EUROPEAN COMMUNITIES – EXPORT SUBSIDIES ON SUGAR
Document: Notification of an Other Appeal by Brazil under Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 23(1) of the Working Procedures for Appellate Review
Date: 25 January 2005
Document codes: WT/DS266/27
Complainant: Brazil
Respondent: EU
Third parties: Australia, Barbados, Belize, Canada, China, Colombia, Cuba, Fiji, Guyana, India, Jamaica, Kenya, Madagascar, Malawi, Mauritius, New Zealand, Paraguay, Saint Kitts and Nevis, Eswatini, Tanzania, Thailand, Trinidad and Tobago, U.S., Côte d’Ivoire
Dispute stage: Appellate Body
Agreements cited: Art. 3.3, 8, 9.1, 10.1  AgricultureArt. 1.1, 3.1, 3.2  Subsidies and Countervailing Measures (SCM)

EUROPEAN COMMUNITIES – EXPORT SUBSIDIES ON SUGAR

Notification of an Other Appeal by Brazil
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 25 January 2005, from the Delegation of Brazil, is being
circulated to Members.

 Pursuant to Articles 16.4 and 17.4 of the U nderstanding on Rules and Procedures Governing
the Settlement of Disputes (“ DSU”) and Rule 23 of the Working Procedures for Appellate Review,
Brazil appeals certain issues of law and le gal interpretation in the Panel Report in ().

1. Brazil claims that the Panel committed legal error in the exercise of the principle of judicial
economy, in paragraph 7.387 of the Panel Report, by declining to examine Brazil’s claim that
the regimes for A, B and C sugar, and for ACP/ India equivalent sugar, involve the provision
of export subsidies prohibited by Articles 3.1(a) and 3.2 of the Agreement on Subsidies and
Countervailing Measures (“SCM Agreement”).

2. The Panel’s finding is based on an erroneous in terpretation and application of Article 4.7 of
the SCM Agreement and Article 19.1 of the DSU. The Panel erred in deciding to exercise
judicial economy on the basis of the implemen tation obligations in Article 19.1 of the DSU.
These obligations would not apply if Brazil’s claims under Article 3 of the SCM Agreement
were upheld. Instead, in that event, the r ecommendations and rulings of the DSB would be
determined pursuant to Article 4.7 of the SCM Agreement.

3. As a result of these errors, the Panel also erred in its interpretation and application of Article
19.2 of the DSU by nullifying the right of Brazil to resolve a dispute concerning prohibited
export subsidies in terms of the implementation obligations available under Article 4.7 of the
SCM Agreement . The Panel has also erred under Article 19.2 of the DSU by nullifying
Brazil’s right, in the event of a failure by the European Communities to comply with the
recommendations and rulings of the DSB in this dispute, to avail itself of the remedies and
procedures foreseen by Article 4.10 of the SCM Agreement.

4. Brazil claims, therefore, that the Panel erred in the exercise of the principle of judicial
economy and also in the interpretation a nd application of Article 4.7 of the SCM Agreement
and Articles 19.1 and 19.2 of the DSU. Brazil intends to argue that the Panel’s findings in,
inter alia, paragraphs 7.383 – 7.387 of the Panel Report contains these errors.

5. In the event that Appellate Body reverses the Panel’s exercise of judicial economy, Brazil
requests that the Appellate Body complete the legal analysis by examining Brazil’s claims
under Articles 3.1(a) and 3.2 of the SCM Agreement on the basis of Panel’s factual findings
and the uncontested facts of record.