WORLD TRADE  
ORGANIZATION  TN/DS/W/82/Add.2 
17 March 2006 
 (06-1208) 
Dispute Settlement Body 
Special Session Original:   English 
 
 
 
NEGOTIATIONS ON IMPROVEMENTS AND CLARIFICATIONS OF 
THE DISPUTE SETTLEMENT UNDERSTANDING 
 
Further Contribution of the United States on Improving Flexibility  
and Member Control in WTO Dispute Settlement  
 
Communication from the United States  
 
Addendum  
 
  The following communication, dated 16 March 2006, is being circulated at the request of the delegation of the United States.  
_______________ 
 
 III(C). Draft Parameters Concerning the Measu re under Review in WTO Dispute Settlement
 
 In light of the questions posed in TN/DS/W/74 and the useful and enlightening discussion with other 
Members to date, it is suggested that the followi ng parameters help inform the question of the 
measure under review in WTO dispute settlement:   
Order of analysis
  
 
Article 3.4 of the DSU provides that: "Recommendations  and rulings made by the DSB shall be aimed 
at achieving a satisfactory settlement of the matter in accordance with the rights and obligations under 
this Understanding and under the covered agreements."  Accordingly, the purpose of the dispute 
settlement system is not to produce reports or to "make law," but rath er to help Members resolve trade 
disputes among them.    
WTO adjudicative bodies should avoid making findings that  are not aimed at resolving the dispute.  It 
is useful to bear in mind that such bodies are not permitted to render authorit ative interpretations of 
the covered agreements.
1  It is also useful to bear in mind that  the "matter" that is referred to dispute 
settlement in the standard terms of reference under Article 7 of the DSU consists of the particular 
"measure" challenged together with the claims concerning that measure.2 
 
                                                      
 1 Article IX:2 of the Marrakesh Agreement Establishing  the World Trade Organization   makes clear 
that the Ministerial Conference and the General Council "h ave the exclusive authority to adopt interpretations" 
of the covered agreements. 
2 See, e.g., Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland 
Cement from Mexico , WT/DS60/AB/R, adopted 25 November 1998, para. 72. TN/DS/W/82/Add.2 
Page 2  
 
  The order of analysis followed by WTO adjudicative bodies should respect the function assigned to 
those bodies.  In particular, the order of analysis shou ld respect the fact that findings need to relate to 
"measures affecting the operation of any covered agreement"
3 taken by a Member.   
 For example, consider the situation where one party claims another Member’s measure does x, and 
that x is inconsistent with a provision of a covered agreement, but the responding Member claims that 
its measure does not do x.  In such a situation, it would not be appropriate for a WTO adjudicative 
body first to make findings on whether x is inconsistent with a pr ovision of a covered agreement 
before making findings on whether the measure at issue actually does x.  Otherwise, in the event that 
the body finds that the measure does not
 do x, the body’s finding that x is inconsistent with a covered 
agreement is not aimed at a "measure[] affecting the operation of any covere d agreement taken within 
the territory" of a Member.4  Instead the finding is an advisory  opinion divorced from the measure at 
issue (and therefore divorced from the actual "matter" referred to the body).  A further implication of the "measure affecting"  language is that WTO dispute settlement is not 
concerned in a dispute with a measure of a Member that expired prior to the date of the request for 
consultations by another Member in that dispute or that otherwise does not exist as of the date of the 
request for consultations.  The question of whether a measure does x is a factual question because at that point it is not a 
question of the interpretation of a provision of a c overed agreement or of whether a provision applies 
to the measure. 
 
Definition of a measure
 
 
It is useful to recall that the covered agreements do not define the term "measure."  There is no such 
definition because the content of the term may vary from case to case.  For example, what constitutes 
a "measure" for purposes of the General Agreement on Tariffs and Trade 1994  may be different from 
what constitutes a measure for purposes of the Agreement on Trade-Related Aspects of Intellectual 
Property Rights  or the DSU.   
 The Appellate Body has suggested that "instruments  of a Member containing rules or norms could 
constitute a ‘measure’, irrespective of how or whethe r those rules or norms are applied in a particular 
instance."
5  The Appellate Body, in using the term "could constitute" clearly indicated that this is not 
intended to be a definition of "measure," but rather on e starting point for analysis. In particular, not all 
such "instruments" are measures and not all measures are "instruments."  For example, a measure may not be an "instrument" but may be an "action" by  a Member or in some cases could be viewed as 
"inaction" by a Member.
6  See for example the discussion by the Appellate Body in Guatemala – 
Anti-dumping Investigation Regarding Portland Cement from Mexico :  "In the practice established 
under the GATT 1947, a ‘measure’ may be any act of a Member, whether or not legally binding, and 
it can include even non-binding administrative guidance by a government.  A measure can also be an omission or a failure to act on the part of a Member.
7 
 
                                                      
3 Article 4.2 of the DSU. 
4 Article 4.2 of the DSU. 
5 Appellate Body Report, United States – Sunset Review of Anti-dumping Duties on Corrosion-resistant 
Carbon Steel Flat Products from Japan  , WT/DS244/AB/R, adopted 9 January 2004, para. 82. 
6 For example, a failure to submit  a notification to the WTO could be  viewed as "inaction."  (See, e.g., 
Article 12.6 of the Agreement on Safeguards .) 
7 WT/DS60/AB/R at footnote 47, internal citations omitted.  TN/DS/W/82/Add.2 
 Page 3 
 
 
  Conversely, not all "instruments"8 that contain rules or norms are "measures."9  For example, a 
"measure" would not include:  (1) legislative history that does not itself have any legal standing or effect other than as legislative 
history; 
 
(2) statements without effect, for example, a statem ent by an individual legislator that is solely 
the expression of that individual’s view; and 
 (3) statements in court decisions that are obiter dicta , or dissenting opinions in court decisions. 
 
Mandatory vs. discretionary measures
 
 
A WTO adjudicative body is not permitted to presume  that a Member will choose to breach a covered 
agreement.  Accordingly, where a measure provides a Member with the discretion to comply with a 
covered agreement, the measure may not be found to be inconsistent as such with the covered 
agreement, even if the discretion is broad enough al so to permit the Member to act in a manner that 
would breach the covered agreement.   
__________ 
 
 
                                                     
 
8 Definitions of "instrument" include:  "A formal or legal document in writing, such as a contract, deed, 
will, bond, or lease" and "Anything reduced to writing, a document of a formal or solemn character, a writing 
given as a means of affording evidence."  Black’s Law Dictionary, Sixth Edition. 
9 Instruments that are not "measures" could nonethel ess in some circumstances assist in understanding 
the meaning of a particular measure.