RESTRICTED  
  
WT/DSB/M/416  
 
19 October 2018  
(18-6330) Page: 1/6 
Dispute Settlement Body  
15 August  2018    
 
 
MINUTES OF MEETING  
HELD IN THE CENTRE W ILLIAM RAPPARD  
ON 15  AUGUST  2018 
Chairperson: Ms. Sunanta Kangvalkulkij (Thailand)  
Table of Contents  
1   EUROPEAN  COMMUNI TIES AND CERTAIN MEM BER STATES – MEASURES  
AFFECTING TRADE IN L ARGE CIVIL AIRCRAFT ................................ ................................ . 1 
A.  Recourse to Article  21.5 of the DSU by the European  Union and certain memb er 
States: Request for the establishment of a panel  ................................ ................................ .... 1 
2   INDONESIA – IMPO RTATION OF HORTICULT URAL PRODUCTS, ANIMA LS 
AND ANIMAL PRODUCTS  ................................ ................................ ................................ .. 3 
A.  Recourse to Article  22.2 of the DSU by the United  States  ................................ ....................  3 
 
 
1  EUROPEAN  COMMUNITIES  AND CERTAIN MEMBER STATES – MEASURES AF FECTING 
TRADE IN LARGE CIVIL  AIRCRAFT  
A.  Recourse to Article  21.5 of the DSU by the European  Union and certain member States: 
Request for the establish ment of a panel (WT/DS316/39)  
1.1.  The Chairperson  drew attention to the communication from the European  Union and certain 
member States  contained in document WT/DS316/39, and invited the representative of the EU  to 
speak.  
1.2.  The representative of the European  Union said that his delegation requested, at the present 
meeting, the establishment of a panel with respect to a set of additional measures taken by the EU 
to comply with the DSB's recommendations and rulings adopted on 28  May 2018 in the original 
compliance pr oceedings in the "EC – Large Civil Aircraft" dispute (DS316). Through the specific 
measures detailed in the EU's second compliance communication, contained in document 
WT/DS316/34 and notified to the DSB on 17  May 2018, the EU had informed the DSB that the  EU 
had achieved full compliance with its WTO  obligations and, more specifically, that the EU had 
withdrawn the remaining subsidies and/or taken appropriate steps to remove their adverse effects.  
1.3.  At the DSB meeting on 28  May 2018, the United States had exp ressed the view that the EU 
had not yet fully complied with the DSB's recommendations and rulings. The United  States had also 
requested the re -initiation of arbitration proceedings, indicating that it disagreed that the measures 
in the EU's second complian ce communication contained in document WT/DS316/34 had  achieved 
full compliance with the EU's  WTO obligations. To address this disagreement, on 29  May 2018, the 
EU had requested consultations with the United  States. Consultations had been held in Geneva on  
27 June 2018. Unfortunately, the consultations had failed to resolve the dispute. Accordingly, the 
EU requested at the present meeting the establishment of a panel pursuant to Article  21.5 of the 
DSU and Article  7.4 of the SCM Agreement, with the standard  terms of reference, as stipulated in 
Article  7 of the DSU.  WT/DSB/M/416  
 
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 1.4.  The EU also recalled that under paragraph  2 of the Sequencing Agreement, contained in 
document WT/DS316/21  and which applied "for the exclusive purposes of this dispute", the parties 
to this dispu te had agreed to accept the establishment of a panel at the first DSB meeting at which 
this request would appear on the Agenda.  
1.5.  The representative of the United  States  said that the EU's decision to move forward with a 
request for yet another compliance pa nel in this 14 -year dispute did a disservice to the WTO and its 
dispute settlement system. When the EU had circulated its communication outlining the latest 
alleged steps it had taken to comply, the United States had expressed deep scepticism about the 
seriousness of the EU's claim of compliance. This scepticism had been based on the long history of 
the EU's failure to take any meaningful steps to end launch aid subsidies, the significant overlap with 
a previous EU communication that a WTO compliance panel had found to be almost entirely 
inaccurate, and the lack of even basic details about the new steps, let alone copies of the relevant 
measures.  
1.6.  The EU's behaviour had only reinforced the United States'  initial scepticism. If the EU, France, 
Germany, Spain, and the United  Kingdom had been seriously interested in demonstrating that they 
had brought their WTO -inconsistent subsidies into conformity with WTO rules, and if they had been 
seriously interested in finding a resolution to this dispute, then the United  States would have 
expected them to explain their alleged compliance actions, candidly and in detail, to the 
United  States. As Members  sat at the present meeting, the EU and these four  member States still 
had not provided even the most basic information abo ut alleged amendments made to certain launch 
aid contracts. That they had avoided such an explanation, or any attempt to resolve this dispute, 
and instead had moved to request the establishment of a panel, exposed this request as just one 
more step in the long EU history of tactics to drag out this dispute, instead of addressing their WTO -
inconsistent behaviour.  
1.7.  The United  States noted that the EU's panel request referred to agreed procedures between 
the EU and the United  States in relation to this dispute.1 Specifically, the EU asserted that, under 
paragraph  2 of the Agreed Procedures, "the Parties agreed to accept the establishment of a Panel at 
the first DSB meeting at which this request appears on the agenda". The United States said that the 
EU's asserti on was so obviously misleading that it was hard to regard it as anything but an 
intentional, and flagrant, misrepresentation. The United States invited other Members to look at the 
language of paragraph  2 of the Agreed Procedures contained in document WT/D S316/21 in order  to 
understand how concerning this was. Paragraph  2 unambiguously addressed the US request a n 
Article  21.5 panel that had been at issue at the time the Agreed Procedures had been concluded in 
January  2012. Paragraph  1 explicitly discussed t he timeline for consultations that the United  States 
had already requested, and the timeline for when "the United  States may request the establishment 
of a panel pursuant to Article  21.5 of the DSU". Paragraph  2 then stated: "[a]t the first DSB meeting 
at which the US request for the establishment of an Article  21.5 panel appears on the agenda, the 
European  Union shall accept the establishment of that panel". Accordingly, the provision very 
obviously did not apply to the present situation. Accordingly, the United  States was not required to 
accept at the present meeting, and therefore was not accepting at the present meeting, that the 
DSB should act on the EU's request for the establishment of a panel.  The United  States said that, 
with respect to the EU's ref erence to Article  7.4 of the SCM  Agreement, the EU and certain other 
Members had included references to other provisions in the covered agreements in a few past 
requests under Article  21.5 of the DSU  but they  had been without legal effect, as the DSB had 
referred the matter exclusively under Article  21.5 of the DSU, without reference to any other 
provision. Should the EU again seek the establishment of a panel at a future DSB meeting, the 
United States understood that referral under Article  21.5 of the DSU alone was what was 
contemplated. The United  States considered that there was no legal basis for the DSB to establish a 
panel under any other provision. All the DSB could do at a future DSB meeting was to refer the 
matter to the original panel under Article  21.5 of the DSU, if possible. Indeed, the EU panel request 
referenced a "disagreement as to the existence or consistency with a covered agreement of 
measures taken to comply" and thus made it clear that the matter at issue was only what was 
provided in Ar ticle 21.5 of the DSU.  
1.8.  The representative of the European  Union  said that his delegation regretted that the 
United  States called into question the commitments it had undertaken, together with the EU, in the 
                                                
1 Agreed Procedures under Articles  21 and  22 of the Dispute Settlement Understanding and Article  7 of 
the SCM Agreement ( "Agreed Procedures "), WT/DS316/21.  WT/DSB/M/416  
 
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  2012 Sequencing Agreement contained in document WT/DS316/21 . That Agreement set out jointly 
agreed procedures for the exclusive purposes of this dispute, which were designed to facilitate the 
resolution of this dispute. These procedures also applied to the request made by the EU at the 
present meeting, u nder Article  21.5 of the DSU and Article  7.4 of the SCM Agreement. The EU had 
expected the United  States to honour its commitments undertaken in the Sequencing Agreement in 
the interest of a prompt resolution of this dispute, notably its commitment to acce pt the 
establishment of a panel at the first DSB meeting at which such a request would appear on the 
Agenda. More generally, it was regrettable that the United States had not agreed that the second 
set of the EU's compliance measures achieved the EU's full  compliance, and that during the 
consultations the United States and the EU had not managed to find a mutually agreed solution. 
While it was not the intention of the EU to prolong these dispute resolution proceedings endlessly, 
faced with the US disagreeme nt and given that the United States had re -initiated the sanctions 
arbitration in this dispute, the EU had no other choice but to defend its interests in line with WTO 
rules and to seek a multilateral determination on the EU's full compliance.  
1.9.  The represen tative of the United  States  said that the EU's insistence that the Agreed Procedures 
required the United  States to accept the EU's request for establishment of a panel under Article  21.5 
of the DSU at the present meeting was plainly contrary to the text of  those Procedures. These 
Procedures had been circulated as document WT/DS316/21, and the United States invited every 
delegation to read them. Paragraph  1 stated that "the United States" – not the EU – "may request 
the establishment of a panel pursuant to A rticle 21.5 of the DSU at any time". And paragraph  2 
referred to the first DSB  meeting at which "the US request" – not the EU request – for the 
establishment of a panel appeared on the Agenda. It then indicated that "the European Union" – not 
the United  States – shall accept the establishment of that panel. The EU's suggestion that this text 
was applicable to the EU's panel request, and that the United  States was not honouring a 
commitment, was frankly absurd.  
1.10.   The representative of Canada  said that his coun try noted that the EU's recourse to Article  21.5 
of the DSU in this dispute provided another example of responding parties initiating compliance 
proceedings. Other recent examples occurred in the "US – Tuna II (Mexico)" dispute (DS381), the 
"India – Agricu ltural Products" dispute (DS430), the "India – Solar Cells" dispute (DS456), and the 
"Columbia – Textiles" dispute (DS461). The number and frequency of these recent examples 
underscored the utility and appropriateness of the right of a responding party to initiate compliance 
proceedings. Canada wished to register its appreciation for the EU's recognition of its right under 
Article  21.5 of the DSU to initiate compliance proceedings as a responding party. Canada took note 
of and welcomed the departure that th is represented from the position that the EC had adopted in 
the "Canada – Continued Suspension" dispute (DS321) where it had argued that, "an implementing 
Member cannot have recourse to Article  21.5 of the DSU to confirm the consistency with the WTO 
agreem ents of its own measures".2 
1.11.   The DSB took note  of the statements and agreed  to revert to this matter.  
2  INDONESIA – IMPORTAT ION OF HORTICULTURAL  PRODUCTS, ANIMALS A ND ANIMAL 
PRODUCTS  
A.  Recourse to Article  22.2 of the DSU by the United  States (WT/DS478/20)  
2.1.  The Chairperson  drew attention to the communication from the United  States,  contained in 
document WT/DS478/20, and invited the representative of the United  States  to speak.  
2.2.  The representative of the United  States  said that on 22  November  2017, the DSB had adopted 
the reports contained in WT/DS478/R and WT/DS478/AB/R, finding that Indonesia's measures on 
horticultural products, animals and animal products had breached Article  XI:1 of the GATT  1994. 
Accordingly, the  DSB had recommended that Indonesia bring its measures into conformity with its 
obligations under the GATT  1994. The United  States and Indonesia had agreed that the reasonable 
period of time for Indonesia to implement the DSB's recommendations and rulings would expire on 
22 July 2018. The RPT had now expired, and Indonesia had not brought its measures fully into 
compliance with WTO rules.  
                                                
2 Report of the Appellate Body, "Canada – Continued Suspension " (DS321), para. 350.  WT/DSB/M/416  
 
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 2.3.  In document WT/DS478/20, the United  States had requested authorization from the DSB to 
suspend concessions or other obli gations with respect to Indonesia at an annual level based on a 
formula commensurate with the trade effects caused to the interests of the United  States. Based on 
a preliminary analysis for only certain products, the United  States had provisionally estimat ed this 
level at up to approximately US$350  million for 2017. The United  States would update this figure 
annually. The United  States remained open to working with Indonesia to resolve US  concerns. US 
farmers were eager to serve Indonesian consumers their w orld-class products. To fully resolve this 
dispute, US agricultural products must be able to access the Indonesian market as Indonesia had  
commit ted under WTO rules.  
2.4.  The United  States noted that Indonesia had submitted to the Chairperson of the DSB an 
objection under Article  22.6 of the DSU to the level of suspension of concessions or other obligations 
proposed by the United  States, thereby referr ing the matter automatically to arbitration. The 
United  States noted that it had not been necessary for the DSB to take up this item in light of 
Indonesia's objection on 14  August  2018. Nonetheless, the United  States had no objection to the 
DSB noting the matter had already been referred to arbitration pursuant to Indonesia's objection.  
2.5.  The representative of Indones ia said that her country respected the recommendations and 
rulings of the Panel and the Appellate Body in the " Indonesia – Importation of Horticultural Products, 
Animals and Animal Products" disputes (DS477/DS478). Subsequent to the adoption of the Reports  
of the Panel and the Appellate Body by the DSB, Indonesia had committed to implement the DSB's 
recommendations and rulings within a reasonable period of time. In this regard, Indonesia, 
New Zealand and the United  States had agreed on the RPT, which had ex pired on 22  July 2018.  
2.6.  Prior to the expiry of the RPT, Indonesia had completed the amendment of relevant regulations 
by enacting four regulations, namely: (i) the Minister of Agriculture's Regulation No.  24 of  2018 
concerning the Amendment to Regulation No . 38/Permentan/Hr.060/11/2017 of the Minister of 
Agriculture concerning Import Recommendation of Horticultural Products (entered into force on 
28 May 2018); (ii) the Minister of Trade's Regulation No.  64 of  2018 concerning the Fourth 
Amendment of Regulatio n No.  30/M-Dag/Per/5/2017 of the Minister of Trade concerning Provisions 
for Import of Horticultural Products  (entered into force on 31  May 2018); (iii)  the Minister of 
Agriculture's Regulation No.  23 of 2018 concerning the Amendment to Regulation 
No. 34/Permentan/Pk.210/7/2016 of the Minister of Agriculture concerning the Importation of 
Carcass, Meat, Offal and/or its Processed Products into the Territory of the Republic of Indonesia 
(entered into force on 18  May 2018); (iv) the Minister of Trade's Regulat ion No.  65 of  2018 
concerning the Third Amendment of Regulation No.  59/M-Dag/Per/8/2016 of the Minister of Trade 
concerning the Provisions for Export and Import of Animals and Animal Products (entered into force 
on 31  May 2018). Indonesia considered that t hese amending regulations had addressed all 
inconsistent measures in this dispute in accordance with the DSB's recommendations and rulings. 
Hence, Indonesia was of the view that full compliance with the DSB's rulings and recommendations 
had been achieved. In addition, these regulations had also been notified to the Committee on Import 
Licensing.  
2.7.  Considering these efforts, Indonesia was disappointed with the decision of the United  States to 
request the DSB's authorization to suspend concessions or other obli gations under the GATT  1994 
with respect to Indonesia. In general , and pursuant to Article  21.5 of the DSU, if there was a 
disagreement as to the existence or consistency of compliance, such dispute should be decided 
"through recourse to these dispute sett lement procedures, including wherever possible resort to the 
original panel". Indonesia believed that there was a need to explore with the United  States the 
possibility of agreeing on a sequencing agreement, similar to what Indonesia had agreed to with 
New Zealand on 10  August  2018. For these reasons, Indonesia objected to the US request for 
authorization to suspend concessions or other obligations, as proposed in document WT/DS478/20. 
Indonesia considered that the level of proposed suspension of concession s or other obligations was 
not equivalent to the alleged level of nullification or impairment, bearing in mind that all the disputed 
measures had been brought into conformity with Indonesia's WTO obligations. Moreover, Indonesia 
claimed that the principles  and procedures of Article  22.3 of the DSU had not been followed. 
Indonesia was ready to engage in further discussions with the United  States regarding the 
settlement of this dispute.  WT/DSB/M/416  
 
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  2.8.  The representative of New Zealand  said that his country was a co -complai nant alongside the 
United  States in this dispute, with New Zealand's case referenced as WT/DS477. On 
22 November  2017, the DSB had also adopted the reports contained in WT/DS477/R and 
WT/DS477/AB/R, finding that Indonesia's measures on horticultural produc ts, animals and animal 
products had been inconsistent with Article  XI:1 of the GATT  1994. Accordingly, the DSB  had 
recommended that Indonesia bring its measures into conformity with its obligations under the 
GATT  1994. Indonesia had reached an agreement wi th New  Zealand and the United  States that the 
reasonable period of time for Indonesia to implement the DSB's recommendations would expire on 
22 July 2018.  
2.9.  As had been noted in the US request for recourse to Article  22.2 of the DSU contained in 
document WT/ DS478/20 of 3  August  2018, "[i]n the view of the United  States, Indonesia failed to 
bring its measures into compliance with its obligations under the GATT 1994 within that period". 
New Zealand shared the US view that Indonesia had still not complied fully with the 
recommendations of the DSB in these WTO cases. New Zealand said that the "prompt" settlement 
of disputes was a critical principle of the WTO dispute settlement system. At this moment in time, 
when the functioning of the rules -based WTO dispute set tlement system was being closely examined 
in terms of its practical value, this obligation of prompt compliance was one that all WTO Members 
must be particularly vigilant to implement. WTO Members held a collective responsibility to ensure 
that their actio ns support the WTO and its dispute settlement function. Furthermore, bringing 
measures into compliance with WTO obligations required more than formal amendment of 
WTO-inconsistent regulations; it required meaningful removal of the WTO -inconsistent restrict ions 
in practice.  
2.10.   New Zealand recognized that the reasonable period of time to comply in this dispute had only 
recently expired. New Zealand therefore encouraged Indonesia to actively bring all measures found 
by the DSB to be WTO -inconsistent into complian ce with its obligations promptly, and in a meaningful 
manner. In New  Zealand's view, to date, this WTO dispute had been an exemplar of the value of the 
WTO's rules -based dispute settlement system and its ability to resolve trade disagreements. 
New Zealand trusted that it would continue to serve as a key example of the value of the WTO's 
rules-based dispute settlement system at this moment in time. This would require Indonesia's 
prompt and full compliance with the DSB's recommendations. New  Zealand looked fo rward to 
continuing to work alongside Indonesia and the United  States to achieve that result.  
2.11.   The representative of Canada  said that this dispute raised the issue of sequencing under the 
DSU for the DSB's consideration. Frequently, the uncertainty arising from the ambiguity in the DSU 
regarding the sequence of compliance proceedings and requests for authorization from the DSB to 
suspend concessions had been resolved through "sequencing agreements". These agreements set 
out that, for the purposes of a specif ic dispute, disagreements about the WTO -consistency of a 
compliance measure would be resolved through compliance proceedings before the grant of 
authorization to suspend concessions, and that the request for such authorization could be made 
after the expir y of the 30 -day time period set out in Article  22.6 of the DSU. Sequencing agreements 
thus overcame the uncertainty that the text of the DSU created and contributed to the effectiveness 
and predictability of the dispute settlement system. Canada invited th e disputing parties to consider 
their procedural options with due regard both for systemic considerations and for their own interests 
in reciprocal treatment in future disputes.  
2.12.   The representative of the United  States  said that regarding sequencing agreeme nts, as 
Indonesia and Canada knew, the long -standing US position was that sequencing agreements were 
not required under the DSU. Under Article  22.6 of the DSU, the negative consensus rule applied 
within 30  days of the end of the period for compliance. By s ubmitting a request under Article  22.2 
of the DSU, to which Indonesia had objected on 14  August  2018, the United  States was preserving 
its negative consensus rights. Taking this step was neither surprising nor unusual. For example, the 
United  States would refer Members to the Minutes from the DSB meeting of 3  January  20183, where 
the EU had stated that "the EU had requested the suspension of concessions to preserve its rights 
in these dispute settlement proceedings". The United  States also referred Members to the Minutes 
of the DSB meeting of 23  August  20134, where Indonesia itself had put forward a request to suspend 
                                                
3 WT/DSB/M/405 ( "Russia – Pigs (EU) " (DS475)), para. 1.2.  
4 WT/DSB/M/335 ( "US – Clove Cigarettes (Indonesia) " (DS406)), para. 1.3.  WT/DSB/M/416  
 
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 concessions. The United  States remained prepared to engage with Indonesia to facilitate its coming 
into compliance with the DSB's recommendati ons in this dispute.  
2.13.   The DSB took note  of the statements and that the matter raised by Indonesia in document 
WT/DS478/21 has been referred to arbitration, as required by Article  22.6 of the DSU.  
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