Document: WT/DS334/R Page K-1 ANNEX K CORRESPONDENCE BETWEEN THE PANEL AND PARTIES REGARDING SECTION VII.G OF THE PANEL REPORT Contents Page Annex K-1 Letter dated 6 August 2007 fro m the United States to the Panel K-2 Annex K-2 Letter dated 8 August 2007 fro m Turkey to the Panel commenting on the United States' letter dated 6 August 2007 K-3
Date: 6 August 2007
Document codes: WT/DS334/R
Complainant: U.S.
Respondent: Turkey
Third parties: Argentina, Australia, China, Egypt, EU, South Korea, Pakistan, Thailand
Dispute stage: Panel
Agreements cited: Art. XI:1, X:1, X:2, III:4, X:3(a)  GATT 1994Art. 4.2  AgricultureArt. 1.4, 3.3, 3.5(e), 3.5(f), 3.5(b), 3.5(d), 3.5(g), 3.5(h), 1.2, 1.3, 1.5, 1.6, 3.2, 3.5(a), 5.1, 5.2, 5.3, 5.4  Import LicensingArt. 2.1, Annex 1  Trade-Related Investment Measures (TRIMs)

ANNEX K

CORRESPONDENCE BETWEEN THE PANEL AND PARTIES
REGARDING SECTION VII.G OF THE PANEL REPORT

Contents Page
Annex K-1 Letter dated 6 August 2007 fro m the United States to the Panel K-2
Annex K-2 Letter dated 8 August 2007 fro m Turkey to the Panel commenting
on the United States' letter dated 6 August 2007
K-3
Annex K-3 Fax dated 9 August 2007 fro m the Panel to the parties K-4
Annex K-4 Letter dated 9 August 2007 fro m the United States to the Panel in
reply to Turkey's letter dated 8 August 2007
K-5
Annex K-5 Fax dated 10 August 2007 fro m the Panel to the parties K-7
Annex K-6 Fax dated 13 August 2007 fro m the Panel to the parties K-8
Annex K-7 Letter dated 20 August 2007 fro m the United States to the Panel K-9
Annex K-8 Letter dated 27 August 2007 from Turkey to the Panel K-10
Annex K-9 Letter dated 30 August 2007 fro m the United States to the Panel K-12
Annex K-10 Fax dated 11 September fr om the Panel to the parties K-13

ANNEX K-1

LETTER DATED 6 AUGUST 2007 FROM THE UNITED STATES
TO THE PANEL

The United States wishes to thank the Panel for its hard work in this dispute and for providing
the parties with the final report of the Panel. Upon review of that report, my authorities have
instructed me to submit the following request.

In the final report issued to the parties, th e Panel has added a new section VII.G on "Special
and Differential Treatment" that had not appeared in the Panel's interim report and in which,
inter alia, the Panel "notes that Turkey is a developing country Member".
1 However, neither party
requested the Panel to make findings on this issue as part of its written request for the Panel to review
precise aspects of the interim report. 2 Therefore, neither party has commented on this issue as part of
the interim review of the Panel's report. Nor h as either party provided any arguments and supporting
facts as part of its submissions in this dispute for the Panel to make findings on this issue. As the
Panel itself notes, "in the course of these Panel proceedings Turkey did not raise any specific
provisions on differential and more-favourable treatment for developing country Members that require
additional consideration".3

The United States does not consider that an en tirely new finding, not requested by either
party, should be made at the interim review stage, particularly as the basis for that finding was not
addressed by the parties during the dispute. Accordi ngly, the United States respectfully requests that
the Panel delete Section VII.G from the report to be circulated to Members.

The United States thanks the Panel for its consid eration of this request. The United States is
providing a copy of this letter directly to Turkey.

1 Panel Report, para. 7.304; see also id. , para. 7.305 (noting "the Panel took into account the
respondent's status as a developing country Member").
2 Understanding on Rules and Procedures Governing the Settlement of Disputes, Article 15.2 ("DSU").
The final sentence of DSU Article 15.2 establishes that , "[i]f no comments are recei ved from any party within
the comment period, the interim report shall be consider ed the final panel report and circulated promptly to
Members".
3 Panel Report, para. 7.304.

ANNEX K-2

LETTER DATED 8 AUGUST 2007 FROM TURKEY
TO THE PANEL COMMENTING ON THE UNITED STATES' LETTER
DATED 6 AUGUST 2007

 Turkey is grateful to the Panel for the oppor tunity to comment on the request put forward
very recently by the United States.

 Turkey believes that Section VII.G to the Pa nel Report accurately describes the reality of
Turkey being a developing country and the fact that, despite Turkey not having invoked any special
and differential provision under the DSU during the panel proceedings, the Panel did occasionally
take into account the respondent's status as a de veloping country when preparing and revising the
timetable for the process. Turkey appreciated the Panel's efforts to accommodate both parties'
requests during the course of the proceedings and, in particular, Turkey's developing country status.

 With respect to the request now being put forward by the United States, it states that " (T)he
United States does not consider that an entirely new finding, not requested by either party, should be
made at the interim review stage". Turkey disagrees with this statement and believes that, pursuant to
Article 12.11 of the DSU, the Panel has correc tly indicated what occurred during the panel
proceedings with respect to Turkey's developing country's status and the absence of specific requests
by Turkey for special and differential treatment. Turkey does not believe th at a specific request by
either party was necessary for this statement to be made by the Panel.

 For this reason, Turkey finds Section VII.G appropriate and accurate and respectfully requests
the Panel not to delete Section VII.G from the report to be circulated to the Members.

 Turkey is providing a copy of those comments directly to the United States.

ANNEX K-3

FAX DATED 9 AUGUST 2007 FROM THE PANEL TO THE PARTIES

 The Panel thanks the United States for its communication dated 6 August and has taken note
of its request that Part VII.G be deleted from the fi nal report. The Panel also thanks Turkey for its
communication of 8 August and takes note of its vi ew that Part VII.G should not be deleted from the
report.

 The Panel notes that this part was only include d in the final version of the report that was
issued to parties. Having considered both parties' views on the issue, however, the Panel feels that
Part VII.G should not be deleted from the final report. This part is only a stat ement that reflects what
occurred during the panel proceedings and does not aff ect the rights and obligations of either party in
the current dispute.

 As stated in Part VII.G, Turkey is a devel oping country Member. In the course of the Panel
proceedings, Turkey did not make reference to an y substantive provisions on differential and more-
favourable treatment for developing country Memb ers in the covered agreements that required
particular consideration. However, in the light of Article 12.10 of the DSU, the Panel took into
account Turkey's status as a developing country Member when preparing and revising the timetable
for the process, including when considering Turkey's requests for extensions of deadlines to submit
responses and comments.

 Accordingly, the Panel intends to circulate its final report, including Part VII.G, to Members
on Friday, 10 August, as earlier announced to parties.

ANNEX K-4

LETTER DATED 9 AUGUST 2007 FROM THE UNITED STATES
TO THE PANEL IN REPLY TO TURKEY'S LETTER DATED 8 AUGUST 2007

 The United States is in receipt of Turkey's letter of 8 August, as well as the Panel's
communication of 9 August. With respect to Turkey's letter, it confirms that at no point in this
dispute – including in the interim review comments – did either party raise the question of Turkey's
status as a developing country Member, let alone provide evidence or arguments on the question. Nor
did Turkey refer to or invoke Article 12.11 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes ("DSU").

 The United States appreciates the Panel's efforts an d diligence in raising this issue. In the
Panel communication of 9 August, the Panel indicat es that Part VII.G of the Panel report "is only a
statement that reflects what occurred during the pane l proceedings and does not affect the rights and
obligations of either party in the current dispute". However, Article 15.1 of the DSU requires that any
descriptive sections of a panel report be provided to the parties in advance for comment. Part VII.G
was not provided as part of the descriptive part of the Panel report in this dispute and so does not
accord with Article 15.1.

In addition, the United States recalls that Article 15.2 of the DSU provides, in pertinent part,
as follows:

"... Within a period of time set by the pane l, a party may submit a written request for
the panel to review precise aspects of the interim report prior to circulation of the
final report to the Members. At the request of a party, the panel shall hold a further
meeting with the parties on the issues identified in the written comments . If no
comments are received from any party within the comment period, the interim report
shall be considered the final report ... ." (Emphasis added).
The panel in Australia – Salmon interpreted this language to mean th at "it is not open to the Panel to
consider anything other than comments dealing w ith ‘precise aspects' of the interim report."
1 In light
of Article 15.2, and inasmuch as neither party co mmented at the interim review stage on the absence
of a discussion in the Panel Report of the S&D provisions of the DSU and Turkey's decision not to
invoke them, the United States respectfully submits th at this issue was "not open to the Panel to
consider".

Furthermore, the United States respectfully disag rees with the Panel's statement that the new
Part VII.G of the final Panel Report "does not affect the rights and obligations of either party in the
current dispute." In Part VII.G, the Panel ma kes a finding that Turkey is a developing country
Member. This finding has obvious implications for various provisions of the WTO Agreements, with
the Panel's discussion of Article 12.10 and 12.11 of the DSU offering but one example. Moreover,
the manner in which this determination was made is unexplained, although Article 12.7 of the DSU
requires a panel to set out the findings of fact and basic rationale behind any findings that it makes.

The inclusion of panel findings and descriptions of the panel proceedings in the final report
that were never submitted to the parties for review and comment in accordance with Article 15 of the
DSU raises significant, important systemic issues. It would be a precedent of deep concern to many
Members and the cause of substantial discussion among Members and at the Dispute Settlement

1 Panel Report, Australia – Measures Affecting Importation of Salmon , WT/DS18/R, adopted 6
November 1998, as modified by the Appellate Body Report, WT/DS18/AB/R, para. 7.3.

Body. And it appears unnecessary in this dispute sinc e Turkey never raised the issue, never requested
the Panel to include any such findings or description, and the Panel itself has characterized Part VII.G
as simply descriptive and not intended to affect either party's rights and obligations.

Accordingly, for the foregoing reasons, the Un ited States respectfully requests the Panel to
reconsider Part VII.G and delete it from the report to be circulated to Members.

ANNEX K-5

FAX DATED 10 AUGUST 2007 FROM THE PANEL TO THE PARTIES

 The Panel takes note of the United States' co mmunication received in the evening of 9 August
and of its request that the Panel delete Part VII.G from the report to be circulated to Members.

 In the light of this request, the Panel has deci ded to delay, until further notice, circulation of
the final report to the Members, originally scheduled for today.

 The Panel will inform parties early next week on any further steps regarding the
United States' request.

ANNEX K-6

FAX DATED 13 AUGUST 2007 FROM THE PANEL
TO THE PARTIES

 Pursuant to the message sent to you on Frid ay, 10 August, the Panel invites the United States,
by close of business, Monday, 20 August , to elaborate or supplement, if it so wishes, its arguments
regarding Part VII.G of the report and the inclusion of that Part in the final report to be circulated to
Members.

 Subsequently, Turkey is invited to make any comments on the United States' request and
arguments by close of business, Monday, 27 August.

 After receiving these comments, the Panel w ill decide on any furthe r action regarding the
United States' request and Part VII.G of the report.

ANNEX K-7

LETTER DATED 20 AUGUST 2007 FROM THE UNITED STATES
TO THE PANEL

The United States thanks the Panel for its communication of 13 August 2007, and its
invitation to the United States to elaborate or suppl ement its arguments regarding Part VII.G of the
report and the inclusion of that Part in the final report to be circulated to Members.

My authorities have instructed me to present the following elaboration and supplement to the
US letter of 9 August. As indicated in that lette r, a key issue presented by Part VII.G is whether a
panel may, after the interim report has been issued and commented upon, include an entirely new part
in its final report. As the United States described in its letter of 9 August, the answer of necessity is
no.

This issue presents important systemic concerns for all Members, regardless of the substance
of Part VII.G. While Turkey may believe that in this instance the added part is accurate, the United
States did not have an opportunity to express a view . Further, one must consider what would happen
if the new part had contained different findings . For example, the United States suspects that
Members would have strong concerns if a panel were to add to its final report a new section that was
not in the interim report that contained new findings and description either on claims presented or
characterizing the panel proceedings (such as the vi ews of experts consulted). Any such addition
would not be in conformity with the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"). It would not matter what the content of that additional part might be.

 Nor is this issue something that may be "cured" at the stage of a panel's final report. As past
panels and the Appellate Body have concluded, it is not appropriate at the interim review stage to
consider new evidence.
1

In addition to these important, systemic concerns, Part VII.G presents another systemic issue.
As the United States noted in its letter of 9 August 2 007, in Part VII.G the Panel's finding that Turkey
is a developing country Member is unexplained, a lthough Article 12.7 of the DSU requires a panel to
set out the findings of fact and basic rationale behi nd any findings that it makes. The lack of citation
to evidence and argument is unsurprising since both parties have confirmed that the issue was never
discussed during the panel proceedings and no evid ence or argumentation was presented by either
party. And again, it is not appropriate to consider new evidence at the interim review stage let alone
at the point of circulation of a final panel report.

Turkey's only reason for including Part VII.G is that it is "accurate" in Turkey's view. The
new Part is not accurate in the view of the Un ited States since, as discussed, this issue was never
raised during the panel proceedings nor did Turkey re fer to or invoke Article 12.11 of the DSU. But
the issue is much larger than whether the new Part is accurate or not. As noted, adding a new part at
this stage of the proceedings raises a number of important, systemic concerns and issues of
conformity with several provisions of the DSU.

Accordingly, for the foregoing reasons as well as those in the US letter of 9 August , the
United States respectfully requests the Panel to delete Part VII.G from the report to be circulated to
Members.

1 Appellate Body Report, European Communities – Trade Description of Sardines , WT/DS231/AB/R,
adopted 23 October 2002, para. 301; Panel Report, European Communities – Selected Customs Matters ,
WT/DS315/R, adopted 11 December 2006, paras. 6.3-6.6.

ANNEX K-8

LETTER DATED 27 AUGUST 2007 FROM TURKEY
TO THE PANEL

 Turkey wishes to thank the Panel for the opport unity to comment on the request put forward
by the United States, most recently on 20 August 2007.

 As we previously stated in our letter 8 August 2007, Turkey fails to understand the concern of
the United States on Part VII.G of the Panel Report where Panel merely implements the provisions of
Article 12.10 and Article 12.11 of the "Unders tanding on Rules and Procedures Governing the
Settlement of Disputes" (DSU). Article 12.11 asserts that "Where one or more of the parties is a
developing country Member, the panel's report shall explicitly indicate the form in which account has
been taken of relevant provisions on differen tial and more-favourable treatment for developing
country Members that form part of the covered agre ements which have been raised by the developing
country Member in the course of the dispute settlement procedures".
1 (emphasis added)

 Also, Article 12.10 of the DSU sates that "… In addition, in examining a complaint against a
developing country Member, the panel shall accord sufficient time for the developing country
Member to prepare and present its argumentation. …".
2 In Turkey's view, those two Articles should
be read together in order to see the rationale be hind Part VII.G where Panel notes the fact that it has
taken into account Turkey's status as a developing country Member when preparing and revising the
timetable for the process.

 In this respect, Turkey believes that Panel is acting according to the provisions of those two
Articles in Part VII.G of the Final Report and the absence of any specific request of Turkey does not
create any impediment to that. In other words, Turk ey believes that its developing country status is a
fact independent of whether or not Turkey has invoked any of the specific substantive provisions on
special and differential treatment. Thus, Turkey's developing country status itself triggers the
obligation on the Panel to accord sufficient time to prepare and present argumentations.

 On the other hand, despite the fact that Turk ey has not invoked any special and differential
provision under the relevant Ag reements during the Panel proceedings, it in fact did invoke
Article 12.10 by its letter dated 27 February 2007 requesting the assistance of the Chairman of the
DSB to extend the period of prior consultations as a developing country. According to the first part of
Article 12.10; "[i]n the context of consultations involving a measure taken by a developing country
Member, the parties may agree to extend the periods established in paragraphs 7 and 8 of Article 4.
If, after the relevant period has elapsed, the consultin g parties cannot agree that the consultations have
concluded, the Chairman of the DSB shall decide, after consultation with the parties, whether to
extend the relevant period and, if so, for how long. " The response of the then Chair was received on
21 March 2006 stating that "… there was no past pr actice in the DSB for dealing with Article 12.10
requests since yours (Turkey's) was the first such request ever made" and in fact, the Chair encouraged
Turkey to bring this issue in the ongoing negotiations. Although that was an issue of the pre-Panel
proceedings Turkey strongly believes that developing country status of Turkey has been considered at
different time segments of this dispute including pre and during the Panel process.

1 Understanding on Rules and Procedures Governing the Settlement of Disputes, Article 12 Panel
Procedures, paragraph 11.
2 Ibid, paragraph 10.

 In addition, the phrase in the United States' comment on 20 August 2007: "… in Part VII.G
the Panel's finding (emphasis added ) that Turkey is a developing country Member …" cannot be
understood considering Turkey's member status within the WTO.

 In conclusion, Turkey respectfully request s the Panel to consider the above-mentioned
reasons together with its 8 August 2007 letter and maintain Part VII.G of the Report.

 Turkey is providing a copy of those comments directly to the United States.

ANNEX K-9

LETTER DATED 30 AUGUST 2007 FROM THE UNITED STATES TO THE PANEL

 The United States is in receipt of Turkey's 27 August response to the elaboration by the
United States of its arguments provided on 20 August. Since that response referred to the discussion
held prior to the Panel’s establishment concerning the applicability of Article 12.10 of the DSU, a
discussion to which the Panel was necessarily not privy, my authorities have instructed me to provide
one clarification to ensure that the Panel has a more complete understanding of that discussion.

 In its letter of 27 August, Turkey recalls that it invoked Article 12.10 of the DSU in a letter
dated 27 February 2006
1 "requesting the assistance of the Chairman of the DSB to extend the period
of prior consultations as a devel oping country". As the Chairman concluded, this invocation was
untimely, occurring after the United States had re quested the establishment of this Panel.
Accordingly, the question of whether Turkey was a developing country Member was neither
considered nor addressed in that discussion. Thus it is inaccurate to say that the "developing country
status of Turkey has been considered at different time segments of this dispute including pre and
during the Panel process". That discussion does not afford any support to Turkey's position on the
issue of Part VII.G.

1 In its 27 August letter, Turkey refers to the date of its letter to the DSB Chairman as 27 February
2007. The actual date of Turkey's letter is 27 February 2006.

ANNEX K-10

FAX DATED 11 SEPTEMBER 2007 FROM THE PANEL TO THE PARTIES

 The Panel is grateful for the comments and observations you have made over the past month
concerning Part VII.G of its report. In the light of Parties' comments and observations, the Panel has
decided to keep Part VII.G of its report in the following, slightly modified form:

"G. SPECIAL AND DIFFERENTIAL TREATMENT
7.302. Pursuant to Article 12.11 of the DSU:
"[W]here one or more of the parti es is a developing country Member, the
panel's report shall explicitly indicate the form in which account has been
taken of relevant provisions on differential and more-favourable treatment for
developing country Members that form part of the covered agreements which
have been raised by the developing country Member in the course of the
dispute settlement procedures."
7.303. In addition, the DSU provides in Article 12.10 that:
"[I]n examining a complaint against a developing country Member, the panel
shall accord sufficient time for the developing country Member to prepare
and present its argumentation."
7.304. The Panel notes that, in the course of these Panel proceedings Turkey did not
raise any specific provisions on differen tial and more-favourable treatment for
developing country Members that require pa rticular consideration, nor do we find
these specialized provisions relevant for th e resolution of the specific matter brought
before this Panel.
7.305. In any event, during the Panel pr oceedings, the Panel took into account the
respondent's status as a developing country Member, a fact not contested by the
complainant, when preparing and revising the timetable for the process. The Panel
attempted, inter alia , to accommodate, to the extent possible, Turkey's requests for
extensions of deadlines to submit responses to the questions posed by the Panel both
after the first and second substantive meetings, as well as Turkey's request for time to
submit comments on the United States comments to the Panel's interim report."
In addition, for reasons of transparency, the Panel has decided to reflect, in a new Annex to its
report, the relevant parts of the various communica tions it has exchanged with the Parties concerning
Part VII.G. The text of this Annex, which would be Annex K, is attached to this facsimile; as the
attached shows, it will also include the text of the current facsimile.

 The Panel intends to inform Parties shortly abou t the date of circulation of its final report to
Members.