CHILE – PRICE BAND SYSTEM AND SAFEGUARD MEASURES RELATING TO CERTAIN AGRICULTURAL PRODUCTS
Document: Recourse to Article 21.5 of the DSU by Argentina Request for Consultations
Date: 25 May 2004
Document codes: WT/DS207/17
Complainant: Argentina
Respondent: Chile
Third parties: Australia, Brazil, Canada, China, Colombia, Costa Rica, EU, Ecuador, El Salvador, Guatemala, Honduras, Japan, Nicaragua, Paraguay, Peru, Thailand, Venezuela, U.S.
Dispute stage: Implementation & Compliance
Agreements cited: Art. XIX:1, II  GATT 1994Art. 4  AgricultureArt. 2, 3, 4, 5, 6, 12  Safeguards

CHILE – PRICE BAND SYSTEM AND SAFEGUARD MEASURES
RELATING TO CERTAIN AGRICULTURAL PRODUCTS

Recourse to Article 21.5 of the DSU by Argentina

Request for Consultations

 The following communication, dated 19 May 2004, from the delegation of Argentina to the
delegation of Chile and to the Chairperson of the Dispute Settlement Body, is circulated pursuant to
Article 21.5 of the DSU.

 On instruction from my Government, I have the pleasure to submit herewith Argentina's
request for consultations with Chile pursuant to paragraph 1 of the "Understanding between the
Argentine Republic and the Republic of Chile Re garding Procedures under Articles 21 and 22 of the
DSU with Respect to the Dispute Chile - Price Band System and Safeguard Measures Relating to
Certain Agricultural Products (WT/DS207)" and Article XXIII:1 of the GATT 1994.

Request for Consultations in Connection with the Recourse by Argentina
to Article 21.5 of the DSU

 On 23 October 2002, the Dispute Settlement Body (DSB) adopted the Report of the Appellate
Body1 and the Report of the Panel 2 as modified by the Appellate Body in the dispute Chile - Price
Band System and Safeguard Measures Relating to Certain Agricultural Products The Appellate Body
found that Chile's price band system (hereinafter PBS) was inconsistent with Article 4.2 of the
Agreement on Agriculture.

 The Appellate Body further concluded as follows:

"The Appellate Body recommends that the DSB request Chile to bring its price band
system, as found, in this Report and in the Panel Report as modified by this Report, to
be inconsistent with the Agreement on Agriculture , into conformity with its
obligations under that Agreement."
 On 6 December 2002, Chile communicated a requ est to the DSB that the determination of a
reasonable period be the subject of binding arbitr ation, in accordance with Article 21.3(c) of the
Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter the
DSU).3

 On 17 March 2003, the award of the arbitrator determined that the reasonable period of time
for Chile to implement the recommendations and ruli ngs of the DSB was 14 months from the date of
the adoption of the above-mentioned reports. This reasonable period of time expired on
23 December 2003.

 On 25 September 2003, Chile published in the Official Journal Law No. 19.897 establishing
rules on the importation of goods into the country , amending Article 12 of Law No. 18.525 and the
Customs Tariff, and on 4 October 2003 Chile publis hed in the Official Journal Supreme Decree
No. 831 of the Ministry of Finance regulating th e application of Article 12 of Law 18.525, as
substituted by Article 1 of Law 19.897.
4 This Decree regulates certain aspects of the PBS, the
modifications of which entered into force on 16 D ecember 2003 for the products at issue in this
dispute, with the exception of edible vegetable oils , which ceased to be subject to the PBS as of the
date of publication of Law No. 19.897.5

1 WT/DS207/AB/R.
2 WT/DS207/R.
3 WT/DS207/9.
4 WT/DS207/15 of 22 September 2003, WT/DS207/15/Add.1 of 28 October 2003, and
WT/DS207/15/Add.2 of 21 November 2003.
5 National Customs Service of the Government of Chile, Technical Undersecretariat and Department of
Classification, Circular No. 292 of 14 October 2003. See also Chile's statement to the DSB of
7 November 2003 (WT/DSB/M/157, paragraph 20).

 Argentina strongly disagreed that these changes to the PBS, as regards wheat and wheat flour,
were in compliance with the recommendations of the Panel and the Appellate Body.6

 On 24 December 2003, Argentina and Chile concluded an "Unders tanding between the
Argentine Republic and the Republic of Chile Re garding Procedures under Articles 21 and 22 of the
DSU with Respect to the Dispute " (WT/DS207).
7

 In the light of this Agreement and of Article XXIII:1 of the GATT 1994, and without
prejudice to its other rights under the WTO, Argentina hereby requests consultations with Chile.

 Specifically, Argentina considers that, thr ough Law No. 19.897 and Supreme Decree No. 831
of 2003, Chile modified the PBS in such a way that imports of the products at issue in this dispute are
still affected by the imposition of specific duties and rebates whose application continues to be subject
to floor and ceiling parameters, as well as to the reference price mechanism.

 Thus, it would appear that Chile has maintained a measure sim ilar to a variable import levy
and a minimum import price with respect to the products at issue in this dispute. At the same time,
Chile imposes "other duties or charges" on imports of the said products that are not recorded in the
relevant column of its Schedule. Finally, it grants treatment less favourable than that accorded to the
same products of Chilean origin. In other words, Chile has not ensured the conformity of its laws,
regulations and administrative procedures with its obligations as provided in the WTO Agreements.

 Consequently, Argentina considers that the measures adopted by Chile to implement the
recommendations and rulings of the DSB are inconsis tent, inter alia, with the following provisions of
the covered agreements:

 Article 4.2 of the Agreement on Agriculture;

 the second sentence of Article II.1(b) of the GATT 1994;

 paragraph 4 of Article III of the GATT 1994,

and hence,

 Article XVI.4 of the Marrakesh Agre ement Establishing the World Trade
Organization.

 Since the Understanding regarding procedur es under Articles 21 and 22 of the DSU with
respect to this dispute stipulates that "Argentina shall request consultations, which the parties shall
agree to hold within 15 days from the date of circulation of the request"
8, Argentina looks forward to
receiving Chile's reply to this request at an early date in order to fix a mutually acceptable date and
venue for the consultations.