RESTRICTEDWORLD TRADE
ORGANIZATIONWT/DSB/M/40
18 February 1998
(98-0579)
Dispute Settlement Body
16 January 1998
MINUTES OF MEETING
Held in the Centre William Rappard
on 16 January 1998
Chairman:  Mr. Wade Armstrong (New Zealand)
Subjects discussed: Page
1. India - Patent protection for pharmaceutical and agricultural chemical products ......... 1
- Report of the Appellate Body and Report of the Panel .................................... 1
2. United States - Anti-dumping duty on dynamic random access memory
semiconductors (DRAMS) of one megabyte or above from Korea .............................. 9
- Request for the establishmen t of a panel by Korea .......................................... 9
3. United States - Measures affectin g textiles and apparel products ................................. 9
- Statement by Hong Kong, China ...................................................................... 9
4. Election of Chairperson ................................................................................................ 10
1. India - Patent protection for pharmaceutical and agricultural chemical products
- Report of the Appellate Body (WT/DS 50/AB/R) and Report of the Panel
(WT/DS50/R).
The Chairman drew attention to the communi cation from the Appellate Body contained in
document WT/DS50/8 transmitting the Appellate Bo dy Report in "India - Patent Protection for
Pharmaceutical and Agricultural Chemical Products", which had been circulated in accordance with
Article 17.5 of the DSU.  He said that in accordance with the Decision on Procedures for the
Circulation and Derestriction of WTO documents contained in WT/L/160/Rev.1, the Reports had
been circulated as unrestricted documents.  He recalled that Article 17.14 of the DSU required that:
"An Appellate Body Report shall be adopted by th e DSB and unconditionally accepted by the parties
to the dispute unless the DSB decides by consensu s not to adopt the Appellate Body Report within
30 days following its circulation to the Members.  This adoption procedure is without prejudice to the
right of Members to express their views on an Appellate Body Report."
The representative of the United States expressed her country's satisfaction that the Appellate
Body had upheld the Panel's conclusions that India had not fulfilled its obligations under Article 70.8
and 70.9 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  In
particular, with respect to Article 70.8 of the TRIPS Agreement, the Appellate Body had found that
India had not established a means that adequately preserved the novelty and priority of product patent
applications for pharmaceutical and agricultural chemical inventions.  According to the AppellateWT/DSB/M/40
Page 2
Body, India's current method for receiving such patent applications was inconsistent with
Article 70.8(a) of the TRIPS Agreement.  With respect to Article 70.9 of the TRIPS Agreement, the
Appellate Body had found that India had an obligation with effect from 1 January 1995, to pass
legislation to establish a system of exclusive marketing rights, and had failed to fulfil that obligation.
Consequently, the Appellate Body had affirmed the Panel's conclusion that India was in violation of
Article 70.9 of the TRIPS Agreement.
At the present meeting, her delegation requested that the DSB adopt the Appellate Body
Report in accordance with Article 17.14 of the DSU.  Moreover, the United States expected India to
comply promptly and fully with the rulings and recommendations of the Panel and the AppellateBody.  India had to do this by amending its laws to provide a legally sound mailbox system for filing
patent applications and a system for granting exclusive marketing rights for qualifying products.  The
Panel and the Appellate Body had found that India should have been in compliance with the
obligations of Article 70.8 and 70.9 of the TRIPS Agreement as of 1 January 1995.  After such a
lengthy period of non-compliance, there was no basis for any significant delay in implementing theseobligations.  Her delegation appreciated the careful work of the Panel and the Appellate Body and
looked forward to India's prompt implementation of the rulings and recommendations of the Panel
and the Appellate Body Reports.
The representative of India said that his country had recognized the fact that the Panel and the
Appellate Body Reports constituted important co ntributions which highlighted explicitly and
implicitly the complexities of the transitional provis ions of the TRIPS Agreement.  The entire text of
this Agreement had been newly negotiated in the Uruguay Round and it occupied a relatively self-
contained sui generis  status in the WTO Agreement in spite of being an integral part of the WTO
system.  This was the first dispute regarding the TRIPS Agreement before the DSB and the adoption
of the Reports would have significant implications for the WTO, especially for developing-country
Members with regard to their obligations under the transitional provisions of the TRIPS Agreement.
In light of the importance of the Panel and the Appellate Body Reports, it was his duty to
express India's views thereon which should be fully recorded pursuant to Articles 16.3 and 17.14 of
the DSU.  Since Members that had not been parties to the dispute or third parties could be affected bythe rulings and interpretations contained in the Reports, all delegations  might wish to consider the
implications of the Reports upon their adoption.  In this context, he wished to highlight what India
perceived as serious issues or legitimate concerns regarding certain findings and observations
contained in the Reports.
This dispute had essentially centred on two Articles, namely Articles 70.8 and 70.9 of the
TRIPS Agreement.  Article 63 of the TRIPS Agreement had been considered in connection with
Article 70.8 of the TRIPS Agreement.  Prior to consideration of the specific Articles, he wished to
deal with a matter of serious concern to India, namely, the Panel's observations with regard tostandards applicable to interpretation of the TRIPS Agreement contained in Section C of the Panel
Report.
1
According to the Panel, the TRIPS Agreement should be interpreted to protect reasonable
expectations of Members regarding future conditions of competition.  Based on this concept, the
Panel had introduced into the TRIPS Agreement an obligation to accord inventors legal assurancesduring the transitional period that should be accorded only at the end of that period.  The Panel had
ruled that Article 70.8 of the TRIPS Agreement required India to eliminate "...any reasonable doubts
as to whether mailbox applications and eventual patents based on them could be rejected or
invalidated..."
2, with respect to pharmaceutical and agricultural chemical products.  This interpretation
would have effectively, if not explicitly, imposed on India an obligation to already provide in its
                                                     
1WT/DS50/R, p. 47.
2Ibid. para. 7.29.WT/DSB/M/40
Page 3
domestic law for the future patentability of pharmaceutical and agricultural chemical products
although the transitional provisions of the TRIPS Agreement required India to make such products
patentable only in 2005.
India was satisfied that the Appellate Body had taken into account its reservations with regard
to the Panel's findings on the subject of the interpretation of the TRIPS Agreement, and had
completely rejected the Panel's approach. In particular, it was satisfied that the Appellate Body hadhighlighted the fact that the Panel's invocation of the legitimate expectations of Members relating to
conditions of competition merged the legally distinct basis for violation  and non-violation  complaints
under Article XXIII of the GATT.  The Appellate Body had pointed out that: "The legitimate
expectations of the parties to a treaty are reflected in the language of the treaty itself.  The duty of a
treaty interpreter is to examine the words of the trea ty to determine the intentions of the parties.  This
should be done in accordance with the principles of treaty interpretation set out in Article 31 of the
Vienna Convention .  But these principles of interpretation neither require nor condone the imputation
into a treaty of words that are not there or the importation into a treaty of concepts that were not
intended."
3  The Appellate Body had reversed the Panel's ruling and had confirmed that India was
entitled to delay the patentability for pharmaceutical and agricultural chemical products until
1 January 2005.  This ruling of the Appellate Body should ensure that, in the future, panels would not
create new obligations under the TRIPS Agreement on the basis of legal concepts not reflectedtherein.  However, after providing such an expos ition on the general interpretative issue, namely,
standards applicable to interpretation of the TRIPS Agreement, the Appellate Body appeared to have
slightly deviated from its own standards in its consideration of Articles 70.8 and 70.9 of the TRIPS
Agreement.
Currently, India did not provide patents for pharmaceutical and agricultural chemical products
and under the TRIPS Agreement it was entitled to a transition period of ten years for providing such
product patents.  However, under Article 70.8(a) of the TRIPS Agreement, as from the date of entry
into force of the WTO Agreement, 1 January 1995, India was required to provide a means by which
applications for patents for such inventions could be filed.  His delegation appreciated that the Panel
had pointed out in paragraph 7.23 of its Report that the only obligation India had to assume underArticle 70.8 was that of subparagraph (a) i.e. the obligation to provide a means by which applications
for product patents in pharmaceutical and agricultural chemicals could be filed.  The Panel had
pointed out that obligations under subparagraphs (b) and (c) of Article 70.8 of the TRIPS Agreement
would become binding on India only by 1 January  2005.  The issue in this dispute had not been
whether India had a mailbox system.  Such a system had been established in 1995, and had been usedactively and extensively.  The issue had been whether this system was consistent with Indian patent
law.  In paragraph 7.33 of its Report, the Panel had cited Article 1.1 of the TRIPS Agreement which,
inter alia , provided that:  "Members shall be free to determine the appropriate method of
implementing the provisions of this Agreement within their own legal system and practice."  The
Panel had, therefore, observed that it was up to India to decide how to implement its obligations under
Article 70.8 of the TRIPS Agreement, and had stated that the mere fact that India relied on an
administrative practice to receive mailbox applications without legislative changes did not constitutein itself a violation of India's obligations under subparagraph (a) of Article 70.8 of the TRIPS
Agreement.  In the same paragraph, the Panel had also noted that the lapse of the Patents
(Amendment) Ordinance 1994 which had been promulgated for the purpose of specifically addressing
these obligations did not automatically mean the lack of a means for filing patent applications for
pharmaceutical and agricultural chemical products in India.  His country agreed with theseobservations.  However, in paragraph 7.29, the Panel had stated as follows:  "It is our view that this
means that Article 70.8(a) requires the developing countries in question to establish a means that not
only appropriately allows for the entitlement to file mailbox applications and the allocation of filing
and priority dates to them, but also takes away any reasonable doubts as to whether mailbox
applications and eventual patents based on them could be rejected or invalidated because, at the filing
                                                     
3WT/DS50/AB/R, para. 45.WT/DSB/M/40
Page 4
or priority date, the matter for which protection was sought was unpatentable in the country in
question."  It appeared that the Panel had come to this erroneous conclusion partly due to its incorrect
interpretation of the TRIPS Agreement, which had been overturned by the Appellate Body, and partly
due to its misinterpretation of Indian domestic law.
In its written and oral submissions before the Appellate Body, India had made considerable
efforts to distinguish between:  (i)  the evaluation of the effect of an Indian statute to determine
whether it violated WTO provisions;  and (ii)  a decision regarding a municipal law issue of whether
India's action was valid under its domestic law.  The first was necessary for the effective functioning
of the WTO.  The second was the responsibility of the Indian Government upholding India's
Constitution and its laws as a sovereign government.  In India's view, the Appellate Body Report had
not dealt with this crucial distinction in a comprehensive manner, which resulted in avoidable
confusion and consequential misinterpretation of India's obligations under Article 70.8 of the TRIPS
Agreement.
The Appellate Body had upheld the Panel's in terpretation of Article 70.8(a) of the TRIPS
Agreement that India's mailbox system required a sound legal basis.  However, it had deleted the
portion of interpretation which provided that India had an obligation to "eliminate any reasonable
doubts" regarding the validity of its mailbox system on the ground that it was entitled to delay the
grant of product patents until 1 January 2005.  India had argued before the Appellate Body that theinterpretation on the elimination of any reasonable doubts had influenced the Panel's appreciation of
the evidence with regard to the soundness of the legal basis of India's mailbox system.  It was evident
from the Appellate Body's analysis of the issue of the burden of proof that the Panel's findings had
been affected by this part of its interpretation of Article 70.8 of the TRIPS Agreement.
According to the Appellate Body, the Pane l Report had demonstrated that, "... the
United States put forward evidence and arguments that India's "administrative instructions" pertaining
to mailbox applications were legally insufficient to prevail over the application of certain mandatory
provisions of the Patents Act".
4  Yet, the only evidence that the United States had provided was its
own reading of the text of the Patents Act.  Nevert heless, the Appellate Body had found that, "... after
properly requiring the United States to establish a prima facie  case and after hearing India's rebuttal
evidence and arguments, the Panel concluded that it had "reasonable doubts" that the "administrative
instructions" would prevail over the mandatory provisions of the Patents Act if a challenge were
brought in an Indian court".5 According to the Appellate Body, this was the appropriate burden of
proof even when reviewing the validity of a Member's action under its domestic law.  In India's view,
the Appellate Body had erred in ignoring India's interpretation of its laws and in concluding that, "...we are not persuaded that India's "administrative instructions" provide a sound legal basis to preserve
novelty of inventions and priority of applications as of the relevant filing and priority dates".
6
The most problematic aspect of the Report was its conclusion that the Panel's reasonable
doubt about the soundness of the legal basis of India's mailbox system was sufficient to conclude that
India had not complied with Article 70.8(a) of the TRIPS Agreement.  Neither the Panel nor the
Appellate Body had considered it relevant that , between 1 January 1995 and 15 October 1997, India
had received over 1,924 mailbox applications and that none had been rejected or invalidated.  TheAppellate Body had not addressed India's written arguments on the appropriate standard of proof in
adjudging the validity under India's domestic law of its mailbox system, and the appropriate level of
deference that a panel should give to the determination of a sovereign Member that its action
                                                     
4WT/DS50/AB/R, para. 74.
5Idem.
6WT/DS50/AB/R, para. 70.WT/DSB/M/40
Page 5
complied with its laws.  In its written submissi on, India had noted that previous GATT panels had
given the "benefit of the doubt" to Canada in the Gold Coins  case7 and to the United States in the Malt
Beverages  case8 in the context of the interpretation of their domestic laws.
India believed, that as demonstrated in paragraph 62, the Appellate Body seemed to have
been influenced in its assessment of India's mailbox system, established through administrative
instructions, by the fact that administrative instructions had not been the initial means chosen by Indiato meet its obligations under Article 70.8(a) of the TRIPS Agreement. India considered that this was
particularly unfortunate, since it had argued before the Appellate Body that the fact that India had
initially selected one route for complying with its obligations under Article 70.8 of the TRIPS
Agreement, and had subsequently taken recourse to another route, did not, ipso facto , make the
subsequent route less valid.  In fact, the Panel had clearly stated that the lapse of the Patents
(Amendment) Ordinance 1994 did not automatically mean the lack of a means for filing patent
applications for pharmaceutical and agricultural chemical products in India.
India had argued before the Appellate Body that panels and the Appellate Body should give
special deference to the determination of Members with regard to their domestic law.  This was not
the same as deference to a Member's interpretation of WTO provisions, or deference to the
determination of whether a particular factual situation met WTO standards. In this case, the issue
before the Appellate Body had been the level of de ference to be given to the determination of the
Member with regard to its domestic law.  The Appellate Body seemed to have overlooked the fact that
India was not advocating a policy of total deference.  It had merely recommended that the burden of
demonstrating that a measure taken by a Member to comply with its WTO obligations was invalid
under its domestic law should be placed on the Member challenging the validity of such a measure,
and that the Member should be required to provide compelling evidence of such invalidity.  In India'sview, the United States had not provided such compelling evidence of invalidity.
India believed that the Panel had committed a legal error in ruling that India had failed to
observe transparency provisions contained in Article 63.1 and 2 of the TRIPS Agreement.  This ruling
was surprising not only because the Panel's terms of reference had not mentioned Article 63 of the
TRIPS Agreement, but also because the United States had requested a ruling on this provision only inthe alternative, if the Panel were to find the mailbox system to be consistent with the TRIPS
Agreement.  India was not concerned about the ruling on Article 63 of the TRIPS Agreement as such
but about the recommendation that followed from it, i.e. the recommendation that the existing
mailbox system, found to be inconsistent by the Panel, should be notified.  There was no example in
the history of the GATT and the WTO that a panel had recommended the notification of a measurethat needed to be modified.  India believed that such a requirement should not have been imposed.  It
also believed that a panel should make findings exclusively on the issues presented to it by the parties
to the dispute.
It was particularly surprising that in paragraph 6.11, the Panel had justified its ruling on
Article 63 of the TRIPS Agreement, which was a claim made by the United States only in the
alternative, as follows:  "Rather, in view of the Appellate Body's observation on the limitation of its
mandate under Articles 17.6 and 17.13 of the DSU in its recent Report on the Periodicals Case , the
Panel felt all the more strongly the need to avoid a legal vacuum in the event that, upon appeal the
Appellate Body were to reverse the Panel's findings on Article 70.8".  It was perhaps the first time that
a panel had ruled on a claim in the alternative in anticipation that its ruling on the main claim of the
complaining party would be overturned.
                                                     
7Panel Report, Canada - Measures Affecting the Sale of Gold Coins, L/5863.
8Panel Report, United States - Measures Affecting Alcoholic and Malt Beverages, DS23/R
(BISD 39S/206).WT/DSB/M/40
Page 6
In light of the above, India was satisfied with the observations of the Appellate Body
contained in paragraph 90.  He hoped that in future those invoking dispute settlement provisions
would pay special attention to this paragraph which read as follows:  "With respect to Article 63, the
convenient phrase, "including but not necessarily limited to", is simply not adequate to "identify the
specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly" as required by Article 6.2 of the DSU.  If this phrase incorporatesArticle 63, what Article of the TRIPS Agreement does it not incorporate?  Therefore, this phrase is
not sufficient to bring a claim relating to Article 63 within the terms of reference of the Panel".  India
believed that this ruling would ensure that the phrase, "including but not necessarily limited to",
would not be as frequently used in the future as it had been in the recent past.
With regard to Article 70.9 of the TRIPS Agreement, at issue was not whether India had
denied exclusive marketing rights to eligible products.  So far, India had not received any request for
the granting of such rights.  The issue was whether India was required to establish in its domesticlegislation a system for the granting of such rights before any product became eligible.  Article 70.9 of
the TRIPS Agreement did not stipulate the creation of a system for the granting of exclusive
marketing rights.  Nevertheless, the Appellate Body, which in previous cases had emphasized that the
interpretation of WTO agreements had to be based on their terms, and which in this case had stated
that the duty of a treaty interpreter was to examin e the words of the treaty to determine the intentions
of the parties, had found that the establishment of such a system was required under Article 70.9 of
the TRIPS Agreement.  The text of Article 70.9 established an obligation to provide exclusive
marketing rights to particular products after specified events had occurred.  However, the Panel had
interpreted this provision as if it obliged Members to authorize their competent authorities to grant
exclusive marketing rights whether or not rights were due.  Therefore, the Panel had found the merelack of such authority to be sufficient to consider that India had not complied with Article 70.9 of the
TRIPS Agreement.  India had requested the Appellate Body to examine the Panel's interpretation in
accordance with the principles of the Vienna Convention:  i.e. on the basis of the terms of
Article 70.9, its context and objective.  India had pointed out that many provisions in the TRIPS
Agreement, in particular Articles 42-48, explicitly provided for the creation of the authority to accordrights under domestic law.  However, there was no wording to that effect in Article 70.9 of the TRIPS
Agreement and the purpose of this provision was to permit Members to postpone legislative changes
in a sensitive area.  The Appellate Body had repeatedly emphasized that the interpreter must examine
the language of the treaty.  Moreover, it had rejected the notion of reasonable expectations which the
Panel had used to justify the expansion beyond its terms of the obligations under Article 70.9 of theTRIPS Agreement.  Therefore, it would have been logical for the Appellate Body to reverse the
Panel's ruling on Article 70.9 of the TRIPS Agreement.
 In response to India's appeal with regard to Article 70.9 of the TRIPS Agreement, the
Appellate Body had made three findings.  The first was that Article 70.9 had entered into effect on
1 January 1995.  This was a matter on which the United States and India had agreed.  The dispute had
related to the content of this provision, not to the date of its entry into effect.  The second was that,
currently, India did not have a system for the granting of exclusive marketing rights.  Again, this was
not in dispute.  The question was whether Article 70.9 of the TRIPS Agreement required India to have
such a system.  The third finding was that India's arguments had to be examined in light of
Article XVI:4 of the WTO Agreement, according to which each Member had to ensure the conformity
of its laws, regulations and administrative procedures with its obligations under the WTO Agreement.
However, the Appellate Body had not explained how this provision could determine the scope of the
obligations with which the domestic law must be brought into conformity.  Article XVI:4 of the WTOAgreement was only relevant once it had been determined that there was an obligation under one of
the WTO agreements that required a modification in domestic law.  Having made these three findings,
the Appellate Body had rejected India's appeal.  The interpretative issues which India had submitted
to the Appellate Body had not been examined.  It was particularly distressing that the Appellate BodyWT/DSB/M/40
Page 7
had not considered it necessary to deal with India's submission to the effect that the Panel's
interpretation of Article 70.9 of the TRIPS Agreement had the consequence that transitional
arrangements would allow developing countries to postpone legislative changes in all fields of
technology except in the most sensitive ones.  He re gretted that the Appellate Body had not taken into
account the point made by India to the effect that the Panel's ruling had ignored the implicit option
available to developing countries in the TRIPS Agreement to reduce the transition period, if they sowished, and to provide product patents even before the end of the transition period instead of having
to accept the obligation of providing exclusive ma rketing rights.  India was surprised that the
Appellate Body had chosen to read into Article 70.9 the phrase "as from the date of entry into force of
the WTO Agreement" found in Article 70.8(a), thus ignoring its observations on the subject of general
interpretation of the TRIPS Agreement.
In connection with Article 70.9 of the TRIPS Agreement, he also wished to consider
paragraphs 7.62 and 6.19 of the Panel Report. During the proceedings, India had pointed out that it
considered it inappropriate and procedurally indefensible for the Panel to place reliance onunsubstantiated and contested evidence by interested companies of one of the parties to the dispute
presented at the time of the second substantive meeting.  In its second written submission to the Panel,
the United States had submitted a document in which it had been claimed that one company was in a
position to request exclusive marketing rights in India.  As indicated in the fourth indent of
paragraph 4.29 of the Panel Report, India had pointed out that its research had not revealed any casein which a product for which a patent application had been filed after 1 January 1995, had received
marketing approval in India and had become eligible for exclusive marketing rights under
Article 70.9.  India had also pointed out that the letter from Dr. H.E. Bale, Jr., provided by the
United States in its second written submission had merely stated that one company was ready to
request the granting of exclusive marketing rights from the Indian health authorities.  It had alsopointed out that this request was obviously a request for marketing approval and not for exclusive
marketing rights.  In paragraph 6.19, the Panel had stated that India had presented no counter-
evidence other than the comment contained in the fourth indent of paragraph 4.29.  His delegation
was surprised about this comment since India could not provide any evidence to establish that it had
not received a request for exclusive marketing rights.  Those who claimed that they had made a
request for exclusive marketing rights should produce necessary evidence and prove that the
conditions for obtaining exclusive marketing rights had been met.  It was surprising that the Panel had
given so much consideration to a document provided by the United States along with its second
written submission.
India recognized that the final results of the Panel proceedings were substantially more
limited than those originally sought by the United States.  It also recognized that the Appellate Body
had rectified some of the errors contained in the Panel Report.  However, the Appellate Body's
conclusions were particularly disappointing because India had always accepted its obligations underArticle 70.8 and 70.9 of the TRIPS Agreement.  Th is dispute was only about how and when India
should carry out these obligations.  The Appellate Body's interpretations of Articles 70.8 and 70.9 of
the TRIPS Agreement had reinforced and accelerated the obligations of developing countries with
respect to transitional arrangements that had been intended to provide political flexibility on the
sensitive issue of patents for pharmaceutical and agricultural  chemical products.  India regretted theAppellate Body's findings particularly as it had not disputed its obligations under the Agreement and
the only issue was the manner of implementation.  The overall effect of the Reports appeared to be a
certain amount of dilution of what developing countries, like India, had considered to be the
flexibilities available to them under the transitional provisions of the TRIPS Agreement.
Notwithstanding its reservations and concerns about certain rulings and observations
contained in the Panel and the Appellate Body Reports, India recognized the important contributions
of the Reports in promoting a serious and informed debate with regard to the transitional provisions of
the TRIPS Agreement.  He thanked the Chairman and the members of the Panel and the AppellateBody for their work and their significant contribution in the new areas of the TRIPS Agreement asWT/DSB/M/40
Page 8
well as the WTO and the Appellate Body Secretariats for their assistance in the proceedings.  He also
thanked the US delegation for maintaining an atmosphere of professionalism as well as cordiality and
goodwill in the proceedings.
India recognized that the Appellate Body members had to work under time pressure and that
they had to deal with sensitive legal issues.  It was understandable that, unlike panels, the Appellate
Body reports did not contain all the points made by the parties to the dispute.  However, if theobjective was to maintain a vibrant and credible dispute settlement system, it was necessary that
outside legal experts not involved in a dispute could study the Appellate Body reports and provide
their comments and views through articles published in  journals.  In his view, the process of studying
the Appellate Body reports by non-partisan legal experts would be considerably facilitated if the
submissions made by the parties to the dispute were attached to the reports as annexes.  He recognized
that this was a matter for the Appellate Body to decide, but he wished to take this opportunity to make
this suggestion through the Chairman fo r consideration by the Appellate Body.
India's faith in and commitment to the multilateral process was well-known.  India believed in
the resolution of disputes within the framework of the dispute settlement mechanism.  In this context,
he recalled the following statement made in the DSB wi th regard to the salient features of the dispute
settlement system:  "The dispute settlement mechanism contains a number of basic principles outlined
in Article 3.2 of the DSU which together with Article IX and X of the WTO Agreement constitutes abackbone of the system.  The main objectives of the dispute settlement system were: (i) to help create
legal certainty and predictability in international trade by strictly respecting the legal agreements
accepted by Members; (ii) to preserve the rights and obligations of Members under the covered
agreements, not only by ensuring compliance by Members with their obligations, but also by
upholding their legitimate rights of action against unjustified allegations; (iii) to permit clarificationsof existing legal provisions in accordance with custom ary rules of international law, in particular the
Vienna Convention on the Law of Treaties.  However, interpretations to fill gaps and the creation of
additional obligations were reserved for Members, not for panels or the Appellate Body."
9  I t  w a s
against the background of these objectives of the dispute settlement system and limitations of panels
and the Appellate Body that he had highlighted certa in issues and concerns arising from the reports.
His delegation urged the DSB to bear in mind these issues and concerns while considering the
adoption of the reports.
The representative of Colombia thanked India for its detailed statement.  Her delegation
supported India's proposal concerning the need to fi nd ways to disseminate written submissions made
by the parties to the Appellate Body.  The strict  time-limits did not permit the Appellate Body to
follow procedures similar to those of panels, whereby the parties to the dispute and third parties had
an opportunity to review and submit comments on the summary of their arguments.  Therefore, India's
proposal to disseminate written submissions made by the parties to the Appellate Body could help
experts and academics to analyze the WTO legal system.  Colombia supported India's initiative to
request the Chairman to make this proposal for consideration by the Appellate Body.
The representative of Switzerland said that his country supported the Panel's conclusions,
upheld by the Appellate Body, that India had not fully implemented its obligations under Article 70.8
and 70.9 of the TRIPS Agreement.  Switzerland wi shed to know how Indi a would implement the
conclusions of the Panel upheld by the Appellate Body.  His delegation believed that India would
inform the DSB within the next 30 days of its inte ntions in respect of implementation in accordance
with Article 21.3 of the DSU.  In particular, his co untry wished to know how foreign applicants would
be informed of the system that India would put in place, and how India would take into account theinterests of those persons who would have filed an application had the proper system been in place.
                                                     
9WT/DSB/M/37, p. 15.WT/DSB/M/40
Page 9
The DSB took note of the statements and adopted  the Appellate Body Report in
WT/DS50/AB/R and the Panel Report in WT/DS50/ R as modified by the Appellate Body Report.
2. United States - Anti-dumping duty on dynamic random access memory semiconductors
(DRAMS) of one megabyte or above from Korea
- Request for the establishment of a panel by Korea (WT/DS99/2)
The Chairman recalled that the DSB had considered this matter at its meeting on
18 November 1997, and had agreed to revert to it.  He then drew attention to the communication from
Korea contained in document WT/DS99/2.
The representative of Korea said that on 6 November 1997, his country had requested the
establishment of a panel to examine its complaint with regard to this matter.  Subsequently, the
request for a panel had been circulated in document WT/DS99/2 on 7 November 1997.  At the DSB
meeting on 18 November 1997, the United States had not consented to the establishment of a panel.
However, since then no progress had been made towards the resolution of this issue.  Therefore,pursuant to Article 6.1 of the DSU, Korea had requested the inclusion of its request for a panel on the
agenda of the present meeting.  He requested that the DSB establish a panel with standard terms of
reference as set out in Article 7 of the DSU.
The representative of the United States said that her delegation accepted Korea's request for
the establishment of a panel.  In the view of the Un ited States in determining not to revoke the anti-
dumping order on the DRAMS from Korea, the proced ures and standards used by the Department of
Commerce as well as its application of the facts to the law had been in full conformity with the Anti-
Dumping Agreement and the GATT 1994.
The DSB took note of the statements and agreed  to establish a panel in accordance with the
provisions of Article 6 of the DSU with standard terms of reference.
3. United States - Measures affecting textiles and apparel products
- Statement by Hong Kong, China
The representative of Hong Kong, China, sp eaking under "Other Business", recalled that at
the DSB meeting on 30 July 199710 ,his delegation had made a statement regarding the consultations
requested by the European Communities with the United  States with regard to changes in the US rules
of origin for textiles and apparel products (WT/DS85/1).  Hong Kong, China had an interest in this
matter.  His delegation had then asked whether a mutually agreed solution had been reached by the
parties to the dispute in this case as it had been reported in the media and, if so, when such a solution
would be notified under Article 3.6 of the DSU.  He recalled that in accordance with Article 3.6 of the
DSU:  "Mutually agreed solutions to matters formally raised under the consultations and disputesettlement provisions of the covered agreements shall be notified to the DSB and the relevant councils
and committees, where any Member may raise any point relating thereto."
Nearly six months had elapsed since then, but the DSB had not been informed of
developments by the parties concerned.  He therefore wished to take the opportunity at the present
meeting to enquire again if a settlement had been reached and, if so, when a notification would be
forthcoming.  He believed that, as demonstrated in  this case, there was an institutional or systemic
                                                     
10WT/DSB/M/36.WT/DSB/M/40
Page 10
issue arising from the operation of Article 3.6 of the DSU.  To the extent that mutually agreed
solutions had multilateral implications, they were ju stifiably matters of concern to Members.  In his
delegation's view, whether such concerns were adequately addressed under the provisions of
Article 3.6 of the DSU or whether more should be done, inter alia , to enhance transparency, was a
question which required further consideration especially during the review of the DSU.
The representative of the United States said that her country was a long-standing advocate for
greater transparency.  The United States and the European Communities had notified Members who
had requested participation in the consultations that a settlement had been reached.  As far as the
reference to Article 3.6 of the DSU was concerned, the United States was currently working with the
Communities on a timing for notification and the nature of the actual agreement.
The representative of the European Commun ities wished to confirm that the Communities
were in the process of consultations with the United  States with the view to examining the possibility
of a notification.
The representative of Japan supported the statement made by Hong Kong, China.  He
believed that transparency in the consultations under the DSU was very important.  His delegation
enquired as to the reasons delaying this notification.
The DSB took note of the statements.
4. Election of Chairperson
The Chairman, speaking under "Other Business", recalled that in accordance with the rules of
procedure for meetings of the DSB (WT/DSB/9), the election of its chairperson should take place at
the first meeting of the year.  Currently, the Chairman of the General Council was conducting
informal consultations on a slate of names for appointment of chairpersons to WTO bodies.  It was
expected that proposed nominations be submitted for approval by the General Council at its firstmeeting in 1998 which is scheduled for 19 February.  He therefore proposed that the DSB formally
elect its Chairperson at its next meeting following the meeting of the General Council to be held on
19 February.
The DSB took note of this information.
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