RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/210 
30 May 2006 
 (06-2577) 
Dispute Settlement Body 
21 April 2006  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 21 April 2006  
 
Chairman:  Mr.  Muhamad Noor Yacob (Malaysia) 
  
Subjects discussed
: Page  
 
1. Surveillance of implementation of recommendations adopted by the DSB.........................2  
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States .............................................................................................................. ...........2  
(b) United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by  the United States...................................................................................5  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States .................................................................................................................. .............5  
(d) European Communities – Protection of trad emarks and geographical indications for 
agricultural products and foodstuffs:  Status  report by the European Communities ..................6  
(e) United States – Measures affecting the cr oss-border supply of gambling and betting 
services:  Status report by the Unite d States...............................................................................8  
(f) European Communities – Countervailin g measures on dynamic random access 
memory chips from Korea:  Status re port by the European Communities ...............................10  
2. Mexico – Tax measures on soft drinks and other beverages...............................................12  
(a) Implementation of the recommendations of the DSB...............................................................12  
3. Implementation by the European Co mmunities of the recommendations and 
rulings of the DSB in relation to "European Communities – Regime for the 
Importation, Sale and Distribution of Bananas" and related subsequent WTO 
proceedings .................................................................................................................... ..........13  
(a) Statements by Honduras, Ni caragua and Panama.....................................................................13  
4. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ..........................................15  
(a) Statements by Canada, the European Communities and Japan.................................................15  
5. United States – Countervailing measures concerning certain products from the 
European Communities..........................................................................................................1 8 
(a) Statement by the Eur opean Communities.................................................................................18  WT/DSB/M/210 
Page 2  
 
6.
 European Communities and certain member States – Measures affecting trade 
in large civil aircraft ........................................................................................................ .......19  
(a) Request by the United States for a decision of the DSB...........................................................19  
(b) Request for the establishment of a panel by the United States .................................................19  
7. United States – Measures affecting trade in large civil aircraft .........................................23  
(a) Initiation of the procedure for developing  information concerning serious prejudice 
under Annex V of the SCM Agreement and d esignation of Mr. Mateo Diego-Fernández 
as the DSB representative referred to in paragr aph 4 of that Annex for the development 
of evidence to be examined by the Panel in DS317 established on 17 February 2006 in the form of written responses by the United States to written questions from the DSB 
representative to the United States pursuant to Annex V, paragraph 1 and Annex V, 
paragraph 2 of the SCM Agreement .........................................................................................23
 
8. Proposed nominations for the indicative list of governmental and  non-governmental panelists ...................................................................................................24
 
 
 
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.41) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.41) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.16) 
 
(d) European Communities – Protection of tr ademarks and geographical indications for 
agricultural products and foodstuffs:  Stat us report by the European Communities 
(WT/DS174/25/Add.3 – WT/DS290/23/Add.3) 
 (e) United States – Measures affecting the cross- border supply of gambling and betting services:  
Status report by the United States (WT/DS285/15/Add.1) 
 
(f) European Communities – Countervailing measu res on dynamic random access memory chips 
from Korea:  Status report by the European Communities (WT/DS299/8) 
 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 then proposed that the six sub-ite ms to which he had just referred be considered 
separately. 
(a) United States – Section 211 Omnibus Appropria tions Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.41) 
2. The Chairman  drew attention to document WT/D S176/11/Add.41, which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US Section 211 Om nibus Appropriations Act of 1998.  WT/DSB/M/210 
 Page 3 
 
 
  3. The representative of the United States  said that his country had provided a status report in 
this dispute on 10 April 2006, in accordance with Article 21.6 of the DSU.  As noted in the report, several legislative proposals relating to sec tion 211 that would implement the DSB's 
recommendations and rulings in this dispute had b een introduced in the current Congress, in both 
houses of Congress. The US administration was working with the US Congress to implement one or 
more of these legislative vehicles to implement the DSB's recommendations and rulings. 
4. The representative of the European Communities
 said that the effective and non- 
discriminatory protection of intellectual property ri ghts worldwide was a key element in the further 
development of international trade.  This was well understood by the United States, which was a key 
promoter of the TRIPS Agreement and remain ed strongly committed to pursue strong and non-
discriminatory protection of those rights.  This stood in sharp contrast with the persisting passivity of 
the United States when it came to respect other Members'  rights not only in this dispute but also in the 
Section 110 dispute, which would be  also taken up in the course of the meeting. The US behaviour 
undermined the authority of the TRIPS Agreement and ran against the objective of enhancing the 
protection of intellectual property rights.  Yet, rep ealing bills were pending in the US Congress. Their 
adoption would remove a discriminatory legislation that was driven by specific interests and would 
bring a satisfactory solution to this dispute. 
5. The representative of Cuba  said that, once again, Members were examining implementation 
of the DSB's recommendations regarding Secti on 211 of the US Omnibus Appropriations Act of 
1998, an item that had been on the agenda of the DS B meeting for over four years.  If one were to be 
objective, the title of this item should be ch anged so as to read: "Surveillance of Non-
Implementation".  The United States continued to repeat the ritual of presenting Members with 
identical reports, the only change being the date , as these reports did not indicate anything about 
actions which should be taken by the United States  in order to meet its WTO obligations. The US 
status report provided no such information beca use, quite simply, the United States was doing 
nothing, apart from deceiving and making a mockery of the DSB.  It was obvious that the United 
States now felt sheltered by the understanding that  it had reached with the EC, which was to its 
advantage since that understanding set no deadline fo r meeting the US WTO obligations and ensured 
that no retaliation was imposed against the United States for its lack of compliance. 
6. It had become a regular practice for the United St ates to breach its obligations time and again 
in the WTO while applying an obvious double sta ndard by preaching and pressurising other countries 
to respect their obligations.  Cuba wondered wh ether any credibility could be attached to a 
multilateral trading system based on binding rules and allegedly equal obl igations for all participants, 
when one of its major players maintained an attitude  of persistent and open defiance.  In contrast, 
those developing countries that had come under re view in dispute settlement proceedings had done 
their utmost to observe the principle of prompt compliance set forth in the DSU and had implemented 
the DSB's recommendations without undue delay, desp ite serious difficulties and considerable efforts 
that this had entailed for their Governments. 
7. Cuba did not, and would not, forgo its right to resort to the dispute settlement mechanism 
when it saw fit.  However, Cuba  was concerned about systemic im plications of such understandings 
because the DSB's decisions constituted obligations for Members. Compliance with these obligations 
was in the interests of all and could not and must not be circumvented by any Member.  Cuba pressed 
its appeal to Members to secure observance of the le tter of the multilateral tr ade agreements and their 
decisions, by demanding that the United States comply immediately, unconditionally and without 
further delay with all the DSB's rulings and recomme ndations, in particular those pertaining to this 
dispute, by repealing Section 211 which was unjust and discriminatory. 
8. The representative of China  said that, due to its systemic in terest his delegation continued to 
be concerned about the progress in this dispute. Si nce the adoption on 2 Februa ry 2002 of the Panel WT/DSB/M/210 
Page 4  
 
and the Appellate Body Reports pertaining to this dispute more than four years had passed.  China 
appreciated US efforts made during these four years towards implementation of the DSB's rulings, but regretted that there was no indication when the ma tter would be resolved to the satisfaction of the 
parties and other Members.  Such delays caused syst emic concerns about the efficiency of the dispute 
settlement system.  China believed that the WTO di spute settlement should constitute an effective and 
efficient system for trade disputes, which would bring a degree of certainty and predictability to 
international trade for all its Members.  In the m eanwhile, prompt implementation in this dispute was 
not only beneficial for other Members, but also  for the United States which was the advocate of 
intellectual property rights at all foras.  Once again, China wished to join the EC and Cuba in urging 
the United States to implement the DSB's d ecision in this dispute as soon as possible. 
9. The representative of Brazil
 said that in view of the systemic relevance of the issue discussed 
under this item, his country expressed concerns  about the continuation of the non-compliance 
situation in this dispute.  More than four years had passed since the adoption by the DSB of the Panel 
and the Appellate Body Reports, but  no implementing action had yet been taken by the United States.  
Perhaps more importantly, he noted that at this point in time there was no tangible sign in the short 
status report which had been provided by the United States that the matter would be settled soon.  As 
Brazil had repeatedly stated, prompt and full implementation of the DSB's rulings and recommendations was one of the major means to k eep the rules-based multilateral trading system 
credible and vibrant.  In light of these consider ations, Brazil urged the United States to take the 
necessary and urgent steps to implement the relevant DSB's rulings and recommendations. 
10. The representative of India
  said that his country continued to remain concerned that this item 
had been on the DSB's agenda for a very long time without any indication when the matter would be 
resolved, and the parties had also not been able to provide any information to the DSB on the likely 
date of resolution.  He reiterated that Members needed to reflect upon the systemic concerns about 
efficacy of the dispute settlement system, and to think about steps required to address these systemic 
concerns. 
11. The representative of Argentina  said that, like previous speakers, his country wished to 
express its systemic concern with regard to the delays in implementing the DSB's recommendations and rulings.   Such delays were particularly evid ent in the dispute under consideration which had now 
been on the DSB agenda for over four years.  It was Argentina's firm belief that prompt compliance with the DSB's recommendations and rulings was a critical element of the WTO dispute settlement 
system.  There could be no doubt that long delays in  implementation adversely affected the credibility 
of this system to the detriment of all Members.  In this respect, Argentina urged the United States to 
redouble its efforts to ensure immediate compliance with the DSB's recommendations and rulings in 
the Section 211 dispute. 
12. The representative of the Boliv arian Republic of Venezuela
 said that her delegation 
welcomed the status report by the United States regarding implementation of the DSB 
recommendations and rulings in the dispute "US – Section 211".  However, as her delegation had 
already stated at previous meetings, her country was concerned about the US status report because 
that report offered no certainty that the decisions of the DSB were being implemented or would be 
implemented in the near future.  This might have sy stemic implications.  In this respect, her country 
wished to be fully associated with  the statement made by Cuba and urged the United States to make 
every possible effort to modify its legislation as soon as possible and to comply with the DSB's 
rulings. 
13. The representative of Canada  said that his country thanked the United States for its status 
report in this dispute.  Like other Members, Ca nada continued to be disappointed that the United 
States had not yet been able to bring itself in to compliance with the DSB's recommendations and 
rulings. The WTO dispute settlement mechanis m was best served when, in accordance with 
Article 21.2 of the DSU, Members fulfilled their ob ligations in a timely manner and in accordance  WT/DSB/M/210 
 Page 5 
 
 
  with the DSB's recommendations.  At the same time, Members should not lose sight of Article 3.7 of 
the DSU, where  they had agreed that, ''[a] solution mutually acceptable to the parties to a dispute and 
consistent with the covered agreements is clearly to  be preferred.''  Indeed, Article 3.4 of the DSU 
provided that the rulings and recommendations of the DSB shall be aimed at achieving a satisfactory 
settlement of the matter.  Members had the right,  and every interest, to ensure that any such 
settlements were consistent with the WTO Agreem ent.  However, where Members sought, at any 
stage of the proceedings, to settle their disagreemen ts and disputes, parties to a dispute should be 
encouraged in their efforts. 
14. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.41) 
15. The Chairman  drew attention to document WT/DS184/ 15/Add.41, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US anti-dumping measures on certain hot-rolled steel products from Japan. 
16. The representative of the United States  said that his country had provided a status report in 
this dispute on 10 April  2006, in accordance with Article 21.6 of the DSU.  As of 23 November 2002, 
the US authorities had addressed the DSB's recommendations and rulings with respect to the calculation of anti-dumping margins in the hot-rolled  steel anti-dumping duty investigation in this 
dispute.  The US administration continued to su pport specific legislative amendments that would 
implement the DSB's recommendations and rulings with respect to the US anti-dumping duty statute, 
and was working with the US Congress to pass th ese amendments.  The US administration would 
continue to work with the US Congress to enact  legislation until those changes were made to 
implement the DSB's recommendations and rulings.  
17. The representative of Japan
 said that his country noted the US  status report and the fact that 
that there had been no new developments.  As the status report reaffirmed, the US administration 
would continue to work with the US Congress to en act the H.R. 2473, which had been put before the 
US Congress in May 2005.  Japan urged the Unite d States to make further efforts to pass the 
legislation promptly. Japan emphasized that a full and prompt implementation of the recommendations and rulings of the DSB was essentia l for the credibility of the system and believed 
that this objective was shared by the United States.  
18. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.16) 
19. The Chairman  drew attention to document WT/DS160/ 24/Add.16, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning Section 110(5) of the US Copyright Act. 
20. The representative of the United States  said that his country had  provided a status report in 
this dispute on 10 April 2006, in accordance with Ar ticle 21.6 of the DSU.  As the report indicated, 
the US administration was working closely with the US Congress, and conferring with the EC, in 
order to reach a mutually satisfactory resolution of this matter. WT/DSB/M/210 
Page 6  
 
21. The representative of the European Communities
 said that it was with deep regret and 
concern that the EC wished to emphasize again th e lack of progress in the United States in solving 
this dispute.  Almost five years after adoption of the Panel Report in this dispute, the United States 
had done little to solve this dispute and maintained a legislation that blatantly violated intellectual 
property rights and hurt the interests of music creators.  The EC had received assurances from the 
United States that the US administration was ac tively discussing with the US Congress possible 
solutions to this dispute.  But, the EC was still waiting for more detailed in formation on the concrete 
initiatives of the US Administration vis-à-vis  the US Congress.  The EC called upon the United States 
to take the necessary action to end a situation of non-compliance that had already lasted too long.  
Finally, the EC wished to recall that it reserved it s right to reactivate, at any point in time, the  
arbitration proceedings on retaliation. 
22. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(d) European Communities – Protection of trad emarks and geographical indications for 
agricultural products and foodstuffs:  Stat us report by the European Communities 
(WT/DS174/25/Add.3 – WT/DS290/23/Add.3) 
23. The Chairman  drew attention to document WT/D S174/25/Add.3 – WT/DS290/23/Add.3, 
which contained the status report by the Europ ean Communities on progress in the implementation of 
the DSB's recommendations in the case concerni ng protection of tradem arks and geographical 
indications for agricultural products and foodstuffs. 
24. The representative of the European Communities  recalled that at the 20 January 2006 
meeting, the EC had informed the DSB that the European Commission had proposed to the Council of 
the European Union a new Regulation on Geogra phical Indications which would implement the 
findings and recommendations of the DSB in this dis pute.  As stated in the status report already 
communicated to the DSB,  that proposal had been adopted by the Council on 20 March 2006.  This new Regulation on the protection of geographical indications and designations of origin for 
agricultural products and foodstuffs had been published in the Official Journal of the European Union 
on 31 March 2006 and had entered into force on the sa me day.  Thus, the EC had fully complied with 
the DSB's rulings and recommendations within the r easonable period of time, which had been agreed 
with Australia and the United States. 
25. The representative of the United States
 said that his country thanked the EC for its status 
report.  He recalled that in previous meetings, th e United States had highlighted a concern that, in a 
number of respects, the GI regulation proposed by the EC in December 2005 would introduce further 
encroachments on TRIPS-protected trademark rights beyond those in the previous GI regulation.  The United States acknowledged that the EC had made cer tain changes in its final regulation that had 
addressed these concerns, and the United States thanked the EC for these improvements.  However, certain aspects of the final GI regulation remained  of concern, and the United States was not in a 
position at the present meeting to accept the EC's view that it had complied with the DSB's 
recommendations and rulings in this dispute. 
26. For instance, the previous Article 14(2) provide d for the continued use of trademarks that 
acquired rights before the submission in the EC of a registration application for a conflicting GI.  In 
the final regulation, this applied only to tradem arks acquiring rights before 1 January 1996, leaving 
any additional trademarks acquiring rights after 1 Ja nuary 1996, potentially vulnerable.  This change 
was particularly significant becau se the DSB relied on the previous  version of Article 14(2) in finding 
that the regulation's violation of trademark oblig ations under Article 16 of the TRIPS Agreement was 
justified because the regulation imposed only very  narrow exceptions to trademark rights. The 
significant expansion of these exceptions in the new re gulation was, therefore, a matter of concern to 
the United States.  WT/DSB/M/210 
 Page 7 
 
 
  27. Second, it appeared that the 1 January 1996 date in the new Article 14(2) was intended to 
correspond to Article 24.5 of the TRIPS Agreement.  Article 24.5 required, inter alia , that GI 
measures not prejudice the use of trademarks acquiri ng rights before the date of application of the 
TRIPS Agreement in the WTO Member concerned.  While 1 January 1996, might be the appropriate 
date for the EC itself, several EC member States had TRIPS application dates later than 
1 January 1996.  Lithuani a had, for example, only acceded to the WTO on 31 May 2001.  For these 
EC member States, Article 24.5 applied to trademar ks acquiring rights before the date of application 
of the TRIPS Agreement as to the EC member States concerned, which was after 1 January 1996.  The new GI regulation ignored that.  In any case, the EC should recall the DSB's finding that Article 24.5 of the TRIPS Agreement did not provide any authority to limit trademark rights, and that 
any exceptions to trademark rights must fit with in the narrow bounds of Article 17 of the TRIPS 
Agreement.  The United States hoped that the EC  would take these comments into account in 
considering further amendments to its GI regula tion and in applying this regulation.  The United 
States would continue to examine the regulation and how it was applied. 
28. The representative of Australia
 said that her country welcomed the actions taken by the EC in 
response to the recommendations and rulings of the DSB in this dispute.  Australia appreciated the 
EC's willingness to consider the concerns expr essed by Australia about the new regulation as 
originally proposed, and noted that the regulation as adopted by the EU Council included a number of 
amendments to overcome those concerns.  However,  Australia too was concerned that the protection 
of prior trademark rights provided by Article 14( 2) of the new regulation might be limited to 
trademark rights acquired before 1 January 1996.  Australia endorsed the points made by the United 
States on this issue.  Limiting the protection of prior trademark rights to those acquired before 
1 January 1996 undermined the basis of the Panel's fi ndings that the breach of the EC's obligations in 
respect of trademark rights was justified under Article 17 of the TRIPS Agreement.  
29. In addition, Australia noted that Article  14(2) of the new regulation established 
1 January 1996 as the cut-off date for the protecti on of prior trademark rights throughout the existing 
territory of the EC.  However, many current EC member  States were not part of the territory of the EC 
as of 1 January 1996, even if they were WTO Memb ers.  Two questions immediately arose.  First, 
was a retrospective limitation on trademark rights in respect of those EC member States which were not part of the EC's territory as at 1 January 1996 consistent with the EC's rights and obligations under 
the TRIPS Agreement?  Second, was a retrospective limitation on trademark rights in respect of those 
EC member State which were not part of the EC's territory as at 1 January 1996 justifiable as a limited 
exception to trademark rights under Article 17 of th e TRIPS Agreement?  In Australia's view, the 
answer to both of these questions was no.  Australi a trusted that this aspect of the new regulation 
would be corrected.  Finally, Australia assumed that  the EC would exercise the significant level of 
decision making discretion provided by the new regula tion in a manner fully consistent with the EC's 
WTO obligations, in particular those obligations re lating to national treatment and the rights required 
to be granted to trademark owners. 
30. The representative of the European Communities
 said that Article 14(2) of the Regulation was 
not intended to, and did not legally alter the re lationship between trademarks and geographical 
indications to the detriment of trademarks as comp ared to the situation which had prevailed under the 
previous EC Regulation (Regulati on 2081/92), and which the Panel ha d found to be compatible with 
the TRIPS Agreement in this dispute.  The EC had already provided a number of clarifications 
bilaterally to interested Members on this issue,  but stood ready to continue bilateral contacts and 
provide any further clarifications that might be needed.  With regard to the concerns on other aspects of the EC Regulation raised by the United States an d Australia, he would refer to the clarifications 
provided by the EC in the DSB meeting held on 17 February 2006.  The EC had also already provided 
a number of clarifications bilaterally to interest ed Members. The EC was confident that the new  WT/DSB/M/210 
Page 8  
 
regulation fully complied with its WTO obligations, but naturally stood ready to continue bilateral 
contacts and provide any further clarificati ons that might be needed on this matter. 
31. The DSB took note
 of the statements. 
(e) United States – Measures affecting the cross-bor der supply of gambling and betting services:  
Status report by the United States (WT/DS285/15/Add.1) 
32. The Chairman  drew attention to document WT/DS285/ 15/Add.1, 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 measures affecting the cross-border supply of gambling and betting services. 
33. The representative of the United States  said that compliance with the recommendations and 
rulings of the DSB in this dispute related exclusiv ely to the sole point of whether the United States 
was now able to show that releva nt US laws did not discriminate ag ainst foreign suppliers of remote 
gambling on horse racing.  US laws did not discriminate, and the United States could show this.  As noted in the status report that the United States ha d submitted on 5 April 2006, the US Department of 
Justice had stated the position of the US Governme nt regarding remote gambling on horse racing in 
testimony before a subcommittee of the US House of  Representatives.  The Department of Justice had 
explained that:  "The Department of Justice views the existing criminal statutes as prohibiting the 
interstate transmission of bets or wagers, in cluding wagers on horse races.  The Department is 
currently undertaking a civil investigation relating to a potential violation of law regarding this 
activity.  We have previously stated that we do not believe that the Interstate Horse Racing Act, 
15 U.S.C. §§ 3001-3007, amended the existing criminal statutes."   
34. In view of these circumstances, the Un ited States was in compliance with the 
recommendations and rulings of the DSB in this dispute.  The United States was aware from public 
statements that Antigua and Barbuda had a different  understanding of the findi ngs and conclusions of 
the DSB in this dispute.  The United States believe d that that understanding was incorrect, and that 
Antigua's misreading of the results of this dis pute had fostered misperceptions concerning their 
implications.  To set the record straight, he said that it might be helpful to recall certain key points 
about the actual results of this dispute.  First, this  was an issue of public morals and public order.  The 
findings and conclusions in this dispute included an express finding that the measures at issue "are 
'measures ... necessary to protect public morals or  to maintain public order'" under the exception 
provided for in Article XIV(a) of the GATS.  Seco nd, the Appellate Body had made it clear that the 
sole outstanding issue under Article XIV related to ho rse racing.  Under the chapeau of Article XIV, 
the Appellate Body had concluded that "the only inconsistency that  the Panel could have found with 
the requirements of the chapeau stems from the fact that the United States did not demonstrate that the 
prohibition embodied in the measures at issue app lies to both foreign and domestic suppliers of 
remote gambling services, notwithstanding the [Interstate Horseracing Act]...".
1  The findings and 
conclusions adopted by the DSB reflected this, stat ing that the United States had not "shown, in the 
light of the Interstate Horseracing Act" the non-discr iminatory application of the relevant measures.  
Notwithstanding any assertions to the contrary, this question concerning horse racing is the only issue.  
Third, the Appellate Body had expressly clarified th at "the Panel did not, and we do not, make a 
finding as to whether the IHA does, in fact, perm it domestic suppliers to provide certain remote 
betting services that would otherwise be prohibited by  the Wire Act, the Travel Act, and/or the 
[Illegal Gambling Business Act]." 
35. Against this background, the considerations rele vant to compliance in this dispute were clear 
and straightforward.  The issue under Article XIV – the "only" issue, according to the Appellate Body 
– was the treatment of horseracing.  As noted in the US report and its statement made at the present 
                                                      
1 Appellate Body Report: "United States – Measures Affecting the Cross-Border Supply of Gambling 
and Betting Services", WT/DS285/AB/R, para. 371.  WT/DSB/M/210 
 Page 9 
 
 
  meeting, the US chief law enforcem ent agency, the US Department of Justice, had explained that US 
criminal statutes prohibited the interstate transmi ssion of bets or wagers, including wagers on horse 
races;  that it was currently undertaking a civil i nvestigation relating to a potential violation of law 
regarding this activity; and that it did not believe  that the Interstate Horse Racing Act had amended 
relevant criminal statutes.  The United States hoped that this explanation put to rest any lingering 
misperceptions of the rulings and recommendations that  the DSB had in fact adopted in this dispute. 
36. The representative of Antigua and Barbuda   said that his delegation thanked the United States 
for that recollection of the history of the rulings of  the DSB, which it found somewhat selective.  To 
no one's surprise, his country disagreed with th at interpretation and was disappointed with the 
statement made by the United States at the present m eeting.  His country found it rather incredible 
that the United States would take the position that  in essence it had been in compliance with the 
rulings and recommendations of the DSB in this matte r all along.  This was particularly ironic given 
the statement made by the United States in its submission that had been made in the summer of 2005 to the arbitrator appointed to establish the reasona ble period of time for compliance that "In this 
dispute, both the legal form of implementation a nd the technical complexity of the contemplated 
measures requires a reasonable period of time of no less than 15 months".  In that same submission 
the United States had further stated that it woul d be seeking to come into compliance through 
legislation and that such legislation would be "technically complex".  Although his country had 
argued before the arbitrator that the United Stat es could go a long way toward compliance by simple 
and prompt action by the executive branch of governme nt, the United States had insisted that it would 
have to follow the legislative process in order to  become compliant.  The arbitrator's award of 
11 months and two weeks was clearly dependent up on that position of the United States.  For the 
United States to have taken that position with not only Antigua and Barbuda but with the WTO 
arbitrator, to buy itself an additional period of almost a year and then to state in effect that it had been 
compliant all along, not only reflected poorly on the United States and its good offices, but also put into question the efficacy of the dispute resolution process.   
37. Clearly then, it would seem to his country that the United States believed that the Panel and 
the Appellate Body in this dispute had simply gotte n the matter wrong by concluding that the United 
States had not met its burden of proof with respect to the chapeau of Article 14 of the GATS, and that the United States was going to use Article 21.5 proceedings to reassert its case and "meet its burden of proof " in the second go-round.  The position of the US Department of Justice that the USTR had used 
now to assert its "compliance" was in fact no diffe rent to the position which had been raised during 
the course of the proceedings and found unpersuasi ve by both the Panel and the Appellate Body.  
How a Member could take a position already adjudi cated in the dispute and assert that exact same 
position as a basis for coming into compliance wi th the DSB's recommendations and rulings was 
beyond his delegation's comprehension.   
38. If this matter were to go to a compliance pane l under Article 21.5 of the DSU, it would be, his 
country believed, the first instance in which a Member had gone before a compliance panel on the 
basis of having done nothing at all to bring itself into compliance with the DSB's rulings and recommendations.  This was deeply troubling, not only  to his country, but for the health of the dispute 
resolution system.  What it meant to his country was that the United States might indeed have bought itself yet another year during which it could asser t its offending measures against Antiguan industry 
with seeming impunity, while its "compliance" w ound its way through the Article 21.5 procedure and 
it would have bought this extra year – extra two year s really – taking into account its dissembling with 
respect to the reasonable period of time, and having done nothing at all to come into compliance.   
39. If this was a flaw in the system, it should be fixed.  Members should not be allowed to take 
the rules to illogical extremes to subvert the pr ocess. The need for urgency in the resolution of 
disputes, was explicitly written throughout the DSU.  It was clear that the objective was expediency 
and even more so, when impairment effected a de veloping country such as Antigua and Barbuda.  It WT/DSB/M/210 
Page 10  
 
was difficult to understand why an overt objective of fair and fast resolution of trade disputes should 
be subject to substantial dilution by recourse to  legalistic and formulaic approaches to what the 
written word of the rules might be stretched to perm it.  While his country was not certain where this 
dispute was headed from here, it was certain of its commitment to seeing this process through to the 
end, whenever and however long it might take. 
40. The DSB took note
 of the statements. 
(f) European Communities – Countervailing measur es on dynamic random access memory chips 
from Korea:  Status report by the European Communities (WT/DS299/8) 
41. The Chairman  drew attention to document WT/DS299/ 8 which contained the status report by 
the European Communities on progress in the impl ementation of the DSB's recommendations in the 
case concerning the EC countervailing measures on  dynamic random access memory chips from 
Korea. 
42. The representative of th e European Communities  said that on 10 April 2006, the EC had 
submitted a status report on its progress in th e implementation of the DSB's rulings and 
recommendations in the dispute under consideration, in  accordance with Article 21.6 of the DSU.  At 
that time, the Council of the European Uni on had just adopted the Commission's proposal 
implementing the DSB's rulings and recommendati ons by way of amending the Council Regulation 
which had imposed a countervailing duty on DRAMS or iginating in Korea. In the meantime, the 
implementing regulation had been published on 12 Ap ril and had entered into force on 13 April 2006.  
The official reference of this regulation was C ouncil Regulation (EC) No 584/2006 of 10 April 2006 
published in the Official Journal of the European Union No L 103 of 12 April 2006 and the document 
was now available in WT/DS299/9.  With the public ation and entry into force of Council Regulation 
(EC) No 584/2006, the EC had fully implemented the DSB's rulings and recommendations in this 
dispute. 
43. The representative of Korea  said that his country welcomed the statement made by the EC to 
the effect that it had undertaken a re-examinati on of the aspects of its administrative countervailing 
duty determination that had been found inconsis tent with the EC's obligations under the SCM 
Agreement by the Panel examining this case.  Howe ver, in Korea's view, th e EC's re-examination had 
failed to comply with its WTO obligations.  Korea w ould not go into each and every error in the EC's 
implementation.  That would come if Korea were  to decide to request the establishment of a 
compliance panel under Article 21.5 of the DSU.  First,  on the issue of subsidies, the EC had retained 
the methodology used in the original investigation.   In particular, the EC had used the allocation 
method in Article 7(3) of the Basic Anti-Subsid y Regulation, according to which the amount of 
subsidy must be allocated over a five-year period.  The five-year allocation period selected by the EC 
Institutions ran from 2001 to 2005, inclusive.  As a result, as of 1 January 2006, all the financial 
measures countervailed by the EC Institutions were fully amortized and, thus, ceased to confer any 
benefit to Hynix.  Therefore, the EC should, in f act, have repealed the countervailing duty on Hynix  
DRAMS as from 1 January 2006.  This conclusion was in line with the approach taken by the EC in 
the framework of the dispute "US – Countervailing Measures Concerning Certain Products from the 
EC" (WT/DS212/RW).  
44. Regarding the methodology for calculating the amount of the benefit conferred by the 
financial contributions, the Panel had found that the EC had made a fundamental error in considering 
a loan, loan guarantee and debt-to-equity swap to be the equivalent of a grant.  In its re-examination, 
the EC had basically reaffirmed its grant methodol ogy on the grounds that an alternative methodology 
would result in a higher benefit calculation.   Although the Panel had acknowledged the " considerable 
leeway " afforded to investigating authorities in adopting a reasonable methodology, it had not 
admitted that a reasonable methodology could result in  a finding of the same level of benefit as those 
calculated by the Commission's grant methodology.  The EC had ignored the explicit findings of the  WT/DSB/M/210 
 Page 11 
 
 
  Panel that any reasonable calculation must result in a finding of a benefit that was lower than that 
based on the EC's original calculation. 
45. The EC was able to arrive at this incongruous result by, among other things, comparing long-
term instruments with short-term ones and collatera lized instruments with non-collateralized ones, all 
without proper adjustments.  The term and collaterali zation of debt were key issues, particularly when 
dealing with companies in distress, and should have been properly accounted for.  Another major error of the EC in its benefit analysis was that it created a new category of entities which did not exist 
under the SCM Agreement.  Article 1 of the SCM Ag reement provided for rules on subsidization that 
required a finding of government action, action by a public body or actions by private bodies that 
were entrusted or directed by the government.  There were only these three categories.  If a private 
body had not been entrusted or directed, then it must be presumed that it had acted in its own 
commercial interests.   
46. However, the EC created a fourth category of entities – private bodies which had not been 
entrusted or directed to act, but which the EC had found inconvenient as benchmarks because their 
actions did not fit the Commission's pre-conceive d notions.  Because of alleged, but unproved, 
governmental pressure, these commercial actors had not  been recognized as benchmarks with no legal 
or factual justification.  Furthermore, the Commission had determined, in effect, that all extinguishment of debt in the case of bankruptcy or insolvency was a benefit.  However, not only was this finding by the Commission contrary to WTO jurisp rudence, it was inconsistent with the EC's own 
internal rules.  The Commission had not considered  debt extinguishment in this manner when it had 
done an internal state aids finding.  
47. With regard to the October 2001 debt-to-equity  swap, the EC had concluded that "there was  
no real quantifiable cost to Hynix of issuing the ne w shares."  However, the Panel had stated that 
shares did represent a surrender of ownership in th e company and the ability of the shareholder to 
effect action by the company commensurate with th e shareholder's level of ownership.  In other 
words, they represented an obligation of the compan y and the market values that obligation in the 
form of the trading price for such  shares in the market.  The only m eans for the company to terminate 
that obligation was through a repurchase of the shares  issued.  Thus, the debt-to-equity swap could be 
regarded as a measure of benefit only when any premium paid by the participating banks were 
determined over the market price for Hynix equity , in other words, the difference between the swap 
price and the market price at the time the swap occu rred.  Instead of taking this approach, the EC had 
incorrectly treated the debt-to-equi ty swap as a forgiveness of debt.  
48. The EC should also have taken this opportuni ty to correct certain calculation errors not 
addressed by the Panel on the basis of judicial economy and in light of other errors in the EC's benefit 
analysis.  In particular, the Commission had yet to  correct its calculation of the amount of extended 
maturities associated with the October 2001 restructur ing.  With respect to injury, the EC had also 
simply ignored the Panel's findings.  According to th e Panel, the EC's original analysis had failed to 
assess the importance of the economic downturn th at existed in the DRAM market during the 
investigation period.  In its re-examination, the EC had stated that there was no actual decline in 
demand during the investigation period.  That statemen t was inconsistent with the explicit findings of 
the Panel because the underlying demand for DRAM S was different from the apparent domestic 
consumption of DRAMS.  Moreover, the EC had stat ed that the data did not support the conclusion 
that there was a correlation between a decline in the demand growth rates a nd the decrease in DRAM 
prices.  However, this conclusion was based  on an incorrect comparison, whereas a proper 
comparison demonstrated that, in fact, there was a strong link between demand growth and the sales 
prices. 
49. 
On the issue of overcapacity, the EC had concluded that, since Hynix was virtually bankrupt 
during the investigation period and remained af loat only through the subsidies provided by the WT/DSB/M/210 
Page 12  
 
Government of Korea, worldwide overcapacity had artificially been maintained through the 
subsidization of Hynix.  However, this conclusion was incorrect, since it was generally the case that 
insolvent companies were not shut down, but rath er their business was bought either through an asset 
sale or as a going concern, and their capacity returned to production.   
50. As for wages, the EC had not even examined th e issue under the correct legal standard.  It had 
examined wages as if it were a cau sal issue under Article 15.5 when the proper analysis was as an 
indicator of injury under Article 15.4.  The EC stated that wages moved normally during the period 
and could not have been a causal factor in the alleged decline in the state of the EC industry.  But that 
was not the issue.  Rather, the stable behaviour of  wages was actually an indication that the industry 
was not suffering material injury.  In light of the foregoing, Korea did not consider that the Commission's re-examination was a proper implementation of the DSB's rulings and recommendations in WT/DS299.  Korea reserved all of its rights in this dispute and would continue to 
further consider its options.  
51. The representative of the European Communities
 said that the DSB's rulings and 
recommendations had clearly not imposed any obligati on to repeal the countervailing duty, but only to 
re-visit some aspects of the EC's investigation in lig ht of the Panel's findings.  The EC had done this 
scrupulously and had thus brought its  countervailing measure into conformity with the WTO rules.  
As to the very detailed concerns just expressed by Korea, the EC did not consider that a DSB meeting 
was the appropriate forum to enter into a detailed and technical discussion.  Of course, the EC stood 
ready to pursue a dialogue with Korea and would respond to any further concerns that Korea might 
have. 
52. The DSB took note  of the statements. 
2. Mexico – Tax measures on soft drinks and other beverages 
(a) Implementation of the recommendations of the DSB 
53. The Chairman   recalled that in accordance with the DSU provisions, the DSB was required to 
keep under surveillance the implementation of reco mmendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of 
the DSU provided that the Member concerned shall in form the DSB, within 30 days after the date of 
adoption of the panel or Appellate Body Report, of its intentions in respect of implementation of the 
recommendations and rulings of the DSB.  He also  recalled that at its meeting on 24 March 2006, the 
DSB had adopted the Appellate Body Report in the case:  "Mexico – Tax Measures on Soft Drinks and Other Beverages" and the Panel Report on the sa me matter, as modified by the Appellate Body 
Report.  He then invited Mexico to inform the DSB of its intentions in respect of implementation of 
the recommendations. 
54. The representative of Mexico
 said that his country would comply with the DSB's  
recommendations and rulings in the dispute under consid eration.  To that end, a draft law removing 
the tax measure at issue in this dispute would  be submitted to the Mexican Congress.  The Executive 
intended to have the Congress examine the draft la w as soon as possible.  However, this would 
depend on the amount of time the Congress could set asi de within its legislative agenda, given that the 
current session was coming to an end and Congress would be in recess until 1 September when the 
new legislature were to begin.  Once the nece ssary reforms had been approved, the Congress would 
send them to the Executive for enactment and publica tion.  Given that the first session of the new 
Congress would end on 31 December 2006, the modifi cations should enter into force no later than 
January 2007.  This was the reasonable period of time proposed by Mexico.  The dispute in question 
had resulted from a disagreement between Mexico an d the United States within  the framework of the 
North American Free Trade Agreement which, unfor tunately, remained unresolved, despite more than  WT/DSB/M/210 
 Page 13 
 
 
  eight years of efforts on Mexico's part.  Mexico re iterated its respect for international rules and hoped 
that other Members of the WTO would do the same. 
55. The representative of the United States  said that his country thanked Mexico for its statement 
that it intended to implement the DSB's recommenda tions and rulings in this dispute.  The United 
States was pleased that Mexico had indicated that it  planed to do so by repealing its discriminatory 
beverage tax.  The United States was prepared to di scuss with Mexico a reasonable period of time for 
its implementation.  The United States could not comment at the present meeting on the specific proposal that Mexico had made for a reasonable pe riod of time, but it looked forward to discussing 
the reasonable period of time with Mexico. 
56. The DSB took note
 of the statements, and of the information provided by Mexico regarding 
its intentions in respect of implementation of the DSB's recommendations. 
3. Implementation by the European Communiti es of the recommendations and rulings of 
the DSB in relation to "European Communiti es – Regime for the Importation, Sale and 
Distribution of Bananas"2 and related subsequent WTO proceedings 
(a) Statements by Honduras, Nicaragua and Panama 
57. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Honduras, Nicaragua and Panama.  He then invite d the representatives of the respective countries to 
speak. 
58. The representative of Honduras  said that in order to conclude their coordination efforts prior 
to taking an action under Article 21 of the DSU,  Honduras and other affected Members had asked, 
once again, for the inclusion of this item on the ag enda of the present DSB m eeting.  In previous 
statements made before the DSB, Honduras had al ready described the new EC regime, which was 
discriminatory and restrictive, and had explained wh y that regime constituted an implementation issue 
covered by Article 21 of the DSU.  Therefore, he would not repeat those details at the present 
meeting.  He only wished to revert to the issue of  important trading interests which had been put at 
risk by these new and WTO-inconsistent measures applied by the EC, and to explain why it had 
become imperative for Honduras to seek legal remedies.  In Honduras and other Latin American 
countries, the banana sector accounted for a large proportion of its national revenues, agricultural 
incomes and unskilled workforces.  Bananas played a particularly important role in sustaining the 
large number of rural poor.  Some 51 per cent of Honduras' rural population lived below the World Bank's poverty indicators.  A significant proportion of them depended on bananas for survival.  If 
Honduras were to lose its bananas exports to th e EC – which had been plummeting since January 
2006 – its rural poor would be the hardest hit.  If th e EC was allowed to main tain that regime, the 
harm he referred to would be i rreparable not only for the people of Honduras, but for the region as a 
whole.  Economists forecasted that  total earnings from Latin Ameri can banana exports would fall by 
US$ 570 million, that the reduction in national re venue would amount to US$ 500 million and that 
employment would decline by some 125,000 jobs. In order to prevent such destabilising losses, 
Honduras had no alternative but to seek the remedies provided for in the DSU, and was holding 
consultations with other Members in order to de fine a common approach.  Once these consultations 
had been concluded, Honduras would seek the assist ance of the DSB to reach an early solution. 
59. The representative of Panama
 said that between the previous DSB meeting and the present 
one, Panama had held consultations  with the EC regarding its wit hdrawn banana tariff binding and 
new more-than-doubled "autonomous" tariff rate.  Wh ile Panama appreciated the EC's willingness to 
consult, it was disappointed that the EC continued to  insist that its more-than-doubled tariff was "trade 
                                                      
2 WT/DS27. WT/DSB/M/210 
Page 14  
 
neutral".  Panama was equally disappointed to hear  the EC say that it had no obligation:  (i) to advise 
Panama when, and at what level, the MFN rate w ould be bound;  (ii) to compensate MFN suppliers 
under the GATT provisions;  or (iii) to adjust its current terms of access in any respect.  The EC's 
position, as Panama understood, was that it would do not hing on this matter for the foreseeable future 
other than share import data with the supplying countries, but would cease even this step if legal 
recourse were to be taken.  Pana ma could not see how the EC's pos ition could be reconciled with the 
EC statement made at the previous DSB meeting that it "remains ready to address" Panama's concerns or with the EC's obligation under Article 21 of the DSU to comply promptly with its obligations under 
the covered agreements and to pay attention to al l matters which had an impact on the interests of 
developing-country Members.  Panama, a principal banana supplier to the EC market, was already 
being harmed by this arrangement.  Panama did not have the luxury of waiting for its concerns to be 
examined by the EC at a later date.  Whatever means would be necessary, including under the DSU compliance procedures, a prompt solution must be found. 
60. The representative of Nicaragua
 said that at the 17 March DSB meeting, the EC had 
expressed regret that Nicaragua and other Members had "favoured the litigation route" rather than 
engaging in dialogue in "good faith".  That stat ement by the EC had not properly reflected his 
country's position. Throughout this dispute, Ni caragua had advocated pr oductive negotiations and 
continued to favour such an approach.  If the EC  were ready to negotiate a formula whereby access 
for its bananas would be improved at an early date , Nicaragua would be prepared to participate in 
good faith in such negotiations.  What Nicaragua ha d declined to do was to accept a process in which 
it was told that:  (i) for the time being Nicaragua  must accept that the new EC arrangement as a fait 
accompli ;  (ii) it must "give the new regime time";  (iii) there could be a rapprochement  in the future 
if Nicaragua first demonstrated with statistics to the EC's satisfaction that it had actually sustained 
injury;  and  (iv) must not seek legal remedies until the "dialogue" process has been exhausted.  A 
"dialogue" of this kind did not am ount to a negotiation.  It would appear, on the contrary, to be a 
"pattern for containment", designed as a means of pu tting off legal claims and multilateral dispute.  In 
Nicaragua's view, a process based on delaying the r estitution of its rights could only mean that its 
developing economy would sustain further injury.  Accordingly, until the EC indicated that it was ready to negotiate reforms for access with immediate effect, Ni caragua was bound to pursue the 
coordination efforts it had been e ngaged in with other affected Me mbers regarding the most suitable 
legal remedies for securing fair a nd prompt relief for Nicaragua and other developing countries in the 
region. 
61. The representative of th e European Communities
 said that the EC had, once more, listened 
carefully to the statements made on this matter.  Ho wever, the EC must insist that it did not consider 
this to be the appropriate forum to discuss this matter, for two reasons.  First, the EC remained 
engaged in discussions with all in terested banana MFN suppliers.  The issues being raised at the 
present meeting had already been discussed at lengt h with Honduras, Nicaragua and Panama in the 
DS consultations held on 19 January on their requ est.  The EC was ready to engage in further 
discussions with the complainants in that context, if  necessary.  In addition, the EC had agreed to put 
its new tariff to the test of the market and to c ontinue discussions with all interested MFN suppliers 
with the assistance of Minister Støre (Norway) and on the basis of the information drawn from the 
monitoring of the impact of the new MFN tariff.  A third meeting had taken place recently and the 
process was well underway.  The EC regretted that Honduras, Nicaragua and Panama had so far opted 
for the litigation "route" rather than dialogue.  Sec ond, the EC disagreed with the categorization of 
this matter as an "implementation issue" relevant to  Article 21 of the DSU.  The EC had already made 
its objection clear on several occasions, both befo re the DSB and in the context of the WTO 
consultations held on 19 January 2006.  The EC had  already elaborated on the grounds for this 
objection.  This being said, the EC remained read y to address the issues raised at the present meeting 
and any other issues related to the new EC banan as import regime in the appropriate foras.   
62. Discussions had to be based on market realities.   The EC was confident that the new MFN 
tariff maintained total market access for MFN banana  suppliers. Nevertheless, the EC had agreed to  WT/DSB/M/210 
 Page 15 
 
 
  monitor the impact of this tariff so as to ensure that market a ccess for MFN suppliers was by no 
means impaired and to hold regular discussions w ith MFN suppliers on this monitoring process.  The 
countries participating in this dialogue had agreed with Norway, which had offered its "good offices", 
on a framework for this process.  The EC was read y to consider reviewing the tariff if, once the 
monitoring process provided reliable data for a repr esentative period (one year), those data would 
show that the new MFN tariff failed to maintain  market access for MFN suppliers.  The EC had not 
proceeded with the rebinding in order to verify the real impact of the new MFN tariff in the market. 
Therefore, the EC would  need to  let the market monitoring process work before taking any decision 
on the tariff to be subject to rebinding. 
63. The representative of the United States  said that since the EC had implemented its new 
bananas regime on 1 January 2006, a number of Me mbers – including the United States – had voiced 
serious concerns about the regime.  However, th e EC had not, as yet, addressed those concerns.  
Instead, the EC had taken the further step of "sus pending" the request it had made for a waiver from 
GATT Article XIII – even though the EC continued to keep in place a special, preferential tariff-rate 
quota which it allocated to some Members, but not to others.  The United States was disappointed by 
the EC's response to the concerns raised and was continuing its discussions with interested Members 
about this matter.  The United States reiterated that  this was a matter of great importance to many 
Members.  It was imperative that the EC work w ith such interested Members to reach a mutually 
satisfactory resolution of the dispute as expeditiously as possible. 
64.  The DSB took note  of the statements. 
4. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by Canada, the European Communities and Japan 
65. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Canada, the European Communities and Japan and invited the respective representatives to speak. 
66. The representative of the European Communities  recalled that at the previous DSB meeting, 
the United States had reasserted that it had taken all actions necessary to implement the DSB's 
recommendations and rulings in this  dispute.  And for that reason the United States could not see the 
purpose of submitting status reports repeating the progress it had made.  The EC recalled that the 
Continued Dumping and Subsidy Offset Act had been  found in breach of WTO rules for transferring 
the collected anti-dumping and countervailing duties to  the US competitors.  The EC further recalled 
that these transfers would continue for a number of years since the Deficit Reduction Act repealing 
the CDSOA provided that duties collected on impor ts made before 1 October 2007 would still be 
transferred.  Finally, the EC recalled that the B udget of the US Government for the Fiscal Year 2007 
forecasted that US$249 million would be distri buted in October 2006 and US$1.93 billion in 
October 2007.  
67. The EC had asked the United States to explain how a repeal which maintained the obligation 
to transfer the anti-dumping and countervailing duties for a number of years and which would already 
lead to disbursements of more than US$2 billion in the two coming years, fully implemented an 
obligation to stop those transfers.  The fact was that as long as tho se transfers continued, the United 
States would be in breach of Article 18.1 of th e Anti-Dumping Agreement and Article 32.1 of the 
SCM Agreement and further action would be needed  to bring the United States into full compliance 
with its WTO obligations.  He noted that there had never been any ambiguity in the EC message.  The 
EC had welcomed the adoption of the Deficit Reduc tion Act of 2005 as an important step in the right 
direction, but had also made clear that the issue of implementation had not yet been resolved.  Thus, 
already at the 17 February DSB meeting, the EC had stressed that the US WTO breaches would WT/DSB/M/210 
Page 16  
 
persist for a number of years and had called on the United States to continue submitting status reports 
on implementation.  The EC regretted that the Unite d States had simply failed to respond to the EC's 
and other Members' calls and to its clear obligation under Article 21.6 of the DSU.  In the absence of 
a status report, the EC wished to ask again the Un ited States if and what steps it intended to take to 
stop the transfer of anti-dumping and countervailing duties without further delay.  The EC also 
renewed its call on the United States to subm it implementation reports in this dispute. 
68. The representative of Canada
 recalled that at the two prev ious DSB meetings, Canada had 
raised concerns regarding the refusal of the United St ates to submit status reports relating to the Byrd 
Amendment.  The United States had claimed that it ha d "taken the actions necessary to implement the 
rulings and recommendations" in this dispute by prospectively repealing the Byrd Amendment.  
Canada reiterated that it welcomed the adoption of the prospective repeal of the Byrd Amendment, 
but noted, once again, that this latest move had not brought the United States into compliance with its 
WTO obligations.  Until such time as disburse ments under the Byrd Amendment had ceased, the 
United States would remain in violation of its commitments under the WTO Agreement.  As Canada 
had stated in the past, this so-called method of re peal not only raised commercial concerns, but also 
had serious systemic implications for the effectiven ess of the dispute settlement mechanism.  In the 
light of the above, Canada and ot her WTO Members had urged, and c ontinued to urge, that the United 
States resume submitting status reports on its efforts to fully implement the rulings in this dispute 
now, rather than at some indeterminate point in the future.  
69. The representative of Japan  said that his country was disappointed that the United States 
again had not submitted a status report to the DSB in the month of April.  While Japan welcomed the 
enactment of the Deficit Reduction Act of 2005 as a si gnificant step forward, it was of the view that 
the United States still failed to fully implement the DSB's recommendations and rulings because of 
the transitional clause, which stipulated that the duties collected on imports entered prior to 
1 October 2007 would continue to be disbursed.  The distribution under the CDSOA was in any form 
illegal.  As long as the distribution continued, it co uld not be said that the implementation had been 
fully completed.  Japan would like to continue to  ask that the United States provide a sufficient 
explanation of the reason as to why it had consider ed that the implementation had been completed.  
Japan also requested information on how actual disbursements would work under the transitional 
clause.  It was regrettable that no explanation ha d been offered by the United States.  Until the 
termination of the illegal disbursement under CDSO A, Japan reserved all its rights under the DSU. 
70. The representative of Chile  said that there was no doubt that  the Byrd Amendment remained a 
matter of concern to his country.  In his country's  view, the United States had failed to comply with 
the DSB's recommendations in this dispute because it continued to defer implementation.  Chile was 
concerned for two reasons.  First, this situation je opardized the proper and natural functioning of the 
dispute settlement system by greatly undermining its  credibility.  Second, it continued to strain and 
distort one of the key commitments under the Agre ement, namely "prompt compliance" with the 
DSB's recommendations in order to ensure the effec tive resolution of a trade dispute.  It was common 
knowledge that the United States had already had a r easonable period of time in which to comply, that 
it had failed to do so, and that it had even exceeded  that period by over two years.  Compliance had, 
therefore, been very far from what could be consid ered "prompt", as provided for by the DSU rules.  
WTO case law3 was very clear on the issue:  "prompt" was to be understood as meaning "immediate" 
and, where this was impossible, "within a reasonabl e period of time".  Under no circumstances, would 
two years or more be either immediate or a reasonabl e period of time.  Chile  sincerely hoped that this 
situation did not constitute a precedent within the WTO or the DSB and that WTO Members endeavoured to respect the principles and objectives of the multilateral dispute settlement mechanism. 
                                                     
 
3 See the Award of the Arbitrator under Article 21.3(c) of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes:  "United States – Continued Dumping and Subsidy Offset Act of 2000", 
WT/DS217/14, WT/DS234/22, para. 40. 
  WT/DSB/M/210 
 Page 17 
 
 
  71. The representative of Brazil  said that his country thanked Canada, the EC and Japan for 
bringing again this matter to the attention of the DS B.  Both as a complainant in this dispute and a 
WTO Member, Brazil would have preferred that it w as not necessary to continue with this item as a 
result of full implementation of the DSB's recommenda tions.  However, given the prospective nature 
of the repeal of the Byrd Amendment, Brazil consid ered that the issue had not  been resolved within 
the meaning of Article 21.6 of the DSU.  As a consequence, the United States should resume the 
submission of status reports on the implemen tation of those recommendations.  While Brazil 
recognized the importance of the steps taken by the United States with the adoption of the "Deficit Reduction Omnibus  Reconciliation Act", it remained to be convin ced that, by the sole adoption of this 
law, the United States had implemented the DSB's recommendations at issue.  Brazil would 
appreciate reasoned explanations by the United Stat es on this point, particularly on how the next 
disbursements under the Byrd Amendment coul d be accepted as acts of compliance with 
recommendations that clearly held that each and every such disbursement was WTO-inconsistent. 
72. The representative of Thailand
 said that his delegation wished to express its appreciation to 
the EC, Canada and Japan for raising this matter at the present meeting. Thailand joined previous 
speakers in expressing disappointment that the United States had not submitted a status report on its 
outstanding implementation in the case:  "US – Continued Dumping and Subsidy Offset Act of 
2000".  Thailand, therefore, affirmed its previous  views expressed during the 17 March DSB meeting, 
and urged the United States to continue providing st atus reports in DSB mee tings until it had brought 
its actions into full conformity with the DSB's ru lings and recommendations in this dispute, and until 
this matter had been fully resolved. 
73. The representative of Korea  said that his country shared the concerns raised by previous 
speakers on this issue.  As mentioned at the 17 March DSB meeting, Korea believed that the 
enactment of the Deficit Reduction Act of 2005, which contained provisions of repealing the 
Continued Dumping and Subsidy Offset Act of 2000, was a significant step towards resolving this 
dispute.  However, this dispute had yet to be resolved because the CDSOA disbursements continued 
by virtue of a transitional clause included in the repe aling provisions.  It meant that the United States 
still had an obligation to report on the status of im plementation to the DSB under the Article 21.6. of 
DSU.  Furthermore, more importantly, the United States should be reminded that the implementation 
had already been delayed for more than two years,  and this delay had been seriously affecting the 
interests of exporting Members.  Therefore, Ko rea wished to urge the United States to fully 
implement the rulings and recommendations of the DSB in this dispute without further delay by 
eliminating the CDSOA disbursements 
74. The representative of Hong Kong, China  said that her delegation wished to thank the EC, 
Canada and Japan for bringing this matter before the DSB.  Hong Kong, China appreciated the steps 
taken by the United States to implement the DS B's rulings and recommendations, but the fact 
remained that as of now, the DSB's rulings and recommendations had not yet been implemented.  
Hong Kong, China urged the United States to take st eps to stop the illegal payments immediately.  
Pending final repeal of the Byrd Amendment, it was important that this matter remained under 
Agenda Item I of the DSB meeting and that it be under the surveillance by th e DSB as well as that the 
United States continue to submit status reports on im plementation.  Her delega tion believed this was a 
matter of systemic importance and concern for al l Members, and that it should be of systemic 
importance and concern to the United States as well. 
75. The representative of India  said that his country wished to join other Members who had 
spoken at the present meeting in expressing disappoint ment on the United States choosing to not even 
provide a status report in the matter to this meeting,  despite the fact that it had not yet fully complied 
with its obligations based on the DSB's decision in th is dispute.  Duties collected on imports entering 
the United States continued to be subject to disbursements under the repealed CDSOA in 
contravention of these obligations.  India preferred full compliance by the United States to suspending WT/DSB/M/210 
Page 18  
 
concessions under the covered agreements to the Un ited States under the authority already obtained 
from the DSB.  Until the United States fully complied with its obligations, India continued to reserve 
all its rights under the DSU including the right to suspend concessions.  India urged the United States 
to inform the DSB of the steps it would take to ensure full compliance.  India also requested the 
United States to resume submitting st atus reports in this dispute.  
76. The representative of the United States
 said that with respect to Members' questions and 
comments about the US implementation in these dis putes, as the United States had already explained 
at the DSB meetings of 17 February and 17 Marc h 2006, the US President had signed the Deficit 
Reduction Act into law on 8 February 2006.  That Act included a provision repealing the Continued 
Dumping and Subsidy Offset Act of 2000.  Thus, the United States had taken all actions necessary to 
implement the recommendations and rulings in these disputes. With respect to Members' comments 
and requests about possible status reports by the Un ited States, as it had already been explained, the 
United States had taken all actions necessary to im plement the recommendations and rulings in these 
disputes.  The United States, therefore, failed to see what purpose would be served by the submission 
of status reports repeating the progress the Unite d States made in the implementation of the DSB's 
recommendations and rulings.  
77. The DSB took note  of the statements.  
5. United States – Countervailing measures co ncerning certain products from the 
European Communities 
(a) Statement by the European Communities 
78. The Chairman  said that this item was on the agenda of the present meeting at the request of 
the European Communities and he invited the repr esentative of the Europ ean Communities to speak. 
79. The representative of the European Communities  said that with the risk of becoming 
repetitive, the EC deplored, once more, the fact that  the United States had failed to submit a status 
report this time as well.  During previous DSB me etings the EC had expressed its disappointment over 
this fact but apparently to no avail.  There w as no doubt that this practice undermined the objectives 
of Article 21 of the DSU, namely to allow the DSB and the WTO Members to survey the 
implementation progress of the relevant DSB's ruli ngs and recommendations.  The EC recalled that 
the USTR had re-opened the Section 129 proceed ings in the DS212 case on 29 November 2005 and 
had given itself 180 days to complete the process.  EC firms and governments had already received, and replied to all questionnaires from the US authorities.  Having said that, the EC could not but express its concern over the multiplication of questi onnaires and requests for information related to 
issues about which there had never been any allega tions, such as the objective nature of external 
valuations in the British Steel privatisation.  Th is was a cause for concern as this practice resulted 
unjustifiably in the pr olongation of these proceedings and the keeping in place of these WTO-
incompatible measures. 
80. Further, as to the questions raised in previous  DSB meetings, the EC would be particularly 
interested in receiving precise clarifications and re plies concerning the estimated time-table regarding 
the issuance of preliminary findings from the De partment of Commerce as well as more detailed 
information on the expected dates for the issuance of final findings in these proceedings.  In addition, 
the EC expressed its hope that it would receive the preliminary findings soon and be given the chance 
to submit comments.  The EC trusted that the Unite d States would report on this exercise at each DSB 
meeting, and was confident that the US authoriti es would implement rapidly the 21.5 panel's findings 
by repealing these very old, unjustified and WTO- incompatible measures without further delays. 
81. The representative of the United States
 said that his delegation would convey to its capital the 
EC's comments and its questions about these Depa rtment of Commerce proceedings, including its  WT/DSB/M/210 
 Page 19 
 
 
  questions from previous DSB meetings.  Turning to  the EC's comments about US status reports, as 
had been noted at previous meeti ngs, he recalled that the United States had made a statement at the 
27 September 2005 DSB meeting, when the DSB had adopted the Article 21.5 Panel Report in this 
dispute, and that the United States had followed up on  that statement with a report to the DSB on the 
status of its implementation on 28 November.  In connection with the EC's request and the EC's 
comments, he recalled that the second sentence of Ar ticle 21.6 of the DSU provided that:  "the issue 
of implementation of the recommendations or rulings  may be raised at the DSB by any Member at 
any time following their adoption".  As it had been  stated at two previous DSB meetings and the 
United States was pleased to repeat again at the pr esent meeting, the United States would be happy to 
discuss with the EC on a bilateral basis their views on this issue.  This offer had been made twice 
before but had not been taken up by the EC. 
82. The DSB took note  of the statements.   
6. European Communities and certain member States – Measures affecting trade in large 
civil aircraft 
(a) Request by the United States for a decision of the DSB (WT/DS316/5) 
(b) Request for the establishment of a panel by the United States (WT/DS316/6) 
83. The Chairman  proposed that the two sub-items to whic h he had just referred be considered 
separately.  First, he drew attention to the communication from the United States contained in document WT/DS316/5, and invited the representative of the United States to speak. 
84. The representative of the United States
 said that the first sub-item concerned the request by 
his country for a decision of the DSB, which – as the Chairman had just mentioned – had been 
circulated to Members in document WT/DS316/5.  The US written request set out the reasons why the 
United States was seeking this decision.  He then  said that he wished to summarize what the United 
States was asking the DSB to do, and why.  By way of background, he recalled that on 20 July 2005, the DSB had established a panel to examine the US  claims regarding the subsidies that France, 
Germany, the United Kingdom, Spain, and the EC had provided and was continuing to provide to 
Airbus, the European manufacturer of large civ il aircraft.  That panel had been composed on 
17 October 2005.  Shortly thereafter, on 26 October 2005, the EC had filed a request for preliminary 
rulings that had raised various procedural objections with respect to the US panel request.  In addition, 
certain member States had committed additional new subsidies to Airbus.  Although none of the 
objections in the EC's preliminary ruling request  had merit, the United States had indicated its 
willingness to hold further consultations with the EC  in order to address those concerns, and thereby 
to simplify matters for the panel.  The United Stat es had also wished to consult on the new Airbus 
subsidies.  Accordingly, the United States had file d a further request for consultations regarding the 
EC and member State measures on 31 January 2006.  The United States and the EC had held those 
consultations on 23 March 2006.  On 10 April the Un ited States had filed a further request for the 
establishment of a panel, following up on those consultations.  
85. In view of the relationship that he had just  outlined between the US 2005 panel request and 
the request filed in the current month, the United St ates considered that the e fficient functioning of the 
dispute settlement system would be served if the matters contained in this  month's request were 
considered by the Panel established in July 2005.  The United States, therefore, had decided to ask the 
DSB to take a decision to that effect, the decision Members were now discussing.  As noted in the US 
request, the DSB had taken similar decisions in anal ogous situations.  For example, Article 9.1 of the 
DSU also reflected a policy, in certain circumstanc es, of having a single panel consider multiple panel 
requests related to the same matter whenever it was feasible to do so.  And, under Article 9.1, the WT/DSB/M/210 
Page 20  
 
DSB had in the past taken decisions to refer a subsequently submitted complaint to a previously 
established panel. 
86. While Article 9.1 of the DSU obviously did not a pply to the situation before the DSB at the 
present meeting, the United States believed that the DSB's experience with that Article provided 
useful guidance.  The United States had drawn upon that experience in structuring its request for a 
DSB decision.  The United States hoped that Members of the DSB would be able to agree to the US 
request, and thanked Members in advance for their s upport.  In this connection, the United States also 
recognized that the EC was facing similar procedur al issues in its dispute regarding alleged US 
subsidies for large civil aircraft, since the EC had established two separate pane ls relating to the same 
matter. The United States believed that the deci sion it was seeking at the present meeting in DS316 
would be an appropriate approach for addressing th e procedural issues in DS317 as well, and it would 
be prepared to support such a request by the EC. 
87. The representative of the European Communities
 said that the United States had put the most 
unusual request before the DSB. Essentially, the United States had requested that the terms of 
reference of the Panel as established on 20 July 2005 be modified as set out in documents 
WT/DS316/2 and WT/DS316/6.  The EC rejected the US request for a number of reasons.  The 
United States proposed to ex post  modify the terms of reference of  a Panel although the procedure was 
advanced. The EC noted that the Panel had already been composed; it had adopted Working Procedures (now suspended);  it had taken a number of procedural decisions
4;  an Annex V procedure 
had been carried out and the Report by the f acilitator had been submitted to the Panel on 
24 February 2006. 
88. Furthermore, despite considerable overlap, the terms of reference of the two Panels differed 
significantly. In essence, the second Panel was si gnificantly broader in scope. It incorporated 
numerous measures not covered by the first Panel re quest, either because they had not been properly 
consulted upon or not adequately identified (at least five gr oups of measures), or because they had 
been added only in the second Panel request (at leas t six groups of measures).  Moreover, the United 
States was seeking to add further legal claims in this new proceeding.  Most of the above measures 
had not been subject to the Annex V procedure in th is case.  Moreover, the Annex V procedure in the 
old case covered now outdated facts concerning markets and prices. 
89. The United States had proposed a merger of th e terms of reference in a way that would 
severely violate the EC's due process rights in a serious prejudice case.  If the United States had its way, it could arbitrarily pick and choose the measure  and the relevant market situation. The EC would 
never obtain clarity as to which claim and data it need ed to respond to.  Finally, but most importantly, 
there was no legal basis in the DSU for the DSB to  take a decision to merge two Panels in the 
circumstances as described above. Even if there were, it would require a positive consensus.  The 
United States had referred to Article 9.1 of the DSU and had invoked the US – Steel case precedent. 
However, Article 9.1 of the DSU concerned an entir ely different situation of multiple complaints by 
"more than one Member" regarding "t he same matter".  In such situations a "single Panel should be 
established".  Hence, Article 9.1 of the DSU envisag ed situations where multiple complaints by at 
least two WTO Members were brought relating to th e same matter.  Moreover, it was not mandatory; 
i.e. complainants did not have an automatic right to the merger.  Thus, in the US – Steel precedent 
referred to by the United States eight complainants had attacked one and the same measure.  The 
Panel had not been composed and no other procedural  steps had been taken in these cases before they 
had been merged.  Moreover, the United States as a de fendant had to give its agreement.  The United 
States itself admitted that there was no legal basis for its request.  It already anticipated that the DSB 
                                                     
 
4 Letter by the Chairman of the Panel concer ning timetable and Working Procedures dated 
9 November 2006;  Letter by the Chairman of the Panel concerning preliminary rulings dated 9 November 2006; 
Letter by the Chairman of the Pane l concerning the case name of 29 No vember 2006 concerning the case name; 
Communication by the Chairman of the Panel dated 1 March 2006 concerning suspension.  WT/DSB/M/210 
 Page 21 
 
 
  would refuse its requests and reserved its rights.  Fo r all the above reasons, the EC could not agree to 
this request by the United States.  
90. The representative of Brazil  said that his country noted th e request by the United States, 
contained in document WT/DS316/5, for the DSB to take a decision concerning the relationship 
between the panel to be established in light of  document WT/DS316/6 and the Panel established on 
20 July 2005 in the context of this dispute.  A lthough Brazil tended to agree with the US argument 
that, if taken, such a decision would be a means for a more efficient functioning of the dispute 
settlement system, it would appreciate clarifications from the United States about the following points: (i)  Why had the United States preferred to ask for this decision in lieu of activating the provisions of Article 7 of the DSU, which specifi cally addressed situations where a party to the 
dispute wished panel's terms of references othe r than the standard ones? (ii) What could the 
implications of this decision be for future cases where, as in Brazil – Aircraft  (DS 46) or Chile  – Price 
Bands (DS 207), changes relevant to the measure at issue had been put in place after consultations had 
been held, but before the panel was established, or where an amendment to the challenged measure 
was introduced while the panel was engaged in consid ering the said measure?  Brazil recalled that, in 
the two cited cases, the Appellate Body considered th at the panel had the authority to decide on the 
measure in dispute without any need for a second pane l and modification of the terms of reference.  If 
the DSB were to take the decision requested by th e United States at the present meeting the question 
would be if Members would be compelled or stimulated  to, in possible future situations similar to the 
ones just described by Brazil, ask the DSB to establis h an additional panel and, later on, to merge the 
two panels and revise thei r terms of reference. 
91. The representative of Canada
 said that the request of the United States was interesting and 
given that the EC had indicated that it was not going to  give its consent to the merger of the two, he 
wondered if any further intervention would be useful .  Canada noted that there were some systemic 
concerns about having different panel proceedings  in respect of overlapping measures and almost 
identical legal provisions.  While of course one expected that the Secretariat would provide 
appropriate advice to panels , one also hoped that panels would act  independently and in fact there was 
considerable danger that two different sets of pa nel proceedings on the basis of the same law and 
reviewing similar measures would end up with c ontradictory findings.  This would not be in 
anybody's interest. In similar circumstances in  the Panel on "Wheat Board" case, where the 
United States had also requested a different pane l with a different panel request, the parties had 
managed to agree to a single panel and the panel ha d managed to deal with the situation in its own 
way.  In the end, Canada found that that solution was satisfactory and in this respect, while in this 
particular instance, it seemed that the decision requested by the United States might not proceed.  
Canada certainly encouraged the EC and the United States to try to avoid a situation where one could 
have differing, perhaps contradictory panel findings  in respect of the same  measures under the same 
laws. 
92. The representative of the United States  said that his country thanked Brazil and Canada for 
their constructive interventions on this topic.  The United States appreciated their willingness to 
engage on the issues presented by this request for a decision.  The United States would refer to capital their comments and questions, and would be pleased to discuss these issues with them, and with any other Member, bilaterally or perhaps at a future DSB meeting.  With regard to the EC's comments, it 
was remarkable that the EC would assert that merger  at this point in the process was not possible.  
The United States and the EC had mutually agreed in  February 2006 to pause their respective disputes 
precisely in order to allow time to work out the pr ocedural issues that would arise from the existence 
of the first and second panel requests (some of wh ich the Canadian representative noted in his 
intervention).  As a consequence, the existing Pa nel had taken no steps other than to establish its 
working procedures.  The Panel had done nothing th at would be affected by a modification of its 
terms of reference.  It had not yet begun addr essing any of the parties' claims, and no written 
submissions had yet been filed, so merger was si mply a matter of adjusting the panel's terms of WT/DSB/M/210 
Page 22  
 
reference so that a single panel could address all of the US claims.  As the US request made clear, the 
merger would as a substantive matter be quite strai ghtforward.  The DSB would take the decision that 
the United States had requested.  The EC's approach, by contrast, would raise substantial issues, such 
as whether the panellists in the two disputes shoul d be the same, the possibility of two panels 
examining the same measures coming to divergent results (another issue the Canadian representative 
alluded to), issues in terms of compliance such as different reasonable periods of time and different 
recommendations and rulings, etc.  As the United States had previously noted, the DSB had in the past referred a new panel request to an existing pane l, pursuant to Article 9.1 of the DSU.  The United 
States would refer the EC and other Members, for example, to the Indonesia Autos dispute, which 
also involved subsidies and claims of serious prejudice, and to which the EC was a complaining party.  
There the terms of reference of the panel had been  amended to merge with a panel that had been 
established after the original panel had been composed.  In the interest of efficiency, this was the most 
logical approach.  The United States invited the EC  to reflect on the views expressed at the present 
meeting, and to reconsider its approach to this issue. 
93. The DSB took note
 of the statements. 
94. The Chairman  said that since the DSB was not able at  the present meeting to agree to the 
request by the United States contained in documen t WT/DS316/5, he would propose to take up sub-
item b under this agenda item.  He drew atten tion to the communication from the United States 
contained in document WT/DS316/6 and invited th e representative of the United States to speak. 
95. The representative of the United States  said that his country was disappointed that the EC had 
been unable to permit the DSB to take the deci sion the United States was seeking under the previous 
sub-item.  The United States did not propose to reite rate now its comments on the EC's position.  In 
any event, in light of the EC's decision to block referral of the matter in the US panel request to the 
existing panel in DS316, the United States was oblig ed to pursue establishment of a panel in the 
ordinary way.  Under the previous sub-item, the United States had also discussed in brief the reasons 
why it had brought this matter to dispute settlement, and it did not wish to repeat those reasons at this 
point either.  The United States requested that th e DSB establish a new panel with respect to the 
matter contained in the US panel request, pursuant to DSU Articles 6 and 7.  The United States further 
requested that the panel have the terms of refere nce provided for in Article 7.1 of the DSU.  
96. The representative of the European Communities  said that the EC took note of the US request 
for the establishment of a Panel in this dispute and ob jected to its establishment.  With regard to the 
substance of the US request, needless to say that it was the prerogative of the United States to seek to 
pursue its rights under the WTO Agreements.  Howeve r, this did not entail a right for the United 
States to use the dispute settlement system for purel y speculative claims.  Indeed, in the recent Upland 
Cotton dispute, the United States itself protested vigorously and prevailed against the inclusion of a measure that had not existed at the time the Panel re quest had been made and considered by the DSB.  
Regrettably, that was precisely what the United St ates itself continued to attempt to do as regards 
alleged measures relating to the Airbus A350 aircra ft.  As was well understood by all, neither the 
DSU nor the SCM Agreement allowed WTO Members to use it against a perceived threat of subsidisation.  A measure subject to WTO dispute set tlement must be subject to consultations and also 
exist at the time of the Panel re quest.  No such alleged support existed for the A350, neither at the 
time the United States had asked for additional c onsultations on this matter, nor now.  No 
commitment had been taken on whether or not EC me mber States wished to invest in this project.  
The EC, therefore, strongly objected to the inclusi on of this non-existing measure in the Panel request.  
The EC reserved its right to raise this and any ot her objections later before the Panel.  The United 
States was, once again, seeking the establishment of a Panel against the EC and certain Member 
States.  He noted that the EC continued to be th e proper and correct respondent, also for acts of its 
individual Member States.
5  The member States co-operated closely with the EC which was the sole 
                                                      
5 EC – LAN;  EC – Shipbuilding.  WT/DSB/M/210 
 Page 23 
 
 
  and proper respondent for all measures attacked by the United States.  The EC objected to the 
suggested case name, and noted that the United St ates had previously accepted that the EC was the 
proper and correct respondent.  Finally, he emphasize d that the EC was fully determined to defend its 
legitimate interests and ensure that conditions of fa ir competition prevailed in the production of civil 
aircraft.  The EC objected to the establis hment of a Panel at the present meeting. 
97. The representative of the United States  said that his country was, of course, disappointed by 
the EC's decision not to permit the DSB to establis h the panel at the present meeting.  The United 
States wished to comment on one statement made by the EC during its intervention that was unusual 
for a statement objecting to establishment of a panel,  namely the EC's objection to the title of this 
dispute and its comments on who the proper responding parties were.  The United States had 
requested consultations, and the establishment of a panel, with respect to the governments of 
Germany, France, Spain, and the United Kingdom, in addition to the EC.  Therefore, all five of those WTO Members were properly respondents in this dis pute.  While it might be that the EC would be 
representing the interests of the member States in th is dispute, that representation did not change the 
legal status of member  States as respondents. 
98. The DSB took note
 of the statements and agreed  to revert to this matter. 
7. United States – Measures affecting trade in large civil aircraft 
(a) Initiation of the procedure for developing in formation concerning serious prejudice under 
Annex V of the SCM Agreement and designation of Mr. Mateo Diego-Fernández as the DSB 
representative referred to in paragraph 4 of that  Annex for the development of evidence to be 
examined by the Panel in DS317 established on 17 February 2006 in the form of written 
responses by the United States to written ques tions from the DSB representative to the 
United States pursuant to Annex V, paragra ph 1 and Annex V, para graph 2 of the SCM 
Agreement (WT/DS317/5) 
99. The Chairman  said that this item was on the agenda of the present meeting at the request of 
the EC.  In this connection, he drew attention to the communication from th e European Communities 
contained in document WT/DS317/5, and invited the representative of the European Communities to 
speak. 
100. The representative of the European Communities  said that the EC was disappointed that the 
United States had repeatedly blocked the EC's reque st for the initiation of an Annex V procedure. The 
terms of the SCM Agreement were quite unambiguous.  It provided for an automatic initiation of the 
Annex V procedure at the request of either party to gether with the designation of a Facilitator.  The 
continued blockage by the United States was also inconsistent with the general obligation to co-
operate set out in paragraph 1 of Annex V.  The Un ited States simply could not hide behind the fact 
that in 2005 the EC had insisted – for real and practical reasons – that both parties should consult and co-operate on modalities of the Annex V procedure before actually initiating the Annex V process in 
this complex proceeding.  This was just common sense because numerous issues, such as 
confidentiality and timing had to be  duly addressed. The EC had stated that very clearly in the DSB 
meetings.  The EC had never take n the position that the initiation of the Annex V procedure as such 
was subject to the agreement of the defending pa rty.  The United States itself was clearly on the 
record for considering the initiation of the Annex V pr ocess to be automatic.  As stated a moment ago, 
this was clearly spelled out in and supported by the SCM Agreement.  Annex V played an important 
role in gathering the necessary facts in subsidy di sputes to enable the Pane l to conduct the ensuing 
analysis in the most efficient manner. 
101. He also wished to clarify that the EC w as not seeking a resumption of the "old" Annex V 
procedure, as the United States had stated at the previous DSB meeting.  This should be quite clear WT/DSB/M/210 
Page 24  
 
from the airgram, where one clearly referred to the DS317 Panel established on 17 February 2006. The EC had requested the designation of Mr. Mateo Diego-Fernández as the DSB representative referred to in paragraph 4 of that Annex for the de velopment of evidence to be examined by the panel 
in DS317 established on 17 February 2006.  Indeed, the EC had the right to have the facilitator 
appointed.  This was clearly spelled out in paragra ph 4 of Annex V, pursuant to which the "DSB shall 
designate a representative to serve the function of facilitating the information-gathering process".  In 
short, the EC was merely invoking its rights under the "DS317 bis" case.  The EC Annex V Questions 
were ready for immediate transmission to a DSB desi gnated facilitator.  Finally, he emphasised, once 
again, that the EC continued to be prepared to  discuss practical arrangements on how to conduct this 
new Annex V procedure in the most expeditious and efficient manner for all parties involved. 
102. The representative of the United States
 said that his country was surprised that the EC was 
seeking a separate Annex V information-gathering pr ocess for the panel established on 17 February.  
The EC had initially stated that it had sought estab lishment of that panel to "resolve a number of 
procedural imbroglios that had arisen" with regard s to the terms of reference and Annex V process for 
the panel established in this dispute on 20 July 2005.6  By seeking now to have a separate Annex V 
process for the 17 February panel, the EC would ach ieve the opposite.  It would leave in place the 
20 July Panel and create an independent panel with a separate record, addressing claims that 
overlapped in several areas.  The "imbroglios" in  the 20 July Panel's proceedings that the EC had 
stated it wished to resolve would remain unresolv ed, and would be exacerbated by new uncertainties 
with regard to the relationship between the 20 July  and 17 February panels.  The United States also 
noted that, as the title of this agenda item indicated , the EC was seeking to unilaterally determine the 
identity of the representative of the DSB under para graph 4 of Annex V of the SCM Agreement, as 
well as the particular procedures for its proposed in formation-gathering process.  Nothing in Annex V 
or the DSU gave the EC that authority.  For these reasons, as well as the reasons that the United States 
had raised at past DSB meetings, the United States wa s  not in a position to agree to the EC's request. 
103. The representative of Brazil  said that, for the sake of brevity, his country would not repeat its 
views on this issue. However, Brazil wished to re fer Members to its statements on the invocation of 
Annex V of the SCM Agreement in the context of  the Aircraft disputes between the EC and the 
United States that had been made at the DSB meetings on 3 August 2005 as well as at the DSB meetings on 14 and 17 March 2006. 
104. The DSB took note
 of the statements. 
8. Proposed nominations for the indicative list of governmental and non-governmental 
panelists 
105. The Chairman  drew attention to document WT/DSB /W/316, which contained additional 
names proposed for inclusion on the indicative list of governmental and non-g overnmental panelists, 
in accordance with Article 8.4 of the DSU.  He proposed that the DSB approve the names contained 
in document WT/DSB/W/316. 
106. The DSB so agreed . 
 
__________ 
 
 
                                                      
6 WT/DSB/M/205, para. 69;  WT/DSB/M/204, para. 3.