RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/192 
15 July 2005 
 (05-3147) 
Dispute Settlement Body 
20 June 2005  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 20 June 2005  
 
Chairman:  Mr. Eirik Glenne (Norway) 
 
 Subjects discussed
: Page  
 
1. Surveillance of implementation of recommendations adopted by the DSB.........................2  
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States .............................................................................................................. ...........2  
(b) United States – Anti-dumping measures on certain hot-rolled steel products 
from Japan:  Status report by the Unite d States..........................................................................3  
(c) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report 
by the Unite d States ........................................................................................................... .........4  
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States .................................................................................................................. .............5  
(e) Mexico – Measures affecting telecommunications services:  Status report by Mexico .............6  
(f) European Communities – Conditions for th e granting of tariff preferences to 
developing countries:  Status repor t by the European Communities ..........................................6  
(g) Canada – Measures relating to exports of wheat and treatment of imported grain:  
Status report by Canada ....................................................................................................... ......7  
2. Egypt – Anti-dumping duties on matches from Pakistan .....................................................8  
(a) Request for the establishment of a panel by Pakistan.................................................................8  
3. European Communities – Measures affecting trade in commercial vessels........................9  
(a) Report of the Panel............................................................................................................ ..........9  
4. Appointment of Appella te Body members............................................................................12  
5. European Communities – Definitive  safeguard measure on salmon..................................13  
(a) Statement by Chile............................................................................................................. .......13  
 WT/DSB/M/192 
Page 2  
 
1. Surveillance of implementation of recommendations adopted by the DSB 
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.32) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.32) 
 (c) United States – Continued Dumping and Subsid y Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.17 – WT/DS234/24/Add.17) 
 
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.7) 
 (e) Mexico – Measures affecting telecommunications services:  Status report by Mexico 
(WT/DS204/9/Add.6) 
 
(f) European Communities – Conditions for the gr anting of tariff preferences to developing 
countries:  Status report by the European Communities (WT/DS246/16/Add.2) 
 (g) Canada – Measures relating to exports of wheat and treatment of imported grain:  Status 
report by Canada (WT/DS276/20/Add.1) 
 
1. The Chairman
 recalled that Article 21.6 of the DSU required that "unless the DSB decides 
otherwise, the issue of implementation of the re commendations or rulings shall be placed on the 
agenda of the DSB meeting after six months follo wing the date of establishment of the reasonable 
period of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue is 
resolved".  He proposed that the seven sub-items  to which he had just referred be considered 
separately. 
(a) United States – Section 211 Omnibus Appropria tions Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.32) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.32, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US Section 211 Omni bus Appropriations Act of 1998. 
3. The representative of the United States  said that his country had provided a status report in 
this dispute on 9 June 2005, in accordance with Ar ticle 21.6 of the DSU. As noted in the report, 
several legislative proposals relating to S ection 211 that would implement the DSB's 
recommendations and rulings in this dispute had been  introduced in the current Congress, both in the 
US Senate and the US House of Representatives.  The US administration was working with the 
Congress to implement the DSB's recommendations and rulings. 
4. The representative of the European Communities  said that the implementation deadline was 
just about to expire and the EC was seriously concerned that the United States would again fail to comply with the DSB's rulings and recommendations  by that deadline.  Two bills were pending 
respectively in the Senate and in th e House of Representatives that would, inter alia , repeal 
Section 211.  Adoption of these bills would bring a sa tisfactory solution to this dispute by removing a 
legislation driven by specific interests. The EC i nvited the United States to consider the implications 
beyond the narrower confines of this dispute.  Lack of action by the United States was a serious blow to its commitment to promote effective and non-di scriminatory protection of intellectual property 
rights.  WT/DSB/M/192 
 Page 3 
 
 
5. The representative of Cuba  said that her country considered that it was unacceptable that, only 
10 days before expiry of the extended deadline fo r implementation, which had been granted to the 
United States by the EC, the United States had ag ain informed the DSB that it was still examining 
draft legislation that would resolve this matter.  The fact that three years after the adoption of the DSB's recommendations the United States had not yet found a satisfactory solution to this dispute – 
which could only be the repeal of Section 211 – plai nly betrayed a lack of respect towards other WTO 
Members and in particular the country affected.  Sh e underlined that the fact  that the United States 
had submitted another status report, which was identi cal to that submitted at the previous meeting, 
showing no trace of progress towards a solution, was beyond belief.  With non-compliant Members such as the United States, it was very difficult for the DSB to function properly.  Indeed, the problem 
of compliance with the DSB's recommendations had turned into a major defect of the dispute 
settlement mechanism, which contained no provision  to encourage or enforce compliance with the 
DSB's recommendations. She noted that that matte r was being discussed in the context of the 
negotiations on clarifications and improvements to  the DSU.  In this connection, Cuba urged 
Members to work towards DSU provisions that woul d ensure compliance with the DSB's decisions.  
Once again, Cuba reminded the United States that it had only 10 days to implement the DSB's 
recommendations and rulings in the dispute under consid eration.  Cuba  also urged the United States, 
at long last, to honour its WTO commitments and repeal Section 211. 
6. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.32) 
7. The Chairman  drew attention to document WT/DS184/ 15/Add.32, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning US anti-dumping measures on certain hot-rolled steel products from Japan. 
8. The representative of the United States  said that his country had provided a status report in 
this dispute on 9 June 2005, in  accordance with Article 21.6 of the DSU.  As of 23 November 2002, 
the US authorities had addressed the DSB's recommendations and rulings with respect to the calculation of anti-dumping margins in the hot-rolled steel anti-dumping duty inv estigation at issue in 
this dispute.  Details were provided in document WT/DS184/15/Add.3.  The US administration 
continued to support specific legislative am endments that would implement the DSB's 
recommendations and rulings with respect to the US  anti-dumping duty statute, and was working with 
the US Congress to pass these amendments.  Indeed, the United States was pleased to note that, on 
19 May 2005, legislation had been introduced in the US House of Representatives (H.R. 2473) that 
would implement the DSB's recommendations and ruli ngs with respect to the US anti-dumping duty 
statute.  The US administration would continue to work with the US Congress to enact this legislation. 
9. The representative of Japan
 said that his country was pleased that a bill to amend the US anti-
dumping statute had been introduced to the US  House of Representatives on 19 May 2005.  He 
recalled that in 2004 based on the understanding and trust that the Un ited States would finally secure 
the implementation of the DSB's recommendations and ru lings in this dispute, Japan had agreed to a 
one-year extension of the reasonabl e period of time;  i.e. until 31 July 2005.  That reasonable period 
of time would expire within the next six weeks.  Japan urged the United States to take further steps 
promptly with regard to the consideration by the US Congress of the bill (H.R. 2473) so that the 
necessary legislative amendments would finally be secu red before the end of July 2005.  He reiterated 
that if the United States fell short of implementati on by 31 July 2005, Japan would be entitled to the 
recourse provided under the DSU. 
10. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/192 
Page 4  
 
(c) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.17 – WT/DS234/24/Add.17) 
11. The Chairman
 drew attention to document WT/D S217/16/Add.17 – WT/DS234/24/Add.17, 
which contained the status report by the United St ates on progress in the implementation of the DSB's 
recommendations in the case concerning the US Conti nued Dumping and Subsidy Offset Act of 2000. 
12. The representative of the United States  said that his country had provided a status report on 
9 June 2005, in accordance with Article 21.6 of the DSU.  As noted in that status report, the US 
administration had proposed repeal of the CDSOA in its budget proposal for fiscal year 2006.  In addition, legislation that would repeal the CD SOA had been introduced in the US House of 
Representatives.  The US administration would con tinue to work with the US Congress to enact 
legislation, and to confer with the complaining part ies in these disputes, in order to reach mutually 
satisfactory resolutions of these matters. 
13. The representative of th e European  Communities
 said that on 1 June 2005, the US Customs 
had published a notice of intent to distribute off set payments under the CDSOA.  That document was 
the first step in the process that would eventually result in a new distribution after 1 October, thus 
adding to the impairment and nullification already ca used not only to the co-complainants in this 
dispute, but actually to the whole WTO Membership.  By contrast, the status report did not record any progress in the implementation process.  The EC reca lled that since 1 May 2005,  it had been applying 
retaliatory measures on certain US products.  The EC  had not taken this decision lightly and hoped 
that it would focus minds and energies on the need to bring rapidly a satisfactory solution to this 
dispute. 
14. The representative of Canada
 said that his country noted the US status report concerning the 
Continued Dumping and Subsidy Offset Act of 2000.  On 1 May 2005, Ca nada had implemented 
retaliatory measures against the United States on imports  of live swine, cigarettes, oysters, and certain 
specialty fish originating in the United States.  Canada continued to express its disappointment with 
the United States' failure to repeal the WTO inc onsistent Byrd Amendment.  Canada again called 
upon the United States to end this dispute by repealing the Byrd Amendment. 
15. The representative of Korea  said that his country noted the statement made by the United 
States and its status report regarding implementati on of the DSB's recommendations and rulings in the 
dispute: "United States – Continued Dumping a nd Subsidy Offset Act of 2000" (CDSOA).  Korea 
also observed that the legislation repealing the CDSOA had been introduced in the US House of 
Representatives and had subsequently been referred in March to the Committee on Ways and Means.  
These developments were positive signs for resolving this prolonged dispute, and Korea hoped that 
the introduced bill would pass through the US Congress a nd be enacted into law in the near future.  
As previously mentioned, eight complaining parties to this dispute, including Korea, had handed the 
USTR an Aide Memoire on 3 June 2005 that stress ed the importance and urgency of implementation 
of the DSB's recommendations and rulings. Korea hope d that this joint effort by the complaining 
parties would help facilitate the US implementation. 
16. The representative of Japan  said that his country took note of the status report of the United 
States and welcomed the fact that the bill to re peal the CDSOA had been introduced to the US 
Congress in March.  Japan was eagerly awaiting the consideration and passage of the bill by the US 
Congress without delay.  Japan had taken up every opportunity to urge the early repeal of the 
CDSOA.  The importance of complying with the WTO obligations was well-recognized by the United 
States, as stated expressly during th e recent Japan/US bilateral economic -trade talks.  Japan strongly 
called on the United States to take a concerted ac tion towards a prompt implementation of the DSB's 
recommendations and rulings in this dispute.  As  from 1 May 2005, Canada  and the EC had been 
imposing additional duties on some US products.  In the beginning of June, eight complaining parties, 
including Japan, had submitted to the US Trade Re presentative, Mr. Robert Portman, an Aide  WT/DSB/M/192 
 Page 5 
 
 
Memoire urging the prompt repeal of the CDSOA.  Japan was also aware that voices had been raised within the United States to the same effect.  Japan was observing carefully how the US Congress 
might proceed with the consideration of the Bill H.R.1121.  Should the United States fail to make any 
progress, Japan intended to take appropriate actions to  address such a situation, including the exercise 
of its rights under the WTO Agreements in order to secure the implementation by the United States of 
the DSB's recommendations and rulings in this dispute. 
17. The representative of India
 said that his country thanked the United States for the status report 
on this agenda item and noted with great concern th at the report showed no change or progress from 
the one that had been submitted before the DSB at its meeting on 19 May 2005.   As his delegation had 
stated at that meeting, India preferred full compliance by the United States with the DSB's decision 
rather than  the suspension of concessions and othe r obligations, pursuant to the DSB's authorization, 
which had already been granted to India.  Like previous speakers, India urged the United States to 
take the necessary steps required to fully comply with its obligations immediately, so that India would  
not need to be compelled to take steps, like ot hers, to suspend concessions or other obligations. 
18. The representative of Brazil  said that his country noted with disappointment the US status 
report in the CDSOA dispute because no substance had been added since the previous reports that had 
been submitted before the DSB thus far.  Like previous speakers, Brazil urged the United States to 
repeal the Byrd Amendment as promptly as possible. 
19. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(d) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.7) 
20. The Chairman  drew attention to document WT/DS160/ 24/Add.7, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning Section 110(5) of the US Copyright Act. 
21. The representative of the United States  said that his country had provided a status report in 
this dispute on 9 June 2005, in accordance with Artic le 21.6 of the DSU.  As noted in the report, the 
US administration continued to work with the US  Congress on this matter.  The US administration 
would continue its consu ltations with the US Congress and confer with the EC in order to reach a 
mutually satisfactory resolution of this matter. 
22. The representative of the European Communities  said that almost five years after the adoption 
of the Panel Report by the DSB, his delegation w as still bound to note that the United States had not 
brought its Copyright Act into conformity with th e TRIPS Agreement.  This was a cause of great 
concern for the EC and, he believed, for the WTO Membership as a whole.  Therefore, action by the 
United States to remedy this unfor tunate situation would be important not only from the point of view 
of EC right holders, but also from a more general perspective, as it would dispel any doubts about the US commitment to appropriate copyright protection.  The EC expected that the United States would 
accord the highest priority to the resolution of this issue of great systemic importance.  Should that not 
be the case, the EC wished to recall that it had reserve d its right to reactivate, at any point in time, the 
arbitration proceeding on its retaliation request. 
23. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/192 
Page 6  
 
(e) Mexico – Measures affecting telecommunications services:  Status report by Mexico 
(WT/DS204/9/Add.6) 
24. The Chairman
 drew attention to document WT/DS204/ 9/Add.6, which contained the status 
report by Mexico on progress in the implementation of the DSB's recommendations in the case concerning Mexico's measures affecting telecommunications services. 
25. The representative of Mexico
 said that on 2 June 2004, his country and the United States had 
reached an agreement on the implementation in  the case on "Mexico – Measures Affecting 
Telecommunications Services".  He recalled that th at agreement consisted of the following: (i) the 
United States would recognize the right of Mexico to  continue to prohibit in ternational simple resale 
(ISR);  i.e. the use of private lines to carry public traffic; (ii) for its part, Mexico would eliminate, 
from its current International L ong-Distance Rules establishing the "uniform settlement rate" system, 
the "proportionate return" system and the requireme nt that the carrier with the largest share of 
outgoing traffic to a particular country should be the one to negotiate the settle ment rate on behalf of 
all Mexican carriers dealing with that country; (iii)  Mexico had also undertaken to put into effect, 
within 13 months following the adoption of the Pane l Report, the regulations needed to authorize, 
under Mexican law, the issuing of permits for resale of switched international long-distance 
telecommunications services. 
26. He recalled that since 2004 Mexico had complied with the first of its commitments by 
eliminating the aspects of its International Long-Dist ance Rules that the Panel Report considered to be 
WTO-inconsistent.  In that respect, in April 2005, Mexico had issued a draft regulation for the 
marketing of telecommunications services.  Under the provisions of this instrument, companies 
established in Mexico, whatever their country of origin, may market international long-distance 
services in Mexico without owning public telecommun ications networks.  This new legislation, along 
with the amendments that, since 2004, had allowed settlement rates to be freely negotiated between 
Mexican carriers and those from any other Member , confirmed the competitiveness of the Mexican 
telecommunications market.  Once all comments on the draft had been received, and the necessary 
domestic procedures for the final publication of th e regulation had been completed, Mexico hoped 
that, together with the United States, it would be able to notify the DSB that a mutually agreed 
solution to this dispute had been reached. 
27. The representative of the United States  said that his country thanked Mexico for its status 
report.  The expiration of the reasonable period of ti me was now close at hand, and the United States 
hoped that Mexico would be able to successfully im plement its proposed regulations for the resale of 
telecommunications services, the last element of their implementation agreement. 
28. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(f) European Communities – Conditions for the gr anting of tariff preferences to developing 
countries:  Status report by the European Communities (WT/DS246/16/Add.2) 
29. The Chairman  drew attention to document WT/DS246/ 16/Add.2, which contained the status 
report by the European Communities on progr ess in the implementation of the DSB's 
recommendations in the case concerning the EC's cond itions for the granting of tariff preferences to 
developing countries. 
30. The representative of th e European Communities  said that on 20 April 2004, the EC had  
confirmed its intention to implement fully the DSB' s recommendations and rulings in this dispute.  
Already on 20 October 2004, the European Commission had proposed to the EC Council a new GSP 
regulation which would, inter alia , repeal the "Drug Arrangement " under Council Regulation (EC)  WT/DSB/M/192 
 Page 7 
 
 
No. 2501/2001.  As stated in the status report subm itted to the DSB, that proposal was currently under 
discussion within the EC Council. 
31. The representative of India  said that his country wished to thank the EC for its third status 
report regarding the implementation of the DSB's reco mmendations and rulings in this dispute.  India 
noted that the status report showed no progress since th e first status report that had been received by 
the DSB.  However, India recognized that the EC had until 1 July 2005 to comply with the DSB's 
decision.  India hoped that the EC would take th e necessary steps to meet this deadline, and looked 
forward to the EC fully complying with the DSB' s recommendations and rulings within the reasonable 
period of time. 
32. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(g) Canada – Measures relating to exports of wheat and treatment of imported grain:  Status 
report by Canada (WT/DS276/20/Add.1) 
33. The Chairman  drew attention to document WT/DS276/ 20/Add.1, which contained the status 
report by Canada on progress in the implementation of the DSB's recommendations in the case 
concerning Canada's measures rela ting to exports of wheat and treatment of imported grain. 
34. The representative of Canada  said that his country was pleased to inform the DSB that 
legislation to bring Canada into compliance with its WTO obligations had been passed on 
19 May 2005.  This legislation, along with asso ciated regulatory changes now under way, would 
come into force on 1 August 2005, the agreed upon deadline for compliance.  Canada welcomed this 
opportunity to provide a status report on its impl ementation of the rulings and recommendations in 
this matter.  He noted that Canada's written report had been filed with the DSB on 4 May 2005. 
35. The representative of the United States  said that his country thanked Canada for its status 
report.  The United States appreciated the additiona l information provided therein in response to its 
questions raised at the previous DSB meeting.  At the present meeting, the United States asked two 
follow-up questions to confirm its understanding of th at information.  The United States understood, 
based on Canada's status report, that Canada intended to promulgate a new regulation requiring 
elevator operators to notify the Canadian Grain Co mmission of the origin of all grain.  The United 
States asked if Canada could confirm that this wa s the only new regulation it intended to promulgate 
to replace the old measures related to mixing foreign grain with Canadian grain and entry of foreign 
grain into Canadian grain elevators.  In addition, the United States asked if Canada could confirm that 
it did not intend to introduce any new regulations rela ted to the extension of the rail revenue cap to 
cover foreign grain shipments. 
36. The representative of Canada  said that both questions were pe rtinent and, quite naturally, as 
Canada had chosen to implement in good faith, it wo uld not seek to undo by other means what it was 
doing through the implementation measures.  To the b est of his understanding, the answer to the first 
question was that Canada did not intend to promulgate  new regulations relating to the origin of grain, 
other than that which it had notified.  With respect  to the second question, Canada did not intend to 
introduce new measures in respect of the revenue cap , other than that which it had indicated.  That 
was his understanding of the situation.   Nevertheless, he would undertake to refer these issues to his 
authorities and in the next status report, which he  hoped would be the fina l report, Canada would 
confirm the state of affairs at that point. 
37. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. WT/DSB/M/192 
Page 8  
 
2. Egypt – Anti-dumping duties on matches from Pakistan 
(a) Request for the establishment of a panel by Pakistan (WT/DS327/2) 
38. The Chairman
 drew attention to the communication from Pakistan contained in document 
WT/DS327/2, and invited the representative of Pakistan to speak. 
39. The representative of Pakistan  said that his country welcomed the opportunity to state the 
views of Pakistan regarding its request for the establishment of a panel, set out in document 
WT/DS327/2.  On 21 February 2005, Pakistan ha d requested consultations with Egypt regarding 
definitive anti-dumping duties imposed on imports of  matches in boxes from Pakistan.  Consultations 
had been held with Egypt on 21 March and 3 June 2005.   Despite Pakistan's efforts, and contrary to its 
intentions, those consultations had failed to resolve Pakistan's concerns about the Egyptian measure at 
issue.  Pakistan regretted that the consultations process had proved not to be an adequate forum in 
which to fully address Pakistan's concerns.  Pakistan , therefore, continued to  consider that Egypt's 
actions leading to, and the imposition of, the anti-dumping duties at issue in this dispute to be inconsistent with Egypt's obligations under Artic le VI of GATT 1994 and the provisions of the Anti-
Dumping Agreement cited by Pakistan.  Pakistan, th erefore, felt that it had no option, but to request 
the establishment of a panel to address the matter set out  in the panel request.  Pakistan trusted that the 
panel process would provide a full opportunity to addr ess and resolve all of its concerns regarding the 
measure at issue. 
40. Pakistan's panel request spoke for itself, and at  the present meeting he did not wish to repeat 
all of Pakistan's specific concerns.  He only wi shed to emphasize that in Pakistan's view, the 
imposition of definitive anti-dumping duties was incons istent with the obligations of Egypt under 
Article VI of GATT 1994 and the provisions of the Anti-Dumping Agreement that had been cited by 
Pakistan.  Furthermore, this imposition frustrated the efforts taken by Pakistan to promote its exports 
in the context of South-South trade.  Egypt was one  of Pakistan's biggest markets for the products at 
issue.  Exports to Egypt had been severely affected  since the imposition of the contested measures.  
Therefore, it was particularly important for Pakistan  that a panel be established at the present meeting, 
and that the Panel complete its task within the si x-month time-frame envisaged in Article 12.8 of the 
DSU. 
41. He noted that Article 3.10 of the DSU stated th at "the use of dispute settlement procedures 
should not be ...  considered as [a] contentious act ".  That same Article obliged WTO Members to 
engage in dispute settlement procedures in good faith in  an effort to resolve disputes.  In requesting a 
panel in this dispute, Pakistan ha d been guided by that Article.  Pa kistan enjoyed excellent relations 
with Egypt, and viewed this dispute as simply a di sagreement between friends that would not affect 
the valued relationship between the two countries.  Pakistan was confident that Egypt would share a 
common goal with Pakistan;  i.e. to assist the pa nel and expedite the proceedings, with a view to 
finding a positive solution to this dispute.  Pakistan , therefore, hoped that Egypt would join in the 
consensus to establish a panel at the present meeting. 
42. The representative of Egypt
 said that, like Pakistan, Egypt valued the relationship between the 
two countries. Egypt was also a strong believer in South-South trade as the main engine for development and Pakistan was one of those countri es which had been trading with Egypt for a long 
time.  Therefore, his delegation shared the feelings  expressed by Pakistan.  However, Egypt found it 
really regrettable that Pakistan had decided to pursue this matter further by requesting the 
establishment of a panel for several reasons. 
43. First, Egypt believed that it had done its utmo st to resolve this dispute in a mutually 
satisfactory manner.  As stated by Pakistan, during the two rounds of consultations that had been held 
in Geneva on 21 March and 3 June 2005, Egypt had addressed all the concerns of Pakistan and had 
provided a full explanation of the various aspects of its anti-dumping investigation concerning the  WT/DSB/M/192 
 Page 9 
 
 
import of matches in boxes imported from or originating in, inter alia , Pakistan.  It was, therefore, 
surprising that some of the issues appeared to have  been cleared through the consultations were still 
included in the panel request.  For example with rega rd to the treatment reserved by the investigating 
authority to cooperating exporting producers to take  into account the difficulties faced by them;  or, 
for example, with regard to the u se of best information available. 
44. Second, Egypt noted that Pakistan's request for the establishment of a panel had failed to 
satisfy the requirements of Article 6.2 of the DSU.   The list of measures set forth in footnote 1 was 
not exhaustive.  It only referred to some  of the determinations issued by the Egyptian authorities in the 
course of the investigation.  In addition, in its re quest for the establishment of a panel, Pakistan had 
raised claims outside the purview of the consultati ons.  For example, Pakistan had cited breaches of 
Article 12.1 of the Anti-Dumping Agreement, a pr ovision never addressed during the consultations.  
Moreover, some of the claims raised by Pakistan, par ticularly with regard to the injury determination, 
were insufficiently specific to presen t clearly the legal problems that were alleged to be the issue. 
45. Third, the proceedings concerning the anti-dum ping measures imposed by Egypt on matches 
in boxes imported from Pakistan were still pending be fore the Administrative Court in Egypt.  Since 
the Court's ruling was expected in the near future , Egypt considered that Pakistan's decision to 
proceed further by requesting the establishment of a panel was premature.  Finally, despite the claims 
raised by Pakistan in its request for the establis hment of a panel, Egypt was confident that these 
measures were consistent with th e relevant provisions of Article VI of GATT 1994 and of the Anti-
Dumping Agreement.  In light of the foregoing, Egypt unfortunately was not in a position to accept 
Pakistan's request for the establishment of a panel at the present meeting. 
46. The representative of Pakistan  said that his country was disappointed that Egypt had  chosen 
not to join in the consensus to establish a panel at the present meeting.  The companies affected by the 
imposition of anti-dumping duties issues in this case were small and vulnerable and depended on their 
market access to Egypt.  Any further delay in reso lving this issue would be detrimental to their 
survival.  Pakistan, therefore, looked forward to th is matter being discussed at the next meeting of the 
DSB on 20 July 2005 and to the panel being established on that date. 
47. The DSB took note  of the statements and agreed  to revert to this matter. 
3. European Communities – Measures aff ecting trade in commercial vessels 
(a) Report of the Panel (WT/DS301/R) 
48. The Chairman  recalled that at its meeting on 19 March 2004, the DSB established a panel to 
examine the complaint by Korea pertaining to this matter.  The Report of the Panel, contained in 
document WT/DS301/R had been circulated on 22 April 2005 as an unrestricted document, pursuant 
to the Procedures for the Circulation and Derestri ction of WTO Documents contained in WT/L/452.  
He said that the Panel Report was now before the DS B for adoption at the request of Korea.  This 
adoption procedure was without prejudice to the right  of Members to express their views on the Panel 
Report. 
49. The representative of Korea  said that first his country wished to express its gratitude to the 
members of the Panel and the Secretariat for thei r hard work in this case  "European Communities – 
Measures Affecting Trade in Commercial Vessels".  Korea considered this an important case in 
defense of the WTO dispute settlement system.  As Members were aware, there had been a long-
running disagreement between Korea and the EC regarding shipbuilding. The failure of the 
consultations between the parties had led the EC to initiate the Panel's proceedings in "Korea – 
Commercial Vessels" (DS273) on 21 July 2003.  Ha d that been the only result of the failure of the 
consultations, Korea would have been satisfied with seeing the disagreement resolved within the 
context of the WTO dispute settlement system.  Un fortunately, however, the EC had chosen to impose WT/DSB/M/192 
Page 10  
 
a retaliatory measure, the so-called "Temporary Defe nse Mechanism", against Korea, at the time of 
the initiation of DS273.  The EC's measure and accompanying EC member States' measures had 
resulted in discriminatory payments of six per cent ad valorem  being granted to EC shipbuilders 
whenever they were competing against Korean shipbuilders. 
50. On 7 March 2005, the DS273 Panel had rightly found that the measures related to 
restructuring of Korean shipyards, which was the basis of the EC's retaliatory measures, were not 
subsidies.  It had now become clear that Kor ea had suffered for three years as a result of these 
groundless and unilateral retaliatory measures taken by the EC.  This demonstrated perfectly why 
Members should not try to take the law into th eir own hands, and prejudge the outcome of WTO 
dispute settlement proceedings with their own un ilateral measures.  The Panel Report in this 
case (DS301) had made a strong statement against un ilateralism:  "Members may not seek to obtain 
results that can be achieved through the remedies of the DSU by means other than recourse to the 
DSU."
1  The settlement of disputes regarding WTO obliga tions must remain within the confines of the 
dispute settlement system.  This was the most importa nt lesson that the Panel had brought to Korea.  
While Korea was satisfied with the Panel's im portant findings and rulings on the issue of 
unilateralism, it did have some concerns with th e Panel's ruling regarding Article 32.1 of the SCM 
Agreement.  With respect to Article 32.1, the Pane l had made a factual finding that the EC measures 
were "counter-subsidies".  The Panel had considered that such counte r-subsidies had satisfied the first 
part of the test under Article 32.1 in that they we re "specific action" related to the alleged Korean 
subsidization.  However, the Pane l had found that they were not "against" alleged Korean subsidies.  
Given the factual finding that the EC measures were  counter-subsidies, it was inexplicable how such 
measures could not be considered as being against th e alleged Korean subsidies.  That was precisely 
what it meant to be "counter" to something.  St rangely, the Panel had argued that there must be 
something more to the measure than just being "again st".  As an additional element to be sufficiently 
"against", the Panel had given an example that "t he counter-subsidy was funded through a transfer of 
financial resources between the foreign produ cer/exporter and the domestic competitor."2 
51. This example had no basis in the treaty language .  There was no furthe r test saying that it 
must be very much against the alleged subsidies or must be against such alleged subsidies in a form 
that required a transfer of financial resources.  As  had been noted in this case, there were relatively 
few imports of ships into the EC.  In such situa tions, there was no jurisdictional basis for the EC to 
compel such a financial transfer industry from the Ko rean shipyards to the EC industry.  Korea was of 
the view that the Panel had erred in its legal inte rpretation of Article 32.1 of the SCM Agreement.  
However, despite Korea's concerns about some aspect s of the Panel's decision, Korea had decided not 
to appeal, in consideration that this dispute was fundamentally about unilateralism and the integrity of 
the WTO dispute settlement system.  Korea consid ered this a very important decision applying 
Article 23 of the DSU and welcomed the Panel's decision.  A sense of responsibility as a leading 
shipbuilding industry was also considered in reachin g the decision not to appeal.  Both Korea and the 
EC were major leaders in the world shipbuilding industry.  Given the magnitude of shipbuilding 
industry within, and its importance to, the global economy, further confrontation between the major 
leaders might bring adverse effects on a global scale.  Certainly, that was not what Korea wanted to 
see happen.  Korea wished to turn back from the p ast now, and to step forward with the EC in the 
direction of enhancing the shipbuilding industry so that  all participants shared the benefits.  While the 
EC's measure had expired, it was im portant to note that the EC memb er States were permitted for up 
to three years after the authorization of funding to actually make the implementing transfers of such 
funds. In light of this, and the Panel's statemen ts that such continuing implementation would be 
covered by the Panel's recommenda tions, Korea urged the EC and its member States to immediately 
halt these illegal transfers of funds.  Korea reserved the right to request consultation with the EC on 
this matter whenever necessary.  Before concluding , Korea wished, once again,  to thank the Panel for 
its hard work and requested that the DSB adopt  the Panel Report as contained in WT/DS301/R. 
                                                      
1 Panel Report at para. 7.196. 
2 Panel Report at para. 7.194.  WT/DSB/M/192 
 Page 11 
 
 
52. The representative of the European Communities  said that, first of all, the EC wished  to 
thank the Panel and the Secretariat for their work .  While disagreeing with some aspects of the 
findings reached, the EC had agreed with many ot her aspects of this Report and had acknowledged 
the time and efforts dedicated to this dispute.  The EC welcomed the fact that the Panel had dismissed 
the vast majority of the claims made by Korea and had found that the Temporary Defensive 
Mechanisms (TDMs) did not violate any of the obligations under the GATT 1994 and the SCM 
Agreement.  However, the EC failed to unders tand how the TDM which was not a specific action 
against subsidization under Article 32.1 of the SCM Agreement was ne vertheless an attempt to induce 
Korea to stop subsidization of its shipyards and,  therefore, did not respect the obligation under 
Article 23.1 of the DSU to use exclusively the WTO dispute settlement system to solve a dispute over 
Korean subsidization of shipyards.  Actually, the introduction of the TDM had responded mainly to 
the non-implementation by Korea of a bilateral agre ement on injurious pricing, not to an alleged 
breach of WTO obligations.  To this end, the TD M Regulation had provided for a limited introduction 
of subsidies under strict State aid rules.  To achieve  this, the EC had applied objective criteria in terms 
of market – only where there was competition from Korea – and in terms of timing – until 
31 March 2005 at the latest or earlier should the WTO dispute settlement be resolved.  All that the EC 
was trying to do was to allow all EC shipyards to receive assistance in the sectors and circumstances 
where unfair competition had been established.  Th e TDM had never been conceived as a unilateral 
act falling within the sphere of WTO law.  The EC had always been and continued to be a key 
promoter of multilateralism in the WTO and else where. Despite these reservations, the EC had 
decided not to appeal.  Since the TDM regulati on had expired on 31 March 2005, the question had 
now become theoretical and the EC did not wish to overburden the Appellate Body and the dispute 
settlement system.  Finally, he said that the Pa nel's recommendations did not address the issue of 
payments.  Actually, despite Korea's specific re quest, the Panel had expressly declined to make 
recommendations in this respect. 
53. The representative of Korea  said that his country did not wish to repeat the legal arguments 
that it had exchanged with the EC during the Panel's proceedings, but felt obliged to respond briefly to 
the statement made by the EC on the TDM measures.  Korea considered that statement to be factually 
incorrect.  While the ability to authorize new fina ncial supports had expired as of 31 March 2005, that 
did not mean that the measures were not in eff ect.  This was because the TDM permitted that the 
actual disbursements could take place for up to three years after the date of granting.  Thus, it was Korea's understanding that payments were still being made under the previous authority of the EC's 
unilateral measure, the TDM.  Those payments must  cease immediately.  There had been discussions 
on this issue before the Panel.  Korea had argue d that any such disbursements must end as the 
measure authorizing them had been found to be inco nsistent with the EC's WTO obligations.  The EC 
had never firmly stated that it considered that further implementing steps would be covered by the 
Panel's ruling.  Korea had asked the Panel to make an affirmative statement that such disbursements 
would be covered.  This situati on was the reason for a part of the Panel's conclusion that Members 
might find difficult to understand without further expl anation.  In paragraph 8.4 of its Report, the 
Panel stated:  "Therefore, the Panel considers th at its recommendation does not apply to the schemes 
that have expired, but except to the extent that th ose schemes continue to be  operational".  The Panel 
had not wished to either make a finding that a pa rty would act in bad faith in implementation by 
continuing to implement impugned me asures, nor had the Panel wished to prejudge the facts.  
Nonetheless, the Panel had made it abundantly cl ear that its recommendation to terminate illegal 
measures did apply to the extent that the schemes remained operational;  i.e., if the funds were still 
being disbursed.  In light of this, Korea looked forward to hearing from the EC what steps it was going to take to end the disbursement of funds  pursuant to the measures that had been found 
inconsistent with the EC's WTO obligations. 
54. The representative of the United States
 said that when Korea had first requested the 
establishment of a panel, the United States had indicated that it would be following this dispute with the utmost interest.  At the present meeting, the Un ited States wished to draw Members' attention to a 
few points that should, in fact, be of interest.  His delegation first wished to turn to the Subsidies WT/DSB/M/192 
Page 12  
 
Agreement aspects of this dispute.  The United States noted that with respect to its claim under 
Article 32.1 of the Subsidies Agreement, Korea ha d relied on the reasoning of the Appellate Body in 
the CDSOA dispute.  The Panel had rejected Kore a's claim, but it had done so by relying upon an 
analysis that was difficult to reconcile with the outcome in the CDSOA dispute. 
55. In the Report before the DSB at the present meeti ng, the Panel had noted that the provision of 
subsidies in response to subsidies provided by a nother Member could not by itself give rise to a 
violation of Article 32.1, because that would be  tantamount to creating a new class of prohibited 
subsidies.  Rather, the Panel had concluded that there must also be some additional element beyond 
the effect of the subsidy, such as a "trans fer of financial resources" between foreign 
producers/exporters and their domestic competitors, in order to dissuade  subsidization.  However, the 
Panel's analysis of Article 23.1 of the DSU had generated inconsis tencies with its analysis of 
Article 32.1 of the SCM Agreement.  First, notw ithstanding its SCM Agreement discussion, the Panel 
in fact had created a new category of prohibited s ubsidy – subsidies prohibited by Article 23.1 of the 
DSU.  Second, the Panel had found that, for purposes of Article 23.1, the EC subsidies created "an 
incentive for Korea to alter its conduct" with respect to Korea's own subsidies.  In so finding, the 
Panel had arguably undermined its finding under Artic le 32.1 that the EC subsidies did not have the 
effect of dissuading subsidization by Korea. Furt hermore, the United States had found quite startling 
the Panel's reasoning that it was a breach of Article  23.1 of the DSU for a Member to take any steps 
outside of formal WTO dispute settlement to seek to have another Member remove a WTO-
inconsistent measure.  This reas oning would have profound implications.  It was quite surprising that 
a panel would think that a Member could not pursue  informal means to resolve a dispute, but must 
instead commit the time and resources needed for fo rmal dispute settlement.  Further, under the 
Panel's reasoning, it would be a brea ch of Article 23.1 for a Member to simply ask another Member to 
remove a WTO-inconsistent measure.  More specifica lly, in the context of subsidies, it would be a 
breach for a Member to do anything to seek to in fluence the conduct of another Member so that the 
other Member would remove the adve rse effects of a subsidy.  However, it was difficult to see how an 
action that mitigated the adverse effects would not affect the subsidizing Me mber's conduct. And the 
Panel's test of "designed to influence the conduct" would appear to be a subjective test, although in 
other contexts the Panel had emphasized that it di d not endorse subjective tests. The United States 
took no position on whether the EC's measures at issue were consistent or inc onsistent with the EC's 
WTO obligations.  However, it did wish to note some of the logical conundrums posed by this Report. 
56. The DSB took note
 of the statements and adopted  the Panel Report contained in 
WT/DS301/R. 
4. Appointment of Appellate Body members 
57. The Chairman  said that the appointment of any individual to serve on the Appellate Body 
required a formal decision of the DSB.  Similarly, the reappointment of Appellate Body members for a second term was not automatic and required consider ation by, and a formal decision of, the DSB.  
He recalled that Messrs. Luiz Olavo Baptista, Jo hn Lockhart, and Giorgio Sacerdoti had all been 
appointed by the DSB on 11 December 2001 to serve as Appellate Body members.  Their four-year 
terms would end on 11 December 2005.  Pursuant to Article 17.2 of the DS U, they were eligible to be 
reappointed by the DSB for a second term.  All th ree gentlemen had indicated that they would 
welcome the opportunity to serve on the Appellate Body for a second term.  He further stated that either the reappointment of these three existing Ap pellate Body members or the appointment of new 
Appellate Body members to replace them would require a process to be followed by the DSB that 
would permit a decision to be taken well in advance of the expiry of the terms of Messrs. Baptista, 
Lockhart, and Sacerdoti so as not to disrupt the sm ooth and continuous functioning of the Appellate 
Body.  In the light of WTO Members' anticipated  focus in the Autumn on work towards the Hong 
Kong Ministerial Conference, he believed that it was advisable to seek to  resolve this issue as 
expeditiously as possible in the next few months.  The DSB had two options to address the expiry of 
the terms of Messrs. Baptista, Lockhart, and Sace rdoti:  (i) reappointment of some or all three  WT/DSB/M/192 
 Page 13 
 
 
gentlemen for a second term, or (ii) depending on the DSB's decision on reappointment, the 
appointment of new Appellate Body members for any or all of the three positions for which there was 
no reappointment.  In the past, the DSB had alwa ys reappointed Appellate Body members who had 
expressed a desire to serve a second term, having so renewed the terms of  eight Appellate Body 
members.3  The DSB's decision on reappointment in those instances had followed a process of 
informal consultations with delega tions conducted by the Chair of the DSB.  This process had worked 
well on previous occasions.  At the present meeting, he  would, therefore, submit that the DSB follow 
a similar process to address the expiry of the terms of Messrs. Baptista, Lockhart, and Sacerdoti, and 
in particular the following four points:  (i) to launch, as from 20 June 2005, the process leading up to a decision on the positions held by Messrs. Baptis ta, Lockhart, and Sacerdoti; (ii) as regards the 
possible reappointment of Messrs. Baptista, Lockhart , and Sacerdoti, that the Chairman would consult 
with interested delegations over the next three week s, with a view to informing the DSB, by 20 July 
2005, of the results of these consultations; (iii) that, if his consultations with  delegations revealed  
significant support for the reappointment of all thr ee gentlemen, the DSB be so informed on 20 July 
and that a formal decision on the reappointment of  these three individuals be taken at an early 
subsequent DSB meeting;  and (iv) that, if WTO Members reveal a preferen ce for appointing one or 
more new Appellate Body members, a process be  initiated at the 20 July DSB meeting for the 
consideration and possible selection of new individual s to serve on the Appellate Body based on past 
practice.  Finally, he invited delegations to comment upon the suggestions outlined by him for 
arriving at a decision on the positions held by  Messrs. Baptista, Lockhart, and Sacerdoti. 
58. The representative of the European Communities
 said that the EC welcomed the Chairman's 
initiative and agreed with his proposal on this matter.  
59. The DSB took note  of the statements.  
60. The Chairman  invited any delegations with view s on the positions currently held by 
Messrs. Baptista, Lockhart, and Sacerdoti to contact hi m before 15 July 2005 so as to ensure that their 
views were considered.  He would inform the DS B at the 20 July meeting of the results of his 
consultations with WTO Members.  He said that he looked forward to receiving their views. 
61. The DSB took note  of the statement. 
5. European Communities – Definitive safeguard measure on salmon 
(a) Statement by Chile  
62. The representative of Chile , speaking under "Other Business", said that her delegation wished 
to draw Members' attention to the fact that Chile had withdrawn its request for consultations 
pertaining to the case:  "European Communities – Definitive Safeguard Measure on Salmon". This 
was due to the fact that the EC had terminated its measures that had been considered by Chile to be 
inconsistent with the WTO Agreement.  She said that  the withdrawal of this request had been notified 
to the DSB and circulated in document WT/DS326/4 on 17 May 2005.  In this connection, Chile wished to note that there was a number of requests for consultations, initiated under the DSU 
provisions, which had neither been the subject of mu tually agreed solutions nor had proceeded to the 
panel stage.  Chile would wish to see that this si tuation be remedied with regard to as many as 
possible of such requests. 
63. She underlined that Chile's decision to withdraw  its request on no account prejudged  its right 
to oppose or challenge a similar measure or any other measure affecting farmed salmon or other 
                                                     
 
3Terms were renewed for Appellate Body members in 1997 (for Messrs. Ehlermann, Feliciano, and 
Lacarte-Muró), 1999 (for Messrs. Bacchus and Beeby), and 2003 (for Messrs. Abi-Saab, Ganesan, and 
Taniguchi). WT/DSB/M/192 
Page 14  
 
products or services of Chilean origin in the EC market.  Chile hoped that the EC market would remain open to Chilean exports, and that access woul d not be inhibited by other protective measures 
in the future. 
64. The representative of the European Communities
 said that the EC welcomed Chile's initiative 
to withdraw its consultation requ est pertaining to the Salmon case. 
65. The DSB took note  of the statements. 
 
__________