RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/215 
25 July 2006 
 (06-3539) 
Dispute Settlement Body 
19 June 2006  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 19 June 2006  
 
Chairman:  Mr.  Muhamad Noor Yacob (Malaysia) 
 
 Subjects discussed
: Page  
 
1. Surveillance of implementation of recommendations adopted by the DSB.........................2  
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States .............................................................................................................. ...........2  
(b) United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by  the United States...................................................................................5  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States .................................................................................................................. .............5  
(d) European Communities – Export subsidies on sugar:  Status report by the 
European Communities........................................................................................................... ....6 
(e) European Communities – Customs classifi cation of frozen boneless chicken cuts:  
Status report by the Eu ropean Communities.............................................................................10  
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 .................................................................................................................... ..........12
 
(a) Statements by Honduras, Ni caragua and Panama.....................................................................12  
3. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ..........................................14  
(a) Statements by Canada, the European Communities and Japan.................................................14  
4. United States – Countervailing measures concerning certain products from the 
European Communities..........................................................................................................1 7 
(a) Statement by the Eur opean Communities.................................................................................17  
5. Japan – Countervailing duties on dynami c random access memories from Korea..........19  
(a) Request for the establishment of a panel by Korea...................................................................19  
6. United States – Anti-dumping measure on shrimp from Ecuador.....................................20  
(a) Request for the establishment of a panel by Ecuador ...............................................................20  WT/DSB/M/215 
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 7.
 European Communities – Export subsidies on sugar..........................................................21  
(a) Joint request by Australia a nd the European Communities ......................................................21  
(b) Joint request by Brazil and the European Communities ...........................................................21  
(c) Joint request by Thailand and the European Communities.......................................................21  
8. Proposed nomination for the indicative list of governmental and 
non-governmental panellists ..................................................................................................23  
 
 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.43) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.43) 
 
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.18) 
 (d) European Communities – Export subsidies on sugar:  Status report by the European 
Communities (WT/DS265/35/Add.1 – WT/D S266/35/Add.1 – WT/DS283/16/Add.1) 
 
(e) European Communities – Customs classifica tion of frozen boneless chicken cuts:  Status 
report by the European Communities (WT/DS269/15 – WT/DS286/17) 
 1. The Chairman
 recalled that Article 21.6 of the DSU required that "unless the DSB decides 
otherwise, the issue of implementation of the re commendations or rulings shall be placed on the 
agenda of the DSB meeting after six months follo wing the date of establishment of the reasonable 
period of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue is 
resolved".  He then 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/DS176/11/Add.43) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.43, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US Section 211 Omni bus Appropriations Act of 1998. 
3. The representative of the United States  said that his country had provided a status report in 
this dispute on 8 June 2006, in accordance with Artic le 21.6 of the DSU.  As noted in the report, 
several legislative proposals relating to S ection 211 that would implement the DSB's 
recommendations and rulings in this dispute had been  introduced in the current US Congress, both 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. 
4. The representative of th e European Communities  said that, once again, the United States 
could not report on any progress in the implementa tion of the DSB's ruling and recommendations in 
the case under consideration.  He noted that the sa me would be true in respect of item 1(c) on the 
agenda of the present meeting, namely, the implem entation – or rather non-implementation – of the 
DSB's ruling and recommendations in the Section 110 dispute.  The EC fully shared the US objective  WT/DSB/M/215 
 Page 3 
 
 
  to ensure and promote effective and non-discrimin atory protection of intellectual property rights 
worldwide.  The TRIPS Agreement was a keystone  in the achievement of that objective.  The 
United States, by its persistent ignorance of ot her Members' rights under the TRIPS Agreement, 
risked undermining the authority of that Agreement and compromised the interests of its industry at 
large to preserve legislation that benefited the limited interests of a very few companies.  Yet, 
repealing bills were pending in the US Congress.  Their adoption would bring a satisfactory solution 
to this dispute. As had been seen recently, th e US Congress was perfectly able to work towards 
compliance, when it so wished. 
5. The representative of Cuba  said that Members had heard yet again the usual status report that 
the United States had been repeating for more th an four years, which offered no evidence of 
compliance with the DSB's rulings and recommendati ons in the case at hand.  This situation was 
extremely worrying for Cuba, and other Members s hould also be concerned about it.  A serious 
precedent was being set for the dispute settlement m echanism, which was regarded as an achievement 
of the multilateral trading system and a guarantee for small and underdeveloped countries to defend 
their trade interests on an equal footing with major trading powers.  The fact that one of the most 
powerful Members of this organization continued to  violate rules constituted evidence that there was 
no guarantee that Members would comply with th e WTO Agreements nor was there an efficient 
mechanism for settling disputes.  This was to the de triment of the primary objective of WTO dispute 
settlement proceedings, namely, to find an effectiv e solution to every case.  One ought to review the 
provisions of  Article 3.2 of the DSU which stated that:  "The dispute settlement system of the WTO 
is a central element in providing security and predic tability to the multilateral trading system."  The 
question therefore was what was the guarantee that the United States would implement the 
recommendations if after four years it had not done so? 
6. It was obvious that this case, as well as othe r similar cases brought before the DSB, had 
increasingly undermined the credibility of the dispute settlement mechanism and the efficiency of the 
multilateral trading system, and had done so at a crucial juncture in the negotiating process launched 
at Doha.  Only one month remained before the expi ry of the legitimate right of a Cuban company to 
renew the registration of the Havana Club trademark at  the US patent office.  To remove the right to 
this internationally known trademark was the purpose of Section 211.  This was also a reason for the 
US delay to implement the DSB's recommendations in this case.  If the United States finally repealed 
Section 211 after July 2006, this would amount to a fait accompli.  The United States would have achieved what it had set out to do, namely, to a llow arbitrary appropriation of this trademark by 
Bacardi. This would again highlight the serious flaws of the system based on rules that had been far 
from just and fair, and which favoured the most pow erful Members.  These Members could afford to 
ignore the rules, and they would even join with the complaining party in order to avoid retaliatory measures.  The case in point was the Understanding of July 2005 reached between the United States 
and the EC, the results of which caused injury and impairment to Cuba's rights.  Cuba, once again, 
appealed to the competent US authorities to co mply at once and unconditionally, with the WTO's 
rulings and recommendations in this case, in the only way possible;  i.e. by repealing the arbitrary and 
discriminatory provisions of Section 211. 
7. The representative of China
 said that his country wished to express its continued concern 
regarding this dispute due to systemic interest.  He recalled that, on 2 February 2002,  the DSB had 
adopted both the Panel and the Appellate Body Report s pertaining to this case.  Since then, more than 
four years had passed.  China appreciated the efforts made by the United States during these four 
years aimed at implementing the DSB's rulings, but unfortunately there was no indication when the matter would be resolved to the satisfaction of the parties to the dispute and other Members.  China 
believed that prompt and full implementation of the DSB's rulings and recommendations was one of 
the major cornerstones of the WTO dispute settle ment system.  In the meantime, the prompt 
implementation in this dispute was not only bene ficial to other Members, but also to the 
United States, who was the advocate of intellectual prope rty rights in all forums.  Besides, such delays WT/DSB/M/215 
Page 4  
 
 caused systemic concerns about the efficacy of the dispute settlement system.  China believed that the 
WTO dispute settlement constituted an effective a nd efficient system for the resolution of trade 
disputes, and provided a degree of certainty and predic tability in international trade to all Members.  
Once again, China urged the United States to implem ent the decision of the DSB in this dispute as 
soon as possible. 
8. The representative of India
 said that his country continue d to have concerns that due 
consideration of the principle of prompt comp liance with the DSB's rulings and recommendations, 
essential to effective resolution of disputes to the be nefit of all Members, appeared missing in this 
dispute.  Although a solution mutually acceptable to th e parties was preferred, parties should keep the 
DSB informed of progress towards such resolution in  a meaningful manner.  However, this was not 
apparent from the statements made by the partie s at the present meeting, even four years after 
adoption of the rulings and recommendations in this dispute, thus ignoring the systemic concerns for 
WTO Members in general.  India would urge the parti es to this dispute to be more responsive to these 
systemic concerns and to shed some light on the wa y they intended to meet the objective of prompt 
settlement and the actions they proposed  to take to achieve that objective. 
9. The representative of Bolivia  said that her delegation also wi shed to express its views on the 
status of the Section 211 dispute, and after heari ng the report made at the present meeting, Bolivia 
wished to highlight some issues in this regard.  Undoubtedly, a failure to comply with the DSB's 
recommendations and rulings in any dispute undermined  the credibility and stability of the WTO legal 
system, which provided Members – developed, developing or least-developed – with rights and 
obligations.  In light of the ongoing negotiations ai med at addressing concerns of developing countries 
and at providing greater opportunities for them, at the time when everybody was expecting the proper 
functioning of the multilateral legal system, the continued delay in implementation of the DSB's 
ruling in this dispute, which had lasted for over fo ur years, was deplorable. It was also a matter of 
concern to her delegation that a failure to co mply with the DSB's recommendations and findings 
undermined the predictability of the TRIPS Agreem ent as a legal instrument, which protected the 
intellectual property rights of all WTO Members.  He r delegation wished to join Cuba in urging the 
United States to comply with the DSB's d ecision in this dispute as soon as possible. 
10. The representative of the Bolivarian Republic of Venezuela  said that her delegation wished to 
thank the United States for its report on implemen tation of recommendations adopted by the DSB in 
connection with Section 211 Omnibus Appropriati ons Act of 1998 and the report presented in 
June 2006.  As stated previously, her country w as very concerned about the lack of certainty 
regarding decisions adopted by the DSB.  This had systemic implications.  Her country wished to be 
fully associated with the statement made by C uba, and urged the United States to undertake all 
possible efforts in order to modify as soon as possible its legislation so as to be able to comply with 
the DSU provisions. 
11. The representative of Brazil  said that his country thanked the United States for its status 
report and the statement made at the present meeti ng.  Brazil regretted, however, the lack of any 
positive developments regarding the implementation of  the DSB's recommendations in this dispute.  
Compliance with the DSB's recommendations, together  with mutually agreed solutions, was the most 
faithful measure of the effectiveness of the dispute settlement system.  The fuller and faster a Member 
brought its measure into conformity with its oblig ations, the more effective and, consequently, the 
more credible the system would be.  Conversely, the complete absence of meaningful developments 
towards compliance severely impaired the functioning of the system, and altered the balance of rights 
and obligations, which had been ne gotiated by Members.  All Members bore that responsibility, but 
the behaviour of major players had a much more significant impact and they bore a correspondingly greater individual responsibility.  Brazil, therefore, urged the United States to step up the efforts to 
fully implement the relevant DSB's recommendations  in the shortest period of time possible.  WT/DSB/M/215 
 Page 5 
 
 
  12. The representative of Argentina  said that, like previous speakers, his country wished to 
express systemic concern with regard to the dela ys in implementing the DSB's recommendations and 
rulings.  Prompt compliance with the DSB's recommendations and rulings was a critical element of the WTO dispute settlement system.  Long delays in implementation and the apparent lack of progress 
four years after the reasonable period of time had elapsed, as in the Section 211 dispute, created a 
negative precedent for the credibility of the system .  Argentina, therefore, insisted that the 
United States redouble its efforts to ensure imme diate compliance with the DSB's recommendations 
and rulings in this dispute. 
13. The representative of the United States
 said that his delegation wished to thank those 
Members who had expressed appreciation for US effo rts to comply with the DSB's recommendations 
and rulings in this dispute.  With respect to the question posed by one Member to both parties to this 
dispute about US future efforts to resolve this di spute, the United States reiterated again that it would 
continue to work with the other party to this di spute in seeking to resolve it in accordance with the 
rules of this Body. 
14. 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.43) 
15. The Chairman  drew attention to document WT/DS184/ 15/Add.43, 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. 
16. The representative of the United States  said that his country had provided a status report in 
this dispute on 8 June 2006, in accordance with Ar ticle 21.6 of the DSU.  As of 23 November 2002, 
the US authorities had addressed the DSB’s reco mmendations and rulings with respect to the 
calculation of anti-dumping margins in the hot-rolled steel anti-dumping duty inv estigation at issue in 
this dispute.  Details were provided in document WT/DS184/15/Add.3.  The US administration 
continued to support legislative amendments that  would implement the DSB's recommendations and 
rulings with respect to the US anti-dumping duty statute, and was working with the US Congress to pass such amendments. 
17. The representative of Japan
 said that his country noted the statement made by the United 
States along with its latest status report.  While Jap an was encouraged that the US administration was 
prepared to work with the US Congress to enact the legislation H.R. 2473, it wished to reiterate its 
disappointment that no progress had been made more than one year since that legislation had been 
introduced in the US Congress.  In order to take in to account Japan's interest as well as to preserve the 
credibility of the WTO dispute settlement system, Ja pan wished to renew its strong hope that the 
United States would make further efforts to impl ement the DSB's recommendations and rulings as 
soon as possible. 
18. 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.18) 
19. The Chairman  drew attention to document WT/DS160/ 24/Add.18, 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. WT/DSB/M/215 
Page 6  
 
 20. The representative of the United States
 said that his country had provided a status report in 
this dispute on 8 June 2006, in accordance with Article 21.6 of the DSU.  As noted in the report, the US administration was working closely with the US Congress, and conferring with the EC, to reach a mutually satisfactory resolution of this matter. 
21. The representative of the European Communities
 said that, as his delegation had indicated at 
the previous DSB meeting, the EC regretted the lack  of progress in solving this long-standing dispute. 
He noted that the Panel Report pertaining to this dispute had been adopted in July 2001.  Now it was June 2006, but the United States had failed to take  any steps to amend a piece of legislation that 
violated intellectual property rights and hurt the inte rests of music creators.  For several years now, in 
its status reports, the United States had stated that  the US administration was actively discussing with 
the US Congress possible solutions to this dispute,  but the United States had not substantiated that 
assertion before the DSB in spite of repeated calls fr om the EC in this regard.  Once again, the EC 
urged the United States to provide information on th e specific steps that it had taken or intended to 
take to solve this dispute.  This situation of non- compliance had already lasted for too long.  Finally, 
the EC wished to recall that it had reserved its right to reactivate, at any poin t in time, the arbitration 
proceedings on the level of retaliation. 
22. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(d) European Communities – Export subsidies on sugar:  Status report by the European 
Communities (WT/DS265/35/Add.1 – WT/D S266/35/Add.1 – WT/DS283/16/Add.1) 
23. The Chairman  drew attention to document WT/DS265/35/Add.1 – WT/DS266/35/Add.1 – 
WT/DS283/16/Add.1, which contained the status report by the European Communities on progress in 
the implementation of the DSB's recommendations in  the case concerning export subsidies on sugar. 
24. The representative of the European Communities  recalled that on 19 May 2005, the DSB had 
adopted the recommendations and rulings in the "EC – Sugar" dispute brought by Australia, Brazil and Thailand by adopting the Appellate Body a nd the Panel Reports.  On 28 October 2005, the 
Arbitrator acting under Article 21.3(c) of the DSU ha d determined that the reasonable period of time  
for the EC to implement the DSB's recommendations and rulings would be 12 months and three days. 
That time-period had expired on 22 May 2006.  As th e EC had reported already in its first status 
report, on 20 February 2006 the EC Council ha d adopted Regulation (EC) No 318/2006 on the 
common organization of the markets in the sugar sector.  As interested Members were aware, the adoption of this Act had been preceded by intense debate, both internally an d internationally on how 
to dramatically reform the EC sugar sector, someth ing which had not been done in 40 years.  The 
result, Regulation No 318/2006, set out the framework  for a comprehensive and very painful reform 
of the EC sugar sector.  This reform addressed the root causes for the exportation in excess of 
scheduled limits of what the Appellate Body had c onsidered to be "subsidised" sugar.  The reform 
was expected to bring down the EC support price by  36 per cent, EC production by 8 million tons and 
exports by more than 5 million tons.  Any subsid ized exports would respect the scheduled subsidy 
commitments on the basis of export licences issued for the relevant marketing years.  The new 
regulation no longer required C suga r – now termed "out-of-quota suga r" – to be exported, nor was 
the future issuance of licences for the exportatio n of out-of-quota sugar foreseen at the moment. 
25. He noted that one of the main consequences woul d be to turn the EC from a net exporter into 
a net importer of sugar.  He added that this reform would not only be painful for EC farmers, but also 
for the ACP countries.  Regulation No 318/2006 had also given the necessary powers to the European 
Commission to adopt the implementing measur es required to fully achieve compliance by 
22 May 2006.  A first such measure was Commission Regulation No 493/2006 of 27 March 2006.  Following the elimination of the obligation to export C sugar, this regulation allowed this sugar to be  WT/DSB/M/215 
 Page 7 
 
 
  carried forward to the 2006/2007 marketing year and be considered as non-quota sugar under the 
terms of Regulation 318/2006.  It also provided fo r the reduction of eligible production under quota in 
respect of the 2006/2007 marketing year so as not to create new stocks of sugar.  Various options had 
been created to make sure that this suga r remained in the EC and was not exported. 
26. He said that since the previous status report, Commission Regulation No 769/2006 of 
19 May 2006 had been adopted and had entered into force.  That Regulation allowed for the return of 
export licences for C sugar issued but not used by 22 May 2006 and suspended the further issuance of 
export licences for C sugar from 23 May 2006.  On the basis of the above legal acts and their 
application, the EC was now in a position to mainta in its subsidized exports of sugar within its 
commitments as from the marketing year 2006/2007, as well as applied on a pro rata  basis for the 
remainder of the marketing year 2005/2006.  The EC had thus fully complied with the DSB's rulings 
and recommendations in this dispute within the reaso nable period of time specified for that purpose.  
To announce this, the EC had submitted its second status  report right after the expiry of that deadline. 
This status report contained attachments with th e three mentioned Regulations, and the EC thanked 
the Secretariat for processing and circula tion of this large volume of documents. 
27. The representative of Australia  said that her country thanked the EC for its second written 
status report and for the information provided at  the present meeting.  Australia welcomed the 
opportunity to consult on progress in the EC's implem entation of reforms to its sugar sector.  In its 
second written status report, the EC had claime d that it had fully complied with the DSB's 
recommendations and rulings by the date of expi ry of the reasonable period of time;  i.e. 
22 May 2006.  At the same time, the information provided in the second written status report of the 
EC provided clear evidence that 26 WTO Members – the EC and its member States – had not given 
effect to their undertakings not to provide export subsidies otherwise than in accordance with the 
Agreement on Agriculture  and with the commitments as specified in those Members' schedules.  The 
status report also confirmed that those WTO Members had not ensured the conformity of their laws, regulations and administrative procedures with their WTO obligations. 
28. In the status report, the EC stated that, as from 24 May 2006, it had been in a position to 
maintain its subsidized exports of sugar with in its commitments as from the marketing year 
2006/2007.  The status report provided no assurance that the EC would maintain its subsidized 
exports and export subsidies within its WTO commitmen t limits.  The delegation of legal capacity to a 
regulatory authority to maintain subsidized exports  and budgetary outlays on export subsidies within 
the WTO-scheduled limits might contribute toward s WTO conformity.  However, it was another 
matter when that same regulatory authority introduc ed and applied measures providing for subsidized 
exports and export subsidies in excess of those lim its – that was, measures which were prohibited 
under the terms of the Agreement on Agriculture.  It would be a matter of concern for all WTO 
Members, if the provisions of the DSU were to be interpreted as affording a right to an implementing 
Member to suspend its WTO obligations under a WT O covered agreement, both during and beyond 
the reasonable period of time.  If such interpretation were accepted, the DSU would cease to preserve 
rights and obligations under the WTO covered agreemen ts;  rather, it could serve to nullify the rights 
of other WTO Members. 
29. Throughout the reasonable period of time for implementation of the DSB's recommendations 
and rulings, the EC had introduced and applied me asures which were prohibited under the Agreement 
on Agriculture.  The status report confirmed that the EC would continue to do so, at least until 
30 September 2006.  During the course of the implem entation period, the relevant regulatory authority 
– the European Commission, acting through the procedures of the Sugar Management Committee – 
had introduced a measure declassifying quota sugar to  C sugar.  That measure had been introduced 
after the commencement of the 2005/2006 marketing year.  It was applied with the intent and effect of 
increasing subsidized exports to levels significantly  in excess of the WTO quantity limit in the 
2005/2006 period.  The declassification mechanism w as carried through to the new sugar regime. WT/DSB/M/215 
Page 8  
 
 30. Also during the course of the implementation period, that same regulatory authority had 
introduced and applied WTO-prohibited measures – and according to the status report – would 
continue to introduce and apply WTO-prohibited measures after 22 May.  The combination of 
measures was forecast to result in subsidized expor ts some 7 million tonnes in excess of the EC's 
quantity commitment limits for the 2005/2006 marke ting year.  It had taken comparable action in 
regard to measures introduced and applied in excess of the EC's sc heduled export subsidy budgetary 
outlays limits for the 2005/2006 marketing year, expiring on 30 June 2006.  Those actions, which represented almost the total of the EC's WTO scheduled commitments over seven WTO marketing 
years, had come at great cost to the Australian sugar industry, conservatively estimated at around $A 200 million in 2006 alone. 
31. The status report referred to the action taken to suspend C sugar export licences as a measure 
of implementation.  In so doing, the report did not inform the WTO Membership that, in the lengthy lead up to the date of effect of licence suspen sion – 23 May – no limits had been placed on the 
quantities of C sugar eligible for export licensing up to that date.  Nor had the status report referred to 
the regulatory authority's failure to exercise its lega l capacity –  available before, during and after the 
implementation period – to regulat e quota sugar export quantities a nd export subsidies through export 
licensing and the fortnightly or monthly decisions of the Sugar Management Committee.  The status 
report referred to the elimination of the legal requirement to export C sugar as a measure of 
implementation.  The report did not inform the WTO Members of the legal fact, that C sugar – or any other sugar declared surplus to domestic consumpti on – would attract a penalty if not exported.  The 
new regime preserved those penalty provisions.  It also preserved the provisions restricting retention 
of out-of-quota sugar on the internal market to a ve ry limited category of industrial sugar usage, as 
well as the restrictions on carryover to the next year's  quota.  The status report did not claim that there 
would be expanded opportunities for disposal of any su rplus to quota sugar on th e internal market.  In 
this context,  Australia would be interested in an e xplanation of the intent and effect of the most recent 
draft Commission Implementing Regulation on out-of-quota sugar which provided, inter  alia, that in 
regard to stocks and exports of out of quota s ugar, the arrangements were largely based on the 
existing rules for C sugar. 
32. The status report also referred to forecasts th at the sugar reforms could serve to reduce 
exports by more than 5 million tonnes, as a conseque nce of expected reductions in support prices and 
production.  The status report contained no indi cation of the time-frames for any such forecast 
outcomes.  For the immediate future, it was releva nt that the quotas of the major surplus producing 
member States – which were also  the major exporting member States – would be increased by 
1 million tonnes.  In any event, forecasts of e xpected outcomes could not be claimed as measures 
taken to comply within the reasonable period of time. 
33. In conclusion, the facts demonstrated that the EC had failed to comply with the DSB's 
recommendations and rulings within the reasonable period of time.  The facts also demonstrated that 
the EC would continue to apply WTO-inconsistent  measures well beyond the expiry of the reasonable 
period of time.  Australia, therefore, reserved its WT O rights.  She noted that Australia's consent to a 
procedural agreement with the EC had been given for the sole purpose of preservation of those rights, 
including rights under the DSU and the rights unde r the WTO Annex 1 Agreements.  The procedural 
agreement could not, in any way, be interpreted to signify that Australia had foregone those rights.  
Finally, Australia requested that th e DSB take note of this statement. 
34. The representative of Brazil
 said that his country wished to thank the EC for its status report 
and its statement made at the present meeting.  Brazil acknowledged the importance of the reform 
approved by the EC to its sugar regime.  It also  looked forward to seeing the promises that the EC 
sugar production and exports were to be drastically reduced would become an actual fact very soon.  
Based on market conditions, the EC should have neve r become a sugar exporter, let alone one of the 
major exporters.  Furthermore, under the Agreement on Agriculture, the EC was, at least, more than  WT/DSB/M/215 
 Page 9 
 
 
  10 years late in limiting its sugar exports.  Braz il was carefully examining the complex rules that 
would govern the new sugar regime in order to ass ess its impacts on Brazilian rights and interests.  
With regard to this point, Brazil wished to expr ess its appreciation for the c onstructive approach taken 
by the EC in offering explanations and clarificati ons about the sugar regime  which would enter into 
operation on 1 July. 
35. Nonetheless, Brazil did not agree that the EC  had complied with the DSB's recommendations 
in the sugar dispute within the reasonable period of time, which had expired on 22 May 2006.  The 
implementation obligation for the EC was to limi t – during the reasonable period of time – its 
subsidized sugar exports to 1.2 million tonnes per year and the amount of sugar export subsidies to 
€499 million per year.  The EC could not deny th at sugar exports in ma rketing year 2005/2006 had 
already – and significantly – exceeded those limits.  In view of this fact, the assertion by the EC that it 
had fully implemented the DSB's recommendations within the reasonable period of time was but an 
assertion.  Even of greater concern for Brazil was the allegation by the EC that, despite having exported much more than what it was allowed under the Agreement on Agriculture and its schedule in 
marketing year 2005/6, the EC was still entitled to ex port beyond those limits for the remaining of the 
current marketing year on a "pro-rata basis".  Br azil could not conceive of  any sound legal argument 
that could justify the position advocated by the EC.  For the credibility of the dispute settlement 
system, the EC must give a detailed explanation of its "pro-rata basis" proposition.  In light of all 
these considerations, Brazil would continue to fo llow attentively the evolution of the figures 
concerning the EC's sugar exports and, also, the act ual implementation of the new sugar regime.  At 
the same time, Brazil would consider all options av ailable to preserve and promote its rights to obtain 
the full implementation of the DSB's recommendations in this dispute. 
36. Finally, with regard to the impact of th e changes in the EC sugar regime on the ACP 
countries, he reiterated that there was nothing in this  dispute that would force the EC to reduce in any 
way preferential market access or benefits for the ACPs.  The proportion of funds allocated for 
compensation of EC and ACP farmers, respectively, had not been determined by the DSB and it, 
therefore, showed how concerned the EC was about  the ACP countries, and how much it cared about 
protection of its own sugar farmers which, by  the way, were not the poorest in Europe. 
37. The representative of Thailand
 said that his country wished to join previous speakers in 
thanking the EC for its statement and its updated status report, including its production and export 
projections for the new sugar regime.  Much like its predecessor, the new regime and its governing 
regulations were complex, and Th ailand would continue to careful ly examine these in light of the 
EC's obligations under the WTO Ag reements.  Despite the incepti on of the EC's new regime, and 
despite the expiration of the reasonable period of  time on 22 May 2006, troubling aspects of the old 
regime remained in force.  This  included, the EC's decision to allow continued illegal exportation of 
C sugar for at least three months after the expi ry of a reasonable period of time.  Thailand had 
previously voiced this concern during the DSB meeting on 17 May 2006, and had urged the EC to 
bring all aspects of its sugar regime into complia nce as soon as possible.  Unfortunately, the updated 
status report by the EC did not provide Thailand with  any comfort.  The status report simply stated 
that the EC had suspended further issuance of such export licenses, but had failed to negate that these 
licenses remained valid for at least another three m onths after the expiration of a reasonable period of 
time.  
38. Troubling also was the justification given by the EC in its status report for its continuation of 
these illegal exports.  The EC stated that it "is now in  a position to maintain its subsidized exports of 
sugar within its commitments as from the mark eting year 2006/2007, as well as applied on a pro rata  
basis for the remainder of the marketing year 200 5/2006."  Thailand failed to see how the EC could 
claim a right to continue exporting subsidized suga r when it had long since exceeded its quantity and 
budgetary outlay commitments on sugar exports for the 2005/2006 marketing year.  For Thailand, 
these actions did not fall within the definition of "c ompliance" by any interpretation.  For Thailand, WT/DSB/M/215 
Page 10  
 
 compliance meant, at a minimum, that the EC would have stopped exporting illegally subsidized 
sugar as of 23 May 2006.  Because Thailand remained to be convinced that the EC had brought itself 
into compliance with the DSB's r ecommendations and rulings within the reasonable period of time, 
Thailand had preserved its rights in a procedural agreement with the EC set forth under agenda 
item 7(c).  Thailand would continue to  examine all its options in this regard. Finally, he noted that it 
was said that "old habits die hard".  Thailand hope d that the EC's exportation of illegally subsidized 
sugar was not one of them. 
39. The representative of the European Communities
 said that it was evident that there was a 
disagreement between the parties.  As he had alr eady stated, the EC considered that it had brought 
about compliance with its export s ubsidy commitments by the end of the reasonable period of time.  
Regarding C sugar, there was no longer a requirement to export.  Operators were provided a choice of 
the use to be given to such sugar, and licences that  had been granted under the previous regime could 
be returned so that that choice was fully effective.   In any event, no licences for the export of C sugar 
had been granted since 23 May 2006.  Therefor e, the EC was convinced that it had ensured 
compliance.  Once again, he wish ed to state that the reasonable period of time was a period foreseen 
for bringing about compliance, it was not a period during which compliance must already exist.  The 
reasonable period of time was precisely a period gran ted to permit the losing Member to undertake the 
necessary legislative or administrative changes allowing it to conform to its obligations for the future.  
While the complainants had argued in the arbitrat ion proceedings, pursuant to Article 21.3 of the 
DSU, that the EC could have done this sooner, the Arbitrator had not rejected the EC's position that a 
Council regulation was an appropria te means to ensure compliance.1  The EC, like any other WTO 
Member, could not at the same time be taking steps to amend its legislation to come into conformity 
and be in conformity.  In this case, the EC had ta ken the required steps to export subsidised sugar only 
within the WTO limits as from 23 May 2006.  Requiring that limit to be respect ed already before that 
date – for the purposes of assessing compliance in the period after the expiry of the reasonable period 
of time – would amount to denying the EC's right to that reasonable period of time, and raised 
fundamental systemic issues for the functioning of the WTO's dispute settlement system.  As he had 
stated previously, the EC had taken the required step s to export subsidised sugar only within the WTO 
limits as from 23 May 2006.  As the complainants kne w, the EC's annual limit was not zero.  For the 
application of this limit in the period from 23 Ma y 2006 to 30 September 2006, which was not a full 
marketing year, the EC would, therefore, respect the limit that corresponded to that period.  He 
stressed that the EC sugar reform would ensure that  future exports of sugar would fully comply with 
the EC's obligations, as interpreted by the Panel and the Appellate Body. 
40. The DSB took note  of the statements.   
(e) European Communities – Customs classificati on of frozen boneless chicken cuts:  Status 
report by the European Communities (WT/DS269/15 – WT/DS286/17) 
41. The Chairman  drew attention to document WT/DS 269/15 – WT/DS286/17, which contained 
the status report by the European Communities on progress in the implementation of the DSB's 
recommendations in the case concerning the EC's customs classification of frozen boneless chicken 
cuts. 
42. The representative of th e European Communities  said that, under Article 21.6 of the DSU,  
the EC had to submit a status report regarding th is case starting from 20 August 2006.  However, in a 
spirit of transparency and good faith, the EC had su bmitted this report much earlier, while preserving 
its rights.  There was no need to repeat the whole status report which had been submitted to the DSB. 
The EC was pleased to report that draft legisla tion under the form of a Commission Regulation that 
would fully implement the relevant DSB's findings  and recommendations had been submitted and was 
                                                      
1 Arbitrator's Report, para. 73.  WT/DSB/M/215 
 Page 11 
 
 
  now in the process of being adopted.  In fact, th e European Commission wished to inform the DSB 
that the draft regulation had gone through the Cust oms Code Committee recently, which was the step 
necessary before an adoption by the College of Co mmissioners.  The Commission had worked hard to 
ensure that this legislation was enacted, and entere d into force at the latest  by the expiry of the 
reasonable period of time for implementation as fixe d through binding arbitration.  The EC intended 
to present a more detailed report as soon as such le gislation was adopted and entered into force. 
43. The representative of Brazil  said that his country noted the statement made by the EC at the 
present meeting, but regretted the scarcity of info rmation contained in the status report provided by 
the EC.  Considering the EC's substantive and pr ocedural obligations under Article 21.3 and 21.6 of 
the DSU, and bearing in mind that only eight days remained until the end of the reasonable period of 
time, Brazil expected that the EC would inform w ith precision and in detail the steps it had taken in 
order to comply with the DSB's recommendations a nd rulings.  Unfortunately, this had not happened.  
The EC had merely affirmed that "a Commi ssion Regulation amending Annex 1 to Council 
Regulation (EEC) No. 2658/87 […] that would fully implement the DSB recommendations and 
rulings [...] is now on the process of being adopted". 
44. Brazil was, notwithstanding, pleased to note that the EC intended to implement these 
recommendations in a period shorter than the one in itially proposed by the EC during the arbitration 
proceedings under Article 21.3(c) of the DSU.  At t hose proceedings, the EC had alleged that it would 
need 18 months to ask for confirmation at the Wo rld Customs Organization of the Appellate Body's 
findings.  The EC had also argued that an add itional eight-month period would be necessary for 
enacting a Commission Regulation to comply with th e DSB's rulings.  At the present meeting, by 
affirming that it would implement those rulings "at the latest by the expiry of the RPT";  i.e. within 
the nine-month period as recommended by the arbitrator , and in only four months since the circulation 
of the arbitral award, the EC confirmed that (i ) recourse to the WCO was not necessary to implement 
the DSB decisions2 and that (ii) the eight months purportedly needed to pass a Commission 
Regulation did not constitute the shortest period of time3 under the EC law when passing such 
legislation.  Finally, he said that Brazil was following closely the EC's implementation actions and 
expected that by the expiry of the reasonable period of time, on the 27 June, the EC would fully comply with its obligations under the DSU. 
45. The representative of Thailand
 said that his country also noted the status report submitted by 
the EC at the present meeting.  Under Article 21.6 of  the DSU, the EC was obliged to submit its first 
status report as from 20 August 2006.  However, th e EC had stated that in the "spirit of full 
transparency", it was submitting this status report much earlier than it was due.  Thailand understood 
and appreciated the EC's intention to be transparen t;  however, in Thailand's view, the status report 
was not very clear.  Thailand had two concerns with  the information contained in the EC's status 
report.  First, given the fact that the reasonable period of time for implementation would expire in eight days, namely on 27 June, the EC report was rather vague about the precise stage it was at in its 
implementation process.  It only stated that the Eu ropean Commission was working with the relevant 
Committees to enact this legislation.  Given the i mminent expiry of the reasonable period of time in 
eight days, Thailand expected that the EC would be more advanced in its legislative process than at 
the Committee stage. 
46. Second, in its report the EC had stated that it intended to present a more detailed status report 
"as soon as such legislation is adopted and enters into force."  Thailand noted that this raised the 
possibility that the EC could adopt the required legi slation on the last day of the reasonable period of 
time;  i.e. 27 June 2006, but that the legislation woul d not enter into force until 20 or 30 days after the 
expiry of the reasonable period of time.   As Memb ers were aware, this gap between the enactment of 
                                                     
 
2"EC – Chicken Cuts", Arbitrator's Award in Article 21.3 Proceedings, para. 64. 
3 Idem , paras. 79-80. WT/DSB/M/215 
Page 12  
 
 the legislation and the actual implementation of th at legislation was an issue under another agenda 
item.  The EC had in the past expressed strong disappoi ntment with such a gap.  Thailand trusted that 
there would be no inconsistency be tween the EC's words and its own deeds in that respect and that, 
therefore, its implementing legislation in this disp ute would enter into force by the expiry of the 
reasonable period of time, as stated by the EC at the present meeting.  Thailand would continue to 
actively monitor the EC's implementation process.  It looked forward to the more detailed status 
report by the EC indicating that it had brought its measures into full conformity with its WTO 
obligations by 27 June 2006. 
47. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
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"4 and related subsequent WTO proceedings 
(a) Statements by Honduras, Nicaragua and Panama 
48. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Honduras, Nicaragua and Panama.  He then invite d the representatives of the respective countries to 
speak. 
49. The representative of Honduras  said that at previous DSB meetings his country and other 
Members had repeatedly expressed their concern at  the undue tariff discrimination, the undue quota 
and absence of a bound MFN tariff by the EC.  With re gard to tariff and quota discrimination, the EC 
had generally disregarded Honduras' concerns without giving any explanation.  It had been unable to 
explain in what way its discriminatory tariff comp lied with Article I of the GATT 1994 or how its 
discriminatory quota complied with Article XIII of th e GATT 1994.  It had simply insisted that it had 
"rectified the matter".  As far as the absence of a bound MFN tariff was concerned, the EC had said that it had not rebound the tariff because it wanted to "verify the real impact of the new MFN tariff on the market".  Thus, in the EC's view, the level of  the bound tariff should be determined by the market 
impact of its new applied tariff of 176€/mt.  The EC  had also stated that – despite all the economic 
analyses showing the contrary – its applied tariff ha d been set "at the correct level" and would not 
have any negative impact on the market.  The EC  had assured the DSB that its "monitoring process" 
would reaffirm the EC's statement in this regard.  Honduras had now been told – informally – that the 
EC's bound tariff would be well above the applied tariff and much higher than the bound tariff of 
187€/mt, previously proposed by the EC, but rejected after the WTO arbitration.  If this information 
was correct, in Honduras' view, the rebinding of this ne w tariff, at a higher level, would be contrary to 
the EC's statements made at previous DSB meetings .  He then raised some questions.  How could the 
matter be "rectified" by imposing a bound tariff, which had been rejected by the WTO?  How was it 
possible for a bound tariff, which would be much hi gher than the applied tariff – in fact unacceptably 
high – be determined by the "market impact" when , to a large extent, Honduras had lost the EC's 
market since the ACP suppliers used the disp roportionately larger increases under the current 
arrangement?  How could the EC's "monitoring process"  constructively help to settle this dispute if it 
was used to make the new tariff even more WTO-inconsistent?  These new questions and the possibility of being penalized with a higher ne w bound tariff confirmed that the situation was 
deteriorating without any hope of improvement and that, at the present time, the EC did not have the 
slightest intention of respecting Latin America's tr ade rights in respect of bananas.  Accordingly, 
together with other Members, Honduras must pursue the corrective options it had and, once again, 
urged the DSB to give Honduras the support th at would facilitate a prompt solution. 
                                                     
 
4 WT/DS27.  WT/DSB/M/215 
 Page 13 
 
 
  50. The representative of Panama  said that his country had also heard reports that the EC might 
rebind its banana tariff at a level higher than th e 176 €/mt applied rate, perhaps even as high as 
230 €/mt.  Panama hoped that this would not be the case.  A new, even higher bound rate would only 
add to the DSB's implementation c oncerns and would suggest a new level of the EC's reluctance to 
honour its WTO banana commitments.  As Members were aware, the EC's unwillingness to honour its 
commitments had already commanded the attention of a number of WTO Bodies.  In the DSB, 
Panama had discussed at length the EC's non-compliance with Articles I and XIII of the GATT 1994.  In the General Council, Panama had further discussed the EC's Article XIII violation.  In the Council 
on Trade in Goods, Panama had repeatedly ad dressed the EC's unwillingness to fulfil its GATT 
Articles XXIV:6 and XXVIII obligations.  Now, as th e Doha Round reached a crucial phase, attention 
was again being given to bananas.  If the EC were  to introduce a new, improperly inflated bound rate 
at the time when Members moved to finalize negotiati ng modalities, it would be hard to interpret that 
the EC's action as anything other than an effort  to escape its core market access commitments on 
bananas.  Under any plausible Doha scenario, a bound  rate set at a new level up to 30 per cent higher 
than the already punitive applied rate of 176 €/mt  would prevent a reduction in the 176 €/mt applied 
rate for several years.  This would not represen t a "substantial improvement in market access" for 
bananas, nor would it represent the "fullest liberalization of trade in tropical products".  By the time any market access improvement occurred, Panama and other Latin American countries would already 
have suffered irreparable harm.  Whether this issu e was addressed in the DSB, the General Council, 
the CTG, or the Doha Round, the overriding objective must be prompt and meaningful relief for developing economies.  Since s ubstantial economic harm had alr eady begun for many developing 
countries, a delay in relief would ultimately be no different to a denial of relief.  Panama urged 
Members to work with it in the DSB, and in all other relevant WTO foras, to promote prompt and 
meaningful relief on this matter. 
51. The representative of Nicaragua
 said that his country too wished to ask the EC to clarify 
whether it intended to bind its MFN banana tariff at a rate above the one curre ntly applied, which was 
unacceptably high and inconsistent with the WTO.  If a high bound tariff were to be included in the 
Schedules, this would mean a further very serious ha rm to Latin American banana suppliers in both 
economic and legal terms. As regards the economic aspect, Nicaragua again pointed out the 
following:  (i) until 1 January 2006, all bananas import ed into the EC had been subject to a tariff of 
€75/mt, i.e. US$1.75/box;  (ii) since 1 January 2006,  Latin American bananas had been subject to a 
tariff of €176/mt or US $4.10/box.  This tariff was approximately two and half times higher than the 
one applied previously to bananas – a product origin ating entirely from developing countries;  (iii) if 
the bound tariff was now to be set at €230/mt, as some stated it would, this would amount to 
US $5.37/box.  In that case, the tariff listed for Nicara gua would be more than three times higher than 
the bound tariff of €74/mt that applied from 1995 to 2005;  (iv) nobody could suggest that a tariff 
more than twice as high – let alone three times as high – as the previous one was "trade neutral". 
52. With regard to the legal asp ect, Nicaragua again pointed out that in August 2005, in the 
Bananas III arbitration proceedings, the arbitrator s had expressly prohibited a bound rate of €230/mt. 
In October 2005, the arbitrators had expressly prohibi ted a tariff rate of €187/mt.  In both proceedings, 
it had been made quite clear that the MFN rate of the single tariff should be bound at €75/mt or thereabouts.  The EC should have no doubt about the legal and economic realities of the matter.  In a 
press release of November 2005, the EC had informed  the public that the WTO had rejected its bound 
rate of €230/mt and €187/mt.  The EC knew well that  it could never defend itself with the argument 
that these tariff rates were "trade neutral".  Ind eed, in formal consultations, the EC had already 
conceded to some Latin American suppliers that  there were legal impediments to imposing a bound 
rate of €187/mt or higher.  Consequently, if the EC were now to opt for a higher bound rate, it would 
be reaffirming with painful clarity that it had no intention of meeting its obligations in this matter.  It 
would also be confirmation that Nicaragua shoul d hold out no hope of protection for its fragile 
developing country interests unless it had the DSB's s upport.  On behalf of its banana industry and 
other sectors in Nicaragua that were following this case with interest, his country wished to make the WT/DSB/M/215 
Page 14  
 
 following appeal:  the DSB must ask the EC to co mply faithfully with its WTO obligations and to 
give Nicaragua a fair opportunity to compete in the EC's banana market. 
53. The representative of th e European Communities
 said that the EC had, once more, listened 
carefully to the statements made by WTO Members on this matter.  He referred to the EC's prior 
statements regarding its objection to categorisati on of this matter as an "implementation issue" 
relevant to Article 21 of the DSU.  The EC had remained open to addressing the concerns of Latin 
American suppliers in relation to the new import re gime in the appropriate fora.  The EC was well 
aware of the importance of the banana industr y for Latin American countries (as well as ACP 
countries) and had always taken these interests into  consideration.  A solution was currently being 
pursued in the context of the monitoring a nd review mechanism under the good offices of the 
Norwegian Minister Støre.  The EC regretted that  Honduras, Panama and Nicaragua had opted for the 
litigation route rather than engaging in this process.  The EC also not ed that it was in contact with 
partners on the rebinding of the tariff.  The position of  the EC remained the same.  The EC had always 
aimed at making a neutral move from a TRQ system to the tariff-only system now in place.  In order to ensure this, the EC had agreed to closely mon itor the impact of the new MFN tariff and exchange 
data with Latin American banana suppliers willing to participate in the Støre process in good faith.  
The EC had not proceeded with the rebinding in orde r to verify the real impact of the new MFN tariff 
in the market and in the hope that an agreement could be reached with all suppliers.  The EC was 
pleased to report that discussions to this end were well under way in the context of the monitoring and 
review process. 
54. The representative of the United States
 said that his country understood that there had been 
little progress in addressing the concerns that inter ested Members had been raising about the EC's new 
banana regime.  The United States was continuing in formal consultations with Members about these 
concerns.  The United States urged the EC, once again,  to work with interested Members to resolve 
this dispute as quickly as possible. 
55. The DSB took note  of the statements.  
3. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by Canada, the European Communities and Japan 
56. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Canada, the European Communities and Japan.  He then invited the respective representatives to 
speak. 
57. The representative of the European Communities  said that on 1 June 2006, the US Customs 
and Border Protection administration had published a no tice of intent to distribute offset payments for 
fiscal year 2006 under the CDSOA.  The US Cust oms had also posted on its website a provisional 
estimate of the amounts available for distribution as from 1 October 2006.  These were the first steps in the process that would result in a new distribu tion starting on 1 October 2006 and would add to the 
nullification and impairment already caused not only to the co-complainants in this dispute, but 
actually to the whole Membership.  The first indica tion was that the next CDSOA distribution and the 
consequent impairment and nullification would increase.  The preliminary amount of duties collected up to 30 April 2006 was substantially higher than the amount already collected on the same date in the 
past year.  As far as the EC was concerned, the preliminary amount collected on its exports had 
already exceeded the definitive amount  collected in the whole of the previous fiscal year.  Those 
transfers of collected anti-dumping and counterva iling duties were WTO-incompatible and should 
have been stopped by 27 December 2003.  And yet,  the United States had asserted that it had taken all 
actions necessary to implement the DSB's recommendati ons and rulings in this dispute.  This meant  WT/DSB/M/215 
 Page 15 
 
 
  that the United States had granted itself unilaterally th e right to comply with the DSB's ruling at some 
undetermined date in the future regardless of Me mbers' duty to comply promptly with the DSB's 
rulings.  In the absence of a status report, 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 countervailing duties without further 
delay.  The US Congress could revisit the delaye d termination of the Byrd Amendment if political 
will was there as shown by the FSC dispute where it ha d put an end to WTO-illegal transition periods.  
The EC also renewed its call on the United States to  abide by its clear obligation under Article 21.6 of 
the DSU and to submit status reports on implementation in this dispute. 
58. The representative of Japan  said that his country was disappointed that the United States had 
not submitted a status report this month once again in  spite of the statements made at previous DSB 
meetings.  Although Japan welcomed the enactment  of the Deficit Reduction Act of 2005, it believed 
that the full implementation of the DSB's recommenda tions and rulings in this dispute meant that the 
CDSOA should be completely repealed and the illegal distribution under the CDSOA terminated.  
Japan urged the United States to take steps to comply fully with the DSB's recommendations and 
rulings without further delay and to provide its status  report.  Japan also wished to renew its request 
for providing information on how actual disburseme nts would work under the transitional clause of 
the CDSOA.  Japan reserved a ll the rights under the DSU until fu ll implementation by the United 
States. 
59. The representative of Canada  said that as his delegation had stated at previous DSB meetings, 
Canada welcomed the adoption of the prospective repeal of the Byrd Amendment.  Starting from 
1 October 2007, anti-dumping and countervailing du ties would be deposited in the US Treasury, 
rather than being disbursed to US producers.  However, this method of repeal raised important 
commercial and systemic concerns that had not ye t been addressed by the Un ited States.  In this 
context, the US claim that by implementing this prospective repeal it "has taken the actions necessary 
to implement the rulings and recommendations" woul d only be accurate when disbursements were 
terminated.  Given that disbursements would continue  to occur for several years to come, Canada saw 
no justification for the discontinuation by the Unite d States of submitting to the DSB status reports on 
developments relating to the implementation of the rulings in this dispute.  Canada called on the 
United States to resume the submission of status reports and to implement full repeal of the Byrd 
Amendment. 
60. The representative of Brazil  said that his country thanked Canada, the EC and Japan for 
bringing this matter to the attention of the DSB.   This was the fourth time that these Members and 
others, like Brazil, had searched for an explanati on from the United States regarding the grounds for 
the claim that, by the sole adoption of the prosp ective repeal of the Byrd Amendment, it had fully 
complied with the DSB's recommendations in this  case.  On the three previous occasions (DSB 
meetings on 17 March 2006, 21 April 2006 and 17 Ma y 2006), the United States had presented no 
reason whatsoever to convince Members that the matte r at issue had been solved.  Systemic reasons 
alone should suffice to stimulate the United States to spell out its position.  If that were not enough, 
reasoned explanations by the United States were al so necessary in view of the recent information by 
the US customs authorities that the preliminary amounts – up to 30 April – to be distributed under the CDSOA next October exceeded US$170 million.  Such  information had given concrete and serious 
indications regarding the questions the complain ants had been posing to the United States on how 
next disbursements could be r econciled with recommendations according to which every such 
disbursement was WTO-inconsistent.  In light of  these facts, Brazil renewed its request that the 
United States explain in detail the rationale underl ying the US statement that it had implemented the 
DSB's recommendations. 
61. The representative of Chile
 said that his country, once again, wished to make a statement on 
this agenda item because the Un ited States was still not complying with the DSB's recommendations. 
The Byrd Amendment was still in force and, acc ording to indications, would remain so until WT/DSB/M/215 
Page 16  
 
 1 October 2007.  However, the situation regarding this protracted compliance was not clear because 
recently the US Department of Commerce had  announ ced that, even after that date, there could be 
disbursements.  The injury suffere d by the Chilean industry would, therefore, continue indefinitely 
because, in addition to the foregoing Chile understood th at the duties available for distribution in past 
years which had not been distributed for various re asons could be distributed after 1 October 2007. 
Chile, once again, called on the United States to te rminate the Byrd Amendment both in the letter and 
as far as disbursements were concerned and th us comply with the DSB's recommendations and 
findings. 
62. The representative of Thailand
 said that first of all his country wished to thank Canada, the 
EC, and Japan for bringing this matter before th e DSB.  Thailand joined previous speakers in 
expressing disappointment that the United States c ontinued to illegally disburse funds under the 
CDSOA, and that it had not submitted a status re port on its outstanding implementation in the "US – 
Continued Dumping and Subsidy Offset Act of 2000"  dispute for the present meeting.  Thailand, 
therefore, reaffirmed its previous views express ed during DSB meetings since February 2006, and 
urged the United States to continue providing status  reports until it brought its actions into full 
conformity with the DSB's rulings and recommendations  in this dispute, and until this matter had been 
fully resolved. 
63. The representative of Korea  said that, as previous speakers had mentioned, his country noted 
that, on 1 June 2006, the US Customs and Border Pr otection administration had published a notice of 
intent to distribute offset payments for fiscal year 2006 under the CDSOA.  It was disappointing that, despite its repeated statements that it had taken all actions necessary to implement the DSB's rulings 
and recommendations, the United States was prep aring another illegal pa yment to its domestic 
industries.  Korea believed that this additional disbursement would seriously undermine the WTO 
dispute settlement system for which prompt a nd unconditional implementation was essential.  It 
would, of course, also worsen nullification a nd impairment which the complaining Members had 
already suffered.  Therefore, Korea called on the Unit ed States to take all the necessary actions to stop 
additional distributions and to promptly resolve this dispute. 
64. The representative of India
 said that his country, once again, wished to thank Canada, the EC 
and Japan for bringing up this matter before the DSB at the present meeting.  India joined the previous 
speakers in expressing its disappointment about the lack of any progress report by the United States even though it had not yet fully complied with its  obligations based on the DSB's recommendations 
and rulings in this dispute.  As stated by the EC and others, the preliminary amounts available for 
disbursement in 2006 had now been published on the CPB website.  India had not escaped this 
WTO-inconsistent action by the United States.  Am ounts of about US$1.545 million were being made 
available for disbursements to US domestic industry on duties collected from imports from India on products ranging from iron metal castings, to carbon steel and stainless steel items, PET films, pigments and mushrooms.  There was no response from the United States to the question put by India 
at the previous DSB meeting as to how continue d disbursements of duties collected on imports 
entering the United States squared up with its comp liance obligations.  The United States needed to do 
more than re-iterate a clearly indefensible position on compliance in the face of this new 
administration action based on the very CDSOA that  it admitted had been found inconsistent with 
WTO rules and asserted that it had bee n withdrawn.  Such unilateral action undermined the WTO dispute settlement system.  India urged the United States again to inform the DSB of the steps it 
proposed to take to ensure full compliance.  India al so again requested, at the present meeting, that the 
United States resume submitting status reports in this  dispute, and, of course, India reserved all its 
rights under the DSU. 
65. The representative of the United States
 said that as his country had already explained at 
previous DSB meetings, the President had signed the Deficit Reduction Act into law on 
8 February 2006.  That Act included a provisi on repealing the Continued Dumping and Subsidy  WT/DSB/M/215 
 Page 17 
 
 
  Offset Act of 2000.  Thus, the United States ha d taken all actions necessary to implement the 
recommendations and rulings in these disputes.  In ligh t of the fact that the United States had taken all 
actions necessary to implement the recommendations and rulings in these disputes, the United States 
failed to see what purpose would be served by the su bmission of status reports repeating the progress 
the United States had made in implementation. 
66. The DSB took note  of the statements.   
4. United States – Countervailing measures co ncerning certain products from the 
European Communities 
(a) Statement by the European Communities 
67. The Chairman  said that this item was on the agenda of the present meeting at the request of 
the European Communities and invited the representa tive of the European Communities to speak. 
68. The representative of the European Communities  said that the EC wished to express its deep 
disappointment over the final determinations issued  at the end of May by the US Department of 
Commerce, which confirmed the preliminary findings .  The EC had hoped that the Department of 
Commerce would consider seriously the overwhelmi ng evidence in favour of the repeal of these two 
CVD measures, but that had proved not to be the case.  Once again, the United States had failed to 
comply with the recommendations and rulings adopted by the DSB in this old dispute, by ignoring or twisting the relevant evidence.  The final dete rminations demonstrated beyond any doubt the 
results-oriented nature of the Department's analys is, reasoning and conclusions.  Indeed, the final 
findings and conclusions were unsupported by th e record, totally unjustified and groundless.  
Essentially, the Department of Commerce had determined  that the privatisations of Aceralia and the 
British Steel had not taken place on mark et terms, but that was not supported either by facts or by law.  
Once more, it should be recalled that the purpose of this second Section 129 determination was to 
implement the findings of the 21.5 Article panel in the case at issue. 
69. First, the decision found essentially that the pr ivatisation of British Steel was not for fair 
market value.  However, in both previous WTO proceedings (particularly in DS138, Lead and 
Bismuth Steel from the UK in 1999) as well as in national proceedings that had taken place in the 
United States in 1995 concerning the same privatisation, the United States had accepted unequivocally that British Steel had been privatised fo r fair market value.  This did not change by 
merely arguing, as the Department of Commerce ha d done that the previous findings and admissions 
were not relevant anymore due to the change of th e privatisation analysis methodology.  This did not 
hold water.  The Department of Commerce had anal ysed the same facts as in the past under basically 
the same criteria – arm's length and fair market – which had remained the same and still had reached 
different conclusions.  This was simply unjustified and impermissibl e.  A privatization, dating from 
1988, that had been found to be at fair market  value in 1995 and 1999 had not suddenly ceased to be 
so in 2006. 
70. Second, in its final determinations, the De partment of Commerce reached the specific 
findings by repeating, among others, its claims re garding the alleged deli berate withholding of 
pertinent information by the Government of the United Kingdom.  Both the Commission and the UK Government had, however, provided reasonable explan ations of why the 20-year old valuation study 
requested was not available.  In spite of that and in spite of ample evidence on the record proving that 
the privatisation of British Steel had taken place on market terms, the Department of Commerce  had 
chosen to draw adverse inferences which were wit hout basis and contrary to law.  The information on 
the record did not support the finding that the information requested was deliberately withheld.  
Indeed, officials from the UK Department Trade and Industry and employees of Corus had both signed affidavits stating that they had searched ex tensively for the document but had not found it.  WT/DSB/M/215 
Page 18  
 
 Presumably, the United States did not believe them .  Further, the remaining record evidence, 
including previous admissions from the US administration regarding this matter, should have provided the evidence that the privatisation of British Steel was on market terms. 
71. Third, the final determinations again refered to certain alleged subsidy programs which had 
not been terminated.  Although no sufficient details  had been given, the Department of Commerce had 
referred to regional development aid either thro ugh UK national programs or the European Regional 
and Development Fund.  As explained in the Commi ssion's comments, these allegations did not hold 
water.  The EC had provided detailed and solid  evidence to rebut the Department of Commerce 
allegations beyond any reasonable do ubt.  The alleged programs had been terminated a long time ago 
and nothing on the record demonstrated that British Steel had continued to receive regional 
development grants that benefited the subject merchandise. 
72. In view of this, and in the complete absence of any breach of the applicable Community rules 
at the time of the sunset review in question, namely  the 1996 EC steel aid code, with regard to British 
Steel's steel production, the Department should have  concluded that no CVD or ders were justified on 
this ground either.  The EC had explained many times to the United States that under the 1996 steel 
aid code, regional aid was no longer allowed in th e steel sector, and had backed this up with 
documentary evidence showing that the regional meas ure in favour of British Steel was purely for the 
social purpose of assisting with the creation of SME's in a regional affected by steel closures.  Instead, 
the Department of Commerce had preferred to ig nore the relevant evidence by erroneously arguing 
that it was unsupported and untimely, simply because th at suited the formulation of the pre-ordained 
result.  Admittedly, this practice was agains t all notions of good faith and due process. 
73. On the basis of the above and the evidence on the record, it was clear that the final findings in 
this case were totally unjustified.  It served no pur pose to try against all compelling evidence to twist 
the facts in order to reach different conclusions.  When the record eviden ce was considered, the only 
defensible conclusion was that all subsidy benefits had been terminated or were de minimis .  The 
proven facts simply did not support a finding that subs idization was likely to continue or recur.  In 
light of the above, the EC would take the a ppropriate measures to defend its interests. 
74. The representative of the United States
 said that on 26 May 2006, the US Department of 
Commerce had issued its final revised determinations  in the sunset reviews involving certain steel 
products from Spain and the United Kingdom.  In both cases, the Department of Commerce had determined that revocation of the countervailing du ty order would likely lead to continuation or 
recurrence of a countervailable subsidy.  In each  case, the Department of Commerce had examined 
the privatization of the firm in question.  Speci fically, the Department of Commerce had applied the 
method for examining changes in ownership of a firm that it had developed following the DSB's 
adoption of the Panel and the Appellate Bo dy Reports in the original proceeding. 
75. With respect to the privatizations of the firm  Arcelia in the Spanish case, and the firm British 
Steel plc in the UK case, the Department of Comme rce had found that a portion of each privatization 
had not been conducted on an arm's-length basis.  In addition, the Department of Commerce had 
identified evidence suggesting that th ese privatizations had not been for fair market value.  However, 
due to the failure in each case of the respondent govern ment to supply certain critical information that 
the Department of Commerce had requested, the Department of Commer ce had been unable to 
complete the analyses.  In sum, the Department of Commerce had been unable to determine that the 
privatizations in question were for fair market valu e.  However, in the UK case, the Department of 
Commerce had  determined that th e change of ownership with resp ect to the firm Glynwed was at 
arm's length and for fair market value, thereb y eliminating any prior non-recurring, allocable 
subsidies.  With these actions, the United States ha d implemented the recommendations and rulings of 
the DSB in this dispute.  With respect to the string of assertions that the EC had made in its statement, 
the United States did not intend to engage in this  forum in a substantiv e debate regarding the  WT/DSB/M/215 
 Page 19 
 
 
  determinations in question.  Suffice it to say that  in the US view, the Department of Commerce had 
engaged in a thorough analysis of the evidence, a nd had responded to the arguments raised by the 
parties.  The Department of Commerce determinat ions were public, and would be available on the 
Department of Commerce's website. 
76. The DSB took note  of the statements.  
5. Japan – Countervailing duties on dyna mic random access me mories from Korea 
(a) Request for the establishment of a panel by Korea (WT/DS336/5) 
77. The Chairman  recalled that the DSB considered this matter at its meeting on 30 May 2006 
and had agreed to revert to it.  At the present m eeting, he drew attention to the communication from 
Korea contained in document WT/DS336/5, and invited the representative of Korea to speak. 
78. The representative of Korea  said that, as mentioned at the special DSB meeting on 
30 May 2006, Korea had grave concerns over the countervailing measures taken by Japan against 
dynamic random access memories ("DR AMS") produced by Hynix in Korea.  Japan's imposition of a 
countervailing duty on imports of the DRAMS was in consistent with Japan's  obligations under the 
relevant provisions of the GATT 1994 and the SC M Agreement.  Among other things, Japan had 
failed to demonstrate the existence of a financia l contribution by the Government of Korea with 
respect to the transactions at issue in the subsidy i nvestigation.  Japan had al so failed to demonstrate 
that a benefit had been conferred on the Korean ma nufacturer, given available market benchmarks and 
the circumstances of financial restructuring.  Fo r these reasons, Korea again requested that the DSB 
establish a panel pursuant to Article 6 of the DSU, w ith standard terms of reference, to examine the 
matters described in Korea's panel request, which ha d been circulated to Members on 19 May 2006.  
Finally he said that it was regrettable that it ha d not been possible to solve this matter amicably 
between Japan and Korea. 
79. The representative of Japan  said that his country regretted that Korea had chosen to pursue 
this matter further by making its second request fo r the establishment of a panel.  As Japan had 
pointed out at the DSB meeting held on 30 May 2006 , when Korea had made its first request for the 
establishment of a panel in this case, Korea's request  did not sufficiently indicate the legal basis of its 
complaint to present the problems it alleged clearly.  There were several claims in Korea's request for 
the establishment of a panel which were ambiguous ly written, and did not specify which of the 
multitude of obligations Japan had allegedly violat ed.  Specifically, claims 9, 10 and 15 of Korea's 
request did not provide a brief summary of the lega l basis of the complaint sufficient to present the 
problem clearly within the meaning of Article 6.2 of the DSU.  Japan reserved the right to object to 
any claims Korea would make that had not been  sufficiently presented in its request for the 
establishment of a panel, and which would be inc onsistent with the WTO Agreements, including the 
points just raised.  In any event,  Japan was certain that the panel would find that the countervailing 
measures against the subsidies regarding DRAMS from Korea comply with the WTO Agreements. 
80. 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. 
81. The representatives of China , the European Communities  and the United States  reserved their 
third-party rights to participate in the Panel's proceedings WT/DSB/M/215 
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 6. United States – Anti-dumping measure on shrimp from Ecuador   
(a) Request for the establishment of a panel by Ecuador (WT/DS335/6) 
82. The Chairman
 drew attention to the communication from Ecuador contained in document 
WT/DS335/6 and invited the represen tative of Ecuador  to speak. 
83. The representative of Ecuador  said that on 8 June 2005, Ecua dor had submitted to the DSB its 
request for the establishment of a panel to resolve its dispute with the United States regarding the US 
Department of Commerce's policy that applied the so-called "zeroing" of negative anti-dumping 
margins in its original investigations.  The Un ited States applied this "zeroing" policy in its 
investigation of certain frozen warm-water shrimp  from Ecuador.  Had the United States not applied 
this policy, the Department of Commerce woul d not have issued an anti-dumping order in 
February 2005 because it would not have found dump ing by any Ecuadorian shrimp exporter.  The 
anti-dumping order had an extremely negative impact  on Ecuador's shrimp industry, which was its 
third largest export industry and generated significant employment opportunities in many impoverished areas of Ecuador where few employment  alternatives were available.  Accordingly, 
Ecuador requested the DSB to establish a panel at the present meeting because it strongly believed 
that the practice of "zeroing" was inconsistent w ith the Anti-Dumping Agreement.  On two previous 
occasions, the Appellate Body had found that "zeroing"  was inconsistent with Article 2.4.2 of the 
Anti-Dumping Agreement.  The first finding related to a complaint by Canada on softwood lumber 
and the second was a case brought by the EC on a variety of steel products.  Ecuador was, therefore, quite confident that its position was correct and that it  would be vindicated by the Panel.  Ecuador had 
held several consultations with the United States ove r the past few months and these had been fruitful 
in narrowing their differences.  Nevertheless, the pa rties had not yet been able to reach a mutually 
satisfactory solution so that was why Ecuador was pr oceeding at the present meeting with its  request 
for a panel. 
84. The representative of the United States
 noted that Ecuador's statement had alluded to 
discussions between the United States and Ecuador, and indeed, for quite some time, the United States 
had been working with Ecuador in an effort to reso lve this matter.  In light of this ongoing effort, the 
United States believed that this panel request was pr emature.  As a result, the United States was not in 
a position to agree to the establishment of a panel at this time. 
85. The representative of India  said that his country wished to support the request by Ecuador for 
the establishment of a panel in this dispute.  He noted that the use of "zeroing" in final margin 
determination by the United States had been repeat edly declared WTO-inconsistent by the various 
panels and the Appellate Body, two of  which had been mentioned in the panel request.  In this light, it 
was unfortunate that the Unites States had not u sed the opportunity available during the consultation 
period, which was more than three times the mini mum required under the DSU in this dispute, to 
resolve the dispute to the mutual satisfaction of th e parties, by taking measures consistent with the 
WTO. 
86. The DSB took note  of the statements and agreed  to revert to this matter.  WT/DSB/M/215 
 Page 21 
 
 
  7. European Communities – Export subsidies on sugar 
(a) Joint request by Australia and th e European Communities (WT/DS265/36) 
(b) Joint request by Brazil and the European Communities (WT/DS266/36) 
(c) Joint request by Thailand and the European Communities (WT/DS/283/17) 
87. The Chairman  proposed that the three sub-items to wh ich he had just referred be considered 
together since they pertained to the same matter.  First, he drew attention to the communication from 
Australia and the European Communities contained in document WT/DS265/36 and invited the representative of Australia to speak. 
88. The representative of Australia
 said that in document WT/DS265/36 Australia and the 
European Communities had informed the DSB of an Understanding reached with respect to the 
dispute: "EC – Export Subsidies on Sugar" (WT/DS265).  As set out in that document, Australia 
requested, jointly with the EC, that the DSB adopt the draft decision contained in WT/DS265/36.  The 
Understanding reached between Australia and the EC and the requested DSB's decision had been designed to preserve the respective rights of both par ties to the dispute at this time.  Consequently, 
Australia requested, jointly with the EC, that the DSB take note of the Understanding reached 
between Australia and the EC, as set out in doc ument WT/DS265/36 and adopt the draft decision 
contained in that document. 
89. The Chairman
 drew attention to the communication from Brazil and the European 
Communities contained in document WT/DS266/36 and invited the representative of Brazil to speak. 
90. The representative of Brazil  said that on 22 May 2006, the reasonable period of time for 
implementation of the DSB's recommendations in this  dispute had expired.  The measures the EC had 
taken to comply, in its view, with those recommend ations had been referred to in the EC's status 
reports submitted to the DSB on the matter at issue.  It was not necessary to cite them again.  Brazil 
considered, however, that it was necessary to reaffi rm that Brazil was not satisfied that the EC had 
implemented the DSB's recommendations and rulings in  this dispute within the reasonable period of 
time.  He then referred Members to his previous statement made at the present meeting on the reasons 
sustaining Brazil's position. 
91. In document WT/DS266/36, Brazil and the EC had informed the DSB of an Understanding 
reached with respect to the present case.  The Understanding clearly identified the divergence of 
views between Brazil and the EC on whether compliance had been achieved in this dispute.  It also 
provided for the order in which the procedural steps to resolve that divergence should be taken by the 
parties to the dispute.  In addition, and without pr ejudice to other formats used by Members in similar 
situations in the past, the Understanding set out th at Brazil requested, jointly with the EC, that the 
DSB adopt the draft decision contained therein.  As Brazil considered that the full appreciation of the 
questions related to compliance in this dispute w ould take longer than the 30-day period set out in 
Article 22, the Understanding and the requested DSB decision were designed to preserve the 
respective rights of both parties at this point in time. 
92. In this regard, as set out in document WT/D S266/36, Brazil respectfully requested, jointly 
with the EC, that at the present meeting the DSB "take note of the Understanding reached between 
Brazil and the European Communities and agr ee that, in the event that the DSB adopts 
recommendations and rulings that measures taken by  the European Communiti es to comply with the 
prior recommendations and rulings of the DSB do not  exist or are inconsistent with a covered 
agreement, the DSB shall grant Brazil upon its request  authorization to suspend concessions or other 
obligations pursuant to Article 22 of the DSU unless (i) the DSB decides by consensus not to do so, or WT/DSB/M/215 
Page 22  
 
 (ii) the European Communities obj ects to the level of suspension proposed or claims that the 
principles and procedures set forth in Article 22.3 of the DSU have not been followed, in which case the matter shall be referred to arbitr ation under Article 22.6 of the DSU". 
93. The Chairman
 drew attention to the communicat ion from Thailand and the European 
Communities contained in document WT/DS283/17 a nd invited the representative of Thailand to 
speak. 
94. The representative of Thailand  said that his country appreciated the cooperation of the EC in 
concluding the Understanding and the joint requ est for action submitted to the DSB as document 
WT/DS/283/17 at the present meeting.  As indi cated under a previous agenda item, Thailand 
continued to have serious concerns about th e manner in which the EC had approached the 
implementation of the DSB's recommendations and rulings in the Sugar dispute, and Thailand 
continued to consider all options in this regard.  To this end, Thailand resp ectfully requested, jointly 
with the EC, that the DSB:  "take note of th e Understanding reached be tween Thailand and the 
European Communities and agree that, in the even t that the DSB adopts recommendations and rulings 
that measures taken by the European Communities to comply with the prior recommendations and 
rulings of the DSB do not exist or are inconsistent  with a covered agreement, the DSB shall grant 
Thailand upon its request authorization to suspen d concessions or other obligations pursuant to 
Article 22 of the DSU unless (i) the DSB decides by consensus not to do so, or (ii) the European 
Communities objects to the level of suspension proposed  or claims that the principles and procedures 
set forth in Article 22.3 of the DSU have not been  followed, in which case the matter shall be referred 
to arbitration under Article 22.6 of the DSU". 
95. The representative of th e European Communities  said that as had already been apparent at the 
previous DSB meeting, the parties seemed to disag ree over the EC having achieved compliance in this 
dispute.  While the EC regretted this fact, it was, of  course, the legitimate right of the complainants to 
safeguard their rights in this respect.  Similarly, the EC had a legitimate interest to protect itself 
against any unilateral determination of non-compliance, which would be at odds with the rules of the 
DSU and the dispute settlement practice of the last seven years.  For this reason, the parties had 
concluded standard "sequencing" agreements on 8 June 2006, which had been notified to the DSB and 
circulated to Members.  The EC was satisfied to have concluded these standard agreements, as the EC 
was also pleased about the constructive dialogue which was taking place between the parties on the substantive questions of implemen tation in this dispute.  The proposed DSB decisions would endorse 
those agreements and provided protection against c oncerns that might exist due to some ambiguous 
deadlines in the DSU.  The EC would, therefore,  be pleased if the DSB would adopt the proposed 
decisions at the present meeting. 
96. The DSB took note
 of the statements. 
97. The Chairman  proposed that:  "The DSB take note of the Understanding reached between 
Australia and the European Communities and ag ree that, in the event that the DSB adopts 
recommendations and rulings that measures taken by  the European Communiti es to comply with the 
prior recommendations and rulings of the DSB do not  exist or are inconsistent with a covered 
agreement, the DSB shall grant Australia upon its re quest authorization to suspend concessions or 
other obligations pursuant to Article 22 of the DS U unless the DSB decides by consensus not to do so, 
or the European Communities objects to the level of suspension proposed or claims that the principles 
and procedures set forth in Article 22.3 of the DSU have not been followed, in which case the matter 
shall be referred to arbitration under Article 22.6 of the DSU." 
98. The DSB so agreed .  WT/DSB/M/215 
 Page 23 
 
 
  99. The Chairman  proposed that:  "The DSB take note of the Understanding reached between 
Brazil and the European Communities and agr ee that, in the event that the DSB adopts 
recommendations and rulings that measures taken by  the European Communiti es to comply with the 
prior recommendations and rulings of the DSB do not  exist or are inconsistent with a covered 
agreement, the DSB shall grant Brazil upon its request  authorization to suspend concessions or other 
obligations pursuant to Article 22 of the DSU unles s the DSB decides by consensus not to do so, or 
the European Communities objects to the level of su spension proposed or claims that the principles 
and procedures set forth in Article 22.3 of the DSU have not been followed, in which case the matter 
shall be referred to arbitration under Article 22.6 of the DSU." 
100. The DSB so agreed . 
101. Finally, the Chairman  proposed that:  "The DSB take note of the Understanding reached 
between Thailand and the European Communities and agree that, in the event that the DSB adopts 
recommendations and rulings that measures taken by  the European Communiti es to comply with the 
prior recommendations and rulings of the DSB do not  exist or are inconsistent with a covered 
agreement, the DSB shall grant Thailand upon its request authorization to suspend concessions or 
other obligations pursuant to Article 22 of the DS U unless the DSB decides by consensus not to do so, 
or the European Communities objects to the level of suspension proposed or claims that the principles 
and procedures set forth in Article 22.3 of the DSU have not been followed, in which case the matter 
shall be referred to arbitration under Article 22.6 of the DSU."  
102. The DSB so agreed . 
8. Proposed nomination for the indicative list of governmental and non-governmental 
panellists (WT/DSB/W/322) 
103. The Chairman  drew attention to document WT/DSB/W /322, 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/322. 
104. The DSB so agreed . 
__________