WORLD TRADE  
ORGANIZATION  TN/DS/25 
21 April 2011 
 (11-2082) 
Dispute Settlement Body 
Special Session  
 
 
 
SPECIAL SESSION OF THE DISPUTE SETTLEMENT BODY 
 
Report by the Chairman, Ambassador Ronald Saborío Soto,   
to the Trade Negotiations Committee  
 
 1. In my last written report on 22 March 2010
1, I informed the TNC that we had completed a 
first round discussion of all issues contained in the consolidated draft legal text contained in the document that I had issued under my own respon sibility in July 2008, which was endorsed by 
participants as basis for our further work in November 2008.
2 
2. Since May 2010, as anticipated in my last re port, we initiated a more intensive process, 
building on earlier work.  So far, we met seven times in this context, based on a combination of 
meetings in variable geometry depending on th e issue being discussed. On  each occasion, I conducted 
informal consultations with interested delegati ons over the course of a week, with an open-ended 
informal meeting of the Special Session at the end of the week to report on  the work to the entire 
Membership. In addition, delegati ons have continued to work in dividually and among themselves to 
advance discussions further. 
3. In the context of our continuing work and in advance of the upcoming informal meeting of 
the TNC on 29 April, I would like to take the opportunity to provide an update on the state of our ongoing work.  The July 2008 text has brought focus to the discussion and provided a unified basis for 
our continued work.  Participants have engaged in our recent work in a constructive spirit, and we 
have made measurable progress in a number of areas.  This is reflected in the summaries attached to 
this Report, which reflect the oral reports I presente d at the end of each week of meetings since May 
2010.
3  Specifically, we are close to an understanding  on draft legal text on sequencing, we have 
identified key points of convergence on post-retaliati on, and we have conducte d constructive work on 
third-party rights, timesavings and various aspects of  effective compliance.  We have also discussed 
certain aspects of flexibility and Member-control, and in that context, made substantial progress 
towards draft legal text on the suspension of panel proceedings. 
4. Nonetheless, much work remains to be done in or der to reach agreement.  As described in my 
July 2008 report, and as confirmed recently, the work has been conducted on the assumption and 
understanding that all issues must progress in parallel, and we have not yet completed, in this phase of 
the negotiaitons, discussion on all of the issues contai ned in this text.  Further work is therefore 
required in order to complete this phase of the ne gotiation.  In addition to completing the work on the 
issues referred to above, we will need to discuss al so panel composition, remand, mutually agreed 
solutions, strictly confidential information, transparency and amicus curiae  briefs and developing 
country interests, including special and differen tial treatment.  A successful conclusion to the 
                                                      
1 See TN/DS/24 of 22 March 2010. 
2 See TN/DS/23, para. 2. This text was initially circulated as an informal document (JOB(08)/81) on 
18 July 2008 and is reproduced as Appendix A below. 
3 See the Chairman's summari es of recent work, reproduced  as Appendix B below.  TN/DS/25 
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  negotiations will also require additional flexib ility in Members' positions. Based on my recent 
consultations, my understanding is that participants are fully co mmitted to continuing to work 
constructively for the successful completion of th is work, toward a rapid conclusion of the 
negotiations.  
 
_______________ 
 
  TN/DS/25 
 Page 3 
 
 
  LIST OF APPENDICES 
 
CONTENTS PAGE 
A Document JOB(08)/81 dated 18 July 2008, Special Session of the Dispute 
Settlement Body - Report by the Chairman A-1 
B Informal DSB Special Session Meetings (May 2010 to April 2011) - 
Chairman's Summaries of Recent Work B-1 
 
   TN/DS/25 
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  APPENDIX A 
 
JOB(08)/81  18 July 2008  
 
SPECIAL SESSION OF THE DISPUTE SETTLEMENT BODY 
 
Report by the Chairman  
 
 
Introduction 
 1. Paragraph 30 of the Doha Ministerial Declar ation mandated "negotiations on improvements 
and clarifications of the Dispute Settlement U nderstanding".  In Hong Kong, Ministers further 
instructed us to "continue to work towa rds a rapid conclusion" of these negotiations. 
2. We have worked on the basis of revised proposals submitted by Members and groups of 
Members, reflecting drafting improvements as well as an effort to seek convergence.  Since the 
beginning of last year, we have ha d two complete rounds of consultations on all issues on this basis.  I 
believe that each of this rounds produced progress and further convergence on a number of proposals. 
3. As announced at the end of our most recent c onsultations, I now issue this document under 
my own responsibility to take stock of our recent work, and to provide a basis for its continuation 
towards a rapid conclusion as instructed by Ministers. 
4. The first part of this document provides an overall assessment of the state-of-play of our 
work, and highlights some general considerations that I believe can provide useful guidance to 
facilitate our further work.  The second part of this  document is a consolidated draft legal text, based 
on the contributions of Members as well as my own assessments (Annex 1).  This draft legal text follows the structure of the DSU and is intended to  provide a basis for our further work.  Finally, a 
thematic overview of the issues under discussion is included in Annex 2, summarising my perceptions 
on the progress accomplished so far and outlining possible orientations of our future work. 
Overall assessment 
5. Perhaps the most significant achievement in our work over the past year and a half has been 
the clarification and consolidation of the issu es under consideration.  Members and groups of 
Members have engaged in an earnest exercise of reviewing and revising their proposals, and presented 
revised versions of their proposals for improvements and clarifications of the DSU.  These revised 
proposals take into account the comments of other participants on earlier versions of the various 
proposals.  This effort, which has been suppor ted by informal Member-driven processes, has now 
provided us with a sound basis for the conclusion of work. 
6. Nonetheless, as I indicated recently, it appears to  me that not all the issues under discussion 
have reached the same stage of maturity at this poi nt.  In general, the leve l of convergence on various 
issues still varies significantly.  On a number of issu es, both the concepts and the relevant legal texts 
have been extensively discussed, and it is relativ ely easy to foresee, on the basis of the texts under 
consideration, where the options lie and what parame ters might guide the choices.  On the other hand, 
there are also issues in respect of which there has been only limited focus on specific legal text so far, 
and further work is clearly needed for the text (a nd sometimes also the underlying concepts) to reach a 
comparable level of maturity.  Finally, there are issu es in respect of which in terested delegations have 
been working among themselves towards providing improved text as basis for our future work, 
reflecting an effort to take into account comment s received from other delegations and attempts to 
build convergence towards an acceptable outcome.  I have been encourag ing and supporting such TN/DS/25 
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  efforts, which I believe have been one of the mo st constructive and productive aspects of our recent 
work. 
7. I have taken into account this overall context in  preparing this document.  My key objective 
has been to provide us with the best possible basis for our future work, and to propose as much as 
possible a basis from which we can advance toward s the identification of options on the different 
issues that would facilitate a rapid and successful conclusion of these negotiations, as mandated by 
Ministers. 
8. Finally, I would note that in this negotiation,  it has always been and remains clear, that a 
successful outcome will depend not only on the ability to find balanced compromises between 
different positions, but also on the ability to devel op specific solutions that would be acceptable to all 
Members.  This places a special onus on us to conti nue to work towards agreem ent in each area on its 
own merits as well as in light of overall balance.  This process is and remains principally Member-
driven, and serves the common systemic goal of improving and clarifying the DSU.  
General considerations 
9. In preparing this document, I have been guide d by a number of considerations.  Members' 
positions in substantive discussions to date, and my assessment of where convergence and balance 
might be found in light of these discussions, form the primary basis of any proposed texts and approaches. 
10. In addition, the following general considerati ons may provide useful guidance in our work, 
and I have aimed to take these considerations into  account in proposing ways forward.  To a large 
extent, these reflect approaches already suggested and applied by particip ants in preparing and 
improving their contributions to the negotiations.  They may also constitute helpful guidance for the 
improved effectiveness of our future work: 
(a) limit any drafting changes to what is n ecessary to achieve the intended purpose (for 
example, seeking to avoid the inadvertent introduction of new concepts not necessary 
for the proposed improvement or clarifi cation), and take into consideration the 
drafting guidelines suggested by several partic ipants to ensure the greatest level of 
clarity possible (e.g. use of active voice and singular as well as the same term to denote the same concept); 
(b) ensure that drafting consistency is maintain ed throughout the DSU (including internal 
consistency between unchange d existing DSU text and proposed new or amended 
text, internal consistency between different  parts of proposed new or amended text; 
and avoiding unnecessary duplications throug h references where possible);  and 
(c) bear in mind the procedural coherence of th e system (including consideration for the 
manner in which a clarification or improveme nt is introduced would work in practice, 
ensuring that intended clarifications or im provements are not an inadvertent source of 
further procedural complexities or uncertainti es, and attention to the continued overall 
coherence of the procedures). 
11. As we approach the final phase of our work, I believe it would also be necessary to allocate 
some time to a general review of draft legal text under consideration, in order to: (1) clarify the form 
in which improvements or clarifications to the DSU s hould be agreed to;  (2) clarify the conditions for  
giving legal effect to such improvements or clarifications, including the possible need for transitional provisions;  and (3) conduct a general review of  drafting consistency throughout the DSU, as 
described under (b) above.  TN/DS/25 
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  Draft legal text 
12. In light of the diverse levels of maturity in  the discussions as well as the varying levels of 
convergence achieved to date on the various prop osals, this document does not seek to propose a 
single unified approach to our future work for all issues, or to propose clean un-bracketed text in all 
areas of our work.  Rather, I have had to adopt a flexible approach taking into account the diverse 
levels of maturity and convergence reached in the various areas of our work. 
13. In some areas, I have found it useful to propose specific draft text (with or without brackets as 
appropriate), reflecting my assessment, at this stage of the negotiations, of where possible agreement might be sought.  Where competing approaches ha ve been under discussion I have attempted to 
propose a single approach for further consideration where possible.  Where relevant, I have also 
proposed drafting improvements simply to ensure  drafting consistency, taking into account the 
general considerations highlighted above.  Where I did not perceive a sufficient level of convergence 
to allow me to propose clean un-bracketed text, I did not  attempt to propose such text at this stage.  In 
such cases, I have simply placed square bracket s around the text proposed by Members, sometimes 
with proposed drafting improvements to facilitate further work.  These different approaches reflect 
my assessment of what would be the approach most  likely to lead to a constructive advancement of 
our work, based on the level of maturity and conve rgence achieved to date, in each area and overall. 
14. The entirety of the proposed draft legal te xt in Annex 1 is presented under my own 
responsibility and on the assumption and understanding th at all issues must continue to progress in 
parallel, and that nothing is agreed until everything is  agreed.  While I suggest that this consolidated 
draft legal text form the basis and focus of our inte nsive work in the next phase of the negotiations, it 
is understood that it is based on Members' proposals. 
Thematic overview 
15. Annex 2 contains a thematic ove rview which is intended to re flect my perceptions of the 
state-of-play on the various issues at this point in  time and identify possible ways forward for our 
future work. It also reflects, where relevant , my own observations in light of the general 
considerations highlighted above.  This overview al so serves a transparency purpose, although it is 
not intended to reflect each and every detail of the discussions to date.   
16. For the purposes of this overview, I have  grouped my comments around the following 
thematic categories: 
– Third party rights 
– Panel composition 
– Remand 
– Mutually agreed solutions 
– Strictly confidential information 
– Sequencing 
– Post-retaliation 
– Transparency and amicus curiae  briefs 
– Timeframes 
–
 Developing country interests, including special and differential treatment 
– Flexibility and Member control 
– Effective compliance 
_______________  TN/DS/25 
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  Annex 1: Consolidated Draft Legal Text 
 
(proposed as a basis for further work) 
 
 
 
  
This text is based on the contributions of Me mbers, and also incorporates some proposals by 
me.  It is presented under my own responsibility, as a basis for further work.  
 
 Proposed amendments to the DSU are shown in  the sequence of the provisions of the DSU, 
and only the DSU provisions to which changes are pr oposed are reflected.  Proposed amendments to 
the DSU are shown first, followed by proposed D ecisions by the Dispute Settlement Body (DSB).  
 
 Proposed deletions to the current DSU text are reflected in strikeout
 text.  Proposed new text 
is in bold .  For clarity, proposed footnotes are identifie d with letters rather than numbers, and would 
be renumbered as appropriate if agreed to.   
 
Single square brackets reflect text requiring furt her work, decision or confirmation.  In some 
cases, square brackets are used to re flect alternative texts for consideration.  Italicised text in double 
square brackets indicates text on which no conve rgence is apparent at this stage.   
  Proposed textual changes by the Chairman are shaded in grey.  Where proposed text by the 
Chairman involves deletions to text proposed by Members, this is not
 expressly reflected in this text.  
 
 
  
I. PROPOSED AMENDMENTS TO THE DSU 
 
 
Article 1 
 
Coverage and Application 
 
2.    The rules and procedures  of this Understanding shall apply subject to such special or 
additional rules and procedures on dispute settlement contained in the covered agreements as 
are identified in Appendix 2 to this Understanding.  [[Article 8bis shall apply to disputes 
involving safeguard measures.]]   To the extent that there is a difference between the rules and 
procedures of this Understanding and the special or additional rules and procedures set forth in 
Appendix 2, the special or additional rules and procedures in Appendix 2 shall prevail.  In 
disputes involving rules and procedures under more than one covered agreement, [[or under 
one or more covered agreements and Article 8bis]]  if there is a conflic t between special or 
additional rules and procedures of such agreemen ts under review, and where the parties to the 
dispute cannot agree on rules and procedures within 20 days of the establishment of the panel, 
the Chairman of the Dispute Settlement Body prov ided for in paragraph 1 of Article 2 (referred 
to in this Understanding as the "DSB"), in cons ultation with the parties to the dispute, shall 
determine the rules and procedures to be followed within 10 days after a request by either 
Member.  The Chairman shall be guided by the pr inciple that special or additional rules and 
procedures should be used where possible, and the rules and procedures set out in this Understanding should be used to the extent necessary to avoid conflict. 
  TN/DS/25 
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Article 3 
 
General Provisions 
 
6. Each party [to a mutually agreed solution] with respect  to a matters  formally  
raised under the consultation and  dispute settlement provisions of the covered agreements shall  
notify the detailed terms of such solution be notified  to the DSB and the  relevant Councils 
and Committees, .  The notification shall be made in writing and submitted within 10 days 
after reaching th e solution.  where a Any Member may raise any point relating there to the 
solution in the DSB and the relevant Councils and Committees . 
Article 4 
 
Consultations 
 
[6a. Within 60 days after the date of receipt  of the request for consultations by the 
Member to which the request is made, and ev ery 60 days thereafter, a Member that made 
the request for consultations shall notify to the DSB as to the status of the consultations until that Member notifies a mu tually agreed soluti on pursuant to Article 3 paragraph 6, 
requests the establishment of a panel pursuant  to Article 6 or notifies to the DSB in 
writing that it no longer wishes to pursue th e matter.  This paragraph does not apply to 
consultations that started before [date to be inserted].] 
 
7. If the consultations fail to settle a dispute within 60
 [30] days after the date of receipt 
of the request for consultations, the complaining party may request the establishment of a panel.  
The complaining party may request a panel during the 60  [30]-day period if the consulting 
parties jointly consider that consultations have failed to settle the dispute.  [This 30-day period 
shall be extended by up to 30 days upon the request of a developing country Member that 
is a consulting party.]  
 
10. During consultations Members should  shall  give special attention to the  particular 
problems and interests of the developing country Members. 
 
[10bis. [In a dispute between a developing  country Member and a developed country 
Member, the developing country Member shall be provided every opportunity to present 
requests to the developed country Member on any matter relating to the holding of the 
consultations or the settlement of the dispute,  taking into account the particular problems 
and interests of the developing country Member][Where the party complained against is a 
developing country Member, the compla ining party shall accord sympathetic 
consideration to any request from that Member to give special attention to any particular 
problems and interests it has identified, in rel ation to the holding of the consultations or 
to the settlement of the dispute].  Should the developed country Member reject any parts 
of such requests, it shall provide the reasons in writing, together with an explanation of 
how it has given special attention to the particular problems and interests of the 
developing country Member.] 
 
11. (a) Whenever a Member other than the cons ulting Members considers that it has 
a substantial trade interest in consultations being held pursuant to paragraph 1 of 
Article XXII of GATT 1994, paragraph 1 of Article XXII of GATS, or the 
corresponding provisions in other covered agreements4, such Member may notify the 
consulting Members and the DSB in writing , within 10 days after the date of the 
circulation of the request for consultations under said Article, of its desire to be joined 
in the consultations. 
________ 
4 The corresponding consultation provisions in  the covered agreements are listed 
hereunder:  Agreement on Agriculture, Articl e 19;  Agreement on the Application of 
Sanitary and Phytosanitary Measures, pa ragraph 1 of Article 11;  Agreement on TN/DS/25 
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  Textiles and Clothing, paragraph 4 of Arti cle 8;  Agreement on Technical Barriers to 
Trade, paragraph 1 of Article 14;  Agreem ent on Trade-Related Investment Measures, 
Article 8;  Agreement on Im plementation of Article VI of GATT 1994, paragraph 2 of 
Article 17;  Agreement on Implementation of Article VII of GATT 1994, paragraph 2 
of Article 19;  Agreement on Preshipment In spection, Article 7;  Agreement on Rules 
of Origin, Article 7;  Agreement on Impo rt Licensing Procedures, Article 6;  
Agreement on Subsidies and Countervailing Measures, Article 30;  Agreement on 
Safeguards, Article 14;  Agreement on Trade-Related Aspects of Intellectual Property 
Rights, Article 64.1;  and any corresponding consultation provisi ons in Plurilateral 
Trade Agreements as determin ed by the competent bodies of each Agreement and as 
notified to the DSB. 
 
(b) Such Member shall be joined in the consultations, provided that  [unless] the 
Member to which the request for consultations was addressed agrees  [notifies the 
applicant Member and the DSB in writing wi thin 7 days after the date of receipt 
of the request to be joined in the consultations]  that the claim of substantial interest 
is [not]  well-founded.  In that event they shall so inform the DSB.  
 
(c) If the  a request to be joined in the consu ltations is not accepted, the applicant 
Member shall be free to request consultations under paragraph 1 of Article XXII or 
paragraph 1 of Article XXIII of GATT 1994, paragraph 1 of Article XXII or 
paragraph 1 of Article XXIII of GATS, or the corresponding provisions in other covered agreements. 
 
Article 6 
 
Establishment of Panels 
 1. If the complaining party so requests
a, the DSB shall establish  a panel shall be 
established at the latest  at the DSB  meeting following that  at which the request first appears as 
an item on the DSB's agenda, unless at that meeting  the DSB decides by consensus not to 
establish a panel.5 
_______________  
[a Where the party complained against is a developing count ry Member, the complaining 
party shall accord sympathetic consideration to a request from that Member to postpone 
the establishment of a panel.  Such a request shall be made not less than five days prior to 
the DSB meeting at which the request for panel establishment appears on the DSB's 
[proposed] agenda, and the complaining party shall respond to such a request prior to the commencement of that DSB meeting.] 
5 [In the event that the DSB decides not to establish a panel or the complaining party 
decides to postpone the establishment of a panel, i] f the complaining party so requests, a 
meeting of the DSB shall be convened for this  the purpose of [making a subsequent request 
for panel establishment]  [establishing the panel]  within 15 days of the request, provided that 
at least 10 days' advance notice of the meeting is given.  
 
2. The request for the establishment of a panel shall be made in writing.  It shall indicate 
whether consultations were held, identify the sp ecific measures at issu e and provide a brief 
summary of the legal basis of the complaint suff icient to present the problem clearly.  In case 
the applicant requests the establishment of a panel with other than standard terms of reference, 
the written request shall include the proposed  text of special te rms of reference.  [Where the 
request for establishment of a panel is made  [[by a developed country Member]]  involving a 
measure taken by a developing country Member, the [[developed country]]  Member shall, 
in addition, give details as to how it has give n special attention to the particular problems 
and interests of the developing  country Member as required in Article 4.10 and how it has 
taken into account the relevant provisions on  differential and more favourable treatment 
for developing country Members in  the relevant covered agreements.] 
  TN/DS/25 
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  Article 8 
 
Composition of Panels 
 
2. Panel members should be selected with a view to ensuring the independence of the members, [expertise to examine the kind of matter at issue in the dispute],  a sufficiently 
diverse background and a wide spectrum of [relevant]  experience [and expertise].  
 
 
[[Article 8bis 
 
Accelerated time-frames for disp utes on safeguard measures 
 1. The following accelerated time-frames shall apply to disputes on safeguard 
measures unless otherwise extended by mutual  agreement of the parties to the dispute. 
 2. If the consultations fail to settle a dispute under Article 4 within 30 days of the 
request for consultations, any party to such consultations may refer the matter to the Dispute 
Settlement Body for the immediate establishm ent of a panel, unless the DSB decides by 
consensus not to establish a panel. 
 
3. The time-frames in the Working Proced ures of item 12 of Appendix 3 and in 
paragraph 4 of Article 16 shall be halved. 
 
4. The accelerated time-frames in this Ar ticle shall not apply to a dispute if a 
developing country party to that dispute requ ests the application of the standard DSU time-
frames.]] 
 
Article 10 
 
Third Parties 
 
2. (a) Any Member having a substantial interest in a matter before a panel and 
having notified its interest to  the DSB (referred to in this Understanding as a "third 
party")  may participate as a third party before a panel by notifying its interest to 
do so to the DSB and  to each party to the dispute [no later than 10 days] after the 
establishment of the panel.  shall have an opportunity to be heard by the panel and to 
make written submissions to t he panel.  These submissions shall also be given to the 
parties to the dispute and shall be reflected in the panel report . 
 
(b) Each third party has the right to: 
 
(i) be present at the substantiv e meetings of the panel with the 
parties to the dispute precedin g the issuance of the interim 
report to the parties, except for portions of such meetings when 
information [designated by a Member as strictly confidential  in 
accordance with the procedures referred to in paragraph 3 of 
Article 18]  is discussed; 
 
(ii) make a written submission prio r to the first substantive meeting; 
 
(iii) make an oral statement to the panel, and respond to questions at 
a session of the first substant ive meeting set aside for that 
purpose;  and 
 
(iv) respond in writing to questions arising out of such a session. 
 
(c) The panel may grant third parties rights additional to those listed in TN/DS/25 
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  paragraph (b) [only upon agreement by ][after consulting] the parties to 
the dispute. 
 
3. (a) Each party to the disput e shall make available to each third party its 
[written] submissions to the panel (other  than any submission made subsequent 
to the issuance of the interim report to the parties) at the time such submissions 
are made, except for information [designate d by a Member as strictly confidential 
in accordance with the procedures ref erred to in paragraph 3 of Article 18].[b] 
 
_______________   
[b This provision does not preclude third parties from receiving information 
designated by a Member as strictly confidential it if this is expressly provided 
for in the specific procedures adopted by the panel in accordance with 
paragraph 3 of Article 18 for the purposes of that dispute.]  
 
(b) Each third party shall make available its submissions to each party to the 
dispute and to every other third party at  the time such submissions are made.   
 
(c) The panel shall reflect the submissi ons of third parties in its report . 
 
 
 
Article 12 
 
Panel Procedures  
 
7. Where the parties to the dispute have  failed  to develop a mutually satisfactory 
solution, the panel shall submit its findings in the form of a written report to the DSB.  In such 
cases, the report of a  panel shall set out in its report  the findings of fact, the applicability of 
relevant provisions and the basic rationale behind any findings and recommendations that it 
makes.  [The panel shall not include in its repor t circulated to the Members any finding, 
any finding together with its basic rationale, [[or a basic rationale behind a finding (where 
there is more than one basic rationale behind the finding),]]  that the parties to the dispute 
have agreed is not to be included.]   Where a settlement of the matter among  the parties to the 
dispute has been found  have reached a [mutually satisfactory] solution to the matter , the 
report of the panel shall be confined to a brie f description of the case and to reporting that a 
solution has been reached.  
10. In the context of consultations involving a measure taken by a developing-country 
Member, the parties may agree to extend the periods established in paragraphs 7 and 8 of 
Article 4.  [ [[Where]]  the consulting Member [[is a developed country, it]]  shall agree to a 
request for an extension of the periods establis hed in paragraphs 7 and 8 of Article 4 of up 
to 30 days and 15 days respectively.]   If, after the relevant period has elapsed, the consulting 
parties cannot agree that the consultations have concluded, the Chairman of the DSB shall 
decide, after consultation with the parties, whether to extend the relevant period and, if so, for how long.  In addition, in examining a complaint against a developing country Member, the 
panel shall accord
 allow  sufficient time for the developing country Member to prepare and 
present its argumentation  [submissions.  In general, the panel should extend the timeframes 
in Appendix 3 by two weeks for the presentation by the developing country Member 
respondent of its first written submission and by one additional week  for the presentation 
of written submissions or presentations at each subsequent stage] .  The provisions of 
paragraph 1 o f Article 20 and paragraph 4 of Article 21 are not affected by any action pursuant 
to this paragraph. 
 12. The panel may suspend its work at any time at the request of the complaining party for 
a period not to exceed 12 months.  The panel shall suspend its wo rk where the parties to the 
dispute so agree.   In the event of [such] a suspension, the time-frames set out in paragraphs 8 
and 9 of this Article, paragraph 1 of  Article 20, and paragraph 4 of Article 21 shall be extended  TN/DS/25 
 Page A-9 
 
 
  by the amount of time that the work was suspended.  If the work of the panel has been 
suspended for more than 12 months, the authority for establishment of the panel shall lapse.  
Article 13 
 
Right to Seek Information 
 
1. Each panel shall have the right to s eek information and technical advice from any 
individual or body which it deems appropriate.  However, before a panel seeks such 
information or advice from any individual or body within the jurisdiction of a Member it shall inform the authorities of that Member.  A Member should respond promptly and fully to any 
request by a panel for such information as th e panel considers necessa ry and appropriate.  
Confidential information which is provided shall not be revealed without formal authorization from the individual, body, or authorities of the Member providing the information. 
 
2. Panels may seek information from any re levant source and may consult experts to 
obtain their opinion on certain asp ects of the matter.  With respect  to a factual issue concerning 
a scientific or other technical matter raised by a party to a dispute, a panel may request an 
advisory report in writing from an expert review group.  Rules for the establishment of such a group and its procedures are set forth in Appendix 4. 
 
3. [In exercising the right to seek inform ation and technical advice, the panel shall 
not accept or consider information or technica l advice provided by an y individual or body 
from whom the panel has not sought it.] 
 
Article 16 
 
Adoption of Panel Reports 
 
 1. In order to provide sufficient time 
for the Members to consider panel reports, the 
reports shall not be considered for adoption by the DSB until 20  days after the date they have 
been circulated to Members . 
 
2. Members having objections to a panel report shall give written reasons to explain their 
objections for circulation at least 10  days prior to the DSB meeting at which the panel report 
will be considered . 
 
4. Within 60 days after the date of circulation of a panel report to the Members, the DSB 
shall adopt  the report shall be adopted at a DSB meeting7 unless a party to the dispute formally 
notifies the DSB of its decision to appeal or the DSB decides by consensus not to adopt the 
report.7  [The DSB may by consensus decide no t to adopt a finding in the report  [[or the 
basic rationale behind a finding]] .]  If a party has notified its decision to appeal, the report by 
the panel shall not be considered for adoption by the DSB until after completion of the appeal.  
This adoption procedure is without prejudice to the right of Members to express their views on a panel report. 
_______________ 
7 If a meeting of the DSB is not scheduled w ithin this period at a time that enables the 
requirements of paragraphs 1 and 4 of Article 16 to be met, a meeting of the DSB shall be held 
for this purpose. 
 TN/DS/25 
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  Article 17 
 
Appellate Review 
 
Standing Appellate Body  
 
4.(a) Only parties to the dispute, not third parties, may appeal a panel report. 
 
(b) Each third party,  Third parties  which have notified the DSB of a substantial interest 
in the matter pursuant to paragraph 2 of Article  10  [and any other Member having 
notified to the Appellate Body, the DSB a nd each party to the dispute its interest 
to do so no later than 5 days after the date of circulation of the notification of 
appeal referred to in paragraph 5(a)], ma y participate [as a third participant] in 
a proceeding before the Appellate Body.   
 
(c) Each third [participant] shall have an opportunity to  be heard by and to make a 
written submissions  to, and be given an opportunity to be heard by,  the Appellate 
Body.   
 
(d) Each third [participant] shall give its submission to each party to the dispute and 
to every other third participant.  The Ap pellate Body shall ref lect the submissions 
of third participants in its report.   
 
(e) [The Appellate Body shall consider only  the submissions of parties and third 
[participants], and shall not accept or consider any submission beyond those 
submitted by the parties and the third [participants].] 
 
 
5. (a) As a general rule, the proceedings shall not exceed [60 90] days from the date 
a party to the dispute formally notifies its decision to appeal to the date the Appellate Body circulates its report.  In fixing its timetable the Appellate Body shall take into 
account the provisions of paragraph 9 of Artic le 4, if relevant.  When the Appellate 
Body considers that it cannot provide
 circulate  its report within [60 90] days, it shall 
inform the DSB in writing of the reasons for th e delay together with an estimate of the 
period within which it will submit  circulate  its report.  In no case shall the 
proceedings exceed [90 120] days. 
 
(b) [Following the consideration of submissions and oral arguments, the 
Appellate Body shall issue an interim report to the parties to the dispute, 
including both the descript ive sections and the Appellate Body's findings and 
conclusions.  Within a period of time set by the Appellate Body, a party to the 
dispute may submit a written request for the Appellate Body to review precise 
aspects of the interim report prior to circulation of the final report to the 
Members.  At the request of a party to th e dispute, the Appellate Body shall hold 
a further meeting with the parties to the dispute on the issues identified in the 
written comments.  If no party to th e dispute submits comments within the 
comment period, the interim report shall be considered the final report and 
circulated promptly to the Members.  Th e Appellate Body shall include in its 
final report a discussion of the commen ts made at the interim review stage.] 
 (c) The Appellate Body shall suspend its work where the parties to the 
dispute so agree.  In the event of such a suspension, the time-frames set out in this 
paragraph, Article 20, and paragraph 4 of Article 21 shall be extended by the 
amount of time that the work was suspended.  [The Appellate Body shall resume 
its work at the request of [either pa rty], unless otherwise agreed between the 
parties.]  
  TN/DS/25 
 Page A-11 
 
 
  Procedures for Appellate Review 
 
9. [The Appellate Body shall draw up working procedures shall be drawn up by the 
Appellate Body ] in consultation with the Chairman of  the DSB and the Director-General, and 
communicated  them  to the Members for their information.  
 
12. (a) The Appellate Body shall address each of  the issues raised in accordance with 
paragraph 6 during the appellate proceeding. 
 
(b) Where the Appellate Body finds that there is not a sufficient factual basis 
to complete the analysis with respect to ce rtain issues, it shall in its report provide 
a detailed description of the [types of] fi ndings that are required to complete the 
analysis with respect to those issues.  
 
(c) Notwithstanding any issue in respect  of which it has found that there was 
not a sufficient factual basis to complete the analysis, the Appellate Body shall 
make appropriate findings and recommenda tions in accordance with Article 19 
[with a view to securing a prompt and effective resolution of the dispute].  
 
(d) Nothing in this paragraph or Article 17 bis affects the adoption of panel 
and Appellate Body reports and the im plementation of th e recommendations and 
rulings of the DSB. 
 
13. Where the parties to the dis pute fail to develop a mutua lly satisfactory solution 
[to the matter], the Appellate Body shall submit its findings in the form of a written 
report to the DSB.  In such cases, the Appe llate Body shall set out in its report the 
applicability of relevant provisions and the basic rationale behind any findings and 
recommendations that it makes.   The Appellate Body may uphold, modify or reverse the 
legal findings and conclusions of the panel.   
 
[The Appellate Body shall not include in it s report circulated to th e Members any finding, 
any finding together with its basic rationale, [[or a basic rationale behind a finding (where 
there is more than one basic rationale behind the finding),]]  that the parties to the dispute 
have agreed is not to be included].    
[Where the parties to the dispute have reached  a [mutually satisfactory] solution to the 
matter, the report of the Appellate Body sha ll be confined to a brief description of the 
case and to reporting that a solution has been  reached, and the report of the panel shall be 
void and of no legal eff ect.  Where the parties to the disput e have reached a solution to the 
appeal: (a) the report of the Appellate Body sha ll be confined to a brief description of the 
case and to reporting that a solution to the appeal has been reached, and (b) if a party to 
the dispute so requests, the DSB shall adopt the panel report [within 21 days of 
circulation of the Appellate Body report], unless the DSB decides by consensus not to 
adopt the report.]  
 
14. The DSB shall adopt  Aan Appellate Body report shall be adopted by the DSB and 
unconditionally accepted by th e parties to the dispute  unless the DSB decides by consensus not 
to adopt the Appellate Body report within 30 days following its circulation to the Members.8  
[The DSB may by consensus decide not to adopt a finding in the report [[or the basic 
rationale behind a finding.]]  ]  This adoption procedure is without prejudice to the right of 
Members to express their views on an Appellate Body report. 
_______________  
8 If a meeting of the DSB is not scheduled during this period, such a meeting of the DSB shall 
be held for this purpose. 
 TN/DS/25 
Page A-12  
 
  [Article 17 bis 
 
Referral Procedure 
 
1. Where the Appellate Body has identified certain issues according to paragraph 
12(b) of Article 17, [a complaining party] [th e party who advanced th e particular claim or 
defence to which the unresolved issue relates] ma y refer [such] [that] issue[s] to the panel. 
 2. The referring party shall make the referr al before the adoption of the Appellate 
Body report.  It shall do so in writing and sha ll identify the specific is sues it seeks to have 
addressed by the panel as well as the relevant paragraphs in the Appellate Body report.  
The referring party shall address the referra l to the panel and shall notify the DSB 
thereof. 
 3. The panel may examine only those issu es with respect to which the Appellate 
Body has expressly found that there is not a sufficient factual ba sis to complete the 
analysis, and that [a party to the dispute][the  referring party] has identified in accordance 
with paragraph 2. 
 4. The panel shall make such findings and recommendations, in accordance with 
the [guidance][description] prov ided by the Appellate Body pursuant to paragraph 12 of 
Article 17, as will assist the DSB in making its rulings and recommendations. 
 
5. As a general rule, the panel shall circula te its report within 90 days after the date 
of referral of the matter to it.  When the Pane l considers that it cannot provide its report 
within 90 days, it shall inform the DSB in writing of the reasons for the delay together 
with an estimate of the period with in which it will provide its report. 
 6. If a party appeals the report of the pa nel, Article 17 and Article 17bis apply to 
Appellate Body proceedings and the adop tion of the Appellate Body report.]  
 
Article 18 
 
Communications with the Panel or Appellate Body
 
 
1. There shall be no ex parte  communications with the panel , or Appellate Body , or 
arbitratorc, concerning matters under consideration by the panel , or Appellate Body , or 
arbitrator . 
_______________  
c For the purposes of this Article, the expression "arbitrator" means any arbitrator under 
paragraph 3(c) of Article 21, Article 22, or Article 25.   
 
2. [ [Any documentd] [The written submissions] that  a Member provides to a panel, 
the Appellate Body, or an arbitrator [(other than any submission made subsequent to the 
issuance of the interim report to the partie s)] shall be public except for information 
designated as strictly conf idential information [in acco rdance with the procedures 
referred to in paragraph 3].  Written submissions to the panel or the Appellate Body shall be 
treated as confidential, but shall be made  available to the parties to the dispute. ]   
_______________  
[d For the purposes of this paragraph, the term "document" does not include a document 
concerning an interim report or that is purely administrative in nature.]  
 
Nothing in this Understanding shall  preclude s a Member  party to a dispute  from disclosing 
statements of its own positions to the public. [ Members  shall treat as confidential information 
submitted by another Member to the panel or the Appellate Body which that Member has 
designated as confidential.   [A Member shall not disclose  information designated by 
another Member as strictly confidential info rmation in accordance with the procedures 
referred to in paragraph 3.]    TN/DS/25 
 Page A-13 
 
 
   
A party [or third party]  to a dispute shall also, upon re quest of a Member, provide a non-
confidential summary of the information contained in  its written submissions that could be 
disclosed to the public.  [A Member submitting strictly  confidential information in 
accordance with the procedures referred to in paragraph 3 shall provide a 
non-confidential summary of the information within 15 days of the request of another 
Member].  
 
3. [Where a party designat es any information submitted to the panel or the 
Appellate Body as "strictly confidential info rmation", such information shall be treated 
in accordance with the procedures set out in Appendix 5, unless the panel or the Appellate 
Body decides otherwise after consulting the part ies to the dispute.  These procedures also 
apply mutatis mutandis  to strictly confidential inform ation submitted in the course of 
arbitrations pursuant to this Understanding or in the course of procedures under Annex 
V of the Agreement on Subsidies and Countervailing Measures. ]   
 
[Each substantive meeting with the parties of a panel, the Appellate Body, or an 
arbitrator, and each meeting of a panel or arbitrator with an expert, shall be open for the 
public to observe g, except for any portion dealing with strictly confidential information 
[submitted in accordance with the proced ures referred to in paragraph 3.] ]  
_______________  
g The expression "observe" does not require physical presence in the meeting. 
 
Article 21 
 
Surveillance of Implementation of Recommendations and Rulings 
 
3. At a DSB meeting held within 30 days11 after the date of adoption of the panel or 
Appellate Body report, the Member concerned shall inform the DSB of its intentions in respect 
of implementation of the recommendations and ruli ngs of the DSB.  If it is impracticable to 
comply immediately with the r ecommendations and rulings, the Member concerned shall have 
a reasonable period of time in which to do so.  The reasonable period of time shall be: 
 
(a) the period of time proposed by the Member concerned, provided that such 
period is approved by the DSB;  or, in the absence of such approval, 
 
(b) a period of time mutually agreed by the parties to the dispute within 45 days 
after the date of adoption of the recommendations and rulings; or, in the absence of such agreement, 
 
(c) a period of time determined through binding arbitration within 90  days after 
the date of adoption of the recommendations and rulings.12  I n  s u c h  
arbitration, a guideline for the arbitrator13 should be that the reasonable 
period of time to implement panel or Appellate Body recommendations 
should not exceed 15 months from th e date of adoption of a panel or 
Appellate Body report.  However, that time may be shorter or longer, depending upon the particular circumstances.
h 
_______________  
11 If a meeting of the DSB is not scheduled during this period, su ch a meeting of the DSB shall 
be held for this purpose. 
12 If the parties cannot agree on an arbitrator within ten days after referring the matter to 
arbitration, the arbitrator shall be appointed by the Director-General within ten days, after 
consulting the parties. 
13 The expression "arbitrator" shall be  interpreted as referring either to an individual or a group. 
[h In determining these particular circumstances the arbitrator shall take into account the 
particular problems and interests of developing country Members.] 
 TN/DS/25 
Page A-14  
 
  5. [(a) After the midpoint of the reasonable period of time, or after the DSB 
meeting referred to in paragraph 3 where the Member concerned does not 
[have][need] a reasonable peri od of time pursuant to paragraph 3, each party to 
the dispute shall, if requested by anoth er party, accord sympathetic consideration 
to any request for consultations in good faith with a view to reaching a mutually satisfactory solution regarding the implementation of the recommendations and 
rulings of the DSB. [The  party requesting consultations shall notify its request to 
the DSB and the relevant Councils and Committees.] 
 
(b) Where the Member concerned considers  that it has fully complied with 
the recommendations and rulings of the DSB it shall so notify the DSB in writing 
without delay. The Member concerned sh all include with the notification a 
description of any [relevant] measure it ha s taken [to comply], the date of entry 
into force of the measure,  and its text, if any. 
 
(c) Where there is disagreement as to the ex istence or consiste ncy with a covered 
agreement of any measures  taken to comply with the recommendations and rulings of 
the DSB,  such disagreement  dispute  shall be decided through recourse to [the 
procedures provided for under this Understanding,]  as modified by this 
paragraph . these dispute settlement procedures, including wherever possible resort to 
the original panel   
 
(i) The procedures under this paragraph do not require the 
complaining party to request consultations under Article 4 
before requesting the esta blishment of a panel. 
 
(ii) The DSB shall establish a panel, upon request by the 
complaining party, at the first meeting at which the request is 
made, unless it decides by consen sus not to do so.  The matter 
shall be referred to the original panel. If any member of the original panel is not available, unless the parties agree otherwise, 
the Director-General shall appoin t a replacement within 7 days 
after the date of establishment of the panel, after consulting with the parties to the dispute.] 
 
(iii) The panel shall circulate its report within 90 days after the date of 
referral of the matter to
 its establishment .  Whe ren the panel 
considers that it cannot provide  circulate  its report within this time 
frame  timeframe , it shall inform the DSB in writing of the reasons 
for the delay together with an estimate of the period within which it 
will circulate  submit  its report.  
 
(iv) Where the DSB rules that a measure taken to comply does not 
exist or is inconsistent with a covered agreement, the Member 
concerned shall not have an additi onal reasonable period of time 
to comply with the recommendations and rulings of the DSB. 
 
Article 22 
 
Compensation and the Suspension of Concessions 
 
1. Compensation and the suspension of concessions or other obligations are temporary 
measures available in the event that the re commendations and rulings are not implemented 
[immediately in the case of compensation or]  within a reasonable period of time.  However, 
neither compensation nor the suspension of concessions or other obligations is preferred to full 
implementation of a recommendation to bring a measure into conformity with the covered agreements.  Compensation is voluntary and, if granted, sha ll be consistent with the covered 
agreements.  [Compensation to developing country Members will be monetary unless  TN/DS/25 
 Page A-15 
 
 
  otherwise agreed.i 
_______________  
i This is without prejudice to  the possibility for developed Members to obtain monetary 
compensation, if so agreed.] 
 
2. If the Member concerned fails to bring the measure found to be inconsistent with a covered agreement into compliance therewith or  otherwise comply with the recommendations 
and rulings immediately  or, where applicable, within the reasonable period of time 
determined pursuant to paragraph 3 of Article 21, such Member shall, if a complaining party  
so request sed
, [and no later than the expiry of the reasonable period of time , enter into 
negotiations with a complaining party any party having invoked the dispute settlement 
procedures   within ten days of such request] , with a view to developing mutually acceptable 
compensation.  
 
2 bis A complaining party  If no satisfactory compensation has been agree d within 20  days 
after the date of expiry of the reasonable period of time, any party having invoked the dispute 
settlement procedures]  may request authorization from the DSB to suspend the application to 
the Member concerned of concessions or othe r obligations under the covered agreements [only 
where [no satisfactory compensa tion has been agreed with th at complaining party and]:  
 
(a) the Member concerned does not inform the DSB, within the timeframe of 
paragraph 3, first sentence, of Article 21, that it intends to comply with the 
recommendations and rulings of the DSB;  
(b) the Member concerned does not no tify the DSB by the expiry of the 
reasonable period of time
j that it has fully complied with the recommendations 
and rulings of the DSB;  or 
__________ 
j Or by the date of the DSB meeting referred to in paragraph 3 of Article 21 where 
the Member concerned does not have a reasonable period of time pursuant to 
paragraph 3 of Article 21. 
 
(c) [the][a] complaining party has ha d recourse to proceedings under 
paragraph 5 of Article 21, and the DSB ha s ruled that a measure taken to comply 
does not exist or is inconsistent with  a covered agreement or that the Member 
concerned has failed to otherwise comply  with the recommenda tions and rulings 
of the DSB] . 
 
[3bis. Notwithstanding the provisions contained in paragraph 3, in a dispute between a 
developing country Member and a developed country Member, the developing 
country Member shall have the right to se ek authorization to suspend concessions 
or other obligations in any sectors under any covered agreements.] 
 
6. [(a) Following one of  When ] the situation [s] described in paragraph [2bis 
occurs ], the DSB, upon request, shall grant authorization to suspend concessions or 
other obligations within 30 days of the expiry of  the reasonable period of time , unless 
the DSB decides by consensus to reject the request.  However, if the Member 
concerned objects to the level of suspension proposed, or claims that the principles and 
procedures set forth in paragraph 3 have not been followed where a complaining party 
has requested authorization to suspend concessions or other obligations pursuant to paragraph 3(b) or (c), the matter shall be referred to arbitration.   
 
[(b)]  Such arbitration shall be carried out by the original panel, i
f members are 
available,  or by an arbitrator[] appointed by the Director -General and  [ .   I f  a n y  
member of the original panel is not availa ble, unless the parties agree otherwise 
the Director-General shall appoint a rep lacement, after consulting with the 
parties.  The arbitration]  shall be completed within 60 days of the appointment of 
the arbitrator15 after the date of expiry of the reasonable period of time .  TN/DS/25 
Page A-16  
 
  A complaining party may not suspend c Concessions or other obligations shall not be 
suspended  during the course of the arbitration. 
_______________  
15 The expression "arbitrator" shall be interprete d as referring either to an individual or a 
group.] 
 
[(b) Where it is demonstrated that the suspension of concessions or other 
obligations would have negative conseque nces on the economy of a developing 
country Member, the DSB may, upon reque st, authorize a Member or a group of 
Members to suspend concessions on behalf of the affected Member.  The following 
principles and procedures shall apply to such requests: 
 
(i) Before making such a request , the developing country Member 
shall refer the matter to arbitrat ion for determination of the 
level of nullification and impairmen t, which shall be done [taking 
into account the legitimate expectations of the developing 
country Member].  The arbitration shall further take into 
account the effects of the suspension of concessions upon the 
economy of the developing country. 
 
(ii) The arbitration shall cons ider whether the suspension of 
concessions or other obligatio ns in other sectors by the 
developing country Member would be [appropriate to effectively 
encourage the withdrawal of the measure found to be 
inconsistent with a covered Ag reement, taking into account 
possible effects on that developing country Member]. 
 
(iii) Where the DSB grants authorisation to a Member or a group of Members to suspend 
concessions or other obligations under para graph 7, the level of suspension for each 
Member authorized shall be limited to secu ring [full compensation for the injury to the 
developing country Member c oncerned], [the protection of its development interests], 
and the timely and effective implementa tion of the recommendations and rulings. 
 
[(c) Where the case is one brought by a developing country Member against 
a developed-country Member and the situation described in paragraph 2 occurs, 
and in order to promote the timely  and effective implementation of 
recommendations and rulings, the DSB, upon request, shall grant authorization to 
the developing country Member and any other Members to suspend concessions 
or other obligations within 30 days.] ]  
 
7. The arbitrator16 acting pursuant to paragraph 6 shall not examine the nature of 
the concessions or other obligations to be suspended but shall determine whether the 
level of such suspension is equivalent to  the level of nullification or impairment [, and 
if no compensation has been [granted][ agreed] or compensation has not been 
granted as agreed, the arbitrator shall, if  so requested, additionally determine the 
level of nullification or impairment su ffered during the reasonable period of 
time ].  The arbitrator may also determine if the proposed suspension of concessions or 
other obligations is allowed under the covered agreement.  However, if the matter 
referred to arbitration includes a claim that the principles and procedures set forth in 
paragraph 3 have not been followed, the arb itrator shall examine th at claim.  In the 
event the arbitrator determines that those principles and procedures have not been 
followed, the complaining party shall apply them consistent with paragraph 3.  
[However, within [30] days after the issuan ce of the decision of the arbitrator, any 
party may appeal any issue of law covered in the decision and legal interpretation 
developed by the arbitrator.  Paragraphs 1, 5 and 10 to 14 of Article 17 shall 
apply to such appeals mutatis mutandis .  If the Appellate Body reverses or 
modifies the arbitrator's legal findings , the arbitrator shall immediately resume 
its work to re-examine its decision to ensure its consistency with such findings 
and conclusions of the Appellate Body. Th e arbitrator shall, upon request, give  TN/DS/25 
 Page A-17 
 
 
  the parties to the dispute the oppo rtunity to make written and oral 
representations in respect of the conseque nces of the findings and conclusions of 
the Appellate Body for the decision.]   The parties shall accept the arbitrator's 
decision as final and the parties concerned shall not seek a second  arbitration.  The 
DSB shall be informed promptly of the decision of the arbitrator and shall upon request, grant authorization to suspend concessions or other obligations where the 
request is consistent with the decision of  the arbitrator, unless the DSB decides by 
consensus to reject the request. 
_______________  
16 The expression "arbitrator" shall be interpreted as  referring either to an individual or a group 
or to the members of the original panel when serving in the capacity of arbitrator. 
 
8. [(a)] The suspension of concessions or other obligations shall be temporary and shall 
only be applied until such time as the measure found to be inconsistent with a covered agreement has been removed, or the Memb er that must implement recommendations 
or rulings provides a solution to the nullification or impairment of benefits, or a 
mutually satisfactory solution is reached.  
 
[However, in those cases where the level of nullification or impairment includes 
the level of suspension or impairment suffered during the rea sonable period of 
time as described in paragraph 7, the suspension of concessions or other 
obligations may remain in force thereafter until such time at wh ich the effect of 
suspension is equivalent to the level of nullification or impairment suffered 
during the reasonable period of time.]    
 
 [(b) Where the DSB has authorized the su spension of concessions or other 
obligations against a Member and there is a subsequent disagreement as to the 
existence or consistency with a covered agreement of a measure taken to comply 
with the recommendations and rulings of  the DSB, the Member concerned may 
have recourse to the procedures of paragr aph 5 of Article 21 as modified by this 
paragraph.  In such a case: 
 
(i) in its request for the establishment of a panel, the Member 
concerned shall set out the specific measures taken to comply, the text of these measures, and a factual and legal description of 
how these measures bring the Member into compliance with the 
recommendations and rulings of the DSB; 
 
(ii) where a Member that has be en authorized to suspend 
concessions or other obligations considers that a measure taken 
to comply is inconsistent with any other provisio n of the covered 
agreements, or that the Member concerned has otherwise not 
brought itself into complian ce with the recommendations and 
rulings of the DSB, it may submit to the DSB, no later than 
[xx days] after the establishment of a panel, a notice setting out 
any additional measure taken to comply and a brief summary of 
the legal basis for its disagreement with the Member concerned;  
and 
 
(iii) for the purposes of these pro ceedings, the word "document" in 
the terms of reference of the panel under paragraph 1 of Article 7 comprises the request fo r the establishment of the panel 
and the notice submitted under subparagraph (ii) [of this 
provision]. 
 
(c) Where, following thes e proceedings, the DSB: 
 
(i) rules that the measure taken to comply is not inconsistent with TN/DS/25 
Page A-18  
 
  the provisions in question or otherwise brings the Member 
concerned into compliance with the recommendations and 
rulings of the DSB, on the request of the Member concerned, the 
DSB shall withdraw that authorization, unless it decides by 
consensus not to do so; 
 
(ii) does not rule that the Memb er concerned is in compliance with 
the recommendations and rulings of the DSB, notwithstanding 
paragraph 7 of Article 22, fifth sentence, a party to the dispute 
may refer the matter to arbitration pursuant to paragraph 6 of Article 22.  The Arbitrator may determine a new level of 
suspension or make findings, as appropriate, under paragraph 3 
of Article 22.  The Arbitrator shall inform the DSB promptly of its decision.  Upon the request of  a party to the dispute, the DSB 
shall modify the authorization to suspend concessions or other 
obligations consistently with the decision of the Arbitrator, unless the DSB decides by consensus to reject the request. 
 
(d) The existing authorization to suspend concessions or other obligations remains in effect until, purs uant to paragraph (c), the DSB withdraws or modifies 
that authorization.] 
 
[(b) After the DSB has authorized a complaining party to suspend 
concessions or other obligations pursuant to paragraph 6 or 7 (in this paragraph 
referred to as the "authorized party"),  the Member concerned may notify the 
DSB that it has fully removed the inconsis tency with a covered agreement, or that 
it has provided a solution to the nullification or impa irment of benefits.  Such 
notification shall be accompanied by: 
 
(i) a detailed description of any measure taken by the Member 
concerned, its date of entry into force, any text of such measure, 
and a list of documents that the Member concerned considers 
relevant for the assessment of implementation;  and 
 
(ii) a detailed factual and legal explanation of how the measure 
taken by the Member concerned has removed any inconsistency 
with, or provided a solution to any nullification or impairment of 
benefits under, the covered agreements. 
 
(c) Where an authorized party so re quests, the Member concerned shall 
enter into consultations regarding any ma tter associated with the notification 
within 10 days upon receiving such request.  The Member concerned shall 
respond promptly and to the extent reas onably possible to any request by the 
authorized party for further informatio n or documents regar ding the measure it 
has taken.    
(d) The DSB shall, upon request, withdraw the authorized party's 
authorization to suspend concessions or other obligations, unless the DSB decides 
by consensus not to do so, where:  
 
(i) the authorized party does not request, within 60 days of the 
circulation of the notification  referred to in paragraph (b),
k the 
establishment of a panel under paragraph 7 of Article 21; or 
_______________  
k The Member concerned and the authorized party may agree 
to extend this 60 day period.  Where there is disagreement as 
to whether the Member concerned has satisfied the 
requirements of subparagraph (b)(i) and (ii), such  TN/DS/25 
 Page A-19 
 
 
  disagreement shall also be resolved through recourse to 
dispute settlement procedures pursuant to paragraph 7.  
 
(ii) the authorized party has reque sted the establishment of a panel 
under paragraph 7 of Article 21 and, as a result of the 
proceedings, the DSB rules that the measure taken to comply 
exists and has fully removed the inconsistency with, or has 
provided a solution to the nullific ation or impairment of benefits 
under, the covered agreements. 
 
(e) If, as a result of recourse to the dispute settlement procedures provided 
for in paragraph 7 of Article 21, the DSB does not rule that the Member 
concerned has fully removed the inconsistenc y with, or provided a solution to the 
nullification or impairment of benefi ts under, the covered agreements, the 
complaining party in the dispute under paragraph 7 of Article 21 may request 
that the DSB modify the authorization for the suspension of concessions or other 
obligations.  However, if the Member con cerned objects to the modified level of 
suspension proposed, or claims that the principles and procedures set forth in 
paragraph 3 have not been followed in the request for modification, it shall have 
recourse to arbitration.  If, in the abse nce of the complaining party's request for 
modification, the Member concerned object s to the level of suspension permitted 
under the existing authorization, it shall also have recourse to arbitration.  The 
first sentence of paragraph 6(a), the first sentence of paragraph 6(b) as well as 
paragraph 7 of Article 22 shall apply mutatis mutandis  to such modification by 
the DSB and such arbitration.  Until the modification by the DSB, the 
complaining party may only suspend co ncessions or other obligations in 
accordance with the existing authorization.]  
 
[(e)] In accordance with paragraph 6 of Article  21, the DSB shall continue to keep 
under surveillance the implementation of adopted recommendations or rulings, 
including those cases where compensation has been provided or concessions or other 
obligations have been suspended but the recommendations to bring a measure into conformity with the covered agreements have not been implemented. 
 
[(f) Upon the request of a party to the dispute, the DSB may at any point 
withdraw or modify an authorization.] 
 
[In such cases, Members which have been granted the right to suspend 
concessions or other obligations shall notify the DSB and the relevant WTO 
bodies of all the measures taken as suspension of concessions or other obligations 
within three months after the DSB has granted such authorization and thereafter 
every six months, until such time as th e suspension ceases to be applied .] 
 
[Article 28 
 
Dispute Settlement Fund  
 
1. A fund on dispute settlement shall be established to fac ilitate the effective 
utilisation of the dispute settlement pro cedures by developing country Members.l 
_______________  
l The Members may decide to set up a Fund specifically for this purpose separate from the 
other trust funds.  
 
2. Disbursements under the fund shall be ma de in accordance with criteria to be 
adopted by the DSB.m 
_______________  
m Such criteria may include the following requirements:  (1) The Dispute Settlement Fund 
is available to all developing countries for all disputes where they are parties to the dispute 
as complainants, co-complainants and respondents.  (2) Members are free to choose their TN/DS/25 
Page A-20  
 
  own legal representatives.   (3) The DSB may adopt other criteria to ensure the 
effectiveness and functioning of the Dispute Settlement Fund.  (4) The use of the fund by 
developing country Members shall be in accordance with a set of rules that will be 
formulated for such purposes as approved by the DSB.  
 
3. On the basis of reports of the Committ ee on Budget, Finance and Administration, 
the General Council shall review annually the adequacy and ut ilization of the fund with a 
view to improving its effectiveness.  
4. The fund established under paragraph 1 of this Article shall be financed from the regular WTO budget.
n  To ensure its adequacy, the fund may be additionally funded from 
extra-budgetary sources , which may include voluntary contributions. 
_______________ 
n The Members may decide to apportion some am ount set aside for technical assistance for 
the purpose of contributing to the fund.  The Members may also decide to set up a Fund 
specifically for this purpose separate from the other trust funds.  
 
5. In a dispute between a developed and developing country Member, where a 
developing country Member is unable to access the fund due to lack of resources, the DSB 
shall award legal costs to the developing co untry Member in the case where the developed 
country Member's measures have been found inconsistent with the covered agreements o.] 
_______________ 
o Legal costs shall only be awarded on submission of signed and dated receipts by the 
party requesting their award.  The panel may determine if the proposed award is 
reasonable taking into account the complexity of the matters raised by the dispute.  The 
panel may use as its benchmark the time budget  and fee scale of the Advisory Centre on 
WTO  Law. 
 
APPENDIX 3 
 
WORKING PROCEDURES 
 
[2. The panel shall meet in closed session.  The parties to the dispute, and interested 
parties, shall be present at the meetings only when invited by the panel to appear before it. ] 
 
3. [The deliberations of the panel [and the documents submitted  written submissions  to 
it] shall be kept confidential.  Nothing in this Understanding shall preclude a party to a dispute 
from disclosing statements of its own positions to the public. [Where a party to a dispute 
submits a confidential version of its written  submissions to the panel, it shall also, upon request 
of a Member, provide a non -confidential summary of the information contained it its 
submissions that could be disclosed to the public .] [Members shall treat as confidential 
information submitted by ano ther Member to the panel or the Appellate Body which that 
Member has designated as confidential . ] ] 
 
3bis. [Information designated by a Member as strictly confidential shall be treated in 
accordance with the procedures [referred to in paragraph 3 of Article 18] ]   
 
6. All third parties which have notified their interest in the dispute to the DSB  The panel  
shall be  invited  in writing each third party  to present their views during a session of  make a 
written submission to the panel and to be present at  the first substantive meeting of the 
panel set aside for that purpose  with the parties .  All such third parties may be present during 
the entirety of this session.   The panel shall give each third party the opportunity to make 
an oral statement and to respond to question s at a session of that  meeting set aside for 
that purpose, and to respond in  writing to questions arising out of such a meeting.   
 
7. Formal rebuttals shall be made at a second substantive meeting of the panel.  The party 
complained against shall have the right to take the floor first, to be followed by the complaining 
party.  The parties shall submit, prior to that meeting, written rebuttals to the panel.  The panel 
shall invite in writing the third parties to be present at the second and any subsequent  TN/DS/25 
 Page A-21 
 
 
  substantive meetings prior to th e issuance of the interim report.  
 
12. Proposed timetable for panel work:  
 
 Organisational meeting with the parties   Starting date  
 
(a) Receipt of first written su bmissions of the parties: 
 
(1) complaining Party:    3 -6 weeks  
      14 days  
 
(2) Party complained against:    2 -3 3-4 weeks 
 (b) Date, time and place of first 
substantive meeting with the parties: 
third party session:   ______  1-2 weeks 
 
(c) Receipt of written rebuttals of the parties: ______  2-3 weeks 
 (d) Date, time and place of second 
substantive meeting with the parties: ______  1-2 weeks 
 (e) Issuance of descriptive part of the 
report to the parties:   ______  2-4 weeks 
 (f) Receipt of comments by the parties 
on the descriptive part of the report: ______  2 weeks 
 
(g) Issuance of the interim report, 
including the findings and conclusions, to the parties:  _______  2-4 weeks 
 
(h) Deadline for party to request 
review of part(s) of report:  _______  1 week 
 
(i) Period of review by panel, including 
possible additional meeting with 
parties:     _______  2 weeks 
 (j) Issuance of final report to parties 
to dispute:    _______  2 weeks 
 (k) Circulation of the final report to the 
Members:    _______  3 weeks 
 The above calendar may be changed in the light of unforeseen developments.  Additional 
meetings with the parties sha ll be scheduled if required. 
 
[APPENDIX 5 
 
PROCEDURES GOVERNING STRICTLY CONFIDENTIAL INFORMATION 
 
I. SCOPE  
1. In accordance with [paragraph 3 of Article 18], these procedures apply to all 
strictly confidential informat ion (SCI) submitted [to a panel or to the Appellate Body.  
They also apply, mutatis mutandis , to SCI submitted in the course of]  an arbitration 
procedure [under this Unders tanding] or [of]  a procedure under Annex V of the TN/DS/25 
Page A-22  
 
  Agreement on Subsidies and Countervailing Measures .   
 2. "Strictly confidential information" means:  specific information, including 
business confidential information, in any form, th at (i) is secret in the sense that it is not 
generally known or readily accessible to persons, natural or legal, other than those lawfully in control of the info rmation;  (ii) has been the s ubject of reasonable efforts by 
the person or persons lawfully in control of th e information to keep it  secret; and  (iii) if 
disclosed would cause or threaten to cause seri ous prejudice to an essential interest of any 
individual or entity lawfully in control of the information. 
 II. RESPONSIBILITY  FOR COMPLIANCE 
 
1. Each party is responsible for ensuring that its representatives  comply with these 
procedures to protect SCI submitted by anoth er party.  The Secretariat is responsible for 
ensuring that all other approved pers ons comply with these procedures. 
 III. SUBMISSION OF SCI BY A PARTY 
 
1. When submitting information, a party may designate all or any part of that 
information as SCI provided that such information meets the [definition under 
paragraph 2].  Each party shall act in good  faith and exercise the utmost restraint in 
exercising its right to desi gnate information as SCI. 
 
2. To the extent possible, SCI should be  submitted in an exhibit or annex to a 
submission.   Under no circumstances shall an entire submission or substantial parts of it 
be designated as SCI. 
 
3. A party that wishes to submit SCI at a panel [or Appellate Body] meeting shall so 
inform the panel prior to doing so.  The pane l shall exclude persons who are not approved 
persons from the meeting while the SCI is submitted and discussed.  
4. Where a submission by a party incorp orates SCI first submitted by another 
party, the submission shall iden tify that information as SCI. 
 
5. If a party objects to the designation as SCI of information submitted by another 
party, the panel [or the Appellate Body] sh all decide if the information meets the 
[definition under paragraph 2].  If the panel [or the Appellate Body] considers that the 
information does not meet the [definition], [it] shall decline to consider that information.  
In such a case, the party submitting th e information may, at its discretion: 
 
 (a) withdraw the information, in whic h case the panel and the other parties 
shall promptly return the information to the party submitting it;  or 
 
 (b) withdraw the designation of the information as SCI. 
 6. If a party considers that information submitted by another party should have 
been designated as SCI because it has made reasonable efforts to keep it secret and it 
objects to such submission, the panel [or the Appellate Body] shall decide if the 
information meets the criteria in the definition of SCI in the DSU.  If the panel [or the 
Appellate Body] considers that the information does meet the [definitio n], [it] shall decline 
to consider that information.  In  such a case, the party submitting the information may, at 
its discretion: 
  (a) withdraw the information, in whic h case the panel and the other parties 
shall promptly return the information to the party submitting it;  or 
 
(b) designate the information as SCI. 
  TN/DS/25 
 Page A-23 
 
 
   
 IV. TREATMENT OF SCI 
 
1. Access to SCI  
 (a) Only approved persons may have access to SCI. 
 
 (b) Documents or other recordings  containing SCI (SCI-designated 
material) shall not be copied in ex cess of the number of copies required 
by the approved persons.  All copi es of SCI shall be consecutively 
numbered.  The making of electroni c copies shall be avoided whenever 
possible. 
 
2. Storage 
  SCI-designated material shall be stored in a secure location when not in use.  
A secure location is understo od to be a locked storage receptacle or electronic storage 
facility where SCI may be held so as to afford access only to approved persons. 
 
3. Use and disclosure of SCI 
  (a) Approved persons shall use SCI on ly for the purposes of the dispute 
settlement proceedings and for no other purpose. 
  (b) No approved person shall disclose SC I, or allow it to be disclosed, to any 
person except another approved person. 
 
 (c) The panel [or the Appellate Body] shall not disclose SCI in its final 
report as circulated to the Memb ers, but may make statements of 
conclusion drawn from the SCI. 
 
4. Return or destruction  
 After the conclusion of the dispute settlement process
p, or the arbitration 
procedure, within a period fixed by the panel[, the Appellate Body] or the arbitrator, 
approved persons shall return any SCI-designated material, or certify in writing to the 
parties that the SCI-designated material has been destroyed, unless the party that first 
submitted the SCI agrees otherwise.  The Secretariat may retain one copy of the SCI-
designated material for th e archives of the WTO. 
_______________  
p "Conclusion of the dispute settlement process" means the earliest of the following 
events: 
(i) pursuant to paragraph 4 of Article 16, the panel [or Appellate Body] report is 
adopted by the DSB, or otherwise no t adopted by consensus of the DSB; 
(ii) pursuant to paragraph 4 of Articles 16 and paragraph 14 of Ar ticle 17, the panel 
report is adopted (with modifi cation, if any) with the re port of the Appellate Body; 
(iii) when the authority for estab lishment of the panel lapses pursuant to Article 12.12;  
or 
(iv) pursuant to Article 3.6, a mutually agreed solution is notified by the DSB. 
 
V. DESIGNATION OF APPROVED PERSONS   
1. Panel members, Appellate Body member s and designated Secretariat employees 
and experts appointed by a panel are approved persons an d may have access to SCI. 
 
2. A party may designate as an approved person anyone who is a party's 
representative, being employees, legal counsel or  other advisors or consultants of that 
party, but in no circumstances may include an yone who could reasonably be expected to TN/DS/25 
Page A-24  
 
  benefit from the receipt of the SCI. 
 3. Each party shall submit to the other party or parties and the panel a list of its 
representatives who need access to SCI submitte d by the other party.   Each party shall 
limit the number of persons on its list, taking into account its admini strative and political 
structures.  The Director-General shall, in th e same manner, submit to the parties and the 
panel a list of the employees of the Secretariat who need access to SCI in the dispute.  The 
parties or the Director-General may submit amendments to their lists at any time. 
 
4. Unless a party objects to the designation of any of the persons on the lists 
submitted under paragraph (1), the panel[or the Appellate Body] shall designate those 
persons as approved persons.  If a party obj ects to the designation of any of the persons 
on the lists submitted, the panel [or the Ap pellate Body] shall deci de on the objection 
promptly, having regard to any potential harm arising from the designation.  It is within 
the panel's discretion whether to accept or de ny the objection.  If the panel [or the 
Appellate Body] denies the objection, the SC I of another party may not be disclosed to 
any person who was the subject of the object ion until the party submitting the SCI has 
had a reasonable opportunity to withdraw the SCI.  In that event, the panel [or the 
Appellate Body] and the other parties shall promptly return any document or other 
recording containing the SCI to  the party submitting it. 
 
VI. ADDITIONAL OR A LTERNATIVE PROCEDURES 
 
1. Following consultations with the parties,  and third parties as required, the panel 
[or the Appellate Body] may waive any part of these procedures or apply any other 
procedures that it considers necessa ry to ensure the pr otection of SCI.] 
 
 
II.  PROPOSED DSB DECISIONS 
 
 
[PROTECTION OF STRICTLY CONFIDENTIAL INFORMATION 
 
Decision by the Dispute Settlement Body 
 
 The Dispute Settlement Body directs the Secretariat to maintain the documents 
referenced in paragraph 2 of Article 18 in a cen tral location and to make these documents 
available to the public, except for [strictly] confidential information [designated as such 
by a Member in accordance with the procedures referred to in paragraph 3 of Article 18]. 
 
A final report issued by a panel to the partie s is an unrestricted document, except for any 
[strictly] confidential information, as defined in [paragraph 3 of] Article 18.  Any interim 
report considered final by operation of the last  sentence of paragraph 2 of Article 15 is 
unrestricted when considered final. 
This decision is without prejudi ce to the practice concerning th e date of circulation of the 
report.q] 
_______________  
q That practice was established on a trial ba sis and under that practice a document is 
deemed to be circulated on the "date printed on the WTO document to be circulated with 
the assurance of the Secretariat that the date printed on the document was the date on 
which this document was effectively put in th e pigeon holes of delegations in all three 
working languages."  (WT/DSB/M/2). 
  TN/DS/25 
 Page A-25 
 
 
   
[FLEXIBILITY AND MEMBER-CONTROL 
 
Decision by the Dispute Settlement Body 
 
 
A Member proposing that a finding, [[or basic rationale behind a finding]] , in a panel or 
Appellate Body report should not be adopted by  the Dispute Settlement Body shall submit 
the proposal in writing to the Dispute Settl ement Body no later than  3 days (or the WTO 
working day following the 3rd day if the 3rd day is a non-working day for the WTO) after the issuance of the airgram co nvening the meeting at which the report is proposed to be 
considered.
r  The Member shall specify in the proposal the finding [[, or the basic rationale 
behind a finding,]]  at issue and give a brief descri ption of the reason not to adopt.] 
_______________  
r In the case of a panel report, the Member sha ll submit the proposal no later than 3 days 
(or the WTO working day following the 3rd day if the 3rd day is a non-working day for the 
WTO) after the issuance of the airgram convening either:  (1) the meeting at which the panel report is proposed to be considered if no party has filed a notice of appeal;  or (2) 
the meeting at which the panel report together with the Appellate Body  report is proposed 
to be considered if a party has filed a notice of appeal. 
 
 
[WORKING PRACTICES CONCERNING PANEL COMPOSITION 
 
Decision by the Dispute Settlement Body 
 
The Dispute Settlement Body (DSB),  
Desiring to enhance the process by which panels  are composed under Article 8 of the 
Understanding on Rules and Procedures Gov erning the Settlement of  Disputes (DSU); 
 
Resolved to expedite this process and enhance its transparency; 
 
Recalling the need to compose panels of well-qualified individuals and to ensure their 
independence;  
Hereby decides as follows: 
 1. This Decision establishes rules on the composition of panels pursuant to Article 8 
of the DSU for the parties, the Di rector-General and the Secretariat. 
 2. The DSB may review these rules, as n ecessary, in order to further improve them 
in the light of the experience gained, by revis ing the present Decision or adopting other 
Decisions.  
3. The following procedure shall apply where a panel has been established and 
needs to be composed, withou t prejudice to the parties' right to agree on any or all 
panelists. 
 
4. After the establishment of the panel,  the Secretariat shall ask each party to 
indicate any particular selection criteria (such as qualifications or experience) it wishes 
the panelists to have.  The Secretariat shall p resent to the parties a single list of persons 
known to the Secretariat who meet [at leas t one] [any of] the requested criteria
s, to the 
utmost extent possible.  This list should no rmally comprise the names of between 12 and 
20 persons, together with their curricula vitae, unless the parties agree otherwise. 
_______________ 
s Where the parties request several or different criteria, the list should comprise persons 
who meet one or more of these criteria. 
 TN/DS/25 
Page A-26  
 
  5. Each partyt may reject one of those nominations where the list comprises no more 
than 10 persons, two where it comprises between 11 and 20 persons and three where it 
comprises more than 20 persons.  The parties may otherwise object to the Secretariat's 
nominations to the list only in the event of a conflict of interest as referred to in the Rules 
of Conduct.  In such cases, the party concern ed must substantiate its reasons and provide 
the corresponding evidence.  The Secretariat sh all not take into account objections of 
other nature.  Each party shall then provide  to the Secretariat a ranking in order of 
preference of all the proposed names, excep t of the rejected nominations and those 
withdrawn from the list based on the Secretar iat's decision that there is a conflict of 
interest. 
_______________ 
t Where there are multiple complainants and a single panel is established under paragraph 
1 of Article 9 or several panels are composed  of the same persons under paragraph 3 of 
Article 9, the complainants shall exercise the right of rejection by dividing the available 
rejections among themselves, unless the complainants agree otherwise. 
 
6. The Secretariat shall ascertain whic h nominations received the highestu combined 
preference by adding the results of the ra nking of the respondent and that of the 
complainant.v  The Secretariat shall th en verify whether these persons are available and 
whether the parties agree on th e resulting panel composition as well as on the member of 
the panel who shall serve as chairman. 
_______________ 
u Among nominations with equal combined preference, the person(s) with the lowest 
degree of divergence between the parties' rankings shall receive priority. Where this is the 
case for more nominations than are needed to compose the panel, the Secretariat shall 
draw by lot the needed number of p ersons from among those nominations. 
v Where there are multiple complainants and a single panel is established under 
paragraph 1 of Article 9 or several panels are composed of the same persons under paragraph 3 of Article 9, the Secretariat shall, before proceeding to this addition, merge 
the results of the rankings of all complainants into a single ranking by calculating an 
average for each nomination. 
 
7. [In exceptional circumsta nces, and at the joint request of the parties, the 
Secretariat may present an expanded, second list of nominations, in order to repeat the 
steps set out in paragraphs 5 and 6.]  
8. In accordance with paragraph 10 of Article 8 of the DSU, when a dispute is 
between a developing country Member and a developed country Member and the developing country Member so requests, [this Decision shall be applied in such a manner 
that at least one panelist shall be from a developing country Member. To this end,] as 
necessary, the developing country citizen obta ining the highest combined preference shall 
be chosen.
w 
_______________ 
w Among nominations with equal combined preference, the person(s) with the lowest 
degree of divergence between the parties' rankings shall receive priority. Where this is 
the case for more nominations than are needed to compose the panel, the Secretariat 
shall draw by lot the needed number of persons from among those nominations. 
 
9. Where the parties do not agree on the pa nel's composition within 20 days after 
the date of the establishment of a panel and either party requests that the Director-
General compose the panel in accordance with  paragraph 7 of Articl e 8 of the DSU, the 
Director-General shall determine the composition of the panel by appointing, from the 
nominations proposed by the Secretariat, excep t the nominations rejected in accordance 
with paragraph 5, the panelists whom the Di rector-General considers most appropriate, 
after consulting with the parties to the dispute.]  
  TN/DS/25 
 Page A-27 
 
 
   
[ADDITIONAL GUIDANCE FOR WTO ADJUDICATIVE BODIES 
   
Decision by the Dispute Settlement Body 
  
A. PARAMETERS CONCERNING THE USE OF PUBLIC INTERNATIONAL LAW 
 
Areas in which public international la w plays a role in WTO dispute settlement 
 
Members recognize that public international law plays an im portant role in WTO dispute 
settlement.  In particular, there are three important means through which public 
international law plays a role. 
 First, the Marrakesh Agreement Establishing the World Trade Organization is itself 
public international law. 
 
Second, in Article 3.2 of the Understandin g on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU") Members  recognize with respect to the covered 
agreements that the WTO dispute settlement system serves "to clarify the existing 
provisions of those agreements in accordance with customary rules of interpretation of 
public internationa l law."  The WTO Appellate Body reco gnized that this description in 
Article 3.2 of the role of the WTO disput e settlement system "reflects a measure of 
recognition that the General Agreement is not to be read in clinical isolation from public 
international law."
x 
_______________  
x United States - Standards for Conventional an d Reformulated Gasoline (WT/DS2/AB/R), page 17.]] 
 
Those customary rules of interpretation of public international law are reflected in 
Articles 31 through 33 of the Vienna Convention on the La w of Treaties, including as 
stated in Article 31(3)(c) any relevant rules of international law (i .e., rules relevant to 
treaty interpretation) applicable in the relations between the parties. 
 I[t is useful to note that i]n the com mentary of the Intern ational Law Commission 
concerning Articles 31 and 32 of  the Vienna Convention, the Commission observed that it 
is not possible to identify principles of in ternational law that apply in all instances.  
Rather, this must be examined on a case-by-case basis.  The Commission stated : 
 
"Most cases submitted to international adjudication 
involve the interpretation of treaties, and the 
jurisprudence of internatio nal tribunals is rich in 
reference to principles and maxi ms of interpretation.  In 
fact, statements can be found in the decisions of 
international tribunals to support the use of almost every principle or maxim of which use is made in 
national systems of law in th e interpretation of statutes 
and contracts ....  Thus it would be possible to find sufficient evidence of recourse to principles and maxims 
in international practice to justify their inclusion in a 
codification of the law of treaties, if the question were 
simply one of their relevance on the international plane.  
But the question raised by jurists is rather as to the 
non-obligatory character of many of these principles 
and maxims.  They are, for th e most part, principles of 
logic and good sense valuable only as guides to assist in 
appreciating the meaning wh ich the parties may have 
intended to attach to the expressions that they employed 
in a document.  Their suitability for use in any given TN/DS/25 
Page A-28  
 
  case hinges on a variety of  considerations which have 
first to be appreciated by the interpreter of the 
document; the particular a rrangement of the words and 
sentences, their relation to ea ch other and to other parts 
of the document, the general nature and subject-matter of the document, the circumstances in which it was 
drawn up, etc.  Even when a possible occasion for their 
application may appear to exist, their application is not 
automatic but depends on the conviction of the 
interpreter that it is appropriate in the particular circumstances of the case.  In other words, recourse to 
many of these principles is  discretionary rather than 
obligatory and the interpretation of documents is to some extent an art, not an exact science."
y 
_______________  
y Report of the International Law Commission on its 
eighteenth session, 4 May to 19 July 1966 
(A/6309/Rev.1).  Articles 31 and 32 were at that time 
Articles 27 and 28. 
 
It is also important to identify the sou rces from which the rules relevant to treaty 
interpretation are obtained.  An internat ional instrument that is  not in force embodies 
relevant international rules only to the extent  that it reflects prin ciples of customary 
international law.  An intern ational instrument that  is in force, in addition to possibly 
reflecting principles of customary int ernational law, may also embody relevant 
international rules as between the parties to  that instrument, but not to non-parties. 
 
Third, the covered agreements include numerous  references to other public international 
law.  Some examples include Article XV:4 of the General Agreement on Tariffs and Trade 
1994 (referring to the Articles of Agreemen t of the International Monetary Fund) and 
Article 2 of the Agreement on Trade-Relate d Aspects of Intellect ual Property Rights 
(referring to the Pari s Convention, Berne Convention, Rome Convention and Treaty on 
Intellectual Property in Respect  of Integrated Circuits). 
 Limitations on the use of public int ernational law in WTO dispute settlement 
 
[Recognizing that internatio nal dispute settlement fora vary  regarding the breadth of 
their adjudicatory authority,] WTO dispute settlement under the DSU is focused on the 
adjudication of rights and obligations under specified agreements.  These "covered 
agreements" are listed in Appendix 1 of the DS U.  While other int ernational law might 
properly play a role in WTO dispute settlement fo ra, it is not the function of WTO dispute 
settlement to adjudicate rights  and obligations beyond those in the covered agreements. 
 
Consideration of procedural approaches of other adjudicative bodies 
 
In addition, Members recognize that each WTO adjudicative body is tasked with 
managing its own proceedings, including develo ping its own working procedures.  It is 
natural that in managing its proceedings , a body may wish to consider how other 
adjudicative bodies have approached si milar procedural issues, including other 
international adjudicative bodies as well as those in an individual  Member.  Ultimately, 
however, such consideration is a question of th e body exercising its di scretion as to how to 
manage its proceedings; such consideration is not a question of interpreting a covered 
agreement in accordance with public international law. 
 
B. PARAMETERS CONCERNING THE INTERPRETIVE APPROACH TO USE IN WTO DISPUTE SETTLEMENT 
 
WTO adjudicative bodies are constrained fr om adding to or diminishing the covered 
agreements  TN/DS/25 
 Page A-29 
 
 
   
Articles 3.2 and 19.2 of the DSU provide that recommendations a nd rulings of the DSB 
"cannot add to or diminish the rights and obligations provided in the covered 
agreements."  This means that WTO adjudica tive bodies must take care that [any 
interpretive approach they may use] results neither in supplementing nor in reducing the rights and obligations of Memb ers under the covered agreements. 
 
The covered agreements reflect differing negotiating objectives and positions 
 
The covered agreements are the result of negotiations among sovereign nations and 
autonomous customs territories.  Negotiations inherently enta il a number of compromises.  
[Agreement by participants on particular terms in a covered agreement does not mean 
that all WTO Members have ag reed on the same underlying approach or rationale for 
those terms.]  Some participants may have want ed stronger rules or disciplines that went 
further in a particular area, wh ile other participants may not have wanted rules as strong 
or disciplines that went as far.   It is for this reason that th e text of the covered agreements 
is the best representation of the expectations of WTO Members. 
 
[The differences in approach and perspect ive also mean that, w]hen interpreting a 
provision of a covered agre ement, while other provisions of the covered agreements may 
serve as useful context, [it is not possible to deduce from the existence of certain provisions 
that WTO Members have agreed on a particul ar underlying policy and that this policy 
may be used as a guideline to interpret oth er provisions.  In other words,] it is not 
appropriate to extrapolate from the fact that Members have agreed to move in a 
particular direction in one provision and co nclude that therefore Members must have 
intended another provision to move equally in the same di rection.  It often may be 
possible to reach agreement only on one partic ular obligation or di scipline while being 
unable to reach agreement on any obligation or discipline even in a related area. 
 
The covered agreements embody [constructive] ambiguity  
 
Customary international law rules of treaty  interpretation, reflected in Articles 31 
through 33 of the Vienna Convention on  the Law of Treaties, recognize that an 
examination in accordance with  the general rule reflected in Article 31 of the Vienna 
Convention may result in a meaning that is ambiguous, and that resort to the 
supplementary means of interpretatio n in Article 32 may be necessary
z. [Typically such 
analysis will permit a determinati on of the meaning of the t erms of the treaty, although 
there is no guarantee that recourse to suppl ementary means of inte rpretation will always 
resolve that ambiguity.] 
_______________  
z See for example Article 32(a) of the VCLT. 
 
[Sometimes that ambiguity is deliberate.  In some circumstances, reaching agreement on 
the terms of the covered agreements may have  necessitated the use of constructive 
ambiguity in a provision of a covered agreemen t where the negotiators leave unresolved 
particular issues by agreeing on  language that does not resolve  the issue and is capable of 
more than one interpretation.  Constructi ve ambiguity can serve as a placeholder 
marking an area where negoti ators accept that it may be appropriate to agree on 
disciplines but where further negotiation is necessary before those disciplines can be 
specified. 
 
WTO adjudicative bodies are not called to  determine if ambiguity is deliberate.]  
Ambiguity is ascertained from an  examination of the text.  WT O adjudicative bodies will 
determine whether the meaning of a text is ambiguous after applying  the customary rules 
of interpretation and in light of the evidence and argument presented by the parties to the 
dispute.  There is no separate requirement to  establish the intent behind or reason for the 
ambiguity. 
 TN/DS/25 
Page A-30  
 
  Gap-filling 
 [In light of the nature of th e covered agreements, there are at least two ways in which 
"gaps" in a covered agreement could be unacceptably filled, other than through 
negotiation.    
 First would be to read into the text of  a covered agreement an obligation or right 
that is not present in the text, for ex ample by extrapolating from a different 
provision.[
aa] 
_______________  
[aa Some commentators would give as an example of extrapolation a situation 
where a treaty interpreter argues that "if the negotiators agreed on x in this 
provision over here, then they must have intended to agree on y in this other 
provision."] 
 
 Second would be to resolve ambiguity in the text of a covered agreement in a 
manner that  supplements or diminishes rights and obligations under the covered 
agreement. 
 Neither type of "gap-filling" is an appropri ate function for WTO adjudicative bodies.  
Rather, the function of WTO adjudicative bodi es is to resolve disputes over obligations 
undertaken, not to substitute for negotiato rs and re-write, reduce or supplement the 
agreed text.] 
 
[With respect to the first type of gap-filling] , there have been several instances in which 
the Appellate Body has found that a panel has gone beyond the terms of a covered 
agreement and imputed obligations  that were not present in th e text.  The Appellate Body 
has correctly found that this is cause for overtur ning panel findings.  It is important to 
respect the limits of the agreement negotiate d.  A Member signing a covered agreement 
indicates by its signature that it is agreeing to the text of that agreement.  The Member is 
not indicating its acceptance to go beyond the text of that agreement. 
 
Similarly, prior reports of WTO adjudicati ve bodies are not covered agreements.  They 
do not themselves represent agreed text.  Accord ingly, it is not appropriate to treat or 
interpret a prior report as though it is agreement text or to use a prior report to add to or 
diminish rights and obligations under a covered agreement. 
 
[With respect to the second type of gap-f illing,] where the application of the customary 
rules of treaty interpretation leaves the meaning of a provision ambiguous, e.g., there may 
be two plausible meanings, a WTO adjudicative body should not use that language as the 
basis for validating a claim or a defense where that validation wo uld require foreclosing 
one of those meanings. 
 [WTO Members have agreed that the WTO dis pute settlement system is not to add to or 
diminish the rights and obligations under the covered agreements.  They have not agreed 
to delegate to WTO adjudicative bodies the task of filling in gaps in the covered agreements.] 
 
C.  PARAMETERS CONCERNING THE MEASURE UNDER REVIEW IN WTO DISPUTE SETTLEMENT 
 
Order of analysis  
Article 3.4 of the DSU provi des that: "Recommenda tions and rulings made by the DSB 
shall be aimed at achieving a satisfactory se ttlement of the matter in accordance with the 
rights and obligations under this Understanding and under the covered agreements."  
Accordingly, the purpose of the dispute settl ement system is not to produce reports or to 
"make law", but rather to help Members resolve trade disputes among them.   
  TN/DS/25 
 Page A-31 
 
 
  WTO adjudicative bodies should avoid making findings that are not aimed at resolving 
the dispute.  It is useful to bear in mind  that such bodies are not permitted to render 
authoritative interpretations of the covered agreements.bb  It is also useful to bear in mind 
that the "matter" that is re ferred to dispute settlement in the standard terms of reference 
under Article 7 of the DSU consists of the pa rticular "measure" cha llenged together with 
the claims concerning that measure.cc 
_______________  
bbArticle IX:2 of the Marrakesh Agreement Establishing  the World Trade Organization  
makes clear that the Ministerial Conference and the General Council "have the exclusive 
authority to adopt interpretatio ns" of the covered agreements. 
cc See, e.g., Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R, adopted 25 November 1998, para. 72. 
 
The order of analysis followed by WTO adjudi cative bodies should respect the function 
assigned to those bodies.  In particular, the or der of analysis should respect the fact that 
findings need to relate to "measures affect ing the operation of any covered agreement"dd 
taken by a Member. 
_______________  
dd Article 4.2 of the DSU. 
 [For example, consider the situation where one party claims another Member's measure 
does x, and that x is inconsistent with a provision of a covered agreement, but the 
responding Member claims that  its measure does not do x.  In such a situation, it would 
not be appropriate for a WTO adjudicative body first to make findings on whether x is 
inconsistent with a provision of a covere d agreement before making findings on whether 
the measure at issue actually does x.  Otherwise, in the event th at the body finds that the 
measure does not do x, the body's finding that x is inconsistent with a covered agreement 
is not aimed at a "measure ... affecting the operation of any covered agreement taken 
within the territory" of a Member.
ee  Instead the finding is an advisory opinion divorced 
from the measure at issue (and therefore divo rced from the actual "matter" referred to 
the body).] 
_______________  
ee Article 4.2 of the DSU. 
 
[A further implication of the "measure af fecting" language is that WTO dispute 
settlement is not concerned in a dispute with a measure of a Member that expired prior to 
the date of the request for consultations by  another Member in th at dispute or that 
otherwise does not exist as of the da te of the request for consultations]. 
 
The question of whether a measure does x is a factual question beca use at that point it is 
not a question of the interpretation of a provi sion of a covered agreement or of whether a 
provision applies to the measure. 
 Definition of a measure 
 
It is useful to recall that the covered agreements do not define the term "measure."  
There is no such definition because the conten t of the term may vary from case to case.  
For example, what constitutes a "measure" for purposes of the General Agreement on 
Tariffs and Trade 1994  may be different from what cons titutes a measure for purposes of 
the Agreement on Trade-Related Aspect s of Intellectual Property Rights  or the DSU. 
 The Appellate Body has suggested that "instr uments of a Member containing rules or 
norms could constitute a 'measure', irrespectiv e of how or whether those rules or norms 
are applied in a particular instance."
ff  The Appellate Body, in using the term "could 
constitute" clearly indicated that this is not intended to be a definition of "measure," but 
rather one starting point for analysis. In particular, not all such "instruments" are 
measures and not all measures are "instruments ."  For example, a measure may not be an 
"instrument" but may be an "action" by a Member or in some cases could be viewed as 
"inaction" by a Member.gg  See for example the discussion by the Appellate Body in TN/DS/25 
Page A-32  
 
  Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico :  "In 
the practice established under th e GATT 1947, a 'measure' may be any act of a Member, 
whether or not legally binding, and it ca n include even non-binding administrative 
guidance by a government.  A measure can also be an omission or a failure to act on the 
part of a Member.hh 
_______________  
ff Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan , WT/DS244/AB/R, adopted 
9 January 2004, para. 82. 
gg For example, a failure to submit a notifi cation to the WTO could be viewed as 
"inaction."  (See, e.g., Article 12.6 of the Agreement on Safeguards .) 
hh WT/DS60/AB/R at footnote 47, internal citations omitted. 
 
Conversely, not all "instruments"ii that contain rules or norms are "measures."jj 
For example, a "measure" would not include: 
_______________  
ii Definitions of "instrument" in clude:  "A formal or legal docu ment in writing, such as a 
contract, deed, will, bond, or lease" and "Any thing reduced to writing, a document of a 
formal or solemn character, a writing given as a means of affording evidence."  Black's 
Law Dictionary, Sixth Edition. 
jj Instruments that are not "measures" could nonetheless in some circumstances assist in 
understanding the meaning of a particular measure. 
 
(1) legislative history that does not itself have any legal standing or effect other than 
as legislative history; 
 
(2) statements without effect, for example, a statement by an in dividual legislator 
that is solely the expression of that individual's view; and 
 
(3) statements in cour t decisions that are obiter dicta , or dissenting opinions in court 
decisions. 
  
Mandatory vs. discretionary measures 
 A WTO adjudicative bo dy is not permitted to presume that a Member will choose to 
breach a covered agreement.  Accordingly, where a measure provides a Member with the 
discretion to comply with a covered agreemen t, the measure may not be found to be 
inconsistent as such with the covered agreemen t, even if the discretion is broad enough 
also to permit the Member to act in a mann er that would breach the covered agreement.] ] 
 
 
_______________ 
  TN/DS/25 
 Page A-33 
 
 
  Annex 2:  Thematic Overview 
 
This overview is intended to reflect my percepti on of the state-of-play on the various issues at 
this point in time, based on recent discussions, and to identify possible ways forward for our future 
work.  This overview also reflects, where releva nt, my own observations in light of the general 
considerations highlighted in my introductory comme nts. It does not pretend, however, to reflect each 
and every detail of the discussions to date.   For the sake of clarity of presentation, the issues are 
grouped around broad themes.  
Third party rights 
 
Recent discussions on third-party rights have been  based on various legal drafting proposals, 
addressing third party rights in consultations (J OB(05)/19/Rev.1, JOB(06)/89, JOB(06)/175 and 
JOB(06)/224/Rev.1), in panel proceedings and at  the appellate stage (JOB(05)/19/Rev.1 and  
TN/DS/W/92).  
In respect of consultations , there seems to be broad support for the proposal that responses to 
third party requests to be joined in consultations be notified to the applicant Member and to the DSB 
in writing and within a specific deadline, although there remains some discuss ion as to exactly what 
this timeframe should be, taking into acc ount the overall timeline for consultations.
4  No clear 
convergence has emerged in favour of proposed modi fications of the manner in which requests would 
be addressed either for the defendant to allow all or no Members' requests to be joined, or for a 
request to be denied only where both parties oppose it.  A number of Members have highlighted the 
need to preserve the current flexibility and contro l for the parties at the consultations phase.   
 
As to panel proceedings , there is broad support for enhanci ng third party rights at the panel 
stage to a level comparable to what has been granted on a case-by-case basis as extended third party 
rights by panels to date, and for the possibility of granting further enhanced third party rights on a 
case-by-case basis.  The question remains open whethe r such case-specific enhanced third-party rights 
at the panel stage should be granted subject to an agr eement of the parties or best left to the discretion 
of the panel after having consulted the parties.  Several Members have expressed a preference for 
preserving the current flexibility for the panel to decide  whether to grant such additional rights or not 
in light of the circumstances of the case. 
 
A proposal to allow Members to become  third parties for the first time at the appellate stage  
of a dispute has received support from a significan t number of Members.  There remains, however, 
some concern that this may create excessive a dditional burdens for appellate proceedings, in 
particular for AB hearings.  Various improveme nts have been proposed to clarify the language 
defining the rights of third participants at the a ppellate stage, taking into account preferred drafting 
guidelines as well as the corresponding language in Article 10 in relation to the panel stage.    
In light of the above, I have proposed in Annex 1 some possible text.  I am aware that on 
some aspects, this proposed text goes beyond our cu rrent level of convergence.  This is reflected 
through square brackets.  Nonetheless, I believe that in light of the level of maturity reached on these 
issues overall, and taking into account the various elements of discussions to date, these texts can 
constitute a sound basis for our further work, wh ich I suggest should focus on achieving convergence 
on the above-identified main outstanding issues.  In addition, I perceive a close link between 
                                                     
 
4 With respect to the timeframe for requests and responses, it must also be borne in mind that if the 
overall timeframe for consultations is reduced to 30 da ys (see section on timeframes), then the timeframes for 
requests to be joined and for responding to such requests would presumably need to be adjusted accordingly.  
This could mean periods as short as 5 and 3,5 days respectively, which may not be practicable in all cases.   TN/DS/25 
Page A-34  
 
  discussions on third party rights for Members and ce rtain aspects of transparency, which could be 
further explored in our negotiations.   
Panel composition  
 
Two proposals have been under discussion that relate to panel composition: 
JOB(05)/144/Rev.1, suggesting the creation of a pa nel roster and an improved procedure for panel 
composition, and TN/DS/W/89, that would explicitly define the expertise expected of panelists.   
 
A number of Members have expressed concern that the establishment of a panel roster could 
entail significant procedural burdens, and that fl exibility was needed to select panelists with 
appropriate experience and expertise for each dispute.   In the course of recent discussions, suggestions 
were made to focus on the part of the proposal  relating to the panel composition procedure and 
improve the current practices to select panelists under Article 8 of the DSU.  Further to these 
discussions, the proponent has been working with in terested delegations towards improving the part 
of its proposal relating to the actual panel com position process.  The text contained in Annex 1 
reflects these efforts.  I propose that we pursue our wo rk on the basis of this text, focusing in the first 
instance on a clarification of how the proposed mechanism would function. 
With respect to the proposal to define the e xpertise expected of panelists, recent discussions 
suggest that a number of Members agree that expe rtise relevant to the issues under consideration in 
the specific case is already, in practice, part of the considerations deemed pertinent to panelist selection.  Some drafting improvements are suggest ed in Annex 1 to take into account comments 
made in these discussions, in order to clarify the description of the required expertise. 
 
Remand 
 
Recent discussions on the possibility of introduc ing a remand procedure in the DSU have 
been based on a joint drafting proposal contained in JOB(04)/52/Rev.1, and, more recently, on an 
informal working document reflecting further jo int work of interested delegations.    
 
There is some common understanding among partic ipants as to what essential features a 
remand mechanism could entail, if adopted.  The pu rpose of such mechanism would be to allow the 
panel to make additional findings, under an accelerated  timeframe, in respect of issues for which the 
Appellate Body has found that it is unable to complete  its legal analysis for lack of sufficient relevant 
factual determinations (or informati on) in the panel's original report (or record).   The Appellate Body 
would identify the existence of such situation and give guidance to the panel as to how to address it, 
but it would be for a party to the dispute to initiate th e referral procedure in or der to have such issues 
remanded.  
 
 While significant progress has been made to wards clarifying the possible modalities for 
remand, there are Members sceptical  about the possibility of devising legal text to address remand 
without raising new concerns (e.g., extended timefra mes and impact on implementation).   My sense 
is that any agreement on this issue remains s ubject to confirming modalities and corresponding legal 
text such as to satisfy all Members that the inte gration of remand in the system would create only 
minimal disruption to existing procedures. 
 
Key outstanding issues that have emerged in th e discussions include: (i) whether both parties, 
or only the complainant, might have a legitimate inte rest in pursuing remand; (ii) the definition of the 
circumstances that could give rise to remand; and (iii) the implications of a remand procedure on 
overall timeframes in the dispute and on th e implementation of completed rulings.   
  TN/DS/25 
 Page A-35 
 
 
  Most recently, some additional steps have been  taken towards clarifying and achieving greater 
convergence on these issues, as a result of a joint ef fort among interested delegations.  There appears 
to be support for defining the situations giving rise to remand with reference to the current practice of 
the Appellate Body in respect of situations in which it cannot complete the analysis , even if there 
remains some discussion as to how best to reflect this  through legal text.  Th ere also appears to be 
support for the remand procedure not to delay the adoption of the reports and the implementation of 
any completed rulings .   
 
The draft legal text I have proposed as basis for further work in Annex 1 is based on the 
recent informal working document incorporating these elements.  With respect to the identification of 
which party may have the initiative of remand , I believe that further work would be required and this 
is reflected in the proposed draft text.  The text also contains some language intended to take into 
account the general considerations highlighted in  my introductory comments, including drafting 
consistency.   Mutually agreed solutions 
 
The proponents have recently combined their respective draft legal texts into a revised 
proposal (JOB(08)/40), which is the basis for the dr aft legal text I have included in Annex 1.  In 
addition, I have proposed some adjustments to re flect drafting suggestions made in the course of 
discussions.   
 
Strictly confidential information 
 
Discussions relating to strictly confidentia l information (SCI) have been based on 
JOB(06)/56.  
 
Overall, there seems to be wide support for th e objective of the proposal, which is to enhance 
the protection of information, such as business confid ential information, that is not readily available 
and requires special protection, in order to be presented in WTO dispute settlement proceedings. For 
this purpose, the proposal would build on the existin g practice of panels and the Appellate Body to 
clarify the modalities for the protection of strictly confidential information submitted in the course of 
dispute settlement proceedings.  There has only b een limited recent discussion, however, of the 
operational details of the proposal.  
Several Members have stressed the need to pr eserve flexibility to adapt the procedures on a 
case-by-case basis by allowing for the adoption of more detailed procedures in individual cases as 
necessary.   The proposal tries to address this c oncern by reserving the possibility for adjudicators to 
depart from the proposed standard procedures after consulting the parties.  
There has been some discussion of the preferre d legal form for the clarification of SCI 
procedures.  Some Members noted that providing for protection of SCI in the DSU itself would 
contribute to enhancing the confiden ce of holders of confidential information in the system's ability to 
protect such information.  The proposal tries to  address this concern, too, by proposing drafting 
changes to Article 18 of the DSU and by suggesting the insertion of a new Appendix to the DSU, which would contain most of the detaile d provisions on SCI being proposed.   
 
It was noted by some Members that the propo sed text did not address the question of access to 
SCI for third parties, or of SCI submitted by a third party.   More generally, the protection of SCI has 
linkages to all DSU provisions and proposals a ddressing the confidentiality or publicity of 
information, submissions or hearings, including Ar ticles 10, 18, and the proposed Appendix 5.  In 
consideration of this, I have pr oposed draft language in these provisi ons aiming to ensure consistency 
of treatment among different parts of the pr oposed draft legal text in Annex 1.   TN/DS/25 
Page A-36  
 
   
In light of the above, I propose that our future work on this issue focus on confirming the 
legal form through which the protection of SCI could be organized, pursuing a discussion of the 
operational details of the proposed  procedures and ensuring consiste ncy between any provisions to 
protect SCI and other relevant existing and proposed provisions in the DSU. 
 
Sequencing 
 
Recent discussions on sequencing have been based primarily on JOB(05)/71/Rev.1 and 
JOB(04)/52/Rev.1, which proposed alternative appro aches to addressing this issue.  Most recently, a 
number of interested delegations, including the pro ponents, worked jointly to wards achieving greater 
convergence.  As a result of these efforts, an in formal working document setting out a possible single 
approach to this issue was presented recently a nd seems to have received a significant level of 
support.    
Discussions prior to the presentation of this more recent text suggested that there was 
generally support for clarifying the possibility for consultatio ns prior to initiating compliance panel 
proceedings , although some Members expressed concern as to how constraining any requirement to 
enter into consultations should be  in this context.  There also appears to be some support for improved 
notification to the DSB of measures taken to comply , although some Members expressed doubts as to 
whether the proposed notification should play a role in triggering retaliation proceedings.   
Discussions have also addressed the question of which party should have the possibility of initiating 
compliance proceedings .  Several Members expressed concerns as to the implications of the 
respondent party initiating such proceedings  for the panel's terms of reference. 
 
The recent working document proposes that (1) consultations would be possible, but not 
required, prior to the establishment of a complianc e panel;  (2) compliance panel proceedings would 
be initiated by the complaining party;  and (3) the initiation of retaliation proceedings would be 
possible only after one of certain listed events has occurred, including a prior determination of non-
compliance through compliance proceedings.  To the ex tent that this text re flects further convergence, 
among proponents at least, towards a single approach  incorporating these elements, this represents 
significant progress.   
 
This working document also contains other aspect s, including the possibility of an appeal of 
legal issues arising from arbitral decisions unde r Article 22.6, which has not been previously 
considered.  This point, as well as others , will require further discussion.    
 
In light of the above, I propose that we pursue our work on the basis of the overall approach 
reflected in this working document (as described above), with the understanding that not all Members 
are persuaded, at this stage, that such a solutio n to the sequencing issue is necessarily desirable, and 
that a number of specific aspects still require furt her discussion.  For this purpose, Annex 1 essentially 
reproduces the recent non-attributable text, with cer tain additional drafting suggestions intended to 
clarify the text in line with the general consider ations outlined in my introductory comments.   
 
Specific issues warranting further consideration could include a clarification of the proposed 
triggering events for the initiation of retaliation proceedings, the relationship between the events 
triggering the negotiation of compensation and those triggering the initiation of proceedings for the 
suspension of concessions or other obligations
5, and the relationship between negotiation of 
compensation and the initiation of retaliation proceedings .  In light of the concerns expressed as to the 
potential timeframe implications of this proposal, I pr opose that we also consider this question in the 
                                                      
5 This particular issue also has linkages to the proposal for initiation of compensation negotiations 
before the expiry of the reasonable period of ti me (see the section on effective compliance below).  TN/DS/25 
 Page A-37 
 
 
  light of potential time-savings in other phases of the proceedings (see the section on timeframes 
below).  
Post-retaliation 
  There has been little recent discussion of this issue, which is generally perceived to have 
linkages to the "sequencing" issue.  Specifically, it has been assumed that the approach to be adopted 
on sequencing could usefully inform and guide the a pproach to be followed on post-retaliation.   As 
originally on "sequencing", two alternative a pproaches have been proposed in respect of post-
retaliation (in JOB(04)/52/Rev.1, and JOB(05)/ 47/Rev.1/Corr.1 in English and French, and 
JOB(05)/47/Rev.1 in Spanish).  Both proposals w ould aim to introduce a procedure to determine 
whether compliance has been achie ved, when the Member concerned considers that it has complied 
after an authorization to retaliate has been granted to a successful complainant.      
  Issues raised in discussions to date have incl uded the determination of the party that could 
initiate such proceedings, the nature of recommenda tions and rulings arising from such proceedings 
(an issue that was noted by some Members to relate perhaps more generally to compliance proceedings rather than post-retaliation per se ), and the question of what implications partial 
compliance might have in this context.     I propose that we resume work on this  issue taking into account the recent work on 
sequencing.  In particular, I propose that we seek, to the greatest extent possible, consistency and 
parallelism between compliance proceedings unde r Article 21.5 and procedures to determine 
compliance in the context of "post-retaliation".  In  light of this, and taking into account the proposed 
approach reflected in the draft legal text on sequenc ing in Annex 1, there could be an assumption that 
the complainant would initiate proceedings for the de termination of compliance at this stage also, and 
that consultations would not be required in this context either. 
 
Transparency and amicus curiae  briefs 
 Publicity of hearings and submissi ons and timely access to panel reports 
  Proposals to open panel and Appe llate Body hearings to public observation, to make access to 
submissions public and to ensure timely access to pa nel reports have been discussed on the basis of 
TN/DS/W/86.   A number of Members have expressed support for enhanced transparency through opening 
panel and Appellate Body hearings  to the public, and suggested that such openness could contribute 
to greater public confidence in the dispute settleme nt process.  Others, while not necessarily opposed 
to transparency as such, continue to have reserva tions as to whether the proposed systematic opening 
of meetings would be beneficial or appropriate. Sp ecifically, concern has been expressed in relation to 
the preservation of the intergovernmental character of dispute settlement proceedings, the protection 
of confidential information, as well as practical modalities and potential budgetary implications.  It 
has also been noted that not even Members who are third parties currently have the right to attend the 
entirety of panel meetings and that balance s hould be maintained between enhancing external 
transparency and the rights of Members in  the context of WTO dispute settlement. 
  In the course of discussions, it was confirmed that the protection of strictly confidential 
information should be ensured, and that the pr actical modalities for opening would not necessarily 
involve physical presence of observers in the room.  The discussions also sugg ested that a range of 
modalities may be available to address this issue,  not necessarily limited to systematic complete 
opening or entirely closed meetings. Recent practice under the current rules, where the agreement of 
the parties has been taken into account in deciding to  open hearings in a variety of formats in specific TN/DS/25 
Page A-38  
 
  cases, has also been referred to and may be informative in this respect.  These elements should 
facilitate our further work towards identifying possi ble ways to narrow down remaining differences of 
view on this issue.      With respect to the question of access to submissions , a significant number of Members have 
expressed support for making submissions to the pa nels and the Appellate Body public.  Some 
Members remain unconvinced that this would be desira ble.  Here again, some useful clarifications 
have emerged from the discussions.  In particular, it h as been clarified that the protection of strictly 
confidential information would be ensured.  Al so, it was suggested that the Member making the 
submission would not be required to ta ke any particular steps to ensure  the publicity of its submission, 
and that this could be done through a central regist ry mechanism maintained by the Secretariat.   
  It was also noted by some Members that th e DSU already foresees, in Article 18.2, the 
presentation, upon request of a Member, of a non-confid ential version of the information contained in 
submissions to a panel or the Appellate Body, so  that the principle of access to a non-confidential 
version of submissions is already present in the DS U, albeit without specific details as to when and 
how such versions might be requested and obtained.    It has further been noted that, among those 
Members who currently already make their own subm issions public, the practice varies as to the exact 
timing and modalities of such access.      Overall, these elements suggest that there ma y be a range of possible modalities that should 
be explored in more detail to pursue this issue,  not necessarily limited to immediate and complete 
access or complete confidentiality of submissions .  These considerations should guide our further 
work towards narrowing differences of view on this issue.     Finally, support has been expressed by some Members for allowing an early release of the 
panel's final report in its original language without affecting the official circulation of the report in the 
three working languages and the legal consequences att ached to this circulation.  Concern has also 
been expressed, however, that this may prejudice th ose Members whose working language is not that 
of the report.  To address this concern, it has been  suggested that only the fi ndings and conclusions of 
the report might be released.  The issue of timely access to final reports of panels has also been noted 
to be closely related, in practice, to the time requi red for the translation of panel reports, which can be 
considerable.  This, in turn, is closely related to  the length of the reports themselves, including any 
annexes.    
Amicus curiae briefs 
  On amicus curiae briefs, some progress has been made towards clarifying the concerns 
underlying Members' respective positions.  Th ere seems to be a shared view that amicus curiae  briefs 
should not create an undue burden for the Members i nvolved in the relevant dispute.  For some 
Members, this would be ensured through the intr oduction of a general pr ohibition on unsolicited 
briefs, which they argue would be in line with  the intergovernmental nature of WTO dispute 
settlement.  For others, regulating the timing of amicus briefs, their length and the procedures to 
address the admissibility and contents of amicus  briefs would ensure that appropriate guarantees are 
in place to manage such briefs.  Those Members also  argue that this would be an improvement on the 
current ad hoc  practice of WTO adjudicators concerning unsolicited amicus  briefs, and that it could 
enhance the image of the WTO and its dispute settlement system.    
 Any further consideration of the possibility of regulating the submission of amicus  briefs in a 
manner that would adequately address the concerns of all Members would require consideration of 
specific draft legal text.  Any Members interested in regulating the acceptance and consideration of 
amicus briefs are therefore encouraged to develop draft language to that effect, addressing issues such 
as: (i) the timing and procedure for submitting amicus  briefs;  (ii) the maximum length of 
amicus   TN/DS/25 
 Page A-39 
 
 
  briefs;  (iii) the procedure and preconditions fo r adjudicators addressing the admissibility and, once 
considered admissible, the content of amicus briefs; and (iv) the implications of such procedures for 
Members involved in the relevant dispute.   Further work on this issue would also need  to take into account the concern expressed by 
several Members that non-Members should not have more opportunities to participate in the 
proceedings than Members themselv es.  Indeed, some Members have observed that this issue relates 
to access to the dispute settlement syst em, rather than to transparency per se . 
 
Timeframes 
 
 The possibility of shortening timeframes at sp ecific stages of the proceedings has been 
discussed on the basis of JOB(07)/66.  In addition,  JOB(06)/222, JOB(06)/222/Add.1 contains various 
proposals to provide additional time for developing  country defendants at various stages.    
 
 In relation to the length of consultations , there has been support for shortening the minimum 
consultation period before a panel can be requested to 30 days, provided that sufficient flexibility is 
retained for the current timeframe s (60 days) to be maintained when the responding party is a 
developing country Member.  Discussions on the proposal for a further extension of 30 days in such cases suggest that a number of Members have reser vations to the notion that such extension would 
apply only where the complaining party is a deve loped country Member.  It was observed that the 
resource constraints that the proposal seeks to addr ess would be the same for the developing country 
defendant regardless of the status of the complain ant.  Some Members also questioned on what basis 
it was assumed that an additional 30 days woul d always be an appropriate extension.   
  With respect to panel establishment , support has also been expressed for establishing panels 
at the first meeting at which the request is consid ered, provided that suffici ent flexibility is preserved 
to defer the establishment in cases where the res pondent is a developing country Member.    
  Support has also been expressed for a revision of the timeframe for the presentation of first 
submissions  under Appendix 3, although it was suggested that the proposed period for the 
complainant to present its first submission could be somewhat longer than proposed.  A separate 
proposal to provide for additional time for developi ng country Members for the presentation of their 
submissions has also been discussed.  Questions aro se in relation to the definition of the benchmarks 
against which such additiona l time would be counted.   
  As regards the timeframe for the adoption of panel reports , there is a proposal to place 
adoption of panel reports on the same basis as Appellate  Body reports by allowing for panel reports to 
be proposed for adoption immediately upon their circul ation.  This would require doing away with the 
20-day deadline set out in regard to panel reports in Article 16.1 of the DSU.  Under the proposal, the 
deletion of the first paragraph of  the Article 16 of the DSU would also involve deleting the second 
paragraph of Article 16 as a consequential change. 
 
 In the discussions, the proponent indicated that the time-saving resulting from this portion of 
the proposal would be relatively limited but it might be still useful to put the adoption of panel and 
Appellate Body reports on the on the same footing.  Some Members indicated that this issue might be 
closely related to the proposal for timely access to  final reports.  While I don't perceive major 
objections to the proposal concerning the timeframe for the adoption of panel reports, I would suggest 
that we explore further any linkages with the propos al on timely access to final reports and with other 
timesaving proposals generally, as suggested below.   The draft legal text reflected in Annex 1 on these issues contains some specific drafting proposals intended to facilitate further progress, base d on discussions to date.  However, I would like TN/DS/25 
Page A-40  
 
  to suggest that in our further work on these i ssues, we consider these various proposals not only 
individually and separately as we have essentially done so far, but that we also aim to approach them 
in a more comprehensive manner.  In particular, I propose that we consider th ese proposals in light of 
their combined effect among themselves and also in  light of their combined effect with other 
proposals that have timeframe implications (for ex ample, a shortening of the minimum duration for 
consultations may have a significant impact on the ti meframes within which requ ests to be joined in 
consultations and responses to such requests can be  made meaningfully, which has an impact on 
proposals relating to the conditions for joining in consultations).     
  More generally, it would also be useful to  assess the relative merits of time-savings or 
extensions of timeframes at various stages in light of their overall cost or contribution to the prompt 
and effective resolution of disputes.  In this exerci se, we will need also to take into account the fact 
that various other proposals may have incidental im plications on the timeframe for the completion of 
dispute settlement proceedings.   
 A proposal to shorten the overall timeframes for the settlement of disputes relating to 
safeguard measures  has also been discussed.  Some Members acknowledged that safeguards 
concerned fairly traded goods and in that respect differed from other trade remedies, and that their 
short duration created challenges for the effective resolution of disputes.  However, a number of 
Members also questioned whether there would be a b asis for singling out such measures, and on what 
basis it was assumed that it would be possible to tr eat them more expeditiously than other measures 
whose WTO-consistency is challenged.   
 
Developing country interests, including  special and differential treatment 
 A number of proposals are under discussion that address issues related to developing country 
interests, including but not limited to special and di fferential treatment (S and D).  A number of these 
proposals by developing countries, including some S and D proposals, are addressed in other parts of 
this document, as they also relate to other speci fic issues, such as effective compliance, mutually 
agreed solutions, third party rights, timeframes, or amicus  curiae  briefs.  Only proposals that have not 
been addressed in other sections are reflected in this section.    A number of developing countries have iden tified access to dispute settlement, and more 
specifically, resource constraints faced in accessing the system, as a significant concern.  Proposals to 
create a Dispute Settlement Fund for developing countries  and to introduce litigation costs  for 
developing country Members having prevailed in a dispute seek to address these concerns.  
Most recently, the proponents have presented informal  text combining elements of both proposals, 
such that litigation costs would be awarded wher e access to the Fund would not be possible.   
 
 Since there has been no opportunity yet to c onsider the possible combination of the two 
proposed mechanisms and the exact manner in whic h they may interact, I propose that our further 
work focus on a consideration of this recen t text, which is reflect in Annex 1.    
  Earlier discussions of both proposals separat ely suggest that a number of considerations 
would need to be taken into account in further work  on these issues, that would remain pertinent also 
in the context of a combined approach.  In particul ar, discussions to date suggest that progress on this 
issue would require a further elaboration of the following aspects:    – who the beneficiaries of such support would be, in light of the concern expressed that 
the situations of individual developing c ountries in respect of human and financial 
resources available for dispute se ttlement may vary considerably; 
  TN/DS/25 
 Page A-41 
 
 
    – the relationship of the combined propo sal with existing solutions, i.e. technical 
assistance and dispute settlement assistance provided by the WTO Secretariat, and assistance by the ACWL, and its added value compared to these solutions;  and 
  – the operational details of both mechanis ms, including budgetary implications.  
   
 Several proposals seek to ensure that adequate considerati on will be given to developing 
country interests in consultations .  This is proposed to be done by  strengthening the existing special 
and differential treatment provision in the DSU (A rticle 4.10), and also by defining further 
requirements to be followed during the consultati ons and in any subsequent panel request.   
 
 In discussions of these proposals, a number of Members sought clarification as to what exactly the proposed additional requirements entailed and what sort of situations they intended to 
cover.  Clarification was also sought of the inte nded legal implications, in any subsequent panel 
proceedings, of such requirements.  Also, several Members questioned why these requirements would 
only apply where the complainant would be a develope d country Member, in light of the fact that the 
interests of the developing country defendant being addressed though the proposals would be the 
same whatever the status of the complaining party.     Further work on these proposals could aim to  explore how the account to be taken of 
developing country interests in consultations might be clarified in a manner that addresses these 
concerns.  Some draft legal text is proposed in  Annex 1 to try to address some of these aspects. 
  Another proposal is intended to ensure that arbitrators determining the reasonable period of 
time for implementation under Article 21.3(c) take into account the pa rticular problems and interests 
of developing countries.  The proponents have clarifie d that the intent of this proposal is to codify 
existing practice, to ensure that due considera tion would be given where necessary to developing 
country interests, especially where, as respondents, they may need additional time to comply.   While other Members appeared to agree that in practice, arbitrators under Article 21.3(c) already took into 
account such interests and did not question the legi timacy of such practice, some Members sought 
further clarification of the intent of the proposal, if it would simply confirm existing practice.    Flexibility and Member control  
 
A number of proposals have been under considera tion under the common heading of flexibility and 
Member control (in TN/DS/W/82, TN/DS/W/82/A dd.1, TN/DS/W/82/Add.1/Corr.1, TN/DS/W/82/ 
Add.2 and TN/DS/W/89 ).  
 
 In respect of proposals to allow the parties to jointly seek the deletion of parts of panel or 
Appellate Body reports  that they deem unnecessary for the resolution of the dispute or to allow 
Members to adopt only partially such reports, a significant number of Members have expressed 
concerns as to how these may affect the adjudicators’ determinations and the outcome of a case, as well as the integrity of reports, in particular under deletion by mutual agreement.  At this stage, 
positions seem to remain quite far apart on these issues.   Further work could therefore seek to clarify 
the extent to which the objective of either proposal  might be achieved, while taking into account the 
concerns expressed by other Members. 
 
 In respect of the proposed introduction of an interim review at the appellate stage  comparable 
to that currently existing at the panel stage, a numbe r of Members appeared to agree that this proposal 
could lead to improvements in the quality of the reports, and the concerns expressed have centered 
mostly on the implications of the proposal on timeframes (an additional 30 days at most) as well as the potential implications of the parties having ex clusive access to the pre-interim version of the TN/DS/25 
Page A-42  
 
  report.   Further work on this issue could theref ore focus on addressing such implications so as to 
provide sufficient assurances that the benef its would outweigh any potential downsides. 
 
 There appears to be broad support for introducing the suspension of panel or Appellate Body 
proceedings upon joint request of the parties . In consideration of the specific questions that have 
arisen on the operational details of these proposals, in particular in relation to the conditions for 
resumption, I have made some drafting proposals in Annex 1 for the consideration of Members. 
  With respect to the possibility of providing additional guidance to adjudicators  on the use of 
public international law, the interpretive approach  to be followed, and the measures under review, it 
has been clarified that the intent would be for the DSB to a dopt such guidelines in a decision that 
would not have the legal status of treaty text.   Overall, there does not appear to be a common understanding emerging from discussions so 
far, as to exactly how additional guidance might be  provided to adjudicators on these various issues.  
While some Members have acknowledged the releva nce of the issues the pr oposal seeks to address, 
several Members have also expressed doubts as to wh ether such guidance to adjudicators would be 
appropriate or feasible, in particular in light of the potential for either replicating provisions already 
contained in the DSU or being overly prescriptive, while not necessarily being able to capture all the 
intended situations.  Furt her work on these issues could ther efore focus in the first instance on 
streamlining the issues and the relevant draft text, with a view to clarifying what might form a core 
basis of commonly agreed notions in respect of which some guidance could be provided.    
  In this context, considerati on could be given to the following aspects, which have been raised 
in the discussions:  
 – In respect of the proposed guidance on the use of public international law, the 
contours and relevance to WTO dispute settleme nt of customary rules of international 
law, and of non-WTO sources of public in ternational law more generally, was 
discussed.  It was also asked to what inte nt the proposed guidelines were intended to 
modify, rather than confirm, the existing practice. 
 
 – In respect of the proposed guidance on the interpretative approach to be followed, it 
was also asked whether it is implied in th e proposed text that various interpretive 
approaches, other than that prescribed in Ar ticle 3.2 of the DSU, might be acceptable, 
what exactly the reference to "constructiv e" ambiguity was intended to reflect and 
how various forms of ambiguity might be  distinguished from each other and from 
mere imprecision, and whether it was implied that in case of ambiguity, the 
adjudicator might not complete the inte rpretation of the relevant provision.  
Clarifications were also requested ab out "gap-filling" and how it was to be 
distinguished from ambiguity or from a party's disagreement with a legitimate 
application of the customary rules of interpretation.  
 
 – In respect of the proposed guidance on measures under review, it was observed that 
the section entitled "order of analysis" s eemed in fact to deal with "advisory 
opinions", and questioned whether the chosen specific examples adequately reflect all 
relevant situations and whether the pr oposed language on expired measures might 
imply new limitations on Members' ability to challenge certain measures. 
   TN/DS/25 
 Page A-43 
 
 
  Effective compliance 
 
 Several proposals seek to promote prompt a nd effective compliance by strengthening the 
remedies available under Article 22 of the DSU.    
 The proposal to introduce collective enforcement of recomm endations in cases involving 
developing country respondents  has not been discussed in great deta il yet – at least recently.  Some 
useful clarifications have been provided in initial discussions, but further understanding of the 
underlying concepts as well as the proposed modaliti es of the proposal would be needed for a fuller 
assessment of the proposal.  In particular, clarificati on of the concepts of "legitimate expectations of 
the developing country Member" and "effects of the suspension of concessions upon the economy of 
the developing country" would be important, as well as a clarification of the exact sequence of events 
that would arise under this proposed procedure.    In relation to compensation and suspension of concessions  or other obligations to cover 
nullification or impairment of benefits su ffered during the reasonable period of time , initial 
discussions of this proposal revealed questions as to various operational aspects, that could also be further explored.  Such questions include the in tended relationship between a successful negotiation 
of compensation and any subsequent request for retaliation, and the modalities though which 
retaliation would be calculated and applied, where relevant, in relation to the reasonable period of 
time for implementation.  In addition, drafting c onsistency with proposals on "sequencing" to the 
extent that they affect the same provisions (i.e. the definition of the circumstances in which remedies 
can be sought), should be further clarified as necessary.   Finally, a proposal has been under consideration to make cross-retaliation available to 
developing country defendants  without requiring specific justification as to why same-sector or same-
agreement retaliation is not practicable or effective.   In discussions of this proposal, several Members 
recognized the possible challenges for smaller econom ies of retaliating effectively against larger 
trading partners.  It was also commented, however, that this concern was not limited to developing 
country defendants, and that it could arise also  where the other party was a developing country 
Member.  In light of these discussions, further work  on this proposal coul d focus on exploring how 
these considerations might be taken into account in cl arifying the situations in which cross-retaliation 
might be facilitated, should Members agree that this  would be desirable as such in certain cases.  
  Overall, a number of Members have expressed sympathy for the underlying objective common to all these proposals, namely to promote prompt and effective compliance with recommendations and rulings of the DSB.  However, in  light of the fact that the details of some of 
these proposals have not yet been fully explored, furt her work is still required in order to clarify the 
extent to which this can be achieved through one of the above proposals or a combination thereof, 
taking into account both the operational and underlyi ng conceptual  aspects of the proposals.   
 
 
_______________ 
  TN/DS/25 
 Page B-1 
 
 
  APPENDIX B: 
   
INFORMAL DSB SPECIAL SESSION MEETINGS (MAY 2010 TO APRIL 2011) 
CHAIRMAN'S SUMMARIES OF RECENT WORK  
    The text below reflects the summaries of the work conducted in the DSU negotiations between 
May 2010 and April 2011, as presen ted by the Chairman at informal meetings of the DSB Special 
Session at the conclusion of each negotiating week.  These summaries are presented by the Chairman 
under his own responsibility and without prejudice to the views of any participant.  
 
A. 
WEEK OF 17-21  MAY 2010 
1. Post-retaliation  
1. We started with a discussion on post-retaliati on, which we could not cover in our earlier 
discussions based on the draft legal text circulated in July 2008.6   
2. We explored the extent to which there mi ght be parallelism between "pre-retaliation" 
compliance proceedings and proceedings at the pos t-retaliation stage.  We discussed whether the 
original complainant or the original res pondent should initiate pos t-retaliation compliance 
proceedings, and how the burden of proof would work in practice under the two scenarios.   
3. Unfortunately, we could not bridge the gap be tween these positions, even though one original 
proponent of post-retaliation indicated  that they would look into what  is supposed to happen under the 
second sentence of footnote (k) to Article 22.8(d)(i) of  the draft text contained in the July 2008 text7. 
2. Sequencing 
4. The discussions in the small groups addr essed the following aspects of sequencing: 
1. the initiation of compliance proceedings  in the context of sequencing; 
2. the definition of events that can trigger a request for an authorization to suspend 
concessions or other obligations (Article 22.2bis); 
3. the relationship between negotiation of comp ensation and the initiation of retaliation 
proceedings; 
4. improving the notification of measures take n to comply (Article 21.5(b));  and 
5. the time implications of sequencing. 
5. The discussions addressed technical issues rela ting to these five aspects of sequencing as 
reflected in the July 2008 text.8  Some participants raised the idea of adjusting specific portions of the 
draft legal text as a result of the discussions, and I encouraged delegations to  continue working among 
themselves on these matters so as to bridge the remaining gaps on sequencing. 
                                                      
6 See Appendix A, at pp A-17 and A-18. 
7 See Appendix A, at pp A-18 and A-19. 
8 See Appendix A, at p A-13 and A-14. TN/DS/25 
Page B-2  
 
  B. 
WEEK OF 21-25  JUNE 2010 
1. Effective compliance 
6. With respect to "collective" or "group" retaliation , our aim this week was to clarify some 
aspects of the African Group proposal, which is reprodu ced at Article 22.6, subparagraphs (b) and (c), 
in the July 2008 text.9  The discussion helped in clarifying the intentions of the proponent, and to 
identify possible areas of overlap and areas where furt her clarification was required in the text of the 
proposal to distinguish it, where necessary, fro m other provisions.  The proponents undertook to 
review the relevant language to address these points.  In particular, they will review Article 22.6 
subparagraphs (c) and (b)(ii), and try to find some language to reflect the objectives pursued by these 
provisions.  The proponents will revise the terms of  subparagraph (b)(iii) in light of the level of 
suspension as defined in Article 22.4 and referred to in subparagraph (b)(i).  Further, the proponents 
will come back with a flowchart of its proposal and with responses to the questions raised on its 
proposal.  We will return to these matters in due course. 
7. Subsequently, we had a more general discussion of the principle underlying the proposal, i.e. 
the possibility for a group of Members to retaliate "on behalf" of a successful complaining developing 
country Member who would not be in a position to  apply the suspension itself without causing harm 
to its own economy.  While there was some symp athy for the concerns being addressed through the 
proposal, a number of Members are still not persuade d whether the proposal could properly address 
these concerns.  In particular, it was noted that it would be true generally for all Members that they risk causing themselves economic harm in applying retaliatory measures, and this alone would not 
distinguish situations in which the suspension might be so harmful as to justify recourse to collective 
retaliation as described in the proposal.  It was su ggested that the proponents specify the types of 
situations at issue. 
8. It was also questioned whether the "group" a pproach could address the proponents' concerns, 
since other Members were likely to also suffer fro m the imposition of retaliatory measures and thus 
have limited incentive to join in a "group" to impose retaliation with regard to a dispute that they were 
not part of.  At the same time, it was highlighted that compliance is a systemic issue of general 
interest to the entire Membership. Several Memb ers explained the limitations faced in imposing 
retaliatory measures and why they believe the field n eeds to be levelled in this context.  A number of 
questions also remain as to how the propo sed mechanism would work in practice.   
9. On cross-retaliation
,10 the discussion in this phase has only started and we could not complete 
it for lack of time.  The principle of cross-reta liation already exists under Article 22.3, and we 
discussed why cross-retaliation should be facilitated for a developing country against only developed 
countries.  We will come back to this subject at the next session. 
10. As regards monetary compensation ,11 delegations seemed to share the view that compensation 
is voluntary and constitutes a temporary remedy pendi ng full implementation, and that this would not 
be changed under the proposal.  Seve ral delegations were of the view  that monetary compensation is 
already possible under the current DS U as it has been used in some  cases, but some flexibility is 
needed under the proposal because monetary compen sation may not be the preferred option in all 
cases.  The proponent expressed its willingness to c onsider more flexible draft language if other 
Members need more flexibility. 
                                                      
9 See Appendix A, at page A-16. 
10 See Appendix A, at page A-14. 
11 See Appendix A, at page A-14.  TN/DS/25 
 Page B-3 
 
 
  11. The discussion demonstrated that further work is necessary on whether it would be desirable 
to spell out in the DSU that monetary compensation is  a preferred, or even the default, option, and if 
so how strong this preference should be.  We al so need to work further on whether monetary 
compensation should be the preferred option only fo r developing countries or rather for all Members. 
12. On the proposal for suspension of concessions  covering the reasonable period of time for 
implementation  (or "RPT"), we have only started our di scussion, and will need to revert to it. 
13. Korea and Ecuador circulated non-papers on ef fective compliance, and we briefly discussed 
these among the proponents of effective compliance as well as with the wider group of interested delegations.  Ecuador and Korea indicated willingness to discuss their non-papers with any interested 
delegations. 
2. Sequencing 
14. On sequencing, we only had time for the two as pects we could not discuss in the week of 17 
May, namely  (i) the role of consultations in comp liance proceedings (Article 21.5(a) and (c)(i));  and 
(ii) the possibility of appealing legal issues arising from Article 22.6 arbitral decisions (Article 22.7).
12 
15. On the issue of appeals of Article 22.6 arbitral decisions , there was a detailed discussion on 
the rationale of the proposal.  The proponents identified the main objectives as enhancing legal 
certainty and securing the predictability of legal fi ndings in arbitrations.  Some delegations asked 
questions concerning:  (i) the type and extent of  legal issues that would be reviewable by the 
Appellate Body;  (ii) whether what is perceived by some delegations as a sometimes fuzzy borderline 
between legal and factual issues could not create problems;  and (i ii) whether Members should not try 
to achieve the intended legal certainty by directly pr oviding clearer guidance to arbitrators rather than 
by introducing the possibility of appealing arbitral decisions.  The time implications of an appeal were 
also raised.  Some participants expressed a prefer ence for the current flexibility of arbitrators in 
addressing legal issues, and indicated that they perceive an appeal as too rigid an approach. 
16. In addition to these more conceptual issues, we discussed specific technical aspects of appeals 
of Article 22.6 arbitral decisions.  One proponent cl arified that third parties would not have the right 
to participate in appeal proceedings dealing with an Article 22.6 arbitral decision.  There was also 
some discussion as to whether the reference in Article  22.7 to specific paragraphs of Article 17, and 
the use of the term " mutatis mutandis ", appropriately achieve the in tended objective.  One proponent 
considered this an "elegant" solution, while anot her participant wondered about the need to look at 
issues addressed in paragraphs 6 and 7 of Article  17, which are not explicitly referenced by the 
proposed language in Article 22.7.   
17. Further, a question was raised about how the po ssibility of multiple arbitrations would relate 
to the phrase in Article 22.7 which provides that "[t] he parties shall accept the arbitrator's decision as 
final and the parties concerned shall not seek a second arbitration."   
18. We also discussed how the word "immediately" in Article 22.7 relates to the possible DSB 
adoption of the Appellate Body report.  In this regard, one proponent confirmed that there is no 
intention of changing the current practice of Artic le 22.6 arbitral decisions becoming final without 
formal DSB adoption.  One proponent indicated that  not only legal but also factual issues could be 
raised in the continued arbitration th at would follow an eventual appeal. 
                                                      
12 See Appendix A, at pp A-13 and A-14. TN/DS/25 
Page B-4  
 
  19. As regards the 
role of consultations in compliance proceedings , there was general support in 
the extended small group for consulta tions being possible, but not required, prior to the establishment 
of a compliance panel, and an understanding that Ar ticle 21.5(c)(i) properly reflects this.  Further, 
there was general support, given the reference in Article 21.5(c)(i) to Article 4, for third party 
participation being possible if such consultations are requested. 
20. At the same time, the proponents foresee no th ird party participation in the context of 
consultations under Article 21.5(a).  As regards this latter provision,  the rationale for the parties 
engaging in consultations during the RPT was discu ssed.  One delegation expressed its concern that 
consultations during the rather short RPT are not al ways viable for the implementing party, although 
it was recognized that there might be situations in which the implementing party might find 
consultations during the RPT helpful in designing the right implementing measure.  In any event, 
delegations emphasized the freedom of the implemen ting party to choose the implementing measure.  
Also, there was general support for the principle of  having to accord sympathetic consideration to 
consultation requests during the RPT, provided that th e implementing party retains the right to decline 
such requests, if it considers such consultations unhelpful.  The question remains whether "shall" is 
the right word to reflect this general principle, or whether, as one delegation argued, using "may" or 
"could" might be more appropriate. 
21. Finally, we briefly discussed the time implic ations of sequencing, which remains a major 
concern for at least one delegation.  Proponents and other interested participants said that they intend 
to work together "as soon as possible" to try to clarify and address these concerns. 
C. WEEK OF 20-24  SEPTEMBER 2010 
1. Effective compliance 
22. With respect to "effective compliance", we  had detailed discussions on the question of 
whether the calculation of the le vel of nullification or impairment  for the purposes of an authorization 
to retaliate should cover the period of the RPT, or not.  
23. In considering this question, de legations expressed different vi ews on what the legal situation 
is under the current DSU rules and procedures.  Sp ecifically, some delegations considered that, under 
the current rules, the right to take retaliatory meas ures was prospective in nature and arises only as of 
the authorization granted by the DSB, such that it cannot "go backwards" to cover nullification or 
impairment suffered from the end of the RPT.  Ot her delegations were of the view that under the 
current rules, Members be come accountable for their violations  as of the end of the RPT and that 
therefore the calculation of the level of nullificati on or impairment may properly include nullification 
or impairment suffered as of the end of the RPT.  It  was mentioned that practice to date provided no 
clear answer to this question, and that the issue was currently under litigation.   
24. It was also noted that, whatever the views might  be about the state-of-play under the current 
rules, the proposal contained in the July 2008 text13 sought to modify the situation, so that it would be 
possible to account not only for nullification or impa irment suffered from the end of the RPT, but also 
for nullification suffered during the RPT.  A numbe r of delegations expressed concern that this 
proposal may change the nature and role of the RPT, which is currently understood as a period in 
relation to which no remedy can be sought.  Some de legations also pointed to possible difficulties in 
assessing the level of nullification or impairment in relation to a period in which, by hypothesis, the situation was fluid and subject to changes as the Member concerned explores the means to come into 
compliance. 
                                                     
 
13 See Appendix A, p. A-16.  TN/DS/25 
 Page B-5 
 
 
  25. Some delegations highli ghted that the question to be addressed was what would best achieve 
the objective of inducing compliance, rather than whether the proposal involv ed "retrospective" or 
"prospective" remedies.  Other delegations observed th at this objective needed to be balanced with 
other principles. It is clear that this question will require further work and I encouraged delegations to 
continue to discuss and explore this issue among themselves.   
26. We then also considered Korea's proposal to clar ify that the reference period to be used by the 
arbitrator acting under Article 22.6  would be the year of the end of the RPT.  A number of delegations 
expressed support for the objective of clarifying this question, but also suggested that more flexibility 
may be needed in order to allow the arbitrator to a dopt a different approach if the circumstances of the 
case required it.  Korea expressed readiness to review the language of its proposal in light of these 
comments.   
27. We then turned to the proposal by Ecuador, that arbitrators under Article 22.6 of the DSU 
take into account the impact of the measures on the economy of developing country complainants 
seeking to suspend obligations  against developed country Members.   Questions were raised about 
what the notion of "impact on the economy" would en compass, and how this would relate to, or differ 
from, the concept of nullification or impairment in ge neral.  Ecuador clarified that its intention was to 
give operational content to Article 21.8, and that  the impact on the economy was to be taken into 
account as part of, rather than in addition to, th e determination of the le vel of nullification or 
impairment.  Questions were also raised about how the proposal would work in practice.  Ecuador 
provided a number of clarifications and expressed readin ess to continue to discuss with participants.    
28. We did not have sufficient time, in the consulta tions, to discuss the final item on our agenda 
on "effective compliance", namely the notification of  retaliatory measures.  We will also need to 
revert to the question of the relationshi p between compensation and retaliation.  
2. Sequencing 
29. As we all know, sequencing is a complex issue,  and the work conducted on various aspects of 
the text has shown that a number of clarifications are still required at the technical level.  We made 
significant progress in this respect in May and June, clarifying a number of aspects, which I already 
reported on at the time.  At the same time, recent disc ussions suggested that there are still questions as 
to the overall architecture of the procedures.   
30. Nonetheless, as I mentioned to the group of dele gations in the consulta tions, it seems to me 
that there is in fact a significant degree of common ground that we can build upon, so the first thing I sought to do in the consultation this week w as to try clarify the degree of convergence among 
delegations on core issues, without prejudice to any vi ews on specific draft legal text or the details of 
the procedures.  Specifically, I asked delegations if it would be correct to assume that the agree that a 
suitable solution to "sequencing
" would – or could – involve the following elements: 
- Some form of notification of measures ta ken to comply by the end of the RPT 
(without prejudice to the exact form or scope of such notification, which we have 
discussed under Article 21.5(b)); 
- In the event that no such notification is ma de, the possibility of proceeding directly to 
proceedings under Article 22 towards an authorization to retaliate;  
- In the event of a disagreemen t over the existence or consis tency of measures taken to 
comply, the complaining party could initiate compliance proceedings under Article 21.5, and an authorization to retalia te can be given only after the completion 
of such compliance proceedings; TN/DS/25 
Page B-6  
 
  - Where compliance proceedings have b een initiated, a determination of non-
compliance would precede a determination of the level of nullification or impairment.  
31. Participants agreed that these would be, in their view, core elements to be part of a solution to 
sequencing.  Some delegations hi ghlighted related issues to be a ddressed, which we then took up in 
the context of a more detailed discussion.  I think if  we keep these basic elements clear in our minds, 
it may help us significantly to address the detail of the procedures with the right focus.   
32. We then turned to a considera tion of specific issues relating, first of all to "sequencing" 
proper .   In this respect, we considered the question of  the scope and formulation of the notification of 
measures taken to comply under Article 21.5(b), and de legations agreed to consider further the draft 
text on this issue.   
33. We also confirmed certain clarifica tions to the drafting of Article 22.2 bis, which had been 
presented earlier.  We further agreed that the qu estion of the relationship between compensation and 
retaliation would be discussed in the context of "effective compliance".    
34. We also discussed a footnote to the chapeau of  Article 21.5(c) that would read as follows: 
"This does not preclude the use of other dispute settle ment procedures, such as the establishment of a 
new panel or Article 25 arbitration".  Clarifications  were provided to the effect that if a new panel 
proceeding was sought, this would not give direct access to procedures under Article 22, while in the 
event of an Article 25 arbitration, parties might choose how to address this question.  
35. With respect to compliance proceedings under Article 21.5 , it appeared that further 
clarification of the language with respect to th e composition of the panel would be useful.    
36. With respect to arbitral proceedings under Article 22.6 , we returned to the question of 
whether it should be possible to appeal issues of law ar ising from arbitral awards.  It was clarified that 
such appeals would relate only to issues of law, and that any further factual findings that may be 
required as a result of the appellate findings would be examined by the arbitrator.  There was also some discussion of the standard of review to be applied by the Appellate Body in the context of 
appeals of Article 22.6 awards.  There was also some discussion of the question of why an appeal 
would be required at this stage, and whether, if th e main legal issues would probably be clarified over 
the first few appeals, there was a risk of subseq uent appeals being mainly "strategic".  Further 
discussion will be required to explore further the de tails and clarify the level of support for this 
proposal.  We also had some discussion of the question of third party participation in Article 22.6 arbitrations.   
37. Finally, we discussed the question of time-sav ings in relation to sequencing.  Australia 
explained that it has been working on trying to  map out how its proposal would operate, in 
conjunction with sequencing, to save time in the duration of proceedings compared to current DSU 
timeframes.  Participants were appreciative of Austra lia's efforts to clarify the extent of potential time-
savings arising from the proposals.  However, this is still work in progress, and my understanding is that Australia intends to continue to work with other delegations to refine its thinking in this respect.    
D. 
WEEK OF 1-5 NOVEMBER 2010 
1. Effective compliance 
38. This week, we continued our discussion on certain outstanding aspects of 
effective compliance , namely:  TN/DS/25 
 Page B-7 
 
 
  - the notification of measures taken pursuant to an authorization to suspend 
concessions or other obligations; 
- the negotiation of compensation;  and  
- the relationship between comp ensation and retaliation.  
39. On the notification of measures taken pursuant to an authorization to suspend obligations , 
Mexico presented revised draft texts to reflect comments of other delegations.  The discussion of 
these revised texts suggested that delegations welcomed the simplifications they contained.  There 
was some discussion of the manner in which the notification would be recorded, and Mexico committed to working further with interested de legations on this aspect to reach a formulation 
acceptable to all. 
40. We also started to discuss this week various issues relating to the negotiation of 
compensation.  In particular, in this context, we considered: 
- the time at which compensation negotiations ma y be initiated, in light of the proposal 
under Article 22.1 that negotiation of compensation could take place "immediately", in other words during the RTP, rather than waiting for the end of the RPT; 
- the relationship between compensation and retaliation, including whether an absence 
of agreed compensation should always be a prerequisite to an authorization to retaliate.  This issue is reflected in the grey-shaded text in the chapeau of 
Article 22.2bis.    
41. We were only able to initiate the discussion of th is second issue, but I think it was clear that it 
required further thinking.  In particular, it seeme d that, although it is understood that compensation 
and retaliation are alternative  remedies under the DSU, there may be situations in which 
compensation is granted covering only part of the ru lings, or on a temporary basis, so that it should 
remain possible to seek to suspend concession for the remaining aspects.   The current proposed draft 
language may not entirely reflect this dimension,  so there was an understanding that interested 
delegations would need to further work on this. 
2. Sequencing 
42. On sequencing, I held consultations focu sing on three specific issues on which earlier 
discussions suggested a need to work further on the language of the draft legal text.
14   
43. First, we discussed the formulation of the proposed notification of implementation measures  
under Article 21.5(b).  In this context, participan ts agreed that the intention was to require the 
Member concerned to notify any measures it had ta ken and that it believed brought it into compliance 
with the recommendations and rulings, without prej udice to how a compliance panel might ultimately 
define the "measures taken to comply" in that case.   A proposal was made to modify the draft legal 
text, to require notification by the Member c oncerned of "measures that it considers achieve 
compliance".  Participants found this proposed redr aft useful and expressed readiness to consider it.  
44. We also considered further the proposed in troduction of a footnote to Article 21.5 (c) , which 
would preserve the possibility of resorting to other procedures than Article 21.5, in case of 
disagreement about compliance.  The text of the pr oposed footnote, which is not in the Chairman's 
text but existed in a previous version of this pr oposal, reads as follows "[t]his does not preclude the 
                                                      
14 See Appendix A, at pp A-13 and A-14. TN/DS/25 
Page B-8  
 
  use of other dispute settlement procedures, such as  the establishment of a new panel or Article 25 
arbitration".  The discussion confirmed that particip ants supported the introduction of such a footnote, 
provided that it was made clear what its implica tions are, with respect to the possibility of 
subsequently seeking an authorization to retaliate.  It was agreed that this could be clarified as 
necessary through additional language either in that  footnote itself or in another footnote under 
Article 22, where reference is made to proceedings under Article 21.5.  Participants agreed to work 
further on such language. 
45. Finally, we also discussed the drafting of the language on the establishment and composition 
of compliance panels under Article 21.5 .  Some discussion arose as to whether a compliance panel 
needs to be established afresh or whether a "referral"  of the matter to the original panel is technically 
possible.  Notwithstanding some uncertainties as to the status of the original panel at that stage of the 
proceedings, it seems, from the discussion, that pa rticipants agreed on the following key aspects:  
- A compliance panel can be "established" (as is suggested in the current draft legal 
text);  
- regardless of the manner in which this is to  be expressed, it should be made clear that 
the persons who served on the original panel would also wherever possible serve on 
the compliance panel;  
- if one or more of the original panelists is  not available, the Director-General may be 
asked to appoint a replacemen t within a relatively short timeframe, unless the parties 
agree otherwise. 
46. Beyond this, there is some discussion as to  the extent to which the panel composition 
procedures under Article 8 would remain applicable, to  the extent that Article 21.5 would not provide 
otherwise.   It was also suggested that a procedur e should be devised for the replacement of a panelist 
in the course of the proceedings.  The July 2008 text reflects these elements to some extent.  But some 
further clarification is required, and part icipants agreed to work further on this. 
47. Looking back at the series of meetings we ha ve had on sequencing since last spring, I think 
we have broadly covered all aspects of "sequencing", including the "sequencing" issue itself, issues 
relating to compliance proceedings under Article 21. 5, and also aspects relating to proceedings under 
Article 22.6.  I think overall, we have made some useful progress in all of these areas.    
48. In particular, you will recall that we have b een able to clarify that, without prejudice to 
delegations' views as to the need to address "se quencing", there is a broad common understanding as 
to what the core elements of a solutio n to "sequencing" proper could include. 
49. With respect to compliance proceedings, my overa ll sense is that, subject to clarification of 
the language on panel composition (as discussed earlier), there is a high level of clarity as to what the 
potential clarifications or improvements would be. 
50. Where there is perhaps less clarity, it seems, is on the question of the possible introduction of 
an appeal of arbitral decisions under Article 22.6, as a number of delegations ra ised some concerns as 
to the implications of such appeals.   
51. In addition, we have been able to clarify ove r our successive meetings certain aspects of the 
draft legal text itself.  As our discussions this w eek have shown, some further work may be required 
to fine-tune this.  Our discussion of the timeframe implications of sequencing has also suggested that 
there are possibilities for significant time-savings to  be achieved, to seek to compensate for any 
perceived lengthening of the proceedings that may arise from a multilateral solution to sequencing.    TN/DS/25 
 Page B-9 
 
 
  3. Time savings  
52. Unfortunately, we did not have sufficient time to  discuss "time-savings".  Given the important 
linkages of this issue to sequencing, we will need to revert to it. 
E. WEEK OF 17-21  JANUARY 2011 
1. Time-savings 
53. With respect to time-savings, we had a useful discussion, reviewing all aspects of the 
proposals on the basis of a summary table prepared by Australia explaining the various time-savings 
resulting from its proposal.    
54. We discussed the possible shortening of the minimum timeframe fo r consultations under 
Article 4 of the DSU to 30 days, with a possibility  of automatic extension at the request of a 
developing country Member defendant.15  In previous discussions, a number of participants had 
supported the proposal to shorten the minimum period for consultations, but a number of participants 
also observed that it would be important for deve loping country Members to have additional time.  
This concern is reflected in the proposal, which foresees an additional period of 30 days to be 
automatically accorded to developing country Memb ers upon request.  As in our earlier discussions, 
questions were asked as to how this would work in practice, and what would happen if there was a 
disagreement between the parties as to the developmen t status of the party seeking an extension.  In 
addition, the question remains open, as to what th e relationship is betwee n this proposal and the 
related proposal under Article 12.10, under which an extension of the consultations period would be 
available in cases involving a measure taken by a developing country Member.  The proponents have 
committed to working together to clarify this.  
55. We also discussed the possibility of panel est ablishment at the first meeting at which the 
request appears on the DSB's agenda, to avoi d the need to consider the item twice.16  Under this 
proposal, "sympathetic consideration" would ne ed to be given to requests to postpone the 
establishment to allow the possibility of additiona l time for developing country respondents if 
necessary.  Comparable issues arise, in relation to this proposal, as with respect to the previous one: 
here also there is a need to balance the inte rests of the complaining and responding Members, 
including developing country Members.  
56. We also discussed the timetable for panel pro ceedings.  As in previous discussions, there 
appears to be support for clarifying the starting point of the indicative timetable in Appendix 3.17  
Some discussion arose, however, as to whether this  should be the organizational meeting, as per the 
proposal, or some other point such as the adoption of the timetable by the panel.   With respect to the 
timing of submissions, the discussion confirmed th e support for shortening the indicative timeframe 
for the submission of the complainant's first subm ission, while slightly lengthening the indicative 
timeframe for the respondent's first submission.  We did not consider, in this context, the relationship 
between this proposal and the separate proposal for additional time to be given for developing 
countries for the preparation of their submissions.  In this respect, further clarification may be 
necessary, and the proponents are intending to work together on this. 
57. The proposal to suppress the 20-day period befo re panel reports can be considered for 
adoption was also discussed.18  The discussion focused on whether this would allow sufficient time 
                                                      
15 See Appendix A, at page A-5. 
16 See Appendix A, at page A-6. 
17 See Appendix A, at page A-20. 
18 See Appendix A, at page 9 TN/DS/25 
Page B-10  
 
  for consideration of the report by Members, includ ing the parties in the event that an appeal is 
considered.  It was noted that this proposal shoul d be seen in the light of the proposal for timely 
access to panel reports, on which convergence has alr eady been achieved in our previous discussions, 
and also in light of recent changes in the Appella te Body Working Procedures concerning the timing 
of the appellant's submission.  
58. Finally, under "time-savings", we also brie fly considered the proposal for accelerated 
procedure for safeguards disputes.  In this respect , past discussions had suggested that, while there 
was sympathy for the rationale underlying the proposal, there were also doubts about the possibility of accelerating these types of proceedings, as compared to others, and whether the DSU would be the 
right legal instrument to address this matter.  I di d not get the sense, from discussions this week, that 
positions on this aspect of the proposal have ch anged significantly since our last discussions.   
2. Sequencing 
59. You will recall that we had already discussed most aspects of sequencing recently.   As I 
noted in November, I think the work over the p ast few months has allowed us to secure a solid 
common understanding as to what a solution to "sequencing" would involve.   Also, a number of 
specific clarifications and improvements had been pr oposed and discussed, hopefully taking us closer 
to a "clean" text on this issue, without prejudi ce to delegations' ultimate position on the need to 
address "sequencing".  As requested by some dele gations in November, this work continued this 
week.  
60. Specifically, I had identified th e following issues for discussion: 
1. follow up on specific drafting improvements pr oposed at the last meeting in relation 
to Article 21.5; 
2. consider the specific draft legal text of Ar ticle 21.5(a) and Article 22.6(b), with the 
objective of "cleaning up" the grey-shaded and square-bracketed texts in those paragraphs; 
3.  revert to the discussion of some of the more  substantive issues that some participants 
have expressed interest in discussing further, and specifically, appeals of Article 22.6 
arbitral awards; 
4.  and, time permitting, taking stock of the timesaving aspects of sequencing. 
61. Ultimately, we were only able to focus on the fi rst two items.   Our work in this respect was 
facilitated by the fact that we were able to work on the basis of a revised working document.  This 
paper was prepared by Canada to facilitate discu ssions and take stock of the progress made over the 
past few months.  On the basis of that document,  we considered a number of improvements to the 
draft legal text
19, which have emerged from recent discussions.   
62. In this respect, the following improvements have been suggested: 
- an improved formulation of the notifi cation of implementation measures under 
Article 21.5(b), the objective being that  the Member concerned should provide 
sufficient information for the complainan t to be in a position to assess whether 
compliance has been achieved; 
                                                      
19 See Appendix A, at pages A-13 and A-14.  TN/DS/25 
 Page B-11 
 
 
  - the introduction of a footnote to Article 21.5 (c), which would preserve the possibility 
of resorting to other procedures than Article 21.5 in case of disagreement about compliance, and of a second footnote to clarify the implications of choosing such an alternative course on access to retaliation under Article 22; 
- improved language on the establishment a nd composition of compliance panels under 
Article 21.5, to express clearly that the DSB would establish the compliance panel, 
and that the persons serving on the complia nce panel should be those who served on 
the original panel. 
63. We also initiated a discussion of some of the other specific aspects of the draft text, but did 
not complete that discussion.  I encouraged in terested delegations to meet with the proponents 
between now and our March meetings, so that the text can progress as much as possible towards a 
clean draft text by then.  If we could have convergence around a single formulation for each piece of 
text, that would already be significant progress.    
64. Finally, on sequencing, I would also like to note that Australia presented to the group a table 
outlining the potential time-savings associated with th e sequencing proposal in combination with its 
own time-savings proposals.  The combined figures suggested a potential for significant gains in the 
overall timeframes under the DSU.  I hope that this can contribute to facilitating a resolution of the 
issue of sequencing.   
3. Effective compliance 
65. I also held some further consultations on "e ffective compliance" this week, which I would 
like to briefly report on.  
66. We first briefly took stock of work on: 
- the proposal on retaliation by a group of Members on behalf of a prevailing 
developing country complainant; 
- the proposal on facilitated cross-reta liation for developing countries; and 
- the proposal on calculating the level of nu llification or impairment for developing 
country complainants; 
67. On "group retaliation"
, unfortunately the proponent was not able to be present, so we were not 
able to follow up on our discussion of last June on th is issue.  However, I think it will be important 
that we come back to this issue, engaging in discussion both the proponents and other delegations.  In 
this respect, it was important that other proponent s of related issues reiterated their willingness to 
work further with the proponents of "group retaliatio n" on the promotion of "effective compliance".   
68. With respect to cross-retaliation , the proponents informed the group of their ongoing work 
and promised to report on their progress by our next meetings in March. 
69. With respect to the calculation of the level of  nullification or impairment for developing 
country complainants , Ecuador has informed us that they are working on a document in response to 
some of the comments raised on their proposal, and they  hope to be able to present this at our March 
meetings. TN/DS/25 
Page B-12  
 
  70. We also discussed Korea's non-paper, and Korea shared with the group an updated version of 
its text, reflecting further work and taking into  account comments received on the earlier version of 
the text.  This text contains two elements: 
− a reference period for calculating the level of nullification or impairment, which is 
proposed to be the year in which the reas onable period of time for implementation, or 
RPT, ended, unless the circumstances require otherwise.  
− a starting point for the calculation of the le vel of nullification or impairment, which 
Korea proposes to be the end of the reasonable period of time for implementation.     
71. With respect to the starting point for the calculation of the level of nullification or 
impairment , the discussion confirmed that the views of participants still diverge as to the period of 
nullification or impairment for which the r esponding Member should be "accountable" through 
retaliation.  There are essentially three positions on this:  
− only the period starting from the authorization to suspend concessions should be 
accounted for; or  
− the period from the end of the RPT should also be counted; or  
− the entire period from the beginning of the RPT should be accounted for.    
72. The discussions confirmed differences of view on this issue, both in terms of what is currently 
provided for under the existing DSU rules, and as to  what would be desirable.  Some delegations 
consider that a calculation that would take into account a period prior to the authorization would constitute a retrospective remedy not  compatible with the nature of retaliation remedy under the DSU, 
while others consider that end of the RTP cons titutes the point in time as of which compliance is 
expected, so that, if compliance has not been achieved by then, a remedy starting from that time is 
appropriate, and would not be "retrospective".  
73. With respect to the reference period
, the improvements proposed to the text, which foresee 
additional flexibility to adopt a period of reference ot her that the year in which the RPT ended, were 
welcomed by participants.  It was noted in that cont ext that further clarification may be desirable as to 
who, of the parties or the arbitrator, had control over the choice of reference period.  
74. We also discussed the notification of measures taken pursuant to an authorization to suspend 
concessions or other obligations .  Efforts were made to find language that would provide the right 
level of precision as to what exactly is to be notifie d, how it should be notified, and when.   As to the 
"how", there appears to be convergence on the idea of  a written notification to the DSB.  As to the 
timing of the notification, there also appears to be convergence on a notification no later than 28 days 
after the action has taken place.  What is still in di scussion is the exact contents of the notification.  
There seems to be a common view that the notifica tion will be most useful if it includes information 
about the actual action taken to suspend obligations, and not just about the fact that some action has 
been taken to suspend concessions, but the exact language  needs to be clarified further.  This is still 
work in progress, and the proponent has committed to c ontinuing to work on this issue with interested 
delegations. 
75. Finally, we reverted to the relations hip between compensation and retaliation  under Article 22 
of the DSU.  In this context, we consid ered the proposed language under Article 22.2 bis.20  T h e  
discussion confirmed that the general assumption was that compensation and retaliation were 
                                                      
20 See Appendix A, at pages A-14 and A-15.  TN/DS/25 
 Page B-13 
 
 
  alternative remedies, and that a Member could not seek suspension of concessions after having 
obtained compensation for the same nullification or impairment.  But the pr oposed language raised 
some concerns, in that it does not clarify a timefr ame for the possible negotiation of compensation and 
also did not seem to account for situations of partia l compensation.  Interested delegations agreed to 
consider further this issue, in or der to determine whether this ques tion should be addressed, and if so, 
how.    
4. Post-retaliation 
76. The final issue that was addressed this week is post-retaliation.  As you may recall, the July 
2008 text reproduces two alternative post-re taliation proposals in Article 22.8(b).21  I think that our 
first objective should therefore be to move towa rds a single text as the basis of further work. 
77. For this purpose, I first met with the proponent s of post-retaliation and encouraged them to 
work together to clarify, among themselves, the main points of convergence and divergence between 
their proposals.  Happily, they were able to identif y many more points of convergence than points of 
divergence.   
78. On that basis, the proponents identified the following points of convergence:  
• Agree to have explicit rules on post-retaliation situations; 
 
• Agree to use procedures already existing under DSU (21.5, 22.6) with some modifications; 
 
• First step is to be taken by the me mber concerned (original defendant); 
 
o Initial responsibility to demonstrate complia nce to rest on the Member concerned; 
o Member concerned has to substantiate its claim on compliance (comprehensive 
notification or first written s ubmission before 21.5 panel); 
o Level of detail to be provided by Member c oncerned is greater in post-retaliation than 
sequencing;  
 
• Complaining party has to rebut claims on compliance to justify maintenance of sanctions; 
 
• If there is disagreement on compliance, proceedings 21.5 apply; 
 
• If there is no disagreement on compliance, no 21.5 but go straight to DSB for removal of 
authorisation; 
 
• Existing authorisation to suspend concessions w ill continue to be effective until withdrawn or 
modified by DSB [sanctions remain pending litigation]; 
 
• What happens following 21.5 proceedings:  
 
o Full compliance: adoption of report by DSB; authorisation is withdrawn 
o no full compliance: adoption of report by DSB; possible 22.6 arbitration; 
authorisation may be modified or may remain the same. 
 
79. In addition, the proponents identified the following points of divergence:  
                                                      
21 See Appendix A, at pages A-17 and A-18. TN/DS/25 
Page B-14  
 
  • Who requests the establishment of 21.5 panel (and therefore bears the initial burden of proof); 
• Definition of the scope/jurisdiction of 21.5 panel: how, when, by whom; 
• How to motivate the member concerned to put everything on the table early. 
80. I then held consultations in which the propone nts shared these points with other interested 
delegations.  At this point, the discussion has focused on the points of convergence, rather than the points of divergence.   I think it is fair to say th at at a purely conceptual level there appears to be 
support for the proponents' general points of converg ence, but of course the specific mechanisms and 
drafting language to reflect them needs to be further clarified and unified. 
81. I intend to revert to post-retaliation at our next meetings.  In the meantime, I have encouraged 
the proponents to continue to work together on th is issue, taking into account the discussions this 
week.  I also urged other interested delegations to approach the proponents with any comments they 
might have. 
F. 
WEEK OF 7-11  MARCH 2011 
1. Post Retaliation 
82. At our January meetings, the two groups of pr oponents jointly developed a list of eight points 
of convergence and three points of divergence.22  I mentioned in January that there appeared to be 
support among the delegations participating in that discussion for the eight points of convergence identified by the proponents, although specific technical questions remained outstanding.  
83. This week, we considered further these points of convergence
, with the goal of securing 
confirmation of level of common understanding and providing a clear basis for the proponents to 
work out some common language toward a single text.   
84. Participants confirmed the objective of having explicit rules on post-retaliation to address the 
question of how a disagreement as to the existence or  consistency of measures taken to comply might 
be resolved where retaliation has been authorized, and how the authorization may be terminated.   
85. Participants also supported the use of pro cedures already existing under DSU Article 21.5 
(compliance proceedings) and Article 22.6 (procedur es concerning the level and form of retaliation) 
as "building blocks".  Some participants noted in  this context the parallelism between sequencing and 
post retaliation.  Participants sought clarificati on on the relationship with sequencing and any timing 
implications.  It was observed in response that, in light of the parallelism between the two, if timing 
implications were successfully addressed in sequenci ng, then they would also be addressed in this 
context.  In response to a question as to what particular "modifications" to these existing rules would be necessary in the post-retaliation context, it was also clarified that the procedures under Articles 
21.5 and 22.6 themselves would not be affected. 
86. Participants agreed that the Member concerne d (the original respondent that is facing the 
retaliation) should bear initial responsibility to assert and demonstrate compliance.  However, 
proponents disagree as to the manner in which it must substantiate its claim of compliance.  This is 
reflected in the respective texts of the proposals.  Under one proposal, the Member concerned must 
substantiate its claim of compliance through comprehe nsive notification.  The other proposal provides 
for substantiation through a first writte n submission in a 21.5 proceeding.   
                                                     
 
22 See paras. 78 and 79 above.   TN/DS/25 
 Page B-15 
 
 
  87. Some participants questioned whether there wa s a need for a second notification requirement 
− with a different level of information − different from what is already proposed for an Article 21.5 
compliance proceeding.  In one respect, there was recognition that a complaining Member has already 
gone through compliance proceedings and the process to impose sanctions, and that it must evaluate 
the information, hold consultations and formulate the relevant request under a 60-day timeframe.   
However, the question was also raised as to what additional information might be provided other than 
notice of a repealed measure or a replacement measu re.  In addition, it was observed that although a 
60-day timeframe does not exist at the 21.5 phase, nevertheless similar pressure arises from stakeholders' interests.  Some participants noted th e benefits of having as simple a process as possible 
to avoid placing additional burdens on the parties. This question of the form and content of the 
notification or information to be submitted by th e Member concerned seems to be the aspect in 
respect of which the views diverge the most, and I ask ed the proponents to take into consideration the 
comments made.  
88. Delegations also agreed that the complaini ng party has to rebut claims on compliance to 
justify continuing sanctions.  If there is disagreem ent on compliance, Article 21.5 proceedings should 
apply.  However, if there is no disagreement on compliance – such as if parties reach a mutually 
agreed solution – then delegations supported the view that Article 21.5 pr oceedings would not be 
required.  Instead, the Member concerned could re quest the DSB to remove authorisation without 
having to wait 60 days to notify compliance to the DSB.  It was noted that current language in 
paragraphs 22(a) and (c) of the proposals does not  seem to address situations in which a mutually 
agreed solution has been reach ed, and there may therefore be a need to address this. 
89. Delegations also agreed that existing authorisa tions to suspend concessions would continue to 
be effective as long as there has not been a determin ation by the DSB or agreement by the parties that 
compliance has been achieved in part or in full.  Ag ain, the question arose as to whether the situation 
of a mutually agreed solution needs to be a ddressed specifically.  With respect to a possible 
modification of the authorized level of suspension, it was suggested that either partial compliance or 
further incompliance might arise, which would entitl e a complaining Member to adjust the level of 
suspension.   
90. Finally, participants converged on the poten tial outcome of the proceedings, where a 21.5 
proceeding has taken place.  Thus, in the event full compliance is achieved, the DSB may adopt the 
report(s) and the authorisation is withdrawn.  If th ere is not full compliance, the report(s) may still be 
adopted by the DSB but the possibility would remain for an Article 22.6 arbitration, and the authorisation may be modified or may remain the same.  There were no comments on this final point, 
which I took to mean that this dua l path appeared to be acceptable. 
91. The points of convergence identified by pr oponents, and the discussion reflected above, 
suggests that the two proposals in fact share many features in common.  I therefore noted that there 
are a number of aspects that proponents could wo rk on together, to find common legal text.  In 
particular, it seems that the language concerning th e following aspects at least could be harmonized, 
to the extent possible: 
- the description of the initial information to  be provided by the responding Member; 
- the procedure for adoption of the 21.5 compliance reports,  
- the procedures for a possible modification of the level of suspension, including 
recourse by either party to Article 22.6 arbitration; 
- the procedure for the withdrawal or modification of the authorization by the DSB, 
and 
- as necessary, the introduction of a refe rence to mutually agreed solutions. TN/DS/25 
Page B-16  
 
  92. We also discussed participants ' views on points of divergence
, in the hope of clarifying the 
direction we would need to take to reach an agreement. 
93. We first discussed which party should request th e establishment of an Article 21.5 panel, and 
therefore, which party bears the initial burden of proof.  I noted my view that we had a useful discussion, which clarified the implications of both options, as well as the concerns of some 
participants as to how each one would operate in practice.  There was extensive discussion of the 
procedural implications of the proposed initiati on of Article 21.5 proceedings by the responding 
Member, rather than by the complainant.  The pr oponents of that approach explained that, in their 
view, at that stage of the proceedings where th e responding Member has already been found not to 
have complied with the rulings, it should be required to bear the burden of demonstrating that it has 
now brought itself into compliance. 
94. Participants also observed that the potential outcome of proceedings at this stage of the 
proceedings differed from "initial" Article 21.5 pr ocedures, in that the procedure may lead to 
termination, rather than initiation, of retaliati on measures.  Hence, the onus was on the responding 
party to initiate this change.  Some participants  observed, however, that  even if the potential 
consequences of the rulings differed, the task of a "post-retaliation" Article 21.5 panel is essentially 
the same as that of a regular 21.5 panel, that is, to determine the existence of any inconsistency.  
95. Clarification was sought as to whether, in th e event that the Member concerned initiates a 
compliance proceeding, a complaining party could deci de not to file a notice but instead bring a new 
compliance proceeding.   Conversely, it was suggested  that, at the time of initiation of the compliance 
proceedings by the respondent, it may not be clear  whether there is in fact a disagreement on 
compliance.  Proponents of requiring the complaining party to initiate compliance proceedings took 
the view that their proposal provided a simpler solution and was compatible with the existing approach in 21.5 proceedings.  Some participants ag reed that this approach seemed more consistent 
with the process that is otherwise adopted throughout the DSU.  
96. In discussing procedural differences between th e two approaches, participants focused on the 
respective burdens that the complaining and responding Member should bear, at this stage of the 
proceedings, to demonstrate compliance or lack ther eof.   It was suggested  that the complainant 
should not have to bear the burden to prove the existe nce of a legal measure at this stage.  However, 
the view was also expressed that the burden woul d inevitably end up on the complaining party to 
prove continued inconsistency, if it were to disagr ee with the respondent's assertion of compliance.   
97. If the responding Member were to come forwar d with evidence of a measure to comply, the 
question arose whether that Member would have to prove that its measure to comply is consistent 
with every provision of the covered agreements to  demonstrate the absence of inconsistency.  Some 
participants questioned the value of having the Memb er concerned set out extensive information about 
efforts taken to comply, emphasizing the importanc e of focusing on where remaining disagreement 
exists.  In this context, it was also observed that the complaining party needed to have the ability to 
frame the scope of the dispute.  With respect to th e burden of proof, reference was made to the rulings 
of the Appellate Body in US – Continued Suspension , which addressed the possibility of initiation of 
Article 21.5 proceedings by the responding Memb er in a post-retaliati on situation, and the 
implications of such an approach in terms of allo cation of burden of proof.  Questions also touched on 
particular procedural aspects, including whether a co-complainant that has not received authorization 
to suspend would need to bring its own proceeding.    
98. We also discussed the second and third points of  divergence.  Proponents in favour of having 
the complaining party initiate compliance proceedi ngs recalled their view that their proposal most 
closely follows the standard rules in Articles 6 a nd 7 of the DSU.  They also emphasized that the 
request for establishment of an Article 21.5 panel de fines the scope of the Panel's terms of reference,  TN/DS/25 
 Page B-17 
 
 
  and the complaining party would need to, and is in a far better position to set out those elements of 
disagreement.  Proponents also expressed the need, wh en thinking of ways to design new procedures, 
to make provisions as clear as possible.  In this respect, they submit that the other proposal allows 
responsibility to be shifted to the complainant too eas ily, or to provide incomplete information in the 
notification that would not make it possible to reso lve the matter in a 21.5 proceeding.  It was asked 
whether further pressure is put on this by the require ment to notify a request within 60 days.  It was 
accepted this may be a technical issue only. 
99. Proponents in favour of having the respondent in itiate compliance proceedings submitted that 
nothing in the current rules would prevent a res pondent from seeking an Article 21.5 panel.  They 
emphasized their preference for placing the onus on  the respondent to come forward in a post-
retaliation situation, considering it  more appropriate for the party seeking change from status quo to 
take the first legal step.  This group further s ubmitted that the complainant, which already gone 
through the various stages, should not be led into  a process where the authorization can be removed 
by virtue simply of the respondent asserting compliance.  They also questioned whether the notification proposed in the other proposal coul d be considered to have enforceable legal 
consequences.  The question was raised how this no tification would be different from the notification 
that might be foreseen were two parties have no di sagreement, and thus proceed directly to the DSB 
to withdraw the authorization to retaliate. 
100. Following this discussion, some participants offered their view that the first two points of 
divergence are largely related, and that there was slight convergence on the third point, namely that 
both sides would likely agree that the complaining party should not be caught off guard.  Some 
participants asked whether the effectiveness of  a panel proceeding would depend on who precisely 
brings the case.  The point was also raised wh ether the burden of proof could not be shared, 
depending on whether the issue concerned the existe nce of a measure to bring into conformity, or 
instead, whether such a measure was otherwise in vi olation of a WTO provision.  Overall, I suggested 
more discussion is needed. 
2. Effective compliance 
101. I invited participants to report on any progress ma de in respect of group retaliation on behalf 
of a prevailing developing country complainant,  on facilitated cross-reta liation for developing 
countries, and on calculating the level of nullifi cation or impairment fo r developing country 
complainants.
23  The proponents informed me of their recen t consultations together and their ongoing 
work towards developing some common views that c ould be reflected in a joint textual contribution.  
In addition, Korea and Mexico reported on their ongoing work on their respective proposals.     
102. Later in the week, Korea mentioned it would s oon circulate a new paper to the larger group 
based on recent discussions.  Mexico also pres ented revised text under Article 22, addressing the 
notification of retaliatory measures, containing two options for draft legal text  describing the type of 
measure that would be subject to a notifica tion requirement. The objective was explained as 
enhancing transparency. Mexico advised that this text had been discussed among small groups of both 
developing and deve loped countries and represented a substantiv e agreement, even if the views were 
not finalized as to how to reflect this in legal text .  Participants asked for clarification on differences 
between the two options.  I encouraged delegations to  submit the result of their work in the form of 
legal text, and to engage also w ith other interested delegations. 
                                                      
23 See Appendix A, at pages A-14 and A-15. TN/DS/25 
Page B-18  
 
  3. Third Party Participation 
103. Certain delegations that have re cently worked on third party par ticipation as "Friends of Third 
Parties", presented a non-paper, which proposes chang es to Articles 4, 10, 21.5 and 22 of the July 
2008 text as well as Appendix 3.
24   
104. Participants first addressed thir d party rights in  consultations , under Article 4.11 of the DSU.  
Under this proposal, the current Ch air's text proposes that any requesting Member may be joined in 
consultations by notifying its interest in wr iting unless the Member to which the request for 
consultation was addressed notifies the applicant Me mber and DSB in writing within 7 days after 
receipt of such a request that a claim of a substan tial trade interest is not founded.  The non-paper 
newly proposes that Members be allowed to join cons ultations as third parties that have a "substantial 
interest", as opposed to a "substantial trade interest ", thus allowing participation where systemic, but 
no trade-related interests exist.  It also proposes that the request would be accepted unless all parties 
to consultations agree to reject it.    
105. Participants discussed what impact would aris e from allowing third party participation where 
a "substantial interest" rather than  a "substantial trade interest" exis ts.  Proponents to the new proposal 
submitted that the "substantial trade interest" language  in the current proposal of the July 2008 text 
was too restrictive, preventing participation by Memb ers with a systemic interest in proceedings.  In 
their view, there are currently no clear guidelines in r espect of "substantial trade interest" either.  In 
addition, in their view, the inclusion of the word "trade" may create expectations to participate that 
cannot be met. 
106. Other participants offered that it is not clear what  systemic interests may exist at this stage of 
proceedings.  Some delegations expressed the view that removing the term "trade" might create less 
clarity as to what interest is required to join, wh ich could lead to less co nsistent application in 
practice.  There was some discussion, in this respect , of how a party could reject a request based on a 
substantial or systemic interest.  Several partic ipants took the view that the true value of the 
consultations phase is to resolve disputes amicably , which may be impeded by enlarging third party 
participation.  It was also suggested that, in pr actice, the proposal removes the criteria by which a 
responding Member is obliged to allow the participa tion of a Member, thus making it easier to reject a 
request.  It was suggested that a requirement of "substantial trade interest" may give an objective 
standard in determining whether third party inter est exists.  Finally, delegations asked whether the 
removal of the term "trade" would create pressure for members to request to participate in all consultation proceedings out of "systemic" interest  in dispute settlement, even where a substantial 
trade interest does not exist. 
107. It was also observed that the change would resu lt in the same language in Articles 4 and 10 of 
the DSU, which could result in incongruous interpre tation.  In other words, participation may be 
rejected in the consultation due to the alleged determination that ther e is no "substantial interest", but 
later, participation would be gr anted in panel proceedings under Article 10, on the basis of such 
"substantial interest". 
108. Participants next discussed the implications of allowing third party participation at the 
consultations phase, except where the consulting pa rties jointly agree that the request is not well-
founded.  Proponents to the non-paper clarified that their proposals under 4(11)(a) and (b) are intended in tandem.  They consider that this ch ange would provide greater balance to third party 
participation by removing the condition that allo ws a responding party to reject participation 
unilaterally, potentially out of concern that a th ird party would not offer a favourable support or 
                                                     
 
24 See Appendix A, at pages A5-6, -A7-8, A-13-14 and 17.  TN/DS/25 
 Page B-19 
 
 
  interpretation of legal matters at  issue.  Proponents consider their proposal results in greater 
transparency as well. 
109. Other delegations reiterated their view that the proposed modifications to Article 4(11)(b) 
might distract from the main purpose of consultations  by requiring the parties to reach agreement in 
deciding to allow for participation of particular pa rties, taking away from the bilateral objectives.  
Concern was also expressed that this proposed ch ange would lead Members to hesitate to make 
requests under Article XXII of GATT 1994, doing so only if they think it more parties will join in support of them. 
110. We next discussed third party rights in panel proceedings
.  The July 2008 text proposes to 
extend "standard" third party rights to a level compar able to what has in the past been granted on a 
case-by-case basis as enhanced third party rights under  current rules.  Proponents of the non-paper 
proposed further enhancement of the "standard" third party rights beyond what is proposed in the July 
2008 text.  They submitted that these modifications w ould improve effectiveness of participation, in 
particular by allowing third parties to address issues th at arise in the later stages of proceedings, after 
the first meeting, through oral and written submis sions as well as questions to the parties and other 
third parties.  They consider that enhanced partic ipation rights provide more elements to further the 
debate before the panel.   
111. Certain delegations expressed support for a precise enumeration of third party rights to 
improve predictability in proceedings.  However, participants expressed concern for "blurring the 
lines" between third parties and main parties.  De legations also expressed concerns with practical 
effects of increased involvement on parties, the Secretariat and the panel.   Several delegations 
suggested that the July 2008 text provided bette r balance between the rights of parties and third 
parties.  As far as the specific additional right s envisaged in the proposal are concerned, some 
participants indicated that they were more comfor table with allowance for participation at the second 
meeting on a case-by-case basis.  One participant offe red that limits could be imposed on the level of 
participation at the second meeting.  However, que stions were raised as to what consequences may 
arise for the proceedings if third parties failed to comply with such limitation. 
112. Some participants also questioned how changes in point (c), which would allow the granting 
of additional rights with the agreement of the parties and at the discretion of the panel, would work in 
practice. It was asked what further additional right s could be envisioned. One participant was of the 
view that the text of (c) functioned like a "cap" that provides balance to parties by working like a "safety valve". Proponents submitted that the proposed changes in 2(b) and (c) are intended to work in 
tandem, and would have to be reconsidered, if the enumerated rights in (b) were not ensured through 
the text.   
113. We next considered participation of th ird parties in Article 21.5 proceedings
.  Under 
Article 21.5(c), the July 2008 text proposes that complaining parties not be required to request 
consultations pursuant to Article 4 before reques ting establishment of a panel under Article 21.5, but 
no reference was proposed to third party rights at th is stage.  The non-paper proposes to reflect that 
Article 4 shall apply in the event that consultations  are requested.  The proponents explained that their 
intention is to clarify that if there are consulta tions in a 21.5 proceeding, Article 4 would apply in 
respect of third party participation.  Some delegations  asked whether, if Article 4 were to apply, those 
portions of Article 4 that go beyond third party rights would also apply.  Questions arose also as to whether the July 2008 text did not already make cl ear, implicitly, that Article 4 would apply.  The 
issue of the 10-day requirement to notify interest to  participate as a third party was also raised, and 
participants agreed to hold discussions on this requirement.   
114. Overall, I noted that additional work was needed  in light of the different view and elements 
that arose.  I suggested that delegations cons ult with each other to advance the discussion. TN/DS/25 
Page B-20  
 
  4. Sequencing 
115. Although sequencing was not on the agenda fo r discussion this week, Canada, on behalf of 
the proponents and other delegati ons, submitted a revised draft lega l text reflecting convergence 
among the proponents of sequencing and other delegations having partic ipated in the consultations on 
this issue.  I welcomed the progress made in comp leting the technical work and achieving clean draft 
legal text on this topic, that brings us ve ry close to an understanding on this issue. 
G. 
WEEK OF 4-8 APRIL 2011 
1. Third Parties 
116. In March, the "Friends of Third Parties" pr esented a non-paper that proposed several changes 
that build on and extend the third part y rights addressed in the July 2008 text.25  Our discussion of this 
topic at the time was limited to changes proposed mainly in Articles 4.11 and 10 of the DSU.  This 
week, we continued our discussion, focusing on Articles 17.4, 21.5 and 22.6 of the DSU.   
117. Under Article 17.4 of the DSU, the July 2008 text26 proposed that any Member  that notifies 
its interest to participate as a third party in the Appellate Body proceedings  – and not solely third 
parties to the original panel proceeding – should  be permitted to do so, as long as such Member 
notified its interest within 5 days of notification of the appeal.  Participation would include being 
heard and making a written submission.   
118. Though not specifically proposing amendments to  the July 2008 text, proponents of enhanced 
third party participation emphasized the importance of giving an opportunity for Members to join as a 
third participant at the appellate stage.  Proponents c onsider that questions of law before the Appellate 
Body are of systemic interest.  They also consid er that allowing participation would ensure fairness 
for all Members.  Failure to meet the deadline to stat e interest at the panel stage, or the determination 
of a substantial interest only following the comple tion of the panel proceeding, were identified as 
reasons that third participants shoul d be able to join for the first tim e at the appellate stage.  It was 
suggested that the ability to join at a later st age would be helpful to Members with resource 
constraints who may not perceive an interest at th e outset, because they are not aware of issues that 
may arise in the course of panel proceedings.  Such  issues may include the particular defences raised 
or terms of reference issues.  Proponents, however , did not anticipate that many Members would rush 
to join, that had not already done so at the panel st age, due to resource constraints and other factors.   
119. Some participants expressed concern that th e proposed changes would lead to increased 
participation, which would compromise already tight timetables and the rights of main parties.  Some 
delegations did not agree that the Appellate Body  would adjust its working procedures to address 
increased third party participation, the result bei ng that participation by main parties would be 
affected.  Other delegations did not  envision substantial delays, and not ed that page limits or time 
limits may also be applied to address such concerns. 
120. Some delegations also expressed concern th at the triggering threshold language in 
Article 17.4(d) – namely, the use of "interest" and not "substantial interest" -- would lead too overly 
broad participation.  Proponents however, cautioned against creating a requirement to demonstrate a 
continuing "interest" in order to participate at th is phase, which would, in their view, lead to 
unnecessary new work for the Appellate Body. 
                                                      
25 See Appendix A, at pages A-5-6, A-7-8, A-13-14 and A-17. 
26 See Appendix A, at page A-12.  TN/DS/25 
 Page B-21 
 
 
  121. Under Article 21.5(c) of the DSU , the July 2008 text27 proposes that complaining parties not 
be required to request consultations pursuant to Ar ticle 4 of the DSU before requesting establishment 
of a panel under Article 21.5, but no specific reference was proposed to third party rights at this stage.  
The non-paper proposes to reflect that Article 4 shall  apply in the event that consultations are 
requested.   
122. Questions arose as to whether the July 2008 text  did not already make clear – implicitly, that 
Article 4 would apply in the event of consultations under this provis ion.  Delegations also expressed 
concern as to whether the proposal under Article 21.5 would foreclose parties from holding informal 
consultations, if it were their choice to do so. 
123. Proponents clarified that the focus was on third pa rty participation, and that drafting could be 
adjusted to reflect this focus.  Proponents noted that language would depend on the ultimate 
formulation of other proposals concerning Article 21.5. 
124. Proponents emphasized the objective was to clar ify that, in the event a member requests 
formal consultations under an Ar ticle 21.5 proceeding, be it through Article XXII or Article XXIII of 
GATT 1994, the rules pertaining to third parties unde r Article 4 of the DSU would apply.  Proponents 
clarified that their intent was not to eliminate the possibility of informal consultations.  Some 
participants suggested that the current proposed  text at least implied only two options, either 
consultations in accordance with Article 4, or none at all. 
125. Under Article 22.6 of the DSU , the July 2008 text does not propose changes that would affect 
the rights of third parties.  The "Friends'" non-pa per proposes that participation of third parties be 
explicitly addressed under Article 22, and that any  Member may participate as a third party by 
notifying it interest to the DSB and each party within 10 days after referral of the matter to arbitration.  
Article 10 would apply mutatis mutandis .  Proponents consider there is  sufficient reason for allowing 
Members to join as third parties, including the ques tion of the determination of the date from which 
calculation of the level of impairment begins. 
126. Participants first sought clarification of, whet her third parties are allowed or not under present 
practice, and who decides such participation.  De legations seemed to agree that the arbitrator 
determines participation.  Overall, delegations expre ssed an interest in having clarity as to third party 
participation at this stage.   
127. A number of participants considered that an Article 22.6 arbitration procedure is essentially a 
bilateral process and is fact-specific.  Those partic ipants expressed interest in maintaining flexibility 
in such proceedings.  Participants also indicat ed concern for timetables, and complications for 
including additional third party participants where no sy stemic interest may exist.  It was noted that in 
previous Article 22.6 proceedings, Members were allo wed to participate as third parties because the 
same measures were under challenge and there was an immediate interest in the outcome of a parallel 
proceeding. 
128. Overall, I took note of the discussion on third party participation and asked proponents to 
continue to work with other delegations in the interest of reaching convergence on issues. 
2. Post Retaliation 
129. This week I met with the proponents of post-re taliation to take stock of the work conducted 
since our last meetings.  You will recall that in our  recent meetings, we addressed the eight points of 
convergence and divergence reached by proponent s and I had encouraged proponents to work 
                                                      
27 See Appendix A, at page A-14. TN/DS/25 
Page B-22  
 
  together towards common language on a number of aspects, without prejudice to their respective 
views on the overall structure of the text under their two approaches.   
130.  Proponents of the two proposals indicated th at they had found encouragement from the 
discussions in the small group meetings. Both sides ag reed that the fundamental point of divergence 
remains the question of who initiates compliance proceed ings.  Both sides also expressed interest in 
using the current momentum to achieve progress in the coming weeks, taking into account the 
concerns of the other proponents as well as the comments heard last month from other participants.  Both sides also indicated they had consulted with  other delegations to understand areas in need of 
improvement, and that they inte nded to continue to do this. 
131. I took note of the fundamental difference in th e two proposals in respect of the initiation of 
Article 21.5 proceedings in the post-retaliation c ontext.  I noted again that the July 2008 text
28 has two 
texts, and that a single text is needed.  I encouraged proponents to take into account what other delegations have said in trying to bridge the gaps.  I also encouraged proponents to meet in the 
coming weeks, either together, with my assistance, or  with other delegations, to further their work and 
try to eliminate their divergences.   
3. Effective compliance 
132. This week, I also met with delegations to discu ss new developments in effective compliance.  
In March, proponents of issues relating to effective compliance had indicated that they were working 
together towards developing some common views that could be reflected in a joint textual 
contribution.   This week, they indicated they ar e still in the process of working together, as well as 
with other delegations, to clarify what the im portant issues are.  I took note and encouraged 
proponents to continue working together and to streamline their proposals.   
133. We also had the opportunity to consider new text presented by Korea on instances where a 
Member might achieve full compliance prior to the authorization of the suspension of concessions or 
the actual suspension of concessions .  Under this proposal, if co mpliance were achieved and accepted 
by the complaining party prior to the suspensi on of concessions, then concessions shall not be 
suspended.  It was indicated that a Member could notify its compliance in a meeting of the DSB.   
134. The expressed goal of this proposal is to indu ce compliance and facilitate implementation in a 
prospective manner in accordance wi th the principles set forth in the DSU.  The importance of 
maintaining the reasonable period of time for implementation was emphasized.  This time is 
considered fundamental to give Member s a chance to implement DSB rulings.   
135. A number of participants sought clarification on the timing aspects of this proposal and its 
implications for the initiation of th e post-retaliation phase, and instances of partial implementation.  In 
addition, some delegations expressed con cern with how the proposal would apply. 
136. One participant expressed concern that the effect  of this proposal would allow a respondent to 
utilize additional time to avoid bringi ng its measure into compliance.  It was submitted that that time 
for Article 21.5 and 22.6 proceedings is much la rger than the typical period for implementation, 
leaving it unclear how this proposal would help compliance.  In response, it was indicated that 
Members are understood to act in good faith in co mplying with their obligations.  However, it was 
noted that Members may sometimes be unable to comply for reasons other than bad faith. 
137. I encouraged delegations to continue their work, bearing mind whether Members think there 
is a problem with compliance, rather than focusing  on text at this point.  The question was raised 
                                                      
28 See Appendix A, at pages A-14 - 19.  TN/DS/25 
 Page B-23 
 
 
  whether the problem of compliance affects different Members differently.  I expressed my view that 
questions of effective compliance do not relate  to developing countries only, and therefore 
encouraged delegations to participate broadly in  an open dialogue.  Delegations expressed their 
interest in continuing to work on the issue. 
138. In addition, in the context of discussing devel opments in proposals on effective compliance, 
Mexico offered further revisions to its proposed  text on the notification of retaliation measures .   
139. Delegations sought clarification on whether the proposed notification was intended to cover 
situations where a member publishes a request fo r comments on a proposed list of retaliatory 
measures, or simply the final list of measures.  Delegations spoke in favour of transparency but 
cautioned against imposing an excessive burden on Me mbers to translate and publish information that 
would not be necessary.  It was suggested that the no tification could perhaps be no different than what 
is required in other areas, such as a one-page pro forma notification.  Delegations discussed in detail 
what precise information must be notified.  Some delegations proposed that agreement on notification 
could be achieved by narrowing down to the mi nimum necessary what a Member would need to 
notify, i.e. the measures that suspend or modify c oncessions or other obligations in particular sectors. 
140. I took note of the discussion and encouraged de legations to continue their work towards 
clarifying the terms of a notification of retaliatory measures.  
4. Flexibility and Member Control 
141. We discussed proposals in the July 2008 text on flexibility and Member-control.29  Proposals 
in this area focus on suspension of proceedings, interi m review at the appellate stage, partial deletion 
and partial adoption of reports, pa nel expertise, and interpretative guidance parameters.  This week, 
we held discussions on suspension of panel and a ppellate proceedings and interim review at the 
appellate stage. 
142. On the suspension of panel and Appellate Body proceedings, found in Articles 12.12 and 
17.5(c) of the July 2008 text respectively, delega tions indicated general support for suspension when 
agreed upon by the parties, and focused on technical aspects of the proposal.  Discussion focused on 
the initiation of suspensions, the permissible dura tion of suspensions and resumption of proceedings. 
143. With respect to the suspension of panel proceedings  at the joint request of the parties 
(Article 12.12 of the DSU), participants in the small group meetings converged in support of the 
possibility of suspending panel proceedings by agreem ent of the parties, as proposed, and on language 
to that effect.  It was understood that suspension at the discretion of the panel upon request of the complaining party, as currently foreseen in Article 12.12, would also remain possible.  Participants 
considered that parties to a dispute may reach agr eement to suspend a panel proceeding, and may also 
agree to the duration of suspension and the particul ar mechanism to resume proceedings.  However, 
delegations did not consider that the proposed  language of Article 12.12 made this clear. 
144. Participants in small group meetings also considered whether the conditions in which 
suspended panel proceedings may resume should be cl arified, and agreed that it would be useful to 
insert language in Article 12.12 to clarify that su spended proceedings may be resumed at the request 
of either party. In this context, it was also consid ered that the language proposed in the July 2008 text 
under Article 17.5(c), concerning the resumption of  suspended Appellate Body proceedings, could 
serve as basis for this, omitting the portion of text  "unless otherwise agreed by the parties".   
                                                     
 
29 See Appendix A, pp.A-8, A-9, A-10, A-25 and A-27. TN/DS/25 
Page B-24  
 
  145. Participants in the small group meetings also agreed that a 12-month limit should be imposed 
on the length of suspension, to be understood as 12 consecutive months.  To that effect, participants 
agreed to clarify that the 12 months referred to in  the text should be "12 consecutive months".  It was 
recognized that suspension could in fact extend beyond a total of 12 months, so long as parties 
communicated to the panel their interest in resuming the proceeding and suspending anew.   
146. In further consultations with the broader group of interested delegations, some participants 
sought more clarity as to the parallel function of the first and second sentences of Article 12.12, and 
whether it would be necessary to clarify whether the work of a panel would resume at the conclusion 
of 12 months.  In this respect, some participants not ed the current formulation of the text in the DSU, 
and that the present proposal does not seek to change  how panels might resume in the event that the 
suspension has been requested  by the complainant.   Some particip ants also took note of the fact that 
this provision as it is currently drafted seems to function well in practice. 
147. I noted that I found the discussions on suspension of panel proceedings to be very useful, and 
hoped that delegations could come to  agreement on a draft legal text.  
148. We next turned briefly to the suspension of appellate proceedings
.  In this regard, I noted that 
a number of delegations in the small group meetings  had considered favourably the objectives of the 
proposal.  However, certain of these delegations  had concerns concerning how suspension would 
work in appellate proceedings.  In particular, de legations expressed concern that the current proposed 
draft does not include a finite limit to the duration of  the suspension, which could lead to uncertainty 
and unpredictably for Members and for the work load of the Appellate Body.  A 12-month limit 
similar to that proposed for panel proceedings w as suggested.  In addition, the view was expressed 
that a definitive timeline could provide a milestone  for members to proceed.  Proponents felt that the 
Appellate Body would not have issues with uncer tainty, and has shown flexibility in adjusting its 
workload in previous cases. 
149. Overall, delegations took note of the diffe rence between the panel and Appellate Body 
proceedings, and took the view that parallel mechan isms for the suspension of panel and appellate 
proceedings would not necessarily make sense for the system, in light of this difference.  In particular, 
questions were raised as to what w ould happen with the status of the pa nel report, if the parties did not 
resume proceedings, and what would happen to time frames set out in Article 16.4 of the DSU and in 
the Appellate Body's working procedures.  If a defi nitive timeframe were included, participants also 
asked what would happen in the case parties did not terminate the suspension to  resume proceedings.  
Would the authority of the Appellate Body lapse,  or would the Appellate Body resume its work? 
150. Although these questions remain open, I noted that there appears to be sympathy for 
suspension of proceedings being available in the cont ext of Appellate Body proceedings.  I also took 
note of a desire for a degree of parallelism be tween the panel and appellate stage, and for 
predictability in the system.  A number of delegatio ns expressed a clear interest in a definitive time 
limit for a suspension.   As an alternative to a hard  limit to the length of suspension, I suggested that a 
requirement could be included for parties to set out in an agreement a finite duration for the 
suspension, or a mechanism for resumption of proceed ings.  I suggested that we continue discussion 
on this topic in the next negotiating week.    
151. We next discussed the possibility of an interim review at the Appellate Body stage.  This 
proposal is addressed in Article 17.5(a) and (b) of the July 2008 text.30  The proponents have 
suggested 30 days as a reasonable timeframe for such  review, and suggest that it could help avoid 
errors of fact or law in the Appellate Body, and could also help provide cl arifications on Appellate 
Body findings, which would help with implementati on and compliance.  Due to the definitive nature 
                                                      
30 See Appendix A, at page A-10.  TN/DS/25 
 Page B-25 
 
 
  of Appellate Body reports, proponents consider that  interim review is even more important at the 
appellate stage.  Proponents also expressed the view  that an interim review would provide a much 
more favourable manner than issuance of corrige nda to address potential mistakes or issues in 
Appellate Body reports. 
152. In general, delegations expressed support for having high quality Appellate Body reports.  
However, some delegations express ed concern with whether the inclusion of interim review at the 
appellate stage would undermine the integrity of appeals.    If one of the focuse s of an interim review 
stage is to correct minor errors, it was asked whet her incorporating such a review at the appellate 
stage is worth it in light of potential disadvantages,  including notably, the effect on timeframes.  In 
addition, participants expressed concern that the in terim review stage might serve as an early preview 
that could be subject to abuse, with parties perhaps inclined to withdraw their appeals if they were not 
satisfied with the findings of the Appellate Body. 
153. Delegations also expressed concern at whethe r the proposed 30-day timeframe would provide 
sufficient time for the parties.  Concern was also e xpressed as to whether interim review at that stage 
could open the door to having parties review legal i ssues in the Appellate Body report.  The risk of 
leaks was also raised.  In addition, certain delega tions expressed concern with the additional cost that 
would arise from adding another step in the process.  It was not clear to these delegations that such cost would not exceed the potential benefits.   
154. I took note of the discussions, and suggested that more work needed to be done on this last 
issue.  I also took note of comments by delegations, including, inter alia , concerns about legitimacy of 
the Appellate Body, effects on timeframes, and the qu estion of costs in relation to benefits.  I also 
noted the suggestion for perhaps a narrower scope  for limited comments, which might alleviate 
concerns that a party was simply trying to re-litig ate its case.  I suggested we continue discussion on 
this topic, and on remaining proposals on flexibil ity and Member-control, in the coming negotiating 
weeks in May.   
 
 
 
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