. /.  RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/264 
27 March 2009 
 (09-1513) 
Dispute Settlement Body 
11 February 2009  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 11 February 2009  
 
Chairman:  Mr. Mario Matus (Chile) 
 
 
1. China – Measures affecting imports of automobile parts 
(a) Implementation of the recommendations of the DSB 
1. The Chairman  recalled that in accordance with the DSU provisions, the DSB was required to 
keep under surveillance the implementation of reco mmendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of 
the DSU provided that the Member concerned shall in form the DSB, within 30 days after the date of 
adoption of the panel or Appellate Body report, of its intentions in respect of implementation of the 
recommendations and rulings of the DSB.  He reca lled that, at the 12 January 2009 DSB meeting, in 
relation to the disputes on:  "China – Measures Affe cting Imports of Automobile Parts", the DSB had 
adopted the Appellate Body Report and the Panel Re port, as upheld by the Appellate Body Report, 
pertaining to the complaint by the European Comm unities.  The DSB had also adopted the Appellate 
Body Report and the Panel Report, as modified by the Appellate Body Report, pertaining to the 
complaint by the United States, as well as the Ap pellate Body Report and the Panel Report, as 
modified by the Appellate Body Report, pertaining to  the complaint by Canada.  He then invited the 
representative of China to inform the DSB of its intentions in respect of implementation of the 
recommendations. 
2. The representative of China  recalled that, on 12 January 2009, the DSB had adopted the 
Appellate Body Reports and the Pa nel Reports as upheld and modified by the Appellate Body Reports 
pertaining to the disputes on "China – Measures A ffecting Imports of Automobile Parts" (DS339; 
DS340; DS342).  According to Article 21.3 of the DSU, China was now informing the DSB that it intended to implement the DSB's recommendations a nd rulings in a manner that respected China's 
WTO obligations, and had begun to evaluate optio ns for doing so.  Since it was impracticable to 
immediately comply with the DSB's recommendations, China would need a reasonable period of time 
in which to implement.  China stood ready to co nsult with the EC, the United States and Canada 
regarding a reasonable period of time in accordance with Article 21.3(b) of the DSU. 
3. The representative of Canada
 said that her country welcomed the statement made by China 
that China intended to comply with the DSB's r ecommendations and rulings.  Canada was, however, 
concerned about China's statement made at the 12 January 2009 DSB meeting that China did not 
consider the Panel's alternative findings on Ar ticle II of the GATT 1994 to be part of the 
recommendations adopted by the DSB.  The Panel had found that China's measur es, even if they were 
applied and administered as ordinary customs duties,  would be inconsistent with Article II of the 
GATT 1994.  Yet China now asserted that those findings were not part of what the DSB had adopted WT/DSB/M/264 
Page 2  
 
  on 12 January 2009.  In attempting to explain its position at that meeting, China had stated, in 
essence, that because the adoption of a panel report under Article 16 of the DS U was contingent on a 
party's right to seek appellate review, the Panel's Article II findings could not be considered adopted 
because the Appellate Body had declined to exam ine them.  China's position improperly conflated the 
right of a party to seek review of a panel's findings  with the status of those findings when the DSB 
adopted the Appellate Body report.  Notably, in th is case, the Appellate Body had not modified the 
Panel's findings that China's measures would be in consistent with Article II of the GATT 1994.  On 
the contrary, the Appellate Body ha d explicitly rejected China's request to declare those findings 
"moot and of no legal effect".  By asserting, unilatera lly, that despite this rejection, it might disregard 
those findings, China seemed to be calling into ques tion the good faith of the request it had made to 
the Appellate Body.  In any even t, in accordance with Article 19.1 of the DSU and paragraph 254 of 
the Appellate Body's Report, it was now China's oblig ation to bring its measures into conformity with 
the GATT 1994.  Canada urged China to do so wit hout delay, and was ready to discuss with China 
what would constitute a reasonable period of time for China to comply with its GATT obligations. 
4. The representative of the United States
 said that his delegation wished to thank China for its 
statement made at the present meeting, indica ting that it intended to implement the DSB's 
recommendations and rulings in this dispute.  As noted at the 12 January 2009 DSB meeting, China's 
measures imposed a discriminatory tax and additional  administrative burdens on the use of imported 
auto parts.  Those were the sole functions of the measures.  Thus, to eliminate the WTO-inconsistent 
discrimination, China may simply remove those me asures.  Accordingly, the United States expected 
the implementation process to be relatively straight forward.  The United States stood ready to discuss 
with China a reasonable period of time for its implementation, under Article 21.3(b) of the DSU. 
5. The representative of the European Communities  said that the EC welcomed China's 
statement regarding its intentions to comply with the DSB's findings, and urged China to do so in the 
shortest possible period of time.  The EC's car industry was already facing the challenges of global recession, and should not continue to be penalized by China's discriminatory measures.  The EC 
wished to revert to a point made by China at the 12 January 2009 DSB meeting with regard to the 
Panel's alternative findings on Article II of the GATT 1994.  While indeed the Appellate Body had 
not reviewed those findings, it had considered th e proper interpretation of Article II of the GATT 
1994 in the context of its findings on the threshold issue, and had addressed the issue of HS General 
Interpretative Rule 2(a), inter alia , in paragraphs 164 and 165 of its Re port.  The EC considered those 
Appellate Body's findings to be also relevant  in guiding China's efforts towards effective 
implementation.  The EC remained available to di scuss with China the issue of the reasonable period 
of time. 
6. The representative of Brazil
 said that his country had participated as a third party to this 
dispute.  Brazil noted and appreciated China's stat ement that China intended to implement the DSB's 
recommendations and rulings.  Brazil looked forwar d to seeing this dispute settled as soon as possible. 
7. The representative of China  said that his delegation wished to briefly respond to the 
statements made by Canada and the EC.  China had no intention to reopen the debate on the issue of 
the scope of the DSB's recommendations.  As China had stated at the 12 January 2009 DSB meeting, 
without an effective recommendation from the Appe llate Body on the alternative findings of the 
Panel, China would have difficulty in unders tanding how the Panel's recommendation on the 
alternative findings issue could be part the DSB's recommendations.  China took note of the 
statements made by Canada and the EC and reserved its right to make further responses in that regard. 
8. The DSB took note  of the statements, and of the inform ation provided by China regarding its 
intentions in respect of implementation of the DSB's recommendations. 
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