CHILE – PRICE BAND SYSTEM AND SAFEGUARD MEASURES RELATING TO CERTAIN AGRICULTURAL PRODUCTS
Document: Recourse to Article 21.5 of the DSU by Argentina Notification of an Appeal by Chile under Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 20(1) of the Working Procedures for Appellate Review
Date: 5 February 2007
Document codes: WT/DS207/22
Complainant: Argentina
Respondent: Chile
Third parties: Australia, Brazil, Canada, China, Colombia, Costa Rica, EU, Ecuador, El Salvador, Guatemala, Honduras, Japan, Nicaragua, Paraguay, Peru, Thailand, Venezuela, U.S.
Dispute stage: Implementation & Compliance
Agreements cited: Art. XIX:1, II  GATT 1994Art. 4  AgricultureArt. 2, 3, 4, 5, 6, 12  Safeguards

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

Recourse to Article 21.5 of the DSU by Argentina

Notification of an Appeal by Chile
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 5 February 2007, from the Delegation of Chile, is being
circulated to Members.

Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review, Chile
hereby notifies its decision to appeal to the Appellate Body certain issues of law covered in the Report
of the Panel on Chile – Price Band System and Safeguard Me asures Relating to Certain Agricultural
Products - Recourse to Article 21.5 of the DSU by Argentina () and certain legal
interpretations developed by the Panel.

 Chile seeks review by the Appellate Body of cer tain Panel conclusions that are in error and
are based upon erroneous findings on issues of law and on related legal interpretations.

1. The Panel failed to determine and apply the appropriate burden of proof applicable to a
dispute settlement proceeding under Article 21.5 of the DSU by allocating to Chile the burden to
prove that Law 19.897 and Supreme Decree 831 (collec tively, the "Implementing Measure") were no
longer WTO inconsistent rather than allocati ng the burden to Argentina to prove that the
Implementing Measure was inconsistent with Ch ile's WTO obligations under Article 4.2 and
footnote 1 of the Agreement on Agriculture.
1

2. The Panel erred in its interpretation of Article 4.2 and footnote 1 of the Agreement on
Agriculture by failing to give effect to the language "other than ordinary customs duties" in
footnote 1,2 by failing to examine "similarity" with variable import levies and minimum import prices
on an empirical basis with reference to th e actual effects of the Implementing Measure, 3 by

1The Panel's errors are reflected in its overall analysis in paragraphs 7.14 to 7.104, most notably in its
findings in paragraphs 7.14, 7.44, 7.54, 7.55, 7.79, 7.81, 7.92, 7.96, and in its findings in relation to the parties'
comments on the interim report in paragraphs 6.8 to 6.12, most notably paragraph 6.12.
2The Panel's error is set forth in paragraphs 7.14, 7.20, 7.54, 7.81, 7.92 and 7.104.
3The Panel's error is set forth in paragraphs 6.9 to 6.12 and 7.97 to 7.103 and otherwise apparent from
the Panel's analysis in paragraphs 7.14 to 7.104.

misinterpreting the term "variable" in footnote 1, including in a manner not in accordance with the
Appellate Body's findings,
4 by interpreting the terms "transpare ncy" and "predictability" in a manner
not in accordance with the Appellate Body's findings, 5 and by otherwise developing a legal test for
compliance with Article 4.2 and footnote 1 of the Agreement on Agriculture that is internally
contradictory and not in accordance with the Appellate Body's findings in the prior dispute.6

3. The Panel erred in its application of Article 4.2 and footnote 1 of the Agreement on
Agriculture to the Implementing Measure, including its findings relating to whether the
Implementing Measure, was similar to a "variable import levy" 7 and its findings relating to whether
the Implementing Measure was similar to a "minimum import price" 8 particularly when such an
analysis is appropriately conducted on an empirical basis.

4. The Panel acted inconsistently with its oblig ations under Article 11 of the DSU to "make an
objective assessment of the matter before it, including an objective assessment of the facts of the case
and the applicability of and conformity with the re levant covered agreements" and Article 12.7 of the
DSU to set out "the findings of fact, the applicab ility of relevant provisions and the basic rationale
behind any findings and recommendations that it makes" by, inter alia:

(a) concluding, without explanation, that the Ministry of Finance violated Chilean law in
establishing the levels of the price bands;
9

(b) failing, without explanation, to correct e rrors in the Original Panel's characterization
of the Price Band System, although the Panel relied on such characterization in making its
own findings;10

(c) conducting only a cursory review of rele vant features of the Implementing Measure
in isolation;
11 and

(d) failing to consider empirical evidence on the actual operation of the Implementing
Measure.
12

 Chile respectfully requests that the Appellate Body reverse the findings and conclusions of
the Panel and modify accordingly the recommendations and rulings of the Panel.
13

4The Panel's errors are set forth in paragraphs 7.28 and 7.55 to 7.104.
5The Panel's errors are set forth in paragraphs 7.28 and 7.55 to 7.104.
6The Panel's errors are reflected in its overall analysis in paragraphs 7.14 to 7.104.
7The Panel's error is set forth in paragraphs 7.55 to 7.104, in particular paragraphs 7.55 to 7.81.
8The Panel's errors are reflected in paragraphs 7.55 to 7.104, in particular paragraphs 7.82 to 7.92.
9The Panel's error is set forth in paragraph 7.79.
10The Panel's error is set forth in paragraphs 6.14, 7.40(d), 7.48, 7.50, 7.75, and 7.86 to 7.88.
11The Panel's errors are reflected in its overall analysis in paragraphs 7.14 to 7.104.
12The Panel's errors are reflected in its overall analysis in paragraphs 7.14 to 7.104 and in its findings in
relation to the parties' comments on the interim report in paragraphs 6.8 to 6.12.
13See paragraphs 8.2(a), 8.3, and 8.4.