RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/226 
26 March 2007 
 (07-1261) 
Dispute Settlement Body 
20 February 2007  
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 20 February 2007  
 
Chairman:  Mr. Muhamad Noor Yacob (Malaysia) 
 
 
Subjects discussed : Page  
 
1. Surveillance of implementation of recommendations adopted by the DSB.........................2  
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States .............................................................................................................. ...........2  
(b) United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by  the United States...................................................................................5  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States ................................................................................................................. .............5  
(d) United States – Laws, regulations and methodology for calculating dumping margins 
("Zeroing"):  Status repor t by the Unite d States .........................................................................6  
2. United States – Measures relating to zeroing and sunset reviews ........................................7  
(a) Implementation of the recommendations of the DSB.................................................................7  
3. Implementation by the European Co mmunities of the recommendations and 
rulings of the DSB in relation to "European Communities – Regime for the Importation, Sale and Distribution of Bananas" and related subsequent WTO 
proceedings .................................................................................................................... ............9
 
(a) Statements by Honduras, Ni caragua and Panama.......................................................................9  
4. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ..........................................12  
(a) Statements by Canada, the European Communities and Japan.................................................12  
5. United States – Subsidies on upland cotton..........................................................................14  
(a) Statement by Brazil concerning untimely filings of submissions.............................................14  
6. United States – Anti-dumping measure on shrimp from Ecuador.....................................16  
(a) Report of the Panel............................................................................................................ ........16  
7. Election of Chairperson........................................................................................................ ..19 
 
  WT/DSB/M/226 
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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.51) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.51) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United  States (WT/DS160/24/Add.26)  
(d) United States – Laws, regulations a nd methodology for calculating dumping margins 
("zeroing"):  Status report by the United States (WT/DS294/20) 
 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 four 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.51) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.51, 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 8 February 2007, in accordance with Ar ticle 21.6 of the DSU.  As noted in the report, 
during the previous congressional session, the US  Congress had been considering a number of 
legislative proposals that would implement the DSB' s recommendations and rulings in this dispute.  
The new US Congress had now convened.  The US administration would work with this Congress 
with respect to appropriate statutory measures to resolve this matter. 
4. The representative of the European Communities  said that, for many months, the EC had 
heard the United States to claim its commitment to  the TRIPS Agreement and its duty to comply 
promptly with the DSB's rulings and recommendations. Regrettably, this did not fit with the reality 
that Members faced in this dispute.  Section 211 had been condemned five years ago and the only 
progress the United States could report at the presen t meeting was that its administration would work 
with the US Congress to implement the DSB's ruling and recommendations.  Ensuring efficient 
protection of intellectual property rights worldw ide was a shared objective and interest of the 
United States and the EC.  The persisting ignorance of the TRIPS obligations by the United States ran 
against this by undermining the authority of the TRIPS Agreement.  The EC hoped that the new US 
Congress would realise the widespread damaging eff ects caused by the non-implementation of the 
DSB's rulings and would finally put an end to this dispute.  Furthermore, the United States also sent 
the wrong message by refusing, on foreign policy gr ounds, the specific licence that would have 
allowed the renewal of the registration of the Ha vana Club.  The renewal would not have granted 
ownership rights, but would only have preserved the status quo and let US courts decide who was the 
legitimate owner of that mark.  Therefore, the EC invited the United States to reconsider its position, 
in light of its seriously damaging effects. 
5. The representative of Cuba  said that the DSU, the cornerstone of the multilateral trading 
system, stipulated in Article 21.1 that prompt comp liance was essential in order to ensure effective 
resolution of disputes to the benefit of all Members.  However, in this dispute as well as in others, the  WT/DSB/M/226 
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United States seemed to ignore that provision.  Th e United States had failed to implement the DSB's 
recommendations and rulings with regard to Sec tion 211 for five years and 18 days now, while 
continuing to submit repetitive status  reports that lacked information about the possibility of resolving 
this matter in the short or medium term.  On the basis of the principle of prompt compliance, Members were expected to comply immediately or, if this was not possible, within a reasonable 
period of time which, in the dispute under considera tion, had been mutually agreed by the parties to 
the dispute and extended on five occasions.  He noted that the last deadline had expired on 
30 June 2005, which demonstrated that the current s ituation in this dispute was totally irregular and 
did not conform to the letter of the DSU. 
6. Section 211, which had been declared incons istent with the TRIPS Agreement and the 
principles of national treatment and most-favoured-na tion treatment, continued to affect not only the 
interests of the EC but also those of Cuba.  He recalled that in the Summer 2006, the US Patent and 
Trademark Office had rejected a request for renewal of the registration of the Havana Club trademark, 
which had been submitted by the Cuban company that  owned it, precisely on the basis of this absurd 
provision. The attitude of the United States sent very negative signals to other WTO Members and 
called into question the effectiveness of the disp ute settlement mechanism, the credibility of the 
multilateral trading system and confidence in that sy stem, at a critical time for the WTO, namely the 
Doha Round negotiations. 
7. It was widely known that Section 211 had been  orchestrated by the lawyers of the Bacardi 
rum company and that it was aimed at usurping ow nership of the prestigious Havana Club brand in 
the United States from its legitimate owner, the Cuban-French joint venture, Havana Club 
International.  It was no coincidence that S ection 211 was commonly known in the US Congress and 
media as the "Bacardi Bill". It was not necessary for the United States to constantly repeat that none 
of the findings and recommendations in this dispute related to a specific trademark.  Once again, Cuba 
called upon the United States to take prompt a nd effective action to implement the DSB's 
recommendations and rulings.  In this regard, the on ly possible solution to th is dispute was for the 
United States to introduce a bill in the US Congress to  repeal Section 211, instead of reiterating the 
false assertion that it was working with the US Co ngress to resolve this matter, while everyone knew 
that in the past five years it had never made the slightest effort to do so.  In the light of the United States' persistent failure to comply with its obl igations under the WTO Agreements and with the 
decisions made by the DSB, Cuba reserved its right to  raise its legitimate concerns either in this forum 
or by whatever means it deemed appropriate. 
8. The representative of the Bolivarian Republic of Venezuela
 said that his country wished to 
thank Cuba for its statement, which it fully endor sed.  Venezuela considered Cuba's complaint to be 
legitimate, as had been demonstrated when th e DSB had found that Section 211 of the Omnibus 
Appropriations Act of 1998 was inc onsistent with the WTO Agreemen ts and fundamental principles 
of the WTO.  He also noted the status report submitted by the US delegation which, once again, 
demonstrated the US lack of interest in comply ing with the Panel's recommendations. In its reports, 
the United States had insisted that no other country was so strongly protective of intellectual property 
rights.  His delegation, however, found it difficult to reconcile the US statement with the present 
situation.  A commitment was one thing – living up to  that commitment was another.  For almost five 
years, the United States had not made any serious efforts to implement the DSB's rulings and recommendations, which had condemned Section 211 fo r not respecting the obligations of national 
treatment and most-favoured-nation treatment.  This  month again, the United States could do no better 
than submit a status report which, but for the date of  circulation, was absolute ly identical to the report 
submitted last month and, in fact, to all the repor ts that had been submitted for almost two years. 
9. Failure to respect these core principles of th e TRIPS Agreement several years after the WTO's 
condemnation, sent the message that the disciplines of  the TRIPS Agreement could be ignored.  This 
was inevitably damaging, especially since it came from one of the main promoter s of that Agreement.  
To make matters worse, the recent decision of th e US Administration to refuse the specific licence WT/DSB/M/226 
Page 4  
 
that would have allowed the renewal of the regist ration of the Havana Club mark, had once again sent 
the wrong message.  The renewal would not have give n away or granted rights.  It would have only 
preserved the status quo and would have allowed the US courts to  decide, in pending proceedings, 
who was the legitimate owner of that mark.  Even more worrying was the US explanation that this 
decision had been made on foreign policy grounds.  Ownership of intellectual property rights should 
be decided by the courts on the basis of the law, without the interference of political considerations.  
If this US policy were to be followed by other coun tries, it would seriously undermine the efforts to 
promote rules-based protection of intellectual prope rty rights worldwide.  His country, therefore, 
invited the United States to reconsider its position in  the light of its seriously damaging effects, and 
urged the United States, the only WTO Member that systematically failed to comply with the DSB's 
rulings under the TRIPS Agreement, to bring it self into compliance with its WTO obligations. 
10. The representative of Brazil
 said that, in view of its systemic interest, Brazil had been 
expressing its concerns about the continuation of a non-compliance situation in respect of this case. 
Prompt and full implementation of the DSB's ru lings and recommendations was one of the major 
means to keep the rules-based multilateral trading system credible and effective.  If long periods of 
non-implementation, with an apparent  lack of progress, were to become normal or were tolerated, the 
strength of the system would be negatively affected .  In light of these considerations, Brazil urged, 
once again, the United States to take the necessary and urgent measures to bring itself into conformity 
with the relevant DSB's rulings and recommendations. 
11. The representative of China  said that, due to its systemic in terest, China once again wished to 
express its systemic concerns with the protracted im plementation process in this dispute.  First, China 
thanked the Unites States for its status report and the statement made at the present meeting.  China 
also thanked the EC and Cuba for their respec tive statements, which it fully supported.  China 
appreciated the efforts made by the United States dur ing the past five years aimed at implementing the 
DSB's rulings.  However, unfortunately there was no indication when the matter would be resolved to 
the satisfaction of the parties to the dispute and other Members.  As China had stated at previous DSB 
meetings, the prompt and full im plementation of the DSB's rulings and recommendations was one of 
the major cornerstones of the WTO dispute settle ment system.  In the meantime, the prompt 
implementation in this dispute was not only bene ficial to other Members, but also to the 
United States, who was an active advocate of intellectual property rights in all forums.  Therefore, China again urged the United States to fully implem ent, as soon as possible, the decision of the DSB 
pertaining this dispute. 
12. The representative of India
 said that his country wished to thank the United States for its 
situation report and the statement.  However, Indi a noted that there was no substantive change in its 
situation reports over the past several months.  India,  therefore, felt compelled yet again to stress that 
the principle of prompt compliance with rulings and recommendations of the DSB appeared to be 
missing in this dispute.  This was a matter of great  systemic concern, since more than five years had 
now elapsed since the adoption of the recommendations  and rulings of the DSB in this case.  India 
again urged the parties to this dispute to inform th e DSB as to how they intended to fulfil the objective 
of prompt settlement. 
13. The representative of Bolivia  said that, once again, his country had seen the status report 
provided by the United States regarding Section 211,  which did not contain any changes that might 
lead to a solution.  As Bolivia had stated in the p ast, the failure to implemen t the rulings and decisions 
of the DSB was harmful to the trade regime partic ularly in respect of the TRIPS Agreement which 
had been underway for more than five years.  Bo livia would, once again, urge the United States to 
take the necessary efforts to comply  with the decisions of the DSB so  that it could be possible to find 
a solution that would be satisfactory to all affected countries. 
14. The representative of the United States  said that the comments made by the EC about the US 
commitment to intellectual property rights and to  compliance with the recommendations and rulings  WT/DSB/M/226 
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of the DSB were as unwarranted and unfounded now as th ey had been at previous DSB meetings.  For 
further details, the United States referred the EC, its member States, and other delegations to the 
statement made by the United States on 26 October 2006.  Regarding the comment made concerning a 
particular trademark registration, none of the DS B's recommendations or ruli ngs in this proceeding 
related to the renewal of specific trademarks. That comment, therefore, did not relate to "the issue of 
implementation of DSB recommendations and rulings" in this matter. 
15. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.51) 
16. The Chairman  drew attention to document WT/DS184/ 15/Add.51, 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. 
17. The representative of the United States  said that his country had provided a status report in 
this dispute on 8 February 2007, in accordan ce with Article 21.6 of the DSU.  As of 
23 November 2002, the US authorities had addresse d 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 would work with the new C ongress which had convened in January 2007 with 
respect to the recommendations and rulings of the DS B that had not already been addressed by the US 
authorities by 23 November 2002. 
18. The representative of Japan
 said that his country noted the statement by the United States 
along with its latest status report.  Japan was enc ouraged that the US administration would work with 
the new US Congress to pass specific legislative amendments that would implement the DSB's 
recommendations and rulings. However, the implem entation in this case had been under surveillance 
for years and it was Japan's strong hope that the US administration and the new US Congress would 
make tangible progress.  As Japan had repeatedly stated before the DSB, a full and prompt 
implementation of the recommendations and rulings  of the DSB was essential for maintaining the 
credibility of the WTO dispute settlement system.  Japan urged the United States to accelerate its 
work to resolve this dispute once and for all. 
19. 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.26) 
20. The Chairman  drew attention to document WT/DS160/ 24/Add.26, 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. 
21. The representative of the United States  said that his country had provided a status report in 
this dispute on 8 February 2007, in accordance with Article 21.6 of the DSU.  The US administration 
would work closely with the new US Congress and con tinued to confer with the EC in order to reach 
a mutually satisfactory resolution of this matter. 
22. The representative of th e European Communities  said that he wished to make a short 
statement because the United States had not informed  Members of any new developments.  The EC's 
position regarding this dispute was well known, the EC  wished to see the law to be made conform to 
the WTO obligations of the United States.  The EC re mained prepared to work with the United States WT/DSB/M/226 
Page 6  
 
to seek a mutually satisfactory solution to this disp ute and hoped that a soluti on could be found in the 
near future. 
23. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(d) United States – Laws, regul ations and methodology for calculating dumping margins 
("Zeroing"):  Status report by the United States (WT/DS294/20) 
24. The Chairman  drew attention to document WT/DS294/ 20, which contained the status report 
by the United States on progress in the implementa tion of the DSB's recommendations in the case 
concerning US laws, regulations and me thodology for calculating dumping margins. 
25. The representative of the United States  said that his country had provided a status report in 
this dispute on 8 February 2007, in accordance with Article 21.6 of the DSU.  The United States also 
noted that the issue of zeroing was the subject of two other items on the agenda of the present meeting.  As noted in the report, on 6 March 2006,  the US Department of Commerce had published a 
notice requesting comments on its intention to no long er perform average-to-average comparisons in 
anti-dumping investigations without offsets.  On 26 January 2007, the Department had published a 
notice that the date after which it would no longer perform such comparisons would be 
22 February 2007.  The United States intended to continue to work to implement the DSB's 
recommendations in this dispute. 
26. The representative of Japan
 said that the zeroing methodology in average-to-average 
comparison in the original investigations had been  found to be inconsistent with the WTO Agreement 
not only in the case brought by the EC, but also in the dispute to which Japan was the party.  
Therefore, Japan considered that such zeroing methodology should to be abandoned as swiftly as 
possible.  Japan would closely monitor the situati on to see that the United States put an end to this 
methodology on 22 February, as had been publicly announced by the US Department of Commerce 
on 27 December 2006. 
27. The representative of the European Communities  said that on 27 December 2006, the 
United States had published a notice announcing that it would stop using zeroing in original 
investigations when calculating the dumping marg in on a weighted-average -to-weighted-average 
basis.  The EC welcomed the announced change in  methodology, but wished to express its concerns 
that the implementation of this modification had already been postponed twice, from 16 January to 23 January and again to 22 February 2007.  The EC was concerned that this might affect the US 
ability to fully comply with the DSB's ruling by the 9 April deadline.  In this regard, the EC wished to 
ask the United States for a detailed time-table of its proposed implementation of the 31 "as applied" 
cases.  The EC also wished to know why the United States had not yet started its implementation of the 16 "as applied" periodic reviews, given that the United States did not apparently intend to change 
the methodology prior to recalculating the dumping margins in those cases. 
28. The representative of the United States
 said that the date after which the US Department of 
Commerce would no longer perform comparisons wit hout offsets had been established in order to 
allow input from all stakeholders and from the US Congress.  As the EC was aware, there was a 
substantial amount of work involved in responding  to the DSB's recommendations and rulings.  The 
United States was working hard to try to conclude the work by 9 April 2007. 
29. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/226 
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2. United States – Measures relating to zeroing and sunset reviews 
(a) Implementation of the recommendations of the DSB 
30. The Chairman  recalled that, in accordance with the DS U provisions, the DSB was required to 
keep under surveillance the implementation of reco mmendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of 
the DSU provided that the Member concerned shall in form the DSB, within 30 days after the date of 
adoption of the panel or Appellate Body report, of its intentions in respect of implementation of the 
recommendations and rulings of the DSB.  He re called that at its meeting on 23 January 2007, the 
DSB had adopted the Appellate Body Report pertai ning to the dispute:  "United States – Measures 
Relating to Zeroing and Sunset Re views" and the Panel Report on the same matter, as modified by the 
Appellate Body Report.  He invited the United States to inform the DSB of its intentions in respect of 
implementation of the DSB's recommendations. 
31. The representative of the United States  said that his country recognized that anti-dumping was 
a complicated area and that the issue of "zeroing"  was also complex.  There was nothing in the WTO 
Agreements that mentioned or addressed "zeroing."  And as the Appellate Body had made clear in the 
past, the best indicator of the intent of the negotiators  was the text itself.  However, in this dispute the 
Appellate Body had appeared to be trying to infer th e intent of Members with respect to the issue of 
"zeroing" without the benefit of a textual basis.  It  was no surprise then that an interpretive approach, 
based not on agreed text but on inference, should raise a number of problems, both legal and practical. 
32. The United States had provided for the conveni ence of Members a written explanation of its 
objections to the Appellate Body report.1  For the reasons discussed at the 23 January 2007 DSB 
meeting and in the communication distributed at th e present meeting, the United States considered 
that the Appellate Body's findings relating to zer oing outside the context of average-to-average 
comparisons in investigations were devoid of legal me rit.  And with regard to findings on that limited 
context, the United States referred Members to its p ast statements indicating that those findings were 
not beyond serious criticism. 
33. Wholly apart from their legal shortcomings, the Appellate Body's findings suggested forms of 
implementation that simply made no sense from a po licy perspective.  For example, the Appellate 
Body had found that dumping duties might not be cal culated and assessed on an import-specific basis, 
but must instead be calculated for all the merc handise of an exporter or producer. These findings 
suggested that importers of higher-priced me rchandise not responsible for dumping must be 
penalized, either by seeing anti-dumping duties reduced  for their competitors who imported the lower 
priced merchandise responsible for the dumping, or by themselves paying anti-dumping duties 
because of their competitors' conduct. 
34. It was difficult to conclude that Members agre ed upon such an illogical outcome.  The text 
did not support such a conclusion, nor did the actions of the Members following the completion of the text.  As was well known, all the major users of the anti-dumping instrument continued to zero 
following the implementation of the Anti-Dumping Agreement.  Even after the Appellate Body 
reports on zeroing in the average-to-average contex t, eight of nine impartial anti-dumping experts 
agreed that the text did not prohibit zeroing beyond that context. Were this a municipal court result, 
such an illogical outcome would be a prime candidate for reconsideration by the legislative branch.  That was no less the case here, and the United States submitted that Members take up this issue, which affected the anti-dumping systems of a number of Members, in the Rules negotiations.  Having 
said that, the United States wished to state that it intended to comply in this dispute with its WTO 
obligations and would be considering carefully how to do so.  The United States would need a 
reasonable period of time. 
                                                     
 
1 Subsequently circulated in document WT/DS322/16. WT/DSB/M/226 
Page 8  
 
35. The representative of Japan
 said that his country welcomed the statement of intention made 
by the United States that it would bring into conformity with the WTO Agreement its zeroing procedures, and was prepared to enter into c onsultation with the United States on the reasonable 
period of time, if needed, for the United States to  implement the recommendations of the DSB. Japan 
wished to stress that, in this dispute, the Appellate  Body had decided that zeroing was prohibited in all 
circumstances whenever calculating the "margins of dumping".  The Appellate Body had reached the 
conclusions that the zeroing procedures were as such WTO-inconsistent: (i) in original investigations 
in the context of transaction-to-transaction comparison method; (ii) in periodic reviews, and (iii) in 
new shipper reviews.  The Appellate Body had fu rther found that, in addition to specific periodic 
reviews, by relying on the margin of dumping calculated using zeroing, the sunset reviews at issue 
were also WTO-inconsistent.  Thus, the measures to be taken by the United States for compliance 
must have coverage wide enough to bring all th ese measures into conformity, going beyond the mere 
abolishment of zeroing procedures in average-to-avera ge comparison in the original investigation, as 
it currently planned to effectuate in the coming days. 
36. The DSU provided that the adopted Appellate  Body Report "shall be [ ] unconditionally 
accepted by the parties to the dispute" (Article 17.14).  The DSU further stated that "[p]rompt 
compliance with [DSB recommendations] was essential in order to ensure effective resolution of 
disputes" (Article 21.1) and directed Members to "comply immediately with the recommendations and rulings," (Article 21.3).  Japan also recalled that the DSU recognized th at the "all Members will 
engage in [the dispute settlement] procedures in good  faith in an effort to resolve the dispute" 
(Article 3.10). 
37. The United States continued applying zeroing in a variety of anti-dumping proceedings 
including periodic reviews, which had practical, commercial consequences in the real world of 
international trade.  As the Appellate Body had taken a decision, the United States was expected to 
take action by bringing all of the challenged measures into compliance.  Japan strongly urged the United States to take measures immediately to resolv e this dispute once and for all.  Japan was ready 
to start consultations with the United States rega rding specific implementing measures both in terms 
of the "as applied" claims and the "as such" claims.  Japan believed that the reasonable period of time for implementation should be limited to the shortest possible extent to allow the United States to take 
necessary measures from the viewpoint of the require ments under the DSU, as previously mentioned. 
Japan recalled that, as a matter of urgency, the an ti-dumping duties subject to Japan's "as applied" 
claims in this dispute were bei ng liquidated one by one, which practically prevented the United States' 
implementation of the recommendation concerning these claims.  As stated above, the United States 
was obliged to promptly comply with the recomme ndations, and Japan, therefore, strongly urged the 
United States to take all steps available in order to prevent further liquidation and ensure the full 
implementation of the recommendation. 
38. The representative of India
 said that his country thanked the United States for its statement 
and written comments on the Appellate Body report in this case. While India would examine these 
comments, it welcomed the US stated intention to  implement the DSB's recommendations.  Since his 
delegation had been unable to make a statement on this  subject at the past DSB meeting, it wished to 
make a brief statement at the present meeting.  India welcomed the Appellate Body Report in the 
matter on:  "United States – Measures Relating to Ze roing and Sunset Reviews" and noted especially 
that the Appellate Body had clearly held that th e US "zeroing procedures" constituted a measure that 
could be challenged as such.  The A ppellate Body had also clearly held that the United States acted 
inconsistently with Articles 2.4, 2.4.2, 9.3,  9.5 and 11 of the Anti-Dumping Agreement by 
adopting/maintaining zeroing procedures in original and various review investigations.  He recalled 
that the issue of clarifying and improving disciplin es in respect of zeroing had also been a major 
negotiating issue in the current round of WTO nego tiations on Rules.  Several Members, including 
India, had expressed the view that there should be express provision in the Agreement prohibiting 
zeroing in any form, including all investigations so th at such disputes could be avoided in the future.  
India had a systemic interest in this issue and, therefore, had been actively supporting these proposals.  WT/DSB/M/226 
 Page 9 
 
 
India had also been a third party in several disput es on this issue in recent years. India believed that 
the findings of the Appellate Body in the matter re ferred to above had settled most of the issues 
relating to the practice and procedures of zeroing in  the fair comparison methodology in anti-dumping 
investigations and should now pave the way for an ear ly conclusion of negotiations on this issue in the 
Negotiating Group on Rules. 
39. The representative of the European Communities  said that the issue of zeroing had been 
subject to numerous litigations since the first case had been brought against the EC in 1998.  Since 
then, 12 disputes had been brought against the use of zeroing by the United States whether as the unique subject of the dispute or as part of a wider dispute.  The United States might be upset by the 
outcome of these disputes. But, the fact was that all issues of law had now been extensively pleaded 
and analysed.  All points of criticism raised by the United States had already been answered and 
proved unfounded.  There was no doubt left that zeroi ng ran foul of fundamental obligations of the 
Anti-Dumping Agreement which were to establish du mping in respect of an exporter and a certain 
product and to conduct a fair comparison between the export prices and normal value. 
40. The representative of Canada
 said that his country welcomed the statement made by the 
United States that it would comply with the rulings and recommendations of the DSB.  In this respect, 
Canada noted the substantive written and oral co mments of the United States.  As a matter of 
principle, the DSB was the proper place for Members to address dispute settlement issues that were of 
concern to them, including questions of legal inte rpretation in panel and Appellate Body reports; 
indeed the DSU specifically provid ed for this.  However, to en able a fuller discussion, Members 
might wish to distribute their written comments well in  advance of the meeting at which a subject was 
to be discussed.  In this way, Members could have the opportunity to discuss these matters with 
capitals and to come to the DSB with well-consider ed views. This was all the more important when 
one was dealing with such highly technical matte rs.  He said that he would transmit the written 
comments back to Ottawa, and reserved Canada's right to return to this matter with a more 
comprehensive analysis and response at a future date. 
41. The representative of Mexico  said that his country had not been aware of the fact that the 
United States would submit written comments regarding this matter.  On the basis of the discussion taking place at the present meeting, it seemed that the issue of zeroing was quite far from being resolved.  Mexico was currently participating in discussions with the United States regarding this 
methodology. Unfortunately, the statement made by the United States at the present meeting did not 
encourage Mexico to believe that this would be the end of the dispute.  Mexico urged the United 
States to take into account that enormous resourc es were being invested by countries in order to 
resolve disputes. Mexico was not the only country s ubject to this methodology and, given the current 
situation, one could well predict that more resources  would have to be invested by other countries in 
order to have the method of zeroing declared incompatible with the DSU provisions. 
42. 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. 
3. Implementation by the European Communiti es of the recommendations and rulings of 
the DSB in relation to "European Communiti es – Regime for the Importation, Sale and 
Distribution of Bananas"2 and related subsequent WTO proceedings 
(a) Statements by Honduras, Nicaragua and Panama 
43. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Honduras, Nicaragua and Panama, and invited the re presentatives of the respective countries to speak. 
                                                      
2 WT/DS27. WT/DSB/M/226 
Page 10  
 
44. The representative of Honduras
 said that his country wished to refer to its prior statements on 
this matter and would only make a brief statement at the present meeting.  As previously noted, 
Honduras in its capacity as an original complainan t in the Bananas III dispute, had concluded its 
60-day Article 21.5 consultation peri od on 30 January 2006.  Since th e consultations, and all efforts 
since then, had failed to resolve the matter, ther e continued to be a clear disagreement between 
Honduras and the EC over the WTO-consistency of the compliance measures taken by the EC.  The 
commercial circumstances that originally had give n rise to the Article 21.5 consultation request by 
Honduras, continued to make this disagreement a matter of urgent priority for Honduras.  The full-
year EC data showed that ACP banana shipments to the EC grew by 142,000 mt in 2006 and were 
expected to grow an additional 190,000 mt in 2007.   By comparison, Honduras' banana industry in 
2006 had one of the poorest market shares and im port-value performances of all Latin American 
banana suppliers to the EC market.  Honduras' ma rket share had declined by 16 per cent and its 
import value was down by 37 per cent.  Because other large MFN banana suppliers transferred 
displaced EC volumes to the US market, Honduras'  2006 shipments to the United States suffered as 
well, declining by 8 per cent over 2005 levels.  With  ACP market gains expected to multiply in 2007, 
Honduras was projected to sustain even larger EC  and US market losses this coming year. The EC 
prices, which for large periods of 2006 had already been beneath Honduras' FOB costs plus freight, were also expected to decline further in 2007, meaning Honduran producer returns were likely to 
decline as well.  With the need for relief still so  imperative, Honduras welcomed the fact that a 
growing number of Members were calling for prompt redress.  Honduras looked forward to working in coordination with the affected suppliers on the ad ditional steps now required to deliver substantial, 
near-term access improvements.  As those efforts progressed, he wished again to make clear that 
Honduras, as an original Bananas III complainant, reta ined its full-party Article 21.5 rights to protect 
its important producing interests. 
45. The representative of Nicaragua
 said that at the end of January, her country had circulated a 
communication to all Members, which focussed on th ree main points:  (i) that it was necessary to 
achieve a full and prompt settlement of  this dispute;  (ii) that Nicara gua would work to ensure that any 
effort to deal with this matter involved direct par ticipation by Nicaragua and that, in the short term, it 
generated benefits for Nicaraguan pr oducers;  and (iii) that if a prompt and full settlement was not 
achieved, Nicaragua would need to take whatev er further steps were necessary to protect its 
substantial trade interest.  Nicaragua had issued this communication after participating in year-long 
DSB meetings and after holding consultations a nd informal exchanges in which the EC had 
repeatedly made it clear that there would be no  access reforms in the short term. Over the past 
12 months, the EC had only stated that it needed more time to examine the statistics and to evaluate 
the different options that would be available to it once there was clarity regarding the future of the 
Doha Round.  It had shown no sign of being prepared to reduce its restrictions on access in the short 
term, still less had it demonstrated a readiness to pr ovide specific details.  Although it had hinted that 
it would be prepared to bind the tariff at a future date, once the outcome of the Doha Round had been 
defined, a binding at around the level of €176/mt or above would only legitimize a prohibitive tariff 
for Nicaraguan producers.  In the absence of pr ompt substantial improvements, the Nicaraguan 
banana industry, which provided th ousands of jobs for the country's large rural population:  (i) would 
continue to be excluded from the EC market;  and (ii) would continue to lose market share in the 
United States, because of the volumes that have been illegally displaced from the EC market.  In order 
to prevent its rural producers and its labour for ce from continuing to suffer injustices, Nicaragua 
urged the EC to find a prompt solution to this case, one which took account of the interests of all suppliers. 
46. The representative of Panama
 said that in recent months, Members had heard the EC express 
its commitment to "maintaining MFN access to the EC market". When Panama had asked how this 
statement could be supported, given that the in creased ACP preferences were generating enormous 
gains at the expense of MFN market share, the EC simply said that the changes favouring the ACP 
countries were not relevant with regard to "equi valent market access".  Panama did not understand 
how, either legally or statistically, the EC could make these assertions.  From the legal standpoint:   WT/DSB/M/226 
 Page 11 
 
 
(i) the EC's banana waiver had already expired, which meant that its differentiated tariff and ACP 
quota were clearly illegal;  (ii) The EC would no doubt recall that the 2005 arbitration award had 
determined that "equivalent market access" for La tin American suppliers could only be measured in 
terms of the relative gains by ACP over MFN supp liers under the new arrangement;  (iii) full-year 
data for 2006 provided clear evidence that the ACP suppliers had used more than double their new 
preference, surpassing MFN suppliers by a wide ma rgin;  (iv) while ACP suppliers had gained 
considerable EC market share, the MFN suppliers , including Panama, had lost their market share; 
(v) while practically all the ACP suppliers had in creased their shipments to the EC, with record 
growth rates, a good number of traditional major La tin American suppliers had lost volume and some 
had now been completely squeezed out of the market ;  (vi) while EC imports from Latin America had 
fallen in value by more than US$700 million, ther e was no decline whatsoever in the corresponding 
ACP figures (leaving aside climate conditions in Cameroon);  (vii) these circumstances could hardly be described as pertaining to a non-discriminatory  "equivalent" market;  and (viii) Panama, for its 
part, considered that the current access arra ngements were discriminatory, regressive and 
unacceptable.  Panama was, therefore, prepared to defend its substantial produ ction interests in this 
area. 
47. The representative of Brazil
 said that her country wished to thank Honduras, Nicaragua and 
Panama for bringing, once again, this issue to the attention of the DSB.  Regrettably, more than 14 years had gone by since the bananas dispute ha d first appeared on the GATT/WTO agenda and it 
had been more than a year since this item appear ed on the DSB agenda.  In January 2006 the EC had 
put an end to the regime for the importation of bananas found illegal by successive DSB decisions.  At 
that time, the EC had taken the first action toward s consistency with its WTO obligations.  It had 
replaced the condemned tariff-quota regime with a ta riff-only system.  Notwithstanding the EC efforts 
to comply with the multilateral rules, there were s till other steps to be taken.  The present system had 
been applied on a provisional basis, since no de finitive tariff regime for MFN bananas had been 
established. More than one year after the commencement of such regime, there could not be any 
reasonable explanation by the EC for not rebinding the applied tariff. This situation, as all knew, 
engendered uncertainty for the MFN suppliers, w ho were entitled as any other WTO Member to a 
minimum degree of predictability as regards market access conditions to  the EC.  Therefore, with a 
view to affording those suppliers their legitimate rights, Brazil urged the EC to take the necessary 
measures to rebind a definitive tariff-only regime for MFN bananas. 
48. The representative of the European Communities
 said that the EC 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 inte rests into consideration.  The EC had always 
been and remained committed to maintaining access to the EC market by all banana supplying 
countries.  According to the data on overall MFN im ports available to date, the EC had succeeded in 
this. The data gave no reason to believe that su ch 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 previous years.  The EC commitments did not in clude a commitment to "guarantee specific market 
shares and prices" but only equivalent market access.   The EC continued to think that there remained 
sufficient political will to work towards a definitive negotiated solution to this long-standing dispute 
in 2007.  The EC was committed to work in this di rection with all interest ed Members.  The EC 
would not repeat its prior statements explaining as to why this matter was not an "implementation 
issue" covered by Article 21 of the DSU. 
49. The representative of the United States
 said that, as Members were well aware, at Doha the 
EC had committed itself to shift to a tariff-only regi me by 1 January 2006.  As one of the original 
complaining parties in the dispute that had led to the DSB's recommendations and rulings in the 
Bananas dispute, the United States had looked forward to this long-running dispute finally being 
resolved at the start of 2006.  That year had now  come and gone, and no resolution was in sight. The 
United States continued to hear reports that unde r the new regime market conditions for some MFN WT/DSB/M/226 
Page 12  
 
suppliers were worsening.  The United States continue d to urge the EC to work with all interested 
Members to resolve this years-long dispute. 
50. The DSB took note
 of the statements.  
4. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by Canada, the European Communities and Japan 
51. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Canada, the European Communities and Japan.  He then invited the respective representatives to 
speak. 
52. The representative of Canada  said that while his country appreciated the steps the 
United States had taken towards implementing the ru lings and recommendations in this dispute, 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 this legislation.  As such, Canada believed that the US  claim, made in its last status 
report from over a year ago, that it had "taken th e actions necessary to implement the rulings and 
recommendations" in this dispute was not accurate.  Canada, therefore, called on the United States to 
resume the submission of status reports and to repeal the Byrd Amendment. 
53. The representative of Japan
 said that the latest CDSOA disbursements reported as such by the 
US Customs and Border Protection in November 2006 made clear that the CDSOA still remained 
fully operative and illegal disbursements under the CD SOA would continue for years to come.  This 
meant that, contrary to what the United States had stated in the previous DSB meetings, the DSB's 
recommendations and rulings had not yet been fu lly implemented by the United States.  The 
United States must stop any future disbursements regardless of the sources of duties collected, and 
must comply fully with the DSB's recommendations and ruling without further delay.  Japan also reiterated that the United States was under the obliga tion to provide the DSB with a status report, 
pursuant to Article 21.6 of the DSU.  Japan reserved all its rights under the DSU until the 
United States fully complied with its obligations. 
54. The representative of the European Communities
 said that the Continued Dumping and 
Subsidy Offset Act had been condemned by the DSB more than four years ago, and the transfers of 
the anti-dumping and countervailing duties should have  stopped more than three years ago.  Instead, 
in November 2006, the United States had distributed  the highest amount thus far under the CDSOA, 
despite the fact that anti-dumping and countervailing duties collected on goods from Canada and 
Mexico were not distributed any longer.  The Un ited States was hiding be hind the repeal of the 
CDSOA to claim compliance with the DSB's rulings a nd conveniently ignored that a transition period 
would maintain the WTO illegal distributions until at least the fiscal year 2010 according to an estimate of the US Congressional Budget Office.  The truth was that, as long as the redistribution of collected duties continued, the United States would be in breach of Article 18.1 of the Anti-Dumping 
Agreement and Article 32.1 of the SCM Agreemen t and full implementation would still have to be 
delivered.  The EC, therefore, asked again the Unite d States if and what steps it intended to take to 
stop the transfer of anti-dumping and countervailing duties without further delay.  The EC also renewed its call on the United States to abide by its  clear obligation under Article 21.6 of the DSU 
and to submit status reports on im plementation in this dispute. 
55. The representative of Brazil
 said that his country thanked Canada, the EC and Japan for 
keeping this matter on the DSB agenda.  While Brazil reaffirmed its appreciation for the repeal of the 
Byrd Amendment, it was convinced that the appro ach taken by the United States impaired the proper 
functioning of the WTO dispute settlement system. No t to mention the United States' delay to actually  WT/DSB/M/226 
 Page 13 
 
 
repeal the illegal measure, the United States had decide d to create a mechanism by which it could, in 
the US view, claim to have fully complied with  the DSB's recommendations while the very same 
violations would still be in place for a long period of time.  As a matter of fact, disbursements under 
the Byrd Amendment had reached a record amount in 2006 fiscal year, after the claimed repeal of the 
illegal measure.  Members dissatisfied with such situ ation should, again in the US view, resort to 
dispute settlement procedures, as though the origin al recommendations had not existed. If this 
approach were to be endorsed by the DSB, what would prevent a responding party from revoking a WTO-inconsistent measure in five, ten, 15 or more years time after the law repealing the said measure is published?  What if, instead of a one-time pros pective repeal, a responding party decided to renew 
and postpone the actual effect of the repeal every time the previous deadline approached? Did that 
mean full compliance with the DSB's recommendati ons?  His delegation could only offer Brazil's 
answer to this question, which could only be a de finitive and unequivocal "no".  Brazil invited other 
delegations to reflect upon this, taking into c onsideration that the major players bore a greater 
responsibility in preserving the credibility of the system. 
56. The representative of China
 said that his country thanked and supported Canada, the EC and 
Japan for raising this item at the present meeting.  China appreciated the effort s of the United States to 
implement the DSB's rulings and recommendations in this dispute and welcomed the repeal of the 
CDSOA.  However, China shared the same vi ew expressed by previous speakers that the 
implementation issue had not been resolved in this dispute within the framework of Article 21 of the 
DSU.  It was the obligation of a Member to fu lly and promptly implement the DSB's rulings and 
recommendations, which was critically important to the credibility and efficiency of the dispute 
settlement system.  Therefore, Chin a wished to join previous speaker s in urging the United States to 
comply fully and promptly with the DSB's rulings. 
57. The representative of Thailand  said that first his country thanked Canada, the EC, and Japan 
for once again bringing this matter before the DSB.   Thailand remained disappointed at the United 
States' continued illegal disbursement of funds under the CDSOA.  Likewise, Thailand remained 
disappointed at the Unites States' continued refusal  to submit any status report on its outstanding 
implementation in this dispute.  Therefore, Thaila nd repeated its call for the United States to cease 
these WTO-inconsistent disbursements, to repeal the Byrd Amendment with immediate practical effect, and to resume providing status reports until su ch actions were taken and this matter had been 
fully resolved. 
58. The representative of India
 said that his country wished to thank Canada, the EC and Japan 
for raising this issue in the DSB yet again.  Unfo rtunately, India was still to get a response from the 
United States to its long-standing question as to how it squared up its compliance obligations with 
continued disbursement of collected anti-dumping and countervailing duties to its industry, almost 
fours years after these should have stopped.  The latest data available in the CDSOA Annual Report 
of the US Customs and Border Protection for the fi scal year 2006 only proved India's point that the 
United States was not in compliance with its obligat ions.  In spite of this, all the United States had 
done was to reiterate its indefens ible position.  Such unilateral action was indeed regrettable as it 
undermined the WTO dispute settlement system.  Indi a, therefore, again urged the United States to 
inform the DSB of the steps it proposed to take to  ensure full compliance, and reiterates its request 
that the United States resume submitting status reports in this dispute. 
59. 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 provisi on repealing the Continued Dumping and Subsidy 
Offset Act of 2000.  Thus, the United States had ta ken all actions necessary to implement the DSB's 
recommendations and rulings in these disputes.  With  respect to comments regarding further status 
reports in this matter, as the United States had alr eady explained, the United States had taken all steps 
necessary to implement the DSB's recommendations and rulings in these disputes.  Those Members 
who had inscribed this item on the agenda of the present meeting were, of course, free to do so, but WT/DSB/M/226 
Page 14  
 
the United States failed to see what purpose would be served by the further submission of status reports repeating the progress the United States had made in the implementation of the DSB's recommendations and rulings. 
60. The DSB took note
 of the statements. 
5.  United States – Subsidies on upland cotton 
(a) Statement by Brazil concerning untimely filings of submissions 
61. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Brazil and invited the representative of Brazil to speak. 
62. The representative of Brazil  said that, as indicated on the agenda of the present meeting, his 
country wished to address systemic concerns arising from the untimely filing of a series of US 
documents in the Cotton dispute.  The decision to bring this issue to the DSB was the result of a 
thorough examination by Brazil of its systemic re levance for all Members.  As the body empowered 
to administer the rules and procedures set forth in the DSU, the DSB was an appropriate forum for the 
discussion of this serious matter. In raising this issu e, Brazil did not expect the DSB to interfere with 
the Cotton implementation panel or any other panels' work as to their authority or ability to take 
action against procedural misbehaviour by the pa rties to disputes.  As Members would find, for 
instance, in the report of the original Panel in the Cotton dispute, Brazil had expressed its concerns about untimely filings of a series of US  documents throughout these proceedings
3, and Brazil would 
continue to do so as untimely filings recurred.  However, and because Brazil considered that 
procedural fairness and balance were among the fou ndations of a credible dispute settlement system, 
Brazil believed that all Members should be aware of the situation Brazil had been facing since the 
early stages of the Cotton dispute as a result of US behaviour in respect of the service of documents.  
Brazil's resources and time could be better invested in addressing substantive issues related to this dispute, particularly in view of the upcoming me eting with the compliance Panel, but, regardless of 
the costs, Brazil felt it should not wish to wait for the next missed deadline. 
63. At the risk of undercounting, Brazil recalled th at the United States had missed nine deadlines 
in the Cotton dispute, two of them during the complia nce Panel stage. No justification or explanation 
had been given by the United States for untimely fili ngs before or upon late transmittal of documents. 
Subsequent US communications tried to blame Braz il for US delays, but did not show any good cause 
for them. Moreover, most of the deadlines had not b een respected by the Unite d States after the Panels 
had already granted it extensions of time to submit its documents. Even more seriously, most of those 
deadlines had been missed after the Panels had fu rther underscored the precise date and the hour of 
those deadlines. These were serious breaches of du e process requirements.  Deadlines could not be 
taken lightly.  Panels would not be require d, under Article 12.5 of the DSU, to set precise  deadlines, if 
Members were allowed to approach them on a "best efforts" basis.  The United States had essentially 
claimed for itself the right to decide when to file  submissions in dispute settlement proceedings, in 
flagrant and unacceptable defiance of the Panel's authority, and in disregard of the rules and 
procedures of the DSU. 
64. Brazil – a developing country with serious bud getary and human resources constraints – had 
been faced with extremely short d eadlines in this dispute.  Nonetheless, Brazil had been meeting the 
deadlines established, and would continue to do so. In addition, Brazil had shown maximum 
flexibility to accommodate US requests for additional time, in light of Brazil's interest in having a 
high quality final report.  As an illustration, Brazil – conscious of the complexity of the dispute – had 
recognized right from the start the difficulty for the Panel to abide by the 90-day time period set out in 
                                                     
 
3 Panel Report (WT/DS267/R), paras. 7.43-7.46.  See also Brazil’s letters of 14 July 2003, 
14 August 2003, 28 August 2003, 2 October 2003, and 23  December 2003, recorded in Annex K to the Panel 
Report.  WT/DSB/M/226 
 Page 15 
 
 
Article 21.5 of the DSU.  Under the current time-tab le, the final report was expected to be circulated 
to all Members in July, ten months after the estab lishment of the compliance Panel.  Brazil had not 
opposed this time-frame – a time-frame that Members would normally accept for original panel proceedings, rather than compliance panel proceed ings. There was not, therefore, any convincing 
reason for the United States to justify its conduct and the consequent impairment of Brazil's right to 
due process and fair procedures.  In inviting the Membership to undertake a careful examination of 
this issue, Brazil wished that the DSB take note of its  concerns and reserved the right to revert to this 
matter, as appropriate. 
65. The representative of the United States
 said that regrettably this agenda item continued a 
pattern of behaviour that his country had seen with  Brazil in the Cotton dispute.  Brazil had sought 
press attention on this dispute numerous times – in cluding to discuss panel proceedings that Brazil 
had itself insisted be treated as confidential – and Brazil had complained about the conduct of this 
dispute at the DSB.  In this latest instance, Br azil once again was taking up the time and resources of 
the DSB Members on issues that were not properly raised in this forum. At the October 2006 DSB 
meeting, Brazil had breached the confidentiality of the panel composition process to complain that the 
WTO Director General had acted contrary to the DSU by recognizing US rights in appointing the 
Article 21.5 "compliance" panel in the Cotton dispute.   At the present meeting,  Brazil complained to 
the DSB that the United States had not made its submissions by 5:30 p.m. on the due date.  The 
United States was surprised that Brazil considered this  an issue worthy of consideration by the DSB.  
Brazil had already raised this issue with the Cott on compliance panel and had received their response.  
The United States had full confidence in the Panel's ab ility to handle these types of procedural issues.  
And the United States did not see anything to be added by also complaining to the DSB.  The fact that 
practical difficulties might sometimes render it impossible to provide submissions by 5.30 p.m. did not reflect a lack of effort or good will on the part of the submitting party.  Moreover, the interests at stake in a particular dispute were advanced when al l parties were able to present their views to the 
most complete extent.  But Brazil's approach was to deny the Panel access on the due date to the 
submission in its entirety and had instead forced the panel to listen to the entire submission read as an 
oral statement at the panel meeting. 
66. This made no sense for the dispute settlement system nor was it in Brazil's own interest.  
Members were aware that deadlines in WTO proceedings were extremely tight.  And all WTO Members, including the United States, worked very ha rd to provide timely submissions.  But this was 
not always possible, as any Member participating in dispute settlement proceedings knew well. In 
fact, in the same week of the US rebuttal submis sion in the Cotton compliance proceeding, the United 
States had received two other Members' submissions in two other disputes many hours after 5:30 p.m.  
One of those late filings had been submitted in a dispute involving the same counsel as that of Brazil 
in the Cotton dispute.  And, in another ongoing di spute in which the United States was involved, a 
Member had provided a submission not merely a few hours after 5.30, but three days  later.  These 
were just a few recent examples.  Should every one  of these instances have  become a DSB agenda 
item? In the Cotton compliance proceeding, Brazil had had many months to prepare and submit over 250 pages of argumentation and close to 2,500 pages in exhibits in its first submission.  It had then 
submitted 220 pages of argumentation and over 1,000 pages of exhibits  in its rebuttal submission.  
The United States had undertaken extraordinary effo rts to respond to these submissions within the 
short deadlines applicable in co mpliance proceedings.  While the United States had ultimately been 
able to submit a response by the due date, it had simp ly been unable – despite its best efforts – to do 
so by 5:30 p.m. 
67. The representative of the European Communities
 said that the EC thanked Brazil for bringing 
this matter to the DSB's attention.  The EC had had its own experience with WTO disputes in which 
the other party had filed its submissions well after the deadline set by the panel.  This problem was 
also well documented in dispute settlement reports, for instance in the panel report in "US – Upland 
Cotton".  The EC recalled that Article 12.5 of th e DSU stipulated that "Panels should set precise 
deadlines for written submissions by the parties and the parties should respect those deadlines."  This WT/DSB/M/226 
Page 16  
 
"should" did not mean that the parties merely had to "try to" meet the deadlines, or were asked to do 
so if they wanted.  In the legally binding text of the DSU, this "should" mean that a party was required 
to meet the deadline unless there were valid reasons  for not doing so.  It was important to take 
deadlines in dispute settlement seriously.  It was a cr ucial aspect of showing respect for the panels and 
the Appellate Body which set them.  These deadlines were also important in that they embodied the 
principle of procedural fairness by ensuring that no party obtained an illegitimate advantage over the 
other party.  Such illegitimate a dvantage would arise where one party, as a result of the delay, secured 
for itself more time than it had been allotted in the time-table which was drawn up with a view to 
guarantee procedural equality.  An additional illegitimate advantage ar ose in those situations where 
both parties filed a submission by the same deadline wh en neither was supposed to be able to take the 
other party's submission into account for its own subm ission.  Also, the late filing not only disrupted 
the work of all those who had been  waiting for the submission in ques tion, but also used up the time 
they had until their own upcoming deadline.  All th is was to say that the EC urged WTO Members to 
respect deadlines in dispute settlement .  No Member could consider itself above the law, or permit to 
ignore deadlines at free will.  Where, exceptionally a deadline could not be met, be it only by a few 
hours, it was the least that the party in question anno unced this delay before the deadline's expiry, and 
that it justified the delay afterwards with a valid reason. 
68. The representative of Canada
 said that his country thanked Brazil for bringing to the attention 
of the DSB the importance of all Members' abiding by  the rules of procedure set  out by panels and the 
Appellate Body, including those related to the timely filing of written submissions.  Canada had, in 
past disputes, raised similar concerns before pane ls and the Appellate Body and, in the context of 
those specific cases, Canada had proposed sanctions  or other measures to be taken by a panel to 
address its concerns.  Canada had not always been su ccessful in its requests for sanctions to apply to 
Members that acted inconsistently with the rules of procedures set down by panels.  In this light, 
Canada shared Brazil's general poi nt concerning the importance of ob serving rules of procedure in 
dispute settlement proceedings.  These rules, if they were to mean anything, must be considered as 
deadlines and not merely guidelines.  However, wh ile the DSB was the appropriate forum to discuss 
general points related to the operation of the DSU, it was not, in Canada's view, the forum in which to 
raise procedural concern in the context of a discrete case.  Canada noted that these were issues over which panels and the Appellate Body had sole juri sdiction. Nothing in the DSU permited the DSB to 
act as a forum for interlocutory procedural appeal s, and the DSB should not take on the role of an 
arbiter of procedural issues in an on-going case.  Canada noted that, in the case at hand, Brazil had 
already raised its concerns with the Panel and that  the Panel had yet to address them; for Members, 
gathered in a diplomatic forum, even to discuss th e merits of Brazil's complaint would inappropriately 
undermine the independence of the Panel.  Canada r ecognized that this was not Brazil's intention, but 
it should not even appear to head in that direc tion.  Canada, therefore, encouraged Members to 
exercise restraint in raising before  the DSB issues subject to adjudication in the context of confidential 
panel proceedings. 
69. The DSB took note
 of the statements.  
6. United States – Anti-dumping measure on shrimp from Ecuador 
(a) Report of the Panel (WT/DS335/R) 
70. The Chairman  recalled that at its meeting on 19 July  2006, the DSB had established a panel to 
examine the complaint by Ecuador pertaining to this  matter.  The Report of the Panel contained in 
WT/DS335/R had been circulated on 30 January 2007 as an unrestricted document.  The Report of the 
Panel was now before the DSB for adoption at the request of Ecuador.  The adoption procedure was 
without prejudice to the right of Members to express their views on the Report. 
71. The representative of Ecuador  said that his country welcomed the Panel's decision, which had 
been circulated on 30 January 2007, on the use of  "zeroing" by the US Department of Commerce  WT/DSB/M/226 
 Page 17 
 
 
(DOC) in its anti-dumping investigation of certain  frozen warmwater shrimp from Ecuador.  Ecuador 
wished to thank the Panel and the Secretariat for th eir hard work in resolving this matter.  Ecuador 
also thanked the United States for its cooperation in  reaching a procedural agreement with Ecuador 
that had resulted in expedited proceedings before the Panel.  The matter referred to the Panel was 
quite specific.  Ecuador had asked the Panel to examine whether the DOC's practice of zeroing as 
applied in the original investigation, when it ha d used the average-to-average method in comparing 
export price to normal value, was consistent with Article 2.4.2 of the Anti-Dumping Agreement.  The 
DSB was familiar with all aspects of zeroing so th ere was no need for an extended discussion at this 
time of the mechanics of zeroing or the analy ses contained in prior Pa nel and Appellate Body 
decisions on the subject. Suffice it to say that the Panel had found that the use of zeroing was not 
consistent with the Anti-Dumping Agreement base d on its independent review of the relevant 
provisions of the Agreement in light of an undisputed factual record.  The Panel had also relied in part 
on the Appellate Body's decisions in "US – Softwood Lumber V"  and "US –  Zeroing (EC )", which 
the Panel had found to be "persuasive" in its analysis. 
72. If, as Ecuador hoped, the DSB would adopt the Panel Report, then the United States, under its 
procedural agreement, would have six months in wh ich to bring its measures into conformity with the 
Anti-Dumping Agreement by issuing a new decision that eliminated zeroing.  The original anti-
dumping order that the DOC had issued continued to have serious advers e effects on Ecuador's 
shrimp industry, which was one of Ec uador's largest employers.  In light of the financial hardship that 
the order had imposed on Ecuador, his country wished  to take this opportunity to urge the United 
States to make every effort to complete its work in less than the maximum six-month period allowed 
by the Agreement.  In fact, Ecuador knew from published news reports that the US DOC had been 
working diligently for some months to revi se its method of calculating dumping margins in 
investigations without the use of zeroing.  Therefor e, the required margin recalculations for Ecuador's 
exports should be a relatively simple and quick matte r to complete. Ecuador fully expected that these 
recalculations would lead to a finding of no dumpi ng.  This had been Ecuador's contention since the 
very start of the investigation in December 2003.   Unfortunately, for as long as the anti-dumping 
order continued in effect, an injustice was perpet uated.  Ecuador hoped that the United States would 
act expeditiously and in good faith to eliminate that injustice. 
73. The representative of the United States  said that his country wished to begin by thanking the 
Panel and the Secretariat for their hard work.  As the United States had indicated in its statements on 
zeroing in the past, US concerns with findings on the topic had been principally directed at those 
findings relating to zeroing outside the context of av erage-to-average comparisons in investigations.  
As the United States had explained previously in  this meeting and in the written communication 
submitted at the present meeting, there simply was no basis in the Anti-Dumping Agreement for 
concluding that there was a broad prohibition on zeroing outside that limited context.  With regard to 
zeroing in the context of average-to-average co mparisons in investigations, as discussed under a 
previous agenda item, the US Department of Co mmerce had announced several months ago that it 
would discontinue zeroing in this context as a r esult of earlier DSB recommendations and rulings.  
Accordingly, in the present dispute, the United St ates and Ecuador had sought an efficient means of 
addressing Ecuador's claims with a minimal burden on the resources of the parties and the dispute settlement system.  The United States believed the pr ocedural agreement it had reached achieved that 
goal.  The United States appreciated Ecuador's cooperation during this dispute. 
74. The representative of the European Communities
 said that the EC had followed this dispute 
with some interest, both because it supported the continuing efforts of a large number of WTO Members to have the United States stop the use of zeroing in anti-dumping proceedings, but also because of the innovative nature of the procedural agreement reached by the parties.  The EC was 
satisfied with the Panel Report.  It was satisfied fi rst, because the Panel had not simply accepted, in an 
unquestioning manner, the procedural agreement be tween the parties, but had insisted, as it was 
required pursuant to Article 11 of the DSU, that Ec uador put forward a prima facie case.  Second, the 
EC was also satisfied that the Panel had, once more, confirmed that zeroing was not an acceptable WT/DSB/M/226 
Page 18  
 
practice under the WTO Anti-Dumping Agreement. Fi nally, the EC would also commend the Panel 
for the expedited manner in which it had handled th e case and respect for the deadlines in the DSU.  
That said, the satisfaction of the EC was not unq ualified. The EC wondered why it had been necessary 
to have recourse to a panel procedure, when th e defendant WTO Member had not contested the WTO-
inconsistency of the measures in question.  This required the dispute settlement bodies of the WTO, 
the Secretariat, and a number of WTO Member s to expend precious limited resources on a dispute 
where there was in reality no dispute.  It had dela yed the US coming into conformity by a number of 
months. 
75. The representative of Brazil
 said that his country thanked the Panel and the Secretariat for 
their intense work to produce the report to be adopte d at the present meeting.  A careful reading of the  
Report would show that, though apparently simple, the Panel's task was in reality significantly 
complex.  Thus, Brazil also congratulated the Panel for its conclusions.  First, the Panel had correctly 
realized that, regardless of the "lack of substan tive disagreement between the parties", it had been 
bound by the requirements of Article 11 of the DS U to make an objective assessment of the matter 
before it.  As Brazil and other Members had ar gued during these proceedings, a WTO panel was not 
the appropriate channel for parties to a dispute to merely homologate an agreement on the result of a 
controversy.  Second, the Panel – after reviewing the facts and legal arguments submitted by Ecuador, 
and in the absence of US rebutting arguments – ha d found the measures challenged by Ecuador to be 
inconsistent with Article 2.4.2 of the Anti-Dumpi ng Agreement.  In Brazil's view, this conclusion 
further strengthened the body of WTO decisions ag ainst the use of the "zeroing" methodology in anti-
dumping proceedings.  Brazil was glad to note that the Panel had matched its expectation that its 
decision would provide Members with a new and str ong condemnation of the US "zeroing" practices.  
Finally, and drawing on the Panel's characterization of this dispute as "unusual"4 and "singular"5, 
Brazil wished to state that the WTO dispute settleme nt system would be far better served if a Member 
whose policies had been consistently and unequivo cally found to be WTO-incompatible applied the 
DSB's recommendations on an erga omnes  basis.  This was undoubtedly the case of "zeroing".  
Valuable resources of the dispute settlement system and of Members affected by the same violations 
would be drained and dissipated if such Members were forced to litigate over issues in relation to 
which even the Member applying the illegal measur e agreed that there was no credible defence.  
Brazil encouraged, therefore, the United States to el iminate once and for all the use of the "zeroing" 
methodology in the shortest period possible. 
76. The representative of Thailand  said that his country thanked the Panel and the Secretariat for 
their efforts in this dispute.  Thailand had par ticipated as a third party in this case due to its 
substantive and systemic interest in the use of zeroi ng by the United States in this dispute.  Thailand 
firmly believed that this practice was inconsis tent with the WTO Anti-Dumping Agreement and 
welcomed the Panel Report in this regard. 
77. The representative of India  said that his country welcomed the Panel Report in the case:  
"United States – Anti-Dumping Measure on Shrimp from  Ecuador" to which it had been a third party.  
India congratulated the Panel and the Secretariat on the expeditious completion of their work in this 
case and looked forward to an early implementa tion by the United States of the rulings and 
recommendations of the Panel. 
78. The representative of the United States  said that one or two delegations had questioned 
whether this proceeding was the best use of the S ecretariat resources.  The United States noted that 
the parties had discussed how best to proceed in this situation and had determined that their 
procedural agreement best met the concerns of the parties in resolving their dispute. 
                                                      
4 Panel Report (WT/DS335/R), para. 7.1. 
5 Idem . para. 7.7.  WT/DSB/M/226 
 Page 19 
 
 
79. The DSB took note  of the statements and adopted  the Panel Report contained in 
WT/DS335/R. 
7. Election of Chairperson  
80. The Chairman  said that, before proceeding with the election of a new Chairman, he wished to 
make three points.  First, he wished to tha nk the Secretariat for the support extended to him 
throughout the whole year:  i.e. the Council &TNC Division, the Legal Affairs Division, the Appellate 
Body as well as interpreters.  Second, he wished  to thank WTO Members for the cooperation and 
support extended to him.  Members had been kind a nd had made the task of the DSB Chairman very 
easy and fruitful.   
81. The Chairman  recalled that at its meeting on the 7 February 2007, the General Council had 
taken note of the consensus on a slate of names for Chairpersons to a number of WTO Bodies, 
including the DSB.  On the basis of the unders tanding reached by the General Council he proposed 
that the DSB elect by acclamation H.E. Mr. Bruce Gosper (Australia) as Chairperson of the DSB. 
82. The DSB so agreed . 
83. The incoming Chairman  thanked the outgoing Chairman and proposed to offer Members, if 
they so wished, to say a few word s to mark Amb Noor's year as Chairman of the DSB.  For his part, 
he wished to say that he had greatly appreciated and admired the way in which Amb. Noor had, so 
wisely, calmly and efficiently chaired the DSB m eetings and hoped for his continued support and 
guidance over the year ahead.  He then invited Me mbers to take the floor, if they so wished. 
84. The representative of Canada  said that first of all his country welcomed the incoming 
Chairman and thanked Amb. Noor for his chairmanship  over the past year.  He said that it had been a 
pleasure working with him and wished him well, bot h on his own behalf and on  behalf of Canada.  
85. The representative of the European Communities  said that the EC welcomed the new 
Chairman.  The EC thanked the outgoing Chairman  for the smooth conduct of business and wished 
him good luck in his new capacity as the General Council Chairman. 
86. The representative of the United States  said that his country wished to extend a warm 
welcome to Amb. Gosper as he assumed his new r esponsibilities at the DSB.  The United States very 
much looked forward to working with him over what promised to be a full and challenging year.  The 
United States also wished to take advantage of th is opportunity to thank Amb. Noor for his efforts 
over the past year.  The United Stat es was pleased to be able to continue to have an opportunity to 
work with him in his new capacity as the General Council Chairman. 
87. The representative of Brazil  wished to join other delega tions who had thanked the outgoing 
Chairman.  Brazil had worked with him not just in the DSB, but also in his capacity as the Chairman 
of a negotiating group in the context of the Doha Round, and had come to greatly appreciate the way 
in which he had conducted business with his calm deme anour and efficiency.  Brazil also wished to 
extend its best wishes and the assurance of its s upport regarding the difficult task ahead of him. 
88. The DSB took note  of the statements.  
__________