RESTRICTEDWORLD TRADE
ORGANIZATIONWT/DSB/M/124
13 June 2002
(02-3293)
Dispute Settlement Body
22 May 2002
MINUTES OF MEETING
Held in the Centre William Rappard
on 22 May 2002
Chairman:  Mr. Carlos Pérez del Castillo (Uruguay)
Subjects discussed: Page
1. Surveillance of implementation of recommendations adopted by the DSB.........................2
(a) United States – Section 110(5) of the US Copyright Act:  Status report by the United
States......................................................................................................................... ..................2
(b) United States – Anti-Dumping Act of 1916:  Status report by the United States.......................3
(c) Argentina – Definitive anti-dumping measures on imports of ceramic floor tiles from
Italy:  Status re port by Argentina............................................................................................. ...4
2. India – Measures affecting the automotive  sector..................................................................4
(a) Implementation of the reco mmendations of the DSB.................................................................4
3. United States – Sunset review of anti-dumping duties on corrosion-resistant
carbon steel flat prod ucts from Japan ....................................................................................5
(a) Request for the establishm ent of a panel by Japan .....................................................................5
4. Japan – Measures affecting the importation of apples..........................................................6
(a) Request for the establishment of  a panel by the United States ...................................................6
5. United States – Definitive safeguard measures on imports of certain steel
products ....................................................................................................................... ..............7
(a) Request for the establishment of a panel by the European Communities...................................7
6. United States – Rules of origin for textiles and apparel products ........................................8
(a) Request for the establishm ent of a panel by India ......................................................................8
7. European Communities – Anti-dumping duties on imports of cotton-type bed
linen from  India ............................................................................................................... .......10
(a) Recourse to Article 21.5 of the DSU by India:  Request for the establishment of a
panel.......................................................................................................................... ................10
8. Proposed nominations for the indicative list of governmental and non-
governmental panelists ......................................................................................................... ..11
9. Canada – Export credits and loan guarantees for regional aircraft ..................................12
(a) Statement by Brazil......................................................................................................... ..........12WT/DSB/M/124
Page 2
1. Surveillance of implementation of recommendations adopted by the DSB
(a) United States – Section 110(5) of the US Copy right Act:  Status report by the United States
(b) United States – Anti-Dumping Act of 1916:  Status report by the United States
(c) Argentina – Definitive anti-dumping measures on imports of ceramic floor tiles from Italy:
Status report by Argentina
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 reasonable
period of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue isresolved".  He proposed that the three sub-items to which he had just referred be considered
separately.
(a) United States – Section 110(5) of the US Copyri ght Act:  Status report by the United States
(WT/DS160/18/Add.4)
2. The Chairman drew attention to document WT/DS160/18/Add.4 which contained the status
report by the United States on progress in the implementation of the DSB's recommendations in the
case concerning Section 110(5) of the US Copyright Act.
3. The representative of the United States said that on 7 May 2002 his country had provided an
additional status report in this dispute, in accordance with Article 21.6 of the DSU.  As noted in the
report, the United States had been engaged in discussions with the EC in an effort to find a positiveand mutually acceptable solution to this dispute.  In light of the discussions between the parties, the
arbitration proceedings in this matter had been suspended at the joint request of the parties in order to
facilitate efforts to find a positive solution.  The United States was working actively to reach a
mutually acceptable arrangement to this matter.
4. The representative of the European Communities said that the EC was very disappointed with
the apparent disinterest of the United States in the surveillance by the DSB of the implementation of
recommendations and rulings.  The most recent status  report submitted by the United States did not
address the issue of implementation and, once again, the EC had to conclude that the United States
had not made progress towards compliance with its obligations under the TRIPS Agreement.
Moreover, he wished to underline that almost 22 months had lapsed since the adoption of the Panel
Report in this case, but during this long period of time, the United States had not made any effort to
implement the ruling.  Furthermore, the bilateral disc ussions to which the United States referred in its
status report had not yet led to a temporary solution, which in any case would not be a substitute for
full compliance.  The EC, therefore, urged the United States to work actively towards finding a
prompt solution to this dispute.
5. The representative of Australia said that, at a number of previous DSB meetings, his country
had registered its concern about the continued delay in the United States' implementation of the DSB
recommendations and rulings in this dispute.  On those occasions, Australia had also raised its
concern about the apparent discriminatory nature of the proposed compensation arrangements that it
understood had been agreed between the United States and the EC.  Once again, his country wished to
take this opportunity to raise these concerns, and to register with the United States its expectation that
any compensation arrangement reached in this case be applied on a non-discriminatory basis.
6. The representative of the United States said that his delegation was surprised to hear the EC's
criticism of the status reports submitted by the United States on this matter.  He noted that the EC was
well aware of US efforts to find a mutually acceptable solution to this dispute.  Moreover, the USWT/DSB/M/124
Page 3
status reports did not compare unfavourably with status reports that had been submitted by other
Members in other long-running disputes before the DSB.
7. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
(b) United States – Anti-Dumping Act of 1916:  Status report by the United States
(WT/DS136/14/Add.4 – WT/DS162/17/Add.4)
8. The Chairman drew attention to docume nt WT/DS136/14/Add.4 – WT/DS162/17/Add.4
which contained the status report by the United States on progress in the implementation of the DSB's
recommendations in the case concerning the US Anti-Dumping Act of 1916.
9. The representative of the United States said that on 7 May 2002  his country had submitted an
additional status report in this dispute, in accordance with Article 21.6 of the DSU.  As noted in that
report, on 23 April 2002, a bill (S.2224) had been introduced in the US Senate which would repeal the1916 Act and apply to all pending court cases.  This was a companion bill to the legislation
(H.R. 3557) that had been introduced in the US House of Representatives on 20 December 2001.  The
United States would continue to work toward fu rther progress in reaching a mutually satisfactory
resolution to this dispute with the EC and Japan.
10. The representative of Japan said that his country's basic position, as expressed in previous
meetings, remained the same, namely, to obtain prompt compliance by the United States.  Japan
wished to point out that the date of 30 June 2002 specified in the communication contained in
document WT/DS162/21 with regard to arbitration was fast approaching.  As stipulated in that
communication:  "the arbitration proceeding may be reactivated at the request of either party after
30 June 2002 if no substantial progress has been made in resolving this dispute by that date".  Japan,therefore, expected that the United States would continue with best efforts to have the bill repealing
the 1916 Act passed by the US Congress as soon as possible.
11. The representative of the European Communities said that the EC had agreed to request the
Arbitrators to suspend their work in order to give the US Congress additional time to repeal the
1916 Act and to terminate pending cases.  However, the EC noted, once again, that the US Congresshad still not made progress towards implementation of the DSB's ruling, despite the fact that the
reasonable period of time for implementation had originally expired in July 2001 and had then been
extended until the end of 2001.  This continued lack of compliance was increasingly worrying.
Indeed, the judicial proceeding brought against EC companies would automatically resume after
8 August, if legislation to repeal this Act and to terminate pending cases was not passed by then.  In
that case, notwithstanding the clear finding that the 1916 Act was WTO-inconsistent, EC companies
would be involved in extremely costly litigation procedures, or could even be condemned.  Obviouslysuch a result would not be acceptable to the EC and if the EC were to face such a situation, WTO
proceedings to grant the EC the authorization to retaliate would have to be reactivated.  The EC,
therefore, wished to impress on the US administration the extreme urgency of securing a repeal of the
1916 Act.  Indeed, the continuous delay on implementation of this case and the prior one raised
troublesome questions about US commitments to compliance.
12. The representative of Mexico said that his country, which had participated as a third party in
this dispute, wished to see rapid implementation of the DSB's recommendations.
13. The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.WT/DSB/M/124
Page 4
(c) Argentina – Definitive anti-dumping measures on imports of ceramic floor tiles from Italy:
Status report by Argentina (WT/DS189/8)
14. The Chairman drew attention to document WT /DS189/8 which contained the status report by
Argentina on progress in the implementation of the DSB's recommendations in the case concerning
Argentina's definitive anti-dumping measures on imports of ceramic floor tiles products from Italy.
15. The representative of Argentina said that hi s country wished to inform the DSB that on
24 April 2002, the Ministry of Production had enacted Resolution 76/02 revoking the anti-dumping
measures at issue in the case on "Argentina – Definitive Anti-Dumping Measures on Imports of
Ceramic Floor Tiles from Italy".  With the publication of this Resolution, Argentina considered that it
had now fully implemented the DSB's recommendations and rulings in this case as had been
announced at the 5 December 2001 DSB meeting.
16. The representative of the European Communities said that his delegation welcomed the rapid
resolution of this dispute and thanked Argentina for its efforts devoted to this case.  In the view of the
EC, this fine outcome was largely due to the constructive spirit shown by the Argentinean authorities
in line with the letter, the object and the purpose of Article 21.1 of the DSU.
17. The DSB took note of the statements.
2. India – Measures affecting the automotive sector
(a) Implementation of the recommendations of the DSB
18. 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 adoptionof the panel or Appellate Body report, of its intentions in respect of implementation of the
recommendations and rulings of the DSB.  He recalled that at its meeting on 5 April 2002, the DSB
had adopted the Appellate Body Report in the case on "India - Measures Affecting the Automotive
Sector" and the Panel Report pertaining to the same matter.  He noted that the 30-day period in this
case had expired on 5 May 2002 and on 2 May 2002, pursuant to the agreement by the parties to thedispute, India had informed the DSB in writing of its intentions in respect of implementation.  The
relevant communication was contained in  document WT/DS146/12 - WT/DS175/12.
19. The representative of India said that on 5 April 2002, the DSB had adopted the Panel and the
Appellate Body Reports in the dispute on:  "India - Measures Affecting the Automotive Sector".  In
accordance with Article 21.3 of the DSU, India was required to inform the DSB of its intentions
concerning implementation of the DSB's recommendati ons and rulings within 30 days.  As stated in
that Article, if a DSB meeting was not scheduled during the 30-day period, a special meeting of theDSB should be held for that purpose.  However, fo llowing an agreement reached with the EC and the
United States, India had notified the DSB on 2 May 2002 in writing of its intentions to implement the
recommendations and rulings in order to avoid holding a special DSB meeting for that purpose.
India's notification was circulated as document WT/DS146/12 – WT/DS175/12 on 3 May 2002.  At
the present meeting, India wished to inform the DSB of its intentions to implement the
recommendations and rulings of the DSB in the case on "India – Measures Affecting the Automotive
Sector".  India would need a reasonable period of time for implementation and was ready to discuss
this issue with the EC and the United States.
20. The representative of the United States said that his country welcomed the statement made by
India that it intended to implement the DSB's reco mmendations and rulings in this case.  The United
States looked forward to constructive disc ussions with India on prompt implementation.WT/DSB/M/124
Page 5
21. The representative of the European Communities said that the EC wished that the conclusions
and recommendations of the Panel Report, which had been adopted on 5 April 2002, be implemented
very rapidly.  In the EC's view, this was both nece ssary and feasible.  Furthermore, the EC wished to
recall India's assurances given during the Panel's proceedings in particular on the scope of the
respective trade balancing commitments assumed by the Memorandum of Understandings'signatories.  The EC expected that India would act consistently with those assurances.  The EC was
fully aware of the positive steps taken by India in removing certain inconsistent measures related to
the dispute under examination and most notably th e withdrawal of Public Notice No. 60 and the
elimination of import licensing as of 1 April 2001.  However, these measures were not at all
sufficient.  The EC looked forward to discussing w ith India this matter in the immediate future.  In
any case, the EC considered that the implemen tation by India of the relevant rulings and
recommendations was feasible within a short period of time.
22. The DSB took note of the statements and of the information provided by India regarding its
intentions in respect of the implementation of the DSB's recommendations.
3. United States – Sunset review of anti-dumping duties on corrosion-resistant carbon steel
flat products from Japan
(a) Request for the establishment of a panel by Japan (WT/DS244/4)
23. The Chairman recalled that the DSB had considered this matter at its meeting on
17 April 2002 and had agreed to revert to it.  He drew attention to the communication from Japan
contained in document WT/DS244/4.
24. The representative of Japan said that his country was requesting the establishment of a panel
for the second time in order to examine US laws, regulations, procedures, practices and decisions
pertaining to the sunset review of the anti-dum ping order on corrosion-resistant carbon steel flat
products from Japan.  Without going into the details of Japan's panel request, he wished to highlight
that the US automatic initiation of the sunset review  without sufficient evidence, the unjustifiably high
standards for the withdrawal of the anti-dumping measure, the inappropriate method of determining
the dumping margins and the unfair treatments of respondents, had resulted in the erroneouscontinuation of the measure.  In its injury analysis, the United States had undertaken a cumulative
assessment, without examining the existence of required conditions.  Japan considered both (i) the US
decision not to terminate the imposition of the anti-dumping duties on the imports of
corrosion-resistant carbon steel flat products from Japan, and (ii) the US laws, regulations, general
practices, including the DOC Sunset Policy Bulletin on which the decision was based, to be
inconsistent with the United States' obligations under the GATT 1994, the Anti-Dumping Agreement
and the Marrakesh Agreement establishing the WTO.  Japan regretted that the United States had notyet addressed its concerns, and that it was necessary to move forward with a panel process.
Nevertheless, Japan remained open to further discussions with the United States in order to resolve
this matter in a mutually satisfactory manner, if necessary.
25. The representative of the United States said that given that a panel would be established at the
present meeting, he did not wish to repeat the points made at the 17 April DSB meeting, except to
reiterate that the US sunset review regime was consistent with the United States' WTO obligations,
and that the United States was confident that the panel would so agree.
26. 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.
27. The representatives of Canada, Chile , EC, India , Korea , Norway  and Venezuela  reserved their
third-party rights to participate in the Panel's proceedings.WT/DSB/M/124
Page 6
4. Japan – Measures affecting the importation of apples
(a) Request for the establishment of a panel by the United States (WT/DS245/2)
28. The Chairman drew attention to the communication from the United States contained in
document WT/DS245/2.
29. The representative of the United States said that his country was requesting the establishment
of a panel to examine Japan’s measures affecting the importation of US apples.  Since 1994, Japan
had maintained highly restrictive and costly measures on US apples, claiming that these were
necessary to guard against introduction of the plant disease fire blight or the fire blight
disease-causing bacterium.  However, the published scientific evidence demonstrated that mature,
symptomless apples were not carriers of fire blight.  Thus, Japan’s measures lacked a scientific basis
and were inconsistent with the Agreement on the Application of Sanitary and Phytosanitary Measures
(SPS Agreement).  The United States recognized the right of Japan and of every WTO Member todetermine its appropriate level of protection.  The United States was also aware of the costs that
introduction, establishment, and spread of fire blight into Japan would entail.  As a result, the United
States had made significant efforts over many years to address Japan’s concerns about fire blight,
even agreeing to Japan's proposal to carry out joint research to confirm the results of earlier published
scientific studies.  Conducted in 2000 by the US Department of Agriculture’s Agricultural Research
Service and Japan's Ministry of Agriculture, Forestry, and Fisheries, the joint research did confirm
that mature, symptomless apples were not carriers of  fire blight.  However, since the results of this
research became available in February 2001, the Japanese government had continued to refuse to
change its import restrictions.  As a result, the United States had no choice but to proceed with this
panel request.  Accordingly, the United States was requesting that a panel be established at the presentmeeting.
30. The representative of Japan said that his country regretted that the United States had
terminated consultations and had proceeded with the request for the establishment of a panel to
examine this matter.  At this stage, Japan could not agree to the establishment of such a panel.  Fire
blight, or erwinia amylovora  was a serious disease affecting trees such as apples and pears, which
spread from the East Coast of the United States to all over North America, to Europe, and even to
West Asia.  The sanitary and phytosanitary measures currently taken by Japan were indispensable for
preventing the introduction of fire blight as it could cause grave damage to Japanese production.
Japan believed that its measures were consistent with the relevant WTO rules.  On the basis of this
position, Japan had reiterated to the United States on many occasions its willingness to consider the
possibility of amending the sanitary and phytosanitary measures, if the United States provided further
information.  Recently, this point had been made clear to the United States at the experts meeting inOctober 2001 and during the bilateral consultation held on 18 April 2002.  However, no additional
information had been provided by the United States.  Japan had already replied to all the questions
raised by the United States at the 18 April consultation.  In contrast, the United States was yet to
respond to Japan's request for information made at the experts meeting in October 2001, such as data
concerning the occurrence of the disease in Washington and Oregon.  In Japan's view, thoroughdiscussions based on relevant scientific data should be conducted with regard to this dispute.  It was
appropriate and meaningful that the experts of the two sides continued consultations on technical
matters.  He reiterated that Japan could not agree to the establishment of a panel at this juncture as it
was premature.  It was in the benefit of both the United States and Japan to arrive at a mutually
satisfactory solution through further bilateral consultations.
31. The DSB took note of the statements and agreed
 to revert to this matter.WT/DSB/M/124
Page 7
5. United States – Definitive safeguard measures on imports of certain steel products
(a) Request for the establishment of a panel by the European Communities (WT/DS248/12)
32. The Chairman drew attention to the communication from the European Communities
contained in document WT/DS248/12.
33. The representative of the European Communities said that on 7 March 2002, the EC had
requested  consultations against the US steel safeguards.  In the course of the joint consultations held
in Geneva on 11 and 12 April 2002, the EC, together with Japan, Korea, China, Switzerland and
Norway, had conveyed the common view that the protectionist US measures on steel were contrary to
WTO requirements on safeguards and called for their immediate termination.  Unfortunately, these
consultations had not allowed an amicable solution to the matter and the US measures were still in
force.  The EC was therefore requesting the establishment of a panel to examine the US steel
safeguard measures and was confident that the WTO would again rule against the abuse by the UnitedStates of the WTO safeguard provisions.  Indeed, the Appellate Body had already found all six US
safeguards brought to WTO to be inconsistent with the relevant WTO rules.  These included the
following cases:  "Wheat Gluten", "Lamb" and "Line Pipe" on the basis of the Agreement on
Safeguards and "Underwear", "Shirts and Blouses " and "Cotton Yarn" on the basis of safeguard
provisions in the Agreement on Textile and Clothing.  Despite these determinations, the United Statesrepeated in the present steel case the violations of the basic WTO requirements on safeguards already
condemned in previous cases.  The most obvious violations included the following.  First, the United
States had failed to meet the requirement of "sudden, recent, sharp and significant" increase in
imports.  Second, the United States had once again failed to separate and distinguish the injury caused
by imports from the injurious effect of "other factors", in particular of the so-called "legacy costs".Third, as a result, the US safeguard measures had gone beyond the extent necessary to prevent or
remedy the injury caused by, imports.  In other words, the United States simply made the rest of the
world pay for the lack of restructuring of its steel industry.  Fourth, the United States had chosen to
exclude all the imports from FTA partners from the steel safeguards, even when the ITC had
recommended the opposite.  This had resulted in a violation of the "parallelism requirement" betweenthe scope of the safeguard investigation and the scope of the safeguard measures.
34. The representative of the United States stated that it was regrettable that the EC had chosen to
challenge US safeguard measures, which were fully consistent with the applicable portions of the
Safeguards Agreement and the GATT 1994.  The United States was confident that the dispute
settlement process would ultimately reach the same conclusion, should the EC continue to pursue this
matter.  However, the United States could not accept the establishment of a panel at the present
meeting.
35. The representative of Japan said that his delegation wished to take this opportunity to make a
brief statement concerning the US measures.  He said that Japan, together with the EC and other
Members concerned, had held consultations with the United States in April 2002.  It was regrettable
that Japan could not obtain a satisfactory response from the United States.  In Japan's view, the US
measures were in clear violation of the WTO Agreement.  Japan, therefore, urged the United States,once again, to terminate them immediately, and supported the EC request for the establishment of a
panel.  He said that on 21 May 2002, Japan had submitted its own request for the establishment of a
panel concerning the US measures, together with a request for the convening of a special meeting of
the DSB on 3 June 2002.  It was Japan's intention to participate as a third party in this dispute and to
work with the EC and other Members once a panel wa s established on the basis of  the EC request.
36. The representative of Korea recalled that at the 5 April DSB meeting, under the item
concerning the implementation of the DSB's recommendations in the case on "United States – Line
Pipe",  his delegation had made a statement in which it warned that the US action could lead to a
spiral of protectionist measures in steel trade.  Now this warning was becoming more and more aWT/DSB/M/124
Page 8
reality, with China announcing its own provisional safeguard measure on steel citing the need to deal
with the adverse effects of US safeguard measures on its steel industry.  China's action was the latest
in a series of trade restrictive measures on steel imports by different Members since the US action.
Korea was concerned that this trend would continue.  Korea believed that the current situation would
have to be addressed on an urgent basis through the dispute settlement mechanism.  Therefore, Koreahad already requested a special DSB meeting to be held on 3 June to consider its request for the
establishment of a panel to examine the US safeguard measure.  Given the magnitude of US steel
safeguard measures the panel should be established as soon as possible and issue a ruling at the
earliest possible date.
37. The representative of Cuba said that her country was disappointed by some recent events that
it believed threatened the atmosphere in which the negotiations recently initiated under the Doha work
programme should be conducted.  These included defi nitive safeguard measures on imports of certain
steel products imposed by the United States on 5 March 2002, only four months after Ministers in
Doha had given their commitment to trade policy lib eralization.  In Cuba's view, the imposition of
these measures was in contradiction with the provisions of the Doha Ministerial Declaration and
threatened the credibility of WTO commitments and of the WTO.  This situation had already begun to
have a distorting effect on markets.  The resulting speculative activity and withholding of goods hadled to an increase in the prices of steel imports into Cuba, having a damaging impact on its economy.
Cuba urged the United States to abolish its safeguard measures.
38. The representative of Brazil said that on 21 May 2002, his country had requested
consultations with the United States on its safeguard measures.  He said that the letter containing this
information would be made public shortly.
39. The representative of Venezuela said that his country supported the establishment of a panel
to examine this matter.  Venezuela supported the statement made by the EC and, like other countries,
also believed that the US action would lead to a spiral of protectionism.  It, therefore, wished to
condemn the discriminatory nature of the US measures.
40. The representative of the European Communities noted that Japan and Korea had requested a
special DSB meeting on 3 June 2002.  In light of this, the EC wished to inform Members that it would
request the inclusion of its panel request on the agenda of that meeting.
41. The DSB took note of the statements and agreed  to revert to this matter.
6. United States – Rules of origin for textiles and apparel products
(a) Request for the establishment of a panel by India (WT/DS243/5)
42. The Chairman drew attention to the communication from India contained in document
WT/DS243/5.
43. The representative of India said that on 7 May 2002, his country had requested the
establishment of a panel with regard to this dispute.  The panel request was contained in document
WT/DS243 dated 8 May 2002.  India did not wish to re peat all those claims or arguments contained in
its panel request.  India was requesting the establishment of a panel to examine the WTO-consistency
of the US rules of origin relating to textile and apparel products.  His country had previouslyexpressed its concerns that the relevant US legislation and administrative practices had resulted in
extraordinarily complex rules of origin for textile and apparel products under which the criteria that
conferred origin varied between similar products and processing operations.  The structure of the rules
of origin, their implementation and administration, the circumstances under which they had been
adopted and their effect on the conditions of competition for textile and apparel products had led Indiato consider that the US rules of origin were bein g used as instruments to pursue trade objectives, andWT/DSB/M/124
Page 9
had created restrictive, distorting and disruptive effects on international trade.  In India's view, the US
rules of origin relating to textile and apparel pr oducts were inconsistent with its WTO obligations,
particularly those under Article 2 of the Agreem ent on Rules of Origin (ARO).  India had held
consultations with the United States on this issue, however, these consultations had not resulted in a
satisfactory resolution of the dispute.  India was, therefore, requesting the establishment of a panel atthe present meeting.
44. The representative of the United States said that both Section 334 of the Uruguay Round
Agreements Act (1996) and Section 405 of the Trade and Development Act of 2000 were fully
consistent with the United States' obligations under the Agreement on Rules of Origin.  His
Government regretted that India had, nevertheless, chosen to request a panel.  The United States urged
India to reconsider its request, and thus the United States was not in a position to accept the
establishment of a panel at the present meeting.  Beyond this, the United States wished to raise a topicof serious concern relating to the copy of India’s panel request which had been circulated by the
Secretariat.  The circulated copy of the panel request contained an error, namely, it referred to
Article 2 of the ARO.  This reference was not included in the actual panel request which had been
submitted by India, but had apparently been added by the Secretariat.  Panel requests were legal
documents which established the terms of reference of panel proceedings.  They played a central rolein the legal deliberations of the panel.  The DSU authorized Members alone to submit panel requests,
and the Secretariat had no basis or authority for modifying such a request.  The Secretariat could not,
by its action, change the actual panel request submitted, nor could it change the actual terms of
reference of any panel which might be established based on that request.  The panel request in this
dispute was that submitted by India.  The United States noted that India's request did not cite aspecific Article of the ARO, and that the request was deficient in this regard.  However, the United
States appreciated that this omission was a simple ov ersight on the part of India.  Therefore, if India
was to resubmit a corrected version of its panel request, the United States would accept the
establishment of a panel at the first meeting at which that corrected request was considered.
45. The Chairman noted the statement made by the United States that it was not in a position to
accept India's request at the present meeting as well as the procedural comments raised by the United
States regarding the original request submitted by India which had been modified by the Secretariat.
46. The representative of the Secretariat (Legal Affa irs Division) said that in order to allay any
concern among delegations, he wished to clarify certain points in light of the US statement made at
the present meeting.  The United States had stated that the Secretariat modified the panel request
submitted by India.  This was a very serious charge indeed and implied that the Secretariat had been
adding substantive elements to a complaint.  This was not the case.  In this instance, an error had beendiscovered by translators in India's request and had been corrected by staff based on a comparison
with India's request for consultations.  The request for consultations was contained in document
WT/DS243/1 and read in relevant part on page 3 the following:  "India therefore questions the
compatibility of these changes with paragraphs (b), (c), (d) and (e) of Article 2 of the ARO."  India's
request for establishment of a panel contained in a letter dated 7 May 2002, stated in the last sentence:"For these reasons, India considers the United States' rules of origin for textiles and apparel products
to be inconsistent with paragraphs (b), (c), (d ), and (e) of the ARO."  Obviously, even though the
references to the subparagraphs were included, the reference to Article 2 was dropped.  This error was
corrected when the document was circulated.  Document WT/DS243/5 read as follows:  "For these
reasons, India considers the United States' rules of origin for textiles and apparel products to beinconsistent with paragraphs (b), (c), (d) and (e) of  Article 2 of the ARO."  In the Secretariat's view,
this was a correction of a typographical error, not a modification of the request for a panel.  It was the
normal practice of the Secretariat to ensure that such corrections were confirmed by the relevant
parties prior to circulation.  Apparently, India had not been contacted in this instance.  The Secretariat
would ensure that normal procedures would be foll owed in the future.  Presumably, it was not being
suggested that the Secretariat not follow its usual procedures.  Hopefully, the demand was not that the
Secretariat decline to attempt to achieve clarifications and corrections of errors.  Such problemsWT/DSB/M/124
Page 10
occurred with respect to submissions by all  delegations, developed and developing-country Members
alike.  The reason the Secretariat had accepted the Chairman's invitation and had taken the unusual
step of taking the floor in this instance was that it would be unfortunate and not in the interests of the
efficient functioning of the dispute settlement system, if total passivity by the Secretariat was
demanded and simple errors of this type could not be corrected in due course.  Again, he assureddelegations that the normal procedures of contacting the relevant parties – initially, the one submitting
the document – would be followed in the future.  Thus, while the Secretariat accepted the criticism
that its normal procedures had not been followed in  this instance, it wished to emphasize that the
Secretariat was not attempting to substantively modify a panel request, nor would it do so in the
future.
47. The representative of Norway said that the Secretariat had done exactly what it should do and
what especially smaller Members needed the Secretariat to do.  He was surprised about the US
criticism, the largest Member of the WTO with unlim ited legal capacities, to take up such a issue.  He
asked the United States to reconsider its criticism.  He commended the Secretariat for its action and
expressed hope that the Secretariat would continue to help smaller Members in the future to correct
similar errors.
48. The representative of Malaysia said that his delegation wished to be associated with the views
expressed by the representative of Norway.  These views should be taken into account especially the
point concerning small delegations.  The correction made by the Secretariat was required and, as
pointed out by the Secretariat, this was not a substantive change.
49. The representative of India said that his delegation supported the statements made by Norway
and Malaysia.  The oversight that had taken place was a minor one and seen together with the
previous document, namely, the request for consultations, the intention was clear.  India believed that
the Secretariat had not made any substantive change.  However, India also noted the statement made
by the United States that, at the next meeting of the DSB, the United States would accept India's panel
request.
50. The Chairman noted the statement made by the United States that if India submitted a new
request, the United States would be prepared to accept the establishment of a panel at the next DSB
meeting.
51. The DSB took note of the statements and agreed  to revert to this matter.
7. European Communities – Anti-dumping duties on imports of cotton-type bed linen from
India
(a) Recourse to Article 21.5 of the DSU by India:  Request for the establishment of a panel
(WT/DS141/13/Rev.1)
52. The Chairman drew attention to the communication from India contained in document
WT/DS141/13/Rev.1.
53. The representative of India said that on 12 March 2001 the DSB had adopted the Panel
Report, as modified by the Appellate Body, in the case on "European Communities - Anti-Dumping
Duties On Imports Of Cotton-Type Bed Linen From India"  (WT/DS141).  He recalled that these
Reports had concluded that the EC's imposition of definitive anti-dumping duties on imports of
cotton-type bed linen from India was inconsistent with the requirements of the Anti-Dumping
Agreement.  In accordance with these Reports, the DSB had recommended that the EC bring its
measure into conformity with its obligations under the Anti-Dumping Agreement.  On 7 August 2001
the Council of the EC had adopted Regulation 1644/2001 amending the original definitiveanti-dumping duties on bed linen from India, while simultaneously suspending its application.  At thatWT/DSB/M/124
Page 11
time, India had strongly disagreed that this "re-determination" complied with the recommendations of
the Panel and the  Appellate Body.  That "re-determination" also provided for the expiry of the
amended measures within six months after entry into force of the amended Regulation, unless a
review had been initiated before that date.  Unfortunately, on 13 February 2002, the EC had initiated a
so-called "partial interim review" against India,  thereby compounding the problems by basing an
illegal review on a flawed redetermination.  On 8 March 2002 India had requested the EC to enter into
consultations in order to try and solve the problems caused by the re-determination and the partial
interim review.  On 25 and 26 March 2002 these consultations had been held in Geneva.  They had
allowed a better understanding of the respective positions, but had failed to settle the dispute.  This
left India no choice but to seek recourse to Article 21.5 of the DSU, since "there is disagreement as to
the existence or consistency with a covered agr eement of measures taken to comply with the
recommendations and rulings".  In particular, India considered that in implementing therecommendations and rulings of the DSB in this dispute through its re-determination and further
action and by initiating a partial interim review the EC:  (i) continued to miscalculate and overstate
the dumping margins;  (ii) resorted to unwarranted cumulation by combining India's imports with a
country that did not dump;  (iii) overstated the volu me of dumped imports from India;  (iv) sought to
evaluate all relevant economic injury factors even in the absence of adequate data;  (v) had notdemonstrated that the dumped imports caused injury;  (vi) had initiated a review that is impermissible
under the Anti-Dumping Agreement;  and (vii) had failed to respect India's status as a developing
country.  For these reasons India considered th at the EC had failed to comply with the
recommendations of the Panel and the Appellate Body  and thus had failed to comply with the DSB's
recommendations and rulings.  For these reasons, India was requesting that a panel be establishedunder Article 21.5 of the DSU to determine whether the EC had complied with the DSB's
recommendations and rulings by the due date and whether the EC's re-determination and its further
action were consistent with the covered Agreements.
54. The representative of the European Communities said that, with great surprise, the EC had
received India's request for the establishment of Article 21.5 implementation panel and this for
various reasons, not least because the EC was confident that it had fully and faithfully implemented in
all respects the DSB's recommendations and rulings in this case.  On each occasion, the EC had
provided to India all clarifications requested and showed that all relevant DSB's rulings and
recommendations had been scrupulously observed.  In the light of the above and taking into account,
the fact that no anti-dumping duties effectively apply to the relevant Indian exports, the EC did not
see any reason behind India's request for an implementation panel.  Despite this, if India insisted on
its request, the EC was ready to accept the establishment of the panel at the present meeting.
55. The DSB took note of the statements and agreed , pursuant to Article 21.5 of the DSU, to refer
to the original Panel, if possible, the matter ra ised by India in document WT/DS141/13/Rev.1.  The
panel would have standard terms of reference.
56. The representative of the United States reserved  its third-party rights to participate in the
Panel's proceedings.
8. Proposed nominations for the indicative list of governmental and non-governmental
panelists (WT/DSB/W/191)
57. The Chairman drew attention to document WT/DSB/W/191 which contained additional
names proposed for inclusion on the indicative list in accordance with Article 8.4 of the DSU.  He
proposed that the DSB approve the names contained in document WT/DSB/W/191.
58. The DSB so agreed.WT/DSB/M/124
Page 12
9. Canada – Export credits and loan guarantees for regional aircraft
(a) Statement by Brazil
59. The representative of Brazil, speaking under "Other Business", said that the Panel Report in
the case on "Canada - Export Credits and Loan Guarantees for Regional Aircraft", had been circulated
on 28 January 2002, and had subsequently been adopted by the DSB on 19 February 2002.  In itsconclusions and recommendations, the Panel had identified several sales operations of Bombardier's
regional aircrafts that received prohibited subsidies from official agencies of the Canadian
Government.  The Panel, in accordance with Article 4.7 of the Agreement on Subsidies and
Countervailing Measures (SCM Agreement) had r ecommended that Canada "withdraw the subsidies
without delay".  The Panel had established a 90-day period for this withdrawal.  This 90-day period
had expired on 20 May 2002.  At the 8 March 2002 DSB meeting, under the agenda item "Canada -
Export Credits and Loan Guarantees for Regional Aircraft:  Implementation of the recommendationsof the DSB", Canada had merely stated that it "... was considering its options on how best to proceed
with respect to this matter".  Since then, Canada had not provided Brazil in the bilateral context nor
the DSB with any additional information about measures  that it intended to ad opt to comply with the
Panel's recommendations.  Thus, Brazil could only conclude that, according to Article 22.2 of the
DSU, Canada had "fail(ed) to bring the measure found to be inconsistent with a covered agreementinto compliance therewith or otherwise comply w ith the recommendations and rulings within the
reasonable period of time ...".  In line with these arguments, Brazil wished to reserve all its rights
under Article 22 of the DSU, and in particular those related to the authorization of suspension of
concessions and other obligations vis-à-vis Canada.  Bilateral contacts on the civil aircraft disputes
continued to take place and Brazil hoped that they would enable the parties to make significantprogress towards a mutually satisfactorily solution.
60. The representative of Canada said that her country and Brazil were working toward a
resolution of the aircraft dispute, one that would encompass both Canadian and Brazilian
programmes.  A working group from the two countries had held a constructive meeting in New York
on 15 May 2002.  The parties planned to meet again in Canada in June.  The subsidies at issue inCanada – Aircraft case related to several transactions, some involving aircraft that had been delivered
several years ago.  In respect of aircraft delivered prior to 20 May 2002, Canada did not consider that
it was required to take any further steps to comply with the DSB's recommendations.  If Brazil agreed,
it remained for the parties to find an appropriate solution to the matter of undelivered aircraft.  As
Canada had advised Brazil, it would honour its commitments in respect of existing contracts for the
delivery of new aircraft.  She noted that Canada's position in this matter was no different than the
position that Brazil had taken in respect of aircraft financed under its PROEX programme.  Canadahoped that the two countries could agree on a forward-looking resolution of this dispute.
61. The DSB took note of the statements.
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