RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/274 
23 November 2009 
 (09-5815) 
Dispute Settlement Body 
25 September 2009  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 25 September 2009  
 
Chairman:  Mr. John Gero (Canada) 
 
 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 United 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 Communities..............................................................5  
(e) European Communities – Regime for the importation, sale and distribution of 
bananas:  Second recourse to Article 21.5 of  the DSU by Ecuador:  Status report by 
the European Communities....................................................................................................... ..7 
(f) Brazil – Measures affecting imports of retread ed tyres:  Status report by Brazil .......................9  
(g) United States – Laws, regulations and methodology for calculating dumping margins 
("zeroing"):  Status repor t by the Unite d States........................................................................10  
(h) United States – Measures relating to zeroing and sunset reviews:  Status report by 
the United States .............................................................................................................. .........10  
2. 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 Communities and Japan ..............................................................11  
3. United States – Subsidies on upland cotton:  Recourse to arbitration by the 
United States under Article 22.6 of the DSU and Articles 4.11 and 7.10 of the 
SCM Agreement:  Decisions by the Arbitrators ..................................................................12  
(a) Statement by  Brazil............................................................................................................ .......12  
4. United States – Anti-dumping admini strative reviews and other measures 
related to imports of certain orange juice from Brazil........................................................16  
(a) Request for the establishment of a panel by  Brazil...................................................................16  WT/DSB/M/274 
Page 2  
 
 1. Surveillance of implementation of recommendations adopted by the DSB 
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.82) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.82) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.57) 
 
(d) European Communities – Measures affecting th e approval and marketing of biotech products:  
Status report by the European Communities (WT/DS291/37/Add.20 –WT/DS293/31/Add.20) 
 (e) European Communities – Regime for the importation, sale and distribution of bananas:  
Second recourse to Article 21.5 by Ecuador:  Status report by the European Communities 
(WT/DS27/96/Add.8) 
 (f) Brazil – Measures affecting imports of retreaded tyres:  Status report by Brazil 
(WT/DSS332/19/Add.6) 
 (g) United States – Laws, regulations a nd methodology for calculating dumping margins 
("zeroing"):  Status report by the United States (WT/DS294/34/Add.1) 
 (h) United States – Measures relating to zeroing and sunset reviews:  Status report by the 
United States (WT/DS322/36) 
 
1. The Chairman
 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 establishment of the reasonable 
period of time and shall remain on the DSB's Agenda  until the issue was resolved.  He proposed that 
the eight sub-items under Agenda item 1 be considered separately.  
(a) United States – Section 211 Omnibus Appropria tions Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.82) 
2. The Chairman
 drew attention to document WT/DS176/ 11/Add.82, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US Section 211 Omni bus Appropriations Act of 1998. 
3. The representative of the United States  said that his country had provided a status report in 
this dispute, on 14 September 2009, in accordance with  Article 21.6 of the DSU.  As noted in that 
status report, a number of legislative proposals th at would implement the DSB's recommendations and 
rulings in this dispute had been introduced in the current Congress, which had convened in 
January 2009.  The US administration was workin g with the US Congress to implement the DSB's 
recommendations and rulings. 
4. The representative of the European Communities  said that, at the present meeting, the 
United States was presenting its eighty-second status re port in this dispute.  The EC hoped that the 
new US authorities would now take steps to fina lly implement the DSB's ruling and resolve this 
matter.  WT/DSB/M/274 
 Page 3 
 
 
 5. The representative of Cuba  said that, in 2009, Members continued to urge the United States to 
comply with the Appellate Body's rulings, which had been made more than seven years ago.  
Unfortunately, the expectations and hopes of co mpliance that arose on 20 January 2009 were now 
gone.  The United States had not even met its obligati on to inform Members of the steps that the US 
administration proposed to take with the US Congress in relation to this case.  The first objective of 
the dispute settlement mechanism was to secure the withdrawal  of the measures found to be 
inconsistent with the covered agreements, in acco rdance with Article 3.7 of the DSU.  It was, 
therefore, impossible to speak to security and predic tability of a system that did not meet its primary 
objective, even if the respondent insisted that it ha d complied with the DSB's rulings in most cases.  
On 29 April 2009, in the statement to the General Council on his appointment, the Director-General 
had stated that:  "[t[he pursuit of openness, the guarantee of the most-favoured-nation principle and 
non-discriminatory treatment by and among Members [ ...] remain our founding political values".  The 
US failure to comply with the DSB's rulings in  this case undermined those core political values.  
Pursuant to the Understanding reached by the EC and the United States pertaining to the Section 211 
dispute, which had been signed more than four y ears ago, the EC preserved its right to be granted 
DSB authorization to suspend concessions or other ob ligations at any future date.  However, neither 
was the United States taking steps to repeal Section 211, nor was the EC exercizing its right under 
Article 22.2 of the DSU.  According to media reports, the new European Presidency's work programme relating to intellectual property stressed the need for effective protection of intellectual 
property rights, and in this conn ection a conference on enforcement would be held in Stockholm in 
December 2009.  The media had also indicated that the new US administration would work 
vigorously to ensure that intellectual property righ ts were observed, both domestically and abroad, as 
had been affirmed by Trade Secretary, Gary Locke.  Thus, it could be inferred that the parties in this 
dispute were "supposedly" committed to observing inte llectual property rights.  It was, therefore, 
inexplicable that no action had been taken to re peal Section 211, which undermined fundamental 
principles of the TRIPS Agreement.  Once again, Cuba urged the parties to resolve this dispute 
without delay.  This was not the time to continue  postponing actions that could send a positive signal 
of genuine commitment to the protection of intellectual property rights and the WTO. 
6. The representative of the Bolivarian Republic of Venezuela
 said that his country had taken 
note of the US status report.  He further stated that trade was fundamental to the development of 
countries, and unilateral measures such as that of  the United States against Cuba were without 
justification.  The US measure not only distorted Cuba's trade, but had also created problems that 
were related to human rights issues by seriously undermining Cuba's economy.  The fact that the 
United States had prolonged Cuba's blockade for a fu rther year was a bad sign, and suggested that the 
United States was unlikely to bring itself into lin e with the DSB's recommendations since Section 211 
was part of that blockade.  The US attitude posed systemic and credibility problems for the DSB.  Indeed, the two arguments periodically put forwar d by the United States to defend its position could 
not be considered valid, namely:  (i) that the Unit ed States was complying with almost all of the 
DSB's recommendations;  and (ii) that the credibility of the system was not being undermined, since the number of disputes brought before the DSB con tinued to increase.  The first argument was 
unacceptable, because it was not up to Members to decide what rulings they would or would not 
comply with – they must comply with all of them.  The second argument, concerning the increase in the number of disputes as proof of the DSB's credib ility, was also unacceptable,  since that increase 
was due to the intricacy of the international tradi ng system, which created disputes that Members tried 
to settle in a civilized manner .  To accept that argument would be as inappropriate as deriving 
satisfaction from the fact that Members' judicial systems were trying more and more cases every day, and believing that this was due to the credibility of the system rather than the conflictual nature of 
today's society.  Cuba's blockade was difficult en ough to justify in the past, but at present, with 
borders tending to fade as technolog y had advanced and trade relations had reached every corner of 
the globe, the maintenance of the blockade was not hing more than a show of imperial arrogance 
backed by military power.  At a time when undemocr atic and illegal interests were trying to disrupt 
the American continent in an attempt to reverse wh at had been achieved in the area of inclusiveness – WT/DSB/M/274 
Page 4  
 
 a concept with which the United States was not unfamiliar – Venezuela asked the United States to 
give a clear demonstration of its commitment to in ternational rules, and to comply with the DSB's 
long-standing decision by repealing Section 211.  
7. The representative of Ecuador
 said that his country thanked the United States for its status 
report but regretted that the report indicated little progress towards compliance.  Ecuador fully 
supported the statement made by C uba and recalled, once again, that Article 21 of the DSU referred 
explicitly to prompt compliance with the DSB's ru lings and recommendations, and in particular with 
regard to matters affecting the interests of devel oping countries.  The United States closely monitored 
other Members' compliance with WTO obligations and had expressed, in di fferent WTO Councils and 
Committees, its systemic concerns about the comm itments undertaken by other Members, and had 
prepared reports about other Members' compliance w ith their obligations in the area of intellectual 
property rights.  Therefore, if the United Stat es wished to promote coherence, it should set a good 
example.  Ecuador, once again, urged the US administration and the US Congress to accelerate compliance with the DSB's rulings and recommendati ons by repealing Section 211.  Ecuador wished 
to receive more detailed information from the EC  on the steps taken to resolve this long-standing 
dispute. 
8. The representative of Brazil
 said that his country thanked the United States for its status 
report.  Brazil continued to be seriously concer ned about the prolonged situation of non-compliance 
with the DSB's recommendations and rulings.  In th is connection, Brazil urged the United States to 
expedite its efforts and to comply  with its multilateral obligations. 
9. The representative of India  said that her country thanked the United States for its status report 
and its statement.  India, once again, wished to express its concern since nothing new had been 
reported by the United States, and there was no indica tion as to when the matter would be resolved.  
India continued to be concerned about the non-compli ance situation in this dispute, which undermined 
the credibility of the WTO dispute settlement system  and urged the United States to fully implement 
the DSB's recommendations in this dispute. 
10. The representative of Argentina  said that his country thanked the United States for its status 
report.  Argentina supported the statements made  by previous speakers, which had referred to 
negative effects for the system resulting from the lack of implementation of the DSB's recommendations.  Argentina supported Cuba's statem ent that both parties had the responsibility in 
this dispute, and that it was important to find a prompt solution as well as to fully implement the 
adopted recommendations.  Argentina called upon the par ties, and in particular on the United States, 
to take the necessary measures to ensure that this matter was resolved once and for all.  
11. 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.82) 
12. The Chairman  drew attention to document WT/DS184/ 15/Add.82, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US anti-dumping measures on certain hot-rolled steel products from Japan. 
13. The representative of the United States  said that his country had provided a status report in 
this dispute on 14 September 2009, in accordan ce with Article 21.6 of the DSU.  As of 
23 November 2002, the US authorities had addresse d the DSB's recommendations and rulings with 
respect to the calculation of anti-dumping margins in the hot-rolled steel anti-dumping duty 
investigation at issue in this dispute.  Details were provided in document WT/DS184/15/Add.3.  With  WT/DSB/M/274 
 Page 5 
 
 
 respect to the DSB's recommendations and rulings that had not already been addressed by the US 
authorities by 23 November 2002, the US administration would work with the US Congress with respect to appropriate statutory measures that would resolve this matter. 
14. The representative of Japan
 said that his country thanked the United States for its statement 
and its status report.  Japan noted the fact 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 a tangible progress for the remaining part of the DSB's recommendations and rulings.  A full and prompt implementation of the DSB's 
recommendations and rulings was "essential to the effective functioning of the WTO and the 
maintenance of a proper balance of the rights and obligations of  Members".
1  Japan called on the 
United States to fully implement the DSB's recommendations in this long-standing dispute without 
further delay. 
15. 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.57) 
16. The Chairman  drew attention to document WT/DS160/ 24/Add.57, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning Section 110(5) of the US Copyright Act. 
17. The representative of the United States  said that his country had provided a status report in 
this dispute on 14 September 2009, in accordance with Article 21.6 of the DSU.  In July 2009, the EC 
Trade Commissioner and the US Trade Representati ve had met and had announced that they had 
exchanged ideas on this dispute.  The US administrati on would continue to conf er with the EC, and to 
work closely with the US Congress, in order to reach  a mutually satisfactory resolution of this matter. 
18. The representative of the European Communities  said that the United States had again 
reported non-compliance and the EC was again disappoi nted, especially in light of the importance the 
United States attached to intellectual property prot ection.  The EC was aware that the United States 
was in favour of strong intellectual property protec tion throughout the world, and thus hoped that the 
United States would lead by example.  The EC remained ready to work with the US authorities 
towards the complete resolution of this case, a nd hoped that the financial loss suffered by the EC 
industry could be brought to an end soon. 
19. 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 Communities (WT/DS291/37/Add.20 – WT/DS293/31/Add.20) 
20. The Chairman  drew attention to document WT/D S291/37/Add.20 – WT/DS293/31/Add.20, 
which contained the status report by the Europ ean Communities on progress in the implementation of 
the DSB's recommendations in the case concerning th e EC's measures affecting the approval and 
marketing of biotech products. 
21. The representative of th e European Communities  said that the EC regulatory procedures on 
biotech products continued to work as foreseen in th e legislation.  Draft authorization decisions for 
                                                      
1 Article 3.3 of the DSU. WT/DSB/M/274 
Page 6  
 
 three GM maize events
2 had been submitted shortly after th eir vote in the regulatory Committee in 
July 2009 and would now be subject to a vote on 19 October 2009 in the Council.  If the vote did not 
result in a qualified majority against the draft decisions, the Commission would be in a position to authorize these three events sometime in November 2009.  This would raise the number of GMOs authorized since the date of establishment of the Panel to twenty-four.  
22. The representative of the United States
 said that his country thanked the EC for its status 
report and its statement.  As the United States ha d noted, at the 31 August 2009 DSB meeting, more 
than 60 pending biotech applications remained back ed up in the EC approval system.  This backlog 
resulted in ongoing bans on major US agricultural produc ts.  Regrettably, it appeared that not one of 
the pending applications had progressed since the A ugust 2009 DSB meeting.  At the present meeting, 
the United States wanted to respond to one of the assertions made by the EC at the 31 August 2009 
DSB meeting.  In particular, the EC had stated that the 2008 approval of a biotech soybean showed that the EC system was "speedy" and performed "sat isfactorily".  The United States noted that the EC 
selected this one application from among dozens.  However, even this hand-picked application 
illustrated some of the major problems in the EC's operation of its approval system.  First, even after 
the EC scientific committee had issued a favourable  risk assessment, the EC had continued for an 
additional five months to ban the import of any US agricultural commodity that contained even trace amounts of this soybean variety.  The EC's stated rationale was that the a pproval had to be submitted 
for review by a committee of EC member State repres entatives.  But the committee had failed to act in 
accordance with the scientific opinion  and had blocked the approval.  The result was months of delay 
while the EC held an additional vote of member St ate representatives.  Finally, the EC Commission 
had to take the step of approving the product over member State opposition.  This same byzantine 
process had been applied to every biotech application considered by the EC for more than ten years.  
Not once had the committee of member State repres entatives acted in accordance with the scientific 
opinion by consenting to a biotech approval.  The r esult was delays for each and every application.   
23. Second, the unnecessary five-month period betwee n the favourable risk assessment and the 
ultimate approval of the biotech soybean was not the norm.  Three-quarters of the pending 
applications were still awaiting risk assessments.  Bu t of the 17 applications that had received risk 
assessments, at least 14 were still pending approval for more than fi ve months after the assessment.  
In fact, some of those 14 pending applications  had received favourable risk assessments many years 
ago, but nonetheless remained unapproved.  Two of th ese applications – covering different varieties 
of biotech maize – had been found by the DSB to have been unduly delayed in breach of the EC's 
obligations under the SPS Agreement.  One of these maize varieties had been pending for over eight 
years, the other for more than 13 years.  In short,  it defied credibility for the EC to assert that its 
biotech approval system was "speedy" or that it ope rated "satisfactorily".  The United States thanked 
the DSB for its attention to this matter. 
24. The representative of Argentina
 said that his country thanked the EC for its status report.  
Argentina continued to monitor with great in terest both new developments as well as the 
implementation process by the EC member States.  Ar gentina would work together with the EC to 
resolve this matter as quickly as possible. 
25. The representative of th e European Communities  said that the GMO regulatory regime was 
not the subject of the original Panel's findings and neither was its "operation" nor was the status of specific applications not dealt with in the or iginal Panel covered by this Agenda item.  
26. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
                                                      
2 These GM maize events are the following:  MON89034, MON88017 and 59122xNK603.  WT/DSB/M/274 
 Page 7 
 
 
 (e) European Communities – Regime for the importation, sale and distribution of bananas:  
Second recourse to Article 21.5 of the DSU by Ecuador:  Status report by the European Communities 
(WT/DS27/96/Add.8) 
27. The Chairman  drew attention to document WT/DS27/ 96/Add.8, which contained the status 
report by the European Communities on progr ess in the implementation of the DSB's 
recommendations and rulings in the case concerning the EC's regime for the importation, sale and 
distribution of bananas. 
28. The representative of the European Communities  said that, as had been indicated at previous 
DSB meetings, the EC stood ready to implemen t the recommendation of the Panel Report by means 
of modifying its bound duty.  The EC still hoped that th e rebinding could be made in the context of a 
comprehensive agreement with Latin American supp liers, an agreement that had been sought since 
the EC initiated GATT Article XXVIII negotiations back in 2004.  The EC was fully committed to 
finding very soon a final solution to this long-standi ng "banana saga".  As had been indicated in its 
status report, the EC was fully engaged in nego tiations with all Latin American supplying countries 
with the view of concluding promptly such a co mprehensive agreement.  The EC hoped that the 
negotiations could soon lead to a satis factory agreement for all suppliers. 
29. The representative of Ecuador  said that his country thanked the EC for its status report which, 
once again, did not provide any information as to wh en the EC expected to comply with the DSB's 
recommendations and rulings in this dispute.  The EC had proposed to the MFN banana suppliers an 
agreement subject to many conditions that had gone  beyond the Bananas dispute and had made more 
difficult to reach an understanding on this matter.  The conditions proposed by the EC were not linked 
to the EC's compliance with the DSB's recommendations  and rulings in the dispute that had been won 
by Ecuador, nor were they linked to the compensati ons for the EC's enlargement claimed by Ecuador.  
His country did not understand the EC's lack of co mpliance, in particular since Ecuador had a legal 
right to retaliate against the EC, which resulted fro m previous Bananas disputes.  However, Ecuador 
remained open to negotiating a solution in the contex t of the WTO.  Ecuador would be in a position to 
accept a solution to this dispute only if the balance reached under the July 2008 Agreement were to be 
preserved.  
30. The representative of Colombia  said that his country thanked the EC for its status report.  For 
the eighth time since January 2009, the EC had rep eated its proposal to bring itself into conformity 
with the DSB's recommendations and rulings by  changing its scheduled tariff commitments on 
bananas.  Colombia had participated in the discussi ons held with the EC with a view to reaching an 
agreement on bananas which, among other things , would establish a new bound tariff level for 
bananas, a product of importance to Colombia's ec onomy.  Colombia hoped that, as a result of those 
negotiations, it would be possible to  reach a balanced agreement.  However, this would require the 
EC's full commitment.  Like the EC, Colombia hoped that it would soon be possible to put an end to this long-standing dispute.  Colombia was confiden t that the EC would live up to its obligation under 
the DSU and give special attention to this issue th at was affecting the interests of developing countries 
such as Colombia. 
31. The representative of the Dominican Republic
, speaking also on behalf of the ACP countries, 
said that ever since this item had been on the DSB's Agenda, the ACP countries had stressed that they 
respected final WTO decisions, notwithstanding their disagreement with certain conclusions reached by the Panel and the Appellate Body in this dis pute.  The ACP countries recalled, once again, that 
both the Panel and the Appellate Body had agreed that the EC's schedule at this time still committed 
the EC to a TRQ at a tariff of €75/mt and an out-of-quota tariff of €680/mt.  As previously stated, the ACP countries could resign themselves to live with a literal implementation of those conclusions.  
The EC, however, aimed to achieve compliance and implementation by changing the structure of its 
tariff commitments through negotiations with the MFN banana suppliers.  It appeared that the result WT/DSB/M/274 
Page 8  
 
 of this process would be an overall reduction of bound and applied duties on bananas.  The ACP 
countries understood that the DSB's conclusions in this dispute did not require such an overall 
reduction of average tariffs;  all they required was either a literal implementation or a rearrangement.  
Any decision to reduce the EC's average banana tari ffs could not be justified by the need to comply 
with the DSB's recommendations, but could rather be justified in the context of the DDA negotiations.  
This should be kept in mind when designing and implementing a solution which should be based on 
the right reasoning and anchored and balanced out in the right context.  The ACP countries remained 
committed to supporting their partners in finding and implementing an effective final solution to the 
"banana issue". 
32. The representative of Honduras
 said that, although this was the tenth DSB meeting since the 
Appellate Body had issued its most recent conde mnation of the EC's bananas regime, Honduras 
continued to hope that the EC would make a clear commitment to bind its tariff at a reasonable level 
in the near future and put an end to its discrimina tion.  Unfortunately, the EC continued to press for a 
"comprehensive" proposal under which it would ma ke no binding commitment and Latin American 
countries would have to forgo everything, including their rights to prompt compliance, tariff rights, 
expansion rights, non-discrimination rights, Doha ri ghts with regard to bananas, Doha rights with 
regard to tropical products, rights under the Bananas III dispute, and other rights under the DSU.  As 
it was well known, the DSU provisions prohibited Me mbers from reaching a mutu ally agreed solution 
that was inconsistent with the cove red agreements or that nullified or  impaired the benefits accruing 
under those agreements.  Thus, the DSU did not permit a "solution" that:  (i) would grant the EC the 
unilateral right to declare that the settlement re ached was "null and void", thereby contravening its 
obligation of prompt compliance;  (ii) granted other Members the right to stand in the way of the EC's 
compliance obligations;  (iii) supported measures that  had already been condemn ed in the Bananas III 
dispute;  (iv) or deprived Members of their procedural rights in case of non-compliance by the EC 
with the Bananas III dispute in the future.  Like others, Honduras was interested in finding a lasting 
solution to this dispute.  However, it would con tinue to insist on compliance with the basic DSU 
principles.  Honduras reserved all its rights, incl uding those relating to the EC's Schedule and its 
continued discrimination. 
33. The representative of Panama  said that under the DSU provisions, and in accordance with the 
DSB's rulings, the EC had been under obligation to bring itself into compliance on 1 January 1999.  
Almost a decade had passed but it was still not k nown when the EC planned to bring itself into 
compliance with its obligations.  Panama remained concerned that the EC wanted to take what it 
called a "comprehensive" approach to the settlement of  the Bananas dispute.  Panama was particularly 
concerned that the EC should insist on "settling" the issue in a way that was not provided for in the 
DSU.  In fact, practically every aspect of this "c omprehensive" approach proposed by the EC was at 
odds with the legal framework established under the DSU.  The DSU required the EC to eliminate its 
violations, both with respect to bindings and discrim ination.  None of the status reports that the EC 
submitted each month made any reference to discrimin ation, or to how and when the EC proposed to 
comply with its obligations.  The moral and legal responsibility under the DSU to comply fell solely 
and exclusively with the EC.  Under the DSU pr ovisions, issues that were separate from each other 
should not be linked.  And yet the EC was trying to link its compliance obligations in the Bananas 
dispute to Latin American concessions in r espect to other products, and with numerous 
conditionalities, without any guarantee that it would co mply with an agreement or with its obligations 
in the future.  There was only one reason why this  dispute had dragged on without a settlement for 
17 years – the EC had disregarded the relevant DSB's recommendations and rulings.  The solution 
would not be found by ignoring the rules, but by reaching a mutually acceptable agreement that would 
respect the covered agreements once and for all.  That was the basis on which Panama was seeking a 
solution and it, once again, urged the EC to do the same. 
34. The representative of the United States  said that his country thanked the EC for its status 
report and its statement.  As all Members were aw are, this was the longest-running dispute in the  WT/DSB/M/274 
 Page 9 
 
 
 WTO, and the reasonable period of time for comp liance in this dispute had expired more than 
ten years ago, on 1 January 1999.  While the United States had taken note of the EC's efforts to reach agreement with interested parties to resolve th e dispute, the United States also noted that the 
commercial impact of the EC's non-compliance over this very long period was undeniably large and 
damaging to a number of WTO Members.  The United States called on the EC to resolve this dispute, 
and until then, renewed its request to the EC to pr ovide a status report with respect to the dispute 
brought by the United States and those of the other complaining parties. 
35. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(f) Brazil – Measures affecting imports of retreaded tyres:  Status report by Brazil 
(WT/DSS332/19/Add.6) 
36. The Chairman  drew attention to document WT/DS332/ 19/Add.6, which contained the status 
report by Brazil on progress in the implementation of the DSB's recommendations and rulings in the case concerning Brazil's measures affecting imports of retreaded tyres. 
37. The representative of Brazil
 said that, at the present meeting, his country was submitting its 
final status report in this dispute.  For many years,  bilaterally with the EC, before the Panel and in the 
Appellate Body's proceedings, Brazil had affirmed the critical role of the ban on the importation of 
retreaded tyres for legitimate public policies it ha d pursued.  Imported retreaded tyres accelerated the 
generation of waste tyres because they had a shorter lifespan.  The more waste tyres were generated, 
the greater the health and environmental risks associ ated with them.  Those risks included toxic tyre 
fires in stockpiles, carcinogenic emissions from cement kilns and dangerous mosquito-born diseases, 
such as dengue and malaria.  In this dispute, the Panel and the Appellate Body had shown, once again, 
that the WTO disciplines and its dispute settlement m echanism were able to strike the proper balance 
between legitimate trade and non-trade concerns.  Br azil's policy objective of protecting its population 
and its environment from the risks posed by the a ccumulation, transportation and disposal of used 
tyres had been unmistakably supported.  The Appell ate Body had textually stated that "[a]s a key 
component of a comprehensive policy aiming to re duce the risks arising from the accumulation of 
waste tyres, the Import Ban produces [...] a material contribution to the reali zation of its objective".  
Brazil had nonetheless been required to undertake adju stments to the application of the import ban.  
The Supreme Court's decision, issued on 24 June 2009, and Portaria SECEX 24/2009, published on 26 August 2009, had implemented those adjustments.  Those efforts reflected Brazil's firm disposition 
of reconciling its legitimate policy objectives with  its commitments under the WTO Agreements.  
Brazil, therefore, reported, with satisfaction, its  full compliance with the DSB's recommendations and 
rulings in this dispute. 
38. The representative of the European Communities
 said that the EC had noted Brazil's seventh 
status report.  The EC noted that Brazil had, for th e first time, claimed to be in full compliance with 
the DSB's recommendations and rulings in this disput e.  Brazil claimed to have put an end to its 
discriminatory targeting of certain imported products that, in the EC's view, contributed marginally, if 
at all, to the environmental concerns Brazil had id entified.  Brazil claimed further that it had achieved 
full compliance.  The EC was in the process of revi ewing that claim.  Throughout the proceedings, the 
EC had stated that it shared Brazil's stated enviro nmental and public health objectives, but that there 
was disagreement about whether Brazil's discriminat ory import ban on retreaded tyres contributed to 
the attainment of those objectives.  The EC had cons istently argued that there were far more effective 
measures that would actually make a difference, fo r instance, enforcing the existing obligation of 
collection and disposal of waste tyres.  As the EC had demonstrated in the course of this dispute, in 
particular the Brazilian producers of new tyres had failed to fulfil this obligation, and the Brazilian 
government had failed to enforce it effectively, fo r example, by imposing excessively low fines, if 
any.  The Brazilian government had even decided to reduce the obligation of waste tyre collection and WT/DSB/M/274 
Page 10  
 
 disposal.  The EC did not consider this to be an effective manner to tackle the problem of waste tyres 
that were scattered throughout the Brazilian land scape, when those waste tyres were partly 
responsible for spreading of mosquito-borne diseases.   The EC considered it deplorable that Brazil 
had chosen to ban imported retreaded tyres which had contributed to Brazil's mosquito problem only 
marginally, if at all, thereby making those ty res a scapegoat, while refraining from tackling the 
problem where it could actually be solved.  
39. The DSB took note
 of the statements. 
(g) United States – Laws, regul ations and methodology for calculating dumping margins 
("zeroing"):  Status report by the United States (WT/DS294/34/Add.1) 
40. The Chairman  drew attention to document WT/DS294/ 34/Add.1, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US laws, regulations and me thodology for calculating dumping margins. 
41. The representative of the United States  said that his country had provided a status report in 
this dispute, on 14 September 2009, in accordance with  Article 21.6 of the DSU.  As noted in that 
status report, the United States had already taken a number of steps to implement the DSB's 
recommendations and rulings in this dispute.  With  regard to the remaining issues, including those 
identified in the DSB's recommendations and ruling s, the United States would continue to consult 
with interested parties. 
42. The representative of th e European Communities  said that the US report was the second 
status report pertaining to this dispute.  At the 31 August 2009 DSB meeting, the EC had explained 
what it expected the United States to do to comply with the findings contained in the reports adopted 
by the DSB in this case:  stop applying the zeroing methodology in administrative reviews 
immediately and stop collecting illegally calculated duties.  At present, it sufficed to say that the 
United States had not taken any actions to correct th e shortcomings in its implementation.  This was 
so, despite a clear obligation under Article 21.3 of the DSU to comply immediately.  The EC could 
understand perhaps that the United States may have  had doubts about the scope of its compliance 
obligations in the process of implementing the ru lings adopted by the DSB in May 2006.  The EC 
could also understand that any such doubts may have  been the reason for the US failure to comply by 
the expiry of the reasonable period of time on 9 Apri l 2007.  However, any such doubts that may have 
existed on the side of the United States, had been clarified by the compliance Panel and the Appellate 
Body, the Reports of which had been adopted almost three months ago.  The only step left for the United States to take was to bring itself into fu ll compliance.  The EC noted, once again, that the 
status report did not refer to involving Congress in ending zeroing in administrative reviews.  This 
confirmed the EC's view that the United States c ould bring itself into compliance by administrative 
action. 
43. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(h) United States – Measures relating to zeroing and sunset reviews:  Status report by the 
United States (WT/DS322/36) 
44. The Chairman  drew attention to document WT/DS322/ 36, which contained the status report 
by the United States on progress in the implementa tion of the DSB's recommendations in the case 
concerning US measures relating to  zeroing and sunset reviews. 
45. The representative of the United States  said that his country had provided a status report in 
this dispute, on 14 September 2009, in accordance w ith Article 21.6 of the DSU.  As noted in the  WT/DSB/M/274 
 Page 11 
 
 
 status report, the United States had taken steps to  implement the DSB's recommendations and rulings 
in this dispute.  With respect to the outstanding issues, the United States would continue to consult 
with interested parties in order to address those issues. 
46. The representative of Japan  said that his country thanked the United States for its statement 
and its status report.  Japan was encouraged by the submission of the status report, as it showed the 
renewed commitment on the part of the United Stat es to implement the DSB's recommendations and 
rulings in this dispute.  The United States had stated  in its report that it "will continue to consult with 
interested parties in order to address the findings co ntained in [the reports of the Appellate Body and 
the panel]".  Japan called on the United States to ta ke immediate and concrete action to fully comply 
with the DSB's recommendations and rulings in order to resolve this dispute. 
47. The representative of the European Communities  said that the zeroing dispute brought against 
the United States by Japan was another case, much  like the EC's own dispute addressed under the 
previous Agenda item, where US implementa tion was long overdue.  The EC hoped that the 
United States would finally accept that zeroing ran foul of fundamental obligations of the 
Anti-Dumping Agreement and put an end to a ll remaining illegal practices of zeroing. 
48. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
2. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by the European Communities and Japan 
49. The Chairman  said that this item was on the Agenda of the present meeting at the request of 
the European Communities and Japan.  He then invited the respective representatives to speak. 
50. The representative of Japan  said that the preparatory work for a new round of distributions 
under the CDSOA appeared to be well underway3, and thus the CDSOA still remained operational.4  
Japan, once again, called on the United States to stop  illegal distributions and repeal the CDSOA, not 
just in form but in substance, so as to resolve this  dispute once and for all.  According to Article 21.6 
of the DSU, the United States was under obligation to  provide the DSB with a status report in this 
dispute ''until the issue is resolved".  Japan  reserved all its rights under the DSU until the 
United States came into full compliance. 
51. The representative of the European Communities  said that, as in many previous DSB 
meetings, her delegation wanted to know when the Un ited States would effectively stop the transfer of 
anti-dumping and countervailing duties to its industr y and finally put an end to the condemned 
measure.  The EC also renewed its call on the Un ited States to abide by its clear obligation under 
Article 21.6 of the DSU, and to submit im plementation reports in this dispute. 
52. The representative of India  said that her country thanked the EC and Japan for bringing, once 
again, this issue before the DSB.  In India's vi ew, the CDSOA still allowed for disbursements by the 
US administration to its domestic industry, and WTO Members continued to raise concerns about this 
situation.  As had previously been reiterated, it was India's concern that non-compliance by Members 
                                                      
3 On 3 September 2009, the US Customs and Border Protection published the list of certifications 
received from claimants for the FY 20 09 distributions.  See US Customs and Border Protection's website as: 
http://www.cbp.gov/xp/cgov/trade/prior ity_trade/add_cvd/cont_dump/cdsoa_09/  
4 In the words of the US Customs, "the distribution process will continue for an undetermined period".  
See US Customs and Border Protection's website at: 
http://www.cbp.gov/xp/cgov/tr ade/priority_trade/add_cvd/cont_dump/cont_dump_faq.xm  WT/DSB/M/274 
Page 12  
 
 led to a growing lack of credibility for the WTO disp ute settlement system.  India agreed with the EC 
and Japan that the Byrd Amendment remained su bject to the surveillance of the DSB until the 
United States ceased to administer it. 
53. The representative of Canada
 said that her country agreed with the EC and Japan that the 
Byrd Amendment remained subject  to the surveillance of the DS B until the United States ceased to 
administer it. 
54. The representative of Brazil  said that his country thanked the EC and Japan for keeping this 
item on the DSB's Agenda.  It was clear that, until such time as the Un ited States ceased all 
disbursements made pursuant to the Byrd Amendment,  the situation of non-compliance would persist, 
and the issue would not be "resolved" within the m eaning of Article 21.6 of the DSU.  Thus, Brazil 
urged the United States to resume the submission of  status reports in this dispute until the case was 
effectively resolved. 
55. The representative of China  said that his country thanked the EC and Japan for, once again, 
raising this matter in the DSB.  China shared the concerns expressed by previous speakers and joined 
them in urging the United States to comp ly fully with the DSB's recommendations. 
56. The representative of Thailand  said that his country thanked the EC and Japan for bringing, 
once again, this matter before the DSB.  Thailand' s position remained the same as at the previous 
DSB meeting.  Thailand continued to urge the United States to stop disbursements under the CDSOA 
and to provide status reports until such actions were taken and this matter was fully resolved. 
57. The representative of the United States  said that his country had already explained at 
numerous previous DSB meetings, that the US Presi dent had signed the Deficit Reduction Act into 
law on 8 February 2006.  That Act included a provision repealing the Continued Dumping and 
Subsidy Offset Act of 2000.  Thus, the United St ates had taken all actions necessary to implement the 
DSB's recommendations and rulings in these disp utes.  The United States further recalled that 
Members, including the EC and Japan, had acknowle dged during previous DSB meetings that the 
2006 Deficit Reduction Act did not permit the distribu tion of duties collected on goods entered after 
1 October 2007.  The United States did not, therefore, understand the purpose for which the EC and 
Japan had inscribed this item on the Agenda of the present meeting.  With respect to comments 
regarding further status reports, the United States failed to see what purpose would be served by the 
further submission of status reports repeati ng the progress the United States had made in the 
implementation of the DSB's recommendations and rulings. 
58. The DSB took note  of the statements. 
3. United States – Subsidies on upland cotton:   Recourse to arbitration by the 
United States under Article 22.6 of the DSU and Articles 4.11 and 7.10 of the SCM Agreement:  Decisions by the Arbitrators 
(a) Statement by Brazil 
59. The Chairman
 said that this item was on the Agenda of the present meeting at the request of 
Brazil, and invited the representative of Brazil to speak. 
60. The representative of Brazil  said that, in July and October 2005, his country had requested 
authorization to take countermeasures in response to the US failure to comply with the March 2005 
DSB's rulings in the US - Cotton dispute.  The United States had objected to Brazil's requests on both 
occasions, and the matter had been referred to arbitra tion.  He noted that one arbitration proceeding 
dealt with countermeasures with respect to prohib ited subsidies and the other one covered actionable  WT/DSB/M/274 
 Page 13 
 
 
 subsidies.  Subsequently, the arbitration proceed ings had been suspended by common agreement of 
the parties to this dispute.  In the meantime , a new panel had been established, pursuant to 
Article 21.5 of the DSU, which had found that th e United States had not complied with the DSB's 
rulings.  Those conclusions had been upheld by th e Appellate Body and the Reports of the compliance 
Panel and the Appellate Body had been adopted by  the DSB in June 2008 – more than three years 
after the original rulings in this dispute.  In August 2008, Brazil had requested the resumption of the 
Arbitrators' work in both pro ceedings, which had been completed with the circulation of two 
Decisions on 31 August 2009.  Those Decisions ha d prompted Brazil to include this item on the 
Agenda of the present meeting.  Thus, Brazil thanked the Arbitrators and the Secretariat for their work 
in those proceedings, which involved hundreds of pa ges of lengthy submissions, annexes and exhibits, 
many of them heavily loaded with highly technical material.  It was, ther efore, understandable that, 
after the composition of the Arbitrators, no less than 11 months had elapsed before their Decisions had been circulated.  In Brazil's view, even thou gh this was an unusually long period of time for such 
arbitrations – the DSU envisaged 60 days from the expiry of the compliance period – the quality of the result attested that it had been the product of ha rd work, which also reflected the voluminous input 
provided by the parties.  In general, the Arbitrator 's Decisions were thorough,  clear and well reasoned.  
Overall, Brazil was satisfied that the Arbitrators had taken the extensive arguments by the parties on 
their merits, reaching determinations that were bala nced and grounded in the applicable disciplines of 
the DSU and the SCM Agreement.   
61. Brazil considered that some of the important de terminations made by the Arbitrators would be 
worth mentioning at the present meeting.  First, with  regard to prohibited subsidies, namely the export 
credit guarantees provided under the GSM 102 programme (not only for cotton but also for a number 
of other commodities), the Arbitrators had not accep ted the argument that the countermeasures should 
be gauged solely in light of the net cost incurred by  the US Government in pr oviding the guarantees.  
In essence, the United States had argued that item (j) of Annex I to the SCM Agreement could be read a contrario  – that, if an export credit guarantee programme  met the breakeven test, there would be no 
subsidy involved, regardless of the benefit actually conferred by the guarantees.  The Arbitrators had 
rejected this notion and had rightly found that, "as a matter of law, it is possible that an item (j)-consistent export credit guarantee programme mi ght still be found to confer a 'benefit"', and 
"Brazil would be entitled to continue to apply co untermeasures until the full benefit of the GSM 102 
programme has been withdrawn".  Drawing on a me thodology that had been provided by Brazil, the 
Arbitrators showed that the benefits involved we re very significant – in many cases well above 20 per 
cent of the transaction value.   
62. Another important determination concerned actionable subsidies – in this case, the payments 
on US cotton provided under the programmes "marketi ng loan" and "countercyclical payments".  The 
United States had argued that the marketing loan and counter-cyclical payments, challenged by Brazil 
before the original and the compliance panels, were  payments authorized by the 2002 Farm Bill which 
had expired.  Thus, the argument went, there woul d be no legal basis for countermeasures in respect 
of those payments.  The Arbitrators had agreed with Brazil that, even though the 2002 Farm Bill had 
expired, it had been replaced by new legislation – the 2008 Farm Bill – which left the marketing loan 
and countercyclical payments programmes basically unchanged in respect of cotton.  In response to 
the US argument that one would have to wait and see what the level of the payments would be under 
the new Farm Bill, the Arbitrators noted that they had not been provided "with any indication that the 
payments that may be made under the 2008 Farm Bill would be of a different nature than those that 
gave rise to the rulings at issue".  According to th e Arbitrators, "[nor] can any uncertainty about what 
might happen in the future dissuad e these Arbitrators from assessing the adverse effects determined to 
exist in relation to a measure which did exist and which, on the facts, continues to exist ".   
63. 
With regard to the quantification of the eff ects of the cotton subsidies, running the economic 
model proposed by Brazil with one minor modifica tion, the Arbitrators had calculated that, in 
marketing year (MY) 2005, the world price of upla nd cotton would have been higher by 9.38 per cent WT/DSB/M/274 
Page 14  
 
 but for US marketing loan and countercyclical payments .  In the words of the Arbitrators, "the adverse 
effects on the rest of the world from US marketi ng loans and countercyclical payments in MY 2005 
amounted to US$2.905 billion".  In other words,  taking MY 2005 as a representative year, the 
Arbitrators had stated that the average effects of  only those two US subsidies on cotton producers in 
the rest of the world amounted to nearly US$3 billion each year.  Overall, the Arbitrators had 
confirmed the very significant economic impact of  the US actionable and prohibited subsidies.  
64. With regard to the issue of the so-called "cro ss-retaliation", Brazil welcomed the Arbitrators' 
recognition of the difficulties faced by Brazil if it only had the option to apply countermeasures on imports of US goods.  The Arbitrators had determin ed that only a limited subset of the overall US 
imports into Brazil could be subject to counterm easures without resulting in unreasonable costs on the 
Brazilian economy and its consumers.  Thus, the Arb itrators had granted Brazil the right to seek the 
suspension of concessions and obligations under the GATS and the TRIPS Agreement pursuant to 
certain conditions.  In Brazil's view, those determin ations were important not only for illuminating – 
and sometimes precisely quantifying – some aspects of  this dispute.  They were also important for 
safeguarding the integrity and credibility of the WT O dispute settlement mech anism.  According to 
the Arbitrators' Award, Brazil was authorized to adopt countermeasures in an amount that was made 
of two parts:  (i) a fixed amount of US$147.3 million per year, which corresponded to actionable 
subsidies;  and (ii) with respect to prohibited subs idies, a variable amount, to be updated each year on 
the basis of data on US exports of several commod ities that benefited from the export credit guarantee 
the GSM 102 programme.  As regards the type of the countermeasures, the Arbitrators had determined that Brazil would have the right to ap ply "cross-retaliation" every time the total amount of 
calculated countermeasures exceeded a "threshold" in a given year.  This threshold had in turn been 
calculated on the basis of the variation in Brazil's imports from the United States.  The Arbitrators had 
thus provided a formula whereby the permissible amount and type of coun termeasures could be 
determined.  According to the formula, the amount of the countermeasures depended, inter alia , on 
the transaction value secured by GSM 102 and its dist ribution among classes of obligors.  In that 
regard, the Arbitrators had determined that "[the] United States shall provide the most recent FY data 
on GSM 102 transactions".  
65. The Arbitrators had also decided that the formula should be applied to three scheduled 
products (big meat, poultry meat and rice) only to th e extent that the export subsidies provided to 
volumes of exports of the products were in excess of US reduction commitments.  For the calculation 
of the corresponding deduction, the Arbitrators determ ined that "[the] United States shall provide the 
most recent data on US export prices of the scheduled  products".  Brazil inte nded to apply the formula 
on the basis of 2009 data.  Given that FY 2009 w ould end on 30 September 2009, Brazil would be 
sending a letter, on 25 September 2009, to the Unit ed States requesting GSM 102 data relating to 
FY 2009 in the format indicated by the Arbitrators.
5  Brazil would also re quest data on US export 
prices for the three commodities mentioned.  Brazi l expected that the United States would comply 
with the Arbitrators' Decision so that Brazil coul d use that information to calculate the amount of 
permissible countermeasures.  Brazil regretted that th e dispute had come to this stage.  After such a 
long period of time since the US measures had been found to be illegal, the United States persisted in 
maintaining the same subsidies and even dramatical ly increasing their use.  The Arbitrators had now 
attached numbers to those measures and their effects,  and the numbers were significant.  Brazil, once 
again, urged the United States to eliminate its illegal subsidies and their adverse effects, so that the 
imposition of countermeasures would not be necessary. 
66. The representative of Australia  said that her country welcomed the Reports of the Arbitrator 
in the dispute concerning US subsidies on upland cott on, in which Australia had been a third party.  
For the first time, there was now a WTO-arbitrated quantification of the damage caused to other WTO 
Members by US farm subsidies.  The Reports vivi dly illustrated the trade-distorting impact of US 
                                                      
5 Subsequently circulated in document WT/DS267/40.  WT/DSB/M/274 
 Page 15 
 
 
 farm programmes.  As correctly recognized by the Ar bitrator:  "[T]he specific design and structure of 
the subsidies at issue, as they have been maintain ed over a significant period of time, is such as to 
have created an artificial and persisting compe titive advantage for US producers over all other 
operators … [T]his has a significant trade-distorti ng impact, not just on the US domestic market, but 
on the world market in these products".  The decision  by the Arbitrator under Article 7.10 of the SCM 
Agreement estimated the effects on world markets, and the damage done to other WTO Members, by 
just two subsidies – marketing loan and counterc yclical payments – paid by the United States in 
respect of its cotton sector.  The Arbitrator estimated  that:  in marketing year 2005, the world price of 
cotton would have been over 9 per cent higher but for those subsidies;  in marketing year 2005, cotton 
farmers outside the United States had lost US$2. 384 billion because of the lower world price caused 
by those subsidies;  and in marketing year 2005, cotton farmers outside the United States had lost 
US$521.5 million because of reduced cotton production caused by those subsidies.  Furthermore, the Arbitrator estimated that the damage to cotto n farmers outside the United States from these two 
subsidy programmes totalled over US$12.2 billion from marketing year 1999 to marketing year 2005 
inclusive.  The decision by the Arbitrator under Article 4.11 of the SCM Agreement estimated the 
damage caused to farmers outside the United St ates by the prohibited export credit guarantees 
provided by the United States under the GSM 102 progr amme.  The Arbitrator estimated that:  for 
FY 2006, the damage to farmers outside the Un ited States from the reduction in prices caused by 
those guarantees was US$120.64 million;  and fo r FY 2006, US products supported by those 
guarantees had displaced US$628.6 million worth of sales  that would otherwise have been made by 
farmers outside the United States.  If the leve l of damage suffered in FY 2006 was used to 
approximate the level of damage for each year from FY 1999 to FY 2005 inclusive, then the total 
estimated damage to farmers outside the US from those guarantees for that period was over 
US$5.2 billion.  This meant that the total estimat ed damage to farmers outside the United States from 
the subsidy programmes considered by the Arbitrat or was in excess of US$17 billion for FY 1999 to 
FY 2005 inclusive.  And all of those programmes continued, having been reauthorized by the 2008 
Farm Bill.   
67. Furthermore, WTO Members should recall that those Reports covered only a portion of the 
trade-distorting subsidies provided by the United Stat es to its agricultural sector.  The decision by the 
Arbitrator under Article 7.10 of the SCM Agre ement covered only the marketing loan and 
countercyclical payments made in respect of upla nd cotton.  However, those same programmes paid 
subsidies in respect of all the major US commoditi es – including corn, wheat, soybeans and rice;  and 
prior to the welcomed changes to  its export credit guarantee system, the US had provided widespread 
prohibited export credit guarantees under programme s in addition to GSM 102.  The Reports had 
confirmed why the Cairns Group consistently called fo r a fair and market-oriented agricultural trading 
system.  As stated in the Cairns Group's 20 July 2008 communiqué, major subsidisers "have provided … trade-distorting support – effectively denying the opportunity for others, including low income 
producers in developing countries, to enter the market ".  Australia recalled that Article 22 of the DSU 
provided that the suspension of concessions or othe r obligations were "temporary measures available 
in the event that the recommendations and rulings are not implemented within a reasonable period of 
time".  Article 22 of the DSU stated that "neither  compensation nor the suspension of concessions or 
other obligations is preferred to full implementa tion of a recommendation to bring a measure into 
conformity with the covered agreements".  Aust ralia called on the United States to implement the 
rulings and recommendations of the DSB in this  long-running dispute without further delay. 
68. The representative of the United States
 said that his country remained disappointed with the 
outcome of this dispute.  Members of the DSB w ould recall that the United States had explained its 
concerns at previous meetings, and did not wish to  cover that ground again at the present meeting.  
Instead, the United States wished to comment on a few aspects of the Awards of the Arbitrators that 
had been circulated on 31 August 2009.  In a number of respects, the United States commended the 
work of the Arbitrators.  It w as clear that they had approached  their task in a methodical and 
thoughtful manner, and they had reached a number of important conclusions, rejecting substantial WT/DSB/M/274 
Page 16  
 
 aspects of Brazil's DSB requests.  For example, cont rary to Brazil's DSB request, the Arbitrators had 
properly limited possible countermeasures by Brazil to the trade effects of the subsidies at issue on Brazil.  If a Member could impose countermeasures fo r trade effects of a subsidy on the entire world, 
as Brazil had requested and as previous Arbitrator s had concluded, those countermeasures would be 
unrelated to the nullification or impairment actua lly suffered by that Member.  In addition, the 
Arbitrators had properly rejected Brazil's request for a one-time award of countermeasures for the 
Step 2 programme, which had been repealed.  The Arbitrators were right to refuse countermeasures 
for a measure that had already been withdrawn.  Once a WTO Member had brought its measure into 
conformity with the covered agreements, the aim of  the dispute settlement system would have been 
achieved.  A contrary finding that countermeasu res could be authorized for a withdrawn measure 
would have meant a fundamental shift in the WTO dispute settlement system to retroactive 
sanctioning, and the United States commended the Arbitr ator's analysis of this issue.  Furthermore, 
the Arbitrators were correct to reject Brazil's ar guments that it was entitled to an unlimited right to 
cross-sectoral countermeasures, for example, s ubject only to the "appropriate countermeasures" 
standard of Article 4.10 of the SCM Agreement.  This argument was difficult to follow given that 
Brazil's own request for DSB authorization had cite d Article 22.3 of the DSU and had explained how 
Brazil had followed those principles and procedures.   The Arbitrator was correct to apply the 
disciplines of Article 22.3 of the DSU to Brazil's request and to find that Brazil had not followed 
those principles and procedures.   
69. The United States also had certain concerns about the awards.  With respect to the 
countermeasures for GSM 102, the Arbitrator had acknow ledged that its approach of using, and then 
combining, an interest rate subsidy and an "add itionality" calculation, which it adapted from Brazil's 
methodology, may overestimate any effects on Brazil in some aspects.  Yet the Arbitrator still used it 
as the basis for the formula for countermeasures.  The United States had some difficulty with the 
Arbitrator's conclusion that the "appropriate count ermeasures" standard in Article 4.10 of the SCM 
Agreement had permitted it to proceed in that way.  Similarly, in the arbitration concerning marketing 
loan and countercyclical payments related to cotton,  the United States believed that the Arbitrator had 
incorrectly given Brazil the benefit of the doubt on several issues, such as the choice of price 
elasticities in the model for the effects of mark eting loan and countercyclical payments.  The 
United States also noted from certain press reports that Brazil had said that it would like a dialogue.  The United States thought that such a dialogue would imply more than making DSB statements.  The United States, therefore, looked forward to continui ng discussions with Brazil on the issues related to 
this dispute. 
70. The DSB took note
 of the statements. 
4. United States – Anti-dumping administrative reviews and other measures related to 
imports of certain orange juice from Brazil 
(a) Request for the establishment of a panel by Brazil (WT/DS382/4) 
71. The Chairman  recalled that the DSB had considered this matter at its meeting on 
31 August 2009 and had agreed to revert to it.  He drew attention to the communication from Brazil 
contained in document WT/DS382/4, and inv ited the representative of Brazil to speak. 
72. The representative of Brazil  recalled that, at the 31 August 2009 DSB meeting, his country 
had requested the DSB to establish a panel to examine anti-dumping measures adopted by the 
United States on imports of Brazilian orange juice.  At that meeting, the United States had not joined 
in the consensus and the panel had not been est ablished.  At the present meeting, Brazil was 
submitting, for the second time, its request for the estab lishment of a panel.  As Brazil had stated in 
the previous DSB meeting, the United States used the "zeroing" methodology when calculating 
margins of dumping for exporters of orange juice fro m Brazil.  It was not necessary to repeat the long  WT/DSB/M/274 
 Page 17 
 
 
 list of cases in which the WTO dispute settlemen t mechanism had found the use of zeroing to be 
inconsistent with the GATT and the Anti-Dumping Ag reement.  The fact that the United States 
continued to use the illegal methodology in admini strative reviews, placing an unfair burden on 
Brazilian exports, had compelled Br azil to submit its second request for the establishment of a panel. 
73. The representative of the United States  said that his country was disappointed that Brazil had 
chosen to pursue its request for a panel in this  matter.  The United States understood that a panel 
would be established at the present meeting.  However, the United States did not agree with the view expressed by Brazil that pursuing this panel proceedi ng was necessary.  If Brazil chose to pursue this 
proceeding, however, the United States would defend the challenged measures before the panel.  The 
United States reiterated the concerns it had expressed  at the 31 August 2009 DSB meeting concerning 
the way in which Brazil had framed its panel request.  As noted in August, the panel request included 
measures that were not in existence at the time of consultations and consequently could not have been, 
and had not been, consulted upon.  
74. The DSB took note
 of the statements and agreed  to establish a panel in accordance with the 
provisions of Article 6 of the DSU with  standard terms of reference.   
75. The representatives of Argentina , the European Communities , Japan , Korea , Chinese Taipei  
and Thailand  reserved their third-party rights to pa rticipate in the Panel's proceedings. 
__________