RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/265 
29 April 2009 
 (09-2077) 
Dispute Settlement Body 
19 February 2009  
 
 
    
MINUTES OF MEETING 
 
Held in the Centre William Rappard
 
on 19 February 2009  
 
Chairman:  Mr. Mario Matus (Chile) 
 
 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...................................................................................6  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by 
the United States .............................................................................................................. ...........6  
(d) European Communities – Measures affecting the approval and marketing of biotech 
products:  Status report by the European Communities..............................................................7  
(e) European Communities – Regime for the importation, sale and distribution of bananas:  Second recourse to Article 21.5 by Ecuador:  Status report by 
the European Communities....................................................................................................... ..8
 
2. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ..........................................15  
(a) Statements by the European Communities and Japan ..............................................................15  
3. United States – Continued existence and application of zeroing methodology .................17  
(a) Report of the Appellate Body and Report of the Panel.............................................................17  
4. Election of Chairperson........................................................................................................ ..24 
 
 WT/DSB/M/265 
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  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.75) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.75) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.50) 
 
(d) European Communities – Measures affecting th e approval and marketing of biotech products:  
Status report by the European Communities (WT/DS291/37/Add.13 – WT/DS292/31/Add.13 – WT/DS293/31/Add.13) 
 (e) European Communities – Regime for the importation, sale and distribution of bananas:  
Second recourse to Article 21.5 by Ecuador:  Status report by the European Communities 
(WT/DS27/96/Add.1) 
 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 five sub-items to which he had just referred to be considered 
separately. 
(a) United States – Section 211 Omnibus Appropria tions Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.75) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.75, 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 6 February 2009, in accordance with Ar ticle 21.6 of the DSU.  As noted in that status 
report, a legislative proposal that would implemen t the DSB's recommendations and rulings in this 
dispute had been introduced in the new C ongress, which had convened in January 2009. 
4. The representative of the European Communities  said that at the present meeting, the 
United States was presenting its seventy-fifth status report on its lack of progress in the implementation of the DSB's ruling in this dispute.  The EC hoped that this would change and that the 
United States would take steps to implement the DSB's ruling. 
5. The representative of Cuba
 recalled that, at the DSB meeting on 19 February 2002, the 
United States had stated that it needed a reasonable period of time to implement the DSB's recommendations and rulings in the Section 211 disput e.  Seven years had now passed since then.  He 
said that his country did not know what the United States understood by "reasonable period of time."  Perhaps the United States was setting a precedent that  may be useful for other respondents to delay 
indefinitely the implementation of the DSB's ruli ngs.  If a Member like the United States was unable 
to modify its legislation in seven years, in order to bring it into conformity with WTO Agreements, 
the rest of the non-complying Members did not ha ve reason to act promptly.  Another reason of 
utmost concern was that the current dispute was not the only dispute involving the United States that had remained on the DSB Agenda for years because of failure to comply with the DSB's decisions.  It  WT/DSB/M/265 
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  was not an isolated incident.  This was now beco ming a pattern of behavi our, which was unacceptable 
to other Members since it affected their rights.   
6. At the 20 January 2009 DSB meeting, the United States had mentioned that a legislative 
proposal that would implement the DSB's rulings had been introduced in the new Congress.  It was a 
legislative proposal promoted by a congressman that called for the lifting of the economic, 
commercial and financial blockade imposed by the United States on Cuba for nearly 50 years.  The 
proposal had included, inter alia , the repeal of Section 211.  The draft proposal was introduced in the 
new Congress on 6 January 2009 but it was not new;  it came from the previous legislature.  Though it 
had been submitted to several Chamber Committees, no action had been taken with respect to this 
proposal and, as far as Cuba knew, the new US execu tive had not declared itself in its favour.  Cuba 
could not be too optimistic.  It was worth recalli ng that similar draft proposals had been rejected by 
the US administration in previous legislatures and th at those drafts had been defeated as a result of 
several manoeuvres.  The United States must respec t the work of the DSB, the DSU provisions, the 
TRIPS Agreement and other Members.  Those who ha d heard at the last DSB meeting that a proposal 
that would resolve this dispute had been introdu ced in the US Congress had probably imagined that it 
was a new bill aimed at repealing Section 211 onl y.  In accordance with the DSU provisions, the 
respondent must provide all the details in its stat us reports.  The United States was obliged to submit 
complete and detailed status reports.  It had been equally unable to do so in seven years.  Cuba had 
become accustomed to reading and listening to repetitive status reports that did not reflect reality.  However, Cuba had not heard that the United States  was doing something to bring its legislation in 
line with the TRIPS Agreement, according to the recommendations and rulings made by the DSB, as 
set out in Article 21.6 of the DSU.  Cuba woul d continue to remind the United States that each 
Member was responsible for ensuring the conformi ty of its laws, regulations and administrative 
procedures with its obligations under the WTO Agreem ents.  The foregoing was stipulated in Article 
XVI:4 of the Marrakesh Agreement.  Cuba had h eard at recent meetings of negotiating groups that, 
with the new government and Congress, the United St ates would review its positions.  Hopefully, the 
United States realized that it was affected, isol ated and increasingly discredited by its lack of 
compliance in this dispute.  A country that presen ted itself as the strongest advocate of intellectual 
property rights could no longer ignore the provisions of the TRIPS Agreement. 
7. The representative of Brazil
 said that his country thanked the United States for its status 
report in this dispute.  As stated before, Br azil remained concerned about the non-compliance 
situation in this dispute.  Brazil urged th e United States to fully implement the DSB's 
recommendations. 
8. The representative of Mexico  said that Articles 3.3 and 21.1 of the DSU, respectively, stated 
that the "prompt settlement" of di sputes was essential to the effec tive functioning of the WTO, and 
that "prompt compliance with recommendations or rulings of the DSB" was essential in order to 
ensure the effective resolution of disputes "to the be nefit of all Members".  Mexico urged the parties 
to heed these provisions and to take the measures required to achieve compliance, to the benefit both 
of the functioning of the WTO and of all Members. 
9. The representative of Nicaragua  said that her country had syst emic concerns about the proper 
functioning of the multilateral dispute settlement sy stem and urged the Member concerned to comply 
with the DSB's rulings in this case  without further delay.  The statem ents to this effect made month 
after month by numerous delegates failed to achie ve the desired outcome, and month after month, 
delegations heard renewed calls for prompt complia nce and objections had been raised that such 
conduct was an impediment to the proper functi oning of the dispute settlement system.  All WTO 
Members had the same rights and obligations.  Ni caragua was concerned about the protracted 
non-compliance since this caused enormous economic harm to the industries of the most vulnerable 
developing countries, which in turn affected job creation and the economy as a whole.  Section 211 of 
the US Omnibus Appropriations Act of 1998 had been  found to be in breach of Article 42 of the WT/DSB/M/265 
Page 4  
 
  TRIPS Agreement in that it limited, in specific circumstances, the right of trademark owners to have 
recourse to US civil judicial procedures in order to achieve the required compliance, thereby leaving 
the door open to infringements of intellectual prope rty rights in US territory.  The US failure to 
implement the DSB's recommendations undermined th e most important principles of the multilateral 
trading system and should not be tolerated.  A num ber of delegations, including Nicaragua, had asked 
the Member concerned to inform the DSB of the sp ecific measures it envisaged to bring Section 211 
into line with WTO rules without delay, but no repl y was forthcoming.  At the end of 2008, there had 
been expressions of encouragement for the new US  administration to take appropriate measures 
promptly in order to implement the DSB's rulings on this issue once and for all.  However, Nicaragua 
once again noted with regret that there had been  no progress and, what was worse, no sign that 
Members could reasonably expect to see compliance in the short term.  No parallel measures that 
failed to target the flaws in the system, no partial monitoring of the financial crisis, no meetings of 
trade ministers (whether in plenary or in groups) could do as much for the WTO's image and international credibility as the effectiveness and unfa iling reliability of its dispute settlement system. 
10. The representative of Bolivia
 reiterated her country's concern, once again, that no progress 
had been made in this case and noted that this  had consequences for the Organization.  The 
United States must comply with the DSB's rulings  and recommendations and lif t the restrictions under 
Section 211.  The United States must ensure that the WTO integrity was preserved.  Bolivia hoped that the new US administration would take the n ecessary measures in order to solve this dispute. 
11. The representative of China
 said that his country thanked the United States for its status report 
and the statement.  It was regrettable that the new US Congress had not begun to consider any 
implementation action pertinent to this case despite the endeavours of the US administration and the 
appeals of WTO Members.  As previous speakers had correctly pointed out, the situation of non-
compliance was seriously damaging the authority of  the TRIPS Agreement and the credibility of the 
WTO dispute settlement system.  China supported th e statements made by the EC and Cuba, and 
urged the United States to implement the d ecision of the DSB without further delay. 
12. The representative of Ecuador  said that his country thanked the United States for the status 
report and supported the statements  made by Cuba and other Members on this issue.  All WTO 
Members were required to respect the WTO Agreem ents.  Ecuador recalled that the United States, 
through the various WTO Councils and Committees, closely monitored the commitments undertaken 
by other Members and Ecuador expected it to set a good example.  After the bananas dispute, this was 
the longest-standing pending dispute in the Organization and in respect of which all WTO Members 
should express concerns.  Ecuador, once again, ur ged the United States to comply with the DSB's 
recommendations and rulings and to promptly repeal Section 211.  
13. The representative of Chile  said that the statement under the present Agenda item applied to 
all the various matters pursuant to Item 1 on the Ag enda.  Chile wanted to voice its concern that the 
long period of time had elapsed without compliance with the DSB's rulings pertaining to the various 
disputes.  It was not right for those old cases to be left pending without compliance.  Chile thought 
that the general level of compliance was good.  No twithstanding that, those matters which were left 
pending without full compliance gave rise to a very da ngerous situation for the system.  Chile wanted 
to encourage all the Members involved in those matte rs to promptly comply with the DSB's rulings 
and decisions. 
14. The representative of India  said that his country thanked the United States for the status report 
and its statement which was not different from the stat ements made in the past.  India wanted to renew 
its systemic concerns about this situation arising out of non-compliance in this dispute.  Despite the 
adoption of panel and the Appellate Body reports by  the DSB in this case several years ago, absence 
of compliance in this dispute was a cause of con cern for the WTO Membership.  India was confident  WT/DSB/M/265 
 Page 5 
 
 
  that the US administration would continue to wo rk with the US Congress in a constructive manner 
with a view to implement the DSB's recommendations. 
15. The representative of Thailand  joined previous speakers in th anking the United States for its 
status report and statement.  Thailand urged the United States to take all necessary steps to comply with its obligations under the TRIPS Agreement appli cable to this dispute.  Non-implementation of 
the DSB's rulings and recommendations undermined the integrity of the rules-based multilateral 
trading system.  
16. The representative of Viet Nam
 said that his country thanked the United States for its status 
report.  Like other Members, Viet Nam wanted to express its concern on the implementation of the DSB's rulings and recommendations in this disput e.  The prompt settlement of the dispute was 
essential for the effective functioning of the WTO.  Therefore, Viet Nam urged the United States to 
comply with the DSB's rulings and recommendations as soon as possible in order to contribute to the effectiveness of the WTO di spute settlement mechanism. 
17. The representative of the Bolivarian Republic of Venezuela
 said that his delegation noted the 
status report submitted by the United States under this  Agenda Item.  His country wished to echo the 
views, which had been expressed by many delegations  for a long time, that the United States end its 
economic, commercial and financia l blockade imposed on Cuba, including the application of the 
Helms-Burton Act.  By attempting to prevent th e development of foreign investment in Cuba 
associated with the international sale of Cuban produ cts with trademarks and trade names that enjoyed 
worldwide prestige, the United Stat es was causing that country irreparable damage.  Under the present 
financial crisis, which affected trade and would continue to affect it even more, the US position 
towards Cuba would cause even greater damage if the above-mentioned Act remained in force.  The 
United States had pushed back the deadlines for comp liance with the DSB's ruling.  By doing so, the 
United States had  undermined the WTO's credib ility because its failure to implement the DSB 
decisions had gone unpunished.  It was important to  point out that Cuban people also suffered as a 
result.  For six years now there had been a firm decision, taken by an institution that 
Member countries sought to reinforce because they be lieved in the benefits of multilateralism and the 
need to comply with the rulings in order to make  it stronger.  Yet there had been no compliance.  
Nevertheless, his country believed that if the United States repeal ed that Act, the new US authorities 
could give a positive signal as to their intentions  regarding multilateralism in trade and the WTO in 
the coming years.  His country, therefore, urged the United States to take steps, as a matter of urgency 
and necessity, to comply with the obligations in cumbent on it under the TRIPS Agreement, to which 
it was a signatory. 
18. The representative of the United States  said that his delegation regretted very much that some 
Members continued to criticize the US commitment to intellectual property rights.  The criticisms 
were completely unfounded.  It was of course tr ue that the United States remained a strong advocate 
of substantial protections for intellectual property internationally.  However, the United States also 
provided the highest standard of intellectual pr operty protection within its own territory.  The 
United States looked forward to continue to work  with all Members to secure the protection of 
intellectual property rights around the world.  In response to the suggestion that the US compliance record was poor, the facts simply did not support that  assertion.  To the contrary, the record showed 
that the United States had fully complied in the vast ma jority of its disputes.  As for the remaining few 
– and those few were a very small fraction of the total – the United States ha d been actively working 
towards compliance. 
19. The representative of Cuba
 said that his delegation was tired of hearing the same statements 
under this Agenda item.  The fact was that ther e were a number of pending unresolved cases under 
this Agenda item, and some of them  were not related to the TRIPS Ag reement.  He reiterated that the 
DSB's recommendations and rulings were not like a menu of options from which to choose.  All WT/DSB/M/265 
Page 6  
 
  rulings had to be respected, if not, the credibilit y of the WTO and the DSB would be undermined.  
When a major developed country did not comply with the DSB's rulings, there would be serious 
economic consequences. 
20. 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.75) 
21. The Chairman  drew attention to document WT/DS184/ 15/Add.75, 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. 
22. The representative of the United States  said that the United States had provided a status report 
in this dispute on 6 February 2009, in accord ance with Article 21.6 of the DSU.  As of 
23 November 2002, the US authorities had addresse d the DSB's recommendations and rulings with 
respect to the calculation of anti-dumping margins in the hot-rolled steel anti-dumping duty investigation at issue in this dispute.  Details were provided in the document numbered 
WT/DS184/15/Add.3.  With respect to the recommenda tions and rulings of the DSB that had not been 
already addressed by the US authorities by 23 November 2002, a new US administration had taken office in January 2009.  The new US administration would work with the US Congress with respect to 
appropriate statutory measures that would resolve this matter. 
23. The representative of Japan
 said that his country thanked the United States for its statement 
and its latest status report.  As had been repor ted, the United States had taken certain measures to 
implement part of the DSB's recommendations in November 2002.  Since then, however, there had 
been little tangible progress for the remaining part  of the DSB recommendations and rulings.  A full 
and prompt implementation of the DSB's recommenda tions and rulings was "esse ntial to the effective 
functioning of the WTO and the maintenance of a proper balance of the rights and obligations of 
Members"1.  Japan hoped that the United States would fully implement the DSB's recommendations 
in this long-standing dispute without further delay. 
24. 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.50) 
25. The Chairman  drew attention to document WT/DS160/ 24/Add.50, 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 6 February 2009, in accordance with Article 21.6 of the DSU.  The US administration 
would work closely with the US Congress and continue  to confer with the European Communities, in 
order to reach a mutually satisfactory resolution of this matter. 
27. The representative of the European Communities  noted that this was the fiftieth time the 
United States reported on continue d non-compliance without offering any concrete means to bring 
                                                      
1 Article 3.3 of the DSU.  WT/DSB/M/265 
 Page 7 
 
 
  itself into compliance.  He said that there had been 50 DSB meetings without progress and that the EC 
was still waiting for compliance. 
28. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(d) European Communities – Measures affecting the approval and marketing of biotech products:  
Status report by the European Communities (WT/DS291/37/Add.13 – WT/DS292/31/Add.13 
– WT/DS293/31/Add.13) 
29. The Chairman  drew attention to document WT/D S291/37/Add.13 – WT/DS292/31/Add.13 – 
WT/DS293/31/Add.13, which contained the status report by the European Communities on progress 
in the implementation of the DSB's recommendations in the case concerning the EC's measures 
affecting the approval and mark eting of biotech products. 
30. The representative of the European Communities  said that recent developments showed that 
the EC regulatory procedures on biotech products c ontinued to work normally.  Draft Commission 
decisions on authorization of cultivation of GM  maize 1507 and Bt11 would be presented to the 
regulatory Committee at the end of February.  Dr aft authorization decisions on two other maize 
applications which had received a positive opinion by EFSA (maize 59122×NK603 and MON89034) 
would also be adopted soon.  With respect to na tional bans, draft decisions on several measures 
prohibiting cultivation of GM maize MON810 (France, Hungary, Greece) would be discussed at standing committee meeting/Council in the coming weeks.  The European Commission had also 
adopted a draft decision on the Austrian measure c ondemned by the Panel.  The previous month, the 
EU Agriculture Council had voted on two draft author ization decisions on a GM oilseed rape (T-45, 
of interest to Canada) and a GM carnation.  Once these products were approved, 21 authorizations 
would have been made since the establishment of the Panel.  The EC believed that the progress 
described in such a sensitive ar ea showed that the only appropr iate way forward was dialogue and 
cooperation.  The EC remained open to conti nue discussions with the three complainants. 
31. The representative of the United States
 said that his country thanked the EC for its status 
report, and its statement.  Unfortunately, recent de velopments had not addressed US concerns with the 
EC's treatment of biotech products.  At rece nt DSB meetings, the United States had addressed 
concerns regarding the backlog of approximately 50 pending applications, a nd the commercial impact 
of the delays in EC decision-making.  At the presen t meeting, the United States would focus attention 
on the DSB's recommendations and rulings regarding EC  member State measures.  In particular, the 
DSB had found that nine EC member State measures banning biotech products, approved by the EC 
prior to the moratorium, were not based on risk assessments and thus breached the EC's obligations 
under the SPS Agreement.  The EC had yet to addr ess each of those member State measures.  For 
example, Austria continued to ban the cultivation of an insect-resistant maize variety that the 
Commission approved for cultivation prior to the mora torium.  In member States that did not ban its 
use, EC farmers had chosen to grow it in increasi ng quantities, without any adverse effects on health, 
safety, or the environment.  In December, the EC 's own scientific committee had again found that this 
variety of maize was safe, and that Austria had no basi s for its ban.  Yet, more than two years after the 
DSB's adoption of its recommendations and rulings, Au stria's ban remained in place.  Moreover, not 
only had the EC failed to remove the Austrian ban, but it had allowed this unjustified ban to spread to 
additional jurisdictions.  In particular, France, Gre ece, and Hungary have all banned this same variety 
of maize.    
32. On Monday, 16 February, the Commission had submitted to an EC regulatory Committee a 
measure that would direct Greece and France to lift the ban that they had imposed on this variety of maize.  The measure was supported by a formal re port of the EC's own scientific committee showing 
that the Greek and French bans lacked any scien tific justification.  Yet the Committee failed to WT/DSB/M/265 
Page 8  
 
  approve the measure.  This meant that the unjustif ied bans would be maintained within Greece and 
France unless, and until, further action was taken.  In  sum, the United States re mained very concerned 
with the state of the EC's compliance with the DSB's recommendations and rulings on the unjustified 
member State bans on particular biotech products.  Not only did some of the unjustified bans remain 
in place, but they had been extende d to additional jurisdictions with in the EC.  The United States 
thanked the DSB for its continuing attention to this matter. 
33. The representative of Argentina
 said that his country thanked the EC for its status report and 
the statement.  Argentina, however, noted with con cern that authorizations in the EC member States 
proceeded at a slow pace.  Notwithstanding this, Ar gentina and the EC had held a meeting in Brussels 
with a view to continuing in the same spirit of cooperation which had preva iled to date.  Argentina 
renewed its commitment to continue to work together with the parties involved and, in particular with 
the EC, with a view to finding a definitive solution to this case. 
34. The representative of Canada  said that her country thanked the EC for its statement.  As had 
been said in previous meetings, Canada valued th e constructive dialogue it had had to date with the 
EC.  However, Canada had ongoing concerns, most not ably regarding member State bans in place on 
the cultivation and marketing of approved biotech pr oducts.  For example, just a few days ago, the 
EC's Standing Committee on Food Chai n and Animal Health had faile d to agree to ask Greece and 
France to repeal their safeguard measures against the cultivation of GM maize MON810.  This was so 
despite opinions from the European Food Safety Au thority (EFSA) that the cultivation of MON810 
maize was unlikely to have any a dverse effects on human or animal health, or on the environment.  
Canada also remained deeply concerned that undue  delays were reappearing in the EC approval 
system for biotech products.  Canada would continue to monitor the situation closely. 
35. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(e) European Communities – Regime for the importation, sale and distribution of bananas:  
Second recourse to Article 21.5 by Ecuador:  Status report by the European Communities 
(WT/DS27/96/Add.1) 
36. The Chairman  drew attention to document WT/DS27/ 96/Add.1, which contained the status 
report by the European Communities on progr ess in the implementation of the DSB's 
recommendations and rulings in the case concerning the EC's regime for the importation, sale and 
distribution of bananas.   
37. The representative of the European Communities  said that the EC stood ready to implement 
the recommendation made in Ecuador's Report by mean s of modifying its bound duty.  The EC still 
hoped that this rebinding could be made in th e context of a comprehensive agreement with 
Latin American suppliers, an agreement that  had been sought since the EC had initiated 
GATT Article XXVIII negotiations back in 2004.  Th e EC was fully committed to finding, very soon, 
a final solution to this long-standing "banana saga".  Alongside this commitment, the EC had started, 
on 10 February 2009, negotiations not only with Ec uador, but also with other MFN suppliers with 
rights to reach an agreement regarding the rebinding of the EC tariff on bananas.  The requests made 
to the EC to simply sign the draft agreement est ablished in the margins of the July Ministerial 
Meeting in 2008 simply disregarded the fact that th e signature of that agreement was subject to the 
successful adoption of the DDA Agriculture modaliti es.  Having said that, the EC was now engaged 
in negotiations to discuss the possibility of concl uding a draft agreement with a number of elements 
based on the July 2008 text, subject to necessary ad justments to the current situation, and the EC 
hoped that all banana suppliers  would constructively engage in the necessary discussions.  WT/DSB/M/265 
 Page 9 
 
 
  38. The representative of the United States  noted that this was the EC's thirty-second status report 
in this dispute.  The first one had been filed in July 1998 – that was more than 10 years ago.  The United States would like to recall, once again, the point that it had made previously regarding the 
Panel and the Appellate Body's conclusion that  the "DSB recommendations and rulings from the 
original proceedings remain in effect until the Eu ropean Communities brings itself into substantive 
compliance".
2  In this connection, the United States wa s extremely disappointed that, once again, the 
EC entitled its status report as a document appl ying only to Ecuador's proceeding.  At the 
20 January 2009 DSB meeting, the EC had suggest ed that there was no longer a compliance issue 
with respect to the recommendations and rulings that the United States and the other complaining 
parties had obtained because the measure had ceased to exist.  Yet, all knew that there was no Panel or 
Appellate Body Report that found that the EC wa s in compliance with its WTO obligations with 
respect to its bananas import regime.  If the EC believed that it had implemented the DSB's 
recommendations and rulings with whatever measure or measures it had put in place, why was the EC 
reluctant to provide Members with the information?   Moreover, the United States again noted that in 
the report that the EC had filed, the EC again provided no information as to how the bananas import 
regime, that it had allegedly introduced on 1 Janua ry 2008, was in compliance with its obligations 
under Articles I and XIII of the GATT 1994.  The United States failed to understand how the EC 
could have omitted these elements from its report. 
39. With respect to the GATT Article II-inconsistenc y in Ecuador's proceeding, the EC, in its 
most recent status report, stated that it was "r eady to resume negotiations with Latin American 
supplying countries in view of promptly concluding a comprehensive agreement on bananas that 
would establish, among other elements, the level of th e new EC bound tariff duty".  The United States 
understood this to mean that the EC was making compliance with the DSB's recommendations and rulings contingent upon the results of a much broader and distinct set of negotiations.  The 
United States, once again, reminded the EC that it was required to reduce its bananas tariff as a dispute settlement compliance matter.  The United St ates hoped that at the next DSB meeting it would 
receive a comprehensive status report with a comp rehensive explanation of how the EC intended to 
come into substantive compliance with its obligat ions, as well as a description of the progress it was 
making towards that end. 
40. The representative of Ecuador
 said that his country thanked the EC for its status report.  
However, in that report, the EC provided no i ndication as to when it would comply with the DSB's 
recommendations and rulings.  Furthermore, the EC had again denied the existence of the Geneva 
Agreement on bananas reached with the principal MF N suppliers on 27 July 200 8.  Ecuador regretted 
that the EC did not express any readiness to honour that Agreement.  On the contrary, the EC had 
recently made a proposal to MFN suppliers.  Th at proposal lacked any balance between the 
commitments that were expected of MFN suppliers and those to be undertaken by the EC.  It linked 
tariff cuts to the conclusion of the Doha Round moda lities.  It introduced further conditions in areas 
unrelated to compliance with the DSB's recomme ndations and rulings, and to the compensation 
resulting from the EC's enlargements in 2004 and 2007 under Article XXVIII of the GATT 1994.  It 
contained a provision whereby a matter inextricably linked to compliance should be approved by the General Council.  Ecuador again called upon the EC to sign the Banana Agreement of 27 July 2008 in 
order to end this long-standing dispute and to avoi d recourse to retaliation by  Ecuador or new legal 
complaints.  Ecuador pointed out that a unilateral decision by the EC would have serious legal and 
systemic implications.  Finally, Ecuador was surprised that the EC had not as yet submitted any status 
report on the DSB's recommendations and rulings in the proceedings brought by the United States 
under Article 21.5 of the DSU and with regard to ot her claims of the original complainants in the 
Bananas III dispute.  Ecuador considered that this situation should be of concern to all Members. 
                                                     
 
2 Appellate Body Report, para. 273;  Panel Report, para. 8.13. WT/DSB/M/265 
Page 10  
 
  41. The representative of Colombia
 said that his country thanked the EC for its status report and 
welcomed the statement made by the EC that it intended to bring itself into compliance with the 
DSB's recommendations and rulings by modifying it s scheduled tariff commitments on bananas.  The 
EC had made a proposal which was broad, since it sought not only conformity with the DSB's rulings 
and recommendations, but also an early implementati on of the Doha Round tariff cuts for bananas and 
payments of compensations resulting from the EC 's enlargement to 25 members and then to 
27 members.  The EC's proposal represented a lowe r economic value than what had been negotiated 
on 27 July 2008.  The July Agre ement represented a very delicate balance achieved at the last minute 
in the context of a mutual concessions exercise.  Nevertheless, Colombia noted the EC's willingness 
to negotiate, and was in the process of examining the EC's proposal.  Finally, Colombia regretted that 
the EC status report did not provide any informati on as to how the EC had brought its bananas import 
regime into conformity with its obligations  under Articles I and XIII of the GATT 1994. 
42. The representative of Nicaragua  said that his country wished to refer to the statements 
previously made in the DSB on this issue, since they continued to reflect Nicaragua's position.  
Nicaragua regretted that, for the second consecutive time,  the EC had circulated a status report which 
failed to give any explanation as to how the EC  would bring its bananas import regime into 
compliance with its WTO-obligations.  Under th e DSU rules, it was not enough for the EC to 
condense into a single sentence its expression of w illingness to conclude a "comprehensive agreement 
on bananas that would establish, among other elemen ts, the level of the new EC bound tariff duty".  
This sidestepped the matter of how the EC intende d to comply with Article II of the GATT 1994 and 
completely disregarded how the EC would comply w ith Article I of the GATT 1994.  With regard to 
the continuing violation by the EC of Article II of the GATT 1994, merely referring to a new binding 
did not convey any recent information.  The EC had proposed a number of bindings since 2005, all of 
which had been declared illegal.  Any new bindi ng must be well warranted and acceptable to all MFN 
suppliers, otherwise this dispute would continue.  Nicaragua, once ag ain, called upon the EC to rebind 
its tariff at a level consistent with the compe titive conditions for Nicaragua under the GATT and to 
address his country's urgent need for economic relief.   With regard to the violation by the EC of 
Article I of the GATT 1994, Nicaragua failed to se e how discrimination by the EC in respect of 
bananas could be justified under the WTO rules.  Neit her silence nor a statement by the EC, of its own 
accord, that it was already in compliance would serve to  resolve this aspect of the dispute.  Nicaragua 
had taken note of the latest EC proposal which purportedly aimed to achieve "a comprehensive 
agreement", but did not consider that this c onstituted proper restitution of its rights.  A 
"comprehensive agreement" could not be used to ve il the fact that the proposal did not fully comply 
with, or detracted from, the Doha obligations.  Ne ither could it be linked to events which borne no 
relationship whatsoever to the matt er at issue, such as an "early harvest" under the Doha framework, 
which was beyond the control of Latin America.  Nica ragua regretted that, after more than a decade of 
non-compliance, the EC still showed no willingness to settle this dispute fully and promptly, with due 
regard for Nicaragua's developing country inte rests, as required under the DSU provisions. 
43. The representative of Panama  said that his country continued to be disappointed by the status 
reports submitted by the EC.  In Panama's view, the EC took its implementa tion obligations in the 
wrong direction.  He recalled that in July 2008, the EC  had agreed to settle this dispute, but then it had 
walked away.  Since then, the EC had lost two banana s disputes.  Rather than to promptly comply, as 
required under the DSU provisions, the EC now wanted to reverse many elements of the 
July Agreement and to tie relief to the conclusi on of the Doha Round, which was not linked to the 
compliance under the DSB.  In the meantime, the EC  wanted the Latin American countries to give up 
even more rights and interests than they had ag reed to in July 2008.  Panama, like other Latin 
American countries, considered that the EC's most  recent proposal was imbalanced and represented a 
clear failure to comply with the recommendations .  The EC's monthly status reports were only 
complicating the picture.  The objective of status reports was to promote transparency and to prompt 
compliance.  The EC's status reports promoted th e opposite.  The reports were not transparent as to 
how the EC intended to redress its GATT Article II violation.  The EC tried to bypass its GATT  WT/DSB/M/265 
 Page 11 
 
 
  Article I violation altogether.  And, by addressing those reports to Ecuador's case only, the EC had 
wrongly ignored the original Bananas III rulings, which remained operative for all the Bananas III 
complainants and had yet to be implemented.  Th e bananas dispute was at a fragile juncture.  The 
27 July Agreement, which had been difficult to ach ieve, was more than fair for the EC.  Despite 
undue losses for the past 17 years, Latin American countries were still willing to come together on an 
accommodating settlement for the sake of a lasting solu tion.  The EC's efforts to reopen that balance 
would invite calls for more relief, not less, a nd would aggravate the conflict.  As the 27 July 
Agreement was the only clear path to a solution, Pa nama again called on the EC to respect the terms 
of that Agreement.  
44. The representative of Honduras  said that his country, like the other complainants in the 
Bananas III dispute and the banana suppliers, was concerned about the EC's status reports.  According 
to the DSU provisions, status reports were suppo sed to ensure appropriate surveillance of the 
implementation under the DSB.  Rather than m eeting that objective, the EC's status reports 
contributed to creating confusion.  First, Hondur as was concerned that the EC limited its reporting 
obligations to the proceedings invoked by Ecuado r under Article 21.5 of the DSU.  The Appellate 
Body had recently confirmed that the EC ha d not implemented the original rulings and 
recommendations in the Bananas III dispute, and that the DSB's recommendations and rulings from the original proceedings would remain in eff ect until the EC brought itself into substantive 
compliance.  That meant that the EC's status reports  had to refer to all the bananas disputes and not to 
just one of the compliance measures.  Second, Hond uras was concerned that the EC's status reports 
were rather short.  The reports did not provide any information as to when and how the EC would 
remedy its breach of Articles I and II of the GATT 1994.  It was difficult to see how this dispute could 
be settled if the EC refused to refer to the obligatio ns it had to comply with, in particular since it had 
also failed to explain how it planed to bring itself into conformity with WTO rules.  Although Honduras noted the EC's statement in the most recent  status report that "The EC stands ready to 
resume negotiations with Latin American supplyi ng countries", it was, however, not comforted by 
this.  The EC had already come to an agreement on bananas on 27 July 2008, which would settle all 
outstanding proceedings and the legal claims under the WTO.  When the EC had stated that it "stands 
ready to resume negotiations", the meaning was clear :  it implied that the EC now sought to settle the 
matter on terms well below the terms it had offered in July 2008, notwithstanding the fact that it had 
lost two other WTO cases in December 2008.  Honduras was still perfectly ready to accept the 
27 July Agreement but had found that the EC's late st proposal was not balanced and considered any 
linkages to developments in the Doha Round to be unacceptable.  The EC had already backtracked too 
often during the 17-year long dispute.  Since the sco pe of the EC's compliance obligations had again 
been noted, and because the EC had expressed the wi sh to combat protectionism, Honduras hoped that 
in its next status report, the EC would confirm its intention to settle this ma tter, in accordance with the 
terms already agreed in July 2008. 
45. The representative of the Dominican Republic
, speaking on behalf of the ACP countries, said 
that at the 11 December 2008 DSB meeting, the ACP countries had registered their disagreement on 
substance with certain conclusions reached by th e Panel and the Appellate Body.  However, the 
Dominican Republic respected the need to implement final decisions.  Of the three substantive legal 
issues litigated in this proceeding, two, namely the violations of GATT Articles I and XIII were no longer relevant.  Only the finding of a violation of the EC's obligations under Article II of the 
GATT 1994 awaited implementation.  She wished to  recall very briefly what the Panel and the 
Appellate Body had found to be the law in this context.  They had c oncluded that the EC's schedule at 
this time still committed the EC to an out-of-quota tariff of €680/mt and a TRQ of 2.2 million mt at a tariff of €75/mt.  As her delegation had stated in  December 2008, the ACP could resign itself to live 
with a faithful and literal implementation of th ese conclusions.  But even if the EC and the 
complainants agreed to another tariff structure, it w as important to recall that this occurred for reasons 
other than this dispute, because the DSB's conclu sions in this dispute di d not require any overall 
reduction of average tariffs.  There was no do wnward pressure coming from the implementation WT/DSB/M/265 
Page 12  
 
  process as such.  Any such pressure found its ratio nale exclusively in the DDA, since the DSB's 
conclusions, as to what the current EC bindings we re, should also provide the main reference for 
determining what, if any, changes to the EC tari ff were required as part of rebinding processes under 
way.  The ACP actively supported efforts to move towa rds an effective solution of the issue of the EC 
bananas tariff regime.  Their effort was to ensure that the steps eventually agreed upon were taken for 
the right reasons and anchored and balanced out in the right context. 
46. The representative of Guatemala
 said that his country would not repeat what had already been 
stated by previous speakers.  His delegation wish ed to place on record that Guatemala supported the 
statements made by Ecuador, Colombia, Panama , Honduras, Nicaragua and the United States.  
Guatemala again urged the EC to comply promp tly with the recommendations and rulings of the 
Panel and the Appellate Body.  Guatemala hope d that the EC would provide more specific 
information on the implementation of the adop ted rulings and recommendations.  Guatemala 
expressed concern that the EC was only partially repor ting on this matter.  In Guatemala's view, status 
reports, which were only confined to the matter pe rtaining to the proceedings initiated by Ecuador, 
were not enough because there was still no compliance in relation to the original bananas disputes 
brought by several WTO Members, including Guatemala.  Furthermore, the EC had stated at the 
present meeting that the negotiations had begun with the MFN countries on a comprehensive settlement of the banana issue with a view to reachin g a "draft agreement".  In this regard, Guatemala 
wished to make two comments.  First, although it had received a proposal from the EC which, 
incidentally, fell short of the July 2008 Agreement,  Guatemala had not initiated any negotiations with 
the EC.  Second, Guatemala was concerned about the use of the phrase "draft agreement" in the initial 
statement made by the EC.  An aspiration for a "d raft agreement" did not measure up to Guatemala's 
expectations of effective implementation of the Appellate Body's ruling and recommendations. 
47. The representative of Cameroon
 said that this country supported the statement made by the 
Dominican Republic, on behalf of the ACP countries.  He noted that delegations had referred to the 
27 July Agreement on bananas, which established a link with the Doha Round. This implied that the 
solution should be sought in the framework of a negotiated approach.  Cameroon echoed the 
statement made by the Dominican Republic that wh at mattered most was an effective solution which 
could be found only in an inclusive process that woul d take into account the interests of all the parties 
concerned.  Cameroon remained rea dy to cooperate with all other dele gations in order to achieve this 
objective. 
48. The representative of Costa Rica  said that his delegation noted  the status report submitted by 
the EC on the implementation of the DSB's re commendations in the case initiated by Ecuador 
concerning the EC bananas import re gime, and had a few observations to  make.  In Costa Rica's view, 
in line with the DSB's recommendations, the EC should provide regular reports on compliance in 
accordance with Article 21.6 of the DSU, to cover this dispute as well as the dispute initiated by the 
United States.  The Panel and the Appellate Body had both concluded that the DSB's 
recommendations and rulings from the original proceedi ngs were to remain in effect until the EC had 
brought itself into substantive compliance.  Th e EC's report gave no information on how the EC 
intended to meet its obligations under Articles I a nd XIII of the GATT 1994.  Costa Rica also wished 
to see this dispute settled.  He recalled that a so lution had been found on 27 July 2008, when all the 
Latin American MFN countries had come to an ag reement with the EC (Geneva Agreement on Trade 
in Bananas).  Costa Rica continued to hope that the EC would respect that Agreement.  The EC had 
stated that it was ready to comply with the DSB' s recommendations and rulings in the context of a 
comprehensive agreement.  However, such a broa d agreement had been reached between the EC and 
all the Latin American MFN countries after years of di sputes, and it was important not to lose sight of 
the enormous significance of this fact and avoid reopening the issue and Pandora's box.  Costa Rica believed that to try and reinvent the wheel would be most unsafe.  WT/DSB/M/265 
 Page 13 
 
 
  49. Costa Rica recalled that the EC had stated that it had started negotiations in the past week.  In 
fact, the negotiations had begun not last week but several years ago in 1997.  A number of parties had signed a Memorandum of Understandi ng in 2001 in the belief that th ey had found a final settlement, 
but those agreements had not been honoured.  Subse quently, negotiations had been carried out before 
the Doha Ministerial Meeting in 2001, and Costa Rica believed that a solution had been found.  Two 
arbitration proceedings had shown that one had been too optimistic.  Thereafter, the parties had 
continued negotiating under the Good Offices of th e Minister of Foreign Affairs of Norway as 
mediator.  Finally, Costa Rica had joined the good offices initiated by Colombia under the Decision of 
1966, and an agreement had been reached on 27 Ju ly 2008.  Once again, one was too optimistic.  
Those negotiations had a long history, and had not begun last week.  The EC had stated that it had 
made a proposal based on the July Agreement.  In fact, the parties had again embarked on a dialogue 
with the EC, which was a good thing.  However, he wished to point out that the EC's proposal was very disappointing because it diluted the July Agre ement significantly and changed the time-frame for 
binding the last reductions in 2016, which amounted  to a cost of several hundred million dollars.  
Furthermore, the EC was making the new proposal c ontingent on a number of elements that would 
only make an agreement more difficult to reach.  It was difficult to see how, after the DSB's adoption 
of the Reports of the Appellate Body and the Panel confirming yet again that the EC was in breach of its obligations, the EC could have made an offer th at was worse than the Ju ly Agreement.  The EC 
had stated that the July Agreement was tied to the Doha Round modalities.  But even more 
contradictory was the fact that the new proposal so ught to establish new links, which entailed much 
greater risk.  The EC thought that this could be part of an early outcome under the Doha Round, 
together with other items such as cotton, tropical products or preference erosion.  If an early outcome 
was a possibility in some areas of the Doha R ound, it was because they were covered by the 
Ministerial Mandate, the compliance with which was anticipated before the conclusion of the Round.  
But what the EC was proposing for bananas was precisely the opposite:  bananas were tropical products and the outcome proposed was much more modest.  If an "early" outcome was taken as 
pertaining to the Doha Round, then it must refer to  the result that would be obtained in the Doha 
Round.  Costa Rica did not believe that African c ountries would accept a lesser result for cotton other 
than the one under the Mandate.  Would Members be re ady to reopen the Mandate  in these areas?  He 
did not think so.  Then why do so for bananas?  One had to keep the apples separate from the pears 
and avoid confusing the two.  Ba nanas had been the subject of a long dispute and an agreement had 
been reached under the Director-Gen eral's Good offices procedures. 
50. The representative of Ghana
 said that his delegation wished to be associated with the 
statement made by the Dominican Republic, on beha lf of the ACP countries, and the statement made 
by Cameroon. 
51. The representative of the European Communities  said that the EC wished to respond to two 
issues which had been raised by many delegations .  First, he said that the Appellate Body had 
confirmed that no recommendation (as opposed to fi ndings) was warranted with respect to the 
measure at issue in this dispute, since it was no l onger in existence (para. 479 of the Appellate Body 
Report).  The Appellate Body had referred genera lly to the principle that in Article 21.5 DSU 
procedures, original DSB's recommendations and rulings  "remain in effect until the EC brings itself 
into substantive compliance".  However, there was no longer a compliance issue here, since the 
measure at fault had ceased to exist in 2007.  The cu rrent tariff treatment of bananas of ACP origin 
was a completely different measure, based on the negotiation of Free Trade Agreements with the ACP 
countries concerned.  Tariff preferences could eq ually result from FTA negotiations with Latin 
American suppliers.  With regard to the second issue, he pointed out that he did not wish to engage in 
negotiations and had no mandate to do so.  Furthermore, he did not think that the DSB was the right 
forum for this type of discussion.  Having said that, the valuable efforts of the WTO Director-General 
in the context of the Good Offices exercise had offe red a unique opportunity to reach an agreement on 
a comprehensive and once and for all solution on ba nanas which would take into consideration the 
interest of all relevant suppliers.  Unfortunately , only one Latin American country and the EC had WT/DSB/M/265 
Page 14  
 
  been ready to initial the standalone draft Agr eement proposed by the WTO Director-General on 
19 July 2008.  The EC and Latin American suppliers had then decided to explore an agreement within 
the framework of the DDA modalities negotiations.  Some Latin American countries had clearly 
wanted to use the leverage of the modalities ne gotiations to improve the package.  They had 
succeeded with this strategy, and on 27 July 2008 a package had been agreed, which was ripe for 
initialling if, but only if, an agreement in the Gr een Room on modalities more broadly could have 
been achieved.  The EC nevertheless stood ready to  consider the signature of the draft bananas 
agreement, if necessary adjustment  to the current circumstances we re to be introduced.  The EC 
counted on a constructive engagement of Latin American banana suppliers in the necessary 
discussions to that aim. 
52. The representative of the United States
 said that in relation to Articles I and XIII of the 
GATT 1994, whatever the EC might have stated at previous meetings, the one thing it had not done was to say that it was in compliance with the recommendations and rulings of the DSB from the original proceeding.  To be sure, the EC had ma de some vague statements about agreements with 
certain other WTO Members.  However, the EC  had not provided any specific information from 
which the DSB might be able to understand what me asures the EC had taken, when the EC had taken 
them, or what effect those measures had.  This was in fact precisely the sort of information that one 
would expect the EC to include in its status re ports.  The United States looked forward to receiving 
one from the EC before the next meeting of the DSB. 
53. The representative of Ecuador
 noted that the July Agreement contained the credit clause in 
paragraph 4, which demonstrated that that Agre ement was not linked to the modalities under the Doha 
Round or any other Round.  It was linked to the compliance with the DSB's recommendations and 
rulings and compensation under Article XXVIII of the GATT 1994.  The July Agreement did not 
reduce the lowest tariff, which was €114/mt, nor di d it change an implementation period of eight 
years.  In other words, the final tariff was much higher than it would have been possible to have under the normal modalities of the DDA for agricultural reduc tions.  He recalled that the MFN suppliers had 
never been consulted by the EC on the zero-tariff trea tment, granted by the EC to the ACP countries.  
54. The representative of Costa Rica
 said that his delegation agreed with the EC that the DSB was 
not the right forum for negotiations.  He noted that , before one entered into negotiations, conditions 
were usually known in advance.  During the Good Offices under the Director-General, a standalone 
agreement had been negotiated without conditi ons concerning modalities under the Doha Round.  
However, the fact that there were  going to be conditions had only been communicated to the parties in 
the Green Room by the EC once the negotiations on m odalities had failed.  It was at that time that it 
had become known that there were conditions with respect to the ne gotiations on bananas.  However, 
he reiterated that normally conditio ns should be known in advance.  
55. The representative of Honduras  said that his country supported the statement made by the 
United States concerning Articles I and XIII.  He noted that the ACP countries had referred to 2.2 
million tonnes at €75, but the ACP countries had failed to mention that Latin American suppliers of 
bananas had entered into the markets' of some count ries, which had now become part of the EC, at  
zero tariffs.  As a matter of fact, they had paid no tariffs on more than 1.1 million tonnes.  He said that 
Honduras had been a complainant in the Bananas III dispute and wished to draw Members' attention 
to what the Appellate Body had stated, namely, th at the EC had not complied with the rulings and 
recommendations in the Bananas III dispute and had confirmed that the decisions and 
recommendations in the Bananas III dispute would remain in force until the EC had complied.  
Honduras, therefore, asked that Article 21.6 of the DS U be applied to ensure th at this matter was kept 
on the Agenda under the item:  "Surveillance of Im plementation of Recommendations Adopted by the 
DSB".    WT/DSB/M/265 
 Page 15 
 
 
  56. The representative of Panama  said that the EC's interpretati on was that the July Agreement 
was contingent on modalities.  However, the word  "modalities" did not appear in any of the seven 
paragraphs of the July Agreement.  The representa tive of the EC was repeating positions of other 
colleagues, since he had not participated in the bananas negotiations.  Pana ma reiterated that the 
July Agreement was a standalone agreement.  It wa s however curious that the EC wanted to link the 
July Agreement, which represented a substantial departure from the agriculture text, to modalities 
when in fact modalities would involve much more comprehensive commitment on the part of the EC 
with respect to bananas.  If that was the intentio n, then one should go back to the tropical-product 
treatment for bananas. 
57. The representative of Mexico  said that his delegation did not normally make statements on 
this matter.  Notwithstanding that, and regardless of  any substantial interest that his country might 
have in this matter, some systemic interests were involved in the matter at hand.  In this respect, and 
as an original complainant in the Bananas III disput e, Mexico shared the c oncerns raised by other 
delegations with regard to the lack of status  reports pursuant to Article 21.6 of the DSU. 
58. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
2. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by the European Communities and Japan 
59. The Chairman  said that this matter was on the Agenda of the present meeting at the request of 
the EC and Japan.  He then invited th e respective representatives to speak.  
60. The representative of the European Communities  said that, as his delegation had said many 
times, illegal distributions of anti-dumping and coun tervailing duties collected on imports made prior 
to 1 October 2007 would continue for an undetermined  number of years.  Therefore, the EC wished to 
ask again the United States when it would stop the tr ansfer of those duties to its industry and finally 
put an end to the condemned measure.  The EC al so renewed its call on the United States to abide by 
its clear obligation under Article 21.6 of the DS U and to submit implementation reports in this 
dispute.  
61. The representative of Japan  said that according to the latest CDSOA Annual Report published 
by US Customs last month3, some US$180 million had been disbursed for FY 2008.  Those latest 
distributions showed that the CDSOA still remained operational4.  Japan urged the United States to 
stop illegal distributions and repeal the CDSOA, not just in form but in substance, so as to resolve this 
dispute once and for all.  According to Article  21.6 of the DSU, the United States was under 
obligation to provide the DSB with a status report in this dispute "until the issue is resolved".  Japan 
reserved all its rights under the DSU until the United States came into full compliance. 
62. The representative of Brazil  said that his country thanked Japan and the EC for keeping this 
issue on the DSB's Agenda.  The disbursements made  by the United States to its domestic industry 
under the Byrd Amendment continued to be in force affecting the rights of other WTO Members.  He 
                                                      
3 See US Customs and Border Protection's website at:  
http://www.cbp.gov/xp/cgov/trade/priority_tra de/add_cvd/cont_dump/cdsoa_08/fy08_annual_rep/  
4 In the words of the US Customs, "the distribution process will continue for an undetermined period".  
See US Customs and Border Protection's website at: 
http://www.cbp.gov/xp/cgov/tr ade/priority_trade/add_cvd/cont_dump/cont_dump_faq.xml  WT/DSB/M/265 
Page 16  
 
  reiterated the need for the United States to bring this  situation to an end and thus to fully implement 
the DSB's recommendations and rulings. 
63. The representative of India
 said that her country thanked the EC and Japan for maintaining 
this issue on the DSB's Agenda and fully shared thei r concerns.  As mentioned by previous speakers, 
the United States was still distributing disbursement s under the CDSOA to the US domestic industry.  
The disbursements made by the United States to its domestic industry unde r the Byrd Amendment 
affected the rights of other WTO Members.  It was India's concern that non-compliance by the 
United States in this dispute led to erosion of cred ibility of the WTO dispute settlement system.  India, 
therefore, urged the United States to cease its WTO- inconsistent disburseme nt.  India supported the 
view that continued surveillance by the DSB was needed as long as the United States did not comply 
with the WTO ruling. 
64. The representative of China  said that his country thanked the EC and Japan for, once again, 
raising this matter at the DSB meeting.  China sh ared the concerns expressed by previous speakers 
and wished to join them in urging the United States to comply fully with the DSB's rulings. 
65. The representative of Canada  said that her country agreed with the EC and Japan that the 
Byrd Amendment remained subject  to the surveillance of the DS B until the United States ceased to 
administer it. 
66. The representative of Thailand  said that his country thanked the EC and Japan for continuing 
to bring this matter before the DSB.  Thaila nd remained disappointed at the United States' 
maintenance of the WTO-inconsistent disbursements.   As noted by Japan previously, the issuance of 
the CDSOA Annual Report for the 2008 fiscal year de monstrated that the CDSOA remained fully 
operational.  Thailand regretted that, of the a pproximate US$180 million disbursed for the 2008 fiscal 
year, about US$8 million were collected from imports of Thai products, particularly canned pineapple 
and polyethylene retail carrier bags .  Thailand urged the United States to cease those disbursements, 
repeal the Byrd Amendment with immediate practical effect, and resume providing status reports until such actions were taken and this matter was fully resolved. 
67. The representative of the United States
 said that, as the United States had already explained at 
previous DSB meetings, the President had signed the Deficit Reduction Act into law on 
8 February 2006.  That Act included a provisi on repealing the Continued Dumping and Subsidy 
Offset Act of 2000.  Thus, the United States had ta ken all actions necessary to implement the DSB's 
recommendations and rulings in these disputes.  He recalled, furthermore, that Members, including 
the EC and Japan, had acknowledged during previous  DSB meetings that the 2006 Deficit Reduction 
Act did not permit the distribution of duties collected on goods entered after 1 October 2007.  With 
respect to comments regarding further status repor ts on this matter, the United States failed to see 
what purpose would be served by further submissi on of status reports repeating the progress the 
United States had made in the implementati on of the DSB's recommendations and rulings. 
68. The DSB took note  of the statements.   WT/DSB/M/265 
 Page 17 
 
 
  3. United States – Continued existence and application of zeroing methodology 
(a) Report of the Appellate Body (WT/DS350/AB /R) and Report of the Panel (WT/DS350/R) 
69. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS350/14 transmitting the Appellate Body Report on:  "United States – Continued 
Existence and Application of Zeroing Methodology" , which was circulated on 4 February 2009 in 
document WT/DS350/AB/R, in accordance with Article  17.5 of the DSU.  He reminded delegations 
that the Appellate Body Report and the Panel Report pertaining to this dispute had been circulated as 
unrestricted documents.  He recalle d that Article 17.14 of the DSU re quired 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 report within 30 days following its 
circulation to Members.  This adoption procedure is without prejudice to the right of Members to 
express their views on an Appellate Body report".  
70. The representative of the European Communities
 said that his delegation thanked the Panel 
members, the members of the Appellate Body and the WTO Secretariat for the time and the efforts 
dedicated in resolving the present dispute.  The issue of zeroing was not a new one.  Indeed, the 
practice of zeroing was first condemned already in 2001 in a WTO dispute against the EC (Bed Linen 
case) and had led to its abandonment by the EC.  The Appellate Body had since maintained a 
consistent and coherent line on this issue.  It ha d confirmed on several occasions that zeroing ran foul 
of fundamental obligations of the Anti-Dumping Agreement:  to establish dumping in respect of an exporter and a certain product and to conduct a fa ir comparison between the export prices and normal 
value.  To the EC, those earlier decisions had alread y made clear that the practice of zeroing, whether 
in original investigations or in reviews, was per se  WTO-incompatible.  It was regrettable that unlike 
the EC after the "Bed Linen" ruling, the Un ited States had refused to draw the inevitable 
consequences of those earlier decisions.  Instead, it had chosen to question the authority of the 
Appellate Body of the WTO and the dispute settlement system as a whole, by forcing other WTO Members into continued litigation only to get the opportunity to re-argue its position over and over 
again and delay compliance.  Suffice it to say that 14 WTO disputes had been brought in less than a 
decade against the United States on zeroing (both as the unique subject of the dispute or as part of a wider dispute).  Despite having been condemned by panels and the Appellate Body a number of 
times, the United States had refused to comply and abolish zeroing.  The EC was grateful to the 
Appellate Body not only for having reversed the c ontroversial findings of the Panel in this case, but 
also for a very comprehensive Report.  The EC wa rmly welcomed the Appellate Body's decision to 
reject all grounds of appeal put forward by the Un ited States and uphold the Panel's findings that:  
(i) the United States was in violation of Article 9. 3 of the Anti-Dumping Agreement and Article VI:2 
of the GATT 1994 by applying simple zeroing in the 29 periodic reviews at issue;  (ii) that the 
United States violated Article 11.3 of the Anti-Dumping Agreement by using, in eight sunset reviews at issue, dumping margins obtained through so-calle d "model" zeroing in original investigations.  
71. The EC also wished to stress another fundame ntal aspect of the Appellate Body's Report; 
namely, its conclusion that a challenge may be brou ght in the WTO against the continued use of the 
zeroing methodology in successive proceedings in which duties resulting from specific anti-dumping 
duty orders were maintained.  The Appellate Body had confirme d that in seeking an effective 
resolution of its dispute with the United States, the EC, rather than having to challenge each new 
investigation and review separately, was entitled to  make a case against the "continued use" of the 
zeroing methodology against the "duty" as a whole in the specified cases, under the scrutiny of WTO 
dispute settlement.  That finding was fully consis tent with the DSU provisions and previous DSB 
rulings:  the form could not prevail over the substan ce.  The findings were of systemic importance.  
As in the present dispute, there were clearly cases wh ere the measure at issue consisted of an ongoing 
conduct, with prospective application and a life potentially stretching into the future.  As the 
Appellate Body had observed, it was not uncom mon for measures challenged in WTO dispute WT/DSB/M/265 
Page 18  
 
  settlement to have a prospective effect (e.g. as su ch challenges against laws and regulations, subsidy 
programmes, anti-dumping duties tainted with zeroing).  The EC was of the view that rejecting the 
possibility to challenge such measu res would lead to an endless loop  of litigation thus preventing the 
prompt settlement of disputes and security and pred ictability of the multilateral trading system, which 
was at the heart of the dispute settlement system.  The EC regarded the Appellate Body's findings on 
the matter of susceptibility to WTO challenge of the duty as a measure as an important landmark, 
which contributed to the credibility of the WTO dispute settlement system as a whole and would represent a powerful tool against the abuse of Trad e Defence Instruments.  Having said that, the EC 
hoped that the Appellate Body's findings in th e present case would not result in triggering new 
disputes against the United States, but that it would in stead finally persuade the United States to meet 
its obligations under the WTO. 
72. He said that it was not just the conclusion reached  by the Appellate Body on the matter of the 
duty as a measure, which merited attention, but also the fact that the Appellate Body had confirmed in 
its analysis that the distinction between "as such" and "as applied" should not be considered as to 
governing the definition of a measure for purposes of  WTO dispute settlement.  The EC welcomed the 
clarification that said distinction, however useful, did not exhaustively define the types of measures 
that may be subject to challenge in the WTO.   The only reservation that the EC would make 
concerned the Appellate Body's conclusion that it c ould not complete the analysis and make findings 
on whether the continued application of zeroing by the United States in 14 of the 18 anti-dumping cases and in two of the seven periodic reviews at issue, was WTO-inconsistent.  The EC commended 
the Appellate Body for completing the analysis in  the remaining four anti-dumping cases at issue and 
five periodic reviews.  Nonetheless, the EC was co ncerned with the implication that too cautious an 
approach by the Appellate Body could have if fo llowed in other cases.  This could mean that the 
Appellate Body would often find itself in a position wh ere it would be unable to complete the analysis 
and decide on a claim, despite the fact that a pane l wrongly declined to rule on a claim and thus made 
no factual findings.  With this limited reservation in  mind, the EC was pleased to support the adoption 
of the Appellate Body Report and the Panel Report,  as modified by the Appellate Body and expected 
that prompt and full compliance would follow.  Th e EC also noted that US implementation in this 
case involved mainly a recalculation exercise and should be completed very quickly. 
73. The Chairman
 sought clarification from the EC as to whether the EC had stated that it had 
accepted the Panel Report with some reservation. 
74. The representative of th e European Communities  clarified that, as Members were required, 
the EC accepted the Appellate Body and Panel Repo rts without any reservation, but had reservations 
about some of their considerations. 
75. The representative of the United States  said that his country wished to thank the Panel, the 
Appellate Body, and the Secretariat staff for their work in this proceeding.  Although the 
United States disagreed with several of the Panel' s findings, it recognized the Panel's efforts in 
grappling with the issue of so-called "zeroing".  The Panel, like previous panels, had properly 
understood that the Anti-Dumping Agreement could be  permissibly interpreted as allowing the use of 
zeroing in reviews.  As the Panel had explained, it  "generally found the reasoning of earlier panels on 
these issues to be persuasive".5  In the end, however, the Panel had disregarded the standard of review 
set out in the Anti-Dumping Agreement and had f ound against the United Stat es.  With respect to 
jurisdictional issues, the United States welcomed the Panel's rejection of the EC's attempt to include 
vague, indeterminate measures within the Panel's terms of reference.  On the other hand, the 
United States was deeply disappointed in the Appellate Body's findings, which both incorrectly expanded the scope of the proceedings and disregar ded the careful bargain struck as part of the 
Uruguay Round Agreements.  The United States regr etted that the Appellate Body, once again, had 
                                                     
 
5 Panel Report, para. 7.169.  WT/DSB/M/265 
 Page 19 
 
 
  failed to accept the permissibility of zeroing under the covered agreem ents, and had imposed 
obligations on Members where there were none.  
76. First, in reaching its finding on the inconsiste ncy of zeroing in reviews, the Appellate Body 
had relied on the same flawed interpretation that it had offered in previous reports.  According to the 
Appellate Body, the concepts of "dumping" a nd "margin of dumping" were exporter-based and 
precluded a finding that dumping could exist with resp ect to an individual transaction.  However, the 
Appellate Body had manufactured a conflict wher e there was none – dumping may be an exporter-
related concept, but dumping could s till exist on a transaction-by-tran saction basis.  He said that the 
United States had previously explained in detail the flaws in the reasoning on which the Appellate 
Body primarily relied on in this Report, and in vited Members to consider the previous US 
communications on this topic.6  In that regard, the United States  noted the opinion of one Appellate 
Body member who had written that "[w]hile aggreg ation is an unavoidable requirement of the Anti-
Dumping Agreement, these provisions are not clear as to what it is that must be aggregated"7 and 
"[t]here are arguments of substance made on both sides".8  The United States respectfully suggested 
that, as a consequence, under Article 17.6(ii) of the Anti-Dumping Agreement, the Appellate Body 
should not have found the use of zeroing in review s to be inconsistent with the Anti-Dumping 
Agreement.  77. Second, the United States was very disturbe d by the Appellate Body's approach to 
Article 17.6(ii) of the Anti-Dumping Agreement.  Th at provision stated that where a panel found that 
a relevant provision of the Agreement admitted of mo re than one permissible interpretation, the panel 
shall find the authorities' measure to be in confor mity with the Anti-Dumping Agreement if it rested 
on one of those permissible interpretations.  Thus, Article 17.6(ii) required a panel, and the Appellate 
Body, to determine whether the interpretation propo sed by a Member was permissible.  The Appellate 
Body had, however, failed to take that approach.  Instead of examining the US interpretation, the 
Appellate Body had begun by reiterating its analysis  of the Anti-Dumping Agreement.  It had then 
found that the US interpretation of the Anti-Dumping Agreement had led to a result that contradicted 
the result of the Appellate Body's analysis – and on that basis alone, said that the US interpretation 
could not be permissible.
9  That was a simple non sequitur.  If Article 17.6(ii) only sanctioned 
interpretations that all yield the same result, Article  17.6(ii) would have had no function.  The Article 
made clear that a national authority's measure was to be upheld if it rested on "one" – not "all" – of the 
permissible interpretations of the Anti-Dumping Agreement.  Thus, the very premise underlying 
Article 17.6(ii) was that two interpretations coul d be permissible simultaneously:  one that would 
render the measure at issue consistent with the Ag reement, and another that would render the measure 
at issue inconsistent with the Agreement.  By de finition, the existence of the second interpretation 
could not be a basis for finding the first one not to be "permissible".  
78. In a related vein, the Appellate Body ha d never actually examined the meaning of 
"permissible".  Instead, it simply asserted "the rules and principles of the Vienna Convention cannot 
contemplate interpretations with mutually contradictory results".10  That assertion was unsupported.  
The ordinary meaning of "permissible" was "allowabl e" or "permitted" – that was, an interpretation 
that could be reached under customary rules of interpretation.  Nothing in customary rules of 
interpretation (reflected in Articles 31 and 32 of th e Vienna Convention) said an interpretation was 
not "allowable" simply because another interpreta tion could also result from application of those 
rules.  In fact, the Appellate Body's approach w as particularly surprising in light of the provisions 
                                                      
6 WT/DS294/16; WT/DS294/18; WT/DS322/16; WT/DS344/11; see also  WT/DSB/M/211, 
paras. 37-40; WT/DSB/M/225, paras. 73-76; WT/DSB/M/250, paras. 47-55. 
7 Appellate Body Report, para. 310. 
8 Appellate Body Report, para. 312. 
9 Appellate Body Report, para. 317. 
10 Appellate Body Report, para. 273. WT/DSB/M/265 
Page 20  
 
  reflecting the customary rules of interpretation in th e Vienna Convention.  Article 32 made clear that 
the application of the rules of interpretation in  Article 31 could lead to a meaning that was 
"ambiguous".  In light of that provision as well,  the United States failed to see how the Appellate 
Body could have reached the view that Article 17. 6(ii) could not contemplate interpretations with 
mutually contradictory results.  The United States not ed in that connection that the Appellate Body 
had been clear to say that its analysis of zeroing rested entirely on an analysis pursuant to Article 31 
of the Vienna Convention.
11  
79. At the end of the Uruguay Round negotiations, Ar ticle 17.6(ii) was key to the acceptance of 
the other provisions of the Anti-Dumping Agreemen t.  The existence of such a provision confirmed 
that Members were aware that the text would pose pa rticular interpretive challenges, at least in part 
because it was drafted to cover varying and complex anti-dumping systems around the world and 
long-standing differences concerning methodology.  The negotiators, therefore, had indicated that it would have been a legal error not to respect a permissible interpretation of the Anti-Dumping 
Agreement.  The United States, therefore, deeply regretted the Appellate Body's disregard for the 
meaning and importance of Article 17.6(ii).   
80. There were also a number of procedural findings by the Appellate Body that called for 
comment.  First, the United States failed to see how the EC's reference, in its panel request, to the 
"application or continued applica tion of anti-dumping duties in 18 cases" could in any way meet the 
requirement of Article 6.2 of the DSU to identify th e specific measures at issue.   In the view of the 
United States, it was the Panel that had adopted the correct approach when it had found that the EC 
could not meet the requirements of Article 6.2 by referring to duties in a general way, detached from 
any underlying administrative determinations.  Th e United States had significant concerns as well 
regarding the 14 measures not included in the c onsultations request and the four preliminary 
measures, but would not take the time at the present meeting to detail those concerns. 
81. Second, the United States was concerned by the Ap pellate Body's statement that the Panel in 
this dispute "appear[s] to have acceded to the hi erarchical structure contemplated in the DSU",
12 a 
statement that was neither explaine d nor supported.  While expressed in terms of a supposed hierarchy 
found in the DSU, the thrust of the statement was that panels must follow Appellate Body reports 
even where their own objective assessment of the "applicability of and conformity with the covered 
agreements" under Article 11 of the DSU led them  to a different conclusion.  It was easy to 
understand the attraction to, and convenience for, Appe llate Body members of that approach, but that 
approach was not what had been agreed by Member s and was not the legal effect of Appellate Body 
reports.  As the US had explained before, the DS U did not establish a common-law system, in which 
Appellate Body findings on legal issues became bi nding precedents.  To the contrary, the only thing 
in the DSU that resembled a hierarchical structur e was the role assigned to the Ministerial Conference 
and the General Council by Article IX:2 of the WTO Agreement:  those bodies had the exclusive 
authority to adopt binding interpreta tions of the covered agreements. 
82. Finally, the United States drew attention to one aspect of the Appellate Body's discussion of 
the handling of evidence by panels.  The Appellate Body had emphasized that "the nature and scope 
of the evidence that might be reasonably expected by  an adjudicator in order to establish a fact or 
claim in a particular case will depend on a range of f actors, including the type  of evidence that is 
made available by a Member's regulating authorit y.  Because the design and operation of national 
regulatory systems will vary, ... in a specific case, a panel may have a sufficient basis to reach an 
affirmative finding regarding a par ticular fact or claim on the basis of inferences that can be 
                                                      
11 Appellate Body Report, "United States – Final Anti-Dumping Measures on Stainless Steel from 
Mexico", WT/DS344/AB/R, adopted 20 May 2008, para. 128. 
12 Appellate Body Report, para. 365.  WT/DSB/M/265 
 Page 21 
 
 
  reasonably drawn from circumstantial rather than direct evidence".13  The United States, of course, 
had an extremely transparent legal system and, ther efore, welcomed the recognition that in the case of 
less-than-transparent systems, it may be entirely a ppropriate in WTO disputes to make findings based 
on circumstantial evidence.  In that connection, it w as useful to recall "India – Alcohol Tariffs", where 
the Appellate Body had refused to complete the anal ysis, despite the existence of evidence – including 
an admission by India –  from which the proper legal conclusions could have been drawn.  The 
United States was puzzled as to whether the Appellate  Body had intended to take a different approach 
in those two disputes and if so, why.  
83. The representative of Mexico  said that his country thanked the United States for its statement.  
As the United States was aware, Mexico shared the concerns expressed by other Members on this 
matter.  The Appellate Body Report before th e DSB at the present meeting had, once again, 
condemned the use of the zeroing methodology, and the message could not be more clear.  With respect to the compliance panels that were under way,  he noted that there was no point in continuing 
to argue on such matters merely because one Memb er was unconvinced that it had violated the WTO 
Agreement.  Mexico hoped that the United States would meet its obligations and that it would not 
only stop applying the zeroing methodology in its dumping calculations in the cases covered by the 
disputes, but would also abandon the use of this methodology across the board.  His country wished to make this point just shortly before the expiry of  the reasonable period for compliance, granted to the 
United States, in the arbitration proceedings request ed by Mexico in the dispute challenging the use 
by the United States of zeroing against Mexican stai nless steel exports, and its use as such in a manner 
contrary to the Anti-Dumping Agreement.  The US  practice had been condemned by the DSB.  The 
time-period for compliance by the United States in  the above-mentioned dispute with Mexico 
(DS344) would expire on 30 April 2009, which wa s the deadline for implementation of the DSB's 
rulings and recommendations.  Mexico hoped that the Reports to be adopted at the present meeting 
would contribute to ensuring that in reviewing this practice, the United States would look at zeroing as a whole rather than in the context of each a nd every dispute so that one could avoid repetitive 
procedures that led only to a re-examination of issu es, which for most other Members were clear cut, 
or as one member of the Appellate Body put it in th e Reports before the DSB, so as to avoid "raking 
over dead ashes". 
84. The representative of Japan
 said that his country thanked the Appellate Body for its Report in 
this dispute.  Japan had been actively involved in this dispute as an interested third party and was 
particularly pleased that the Appellate Body, once ag ain, had affirmed its previous findings that 
simple zeroing in periodic reviews was inconsis tent with the Anti-Dumping Agreement and the 
GATT 1994.  As observed by the Concurring Opinion in the Report, at the very heart of the zeroing controversy was the fundamental issue of the proper meaning of the concept "dumping".
14  By virtue 
of the introductory phrase of Article 2.1, the defi nition of "dumping" must apply throughout the Anti-
Dumping Agreement in a cons istent and coherent manner.15  Thus, as noted by the Concurring 
Opinion, the concept of "dumping" could not have  a contradictory meaning "that is both exporter-
specific and transaction-specific".16  The Appellate Body had resolved the issue of zeroing 
definitively based on exporter-specific and produc t-wide definition of "dumping" and "the 
Membership of the WTO was entitled to rely on these outcomes".17  Japan also noted the statement in 
the Concurring Opinion that "[a]t a point in ever y debate, there comes a time when it is more 
important for the system of dispute resolution to ha ve a definitive outcome" and that "[w]ith respect to 
zeroing, that time has come".18  In Japan's view, such outcome had been secured already in the 
                                                      
13 Appellate Body Report, para. 357. 
14 Appellate Body Report, para. 305 (Concurring Opinion). 
15 Appellate Body Report, paras. 281- 283, and 307. 
16 Appellate Body Report, para. 312 (Concurring Opinion). 
17 Appellate Body Report, para. 312 (Concurring Opinion). 
18 Appellate Body Report, para. 312 (Concurring Opinion). WT/DSB/M/265 
Page 22  
 
  previous zeroing disputes a long time ago.  Japan also welcomed the Appellate Body's decision which 
reversed the Panel's erroneous fi ndings and found, instead, that "the  continued use of the zeroing 
methodology in successive proceedings in whic h duties resulting from the 18 anti-dumping duties 
orders are 'measures' that can be challenged in WTO dispute settlement".
19  Further, the Appellate 
Body had rightly found that the application and c ontinued application of anti-dumping duties in four 
out of those 18 were inconsistent with  the Anti-Dumping Agreement and GATT 1994.20  Regarding 
the issue of whether the EC had shown that simple  zeroing was used in the seven periodic reviews at 
issue, the Appellate Body had rejected the Panel's erroneous approach to the evidence and had rightly 
found that "the Panel erred in failing to examine the European Communities' evidence in its totality, 
and requiring, instead, that specific types of evid ence [namely, authenticat ed USDOC documents] in 
and of themselves, are necessary in order to establis h that simple zeroing was used by the USDOC in 
specific periodic reviews".21  Japan agreed with this conclusion and fully supported the adoption of 
the Appellate Body Report by the DSB at th e present meeting.  "Prompt compliance with 
recommendations or rulings of the DSB is essential in  order to ensure effective resolution of dispute 
to the benefit of all Members."22  Japan strongly hoped that the United States would take this DSB 
decision seriously, and promptly bring illegal zeroing measures into full conformity with the WTO 
Agreement.   
85. The representative of Norway  said that her delegation we lcomed the adoption of the 
Appellate Body Report in this dispute, and reca lled that Norway had been a third party in the 
proceedings.  The Appellate Body had, once ag ain, confirmed the illegality of the "zeroing 
methodology".  The Appellate Body had made clear that both the initial application and the continued 
application of an anti-dumping duty calculated with zeroing – be it in a periodic review or a sunset 
review – would always be contrary to WTO rules.  The Appellate Body had thus confirmed that the 
United States could not escape its WTO obligations by creating a "moving target" of measures that were re-determined every year.  In its third-party submission, Norway had addressed in particular the 
interpretation of Article 17.6(ii) of the Anti-Du mping Agreement.  Norway had argued that the 
purpose of treaty interpretation was to arrive at the one and only interpretation of a term, in its 
context, and in light of its object and purpose.  Thus, the tests in the Vienna Convention were 
designed to assist the treaty interpreter to arrive at one single interpretation of the term in question.  
Consequently, the second sentence of Article 17.6(ii) w ould only come into play in the rare case that 
an interpreter, having exhausted a ll the elements of Articles 31-33 of the Vienna Convention, was still 
left with more than one permissible interpretation.   This sequential approach had been confirmed by 
the Appellate Body.  In clarifying the role of Article  17.6(ii), the Appellate Body put its application in 
the right perspective.  Norway noted that this was not necessarily different from the result reached 
through the principle of in dubio mitius , that would apply as the last resort to settle an interpretative 
question under public international law in any case.  Norway was of the view that there were now 
many "zeroing disputes" in the WTO, with most of  them concerning the practice of the United States.  
To bring itself into conformity with the WTO Agre ements, the United States would have to change its 
practice and discontinue the use of "zeroing".  It was Norway's hope that this issue was now finally settled, and that speedy implementation would occur. 
86. The representative of Brazil
 said that the Appellate Body had, once again, concluded that the 
Anti-Dumping Agreement did not allow margins of dumping to be calculated based on the zeroing methodology.  In all segments of anti-dumping proceedings;  in all comparison methods;  as such, as 
applied and as an "ongoing conduct";  in sum, in all of  the incarnations in which it had been before the 
Appellate Body the zeroing methodology had been c onsidered illegal.  The lack of support for this 
methodology in the negotiated texts should be, by th is point in time, beyond any reasonable doubt.  It 
                                                     
 
19 Appellate Body Report, para. 185. 
20 Appellate Body Report, para. 199. 
21 Appellate Body Report, para. 348. 
22 Article 21.1 of the DSU.  WT/DSB/M/265 
 Page 23 
 
 
  was a matter of systemic concern that Members conti nued to be compelled to re-litigate an issue that 
had been so clearly settled by the Appellate B ody.  Zeroing was not only illegal.  It was a 
fundamentally flawed, unfair methodology.  It tr ansformed what should have been objective, unbiased 
procedures into a one-way road to wards an inescapable and pre-determined outcome:  the one sought 
by the domestic industry.  WTO Members had repeat edly shown their commitment to the multilateral 
trading system in changing practices found to be inc onsistent with their obligations.  Brazil hoped that 
the Reports to be adopted at the present meeting w ould encourage the United States to follow this path 
and abolish the use of the zeroing methodology in all its forms. 
87. The representative of Hong Kong, China  said that her delegation th anked the Appellate Body, 
the Panel and the Secretariat for their hard work.  The Appellate Body had, once again, reaffirmed the 
illegality of zeroing.  Hong Kong, China welcomed the not unexpected outcome and also appreciated 
the Appellate Body's confirmation that dumping w as an exporter-specific concept, and that the 
determination should be made fo r the product under consideration.  Hong Kong, China wanted to 
highlight two specific findings of the Appellate Body  that were of systemic importance.  First, Hong 
Kong, China welcomed the Appellate Body's ruli ng that the "continued use" of zeroing methodology 
in successive anti-dumping proceedings constituted me asures that could be challenged in the WTO 
dispute settlement.  That ruling was particularly pert inent to the retrospective system of assessment of 
anti-dumping duty and could facilitate Members in seeking effective resolutions of the zeroing 
practice under such a system.  Second, Hong Kong, Ch ina shared the grave concern regarding the role 
of the Appellate Body's rulings and the repeated disputes on the issue of zeroing.  Hong Kong, China 
fully agreed that the question of zeroing had been  definitively and conclusively resolved by the 
Appellate Body and that "the time had come".  Th e consistent Appellate B ody jurisprudence left no 
doubt that zeroing fell outside the permissible amb it of the Anti-Dumping Agreement.  Hong Kong, 
China hoped that the clarifications and comments ma de by the Appellate Body in the Report would 
encourage a swift end to the protracted and unnecessary debates and disputes, whether between certain panels and the Appellate Body or between Members.  With those observations and comments, 
Hong Kong, China supported the adoption of the Report of the Appellate Body, and that of the Panel 
as modified by the Appellate Body.  Hong Kong, Ch ina encouraged all parties concerned to take 
prompt actions to bring any WTO-inconsiste nt practices and measures into compliance. 
88. The representative of Thailand
 said that his country had participated in this proceeding as a 
third party.  Thailand thanked the members of the Panel and the Appellate Body, as well as the Rules, 
Legal Affairs, and Appellate Body Secretariat, for their work in this dispute.  Thailand warmly 
welcomed the Appellate Body's decision and hoped that it marked the beginning of the end of the 
series of zeroing cases.  Thailand sincerely regretted the controversy that those cases had caused.  In 
addition, Thailand appreciated that the Appellate Body had, once again, reiterated that zeroing was 
not consistent with the Anti-Dumping Agreement.   Thailand agreed with the sentiments of the 
concurring opinion that it was now time to draw this debate to a close.  Thailand agreed with the EC 
statement regarding the Appellate Body's finding  that a challenge may be brought against the 
continued use of zeroing.  Thailand saw no require ment under the covered agreements, or no purpose 
that would be served, by requiring Members to init iate separate disputes to  challenge every single 
instance in which the United States used zeroing in  each of the various administrative proceedings it 
conducted over the lifetime of each of its anti-dumpi ng measures.  Finally, Thailand looked forward 
to prompt compliance by the United States in this dispute. 
89. The representative of India  said that her country had participated in those proceedings as a 
third party due to the systemic concerns about the issue of zeroing and the proper interpretation of the Anti-Dumping Agreement and the DSU.  India welcom ed the Appellate Body Report in this dispute 
regarding the clarification given by the Appellate Body on the issue of WTO-inconsistency of the 
zeroing practice.  As had been mentioned by prev ious speakers, the issue of zeroing was not a new 
one before the WTO adjudicating bodies.  Indeed the practice of zeroing had first been condemned in 
2001 and the Appellate Body had since then maintained  a consistent and coherent line on this issue.  WT/DSB/M/265 
Page 24  
 
  India welcomed the Appellate Body's findings in this  dispute with respect to the simple zeroing in 
periodic reviews reaffirming its previous rulings  that simple zeroing in periodic reviews was 
inconsistent with the Anti-Dumping Agreement.  I ndia also welcomed the Appellate Body's findings 
that the continued application of anti-dumping duti es after sunset reviews, where the margins of 
dumping were calculated through the use of zeroing methodology in the original investigations, was 
also inconsistent with Article 11.3 of the Anti-Du mping Agreement relating to sunset reviews.  The 
Appellate Body had, in several rulings, pointed out  that the use of zeroing distorted the process of 
establishing dumping margins and inflated the dumping margins for the product as a whole and had made it clear that the practice of zeroing, whethe r in original investigations or in reviews, was per se  
WTO-incompatible.  However, it was regrettable that  the issue of zeroing had been brought back to 
the Appellate Body for its review repeatedly desp ite its well-established rulings on the issue.  India 
welcomed the Appellate Body Report and urged the early implementation of the ruling of the 
Appellate Body so as to bring predictability in th e implementation of the Anti-Dumping Agreement as 
interpreted by the Appellate Body.  India appreciated  that the Appellate Body had come to the right 
decision in this dispute. 
90. The representative of China
 said that his country wished to thank the Appellate Body, the 
Panel and the Secretariat for their excellent work in  those proceedings.  China had been a third party 
to this dispute as it had a systemic concern with the legal issues considered in this case.  China 
thought the legal interpretations and findings of the Appellate Body on zeroing in its Report were 
sound and consistent, which ensured and strengthened the credibility and predictability of the dispute 
settlement system.  China, therefore, welcomed the adoption of the Appellate Body Report and the 
Panel Report and expected the United States to take all necessary actions without delay and stop using 
the zeroing methodology. 
91. The representative of Chile  said that, while his country had not been a third party in this 
dispute, the issue of zeroing had always been an ar ea of interest to Chile.  In that respect, Chile 
supported the adoption of the Reports.  Chile believed that the Reports went in the right direction in 
terms of prohibiting the use of the zeroing methodol ogy in anti-dumping inv estigations.  However, 
Chile regretted some comments made in the Report.  First, the concept of hierarchy established in the 
DSU did not exist with regard to the role of the A ppellate Body and the Panel.  Second, with respect 
to the jurisprudential value of the rulings, as stat ed by the United States, the DSU did not establish a 
common law system and, therefore, the decisions of  the Appellate Body and Panels were taken in 
relation to specific disputes.  He reiterated that  Chile regretted the trend of the Appellate Body 
whereby the Appellate Body declared  that its decisions had jurisprude ntial value.  Chile supported the 
adoption of the Reports but had some concer ns regarding the above-mentioned issues. 
92. The DSB took note  of the statements, and adopted  the Appellate Body Report contained in 
WT/DS350/AB/R and the Panel Report contained in WT/DS350/R, as modified by the Appellate 
Body Report. 
4. Election of Chairperson 
93. The outgoing Chairman  said that, before he would proceed  with this Agenda item, he would 
first wish to thank the Secretariat for the support provided to him in the course of the year.  In 
particular, he thanked Mr. E. Roge rson and his team and Mr. Bruce Wilson.  He would also wish to 
express special thanks to Ms. B. Mueller-Holyst who had played a fundamental role in supporting the 
Chairman over the past year.  Second, he was ve ry impressed by the high level of professionalism of 
delegations and by the positive working environment th at they created.  As he was stepping down as 
Chairman of the DSB, he was more convinced than  ever of the importance of the dispute settlement 
system.  In his assessment, Members were satisfied  with the way the DSB worked.  The system had 
gradually acquired legitimacy, which was proven by  the fact that Members continued to bring 
disputes to the WTO.  There were, of course, certa in areas which required more work to be done to  WT/DSB/M/265 
 Page 25 
 
 
  produce a meeting of minds and bring different pos itions closer together, such as the notion of 
jurisprudence, whether or not there were legal l oopholes, the limits of transparency and degrees of 
compliance, but the system inspir ed confidence and was admired outside the WTO.  The DSB would 
now be in the very good hands of Amb. John Gero  who had a great experience in trade matters and 
was a man of common sense and wisdom.  
94. The outgoing Chairman  recalled that at its meeting on 3 February 2009, the General Council 
had taken note of the consensus on a slate of na mes for Chairpersons to a number of WTO bodies 
including the DSB.  On the basis of the understa nding reached by the General Council, he proposed 
that the DSB elect, by acclamation, H.E. Mr. John Gero of Canada as Chairman of the DSB. 
95. The DSB so agreed . 
96. The incoming Chairman  thanked Members for the honour they had bestowed on him and said 
that he hoped that over the coming year he would be able to fulfil all that honour.  He believed that 
the DSB was one of the corner stones of the Organizat ion and said that he was filling the position with 
great trepidation but with great hope.   
97. The representative of the United States  said that his delegation thanked Amb. Matus for his 
service as Chairman of the DSB over the past year.  The United States deeply appreciated the broad 
experience, sense of balance and serious commitment that he brought to the job and knew that these 
important qualities would continue to be a benefit to Members in his new role as Chairman of the 
General Council.  The United States looked forward to  working with Amb. Matus in that capacity in 
what was going to be an interesting and ch allenging year.  The United States extended its 
congratulations to the new Chairman of the DS B, and looked forward to working with him in 
addressing the fulsome agenda of the DSB over the coming year. 
98. The representative of Mexico  said that his country welcomed Amb. Gero to his new role as 
the Chairman of the DSB.  Mexico thanked the ou tgoing Chairman for his support and wished him all 
the best in his new functions.  Mexico was very pr oud to have worked with Amb. Matus as Chairman 
of the DSB and bilaterally in his capacity as Amb. of  Chile.  Finally, referring to the statement by the 
outgoing Chairman he noted that in the context of  the DSU negotiations there were proposals that 
could improve the DSU provisions, in particular with  regard to compliance.  In a time of economic 
difficulties, Members needed to look at what c ould be done to lighten the Agenda of the DSB 
meetings, especially with regard to Agenda  item 1 concerning compliance with the DSB's 
recommendations and rulings.    
99. The representative of the Bolivarian Republic of Venezuela  said that his country welcomed 
the new Chairman and wished him every success.  He thanked the outgoing Chairman for the work 
that he had been carrying out in the DSB and wished  him success in his new role as Chairman of the 
General Council.  
100. The representative of the European Communities  said that his delegation thanked the 
outgoing Chairman for having kept the not so easy DSB under control and wished him well in his new 
task.  The EC welcomed the new Chairman and was convinced that he would carry out the job with 
pleasure and success.  
101. The representative of Canada  said that her country thanked the outgoing Chairman for his 
leadership and guidance over the past year.  While  some who did not have the pleasure of spending 
much time in the DSB may think that the matters de alt with in the DSB were dry and legalistic, DSB 
participants could sometimes be calle d upon to navigate fairly complicated and delicate issues.  In that 
regard, Canada thanked the outgoing Chairman, for all of the skill and expert advice that he had WT/DSB/M/265 
Page 26  
 
  provided in navigating some of those difficult wa ters.  Canada wished him success in his new 
endeavours.  Canada welcomed Am b. Gero as the new Chairman  
102. The representative of Ecuador
 said that his country thanked Amb. Matus for the excellent way 
in which he had managed the issues under considera tion in the DSB.  Ecuador was convinced that 
Amb. Matus would be an excellent Chairman of th e General Council and wished him every success.  
Ecuador welcomed the new Chairman of the DSB and wished him all the best. 
103. The representative of Colombia  said that the issues dealt with in the DSB were, broadly 
speaking, dry and legalistic, but those were the is sues that were crucial for the operation of the 
Organization.  Colombia thanked the outgoing Chairman for the effective and professional way in which he had presided over the deliberations of the DSB and wished the new Chairman every success.   
104. The representative of Brazil
 said that his country welcomed Amb. Gero as the new Chairman 
of the DSB.  His appointment came as yet anot her recognition of his qualities and professionalism and 
also of the confidence that the WTO Membership placed upon him.  Every official or negotiator had 
one or two traits that were most evident and tende d to shape their acts.  For Amb. Gero, it was his 
objectivity, result-oriented, no-nonsense approach to  issues that could be at once both extremely 
complex and sensitive.  The DSB, where complexities and sensitivities abounded, welcomed 
Amb. Gero's objectiveness and his ability to handle  red-hot issues.  At the same time, Brazil 
expressed its recognition to Amb. Matus for the high  sense of duty and respons ibility he had shown in 
conducting the DSB over the past year.  During that time, issues had been no less complex or sensitive and his leadership had taken Members safely through of ten mined waters.  Brazil was 
convinced that Members would witness the same di splay of competence of Amb. Matus as the new 
Chairman of the General Council, and in  that regard wished him every success. 
105. The DSB took note
 of the statements.  
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