RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/258 
4 February 2009 
 (09-0500) 
Dispute Settlement Body 
14 November 2008  
 
 
   
MINUTES OF MEETING 
 
Held in the Centre William Rappard
 
on 14 November 2008  
 
Chairman:  Mr. Mario Matus (Chile) 
  
Subjects discussed
: Page  
 
1. United States – Continued suspension of obligations in the EC - Hormones 
dispute........................................................................................................................ ................1  
(a) Report of the Appellate Body and Report of the Panel...............................................................1  
2. Canada – Continued suspension of obligations in the EC - Hormones dispute ................15  
(a) Report of the Appellate Body and Report of the Panel.............................................................15  
3. Statement by the Chairman regarding some matters related to 
the Appellate Body............................................................................................................. .....18  
 
 1. United States – Continued suspension of obligations in the EC - Hormones dispute 
(a) Report of the Appellate Body (WT/DS320/AB /R) and Report of the Panel (WT/DS320/R) 
1. The Chairman
 drew attention to the communication from the Appellate Body contained in 
document WT/DS320/15 transmitting the Appellate Body Report on:  "United States – Continued 
Suspension of Obligations in the EC - Hormon es Dispute", which had been circulated on 
16 October 2008 in document WT/DS320/AB/R, in acco rdance with Article 17.5 of the DSU.  He 
reminded delegations that the Appe llate Body Report and the Panel Re port pertaining to this dispute 
had been circulated as unrestricted documents.  As Members were aware, Article 17.14 of the DSU required that:  "An Appellate Body report sha ll be adopted by the DSB and unconditionally accepted 
by the parties to the dispute unless the DSB decid es by consensus not to adopt the Appellate Body 
report within 30 days following its circulation to  Members.  This adoption procedure is without 
prejudice to the right of Members to express their views on an Appellate Body report."  
2. The representative of the European Communities
 said that, first of all, the EC wished to thank 
the Appellate Body and its Secretariat for their work on this dispute.  The decision in this dispute was 
among the most important rulings that the Appellate Body had handed down thus far.  The EC wished 
to commend the members of the Appellate Body fo r their readiness and courage to engage in the 
difficult and complex questions raised by this case,  which mattered not only to the EC but, the EC 
believed, to a great number of WTO Members.  If one considered where the parties now stood and the WT/DSB/M/258 
Page 2  
 
  fact that the EC had launched this dispute four years ago, the situation might be considered not 
entirely satisfactory:  US and Canadian sanctions  continued to hit EC exports during this entire 
period, even though the EC had been claiming th at it had achieved WTO compliance, a claim the 
validity of which had been strengthe ned considerably through the Appe llate Body Reports.  It was in 
this sense that the EC was quite satisfied with some  of what this dispute had achieved.  The Appellate 
Body had rectified many serious legal errors whic h the Panel had committed in the interpretation and 
application of the SPS Agreement.  This was an  important improvement for all WTO Members and 
their ability to protect the health of their citizens also in situations of scientific uncertainty or 
controversy.  The Panels' highly troubling approach to these questions, both in terms of procedure and 
substance, could not stand from the EC's point of view as well as from the point of view of the 
credibility of the WTO system.  The Appellate Body had provided very useful clarifications regarding 
what panels were and we re not entitled to do.   
3. First, they must not, as they had done in th is case, appoint scientists whose independence and 
impartiality was likely to be affected.  Indeed, as special as the circumstances of this case might be, 
the EC believed that it was important for all WTO Me mbers to know that they might disagree with the 
scientific assessment underlying an internationa l standard and not have to face the very same 
scientists who had provided that assessment as the Pa nel's advisors in a subsequent dispute over their 
own assessment.  Furthermore, panels must not , as they had done in this dispute, conduct a de novo  
review nor decide what th ey considered to be the best science.  Rather, they must determine whether a 
risk assessment was supported by coherent reasoning  and respectable scientific evidence and in that 
sense objectively justifiable.  It did not matter whet her that scientific evidence was reflecting only a 
minority view nor did it matter if the experts advisi ng the panel were of a different personal opinion.  
A further clarification was that panels must not, as they had done in this case, adopt too narrow a 
concept of risk assessment in the SPS Agreement and,  therefore, summarily dismiss evidence that was 
relevant, like in this case on misuse or abuse.  Furthe rmore, panels must not interpret Article 5.7 of 
the SPS Agreement in such a way as to ignore genuin e situations of scientific uncertainty, namely, 
where there was new evidence that called into ques tion the results of previous risk assessments.  
Indeed, panels must not develop high and inflexible th resholds for the application of Article 5.7 of the 
SPS Agreement, merely because at some point in the past, an international standard had been 
formulated based on the then available information.   
4. Finally, panels must not wrongly allocate th e burden of proof under the SPS Agreement on 
the party having adopted an SPS measure, when th is burden should be on the party asserting an SPS 
breach.  Several of these legal errors of the panels were similar to those which the Appellate Body had 
corrected in its Report in the " EC - Hormones " dispute in 1998.  The EC, therefore, hoped that future disputes would not force parties to repeat that kind of experience, but rather that the important and 
pertinent clarifications of the Appellate Body woul d be followed in order to resolve this long-running 
dispute in a legally sound way.  In contrast to the Appellate Body's findings regarding the SPS-
compatibility of the EC's hormones ban, the EC wa s less somewhat satisfied and convinced by the 
Appellate Body's reversal of the Panels' ruling th at the continued US and Canadian sanctions were 
illegal.  The EC found convincing the Panels' explana tion that the US and Cana da had determined that 
the EC's new hormones ban was WTO-incompatible a nd that, in reality, they were seeking redress on 
that basis.  The EC also had doubts about the Appellate Body's finding that Article 22.8 of the DSU permitted sanctions to continue not only until WT O-compliance was actually achieved, but also 
beyond this point, namely, until that compliance was established in a WTO dispute.  From a policy 
point of view the EC, however, could accept this , as was evidenced by th e proposals under discussion 
in the DSU negotiations, including the EC's proposal.    
5. The procedures which the Appellate Body had set  out for a post-retaliation compliance review 
promised to be workable for the future.  In contr ast to the past uncertainty in this relation, the 
Appellate Body's ruling could be expected to ensu re that a retaliating Member could not remain 
passive.  It could not refuse to participate wh en the implementing Member initiated a compliance  WT/DSB/M/258 
 Page 3 
 
 
  review after adopting a compliance measure.  When th e EC had launched this dispute, it had done so 
with the intention of resolving it once and for all.  The EC accordingly was ready to put everything on 
the table, including if necessary the question of the S PS-compliance of its new hormones directive.  It 
was unfortunate that no final resolution could be achieved thus far, although  the Appellate Body's 
ruling was a big step forward for the parties.  Th e EC hoped that the resolution of this long-standing 
dispute was now in sight.   
6. The representative of the United States  said that his country would like to begin by thanking 
the Panel, the Appellate Body and the Secretariat fo r their hard work on this complex dispute.  The 
United States would like in particular to recognize  that the hearings in these proceedings were 
historic:  they were the first ever of their kind to be open to all WTO Members and the public.  The 
United States thanked the Panel a nd the Appellate Body for agreeing to open the hearings.  Members 
would know that, as of now,  there had been 15 heari ngs that had been partially or completely open in 
10 disputes.  Those open meetings were a valuab le opportunity for all WTO Members, as well as 
those outside the WTO, to understand better the WTO dispute settlement system.  It was the decisions 
taken in this dispute that paved the way for this record of success, and the United States wished to 
express its appreciation to this Panel and to the A ppellate Body for their willingness to take these first 
steps.  The United States would also like to express its thanks to all the various members of the Secretariat who had contributed to making sure that the open meetings ran smoothly.  
7. Turning to the substance of the Reports, th e United States was pleased that the Appellate 
Body had corrected the Panel's findings on Article 23 of the DSU.  The Appellate Body's analysis on 
this matter was sound.  The United States particularly  welcomed the Appellate Body's finding that the 
United States was not seeking redress of a violation by continuing its suspension of concessions after 
the EC had claimed to have come into compliance.   Furthermore, the United States believed that – 
from a WTO institutional perspective – Members shoul d take great comfort that the Appellate Body 
had concluded that statements made by the United St ates and Canada at meetings of the DSB did not 
constitute "determinations" under Article 23.2(a) of the DSU.  The United States was, however, 
disappointed that the Appellate Body had found that it was unable to complete the analysis on the 
consistency of the EC's revised hormones ban w ith the requirements of the SPS Agreement.  The 
Panel and the parties had invested over three year s of diligent effort in examining the scientific 
underpinnings of the EC's revised ban, and the Unit ed States continued to believe that the Panel's 
conclusions were sound. 
8. The United States also wished to take this opportunity to bring to Members' attention certain 
aspects of the Appellate Body's Report that were de eply troubling from a systemic standpoint.  In its 
Report, unfortunately, the Appellate Body had u ndertaken unnecessary analyses of provisions of the 
DSU and invented rules, procedures, and even obliga tions that were simply not present in the DSU.  
The United States referred Members to the communication that it had circulated that explained the US concerns in more detail.
1  At the present meeting, the United States would summarize concerns on 
four issues:  (i) the process for resolving post-sus pension disputes, (ii) the standard for experts' 
"independence and impartiality", (iii) the approach to certain SPS claims, and (iv) the "recommendation" in the report. 
9. First, on the process for resolving post-suspe nsion disputes, it was widely acknowledged by 
Members that the DSU lacked specificity on the process by which an implementing Member subject to the DSB-authorized suspension of concessions that claimed it had achieved compliance might 
obtain relief from that suspension.  Members had spent several years negotia ting a process for such a 
situation, but had not yet achieved consensus.  In its Report, however, the Appellate Body had made a 
number of statements that were to be found nowher e in the DSU.  For example, the Appellate Body 
                                                     
 
1 WT/DS320/16. WT/DSB/M/258 
Page 4  
 
  had stated that Article 21.5 compliance panel pro ceedings were the only pr ocedure to be followed
2 for 
resolving post-suspension disputes – ignoring the fact that this very appeal was from a regular panel 
proceeding considering a claim under Article 22.8 of the DSU.  In addition, the Appellate Body had 
said that either an original respondent or an or iginal complainant must initiate compliance panel 
proceedings without delay3 once a claim of complia nce was made, which should be of tremendous 
concern to any Member that might consider its res ources could be limited at any point in the future.  
As a further example, the Appellate Body had al so said that an original responding party and an 
original complainant might each bring its own, separate compliance panel proceedings and the two 
proceedings could be harmonized and would somehow  result in a review of all the issues.  The 
Appellate Body had also set forth fairly intricate rules on how the burden of proof would be allocated 
and shifted in such a situation.  None of this could be found anywhere in what Members negotiated 
during the Uruguay Round.  Nor, for that matter, had any Member proposed that approach during the 
negotiations over clarifying and improving the DSU.   It was difficult to understand the Appellate 
Body's findings on this matter to be anything other th an rule-making.  That role, however, belonged to 
Members – not to panels or the Appellate Body.  Even aside from the lack of authority for these 
findings, the Appellate Body's rules posed numerous problems.  The Appellate Body's thinking would 
have benefited from an opportunity to review its ideas with the parties to the dispute before enshrining 
them in its Report.   
10. The US second point was on standards for expe rts' "independence and impartiality".  The 
United States was concerned with the Appellate Bo dy's approach to the selection of experts who 
advised dispute settlement panels.  The US concerns  had been expressed at some length in its written 
communication.  At the present meeting, the United States would simply note that panels that were 
aware of experts' prior involvement in related matt ers should be able to take that into account in 
evaluating the weight to assign the advice provided by the experts.  Indeed, most if not all of the facts in a dispute were presented by one or the other of the parties to the dispute, and each party clearly had 
a stake in the outcome of the dispute.  However, th e fact that a panel or the Appellate Body had relied 
on a fact provided by one of the parties did not mean that the panel's or the Appellate Body's 
independence and impartiality was compromised.  Nor had the Appellate Body explained why a 
"likely" doubt as to the independence and impartialit y of an expert meant that the independence and 
impartiality of the Panel was necessarily compromised. 
11. Third, on the approach to certain SPS claims, th e United States said that with respect to the 
Appellate Body's findings and conclu sions related to the Panel's standa rd of review and interpretation 
of the requirements of Articles 5.1 and 5.7 of th e SPS Agreement, the United States also had some 
concerns that the Appellate Body's Report could be misconstrued as loosening the disciplines of the 
SPS Agreement that were aimed at ensuring that SPS measures adopted by Members were 
scientifically justified and not disguised restrictions on trade.  
12. Finally, on the "recommendation" in the Report, the United States said that another troubling 
aspect of the Appellate Body Report was the fact th at the Appellate Body ha d concluded its Report by 
apparently making a recommendation that was addressed to both the United States and the EC.  Members had authorized panels and the Appellate Bo dy to make recommendations in only one place:  
Article 19.1 of the DSU.  That Article provided that  a panel or the Appellate Body was authorized to 
issue a recommendation in one circumstance:  where it had concluded that a me asure within the terms 
of reference of the proceeding was inconsistent w ith a covered agreement.  In this appeal, the 
Appellate Body had not concluded that there was an y measure that was inconsistent with a covered 
agreement.  The Appellate Body had no auth ority, therefore, to make any Article 19.1 
recommendation in this appeal.  A further di fficulty with reading the Appellate Body's 
"recommendation" as intending to have the legal status of a recommendation under Article 19.1 was 
                                                     
 
2 WT/DS320/AB/R, para. 345. 
3 WT/DS320/AB/R, para. 737.  WT/DSB/M/258 
 Page 5 
 
 
  that it was addressed not only to the responding party, but also to the EC, the complaining party.  
There was no basis in the DSU for addressing a reco mmendation to a complaining party.  The use of 
the term "recommend" by the Appellate Body4 must, therefore, be interpreted as an ill-considered 
word choice, as any other reading would be contrary to the DSU.  In fact, were Members to believe 
the Appellate Body attempted to make an Article  19.1 recommendation in this dispute, Members 
would have no choice but to consider that the Appellate Body had ignored and acted outside its 
authority under the DSU.  
13. In conclusion, some parts of the Appellate Body  Report were solid and well-reasoned, such as 
its approach to the request by the parties to open hearings and its rejection of the argument that a 
unilateral claim of compliance could have legal c onsequences for a DSB authorization to suspend 
concessions.  Other parts of the Report, however, rai sed significant concerns, not only in the context 
of this dispute, but in terms of whether the dispute settlement system would function as agreed by Members.  The United States encouraged all to consider  the concerns raised in this statement, and in 
the US written communication, and would be pl eased to discuss them further with Members. 
14. The representative of Canada
 said that under the next Agenda item, his country would express 
views on the parallel dispute in DS321.  For now, Ca nada would like to simply thank the Appellate 
Body, the Panel and Secretariat for their work and noted that Canada shared many of the concerns 
raised by the United States.  
15. The representative of Ecuador  said that his country's statement to be made under this Agenda 
item also referred to the next Agenda item.  Ec uador wished to express its serious systemic and 
practical concerns regarding the Appellate Body's  recommendation contained in paragraph 737 of the 
two Reports, that the DSB should request the parti es to initiate proceedings under Article 21.5 of the 
DSU without delay in order to resolve their disagreement as to whether the EC had removed the measure found to be inconsistent in the " EC - Ho rmones " dispute and whether the application of the 
suspension of concessions by the United States and Ca nada remained legally valid.  First of all, it 
would appear that there was no legal basis for a recommendation under Article 19 of the DSU, nor 
one could see how a complaining party whose measure  had not been complained against could be the 
subject of a final recommendation in a dispute.  Se cond, Ecuador agreed with the Appellate Body's 
conclusion that a Member could not unilaterally decl are that a measure, that had been brought into 
force, complied with the DSB's recommendations without first being subjected to the dispute settlement mechanism test.  However, Ecuador  was concerned that the Appellate Body's 
recommendation might give rise to new delaying tactics by the Member that was obliged to withdraw 
the inconsistent measure.  This was a particular ly sensitive point in disputes between a developed 
country Member and a developing country Member, where the authorization to suspend concessions 
or other obligations did not have the desired eff ects when applied by a developing country Member. 
16. The representative of Brazil
 said his country considered that the Reports to be adopted at the 
present meeting had significantly contributed to the enhancement of the WTO dispute settlement 
system.  First and foremost, in its findings about Article 22.8 of the DSU, the Appellate Body had 
succeeded in undertaking a work of legal interpre tation that was able both to provide a positive 
solution to the dispute before it and to bring more cl arity to systemically important WTO rules.  As a 
third party to this dispute, Brazil had argued that th e issue of the so-called "post-retaliation" could be 
resolved within the framework of the text of the DSU provided that the relevant rules, particularly 
Articles 21.5 and 22.8, were construed correctly.  Therefore, Brazil was glad to recognize that the 
reasoning and the findings of the Appellate Body c oncerning "post-retaliation" were, by and large, 
guided by an approach similar to the one supporte d by Brazil in the proceedings and elsewhere.  
Specifically, Brazil welcomed the clear findings of the Appellate Body on th e need for a multilateral 
determination of compliance for measures taken wh en a suspension of concessions was in place, on 
                                                      
4 WT/DS320/AB/R, para. 737. WT/DSB/M/258 
Page 6  
 
  the legality of the continuation of this suspension until the authorization based on which it had been 
imposed was multilaterally revoked, on the possibilit y of access to Article 21.5 proceedings by either 
party in a dispute, on the burden of proof in this stage of a dispute and on the proper way to structure the request for the establishment of a panel under the Article 21.5 of the DSU.  In conclusion, Brazil 
wished to point out that the Appellate Body's findings on Articles 5.1 and 5.7 of the SPS Agreement 
should not be regarded as lowering the standards that  SPS measures must meet to be WTO-consistent.  
The standard clarified by the Appellate Body w as one that allowed Members to pursue legitimate 
policy objectives while preventing the adoption of measures that lacked scientific grounds. 
17. The representative of Mexico
 said that his delegation wished to make a few comments 
concerning the recommendation of the Appellate Body  contained in paragraph 737 of its Report.  
Mexico considered that that recommendation w as not a typical recommendation under Article 19 of 
the DSU and its application should be restricted  to specific facts of disputes DS320 and DS321.  
However, Mexico also considered that while this was not a typical recommendation if it were adopted 
by the DSB it would be consistent with Article 3.4 of the DSU, which stated that "[r]ecommendations 
or rulings made by the DSB shall be aimed at achieving a satisfactory settlement of the matter in 
accordance with the rights and obligations under [the DSU] and under the covered agreements".  
Thus, if one were to take the Appellate Body's suggestion, the fairest way of settling the dispute 
between Canada, the United States on the one hand and the EC on the other would be to submit the 
matter before an Article 21.5 panel.  Therefore, such a recommendation should be considered in light 
of the specific facts of those disputes and, in Me xico's view, should not set a precedent for future 
cases. 
18. The representative of Japan  said that the Appellate Body Report had addressed, and had made 
findings on, a number of issues raised in this disput e regarding the operation of the DSU that were of 
great systemic interests to all Members including Jap an.  Although Japan was not a third party in this 
dispute, it wished to offer a couple of very prelimin ary observations.  First, after the thorough analysis 
of the text, context and the object and purpose of the DSU, the Appellate Body had properly 
concluded that the resolutive conditions for the termination of the suspension of concessions under 
Article 22.8 required "substantiv e compliance" or "a final  and substantive resolution of the dispute"5 
and in the case of disagreement "the fulfillment of the [condition] cannot be confirmed unless the 
disagreement is resolved throug h multilateral dispute settlement".6  As found by the Appellate Body, 
"the mere existence of an implementing measure a dopted in good faith doesn't require the termination 
of the authorized suspensions of  concessions under Article 22.8".7 
19. Second,  Japan agreed with the Appellate Body that recourse to Article 21.5 was "a proper 
course of action"8 for resolving disagreement as to whethe r "substantive compliance" was achieved 
and, consequently, whether the resolutive condi tion for the termination of suspension under 
Article 22.8 was fulfilled.  As the Appellate Body ha d explained, the recourse to Article 21.5 of the 
DSU "keeps the successive proceedings relating to th e same dispute within a 'continuum of events'"9 
and "a more efficient use of the dispute settlement system".10  However, the Appellate Body also 
appeared to find that the types of disputes specifi ed in Article 21.5 of the DSU must be resolved 
through recourse to the proceedings envisaged in that provision.11  Did this mean that, in the Appellate 
Body's view, Article 21.5 proceedings were the exclusive  procedural avenue available to resolve the 
disagreement over the issue of compliance?  The Appellate Body had elsewhere ruled that the Panel 
                                                      
5 See e.g. Appellate Body Report, paras. 304-309. 
6 Appellate Body Report, para. 306. 
7 Appellate Body Report, para. 318. 
8 See e.g. Appellate Body Report, paras. 338 and 345. 
9 Appellate Body Report, para. 342. 
10 Appellate Body Report, para. 343. 
11 Appellate Body Report, paras. 336 and 341.  WT/DSB/M/258 
 Page 7 
 
 
  in this dispute, not initiated under Article 21.5 of the DSU, had jurisdiction to decide on the 
consistency of the implementing measure with the SPS Agreement,  indicating that the ordinary dispute 
settlement proceedings were also available as a proper procedural avenue.  Japan wished to know how to reconcile these two conflicting findings. 
20. Third, the Appellate Body had found that the responding party in the original dispute was not 
precluded from initiating Article 21.5 proceedings.  That finding would beg further practical 
questions.  As an initial matter, although in this pa rt of the Report the Appellate Body had focused its 
analysis on the post-suspension  stage, many of rationales developed by the Appellate Body appeared to be 
applicable to the pre-suspension stage.  The quest ion would thus arise as to whether the original 
respondent was entitled to initiate Article 21.5 pr oceedings and, if so, what would be the practical 
implication for such reading of Article 21.5 of the DSU.  Japan also wondered whether the scope of  
an Article 21.5 panel initiated by the original resp ondent would always be sufficiently broad enough 
to decide as to whether substantive complian ce had been achieved.  The Appellate Body had 
recognized that the original respondent could not sp eculate every possible violation.  The Appellate 
Body had further explained that the original complainant "may file its own request" for an 
Article 21.5 panel, identifying the pr ovisions that it had considered to be breached, as soon as possible 
and these proceedings initiated both by the respo ndent and complainant would be eventually 
merged.
12  The Appellate Body had further found elsewher e, in analyzing the scope of the terms of 
reference of the Panel in this dispute, that a lthough the EC, the original respondent, did not list 
Articles 5.1 and 5.7 of the SPS Agreement  in its panel request, these provisions were within the 
mandate of the Panel.13  The Appellate Body had reached this conclusion because:  (i) Article 5.1was 
covered by the original DSB recommendations14;  (ii) the nature of the implementing measure, i.e. 
provisional import ban and justification provided by the EC "implicates Article 5.7"15;  and (iii) the 
EC's claim of the inconsistency of the suspension by the original complainant(s) with Article 22.8 of 
the DSU were necessarily linked to the implemen ting measure's compliance with the original 
recommendations and rulings.  Then the question woul d arise as to whether the original complainant 
would be allowed, in the Article 21.5 proceedings initiated by the original respondent, to claim the 
inconsistency of the provisions that were neither  covered by the original DSB recommendations nor 
implicated by the nature of the implementing measure and justification, therefore, put forward by the 
original respondent in the absence of the claim by  the original respondent of the inconsistency of 
suspension with Article 22.816;  and in the absence of the initiation by the original complainant of 
Article 21.5 proceedings for certain legitimate reasons such as a resource constraint. 
21. Fourth, the Appellate Body had found that th e Panel had infringed the EC's due process rights 
by appointing and consulting with certain experts wh ose institutional affiliation was likely to affect or 
give rise to justifiable doubt as to their inde pendence and impartiality which "compromised the 
Panel's ability to act as an independent adjudicator " and "accordingly" failed to make an objective 
assessment of the matter under Article 11 of the DSU.17  Japan did not disagree with the Appellate 
Body's general statements that due process require ment was "inherent in the WTO dispute settlement 
system" and was "fundamental to ensuring a fair  and orderly conduct of dispute settlement 
proceedings".18  The principle of due process may inform th e procedural rules of the DSU.  However, 
"due process" was not a treaty language and nowhe re in the DSU was defined the content and scope 
of this "inherent" right.  Thus any claim in the dispute settlement under the DSU must stem from, or be based on, the rights and obligations best recogni zed and be reflected in the text of the covered 
                                                     
 
12 Appellate Body Report, para. 354. 
13 Appellate Body Report, paras. 329 and 332. 
14 Appellate Body Report, para. 327. 
15 Appellate Body Report, para. 330. 
16 See footnote 14 supra . 
17 Appellate Body Report, paras. 481-482. 
18 Appellate Body Report, para. 433. WT/DSB/M/258 
Page 8  
 
  agreement.  In other words, the ultimate question to  be answered here was not whether the Panel had 
infringed due process rights inherent in the system, but whether and how the s ubstantive provision of 
the DSU, in this case Article 11, had been breached by  the Panel.  In this respect, the Appellate Body 
had found that because the consultations with certain experts compromised the Panel's ability to be an 
independent adjudicator, the Panel had failed to abide by the requirement of Article 11.  However, in 
doing so, the Appellate Body had only referred to its brief statement made in the previous case
19, 
without explaining how such Pane l's conduct had resulted in the failure to "make an objective 
assessment of the matter".  In othe r words, the Appellate Body had appeared to assume that infringing 
due process would necessarily lead to the violation of  Article 11.  The Appellate Body should have 
explained how the breach of inherent due pro cess rights, which had been found by the Appellate 
Body, constituted the Panel's failure to "make an objective assessment of the matter", as required by 
Article 11 of the DSU. 
22. The Appellate Body had also been confronted with the possible consequence of its finding 
that the Panel had infringed the EC's due pr ocess rights where the Panel's certain conduct 
compromised its ability to perform its duty as an independent adjudicator.20  Although the Appellate 
Body had indicated that the breach of due process rights in this case might be serious enough to 
render the Panel's entire findings on the issue of  the implementing measure's WTO consistency 
unsustainable, it continued its analysis regard ing the other part of the Panel's finding under 
Articles 5.1 and 5.7 of the SPS Agreement.  Assuming that, as a result of such analysis, the Appellate Body had found that the Panel's separat e and distinguishable finding would, by itself, 
sustain the Panel's ultimate conclusion that the EC's implementing measure was inconsistent with 
Articles 5.1 and 5.7 of the SPS Agreement , would that cure the deficiency of the Panel's finding 
under Article 11 of the DSU?  In more general te rms, was there any category of due process rights 
that was so fundamental
21 under the DSU that its breach "could, by itself, lead to the invalidation of" 
the entire findings of a panel, irrespective of the validity of other part of the findings?  Or would the breach of due process rights under the DSU be cured depending on the nature or degree of seriousness 
of the prejudice as well as the overall reasoning and evidentially basis of findings by a panel? 
23. Finally, at the very end of the Report, the A ppellate Body had recommended, "[i]n the light 
of the obligations arising under Article 22.8 of the DSU", that the DSB request both parties to this 
dispute to initiate dispute settlement pro ceedings under Article 21.5 "without delay".
22  A couple of 
points were worth mentioning.  As expressed by previous speakers, Japan was not certain as to 
whether the Appellate Body had the authority to make "recommendations", i.e. to direct Members to 
take a certain course of action, let alone with a speci fic temporal limit, other than to recommend that 
the Member concerned bring the measure found to be  WTO-inconsistent into conformity with that 
WTO Agreement23, as provided for in Article 19.1 of the DSU.  More fundamentally, as a matter of 
Members' rights and obligations under the DSU, on what legal or textual basis were the parties to 
the dispute compelled to take certain action in th is case to have recourse to the dispute settlement 
procedures, within a specified time period?  Japan  understood that, in the view of the Appellate 
Body, a "temporary" or "abnormal" nature of the suspension of concessions under Article 22.8 as 
the last resort in the DSU somehow implied the ex istence of obligations on both parties to the 
dispute to ensure that no rmal state of affairs be restored as soon as possible, and these obligations 
                                                      
19 Appellate Body Report, para. 482. 
20 Appellate Body Report, paras. 483-484. 
21 The Appellate Body previously found that due process requires that procedural claim must be 
brought before a panel at the earliest stage of the proceedings, but a certain issue of a fundamental nature, such 
as the jurisdiction of a panel may be considered at any time.  Appellate Body Report, "US - Carbon Steel", 
para. 123. 
22 Appellate Body Report, para. 737. 
23 In a case of non-violation, nullification or impairment, "the Appellate Body shall recommend that the 
Member concerned make a mutually satisfactory adjustment".  Article 26.1(b) of the DSU.  WT/DSB/M/258 
 Page 9 
 
 
  further entailed immediate actions on both sides to initiate costly  litigation processes.  However, 
Article 21.5 did not set forth any time limit as to when the parties must initiate compliance proceedings under that prov ision.  Article 21.5 was simply silent  on that point.  Moreover, where 
Members or parties were required under the DSU to take certain actions within a specific time 
period, the DSU explicitly  provided to that effect, with certain  consequences in the event of failure 
to act as required.  In contrast, the shared obligations the Appellate  Body had identified as arising 
from Article 22.8 were far from being explicit in th e text of the DSU.  Japan further noted that 
Article 3.7 of the DSU provided  that "[b]efore bringing a case, a Member shall exercise its 
judgment as to whether action under these procedur es would be fruitful".  Referring to this 
provision, the Appellate Body had observed on the previous occasion that:  "A Member has broad 
discretion in deciding whether to bring a case agains t another Member under the DSU.  The 
language of Article XXIII:1 of the GATT 1994 and of Article 3.7 of the DSU suggests, 
furthermore, that a Member is expected to be largely self-regulating in deciding whether any such 
action would be 'fruitful'."
24  Given the "self-regulating" nature of initiating dispute settlement 
procedures as well as the Appellate Body's finding here that the original respondent25 was not 
precluded in the post-suspension stage from initiatin g Article 21.5 proceedings, Japan wondered why 
it was necessary for the Appellate Body in this disp ute to read into or identify in Article 22.8 the 
shared responsibilities on the part of both parti es to initiate Article 21.5 proceedings "without 
delay".  The Appellate Body's "recommendation" woul d raise further practical questions.  Assuming 
that this recommendation had the same legal status as the one under Article 19.1 of the DSU, were the 
parties to which that recommendation was directed required to implement that recommendation?  Was 
such implementation subject to surveillance under Article 21 of the DSU a nd remedy under Article 22 
of the DSU?   
24. To conclude, the Appellate Body had clarifie d the existing provisions of the DSU regarding 
the post-suspension stage of a dispute, but had also given rise to, or reminded WTO Members of, a number of questions of a systemic nature, which should be better addressed by Members in their 
legislative capacity, i.e. through negotiations.  Th e difficulties encountered by the parties, the Panel 
and the Appellate Body in this dispute illustrate d the lack of textual clarity as well as specific 
procedures to be followed in the post-suspension situ ation in the DSU, which was, by the way, one of 
the issues that had been discussed in the context of the DSU negotiations.  A number of questions 
raised by the Appellate Body testified the urgency and practical reasons for expediting the negotiation 
process. 
25. The representative of Argentina
 said that the statement to be made by his country under this 
Agenda item should be considered as also referring to the next Agenda item.  Argentina had not 
participated as a third party in these proceedings.  However, it wished to make some comments in 
view of the systemic interest of all Members in the correct interpretation of the DSU provisions.  In 
this regard, Argentina wished to underline two issu es.  First issue related to the last paragraph 
contained in the Appellate Body Report in which the Appellate Body had referred to a 
"recommendation".  The way that paragraph was word ed raised more doubts than certainty.  The use 
of the term "recommendation" in spite of the fact th at the legal provisions of Article 19.1 of the DSU 
were not met could not be neutral or without conseq uences.  Did the Appellate Body intend to make a 
recommendation as to how to settle the case, or w as it merely a suggestion in keeping with the 
analysis made, particularly in Section IV of the Report?  The distinction was not trivial – it had its 
importance.  Article 19.1 of the DSU used bot h expressions:  "recommendation" and "suggestion", 
each with its own distinct meaning, but not on e without the other.  The authority to make 
recommendations in Article 19.1 was contingent on the prior conclusion that a measure was 
                                                      
24 Appellate Body Report, " EC - Banana III", para. 135 (emphasis added). 
25 The original respondent ordinarily has a strong incentive to secure the multilateral findings by the 
DSB on substantive compliance, which would "by operation of law ( ipso jure )" "render  the suspension of 
concessions without legal basis".  Appellate Body Report, paras. 355 and 367. WT/DSB/M/258 
Page 10  
 
  inconsistent with a covered agre ement.  The possibility to "suggest" ways to implement the DSB's 
recommendations was, in its turn, contingent on th e existence of such recommendations.  In the case 
at issue, there was no finding of inconsistenc y, so on what grounds could the Appellate Body 
recommend, let alone suggest, to the parties what action they should take with respect to their 
dispute?  
26. The second issue had to do with the Appellate Body's stated preference for Article 21.5 
procedures to the detriment of the other procedures provided for in the DSU.  The DSU represented a 
balance between the rights and obligations of WTO Members based on a range of possible remedies for solving their disputes.  The degree of flexib ility available to Members under the DSU in choosing 
among these different remedies formed part of this balance between the rights and obligations.  The 
only primacy among these options in the DSU was acco rded to mutually agreed solutions.  While it 
was understandable that in the framework of this sp ecific dispute between the parties, the Appellate 
Body might point out to the possibility of recourse to Article 21.5 procedures, it was difficult to understand why the DSB should be instructed to request the parties to initiate Article 21.5 proceedings, without taking into consideration opt ions provided under the DSU.  The evaluation of 
the appropriateness of the different options offe red by the DSU was not only the responsibility of 
Members, but required the type of analysis which, in particular circumstances, nobody could perform 
better than Members. 
27. The representative of Australia
 said that her country was making this statement under the 
present Agenda item and under the following Agenda item.  Australia welcomed the Reports of the 
Appellate Body in these disputes in which it had partic ipated as a third party.  Australia considered 
that the Appellate Body's findings gave practical effect to the DSU provisions whose interactions 
were less than clear.  At the sa me time, those findings respected the fundamental principles that 
shaped the dispute settlement system, in particul ar, that non-compliance with WTO obligations should 
be determined multilaterally and that the party asserting non-compliance with WTO obligations bore 
the burden of establishing a prima facie  case.  Australia agreed with the Appellate Body's observation 
that the parties should have recourse to an Article  21.5 panel proceeding to resolve their disagreement 
as to whether the EC had removed the measure foun d to be inconsistent in the " EC - Hormones " 
dispute.  However, Australia was also mindful of  the provisions of Articles 3.2 and 19.2 of the DSU 
that the recommendations and rulings of panels, the Appellate Body and the DSB could not add to or 
diminish the rights and obligations provided in the covered agreements.  In the absence of a finding of 
inconsistency with a provision of a covered agre ement, Australia did not consider the Appellate 
Body's observation, in para. 737, to be a "recommend ation" within the meaning of Article 19.1 of the 
DSU.  That said, Australia urged the parties to work  together to resolve their disagreement, having in 
mind particularly the provisions of Article 3.7 of the DSU.  In respect of the issues addressed under 
the SPS Agreement, Australia endorsed the Appellate Body's recognition of the need for panels to 
respect due process in the appointment and consultati on with experts, as well as their duty to apply the 
appropriate standard of review when reviewing a Member's risk assessment.  It was incumbent on 
panels to observe what the Appellate Body had described as "the delicate and carefully negotiated 
balance" of rights and obligations established in the SPS Agreement.26  In Australia's view, the proper 
application of due process and standard of review  by a panel was essential if this balance was to be 
maintained.   
28. The representative of Korea  said that, first, he wished to express his country's appreciation to 
the Appellate Body for its hard work in prep aring the Report, which had dealt with several 
complicated legal issues.  Although Korea had not been a third party to this dispute, it would like to comment on the systemic issue raised by the United States and previous speakers, in particular with 
regard to the recommendation, which was containe d in the last paragraph of the Appellate Body 
Report.  What Members had agreed upon in the DS U was that the Appellate Body, as the highest 
                                                     
 
26 Appellate Body Report, "EC - Hormones", para. 177.  WT/DSB/M/258 
 Page 11 
 
 
  judiciary body in the WTO, would decide on the legal nature of the measure at issue, would 
recommend to Members to modify it, if there exis ted any wrongness, and coul d make suggestions, if 
it deemed necessary, on the way to implement its recommendation.  Members then decided what course of action to take based on such recommenda tions and possible suggestions.  If there were 
ensuing disputes, Members may either initiate other legal fora or continue consultations/negotiations, 
according to what they believed was most appropr iate.  Now, Korea was wondering what would be 
the legal status and effects of the concerned recommendation within such agreed procedure.  
Therefore, Korea believed that it was worth noting in  the DSB the point raised by the United States 
and other Members on this matter. 
29. The representative of Chile
 said that the statement to be made under the present Agenda item 
should also be considered as referring to the next Ag enda item.  He said that his country wished to 
express its appreciation for the Appellate Body Re port and that, in genera l, Chile supported the 
conclusions of the Report.  Although Chile had not been a third party to this dispute, it had followed it 
closely on account of systemic implications both as regards the correct interpretation of the SPS Agreement and the application of the DSU disciplines w ith regard to compliance.  In this connection, 
Chile wished to emphasize that this dispute was unique, since in the absence of specific rules in the 
DSU, and in view of the failure of the parties to reach an agreement, the respondent in the original 
proceedings had to submit a new application with  the consequences which that entailed and which 
were reflected in the two Reports to be adopted at the present meeting.  The Appellate Body had 
correctly and repeatedly pointed out that " both the suspending Member and the implementing 
Member share the responsibility to ensure that the suspension of concessions is not applied 
indefinitely" (paragraph 348 of the AB Report) or "t o ensure that the suspension of concessions is not 
applied beyond the time foreseen in Article 22.8" (p aragraph 384 of the AB Report) and that "both 
Members have an obligation to engage in a c ooperative manner in WTO dispute settlement to 
establish whether the suspension of concessions could continue or must be di scontinued pursuant to 
Article 22.8" (paragraph 355 of the AB Report).  Ch ile could not agree more.  However, despite those 
assertions, the Appellate Body had arrived at conclu sions that would appear, to say the least, to 
contradict those statements. 
30. Chile also considered that the procedures set fo rth in Article 21.5 were the most appropriate 
for determining the existence or consistency with a covered agreement of measures taken to comply 
with the recommendations and rulings.  Furthermor e, Chile, like the Appellate Body, took the view 
that such procedures were also available for the respondent in the initial proceedings.  Accordingly, 
Chile welcomed the analysis provide d by the Appellate Body in response to the objections raised by 
the EC against such a possibility.  However, the A ppellate Body should have co ncluded its analysis at 
that point.  The post-retaliation procedures had been  the subject of discussions and negotiations for 
several years since there was no express rule on the subject.  In the DSU negotiations, various 
proposals had been discussed with a view to establis hing an effective mechanism for determining the 
existence or consistency of compliance measure s following retaliation against the Member in 
question.  Those discussions had touched on a great number of different aspects, both technical and practical, and had impinged on political sensitivities.  With its analysis and the conclusions it had 
reached, the Appellate Body had expanded its mandate  in a manner which Chile regretted.  Moreover, 
the Appellate Body was imposing its own authority over and above the work which was being carried 
out by Members, and which was solely their res ponsibility, and by determining which procedures 
should, in its opinion, be followed in such circ umstances, the Appellate Body was creating new rights 
and obligations for all the WTO Members.  Furt hermore, in setting out a new procedure, it had 
established new courses of action with practical app lication or implications that had not yet been 
evaluated, as was the case when each party initiated its own proceedi ngs.  In the case at hand, the 
course of action followed by the co-claimants had gi ven rise to a number of new issues with regard to 
which neither  panels nor the A ppellate Body had arrived at a ha rmonious conclusion.  What would 
happen if there were counterclaims betw een the complainants and respondents? WT/DSB/M/258 
Page 12  
 
  31. A second comment arising from the Appellate Body Report related to the recommendation 
contained in paragraph 737.  In this connection, Chile agreed with the arguments put forward by the 
United States in its written communication, but the qu estion was at what point had the Appellate Body 
come to the conclusion that the joint recourse to  the procedures under Article 21.5 was the only way 
of settling the dispute, to the extent that the DSB ha d to request the parties to initiate such proceedings 
without delay, if in paragraph 340 of  its Report the Appellate Body had stated that parties to a dispute 
were not precluded from pursuing consensual or alte rnative means of dispute settlement foreseen in 
the DSU, and then going on to draw attention to the provisions of Article 3.7 of the DSU?  Chile 
regretted the inclusion of that recommendation, whic h in Chile's view did not help to settle this 
dispute.  It was Chile's understanding that the recommendation was not binding on the parties, 
although it did reiterate the obligation that the par ties had to participate in the dispute settlement 
procedures in a spirit of cooperation, and with a view to achieving an objective determination as to 
whether there had been substantive compliance in the present case, and whether the resolutive 
condition foreseen in Article 22.8 of the DSU had b een fulfilled.  Chile echoed that exhortation and 
urged Canada, the United States and the EC to seek  a harmonious approach consistent with the DSU 
and to bring an end to this dispute.  In conclusi on, Chile welcomed the analysis by the Appellate Body 
regarding the nature of statements in the DSB.  As  was pointed out in paragraph 398, such statements 
were opinions of a diplomatic or political nature that  generally had no legal effect or status in and of 
themselves, and that could not prejudice that Member's position in the context of a dispute.  Without that clarification, Chile would probably not be making its statement. 
32. The representative of Norway
 said that the statement to be made under the present Agenda 
item also referred the next Agenda item.  Norway  welcomed the adoption of the Appellate Body 
Reports at the present meeting.  Norway had particip ated in this dispute as a third party because of the 
systemic importance it attached to the issue of post-re taliation.  Key to this issue was how to ensure an 
orderly process, once retaliatory measures were in place, and the original defendant thereafter made 
changes to the contested measure.  In this particular  case, the parties had disagreed not just on whether 
there was compliance, but also on which process to use to resolve such a dispute.  The Appellate 
Body had resolved this issue by requiring all the pa rties to the dispute to make use of a compliance 
panel as provided for in Article 21.5 of the DSU.  Norway fully agreed with the Appellate Body's 
reasoning.  Putting the obligation to start an Article  21.5 panel on all parties to a dispute, created 
appropriate incentives to solve such disputes within the structures of th e DSU.  As Norway had stated 
before the Appellate Body, this was fully consistent with the language of Article 21.5 of the DSU – as 
well as the object and purpose of the DSU.  And it did not create procedural problems or dead-locks.  
The issue of "post-retaliation" had been debated for many years, and proposals had been made in the 
DSU negotiations to address this issue.  She assu med that all Members would have to examine the 
implications of the Appellate Body ruling for the proposals made in the context of the DSU 
negotiations in respect of "post-retaliation". 
33. The representative of Costa Rica  said that the statement to be made by his country under the 
present Agenda item also referred to the next Age nda item.  Although Costa Rica had not participated 
as a third party in this dispute, it wished to highlig ht some systemic matters involved in this case.  In 
particular, Costa Rica wished to refer to the asserti on that a unilateral determination of compliance by 
the respondent was not sufficient to determine co mpliance with the DSB's recommendations.  This 
was a welcome conclusion for the future of the mu ltilateral dispute settlement system.  As others had 
stated, nevertheless, the recommendation contained in paragraph 737 of both Reports raised several 
important systemic concerns.  Article 19 of the DSU did not seem to contemplate such recommendations and, therefore, Costa Rica did not see, as others had stated, how a complainant whose measure had not been considered to be incons istent with the covered agreement could then be 
subject to a recommendation at the end of a dispute. 
34. The representative of the European Communities
 said that her delegation wished to  react to a 
number of points that had been made at the present  meeting.  First, regarding the issue of the  WT/DSB/M/258 
 Page 13 
 
 
  recommendation in the Reports.  The United States had made it clear that it did not consider itself 
bound by that recommendation because it did not consider it to be a recommendation.  The 
United States called it an ill-considered word choice.   Thus, the United States had chosen to ignore the 
explicit term used by the Appellate Body.  Others had echoed concerns about the legal status of the 
recommendation.  But the EC wished to focus on the United States as an addressee of that 
recommendation.  The EC found this approach to be  highly problematic.  It would be irreconcilable 
with an effective multilateral dispute settlement syst em to allow individual parties to a dispute to 
decide unilaterally if a recommendati on was valid or not, or whether it had been made with or without 
jurisdiction, or whether it was binding for the purposes of implementation, or not.  Questions of legal 
basis and jurisdiction were obviously among what the Appellate Body had considered before 
rendering a ruling.  If the Appellate Body had made  a recommendation then it had considered to have 
the required jurisdiction to do so.  Parties could not appeal the Appellate Body reports like they could 
appeal panel reports.  Unless there was negati ve consensus, the reports must be accepted 
unconditionally according to Article 17.14 of the DSU, as had been stated by the Chairman at the 
present meeting.  This applied to the entirety of an Appellate Body report,  and no party was allowed 
to pick and choose, and certainly not the pa rty to whom a recommendation was addressed.   
35. Second, her delegation wished to comment on cer tain other points made by the United States 
at the present meeting and in the US communication th at had been circulated in advance of the present 
meeting, through which the United States had exercised  its uncontested right under Article 17.14 of 
the DSU to express its views on the Report.  The EC would indeed like to comment on a couple of 
arguments the United States had made in addition to the point on the recommendation to which her 
delegation had already reacted.  By way of a genera l comment, perhaps, one could not help but have 
the impression that the overall objective of the US statement and its communication seemed to prove that the Appellate Body was right, wherever it had agreed with the United States, and utterly and scandalously wrong wherever the Appe llate Body had chosen not to fo llow the US view.  The EC was 
also surprised to find in the US communication th e mistaken argument that the Appellate Body was 
barred from interpreting the DSU as referred to in pa ragraph 3 of the US communication.  Thus far, 
the EC thought that this was a misunderstanding of the early days of the WTO and since then had appropriately relegated to the waste paper bin.  Of course, the Appellate Body was empowered and 
even required to interpret the covered agreements.  How else could it clarify them – and  she quoted 
Article 3.2 of the DSU – "in accordance with custom ary rules of interpretation"?  How else could an 
appeal address – and she quoted Article 17.6 of th e DSU – "legal interpretations developed by the 
Panel"?  While the United States resented the f act that the Appellate Body had not espoused its 
understanding of Article 21.5 of the DSU, the EC c onsidered it useful that the Appellate Body had 
clarified the interpretation of the rules that were a pplicable to the post-retaliation phase of a dispute.  
Compared with the past uncertainty in that rega rd, which had forced the EC to bring the present 
dispute, Members now knew what they could and must  do in the future, as well as the consequences if 
they did not.  
36. Entirely unconvincing were also the arguments with which the United States had tried to 
criticize the Appellate Body's decision regarding the Panel's selection of experts.  The United States 
had entirely missed the point if it portrayed the i ssue as being whether experts could be persons with 
prior work experience in the area concerned.  The EC had already explained at the present meeting in 
its opening remarks that the situation at stake in this case was quite different.  Turning from the 
substance to the form of the circulated document of  the United States, the EC  needed to record its 
objection to the designation of this document with  symbol WT/DS320/16.  Members would recall the 
debate that had taken place in the DSB at its meeting on 1 August 2008 and the reasons which the EC 
had set out, and which need not all be repeated at the present meeting in the interest of brevity.  To be 
clear, it was not the expression of views, but the do cument's designation, with which the EC took 
issue.  On 1 August 2008, the United States had inac curately asserted that all written statements of the 
type had thus far been recorded as WT/DS documen ts.  In reality, no such documents had been 
circulated under WT/DS symbols for 10 years of DSB practice – a period in which some such WT/DSB/M/258 
Page 14  
 
  statements had been recorded under the designation WT/DSB/COM.  On 1 August 2008, the 
United States had also referred to the DSB's Rules of Procedure, according to which statements made 
in DSB meetings were to be "reflected in the reco rd of the DSB".  This confirmed the EC's position:  
DSB minutes or other documents with a WT/DSB  designation belonged to the DSB record, but a 
WT/DS symbols related to a particular dispute, and precisely not to the work of the DSB.  On this 
basis, the EC fully stood by its position and could no t agree with the circulat ion of the document in 
question in the series of the dispute in question, that was symbol WT/DS320/16.  Such circulation had 
occurred a number of times in the recent past, base d on a consensus decision in the DSB, for the first 
time in the "Japan - Apples" dispute.  Since 1 August 2008, there was no longer a consensus in the 
DSB regarding such circulation, and the EC woul d ask other Members and the WTO Secretariat to 
kindly take note of that fact.  The designation of such documents fell in the first place within the 
competence of the DSB, and not of an individual Member or the WTO Secretariat.  Since the US document had already been circulated with a WT/DS symbol, and unless that designation was withdrawn and changed, the EC woul d be compelled to ensure that there be put on the same record as 
the US communication a document setting out the arguments as to why the designation of such 
communications as DS documents was inappropriate.   
37. The representative of the United States
 said that, for the reasons already discussed, it would 
not make sense to read the word "recommends" at  the end of the Appellate Body Report as being 
intended to be a recommendation within the meaning of Article 19.1.  As a number of other Members had also noted at the present meeting, that would be  a departure from the Appellate Body's authority.  
The Appellate Body only existed pursuant to th e agreement of Members, and Members should not 
presume that the Appellate Body intended to depa rt from the authority granted to it by Members.  
Accordingly, this was about accepting the Appellate  Body's report on the basis of an understanding 
that comported with the DSU.  The United States di d not understand why the EC would want to claim 
that the Appellate Body was free to depart from the rules of the DSU.  If the EC wanted to amend the 
DSU, it was free to propose such an amendment.  But neither the EC nor the Appellate Body could 
unilaterally do so.  Furthermore, Members had onl y agreed to "unconditionally accept" an Appellate 
Body report within the rules pre scribed in the DSU.  Those rules included the role and authority 
assigned to the Appellate Body. 
38. On the issue of document circulation, the EC 's concerns were completely unfounded.  
Circulation of documents submitted by a Member, and the assignment of document symbols to such 
documents, was entrusted to the Secretariat.  Th e DSB had never taken a decision on the document 
symbol to be given to any of the many documents that were circulated to Members relating to the 
WTO dispute settlement.  The EC's suggestion that consensus was required for any document to be 
circulated with a particular symbol was simply wr ong.  If, however, the EC wished the DSB to begin 
making document distribution decisions, it certainly w as entitled to make a proposal to that effect and 
seek to achieve a consensus for it.   The United States, for one, w ould have some questions about 
whether the DSB's limited resources should be de voted to this work.  The United States also 
wondered if Members would truly want to see ci rculation of every document delayed pending 
achieving consensus by the DSB on the series in whic h to circulate it.  In that light, the EC's 
suggestion that the Secretariat abandon its current pr actice of issuing communications such as the US 
communication in the relevant WT/DS series – that  is, the document series created for the specific 
dispute – made very little sense to the United Stat es.  The only function it could serve would be to 
make it more difficult for Members and the public to lo cate documents relevant to a particular dispute. 
39. The DSB took note
 of the statements, and adopted  the Appellate Body Report contained in 
WT/DS320/AB/R and the Panel Report contained in WT/DS320/R, as modified by the Appellate 
Body Report.  WT/DSB/M/258 
 Page 15 
 
 
  2. Canada – Continued suspension of obligations in the EC - Hormones dispute  
(a) Report of the Appellate Body (WT/DS321/AB /R) and Report of the Panel (WT/DS321/R) 
40. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS321/15 transmitting the Appella te Body Report on:  "Canada – Continued 
Suspension of Obligations in the EC - Hormones Dispute", which had been  circulated on 
16 October 2008 in document WT/DS321/AB/R, in acco rdance with Article 17.5 of the DSU.  He 
reminded delegations that the Appe llate Body Report and the Panel Re port pertaining to this dispute 
had been circulated as unrestricted documents.  As Members were aware, Article 17.14 of the DSU required that:  "An Appellate Body report sha ll be adopted by the DSB and unconditionally accepted 
by the parties to the dispute unless the DSB decid es by consensus not to adopt the Appellate Body 
report within 30 days following its circulation to  Members.  This adoption procedure is without 
prejudice to the right of Members to express their views on an Appellate Body report."  
41. The representative of the European Communities
 said that her delegation would not repeat the 
statement made under the previous Agenda item and would refer delegations to  the EC's statements 
made under Item 1 of the Agenda of the present meeting.  
42. The representative of Canada  said that his country again thanked the Appellate Body, the 
Panel and the WTO Secretariat for their work in th is case.  This was a case that addressed important 
issues of interpretation regarding the DSU and impor tant SPS issues.  Turning first to the issues 
relating to the DSU, Canada was pleased that in th is case, and in the parallel case between the EC and 
the United States, both the Panel and the Appellate  Body had responded favourably to the requests 
from the three parties to open the hearings to the public, subject to certain procedural safeguards for 
third parties that had not wished to make their statements in public.  Ca nada believed that the 
transparency provided by the open hearings contri buted significantly to demystifying the dispute 
settlement process and strengthened its legitimacy.  Canada was also pleased that the Appellate Body 
had reversed the Panel's findings th at Canada had acted in consistently with Artic le 23.1 and 23.2(a) of 
the DSU.  Canada welcomed the confirmation by th e Appellate Body that Canada's DSB authorized 
suspension of concessions vis-à-vis the EC remained  consistent with Canada 's WTO obligations until 
one of the conditions of Article 22.8 of the DSU had been met. 
43. Canada welcomed the confirmation by the Appe llate Body that in the post-retaliation phase, 
both the original complaining Member and the Member whose concessions had been suspended could initiate proceedings pursuant to Article 21.5 of the DSU.  This confirmation would enhance the 
effective functioning of the dispute settlement system and was important for the WTO dispute 
settlement system as a whole.  Canada was concerne d about the systemic implications of the conflict 
of interest found by the Appellate Body with regard  to two of the scientific experts consulted by the 
Panel.  The Appellate Body had found a conflict on the basis of Article 11 of the DSU simply because 
these two scientists had participated as scientific ex perts in meetings of the Joint FAO/WHO Expert 
Committee on Food Additives (JECFA) where the hormon es at issue in this case had been discussed.  
Canada was concerned that this finding by the Appellate Body would seriously limit the number of 
internationally recognized scientists who were availa ble for consultations by WTO panels in cases of 
this kind and thus would have adverse systemic c onsequences.  Canada must now take a moment to 
register its concern regarding the final sentence in  the Appellate Body Report.  Canada was pleased 
that the Appellate Body had confirmed that the EC had access to the Article 21.5 procedure.  This was 
not the only thing that the Appellate Body had to say.  In this sentence, the Appellate Body had 
recommended that both Canada and the EC initia te proceedings under Article 21.5 of the DSU 
without delay.  However, the Appellate Body's ro le was limited to the powers conferred on it through 
the DSU.  In particular, the power to make re commendations was governed by Article 19.1 of the 
DSU.  This provision allowed a panel or the Appellate Body to recommend that a Member bring its measure into conformity where it had concluded th at the measure was inconsistent with a covered WT/DSB/M/258 
Page 16  
 
  agreement.  In this case, the Appellate Body ha d made no such finding of  inconsistency and had 
reversed the findings of inconsistenc y that had been made in error by the Panel.  Without a finding of 
inconsistency, there could be nothi ng to render consistent, there could be nothing to implement.  Since 
no finding of inconsistency existe d, the Appellate Body's recomme ndation that Canada and the EC 
"initiate Article 21.5 proceedings without delay in order to resolv e their disagreement" could not 
constitute a recommendation within the meaning of Article 19.1 of the DSU and was, therefore, 
without legal consequence.  
44. Turning now to the SPS-related findings in this case, he said that as a first point, Canada 
would like to emphasize that the Appellate B ody had made no findings on the consistency or 
inconsistency of the EC's hormones ban.  In fact , the Appellate Body had  expressly confirmed that 
the original recommendations and rulings of the DSB in the " EC - Hormones " dispute remained 
operational and thus the EC's compliance remained to  be demonstrated.  The Appellate Body had also 
confirmed that until that time, Canada was entitled to continue to suspend concessions vis-à-vis the 
EC.  Canada noted the Appellate Body 's clarification of the standard of review of Article 5.1 of the 
SPS Agreement.  The purpose of Article 5.1 w as to ensure that SPS measures were based on a 
scientifically sound risk assessment.  In this regard, the Appellate Body had confirmed that the role of 
a WTO panel was to determine whether a risk a ssessment was supported by coherent reasoning and 
respectable scientific evidence that rendered it objec tively justifiable.  The Appellate Body had also 
clarified the analytical steps that a panel's inquiry ha d to take and, in so doing, the Appellate Body had 
affirmed that panels were not absolved of the dut y to ensure the scientific integrity of the risk 
assessment methodology.  Canada  had concerns about the Appellate Body's finding that the 
appropriate level of protection established by a Memb er could be a factor in how a risk assessment 
would be conducted.  However, Canada noted that the Appellate Body had stated that the scientific 
rigour and objective nature of the risk assessment should not be undermined.  Nevertheless, Canada 
was concerned that, in practice, the risk assessment process might be  unduly influenced by the policy 
decision of a WTO Member as to the appropriate level of protection and that this might have 
consequences for the effectiven ess of the SPS Agreement.  Canada was also concerned about the 
implications of the Appellate Body's findings on Ar ticle 5.7 of the SPS Agreement, particularly with 
regard to the relationship between a Member's appropr iate level of protection and the insufficiency of 
the scientific evidence to conduct a ri sk assessment in the fa ce of relevant international standards.  
The Appellate Body's findings c ould undermine the delicate balan ce between a Member's qualified 
right to adopt and maintain provisional SPS me asures and the obligation not to maintain these 
measures without sufficient scientific  evidence.  However, Canada noted that the Appellate Body had 
emphasized that, whatever the level of protection a WTO Member chose, the determination whether the available scientific evidence w as sufficient to conduct a risk assessment remained "a rigorous and 
objective process". 
45. The representative of the United States
 said that his country shared the serious concerns 
expressed by Canada with respect to these Reports , which were in substance identical to those 
considered under Item 1 on the Agenda of the pr esent meeting.  The United States referred Members 
to the US statement made under Item 1 fo r a detailed elaboration of its views. 
46. The representative of India  said that her country wished to make a short statement on the 
issue of public hearings mentioned by Canada.  Indi a had participated in this dispute as a third party 
on the limited issue of opening the hearings to the pub lic.  India had maintained throughout that, both 
during the Panel and the Appellate Body proceed ings, the confidentiality of the Panel and the 
Appellate Body proceedings provided under the DSU was a matter of substantial issue for India.  It 
was for WTO Members to decide by consensus on th is issue and any decision by the Panel and the 
Appellate Body to open the proceedings to the pub lic observation, necessarily  involved consultations 
and decisions with WTO Members at large, and not just the parties and third parties.  The Panel, 
however, had gone ahead and had decided to act on the parties' joint request to open the Panel 
hearings to public by interpreting Article 14.1 of th e DSU stating that the Panel deliberations shall be  WT/DSB/M/258 
 Page 17 
 
 
  confidential and that this did not cover the exchange  of arguments by the parties.  India was very 
much concerned with this narrow interpretation adopted by the Panel in those proceedings.  
Notwithstanding the fact that Article 17.10 of the DSU stated that the proceedings of the Appellate 
Body shall be confidential, the Appellate Body had interpreted those DSU provisions and had found 
that derogations to those provisions were possible fo r the parties to the dispute provided that this did 
not affect third participants.  India understood that the Appellate Body spoke of separate relationships 
between the parties to the dispute, which could be altered as long as others were not affected.  The 
Appellate Body's interpretation and its treatment of  DSU provisions raised systemic concerns and the 
legal concerns should be an issue for all WTO Memb ers.  In India's view, in the multilateral system 
this trend might lead to serious concerns.  Notwith standing this fact, India appreciated the Appellate 
Body's clarifications on many of the critical issues involved in this dispute, which would significantly 
contribute to further clear interpretations of the DSU provisions. 
47. The representative of Brazil  said that his delegation wished to refer to the statement made by 
Brazil under Item 1 of the Agenda of the present meeting and requested that Brazil's statement made under that Item should also be considered  as being made under Agenda Item 2.  
48. The representative of the European Communities
 said that, first, her delegation wished to 
refer to its second intervention under the prev ious Agenda item regarding the issue of 
recommendation.  What she had stated with regard  to the US position also applied to Canada's 
position regarding the legal nature of this recomme ndation so she did not need to repeat it here.  
Second, in its remarks about the Appellate Body Re ports and the Panel Reports in these disputes, the 
EC had not commented on the decisions of these Pa nels and the Appellate Body to allow public 
observation of their hearings.  The comments made on this subject by India made it necessary for the 
EC to take the floor again.  The EC did not agree w ith India that panels and/or the Appellate Body had 
stepped outside the bounds of their competence by  permitting public observation.  The EC, as one of 
the parties having requested the opening, had welcom ed those decisions and considered them to be 
entirely in line with the DSU.  It was recalled th at precisely this question of the legality of open 
hearings under the DSU was the subject of an inte nsive exchange between the parties and the third 
parties before both the Panels and the Appellate Body.   The EC considered the decisions of the Panels 
and the Appellate Body to be well- supported by the text of the DSU.  They were also authoritative 
rulings on this question of interpretation under the WTO Agreement.  Obviously, as Members knew it 
from many other questions of interpretation under the WTO Agreement, there could be disagreement 
among WTO Members on the correctness of such decisions.  Therefore, the debate taking place at the 
present meeting about this subject was nothing unusual.   Nor did it detract from the fact that, whether 
individual WTO Members agree or disagree with the decision or the reasoning, they ultimately had to accept them.  The EC hoped that WTO Members could on this basis overcome their past disagreement 
on this subject.  In the EC's view, transparency in the WTO dispute settlement was highly useful and 
desirable, and this from the perspective of all WTO Members.  It was also to be applauded that more 
and more WTO Members were opting for this form of transparency in their disputes.   
49. The representative of Mexico
 said that his delegation wished to refer to the issue of public 
hearings.  As Members were aware, Mexico had a contrary position to this practice since it did not 
find any language in the text wh ich would permit open hearings.  The Panel had discussed this issue 
with third parties before taking its decision.  In addition to the fact that Mexico did not find any language to this effect in the text, Mexico did not  find anything on this in the negotiating history of 
dispute settlement.  Mexico noted that there was an agreement of the parties to the dispute which had 
prevailed and this was favoured over what the DSU st ated.  Mexico wished to make this point clear.  
In this case, on the one hand ther e had been an excessive interpretati on of the rules of the DSU by the 
Appellate Body and the same Members had agreed th at the Appellate Body should interpret with a 
degree of flexibility the rules of the DSU when  this was in line with their interests. WT/DSB/M/258 
Page 18  
 
  50. The representative of Japan
 said that his delegation wished to request that the statement made 
by Japan under the previous Agenda Item be also considered as being made under the present Agenda 
Item.  
51. The DSB took note  of the statements, and adopted  the Appellate Body Report contained in 
WT/DS321/AB/R and the Panel Report contained in WT/DS321/R, as modified by the Appellate 
Body Report. 
3. Statement by the Chairman regarding some  matters related to the Appellate Body 
52. The Chairman , speaking under "Other Business", said that, as he had announced at the outset 
of the meeting, he wished to make a statement unde r "Other Business" regarding some matters related 
to the Appellate Body.  In this regard, he wished to inform delegations that on 12 November 2008, he 
had received a letter of resignation from the Chairman of the Appellate Body, 
Mr. Luiz Olavo Baptista.  In his letter, Mr. Baptis ta had informed him that, owing to health reasons, 
he had been compelled to resign from the Appellate Bo dy.  The Chairman said that he was sure that 
he spoke for all Members in expressing regret that Mr. Baptista had been obliged to cut short his 
distinguished tenure on the Appellate Body, and in wi shing him well.  Pursuant to Rule 14 of the 
Working Procedures for Appellate Review, Mr. Baptis ta's resignation would take effect 90 days from 
the date of his letter of resignation, which would me an that effectively as of 11 February 2009, there 
would be a vacancy in the Appellate Body which would have to be filled.  He recalled that originally, 
the second and final term of office of Mr. Baptista was to expire on 11 December 2009.  In addition, 
the second and final term of office of another me mber, Mr. Giorgio Sacerdoti, would expire on 
11 December 2009 as well, and the first term of offi ce of Mr. David Unterhalter would also expire on 
11 December 2009.  Mr. Unterhalter was eligible fo r reappointment for a second term.  In light of 
Mr. Baptista's resignation, he inte nded to consult informally with de legations in the coming days as to 
what would be the best and most efficient way of  proceeding under the circumstances.  He would 
report  back to delegations on the results  of his consultations as soon as possible. 
53. The DSB took note  of the statement.  
__________