EUROPEAN UNION – MEASURES AFFECTING TARIFF CONCESSIONS ON CERTAIN POULTRY MEAT PRODUCTS REPORT OF THE PANEL
Document: Addendum
Date: 28 March 2017
Document codes: WT/DS492/R/Add.1; WT/DS492/R.
Complainant: China
Respondent: EU
Third parties: Brazil, Russia, U.S., Argentina, Canada, India, Thailand
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. XXVIII, XIII, XIII:2, II:1, II:2, I:1  GATT 1994

EUROPEAN UNION – MEASURES AFFECTING TARIFF CONCESSIONS ON
CERTAIN POULTRY MEAT PRODUCTS
REPORT OF THE PANEL
Addendum
This addendum contains Annexes A to C to the Report of the Panel to be found in document

LIST OF ANNEXES
ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working Procedures of the Panel A-2
Annex A-2 Amended Working Procedures of the Panel A-7

ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 First executive summary of the arguments of China B-2
Annex B-2 Second executive summary of the arguments of China B-9
Annex B-3 First executive summary of the arguments of the European Union B-16
Annex B-4 Second executive summary of the arguments of the European Union B-23

ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Executive summary of the arguments of Argentina C-2
Annex C-2 Executive summary of the arguments of Brazil C-6
Annex C-3 Executive summary of the arguments of Canada C-9
Annex C-4 Executive summary of the arguments of the Russian Federation C-13
Annex C-5 Executive summary of the arguments of Thailand C-15
Annex C-6 Executive summary of the arguments of United States C-22

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ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working Procedures of the Panel A-2
Annex A-2 Amended Working Procedures of the Panel A-7

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ANNEX A-1
WORKING PROCEDURES OF THE PANEL
Adopted on 16 December 2015

1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU"). In addition, the following Working
Procedures shall apply.
General

2. The deliberations of the Panel and the documents submitted to it shall be kept confidential.
Nothing in the DSU or in these Working Pro cedures shall preclude a party to the dispute ("party")
from disclosing statements of its own positions to the public. Members shall treat as confidential
information submitted to the Panel by another Member which the submitting Member has
designated as co nfidential. If a party submits a confidential version of its written submissions to
the Panel, it shall also, upon request of a Member, provide a non -confidential summary of the
information contained in its submissions that could be disclosed to the public.
3. The Panel shall meet in closed session. The parties, and Members having notified their interest
in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU ("third
parties"), shall be present at the meetings only when invited by the Panel to appear before it.
4. Each party and third party has the right to determine the composition of its own delegation
when meeting with the Panel. Each party and third party shall have the responsibility for all
members of its own delegation and s hall ensure that each member of such delegation acts in
accordance with the DSU and these Working Procedures, particularly with regard to the
confidentiality of the proceedings.
Submissions

5. Before the first substantive meeting of the Panel with the parti es, each party shall submit a
written submission in which it presents the facts of the case and its arguments, in accordance with
the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to the second
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by
the Panel.
6. A party shall submit any request for a preliminary ruling at the earliest possible opportunity
and in any event no later than in its first written submission to the Panel. I f China requests such a
ruling, the European Union shall submit its response to the request in its first written submission.
If the European Union requests such a ruling, China shall submit its response to the request prior
to the first substantive meeting of the Panel, at a time to be determined by the Panel in light of
the request. Exceptions to this procedure shall be granted upon a showing of good cause.
7. Each party shall submit all factual evidence to the Panel no later than during the first
substantive meeting, except with respect to evidence necessary for purposes of rebuttal, answers
to questions or comments on answers provided by the other party. Exceptions to this procedure
shall be granted upon a showing of good cause. Where such exception has been granted, the Panel
shall accord the other party a period of time for comment, as appropriate, on any new factual
evidence submitted after the first substantive meeting.
8. Where the original language of an exhibit is not a WTO working language, the submitti ng party
or third party shall submit a translation into the WTO working language of the submission at the
same time. The Panel may grant reasonable extensions of time for the translation of such exhibits
upon a showing of good cause. Any objection as to th e accuracy of a translation should be raised
promptly in writing, preferably no later than the next filing or meeting (whichever occurs earlier)

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following the submission which contains the translation in question. Any objection shall be
accompanied by a detailed explanation of the grounds of objection and an alternative translation.
9. In order to facilitate the work of the Panel, each party and third party is invited to make its
submissions in accordance with the attached WTO Editorial G uide for Panel Submis sions, to the
extent that it is practical to do so.
10. To facilitate the maintenance of the record of the dispute and maximize the clarity of
submissions, each party and third party shall sequentially number its exhibits throughout the
course of the dispute. For example, exhibits submitted by China could be numbered CHN -1,
CHN-2, etc. If the last exhibit in connection with the first submission was numbered CHN -5, the
first exhibit of the next submission thus would be numbered CHN-6.
Questions

11. The Panel may at any time pose questions to the parties and third parties, orally or in writing,
including prior to each substantive meeting.
Substantive meetings

12. Each party shall provide to the Panel the list of members of its delegation in advance of each
meeting with the Panel and no later than 5.00 p.m. the previous working day.
13. The first substantive meeting of the Panel with the parties shall be conducted as follows:
a. The Panel shall invite China to make an opening statement to present its case first.
Subsequently, the Panel shall invite the European Union to present its point of view.
Before each party takes the floor, it shall provide the Panel and other participants at the
meeting with a provisional written version of its statement. In the event that
interpretation is needed, each party shall provide additional copies for the interpreters,
through the Panel Secretary. Each party shall make available to the Panel and the other
party the final version of its opening statement as well a s its closing statement, if a ny,
preferably at the end of the meeting, and in any event no later than 5.00 p.m. on the
first working day following the meeting.
b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask each other questions or make c omments, through the Panel. Each party shall then
have an opportunity to answer these questions orally. Each party shall send in writing,
within a timeframe to be determined by the Panel, any questions to the other party to
which it wishes to receive a response in writing. Each party shall be invited to respond in
writing to the other party's written questions within a deadline to be determined by the
Panel.
c. The Panel may subsequently pose questions to the parties. Each party shall then have
an opportunity to answer these questions orally. The Panel shall send in writing, within a
timeframe to be determined by it, any questions to the parties to which it wishes to
receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to
present a brief closing statement, with China presenting its statement first.
14. The second substantive meeting of the Panel with the parties shall be conducted as follows:
a. The Panel shall ask the European Union if it wishes to avail itself of the right to present
its case first. If so, the Panel shall invite the European Union to present its opening
statement, followed by China. If the European Union chooses not to avail itself of that
right, the Panel shall invite China to present its opening statement first. Before each
party takes the floor, it shall provide the Panel and other participants at the meeting
with a pro visional written version of its statement. In the event that interpretation is

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needed, each party shall provide additional copies for the interpreters, through the Panel
Secretary. Each party shall make available to the Panel and the other party the final
version of its opening statement as well as its closing statement, if any, preferably at the
end of the meeting, and in any event no later than 5.00 p.m. of the first working day
following the meeting.
b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask each other questions or make comments, through the Panel. Each party shall then
have an opportunity to answer these questions orally. Each party shall send in writing,
within a timeframe to be determined by the Pan el, any questions to the other party to
which it wishes to receive a response in writing. Each party shall be invited to respond in
writing to the other party's written questions within a deadline to be determined by the
Panel.
c. The Panel may subsequently p ose questions to the parties. Each party shall then have
an opportunity to answer these questions orally. The Panel shall send in writing, within a
timeframe to be determined by it, any questions to the parties to which it wishes to
receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to
present a brief closing statement, with th e party that presented its opening statement
first, presenting its closing statement first.
Third parties

15. The Panel shall invite each third party to transmit to the Panel a written submission prior to
the first substantive meeting of the Panel with the p arties, in accordance with the timetable
adopted by the Panel.
16. Each third party shall also be invited to present its views orally during a session of this first
substantive meeting, set aside for that purpose. Each third party shall provide to the Panel t he list
of members of its delegation in advance of this session and no later than 5.00 p.m. the previous
working day.
17. The third-party session shall be conducted as follows:
a. All third parties may be present during the entirety of this session.
b. The Panel shall first hear the arguments of the third parties in alphabetical order. Third
parties present at the third -party session and intending to present their views orally at
that session, shall provide the Panel, the parties and other third -parties with provisional
written versions of their statements before they take the floor. Third parties shall make
available to the Panel, the parties and other third parties the final versions of their
statements, preferably at the end of the session, and in any event no la ter than
5.00 p.m. of the first working day following the session.
c. After the third parties have made their statements, the parties may be given the
opportunity, through the Panel, to ask the third parties questions for clarification on any
matter raised i n the third parties' submissions or statements. Each party shall send in
writing, within a timeframe to be determined by the Panel, any questions to a third party
to which it wishes to receive a response in writing.
d. The Panel may subsequently pose questio ns to the third parties. Each third party shall
then have an opportunity to answer these questions orally. The Panel shall send in
writing, within a timeframe to be determined by it, any questions to the third parties to
which it wishes to receive a respon se in writing. Each third party shall be invited to
respond in writing to such questions within a deadline to be determined by the Panel.

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Descriptive part

18. The description of the arguments of the parties and third parties in the descriptive part of the
Panel report shall consist of executive summaries provided by the parties and third parties, which
shall be annexed as addenda to the report. These executive summaries shall not in any way serve
as a substitute for the submissions of the parties and third par ties in the Panel's examination of
the case.
19. Each party shall submit executive summaries of the facts and arguments as presented to the
Panel in its written submissions and oral statements, in accordance with the timetable adopted by
the Panel. These summaries may also include a summary of responses to questions . Each such
executive summary shall not exceed 15 pages. The Panel will not summarize in the descriptive
part of its report, or annex to its report, the parties' responses to questions.
20. Each third p arty shall submit an executive summary of its arguments as presented in its
written submission and statement in accordance with the timetable adopted by the Panel. This
summary may also include a summary of responses to questions, where relevant. The execu tive
summary to be provided by each third party shall not exceed 6 pages.
Interim review

21. Following issuance of the interim report, each party may submit a written request to review
precise aspects of the interim report and request a further meeting with the Panel, in accordance
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no
later than at the time the written request for review is submitted.
22. In the event that no further meeting with the Panel is requeste d, each party may submit
written comments on the other party's written request for review, in accordance with the timetable
adopted by the Panel. Such comments shall be limited to commenting on the other party's written
request for review.
23. The interim rep ort, as well as the final report prior to its official circulation, shall be kept
strictly confidential and shall not be disclosed.
Service of documents

24. The following procedures regarding service of documents shall apply:
a. Each party and third party shall submit all documents to the Panel by filing them with
the DS Registry (office No. 2047).
b. Each party and third party shall file 5 paper copies of all documents it submits to the
Panel. Exhibits may be filed in 4 copies on CD-ROM and 2 paper copies. The DS Registrar
shall stamp the documents with the date and time of the filing. The paper version shall
constitute the official version for the purposes of the record of the dispute.
c. Each party and third party shall also provide an electronic copy of all documen ts it
submits to the Panel at the same time as the paper versions, preferably in Microsoft
Word format, either on a CD -ROM, a DVD or as an e -mail attachment. If the electronic
copy is provided by e -mail, it should be addressed to DSRegistry@wto.org, with a copy
to ****.****@wto.org, ****.****@wto.org, and ****.****@wto.org. If a CD -ROM is
provided, it shall be filed with the DS Registry.
d. Each party shall serve any document submitted to the Panel directly on the other party.
Each party shall, in addition, serve on all third parties its written submissions in advance
of the first substantive meeting with the Panel. Each third party shall serve any
document submitted to the Panel directly on the parties and all other third parties. Each
party and third party shall confirm, in writing, that copies have been served as required
at the time it provides each document to the Panel.

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e. Each party and third party shall file its documents with the DS Registry and serve copies
on the other party (and third parties where appropriate) by 5.00 p.m. (Geneva time) on
the due dates established by the Panel. A party or third party may submit its documents
to another party or third party in electronic format only, subject to the recipient party or
third party's prior written approval and provided that the Panel Secretary is notified.
f. The Panel shall provide the parties with an electronic version of the descripti ve part, the
interim report and the final report, as well as of other documents as appropriate. When
the Panel transmits to the parties or third parties both paper and electronic versions of a
document, the paper version shall constitute the official versi on for the purposes of the
record of the dispute.
25. The Panel reserves the right to modify these procedures as necessary, after consultation with
the parties.

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ANNEX A-2
AMENDED WORKING PROCEDURES OF THE PANEL
Adopted on 16 December 2015
Amended on 3 February 2016
1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU"). In addition, the following Working
Procedures shall apply.
General

2. The deliberations of the Panel and the documents submitted to it shall be kept confidential.
Nothing in the DSU or in these Working Procedures shall preclude a party to the dispute ("party")
from disclosing statements of its own positions to the public. Members shall treat as confidential
information submitted to the Panel by another Member which the submitting Member has
designated as confidential. If a party submits a confidential version of its written submissions to
the Panel, it shall also, upon request of a Member, pro vide a non -confidential summary of the
information contained in its submissions that could be disclosed to the public.
3. The Panel shall meet in closed session. The parties, and Members having notified their interest
in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU ("third
parties"), shall be present at the meetings only when invited by the Panel to appear before it.
4. Each party and third party has the right to determine the composition of its own delegation
when meeting with the Panel. Each party and third party shall have the responsibility for all
members of its own delegation and shall ensure that each member of such delegation acts in
accordance with the DSU and these Working Procedures, particularly with regard to t he
confidentiality of the proceedings.
Submissions

5. Before the first substantive meeting of the Panel with the parties, each party shall submit a
written submission in which it presents the facts of the case and its arguments, in accordance with
the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to the second
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by
the Panel.
6. A party shall submit any request for a preliminary rulin g at the earliest possible opportunity
and in any event no later than in its first written submission to the Panel. If China requests such a
ruling, the European Union shall submit its response to the request in its first written submission.
If the European Union requests such a ruling, China shall submit its response to the request prior
to the first substantive meeting of the Panel, at a time to be determined by the Panel in light of
the request. Exceptions to this procedure shall be granted upon a showing of good cause.
7. Each party shall submit all factual evidence to the Panel no later than during the first
substantive meeting, except with respect to evidence necessary for purposes of rebuttal, answers
to questions or comments on answers provided by the o ther party. Exceptions to this procedure
shall be granted upon a showing of good cause. Where such exception has been granted, the Panel
shall accord the other party a period of time for comment, as appropriate, on any new factual
evidence submitted after the first substantive meeting.
8. Where the original language of an exhibit is not a WTO working language, the submitting party
or third party shall submit a translation into the WTO working language of the submission at the
same time. The Panel may grant re asonable extensions of time for the translation of such exhibits
upon a showing of good cause. Any objection as to the accuracy of a translation should be raised
promptly in writing, preferably no later than the next filing or meeting (whichever occurs ear lier)
following the submission which contains the translation in question. Any objection shall be
accompanied by a detailed explanation of the grounds of objection and an alternative translation.

- A-8 -

9. In order to facilitate the work of the Panel, each party and third party is invited to make its
submissions in accordance with the attached WTO Editorial G uide for Panel Submissions, to the
extent that it is practical to do so.
10. To facilitate the maintenance of the record of the dispute and maximize the clarity of
submissions, each party and third party shall sequentially number its exhibits throughout the
course of the dispute. For example, exhibits submitted by China could be numbered CHN -1,
CHN-2, etc. If the last exhibit in connection with the first submission was numbered CHN -5, the
first exhibit of the next submission thus would be numbered CHN-6.
Questions

11. The Panel may at any time pose questions to the parties and third parties, orally or in writing,
including prior to each substantive meeting.
Substantive meetings

12. Each party shall provide to the Panel the list of members of its delegation in advance of each
meeting with the Panel and no later than 5.00 p.m. the previous working day.
13. The first substantive meeting of the Panel with the parties shall be conducted as follows:
a. The Panel shall invite China to make an opening statement to present its case first.
Subsequently, the Panel shall invite the European Union to present its point of view.
Before each party takes the floor, it shall provide the Panel an d other participants at the
meeting with a provisional written version of its statement. In the event that
interpretation is needed, each party shall provide additional copies for the interpreters,
through the Panel Secretary. Each party shall make availab le to the Panel and the other
party the final version of its opening statement as well a s its closing statement, if any,
preferably at the end of the meeting, and in any event no later than 5.00 p.m. on the
first working day following the meeting.
b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask each other questions or make comments, through the Panel. Each party shall then
have an opportunity to answer these questions orally. Each party shall send in writing,
within a timeframe to be determined by the Panel, any questions to the other party to
which it wishes to receive a response in writing. Each party shall be invited to respond in
writing to the other party's written questions within a deadline to be determin ed by the
Panel.
c. The Panel may subsequently pose questions to the parties. Each party shall then have an
opportunity to answer these questions orally. The Panel shall send in writing, within a
timeframe to be determined by it, any questions to the parties to which it wishes to
receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.
d. Once the questioning has concluded, the Panel shall afford each party an opportunity t o
present a brief closing statement, with China presenting its statement first.
14. The second substantive meeting of the Panel with the parties shall be conducted as follows:
a. The Panel shall ask the European Union if it wishes to avail itself of the right to present
its case first. If so, the Panel shall invite the European Union to present its opening
statement, followed by China. If the European Union chooses not to avail itself of that
right, the Panel shall invite China to present its opening statement fi rst. Before each
party takes the floor, it shall provide the Panel and other participants at the meeting
with a provisional written version of its statement. In the event that interpretation is
needed, each party shall provide additional copies for the interpreters, through the Panel
Secretary. Each party shall make available to the Panel and the other party the final
version of its opening statement as well as its closing statement, if any, preferably at the

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end of the meeting, and in any event no later th an 5.00 p.m. of the first working day
following the meeting.
b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask each other questions or make comments, through the Panel. Each party shall then
have an opportunity to answer these questions orally. Each party shall send in writing,
within a timeframe to be determined by the Panel, any questions to the other party to
which it wishes to receive a response in writing. Each party shall be invited to respond in
writing to the other party's written questions within a deadline to be determined by the
Panel.
c. The Panel may subsequently pose questions to the parties. Each party shall then have an
opportunity to answer these questions orally. The Panel shall send in writing, wit hin a
timeframe to be determined by it, any questions to the parties to which it wishes to
receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to
present a brief closing statement, with the party that presented its opening statement
first, presenting its closing statement first.
Third parties

15. The Panel shall invite each third p arty to transmit to the Panel a written submission prior to
the first substantive meeting of the Panel with the parties, in accordance with the timetable
adopted by the Panel.
16. Each third party may be present during the entirety of the substantive meetings with the
Panel.
17. Each third party shall also be invited to present its views orally during a session of this first
substantive meeting, set aside for that purpose. Each third party shall provide to the Panel the list
of members of its delegation in advanc e of this session and no later than 5.00 p.m. the previous
working day.
18. The third-party session shall be conducted as follows:
a. All third parties may be present during the entirety of this session.
b. The Panel shall first hear the arguments of the third par ties in alphabetical order. Third
parties present at the third -party session and intending to present their views orally at
that session, shall provide the Panel, the parties and other third -parties with provisional
written versions of their statements bef ore they take the floor. Third parties shall make
available to the Panel, the parties and other third parties the final versions of their
statements, preferably at the end of the session, and in any event no later than
5.00 p.m. of the first working day following the session.
c. After the third parties have made their statements, the parties may be given the
opportunity, through the Panel, to ask the third parties questions for clarification on any
matter raised in the third parties' submissions or statements . Each party shall send in
writing, within a timeframe to be determined by the Panel, any questions to a third party
to which it wishes to receive a response in writing.
d. The Panel may subsequently pose questions to the third parties. Each third party shal l
then have an opportunity to answer these questions orally. The Panel shall send in
writing, within a timeframe to be determined by it, any questions to the third parties to
which it wishes to receive a response in writing. Each third party shall be invit ed to
respond in writing to such questions within a deadline to be determined by the Panel.

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Descriptive part

19. The description of the arguments of the parties and third parties in the descriptive part of the
Panel report shall consist of executive summaries provided by the parties and third parties, which
shall be annexed as addenda to the report. These executive summaries shall not in any way serve
as a substitute for the submissions of the parties and third parties in the Panel's examination of
the case.
20. Each party shall submit executive summaries of the facts and arguments as presented to the
Panel in its written submissions and oral statements, in accordance with the timetable adopted by
the Panel. These summaries may also include a summary of responses to questions. Each such
executive summary shall not exceed 15 pages. The Panel will not summarize in the descriptive
part of its report, or annex to its report, the parties' responses to questions.
21. Each third party shall submit an executive summary of its arguments as presented in its
written submission and statement in accordance with the timetable adopted by the Panel. This
summary may also include a summary of responses to questions, where relevant. The executive
summary to be provided by each third party shall not exceed 6 pages.
Interim review

22. Following issuance of the interim report, each party may submit a written request to review
precise aspects of the interim report and request a further meeting with the Panel, in accordance
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no
later than at the time the written request for review is submitted.
23. In the event that no further meeting with the Panel is requested, each party may submit
written comments on the other party's written request for review, in accordance with the timetable
adopted by the Panel. Such comments shall be limited to commenting on the other party's written
request for review.
24. The interim report, as well as the final report prior to its official circulation, shall be kept
strictly confidential and shall not be disclosed.
Service of documents

25. The following procedures regarding service of documents shall apply:
a. Each party and third party shall submit all documents to the Panel by filing th em with
the DS Registry (office No. 2047).
b. Each party and third party shall file 5 paper copies of all documents it submits to the
Panel. Exhibits may be filed in 4 copies on CD-ROM and 2 paper copies. The DS Registrar
shall stamp the documents with the d ate and time of the filing. The paper version shall
constitute the official version for the purposes of the record of the dispute.
c. Each party and third party shall also provide an electronic copy of all documents it
submits to the Panel at the same time as the paper versions, preferably in Microsoft
Word format, either on a CD -ROM, a DVD or as an e -mail attachment. If the electronic
copy is provided by e -mail, it should be addressed to DSRegistry@wto.org, with a copy
to ****.****@wto.org, ****.****@wto.org, and ****.****@wto.org. If a CD -ROM is
provided, it shall be filed with the DS Registry.
d. Each party shall serve any document submit ted to the Panel directly on the other party.
Each party shall, in addition, serve on all third parties its first and second written
submissions, written responses to questions and comments, and related exhibits. Each
third party shall serve any document s ubmitted to the Panel directly on the parties and
all other third parties. Each party and third party shall confirm, in writing, that copies
have been served as required at the time it provides each document to the Panel.

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e. Each party and third party shall file its documents with the DS Registry and serve copies
on the other party (and third parties where appropriate) by 5.00 p.m. (Geneva time) on
the due dates established by the Panel. A party or third party may submit its documents
to another party or third party in electronic format only, subject to the recipient party or
third party's prior written approval and provided that the Panel Secretary is notified.
f. The Panel shall provide the parties with an electronic version of the descriptive part, the
interim report and the final report, as well as of other documents as appropriate. When
the Panel transmits to the parties or third parties both paper and electronic versions of a
document, the paper version shall constitute the official version for the purposes o f the
record of the dispute.
26. The Panel reserves the right to modify these procedures as necessary, after consultation with
the parties.

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ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 First executive summary of the arguments of China B-2
Annex B-2 Second executive summary of the arguments of China B-9
Annex B-3 First executive summary of the arguments of the European Union B-16
Annex B-4 Second executive summary of the arguments of the European Union B-23

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ANNEX B-1
FIRST EXECUTIVE SUMMARY OF THE ARGUMENTS OF CHINA
I. Introduction
1. In this dispute, China challenges the European Union's determination and allocation of tariff
rate quotas (TRQs) which are the sole compensation for the withdrawal of its unlimited tariff
concessions for poultry meat.
2. China is the second largest producer of poultry in the world and a significant exporter of
poultry meat products, including to the European Union. Yet, in denying China's principal or
substantial supplying interest, the Eur opean Union stated that China's share in the trade affected
by the concessions was insufficient, while choosing to ignore the effect of the sanitary measures
(SPS) measures that it had imposed on Chinese poultry meat products which had acted effectively
as a ban on imports into the European Union of Chinese products.
3. China contends that the European Union's TRQs for poultry meat products (1) do not
maintain the balance of tariff concessions existing prior to the withdrawal, (2) do not give due
credit to China's future trade propects or its share of the European Union market absent the TRQs,
and (3) do not offer to Chinese poultry meat products the share of imports into the European
Union commensurate with their comparative advantages.
II. The European Un ion's SPS Measures Imposed On Imports Of Poultry Meat
Products From China And Their Impact
4. China is not challenging the European Union's SPS measures per se . China nevertheless
submits that the the impact of these SPS measures on the trade flows of the products in question
should have been taken into account in the process of determining the TRQs, their level and their
allocation.
5. Imports of Chinese poultry meat were completely banne d in the European Union from
23 May 1996 through 8 February 2000 and from 14 March 2002 to 30 July 2008. Even when
special heat treatment requirements allow certain types of cooked poultry meat products from
China to be imported into the EU as exceptions to the import ban on all poultry meat products
from China, between 8 February 2000 to 14 March 2002 and after 30 July 2008, uncooked poultry
meat or cooked poultry that did not undergo the specific heat treatment could not be imported into
the EU.
III. Legal Claims
A. China's Claims Under Article XXVIII
6. Pursuant to Article XXVIII:1, a WTO Member may withdraw or modify a concession provided
that it negotiates with the WTO Members who have initial negotiating rights and a principal
supplying interest (PSI) or consult with WTO Members who have a substantial supplying intere st
(SSI). Paragraphs 4 and 7 of Note Ad Article XXVIII:1 establish the rules on how to appropriately
determine which Members have PSI or SSI, i.e. by the actual share of imports or the share of
imports that should have been obtained in the absence of the d iscriminatory quantitative
restrictions. Essentially, all products are equally expected to have access to the EU market based
on the tariff concessions that were negotiated and extended to all on an MFN basis. Accordingly,
any discriminatory quantitative restriction that has affected the shares of imports should be taken
into account and allowance should be made for such restriction. To do otherwise would mean that
the Article XXVIII:2 requirement to maintain a general level of reciprocal concessions would not be
satisfied.

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1. The European Union Violated Article XXVIII:1 By Failing To
Recognise China's PSI or SSI Status
a. The European Union Import Bans Were Discriminatory
Quantitative Restrictions
7. The fact that the European Union subjects Chinese poult ry meat to import bans is not in
question. What is at issue is whether the import bans are "discriminatory quantitative restrictions"
within the meaning of paragraphs 4 and 7 of Note Ad Article XXVIII:1.
8. The term "restriction" has a broad scope which id entifies not just a condition placed on
importation but a condition that has a limiting effect. As a result of the EU's various SPS measures,
from 2002 to 2008, there was an effective import ban on poultry meat products from China. An
import ban, by its n ature, is a "prohibition" that not only restricts but prevents imports of the
product subject to the regulatory measure. Accordingly, the import ban resulting from the EU's
SPS measures falls within the scope of "quantitative restrictions".
9. The concept of "discriminatory" quantitative restrictions covers not only those that are
prohibited by the covered agreements but also others that are justifiable under relevant provisions
of the covered agreements. China agrees with the Appellate Body that the determ ination of
"discriminatory" should be based on the provision concerned, which in this case is Article XXVIII.
The overall purpose, as provided in Article XXVIII:2, is to "endeavour to maintain a general level
of reciprocal and mutually advantageous concess ions not less favourable to trade than that
provided in this Agreement ". By only taking actual import volumes into consideration but not
import bans due to SPS measures when identifying WTO Members for Article XXVIII negotiations
or consultations, this would mean that:
(i) WTO Members whose imports were affected by import bans due to SPS measures
would be prevented from participation in the negotiations or consultations;
(ii) The condition of "in the absence of discriminatory restrictions " in paragraphs 4 a nd 7
of the Note Ad Article XXVIII:1 would be rendered meaningless; and
(iii) The TRQ or the TRQ plus compensation would not result in the maintenance of
concessions at the general level of reciprocity and mutual advantages that had existed
before the modification of concessions.
10. Negotiations under Article XXVIII aim to maintain a general level of reciprocal and mutually
advantageous concessions not less favourable than what existed in the period preceding the
withdrawal of concessions. What that level is should be a function of the tariff bindings for
unlimited import volumes that existed prior to their withdrawal or modification, and not a function
of imports that are affected by differential treatment. The import bans on all Chinese poultry meat
products from 2002 to 2008, clearly show that a distinction was made between imports from China
and those from other WTO Members, and have affected the shares of China's imports of poultry
products in the European Union. In other words, the EU's SPS measures a re "discriminatory
quantitative restrictions" for the purpose of the application of Article XXVIII within the meaning of
Notes 4 and 7 of Ad Article XXVIII:1.
b. The European Union Used Non -representative Periods To
Determine PSI or SSI
11. The identifica tion of the reference period for the determination of PSI or SSI must be
compatible with the purpose of the determination of WTO Members with PSI or SSI, that is to
identify which of the WTO Members have or would have had large enough exports of the subjec t
products in the absence of discriminatory quantitative restrictions. In keeping with that purpose
and in light of the rights and interests of other Members that will otherwise be excluded from
negotiations or consultations, the period to be taken into ac count must be representative so as to
permit an accurate determination of the Members with a PSI or SSI.
12. The adjustment of the reference period is necessary where the three -year period preceding
the notification of the intention to withdraw or amend a concession was tainted by the existence of

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discriminatory quantitative restrictions and/or data for a more recent period has become available
before the end of the negotiations and consultations.
13. China has submitted sufficient factual evidence to supp ort its claims of a substantial or a
principal supplying interest. The evidence includes, inter alia , China's poultry meat production
capacity, its poultry meat imports to the world in general and to specific other countries, as well as
to the European Union following the partial lifting of the import bans.
14. In protracted negotiations such as those for part of the TRQs that lasted three years, China
submits that at the very least, re -assessment should occur as soon as there is evidence of the
developments materially affecting the determination of who holds a PSI or SSI, or affecting the
determination of the future trade prospects. By failing to account for import developments since
the relaxation of its import ban, the reference period used by the Europe an Union is not
"representative".
15. In the present case, China higlights three facts (1) the three -year period mentioned in the
European Union's initial notification was affected by the import bans; (2) the negotiations and
consultations by the European Union were so protracted as to render the trade data for the period
used by the EU ancient history; and (3) the statistical data show resumption of imports into the
European Union of China poultry meat after the partial relaxation of the import bans. China
submits that, based on this data and the information generally available on China’s production and
competitiveness in the field of poultry meat, the European Union should have reconsidered
whether it was negotiating or consulting with all WTO Members holding a PSI or SSI.
2. The European Union Violated Article XXVIII:2 and P aragraph 6 of
the Understanding on the Interpret ation of Article XXVIII of
GATT 1994
16. Article XXVIII allows WTO Members to m odify concessions bound under Article II but
requires the balance in the general level of reciprocal concessions to be maintained. There is no
discretion in this regard, especially since tariff liberalisation is one of the fundamental goals of the
WTO.
17. Article XXVIII:2 directs the Members involved in negotia tion and consultations to maintain a
general level of reciprocal and mutually advantageous concessions not only vis-à-vis themselves
but also vis-à-vis all other WTO Members. The use of the word "general" in Article XXVIII:2
supports that view. If Article XXVIII:2 only intended to maintain the level of concessions as
between the withdrawing WTO Member and the WTO Members with which it negotiates or which it
consults, the provision should have read that the aim was to maintain "the level of reciprocal and
mutually advantageous concessions " or "the level of reciprocal and mutually advantageous
concessions between them".
18. This also finds support in the findings by the Appellate Body who agreed with the panel in EC
– Poultry, which stated that:
If a preferent ial treatment of a particular trading partner not
elsewhere justified is permitted under the pretext of ‘compensatory
adjustment’ under Article XXVIII:2, it would create a serious
loophole in the multilateral trading system. Such a result would
fundamentally alter the overall balance of concessions Article
XXVIII is designed to achieve. (emphasis added)
19. It is further supported by the negotiating history of Article XXVIII of the GATT 1994.
20. Thus, the outcome of a modification of concessions must:
(i) Achieve an overall balance of concessions assessed within the multilateral context,
taking into consideration the interests of WTO Members without an initial negotiating
right, PSI or SSI;

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(ii) Maintain a general level of reciprocal and mutually advantag eous concessions as
provided in its Schedule of Concessions prior to the modification; and
(iii) Be extended to all other WTO Members on an MFN basis.
21. What that outcome should be is further guided by paragraph 6 of the Understanding on the
Interpretation of Article XXVIII of GATT 1994, which specifically applies to the replacement of an
unlimited tariff concession by a TRQ, as well as provides the basis for the calculation of
compensation.
22. Where TRQs are allocated during the modification negotiatio ns, compliance w ith
Article XXVIII:2 necessitates a comparison at the level of the WTO Members to which the quota
was allocated rather than at the global level only. It would not make any sense to fix a global TRQ
taking into account overall future prospec ts without taking into account future trade prospects at
the level of the separate TRQs in which the global TRQ is broken down. To do otherwise would
result in over -compensation for some and under -compensation for others, thereby creating
discrimination. Thus, in reading Article XXVIII:2 together with paragraph 6 of the Understanding
and applied in the context of the current dispute, the assessment must be at the level of the
allocated TRQ as well as at the level of the global TRQ.
23. In order for the TR Qs to be compensation, they should be set at the level allowing China to
import such quantities of poultry meat products into the European Union within the TRQ as are in
line with its future trade prospects. Pursuant to paragraph 6 of the Understanding, th e WTO
Member replacing an unlimited tariff concession by a TRQ must accord compensation based on the
greater of (i) trade "in the most recent representative three -year period increased by the average
annual growth rate or 10 percent or (ii) trade in the mo st recent year increased by 10 percent". In
other words, the volume of the TRQ should reflect the natural growth level of exports of Chinese
poultry meat products to the European Union.
24. In the case of protracted negotiations, the period for determinati on of compensation should
be adjusted in light of latest available trade data. Adjustments should also be made to account for
the existence of the import bans. Being kept out of a market due to import bans as a result of
sanitary requirements is different from being shut out due to modified concessions. Chinese
poultry meat producers understood that they would have access to the European Union's market
based on the European Union's tariff commitments, as soon as they/their products meet the
European Union's sanitary controls. But now, because of the European Union's modified
concessions in the form of TRQs, most Chinese poultry meat products would be subject to the
higher out -of-quota tariff rates (because the compensatory TRQs for "Others" are small), even
though their improved sanitary controls and practices meet the European Union's sanitary
requirements.
25. By using a period tainted by a ban on imports of Chinese poultry meat products into the
European Union, the TRQs determined by the European Union ar e not at a level reflecting future
growth prospects. The European Union's modifications of concessions have disturbed its balance of
concessions vis-a-vis China. It also means that the European Union has in effect extended the
effect of the SPS measures it imposed on China permanently.
B. China's Claims Under Article XIII
1. The European Union's Administration of TRQs Is Discriminatory
And Violates Article XIII:1
26. China contends that the general application of the provisions of Article XIII are necessar ily
applicable to all TRQs. As explicitly acknowledged by the Appellate Body in EC – Poultry,
irrespective of the status of the TRQs instituted under the provisions of Article XXVIII, they must
equally respect Article XIII of the GATT 1994. Otherwise, the object and purpose of the non -
discrimination provision of Article XIII would be defeated.
27. First, the requirement of Article XIII:1 is that imports from all third countries must be
similarly restricted. As the Appellate Body in EC – Bananas II (Article 21.5 – Ecuador II)/EC –
Bananas III (Article 21.5 – US) established, there can be no discrimination in the level of access

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that is given to the import market. The mere fact the the European Union allocated a share of the
TRQs for poultry meat to "others" does not mean that products from such other Members are
similarly restricted to those from Thailand and/or Brazil. In the present case, for those poultry
meat products where the European Union has allocated TRQ shares to WTO Members other than
Brazil and/or Thailand, it did so in volumes and portions that are so small as to allow no
meaningful access to or participation in the TRQs. Thus, the benefit afforded by the TRQ is
reserved nearly exclusively to two WTO Members and other WTO Members , especially China which
had and has substantial supplying interests, are precluded de facto from having access to (and
participating in) the TRQs in violation of Article XIII:1 of the GATT 1994.
28. Second, if all countries must be similarly restricted, then all Members wi th a substantial
supplying interest must be similarly restricted. In the present case, the European Union negotiated
with and allocated country -specific shares to Brazil and Thailand which it recognised as having
principal or substantial supplying interest s. China submits and has demonstrated that it held a
substantial supplying interest and thus accordingly, should have been (but was not) allocated a
country-specific share of the TRQ, similar to those allocated to Brazil and Thailand.
29. Third, where there is an allocation of a TRQ, "[m]embers not having a substantial supplying
interst will be able, if sufficiently competitive, to gain market share in the "others" category and
possibly achieve "substantial supplying interest " status which, in turn, would p rovide them the
opportunity to receive a country -specific allocation by invoking the provisions of Article XIII:4 ", as
noted by the panel in EC – Bananas III (Ecuador). In the present dispute, the European Union has
allocated very small "others" shares in the TRQs (and for certain tariff lines, none) and the new
out-of-quota tariff rates are much higher than the in -quota rates. The only conclusion here is that
all WTO Members are not given "access and an opportunity of participation", and are not "similarly
restricted".
30. Finally, where import bans due to SPS measures are applied to a WTO Member but not to
others, the determination of TRQs without taking into account the existence and impact of such
import bans would lead to a long -term freezing of those SPS measures, hardly a situation where
all third countries are "similarly restricted".
2. The European Union's Failure To Establish TRQs Based On A
Representative Period And Take Into Account The Import Bans And
Comparative Advantages Violates Article XIII:2
31. The chapeau of Article XIII:2 of the GATT 1994 sets forth a general non -discriminatory
obligation with respect to the allocation of tariff quota among Members, whether they hold a n SSI
or not. The Appellate Body in EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III
(Article 21.5 – US) confirmed that the standard for compliance with the chapeau of Article XIII:2 is
high; the TRQs must be set at levels such as to be the least trade-distortive possible. The TRQs
must afford:
(i) all WTO Members access to the TRQs; and
(ii) all WTO Members competitive opportunities under the TRQs that mimics "their
comparative advantage" vis-à-vis other WTO Members participating in the TRQs.
32. TRQs must be allocated such that WTO Members are in a position t o exploit their
comparative advantages -- be that in terms of their cost of production, the nature and properties
of their products or other factors -- and, thus, to make use of competitive opportunities to increase
their trade with the WTO Member imposing the TRQs. They will then achieve the share they would
have obtained in the absence of the TRQs.
33. In line with the panel reports in US – Line Pipe and in EEC – Chilean Apples, the historical
trade patterns used for the determination of the share that W TO Members might be expected to
obtain in the absence of TRQs must be the trade patterns during a period preceding the imposition
or allocation of the TRQs. By using 2006-2008, a period remote from the allocation of the TRQs in
the Second Modification Pack age, as the reference period, the EU violated the chapeau of
Article XIII:2.

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34. In addition, Article XIII:2(d) provides that the representative period must be selected with
due account being taken of special factors , such as import bans due to SPS measure s which curb
the natural comparat ive advantages of a WTO Member. They are not themselves an element of
competition. The facts in this case demonstrate that China could satisfy the sanitary requirements
and that its exports of poultry meat to the European U nion increased significantly after the lifting
of the import bans. As such, the natural comparative advantages of the WTO Member once the
SPS measures are lifted or relaxed must be the basis for the determination of the TRQs.
35. Accordingly, determining TRQs based on a reference period that is affected by import bans
due to SPS measures violates the requirements of the chapeau of Article XIII:2. A s stipulated by
Article XIII:2(d), the reference period must also take into account special factors. Import ba ns
clearly affect trade in the product; trade flows in a period where import bans are in place can not
be said to be representative. Thus, the reference period affected by import bans must be adjusted.
Otherwise, the country -specific TRQs and the "other" shares would not reflect the comparative
advantages nor accord competitive opportunities that WTO Members might have expected to
obtain in the absence of the TRQs.
36. China has shown that the import bans due to the European Union's SPS measures have
affected Chinese poultry meat imports into the European Union for all periods taken into account
by the EU. Older periods were also not representative because they too were affected by import
bans. As a result, adjustments should have been made to neutralize the impact of the import
bans. In light of the Havana Reports and the GATT panel findings in EEC – Chilean Apples, such
adjustments could have been made by considering China's comparative advantages in terms of its
cost of production, the nature and propertie s of its products, export capacity, the position of
China's exports of poultry meat products to non-EU markets.
37. Finally, the TRQs that are allocated to "all others" must be at a sufficient level in order to
allow the relevant WTO Members going forward to make use of their comparative advantages so
as to obtain a n SSI. What that level is will depend on the circumstances of each case, and as the
panel in EC – Banana III noted, the level might vary based on the structure of the market.
38. Relying on Article XIII:4, the Appellate Body in EC – Bananas III (Article 21.5 – Ecuador II)
/ EC – Bananas III (Article 21.5 – US) established that a country -specific TRQ may not lead to
long-term freezing of the shares of imported products and cannot be applied in suc h a way as to
create an artificial hurdle preventing the natural evolution of the import market structure. A stifling
of the trade flows that could be anticipated without the imposition of the TRQ is especially likely to
happen when the out -of-quota tariff rate is set at a very high level in both absolute and relative
terms.
39. In this dispute, the "all others" shares of the TRQs for poultry meat for one tariff heading is
non-existent while those for four tariff headings fall below five percent. In contrast, China's poultry
meat imports to the European Union had reached very significant levels in the years preceding the
imposition of the TRQs in 2012. Thus, based on the evidence provided by China, China had a
substantial supplying interest that should have been recognized by the EU and should have led to
the attribution of a commensurate country-specific share in the TRQs. Absent such attribution, the
"all others" share should have been established at a much higher level than is currently the case,
to allow China to reach SSI.
3. The European Union's Failure To Enter Into Meaningful
Consultations Violates Article XIII:4
40. Article XIII:4 provides for consultations. However, mere consultations followed by no
adjustment of a TRQ when the conditions for an adju stment are met, would mean that the
consultations under Article XIII:4 are a dead letter. That cannot be the purpose and objective of
the mandatory consultations provided for in Article XIII:4. It would also be inconsistent with the
findings of the Appella te Body in EC – Bananas III (Article 21.5 – Ecuador II)/EC – Bananas III
(Article 21.5 – US) that a country-specific TRQ may not lead to long-term freezing of the shares of
imported products and cannot be applied in such a ways as to create an articifical hurdle
preventing the natural evolution of the import market structure. As such, consultations under
Article XIII:4 must consider issues of substance, i.e. they must relate as mentioned in
Article XIII:4 to "the need for an adjustment of the proportion det ermined or of the base period

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selected, or for the appraisal of the special factors involved, or for the elimination of conditions,
formalities or any other provisions established unilaterally relating to the allocation of an adequate
quota or its unrestricted utilisation".
C. China's Claims Under Article II
41. According to Article II:7 of the GATT 1994, the schedules of concessions are an integral part
of the GATT 1994. In line with the Decision of 26 March 1080 on the Procedures for Modification
and Rectification of Schedules of Tariff Concessions and pursuant to paragraph 8 of the Procedures
for Negotiations under Article XXVIII, the modification of schedules is subject to certification. Thus,
in the context of modification of schedules of concessions, certification of modified schedules is a
requirement that a WTO Member must undertake before the application erga omnes of any revised
concession; otherwise, implementation of the modification will be in violation of the Schedule
annexed to the GATT 1994.
42. Nothing in paragraph 7 of the Procedures for Negotiations under Article XXVIII explicitly
waives the obligations in Article II. If paragraph 7 of the Article XXVIII Procedures were to be read
as waiving the obligation in Article II for the results of A rticle XXVIII negotiations, the certification
process to which it refers would be reduced to inutility, contrary to the principle of effective
interpretation. It would also run contrary to the object and purpose of all the WTO rules regarding
certification, which is to allow the entire Membership to acquiesce in modifications to Schedules,
since Schedules contain obligations that are an integral part of the WTO Agreement and give rise
to rights enjoyed by all Members.
43. The tariffs and TRQs implemented by the EU have not been certified nor been given legal
effect. And by applying tariffs well in excess of the tariff rates that are certified in its Schedule of
Concessions, the European Union violated Article II:1.
D. China's Claims Under Article I
44. Article I:1 of the GATT 1994 prohibits discriminatory measures in connection with
importation that confer an "advantage, favour, privilege or immunity " to products from certain
countries and not to like products from other countries.
45. The preparatory work o f Article XXVIII of the GATT supports the view that Article I of the
GATT 1994 is applicable to any action taken and outcome resulting from modification of
concessions under Article XXVIII of the GATT 1994. The Appellate Body in EC – Bananas III
(Article 2 1.5-Ecuador II) also found that it is possible for a more favourable TRQ allocation to
violate Article I of the GATT 1994.
46. The majority of the TRQs for the products at issue are allocated to only two WTO Members -
- Brazil and Thailand. Imports of the products at issue from China are subject to the higher out-of-
quota rates under the 2007 and 2012 Modification Packages – that is, they face vastly different
and more adverse market access conditions in the EU market as compared to like products from
Brazil and Thailand.
47. As such, the tariffs and TRQs negotiated by the European Union and implemented under the
First and Second Modification Packages are per se violations of Article I:1.
IV. Conclusion
48. The legal possibility of withdrawing tariff concessions is not at dispute here. However, such a
withdrawal must occur in the strictest respect of the legal requirements so as to maintain the
balance of concessions and the predictability and security that tariff commitments are supposed to
achieve. Moreover, where TRQs are imposed and allocated, these TRQs should respect the share of
imports that each WTO Member would have had in the absence of the TRQs based on its own
comparative advantages. All China is seeking here is for the European Union to honor its
obligations under the WTO.

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ANNEX B-2
SECOND EXECUTIVE SUMMARY OF THE ARGUMENTS OF CHINA
I. Introduction
1. In this Second Executive Summary China focuses on the key issues in this dispute that were
discussed during the Panel's second substantive meeting w ith the Parties and the responses to the
Panel's questions.
II. China's Claims Under Article XXVIII
A. China's Claims Under Article XXVIII:1
1. The European Union's SPS Measures Are Discriminatory
Quantitative Restrictions
2. China submits, with support from various panels and the Appellate Body, that prohibitions or
restrictions on importation under Article XI:1 may be taken in the form of sanitary and
phytosanitary ("SPS") measures. Even the European Union ("EU") itself admits that "[f]ailure to
comply wi th such requirements may entail the imposition of import restrictions, including the
prohibition of the imports concerned". China has clearly demonstrated that the EU's SPS measures
had a material impact on imports of poultry meat products from China. They in fact resulted in an
import ban. Even when special exceptions were given to (1) fresh poultry meat from certain
production areas in China; and (2) poultry meat products subject to special heat treatment
requirements, these only had the effect of narrowi ng the scope of the import bans (i.e. the
limitation on production areas and the heat treatment requirements had a limiting effect on
China's imports of the products in question into the EU). Thus, the volume of imports under each
of the tariff lines in qu estion would not fully reflect nor would it be truly representative of China's
full import potential.
3. There are several instances where the impact of the EU's SPS measures during the relevant
reference periods were different as between China and Thailan d.. These instances clearly show
that the effect of adopting the import bans is straightforward: products from certain countries may
be imported while products from other countries may not. Therefore, a distinction – a
differentiation – is made between pou ltry originating in one country and poultry originating in
another. Whether such disparate treatment is justifiable is not relevant in assessing whether a
measure constitutes a "discriminatory quantitative restriction" in the sense of Ad Note
Article XXVIII:1. Article XXVIII and paragraphs 4 and 7 of Ad Note Article XXVIII:1 are concerned
with the impact that such restrictions had on the imports from supplying World Trade Organization
("WTO") Members. That being the case, import bans, whether WTO -consistent or not, must be
taken into account to determine whether the WTO Members affected should have had a principal
or substantial supplying interest in the absence of the import bans.
4. Contrary to the EU's flawed assertions, China is not suggesting that the E U must abolish or
replace its SPS regime, nor is it requesting compensation for measures that are presumably WTO
consistent. First, China is not advocating for the replacement of WTO consistent measures in the
form of import bans based on SPS measures. Chi na and Chinese poultry meat producers have
every reasonable expectation that their products would have access to the EU market upon
meeting the EU's SPS requirements in accordance with the EU's commitments under its Schedule
of Concessions. What is being r eplaced is the withdrawn concession. Before the re -binding
exercise, China was entitled to un-limited access for its poultry meat at the bound rate set forth in
the EU's Schedule of Concessions. And following the re -binding, the balance of concessions and
future prospects must be maintained in order to have full effect for the time when compliance with
the EU's SPS measures is achieved. Second, compensation under Article XXVIII is for the
modification of concessions, it is not to address other WTO obligatio ns. Just because an SPS
measure is WTO compliant – which is not at issue here – does not mean that it can serve as a
basis for the determination of compensatory tariff -rate quotas ("TRQs") in case of withdrawn tariff

- B-10 -

bindings. In order to achieve the purpo se of maintaining a general level of reciprocal and mutually
advantageous concessions not less favourable than what existed in the period preceding the
withdrawal of concessions pursuant to Article XXVIII:2, the determination of the total quantity of
each TRQ and its allocation among supplying countries should be based on the future trade
prospects of China's poultry meat exports to the EU taking into account the impact of import bans
imposed by the EU.
2. The European Union Used Non -representative Periods To
Determine Which WTO Members Held Principal Or Substantial
Supplying Interests
5. The identification of the reference period for the determination of principal supplying interest
("PSI") or substantial supplying interest ("SSI") must be compatible with t he purpose of a
reference period, which is to identify the WTO Members having sufficiently large exports of the
subject products (or who would have had such exports in the absence of discriminatory
quantitative restrictions). In keeping with that purpose a nd in light of the rights and interests of
other Members that will otherwise be excluded from negotiations or consultations, the period to be
taken into account must be representative so as to permit an accurate determination of the
Members with a PSI or SSI.
6. The adjustment of the reference period or at least an adjustment to the data for the
reference period is necessary where the three -year period preceding the notification of the
intention to withdraw or amend a concession was tainted by the existenc e of discriminatory
quantitative restrictions and/or data for a more recent period has become available before the end
of the negotiations and consultations. Brazil supports China's view, stating that "there is no reason
to consider that adjustments cannot happen if the circumstances require. In many cases they may
actually be necessary in light of the very purpose of Article XXVIII".
7. Furthermore, in the case of protracted negotiations (such as those in connection with the so-
called "Second Modification Package"), China submits that at the very least, re -assessment should
occur as soon as there is evidence of the developments materially affecting the determination of
who holds a PSI or SSI, or affecting the determination of the future trade prospects. Bo th Brazil
and Argentina lends support to China's position on re -assessment. By failing to account for import
developments since the relaxation of its import ban, the reference period used by the European
Union was not "representative".
8. In the present ca se, China highlights three facts. First, the three -year period mentioned in
the EU's initial notification was affected by the import bans. Second, the negotiations and
consultations by the EU were so protracted as to render the trade data for the period us ed by the
EU "ancient history". Third, the statistical data show resumption of imports into the EU of China
poultry meat after the partial relaxation of the import bans. China submits that, based on this data
and the information generally available on Chin a’s production and competitiveness in the field of
poultry meat, the EU should have reconsidered whether it was negotiating or consulting with all
WTO Members holding a PSI or SSI. An inappropriate determination of Members with a PSI or an
SSI would not yield negotiations consistent with Article XXVIII.
3. There Is No Bright Line Rule On Using A 10% Import Share
Threshold To Determine SSI
9. While now stating that it did not "apply a rigid 10 percent test", the EU then strangely
questions that "China has nowhere identified the specific characteristics of the poultry market that
would make inappropriate the use of the customary 10% threshold". As provided in paragraph 7 of
the Ad Note to Article XXVIII:1, China consistently argues against a bright line rule for determining
who is or is not an SSI; there is nothing "customary" about the 10% threshold. China is of the
opinion that one needs to take into account the circumstances of each case, such as the structure
of the market, and special factors or discriminatory quantitative restrictions affecting the Member's
import share.
10. The EU's insistence on the 10% threshold is not supported by its own trade statistics. For
example, the EU imported zero volume of tariff heading 1602 39 21 from Thailand in the three
years prior to the conclusion of the negotiations for the Second Modification Package in 2012,

- B-11 -

namely 2009, 2010 and 2011. Moreover, total Thai imports over the period 1996 -2015 accounted
for less than 2% of the total imports by the EU28. Yet, the EU allo cated 100% of the TRQ for tariff
heading 1602 39 21 to Thailand based on the import statistics for the period 2006-2008.
11. In this case, the EU (a) failed to establish 10% as the appropriate threshold that reflected a
"significant share" as regards the market concerned, and (b) applied a 10% test to actual import
columes without taking into account the quantitative restrictions and special factors affecting
China's market share in the EU.
B. China's Claims Under Article XXVIII:2
1. Article XXVIII:2 And Paragraph 6 Of The Understanding Address
The Allocation Of Compensation In The Form Of TRQs
12. Article II of the GATT 1994 specifically requires Members to be bound by their schedule of
concessions. Contrary to the EU's assertion, China submits that Artic le XXVIII does not leave a
wide margin of discretion when allowing WTO Members to modify Article II concessions lest the
fundamental goals of the WTO are undermined. Furthermore, TRQs are inherently more trade
restrictive than unlimited tariff concessions. China notes that this is the reason why paragraph 6 of
the Understanding provides that compensation must exceed the amount of trade affected.
Otherwise, the compensation would not reflect future trade prospects.
13. The EU argues that Article XXVIII:2 and paragraph 6 of the Understanding do not address
the allocation of TRQs among supplying countries. China is not suggesting that these provisions
require Members to allocate compensation in the form of TRQs among supplying countries.
However, where a Member chooses to allocate (or break down) the total compensation among
supplying countries and records the shares of the compensation as part of its modification of
concessions, as the EU did in this case, China contends that the sufficiency of the compensation
under Article XXVIII:2 and paragraph 6 of the Understanding must be examined not only at the
level of total compensation, but also at the level of the compensation received by each supplying
country or group of countries. Brazil supports China's views, st ating that "in negotiations under
Article XXVIII, the provision of the total amount of compensation in the form of TRQs is
intrinsically tied to the specific amount given to each participating Member".
2. Compensation Must Reflect Future Trade Prospects Ex empt From
The Impact Of Import Bans And Calculated Based On The Formula
In Paragraph 6 Of The Understanding
14. To the EU, the wording of paragraph 6 of the Understanding, read with paragraph 6 of Ad
Note Article XXVIII:1, means that the most recent three -year period preceding the notification of
the intention to withdraw concessions should always be used as the reference period. China
disagrees.
15. Paragraph 6 of Ad Note Article XXVIII:1 provides that compensation should be judged "in
the light of the co nditions of trade at the time of the proposed withdrawal or modification". The
moment of the "proposed withdrawal or modification" is not the moment of the notification of the
mere intention to withdraw or modify concessions. It is the moment at which the details of the
withdrawal or modification are agreed immediately preceding their implementation. And the
reference to "future" in paragraph 6 of the Understanding confirms the intention to make sure that
the compensation is as close as possible to economic reality at the time of the implementation of
the withdrawal of the concession.
16. Furthermore, for the general balance of concessions to be restored pursuant to
Article XXVIII:2, the future trade prospects under paragraph 6 of the Understanding should ta ke
into account the future trade prospects of all WTO Members exempt from the impact of import
bans. In other words, where warranted in light of the circumstances of a particular case, another
period which is more representative should be used, or alternat ively, the trade data during the
most recent period should be duly adjusted. In fact, the EU itself has modified the reference period
from that initially notified for two tariff headings covered by the First Modification Package.

- B-12 -

17. The EU claims that co mpensation in the form of the global volume of the TRQs is at least
equal to, but most often in excess of, the formula set out in paragraph 6 of the Understanding.
However, a quick calculation by China shows that not only do the global volumes of several T RQs
fall short of the requirements of paragraph 6 of the Understanding, the allocation to 'all others' is
extremely small and falls short of what is required under paragraph 6 of the Understanding.
Indeed, for some tariff lines, even if the periods selecte d by the EU are used as the basis for
calculation, the allocation falls short as well. That said, certain Chinese poultry meat under the
tariff lines in question could not be imported into the EU due to the import bans in place during the
periods selected by the EU. The EU did not take these bans into account in determination of the
global volume of the TRQs, nor in their allocation.
18. The EU further claims that allocation of unusable shares to China "would have reduced the
size of the shares allocated to imports from other sources which do comply with the EU's SPS
requirements and, consequently, limited the total volume of imports under the TRQs for as long as
China remains unable to comply with the EU's SPS requirments". First, to be clear, the EU is not
under an obligation to allocate its TRQs on a country-specific basis. However, having decided to do
so, the EU was under an obligation pursuant to Article XXVIII to, among other things, ensure that
the modified concessions maintain "a general level of rec iprocal and mutually advantageous
concessions not less favourable to trade than that provided for in this Agreement prior to such
negotiations". Assuming the SPS measures are in place and the EU allocates a TRQ to China,
Chinese poultry products will not b e imported into the EU, a situation similar to that prior to
modification. If China subsequently complies with the SPS measures, Chinese products should be
able to access the EU market, as it was able to under concessions prior to modification. As for
imports from other sources that comply with the EU's SPS requirements, they would still have the
same access, as the global volume of the TRQs would be adjusted accordingly to account for
China's share.
III. China's Claims Under Article XIII
19. China submits that Article XIII imposes an ongoing obligation to ensure that the actual
allocation of shares in the TRQs throughout their entire period of validity is not discriminatory. Not
only did the EU act inconsistently with Article XIII in its disciminatory initial allocation of shares in
the TRQs in the First and Second Modification Packages, the EU continues to act inconsistently with
Article XIII because of the continuous application of this discriminatory allocation from one quota
year to another without adjus tment, notwithstanding subsequent trade developments. In the
present dispute, China argues that (a) the allocated shares in the TRQs as applied by the EU (since
2007 and 2012, respectively) and going forward during their period of validity must be updated
from time to time to reflect the share that each WTO Member could have had without the TRQs,
and (b) such updating must be based on trade flows during a representative period preceding the
continued application of the allocated shares. The EU should not re ly on outdated trade data to
allocate TRQs concerned among supplying Members.
A. China's Claims Under Article XIII:1
20. The EU partially concedes that Article XIII:1 applies to the allocation of TRQs "for aspects of
the allocation of TRQs that are not cov ered by Article XIII:2 ... to the extent that its
[Article XIII:1] application does not lead to results that would conflict with the outcome resulting
from the application of Article XIII:2". The EU's new position is built upon the EC-Banana III
(Ecuador) panel's statement that "[Article XIII:2(d)] may be regarded, to the extent that its
practical application is inconsistent with [Article XIII:1], as lex specialis in respect of Members with
a substantial interest in supplying the product concerned". However , China notes that the panel in
that dispute referred to substantial suppliers only and only to the extent that the practical
application of Article XIII:2(d) is inconsistent with Article XIII:1. The panel was not (and certainly
not China) suggesting that Article XIII:2(d) overrides Article XIII:1.
21. China submits that the "similarly restricted" provision in Article XIII:1 requires , inter alia,
that:
(i) If all countries must be similarly restricted, then, all Members with an SSI must be
similarly restricted. This means that the process for determining the TRQs should
be the same for all WTO Members holding an SSI (i.e. negotiations must be held

- B-13 -

with all Members holding an SSI; if negotiations are held with some and not with
others, that means that all Members holding an SSI are not similarly restricted).
(ii) If a country -specific share is allocated to some Members with an SSI, a country -
specific share must be allocated to all Members with an SSI. If not, these Members
are not similarly restricted.
(iii) Where there is an allocation of the TRQs, not only the WTO Members with an SSI
must be granted a share of the quota that is proportionate to the share they would
have had absent the TRQs, but all other countries as well. In the absence thereof,
all countries are not similarly restricted.
22. And, as mentioned above, these requirements must be complied with on an ongoing basis
throughout the period of validity of the allocated shares in the TRQs.
23. In the present case, the EU failed to negotiate with or similarly allocate a country -specific
share of the TRQs to China, which was a Member holding an SSI, unlike what it did with Brazil and
Thailand.
24. China further notes that the EU omitted to take into account a very important statement by
the panel in EC – Bananas III (Ecuador) . Specifically, the panel noted that in the case of an
"others" category for all Members not having a substantial interest in supplying the product, the
allocation must comport with the object and purpose of Article XIII, which in cludes Article XIII:1,
to have a significant share of a tariff quota assigned to "others" such that the import market will
evolve with the minimum amount of distortion and "[m]embers not having a substantial supplying
interest will be able, if sufficiently competitive, to gain market share in the "others" category and
possibly achieve "substantial supplying interest" status which, in turn, would provide them the
opportunity to receive a country -specific allocation by invoking the provisions of Article XIII: 4". In
the instant case, China argues, with support from Argentina, that when a very small TRQ share is
allocated to "others" and the new out-of-quota tariff rates are much higher than the in -quota rate,
every Member is not given "access and an opportunity of participation" in each TRQ similarly and
the importation of the products concerned from all third countries is not similarly restricted under
Article XIII:1.
B. China's Claims Under Article XIII:2
1. The TRQs Established By The European Union Violate T he Chapeau
of Article XIII:2 And Lead To A Permanent Allocation of TRQ Shares
25. The EU argues that its TRQ allocation was conducted under Article XIII:2(d), which provides
a safe harbour such that the allocation was not required to be based on a differen t reference
period for all others, nor make adjustments for special factors. It states that this safe harbour
extends to the allocation or non-allocation of TRQs to all other Members.
26. However, the Appellate Body has clarified that Article XIII:2(d) pro vides a safe harbour "as
far as substantial suppliers are concerned". It does not exempt the importing Member from its
obligations, such as those under the chapeau of Article XIII:2 as regards non-substantial suppliers.
China argues that the chapeau of Art icle XIII:2 of the GATT 1994 sets forth a general non -
discriminatory obligation with respect to the allocation of TRQs among Members, separate from the
provisions of Article XIII:2(a) to (d) and thus requires a separate analysis.
27. China addresses the EU's violation of Article XIII:2(d) when it failed to negotiate with China
as a WTO Member with an SSI in supplying the poultry meat concerned, as it did with Brazil and
Thailand, in the section below. But even if assuming that China is not a WTO Member wit h an SSI,
the EU would still need to comply with the requirements of the chapeau of Article XIII:2 in setting
the TRQs for all other countries (i.e. the TRQs for all others should reflect the shares of imports
that these other Members could have been expec ted to obtain in the absence of the TRQs). And
that share will not be achieved if the allocation does not take into account the special factors that
affect the share of imports of the other WTO Members. The mere use of objective and pertinent
criteria is not enough. The special factors that affect imports of the other WTO Members must be
taken into account and must be reflected in the allocation of the TRQs. Moreover, to measure the

- B-14 -

shares Members might be expected to obtain in the absence of allocation, th e trade during the
most recent period preceding the allocation provides an objective basis, provided that trade is
representative and there are no special factors. This is confirmed by the findings of the WTO panel
in US – Line Pipe and the GATT panel in EEC – Chilean Apples. Trade data for an outdated period,
even if it is "objective" and somehow "pertinent", cannot be representative of the shares that
various Members could be expected to obtain in the absence of the TRQs or in the absence of the
allocation of the TRQs among supplying Members.
28. The EU states there is no freezing of trade flows, even if a small or no share is allocated to
"Other" suppliers, when a TRQ is allocated pursuant to Article XIII:2; after all says the EU, these
"Other" suppliers can always import outside the TRQ. As Argentina points out, in this present
dispute, the "Other" suppliers wishing to increase their market share would face high tariff rates,
while domestic suppliers and Members with country -specific TRQs enjoy a competit ive advantage
simply due to the existence of the TRQs. Even if there are still imports at the higher out -of-quota
tariff rate, the much higher tariff rate must have a stifling effect; normal trade flows are thus
distorted, leading to a permanent allocation of TRQ shares. Such a result would not be consistent
with the reasoning of the panel in EC – Bananas III, which states that an “all others” share of TRQ
is required in all circumstances to allow new entrants to compete in the market and to avoid the
long-term freezing of market shares.
2. The European Union Acted Inconsistently With Article XIII:2(d) By
Denying SSI Status To China
29. China now turns to the EU's reiteration of its argument that: (a) the terms "substantial
supplying interests" in Article XIII and Article XXVIII have the same meaning; (b) the import bans
are not "special factors"; and (c) the evidence available at the time that the EU notified its
intention to negotiate the modification of the concession did not demonstrate China's SSI status.
30. As to the EU's first argument, China has previously noted the differences between the notion
of SSI in Article XIII and that in Article XXVIII. One key difference is the reference period.
Assuming that there is no "discriminatory quantitative restric tions" nor "special factors", the
reference period to be used under Article XXVIII:1 should be the most recent representative period
preceding the initiation of a modification negotiation or preceding the conclusion of the
negotiations if they are prolonged, while the reference period to be used under Article XIII shall be
the most recent representative period preceding the allocation of the TRQs for any given period.
To put it another way, allocation under Article XXVIII if undertaken is done once during a
modification of concessions; while allocation under Article XIII needs to be re -examined as
warranted in order to ensure that the allocation for a given quota year is based on the most recent
trade data with special factors being taken into account. Secon d, China contends, and Brazil,
Canada and the United States agree, that the concept of "special factors" is broader than that of
"discriminatory quantitative restrictions". Paragraph 7 of Ad Note Article XXVIII:1 provides that the
expression "substantial i nterest" is "intended to be construed to cover only those contracting
parties which have, or in the absence of discriminatory quantitative restrictions affecting their
exports could reasonable by expected to have, a significant share in the market of the c ontracting
party seeking to modify or withdraw the concession". On the other hand, Article XIII:2 does not
refer to "discriminatory quantitative restrictions", but to "special factors" that must be taken into
account for the determination of the WTO Members holding a substantial interest as well as for the
allocation of the shares in the tariff rate quotas. In this dispute, the import bans that affected
Chinese poultry meat were both discriminatory quantitative restrictions and special factors that
should b e taken into account in affording to China its supplier status under Article XXVIII and
under Article XIII:2. However, if ever the import bans were not considered to be discriminatory
quantitative restrictions, they should at least be considered as special factors and be taken into
account both for the determination of the supplier status and the allocation of TRQ shares under
Article XIII:2.
31. Regarding its second argument that the import bans are not special factors, the EU
maintains that the ability of a WTO Member to comply with a set of SPS requirements is an
element of competition and, where this led to the imposition of an import ban, it would allow the
exclusion of this WTO Member from the TRQs. The EU is wrong. First, compliance with sanitary
requirements is not a factor of competition; the EU's views to the contrary are unfounded and
without support in WTO law and practice. Second, the EU's views are based on the unfounded
assumption that a WTO Member may never be able to comply with the sanitary requirements.

- B-15 -

Third, the facts in this case demonstrate that China could satisfy the sanitary requirements and
that its exports of poultry meat to the EU increased significantly after the lifting of the import ban.
This demonstrates that Chinese poultry meat has comparative advantages that are precisely the
conditions of competition that must be taken into account when determining and allocating the
TRQs. Thus, in this dispute, by failing to account for the import bans (special factors), the EU has
failed to properly identify China as a Member having substantial supplying interests.
32. Without repeating China's rebuttal of the EU's third argument, China stresses two key
points:
(i) The reference period to determine SSI status under XIII is not a period pre ceding
the EU's notification of its intention to modify its concessions. Therefore, whether
sufficient evidence is available at the time of the EU's notification is irrelevant.
(ii) China has already presented evidence supporting its SSI status, such as it s
production capacity, in view of the existing import bans which are "special factors".
Instead, it is the EU that has failed to disclose the historical trade data, the base
period, the basis for the allocating the shares and the presence or absence of
special factors. Without such data, WTO Members will be in the dark and will not
be in a position to determine SSI and request the Member allocating the TRQs
among supplying countries to enter into consultation regarding "the need for an
adjustment of the proportion determined or of the base period selected, or for the
reappraisal of the special factors involved" pursuant to Article XIII:4. Argentina
agrees with China on the disclosure requirements. Argentina points out that the
information submitted by the EU in G/SECRET/25/Add.1 and G/SECRET/32/Add.1
did not explain the procedure used to determine the TRQs, or whether a single
methodology was used for the TRQ distribution among the supplying Members, or
the calculation of the growth rate under paragraph 6 of the Understanding, or the
methodology used to determine the representative reference period and whether
they have taken into account special factors.
IV. China's Claims Under Article II
33. Certification is the act, at the international level, that modif ies the terms of a Member's
Schedule, which is an integral part of the multilateral WTO Agreement s. Even though there are
instances where a modification entered into force before a certification was officially issued,
Members do submit requests for a certi fication prior to the planned implementation date, and
leave time for the certification process. In any event, China submits that a practice cannot
supersede the law.
34. The applicant Member must certify to the WTO's Director General the proposed changes to
its concessions pursuant to paragraph 1 of the Procedures for Modification and Rectification of
Schedules of Tariff Concessions, within three months after the action has been completed. This
paragraph is couched in mandatory terms but this three -month p eriod has in fact not been
respected by the EU either for the First or for the Second Modification Package. The EU itself
concedes that very significant delays have occurred and the fact is that the changes in the EU's
bound tariffs as a result of the Firs t and Second Modification Packages have not been the subject
of certifications and thus do not have formal legal effect. Thus, in applying the out -of-quota tariff
rates for poultry meat originating in China, which are substantially higher than the bound ra tes
currently still provided for in the EU's Schedule of Concessions, the EU is in violation of Article II.

- B-16 -

ANNEX B-3
FIRST EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE EUROPEAN UNION
1. CLAIMS UNDER ARTICLE XXVIII:1 OF THE GATT 1994
1.1. CHINA DID NOT CLAIM ANY PSI IN THE FIRST MODIFICATION PACKAGE AND FAILED TO MAKE A TIMELY CLAIM
OF INTEREST IN RESPECT OF THE SECOND MODIFICATION PACKAGE
1. The European Union was not required to take into account either China's claims of PSI in the
First package of modifi cations, which China has put forward for the first time in these panel
proceedings, or China's claims of interest in the Second package of modifications, which were not
raised by China until nearly three years after the deadline provided for in the Procedu res, when
agreements had already been negotiated with both Brazil and Thailand.
2. The Procedures for Negotiations under Article XXVIII provide that "claims of interest should
be made within ninety days following the circulation of the import statistics ". This provision
underlines the importance of submitting the claims of interest in a timely manner. Members are
not free to submit a claim of interest at any point in time during the Article XXVIII procedures. It
would be manifestly unreasonable to force a Member seeking to modify a concession to take into
account late claims of interest where doing so would cause undue delay in ongoing negotiations or,
as in the present case, require the re-opening of negotiations already concluded.
1.2. THE SPS MEASURES CITED BY CHINA ARE NEITHER "QUANTITATIVE RESTRICTIONS" NOR "DISCRIMINATORY"
3. The EU's sanitary regime for animal products (including poultry products) is based on the
fundamental principle that imported products must comply with the same or equivalent san itary
requirements as the EU domestic products. The SPS measures at issue are part of a
comprehensive system of regulations put in place by the EU authorities in order to enforce at the
border those sanitary requirements with regard to imported products. T herefore, in accordance
with the Note Ad Article III, those measures are not "quantitative restrictions" within the meaning
of either Article XI:1 or, consequently, of the Note Ad Article XXVIII:1.
4. Furthermore, the SPS measures at issue are not "discriminatory". The principle that
imported products must comply with the same or equivalent sanitary requirements as the
domestic products applies equally to all imports of poultry products, irrespective of the country of
origin. Whether or not imports from a given country are restricted will depend on whether they
comply with those sanitary requirements. In turn, this will depend on the sanitary situation in each
country of origin. Where the sanitary situation in any two countries is the same or equivalent the
European Union will treat imports from those two countries in the same manner.
5. China contends that the term "discriminatory" covers any situation "where imports from a
WTO Member are treated differently from other WTO Members, irrespective of the groun d of such
disparate treatment". The European Union disagrees: treating differently two different situations is
not discriminatory. Quite to the contrary, it would be discriminatory to treat in identical manner
the imports from a Member which comply with th e EU sanitary requirements and the imports from
another Member which do not comply with the same or equivalent requirements.
6. The Appellate Body Report in Canada – Wheat does not support China 's position. The
findings of the Appellate Body in EC – Tariff Preferences confirm that, contrary to China 's
assertions, when used in the WTO Agreement, the term "non-discriminatory" can be interpreted as
covering different treatment of Members which are in different situations. Further confirmation of
this is provided by the respective preambles to the WTO Agreement and the GATT, which both cite
among the objects and purposes of those agreements "the elimination of discriminatory treatment
in international commerce ". Clearly, in this context the term "discriminatory" cannot be read as
referring to any situation "where imports from a WTO Member are treated differently from other
WTO Members, irrespective of the ground of such disparate treatment ", as it is beyond doubt that
the WTO Agreement does not seek to "eliminate" all such differences of treatment.
7. It is necessary, therefore, to examine the term "discriminatory" in the context of
Article XXVIII:1 and having regard to the objective pursued by that provision, as well as the

- B-17 -

objects and purposes of the GATT and the WTO Agreement. Article XXVIII:1 seeks to facilitate the
negotiation of the modification of tariff concessions, so as to limit the uncertainty which is inherent
in such negotiations. This is achieved by providing that those modifications are to be nego tiated,
or consulted, with a few Members having a special interest, rather than with the entire WTO
membership; and by laying down a straightforward, easy -to-apply rule for identifying those
Members, namely the share of imports over a previous representati ve period. This objective, in
turn, contributes to one of the objects and purposes of both the GATT and the WTO Agreement: to
increase the predictability and security of tariff concessions. The overbroad reading of the term
"discriminatory" invoked by Chin a would undermine the described objective. Sanitary
requirements, such as those at issue in this dispute, and many other legitimate regulatory
requirements often have the effect, in law or in fact, of restricting imports from certain countries
which fail t o comply with such requirements (for example, by reason of deficiencies in their own
regulatory systems). Making adjustments to the import shares for all such restrictions would be an
extremely complex task involving the use of highly speculative estimates . The results would be
necessarily inaccurate and likely to be a source of disputes. Furthermore, since those regulatory
requirements are often a necessary and permanent feature of the markets for the products
concerned, the import shares estimated by maki ng allowance for those requirements would fail to
capture the genuine relative importance of each Member 's supplying interest. As a result, China 's
interpretation could have the anomalous result that negotiations would have to be undertaken with
Members wh ose supplying interest is largely theoretical, at least in the short or medium term,
instead of other Members with a far more immediate supplying interest. This would be detrimental
to all WTO Members since a Member with a genuine supplying interest is more likely to commit the
necessary efforts to ensure adequate compensation for the benefit of all WTO Members.
8. China's interpretation of the term " discriminatory" would have required the European Union
to make allowance not only for the specific SPS meas ures applied to China, but also for the SPS
measures applied to many other WTO Members and, more generally, for the entire sanitary regime
applied to imports of poultry products. Indeed, that regime rests on the fundamental principle that
the SPS measures applied to the imports from any given country must address the specific
sanitary situation in that country, a principle which China regards as being inherently
"discriminatory". Therefore, on China 's interpretation of the term "discriminatory", the Europea n
Union would have been required to estimate what would have been the import shares of all
potential suppliers of poultry products in the absence of the EU 's sanitary regime for imports of
those products. In practice, that estimate would have been extremel y complicated and grossly
inaccurate.
9. Even more important, that estimate would not reflect the import shares which each Member
could have reasonably expected to achieve either during the period of reference or in the
foreseeable future. China does not contest that, even if the EU 's sanitary regime for imports of
poultry products was "discriminatory" (as contended by China), it would be compatible with the
WTO Agreement. In view of this, there is no reason to expect that the European Union will replace
that regime with another regime which China would regard as "non-discriminatory" (i.e. a regime
where imports from all sources are treated in identical way, irrespective of the sanitary situation in
each country of origin). Since there can be no reasonable expectation that the European Union will
replace the current sanitary regime with a "non-discriminatory" regime (according to China 's
interpretation), making allowance for the existing EU 's sanitary regime would have gone against
the rationale behind the r equirement in Note Ad Article XXVIII:1 to make allowance for the
"discriminatory quantitative restrictions ". This confirms that China 's reading of the term
"discriminatory" cannot be correct in the context of that provision.
1.3. IN THE ALTERNATIVE , IF THE EUROPEAN UNION HAD BEEN REQUIR ED TO MAKE ALLOWANCE FOR THE SPS
MEASURES, THE EVIDENCE AVAILAB LE AT THE TIME WHEN THE EU NOTIFIED ITS INTENTI ON TO NEGOTIATE
THE MODIFICATION OF THE CONCESSIONS DID NOT WARRANT CHINA'S PRESENT CLAIMS OF PSI OR SSI
10. Most of the evidence relied upon by China was not provided to the European Union in
support of China 's claims of interest pursuant to paragraph 4 of the Procedures for Negotiations
under Article XXVIII. China cannot rely on evidence that was not made available to the European
Union in a timely manner in the course of the Article XXVIII procedures, in particular given that
most of such evidence does not concern the EU market.
11. Paragraph 4 of the Note Ad Article XXVIII:1 makes it clear that the existence of a PSI must
be determined on the basis of the import share which a Member had, or would have had in the

- B-18 -

absence of discriminatory quantitative restrictions "over a reasonable period of time prior to the
negotiations". Moreover, the determination of a PSI mus t, by definition, be made before the
opening of the negotiations. Accordingly, in assessing whether the European Union fulfilled its
obligations under Article XXVIII:1, only the evidence that was available to the European Union
prior to the opening of the negotiations can be taken into consideration. Therefore, the import data
for the period 2009 -2015 provided by China is not pertinent for assessing this claim and must be
disregarded.
12. Having regard to the above considerations, the European Union submits that the import data
concerning the period immediately preceding the entry into force of Decision 2002/69/EC, of 30
January 2002, is both the most pertinent and the most reliable source of evidence in order to
estimate the import share that China would have had in the absence of the SPS measures..
13. China has argued that prior to the entry into force of Decision 2002/69/EC in 2002, its
imports into the European Union were "growing". However, during the years preceding 2002
China's import shares for all the tariff lines concerned were negligible. The fact that China was the
second largest world producer of poultry meat products during the two reference periods is only to
be expected given the very large size of China 's own domestic market. Similarly, Chi na's share of
the world exports of poultry meat is not a reliable indicator of its export prospects to the EU
market. China 's import share may vary considerably from one country market to another.
Moreover, China 's share of world exports varies considerabl y among the various categories of
poultry products concerned by this dispute. In any event, the European Union observes that
China's share of world export trade fell from 5 % in 2003 to just 3 % in 2009. These percentages
are well below the 10 % benchmark for recognising a SSI. China provides data on China's share of
world imports only for tariff items 1062 32 and 1602 39. This suggests that the shares for the
remaining tariff items covered by this dispute are not regarded as "significant" even by China. As
regards item 1602 39, according to China's own data, China's share was on average 5.16 % during
the first reference period and 5.71 % during the second reference period. Both percentages are
well below the 10 % benchmark. China 's share of world imports wa s above 10 % during both
reference periods only for item 1602 32 (on average, 19.87 % during the first reference period;
and 18.20 % during the second reference period). Nevertheless, these are global figures. Given
these broad variations among geographica lly close countries where China is a major supplier,
China's share of global imports of 1602 32 cannot be reliably used to estimate what would have
been China's share of the EU imports of the item 1602 32. The data on China 's share of imports in
a handful of selected import country markets where China holds a "major share " is manifestly
unrepresentative and unreliable. China has not explained why the markets of the selected
countries are analogous to the EU market and can be considered as sufficiently representative.
1.4. AS REGARDS THE SECOND MODIFICATION P ACKAGE, THE EUROPEAN UNION WAS NOT REQUIRED TO
RE-DETERMINE THE MEMBERS HAVING A PSI OR SSI ON THE BASIS OF IMPO RT DATA SUBSEQUENT T O THE
INITIAL DETERMINATION
14. Neither Article XXVIII:1 nor the Proce dures provide for a re -determination of the Members
having a PSI or SSI after the initiation of the negotiations. China suggests that the obligation to
make such a re -determination would arise when negotiations are not completed within the time
limits prov ided for in Article XXVIII:1. However, those time limits do not apply to 'reserved'
negotiations pursuant to Article XXVIII:5. The European Union is not aware of any single instance
where the Member seeking to modify a concession has, during the course of the negotiations,
proceeded to re-determine the Member having a PSI on the basis of more recent import data and
resumed the negotiations with a different Member.
15. Article XXVIII:1 seeks to facilitate the negotiation of modification of tariff concessions with a
view to putting an end as quickly as possible to the uncertainty created by such negotiations.
Reading into Article XXVIII:1 an obligation to "re-assess" on a continuous basis the reference
period on the basis of the most recent import data at each point in time during the negotiations
and to re -determine as many times as necessary the Members having a PSI or a SSI would
undermine that objective.

- B-19 -

2. CLAIMS UNDER ARTICLE XXVIII:2 OF THE GATT 1994
2.1. THE UNDERSTANDING DO NOT ADDRESS THE ALLOCATION OF TRQS AMONG SUPPLYING COUNTRIES
16. The objections raised by China as part of its claims under Article XXVIII:2 relate to the
country allocation of the TRQs, rather than the total amount of compensation provided by the
European Union in the form of TRQs. Since, Article XXVIII:2 and paragraph 6 of the Understanding
do not address the allocation of TRQs, the Panel should reject the claims brought by China under
those two provisions.
17. China's position has no basis on the wording of either Article XXVIII: 2 or paragraph 6 of the
Understanding. China contends that paragraph 6 of the Understanding is equally applicable in
respect of each of the country -specific shares of an allocated TRQ because that provision refers to
"a tariff rate quota" in the singular. Yet a "tariff quota" is not the same as a "share" of an allocated
tariff quota. Moreover, reading additional rules on the allocation of TRQs into the provisions of
Article XXVIII:2 and paragraph 6 of the Understanding would result in the application of two
different and potentially conflicting sets of requirements.
2.2. THE AMOUNT OF COMPENS ATION PROVIDED BY TH E EUROPEAN UNION IN THE FORM OF TRQS IS FULLY
CONSISTENT WITH ARTICLE XXVIII:2, READ IN CONJUNCTION WITH PARAGRAPH 6 OF THE
UNDERSTANDING
18. The amount of trade covered by each of the three TRQs included in the First modification
package equals or exceeds the greatest of the amounts that would result from applying each of
the three formulae set out in paragraph 6 of the Understanding. Likewise, the amount of trade
covered by each of the TRQs included in the Second modification package exceeds largely the
greatest of the amounts that would result from applying each of the three formulae included in
paragraph 6 of the Understanding.
19. The European Un ion was not required to use import data for the period following the
initiation of the negotiations, including data for the period 2009 -2011. Paragraph 6 of the Note Ad
Article XVIII:1 makes it clear that the adequacy of compensation must be judged in the light of the
conditions prevailing at the moment where the modification of the schedule is proposed, rather
than at the time where the modification is eventually agreed. In view of this, the terms of
paragraph 6 of the Understanding terms must be read as r eferring to the most recent year or
three-year period preceding the moment where the Member concerned formally initiates the
modification process. The guidelines set out in paragraph 6 of the Understanding seek to facilitate
the negotiations by providing a benchmark that the negotiators can use as a "basis" for the
calculation of compensation. In order to achieve that purpose, the benchmark must be known in
advance of the negotiations and fixed. The use of import data pre -dating the initiation of the
negotiations as a benchmark for negotiating the amount of compensation offers certainty and
predictability to both negotiating sides and is not inherently biased in favour of either of them.
Rather, the opposite is true: the uncertainty created by the opening of negotiations can have a
chilling effect on imports. In contrast, the use of a 'moving' benchmark based on the most recent
post-initiation data available at any point in the course of the negotiations would create an
incentive for the parties to delay the conclusion of negotiations while waiting for more favourable
trade data to emerge.
3. CLAIMS UNDER ARTICLE XIII OF THE GATT 1994
3.1. ARTICLE XIII:1 DEALS NEITHER WITH T HE ALLOCATION OF SHA RES WITHIN A TRQ NOR WITH LEVEL OF
ACCESS TO BE GRANTED TO EACH MEMBER
20. Article XIII:1 establishes a principle of non -discriminatory access to, and participation in, a
TRQ. It requires that a TRQ is applied by a Member on a product -wide basis without discrimination
as to the origin of the product. On the other hand, i t deals neither with the allocation of shares
within a TRQ nor with the level of access to be granted to that each Member.
21. The TRQs at issue in this dispute are defined only by reference to the tariff line and there is
manifestly no discrimination bet ween products based on the origin. Hence, imports of every
Member are given access and an opportunity of participation in each TRQ within the meaning of
Article XIII:1.

- B-20 -

22. The access to the TRQs and their allocation to different suppliers are two concept ually
distinct questions. The share allocated to each Member within each TRQ results from the
application of the rules contained in Article XIII:2. Since, Article XIII:2 is lex specialis with respect
to Article XIII:1, the arguments of China concerning the allocation of the TRQ are to be examined
in the light of that provision.
3.2. THE EU WAS REQUIRED NEITHER TO BASE THE ALLOCATI ON OF THE TRQS ON A DIFFERENT REF ERENCE
PERIOD NOR TO MAKE ADJUSTMENTS FOR SPECIAL FACTORS
23. The European Union agreed with t he substantial suppliers (i.e. Brazil and/or Thailand) the
method for the allocation of the TRQs. This allocation was based on the share of EU imports held
by Brazil and/or Thailand and "all others" over the same period used to calculate the total amount
of each individual TRQ.
24. It is manifest that the European Union followed the first allocation method set out in
Article XIII:2(d), which provides a "safe harbour" to the Member applying the TRQ. In turn, the
European Union was not required to comply with the requirements of the second allocation method
provided for by Article XIII:2(d), including the use of a "representative period " or making
adjustment for "special factors".
25. By providing that a TRQ can be allocated by agreement with the substantial suppliers,
Article XIII:2(d) admits implicitly that the Member allocating the TRQ and its negotiating partners
have a certain margin of discretion in choosing the allocation key. Panels should not interfere with
the discretion accorded to the negotiating M embers under Article XIII:2, notably in a case as the
present one where the method selected by the European Union and its partners is based on
objective factors (i.e. import shares over a past reference period), it is not inherently biased in
favour of any supplier, it is in line with past practice and, furthermore, it reflects the method used
for calculating the total amount of the TRQs, which in turn is based on paragraph 6 of the
Understanding.
26. In summary, even though the European Union negotiated on ly with substantial suppliers, as
explicitly provided for by Article XIII:2(d)), the resulting agreements treat substantial suppliers
and non-substantial suppliers in the same way by applying an impartial allocation method based
on objective factors.
27. Moreover, neither Article XIII nor the WTO jurisprudence concerning that Article imposes a
rule whereby a Member allocating a TRQ must always set aside a minimum share for Members
that are not substantial suppliers, regardless of the level of imports from those suppliers in the
past.
28. Finally, the SPS sanitary measures mentioned by China are not special factors as their
objective is to ensure equal treatment between domestic and foreign suppliers and among foreign
suppliers, from the point of view of the EU sanitary requirements. Moreover, the willingness and
ability of one country to produce poultry products in compliance with a given set of SPS
requirements at any point in time is part of the elements that contribute to determine the
comparative advanta ge of that country in the production and export of poultry products.
Therefore, no Member should be required to allocate a TRQ by making abstraction of the sanitary
situation prevalent in any other country over the period used for the allocation of the TRQ ,
because that would not describe the real supplying interest of that country and ultimately it would
lead to highly speculative results, to the detriment of those suppliers that complied with those
sanitary requirements over the same period.
3.3. THE CHAPEAU OF ARTICLE XIII:(2) DOES NOT REQUIRE THE EUROPEAN UNION TO ALLOCATE A S HARE FOR
"ALL OTHER" COUNTRIES IN EACH TRQ AT LEVELS THAT ALLOW THEM TO ACHIEVE AN SSI
29. The European Union submits that this is a new legal claim developed for the first time in
China's first written submission, which was neither mentioned nor implied in China's Panel request.
It is therefore a new claim that falls outside the scope of the Panel request and thus also outside
the terms of reference of the Panel pursuant to Article 7(1) of the DSU.
30. In any event, the EU submits that neither Article XIII nor the WTO jurisprudence concerning
that Article imposes a rule whereby a Member allocating a TRQ must always set aside a minimum

- B-21 -

share for Members that are not substantial su ppliers, regardless of the level of imports from those
suppliers in the past, let alone a share allowing suppliers going forward to claim a substantial
interest.
31. The Appellate Body Report in EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III
(Article 21.5 – US) does not support that claim. In any event that Report contains some obiter
dicta concerning Article XIII:2 and Article XIII:4, which were made by the Appellate Body ad
abundantiam. As a consequence the Panel is not legally obliged to follow those obiter dicta.
32. Finally, China 's claim cannot be justified by the objective to avoid a freezing the TRQ
allocation. Indeed, China ' idea would not prevent a freezing of the TRQ allocation, but just
postponing that effect. Moreover, China 's reasoning does not take into account that TRQs do not
prevent imports outside the quota and indeed China has been able to export to the EU market also
outside the TRQs.
3.4. THE EUROPEAN UNION DID NOT VIOLATE THE CHAPEAU OF ARTICLE XIII:2 AND ARTICLE XIII:4 BY NOT
EXPLICITLY IDENTIFYING THE DATA THAT IT TOOK INTO ACCOUNT TO DETERMINE THE TRQS
33. China's first written submission develops these two legal claims for the first time. They are
neither mentioned, nor implied in China 's Panel request. They are th erefore new claims that fall
outside of the scope of the Panel request and thus also outside the terms of reference of the Panel
pursuant to Article 7(1) of the DSU.
34. In any event, these claims are groundless, because nothing in Article XIII:2 or in
Article XIII:4 refers, even implicitly, to an obligation to disclose proactively the trade data on the
basis of which the allocation is done (or has been done).
35. Moreover, the EU considers that such an obligation is not implicit in Article XIII:4 as any
Member can assess for itself if it holds a substantial supplying interest in exporting a given product
to another Member, on the basis of available export statistics or during consultations with the
Member imposing the TRQ. In any event China argues that it had a substantial supplying interest
in supplying the products concerned for the purpose of Article XIII:4, and not that it could not
appreciate whether or not it had such interest.
36. Finally, the disclosure invoked by China is not foreseen in Article X III:3, which sets out the
disclosure obligations that a Member applying a restriction should respect.
3.5. THE EUROPEAN UNION DID NOT VIOLATE ARTICLE XIII:2(D) OF THE GATT 1994 BY DENYING SSI
STATUS TO CHINA
37. There is no reason to interpret the notion of SSI in a different way in Article XXVIII and
Article XIII. That notion is only defined in the context of Article XXVIII by Ad Article XXVIII(1),
paragraph 7, and the negotiation of a TRQ pursuant to Article XXVIII and the subsequent
allocation of the s hares within that TRQ in accordance with Article XIII, are closely related issues.
In the present case, moreover, the Article XXVIII negotiations on the opening of the TRQs and the
negotiations on the allocation of the TRQs took place concomitantly. It wou ld be both illogical and
unpractical to have negotiations under Article XXVIII with some Members considered to have a
substantial supplying interest in respect of the overall amount of the TRQ and, in parallel, to hold
negotiations with other Members consi dered to have a different substantial supplier interest in
respect of the allocation of the same TRQ in compliance with Article XIII:2(d).
38. Second, China has not demonstrated that the specific context or object/purpose of each of
those two Articles requires giving to the terms "substantial supplying interest" a different meaning
in each of them.
39. Third, WTO jurisprudence confirms that it is reasonable to give to the notion of SSI the same
meaning in Article XXVIII and Article XIII.
40. Therefore, si nce China did not have a substantial supplying interest in the tariff items
covered by the TRQs at issue in the present case under Article XXVIII, the European Union

- B-22 -

complied with Article XIII:2(d), first sentence by negotiating and agreeing the allocation of the
TRQ with all substantial suppliers (i.e. Brazil and Thailand).
3.6. THE EUROPEAN UNION DID NOT VIOLATE ARTICLE XIII:(4) BY REFUSING TO ENTER INTO MEANINGFUL
CONSULTATIONS WITH CHINA
41. China and the EU held consultations at the request of China on 19 May 2014, which
explicitly invoked Article XIII:4. The EU clarified that it was accepting to hold the consultations
without prejudice to its interpretation of Article XIII.
42. During the consultations, it emerged that the EU was not convinced that Article XIII:4
applied in the present case. Nevertheless, the European Union agreed to look into China 's
arguments in that respect and showed its openness to look at additional information that China
had undertaken to send following the 19 May meeting, but then did not send. During the 19 May
meeting, China requested the EU to adjust the shares allocated to other partners, specifically in
relation to two tariff lines based on a different reference period, and in the light of special factors
(the SPS measures).
43. China's assertion that the European Union refused to enter i nto consultations under
Article XIII:4 is, therefore, unfounded as a matter of facts.
3.7. CLAIMS UNDER ARTICLE II:1 OF THE GATT 1994
44. The certification of the changes to the schedule has the sole purpose of formally
incorporating into a Member 's schedule the modifications made in accordance with Article XXVIII
or other relevant provisions, but it is not a prerequisite for implementing such changes. This is
made clear by the Procedures for Negotiations under Article XXVIII, which state that:
7. Contracting parties will be free to give effect to the changes agreed upon in the
negotiations as from the first day of the period referred to in Article XXVIII:1, or, in
the case of negotiations under paragraph 4 or 5 of Article XXVIII, as from the date on
which the conclusion of all the negotiations have been n otified as set out in
paragraph 6 above. A notification shall be submitted to the secretariat, for circulation
to contracting parties, of the date on which these changes will come into force.
45. The European Union notified the conclusion of the negotiatio ns in accordance with
paragraph 6 of the Procedures on Negotiations under Article XXVIII on 27 May 2009, as regards
the First modification package, and on 20 December 2012, as regards the Second modification
package. Hence, in accordance with paragraph 7 of the same Procedures, the European Union was
free to give effect to the agreed changes as of the date of the relevant notification. There fore, by
implementing those changes before the certification of the changes to its schedule, the European
Union has not acted in violation of its tariff bindings pursuant to Article II:1 of the GATT 1994.
3.8. CLAIMS UNDER ARTICLE I:1 OF THE GATT 1994
46. According to the Appellate Body Report in EC – Bananas III (Article 21.5 – Ecuador II) / EC
– Bananas III (Article 21.5 – US), Article I:1 is violated when a Member imposes differential
in-quota duties on imports of like products from different supplier c ountries within a TRQ. In the
present case, it is plain that the in -quotas duties are the same for all suppliers. It is also
uncontested that the TRQs are defined on a product -wide basis and taking into account only the
custom classification of the products concerned.
47. It follows that China's claim is groundless.
4. CONCLUSION
48. For the reasons set out in this submission, the European Union requests the Panel to reject
all the claims submitted by China.

- B-23 -

ANNEX B-4
SECOND EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE EUROPEAN UNION
1. CLAIMS UNDER ARTICLE XXVIII:1 OF THE GATT 1994
1.1. CHINA DID NOT CLAIM ANY PSI IN THE FIRST MODIFICATION PACKAGE AND FAILED TO MAKE A TIMELY
CLAIM OF INTEREST IN RESPECT OF THE SECOND MODIFICATION PACKAGE
1. In response to a question from the Panel, most Third Parties have agreed that the Member
seeking the modification of a concession is entitled to disregard claims of interest which have not
been submitted in a timely manner and that the 90 -day period mentioned in Paragraph 4 of the
Procedures for Negotiations under Article XXVIII provides guidance for assessing whether a claim
has been timely submitted. China itself concedes that it may be possible to depart from the 90-day
time limit provided for in Paragraph 4 of the Procedures only with "due cause".
2. As regards the First modification package, China has confirmed that it never made a claim of
PSI until the present proceedings. China has not invoked any circumstance in order to justify its
failure to submit its claims of PSI within the 90-day time limit. As regards the Second modification
package, none of circumstances cited by China may justify China's delay of more than three years
in submitting the claims of interest.
1.2. THE EUROPEAN UNION WAS NOT REQUIRE D TO MAKE AL LOWANCE FOR THE SPS MEASURES APPLIED
TO CHINA, AS THEY ARE NEITHER QUANTITATIVE RESTRICTIONS NOR DISCRIMINATORY
3. China appears to agree that the European Union is not required to make allowance for
measures that have the effect of limiting imports but ar e not "discriminatory quantitative
restrictions" within the meaning of Ad Article XXVIII:1. China also appears to agree that the notion
of "discriminatory quantitative restriction" must be interpreted in the light of Article XI of the
GATT 1994 and, theref ore, of the note Ad Article III of the GATT 1994. Nevertheless, China
contends that the SPS measures which it has identified in this dispute are "discriminatory
quantitative restrictions". China has failed to substantiate this allegation.
1.2.1. The SPS measures are not "quantitative restrictions"
4. China has not contested that the SPS measures at issue are applied in order to enforce at
the border sanitary requirements which apply also to the domestic EU products. Instead, China
limits itself to argue, in the abstract, that "different aspects" of a measure may fall under
Article III or under Article XI of the GATT 1994. But China has not shown that, in the case at hand,
the SPS measures which it has identified include any restrictive "aspect" without equ ivalent in the
sanitary requirements applied to the EU's domestic products.
5. China misrepresents the panel's findings in EC – Seal Products. The measure at issue in that
case prohibited the placing on the market of seal products. In the case of imports this prohibition
was enforced at the border. The finding cited by China was not reached under Article XI of the
GATT 1994, but instead under Article 2.2 of the TBT Agreement. Moreover, the panel did not find
that the measure at issue was "a restriction on importation", but rather that it was "trade
restrictive" within the meaning of Article 2.2 TBT.
6. The panel report in US – Shrimp (Article 21.5) does not support China's position. The United
States did not argue in that case that the measure fell within the s cope of Article III of the
GATT 1994. Indeed, the import prohibition at issue in US – Shrimp had no domestic equivalent.
1.2.1.1 The SPS measures are not "discriminatory"
7. China has not alleged, let alone proven, that imports from other countries posing similar
sanitary risks as the imports from China are not similarly restricted. Instead, China limits itself to
argue that the term "discriminatory" covers any situation "where imports from a WTO Member are

- B-24 -

treated differently from other WTO Members, irrespective of the ground of such disparate
treatment".
8. In its first oral statement China has conceded that "whether a restriction is discriminatory
must be determined based on the text as well as the object and purpose of the provision in which
the word is used". Nevertheless, China goes on to argue that its reading of the term
"discriminatory" is necessary in order to achieve the objective pursued by Article XXVIII, which
China describes as "reinstating the general level of concessions that had exis ted before the
increase of the bound rates".
9. The specific objects and purposes of Article XXVIII are not limited to the single objective
mentioned by China. They may be described as follows:
1) encouraging Members to make tariff concessions by provid ing them with flexibility to
withdraw or modify those concessions subsequently, if necessary;
2) ensuring that the modified or withdrawn concessions are replaced with equivalent
concessions, so as to maintain the "general level of reciprocal and mutually
advantageous concessions"; and
3) facilitating the negotiation of the modification or withdrawal of tariff concessions, so as
to limit the uncertainty which is inherent in such negotiations.
10. The reading of the term "discriminatory" invoked by China would undermine the first and the
third of the objects and purposes of Article XXVIII described above by rendering unduly
complicated the negotiation of the modification of concessions. Sanitary requirements, such as
those at issue in this dispute, and many o ther legitimate regulatory requirements often have the
effect, in law or in fact, of restricting imports from certain countries which fail to comply with such
requirements (for example, by reason of deficiencies in their own regulatory systems). Making
adjustments to the import shares for all such restrictions would be an extremely complex task
involving the use of highly speculative estimates.
11. In the present case, China's interpretation of the term " discriminatory" would have required
the European Union to make allowance not only for the specific SPS measures applied to imports
from China, but also for the SPS measures applied to many other WTO Members and, more
generally, for the entire sanitary regime applied to imports of poultry products. Indeed, it must be
emphasised that that regime (like the sanitary regimes applied by most, if not all, countries) rests
on the fundamental principle that the SPS measures applied to the imports from any given country
must address the specific sanitary risks posed by the imports from that country, a principle which
China regards as being inherently "discriminatory". Therefore, on China's interpretation of the term
"discriminatory", the European Union would have been required to estimate what would have been
the import shares of all potential suppliers of poultry products in the absence of the EU's sanitary
regime for imports of those products.
12. For example, if China's interpretation were upheld, the European Union would have had to
make allowance also for inter alia:
 the restrictions applied pursuant to Regulation 798/2008and its predecessors, which
lay down the list of countries from which imports of fresh poultry meat are authorized;
 the restrictions adopted by the Commission in order to address specific sanitary risks,
such as the decisions restricting imports from China, Thailand and other countries on
grounds of avian influenza; or
 the restrictions applied pursuant to Directive 96/23/EC.
13. Moreover, contrary to China's allegations, its reading of the term "discriminatory" is not
required in order achieve the second objective described above i.e. the objective of maintaining
the general level of concessions. To the contrary, China's interpretation would have the
consequence that, in order to modify a concess ion, a Member could be required to provide
compensation which is well in excess of the value of the modified concession. The value of any
tariff concessions made by a Member is implicitly limited by the regulatory restrictions, such as

- B-25 -

sanitary restriction s, which a Member is entitled to impose or maintain in accordance with the
relevant provisions of the WTO Agreement. China has not argued that the SPS measures at issue
are WTO inconsistent. Nor has China argued that those SPS would otherwise impair or nul lify the
concessions within the meaning of Article XXIII:1 of the GATT 1994. Since those SPS measures do
not diminish the original value of the concessions granted by the European Union, there is no
reason why the European Union should make allowance for such measures in order to maintain the
general level of concessions.
14. Moreover, China's interpretation could have the anomalous result that negotiations would
have to be undertaken with Members whose supplying interest is largely theoretical, instead of
other Members with a far more immediate supplying interest. This would be detrimental to all WTO
Members, since a Member with a genuine supplying interest is more likely to commit the necessary
efforts to ensure adequate compensation for the benefit of all WTO Members.
1.2.2. In the alternative, if the European Union had been required to
make allowance for the SPS measures, the evidence in China's first
written submission does not substantiate China's claims of PSI or
SSI
15. In its opening oral statemen t, China claimed that the issue before this Panel is whether the
European Union should have taken into account the SPS measures identified by China and that it is
irrelevant whether or not China has adduced evidence that it should have had a PSI or SSI in the
absence of those measures. The European Union disagrees. The only obligation imposed by
Article XXVIII is to negotiate or consult, respectively, with the Members holding a PSI or SSI. The
note Ad Article XXVIII provides guidance in order to identify those Members, but it does not create
self-standing process obligations. Therefore, if the Panel finds that China did not hold a PSI or SSI,
there can be no violation of Article XXVIII. Moreover, China's position raises an issue of terms of
reference as this claim was not included in the panel request.
1.2.2.1 China cannot rely on evidence that was not made available to
the European Union during the Article XXVIII procedures
16. China concedes that it was required to submit evidence in support of its claims of PSI, but
not in support of its claims of SSI. China invokes the fact that paragraph 2 of the Understanding
on the Interpretation of Article XXVIII, unlike its paragraph 5, only refers to the provision of
supporting evidence by the Members claiming a PS I. However, the provisions cited by China
provide no basis for making that distinction.
17. China further contends that its claims of PSI in respect of the Second modification package
were supported by evidence. However, as explained by the European Union , such evidence
consisted exclusively of import statistics for the period 2010 -2012. All the other evidence included
in China's first written submission (including detailed data on China's share of world production
and world trade and China's exports to th ird countries) was not provided in support of China's
claims of PSI during the Article XXVIII procedures and, therefore, cannot be relied upon by China
in this dispute.
1.2.2.2 China cannot rely on import data for a period subsequent to the
opening of opening of the negotiations
18. China argues that, in view of the duration of the negotiations, the European Union was
required to make a re -determination of the Members holding a PSI or SSI based on the import
data available at that point in time. For the rea sons explained below, the European Union submits
that it was not required to make such a re-determination. At any rate, the European Union submits
in the alternative that, even if it had been required to make a re -determination of the Members
holding a PSI or SSI during the negotiations, the import data for the period following the
conclusion of the negotiations (i.e. period 2012 -2015) would still not be pertinent for assessing
this claim.
19. China also invokes paragraph 3 of the Understanding in support of its position that it may be
necessary to take into account import data for a period following the initiation of the negotiations.
However, paragraph 3 of the Understanding does not provide for the use of such post -initiation

- B-26 -

import data. The determinatio n of whether trade in the affected product "has ceased" to benefit
from preferences or "will do so" by the conclusion of the negotiations is to be done when the
negotiations are opened. If that is the case, the trade to be taken into account is the trade " which
has taken place" under the preferences prior to the initiation of the negotiations, rather than the
subsequent non-preferential trade. Thus, far from supporting China's position, paragraph 3 of the
Understanding comforts the EU's view that only impor t data pre -dating the initiation of the
negotiations is to be taken into account.
1.2.2.3 The evidence in China's first written submission does not
warrant China's claims of PSI or SSI
20. The European Union is providing as Exhibit EU – 40 a table showing China's import share in
the top largest third -country import markets for the tariff items 0210 99, 1602 32 and 1602 39
(i.e. the same items for which China has provided import share data in its first written submission)
during the period 2002-2012. The table evidences that China's share only exceeded 10 % in a few
of the top largest import markets: 1 out of the 18 largest import markets in the case of 0210 99; 3
out 11 in the case of 1602 32; and 3 out of 14 in the case of 1602 39. This confirms that, in
practice, China's import shares may vary considerably from one import market to another and,
consequently, that neither global data nor data for a handful of unrepresentative import markets,
such as the data included in China's first written submission, ca n be considered as a reliable
indicator of China's future trade prospects in the EU market.
1.2.2.4 As regards the Second modification package, the European
Union was not required to re -determine the Members having a PSI or SSI
on the basis of import data subsequent to the initial determination
21. China contends that there is an obligation to make a re -determination when negotiations do
not comply with the time limits provided for in Article XXVIII:1. But, as explained by the European
Union, those time l imits do not apply to so -called 'reserved' negotiations under Article XXVIII:5.
The time limits provided for in Article XXVIII:1 are linked to the requirement to make the
modifications on the first day of each three year period, the first of which began on 1 January
1958. The defining feature of the negotiations 'reserved' under Article XXVIII:5 is precisely that
they are not subject to that requirement. Consequently, the time limits linked to that requirement
are not applicable to 'reserved' negotiations.
22. In practice, and since the 1960s, most negotiations have been conducted as 'reserved'
negotiations under Article XXVIII:5. The reason for this is that, in many cases, Article XXVIII:1
does not afford the necessary flexibility due to its tight deadline s. Applying the deadlines provided
for in Article XXVIII:1 to 'reserved' negotiations under Article XXVIII:5 would eviscerate the latter
provision of its effet utile and deprive Members of much needed flexibility in negotiating the
modification of concessions. In turn, this would undermine the objective of encouraging Members
to make further concessions. China insists that applying the time limits provided for in
Article XXVIII:1 also to negotiations 'reserved' under Article XXVIII:5 is es sential in order to
ensure the objective of ending the negotiations as quickly as possible. Yet, on China's own
interpretation, the Member seeking the modification of a concession would have to re -determine
the Members having a PSI or SSI every six months. It is difficult to see how such a constant re -
determination of the negotiating and consulting partners could have contributed to the objective of
speeding up the negotiations.
2. CLAIMS UNDER ARTICLE XXVIII:2 OF THE GATT 1994
2.1. GATT ARTICLE XXVIII AND PARAGRAPH 6 OF T HE UNDERSTANDING DO NOT ADDRESS THE
ALLOCATION OF TRQS AMONG SUPPLYING CO UNTRIES – PARAGRAPH 6 OF THE UNDERSTANDING
DOES NOT APPLY AT THE LEVEL OF EACH OF THE COUNTRY SHARES OF A TRQ
23. Paragraph 6 only refers to "tariff quotas". It makes no reference whatsoever to the shares of
a tariff quota allocated to certain supplying countries or groups of countries.
24. The European Union does agree with China that paragraph 6 provides guidelines for
calculating the amount of compensation to be provided to all Members. But from this it does not
follow that paragraph 6 must be applied separately at the level of each country share of an

- B-27 -

allocated TRQ. Rather, the opposite is true. China further argues that, unless paragraph 6 is
applied at the level of each share of the TRQ, it would "create discrimination". However, if the total
amount of compensation resulting from the application of paragraph 6 of the Understanding is
allocated consistently with Article XIII:2, such allocation cannot be considered as "discriminat ory".
Moreover, reading additional rules on the allocation of TRQs into the provisions of Article XXVIII:2
and paragraph 6 of the Understanding would result in the application of two different and
potentially conflicting sets of requirements. TRQs negotiated pursuant to Article XXVIII would have
to comply with the rules of Article XIII and, at the same time, with the additional requirements
read by China into Article XXVIII:2 and paragraph 6 of the Understanding.
25. China argues that Article XXVIII:2 "gov erns the allocation of tariff quotas in the Schedule of
concessions", while "what Article XIII governs is the allocation of tariff quotas in reality, i.e. in a
WTO Member's domestic regulations or in the implementation of these regulations". This
distinction is specious. It is beyond dispute that, "in reality", one and the same TRQ cannot be
allocated simultaneously in two different ways. If a Member allocates "in reality" a TRQ in order to
comply with Article XIII:2 in a manner which departs from the alloc ation bound in its schedule, it
would violate its obligations under Article II of the GATT. Therefore, it is plain that China's position
would lead to a genuine conflict between, on the one hand, Article XIII and, on the other hand,
Article XXVIII:2 and pa ragraph 6 of the Understanding. China cannot but recognise this conflict,
but seeks a way out by arguing that the Member concerned could always avoid a violation of its
obligations by opening a larger TRQ than that bound in that Member's Schedule. However, a
'solution' to a conflict between two obligations which involves the imposition on the Member
concerned of an additional obligation going beyond either of those two obligations is not a proper
solution. Article XIII:2 of the GATT governs exclusively the allocation of TRQs. It cannot be
interpreted and applied in such a way as to impose upon a Member an obligation to open a TRQ
which exceeds the compensation previously agreed and bound by that Member in its Schedule
consistently with Article XXVIII.
2.1.1. The appropriate reference period for the application of paragraph 6
of the Understanding is the period preceding the opening of the
negotiations
26. China argues that the EU's position is contradicted by the fact that the compensation for one
of the tarif f items included in the First modification package (0210 99 39) was calculated on the
basis of the imports for the period 2000 -2002 instead of the imports for the reference period
2003-2005, whereas the compensation for another item in the same package (16 02 3219) was
calculated on the basis of the imports for the period July 2005 -June 2006, rather than for the last
calendar year of the reference period (i.e. 2005). China's criticism is misguided. The European
Union has never contested that the negotiating Members may agree to depart from the guidelines
provided in paragraph 6 of the Understanding, provided that, as in the present case, the amount
of compensation exceeds that which would result from such guidelines. Indeed, if the negotiating
Members could not depart from the benchmark provided for in paragraph 6 of the Understanding,
it would be pointless to engage in negotiations. In particular, the negotiating Members may agree
to use a different reference period from that provided for in paragraph 6 if t hat results in a larger
amount of compensation. But this is not the same as saying that the negotiating Member are
always required to do so. Contrary to what appears to be China's view, neither Article XXVIII:2 nor
paragraph 6 of the Understanding impose a ny obligation to use always the reference period which
is most favourable to the supplying Members, let alone to one supplying Member.
27. Moreover, in the two instances mentioned by China, the compensation agreed by the
European Union was based on import data pre-dating the initiation of the negotiations, which data
was, therefore, fixed and known in advance to the negotiating parties.
28. As further explained by in the EU's first written submission, there is no reason why the post -
initiation import volumes should necessarily be higher than the pre-initiation volumes. The present
case illustrates this. According to China's own data and calculations, the amount of the TRQs for
two of the tariff items included in the second modification package (1602 39 21 and 1602 39 80) is
lower if the formulae of paragraph 6 of the Understanding are applied on basis of import data for
the period 2009-2011, instead of import data for the reference period 2006-2008.

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2.1.2. The compensation provided by the European Union in t he form of
TRQs is fully consistent with paragraph 6 of the Understanding
29. China concedes that the size of the TRQs agreed by the European Union exceed the amount
that would result from the application of the formulae in paragraph 6 of the Understanding , on the
basis of data for the reference periods 2003 -2005 and 2006 -2008, in all cases but one: the TRQ
for tariff item 1602 31. The difference, however, is minimal. The TRQ agreed by the European
Union covers 103.896 tonnes whereas, according to China's c alculations in Exhibit CHN - 49, the
compensation required pursuant to paragraph 6 of the Understanding would amount to 103.953
tonnes, i.e. a difference of just 57 tonnes.
30. Moreover, the difference appears to be due to the use of a different set of imp ort data. For
the purposes of the negotiations, the European Union relied on the import data contained in the
notification made by the European Union to the WTO in June 2006, which covers the imports into
"EU 25" in 2006 and the imports into "EU 27" in 2007 and 2008.. In contrast, the data set used by
China appears to cover all imports into "EU 28", i.e. including the imports into Romania, Bulgaria
and Croatia made into those countries before they joined the European Union.
31. The data on imports into Rom ania, Bulgaria or Croatia before those countries joined the
European Union is not representative because they may be affected by import conditions which are
different from those prevailing in the European Union. Moreover, to the extent that the accession
of those countries to the European Union resulted in an increase of the applicable duty rates, the
European Union would have been required to provide compensation in accordance with
Article XXIV:6 of the GATT 1994.
32. China also concedes that the "all oth ers" share determined by the European Union is larger
than the share calculated by China by applying the formulae of paragraph 6 of the Understanding
on the basis of import data for the reference periods 2003 -2005 and 2006 -2008, with only two
exceptions: the tariff items 1602 39 21 and 1602 39 80. In fact, however, China's calculations in
Exhibit CHN 49 show that, in the case of item 1602 39 21, the share for "all others" would be nil,
as there were no imports from "all others" during the reference period 2 006-2008. China's
calculation of the "all others" share in tariff item 1602 39 80 also appears to be incorrect. The
European Union notes that, in particular, according to Exhibit CHN – 49, imports from China would
have reached 201 tonnes in 2006. Yet, according to the data notified by the European Union to the
WTO in 2006 (Exhibit CHN – 25) and to the 2016 Eurostat figures provided as Exhibit EU – 30,
there were no imports at all from China during the reference period 2006 -2008. Again, this
discrepancy appears to be due to the fact that China has used import data into EU 28.
3. CLAIMS UNDER ARTICLE XIII OF THE GATT 1994
3.1. ARTICLE XIII:1 DEALS NEITHER WITH THE ALLOCATION OF SHARES WITHIN A TRQ NOR WITH LEVEL
OF ACCESS TO BE GRANTED TO EACH MEMBER
33. The European Union recalls that Article XIII:1 establishes a principle of non -discriminatory
access to, and participation in, a TRQ. It requires that a TRQ is applied by a Member on a product -
wide basis without discrimination as to the origin of the product. The Appellate Body has stressed
that access to a TRQ and its allocation to different suppliers are two conceptually distinct
questions. They must therefore be appreciated separately.
34. Moreover, it results from the structure of Article XIII and from the finding of the Panel in EC-
Bananas III (Ecuador) , that Article XIII:2 is lex specialis with respect to Article XIII:1. Hence,
China's arguments concerning the allocation of the TRQ are to be examined in the first place in the
light of the first provision . Article XIII:1 cannot be relied upon to overrule the provisions of
Article XIII:2. That means that for TRQs allocation's aspects that are not covered by Article XIII:2,
Article XIII:1 still applies, to the extent that its application does not lead to res ults that would
conflict with the outcome of the application of Article XIII:2. This does not read out of
Article XIII:1 the provision that imports from all WTO Members must be "similarly restricted".
35. In paragraph 7.76 of the panel report in EC – Bananas III (Ecuador), the Panel simply made
some comments on the fact that, in its view, it would be preferable not to allocate the ‘all others '
share among non -substantial suppliers (even if specific shares are allocated to the substantial

- B-29 -

suppliers). Hence, that Panel statement does not support the view that Article XIII requires that an
‘all others' share must be allocated to non -substantial suppliers so that, going forward, they can
obtain a substantial supplying interest.
36. China's contention that Article XIII:1 requires to allocate a share to 'all others' at a level that
permits the non-substantial suppliers to increase their exports so as to obtain a n SSI would
require either to reduce the share allocated to the substantial suppliers (possibly also to zero) or
would transform the TRQ in an unlimited tariff concession.
37. Paragraph 476 of the Appellate Body report in EC- Bananas III (Article 21.5 – USA) does not
confirm China's argument to the effect that the EU should have reserved a "significant" sh are for
all others. That paragraph relates essentially to the interpretation of Article 3.8 of the DSU and not
to Article XIII.
3.2. THE EUROPEAN UNION WAS REQUIRED NE ITHER TO BASE THE AL LOCATION OF THE TRQS ON A
DIFFERENT REFERENCE PERIOD NOR TO MAKE ADJUSTMENTS FOR SPECIAL FACTORS
38. In allocating the TRQs at issue the European Union followed the first allocation method set
out in Article XIII:2(d), which provides a "safe harbour" to the Member applying the TRQ, and
does not impose any specific obligat ion as to the reference period or special factors. China
therefore cannot pretend that the European Union was required to comply with the same legal
criteria set in the second allocation method provided for by Article XIII:2(d).
39. In any event, the agre ement with the substantial suppliers on the allocation of the TRQs
treats substantial suppliers and non-substantial suppliers in the same way by applying an impartial
allocation method based on objective factors. It is quite obvious that a method that disr egards
special factors affecting any of the suppliers of a given product would not be objective and
unbiased.
40. China's argument that chapeau of Article XIII:2 requires to set aside a minimum share for
non-substantial suppliers, regardless of the trade data considered, would be discriminatory vis -à-
vis substantial suppliers. The Appellate Body Report in EC – Bananas III (Article 21.5 –
Ecuador II) / EC – Bananas III (Article 21.5 – US), is of no avail to China. That Report did not
require setting aside a minimum share for Members that are non -substantial suppliers, regardless
of the level of imports from those suppliers in the past.
41. Finally, the European Union demonstrated that the SPS measures mentioned by China are
not "special factors", but measur es that define the relevant product market and the nature of the
competitive relationship between products. China, on the other hand, explains that compliance
with sanitary requirements is not a factor of competition. The European Union fails to see how
product's properties, which are dealt with by the SPS requirements (such as the presence in the
product of pathogenic agents or substances harmful for human and animal health) can be ignored
when apprehending the comparative advantage of one country and the relevant product market.
Since EC – Asbestos the Appellate Body has clarified that properties of a product that make it
dangerous for human health are relevant to determine the competitive relationship between that
product and other allegedly like products.
42. China argues that when it allocates a TRQ, a Member should make abstraction of the SPS
measures, even if those measures are perfectly legal, otherwise the effect of the TRQ will be to
perpetuate the SPS measures. In reality, what China calls a perpet uation of the SPS measures is
the effect of any allocation of a TRQ in line with Article XIII:2(d). In any event, the expected
import growth in the European Union of poultry meat products that do not comply with the EU's
SPS requirements was and remains ze ro, regardless of China 's production capacity, its
investments, its position in other selected export markets or its ability at a given point in time to
partially meet those requirements for certain tariff lines.
43. In summary, the European Union reitera tes that since the SPS measures are not special
factors, the European Union was not required to adjust the ‘all others ' share or set aside a specific
share for China or base the allocation of the TRQ on a different reference period not affected by
those measures.

- B-30 -

3.3. THE CHAPEAU OF ARTICLE XIII:(2) DOES NOT REQUIRE THE EUROPEAN UNION TO ALLOCATE A
SHARE FOR "ALL OTHER" COUNTRIES IN EACH TRQ AT LEVELS THAT ALLOW THEM TO ACHIEVE AN SSI
44. According to China, the European Union violated the chapeau of Arti cle XIII:2 because it did
not establish the shares of the TRQs for ‘all others ' at levels that allow these countries “going
forward” to achieve a substantial interest. China explained in its oral statement that it did not
mean that, if a non -substantial supplier captures the entire ‘all others ' share, there would be no
share left in the TRQ for others . However, unless the dimension of the ‘all others ' share and also
the amount of the TRQ is a moving target (which would transform a TRQ in an open ended tarif f
concession), China's reasoning implies necessarily that a non-substantial supplier may at a certain
point capture the whole ‘all others ' share. That is confirmed by China 's assertion that the ‘all
others' share must be sufficient to allow at least one no n-substantial supplier to gain an SSI.
Hence, China's line of argument on top of being contradictory, it would only postpone the freezing
of the TRQs allocation.
45. China is also incapable to indicate what is the minimum share that the EU should have
allocated to "all others" to comply with the chapeau of Article XIII:2 when allocating the TRQs at
issue, but it suggests that it should be established at a level allowing all non-substantial supplier to
gain an SSI. But China 's argument lead to a paradoxical situation where either the ‘all others '
share would overrun the shares allocated to the substantial suppliers or the TRQs would need to
be transformed in unlimited tariff concessions.
46. Finally, China's claims are not confirmed by the practice of the Member. The European Union
provided examples of other TRQs included in the schedule of other Members that do not
contemplate an ‘all others' share or contemplate only a symbolic share for ‘all others'.
3.4. THE EUROPEAN UNION DID NOT VIOLATE THE CHAPEAU OF ARTICLE XIII:2 AND ARTICLE XIII:4 BY
NOT EXPLICITLY IDENTIFYING THE DATA THAT IT TOOK INTO ACCOUNT TO DETERMINE THE TRQS
47. China argued that, unles s the historical trade data, the base period, the basis for allocating
the shares and the presence or abse nce of special factors are disclosed, WTO Members will be in
the dark and will not be in a position to determine whether or not they hold an SSI and can ask for
consultations under Article XIII:4.
48. The European Union wonders how this reasoning accords w ith China's claims according to
which, even in the absence of that information disclosure, China has demonstrated to the Panel
that it holds an SSI on the basis of its poultry meat production and its export to some other
Members? Moreover, the European Uni on wonders why China did not ask for all the clarifications
that it considered appropriate on those matters during the meeting of 19 May 2014?
3.5. THE EUROPEAN UNION DID NOT VIOLATE ARTICLE XIII:2(D) OF THE GATT 1994 BY DENYING SSI
STATUS TO CHINA
49. China reiterates its arguments that the notion of SSI is different in Article XXVIII and in
Article XIII and that the European Union should have assessed China's supplying interest by taking
into account the SPS measures as a special factor. However, China is incapable to come up with
any alternative definition of substantial supplier for the purpose of Article XIII:4. If the European
Union should have recognised China 's SSI because China is one of the biggest world producers of
poultry meat products and it holds a leading supplying position in certain other Members, that
would imply that China should be recognised as a substantial supplier of poultry meat products by
all Members, regardless of their actual imports from China.
50. Moreover, by making an exam ple China itself demonstrated that the notion of substantial
supplier under Article XXVIII and Article XIII should be interpreted in a harmonious way. Indeed, if
the SSI status of a Member was excluded because it was subject to a WTO incompatible import
ban, that means in all likelihood that the party imposing the TRQ did not take into account the
discriminatory quantitative restrictions affecting that Member. In other words, the notion of
substantial interest was applied in violation of paragraph 7 of Ad Note Article XXVIII:1. That, in
turn, would mean that the agreement reached with the other substantial suppliers for the
allocation of the TRQ would not comply with Article XIII:2(d), because the agreement would not
include all substantial suppliers.

- B-31 -

3.6. THE EUROPEAN UNION DID NOT VIOLATE ARTICLE XIII:(4) BY REFUSING TO ENTER INTO
MEANINGFUL CONSULTATIONS WITH CHINA
51. China's assertion that the European Union refused to enter into consultations under
Article XIII:4 is unfounded as a matter of facts, gi ven that the European Union and China met and
discussed China's request to adjust the allocation of two tariff lines based on a different reference
period, and in the light of special factors (the SPS measures). And indeed, consultations between
the parties on those matters are still ongoing.
52. The proposition that the obligation to enter into consultations with a substantial supplier
should be construed as an obligation to agree with that substantial supplier is simply untenable as
Article XIII:4 only sets out a procedural obligation.
53. Finally, Article XIII:4 does not apply when the allocation among substantial suppliers is
based on the first sentence of Article XIII:2(d), but only when it has been decided "unilaterally". In
any event China did not make a duly justified claim of SSI when requesting consultations pursuant
to Article XIII:4.
3.7. CHINA'S NEW CLAIMS UNDER ARTICLE XIII OF PERIODIC REVIEW A ND ADJUSTMENT OF THE TRQ
ALLOCATION
54. In its second written submission China raised new claims, acco rding to which Article XIII
would require a Member applying a TRQ to review and adjust its allocation an a periodic basis in
the light of market developments.
55. Besides not being based on the text or the case law concerning Article XIII, these claims ar e
clearly not covered by the Panel 's request and therefore they fall outside the Panel 's terms of
reference.
4. CLAIMS UNDER ARTICLE I:1 OF THE GATT 1994
56. China response to Panel's Question No. 58, confirms that China's claims under Article I:1 are
consequential to China 's claims concerning Article XIII:2. In any event they are also outside the
scope of Article I:1.
5. CONCLUSION
57. For the reasons set out in this submission, the European Union reiterates its request that the
Panel reject all the claims submitted by China.

- C-1 -

ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Executive summary of the arguments of Argentina C-2
Annex C-2 Executive summary summary of the arguments of Brazil C-6
Annex C-3 Executive summary summary of the arguments of Canada C-9
Annex C-4 Executive summary summary of the arguments of the Russian Federation C-13
Annex C-5 Executive summary summary of the arguments of Thailand C-15
Annex C-6 Executive summary summary of the arguments of United States C-22

- C-2 -

ANNEX C-1
EXECUTIVE SUMMARY OF THE ARGUMENTS OF ARGENTINA*
1. The Argentine Republic is participating and setting out its views in this case due to its
systemic and trade interest in the correct interpretation of certain obligati ons contained in the
legal provisions invoked in this dispute.
Article XXVIII of the GATT: The definition of "substantial interest" in Article XXVIII
of the GATT.
2. Argentina considers it important to reach an interpretation of the phrase "substantial
interest" in accordance with the text, object and purpose of Articles XIII and XXVIII, and the
GATT 1994 in general, since there is no definition in the covered agreements. Argentina notes
that Note 7 to Article XXVIII:1 of the GATT 1994 states that "substant ial interest" covers only
those contracting parties which have or could be expected to have a "significant" share in the
market of the Member seeking to modify or withdraw the concession.
3. In Argentina's view, the word "significant" must be interpreted a s a share in the market of
the importing Member that is perceptible or, in statistical terms, measureable, whether or not less
than 10%. For Argentina, the alleged minimum threshold of 10% participation in the market of the
country modifying the concession as a basis for the right to claim the existence of a "substantial
interest" has no textual basis in the GATT 1994.
4. Argentina also believes that the 10 % criterion cannot be considered one of the "other
decisions of the CONTRACTING PARTIES" within the me aning of paragraph 1(b)(iv) of the
GATT 1994. Similarly, it is Argentina's understanding that this criterion is not a "decision[…],
procedure[…] [or] customary practice[…] followed by the CONTRACTING PARTIES", within the
meaning of Article XVI:1 of the Mar rakesh Agreement Establishing the World Trade Organization.
Nor is the 10% criterion a "subsequent agreement" or a "subsequent practice" within the meaning
of Article 31.3(a) and (b) of the Vienna Convention on the Law of Treaties.
Discriminatory quantitative restrictions and the determination of substantial interest
5. Furthermore, Argentina considers that when determining which Members have a substantial
interest in the concession the modification of which is being sought, consideration must be given
to a ll the circumstances that might have affected the trade t hat had existed on the basis
of most-favoured-nation (MFN) treatment conditions, in particular, "discriminatory quantitative
restrictions". Argentina takes the view that an import ban is a "quant itative restriction" within the
meaning of Note 7 to Article XXVIII:1 of the GATT, given that its effect is to reduce imports
to "zero".
Trade restrictions and the maintenance of a "general level of … concessions" under
Article XXVIII:2
6. Argentina also point s out that the determination of the general level of reciprocal and
mutually advantageous concessions under Article XXVIII:2 must be made on the basis of the
"concessions" that existed prior to the initiation of the negotiations, irrespective of the
circumstantial trade restrictions.
7. Likewise, Argentina notes that the determination of Members with a principal supplying
interest or substantial interest must take into account the share in the market they would have
had "in the absence of discriminatory qua ntitative restrictions". Since Notes 4 and 7 to
Article XXVIII:1 of the GATT do not establish how that share in the market is to be determined,
paragraph 4 of the Understanding on the Interpretation of Article XXVIII of the GATT 1994 may be
relevant, as this clause applies in the absence of statistical data.

* Original Spanish.

- C-3 -

8. Argentina wishes to highlight that the period used for the determination of Members with a
principal supplying interest or substantial interest must be "representative" and "recent". It is not
representative if there are import bans or other discriminatory quantitative restrictions. And it is
not recent if, in the context of Article XXVIII, there is a significant lapse of time between
notification of the intention to withdraw or modify a concession an d the point in time at which it is
planned to bring the modification into effect.
9. Paragraph 1 of the Understanding on the Interpretation of Article XXVIII of the GATT sheds
light on the notions of "representative" and "recent". The verb "has" in the pre sent tense in this
paragraph implies that the principal supplying interest is not frozen in the period that ends when a
Member notifies its intention to modify or withdraw a concession; on the contrary, its status as a
principal supplier lasts for as long as it continues to have the highest ratio of exports. Therefore, if
a Member did not have a principal supplying interest in the period preceding the negotiations, it
could acquire that interest if the period following the notification referred to in paragr aph 2 of the
Procedures for Negotiations under Article XXVIII is taken into consideration when determining
its status.
10. Furthermore, it is Argentina's understanding that the compensatory agreements reached by
a Member modifying the concession in the con text of a procedure under Article XXVIII of the
GATT must ensure the maintenance of a general level of reciprocal and mutually advantageous
concessions not less favourable to trade than that obtained before the negotiations pursuant to
Article XXVIII:2 of the GATT 1994, in particular for trade with those Members which had not
participated in the compensatory negotiations on account of not being considered to have a
principal supplying interest or a substantial interest.
Article XIII:1 of the GATT and non-discriminatory tariff quota access
11. Argentina considers that the allocation of tariff rate quotas almost exclusively to
two WTO Members (and on some tariff lines an almost exclusive allocation to a single Member)
may be considered inconsistent with Articl e XIII:1 of the GATT. Argentina also considers the term
"similarly restricted" to mean, in the case of tariff quotas, that imports of like products of
third countries must have access to, and be given an opportunity of, participation.
12. In addition, Argentina takes the view that the allocation of a practically insignificant segment
to "other countries" implies a de facto impossibility for third countries to have access to, and
effectively participate in, the tariff quota, and consequently establishes an allocation inconsistent
with the principle of non -discrimination captured by Article XIII:1, owing to discriminatory
administration of the restriction.
The chapeau of Article XIII:2 and the non-distortive distribution of the tariff quota
13. Argentina highl ights the existence of the obligation to share the tariff quota among all
Members supplying the product in the least distortive manner possible, on the basis of the
competitive opportunities of each supplying country, so that their access to and share in t he tariff
quota mimics their comparative advantages.
14. Argentina considers that the allocation of an insignificant quota to "other countries",
together with the establishment of out -of-quota tariffs at very high levels, places Members which
only have acc ess to the quota allocated to "other countries" at a disadvantage vis-à-vis other
supplying Members which have a specific quota. Consequently, the distribution of the tariff quota
becomes de facto a permanent allocation of the quota share and a long -term f reeze which
constitutes an impediment or obstacle to the normal development of trade, inconsistent with the
chapeau of Article XIII:2.
15. Furthermore, pursuant to Article XIII:2 of the GATT, the determination of tariff quotas must
be based on statistical data that discount the impact of import restrictions.
16. Argentina considers that the period used as a basis for allocation of the tariff quota must be
the period immediately preceding the modification of the tariff concession, provided that the period
is representative in terms of Article XIII:2(d). If a reference period were permitted that did not
approach as closely as possible what the various Members might have expected in the absence of

- C-4 -

the tariff quotas, a Member introducing a tariff quota could arb itrarily select a period of time and
distribute the quota in a trade-distorting manner inconsistent with the chapeau of Article XIII:2.
17. In Argentina's view, the logic of Article XIII:2(d), especially as regards the weighing of
special factors, should be applied in the interpretation of the chapeau of Article XIII:2, both to the
allocation of specific quotas and to the establishment of quotas for "other countries". A Member, in
determining a tariff quota for "other countries", must weigh the special fact ors that may be
affecting or may have affected trade in the product, so as to ensure a distribution of trade that
approaches as closely as possible the shares which the different Members might be expected to
obtain in the absence of the tariff quota.
18. Argentina considers that the Note to Article XI of the GATT, and the interpretative note to
Article 22 of the Havana Charter, could help in the interpretation of the term "special factors"
under Article XIII:2(d). Evidence of the existence of a new or great er export capacity, among
others, constitutes a "special factor" that must be taken into account by the Member establishing a
tariff quota.
19. In short, Argentina maintains that even when acting consistently with Article XIII:2(d) in the
allocation of tar iff quotas, there are various instances in which the Member establishing a quota
may violate the chapeau of Article XIII:2.
Articles XIII:2 and XIII:4 of the GATT and the availability of information on the method
used in the establishment of a tariff quota
20. Argentina agrees with China's argument concerning the chapeau of Article XIII:2 and
Article XIII:4 of the GATT 1994, to the effect that a Member that establishes a tariff rate quota
must make clear the statistical methodology used to determine the representative reference period
and the manner in which the special factors which may have affected or may be affecting the trade
in that product are taken into account and weighed.
21. Argentina argues that it is necessary to have access to the statistical d ata used in the
allocation of the tariff rate quotas in order for WTO Members to be able to determine whether
there was a distribution of trade approaching as closely as possible the shares which the various
contracting parties might be expected to obtain in the absence of restrictions.
22. Failure to disclose the methodology used in the establishment of a tariff rate quota violates
the chapeau of Article XIII:2 and the provisions of Articles XIII:2 and XIII:4, as it encourages the
exercise of discretion in the distribution of trade under a tariff rate quota.
23. Furthermore, in Argentina's view there is no legal basis for having to determine the
substantial interest provided for in XXVIII:1 and XIII:2(d) on the basis of different statistical data.
Article XIII:4 of the GATT and the obligation to enter into consultations on the allocation
of a quota
24. Argentina believes that the Panel should analyse whether the obligation to enter into
consultations on the allocation of a quota is exhausted through the hold ing of such consultations,
for example through the consent of the Member establishing a tariff quota to hold a meeting, or
whether, on the contrary, it implies the obligation to hold a deeper discussion with the Member
claiming to have a substantial intere st regarding the need for an adjustment of the proportion
determined or of the base period selected, or for the reappraisal of the special factors involved in
the allocation of a quota, as provided in Article XIII:4 of the GATT 1994.
China's claims regardi ng the procedures for modification and rectification of schedules
of tariff concessions
25. Argentina considers that the certification provided for in the Procedures for Modification and
Rectification of Schedules of Tariff Concessions is mandatory under p aragraph 8 of the Procedures
for Negotiations under Article XXVIII.

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26. Given the significance of certification, Argentina considers that the Panel should analyse the
legal nature of the normative provisions relating to the procedures for modification and
rectification of tariff schedules, especially if non -compliance by a Member with those rules impairs
the legal validity of the modified or withdrawn concessions.
27. Argentina considers both the Procedures for Negotiations under Article XXVIII and the
Procedures for Modification and Rectification of Schedules of Tariff Concessions to fall under "other
decisions of the CONTRACTING PARTIES to GATT 1947" provided for in Article 1(b)(iv), as well as
under "decisions, procedures [or] customary practices" referre d to in Article XVI:1 of the
WTO Agreement. Argentina, for its part, does not view either set of procedures as "subsequent
agreement[s]" or "subsequent practice[s]" within the meaning of Article 31.3(a) or (b) of the
Vienna Convention on the Law of Treaties.
28. Regarding paragraph 4 of the Procedures for Negotiations under Article XXVIII, Argentina
takes the view that Members cannot dismiss claims of interest simply because they are made
outside the 90 -day time-frame. Paragraph 4 of the Procedures grants a degree of flexibility for
both the modifying Member and the Member claiming an interest.
Request by the European Union for a preliminary Panel ruling
29. First, at various points in the panel request China claimed a violation of the chapeau of
Article XIII:2. Argentina considers that this was sufficient for the European Union to have been
aware that it would be required to prepare its defence on the basis of an alleged violation of
that provision.
30. Similarly, Argentina believes that China's claim that " diminishing for the other
WTO Members the market access commitments that the EU undertook to maintain on a
non-discriminatory basis" may be seen as a claim of violation of the chapeau of Article XIII:2,
as from there stems the claim that it was prevented f rom achieving "… a distribution of trade …
approaching as closely as possible the shares which [China] might be expected to obtain in the
absence of such restrictions ..." in the terms of the chapeau of Article XIII:2.
31. Argentina considers the provision of statistical data to constitute a fundamental element for
the correct allocation of tariff rate quotas, and it should therefore be concluded that China's claim
falls within the Panel's terms of reference. For this reason, in Argentina's view, these clai ms
concerning both the chapeau of Article XIII:2 and Article XIII:4 are included in the request for the
establishment of a panel.

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ANNEX C-2
EXECUTIVE SUMMARY OF THE ARGUMENTS OF BRAZIL
I. INTRODUCTION
1. Brazil has a clear and legitimate interest in the outcome of this dispute: annual poultry
exports of around 1.2 billion USD rely on the Tariff -Rate Quotas (TRQ) presently challenged, and
such sales have a significant impact on Brazil's poultry sector, including investment decisions and
numerous jobs. Brazil would, therefore, like to summarize its views on some key issues before the
Panel, in particular the scope and the dynamics of renegotiations under Article XXVIII of
GATT 1994.
2. Brazil stresses the importance of safeguarding the legitimate rights acq uired through such
renegotiations. The outcome of the present dispute should fully comply with Article 3.5 of the DSU,
pursuant to which decisions within the WTO dispute settlement system "shall not nullify or impair
benefits accruing to any Member under the covered agreements, nor impede the attainment of any
objective of those agreements".
3. Schedules are an integral part to the covered Agreements and, thus, the outcomes of the
renegotiations with the EU under Article XXVIII (including the shared adminis tration of quotas and
its distribution among exporters), are also part of the covered Agreements within the meaning of
the DSU, and should not be invalidated by the present dispute.
4. This dispute raises complex legal issues regarding the interactions of Article XXVIII of
GATT 1994 with Article XIII, and also on the applicable rules and procedures for negotiations
under Article XXVIII. Because a definite interpretation on such interplay has not yet been provided
by the dispute settlement system, it is essential that the Panel bear in mind the potential systemic
repercussions of this case and the need to safeguard the stability of existing commitments and the
legitimate interests of third parties.
II. The scope of negotiations under Article XXVIII of GATT 1994 and the balance
between flexibility and predictability
5. It is not uncommon that negotiations under Article XXVIII result in the establishment of
country-specific quotas. Yet, the establishment of such quotas certainly poses challenges to the
functioning of the multilateral trade system. In essence, they amount to a quantitative restriction
within the meaning of Article XIII of GATT and as such can be trade -distortive. As a matter of fact,
when combined, for instance, with prohibitively high extra -quota tariffs, TRQs may result in a
virtual freeze of trade flows, contrary to WTO's long -standing purpose of progressively improving
market access. In this sense, the consistency of the application of this instrument with the
obligations inscribed in Article XIII is in the interest of the whole WTO Membership.
6. While Article XXVIII allows for significant flexibility to introduce modifications to
commitments, Article XXVIII:2 provides that renegotiations must maintain "a general level of
reciprocal and mutu ally advantageous concessions not less favorable to trade than that provided
for in this Agreement prior to such negotiations".
7. At the same time, Article XXVIII relies on certain objective criteria and procedures
established over time to facilitate nego tiations and minimize uncertainty. These criteria and
procedures are not mandatory, but provide a useful guidance that should help indicate whether a
XXVIII negotiation is consistent with WTO rules. Predictability also being an essential goal of the
proceedings, those criteria and procedures seek to facilitate the process for modification of
concessions with a view to promptly ending the uncertainty created by renegotiations.
8. Criteria and procedures under Article XXVIII, thus, offer Members a significant margin of
discretion in reaching a mutually beneficial agreement, encompassing new rights and obligations
which should be considered legitimate. With regard to the TRQs at issue in the present dispute, it
was only after long exchanges with the EU that it was possible to agree on the TRQs and their

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shared administration (which, in Brazil's view, constitutes an integral part of the renegotiations).
9. A key question under the present dispute is whether the procedures and practices of
Article XXVIII of GATT 1994 related to the renegotiations leading to the 2007 and 2012
modifications of the EU Schedule were consistent with EU's obligations, specifically with regard to
China's claims that its export interests have not been taken into account.
10 Brazil reiterates that it acted in good faith and in full observance of the rules and related
practices of Article XXVIII of GATT 1994 and of the Covered Agreements in the negotiations which
resulted in the TRQs under dispute. Brazil has no reason to believe that the cr iteria for
renegotiations under Article XXVIII were not followed. Regarding specifically the criteria adopted to
establish who were the Members with "substantial interest" at the beginning of each negotiation,
Brazil recalls that, based on the relevant data, even if the SPS measure applied to Chinese exports
at the time were not in place, China would not have met the 10% market -share criterion usually
adopted in Article XXVIII processes to define the Members with a substantial interest.
11. Another important matter before this Panel is whether adjustments in the reference periods
and the definition of negotiating Members, among other criteria, can take place in the course of
negotiations. There is no reason to believe that the procedures of Article XXVIII do not allow for
such adjustments. How these adjustments would apply in practice can, however, only be defined
on a case -by-case basis, provided that the rights of the other parties involved in the negotiation
are not affected.
12. Brazil submits that the findings stemming from this dispute cannot affect the integrity of the
bona fide renegotiations leading to the two packages of reconsolidation (and the resulting shared
administration of quotas and allocation between importers), legally and legitimately obta ined
through Article XXVIII proceedings. In our view, this would reflect the balance sought between
flexibility and predictability under Article XXVIII.
13. In this context, Brazil emphasizes, once again, that EU's argument that "the objections
raised by China as part of its claims under Article XXVIII:2 relate to the country allocation of the
TRQs, rather than the total amount of compensation provided by the European Union in the form
of TRQs" has no legal ground. A similar total TRQ, but with a smaller s hare for Brazil due to a
hypothetical participation of another Member in the process, would not have appropriately
reflected the balance of mutually agreed commitments and the trade to be preserved, pursuant to
Article XXVIII.
III. The relationship between Articles XIII and XXVIII
14. Concerning claims of violation of Article XIII, Brazil understands that there is no definitive
precedent on whether and how Members not holding a substantial interest could be taken into
account in the distribution of a TRQ i n light of Article XIII. Brazil, however, agrees with Canada's
contention in its Third Party Submission that Article XIII contains its own procedures that not
necessarily replicate those under Article XXVIII, and considers that, depending on the specific
circumstances of each situation, initial allocations made under Article XIII:2(d) may evolve due to
relevant factors affecting the trade of the relevant product, as acknowledged in the panel in
EC-Bananas III (Ecuador) 1. Brazil holds that the consistency o f the application of both provisions
and should be assessed on a case-by-case basis.
15. In Brazil's view, Article XIII:2(d) defines a specific methodology to apply import restrictions
to a product among supplying countries. That does not necessarily mean that such methodology
ensures, in every case, full compliance with the obligation set in the caput of Article XIII:2, which
is of a more general nature, encompassing an obligation to achieve an approximate result:
"distribution of trade in such product ap proaching as closely as possible the shares which the
various contracting parties might be expected to obtain in the absence of such restrictions."
16. Brazil insists that, should the Panel understand that, in light of Article XIII, China's interests
must be taken into account in the application of the TRQs under dispute, any modification in the
allocation of these quotas could only come from an increase of the total volume of the current

1 Panel Report, EC – Bananas III (Ecuador), paras. 7.91-7.92.

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quotas, rather than a mere reallocation, which would otherwise disrupt the balance achieved under
both negotiations under Article XXVIII.
17. In light of the above, Brazil believes that the elements underlying the dispute (namely, the
agreements reached in the 2007 and 2012 modification packages and the shared administratio n
system contained therein) are a crucial part of the balance of the general level of reciprocal and
mutually advantageous concessions achieved under WTO -compliant negotiations, and as such,
should not be affected by the present dispute.

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ANNEX C-3
EXECUTIVE SUMMARY OF THE ARGUMENTS OF CANADA
I. INTRODUCTION
1. Canada has intervened in this dispute because of its systemic interest in the interpretation
of the WTO Agreements and in ensuring that the Article XXVIII process remains functional and
practical.
II. AD ARTICLE XXVIII AN D THE MEANING OF "DI SCRIMINATORY QUANTIT ATIVE
RESTRICTIONS"
A. The Article XXVIII Process
2. The Article XXVIII process for the modification or withdrawal of tariff concessions consists of
the following related provisions and procedur es: Article XXVIII, Interpretative Note Ad
Article XXVIII from Annex I, Understanding on the Interpretation of Article XXVIII of GATT 1994,
and Procedures for Negotiations Under Article XXVIII (Procedures)1.
3. The Procedures were adopted by Council on 10 November 1980 on the recommendation of
the Committee on Tariff Concessions but, as they are non-binding in nature2, Canada's view is that
they fall within the meaning of Article XVI:1 of the WTO Agreement under all three elements of
"decisions, procedures and customary practices". As noted by the panel in US – FSC, this means
the Procedures would serve as guidance 3. Canada submits that the Procedures also satisfy the
test set out in US – Clove Cigarettes4 to be considered a subsequent agreement in the con text of
Article 31(3)(a) of the Vienna Convention on the Law of Treaties (Vienna Convention) 5. As
Members have followed the Procedures they have created a significant body of subsequent acts
that Canada submits constitute subsequent practice under Article 31(3)(b) of the
Vienna Convention.
4. An element of the Article XXVIII process has been the use of a ten per cent market share
rule to identify the existence of a Member with a substantial supplying interest. Canada submits
that the use of this rule has been "concordant, common and consistent" 6 and thus qualifies as
"subsequent practice" within the meaning of Article 31(3)(b) of the Vienna Convention. It would
also be logical for the rule to qualify as "customary practice" pursuant to Article XVI:1 of th e
WTO Agreement.
5. The Article XXVIII process has the following attributes:
i) to provide an opportunity for Members potentially most affected by the
modification or withdrawal to protect rights under existing concessions by
engagement with the modifying Member regarding the level of compensation7;
ii) to provide adequate compensation to Members for the modification or withdrawal
of tariff concessions8;
iii) to be capable of timely completion, i.e. not be unduly complex or difficult and not
be vulnerable to delays from claims of interest9; and

1 Procedures for Negotiations Under Article XXVIII, adopted by the Council on 10 November 1980,
C/113 and C/113 Corr. 1, 6 November 1980.
2 Committee on Tariff Concessions, Minutes of the Meeting held in the Centre William Rappard on
4 Appellate Body Report, US – Clove Cigarettes, paras. 262 and 265.
5 The Vienna Convention on the Law of Treaties (Vienna Convention), done at Vienna, 23 May 1969,
1155 U.N.T.S. 331; 8 International Legal Materials 679.
6 Appellate Body Report, Japan – Alcoholic Beverages II, p. 13.
7 Article XXVIII:4 of GATT 1994.
8 Ibid.

- C-10 -

iv) to provide for retaliation in the event that concurrence on compensation is not
attained10.
B. Meaning of "Quantitative Restriction"
6. Whether a particular measure amounts to a "quantitative restriction" in the se nse of
paragraphs 4, 6 and 7 of Article XXVIII must be determined on case -by-case basis, taking into
consideration all relevant factors. In this regard, Article XI (General Elimination of Quantitative
Restrictions) is relevant as interpretative context, b ut the introductory paragraph of Ad Article III
must be taken into account in the interpretation of Article XI:1 and, by extension, the reference to
the term "quantitative restriction" in paragraphs 4, 6 and 7 of Ad Article XXVIII:1. Whether a
measure is a quantitative restriction barred by Article XI:1 or an internal regulation and thus
subject to the requirements of Article III:4 calls for a detailed analysis of the measure in question.
C. Meaning of "Discriminatory"
7. The phrase "discriminatory quantit ative restriction" has not been interpreted in WTO
jurisprudence nor has the word "discriminatory" in the context of the Article XXVIII process been
interpreted in WTO jurisprudence. The Appellate Body has noted that the plain language meaning
of "discrim ination" can encompass both a "neutral meaning of making a distinction" and "a
negative meaning carrying the connotation of a distinction that is unjust or prejudicial" and that a
full and proper interpretation of the provision is necessary to determine wh ich meaning was
intended11.
8. It is Canada's view that the word "discriminatory" in Ad Article XXVIII bears the meaning of
a distinction that is drawn on an improper basis, not a distinction drawn per se. Further, it is
Canada's view that a measure that i s otherwise consistent with WTO obligations would not be a
distinction drawn on an improper basis and thus would not be "discriminatory" within the context
of Ad Article XXVIII.
9. Canada's views in this regard are supported by the following:
i) it realizes the object and purpose of the Article XXVIII process to afford Members
with a principal or substantial supplying interest with an opportunity to protect the
contractual rights they enjoy under the Agreement while balancing the interest of
Members utilizi ng Article XXVIII to achieve modifications or withdrawals of
concessions within a reasonable period of time and thereby minimize uncertainty
or disruption to trade;
ii) it maintains a functional and practical Article XXVIII process, which has been a
preoccupation of Members since GATT 194712; and
iii) it is consistent with the overall aims of the WTO Agreement to achieve the
"substantial reduction of tariffs and other barriers to trade and [...] the elimination
of discriminatory treatment in international trade relations"13 while recognizing that
Members have the right to take measures to protect a variety of interests, for
example under Articles XX and XXI.
10. Were the word "discriminatory" to be interpreted as meaning a distinction regardless of
reason, it becomes difficult to maintain the attributes of the Article XXVIII process. For example, a
Member modifying or withdrawing its concessions cannot be expected, as a matter of course, to
speculate on the market share of any number of possible suppliers that might exist in a world that
is devoid of distinctions, essentially the absence of its laws, regulations and other measures,
including those that are consis tent with its WTO obligations. Doing so would render the

9 Ad Article XXVIII:4 of GATT 1994 and timeframes expressed throughout Article XXVIII, Ad Article
XXVIII of GATT 1994 and the Procedures.
10 Article XXVIII:4(d) of GATT 1994.
11 Appellate Body Report, Canada – Wheat Exports and Grain Imports, para. 87.
12 See, for example, Verbatim Report, Fourteenth Meeting of the Tariff Agreement Committee Held on
Tuesday, 9 September 1947 at 2:30 PM in the Palais Des Nations, EP/CT/T/TAC/PV/14, pp. 14-15.
13 Marrakesh Agreement Establishing the World Trade Organization, preamble.

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Article XXVIII process unduly complicated a nd raise issues of procedural fairness vis-à-vis
Members able to demonstrate an interest through a record of past imports. Such a process would
likely result in a tariff rate quota (TRQ) not fit for its purpose as it would not be representative of
genuine interests capable of supplying the market of the modifying Member. This would lead to
further difficulties at the allocation stage under Article XIII and the administration and utilization of
the TRQ. It is also neither logical nor just to require a modi fying Member to provide compensation
for the effect of measures that respect the overall requirements of the WTO agreements, especially
when the Article has the limited purpose of providing compensation for lost access due to the
withdrawal or modification of tariff concessions pursuant to Article XXVIII.
D. Flexibility in the Article XXVIII Process
11. It should be remembered that the Article XXVIII process provides for its own remedies and
that the process also has some flexibility: it is a floor, not a c eiling in terms of the interests of
suppliers to be protected and the compensation (e.g. size of TRQ) to be determined. By providing
for negotiations and consultations, the Article inherently contains a degree of flexibility to permit
arrival at a mutuall y agreed result. This includes flexibility to adjust a reference period to ensure
that it is representative. However, balancing this with need to preserve the workability of the
process, adjusting a reference period to something other than the usual thre e years immediately
prior to notification would normally involve looking back further in time than three years, not
employing hypothetical considerations. There is a systemic interest in quickly and clearly
identifying Members holding a principal or subst antial supplying interest so that negotiations can
begin and the TRQ can be set. If a Member could insist that the reference period be continually
adjusted forward in time to a period that it considers to be more "representative", it would impede
the identification of those Members holding principal or supplying interests and the conclusion of
negotiations with those Members.
12. Timely expressions of interest from Members believing they have a principal or substantial
supplying interest are essential for the workability of the process. However, there may be
instances (to be determined on a case -by-case basis) where it would be appropriate for a Member
to accept an untimely claim of interest so long as issues of procedural fairness towards Members
who have provided a timely claim of interest are taken into account.
III. THE OPERATION OF ARTICLE XIII
A. Interaction of Article XIII and Article XXVIII
13. Article XXVIII provides for the establishment of the level of compensation (e.g. a TRQ);
Article XIII relat es to the administration and allocation of a TRQ and may occur at times when
Article XXVIII is not being used. However, if Article XXVIII is being used, it is very likely that
allocation under Article XXIII will occur coincident with the establishment of a TRQ under
Article XXVIII. In this instance, it is virtually certain that the Members determined to have initial
negotiating rights, a principal supplying interest or a substantial interest will be the main recipients
of the allocations. As the compensation (TRQ) determined under Article XXVIII might not be large
enough to accommodate the introduction of another Member with a substantial interest in
supplying the product into the allocation process at this stage using a different set of criteria, this
could raise issues of procedural fairness vis-à-vis the Members involved in the determination of
compensation under Article XXVIII. However, the plain language of Article XIII:2(d) would not
preclude the allocating party from doing so, so long as the rights of the Members whose initial
negotiating rights, or principal or substantial supplying interests were protected through
negotiations or consultation (as applicable) under Article XXVIII continue to be protected at this
point in time.
14. Article XIII contains its own procedures; those related to Article XXVIII are not imported into
Article XIII. There are attractions of methodological ease and consistency in using a ten per cent
share of imports as the means of determining "substantial interest" in Article XIII as is the practice
for Article XXVIII. However, the ten per cent threshold is not a bright line and some flexibility may
be desirable given the range of market situations to which Article XIII can apply 14 and that

14 Panel Report, EC – Bananas III (Ecuador), paras. 7.83-7.84. The panel did not take issue with the ten
per cent threshold applied by the European Community in the context of Article XIII:2(d) but did not find it
necessary to set a precise import share to determine the existence of a substantial interest in supplying a

- C-12 -

supplying interests can evolve with time15. The determination of "s ubstantial interest" in
Article XIII:2(d) could vary with time or round of allocation so long as, in a particular round, the
same parameters for determining substantial interest in a particular product are used vis-à-vis
each potential supplier and allocation does not discriminate between similar situations. Consistent
with the explanation of the Appellate Body 16, Canada's view is that following either method of
allocation in Article XIII:2(d) satisfies the aim expressed in the chapeau of that paragraph.
B. Meaning of "Special Factors"
15. Further acknowledgement that supplying interests can evolve with time is found in the
possibility of taking into account, when using the second method of allocation under
Article XIII:2(d) ( unilateral imposition), "special factors which may have affected or may be
affecting the trade in the product". Ad Article XIII suggests that "special factors" is broader in
scope than the term "discriminatory quantitative restrictions". However, Ad Artic le XIII also
suggests that there is a desire to keep the determination of a substantial interest grounded in
genuine and demonstrated market access and to ensure that the process of allocation remains
practicable.
C. Establishment of an Allocation for "Others"
16. The text of Article XIII does not require a Member to establish an allocation for others:
whether this is done will depend on the interests to supply a product that exist and the outcome of
the process in Article XIII:2(d). In this respect, an al locating Member must have regard to the
admonition in EC – Bananas III that it cannot discriminate by providing country specific allocations
to some with a non -substantial interest in supplying the product but not to others with a
non-substantial interest17. Should an allocation for others be established, there is also no general
obligation in the text of Article XIII to set it at a particular size. This will also be an outcome of a
particular fact situation and the application of Article XIII:2 taken as a whole and read in
conjunction with Article XIII:4.

product, noting: "A determination of substantial interest might well vary somewhat based on the structure of
the market."
15 Panel Report, EC – Bananas III (Ecuador), paras. 7.91-7.92.
16 Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 –
US), para. 338.
17 Appellate Body Report, EC – Bananas III, para. 161.

- C-13 -

ANNEX C-4
EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE RUSSIAN FEDERATION
1. The Russian Federation would like to present, as a third party in this dispute, the summary
of its arguments that mostly relate to the issues concerning Article II of the General Agreement on
Tariffs and Trade (GATT) and the Procedures for Modification and Rectification of Schedules of
Tariff Concessions adopted by the Council on 26 March 1980.
2. In its First Written Submission China claims that without certification the first and the second
modifications have no legal effect and, therefore, the European Union 's implementation of these
modifications violate Article II of the GATT 1994.1
3. Article II of the GATT 1994 imposes an obligation on an importing Member to accord to the
commerce of other Members treatment no less favorable than that provided for in the relevant part
of its Schedule.
4. In the view of the Russian Federation all modifications of tariff concessions should be
certified under the Procedures for Modification and Rectification of Schedules of Tariff Concessions
adopted by the Council on 26 March 1980.
5. According to the Panel in US – FSC for a decision to be classified as "other decisions of the
CONTRACTING PARTIES to the GATT 194 7" within the meaning of paragraph 1(b)(iv) of the
GATT 1994 "it must be a legal instrument within the meaning of the chapeau to paragraph 1, i.e.,
it must be a formal legal text which represented a legally binding determination in respect of the
rights and/or obligations generally applicable to all contracting parties to GATT 1947"2.

6. Modifications of Member's tariff commitments could be the outcome of action under various
provisions of the WTO Agreement, including Articles II, XVIII, XXI V, XXVII and XXVII I of the
GATT 1994, and, as the results, will probably affect the existing rights and obligations of WTO
Members. Thereby, the Procedures for Modification and Rectification of Schedules of Tariff
Concessions may constitute "other decisions of the CONTRACTI NG PARTIES to the GATT 1947 "
within the meaning of paragraph 1(b)(iv) of the GATT 1994. Thus, all WTO Members should follow
these Procedures as they contain a legally binding determination in respect of the rights and/or
obligations generally applicable to all contracting parties to GATT 1947.
7. The Russian Federation disagrees with the EU 's arguments that "[t]he certification of the
changes to the schedule has the sole purpose of formally incorporating into a Member 's schedule
the modifications made in accor dance with Article XXVIII or other relevant provisions, but it is not
a prerequisite for implementing such changes "3 and that "the certifications do not have any effect
on the entry into force of the proposed modification or rectification. The idea is to f ormally
incorporate in the schedules of members modifications and rectifications which, in most cases,
have already entered into force".4
8. The Appellate Body in EC – Computer Equipment noted: "[a] Schedule is made an integral
part of the GATT 1994 by Articl e II:7 of the GATT 1994. Therefore, the concessions provided for in
that Schedule are part of the terms of the treaty. As such, the only rules which may be applied in
interpreting the meaning of a concession are general rules of treaty interpretation set o ut in the
Vienna Convention".5
9. Article 26 of the Vienna Convention requires that "[e]very treaty in force is binding upon the
parties to it and must be performed by them in good faith ". The chapeau of the Procedures for
Modification and Rectification of Sc hedule of Tariff Concessions requires that "[…] changes in the
authentic texts of Schedules which record […] modifications resulting from action taken under
Article II, Article XVIII, Article XXIV, Article XXVII and Article XXVIII shall be certified withou t
delay". Furthermore, paragraph 4 of the same Procedures provides that "[w]henever practicable

1 The China's First Written Submission, para. 270.
3 The European Union's First Written Submission, para.300. (emphasis added)
4 Ibid., para. 301. (emphasis added)
5 Appellate Body Report, EC – Computer Equipment, para. 84. (emphasis added)

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Certifications shall record the date of entry into force of each modification ". Taking into account
that the European Union failed to obtain certification from the WTO Members, the EU's Modification
Packages have no legal effect. Thus, it would appear that the European Union is obliged to comply
with its current Schedule, including for the purposes of Articles II:1(a) and II:1(b) of the
GATT 1994.
10. The significanc e of following procedural rules was noted by the Рanel in
EC – Bananas III (Article 21.5-Ecuador II):
There is no provision in the WTO Agreement that would allow a Member to unilaterally
modify the concessions contained its Schedule, unless procedures for renegotiation of
such Schedule are formally concluded.6
Accordingly, the appropriate procedures must be finalized, before the concession can
be legitimately modified or withdrawn and replaced with a new one.7
11. The European Union also states that the certification process of changes to the Schedule is
going to start only after the conclusion of certification process started in March 2014 for changes
made pursuant to Article XXIV:6 (2004 Enlargement).8 According to the Procedures for Modification
and Rectification of Schedules of Tariff Concessions, a Memb er should communicate a draft within
three months after the negotiation has been completed. There is nothing in the Procedures that
can be interpreted to suggest that certification process for modific ations made pursuant to
Article XXVIII should be initiated only after certification process for modifications made pursuant to
Article XXIV has been completed. On the contrary, the word "or" in paragraph 1 of the Procedures
for Modification and Rectification of Schedule of Tariff Concessions means that A rticles XXIV
and XXVIII should be considered separately and should not follow one after a nother in any
particular order.

6 Panel Report, EC – Bananas III (Article 21.5-Ecuador II), para. 7.447.
7 Ibid., para.7.451.
8 The European Union's First Written Submission, para. 299.

- C-15 -

ANNEX C-5
EXECUTIVE SUMMARY OF THE ARGUMENTS OF THAILAND
I INTRODUCTION
1.1. This case raises issues of fundamental importance regarding the manner in which World
Trade Organization ("WTO") Members modify their tariff concessions and provide compensation in
the form of tariff rate quotas ("TRQs") to WTO Members affected by the modification.
1.2. China's argument, in essence, is that the E uropean Union ( "EU") should have identified
China as a Member that had a principal supplying interest ( "PSI") or substantial supplying interest
("SSI") in the products at issue in the EU 's tariff modifications. In China's view, the EU did not do
so because China's poultry imports were subject to an import ban for SPS reasons during the
relevant reference period used by the EU to determine the Members that had a PSI or SSI, with
which it had to negotiate appropriate compensation. China further argues that i t should have
received a share of the TRQs because it is the world's largest producer of poultry and it had growth
potential in the affected products.
1.3. Thailand considers China's arguments to be unfounded. It fully supports the EU's request that
the Panel reject all claims made by China. The EU complied fully with its obligations under the
relevant provisions of the GATT 1994 and related instruments in modifying its tariff concessions
and in allocating compensation to Thailand and Brazil following th e tariff modifications. Thailand
endorses the legal arguments set out in the EU's first written submission.
A. Article XXVIII and Article XIII contain related, but separate, obligations
1.4. In this case, the EU modified its tariff schedule pursuant t o Article XXVIII of the GATT 1994
and allocated compensation in TRQs to Thailand and Brazil pursuant to Article XIII:2 of the
GATT 1994. Article XXVIII:1 (and related instruments) address with which countries the EU had to
negotiate or consult when it deci ded to modify its tariff concessions. Article XIII (and related
instruments) refer to how the EU has to determine the allocation of compensation in the TRQs. In
other words, Article XXVIII:1 deals with "with whom to negotiate/consult when modifying a tarif f
concession" and Article XIII:2 deals with "how to allocate compensation after modifying a tariff
concession."
1.5. Article XXVIII of the GATT 1994 sets out the conditions that apply when a WTO Member
seeks to modify its tariff schedule. The applica nt Member, Members with initial negotiating rights,
and Members with a principal supplying interest are referred to as the "contracting parties
primarily concerned" and the fourth is a Member with a substantial interest. Article XXVIII:1 treats
these categories of Members differently.
1.6. Paragraph 7 of Note Ad Article XXVIII1 states that "the expression 'substantial interest' is not
capable of precise definition and accordingly may present difficulties for [WTO Members]. It is,
however, intended to be c onstrued to cover only those [Members] which have, or in the absence
of discriminatory quantitative restrictions affecting their exports could reasonably be expected to
have, a significant share in the market of the contracting party seeking to modify or w ithdraw the
concession."
1.7. Paragraph 4 of the 1980 Procedures for the Negotiations under Article XXVII of the
GATT 1994 ("1980 Procedures") provides that claims of interest by a PSI or SSI holder should be
made within ninety days following the circ ulation of the import statistics by the applicant country,
in this case, the EU. Paragraph 5 of the Understanding on the Interpretation of Article XXVIII of
the GATT 1994 ("Understanding on Article XXVIII") provides that where a Member considers that it
has a PSI or SSI, it shall communicate its claim in writing to the [applicant Member and the
Secretariat]. It further provides that paragraph 4 of the 1980 Procedures "shall apply in these

1 This Note applies to Article XXVIII and not Article XIII. However, as the provisions contain identical
terms, Thailand considers that the clarification provided for Article XXVIII could be used to interpret the term in
Article XIII.

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cases". The Understanding on Article XXVIII is part of the GATT 1994 and is, therefore, legally
binding.
1.8. Article XXVIII:2 provides that the compensatory adjustment provided by the applicant
Member "shall endeavour " to maintain a general level of reciprocal and mutually advantageous
concessions. The obligation in Article XXVIII:2 is thus not to "maintain a general level of reciprocal
and mutually advantageous concessions not less favourable to trade than that provided for in this
agreement prior to such negotiations " but rather to "endeavour to maintain" such a level.
Paragraph 6 of the Understanding on Article XXVIII may be used to determine the compensation
for WTO Members that have an SSI when a tariff concession is replaced by a TRQ.
1.9. Article XIII of the GATT 1994 is entitled "Non-discriminatory Administration of Quantitative
Restrictions." Article XIII:1 provides that no import or export restriction may be applied to a single
Member, unless imports or exports from all other countries are similarly restricted. The remaining
provisions of Article XIII provid e guidance as to how this non -discriminatory obligation is to be
applied. The chapeau to Article XIII:2 provides that in "applying import restrictions to any
product, [Members] shall aim at a distribution of trade in such product approaching as closely a s
possible the shares which the various [Members] might be expected to obtain in the absence of
such restrictions and to this end shall observe the following conditions....". This provision therefore
requires the EU, in this case, to provide different allo cations in the TRQs based on historical trade
patterns from countries with supplying interests.
1.10. Article XIII:2(d) provides for two different processes for determining the allocation of quotas
among supplying countries. First, the applicant Member ca n seek agreement on the allocation of
shares with those Members that had a SSI. Second, if there is no agreement on the allocation, the
applicant Member can allot shares in the quota to Members that have a substantial interest on the
basis of the criteria specified in Article XIII:2(d) , second sentence, including taking account of
special factors that may have affected the trade in the product. 2 Thus, the consideration of special
factors is relevant only when there is no agreement on the allocation of the shares within a TRQ
between the applicant Member and the Members that had an SSI.
1.11. China incorrectly suggests that the principles outlined in paragraph 4 of the Understanding
on Article XXVIII to determine Members that had a PSI or SSI on new products (for which three
years' trade statistics are not available) may also be used to determine such interests when an
import ban has been applied. However, paragraph 4 addresses a completely different situation.
When a tariff on a new product is being modified, it may be necessary to take into account
"production capacity and investment in the affected product in the exporting Member and
estimates of export growth, as well as forecasts of demand in the importing Member " because
three years' statistics are not available. Where three years ' statistics are in fact readily available
(even if a legitimate SPS measure was in place) there is no basis to exa mine production capacity
and other criteria to determine whether a Member "could have had" a PSI or SSI.
1.12. In Thailand 's view, China 's attempt to mix up the applicable concepts is incorrect. The
factors that are used to determine the amount of compens ation to be provided should not be used
to identify a Member with a PSI or SSI, and vice versa.
B. China's argument that the EU should have identified that China had a PSI or SSI
based on a counterfactual reference period is incorrect
1.13. China argues that the reference periods used by the EU to identify that Thailand and Brazil
had a PSI or SSI were "tainted" by the application of an import ban to China 's imports during the
reference periods used by the EU, namely 2003 –2005 for the Firs t Modification P ackage
and 2006-2008 for the Second Modification Package. China further argues that the EU should have
examined the share China "would have had in the absence of the import ban and whether such
share constitutes a PSI or SSI ". Lastly, China argues that, du e to the extended nature of the
negotiations for the Second Modification Package, the EU should have used a more recent
reference period to correctly identify the WTO Members that had a PSI or SSI.

2 Panel Report, EC — Bananas III (Ecuador), paras. 7.71–7.72.

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1.14. In order for an applicant Member to determine w hich Members have a PSI or SSI and
therefore, with which Members it must negotiate or consult prior to modifying its tariff
concessions, the applicant Member must analyse import data in an appropriate reference period.
1.15. Article XXVIII does not sp ecify the appropriate time period for this reference period.
However, paragraph 4 of Note Ad Article XXVIII provides that the determination of a Member that
had a PSI should be made if the Member had "over a reasonable period of time prior to the
negotiations, a larger share in the market [than a Member with INRs] ". Logically, this temporal
requirement should apply equally to the determination of a Member that had a SSI. Thus, the
reference period must be "prior to the negotiations ". The practice in the GAT T and the WTO has
been to rely upon the three -year period prior to the notification of the intention to modify the
concession.
1.16. China incorrectly suggests that the principles outlined in paragraph 4 of the Understanding
on Article XXVIII to determin e Members that had a PSI or SSI on new products (for which three
years' trade statistics are not available) may also be used to determine such interests when an
import ban has been applied. However, paragraph 4 addresses a completely different situation.
When a tariff on a new product is being modified, it may be necessary to take into account
"production capacity and investment in the affected product in the exporting Member and
estimates of export growth, as well as forecasts of demand in the importing Me mber" because
three years' statistics are not available. Where three years ' statistics are in fact readily available
(even if a legitimate SPS measure was in place), there is no basis to examine production capacity
and other criteria to determine whether a Member "could have had" a PSI or SSI.
1.17. China also incorrectly argues that due to the extended nature of the negotiations for the
Second Modification Package and the application of the import ban, the EU should have used a
more recent reference period, such as from 2009-2011, to correctly identify the Members that had
a PSI or SSI. There is no legal basis for this argument. As the EU explains, this argument has no
basis in "any provision of Article XXVIII or the 1980 Procedures or on past practice, and would
undermine the objective pursued by Article XXVIII:1. This was also acknowledged by the Arbitrator
in EC – The ACP-EC Partnership Agreement. The Arbitrator further stated that "[t]he use of the
most recent representative reference period minimizes the need for ad hoc adjustments to be
made to the data and corresponds as closely as possible to the trade regime as applied ".3 Thus, it
is important to use trade statistics for a period as close as possible to the trade regime in place
prior to the notification of the modification.
1.18. The practice of using three years ' trade statistics prior to the negotiations allows for
predictability and certainty. It is not clear how the proper reference period could be chosen in the
circumstances described by Ch ina. China does not propose any guidelines to determine which
period should be used other than, apparently, to suggest a period that would "reflect the more
natural export strength of the WTO Member(s) affected by the discriminatory quantitative
restrictions" in casu, China. This is not a guideline that could be applied in a manner that promotes
predictability and certainty in the multilateral trading system.
1.19. China also incorrectly argues that the "requirement in paragraph 6 of the Understanding o n
Article XXVIII that the three -year reference period for determining compensation must be
representative or that trade in the most recent year be taken into account should equally apply for
the determination of the supplying interests. " It suggests that t he determination of the existence
of a PSI or SSI based on one period and the calculation of compensation based on a different
period would seem illogical. In Thailand 's view, China fundamentally misunderstands the different
purpose of each of these provis ions. The determination of which Members have a PSI or SSI must
necessarily be based on import data from the past. The review of the import data in the trade
actually affected over the relevant three -year reference period shows which Members have a
special interest in the concessions to be modified, and therefore, with which Members the applicant
Member must negotiate or consult. This backward -looking exercise must be conducted before the
applicant Member can modify its tariff concessions. As the EU explain s, as "those Members stand
to lose the most from the intended modification, they can be trusted to negotiate compensation
which is adequate for all Members ". Paragraph 6 of the Understanding on Article XXVIII addresses
a very specific situation, namely the compensation that should be provided when a Member
replaces an unlimited tariff concession with a TRQ. As the EU notes, paragraph 6 is expressed in

3 Award of the Arbitrator, EC – The ACP-EC Partnership Agreement, para. 83.

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"hortatory terms". As is clear from the terms of paragraph 6, "the amount of the compensation
should exceed the amount of trade actually affected by the modification of the concession ". The
compensation must be calculated on "future trade prospects ", which should be based on the
greater of the average annual trade in the more recent three -year period or trade i n the most
recent year increased by 10 percent. This must be a forward -looking exercise as it seeks to
compensate the affected Members for the changes brought about by the tariff modification.
Therefore, contrary to China 's assertions, it is not at all il logical that the determination of the
existence of a PSI or SSI would be made based on a different period from that used to determine
compensation.
1.20. China submits that the EU should have made allowances for the import ban imposed for SPS
reasons and used a different reference period to determine the Members that had a PSI or SSI. To
this end, China submits that its exports to the EU of products classified under CN 1602 32 19 in
particular were "growing". The EU has explained that even if it had taken into account import data
before the SPS measures were introduced in 2002, China did not have sufficient imports to qualify
as a Member that had a SSI as its imports were well below the 10 per cent benchmark for a SSI
Member. China has also submitted that where "significant time" has lapsed since the notification of
the intention to modify a concession, the three-year reference period must be re-assessed and the
latest available data must be used. To this end, China submits import data for 2009–2011. The EU
has explained that there is no legal basis to require such a re -determination. Moreover, such a
re-determination would adversely affect the due process rights of Thailand (and Brazil), which
entered into good faith discussions with the EU on the bas is of Article XXVIII and the
1980 Procedures.
1.21. China also submits detailed trade statistics to demonstrate its production capacity and
export growth potential. It refers to its share of world imports for products classified under
CN 1602 32 and C N 1602 39 in Japan, Singapore, Korea, Hong Kong, China, Mauritius and South
Africa. As explained by the EU, the "data on China 's share of imports in a handful of selected
import country markets where China holds a 'major share ' is manifestly unreliable and
unrepresentative." There is no legal basis to look at import shares in other (selected) markets to
determine whether Members have a PSI or SSI in the tariff lines being modified in the market of
the applicant Member, in this case, the EU.
1.22. In any event, it is too late for China to now claim a PSI or SSI status for the First and
Second Modification Packages. At the time of the First Modification Package, China did not claim a
PSI. It made a claim of SSI only on 6 September 2006, without providing an y evidence of its
alleged substantial interest in the tariff lines at issue. At the time of the Second Modification
Package, China did not make a timely claim of interest, but waited three years before submitting
its claim of a PSI on 9 May 2012.
1.23. Thailand recalls that paragraph 4 of the 1980 Procedures provides that claims of interest of
a PSI or SSI should be made within ninety days following the circulation of the import statistics by
the applicant Member, in this case, the EU. Paragraph 5 of the Understanding on Article XXVIII
provides that where a Member considers that it has a PSI or SSI, it shall communicate its claim in
writing to the [applicant Member and the Secretariat]. It further p rovides that paragraph 4 of
the 1980 Procedures "shall apply in these cases ". The Understanding on Article XXVIII is part of
the GATT 1994,4 and is therefore legally binding.
C. China's argument that the EU 's SPS measure "tainted" the identification of
Members that had a PSI or SSI within the meanin g of Ar ticle XXVIII of the
GATT 1994 is incorrect
1.24. China claims that the three -year period preceding the EU 's notification of its intention to
modify its tariff concessions is "tainted" by the EU's import ban on poultry products. China argues
that the reference period did not take into account the import ban that adversely affected its share
of imports in the EU.
1.25. In particular, China contends that the import ban was a "discriminatory quantitative
restriction" within the meaning of paragraph 7 of the Note Ad Article XXVIII that affected the
exports that China could reasonably be expected to have made to the EU. In China 's view, as the

4 See paragraph 1(c) (vi) of the General Agreement on Tariffs and Trade 1994.

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reference period was not representative, it could not have resulted in an accurate determination of
the Members that had a SSI or PSI. China argues that the import ban, which had a limiting effect
on importation by prohibiting imports of poultry products, was a "quantitative restriction" within
the meaning of Article XI:1 of the GATT 1994. It further argues that the import ban was a
"discriminatory" quantitative restriction within the meaning of paragraphs 4 and 7 of Note Ad
Article XXVIII because it treated imports from one WTO Member differently than it treated imports
from other WTO Members, "irrespective of the ground f or such disparate treatment, and, in
particular, whether such difference in treatment was justified or not".
1.26. Paragraphs 4 and 7 of Ad Note to Article XXVIII provide that the determination of whether a
Member has a PSI or SSI, respectively, s hould take into account whether "discriminatory
quantitative restrictions" affected the share of imports a Member would have had in the absence of
those discriminatory restrictions.
1.27. First, Thailand notes that the EU rebutted China 's claim that the import ban should be
characterised as a "quantitative restriction" on "importation" by explaining that Article XI should be
interpreted in the light of the Ad Note to Article III. Accordingly, a measure that prohibits the sale
of like domestic and foreign products should be considered as an internal law or regulation
regardless of whether enforcement of the measure takes place at the border.5
1.28. Second, Thailand agrees with the EU that the SPS measure is not a "discriminatory"
measure. Measures that apply different treatment to Members that are in different situations may
be seen as non -discriminatory. In the case at hand, the EU 's regime applied the same or
equivalent requirements to imported products as it did to domestic products. The only difference in
treatment was to prohibit products that did not comply with the sanitary requirements and allow
those that did comply. This difference in treatment is based on legitimate regulatory requirements
and, therefore, does not constitute a "discriminatory" measure.
D. China's arguments that the allocation of most of the TRQs to Thailand and Brazil is
inconsistent with Article XIII:1 and Article XIII:2 are incorrect
1.29. China argues that Article XIII:1 requires that exportation or importation of like pr oducts to
or from all third countries must be "similarly prohibited or restricted ". It therefore argues that
there can be no discrimination in the level of access to the TRQs. China also argues that the EU 's
allocation of the TRQs is inconsistent with the chapeau of Art icle XIII:2, which requires
WTO Members to "aim at a distribution of trade [...] approaching as closely as possible the shares
which the various Members might be expected to obtain in the absence of such restrictions. " It
argues that Members that do not have a SSI "must still be afforded access to the TRQs (through
the TRQs for all other countries) such that they obtain the share they might expect to have in the
absence of the TRQs ". To this end, the allocation of the TRQs must take into acc ount the
comparative advantages of the WTO Members participating in the TRQ and the import ban in the
representative period. Lastly, China argues that the EU acted inconsistently with
Article XIII:2(d), second sentence, which requires that the shares of T RQs must be based "upon
the proportions, supplied by such [Members], during a previous representative period, of the total
quantity or value of imports of the product, due account being taken of any special factors which
may have affected or may be affecting the trade in the product."
1.30. As the Appellate Body has explained, the principle of non -discriminatory application
governed by Article XIII:1, as applied to tariff quotas, means that "if a tariff quota is applied to
one Member, it must be applied to all...".6 China argues that the allocation of the majority of the
TRQs to Thailand and Brazil is inconsistent with Article XIII:1. As the EU explains, however, this
provision governs access to the TRQ, not the allocation of shares in the TRQ to differ ent suppliers.
Therefore, Article XIII:1 cannot be used as a basis to claim that the allocation of shares in the TRQ
was inconsistent with this provision. As the EU also explains, Article XIII:1 requires that a TRQ be
applied by a Member on a product -wide basis without discrimination as to the origin of the
product. The TRQs established by the EU following the First and Second Modification packages do
not discriminate on the basis of the origin of the products.

5 Panel Report, EC – Asbestos, paras. 8.88-8.93.
6 Appellate Body Reports, EC – Bananas III (Article 21.5 - Ecuador II); EC – Bananas III (Article 21.5 -
US), para. 337.

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1.31. The Appellate Body has explained in EC – Bananas III (Article 21.5 - Ecuador: II); EC -
Bananas III (Article 21.5 - US)7 that:
... while Article XIII:1 establishes a principle of non -discriminatory access to and
participation in the overall tariff quota, the chapeau of Article XIII:2 stipulate s a
principle regarding the distribution of the tariff quota in the least trade -distorting
manner. The provisions of Article XIII:2(a) -(d) are specific instances of authorized
forms of allocation when a Member chooses to allocate shares of the tariff quota .
Article XIII:2(d) allows for the case where a quota is allocated among supplying
countries, either by way of agreement or, where this is not reasonably practicable, by
allotment to Members having a substantial interest in supplying the product
concerned, and in accordance with the proportions supplied by those Members during
a previous representative period, taking due account of "special factors ". In other
words, Article XIII:2(d) is a permissive "safe harbour "; compliance with the
requirements of Arti cle XIII:2(d) is presumed to lead to a distribution of trade as
foreseen in the chapeau of Article XIII:2, as far as substantial suppliers are
concerned.408 (emphasis added).
Footnote 408: If a Member allocates quota shares to Members with a substantial in terest in
supplying the product, in accordance with Article XIII:2(d), it must also respect the requirement
in the chapeau of Article XIII:2 —that distribution of trade approach as closely as possible the
shares that Members may be expected to obtain in the absence of the restriction. This is usually
done by allocating a share to a general "others" category for all suppliers other than Members
with a substantial interest in supplying the product.
1.32. In this case, the EU allocated specific TRQs as a me ans of compensation to two substantial
suppliers (Thailand and Brazil) by agreement under Article XIII:2(d), first sentence, and in
accordance with paragraph 6 of the Understanding on Article XXVIII. The EU did so based on the
shares held by each of the Me mbers that had a SSI in each relevant tariff line during the same
reference period that was used to determine the "all others" share in the TRQs. Thus, the share in
each TRQ for "all others" was determined as a reflection of the shares allocated to Members that
had a SSI. The EU complied with Article XIII:2(d), first sentence, in allocating shares in the TRQ to
the Members that had a SSI as well as to Members in the "all others" category. It follows that the
EU respected the chapeau of Article XIII:2 both i n terms of the Members that had a SSI and of
Members in the "all others" category.
1.33. Thailand notes that there is a TRQ in CN 1602 39 21 (processed duck, geese, guinea fowl
meat, uncooked containing 57% or more of weight of poultry meat or offal) was accorded 100% to
Thailand. This allocation reflects the fact that during the relevant representative period, 100% of
imports of these products in the EU came from Thailand. No other WTO Member had any share of
the trade in these products even though there were no restrictions in place at the time. In this
situation, even a 100% TRQ can be consistent with the chapeau of Article XIII:2. The Appellate
Body itself recognised this possibility when it stated in footnote 408: [The distribution of trade
approaching as closely as possible the trade that that Members may be expected to obtain in the
absence of the restriction] ... is usually done by allocating a share to a general "others" category
for all suppliers other than Members with a substantial interest in s upplying the product. In
situations where other Members are not expected to obtain a share of the trade, the importing
Member, in casu, the EU is not required to allocate an "all others" category.
1.34. "Special factors" that may have affected trade in the product are only required to be taken
into account in Article XIII:2(d), second sentence, which does not apply in this case . The term
"special factors " does not appear in Article XIII:2(d), first sentence. It appears only i n
Article XIII:2(d), second s entence, to address situations where it is not possible to arrive at an
agreement on the allocation of shares in a TRQ with Members that had a SSI. It is not necessary
to conduct an analysis of what does (or does not) constitute a special factor as the con ditions in
Article XIII:2, second sentence, do not apply in this case.

7 Appellate Body Reports, EC – Bananas III (Article 21.5 - Ecuador II); EC – Bananas III (Article 21.5 -
US), para. 338 and footnote 408.

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E. China's claims under Article II:1 and Article I:1 of the GATT 1994 should be
consequentially dismissed
1.35. China's claim that the EU acted inconsistently with its obligations under Article II:1 of the
GATT 1994 because it implemented changes in its Schedule even though those changes had not
been certified by the Director-General is without merit. Certification is an administrative procedure
that allows for the incorporation of modifications in the applicant Member 's Schedule. It is not a
substantive requirement that must be completed before the modifications may enter into force.8
1.36. China's claim that the EU acted inconsistently with its obligations under Article I:1 of the
GATT 1994 because the EU granted market access to Thailand and Brazil in the TRQs and not to
other Members, including China, is also without merit. The EU 's actions are consistent with its
obligations to provide non -discriminatory treatment under Article XIII:1. Therefore, a harmonious
interpretation of both non-discriminatory provisions requires that its actions also be considered as
consistent with its obligations under Article I:1 of the GATT 1994.

8 See EU's first written submission citing Anwarul Hoda, Tariff negotiations and renegotiations under the
GATT and the WTO, Cambridge University Press; 2001, p.115.

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ANNEX C-6
EXECUTIVE SUMMARY THE ARGUMENTS OF THE UNITED STATES
EXECUTIVE SUMMARY OF THE U.S. THIRD PARTY ORAL STATEMENT
I. Introduction
1. At the outset, we wish to note that certain of the claims and arguments in this dispute
involve the procedures for modification or withdrawal of concessions and for cer tification of those
changes that have long been applied by WTO Members, and before them, the Contracting Parties.
Historically, there have been numerous discussions by Members to amend those procedures or
introduce further refinements.
2 .In 1980, the C ONTRACTING PARTIES approved the procedures for modification and the
procedures for rectification. In 1995, WTO Members brought into effect the Understanding on the
Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994 . Despite the
limited agreement on refinement to these procedures achieved by Members over time, they
nonetheless have served Members well.
3. In the view of the United States, further elaboration of those procedures, therefore, should
be undertaken by Members through negotiation, to the extent they find areas in which
improvements are desirable. We would invite the Panel to consider carefully in its report whether
findings are necessary on all of the issues raised by the parties to the dispute and to tailor it s
findings to those issues that will assist the parties in securing a positive solution to the dispute.
II. The Panel May Dispose of China's Claim under GATT 1994 Article XXVIII:1 Relating
to a "Substantial Interest" Without Reaching the Legal Issue
4. China claims that the EU acted inconsistently with Article XXVIII:1 of the GATT 1994 by
failing to recognize China as having a "principal supplying interest" or a "substantial interest" in
tariff concessions for certain poultry and meat products and rejecting China's request to participate
in negotiations on the EU's modification of such concessions. These negotiations took place
in 2006 and 2009 to 2012, respectively. The United States wishes to comment on one legal issue
and one key fact in relation to this claim.
5. First, from a legal perspective, it is not clear that an alleged failure to follow the procedures
in GATT 1994 Article XXVIII necessarily gives rise to a breach of that provision cognizable under
the DSU. Article XXVIII:1 establishes that a WTO Member "may" modify or withdraw a concession
following certain actions. Those actions are "negotiation and agreement" with certain Members,
"subject to consultation" with certain other Members. Article XXVIII:3 then establishes that, if
agreement with the first set of Members cannot be reached, the Member proposing "to modify or
withdraw the concession shall, nevertheless, be free to do so." If the proposing Member chooses
to so act, the first and second set of Members "shall then be free" to withdr aw "substantially
equivalent concessions" initially negotiated with that Member.
6. This procedure, then, would appear to provide its own remedy for the withdrawal or
modification of the concession by that proposing Member. That is, the first and second s et of
Members can rebalance their own concessions in light of the withdrawal or modification. It could
be viewed as incongruous to both permit a self -judging rebalancing of concessions under the
Article XXVIII procedures and a claim for breach of the Arti cle XXVIII procedures. And it is not
clear how an alleged failure to follow a procedure resulting in a change to a Member's WTO
Schedule would constitute a "measure affecting the operation of any covered agreement taken
within the territory of" the proposing Member. In substance, of course, a Member may potentially
challenge the treatment accorded to imports, following a modification or withdrawal, pursuant to
numerous Articles of GATT 1994, including Articles I, II, XI, and XIII.
7. Even were a claim for a procedural breach of Article XXVIII susceptible to action under the
DSU, however, from the U.S. review of the parties' submissions it is not clear that China has set
out a necessary fact to advance its claim under Article XXVIII:1.

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8. Specifically, the United States understands that China asserts the inconsistency arises from
the EU's failure to recognize China as having a "principal supplying interest" or a "substantial
interest" in the relevant tariff concession. Under the text of Article XXVIII:1, however, this
assertion would not be enough.
9. As mentioned, Article XXVIII:1 establishes that a Member proposing to modify or withdraw a
concession may do so "by negotiation and agreement" with any Member having an initial
negotiating right "and with any other [Member] determined by the CONTRACTING PARTIES to
have a principal supplying interest" and "subject to consultation with any other [Member]
determined by the CONTRACTING PARTIES to have a substantial interest in such concession."
Thus, by the very terms of Article XXVIII:1, a Member entitled to negotiate and agree is that
"determined by the CONTRACTING PARTIES to have a principal supplying interest". Likewise, the
Member entitled to "consultation" on the proposed modification or withdrawal is that "determined
by the CONTRACTING PARTIES to have a substantial interest."
10. China has not established or even alleged that it was "determined by the CONTRACTING
PARTIES" (to be understood as a reference to Ministerial Conference or General Council, or as
delegated) to have a principal supplying interest or a substantial interest in any such concession.
Nor does China allege that the EU accepted China's assertion of a substantial interest, which under
the Procedures for Negotiations under Article XXVIII, co uld be deemed to constitute such a
determination. Therefore, the United States does not understand the basis on which China
considers that it could make a claim under Article XXVIII:1 in relation to a status that it does not
even allege it had.
11. As noted above, China's claim under Article XXVIII:1 raises a novel legal issue, one which
has been discussed by the GATT Contracting Parties and which, pragmatically, did not result in
review by a GATT panel. As the United States understands the facts in this dispute, the Panel may
similarly decline to make a finding on this legal issue. China has not asserted or established a fact
that is a necessary element of its claim, even assuming, for the limited purposes of this analysis,
that such a claim can be considered under the DSU.
II. The Relationship between Article XIII and Article XXVIII
12. The parties differ significantly in their approach to the obligations in Articles XIII and XXVIII
and the relationship between the two. The United States considers that these provisions address
different situations and impose different requirements for a Member. We would like to highlight
certain key differences between Articles XXVIII and XIII.
13. As discussed, Article XXVIII sets forth the procedural steps a Member must take to "modify
or withdraw a concession" set out in its Schedule to GATT 1994. Once a Member completes the
process specified in Article XXVIII, it is "free to" modify or withdraw the concession at issue – that
is, to affect the legal obligation to which it commits in its Schedule, apart from whatever treatment
it may actually accord to imports into its territory.
14. If a proposing Member has modified or withdrawn the concessions without "agreement" of
any Member with an initial negotiating right or that has been determined to have a principal
supplying interest, the Member may be subject to a compensatory withdrawal of "substantially
equivalent concessions" initially negotiated with that Member. This compensatory withdrawal too
occurs in relation to the aggrieved Member's concessions set out in its GATT 1994 Schedule.
There is no WTO obligation that requires any particular distribution or structure to the tariff
commitments set out in a Member's Schedule, including any that may be expressed as a tariff rate
quota.
15. Article XIII:2 differs in important respects. First, it applies not to the concessions in a
Member's Schedule but to the application of restrictions to imports, including tariff -rate quotas.
Article XIII:2 refers to a Member "appl ying import restrictions to any product"; the title of
Article XIII refers to "Non -Discriminatory Administration of Quantitative Restrictions"; and
Article XIII:1 refers to any "restriction … applied by any contracting party on the importation of
any product".
16. Second, as the obligations in Article XIII apply to the application or administration of
restrictions on imports, they apply whenever a Member seeks to apply or administer such a

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restriction. That is, while the procedure in Article XXVIII comes to a close with the possible
modification or withdrawal of concessions in the relevant Members' Schedules, the treatment of
imports by a Member at any given time must comply with Article XIII, and other provisions that
govern "treatment" of imports, such as Articles I, II, III, or XI.
17. Accordingly, the United States considers that the existence of a tariff concession in the form
of a tariff -rate quota in a Schedule does not determine the WTO -consistency of the treatment of
imports under a tariff -rate quota that is applied by a Member through a domestic tariff measure.
As noted, a concession in a Member's GATT 1994 Schedule is not – at the level of the concession –
subject to an ongoing WTO obligation. Rather, a failure to accord to imports the treatmen t set out
in the Schedule – such as concession for a particular Member expressed as a tariff -rate quota –
would give rise to a claim under GATT 1994 Article II:1(b). If a tariff -rate quota is imposed by a
Member through a domestic tariff measure, the trea tment given to imports through that import
restriction must conform to the requirements of Article XIII.
18. A Member may then have to adjust its treatment of imports to ensure that it meets both its
obligations under Article XIII (on non -discrimination) and Article II (treatment no less favorable
than that set out in its Schedule). Because they are addressed to different situations, a Member
could not justify its treatment of imports inconsistently with Article XIII by pointing to completion
of the proc edures under Article XXVIII applicable to modifying tariff concessions in a GATT 1994
Schedule. Logically, nor would satisfying the obligation to treat imports in a non -discriminatory
manner under Article XIII have relevance for the concessions in a Membe r's Schedule resulting
from the procedures pursuant to Article XXVIII.
EXECUTIVE SUMMARY OF RESPONSES OF THE UNITED STATES OF AMERICA TO THE PANEL'S QUESTIONS FOR
THE THIRD PARTIES
1. If China were dissatisfied with the EU's non -recognition of its status under Article XXVIII, its
proper recourse was to the Ministerial Conference or the General Council. It would not be for the
Panel to determine whether those bodies had failed to make the proper determination, even aside
from the fact that China has not even asked those bodies to make such a determination.
2. As described above, Article XXVIII allows a Member to modify or withdraw a scheduled
commitment as long as it negotiates and consults with the appropriate WTO Members. According
to the text of Article XXVIII and the Procedures for Negotiations under Article XXVIII, the Members
having a right to participate in these negotiations and consultations as determined by the
Contracting Parties at the start of the negotiations. If the Contracting Parties did no t make such a
determination with respect to a Member, that Member does not have recourse to the remedy
provided for in paragraph 3 of Article XXVIII.
3. Paragraph 7 to the Note Ad Article XXVIII establishes that the concept of "discriminatory
quantitative restrictions" is one that the then -CONTRACTING PARTIES agreed for purposes of
guiding their own "judgment" on whether a Member would merit the status of having a "principal
supplying interest" or a "substantial interest" . In this, the Ad Article correspon ds to the language
of Article XXVIII previously reviewed, which establishes that a Member's status for purposes of
negotiations or consultations on proposed modifications of concessions is a matter reserved to the
decision of the Ministerial Conference or General Council.
4. Again, as elaborated in the U.S. third -party oral statement, this is not an interpretive issue
for the Panel to resolve. China has not established or even alleged that it was "determined by the
CONTRACTING PARTIES" (to be understood a s a reference to Ministerial Conference or General
Council, or as delegated) to have a principal supplying interest or a substantial interest in any such
concession. If China were dissatisfied with the EU's non -recognition of its status under
Article XXVIII, its proper recourse was to the Ministerial Conference or the General Council. It
would not be for the Panel to determine that those bodies had failed to make a determination,
even aside from the fact that China has not even asked those bodies to make that determination.