RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/203 
24 February 2006 
 (06-0801) 
Dispute Settlement Body 
20 January 2006  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 20 January 2006  
 
Chairman:  Mr. Eirik Glenne (Norway) 
 
   Prior to the adoption of the Agenda
, the Chairman said that before turning to the adoption of 
the agenda of the present meeting, he wished to note with great sadness the unfortunate passing away 
of one of the Appellate Body members, Mr. John Loc khart of Australia, and as ked delegations to join 
him in a minute of silence as a mark of respect and tribute to Mr. Lockhart.  Subsequently, in the 
course of the meeting, delegations expressed condol ences at the passing away of Mr. Lockhart.  The 
representative of Australia thanked the Chairman  and delegations for th e expression of loss and 
sympathy on the passing of Mr. Lockhart and said that he would pass on the sentiments expressed at 
the present meeting to Mr. Lockhart's family and friends in Canberra.  
 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 – Continued Dumping and Subsidy Offset Act of 2000:  Status report 
by the Unite d States ........................................................................................................... .........5  
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States .................................................................................................................. .............8  
(e) European Communities – Protection of trad emarks and geographical indications for 
agricultural products and foodstuffs:  Status  report by the European Communities ..................8  
2. Implementation by the European Co mmunities of the recommendations and 
rulings of the DSB in relation to "European Communities – Regime for the 
Importation, Sale and Distribution of Bananas" and related subsequent WTO 
proceedings .................................................................................................................... ..........10  
(a) Statements by Honduras and Nicaragua ...................................................................................10  
3. Brazil – Measures affecting im ports of retreaded tyres ......................................................13  
(a) Request for the establishment of a pa nel by the European Communities.................................13  WT/DSB/M/203 
Page 2  
 
  4.
 Chile  – Price band system and safeguard measures relating to certain 
agricultural products.......................................................................................................... ....16  
(a) Recourse to Article 21.5 of the DSU by Argentina:  Request for the establishment of 
a panel........................................................................................................................ ...............16  
5. Proposed nomination for the indicative list of governmental and 
non-governmental panelists ...................................................................................................17  
6. Mexico – Definitive anti-dumping measures on beef and rice: Complaint with 
respect to rice ................................................................................................................ ..........18  
(a) Statement by  Mexico ............................................................................................................ ....18  
7. United States – Countervailing measures concerning certain products from the 
European Communities..........................................................................................................1 8 
(a) Statement by the Eur opean Communities.................................................................................18  
8. Selection process for appointment of a new Appellate Body member ...............................19  
(a) Statement by the Chairman...................................................................................................... .19 
 
 
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.38) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.38) 
 (c) United States – Continued Dumping and Subsid y Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.23 – WT/DS234/24/Add.23)  
 
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.13) 
 (e) European Communities – Protection of Tr ademarks and Geographical Indications for 
Agricultural Products and Foodstuffs:  Status report by the European Communities (WT/DS174/25 – WT/DS290/23) 
 
1. The Chairman said 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 five 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/Add.38)  
2. The Chairman
 drew attention to document WT/DS176/ 11/Add.38, 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.  WT/DSB/M/203 
 Page 3 
 
 
  3. The representative of the United States  said that as noted in the US status report, several 
legislative proposals relating to Section 211 that  would implement the DSB's recommendations and 
rulings had been introduced in the US Senate and the US House of Representatives.  The US 
administration was working with the US Congress to implement the DSB's recommendations and rulings in this dispute. 
4. The representative of the European Communities
 said that it had now been over three years 
since the United States was originally due to bring Section 211 in conformity with its obligations under the TRIPS Agreement.  He noted that the implementation period, which had been extended 
several times, had expired more than six months ago, but, once again, the US status report did not 
constitute a report on progress in the implementati on of the recommendation or  rulings, but rather a 
report on "non-progress".  The passivity of the United States in this dispute as well as in the 
Section 110 dispute did not only affect the specific interests at stake in these disputes.  It also 
undermined the authority and credibility of the TR IPS Agreement as an effective tool for the 
protection of intellectual property rights worldwide. Such protection was essential for the development of international trade and the shared  objective of the EC and the United States.  
Repealing bills were pending in the US Congress.  Their adoption would remove a discriminatory 
legislation that had been driven by specific interest  and bring a satisfactory solution to this dispute in 
conformity with this shared objective. 
5. The representative of Cuba
 said that almost four years had passed since the DSB had adopted, 
in February 2002, the Appellate Body Report whic h had concluded that Article 211(a)(2) and (b) of 
the US Omnibus Appropriation Act had infringed both  the principle of national treatment, recognized 
in the Paris Convention for the Protection of Indust rial Property and the TRIPS Agreement as well as 
the most-favoured-nation treatment, recognized in the TRIPS Agreement.  The Appellate Body had 
also requested that the United States bring its WTO- inconsistent measure into conformity with its 
obligations under the TRIPS Agreement. This disp ute was about the intended usurpation by Bacardi 
Co. under Section 211, created in its own image, of the right to use the Havana Club rum trademark in 
the United States.  Section 211 was part of the vast and draconian system of unilateral measures of the 
economic, commercial and financial blockade, which had been imposed  by the US Government for 
the past 47 years against Cuba that among other measur es reinforcing the extraterritorial nature of the 
blockade, had established sanctions  against countries, companies or individuals granting economic 
assistance, trading or maintaining relations with Cuba. 
6. He recalled that in April 2002, a first reasona ble period of time had been granted to the 
United States, which had then expired in January 2003.  Since then, subsequent reasonable time-
periods for the United States to implement th e DSB's rulings and recommendations demanding 
legislative measures by its Congress had been rene wed on several occasions. During the past four 
years the US administration had repeatedly report ed that it was working with the US Congress to 
modify its legislation.  This was not true.  To date, the US administration had neither presented nor 
promoted any bill in this regard.  On the contra ry, the US administration and its allies in the US 
Congress had manoevred to avoid the consideration of some bills aimed at correcting this violation of 
international law and WTO rules that had not even been debated in the US Congress.  Four years of 
reasonable periods of time had not served to facilitate  the US implementation of the DSB's rulings and 
recommendations.  On the contrary, they had acted  as a mechanism to deliberately postpone the 
compliance with legal obligations and to evade decisions taken by the DSB. 
7. On 20 July 2005, the EC and the United States had informed the DSB of their Understanding, 
which was vague, imprecise and had been negotiated in a non-transparent way. As stated in that 
Understanding the EC was not  going to request "at this stage" authorization to suspend concessions 
vis-à-vis  the United States until the EC "at some future date decided to request the DSB authorization 
to suspend concessions..." The so-called understanding  constituted an indefinite postponement of US 
compliance with the DSB's rulings and recomme ndations, its legal obligations under the WTO WT/DSB/M/203 
Page 4  
 
  Agreements and dispute settlement.  The perpetua tion of this shameful situation cast doubt on the 
efficacy and credibility of the DSB,  the security and predictability of the multilateral trading system 
and the appropriate balance between rights and ob ligations of WTO Members, objectives foreseen in 
the DSU.  This postponement set a dangerous an d systemic precedent which might affect other 
Members in future, in particul ar developing-country Members. 
8. Once again, the United States, using its econom ic and commercial power , had set itself above 
international law and WTO bodies and had unilatera lly reserved to itself a special treatment and 
additional benefits, contrary to the letter and sp irit of WTO Agreements, and which had gone beyond 
the benefits enjoyed by other WTO Members.  Cuba called again on WTO Members to enforce 
multilateral trade agreements as well as their own de cisions and to demand that the US Government 
abolish Section 211, thus complying immediately,  unconditionally and without further delay with the 
DSB's rulings and recommendations in order to settle this dispute as soon as possible. 
9. The representative of Brazil
 said that, as his delegation had stressed at previous DSB 
meetings, in Brazil's view compliance with the DSB's recommendations, together with mutually 
satisfactory solutions, constituted the most faithfu l measure of the effectiveness of the dispute 
settlement system.  The fuller and faster a Memb er brought its measure into compliance with its 
multilateral obligations, the more effective and, cons equently, the more credible the system would be. 
This was valid for all WTO Members, but especia lly for major players. With this systemic 
consideration in mind, Brazil encour aged the parties to the dispute – in fact the two major players in 
the WTO dispute settlement system – to give fu ll meaning and effect to the essential objective of 
prompt compliance.  As Brazil had already stated, the DSB's decision of 20 July 2005 should not be 
read as a license for indefinite  continuation of non-compliance, which lasted for too long in the 
dispute under consideration, as stated by Cuba. 
10. The representative of the Bolivarian Republic of Venezuela  said that his country supported 
the statements made by Cuba and Brazil.  At the present meeting, his country wished to reiterate its 
position regarding this matter, which had already been  placed on the record of the three previous DSB 
meetings.  As far as his country was concerned, th e lack of compliance in this situation was very 
uncomfortable and set a bad example in relation to compliance with the TRIPS Agreement as well as the application of the DSU provisions.  He noted that the understanding reached between the EC and 
the United States in 2005 affected WTO negotiations , not just the TRIPS negotiations, as well as the 
DSU and other WTO Agreements.  Fu rthermore, the lack of compliance had an impact on the climate 
of negotiations in general and contradicted the objectives of the DSU. 
11. The representative of China
 said that his delegation had made  a statement regarding this item 
at the previous regular DSB meeting and wished to  add a few words at the present meeting.   While 
recognizing that the parties to dispute had the right to settle the procedural issues by mutual agreement, China believed that the full implementati on of the DSB's rulings, namely, a withdrawal of 
the illegal measure would be the most desired outco me.  China noted that the measure taken by the 
United States in this dispute had nullified not only the interest of the EC under the covered 
agreements of the WTO, but also interests of ot her Members, such as Cuba.  Although every Member 
had the right to have recourse to the dispute settle ment mechanism, it was de finitely a heavy burden 
for developing countries to do so, especially for deve loping countries that lacked human and financial 
resources. It was quite understandable for Cuba to expect to benefit from the full implementation of 
the DSB's ruling in this dispute, and to pay attentio n to the status of implementation.   Almost four 
years of the reasonable period of time had passed since February 2002, when the DSB had adopted 
both the Panel and the Appellate Body Reports, including the relevant recommendations.  These 
Reports had concluded that Section 211 was not consistent with the national treatment and MFN 
treatment obligations under the TRIPS Agreement.  Once again, China wished  to join the EC and 
Cuba in urging the United States to implement the decision of the DSB in this dispute as soon as 
possible.  WT/DSB/M/203 
 Page 5 
 
 
  12. The representative of India  said that his country had not participated as a third party in the 
dispute under consideration.  However, it  wished to note with concern that this matter had been on 
the DSB agenda for a very long time.  More th an six months had passed since even the extended 
reasonable period of time for implementation had e nded, but there was still no indication when the 
matter would be resolved even to the satisfaction of the parties.  Such delays caused systemic 
concerns about the efficacy of the dispute settlement system.  As stated in Article 21.1 of the DSU: 
"prompt compliance with the recommendations and ruli ngs of the DSB is essential in order to ensure 
effective resolution of disputes to the benefit of all Members", hence all Members had an interest in an early resolution of the matter in this dispute. 
13. 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.38) 
14. The Chairman  drew attention to document WT/DS184/ 15/Add.38, 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. 
15. The representative of the United States  said that as of 23 November 2002, the US authorities 
had addressed the DSB's recommendations and rulings with respect to the calculation of anti-dumping 
margins in this dispute.  The United States conti nued to support specific legi slative amendments that 
would implement the DSB's recommendations and ruli ngs with respect to the US anti-dumping duty 
statute, and was working with the US Congress to  pass these amendments.  The US administration 
would continue to work with the US Congress and hoped to obtain legislation to implement the DSB's 
recommendations and rulings when the Congress returned at the end of January 2006. 
16. The representative of Japan  said that at the first DSB meeting in 2006, his country wished to 
reaffirm its commitment to and confidence in the WT O dispute settlement system, and to recall that a 
full and prompt implementation of the DSB's recomme ndations and rulings was a principal factor for 
the credibility of the system.  Bearing this point in  mind as well as the pledge by the United States 
regarding its intention to implement the DSB's recommendations and rulings in this case, Japan 
strongly hoped for the final resolution of this dis pute through the US compliance with its obligations 
under the WTO at the earliest possible opportunity. 
17. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
 
(c) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.23 – WT/DS234/24/Add.23) 
18. The Chairman  drew attention to document WT/D S217/16/Add.23 – WT/DS234/24/Add.23, 
which contained the status report by the United St ates on progress in the implementation of the DSB's 
recommendations in the case concerning the US Conti nued Dumping and Subsidy Offset Act of 2000. 
19. The representative of the United States  said that his country was pleased to report that, on 
21 December 2005, the US Senate had voted to approve the Deficit Reduction Act of 2005, which 
included a provision repealing the Continued Dumping and Subsidy Offset Act of 2000.  The US House of Representatives had voted to approve that le gislation before the Senate voted.  The Senate 
had modified a provision unrelated to CDSOA repeal.  The Senate bill would go back to the House of 
Representatives and the United States hoped that the House would approve it.  The US administration WT/DSB/M/203 
Page 6  
 
  would continue to work with the US Congress on this legislation, and to confer with the complaining 
parties in these disputes, in order to reach mutually satisfactory resolutions. 
20. The representative of the European Communities
 recalled that in December 2005, the US 
House of Representatives and the US Senate had passed provisions that would repeal the Byrd Amendment as part of the "Deficit Reduction Act of   2005".  The EC warmly welcomed these votes, 
but regretted that a transition clause would postpone the repeal of the Byrd Amendment until at least 
30 September 2007.  Despite the passage by both Cham bers, there was also still some way to go.  The 
EC understood that another vote by the House of Representatives was now needed since the versions 
of the "Deficit Reduction Act of  2005" passed by the House and the Senate differed regarding some 
other provisions.  However, December votes were ve ry encouraging signs.  The EC hoped that the US 
House would follow on these significant steps and called on the US Congress and the US 
administration to build on that momentum and to co mplete the legislative process to repeal the Byrd 
Amendment. 
21. The representative of Canada
 said that his country thanked the United States for its most 
recent status report regarding the Continued Dumpi ng and Subsidy Offset Act of 2000, or the "Byrd 
Amendment".  For several years now, the internatio nal community had been calling for the repeal of 
this illegal measure.  The adverse impact of the Byrd Amendment on international trade had been 
recognized when the DSB had determined that this  measure contravened the WTO obligations of the 
United States.  In this context, Canada welcomed  the recent steps taken by the US Congress towards 
repeal of the Byrd Amendment and would c ontinue to monitor the progress of the budget 
reconciliation package (H.R.4241), which included a pr ovision for prospective repeal. Canada viewed 
these steps as a very positive devel opment, nevertheless, it had to regi ster its concerns regarding the 
prospective implementation of that repeal.  The DSB had held that disbursements made under the 
Byrd Amendment were inconsistent with the WTO obligations of the United States.  Prospective 
repeal, however, would allow duties collected prio r to October 2007 to be still disbursed under the 
Byrd Amendment.  Furthermore, disbursements of duties under the Byrd Amendment could occur 
after the effective date of repeal.  With these conc erns in mind, Canada encouraged the United States 
to proceed with the legislative steps necessary to repeal the Byrd Amendment and would continue to 
monitor Canadian interests in this regard. 
22. The representative of Japan  said that his delegation had noted the status report by the United 
States, especially the part detailing the most rece nt actions within the US Congress over the past 
month or so.  Japan welcomed the fact that th e Deficit Reduction Act of 2005, which included the 
provision to repeal the CDSOA, had been voted fo r by the Senate on 21 December 2005 as this was a 
significant step forward.  Japan, the other co-com plainants, the United States and the whole WTO 
Membership were currently at a critical moment before the final approval by the House of Representatives of that legislation.  Japan was k een that the US Congress would approve the Deficit 
Reduction Act of 2005 at the earliest opportunity.  At the same time, to  Japan's knowledge, the 
legislation stipulated that the distribution unde r the CDSOA would be continued for goods that 
entered into the United States prior to 1 October 2007.  Japan strongly hoped that the United States 
would keep addressing the issue of immediate termination of the distribution under the CDSOA, in addition to its repeal by virtue of the Deficit Reduction Act of 2005. 
23. The representative of Brazil
 said that his country had taken note of the twenty-third status 
report provided by the United States regarding the present dispute and thanked the United States for 
its statement.  This had given the sense that the hi ghly expected and long overdue repeal of the Byrd 
Amendment would eventually be passed into law soon.   Brazil wished to express its satisfaction with 
such a development. Compliance with the DS B's recommendations by every WTO Member, and 
particularly by a major player, was definitely central for the effectiven ess and credibility of the 
dispute settlement system.  By acknowledging the releva nce of the legislation that would put an end to 
the serious breach of the multilateral rules repr esented by the Byrd Amendment, Brazil was not,  WT/DSB/M/203 
 Page 7 
 
 
  however, endorsing the timing for implementation of  the DSB's recommendations in this case.  He 
recalled that the reasonable period of time of  11 months for implem entation had expired on 
27 December 2003, more than two years ago.  Alt hough it was not indicated in the US status report, 
the repeal which was about to be approved by the US Congress would only produce actual effects 
from 1 October 2007.  That meant that distributio ns under the Byrd Amendm ent would continue for 
almost another two years.  Thus, the United States w ould effectively have nearly five years – from the 
beginning of the reasonable period of time – to brin g its measure into conformity with its obligations 
under the WTO.  In Brazil's view, with all due resp ect to the alleged internal contentiousness of the 
measure at issue, such a protracted implementati on should be strongly regretted as a delay that ran 
counter to the central objective of prompt compliance.   Brazil expected that the final passage of the 
law repealing the Byrd Amendment would take place in  the very near future, thus removing this major 
violation to the multilateral rules.  Brazil also hope d that, except for the delay, this example would 
inspire the United States to step up its effo rts to give full implementation to the DSB's 
recommendations in other disputes in which the United States was a respondent. 
24. The representative of India  said that his country wished to  thank the United States for the 
status report just presented. India noted that some pr ogress had finally been made in the US legislative 
processes intended to repeal the Byrd Amendment,  although it had been unduly delayed.  However, 
contents of the proposed changes did not provide delegations with much comfort as it was understood 
and had been pointed out by several delegations at the present meeting, that duties collected on 
imports entering the United States until 1 October 2007 w ould continue to be governed by the existing 
Byrd Amendment Law, which the DSB had ruled as be ing inconsistent with WTO rules.  India urged 
the US administration to take steps to remedy c ontinuation of all such illegal payments.  As it had 
been stated earlier, India preferred full complian ce by the United States with the DSB's decision to 
India's suspension of concessions and other obligatio ns under the authority obtained by India from the 
DSB.  For India, inducing compliance was a basic objective of the DSU provisions allowing retaliation.  India reserved all its rights under the DSU. 
25. The representative of Korea
 said that his country had recognized that several congressional 
steps had been taken in 2005.  In particular,  Korea noted the last step s taken in December 2005,  
which had put the United States at the finishing lin e of this long-standing implementation.  Korea 
hoped that United States would shortly complete the implementation process. 
26. The representative of Chile  said that in the case under consid eration the main issue was the 
observance of standards under the circumstances where compliance had dragged on longer than 
necessary.  It had taken two years for the dispute to  be resolved and now there was a delay regarding 
the application of international law. The statemen t made by the United States was encouraging, but 
nevertheless this case constituted a bad precedent. Chile  hoped that efforts would be made so that in  
2007 the measure be removed and that this case w ould not become an example for the compliance 
with the findings and rulings of panels in the future. 
27. The representative of Hong Kong, China  said that his delegation had participated as a third 
party in this case, and had since followed the impl ementation process with close interest.  While Hong 
Kong, China welcomed the votes by the US Senate a nd the US House of Representatives to repeal the 
Continued Dumping and Subsidy Offset Act (CDSOA) , it was greatly disappointed by the transitional 
provision, which had provided for the repeal of the CDSOA to take effect only from October 2007, 
that was almost five years after the CDSOA had been  found by the Appellate Bo dy to be inconsistent 
with the WTO provisions.  Such delay in implementation greatly discredited the WTO dispute 
settlement system.  Hong Kong, China urged the Unite d States to take all necessary steps to ensure 
that all illegal payments were remedied, and to  repeal the CDSOA at the earliest opportunity. 
28. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/203 
Page 8  
 
  (d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.13) 
29. The Chairman
 drew attention to document WT/DS160/ 24/Add.13, 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. 
30. The representative of the United States  said that, as the US status report indicated, the US 
administration was working closely with the US Cong ress, and conferring with the EC, on a mutually 
satisfactory resolution of this matter. 
31. The representative of the European Communities  said that thus far as this dispute was 
concerned, 2006 did not seem to have brought any changes in the increasingly worrying situation of 
non-compliance by the United States.  Indeed, five and a half years after the adoption of the Panel 
Report, the United States obstinately maintained legi slation that violated intellectual property rights 
and hurt the interests of music creators.  This re grettable attitude of the United States was in sharp 
contrast with its worldwide efforts to enhance in tellectual property protection, and also with its 
bilateral commitment with the EC to pursue a zero to lerance approach to piracy and counterfeiting on 
a global scale.  The EC believed that any success ful initiative on intellectual property must be 
anchored in a rigorous application of international rules both at home and abroad.  The EC, therefore, 
called upon the United States to take the necessary acti on to end this situation of non-compliance that 
had already lasted for too long.  The EC hoped that the US administration would invest more resources in 2006 than in 2005 in order to find a solu tion together with the US Congress, in order to 
repair the damage done to EC right  holders and to finally apply at home the same high standards that 
the United States pursued abroad.  Finally, the EC wi shed to recall that it had reserved its right to 
reactivate, at any point in time, the arbitration on retaliation. 
32. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(e) European Communities – Protection of trad emarks and geographical indications for 
agricultural products and foodstuffs:  Stat us report by the European Communities 
(WT/DS174/25 – WT/DS290/23) 
33. The Chairman  drew attention to document WT/DS 174/25 – WT/DS290/23, which contained 
the status report by the European Communities on progress in the implementation of the DSB's 
recommendations in the case concerning protection of  trademarks and geographical indications for 
agricultural products and foodstuffs. 
34. The representative of the European Communities  recalled that on 19 May 2005, the EC had 
confirmed its intention to implement fully the recommendations and rulings of the DSB in this 
dispute.  On 23 December 2005, the European Commission had proposed to the Council of the European Union a new regulation on ge ographical indications which would, inter alia , amend and 
clarify the conditions and procedures for registra tion of geographical indications relating to areas 
outside the territory of the EC.  As stated in the EC's status report, this proposal was currently under 
discussion within the Council of the Europ ean Union and the European Parliament. 
35. The representative of the United States
 said that his country thanked the EC for its status 
report concerning its proposed revised GI regula tion and appreciated its efforts there. The 
United States had only had time to do an initial re view of the proposed regulation, but it had two 
concerns.  First, it seemed to the United States th at the proposed regulation appeared to give EC 
persons – but not non-EC persons – opportunities to object to the recognition of a GI.  Therefore, the 
proposed regulation might raise national treatment concer ns, which were at the heart of this dispute.   WT/DSB/M/203 
 Page 9 
 
 
  Second, the DSB had found that the EC's GI Regula tion was inconsistent with trademark obligations 
under Article 16 of the TRIPS Agreement, and had f ound that this inconsis tency was justified only 
because the EC regulation had met narrow excep tions permitted under Article 17 of the TRIPS 
Agreement.  It was a matter of concern to the United States that some of the very provisions of the EC 
regulation relied upon by the Panel to justify its Article 17 analysis had been omitted from the 
proposed regulation.  These were preliminary obser vations.  The United States looked forward to a 
further examination of the proposed regulation and an opportunity to discuss this proposal with the 
EC. 
36. The representative of Australia  said that his country thanked the EC for its first status report 
relating to this dispute.  Australia was carefully studying the proposed new GI regulation, and noted 
that implementing rules to give effect to a numb er of its provisions were still to be issued.  
Nevertheless, Australia would like to flag two areas of  potential concern at the present meeting.  First, 
the Panel had found that the EC's requirement that a prior trademark co-existed with a later GI was 
justified as a limited exception under Article 17 of th e TRIPS Agreement.  That finding was explicitly 
based on certain key provisions of the existing GI re gulation, but one of those key provisions was not 
repeated in the proposed regulation.   Second, a tr ademark owner not resident or established in an EC 
member State proposing to nominate a term for registration as a GI did not seem to have a right of objection at the nominating member State level.  Aust ralia trusted that the EC would carefully review 
the proposed regulation, and the associated implementi ng rules, to ensure their consistency with the 
EC's GATT and TRIPS Agreement obligations, includi ng in relation to trademark rights acquired at 
the EC member State level. 
37. The representative of Canada
 said that his country thanked the EC for its status report on 
implementing the recommendations and rulings of the DSB in this case.  Canada noted with interest that a revised regulation had been proposed a nd was currently under discussion.  Canada looked 
forward to further information on how the proposed  regulations were expected to implement the 
DSB's recommendations and rulings and was interest ed in participating in any ensuing discussions. 
38. The representative of New Zealand
 said that her country had participated as a third party in 
this dispute because it had a significant systemic interest in ensuring that the WTO disciplines 
applicable to intellectual property rights were respected.  New Zealand thanked the European 
Commission for notification that it had proposed a Council Regulation that pu rported to bring Council 
Regulation 2081/92 into conformity with the TR IPS Agreement and the GATT 1994 pursuant to the 
conclusions of the Panel.  New Zealand would be  studying this proposal closely and looked forward 
to having the opportunity to discuss any questions with the EC. 
39. The representative of Argentina  said that his country, which had participated as a third party 
to this dispute, wished to highlight its interest in ensuring that the DSB's recommendations and rulings 
were properly implemented. Argentina wished to r eceive more details regarding the content of the 
revised regulation proposed to the Council by the European Commission. 
40. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/203 
Page 10  
 
  2. Implementation by the European Communiti es of the recommendations and rulings of 
the DSB in relation to "European Communiti es – Regime for the Importation, Sale and 
Distribution of Bananas"
1 and related subsequent WTO proceedings 
(a) Statements by Honduras and Nicaragua 
41. The Chairman  said that the above-mentioned item was on the agenda of the present  meeting 
at the request of Honduras and Nicaragua and invite d the representatives of the respective countries to 
speak. 
42. The representative of Honduras  said that on 1 January 2006,  th e EC had taken the regrettable 
decision to introduce a new regime for the importati on of bananas, which was inconsistent with the 
DSB's rulings and recommendations resulting from the dispute:  "EC – Regime for the Importation, 
Sale and Distribution of Bananas"  and related subsequent WTO proceedings.  It was for that reason 
that Honduras had to request the DSB to keep this inconsistent regime under the closest scrutiny, and 
to work with the developing countries to achieve a WTO-consistent outcome as soon as possible.  As 
a way of background, he said that many Members were familiar with the essential facts of this case, which had been discussed over a long period of tim e, and which could be summarized as follows:  
(i) This was an unprecedented case of non-compliance by the EC.  Since 1992, 11 sets of proceedings 
had been held to remedy illegal EC actions, under the GATT and the WTO; (ii) In the 1997 case, 
Bananas III , in which Honduras was a complainant, it ha d been found that the EC banana import 
regime was responsible for numerous violations, an d the EC had expressly been called upon to bring 
its banana import regime into conformity with its  GATT and GATS obligations;  (iii) That decision 
had given rise to an understanding in 2001, to which Honduras was not a party;  (iv) That 
understanding in turn had led to the 2001 Minist erial Decision, under which a waiver had been 
approved, and the maintenance of total market acc ess for MFN suppliers upon introduction of a tariff-
only regime was guaranteed.  All this had been made  subject to strict multilateral controls;  (v) In 
2005, as a result of those multilateral controls, two conc lusive awards had been issued against the EC.  
The first had found against the EC proposal to im pose a tariff of €230 per metric tonne, whilst the 
second had condemned the tariff of €187 per metric tonne and the expanded quota that the EC had 
proposed for the benefit of ACP suppliers;  (vi) At the end of November 2005, having conducted no 
negotiations whatsoever with Latin America, th e EC Council had hastily approved a new tariff of 
€176 per metric tonne which was a mere 11 digits lower than the tariff condemned under the 
arbitration award.  Moreover, that figure was more  than double the tariff level that the EC had been 
applying to bananas from Latin America since 1995.  In that and other ways, the EC had extended its 
preferential treatment of ACP countries, thereby vi olating its WTO commitments;  and (vii) The EC 
had then presented the new WTO-inconsistent measures, as a fait accompli,  which were now in force. 
43. With regard to the EC non-compliance, he said that the EC maintained that it had "rectified 
the matter".  If the EC was stating that it had bro ught itself into compliance with the WTO rulings and 
recommendations, Honduras had to differ with that st atement.  The WTO-incons istencies of this new 
regime were perfectly obvious.  The waivers unde r Articles I and XIII of GATT 1994 granted to the 
EC could not now continue in effect, and fo r that reason the EC could not go on granting 
discriminatory access of any kind, to the detriment of  Latin American suppliers.  The EC was clearly 
aware of this, as it had formally submitted a request for a waiver. 
44. With respect to developing country interests, he noted that under Article 21 of the DSU, the 
DSB was required to pay particular attention to the impact of non-compliance on the economies of the 
developing-country Members whose rights were bei ng infringed.  He emphasized that every single 
one of the countries that were now being subjected to  this discriminatory tariff by the EC – which, as 
he had already pointed out, was more than double  the EC tariff level previously applied – was a 
                                                     
 
1 WT/DS27.  WT/DSB/M/203 
 Page 11 
 
 
  developing country.  There existed studies conducted by  economists who believed that in future, those 
measures would severely affect the region by curtailing annual access for Latin America by over a million tonnes.  Honduras was finding it much more diffi cult than many to cope with an impact of 
such proportions.  Its per capita income was a mere  US$704, which was considerably lower than the 
GDP of 32 ACP countries.  The situation was alarmi ng, as the banana industry was an indispensable 
source of income, employment and growth for Hondur as, more particularly in the country's most 
impoverished rural areas. 
45. With regard to prompt compliance, he said th at Bananas III was the first trade dispute in 
which Honduras had become involved after joining th e WTO.  Honduras in fact regarded that case as 
a chance to demonstrate how much it valued its WT O membership. Now, eight years after obtaining 
that favourable ruling, Honduras found with regret that the new regime put in place by the EC was 
again subjecting Honduras to the same illegalities that had been condemned by the Panel in 
Bananas III.  Honduras found that it was now subject to a regime that was in fact more injurious than 
the system it had challenged.  Clearly, this was in no way consistent with the provisions of Article 21 
of the DSU regarding "prompt compliance" and the "effective resolution of disputes". 
46. In the light of the WTO-inconsistency and the economic implications of this case, Honduras 
wished to make an urgent appeal to the DSB.  Honduras  called on the DSB to exercise its monitoring 
function, to examine this matter with the seriousne ss and diligence that it deserved with a view to 
restoring the rights of the Latin American countries that were being harmed.  Furthermore, Honduras 
again called on the EC to work together towards a ne gotiated settlement of this matter.  Thus, if the 
EC negotiated in good faith, Honduras  would have no need to resort to the expedited procedures 
available under the system, the EC producers and ope rators would consequently be spared greater 
legal uncertainty and this matter would also cease  to be an impediment to progress in the Doha 
Round. 
47. The representative of Nicaragua
 said that her country had decided to be associated with the 
Honduran initiative to request that this matter be  placed on the DSB agenda so that the DSB could 
look into the illegal measures adopted by the EC with  respect to its banana import regime, and thus 
discharge its function of surveillance.  With respect  to Nicaragua's interest, she said that her country 
was deeply concerned that the EC was still refu sing to implement the rulings and recommendations 
set out in the Reports of the Panels that had ex amined the matter in the WTO.  As many Members 
were aware, Nicaragua was the second-poorest count ry in the Western Hemisphere.  Its banana 
industry did enjoy competitive advantages.  Indeed, it generated thousands of jobs for Nicaragua's 
people and Nicaragua was now making new investme nts in technology in order to spur economic 
growth. 
48. Yet Nicaragua's banana industry would not be able to prosper without fair access to the 
EC market, which was the largest and most profitable market for bananas.  While it was true that over 
many years, the EC import regime had eroded both Nicar agua's share of that market and that of many 
other Latin American suppliers, what was most regre ttable was that as of 1 January 2005 the situation 
had become even more difficult.  The new tariff introduced by the EC was more than twice as high as 
the tariff previously applied to bananas from Nica ragua, and her country was sure that that had 
destroyed the access that Nicaragua had hoped to enjoy in the future. 
49. Concerning the issue of protecting the Community interest, she said that the object and 
purpose of this new EC regime was even more objectionable.  There was no doubt that it was 
designed to protect EC producers as well as to safe guard the US$300 million in subsidies that they 
received each year.  In other words, the EC had introduced a high tariff to ensure that the EC 
producers would be able to continue to benefit from an uncompetitive product at profitable prices.  
The EC internal subsidies had, therefore, nullif ied Nicaragua's competitive advantage as well as the 
EC's obligation to bring its regime into conformity with WTO rules. WT/DSB/M/203 
Page 12  
 
  50. With regard to the EC non-compliance, she said that although the EC had chosen to ignore 
several WTO decisions, Nicaragua would continue to st rive to have its rights restored.  On behalf of 
its banana industry and other sectors in his country that were following this case with great concern, 
she wished to request the support of the DSB in en suring that the EC complied promptly and fully 
with its WTO obligations.  It was crucial for Nicar agua and other poor countries in Latin America to 
have a chance to compete on fair terms. 
51. The representative of Panama
 said that his country wished to be associated with the 
statements made by Honduras and Nicaragua.  Pana ma also regretted that the EC should have 
introduced its new and illegal banana import regime and considered that the matter should be closely 
monitored by the DSB. With regard to the issue of the inconsistent measures, he said that the EC had 
introduced a series of measures which made it obvious why Panama  was concerned:  (i) MFN 
bananas were currently subject to a discrim inatory "autonomous" tariff of €176/mt, 135 per cent 
higher than the tariff applied to its bananas over the past eleven years; (ii) on the other hand, ACP 
bananas now enjoyed an expanded quot a, to which only they had access, at zero tariff, added to which 
they had unlimited access to any volume that exc eeded that quota, and those volumes were subject to 
the MFN tariff; (iii) For the moment, there was no wa iver or exemption that legitimated either the 
tariff or the quota.  Consequently, the violations  of Articles I and XIII were more than obvious. 
52. With regard to Panama's principal supplying  interest, he said that his country had 
unquestionably a lot to lose, and was, therefore, justified in seeking the restoration of the rights that had been violated by this illegal measure.  His c ountry was a principal supplier to the EC market, and 
the discriminatory regimes imposed by the EC had a ffected Panama more than many other suppliers.  
He then illustrated this with a few figures.  Sin ce 1994, shipments of bananas from Panama had fallen 
by practically half.  The export value of Panama nian bananas had decreased by no less than US$100 
million.  Employment had decreased by half, and th e number of hectares cultivated by one third.  The 
new measures, including the new MFN tariff cost of more than US$2 per box, served merely to fuel this decline.  Panama's fear was also that the da mage would be felt more acutely in the rural areas, 
where there was no alternative production and pove rty levels were at about 95 per cent. 
53. He noted that the matter was being "raised by a developing country", Panama therefore joined 
in the appeal issued by other Latin American countries for prompt compliance as stipulated in 
Article 21 of the DSU – indeed, such prompt comp liance was essential to his country.  In order to 
secure proper compliance with Article 21 of the DSU, Panama would ask the DSB to consider carefully how to proceed in order to ensure that th e EC bring its illegal measures into conformity with 
WTO provisions as expeditiously as possible.  He c oncluded his statement by stressing that deferred 
compliance could only unduly prolong a discriminator y situation which had already gone on for too 
long, with the unnecessary risk of causing irreparabl e damage to Panama's developing economies. 
54. The representative of the United States
 said that his country had been monitoring closely 
developments surrounding the EC's implementation in  the bananas dispute and had concerns about the 
EC's new tariff level and strongly questioned whethe r it did in fact maintain total market access for 
MFN banana suppliers, as the EC was committed to do in a tariff-only regime.  And the United States 
also had concerns about the fact that the EC woul d retain a special, preferential tariff-rate quota and 
allocate it to some suppliers but not others.  The United States noted that Honduras, Nicaragua, and 
Panama had filed requests for cons ultations with the EC.  The United States urged the EC to work 
with interested Members to reach a mutually satisfactory resolution. 
55. The representative of the European Communities  said that the EC had listened to the 
statements by Honduras and Nicaragua on this matter  with interest. Nevertheless, the EC noted its 
disagreement with the categorization of this matter as  an "implementation issue" relevant to Article 21 
of the DSU.  The EC agreed to hold consulta tions with both Honduras and Nicaragua as well as 
Panama on the new EC's banana import regime, re serving its position on the legal basis invoked in  WT/DSB/M/203 
 Page 13 
 
 
  their respective requests.  These consultations had b een held on 19 January 2006.  On that occasion, 
the issues raised at the present meeting by Honduras and Nicaragua had been discussed at length.  In 
addition, as indicated at the meetings held in the context of the WTO Ministerial Conference in Hong 
Kong, the EC continued to be engaged in discussions  with all interested parties and was ready to 
continue these discussions with the assistance of the Minister Støre (Norway). Therefore, the EC 
remained ready to address the issues raised at the present meeting and any other issues related to the 
new EC's bananas import regime  in the appropriate fora. 
56. The DSB took note  of the statements.   
3. Brazil – Measures affecting imports of retreaded tyres 
(a) Request for the establishment of a panel by the European Communities (WT/DS332/4) 
57. The Chairman  recalled that the DSB had considered this matter at its meeting on 
28 November 2005 and had agreed to revert to it.  He drew attention to the communication from the 
EC contained in document WT/DS332/4, and inv ited the representative of the EC  to speak. 
58. The representative of th e European Communities  said that at the present meeting,  the EC had 
re-tabled its request for the establishment of a pane l in this long-standing dispute with Brazil.  The 
request, which had been presented for the first tim e at the 28 November DSB meeting, had been 
blocked by  Brazil at that meeting.  Rather than  repeating the same arguments at the present meeting, 
he wished to refer to the statement made by the EC  at the November meeting in order to introduce and 
explain the EC's panel request.  Suffice it to say that fundamental rules of the GATT 1994 had been 
and continued to be breached, and the EC, therefor e, had no choice but to ask for a panel to rule on 
this matter. 
59. The reason for the continuation of this dispute was the fact that, due to internal pressures, 
Brazil had been unable to revoke the import ban and discriminatory measures at stake.  As he had 
predicted at the previous meeting, Brazil had stat ed that its measures were compatible with WTO 
disciplines and that they were justified notably for the protection of the environment and public 
health.  Possibly, similar allegati ons would be made at the present meeting. There was little point to 
go into the details of Brazil's statement made at the previous DSB meeting and to explain how and 
why Brazil had erred.  These were matters of subs tance and the EC would discuss them soon and at 
length before the panel. 
60. However, he had to stress again that the EC would certainly not challenge measures that were 
justified by concerns of public health or environm ental protection.  But the present measures were not 
of that kind and were also unnecessary and even inef fective for that purpose.  At the November DSB 
meeting, Brazil had also made the blunt statement that the EC was trying to dump products on other 
countries.  This was completely unfounded.  The EC was doing no more and no less than insisting on 
the respect of international tr ade rules.  EC exporters were  entitled to the export opportunities 
enshrined in those rules, just like the EC respec ted the right of other countries to export retreaded 
tyres to the EC. 
61. The EC strongly contested the Brazilian allegati on that retreaded tyres were short lifespan 
products.  It was internationally recognized that retr eaded tyres were equivalent  to new tyres in terms 
of durability and safety, if manufactured according to  the international standards as they existed both 
in the EC and since recently in Brazil.  The EC al so contested Brazil's allegation that the importation 
of retreaded tyres resulted in an accelerated accumula tion of waste tyres in Brazil.  As he had stated 
this would be discussed in details before the panel, which the EC requested that it be established at the 
present meeting. WT/DSB/M/203 
Page 14  
 
  62. The representative of Brazil
 said that his country regretted that the EC had decided to re-
introduce its request for the establishment of a panel in this dispute.  He noted that Article 6.1 of the 
DSU mandated that the panel be established at the pr esent meeting regardless of the merits of Brazil's 
position.  Brazil did not need to reiterate the consid erations contained in its statement before the DSB 
at its meeting on 28 November.  However, it believe d that some important points should be stressed.  
Brazil considered as an undisputed fact the severe ri sks to human health and the environment resulting 
from the ever-growing generation of waste tyres.  That was why so many WTO Members – including the EC and its member States – had adopted releva nt and specific regulations to address the problem 
of the rubber waste stream. 
63. In examining this matter, what surprised Br azil was the remarkable difference between the 
EC's rules and disciplines and its practices in this particular case. The more one learned about the 
nature and the scope of the EC's regulations regard ing the management of waste tyres, the less one 
understood how the EC could have disregarded Braz il's reasons to adopt measures to protect its own 
environment and the health of its population. 
64. The EC was quite clear when it had stated in the "Waste Incineration Directive" that "waste 
prevention should be the first priority of any rati onal waste policy in relation to minimizing waste 
production and the hazardous properties of waste"
2.  Also according to the EC, "the generation of 
waste must be avoided as much as possible"3. By challenging the Brazilian import ban, the EC simply 
did not recognize Brazil's right to avoid the genera tion of extra amounts of undesired rubber wastes in 
its territory.  The EC was also very assertive when  it had recommended that an  adequate network of 
disposal installations be established so as to "enable the Community as a whole to become self-
sufficient in waste disposal"4 and to ensure that "wastes are not exported to non-EC countries"5. In the 
EC's view, however, the so-called "self-sufficiency pr inciple" seemed not to be applicable to retreaded 
tyres, in spite of the fact that they were composed  of at least 70 per cent of waste and that they would 
generate wastes in short time to be disposed of in the importing countries. 
65. Another of the guiding principles of the EC's environmental regulations was the "proximity 
principle", according to which "waste intended for di sposal should be treated as close as possible to 
the place of its generation"6. The EC also considered that wastes must "be disposed of in one of the 
nearest appropriate installations, by means of the most appropriate methods and technologies in order 
to ensure a high level of protection for the environment and public health"7.  Regarding waste tyres, 
however, the EC seemed much more interested in tu rning them into retreaded tyres and in exporting 
the resulting short lifespan product to third countries,  than in disposing these wastes where they had 
been first generated.  Moreover, the EC was not interested in Brazil's assertion that no method for 
disposal of large quantities of waste tyres had prove d to be thus far simultaneously environmentally 
sound and technically and economically viable. 
66. The EC was aware of the risks related to the accumulation of waste tyres in landfills and in 
storage sites for it adopted a Directive to expressl y ban whole, cut or shredded tyres from landfills. 
Additionally, the EC had enacted the "End of Life Vehicle Directive", which required dismantlers to 
remove tyres from vehicles bound for destruction with  the express purpose of ensuring that they will 
not end up in landfills.  The millions of waste ty res currently disposed of in European landfills, 
                                                      
2 Directive 2000/76/EC of the European Parliament and of the Council of 4 December 2000 on 
Incineration of Waste – Recital 8. 
3 Directive 2000/53/EC of the European Parliament and of the Council of 18 September 2000 on End 
of Life Vehicles – Recital 4. 
4 Sixth Community Environment Action Programme – Decision No, 1600/2002/EC – Article 8.1. 
5 Community Strategy for Waste Management – COM(96)399Final – Paragraph 63. 
6 Decision No. 1600/2002/EC of the European Parliament and of the Council of 22 July 2002 laying 
down the Sixth Community Environment Action Programme – Article 8.1. 
7 Directive of 15 July 1975 on Waste (75/442/EEC), Article 5.2.  WT/DSB/M/203 
 Page 15 
 
 
  therefore, would have to find another destination.  The EC, however, would not be concerned if these 
wastes, transformed into retreaded tyres, would find  their final disposal place in Brazilian landfills or 
storage sites. 
67. Finally, the EC was concerned with the emissions resulting from co-processing of wastes in 
kilns and incinerators – one of the most commonl y used disposal methods of waste tyres – by 
adopting the cited "Waste Incineration Directive", which introduced new and more stringent emission 
levels of toxic substances like dioxins, heavy metals  and furans.  Thousands of tonnes of waste tyres 
would not be allowed to be burned in kilns and incine rators when this Directive is fully applied. He 
then asked: " Why not burn these wastes in kilns and incinerators of third countries like Brazil?". 
68. By insisting on requesting a panel, the EC demons trated that it was still pursuing the strategy 
to guarantee markets in the developing world to du mp a short lifespan product – retreaded tyres – 
broadly rejected by European consumers. The EC se emed to count on Brazil to help it to get rid of 
large volumes of unwelcome rubber wastes in a ch eap and efficient manner. Brazil hoped that the 
WTO dispute settlement system would not endorse such  a misuse of the multilateral legal instruments. 
69. The representative of Cuba  said that his delegation wished to reiterate its statement made at  
the previous DSB meeting.  As had been stated  on that occasion, Cuba shared Brazil's legitimate 
concerns regarding used and re-treaded tyres.  Both product categories contained highly combustible 
and pollutant materials, they generated large quantities of waste at the end of their life cycle, and were 
extremely difficult to recycle owing to the techni cal features of the devulcanization process;  they 
were difficult to eliminate not on ly because of the cost of treating such waste, but also because they 
entailed serious environmental risks and their fu ll elimination was not guaranteed. Used and re-
treaded tyres generated waste faster than new tyres, and their importation, therefore, clearly 
aggravated the environmental problems of the importi ng countries.  In reality, exports of used and re-
treaded tyres represented a transfer to other countri es – mainly developing countries – of the social, 
economic and environmental burden involved in eliminating the wast e generated by those products.  
Cuba believed that Members were all entitled to  adopt the measures they deemed necessary to 
mitigate the harmful effects of the steadily grow ing quantity of discarded tyres on the environment 
and on human health, in the same way that each count ry must bear the burden of eliminating the waste 
generated on its territory. Cuba, th erefore, recognized as legitimate the restrictions being placed by 
Brazil on imports of used and re-treaded tyres in order to avoid the premature generation of waste on 
its territory, and shall be followi ng this dispute with interest. 
70. The representative of Argentina  said that his country wished to express its concern and 
interest with respect to the issues under discussion.  As pointed out by Brazil in its statement, tyres 
were not ordinary products. Owing to the special ch aracteristics of these products, in particular the 
fact that they were composed of highly pollutant and combustible materials, countries were faced with 
the problem of their "final disposal", since impr oper management could resu lt in irreparable damage 
to human health and the environment.  This situa tion was even more serious in developing countries, 
as structural shortcomings placed them at a disa dvantage when it came to shouldering the costs of 
eliminating wastes of this kind.  The problems dir ectly associated with tyres at the end of their life 
cycle were no secret to anyone.  To mention but a few examples, their incineration caused smoke pollution (monoxide and polyaromatic hydrocarbon emi ssions);  their partial chemical decomposition 
posed stability problems and favoured the proliferati on of vectors such as mosquitoes, and the spread 
of diseases and epidemics such as dengue fever.  Con sequently, Argentina would wish to participate 
in this dispute as a third party. 
71. The DSB took note
 of the statements and agreed  to establish a panel in accordance with the 
provisions of Article 6 of the DSU w ith standard terms of reference. WT/DSB/M/203 
Page 16  
 
  72. The representatives of Argentina
, Australia , Japan , Korea  and the United States  reserved their 
third-party rights to participate in the Panel's proceedings.  
4. Chile  – Price band system and safeguard measures relating to certain agricultural 
products 
(a) Recourse to Article 21.5 of the DSU by Argentin a:  Request for the establishment of a panel 
(WT/DS207/18)  
73. The Chairman  drew attention to the communication from Argentina contained in document 
WT/DS207/18, and invited the repr esentative of Argentina to speak. 
74. The representative of Argentina  said that his country was grateful for the opportunity to be 
able to introduce at the present meeting the matte r of disagreement concerning measures adopted by 
Chile to implement the DSB's recommendations and rulings  in this dispute.  As this matter had a long 
history, Argentina did not wish to repeat the cont ent of its request for the establishment of a panel 
under Article 21.5 of the DSU, as set out in WT/DS207/ 18, or to go over the details of the background 
to the dispute.  Argentina would merely recal l that this matter concerned Chile's proper 
implementation of its WTO commitments in the light  of the rulings and recommendations adopted by 
the DSB on 23 October 2002 in respect of this dispute. 
75. Despite the assurances given by Chile to the DSB during the nine regular meetings held 
between October 2003 and June 2004, and the time it had had at its disposal, Chile had implemented 
the DSB's recommendations only with respect to edib le vegetable oils, which had now been removed 
from the price band system.  However, Chile had not properly applied those recommendations and 
rulings to wheat and wheat flour, as these two products  were still subject to specific duties under that 
system.  He recalled that the relevant Reports by the Panel and the Appellate Body had upheld 
Argentina's complaints regarding the inconsistency of Chile's price band system with Article 4.2 of 
the Agreement on Agriculture.  Indeed, the Appellate  Body had upheld the Panel's finding that Chile's 
price band system was a border measure similar to variable import levies and minimum import prices.  Argentina believed that the only way for the DS B's recommendations in this matter to be 
implemented in a manner consistent with the WT O Agreements was for imports of the products 
concerned to be subject only to ordinary customs duties. 
76. Argentina's repeated and prolonged efforts to ach ieve a satisfactory settlement had yielded no 
results.  Even with the changes that had been made to its price band system, Chile was still in 
violation of WTO rules since the system continued to constitute a border measure that was similar to 
variable import levies and minimum import prices.  The consultations had also  failed to resolve the 
matter.  Under the circumstances, after protracted and continuous efforts to find a solution to this 
dispute, Argentina had no choice, but to resort to Article 21.5 of the DSU and, in the light of the bilateral Understanding between the two countries regarding procedures under Articles 21 and 22 of 
the DSU, to request that the matter be referred to the original Panel so that a decision be taken with 
respect to compliance with the DSB's recommendations and rulings, in the hope that such a decision 
would put a definitive end to this long-standing dispute. 
77. The representative of Chile
 said that his country noted Argentina's recourse to Article 21.5 of 
the DSU.  Although Chile had informed the DSB at th e end of 2003 of the changes made to the price 
band system by means of Law No. 19.897 and the subsequent Regulation thereto, and remained 
convinced that those changes complied in both the fo rm and the substance with the DSB's rulings and 
recommendations, Chile kept open a ch annel for constructive dialogue w ith Argentina with a view to 
seeking an agreement that would make it unnecessary to r esort to this forum.  Regrettably, despite his 
country's efforts, no such agreement had been reached.  WT/DSB/M/203 
 Page 17 
 
 
  78. At the end of 2003, Chile and Argentina had also signed and notified to the WTO an 
understanding regarding procedures under Articles 21 and 22 of the DSU (WT/DS207/16), which as 
Chile understood, would apply to the proceedings in  question without prejudice to the general and 
supplementary rules contained in the DSU.  Chile co nsidered that Argentina's request, before the DSB 
at the present meeting, did not appear to meet th e DSU requirements as interpreted by the Appellate 
Body.  In this connection, no "measure taken to co mply" had been specified, given that the regulation 
identified by Argentina as serving the purpose of compliance with the recommendations and rulings 
of the DSB was Law 19.897.  However, that law c overed a range of topics,  including the changes 
made to the price band system for wheat and wheat flour, and it also dealt with other matters that 
stood outside the scope of this dispute – such as aspects of the regime applicable to sugar – and 
which, therefore, did not constitute "measures taken to comply".  Similarly, Argentina's request failed 
to state what aspects of the chang es made by Chile were still consider ed questionable in the light of 
the DSB's  recommendations and rulings. It confined  itself instead to mentioning just two elements, 
stating that the "changes do not alter the [price band system] in its essence". 
79. Mechanisms such as the price band system resu lted from the need to deal with significant 
international market distortions for the products in question, also present in Argentina, which 
prevented efficient producers such as those in Ch ile from competing on an equal footing.  The scant 
progress made in multilateral negotiations intended to eliminate such distortions merely underscored 
the urgency and necessity of maintaining such mech anisms.  In this case, Chile's price band system 
was fully WTO-consistent as Chile would demonstr ate before the Panel.  Finally, pursuant to 
paragraph 3 of the procedures under Articles 21 and 22 of the DSU, which had been concluded on 
23 December 2003, Chile accepted the establishment of a panel at the present meeting. 
80. The representative of Argentina  said that since Chile had stated its view about Argentina's 
panel request, namely, that Argentina had not clearly  identified the measure designed to comply with 
the DSB's recommendations, he wished to state that Argentina believed that the terms of reference of 
its panel request were clear regarding its legal cl aims.  In Argentina's view, the request for the 
establishment of a panel was consistent and met th e requirements of both Article 6.1 of the DSU and 
the bilateral understanding. 
81. 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 Argentina in document WT/DS207/18.  The 
Panel would have standard  terms of reference. 
82. The representatives of Australia , Colombia , the European Communities  and the United States  
reserved their third-party rights to par ticipate in the Panel's proceedings.  
5. Proposed nomination for the indicative list of governmental and non-governmental 
panelists 
83. The Chairman  drew attention to document WT/DSB/W /306, which contained an additional 
name proposed for inclusion on the indicative list of  governmental and non-governmental panelists, in 
accordance with Article 8.4 of the DSU.  Unless there was any objection, he proposed that the DSB 
approve the name contained in document WT/DSB/W/306. 
84. The DSB so agreed . WT/DSB/M/203 
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  6. Mexico – Definitive anti-dumping measures on beef and rice: Complaint with respect to 
rice 
(a) Statement by Mexico  
85. The representative of Mexico
, speaking under "Other Business", said that having reached an 
agreement with the United States, hi s country had informed the DSB in  writing of its intentions with 
respect to the implementation of the recommendations and rulings of the DSB in the dispute under 
consideration.  This was done by a letter da ted 19 January 2006 (WT/DS295/10).  Mexico was 
pleased to reaffirm at the present meeting that it in tended to comply with its WTO obligations and to 
implement the DSB's recommendations and rulings.  Mexico had begun to look at various possible 
ways of doing this.  Mexico would need a reasona ble period of time for that purpose and was prepared 
to examine this matter with the United States in conformity with Article 21.3(b) of the DSU. 
86. The representative of Norway  said that Article 21.3 of the DSU provided that at a DSB 
meeting held within 30 days after the date of a doption of a panel or Appellate Body report, the 
Member concerned shall inform the DSB of its  intentions in respect of implementation 
recommendations and rulings of the DSB.  Furthe rmore, footnote 11 which was related to that 
paragraph provided that if a meeting of the DSB wa s not scheduled during such a  period, a meeting 
of the DSB shall be held for this purpose.  It ha d now gone 31 days.  Mexico, as had just been stated, 
had sent a letter to the DSB and to the United St ates in respect of its intentions regarding 
implementation. Norway, of course, had no proble m with the content of the letter nor with the 
substance of the intention of Mexico.  But the sy stemic issue was that the time-limit had passed and 
Mexico had sent the letter, but the information re garding the matter had been provided under "Other 
Business", whereas this should have normally been  a regular item on the main agenda of the DSB 
meeting. Therefore, while Norway had no problem with  the substance of the matter as to what Mexico 
had just stated in respect of its intentions, it be lieved that this should not set a precedent and that 
Members should systemically continue to follow the provisions of Article 21.3 of the DSU to the 
letter. 
87. The representative of the United States  said that his country thanked Mexico for its statement 
made at the present meeting as well as for its written notification to the DSB of its intentions with 
respect to implementation of the recommendations and rulings that the DSB had adopted in this 
dispute.  The United States looked forward to prompt implementation by Mexico of those 
recommendations and rulings, and looked forward as well to an early discussion with Mexico 
concerning the period of time in which it would do so.  Regarding Norway's point, the United States 
was pleased that the United States and Mexico had b een able to reach agreement to allow Mexico to 
provide a written statement of its intentions to the DSB, thereby avoiding the scheduling of an 
unnecessary meeting.  While the United States appreciat ed the sentiment behind Norway's statement, 
it considered that it was unnecessary to have a brief meeting, particularly that Members were early in the year when many delegates were returning to Geneva. 
88. The DSB took note
 of the statements. 
7. United States – Countervailing measures co ncerning certain products from the 
European Communities 
(a) Statement by the European Communities  
89. The representative of the European Communities , speaking under "Other Business", said that 
the EC would have welcomed if the United States ha d submitted a status report in this case this time.  
For the information of Members, the EC wished to add that the United States had re-opened the 
Section 129 proceeding in the DS212 case on 29 No vember 2005, and had given itself 180 days to  WT/DSB/M/203 
 Page 19 
 
 
  complete the process.  EC firms and governments had already received, a nd had replied to three 
questionnaires from the US authorities.  The EC trusted that the United States would report this exercise to the DSB, and was c onfident that the US authorities would implement the 21.5 Panel's 
findings by repealing these very old, unjustifie d and WTO incompatible measures without undue 
delay. 
90. The representative of the United States
 said that his country thanked the EC for its statement.  
The United States would convey the EC's comments to  capital, but could inform Members that on 
29 November 2005, the US Trade Representative had requested that the Department of Commerce issue, "as quickly as possible", revised determinati ons with respect to the sunset reviews involving 
Spain and the United Kingdom.  Shortly thereafte r the Department of Commerce had initiated 
proceedings. 
91. The DSB took note
 of the statements. 
8. Selection process for appointment of a new Appellate Body member 
(a) Statement by the Chairman 
92. The Chairman , speaking under "Other Business", said  that WTO Members were now faced 
with the sad necessity of filling a position in the Appellate Body, which had just become vacant 
suddenly and tragically.  He said that he felt that he was obliged to raise this issue at the present 
meeting for the benefit of all Members and the sm ooth functioning of the Appellate Body.  He said 
that it was his intention to propose at the 17 Fe bruary DSB meeting, which was the next regular 
meeting, that the DSB agree to launch the process for selecting a new Appellate Body member to replace the late Mr. John Lockhart for the remainde r of his term, in accordance with Article 17.2 of 
the DSU.  Also at that meeting, he would pr opose that the DSB agree to establish a Selection 
Committee consisting of the Director General and th e Chairpersons of the General Council, the Goods 
Council, the Services Council, the TRIPS Council a nd the DSB, in accordance with the procedures set 
out in document WT/DSB/1.  It was, therefore, his inte ntion to revert to this matter at the 17 February 
DSB meeting and, of course, if any delegation woul d wish to offer views on the procedures that he 
had just outlined, his door was open and he would be happy to receive such views. 
93. The DSB took note
 of the statement.  
 
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