RESTRICTEDWORLD TRADE
ORGANIZATIONWT/DSB/M/91
30 November 2000
(00-5170)
Dispute Settlement Body
23 October 2000
MINUTES OF MEETING
Held in the Centre William Rappard
on 23 October 2000
Chairman:  Mr. S. Harbinson (Hong Kong, China)
Prior to the adoption of the agenda, the item concerning the Panel Report on "Thailand - Anti-
Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from
Poland" was withdrawn from the agenda, following Thailand's decision to appeal the Panel Report.
Also the item concerning the Panel Report on "European Communities - Measures Affecting Asbestos
and Asbestos-Containing Products" was withdrawn from the agenda, following Canada's decision to
appeal the Panel Report.
Subjects discussed: Page
1. Surveillance of implementation of recommendations adopted by the DSB.........................2
(a) European Communities - Regime for the importation, sale and distribution of
bananas:  Status report by  the European Communities...............................................................2
(b) Japan - Measures affecting agricultura l products: Status report by Japan................................10
(c) Canada - Measures affecting the importation of milk and the exportation of dairy
products:  Status re port by Canada ...........................................................................................10
(d) India - Quantitative restrictions on imports of agricultural, textile and industrial
products:  Status re port by India .............................................................................................. .12
(e) Turkey - Restrictions on imports of textile and clothing products:  Status report by
Turkey......................................................................................................................... ..............12
2. Implementation of the reco mmendations of the DSB..........................................................13
(a) United States – Anti -Dumping Act of 1916 .............................................................................13
(b) Canada – Term of patent protection.......................................................................................... 13
3. United States – Definitive safeguard measures on imports of circular welded
carbon quality line pi pe from Korea.....................................................................................14
(a) Request for the establishm ent of a panel by Korea...................................................................14
4. India – Measures affecting expo rt of certain commodities .................................................15
(a) Request for the establishment of a panel by the European Communities.................................15WT/DSB/M/91
Page 2
5. India – Measures affecting the automotive  sector................................................................15
(a) Request for the establishment of a panel by the European Communities.................................15
6. Philippines – Measures affecting trade and investment in the motor vehicle
sector ......................................................................................................................... ...............17
(a) Request for the establishment of  a panel by the United States .................................................17
7. United States – Import prohibition of certain shrimp and shrimp products ....................19
(a) Recourse to Article 21.5 of the DSU by Malaysia....................................................................19
8. Mexico – Anti-dumping investigation of high-fructose corn syrup (HFCS) from
the United States .............................................................................................................. .......22
(a) Recourse to Article 21.5 of th e DSU by the United States .......................................................22
9. Proposed nomination for the indicative list of governmental and
non-governmental panelists ...................................................................................................23
10. Canada - Patent protection of pharmaceutical products ....................................................23
(a) Statement by Canada ......................................................................................................... .......23
1. Surveillance of implementation of recommendations adopted by the DSB
(a) European Communities - Regime for the importation, sale and distribution of bananas:  Status
report by the European Communities
(b) Japan - Measures affecting agricultural products:  Status report by Japan
(c) Canada - Measures affecting the importation of milk and the exportation of dairy products:
Status report by Canada
(d) India - Quantitative restrictions on imports of agricultural, textile and industrial products:
Status report by India
(e) Turkey - Restrictions on imports of textile and clothing products:  Status report by Turkey
1. The Chairman recalled that Article 21.6 of the DSU required that "unless the DSB decides
otherwise, the issue of implementation of the recommendations or rulings shall be placed on the
agenda of the DSB meeting after six months following the date of establishment of the reasonableperiod of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue is
resolved".  He proposed that the five sub-items to which he had just referred be considered separately.
(a) European Communities - Regime for the importation, sale and distribution of bananas:  Status
report by the European Communities (WT/DS27/51/Add.12)
2. The Chairman drew attention to document WT/DS27/51/Add.12 which contained the status
report by the European Communities on its progress in the implementation of the DSB's
recommendations concerning its banana import regime.
3. The representative of the European Communitie s provided information concerning the way
ahead envisaged by the EC in this case.  He said that for a transitional period of time banana imports
should be regulated by tariff-rate quotas (TRQs) and managed on the basis of a "first come, first
served" (FCFS) system.  The FCFS system inte nded to ensure, on the one hand, an equal andWT/DSB/M/91
Page 3
non-discriminatory access to the EC's market and, on the other hand, to guarantee a regular supply of
bananas to the EC.  The EC considered the FCFS syst em to be straightforward and transparent.  The
system included:  (i) three quotas (A, B and C), which would be managed on a fortnightly or weekly
basis so as to ensure a regular import flow to th e EC's market and would be open for bananas of all
origins;  (ii) a requirement to commit bananas to th e vessel before submitting the declaration of intent
to import and to lodge a sufficiently high security, which was aimed at deterring speculation;  and
(iii) a pre-allocation procedure based on operators declaring their intention to import a specified
quantity.  The pre-allocation would be decided upo n when vessels were at sailing distance from
Europe.  The management of all three TRQs would be identical with a tariff preference for ACP
bananas.  However, it was understood that operators had to apply for the TRQs A, B or C.  The tariff
level proposed by the EC would not be prohibitive for bananas of non-ACP origin.  In case the
assessment proved to be incorrect, the in-quota ta riff for non-ACP bananas in the third tariff quota
would be reduced during the year, as necessary.
4. It was recognized that a FCFS system for the management of TRQs was WTO-compatible as
well as straightforward and transparent for all oper ators.  He underlined that the compliance panel,
established at the request of Ecuador pursuant to Article 21.5 of the DSU, had found that a FCFS
system was a WTO-compatible solution for the management of tariff-rate quotas.  Before the end ofthe transitional period, the EC would initiate GATT Article XXVIII negotiations with a view to
establishing a flat tariff system.  The EC's intention was, on the basis of the most up-to-date
information, to establish a tariff level which would provide a level of protection as close as possible to
that provided under the system of tariff quotas.  Thus, the balance of the market would be maintained
and suppliers would not suffer any loss of trading pr ospects.  The EC would now finalize its internal
decision-making process with a view to implemen ting the new regime rapidly.  The EC's proposal
was the result of very lengthy and in-depth consulta tions with all the parties involved in the dispute.
The EC had examined different options and, on the basis of comments received from the parties
concerned, it considered that this was the only option available which would enable it to take into
account different interests.  The EC would co ntinue to consult, however, the option under
consideration was the only option available.
5. The representative of Honduras expressed his country's disappointment that, as indicated in
the status report, the EC's intention was to put into effect a FCFS system.  As recognized by three EC
Commissioners in a press release dated 22 September 2000, the proposed system was part of a
"simultaneous examination" mechanism and, contrary to what was indicated in the status report, the
system was not transparent.  As Honduras had pointed out on many occasions, a FCFS system that
altered the conditions of competition and discriminated against bananas from Latin Americancountries violated the provisions of GATT 1994 and GATS, as had also been demonstrated in the
Banana III case.  Honduras was concerned about the statement in the status report that if a tariff level
proved prohibitive, the EC would reduce, as necessary, the in-quota tariff for bananas of a non-ACP
origin in the third-tariff quota.  The EC should not impose such a prohibitive tariff.  The EC had stated
that a change in the preference could be proposed only if it considered that the tariff level wasprohibitive and, only then, would it be possible to know whether those who objected to the proposal
were right or not.  He noted that the matter was closely related to a waiver for the new EC/ACP
Association Agreement.  Honduras could agree to a new waiver only if it considered that the level of
preferences under the new system was acceptable.
6. He noted that the status report did not provide any indications on progress.  It had been
submitted shortly after a meeting in Panama of Ministers responsible for Foreign Trade from
Honduras, Colombia, Costa Rica, Guatemala, Nicara gua, Panama and Venezuela.  The countries in
question had issued a statement
1 in which they had rejected the course of action taken by the EC.
They had underlined, once again, the importance of the production and successful marketing of
                                                     
1 Subsequently circulated in document WT/DSB/20.WT/DSB/M/91
Page 4
bananas for their economies, and had renewed their willingness to participate constructively, and in a
flexible manner in a transparent dialogue and negotiation.  He reiterated that, as indicated in the
statement, a FCFS system was not compatible with WTO rules and, if approved, it would only
prolong the dispute or could lead to another dispute.  The EC's proposal was not the only alternative.
Honduras believed that the Caribbean proposal could serve as a starting-point to enable the parties tofind a solution.  Honduras was willing to participate in negotiations if the intention was to seek a
solution that would take into account the interests of all parties, with the possibility for all the parties
to be heard.  At the same time, the EC should not insist on maintaining a proposal that had been
rejected on many occasions.  There was a need for flexibility in order to resolve this matter as soon as
possible.
7. The representative of Panama said that his country supported the statement made by
Honduras.  Panama was disappointed with the EC's status report and its statement that the proposal
was the result of consultations with all the parties concerned.  In Panama's view the proposal had been
made despite communications sent to the EC by the countries affected by the banana regime in which
they had indicated that the current proposal as well as previous proposals were WTO-inconsistent.  As
stated by Honduras, a meeting of Ministers for Fo reign Trade from Colombia, Costa Rica, Guatemala,
Honduras, Nicaragua, Panama and Venezuela had been held in Panama.  Those countries togetherrepresented more than 70 per cent of banana imports into the EC.  In their statement, the above-
mentioned countries had rejected the FCFS system proposed by the EC and had put forward as a good
basis for negotiations a proposal by Caribbean producers, which had previously been rejected by the
EC.  The Caribbean proposal had been accepted  by some ACP countries that benefited from
preferences provided by the EC.  There had also been some indications to the effect that the systemproposed by the EC would not provide adequate protection for those countries.  In addition to the
problem of inconsistency of the FCFS system, the EC had stated that the tariff level proposed by it
would not be prohibitive for the products of non-AC P origin.  This would be the case if it was
considered that EC products were not ACP products and would continue to enter into its territory.
Panama considered that for all Latin American banana-producing countries, the level suggested by theEC would be prohibitive.  Panama urged the EC to take into account the views expressed by
delegations in order to bring this dispute to an early conclusion.
8. The representative of Ecuador said that the info rmation provided by the EC with regard to its
new proposal was general.  He noted that neither the information submitted at the present meeting,
nor that provided in the past contained the necessary elements for a definitive assessment of the
proposal.  He hoped that the information needed fo r a comprehensive analysis would be provided by
the EC as soon as possible in order to determine whether the proposal was WTO-consistent and thusacceptable to Ecuador.  He reiterated that his country's preference was for a banana import regime that
eliminated tariff quotas and was based on a single tariff.  Such a tariff-only system involved fewer
distortions and injustices and allowed access for better-quality bananas on a more competitive basis to
the benefit of producers and consumers.  Since it wa s not possible to immediately apply the tariff-only
system, Ecuador was ready to support a system of tariff-rate quotas distributed by means of licencesgranted on a FCFS basis, provided that such a system was WTO-consistent.
9. At the 26 September 2000 DSB meeting, Ecuador had indicated that it was ready to accept a
transitional scheme based on tariff-rate quotas;  i.e. a scheme which would last sufficiently long for
the necessary negotiations to be held under Article XXVIII of GATT 1994.  This transitional scheme,
as suggested by the EC, could involve tariff-rate quotas that were non-discriminatory in respect oforigin and were distributed by means of licences allocated on a FCFS basis.  Due to a lack of
information on various points, it was not possible to understand the EC's intentions, in particular with
regard to the management of tariff-rate quotas and the distribution of licences.  Ecuador, therefore,
wished to seek some clarification.  First, with re gard to the system of distribution of import licences,
he said that various aspects of the proposal raised concerns and suggested that the new proposalcreated problems that could be magnified if the regulations for the distribution of licences sought toWT/DSB/M/91
Page 5
perpetuate the discriminatory situation that had existed thus far.  Ecuador therefore requested that the
EC provide an explicit account of how it would ensure that the new system did not reproduce the
existing discrimination.
10. Second, the legality of an import licence distribution system, whether it be based on a FCFS
method of allocating licences or on a method which reflected historical market share, largelydepended on the manner in which the operators entitled to participate in the system were to be
selected.  The EC had stated that it would not discriminate between new and traditional operators, but
it had not indicated how those operators would be selected or pre-selected.  It was therefore essential
that the EC make a clear statement  on this subject.
11. Another important issue was how the EC planne d to eliminate the discriminatory effects
resulting from the application of a licence distribution system for different tariff-rate quotas with
different conditions of competition.  Ecuador wish ed to know how the EC planned to alleviate the
discrimination that could arise when operators given access to different quotas were made subject in a
discriminatory manner to different reduction coefficients.  From the information available on the
functioning of the new banana import regime, it was Ecuador's understanding that a system of
guarantees would be highly burdensome for operators.  The disparities that would be caused by
applying the licence distribution system to different quotas would increase the risks inherent in theintroduction of the system of guarantees, especially for importers of Latin American bananas.
Ecuador, therefore, wished to know how the EC would prevent the discrimination that arose when the
same product was subjected to different levels of risk, depending on the origin.
12. Ecuador had several concerns with regard to the distribution of quotas.  It was difficult to
understand why the EC continued to disregard its obligations to bind the so-called "autonomous"quota of 353,000 tonnes.  This quota related to the accessions of Sweden, Austria and Finland to the
EC.  The EC's bound tariff schedule indicated clearly that the "basic global quota" was to be increased
by the sum of all the additional quantities resulting from the accession of new members to the EC.  By
disregarding this situation, which merely reflected the real state of affairs, the EC not only evaded its
obligations but showed that it was not really interested in a comprehensive settlement of the dispute.The tariff quota system required a waiver from Article I of GATT 1994.  The waiver in question not
only established an excessively high and unjustified level for a tariff preference, but its application
would go beyond the scope of Article I, resulting in new violations of Article XIII.  The EC should
provide an explanation as to what it meant by a statement as vague as the one contained in the
penultimate sentence of the status report that it "will reduce the in-quota tariff for non-ACP bananas
in the third tariff quota during the year, as necessary".  It was not acceptable that the tariff level was
not yet known and the statement contradicted the position that the tariff preference for the ACPcountries would be 300 euros/tonne, or that the tariff could be higher than 300 euros/tonne.  In order
to evaluate the WTO-consistency of the proposal the EC should provide information with regard to all
the elements of the proposal and thus far the EC had not done so.  His country supported the genuine
efforts to end this dispute.  Ecuador would under no circumstances accept moves from any quarter
which reflected the interests of those seeking to maintain the status quo.  If the EC and its memberStates were interested in putting an end to this dispute and did not wish to cause any further damage,
they had to take steps to find a solution.  If the EC proposal could not be applied in a WTO-consistent
manner, expeditious action should be taken to adopt a tariff-only system.
13. The representative of Jamaica said that her delegation noted the status report by the EC,
which envisaged as a way forward a transitional tariff-rate quota to be managed on the basis of a
FCFS system and thereafter the establishment of a flat tariff system.  On other occasions, Jamaica had
stated that it considered that a revised banana regime based on a tariff-rate quota system with licence
allocations on the basis of historical trade was more favourable not only to Jamaica, but also to other
Caribbean banana producers.  Jamaica wished to restate its commitment and would work with allWT/DSB/M/91
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parties concerned in this long-standing dispute to find a fair resolution which safeguarded the
legitimate interests of all parties, including the most vulnerable.
14. The representative of Costa Rica said that his delegation noted with disappointment the
statement by the EC Council of Ministers of 9 October 2000 indicating that a FCFS system
represented a good basis for resolving this dispute.  On the contrary, Costa Rica did not consider thatthe FCFS system was a basis for resolving the disp ute.  Moreover, the EC Council of Ministers had
abided by the proposal of 10 November 1999, which had repeatedly been criticized by a large number
of banana-exporting countries because it fixed an insufficient quota for Latin American countries and
an excessive quota for ACP countries.  The preferential tariff rates proposed were also excessive and
in fact constituted a real obstacle for Latin American countries.  He pointed out that the statement of
9 October 2000 referred to possible negotiations under Article XXVIII of the GATT, stating that the
interests of European importers and producers and those in the ACP countries would be taken intoaccount.  This blatant disregard for the interests of Latin American countries, which were also trading
partners in the WTO, had unnecessarily deferred the settlement of this dispute.  Costa Rica wished to
re-state its willingness to sit down at the negotiating table in order to find a solution that would take
into account the interests of all parties.
15. The representative of the United States said that her country had reviewed carefully the EC's
proposal, and had discussed it with EC officials.  Many details of the EC's proposals had to be
resolved.  The United States recognized that the EC had devoted considerable time and effort to
developing this proposal.  As her country had informed the EC, the United States could not endorse
this proposal as being consistent with the WTO provisions.  The EC's proposal would not resolve the
dispute and would preserve the discrimination between the companies that supplied the EC with LatinAmerican bananas and primarily European companies that supplied the EC with ACP bananas.  In
addition, the lack of detail concerning the proposal caused further concern, since this proposal would
form the basis for the EC Agriculture Council review and for further detailed regulations.  The United
States welcomed the opportunity to continue consul tations with the EC with a view to reaching an
expeditious solution to this long-standing dispute.
16. The representative of Guatemala reiterated her country's position concerning the course of
action taken by the EC as a means of continuing to delay the application of the DSB's rulings and
recommendations.  The EC's status report clearl y indicated that the work was focusing on the
implementation of a system to which Guatemala had objected at every level and by every means
available to it.  Since the proposal of 10 December 1999 had been made, Guatemala had persistently
maintained, in statements before the DSB, in its contacts with the EC and in communications sent to
the member States that the EC's approach was wrong.  She regretted that Guatemala's objections hadbeen disregarded by the EC.  The proposals of 6 September and 4 October 2000 continued to be
inconsistent with the WTO rules.  The Minister s responsible for Foreign Trade from Colombia,
Costa Rica, Guatemala, Honduras, Nicaragua, Panama and Venezuela had resumed their lobbying
efforts, sent letters to their counterparts in the EC member States, held meetings in some of the
member States and with the Commission in Brussels  and, above all, they had issued a statement in
Panama on 17 October 2000.
17. At the meeting of the Council of Ministers of the EC on 9 October 2000, certain EC member
States had expressed objections and reservations with respect to the proposal submitted for approval, a
proposal to which a number of Members had object ed.  This raised the question of why other
alternatives had not been explored and why Guatemala's suggestion to consider the Caribbeanproposal as a basis for designing a new regime had been disregarded.  With regard to the content of
the report, she reiterated that the proposal contained violations that had already been condemned by
the WTO.  For example, the scheme of subdividing imports and applying different tariff levels
according to origin violated Article XIII of GAT T 1994 and the tariff preference foreseen violated
Article I of GATT 1994.  At the same time, the report provided that the tariff preference might beWT/DSB/M/91
Page 7
reduced if it was prohibitive, and although it did no t clearly state so, it seemed to imply that the
reduction would take place at the end of the year.  For its part, she pointed out that no waiting period
was needed since the envisaged level was, in fact, prohibitive;  nor was there any justification in
granting the same level of preference to all preferential suppliers, since some of them were already
competitive.
18. As Guatemala had pointed out during the discussions on exemption for the association
agreement, the elements contained in the proposal su ggested that even when the EC had overcome the
shortcomings of its request, it would still not be possible to approve the exemption.  Similarly,
although the report indicated that the FCFS method was consistent with the WTO rules, the
arrangement proposed by the EC contained elements which violated Articles II and XVII of GATS as
well as Article I of GATT 1994.  The report stated that the management of the three quotas would be
identical, but if this was the case, the third quota would not have to be subject to a formally separatemethod.  Moreover, while the other regulations that would be issued in application of the new regime
were not yet known, they would provide the means by which the discriminatory framework could be
completed.  Guatemala wished to reiterate the position expressed at the highest level, in particular in
the Ministerial statement, that the proposed method for the management of quotas was inconsistent
with the WTO rules.  In three disputes on the same  subject, Guatemala had maintained that those who
resorted to the dispute settlement system should legitimately expect that their rights would be
restored.  Thus, if the proposal put forward were to be approved, Guatemala would not consider that
this dispute was terminated.
19. The representative of Mexico said that his country was examining the effects of the proposed
system in the light of its WTO rights and wished to  reserve its right to make a statement in a future
DSB meeting on this matter.  On the basis of what had been stated at the present meeting it appeared
that there were still differences as to whether the proposed regime would be the best solution and,
above all, whether that regime was fully consistent with the EC's WTO obligations.  Once again, this
situation confirmed that the simplest way of resolving this matter in a manner compatible with the
WTO would be to establish, at the earliest possible date, a tariff-only system with a level that allowedaccess to the EC's market for bananas.
20. The representative of Dominica said that the banana dispute had gone on long enough and it
was time that the parties involved mastered the political will to bring it to an end.  An end which had
to be a result of a compromise but a compromise th at was just in providing access to all suppliers to
the European market on a regular and viable basis and was fair to EC consumers.  No party could
obtain all it thought it was legally or morally entitled to without doing great damage, in some cases
irreparable damage, to another party.  The Windward Islands and the ACP countries had historicalaccess to the EC's market to the extent that the stru cture of their economies in some cases and also the
entire economic lifestyle of their counties was based on the production of bananas and sale to the
European countries.  Such sales were possible only due to preferential access conditions in Europe.
Any new banana regime had to, as a minimum, pres erve this access.  This was possible without doing
harm to other parties.  However, any attempt to remove such access should be seen for what it was,namely, an attempt to remove ACP suppliers from the EC's market.  He did not believe that such an
outcome could be considered desirable.
21. The ACP countries promoted a compromise proposal in which a former Prime Minister of
Dominica had played a leading role.  Dominica was convinced that this proposal contained elements
for a successful resolution of the problem.  Certain details of the proposal contained elements thatwere not acceptable to all the parties but the gene ral approach seemed to be acceptable to most of
them.  A sensible way forward would seem to be to  try to build upon the areas of agreement.  There
was a need to look at the EC's proposal in this context and to work with those aspects of the proposal
that conformed to the elements of the Caribbean proposal on which there appeared to be broadWT/DSB/M/91
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agreement.  If it was possible to proceed in this wa y, then an agreement on this very difficult problem
could be well within reach.
22. The representative of Colombia said that his delegation noted the EC's status report.
Colombia regretted that the method proposed by the EC was the one that had been systematically
rejected by the majority of Latin American countri es, including by some ACP countries.  His country
had always sought to ensure that the EC should se t up a system of quotas based on a historical method
of allocating licences.  This was the most ap propriate approach which would take into account
Colombia's trade interests.  He reiterated that the FCFS system would have devastating effects on the
prices of bananas in the international market, including the EC's market and would create problems
with regard to highly differential distributi on and a commercial risk for importing and exporting
countries.  The distribution would be assumed by the exporters rather than importers.  Like other
delegations, Colombia believed that the EC should provide more details on its proposal.
23. The representative of Saint Lucia said that his delegation noted the EC's status report.  Saint
Lucia supported the statement made by Dominica and considered that the views expressed at the
present meeting should be taken into account.  The sensible way forward was to build on the areas of
agreement rather than to start from scratch.  If there was one thing that came up in this long-standing
dispute on bananas which had caused a lot of damage to many countries, including to Saint Lucia, itwas that there was a very narrow area in which there was still no agreement.  In fact, all that was
needed to end this dispute was political will.
24. At the present meeting, he did not wish to address the substance of the EC's status report
because the CARICOM had already conveyed its position in an appropriate forum and by letter from
the President of the Caribbean Community to the EC , after the matter had been carefully examined.
He only wished to deal with one aspect of the proposal, namely, the ACP preferences.  That aspect
concerned a technical matter to the effect that the tariff proposed on quota C would be prohibitive.
The research undertaken in the context of the Ca ribbean position on the EC's proposal had found that,
several years back, the differential cost of bananas in certain Russian and Eastern European ports and
EC ports exceeded the proposed tariff for several weeks of the year.  Therefore, on the basis of historyit was clear that the proposed tariff would not constitute a deterrent to access for Latin American
bananas.  This was a significant point.  The argument was made that the EC proposal would provide a
quota for the ACP in violation of Article XIII, but in fact that did not provide any real safeguards for
the ACP countries.  Saint Lucia's concern about th e proposal was, however, more related to the FCFS
system which was also the concern of other countries.
25. In the past, the Caribbean countries had taken an active role in seeking to find a compromise.
This had been done in order to be helpful and most of the aspects of the Caribbean proposal wereacceptable.  However, it should be recognized that certain parties objected to that proposal.
Therefore, the Caribbean proposal should not be an impediment to progress because that would be
counterproductive.  He urged that there be a political will to achieve a necessary compromise based
on those areas in which there was an agreement.  He recalled that the Panel and the Appellate Body
called into question two aspects:  the reservation of quota shares for countries and groups of countriesand the licensing system.  There was no problem with the issue of adequate preferences for the ACP
countries.  Their rights as traders and exporters were just as legitimate as the rights of any other
Member of the international trading system.
26. The representative of Mauritius said that, along with other parties, her country thanked the EC
for its attempts to find a way out of this difficult issue.  In particular, her country appreciated the
statement made by Saint Lucia because it contained certain elements which showed that a solution
was not so far away.  For its part, Mauritius believed that a good solution would be one where the
outcome of the application of such a solution was fair to all producers and, in particular, took into
account the needs of small and vulnerable producers who were almost totally dependent on this oneWT/DSB/M/91
Page 9
product.  Mauritius was disappointed with the continued negative linkage between this issue and the
ACP/EC waiver and regretted that consideration of the waiver remained hostage to this issue.
27. The representative of Suriname said that since his delegation's permanent representation was
not located in Geneva, his country had not had the opportunity to speak on this subject.  However, this
did not imply that Suriname had no interest in this matter.  The banana export industry was one of thepillars of his country's fragile economy and it had only  been able to continue its trade to its market,
the EC, due to favourable market access arrangements.  Suriname appreciated that following the
outcome of the Panel and the Appellate Body, the EC banana import regime had to be modified in
order to bring it into conformity with the DSB's recommendations.  However, his country was
concerned that in the process it was not deprived of its access on a viable basis to the EC market,
which was of vital importance to its economic well-being.  He noted that the tariff-rate quotas and  the
system for the allocation of licences were not acceptable to certain countries.  Suriname expected thatthese shortcomings would be addressed while preserving the legitimate trading rights of suppliers, in
particular those such as Suriname which was at risk of marginalization.  In other words, the reform
should be limited to remedying and identifying the flaw while preserving underlying commendable
objectives of the market reallocation.  If an early and favourable resolution on this matter was possible
which would ensure orderly and predictable marketing and fair and secure access for all suppliers on aviable and remunerative basis, then it would have to be a cooperative approach by all parties.  The
only lasting solution to this long-standing dispute was one which provided adequate safeguards for all
the parties.
28. The representative of the European Communities said that his delegation noted the statements
made at the present meeting.  At this stage, it was important to carefully consider the matter.  Some
delegations were concerned about the details of the proposal currently under consideration.  Many
appeared to be uncomfortable with the FCFS system.  While acknowledging that much depended on
the actual implementation of such a system, the modalities regarding its operation were very
important and that in the coming period it was impor tant to continue to discuss this matter.  The EC
had tried in the past few months every possible venue and option based on historical references, butthis was not possible due to conflicting views amongst Latin American suppliers.  The FCFS system
which was now under consideration reflected suggestions that had been previously made in
consultations held by the EC with both the United States and other trading partners.  He noted that any
final solution of its technical details, as stated by Ecuador could not be the status quo.  As stated by
other delegations, it became urgent to find a solution as soon as possible preferably before the end of
the year.  It was important that such as solution was fair, non-discriminatory and WTO-compatible.
29. As far as the FCFS system was concerned, th e EC had some experience in managing quotas
along this system and where such a system was operated it was operated in a fair and reasonable way.
Many delegations had some concerns about quota C.  He reiterated that quota C was not reserved for
bananas of ACP origin which had a fair preference.  If the tariff applicable to the third quota would
turn out to be prohibitive for bananas of non-ACP origin, it would be reduced as rapidly as possible.
At the beginning of October, the EC Commissioner had held a meeting with Latin American suppliers
during which he had emphasized this point and he had made it clear that the third quota would be
operated in such a way so as to ensure access to that quota to bananas of all origin without putting in
question the historic and reasonable need for ACP suppliers.  This was a very useful and constructive
discussion.  He would convey all the statements and suggestions to his authorities in Brussels.  The
EC would be at the disposal of its tradin g partners who might have further questions.
30. The representative of the United States said that her delegation appreciated the statement
made by the EC.  Nevertheless, her country wished to have more details regarding the proposal.  The
EC's most recent proposal for distributing banana import licences continued to favour EC growers in
the EC's territories and in the former EC's coloni es and would discriminate against other suppliers.
The proposal was not WTO-consistent and did not meet the WTO commitments.  Latin AmericanWT/DSB/M/91
Page 10
countries had examined this proposal in detail and believed that it would not provide a speedy
solution to the dispute.  The level of the proposed tariff applied to Latin American countries under one
tariff-rate quota was prohibitive while the concept of allocating import licences on a FCFS basis was
not a problem.  The problem was with the way the EC had proposed that the system would be applied.
31. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
(b) Japan - Measures affecting agricultural produc ts: Status report by Japan (WT/DS76/11/Add.8)
32. The Chairman drew attention to document WT/DS76/11/Add.8 which contained the status
report by Japan on its progress in the implementation of the DSB's recommendations with regard to its
measures affecting agricultural products.
33. The representative of Japan said that, as indicated in the status report, his country had been
holding consultations with the United States in a constructive and friendly manner. The parties to the
dispute had made a lot of progress, but there still remained some technical issues to be resolved.
Japan expected that the parties would reach a mutually satisfactory solution in the near future.  It
would notify the DSB of the agreed solution as soon as such a solution was concluded with the United
States.
34. The representative of the United States said that her country hoped to complete work with
Japan on the few remaining issues that required to be resolved, in the very near future.
35. The representative of the European Communities said that though the United States had been
content with the progress made by Japan, the EC would not concur.  He was of the view that the
comments he had made at the previous DSB meeting, regarding countries other than the United
States, had not been taken into account.  Nineteen months had gone by since the DSB had requestedJapan to put an end to the varietal testing, a measure incompatible with the SPS Agreement.  He
reiterated the main point he had made at the previous meeting, namely, that there should be an
erga omnes  end to the testing.  He noted that it was a fundamental principle of the DSU provision that
all solutions should be compatible with the WTO Agreements.  The EC expected that Japan would
soon take a position on this, and find a solution that would apply equally to all.
36. The representative of Australia said that her country had previously registered its ongoing
interest in implementation in this case and, at the pr esent meeting, it wished to reiterate its interest.
Australia looked forward to resolution of the matter.
37. The representative of Japan said that his delegation had taken note of the comments made by
the EC and Australia.  Japan was serious and had been trying to pursue the consultations with the
United States in good faith, and hoped to reach a mutually satisfactory solution in the near future.  He
would convey the comments made at the present meeting to his authorities.
38. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
(c) Canada - Measures affecting the importation of milk and the exportation of dairy products:
Status report by Canada (WT/ DS103/12/Add.3 – WT/DS113/12/Add.3)
39. The Chairman drew attention to docume nt WT/DS103/12/Add.3 – WT/DS113/12/Add.3
which contained the status report by Canada on its progress in the implementation of the DSB's
recommendations with regard to its measures affecting the importation of milk and the exportation of
dairy products.WT/DSB/M/91
Page 11
40. The representative of Canada said that his country was presenting its fourth status report on
its implementation of the DSB's rulings and recommendations in this matter.  On 2 October 2000,
consultations had been held by video conference between Canada, the United States and
New Zealand.  Canada had provided statistical and other information required under the terms of the
December 1999 agreement with the complaining parties regarding the reasonable period of time forimplementation.  Canada had also answered questions from the United States and New Zealand
regarding its new provincial export mechanisms.  The United States and New Zealand had made
numerous requests for information, and Canada was now endeavouring to compile and provide the
information requested.  Canada also looked forward to providing the United States and New Zealand
with further information on the progress in implementation at the next round of consultations, which
had been tentatively scheduled for 15 December 2000.  In addition, his country would continue to
provide status reports to the DSB, pursuant to Article 21.6 of the DSU.  He reaffirmed Canada'scommitment to implement fully the DSB's reco mmendations and rulings by the deadline of
31 December 2000.
41. The representative of New Zealand thanked Canada for its fourth status report, and said that
his country welcomed Canada's satisfactory compliance with the DSB's rulings to date, insofar as they
pertained to the levels of subsidized exports under Canada's "Special Milk Classes" programmes.However, in order to bring itself into full compliance  with the rulings, Canada had to ensure that all
exports of dairy products, including any new measures  for the export of these products, would be fully
consistent with its WTO obligations under the Agreement on Agriculture.  It was this latter aspect of
Canada's compliance that seriously concerned New Zealand.  During the 2 October 2000
consultations, Canada had confirmed that it had impl emented new provincial-level export measures or
"mechanisms", and that dairy exports had now been taking place through them.  Canada had also
indicated that it did not consider that dairy exports through these mechanisms provided export
subsidies. As a consequence, Canada would not be counting these exports against its export subsidy
reduction commitments.  New Zealand considered th at Canada's new provincial-level dairy export
mechanisms continued to provide export subsidies to Canadian exporters.  Accordingly, failure to
count such exports against Canada's export subsidy reduction commitments was contrary to its
obligations under the Agreement on Agriculture and constituted a failure on the part of Canada to
fully implement the DSB's recommendations and rulings in this regard.  He noted that these matters
would be further discussed with Canada during the consultations scheduled for 15 December 2000.  In
the meantime, New Zealand reserved its WTO rights on this matter.
42. The representative of the United States thanked Canada for its status report as well as for the
information provided during consultations earlier in  the month.  The United States looked forward to
the 15 December 2000 meeting to continue their consultations.  In the earlier consultations, Canada
had stated that the process for changing provincial milk marketing orders, provincial regulations, and
federal legislation was now underway.  The process, according to Canada, should be completed by the
end of the year 2000:  i.e. by the end of the reasonable period of time for compliance with the DSB's
recommendations.  He regretted that the new provincial programmes that had taken effect on1 August 2000, and which were now being reduced to legal text, seemed in essence to be the same old
export subsidies.  Low priced milk was still available in Canada only for export contracts.  Moreover,
the provincial programmes continued to require that any milk committed to processors at such
reduced prices be exported.  Canada had also recently advised that it no longer collected information
on either the price or volume of export contracts, so that ostensibly, there would be no recordmaintained of the volume or value of milk exported through the new provincial mechanisms.  The fact
that Canada posited that this situation was the product of its deregulation of dairy exports, turning a
blind eye to the problem, was not likely to contribute to the resolution of this dispute.  It was now
evident that Canada had decided to pursue a course that was inconsistent with compliance with its
export subsidy reduction commitments, and would also permit the attendant trade distortions tocontinue unabated.  As a result, as Canada moved to finalize the incorporation of the new provincialWT/DSB/M/91
Page 12
export contracts into regulations and legislation, the United States concurrently would be making its
preparations for the next round in this dispute.
43. The representative of Canada said that his country had hoped that after the consultations,
New Zealand and the United States would recognize that the new mechanisms represented a dramatic
change in the manner in which export trade in dairy products was conducted in Canada.  These newmechanisms did reflect basic deregulation of the dairy sector, and were based on the primacy of
contract between producers and exporters.  He reiterated again Canada's commitment to fully
implement the recommendations and rulings of the DSB by the deadline.
44. The DSB took note of the statements and agreed
 to revert to this matter at its next regular
meeting.
(d) India - Quantitative restrictions on imports of agricultural, textile and industrial products:
Status report by I ndia (WT/DS90/16/Add.2)
45. The Chairman drew attention to document WT/DS90/16/Add.2 which contained the status
report by India on its progress in the implementation of the DSB's recommendations with regard to its
quantitative restrictions on imports of agricultural, textile and industrial products.
46. The representative of India said that his country's status report was clear and positive. India
was committed to removing restrictions maintained for balance of payment reasons in two tranches in
a balanced fashion. It had removed 50 per cent of the residual quota restrictions (QRs) on
1 April 2000 and the reasonable period of time for the remaining QRs would expire by April 2001.
Thus, India was on course in implementing its commitments.
47. The representative of the United States thanked India for its status report and looked forward
to further reports on this matter in due course.
48. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
(e) Turkey - Restrictions on imports of textile and clothing products:  Status report by Turkey
(WT/DS34/12/Add.2)
49. The Chairman drew attention to document WT/DS34/12/Add.2 which contained the status
report by Turkey on its progress in the implementation of the DSB's recommendations with regard to
its restrictions on imports of textile and clothing products.
50. The representative of Turkey said that, as had been stated at the previous DSB meeting, his
country aimed at finding the most appropriate solution in this case.  Such an effort required, inter alia ,
internal consultations with the different parties concerned.  Since the previous DSB meeting, Turkey
had held such consultations and would continue to do so in the next month while also working in
other areas.
51. The representative of India said that his country noted that the Turkish authorities had
continued to work on this implementation issue.  It had been indicated in the status report that Turkish
authorities had put the emphasis on internal consultations with regard to various aspects of this
subject.  India, therefore, asked Turkey to provide more details regarding those consultations.  India
reiterated its expectation that in this specific matter of implementation of the DSB's recommendationsand rulings, Turkey would fully comply with it s WTO obligations within the time-period of their
mutual agreement of January 2000.  India was ready to respond positively to any initiative that TurkeyWT/DSB/M/91
Page 13
might take to hold consultations on the manner in which it proposed to comply with the DSB's rulings
and recommendations.
52. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
2. Implementation of the recommendations of the DSB
(a) United States – Anti-Dumping Act of 1916
(b) Canada – Term of patent protection
53. The Chairman recalled that in accordance with the DSU provisions, the DSB was required to
keep under surveillance the implementation of recommendations and rulings of the DSB in order to
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of
the DSU provided that the Member concerned shall inform the DSB, within 30 days after the date ofadoption of the panel or Appellate Body report, of its intentions in respect of implementation of the
DSB's recommendations and rulings.
(a) United States – Anti-Dumping Act of 1916
54. The Chairman recalled that at its meeting on 26 September 2000, the DSB had adopted the
Appellate Body Report on "United States – Anti-Dumping Act of 1916" and the Panel Reports on the
same matter, as upheld by the Appellate Body Repo rt.  He invited the United States to inform the
DSB of its intentions in respect of implementation of the DSB's recommendations.
55. The representative of the United States said that her country intended to implement the DSB's
recommendations and rulings in a manner which respected its WTO obligations, and had begun to
evaluate different options for doing so.  The United States would need a reasonable period of time inwhich to implement, and was ready to consult with the EC and Japan on this matter.
56. The representative of Japan said that the findings of the Panel Report, as upheld by the
Appellate Body Report, showed that the US Anti-Dumping Act 1916 was inconsistent with the
relevant WTO provisions and, therefore, his countr y was of the view that the United States should
repeal the Act promptly in order to comply in good faith with the DSB's recommendations andrulings.  Japan urged the United States to provide a more specific and detailed plan, as soon as it was
ready, on how and when it intended to impl ement the DSB's recommendations and rulings.
57. The representative of the European Communities said that the EC urged the United States to
comply as soon as possible with the DSB's recommendations and rulings, and expected that in the
implementation, the United States would also address the ongoing judicial cases brought before itscourts against EC companies on the basis of the Ac t which had now been found incompatible with the
WTO rules.
58. The DSB took note of the statements, and of the information provided by the United States
regarding its intentions in respect of implementation of the DSB's recommendations.
(b) Canada – Term of patent protection
59. The Chairman recalled that at its meeting on 12 October 2000, the DSB had adopted the
Appellate Body Report on "Canada – Term of Patent Protection" and the Panel Report on the same
matter, as upheld by the Appellate Body Report.  He invited Canada to inform the DSB of its
intention in respect of implementation of the DSB's recommendations.WT/DSB/M/91
Page 14
60. The representative of Canada said that hi s country would comply fully with the DSB's
recommendations and rulings in this dispute.  However, in order to do so, legislative changes would
be required and, therefore, his country needed a "reasonable period of time" for implementation.
Canada looked forward to discussing this matter with the United States.
61. The representative of the United States welcomed Canada's information regarding its
intention to comply with the DSB's rulings and recommendations.  She noted that the Appellate Body
had specifically recommended that Canada bring Section 45 of its Patent Act into conformity with its
TRIPS obligations.  The United States was concerned, however, by recent press reports in Canada
quoting an official from the Canadian Industry Ministry that Canada was considering "several
possible responses to the [WTO] decision, including non-compliance".  The United States hoped that
non-compliance would not be an option for Canada.  Her country looked forward to discussing with
Canada a reasonable period of time for implemen tation.  She hoped that a meeting between the two
delegations could be arranged shortly.
62. The DSB took note of the statements, and of the information provided by Canada regarding
its intentions in respect of implementation of the DSB's recommendations.
3. United States – Definitive safeguard meas ures on imports of circular welded carbon
quality line pipe from Korea
(a) Request for the establishment of a panel by Korea (WT/DS202/4)
63. The Chairman recalled that the DSB had considered this matter at its meeting on
26 September 2000, and agreed to revert to it. He drew attention to the communication from Korea
contained in document WT/DS202/4.
64. The representative of Korea said that his country was submitting its second request for the
establishment of a panel in this case.  Korea's request had already been considered by the DSB at its
meeting on 26 September 2000, but at that time the United States had objected to the establishment of
a panel.  Korea continued to believe that the US safeguard measure, which had become effective since
March 2000, was in violation of the WTO obligations in many respects.  As Korea had already stated,
the United States safeguard measure did not meet the conditions provided for in Article 2 of theSafeguards Agreement and Article XIX of GATT 1994, and was not properly applied in accordance
with other provisions of these Agreements.  Since the request was on the agenda for the second time,
it was Korea's understanding that the panel would be established at the present meeting.
65. The representative of the United States regretted that Korea had chosen to request the
establishment of a panel.  Her country had hoped that the consultations would have addressed Korea's
concerns, and believed that the safeguard measure in question complied fully with the requirements of
the Safeguards Agreement and GATT 1994.  The United States believed that a panel would reach thesame conclusion.
66. The representative of the European Communities was concerned about the growing recourse
by the United States to protectionist trade policy measures in the steel sector.  In particular, with
respect to safeguard measures, the United States had adopted measures which appeared to violate its
obligations under the Safeguards Agreement and GATT 1994.  He regretted that this was not the firsttime.  The European Communities would, therefore, in the next few days submit a request for
consultations relating in particular to the US safeguard measure on welded line pipe and on steel wire
rod.
67. 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.WT/DSB/M/91
Page 15
68. The representatives of the EC, Canada , Japan  and Mexico  reserved their third-party rights to
participate in the Panel's proceedings.
4. India – Measures affecting export of certain commodities
(a) Request for the establishment of a panel by the European Communities (WT/DS120/2)
69. The Chairman drew attention to the communication from the European Communities
contained in document WT/DS120/2.
70. The representative of the European Communities said that the EC believed that the non-
automatic licensing scheme for the exportation of raw hides and skins from India constituted a
quantitative restriction prohibited under Article XI:1 of GATT 1994.  Moreover such a regime was
administered in such a way that, in practice, it neve r resulted in the granting of export licences.  Since
the WTO consultations in 1998, the situation had remained virtually unchanged as only one product
had been removed from the list on 13 January 2000.  However, all the other categories of leather,including raw hides and skins, had continued to be subject to the export restriction.  The EC and India
had held consultations in Geneva on 16 January 1998.  Since then, the issue had been constantly
discussed at the bilateral level.  Those discussions had not allowed the achievement of any
breakthrough.  Under these circumstances, the European Communities had no alternative but to
launch the panel procedure.
71. The representative of India noted that his country did not consider that the measure referred to
by the EC in its panel request violated India's obligations under Articles XI:1 of GATT 1994.
Nevertheless, India had been, and continued to be, sensitive to the EC's interests in this regard.  On
13 January 2000, as noted by the EC in its panel request, India had removed one product from the list
of items the exportation of which required non-automatic licences.  On 20 October 2000, India hadissued appropriate notifications for removing the non-automatic licencing requirement with regard to
export of other raw hides and skins and permitting export of these items on payment of export duty.
India realized that the EC had not as yet been in formed about the change in policy that had taken
place on 20 October 2000.  He believed that given a few days time to study the notification issued by
India on 20 October 2000, the EC would be in a position to withdraw its panel request.  In the light of
that situation, India was sure that the EC as well as other Members would understand its inability to
accept the panel request at the present meeting.
72. The representative of the European Communities thanked the representative of India for the
information provided at the present meeting which he would convey to his authorities.
73. The DSB took note of the statements and agreed  to revert to this matter.
5. India – Measures affecting the automotive sector
(a) Request for the establishment of a panel by the European Communities
74. The Chairman drew attention to the communication from the European Communities
contained in document WT/DS146/4.
75. The representative of the European Communities said that the EC believed that India's
measures in the automotive sector were in breach of Articles III and XI of GATT 1994 and Article 2.1
of the Agreement on Trade-Related Investment M easures (TRIMs).  Consultations which had been
held on 2 December 1998 on this matter had proved unfruitful.  Since 1998, the issue had been
constantly discussed at the bilateral level.  The EC had made substantive efforts to solve the problem,
unfortunately with no positive outcome.  Taking in to account the economic impact of the measures asWT/DSB/M/91
Page 16
well as their impact on the interests of European op erators, the EC had no choice but to request the
establishment of a panel.
76. The representative of India noted with regret that the EC had requested the establishment of a
panel on this matter.  It was unfortunate that in spite of having explained, in the context of a similar
request for the establishment of a panel by the United States, the salient features of its automotivepolicy and the systemic concerns that India had on the establishment of such a panel, the EC had
decided to make such a request. India was disappointe d with the EC's approach.  He said that India's
measures were in no way inconsistent with its obligations under Article III:4 and XI:1 of the
GATT 1994 and Article 2.1 of the Agreement on TRIMs.  As had been clarified in the context of the
US request, the measures referred to by the EC were not trade-related investment measures.
However, even if accepted, for arguments sake, that the measures in question were TRIMs, then
India's and other developing Members' obligations had to be evaluated in the light of Article 4 of theTRIMs Agreement.  On a number of occasions, India had pointed out that the WTO should not create
an impression, even inadvertently, that its disciplines impeded developmental interests of developing
countries.  His country had also indicated that many developing countries' efforts to achieve even a
minimum degree of industrialization were being challenged on the basis of the provisions of the
TRIMs Agreement.
77. This was a broader issue which would need to be dealt with separately, in the context of the
ongoing review of the TRIMs Agreement.  He recalled that on 17 December 1999, the General
Council Chairman had made a statement urging Members to exercise due restraint on TRIMs matters.
Following that statement, the General Council at its meeting on 8 May 2000, had taken a decision on
TRIMs transitional period issues.  That decision envisaged, inter alia , that the Chairman of the
Council for Trade in Goods should undertake consul tations, as matter of priority, on the means to
address the cases of TRIMs not notified or TRIMs in respect of which extension had not been
requested.  It was unfortunate that the EC disregarded the Chairman's statement of 17 December 1999
on due restraint, as well as the 8 May 2000 decision of the General Council on the subject of TRIMs
transitional period issues.
78. India urged the EC to reflect carefully on the impression that its actions would be likely to
create among developing countries about the relevance of the General Council decision which was
meant to be a confidence-building measure.  Recently,  in the context of the consultations held by the
Chairman of the General Council on various implementation issues, including those related to TRIMs,
it had been decided to temporarily defer this matter since the Chairman of the Council for Trade in
Goods was already holding consultations in this regard.  It was therefore unfortunate that even while
Members were considering the resolution of developing country concerns on TRIMs, the EC wasrequesting a panel on the same issue.  India, therefore, was not in a position to accept the EC's request
for establishment of a panel at the present meeting.
79. The representative of Pakistan said that his country was concerned about the request for the
establishment of a panel on a matter which was pending resolution under the aegis of the Council for
Trade in Goods and the General Council. He recalled the 17 December 1999 statement by the
Chairman of the General Council which stressed the need for "due restraint", and the 8 May 2000
decision of the General Council on TRIMs on transitional period issues.
80. The representative of the Philippines said that his country supported the statement made by
India and, in particular, the systemic concerns with regard to this matter.
81. The representative of the European Communities said that his delegation had taken due note
of the statements made by India, Pakistan and the Philippines.
82. The DSB took note of the statements and agreed  to revert to this matter.WT/DSB/M/91
Page 17
6. Philippines – Measures affecting trade and investment in the motor vehicle sector
(a) Request for the establishment of a panel by the United States (WT/DS195/3)
83. The Chairman drew attention to the communication from the United States contained in
document WT/DS195/3.
84. The representative of the United States said that her country was requesting the establishment
of a panel to examine the Philippines' trade-re lated investment measures (TRIMs) for firms that
manufactured motor vehicles.  The Philippines' TRIMs regime required manufacturing firms in the
motor vehicle sector to use parts and components produced in the Philippines and to earn a percentage
of the foreign exchange needed for importation by exporting finished goods.  Manufacturers had to
comply with these measures to import goods at prefer ential tariff rates.  Furthermore, it appeared to
the United States that import licences for parts, components and finished vehicles were conditioned on
compliance with these requirements.  These measures denied the Philippines' trading partners theopportunity to supply the Philippine markets.  In addition, they unfairly burdened manufacturers
operating within the Philippines.  If anything, they  retarded rather than promoted the development of
the Philippines' motor vehicle industry.
85. The United States considered that these restrictions were inconsistent with the Philippines'
obligations under Articles III:4, III:5 and XI:1 of GATT 1994 and Articles 2.1, 2.2, 5.2 and 5.5 of the
TRIMs Agreement.  These measures should have been removed on 1 January 2000.  The Philippines
had requested an extension of the phase-out period in accordance with Article 5.3 of the TRIMs
Agreement.  As soon as this had been done, the parties had begun consultations, and had met several
times to exchange views on how to address the intere sts of both the Philippines and the United States.
The discussion with the Philippines had been usef ul and the United States would continue to work
with them.  The Philippines had been very forthcoming in answering the questions the United States
had asked about the TRIMs regime.  However, the parties had now been consulting for more than a
year, but unfortunately it had not yet been possible to reach a satisfactory solution.  In light of the
passage of time, and the distance between the two countries' positions, the United States had
concluded that its interests were best served by moving forward with its panel request, and hadtherefore taken the logical step of bringing this matter to the DSB.  The United States remained open
to further discussions with the Philippines and hoped that this matter would be resolved on a mutually
agreeable basis.  Since the matter remained unresolved at this time, the United States was requesting
the establishment of a panel.
86. The representative of the Philippines said that notwithstanding the US request for the
establishment of a panel, his country remained hopeful that due restraint, prudence and understanding
would prevail, and that the parties would have suff icient political will to resolve the dispute.  He
underlined that the spirit of the DSU was not confrontational and encouraged parties to resolve issues
in the most amicable manner.  Therefore, the Philippines could not accept the establishment of a panel
at this stage.  Furthermore, his country believed th at the US request could not be given due course.  In
this context, he wished to enumerate several points.  First, his country had a pending request for the
extension of the transition period for the elimination of its TRIMs applied in the automotive sector.  In
filing this request in October 1999, the Philippines had exercised its right provided for under
Article 5.3 of the TRIMs Agreement, which had been expressly confirmed by the General Council in
its 8 May 2000 decision.  Second, both Article 5.3 of the TRIMs Agreement and the General Council
decision required that in considering such requests,  the Council for Trade in Goods (CTG) should take
into account developmental financial and trade needs of the Philippines.  The process under both theTRIMs Agreement and the General Council decision was multilateral.  Third, in its request and in its
replies to questions raised by other Members as well as in its various statements made in the meetings
of the CTG, the Philippines had presented real and objective evidence demonstrating its particular
difficulties and developmental, financial and trade n eeds.  Fourth, thus far, in the course of meetingsWT/DSB/M/91
Page 18
held by the CTG, no other Member had come forward to rebut the evidence presented by the
Philippines, or to openly discuss the merits of the Philippine request.  An open discussion would be
indispensable to preserve the multilateral character of the process.  Fifth, the Philippines had held
bilateral consultations with some Members, including with the United States.  It had participated
willingly and in good faith in those consultations, ho ping that that would facilitate the discussions in
the CTG.  Regardless of the results of those consultations, he stressed that such consultations were not
a substitute for the CTG multilateral process.  Sixth, the Philippines, believed that, like any other
Member, it was, at the very least, entitled to pro cedural due process and it had yet to be afforded such
due process.  Seventh, the Philippines wished to further invoke the Rules of Procedure of the CTG,
which provided that if a decision could not be arrived at by consensus in the CTG, the matter should
be referred to the General Council for decision.  This formed an indispensable element of the
procedural due process to which the Philippines would be entitled, without which any proceeding
such as the one under consideration was premature.  In this regard, the Philippines drew attention to
the systemic implications of the US request.  The DSB and the General Council were considered to be
the same Body.  Under Article IV:3 of the WTO Agreement, the General Council discharged the
responsibilities of the DSB.  The General Council had requested the CTG to give "positive
consideration" to the requests filed by the Philippines and other Members.  Unless there was aconsensus to the contrary, this decision remained va lid.  In the view of the Philippines, the General
Council discharging the responsibilities of the DSB should not contradict itself by deciding to
establish a panel.
87. The representative of Japan said that Article 3. 7 of the DSU stipulated that "The aim of the
dispute settlement mechanism is to secure a po sitive solution to a dispute.  A solution mutually
acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be
preferred".  Article 4.5 of the DSU provided that "In the course of consultations in accordance with
the provisions of a covered agreement, before resorting to further action under this Understanding,
Members should attempt to obtain satisfactory adjustment of the matter."  Japan did not question that
the United States had the right to request a panel on this matter.  However, in view of the above, andin view of the fact that consultations were ongoing  in the CTG in order to find a general framework to
deal with the issue of transitional periods for developing countries' TRIMs,  Japan hoped that, as
stated by the United States, the parties to the dispute would continue to hold constructive
consultations in an effort to finding a mutually acceptable solution.
88. The representative of the United States said that her country did not agree with the statement
that the Philippines would be entitled to maintain its TRIMs, because it had requested an extension
pursuant to Article 5.3 of the TRIMs Agreement.  On the contrary, the fact that the Philippines'request for extension was pending, and that there was the 8 May 2000 decision, did not prejudice the
US rights under the TRIMs Agreement or GATT 1994 nor other Members' rights with regard to their
measures.  At present, the Philippines' TRIMs did not have any justification under the WTO
Agreement.
89. In response to Japan's intervention, she said that the parties to the dispute had been consulting
for a year, and had worked in the CTG as well as multilaterally and bilaterally in order to find a
solution.  The United States believed that it had respected the DSU provisions in this regard.  The
parties to the dispute had tried for more than a year to reach a solution bilaterally and in the CTG.
The United States did not agree with the statement that when there was no consensus in the CTG, the
matter should be referred to the General Council.  The United States continued to try to resolveseveral requests with other countries, and would try to move forward on a multilateral solution.
90. The representative of Malaysia said that his country supported the statement made by the
Philippines.  Malaysia was concerned that the United States had considered it appropriate to request
the establishment of a panel on this matter.  Several countries currently sought extension of
transitional period issues in accordance with the decision of the General Council.  The matter shouldWT/DSB/M/91
Page 19
be discussed, reviewed and agreed upon, pursuant to the 8 May 2000 decision of the General Council.
Pending the resolution of the matter, the United States should allow the multilateral process to
continue and should exercise due restraint.  This would enhance the confidence of Members, in
particular developing-country Members, in the multilateral trading system.
91. The representative of Argentina wished to associate his delegation with the concerns
expressed by other delegations about systemic implications of initiating a dispute settlement
procedure while the process for extension of transitional periods under the TRIMS Agreement
pursuant to Article 5.3 was still pending in the CTG.  The General Council had recommended that due
restraint should be exercised regarding the use of the dispute settlement mechanism, and requests for
the extension of the transition period were under consideration in the CTG.  Mexico considered that
under the circumstances the US request for the establishment of a panel was premature.
92. The representative of Pakistan said that in the backdrop of the Chairman's statement of
17 December 1999 and the 8 May 2000 decision of the General Council, requests for a panel on the
TRIMs issues were of concern to those countries who believed in the multilateral system and the
process under way in the WTO.  His country hoped that both parties would continue negotiations to
find a mutually agreeable solution, thereby contributing to the credibility of the system.
93. The representative of Mexico said that it had become clear that there was a need to arrive at
an agreement concerning applications for TRIMs ex tensions.  While Mexico did not question the right
of the United States to request a panel, it believed that Members had undertaken to act with due
restraint.  It did not share the interpretation that the Philippines did not comply with its WTO
obligations, as it had submitted its application for extension in due time and the matter was still
pending in the CTG, which had yet to answer "yes" or "no".  Mexico believed that it was not for apanel to rule on a matter that fell within the competence of the CTG.  He reiterated that it was
necessary to speed up the multilateral process on which Members had embarked in order to
satisfactorily resolve TRIMs matters.
94. The representative of Indonesia said that his country supported the statement by the
Philippines that the procedure on a matter that could not be resolved by consensus in the CTG should
be referred to the General Council.  That procedure s hould be followed at this stage, before the matter
could be considered by the DSB.  His country also hoped that both parties would continue
consultations in an effort to find a mutually satisfactory solution.
95. The representative of Mauritius said that her country endorsed the statement by Pakistan.
Mauritius did not dispute the legality of the United States' request for the establishment of a panel.
However, it did regret that at a time when they were engaged in confidence-building exercise, they
were unable to find a more satisfactory solution to such a situation.  Mauritius urged both parties tofind a solution rather than to request a panel to examine the matter.
96. The representative of the United States said that her country had exercised restraint for a year.
The United States would continue working with its trading partners on TRIMs issues in order to
resolve several requests with other countries.
97. The DSB took note of the statements and agreed to revert  to this matter.
7. United States – Import prohibition of certain shrimp and shrimp products
(a) Recourse to Article 21.5 of the DSU by Malaysia (WT/DS58/17)
98. The Chairman drew attention to the communication from Malaysia contained in document
WT/DS58/17.WT/DSB/M/91
Page 20
99. The representative of Malaysia said that on 6 November 1998, the DSB had adopted the
Appellate Body Report and the Panel Report on this matter, as modified by the Appellate Body.  The
Appellate Body had found that while qualifying for provisional justification under Article XX:(g), the
import prohibition imposed under Section 609 of  Public Law 101-162 had failed to meet the
requirements of the chapeau of Article XX, and therefore was not justified under Article XX of
GATT 1994.  The Appellate Body Report had also recommended that the "DSB request the United
States to bring its measure found in the Panel Report to be inconsistent with Article XI of
GATT 1994, and found in this Report to be not justified under Article XX of GATT 1994, into
conformity with the obligations of the United States under the Agreement."  On 21 January 1999, the
United States and Malaysia had agreed to a 13-month reasonable period of time for the United States
to comply with the DSB's recommendations and rulings.  This had expired on 6 December 1999.However, to-date, the United States had not lifted the relevant import prohibition imposed under
Section 609 of Public Law 101-162 and had failed to take the necessary measures to allow the
importation of certain shrimp and shrimp products in an unrestricted manner.
100. There was disagreement between Malaysia and the United States as to the existence or
consistency with GATT 1994 of measures taken by the United States to comply with the DSB'srecommendations and rulings.  Malaysia had considered that in order to give effect to the DSB's
recommendations and rulings, the import prohibition should be lifted immediately to allow the
importation of certain shrimp and shrimp products in an unrestricted manner.  Malaysia thereby
requested that this matter be referred to the original Panel pursuant to Article 21.5 of the DSU.
Malaysia also requested the Panel to find that by not lifting the import prohibition and by not takingthe necessary measures to allow the importation of certain shrimp and shrimp products in an
unrestrictive manner, the United States had failed to comply with the 6 November 1998
recommendations and rulings of the Dispute Settlement Body.  It further requested that the Panel
suggest that the United States should lift the import prohibition immediately and allow the
importation of certain shrimp and shrimp products in an unrestrictive manner in order to comply withthe DSB's recommendations and rulings.
101. The representative of the United States said that on 25 November 1998, her country had
informed the DSB of its intention to implemen t the DSB's recommendations and rulings on this
matter in a manner which would be consistent with its firm commitment to the protection of
endangered sea turtles.  The United States and the other parties to the dispute had reached agreement
on 13 months as a reasonable period of time for implementation.  That period of time had ended on
6 December 1999.  Throughout the reasonable period, and again in January 2000, the United Stateshad reported to the DSB on the steps it had taken to implement the DSB's recommendations and
rulings.
102. The United States was disappointed by the decision of Malaysia to invoke the provisions of
Article 21.5 with respect to the US implementation.  In the spirit of the DSU, her country had sought
to resolve any outstanding issues regarding implementation through good faith consultations.  It hadconsulted with Malaysia throughout the implementation period.  Recently, the United States had
offered to send a high level delegation to Kuala Lumpur to discuss Malaysia's concerns.  Malaysia
had, however, declined the offer to engage in such consultations. The United States was puzzled by
Malaysia's contention that the DSB's recommendations and rulings required the United States to
withdraw the US measure in its entirety.  She recalled that the Appellate Body Report had found no
inconsistency between the US legislation at issue and its WTO obligations.  Rather, the Report had
found fault with certain aspects of the way the law was administered.  As had been reported to the
DSB during the implementation period, the United States had taken great care to address the DSB's
findings with respect to the implementation of the US measure.  Nothing in the DSB's
recommendations called on the United States to withdraw its measure in its entirety, and the UnitedStates implementation steps amounted to full compliance with these recommendations.  TheWT/DSB/M/91
Page 21
implementation steps had both responded to the issues raised by the Appellate Body Report, and –
with the cooperation of the countries in the Indian  Ocean region – had advanced efforts to conserve
endangered sea turtles.
103. Having previously described the US implementation steps to the DSB, she wished to
summarize those steps and to point out some recent developments since the US implementation reportto the DSB in January 2000.  She recalled that pursuant to the findings in the Appellate Body Report,
the US Department of State had issued revised guidelines implementing its Shrimp/Turtle law.  Under
the revised guidelines, the United States had certified Pakistan – one of the original four complainants
– as having a comparable sea turtle conservation programme.  Malaysia, however, had not sought to
make use of the revised guidelines.  Negotiating an agreement with the governments of the Indian
Ocean region on the protection of sea turtles in that region had been another key element of the US
implementation efforts.  Recently, the United States had provided financial assistance to facilitate thehosting of the first negotiating round by Malaysia.  The United States looked forward to continuing to
work with Malaysia and the other concerned governments to finalize this agreement.
104. She recalled that the US implementation efforts had included offers of technical training in
the design, construction, installation and operation of TEDs to any government that had requested it.
The United States had conducted a TEDs workshop in Karachi (Pakistan) in January 2000, focusingon evaluation and training issues.  The United States believed that this workshop had assisted the
Government of Pakistan in its adoption of a successful TEDs programme.  To-date, Malaysia had not
requested any such assistance.  The United States was confident that the panel established under
Article 21.5 and – if this matter was appealed – th e Appellate Body would find that the United States
had complied with the DSB's recommendations and rulings.  The United States, however, regrettedthat Malaysia had declined its offer to consult on this matter in Kuala Lumpur and had instead decided
to pursue proceedings under Article 21.5 of the DSU.  Rather than expending efforts in such
counterproductive litigation, the United States believed that the parties should continue to engage in
cooperative efforts towards their mutually shared goal of sea turtle conservation.
105. The representative of Thailand said that his country had followed closely the implementation
by the US of the DSB's recommendations and rulings in the Shrimp case.  This implementation raised
a number of systemic issues on which an interpretation of the DSB's recommendations and rulings
might be useful.  Thailand therefore welcomed the opportunity for such an interpretation through
Article 21.5 procedure and would continue to follow closely developments in this regard.
106. The representative of India said that his country was a co-complainant in this dispute.  In
India's view, by having failed to allow the importation of shrimp and shrimp products without any
restriction, the United States had failed to comply with the DSB's recommendations and rulings.India wished to reserve its right to participate as a third party in the Article 21.5 panel's proceedings.
107. The representative of Malaysia said that he wished to clarify that his country had not declined
to hold consultations with the United States.  In fact, Malaysia had held informal consultations by
video-conference with the United States in the past week.  However, the United States had requested
consultations to discuss a wide range of issues, including the issue of turtle conservation.  Malaysiadid not think that the issue at hand was about turtle conservation, but whether or not the United States
had complied with the recommendations of the Panel and Appellate Body.  The compliance had not
yet taken place and the improvements and fine-tuning of the guidelines were irrelevant as long as the
import ban, which adversely affected Malaysia was still in place.
108. The representative of the United States wished to clarify that she did not imply that Malaysia
had refused to meet with the United States, but that Malaysia had refused the US offer to send a very
high-level delegation to Kuala Lumpur to resolve these issues.WT/DSB/M/91
Page 22
109. The representative of Australia said that her country continued to have a strong interest in the
US implementation of the DSB's recommendations and rulings in this case.  Australia's interest
reflected its substantive market access concerns, and the important issues of principle involved.  Her
country was still examining the request for establishment of a panel and wished to reserve its right in
the matter.
110. The DSB took note of the statements and agreed , pursuant to Article 21.5 of the DSU, to refer
to the original Panel the matter raised by Malaysia in document WT/DS58/17.  The Panel would have
standard terms of reference.
111. The representatives of Canada, Ecuador , India , Japan,  Mexico , and Thailand  and Hong Kong,
China reserved their third-party rights to participate in the Panel's proceedings.
8. Mexico – Anti-dumping investigation of high-fructose corn syrup (HFCS) from the
United States
(a) Recourse to Article 21.5 of the DSU by the United States (WT/DS132/6)
112. The Chairman drew attention to the communication from the United States contained in
document WT/DS132/6.
113. The representative of the United States said that a reasonable period of time for compliance in
the dispute on Mexico's anti-dumping investigation of high-fructose corn syrup  (HFCS) had expired
on 22 September 2000.  Prior to that dated on 20 September 2000, Mexico had published a revised
anti-dumping resolution imposing anti-dumping duties on HFCS.  Unfortunately, this resolution
appeared to be inconsistent with several provisions of the Anti-Dumping Agreement, and her country
believed that it did not comply with the DSB's recommendations and rulings.  The United States
therefore sought recourse to Article 21.5 of the DSU, as set forth in document WT/DS132/6.  TheUnited States and Mexico had been discussing mutually agreeable procedures under Articles 21 and
22 of the DSU in this matter.  Her country hoped to conclude those discussions in the near future, and
would notify Members of their agreement.
114. The representative of Mexico recalled that at the 26 September DSB meeting, his country had
informed the DSB that on 20 September 2000, prior to the expiry of the reasonable period of time, it
had published in the Official Journal of the Federation the revised resolution based on the DSB's
recommendations and rulings.  However, it noted that the United States believed that the measures
taken by Mexico to comply with the DSB's recommendations were not consistent with the
Anti-Dumping Agreement and was requesting a panel pursuant to Article 21.5 of DSU.  Since Mexico
was convinced that it had complied with all the DSB's recommendations and rulings, the US request
seemed unnecessary.  However, it decided to exercise its right not to oppose the US request at the
present meeting.  Mexico confirmed that the partie s to the dispute were working together with a view
to agreeing on the best way to proceed on the matter.  They hoped to be able to reach an arrangement
which would take into account the interests of both parties, as well as the obligations and rights under
the DSU.  Once such an understanding was reached, it would be notified to the DSB.
115. The DSB took note of the statements and agreed , pursuant to Article 21.5 of the DSU, to refer
to the original panel the matter raised by th e United States in document WT/DS132/6.  The Panel
would have standard terms of reference.
116. The representatives of the EC and Mauritius  reserved their third-party rights to participate in
the Panel's proceedings.WT/DSB/M/91
Page 23
9. Proposed nomination for the indicative list of governmental and non-governmental
panelists
117. The Chairman drew attention to document WT/DSB/W/145 which contained an additional
name proposed for inclusion on the indicative list in accordance with Article 8.4 of the DSU.  He
proposed that the DSB approve the name contained in document WT/DSB/W/145.
118. The DSB so agreed.
10. Canada - Patent protection of pharmaceutical products
(a) Statement by Canada
119. The representative of Canada speaking under "Other Business", recalled that the Panel Report
on this matter had been adopted by the DSB on 7 April 2000.  On 18 August 2000, an arbitrator had
determined that the reasonable period of time for Canada to implement the DSB's rulings was six
months from the date of adoption of the report:  i.e. by 7 October 2000.  Canada had met thisdeadline, and had fully implemented the DSB's rulings.  The Governor General in Council, the
executive arm of the Government of Canada, had repealed the Manufacturing and Storage of Patented
Medicines Regulations, effective 7 October 2000.  He recalled that these regulations had given legal
force and effect to the so-called "stockpiling except ion" of the Canadian Patent Act, which the Panel
had found to be inconsistent with Canada's obligations under the TRIPS Agreement.  The repeal ofthese regulations had deprived the stockpiling exception of any legal force or effect.  Canada had
therefore complied fully with the DSB's rulings.  His delegation was willing to provide copies of
Canada's implementing measure to any Member.  Such information was also available on the web site
of Canada's Government.
120. The DSB took note of the statement.
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