RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/261 
6 March 2009 
 (09-1161) 
Dispute Settlement Body 
22 December 2008  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 22 December 2008  
 
Chairman:  Mr. Mario Matus (Chile) 
 
 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 .............................................................................................................. ...........6  
(d) European Communities – Measures affecting the approval and marketing of biotech 
products:  Status report by the European Communities..............................................................6  
2. United States – Continued Dumping and Subsidy Offset Act of 2000:  
Implementation of the recommenda tions adopted by the DSB ............................................8  
(a) Statements by the European Communities and Japan ................................................................8  
3. United States – Definitive anti-dum ping and countervailing duties on certain 
products from China............................................................................................................ ...10 
(a) Request for the establishment of a panel by China...................................................................10  
4. European Communities – Regime for the importation, sale and distribution of 
bananas:  Recourse to Article 21.5 of the DSU by the United States .................................11  
(a) Report of the Appellate Body and Report of the Panel.............................................................11  
5. Appointment of Appella te Body members............................................................................18  
 
 WT/DSB/M/261 
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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.73) 
 (b) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.73) 
 (c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.48) 
 
(d) European Communities – Measures affecting th e approval and marketing of biotech products:  
Status report by the European Communities (WT/DS291/37/Add.11 – WT/DS292/31/Add.11 – WT/DS293/31/Add.11) 
 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 four 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.73) 
2. The Chairman  drew attention to document WT/DS176/ 11/Add.73, 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 11 December 2008, in accordance with  Article 21.6 of the DSU.  As noted in that 
status report, a number of legislative proposals th at would implement the DSB's recommendations and 
rulings in this dispute had been introduced duri ng this past congressional session, in both the US 
Senate and the US House of Representatives.  Since the US status report, the US Congress had 
completed its work for this calendar year.  A ne w Congress would convene in  January 2009, and the 
US administration would work with that Congress with respect to appropriate statutory measures to resolve this matter. 
4. The representative of the European Communities
 said that, at the present meeting, the 
United States was presenting its seventy-third status report on its lack of progress in the 
implementation of the DSB's ruling in this dispute.  In fact, since the condemnation of Section 211 in 
February 2002, the United States had failed to take any steps to implement the DSB's ruling.  The EC 
hoped that the United States would put itself into compliance with its TRIPS obligations before the 
status report number reached a 3-digit figure. 
5. The representative of Cuba  said that the current year was drawing to a close, and every month 
his country had been denouncing US non-compliance in the Section 211 case.  For more than six years now, the US administration had been repeati ng that it was working with the US Congress to 
comply with the DSB's recommendations and rulings.  Since the circulation of the Appellate Body 
Report in January 2002, the parties clearly had no t made the slightest step towards settling this 
dispute.  Cuba deeply regretted that, year after year, requests by Members that the provisions of the 
TRIPS Agreement be respected had been ignored.  C uba, for its part, would continue to insist on 
compliance with the DSB's recommendations and ruli ngs in the Section 211 case until the dispute had 
been settled.  Article XVI:4 of the Marrakesh Agreem ent clearly stated that ea ch Member shall ensure 
the conformity of its laws, regulations and admi nistrative procedures with its obligations under the  WT/DSB/M/261 
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WTO Agreements.  Consequently, there was nothing to  justify the US attitude of indifference to the 
decisions of the DSB and the complaints raised in the DSB meetings.  The shortcomings of the 
dispute settlement mechanism, however few there might  be, pointed to an urgent need to reform the 
system.  In Doha, Members had agreed to carry out negotiations to "improve and clarify the Dispute Settlement Understanding".  And ye t, this was one of the areas that lagged behind in its work 
programme.  At the November regular DSB meeting,  certain Members expressed hope that with the 
election of a new US President, this dispute woul d definitely be settled.  The United States had 
referred to its history of compliance.  In the area of  international law, Cuba had a lot to say to the 
United States about compliance.  The non-complying Member and all other Members present at this 
meeting knew very well what Cuba was referring to.  One would run out of time if one were to talk 
about it in this forum.  The US history of non-co mpliance, where Cuba was concerned, was hardly 
encouraging.  However, Cuba believed that the ne w US administration should review its intellectual 
property policies and bring its legislation into conformity with the TRIPS Agreement which, 
moreover, protected the interests of right-owners in  the more developed countries.  The more sensitive 
issues like intellectual property on the Internet a nd free trade agreements, which had been designated 
as priorities for the new US government, would involve  considerable efforts.  On the other hand, 
revoking the absurd and retrograde Section 211 was so mething that could be done rapidly if there was 
the political will to do so.  
6. The representative of Thailand
 said that his country thanked the United States for its status 
report.  Like previous speakers, Thailand remained concerned about the systemic implications of this 
dispute.  The integrity of the rules-based mu ltilateral trading system was undermined by non-
implementation of the DSB's rulings and reco mmendations.  Therefore, Thailand urged the 
United States to take all necessary steps to comply with its obligations under the TRIPS Agreement as 
soon as possible.  
7. The representative of the Bolivarian Republic of Venezuela  said that, once again, his 
delegation had taken note of the US status report.  His country wished to be fully associated with the 
statement made by Cuba and joined Cuba in expr essing concerns, as a country that respected the rules 
and values of democracy, at the repeated failure by  the United States to comply with the DSB's ruling 
in the case at issue.  His country was concerned b ecause this non-compliance demonstrated a lack of 
respect, and in this particular case it was a lack  of respect for Cuba, and for the North American 
people, who respected democracy, trusted in their re presentatives to reinforce that democracy, and in 
the WTO as well as its Members.  His country  could not disassociate the WTO from the United 
Nations, an institution which grouped together practically all countries of the world, and 185 of whose 
Members, as recently as of October 2008, had voted once again against a blockade which, in the name 
of an alleged quest for democracy, violated the hum an rights of the Cuban people.  The United States, 
by seeking to impede the development of foreign inve stment in Cuba associated with the international 
marketing of Cuban products whose trademarks ca rried a certain amount of prestige at the world 
level, was causing Cuba irreparable damage. 
8. If it was true that trade was fundamental to deve lopment, then the United States was the main 
cause of the sufferings of the Cuban people.  The United States had been pushing forward the 
deadlines granted for the revocation of Section 211.   The United States had been acting ambiguously 
and persistently;  but his country refused to let the US  tactics to become a habit, and still less to accept 
it, because in many spheres of international relations , in an alleged attempt to ensure compliance with 
the law and to establish its own vision of democracy, which was always whatever suited its interests, 
it violated the very principles of democracy and laws that it purported to uphold.  In the DSB, Cuba challenged those US actions.  Thus, for six years now  there had been a firm decision taken by a body 
that member countries were seeki ng to reinforce – convinced as th ey were of the advantages of 
multilateralism – and yet there was non-compliance.  Once again, the message to the world was "do as 
I say, but not as I do".  His country wished to express,  once again, its concern at the systemic damage 
being done to this institu tion while in other areas of the WTO, th e United States repeatedly used that 
argument to attain its objectives.  For all of these reasons, his country urged the United States to act WT/DSB/M/261 
Page 4  
 
without further delay and to take real and concre te measures thereby complying with its obligations 
under the TRIPS Agreement.  
9. The representative of China
 said that his country thanked the United States for its status report 
and the statement made at the present meeting.  However, it was very regrettable that, once again, there was no indication of any progress towards implementation.  As previous speakers had correctly 
mentioned, the current situation seriously damage d the authority of the TRIPS Agreement and the 
creditability of the WTO dispute settlement system .  China hoped that the US Government and the 
new US Congress would realize that putting an end to this situation was in the interest of not only other Members, but also in the interest of the United States, as a major WTO Member and main player of the dispute settlement system.  Therefor e, China supported the statements made by the EC 
and Cuba and urged the United States to make an extr a effort to bring itself into conformity with the 
decision of the DSB without further delay.  
10. The representative of Chile
 said that his delegation hoped that, in the year to come, this matter 
would take a positive turn in terms of complian ce with the DSB's recommendations and resolutions. 
11. The representative of Ecuador  said that his country thanked the United States for its status 
report.  All WTO Members must comply with the DSB's recommendations and rulings.  After the 
banana dispute, this was the oldest dispute that  was still pending.  Ecuador, therefore, urged the 
United States to honour its WTO commitments, and s upported the statements ma de by Cuba and other 
Members in that respect.  Ecuador hoped that the new US administration and the US Congress would put an end to this matter and to the injusti ce of the economic blockade imposed on Cuba. 
12. The representative of  India
 said that her country thanked the United States for its status report 
and the statement made at the present meeting.  In dia noted that there was no substantive change in 
the situation, and felt compelled yet again to st ress that the principle of prompt compliance was 
missing in this dispute.  India, therefore, wished to  renew its systemic concerns about this situation of 
non-compliance as this continuous non-compliance situation by WTO Members clearly undermined 
the credibility and confidence that all reposed in the system.  
13. The representative of Brazil  said that his country thanked the United States for its status 
report.  The lack of compliance in this dispute w as a cause of concern not on ly for the complainants, 
but also for the broader Membership that relied on settlement of disputes as one of the WTO principles.  Brazil, once again, urged the United States to implement the DSB's recommendations in 
this dispute. 
14. The representative of Nicaragua
 said that her delegation had ta ken note of the status report 
submitted by the United States.  As indicated in that  report, since 18 February 2002, the United States 
had been reporting to the DSB on its intention to comply with the DSB's recommendations.  However, 
Nicaragua noted with concern that there was no clear indication in that report as to how this would be 
done.  Therefore, further clarification was required.   This case had been di scussed for almost seven 
years and, in light of the situation, Nicaragua called upon the United States, once again, to swiftly 
seek to comply with the commitmen ts and the decision of the DSU and to ensure that Members be 
kept informed about this matter.  
15. The representative of Bolivia  said that, once again, her country wished to reiterate its concern 
at the lack of progress in this dispute and the nega tive impact that this non-compliance would have on 
the credibility of the WTO multilateral trading system  and the DSB.  Bolivia hoped that the new US 
administration would be able to implement the DS B's rulings and remove the restrictions imposed 
under the Omnibus Appropriations Act. 
16. The representative of Argentina  said that his country also thanked the United States for its 
status report.  All Members had to ensure that dis putes were resolved and Argentina, therefore, called  WT/DSB/M/261 
 Page 5 
 
 
on both parties, particularly the United States, to ensure that the necessary steps were taken to avoid 
discussions of this matter at each DSB meeting and to make sure that this matter should not be a 
standing item on the DSB's Agenda. 
17. The representative of Uruguay  said that his country shared the systemic concerns expressed 
by previous speakers.  For Uruguay it was essential that Members must ensure swift implementation 
of decisions of the DSB to preserve the credibility  and proper functioning of  the dispute settlement 
system, as well as the effective observance of the rights and obligations under the multilateral trading 
system.  Uruguay reiterated its concern and called on the United States to ensure that the decisions of 
the DSB be swiftly implemented. 
18. The representative of the United States  said that, as in some past meetings, some Members 
had expressed systemic concerns about a situation of non-compliance, and as in past meetings, the 
United States wished to make clear that it had come  into compliance, fully and promptly, in the vast 
majority of its disputes.  As for the remaining fe w instances where the US efforts to do so had not yet 
been entirely successful, the United States continued to work actively towards compliance.  But, in 
light of the assertion that the concerns expressed by these Members were "systemic" in nature, the 
United States was looking forward to hearing all these Members' interventions under Item 4 of the 
Agenda of the present meeting.  
19. 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.73) 
20. The Chairman  drew attention to document WT/DS184/ 15/Add.73, 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. 
21. The representative of the United States  said that his country had provided a status report in 
this dispute on 11 December 2008, in accordance with Article 21.6 of the DSU.  As of 
23 November 2002, the US authorities had addresse d 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 issue in this dispute.  Details were provided in document WT/DS184/15/Add.3.  As 
mentioned under the previous sub-item, the US C ongress had completed its work for this calendar 
year, and a new Congress would convene in January .  The US administration would work with the 
next Congress with respect to the recommendations a nd rulings of the DSB that had not already been 
addressed by the US authorities by 23 November 2002. 
22. The representative of Japan
 said that his country thanked the United States for its statement 
and the latest status report.  As reported by the United States, certain measures had been taken to 
implement part of the DSB's recommendations in November 2002.  Since then, however, there had 
been little tangible progress for the remaining part of the DSB's recommendations and rulings.  A full 
and prompt implementation of the DSB's recommenda tions and rulings was "esse ntial to the effective 
functioning of the WTO and the maintenance of a proper balance of the rights and obligations of 
Members".1  Japan hoped that this long-standing dispute would be resolved finally and promptly in 
the coming year.  
23. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
                                                      
1 Article 3.3 of the DSU. WT/DSB/M/261 
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(c) United States – Section 110(5) of the US Copyright Act:  Status report by the United States 
(WT/DS160/24/Add.48) 
24. The Chairman
 drew attention to document WT/DS160/ 24/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 Section 110(5) of the US Copyright Act. 
25. The representative of the United States  said that his country had provided a status report in 
this dispute on 11 December 2008, in accordance with Article 21.6 of the DSU.  As mentioned earlier 
at the present meeting, the US Congress had comple ted its work for this calendar year, and a new 
Congress would convene in January.  The US admini stration would work closely with the new US 
Congress and continue to confer with the Europ ean Communities, in order to reach a mutually 
satisfactory resolution of this matter. 
26. The representative of the European Communities  said that the present meeting was the forty-
eighth time that the United States reported on continued non-compliance without offering any concrete means to bring itself into compliance.  Sh e said that "given that th e luck of the Irish had 
gotten them nowhere, the EC hoped that Father Christ mas might have something in his bag for the EC 
on this one".  Unfortunately that seemed now the most likely avenue.  
27. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(d) European Communities – Measures affecting the approval and marketing of biotech products:  
Status report by the European Communities (WT/DS291/37/Add.11 – WT/DS292/31/Add.11 – WT/DS293/31/Add.11) 
28. The Chairman
 drew attention to document WT/D S291/37/Add.11 – WT/DS292/31/Add.11 – 
WT/DS293/31/Add.11, which contained the status report by the European Communities on progress 
in the implementation of the DSB's recommendations in the case concerning the EC's measures affecting the approval and mark eting of biotech products. 
29. The representative of the European Communities
 said that the EC welcomed the decision by 
both Argentina and Canada to further extend the r easonable period of time until 1 March 2009.  This 
seemed recognition that the best way forward was continued dialogue and co operation, rather than 
litigation.  The EC continued to be willing to mainta in a regular dialogue with the three complainants 
on all relevant biotech-related issues of their con cern, not limited to the implementation of the WTO 
Panel Report.  Further meetings w ith Canada and Argentina were pl anned to take place early next 
year.  Since the last discussion of this issue befo re the DSB, substantive progress had been made both 
in relation to pending applications  and on national measures.  On 4 December 2008, the Commission 
had approved the commercially important soybean variety known as Roundup Ready 2 (19th authorization since the time of establishment of the Panel).  That authorization came only after four months since the opinion by EFSA had been issued.  This eliminated any risk of trade disruption on 
this product due to asynchronous authorizations.  And this showed that the EC regulatory regime 
worked normally.  With respect to the GM oilseed rape to which Canada had made reference at past 
meetings (T-45), the EC was happy to report that a vote in the Council was expected by mid-January.  
An authorization decision could be adopted in Febr uary 2009.  Progress had also been made in the 
authorization process of two maize events.  An EFSA opinion had been issued for one of them (59122 
x NK603) and another EFSA opinion was to be pu blished tomorrow (MON89034).  With regard to 
the products covered by the Panel Report, the Commission was preparing a draft decision to the 
regulatory committee on the two pending applicati ons for cultivation of GM maize 1507 and Bt11, 
following a positive opinion by EFSA on 31 Octobe r.  With respect to national measures, progress 
continued in the application of the corresponding EC  regulatory procedures.  Scientific assessment by 
EFSA had been delivered and the Commission was preparing a proposal to the Council.  The EC  WT/DSB/M/261 
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believed that the progress described in such a sen sitive area showed that the only appropriate way 
forward was dialogue and cooperation.  The EC rema ined open to continue discussions with the three 
complainants. 
30. The representative of the United States  said that his country thanked the EC for its written 
status report and for its statement made at the present meeting.  The DSB had adopted its 
recommendations and rulings in this dispute in N ovember 2006.  The United States recalled that the 
DSB had found that the EC had adopted a moratori um on biotech approvals starting in 1999, and 
lasting at least up through the time of panel est ablishment in August 2003.  The DSB had gone on to 
find that this moratorium had resulted in the undue delay of pending biotech product applications, and 
that the delay breached the EC's obligations under the SPS Agreement.  The EC's delays had resulted 
in a backlog of approximately 50 pending biotech a pplications.  Many of the biotech varieties caught 
up in this backlog were approved in the United St ates and other major markets, were currently in 
production, and were being used safely around the world.  As a result, the backlog of pending applications was not simply a stack of paper dossier s.  Rather, the backlog resulted in actual, on-going 
and serious trade harm to the United States.  
31. More than two years had passed since the DSB made its recommendations and rulings.  
Unfortunately, delays were still ende mic in the EC's biotech approval system.  In calendar year 2007, 
the EC had managed to reach a decision on just four  of the dozens of pending biotech applications.  
Not one of those products had been approved in the st andard procedure set out in the EC's regulations, 
which contemplated a decision in a regulatory committee based on a scientific assessment.  Instead, each one of those applications had been referred to  political level decision-makers, and had ultimately 
been approved over the objection of a substantial num ber of EC member States.  In fact, since the 
adoption of the moratorium in 1999, the EC had not made a single decision on a biotech application without resort to this extraordinary, time-consumi ng, and politically controve rsial procedure.  During 
its on-going dialogue with the EC over the past two years, the United States had expressed its concerns with delays and the glacial pace of d ecision-making.  The EC had, however, asked for 
patience.  The EC had explained that it was undert aking far-ranging improvements in its process, and 
the EC had assured the United States that soon it would see the positive results of those supposed 
improvements.  And now another calendar year had passed.  And again, during an entire year, the EC 
had been able to reach a decision on only four of  the dozens of pending biotech applications.  And 
again, the EC was not able to reach a decision on a single application without resort to political-level 
decision-makers and an ultimate approval over the objections of a substantial number of EC member 
States.  The United States was left in the position of  asking what, exactly, were  the positive results of 
the supposed improvements in the EC's operation of its biotech approval system.  One product application had been pending for over 12 years, anot her for over seven years.  The backlog of pending 
applications was even greater than in November 2006, when the reasonable period of time had begun.  
US producers remained shut out of major EC mark ets.  The United States thanked the DSB for its 
attention to this matter.  
32. The representative of Argentina
 said that his country was grateful for the status report 
submitted by the EC at the present meeting, and r ecognized that the continued dialogue between the 
parties had yielded concrete signs of progress.  Th ere remained a few concerns regarding the process 
of approval of GMOs in the EC, certain prohibitions that were still in force, as well as the attitude of 
certain member States towards GMOs, which his country  was following closely.  In this connection, 
Argentina and the EC had signed a new agreemen t extending the reasonable period of time for 
implementation up to 1 March 2009 in the belief th at this would enable the parties, through open 
dialogue, to continue discussions that would lead to  the final and satisfactory implementation of the 
DSB's recommendations. 
33. The representative of Canada  said that her country thanked the EC for its statement.  Canada 
and the EC had agreed to an extension of the reasona ble period of time for the EC to bring itself into 
compliance with the DSB's findings until 1 March 2009.  Canada had done so as it valued the WT/DSB/M/261 
Page 8  
 
constructive dialogue it had had to date with the EC.  However, as Canada had previously stated, 
Canada had significant on-going concerns.  There were , for example, still member State bans in place 
on the cultivation and marketing of approved biot ech products.  Canada also remained deeply 
concerned that undue delays were reappearing in  the EC approval system for biotech products.  
Canada would continue to monitor the situation closely.   
34. The representative of th e European Communities
 said that the United States had referred to 
the so-called comitologie, which was a procedur e for the EC Council to delegate powers of 
implementation to the Commission under the superv ision of a Committee.  This procedure was a 
standard procedure under EC law and was also set out in the EC regulatory regime.  That regime was not the subject of the original Panel's findings and neither its "operation" nor the status of specific 
applications not dealt with in the original Panel w as covered by this Agenda item.  In any event, the 
GMO regulatory regime was working normally.  Its functioning should not be rigidly assessed purely 
quantitatively and in abstract, in terms of number of  authorization per year, since this was dependent 
on various product and case specific elements and in particular on the quality of applications and on 
the time needed by applicants to answer request s from EFSA on additional scientific information.  
Currently, only 38 complete applications were pending assessment by EFSA (four of them submitted 
very recently). 
35. The representative of the United States
 said that no one should be surprised that the EC had 
stated that the DSB should not be discussing the ope ration of its approval system given that the EC 
had only reached decisions on four pe nding applications in all of 2008.  It was easy to see why the EC 
did not want to talk about the backlog of pending applications or the operation of the EC approval 
system.  But, the EC might wish to recall what it had told the DSB on 19 February and even again at 
the present meeting:  namely, that "Numbers  [of approvals] may be illustrative in assessing 
progress".2  Of course, what the numbers showed was precisely the opposite of progress:  an 
assessment based on the number of approvals in 2008 showed that EC progress had been nil. 
36. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
2. United States – Continued Dumping and Subsid y Offset Act of 2000:  Implementation of 
the recommendations adopted by the DSB 
(a) Statements by the European Communities and Japan 
37. The Chairman  said that this matter was on the Agenda of the present meeting at the request of 
the EC and Japan.  He then invited the respective representatives to speak. 
38. The representative of Japan  said that, although it had not been officially announced, the 
distribution for FY 2008 under the CDSOA appeared to have been completed, except for the funds available for certain warm shrimp.
3  Thus the CDSOA still remained operational.4  Japan urged the 
United States to immediately terminate the illegal distributions, and repeal the CDSOA not just in 
form but in substance so as to resolve this dispute once and for all.  According to Article 21.6 of the 
DSU, the United States was under obligation to provid e the DSB with a status report in this dispute 
''until the issue is resolved".  Japan reserved all its rights under the DSU until the United States came 
into full compliance.  Japan noted  that, according to several press reports, US Customs and Border 
                                                      
2 WT/DSB/M/247, para. 28. 
3 The distribution of those funds appear to be currently suspended to the pending domestic litigation.  
See US Customs and Border Protection's website at:  
http://www.cpb.gov/xp/cgov/trad e/priority_trade/add_cvd/cont_dump/warm_water_shrimp.xml  
4 In the words of the US Customs, "the distribution process will continue for an undetermined period".  
See US Customs and Border Protection's website at:  
http://www.cbp.gov/xp/cgov/tr ade/priority_trade/add_cvd/cont_dump/cont_dump_faq.xm   WT/DSB/M/261 
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Protection  demanded the US companies to repay money distributed to them from the duties collected 
on imports from the US NAFTA partners.  This w as an interesting development, not least because it 
may show the US administration's view that the ille gally distributed funds under the CDSOA could be 
subject to repayment.  
39. The representative of the European Communities  said that on 1 October, the United States 
had started the eighth distribution of the anti-dum ping and countervailing duties collected on imports 
made prior to 1 October 2007.  Such illegal distri butions would continue for an undetermined number 
of years.  Therefore, the EC would like to ask ag ain the United States when it would stop the transfer 
of those duties to its industry and finally put an end to the condemned measure.  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 in this dispute. 
40. The representative of Brazil
 said that his country wished to thank Japan and the EC for 
keeping this item in the Agenda of the DSB.  As  Brazil had been repeating on many occasions, it was 
Brazil's understanding that the dis bursements made by the United Stat es to its domestic industry under 
the Byrd Amendment continued to affect the right s of other WTO Members.  Brazil stressed, once 
more, the need for the United States to take the necessary actions in order to fully implement the 
DSB's recommendations and rulings in this disput e by ceasing all disbursements under the CDSOA.  
41. The representative of India  said that her country thanked the EC and Japan for maintaining 
this issue before the DSB once again.  As India had repeatedly pointed out, the disbursements made 
by the United States to its industry under the Byrd Amendment continued to affect the rights of WTO 
Members.  Furthermore, attempts to reintroduce this legislation were a cause of serious concern.  
India reiterated that the United States bring this situation to an end and thus fully implement the 
DSB's recommendations and rulings.  India, therefore, urged the United States to cease its WTO inconsistent disbursement.  Indi a supported the view that contin ued surveillance by the DSB was 
needed.  
42. The representative of Canada
 said that her country agreed with the EC and Japan that the 
Byrd Amendment remained subject  to the surveillance of the DS B until the United States ceased to 
administer it. 
43. The representative of China  said that his country thanked the EC and Japan for, once again, 
raising this matter at the DSB meeting.  China shared the views expressed by previous speakers and 
wished to join them in urging the United Stat es to fully comply with the DSB's rulings.  
44. The representative of Thailand  said that his country thanked the EC and Japan for bringing 
this item before the DSB.  As his delegation had repeatedly stated, Thailand was disappointed at the 
US maintenance of those WTO-inconsistent disburse ments.  Thailand thus urged the United States to 
cease the disbursements, repeal the Byrd Amendmen t with immediate practical effect, and resume 
providing status reports until such actions were taken and this matter was fully resolved.  
45. 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.  The United States recalled, furthermore, that 
Members, including the EC and Japan, had acknowle dged during previous DSB meetings that the 
2006 Deficit Reduction Act did not permit the distribu tion of duties collected on goods entered after 
1 October 2007.  The United States, therefore, did not understand the purpose for which the EC and 
Japan had inscribed this item again on the Agenda of  the present meeting.  With respect to comments 
regarding further DSB surveillance in this matter,  the United States failed to see what purpose would WT/DSB/M/261 
Page 10  
 
be served by further submission of status reports repeating again that the United States had taken all 
actions necessary to implement the DSB's reco mmendations and rulings in these disputes. 
46. The DSB took note
 of the statements.  
3. United States – Definitive anti-dumping and countervailing duties on certain products 
from China  
(a) Request for the establishment of a panel by China (WT/DS379/2) 
47. The Chairman  drew attention to the communicati on from China contained in document 
WT/DS379/2, and invited the representative of China to speak. 
48. The representative of China  said that, on 19 September 2008, China had requested 
consultations with the United States on the four  sets of parallel anti-dumping and countervailing 
duties imposed pursuant to certain final anti-du mping and countervailing duty determinations and 
orders on Chinese products, including circular welded carbon quality steel pipe ("CWP"), new pneumatic off-the-road tires ("OTR"), light-walle d rectangular pipe and tube ("LWRP") and 
laminated woven sacks ("LWS").  The parties had held consultations on 14 November 2008, but 
regrettably, these consultations had failed to resolv e the dispute.  In China's view, the measures at 
issue appeared to raise a number of WTO con cerns.  China was deeply concerned about the 
compatibility of those measures and the subsequent i nvestigations by the United States with its treaty 
obligations under the GATT 1994, the SCM Agreem ent, the Anti-Dumping Agreement and the 
Protocol on the Accession of China.  A summary of  the specific measures at issue and the legal basis 
for China's concerns was contained in China's re quest for the establishment of a panel (WT/DS379/2) 
circulated on 12 December 2008.  For the sake of tim e, China would not repeat the specifics of its 
request at the present meeting, but wished to highli ght three sets of issues in the identified measures. 
49. First, the US authorities appeared to fail to ma ke a valid determination that certainly alleged 
subsidy programmes were countervailable subsidies w ithin the meaning of the SCM Agreement.  For 
example, the finding by the US authorities that certain state-owned entities were "public bodies" appeared to violate Article 1.1(a)(1) of the SCM Agreement.  The US authorities also appeared to 
improperly resort to a benchmark outside of China in  determining the existenc e and extent of alleged 
subsidy benefits.  Second, the use by the United States of non-market economy methodology for determining the existence and ex tent of alleged dumping for prod ucts from China necessarily gave 
rise to double remedy when it was applied simultane ously with the imposition of countervailing duties 
on the same product.  Third, in the conduc t of the anti-dumping and countervailing duty 
investigations, the US authorities appeared to ser iously deprive the Chinese Government and other 
interested parties of their rights to due pro cess under the Anti-Dumping Agreement and the SCM 
Agreement.  This dispute was of great significan ce and urgency for China given its far-reaching legal 
and economic implications.  Su bsequent to the four anti-dumping and countervailing duty 
investigations at issue, the United States had by  far initiated eight sets of parallel anti-dumping and 
countervailing duty investigations, and had imposed  definitive anti-dumping and countervailing duties 
on four subject products originating from China.  In those subsequent investigations, the US 
authorities appeared to have followed the same ar bitrary and discriminatory approach in the four 
measures at issue.  Should such protectionist appr oach not be corrected in a timely fashion, there 
would be escalating harm to various Chinese industri es.  China had called the United States' attention 
to its concerns on numerous occasions.  However, Ch ina was disappointed that, thus far, it had not 
received any concrete solution from the United States .  Therefore, given its immediate and systemic 
concerns, China was compelled to pursue this matte r further and to request that the DSB establish a 
panel at the present meeting to examine China's co mplaint in accordance with Articles 4.7 and 6 of 
the DSU.   WT/DSB/M/261 
 Page 11 
 
 
50. The representative of the United States  said that his country was disappointed that China had 
chosen to move forward with a request for pane l establishment at the present meeting.  In the 
investigations at issue in this dispute, the US  investigating authorities had found that the Chinese 
products in question were dumped in the United Stat es.  They had also found that the products in 
question benefited from Chinese subsidies.  And, they  had found that the effect of such dumped and 
subsidized imports was material injury to US indust ry.  Therefore, to remedy both of these types of 
unfair practice, the US authorities imposed both an ti-dumping duty and countervailing duty measures.  
China's complaint appeared to be an effort to hinder the effectiveness of the two remedies permitted 
under the WTO Agreements for these two injurious pr actices.  The United States was confident that, 
if this dispute were to proceed to a panel, th e anti-dumping and counterva iling duty determinations 
identified by China, and the anti-dumping and c ountervailing duty measure s imposed pursuant to 
those determinations, would be f ound to be consistent with US WT O obligations.  The United States 
also pointed out that the panel request before the DSB at the present meeting included an item that did 
not appear to be a measure that was the subject of consultations.  China identified in its panel request 
something that it described as an "omission", which it purported to challenge "as such".  However, 
nowhere in its request for consultations did China identify the "absence" of "legal authority for the 
Department of Commerce" as a measure that was a subject of consultations.  Rather, China's request for consultations was clearly limited to "the definitive anti-dumping and countervailing duties 
imposed by the United States pursuant to th e final anti-dumping and countervailing duty 
determinations and orders issued by the US Depart ment of Commerce in the investigations" that were 
identified in that request.  For all of those re asons, the United States strongly urged China to 
reconsider its decision to pursue a panel in this dispute, and the United States was not in a position to 
agree to the establishment of a panel at this time. 
51. The DSB took note
 of the statements and agreed  to revert to this matter. 
4. European Communities – Regime for the importation, sale and distribution of bananas:  
Recourse to Article 21.5 of the DSU by the United States  
(a) Report of the Appellate Body (WT/DS27/AB/R W/USA and Corr.1) and Report of the Panel 
(WT/DS27/RW/USA and Corr.1) 
52. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS27/93 transmitting the Appellate Body Report on:  "European Communities – Regime for the Importation, Sale and Distribution of  Bananas:  Recourse to Article 21.5 of the DSU 
by the United States", which had been circulated on 26 November 2008 in document 
WT/DS27/AB/RW/USA, in accordance with Article 17.5 of the DSU.  Subsequently, a corrigendum 
to the Appellate Body Report had been circulated on 11 December.  He reminded delegations that the 
Appellate Body Report and the Panel Report pertai ning to this dispute had been circulated as 
unrestricted documents.  As Members were aware, Article 17.14 of the DSU required that:  "An Appellate Body report shall be adopted by the DS B and unconditionally accepted by the parties to the 
dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 30 days 
following its circulation to Members.  This adopti on procedure is without prejudice to the right of 
Members to express their views on an Appellate Body report".  
53. The representative of the United States
 said that his delegation wished to begin by, once 
again, thanking the members of the Appellate Body, the members of the Panel, and the Secretariat for 
their work in this proceeding.  As the United St ates had noted at the 11 December DSB meeting, the 
United States greatly appreciated the effort that  the Appellate Body and the Secretariat had 
undertaken to ensure that the Report in Ecuador's  proceeding and the Report in the US proceeding 
contained distinct findings and conclusions.  And,  the United States wished to thank the Appellate 
Body for agreeing to correct two typographical errors in its Reports.  Errors could occur in long and complex documents such as Appellate Body report s, and it was very important for the dispute 
settlement system to be able to address them.  Fu rthermore, the United States again thanked both the WT/DSB/M/261 
Page 12  
 
Panel and the Appellate Body for agreeing to make  the hearings in this dispute open to public 
observation for those Members who had chosen to make  their statements openly.  Such transparency 
was very valuable to the dispute settlement system and the WTO as a whole. 
54. Turning to the substance of the Reports before the DSB at the present meeting, the Panel and 
the Appellate Body had thoroughly a nd properly rejected this most recent attempt by the EC to avoid 
its WTO obligations with respect to bananas.  Th e EC had taken issue with the Appellate Body's 
interpretation of Article XIII of the GATT 1994, calli ng it "far-reaching", in "disregard of the specific 
nature of 'preferential' TRQs" and bound to "have se rious implications in WTO practice".  In the US 
view, nothing could be further from the truth.  Th e Appellate Body had instead merely confirmed, 
once again, the proper reading of Article XIII, a read ing that followed from the text of the Article and 
that the Appellate Body had recognized in its first re port on Bananas in 1997.  Given the EC's attitude 
towards adopted Appellate Body reports, it was surpri sing that the EC had taken the positions it did in 
this compliance proceeding contesting the earlier Appella te Body report in this dispute.  And, it was 
regrettable that the EC had, once again, refused to  abide by its obligations under that Article.  In 
addition, the Appellate Body and the Panel had correc tly rejected the EC's attempt to avoid the merits 
of this dispute with a variety of procedural argum ents.  Some of those arguments had already been 
addressed – and rejected – in the proceedings in this dispute in 1995-1997, and the United States 
thanked the Panel and Appellate Body for clear ly rejecting them this time as well.  
55. In addition, the United States was particular ly gratified by the emphasis given by the 
Appellate Body to a proper textual analysis of the US-EC Understanding on Ba nanas.  It was clear 
from the text of the Understanding, that in early 20 01 the EC had agreed to implement, as a means of 
resolving this dispute, a tariff-only regime by 1 January 2006.  The EC, unfortunately, had not done 
what it had said it would do.  Furthermore, it was also clear from the Understanding that the 
United States had not relinquished its right to furt her proceedings under Article 21.5 of the DSU.  The 
United States only wished it had not been necessary to exercise that right.  The United States also 
appreciated the Panel's clear analysis of the EC's fa ilure to comply with its obligations under Article I 
of the GATT 1994.  The EC had not even appealed th is point.  For all these reasons, the United States 
welcomed the Panel and the Appellate Body  Reports, and supported their adoption.   
56. The United States did wish to note its concern with  three points in the Appellate Body Report.  
First, the United States considered it was incorrect  for the Appellate Body to state in paragraph 479 
that "the measure at issue ... is no longer in existe nce".  It was clear from the Panel Report that the 
Panel had made no factual finding to that effect.  To the contrary, the Panel had found the EC's 
attempt to make such a factual assertion for the fi rst time during interim review to be inadmissible.
5  
What was more, the EC explicitly had not raised a DS U Article 11 claim with respect to this issue on 
appeal.6  The Appellate Body should therefore not have ma de this statement relating to an alleged fact 
not on the Panel record.  That statement was even more  puzzling in light of the fact that it was neither 
supported nor explained in the Report.  Second,  the United States was very concerned by the 
Appellate Body's statement in paragraph 245 that "[i] n the event that the measure at issue is found not 
to be in itself a measure taken to comply, our analysis will turn to the question of whether a 
'particularly close relationship' exists between the measure at issue and the declared measure taken to 
comply, which would warrant subjecting the measure at issue to the scope of Article 21.5 of the DSU".  The United States did not understand how th is statement was to be reconciled with the 
provisions of Article 21.5, which made the task of a compliance panel the resolution of 
"disagreement[s] as to the existence or consiste ncy with a covered agreem ent of measures taken to 
comply".  Consequently, if a measure was not a "mea sure taken to comply", there was no textual basis 
for it to be within the terms of reference of an Article 21.5 compliance proceeding.  Third, another 
troubling aspect of the Appellate Body Report was th e Appellate Body's view that measures that had 
expired might nonetheless be subject to challenge in  WTO dispute settlement.  As the United States 
                                                     
 
5 Panel Report, paras. 6.18, 6.42, 6.50. 
6 See, e.g., Appellate B ody Report, para. 274.  WT/DSB/M/261 
 Page 13 
 
 
had previously explained, this view, which the Appe llate Body had expressed in the context of claims 
under the Subsidies Agreement, was quite troubling in th at context.  Repeating that view in a context 
divorced from the Subsidies Agreement only increased  the US concern.  Members would need to 
carefully review this position a nd consider its implications for the dispute settlement system. 
57. The United States was somewhat en couraged by the EC statements made at the 11 December 
DSB meeting regarding its commitment to finding  a definitive solution to this dispute.  The 
United States was, therefore, hoping that the EC would have good news to re port now.  Unfortunately, 
from statements made at the TNC and the General Council meetings, that did not appear to be the 
case.  The United States would like to draw Members'  attention to the conclusions of the Panel and 
Appellate Body:  the result of these proceedings was that the "DSB recommendations and rulings 
from the original proceedings remain in effect until the European Communities brings itself into 
substantive compliance".7  The EC, therefore, must resolve the bananas issue.  Once again, the United 
States encouraged the EC to continue and concl ude discussions with the MFN suppliers.  In the 
meantime, the United States recalled the obligatio n of the EC under Article 21.6 of the DSU to 
resume providing status reports to the DSB.  Indeed , the United States expected the EC to provide one 
at the present meeting, given that the DSB had adopt ed the Panel and Appellate Body Reports in the 
Ecuador proceeding on 11 December.  Perhaps the f act that the Agenda for the present meeting had 
closed on that same day had led the EC to miss the deadline inadvertently.  The United States trusted 
that problem would not recur in January.  Finally, the United States was looking forward to hearing the interventions of those Members who had spoken under Agenda Item 1A. 
58. The representative of the European Communities
 said that the EC wished, once more, to 
express its regret at the US disingenuous attempt to  modify important findings and conclusions of the 
Appellate Body Report after being issued.  The EC welcomed the Appellate Body's firm decision to 
reject any modifications other than  clerical errors.  With respec t to the Appellate Body and Panel 
Reports themselves, the EC wished to reiterate its  disappointment at the approach taken by both the 
Panel and the Appellate Body with respect to the ad missibility of this case and the question of the lack 
of "nullification and impairment" of US rights.  This set a bad precedent since it encouraged WTO 
challenges by WTO Members who barely produced, let al one exported, the goods at stake.  Indeed, it 
was regrettable that the WTO dispute settlement me chanism could be successful ly resorted to by a 
WTO Member only on the basis of a less than likely potential to export a very marginal amount of the 
product concerned.  The United States was not an expor ter of bananas (it was in fact a net importer by 
large).  US production was limited to 30,000 tons in  Puerto Rico and Hawaii.  The fact that US 
multinationals were engage d in distribution of Latin American bananas to the EC market should not 
be sufficient to establish "prejudice" under the WTO DSU for GATT purposes.  This was even more 
regrettable if one took into consideration that the US challenge had referred to a measure that was to 
become obsolete in the course of the proceedings.  Th e EC did not think that this was the best use of 
dispute settlement resources.  The EC, however, we lcomed the confirmation by the Appellate Body 
that the Panel should have taken in to consideration, in drawing any recommendation, of the fact that 
the measure under examination had expired on 31 December 2007, by means of EC Regulation 1528/2007.  This conclusion had been further confir med by the Appellate Body's rejection of the US 
request to modify the Report on this particular is sue.  As a result of the expiry of the measure 
examined, the original DSB recommendations had b ecome obsolete with respect to the claims under 
Articles I and XIII.  The EC, therefore, did not have to take any specific action in the US case. 
59. The representative of Honduras
 said that, both as an original complainant in the Bananas  III 
case and as a country with a right to have its inter est as a substantial supplier of bananas recognized 
by the EC, Honduras clearly had an interest in th is dispute.  Honduras, therefore, welcomed the 
Appellate Body's decision in the proceedings initiate d by the United States, and hoped that this would 
pave the way to a positive outcome.  As the EC had stated, it would prefer to resolve the matter by 
means of a comprehensive arrangement.  However,  such a comprehensive arrangement had already 
                                                      
7 Appellate Body Report, para. 273; Panel Report, para. 8.13. WT/DSB/M/261 
Page 14  
 
been reached.  He recalled that on 27 July 2008, an agreement had been concluded whereby the EC 
was required to lower its tariff to €114/mt in orde r to settle all outstanding disputes and claims under 
the WTO.  The EC had unilaterally decided to fo rgo this agreement without providing a credible 
explanation of its reasons.  Th is attitude had earned the EC tw o more negative rulings from the 
Appellate Body, thus bringing the total number of ru lings against it to 13.  If the EC continued to 
disregard the July Agreement or to insist on re negotiating terms of the agreement, which it itself 
approved, it was highly probable that it would have to face furt her legal proceedings.  Over the past 
few days, Members had heard allusions to furt her disputes arising from the Bananas III case, 
retaliation procedures, appeals against tariff bindi ng violations, complaints regarding the EC's 
enlargement, and new measures against the discrimina tion perpetuated by the EC.  As must be evident 
to all Members, this dispute had already penali zed Latin American developing countries and harmed 
the very WTO system itself for far too long.  Th e following options were open to the EC:  (i) to 
increase the systemic tension that currently existed in respect of bananas and maintain its illegal 
protectionism, at a time when tension and protectionism  were best avoided;  or (ii) live up to its earlier 
promise of settling this long-standing dispute in acco rdance with the terms of the July Agreement.  
Individual interests and those of the community wo uld be better served if the EC were to choose the 
latter of these two options.  Honduras, once again,  called on the EC to adopt and honour the July 
Agreement in order to put an end to this dispute, which had been going on for the past 15 years. 
60. The representative of Nicaragua
 said that her country, which had participated as a third party 
in the proceedings brought by Ecuador , had also participated as a third party in the dispute initiated by 
the United States.  Nicaragua wished to congratul ate the Appellate Body, once again, on its sound 
decisions.  Nicaragua had listened carefully to the statements made by the EC at the present meeting 
and in the past few days since the Appellate Body  had issued its rulings.  Nicaragua had taken due 
note of the EC's assurances that it would bring its bananas import regime  into line with Article II of 
the GATT 1994.  As a country that has participated in  almost all of the 13 complaints dealt with under 
the GATT and the WTO, Nicaragua would welcome a lasting and WTO-consistent solution to the 
bananas dispute.  Article II of the GATT 1994 w as an important element of full compliance.  
Nicaragua had heard about the EC's intention to re bind its tariffs "unilaterally".  Since 2005, three 
review bodies had prohibited three different tariffs imposed unilaterally by the EC.  Any form of 
rebinding that did not maintain the tariff treatment historically afforded to MFN suppliers in the 27 
EC member States, or that did not grant them the rights and benefits that had been reflected in the 
EC's Schedules of Concessions since 1963, woul d pose a problem for Nicaragua.  Looking back, 
some of the best years for Nicaraguan exports to the EC were those in which the 20 per cent ad 
valorem  tariff had been applied.  This tariff appear ed in the EC's schedules from 1963 to 1993.  The 
time had come to reset the banana tariff at a le vel that gave the Nicaraguan banana industry the 
opportunity to re-establish its competitive presence in  the EC market.  However, even if the bound 
banana tariffs were vastly reduced, one would still have to deal with the issues related to Article I of 
the GATT 1994.  In the action brought by the United States and the action brought by Ecuador, the 
Appellate Body had ruled that the tariff preference granted by the EC in favour of the ACP countries 
was inconsistent with Article I.  The EC continue d to grant duty-free access to ACP suppliers, which 
was discriminatory.  In almost every case, thes e preferential suppliers were much better placed 
economically than Nicaragua.  Nicaragua did not see how it would be possible to ensure full compliance in this dispute without remedying th e tariff discrimination exercised by the EC.  
Nicaragua's producers were entitled to fair a nd non-discriminatory access, which legitimately 
provided them with the opportunity to combat povert y through trade.  Nicaragua would continue to 
pursue its interests in this dispute until the above result was achieved. 
61. The representative of Panama
 said that, as a third party in the compliance proceedings, his 
country welcomed the Appellate Body's detailed Report and congra tulated the United States on its 
sixth successful banana-related acti on in this long-standing dispute.  Panama's views concerning this 
dispute were the same as those expressed at the 11 December DSB meeting.  For the sake of brevity, Panama would summarize the main points at the pre sent meeting.  First, like the United States and 
other countries, Panama regretted that so many acti ons had been necessary in relation to bananas.  A  WT/DSB/M/261 
 Page 15 
 
 
better way of dealing with this issue did exist.  Fi ve months ago, in July 2008, the EC had concluded 
an agreement on bananas, but sub sequently had chosen to ignore it.  If the EC had honoured its word, 
this Agenda item would not appear at the present meeting, and the Membership of the WTO would 
not have to listen to so many statements on bana nas.  Second, the July Agreement reflected the 
difficult balance achieved after several months of e fforts, which should not be jeopardized.  In July, 
when the compliance proceedings had still been ongoing, Latin American negotiators had accepted 
eight cuts that would reduce the banana tariff from €148/mt to €114/mt, in return for the termination 
of all pending disputes and claims under the WTO.  Now that the Appellate Body had ruled in his country's favour, any effort made by the EC to reope n this delicate compromise would only give rise 
to demands for improved access for MFN bananas and would aggravate the dispute.  Third, over the 
past two weeks, the EC had made several references to the possibility of "unilateral" rebinding.  In the 
15 years since this dispute had begun, the EC ha d taken unilateral measures on four occasions, on the 
premise that it was seeking to comply with its WTO obligations.  Each one of those unilateral 
arrangements had been declared illegal.  At pres ent, when so many banana-related claims and 
interests still remained pending, including those co ncerning significant adjustments due to the EC's 
enlargement and the tariff discrimination exercised by the EC, a mutually negotiated solution was the 
least contentious course of action.  Such a text had already been drafted and was ready to be signed.  
Finally, Panama noted the call by certain Members fo r the EC to bring itself into conformity with its 
obligations and to prevent any further undermining of the objectives and functioning of the WTO.  
Panama was of the same opinion and, therefor e, made a fresh call for the EC to overcome 
protectionism and put an end to its negative cy cle of non-compliance and to this dispute, in 
accordance with the terms of the 27 July Agreement.  
62. The representative of Ecuador
 said that his country had participated in this dispute as a third 
party and supported the legal arguments put forward by the United States, most of which had been endorsed by the Panel and the Appellate Body.  Ecuador thanked the United States for supporting 
Ecuador as a third party in its own case and for ongoing coordination.  Ecuador also thanked the 
members of the Panel, the Appellate Body, the Legal Affairs Division and the Appellate Body 
Secretariat for the balance and fairness observed in the treatment of third parties in this dispute.  The 
Panel and the Appellate Body had found that:  (i) the United States was not barred by the 2001 
Understanding from initiating this compliance proceeding;   (ii) that the EC banana import regime was 
inconsistent with Articles I and XIII of the GATT 1994;  and (iii) that the EC had nullified or 
impaired benefits accruing to the United States und er that Agreement.  The EC could not dismiss 
those, or Ecuador's Reports on the basis of whether or not the banana regime at issue was in place.  
The Appellate Body had confirmed that a measure not  in effect might indeed be challenged.  The 
Reports had confirmed that the EC had not yet co mplied with the Bananas III recommendations and 
findings.  In addition to the aforementioned inconsiste ncies, the EC had been in breach of Article I of 
the GATT 1994 since 2006.  Many of the Agreements  concluded with the ACP countries had either 
not been notified to the WTO or had yet to be submitted for examination of conformity with WTO 
rules.  The EC bananas import regime had, once agai n, been condemned in the WTO, and still the EC 
refused to comply with its WTO obligations, a lack  of compliance which had cost his country more 
than US$100 million a year in extra tariff payments alone.  Ecuador again called upon the EC to sign 
the Agreement on Bananas of 27 July 2008 and thus put an end to this long-standing dispute, so that it 
would not be necessary to exercise retaliation right s or bring renewed legal complaints.  Ecuador 
looked forward to a status report from the EC on these two disputes.   
63. The representative of Colombia
 said that his country thanked the Appellate Body and the 
Secretariat for their work done on this case and, at th is point, Colombia simply wished to reiterate its 
statement made at the 11 December DSB meeting on the same issue, in the context of Ecuador's 
Reports.  
64. The representative of Costa Rica  said that his delegation had had the opportunity to comment 
on this matter at the 11 December DSB meeting, in connection with the adoption of the Panel and the 
Appellate Body Reports in the case brought by Ecuador.  The content of that statement was also valid WT/DSB/M/261 
Page 16  
 
in the case under consideration.  At the present meet ing, Costa Rica wished to emphasize a number of 
points and to endorse the statements made by prev ious speakers.  Since 1992, the EC bananas import 
regime and its member States had been examined by various bodies, which, as in this case, had 
always confirmed its illegality with the rules of  the multilateral trading system under the GATT and 
the WTO.  His delegation wished to draw Member s' attention to the Panel and Appellate Body's 
conclusions to the effect that the DSB's recommenda tions in the original proceedings remained valid 
until the EC substantially complied with them.  The EC must, therefore, comply, and must implement a definitive solution to the banana issue.  Such a solution had been found on 27 July 2008, when the 
Latin American MFN banana-exporting countries had c oncluded an agreement with the EC;  i.e. the 
Geneva Agreement on Trade in Bananas.  In a surp rising turn of events, the EC had subsequently 
linked its compliance with that Agreement, which w as to put an end to all bananas disputes, to an 
agreement on negotiating modalities under the Doha Round.  This unila teral position of the EC had no 
support in the text of the Agreemen t reached, which made specific re ference to the autonomous nature 
of the Agreement in relation to the Doha Round;  nor was it supported by the Agreement's negotiating 
history or its objective, which was to settle an y disputes and claims brought before the WTO in 
relation to this matter.  Finally, and as a follow- up to the DSB's recommendations, his delegation also 
believed that the EC should provide  status reports on compliance, in accordance with Article 21.6 of 
the DSU, in relation to both the dispute brought by  the United States as well as the dispute brought by 
Ecuador. 
65. The representative of Guatemala
 said that his country, which was a developing country 
Member of the WTO, believed in the multilateral trading system, the main strength of which was, 
precisely, its dispute settlement mechanism.  Ever y adopted report of a panel or the Appellate Body 
further confirmed the determination of Members to ensure that their trade relations were governed by 
WTO rules.  However, the mere adoption of the repor ts was not, in itself, the ultimate objective of the 
dispute settlement mechanism.  The ultimate objectiv e was to achieve compliance with WTO rules.  If 
the EC had not announced its decision to ignore ra ther than honour the Geneva Agreement on Trade 
in Bananas of 27 July 2008, the A ppellate Body Report in this disput e would not have been adopted at 
the present meeting nor would Ecuador's Report ha ve been adopted.  The Bananas Agreement of 
27 July 2008 could have been the solution to all pe nding banana disputes.  Guatemala urged the EC to 
reflect on this valuable opportunity to settle this long-standing dispute.  In the meantime, it should be 
stressed that this was not the fi rst time that a panel or the Appe llate Body had found that the EC 
bananas import regime was inconsistent with WTO ru les.  Nor was it the first time that Guatemala 
was waiting for the EC to apply the conclusions a nd recommendations of panels  and of the Appellate 
Body.  Guatemala, therefore, urged the EC to bring its measures into conformity with the WTO 
Agreements and, as requested by other dele gations, hoped that the EC would report on the 
implementation of the recommendations  and rulings contained in adopted Reports, and that the issue 
would remain on the DSB's Agenda until it was resolved. 
66. The representative of Chile  said that his country had no specific trade interest in this long and 
costly dispute.  However, Chile had a systemic inter est in this issue and, therefore, wished to make a 
statement on this matter.  Chile urged the EC to sw iftly take the necessary measures to put an end to 
the inconsistencies found by the Pa nel and the Appellate Body with regard to a number of provisions 
of the GATT 1994, which continued to damage th e multilateral trading system because of this 
continued inconsistency and failure to comply with its obligations.  
67. The representative of the United States  said that with respect to the EC's assertion that the 
original DSB's recommendations and rulings had become obsolete, the United States referred 
Members, including the EC, to the statements in the Appellate Body Report,  paragraph 273, and the 
Panel Report, paragraph 8.13, namely, that th e recommendations and rulings in the original 
proceedings remained in effect until the EC brought itself into substantive co mpliance.  With respect 
to the EC's comments criticizing the rejection by the Panel and the Appellate Body of the EC's efforts 
to prevent a WTO Member from bringing a dispute because of an alleged l ack of nullification or 
impairment, first, the United States had an economic interest in the EC's implementation of its WTO  WT/DSB/M/261 
 Page 17 
 
 
obligations in the case of bananas, as well as a system ic interest.  As the Appellate Body had pointed 
out8, the Article 22.6 arbitrator in this dispute stated  that there was a "continuation of nullification or 
impairment of US benefits under the revised EC regime", including as a consequence of an 
inconsistency with Article XIII of  the GATT 1994.  Finally, the United States thought that Members 
should be concerned about the EC's  position on this matter that the United States, despite being a 
producer, importer, and potential e xporter of bananas, should be prevented from even bringing this 
dispute.  Such an argument found no support in th e DSU.  What was more, the EC's position would 
effectively curtail the dispute settlement rights of  any Member not yet exporting to a particular 
market, including, for example, developing count ry Members trying to diversify their export 
industries. 
68. The representative of the European Communities  noted that most points raised at the present 
meeting related to Ecuador's Repor t adopted on 11 December, and not to the US Report before the 
DSB at the present meeting.  Many delegations had pointed out that the EC was obliged to bring its 
bananas import regime into compliance by re-binding its tariff.  The EC was glad to confirm, once 
again, that it did indeed intend to rebind, as re quired under Ecuador's Appella te Body Report.  As 
pointed out by Nicaragua a few minutes ago, the EC could do this unilaterally – or "autonomously".  
However, the EC preferred to do this in agreemen t with the MFN suppliers and in the context of a 
comprehensive framework addressing all issues releva nt to the Banana dossier like the issue of 
settlement of all disputes, adjustments reflecting Articles XXIV:6 and XXVIII negotiations, but also tariff cuts that represented the EC's contribution to  the Doha Round or a future round.  The EC had 
held two meetings with the MFN suppliers in rece nt weeks to try to explore how, in the current 
situation, this agreement could be designed and implemented.  A number of delegations had implied 
that the only way to implement was to sign the 27 July Agreement.  The EC was under no obligation 
to implement the Appellate Body Report via the 27 Ju ly Agreement.  He also pointed out, once again, 
that there was no such formal "agreement".  Ther e was a text that would have been initialled had 
certain conditions been met, and in particular, ha d the modalities been adopted.  Those conditions had 
not materialized.  It was, therefore, absolutely inco rrect to allege that the EC had unilaterally walked 
away from the deal.  As one notorious person once said:  "if allegations are repeated often enough, 
people start believing it is the truth".  This was wh y the EC had to refute these allegations time and 
again.  
69. Some delegations had also suggested that th e EC maintained a protectionist regime on 
bananas in continuing to give preferences to th e ACPs.  The EC bananas import regime, far from 
being protectionist, had been an attempt to ba lance out the sometimes conflicting economic and 
developmental interests of two di fferent regions in the world:  the ACPs and Latin American 
suppliers.  If one looked at trade figures since the EC 's tariff-only regime had been adopted, this had 
led to an increase in market shares for MFN supp liers by on average 10 per cent and to a decrease of 
exports from ACP countries.  Common sense would suggest that the EC regime had served MFN 
supplier interest well.  The discriminatory measur es that the United States and others had today 
alleged, no longer existed.  Now there was a numb er of GATT compatible FTAs, namely the EPAs.  
And with respect to those ACP countries who had not signed EPAs, they either came under the 
General System of Preferences or under the "Every thing but Arms"-regime, both of which regimes 
were consistent with the Enabling Clause.  Thus, there were no longer any discriminatory preferences 
for ACPs.  As for the lack of notification alleged by Ecuador, the EC pointed out that the EPA, which 
had been concluded with the Cariforum, had been notified and would now be examined by the CRTA.  
Recently, the EC had also notified the EPA conclude d with Côte d'Ivoire, an other important banana 
supplier.  It could now be considered by CRTA as well.  The EC hoped that those remarks clarified 
further that the EC intended to rebind and thus  implement the rulings and recommendations of the 
Appellate Body Report. 
                                                     
 
8 Appellate Body Report, para. 475. WT/DSB/M/261 
Page 18  
 
70. The representative of Ecuador
 said that his country did not agree with the EC statement, 
which contained a number of errors.  First, the EC did not take into account the losses of Ecuador 
since 2006 and there had been substantial losses.  Ec uador wished to remind the EC that a recent 
decision of the Appellate Body stated that a unilate ral decision by a Member could not be interpreted 
as compliance, unless it was approved by the DSB.  A unilateral decision by the EC would be 
catastrophic in this case.  Finally, with regard to th e notifications of partnership agreements with the 
ACP countries, the EC forgot that those agreements still had to be ev aluated as to their consistency 
with Article XXIV of the GATT 1994.  Many of those agreements, for a number of years, had not benefited from a waiver that would have justified th em.  This represented even further failure by the 
EC to comply with its obligations in this case. 
71. The representative of Panama
 said that the 27 July Agreement had been concluded and all 
WTO Members were aware of this.  That Agreemen t would have settled all pending bananas disputes 
under the WTO.  The Appellate Body had confirmed Panama's legal position.  Any efforts by the EC 
to reopen the delicate balance that had been achieve d would compromise and aggravate the dispute.  
Panama hoped that the EC, in the coming weeks, woul d reconsider its position and finally resolve this 
long-standing dispute. 
72. The representative of the United States  said that his country took note of the EC's statements 
made at the present meeting and would refer those to  capital.  The United States was not in a position 
to agree with the EC's assertions relating to the a lleged effects of any new agreements or measures 
taken by the EC.  In this regard, the United States agreed with the statement by Ecuador recalling that 
there was no DSB finding that the EC had implemented the DSB's recommendations and rulings in 
the Bananas III dispute.   
73. The DSB took note  of the statements, and adopted  the Appellate Body Report contained in 
WT/DS27/AB/RW/USA and Corr.1 and the Panel Report contained in WT/DS27/RW/USA and 
Corr.1, as upheld by the Appellate Body Report.   
5. Appointment of Appellate Body members 
74. The Chairman  said that under this Agenda item, as he had announced at the informal DSB 
meeting held on 11 December 2008, he wished to s ubmit formally his proposal on this matter to the 
DSB for its consideration.  A copy of this pro posal was available as a room document.  Before 
introducing his proposal he would like to make so me observations.  He recalled that the second four-
year terms of Mr. Luiz Olavo Baptista and Mr. Gi orgio Sacerdoti, and the first term of Mr. David 
Unterhalter were all set to expire on 11 December  2009.  He drew attention to the communication 
from the Appellate Body of 12 November 2008, circ ulated in document WT/DSB/46, in which Mr. 
Luiz Olavo Baptista, the Chairman of the Appella te Body, had informed the Chairman of the DSB 
that he was compelled to resign from the office of Appellate Body member, owing to health reasons, 
with effect from 11 February 2009.  As all were aw are, the remainder of Mr. Baptista's second term 
would last for only ten months after 11 February 2009  and that the DSB would, in any event, have to 
decide, in the year 2009, on appointments of persons to serve on the Appellate Body.  He noted that it 
would be desirable for the Appellate Body to be composed of seven persons again as rapidly as 
feasible and for the person appointed to replace Mr. Ba ptista to serve a four-year term.  Finally as all 
knew, Mr. Unterhalter was eligible for a second fo ur-year term and had expressed his interest and 
willingness to be reappointed.  Therefore taking into  consideration the facts and circumstances which 
he had just outlined, the Chairman proposed that the DSB agree to the following:   "(i) to carry out a 
single selection process for the two positions in the Appellate Body presently held by Mr. Baptista 
and Mr. Sacerdoti;  (ii) to set a deadline of 20 Ma rch 2009 for Members' nominations of candidates 
for these two positions;  (iii) in light of the excep tional circumstances resulting from the resignation of 
Mr. Baptista, to deem the term of the position to  which Mr. Baptista was appointed to expire on 
30 June 2009, and to agree that th e position previously held by Mr. Baptista be filled for a four-year 
term;  (iv) to follow the procedures set forth in  document WT/DSB/1, and, in accordance with them,  WT/DSB/M/261 
 Page 19 
 
 
to agree to establish a Selection Committee cons isting of the Director-General and the 2009 
Chairpersons of the General Council, the Goods Council, the Services Council, the TRIPS Council 
and the DSB, and to be chaired by the 2009 DSB Ch airperson;  (v) to request the Selection Committee 
to conduct interviews with candidates and to hear vi ews of delegations in April and the first half of 
May 2009, and to make its recommendations to the DSB by no later than the end of May, so that the 
DSB can take a final decision by mid-June 2009;  a nd (vi) to ask the DSB Chairman to continue to 
carry out consultations on the possible reappointment of Mr. Unterhalter".   
75. The Chairman  asked if the proposal that he had just r ead out was acceptable to all delegations.  
76. The representative of Uruguay  said that his country approached this matter from a different 
angle, and consequently arrived at a different solu tion.  In the first place, Uruguay considered that 
vacancies in the Appellate Body must be filled immediately and for the remainder of the term.  
Second, in Uruguay's view, an incomplete Appella te Body was not a good thing, and Uruguay did not 
share the view that there would be no problem in ensuring the proper and efficient functioning of the Appellate Body pending the completion of the pr ocess, as suggested by the Chairman.  On the 
contrary, Uruguay could confirm, on the basis of experience, that it was not impossible that the 
Appellate Body could malfunction if the vacancy left by  Mr. Baptista did not have  to be filled before 
the middle of June 2009, as suggested by the Chairman.  Uruguay would have preferred the immediate appointment of a replacement for Mr. Bap tista, taking advantage of the 90 days left until 
11 February 2009.  It would have also liked to see that person appointed only for the remainder of 
Mr. Baptista's term, as set forth in Article 17. 2 of the DSU.  However, while Uruguay would not 
oppose the Chairman's proposal, it would like to ha ve its position reflected in the minutes of the 
present meeting to ensure that this solution did not constitute a precedent for the future. 
77. The DSB took note
 of the statements and agreed  to the Chairman's proposal.  
78. The Chairman  thanked delegations and said that, at this point, he wished to recall that, in 
accordance with the procedures that  had just been agreed to, nominations shall be submitted by 
Members by no later than close-of-business on 20 Ma rch 2009.  As had been done in the past, the 
nominations, along with the curricula vitae of the nominees, should be sent to the Chairman of the 
DSB in care of the Council and TNC Division.  This  information would then be circulated to all 
Members as Job documents.  He would also like to ta ke this opportunity to inform delegations that in 
the past week he had received a letter from Braz il announcing that once the DSB took a decision on 
the procedures for appointment of Appellate Body members, Brazil would present its candidate.  Of 
course since the DSB had already taken a decision on this matter, Brazil was welcome to send its 
formal nomination.  
79. The DSB took note  of the statement. 
 
__________