WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/DSB/M/313 
29 May 2012 
 (12-2811) 
Dispute Settlement Body 
23 March 2012  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard 
on 23 March 2012 
 
Chairperson:  Mrs. Elin Østebø Johansen (Norway) 
 
  Prior to the adoption of the Agenda, the item concerning the adoption of the Panel Reports in 
the disputes on:  "United States – Certain Country of Origin Labelling (COOL) Requirements" 
(DS384; DS386) was removed from the proposed Ag enda following the US decision to appeal the 
Reports.     Subjects discussed: Page 
 
1.  Surveillance of implementation of recommendations adopted by the DSB ......................... 2  
(a)  United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States ............................................................................................................. ............ 2 
(b)  United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by the Unite d States ................................................................................... 4 
(c)  United States – Section 110(5) of the US Copyright Act:  Status report by 
the United States ............................................................................................................. ............ 5 
(d)  European Communities – Measures affecting the approval and marketing of biotech 
products:  Status report by the European Union ......................................................................... 5  
(e)  China – Measures affecting trading righ ts and distribution services for certain 
publications and audiovisual entertainment products:  Status report by China .......................... 6  
(f)  United States – Anti-dumping administrative reviews and other measures related to 
imports of certain orange juice from Brazil:  Status report by the United States ....................... 7  
(g)  United States – Definitive anti-dumping and countervailing duties on certain products 
from China:  Status report by the United States .......................................................................... 8  
2.  Implementation of the reco mmendations of the DSB ............................................................ 8  
(a)  China – Measures related to the exportation of various raw materials ....................................... 9  
(b)  European Union – Anti-dumping measures on certain footwear from China ............................. 9  
(c)  Dominican Republic – Safeguard measures on imports of polypropylene bags and 
tubular fabric ................................................................................................................ ............. 10  
3.  United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB .......................................... 11  
(a)  Statements by the European Union and Japan .......................................................................... 11  WT/DSB/M/313 
Page 2  
 
  4.  United States – Measures affecting the cross border supply of gambling and 
betting services .............................................................................................................. .......... 12 
(a)  Statement by Antigua and Barbuda re garding the implementation of the 
recommendations adopted by the DSB ..................................................................................... 12  
5.  United States – Measures affecting trade in large civil aircraft (second complaint) ........ 12  
(a)  Report of the Appellate Body and Report of the Panel ............................................................. 12  
6.  Statement by the Chairperson regarding the appointment of Appellate Body 
members ....................................................................................................................... ............ 17  
7.  Election of Chairperson ....................................................................................................... ... 18 
 
 
1. Surveillance of implementation of recommendations adopted by the DSB 
(a) United States – Section 211 Omnibus Appr opriations Act of 1998:  Status report by 
the United States (WT/DS176/11/Add.112) 
 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.112) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.87) 
 
(d) European Communities – Measures affecting the approval and marketing of  biotech products:  
Status report by the European Union (WT/DS291/37/Add.50) 
 (e)  China – Measures affecting trading rights and distribution services for certain publications 
and audiovisual entertainment products:  Status report by China (WT/DS363/17/Add.14) 
 
(f) United States – Anti-dumping administrative revi ews and other measures related to imports of 
certain orange juice from Brazil:  Status report by the United States (WT/DS382/10/Add.3) 
 (g) United States – Definitive anti-dumping a nd countervailing duties on certain products from 
China:  Status report by the United States (WT/DS379/12/Add.2) 
 
 
The Chairperson recalled that Article 21.6 of the DSU required that unless the DSB decided 
otherwise, the issue of implementation of the re commendations or rulings shall be placed on the 
Agenda of the DSB meeting after six months follo wing the date of establis hment of the reasonable 
period of time and shall remain on the DSB's Agenda  until the issue was resolv ed.  She proposed that 
the seven sub-items under Agenda item 1 be considered separately.  
 
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States (WT/DS176/11/Add.112) 
1. The Chairperson drew attention to documen t WT/DS176/11/Add.112, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US Section 211 Om nibus Appropriations Act of 1998. 
2. The representative of the United States said that  his country had provided a status report in 
this dispute on 12 March 2012, in accordance with Article 21.6 of the DSU.  Legislative proposals 
had been introduced in the current 112th Congress to  implement the recommendations and rulings of  WT/DSB/M/313 
 Page 3 
 
 
  the DSB.  The US Administration would continue to work on solutions to implement the DSB's 
recommendations and rulings. 
3. The representative of the European Union said that the EU thanked the United States for its 
most recent status report.  The EU hoped that the US authorities would very soon take steps towards 
implementing the DSB's ruling and resolve this matter. 
4. The representative of Cuba said that the stat us report submitted by the United States at the 
present meeting contained only one change as comp ared to the previous reports, namely its 
number (112).  The United States showed that nothing had been done for more than a decade to implement the DSB's rulings and recommendations in the Section 211 dispute.  Thus, the US non-
compliance continued and there was no effective WTO- consistent solution to e nd this dispute.  The 
United States had been unable to show any change in its position or to send a signal of any progress 
towards meeting its WTO obligatio ns.  In fact, the legislative proposals referred to by the 
United States in its status report remained at a st andstill, since they did not constitute a priority for 
either the US Administration or the US Congress .  At the same time, the United States openly 
displayed its incoherent foreign policy by co-s ponsoring and promoting "respect for intellectual 
property rights" in the WTO, through the so-ca lled "Anti-Counterfeiting Trade Agreement".  The 
United States also sought to impose that Agreem ent which was a result of secret and exclusive 
negotiations, on other Members, in order to guarantee the private rights of companies from the United States and other developed countries which monopolized ownership of the majority of marks 
and patents worldwide.  At numerous forums, th e United States had expressed its "concerns" about 
the alleged non-compliance of other Members with  the TRIPS Agreement, while at the same time 
proposing legislation on the subject, despite its conti nuing record of violations of intellectual property 
rights, as in the case of Section 211.   
5. The US conduct discredited the dispute settlement  system, in which Members placed hopes of 
great success at the time when the WTO had been est ablished.  It was an infringement of intellectual 
property rights to keep in place legislation that w as inconsistent with the TRIPS Agreement, which 
provided the highest degree of regulation and pr otection for intellectual property rights at the 
multilateral level.  As Cuba pointed out every month, the Bacardi Company, under the protection of Section 211, marketed a line of rum, making impr oper use of the Havana Club trademark.  This 
legitimized misleading advertising by the Bacardi Company which continued, with impunity, to use 
the trademark to sell rum of non-Cuban origin under a Cuban brand name.  The United States, 
contrary to the image of a protector of intellectual property rights that it tried to portray, undermined 
and degraded the aims of those players in the ar ea of international trade that genuinely sought to 
combat counterfeiting.  Cuba reaffirmed its determination to continue demanding that the 
United States comply with its WTO legal obliga tions.  No country, however powerful, had the 
authority to place itself above international law a nd multilateral trade rules.  Repealing Section 211 
was the only way of arriving at an equitable settlement  of this dispute.  The United States should learn 
that neither the economic, trade and financial blocka de against Cuba nor the legislative contrivances 
of its implementation would succeed in undermining th e success of the Cuban revolution.  Cuba urged 
the United States to comply with th e DSB's rulings and recommendations. 
6. The representative of Brazil said that her count ry thanked the United States for its status 
report but noted that, once again, the United Stat es reported lack of progress.  Brazil remained 
concerned about this situation of non-complianc e with the DSB's recommendations and urged the 
United States to bring its measures into conformity with WTO disciplines.  
7. The representative of China said that her country  thanked the United States for its status 
report.  However, China regretted that the United States, once again, reported non-compliance.  This 
prolonged situation of non-compliance was highly incompatible with the prompt and effective 
implementation required under the DSU provisions, in particular when the interests of a developing-WT/DSB/M/313 
Page 4  
 
  country Member were affected.  Thus, China urge d the United States to implement the DSB's rulings 
and recommendations without further delay.  
8. The representative of the Plurinational State of Bolivia said that, once again, the United States 
had nothing new to report.  Throughout the years, Bo livia noted the lack of political will on the part of 
the United States to resolve this dispute.  Bolivia, therefore, reiterated its concern about the US non-
compliance with the DSB's reco mmendations.  This situation of  non-compliance undermined the 
credibility and integrity of the multilateral trading system and caused serious harm to a developing-
country Member.  Calls on Cuba to  initiate a new dispute on this ma tter would imply high financial 
costs and would result in the same DSB ruling.  Once again, Bolivia urged the United States to 
comply with the DSB's recommendations and rulings and to take steps to remove the restrictions 
under Section 211.  Finally, he said that Bolivia s upported the concerns raised by Cuba at the present 
meeting.   
9. The representative of Nicaragua said that his count ry thanked the United States for its status 
report in this dispute.  Nicaragua noted that the status report did not contain any new information and 
remained the same over the years.  This showed the continued lack of will on the part of the 
United States to comply with the DSB's recomme ndations and rulings.  Nicaragua supported Cuba's 
arguments and had confidence in the multilateral tradi ng system and wished to strengthen that system.  
However, Members' non-compliance with the DSB' s recommendations and rulings undermined the 
credibility of the system and had affected Cuba's  trading and economic interests for more than a 
decade.  Nicaragua, once again, urged the United States to comply with the DSB's recommendations 
and rulings. 
10. The representative of Ecuador said that his c ountry supported the statement made by Cuba 
and, once again, noted that Article 21 of the DSU referred specifically to prompt compliance with the 
DSB's recommendations and rulings, in particular  where the interests of a developing-country 
Member were affected.  Ecuador hoped that the Un ited States would step up its efforts to ensure 
prompt compliance with the DSB's recommendations and rulings by fully repealing Section 211. 
11. The representative of the Dominican Republic said that his country thanked the United States 
for its status report.  The Dominican Republic, once again, regretted that this item had been on the 
DSB's Agenda for such a long time.  The Dominican Republic understood the US Administration's efforts and the balance of powers in the US system, however, it believed that non-compliance 
undermined the credibility of the dispute settlement system.  In that regard, the Dominican Republic, 
once again, urged the US Administration to step up it s efforts in order to find a definitive solution to 
comply with the DSB's recommendations and rulings. 
12. The DSB took note of the statements and agreed to revert to this matter at its next regular 
meeting. 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.112) 
13. The Chairperson drew attention to documen t WT/DS184/15/Add.112, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US anti-dumping measures on certain hot-rolled steel products from Japan. 
14. The representative of the United States said that  his country had provided a status report in 
this dispute on 12 March 2012, in accordance with Ar ticle 21.6 of the DSU.  As of November 2002, 
the US authorities 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 inv estigation at issue in 
this dispute.  With respect to the recommendations and rulings of the DSB that had not already been  WT/DSB/M/313 
 Page 5 
 
 
  addressed by the US authorities, the US Administ ration would work with the US Congress with 
respect to appropriate statutory measures that would resolve this matter. 
15. The representative of Japan said that his country  thanked the United States for its statement 
and its most recent status report.  Japan noted th at the United States had taken certain measures to 
implement part of the DSB's recommendations  in November 2002.  Japan hoped that the 
United States would soon be in a position to report to the DSB on more tangible progress with respect 
to the implementation of the remaining part of th e DSB's recommendations.  Once again, Japan called 
on the United States to fully and promptly impl ement the DSB's recommendations in this long-
standing dispute without further delay. 
16. The DSB took note of the statements and agreed to revert to this matter at its next regular 
meeting. 
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.87) 
17. The Chairperson drew attention to documen t WT/DS160/24/Add.87, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning Section 110(5)  of the US Copyright Act. 
18. The representative of the United States said that  his country had provided a status report in 
this dispute on 12 March 2012, in accordance with Article 21.6 of the DSU.  The US Administration 
would continue to confer with the EU, and to work  closely with the US Congress, in order to reach a 
mutually satisfactory resolution of this matter.  
19. The representative of the European Union said that the EU noted and thanked the 
United States for its status report.  As it had stated  many times in the past, the EU remained keen to 
resolve this dispute.  
20. The DSB took note of the statements and agreed to revert to this matter at its next regular 
meeting. 
(d) European Communities – Measures affecting the approval and marketing of biotech products:  
Status report by the European Union (WT/DS291/37/Add.50) 
21. The Chairperson drew attention to documen t WT/DS291/37/Add.50, which contained the 
status report by the European Union on progress in the implementation of the DSB's 
recommendations in the case concerning its measures a ffecting the approval and marketing of biotech 
products. 
22. The representative of the European Union said that  the EU hoped that it could continue on the 
constructive path of dialogue with the United States.  A technical meeting had taken place on 
20 March 2012.  At that meeting, the EU and th e United States had discussed directly issues of 
concern for both sides as well as recent developments  in the biotech field.  In 2012, the Commission 
had already authorized three more GMOs1 and had renewed the authorization of a fourth one.2  Two 
of these decisions3 had been adopted only six months af ter the relevant EFSA opinions had been 
published.  Furthermore, on 15 February 2012, EFSA had issued its opinion on the safety of a GM 
                                                      
1 A5547-127 soybean, 356043 soybean, MON87701 soybean. 
2 40-3-2 soybean. 
3 Authorization decision for 356043 and MON87701 soybeans. WT/DSB/M/313 
Page 6  
 
  soybean for food and feed uses.
4  Regarding the concerns expressed by the United States on the 
backlog of approvals, the EU recalled that its approval system was not covered by the DSB's 
recommendations and rulings.  The EU underlined that the GMO regulatory regime was working normally as evidenced by the approval decisions men tioned.  The functioning of the GMO regime 
should not be rigidly assessed purely quantitatively a nd in the abstract, in terms of the number of 
authorizations per year, since this was dependent on various product and case-specific elements and in 
particular on the quality of applications and the tim e needed by applicants to answer requests from 
EFSA on additional scientific information.   
23. The representative of the United States said that  his country thanked the EU for its status 
report and its statement made at the present meeting.  As it had explained at past meetings of the DSB, 
the United States had substantial concerns regardi ng EU measures affecting the approval of biotech 
products.  The EU measures had resulted in subs tantial restrictions on the importation of US 
agricultural products.  Earlier that week, as th e EU had noted, the United States held useful 
discussions with EU officials regarding these concerns and related issues.  
24. The DSB took note of the statements and agreed to revert to this matter at its next regular 
meeting. 
(e) China – Measures affecting trading rights and distribution services for certain publications 
and audiovisual entertainment products:  Status report by China (WT/DS363/17/Add.14) 
25. The Chairperson drew attention to documen t WT/DS363/17/Add.14, which contained the 
status report by China on progress in the implemen tation of the DSB's recommendations in the case 
concerning China's measures affecting trading rights and distribution services for certain publications 
and audiovisual entertainment products. 
26. The representative of China said that her country had provided a status report in this dispute 
on 12 March 2012, in accordance with Article 21.6 of the DSU.  China had made tremendous efforts 
to implement the DSB's rulings and recommendati ons, and had completed amendments to most 
measures at issue.  Through those steps, China had ensured full implementation of the DSB's 
recommendations and rulings, except those concerning f ilm for theatrical release.  As regard to the 
measures concerning film for theatrical release, Ch ina had been discussing with the United States and 
had recently reached an agreement towards resolv ing this matter which would soon be signed and 
notified to the DSB.  
27. The representative of the United States said that his country thanked China for its status report 
and its statement made at the present meeting.  The United States and China had recently reached 
agreement on a Memorandum of U nderstanding regarding films fo r theatrical release.  The 
United States looked forward to the formal signi ng of the MOU soon.  In response to China's 
statements in its status report regarding products other than films for theatrical release, the United States noted that it continued to review China's measures relating to reading materials, 
audiovisual home entertainment products, and sound recordings to assess whether the steps taken by 
China implement the DSB rulings and recommendati ons.  At the present time, the United States was 
not in a position to conclude that China had full y implemented the recommendations and rulings in 
this dispute in all areas other than for films for theatrical release.  The United States continued to 
review the steps that China had taken in those areas. 
28. The DSB took note of the statements and agreed to revert to this matter at its next regular 
meeting. 
                                                      
4 MON87701×MON 89788.  WT/DSB/M/313 
 Page 7 
 
 
  (f) United States – Anti-dumping administrative review s and other measures related to imports of 
certain orange juice from Brazil:  Status report by the United States (WT/DS382/10/Add.3) 
29. The Chairperson drew attention to document WT/DS382/10/Add.3, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US anti-dumping administrative revi ews and other measures related to imports of 
certain orange juice from Brazil. 
30. The representative of the United States said that the reasonable period of time for the 
United States to implement the recommendations and ru lings of the DSB in this dispute, as had been 
agreed upon by Brazil and the United States, had ended on 17 March 2012.  On 14 February 2012, the 
US Department of Commerce had published a modifica tion to its procedure in order to implement the 
DSB's recommendations and rulings regarding the u se of "zeroing" in anti-dumping reviews.  The 
United States and Brazil were at the present time engaging in discussions regarding the 14 February 2012 notice.  The United States wished to  take the opportunity to inform Members that, 
following a five-year "sunset" review, the US Inte rnational Trade Commission had recently made a 
determination to revoke the exis ting anti-dumping duty order on orange juice from Brazil as of 
9 March 2011. 
31. The representative of Brazil said that her count ry thanked the United States for its status 
report.  Brazil and the United States had held consu ltations regarding the impact of the final rule 
published recently by the US Department of Co mmerce regarding the orange juice anti-dumping 
proceedings in the United States and, consequen tly, the "Orange Juice" dispute at the WTO.  
According to that rule, the US Department of Co mmerce would no longer use "zeroing" in all reviews 
pending before it for which preliminary results woul d be issued after 16 April 2012.  The final rule 
did not redress the illegal use of "zeroing" in re views completed before 16 April for which anti-
dumping duties had not yet been collected.  The cons ultations with the US authorities had confirmed 
to Brazil that the change in policy was only prospec tive.  Furthermore, it seemed that the final rule 
would not be applicable to the fifth orange juice administrative review, despite the fact that this 
review was still ongoing and that its preliminary r esults would be published after the end of the 
reasonable period of time, which was 17 March 2012.  Supported by WTO jurisprudence on the 
matter, Brazil understood that, in order to fully co mply with the DSB's recommendations and rulings 
in the "Orange Juice" dispute, the United States would be required not only to not use "zeroing" in the fifth review, but also to revise the calculation of  assessment rates applying to past entries that 
remained unliquidated at the end of the reasonable period of time.  However, as the United States had 
informed Members, such implementation actions would not be covered by the final rule.  The 
United States had also reported that the anti-dumping order on orange juice had been revoked by the International Trade Commission on 14 March 2012.  This was certainly a positive development for 
the Brazilian exporters who had been subject to an  unfair anti-dumping order since 2006.  However, 
this revocation had no connection to the "Orange Ju ice" dispute and did not bring relief to the 
Brazilian exporters in addition to that brought by th e final rule, which determined the abandoning of 
"zeroing" in future reviews.  Brazil was still as sessing whether the implementing measure taken by 
the United States would allow it to conclude the di spute, or whether, on the contrary, Brazil would 
need to pursue its rights through implementation and retaliation panels.  Brazil would inform 
Members of its decision in due course. 
32. The DSB took note of the statements and agreed to revert to this matter at its next regular 
meeting. WT/DSB/M/313 
Page 8  
 
  (g) United States – Definitive anti-dumping and countervailing duties on certain products from 
China:  Status report by the United States (WT/DS379/12/Add.2) 
33. The Chairperson drew attention to document WT/DS379/12/Add.2, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US definitive anti-dumping and countervailing duties on certain products from 
China. 
34. The representative of the United States said that  his country had provided a status report in 
this dispute on 12 March 2012, in accordance with Article 21.6 of the DSU.  The United States drew 
Members' attention to a new US law enacted on 13 March 2012, which clarified the application of US countervailing duties to non-market economies.  The new legislation made clear that where 
countervailing duties were applied to exports from a non-market economy country at the same time 
that anti-dumping duties, calculated using a "surr ogate value" methodology, were applied to the 
exports, and evidence was presented that this had r esulted in an increase in the dumping margin, the 
Department of Commerce may reduce the anti-dumping duty to avoid what had been referred to as a 
"double remedy".  The Department of Commerce w as currently working to implement this new law, 
including as part of US efforts to implement the recommendations and rulings of the DSB in 
connection with this dispute.  A copy of the law was currently available on the Internet.
5  T h e  
United States would notify the law to the Comm ittee on Anti-Dumping Practices and the Committee 
on Subsidies and Countervailing Measures in due cour se.  The United States would continue to work 
on solutions to implement the DS B's recommendations and rulings.  
35. The representative of China said that her country  thanked the United States for its status 
report and statement made at the present meeting.  As almost 12 months had lapsed since the adoption 
of the Appellate Body Report a nd Panel Report pertaining to th is dispute, China urged the 
United States to expedite its work and fully impl ement the DSB's rulings and recommendations by the 
end of the reasonable period of time.  With resp ect to the new countervailing law that had been 
adopted on 13 March 2012 by the United States, China was seriously assessing it to ensure that it 
complied with WTO rules and would inform the DSB of  further steps that it would take in due course. 
36. The DSB took note of the statements and agreed to revert to this matter at its next regular 
meeting. 
2. Implementation of the recommendations of the DSB 
(a) China – Measures related to the exportation of various raw materials 
 
(b) European Union – Anti-dumping measures on certain footwear from China 
 (c) Dominican Republic – Safeguard measures on imports of polypropylene bags and tubular 
fabric 
 
37. The Chairperson recalled that, in accordance w ith the DSU provisions, the DSB was required 
to keep under surveillance the implementation of r ecommendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of 
the DSU provided that the Member concerned shall in form the DSB, within 30 days after the date of 
adoption of the panel or Appellate Body report, of its intentions in respect of implementation of the 
recommendations and rulings of the DSB.  She propo sed that the three sub-items under Agenda item 2 
be considered separately. 
                                                      
5 http://www.gpo.gov/fdsys/pkg/BILLS-112hr 4105enr/pdf/BILLS- 112hr4105enr.pdf   WT/DSB/M/313 
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  (a) China – Measures related to the exportation of various raw materials 
38. The Chairperson recalled that at its meeting on 22 February 2012, the DSB had adopted the 
Appellate Body Reports with regard to the disput es on:  "China – Measures Related to the Exportation 
of Various Raw Materials" and the Panel Reports on  the same matter, as modified by the Appellate 
Body Reports.  The 30-day period under Article 21. 3 of the DSU pertaining to these disputes would 
expire on 23 March 2012.  She invited China to in form the DSB of its intentions in respect of 
implementation of the DSB's recommendations.  
39. The representative of China said that, at its  meeting on 22 February 2012, the DSB had 
adopted the Panel Reports and the Appe llate Body Reports in this disput e.  At that meeting, China had 
made a statement regarding the Reports.  As stated by China at the February DSB meeting, some part 
of the rulings and recommendations of the Reports constituted misinterpretations of certain provisions 
and may not be fair to China due to its status as a newly acceded Member.  However, considering the 
overall function of the DSB and its vital importance to  the multilateral trading system enshrined in the 
WTO, China, in accordance with Article 21.3 of th e DSU, informed the DS B of its intention to 
implement the DSB's recommendations and rulings pertaining to the DS394, DS395 and DS398 
disputes.  China would need a reasonable period of  time to evaluate options and take steps to 
implement the DSB's recommendations.  In that re gard, China would discuss this matter with the 
United States, the EU and Mexico, in accordance with Article 21.3(b) of the DSU. 
40. The representative of the European Union said that the EU thanked China for stating its 
intention to comply.  The EU recalled that the Ch inese export restrictions at issue had distorted and 
continued to significantly distort the market.  They had created competitive advantages for the 
Chinese manufacturing industry to the detriment of  foreign competitors.  The EU hoped that China 
would swiftly comply with the ruling by removing those export restrictions.  The EU stood ready to discuss with China with a view to agreeing on a reas onable period of time to comply with the DSB's 
recommendations and rulings. 
41. The representative of the United States said that  his country thanked China for its statement 
made at the present meeting, indicating that it in tended to implement the DSB's recommendations and 
rulings in this dispute.  China's raw materials e xport restraints had been and continued to be of 
significant concern to the United States.  The Unit ed States, therefore, looked forward to China 
moving promptly to bring its measures into complia nce with its obligations through the removal of 
those restraints.  The United States stood ready to  discuss with China, under Article 21.3(b) of the 
DSU, a reasonable period of time for its implementation.    
42. The representative of Mexico said that his c ountry welcomed China's statement that it 
intended to comply with the DSB's recommendations pertaining to these disputes.  Mexico hoped that 
China would comply adequately with these recomme ndations through the immediate elimination of 
tariff and export quotas.  Mexico was ready to disc uss with China the reasonable period of time for 
compliance. 
43. The DSB took note of the statements, and of th e information provided by China regarding its 
intentions in respect of implementation of the DSB's recommendations. 
(b) European Union – Anti-dumping measures on certain footwear from China 
44. The Chairperson recalled that at its meeting on 22 February 2012, the DSB had adopted the 
Panel Report with regard to the dispute on:  "European Union – Anti-Dumping Measures on Certain 
Footwear from China".  The 30-day period under Artic le 21.3 of the DSU pertaining to this dispute 
would expire on 23 March 2012.  She then invited the European Union to inform the DSB of its 
intentions in respect of implementation of the DSB's recommendations.   WT/DSB/M/313 
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  45. The representative of the European Union said that the EU intended to implement the DSB's 
recommendations and rulings pertaining to this dispute in a manner that respected its WTO 
obligations.  The EU would need a reasonable peri od of time in which to do so and stood ready to 
discuss this matter with China, in accord ance with Article 21.3(b) of the DSU. 
46. The representative of China said that her country thanked the EU for its statement made at the 
present meeting, informing the DSB of its intent ions to implement the DSB's recommendations and 
rulings pertaining to this dispute.  China took note that the EU woul d need a reasonable period of time 
for implementation, and was ready to discuss this matter with the EU at the earliest convenience.  
China called upon the EU to implement the DSB's rulings and recommendations as soon as possible. 
47. The DSB took note of the statements, and of the information provided by the European Union 
regarding its intentions in respect of implementation of the DSB's recommendations. 
(c) Dominican Republic – Safeguard measures on imports of polypropylene bags and tubular 
fabric 
48. The Chairperson recalled that at its meeting on 22 February 2012, the DSB had adopted the 
Panel Report with regard to the disputes on:  "D ominican Republic – Safeguard Measures on Imports 
of Polypropylene Bags and Tubular Fabric".  The 30-day period under Article 21.3 of the DSU 
pertaining to these disputes would expire on 23 Marc h 2012.  She invited the Dominican Republic to 
inform the DSB of its intentions in respect of  implementation of the DSB's recommendations.   
49. The representative of the Dominican Republic said that on 22 February 2012 the DSB had 
adopted the Panel Report pertaining to the disputes on:  "Dominican Republic  – Safeguard measures 
on imports of polypropylene bags and tubular fabric ".  In accordance with Article 21.3 of the DSU, 
the Dominican Republic informed the DSB that it intended to immediately comply with the DSB's 
recommendations and rulings in a manner that r espected its WTO obligations by 30 April 2012. 
50. The representative of Costa Rica said that his country took note of the statement made by the 
Dominican Republic regarding the implementation of the DSB's recommendation and rulings in these 
disputes.  As pointed out previously, Costa Rica be lieved that the Dominican Republic must remove 
the measure immediately.  Costa Rica believed th at the deadline proposed by the Dominican Republic 
would be acceptable, but would confirm this af ter its consultations with the capital.    
51. The representative of El Salvador said that first his country wished to thank the Panel and the 
Secretariat for having carried out its work in this di spute entirely in Spanish.  El Salvador thanked the 
Dominican Republic for its statement made at the present meeting that it intended to implement the 
DSB's recommendations and rulings pertaining to this di spute.  El Salvador took note of the statement 
made by the Dominican Republic and would conve y that statement to its authorities.    
52. The representative of Guatemala said that his country took note of the statement made by the 
Dominican Republic regarding its intention to comply  with its obligations by 30 April 2012.  Like 
others, Guatemala believed that the only way to im plement in this dispute would be to remove the 
safeguard measures.  Guatemala looked forward to full compliance with the DSB's rulings and 
recommendations. 
53. The DSB took note of the statements, and of the information provided by the Dominican 
Republic regarding its intentions in respect of implementation of the DSB's recommendations.  WT/DSB/M/313 
 Page 11 
 
 
  3. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by the European Union and Japan 
54. The Chairperson said that this item was on the Agen da of the present meeting at the request of 
the European Union and Japan.  She then invited the respective representatives to speak. 
55. The representative of Japan said that the CDSOA remained operational as the distribution 
process continued.6  Japan urged the United States to stop th e illegal distributions and repeal the 
CDSOA, not just in form but in substance, so as to  resolve this dispute.  According to Article 21.6 of 
the DSU, the United States was under obligation to provide the DSB with a status report pertaining to this dispute.  
56. The representative of the European Union said th at, as it had done many times before, the EU 
requested that the United States stop transferri ng 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.  Once again, the EU renewed its call on the United States to 
abide by its clear obligation under Article 21.6 of th e DSU and to submit status reports pertaining to 
this dispute. 
57. The representative of Brazil said that her country  thanked the EU and Japan for keeping this 
item on the DSB's Agenda.  As it had expressed in previous meetings, Brazil was of the view that the 
United States was under an obligation to submit status  reports in this dispute until such time as no 
more disbursements were made pursuant to the By rd Amendment.  Only th en would the issue be 
"resolved" within the meaning of the DSU and the United States would be released from its obligation 
to provide status reports pertaining to this dispute. 
58. The representative of Canada said that his country  wished to refer to its  previous statements 
made under this Agenda item and said that Cana da's position on this matter had not changed. 
59. The representative of India said that his country  thanked Japan and the EU for their comments 
and shared their concerns.  India urged the United States to report full compliance without any further 
delay.  India also agreed with previous speakers that till such time that full compliance was achieved, 
this item should continue to remain under the surveillance of the DSB. 
60. The representative of Thailand said that his count ry thanked Japan and the EU for continuing 
to bring this item before the DSB.  Thailand supp orted the statements made by previous speakers and 
continued to urge the United States to cease the di sbursement and fully implement the DSB's rulings 
and recommendations pertaining to this matter. 
61. The representative of the United States said that, as his country had explained at previous 
DSB meetings, the President had signed the Deficit Reduction Act into law on 8 February 2006.  That 
Act included a provision repealing the Continued Du mping and Subsidy Offset Act of 2000.  Thus, 
the United States had taken all actions necessary to implement the DSB's recommendations and rulings in these disputes.  The United States reca lled, furthermore, that Members had acknowledged 
during previous DSB meetings that the 2006 Defic it Reduction Act did not permit the distribution of 
duties collected on goods entered after 1 October 2007.  With respect to comments regarding further 
DSB surveillance in this matter, as it had explai ned at previous DSB meetings, the United States 
failed to see what purpose would be served by fu rther submission of status reports repeating the 
                                                      
6 See US Customs and Border Protection's website at: 
http://www.cbp.gov/xp/cgov/trade/pr iority_trade/add_cvd/cont_dump/  WT/DSB/M/313 
Page 12  
 
  progress the United States had made in the implementation of the DSB's recommendations and 
rulings.   
62. The DSB took note of the statements. 
4. United States – Measures affecting the cross border supply of gambling and betting 
services  
(a) Statement by Antigua and Barbuda regarding the implementation of the recommendations 
adopted by the DSB  
63. The Chairperson said that this item was on the Agen da of the present meeting at the request of 
Antigua and Barbuda.  Given that the delegation of Antigua and Barbuda was not present in the 
meeting room and since Antigua and Barbuda was a non-resident Member, the Chairperson proposed 
that the consideration of this item be deferred so th at if the delegation of An tigua and Barbuda arrived 
before the end of the meeting, the DSB w ould still be able to consider this item. 
64. The DSB took note of the statement. 
5. United States – Measures affecting trad e in large civil aircraft (second complaint)  
(a) Report of the Appellate Body (WT/DS353/AB /R) and Report of the Panel (WT/DS353/R) 
65. The Chairperson drew attention to the comm unication from the Appellate Body contained in 
document WT/DS353/12 transmitting the Appellate Body Report on:  "United States – Measures 
Affecting Trade in Large Civil Aircraft (Sec ond Complaint)", which had been circulated on 
12 March 2012 in document WT/DS353/AB/R, in acco rdance with Article 17.5 of the DSU.  She 
reminded delegations that the Appe llate Body Report and the Panel Re port pertaining to this dispute 
had been circulated as unrestricted documents.  Sh e said that, as Members were aware, Article 17.14 
of the DSU required that:  "An Appellate B ody report shall be adopted by the DSB and 
unconditionally accepted by the parties to the disput e unless the DSB decides by consensus not to 
adopt the Appellate Body report within 30 days follo wing its circulation to Members.  This adoption 
procedure is without prejudice to the right of Members to express their views on an Appellate Body report".  
66. The representative of the European Union said that the EU thanked the Appellate Body 
members, the panelists and the respective Secretariats for their hard work on this  case.  Over the past 
seven years, two closely linked disputes involving s upport for large civil aircraft (LCA) had taxed the 
WTO's dispute settlement system.  The Panel and the Appellate Body Reports that were being 
considered at the present meeting completed these di sputes.  The Reports showed clearly that the 
United States provided a series of subsidies that we re WTO-inconsistent and caused serious prejudice 
to the LCA interests of the EU, in violation of th e SCM Agreement.  In the parallel dispute (DS316), 
the EU had already taken the steps necessary to co mply with the DSB's recommendations and rulings.  
The EU expected that in this dispute (DS353), the United States would do the same, within the six- 
month period provided for in Article 7.9 of the SCM Agreement.  In this dispute, the EU had demonstrated, to the satisfaction of the Panel and the Appellate Body, that certain measures by US 
federal, state and local governments provided subsidi es to Boeing that were in consistent with the US 
obligations under the SCM Agreement.  Over the last decades, Boeing had benefitted from billions of 
dollars' worth of aeronautics research and deve lopment (R&D) subsidies from the US National 
Aeronautics and Space Administration (NASA) and the US Department of Defense (DOD).  Boeing 
had also benefitted from federal tax breaks un der the Foreign Sales Corporation (FSC) and 
Extraterritorial Income Exclusion (ETI) legisla tion.  Moreover, Boeing had benefitted from a large 
number of state and local subsidies in Washington St ate, Kansas and Illinois.  As the Panel had found,  WT/DSB/M/313 
 Page 13 
 
 
  and the Appellate Body had confirmed, the aeronaut ics R&D subsidies had enabled Boeing to launch 
technologically innovative LCA, in particular the 787.   Further, the Appellate Body had found that the 
federal FSC/ETI tax subsidies, the Washington St ate and City of Everett business and occupational 
(B&O) tax subsidies, and the industrial revenue bonds (IRBs) from the City of Wichita in Kansas 
together had provided Boeing with funds that ha d allowed it to price down its LCA in competition 
with Airbus.   
67. The Panel and Appellate Body had vindicated the EU's position by speaking clearly on these 
points.  Notably, the Appellate Body had c onfirmed that the NASA and DOD aeronautics R&D 
measures at issue constituted specific subsidies unde r the SCM Agreement.  The Appellate Body had 
confirmed, albeit through a different reasoning, that  the payments and access to facilities, equipment 
and employees provided to Boeing pursuant to NA SA procurement contracts and DOD assistance 
instruments were collaborative arrangements akin to a joint venture and constituted direct transfers of 
funds and provision of goods and ser vices and thus financial contribu tions under Article 1.1(a)(1)(i) 
and (iii) of the SCM Agreement.  The Appellate Body had reversed th e Panel's finding on benefit, but 
had completed the analysis and had found that the provision by NASA and DOD of funding and other 
support to Boeing had conferred it a benefit under Ar ticle 1.1(b) of the SCM Agreement.  The EU 
agreed with the crux of the rationale applied by the Appellate Body.  In contrast to a market 
transaction whereby a commissioning party paid a commissioned party to conduct R&D, here the 
equilibrium had not favoured NASA and DOD, but Boeing, which had retained the intellectual 
property rights to any inventions.  As Boeing had obtained more than it would have obtained in the 
market, it had received a benefit.  In applying this  standard and by rendering moot the Panel's finding 
that DOD procurement contracts were not financial c ontributions within the me aning of Article 1.1 of 
the SCM Agreement7, the Appellate Body had significantly  expanded the number of DOD R&D 
contracts at issue that may be considered "subs idies" causing adverse effects.  Moreover, the 
Appellate Body had found that the Panel's decision to  limit its adverse effects analysis to only those 
DOD R&D programmes funded predominantly through assistance instruments reflected the Panel's 
failure to make an objective assessment in violation of Article 11 of the DSU.8  Together, these two 
findings served to significantly expand the US implementation obligations with respect to the 
challenged DOD R&D programmes.   
68. The Appellate Body had also upheld the Pane l's finding that Washington B&O tax measures 
provided specific subsidies to Boeing, and would continue to do so for many years to come unless 
immediately repealed.  The Appellate Body had added another tax measure, the City of Wichita 
Industrial Revenue Bonds ("IRBs") to the list of su bsidy measures which had caused adverse effects.  
Concerning the NASA/DOD allocation of patent right s, the EU noted that the Appellate Body had 
reversed the Panel's finding of non-specificity but  was not in a position to complete the analysis, 
which was regrettable.  With regard to adverse effects, the Panel had concluded that NASA and DOD 
aeronautics R&D subsidies were fundamental to Bo eing's ability to launch and bring to market the 
787 as and when it had, and in particular with the advanced technological features that the aircraft 
offered.9  The Appellate Body had confirmed this conclusion.10  The Appellate Body had also 
endorsed the Panel's reasoning that "all of the programmes ... contributed to the process of technological development that eventually led to  the commercialization of the 787 technologies".
11  
The Appellate Body had further recalled the Pane l's finding that "[i]t was the aeronautics R&D 
subsidies that enabled Boeing to overcome the di sincentives in investing in aeronautics R&D, and 
                                                      
7 Appellate Body Report, note 1298. 
8 Appellate Body Report, paras. 1144-1145. 
9 Panel Report, paras. 7.1764, 7.1773-7.1775 
10 Appellate Body Report, paras. 1012, 1350(d). 
11 Appellate Body Report, para. 970. WT/DSB/M/313 
Page 14  
 
  which therefore accelerated Boeing's launch of th e 787 with all its technological advancements in 
2004".
12  
69. In the EU's view, it was no exaggeration to say  that these Reports had concluded that without 
the US federal R&D subsidies, Boeing and its current  family of aircraft would not have existed as 
they currently did.  The Panel had further concl uded that the FSC/ETI tax subsidies, along with the 
B&O tax subsidies provided by the State of Washi ngton and the City of Everett, had enabled Boeing 
to lower its prices and win sales and market  share against competition from Airbus.13  While the 
Appellate Body had reversed the Panel's approach, it had affirmed the general conclusion that these 
subsidies, as well as the Wichita IRBs, had enab led Boeing to win sales and market share from 
Airbus.14  Due to deficiencies in the extent of the f actual findings of the Panel, however, the Appellate 
Body could complete the analysis only  with respect to two sales transactions.15  In the EU's view, the 
Panel's approach had been reasonable in view of th e size and nature of these tax subsidies, and it had 
not been necessary for the Appellate Body to reverse the Panel's findings on this point.  In the end, 
however, the Panel and the Appellate Body together  had made clear the immensity of the adverse 
effects suffered by the EU large civil aircraft industry during the 2004-2006 reference period alone.  
The Reports found that the US subsidies had caused Airbus to lose significant sales of its A320, A330 
and original A350 LCA in the 200-300 seat LCA ma rket, including sales to Qantas, Japan Airlines, 
Singapore Airlines Leasing Enterprise, Ethiopian Ai rlines, Icelandair and Kenya Airways.  The 
Reports had also found that the entry of the 787 in to the 200-300 seat LCA market had resulted in a 
significant price suppression of Airbus LCA in this market, namely, the A330 and A350.  Further, the 
Reports found that Airbus was threatened with lost  market share in the 200-300 seat LCA market in 
Australia.  Before concluding, the EU wished to make two additional observations regarding findings 
by the Appellate Body of systemic importance.  Fi rst, the EU was pleased with the Appellate Body's 
findings on the initiation of Annex V procedures.  The Appellate Body had confirmed the EU's 
position that an Annex V procedure was automatic if  a panel was established under Article 7.4 of the 
SCM Agreement and if it was requested by a Memb er.  In reaching this conclusion, the Appellate 
Body had convincingly reversed the Panel findi ngs which had been based on a too formalistic 
interpretation of the role of the DSB.  In addition,  the Appellate Body had confirmed that panels must 
assess the collective effects of all subsidies that a complaining Member challenged, and may not artificially segregate them for the purpose of thei r analysis, for example based on the mechanisms by 
which such subsidies affected the market.   
70. Since it had not mentioned figures with regard  to the amount of funding, the EU invited 
Members to read the Panel and Appellate Body Re ports in this case which the EU believed spoke for 
themselves.  However, the EU had prepared points on this matter in case the United States wished to 
engage in such an exchange.  The EU also took note of reports that Boeing was receiving additional 
subsidies, including from South Carolina and Char leston, for a second final assembly line for the 787.  
However, the Panel and the Appellate Body's finding s should make it clear to the US federal, state 
and local governments and to Boeing that a "busin ess as usual" approach to subsidizing Boeing was 
no longer acceptable.  Now that the DSB was r eady to adopt these recommendations and rulings, it 
was time to start thinking about how to move forw ard.  The EU expected that, in light of the long 
history of WTO-inconsistent adverse effects that th e US federal, state and local subsidies had created, 
the United States would move quickly to comply with  its obligations to withdraw the subsidies or 
remove their adverse effects within the six-m onth period provided under Article 7.9 of the SCM 
Agreement.  The EU remained ready to work with the United States to achieve that end. 
                                                      
12 Appellate Body Report, para. 986. 
13 Panel Report, para. 7.1823. 
14 Appellate Body Report, para. 1260. 
15 Appellate Body Report, para. 1273.  WT/DSB/M/313 
 Page 15 
 
 
  71. The representative of the United States said that his country would like to begin by thanking 
the members of the Panel, the Appellate Body, and the Secretariat staff assisting them for the hard 
work and long hours they had dedicated to what wa s a very lengthy proceeding.  It was quite likely 
that many Members present had read the press ac counts in which the United States and the EU both 
had claimed to have come out the better between this dispute and the dispute concerning the EU's 
subsidies to Airbus.  The United States said that it would like to take the opportunity to tell Members 
why it was correct.  The dispute being discussed at the present meeting came about because seven 
years ago, the United States had sought to challenge  launch aid, the form of financing whereby EU 
member States paid for the development of Airbus ai rcraft, and Airbus did no t have to repay if the 
aircraft proved unsuccessful.  In the US view, and the view of the WTO Panel and Appellate Body, 
these subsidies had been responsible for every singl e Airbus aircraft ever produced, and had caused 
massive adverse effects to US trade.  The EU had responded with this dispute, arguing that US 
subsidies were bigger and more distortive of trad e.  The Reports, which were available for all to 
review, had vindicated the US position.  In the cha llenge to the EU's subsidies, the United States had 
identified subsidized financing from the EU am ounting to approximately US$20 billion, and the 
Appellate Body had eventually found that the EU  had granted subsidized financing amounting to 
approximately US$18 billion.  The United States had su ffered adverse effects in the form of lost sales 
involving 342 aircraft, valued at US$22 billion, and displacement and impedance of Boeing aircraft in 
several markets, including the EU and China, among the largest in the world.   
72. With respect to the Reports Members would be adopting at the present meeting, the EU had 
alleged subsidies of US$19 billion, and a wide range of adverse effects in three market segments.  The 
Panel and Appellate Body Reports had ultimat ely found a subsidy of US$2.2 billion from the 
FSC/ETI, which the United States had eliminated si x years ago, and subsidies of US$3.1 billion from 
NASA, Washington state, and the City of Wichita, and somewhere between US$100 million and US$1.2 billion arising from certain US Department of  Defense funding.  That was significantly less 
than the EU had alleged.  The Reports that the DS B would adopt at the present meeting also rejected 
most of the EU claims of adverse effects.  There ha d been lost sales involving only 118 aircraft, rather 
than the hundreds that had been alleged by the EU .  There had been displacement and impedance of 
EU aircraft in only one market, Australia.  The Repo rts had also rejected most of the EU claims of 
price suppression.  Perhaps the most telling comp arison was in the effect  on product launch.  The 
following was what the Panels and the Appellate Body  had found in the two disputes.  In the "EC - 
Large Civil Aircraft" dispute, the Appellate Body had found two scenarios to be "plausible", and had 
found that "[w]ithout the subsidies, Airbus woul d not have existed under these scenarios and there 
would be no Airbus aircraft on the market.  None of  the sales that the subsidized Airbus made would 
have occurred".
16  The United States contrasted that finding  with the Reports to be adopted at the 
present meeting, where the Appellate Body had quo ted and relied upon the Pa nel's findings that:  
"[O]nce the amount of the subsidies received by Boeing between 1989 and 2006 is reduced from 
US$19.1 billion to our own estimate of the total amount of the subsidies, the argument that Boeing's 
LCA division would not have been 'economically viable' in the absence of the subsidies unless it 
altered its prices or product devel opment behaviour becomes untenable".17  And further:  "We are not 
persuaded that the [EU] has demonstrated that Boei ng inherently lacked the financial means to price 
and develop its LCA in the manner in which it did".18  The Reports in these two disputes spoke for 
themselves, and, taken together, they spoke volumes.   
73. The United States said that ther e was one aspect of the Appellate Body Report that it found 
puzzling.  The discussion of Annex V in the Appellate  Body Report did not appear to be necessary.  
The Appellate Body had criticized the Panel for faili ng to make a finding on the legal issue of whether 
initiation of Annex V was by positive consensus b ecause that issue was ne cessary to resolve the 
                                                      
16 EC - LCA (AB), para. 1264. 
17 US - LCA (Panel), para. 7.1759, quoted in US - LCA (AB), para. 1169, note 2386. 
18 US - LCA (Panel), para. 7.1759, quoted in US - LCA (AB), para. 1169, note 2386. WT/DSB/M/313 
Page 16  
 
  dispute.  But by the end of the Appellate Body Report's discussion, it appeared that such a legal 
interpretation was not necessary to resolve this dispute.   It would appear to have been directed instead 
at future disputes, but that was not the role of the Appellate Body.  In addition, the decision-making 
rule by which the DSB would or would not initiate the Annex V process was a matter of DSB procedure, and, therefore, was for the DSB to reso lve.  The United States believed that the DSB, like 
any other political body of the WTO, should resolve these sorts of procedural matters through their 
own rules, and it was not the role of the dispute settlement system to write or re-write those rules.  The approach of the Panel on the issue of Annex V was, in the view of the United States, more 
sensitive to the proper roles of the DSB and the dis pute settlement system.  The United States also did 
not understand the basis for the Appellate Body's view  that the DSB Chair was some sort of "default" 
or "interim" facilitator for the Annex V process.  If Members had wished that to be the case, they 
could and would have so specified in the agreement itself.  
74. Finally, with respect to Article 17.5 of the DSU,  the United States noted that both parties had 
agreed from the outset of the appeal that it would no t be possible for the Appellate Body to complete 
its work within the 90-day deadline set out in the DSU.  However, neither the Appellate Body Report 
nor the 60-day notice recorded the ag reement of the parties.  As it had remarked in relation to several 
of the Appellate Body's reports since the beginni ng of 2011, the United States believed that the 
Appellate Body should provide to Members the same  degree of transparency on the circumstances 
under which a report was presented for adoption outside  the 90-day period in Article 17.5 of the DSU 
as the Appellate Body formerly had provided to Members prior to 2011. 
75. The representative of the European Union said that since the United States had included 
figures on subsidy amounts in its statement, the EU also  needed to set the record straight at the present 
meeting.  The amounts of subsidies provided to Bo eing had been very significant.  The Panel had 
found that they amounted to at least US$5.3 billion from 1989-2006, a figure that did not even include 
any estimate for the DOD R&D subsidies, or post-2006 subsidies.19  Moreover, the Appellate Body 
had endorsed the Panel's view that "the aeronauti cs R&D subsidies were inte nded to have 'multiplier 
effects'", and had found that "the relative magn itude of the amounts spent by NASA and Boeing did 
nothing to reduce or diminish [the] important  contribution [of the subsidies]" to Boeing's 
technological abilities.20  In economic terms, the resulting adverse effects of significant lost sales, 
suppressed prices and displaced market share ex ceeded the value of those subsidies by many 
multiples.  The EU objected, as it had done on previous occasions, to the US reference to 
US$18 billion in alleged subsidies to Airbus.  Th at figure represented no more than the principal 
amount of loans and capital contributions received ov er several decades.  Any benefit to Airbus from 
this repayable support was a small fraction of that  amount, granted a long time ago.  By contrast, 
Boeing stood to receive billions of dollars in future  B&O tax subsidies, and continued to benefit from 
NASA and DOD aeronautics R&D subsidies, as well as Wichita IRBs, that were non-repayable 
subsidies causing adverse effects that must now be withdrawn.  The EU was concerned about the US 
reference to a significant narrowing of the adverse effects findings.  The exact scope of these findings 
in an original proceeding did not have the relevanc e that the United States attributed to them.  The 
degree of adverse effects found had no impact on the obligation to withdraw the subsidies that caused 
those adverse effects.  Nor did the degree of advers e effects found in a reference period, in particular 
where those findings were hampered by a lack of factual findings by the Panel, affect the US 
obligation to ensure that, as of the end of the implementation period, it had removed any and all 
adverse effects, and, indeed, avoided cau sing any additional adverse effects.   
76. The representative of Canada said that his count ry thanked the Panel, the Appellate Body and 
the Secretariat for their work in th ese proceedings.  Canada had been a third participant in this dispute 
due to its role as one of the world's major producers of civil aircraft and its systemic interest in the 
                                                      
19 Panel Report, para. 7.1433. 
20 Appellate Body Report, paras. 1035, 1007.  WT/DSB/M/313 
 Page 17 
 
 
  interpretation of the SCM Agreement.  At the present meeting, Canada wished to briefly register its 
views on two systemic issues that were considered by  the Appellate Body.  First, the nature of the 
causal analysis required to support a panel findi ng that subsidies caused serious prejudice;  and 
second, the scope of the specificity analysis under Ar ticle 2.1(a) of the SCM Agreement.  Canada was 
pleased with the Appellate Body's finding that the Panel's reasoning did not justify its broad 
conclusion that the tied tax subsidies led Boeing to lower its prices in a manner causing Airbus to lose 
sales or to secure sales only at reduced prices.  According to the Appellate Body, the Panel should 
have explained how and when the subsidies had le d Boeing to lower its prices beyond the level that 
would otherwise have been economically justifiabl e.  This Appellate Body finding highlighted the 
importance that panels provide adequate and reas oned explanations to support findings of serious 
prejudice.  Canada also welcomed the Appellate  Body's finding that when a panel performed a de jure  
specificity analysis under Article 2.1(a) of the SCM Agreement, the scope of its inquiry was not 
limited to the subsidy identified in Article 1.1 but may include the whole legal framework through 
which that subsidy was provided.  In making this fi nding, the Appellate Body had ensured that panels 
may conduct the inquiries necessary to prevent Members from manipulating the outcome of the 
specificity analysis by inappropriately defining the scope of the subsidy. 
77. The representative of Japan said that his country  thanked the Panel, the Appellate Body and 
the Secretariat for the Reports and their hard work in  this dispute.  Japan was carefully reviewing the 
Appellate Body Report and would not comment on its substance at the present meeting.  However, 
Japan wished to briefly comment on the issue relating to Article 17.5 of the DSU which the 
United States had referred to.  Japan was of the vi ew that, for the purpose of full transparency, the 
parties consent should have been recorded, as had been the customary practice of the Appellate Body 
in the past. 
78. The representative of the United States said th at, in response to the comments made by the 
EU with regard to an alleged "multiplier effect", at one point in its Report, the "US - Large Civil 
Aircraft" Panel had stated that R&D subsidies te nded to multiply the benefit of a given amount of 
money.  The EU had blown that single statement out of proportion.  The Appellate Body had not 
endorsed the EU's view.  It had expressed confusi on about exactly what the Panel meant by this 
statement, and had notably left open the possibilit y that other types of funding could also have 
multiplier effects.  If a "multiplier effect" really differentiated NASA research from launch aid, one 
would expect to see NASA research having greater a dverse effects.  The Appellate Body had found 
the exact opposite.  It had found that NASA and DOD R&D subsidies had adverse effects in only one 
segment of the market, the one for 200-300 seat aircraft.  Lost sales in that segment amounted to only 
68 aircraft.  In contrast, it had found that launch aid had adverse effects in all segments of the market, 
resulting in lost sales of 342 aircraft for Boeing.  Fi nally, with regard to th e EU's comment that the 
US$18 billion figure represented the face value of the lo ans rather than the interest rate subsidy, as 
many homeowners would be able to attest, the in terest on long-term financing often amounted to 
more than the value of the principle. 
79. The DSB took note of the statements, and adopt ed the Appellate Body Report contained in 
WT/DS353/AB/R and the Panel Report contained in WT/DS353/R, as modified by the Appellate 
Body Report. 
6. Statement by the Chairperson regarding the appointment of Appellate Body members 
80. The Chairperson, speaking under "Other Busin ess", said that, as announced at the outset of 
the present meeting, she wished to make a statem ent concerning the 2012 selection process for the 
appointment of a new Appellate Body member and the process for the possible reappointment of one 
Appellate Body member.  In that regard, she reca lled that at its meeting on 22 February 2012, the 
DSB had agreed to the Chair's  proposal to launc h the selection process for the appointment of a new 
member of the Appellate Body for the position curren tly held by Mr. Shotaro Oshima, and that this WT/DSB/M/313 
Page 18  
 
  new member be appointed for a four-year term beginn ing 1 June 2012.  At its February 2012 meeting, 
the DSB had also agreed to set a deadline of 30 March 2012 for Member s' nominations of candidates.  
In that regard, she noted that, on 12 March 2012,  Kenya had submitted a nomination, which was 
circulated in document JOB/DSB/CV12/1 to a ll Members, and that on 22 March 2012, Japan had 
submitted two nominations, which woul d be circulated as Job documents later that day.  She reminded 
delegations that, in accordance with past practice, nominations of candidates together with their CVs 
should be addressed to the Chair of the DSB in care  of the Council and TNC Division.  As had been 
agreed by the DSB, the Selection Committee, which had been established by the DSB at its meeting 
on 22 February 2012, based on the procedures set fo rth in document WT/DSB/1, would carry out its 
work in April and the beginning of May in or der to make its recommendation no later than 
11 May 2012 so that the DSB could take a deci sion on this matter at its regular meeting on 
24 May 2012.  Details regarding the process would be communicated to Members shortly after the 
30 March deadline.    
81. She said that, as Members were aware, the Selection Committee was comprised of the 
Director General and the 2012 Chairs of the Ge neral Council, Goods Coun cil, Services Council, 
TRIPS Council and the DSB.  In this regard, she in formed delegations that the incoming Chair of the 
Council for Trade in Goods, H.E. Mr. Tom Mboya Oke yo of Kenya, would not participate in the work 
of the 2012 Selection Committee since he had take n a decision to recuse himself from the process in 
light of the fact that Kenya had submitted a nomin ation for consideration in this year's selection 
process.  
82. Finally, she recalled that at its 22 February 2012 meeting, the DSB had agreed to ask the 
Chair of the DSB to carry out consultations on the possible reappointment of Ms. Yuejiao Zhang for a 
second four-year term beginning on 1 June 2012.  In that regard, she informed delegations that she 
had already started the informal process of cons ultations, which would be continued by her successor 
whom she had already briefed on this subject.  She invited any delegation with  views on this matter to 
contact the Chair of the DSB by no later than 12 April 2012.  
83. The DSB took note of the statement. 
7. Election of Chairperson 
84. The Chairperson said that, as Members were aware,  at its meeting on 24 February 2012, the 
General Council had taken note of the consensus on a slate of names for Chairpersons to a number of 
WTO bodies including the DSB.  On the basis of the understanding reached by the General Council, 
she proposed that the DSB elect by acclamation H.E. Mr. Shahid Bashir of Pakistan as Chairman of 
the DSB. 
85. It was so agreed. 
86. The outgoing Chairperson thanked Members for a very productive and interesting year.  She 
said that it had been a great honour and pleasure to work with all Members in this very important 
function of the WTO.  She said that the work ha d been interesting and challenging and Members' 
knowledge, discipline and cooperation in the DSB ha d made this year to be one of the most 
interesting years in her career.  She thanked the Secr etariat for its excellent work and support.  She 
also thanked the outgoing Director of the CTNC Division, Mr Evan Rogerson, for his work and wished him all the best in his new functions.   
87. The incoming Chairman thanked the outgoing Chairperson and Members for reposing trust in 
him to chair the DSB in 2012.  With the support of Members and in keeping with the cardinal 
principles of transparency and incl usiveness, he said that he would make his best efforts to meet 
Members' expectations.  He thanked the outgoing Chairperson for her efficient work and looked  WT/DSB/M/313 
 Page 19 
 
 
  forward to her support and to working closely with her, in her new capacity as the Chairperson of the 
General Council.  He said that he would be available and ready to discuss any matters with 
delegations, if they so wished.   
88. The representative of the United States said th at his country congratulated the incoming 
Chairman for his election and welcomed him to the DSB.  The United States looked forward to 
working with him over the coming year.  The Un ited States thanked Ambassador Johansen for her 
many contributions to the work of the DSB in the past year. The United States also thanked the 
outgoing Director of the CTNC Divison, Mr. Evan Rogerson, for his work and leadership.   
89. The representative of the European Union said th at the EU fully endorsed the statement made 
by the United States.  The EU welcomed Ambassador Bashir, as the new DSB Chair and looked 
forward to a successful year under his leadership.  Th e EU also thanked Ambassador Johansen for the 
excellent running of the DSB over the past year a nd wished her well in her challenging role as the 
Chairperson of the General Council.  Finally, th e EU thanked the outgoing Director of the CTNC 
Division, Mr Evan Rogerson, for his work over the past years.     
90. The DSB took note of the statements. 
__________