RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/219 
6 October 2006 
 (06-4783) 
Dispute Settlement Body 
1 September 2006  
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 1 September 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...................................................................................6  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by  
the United States .............................................................................................................. ...........6  
2. 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 .................................................................................................................... ............7
 
(a) Statements by Honduras, Ni caragua and Panama.......................................................................7  
3. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ............................................9  
(a) Statements by Canada, the Eur opean Communiti es and Japan...................................................9  
4. United States – Anti-dumping measures on oil country tubular goods (OCTG) 
from Mexico.................................................................................................................... .........11  
(a) Statement by the United States regarding implementation of the recommendations 
and rulings of the DSB......................................................................................................... .....11  
5. Korea – Anti-dumping duties on imports of certain paper from Indonesia......................12  
(a) Statement by Indonesia......................................................................................................... ....12  
6. United States – Subsidies on upland cotton..........................................................................14  
(a) Recourse to Article 21.5 of the DSU by Brazil:  Request for the establishment of 
a panel........................................................................................................................ ...............14  
7. United States – Final dumping determin ation on softwood lumber from Canada:  
Recourse to Article 21.5 of the DSU by Canada...................................................................15  
(a) Report of the Appellate Body and Report of the Panel.............................................................15  WT/DSB/M/219 
Page 2  
 
  8.
 Proposed nominations for the indicative list of governmental and 
non-governmental panelists ..................................................................................................23  
9. Swearing-in ceremony of the newly a ppointed Appellate Body member ..........................23  
(a) Statement by the Chairman...................................................................................................... .23 
 
 
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.45) 
 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.45) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.20) 
 
1. The Chairman
 recalled that Article 21.6 of the DSU required that "unless the DSB decides 
otherwise, the issue of implementation of the re commendations or rulings shall be placed on the 
agenda of the DSB meeting after six months follo wing the date of establishment of the reasonable 
period of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue is 
resolved".  He proposed that the three sub-items  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.45)  
2. The Chairman  drew attention to document WT/DS176/ 11/Add.45, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US Section 211 Omni bus Appropriations Act of 1998. 
3. The representative of the United States  said that his country had provided a status report in 
this dispute on 22 August 2006, in accordance with Artic le 21.6 of the DSU.  As noted in the status 
report, several legislative proposals that would im plement the DSB's recommendations and rulings in 
this dispute had been introduced in the current C ongress, both in the US Senate and the US House of 
Representatives.  The US administration continued to  work with the US Congress to implement the 
DSB's recommendations and rulings.  In this connec tion, the United States regretted very much that 
some Members – including some whose record of protecting intellectual property rights appeared less than robust – had unjustly criticized the US commitm ent to intellectual property rights and the WTO.  
The United States said that it was a strong advocate of  substantial protections for intellectual property 
internationally, and that it was second to none in providing strong intellectual property protection in 
the United States.  His delegation wished to comme nt on other criticisms that it had heard.  The 
United States had heard some criticisms from tho se asserting a "systemic" interest in prompt 
implementation, who had noted that four and a half years had passed since the adoption of the recommendations and rulings in this dispute.  The United States trusted that those asserting such an 
interest had now realized that Item 2 of the age nda of the present meeting involved a dispute that had 
left several Members waiting for full compliance ne arly a decade following the adoption of the DSB's 
recommendations and rulings.  Therefore, the Unite d States looked forward to the interventions of 
these delegations concerning their systemic intere st under Item 2.  Second, some Members had 
asserted that the US administration had not provid ed details of how it was working with the US 
Congress to implement the DSB's recommendations a nd rulings, and had concluded incorrectly that 
nothing was being done.  In this connection, the United States would note that it was not always  WT/DSB/M/219 
 Page 3 
 
 
  possible or appropriate to recount internal government al efforts to pass legislation.  The United States 
noted that it had heard similar criticisms about the leve l of detail of US status reports in other disputes 
in which the US Congress had ultimately passed legislation.  Finally, a number of Members had referred to a matter – the renewal of a particular  trademark – that had nothing to do with the 
recommendations and rulings of the DSB, which concer ned only the text of Section 211.  This agenda 
item concerned US implementation of the recommenda tions and rulings of the DSB;  matters which 
did not relate to implementation were  not relevant to this discussion. 
4. The representative of th e European Communities
 said that, once again, the United States 
could not report on any progress in the implementa tion of the DSB's rulings and recommendations in 
respect of Section 211.  And,  Members would again be presented with the same repetitive empty 
report under Item 3 of the agenda of the present m eeting concerning the dispute on Section 110 of the 
US Copyright Act.  Both disputes concerned the TRIPS Agreement that the United States had 
strongly and rightly promoted.  This Agreemen t was a keystone for achieving effective and 
non-discriminatory protection of intellectual prop erty rights worldwide and an indispensable 
complement to the rules on trade in goods in the development of world trade.  By its persisting 
ignorance of other Members' rights under the TRIPS Agreement, the United States undermined the 
authority of the Agreement and compromised the interests of the industry at large by preserving legislation that benefited the limited interests of very few companies. 
5. The EC was also extremely disappointed and concerned by the recent decision of the US 
administration to refuse the specific licence that woul d have allowed the renewal of the registration of 
the Havana Club trademark.  The specific licence ha d been refused on the grounds that "it would be 
inconsistent with US policy to issue a specific li cense authorizing transactions related to the renewal 
of the Havana Club trademark".  This statement wa s disturbing.  The renewal would not have given 
away or granted rights.  It would only have pr eserved the status quo and would thus allow the US 
courts to decide in pending proceedings who was th e legitimate owner of that mark.  How could this 
be inconsistent with general US  policy?  Conversely, how could refusing the registration's renewal 
and thus the very possibility of defending potential rights to the mark be consistent with the US 
policy?  This was in clear contradiction with the principle strongly promoted worldwide by the United 
States that ownership of intellectual property rights s hould be decided in courts on the basis of the law 
without interference of political considerations.  If this US policy were to be followed, it would 
seriously undermine the efforts to promote rules-b ased protection of intellectual property rights. The 
EC urged the United States, the only WTO Member that consistently did not comply with its 
obligations under the TRIPS Agreement, to accept the multilateral disciplines and the rule of law. 
Finally, he noted that there was no relationship between the matter under discussion and the matter to 
be raised under Item 2 of the agenda of the present meeting.  
6. The representative of Cuba
 recalled that, at the 19 July DSB meeting, his delegation had 
stated that there was a reason for the excessive dela y in implementing WTO rules by the United States 
pertaining to the Section 211 dispute, namely, to  prevent a Cuban firm from renewing the "Havana 
Club" rum trademark at the US Patent and Trademark Office.  The despicable intention of this action 
was to enable the powerful firm Bacardi, closely lin ked to the anti-Cuban mafia in Miami and to the 
US far right, to appropriate the trademark in the US  territory.  Recent events had proved Cuba to be 
right.  On 28 July, the US Office of Foreign Asset s Control had rejected an application from the 
Cuban firm "Cubaexport" for a specific licence for renewal of the registration of the "Havana Club" 
trademark in the United States.  In reality, the app lication had been rejected in order to satisfy the 
interests of Bacardi, which for over a decade had ma de countless moves in the United States to take 
over the ownership of the "Havana Club" trademark.  The "Havana Club" trademark, registered in the 
United States since 1976 by "Cubaexport", enjoyed prestige and recognition in the international 
market, designating a premium product with an eve r-increasing volume in the world market and a rum 
which was genuinely Cuban.  Consequently, Barcar di's decision to begin marketing rum produced in 
Puerto Rico under the trademark "Havana Club" constituted a fraudulent act that would mislead WT/DSB/M/219 
Page 4  
 
  consumers, who had traditionally identified "H avana Club" as rum produced in Cuba and not 
elsewhere.  This conduct on the part of Bacardi, wh ich disregarded the most fundamental principles of 
ethical trade, was attributable to Section 211, an arbitrary and illegal provision, which had been 
declared to be inconsistent with basic WTO principles by the DSB on 2 February 2002. 
7. Despite several reasonable periods of time fo r implementation agreed by the EC and the 
United States within which the latter was to  comply with the DSB's recommendations and 
conclusions, Section 211 remained in effect . The conduct of the United States had clearly 
demonstrated its Government's lack of compliance with the guiding principles of the DSU and had 
turned into a consistent pattern of disregard fo r the multilateral agreements and the WTO, which had 
serious systemic implications.  Persistent conduc t of this kind set a dange rous precedent that might 
affect other Members in the future, particularly developing countries, which viewed the dispute 
settlement system as a central element in providi ng security and predictability to the multilateral 
trading system.  The conduct of the United States in this and other disputes eroded the DSU and the foundations on which the TRIPS Agr eement had been built.  He asked whether any credibility could 
be attributed to the multilateral trading system b ased on rules and obligations that were supposedly 
equal for all its Members, when one of its key play ers maintained an attitude of persistent and open 
defiance and did not respect international disciplines .  Cuba reiterated its call for Members to take 
prompt and effective action to enforce the WTO Ag reements and their own decisions and to demand 
that the United States comply immediately and unconditionally with the DSB's rulings and recommendations, in particular those pertaining to  this dispute, by repealing the unfair and 
discriminatory provision, Section 211. 
8. The representative of the Bolivarian Republic of Venezuela
 said that her delegation thanked 
the United States for its status report of 1 Sept ember on the implementation of the recommendations 
and rulings of the DSB pertaining to the dispute:  "United States – Section  211 Omnibus 
Appropriations Act of 1998".  Her country wished to  be fully associated with the statement made by 
Cuba, given that it considered that the indefin ite postponement by the United States of compliance 
with the recommendations and rulings merely encour aged the application of Section 211, a piece of 
legislation, which the Appellate B ody had considered to be inconsiste nt with WTO rules.  Her country 
was increasingly concerned by the systemic aspect that this issue had acquired:  the status report 
submitted by the United States offered no certainty wh atsoever as to the implementation of the DSB's 
recommendations and rulings in the near future , which set a negative precedent for the WTO and 
constituted a lack of transparency.  Respect for the principles of the DSB was of concern and interest 
to all WTO Members and the principle of prompt compliance with the DSB's rulings and 
recommendations was the cornerstone of the disput e settlement mechanism.  Finally, her country 
urged the United States to make every possibl e effort to implement the DSB's rulings and 
recommendations immediately and without any furt her delay by repealing Section 211 of the 
Omnibus Appropriations Act of 1998 in accordance with the WTO Agreements. 
9. The representative of Bolivia  said that having heard the report by the United States, his 
delegation wished to express, once again, its concern at the failure of the Unite d States to comply with 
the recommendations and rulings of the DSB in this pa rticular dispute.  Indeed, for more than four 
years now, there had been no progress towards lifting th e restrictions provided for in Section 211 of 
the Omnibus Appropriations Act of the United Stat es, which was causing considerable prejudice to 
Cuba. As had already been stated on other occasions , the failure to comply with the recommendations 
and rulings of the DSB was undermining the credibility  of the judicial body and alerting the relevant 
actors, including civil society, with respect to the proper functioning of the multilateral judicial 
system.  The continued delay in applying the DSB's rulings should, therefore, be a source of concern 
to all Members.  It not only weakened the authorit y of the DSB, but also undermined the legitimacy of 
the intellectual property rights area which had achieved considerable progress under the TRIPS 
Agreement.  Once again, his delegation wished to join other Members in urging the United States to  WT/DSB/M/219 
 Page 5 
 
 
  implement the recommendations and rulings of the DS B in this dispute, because the lack of such 
implementation was causing considerable  prejudice to another WTO Member.  
10. The representative of Brazil  said that his country wished to thank the United States for its 
status report and the statement made at the present meeting.  Based on systemic considerations, however, Brazil wished to express its concerns with  the protracted implementation process in this 
dispute.  Article 21.3(c) of the DSU provided th at the period for implementation of recommendations 
should not exceed 15 months from the date of adoption of a panel or the Appellate Body report by the 
DSB.  In the present case, the adoption of the Pa nel and the Appellate B ody Reports had occurred 
more than 55 months ago.  However, no implemen ting action had been taken during that period.  The 
United States had, therefore, granted itself a grace period of more than three years on top of the 
Article 21 indicative time-frame for the outer limit of an implementation period.  Furthermore, based 
on the statement made by the United States, there was no clear signal that the issue would be resolved 
in the near future.  This could not be reconciled w ith the principle of prompt settlement of disputes, 
one of the core objectives of the WTO dispute settlement system.  Brazil strongly urged the 
United States to take the necessary steps to  implement the relevant DSB's rulings and 
recommendations. 
11. The representative of Argentina
 said that his delegation wished to reiterate its systemic 
concern over the delays in the implementation of the recommendations and rulings adopted by the 
DSB more than four years ago.  Prompt complia nce with the rulings and recommendations of the 
DSB was a key element of the WTO dispute settlement system.  The lack of progress in implementation adversely affected the credibility of the system and harmed all WTO Members, in 
particular developing countries, which viewed the dispute settlement system as an important 
instrument.  Argentina, therefore, urged the United States to redouble its efforts to comply with the 
recommendations and rulings of the DSB in this dispute. 
12. The representative of India
 said that his delegation wished to thank the United States for its 
status report, but India continued to be concerned that due consideration of the principle of prompt 
compliance with the rulings and recommendation of  the DSB, essential to effective resolution of 
disputes to the benefit of all Members, appeared to be missing in this dispute.  Although a solution 
mutually acceptable to the parties was preferred, parties should keep the DSB informed of progress 
towards such resolution in a meaningful manner.  This was not apparent from the statements made by 
the parties, even four years after adoption of the recommendations and rulings of the DSB, thus ignoring the systemic concerns of WTO Members in gene ral.  India urged the parties to this dispute to 
be responsive to these systemic concerns and to shed  some light on the way they intended to fulfil the 
objective of prompt settlement and the actions they  proposed to take to achieve that objective. 
13. The representative of China
 said that, due to systemic interests, his delegation wished to 
express its continued concern in this dispute.  Firs t, China wished to thank the Unites States for its 
status report and the statement made at the present meeting.  However, China regretted that there was 
no clear indication when this matter would be resolv ed to the satisfaction of the parties and other 
Members.  It was now more than four years since the adoption by the DSB of both the Panel and the Appellate Body Reports in this cas e.  Such a delay raised systemic  concerns about the functioning and 
efficacy of the dispute settlement system.  China firmly believed that prom pt and full implementation 
of the DSB's rulings and recommendations was one of the major cornerstones of the WTO dispute 
settlement.  Therefore, China once ag ain wished to urge the United States to implement the decision 
of the DSB in this dispute as soon as possible. 
14. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/219 
Page 6  
 
  (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.45) 
15. The Chairman
 drew attention to document WT/DS184/ 15/Add.45, 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 22 August 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 at issue in this dispute.  Details  were provided in document WT/DS184/15/Add.3.  The 
US administration continued to support 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 such amendments. 
17. The representative of Japan
 said that his country noted the statement made by the United 
States along with its latest status report.  While Japan was encouraged that the US administration 
continued to work with the US C ongress to enact the legislation H. R. 2473, it was regrettable that 
Members had not seen any progress in the dispute under  consideration for more than one year since 
the legislation had been introduced in the US Congress.   As  Japan had repeatedly stated before the 
DSB, a full and prompt implementation of the recommendations and rulings of the DSB was a 
principal element in ensuring the credibility of the WTO dispute settlement system.  Japan wished to 
renew its strong hope that the United States woul d make further efforts to implement the DSB's 
recommendations and rulings as soon as possible. 
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.20) 
19. The Chairman  drew attention to document WT/DS160/ 24/Add.20, 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 22 August 2006, in accordance with Ar ticle 21.6 of the DSU.  As noted in the report, 
the US administration was working closely with the US Congress, and conferring with the EC, to 
reach a mutually satisfactory resolution of this matter. 
21. The representative of the European Communities  said that, once again, the EC wished to 
express its disappointment with the lack of progress in  solving this long-standing dispute.  For more 
than five years the United States had failed to take any steps to amend a piece of legislation that violated intellectual property rights and hurt the interests of music creators.  As he had already 
stressed previously – in the course of the meeti ng when dealing with the Section 211 dispute – the 
damage resulting from the failure of the United St ates to comply with the DSB's rulings had gone 
beyond the boundaries of this specific dispute as it had called into question the US commitment to the TRIPS Agreement.  In spite of the seriousness of th e situation, the United States had persisted in its 
refusal to provide specific informa tion to the DSB on its intentions with regard to implementation.  
The EC urged, once again, that the United States pr ovide information on the specific steps that it had 
taken or intended to take to solve this dispute.  Th is situation of non-compliance had already lasted for  WT/DSB/M/219 
 Page 7 
 
 
  too long.  Finally, the EC recalled that it had reserved its right to reactivate, at any point in time, the 
arbitration proceedings regard ing the level of retaliation. 
22. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
2. 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"1 and related subsequent WTO proceedings 
(a) Statements by Honduras, Nicaragua and Panama 
23. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Honduras, Nicaragua and Panama. He then invited the representatives of the respective countries to 
speak. 
24. The representative of Honduras  said that his country wished to refer, once again, to its 
previous statements in which it had explained why it was addressing under this item an implementation issue relevant to Article 21 of the DS U.  The EC's response to this agenda item had, 
in essence, remained unchanged.  The EC had stated  that it was "aware of the importance of the 
banana industry for Latin America" and that it was seeking "the good offices of Norway" to discuss 
"the rebinding of the MFN tariff".  Eight months of "monitoring" had made clear what this language 
meant and what it did not mean.  It did not mean th at the EC had an interest in altering the current 
arrangement.  It meant only, at best, that the EC might be considering binding the tariff at a rate 
higher than the current applied tariff, while continui ng to maintain the applied rate of €176/mt. for an 
indefinite period.  This continued to be the EC's unyielding position, even though the evidence of 
harm to Latin America intensified.  Irrefutabl e proof of the increasing harm being done was 
demonstrated in the EC's data, not in Honduras' data.  Year-to-year Eurostat statistics, when compared 
with the same period in 2005, had confirmed that  Latin America's market position was eroding even 
faster than most had expected.  While traditional Latin American suppliers had collectively lost EC 
market share, the ACP had collectively increased th eir market share by more than 10 per cent.  The 
gains of the most competitive ACP sources were esp ecially pronounced.  Côte d'Ivoire's market share 
had increased by 22 per cent, Ghana's by 307 per cent and the Dominican Republic's by over 12 per 
cent.  Meanwhile, Honduras, a country engaged in a constant struggle against poverty, had lost over 
60 per cent of its EC volume and 63 per cent of its market share.  If the EC was truly "aware of the importance of the banana industry" for the developi ng countries of Latin America, it was difficult to 
see why it would impose these escalating losses on their fragile economies and struggling workforce.  
It was equally difficult to understand why the EC had insisted on a so-called "solution" aimed only at 
eroding Honduras' interests and forcing Latin Ameri ca into a position of resigned defeat.  Honduras 
was unwilling to resign itself to defeat and stood ready,  together with other interested Members, to 
take the steps necessary to ensure prompt compliance by the EC.  
25. The representative of Nicaragua
 said that his country also noted the worsening of the market 
situation for bananas and the increasingly difficult ci rcumstances affecting traditional Latin American 
suppliers in the EC market and wished, yet again, to draw the attention of the DSB to its plight in this 
regard.  Despite the fact that Nicaragua's banana i ndustry had historically exported bananas to the EC 
and had enjoyed considerable comparative advant ages in the banana sector, Nicaragua now found 
itself completely out of the EC market and unless the current arrangement was improved considerably, there was no hope of Nicaragua getting b ack into it.  That was why when Nicaragua had 
heard the EC insisting that its new regime would remain "trade neutral", it had been bound to refute 
such a claim.  This regime, which was blocking access for impoverished countries such as Nicaragua, 
                                                     
 
1 WT/DS27. WT/DSB/M/219 
Page 8  
 
  had unfairly altered market shares more quickly than most of those countries had expected and had 
eroded prices to new levels of non-profitability.  This regime was a framework for maintaining 
devastation and trade damage and certainly did not maintain trade "neutrality".  Ironically, the havoc 
in the EC market was of no benefit even to  the European Commission's price administration 
objectives.  The EC had more than doubled its tariff s on 1 January 2006 to ensure that its own banana 
producers "did not find themselves in a less favourable  situation than that existing prior to the entry 
into force in 1993 of the import quota regime [for bananas]".  The EC had thought that a tariff of US$4.20/box, imposed on the poorest nations in the hemi sphere, would help to raise internal prices 
and thus safeguard the high reference prices of its  subsidies.  This more than doubled preferential 
tariff  had precisely the opposite effect.  It had led to enormous ACP gains through the "cross–
subsidization", which in turn had helped to brin g about an 18 per cent drop in the price of bananas 
produced in the EC and an increase of 170 per cent in banana subsidies.  As Nicaragua had been 
warning ever since the EC had first announced this  arrangement at the end of November 2005, these 
new measures were ill conceived, caused distortion in most of the sector and was clearly illegal.  It was essential that the EC comply soon and restore fair market access for Nicaragua. 
26. The representative of Panama
 said that Honduras had just shared with Members the worrying 
statistical picture that had already emerged as a result of months of the EC's non-compliance.  
Panama's market situation was one of the most worr ying.  As a principal supplier of bananas to the 
EC, Panama had already suffered a decline of over 6 per cent in the volume exported to that market. 
Panama's market share had declined by 13 per cen t.  Because the EC prices had completely collapsed, 
bananas from Panama, which were normally sent to th e EC market, were now being sold for a greatly 
reduced profit.  The market situation for competitiv e ACP suppliers was dramatically different.  ACP 
producers were using their illegal US$4.20/box pref erence margin to secure a huge increase in over-
quota sales, which were projected to reach 125,000 mt . by the end of the year.  This volume was 132 
times greater than ACP over-quota sales in 2005.  Because ACP profit margins would increase as 
over-quota sales rose, a two-fold increase above a nd beyond 125,000 mt. was expected in the short 
term.  There would be ample ACP suppliers to ach ieve this increase, since all significant banana 
investments were now being transferred to Africa.  Economists ha d already modelled the 
consequences of these emerging trends.  Left unc hecked, the US$4.20/box ACP preference would 
reduce Latin America's exports by 1 million mt;  its export revenues by approximately 
US$600 million;  its income by almost US$500 milli on;  and its jobs by approximately 125,000. 
Given Panama's current situation, his country feared  that a substantial part of this macroeconomic 
damage would be borne by its own rural banana-p roducing population.  Faced with this prospect, 
Panama had no option but to insist on prompt co mpliance and was working with other interested 
parties to ensure that this was achieved. 
27. The representative of the European Communities  said that the EC had listened to the 
statements made by WTO Members on this matter.  The EC wished to refer to its previous statements 
in which it had explained why this matter was not an  "implementation issue" covered by Article 21 of 
the DSU.  The EC had remained open to addressing the concerns of Latin American suppliers in 
relation to its import regime in the appropriate fora .  The EC was well aware of the importance of the 
banana industry for Latin American countries, as well as ACP countries, and had always taken these 
interests into consideration.  The EC was in regular contact with the WTO Members involved to 
discuss this issue, including the rebinding of the MF N tariff.  The EC remained committed to maintain 
access to the EC market from all banana supplying countries.  Contrary to the statements made by 
Honduras and Panama at the previous DSB meeting,  data on overall MFN impor ts, available to date, 
had given no reason to believe that such access was not  maintained.  The new EC tariff had, thus far, 
resulted in the increase in imports from both MFN and ACP suppliers as compared to 2005.  These 
data were being regularly discussed in the contex t of the monitoring process under the good offices of 
Norway.  WT/DSB/M/219 
 Page 9 
 
 
  28. The representative of the United States  said that his country continued to be concerned about 
the lack of progress on the part of the EC in reso lving this dispute.  Although Members had voiced 
important and pressing concerns in this and several  previous DSB meetings, the United States was not 
aware of any steps that the EC had taken to ad dress Members' concerns.  In light of this, the 
United States was continuing to hold informal discussi ons with interested Members.  As it had done in 
each of the previous DSB meetings, the United Stat es again urged the EC to work with interested 
Members to resolve this dispute as expeditiously as possible.  And, again, the United States looked 
forward to hearing from those several  Members, having previously spoken of their systemic interest in 
compliance, under this agenda item. 
29. The DSB took note  of the statements.   
3. 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 
30. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Canada, the EC and Japan.  He then invi ted the respective representatives to speak. 
31. The representative of Canada  said that his country had repeatedly expressed its appreciation 
with the steps the United States had taken towards implementing the DSB's rulings and 
recommendations in this dispute.  However, the United States had only prospectively repealed the 
Byrd Amendment.  Anti-dumping and countervailing duties collected up to 30 September 2007 could 
still be disbursed to US producers under the terms of th is legislation.  As such, Canada believed that 
the US claim – made in its last status report from over six months ago – that it had "taken the actions 
necessary to implement the rulings and recommendati ons" in this dispute was not accurate.  Canada, 
therefore, called on the United States to resume th e submission of status reports and to immediately 
repeal the Byrd Amendment. 
32. The representative of the European Communities  said that the EC wished to record again its 
disagreement with the statement made by the Unite d States that it had taken all actions necessary to 
implement the DSB's recommendations and ruling s in this dispute.  The CDSOA breached 
Articles 18.1 of the Anti-Dumping Agreement and Article 32.1 of the SCM Agreement for 
transferring anti-dumping and countervailing duties to the US complaining industry.  The US Congressional Budget Office had foreseen that the distribution of the anti-dumping and countervailing 
duties would continue until at least the fiscal year of 2010 starting on 1 October 2009.  As long as those transfers continued, the United States would c ontinue to be in breach of its WTO obligations 
and full implementation would still have to be de livered.  By denying this, the United States had 
actually asserted that it had the right to comply with  the DSB's ruling at some undetermined date in 
the future regardless of Members' duty to comply promptly with the DSB's rulings.  The FSC dispute 
where US Congress had finally put an end to WT O-illegal grandfathering clauses showed that the 
United States could revisit the delayed termination of the Byrd Amendment if the political will was 
there.  The EC wished to ask th e United States again if and what steps it intended to take to stop the 
transfer of anti-dumping and countervailing duties w ithout further delay.  The EC also renewed its 
call on the United States to abide by its clear obligation under Article 21.6 of the DSU and submit status reports on implementation in this dispute. 
33. The representative of Japan
 said that his country regretted to express, yet again, its 
disappointment with another failure of the United St ates to submit a status report to the DSB this 
month regarding the implementation of the DSB's recommendations and rulings in this case, in 
accordance with Article 21.6 of the DSU.  Although, as Japan had stated repeatedly, the enactment of 
the law by the United States that included provisions  to repeal the CDSOA was an important step WT/DSB/M/219 
Page 10  
 
  forward in the right direction, those provisions also  included the transitional clause that stipulated that 
duties collected on imports entered prior to 1 Octobe r 2007 would continue to be distributed to the US 
domestic industries. In fact, the US Customs and Border Protection published in April 2006, stated that the fiscal year 2006 preliminary amounts available for disbursements wiould be around US$172 million.
2  Following that announcement, the US authority had issued in June 2006, the 
"Notice of Intent to Distribute Offset for Fiscal Year 2006"3 pursuant to the CDSOA.  This notice set 
forth the detailed instructions and guidance for US  domestic producers to claim distributions for the 
fiscal year 2006,  in accordance with th e regulations implementing the CDSOA. 
34. The announcement and notice demonstrated th at the CDSOA had been repealed only in form  
but in effect  would be maintained "for an undetermined period".  Thus the US authority's preparatory 
work for the next round of disbursement supported the view that the United States had still failed to 
fully implement the DSB's recommendations and ruli ngs in this case.  Under these circumstances, 
Japan had decided to continue, as from 1 Septembe r 2006, its suspension of concessions and related 
obligations under the GATT 1994 on imports of certai n products originating in the United States for 
another one year to induce full compliance by the Un ited States.  As explained in the communication 
to the Chairman of the DSB dated 22 August 2006, the products subject to an additional duty of 
15 per cent under that suspension were unchanged.  Finally, Japan called on the United States to make 
further efforts to terminate the illegal distribution under the CDSOA and to fully implement the DSB's 
recommendations and rulings.  Until the CDSOA was repealed completely, Japan reserved all its 
rights under the DSU. 
35. The representative of Brazil  said that his country wished to thank Canada, the EC and Japan 
for raising this issue on the DSB agenda. This  was the appropriate forum to debate about 
non-compliance – a matter that concerned the whole Membership.  Brazil shared the view of those 
three Members that the "issue"  had not been resolv ed in this dispute within the meaning of Article 
21.6 of the DSU.  The conditions under which the repeal of the Byrd Amendment would operate did not support the assertion that the United States had implemented the relevant DSB's 
recommendations.  According to those recommendati ons, there would be no full compliance on the 
part of the United States until and unless all disbur sements under the Byrd Amendment ceased.  Based 
on the applicable provisions of the "Deficit Re duction Omnibus Reconciliati on Act", disbursements 
would continue, at least, until late 200 7.  In this context, the co-compl ainants could not be deprived of 
any right conferred by the DSU with respect  to this situation of non-compliance. 
36. The representative of Thailand
 said that first he wished to thank Canada, the EC, and Japan 
for once again raising this matter in the DSB.  Thailand joined previous speakers in expressing 
ongoing disappointment that the United States co ntinued to illegally disburse funds under the 
CDSOA, and that it continued to refuse to submit any status report on its ou tstanding implementation 
in the case: "United States  – Continued Dumping and Subsidy Offset Act of 2000".  To this end, 
Thailand reaffirmed its previous views expressed  during DSB meetings since February 2006, and 
urged the United States to continue providing status reports until it brought its actions into conformity 
with the DSB's rulings and recommendations in this di spute, and until this matter was fully resolved. 
                                                      
2 See US Customs and Border Protection's website at: 
http:// www.customs.treas.gov/xp/cgov/import/add_cvd/cont_ dump/cdsoa_06/. 
3 71 Federal Register at 31336 et seq. (dated 1 June 2006).  In this Notice, the US Customs and Border 
Protection admitted that as a result of transitional clause  "the effect of the repeal will be delayed for several 
years."  It further explained that "the distributio n process will continue until all entries made before 
1 October 2007, are liquidated and the duties are collected" and "[b]ecause of the statutory constraints in the assessments of antidumping and countervailing duties, the distribution process will be continued for an 
undetermined period".  WT/DSB/M/219 
 Page 11 
 
 
  37. The representative of India  noted that there had not been any response from the United States 
to the question put by India in the previous DSB meeting as to how continued disbursements of duties 
collected on imports entering the United States squared up with its compliance obligations.  The United States needed to do more than re-iterate a clearly indefensible position on compliance in the 
face of the new administration action based on th e very CDSOA that it had admitted was found 
inconsistent with WTO rules and had asserted that  it had been withdrawn.  Such unilateral action 
undermined the WTO dispute settlement system.  Indi a urged the United States again to inform the 
DSB of the steps it proposed to ta ke to ensure full compliance.  India reiterated its request that the 
United States should resume submitting status reports in this dispute. 
38. The representative of Indonesia
 said that his country fully supported the statement made by 
Canada, the EC and Japan.  Although Indonesi a had signed a bilateral agreement with the 
United States, however, like other Members, it strongl y urged the United States to fully implement the 
DSB's rulings by repealing the CDSOA.   
39. The representative of the United States  said that as his country had already explained at 
previous DSB meetings, the US President had signed the Deficit Reduction Act into law on 
8 February 2006.  That Act included a provisio n repealing the Continued Dumping and Subsidy 
Offset Act of 2000.  Thus, the United States ha d taken all actions necessary to implement the 
recommendations and rulings in these disputes.  The United States had in past meetings invited 
Canada, the EC, and Japan to explain what purpos e would be served by the submission of status 
reports repeating the progress the United States had made in the implementation of the DSB's recommendations and rulings.  Unfortunately, ho wever, these Members had failed to explain 
themselves. With regard to suggestions of further consideration by the US Congress, the United States 
also questioned the wisdom of re-opening congr essional debate over the Continued Dumping and 
Subsidy Offset Act.  The United states was surprised by the assertions of Brazil, India, and others that 
the United States would not have implemented the DS B's recommendations and rulings until the last 
CDSOA distribution was made.  Of course, it was not their place within the WTO dispute settlement 
system to determine unilaterally when  another Member achieved compliance. 
40. The DSB took note
 of the statements.  
4. United States – Anti-dumping measures on oil country tubular goods (OCTG) from 
Mexico 
(a) Statement by the United States regarding impl ementation of the recommendations and rulings 
of the DSB 
41. The Chairman   said that this item was on the agenda of the present meeting at the request of 
the United States, and invited the represe ntative of the United States to speak. 
42. The representative of the United States  said that his country was pleased to report that it had 
implemented the recommendations and rulings of the DSB in this dispute.  On 27 April 2006, the US Department of Commerce had issued a draft Sec tion 129 determination, addressing the Panel's finding 
that the original determination did not indicate that certain information and argument had been 
considered.  The respondent and domestic interested  parties had submitted comments on the draft, as 
well as rebuttal comments.  In addition, both parti es had filed additional factual information that had 
not been solicited.  The Department of Comme rce had accepted the unsolicited information and had 
added other factual information to the record, provid ing interested parties an additional opportunity to 
comment on all new factual information on the reco rd.  The Department of Commerce had undertaken 
an extensive analysis of the information and argument  presented by interested parties.  In light of the 
DSB's recommendations and rulings, based on the totality of the evidence on the record of the 
Section 129 proceeding, the Department of Commerce had found that there was a likelihood of WT/DSB/M/219 
Page 12  
 
  continuation or recurrence of dumping had the an ti-dumping duty order on OCTG from Mexico been 
revoked at the end of the original sunset review pe riod.  Accordingly, on 9 June 2006, the Department 
of Commerce had issued a revised determination that implemented the recommendations and rulings 
of the DSB.  
43. The representative of Mexico
 said that it should not come as a surprise to other Members that, 
in Mexico's view, the United States had failed to comply with the recommendations and rulings of the 
DSB and was, therefore, still in breach of its WT O obligations, in particular under the Anti-Dumping 
Agreement.  Mexico and the United States, therefor e, had reached a procedural agreement and, on 
21 August 2006, Mexico had reque sted consultations with a vi ew to initiating Article 21.5 
proceedings, given that his country considered, inter alia , that the Determination issued by the US 
Department of Commerce and the continued exis tence of the anti-dumping duty order on OCTG from 
Mexico had failed to comply with the reco mmendations and rulings of the DSB since the 
anti-dumping order was being improperly applied to Mexican exports.  Mexico and the United States 
were currently engaged in consultations w ith a view to resolving this dispute. 
44. The DSB took note  of the statements.   
5. Korea – Anti-dumping duties on imports of certain paper from Indonesia 
(a) Statement by Indonesia 
45. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Indonesia, and invited the represen tative of Indonesia to speak. 
46. The representative of Indonesia  said that his country noted that the reasonable period of time 
for compliance with the rulings of the Panel in this  dispute had expired on 28 July 2006.  The Korean 
Trade Commission had notified its implementing measure on 27 July 2006.  During the 
28 November 2005 DSB meeting,  Korea had stated th at in its implementation of the Panel's rulings, 
it had intended "to provide an example of the cond uct of anti-dumping investigations in a manner 
consistent with the highest standards of procedural and substantive fairness".  He wished to take this 
opportunity to highlight certain aspects of Korea's implementing measures that were difficult to 
reconcile with Korea's stated intentions.  Korea ha d stated that its implementation would comply with 
the highest standards of procedural fairness.  Ye t, Indonesian exporters had not been provided with 
any opportunity to comment on Korea's injury an d causal link re-determinations.  Moreover, Korea 
appeared to have taken the position that disclosur e failures in the underlying investigation could be 
rectified by simply making the relevant disclosur es during the reasonable period of time.  Indonesia 
noted that this had not placed the Indonesian exporters  in the position that they would have been if 
disclosure had been made in a timely manner.  For instance, Indonesian exporters had not been 
provided access to the precise figures and sources used  in their dumping margin calculations and, 
therefore, could not make targeted arguments to the Korean Trade Commission (KTC).  This 
prejudice was not rectified by letting them see the relevant calculations almost three years later at a point in time when the exporters could not exert any influence on the outcome.  Korea's posture 
implied that violations of procedural obligations  in the Anti-Dumping Agreement incurred not cost.  
Countries whose exporters were regularly subject to  anti-dumping investigations should consider the 
implications of Korea's position carefully. 
47. As far as the substance of the implemen ting measures was concerned, Indonesia was 
extremely disappointed with the approach taken by  Korea.  The KTC had not altered its dumping 
margin calculations in any way.  Korea had cont inued to rely on the information obtained from a 
manufacturing company to calculate the interest expe nses attributable to a re-seller.  In Indonesia's 
view, the KTC's reasoning on this point directly c ontracted the rulings and recommendations of the 
Panel.  Indonesia was also disappointed with the injury and causal link re-determinations conducted  WT/DSB/M/219 
 Page 13 
 
 
  by the KTC.  Korea's continuing non-compliance le ft Indonesia no choice but to initiate Article 21.5 
proceedings soon.  His country hoped that the Panel would quickly and definitely resolve this dispute 
between the two countries.  Finally, he noted th at Indonesia hoped to obtain a better understanding of 
the KTC's measures in consultations with Korea in the coming days.  Indonesia's understanding would 
be greatly facilitated if Korea could provide an Eng lish translation of its report as a courtesy to the 
Indonesian delegation. 
48. The representative of Korea  said that it was regrettable that Indonesia was not satisfied with 
the measures taken by Korea in order to comply w ith the rulings and recommendations of the DSB in 
the case: "Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia" (WT/DS312).  Korea had fulfilled its compliance obligations set out in Article 21 of the DSU by taking 
implementation measures in a prompt and faithful ma nner.  The simple fact that Korea had never 
stood before any compliance panel as a defendant w as a testimony to Korea's genuine and sincere 
efforts.  In this regard, Indonesia's previous interv ention and its decision to file further legal suits in 
this case were hard to understand.   Korea believed that Indonesia's action did not stem from the lack 
of full implementation by Korea, but from the lack of Indonesia's understanding of the substance of 
Korea's implementating measures. 
49. He said that what had been recommended by th e DSB in this case were mostly procedural 
steps that the Korean investigation authority ha d not fully considered.  The Panel had found that 
Korea had not acted inconsistently with the An ti-Dumping Agreement in the area of substantive 
aspects on which Korea's anti-dumping duties were based with respect to Indonesian paper.  In order 
to implement the DSB's recommendations, the KTC had undertaken an extensive review of its earlier 
determination to ensure that it had fully complie d with Korea's obligations under the Anti-Dumping 
Agreement, as clarified by the Panel Report.  The KTC had provided th e requisite additional 
disclosure to the Indonesian respondents, granted those respondents an opportunity to comment, and 
had then fully considered the comments it had recei ved before making its final decision.  Finally, the 
result had been published as an Implementation Repor t in the Korean Gazette on 27 July 2006, one 
day before the expiry of the reasonable period of time for the implementation.  Korea felt confident 
that all of the instances of non-conformity identifie d in the Panel Report had now been corrected in a 
manner consistent with the WTO Agreement, and that Korea's measures imposing anti-dumping 
duties on imports of uncoated wood-free paper fro m Indonesia were now fully in compliance with 
Korea's obligations in accordance with th e Anti-Dumping Agreement and the GATT, both 
procedurally and substantively. 
50. Korea regretted that the comp liance measures taken by Korea were not duly recognized by 
Indonesia.  Upon Indonesia's request, however, Korea and Indonesia had reached a bilateral 
understanding regarding procedur es under Articles 21 and 22 of the DSU, which was contained in 
document WT/DS312/7.  Taking this opportunity, Korea wished to assure all WTO Members, including Indonesia, that Korea would respect all the procedural steps stipulated in the sequencing 
agreement.  In accordance with that agreement, Indon esia had the right to request consultations.  If so 
requested, the Korean government would respond qui ckly and participate in the consultations with 
utmost sincerity. However, Korea strongly urged Indonesia to review thoroughly, once again, the 
compliance measures taken by Korea, before making its request for consultations.  A more careful 
review would make it clear that compliance litigation w as not necessary at all.  Finally, with respect to 
Indonesia's request that Korea provide an English translation of Korea Im plementation Report, he 
believed that this was not necessary because Indonesia's Government had already made its decision 
that Korea had fallen short of implementation based on its examination of the orginal Report that had 
been submitted to it.  Therefore, in his view, th ere was no point providing an English translation at 
this stage.  
51. The DSB took note
 of the statements.   WT/DSB/M/219 
Page 14  
 
  6. United States – Subsidies on upland cotton  
(a) Recourse to Article 21.5 of the DSU by Brazil:  Request for the establishment of a panel 
(WT/DS267/30) 
52. The Chairman
 drew attention to the communicati on from Brazil contained in document 
WT/DS267/30, and invited the representative of Brazil to speak. 
53. The representative of Brazil  said that his country had submitted, for the DSB's consideration, 
a request for the establishment of a panel pursuant to Article 21.5 of the DSU in the case: "United 
States – Subsidies on Upland Cotton". Brazil's request  was contained in  document WT/DS267/30.  On 21 March 2005, the DSB had adopted the Reports of the Panel and the Appellate Body in this 
dispute.  He noted that the time made availa ble to the United States to comply with the 
recommendations and rulings of the DSB had expi red on 1 July 2005 and on 21 September 2005 with 
regard to, respectively, the prohibited and the actiona ble subsidies found to be inconsistent with WTO 
Agreements.  Brazil considered that with respect to some of the DSB's recommendations and rulings, 
the United States had adopted no implemention measures at all, and that the implementation measures 
it had adopted fell far short of compliance w ith the covered agreements and the DSB's 
recommendations and rulings.  Accordingly, because there was disagreement as to the existence and 
consistency with the covered agre ements of measures taken to comply with the recommendations and 
rulings of the DSB, Brazil sought recourse to the dispute settlement mechanism pursuant to 
Article 21.5 of the DSU.  Pursuant to that same  provision, Brazil requested that the DSB refer the 
matter to the original Panel.   
54. The representative of the United States
 said that his country regretted that Brazil had chosen 
to request the establishment of a compliance panel in this dispute.  The United States had fully 
implemented the DSB's recommendati ons and rulings.  Significantly, as previously announced to the 
DSB, the United States had repealed the so-called "Step 2" program.  The DSB had found that program, with annual payments in the hundreds of m illions of dollars, to be a prohibited subsidy.  
Step 2 payments were also part of a measure found to have caused adverse effects in the period 
analyzed by the Panel.  Indeed, Brazil itself had prev iously stated in the DSB that "the repeal by the 
United States of the Step 2 programme was a very important step towards co mpliance in this case."  
WT/DSB/M/205 (DSB meeting of 17 February 2006). 
55. But the Step 2 program was actually only one of three programs that the United States had 
ceased operating following the DSB's adoption of it s recommendations and rulings.  With respect to 
two of the three export credit guarantee programs at issue in the dispute, the United States had also 
stopped issuing any guarantees.  The United States had overhauled the single export credit guarantee 
program that remained in operation.  The United States had changed its fee structure and had even 
eliminated certain markets entirely as eligible d estinations.  These changes responded to key DSB 
findings about charging premiums that were "r isk-based" and designed to cover the long-term 
operating costs and losses of such programs.  Given the significant – and, frankly, difficult – steps that 
the United States had taken to implement the DSB' s recommendations and rulings, it was particularly 
disappointing that Brazil alleged in its panel request  the "non-existence of measures taken to comply". 
56. The facts had also failed to support Brazil's clai ms – apparently, in the alternative – that 
certain of the US measures taken to comply were WTO-inconsistent.  Accordingly, the United States 
considered that Brazil's request for a complianc e panel was unnecessary and without basis.  For the 
reasons that it had mentioned, the United States was not in a position to accept the establishment of a 
panel at the present meeting, as requested by Brazil.  In particular, the United States noted that while 
certain of Brazil's claims were covered by a sequencing agreement between the United States and 
Brazil, which had been circulated to Members in  WT/DS267/22, others were not.  In order to 
demonstrate its willingness to cooperate procedural ly, the United States had proposed to Brazil that  WT/DSB/M/219 
 Page 15 
 
 
  the parties enter into an additional sequencing agre ement to cover the remainder of the claims in 
Brazil's panel request.  Brazil had not wished to do so.  In that light, the United States was not in a position to accept establishment of a panel since Br azil's request included measures and claims that 
were not covered by the sequencing agreement.  Nonetheless, the United States would continue to 
make every effort to cooperate on procedural matters and hoped that Brazil would do the same. 
57. The DSB took note
 of the statements and agreed  to revert to this matter. 
7. United States – Final dumping determination on softwood lumber from Canada:  
Recourse to Article 21.5 of the DSU by Canada 
(a) Report of the Appellate Body (WT/DS 264/AB/RW) and Report of the Panel 
(WT/DS264/RW) 
58. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS264/27 transmitting the Appellate Body Report on:  "United States – Final 
Dumping Determination on Softwood Lumber from Cana da:  Recourse to Article 21.5 of the DSU by 
Canada", which had been circulated on 15 August 2006 in document WT/DS264/AB/RW, in 
accordance with Article 17.5 of the DSU.  He not ed that the Appellate Body Report and the Panel 
Report pertaining to this case had been circulated as unrestricted documents.  As Members were 
aware, Article 17.14 of the DSU required that:  "A n Appellate Body report shall be adopted by the 
DSB and unconditionally accepted by th e parties to the dispute unless the DSB decides by consensus 
not to adopt the Appellate Body report within 30 da ys following its circulation to Members.  This 
adoption procedure was without prejudice to the right of Members to express their views on an 
Appellate Body report".  
59. The representative of Canada  said that his country wished to thank the Panel, the Appellate 
Body, and the respective Secretariats for their work  towards resolving the dispute concerning the US 
softwood lumber anti-dumping determination.  Canada  welcomed the findings of the Appellate Body 
in this case.  They brought additional clarity and certa inty to the interpretation of the provisions of the 
Anti-Dumping Agreement.  He said that at issue in  this case was the alleged compliance of the United 
States with the rulings and recommendations of the DSB.  Specifically, the United States had 
continued to perform "zeroing" in determini ng the margins of dumping in the Section 129 
Determination, the "measure taken to comply".   Through analysis that was both thorough and 
compelling, the Appellate Body had confirmed th at in determining margins of dumping in an 
anti-dumping investigation, the use of "zeroing" in the transaction-to-transaction methodology was inconsistent with a Member's obligations unde r Articles 2.4.2 and 2.4 of the Anti-Dumping 
Agreement.  And so, the Appellate Body had found that the United States had failed to implement the 
recommendations and rulings of the DSB. 
60. He said that the Appellate Body's findings had confirmed a host of prior consistent 
interpretations of the terms "mar gins of dumping" in Article 2.4.2 and "fair comparison" in 
Article 2.4.  There could be no doubt now that the use of "zeroing" was impermissible under the 
Agreement.  Specifically, the Appellate Body ha d found that when the transaction-to-transaction 
methodology in the first sentence of Article 2.4.2 w as used, the term "margins of dumping" described 
the full results of an aggregation of transaction- specific comparisons of export prices and normal 
values. The Appellate Body had concluded that in aggregating such comparison results:  "an 
investigating authority must consider the results of  all of the comparisons and may not disregard the 
results of comparisons in which export prices are ab ove normal values" (para. 122 of the AB Report).  
The Appellate Body had also found that the use of "zeroing" under the transaction-to-transaction 
methodology artificially inflated the magnitude of dumping and, therefore, did not meet the "fair comparison" requirement of Article 2.4, which called for calculations that were "impartial", 
"even-handed", and "unbiased".  Again, the Appellate Body's findings in this respect were clear and WT/DSB/M/219 
Page 16  
 
  cogent; they brought a further and welcomed unders tanding of the rights and obligations of Members 
under the Anti-Dumping Agreement.   
61. Finally, he said that Members might be aware that Canada and the United States had recently 
announced that an agreement had been reached to  resolve the Softwood Lumber dispute.  The 
agreement would result in the full revocation of the anti-dumping and countervailing duty orders and 
would offer stability and certainty for the Canadian softwood lumber industry.  In that sense, by 
clarifying their respective rights and obligations, the WTO dispute settlement mechanism had also functioned as a central element in bringing predicta bility and security to trading relations between 
Canada and the United States.  Canada requested that the DSB adopt the Panel and the Appellate 
Body Reports in this matter. 
62. The representative of the United States
 said that his country wished to thank the members of 
the Panel, the Appellate Body, and the Secretariat for their hard work.  In particular, the United States 
wished to convey special thanks to the two Pane l members who had worked on this dispute a second 
time by serving in this Article 21.5 proceeding.   As had been widely reported, and as the 
representative of Canada had just mentioned, on 1 July 2006 the US Trade Representative and the 
Canadian Trade Minister had initialled an agreemen t that would bring to an end this long-running 
dispute over softwood lumber trade.  On 22 Augus t 2006, Canada's Prime Mi nister had announced 
that a majority of support for the agreement from co mpanies in all regions had been obtained, and that 
the Government would proceed with implementation when Parliament reconvened in the fall.  The 
United States welcomed these developments.  The Un ited States looked forward to signing the lumber 
agreement and bringing it into force as soon as possible.  
63. The sole issue in this dispute was whethe r the US Department of Commerce had been 
permitted to use "zeroing" in an original anti-dumpi ng investigation, where it had determined margins 
of dumping using the transaction-to-transaction appr oach provided for in Article 2.4.2 of the 
Anti-Dumping Agreement.  The United States noted th at the Appellate Body had expressly stated that 
its findings to date had not addressed this issue.  The Panel, which included experts with extensive 
experience in administering trade remedy laws , had found unanimously that the Department's 
approach was consistent with the Anti-Dumping Ag reement.  The United States called attention to 
certain highlights of the Panel's careful, rigorous  analysis.  The Panel had begun its analysis, 
appropriately, with a careful examination of the re levant text in Article 2.4.2 of the Anti-Dumping 
Agreement.  In particular, it had distinguished th e text pertaining to the transaction-to-transaction 
approach to calculating dumping margins – which w as at issue here – from the text pertaining to the 
weighted-average-to-weighted-ave rage approach – which was not. 
64. Second, the Panel had carefully tested the imp lications of Canada's main textual argument: 
that the term "margin of dumping" – wherever th at term was used in Article VI of the GATT 1994 
and in the Anti-Dumping Agreement – necessarily referred to a single margin of dumping covering 
the entire universe of export transactions at issue in an investigation, as opposed to a 
transaction-specific margin.  The Panel had reviewed  various Articles in both agreements where the 
term "margin of dumping" was used and had demonstr ated that in those contexts the term could not 
possibly be construed to refer to the entire unive rse of export transactions involving the product at 
issue.  
65. Third, after engaging in a thorough textual an alysis, the Panel had proceeded to undertake an 
equally thorough analysis of context.  In par ticular, it had referred to the second sentence of 
Article 2.4.2, which pertained to the methodology for calculating dumping margins in the case of so-
called "targeted dumping".  It had posed the ques tion of how that methodology was distinguishable 
from the weighted-average-to-weighted-average methodology if, as Canada had argued, "zeroing" 
was never permitted.  It had demonstrated that neith er Canada nor any third party could answer that 
question. The Panel had also examined other elements  of context, demonstrating, for example, that  WT/DSB/M/219 
 Page 17 
 
 
  Canada's proposed interpretation of Article 2.4. 2 would yield anomalous results for prospective 
normal value systems for anti-dumping duty assessment.  The Panel's thorough a pproach to the text 
and context of Article 2.4.2 contrasted sharply w ith the approach reflected in the Appellate Body 
Report.  Thus, the United States regretted that it had to take this occasion to express its serious 
concern and disappointment with the Appellate Body Report.   
66. He said that the Appellate Body Reports coul d perform an important service for Members in 
helping to resolve disputes.  And a key aspect of that service was for the Appellate Body report to present its reasoning, findings, and conclusions in a clear and well-e xplained manner.  Unfortunately 
the Appellate Body Report in this dispute was disa ppointing in a number of respects.  The Appellate 
Body had reversed the Panel's findings, but its reas oning was absent, cursory, circular, or unclear in 
many places.  His authorities had instructed him to  comment in detail on some of the more troubling 
aspects of the Appellate Body Report. The Appella te Body Report had accepted that Members were 
permitted to determine the existenc e of dumping by comparing the nor mal value and export price of a 
product on a transaction specific basis.  However, the Appellate Body Report had gone on to find that 
the Anti-Dumping Agreement "suggests" and "implies"  that these comparisons must be aggregated.  
Furthermore, when aggregating these comparisons, the Appellate Body Report had found that the 
Anti-Dumping Agreement "suggests" that Members were required not just to aggregate those transactions involving dumping, but Members must include any non-dumped transactions as well, and 
use those non-dumped transactions to offset any dumping.  Based on these "suggestions" and "implications", the Appellate Body Report had co ncluded that the Anti-Dumping Agreement "does 
not admit an interpretation" that would allow th e use of "zeroing" when using transaction-specific 
comparisons in investigations.  The Appellate Bo dy had not explained how it had jumped from the 
"suggestion" and "implication" of the text to the cer tainty that the text did not permit of any other 
interpretation.  Normally one would think that if the text merely suggested or implied one 
interpretation, that another interpretation was also  possible.  Indeed, the Panel Report's careful and 
extensive analysis, a report by experts in the field, had demonstrated that the Anti-Dumping 
Agreement admitted more than one interpretation on th is issue.  Therefore, the Appellate Body Report 
was difficult to reconcile with the standard of re view specifically required under the Anti-Dumping 
Agreement.  
67. It might be helpful to consider more closel y the reasoning in the Appellate Body Report.  
What was the textual basis that the Appellate Body had used for requiring aggregation?  The text at 
issue was:  "the existence of margins of dumpi ng during the investigation phase shall normally be 
established . . . by a comparison of normal value and export prices on a transaction-to-transaction 
basis."  The Appellate Body Report had relied on the fact that the text used "export prices" in the 
plural, used "a comparison" in the singular, and us ed the term "basis".  That was it.  The text had 
never referred to aggregation.  The Appellate Body had not discussed the fact that the phrase "margins 
of dumping" was also in the plural, which would match up with the plural "export prices".  Nor had 
the Appellate Body discussed the fact that if one was comparing the normal value and export price for 
a single transaction, then necessarily this would be "a comparison" in the singular.  And the Appellate 
Body had engaged in no discussion of the flexibility inherent in the term "basis".  
68. And what was the textual basis for requiring that non-dumped transactions be included in any 
aggregation?  The Appellate Body had relied only on the fact that "export prices" was in the plural.  
Yet as the Panel had found, the term "export prices" did not answer the question as to whether 
aggregation could be only of dumped transacti ons or whether it must also include non-dumped 
transactions to offset any dumping.  The Appellate  Body's only additional response was that "export 
price" and "normal value" were sometimes "real values" and that allowing zeroing would result in 
"real values" being altered or disr egarded.  The United States had l ooked hard and coul d find nowhere 
in the text a reference to "real value".  Nor had the Appellate Body explained what was meant by that 
term or what the significance of this non-textua l concept might be.  Nor had the Appellate Body 
Report explained why, since the A ppellate Body had itself admitted that these were only sometimes WT/DSB/M/219 
Page 18  
 
  "real" values, that the fact that sometimes they we re "real value" and sometimes not meant that one 
must draw conclusions from the times that they may be "real".   
69. Even more perplexing was the reference to "real  values" being altered or disregarded.  The 
Appellate Body had not explained what it meant by this.  Indeed, there was no alteration of the normal 
value or export price if one aggregated dumped tr ansactions.  And there was no textual basis that 
required that non-dumped transactions be aggregated.  Interestingly, the Appella te Body Report in this 
dispute abandoned the "product as a whole" terminology used in prior reports such as "Zeroing": Complaint by the EC and Softwood Lumber V, and on which Canada had heavily relied.  Indeed, the 
Appellate Body Report had acted as though it had never relied on this concept in its past findings and 
the Appellate Body never referred to it in its ow n reasoning.  The Appellate Body had thus left 
Members wondering if the Appellate Body had disavow ed that concept, but did not want to tell 
Members, or if the concept still had force for the Appellate Body, but it would leave it to Members to 
guess how and in what circumstances.  This led to  the curious situation in which the Appellate Body 
had referred to the parties' arguments before the Panel and to the Panel's own reasoning, all addressed 
to the "product as a whole" concept, without recognizing or referring to that concept and appeared 
surprised that the arguments and reasoni ng were not focused on another concept. 
70. Without explanation, the Appellate Body ha d also abandoned the logic of its Softwood 
Lumber V report.  There, in considering the av erage-to-average methodology for determining the 
existence of margins of dumping, the Appellate Body  "emphasize[d]" that the terms "all comparable 
export transactions" and "margins of dumping" in  Article 2.4.2 of the Anti-Dumping Agreement 
"should be interpreted in an integrated manner".  Ye t, in its present Report, it had simply dismissed 
the fact that Article 2.4.2 did not use the term "a ll comparable export transactions" in connection with 
the transaction-to-transaction methodology as "not pertinent".  Consequently, one was now in a 
position in which the Appellate Body, over the course of  three disputes, had app eared to have offered 
three separate rationales for its fi ndings regarding "zeroing".  However, it had not reconciled any of 
these findings with one another.  Such an approach could not be said to contribute to the security and 
predictability of the dispute settlement system.   
71. The Appellate Body's approach to context was equally troubling.  As the United States had 
pointed out – and two expert panels had agreed – finding zeroing to be prohibited for transaction-to-
transaction comparisons would render the second senten ce in Article 2.4.2 redundant – clearly not an 
appropriate interpretive approach.  The Appellate Body had claimed that it had not found whether 
"zeroing" was prohibited under the average-to-trans action methodology.  But in making that assertion, 
the Appellate Body knew that later in its Report it had found "zeroing" to be inconsistent with the 
"fair comparison" requirement in Article 2.4 of the Anti-Dumping Agreement.  As the Panel had found, it was difficult to see how "zeroing" could be in consistent with the requirement to make a "fair 
comparison" while still being permissible under th e average-to-transaction comparison methodology.  
When the Appellate Body Report had referred to the mathematical equivalence argument in its 
discussion of Article 2.4, it had simply stated that it was not relevant "for the same reasons" as for 
Article 2.4.2.  Yet those reasons  under Article 2.4.2 did not take account of the findings on Article 
2.4.  In other words, the Appellate Body's reasoni ng was circular.  The Appellate Body had also given 
credence to hypothetical scenarios offered by Cana da and third participants  under which there would 
not be mathematical equivalen ce between the average-to-average methodology and the average-to-
transaction methodology.  However, unlike the Panel,  the Appellate Body had made no analysis of 
whether any of these scenarios was realistic. 
72. As another example of the US concern with th e Appellate Body's Report, the United States 
referred to its very brief discussion of the implica tions of its conclusion for prospective normal value 
systems.  As the United States had explained, if "zeroing" was prohibited under the transaction-to-
transaction methodology, then under a prospectiv e normal value system of duty assessment, an 
importer that paid duty on the basis of a dumped transaction could claim a refund on the basis of a  WT/DSB/M/219 
 Page 19 
 
 
  non-dumped transaction involving a different import er.  This was because Article 9.3.2 of the 
Anti-Dumping Agreement provided that the anti-dum ping duty paid under a prospective normal value 
system might not exceed the margin of dumping, and,  in the Appellate Body's view, the margin of 
dumping under the transaction-to-transaction approach must include offsets for non-dumped transactions. 
73. Rather than confront this issue, the Appellate  Body had simply dismissed it by saying that 
duty assessment and the determination of margin s of dumping were different processes and that, 
therefore, the former "has no bearing on the permis sibility of zeroing" under the latter.  That assertion 
had ignored the fact that by the terms of Article 9.3.2 of the Anti-Dumping Agreement, the margin of 
dumping was expressly linked to duty assessment under a prospective normal value system.  The 
margin of dumping served as a cap on the duty assessed.  It was for that reason that the Appellate 
Body's analysis would lead to the incongruous r esult of an importer of dumped product getting credit 
for another importer's import ation of non-dumped product. 
74. The Appellate Body Report's treatment of hist ory was also troubling.  For example, a Group 
of Experts report adopted by the Contracting Parties of the GATT 1947 had found that the ideal 
method of determining dumping would be on an i ndividual transaction basis.  This directly 
contradicted the finding of the Appellate Body Re port that a margin of dumping could not exist for a 
single transaction.  The Appellate Body's respons e?  "The Group of Experts Report dates back to 
1960."  No further explanation.  Why was the date  of the report relevant?  The Appellate Body Report 
had not stated if the date was relevant because it wa s too old or too recent or some other reason.  Was 
the Appellate Body saying that the ag e of the report had rendered it irrele vant, even if the relevant text 
had not changed since then?  Would the negotiating history for the Havana Conference be even more 
irrelevant because it was older? 
75. The United States was also concerned with the Appellate Body Report's statement that:  "It 
could be argued, on the contrary, that the use of zeroing under the two comparison methodologies set out in the first sentence of Article 2.4.2 would en able investigating authorities to capture pricing 
patterns constituting 'targeted dumpi ng', thus rendering the third methodology inutile."  The Report 
had failed to provide any explanation for this specu lation, nor had the report explored whether this 
was a credible argument rather than  simple rhetoric.  And this supposition was not even supported by 
the plain language of the text involved.  In fact, the third methodology said that it only applied where average-to-average or transaction-to-transaction comp arisons did not capture the targeted dumping.  
So the drafters had already anticipated that, in  at least some cases, transaction-to-transaction 
comparisons would capture targeted dumping, and Members were only permitted to use average-to-
transaction comparisons in the limited instances in which targeted dumping would not otherwise be captured.  The Appellate Body had not gone so far as  to speculate that the use of "zeroing" under the 
comparison methodologies in the first sentence of Ar ticle 2.4.2 would always capture pricing patterns 
constituting "targeted dumping".  To the extent they  would not capture such pricing patterns, the 
second sentence would remain effective, ev en under the Appellate Body's theory.  
76. Finally, the United States was also troubled th at the Appellate Body, for the first time, had 
made a finding that the application of "zeroing " was inconsistent with the "fair comparison" 
requirement of Article 2.4 of the Anti-Dumpi ng Agreement.  The Appellate Body's reasoning 
involved no textual analysis and, instead, seemed to be based on the view that "zeroing" was not "fair" 
if it resulted in a margin of dumping higher than  the margin that would have resulted absent 
"zeroing".  That approach to construing the term "fair comparison" found no support in the customary 
rules of interpretation of public international law.   The Appellate Body Report's reasoning on this 
issue was circular – it assumed the conclusion th at it had reached.  The Report had assumed that 
zeroing resulted in margins that  were "inflated" or "biased" because margins without zeroing would 
be lower.  Yet, if zeroing was permitted, th en how would margins derived from a permitted 
methodology be "inflated" or "biased"?  The use of these words indicated that the Appellate Body WT/DSB/M/219 
Page 20  
 
  Report had assumed that zeroing was disfavoured un der the Anti-Dumping Agreement, and then had 
found that because it was disfavoured, it was unfair and thus not permitted. 
77. The United States appreciated the patience of the Chairman and other delegations as it had 
articulated some of its concerns with the Appellate Bo dy Report in this dispute.  As it had stated at the 
outset, the United States felt it was important to lay these concerns out in light of the important 
service that Appellate Body Reports could provide.  C onsistent with the US substantial concerns with 
the Appellate Body's approach to the issue of " zeroing", the United States would continue to pursue 
this issue in each of the WTO fora available to it.  It concluded by say ing again that the United States 
was pleased that a mutually agreed solution to its  lumber dispute with Canada was in sight, and 
looked forward to informing the DSB of th at solution in the very near future. 
78. The representative of Hong Kong, China
 said that her delegation wished to thank the 
Appellate Body, the Panel and the Secretariat for their work on this case.  Hong Kong, China was 
pleased to note that the Appellate Body had found th at the practice of "zeroing" was inconsistent with 
the requirement to make "fair comparison" in Ar ticle 2.4 of the Anti-Dumping Agreement, and once 
again had ruled that this practice was contrary to th e requirements of Article 2.4.2.  More importantly, 
this was the first time the Appellate Body had rule d against the use of "zeroing" under transaction-to-
transaction comparison methodology.  Together with th at ruling, the Appellate Body had decided that 
"zeroing" should be prohibited in the two comparison methodologies that should normally be used under Article 2.4.2, and in the case of duty assessment  under administrative review.  The growing list 
of adverse WTO rulings against the use of "zeroing"  confirmed its WTO-incons istency.  The practice 
of zeroing had long been a problem causing grave concern to many Members.  Such practice distorted 
the price comparison under Article 2.4.2 and violated the requirement of "fair comparison" under 
Article 4.  The present findings of the Appellate Body were most useful in further clarifying that the 
use of "zeroing" was inconsistent with the An ti-Dumping Agreement and, therefore, should be 
prohibited.  Hong Kong, China urged the Unite d States to implement the DSB's rulings and 
recommendations, and to bring its dumping calcu lation methodology into conformity with the 
Anti-Dumping Agreement.  Also, her delegation invited other WTO Members to examine their 
present rules and practices on dumping margin calculati ons and to eliminate the use of "zeroing".  
Hong Kong, China supported the adoption of the Report  of the Appellate Body and the Report of the 
Panel  as modified by the Appellate Body.  
79. The representative of Japan
 said that, at the outset, his country wished to express its 
appreciation to the Appellate Body and its Secretar iat for their time and energy dedicated to producing 
this comprehensive and well-reasoned Report.  At the present meeting, Japan would not repeat its 
well-known position on the issue of the WTO-consiste ncy of the US "zeroing" methodology.  Instead, 
Japan wished to confine its remarks to a few obser vations regarding this Re port of the Appellate Body 
in this case.  First, the Appellate Body Report had properly reversed the Pane l's finding and, instead, 
had concluded that the application of "zeroing"  in transaction-to-transaction comparison in the 
investigation under the Section 129 Determination was inconsistent with Article s 2.4.2 and 2.4 of the 
Anti-Dumping Agreement.  In the previous cases, the Appellate Body had ruled that the "zeroing" 
methodology as used in weighted-average-to-weight ed-average comparison in investigations as well 
as zeroing applied in weighted-average-to-tran saction comparison in duty assessment reviews were 
inconsistent with the Anti-Dumping Agreement.  Th e Appellate Body's finding in this Report within 
the context of the transaction-to-transaction co mparison further confirmed that "zeroing" was 
generally prohibited under the Anti-Dumping Agreement. 
80. Second, the United States had fiercely criticized  the Appellate Body's Report in the case:  
"United States – Laws, Regulations and Met hodology for Calculating Dumping Margins" 
(WT/DS294/AB/R), claiming that the Appellate Bo dy had failed to address important contextual 
arguments that the United States had presented and that the Appellate Body's reasoning was fatally  WT/DSB/M/219 
 Page 21 
 
 
  flawed.4  Perhaps, partly in response to these serious  allegations, in this Report the Appellate Body 
had addressed each and every argument presented by the United States in its defense, had carefully analyzed them, and had come to sound and well-re asoned findings and conclusions.  Japan considered 
that the quality of this Report belied the accusation by the United States of the deficiency in the 
Appellate Body report in DS294.  Japan strongly su pported the adoption by the DSB of the Appellate 
Body Report (WT/DS264/AB/RW) and the Panel Report (WT/DS264/RW). 
81. The representative of Korea
 said that his country welcomed the Appellate Body Report 
wholeheartedly and praised its correct judgment whic h had rectified the Panel's misinterpretation of 
the Anti-Dumping Agreement.  In this case, the Pa nel had hastily jumped into the conclusion that 
zeroing was permitted in the so-called transaction-to-t ransaction comparison, because first, neither the 
Anti-Dumping Agreement nor Article VI of GA TT 1994 expressly required calculation of dumping 
margin on "a product as a whole" basis, and sec ond, transaction-to-transaction comparison was not 
qualified by the phrase "all comparable export tran sactions" in Article 2.4.2 of the Anti-Dumping 
Agreement.  However, Korea believed that the Pa nel had disregarded the fact that the dumping 
margin was clearly inflated when zeroing was applied,  and that this was diametrically opposed to the 
fair comparison obligation.  The Panel had also ignored that the dumping margin was a magnitude of 
dumping and that the dumping margin was a ceiling that anti-dumping duty could not exceed.  Korea was relieved that such narrow and inconsistent interpretations of th e panel were neatly corrected by 
the Appellate Body. 
82. Undoubtedly, Korea believed that the Report woul d be remembered and cited frequently as an 
important reference on how to treat the troublesome, but die-hard practice of so-called "zeroing".  
This Report,  once again,  had made it clear that the "zeroing" practice was not in line with the basic 
elements of anti-dumping, in particular, the overa rching obligation of fair comparison.  It was 
regrettable that the "zeroing" method was still being used by some Members despite repeated 
condemnation by the Panel and the Appellate Body.  Korea hoped that the judgment and logic of the 
Appellate Body in this case would be respected a nd supported in the similar on-going cases so that the 
"zeroing" practice should cease to exist as soon as possible. 
83. While welcoming the Appellate Body report in general, Korea wished to comment on some 
points where the Appellate Body could have been mo re precise.  The Appellate Body had rejected the 
Panel's argument on the so-called prospective normal value system, by cursively saying that the Panel 
had confused duty collection with determination dumping margin.  Korea understood that what the 
Panel had argued about was not the nexus between dut y collection and determination of final margin 
of dumping.  Rather, it had used the prospective normal value system as an example that dumping 
margin was not always calculated on a "product as a whole" basis.  Certainly, in the prospective 
normal value system, the dumping margin was calcula ted on an individual basis, not "product as a 
whole" that were transacted during the period of in vestigation.  Of course, this did not justify the 
"zeroing" method in transaction to transaction comparison in the case at hand.  However, since the 
core question of this case was whether dumping margin  must be calculated on a "product as a whole" 
basis or individually, and the Panel took PNV system as an example of individual calculation, the Appellate Body should have clarified its reasoni ng in a more detailed manner on the implication of 
PNV system with regard to the principle of dumping margin calculation for a product as a whole. 
84. The Appellate Body had not responded to the argumen t made by one of the third party.  This 
party had argued that zeroing would be permitted in the transaction-to-transaction comparison if there 
were symmetry between the dumping and injury/causa tion analyses.  In other words, it had argued 
that this kind of "zeroing" was allowed only if dum ped transactions were considered as part of the 
                                                     
 
4 See the communications from the United States contained in documents:  WT/DS294/16 and 
WT/DS294/18. 
 WT/DSB/M/219 
Page 22  
 
  injury/causation analysis.  The Appellate Body had bluntly not addressed this issue saying that it was 
irrelevant to this case.  Given the importance of the prohibition of "zeroing", the Appellate Body 
should have delved into this symmetry argument in or der to close any slight possibility that "zeroing" 
would be continued despite the WTO jurisprudence that prohibited "zeroing". 
85. The representative of the European Communities
 said that the EC was grateful to the 
Appellate Body for having reversed the Article 21. 5 Panel's findings, thus confirming that "zeroing" 
in the context of a "transaction-to-transaction" comparison was WTO-inconsistent.  The Appellate 
Body had maintained a consistent and coherent line on this issue, and the EC considered that any 
possible ambiguity on the matter of "zeroing" had now been removed.  In several cases, the Appellate 
Body had ruled that "zeroing" in original inves tigations, whether the weighted-average-to-weighted-
average or transaction-to-transaction comparisons we re used, was WTO-inconsistent.  It had also 
found the same for "zeroing" in reviews.  In add ition, it had confirmed that "zeroing" was in these 
situations "unfair", in that it did not constitute a fair comparison in the sense of being "impartial, even-
handed or unbiased".  The EC of course had a direct  interest in this matter, as indeed many other 
Members,  and was now awaiting US implementa tion of the results of its own "Zeroing" case 
(DS294) against the United States.  The EC trusted that the outcome of the softwood lumber case  
would make it crystal clear to the United States that  "the game is up" as regards "zeroing", and that 
the only way of meeting its WTO obligations w as to abandon this practice in both original 
investigations and reviews. 
86. The representative of Thailand  said that his country wished to thank the Panel, the Appellate 
Body and the Secretariat for their work on this case,  and wished to warmly welcome the findings and 
conclusions of the Appellate Body in its Report. Th ailand had participated as a third party in this 
dispute as a result of its long-standing concern about the use of the "zeroing" methodology in anti-dumping proceedings.  In Thailand's view , the "zeroing" methodology utilized by the 
United States was inconsistent with both the spirit and the substance of Article VI of GATT 1994 and 
the Anti-Dumping Agreement.  Indeed, the Anti-Du mping Agreement, in particular Articles 2.4.2 
and 2.4, did not permit the use of "zeroing" in any circumstance, be it with an average-to-average or 
transaction-to-transaction methodology.  Thailand, ther efore, fully agreed with the Appellate Body's 
findings and conclusions in this dispute.  In pa rticular, Thailand welcomed the Appellate Body's 
finding that the "fair comparison" requirement in Article 2.4 of the Anti-Dumping Agreement was an overarching obligation informing those that were  more specific under that provision, such as 
Article 2.4.2.  Thailand also believed that the Repor t served as a timely reaffirmation by the Appellate 
Body of its recent ruling in the case: "United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins", in which it had re cognized the intrinsic unfairness of the "zeroing" 
practice without differentiating betwee n different types of "zeroing".  In this regard, Thailand agreed 
with the Appellate Body's finding that the use of " zeroing" was "difficult to reconcile with the notions 
of impartiality, even-handedness, and lack of bias reflected in the 'fair comparison' requirement in 
Article 2.4". 
87. The representative of Canada
 said that his delegation had not had a chance to review the US 
statement made at the present meeting and, accordi ngly, it would forward it to capital for further 
consideration.  If necessary, Canada would comment on the US statement at a later date.  At this 
point, he wished to note three points.  First, the United States appeared to be re-litigating this case 
before the DSB.  And, in doing so, it had taken so me of the Appellate Body's statements out of 
context.  For example, the Appellate Body did not simply dismiss the 1960 Group of Experts Report 
out of hand on the basis that it had been drafted in 1960.  Rather, the Appellate Body had noted that it 
had dealt with these same arguments before in the original case.  Moreover, the Appellate Body had 
noted that the "United States acknowledged that the historical materials did not constitute 'travaux 
préparatoires'" and that these Reports had been made long before the entry into force of the 
Anti-Dumping Agreement.  Second, he wished to turn  to the United States' "textual" critique of the 
Appellate Body Report.  What the United States had proposed in this case and continued to assert  WT/DSB/M/219 
 Page 23 
 
 
  now: that the phrase "margins of dumping" could have  two different meanings in respect of the two 
primary methodologies set out in the first sentence of Article 2.4.2.  The Appellate Body had found the proposition  intellectually and systemically unte nable.  Third, the United States had continued to 
assert its position in respect of the interpretive value as "context" of the WA-T methodology.  What was this argument?  Simply that an exceptional methodology provided for in the second sentence of 
Article 2.4.2 defined the scope of the primary methodol ogy in the first sentence of Article 2.4.2.  In 
support of its argument, the United States had propo sed hypotheticals that it had never tested.  That 
was, the United States had argued, and still continue d to argue, that the obligations of Members under 
Article 2.4.2 were to be determined on the basis of the scope of an untested exception.  The Appellate 
Body had appropriately found that such reliance was incorrect from an interpre tative perspective.  It 
had also found that the US argument in this respect  had been premised on an "untested hypothetical".  
88. The DSB took note
 of the statements, and adopted  the Appellate Body Report contained in 
WT/DS264/AB/RW and the Panel Report contained in  WT/DS264/RW, as reversed by the Appellate 
Body Report 
8. Proposed nominations for the indicative list of governmental and non-governmental 
panelists (WT/DSB/W/328) 
89. The Chairman  drew attention to document WT/DSB /W/328, 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 th e DSU.  Unless there was any obj ection, he wished to propose that 
the DSB approve the names contained in document WT/DSB/W/328. 
90. The DSB so agreed . 
9. Swearing-in ceremony of the newly appointed Appellate Body member 
(a) Statement by the Chairman 
91. The Chairman , speaking under "Other Business", said that as he had announced at the outset 
of the meeting, he wished to in form delegations that the swearing- in ceremony of the newly appointed 
Appellate Body member Mr. David Unterhalter woul d be held on Thursday, 28 September 2006 at 6 
p.m. in the Salle des Pas Perdus at the WTO.  He said that all delegations were cordially invited to 
attend the ceremony. 
92. The DSB took note  of the statement. 
__________