RESTRICTED WORLD TRADE
ORGANIZATIONWT/DSB/M/60
21 June 1999
(99-2512)
Dispute Settlement Body
28 April 1999
MINUTES OF MEETING
Held in Centre William Rappard
on 28 April 1999
Chairman:  Mr. Nobutoshi Akao (Japan)
Subjects discussed: Page :
1. Surveillance of implementation of recommendations adopted by the DSB.........................2
(a) India – Patent protection for pharmaceutical and agricultural chemical products:
Status report  by India......................................................................................................... .........2
(b) European Communities - Measures concerning meat and meat products (hormones):
Status report by the European Co mmunities ..............................................................................4
(c) Argentina - Measures affecting imports of footwear, textiles, apparel and other items:
Status report by Argentina ..................................................................................................... .....6
2. Argentina - Safeguard measures on imports of footwear .....................................................6
(a) Request for the establishmen t of a panel by  Indonesia...............................................................6
3. United States - Section 110(5) of US Copyright Act ............................................................10
(a) Request for the establishment of a panel by the European Communities and their
member States.................................................................................................................. .........10
4. Korea - Measures affecting imports of fresh, chilled and frozen beef ...............................10
(a) Request for the establishment of  a panel by the United States .................................................10
5. Proposed nominations for the indicative list of governmental and non-
governmental panelists ......................................................................................................... ..11
6. Korea - Taxes on alcoholic beverages ...................................................................................11
(a) Announcement by Korea ....................................................................................................... ...11
Prior to adoption of the agenda, the United States had requested that the item concerning the
Panel Report on "India- Quantitative Restrictions on Imports of Agricultural, Textile and Industrial
Products" be removed from the proposed agenda.WT/DSB/M/60
Page 2
1. Surveillance of implementation of recommendations adopted by the DSB
(a) India – Patent protection for pharmaceutical and agricultural chemical products:  Status report
by India (WT/DS50/10/Add.4 - WT/DS79/6)
(b) European Communities – Measures concerning meat and meat products (hormones):  Status
report by the European Communities (WT/DS26/17/Add.3 - WT/DS48/15/Add.3)
(c) Argentina – Measures affecting imports of footwear, textiles, apparel and other items:  Status
report by Argentina (WT/DS56/15/Add.3)
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 is
resolved".  He proposed that the three sub-items be considered separately.
(a) India - Patent protection for pharmaceutical and agricultural chemical products: Status report
by India (WT/DS50/10/Add.4 - WT/DS79/6)
The Chairman drew attention to docume nt WT/DS50/10/Add.4 - WT/DS79/6 which
contained India's status report regarding its progress in the implementation of the DSB's
recommendations concerning patent protection for pharmaceutical and agricultural chemical products.
The representative of India recalled that at its meeting on 16 January 1998, the DSB had
adopted the Appellate Body Report and the Panel Re port, as modified by the Appellate Body Report,
pertaining to the US complaint.  On 13 February 1998, India had informed the DSB of its intentions to
meet its WTO obligations with respect to this matter.  On 22 April 1998 India and the United States,in a joint statement, had informed the DSB that th ey had agreed that a reasonable period of time for
implementation would be 15 months;  i.e. until 19 April 1999.  The EC had initiated separate panel
proceedings with regard to India's lack of fulfilment of its obligations under Articles 70.8 and 70.9 of
the TRIPS Agreement.  On 22 September 1998 th e DSB had adopted the Panel Report (WT/DS79/R)
pertaining to this matter.  On 21 October 1998, India had informed the DSB of its intention to meet its
WTO obligations with respect to this matter.  On 25 November 1998, India and the EC, through a
joint statement, had informed the DSB that they had agreed on a reasonable period of time until19 April 1999, in line with the time-period for implementation agreed by India and the United States.
He underlined that the dispute on India's implementation of its obligations under Articles 70.8
and 70.9 had not resulted from India's unwillingne ss to acknowledge its obligations or to abide by
them.  The dispute on Article 70.8 had concerned the question of the legal basis for the mailboxsystem operated by India.  The dispute on Article 70.9 had concerned the question of when the Indian
Executive required the legal authority to implement the provisions of that Article.  The Panels in both
disputes had found that the mailbox, operated by Indi a on the basis of administrative instructions, had
not provided the required degree of legal security for mailbox applications.  India's position that since
no application for exclusive marketing rights had been filed thus far, and therefore there was noviolation, had not been accepted.  It had been considered that the legal requirement to make exclusive
marketing rights available applied immediately from the entry into force of the WTO Agreement.
With respect to the US complaint, the Appellate Body had recommended that the DSB
request India to bring its legal regime into conformity with its obligations under Articles 70.8 and70.9.  With respect to the EC complaint, the Panel had recommended that the DSB request that India
bring its transitional regime for patent protection into conformity with its obligations under the TRIPSWT/DSB/M/60
Page 3
Agreement.  In both cases the DSB recommendations were identical.  He recalled that in its second
status report (WT/DS50 /10/Add.1) India had informed the DSB that, on 8 January 1999, it had
promulgated an Ordinance in order to amend the Patents Act to comply with its obligations under
Articles 70.8 and 70.9, and that a bill to replace the Ordinance, which had a limited period of validity,
would be introduced in the Budget Session of the Parliament.
On 14 January 1999, the United States had requested consultations under Article 4 of the
DSU with India on the Patents (Amendment) Or dinance 1999 (WT/DS50/11).  That request was
without prejudice to the US position that Article 21.5 of the DSU did not require the United States to
enter into consultations with India prior to a re view of implementing measures.  India had responded
positively to the US request for consultations since by promulgating the Ordinance, it had taken
certain measures to meet its obligations.  The EC had participated in these consultations which hadbeen held in Geneva on 11 February 1999.
As stated in the final status report, the amendments to the Patent Act, 1970 passed by both
Houses of the Indian Parliament, had been approved by the President of India and had been notified in
the Gazette of India on 26 March 1999 as the Patents (Amendment) Act, 1999.  This Amendment Acthad effected certain amendments to the Patents Act, 1970 in accordance with the DSB's
recommendations in both cases.  With the coming into force of the Patents (Amendment) Act 1999,
the earlier Ordinance promulgated when the Parliament was not in session had been repealed.  He
noted that the provisions of the Patents (Amendment) Act 1999 were the same as those contained in
the Ordinance.  He expressed India's gratitude to the United States and the EC for ensuring that theconsultations had been used to appreciate the concerns of all parties, and to reach mutually
meaningful solutions.  India was glad that these cooperative efforts had enabled the parties to arrive at
a result, which was both consistent with the DSB's recommendations and satisfactory to all parties.
The representative of the United States said that her country was pleased to address the issue
of the measures taken by India to implement the DSB's recommendations and comply with the
requirements of Articles 70.8 and 70.9.  Both provisions concerned certain transitional obligations
with regard to patent protection for pharmaceutical and agricultural chemical products.  In June 1996
the United States had requested consultations with  India on this matter.  On 16 January 1998, the DSB
had adopted the Reports of the Panel and the Appellate Body recommending that India bring its
regime into compliance with Articles 70.8 and 70.9.  A reasonable period of time for compliance had
expired on 19 April 1999.  In the beginning of 1999, India had promulgated a temporary Ordinance to
meet its obligations, and in the past month it had enacted permanent legislation entitled the Patents
(Amendment) Act, 1999.  This had enabled India to establish a mechanism for the filing of a so-called
mailbox patent application, and a system for granting exclusive marketing rights for pharmaceutical
and agricultural chemical products.  During its consultations with India in January 1999, the United
States had made it clear that it continued to have serious concerns on certain aspects of India's newlaw regarding exclusive marketing rights.
The United States believed that the TRIPS Agreement did not permit Members to grant
compulsory licenses or to impose other exceptions or limitations on exclusive marketing rights.  Nor
did it allow Members to impose conditions on the granting of exclusive marketing rights beyond thosedescribed in Article 70.9.  She recognized that although the US interpretation of the TRIPS
Agreement had not changed, the consultations held with India over the past three months had been
very productive.  Both parties had worked hard to achieve a practical resolution of this matter.  In
light of the discretionary nature of some of the problematic provisions of the Indian law, as well as the
significant steps that India had taken or had pledged to take to mitigate the impact of others, theUnited States was pleased to conclude that no further action by the United States or the DSB would be
required at this stage.  However, the United States wished to reserve its rights under the DSU should
any of the problematic provisions in the Indian law be invoked to the detriment of US right holders in
the future.  The United States thanked India for its cooperation and constructive approach towardsWT/DSB/M/60
Page 4
addressing US concerns, and for its willingness to  consult closely with US officials throughout the
past three months of the implementation period.
  The representative of the European Communities said that the EC had an interest in this case
since a significant number of patent product applications had been filed by European right holders.
His delegation welcomed India's final status report and expressed appreciation for the way in which
India had completed its full legislative procedure on this complex and technical matter, namely,
within a relatively short period of time and against the background of a difficult political situation in
India.  He expressed his delegation's satisfaction with the high quality of the legislation, in particular,
the additional legislative measures proposed by India.  Since the Commission had not yet completed
its assessment of the legislative and regulatory package, he reserved the EC's rights with regard to this
matter.  In the area of intellectual property, a lot depended not only on legislative provisions but onthe practical application of those provisions.  One area of interest to the EC was the way in which
exclusive marketing rights would be handled.
The DSB took note of the statements.
(b) European Communities - Measures concerning meat and meat products (hormones): Status
report by the European Communities (WT/DS26/17/Add.3 - WT/DS48/15/Add.3)
The Chairman drew attention to document  WT/DS26/17/Add.3 - WT /DS48/15/Add.3) which
contained the EC's status report on its progress in the implementation of the DSB's recommendations
on measures concerning meat and meat products.
The representative of the European Communities said that as indicated in the status report, the
EC had prepared a report listing a number of options which were currently under consideration, and
continued to hold discussions with the complaining parties.  The various options had already been
discussed at the 19 March meeting.  Since then the EC had held further discussions with bothcomplaining parties, and had made it clear that on the assumption that it would not be in a position to
implement the DSB recommendations by 13 May, it was willing to consider compensation pending
such implementation.  Since no agreement had yet been reached with the parties concerned these
discussions would continue.
The representative of the United States said that her delegation had noted with interested the
fourth status report submitted by the EC.  The United States had to conclude that the EC would not be
in compliance with the DSB's recommendations by 13 May.  She expressed her country's
disappointment that, once again, th e EC would fail to meet its WTO obligations.  The United States
was concerned that the EC was trying to interpret the WTO rulings to imply that it could come into
compliance by performing a risk assessment.  In both its third and fourth status reports, the EC had
noted that its "risk assessment may not be completed by May 13", as if it would have been incompliance, had the risk assessment been completed.  The Arbitrator had made it clear in his report
that "it would not be in keeping with the requirements of prompt  compliance, to include in the
reasonable period of time, time to conduct studies or to consult experts to demonstrate the consistency
of a measure already judged to be inconsistent " (paragraph 39).  It was not necessary for the EC to
undertake new risk assessments since over four decades of scientific research had found nojustification for the EC's ban. The United States was concerned about the lack of transparency of the
EC's risk assessment studies.  The United States had sought a resolution of this issue for over a
decade.  It had informed the EC of its willingness to  be flexible with regard to examining solutions to
its concerns.  The United States had recently held discussions with the EC and had tried to address the
concerns of European consumers by proposing a la belling system.  These discussions would continue.
However, the dispute could not be resolved unti l US beef obtained access to the EC market.WT/DSB/M/60
Page 5
The representative of Canada said that as indicted by the EC representative, it was evident
that the EC would not be in compliance with the DSB recommendations by 13 May.  He regretted this
outcome and said that this matter should be of concern not only to Canada but to all Members.
Prompt compliance was critical in maintaining the integrity of the dispute settlement mechanism and
in this regard the text of Article 21 of the DSU was clear.  The Arbitrator had concluded that therewere no particular circumstances justifying the EC request to be granted four years for
implementation.  The Arbitrator's reasoning was the commissioning of scientific studies or
consultations with experts was not pertinent to the determination of the reasonable period of time.
The Arbitrator had stated that "it would not be in keeping with the requirements of prompt  compliance
to include in the reasonable period of time, time to conduct studies or to consult experts to
demonstrate the consistency  of a measure already judged to be inconsistent " (paragraph 39).  On the
basis of the four status reports provided by the EC since January 1999, it appeared that the EC hadchosen to ignore the Arbitrator's decision.  The EC had continued to state that it had initiated a
complementary risk assessment.  There had been no indication that the EC had begun considering or
analysing implementation options with respect to the removal of its WTO-inconsistent import
prohibition.  Due to the lack of compliance by the EC two options were available for Canada under
the DSU provisions; i.e. negotiating an acceptable compensation package or requesting authorizationto suspend concessions.  At the 19 March meeting, Canada had indicated that it was prepared to
review compensation offers that would be of bene fit to the Canadian meat industry.  His country
remained open to this option.  He noted that the EC representative had indicated that the EC was
willing to envisage compensation.  At the same time, Canada had begun a domestic consultation
process on possible suspension of concessions.  On 17 April, his Government had published in theCanada Gazette, a Notice of Intention to increase tariffs in response to the EC's ban on imports of beef
produced with hormones.  Tariffs of 100 per cent would be imposed on listed products from EC
member States.  Interested parties had been invited to provide their views on the list by 17 May.  As
indicated at the 17 February meeting, Canada was prepared to exercise its rights under the DSU, and
would request authorization to suspend concessions, if no acceptable resolution was found.  
The representative of Australia said that his delegation had noted the status report submitted
by the EC at the present meeting.  He said that that the EC implementation choices, including on
compensation, had to be consistent with the EC's obligations under the covered agreements and
should not nullify or impair benefits accruing to any Member under those agreements.
The representative of Japan urged the parties to the dispute to continue their discussions in
order to find an acceptable solution without undermining the dispute settlement mechanism.
The representative of the European Communitie s said that the parties to the dispute were
aware that it was not the intention of the EC to ig nore the Arbitrator's decision.  However, the EC was
facing a political situation in which a removal of the ban could not be accepted by Parliament andconsumers, unless scientific studies had demonstrated that hormone-treated beef was safe.  The EC
had sought further studies in order to be able to implement, not to avoid implementation.  At this
stage, the EC was not in a position to implemen t the DSB recommendations.  The EC would try to
proceed as rapidly as possible, and hoped to provide shortly an interim assessment in order to consider
other solutions such as labelling.  However, until such an assessment was made, the political questionremained.  It was not the EC's intention to undermine the dispute settlement system or the WTO, but
there was a major political problem in an area where trade rules were linked to public health
considerations.  It was not clear whether sound science was always the safest way.  He believed that
sound science not accompanied by sound control systems could raise problems of its own.  Therefore,
it was not the intention of the EC to refuse to implement or to disregard the Arbitrator's decision.  TheEC was doing its best and was willing to meet its commitments by compensating for the
implementation that could not be achieved immediately.  It was, however, up to the parties concerned
to either retaliate or to negotiate compensation.  The EC had proposed to compensate as a temporaryWT/DSB/M/60
Page 6
solution as well as to explore how a labelling system could be organized.  In that respect, the US offer
was inadequate because consumers would not be able to identify beef treated with hormones.
The representative of the United States wished to make some additional comments with
regard to one of the options considered by the EC, namely compensation.  As the WTO rules allowed
for compensation, the United States would be willing to consider a package of compensation that
would be appropriate in the amount and value.  However, the EC's WTO obligation was clear:  the EC
had to comply with the DSB rulings by removing its ban on imports on US beef by 13 May.
Compensation was only acceptable as a temporary measure until the EC had complied with the WTO
rulings by lifting the ban.  While the United States recognized that the EC would need some time to
complete its internal procedures, it could not accept a lengthy period and an uncertain outcome.
The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
(c) Argentina - Measures affecting imports of footwear, textiles, apparel and other items: Status
report by Argentina (WT/DS56/15/Add.3)
The Chairman drew attention to document WT /DS56/15/Add.3 which contained Argentina's
status report on its progress in the implementation of the DSB's recommendations on measures
affecting imports of footwear, textiles, apparel and other items.
The representative of Argentina reiterated his statement made at the 19 March meeting that as
a result of Decree 108/99, imports covered by the statistical tax would be taxed in the amount agreed
by Argentina and the United States.  That Decree would come into effect on 30 May 1999.  He
provided this information in conformity with Article 21.6 of the DSU.
The DSB took note of the statements and agreed  to revert to this matter at its next regular
meeting.
2. Argentina - Safeguard measures on imports of footwear
(a) Request for the establishment of a panel by Indonesia (WT/DS123/3)
The Chairman drew attention to the communication from Indonesia contained in document
WT/DS123/3.
The representative of Indonesia said that his Government was requesting the establishment of
a panel to examine the provisional and definitive safeguard measures and the subsequent modification
imposed by Argentina on imports of footwear.  I ndonesia was a significant exporter of footwear to
Argentina.  In the period of 1994-95, his country had been the second biggest footwear supplier toArgentina, but had become the third one in the period of 1996-1997.  In terms of value, Indonesia's
exports of footwear to Argentina had continued to decline from US$24.1 million in 1994 to US$23.7
million in 1995;  US$22 million in 1996, and US$20.7 million in 1997.  Indonesia believed that the
main reason for this decline was the safeguard measures imposed by Argentina.  Since 1993
Indonesia's exports of footwear to Argentina had continued to encounter restrictions.  In December1993, specific duties had been imposed on Indonesia's exports of footwear to Argentina.  Although
Argentina had withdrawn its high specific duties on footwear and had reduced its 3 per cent statistical
tax after the United States had challenged these measures in October 1996, it had notified in July 1997
the WTO that it had replaced its specific duties with equally restrictive specific duties in the form of a
"safeguard measure".  This regime had caused further substantial decline in Indonesia's footwearexports to Argentina, both in terms of volume and value.  Mindful of its rights under the DSU and ofWT/DSB/M/60
Page 7
the inconsistencies of the measures taken by Argentina with its WTO obligations, Indonesia had
participated as a third party in the panel established on 23 July 1998, at the request by the EC.
Despite the fact that that panel had yet to make its decision, in November 1998 Argentina had adopted
a new measure (Resolution 1506/98), which in essence had modified the disputed measure
(Resolution 987/97), and had imposed a tariff-rate quota on imports of footwear in addition to the
safeguard duties previously applied.  Moreover, the new measures had postponed any liberalization of
the original safeguard duty until 25 February 2000, and would allow the liberalization of the tariff-
rate-quota only once during the existence of the measure.  In addition, until the present meeting,
Indonesia was not aware whether Argentina had notified this measure to the WTO.  On 22 April 1998,
Indonesia had requested consultations with Argentina with a view to reaching a mutually satisfactory
solution to this matter.  These consultations had been held on 21 May and 7-8 September 1998 in
Geneva, but had not resulted in a satisfactory resolution of the matter.  On 18 December 1998,Indonesia had requested supplementary consultations with Argentina regarding its tariff-rate-quota
imposed in November 1998.  These consultations had been held on 11 January and 2 February 1999
in Geneva.  Indonesia regretted that the consultations had not led to a satisfactory resolution of the
matter.  As contained in WT/DS123/3, Indonesia believed that the measures taken by Argentina were
in breach of its obligations under the provisions of the Agreement on Safeguards and in violation ofArticle XIX of GATT 1994.  Therefore, Indonesia was requesting the establishment of a panel with
standard terms of reference to consider and decide on the consistencies of those measures with
Argentina's WTO obligations.
The representative of Argentina said that his delegation had two concerns with Indonesia's
request for a panel.  The first was a systemic concern with regard to the timing of the panel request,
and the second related to the proposed terms of reference of the panel.  With regard to the timing of
the request, the safeguard measure on imports of footwear challenged by Indonesia was currently
being examined by the Panel established at the request of the EC and its work would soon be
completed.  He expressed Argentina's concern about repeated panel proceedings against the sameMember on issues that were already the object of a panel proceeding in the late stage, and which
placed an excessive burden on the respondent.  In the case at hand, the Panel established at the request
of the EC would be adopted by the DSB before the new proceeding requested by Indonesia was
completed.  Therefore, the panel requested by Indonesia would become a moot case.  Besides,
repeated panel proceedings could modify the balance of rights under the DSU with regard to the
submissions of parties.  This late panel request would create an imbalance in favour of the
complainant who had already participated as a third party in the first Panel on the same matter.  Thefindings of that Panel would be known at a time when the first written submissions would be made to
the panel requested at the present meeting, or when the first substantive meeting of the parties would
be held.  As a result, Indonesia would have full knowledge of the respondent's arguments.  He asked
whether, under the DSU, the respondent had to reiterate its arguments already submitted to the first
Panel in which Indonesia had participated as a third party.  In practice, the respondent would have todefend itself twice on the same matter against two different parties since the timing of the second
complaint had not allowed for a single panel proceeding under Article 9.1 of the DSU.  Repeated
panel proceedings could undermine the dispute settlement mechanism, in particular, when the
respondent was a developing country with limited resources.  This was a systemic issue and as such
should be resolved in the DSU review.  Although Argentina considered that this request would resultin a misallocation of resources both for the Secretariat and Members, it recognized Indonesia's right to
request a panel.
Argentina considered that the terms of reference proposed by Indonesia did not constitute
standard terms of reference as stipulated in Article 6.2 of the DSU.  While Indonesia's request hadreflected the discussion in the various rounds of consultations, it had not complied with the
requirements of Article 6.2 of the DSU, since the specific measures at issue had not been clearly
identified.  Indonesia requested that the Panel find that Argentina was in breach of its obligations with
respect to "any other measure based upon the determination of serious injury notified by Argentina inWT/DSB/M/60
Page 8
G/SG/N/8/ARG/1".  This implied that hypothetical measures had been included in the terms of
reference.  It was not known what specific measure was at issue, within the meaning of Article 6.2,
that would have to be submitted for examination by the panel.  It was also not clear what legal basis of
the complaint might be invoked in the case of a measure that did not exist.  He asked whether the
hypothetical measure referred to by Indonesia could be declared to be in breach of the Agreement onSafeguards.  If the expression "…any other measure based upon the determination of serious injury
notified by Argentina …" refered to the measures mentioned in the document, then it was redundant.
If, on the contrary, it refered to measures that did not exist it should not be included within the terms
of reference under Article 6.2 of the DSU.  The aim of the dispute settlement mechanism was to find a
positive settlement to disputes.  In the absence of a mutually agreed solution, the first objective of the
dispute settlement mechanism was to secure the withdrawal of the measures concerned if these were
found to be inconsistent with the provisions of any of the covered agreements (Article 3.7 of theDSU).  The DSB could not rule on the withdrawal of hypothetical or future measures.  Taking into
account that the prompt settlement of disputes was essential for the effective functioning of the WTO
(Article 3.3), Argentina was prepared to accept th e establishment of a panel at the present meeting,
provided that Indonesia agreed to modify the terms of reference of the panel by deleting the
expression "any other measure based upon the determination of serious injury notified byArgentina …".
The representative of the European Communities said that as indicated by Argentina, the EC
had requested the establishment of a panel to examine the same matter and that panel had been
established at the DSB meeting on 23 July 1998 to consider the legality or otherwise of the safeguardmeasures taken by Argentina.  The work of the Panel would soon be completed.  The modifications
introduced by Argentina to the disputed measures had also been considered by the Panel.  Under the
existing DSU rules, it was not possible to inform thir d parties of the results of the Panel's work at this
stage.  However, he believed that the work of the Panel and its results would shed considerable light
on these measures, as well as on Argentina's modifications thereto which, the EC continued tobelieve, were not consistent with the WTO rules.
The representative of Indonesia said that in light of the statements made by Argentina and the
EC, her delegation was willing to consider the proposal by Argentina.  However, she was not in a
position to decide on this issue at the present meeting, and had to consult with her authorities.  She
added that Indonesia, as a third party in the Panel established at the request of the EC, was not fully
aware of any developments concerning the ongoing Panel's proceedings.
The representative of Uruguay shared the systemic concerns raised by Argentina with regard
to repeated panel proceedings.
The representative of Hong Kong, China said that his delegation had no trade interest with
regard to the dispute in question.  However, si nce Argentina had raised a systemic issue, his
delegation wished to express its view with regard to  the systemic implications of this matter.  His
delegation considered that, in accordance with Article 10.4 of the DSU, Indonesia had the right to
request a separate panel on the subject-matter already examined by another Panel.
The representative of Argentina said that his country considered that Article 10.4 of the DSU
was not applicable in this case.  Article 10.4 referred to measures taken in the past which had already
been the subject of panel proceedings.  It did not refer to a measure which was being examined by the
ongoing panel as in the case at hand.  Furthermore, this interpretation was in line with the logic of
Article 10.4 because if the parties wished to seek a solution to a dispute, a third party should wait untilthe proceedings had been terminated and the respondent had implemented DSB recommendations.
The Chairman said that the systemic issue rais ed by Argentina could be taken up in the DSU
review.  He noted that this issue had been placed on the agenda of the next informal DSB meeting onWT/DSB/M/60
Page 9
the DSU review.  In the meantime, it was necessary to find a practical solution.  Since Indonesia was
not in a position at the present meeting to respond to the proposal by Argentina, the DSB would have
to revert to this matter at its next regular meeting.
The representative of Indonesia said that Argentina had not objected to Indonesia's request for
a panel, but had proposed some changes with regard to the terms of reference suggested by Indonesia.
She proposed that the DSB establish a panel at the present meeting and that its terms of reference be
discussed at a later date before the next regular meeting.
The representative of Argentina said that his delegation could agree to the establishment of a
panel provided that the terms of reference of the panel were to be discussed in accordance with
Article 7.1 of the DSU.
The Chairman said that it was his understanding that Argentina could agree to the
establishment of a panel on the understanding that the parties to the dispute reached an agreement on
the terms of reference.  In the absence of such an agreement standard terms of reference would apply
in accordance with Article 7 of the DSU.
The representative of Argentina reiterated that his delegation could agree to the establishment
of a panel at the present meeting but not to the terms of reference proposed by Indonesia.  The terms
of reference had to be discussed by the parties to the dispute within the 20 day period referred to in
Article 7.1 of the DSU.  For that purpose, Argentina requested that the DSB authorize the Chairmanto draw up the terms of reference of the panel in consultation with the parties to the dispute.
The representative of Indonesia said that her country's position was to request the
establishment of a panel with the terms of reference contained in WT/DS123/3.  She reiterated that
she was not in a position to make a commitment with regard to any changes to be proposed byArgentina.  However, her delegation was willing to consider the proposal by Argentina.  She therefore
proposed that the DSB establish a panel with the terms of reference proposed by Indonesia.
The representative of Argentina asked whether Indonesia was prepared to discuss the terms of
reference of the panel within the next 20 days, as set out in Article 7.1 of the DSU.  If not, then
Argentina could not agree to the establishment of a panel at the present meeting with the terms of
reference proposed by Indonesia.
The representative of Indonesia said that she had to consult on this matter with her authorities.
At the present meeting her instructions were clear, namely, that a panel be established with the terms
of reference proposed by Indonesia whether or not it wished to discuss Argentina's proposal.
The Chairman said that Argentina had only asked whether Indonesia was in a position to
discuss the terms of reference with Argentina in accordance with Article 7.1.
The representative of Indonesia said that her country was not in a position to accept
Argentina's proposal to discuss the terms of reference.
The representative of Venezuela said that both parties had agreed to the establishment of a
panel, but their positions concerning the terms of reference were different.  Indonesia had to consult
with its capital on this matter.  He drew attention to Article 7.3 of the DSU, that the DSB could
authorize the Chairman to draw up the terms of reference of the panel in consultation with the partiesto the dispute.  Therefore, Argentina's proposal was justified.
The representative of Indonesia said that her delegation was not in a position to agree to the
proposal.WT/DSB/M/60
Page 10
The Chairman reiterated that Indonesia was not in a position to discuss the terms of reference
with Argentina and therefore a panel could not be established at the present meeting.  He proposed
that the DSB revert to this matter at a later date.
The DSB took note of the statements and to agreed  revert to this matter at a later date.
3. United States - Section 110(5) of US Copyright Act
(a) Request for the establishment of a panel by the European Communities and their member
States (WT/DS160/5)
The Chairman drew attention to the communication from the European Communities and
their member States contained in document WT/DS160/5.
The representative of the European Communities said that Section 110(5) of the US
Copyright Act had resulted in a situation where bars, restaurants and retail stores, as well as major
retail store corporations were exempted from paying royalties while the music played on theirpremises contributed to their profits.  In addition, th e EC deplored the fact that the challenged statute
had recently been amended in order to apply to an even larger share of restaurants, bars, and retail
stores throughout the United States, to the detriment of the legitimate rights of authors of music
works.  The statute had not only entailed economic losses to the EC music industry, it had also
violated several provisions of the Bern Convention for the Protection of Literary and Artistic Worksas incorporated into the TRIPS Agreement through its Article 9.1.  Since the consultation with the
United States had failed to reach a mutually acceptable solution, the EC was requesting the
establishment of a panel.
The representative of the United States said that her delegation could not accept the
establishment of a panel at the present meeting.  The United States considered that Section 110(5) of
the US Copyright Act was fully consistent with its obligations under the TRIPS Agreement.  The
TRIPS Agreement specifically permitted Members to provide limitations and exceptions to the
exclusive rights of copyright holders.  Section 110 (5) was a reasonable limitation.  The "Fairness in
Music Licensing Act" passed by US Congress in Autumn 1998, had amended Section 110(5) but had
not affected its consistency with the TRIPS Agreement.
The DSB took note of the statements and agreed  to revert to this matter.
4. Korea - Measures affecting imports of fresh, chilled and frozen beef
(a) Request for the establishment of a panel by the United States (WT/DS161/5)
The Chairman drew attention to the communication from the United States contained in
document WT/DS161/5.
The representative of the United States said that Korea had a history of restraining beef
imports.  Its ban on beef imports, which had only been removed in 1989, had been replaced with a
temporary quota and severe restrictions on the ability to import and distribute foreign beef.  Although
the quota had to be terminated by 1 January 2001, Korea had instituted various other measures that
were currently impeding market access and had placed in doubt its commitment to fully liberalize
trade in imported beef by the deadline of 2000.  Korea had severely restricted import authority to a
small number of governmental and commercial entities, thus, effectively controlling both wholesaleWT/DSB/M/60
Page 11
and retail channels of distribution, as well as the volume and price of imported beef admitted to enter
the market.  Korea had further confined the opportunity available to imported beef by requiring that
foreign beef might only be sold in specialized impor t stores that were subject to a regulatory regime
that discriminated against imports.  Imports had been further restricted by the imposition of other
charges not provided for in its schedule of conces sions.  Korea had also significantly expanded its
domestic support to cattle producers in 1998.  As a result, Korea had failed to meet its domestic
support reduction commitment under the Agreement on Agriculture.  Together with its trade
restrictive measures, this action had seriously jeopardized the opportunity of exporters to participate
in Korea's market.  The United States believed that Korea's measures with respect to beef were
inconsistent, in important respects, with its WTO obligations.  Since Korea had not taken action to
address its concerns in this area despite numerous bilateral and multilateral discussions during 1998,
the United States was making its first request for a panel on this matter.
The representative of Korea said that his delegation was not in a position to consent to the
establishment of a panel at the present meeting.  Korea believed that its system concerning imports of
beef, which included separation of sales outlets, maintenance of a quota system, imposition of a mark-
up, limitation of import authority and domestic support to the cattle industry, was in conformity withKorea's WTO obligations.  Korea had made sincere efforts to seek an amicable and mutually
satisfactory solution to this issue through consultations with the United States pursuant to the
provisions of Article 3.7 of the DSU.  Therefore, Korea regretted that the United States had opted to
resort to a panel process at this stage.
The DSB took note of the statements and agreed
 to revert to this matter.
5. Proposed nominations for the indicative list of governmental and non-governmental
panelists (WT/DSB/W/99)
The Chairman drew attention to document WT/DSB/W/99 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/99.
The DSB so agreed.
6. Korea - Taxes on alcoholic beverages
(a) Announcement by Korea
The representative of Korea, speaking under "Other Business", said that pursuant to
Article 21.3 of the DSU, the EC, the United States and Korea had agreed on 23 April 1999 to appoint
Mr. C. Ehlermann who had served as a member of the division during the Appellate review of the
case on "Korea - Taxes on Alcoholic Beverages", as arbitrator with the task of determining areasonable period of time for implementation of the DSB's recommendations with regard to this case.
The arbitrator's ruling would be provided by 7 June 1999.  His delegation was informing the DSB of
the agreement for the sake of transparency.
The DSB took note of the statements.
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