. /.  WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/DSB/M/309 
2 March 2012 
 (12-1163) 
Dispute Settlement Body 
22 December 2011  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard 
on 22 December 2011 
 
Acting Chairperson:  Mr. Mario Matus (Chile) 
 
  Prior to the adoption of the Agenda, Amb. Ma rio Matus, the Chairman of the Trade Policy 
Review Body, welcomed delegations and said that he  had been asked to chair the present meeting in 
the absence of Amb. Elin Østebø Johansen, the Chairp erson of the DSB.  He noted that this was in 
accordance with the Rules of Proce dure for meetings of the Dispute Settlement Body which provided 
that if the DSB Chairperson was absent from any m eeting or part thereof, the Chairperson of the 
General Council, or in the latter's absence the Ch airperson of the Trade Policy Review Body shall 
perform the functions of the DSB Chairperson. 
 
 
1. European Communities and certain member States – Measures affecting trade in large 
civil aircraft 
(a) Recourse to Article 7.9 of the SCM Ag reement and Article 22.2 of the DSU by the 
United States (WT/DS316/18) 
 1. The Chairperson drew attention to the comm unication from the United States contained in 
document WT/DS316/18, and invited the represen tative of the United States to speak. 
2. The representative of the United States said that  on 1 June 2011, the DSB had adopted its 
recommendations and rulings in this dispute.  The DSB had recommended that the Member granting 
each subsidy found to have resulted in adverse ef fects bring the subsidy into compliance with its 
obligations under the SCM Agreemen t.  Under Article 7.9 of the SCM Agreement, the EU and certain 
member States had six months to withdraw the subs idies or take appropriate steps to remove the 
adverse effects of the subsidies.  That six-mont h period had ended on 1 December 2011.  The EU and 
the four member States at issue had not removed the adverse effects or withdrawn the subsidies within 
that period.  In the absence of any agreement on compensation, the United States had requested 
authorization to take countermeasures at an annual level commensurate with the degree and nature of 
the adverse effects determined to exist, pursu ant to Article 7.9 of the SCM Agreement and 
Article 22.2 of the DSU.  This am ount corresponded to the annual value of  lost sales, of exports of US 
large civil aircraft displaced from the EU market, an d of exports of US large civil aircraft displaced 
from third country markets.  The United States had take n this step in light of Article 22.6 of the DSU, 
which provided for the negative consensus rule to a pply within 30 days of the end of the period for 
compliance.  If the EU were not to object to the US request, the DSB would approve the US request 
for authorization at the present meeting unless the DSB decided by consensus to reject the request.  If 
the EU objected, the matter would automa tically be referred to arbitration. 
 WT/DSB/M/309 
Page 2  
 
  3. On 9 December 2011, in order to facilitate a reso lution of this dispute, the United States had 
also requested consultations with the EU and the memb er States at issue with regard to this matter.  
The EU had accepted the US request, and consultations  were scheduled for early January 2012.  The 
United States said that it was looking forward to tho se consultations.  As mentioned at the previous 
DSB meeting, the United States remained prepared to  engage in any meaningful efforts that would 
lead to the goal of ending subsidized financing of la rge civil aircraft at the earliest possible date.  The 
United States hoped to find willing partners at  the consultations and beyond.  Finally, the 
United States noted that it was currently work ing with the EU on a sequencing agreement for 
procedures under Articles 21 and 22 of the DSU for th e purposes of this dispute.  Any such agreement 
would be notified to the DSB.  
4. The representative of the European Union said th at the EU noted that the United States had 
stated that it considered that the EU had faile d to comply with the DSB's recommendations and 
rulings in this dispute, and that it had requested th e DSB's authorization to suspend the application of 
concessions or other obligations under the WTO covered agreements to the EU, pursuant to 
Article 7.9 of the SCM Agreement and Article 22.2 of the DSU.  At the present meeting, the EU was 
formally objecting to the US proposal.  In particul ar, the EU objected to the level of suspension of 
concessions or other obligations contained in the US request, and claimed that the principles and 
procedures set forth in Article 22.3 of the DSU ha d not been followed and that the proposal was not 
allowed under the covered agreements.  The EU was requesting that the matter be referred to 
arbitration pursuant to Article 22.6 of the DSU, recalling that, according to this provision, concessions 
or other obligations shall not be suspended during the course of the arbitration.  The EU and the 
United States were informally discussing the issue of  sequencing, and the EU expected an agreement 
to be concluded shortly. 
5. The representative of the United States said that his country took note of the EU's objection in 
its statement pursuant to Article 22.6 of the DSU and that Members would be aware of the different 
views of the parties on this issue.  In the US view, under the terms of the DSU, the EU's objection 
automatically resulted in the matter being referred to arbitration.  Article 22.6 of the DSU did not refer 
to any decision by the DSB in this regard.  Thus , there was no need at th e present meeting for the 
DSB to take any further action or decision for this ma tter to be referred to arb itration.  Nevertheless, 
the United States had no objection if the DSB wished to  take note of the fact that this issue had been 
raised and confirmed that it may not consider the US  request for authorization, which was the item on 
the Agenda of the present meeting, since the matter was being referred to arbitration.  The 
United States noted that it would have been prefer able had the EU objection been filed before the 
present meeting.  The United States would then have been willing to withdraw its request in light of 
the referral of the matter to arbitration, and this  meeting would have been cancelled.  This was the 
procedure that had been followed by Japan and the United States in the "US - Zeroing" (DS322) 
dispute.  Nonetheless, in light of the EU's obj ection at the present meeting, the United States 
recognized that the DSB could not take action on the US request for authorization to take 
countermeasures. 
6. The representative of the European Union said th at Members were aware that the EU and the 
United States did not agree on the interpretation of Ar ticle 22.6 of the DSU.  The EU considered that 
this was a matter for the DSB.  The agreed form  of wording was designed to allow the process to 
move forward without prejudice to the views of eith er party on the correct interpretation of the DSU. 
7. The DSB took note of the statements, and it was ag reed that the matter raised by the European 
Union in its statement is referred to arbitration, as required by Article 22.6 of the DSU.  
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