UNITED STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT (SECOND COMPLAINT)
Document: Recourse to Article 22.6 of the DSU by the United States Constitution of the Arbitrator Note by the Secretariat
Date: 5 November 2012
Document codes: WT/DS353/20
Complainant: EU
Respondent: U.S.
Third parties: Australia, Brazil, Canada, China, Japan, South Korea
Dispute stage: Implementation & Compliance
Agreements cited: Art. 3.1, 3.2, 5, 6.3, 1.1, 2  Subsidies and Countervailing Measures (SCM)Art. III:4  GATT 1994

UNITED STATES – MEASURES AFFECTING TRADE
IN LARGE CIVIL AIRCRAFT
(SECOND COMPLAINT)

Recourse to Article 22.6 of the DSU by the United States

Constitution of the Arbitrator

Note by the Secretariat

1. At the meeting of the Dispute Settlement Body (DSB) on 23 October 2012, the
European Union stated that the United States had not brought measures found to result in adverse
effects into compliance with their obligations under the Agreement on Subsidies and Countervailing
Measures (SCM Agreement) and that it had requested authorization to take countermeasures.
1
2. The United States objected to the level of su spension of concessions or other obligations
contained in the European Union's request and clai med that the principles and procedures set forth in
Article 22.3 of the DSU had not been followed. The United States also stated that the
European Union was not entitled to request aut horization under Article 4 of the SCM Agreement
because the DSB's recommendations and rulings do not include any recommendation with respect to
Article 4. The United States requested the matter be referred to arbitration under Article 22.6 of the
DSU. The DSB agreed that the ma tter raised by the United States 2 is referred to arbitration as
required by Article 22.6 of the DSU.
3. Article 22.6 of the DSU provides as follows:
"When the situation described in paragraph 2 occurs, the DSB, upon request, shall
grant authorization to suspend concessions or other obligations within 30 days of the
expiry of the reasonable period of time unl ess the DSB decides by consensus to reject
the request. However, if the Member con cerned objects to the level of suspension
proposed, or claims that the principles and procedures set forth in paragraph 3 have
not been followed where a complaining part y has requested authorization to suspend
concessions or other obligations pursuant to pa ragraph 3(b) or (c), the matter shall be
referred to arbitration. Such arbitration sha ll be carried out by the original panel, if
members are available, or by an arbitrator 15 appointed by the Director-General and
shall be completed within 60 days after the date of expiry of the reasonable period of
time. Concessions or other obligations sh all not be suspended during the course of
the arbitration."
(original footnote) 15 The expression "arbitrator" shall be interpreted as referring either to an
individual or a group.

1 See WT/DS353/17.
2 See WT/DS353/19.

4. Article 4.10 of the SCM Agreement provides as follows:
"In the event the recommendation of the DSB is not followed within the time-period
specified by the panel, which shall comme nce from the date of adoption of the
panel’s report or the Appellate Body's report, the DSB shall grant authorization to the
complaining Member to take appropriate
9 countermeasures, unless the DSB decides
by consensus to reject the request."
(original footnote) 9 This expression is not meant to allow countermeasures that are
disproportionate in light of the fact that the subsidies dealt with under these provisions are
prohibited.
5. Article 4.11 of the SCM Agreement provides as follows:
In the event a party to the dispute request s arbitration under paragraph 6 of Article 22
of the Dispute Settlement Understanding (" DSU"), the arbitrator shall determine
whether the countermeasures are appropriate.10
(original footnote) 10 This expression is not meant to allow countermeasures that are
disproportionate in light of the fact that the subsidies dealt with under these provisions are
prohibited.
6. Article 7.9 of the SCM Agreement provides as follows:
"In the event the Member has not taken a ppropriate steps to remove the adverse
effects of the subsidy or withdraw the subs idy within six months from the date when
the DSB adopts the panel report or the Appellate Body report, and in the absence of
agreement on compensation, the DSB shall grant authorization to the complaining
Member to take countermeasures, commensur ate with the degree and nature of the
adverse effects determined to exist, unless the DSB decides by consensus to reject the
request."
7. Article 7.10 of the SCM Agreement provides as follows:
"In the event that a party to the dispute requests arbitration under paragraph 6 of
Article 22 of the DSU, the arbitrator sha ll determine whether the countermeasures are
commensurate with the degree and nature of the adverse effects determined to exist."
8. The Arbitration will be carried out by the original panel, namely:
 Chairperson: Mr Crawford Falconer

 Members: Mr Francisco Orrego Vicuña
 Mr Virachai Plasai