WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/DSB/M/314 
5 June 2012 
 (12-2939) 
Dispute Settlement Body 
13 April 2012  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard 
on 13 April 2012 
 
Chairman:  Mr. Shahid Bashir (Pakistan) 
 
 Subjects discussed: Page 
 
1.  United States – Measures affecting trade in large civil aircraft (second complaint) .......... 1  
(a)  Implementation of the recommendations of the DSB ................................................................. 1  
2.  European Communities and certain member States – Measures affecting trade in 
large civil aircraft .......................................................................................................... ............ 2 
(a)  Recourse to Article 21.5 of the DSU by the United States:  Request for the 
establishment of  a panel ...................................................................................................... ........ 2 
 
 
1. United States – Measures affecting trad e in large civil aircraft (second complaint) 
(a) Implementation of the recommendations of the DSB 
1. The Chairman recalled that, in accordance with the DSU provisions, the DSB was required to 
keep under surveillance the implementation of reco mmendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In that respect, Article 21.3 of 
the DSU provided that the Member concerned shall in form the DSB, within 30 days after the date of 
adoption of the panel or Appellate Body report, of its intentions in respect of implementation of the 
recommendations and rulings of the DSB.  He reca lled that at its meeting on 23 March 2012, the DSB 
had adopted the Appellate Body Report and the Pa nel Report, as modified by the Appellate Body 
Report, pertaining to the dispute:  "United States – Measures Affecting Trade in Large Civil Aircraft 
(Second Complaint)".  He invited the United States to inform the DSB of its intentions in respect of 
implementation of the DSB's recommendations. 
2. The representative of the United States said that, on 23 March 2012 the DSB had adopted its 
recommendations and rulings in the dispute:  "U nited States – Measures Affecting Trade in Large 
Civil Aircraft (Second Complaint)", DS353.  At the present meeting, as provided in the first sentence 
of Article 21.3 of the DSU, the United States said th at it was informing the DSB that the United States 
intended to implement the recommendations and rulings  of the DSB in this dispute in a manner that 
respected US WTO obligations.  The United Stat es intended to do so within the time-frame 
established in Article 7.9 of the SCM Agreement.  
3. The representative of the European Union said th at the EU welcomed the US statement that 
the United States intended to comply with the DSB' s recommendations and rulings in this dispute.  WT/DSB/M/314 
Page 2  
 
  Article 7.9 of the Subsidies Agreement provided a six-month period from the adoption of the Panel 
and Appellate Body Reports for the United States to take appropriate steps either to withdraw the 
subsidies or to remove the adverse effects of the subsidies.  That six-month period would expire on 
23 September 2012.  The EU recalled that the WTO-in consistent R&D and tax subsidies that had been 
granted at various levels of government in the United States were massive and would benefit Boeing 
for many years to come.  These subsidies had been found to cause adverse effects not only in the form 
of significant lost sales and the threat of losing mark et share, but also of price effects, which caused 
Airbus financial losses to the tune of billions of  Euros.  The EU would be monitoring closely 
developments towards implementation in the Unite d States and remained ready to work with the 
United States on this matter. 
4. The DSB took note of the statements, and of the information provided by the United States 
regarding its intentions in respect of implementation of the DSB's recommendations. 
2. European Communities and certain member States – Measures affecting trade in large 
civil aircraft 
(a) Recourse to Article 21.5 of the DSU by the Unite d States:  Request for the establishment of a 
panel (WT/DS316/23) 
5. The Chairman drew attention to the communication from the United States contained in 
document WT/DS316/23, and invited the represen tative of the United States to speak.  
6. The representative of the United States said that , on 1 June 2011, the DSB had adopted its 
recommendations and rulings in this dispute, "EC - Large Civil Aircraft".  The DSB had 
recommended that the Member granting each subsidy f ound to have resulted in adverse effects bring 
that subsidy into compliance with its obligations u nder the SCM Agreement.  Under Article 7.9 of the 
SCM Agreement, the EU and certain member States had six months from the date of adoption of the 
recommendations and rulings of the DSB to withdraw  the subsidies or take appropriate steps to 
remove the adverse effects of the subsidies.  Th at six-month period had ended on 1 December 2011.   
7. In the view of the United States, it appeared that the EU and certain member States had failed 
to comply with the recommendations and rulings of the DSB both within that period and thereafter.  
On 9 December 2011, the United States had requested consultations with the EU in an effort to 
provide the EU with a further opportunity to expl ain how it had complied with its WTO obligations.  
The consultations, however, had not resolved the di spute.  The United States remained concerned that 
the EU and its member States had failed to comply with the recommendations and rulings of the DSB.  
Indeed, the EU had introduced ne w subsidies, just like the ones th at had been condemned by the DSB 
just last year.  The United States said that this w as a serious problem.  EU subsidies to Airbus were, 
by any measure, massive and had equally massive adverse effects on the United States.   
8. Over the six-year period between the initiation of the dispute and the adoption of the Reports, 
the EU had denied providing subsidies and had deni ed their effects.  The Panel and the Appellate 
Body, however, had rejected the EU's arguments, a nd the DSB had adopted those findings.  To be 
specific, the DSB had found that these subsidies had caused Boeing to lose sales of more than 300 
aircraft and to lose market share throughout the world.   In fact, in looking at the effect of the EU 
subsidies, the Appellate Body had confirmed th e Panel's finding that among the most plausible 
scenarios was that "[w]ithout the subsidies, Airbus would not have existed … and there would be no 
Airbus aircraft on the market.  None of the sales  that the subsidized Airbus made would have 
occurred."1  The EU's notification of alleged steps to comply with the recommendations and rulings of 
                                                      
1 "European Communities and Certain Member States  – Measures Affecting Trade in Large Civil 
Aircraft", WT/DS316/AB/R, para. 1264 (adopted 1 June 2011).  WT/DSB/M/314 
 Page 3 
 
 
  the DSB showed that it had not cha nged its behaviour in any meaningful  way.  In fact, the notification 
acknowledged that the largest launch ai d subsidies, for the A380, remained in place.  Furthermore, the 
actions the EU claimed to have taken with resp ect to earlier subsidies appeared to do nothing to 
withdraw them, or remove their a dverse effects, as required under Artic le 7.8 of the SCM Agreement.  
Airbus itself reported that it had received new launch aid for the A350XWB.  In short, while claiming 
to have complied, the EU seemed to have ma de the problem worse.  For those reasons, the 
United States was requesting that the DSB establish a panel under Article 21.5 of the DSU to examine 
whether the EU had implemented the DSB's recomme ndations and rulings.  Pu rsuant to paragraph 2 
of the sequencing agreement between the EU and th e United States, the EU had agreed to accept the 
establishment of the panel at the present meeting.  
9. The representative of the European Union said th at the EU regretted that the United States 
had made the request for the establishment of a co mpliance panel.  The EU was in full compliance 
with the DSB's recommendations and rulings, as ha d been notified to the DSB on 1 December 2011 
(WT/DS316/21).  In line with the sequencing agreem ent of 12 January 2012 pertaining to this case, 
the EU agreed to the establishment of a panel at the present meeting.  However, the EU wished to 
inform the DSB that a similar sequencing agreement had been agreed in the dispute:  "US – Measures 
Affecting Trade in Large Civil Aircraft (Second Co mplaint)" (DS353), and would be circulated to 
Members shortly. 
10. The DSB took note of the statements and agreed, pursuant to Article 21.5 of the DSU, to refer 
to the original Panel, if possible, the matter ra ised by the United States in document WT/DS316/23.  
The Panel would have standa rd terms of reference. 
11. The representatives of Canada, China, Japan a nd Korea reserved their third-party rights to 
participate in the Panel's proceedings. 
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