RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/196 
30 September 2005 
 (05-4373) 
Dispute Settlement Body 
31 August 2005  
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 31 August 2005  
 
Acting Chairman:  Mr. Don Stephenson (Canada) 
 
  Prior to the adoption of the agenda
, Ambassador Don Stephenson (Canada), the Chairman of 
the TPRB, welcomed delegations and said that he had the pleasure of chairing the present meeting at 
the request of Ambassador Eirik Glenne (Norway), the Chairman of the DSB, who had asked him to 
preside over the proceedings on his behalf due to hi s absence from Geneva. He noted that this was in 
accordance with the Rules of Proce dure for meetings of the DSB.  
 Subjects discussed
: 
1. Surveillance of implementation of recommendations adopted by the DSB.........................2  
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States .............................................................................................................. ...........2  
(b) United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by  the United States...................................................................................4  
(c) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report 
by the Unite d States ........................................................................................................... .........5  
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States .................................................................................................................. .............7  
(e) Mexico – Measures affecting telecommunications services:  Status report by Mexico .............7  
(f) Canada – Measures relating to exports of wheat and treatment of imported grain:  
Status report by Canada ....................................................................................................... ......8  
2. European Communities – Countervailin g measures on dynamic random access 
memory chips from Korea .......................................................................................................9  
(a) Implementation of the recommendations of the DSB.................................................................9  
3. European Communities and certain member States – Measures affecting trade in large civil aircraft ........................................................................................................ .......10
 
(a) Initiation of the procedures for developing information concerning serious prejudice 
under Annex V of the SCM Agreement and designation of the representative referred 
to in paragraph 4 of that Annex ................................................................................................ 10 
4. Japan – Measures affecting th e importation of apples........................................................11  
(a) Statement by Japan ............................................................................................................. ......11  
5. Mexico – Certain pricing measures for customs valuation and other purposes ...............11  
(a) Statement by Guatemala ......................................................................................................... ..11 WT/DSB/M/196 
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.34) 
 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.34) 
 (c) United States – Continued Dumping and Subsid y Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.19 – WT/DS234/24/Add.19) 
 (d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.9) 
 
(e) Mexico – Measures affecting telecommunications services:  Status report by Mexico 
(WT/DS204/9/Add.8) 
 (f) Canada – Measures relating to exports of wheat and treatment of imported grain:  Status 
report by Canada (WT/DS276/20/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 six sub-items to wh ich 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.34) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.34, 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 18 August 2005, in accordance with Ar ticle 21.6 of the DSU.  As noted in the report, 
several legislative proposals relating to S ection 211 that would implement the DSB's 
recommendations and rulings in this dispute had been  introduced in the current Congress, both in the 
US Senate and the US House of Representatives.  The US administration was working with the US 
Congress to implement the DSB's recommendations and rulings. 
4. The representative of the European Communities  said that this was the second dispute 
between the United States and the EC in which the United States had first breached its obligations 
under the TRIPS Agreement and then had been unabl e to bring itself into compliance within the 
prescribed deadline despite a long implementation pe riod from which it had benefitted.  He noted that 
the bills that would repeal Section 211 were pendi ng respectively in the US Senate and in the US 
House of Representatives.  Adoption of these bills w ould remove a discriminatory legislation that had 
been driven by specific interests and would bring a satisfactory solution to the dispute in question.  
The EC called on the US authorities to consider the effects of the current situation, which had gone 
beyond the stakes of the dispute under consideration.  The repeated failure of one of the main sponsors of the TRIPS Agreement to comply with its obligations undermined the authority of that Agreement and the objective of ensuring an effectiv e and non-discriminatory protection of intellectual 
property rights worldwide.  WT/DSB/M/196 
 Page 3 
 
 
5. The representative of Cuba  recalled that, at the 20 June DSB meeting, a new and 
unprecedented Understanding1, which had been reached between the EC and the United States 
regarding Section 211, had been presented to the DSB.   As stipulated in that Understanding, the EC 
had agreed that, at this stage, it would not seek  authorization from the DSB to suspend concessions 
vis-à-vis   the United States, and at the same time it had reserved the right to be able to request such 
authorization at a future date.  In exchange fo r the foregoing, the United States had agreed not to 
block the EC's request for the DSB's authorization to  suspend concessions, to be made at a future date, 
on the grounds that such a request was not filed w ithin the prescribed time-period, as provided for in 
the DSU provisions.  The United States had also reserved the right to challenge the level of suspension that might be proposed by the EC in futu re.  In Cuba's view, th e Understanding could only 
be seen as further "capitulation" by the EC, afte r more than three years within which it had 
systematically criticized the US status reports for their lack of progress and precision.  The so-called 
Understanding did no more than t acitly accept the continued applicati on of an illegal provision;  i.e. 
Section 211.  It implied, in practice, an incredible  act of complicity on the part of the EC.  Not only 
did the Understanding enable the United States to ma intain the current situation for an indefinite 
period of time, but it also provided the United St ates with the necessary time to continue  to 
perpetuate violation of the "Havana Club" rum tr ademark in that country against the legitimate 
interest of a small country, which was a WTO Member. 
6. He recalled that the Appellate Body's conclu sion was clear and unequivocal in stating that 
Section 211 violated the national treatment and most-favoured-nation obligations under the TRIPS 
Agreement.  Thus, Cuba urged the United States to adjust that legislation within a reasonable period 
of time, in accordance with its WTO obligations .  The essential objective of Section 211 was to 
deprive Cuban right-holders or their successors, in cluding foreign companies with interests in Cuba, 
of the recognition and enjoyment in the US territory of their rights regardin g properly registered and 
protected trademarks:  thus preventing the legiti mate owners from defending their rights in the US 
courts and renewing the registration of their tradem arks in that country.  Section 211 enabled the 
United States to include into the intellectual property area the Helms-Burton Act, which was 
universally condemned for its unilateral and extra-territo rial character.  This was one more step in the 
escalating build-up of the economic, financial and tr ade blockade imposed on Cuba over a period of 
more than four decades, in violation of the princi ples of international law and free trade, which the 
WTO claimed to promote. 
7. Cuba was seriously concerned about the sy stemic implications of the so-called 
Understanding.  Its key element was a lack of transparency.  In an unprecedented manner, the 
complainant had given up and had postponed indefinitely compliance with the DSB's 
recommendations and rulings disregarding the provisi ons of Articles 21.1 and 21.2 of the DSU,  
which recognized that prompt compliance with the DSB's recommendations was essential for the 
effective functioning of the dispute settlement mechan ism, and that particular attention should be paid 
to matters affecting the interests of developing-country Members with respect to measures which had 
been subject to dispute settlement. 
8. Furthermore, Cuba believed that, in accordance with Article 21.3 of the DSU, the so-called 
Understanding between the EC and the United States should have s tipulated a reasonable period of 
time for compliance with the DSB's recommendations.  He recalled that the last reasonable period of time granted to the United States for implemen tation had expired on 30 J une 2005.  However, 
pursuant to the Understanding, the issue of a new reas onable period of time was left to be taken up at 
an unspecified future date.  In Cuba's view, the Understanding had re leased the United States from the 
responsibility of reporting to the DSB on this illegal m easure;  i.e. Section 211.  In that way, the 
United States would be able to continue to apply S ection 211 illegitimately for an indefinite period of 
time, until it had completed its registration "theft" of the Havana Club trademark in that country. 
                                                     
 
1 WT/DS176/16. WT/DSB/M/196 
Page 4  
 
9. He noted that the presentation of status reports by the United States in the DSB meetings had 
turned into a routine ritual and one  had the impression of having seen the same reports.  Furthermore, 
one could even almost foresee what the content of the next report would be.  These reports stated 
nothing.  Members had been told over and over again that the United States intended to comply with the DSB's recommendations and rulings.  They ha d also been told that the US Congress was 
considering several legislative proposals on the subject, and that the administration was continuing its 
work with respect to appropriate measures that woul d resolve the matter.  What the status report did 
not indicate was that these proposals had only sought to make insubstantial and cosmetic changes to 
Section 211 in order to keep it in force without fully complying with the DSB's recommendations.  This situation undermined the effectiveness of  the WTO dispute settlement mechanism, and 
demonstrated that improvements to the DSU provisions were necessary in the area of compliance with 
the DSB's recommendations and rulings so as to make  them genuinely effective and efficient, in 
particular for those Members that represented less weight in international trade. 
10. Finally, his delegation wished to reiterate tha t:  (i) the continued application of Section 211 
was inconsistent with the TRIPS Agreement and harmed the legitimate interests of Cuba and, 
therefore, Section 211 should be repealed immediately;   (ii) a total lack of ethical conduct and respect 
for the WTO was reflected in the f act that after more than three years following the adoption of the 
DSB's recommendations, a solution was being sought, which did not foresee compliance with those recommendations. Cuba stressed, once again, that th e only right path for the United States was to 
repeal Section 211, and categorically rejected the Understanding that had recently been reached by the 
United States and the EC.  At the same time, Cuba  claimed its sovereign right to respond in due 
course by adopting the necessary measures pursuant to the WTO provisions. 
11. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.34) 
12. The Chairman  drew attention to document WT/DS184/ 15/Add.34, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US anti-dumping measures on certain hot-rolled steel products from Japan. 
13. The representative of the United States  said that his country had provided a status report in 
this dispute on 18 August 2005, in accordance with Article 21.6 of the DSU.  As of 23 November 2002, the US authorities had addresse d the DSB's recommendations and rulings with 
respect to the calculation of anti-dumping margins in the hot-rolled steel anti-dumping duty 
investigation at issue in this dispute.  Details  had been provided in document WT/DS184/15/Add.3.  
The US administration continued to support specifi c legislative amendments that would implement 
the DSB's recommendations and rulings with respect to the US anti-dumping duty statute, and was working with the US Congress to  pass these amendments.  In that connection, on 19 May 2005, 
legislation had been introduced in the US H ouse of Representatives (H.R. 2473) that would 
implement the DSB's recommendations and rulings with respect to the US anti-dumping duty statute.  The US administration would continue to work with the US Congress to enact the legislation. 
14. The representative of Japan
 said that his country was keen to see discussions on and the 
passage of the bill H.R. 2473 by the US Congress, which would amend the US anti-dumping statute in order to comply with the DSB's recommendations a nd rulings in this dispute.  Pursuant to the 
Understanding between Ja pan and the United States contained in WT/DS184/19 and in light of 
Japan's trust in the pledge of the United States to  sincerely address the matter, Japan urged the US 
Government to secure the full-fledged implementati on of the DSB's recommendations and rulings in 
the dispute under consideration in a prompt manner.  As Japan had repeatedly stated before the DSB, 
prompt implementation was essential for a cr edible WTO dispute settlement system.   WT/DSB/M/196 
 Page 5 
 
 
15. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(c) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.19 – WT/DS234/24/Add.19) 
16. The Chairman  drew attention to document WT/DS 217/16/Add.19 – WT/DS234/24/Add.19, 
which contained the status report by the United St ates on progress in the implementation of the DSB's 
recommendations in the case concerning the US Conti nued Dumping and Subsidy Offset Act of 2000. 
17. The representative of the United States  said that his country had provided a status report on 
18 August 2005, in accordance with Article 21.6 of the DSU.  As noted in the report, the US 
administration had proposed repeal of the CDSOA in its budget proposal for fiscal year 2006.  In 
addition, legislation that would repeal the CD SOA had been introduced in the US House of 
Representatives.  The US administration would con tinue to work with the US Congress to enact 
legislation, and to confer with the complaining part ies in these disputes, in order to reach mutually 
satisfactory resolutions of these matters. 
18. The representative of the European Communities  said that on 25 July 2005, the Ways and 
Means Trade Sub-Committee of the US House of Re presentatives had called on interested parties to 
comment by 2 September 2005 on a proposed miscella neous trade bill.  That bill would include 
technical corrections to US trade laws and mi scellaneous duty suspension proposals.  Among the 
provisions that could be inserted in that trade p ackage was the bill introduced in March 2005 to repeal 
the Byrd Amendment.  The EC welcomed that very positive move.  He recalled that the enactment of 
the Byrd Amendment had raised immediate a nd widespread concerns, and had led to an 
unprecedented dispute between the United States and, basi cally, the rest of the world.  He recalled that 
those WTO Members which applied retaliation, or were authorized to do so, due to the US failure to 
repeal the Byrd Amendment were the main trading partners of the United States with 71 per cent of 
total US exports and 64 per cent of total US imports.  By contrast, the Byrd Amendment only benefitted a handful of companies.  Two companies had received more than one third of the money 
distributed thus far; i.e. more than US$366 m illion out of the roughly US$1 billion disbursed in the 
first four distributions, and every year half of the payments had gone to a very limited number of 
companies: four in 2001, three in 2002, two in 2003 and nine in 2004.  The EC urged the US Congress not to miss this opportunity to remove a serious trade irritant, which affected the US credibility as a reliable partner, and to stop furthe r damage being caused to all, including to US 
industries. 
19. The representative of Canada
 said that his country noted the most recent status report of the 
United States on the Continued Dumping and Subsidy Offset Act of 2000.  Members were aware of 
Canada's decision of 1 May 2005 to suspend concessions vis-à-vis  the United States in response to the 
US failure to repeal the WTO-inconsistent Byrd Amendment.  Canada was disappointed that the US 
failure to implement the DSB's recommendations had forced Canada and other WTO Members to 
impose retaliatory measures. Canada had done so si mply in order to induce US compliance with its 
WTO obligations.  Canada regretted that the im position of these measures had become necessary so 
close to the Hong Kong Ministerial Conference at a time when the world was preparing to engage 
more deeply in negotiations to liberalize trade, a nd at a time when Members sought to promote, not 
restrict, trade.  Concerns surrounding the Byrd Am endment were not limited to US trading partners.  
On the contrary, concerns over its economic impa ct in the United States were also being echoed 
within the United States.  In the past week, th e Congressional Research Service of the Library of 
Congress had published a Report on the Byrd Amendment.   The Report noted that the repeal of the 
Byrd Amendment "...itself would do nothing to  affect other US anti-dumping or CVD laws, 
procedures or actions, and domestic industries would continue to bene fit from these measures".  That 
conclusion supported the WTO finding that the Byrd Amendment was an unjustified double remedy 
not provided for in the Agreements.  And, major US  media outlets, including the Wall Street Journal, WT/DSB/M/196 
Page 6  
 
had been reporting that the Byrd Amendment was ha rmful to the US economy and to US consumers.  
Canada reminded the United States of their common interests in th e international trading system 
governed by the rule of law and again called upon th e United States to end the dispute and repeal the 
Byrd Amendment. 
20. The representative of Japan
 said that his country noted those signs of progress on the part of 
the US Government as indicated in its status repor ts for some time. Japan had been monitoring with 
keen interest how the US Congress might proceed with the deliberation of the bill H.R. 1121 and 
address the issue of complying with its obligations to repeal a measure that had been found to be 
inconsistent with the WTO disciplines.  Due to the prolonged delay of the United States to secure the 
implementation of the DSB's recommendations and rulings in this dispute, Canada, the EC, and 
recently Mexico had put into place their countermeasures vis-à-vis  the United States, pursuant to 
Article 22 of the DSU.  For its part, Japan had decided to impose 15 per cent additional duties on 
certain US products starting from 1 September 2005.  Japan's decision had been notified to the DSB 
on 18 August 2005 and had subsequently been circul ated to Members in document WT/DS217/48.  It 
was regrettable that, as a last resort, it had become  necessary for four Members to impose such trade-
distorting measures in order to counter the illegal US measure and to protect their legitimate interests.  
He recalled that the measure shall be of a tempor ary nature until the implementation was secured, as 
provided for in Article 22.8 of the DSU.  Japan agai n strongly called on the United States to intensify 
its efforts to secure a prompt repeal of the CDSOA. 
21. The representative of Mexico  recalled that, on 17 August 2005,  his country had published in 
its official journal, the Diario Oficial de la Federación , a decree initiating the suspension of 
concessions and other obligations as a result of non-compliance by the United States in the CDSOA 
case.  The aforementioned decree modified the duty applied to 10 tariff lines, varying it from 30 per cent to 9 per cent.  The decree ha d come into force the day after it had been published. Mexico 
regretted that it had had to impose these measures vis-à-vis  such an important trading partner. 
However, the US non-compliance had forced Mexico to  take such action.  His country hoped that the 
United States would comply soon. 
22. The representative of India
 said that his country thanked the United States for its status report.  
Once again, India was disappointed by the lack of  any notable progress from the report provided by 
the United States at the previous DSB meeting.  India noted the legislative initiative in the form of bill 
H.R. 1121 on repeal of the CDSOA in the US Congr ess, and the fact that the Chairman of the Sub-
Committee on Trade of the House Committee on Ways and Means had invited public comments.  As 
stated at the 20 July DSB meeting, India pref erred full compliance by the United States with the 
DSB's decision to suspension of concessions and other obligations under the authority obtained from 
the DSB.  India, therefore, urged the United States to take urgent steps in the forthcoming Congressional Session, beginning the following  Monday, to repeal the CDSOA.  India, of course, reserved all its rights under the DSU. 
23. The representative of the United States
 expressed his country's regret that Japan and Mexico 
had decided to suspend their obligations in connec tion with these disputes.  The US administration's 
recent budget proposal to repeal the CDSOA – and the recent introduction of repeal legislation – 
demonstrated that the United States was making progress in repealing the CDSOA.  The US administration would continue to work with the US Congress to achieve compliance with the DSB's 
rulings and recommendations in these disputes.  The United States would be reviewing carefully the 
measures taken by Japan and Mexico to be sure that those measures were consistent with the DSB's 
authorization.  He noted that the DSB had only authorized the suspension of concessions or other 
obligations as provided in the Decision of the Arbitrator. 
24. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/196 
 Page 7 
 
 
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.9) 
25. The Chairman  drew attention to document WT/DS160/ 24/Add.9, 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. 
26. The representative of the United States  said that his country had provided a status report in 
this dispute on 18 August 2005, in accordance with Ar ticle 21.6 of the DSU.  As noted in the report, 
the US administration continued to work with th e US Congress, and would confer with the EC in 
order to reach a mutually satisfactory resolution of this matter. 
27. The representative of the European Communities  said that the DSB had adopted the 
recommendations and rulings in this dispute more than  five years ago.  And yet, the US status report 
contained nothing as to what steps would be ta ken to solve this dispute and could again be 
summarized in two words:  "no progress".  The lack of interest on the part of  the United States to 
solve this dispute sent out a very disturbing signal.  Again, the EC could not, but question the willingness of the United States to ensure effective prot ection of intellectual property rights.  In a joint 
declaration with the EC of 20 June, the United States had declared its commitment to "working 
effectively to combat piracy and counterfeiting at home and abroad".  He then questioned how could 
this be reconciled with Section 110(5) of the US Copyright Act, which did nothing else than institutionalizing piracy in the US music sector.  The TRIPS Agreement was not a one-way agreement which created rights for the United States and ob ligations for others.  The EC called on the 
United States to accord the highest priority to the r esolution of this dispute.  Should that not be the 
case, the EC wished to recall that it had reserved its  right to reactivate, at any point in time, the 
arbitration procedure pursuant to its retaliation request. 
28. The representative of the United States
 noted that the EC was once again making unfounded 
comments about US intellectual property rights.  Not only was the US administration working to resolve the dispute, but the United States was s econd to none in providing strong protection for 
intellectual protection rights. However, if th e EC really considered Section 110(5) as 
"institutionalizing" piracy, it would be hard to escape the conclusion that its own GI regime did so as 
well, and on a much larger scale. 
29. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(e) Mexico – Measures affecting telecommunications services:  Status report by Mexico 
(WT/DS204/9/Add.8) 
30. The Chairman  drew attention to document WT/DS204/ 9/Add.8, which contained the status 
report by Mexico on progress in the implementation of the DSB's recommendations in the case concerning Mexico's measures affecting telecommunications services. 
31. The representative of Mexico
 said that his country had repeatedly expressed its disagreement 
with the conclusions and recommendations of the Pane l Report in this dispute.  Furthermore, Mexico 
was fully convinced that, in the light of the analysis and the existing case law of the Appellate Body, 
the Panel's findings in this dispute would have been reversed.  However, Mexico recognized the 
importance to guarantee and maintain an effective dispute settlement system.  For that reason, as a 
WTO Member, Mexico reiterated its commitment to full compliance with the recommendations of 
panels and the Appellate Body, in cluding those cases in which their decisions went against Mexico. 
He recalled that Mexico and the United States had reached an agreement on 1 June 2004 concerning 
compliance with the Panel Report.  Mexico's comm itments under the agreement involved, on the one 
hand, eliminating from its international long distan ce rules the "proportional return" system, and the WT/DSB/M/196 
Page 8  
 
requirement that the carrier with the largest share of  outgoing traffic should be the one to negotiate the 
settlement rate.  In addition, Mexico  had undertaken to put into effect the regulations needed to permit 
the resale of long distance telecommunicati ons services through commercial agencies. 
32. He recalled that in 2004, Mexico had fulfille d the first of its commitments by eliminating 
from its international long distance rules those aspects  that had been declared inconsistent by the 
Panel in this case. In connection with the second  commitment, on 12 August 2005 Mexico had 
published in the Diario Oficial de la Federación  (Official Journal) the " Regulation on Marketing of 
Long Distance and International Long Distance Telecommunications Services" .  By virtue of that 
instrument, enterprises from any country that had be en established in Mexico might market domestic 
and international long distance services without owning public telecommunications networks.  He 
emphasized that the regulation would enable co mmercial agencies to have access to domestic long 
distance services, even though Mexico's commitment to the United States had focussed exclusively on 
international long distance services.  At the same ti me, that instrument would enable the commercial 
agencies to operate under non-discriminatory condit ions, in as much as it obliged concession holders 
to refrain from imposing conditions that restricted th e marketing of services or from offering rates and 
commercial terms and conditions less  favourable than those offered to the public at large.  The 
commercial agencies would be free to set rates.  With the issuing of that regulation, Mexico 
considered that it had fully complied with the terms of the agreement reached w ith the United States.  
Consequently, Mexico requested that this di spute be deemed to be definitively settled. 
33. The representative of the United States
 said that his country thanked Mexico for its status 
report.  The United States wished to comment briefly on the implementation of the DSB's 
recommendations and rulings.  The agreement en tered into by the United States and Mexico, 
following adoption of the DSB's recommendations and rulings, required Mexico to undertake two 
distinct regulatory reforms.  First, Mexico had to modify its international long distance rules to 
eliminate the uniform settlement rate system, the al location of incoming calls, and the right of the 
carrier with the highest volume of outgoing calls to be  the sole negotiator of settlement rates.  Second, 
Mexico had to promulgate regulations to allow fo r the resale of international switched services by 
commercial agencies in Mexico.  On 11 August 2004, Mexico had published its revised international 
long distance rules.  The revised rules allowed,  for the first time, the competitive commercial 
negotiation of international term ination rates.  Then, on 12 August 2005 Mexico had published its 
new resale regulations allowing for the commercia l resale of long distance and international long 
distance services originating in Mexico.  With th ese reforms, the United States was satisfied that 
Mexico had fulfilled the regulatory changes requir ed by the agreement.  For that reason, the 
United States could accept Mexico's suggestion that it di scontinue filing status repor ts in this dispute.  
The United States noted, however, that this was wit hout prejudice to the question of whether Mexico 
had fulfilled all of its WTO commitments with respect to telecommunications services.  The United States recognized the progress that Mexico had made through these regulatory reforms, and 
hoped to see continuing liberalization in Mexico's telecommunications services market. 
34. The DSB took note
 of the statements. 
(f) Canada – Measures relating to exports of wheat and treatment of imported grain:  Status 
report by Canada (WT/DS276/20/Add.3) 
35. The Chairman  drew attention to document WT/DS276/ 20/Add.3, which contained the status 
report by Canada on progress in the implementation of the DSB's recommendations in the case 
concerning Canada's measures rela ting to exports of wheat and treatment of imported grain. 
36. The representative of Canada  said that his country was pleased to inform the DSB that 
amendments to the Canada Transportation Act a nd the Canada Grain Act and associated regulatory 
changes had come into force on 1 August 2005.  That  had brought Canada into compliance with the 
DSB's recommendations and rulings.  Canada recalle d that the United States had posed a number of  WT/DSB/M/196 
 Page 9 
 
 
questions to Canada at the previous DSB meeting regarding the implementation of those measures.  
Canada was pleased to note that it had provided answers to those questions directly to the 
United States.  
37. The representative of the United States  said that his country thanked Canada for its status 
report.  The United States appreciated Canada's statement that the previously announced regulatory 
changes had come into force on 1 August 2005.  At the 20 July 2005 DSB meeting, the United States 
had noted that it had certain questions concerni ng how Canada's new regul ations would work in 
practice, and that it would be pursuing those ques tions with Canada.  Ca nada had provided written 
responses to those questions, and the United States was reviewing them. 
38. The DSB took note  of the statements.   
2. European Communities – Countervailing me asures on dynamic random access memory 
chips from Korea 
(a) Implementation of the recommendations of the DSB 
39. The Chairman  recalled that in accordance with the DSU provisions, the DSB was required to 
keep under surveillance the implementation of reco mmendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of 
the DSU provided that the Member concerned shall in form the DSB, within 30 days after the date of 
adoption of the panel or Appellate Body report, of its intentions in respect of implementation of the 
recommendations and rulings of the DSB.  He reca lled that at its meeting on 3 August 2005, the DSB 
had adopted the Panel Report in the case:  "European Communities – Countervailing Measures on Dynamic Random Access Memory Chips from Korea" (DS299).  He invited the EC to inform the 
DSB of its intentions in respect of im plementation of the DSB's recommendations. 
40. The representative of th e European Communities
 recalled that on 3 August 2005, the DSB 
had adopted the recommendations and rulings in th e dispute on countervailing measures imposed by 
the EC on dynamic random access memo ry chips from Korea.  As already stated at the 3 August DSB 
meeting, the EC intended to fully implement tho se recommendations and rulings.  But, the need to 
redo certain parts of the investigation and to adopt  a new Council regulation had made it impossible to 
comply immediately and the EC would need a reasona ble period of time in order to do so.  The EC 
stood ready to discuss with Korea the appropriate duration of this reasonable period of time, in 
accordance with Article 21.3(b) of the DSU. 
41. The representative of Korea  said that his country welcomed the statement made by the EC 
that it would comply with the DSB's ruling and recommendation in the dispute under consideration 
(DS299).  Since the Korean company was now suff ering from the EC's countervailing duty that was 
found to be inconsistent  with the SCM Agreement, the most im portant element in implementation was 
promptness.  Korea believed that the EC would im plement the Panel's recommendations completely, 
quickly and in good faith.  Korea wished to remind the EC that what the Panel had found to be inconsistent with the SCM Agreement was the substantial element of the EC's countervailing 
measure, such as denial of subsidy and existence of benefit, and incorrect injury determination.  Korea 
considered that the measure had been so thorou ghly impugned by the Panel's decision and the DSB's 
rulings and recommendations that it should be imme diately revoked or suspended.  Korea was willing 
to discuss any proposals the EC might make rega rding a reasonable period of time and how such a 
period of time would be used. 
42. The DSB took note
 of the statements, and of the information provided by the 
European Communities regarding its intentions in respect of implementation of the DSB's 
recommendations. WT/DSB/M/196 
Page 10  
 
3. European Communities and certain member States – Measures affecting trade in large 
civil aircraft 
(a) Initiation of the procedures for developing in formation concerning serious prejudice under 
Annex V of the SCM Agreement and designa tion of the representative referred to in 
paragraph 4 of that Annex (WT/DS316/2)  
43. The Chairman
 said that this item was on the agenda of the present meeting at the request of 
the United States.  He then drew attention to the communication from the United States contained in 
document WT/DS316/2, and invited the representative of the United States to speak. 
44. The representative of the United States  said that on 20 July 2005, the DSB had established a 
panel to examine the US claims regarding the massive subsidies that France, Germany, the 
United Kingdom, Spain, and the European Comm unities provided to Airbus, the European 
manufacturer of large civil aircraft.  At that mee ting, the United States had also sought to have the 
DSB initiate the procedures provided for in Annex V of the SCM Agreement, pursuant to paragraph 2 
of that Annex.  Regrettably, the EC had blocked in itiation of the Annex V process.  At that meeting, 
the United States had also responded to the reasons th at the EC had given for blocking the process.  
The United States had invited the EC to reconsider its  stance and to allow the DSB to go forward with 
the decision that paragraph 2 required it to take.  On 3 August, the United States had renewed its 
request to have the DSB initiate the Annex V proce dures in this dispute.  Regrettably, the EC had 
again blocked the initiation of the process.  The Unit ed States again invited the EC to reconsider its 
stance, but the EC had refused.  The procedures fo r developing information provided for in Annex V 
were an important part of a dispute concerning actionable subsidies under the SCM Agreement.  It 
provided a way for both parties as well as the Panel to have access to relevant information.  The EC 
had in the past agreed with the importance of the process and the need to engage promptly and 
constructively.  At the present meeting, the United States renewed its request that the DSB initiate the 
Annex V procedures in this dispute and hoped that the EC would not stand in the DSB's way for a 
third time. 
45. The representative of the European Communities  said that, as indicated at the 3 August DSB 
meeting, the EC was not  – as such – opposed to  the initiation of the Annex V procedure in DS316 
and in DS317 cases for that matter.  However, the EC firmly believed that it was of vital interest to 
ensure that the content of any agreement on an Anne x V procedure was carefully crafted so as to take 
the particularities of the disputes properly into  account.  Furthermore, consistent with WTO 
jurisprudence, an Annex V procedure could not be ini tiated unilaterally by only one party to a dispute, 
but required a meeting of the minds; an actual agreem ent between the parties.  As  indicated by the 
EC at the 3 August DSB meeting, the EC – together with the United States – had been actively seeking to negotiate an agreement on the Annex V procedure. The parties had numerous exchanges, 
and another videoconference was foreseen to take place on 1 September 2005.  While there were still 
outstanding issues, these efforts had narrowed the differences and should enable the two parties to 
jointly request the commencement of the Annex V pr ocedures in the two proceedings very soon, and 
if necessary at a special DSB meeting.  In the light  of the above, the EC could not agree to the US 
request for the initiation of an Annex V procedure pertaining to the DS316 dispute at this stage. 
46. The representative of the United States
 said that his country was disappointed that the EC had 
chosen to block the initia tion of the Annex V process for a third time.  Although the EC had claimed 
in the past that it was not trying to delay the pro cess, it was hard to avoid the conclusion that it was. 
The EC plainly wanted to avoid having the disput e settlement process review the terms and conditions 
of the launch aid and other subsidies that Airbus received.  With respect to the discussions between 
the United States and the EC to which the EC repr esentative had just referred:  the US willingness to 
entertain the possibility of an agreement did not cha nge the fact that there was no requirement in the 
DSU for the parties to do so.  In the US view, the time to initiate the process had come.  The EC must 
realize that its intransigence on this matter would not indefinitely shield its large civil aircraft  WT/DSB/M/196 
 Page 11 
 
 
subsidies from the panel's scrutiny.  As the EC conti nued to try to run out the clock, the United States 
was finding itself obliged to review all the preced ents for pursuing claims of serious prejudice. 
47. The representative of Canada  said that he had no intention of getting in between the two 
largest trading partners with the two largest aircraft manufacturers in the largest dispute the WTO had witnessed, especially on such a sensitive issue.  The only comment that he wished to make was that it 
was his understanding that the EC had relied upon p ast practice in blocking the initiation of the 
procedures.  At the present meeting,  the EC had re ferred to WTO jurisprudence regarding this matter.  
He was not aware of any jurisprudence in the WT O on this matter.  If indeed it was practice that 
guided the EC that was one thing, but if the EC wi shed to rely on jurisprudence, one would benefit 
from reference to DSB's rulings or recommendations to that effect. 
48. The DSB  took note
 of the statements.   
4. Japan – Measures affecting the importation of apples 
(a) Statement by Japan  
49. The representative of Japan , speaking under "Other Business", said that at the present 
meeting, he wished to update Members about a rece nt development in the dispute:  "Japan – Measures 
Affecting the Importation of Apples"(WT/DS245).   He said that Japan had amended the SPS 
measures related to this dispute in order to full y implement  the DSB's recommendations and rulings.  
As a result of that amendment and the consultations w ith the United States, a mu tually agreed solution 
has been reached.  Japan and the United States  had notified the Chairman of the DSB of their 
mutually agreed solution on 30 August 2005 (WT/DS245/ 21).  Japan, therefore, wished  to report to 
the DSB that, with that notification, the dispute had now been settled. 
50. The representative of the United States  said that his country appreciated the further changes 
that Japan had made to its measures relating to US apple fruit.  As Japan had noted, the United States 
and Japan had jointly notified the DSB on 30 August 2005 that Japan's changes constituted a mutually 
agreed solution to this long-standing dispute.  The pa rties expected the notification to be circulated to 
Members shortly.  The United States again wished to  thank the Panel and the Secretariat for their hard 
work throughout this dispute.  In particular, the United States wished to thank the Panel once more for 
the thoroughness and clarity of its Report in the Article 21.5 proceeding.  The Report provided a clear 
road-map to the further steps Jap an needed to undertake to bring its measures into compliance, and 
made possible the positive outcome discussed at th e present meeting.  The United States would be 
monitoring implementation of Japan's revised m easures and expected that implementation would 
proceed smoothly. 
51. The DSB took note  of the statements. 
5. Mexico – Certain pricing measures for customs valuation and other purposes  
(a) Statement by Guatemala 
52. The representative of Guatemala , speaking under "Other Business", said that her delegation 
was pleased to inform Members that, at beginning of the current week, Guatemala had been able to 
notify the DSB that it had reached an agreement w ith Mexico in the dispute:  "Mexico – Certain 
Pricing Measures for Customs Valuation and Othe r Purposes" (WT/DS298).  That achievement was 
the result of the efforts made by both governments to comply with the principal aim of the dispute 
settlement mechanism;  i.e. to  secure a positive solution to di sputes that might arise between 
Members.  Guatemala believed that it had set an example for all WTO Members, in particular those imposing measures that limited or restricted the exports of countri es with small economies such as 
Guatemala.  Thus, Guatemala invited those Member s to reflect upon and address, in an appropriate WT/DSB/M/196 
Page 12  
 
manner, the concerns raised by other Members, and urged them to explore the alternative of seeking a mutually satisfactory solution.  Finally, her count ry thanked Mexico for showing good faith in its 
efforts to meet Guatemala's requirements.  Guatem ala trusted that the same positive and constructive 
attitude would be extend to other ongoi ng disputes between the two countries. 
53. The representative of Mexico
 said that his country thanked Guatemala for its notification 
regarding this matter.  He recalled that Guatem ala had initiated its consultations with Mexico on 
22 July 2003 and, subsequently, through his govern ment's efforts in 2004, Mexico's measures had 
been amended in such a way so as to resolve the dispute.  The solution reached by Guatemala and 
Mexico was another example of the benefits that c onsultations offered to Members in order to find a 
solution without recourse to the panel stage pr ovided under the dispute settlement mechanism.  
Mexico noted that Guatemala had referred to Mexico's good faith.  His country believed that 
Members should act in good faith not  only in the ongoing disputes, but also in any future disputes that 
might arise. 
54. The DSB took note  of the statements. 
__________