RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/243 
15 February 2008 
 (08-0696) 
Dispute Settlement Body 
17 December 2007  
 
 
  
MINUTES OF MEETING 
 
Held in the Centre William Rappard
 
on 17 December 2007  
 
Chairman:  Mr. Bruce Gosper (Australia) 
 
 
Prior to the adoption of the agenda  
  The representative of Korea
 noted that, in relation to item 7 of the proposed agenda:  i.e. 
"Japan – Countervailing Duties on Dynamic Random  Access Memories from Korea:  Report of the 
Appellate Body and Report of Pane l, a corrigendum had been issued  to the Appellate Body Report 
WT/DS336/AB/R/Corr.1 in order to rectify a typogra phical error in the Report.  Accordingly, Korea 
proposed that the above-mentioned corrigendum be considered together with the Appellate Body 
Report as it was an integral part thereof.  
 
 It was so agreed .  
 
 
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 – Measures relating to zeroing and sunset reviews:  Status report by 
the United States .............................................................................................................. ...........6  
2. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ............................................7  
(a) Statements by the European Communities and Japan ................................................................7  
3. United States – Subsidies and other domestic support for corn and other 
agricultural products.......................................................................................................... ......9  
(a) Request for the establishment of a panel by Canada ..................................................................9  WT/DSB/M/243 
Page 2  
 
  4.
 United States – Domestic support and export credit guarantees for agricultural 
products ....................................................................................................................... ..............9  
(a) Request for the establishment of a panel by  Brazil.....................................................................9  
5. Australia – Measures affecting the importation of apples from New Zealand..................11  
(a) Request for the establishment of  a panel by New Zealand .......................................................11  
6. Brazil – Measures affecting im ports of retreaded tyres ......................................................11  
(a) Report of the Appellate Body and Report of the Panel.............................................................11  
7. Japan – Countervailing duties on dynami c random access memories from Korea..........15  
(a) Report of the Appellate Body and Report of the Panel..............................................................15  
 
 1. Surveillance of implementation of recommendations adopted by the DSB 
(a) United States – Section 211 Omnibus Appr opriations Act of 1998:  Status report by 
the United States (WT/DS176/11/Add.61) 
 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.61) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.36) 
 
(d) United States – Measures relating to zeroi ng and sunset reviews:  Status report by 
the United States (WT/DS322/22/Add.1) 
 1. The Chairman
 recalled that Article 21.6 of the DSU requires 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 Appropr iations Act of 1998:  Status report by 
the United States (WT/DS176/11/Add.61) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.61, 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 6 December 2007, in accordance with Ar ticle 21.6 of the DSU.  As noted in that status 
report, a number of legislative proposals that would implement the DSB's recommendations and 
rulings in this dispute had been introduced in th e current Congress, in both the US Senate and the US 
House of Representatives.  The US administratio n continued to work with the US Congress to 
implement the DSB's recommendations and rulings. 
4. The representative of th e European Communities  said that the EC was, once again, bound to 
note that the United States had not made any progres s towards the implementation of the WTO ruling.  
The EC considered that the effective and non-discr iminatory protection of intellectual property rights 
was an essential element in the de velopment of strong and mutually be neficial trade relations and, in  WT/DSB/M/243 
 Page 3 
 
 
  that respect, the conclusion of the TRIPS Agreem ent was a major achievement.  There was no doubt 
that the United States shared th at view.  The EC sincerely hoped that the introduction of bipartisan 
bills that would repeal Section 211 would show a re newed and genuine interest of the United States to 
finally put itself into compliance with its TRIPS obligations. 
5. The representative of Cuba  said that Members were aware of Cuba's interest in this dispute.  
For years Cuba had been denouncing, in the WTO, th e US blatant non-compliance.   As it had already 
been indicated in a letter addressed to the Chai rman of the DSB, Cuba was dissatisfied and 
disappointed with the sudden circulation of a fax sent out on 27 November reconvening the DSB 
meeting on the same date.  Cuba had never missed any DSB meetin gs, and had continued to denounce 
the situation of non-compliance in this dispute.  Cuba was determined in its denunciations because it 
felt that it had the right to do so.  His delegation would appreciate if, in future, meetings were not 
reconvened on short notice.  However exceptional th e circumstances, faxes convening DSB meetings 
should not be circulated on short notice in order to  ensure transparency, the participation of all 
Members in different WTO meetings and the smooth functioning of the WTO.  Finally, his delegation 
thanked the Chairman for accepting to circulate Cuba's  statement, which Cuba would have wished to 
make at the 27 November DSB meeting.1  
6. Cuba said that the United States had recognized the importance of acting in conformity with 
intellectual property rights legislations and had re peated, time and again, its commitment to the 
TRIPS Agreement.  All Members had heard the United  States express its concern with the violation of 
intellectual property rights.  According to WIPO statistics, the US Patent and Trademark Office 
received more applications for the protection of inte llectual property rights than practically any of its 
counterparts.  At the same time, all knew the s ubstantial profits accumulated by the entertainment 
industry, which owed its very existence to the protecti on of such rights.  It was all the more surprising 
that in this dispute the United States had disreg arded the provisions of the TRIPS Agreement and of 
the DSU.  It had made a mockery of the DSB's rulings and recommendations and the principle of 
prompt compliance.  The statements repeated by th e United States to the effect that the US Congress 
was allegedly working on legislative measures, had failed to satisfy the requirements of the DSB, and 
constituted a poor excuse for non-compliance.  WT O Members had agreed to put into place a 
multilateral trading system, workable for all, w ith emphasis on compliance with obligations.  In 
Cuba's view, the dispute settlement system was one of the most important achievements of the 
Uruguay Round negotiations.  So how was it possible for a Member to undermine this system?  Members had assumed their obligations and were responsible for actions of their respective 
administrations in this regard.  Section 211 not only undermined the rights of Cuban trademark 
owners, but above all, it reflected a double standard  of a country that put demands on others while 
pursuing a non-compliance situation with total impunity; a country which violated basic WTO principles such as the national treatment and the most-favoured-nation treatment. 
7. By applying Section 211, the United States was pursuing a similar objective like the one 
under economic, commercial and fina ncial blockade of Cuba, whic h had been condemned almost 
unanimously for the sixteenth time in a UN  General Assembly Resolution adopted on 
30 October 2007 with 184 votes in favour.  Atte mpts to usurp well-known Cuban trademarks 
identifying products of excellence, such as rum a nd tobacco, had been occurring repeatedly over the 
past years.  Companies located in and outside of  the United States had applied for registration in 
the United States and elsewhere.  Fortunately in so me cases without success.  Examples of this were 
Bacardi's claim to the ownership of the Havana Club trademark in Spain, which had been rejected by 
the Provincial Court of Madrid, and the attempts in  the United States to acquire ownership of cigar 
brands such as "Cohiba", and more recently "Gua ntanamera", on the grounds that owing to the 
blockade, Cuba could not be present in that mark et.  Cuba, once again, condemned this continued 
non-compliance and warned that this was a serious  matter.  Cuba reiterated its request that 
                                                     
 
1 WT/DSB/COM/8. WT/DSB/M/243 
Page 4  
 
  Section 211 be unconditionally repealed without fu rther delay.  Members wanted action, not 
explanations. 
8. The representative of the Bolivarian Republic of Venezuela
 said that her country thanked 
Cuba for its statement, which it fully supported.  As usual, Cuba's statement enabled Venezuela to 
understand what was currently happening in relation to  this dispute.  Her delegation noted the status 
report presented by the United States.  Like many other countries, Venezuela had already stated that 
this continuous disrespect of the DSB's recomme ndations had negative effects, not only for the 
credibility of the DSB, but that it also affect ed the rights negotiated by Members as well as the 
credibility of the multilateral trading system.  Despite the US good will, Members were still 
discussing Section 211.  Article 21 in paragraphs 1 and 2 provided for the prompt implementation of 
the DSB's recommendations and rulings, and that th e attention must be given to the issues that 
affected the interests of developing countries.  Ho wever, this had not been the case in the Section 211 
dispute.  Indeed, the resolution had been awaited for a long time now.  Therefore, it had been essential 
to find alternatives so as to ensure the full implementation of the DSB's recommendations to 
compensate developing countries, which had been  affected by this long and continued non-
implementation situation.  Perhaps Members woul d have to wait until the conclusion of the DSU 
negotiations.  However, the United States had to show  its willingness to comply with its obligations, if 
it wanted to have a good record towards full implem entation of the recommendations in most of its 
disputes.  
9. The representative of China  said that his country, once again, wished to express its concerns 
on prolonged implementation in this dispute.  Five years had passed since the adoption of the 
Appellate Body and the Panel Reports by the DSB,  but the implementation i ssue in this  case w as still 
before the DSB for discussion.  China noted the de velopment in the United States on this matter, but 
there was yet no clear indication when this matter w ould hopefully be resolved.  Bearing in mind the 
systemic impact that the undue delay of full impl ementation of the DSB's rulings would cause to the 
integrity and efficiency of the dispute settlement  system, China urged the United States to double its 
effort to fully implement the decision of the DSB in this dispute.  
10. The representative of Thailand  said that his delegation wished to thank the United States for 
its status report and the statement made at the pr esent meeting.  Like previous speakers, Thailand 
wished to express its concern over the systemic impli cations of this dispute.  Non-implementation of 
the DSB's rulings and recommendations undermined the rules-based multilateral trading system.  
Thailand, therefore, called on the United States to ta ke the necessary and urgent steps to comply with 
its obligations under the TRIPS Agreement. 
11. The representative of India  said that her country, while thanking the United States for its 
status report and the statement made at the present meeting, wished to renew its systemic concerns about the situation of non-compliance in this dis pute.  Though the DSB had adopted the panel and the 
Appellate Body reports more than five years ago,  no implementing action ha d been taken nor could 
WTO Members discern any clear sign from the US statements that such an action could be envisaged 
in the near future.  As mentioned on past occa sions, a protracted non-compliance situation by the 
Members in this Organization clearly undermined the credibility of the system and the carefully 
negotiated balance of rights and obligations of the entire Membership. 
12. The representative of Viet Nam
 said that his delegation wished to echo other Members 
requesting the United States to implement the DSB' s rulings and recommendations in this dispute 
without further delay. 
13. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/243 
 Page 5 
 
 
  (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.61) 
14. The Chairman  drew attention to document WT/DS184/ 15/Add.61, 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 his country had provided a status report in 
this dispute on 6 December 2007, in accordance 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 US Congress with respect to the recommendations and 
rulings of the DSB that had not already been addressed by the US authorities by 23 November 2002. 
16. The representative of Japan
 said that his country thanked the United States for its statement 
and the latest status report in this dispute.  Japan also acknowledged that, in November 2002, 
the United States had taken the measure to impl ement the part of the DSB's recommendations, as 
reported by the United States.  The fact remain ed, however, that, while it had been more than 
six years after the DSB had adopted its recommenda tions, the remaining part of the recommendations 
had not yet been implemented and the issue of impl ementation in this case was still on the agenda of 
the DSB.  Japan took note of the US statement th at its administration continued to support specific 
legislative amendments that would address non-im plemented parts of the DSB's recommendations 
and rulings and was working with the current C ongress to pass such amendments.  Japan strongly 
hoped that the United States would soon be in a position to report to the DSB on more tangible 
progress in this respect.  A full and prompt implem entation 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 co me to full compliance without further delay. 
17. 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.36) 
18. The Chairman  drew attention to document WT/DS160/ 24/Add.36, 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. 
19. The representative of the United States  said that his country had provided a status report in 
this dispute on 6 December 2007, in accordance with Article 21.6 of the DSU.  The US administration 
would work closely with the US Congress and would c ontinue to confer with the EC, in order to reach 
a mutually satisfactory resolution of this matter.  In  this regard, the United States appreciated the EC's 
recent statements that it remained pr epared to work with the United St ates to seek a resolution to this 
dispute.  The United States shared the EC's goa l of discussing how such a mutually satisfactory 
solution could be achieved. 
20. The representative of the European Communities  said that there was no need to repeat what 
the EC had stated countless times.  The EC was still waiting for compliance. 
21. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/243 
Page 6  
 
  (d) United States – Measures relating to zeroing and sunset reviews:  Status report by 
the United States (WT/DS322/22/Add.1) 
22. The Chairman
 drew attention to document WT/DS322/ 22/Add.1, 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 measures relating to zeroing and sunset reviews. 
23. The representative of the United States  said that his country had provided a status report in 
this dispute on 6 December 2007, in accordance with Article 21.6 of the DSU.  As noted in that 
report, the United States had already addressed the DSB's recommendations and rulings with respect 
to certain of the measures at issue in this disput e.  In addition, the United States was continuing to 
consult internally on steps to be taken with r espect to the other DSB recommendations and rulings. 
24. The representative of Japan  said that his country thanked the United States for its statement 
and the second report on the status of implementa tion of the DSB's recommendations and rulings in 
this dispute.  In the report, the United States had mentioned that, as from 22 February 2007, the US Department of Commerce had c eased to use the zeroing methodology in weighted average-to-
weighted average (W-to-W) comparisons in origin al investigations.  Japan recognized that the 
withdrawal of zeroing measures in this context was a positive step forward in the right direction.  
However, this step by the United States had a ddressed only a part of the DSB's recommendations and 
rulings.  For the remaining part of the DSB's recommendations concerning the other WTO-inconsistent zeroing measures, the status report simply stated that the United States was "continuing to consult internally on steps to be taken".  Th e DSB had adopted the recommendations and rulings on 
23 January 2007 and the reasonable pe riod of time mutually agreed between the parties would expire 
on 24 December 2007.  Since the expiry of the reasona ble period of time was only days ahead, Japan 
encouraged the United States to further elaborat e on the progress made thus far and to indicate 
specific steps that it intended to take to comply w ith the remaining part of the DSB recommendations.  
Japan believed that a full and prompt implementati on of the DSB's  recommendations and rulings was 
essential not only for the effective resolution of par ticular disputes, but also for maintaining the 
credibility and proper functioning of the WTO di spute settlement system.  Japan urged the US 
administration to accelerate its efforts to come to full compliance within the RPT as mutually agreed. 
25. The representative of th e European Communities
 said that the EC had a direct interest in this 
matter, as did indeed many other Members, as it w as still awaiting full implementation of the rulings 
in its own zeroing case against the United States (DS294) .  In addition, the EC had another dispute on 
the continued application of zeroing by the US pendi ng before the Panel.  The issue of zeroing had 
been the subject of numerous litigations since the fi rst case had been brought against the EC in 1998.  
To date, 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.  All issues of law had now been 
extensively pleaded and analyzed.  There was no doubt left that zeroing ran foul of fundamental obligations of the Anti-Dumping Agreement, whic h were to establish dumping in respect of an 
exporter and a certain product, and to conduct a fa ir comparison between the export prices and normal 
value.  The EC hoped that the United States would finally accept this and put an end to all remaining illegal zeroing practices.  
26. The representative of the United States
 said that, in response to Japan's question, his 
delegation wished to state that the United States was consulting internally on the steps to be taken in 
connection with those measures and would also cont inue to consult with Jap an in the days ahead. 
27. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting.  WT/DSB/M/243 
 Page 7 
 
 
  2. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by the European Communities and Japan 
28. The Chairman  said that this item was on the agenda of the present meeting at the request of 
the EC and Japan.  He invited th e respective representatives to speak. 
29. The representatives of the European Communities  said that by the end of this month, 
the United States would complete its seventh illega l distribution under the CDSOA.  The provisional 
amounts published earlier in 2007 indicated that it was likely to be the most important.  On 30 April, already US$279 million had been available for distri bution.  On the same date, there had been only 
US$171 million available in 2006 and US$97 million availa ble in 2005.  This distribution, and those 
to come, would continue to produce trade-distortin g effects to the detriment of all WTO Members.  
The EC was still waiting for a convincing explanatio n as to how this was co mpatible with the US 
assertions month after month that it had taken all actions necessary to bring itself into compliance 
with its WTO obligations.  The EC wished to ask again the United States if and what steps it intended 
to take to stop the transfer of anti-dumping and co untervailing duties to its industry.  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 implementation reports in this dispute. 
30. The representative of Japan
 said that on 5 December 2007, the US Customs and Border 
Protection had issued the "FY2007 Annual Disburse ments Report".  Based on information contained 
in that report, the total figure for fiscal year 2007 disbursements under the CDSOA ,which had just 
been completed, had amounted to some US$262 milli on.  It was regrettable that the United States 
continued CDSOA disbursements in spite of Japan's re peated calls for their termination.  These latest 
disbursements demonstrated that the CDSOA had b een repealed only in form, but that it was still 
operational.  Although Japan recognized that a duty collected on entries entered as from 1 October 2007 were no longer subject to the dist ributions, "the distribution process will continue 
until all entries made before [that date] are liquidated and the duties are collected".
2  In the US system, 
such liquidation and collection could take years to  come, and the distributions that would cause 
negative trade impacts on Japan and other WT O Members, would continue.  Under these 
circumstances, Japan failed to see the rationale be hind the US assertion that it had taken all necessary 
steps for implementation in this case.  Japan, on ce again, urged the United States to immediately 
terminate the illegal disbursements and repeal the CD SOA not just in form but also in substance.  
Under Article 21.6 of the DSU, the issue of impl ementation must be under surveillance by the DSB 
until the issue was resolved.  Jap an would like to remind the Unite d States that it was still under 
obligation to provide the DSB with a status report pu rsuant to that provision.  Japan reserved all its 
rights under the DSU until the United States came into full compliance. 
31. The representative of China  said that his country thanked the EC and Japan for, once again, 
raising this item on the DSB agenda.  China shared  the view expressed by previous speakers and 
wished to join them in urging the United St ates to comply fully with the DSB's rulings. 
32. The representative of Canada  said that her country was pleased that duty deposits collected by 
the United States after 30 September would no longer be subject to the Byrd Amendment.  While this was a significant step forward, duty deposits collect ed by the United States before 1 October 2007, 
would, nevertheless, continue to be subject to th e Byrd Amendment.  Until the United States ceased to 
administer the Byrd Amendment, Canada shared the view that surveillance by the DSB had to 
continue.  
                                                     
 
 2 71 Federal Register at 31336 et seq. (dated 1June 2006). WT/DSB/M/243 
Page 8  
 
  33. The representative of India
 said that her country thanked the EC and Japan for raising this 
issue at the present DSB meeting once again.  While India noted that no anti-dumping or 
countervailing duties collected on products entere d into the United States after 30 September 2007 
would be handed out to the US domestic industry, there remained the fact that distribution still did occur under the Byrd Amendment with trade-distor tive effects for foreign producers and exporters.  
India, therefore, wished to reiterate that full co mpliance on the part of the United States would only 
come through the complete elimination of all di sbursement under the Byrd Amendment.  Until such 
condition was met, WTO Members should be able  to exercise any rights related to the non-
compliance situation they faced in this case. 
34. The representative of Thailand
 said that his delegation wished to start by joining previous 
speakers in thanking the EC and Jap an for continuing to bring this item before the DSB.  Thailand 
noted with appreciation the positive steps taken by the United States not to disburse to its industries 
AD/CVD duties collected on goods entering the Un ited States from 1 October 2007.  However, 
Thailand remained concerned that AD/CVD duties coll ected on goods that entered the United States 
prior to 1 October 2007 would continue to be di sbursed to the domestic industry under the Byrd 
Amendment.  The updated figures mentioned by the EC and Japan relating to the latest round of 
disbursements validated Thailand's concern.  Tha iland, therefore, urged the United States to cease its 
WTO-inconsistent disbursements, to repeal the By rd Amendment with immediate practical effects, 
and to resume providing status reports until such act ions were taken and this  matter had been fully 
resolved. 
35. The representative of Brazil  said that his country thanked the EC and Japan for raising this 
item on the DSB agenda.  Brazil fully shared the view s of the EC and Japan and wished to join them, 
as well as others, in urging the United States to bring itself into full compliance with the DSB's 
recommendations in this dispute so that the three di stortive effects of the disbursement under the Byrd 
Amendment would no longer  occur in the future. 
36. The representative of the United States  said that, as his country had already explained at 
previous DSB meetings, the US President had signed the Deficit Reduction Act into law on 
8 February 2006.  That Act included a provisio n repealing the Continued Dumping and Subsidy 
Offset Act of 2000.  Thus, the United States had ta ken all actions necessary to implement the DSB's 
recommendations and rulings in these disputes.  The United States welcomed the EC and Japan's 
recognition that the 2006 Deficit Reduction Act did not  permit the distribution of duties collected on 
goods entered after 1 October 2007.  The United States w as, therefore, all the more surprised to hear 
the EC and Japan make the statement that the United States would remain in breach of its WTO 
obligations.  The United States wanted to know if th e EC and Japan were saying that they considered 
that the United States would remain in breach of its WTO obligations, notwithstanding the fact that 
anti-dumping duties and countervailing duties that were being collected on goods now entering 
the United States would not be distributed to domestic firms.  
37. With respect to comments regarding further status  reports in this matter, as the United States 
had already explained at previous DSB meetings, th e United States had taken all steps necessary to 
implement the DSB's recommendations and rulings in th ese disputes.  In this light, the United States 
failed to see what purpose would be served by fu rther submission of status reports repeating the 
progress the United States had made in the implementation of the DSB's recommendations and rulings. 
38. The DSB took note
 of the statements.   WT/DSB/M/243 
 Page 9 
 
 
  3. United States – Subsidies and other domestic  support for corn and other agricultural 
products 
(a) Request for the establishment of a panel by Canada (WT/DS357/12 and Corr.1) 
4. United States – Domestic support and export  credit guarantees for agricultural products 
(a) Request for the establishment of a panel by Brazil (WT/DS365/13) 
39. The Chairman  proposed that items 3 and 4 be taken up together since they pertained to the 
same matter.   
40. First the Chairman  drew attention to the communicati on from Canada contained in document 
WT/DS357/12 and Corr.1.  He recalled that  the DSB had considered this matter on 
27 November 2007 and had agreed to revert to it.  He invited the representative of Canada to speak. 
41. The representative of Canada  said that her country strongly supported the shared commitment 
of WTO Members to establish fair and market-orien ted, world agricultural markets.  This was why 
Canada continued to work with other WTO Member s to achieve an ambitious outcome on agriculture 
as part of the Doha Round negotiations.  At the same  time, one must ensure that WTO Members were 
meeting their WTO commitments under the current Agreement on Agriculture.  As outlined in its 
panel request of 8 November 2007, Canada believed that the United States had been providing trade-
distorting agriculture subsidies in a manner in consistent with its WTO commitments.  More 
specifically, it was Canada's view that:  the US 's Current Total Aggregate Measurement of Support 
had exceeded its commitment levels in each of 1999,  2000, 2001, 2002, 2004 and 2005, contrary to 
the Agreement on Agriculture.  Canada estimat ed that during these years the United States had 
exceeded its WTO commitment levels  by billions of dollars each year.  The measures at issue 
included a broad range of US agriculture subs idy programmes and payments, such as Direct 
Payments, Counter-Cyclical Payments and Loan De ficiency Payments, which provided large amounts 
of trade-distorting support.   
42. Canada and the United States ha d held consultations on this matter in February 2007.  
Because those consultations had not resolved the ma tter, Canada had requested the establishment of a 
panel at the 19 November DSB meeting.  Since the United States, as allowed under the DSU, had 
blocked that first request, Canada was now making a second request that a panel be established to 
examine the matter.  Given that Canada's and Brazi l's requests for the establishment of a panel related 
to the same matter, Canada requested that pursu ant to Article 9.1 of the DSU a single panel be 
established to examine Canada's and Brazil's complaints. 
43. The Chairman  draw attention to the communicati on from Brazil contained in document 
WT/DS365/13.  He recalled that the DSB had consider ed this matter on 27 November and had agreed 
to revert to it.  He invited the representative of Brazil to speak. 
44. The representative of Brazil  said that at the DSB meeting, which had been reconvened on 
27 November 2007, Brazil had offered brief comment s on the concerns raised by domestic support 
measures maintained by the United States in favour of  US agricultural producers.  All those measures 
had been the subject of consultations held on 22 A ugust 2007 with the United States.  However, as 
informed before, despite useful exchanges of view s and information during the consultations, the US 
clarifications had not been sufficient to dissipate Brazil's concerns.  Accordingly, Brazil had filed a request for the establishment of a panel on 8 November 2007 (WT/DS365/13), which had been considered by the DSB, for the first time, on 27 November 2007.  Brazil still believed that the US 
measures nullified or impaired the benefits accrui ng to Brazil under the Agreement on Agriculture 
and, therefore, requested, for the second time, that a panel be established, with standard terms of WT/DSB/M/243 
Page 10  
 
  reference, to examine the matter.  Additionally, ha ving regard to the request made by Canada relating 
to the same matter, Brazil respectfully requested th at a single panel be established in accordance with 
Article 9.1 of the DSU.  Finally, taking into account that the measures related to export credit 
guarantees had not been included in Brazil's panel request, Brazil considered appropriate that the 
name of the present dispute be adjusted, at the appr opriate juncture, so as to better reflect its content 
and scope, i.e. "United States – Domestic Support for Agricultural Products". 
45. The representative of the United States
 said that his country was disappointed that Canada 
and Brazil had decided to pursue their requests for a panel at the present meeting.  The United States 
understood that a panel would be established at the present meeting.  Nonetheless, the United States 
continued to believe that this dispute represente d an unnecessary diversion of time and resources from 
the important tasks before Members in the Do ha Development Agenda (DDA) negotiations.  
The United States continued to seek a successf ul outcome for the DDA, including substantial 
reductions in trade-distorting domestic support for agriculture combined with equally ambitious 
progress in the other pillars of the agricultu re negotiations and the Round as a whole.  
The United States would continue to work with Ca nada, Brazil, and other Members to achieve this 
outcome.  The United States had designed its farm  programmes to ensure compliance with the 
existing negotiated limits on domestic support.  Th e United States believed that a panel would so 
agree.  The United States must again point out th at some of the measures identified by Canada and 
Brazil were not properly within the te rms of reference of a panel.  Some had ceased to exist – in some 
cases, more than five years ago – and not all of  the measures identified by Canada and Brazil had 
been the subject of consultations.   
46. With respect to the requests of Canada and Brazil to establish a single panel, pursuant to 
Article 9.1 of the DSU, the United States noted that  there were some differences in the scope of the 
measures identified in their respective panel requests.  In addition, there were differences in the scope 
of measures that had been the subject of consultatio ns with Canada and Brazil.  Nonetheless, in the 
view of the United States, there was sufficient ove rlap between the two panel requests to permit the 
establishment of a single panel in this matter, under Article 9.1 of the DSU.  
47. With respect to Brazil's comment that it believe d it appropriate to ch ange the name of its 
dispute, this issue was not before the DSB as Br azil appeared to recognize in its statement.  The 
names of disputes were assigned by the Secretariat, not by the complaining Member and not by the DSB.  The name of a dispute had no effect on the rights or obligations of the parties, and the United States understood that changing the name of  a dispute after documents had been circulated 
involved a considerable administrative burden on the S ecretariat.  It had never been the task of the 
DSB to modify the name of a dispute where a pane l request was narrower than a consultation request, 
and the United States saw no reason why the DSB should undertake such a task, nor why the matter should be raised here.  Finally, the United States wished to note the cooperation of the parties on a 
procedural issue, namely, and without prejudice to  any systemic views, that the two complaining 
parties and the United States had agreed that they woul d jointly request the panel, to be established at 
the present meeting,  to open both of its meetings to  all Members and to the public.  The United States 
looked forward to further cooperation on procedural  matters with the complaining parties going 
forward. 
48. The representative of Brazil
 said that, very briefly, his delegation wanted to make a point of 
clarification.  He said that it was not Brazil's unders tanding that it was within the authority of the DSB 
to change names of disputes. 
49. The DSB took note  of the statements and agreed  to establish a single panel in accordance with 
the provisions of Article 9.1 of the DSU, with sta ndard terms of reference, to examine the complaint 
by Canada contained in WT/DS357/12 and Corr. 1 and the complaint by Brazil contained in 
WT/DS365/13.  WT/DSB/M/243 
 Page 11 
 
 
  50. The representatives of Argentina , Australia , Chile , the European Communities , India , Japan , 
Mexico , New Zealand , Nicaragua , South Africa , Chinese Taipei , and Thailand  reserved their third-
party rights to participate in the Panel's proceedings.  
5. Australia – Measures affecting the importation of apples from New Zealand  
(a) Request for the establishment of a panel by New Zealand (WT/DS367/5) 
51. The Chairman  drew attention to the communication from New Zealand contained in 
document WT/DS367/5, and invited the re presentative of New Zealand to speak. 
52. The representative of New Zealand  said that his country had sought access fo r New Zealand 
apples into the Australian market since 1986.  Ne w Zealand's fourth and most recent request for 
access had been made in 1999.  In November 2006 , Australia had published a "Final Import Risk 
Analysis Report for Apples from New Zealand ("Final IRA").  The Final IRA recommended that 
access be granted, but subject to extensive risk  management measures.  On 27 March 2007, the 
Australian Director of Animal and Plant Quarantine had determined that importation of New Zealand apples could be permitted subject to the Quarantin e Act 1908 and the measures in the Final IRA.  
New Zealand considered that the measures specified in and required pursuant to Australia's Final IRA 
were not scientifically justifie d and were inconsistent  with Australia's obligations under the SPS 
Agreement.  New Zealand's panel request describe d these matters in greater detail.  In August 2007, 
New Zealand had submitted a request for WTO dis pute settlement consultations.  New Zealand and 
Australian officials had met in Geneva in Octobe r 2007 for consultations.  The United States and the 
EC had participated as third parties.  Regrettably, those consultations had not resolved this dispute.  
New Zealand, therefore, requested that the DSB establish a panel at the present meeting to examine 
the matters set forth in New Zealand's panel request. 
53. The representative of Australia
 said that her country was disappointed that New Zealand had 
decided to request a panel in this dispute.  Aust ralia appreciated the importance New Zealand attached 
to this issue.  However, Australia considered that  bilateral channels were the most effective way to 
deal with such concerns.  Australia remained ope n to further consultations with New Zealand on the 
matters it had raised.  The measures contained in th e Final Import Risk Analysis Report for Apples 
from New Zealand were science based and fully c onsistent with Australia's WTO obligations.  
Australia was not, therefore, able to agree to th e establishment of a panel at the present meeting.  
54. The DSB took note  of the statements and agreed  to revert to this matter. 
6. Brazil – Measures affecting imports of retreaded tyres 
(a) Report of the Appellate Body (WT/DS332/AB /R) and Report of the Panel (WT/DS332/R) 
55. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS332/11 transmitting the Appellate Bo dy Report on:  "Brazil – Measures Affecting 
Imports of Retreaded Tyres", which had been  circulated on 3 December 2007 in document 
WT/DS332/AB/R, in accordance with Article 17.5 of  the DSU.  He reminded delegations that the 
Appellate Body Report and the Panel Report pertaini ng to this case had been circulated as unrestricted 
documents.  He recalled that Article 17.14 of the DSU required that:  "An A ppellate Body report shall 
be adopted by the DSB and unconditionally accepte d by the parties to the dispute unless the DSB 
decides by consensus not to adopt the Appellate B ody report within 30 days following its circulation 
to Members.  This adoption procedure is without prejudice to the right of Members to express their views on an Appellate Body report".  WT/DSB/M/243 
Page 12  
 
  56. The representative of the European Communities
 said that the EC wished to thank the 
Appellate Body and its Secretariat for their work.  The EC welcomed the fact that the Appellate Body 
had reinforced the conclusion which the Panel had already reached, namely that Brazil's challenged 
measures were incompatible with WTO rules.  In so  doing, the Appellate Body had rectified a number 
of serious legal errors which the Panel had committe d.  Importantly, the Appellate Body had reversed 
the Panel's ill-conceived approach to what was an "unjustifiable discrimination" and a "disguised 
restriction on international trade" under the chapeau  of Article XX of the GATT 1994.  By rejecting 
the Panel's interpretation, the A ppellate Body had not only upheld a fundamental principle of the 
multilateral trading system, but ha d also rendered a ruling that served better the non-trade concerns 
for which Article XX existed.  As a result, it was now clear that Brazil's import ban on retreaded tyres 
was illegal, no matter how few casings or MERCOSUR re treads were actually imported.  It was also 
clear that Brazil's action over the course of last  summer, namely the introduction of quantitative 
import restrictions on retreaded tyres from other Mercosur countries, was not a way to bring about 
WTO-conformity. 
57. Equally beneficial was the Appellate Body's reve rsal of the Panel's mistaken interpretation of 
"arbitrary discrimination" as permitting any action in which governmental agencies did not act 
randomly or capriciously.  The Panel, once again, undermined a fundamental WTO principle by accepting a regional trade agreement, and a judicial decision flowing from it, as valid reasons under the chapeau of Article XX to discriminate against other WTO Members.  At the same time, the EC 
was strongly disappointed that the Appellate Body had not reversed the Panel's conclusion under 
Article XX(b) of the GATT 1994.  In the EC's view, the Panel was mistaken in concluding that 
Brazil's measures contributed to health protection an d that no alternative was reasonably available.  
Brazil bore the burden of proof for these questions, a nd the evidence submitted to the Panel had left it 
entirely unclear whether the import ban on retreaded tyres at all contributed to the reduction of tyre waste in Brazil.  There also existed more effectiv e alternatives for that purpose, including measures to 
avoid tyre waste, and measures to improve the management of waste tyres.  For these reasons, the EC 
considered that when all factors were properly we ighed and balanced, as required by the case law of 
the Appellate Body, and taking into account at best  marginal contribution of the ban, the measure 
could not be regarded as necessary. 
58. The EC, of course, knew that an appeal was limi ted to legal errors and, therefore, could not 
correct all the mistakes of the Panel in the establishm ent of facts.  Yet, it seemed to the EC that the 
Panel had violated the legal obligation of making an objective assessment of the facts in this case.  It 
seemed important to the EC that this legal standard  be upheld by the Appella te Body in cases like this 
one.  It was not good for the dispute settlement system  if panels received the message that they could 
assess the evidence whatever way they wanted, and e ffectively disregard important pieces of evidence 
as long as they listed some of them in footnotes.  Similarly, it did not seem right to the EC that panels should be able to rely decisively on contested ev idence of doubtful credibility or not relevant to the 
specific case, with no explanation being provided by the panel.  In the EC's view, the Panel should 
have rejected Brazil's defence under Article XX(b), b ased on the real facts of this case, bearing in 
mind Brazil's burden of proof.  The EC considered weak and flawed the Panel's factual conclusions, 
which the Panel had reached without recourse to  experts on the technical questions involved. 
59. The Panel's legal interpretation of Article XX( b) also contained disturbing aspects which the 
Appellate Body should have reversed.  Yet, wh ile formally upholding the Panel's findings, the 
Appellate Body in reality had modified the Pa nel's unconvincing reasoning quite significantly.  
Notably, the EC noted with satisfaction the Appe llate Body's clarification that a marginal or 
insignificant contribution was not sufficient under Artic le XX(b), and that a "genuine relationship of 
ends and means" was required.  In the case at hand, however, the Appellate Body's and the Panel's findings on Article XX(b) created the wrong and de trimental impression that retreaded tyres were 
somehow an inferior product, which generated ad ditional and problematic waste in an importing 
country.  The EC would stress that retreading was a ve ry beneficial form of recycling that resulted in  WT/DSB/M/243 
 Page 13 
 
 
  high-quality products and reduced the quantity of fo ssil fuel expended in the production of tyres as 
well as the quantity of end-of-life tyres that were bu rnt.  The EC would also recall the existence of 
international standards for the production of retread ed tyres elaborated by the UNECE which ensured 
the safety of, and aimed to facilitate  trade in, retreaded tyres.  In this connection, the EC would voice 
its protest against Brazil's repeated allegations, be fore the Panel and the Appellate Body as well as in 
public fora, that the EC intended to export its w aste to Brazil.  The EC managed, recycled and 
recovered waste tyres without relying on exportatio n.  Moreover, like the overwhelming majority of 
WTO Members, the EC did not ban the importation of retreaded tyres.  On the contrary, the EC even 
imported retreaded tyres from other countries, including Brazil. 
60. The EC was known to be strongly in favour of environmental and public health protection.  
The EC had appealed this Panel Report to defend no t only its trade interests, but also the general 
interest that WTO rules be applied so as to ensure real and effective protection of public health and 
the environment, rather than allowing protectionism.  The interventions by most third parties in this 
dispute were evidence of this systemic aspect.  The Appellate Body Report in this dispute had partly 
served these interests, and the EC accordingly welc omed the fact that the DSB would adopt this 
Report at the present meeting.  
61. As regards the next steps which Brazil woul d undertake after the adoption at the present 
meeting, the EC expected Brazil to lift the import ban on retreaded tyres.  This was the fastest and 
best way to do away with the current discriminati on, the continuation of which the Appellate Body's 
ruling did not permit.  This would also ensure that Brazil respected its Mercosur obligations, 
confirmed by binding arbitral rulings.  In these di spute settlement proceedings, Brazil had strongly 
insisted that it absolute ly needed to comply with  these obligations.  There was no reason for Brazil to 
now change course, belied its own words and work  in the direction of completely stopping the 
importation of Mercosur retreads.  The Appellate Body's ruling certainly did not require any such 
thing. Brazil should also consider that this cour se would destroy worthy industries engaged in the 
retreading of tyres in Brazil and other Mercosur c ountries, and would further reduce the overall rate of 
retreading in the world. The EC had no objections whatsoever, if Brazil intended to do more for the 
protection of its citizens against diseases spread by mosquitoes that breed in abandoned waste tyres.  
For that purpose, however, there were measures av ailable that would actually make a difference, 
contrary to the selective targeting of  certain imported products that contri buted marginally, if at all, to 
the problem. 
62. The representative of Brazil  said that his country had received the Appellate Body Report 
concerning the dispute initiated by the EC with rega rd Brazil's measure that banned the importation of 
retreaded tyres, which was proposed for adoption at  the present meeting.  Without prejudice to the 
complete and detailed analysis of the Appellate B ody Report, which had already been initiated by the 
relevant authorities in Brazil, his delegation wished  to offer some preliminary comments on the main 
aspects of the Report.  The appeal proceedings, which had been initiated by the EC on 
3 September 2007, had been concluded with the conf irmation of the main findings of the Panel with 
respect to the environmental and public health polic ies maintained by Brazil.  In particular, the 
Appellate Body had upheld the findings of the Pane l that reckoned the import ban of retreaded tyres 
as a necessary measure to protect human health and the environment in Brazil and qualified the import ban as a key element in the comprehensiv e strategy designed and implemented by Brazil to 
deal with waste tyres.  The Appellate Body had up held the conclusion of the Panel that, by reducing 
the generation of waste tyres, Brazil's measure contri buted to combating the risk s that flew from their 
accumulation, transportation and disposal, whic h included mosquito-borne diseases and health 
problems that take place, among other causes, through the contamination of the environment. 
63. His delegation also wished to offer just a quick  word on the benefits of retreading.  Brazil 
certainly agreed that retreading tyres was a positiv e practice from the environmental perspective for a 
country in the sense of waste management.  But as the Panel and the Appellate Body had recognized, WT/DSB/M/243 
Page 14  
 
  it was only a good and sound environmental practice if it was done from domestically found casings 
or waste tyres.  Now, importing retreaded tyres was not equal to importing waste.  However, importing retreaded tyres increased the rate at whic h the waste was generated.  This was Brazil's 
concern with retreaded tyres and this concer n had been recognized by the Panel and the 
Appellate Body.   
64. The Appellate Body had also confirmed the Pa nel's understanding con cerning the imports of 
used tyres made possible through preliminary injunctions obtained from the Judiciary Branch, to be 
used as raw material for the national retreading in dustry.  According to the Appellate Body, these 
imports constituted discrimination inconsistent with the multilateral rules.  Concerning the imports 
from Mercosur, Brazil regretted, however, that the Appellate Body had reversed the Panel's findings 
concerning the imports of retreaded tyres from Merc osur which occurred as a result of an arbitral 
decision adopted inside the block.  As his dele gation had previously mentioned, the relevant 
authorities in Brasilia were carefully examining th e findings and conclusions of the Panel and the 
Appellate Body and Brazil would inform the DSB of its  intentions in respect of implementation of the 
recommendations and rulings of the DSB, in accordan ce with Article 21.3 of the DSU.  Finally, his 
delegation thanked the Appe llate Body and the Secretariat for their hard work and dedication to this 
case. 
65. The representative of the United States
 said that his country agreed with other Members who 
had spoken previously that the protection of hum an health and the environment was a matter of 
utmost importance.  In that regard, the United Stat es very much appreciated that the Panel and the 
Appellate Body Reports in this di spute had shown an understanding of the need to carefully evaluate 
these complex issues in the context of a trade dis pute.  The United States wished to make a few 
comments concerning the approach that the Appellate Body had taken to certain of the legal issues 
that arose in this dispute.  The United States in pa rticular welcomed the Appellate Body's finding that 
the volume of tyres imported under the Mercosur exemption to the retreaded tyre ban was not 
dispositive of whether the ban was being applied in a manner that constituted arbitrary or unjustifiable 
discrimination or a disguised restriction on intern ational trade.  The United States welcomed the 
Appellate Body's reversal of the Panel's analysis of the Mercosur exemption.  
66. On reflection, however, the United States would like to express its reservations about certain 
aspects of the Appellate Body's Report.  First, th e United States wished to express its concern that 
certain parts of the Report could be read to suggest that Members must rank various measures 
according to their relative degree of "trade-restric tiveness" (see, for example, paragraph 179 of the 
Report).  As the United States had stated on previ ous occasions, it did not see any textual support for a 
construction of the word "necessary" in GATT Article XX( b) that would give rise to such an analysis.  
There was nothing in the ordinary meaning of "necessar y" that would support a "trade restrictiveness" 
analysis.  Nothing in Article XX(b) used the term "trade" or "restrictive".  
67. At the same time, the analysis used in these parts of the Report was remarkably similar to that 
called for under Article 5.6, including footnote 3, of the SPS Agreement.  As a result, these parts of 
the Report could be misunderstood as incorporating into Article XX(b) a "least trade restrictive" 
obligation similar to that specifically negotiated as part of the SPS Agreement.  The United States 
recalled that those SPS negotiations had been complic ated and sensitive.  Yet no such obligation had 
been negotiated or agreed to in the context of Artic le XX(b).  Indeed, it was difficult to see what role 
would be left for the language in the chapeau to  Article XX concerning "disguised restriction on 
trade" if "necessary" were to have the meaning ascribed to it in certain parts of the Report.  
The United States could not see how it was appropriate to read into Article XX(b) a requirement that did not appear there.  And the United States recalled that in its Report in the Gambling dispute (DS285), when considering the GATS provision that was similar to GATT Article XX, the 
Appellate Body had clarified that Members were not  required to "identify the universe of less trade-
restrictive alternative measures," and that the issu e was whether the complaining party had identified  WT/DSB/M/243 
 Page 15 
 
 
  a reasonably available WTO-consistent alternative.  The United States was also concerned with the 
references to "the importance of the interests or  the values underlying the objective pursued by" the 
measure (see, for example, paragraph 210 of the Re port).  These references could be misconstrued as 
suggesting that WTO Panels and the Appellate Bo dy were to rank by degree of importance the 
various policies pursued by Members and afforded Members greater ability to pursue some policies 
over others.  Nothing in Article XX  assigned this rather subjective function to the dispute settlement 
system. 
68. The United States had concerns about the Appellate  Body's application of the term "level of 
protection" in this Report.  The term "level of pr otection" was not found in the text of Article XX(b) 
of the GATT, but only in certain other WTO Agreem ents.  Accordingly, it appeared, at a minimum, 
confusing to use this term in the context of a re view under Article XX.  Adding to that confusion, 
the United States would not expect that the term shoul d be used differently in this context, when a 
panel was assessing whether a measure was necessary to protect human health, than it would be used 
in those contexts where the term was found in the text  of the agreement.  In this connection, however, 
the United States noted that the Appellate Body had accepted Brazil's description of its "level of 
protection" as the "reduction of the risks of waste tyre accumulation to the maximum extent" (see, for 
example, paragraph 144 of the Report).  That statem ent, however, appeared to confuse a chosen level 
of protection against risks to human health with the measure to be employed to address such risks.  In 
other words, the "risk" at issue was the risk to human life or heal th from malaria or other identified 
risks, and the level of protection should refer to  the level of protection from such risks.  The 
references to the reduction of waste tyres appeared to shift the focus to ho w to reduce waste tyres 
rather than how to reduce malaria or other risks, and thus might become circular.  That was, the 
analysis verged on becoming:  "If a measure reduc es waste tyres then it is 'necessary' because the 
measure helps reduce waste tyres." Finally, some of these difficulties might be du e to the approach of 
treating the import ban and the Mercosur exemption sep arately.  As the United States had explained in 
its submissions to the Appellate Body, it remained  unclear to the United States how the import ban 
and the Mercosur exemption could be analyzed separatel y in this dispute when they appeared to be all 
part of the same measure. 
69. The representative of Australia  said that her country joined the parties in thanking the Panel, 
the Appellate Body and the Secretariat for their wo rk on this important case.  Australia welcomed the 
Appellate Body Report in this dispute, which it c onsidered, provided helpful clarification of the 
factors that needed to be taken into account by a WTO Member in relation to a defence invoked under 
Article XX of the GATT.  As a third party to the dispute, Australia had stated before the 
Appellate Body that the Panel had committed a number of legal errors in its approach to the chapeau 
of Article XX.  Australia welcomed the Appellate Body's findings that the Panel's reasoning on the 
chapeau be reversed. 
70. The DSB took note  of the statements, and adopted  the Appellate Body Report contained in 
WT/DS332/AB/R and the Panel Report contained in WT/DS332/R, as modified by the Appellate 
Body Report. 
7. Japan – Countervailing duties on dyna mic random access me mories from Korea 
(a) Report of the Appellate Body (WT/DS336/AB /R & Corr.1) and Report of the Panel 
(WT/DS336/R) 
71. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS336/11 transmitting the Appellate Bo dy Report on:  "Japan – Countervailing Duties 
on Dynamic Random Access Memories from Korea", which had been circulated on 28 November 2007 in document WT/DS336/AB/R, in acco rdance with Article 17.5 of the DSU.  He 
reminded delegations that the Appellate Body Repor t and the Panel Report pertaining to this case had WT/DSB/M/243 
Page 16  
 
  been circulated as unrestricted documents.  He reca lled that Article 17.14 of the DSU required that:  
"An Appellate Body report shall be adopted by the DSB and uncond itionally accepted by the parties 
to the dispute unless the DSB decide s by consensus not to adopt the Appellate Body report within 
30 days following its circulation to Members.  Th is adoption procedure is without prejudice to the 
right of Members to express their views on an Appellate Body report".  
72. The representative of Korea
 said that his country had carefully  studied the final Reports of the 
Panel and the Appellate Body in this dispute concerning Korea's challenge to Japan's measures 
imposing countervailing duties on imports of dyna mic random access memories (or "DRAMs") from 
Korea, which was now being considered by the Di spute Settlement Body.  In Korea's view, adoption 
of the Report by the Panel, as modified by the Appellate Body, would eliminate any basis for the 
continuation of countervailing duties on DRAMs exported by Hynix Semiconductor.  Japan's 
imposition of countervailing measures had been based  on findings that the Government of Korea 
provided subsidies to Hynix by "entrusting or directin g" private financial institutions to enter into debt 
restructuring transactions in October 2001 a nd December 2002.  However, the Panel and 
Appellate Body had found that neither of th ose restructurings justified the imposition of 
countervailing duties. 
73. In particular, the Panel and Appellate Body ha d found that Japan's imposition of duties based 
on the October 2001 restructuring was inconsistent w ith the requirements of Article 19.4 of the SCM 
Agreement where Japan's calculation of the subs idy benefit was based on the assumption that the 
benefits had lasted only five years, and thus had expired in 2005.  Furthermore, the Panel and the 
Appellate Body had also found that Japan's findi ng of a benefit from the December 2002 restructuring 
was contrary to Articles 1.1(b) and 14 of the SCM Agreement.  As a result of these findings, neither 
the October 2001 restructuring nor the December 2002 restructuring could have provided a basis for the imposition of countervailing duties in Japan's 2006 final determination. 
74. Korea noted that the implementation of these ru lings by the Panel and the Appellate Body 
should not require any action beyond the Ministerial step of publishing a notice rescinding the 
countervailing measures that Japan had improperly im posed.  Korea, therefore, called upon Japan to 
immediately rescind those countervailing measures, a nd to inform the DSB that those measures had 
been rescinded at the next meeting of the DSB, in accordance with the first sentence of Article 21.3 of 
the DSU.  There were a number of aspects of the de cisions by the Panel and the Appellate Body with 
which Korea did not agree.  Korea reserved its right s to raise these issues at a subsequent time, should 
they arise in future disputes or negotiations.  It should be noted, howe ver, that a different ruling by the 
Panel and the Appellate Body on those issues would not  have altered the basic requirement that Japan 
immediately rescind its countervailing measures.  In the interests of brevity, Korea would, therefore, leave its comments on those issues to another day.   Korea looked forward to the adoption of the 
reports by the DSB.   
75. The representative of Japan
 said that, at the outset, his country  wished to express its gratitude 
to the Appellate Body, the Panel, and their respectiv e Secretariats for their time and efforts devoted in 
this case and their Reports.  At the present meetin g, his delegation wished to make some brief 
comments on the Reports.  On several issues which Japa n had raised in its appe al, the Appellate Body 
had taken up Japan's views and had reversed the Pa nel's findings.  In particular, the Appellate Body 
had ruled that the Panel had erred in failing to appl y the proper standard of review in its examination 
of Japan's determination of entrustment or dir ection by Korea with regard to the December 2002 
Restructuring.  The Panel and the Appellate Body ha d also rejected or declined to rule on various 
claims raised by Korea in this dispute, such as those concerning Japan's Investigating Authorities' 
determination of benefit with respect to the Oct ober 2001 Restructuring and the causation of injury.  
To that extent, it was clear that Japan's  measure had proved to be appropriate.  WT/DSB/M/243 
 Page 17 
 
 
  76. Japan was appreciative of the Appellate Body's Re port to the extent referred to above.  Japan, 
however, was disappointed by the findings and conc lusions of the Appellate Body on some other 
points.  These included the upholding by the Appellate Body of the Panel's findings on the issues of Japan's Investigating Authorities' benefit dete rmination and imposition of  countervailing duties, 
including the issues of:  (i) commercial reasonablen ess of the Four Creditors' participation in the 
December 2002 Restructuring in the context of benef it determination;  (ii), calculation of the amount 
of benefit in terms of debt-to-equity swap;  and (iii) allocation of benefit and the timing of duty 
imposition regarding the October 2001 Restructuring.  Japan regretted that the Appellate Body had 
not set out sufficient legal reasoning or thorough an alysis in addressing various arguments that Japan 
had advanced during the proceedings.  Although Japan was not entirely satisfied with the findings and 
conclusions of the Appellate Body  Report, it would carefully review the findings and conclusions in 
these reports and would examine a course of action Jap an might need to take, in accordance with the 
dispute settlement procedures. 
77. The representative of the European Communities
 said that the EC wished to thank the Panel 
members, the Appellate Body members and the resp ective Secretariats for their work and welcomed 
particularly certain findings.  First, the EC fully agreed that the chapeau of Article 14 of the SCM 
Agreement did not require that the national legisl ation or implementing regulations set out every 
detail of the method for the calculation of the bene fit, such as calculation formulas.  Investigating 
authorities needed a certain degree of flexibility to adap t to the particular factual situation.  As rightly 
found by the Appellate Body, the fact that the method used in a particular case could be derived from 
the national legislation or implem enting regulations was sufficient to ensure that other WTO Members 
and interested parties were aware of the met hod that would be used and preserved the needed 
flexibility. 
78. The EC also welcomed the Panel's and the Appella te Body's findings that "interested parties" 
might also be interpreted from the perspective of the investigating authority.  The right to include in 
"interested parties" entities that were relevant for carrying out an objective investigation and not just 
those having an interest in the outcome of the investigation was absolute ly instrumental for the 
capacity of Investigating Authorities to conduct an ob jective and impartial investigation.  Finally, the 
EC expressed its special thanks to the Appellate Body for accepting to seize itself of the issue of the right balance between the protection of Business Confidential Information and the right of third parties and WTO Members.  The deletion of substa ntial parts on the ground of confidentiality had 
made the public Panel Report unintelligible.  As a result, the EC had been prevented from making any 
meaningful submissions to the Appellate Body on im portant issues.  The EC, therefore, particularly 
welcomed the Appellate Body's position that the Pa nel must ensure that the public version of its 
Report, while protecting confidential in formation, remained understandable. 
79. The DSB took note
 of the statements, and adopted  the Appellate Body Report contained in 
WT/DS336/AB/R & Corr. 1 and the Panel Report contained in WT/DS336/R, as modified by the 
Appellate Body Report. 
__________