RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/232 
25 June 2007 
 
 (07-2657) 
Dispute Settlement Body 
22 May 2007  
 
  
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard
 
on 22 May 2007  
 
Chairman:  Mr. Bruce Gosper (Australia) 
  
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...................................................................................5  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States .................................................................................................................. .............5  
(d) United States – Laws, regulations and methodology for calculating dumping margins 
("Zeroing"):  Status repor t by the Unite d States .........................................................................6  
2. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ............................................7  
(a) Statements by Canada, the Eur opean Communiti es and Japan...................................................7  
3. United States – Continued existence and application of zeroing methodology ...................8  
(a) Request for the establishment of a pa nel by the European Communities...................................8  
4. United States – Measures affecting the cross-border supply of gambling and 
betting services:  Recourse to Article 21. 5 of the DSU by Antigua and Barbuda ...............9  
(a) Report of the Panel............................................................................................................ ..........9  
5. Chile – Price band system and safeguard measures relating to certain 
agricultural products:  Recourse to Article 21.5 of the DSU by Argentina.......................18  
(a) Report of the Appellate Body and Report of the Panel.............................................................18  
6. Appointment of Appella te Body members............................................................................22  
(a) Statement by the Chairman...................................................................................................... .22 
7. Proposed nominations for the indicative list of governmental and 
non-governmental panelists ...................................................................................................23  
 WT/DSB/M/232 
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.54) 
 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.54) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.29) 
 
(d) United States – Laws, regulations a nd methodology for calculating dumping margins 
("Zeroing"):  Status report by the United States (WT/DS294/20/Add.3) 
 1. The Chairman
 recalled that Article 21.6 of the DSU required that "unless the DSB decides 
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 pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue is 
resolved".  He proposed that the four sub-items to which he had just referred be considered separately. 
 (a) United States – Section 211 Omnibus Appropria tions Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.54) 
 2. The Chairman
 drew attention to document WT/DS176/ 11/Add.54, 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 10 May 2007, in accordance with Article 21.6 of the DSU.  As noted in the status report, a number of legislative proposals that would implement the DSB's recommendations and rulings in this dispute had been introduced in th e current Congress, in both the US Senate and the US 
House of Representatives.  The US Administration c ontinued to work with the Congress to implement 
the DSB's recommendations and rulings.   
 4. The representative of Cuba
 said that the United States had, once again, submitted a status 
report that was no different from the reports it submit ted every month regarding the work that the US 
Administration was carrying out with the US Congress on legislative measures that could resolve this 
dispute.  Also, the United States had not provided de tails as to when it intended to comply with the 
decisions of the DSB.  Cuba noted that the US Ad ministration had manoeuvred in the past to prevent 
the consideration and approval of a number of bills to  repeal Section 211.  Besides, the US President 
had, on a number of occasions, expressed his inte ntion of vetoing any bill approved by the US 
Congress that was aimed at mitigating or eliminat ing the unlawful unilateral measures imposed by 
that country against Cuba, including Section 211.  The growing presence and prestige of the Havana 
Club rum in the international market required financ ing, technology and experience, all of which had 
been provided by the French company Pernod-Ri card and the Cuban master rum-makers.  The 
increased sales had led to the displacement of Baca rdi in a number of markets, and this was what 
accounted for all Bacardi's attempts to take over the trademark.  The Havana Club trademark was 
owned by the Havana Club Holding, of which the French company Pernod-Ricard was part.  This had 
been recognized by the Madrid Court of Appeals, which in March 2007 had upheld the decision by 
the court of first instance to dismiss Bacardi's cl aim to recognition as owner of the trademark and to 
the cancellation of the registration held by its Cuban competitor.  Cuba drew attention to the possible 
implications of maintaining Section 211 for the US  business community and Cuba's trading partners.  
Every day, a growing number of US companies were becoming aware of this and were expressing  WT/DSB/M/232 
 Page 3 
 
 
  concern that Section 211 broke with the practice that both countries had followed until this law had 
been adopted.  Up to that time, there had been mutual recognition between the two countries of the 
rights in intellectual property of its owne rs, whether natural or legal persons.  
 5. In compliance with its international obligat ions and notwithstanding the blockade and 
hostility policy maintained by the United States, Cuba had honoured and co ntinued to protect the 
rights of hundreds of US companies which kept more  than 5,000 registered trademarks up to date in 
Cuba.  The US systematic failure to comply w ith the DSB's rulings cast doubts on the role it had 
traditionally assumed in this and other internationa l organizations as second to none in the protection 
of intellectual property rights, and demonstrated its lack of commitment and political will to honour 
its obligations.  As the months went by with no im plementation of any ruling, doubts were cast on the 
credibility and efficiency of a dispute settlement mechanism, which was in capable in practice of 
resolving situations of this nature.  Once again, his delegation wished to point out that the process was 
flawed.  After the last deadline which had expired on 30 June 2005, the United States and the EC had 
notified their understanding not to implement the suspension of concessions.  With that 
understanding, the dispute had fallen into a legal limbo since there was no deadline for 
implementation of the DSB's rulings, which was requi red under Article 21.3 of the DSU.  Thus, the 
offender had no liability and felt no pressure to observe the principle of prompt compliance, and could 
disregard it indefinitely with the consent of the DS B, until the EC deemed it relevant and reacted.  As 
in previous years, the US Congress had several legislative proposals for implementing the DSB's 
decision in this dispute.  Some of them sought to perpetuate this legal aberration by promoting 
unsubstantial changes to Section 211.  Others, however , aimed to eliminate it.  Cuba hoped that what 
had happened in previous legisla tive periods would not be repeated this year and that the United 
States repeal Section 211, as this was the only proper solution and the one that suited all WTO 
Members, which would likewise be affected if this measure were extended, as established in some of 
the legislative proposals. 
 
6. The representative of th e European Communities
 said that the United States again could not 
report on any progress in the implementation of the DS B's ruling in the Section 211 dispute.  The EC 
hoped that the present US Congress would realize that it was in the interest of the United States and of 
its industry as a whole to put an end to this situ ation which had damaging effect on the authority of 
the TRIPS Agreement.  In this context, the fact th at 49 representatives were already supporting bills to 
repeal Section 211 was welcome news and an enco uraging sign.  The EC urged again the United 
States to comply with its obliga tions under the TRIPS Agreement. 
 7. The representative of the Bolivarian Republic of Venezuela
 said that his delegation thanked 
Cuba for its statement, which it fully endorsed si nce, as it had stated on previous occasions, it 
considered Cuba's complaint regarding this matter to be legitimate.  His delegation had also taken 
note the status report submitted by the United Stat es. At previous meetings, the United States had 
mentioned that the US Administration was actively working to bring itself into compliance with the 
DSB's rulings and recommendations in all pending cases.   In light of this, his country had hoped to 
receive detailed information on the concrete effort s by the US authorities to comply with the Panel's 
recommendations.  The status report had dashed th is hope and demonstrated a complete lack of 
progress with regard to this issue.  His country ha d a systemic interest in this case and, therefore, 
reiterated its concern over this c ontinued failure to comply with the DSB's recommendations. This 
situation not only undermined the sovereignty of the DSB, but coul d also set a dangerous precedent 
which could adversely affect other Members in the future as well as jeopard ize the credibility of the 
WTO, in particular at a time when negotiations were under way to conclude a major round of trade 
negotiations.  His country, therefore, urged the Un ited States to show the political will necessary to 
find a solution which would be consistent with th e Agreements and fundamental principles of the 
WTO as well as satisfactory to the interested parties.  WT/DSB/M/232 
Page 4  
 
  8. The representative of Brazil
 said that his country wished to thank the United States for its 
status report and the statement made at the present meeting.  Based on systemic considerations, however, Brazil wished to express its concerns with  the protracted implementation process in this 
dispute.  Situations like the one in the present dispute were evidently not in harmony with the 
fundamental principle of prompt implementation.   Moreover, non-compliance situations lacking 
perspective of solution altered the carefully negoti ated balance of rights and obligations to the 
detriment not only of the complaining party but also to the whole Membership.  Therefore, Brazil urged the United States to take the necessary and urgent  steps to put an end to the violations found in 
this dispute.  
9. The representative of India
 said that her country wished to thank the United States for the 
situation report and the statement.  However, in vi ew of the systemic relevance of the issue, India 
renewed its concern.  As mentione d previously several times, India noted that there was no substantial 
change in the situation report.  India continued to  reiterate that the rulings and recommendations of 
the DSB were to be fully complied with.  India st rongly felt that to ensure effective resolution of 
disputes to the benefit of all Members, principles of prompt compliance was not only essential, but it 
kept the rules-based multilateral trading system credib le and vibrant.  India, therefore, called on the 
United States to take required steps to implement the relevant DSB rulings.  10. The representative of China
 said that his country wished to  thank the United States for its 
status report and the statement made at the present meeting.  However, it was regrettable that this 
status report was identical to the report submitted in April and did not contain any new information 
concerning when this matter would be resolved to  the satisfaction of the parties and other WTO 
Members.  Although Members were conscious of th e possible difficulties involved in implementation, 
the undue delay of full implementation of the DSB's rulings had caused systemic concerns about the 
functioning and efficiency of the dispute settlemen t system.  As provided for in Article 21.1 of the 
DSU, prompt compliance with recommendations or rulings of the DSB was essential to ensure 
effective resolution of disputes to the benefit of all Members.  Therefore, China again urged the 
United States to fully implement the decision of the DSB regarding this case as soon as possible.  
 11. The representative of Viet Nam
 said that his delegation was taking the floor in the DSB for 
the first time.  Like previous speakers, and afte r listening very carefully to the statements with 
rationale arguments made by other delegations, he wi shed to take this opportunity to register Viet 
Nam's concern regarding the systemic issue of im plementation of the decision of the DSB on the US 
Section 211.  The Appellate Body report, issued on 12 January 2002 and conse quently adopted by the 
DSB, had concluded that Section 211(a) and (b) of the US Omnibus Appropriation Act of 1998 
violated the national treatment and most-favoured-n ation obligations under the TRIPS Agreement as 
well as the Paris Convention for the Protection of In dustrial Property.  Members were aware of the 
fact that the United States had informed the DSB th at it would continue to work in order to bring 
Section 211 into conformity with its WTO obligati ons.  Thus, for whatever reason, the indefinite 
postponement of the DSB's rulings raised the question of the efficacy and credibility of the DSB and the multilateral trading system, setting a negative precedent that might affect other Members, especially developing countries, in particular rega rding issues related to fundamental WTO principles 
of national treatment and MFN.  Therefore, Viet Nam reiterated the request made by other Members 
that the United States implement the DSB's rulings  and recommendations in this dispute without 
further delay.  12. The representative of Bolivia
 said that, having once again heard the brief report by the United 
States and noting that no progress had been made to wards removing Section 211, Bolivia wished to 
express, once again, its concern.  This non-comp liance put into question the credibility of the 
multilateral dispute system and, once again, Bolivia wished to urge the United States to comply with 
the DSB's recommendations and rulings.   WT/DSB/M/232 
 Page 5 
 
 
  13. The representative of Nicaragua  said that her country wished to thank the United Sates for the 
status report submitted at the present meeting, however, the non-implementation of the DSB's 
recommendations and rulings continued to create systemic difficulties for Nicaragua.  As her 
delegation had previously stated, a nd as previous speakers had reiter ated, this non-compliance put into 
question the credibility and effectiveness of the dis pute settlement system and demonstrated a lack of 
coherence and equality in the application of intell ectual property rights.  Nicaragua hoped that the US 
Congress would very soon take the appr opriate measures in this dispute.  
 14. 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.54) 
 15. The Chairman
 drew attention to document WT/DS184/ 15/Add.54, 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.  16. The representative of the United States
 said that his country had provided a status report in 
this dispute on 10 May 2007, in accordance with Artic le 21.6 of the DSU.  As of 23 November 2002, 
the US authorities had addressed the DSB's recommendations and rulings with respect to the 
calculation of anti-dumping margins in the hot-rolled steel anti-dumping duty inv estigation at issue in 
this dispute.  Details were provided in document WT/DS184/15/Add.3.  The US Administration 
would work with the new Congress which had conve ned in January 2007 with respect to the 
recommendations and rulings of the DSB that had not already been addressed by the US authorities 
by 23 November 2002. 
 
17. The representative of Japan  said that his country acknowledged that a certain measure had 
been taken in November 2002 to implement the pa rt of the DSB's recommendations, as reported by 
the United States.  However, it was regrettable that while three and a half years had passed since then, 
the issue of implementation in this case still rema ined on the agenda of the DSB.  As Japan had 
repeatedly stated before the DSB, it believed that a full and prompt implementation of the 
recommendations and rulings of the DSB was essen tial for maintaining the credibility of the WTO 
dispute settlement system.  In this regard, Japan noted the statement made by the United States along 
with its latest status report in which the United St ates stated that the US Administration was working 
with the new US Congress to pass specific legislative amendments that would implement the DSB's recommendations and rulings.  Japan wished to re new its strong hope that the US Administration 
would accelerate its efforts to work with the US  Congress in order to come into full compliance 
without further delay.  18. 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.29) 
 19. The Chairman
 drew attention to document WT/DS160/ 24/Add.29, 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. 
 20. The representative of the United States
 said that his country had provided a status report in 
this dispute on 10 May 2007, in accordance with Ar ticle 21.6 of the DSU.  The US Administration 
would work closely with the new US Congress and conti nue to confer with the EC, in order to reach a WT/DSB/M/232 
Page 6  
 
  mutually satisfactory resolution of this matter.  In this regard, the United States appreciated the  EC's 
statement made at the 24 April 2007 meeting that it was open to working with the United States to seek a mutually satisfactory solution to this dis pute.  The United States shared the EC's goal of 
discussing how such a solution could be achieved.  
21. The representative of the European Communities
 said that the EC's position regarding this 
dispute was well known, namely, the EC wished to see the law made conform to the WTO obligations 
of the United States.  The EC had received indication that the new US Congress might be more receptive to the defence of TRIPS-derived rights.  As already stressed in respect of the Section 211 
dispute, long periods without concrete action to  implement the recommendations undermined the 
authority of the TRIPS Agreement.  This damaged the interests of the whole industry to the benefit of 
a limited group.  The EC remained prepared to work with the United Stat es to seek a mutually 
satisfactory solution to this dispute and hoped that a solution could be found in the near future.  22. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
 (d) United States – Laws, regul ations and methodology for calculating dumping margins 
("Zeroing"):  Status report by the United States (WT/DS294/20/Add.3) 
 23. The Chairman
 drew attention to document WT/DS294/ 20/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 laws, regulations and me thodology for calculating dumping margins. 
 24. The representative of the United States
 said that his country had provided a status report in 
this dispute on 10 May 2007, in accordance with Artic le 21.6 of the DSU.  As stated previously, the 
US Department of Commerce continued to work towards completion of a determination in one 
investigation in which the respondent had alleged a clerical error which it had requested be corrected, 
having completed implementation with respect to the other matters covered by this dispute. 
 25. The representative of the European Communities
 said that, at the previous regular DSB 
meeting, the EC had explained in detail why the US actions taken to implement the DSB's ruling in 
DS294 had not been satisfactory, and, in the EC's view, had failed to bring the United States into 
compliance with its WTO obligations.  The EC w ould not reiterate its de tailed explanations and 
would refer Members to the statement made by the EC  at the previous regular DSB meeting.  At the 
present meeting, it sufficed to say that the Unite d States had not taken any actions correcting the 
shortcomings in its implementation of the DS294 ruling.   In fact, in the mean time, the United States 
had made matters worse.  On 30 April 2007, the US  Department of Commerce had announced that the 
re-determinations made in respect of part of the 15 original investigations condemned in this dispute 
would take effect only as from 23 April 2007, in complete disregard of the 9 April 2007 implementation deadline.  In addition, the Unite d States was still refusing to revoke the order on 
stainless steel sheet and strip from Italy, in spite of clear evidence that the corr ection of an elementary 
arithmetical mistake would take the non-zeroed margin below de minimis .  The EC was currently 
analysing the situation and would take the appropriate  steps to protect its rights should no satisfactory 
solution be brought to the outstanding issues.  In this respect, the EC and the United States had concluded, on 4 May 2007, a sequencing agreemen t.  This agreement defined the procedures to 
review the measures taken or not taken by the Un ited States and to request authorization from the 
DSB to suspend the application of concessions to the United States.  
 
26. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/232 
 Page 7 
 
 
  2. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
 
(a) Statements by Canada, the European Communities and Japan 
 
27. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Canada, the European Communities and Japan.  He then invited the respective representatives to 
speak.  28. The representative of Canada
 said that while his country appreciated the steps the United 
States had taken towards implementing the rulings a nd recommendations in this dispute, the United 
States had only prospectively repealed the Byrd  Amendment.  Anti-dumping and countervailing 
duties collected up to 30 September 2007 could still be disbursed to US producers under the terms of 
this legislation.  As such, Canada believed that th e US claim – made in its last status report from over 
a year ago – that it had "taken the actions necess ary to implement the rulings and recommendations" 
in this dispute was not accurate.  Canada, ther efore, called on the United States to resume the 
submission of status reports and to repeal the Byrd Amendment.  29. The representative of the European Communities
 said that, at the previous regular DSB 
meeting, the United States had, once again, asser ted having implemented the recommendations and 
rulings of the DSB in this dispute.  The EC recalled that the CDSOA had been condemned for 
transferring the collected anti-dumping and counte rvailing duties to US companies in breach of 
Article 18.1 of the Anti-Dumping Agreement and Ar ticle 32.1 of the SCM Agreement.  The United 
States had to stop those transfers by 27 December 2003.  Yet, in October 2006, the United States had made the highest distribution thus far, disbursi ng to US companies more than US$380 million.  The 
EC was still waiting for an explanation by the United States as to how this reconciles with its 
statement that it had implemented the DSB's ruling.   In fact as long as the repeal of the Byrd 
Amendment would not produce effect and disbursemen ts continued because of the transition clause, 
the United States would not be in compliance.  Th erefore, the EC wished to ask again the United 
States if and what steps it intended to take to  stop the transfer of anti-dumping and countervailing 
duties to its industry.  The EC 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 on implementation in this 
dispute. 
 30. The representative of Japan
 said that at previous DSB meetings, the United States had 
repeatedly claimed that by enacting the Deficit Reduction Act of 2005, it had taken necessary actions 
to implement the DSB's recommendations and rulings and that it was not necessary to submit a status 
report under Article 21.6 of the DSU.  Japan ac knowledged that the Deficit Reduction Act of 2005, 
which had formally repealed the CDSOA, was a si gnificant step forward in the right direction.  
However, the fact remained that, under the trans itional clause, the CDSOA was still in force and the 
illegal distribution would continue for years to come .  The United States had never disputed this fact, 
but maintained that the issue was resolved.  Japan failed to see how the United States could take such 
a position.  Japan, once again, called on the United States to take the necessary steps to immediately 
stop the illegal distribution and repeal the CDSOA not  just in form but in substance.  Japan also 
reiterated that the United States was under obligation to provide the DSB with a status report pursuant 
to Article 21.6 of the DSU.  Japan reserved all its rights under the DSU until the United States fully 
complied with the recommendations.   
31. The representative of Brazil
 said that his country thanked Canada, the EC and Japan for 
bringing this matter, once again, to the DSB's attent ion.  In sharing their views that the United States 
had no basis to claim full compliance, Brazil still expected the United States to present a reasoned 
explanation as to why the mere passing into law of  a prospective, delayed repeal of the WTO-illegal 
measure, would have brought the United States in to conformity with the US obligations under the WT/DSB/M/232 
Page 8  
 
  multilateral rules.  Meanwhile, WTO Members, and in  particular the co-complainants, should not be 
deprived of any rights under the DSU.  32. The representative of China
 said that his country thanked and supported Canada, the EC and 
Japan for raising this matter before the DSB at the present meeting.  China appreciated the efforts of 
the United States to implement the DSB's rulings a nd recommendations in this dispute and welcomed 
the repeal of the CDSOA.  Howeve r, China shared the view expressed  by previous speakers that the 
implementation issue had not been resolved in this dispute within the framework of Article 21 of the 
DSU.  It was the obligation of a Member to fu lly and promptly implement the DSB's rulings and 
recommendations, which was critically important to the credibility and efficiency of the dispute 
settlement system.  Therefore, Chin a wished to join previous speaker s in urging the United States to 
comply fully with the DSB's rulings.  33. The representative of India
 said that her country wished to thank Canada, the EC and Japan 
for raising this issue before the DSB once again.  India appreciated the steps the United States had 
taken.  However, India expressed concern that the United States was continuing to disburse anti-
dumping and countervailing duties to its industry.  India shared the views of Canada, the EC and 
Japan that the "issue" was not resolv ed in this dispute within the meaning of Article 21. 6 of the DSU.  
India, therefore, urged the United States to inform the DSB of the steps it prop osed to take to ensure 
full compliance, and reiterated its request that the United States resume submitting status reports in 
this dispute. 
 
34. The representative of Thailand  said that his country wished to join previous speakers in 
thanking Canada, the EC, and Japan for bringing this  matter before the DSB once more.  As noted in 
previous DSB meetings, Thailand remained disap pointed at the United States' continued illegal 
disbursement of funds under the CDSOA.  Thailand also remained disappointed  at the Unites States' 
continued lack of status reports on its outstanding implementation in this  dispute.  Therefore, Thailand 
again urged the United States to cease its WTO-inc onsistent disbursements, to repeal the Byrd 
Amendment with immediate practical effect, and to resume providing status reports until such actions 
were taken and this matter had been fully resolved.  35. The representative of the United States
 said that as the United States had already explained at 
previous DSB meetings, the US President had signed the Deficit Reduction Act into law on 
8 February 2006.  That Act included a provisio n 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.  So me Members had asserted that the United States 
would not have implemented the DSB's recommendations and rulings until the last CDSOA 
distribution was made.  As the United States had stated  previously, such questions were for panels to 
decide.  Finally, with respect to comments regardi ng further status reports in this matter, those 
Members who had inscribed this item on the agenda of the present meeting were, of course, free to do so.  However, 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. 
 
36. The DSB took note
 of the statements.  
 
3. United States – Continued existence and application of zeroing methodology 
 (a) Request for the establishment of a panel by the European Communities (WT/DS350/6) 
 37. The Chairman
 drew attention to the communica tion from the European Communities 
contained in document WT/DS350/6, and invited the representative of the European Communities to 
speak.  WT/DSB/M/232 
 Page 9 
 
 
   
38. The representative of the European Communities  said that this was the second time that the 
EC needed to bring the issue of zeroing by the Unite d States to a WTO panel.  This time, the request 
concerned the use of zeroing by the United States in 38 different specific measures taken since the initiation of the DS294 dispute.  The details of the EC 's claims were contained in the panel request to 
which the EC had referred.  The A ppellate Body had maintained a cons istent and coherent line on this 
issue, confirming on several occasions that zeroing ran foul of fundamental obligations of the Anti-Dumping Agreement which were to  establish dumping in respect of an exporter and a certain product 
and to conduct a fair comparison between the expor t prices and normal value.  All these decisions had 
made clear that the practice of zeroing whether in or iginal investigations or in reviews, whether in 
transaction-to-transaction comparisons or in weight ed-average-to-weighted-a verage comparisons was 
per se WTO-incompatible.  The EC would have prefe rred to avoid another dispute with the United 
States on this subject.  After the general condemnation of zeroing per se  in the case brought by Japan 
in January 2007, the EC was hopeful to find a mutually acceptable solution with the United States.  Unfortunately, unlike the EC after the ruling in the case:  "Bed Linen", the United States had shown a 
clear reluctance to draw the inevitable consequen ces of these earlier decisions, and even to stop the 
use of zeroing as required by the DSB's rulings in the DS294 dispute.  In the present dispute, it had become rapidly apparent that the United States woul d not offer any acceptable solution.  This left the 
EC no choice, but to move to the next stage by requesting at the present meeting the establishment of 
a panel on the continued existence and app lication of zeroing by the United States. 
 
39. The representative of the United States
 said that, as his delegation had previously noted, the 
United States was no longer performing averag e-to-average comparisons in anti-dumping 
investigations without offsets.  In addition, the United States was considering the issue of zeroing in 
assessment reviews in the context of a separate dispute.  The reasonable period of time in that dispute would end on 24 December 2007.  The EC's panel request was thus premature, and the United States 
could not agree to the establishment of a panel at the present meeting.  The United States would also 
note that the request included a number of assessment reviews and sunset reviews that had not been 
consulted upon.  40. The DSB took note
 of the statements and agreed  to revert to this matter. 
 4. United States – Measures affecting the cross-border supply of gambling and betting 
services:  Recourse to Article 21.5 of  the DSU by Antigua and Barbuda 
 
(a) Report of the Panel (WT/DS285/RW) 
 
41. The Chairman
 recalled that at its meeting on 19 July 2006, the DSB had decided, in 
accordance with Article 21.5 of the DSU, to refer to the original Panel the matter raised by Antigua 
and Barbuda concerning the implementation by the United States of the recommendations and rulings 
of the DSB pertaining to this dispute.  The Report of the Panel contained in document WT/DS285/RW had been circulated on 30 March 2007 as an unrestricted document.  The Panel 
Report was now before the DSB for adoption at the request of Antigua and Barbuda.  This adoption 
procedure was without prejudice to the right of Members to express their views on the Panel Report. 
 42. The representative of Antigua and Barbuda
 said that his delegation was pleased to 
recommend that the DSB adopt the Report of the Pa nel, which had been circulated to Members on 
30 March 2007, in connection with Antigua and Bar buda's recourse to Article 21.5 of the DSU in its 
ongoing dispute with the United States over the cr oss-border provision of gambling and betting 
services.  His delegation was profoundly grateful to th e Panel, not only for its hard work, but also for 
the clarity and excellence of its Report.  As most  Members were no doubt aware, recent developments 
had somewhat overshadowed the release of this fine Report, but before addressing those developments he would discuss a few important ruli ngs made by the compliance Panel in this case.  WT/DSB/M/232 
Page 10  
 
  While, unfortunately, the previous reports in this di spute had left some considerable uncertainty and 
ambiguity in their respective wakes, such was not the case with this Report.  He did not think that 
there remained any room to misconstrue or obfuscat e the conclusions of this  Report.  And for that 
alone, his delegation was particularly thankful.  In its Report, the Panel had made a number of 
important systemic rulings.  First, the Panel had a ppropriately ruled that a "measure taken to comply" 
for purposes of Article 21.5 of the DSU must involve  some change over circumstances that existed 
when the original rulings and recommendations in  a dispute had been adopted by the DSB.  The 
United States had asserted that the very measures f ound inconsistent with its WTO obligations in the 
original proceeding, unchanged, were themselves "m easures taken to comply," essentially arguing that 
the rulings and recommendations of the DSB were in error. 
 
43. Second, the Panel had ruled that a party which had lost on a key element of its case in the 
original proceeding, whether as the result of a failure  to meet its burden of proof or otherwise, could 
not use an Article 21.5 proceeding to reargue its fail ed case.  His delegation believed that this finding 
was particularly important, recognizing the need fo r finality of panel and Appellate Body reports to 
avoid what Japan so aptly expressed as a "potentially  endless loop of litigation".  In its consideration 
of the United States' plea for a " second chance", the Panel had crisply disposed of the often-stated 
claim of the United States that it had not actually lost on the GATS Article XIV defence.  The Panel had correctly observed that the defence had two requ ired elements, and if either or both failed, the 
defence failed in its entirety.  Having failed, the United States was not entitled to the defence and thus 
was required to bring its offending measures into c onformity with its obligations under the GATS.  
Much to his delegation's satisfaction, the Panel had also ruled that, notwithstanding its finding that the 
United States – having done nothing – remained out of compliance with the DSB's rulings, the Panel 
would express its views on the various arguments of the parties made during the course of the proceeding.  First, in assessing all of the "new  evidence and argumentation" on its Article XIV 
defence submitted by the United States in the complia nce hearing, the Panel had concluded that even 
if the United States was entitled to a "second chance" to  meet its burden of proof, it had still failed to 
meet that burden.  So, the Article XIV defence failed yet again.  44. What was truly gratifying from his delegati on's perspective, however, was the express 
recognition by the Panel of three particular matters  that it had urged upon the earlier Panel and the 
Appellate Body, but which had unfortunately been  overlooked.  First, th is Panel had acknowledged 
that the United States had a flourishing domestic, remote gambling industry;  that a number of US 
states licenced and regulated remote gambling operators that offered services in many ways indistinguishable from the services offered to Amer ican consumers by Antiguan operators.  Second, 
the Panel had observed that despite claims of th e United States that these domestic operations were 
"illegal", the United States had chosen to undertake a prosecutorial crusade solely against foreign 
operators, leaving the sanctioned domestic operators  untouched, unthreatened and free to run their 
businesses in the ordinary course.  45. Third, this Panel had realized what the others be fore it had completely missed that the federal 
measures at issue were discriminatory on their  face, prohibiting only the cross-border provision of 
gambling and betting services and leaving unaffected wholly-intrastate gambling.  As the entire US 
defence under Article XIV of the GATS hinged upon  the supposed evils of "remote" gambling vis-à-
vis "non-remote" gambling, this critical finding in essence made it impossible for the United States to 
successfully mount an Article XIV defence in respec t of remote gambling.  The crossing of a border, 
alone, could not logically form a basis for rejecting services otherwise identical to those that did not cross a border.  Either "remote" was bad in every ca se or it was not.  Finally, the Panel had also taken 
note of legislation passed by the US Congress in  late 2006, which effectively underlined the 
discrimination in the application of United Stat es laws towards remote gambling.  This law 
criminalized financial transactions for "unlawful internet gambling", a definition which covered all 
foreign remote gambling services while providing capacious exceptions for a number of domestic 
remote gambling opportunities.  WT/DSB/M/232 
 Page 11 
 
 
   
46. As pleased as his delegation was by this Panel Report, it was deeply saddened by the 
announcement by the United States on 4 May 2007 that it intended to withdraw its commitment for gambling and betting services under Article XXI of the GATS.  This astounding and unprecedented 
action not only ran contrary to the object and purpose of the GATS, the DSU and the other WTO 
Agreements, but also boded very poorly for the fu ture of dispute resolution by small, developing 
countries at the WTO.  In the first place, it was not  a little ironic that in the face of the concept of 
liberalization written into the GATS and the objec tives of the Doha Round, the United States would 
be taking action at this time directly contrary to those objectives.  It was difficult to see how the 
United States could on the one hand encourage and perhaps insist that other Members expand their 
commitments in services while simultaneously erecting a new barrier to trade in services from other 
Members.  This was particularly so when one co nsidered that the US component of the remote 
gambling industry was estimated to be in excess of US$10 billion annually.  47. His delegation also did not believe that this ty pe of action was a suitable tactic in dispute 
resolution.  There was something clearly wrong with  the concept that after a long, difficult struggle 
covering years of dispute resolution at the WTO, an offending Member could ultimately avoid the consequences of its loss by withdrawing the commitme nt that had given rise to the claim in the first 
place.  And, his delegation intended to actively resist  this effort by the United States.  As far as 
Antigua and Barbuda was concerned,  this dispute had been resolved and the United States remained 
obligated to comply.  If the United States wanted to try to shut out potential future liability to other 
Members, it was welcome to try.  But this dis pute was settled and Antigua and Barbuda was entitled 
to and would be expecting market access.  48. His delegation noted that in its public stat ements regarding the proposed withdrawal, the 
United States was apparently trying to limit the potential impact of its action, by stressing it was 
"clarifying" its schedule, rectifying a "mista ke" that no other Members could have "reasonably 
expected" to result in a commitment to the cro ss-border provision of gambling and betting services 
due to "strong domestic laws against" gambling servi ces.  Of course, this assertion was untenable, 
particularly to the 100 or more of fellow Member s who had been able to exclude gambling from their 
respective schedules under the GATS.  All also und erstood that WTO Members were entitled to rely 
on the commitments made in the schedules of ot her Members without having to evaluate those 
commitments in light of domestic law. Even if it were, however, a cursory look at United States law 
and its domestic market would support exactly the c ontrary conclusion with respect to the voracious 
US appetite for and interest in remote gambling.  The United States was the world's largest consumer 
and exporter of gambling services.  Also, as the Artic le 21.5 panel in this case recognized, the United 
States had a large, sanctioned domestic industry.  Wh ile the withdrawal of a commitment might be at 
least understandable if the United States had posse ssed a strongly anti-gambling culture, this was 
certainly not the case here.  The unavoidable conclu sion was that the United States sought with this 
action to erect a trade barrier to foreign compe tition in order to protect and enhance its own, 
flourishing domestic industry.  49. His delegation noted as well that if the United St ates believed it had made the commitment in 
error, it would have made sense to inform An tigua and Barbuda and other WTO Members much 
earlier than at the end of this hard-fought dispute.   Back in 1997, senior US Administration officials 
had met with then Director of Offshore Gaming to discuss suggestions as to how to improve our 
regulatory scheme and offer assistance in Antigua gover nment's efforts to supervise the industry.  If a 
"mistake" had been made, why not tell us then?  He believed that all knew the answer to that question.  
What was particularly disturbing was that the United States was proposing this unprecedented step 
without having made any attempt whatsoever to comp romise this dispute or to enter into any kind of 
settlement with Antigua and Barbuda.  In fact, desp ite repeated pleas to the United States to do so, it 
had never engaged with Antigua and Barbuda in any discussions with a view to settlement or WT/DSB/M/232 
Page 12  
 
  compromise.  The only solution Antigua and Barbuda had ever been offered by the United States was 
for Antigua and Barbuda to abandon its claim and go away.  50. In a system that was replete with sincere refe rences to good faith, fair  dealing and cooperative 
resolution of disagreements, it was this failure to engage with Antigua and Barbuda at all that was 
most troubling.  His delegation was unable to understand why there was no effort to find some middle 
ground.  It was and remained ready to find a fair a nd reasonable solution.  But it needed the other side 
to show up to do so.  Antigua and Barbuda had been  told simply that the United States "cannot change 
its laws" and "cannot stop enforcing its laws".  On e might be excused for expecting the United States 
to do just that.  Indeed, was that not what was re quired in many if not most circumstances when a 
Member was asked to bring its measures into co mpliance with recommendations and rulings of the 
DSB?  51. This action, particularly in light of the very  difficult, expensive and time-consuming process 
that WTO dispute resolution required, during all of which the United States had been aggressively 
seeking to destroy his country's industry through pr osecution, threat of prosecution and interference 
with financial instruments and other normal means of commerce, reinforced Antigua's grave concern 
over whether WTO dispute resolution was actually a viable alternative for small countries.  As the 
United States had apparently decide d it would not comply with the DSB's rulings in this case, his 
country was left in a position of assessing what real re course was left.  Encouraged in large part by the 
United States itself back in the mid-1990s, his governme nt had invested heavily in the development of 
this industry over more than a decade.  A very si zable portion of its slender resources had been used 
to develop, regulate, supervise and legitimize this i ndustry.  Such an investment did not come lightly, 
nor was it easily replaced or replicated.  52. Antigua and Barbuda did not think that this as sault on the system could be abided.  Allowing 
this tactic to succeed and not only prevent this sm all country from reaping the benefits it was led to 
expect from WTO dispute resolution, but also en abling the United States to erect a high and firm 
barrier to international competition was in no one' s best interest.  His country was resolved to 
continue the process as far and for as long as it could be  pursued.  It intended to put this system to the 
full and final test.  At the same time, his delegation asked other WTO Members to let their views on this be known.  For starters, it strongly enc ouraged all member States to submit a claim for 
compensatory adjustment from the United States as a result of the proposed withdrawal of the 
commitment.  Article XXI of the GATS allowed any Member who might be affected by the withdrawal to submit a claim for compensation.  As  every claim was generally prospective, it should 
not matter whether a Member had a current industry to sustain a claim.  Not only did his country think that Members should press claims for compensatory ad justments as a matter of economic self-interest, 
but it also believed it important that the pro cess was made as difficult as possible for the United 
States.  His country in fact sincerely hoped that the United States would realize that a withdrawal of 
the commitment was in no one's long term interest a nd reversed this ill-advised course of action.  His 
country would also encourage other Members who were opposed to this action to express themselves 
to the United States delegation and publicly.  While this case might involve services that some 
Members might not choose to offer or consume, at the end of the day the commodity was irrelevant.  
What was relevant were the systemic issues raised by  this dispute.  To a large extent his country had 
been fighting these issues alone over the past few years.  His country would hope that others might 
add their voices to the chorus if the WTO was to reach its potential as a truly fair and balanced 
international trading system.  He than thanked th e Chairman and the DSB Members for their attention 
to this matter of most urgent concern to his country.  His country again recommended the adoption of 
the Panel Report and looked forward to support and encouragement as his country pressed on. 
 53. The representative of the United States
 said that his delegation wished to begin by thanking 
the members of the compliance Pane l and the Secretariat for their ha rd work throughout the course of 
this dispute.  The United States also wished to note that it was pleased that the Panel had recognized  WT/DSB/M/232 
 Page 13 
 
 
  that, depending on the nature of the DSB's recomme ndations and rulings, there may be circumstances 
in which compliance could be achieved without changi ng the text of a measure at issue, for example 
where the factual or legal context for that measure had changed.  This dispute involved the regulation 
of cross-border gambling.  In the United States, as well as in many other countries, gambling was 
viewed as an issue of public morals and public orde r that included the protection of children and other 
vulnerable groups.  As a result, gambling was highly regulated.  The threshold issue in this dispute 
was whether the United States had any obligatio n under the GATS with respect to cross-border 
gambling.  In particular, the United States schedule did not even include the word "gambling", and the 
United States believed that its schedule was suffici ently clear in not covering gambling services.  The 
United States had never intended such a commitment. 
 
54. Indeed, in the course of the dispute, the United States had emphasized that its interpretation of 
its own schedule was supported, among other things, by the circumstances surrounding the negotiations.  In particular, the United States had explained that under fede ral criminal laws, the 
international transmission of wagers by means of wi re transmission had been unlawful since at least 
the early 1960s.  Accordingly, the United States had explained that no one involved in the Uruguay 
Round negotiations in the mid-1990s could possibly ha ve thought that the United States would make a 
market access commitment on cross-border gambli ng.  No Member had suggested otherwise during 
the Round, nor had any Member raised the possibilit y that the United States would include a gambling 
commitment in its schedule.  Likewise, most other major WTO economies had not included cross-
border gambling in their schedule of services commitments.  In sum, cross-border gambling services 
had not been an issue of negotiation during the Uruguay Round. 
 55. The first time that any WTO Member had ever  raised the possibility that the US GATS 
schedule covered cross-border gambling was when An tigua and Barbuda had in itiated this dispute in 
2003 – ten years after the US schedule had been draf ted.  The original Panel had found that the US 
schedule had not been drafted with sufficient cl arity to ensure that gambling services had been 
excluded from the broad category of "recreational services".  The United States would emphasize, however, that the Panel had also explicitly acknowle dged that the US coverage of gambling services 
appeared to be unintentional.  The United States reite rated, because it was an important point, that the 
Panel had appreciated that the United States did not intend to cover gambling services in its schedule of services commitments. 
 
56. The Appellate Body had upheld the Panel's construction of the US schedule, but on different 
grounds.  Finding that the US schedule was ambiguous  on its face, the Appellate Body had looked to 
a UN system of services classification for an interpretation of the coverage of "recreational services".  It was important to note that although many Me mbers had used that system as the basis for 
constructing their GATS schedules, the United States  had not.  Despite the unexpected findings that 
the United States GATS schedule had extended to cr oss-border gambling, the United States believed 
that it had other valid defences to the claims raised  by Antigua.  And in fact, the Appellate Body had 
agreed with the United States that the US federal st atutes at issue in the dispute were "measures ... 
necessary to protect public morals or to maintain pub lic order" within the meaning of Article XIV(a) 
of the GATS.  However, the Appellate Body had also found that on one narrow issue, the United 
States could not meet the requirements of the GA TS Article XIV chapeau.  In particular, the 
Appellate Body had found that the United States ha d not shown that US le gal prohibitions applied 
equally to foreign and domestic s uppliers of remote betting services for horse racing.  Unfortunately, 
the United States had not been able to persuade the Article 21.5 Panel that – as the US Department of 
Justice had long maintained – US gambling laws governing horse racing applied equally to foreign 
and domestic suppliers.  Given that this was largel y a factual issue, the United States had decided not 
to appeal the Panel's findings, a nd instead to accept the result.   
 
57. The United States was thus left with a finding of  GATS-inconsistency with respect to an area 
of services regulation that it had never intended to be included in its GATS schedule, and that was WT/DSB/M/232 
Page 14  
 
  viewed in the United States as an issue of public mo rality and public order, i nvolving the protection of 
children and other vulnerable groups, as opposed to an issue of international trade.  Accordingly, the 
United States had decided to invoke the established multilateral procedures addressed to situations in 
which a Member believed it must modify its GATS schedule of services concessions.  In particular, on 4 May 2007, the United States had initiated the pr ocedure provided for under Article XXI of the 
GATS.  In this way, the United States intended to bring its GATS obligations into conformity with a 
long-standing and well-recognized public policy.  As  provided under those procedures, this matter 
would be discussed at the next meeting of the Council for Trade in Services.  58. In sum, the United States accepted the resu lts of the dispute settlement process, which 
included a finding that the United States had not show n that its gambling laws were consistent with 
WTO rules.  In order to bring the United Stat es into compliance and to resolve this dispute 
permanently, the United States had decided to inv oke the procedures provided for under the GATS to 
modify the schedule of US commitments.  This  modification would ensure that the US GATS 
schedule reflected the original US intent of excl uding gambling from the scope of US commitments.  
 
59. The representative of the European Communities
 said that the GATS allowed WTO Members 
to regulate or ban internet gambling services for r easons of public policy, including morality and 
consumer protection.  However, th is had to be done in a non-discriminatory fashion.  This was what 
the United States had refused to do, as established by the Appellate Body and now confirmed by the 
compliance Panel to be adopted at the present meeting.   The EC regretted this.  The EC had hoped for 
a non-discriminatory solution, with the same rules a pplying to US and foreign companies.  The United 
States had now notified its intention to modify its commitment on "Other Recreational Services" in its 
GATS Schedule of Specific Commitments, by removing gambling and betting services from the sub-sectoral coverage.  This showed that the United Stat es was not willing to bring the relevant legislation 
into line with the US current GATS commitments which it, therefore, needed to modify.  Article XXI 
of the GATS was the right procedure in this context.  The EC wished to thank the Panel for the useful 
guidance that it had provided with regard to what was a "measure taken to comply" with the relevant 
recommendations and rulings.  This should help a ll Members ensure prompt and adequate compliance 
with the rulings of the DSB with regard to any m easures that had been subject to dispute settlement. 
 60. The representative of Brazil
 said that his country had not been a third party in the Panel 
proceedings.  Brazil would like, however, to highli ght some systemic issues arising out of the present 
dispute.  First, he wished to thank the Panel a nd the Secretariat for their work.  The findings and 
conclusions arrived at were certainly helpful for Members to better understand the scope of such a 
fundamental stage of the dispute settlement pro cess as the implementation phase.  As set out in 
Article 21.5 of the DSU, the compliance panel in this dispute had been established because there was 
a disagreement between the parties to the dispute as to  the existence of measures taken to comply with 
the relevant DSB's rulings and recommendations.  Had there been no such disagreement, there would 
be consequently no reason for the DSB to start a compliance procedure.  The Panel's findings had 
shown that this should have been the case.  The Pa nel had found that the three US federal criminal 
statutes the United States had alleged to be the measures taken to comply "were measures at issue in the original proceeding and were the subject of th e recommendations and rulings of the DSB in this 
dispute".
1  More importantly, the Panel had concluded th at:  "[t]here has been no change to any of 
these three measures since the origin al proceeding.  There has been no change in the application of 
these three measures, or even their interpretation, since the original proceeding.  There is no evidence 
of any changes in the factual or legal background bearing on these measures or their effects since the 
original proceeding that might have brought them in to compliance.  This indicates that they remain 
inconsistent with the United St ates' obligations under the GATS."2 
                                                      
1 "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services", 
Panel Report (WT/DS285/RW, of 30 March 2007), para. 6.25. 
 2 Idem, para. 6.27.   WT/DSB/M/232 
 Page 15 
 
 
   
61. The Panel had gone on to undersco re that "[t]he United States' position in this compliance 
proceeding is also at odds with its earlier decision to seek a reasonable period of time in which to 
comply with the recommendations and rulings of the DSB".3  As Members recall, the United States 
had asked that the Arbitrator under Article 21.3(c) of the DSU to "determine the 'reasonable period of 
time' for implementation of the recommendations a nd rulings of the DSB in this dispute to be 
15 months from the date of adoption by the DSB of  the Panel and Appellate Body Reports, until the 
end of July 2006".4 
 62. Before the RPT Arbitrator, the United States had asserted that such a period would be 
"consistent with the periods that have been determined in previous  arbitrations under Article 21.3(c) 
of the DSU for implementation by legislative me ans, which is how the United States intends to 
implement the recommendations and rulings of the DSB in this case".
5  The United States, as recorded 
in the Arbitrator's Award, had emphasized that "t he only means of implementation that will achieve 
the necessary clarification is legislative means".6  The Arbitrator accepted this consideration as one of 
the relevant particular circumstances to be take n into account in his assessment.  In light of these 
statements by the United States, it was remarkable that, in its status report of 11 April 2006, the 
United States had claimed full compliance with the DSB's recommendations7, whereas no legislative 
action had been taken within the re asonable period of time determined by the Arbitrator.  It should be 
noted that, during the RPT arbitration, the United States had argued that implementing action by the 
Executive Branch would not be sufficient to "achieve  the requisite clarity in the relationship between 
the relevant statutes".8  More surprisingly, the United St ates, while entirely conscious of these 
circumstances, had taken the decision to disagree with Antigua and Barbuda, and prolonged litigation.  
Brazil was glad that the Panel had strongly disag reed with the US views on what a compliance 
procedure was meant for.  
63. Brazil also wished to take this opportunity to share its systemic concerns about the 
implications of the process of modification of th e US schedule under the GATS for the credibility of 
the dispute settlement system.  Brazil did not ques tion the right conferred by Article XXI of that 
Agreement.  Nor it prejudged the final result of this  process.  Brazil sincerely hoped that this process 
would end up accommodating satisfactorily all the aff ected Members, and in particular Antigua and 
Barbuda, which had spent a sizeable amount of res ources and time to have its views confirmed – 
clearly and more than once.  But such a successf ul result depended on the United States' ability to 
contemplate the other Members' legitimate right to be duly compensated for the change in its services 
schedule.  64. In any event, it was clear that  the solution preferred by the DSU – which could only be 
reinforced after years of litigation – was that a Me mber found to be applying an inconsistent measure 
remove the source of such illegality, as indicated in  Article 3.7 of the DSU.  The US move under the 
GATS in this case would eventually produce some so lution, but not the solution envisaged in that 
provision.  In addition, Brazil still had to be convinced that an essen tially bilateral approach to the 
implementation of the DSB's recommendations woul d not undermine the rules-oriented approach 
                                                     
 
3 "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services", 
Panel Report (WT/DS285/RW, of 30 March 2007), para. 6.31. 
4 "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services", 
Award of the Arbitrator under Article 21.3(c) of the DSU (WT/DS285/13, of 19 August 2005), para. 6. 
5 Idem, para. 7. 
6 Idem, para. 37. 
7 "United Sates – Measures Affecting the Cross-Border Supply of Gambling and Betting Services", 
Status Report by the United States (WT/DS285/15/Add.1, of 11 April 2006).  See also WT/DSB/M/210, para. 34. 
8 Idem, para 9. WT/DSB/M/232 
Page 16  
 
  enshrined in the DSU.  Moreover,  Brazil was still to be convinced  that developing countries that 
might decide to withdraw or modify concessions in their schedules as a solution to disputes would 
have the ability to persuade the developed count ry Members to agree with such an outcome.  
 65. The representative of India
 said that her delegation wished to thank the previous speaker and 
agreed with the views expressed.  India also had not participated as a third party in this dispute.  
However the systemic issues arising out of this  dispute, the findings and conclusions in these 
proceedings, would certainly help Members to unde rstand the scope of such a fundamental stage of 
the dispute settlement process at the implementati on phase.  Since there was a disagreement between 
the parties to the dispute as to the existence of measures taken to comply with the relevant DSB's 
recommendations, the compliance Panel had been est ablished under Article 21.5 of the DSU.  The 
Panel had found that the three US federal criminal statutes the United States had alleged to be the 
measures taken to comply "were measures at issue in  the original proceeding and were the subject of 
the recommendations and rulings of the DSB in this dispute".9  More importantly, the Panel had 
concluded that "[t]here has b een no change to any of these th ree measures since the original 
proceeding.  There has been no change in the a pplication of these three measures, or even their 
interpretation, since the original proceeding.  Ther e is no evidence of any changes in the factual or 
legal background bearing on these measures or their e ffects since the original proceeding that might 
have brought them into compliance.  This indicat es that they remain inconsistent with the United 
States' obligations under the GATS".10 
 
66. The Panel had gone on to undersco re that "[t]he United States' position in this compliance 
proceeding is also at odds with its earlier decision to seek a reasonable period of time in which to 
comply with the recommendations and rulings of the DSB".11  As Members recalled, the United 
States had asked that the Arbitrator under Article 21.3(c) of the DSU to "determine the 'reasonable 
period of lime'- for implementation of the-recommendations and rulings of the DSB in this dispute 
to be 15 months from the date of adoption by the DSB of the Panel and Appellate Body Reports, 
until the end of July 2006".12  
 67. Before the RPT Arbitrator, the United States had asserted that such a period would be 
"consistent with the periods that have been determined in previous  arbitrations under Article 21.3(c) 
of the DSU for implementation by legislative me ans, which is how the United States intends to 
implement the recommendations and rulings of the DSB in this case".
13  The United States, as 
recorded in the Arbitrator's Award, had emphasize d that "the only means of implementation that will 
achieve the necessary clarification is legislative means".14   The Arbitrator had accepted this 
consideration as one of the relevant particular circumstances to be taken into account in his 
assessment. 
 
68. In light of these statements by the United States,  it was remarkable that, in its status report to 
the DSB of 11 April 2006, the United States had claimed full compliance with the DSB's 
recommendations,15 whereas no legislative action had been take n within the reasonable period of time 
determined by the Arbitrator.  It bore noting that, during the RPT arbitration, the United States had 
                                                      
9 "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services", 
Panel Report (WT/DS285/RW, of 30 March 2007), para. 6.25. 
10 Idem, para 6.27. 
11 Idem, para 6.31. 
12 "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services", 
Award of the Arbitrator under Article 21.3(c) of the DSU (WT/DS285/13, of 19 August 2005), para. 6. 
13 Idem, para. 7. 
14 Idem, para 37. 
15 "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services" 
Status Report by the United States (WT/DS285/15/Add.1, of 11 April 2006).  See also WT/DSB/M/210, 
para. 34.   WT/DSB/M/232 
 Page 17 
 
 
  argued that implementing action by the Executive Br anch would not be sufficient to "achieve the 
requisite clarity in the relationship between the relevant statutes".16  More surprisingly, the United 
States, while entirely conscious of these circumst ances, had taken the decision to disagree with 
Antigua and Barbuda, and prolonged lit igation.  India was glad that the Panel strongly disagreed with 
the US views on what a compliance procedure was meant for. 
 
69. India also wished to take this opportunity to share its systemic concerns about the 
implications of the process of modification of th e US schedule under the GATS to the credibility of 
the dispute settlement system.  India did not question the right conferred by Article XXI of that Agreement.  Nor did it prejudge the final result of  this process.  India sincerely hoped this process 
would end up accommodating satisfactorily all the aff ected Members, and in particular Antigua and 
Barbuda, which had spent a sizeable amount of res ources and time to have its views confirmed - 
clearly and more than once.  But such a successf ul result depended on the United States' ability to 
contemplate the other Members' legitimate right to be dully compensated for the change in its services schedule. 
 
70. In any event, it was clear that  the solution preferred by the DSU – which could only be 
reinforced after years of litigation – was that a Me mber found to be applying an inconsistent measure 
remove the source of such illegality, as indicated in  Article 3.7 of the DSU.  The US move under the 
GATS in this case would eventually produce some so lution, but not the solution envisaged in that 
provision.  In addition, India was still to be conv inced that an essentially bilateral approach to the 
implementation of the DSB's recommendations woul d not undermine the rules-oriented approach 
enshrined in the DSU.  Moreover, India was still to be convinced that developing countries that might 
decide to withdraw or modify concessions in thei r schedules as a solution to disputes would have the 
ability to persuade the developed country Members to agree with such an outcome. 
 
71. The representative of the United States
 said that his delegation wished to address certain 
points referred to in the interventions just made th at might benefit from additional clarity.  First, the 
issue had been raised of respecting the results of  the WTO dispute settlement system and the use of 
GATS Article XXI in this context.  The WTO di spute settlement system had concluded with a 
definitive finding on the scope of the US schedul e as drafted in 1994.  The United States was not 
disputing that result.  By invoking the GATS Artic le XXI process, the Un ited States was respecting 
the findings of the dispute settlement system and was proceeding to use the multilateral Article XXI 
rules that had been adopted for the purpose of allo wing WTO Members to make modifications in their 
schedule while maintaining a balance of benef its among WTO Members.  The gambling dispute 
involved a unique situation in which a Member had never intended even to make a concession.  
Furthermore, it involved the highly sensitive issue of  regulation of public morals.  With the dispute 
settlement proceedings coming to their conclusion,  the appropriate course for the United States in 
order to maintain the intended scope of its con cessions and to preserve its policies on public morality 
and public order – as any WTO Member would wish to – was to follow the multilateral procedures set 
out in Article XXI of the GATS.   72. The United States must emphasize that in this unique case no other course of action would 
make sense.  There could be no question of res ponding to a finding of an unintentional commitment 
on gambling in a way which would undermine the im portant public policy of preserving public morals 
and public order.  In response to the suggestion th at the Article 21.5 proceeding should not have taken 
place because there should have been no disagreemen t regarding the existence of measures taken to 
comply, the United States reiterated the point it made  at the outset, that the Panel had recognized that, 
depending on the nature of the DSB's recommendati ons and rulings, there might be circumstances in 
which compliance could be achieved without changing the text of a measure at issue, for example 
                                                     
 
16 "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services" 
Status Report by the United States (WT/DS285/15/Add.1, of 11 April 2006).  See also WT/DSB/M/210, para. 9. WT/DSB/M/232 
Page 18  
 
  where the factual or legal context for that measure  had changed.  The relevant DSB recommendations 
and rulings in this dispute centred on the fact that the United States had not, in the original 
proceeding, shown that US gambling laws governi ng horse racing applied equally to foreign and 
domestic suppliers.  The United States thought it c ould show this, though th e Panel had ultimately 
disagreed.  The US disagreement with Antigua and Ba rbuda on this point was a legitimate subject for 
an Article 21.5 proceeding.  As for the sugges tion that the United States had emphasized to the 
Article 21.3 arbitrator that the United States could only comply through legislation, the United States noted simply that the United States had not done so.  In fact, the Article 21.5 panel had examined the 
full transcript of the Article 21.3 arbitration, and had not found that the United States had done this.  The compliance Panel's discussion of this issue coul d be found at paragraphs 6.86-6.90 of its Report.  
The Panel had concluded that legislation was not  the only means by which the United States could 
have complied, and that the absence of legislation was not determinative of the existence of measures 
taken to comply in this dispute.  The fact that this became an issue at all in this dispute only 
highlighted the importance of ensuring that all di spute settlement reports be as accurate as possible, 
including through interim review comments from the parties.  While it might not be practical to 
include an interim review in the Article 21.3 proceedings, it was certainly possible in other 
proceedings.  73. The representative of Brazil
 said that his delegation wished to thank the United States for its 
clarification as to which unintentional or intenti onal statements by the United States had been made 
before various WTO bodies.  Brazil had not been a part y to the arbitration under Article 21.3(c) of the 
DSU, as such participation was not foreseen under th e DSU and  Brazil had just quoted from official 
WTO documents.  He thanked the United States for drawing attention to the excerpt in the Panel 
Report where the disagreement was referred to.  It  could be that other WTO Members were not 
reading correctly the US statements, as possibly was the case with regard to the US schedule under 
the GATS. 
 
74. The DSB took note  of the statements and adopted  the Panel Report contained in 
WT/DS285/RW.  
5. Chile – Price band system and safeguard measures relating to certain agricultural 
products:  Recourse to Article 21.5 of the DSU by Argentina 
 
(a) Report of the Appellate Body (WT/DS 207/AB/RW) and Report of the Panel 
(WT/DS207/RW) 
 75. The Chairman
 drew attention to the communication from the Appellate Body contained in 
document WT/DS207/25 transmitting the Appellate Body  Report on:  "Chile – Price Band System 
and Safeguard Measures Relating to Certain Agricultu ral Products:  Recourse to Article 21.5 of the 
DSU by Argentina", which had been circulated on 7 May 2007 in document WT/DS207/AB/RW, in 
accordance with Article 17.5 of the DSU.  He re minded delegations that th e Appellate Body Report 
and the Panel Report pertaining to this dispute ha d been circulated as unrestricted documents.  As 
Members were aware, Article 17.14 of the DSU required that:  "An Appellate Body report shall be 
adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides 
by consensus not to adopt the Appellate Body re port within 30 days following its circulation to 
Members.  This adoption procedure is without prej udice to the right of Me mbers to express their 
views on an Appellate Body report."  
76. The representative of Argentina
 said that his country wished to thank the Panel, the Appellate 
Body and the respective Secretariats for their work  towards resolving the dispute concerning the price 
band system applied by Chile to Argentina's expor ts of wheat and wheat flour.  Argentina believed 
that it was important for the WTO to have insisted  on the validity of the provisions of the Agreement 
on Agriculture, in that only tariffs were to be  applied to agricultural imports while non-tariff  WT/DSB/M/232 
 Page 19 
 
 
  measures, such as price bands, were illegal.  Arge ntina welcomed the Appellate Body's endorsement 
of the Panel's findings that, by maintaining a border measure similar to a variable import levy and to a 
minimum import price, Chile was acting in a manner inconsistent with Article 4.2 of the Agreement 
on Agriculture.  It was, therefore, clear that th e price band system was not an "ordinary customs 
duty".  Consequently, pursuant to Article 4.2 of th e Agreement on Agriculture, this system could not 
be maintained.  Argentina also considered it positiv e that the Appellate Body had supported the work 
of the Article 21.5 Panel as a whole by establishing th at the Panel had not erred in its allocation of the 
burden of proof or its interpreta tion of Article 4.2 of the Agreement on Agriculture and that it had 
discharged its responsibilities to make an objective assessment of the matter and to set out the basic 
rationale behind its findings.  In spite of the f act that Argentina's appeal was conditional upon the 
Appellate Body's findings in relation to Article 4.2,  Argentina regretted that the Article 21.5 Panel had 
decided that addressing the claim brought by Argentin a in respect of Article II:1(b) of the GATT 1994 
was unnecessary for the settlement of this dispute.   Argentina believed that, irrespective of the 
particular inconsistency of the Chilean price band system, a finding of inconsistency of the measure 
with the second sentence of Article II:1(b) of the GATT 1994, given that it constituted "other duties or 
charges" not recorded in Chile's Schedule of Concessions (No. VII), would have given WTO 
Members greater certainty with regard to an obligat ion which was a central pillar of free, transparent 
and predictable international trade.    77. The outcome of this dispute had made it clear  that, since 1995, when the WTO Agreements 
had come into force, Chile had maintained an improper barrier against Argentine wheat and wheat 
flour exports in spite of two WTO rulings on the ille gality of such a measure.  As the Appellate Body 
had affirmed, the obligation not to maintain su ch measures demonstrates that Members could not 
continue to apply measures coming within the purvi ew of Article 4.2 of the Agreement on Agriculture 
as from the date of entry into force of the WTO Agreement.  Ordinary customs duties were more 
transparent and more easily quantifiable than non-ta riff barriers and, for this reason, were more easily 
compared between trading partners and thus could be more easily reduced in future multilateral trade 
negotiations.  The validity of Article 4 of the Agreement on Agriculture, dealing with "Market 
Access", had thus been upheld.  It was clear that the obligations laid down in this Article were not 
merely formal, but reflected the agreement reach ed at the time of the Uruguay Round during which 
negotiators had decided that certain border measures which restricted the volume of trade or distorted 
the price of imports of agricultural products, as w as the case of the Chilean price band system, should 
not be maintained and/or should have  been converted into ordinary customs duties at that time so as to 
ensure greater market access for such imports.  Argentina trusted that Chile would terminate a 
measure that was clearly in breach of multilateral tr ade obligations and that it would not be necessary 
to have recourse to additional procedures provided fo r in the DSU.  Argentina confirmed its intention 
to continue to work with all WTO Members to consolidate an open and rules-based multilateral 
trading system.  It also wished to underscore th e importance of the WTO dispute settlement system 
for defending Members' interests, in particul ar insofar as agricultural trade was concerned. 
 78. The representative of Chile
 said that his country accepted the adoption of the Reports of the 
Panel and the Appellate Body in this important di spute, though it had not endorsed their content or 
conclusions.  Since he had a long statement to make  at the present meeting, he would not comment on 
the content of the Report of the compliance Panel as Chile had made its position clear in its notice of 
appeal, which had been circulated in February 2 007 and its arguments had been reproduced in the 
Appellate Body  Report.  Chile wished to focus on central issues in the Appellate Body Report and 
their systemic implications.  The Appellate Body's c onclusions in the original dispute that had to do 
with the scope of Article 4.2 of the Agreement on Agriculture and which the DSB had adopted in 
2002, constituted a basis on which Chile was to c onsider its implementation of the recommendations.  
And they did indeed form the basis for Chile's amen dment of its price band system in 2003 to bring it 
into full conformity with multilateral obligations.  In the course of Article 21.5 proceedings, however, 
the Appellate Body had changed the parameters  of its reasoning, namely, the basis on which 
implementation of the original recommendations and conclusions was to be considered.  In other WT/DSB/M/232 
Page 20  
 
  words, the standard to be followed by the "c omplying" Member had become a moveable or 
"evolving" standard.  First, in the original proceed ings the Appellate Body st ated in paragraph 234 of 
its Report that for a measure to be a variable import levy, "the presence of a formula causing automatic and continuous variability of duties is a necessary but by no means a sufficient condition".  
It had gone on to say that variable import levies ha ve "additional features", which included "a lack of 
transparency and a lack of predictability in the level of duties that will result from such  measures".  
However, in the Report that would be adopted at the present meeting, the Appellate Body had referred 
(paragraph 156) to paragraph 234 mentioned above, but had added that in making such a statement it 
was not "identifying a 'lack of transparency' and a 'lack of predictability' as independent or absolute 
characteristics that a measure must display in order to be considered a variable import levy".  He 
asked what one were to conclude from this.  That the Appellate Body now co nsidered that variability 
was per se  necessary and sufficient in order to consider that a measure operated as a variable import 
levy within the meaning of footnote 1 of the Agr eement on Agriculture.  Second, in paragraph 158 of 
its Report, the Appellate Body endorsed the Pane l's rendering of the meaning of "variable import 
levies" and took the liberty of asserting (wrongly) that "Chile's appeal does not challenge this 
definition per se ".  But Chile had challenged the Panel's in terpretation, both in its written submission 
to the Appellate Body and in its oral statement at the Appellate Body hearing.  In other words, the 
Appellate Body had disregarded Chile's position.  Th ird, in paragraph 233 of its original Report, the 
Appellate Body had stated that "variability is in herent in a measure if the measure incorporates a 
scheme or formula that causes and ensures that levies change  automatically and continuously".  In the 
present Report, however, the Appellate Body had dism issed Chile's argument that the Panel in the 
Article 21.5 proceedings ought to have determin ed whether the measure "ensures" continuous 
variability as opposed to the existence of a mere possibility of variability.  Unfortunately, the 
Appellate Body had established a new standard based  only on the "inherent variability" of a measure.  
In paragraph 160, it had endorsed the Panel's acknowledgement that "measures containing underlying 
formulas, which produce automatic ch anges in duties, display the same type of 'inherent variability' 
that characterizes variable import levies".  Accord ingly, any use of in-built formulas that produced 
automatic changes would be sufficient for a measure  to qualify as a variable import levy or similar 
thereto, within the meaning of footnote 1 of the Agreement on Agriculture.    79. He provided a fourth example of this "evolving " methodology.  The Appellate Body had also 
changed its own standard for the "continuous" variability requirement.  It stated in paragraph 161 that 
the Panel had defined an "inherently variable me asure" as one that caused and ensured automatic and 
continuous changes in duty levels.  It further recognized that a measure would produce automatic 
changes if it incorporated an underlying scheme or formula.  It should be pointed out that the Appellate Body had not used the term "continuous " on the second occasion or in the clarification at 
footnote 225 of its Report.  Nowhere in its Report had the Appellate Body referred to the important 
point made by Chile that it was the transparency component of the scheme or formula that could cause 
WTO-inconsistency.  If Chile had established a form ula and calculations without disclosing them, it 
was not clear how the Panel would have found some in -built system reflecting "inherent variability".   
 80. Fifth, the Appellate Body had also overlooked another of Chile's essential arguments, namely 
that the Panel had misconstrued transparency and pr edictability by applying in establishing the level 
of duties rather than applying them to the duties that actually resulted from the system.  In other 
words, the Appellate Body had failed to address th e matter of whether a Member may itself determine 
the methodology it had used to set a level of custom s duties that it deemed adequate within the bound 
level in its schedule of commitments.  It was regr ettable that these and several other arguments of 
Chile had been overlooked by the Appellate Body, as Chile believed that the measure ought to have 
been assessed on the strength of all its components and characteristics taken together, rather than 
singly.  As to the "transmission of international prices to the domestic market", the Appellate Body 
had found no fault with the Panel's assessment that the measure did impede transmission.  But Chile 
failed to understand the scant justification offered in paragraph 223, unless this was simply an earlier 
conclusion.  As for Argentina's allegation that th e price band system genera ted "overcompensation",  WT/DSB/M/232 
 Page 21 
 
 
  the Appellate Body addressed none of Chile's argum ents and failed in particular to make any 
comparison to show how the changes in or dinary customs duties produced the alleged 
overcompensation.   81. Finally, in what was perhaps the conclusion of  the Appellate Body that worried Chile the 
most because of its systemic effects, there was a reference to the determination that the price band 
system was a border measure "other than  ordinary customs duties" (distinta de  un derecho de aduana 
propiamente dicho), since for the Appellate Body it needed only be ascertained whether the measure 
was similar to one of those listed in footnote 1 (paragraph 171).  Such a conclusion was beyond the 
scope of the Agreement on Agriculture because f ootnote 1 expressly used the wording "que no sean 
derechos de aduana propiamente  dichos", and this expression was there for some reason.  But the 
Appellate Body had overlooked it.  Unfortunately, the Appellate Body had also overlooked the fact 
that the WTO and its Members considered that while some measures that existed had similar 
characteristics to those described in footnote 1 of the Agreement on Agriculture, they were "ordinary 
customs duties".  As well as these substantive issu es, Chile was also concerned about a procedural 
matter and drew the attention of ot her Members to the standard applie d to the burden of proof.  While 
it had no quarrel with the findings in paragraphs 136 to 138 of the Appellate Body's report, Chile 
pointed out that the Appellate Body had taken th em as the sole basis fo r its conclusion and had 
ignored numerous statements in the Panel Report wh ere the approach was to assume that the Chilean 
measure was inconsistent and so it was for Chile to  establish that it had changed the original measure 
to make it WTO-consistent.  In s hort, in good faith and on the strength of the conclusions and reasons 
in the original report of the Appellate Body, Chile had made substantial changes to its law precisely in 
order to give effect to the recommendations adopted  in 2002.  And in doing so it believed that it had 
eliminated those elements which were deemed at the time to be inconsistent with the WTO.   
 82. The implementation measure consisted in appl ying "ordinary customs duties", and it was, 
therefore, regrettable that the Appellate Body shoul d endorse a panel report deemed to be mistaken in 
law.  In this way, a Member had been penalized  a second time for maintaining a system which, having 
been changed substantially from what it originally w as, applied "ordinary cust oms duties" with a level 
below the bound ceiling.  In fact, since the legal amendments had been introduced, the price band 
system had, 90 per cent of the time, generated payment only of the MFN tariff, or even less.  In other 
words, for long periods, in order to enter Chile pr oducts from Argentina – and from elsewhere – paid 
less than 6 per cent of the MFN rate or quite simply paid no customs duties.  So Chile wondered 
again, as it had done in this same forum in 2002, did this mean that applying a tariff at a level 
approximating the bound rate rather than applying one at a lower rate or not applying one at all, would 
facilitate the transfer of prices and ensure bette r market access?  Chile honoured its international 
commitments and there would be no exception in th is case.  A number of options were being 
examined for a mutually agreed solution that would put  an end to this lengthy dispute, but at the same 
time safeguard the sovereign right of Chile, as of any other Members of the WTO, to establish the 
level of protection it deemed fit for the products in question.  83. The representative of the European Communities
 said that the EC had been a third party in 
these proceedings, and believed it was necessary to put a few words on record in relation to the 
question of the scope of review by an Article 21.5 pa nel.  The Panel had made several obiter dicta on 
this question, and the Appellate Body had exercised  judicial economy on this issue.  Therefore, the 
EC would like to emphasise that it fundamentally di sagreed with those Panel's findings.  Unlike the 
Panel, the EC did not believe that Article 21.5 pane ls were precluded from examining new claims that 
could have been raised during the original proceed ings, and that related to aspects of the original 
measure that remained unchanged.  There was no lega l basis whatsoever for su ch foreclosure in the 
DSU or in general principles of law, whether of substantive or procedural nature.  The Panel's 
envisaged preclusion would also have the perverse  effect of encouraging complaining parties to 
include a maximum of claims in the original panel re quest.  Otherwise they would have to fear losing 
a claim that could become more relevant in the fu ture in light of the comp liance measure.  Such an WT/DSB/M/232 
Page 22  
 
  approach would be judicially un-economic for a ll who were involved in dispute settlement, and it 
could give rise to a denial of justice where precluded claims fell outside the res judicata.   The EC 
would have preferred the A ppellate Body to reverse these fundamentally flawed obiter dicta  of the 
Panel.  As regards the core legal question of this dispute, Article 4.2 of the Agreement on Agriculture, 
the EC regretted that the Panel and the Appellate Bo dy had not followed the approach proposed by the 
EC.  In the EC's view, the measures at issue shoul d have been considered as ordinary customs duties 
and not as measures falling under the prohibition of Article 4.2.  Notably, there was sufficient 
transparency and predictability in the system.  84. The representative of Brazil
 said that her country had participated as a third party in this 
dispute and had followed with interest the interpretati on made by the parties, third parties, the Panels 
and the Appellate Body on one of the main issues covered by this dispute, i.e. tariffication of non-
tariff barriers on agricultural products prohibited by  the Agreement on Agriculture in 1994.  The 
Reports to be adopted at the present meeting were a definite conclusion that the price band system put 
in place by Chile, be it in its original or amende d version, was inconsistent with the country's 
commitments under the Agreement on Agriculture.  Th e Appellate Body had confirmed the similarity 
of the price band system to the border measures prohibited by the Agreement and that should have 
been converted into ordinary customs duties.  It was worth noting that the inconsistency of the price 
band system had not been found on the grounds of  particular and independent features such as 
transparency, predictability or the existence of a formula.  Rather it was based on the overall 
assessment of the effects of the PBS, which had been found to restrict the volume of imports and to 
contribute to distorting the prices of imports by impeding the transmission of international prices to 
the domestic market.  With this ruling, the Appe llate Body had sent a clear message that there was 
virtually no room for concluding that a price band syst em, by virtue of its inherent design, structure 
and operation could be consistent with the provision s of Article 4.2 of the Agreement on Agriculture. 
 
85. The representative of Thailand  said that his country wished to thank the Panel, the Appellate 
Body, and the Secretariat for their work on this case, and welcomed the findings and conclusions of 
the Appellate Body in its Report.  Thailand had participated as a third party in this dispute due to its 
concerns about the continued similarity of Chile's  amended price band system to a variable import 
levy, which was one of the border measures pr ohibited under Article 4.2 of the Agreement on 
Agriculture.  While Thailand appreciated the effort s Chile had undertaken to improve its price band 
system, it believed such changes were not suffici ent to bring it into full compliance with the 
recommendations and rulings of the DSB.  Therefore,  Thailand fully agreed with the Appellate Body's 
findings and conclusions in this dispute, and trusted that Chile would implement the DSB's 
recommendations and rulings as soon as possible.  
86. The DSB took note
 of the statements, and adopted  the Appellate Body Report contained in 
WT/DS207/AB/RW and the Panel Report contained in WT/DS207/RW, as upheld by the Appellate 
Body Report.  
6. Appointment of Appellate Body members 
 (a) Statement by the Chairman  
 87. The Chairman
 said that, under this agenda item, he wi shed to make a statement regarding his 
consultations on the process for selecting Appellate Bo dy members.  He recalled that at the 24 April 
DSB meeting, he had announced that he would cons ult with interested delegations on how best to 
proceed with regard to these positions in the Appe llate Body, which would require a DSB decision in 
accordance with Article 17.2 of the DSU.  Th ese upcoming positions were the following.  On 
10 December 2007, Ms. Merit Janow's first term of office would expire.  On the same date, 
Mr. Yasuhei Taniguchi's second and fi nal term of office would expire.  With regard to Ms. Janow, he 
had been informed that she did not wish to be r eappointed to the Appellate Body for a second term.   WT/DSB/M/232 
 Page 23 
 
 
  On 31 May 2008, the second and final terms of office  of two other Appellate Body members, Messrs. 
Georges Abi-Saab and A.V. Ganesan would expire.  Consistent with his announcement made at the 
24 April DSB meeting and given the fact that ther e was a need to proceed expeditiously he had 
carried out informal consultations with interested  delegations and had held  an open-ended informal 
meeting on 21 May 2007.  At that meeting, he ha d put forward a proposal regarding the procedures 
with respect to these positions in the Appellate  Body.  However, there was no consensus on the 
proposal and he would, therefore, c ontinue to consult on this matter in  order to have the procedures in 
place as quickly as possible.  88. The DSB took note
 of the statement.   
 
7. Proposed nominations for the indicative list of governmental and non-governmental 
panelists 
 
89. The Chairman  drew attention to document WT/DSB /W/348, 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 th e DSU.  Unless there was any obj ection, he wished to propose that 
the DSB approve the names contained in document WT/DSB/W/348.  90. The DSB so agreed
. 
 
__________