WORLD TRADE  
ORGANIZATION  WT/DS320/16 
12 November 2008 
 
 (08-5502) 
 Original:   English 
  
 
UNITED STATES – CONTINUED SUSPENSION OF OBLIGATIONS 
IN THE EC – HORMONES DISPUTE 
 
Communication from the United States 
 
on concerns regarding the Appellate Body's Report  
 
 
 The following communication, dated 7 November 2008, is circulated at the request of the 
delegation of the United States.  
_______________ 
 
 1. The Appellate Body issued its report in United States – Continued Suspension of Obligations 
in the EC – Hormones Dispute  ("US – Hormones Sanctions ") on 16 October 2008.  The Appellate 
Body's reversal of the panel's findings  and conclusions on Article 23 of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes  ("DSU") is a proper and legally and factually 
sound correction of the errors with respect to Article 23 of the DSU in the report of the Panel in this 
proceeding.  However, other aspects of the Appellate Body's report, in particular the Appellate Body's 
apparent perception of the proper relationship between the role of the Appellate Body in helping 
resolve disputes and the role of Members in es tablishing the rules and procedures for dispute 
settlement as well as the Appellate Body's treatment  of certain other provisions of the DSU, raise 
serious systemic and legal concerns  which should be an issue for all WTO Members.  Those concerns 
are presented and summarized below. 
2. It is first useful to recall the role that Me mbers have provided for the Appellate Body in 
agreeing to its establishment.  Members have explicitly  agreed that the Appellate Body plays a limited 
role.  In particular, the "dispute settlement system  of the WTO" "serves to preserve the rights and 
obligations of Members under the c overed agreements, and to clarify the existing provisions of those 
agreements in accordance with cu stomary rules of interpretation of public international law."
1  The 
"findings and recommendations" of the Appellate Body "cannot add to or diminish the rights and obligations provided in the covered agreements."
2  At the same time, the "Ministerial Conference and 
the General Council shall have the exclusive authority  to adopt interpretations of this Agreement and 
of the Multilateral Trade Agreements."3  Furthermore, any amendment to the DSU "shall be made by 
consensus and these amendments shall take effect for all Members upon approval by the Ministerial 
Conference."4 
3. Accordingly it is clear that the Appellate Body can clarify, but not interpret or amend, any of 
the covered agreements, including the DSU. 
                                                      
1 Article 3.2 of the DSU. 
2 Article 19.2 of the DSU. 
3 Article IX:2 of the Marrakesh Agreement Establishing the WTO. 
4 Article X:8 of the Marrakesh Agreement Establishing the WTO. WT/DS320/16 
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  4. Unfortunately, the report of the Appellate Body appears not only to clarify, but also to 
propose amendments and interpretations, of the DSU,  and thus proposes to add to or diminish the 
rights and obligations of Members.   
The Process to Be Followed After the DSB Has Granted Authorization to Suspend Concessions
 
 
5. In the appeal, the question was presented as to  whether Article 21.5 of the DSU required the 
United States to initiate a compliance panel pro ceeding in response to th e European Communities' 
claim of compliance.  The Appellate Body correc tly concluded that the United States was not so 
required and therefore rejected the EC's claim that the United States had breached Article 21.5.  There 
was no need for the Appellate Body to go further. 
6. Yet the Appellate Body went further.  It proceed ed to opine, at surprisi ng length and detail, on 
what process Members should follow in the situa tion where the DSB has authorized a Member to 
suspend concessions with respect to the Member c oncerned, and the Member concerned subsequently 
claims that it has complied with the DSB recommenda tions and rulings at issue (the "post-suspension 
situation").   
7. The Appellate Body considered that recourse to Article 21.5 compliance panel proceedings 
(in which the original panelists are preferred and th e time frame is expedited) is the exclusive means 
for resolving a post-suspension situation.5  Furthermore, the Appellate Body found that there is a 
responsibility for either the original respondent or  the original complainant to ensure that the 
suspension of concessions is not applied indefinitely.6  As a result, either party must initiate 
compliance panel proceedings as soon as possible.7  However, recognizing that a proceeding initiated 
only by the original responding party could pose a number of problems, the Appellate Body 
considered that where a proceeding is brought firs t by the original responding party, the original 
complainant could then bring its own, separate co mpliance proceeding and the two proceedings could 
simply be assumed to result in a "review of all the issues."8  The original complainant should act "as 
soon as possible" after adoption of an implementi ng measure or after the filing of the original 
respondent's Article 21.5 panel request, so that bot h matters may be referred to the original panel 
wherever possible.9  The Appellate Body then set forth the rules it considered would apply regarding 
the allocation and shifting of the burden of proof.10 
8. The procedures suggested by the Appellate Body  are deeply troubling both in terms of the 
supposed textual basis on which the Appellate Body relied as well as the severity of the problems with 
the procedures themselves.   
9. According to the Appellate Body, Article 21.5 of th e DSU is to be read to limit the procedural 
options available to Members such that a Member may only  have recourse to an expedited compliance 
panel proceeding.  The Appellate Body said that:  "Article 21.5 dictates that panel proceedings 
pursuant to this provision are the procedures that  must be followed for adjudicating the cause of 
action as framed in its opening clause."11  The Appellate Body bases its reading on the word "shall" 
together with "these dispute settlement procedures"  in Article 21.5.  However there are numerous 
problems with the Appellate Body's reading. 
                                                      
5 Paragraph 345 of the Appellate Body Report. 
6 Paragraph 348 of the Appellate Body Report. 
7 Paragraph 348 of the Appellate Body Report. 
8 Paragraph 355 of the Appellate Body Report. 
9 Paragraph 354 of the Appellate Body Report. 
10 Paragraphs 360-365  of the Appellate Body Report. 
11 Paragraph 336 of the Appellate Body report.  WT/DS320/16 
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  10. First, the Appellate Body ignores the fact th at Article 21.5 specifies that "these dispute 
settlement procedures" include  "resort to the original panel."  In other words, expedited compliance 
panel proceedings are only one of the "procedures" available under Article 21.5.  The Appellate Body 
reads the word "including" out of Article 21.5.  Instead, the Appellate Body appears to be reading 
"including" as "except that"; in other words, th e Appellate Body would have the DSU apply, except 
that the only proceeding available is a compliance panel proceeding.12 
11. But the Appellate Body is not even consistent in  its reading.  The Appellate Body also finds 
that "these dispute settlement proce dures" include the consensual forms13 of dispute settlement.14  The 
Appellate Body cannot have it both ways – either the reference in Article 21.5 to "these dispute 
settlement procedures" is a referenc e only to expedited compliance pane l proceedings or it refers to a 
range of procedures.  Nothing in Article 21.5 pr ovides that "these dispute settlement procedures" 
refers to expedited compliance panel proceedings plus consensual forms of dispute settlement.   
12. Second, if "these dispute settlement procedures" in truth did limit the procedures only to the 
expedited compliance panel proceedings referred to in Article 21.5, then there would be no appeal 
from such compliance panel proceedings.  The lan guage on which the Appellate Body relied nowhere 
includes an appeal among "these dispute settlement  proceedings."  Under the Appellate Body's 
reasoning, therefore, Article 21.5 precludes appeals.  Yet there have been numerous appeals from compliance panel proceedings under Article 21.5. 
13. Third, the Appellate Body's finding on the exclusivity of Article 21.5 compliance panel 
proceedings for resolving post-suspension disputes also contradicts the Article 22.6 Arbitrator in EC – 
Hormones .  According to the Arbitrator, both "ord inary" panel proceedings and Article 21.5 
compliance panel proceedings could be legitimate av enues for the EC to challenge US suspension of 
concessions.  As the Arbitrator explicitly explai ned to the EC in the Arbitrator's award: 
"In the event of a future dispute on this issue, we note that the EC could start normal 
– or arguably even expedited – DSU pro cedures challenging the consistency of the 
level of US suspension with Article 22.4."
15 
In this proceeding, the EC was following one of th e procedures explicitly approved by the Arbitrator.  
The Arbitrator's decision is "final"16 and in this sense is institu tionally on an equal level as an 
Appellate Body report.  Yet the Appellate Body h as now explained that this procedure was not open 
to the EC.  The Appellate Body has thus set up a contradiction within the WTO dispute settlement 
system.  
14. Fourth, the problem goes beyond what has been sai d so far.  The Appellate Body's reading of 
Article 21.5 also contradicts its own finding that the Hormones – Sanctions  panel, which was 
established as an "ordinary" panel, had jurisdiction to consider the substance of the EC's claim of 
compliance.  In fact, it was the Appellate Body's ow n understanding that, had it considered itself able 
                                                     
 
12 For example, in footnote 772 of its Report, the Appellate Body contemplates that Article 9, which is 
not a procedure under Article 21.5, would be available. 
13 For example, good offices, conciliation, or media tion under DSU Article 5, or arbitration under 
Article 25 of the DSU. 
14 See paragraph 340 of the Appellate Body report. 
15 Arbitrator Award, European Communities – Measures Concerning Meat and Meat Products 
(Hormones) – Recourse to Arbitration by the European  Communities, WT/DS26/ARB, circulated 12 July 1999, 
para. 82. 
16 Article 22.7 of the DSU. WT/DS320/16 
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  to complete the analysis on compliance, final reso lution of the question could have been achieved 
through this proceeding.  Again, there is an inhere nt contradiction in the Appellate Body's reasoning.
17 
15. These are some of the legal flaws in the Appella te Body's reasoning.  Beyond that, however, 
there are numerous problems with the actual pro cedure recommended by the Appellate Body.  For 
example, the Appellate Body's approach would preclude a Member from initiating an "ordinary" 
panel proceeding pursuant to DSU Article 6 to ad dress matters of concern with another Member.  
There has been much litigation over the scope of  the jurisdictional limitation of an Article 21.5 
compliance panel proceeding.  A complaining party has, up until now, always retained the option of 
avoiding those jurisdictional complexities (for example,  in a situation where it is not clear whether a 
measure is a "measure taken to comply") and in itiating an ordinary panel proceeding instead (in 
exchange, of course, for foregoing the accelerated time  frames mentioned in Article 21.5).  Under the 
Appellate Body's approach, a Member woul d be forced to choose whether to:   
(1) argue that a measure is a "measure taken to comply" (and therefore a challenge against 
that measure could only be pursued throug h an Article 21.5 proceeding), and risk a 
finding at the end of the process that in fact the measure is not  a "measure taken to 
comply" and then need to begin an entir e new "ordinary" panel proceeding, or  
 
(2) conversely challenge the measure in an ordinary panel proceeding only to risk 
discovering in the end that it was a "measure taken to comply" and therefore the Member would need to start all over and bring an Article 21.5 compliance panel proceeding with 
respect to that measure. 
 
Either outcome would entail all the expense a nd delay associated with having to bring two 
proceedings.  Furthermore, even where it might ma ke sense to challenge a measure together with 
other, related measures that are clearly not "mea sures taken to comply," the Appellate Body's 
approach would prevent a panel from consider ing the various related measures together. 
16. In its report, the Appellate Body correctly identified some of the potential problems with 
respect to the terms of reference of an Article 21.5 proceeding.
18  However, the Appellate Body's 
suggestion that two separate Article 21.5 proceedin gs could be brought to avoid the problems, one 
brought by the Member concerned and one by the complaining party, would not necessarily solve these problems but only create additional ones.  For ex ample, there is nothing in Article 21.5 that 
provides for consolidating or harm onizing compliance panel proceedings
19 and the DSB could end up 
adopting mutually exclusive or inconsistent co mpliance panel reports.  Members have already 
experienced some of the difficulties involved in mo re than one panel seeking to address the same or 
similar issues.   
17. There are other practical difficulties and issues that Members have been identifying and 
discussing in negotiations on the procedures in a pos t-suspension situation.  The Appellate Body's 
proposed approach does not take these into account  and would appear to be too simplistic. 
                                                      
17 The contradiction could be resolved by interpreting the Appellate Body's opining as intended to 
pronounce a new rule, i.e., while other avenues had been viable until now – including in this dispute – henceforward
, the only avenue available to pa rties in a post-suspension situati on is an Article 21.5 proceeding 
brought by one or both parties that follows the detaile d procedure on claims and co unterclaims and the specific 
burden of proof scheme envisioned by the Appellate Body in this report.  Such an interpretation, however, would only highlight the extent to which the Appellate Body would be operating outside its authority and  
"making law" rather than clarifying the application of the existing rules. 
18 See paragraphs 353 and 354 of the Appellate Body report. 
19 This is particularly true when the timing of diffe rent panels, or the Members who are third parties to 
the panels differed, could result in different panelists serving on each panel.  WT/DS320/16 
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  18. Members have spent several years trying to  reach agreement on what process Members 
should follow in a post-suspension situation, but ha ve not yet achieved consensus on the procedures 
that would apply.20  The Appellate Body presumably is aware that Members are engaged in these 
negotiations, yet proceeded to opine on the matter.  The Appellate Body does not explain in its report 
why it chose to do so.  It is possible the Appellate  Body considered that its suggestions for how to 
proceed might be helpful to Members.  Unfort unately, however well-intentioned the advice might 
have been, the Appellate Body's opinion on the appr opriate procedural avenue for resolving disputes 
in a post-suspension situation is an advisory opini on made outside of the Appellate Body's proper 
mandate in this dispute and outside its author ity under the WTO dispute settlement system.   
19. It is no secret that the DSU lacks specificity on the procedures applicable in a post-suspension 
situation.  Indeed, this lack of specificity has been long observed by Members and is a key reason for 
the negotiations referred to above.  Members' negotiations on this  matter have demonstrated the 
complexity of the questions presented and the need  for Members to decide on a complex series of 
issues on how the system would best function.  Desp ite the solidity of the Appellate Body's analysis 
on Article 23 and whatever good intentions the Appe llate Body may have had with respect to its 
additional DSU analysis, the Appellate Body went too far; the rules it has articulated as being 
applicable in a post-suspension situation are not what any Member has suggested or to which any 
Member has agreed.  This incurs  negative consequences for the dispute settlement system and for 
Members.  
20. Furthermore, despite the fact that the specific ity supplied by the Appellate Body on the rules 
and procedures applicable in a post-suspension situ ation is nowhere provided for in the DSU, the 
Appellate Body somehow "found" that both parti es must engage exclusively in Article 21.5 
compliance panel proceedings that either or both pa rties initiate, and even went so far as to provide 
for how harmonization of separate proceedings c ould occur should both parties initiate them21 and a 
detailed scheme for applying and shifting the burden of proof, which would apply to post-suspension 
disputes generally.   
21. This type of engagement by the Appellate Body amounts to nothing less than rule-making, 
which is outside of the Appellate B ody's mandate.  This is of serious concern in and of itself, even if 
all Members considered that the Appellate Body's suggestions for how to a pproach a post-suspension 
situation were a well-considered approach both from a legal and practical perspective.  Unfortunately, 
that is not the case. 
22. In conclusion, the Appellate Body's proposed approach is outside the authority of the 
Appellate Body, lacks legal foundation in the text of  the DSU, raises a number of practical problems, 
and ignores the extensive work already undertaken by  Members in their negotiations to clarify and 
improve the DSU. 
Untenable Standard for "Inde pendence and Impartiality"  
 
23. The Appellate Body also concluded that the pa nel's appointment of and consultation with two 
scientific expert advisers infringed "the EC's" due process rights.22  Those two experts were directly 
involved in the risk assessments performed by  the Joint FAO/WHO Expert Committee on Food 
Additives ("JECFA"), the international organizatio n that conducts risk assessments, advises, and 
                                                      
20 See for example TN/DS/W/32, dated 22 January 2003. 
21 See footnote 772 of the Appellate Body Report.  Although in that footnote the Appellate Body relies 
in part on Article 9 of the DSU, that Article would not appear to apply by its terms to the situation envisioned. 
22 The Appellate Body did not explain why the  " due process "  rights at issue accrued only to the EC.  
Presumably all  the parties to a dispute have a "due process" interest or "right" in ensuring that the process for a 
panel to receive expert advice affords due process. WT/DS320/16 
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  makes recommendations to the Codex Alimentari us Commission ("Codex"), the international 
standard-setting body that Members have explicitly endorsed in the Agreement on the Application of 
Sanitary and Phytosanitary Measures  for the hormones at issue.  According to the Appellate Body, 
this fact compounded with the particular role that  JECFA's assessments had in this case, formed an 
objective basis to conclude that the independence or  impartiality of those two experts would likely be 
affected.  According to the Appe llate Body, the panel's appointment  of those two experts therefore 
compromised the independence and impartiality of the panel and constituted an infringement of the 
EC's due process rights. 
24. The Appellate Body's standard for independence an d impartiality of expert advisers is of great 
concern.  It could result in disqualifying those who have the greatest expertise and familiarity with an 
issue, subject matter, or controversy.  The two experts in question had an  intimate understanding and 
well-developed ability to communicate matters of extreme technical, scientific, and conceptual 
complexity, by virtue of their familiarity  with the risk assessments at issue.   
25. Furthermore, the panel was well aware of the e xperts' prior involvement in the Codex process 
and was able to take that into account in evaluating the advice of the experts.  Again, this is all the 
more surprising given that the panel was fully in a position to take into account the involvement of the 
experts in the earlier JECFA processes.  Indeed, it is important to recall that it is panels, not experts, that make findings of fact.  Panels are expect ed to weigh the probative value of any source of 
information in making findings of fact, including of  course, any information from an expert, taking 
into account their involvement in earlier processes rele vant to and impacting the matters in question.  
Panels are entirely capable and are expected to ma ke these determinations, and they do so in every 
single dispute for which they are established.  
26. In other contexts in WTO dispute settlement, fa miliarity and expertise with the matters in 
dispute are assets viewed with great favor in selecting adjudicators.  In Article 21.5 compliance panel proceedings, for example, original panelists ar e preferred for the composition of the compliance 
panel.  As the Appellate Body explained in its report, original panelists  are "familiar with the 
background of the dispute and the inconsistencies with the covered agreements they had found" and 
would be able "to examine whether the inconsistenci es . . . have been rectified . . . .  [Article 21.5 
compliance panel] proceedings would benefit from their knowledge and expertise gained from serving 
as panelists in [the original panel proceeding], a nd would be adjudicated within a shorter time frame 
than regular proceedings."
23  The fact that those panelists may have been reversed on appeal and may 
be reviewing the same or similar issues in the compliance phase is apparently of no concern to the 
Appellate Body and raises no problems in te rms of their impartiality or independence. 
27. Based on the Appellate Body's reasoning, howeve r, the same kind of familiarity with the 
facts, background, and conclusions from a prior deliberative exercise should be considered disqualifying with respect to the scientific expert s because this prior exposure would likely prejudice 
the individuals' ability to view a modified s ituation with independence and impartiality.  
28. Similarly, the Appellate Body's view concer ning impartiality and independence would mean 
that no Appellate Body member or member of the S ecretariat could be involved in an appeal from a 
panel report involving issues similar to those explor ed in an earlier Appellate Body report in which 
that Appellate Body member or member of the Secretariat had been involved.  Otherwise the 
Appellate Body would lack the necessary impartia lity and independence and would infringe the due 
                                                     
 
23 Appellate Body Report, para. 344.  WT/DS320/16 
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  process rights of at least one of the parties to the dispute.24  Yet this is at odds with the Appellate 
Body's apparent views in that type of situation. 
29. In conclusion, the Appellate Body's reasoning and standard for impar tiality and independence 
of expert advisers to panels appears to be fundame ntally confused and at odds with the principles 
underlying the selection of adjudicators in the WTO dispute settlement system. 
Legally Defective "Recommendation"  
 30. Members have explicitly agreed that: "Where a panel or the Appellate Body concludes that a 
measure is inconsistent with a covered agreement, it shall recommend that the Member concerned 
bring the measure into conformity with that agreement."
25  In other words, the only  situation in which 
a panel or the Appellate Body is authorized to  issue a recommendation is where a panel or the 
Appellate Body has concluded that a measure with in the terms of reference of the proceeding is 
inconsistent with a covered agreement.   
31. In this appeal, the Appellate Body concluded th at there was no measure that was inconsistent 
with a covered agreement.  Th e Appellate Body has no authority, therefore, to make any 
"recommendation" in this appeal.  As a result, it is apparently an ill-considered word choice26 on the 
part of the Appellate Body to use the term "recommend" in its report.27  Any other reading would be 
contrary to the DSU. 
32. A further difficulty with reading the Appellate  Body's "recommendation" as intending to have 
the legal status of a recommendation under Article 19. 1 of the DSU is that it is not addressed only to 
the United States as the responding party in the dis pute, but it is also addressed to the European 
Communities, which was the complaining party in this  proceeding.  There is no basis in the DSU for 
addressing a "recommendation" to a complaining party.  
33. Yet another difficulty with such a reading is that  the Appellate Body refe rs to "without delay," 
although nothing in Article 19 of the DSU provides au thority for the Appellate Body to specify a time 
period for implementing a "recommendation" and ind eed, such authority would conflict with other 
elements of the DSU, such as Article 21.3.   
34. In addition to these fundame ntal legal failings with r eading the Appellate Body's 
"recommendation" as intending to have the legal stat us of a recommendation under Article 19.1 of the 
DSU, there would also be a number of practical difficulties as well.  For example, would the United States and the EC each have a "reasonable period of time" to comply with such a "recommendation"?  Would those times periods be the same?  How woul d Article 22 apply in the absence of a "measure" 
that was found to be inconsistent  with a covered agreement?  
                                                     
 
24 Presumably of even greater concern under the Appellate Body's approach would be a situation in 
which the panel was disagreeing with an earlier Appellate  Body report with which that Appellate Body member 
had been involved. 
25 Article 19.1 of the DSU. 
26 The question of ill-considered word choices is one of the types of questions that could be addressed 
were the Appellate Body to afford parties an opportunity to comment on an interim report of the Appellate 
Body. 
27 Paragraph 737 of the Appellate Body report (" In the light of the obligations arising under 
Article 22.8 of the DSU, we recommend that the Disp ute Settlement Body request the United States and the 
European Communities to initiate Article 21.5 proceedings without delay in order to resolve their disagreement 
as to whether the European Communities has removed the measure found to be inconsistent in EC – Hormones 
and whether the application of the suspension of concessions by the United States remains legally valid."). WT/DS320/16 
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  35. In conclusion, while framed as a "recommenda tion" along the lines of recommendations by 
the Appellate Body pursuant to Article 19.1 of the DSU in past disputes,  the use of the term 
"recommend" is best read as an ill-consid ered word choice by the Appellate Body. 
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