RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/183 
7 March 2005 
 (05-0966) 
Dispute Settlement Body 
17 February 2005  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 17 February 2005  
 
Chairperson:  Ms Amina Mohamed (Kenya) 
 
 
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...................................................................................3  
(c) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report 
by the Unite d States ........................................................................................................... .........4  
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States .................................................................................................................. .............5  
(e) Mexico – Measures affecting telecommunications services:  Status report by Mexico .............6  
2. United States – Continued suspension of obligations in the EC - Hormones 
dispute........................................................................................................................ ................6  
(a) Request for the establishment of a pa nel by the European Communities...................................6  
3. Canada – Continued suspension of obligations in the EC - Hormones dispute ..................7  
(a) Request for the establishment of a pa nel by the European Communities...................................7  
4. United States – Tax treatment for "Foreign Sales Corporations".......................................7  
(a) Second recourse to Article 21.5 of the DSU by the European Communities:  Request 
for the establishment of a panel ............................................................................................... ...7 
5. United States – Measures relating to zeroing and sunset reviews ........................................8  
(a) Request for the establishmen t of a panel by Japan .....................................................................8  
6. Japan – Import quotas on dried laver and seasoned laver....................................................9  
(a) Request for the establishment of a panel by Korea.....................................................................9  
7. Election of Chairperson........................................................................................................ ..10 
 
  WT/DSB/M/183 
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.28) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.28) 
 (c) United States – Continued Dumping and Subsid y Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.13 – WT/DS234/24/Add.13) 
 
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.3) 
 (e) Mexico – Measures affecting telecommunications services:  Status report by Mexico 
(WT/DS204/9/Add.2) 
 
1. The Chairperson 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".  She proposed that the five sub-items  to which she 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.28) 
2. The Chairperson
 drew attention to document WT/DS176/11/Add.28, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US Section 211 Om nibus Appropriations Act of 1998. 
3. The representative of the United States  said that his country had provided a status report in 
this dispute on 4 February 2005, in accordance with Ar ticle 21.6 of the DSU.  As noted in the report, 
the last US Congress had been considering a number of legislative proposals to amend or repeal Section 211 and the Senate had held  hearings on those proposals in July 2004.  Similar legislative 
proposals had been introduced in the current Congr ess, which had convened in January 2005.  The US 
administration was working with this US Congress with respect to appropriate statutory measures to 
resolve this matter. 
4. The representative of th e European Communities
 said that three years had now passed since 
the condemnation of the US legislation and the EC  was still waiting for the United States to bring a 
satisfactory solution to this dispute.  Furtherm ore, the agreement between the EC and the United 
States to extend the time-period for implementation by  six months had been reached two months ago 
and yet, the United States could not report on any progress.  The US inaction was in sharp contrast with its determination to promote efficient and non-discriminatory protection of intellectual property 
rights worldwide.  The EC had shown extreme pati ence in this case and expected that the United 
States would make use of the additional time-period for implementation to finally end this dispute. 
5. The representative of Cuba
 said that her country, once again, regretted the lack of progress 
made, thus far, by the United States in implem enting the DSB's recommendations and rulings in 
respect of Section 211 of the Omnibus Appropriatio ns Act of 1998.  Since the DSB had concluded 
that the United States must comply with the rulings  and findings, the United States had requested, and 
had been granted, further extensions of the deadlin es set for bringing its legislation into conformity 
with the WTO rules, giving the excuses which had been, and continued to be, both unconvincing and  WT/DSB/M/183 
 Page 3 
 
 
inconsistent.  It should be pointed out that the adoption of Section 211 had led deliberately to an 
extension of the blockade and th e aggressive policies targeting Cuba in the area of intellectual 
property, causing ownership of the mark "Havana Club" in the United States to be withdrawn from 
the Havana Club Holding, its legitimate owner.  At  the present meeting and as had been expected, the 
US status report reiterated that the US administ ration was still working with the US Congress with a 
view to complying with the DSB's recommendations, when in reality no results had been obtained in 
the three years since the decision had been adopted .  Cuba condemned the extraordinary indifference 
and laughable readiness of the United States to settle this  dispute.  Cuba wished to draw attention to 
the concept of a reasonable period of time and observe d that the four extensions granted to the United 
States by the EC to comply with the decisions mean t that the initial reasonable period of six months 
had been increased to three years as of 2 Februa ry 2005.  Cuba wondered how long the DSB was 
willing to accept further extensions of this ki nd. Her delegation asked whether promptness in 
implementing DSB rulings was not one of the objectiv es of the dispute settleme nt process, especially 
when the appropriate balance between rights and ob ligations was affected. Moreover, the systematic 
failure of the United States to comply with the DS B's rulings cast doubt not only on that country's true 
political will to move forward in the negotiations  and honour its WTO commitments, but also on the 
credibility of the WTO.  Furthermore, Cuba w as aware that on 9 February 2005, a group of 20 
Republican and Democrat senators had introduced a b ill in the US Senate which had proposed, among 
other things, the repeal of Section 211.  Cuba mainta ined its view that Section 211 should be repealed 
and hoped that the US Congress would approve that bill. 
6. 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.28) 
7. The Chairperson  drew attention to document WT/DS184/15/Add.28, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US anti-dumping measures on certain hot-rolled steel products from Japan. 
8. The representative of the United States  said that his country had provided a status report in 
this dispute on 4 February 2005, in accordan ce with Article 21.6 of the DSU. As of 
23 November 2002, the US authorities had addressed most of the recommendations and rulings of the 
DSB in this dispute.  The US administration would work with the new Congress to address the 
remainder of these recommendations and rulings. 
9. The representative of Japan  said that, as his delegation had pointed out at the DSB meeting on 
25 January 2005, the re-extended deadline for the United States to implement the recommendations 
and rulings of the DSB in this proceeding would expi re on 31 July 2005.  Japan wished to maintain its 
trust in the pledges the United States was making to wards its full implementation, but it was greatly 
disillusioned by the fact that little progress had been  made thus far, and that no single bill had yet 
been introduced to the US Congress to address this  matter.  Japan sincerely hoped that the fully-
fledged implementation of the DSB's recommendations and rulings would take effect at the earliest 
opportunity during the remaining 164 days.  The cred ibility of the dispute settlement system and of 
the WTO relied upon each Member's compliance with  the DSB's recommendations and rulings and 
prompt implementation thereof.  If the United States  fell short of implementation by the end of July, 
Japan would be entitled to the recourse provided fo r under the DSU provisions in order to safeguard 
its rights and interest. 
10. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
 WT/DSB/M/183 
Page 4  
 
(c) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.13 – WT/DS234/24/Add.13) 
11. The Chairperson
 drew attention to document WT/D S217/16/Add.13 – WT/DS234/24/Add.13, 
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. 
12. The representative of the United States  said that his country had provided a status report on 
4 February 2005, in accordance with Article 21.6 of th e DSU.  As noted in the report, legislation to 
bring the Continued Dumping and Subsidy Offset Ac t into conformity with US WTO obligations had 
been introduced in the last Congress.  In additi on, on 7 February 2005, af ter the United States had 
submitted its status report, the US administrati on had proposed repeal of the CDSOA in its budget 
proposal for fiscal year 2006.  The US administra tion would work with the new Congress to enact 
legislation, and would continue to confer with the complaining parties in these disputes, in order to 
reach mutually satisfactory resolutions of these matters. 
13. The representative of th e European Communities  said that the EC welcomed the fact that the 
US President's budget called for a repeal of the Continued Dumping and Subsidy Offset Act.  
However, the same proposal had been made in 2004  as well as in 2003, but there had been absolutely 
no action in the US Congress.  The failure of th e United States had directly resulted in increasing 
impairments caused to other WTO Members.  The to tal amount distributed thus far was more than 
US$1 billion and the President's budget forecasted th at the distribution to start on 1 October 2005 
would amount to US$1,6 billion.  Another round of illegal disbursements under the Byrd Amendment 
would be unacceptable.  The EC expected the US administration to work actively with Congressional 
leaders in order to ensure rapid compliance with the US obligations under the WTO.  In the absence 
of such immediate action, the EC would have no ot her option than to exercise its retaliation rights. 
14. The representative of Japan  said that it was regrettable that his country had to repeat its call 
for the United States to comply with the WTO ruli ngs in this proceeding by way of repealing the 
WTO-inconsistent CDSOA.  It had been reported that in February 2005 the US administration had 
proposed, for the third time, repealing the CDS OA in its annual budget recommendations to the US 
Congress.  On the other hand, congressional propon ents of the CDSOA had continued their blunt 
refusal to implement the DSB's recommendations a nd rulings and had adhered to the idea that a WTO 
Member should be able to use its levied an ti-dumping or countervailing duty money to subsidize 
domestic industry.  Japan was greatly concerned about such an outright disregard of the WTO 
obligation by a major trading Member.  Japan strongl y urged the US administration to prompt the US 
Congress to repeal the CDSOA by taki ng the necessary legislative actions  before it needed to exercise 
its retaliatory rights. 
15. The representative of Canada  said that his country, once again, noted the status report of the 
United States and its continued failure to comply with its WTO obligations in regards to the Byrd 
Amendment.  He recalled that Canada had conducted an extensiv e public consultation process with 
Canadians on its retaliatory opti ons.  Canada was assessing comments received from Canadians on its 
retaliatory options. The US status report indicated that  "the US Administration will work with the 
current Congress ...  to enact legislation".  Canada would like to know what concrete steps were being 
taken by the US administration for the repeal of the Byrd Amendment.  It had now been two years 
since the DSB had adopted the Appellate Body's decision, finding the By rd Amendment to be 
inconsistent with US trade obligations.  Canada's  position was clear; the path to avoiding retaliation 
was to repeal the Byrd Amendment. Clearly, the specter of retaliation would be removed once the 
United States brought itself into compliance and repe aled the Byrd Amendment.   Canada again called 
upon the United States to end this dispute and to repeal the Byrd Amendment. 
16. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/183 
 Page 5 
 
 
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.3) 
17. The Chairperson  drew attention to document WT/DS160/24/Add.3, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning Section 110(5)  of the US Copyright Act. 
18. The representative of the United States  said that his country had provided a status report in 
this dispute on 4 February 2005, in accordance with Ar ticle 21.6 of the DSU.  As noted in the report, 
the US administration had been consulting on this matter with the US Congress. The US administration would continue to work with the C ongress and confer with the EC in order to reach a 
mutually satisfactory resolution of this matter. 
19. The representative of th e European Communities
 said that the status report submitted by the 
United States was identical in all respects to the pr evious one, except that the reference to the US 
Congress convening in January 2005 had been dropped – quite logically – in the February status 
report.  That was the only change that the EC had be en able to identify in the US status report, which 
was once again a collection of uninformative a nd repetitive statements. The EC was extremely 
disappointed with the lack of any initiatives by the US administration or by the US Congress to bring 
the US Copyright Act into compliance with the TRI PS Agreement. The systemic implications of this 
situation had gone well beyond this case.  Also, the Un ited States seemed ready to lose, step by step, 
all the credit that it had as a sponsor of intellect ual property protection around the globe.  Indeed, if a 
Member was not able to comply with the rules on intellectual property, more than four years after the adoption of a WTO ruling, how could such a Member ask  others to respect those rules.  In order to 
break the current impasse, the EC would invite the United States to explain in concrete terms what 
was the substance of the consultations that the US administration stated to be conducting with the US 
Congress.  Similarly, the EC wished to make clear that, contrary to what was indicated in the US 
status report, the US administration was not conferring with the EC in order to reach a mutually satisfactory resolution of this matter.  The EC regr etted very much this situation because it was more 
than willing to handle this as well as all other dis putes in a co-operative manner.  The EC hoped that 
the United States was ready to follow the same cons tructive approach.  Finally, the EC wished to 
recall that it had reserved its right to reactivate, at any point in time, the arbitration proceedings 
pursuant to its retaliation request. 
20. The representative of the United States
 said that his delegation wished to respond to the EC's 
comments made both under this agenda item as well as the previous one.  The EC's comments on the 
US intellectual property rights record were thor oughly unfounded.  The United Sates was second to 
none in providing strong protection for intellectual property rights.  The United States wondered if the 
EC would consider that a Member's discriminatory  denial of intellectual property protection for GIs 
would mean that a Member was losing credibility as a protector of intellectual property rights.  At the same time, the United States also  wished to take this opportunity to comment on a number of 
Members' suggestions that the US compliance record was poor and made a couple of points.  The 
United States had been involved in  quite a large number of disputes and its compliance record overall 
was quite good.  No WTO Member had been asked to  undertake the changes to its tax system, which 
the United States had been called on to make as a resu lt of the FSC/ETI dispute.  Yet, in 2004, the US 
Congress had repealed the ETI, as well as the 1916 Anti-Dumping Act.   The United States had 
indicated that it would comply in other disputes a nd it would do so.  Indeed, as noted previously, the 
United States had already taken most steps necessary to comply in the "US – Hot-Rolled Steel 
Products" dispute. 
21. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/183 
Page 6  
 
(e) Mexico – Measures affecting telecommunications services:  Status report by Mexico 
(WT/DS204/9/Add.2) 
22. The Chairperson
 drew attention to document WT/DS204/ 9/Add.2, 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. 
23. The representative of Mexico
 said that on 4 February 2005, pursuant to Article 21.6 of the 
DSU, his country had submitted its most recent stat us report regarding implementation in the case:  
"Mexico – Measures Affecting Telecommunications Se rvices" (WT/DS204).  In that status report, 
Mexico had provided information concerning the notification of an agreement on implementation 
reached by Mexico and the United States.  Pursuant  to that agreement, Mexico had a reasonable 
period of time for implementation of 13 months, wh ich would expire in July 2005.  Mexico had 
complied with the first phase of that agreement, wh ich had been notified accord ingly.  Furthermore, 
Mexico was drafting regulations for the establis hment of commercial agencies.  Once these were 
developed, Mexico would fully comply w ith the DSB's recommendations and rulings. 
24. The representative of the United States  said that his country wished to thank Mexico for its 
status report.  The United States was looking forw ard to planned consultations with Mexico on the 
development of regulations allowing the resale of international telecommunication services, as 
Mexico worked to complete its implementation of the DSB's recommendations. 
25. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
2. United States – Continued suspension of obligations in the EC - Hormones dispute 
(a) Request for the establishment of a panel by the European Communities (WT/DS320/6)  
26. The Chairperson  recalled that the DSB had consider ed this matter at its meeting on 
25 January 2005 and had agreed to revert to it.  She then drew attention to the communication from 
the European Communities contained in document WT /DS320/6, and invited the representative of the 
European Communities to speak. 
27. The representative of the European Communities  recalled that at the 25 January DSB 
meeting, the United States had stated that it was in the course of reviewing the relevant studies and 
documents, but thus far had failed to see how the revised EC's measures could be considered to 
implement the DSB's recommendations and rulings . The EC wished to know how much time the 
United States thought it still needed in order to arrive  at a conclusion on this – after more than a year 
since the adoption of the new EC - Hormones Directive.  He recalled that the United States had 
received from the EC all relevant information at the time.  Thus, already for a long time, the United 
States had been in possession of all the information it needed.  The EC would nevertheless give a reply to the US request under Article 5.8 of the SP S Agreement, in due course, but failed to see how 
that could effect a conclusion on this matter.  B ecause the United States continued to be unwilling to 
act in accordance with it s obligations under the DSU, the EC ag ain requested the establishment of a 
panel and was glad that the DSB would establish a panel at the present meeting. 
28. The representative of the United States
 said that his country regretted that the EC had chosen 
to proceed with its panel request. It was particul arly regrettable that the EC was doing so at the 
present meeting.  Among other things, the United States had still not received a response to the request by the United States, dated 13 December 2004,  made under Article 5.8 of the SPS Agreement, 
for an explanation of the reasons for the restricti ons contained in the EC's new measure.  The United 
States would have hoped that the EC would have be en willing to provide the scientific evidence and 
explanation sought by the United States in that requ est prior to seeking a panel.  The United States did  WT/DSB/M/183 
 Page 7 
 
 
not wish to repeat at the present meeting all th e points that it had made at the 25 January DSB 
meeting.  The United States believed that the EC's cl aims lacked merit and was confident that a panel 
would so agree. 
29. The DSB took note  of the statements and agreed  to establish a panel in accordance with the 
provisions of Article 6 of the DSU w ith standard terms of reference.  
30. The representatives of Australia , Canada , China , Mexico  and Chinese Taipei  reserved their 
third-party rights to participate in the Panel's proceedings.  
3. Canada – Continued suspension of obligations in the EC - Hormones dispute 
(a) Request for the establishment of a panel by the European Communities (WT/DS321/6) 
31. The Chairperson  recalled that the DSB had consider ed this matter at its meeting on 
25 January 2005 and had agreed to revert to it.  She then drew attention to the communication from 
the European Communities contained in document WT /DS321/6, and invited the representative of the 
European Communities to speak. 
32. The representative of the European Communities  said that the statement made by his 
delegation under the previous agenda item in the c ontext of the EC's dispute with the United States 
applied to Canada as well, therefore, he did not wish to repeat that statement.  Since Canada continued 
to be unwilling to act in accordance with its oblig ations under the DSU, the EC again requested the 
establishment of a panel and was glad that the DS B would establish a panel at the present meeting.  
33. The representative of Canada  said that his country wished, once again, to express its 
disappointment with the manner in which the EC had approached this issue.  The EC knew well that 
Canada's measures had been taken pursuant to an authorization from the DSB to suspend concessions. 
That authorization had been granted as a result of the EC's failure to bring itself into compliance 
within a reasonable period of time in the EC - Ho rmones dispute.  That authorization remained in 
effect. The EC stated that it now "considers itsel f" to have complied with the DSB's rulings and 
recommendations.  Yet there had been no multilateral confirmation of this compliance, nor had the 
EC attempted to seek such confirmation.  Rather , the EC would have Members believe that its 
unilateral determination and decl aration of compliance overrode a nd annulled Canada 's multilateral 
authorization.  This position was le gally untenable.  Canada, therefore,  awaited with interest the case 
the EC would have to make in this dispute for how its import prohibition – which the DSB had ruled 
to be inconsistent in 1998 and wh ich remained in place until now – could be compliant with the EC's 
obligations under the WTO. 
34. The DSB took note  of the statements and agreed  to establish a panel in accordance with the 
provisions of Article 6 of the DSU w ith standard terms of reference.  
35. The representatives of Australia , China , Mexico , Chinese Taipei  and the United States  
reserved their third-party rights to par ticipate in the Panel's proceedings.  
4. United States – Tax treatment for "Foreign Sales Corporations" 
(a) Second recourse to Article 21.5 of the DSU by the European Communities:  Request for the 
establishment of a panel (WT/DS108/29) 
36. The Chairperson  recalled that the DSB had consider ed this matter at its meeting on 
25 January 2005 and had agreed to revert to it.  She then drew attention to the communication from 
the European Communities contained in document WT/DS108/29, and invited the representative of 
the European Communities  to speak. WT/DSB/M/183 
Page 8  
 
37. The representative of the European Communities
 said that, as his delegation had already 
stated previously, the repeal of the FSC/ETI repr esented a welcome step towards solving this long-
standing dispute. In recognition of this fact the EC had accordingly stated that it would suspend its 
countermeasures on US products.  This was now the case.  In particular, on 31 January 2005, the EC 
Council of Ministers had adopted a measure (Regulat ion 171/2005) which provided for the suspension 
of the application of additional duties on all US products; moreover, such suspension was retroactive 
as from 1 January 2005.  This suspension was, of course, without prejudice to the EC's rights under Article 22 of the  DSU.  He wished to underline that the suspension of the countermeasures did not 
only reflect the wish of the EC to respond positively to the US action, but perhaps more importantly to 
demonstrate the conviction of the EC that a WT O Member should not unilaterally pass judgment upon 
implementation actions of another WTO Member a nd, as a consequence, unjustifiably maintained 
sanctions, but should rather pursue its complaints un der the appropriate DSU procedures;  i.e. in the 
form of an Article 21.5 panel.  This was precisely what the EC was requesting at the present meeting, namely, that the DSB establish a panel under Article 21.5 of the DSU to determine the WTO-compatibility of the US measures.  The EC stressed that its request  to establish a panel was without 
prejudice to  its continuous readiness to explore with  the United States alternat ive ways to put an end 
to this long-standing dispute. 
38. The representative of the United States
 said that, as his delegation had noted at the 
25 January 2005 DSB meeting, as a result of the US American Jobs Creation Act of 2004, the ETI tax 
benefits had been repealed.  What remained – a nd what the EC was challenging – were transition 
rules.  Many times the United States had asked th e EC to identify any particular commercial problem 
caused by these transition rules.  The EC had neve r identified any.  Therefore, the United States 
continued to be profoundly disappointed by the EC's  decision to prolong this dispute by requesting the 
establishment of yet another panel. 
39. The DSB took note  of the statements and agreed , pursuant to Article 21.5 of the DSU, to refer 
to the original Panel, if possible, the matter  raised by the European Communities in document 
WT/DS108/29. The Panel would have standard terms of reference. 
40. The representatives of Australia  and China  reserved their third-party rights to participate in 
the Panel's proceedings. 
5. United States – Measures relating to zeroing and sunset reviews 
(a) Request for the establishment of a panel by Japan (WT/DS322/8) 
41. The Chairperson  drew attention to the communication from Japan contained in document 
WT/DS322/8 and invited the representative of Japan to speak.  
42. The representative of Japan  said that his country was requesting the establishment of a panel 
in this dispute. The issues that Jap an had raised in this dispute we re the inconsistencies of the US 
zeroing  methodology used for calculating dumping marg ins, and the incorporation of the result of a 
calculation using zeroing in the US anti-dumping pr ocedures, with the WTO Agreements, both "as 
such" and "as applied," and were described in de tail in Japan's request.  Zeroing artificially and 
unfairly inflated the overall margin of dumping.  As  confirmed by the Appellate Body in the "US – 
CRS Sunset Review"  case (DS244), it distorted not only the magnitude of a dumping margin, but also 
the finding of the very existence of dumping.  The Panel and the Appellate Body  had consistently held 
through cases such as "EC – Bed Linen" (DS 141) and "US – Softwood Lumber from Canada" 
(DS264) that such zeroing procedures were incons istent with Articles 2.4 and 2.4.2 of the Anti-
Dumping Agreement.  As a corollary of the inhere nt unfairness of zeroing, any procedure in an anti-
dumping procedure consequent upon the results of a calculation of a dumping margin, which used 
zeroing, were also inconsistent with the WTO Ag reements.  Japan considered that the US laws, 
regulations, and administrative procedures, or any adop tions or applications thereof, which set out the  WT/DSB/M/183 
 Page 9 
 
 
use of or otherwise incorporated zeroing were in consistent with the Anti-Dumping Agreement, the 
GATT 1994 and the Marrakesh Agreement.  As manif ested by the specific c ases set out in Japan's 
panel request, the use of zeroing had led to the collection of anti-dumping duty where none should have been collected, and the Japan ese companies had suffered serious lo sses as a result.  Japan had 
held consultations with the United States on 20 D ecember 2004 to resolve these issues.  However, 
these consultations had not led to a mutually agreeable  solution to this dispute.  Accordingly, Japan 
requested the establishment of a panel to examine th e WTO compatibility of the US  measures in this 
dispute as set out in Japan's panel request , with standard terms of reference. 
43. The representative of the United States
 said that his country was disappointed that Japan had 
requested a panel on this matter.  Japan's request w as broad, but without merit.  The United States 
intended to vigorously defend the measures at issue.  In that regard, the United States noted that not 
all of the materials identified by Japan in its pane l request were "measures," including, for example, 
the Statement of Administrative Action.  In light of these considerations, the United States was not in a position to accept the establishment of a panel at the present meeting. 
44. The representative of the European Communities
 recalled that in August 2004, the DSB had 
adopted the Panel and the Appellate  Body Reports in the "US - Soft wood Lumber" dispute, which had 
found that the US calculation methodology of the dumping margin, including the practice of zeroing was in breach of the Anti-Dumping Agreement.  In  similar circumstances, following the findings in 
the "Bed Linen" dispute, the EC had decide d to avoid unnecessary litigation and had gone beyond 
what implementation strictly required.  The EC had ceased to apply this practice in conformity with 
the WTO rules.  The United States had instead chosen  to ignore the wider implications of the DSB's 
ruling.  Although the latter only pertained to the measure against softwood lumber, it was clear, that 
the US practice of zeroing was fundamentally WTO- inconsistent.  And the EC was extremely worried 
by the US preliminary finding of 31 January 20 05 purporting to implement the softwood lumber 
ruling.  The United States had expl icitly continued the practice of zeroing and had increased the duty 
rate for the exporters concerned.  It seemed that the United States was trying everything to keep its 
practice as long as possible. The US  attitude forced other Members to multiply the dispute settlement 
cases.  At the present meeting,  Japan was requesting the establishment of a panel,  inter alia , on this 
issue.  The EC had an ongoing dispute on zeroi ng that covered both US law and 31 measures.  
Zeroing was one of the claims raised by Mexico  in two ongoing disputes against the United States. 
Recently, over one month, the use of zeroing by the United States had led Thailand and Mexico to 
request WTO consultations.  Instead of wasting the time and resources of the WTO and its Members 
by trying to defend further cases, the United Stat es should do what the EC had done and abolish the 
practice of zeroing as soon as possible. 
45. The representative of the United States
 said that with respect to the EC's suggestion that the 
United States should follow the EC's approach to implementing DSB rulings on so-called zeroing, his 
delegation had a question about the suggestion:  Woul d the EC care to explain its approach, that is, 
how the EC had been implementing dumping comparisons  in investigations?  On the issue of zeroing 
more broadly, the United States understood that the EC  did not believe that zeroing was prohibited in 
administrative reviews. 
46. The DSB took note  of the statements and agreed to revert to this matter.  
6. Japan – Import quotas on dried laver and seasoned laver 
(a) Request for the establishment of a panel by Korea (WT/DS323/2) 
47. The Chairperson  drew attention to the communicati on from Korea contained in document 
WT/DS323/2 and invited the representative of Korea to speak.  WT/DSB/M/183 
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48. The representative of Korea
 said that Japan had been maintaining extremely restrictive import 
quotas on dried laver and seasoned laver for more th an 50 years.  Korea believed these quotas were 
patently inconsistent with Japan 's obligations under the WTO, in particular Article XI of the 
GATT 1994.  Following its request for consultations  on 1 December 2004, Korea had discussed this 
matter with Japan on 23 December 2004 and 21 Janua ry 2005.  As these consultations had failed to 
result in a mutually satisfactory solution, Korea re quested the DSB to establish a panel with standard 
terms of reference. 
49. The representative of Japan  said that his country regretted th at Korea had decided to proceed 
with the request for the establishment of a panel on th is matter.  Japan considered that its import quota 
system on dried and seasoned laver, which Korea challe nged in this dispute was fully consistent with 
the relevant provisions of the WTO Agreement.   In its request for consultation, dated 
1 December 2004, Korea claimed that Japan's import quotas on dried and seasoned laver were 
inconsistent with several provisions of the WTO Ag reements.  Contrary to Korea's view, these import 
quotas had been duly notified to the WTO, mainta ined and administered in accordance with the 
relevant disciplines under the WTO Agreement.  Jap an sincerely responded to Korea's request for 
consultation and the two Members had held such consultations on 23 December 2004 and 
21 January 2005.  It was disappointing that these c onsultations had not led to a resolution of the 
dispute.  Japan firmly believed that its impor t quota system on dried and seasoned laver was WTO-
consistent.  Japan could not agree with Korea's view  in this regard and, therefore, was not in a 
position to accept the establishment of a panel. 
50. The DSB took note  of the statements and agreed to revert to this matter.  
7. Election of Chairperson 
51. The outgoing Chairperson  recalled that at its meeting on 15 February 2005, the General 
Council had taken note of the consensus on a slate of  names for Chairpersons to a number of WTO 
bodies, including the DSB.  On the basis of th e understanding reached by the General Council, she 
proposed that the DSB elect, by acclamation, Ambassador Eirik Glenne (Norway) as Chairperson of 
the DSB.  
52. DSB so agreed . 
53. The outgoing Chairperson  said that, before handing over the chairmanship to 
Ambassador Eirik Glenne, she wished to express her heartfelt gratitude to all Members for their enormous support and professionalism during her term as Chairperson of the DSB.  Together, it had 
always been possible to find pragmatic solutions to  problems which had arisen, thus enabling the DSB 
to fulfil its important role in the multilateral tr ading system.  The DSB was quite a unique body and 
not only because of the frequency of meetings, but also because of the manner in which these 
meetings had been conducted.  It had always been business-like with delegations working mostly in a 
very constructive spirit.  She said that she ha d acquired a great amount of knowledge about the 
dispute settlement system and believed that th e experience she had acquired would no doubt be 
extremely helpful in her new role as the Chairperson of the General Council.  She hoped to be able to 
continue to count on Members' support in the coming months.  She thanked the Directors of the Council & TNC Division, the Legal Affairs Division a nd the Appellate Body as well as their staff for 
support and advice over the past 11 months.  Without that support it would have been difficult for her 
to discharge her duties as Chairperson of the DS B.  Their sense of duty and professionalism were 
truly remarkable.  Finally, she thanked the interp reters for their patience and hard work, which had 
contributed to the success in the DSB.  She assured the incoming Chairperson that he would find 
chairing this important body a deli ghtful and rewarding experience. 
54. The incoming Chairperson
 thanked Members for electing him as Chairperson of the DSB.  
Members showed confidence in him and he hoped that he would be able to live up to their  WT/DSB/M/183 
 Page 11 
 
 
expectations.  One thing that he wished to promis e was that he would do his very best to uphold the 
high esteem of the DSB.  He thanked the outgoing Chairperson for the very good job that she had done for the WTO.  She was now going on to even higher responsibilities and he promised to support 
her and wished her good luck. 
55. The DSB took note
 of the statements.  
 
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