RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/277 
1 March 2010 
 (10-1134) 
Dispute Settlement Body 
21 December 2009  
 
 
   
MINUTES OF MEETING 
 
Held in the Centre William Rappard
 
on 21 December 2009  
 
Acting Chairman:  Mr. Mario Matus (Chile) 
  
 Prior to the adoption of the Agenda
, the Chairman of the General Council, 
Ambassador Mario Matus, welcomed  delegations and said that he had been asked to chair the present 
meeting in the absence of Ambassador John Gero, the Chairman of the DSB.  He noted that this was 
in accordance with the Rules of Procedure for me etings of the DSB.  He then drew Members' 
attention to footnote 1 in the proposed Agenda concerning the recent entry into force of the Lisbon 
Treaty.  He said that he had been advised that th e Secretariat intended to use this footnote in the 
future, as appropriate, in Secretariat-issued doc uments, particularly t hose relating to dispute 
settlement matters involving the former EC which, as the footnote indicated, had now been replaced 
and succeeded by the European Union.  He added that, over time, as pending disputes involving the 
former EC were resolved, the use of this footnote would no longer be needed. 
 
 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 .............................................................................................................. ...........3  
(b) United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by  the United States...................................................................................5  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by 
the United States .............................................................................................................. ...........6  
(d) European Communities1 – Measures affecting the approval and marketing of biotech 
products:  Status report by the European Union .........................................................................6  
                                                      
1 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty 
establishing the European Community (done at Lisbon, 13 December 2007) entered into force.  On 
29 November 2009, the WTO received a Verbal Note (WT /L/779) from the Council of  the European Union and 
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union replaces and succeeds the European Community. WT/DSB/M/277 
Page 2  
 
 
 (e)
 European Communities1 – 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 Union ............................................................................................................. .......7  
(f) United States – Laws, regulations and methodology for calculating dumping margins 
("zeroing"):  Status repor t by the Unite d States..........................................................................9  
(g) United States – Measures relating to zeroing and sunset reviews:  Status report by 
the United States .............................................................................................................. .........10  
(h) United States – Continued existence and a pplication of zeroing methodology:  Status 
report by the United States.................................................................................................... ....11  
2. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ..........................................12  
(a) Statements by the European Union and Japan ..........................................................................12  
3. China – Measures related to the exportation of various raw materials.............................14  
(a) Request for the establishment of a panel by the United States .................................................14  
(b) Request for the establishment of a panel by the European Communities1................................14  
(c) Request for the establishment of a panel by Mexico ................................................................14  
4. United States – Measures affecting imports of certain passenger vehicle and light 
truck tyres fr om China......................................................................................................... ..16 
(a) Request for the establishment of a panel by China...................................................................16  
5. Philippines – Taxes on distilled spirits ..................................................................................17  
(a) Request for the establishment of a panel by the European Union ............................................17  
6. Proposed nominations for the indicative list of governmental and 
non-governmental panelists ...................................................................................................18  
7. United States – Subsidies on upland cotton..........................................................................18  
(a) Statement by  Brazil............................................................................................................ .......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.85) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.85) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.60) 
 
(d) European Communities – Measures affecting th e approval and marketing of biotech products:  
Status report by the European Union (WT/DS291/37/Add.23 – WT/DS293/31/Add.23) 
 (e) European Communities – Regime for the importation, sale and distribution of bananas:  
Second recourse to Article 21.5 of the DSU by Ec uador:  Status report by the European Union 
(WT/DS27/96/Add.11)  WT/DSB/M/277 
 Page 3 
 
 
 
  
(f) United states – Laws, regulations and methodology for calculating dumping margins 
("zeroing"):  Status report by the United States (WT/DS294/34/Add.4) 
 (g) United States – Measures relating to zeroing and sunset reviews:  Status report by the 
United States (WT/DS322/36/Add.3) 
 (h) United States – Continued existence and app lication of zeroing methodology:  Status report 
by the United States (WT/DS350/18) 
 
 
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 establis hment 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.85) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.85, 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 its status report in 
this dispute on 10 December 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 wo rking with Congress to implement the DSB's 
recommendations and rulings. 
4. The representative of the European Union  said that, at the present meeting, the United States 
was presenting its eighty-sixth status report in this dispute.  The EU hoped that the new US authorities 
would now take steps to finally implement the DSB's ruling and resolve this matter. 
5. The representative of Cuba  said that, a year ago, the tone of the statements made under this 
Agenda item was hopeful.  With the election of th e new US President on 4 November 2008, many had 
expected that actions would be taken to repeal Se ction 211.  Unfortunately, as Cuba had stated at the 
December 2008 DSB meeting, one could not be too op timistic.  For decades, Cuba had been aware of 
the US record of non-compliance in the area of intern ational law.  The US status reports did not show 
any sign of change and the United States continued to  repeat the same statement and failed to provide 
Members with any new information.  All were awar e that the US administration was working with the 
US Congress to implement the DSB's recommendations  and rulings.  Members were responsible for 
ensuring that their laws, regulations and administrative procedures were in conformity with their WTO obligations, as stipulated in Article XVI:4 of  the Marrakesh Agreement.  According to the 
November 2009 press release, the number of trade disputes brought into the WTO had now reached 
four hundred.  Although Cuba r ecognized that the dispute settlement system benefited a number of 
Members, it considered that cases such as that concerning Section 211 clearly showed that powerful 
countries could decide not to comply with the rules,  and perpetuate non-compliance.  Furthermore, in 
that press release, the WTO Director-General had st ated that:  "all the political muscle-flexing is 
discarded at the door once the case enters the WTO".  While the statement by the Director-General 
may have, to a certain extent been true, the Sec tion 211 case showed that muscle-flexing and lack of WT/DSB/M/277 
Page 4  
 
 
 political will could unfortunately prevail for a long time, even if certain rulings obliged the most 
powerful Members to take actions.  In this disput e, the parties remained paralyzed, thus enabling 
legislation, which violated the basic principles of  the TRIPS Agreement and the Paris Convention, to 
remain in force. 
6. Cuba recalled that at the 7th WTO Ministerial Conference, the US Trade Representative had 
stated in the plenary meeting that his negotiati ng team was "looking for concrete signs from other 
Members" with regard to the conclusion of the Doha Round.  Cuba had been looking for concrete 
signs and actions from both the United States a nd the EU since 2002 when the Appellate Body's 
ruling on Section 211 had been issued.  However, as the EU had pointed out, during the Ministerial 
Conference, the poorest countries were also the most  vulnerable ones.  Cuba, once again, urged both 
parties to take urgent steps in 2010 to repeal Sec tion 211.  This would send out a very positive signal 
and would demonstrate their compliance with the WTO rules and commitment towards ensuring that intellectual property rights were duly observed.  This was not abou t making a concession or an effort, 
but about complying with the Appellate Body's  rulings made more than seven years ago. 
7. The representative of Ecuador
 said that his country thanked the United States for its status 
report and supported the statements made by Cuba and other Members on this issue.  Ecuador could 
not but emphasize, once again, that Article 21 of the DSU expressly referred to prompt compliance with the DSB's recommendations and rulings, in par ticular with regard to matters affecting the 
interests of developing countries.  The United States closely monitored compliance by all WTO Members with their obligations and had expressed , in different WTO Councils and Committees, its 
trade and systemic concerns with regard to so me commitments assumed by Members.  The United 
States also drew up internal reports on countries' compliance with their obligations in the area of 
intellectual property rights.  Thus, Ecuador expected the United States to set an example.  Once again, 
Ecuador urged the US administration and Congress to accelerate compliance with the DSB's recommendations and rulings by repealing Section 211.  
8. The representative of China
 said that her country thanked the United States for its status 
report and its statement.  However, the report it self showed the continuation of US non-compliance 
after more than seven years since the adoption of th e relevant reports by the DSB.  This was obviously 
not in line with the principle of prompt implementation, as stipulated in the DSU provisions, and undermined the authority and credibility of the WTO dispute settlement system.  China supported the 
statement made by Cuba and urged the United States  to implement the DSB's decision without further 
delay. 
9. The representative of Brazil
 said that his country thanked the United States for its status 
report pertaining to the Section 211 dispute.  He noted that another year had passed, but the United States had not brought itself into complianc e with the DSB's recommendations and rulings.  
Brazil continued to be concerned w ith this matter and expected that the United States would bring its 
measures into conformity with the multilate ral trade disciplines without further delay. 
10. The representative of Bolivia
 said that her country continued to be concerned by the lack of 
progress in this case and the consequences for the WTO resulting from the lack of compliance with 
the agreed obligations.  The United States must co mply with the DSB's recommendations and rulings 
and lift the restrictions imposed under Section 211, wh ich were contrary to the rules of international 
law, in order to preserve the integrity of the WTO system. 
11. The representative of Chile  said that his country thanked the United States for its status 
report.  Chile continued to have systemic concerns  about the lack of compliance in this dispute and 
called upon the parties, in particular the United States,  to put an end to this long-standing dispute.  
Chile hoped that this matter would soon be removed from the Agenda.   WT/DSB/M/277 
 Page 5 
 
 
 
 12. The representative of Costa Rica  said that his country thanked the United States for its status 
report and reiterated the importance of complying w ith the provisions of Article 21.1 of the DSU, 
which highlighted the importance of prompt compliance with the DSB's rulings and recommendations.  Costa Rica urged the United States to rapidly find a solution with the US Congress to ensure the full compliance with  the DSB's recommendations and rulings, as indicated in the US 
status report. 
13. The representative of Mexico
 said his delegation wished to recall that Articles 3.3 and 21.1 of 
the DSU stated that for the effec tive functioning of the WTO it was absolutely essential to ensure the 
prompt resolution of disputes.  The prompt compliance with the DSB's recommendations and rulings was essential to guarantee the effe ctive settlement of disputes for all Members.  Mexico invited the 
parties to this dispute to keep in mind those prin ciples and to take the necessary measures to comply 
with the DSB's recommendations, which would bene fit the functioning of the WTO and its Members. 
14. The representative of Paraguay
 said that her country supported the statement made by Cuba 
and called upon the United States to comply with  the DSB's recommendations and rulings by 
repealing Section 211.  
15. 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.85) 
16. The Chairman  drew attention to document WT/DS184/ 15/Add.85, 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. 
17. The representative of the United States  said that his country had provided a status report in 
this dispute on 10 December 2009, in accordance 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 investigation at 
issue in this dispute.  Details were provided in  document WT/DS184/15/Add.3.  With 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. 
18. The representative of Japan
 said that his country thanked the United States for its statement 
and its latest status report.  Japan noted that, in its report, the United States had indicated that it had 
taken certain measures to implement part of th e DSB's recommendations in November 2002.  Japan 
hoped that the United States would soon be in a position to report to the DSB tangible progress for the remaining part of the DSB's reco mmendations and rulings.  Full a nd 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 th e rights and obligations of Members".
2  Japan called on the 
United States to fully implement the DSB's recommendations in this long-standing dispute without 
further delay. 
19. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
                                                      
2 Article 3.3 of the DSU. WT/DSB/M/277 
Page 6  
 
 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.60) 
20. The Chairman
 drew attention to document WT/DS160/ 24/Add.60, 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. 
21. The representative of the United States  said that his country had provided a status report in 
this dispute on 10 December 2009, 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. 
22. The representative of the European Union  said that the United States had again reported non-
compliance in this dispute, and the EU was again disappointed, especially in light of the importance 
the United States attached to intellectual prope rty protection.  The EU was aware that the 
United States was in favour of strong intellectual property protection throughout the world, and hoped 
that it would lead by example.  The EU remained ready to work with the US authorities towards the 
complete resolution of this case, and hoped that th e financial loss suffered by the EU industry could 
be soon brought to an end.  
23. 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.23 – WT/DS293/31/Add.23) 
24. The Chairman  drew attention to document WT/D S291/37/Add.23 – WT/DS293/31/Add.23, 
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 affecting the approval and marketing of biotech products. 
25. The representative of the European Union
 said that the EU regulatory procedures on biotech 
products continued to work as foreseen in the le gislation.  The Commission had recently authorized 
four GM maize events, which would raise the nu mber of GMOs authorized since the date of 
establishment of the Panel to twenty-five. 
26. The representative of Argentina  said that his country thanked th e EU for its status report.  
Argentina was following closely all the developments  regarding the approvals and any measures taken 
within the EU.  In view of the very constructiv e dialogue, Argentina was very close to reaching a 
mutually agreed solution, under Article 3.6 of  the DSU, with regard to this matter.  
27. The representative of the United States  said that his country thanked the EU for its status 
report and its statement.  The United States recalle d its concerns about the large number of biotech 
products backed up in the EU approval system.  A pproximately twice as many biotech products were 
awaiting approval now, compared to the number at th e time the dispute had been initiated in 2003.  
The EU's failure to move forward in a timely manner on those applications for approval had the 
practical effect of imposing an import ban on important  US agricultural products.  In the last several 
weeks, the EU had finally approve d four varieties of biotech ma ize.  Those approvals, however, 
represented only a small fraction of the total backl og of pending applications.  At the present meeting, 
the United States wished to return to another of its  serious concerns with the EU's biotech approval 
process, namely, individual EU member States con tinued to ban certain biotech products even after 
those products had received EU-wide approval.  The United States recalled that the DSB had found  WT/DSB/M/277 
 Page 7 
 
 
 
 that bans adopted by six EU member States on prod ucts approved at the EU-level were in breach of 
the EU obligations under the SPS Agreement.  Almo st two years after the end of the reasonable 
period of time for compliance in this dispute, the EU  had yet to remove these member State bans in 
their entirety.  Moreover, individual EU member States had continued to adopt new bans on products 
approved at the EU-level, despite the fact that th e relevant EU scientific authorities had found these 
products to be safe.  Moreover, most of these new bans covered the very same biotech products that 
were subject to the member State bans that the DSB had found to be in breach of SPS obligations.  The United States urged the EU and the applicable me mber States to take prompt steps to lift these 
bans on biotech products approved at the EU-lev el.  The United States thanked the DSB for its 
attention to this matter.  
28. The representative of the European Union
 said that her delegation thanked Argentina and was 
looking forward to announcing the good news to Memb ers at the next DSB meeting.  With regard to 
the statement made by the United States, the EU w as somewhat confused about  the reference to the 
safeguard measures covered by the Panel Report.  Her delegation understood the reference to new 
safeguard measures, which were not covered by the Panel Report.  However, with regard to the ones 
covered by the Panel Report, she said that those me asures were not in effect any longer and the EU 
would seek clarification on this from the United States bilaterally. 
29. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(e) European Communities – Regime for the importation, sale and distribution of bananas:  
Second recourse to Article 21.5 of the DSU by Ec uador:  Status report by the European Union 
(WT/DS27/96/Add.11) 
30. The Chairman  drew attention to document WT/DS27/ 96/Add.11, which contained the status 
report by the European Union on progress in the implementation of the DSB's recommendations and 
rulings in the case concerning its regime for the importation, sale and distribution of bananas. 
31. The representative of the European Union  said that her delegation was pleased to report that it 
had reached a historic agreement with Latin American  banana suppliers in the previous week.  This 
was not an easy task, since it had required striking a delicate balance of the different interests of all banana suppliers to the EU.  The agreement, togeth er with an agreement regarding the settlement of 
the case brought by the United States, had been initialled in Geneva on 15 December 2009.  The EU 
hoped that this would bring a long-awaited peace on th is thorny file.  Those agreements provided for 
final settlement of all current disputes regardi ng the EU import regime on bananas upon certification 
of a new EU tariff schedule on bananas.  This include d the dispute that had been on the Agenda of the 
DSB since the adoption of the Appellate Body Repo rt a year ago.  Pending such final settlement, 
Latin American suppliers and the United States ha d committed themselves not to take any actions 
under the current disputes, provided that the EU co mplied with its obligations under the agreement.  
The so-called Geneva Agreement on Trade in Bananas brought to an end the long-standing 
negotiations with Latin American  banana suppliers (starting al ready in 2004) regarding the 
modification of the EU tariff bindings on bananas.   Furthermore, the agreement provided for an 
important progressive reduction of the EU applied and bound tariffs on bananas.   Such tariff reduction 
commitments encompassed also the final EU tari ff reduction commitments on bananas in the context 
of multilateral trade negotiations.  The agreem ent had already been presented to the WTO 
Membership at the 17 December 2009 meeting of the General Council.  The EU had now started 
internal procedures for the authorization of the signa ture and provisional appli cation of the agreement, 
pending the conclusion of ratification procedures.  Article 21.6 of the DSU stated that the implementation of the recommendations or rulings shall remain on the DSB's Agenda until the issue 
was resolved.  The Geneva Agre ement for Trade in Bananas set clear conditions for the final WT/DSB/M/277 
Page 8  
 
 
 settlement of the dispute brought by Ecuador, but the "resolution" of the issue was still some time 
away.  The EU had barely emerged from the negotiati ons and, therefore, had not had the time yet to 
discuss this in detail with Ecuador.  But in the spirit of cooperation and trust that had developed 
between the EU and Ecuador in the course of t hose negotiations, the two parties would work on a 
joint communication in order to remove this ma tter from the DSB's Agenda as of next year.  
32. The representative of Ecuador
 said that his country thanked the EU for its status report.  As 
notified to Members at the 17 December 2009 Gene ral Council meeting, on 15 December 2009, the 
Latin American banana suppliers had reached and initialled the Geneva Agreement on Trade in 
Bananas with the EU.  Ecuador hoped that that Agreement would put an end to the longest legal 
dispute in the history of the GATT and the WTO.   The Agreement provided for a number of phases, 
which had started with the initialling of the text by the parties, and would continue with their 
signature, and finally the certification of the modified schedule on bananas in the EU's WTO tariff concessions.  Once the final phase of the agreement had been reached following Certification, the 
relevant parties to the Agreement would jointly notify the DSB that they had reached a mutually 
agreed solution under paragraph 5 of the Geneva Ag reement on Trade in Bananas and Article 3.6 of 
the DSU.  In the meantime, Ecuador reserved all its legal rights in respect of this dispute, and in 
respect of the surveillance of implementation of  the recommendations and rulings of the DSB under 
Article 21.6 of the DSU.  The Agreement still had to be signed, and Ecua dor hoped that in the 
meantime, the EU would continue to inform Me mbers periodically of its progress towards that 
objective on the domestic front.  Ecuador was prepared  to work with the EU on this matter and would 
continue to consult in this respect, as well as with  regard to any other matter  that might derive from, 
or relate to, the Agreement. 
33. The representative of Panama
 said that his country was pleased  to have reached an agreement 
with the EU and other Latin American producers on the exportation of Latin American bananas.  The 
Agreement aimed at settling this dispute, which had l asted for nearly two decades.  In Panama's view, 
the Agreement, which was the outcome of an arduous and delicate process, would provide an 
economically beneficial, legally sustainable and las ting solution to all of the parties involved.  The 
initialling of the Agreement on 15 December 2009 did not  yet mean the end of this dispute.  The 
parties were now entering the phase of implementation of its provisions and of monitoring to ensure 
that the EU complied fully with its obligations, so that the Agreement could rapidly enter into force 
and provide an effective solution to the dispute.  In  this respect, plenty of work remained to be done 
and the various steps needed to be coordinated.  Pa nama called on the EU to be as flexible as possible 
so that a mutually agreed solution could be notified to the DSB in the near future.  Panama thanked all 
those who had contributed to reaching this agreem ent, including the Direct or-General and the EU 
Ambassador.  
34. The representative of Colombia  said that his country had participated in the negotiations with 
the EU aimed at reaching an agreement on trade in bananas.  Colombia welcomed the conclusion of 
the negotiations and thanked all pa rticipating Members and the Secretariat for their commitment and 
efforts to achieve that result.  The agreement would provide a solution to one of the longest-standing 
disputes in the WTO.  Colombia would act in good faith and would do everything it could to ensure 
the entry into force of the Agreement.  Colombia trusted that the other parties would do the same.  
Colombia hoped to be able to notify soon the DSB of  a mutually agreed solution under the terms of 
the agreement. Colombia commended, in particular , the EU Ambassador for his patience, flexibility 
and persistence.  What counted first and foremost was that all those involved should be able to turn 
this page of their history and look together towards the future with greater optimism. 
35. The representative of India  said that his country joined previous speakers in welcoming the 
information regarding the understanding reached between the EU and Latin American banana 
suppliers.  India recognized that trade in bananas was vital to the economies of a number of Latin  WT/DSB/M/277 
 Page 9 
 
 
 
 American and ACP countries, and to this extent we lcomed the fact that this understanding removed 
the contentiousness that had surrounded the issue for a number of years.  However, India did not see 
any negotiating linkage between those issues, especi ally when the understanding on the treatment of 
tropical products and preference erosion did not in corporate the concerns of other Members with 
substantial trading interest in such  products.  India was, therefore, not in a position to accept such a 
linkage.  India had waited long for the beginning of  a multilateral negotiation on tropical products and 
preference erosion and in the coming weeks would exp ect the Chairman of the Special Session of the 
Committee on Agriculture to initiate  such a process.  It was only  through such an inclusive and 
transparent process that Members could proceed towa rds a sustainable outcome with balance for the 
interest of all parties. 
36. The representative of the United States  said that his country was very pleased that, the 
previous week, the EU and various Latin American  countries, including its co-complainants in this 
dispute, had successfully completed and initialled th e Geneva Agreement on Trade in Bananas.  As 
Members were aware, at the same time, the United States and the EU had also initialled an agreement 
intended to lead to a settlement of this long-standing dispute.  It sh ould not be forgotten that initialling 
those agreements was just a first step.  There were s till many steps that each country and, in particular, 
the EU would need to take for the agreements to be signed and fully implemented.  Those agreements 
had only been initialled and the United States understood that there were various domestic procedures 
that the EU needed to undertake for signing and fo r entry into force.  The EU should keep the DSB 
apprised of developments.  The United States recalled that, at previous DSB meetings, it had 
requested that the EU provide status reports with r espect to the US dispute and thus the United States 
renewed that request at the present meeting.  The United States believed that a significant step 
towards achieving final settlement had been taken a nd looked forward to reaching that point as soon 
as possible. 
37. The representative of Mexico  said that his country joined Latin American countries and other 
Members in welcoming the Agreement, which had recently been initialled by the Latin American 
banana suppliers and the EU.  Mexico hoped that that Agreement would soon be signed by the 
participants in the Memorandum of Understanding, in  particular by the EU.  Mexico also hoped that 
the initialled Agreement would be able  to evolve and become a definitive solution to the dispute.   
38. The representative of Cameroon  said that his country wished to restate its position regarding 
the manner in which the Appellate B ody and Panels had dealt with this  case, in particular with regard 
to the points raised by Cameroon in the course of the proceedings.  First, he said that the Appellate 
Body had not taken into account all the arguments submitted by Cameroon.  He hoped that in future, 
in such cases, panels would be as fair as possibl e and would take into account all the elements put 
forward for reasons of equity and justice and gi ve a response to each of the submitted arguments.  
Second, in Cameroon's view, the Appellate Body, in conducting its proceedings, should have duly 
taken into account the trading reality.  The Appellate Body was not just a Body to rule in law but also 
to regulate trade.  Cameroon welcom ed the fact that this particular  dispute would finally be closed, 
and hoped that future procedures would be held in accordance with the terms outlined above.  
39. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(f) United States – Laws, regul ations and methodology for calculating dumping margins 
("zeroing"):  Status report by the United States (WT/DS294/34/Add.4) 
40. The Chairman  drew attention to document WT/DS294/ 34/Add.4, 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. WT/DSB/M/277 
Page 10  
 
 
 41. The representative of the United States
 said that his country had provided a status report in 
this dispute on 10 December 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, the United States 
would continue to consult with interested parties. 
42. The representative of the European Union
 said that the United States had provided its fifth 
status report in this dispute.  As was the case with the four previous reports, the status report 
confirmed that the United States had not taken any ac tion whatsoever to correct the shortcomings in 
its implementation.  Furthermore, there was no implementing action despite the fact that the 
reasonable period of time for implementation in this  dispute had expired on 9 April 2007.  There had 
been no implementing action despite the fact that the Report of the Appellate Body and the Panel 
Report, as modified by the Appellate Body, in the compliance proceedings for this dispute, had been 
adopted by the DSB six months ago.  Finally, there was no implementing action despite implementation apparently being subject to the discr etion of the US administration and, therefore, 
accomplishable by administrative action.  For the fifth time, the United States was merely telling 
Members what it had done in 2007.  The EU was al ready well aware that the United States had taken 
some actions in February 2007 to cease zeroing in  weighted-average-to-average comparisons in 
original investigations.  However, as the Panel a nd the Appellate Body Reports in this dispute had 
confirmed, that was not enough.  The real problem was the use of zeroing in reviews, both administrative reviews (on the basis of which a la rge percentage of anti-dumping duties paid were 
collected) and sunset reviews, where "zeroed" margins of dumping were used to justify the 
continuation of duties.  The Appellate Body had made the legal situation on zeroing crystal clear.  
Zeroing was prohibited in both original investiga tions and reviews.  In addition, any anti-dumping 
duties collected after the end of the implementa tion period must be calculated without zeroing, 
whenever the goods in question were imported or the review determination made.  The only step left 
for the United States was to bring itself into  full compliance without further delay. 
43. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(g) United States – Measures relating to zeroing and sunset reviews:  Status report by the 
United States (WT/DS322/36/Add.3) 
44. The Chairman  drew attention to document WT/DS322/ 36/Add.3, 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 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 10 December 2009, in accordance with  Article 21.6 of the DSU.  As noted in that 
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 latest status report.  The United States had st ated in its reports that it "[would] continue to 
consult with interested parties in order to address the findings contained in [the Appellate Body and 
the panel] reports" adopted by the DSB on 31 Augu st 2009.  Japan understood this statement as an 
expression of commitment by the United States to bring into conformity the measures found to be 
inconsistent with the Anti-Dumping Agreement and the GATT 1994.  Japan recalled that, the adopted 
reports contained, among others, the finding that the use of zeroing in  the subsequent periodic reviews 
Japan had challenged in the compliance proceedings w as inconsistent with Articles 2.4 and 9.3 of the  WT/DSB/M/277 
 Page 11 
 
 
 
 Anti-Dumping Agreement and Article VI:2 of the GATT 1994.  Japan called on the United States to 
meet its commitment by taking immediate and conc rete action to fully comply with the DSB's 
recommendations and rulings in order to resolve this dispute. 
47. The representative of the European Union  said that her delegation continued to be 
disappointed over the lack of any progress by the United States on compliance with adverse rulings on 
zeroing in yet another dispute, and recalled that immediate compliance with the DSB's 
recommendations and rulings was not an option, but an obligation under the DSU provisions.  
48. The representative of the United States  said that, while his country appreciated Members' 
concerns that compliance should be prompt, the Unit ed States noted that perhaps the EU was not the 
Member best positioned to be raisi ng such concerns before the DSB. 
49. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(h) United States – Continued existence and appli cation of zeroing methodology:  Status report 
by the United States (WT/DS350/18) 
50. Finally, the Chairman  drew attention to document WT/DS 350/18, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning the existence and application of zeroing methodology by the United States. 
51. The representative of the United States  said that his country had provided a status report in 
this dispute on 10 December 2009, in accordance with  Article 21.6 of the DSU.  As noted in that 
status report, the United States had taken steps to  implement the DSB's recommendations and rulings 
in this dispute.  With regard to the remaining i ssues, the United States would continue to consult with 
interested parties. 
52. The representative of the European Union  said that her delegation thanked the United States 
and noted its first status report in this dispute.  This was the third time that the issue of US zeroing 
was on the Agenda of the present DSB meeti ng under the Agenda item on surveillance of 
implementation of recommendations adopted by the DS B.  The EU was concerne d that this was also 
the third time at the present meeting that the DSB was considering a situation where the reasonable 
period of time for implementation had expired, but, d espite a clear legal obligation to the contrary, the 
United States had not brought itself into compliance.  At the 20 March 2009 DSB meeting, the United States had stated that it intended to implem ent the DSB's recommendations and rulings in this 
dispute, but that it was impracticable for it to comply immediately and that it would, therefore, require a reasonable period of time for implementation.  As a result, the EU and the United States had agreed 
that the reasonable period of time to implement th e DSB's recommendations and rulings would be ten 
months, a rather generous time-frame for implemen tation in view of the ove r 20 panel and Appellate 
Body reports condemning zeroing that had been adopt ed by the DSB to date, and in view of the 
statements by the United States itself that the calculation of anti-dumping duties with (or without) zeroing was done simply by pressing a button, which in turn triggered the "zeroing" computer code. 
53. The EU was deeply disappointed over the fact that practically nothing had been done during 
the reasonable period of time, which had been agreed to address the relevant issues in this dispute.  
The status report presented by the United States at the present meeting referred to a written request by 
the USTR to the Secretary of Commerce to issue a determinat ion under Section 129(b) of the 
Uruguay Round Agreements Act that would implement the DSB's recommendations and rulings with respect to four final determinations (Purif ied Carboxymethylcellulose from Sweden;  Final 
Determination of Sales at Less Than Fair Valu e:  Purified Carboxymethylcellulose from the WT/DSB/M/277 
Page 12  
 
 
 Netherlands;  Final Determination of Sales at Less Th an Fair Value:  Purified Carboxymethylcellulose 
from Finland;  and Final Determination of Sales at Less Than Fair Value:  Chlorinated Isocyanurates 
from Spain).  While it would appear that draft resu lts for the above-mentioned four measures could be 
expected by 18 December 2009, the final results were  only due in 2010.  The EU, therefore, noted that 
the deadline of 19 December would be  missed with regard to the four measures above.  However, the 
EU had far deeper concerns with regard to this ma tter.  The Section 129 proceeding appeared to have 
taken no account of the other findings of the Panel and the Appellate Body Reports adopted by the 
DSB on 19 February 2009.  In the present disput e, the EU had challenged measures relating to 18 
anti-dumping cases.  In particular, the Appellate Bo dy had concluded that the use of zeroing by the 
United States in measures covering 34 administrativ e reviews and eight sunset reviews was in breach 
of WTO rules, yet none of these appeared to have been included in the Sec tion 129 proceeding.  In 
addition, as regards four of the cases – Ball Bear ings and Parts Thereof from Italy (Case II), Ball 
Bearings and Parts Thereof from Germany (Case III), Ball Bearings and Parts Thereof from France (Case IV), and Stainless Steel Sheet and Strip in Coils from Germany (Case VI) – the Appellate Body 
had explicitly ruled the use of zeroing in all futu re reviews to have been WTO-inconsistent.   
54. Furthermore, for the other 14 cases (including th e four for which the Section 129 proceeding 
had already been initiated), the es tablished case law made it clear that reviews conducted subsequent 
to the challenged measure must be free of zeroing.  The Panel and the Appellate Body Reports in the 
case:  "United States – Laws, Regulations and Methodology for Calculating Dumping Margins 
(Zeroing) – Recourse to Article 21.5 of the DSU by the European Communities" (DS294) had also made it clear that the United States was required, at the end of the reasonable period of time, to 
recalculate the cash deposit rates for each measure without zeroing.  Furthermore, from this date 
onwards, the United States was only allowed to liquida te duties at non-zeroed rates.  In addition, the 
calculation of the dumping margin in ongoing and future  reviews must be free of zeroing.  To date the 
United States appeared to have done nothing to addre ss any of the above issues.  All the EU could say 
to describe what the United States had done to bring itself into compliance with the DSB's 
recommendations and rulings in this dispute was:  too little, too late. 
55. The representative of the United States
 said that his country was sure that Members 
appreciated the difficulties that were raised for th e United States by the Appellate Body's findings on 
zeroing in this dispute and others.  As had been noted , with respect to each of the four investigations 
found inconsistent in this dispute, the US Trad e Representative had made a written request to the 
Secretary of Commerce to issue a determination under Section 129(b) of the Uruguay Round 
Agreements Act not inconsistent with the DSB' s recommendations and rulings.  The United States 
was still consulting with interested parties in orde r to address the other findings in this dispute. 
56. 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 Union and Japan 
57. The Chairman  said that this item was on the Agenda of the present meeting at the request of 
the European Union and Japan.  He then i nvited the respective representatives to speak.  WT/DSB/M/277 
 Page 13 
 
 
 
 58. The representative of Japan  said that US Customs and Border Protection had just issued the 
CDSOA Annual Reports for FY2009.3  According to the reports, some US$248 million had been 
disbursed for FY2009.  This amount appeared to have been higher than the amount distributed for the previous year, FY2008.  These latest distribu tions showed that the CDSOA still remained 
operational.
4  Japan urged 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. 
59. The representative of the European Union  said that, as in many previous DSB meetings, her 
delegation wished to ask the United States when it wo uld effectively stop the transfer of anti-dumping 
and countervailing duties to its industry and finally put an end to the condemned measure.  The EU 
also renewed its call on the United States to abide by its clear obligation under Article 21.6 of the 
DSU and to submit status reports in this dispute. 
60. The representative of Brazil  said that his country thanked the EU and Japan for keeping this 
item on the Agenda of the DSB.  As had previously  been stated, Brazil was of the view that the 
United States was required to submit status repor ts in this dispute until such time as no more 
disbursements were made pursuant to the Byrd Ame ndment.  Only then would the issue have been 
"resolved" within the meaning of the DSU and the United States would have been released from its 
obligation to provide status reports in this dispute. 
61. The representative of India  said that his country thanked Japan and the EU for raising this 
important issue before the DSB.  As Japan had pointed out, the CD SOA remained fully operational 
and allowed even higher disbursements by the US administration to its domestic industry.  These facts continued to raise concerns to WTO Members.  I ndia wished to know from the United States when it 
would effectively stop the transfer of anti-dumpi ng and countervailing duties to its domestic industry 
and finally put an end to the condemned measure.  As  previously reiterated, India was concerned that 
non-compliance by Members eroded the credibility of the WTO dispute settlement system. 
62. The representative of Thailand
 said that his country thanked the EU and Japan for, once 
again, bringing this item before the DSB.  Tha iland continued to urge the United States to cease 
disbursements under the Continued Dumping and Subsid y Offset Act, and to provide status reports 
until such actions were taken and this matter was fully resolved. 
63. The representative of China  said that her country thanked th e EU and Japan for, once again, 
having raised this matter at the DSB meeting.  China shared the concerns expressed by previous 
speakers and joined them in urging the United St ates to comply fully with the DSB's rulings. 
64. The representative of Canada  said that her country agreed with the EU and Japan that the 
Byrd Amendment remained subject  to the surveillance of the DS B until the United States ceased to 
administer it. 
                                                      
3 CDSOA 2009 Annual Reports dated 10 December 2009.  See US Customs and Border Protection's 
website at: 
http://www.cbp.gov/xp/cgov/trade/prio rity_trade/add_cvd/cont_dump/cdsoa _09/report/fy09_a nnual_report.xml  
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.xml  WT/DSB/M/277 
Page 14  
 
 
 65. The representative of the United States
 said that, as his country had already explained at 
previous DSB meetings, the US President si gned the Deficit Reduction Act into law on 
8 February 2006.  That Act included a provisi on repealing the Continued Dumping and Subsidy 
Offset Act of 2000.  Thus, the United States had ta ken all actions necessary to implement the DSB's 
recommendations and rulings in these disputes.  The United States further recalled that Members had 
acknowledged, during previous DSB meetings, that  the 2006 Deficit Reduction Act did not permit the 
distribution of duties collected on goods entered after 1 October 2007.  With respect to comments regarding further status reports in this matter, as it had already explained at previous DSB meetings, 
the United States failed to see what purpose would be served by further submission of status reports repeating the progress the United States had made in the implementation of the DSB's 
recommendations and rulings. 
66. The DSB took note
 of the statements. 
3. China – Measures related to the expo rtation of various raw materials 
(a) Request for the establishment of a panel by the United States (WT/DS394/7) 
(b) Request for the establishment of a panel by the European Communities (WT/DS395/7) 
(c) Request for the establishment of a panel by Mexico (WT/DS398/6) 
67. The Chairman  proposed that the three sub-items to wh ich he had just referred be considered 
together.  He recalled that the DSB had considered these matters at its meeting, on 19 November 2009, and had agreed to revert to them .  He then drew attention to the communication 
from the United States, contained in document WT /DS394/7, and invited the representative of the 
United States to speak. 
68. The representative of the United States
 said that, as his country had explained at the DSB 
meeting on 19 November 2009, the United States  was concerned about Chinese measures that 
restrained the exportation of certain raw materials th at were critical to US manufacturing industries.  
These restraints not only limited the availability of t hose raw materials, but also increased the cost of 
those raw materials to US and other producers outsi de of China, while providing an artificial cost 
advantage to downstream industries within China.  Th e materials at issue were either raw or initially 
processed materials that were essential inputs in the production of steel, aluminium, and industrial 
chemicals with far-ranging applications.  The export restraints at issue included export quotas, export 
duties, minimum export pricing, various restrictions  on the right to export, as well as administrative 
requirements that increased the burdens and costs for exporting these materials from China.  As had 
been described in more detail in the US panel request , these restraints appeared to be inconsistent with 
the provisions of the GATT 1994 and China's Protocol of Accession.  At the DSB meeting of 
19 November 2009, China had mentioned the dialog ue between the United States and China on this 
issue.  The United States also regretted that significant US engagement over many years had not resulted in the lifting of the Chinese measures restric ting the export of the raw materials at issue.  
Accordingly, the United States again requested that  the DSB establish a panel to examine the matter 
set out in its panel request with standard terms of reference.  The United States further requested, 
pursuant to Article 9.1 of the DSU, that a single pane l be established to examine the complaints of the 
United States, the EU and Mexico. 
69. The Chairman
 drew attention to the communication c ontained in document WT/DS395/7, and 
invited the representative of the European Union to speak.  WT/DSB/M/277 
 Page 15 
 
 
 
 70. The representative of the European Union  said that, regrettably, her delegation found itself 
left with no choice but to make a second request for the establishment of a panel in this dispute.  As 
had been noted during the previous DSB meeting, the consultations, while helpful in clarifying the 
Chinese measures and their application, had provided no basis for a negotiated solution to the dispute.  
Furthermore, as had been previously noted, the Chin ese export restraints on raw materials were by no 
means a recent phenomenon.  The restraints had be en a problem at the time of China's accession to 
the WTO, and they remained so now.  The EU belie ved that the restraints constituted a violation of 
not only provisions of the GATT, but also specific commitments undertaken by China upon 
accession, commitments which aimed specifically at t hose types of export restraints.  With the second 
request for the establishment of a panel, the EU was seeking the re-establishment of a level playing 
field by ensuring China's observance of its WT O obligations.  The EU requested, pursuant to 
Article 9.1 of the DSU, that a single panel be est ablished to examine the complaints of the EU, the 
United States and Mexico. 
71. The Chairman  drew attention to the communicati on from Mexico contained in document 
WT/DS398/6, and invited the representative of Mexico to speak. 
72. The representative of Mexico  said that, like the United States and the EU, Mexico had 
requested the establishment of a panel in this case at  the 19 November 2009 DSB meeting.  However, 
it was impossible to establish a panel at that meeting because of China's objection to do so.  Thus, Mexico's panel request was now on the DSB Ag enda for the second time.  In accordance with 
Article 6.1 of the DSU, Mexico, once again, requested  that a panel be established, and referred to the 
statement made by Mexico at the 19 November 2009 DSB meeting.  Mexico also requested, in 
accordance with Article 9.1 of the DSU, the estab lishment of a single panel to examine the cases 
brought by Mexico, the United States and the EU.  At the same time, Mexico remained open to the 
possibility of working with China, with the coope ration and mutual support of the United States and 
the EU, in order to find a mutually satisfactory solution to this dispute. 
73. The Chairman
 invited the representative of China to speak. 
74. The representative of China  said that her country was disappointed that the United States, the 
EU and Mexico had decided to pursue their request s for panel establishment at the present meeting.  
China was of the view that such action was not conduc ive to the resolution of the matter given that, at 
the 19 November 2009 DSB meeting, China had expl ained the policy objectives of its measures and 
had expressed its readiness to continue the dialogue with relevant Members.  Having said that, China 
understood that a panel would be established and lo oked forward to defending its rights and interests 
before the panel.  However, China had certain conc erns with the way in which the three complainants 
had framed their panel requests.  China regretted that its ability to prepare its defence in those disputes 
had been impaired by the complainants' failure to  observe the requirements for panel requests, as 
required under Article 6.2 of the DSU.  For example, in Section II of the complainants' panel requests, 
titled "Export Duties", each had alleged that China's measures were inconsistent  with its obligations 
"under the provisions of paragraph 1.2 of Part I of the Accession Protocol, which incorporates 
commitments referred to in paragraph 342 of th e Working Party Report".  Paragraph 342 of the 
Working Party Report incorporated "commitments given by China in relation to certain specific 
matters" addressed in well over 100 separate paragraphs  of the Report.  China considered that the 
reference to paragraph 342 alone was insufficient to id entify the legal basis of the claims made in this 
regard.  By way of further example, Secti on III of the Complainants' Panel Requests, titled 
"Additional Restraints Imposed on Exportation", d escribed various "complaints", and listed 37 
"measures", along with 13 treaty provisions.  Ho wever, the requests had failed to make any 
connection between:  (1) the "complaints" and the "measures";  (2) the "measures" and the treaty 
provisions;  and, (3) the treaty provisions and the "complaints".  As a result, the complainants' requests were "[in]sufficient to present the problem cl early", within the meaning of Article 6.2 of the WT/DSB/M/277 
Page 16  
 
 
 DSU.  In those and other respects, the three compla inants had prejudiced China's ability to prepare its 
defence.  Since the complainants wished to pr oceed with panel establishm ent, China would seek a 
preliminary ruling on the requests' consis tency with Article 6.2 of the DSU. 
75. The DSB took note
 of the statements and agreed  to establish a single panel pursuant to 
Article 9.1 of the DSU, with standard terms of  reference, to examine the complaint by the 
United States contained in WT/DS394/7, the comp laint by the European Communities contained in 
WT/DS395/7 and the complaint by Mexico contained in WT/DS398/6. 
76. The representatives of Argentina , Brazil , Canada , Chile , Colombia , Ecuador , the 
European Union , India , Japan , Korea , Mexico , Norway , Chinese Taipei , Turkey  and the United States  
reserved their third-party rights to pa rticipate in the Panel's proceedings. 
4. United States – Measures affecting imports of certain passenger vehicle and light truck 
tyres from China  
(a) Request for the establishment of a panel by China (WT/DS399/2) 
77. The Chairman  drew attention to the communicati on from China contained in document 
WT/DS399/2, and invited the representative of China to speak. 
78. The representative of China  said that, on 11 September 2009, the United States had 
announced the imposition of product specific safeguard  on imports of certain passenger vehicle and 
light truck tyres from China pursuant to section 421 of  the Trade Act of 1974.  Three days thereafter, 
on 14 September 2009, China had requested cons ultations with the United States.  Those 
consultations had been held in November 2009 in Ge neva, but the two sides failed to reach a mutually 
satisfactory resolution.  Therefore, China had to re quest the DSB to establish a panel to examine this 
matter.  China, once again, expressed its deep regret towards the US decision to impose product-
specific restrictions on imports of certain tyres from China.  Since the start of the financial crisis, 
world leaders had reiterated in many forums, incl uding the G20 summits, to oppose protectionism and 
that the free flow of trade was in the fundamental in terests of the world.  The US tyre industry also 
opposed the imposition of product specific safeguard measures, and deemed that the imports from 
China did not cause injury to them.  Under the circ umstances, the US imposition of restrictions on 
tyres from China was a compromise to the pressure of US domestic protectionism interests.  This restriction was a departure from international consen sus, impaired China's interests and also the US 
interests.  What also needed to be pointed out w as that US determinations ran short of factual bases 
and breached its obligations under the WTO.  First, there was no rapid increase of imports from China 
since 2007.  According to China's customs data, the increase from 2007 to 2008 was 2.2 per cent , and 
the data of the first half of 2009 decreased by 16 per cent from 2008.  Second, the imports from China 
did not have a causal link with material injury of the US tyre industry.  The biggest increase of imports from China had taken place in 2007 which was the most profitable year for the US tyre industry.  The closure of factories was just a strategic choice made by the US industry to restructure and focus on the high end of the market and was not  a result of China's imports.  Third, the higher 
tariff imposed on tyres from China would not remedy  the US tyre industry, but would hinder the 
industry's restructure process.  In addition, the US  statute authorizing those restrictions, namely 
Section 421 of the US Trade Act of 1974, was inconsis tent on its face with Section 16 of the Protocol 
of Accession in that the US statute impermissibly weakened the standard of "significant cause" by 
imposing a definition of the term that contradicted  Section 16(4) of the Pr otocol of Accession of 
China.  China firmly believed that, to cope with the financial crisis, the most important thing for 
countries was to consult and cooperate.  Any unfair,  unreasonable protectionist measure would injure 
the country imposing such a measure as well as its trade partners.  As a country with a tremendous  WT/DSB/M/277 
 Page 17 
 
 
 
 trade volume, the United States should undertake its own obligation to secure a fair and free trade 
environment in the world. 
79. The representative of the United States  said that his country was disappointed that China had 
chosen to move forward with its request for pa nel establishment.  The United States was confident 
that its measure was consistent with its WTO oblig ations and, specifically, with the product-specific 
safeguard mechanism provided for in Section 16 of China's Protocol of Accession.  The United States 
was not in a position to agree to the est ablishment of a panel at the present time. 
80. The DSB took note  of the statements and agreed  to revert to this matter. 
5. Philippines – Taxes on distilled spirits 
(a) Request for the establishment of a panel by the European Union (WT/DS396/4) 
81. The Chairman  drew attention to the communication from the European Union contained in 
document WT/DS396/4, and invited the representative of the European Union to speak. 
82. The representative of the European Union  said that, regrettably, her delegation found itself 
left with no choice but to request the establishment of a panel in this dispute.  While the consultations 
had been helpful in clarifying the Philippine measur es and their application, there had been no basis 
for a negotiated solution to the dispute.  More re grettably, recent statements by members of Congress 
in the Philippines gave no prospect to the passing of a bill that would remedy the situation.  The EU 
noted that this was a case of a long-standing tax discrimination that had only worsened over the years.  Currently, imported spirits were subject to an exci se tax ten to 50 times higher than the tax imposed 
on domestic spirits.  This had prevented EU sp irits producers from benefiting from the growing 
demand for spirits in the Philippine market.  Furthe rmore, it was estimated that EU exports to the 
Philippines had more than halved between 2004 and 2007, as a result of the increasing discrimination.  
The EU believed that the Philippines excise tax regime  was in clear violation of Article III:2 of the 
GATT 1994.  By requesting the establishment of a panel, the EU was s eeking to ensure the 
Philippines' observance of its WTO obligations. 
83. The representative of the Philippines
 said that his country regretted that the EU had chosen to 
request the DSB to establish a panel to examine th is matter, given that the Philippines continued to 
positively engage with the EU on the issue of its  excise tax regime for distilled spirits.  The 
Philippines was fully committed to th e rules-based multilateral trading system.  As a matter of policy 
and practice, the Philippines accorded utmost impor tance to complying with all its obligations under 
the WTO Agreements and firmly believed that its excise tax regime was fully consistent with its 
WTO obligations.  The Philippines and the EU shared  the common vision of economic development, 
growth and trade liberalization, which was rooted  in a fair, non-discriminatory, transparent and 
predictable regulatory environment in which economic  operators from both c ountries could prosper.  
The Philippines hoped that this matter could still be resolved to the mutual satisfaction of all the 
parties if the respective interests, legitimate sensitiv ities, and policy objectives of all sides were taken 
into account to balance their respective interests.  Therefore, the Philippines believed that it would be 
premature to establish a panel, and was thus not able  to agree to the establishment of such a panel at 
the present time. 
84. The representative of the United States  said that his country had been closely following this 
issue and would continue to do so.  The United States had participated in the consultations that were 
held between the EU and the Philippines in this dispute and was concerned about the Philippines' 
excise tax system and its effect on market access for US exports of distilled spirits.  The United States WT/DSB/M/277 
Page 18  
 
 
 urged the Philippines to address the concerns that had been raised, and hoped that the Philippines 
would soon take action to resolve this issue. 
85. The DSB took note
 of the statements and agreed  to revert to this matter. 
6. Proposed nominations for the indicative list of governmental and non-governmental 
panelists (WT/DSB/W/417) 
86. The Chairman  drew attention to document WT/DSB /W/417, which contained additional 
names proposed for inclusion on the indicative list of governmental and non-g overnmental panelists, 
in accordance with Article 8.4 of the DSU.  He proposed that the DSB approve the names contained 
in document WT/DSB/W/417. 
87. The DSB so agreed . 
7. United States – Subsidies on upland cotton  
(a) Statement by Brazil 
88. The representative of Brazil , speaking under "Other Business", said that Brazil's internal 
procedures were underway with a view to defining  countermeasures that could be imposed by Brazil 
in connection with the "US - Cotton" dispute.  Br azil thanked the United States for its response to the 
letter it had sent, on 25 September 2009,  requesting some data that, in accordance with the Arbitrators' 
Decisions, was required to update the value of the c ountermeasures authorized to  Brazil.  For the sake 
of transparency, Brazil informed the DSB that, on th e basis of complete data related to fiscal year 
2008 and calendar year 2008, obtained from the United States and other sources indicated by the Arbitrator, the total amount of countermeasures aut horized to Brazil would be US$829.3 million.  On 
the basis of the same period, the threshold above which Brazil was entitled to take countermeasures in 
other sectors and agreements outside tr ade in goods would be US$561 million. 
89. The representative of the United States
 said that his country had taken note of Brazil's 
statement and would refer it to authorities in capital. 
90. The DSB took note  of the statements. 
__________