Document: WT/DS269/R Page B-1 ANNEX B SUBMISSIONS BY THIRD PARTIES Contents Page Annex B-1 Third Party Executive Summary by China B-2 Annex B-2 Third Party Oral Statement of the United States at the First Meeting of
Document codes: WT/DS269/R
Complainant: Brazil
Respondent: EU
Third parties: China, Thailand, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. II:1, XXIII  GATT 1994

ANNEX B

SUBMISSIONS BY THIRD PARTIES

Contents Page
Annex B-1 Third Party Executive Summary by China

B-2
Annex B-2 Third Party Oral Statement of the United States at the First Meeting of
the Panel

B-5

ANNEX B-1

THIRD PARTY SUBMISSION OF CHINA
EXECUTIVE SUMMARY

(30 September 2004)

I. INTRODUCTION
1. China's third party submission d eals with the following three issues:

 (1) The Appellate Body in EC – Customs Classification of Certain Computer Equipment ,
("EC – Computer Equipment ") has established the rules for interpreting the meaning
of tariff concessions. Such rules are also applicable in this case;

 (2) The EC's interpretation of heading 0210 of its Combined Nomenclature (the "CN")
lacks clear textual basis either in the Schedule LXXX or the Harmonized System and
its Explanatory Notes; and

 (3) The EC's classification practice a nd legislations during the Uruguay Round
negotiations as supplementary means of interpretation of Schedule LXXX.

II. RULES FOR INTERPRETING TARIFF CONCESSIONS
2.1 In EC – Computer Equipment , the Appellate Body established that the only rules which may
be applied in interpreting the meaning of a concession are the general rules of treaty interpretation set
out in the Vienna Convention on the Law of Treaties (the " Vienna Convention "). Specifically, the
Appellate Body in EC – Computer Equipment stressed the following rul es for interpreting tariff
concessions.

2.2 Pursuant to Article 31 of the Vienna Convention , the meaning of a term of a treaty is to be
determined in accordance with the ordinary meaning to be given to this term in its context and in the
light of the object and purpose of the treaty.

2.3 With respect to the context of Schedule LXXX, a proper interpretation of Schedule LXXX
should have included an examination of the Harmonized System and its Explanatory Notes.

2.4 Pursuant to Article 32 of the Vienna Convention, if after applying Article 31 of the Vienna
Convention, meaning of the term remains ambiguous or obscure, or leads to a result which is
manifestly absurd or unreasonable, a treaty interp reter may have recourse to supplementary means of
interpretation, including the preparatory work of the treaty and the circumstances of its conclusion.

2.5 With respect to "circumstances of the conclusi on" of a treaty, the classification practice of an
importing member as well as that member's legislation on customs classification during the Uruguay
Round is relevant in interpreting tariff concessions in a Member's Schedule

2.6 China believes that th e above rules are also applicable in this case.

III. NO TEXTUAL BASIS OF THE EC'S INTERPRETATION OF HEADING 0210
3.1 Under the EC's Commission Regulation (EC) No. 1223/2002 of July 8, 2002 ("Regulation
No. 1223/2002"), boneless chicken cuts, frozen and im pregnated with salt in all parts, having a salt
content by weight of 1.2 to 1.9% is classified under heading 0207.14.10 of the CN.

3.2 The ordinary meanings of the term "salted", as discussed by the parties to the dispute in their
respective written submissions, does not clearly indicate that the salting process under heading 0210
must be intended for preservation purpose only.

3.3 In "context" examination for interpreta tion of Schedule LXXX, China notes that the
explanatory notes to heading 0210 and chapter 2 of the Harmonized System and its Explanatory Notes
are relevant to this case.

3.4 In explanatory note to heading 0210, there is no clear indication that salting under
heading 0210 must be for long-term preservation purpose.

3.5 The only place in Chapter 2 of the Harmonized System and its Explanatory Notes that salting
relates to preservation is in the explanatory note to Chapter 2.

3.6 The EC's Commission Regulation No. 1871/2003 of October 23, 2003 ("Regulation No.
1871/2003") provides that, according to the explanator y note to Chapter 2, the reasoning applied to
fresh meat applies equally to frozen meat, i.e., fresh meat remains classified as fresh meat even if it
has been packed with salt as a temporary preserving agent during transport.

3.7 The reasoning in Regulation No. 1871/2003 finds no clear textual basis in the Harmonized
System and its Explanatory Notes.

3.8 First, the Harmonized System and its Explanatory Notes do not contain same or similar
languages annex to terms "frozen" as the term "fresh".

3.9 Second, even if this reasoning applies equally to frozen meat, the only situation that chicken
meat that has been both frozen and salted could be classified under heading 0207 is that the frozen
chicken meat is "packed with salt as a tempor ary preservative during transport" rather than
"impregnated with salt in all parts" with a minimum salt content of 1.2%.

IV. EC'S CLASSIFICATION PRACTICE AND LEGISLATION DURING THE
URUGUAY ROUND NEGOTIATIONS
4.1 At the time of the Uruguay Round, the appli cable classification legislation of the EC was
Council Regulation (EC) No. 2658/87. Prior to the end of the verification process of Schedule
LXXX, the EC published its Commission Regulation (EC) No. 535/94 on March 9, 1994 ("Regulation
No. 535/94") to amend Annex I to Regulation No. 2658/87.

4.2 Regulation No. 535/94 defined the term of "sa lted" of heading 0210 of the CN as "meat or
edible meat offal which has been deeply and homogeneously impregnated with salt in all parts, having
a total content not less than 1.2% by weight".

4.3 Regulation No. 535/94 also stipulated that a tota l salt content of 1.2% or more by weight was
an appropriate criterion for distinguishing between salted meat and fresh, chilled or frozen meat.

4.4 Regulation No.535/94 was published within th e verification period of Schedule LXXX, and
entered into force on April 1, 1994 - right before the conclusion of the Uruguay Round negotiations.

It may be reasonable to expect that a regulation, promulgated by a member at the end of the Uruguay
Round negotiation, has set out the criteria for classi fying salted meat as adopted by that member
during the Uruguay Round negotiations.

4.5 China notes that the definition of "salted" of heading 0210 as established by Regulation
No. 535/94 remained in force in the CN until the adoption of Regulation No. 1223/2002.

ANNEX B-2

THIRD PARTY ORAL STATEMENT OF THE UNITED STATES
AT THE FIRST MEETING OF THE PANEL

(29 September 2004)

I. INTRODUCTION
1. Mr. Chairman and members of the Panel, thank you for providing the United States, as a third
party in this proceeding, the opportunity to make a statement at this meeting of the Panel.

2. This dispute does not concern customs classifi cation as such. Rather, this dispute concerns
the tariff treatment by the European Communities (" EC") of frozen boneless chicken cuts from Brazil
and Thailand, specifically whether the EC is providing tariff treatment to those products that is less
favorable than that provided for in its schedule of tariff concessions for the Uruguay Round, Schedule
LXXX. The United States would like to take the opportunity this morning to make the limited but
important point that, in analyzing the meaning of the terms of the relevant concession, one must
consider evidence of how the EC understood those terms at the time the EC made the concession.

II. DISCUSSION
3. As Brazil and Thailand explained in their submi ssions, the key term at issue in this dispute is
"salted." Whether the products Brazil and Thailand export to the EC may benefit from the concession
the EC made for heading 0210, which covers "other salted meat," depends on the meaning of the term
"salted." Thus, in view of the obligations containe d in paragraphs 1(a) and (b) of Article II of the
General Agreement on Tariffs and Trade 1994 ("GATT 1994"), the issue is whether the EC made a
concession in the Uruguay Round with respect to the tariff treatment of "salted meat" under
heading 0210 that covers the products Brazil and Thailand export.

4. Brazil and Thailand present evidence that, in 1994, prior to the conclusion of Schedule
LXXX, the EC published Regulation 535/1994, which states that the EC would distinguish "fresh,
chilled or frozen meat" of heading 0207 of its Combined Nomenclature ("CN") from "salted meat" of
heading 0210 by considering meat with a total sa lt content of 1.2% or more by weight as "salted
meat." Accordingly, the EC inserted an additional note in Chapter 2 of its CN that states: "For
purposes of heading No. 0210, the term 'salted' mean s meat or edible meat offal which has been
deeply and homogeneously impregnate d with salt in all parts, having a total salt content of not less
than 1,2% by weight." While Brazil and Tha iland were not exporting the frozen boneless chicken
cuts at issue to the EC at the time of the Urugua y Round, Thailand began to export such products in
1996, and Brazil followed suit in 1998. For several years thereafter, the EC accorded to frozen
boneless chicken cuts from Brazil and Thailand that had a total salt content greater than 1.2% by
weight the tariff treatment provided in the EC's Schedule under heading 0210.

5. In 2002, the EC published Re gulation 1223/2002, which stated that, for purposes of heading
0207, "The addition of salt does not alter the char acter of the product as frozen meat of heading
0207." In 2003, the European Commission "clari fied and confirmed" that frozen boneless chicken
cuts with a salt content by weight of 1.2% to 1. 9% were to be classified under heading 0207, not
0210, and required Germany to withdraw a decision that salt contents of 1.9% to 3.0% were
classifiable under heading 0210. Later that y ear, the EC published Regulation 1871/2003, which
amended the note in chapter 2 of its CN defining "salted meat" for the purpose of heading 0210 to add
the conditions that "it is the salting which ensures long-term preservation."

6. The EC now argues that, "[f]or Brazil and Tha iland to prevail they must show that 'salty
chicken' can be considered 'sa lted' for the purpose of the interpretation of the EC's schedule."
1 The
EC asserts that Brazil and Thailand cannot prove th eir case, because, at the time the EC bound its
tariff rate for heading 0210, "the figure of a 1.2% salt content was conceived of as a minimum salt
content" and that "[i]t was never considered that th e mere existence of a salt content of greater than
1.2% in itself made a product 'salted' for the purpose of 02.10." 2 Brazil and Thailand disagree that
there was an understood criterion of long-term preserv ation associated with the term "salted" in the
definition that existed in the EC's CN at the tim e Schedule LXXX was concluded, and believe that the
EC's concession for heading 0210 covers the product they export.

7. Without taking a view on who is correct, th e United States wishes to emphasize that the
evidence of the meaning of the terms in the EC's CN before the EC concluded Schedule LXXX must
be relevant to understanding what tariff concession the EC granted and, therefore, what the EC's
obligations are under Article II of the GAT T 1994. The Appellate Body noted in European
Communities – Customs Classification of Certain Computer Equipment that the "only rules which
may be applied in interpreting the meaning of a concession are the general rules of treaty
interpretation set out in the Vienna Convention."
3 The United States agrees that the term "salted" in
heading 0210 must be examined pursuant to the customary rules of interpretation of public
international law reflected in Article 31(1) of the Vienna Convention; that is, "in accordance with the
ordinary meaning to be given to the term ... in [its] context and in the light of [the treaty's] object and
purpose." The United States believes that the meaning the EC gave to the word "salted" prior to the
conclusion of its Schedule is relevant evidence of the ordinary meaning of that term. In other words,
the meaning that the EC itself assigned to the term "s alted" would appear to be evidence of what the
EC itself accepts as being within the scope of the ordinary meaning of the term.

8. The obligations of Article II:1(a) regarding "t reatment" apply to the "treatment provided for"
in a Member's Schedule, and the obligations of Artic le II:1(b) regarding duty rates apply with respect
to the "products described" in a Member's Schedule. The ordinary meaning of "describe" is "to state
the characteristics of." Before it concluded Sc hedule LXXX, the EC "described" or "stated the
characteristics of" the product "salted" meat in its CN as "deeply and homogeneously impregnated
with salt in all parts, having a total salt content of not less than 1,2% by weight."

9. As Brazil points out, "there is nothing
 in the ordinary meaning of the term 'salted' that
suggests that it is exclusively a process used to ensure [long-term] preservation." 4 On the other hand,
it is clear that the ordinary meaning of "salted" does include the meaning contained in the 1994 CN
note. Even the EC acknowledges that one meaning of "salted" is that the meat's "flavour has been
altered by the addition of salt."5

10. Alternatively, the Panel could consider th e 1994 CN note defining the term "salted," as well
as the classification practice of the EC during the Uruguay Round of these products, as part of "the
circumstances of [the] conclusion" of the WTO Agreement that may be used as a supplementary
means of interpretation pursuant to the customary rul es of interpretation reflected in Article 32 of the
Vienna Convention . As the Appellate Body observed in European Communities – Customs
Classification of Certain Computer Equipment, "we consider that the classification practice in the

1 First Written Submission by the European Communities ("EC First Submission"), para. 1.
2 EC First Submission, para. 88.
3 Appellate Body Report, European Communities – Customs Classification of Certain Computer
Equipment (EC – Computer Equipment) , WT/DS62/AB/R, WT/DS67/AB/R, 68/AB/R, adopted June 5, 1998,
para. 84.
4 First Written Submission of Brazil ("Brazil First Su bmission"), para. 100 (emphasis and brackets in
original).
5 EC First Submission, para. 121.

European Communities during the Uruguay Round is part of 'the circumstances of [the] conclusion' of
the WTO Agreement and may be used as a supplementa ry means of interpretation within the meaning
of Article 32 of the Vienna Convention." 6 Further, "If the classification practice of the importing
Member at the time of the tariff negotiations is relevant in interpreting tariff concessions in a
Member's Schedule, surely that Member's legislation on customs classification at that time is also
relevant."7 Accordingly, recourse may be had to the 1994 CN note and the EC's classification practice
to confirm the ordinary meaning of "salted" or to determine its meaning if its meaning is otherwise
ambiguous or obscure.

III. CONCLUSION
11. This concludes my presentation. The United States appreciates this opportunity to present its
views.

6 Appellate Body Report, EC – Computer Equipment, para. 92.
7 Appellate Body Report, EC – Computer Equipment, para. 94.