RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/222 
12 January 2007 
 (07-0163) 
Dispute Settlement Body 
21 November 2006  
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 21 November 2006  
 
Chairman:  Mr. Muhamad Noor Yacob (Malaysia) 
 
Subjects discussed : Page  
 
1. Surveillance of implementation of recommendations adopted by the DSB.........................2  
(a) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States .............................................................................................................. ...........2  
(b) United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by  the United States...................................................................................5  
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the 
United States ................................................................................................................. .............5  
2. Implementation by the European Co mmunities of the recommendations and 
rulings of the DSB in relation to "European Communities – Regime for the Importation, Sale and Distribution of Bananas" and related subsequent WTO proceedings ................................................................................................................ .....6
 
(a) Statements by Honduras and Panama .........................................................................................6  
3. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ............................................8  
(a) Statements by Canada, the Eur opean Communiti es and Japan...................................................8  
4. Statement by Ecuador regarding the European Communities' regime for the 
importation, sale and distribution of bananas......................................................................10  
5. United States – Customs Bond Directive for merchandise subject to 
anti-dumping/countervailing duties ......................................................................................12  
(a) Request for the establishment of a panel by India ....................................................................12  
6. European Communities – Measures affecting the approval and marketing of 
biotech products............................................................................................................... .......13  
(a) Reports of the Panel........................................................................................................... .......13  
7. Adoption of the 2006 draft Annual Report of the DSB .......................................................17  
8. United States – Subsidies on upland cotton..........................................................................17  
(a) Statements by the United States and the EC concerning Brazil's intervention made at the 
26 October 2006 DSB meeting regarding the composition of the Article 21.5 panel. .............17  
 WT/DSB/M/222 
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.48) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.48) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.23) 
 
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 three 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.48) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.48, 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 November 2006, in accordance with Article 21.6 of the DSU.  As noted in the status 
report, several legislative proposals that would im plement the DSB's recommendations and rulings in 
this dispute had been introduced in the current C ongress, both in the US Senate and the US House of 
Representatives.  The US administration continued to  work with the US Congress to implement the 
DSB's recommendations and rulings.  
4. The representative of th e European Communities  said that, again, the EC had to stress the 
continuous inaction of the United States in this di spute.  The United States had repeated every month 
that its administration was working with the US Congress to implement the DSB's rulings and 
recommendations. The EC wished to learn more about those efforts and to see some results.  
However, since March 2005 the EC had seen, each mont h, status reports which were identical.   And, 
for more than four and a half years, the EC ha d not seen any serious progress towards complying with 
the DSB's ruling.  The EC regretted that situation as much as the United States might regret it.  But, 
the fact remained that the persistent ignoran ce of core obligations of the TRIPS Agreement 
undermined the authority of that agreement.  The recent decision by the US administration to refuse, 
on foreign policy grounds, the specific licence that wo uld have allowed the renewal of the registration 
of the Havana Club trade mark had also sent the wrong message.  The renewal would not have given 
away or granted rights. It would have only preserve d the status quo and would have thus allowed US 
courts to decide, in pending proceedings, who was th e legitimate owner of that mark.  Ownership of 
intellectual property rights should be decided in cour ts on the basis of the ru le of law and free from 
the interference of political considerations.  If the exam ple set by this decision were to be followed by 
others, this would seriously undermine the efforts aimed at promoting rules-based protection of 
intellectual property rights worldwide.  Therefore, the EC invited the United States to reconsider its 
position, in light of seriously damaging effects.  Finally, the EC urged the United States, the only WTO Member that consistently did not comply w ith panel rulings under the TRIPS Agreement, to 
bring itself into compliance.  WT/DSB/M/222 
 Page 3 
 
 
  5. The representative of Cuba  said that the United States had failed to implement the 
recommendations and rulings in the Section 211 disput e despite the fact that almost five years had 
passed since their adoption by the DSB.  Furtherm ore, the United States had continued to submit 
empty reports that lacked any commitment towards th e task that the US administration claimed to be 
carrying out with a view to reaching a solution or  setting the date when such a solution could be 
reached.  Since the beginning of this dispute, Cu ba had systematically de nounced the undisputed 
motives and circumstances which had led the Unit ed States to adopt Section 211 as part of its 
Appropriations Act of 1998, which only satisfied the interests of the Bacardi company, so as to 
deprive the owners of the Havana Club trademark of  their rights within the US territory.  The US 
attitude had set a negative precedent with regard to  the protection of intellectual property rights by 
any other WTO Member in that territory and was completely different from the protection that his 
country provided to thousands of US  trademarks registered in Cuba. 
6. Despite the irrefutable truth of the above, th e United States had stated at the previous DSB 
meeting that the rulings and recommendations in th is dispute had not referr ed or related to any 
proceeding regarding any trademark.  Even worse,  the United States was attempting to justify its 
unacceptable decision to refuse the request for th e renewal of the Havana Club trademark with 
dubious arguments relating to foreign policy  consideration.  Section 211, which had been declared 
incompatible with the basic rules and principles of the WTO, should have been repealed a long time 
ago.  However, it was still in force and thus th e legitimate rights of Cuban and French businessmen 
continued to be prejudiced.  The United States had a very bad reputation in the WTO due to its repeated failures to implement the DSB's rulings.  Evidence of that was provided by the fact that 
long-standing disputes such as the one under consideration had appeared under agenda Item 1 of the 
most recent DSB meetings.  This situation increasi ngly eroded the credibility of the dispute settlement 
mechanism and affected the multilateral trading sy stem.  Several WTO Members had already been 
alerted by this development.  C uba reiterated, once again, its call that the United States take prompt 
and effective action to enforce the DSB's rulings  and recommendations and the WTO Agreements by 
removing Section 211, since that was the only possible solution to this dispute. 
7. The representative of Brazil
 said that by stating twice – in Articles 3.3 and 21.1 of the DSU – 
that prompt compliance was essential to the prope r functioning of the WTO and the maintenance of a 
proper balance between the rights and obligations of  Members, the DSU was absolutely clear that 
prompt compliance was one of the cornerstones of  the WTO dispute settlement mechanism.  Brazil 
stated that situations like the one under considerat ion were not in harmony with this fundamental 
principle.  Moreover, non-compliance situations lacking any perspective of a solution altered the 
carefully negotiated balance of rights and obligations  to the detriment not only of the complaining 
party, but also the whole Membership.  In view of these considerations, Brazil urged the United States to take the necessary and urgent steps to put an end to the violations found in this dispute.  
8. The representative of India
 said that his country wished to  thank the United States for the 
status report and its statement.  However, India felt compelled yet again to stress that the principle of 
prompt compliance with the DSB's rulings and r ecommendations appeared to be missing in this 
dispute.  This was a matter of great systemic conc ern, since almost five years had elapsed since the 
adoption of the DSB's recommendations and rulings in this case.  India again urged the parties to this 
dispute to inform the DSB as to how they intended to fulfil the objective of prompt settlement. 
9. The representative of the Bolivarian Republic of Venezuela  said that his delegation thanked 
Cuba for the statement made at the present meeti ng and wished to be full y associated with that 
statement.  His country considered Cuba's claim to be just.  This had been demonstrated by the DSB 
when it had adopted the conclusion that Section 211  was incompatible with the WTO Agreements and 
its basic principles.  His country had also noted the US status report in which the United States, once again, had  clearly displayed that it had little inte rest in complying with the Panel's recommendations. 
The situation, which once again was being discussed at the present meeting, was of great concern to WT/DSB/M/222 
Page 4  
 
  his country.  He noted that in most cases in which panels had found in favour  of developing countries, 
the recommendations had not been implemented.  This not only harmed Cuba, but also undermined 
the DSU, which his country considered to be an essential element in bringing security and 
predictability to the multilateral trading system.  A failu re to comply on the part of the United States 
also affected the basic pillars on which the TRIPS Agreement was based as well as the credibility of 
the WTO.  Furthermore, the arbitrary and discr etionary behaviour of the United States in the 
implementation of the recommendations of panels ha d resulted in a legitimate reluctance on the part 
of his country to negotiate and accept new commi tments in the DSU negotiations as well as in the 
Doha Round negotiations.  His country wished to e xpress, once again, its great concern at the recent 
decision by the US Patent and Trademark Office to reject the request for the renewal of the 
registration of the "Havana Club" trademark, whic h had been submitted by the Cuban company that 
owned that trademark.  This was possible through recourse to the arbitrary and illegal Section 211, 
which had enabled a powerful North American compan y to appropriate the Havana Club trademark.  
However, his delegation once again urged the parties to find a rapid solution to this dispute, which would be in line with the WTO Agreements.  
10. The representative of China
 said that his country thanked the Unites States for its status report 
and its statement.  As other delegations had stat ed, it had been about five years since the DSB had 
adopted both the Panel and the Appellate Body Repor ts in this dispute.  However, the issue of 
implementation was still being discussed in the DSB.  It was regrettable that the status report before 
the DSB at the present meeting was identical to th e report which had been submitted in the previous 
month, and did not provide any new information as to when this matter would be resolved to the 
satisfaction of the parties to the dispute and ot her WTO Members.  Although China was conscious of 
possible difficulties involved in implementation, th e undue delay of full implementation of the DSB's 
rulings had caused systemic concerns about the func tioning and efficiency of the dispute settlement 
system.  He noted that Article 21.1 of the DSU provided that prompt compliance with the DSB's 
recommendation or rulings was essential to ensure eff ective resolution of disputes to the benefit of all 
Members.  Therefore, China again urged the United States to fully implement the DSB's decisions in 
this dispute as soon as possible.   
11. The representative of Bolivia  said that his delegation, after hearing the statement by the 
United States, wished to reiterate its concern at the lack of progress by the United States towards 
removing Section 211, in accordance with the DSB' s rulings and recommendations.  The failure to 
comply with the DSB's recommendations undermined the credibility of the multilateral trading 
system, which provided all Members with rights a nd obligations, whether de veloped, developing or 
least developed countries.  At this stage, the c ontinued postponement of compliance with the DSB's 
decision was regrettable on account of systemic imp lications and the failure to comply with the 
obligations resulting from intellectual property right s under the TRIPS Agreement, thereby harming a 
developing country for over four years.  Once again, Bolivia, like other Members, urged the 
United States to implement the DSB's ruli ngs and recommendations in this dispute. 
12. The representative of Argentina  said that his delegation wished to support the statements 
made by previous speakers, and once again, reitera ted its appeal for full and rapid compliance with 
the DSB's recommendations and rulings in this dispute.  He noted that in addition to legal obligations 
Members had also undertaken moral commitments.  Th at implied that those commitments would also 
have to be respected even if outcomes would be less favourable.  
13. The representative of the United States  said that his country assured Members that the 
United States took its responsibility to implement the DSB's recommendations and rulings seriously.  
In response to the suggestion that the US comp liance record was poor, th e facts simply did not 
support that assertion.  Indeed, the record showed th at the United States had fully complied in the vast 
majority of its disputes.  As for the remaining few, the United States was actively working towards 
compliance.  In response to a comment regard ing a trademark registration, none of the  WT/DSB/M/222 
 Page 5 
 
 
  recommendations or rulings of the DSB in this proceeding related to the renewal of specific 
trademarks, so this was not an issue related to the implementation of the DSB's recommendations and 
rulings.  
14. The representative of Cuba  said that, at the past three sessions, his delegation had heard the 
same arguments being put forward by the United St ates.  However, what the United States had been 
stating was not valid.  The decision of the DSB with regard to Section 211 had to be looked at in 
connection with the "theft" of the trademark.  What the United States was saying was simply not credible.  Cuba was only asking the United States to comply.  The United States, in a gesture of good faith, could have at least maintained the status quo instead of worsening the situation by denying to 
recognize the intellectual property rights of Havana  Club in the United States.  At the next DSB 
meeting, Cuba would provide more deta ils regarding this important issue.  
15. 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.48) 
16. The Chairman  drew attention to document WT/DS184/ 15/Add.48, 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. 
17. The representative of the United States  said that, as of 23 November 2002, prior to the 
deadline for implementation, the US authorities at  the US Department of Commerce 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 investigation at i ssue in this dispute.  The US administration 
continued to support legislative amendments that would modify the US anti-dumping duty statute so that the WTO-inconsistencies would not occur in th e future and was working with the US Congress to 
pass such amendments.  But the United States em phasized that the issue in this particular 
investigation had been resolved. 
18. The representative of Japan
 said that his country noted the statement made by the 
United States together with its latest status report.   Japan was encouraged th at the US administration 
would continue to work with the US Congress to en act legislation H.R. 2473.  However, one and a 
half years had already passed since the legislation had been introduced in the US Congress.  In the 
meantime, Japan had not seen any ta ngible development regarding this legislation. A full and prompt 
implementation of the DSB's recommendations a nd rulings was essential for maintaining the 
credibility of the WTO dispute settlement system and this view was shared by other Members 
including the United States, as a major and respons ible WTO Member.  Japan wished to renew its 
strong hope that the US administration would acceler ate its efforts to work with the US Congress. 
19. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.23) 
20. The Chairman  drew attention to document WT/DS160/ 24/Add.23, which contained the status 
report by the United States on progress in the impl ementation of the DSB's recommendations in the 
case concerning Section 110(5) of the US Copyright Act. WT/DSB/M/222 
Page 6  
 
  21. The representative of the United States
 said that his country again assured Members that the 
United States took its responsibility to implement the DSB's recommendations and rulings seriously.  
As noted in the US status report, the US admini stration was working closely with the US Congress, 
and conferring with the EC, to reach a mutual ly satisfactory resolution of this matter.  
22. The representative of the European Communities  said that his delegation had been instructed 
to make the following intervention and hoped that this  might be more easily received:  "Intellectual 
property protection has been put in place to protect cr eativity.  But in the US status reports, creativity 
is a scarce commodity.  Always the same lack of comp liance with the rules agreed by the international 
community.  Five years of reporting no progress at all, that is a pity.  We don't understand why the United States wants to continue to be guilty.  Come on, United States, do comply, that would be good 
for humanity.  And make happy this Committee". 
23. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
2. Implementation by the European Communiti es of the recommendations and rulings of 
the DSB in relation to "European Communiti es – Regime for the Importation, Sale and 
Distribution of Bananas"1 and related subsequent WTO proceedings 
(a) Statements by Honduras and Panama 
24. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Honduras and Panama, and invited the representa tives of the respective countries to speak. 
25. The representative of Honduras  said that his country wished to refer to its earlier statements 
regarding this dispute.  As his delegation had stat ed in previous DSB meetings, Honduras continued to 
be concerned about the WTO-inconsistency of the m easures that had been taken by the EC to comply 
with the Bananas III  decisions.  Indeed, Honduras was still aw aiting the EC's compliance with the 
Bananas III report nearly a decade after its adoption by  the DSB.  The consultations held with the EC 
in January 2006 had not resolved the existing differe nces.  On the contrary, throughout 2006, the EC 
had failed to provide any kind of commercial satisfaction.  As Honduras had indicated repeatedly to 
the EC and in the DSB, the banana sector was v itally important to its developing economy.  More 
than 72 per cent of  its banana output was exported.   The banana exports ge nerated an annual income 
of more than US $200 million.  The banana sector represented one of the main sources of employment in Honduras, with the banana industry comprising mo re than 20,000 banana producers and more than 
82,000 organized workers.  In view of the fact that the EC trade data confirmed month after month that, under the illegal EC regime, Honduras' banana industry suffered substantial losses in terms of 
export volumes to the EC and its market share, finding a solution to Honduras' access remained a 
priority in the short term.  Accordingly, Honduras again requested Members' assistance in promoting 
a prompt and full settlement of this trade dispute,  in line with all rights and obligations under the 
dispute settlement system.  
26. The representative of Panama
  said that his country's position on  this subject had not changed.  
If there was no improvement regarding this illegal re gime in the near future, Panama would have 
more to lose than most countries with MFN supplier in terests.  Panama was one of the two "principal 
suppliers" of bananas to the EC market.  Bana nas were Panama's most important agricultural 
commodity.  Nearly all Panama's banana exports we nt to the EC.  Under the current discriminatory 
arrangement, Panama's share of the EC market had already declined by more than 11 per cent.  
Panama's reduced export volumes to the EC market we re being sold at a much smaller profit.  The 
lost returns, income and employment that Panama  experienced would disproportionately affect its 
                                                      
1 WT/DS27.  WT/DSB/M/222 
 Page 7 
 
 
  poorest rural populations.  The EC was aware of these difficulties.  It had been reminded of them at 
each DSB meeting over the past 11 months.  The EC 's own statistical information from internal 
sources showed the investment shifts and transfers in Panama.  Instead of seeking to bring its present 
regime into line with its WTO obligations, the EC ha d continued to ask for more time to review the 
statistics, while making it clear that it considered  the present arrangements to be acceptable as they 
stood.  Given the social and economic importance of this matter for Panama, his country had no 
option but to insist on prompt compliance and was wo rking with other interested parties to achieve 
that result. 
27. The representative of Nicaragua  said that her delegation wished to briefly underline the 
importance of the banana sector for Nicaragua.  Th e banana sector in Nicaragua provided thousands 
of jobs for its rural population, with almost 70 per cent of that population living below the poverty 
line.  The cultivation of bananas, covering 26 pe r cent of Nicaragua's agricultural land, represented a 
high percentage of the agricultural revenue of the co untry.  Despite the fact that Nicaragua's banana 
industry, with its many natural advantages, had traditionally directed its exports towards the EC, 
Nicaragua was now totally excluded from the EC's banana market.  The advantage arising from the 
price of US$4.22/box granted to the preferential supp liers meant that Nicaragua's sales to the EC had 
ceased to be profitable.  This in turn had held back  investment to the extent that it had put the whole 
of Nicaragua's industry at risk.  When the fr ee-trade agreements between the EC and the ACP 
countries had come into force, the discriminatory incentives that were now diverting investments and 
decisions regarding supply away from countries such  as Nicaragua could only make the situation 
worse.  Even though Nicaragua had sought to obtain a satisfactory solution to its commercial concerns 
for the past 12 years, nothing had been achieved in  this regard.  This issue did not only concern 
bananas.  For Nicaragua's sectors to attract investme nt and generate employment, there would have to 
be confidence that Nicaragua's commercial concer ns would be resolved in conformity with WTO 
rights and obligations.  Accordingly, it was her de legation's duty to request WTO Members to join 
Nicaragua and others in seeking a solution to this  issue that would be in line with the compliance 
objectives of the DSU and would take into account the needs of  developing countries. 
28. The representative of the European Communities  said that the EC wished to refer to its prior 
statements as to why this matter was not an "impleme ntation issue" covered by Article 21 of the DSU.  
The EC remained open to addressing the concerns of  Latin American suppliers in relation to its 
import regime in the appropriate fora.  The EC was well aware of the importance of the banana 
industry for Latin American countries and ACP countries, and had always taken these interests into 
consideration.  The EC was in regular contact with WTO Members involved to discuss this issue, 
including the rebinding of the MFN tariff.  The EC had always been and remained committed to 
maintaining access to the EC's market by all banana supplying countries.  Contrary to the statements 
made by Honduras, Nicaragua and Panama at the previous DSB meeting as well as at the present 
meeting, data on overall MFN imports  available to date gave no reason to believe that such access 
was not maintained.  The new EC tariff had thus far resulted in the increase in imports from both 
MFN and ACP suppliers as compared to previous years.  The EC commitments did not include a commitment to "guarantee specific market shares", but only equivalent market access. 
29. The representative of Brazil
 said that his country wished to thank Honduras and Panama for 
bringing this matter to the attention of the DSB.  As stated previously, this issue had systemic 
implications and concerned all WTO Members.  In  recalling that the implementation of the banana 
disputes had not yet been completed, Brazil noted th at the EC had not established a definitive tariff 
regime for MFN bananas.  Brazil acknowledged the EC's efforts in initiating Article XXVIII 
negotiations with banana supplie rs, but pointed out that a new bound tariff on bananas had not yet 
been defined.  In this regard, Brazil urged the EC  to complete negotiations  with all qualifying MFN 
suppliers under Article XXVIII of the GATT 1994, w ith a view to finishing this process as soon as 
possible.  While Brazil did not oppose the existence or maintenance of preferential schemes by the EC WT/DSB/M/222 
Page 8  
 
  for bananas, it understood that MF N suppliers were entitled to clear and transparent rules that would 
provide predictability concerning market access conditions  to the EC and future investment decisions.  
30. The DSB took note
 of the statements.  
3. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by Canada, the European Communities and Japan 
31. The Chairman  said that this item was on the agenda of the present meeting at the request of 
Canada, the European Communities and Japan, and invited the respective representatives to speak. 
32. The representative of Canada  said that while his country appreciated the steps the 
United States had taken towards implementing th e DSB's rulings and recommendations in this 
dispute, the United States had only prospectively repealed the Byrd Amendment.  Anti-dumping and 
countervailing duties collected up to 30 September 2007 could still be disbursed to US producers 
under the terms of this legislation.  As such, Cana da believed that the US claim – made in its last 
status report from over nine months ago – that it had "taken the actions necessary to implement the 
rulings and recommendations" in this dispute was not accurate.  Canada, therefore, called on the 
United States to resume the submission of status  reports and to repeal the Byrd Amendment. 
33. The representative of the European Communities  said that, at the end of this month, the 
United States would have completed its sixt h distribution of collected anti-dumping and 
countervailing duties to the US Industry under the CD SOA.  In addition, for the first time, duties 
collected on products from NAFTA partners would not be distributed following an order of the Court 
of International Trade that the CDSOA could not appl y to them.  It went without saying that treating 
imports subject to anti-dumping measures different ly depending on their origin did not solve the 
problem of compliance for WTO Membership as a whole.  The CDSOA distributions should have been stopped by 27 December 2003, but they would inst ead continue until at least the fiscal year of 
2010, starting on 1 October 2009 according to the US Congressional Budget Office.  By denying its obligation to take further steps so as to stop i mmediately the distributions under the CDSOA, the 
United States granted itself the right to comply w ith its WTO obligations at some undetermined date 
in clear violation of Members' duty to comply prom ptly with the DSB's rulings.  Indeed, as long as 
those transfers continued, the United States would be in breach of Article 18.1 of the Anti-Dumping 
Agreement and Article 32.1 of the SCM Agreemen t and full implementation would still have to be 
delivered.  The EC would, therefore, ask again the United States if and what steps it intended to take to stop the transfer of anti-dumping and countervaili ng duties without further delay.  The EC also 
renewed its call on the United States to abide by its  clear obligation under Article 21.6 of the DSU 
and to submit status reports on im plementation in this dispute. 
34. The representative of Japan
 said that his country had to reiterate its disappointment that the 
United States, once again, had not submitted a status report this month regardless of Japan's 
statements in previous DSB meetings.  Despite the enactment of the Deficit Reduction Act of 2005, 
illegal distribution still continued.  In light of th e DSB's discussions thus far, Members except for the 
United States were convinced that, as long as this situation did not change, the United States had not 
fully implemented the DSB's recommendations and ru lings.  Japan acknowledged that duties collected 
on products from NAFTA partners would not be di stributed following an order of the Court of 
International Trade ruling that the Byrd Amendment could not apply to them.  The United States shall 
stop illegal distribution under the CDSOA for all WT O Member countries immediately.  Japan urged 
the United States to provide its status reports an d comply fully with the DSB's recommendations and 
rulings as soon as possible.  Japan reserved all the rights under the DSU until full implementation by 
the United States had been achieved.   WT/DSB/M/222 
 Page 9 
 
 
  35. The representative of Brazil  said that, once again, his country thanked Canada, the EC and 
Japan for raising this issue in the DSB.  For Brazil, the "issue" had not  been resolved in this dispute 
within the meaning of Article 21.6 of the DSU.  Th e prospective repeal of the Byrd Amendment, in 
reality, had postponed the resolution of this dispute until the date at which disbursements would cease 
altogether.  Members were still very far from that da y, which, according to US authorities, might be as 
late as 2010.  Until then, the co-complainants could not be deprived of any right conferred by the 
DSU with respect to this situation of non-complia nce.  However, this was not the most important 
element of the discussion.  Members should be serious ly concerned about system ic implications of the 
interpretation that the United States, without much explanation, sought to advance before the DSB.  
Such interpretation could only undermine the ability of the dispute settlement system to provide 
timely and effective solutions to all disputes.  If a Member was allowed to relieve itself from its 
implementation burden by simply stating that it had passed a law that would come into effect in five, ten or 15 years, the credibility of the whole system w ould be at stake.  Recalling that the major players 
bore greater responsibilities, Brazil invited the Unite d States to reflect upon its course of action and 
consider alternatives to stop the WTO-inconsis tent payments under the Byrd Amendment.   
36. The representative of Thailand
 said that his country thanked Canada, the EC, and Japan for 
bringing this item before the DSB.  Thailand rema ined disappointed at the United States' continued 
illegal disbursement of funds under the CDSOA.  Likewise, Thailand remained disappointed at the 
Unites States' continued refusal to submit any stat us report on its outstanding implementation in this 
dispute.  At this time, Thailand therefore rep eated its call that the United States cease its illegal 
disbursements, immediately repeal the Byrd Amen dment and resume providing status reports until 
such actions had been taken and this matter had been fully resolved. 
37. The representative of China  said that his country thanked a nd supported the EC, Canada and 
Japan for raising this item at the present meeting.  China shared the views expressed by the previous 
speakers that the implementation issue had not been r esolved in this dispute within the framework of 
Article 21 of the DSU.  Implementation was critically important to the credibility and efficiency of the 
dispute settlement system.  Should the prospective repeal of a WTO-inconsistent measure be treated 
as equal to immediate compliance, the legal basis of the DSU regarding prompt and full compliance 
with the DSB's recommendations and rulings would be  greatly undermined.  Therefore, China wished 
to join previous speakers in urging the United Stat es to comply fully and promptly with the DSB's 
rulings. 
38. The representative of India  said that his country wished to thank Canada, the EC and Japan 
for raising this issue at the DSB again.  In spite of its exhortations at past meetings, India was still 
awaiting a response from the United States to its l ong-standing question as to how the United States 
squared up their compliance obligations with the c ontinued disbursement of collected anti-dumping 
and countervailing duties to their industry, almost f ours years after they should have stopped them.  It 
was regrettable that the United States did no more  than re-iterate its indefensible position on 
compliance.  This in the face of new administ ration action based on the very CDSOA that it had 
admitted had been found inconsistent with WTO ru les, and had asserted that it had been withdrawn. 
Such unilateral action undermined the WTO dispute se ttlement system.  India, therefore, again urged 
the United States to inform the DSB of the steps it proposed to take to ensure full compliance, and 
reiterated its request that the United States resu me submitting status reports in this dispute. 
39. The representative of the United States  said that, as his country had already explained at 
previous DSB meetings, the US President had signed the Deficit Reduction Act into law on 
8 February 2006.  That Act included a provisio n repealing the Continued Dumping and Subsidy 
Offset Act of 2000.  Thus, the United States had ta ken all actions necessary to implement the DSB's 
recommendations and rulings in these disputes. 
40. The DSB took note  of the statements. WT/DSB/M/222 
Page 10  
 
  4. Statement by Ecuador regarding the European Communities' regime for the 
importation, sale and distribution of bananas 
41. The Chairman
 said that this item was on the agenda of the present meeting at the request of 
Ecuador and invited the represen tative of Ecuador to speak. 
42. The representative of Ecuador  said that his country was strongly committed to the multilateral 
trading system and wished to see it increasingly streng thened through the implementation of rules that 
were clear, transparent, fair, non-discriminatory, pr edictable, and unambiguously directed towards the 
promotion of development.  Thus the DSB had to ensure the implementation of the Agreements and 
the full enforcement of the WTO rules and princi ples as well as to judge disputes between WTO 
Members, seek a compromise between the parties a nd set out the rules that would ensure respect for 
rights and legitimate interests.  The DSB was the body in the multilateral trading system that was 
legally competent to judge and resolve – as it ha d done on previous occasions – a subject of 
undoubted complexity and importance for a number of WTO Members; i.e.  the EC's regime for the importation of bananas.  
43. Ecuador, a developing country, which based its foreign policy on the implementation of 
international law, was the world's leading banana  exporter.  Over a million Ecuadorians worked 
directly or indirectly in the bananas sector.  Consequently, the importance of bananas for Ecuador 
transcended the strictly commercial aspects and had a profound significance in the social, political and 
economic areas.  Since the end of 1991 when c onsultations had been initiated regarding the 
establishment of a common organization of market s in the bananas sector, Ecuador had advocated a 
realistic and pragmatic regime of free trade and co mpetition, which took into account the interests of 
all the parties involved.  During those years the sensitivity of the issue and deep differences between 
the EC's member States had once again been rev ealed.  Regulation No. 404/93, which had established 
the single regime for the importation of bananas into the EC, had come into force in July 1993;  six 
months after the formal commencement of the Euro pean single market.  The reasons for the delay 
were obvious:  the complexity of the issue, many di fferent interests of those involved in the banana 
sector and divergent positions of the EC's member States.  Ecuador had challenged on both technical 
and legal grounds the restrictive nature of the regime  and had initiated its accession process to join the 
multilateral trading system.  Other Latin Americ an countries had brought the case to the GATT and 
had achieved a framework agreement with the EC.  The Uruguay Round was then at a crucial stage, 
but a definitive solution to the banana issue continued to be a long way off.   
44. Once it had become a Member of the WTO, Ecuador had taken legal action against those 
instruments.  That action, known as "Bananas III", had finally achieved a result favourable to the 
Ecuadorian position in 1997.  Subsequently, in Ap ril 2001, Ecuador had signed with the EC an 
understanding on bananas, which laid down an obligation to establish, by 1 January 2006 at the latest, 
a "tariff only" system that would at least main tain full access for Ecuador's bananas to the EC's 
market.  In November 2001, a Ministerial De cision had been approved in Doha, with its 
corresponding annex, which had placed the above-m entioned obligation in a multilateral context and 
had established a mechanism with two arbitration r ounds in order to determine whether the tariff 
proposed by the EC for the tariff regime for the importation of bananas fulfilled the commitment to 
maintain total access for Ecuador's bana nas to that important market.   
45. Regrettably, that procedure had not given the ar bitrators the power to establish an appropriate 
tariff.  In 2005 the two arbitration awards had rej ected the tariff proposals of the EC, but, surprisingly, 
in November 2005, the EC approved a new banana  import regime, which was not only tariff based, 
did not meet the requirements of Articles I, II and III of the GATT 1994 and had provided, in the case of MFN suppliers, such as Ecuador, for a tari ff of 176 €/mt, established unilaterally and 
independently, which had not been WTO bound.   Ecuador and the other Latin American 
banana-exporting countries had consta ntly demonstrated their willingness to negotiate with the EC a  WT/DSB/M/222 
 Page 11 
 
 
  mutually agreed solution that would take account of th e legitimate interests of all the parties involved.  
The Summits of Heads of State in Quito and San Jo sé, held in January and July 2005, as well as the 
active participation during the last ten months in  the good offices process agreed in Hong Kong, under 
the auspices of the Foreign Minister of  Norway, had corroborated the assertion. 
46. On 16 November 2006, Ecuador had formally re quested consultations with the EC, pursuant 
to Article 21.5 of the DSU.  Ecuador's request, which had been circulated to all WTO Members, 
rested on solid technical and legal bases and clearly highlighted the failures to fulfil the obligations 
laid down in the above-mentioned legal instruments.   Ecuador had legitimately sought a satisfactory 
solution for all the parties involved that naturally en compassed the obligations entered into by the EC.  
The consultations provided a favourable context for seeking such an agreement between the parties. 
The relations between Ecuador and the EC were based on long-standing historical and cultural links 
and on shared values, such as respect for the rules of  international law, the defence of democracy and 
human rights, regional integration, free trade and th e strengthening of the multilateral trading system.  
The decision to deepen their relations, adopted by th e heads of state of the Andean community and the 
EC, should not be affected by the exercise of a leg itimate right in the WTO, which was a pillar of the 
multilateral system and a guarantee for reaching a just settlement of differences among its member 
States.  The whole world had changed since the 199 0s, but the problem of bananas still remained.  
Ecuador wished to reiterate once again its co mmitment to working together with others, 
constructively and realistically, to reach a satisfa ctory solution, which would take account of WTO 
rules and principles, the legitimate rights and in terests of all the parties involved and the legal 
obligations. 
47. The representative of th e European Communities  said that the EC had always favoured and 
remained in favour of a negotiated solution with interested MFN suppliers regarding the import 
regime for bananas, including the question of rebind ing.  It was unfortunate that Ecuador had opted 
for litigation rather than to give the monitoring process, under the good offices of Norway, a chance to 
lead to a solution.  The EC had been quite satisfi ed with the way this process had been conducted thus 
far with the help of the good offices under the auspic es of Norway.  The EC would have been ready to 
draw the necessary conclusions from this process wh en representative data had been examined.  The 
EC would participate constructively in the consulta tions requested by Ecuador in the past week, but 
the EC wished to reiterate its disagreement with any characterization of this matter as an issue of 
"implementation of the DSB rulings and recommenda tions" covered by Article 21 of DSU.  The EC 
referred to its earlier interventions in this resp ect made under Item 2 of the agenda of the present 
meeting.  
48. The representative of Colombia  said that her country noted the statement made by Ecuador 
regarding the EC's regime for the importation, sale a nd distribution of bananas.  Colombia had always 
favoured a negotiated solution to the banana pr oblems regarding access to the EC's market.  
Consequently, Colombia regretted the fact that it ha d not been possible in the course of the year to 
advance the negotiations to resolve the differences rega rding this matter.  It was Colombia's view that 
the current importation regime was not in conformity  with the WTO rules.  Consequently, Colombia 
had participated in the good offices process carried out  by Norway and hoped that by such means, or 
by any other expeditious means, this dispute could be fully resolved.  Colombia sought an effective 
outcome that could be applied rapidly and be bound within the WTO framework.  For the above 
reasons, Colombia wished to participate in any initiative, including the consultations requested by 
Ecuador on 16 November, since it provided an op portunity for seeking a solution to the bananas 
problem. 
49. The representative of Brazil  said that his country wished to thank Ecuador for its statement. 
Ecuador's request for consultati ons constituted further confirma tion of the relevance of the 
implementation in the bananas dispute.  As stat ed previously, a thorough discussion of the issues 
raised at the present meeting would benefit not only th e parties directly involved in the dispute, but all WT/DSB/M/222 
Page 12  
 
  WTO Members.  Therefore, Brazil would follow all ne w developments regarding this dispute.  Brazil 
hoped that the parties would arrive expeditiously  at a definitive solution to this dispute. 
50. The representative of Ecuador
 said that his delegation wished to briefly follow up on the 
statement made by the EC at the present meeting.   Ecuador had clearly a nd consistently shown its 
willingness to negotiate and to look at the matter with  a broad vision in order to find a solution.  This 
was a matter of great importance to Ecuador a nd to many other WTO Members. Ecuador had 
participated actively, constructively and in goo d faith in the good offices process carried out by 
Norway and recognised that this was a valid ef fort.  Unfortunately current circumstances, the 
suspension of the Doha Round negotiations and a lack of action in this area, had prompted Ecuador to 
take this action.  The consulta tions requested by Ecuador could be an effective way to finding a 
solution.  Ecuador looked forward to  negotiating and to bringing pos itions closer.  Ecuador would do 
so with the best possible will to find a so lution which would be mutually acceptable.  
51. The representative of the United States  noted that Ecuador had just expressed many of the 
same concerns about the EC's bananas regime  that Honduras, Panama, Nicaragua, Brazil, and 
Colombia had raised previously under Item 2 or under the present item.  The United States too had 
serious concerns about the EC's re gime.  In light of Ecuador's re quest for consultations, the United 
States would again urge the EC to engage in a meaningful dialogue with interested Members with a view to resolving this dispute.  Given the signi ficant social and economic sensitivities involved – and 
the deteriorating market conditions – the Un ited States urged the EC to do so quickly. 
52. The representative of Honduras
 said that the statement made by his delegation under Item 2 of 
the agenda of the present meeting should also  apply to the item under consideration.  
53. The representative of Nicaragua  said that his country wished to  make the same request that 
Honduras had just made, namely that the statemen t made by Nicaragua under Item 2 should also 
apply to the item under consideration.  
54. The representative of Panama  said that his delegation supported the statements by Honduras 
and Nicaragua and wished that Panama's statemen t made under Item 2 of the agenda of the present 
meeting be considered in the same way. 
55. The DSB took note  of the statements. 
5. United States – Customs Bond Directive for merchandise subject to 
anti-dumping/countervailing duties 
(a) Request for the establishment of a panel by India (WT/DS345/6)  
56. The Chairman  recalled that the DSB considered this matter at its meeting on 26 October 2006 
and had agreed to revert to it.  At the present m eeting, he drew attention to the communication from 
India contained in document WT/DS345/6, and i nvited the representative of India to speak. 
57. The representative of India  said that, as noted by the Chairman, the DSB had first examined 
India's request for the establishment of a panel in th is dispute on 26 October 2006.  India's request had 
been circulated to WTO Members as document WT/D S345/6.  Since India had already described in 
detail the reasons for its request to establish a panel during the 26 October DSB meeting, his 
delegation did not intend to repeat  those details at the present meeting.  Suffice it to say that the 
United States continued to impose the WTO-incons istent continuous bond requirement on importers 
of certain warm water shrimp from India in an arb itrary and discriminatory manner.  Furthermore, in 
the period between the 26 October DSB meeting when India's panel request had been considered for 
the first time and the present meeting, the United States had failed to address India's concerns.   WT/DSB/M/222 
 Page 13 
 
 
  Therefore, India was compelled to seek recourse to dispute settlement.  Accordingly, India requested 
the establishment of a panel to examine this matter pursuant to Article 6 of the DSU with standard 
terms of reference. 
58. The representative of the United States  said that his country remained disappointed that India 
had chosen to pursue this matter further by reques ting the establishment of a panel.  Members had the 
right to ensure that importers paid duties owed.  The United States was confident that the panel would 
recognize that fact and would find these measures co nsistent with US WTO obligations.  Nonetheless, 
the United States understood that a panel would be established at the present meeting to consider 
India's claims. 
59. The representative of Thailand  said that his country was disappointed that it seemed from the 
silence of the United States that a joint panel under Article 9.1 of the DSU would not be established to 
examine both the matter raised by Thailand in WT/DS343/7 for which the DSB established a panel on 26 October 2006, and the matter now raised by I ndia in WT/DS345/6. Thailand recalled that 
Article 9.1 of the DSU provided that a single pane l should be established to examine complaints 
related to the same matter wherever this was feasible.   Thailand considered it more than feasible that a 
single panel could have been estab lished to consider Thailand's and I ndia's complaints relating to the 
same matter of the continuous bond.  In any case, Thailand hoped that all the parties involved, in 
particular the United States, would cooperate to en sure that the panels pertaining to  DS343 and 
DS345 cases consisted of the same persons work ing on a harmonized time-table pursuant to 
Article 9.3 of the DSU.  
60. The representative of the United States
 said that a panel requested by Thailand had already 
been established at the previous DSB meeting.  At the present meeting, the DSB was establishing a 
separate panel in response to India's request.  Howeve r, the United States noted that Article 9.3 of the 
DSU provided the same result – the same panelists could consider on the same timetable the matters 
in the two requests. 
61. The DSB took note  of the statements and agreed  to establish a panel in accordance with the 
provisions of Article 6 of the DSU w ith standard terms of reference. 
62. The representatives of Brazil , China , the European Communities , Japan  and Thailand  
reserved their third-party rights to par ticipate in the Panel's proceedings.   
6. European Communities – Measures affectin g the approval and marketing of biotech 
products 
(a) Reports of the Panel (WT/DS291/R & Corr.1;  WT/DS292/R & Corr.1;  and WT/DS293/R 
& Corr.1) 
63. The Chairman  recalled that at its meeting on 29 August 2003, the DSB had established a 
single panel to examine the complaints by the United States, Canada and Argentina pertaining to this 
matter.  The Reports of the Panel contained in WT/DS291/R and Corr.1;  WT/DS292/R and Corr.1;  WT/DS293/R and Corr.1 had been circulated on 29 September 2006 as an unrestricted document.  
The Reports of the Panel were now before the DSB for adoption at the request of the United States, 
Canada and Argentina.  The adoption procedure w as without prejudice to the right of Members to 
express their views on the Reports. 
64. The representative of Canada
 recalled that, on 27 August 2003,  at the request of Canada, 
Argentina and the United States, the DSB had estab lished a panel to resolve the matter on:  "EC – 
Measures Affecting the Approval and Marketing of Biotech Products".  On 10 May 2006, the Panel 
had released its confidential final report to th e parties, followed by the public final report on WT/DSB/M/222 
Page 14  
 
  29 September 2006.  Canada wished to express its gr atitude to the Panel, the scientific advisors 
retained by the Panel and the Secretariat for thei r considerable effort during these unusually lengthy 
proceedings.  Canada commended the Panel for its car eful and considered analysis of the issues in 
dispute, made all the more difficult by the scientific and legal complexity and the volume of information submitted during the proceedings. 
65. Canada was generally satisfied with the Panel' s findings in its final Report.  The Report had 
confirmed that the EC maintained a general morato rium on the approval of biotech products and that 
this general moratorium had resu lted in undue delay in the processi ng of biotech applications in a 
manner inconsistent with the EC's obligations under the SPS Agreement.  Furthermore, the Report 
had confirmed that certain safeguard measures adopt ed by the EC member States had not been based 
on a risk assessment, again in contravention of the SPS Agreement.  Lastly, the Report had confirmed 
the scientific conclusions of many scientific bodi es, including the EC's own scientific committees, 
that the objections raised against the specific biot ech products under review were not scientifically 
justified.  With a Panel Report of this complexity and size, it was not unexpected that a party that had 
put the Report up for adoption would disagree with  some of the findings and conclusions contained 
therein.   
66. While this Report on the whole provided a solid  basis for achieving a satisfactory settlement 
of this matter, in accordance with the rights and obligations of WTO Members, Canada wished to identify several concerns with the Panel's findings  and recommendations.  First, Canada disagreed 
with the Panel's narrow interpretation of what  constituted an "SPS measure", as defined in 
Annex A (1) of the SPS Agreement.  In Canada's vi ew, this interpretation was not consistent with the 
plain meaning of the text of the SPS Agreement.   Second, Canada disag reed with the Panel's 
application of its definition of an "SPS measure" to th e measures at issue in this case, in particular, the 
general moratorium.  Third, Canada had disagreed w ith the Panel's finding that Articles 5.1, 5.5, 5.6 
and 7 had not been applicable to  the general moratorium.  While largely based on the Panel's narrow 
interpretation of the definition of an SPS measure , the Panel's finding of inapplicability involved 
interpretations of these provisions that again, in Canada's view, had not re flected the text of the 
SPS Agreement.  Lastly, Canada disagreed with the Panel's interpretation of the relationship between 
Article 5.7 and other provisions of the SPS Agreemen t.  While Canada had agreed with the Panel's 
conclusions that Article 5.7 did not apply in the case of the EC member State safeguard measures, the 
Panel's conclusion that Article 5.7 was not an "excepti on" to the basic obligation in Article 2.2, but an 
"autonomous right" appeared to be inconsistent with the explicit text of Article 2.2 as well as the 
overall structure of the SPS Agreement.  As noted by the Panel,  its interpretation had implications for 
the allocation of the burden of proof.  
67. However, these were matters that had to be le ft for another day.  Canada hoped that there 
would be an occasion for the first and last issues to be addressed and clarified in a future SPS-related panel or Appellate Body report.  Notwithstanding these reservations, Canada wished to reiterate its 
gratitude to the Panel for its careful and detailed anal ysis of the many complex issues in dispute in this 
matter.  Canada was hopeful that, with the benefit of the guidance contained in the Report, the EC 
would now remove its WTO-incons istent measures and that the way would have been paved to 
improve trade in agricultural products of biotec hnology and would open doors to bilateral cooperation 
in the field of agriculture biotechnology.  Cana da, therefore, respectfully requested, pursuant to 
Article 16 of the DSU, that the DSB adopt this Report. 
68. The representative of the United States
 said that his country was pleased to request that the 
DSB adopt the Report of the Panel in WT/DS291 , the dispute which had been brought by the 
United States.  Before initiating this dispute in May 2003, the United States had waited patiently for 
five years for the EC to follow the WTO rules,  as well as its own published procedures and the 
recommendations of its own scientists.  Pursuing th is case in the WTO had taken an additional three 
years and thousands of pages of factual and legal argumentation, resulting in the longest Panel Report  WT/DSB/M/222 
 Page 15 
 
 
  in the history of the WTO.  The Panel had undert aken a thorough, well-reasoned analysis of both the 
extensive factual information submitted by the partie s and of the applicable WTO obligations.  In a 
report of this length, there were bound to be discrete elements of analysis with respect to which the 
United States was not in full agreement.  But th e report on the whole was prepared with care and 
written with clarity.  The United States wished to th ank the Panel, the Secretariat, and the scientific 
experts for the countless hours that they had sp ent during the course of the proceedings.   
69. The United States was gratified that the Panel had agreed with the United States that the 
measures at issue of the EC, Austria, France, Germany, Greece, Italy and Luxembourg were inconsistent with the obligations set out in the SPS Ag reement.  In particular, the Panel had found that 
the EC adopted a de facto , across-the-board moratorium on the final approval of biotech products, 
starting in 1999 up through the time the panel ha d been established in August 2003.  The Panel had 
found that the EC had presented no scientific or regul atory justification for the moratorium, and thus 
that the moratorium resulted in "undue delays" in violation of the EC's obligations under Annex C of 
the SPS Agreement.  The Panel had also identified specific, WTO-inconsistent "undue delays" with 
regard to 24 of the 27 pending product applications th at were listed in the US panel request.  And the 
Panel had upheld the United States' claims that, in light of positive safety assessments issued by the 
EC's own scientists, the bans adopted by six EC me mber States on products approved in the EC prior 
to the moratorium were not supported by scientific  evidence and were thus inconsistent with WTO 
rules.  Although the EC had approved a handful of biotech applications following the initiation of the 
dispute in 2003, the EC had yet to lift the moratorium in its entirety.  Some biotech product applications had been pending for ten years or  more, and applications for many commercially 
important products continued to face unjustified, politically-motivated delays.  The United States 
urged the EC to comply with its WTO obligations, and to proceed to consider all outstanding biotech 
product applications in the time necessary to evalua te their scientific merits , in accordance with the 
EC's own laws, and w ithout undue delays. 
70. The United States believed that in addition to the importance of the Panel's findings with 
regard to the specific measures at issue of the EC, Austria, France, Germany, Greece, Italy and 
Luxembourg, the Panel Report was equally important  in illustrating the successful operation of the 
rules-based trading system.  The findings of the Panel upheld the principle of science-based 
policymaking over unjustified, anti-biotech polici es.  Such policies, as represented by the EC 
moratorium and the bans of Austria, France, Germany, Greece, Italy and Luxembourg, had perpetuated an unjustified trade barrier that had impeded both US exports and the global use of a 
technology that promised great benefit to farmers and consumers around the world.  Food and animal 
feeds produced from biotech crops were safe and widely  used around the world.  Biotech crops helped 
nourish the world's hungry population, offered tremendous opportunities for better health and 
nutrition, and protected the environment by reducing soil erosion and pesticide use.  The United States 
recognized that despite the EC's moratorium and the member State product bans, there was 
considerable support for agricultural biotechnology within the EC.  The United States looked forward 
to working with the EC, Austria, France, German y, Greece, Italy and Luxembourg to enhance the 
availability of this technology to farm ers and consumers throughout the world. 
71. The representative of Argentina
 said that his country wished to express its appreciation for the 
commitment and work of the Panel and the Secretariat at the conclusion of a period of over three years' proceedings aimed at achieving a solution to this  dispute.  The sheer length of this report, which 
greatly exceeded the usual average, together with the complexity of the subjects discussed and other 
special circumstances, clearly re vealed the time and effort expended by all those involved.  
Accordingly, Argentina wished to draw atten tion to the observation made by the Panel in 
paragraph 7.46 of its Report in which it had recognized the difficulties which Argentina, as a 
developing country, had had to ove rcome in order to substantiate its case within the prescribed time-
limits.  It was necessary to stress the importance that the Panel's findings had for his country, in view 
of its position as the world's second producer and e xporter of biotech products, and it was for this WT/DSB/M/222 
Page 16  
 
  reason that Argentina had received the Panel's findi ngs with great satisfaction.  In particular, 
Argentina wished to draw attention to the finding regarding the existence of a " de facto " moratorium 
applied by the EC for the approval of biotech products between June 1999 and August 2003, and also 
the existence of a particular mora torium applied to the procedures for the approval of products of 
interest to Argentina, leading to the conclusion th at the EC had failed to fulfil its obligations under 
Article 8 and the first clause of paragraph 1(a) of  the SPS Agreement, thereby demonstrating that it 
was possible to challenge an unwritten measure in the WTO.   
72. With regard to the general moratorium, the Panel had concluded in paragraph 7.1272 that 
between June 1999 and August 2003 the EC had applied a general de facto  moratorium "[...] i.e. 
without having been adopted through a formal EC ru le […] and, more particularly, that the final 
approval of applications had been prevented by the Group of Five countries and/or the Commission 
through their actions and/or omissions ".  In addition, with regard to  the claim concerning undue delay, 
Argentina considered that attention should be draw n to the analysis carried out by the Panel on the 
developments in scientific knowledge and the applica tion of a prudential or precautionary approach to 
justify the delays.  Argentina also wished to emphasize another fundamental aspect of the Panel 
Report with regard to the safeguard measures on specific products adopted by some EC member 
States.  The Panel had concluded that such measure s had not been based on an assessment of risk as 
required under Article 5.1 of the SPS Agreement, nor  were they compatible with the provisions of 
Article 5.7 of that Agreement.  Finally, the Pane l had rejected the EC argument under Article 5.7 that 
the insufficiency of relevant scientific eviden ce should be assessed in relation to the importing 
Member's appropriate level of protection.  Conseq uently, for the above reasons, Argentina requested 
that the DSB adopt the Panel Report and trusted th at the application of the recommendations and the 
rulings of the DSB in this case would signify an im portant advance in the application of the rules for 
marketing biotech products. 
73. The representative of the European Communities
 said that, first of all, the EC wished to thank 
the Panel and the Secretariat for their work.  Wh ile disagreeing with some aspects of the findings 
reached, the EC agreed with other aspects of this Report and acknowledged the time and efforts 
dedicated to this dispute.  The EC wished to make  a few comments with respect to the Panel Report.  
First, the Panel Report had confirmed the right of WTO Members to regulate GM products.  The 
violation findings of the Panel Report were mos tly limited to the way the regulatory procedures a 
WTO Member might chose to establish should work.  Second, the EC GMO approvals regime had been functioning normally.  Ten GM products had been authorised since the establishment of the 
WTO panel and some 30 more were being duly examined.  As a result, most of the findings of the 
Panel had become theoretical.  Therefore, despite many reservations as to the argumentation and conclusions of the Panel Report, the EC had decided not to appeal.  Thereby, the EC wanted to avoid 
overburdening the Appellate Body and the dispute settlement mechanism.  There was no basis for 
claiming that the EC was maintaining a moratorium on authorisations of GM products.  Applications 
were being processed normally and ten authori sations had already been granted since the 
establishment of the WTO panel and others were on the pipeline (including some on applications for 
cultivation).  With respect to the national bans, th e EC was considering any appropriate measures.  
The EC would ask for a reasonable period of time to deal with this issue. 
74. The representative of China
 said that his country was a third party to this dispute, but China 
would not comment on the Reports.  Instead, Chin a wished to draw Members' attention to a 
communication from the Panel concerning the breach of confidentiality requirement during the panel 
stage, especially concerning the leakage of the interim report and its possible negative impact on the 
deliberation of the Panel.  China thought th is issue deserved the notice of all Members 
75. The representative of the United States  said that his country did not agree with a number of 
elements of the EC's statement.  For example, a lthough the EC had granted approvals to a handful of 
products after the case had been in itiated, the EC continued to bloc k applications based solely on  WT/DSB/M/222 
 Page 17 
 
 
  political, rather than scientific concerns.  Some a pplications had been pending for over ten years.  
Also, each one of the handful of EC approvals ha d to be accomplished in an exceptional, politically 
controversial procedure in which the EC Commissi on had granted approval in the absence of action 
by the EC member States.  The procedure involved needless delays.  Moreover, the EC had not been 
willing to allow most of the pending applications  to reach final decision under this exceptional 
procedure.  In short, in not one single case had a biotech product application reached final decision 
under the normal procedures set out in the EC's own rules.   
76. The representative of Canada  sought some clarification with re spect to the EC's statement.  
He understood that the EC had stated that it would require a reasonable period to time only in respect 
of national measures.  He wished to know if his understanding was correct.   
77. The representative of the European Communities  said that this was exactly what he had 
stated.  
78. The DSB took note  of the statements and adopted  the Panel Reports contained in 
WT/DS291/R & Corr.1;  WT/DS292/R & Corr.1; and  WT/DS293/R & Corr.1. 
7. Adoption of the 2006 draft Annual Report of the DSB 
79. The Chairman  said that, in pursuance of the procedures for an annual overview of WTO 
activities and for reporting under the WTO contained in document WT/L/105, he was submitting for 
adoption the draft text of the 2006 Annual Report of the DSB contained in document WT/DSB/W/334 
and Add.1.  This report covered the work of the DSB since the previous annual report contained in document WT/DSB/39 and Add.1.  For practical purposes, the overview of the state of play of WTO disputes covering the period from 1 January 1995 to 31 October 2006, prepared by the Secretariat on 
its own responsibility, was included in the addendum to this report.  He wished to propose that after 
the adoption of the Annual Report at the present meeting,  the Secretariat be authorized to update this 
Report under its own responsibility in  order to include actions taken by the DSB at the present 
meeting.  The updated Annual Report of the DSB w ould then be submitted for consideration by the 
General Council at its meeting on 14 December. 
80. The representative of Ecuador
 said that his delegation wished to thank the Secretariat for the 
Annual Report and noted that his delegation had provided some comments regarding the Addendum, 
which it considered to be very useful because it covered the entire history of the dispute settlement 
mechanism since 1995.  However, Ecuador did not wi sh to increase the worklo ad of the Secretariat 
since a great deal of excellent work had already been done. 
81. The DSB took note  of the statements and adopted  the draft Annual Report of the DSB 
contained in WT/DSB/W/334 and Add.1 on the unders tanding that it would be further updated by the 
Secretariat.2 
8. United States – Subsidies on upland cotton 
(a) Statements by the United States and the EC concerning Brazil's intervention made at the 
26 October 2006 DSB meeting regarding the composition of the Article 21.5 panel.  
82. The representative of the United States , speaking under "Other Business", recalled that at the 
previous DSB meeting held on 26 October 2006, Brazil had intervened under "Other Business" 
concerning the panel composition in the Article 21 .5 proceedings in "United States – Subsidies on 
Upland Cotton".  The United States had had time to reflect on that statement.  The United States was 
                                                      
2 The Annual Report was subsequently circulated in document WT/DSB/42 and Add.1. WT/DSB/M/222 
Page 18  
 
  raising this matter at the present meeting because of the broad systemic problems presented by 
Brazil's intervention, a problem that should be of con cern to any Member that had ever participated in 
a panel selection process or who might participate in such a process in the future.  The United States 
was deeply troubled by Brazil's disclosure of what  it had claimed were US positions in the panel 
composition process.  Even leaving aside the numero us inaccuracies in Brazil's DSB statement, Brazil 
was well aware that the panel composition process was confidential.   
83. Brazil's intervention represented an unprecedented and extremely serious breach of the 
confidentiality of this process.  No other WTO Memb er to date had purported to disclose the positions 
of another party concerning the selection of panelis ts.  There was a very good reason for this:  the 
integrity and credibility of the panel composition process served as the foundation of the integrity and 
reliability of the Panel's findings and the DSB's r ecommendations and rulings that resulted from that 
process.  The United States believed that all Members should be concerned not only with Brazil's actions in this dispute, but with the prospect that Br azil's actions might be repeated in future disputes.  
The United States expected that no Member, including Brazil, would be pleased to hear other Members claiming to disclose its positions on propo sed panelists upon completi on of, or during, panel 
composition.  This would undermine the ability of Members to agree upon panelists in an orderly 
fashion.  In addition, the United States was very troubled that Brazil had chosen to criticize the 
decision by the Director-General, who was acting pursuant to the provisions of the DSU.  Brazil 
might disagree with the panelists appointed by the Director-General, but there was no basis for 
approaching the DSB to complain about that deci sion or to claim that the Director-General had 
breached the DSU in making his d ecision.  Again, Brazil's actions undermined the integrity of the 
panel composition process. 
84. The representative of th e European Communities
 said that the EC was of the view that a party 
to Article 21.5 of the DSU proceedings could not , where the original panel was still available, 
withdraw its prior agreement in the original pro ceedings to accept citizens of third parties serving as 
panellists.  The EC was considering commenting furt her on this matter in its third-party submissions 
in this case.  
85. The representative of Canada  said that, at this time, his country did not have a position on this 
particular issue and, specifically, on the US statement.  The reason was that this matter had not been placed on the agenda of the present meeting to give notice to Members.  Of course, Members could raise issues under "Other Business", but this matter appeared, as the United States had stated, to be of 
significant systemic importance.  Given the fact that it had been raised at the previous DSB meeting, 
and that the United States had had ample time to c onsider whether or not to make a statement on this 
matter, it would have been preferable for it to be included on the main agenda of the present meeting, 
so that Members could have the opportunity to discu ss it with capital and to provide considered views 
on such an important matter: confidentiality of the proceedings in panel selection.  Canada had 
already made known its concerns about substantive agenda items under "Other Business" and wished 
that Members could give advance notice, to the exte nt possible, regarding issues to be raised in the 
DSB.   
86. The representative of Brazil
 said that his delegation wished to start by referring to the 
statements made by Brazil at the 26 October DSB mee ting, and wished to invite all Members to take a 
deep look at them and to point out where, in those statements, had Brazil ever breached the 
confidentiality of the panel composition process.  What  the United States could not get out of this was 
a cover for its objection to the original panelists and was thus accusing Brazil of a serious breach of 
confidentiality.  The same invitation was also direct ed to all Members to point out where had Brazil 
ever criticized the Director General for doing what he had done.  If any Memb er could do this, Brazil 
would agree, but he assured Members that they w ould find no citation or line that would even imply 
any of the accusations made by the United States.  The substantive point was even more important 
and referred to the possibility that a Member – havi ng no objections to the panelists in the original  WT/DSB/M/222 
 Page 19 
 
 
  proceedings; having no objections to the panelists to serve as Article 22.6 arbitrators; and having 
accepted third party nationals  panelists in previous disputes – obj ected to the original panelists to 
serve on Article 21.5 procedures.  If this was the system that Members wanted, Brazil would have no objection, but Brazil did not think this was really th e case.  Finally, he concluded by reiterating that 
Brazil was very confident that the new panelists ha d the capacities and skills to perform their task and 
would find again that the United States was in violation of its WTO obligations. 
87. The representative of the United States
 said that Brazil's intervention only reinforced US 
concern with disclosing positions allegedly take n during the panel composition process, and the 
decision-making of the Director-G eneral when called upon to compose a panel.  Members must be 
able to express their views during that process without fear that they would be publicly and 
inaccurately disclosed by the other party.  The United States too invited Members to read Brazil's 
26 October DSB statement closely, including, fo r example, the third and fourth paragraphs.3  In any 
event, as the United States had pointed out at the 26  October DSB meeting, the rules of the DSU with 
regard to service on a panel by third party na tionals were clear and had until now been non-
controversial.  As the United States had explai ned, previous compliance proceedings had been 
confronted with precisely the issue that arose in this proceeding, and the parties dealt with it 
cooperatively and responsibly.  It was regrettable th at Brazil was unwilling to resolve the issue in like 
fashion in this dispute, and had instead adopted the untenable position that it was somehow exempt 
from the rules applicable to every other Member. 
88. The representative of Brazil  said that with regard to responsibility and cooperation, Brazil 
was better equipped than the United States to speak, but  he suspected that whatever Brazil referred to 
now would be treated as a breach of confidentiality by the United States. 
89. The DSB took note  of the statements.  
__________ 
                                                      
3 See paragraph 75 in document WT/DSB/M/221.