded a provision repealing the Continued 
Dumping and Subsidy Offset Act of 2000 – had be en enacted into law in February  2006. 
Accordingly, the United States had taken all actions necessary to implement the DSB's 
recommendations and rulings in these disput es. 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 entere d after 1  October  2007, some 10  years ago. With respect to the EU's WT/DSB/M/402  
 
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  request for stat us 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 had announced that it had implemented the DSB's recommendations and ruling s, 
regardless of whether the complaining party disagreed about compliance . As the United  States had 
noted previously, the EU had demonstrated repeatedly that it shared this understanding, at least 
when it was the responding party in a dispute. 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.  
2.6.  The representative of the European  Union  said that the EU disagreed with the US statement 
that the EU had failed to p rovide status reports in c ases that had involved the EU. He said that 
the EU had provided status reports in all disputes that involved the EU (DS291 and DS473).  
2.7.  The DSB took note  of the statements.  
3  UNITED STATES – MEASURES AFFECTING T HE CROSS -BORDER SUPPLY  OF GAMBLING 
AND BETTING SERVICES  
A.  Statement by Antigua and Barbuda  
3.1.  The Chairman  said that this item was on the Agenda of the present meeting at the request of 
Antigua and Barbuda. He invited the representative of Antigua and Barbuda to speak.  
3.2.  The repre sentative of Antigua  and Barbuda  said that it continued to be most unfortunate 
that, despite 14  long years of deprivation, Antigua and Barbuda still had to appear before the DSB, 
year after year, to report that the United States had not seen it possible to  offer fair and equitable 
terms to Antigua and Barbuda for the significant losses in trade revenues that it had suffered as a 
result of the United States' v iolation of the GATS. At the 23  November  2016 DSB meeting, the 
United  States had indicated that it h ad offered "a broad range of useful suggestions to settle this 
dispute in November  2013, only to have Antigua ignore the US offer for a long period of time 
before finally indicating that it was not acceptable". Antigua and Barbuda said that in accordance 
with the findings of the Arbitration in this dispute, the trade losses to Antigua and Barbuda now 
stood at more than US$ 200 million. The US offer that Antigua and Barbuda had found to be "not 
accep table" had not amounted to US$2  million. It should be no sur prise, therefore, that Antigua 
and Barbuda could not accept the offer. It had cost Antigua and Barbuda much more than 
US$2  million to simply bring the trade dispute to the attention of the DSB and to seek redress in 
conformity with established and binding rules.  
3.3.  The United States  had also told the DSB, at the 23  November  2016 mee ting, that "pursuant 
to Article  XXI of the GATS", the United States had offered "a generous package of services 
concessions as compensation for removing internet gambling from the U S schedule", adding that 
"Antigua is the only Member to block the United States from completing this process". Antigua and 
Barbuda pointed out that it had not "blocked" the United States from removing its commitment 
from its schedule. Antigua and Barbuda h ad acted to safeguard its rights. And at such a time that 
the United States made a fair, equitable and just offer to Antigua and Barbuda for the extreme 
harm done to its economy, Antigua and Barbuda stood ready to act in an appropriate manner 
consistent wi th the WTO rules that the United States had helped to fashion. Other countries  – not 
named by the United States – had released the United States from its GATS obligations in this 
particular matter because, although these countries had not paid the cost of bringing it before this 
Body, the United States had settled their losses in ways that remained undisclosed to the DSB and 
to Antigua and Barbuda. It could hardly be fair or just that the United States had reached 
settlements with other countries and not wi th Antigua and Barbuda which had been the principal 
victim of losses in trade revenues and employment.  
3.4.  The United States  had also informed the DSB, at its 23  November  2016 meeting, that "the 
regulation of cross -border gambling is a matter of public moralit y". Antigua and Bar buda pointed 
out that, in April  2005, the Appellate Body had found that the United States could not invoke a 
"morals defence" to its violation of the GATS. What was more, while the United States had banned 
internet gaming from foreign pr oviders, domestic gambling service providers had continued to 
operate and thrive. In November  2016, the United States had advised the DSB that it was 
reviewing "the most recent communication" from Antigua and Barbuda, and that it "will continue WT/DSB/M/402  
 
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  to work exp editiously toward finding a realistic settlement". It was with profound regret that 
Antigua and  Barbuda had to advise that, 10  months later, it had not received a response from the 
United  States - despite many overtu res, including a letter dated 5  June 2017 to the US Trade 
Representative which had gone unanswered. Antigua and Barbuda pointed out that the size of its 
economy was a mere US$1.4  billion; the size of the US economy was US$18  trillion. Further, over 
the 14  years in which Antigua and Barbuda had s uffered trade revenue losses in this particular 
matter, e xceeding US$200  million, it had in no way taken any hostile or retali atory action against 
the United  States. Indeed, the contrary was true. For, ov er that same period, the United  States 
had enjoyed a  trade surplus with Antigua and Barbuda of US$2  billion, as it had continued to 
purchase almost 70 % of goods and services from  the United States. Antigua and  Barbuda had not 
diverted its purchases away from the US market. Therefore, while the trade revenue s losses to 
Antigua and Barbuda were almost 20 % of its GDP, settling with it would represent only 0.0011 %, 
of one year, of the GDP of the United States.  
3.5.  Antigua and Barbuda had just suffered enormousl y from the ravages of hurricane  Irma. 
Three  weeks ago, t he island of Barbuda, Antigua and Barbuda's second most populous island, had 
been completely decimated by the category five hurricane's battering which had left all the 
inhabitants homeless and with no potable water, no electricity, no hospital, no school,  no port and 
no airport. Antigua and Barbuda had been forced to declare the island a disaster and to evacuate 
all the residents to Antigua where they were now being maintained in difficult and cramped 
circumstances despite best efforts with limited resourc es. For the first time in 300  years, there was 
not a single permanent resident on Barbuda, and Antigua was faced with an unexpected and 
unscheduled increase of 3 % of its population and all the demands that such a sudden influx of 
people entailed. Additiona lly, Antigua and Barbuda was confronted with an estimated cost of more 
than US$250  million to rebuild Barbuda and to resettle its inhabitants in their homeland. There 
would be no better time than the present, for the United States to settle this long runni ng issue 
which marred an otherwise friendly relationship between Ant igua and Barbuda and the 
United  States that had existed for generations. Antigua and Barbuda had the option to suspend 
concessions regarding US intellectual property rights. Over many year s, Antigua and Barbuda had 
not done so, not because it could not, or because it had not had offers to help it implement the 
award in a transparent way, consistently with the DSB's authorization. It had not done so because 
it had a too high regard for the U S owners of intellectual property who had contributed much to 
the enjoyment and advancement of the world. Antigua and Barbuda had hoped that the 
United  States would respond to its restraint in ways that would settle this dispute without causing 
any loss of  income to US copyright holders. Antigua and Barbuda said that it was aware that 
in 2010, Brazil had been awarded the right to suspend payment of US intellectual property rights 
in compensation for trade losses. The United States had settled the dispute wi th Brazil via cash 
payments of over US$440  million and other ways in 2010 and 2014. It would be very regrettable if 
tiny Antigua and Barbuda were compelled to be the first country to have to suspend payment of 
US intellectual property rights despite its be st efforts to reach a settlem ent with the United  States, 
its largest and richest neighbour to whom it had always been  – and remained  – a friend.  
3.6.  The representative of the United  States  said that, as a preliminary matter, on behalf of the 
United  States, he wished to express deep sympathy regarding  the devastation that Hurricane  Irma 
had caused in Antigua and Barbuda. The representative of the United States said that he 
understood that the governments of the United States and Antigua and Barbuda were working 
together on the provision of humanitarian and other assistance, and the United States hoped that 
rebuilding would be swift and successful. As the United States had noted at past meetings where 
Antigua and Barbuda had placed this item on the Agenda, the Uni ted States remained committed 
to resolving this matter. The United States had had nu merous discussions with 
Antigua  and Barbuda's new government in the past, and the United States  looked forward t o 
future engagement. The United  States had been reviewing An tigua's most recent communications 
with the new US  administration, and was trying to work toward identifying a productive way 
forward. In this regard, Antigua and Barbuda's statement at the present meeting would be taken 
into account.  
3.7.  The representative of  Jamaica  said that his country supported the statement made by the 
representative of Antigua and Barbuda and took note of the updates provided by the Unit ed States 
on this matter. Jamaica emphasized that this was a matter of particular concern to member st ates 
of the Caribbean Community. Jamaica was among the Members that had consistently called for a 
timely conclusion of this protracted dispute, especially in light of the cl ear ruling in favour of 
Antigua  and Barbuda within the context of the DSB. Jamaica was therefore hopeful that renewed WT/DSB/M/402  
 
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  effort by both countries in the last two years to resolve the matter would have borne fruit and that 
the removal of this item from the DSB Agenda would have been permanent. Sadly Jamaica was 
once again forced to reiterate  its call for all WTO Members to comply fully with their obligations, 
including those arising from rulings of the DSB. For small, vulnerable economies in particular, it 
was important that the integrity of the dispute settlement mechanism was preserved as a  vital 
element within a rules based system regulating international trade. Jamaica, therefore, took note 
of the commitment made by Antigua and Barbuda to continue bilateral discussions and 
consultations with the United States and urged both governments to renew their efforts to 
implement the DSB's recommendations and rulings in line with the appeal made by Antigua  
and Barbuda. Jamaica underscored the fact that resolution of this matter was critical to safeguard 
the legitimacy of the multilateral trading sys tem. 
3.8.  The representative of Barbados  said that his country believed that the functioning of an 
efficient rules based system was critical for all Members and was especially critical for the 
participation of small countries in the WTO. It was therefore import ant for Members to adhere to 
and respect the rulings of a DSB so as not to question the integrity of the system or undermine the 
operations of the commit tees and bodies of the WTO. Barbados considered that it was essential for 
both parties to come together  and arrive at an adequate settlement to bring this matter to a close 
as soon as possible.  
3.9.  The representative of the Dominican  Republic  said that his country wished to express its 
concern, once again, that this dispute had not been resolved as it already o ught to have been. The 
DSB's recommendations and rulings had still not been implemented. The Dominican  Republic 
supported the statement made by Antigua and Barbuda and said that it truly hoped that, in the 
dramatic circumstances faced by Antigua and Barbud a was, the United States would be able to 
comply in this dispute.  
3.10.   The representative of Cuba said that her country also wished to express its gratitude  to 
Antigua  and Barbuda for its statement. Cuba was a Caribbean state that had also been affected by 
Hurricane Irma and wished to express its solidarity with Antigua and Barbuda. In this dispute, 
there was a clear lack of compliance with a decision that affected one of the smallest economies in 
the world. Members could see, in this dispute, how important it w as to maintain the balance and 
stability of the dispute settlement system. Cuba called on both parties to continue the necessary 
consultations and discussions with a view to complying with the DSB's recommendations and 
rulings so that this small and vulner able economy was no longer negatively affected.  
3.11.   The representative of Antigua and Barbuda  said that his country wished to make two points. 
First of all Antigua and Barbuda thanked the many countries represented in the DSB that had 
offered assistance to Ant igua and Barbuda in the after math of hurricane  Irma. 
Antigua  and Barbuda particularly wished to mention the particular generosity of Venezuela without 
whose help Antigua and Barbuda could not have evacuated the people from Barbuda to Antigua. 
Had they not supplied an aircraft to do it, it simply would not have happened and there was no 
telling what would have happened to those people who had been facing a second hurricane, two 
days later, in Hurricane Jose. So Antigua and Barbuda thanked all of the governme nts, the 
government of the Dominican Republic, the governments o f Barbados and Jamaica, 
Antigua  and Barbuda's CARRICOM Colleagues who had come to its assistance quite rapidly. Having 
said that, Antigua and Barbuda pointed out that t he statement made by the  United  States was a 
similar statement to the one it had made at the 23  November  2016 DSB Meeting. Ten  months had 
gone by since the United States had said that they were going to be reviewing t he latest position 
that Antigua  and Barbuda had put to them. An tigua and Barbuda said that they hoped that, this 
time, the review would take place. It wished to inform the DSB that it would shortly be writing a 
letter to the US Trade Representative asking for a formal negotiating session on this matter and it 
would re port to the DSB on what happened with that.  
3.12.   The DSB took note  of the statements.  WT/DSB/M/402  
 
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  4  CANADA – MEASURES CONCERNING TRADE IN COMMERCIAL AIRCRAFT  
A.  Request for the establishment of a panel by Brazil (WT/DS522/6)  
4.1.  The Chairman  recalled that the DSB had considered  this matter at its meeting on 
31 August  2017 and had agreed to revert to it. He then drew attention to the communication from 
Brazil contained in document WT/DS522/6 and invited the representative of Brazil to speak.  
4.2.  The representative of Brazil  said that  his country was requesting, for the second time, that 
the DSB establish a panel to examine the numerous measures through which Canada had provided 
substantial subsidies to Bombardier and its suppliers in favour of the C -Series aircraft program. 
These supp ort measures from Canada's federal, provincial and local governments had caused, 
continued to cause, and threatened to cause even more extensive serious prejudice to the 
interests of the Brazilian aerospace industry, in clear violation of Canada's WTO obli gations. The 
loans, grants, equity infusions, tax credits, and other financial contributions provided by Canada 
amounted to at least US$3  billion. Brazil considered that these panel proceedings would be 
essential for restoring fair conditions of competitio n in the m arket for commercial aircraft. In 
addition to the establishment of a panel to examine this matter, Brazil was requesting that the 
DSB initiate the procedures provided for in Annex  V of the SCM  Agreement as was required under 
paragraph  2 of Annex  V of the SCM  Agreement and designate a representative to serve the 
function of facilitating the information -gathering process as was required under pa ragraph  4 of 
Annex  V of the SCM  Agreement. When it came to actionable subsidies and their consequences, 
Brazil regarded the Annex  V procedure as an important part of the multilateral dispute settlement 
system. Brazil expected that the information -gathering process established therein would assist it 
and the panel in understanding the extent of Canada's federal , regional and local subsidies 
programs and their impacts. Thus, in Brazil's view, a n efficient and effective Annex  V process 
would greatly contribute to the Panel's obligation to make informed and objective findings and 
recommendations regarding the measu res at issue and would play an important role in helping the 
DSB to discharge its function of achieving a prompt and satisfactory settlement to disputes 
between Members.  
4.3.  To facilitate the DSB's obligation to designate a representative, Brazil had already r eached 
out to Canada and was ready to engage in an effort to agree on an individual for the DSB to 
designate. In the event of any unreasonable delay that would prejudice its interests, Brazil would 
ask the Chairman of the DSB to work with the parties towar ds that end. In addition, Brazil would 
appreciate the Chairman's assistance in ensuring an efficient use of the Annex  V procedures. 
Moreover, Brazil was also ready to work with Canada to define rules of procedure capable of 
ensuring the efficacy of the Ann ex V procedure. Brazil hoped that Canada would be a willing and 
cooperative partner in that endeavour. Once a facilitator was appointed and rules of procedure had 
been established, Brazil intended to put forward suggestions as to the information that shoul d be 
sought under this procedure. Brazil had been preparing a list of possible questions for that 
purpose. In parallel to the Annex  V procedures, Brazil also expected discussions on the panel's 
composition to start promptly. Once more, Brazil counted on Ca nada to cooperate with Brazil in 
that regard, so as to secure a timely solution to the present dispute in order to re -establish a level 
playing field in the commercial aircraft sector.  
4.4.  The representative of Canada  said that his country was disappointed tha t Brazil had once 
again requested that the DSB establish a panel with respect to certain Canadian measures 
concerning trade in commercial aircraft. Canada and Braz il had held consultations on 
10 March  2017. During these consultations, Canada had engaged co nstructively and had provided 
responses to Brazil's extensive questions. Canada was confident that its measures were consistent 
with its WTO obligations and it would vigorously defend its interests before the Panel. At the same 
time, Canada was troubled by  the broad and imprecise nature of Brazil's panel request. As 
requested by Brazil, an information gathering process under Annex  V of the SCM  Agreement would 
be initiated at the present meeting following the establishment of a panel. Canada would continue 
to engage with Brazil with a view to identifying a qualified individual to serve the function of 
facilitating the information -gathering process under Annex  V of the SCM  Agreement.  
4.5.  The representative of the United  States  said that the United States was pleas ed to see that 
Brazil and Canada were in agreement on Brazil's request for the DSB to initiate the procedures 
provided for in Annex  V of the SCM  Agreement. The Annex envisaged a collaborative process 
related to, but separate from, the proceedings before a panel. It created no framework of WT/DSB/M/402  
 
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  procedures to move forward absent consensus of at least the parties to the dispute. Thus, 
application of the positive consensus rule to initiation of the Annex  V procedures and designation 
of a DSB representative reflected  the collaborative approach embodied in Annex  V itself. Brazil and 
Canada's agreement to initiate the Annex  V process was consistent with this colla borative process. 
The United  States noted that Brazil's panel request had indicated that it intended to addr ess 
questions under the Annex  V procedure to Canada and several third -countr y Members, including 
the United  States. In this regard, the United States recalled that Annex  V provided that "the 
parties to the dispute and any third -country Member concerned sha ll notify to the DSB, as soon as 
the provisions of paragraph  4 of Article  7 have been invoked, the organization responsible for the 
administration of this provision within its territory". The United States said that it took this 
opportunity to confirm that any requests under the Annex  V procedure should be directed to the 
US Mission to the WTO.  
4.6.  The DSB took note  of the statements and agreed to establish a panel in accordance with the 
provisions of Articles  4.4 and 7.4 o f the SCM  Agreement and Article  6 of t he DSU with standard 
terms of reference.  
4.7.  The representatives of China , the European  Union , Japan , the Russian  Federation , Singapore  
and the United  States  reserved their third -party rights to participate in the Panel's proceedings.  
4.8.  The Chairman  said that wi th regard to the issue of the procedures for developing information 
concerning serious prejudice under Annex  V of the SCM  Agreement, paragraph  2 of Annex  V 
provided that, where matters were referred to the DSB under Article  7.4 of the SCM  Agreement, 
the DS B had to, upon request, initiate the Annex  V procedure. The Chairman noted that Brazil had 
requested in document WT/DS522/6, that the DSB initiate such a procedure. It was the 
Chairman's understanding that Canada had accepted that the Annex  V procedure wou ld be 
initiated at the present meeting. He further noted that paragraph  4 of Annex  V provided that the 
DSB had to designate a representative to serve the function of facilitating the 
information -gathering process under that Annex. The Chairman understood t hat Brazil and Canada 
were consulting regarding the designation of a representative, and the Chairman stood ready to 
render any assistance necessary to assist them in that process.  
4.9.  The DSB took note  of the statement.  
5  EUROPEAN UNION – ANTI -DUMPING MEASURES ON IMPORTS OF CERTAI N FATTY 
ALCOHOLS FROM INDONE SIA 
A.  Report of the Appellate Body (WT/DS442/AB/R and WT/DS442/AB/R/Add.1) and 
Report of the Panel (WT/DS442/R and WT/DS442/R/Add.1)  
5.1.  The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS442/9 transmitting the Appellate Body Report in the dispute: "European Union – 
Anti-Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia", which had been 
circulated on 5  September  2017 in document WT/DS442/AB/R an d Add.1. The Chairman reminded 
delegations that the Appellate Body Report and the Panel Report pertaining to this dispute had 
been circulated as unrestricted documents.  As Members were aware, Article  17.14 of the DSU 
required that: "An Appellate Body repor t 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 views on an Appellate Body report". He then 
invited the representative of the parties to the dispute to present their views on the Reports before 
the DSB.  
5.2.  The representative of Indonesia  said that, as was cust omary before the adoption of a panel 
or Appellate Body Report, Indonesia wished to express its views on the Reports in thi s dispute, 
pursuant to Articles  16.4 and 17.14 of the DSU. Indonesia thanked the Panel, the Appellate Body 
and the Secretariat for the ir work on this appeal. Indonesia was a great supporter of the WTO 
dispute settlement system. It considered that an efficient, effective, fair and transparent dispute 
settlement system was essential to the development of the rules -based multilateral tradin g system 
as a whole and to the ability of developing countries such as Indonesia to participate in that 
system. Indonesia was pleased that the Appellate Body had uphel d the Panel's ruling on Article  6.7 WT/DSB/M/402  
 
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  of the Anti -Dumping Agreement. This finding was syste mically important from the perspective of 
transparency and the due process rights of both investigated companies and other interested 
parties. Indonesia was also pleased that the Appellate Body had rejected the EU's procedural 
arguments. It was disappointe d that the EU had suggested that Indonesia was not entitled to 
pursue this appeal. Nevertheless, Indonesia appreciated that the Appellate Body had upheld its 
rights to do so. However, Indonesia expressed serious concerns regarding the manner in which the 
Panel and the Appellate Body had addressed Indonesia's claim under Article  2.4 of the 
Anti-Dumping Agreement. Although it disagreed with the outcome, that was not its main concern. 
More importantly, Indonesia was very concerned about the manner in which the  Panel and 
Appellate Body had failed to engage with the essentials of its arguments. To recall, in the measure 
at issue, the EU had made an adjustment to the export price under Article  2.4 of the Anti -Dumping 
Agreement. This adjustment had been based on tr eating an Indonesian exporter and its 
closely -affiliated sales office as if they were independent entities. Where an exporter performed 
sales functions "in -house", the expenses were part of the exporter's selling, general and 
administrative costs (SG&A) an d were not deducted from the export price (or normal value, as the 
case may be). Similarly, no profit was deducted in these circumstances. Where an exporter instead 
payed an independent agent to perform the same functions, the amounts paid to the agent for  its 
costs and profits were deducted as a commission. In this case, had the EU determined that the 
exporter and the closely -affiliated sales office were part of a single economic entity (the term came 
from EU law and WTO jurisprudence, not from Indonesia),  it would have treated them just like an 
exporter with an "in -house" sales department. No adjustment would have been made and no 
dumping margin would have been found. Instead, the EU had decided to treat the exporter and 
the sales office as if they were se parate entities, without examining the common ownership and 
control of the two companies. On that basis, the EU had deducted from the export price both the 
selling expenses of the sales affiliate and a "reasonable profit margin independent of the actual 
profit" of "5% which is considered a reasonable profit for the activities carried out by trading 
companies in the chemical sector".  
5.3.  Indonesia had repeatedly argued that, in these situations, it was inconsistent with the fair 
comparison requirement of Article  2.4 of the Anti -Dumping Agreement to treat an exporter and its 
closely affiliated sales office as independent entities without properly analysing the corporate 
ownership, management and control links between the entities to determine whether they did 
business as one or each for their own account. In essence, Indonesia's argument was that an 
investigating authority had to determine precisely whether a sales office was just a formally or 
legally "spun -off" sales office department, joined at the hip to the pr oduction entity, or instead an 
economically or commercially truly independent entity. Regrettably, Indonesia did not see this core 
argument addressed in the Panel Report. It was not that Indonesia’s core argument had been 
analysed and rejected. It had simp ly not been addressed at all. Rather than measuring the EU's 
standard against WTO law, the Panel had appeared simply to find that the EU had properly applied 
its own standard. This was not a proper means of disposing of a complainant's claim. A decision 
should convince the parties of its correctness by the power of its reasoning, not by advocacy or 
argument. Reading the Panel Report, Indonesia had the impression that the Panel was arguing 
with Indonesia's arguments, not confronting the issues squarely and f orthrightly. Indonesia had 
expected a more thorough treatment of its arguments from the Appellate Body, but was again 
very disappointed. The Appellate Body said "we [do not] rule … on the circumstances in which an 
inquiry into the nature of the relationshi p between transacting entities will suffice or be 
determinative of … whether allowances should be made pursuant to Article  2.4." But that was 
precisely what was at issue in this dispute and precisely what Indonesia had asked the Appellate 
Body to rule on.  
5.4.  As noted, in this dispute, the issue had been whether the EU could treat closely affiliated 
entities as if they were independent entities, and make price adjustments on that basis, without 
examining the degree of corporate ownership, management and control  links between the entities. 
Thus, in its opening statement at the hearing, Indonesia had stated that it "requests the Appellate 
Body to reverse the Panel's legal standard and find that a decision regarding the treatment of 
transactions between closely aff iliated parties must be based on an analysis of the relationship 
between the parties, using criteria similar to those articulated by the panel in 'Korea – Certain 
Paper' ". In other words, the legal issue that had been before the Appellate Body was precisel y 
whether, in the Appellate Body's words, the EU's "inquiry into the nature of the relationship", 
without considering ownership and control links, had sufficed to allow the EU to make a price 
adjustment fairly under Article  2.4 of the Anti -Dumping Agreemen t. The Appellate Body's failure to 
address this issue was very disappointing. Both the Panel and the Appellate Body had told WT/DSB/M/402  
 
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  Indonesia that the significance of the affiliation depe nded on a "case -by-case" basis.  Indonesia had 
sought a ruling on the EU's sp ecific determination in this case that it could treat closely affiliated 
entities as if they were independent without considering the degree of corporate ownership, 
management and control links between them. The Panel and the Appellate Body had either fail ed 
to answer, or, by upholding the EU's approach, gave the implicit answer that the criterion was 
irrelevant or that an investigating authority could ignore the issue of ownership and control links 
altogether.  
5.5.  The Appellate Body 's "case -by-case" approach w as also very unfortunate, because it could 
lead to the Appellate Body simply not ruling on the issue before it. Indonesia argued that the 
criterion of corporate and management link s always mattered under Article  2.4 of the 
Anti-Dumping Agreement when decid ing to treat closely affiliated parties as one entity or as 
independent entities. The Appellate Body said that this criterio n would only matter sometimes. But 
it did not tell I ndonesia when it would matter. And it refused to say whether it should have 
mattered in this dispute. This was not sufficient. Even if the Appellate Body thought that these 
links mattered sometimes but not always, it could not stop there. It had to address whether these 
links should have been examined in this dispute and, if not, expl ain why not. It was not enough 
simply to express disagreement with the complainant's view and say very generally that it was a 
"case -by-case" matter. In any event, regardless of what the Appellate Body had said it had or had 
not ruled on, the fact remained  that it had affirmed a Panel Report that suggested that in any case 
in which an affiliated sales office was a "downstream participant" in sales, the investigating 
authority could treat the exporter and sales office as separate entities, apparently regardl ess of 
the ownership a nd control links between them. This could not be correct.  
5.6.  Indonesia said that it was also surprised to read in the Appellate Body's findings that the 
"Panel's reasoning does not imply that when confronted by transactions between close ly affiliated 
parties, investing authorities may replace the expenses actually incurred with the expenses that 
would have been incurred had the producing entity obtained the service from an independent 
provider". But that was exactly what the EU had done a nd the Panel had upheld in this case: the 
deduction of a price adjustment based on "a reasonable profit margin independent of the actual 
profit" based on what the EU had "considered a reasonable profit for the activities carried out by 
trading comp anies in  the chemical sector". In other words, the EU had replaced the actual 
situation with the costs of using "trading companies in the chemical sector". A Panel or the 
Appellate Body's legal analysis should have been sufficient to demonstrate to the losing part y that 
the essentials of its position had been considered fully. By this measure, unfortunately, these 
reports fell short. Indonesia could not see where several of its key arguments had been addressed 
or why they had been rejected. To give another example,  Indonesia had also argued that  the 
fourth sentence of Article  2.4 of the Anti -Dumping Agreement permitted the deduction of selling 
expenses and profit incurred by an affiliated sales office in the importing country i n situations 
covered by Article  2.3 of the Anti -Dumping Agreement. However, no similar adjustment was 
authorized with respect to selling expenses and profits of affiliated sales offices that were not in 
the importing cou ntry and not covered by Article  2.3 of the Anti -Dumping Agreement. These 
arguments regarding an important textual issue had not been confronted either at the Appellate 
Body's hearing or in its report. This case had presented a legal issue of significant practical and 
commercial relevance. Very many companies in Indonesia and, mos t likely, in other developing 
countries used legally separate but very closely affiliated companies to provide various 
sales-related services. These included exporters that generated very important export revenues for 
many developing countries. These compa nies could find themselves in similar situations in 
dumping investigations in many jurisdictions.  
5.7.  By failing to address the issue directly, the Panel and the Appellate Body had failed to clarify 
the provisions of the covered agreements at issue in this dis pute. After lengthy proceedings, 
Indonesia was left with nothing more than a vague "it depends" on a "case -by-case basis" and 
with no idea as to how to advise its exporters to organize their sales structures so as to reduce 
exposure to dumping liability. F or the dispute settlement system to stay relevant for the 
commercial realities of the real world where "real people live and work and die", Members could 
not be left, after years of litigation, scratching their heads trying to find where the Reports 
addres sed their arguments head -on. Indonesia encouraged future panels and the Appellate  Body 
to examine how they went about confronting – both in hearings and in writing – the key elements 
of a party's arguments so that when they ruled against a party on an issu e, the party was left in 
no doubt that its arguments had been addressed fully and squarely.  WT/DSB/M/402  
 
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  5.8.  The representative of the European  Union  said that his delegation thanked the members of 
the Appellate Body, the Panelists and the Secretariat for their work on thi s dispute. The EU 
acknowledged the time and effort that had been dedicated to this dispute. It recalled that the 
measures had expired in November  2016. This dispute would, nevertheless, provide useful 
clarification on some provisions of the Anti -Dumping Ag reement and the DSU. The refore the EU 
thought these two  Reports should be adopted. The EU welcomed in particular the Appellate Body's 
confirmation of the Panel's finding that the EU authorities had acted consistently with Article  2.4 of 
the Anti -Dumping Ag reement in their treatment of the Indonesian company. This conclusion was in 
line with the decisions taken by European courts in the same dispute. The EU also took note of the 
Appellate Body and the Panel's clarification regarding the  correct application o f Article  6.7 of the 
Anti-Dumping Agreement to the results of the on -the-spot investigations.  
5.9.  The representative of the United  States  said that the United States would like  to comment on 
certain substantive and procedural aspects of this dispute. The Unite d States focused in particular 
on the "report " issued in the appeal in this matter. First,  on substance, while the United  States 
considered the Division to have arrived at the correct outcome in this particular dispute, the 
United  States would like  to draw  the DSB's attention to an important systemic concern with the 
"report's " interpretation of the DSU. The EU had claimed that, due to the expiration of the 
contested measure during panel proceedings, the Panel had erred in making a recommendation 
with respe ct to that measure. The United States recalled that Article  19.1 of the DSU set out, in 
mandatory terms, the requirement that a panel or the Appellate Body "shall recommend" that any 
measure found to be WTO -inconsistent be brought into conformity with WTO rules. The DSU stated 
that this "shall" be done – the requirement was not discretionary. The Division had acknowledged 
this requirement, stating that it had "attach[ed] signif icance to the fact that Article  19.1 is 
expressed in mandatory terms and linked d irectly to the findings made by a panel," and f inding 
that the language "suggests that it is not within a panel's or the Appellate Body's discretion to 
make a recommendation in the event that a finding of  inconsistency has been made ". But the 
Division had then gone on to note its own statement in "US – Certain EC Products " that there was 
"an inconsistency between the finding of the panel that the relevant measure was no longer in 
existence and the subsequent recommendation of the panel that the DSB request the 
United  States bring that measure into conformity with its WTO obligations ". 
5.10.   The Division did not explain the basis in the DSU for that statement, however. And it had 
failed to engage with the fact, explained at length by the United States, that the sta tement in 
"US - Certain EC Products " was obiter  dicta as it was not made in response to any issue appealed 
in that dispute, and therefore it was not nec essary to resolve that appeal. Three paragraphs later, 
the Division applied to the facts before it, not the mandato ry requirement found in Article  19.1 of 
the DSU, but the rule it apparently had derived from certain of its own prior reports, including the 
dicta just described. Specifically, the "report " concluded that "[a]bsent any finding or 
acknowledgement  by the Panel that the measure at issue is no longer in force, there was no basis 
for the Panel to have departed from the requirement in Article  19.1 of the DSU to make a 
recommendation after having found that measure to be inconsistent with the covered 
agreements ". The United States had grave concerns with such a statement. In the face of clear, 
mandatory language in the DSU, the Appellate Body considered that its own prior reports could 
support an exception to the clear text of the DSU. The DSU provided n o such authority to the 
Appellate  Body or to its reports. The DSU and the other covered agreements set out the agreed 
rules and commitments of WTO Members, and those rules could not be changed through dispute 
settlement reports. DSU Articles  3.2 and  19.2 m ade this clear: "[r]ecommendations and rulings of 
the DSB cannot add to or diminish the rights and obligations provided in the covered agreements ". 
As Indonesia and the United States had also pointed out in the course of this appeal, it was 
unnecessary for  the Division even to reach this legal issue. The alleged evidence of the expiry of 
the measure had not been timely submitted to the Panel, and the Panel had made no findings on 
this issue. Therefore, the Division could simply have noted the absence of any  factual finding, and 
it could have avoided reaching a legal issue not necessary to resolve this dispute. Instead, the 
Division had made an erroneous statement, relying on previous erroneous statements and 
obiter  dicta, and ignoring the clear text of DSU A rticle 19.1. This was not an approach that was 
consistent with the DSU or that contributed to Members' confidence in the WTO dispute settlement 
system.  
5.11.   Turning to a procedural issue, the United States had raised with Members at the previous 
DSB meeting imp ortant systemic questions regarding the Division hea ring this appeal. As the 
United  States would note under the next Agenda item, Members had met informally on this issue WT/DSB/M/402  
 
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  but, frankly, had engaged in very little substantive discussion of the systemic issue s. The 
United  States had noted that Mr. Kim was no longer an Appellate Body member as of 1  August, 
and the "report " in this dispute had n ot been circulated until 5  September – more than one month 
later. Members had been informed that Mr.  Kim had "signed" t he "report " on 31  July 2017, one 
day before resigning and becoming Korea's Trade Minister. But what  was relevant under DSU 
Article  17.5 was when the report was circulated, not when it was signed. In these circumstances, 
the United States did not understand  why Mr.  Kim had not simply been replaced on the Division, 
so as to permit a current Appellate Body member, fulfilling all the requirements  of Article  17, to 
complete the appeal. As WTO Members also well knew, the term of Mr.  Ramírez, another member 
of the  Division hearing  this appeal, had expired on 30  June 2017. The DSB had taken no action to 
permit him to continue to serve as an Appellate Body member. Therefore, Mr.  Ramírez too would 
appear not to have been an Appellate Body member on the date of circula tion of this "report ". In 
these circumstances, the "report " had not been provided and circulated on behalf of three 
Appellate Body members, as was required under DSU Articles  17.1 and  17.5. And because the 
"report " had not been issued consistent with the r equirements of Article  17, it could not be an 
"Appellate Body report" subject to the adoption procedures reflected in Article  17.14. Rather, the 
DSB would consider the "report's " adoption subject to the positive consensus rule applicable to 
DSB decisions, pursuant to DSU Articl e 2.4 and WTO Agreement Article  IX:1, note  3. Given the 
serious concerns the United States had described with respect to the Division's statements 
regarding Article  19.1 of the DSU, the United States  did not endorse the findings set o ut in the 
Division's "report ". Nor could the United States  support an Appellate Body member's continuation 
of service without authorization by the DSB. However, the United States understood the parties to 
the dispute to support adoption of the "reports " of the Panel and the Division in this dispute. As 
DSU Article  3.7 made clear, "[t]he aim of the dispute settlement mechanism is to secure a positive 
solution to a dispute ". And it appeared that the parties considered that adoption of these "reports " 
would he lp them achieve that aim. The United States further not ed that the situations with Mr.  Kim 
and Mr.  Ramírez only had arisen late into the appellate proceedings. In these particular and 
exceptional circumstances, therefore, the United States would be  willing  to join a consensus to 
adopt the "reports " proposed for adoption at the present meeting, being the "report " contained in 
WT/DS442/AB/R and Add.1 and the Report contained in WT/DS442/R and Add.1, as modified by 
the first "report ". 
5.12.   The representative of the  European  Union  said that his delegation wished to express its 
disagreement with the United States' statement. There was no problem with this Appellate Body 
Report. The DSB had already discussed the matter of the resignation of Mr.  Kim and had not come 
to a conclusion that this fact raised a problem for the adoption of the Reports in this dispute. The 
EU did not think there was anything more to add. The DSB was adopting the Appellate Body 
Report via negative consensus, pursuant to Article  17.14 of the DSU. As this Article provided, the 
Report had to be adopted by the DSB, unless there was consensus not to adopt the Report. The 
EU, as the responding party in this dispute, supported the adoption of the Report and, therefore, 
the Report would be adopted via neg ative consensus. This was a central feature of the dispute 
settlement mechanism and it could not be undermined.  
5.13.   The representative of Canada  said that his country had taken note of the United  States' 
statement and wished to briefly comment in this respect.  Canada disagreed with any suggestion 
that the service of Mr.  Kim and Mr.  Ramírez on this appeal had undermined the re verse consensus 
rule in Article  17.14 of the DSU. The reverse consensus rule was one of the greatest achievements 
of the Uruguay  Round. Ca nada considered that the reverse consensus rule applied in this case.  
5.14.   The representative of Brazil  said that his country had listened carefully to the concerns 
expressed by the United States. Brazil had also noticed that the AB communication in document 
WT/DS442/9 provided an explanation for what had happened, saying that the members of the 
Division had completed their work and signed the Report on the last day of July  2017 and then it 
had been sent for translation. So, for Brazil, that was a fully satisfac tory explanation and it wished 
to endorse the views expressed by Canada and the EU regarding the importance of maintaining 
the pillar of negative consensus concerning the adoption of reports.  
5.15.   The representative of Japan  said that his delegation noted that the parties to this dispute, 
Indonesia and the EU, appeared to support the adoption of the Panel Report and the Appellate 
Body Report. The way in which Mr. Kim's departure had been handled had raised a systemic 
question. However, this was an isolated insta nce under the extraordinary circumstances specific to 
this particular dispute. As such, the issue could be addressed in a discre te manner. Japan could WT/DSB/M/402  
 
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  deem Mr.  Kim to have completed the disposition of this appeal to which he had been assigned 
while an AB M ember. Japan would join an act of the DSB to adopt the Reports of the Panel and the 
Appellate Body in this dispute.  
5.16.   The representative of New Zealand  said that her country thanked the parties for their 
comments on the Reports. New Zealand noted the concern s raised by the United States and, as it 
had stated previously, it was certainly willing to discuss those concern s in the appropriate forum. 
New Zealand was concerned however that the outcome of any discussions in relation to those 
concerns could only be a pplied on a prospective basis and should not affect the decisions or 
proceedings involving Appellate Body divisions that had alrea dy been composed, applying Rule  15 
of the Working Procedures for Appellate Review.  
5.17.   The DSB took note  of the statements and ado pted the Appellate Body Report contained in 
document WT/DS442/AB/R and Add.1 and the Panel Report contained in document WT/DS442/R 
and Add.1, as modified by the Appellate Body Report.  
5.18.   Following the adoption of the Reports, the representative of the United  States  said that for 
the reasons the United States had explained, it did not consider the "report " circulated on 
5 September  2017, to be an "Appellate Body report" subject to the adoption procedure s reflected 
in Article  17.14 of the DSU. The United States therefore understood that the action the DSB was 
taking at the present meeting was the adoption of the "report " contained in WT/DS442/AB/R 
and Add.1 and the Report contained in WT/DS442/R and Add.1, as modified by the first "report ". 
5.19.   The representative of the European  Union  said that his delegation disagreed with the views 
expressed by the United States. The DSB was adopting the Appellate Body Report by negative 
consensus pursuant to Article  17.14 of the DSU.  
5.20.   The DSB took note  of the statements.  
6  APPELLATE B ODY MATTERS  
A.  Statement by the Chairman  
6.1.  The Chairman  said that, under this Agenda item, he first wished to make a short statement 
on the informal meeting held on 15  September  2017 following the discussion at the DSB meeting 
held on 31 August 2017 regardi ng the Appellate Body matters. He recalled that at the 
31 August  2017 DSB meeting, the United States had expressed concerns regarding certain 
systemic issues and had stated that it would not be in a position to agree to start any of the 
selection processes  until its systemic concerns were addressed. During the informal meeting held 
on 15  September  2017, the United States had reviewed with more detail the issues raised at the 
31 August  2017 DSB meeting. Other Members had reiterated their concerns about the c ontinued 
failure of the DSB to launch selection processes for the vacant positions on the Appellate Body. 
Several delegations had requested the United States to provide additional details of its systemic 
concerns as well as to submit concrete proposals on how these concerns could be addressed in the 
DSB. Many delegations had expressed concerns about linking the discussion on systemic issues 
raised by the United States to the AB selection processes. At the same time, a number of 
delegations had demonstrated their readiness to engage in discussions to address the systemic 
concerns. Thirty -three delegations had intervened during the informal meeting, which had 
provided the opportunity for delegations to express their initial views before taking a collective 
decision regarding the next steps. As he had stated at the informal meeting, consultations would 
continue on these matters in order to find a way forward. He reiterated that his door was open 
and, once again, he invited delegations with views on these matters  to contact him directly. In 
order to get things moving forward in a positive direction, he said that he believed that more 
concrete and creative ideas were needed. He emphasized, once again, the urgency of filling the 
vacancies on the Appellate Body. He s aid that under "Other Business" he would make a statement 
about the DS workload and, in that context, he would report that the Appellate Body was currently 
dealing with seven appeals and up to three additional appeals could be filed by the end of 2017. In 
addition to the existing vacancies, the th ird vacancy would open up on 11  December  2017 when 
Mr. Peter Van den Bossche's term would come to an end. The Chairman note d that, by the end of 
September  2018, the first four -year term of office of another Appella te Body member would come WT/DSB/M/402  
 
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  to an end. Therefore, he urged all Members to show more flexibility and creativity so that the DSB 
could launch the three selection processes as soon as possible.  
6.2.  The representative of the United  States  said that the United States  appreciated the 
Chairman's organization of an informal meeting of the DSB to consider th e concerns raised by the 
United  States at the August meeting of the DSB. A good number of WTO Members had participated 
in that informal meeting. The United States appr eciated that willingness to engage. The United 
States  also noted, however, that many of the interventions by delegations had been focused on 
process issues. Of course, that was a Member's prerogative. But as a result, the United States did 
not have a clear  vision of the views of many delegations on the specific concerns that it had raised. 
What was clear in the informal DSB meeting was that the United States did not hear any 
fundamental disagreements that the two concerns it had raised were important and wo rthy of the 
DSB's consideration. As was clear from the previous item, the issuance of a report on appeal that 
did not adhere to the requirements set out in the DSU raised ye t more concerns. For the 
United  States, the issues were clear. Under the DSU, the D SB had a responsibility to decide 
whether a person who had ceased to be a member of the Appellate Body should continue serving. 
If the DSB agreed that such a person should continue to serve on an appeal, it would be the DSB's 
responsibility to provide an a ppropriate legal basis to permit this to occur. And as stated at last 
month's DSB meeting, the United States would welcome Mr. Ramírez's continued service on two 
pending appeals with appropriate action by the DSB. The United States therefore reiterated its  
willingness to meet with any interested delegation to discuss the concerns raised and to develop 
appropriate solutions.  
6.3.  The representative of Canada  said that, as his country had done at each meeting where 
the 2017 AB selection processes had been discusse d, Canada wished to reiterate its profound 
disappointment and serious concern that the DSB had been unable to fulfil the obligation in 
Article  17.2 of the DSU to appoint Appellate Body members as vacancies arose. Members had 
heard that the selection proces ses could not be initiated unless and until the DSB had addressed 
the concerns of the United States regarding the continued service of Appellate Body members after 
their terms had expired. Canada called on the United States to inform the DSB precisely what  their 
concerns were and to propose a solution. In Canada's view, these discussions could be moved to 
the DSB in Special Session where, under the current approach, a possible outcome could be 
prepared for consideration by the Membership.  
6.4.  The representative  of Singapore , speaking on behalf of ASEAN countries, said that ASEAN 
countries placed great importance on the rules -based multilateral trading system. One of the key 
pillars of the WTO was its dispute settlement system including the Appellate Body.  This w as 
recognized in Article  3 of the DSU, which provided that the dispute settlement system of the WTO 
was a central element in providing security and predictability to the multilateral trading system. 
ASEAN countries wished to highlight its serious systemic concern with the lengthy delays in 
launching the AB selection processes. They noted that there were currently two vacancies on the 
Appellate Body and that another vacancy would arise in December 2017. These vacancies had to 
be filled as soon as possible, e specially since Members had a legal obligation to do  so, in 
accordance with Article  17.2 of the DSU, which provided that vacancies had to be filled as they 
arose. ASEAN countries regretted that a linkage had been made between the launch of the 
AB selection  process and certain systemic issues that had been raised. In the view of ASEAN 
countries these systemic issues could be dealt with on a different and parallel track and thus, 
should not prevent the launch of the AB selection process. ASEAN countries urged  that utmost 
flexibility be shown by Members to work towards consensus for a DSB decision to launch the 
AB selection process expeditiously. It was vital for the effective functioning of the dispute 
settlement system that the Appellate Body had a full compl ement of seven members to hear 
appeals. The continued impasse could have major consequences for the system. In this regard, 
ASEAN countries were ready to engage constructively and work with Members, as well as with 
the Chairman, to resolve this deadlock.  
6.5.  The representative of the Dominican  Republic , speaking on behalf of the Informal Group of 
Developing Countries (IGDC), reiterated the IGDC's position expressed at the informal DSB 
meeting held on 15  September  2017 where the IGDC had expressed concern about the delay in 
launching the Appellate Body selection process. The IGDC urged the Chairman to begin the 
selection process promptly. It also urged all Members to support this process with a view to its 
prompt completion. It was important for delegations that had expressed concern about initiating 
the process to provide specific proposals on how their concerns could be addressed, independently WT/DSB/M/402  
 
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  from the selection process. Any further delays in filling the vacancy on the Appellate Body 
jeopardized the effectivene ss of the WTO and its dispute settlement function.  
6.6.  The representative of Australia  said that her country was open to substantive discussions 
between Members about the legal and systemic concerns raised related to the timing of the 
resignation of one Appell ate Body member, and the appropriate application of Rule  15 of the 
Appellate Body's Working Procedures following the expiry of the second term of another Appellate 
Body member. However, in Australia's view, consideration of these systemic issues did not wa rrant 
further delaying the commencement of Appellate Body selection and appointment processes. 
Rather, each of these matters could, and should, be considered by the DSB in parallel.  
6.7.  The representative of Norway  said that, as her country had stated numerous  times, Norway 
reiterated its grave concern with the DSB's common failure to ensure that all vacancies on the 
Appellate Body were filled. The well -functioned Appellate Body was in Norway's primary interest. 
Vacancies should have been filled as they arose, however considering the urgency of the situation, 
Norway underlined its flexibility in reaching a solution and its willingness to join consensus on 
launching a selection process without further delay. As it had stated at the informal meeting on 
15 Septembe r 2017, Norway questioned the linkage made by the United States suggesting that 
the DSB hold off filling the vacancies on the Appellate Body until the mentioned systemic issues 
were resolved. Norway was open and willing to discussing systemic issues separa tely but, 
considering the urgency of the present situation,  strongly encouraged the United  States to 
reconsider the linkage and join a consensus to launch the selection process without any further 
delay.  
6.8.  The representative of China , speaking in relation to  Agenda items  8, 9 and 10, said that his 
country thanked the proponents for their revised proposals. China noted that the proposal 
submitted by Argentina, Brazil, Colombia, Chile, Guatemala, Mexico and Peru, and the proposal 
submitted by the EU had achieve d a common ground to launch selection  processes to replace all 
three  vacancies that had arisen and would arise in the coming months. China was flexible 
regarding the manner in which the selection processes should be launched and supported the 
proponents' s uggestions to commence the selection processes for all three vacancies as soon as 
possible. However, China regretted that the Membership was still not able to launch the selection 
processes because of the so -called "systemic concerns" that had been raised by one Member. After 
a careful review of the concerns, and as China had expressed at the informal DSB meeting held on 
15 September  2017, it respectfully disagreed with those concerns. First, on the resignation of 
Mr. Hyun Chong Kim, China was of the view t hat given the appointment of Mr. Kim  as Korea's 
Trade Minister on 4  August  2017, his resignation had to take effect immedia tely, as required under 
Article  17.3 of the DSU.  
6.9.  Second, on Mr. Ricardo Ramírez -Hernández's continued service, China was of the view that 
the Appellate Body had acted well within its mandate by including Rule  15 in the Working 
Procedures for Appellate Review, which only applied to a person who had ceased to be an 
Appellate Body member. Moreover, Rule  14 of Establishment of the Appellate  Body (WT/DSB/1), 
which had been adopted by the DSB, specifically provided that matters regulating the rotation of 
the Appellate Body members in serving on appeals should be included in the Working Procedures 
for Appellate Review. By challenging Rule  15 of  the Working Procedures, which had become a 
customary practice, the United States risked undermining the work of the Appellate Body and the 
dispute settlement system.  
6.10.   Third, on the signature issue, it was China's understanding that neither the DSU, nor any  
rules or procedures of the Appellate Body, required an Appellate Body member to circulate all the 
reports of the appeals to which he had been assigned prior to leaving his post. Instead, rules 
regarding members leaving their posts before their terms had e xpired had been explicitly provided 
for. A rule to the contrary would unreasonably burden the proper functioning of the Appellate 
Body. China was afraid that, by challenging the legal effect of the Appellate Body report, due to 
the resignation of Mr. Kim, the United States risked violating Rule  4(4) of the Working Procedures 
which related to interference with a division's authority and freedom in conducting their work. In 
sum, China did not consider the United States' concerns to be supported by the rules o r by the 
prevailing facts. At the same time, China could not agree with the United States that linking the 
concerns with the Appellate Body member selection processes was the right way to address their 
concerns. China did not see the logic behind making th e linkage between them, and the two issues 
should be resolved on their own merits. As many Members had expressed, launching the selection WT/DSB/M/402  
 
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  process as soon as possible would help to address the concerns raised by the United States. China 
echoed previous spea kers in saying that it was the obligation and responsibility of each Member to 
ensure the well -functioning and credible dispute settlement system. China reiterated its serious 
concerns expressed at the 31  August  2017 DSB meeting and called upon Members to meet their 
commitments under the multilateral trading system.  
6.11.   The DSB took note  of the statements.  
7  PROPOSAL REGARDING T HE APPELLATE BODY SE LECTION PROCESS 
(WT/DSB/W/596/REV.4)   
8  APPOINTMENT OF APPEL LATE BODY MEMBERS: P ROPOSAL BY THE EUROP EAN UNION 
(WT/DSB/W /597/REV.4)  
8.1.  The Chairman  said that this item was on the Agenda of the present meeting at the request of 
Argentina, Brazil, Colombia, Chile, Guatemala, Mexico and Peru. In this regard, he drew attention 
to the communication contained in document WT/DSB/W/59 6/Rev.4 and invited the respective 
delegations to speak.  
8.2.  The representative of Mexico , speaking on behalf of Argentina, Brazil, Colombia, Chile, 
Guatemala, Mexico and Peru, thanked the Chairman for the report on his consultations. Mexico 
deeply regretted t hat, at this point, the AB selection processes had not been initiated. He noted 
that the selection process to replace Mr. Ramírez should have been launched at the end of 2016 or 
the beginning of 2017. In their effort to help finding a solution to the curre nt situation, the Latin 
American proponents had submitted five draft decisions. The present draft decision sought to 
launch a selection processes to fill the two existing vacancies, and the selection process to appoint 
a replacement for the post that would  arise in December 2017. The proposal was comprised the 
following elements: (i) to initiate three selection processes to replace Mr. Ricardo  Ramírez  
Hernández, whose second term had ended on 30  June 2017; (ii) to fill the vacancy created by the 
resignation  of Mr. Hyun Chong Kim on 1  August  2017; (ii i) to replace Mr. Peter Van den  Bossche, 
whose second term would expire on 11  December  2017; (iv) to establish a Selection Committee; 
(v) to set a deadline of 29  October  2017 for submitting nominations of candida tes; and 
(vi) to request the Selection Committee to make its recommendations at the regular DSB meeting 
in February  2018, at the latest . Mexico believed that this proposal was pragmatic and realistic and 
that it would resolve the current situation and allo w the selection processes  to be carried out in 
order  to appoint three new Appellate Body members.  The Latin American proponents were flexible 
regarding the deadlines, provided that the Selection Committee had sufficient time to issue its 
recommendations to  the DSB. By doing nothing in the current circumstances, which were very 
serious, unprecedented and risked leaving the Appellate Body in a dysfunctional situation very 
soon, the DSB failed to comply with its mandate and breached its obligations.  
8.3.  The repres entative of the European  Union  said his delegation thanked Argentina, Brazil, 
Colombia, Chile, Guatemala, Mexico and Peru for their revised proposal, which referred to all 
three  posts at issue. The EU fully supported the selection of new Appellate Body mem bers without 
delay. The EU noted that this proposed DSB decision corresponded, in substance, to the EU's 
proposal included under the next Agenda item. The EU agreed that there was an urgent need to fill 
these vacancies as soon as possible. For that reason,  the EU's proposal had provided for the 
completion of the selection procedures at the latest in Nov ember  2017, and not in February  2018, 
as had been foreseen in the proposal submitted by Argentina, Brazil, Colombia, Chile, Guatemala, 
Mexico and Peru. The E U was also ready to join consensus on the Latin American's proposal, if that 
proposal gathered the support of the Membership.  
8.4.  The representative of Japan , speaking in relation to Agenda items  8, 9 and 10, said that his 
country thanked the Chairman for his report. Japan also thanked the proponents for their 
respective proposals. The so -called "Rule 15" issue tha t had been raised by the United  States 
would involve an institutional question of whom or which organ of the WTO was responsible for 
ensuring the leg al status of an outgoing Appellate Body member during their transition. In 
reviewing or addressing the issue, Members may also want to consider how this decades -old rule 
could apply and operate within the framework of the DSU under the current situation fa ced by the 
dispute settlement system. As a WTO organ established specifically to administer the DSU, Japan 
believed that the DSB was and should be held responsible for addressing institutional issues of a WT/DSB/M/402  
 
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  systemic nature. Turning to the issue of the Appell ate Body selection process or processes, as had 
been noted by the Chairman, the DSB was obliged to fill three vacancies out of seven positions. 
Given the time and resources required for the DSB to select new members, it was incumbent on 
the DSB to launch t he selection processes as quickly as possible. Appointing a member of the 
Appellate Body was an important function, entrusted to the DSB under the DSU. Japan urged all 
Members concerned to exercise flexibility and act in a constructive manner so that the D SB could 
perform the important function contemplated in the DSU without further delay.  
8.5.  The representative of Switzerland , speaking in relation to Agenda items  8, 9 and 10, said that 
his country thanked the Chairman for his report and his ongoing efforts on  this matter. As it had 
stated at previous DSB meetings, inclu ding the informal meeting on 15  September  2017, 
Switzerland was very concerned about the situation regarding the Appellate Body and the growing, 
detrimental consequences for the well -functioning  of the dispute settlement mechanism and for 
the integrity and credibility of the multilateral trading system more broadly. Switzerland reiterated 
its readiness to engage in discussions on issues raised by the United States and to explore possible 
solution s. Yet it strongly believed that the selection processes for all three Appellate Body 
vacancies should not be held back any longer and should be launched, conducted and completed 
without further delay, in line with the two, now essentially identical writte n proposals on the table.  
8.6.  The representative of the United  States  said that as the United St ates had mentioned under 
Agenda  item 8, the United States was not in a position to support the p roposed decision. In the 
United  States' view, the United States  could not be considering launching a selection process to fill 
a vacancy if the person to be replaced continued to serve  and decide appeals. The United  States 
first would need appropriate action on the part of the DSB. This point would also apply to the 
upcomi ng Agenda item  10. 
8.7.  The representative of Hong Kong, China  said that her delegation thanked the respective 
Members for their proposals regarding the AB selection processes. As  it had expressed earlier, 
Hong Kong, China was deeply concerned about the impasse  over the selection process as the 
dispute settlement system would not be able to function properly with prolonged vacancies on the 
Appellate Body. Hong  Kong, China considered that the imminent task was to fill the vacancies as 
soon as possible in order to  minimize the negative impact on the normal functioning of the dispute 
settlement system. Hong  Kong, China preferred the EU's proposal, as the vacancies could be filled 
earlier, but was ready to join a consensus to launch the selection processes without fu rther delay. 
It urged all Members to cooperate to have a smooth selection process so that the vacancies could 
be filled as soon as possible. With regard to the US concerns, Hong Kong, China did not see that 
filling the vacancies on the Appellate Body would  prejudice the discussions on systemic issues. It 
appreciated Members' proposals regarding focused discussions on the identified issues with a view 
to improving the work of the WTO.  
8.8.  The Chairman  said that based on the ongoing discussion he would like to no te that Members 
were making statements with regard to both proposals p ertaining to Agenda items 9 and  10. 
Therefore, these two Agenda items were bein g de facto considered jointly.  
8.9.  The representative of New Zealand , speaking in relation to Agenda items  8, 9 and 10, said 
that her country believed that the efficient and effective functioning of the dispute settlement 
system was of utmost importance to the good health of the multilateral trading system and 
New Zealand continued to be seriously concerned by the current impasse in this regard. Selection 
processes should be a routine matter. New Zealand thanked the proponents for their proposals for 
how to launch the selection process as well as the Chairman for the suggestions he had put 
forward at the 31  August  2017 DSB meeting. New Zealand continued to be flexible regarding the 
process or processes used to fill the three positions and could support any of the suggested ways 
forward. It acknowledged the EU's flexibility which it thought was very helpful. New  Zeala nd 
agreed that the key matter was to launch and conclude the processes as soon as possible and it 
urged all Members to exercise flexibility to allo w this to go forward. While New  Zealand certainly 
stood ready to discuss the concerns raised by the United St ates under the previous Agenda item, it 
insisted that these were separate and distinct matters from the decision to launch the selection 
process to fill the new Appellate Body members. New Zealand agreed with previous speakers that 
the best way forward wou ld be to have separate and parallel processes to consider these issues. 
With regard to the substance of the US concerns, New Zealand reiterated that any resolution of 
the issues raised by the United States in relation to Rule  15 of the Working Procedures f or 
Appellate Review could only be done on a prospective basis. It could not affect any decisions or WT/DSB/M/402  
 
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  proceedings involving divisions that have already been composed applying the well -established 
practices of Rule 15 of the Working Procedures for Appellate R eview. As a party to "Indonesia – 
Importation of Horticultural Products, Animals and Animal Products" (DS478) New Zealand had no 
objection to Mr.  Ramírez continuing to serve on that appeal. It again called on all Members to be 
constructive and pragmatic an d to allow the launching of the selection processes for new Appellate 
Body members as soon as possible. New Zealand remained ready to work constructively with 
others in this regard.  
8.10.   The representative of Turkey , speaking in relation to Agenda items  8, 9 an d 10, said that his 
country thanked the Latin America countries and the EU for updating their respective proposals. 
Turkey referred to its statement made at the informal DSB meeting held on 15  September  2017. It 
believed that the concerns raised by the Uni ted States about the working procedures of the 
Appellate Body should be dealt with separately and should not block the immediate start of the 
selection process for the three vacancies on the Appellate Body. Like many other delegations, 
Turkey had deep conc erns regarding the well -functioning of the Appellate Body. It was the 
responsibility of the DSB to guarantee the smooth functioning of the overall system. So the DSB 
should start the process immediately, without further delay. Turkey was ready to join a co nsensus 
on either of the two proposals.  
8.11.   The representative of Norway  reiterated that her country continued to be flexible and would 
be in a position to support either of the proposals that had been put forward. Norway did however 
have a preference for the proposal from the EU, as it seemed to provide for a more efficient 
process that could facilitate the selection of the three Appellate Body members within an agreed 
time-frame. Norway urged all Members to show the utmost flexibility in order to ensure that the 
DSB surpassed this deadlock, for the benefit of the system.  
8.12.   The representative of Australia  said that her country remained deeply concerned at the 
impasse the DSB had reached in relation to appointments to the Appellate Body. Australia urged 
all Member s to engage constructively and demonstrate the necessary flexibility to agree to 
commence a selection process or processes. The DSB's priority had to be to take the necessary 
action to fill the current and forthcoming vacancies without further delay. In Au stralia's view, the 
DSB's failure to take such action would only serve to undermine the proper functioning of the 
Appellate Body and the WTO dispute settlement system more broadly, an outcome that Australia 
was determined to avoid. With that in mind, Austr alia was open to joining a consensus on either of 
the proposals, which had been put forward at the present meeting. Finally, Australia thanked the 
Chairman for his consistent efforts to resolve the current impasse, and expressed its hope that 
Members would  take the necessary action and agree on a positive way forward.  
8.13.   The representative of Venezuela , speaking in relation to Agenda items  8, 9 and 10, said that 
her country wished to reiterate its concern about the delay in launching the selection processes to  
fill the current and upcoming vacancies on the Appellate Body. Venezuela supported the proposal 
that had been presented by the group of LA countries. It also supported the EU's proposal since 
both proposals were aimed at achievin g the same result. Venezue la considered both proposals to 
be pragmatic and realistic. It believed that launching of the selection processes should not be 
linked to any discussions on the systemic concerns  raised by the United States.  
8.14.   The representative of Chinese  Taipei , speaking i n relation to Agenda items  8, 9 and 10, 
expressed his delegation's appreciation for the Chairman's report and all the efforts he had made 
to resolve this matter. Chinese Taipei referred to its statements made at previous DSB meetings 
and the informal DSB m eeting held on 15  September  2017. Given the urgency of this matter, 
Chinese  Taipei called on all Members to agree on the selection process or processes as soon as 
possible. It could support either of the two proposals put forward at the present meeting and  
looked forward to working closely with other Members to find a solution.  
8.15.   The representative of Korea  said that his country joined others in expressing its concerns 
about the delay in the launch of the selection process. Korea did not believe that the US c oncerns 
about the two procedural issues in the Appellate Body were proper justification to block the launch 
of the selection process. Korea shared the view of many other Members that they were two 
separate, independent issues. Thus, Korea urged the relevan t parties to reconsider their positions 
taking into account the systemic harm to the dispute settlement system arising from the failure to 
timely fill the vacancies. Also, Korea expressed its flexibility and openness to resolve this situation. WT/DSB/M/402  
 
- 21 - 
 
  In this rega rd, it was also ready to join a consensus on the two proposals that had been put 
forward.  
8.16.   The representative of the Russian  Federation  said that his country referred to its previous 
statements made on this matter and urged all Members to act constructively  and to start the 
selection processes as soon as possible.  
8.17.   The representative of Ecuador  said that one of the basic principles that governed the 
multilateral trading system was compliance with its rules. Article  3.2 of the DSU stipulated that the 
dispute s ettlement system was an essential element in providing security and predictability to the 
multilateral trading system. Members had the respon sibility to uphold the system. In Ecuador's 
view, this had not been honoured or respected by not launching the sele ction process to fill the 
vacancies on the Appellate Body. Ecuador believed that the dispute settlement system required 
Members to take a decision to resolve the current difficulties. The present difficulty had been 
caused by one Member. Th is should have n ever happened. Article  17.2 of the DSU provided that 
vacancies had to be filled as they arose. In Ecuador's view, the Chairman had the prerogative to 
take a decision to launch the process of filling the vacancies on the Appellate Body. This would be 
to the  benefit of the dispute settlement system. The DSU was very clear and indicated that 
vacancies had to be filled as they arose and therefore it was the Chairman's prerogative to take an 
urgent action to fill the vacancies that had arisen. Ecuador supported the proposal that had been 
put forward by seven Latin American countries.  
8.18.   The representative of Guatemala  said that his country, once again, wished to place on the 
record its concern about the present situation to which it had referred in its previous stat ements 
made on this matter.  
8.19.   The representative of the European  Union  said that the two proposals on the table were for 
the launching of all three selection processes and the EU understood that the DSB could not reach 
consensus at the present meeting. There fore, there was nothing more that could be done at the 
present meeting on this issue, but there was a point of clarification which could be of interest for 
the next DSB meeting. The EU believed that it had heard the United States say that the reason for 
which the United  States could not join the consensus at the present meeting was that: for as long 
as a person continued to serve on the Appellate Body, the procedure to replace him or her could 
not be launched. The EU understood that Mr. Kim was not serving on the Appellate Body anymore 
and that there was no disagreement on this point. So, for the benefit of the EU's preparation for 
the next DSB meeting it would be good if the United States could confirm that its objection related 
only to the procedures for t he replacement of Mr. Van de n Bossche and Mr. Ramírez and did not 
cover Mr. Kim.  
8.20.   The representative of Mexico , speaking on behalf of Argentina, Brazil, Colombia, Chile, 
Guatemala, Mexico and Peru, said that his country regretted that, for the fifth time, M embers had 
failed to reach a consensus to fulfil their duty to start the selection pro cesses. In this regard, 
Article  17.2 of the DSU set out an obligation to all Members that "vacancies shall be filled as they 
arise". Members had a duty to preserve the Ap pellate Body and the multilateral trading system. In 
light of what had happened at previous meetings, Mexico found it unacceptable that concerns and 
discussions on matters relating to the dispute settlement system were being linked to the launch 
of the App ellate Body selection processes. And given what had been established until now, this 
appeared to be close to a unanimous position in the DSB. Any substantive discussions that 
Members had on the appellate proceedings or more extensive debates on the functio ning of the 
Appellate Body, should not prevent them from continuing to operate fully and in conditions 
enabling it to meet its WTO obligations. The DSB should not make it possible for Members with 
specific concerns, whether justified or not, to decide to i mpede the functioning of the dispute 
settlement system until their concerns had been addressed. Otherwise, the Appellate Body, the 
dispute settlement system, and the rules based multilateral trading system to be held hostage due 
to individual Members' posi tions. The dispute settlement system was a cooperative effort of all 
Members, and the multilateral trading system depen ded on its proper functioning. Therefore, the 
Members' primary concern clearly had to be to recover the institutional nature of the Appel late 
Body and restore it to its full capacity. This would be without prejudice to Members' willingness to 
discuss any specific concerns or proposals in order to fine tune the Appellate Body's function. 
Finally, Mexico reiterated that the DSU did not requir e a DSB decision in order to initiate the 
processes to fill vacancies on the Appellate Body. In fact, the DSU explicitly stipulated that WT/DSB/M/402  
 
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  vacancies "shall be filled" as they arose. Thus, there was an obligation that the  DSB had to meet.  
Mexico, therefore, r equested the Chairman to use his authority to initiate the selection processes.  
8.21.   The representative of Chile, speaking on behalf of the Group of Latin American and 
Caribbean Countries (GRULAC), said that the GRULAC countries wished to make a statement 
regar ding the deadlock regarding the Appellate Body selection processes. The GRULAC countries 
recognized the Chairman's efforts to find a solution to this problem, and thanked the Chairman for 
convening the informal meeting on 15  September  2017, at which Member s had been able to 
express their views on the present situation. In this respect, the GRULAC countries wished to 
emphasize their deep concern about the present situation, which was impeding the proper 
functioning of one of the WTO's major bodies. If  the pr oblem was not resolved, the Appellate Body 
would be virtually paralysed. This would jeopardize the entire dispute settlement system. They 
noted that the delay in launching the Appellate Body selection process, with two vacancies having 
already arisen, mean t that Members had failed to comply with an existing mandate, and 
constituted a breach of legal obligations set out in the DSU. This would have serious consequences 
for the system and would set a bad precedent for the Organization. It would cause damage an d 
undermine the image and credibility of the WTO, in particular considering the complex 
international climate that had giving rise to negative repercussions for the multilateral trading 
system. The GRULAC countries were aware that certain concerns had been  raised at the 
31 August  2017 DSB meeting, and were being reiterated at the present meeting, with respect to 
the functioning of the dispute settlement system. These concerns were preventing the launch of 
the Appellate Body selection process. The GRULAC cou ntries considered that it was important for 
Members with concerns regarding the system to further explain those concerns to others. 
However, it could not accept that such concerns prevented legal obligations from being met or that 
their resolution was link ed to the filling of AB vacancies. The GRULAC countries pointed out that 
the functioning of the system could not be impeded while the concerns of some Members were left 
unaddressed. They called on Members who opposed the launching of the selection processe s to 
consider the serious repercussions of continuing to block them. They requested those Members not 
to make the launching of the processes conditional on a distinct process, which had to be 
addressed on its own merit, and rather to help find a solution t o swiftly ensure compliance with the 
legal obligations. Finally, the GRULAC countries requested the Chairman to continue to seek a 
solution to this issue.  
8.22.   The representative of Chile reiterated his country's concern about the negative implications 
for the system due to the failure to comply with the ex isting rules for filling the AB  vacancies. 
Chile, therefore, invited the parties involved to demonstrate their flexibility and resolve this 
problem without delay and without associating it with or making it co ntingent upon other issues 
that had to be considered separately. Chile encouraged the Chairman to use his authority to start 
the appointment process to fill the present and upcoming vacancies on the Appellate Body.  
8.23.   The representative of Costa  Rica, speak ing in relation to Agenda items  8, 9 and 10, thanked 
the Chairman for his consultations. Costa Rica joined other Members that had expressed their 
concerns about the present situation, and supported the statement made by Chile on behalf of 
the GRUL AC countrie s. It was the responsibility of all Members to ensure the proper functioning of 
the WTO. Article  17.2 of the DSU pointed out that vacancies had to be filled as they arose. 
Although Costa  Rica had expressed its readiness to discuss the systemic concerns rai sed by the 
United  States, and any other proposal aimed at improving this system, these discussions could in 
no way impede the launching of the selection process for filling the vacancies on the Appellate 
Body. The selection processes should beg in without a ny delay.  
8.24.   The representative of Peru said that his country wished to place on the record its support for 
the statement made by Chile on behalf of the GRULAC countries and the statement by Mexico on 
behalf of the Latin American proponents.  
8.25.   The representativ e of Uruguay  said that her country reiterated its statement made at  the 
informal DSB meeting on 15  September  2017. Uruguay supported the proposal submitted by the 
Latin American proponents as well as the statement that had been made Chile on behalf of 
the GRULAC. It shared the concerns regarding the need to seek a solution as speedily as possible.  
8.26.   The representative of Honduras  said that his country associated itself with the concerns 
expressed by Chile, on behalf of the GRULAC countries and the Dominican R epublic on behalf of 
the IGDC. Honduras urged Members to find a so lution as quickly as possible.  WT/DSB/M/402  
 
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  8.27.   The representative of El Salvador  said that her country thanked the Chairman for his effort s 
to consult on these matters. El Salvador wished to join others in supporting the statement by Chile 
on behalf of the GRULAC and expressed its concerns about the delay in launching the selection 
process to fill the vacancies on the Appellate Body.  
8.28.   The Chairman  thanked Members for their statements and said that he would co ntinue to 
consult further on this issue. At the same time, he encouraged Members to carry out more 
conversations and discussions among themselves so that the DSB could come up with more 
concrete ideas on a way to move forward. The Chairman regretted that i t was not possible to 
reach a solution at the present DSB meeting. However, he hoped that there could be a way to 
address both the launching of the selection processes and the systemic issues in an appropriate 
manner so as to ensure the good functioning of  the dispute settlement mechanism.  
8.29.   The DSB took note  of the statements.  
9  DISPUTE SETTLEMENT W ORKLOAD  
A.  Statement by the Chairman  
9.1.  The Chairman  said that, as he had announced at the beginning of the meeting, he would now 
make a report to provide the DSB wit h information about the number of disputes before panels 
and at the panel composition stage, the Appellate Body's workload and the ability of the 
Secretariat to meet expected demand over the coming period. This information reflected the status 
of disputes up until this DSB meeting on 29  September  2017. Other developments in the course of 
this meeting would be reflected in the information posted on the Members' website. Currently, 
there were 19  active panels (including five panels under Article  21.5 of the D SU) that had not yet 
issued a final report to the parties. Multiple disputes that were being considered simultaneously by 
the same panel were being counted as one. Limited staff resources currently prevented the 
assigning of dispute settlement officers to assist panels in one pending dispute. The parties had 
been informed of the situation, and as soon as the availability of appropriate staff was clear, the 
parties would be informed and the organization of the proceedings would commence. There were a 
further  five panels at the composition stage. This did not count panels for which there had been no 
composition activity in the last twelve months. In addition, three final panel reports that had been 
issued to the parties were presently being translated. The App ellate Body was currently dealing 
with seven appeals, including the extremely complex compliance proceedings in "EC and Certain 
Member States – Large Civil Aircraft (Airbus)" and in "US – Large Civil Aircraft (Boeing)". Three of 
these appeals could not be fully staffed at this point. Up to three additional appeals could be filed 
by the end of 2017. Finally, two matters had been referr ed to arbitration under Article  22.6 of 
the DSU. 
9.2.  The DSB took note  of the statement.  
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