EUROPEAN COMMUNITIES – CUSTOMS CLASSIFICATION OF FROZEN BONELESS CHICKEN CUTS
Document: Report of the Appellate Body
Date: 12 September 2005
Document codes: WT/DS269/AB/R; WT/DS286/AB/R
Complainant: Thailand
Respondent: EU
Third parties: Brazil, China, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. II, XXII  GATT 1994

EUROPEAN COMMUNITIES – CUSTOMS CLASSIFICATION
OF FROZEN BONELESS CHICKEN CUTS

AB-2005-5

Report of the Appellate Body

APPELLATE BODY

European Communities, Appellant/Appellee
Brazil, Appellant/Appellee
Thailand, Appellant/Appellee

China, Third Participant
United States, Third Participant
 AB-2005-5

 Present:

 Sacerdoti, Presiding Member
 Baptista, Member
 Ganesan, Member

I. Introduction
1. The European Communities, as appellant, and Br azil and Thailand, as other appellants, each
appeal certain issues of law and legal inte rpretations developed in the Panel Reports, (the "Panel Reports"). 1 The
Panel was established to consider complaints by Brazil and Thailand concerning certain measures of
the European Communities, pertaining to the classi fication of frozen boneless salted chicken cuts for
tariff treatment.2
2. Brazil and Thailand claimed before the Panel that Commission Regulation (EC)
No. 1223/2002 ("EC Regulation 1223/2002") and Commission Decision No. 2003/97/EC
("EC Decision 2003/97/EC") resulted in tariff treatme nt for frozen boneless salted chicken cuts that is
less favourable than that provided for in the European Communities' Schedule LXXX
(the "EC Schedule"), in violation of Article II:1(a) and/or Article II:1(b) of the General Agreement on
Tariffs and Trade 1994 (the "GATT 1994"). 3 More particularly, Brazil and Thailand alleged that,
through the challenged measures, "the European Communities changed its customs classification so
that those products, which had previously been classified under subheading 0210.90.20 and were
subject to an ad valorem tariff of 15.4%, are now classified under subheading 0 207.41.10 and are

1Complaint by Brazil , WT/DS269/R, 30 May 2005; Complaint by Thailand , WT/DS286/R, 30 May
2005. At the request of the European Communities, purs uant to Article 9.2 of the DSU, the Panel issued two
separate reports. These two reports have the same descri ptive part and findings; the only "material difference"
between these separate reports is the cover page and the conclusions. (Panel Reports, para. 6.21)
2Panel Reports, para. 2.1.
3Ibid., paras. 2.1 and 7.60.

subject to a tariff of 102.4€/100kg/net as well as be ing potentially subject to special safeguard
measures pursuant to Article 5 of the Agreement on Agriculture."
4
3. Brazil and Thailand also claimed before the Panel that, although Commission Regulation
(EC) No. 1871/2003 ("EC Regulation 1871/2003") and Commission Regulation (EC) No. 2344/2003
("EC Regulation 2344/2003") were not mentioned sp ecifically in their requests for the establishment
of a panel 5, these Regulations must be considered as part of the challenged measures because they are
"closely related" to and based on the same princi ple of long-term preservation, as set out in the
challenged measures. 6 Brazil and Thailand also alleged that the specific products at issue were
"frozen boneless salted chicken cuts that have been deeply and homogeneously impregnated with salt
in all parts with a total salt content of not less than 1.2% by weight", and that the terms of reference
are not limited to products with a salt content between 1.2 and 3 per cent.7
4. In the Panel Reports, circulated to Members of the World Trade Organization (the "WTO")
on 30 May 2005, the Panel determined that EC Re gulations 1871/2003 and 2344/2003 were outside
the Panel's terms of reference. 8 The Panel further concluded that th e specific products at issue in this
dispute were "frozen boneless chicken cuts impregnate d with salt, with a salt content of 1.2% – 3%"
as provided for in the measures under the terms of reference.9
5. The Panel then proceeded to examine whet her the measures at issue—EC Regulation
1223/2002 and EC Decision 2003/97/EC—resulted in th e imposition of duties and conditions on the
products at issue in excess of those provided for in the EC Schedule. The Parties agreed that the
import duties levied on the products at issue, when classified under heading 02.07, exceeded
15.4 per cent ad valorem, which is the bound duty rate for produc ts covered by heading 02.10. In
view of this agreement, the Panel concluded that, if it were to determine that "the products at issue are
covered by the concession contained in heading 02.1 0 of the EC Schedule rather than the concession
contained in heading 02.07, there is no question that the treatment accorded to those products under
the measures at issue is less favourable than that provided for in the EC Schedule."10

4Panel Reports, para. 7.3.
5WT/DS269/3 (Brazil), 22 September 2003; WT/DS286/5 (Thailand), 28 October 2003.
6Panel Reports, paras. 7.21-7.22.
7EC Regulation 1223/2002 and EC Decision 2003/97/EC refer to frozen boneless salted chicken cuts
impregnated with salt, with a salt content of 1.2 to 3 pr cent.
8Panel Reports, para. 7.32.
9Ibid., para. 7.36.
10Ibid., para. 7.75.

6. Before the Panel, Brazil and Thailand claimed th at the products at issue were not covered by
heading 02.07, but rather by heading 02.10, while the European Communities alleged the reverse.
Both Brazil and Thailand based their positions on the meaning of the term "salted" in heading 02.10
and submitted that the notion of "long-term preserva tion" is not included in the meaning of "salted"
under that heading. On the contrary, the Europ ean Communities claimed that the products at issue
were not "salted" because, in order to qualify u nder heading 02.10 (through salting), the product must
have been "deeply and homogenously impregnated with a level of sa lt sufficient to ensure long-term
preservation".11 The Panel found that the critical question in interpreting the EC Schedule is "whether
the term 'salted' in the concession contained in head ing 02.10 covers the products at issue which, in
turn, will entail a determination of whether that c oncession includes the requirement that salting is for
preservation and, more particularly, is for long-term preservation."12
7. Following an analysis under Articles 31 and 32 of the Vienna Convention on the Law
of Treaties (the " Vienna Convention ")13 of the term "salted" in the concession contained in
heading 02.10 of the EC Schedule, the Panel concluded that:
(a) the "ordinary meaning" of the term "salted" is : to season, to add salt, to flavour with
salt, to treat, to cure or to preserve. 14 Therefore, there is nothing in the range of
meanings comprising the ordinary meaning of the term "salted" that indicates that
chicken to which salt has been added is not covered by the concession contained in
heading 02.10 of the EC Schedule15;
(b) the factual context indicates that the ordinary meaning of the term "salted" is that the
character of a product has been altered through the addition of salt. 16 Therefore, the
ordinary meaning of the term "salted" in heading 02.10 is not dispositive regarding
the question whether the products at issue are covered by this concession17;
(c) the "context" of the term "salted"—namely, the terms of heading 02.10, the structure
and the other parts of the EC Schedule, as well as the terms, structure, the
Explanatory Notes and the General Rules fo r the Interpretation of the Harmonized

11Panel Reports, para. 7.81.
12Ibid., para. 7.86. (footnote omitted)
13Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679.
14Panel Reports, para. 7.331.
15Ibid., para. 7.151.
16Ibid., para. 7.331.
17Ibid., para. 7.151.

System (the "General Rules")—do not clarify the "ordinary meaning" of the term
"salted" in the concession contained in h eading 02.10 of the EC Schedule, although
the context does tend to indicate that the h eading is not characterized necessarily by
the notion of long-term preservation
18;
(d) the European Communities' consistent practice of classifying the products at issue
under heading 02.10 during the period between 1996 and 2000 amounts to
"subsequent practice"
19, and it indicates that "the products at issue are covered by the
concession contained in heading 02.10 of the EC Schedule"20;
(e) given the lack of certainty associated with the application of the criterion of long-term
preservation, an interpretation of the term "salted" in the concession contained in
heading 02.10 that includes this criterion could undermine the "object and purpose"
of security and predictability in trade re lations, which lie at the heart of the
Marrakesh Agreement Establishing the World Trade Organization (the
"WTO Agreement") and the GATT 1994 21; and
(f) the relevant aspects of "supplementary means of interpretation", most particularly
Commission Regulation (EC) No. 535/94 ("EC Regulation 535/94"), indicate that
meat that has been deeply and homogene ously impregnated with salt and has a
minimum salt content of 1.2 per cent by weight would qualify as "salted" meat under
the concession contained in heading 02.10 of the EC Schedule. 22 The supplementary
means of interpretation under Article 32 of the Vienna Convention confirm the
preliminary conclusions reached by the Panel under Article 31 of the Vienna
Convention.23
8. After evaluating the claims of the Parties and interpreting the term "s alted" according to the
interpretation rules codified in the Vienna Convention , the Panel found, in the light of its above-
referenced conclusions, that:

18Panel Reports, para. 7.331.
19Ibid., para. 7.303.
20Ibid., para. 7.331.
21Ibid.
22Ibid., para. 7.423.
23Ibid.

(a) frozen boneless chicken cuts that have been impregnated with salt, with a salt content
of 1.2 to 3 per cent (the products at issue), are covered by the concession contained in
heading 02.10 of the EC Schedule;
(b) EC Regulation 1223/2002 and EC Decision 2003/97/EC result in the imposition of
customs duties on the products at issue that are in excess of the duties provided for in
respect of the concession contained in heading 02.10 of the EC Schedule; and
(c) accordingly, the European Communities has acted inconsistently with the
requirements of Articles II:1(a) and II:1(b) of the GATT 1994 and, thus, nullified or
impaired benefits accruing to Brazil and Thailand.24
9. The Panel therefore recommended that the Disput e Settlement Body (the "DSB") request the
European Communities to bring EC Regulati on 1223/2002 and EC Decision 2003/97/EC into
conformity with its obligations under the GATT 1994.25
10. On 13 June 2005, the European Communities notif ied the DSB of its intention to appeal
certain issues of law covered in the Panel Reports and certain legal interpre tations developed by the
Panel, pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (the "DSU") and filed a Notice of Appeal 26 pursuant to Rule 20
of the Working Procedures for Appellate Review (the " Working Procedures").27 On 20 June 2005,
the European Communities filed an appellant's submission. 28 On 27 June 2005, both Brazil and
Thailand notified the DSB of their intention to ap peal certain issues of law covered in the Panel
Reports and certain legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16
of the DSU, and each filed a Notice of Other Appeal 29 pursuant to Rule 23(1) of the Working
Procedures. On 28 June 2005, Brazil and Thailand each filed an other appellant's submission. 30 On

24Panel Reports, para. 8.1.
25Ibid., para. 8.2.
26WT/DS269/6, WT/DS286/8 (attached as Annex I to this Report).
27WT/AB/WP/5, 4 January 2005.
28Pursuant to Rule 21(1) of the Working Procedures.
29WT/DS269/7 (Brazil) (attached as Annex II to th is Report); WT/DS286/9 (Thailand) (attached as
Annex III to this Report).
30Pursuant to Rule 23(3) of the Working Procedures.

8 July 2005, the European Communities, Brazil, and Thailand each filed an appellee's submission.
31
On the same day, China and the United States each filed a third participant's submission.32
11. By letter dated 30 June 2005, Thailand request ed authorization from the Appellate Body
Division hearing the appeal (the "Division"), pursuant to Rule 18(5) of the Working Procedures, to
correct three "clerical errors" in its other appella nt's submission. On 4 July 2005, the Division,
pursuant to Rule 18(5) of the Working Procedures , invited all participants and third participants to
comment on Thailand's request. None of the par ticipants or third participants commented on
Thailand's request. On 6 July 2005, the Division au thorized Thailand to correct the three clerical
errors in its other appellant's submission.
12. On 13 July 2005, the Division hearing the appeal received an amicus curiae brief from the
Association of Poultry Processors and Poultr y Trade in the European Union Countries ( avec).33 The
Division does not find it necessary to take the brief in to account in resolving the issues raised in this
appeal.
13. The oral hearing in this appeal was held on 25 and 26 July 2005. The participants and third
participants presented oral arguments and respond ed to questions posed by the Members of the
Division hearing the appeal.
II. Appeal by the European Communities
A. Claims of Error by the European Communities – Appellant
1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna
Convention
14. The European Communities submits that the Panel erred in its interpretation of heading 02.10
of the EC Schedule in respect of various elements of Article 31 of the Vienna Convention .
Specifically, the European Commun ities alleges that the Panel erre d in its consideration of the
following: the "ordinary meaning" of the term "sal ted" found in heading 02.10; the "context" of that
term; the "object and purpose" of the WTO Agreement and the GATT 1994; and the alleged
"subsequent practice" of the parties concerning classification under heading 02.10.

31Pursuant to Rules 22 and 23(4) of the Working Procedures.
32Pursuant to Rule 24(1) of the Working Procedures.
33In a letter dated 18 July 2005, Brazil requested the Appellate Body to "disregard" avec's amicus
curiae brief. In a letter dated 21 July 2005, and at the oral hearing, Thailand requested that the Appellate Body
"not take [this brief] into account". In its closing statement at the oral hearing, Brazil contested the arguments
made by avec.

(a) Ordinary Meaning
15. The European Communities agrees w ith the Panel that the dictiona ry definitions of the term
"salted" include, but are not confined to, the noti on of preservation. The European Communities also
contends that it is from "the rest of heading 02.10, and the structure of chapter 2" 34 of the Harmonized
Commodity Description and Coding System of the World Customs Organization ("WCO") (the
"Harmonized System") that the term "salted" in that heading derives its meaning as referring to a
process of preservation.
16. The European Communities takes issue with th e Panel's examination of what the Panel
referred to as the "[f]actual context for th e consideration of the ordinary meaning". 35 The European
Communities submits that the analysis of such "factual context" is not relevant to the legal question of
the meaning of the term "salted", and that such an analysis is neither supported by the Vienna
Convention nor by the academic sources to which the Panel referred. 36 Furthermore, several of the
Panel's conclusions as to the "factual context" are re ndered erroneous as a matter of law in the light of
an analysis of the context of the term "salted".
17. The European Communities further claims that certain of the Panel's conclusions in its
analysis of the "ordinary meaning" of the term "salted" amount to "an egregious distortion of the
facts" and are therefore inconsistent with the Panel's obligations under Article 11 of the DSU. 37 First,
the European Communities refers to the Panel's find ing that "it appears that even small quantities of
salt may have a preservative effect".38 In making this statement, the Panel "seriously misrepresent[ed]
the technical evidence supplied" by the European Communities' expert. 39 The Panel stated that "3%
salt may prevent spoilage, albeit for a period of only a few days", whereas what the European
Communities' expert had stated was that a level of salt of 3 per cent in a raw and chilled product is
too low to prevent spoilage for more than a few days.40

34Chapter 2 of the Harmonized Commodity Description and Coding System is attached as Annex IV to
this Report.
35European Communities' appellant's submission, para. 62 (referring to Panel Reports, paras. 7.117-
7.149).
36Ibid. (referring to the Panel's reference to Sir Ian Sinclair, The Vienna Convention on the Law of
Treaties, 2nd edn (Manchester University Press, 1984), p. 121, quoted at Panel Reports, footnote 153 to
para. 7.105).
37Ibid., para. 62.
39Ibid., para. 63.
40Ibid., paras. 63-64 (referring to Panel Reports, footnote 249 to para. 7.146).

18. Secondly, the European Communities challenges the Panel's finding that certain products
under heading 02.10 such as Parma ham, prosciutto , and jamón serrano require further preservation
after salting. The European Communities argues that it is not the salt content of these products that
makes additional means of preservation necessary a nd that these additional means of preservation are
not required. In support of its contention, the European Communities refers to certain statements
made by its expert.
41 Thirdly, the European Communities ch allenges the Panel's finding according to
which the European Communities acknowledged that products covered by heading 02.10 of the
EC Schedule "may require means of preservati on in addition to [salting]" and that this
acknowledgement "support[s] ... the view that a produc t preserved by salt for relatively short periods
of time is not necessarily precluded" from falling under heading 02.10. 42 The European Communities
argues that it did not make such an acknowledgement, but rather that it only pointed out that
preservation by salting did not imply that meat c ould not be "further preserved by other means". 43 In
the European Communities' view, there is no logi cal connection between this observation of the
European Communities and the Panel's conclusion from it.
(b) Context
19. The European Communities submits that the Pane l erred in interpreting the term "salted"
when considering the term in its context. First, as regards the terms "salted, in brine, dried, smoked"
in heading 02.10, the Panel wrongly found that the term "in brine" excludes the notion of
preservation. The Panel found that "brine" is "water containing salt". 44 In the European
Communities' view, the words "to salt" and "sa lted"—which the Panel had previously cited
correctly—"make it quite clear" that the action of pu tting a product in brine is intended to preserve the
product.45 In support of its argument, the European Co mmunities also refers to heading 08.12 of the
Harmonized System, which states that brine is a "preservative solution".46
20. Secondly, the European Communities submits that the Panel erred in failing to take into
account what, according to the European Communities, are the "exclusive distinguishing
characteristics" of the terms "salted, in brine, dr ied, smoked" in heading 02.10. The Panel provided
no explanation for its conclusion that the dictionary meanings of these terms "are broader than just

41European Communities' appellant's submission, paras. 66-67.
43Ibid., para. 70.
44Ibid., para. 77.
45Ibid.
46Ibid., para. 79.

pertaining to preservation". 47 The terms "dried" and "smoked" may have different meanings in
different contexts, but, with respect to meat and f ood, the dictionary definitions point to means of
preservation. The Panel failed to identify the "intrinsic notion common to all terms" in
heading 02.1048; all four terms in heading 02.10 include the concept of preservation, while only two
of them involve the concept of preparation. More over, the Panel also disregarded the fact that the
four processes referred to in heading 02.10 are the only ones commonly applied to the preservation of
meat, and that the group of meats covered by headi ng 02.10 are the only meats to have this feature in
common.49 The European Communities' further points out that meat that has been "subjected to
processes" (that is, "prepared") is "generally classi fied" under Chapter 16 of the Harmonized System;
this shows that, there must be "something special " about the products falling under heading 02.10.
This special feature, the European Communiti es submits, relates to the processes applied under
heading 02.10, namely, processes resulting in preservation of the meat.
21. Thirdly, the European Communiti es challenges what it considers to be the Panel's "failure to
take account of [the] distinguishing features of heading 02.10 in Chapter 2". 50 According to the
European Communities, the headings in that Chapter form two categories, based on whether or not the
meat has been subjected to the processes listed in heading 02.10. If those processes have been
applied, the products fall under heading 02.10, which alone comprises the second category within
Chapter 2. If those processes have not been applied, the products fall under one of headings 02.01
through 02.08, which make up the first category with in Chapter 2. The European Communities also
notes that headings 02.01 through 02.08 refer to th e refrigeration of meat, and that heading 02.10
contains no reference to refrigeration. According to the European Communities, this implies that, for
the products listed in heading 02.10, "the issue of refrigeration is not a significant consideration".51
22. The European Communities also refers to the Explanatory Note to Chapter 2 52, which speaks
of "fresh" meat, "packed with salt as a temporary preservative during transport". According to the
European Communities, the use of the word "tem porary" in the Explanatory Note is "implicitly
opposed" to permanent salting, with the result that heading 02.10 does not cover meats that are

49Ibid., para. 83.
50Ibid., heading III.C.4.
51Ibid., para. 89.
52In its appellant's submission, the European Commun ities referred to this Note as "Chapter Note".
(Ibid., para. 92) Subsequently, the European Communities clar ified that this Note is properly characterized as
"Explanatory Note to Chapter". (European Communities' appellee's submission, footnote 50 to para. 71)

temporarily preserved by salt during transport.
53 The Note also makes it clear that the mere presence
of some salt does not make a product "salted" for the purposes of heading 02.10. The Note further
suggests that not every change in the characteristics of a product, brought about by salting, means that
a product falls under heading 02.10 54; rather, heading 02.10 refers to the result achieved by
preservation. The European Communities also argues that the Panel's finding that the term "salted"
does not necessarily require that salting be suffici ent for preservation is "legally irrelevant" 55; this is
so because the Explanatory Note makes it clear that the fact that a preservation technique other than
those listed in heading 02.10 might be applied does not alter the classification of that product.
23. In addition, the European Communities argues that the Panel failed to take proper account of
the "historical basis" of heading 02.10. 56 At the outset, the European Communities considers the
Panel's approach to be flawed because the Pa nel started with the negotiating history of the
Harmonized System, rather than with the terms of that instrument. The Panel also "overlooked
important elements" of the history of the Harmonized System that "clearly support the notion of
preservation as the basis for heading 02.10."
57
24. The European Communities disagrees with the Panel that the Geneva Draft Nomenclature
of 193758 and the Brussels Nomenclature of 1959 59 are of "limited relevance" because of the changes
in trade patterns and technology since their conclusions. 60 The Panel failed to consider the
introduction of refrigeration in de veloped countries as a major technological change. Given the
absence of refrigeration in the past, trade in items such as salted, dried, or smoked meat "would not
have been possible unless [these products] had been preserved". 61 Furthermore, when the Brussels
Nomenclature was introduced, the words "[c]ooked or otherwise simply prepared" were moved from
the relevant heading of the Geneva Draft Nomencla ture to Chapter 16 of the Brussels Nomenclature,
suggesting that "there must have been a positive d ecision to keep the salted ... meats in a distinct
category", namely a category characterized by preservation. 62 According to the European

54Ibid., para. 96.
55Ibid., para. 98.
56Ibid., heading III.C.5.
57Ibid., para. 100.
581937 Draft Customs Nomenclature of the League of Nations.
591959 Brussels Convention on Nomenclature for the Classification of Goods in Customs Tariffs.
61Ibid., para. 103.
62Ibid., para. 106.

Communities, when the Harmonized System was intr oduced, there was no indication that the drafters
intended to change the scope of the heading pertaining to "salted, dried or smoked meat".
(c) Subsequent Practice
25. The European Communities claims that the Pa nel erred in interpreting and applying the
concept of "subsequent practice" within the meaning of Article 31(3)(b) of the Vienna Convention.
The Panel erroneously "consider[ed] that the unilatera l 'practice' of one party could have a bearing on
[the interpretation of] a multilaterally agreed text a nd ... wrongly analyz[ed] the existence of 'practice'
at the EC and multilateral level." 63 The European Communities app eals the Panel's conclusion that
the individual classification decisions of certain port authorities within the European Communities
between 1996 and 2002 constitute "s ubsequent practice" within the meaning of Article 31(3)(b) for
the purpose of interpreting heading 02.10 of the EC Schedule.
(i) "Concordant" and "Common" Practice
26. The European Communities challe nges the Panel's application of relevant Appellate Body
jurisprudence regarding Article 31(3)(b). That jurisprudence emphasizes that, in order to establish the
common intentions of the parties, subsequent practice must entail a "concordant, common and
consistent" sequence of acts or pronouncements that establishes a discernible pattern, implying the
agreement of the parties regarding the interpretation of the treaty. 64 The European Communities
submits that a key legal issue before the Appellate Body in this proceeding is whether unilateral acts
of one WTO Member that have been met with silence by other WTO Members can qualify as
"subsequent practice" within the meaning of Article 31(3)(b), for purposes of interpreting WTO law.
Such acts, in the European Communities' view, do not represent a concordant and common expression
of the parties' understanding of the law.65
27. In this regard, the European Communities subm its that a commentary of the International
Law Commission (the "ILC"), relied on by the Panel, supports, in fact, the European Communities'
point of view. The relevant statement of the ILC indicates that not all signatories must have engaged
in a particular practice so as to show that all Members have accepted that practice. 66 The European

63European Communities' Notice of Appeal (attached as Annex I to this Re port), paragraph 2(c).
(footnote omitted)
64European Communities' appellant's submission, pa ras. 111-112 (quoting Appellate Body Report,
Japan – Alcoholic Beverages II , p. 13, DSR 1996:I, 97, at 106; Appellate Body Report, Chile – Price Band
System, para. 214; and Appellate Body Report, US – Gambling, paras. 191-192).
65Ibid., para. 116.
66Ibid., para. 118 (referring to the quotation of the ILC Commentary in Panel Reports, para. 7.252).

Communities argues that this statement implies that Article 31(3)(b) does not necessarily require, in
all circumstances, that all parties to a treaty must have actively engaged in a practice; however, the
statement does not support the "directly opposite" view that the practice of one party alone will
suffice.
67 Under public international law, the type an d degree of practice required to establish the
"agreement of the parties [to a treaty] regarding its interpretation" must be ascertained on a case-by-
case basis.
68 To this end, the European Communities relies on the ILC co mmentary that "the value of
subsequent practice varies according[ly] as it shows the common understanding of the parties as to the
meaning of the terms"69, a view also reflected by other commentators.70
28. The European Communities refers to the Appellate Body Report in US – Gambling to
demonstrate the importance placed by the Appe llate Body on the subsequent practice being
"concordant" and "common". 71 It notes that WTO Members have agreed upon a specific procedure
for adopting interpretations of WTO la w, namely Article IX:2 of the WTO Agreement. According to
the European Communities, this provision warrants a narrow application of Article 31(3)(b) of the
Vienna Convention, as exemplified by the Appellate Body finding in Japan – Alcoholic Beverages II;
in that dispute, the Appellate Body found that adopted GATT panel reports and WTO panel reports
cannot qualify as "subsequent practice". 72 Article IX:2 of the WTO Agreement also implies that any
practice that is considered for the interpretation of the multilateral trade agreements must take the
form of overt acts that are explicitly submitted for the consideration of all WTO Members and
adopted by a large majority of the WTO Membership. 73 In support of its position, the European
Communities notes that the Appellate Body and panels have so far consistently denied the status of
"subsequent practice" to all examples of both multilateral and unilateral acts invoked by parties as
subsequent practice.74

68Ibid., para. 120 (quoting Article 31(3)(b) of the Vienna Convention).
69Ibid., para. 119 (quoting Yearbook of the International Law Commission (1966), Vol. II, p. 222,
para. 15).
(1976), Vol. III, p. 48, para. 16).
71Ibid., paras. 118-128 (quoting Appellate Body Report, US – Gambling, para. 192).
72Ibid., para. 123 (quoting Appellate Body Report, Japan – Alcoholic Beverages II, p. 14, DSR 1996:I,
97, at 108).
73Ibid., para. 124.
74Ibid., paras. 125-126 (referring to Appellate Body Report, Japan – Alcoholic Beverages II, pp. 10-12,
DSR 1996:I, 97, at 106-107; Decision by the Arbitrator, US – Offset Act (Byrd Amendment) (EC) (Article 22.6),
footnote 57 to para. 3.42; Panel Report, US – FSC, para. 7.75; Appellate Body Report, US – Gambling, paras.
192-194; Appellate Body Report, Chile – Price Band System , para. 232; and Panel Report, Canada – Patent

29. Moreover, the European Communities alleges th at the Panel, in its interpretation and
application of Article 31(3)(b), failed to take into account the specific context of WTO Members'
Schedules and the Harmonized System. The Europ ean Communities disagrees with the Panel that,
because Schedules are particular to each Member, a Schedule should be interpreted exclusively in
accordance with a specific Member's subsequent prac tice (unless objected to by the other parties).
This argument runs contrary to Members' inte ntion that Schedules follow the Harmonized System,
absent any clear indication to the contrary. The term "salted" appears in heading 02.10 of the
Schedule of all WTO Members and thus should not be defined unilaterally. The European
Communities submits that the Panel's finding would undermine the predictability and stability of the
multilateral Schedules and the application of the Harmonized System because the Harmonized System
confers exclusive authority for interpreting the nomenclature to the Harmonized System Committee
and Council.
75 The European Communities emphasizes th at WTO Members' Schedules form an
"integral part" of the GATT 1994, that they reflect rights and obligations of both importing and
exporting Members, and that there is no differe nce between Schedules and other WTO obligations.
76
Therefore, no individual Member's practice should be preferred over that of any other Member.
30. The European Communities also notes th at the Appellate Body rejected, in EC – Computer
Equipment, the notion of "legitimate expectations" in th e context of customs classification, as well as
the argument that unilateral acts of WTO Members, and lack of reaction thereto, are relevant for
purposes of interpreting WTO law.
77
(ii) "Consistency" of Practice
31. The European Communities submits that the Panel misapplied the concept of "consistency" of
the alleged subsequent practice; the Panel's finding that the alleged practice is "consis tent" is based
on errors in respect of the object and the "geographic" and "systemic" scope of this practice, as well as
its duration.78 The European Communities argues that the Pa nel interpreted the term "salted" in two
multilateral treaties (namely, the Schedules attached to the WTO Agreement and the Harmonized
System) on the basis of the "subsequent practice" of only one Member, even though that Member
itself had already "disavowed" that practice.79

75European Communities' appellant's submission, pa ra. 136 (referring to Articles 7 and 8 of the
Harmonized System Convention).
77Ibid., para. 143.
78Ibid., para. 148.
79Ibid., para. 170.

32. The European Communities submits that the Pa nel failed to examine the "totality" of the
European Communities' legal system in its interpretation of heading 02.10.
80 The European
Communities notes that the Appellate Body has em phasized the need to consider implementing
legislation on customs classification as well as classification practice during the Uruguay Round
negotiations, and asserts that a series of contradic ting acts would not permit a finding of "consistent
practice".
81 Accordingly, the Panel should have taken into account relevant jurisprudence of the
European Court of Justice (the "ECJ") regardin g the scope of heading 02.10 of the European
Communities' Combined Nomenclature, a number of Explanatory Notes, and Binding Tariff
Information ("BTI") notices relating to headi ng 02.10, all of which emphasize the notion of
preservation under the European Communities' regime for classification of products under
heading 02.10. Although the Panel referred to minutes of European Communities' customs committee
meetings in 2002, it failed to consider the legisl ative measures that eventu ally resulted from those
meetings.
82
33. The European Communities argues that the Panel should not have limited its examination of
the consistency of practice to the treatment of frozen salted chicken cuts with a salt content of
between 1.2 and 3 per cent alone. Given that the interp retative issue to be resolved in this dispute is
the meaning of the term "salted" in the concession contained in heading 02.10, relevant practice with
respect to all kinds of salted meat subject to that heading should have been examined by the Panel.
34. The European Communities also chal lenges what it considers to be the Panel's failure to take
into account relevant export classification prac tice of Brazil and Thailand. The European
Communities contends that the definition in the Ha rmonized System of "customs tariff nomenclature"
is not limited to the purpose of "levying duties of Customs on imported goods" as suggested by the
Panel, and that the use of the Harmonized System is required for trade statistics for both imports and
exports.
83 According to the European Communities, neither Brazil nor Thailand argued that they used
a classification system for exports different from the Harmonized System, and the export statistics of
Brazil and Thailand, as well as of the United States , demonstrate that these countries accepted that
such salted meats fell under heading 02.07.84

82Ibid., para. 146 (referring to Panel Reports, paras. 7.269-7.270). See also European Communities'
appellant's submission, para. 164.
83Article 1(c) of the Harmonized System Convention; European Communities' appellant's submission,

35. In addition, the European Communities argues th at the jurisprudence of the International
Court of Justice demonstrates that subsequent practice is established on the basis of the actions of
high-level governmental representativ es who have "international obliga tions" in mind, rather than on
the basis of the daily ac tivities of customs officers. 85 The European Communities is of the view that
the Panel "confused" Article 31(3)(b) with the conc ept of State responsibility, under which countries
may be liable for acts of their officials.86
36. The European Communities also challenges the Panel for basing its finding of "consistency"
on classification decisions by European Communities' port authorities during a limited period, namely
between 1996 and 2002. The European Communiti es submits that the Panel failed to examine
"consistency over time" and that it should not have relied on customs classification practice that had
been corrected and thereby modified.87 If the Appellate Body considers that the classification practice
of WTO Members is relevant for the interpreta tion of heading 02.10, the European Communities
concludes that such practice would support its own position with respect to the meaning of the term
"salted", namely, as requiring salting for preservation.88
(d) Object and Purpose
37. The European Communities submits that the Pa nel incorrectly distinguished between the
object and purpose of the treaty and that of individual provisions of the treaty. The European
Communities asserts that the Panel should have ascert ained the object and purpose of Article II of the
GATT 1994, read in conjunction with heading 02.10 of the EC Schedule.
89
38. The European Communities also argues that the Panel erred in holding that "concessions
made by WTO Members should be interpreted so as to further the general objective of the expansion
of trade in goods and the subs tantial reduction of tariffs". 90 The Panel failed to adequately consider
that the true object and purpose of Article II of the GATT 1994 is the security and predictability of

85European Communities' appellant's submission, para. 165 and footnote 94 thereto.
86Ibid., para. 167.
87Ibid., paras. 168-170.
88Ibid., paras. 171-174. See also para. 219.
89Ibid., paras. 180-181. The European Communities relie s, in support of its argument, on Appellate
Body Report, US – Line Pipe , para. 81 (on the object and purpose of Article XIX of the GATT 1994);
Appellate Body Report, Chile – Price Band System , para. 234 (on the object and purpose of Annex 4 of the
Agreement on Agriculture ); and Appellate Body Report, EC – Computer Equipment , para. 84 (stating that
concessions provided for in a GATT Schedule are, by virtue of Article II:7 of the GATT 1994, part of the terms
of the treaty).

reciprocal market access arrangements.
91 This goal would be undermined if panels were allowed to
accord a "bias" towards a reduction in tariffs, and if the concessions in Members' Schedules were to
be interpreted on the basis of the subjectiv e views of certain exporting Members alone. 92 I n t h e
European Communities' view, such a "bias" would be inconsistent with Article 3.2 of the DSU.
39. In addition, the European Communities challe nges the Panel's finding that the notion of
"long-term preservation" is "uncertain" and thus in consistent with the objective of security and
predictability of tariff concessions.93 The European Communities considers that the terms "long-term
preservation" and "preservation" are not intrinsically uncertain, given their use under other headings
of the Harmonized System. The European Commun ities disputes that a customs official will face
uncertainty in applying the criterion of long-term pr eservation; in particular for a customs official
with access to tools of analysis, the "highly trad itional" products classifiable under heading 02.10 are
"recognizable" and "well-known". 94 Moreover, the Panel's finding of uncertainty in the notion of
"long-term preservation" is vitiated by its failure to a pply the same test to the alternative criterion of
"preparation", as proposed by Brazil and Thailand.
40. Finally, the European Communities argues that the Panel's own interpretation of
heading 02.10 undermines the objective of prot ecting and preventing circumvention of tariff
concessions negotiated and settled in trade nego tiations. The Panel ignored the European
Communities' argument that heading 02.10 does not have the object and purpose of securing market
access arrangements for frozen poultry, and that negotiating parties knew that a product would need to
be salted so as to ensure its preservation in order to qualify under heading 02.10.95
2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna
Convention
(a) Circumstances of Conclusion
41. The European Communities submits that the notion of "circumstances of [a treaty's]
conclusion" within the meaning of Article 32 of the Vienna Convention should be interpreted
narrowly. Drawing on academic commentators 96, the European Communities argues that

91European Communities' appellant's submission, para s. 184-188 (referring to Appellate Body Report,
EC – Computer Equipment, para. 82; and Appellate Body Report, US – Gambling, para. 189).
92Ibid., para. 189.
94Ibid., para. 207.
95Ibid., paras. 212-218.
96Yasseen, supra, footnote 70, p. 93.

circumstances of a treaty's conclusion must have directly influenced the common intentions of all
parties to the treaty.97 The "multilateral aspect" of the circum stances of a treaty's conclusion has also
been emphasized by the Appellate Body, suggesting a "stringent" threshold for using "practice" of
Members as supplementary means for interpretation of WTO law. 98 In this respect, the European
Communities also considers relevant its arguments relating to "subsequent practice", including the
need for deference to the formal pr ocedure under Article IX:2 of the WTO Agreement and the need
for such practice to demonstrate a high degree of consistency.99
42. The European Communities does not dispute th at customs classification law and practice
prior to and during negotiations of a treaty may quali fy as "circumstances of [a treaty's] conclusion".
However, the European Communities asserts that th e Panel contravened the explicit guidance of the
Appellate Body in EC – Computer Equipment to the effect that the classification practice of the
European Communities must not be considered sep arately from its customs legislation; that
classification practice of other WTO Members must also be taken into account; that practice
regarding a tariff heading must include the interpreta tion of that heading "in all circumstances"; and
that such practice "must have endured".
100
43. The European Communities also challenges th e Panel's observations on the timing of the
"circumstances". According to the European Co mmunities, a "circumstance" in the form of a
"condition relating to a negotiating part y" must have been an objective fact, evident to all negotiators
at the time, and must be analyzed on a case-by-case basis.101
44. Finally, the European Communities challeng es the Panel's concept of "constructive
knowledge", whereby all negotiating parties are deem ed to have knowledge of a particular act or
instrument of a WTO Member once it has been published. 102 The European Communities also
disagrees with the Panel that an event that is de emed to be known by the participants in the
negotiations could have influenced the negotiators and is relevant for the interpretation of a treaty
under Article 32. The European Communities argu es that "deemed knowledge" cannot substitute the

97European Communities' appellant's submission, paras. 228-230.
98Ibid., para. 233 (referring, inter alia, to Appellate Body Report, EC – Computer Equipment, para. 93).
99Ibid., paras. 234-235.
100Ibid., para. 240.
101Ibid., paras. 245-253. The European Communities relies on Appellate Body Report, US – Gambling,
footnote 244 to para 196; Panel Report, Mexico – Telecoms , para. 7.44; Appellate Body Report, Canada –
Dairy, para. 139; Appellate Body Report, EC – Computer Equipment , para. 92; and Yasseen, supra,
footnote 70, p. 90.

need to demonstrate a "direct link" between a circumstance and the common intentions of the
parties.
103
(b) Characterization of Relevant Law of the European Communities
45. The European Communities submits that the Pa nel mischaracterized the law and practice of
the European Communities, in particular EC Regul ation 535/94, and that this mischaracterization
amounts to a distortion of facts contrary to Article 11 of the DSU. 104 The European Communities
challenges the Panel's use of this law and classification practice on the grounds that there was no trade
in the products at issue at the time of the ne gotiations. The Panel should have considered the
"totality" of the European Communities' legal system, including Section Notes, Chapter Notes,
relevant Subheading Notes, and Explanatory Not es of the Combined Nomenclature, as well as the
classification opinions of the European Communities and judgments of the ECJ.105
46. The European Communities challenges the Panel's interpretation of the ECJ's Gausepohl
judgment106 as not being necessarily governed by the principle of "long-term preservation". 107
According to the European Communities, the Pa nel erred in finding that EC Regulation 535/94
"superseded" the long-term preservation criterion in heading 02.10 of the Combined Nomenclature as
recognized in the Gausepohl judgment.108 A Commission Regulation cannot override an
interpretation given by the ECJ to the Combined Nomenclature, where that Nomenclature is
implementing the Harmonized System. The Eur opean Communities argues that the Panel also
incorrectly "dismissed" relevant Explanatory No tes to the Combined Nomenclature, although these
Notes remained relevant for assessing classification pr actice even after the insertion of the Additional
Note to the Combined Nomenclature through EC Regulation 535/94.109
47. The European Communities submits that, if the practice of all participating treaty parties must
be taken into account when considering "circumstanc es of conclusion", this should extend to practice
regarding all meat that is "salted, in brine, dried or smoked". 110 In this respect, the Panel erred in

104Ibid., para. 288.
105Ibid., para. 273.
106European Court of Justice, Judgment, Gausepohl-Fleisch GmbH v. Oberfinanzdirektion Hamburg ,
Case C-33/92, ECR [1993] I-3047.
107European Communities' appellant's submission, pa ras. 275-276 (referring to Panel Reports,
paras. 7.398-7.400).
109Ibid., para. 286.
110Ibid., para. 294.

rejecting a United States' customs classification ru ling of 1993 regarding salted beef as evidence that
heading 02.10 covers meat salted for preservation.
48. The European Communities is of the view that the Panel failed to determine properly the
scope of relevant "circumstances" within the mean ing of Article 32 as being those circumstances that
could have influenced the common intentions of th e parties with respect to heading 02.10 of the
EC Schedule.111 The Panel failed to consider that the principle of preservation (as reflected in a
United States classification ruling of 1993, and in European Communities' judgments and Explanatory
Notes since the early 1980s) "prevailed" throughout the entire duration of the Uruguay Round
negotiations in the minds of the negotia tors with respect to heading 02.10. 112 This practice was
"confirmed through trade statistics which showed th at only limited trade entered under heading 02.10,
whereas the contentious issue was fresh, chilled and frozen [poultry] meat".113
49. The European Communities also argues that the results of tariff negotiations between 1986
and 15 December 1993 could not be altered by unilateral measures of one WTO Member. 114 An act
taken during the so-called verification pe riod prior to the final adoption of the WTO Agreement could
be of relevance, but compelling evidence would be required to prove that the negotiators had taken
note of such act. No such evidence exists with respect to EC Regulation 535/94, in particular,
because of its complex legal relationship with pre-existing ECJ case-law and Explanatory Notes to the
Combined Nomenclature, as well as the absence of an y discussion of this Regulation, or the scope of
heading 02.10, at any point during the negotiations, the verification period, or thereafter.
50. The European Communities furt her challenges the Panel's finding that tariff classification
laws and practice that do not amount to "subsequent practice" under Article 31(3)(b) may nonetheless
be relevant as supplementary mean s of interpretation under Article 32. 115 In the European
Communities' view, a "high standard of consistency" would have to be demonstrated for such practice
also to be relevant under Article 32. 116 In any event, no exporter or Member State of the European
Communities has challenged in the Eu ropean Communities' legal system the measures that "rectified"

112Ibid., para. 306.
113Ibid., para. 307.
114Ibid., para. 304.
115Ibid., paras. 312-314 (referring to Panel Reports, para. 7.422).
116Ibid., para. 313.

the "temporary circumvention" of the application of heading 02.10.
117 Moreover, neither Brazil nor
Thailand has sought a classification ruling from the WCO.
51. Finally, the European Communities disagrees w ith the Panel that the Panel's conclusions
under Article 32 were a "confirmation" of the meani ng of heading 02.10 that it had derived from the
application of Article 31. 118 According to the European Comm unities, the Panel's conclusions under
Article 32 are formally different and have a differe nt scope than those under Article 31, and the Panel
used Article 32 not to confirm, but to alter th e meaning it had derived from its application of
Article 31 of the Vienna Convention.
B. Arguments of Brazil – Appellee
1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna
Convention
(a) Ordinary Meaning
52. Brazil argues that the "factual context" of the term "salted", as identified by the Panel, is not
only relevant, but must be taken into account in in terpreting the term "salted" in heading 02.10 of the
EC Schedule. In the light of the European Commun ities' arguments about the nature of "salted" meat
products, the Panel had to determ ine whether the facts involving salted meat in this dispute
corresponded to what the Panel had concluded was the ordinary meaning of the term "salted".
Although "factual context" is not re ferred to explicitly in the rules of treaty interpretation as codified
in the Vienna Convention , such an analysis is included within a panel's functions as set out in
Article 11 of the DSU. Brazil contends that a treat y interpreter must know the facts of a case in order
to properly apply the law to that case.
53. Brazil also rejects the European Communities' allegations that the Panel violated Article 11 of
the DSU by distorting the available evidence on the r ecord. With respect to the Panel's finding that
even small quantities of salt have a preservative effe ct on meat, Brazil argues that this conclusion was
primarily based on technical literature presented by Brazil, rather than on the evidence of the
European Communities' expert. According to Br azil, the European Communities is, in effect,
questioning the Panel's factual findings, in partic ular the Panel's appreciation of a given piece of
evidence. In any event, the Panel did not misrep resent the statement of the European Communities'
expert.

118Ibid., paras. 315-318 (referring to Panel Reports, paras. 7.332 and 7.423).

54. With respect to the Panel's finding that certain types of meat falling under heading 02.10 may
require additional means of preservation, Brazil main tains that the reasons that such meats require
preservation are of "no relevance to the point at issue" 119; regardless of whether spoilage is due to the
effect of slicing (growth of moulds and yeast), as argued by the European Communities, or due to
rancidity, the fact remains that further preservation is required to prevent such spoilage. Finally,
contrary to the European Communities' arguments, Brazil asserts that th e evidence on the record
supports the Panel's finding that a product preserved by salt for relatively short periods of time is not
necessarily precluded from qualifying under heading 02.10 of the EC Schedule. Brazil submits that it
"seems a fair assessment [of the Panel] that sliced non-refrigerated meat is preserved by salt for a
shorter period of time than sliced refrigerated meat".
120
(b) Context
55. Brazil rejects all of the European Communitie s' arguments challenging the Panel's findings
regarding the "context" of the term "salted". Brazi l argues that the term "in brine" is broader than
"preservation", such that, even if "preservation" may be "one of the possible meanings ascribed to the
term" "in brine", it is not the exclusive meaning. 121 According to Brazil, the fact that heading 08.12
refers to "brine" as a "preservative solution" do es not lend support to the European Communities'
argument that the term "in brine" exclusively re lates to preservation. Brazil refers to the WCO
Secretariat's letter to the Panel, which stated that, in the absence of an explicit provision that the term
"preserved" has a "certain influence" on head ing 02.10, that term has no relevance for the
classification of salted meat under heading 02.10.122
56. Brazil furthermore argues that preparation, and not preservation, is the "exclusive
distinguishing characteristic common to all terms in heading 02.10".123 Brazil alleges that the terms in
heading 02.10 have ordinary m eanings other than preservation and that the terms "dried" and
"smoked" in relation to food and meat do not exclusively deal with preservation.
57. Next, Brazil argues that the structure of Chapter 2 of the Harmonized System supports
Brazil's interpretation that heading 02.10 refers to preparation, rather than preservation. Brazil
disagrees with the proposition that refrigeration is the distinguishing feature of headings 02.01
to 02.08. Rather, heading 02.10 is an exception that covers all types of meat that have been salted, put

120Ibid., para. 75.
121Ibid., para. 83.
123Ibid., heading II.B.2.

in brine, dried, or smoked. The European Co mmunities is also wrong, according to Brazil, in
suggesting that the absence of a reference to refrigeration under heading 02.10 implies that
refrigeration is not significant for that heading. Brazil argues that the reason refrigeration is not
referred to in heading 02.10 is "because what gives the product its character ... is simply that [this
product] has been salted, brined, dried or smoked".
124 Brazil also refers to the Explanatory Note to
Chapter 2 of the Harmonized System and argues that the reference there to fresh meat "packed with
salt as a temporary preservative during transport" does not support the European Communities'
position because preparing with salt is different from packing with salt.125 "Preparing" with salt,
according to Brazil, entails a process that leaves meat in a state different from its natural state.
58. Finally, Brazil takes issue with the European Communities' arguments regarding the historical
basis of heading 02.10. Brazil argues that refrige ration existed, and was provided for, in the 1937
Geneva Draft Nomenclature. Brazil also contends that the European Communities misrepresents the
subject of Item 18 of the Geneva Draft Nomencla ture. Contrary to the European Communities'
arguments, Item 18 does not refer to slightly salted, dried, and smoked meat, but rather to meat that
has been "simply prepared". Brazil also disagrees with the European Communities' contention that
the phrase "otherwise simply prepared" in Item 18 is of no significance. The fact that cooked meats
were included under Item 18—together with sal ting, putting in brine, drying, and smoking—
demonstrates that all such meats were simple prep arations, and that Item 18 was not intended for the
purpose of preservation. Brazil also contends that th e fact that the term "cooked or otherwise simply
prepared" was moved from Chapter 2 to Chapter 16 in the Brussels Nomenclature "does not change
the fact that [the Harmonized System] Notes to Chapter 16 and [the Harmonized System] Explanatory
Notes to Chapter 2 expressly refer to the processes listed in Chapter 2 as 'prepared or preserved'".126
(c) Subsequent Practice
59. Brazil agrees with the Panel's finding that, in the present case, the relevant subsequent
practice is the concordant, common and consiste nt sequence of acts by European Communities'
customs authorities, occurring subsequent to the entry into force of the EC Schedule, which
establishes the agreement of WTO Members regardi ng the interpretation of the concession contained
in heading 02.10 of the EC Schedule.

125Ibid., para. 102 (referring to the Explanatory Note to Chapter 2 of the Harmonized System).
126Ibid., para. 116.

(i) "Concordant" and "Common" Practice
60. Brazil submits that the European Communities is incorrect in suggesting that the relevant
question before the Appellate Body in this appeal is whether acts of one WTO Member that are met
with silence by other WTO Members can qualify as "subsequent practice". Brazil acknowledges that
the classification practice of other Members may be relevant in the interpretation of tariff concessions
of a certain Member's Schedule; however, gi ven that the European Communities was the only
Member that imported frozen salted chicken cuts a nd had a specific criterion for "salted meat" under
heading 02.10 of its Combined Nomenclature , the classification practice of the European
Communities is the only relevant practice in this case.127 Brazil also argues that the relevant acts were
not objected to because the temporal proximity between the publication of EC Regulation 535/94 and
the conclusion of the Uruguay Round resulted in "constructive knowledge".128
61. Brazil submits that the European Communities has confused the requirement that parties be in
agreement on the interpretation of a treaty with the subsequent practice that consolidates that
agreement. According to Brazil, Article 31(3)(b) of the Vienna Convention does not specify the
number of parties that must engage in the relevant practice; rather, the requirement is that the
subsequent practice must establish the agreement of the parties, which, in this case, is established as
a fact.
62. Brazil submits that the European Communities' understanding of the term "salted" was known
to all WTO Members when tariff concessions were ne gotiated, and was accepted by them when they
signed the WTO Agreement ; the authority of the Ministerial Conference and the General Council
under Article IX:2 of the WTO Agreement to adopt interpretations of that Agreement must be
distinguished from the authority of adopted panel re ports as considered by the Appellate Body in
Japan – Alcoholic Beverages II.129 Brazil finds support in the Appellate Body Report in Chile – Price
Band System for its view that a Member's Schedule imposes obligations on the Member who made the
concession and not on all Members. 130 According to Brazil, the scheduling practice of only one
Member may be considered relevant in the inte rpretation of its tariff concession, as long as that
practice amounts to subsequent practice.131

129Ibid., para. 130.
130Ibid., paras. 133-134 (referring to Appellate Body Report, Chile – Price Band System, para. 272).
131Ibid., para. 135.

63. Brazil also disputes the European Communities' argument that there is no difference between
a WTO Member's Schedule and other WTO obligations . Brazil refers to the Appellate Body Report
in EC – Computer Equipment as support for the proposition that, although all Members must agree
on the scope of a tariff concession made by one Member, that tariff concession applies only to that
one Member that made the concession. Tariff concessi ons may be identical in some cases, but the
obligation under a concession is different from ot her WTO obligations, because it is unique to the
Member that made it.
132 In Brazil's view, the European Communities, through EC Regulation 535/94
and the inclusion of Additional Note 7 in the Co mbined Nomenclature, announced to its negotiating
partners in the Uruguay Round the definition and scope of its tariff concession under heading 02.10 of
its Schedule.
64. In addition, Brazil disagrees with the European Communities that the Panel's approach to
establishing "subsequent practice" is contrary to the WTO Members' intention that Schedules should
follow the Harmonized System. Although Schedules should be based on the Harmonized System,
they are not identical to it, b ecause the Harmonized System was the starting point, but not necessarily
the end result, of the negotiation. Brazil argues that parts of the EC Schedule are based on the
Combined Nomenclature, which is, in turn, partly based on the Harmonized System and partly based
on the subheadings of the Combined Nomenclature and other provisions. One such provision is
Additional Note 7 to the Combined Nomenclature, which provides for a definition of "salted meat"
that is unique to the EC Schedule and that does not exist in the Schedule of any other Member.
133
According to Brazil, that definition is "aligned with the terms and structure" of the Harmonized
System.134 In contrast, the subsequent introduction th rough the challenged measures of the concept of
"preservation" into heading 02.10 modifies and limit s the Harmonized System. Brazil submits that
the predictability and stability of the multilateral Sc hedules would be undermined if the term "salted"
in heading 02.10 of the EC Schedule were found to re late exclusively to a process that ensures "long-
term preservation".135

133Ibid., para. 147.
134Ibid., para. 149.
135Ibid., para. 150.

(ii) "Consistency" of Practice
65. Brazil agrees with the Panel's assessment of "consistency" of the relevant practice. 136
Contrary to the European Communities' assertion, the Panel did not fail to consider the European
Communities' practice concerning products fallin g under heading 02.10 other than salted frozen
chicken cuts as well as the practice of Brazil, Tha iland, China, and the United States relating to
heading 02.10. In this regard, Brazil points to th e Panel's consideration of a BTI relating to dried
salted ham.137 Brazil also asserts that the European Co mmunities failed to provide any other evidence
in support of its contention that some customs o ffices did not classify the products at issue under
heading 02.10.
66. Brazil disagrees with the European Communitie s' submission that "subsequent practice"
generally involves government representatives of a hi gher status than customs officials. The Panel
treated correctly the European Co mmunities' classification practice in the light of the Appellate
Body's finding in EC – Computer Equipment that it is the customs classification practice of the
importing Member that is important in the interpretation of tariff concessions.138
67. Brazil further submits that the Panel did not fail to examine the totality of the European
Communities' law and jurisprudence surrounding the interpretation of heading 02.10. Brazil argues
that the instruments upon which the European Communities would have the Panel rely largely
predate the EC Schedule and cannot be considered as "s ubsequent practice" within the meaning of
Article 31(3)(b) of the Vienna Convention .139 Brazil further notes that minutes of European
Communities' customs committee meetings in 2002 indicate that the European Communities
deliberately did not include a reference to "long-te rm preservation" in EC Regulation 535/94. As to
consistency over time, Brazil argues that no BTI or any type of supporting material or documentation
was produced by the European Co mmunities in support of its argument that classification by its
customs authorities was not consistent. Brazil also agrees with the Panel that post-2002 practice does

136Brazil's appellee's submission, paras. 151-169.
137Ibid., para. 153 (referring to European Communities' response to Question 53 posed by the Panel,
Panel Reports, p. C-92).
138Ibid., paras. 165-166 (referring to Appellate Body Report, EC – Computer Equipment , paras. 93
and 95-96).
139Ibid., paras. 160 and 162-164 (referring to European Communities' appellant's submission,
paras. 159-162; and Panel Reports, para. 7.393). These instruments include the ECJ's Dinter and Gausepohl
judgments and the Explanatory Notes to the Combined Nomenclature.

not undermine the Panel's finding that the clas sification practice by the European Communities
between 1996 and 2002 was consistent.
140
68. Brazil agrees with the Panel's treatment of the export and import classification practice of
Brazil and Thailand. 141 Brazil states that export classification practice is less rigorous than import
classification practice because, usually, export du ties are not assessed and traders, rather than
authorities, often undertake the actual classification. Moreover, Brazil has never imported the
products at issue and, even if it had done so, it is the practice in the application of heading 02.10 in the
EC Schedule that is at issue. 142 Brazil also supports the Panel's treat ment of the alleged "practice" of
other WTO Members relating to heading 02.10. B ecause the evidence before the Panel was limited
and concerned products that are not the same or id entical to the products at issue, the Panel could
draw no conclusions from that information.143
(d) Object and Purpose
69. Brazil submits that the Panel did not incorrectly distinguish between the object and purpose of
the WTO Agreement and the GATT 1994, on the one hand, and that of the specific heading in the
EC Schedule, on the other hand. Brazil argues that the object and purpose of the treaty is the relevant
inquiry, and that the tariff concession containe d in heading 02.10 of the EC Schedule is part of the
terms of that Schedule, which is, in turn, an integral part of the GATT 1994, pursuant to Article II of
the GATT 1994.
70. Brazil also submits that the European Co mmunities misconstrues the Panel's finding by
arguing that the Panel's interpretation was "bias[ed]" toward the reduction of tariffs, instead of being
based on the security and predictability of tariff concessions. 144 Brazil points out that the wording of
the Panel's reasoning flows from the language in the respective preambles to the WTO Agreement
and the GATT 1994.
71. Brazil argues that the notion of "long-term pre servation", used by the European Communities
to define the meat classifiable under heading 02.10, would introduce a "great deal" of uncertainty,
especially if the test to be applied at customs is whether the products are "w ell-known" or "instantly

142Ibid., para. 155.
143Ibid., paras. 157-158 (referring to Panel Reports, para. 7.288).

recognizable".145 Brazil submits that the European Comm unities presented no binding law or act to
the Panel with a clear definition for the notion of "long-term preservation" 146, and that the European
Communities also failed to indicate where in the Harmonized System the notion of "long-term
preservation" in relation to meat was to be foun d. Brazil also disagrees with the European
Communities that negotiating parties knew that a m eat product had to be salted for preservation to
qualify under heading 02.10; rather, the knowledge of the parties was that heading 02.10 of the
EC Schedule related to meat deeply and homogeneous ly impregnated with a salt content of not less
than 1.2 per cent by weight.
2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna
Convention
72. Brazil proposes that, if the Appellate Body finds that the European Communities'
classification practice of the products at issue unde r heading 02.10 does not amount to "subsequent
practice" under Article 31(3)(b), it should consider the classification practice as supplementary means
of interpretation under Article 32. Brazil argues th at supplementary means of interpretation are not
limited to the "preparatory work" of the treaty and the "circumstances of its conclusion", but can
include evidence of subsequent practice.147
(a) Circumstances of Conclusion
73. Brazil disagrees with the European Communities that, for "circumstances of [a treaty's]
conclusion" to be relevant, they must have directly influenced the common intention of all the
parties to the treaty. Brazil refers to the Appellate Body statement in EC – Computer Equipment that
customs classification practice of one of the parties may be of relevance and that the importing
Member's practice is of "great importance" .148 Even though the Appellate Body considered the
classification practice of exporting Members to be rele vant in that case, the present case is different in
this respect because there was no customs classifica tion practice of Brazil, Thailand, or European
Communities' customs authorities regarding the products at issue during the Uruguay Round.
Furthermore, in the dispute in EC – Computer Equipment , the relevant part of the Combined
Nomenclature did not contain a special criterion to define the product at issue; by contrast, in the
present case, EC Regulation 535/94 inserted Additiona l Note 7 in the Combined Nomenclature with a

145Brazil's appellee's submission, para. 202 (refe rring to European Communities' appellant's
submission, para. 207).
146Ibid., para. 194.
147Ibid., paras. 207-209 (referring to Sinclair, supra, footnote 36, p. 138).

special definition for "salted meat" found in heading 02.10.
149 Thus, according to Brazil, in the
present case, the classification practice of the importing Member is the most, if not the only, relevant
practice.
74. With respect to the Panel's concept of "constructive knowledge", Brazil argues that a
"circumstance" need not be evident to all the nego tiators at the time of conclusion and finds support
for its view in Appellate Body case-law and public international law literature. 150 Brazil submits that
the BTIs that were found by the Appellate B ody to be "circumstances of conclusion" in EC –
Computer Equipment could not have been evident to all the negotiators.
(b) Characterization of Relevant Law of the European Communities
75. Brazil submits that the Appellate Body should not, as requested by the European
Communities, disregard the customs legislation enact ed by the European Co mmunities at the time of
the conclusion of the Uruguay Round on the grounds that there was no trade in frozen salted chicken
cuts at that time. Brazil contends that legislation defining the products at issue for the purpose of the
European Communities' Combined Nomenclature is a relevant "circumstance".
76. In Brazil's view, the Panel correctly interpreted the Dinter and Gausepohl judgments of the
ECJ.151 Brazil argues that the Dinter judgment did not deal specifically with the scope of
heading 02.10 and provides only general comments regarding Chapter 2 of the Combined
Nomenclature, without any direct relevance to this case. Brazil also submits that the Panel adequately
dealt with the Gausepohl judgment. In Brazil's view, the ECJ found no support in the Harmonized
System for the conclusion that "salting", unde r heading 02.10, is a process for preserving meat.
152 In
contrast, EC Regulation 535/94 introduced an object ive criterion (deep salt impregnation of 1.2 per
cent) for salted meat, and did not refer to "long-term preservation". As to the European Communities'
argument that EC Regulation 535/94 cannot change the ECJ's interpretation of a Harmonized System
definition, Brazil submits that the ECJ does not have the authority to determine the meaning of the
Harmonized System.153 Even if the European Commission took the ECJ's Gausepohl judgment into

150Ibid., paras. 224-227 (referring to European Commun ities' appellant's submission, para. 252;
Appellate Body Report, US – Gambling , footnote 244 to para. 196; Appellate Body Report, EC – Computer
Equipment, paras. 92 and 94; and Panel Report, Mexico – Telecoms, para. 7.68).
151European Court of Justice, Judgment, Dinter v Hauptzollamt Köln-Deutz , Case C-175/82, ECR
[1983] 969; ECJ Judgment Gausepohl, supra, footnote 106.
153Ibid., para. 257.

account in EC Regulation 535/94, that judgment suggest s that deep impregnation with 1.2 per cent of
salt meets the ECJ's understanding of "long-term preservation".154
77. Brazil disagrees with the European Communities that EC Regulation 535/94 is not relevant as
"circumstance" of conclusion because the negotiatio ns on the EC Schedule we re concluded prior to
the period of verification of the Schedules. 155 According to Brazil, the European Communities
acknowledges that not all negotiators need to have actual knowledge of an act. Brazil submits that
acceptance of the definition of "salted meat" in EC Regulation 535/94 during the process of
verification of the Schedules can be deduced from the lack of objections.156
78. Finally, Brazil disagrees with the European Co mmunities that the Panel used Article 32 to
alter its conclusion concerning the meaning of the te rm "salted" that it had arrived at in applying
Article 31. According to Brazil, the Panel conc luded under Article 31 that the term "salted" in
heading 02.10 is a broad term that is not limited to the notion of "long-term preservation"; under
Article 32, the Panel confirmed that EC Regulation 535/94 did not provide that salting must be for
"long-term preservation".
C. Arguments of Thailand – Appellee
1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna
Convention
(a) Ordinary Meaning
79. Thailand submits that the Panel properly examined the factual context for the consideration of
the ordinary meaning of the term "salted". Thaila nd refers to the principle under Article 31(1) of the
Vienna Convention that "a treaty shall be interpreted in good faith", and claims that, under "factual
context", the Panel took into account consequences that " normally" and " reasonably" flow from the
text.157 In Thailand's view, if the Panel's analysis of the "ordinary meaning" had eschewed "factual
context" and instead had included only dictionary definitions, the result would have been too

155Ibid., paras. 263-276 (referring to European Communities' appellant's submission, paras. 301).
156Ibid., para. 276.
157Thailand's appellee's submission, paras. 13-14 (quoting Sinclair, supra, footnote 36, p. 121).
(emphasis added by Thailand)

restrictive and also inconsistent with prior Appella te Body rejections of a mechanical reliance on
dictionaries.
158
80. Thailand also challenges the European Communitie s' claim that the Panel failed to make an
objective assessment of the facts in accordance with Article 11 of the DSU. Thailand argues that an
appellant faces a high hurdle to establish that a panel has committed an "egregious error" in the
appreciation of evidence, particularly with respect to scientific evidence.
159 Contrary to the allegation
of the European Communities, the Panel's conclusi ons with respect to the ordinary meaning of
"salted" were not based on the Panel's appreciation of the Eur opean Communities' expert's opinions.
Thailand further submits that the European Commun ities has not established that the Panel failed to
make an objective assessment of the scientific eviden ce. With respect to the Panel's finding that a
3 per cent salt content may prevent spoilage in me at, Thailand argues that the Panel did not make
reference to a product with a 3 per cent salt conten t that is not chilled; rather, the Panel was
discussing a meat product that was "raw and chilled".
81. With respect to the European Communities' claim that it is the slicing of the preserved
product, and not the salt content, as the Panel found, that makes necessary the use of additional means
of preservation under heading 02.10, Thailand submits that the basis for this claim of error is
"unclear".160 This is because, before the Panel, the European Communities did not contest the fact
that meats such as Parma ham, prosciutto, and jamó n serrano require further means of preservation.
Thailand further argues that, in making the finding that "a product preserved by salt for relatively
short periods of time is not necessarily precluded from qualifying under heading 02.10", the Panel did
not rely on evidence by the European Communities' expert alone, but also relied on the European
Communities' statements acknowledging this fact. 161 Finally, Thailand submits that, even if the
Appellate Body were to find that the Panel di d not conduct an objective assessment of the facts
contested by the European Communities, this woul d not affect the overall conclusions of the Panel
with respect to the ordinary meaning of the term "salted".

158Thailand's appellee's submission, paras. 16-17 (referring to Appellate Body Report, US – Gambling,
para. 166; and Appellate Body Report, US – Offset Act (Byrd Amendment), para. 248).
159Ibid., paras. 21-23 (referring to Appellate Body Report, US – Steel Safeguards , para. 499; and
Appellate Body Report, EC – Hormones, paras. 133 and 138).
160Ibid., para. 27.

(b) Context
82. Thailand argues that the European Communities has failed to establish that the term "in brine"
refers exclusively to preservation. The European Communities' argument that the term "in brine"
refers to preservation is based solely on its defin ition of the verb "to salt", and, as such, the argument
does not concern the ordinary meaning of the te rm "in brine". Moreover, in Thailand's view,
heading 08.12, which refers to brine as a "preserva tive solution", makes it clear that all the processes
listed in that heading are "for the purpose of provisionally preserving the products".162
83. Thailand also submits that the Panel did not fail to take into account the distinguishing
characteristics of the terms "salted, in brine, drie d or smoked" in heading 02.10. The dictionary
definitions of these terms include, but are not limite d to, the concept of preservation. The ordinary
meaning of these terms for meat products, in "today 's context", is related to the taste and unique
characteristics of the products, rather than the le ngth of time for which the products are preserved. 163
Thailand also rejects the argument that the special na ture of the meats subject to heading 02.10 finds
support in the nature of the meats covered by Chap ter 16; rather, the Chapter Note to Chapter 16
makes it clear that the processes specified in Chapter 2 are for preparation or preservation.164
84. Thailand agrees with the European Communitie s that, for heading 02.10, the issue of
refrigeration is of little or no importance, but subm its that this is because preservation is not a
determinative element for the classification of pr oducts under this heading. Instead, according to
Thailand, the structure of the headings indicates th at products may be divided into either fresh or
preserved by a process (chilled or frozen) or prepared (salted, in brine, etc); the determinative
element of heading 02.10, in Thailand's view, is prep aration. Heading 02.10 covers all types of meat
and offal, as long as that meat and offal is salted, in brine, dried, or smoked. All such meat is
classified under heading 02.10, regardless of the stat e in which it is presen ted—for instance, fresh,
chilled, or frozen. Thailand also rejects the Eu ropean Communities' argument based on the words
"temporary preservative" in the Explanatory Note to Chapter 2; according to Thailand, the European
Communities provides no evidence to support its assertion that packing fresh meat with salt inevitably
affects the product's characteristics.

163Ibid., para. 39.
164Ibid., para. 41.

(c) Subsequent Practice
85. Thailand submits that the Panel properly cons idered the classification practice of the
European Communities from 1996 to 2002 as "subsequent practice" within the meaning of
Article 31(3)(b) of the Vienna Convention.
(i) "Common" and "Concordant" Practice
86. Thailand considers that the position of the European Communities w ith respect to the
"common" and "concordant" nature of subsequent practice contradicts the approach of the Appellate
Body in EC – Computer Equipment and in EC – Export Subsidies on Sugar , where the Appellate
Body attached importance to the practice of the European Communities when interpreting the
EC Schedule.
165 According to Thailand, in any event, th e weight given to subsequent practice by the
Panel was not dispositive for its findings that the pr oducts at issue were covered by the concession in
heading 02.10.
87. Thailand submits that the Panel's findings are not inconsistent with the commentary of the
ILC regarding subsequent practice.166 According to the ILC, it is not necessary for all signatories to
a treaty to have engaged in a particular practice for it to qualify as subsequent practice; rather it is
sufficient that the parties have accepted the practice. Therefore, Thailand submits that the practice
of even one Member may qualify as "subsequent prac tice". On this basis, it was reasonable for the
Panel to conclude that the classification practice of the European Communities alone with respect to
the products at issue could be considered as subseque nt practice. In addition, Thailand states that in
public international law, acceptance may be deduced fr om a party's reaction or lack of reaction to the
practice at issue.167
88. Thailand rejects the European Communities' argu ment that "subsequent practice" within the
meaning of Article 31(3)(b) requires "overt acts" that are explicitly "adopted" by a "large majority" of
the WTO Membership. 168 In Thailand's view, the European Communities misunderstands the
distinction that the Vienna Convention draws between a "subsequent agreement" in Article 31(3)(a)

165Thailand's appellee's submission, paras. 60-62 (referring to Appellate Body Report, EC – Computer
Equipment, para 93; and Appellate Body Report, EC – Export Subsidies on Sugar, para. 187).
166Ibid., paras. 65-70 (referring to European Communities' appellant's submission, para. 117).
167Ibid., para. 69 (referring to Yasseen, supra, footnote 70, p. 49, para. 18; and A. Aust, Modern Treaty
Law and Practice (Cambridge University Press, 2000), pp. 191-193).
168Ibid., para. 71 (referring to the European Communities' argument that such acts are "interpretations
under Article IX:2 of the WTO Agreement , Decisions by the [Harmonized System] Committee or Council
relating to the interpretation of the [Harmonized System ] nomenclature, or acts that result from an equally
rigorous procedure". (European Communities' appellant's submission, para. 144))

and "subsequent practice" in Article 31(3)(b). Th ailand also refers to instances where the Appellate
Body and panels found that certain acts and practic es did not amount to "subsequent practice" within
the meaning of Article 31(3)(b), and submits that those cases may be distinguished from the present
case on their facts.169
89. Thailand agrees with the Panel that it makes "pra ctical sense especially in the context of
GATT schedules that are particular to each WTO Member" to attach "importance [to] the
classification practice of the importing Member whose schedule is being interpreted".
170 According to
Thailand, the Appellate Body Report in EC – Computer Equipment supports the view that a
Member's Schedule is not the same as a generally applicable treaty provision of the GATT 1994 or
other WTO agreements. 171 In this regard, Thailand notes the Panel's factual finding that "the
European Communities is apparently the only importing WTO Member with any practice of
classifying the products at issue."172 Thailand also challenges the European Communities' reliance on
the Harmonized System, and submits that there is no legal basis to equate the interpretation of the
EC Schedule with an interpretation of the Harm onized System. The Panel's analysis of the
EC Schedule does not purport to provide a definitiv e interpretation of the Harmonized System, nor
does it undermine the interpretative role to be played by the Harmonized System Committee and
Council.173
(ii) "Consistency" of Practice
90. Thailand argues that the Panel correctly applied the concept of "consistency" in finding that
the European Communities' classi fication practice amounted to "subsequent practice" within the
meaning of Article 31(3)(b). Thailand asserts th at the present case can be distinguished from
EC – Computer Equipment on the basis that the classification practice of the European Communities
in the present case was consistent over a period of si x years; this is different from the "clearly
inconsistent classification practice among EC Member States" in the earlier case. 174 Thailand further
recalls the observation of the Panel that th e European Communities presented no evidence

169Thailand's appellee's submission, paras. 72-74 (referring to Appellate Body Report, Japan –
Alcoholic Beverages II , pp. 13-14, DSR 1996:I, 97, at 106-107; Appellate Body Report, US – Gambling ,
para. 193; Panel Report, US – FSC , para. 7.75; and Panel Report, Canada – Patent Term , footnote 48 to
para. 6.89).
170Panel Reports, paras. 7.253-7.254; Thailand's appellee's submission, para. 76 (referring to European
171Thailand's appellee's submission, para. 76 (referring to European Communities' appellant's
173Ibid., para. 90.

demonstrating that the products at issue had been classified under heading 02.07 of the EC Schedule.
According to Thailand, the Panel was not required to examine classi fication practice with respect to
all kinds of salted meat subject to heading 02.10; only salted chicken cuts are relevant, but, in any
event, the Panel analyzed a broader range of products falling under heading 02.10.
91. Thailand submits that the Panel did not "delib erate[ly] exclu[de]", as suggested by the
European Communities, the export classification practice of Thailand and Brazil.
175 Indeed, the Panel
did consider the classification practice of Brazil, Thailand, the United States, and China in its analysis,
and made the factual conclusion that the evidence on their practices was too limited. Thailand asserts
that the European Communities, in this respect, asks the Appellate Body to go beyond an examination
of legal questions. In addition, as Thailand does not have a tariff concession on frozen boneless
chicken cuts for export, and does not impose e xport duties on this product, the Panel properly
concluded that Thailand's export classification practice was not relevant for interpreting
heading 02.10.176
92. In Thailand's view, the Panel did not fail to examine the "totality" of the relevant law and
practice of the European Communities. 177 Therefore, the Panel's consideration of relevant material
from the European Communities' legi slative system, including an Expl anatory Note to the Combined
Nomenclature of December 1994 and a BTI relating to salted ham from Spain, cannot be disturbed.178
According to Thailand, the Panel explicitly considered the Dinter and Gausepohl judgments of the
ECJ in its interpretative exercise under Article 32 of the Vienna Convention , rather than under
Article 31(2)(b), as directed by the Appellate Body in EC – Computer Equipment.179
93. Thailand disagrees with the European Communities that practice of low-level customs
officials cannot amount to "subsequent practice". Th ailand refers to the Appellate Body Report in
EC – Computer Equipment as well as international law literature suggesting that there is no such
limitation of the types of practice that may be relevant for purposes of Article 31(3)(b). 180 What may

175Thailand's appellee's submission, para. 98 (referring to European Communities' appellant's
submission, para. 151).
176Ibid., para. 104.
177Ibid., para. 160.
178Ibid., para. 105 (referring to Panel Reports, paras. 7.302 and 7.270).
179Ibid., para. 106.
180Thailand also refers to I. Brownlie, Principles of Public International Law, 6th edn (2003), p. 6.

constitute subsequent practice depe nds on the type and nature of the treaty provision in question,
which, in this case, is applied by customs officials.181
94. According to Thailand, the European Commun ities' contention that the Panel failed to
consider certain evidence in its interpre tative exercise is "factually incorrect". 182 For Thailand, it is
"unclear" whether the European Communities claims that the Panel failed to make an objective
assessment of the evidence before it; if the Eu ropean Communities does make such a claim, the
European Communities has not sufficiently substan tiated why the Panel acted inconsistently with
Article 11 of the DSU.183
(d) Object and Purpose
95. Thailand submits that Article 31(1) does not refe r to the "object and purpose" of a particular
provision (in this case, Article II of GATT 1994 read in conjunction with the specific tariff heading of
the EC Schedule at issue) but, rather, to the object and purpose of the treaty. 184 A treaty interpreter
must determine the ordinary meaning of the term s of the treaty (that is, the concession in heading
02.10) in the light of the object and purpose of the treaty (that is, the GATT 1994).
96. Thailand disagrees with the European Commun ities that the Panel's interpretation of the
object and purpose was based on a "bias" towards trade expansion. 185 The Panel was "merely
paraphrasing" the Appellate Body Report in EC – Computer Equipment when referring to the security
and predictability of the reciprocal arrangements "d irected to the substantial reduction of tariffs and
other barriers to trade".186
97. Thailand agrees with the Panel that the criteri on of "long-term preservation" is "not ...
predictable".187 For purposes of customs classification, the objective physical characteristics of the
products are the "paramount consideration", rather than any purpose underlying those
characteristics.188 In response to the European Communiti es' concern that the Panel took no account
of the uncertainty of the alternative criterion of "preparation", Thailand subm its that the burden of

182Ibid., para. 107.
183Ibid., para. 109 (referring to the standard for such a claim, as set out in Appellate Body Report,
US – Steel Safeguards, paras. 498-499).
184Ibid., para. 121 (referring to Appellate Body Report, EC – Computer Equipment, paras. 13 and 85).
187Ibid., heading II.D.2.
188Ibid., para. 129.

proving that the term "salted" in heading 02.10 of the EC Schedule was intended to be limited to the
notion of "preservation" rested on the European Co mmunities; given that the European Communities
did not meet this burden, it was not incumbent on the Panel to assess any "alternative" criteria.
189
98. For Thailand, there is no legal basis for the s ubmission that heading 02.10 "did not have the
overall object and purpose of securing mutually ad vantageous market access arrangements on frozen
poultry".190 According to Thailand, this argument imp lies that the Panel should have taken into
account the unilateral trade policy considerations of the European Communities' negotiators; the
European Communities may not use its tariff classification to respond to changes in trade patterns.191
2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna
Convention
99. Thailand submits that the Panel acted correctly in seeking recourse to supplementary means
of interpretation under Article 32 of the Vienna Convention in order to confirm the interpretative
result obtained through the application of Article 31. Thailand submits that Article 32 provides a
non-exhaustive list of available supplementary means of interpretation, and that the European
Communities' classification practice, if found by the Appellate Body not to be "subsequent practice"
within the meaning of Article 31(3)(b), should be considered under Article 32.
(a) Circumstances of Conclusion
100. Thailand does not agree with the European Communities that previous findings of the
Appellate Body and public international law literature suggest that the events, acts, and instruments to
be taken into account as part of the circumstan ces of a treaty's conclusion "must have directly
influenced the common intentions of parties". 192 Thailand submits that th e Appellate Body has not
suggested that the documents considered by a pa nel as "circumstances of conclusion" must have
influenced parties in the drafting of the treaty text. Regarding the European Communities' rejection of
the Panel's concept of "construc tive knowledge", Thailand notes the A ppellate Body's statement in
EC – Computer Equipment that the panel, in that case, should have considered relevant BTIs as
supplementary means of interpretation; in Thailand's view, it is unlikely that all negotiating parties in
the Uruguay Round were aware of these BTIs.

191Ibid., para. 139.
192Ibid., para. 144 (referring to European Communities' appellant's submission, para. 229; and quoting
Appellate Body Report, EC – Computer Equipment, para. 86; and Sinclair, supra, footnote 36, p. 141).

(b) Characterization of Relevant Law of the European Communities
101. Thailand submits that the Panel appropriately considered relevant law and practice of the
European Communities during the Uruguay Round ne gotiations, in accordance with the Appellate
Body's guidance in EC – Computer Equipment . Thailand disagrees with the European Communities
that there was no relevant customs classificati on practice prior to the conclusion of the Uruguay
Round, and points to the Dinter and Gausepohl judgments of the ECJ. Thailand argues that the
criterion established for heading 02.10 by EC Regul ation 535/94 implemented and clarified the long-
term preservation criterion recognized in the ECJ's Gausepohl judgment.193
102. Thailand further submits that Additional Note 7 to the Combined Nomenclature, enacted
through EC Regulation 535/94, did not alter th e scope of heading 02.10 of the Combined
Nomenclature; rather, Additional Note 7 merely sp ecified the criteria to be taken into account for
classifying certain goods under that heading. Thailand also rejects the European Communities'
argument that the establishment of criteria other than long-term preservation for the term "salted" in
heading 02.10 would alter the scope of that heading. In Thailand's view, this argument is rebutted by
the WCO's response to the Panel's questions, according to which the term "salted" in heading 02.10 is
not limited to "preservation", and must be defined on the basis of the objective characteristics of the
product.
103. Thailand agrees with the Panel that the Explanat ory Notes to the Combined Nomenclature are
not relevant because these Notes relate to swine me at and not to poultry m eat, and cannot be applied
by analogy to poultry meat in the absence of an e xplicit reference. Finally, Thailand asserts that the
Panel properly declined to consider as relevant the practice of other Members, including a United
States' customs ruling of 1993 relating to fresh or frozen beef sprinkled with salt, and a United States'
customs ruling of 1996 relating to frozen salted bacon.
194

194Ibid., paras. 172-176.

III. Other Appeals by Brazil and Thailand
A. Claims of Error by Brazil – Other Appellant
1. Terms of Reference

(a) Measures within the Terms of Reference
104. Brazil appeals the Panel's conclusion that EC Regulations 1871/2003 and 2344/2003 (the
"subsequent measures") are outside th e Panel's terms of reference. Brazil recalls that a panel request
is required to identify the "specific measures at i ssue"; identification of specific measures "does not
occur by mere reference to the label or number gi ven to a legal instrument", but, rather, "by the
description of acts or omissions attributable to a WTO Member".195 The measures identified by Brazil
in its panel request were "clearly identified as [measures] that changed the classification and tariff
treatment of frozen salted chicken cuts". 196 The violation alleged was the treatment less favourable
than that provided for the product under heading 02.10 of the EC Schedule. According to Brazil, the
subsequent measures that the Panel found to be ou tside its terms of reference are "in essence the
same" as the two measures found to be within the Panel's terms of reference; these subsequent
measures also produce the same violation identified in Brazil's panel request, namely, treatment less
favourable than that provided for in the EC Schedule.197
105. Brazil argues that the Panel should have examin ed its panel request as a whole. Brazil's
"depiction" in its panel request of the two explicitly referenced measures "as measures that reclassify
and change the tariff treatment of frozen salted chicken cuts is broad enough to include legal
instruments subsequent to [these two measures] that also reclassify and change the tariff treatment of
frozen salted chicken cuts". 198 Brazil acknowledges that the present case is "somewhat different"
from the dispute in Chile – Price Band System , because "it does not technically deal with an
amendment to a measure" 199; however, Brazil submits that the general principles and the reasoning
applied in that case should be app lied here as well. The two subse quent measures "are equivalent to
amendments" of the two measures explicitly mentioned in Brazil's panel request, in that they confirm
and clarify the reclassification and tariff change brought about by the two earlier measures. The two
subsequent measures "also produce the same eff ect", namely, the violation of the European

195Brazil's other appellant's submission, para. 17.
196Ibid., para. 21.
197Ibid.
198Ibid., para. 27.
199Ibid., para. 28. (original emphasis)

Communities' obligations "under heading 02.10 of the EC Schedule". 200 The reclassification and
change in tariff treatment of frozen salted chicken cuts by the European Communities " remained
essentially the same" after the enactment of the two subsequent measures.201
106. Brazil also expresses the concern that a failure to include the subsequent measures in the
Panel's terms of referen ce would not secure a prompt and positi ve solution to the dispute. Brazil
furthermore contends that, contrary to the Panel's reasoning, it should not have had to draft its panel
request with "broad, generic and/or inclusive language so as to cover specific legal instruments that it
reasonably did not expect or anticipate" at the time it filed its request. 202 Such reasoning would "give
rise to a surge of vaguely worded Panel requests", contrary to Article 6.2 of the DSU that requires that
measures be specifically identified.203 Moreover, the Panel did not provide an explanation of how and
why the due process objective would have been comp romised if the subsequent measures had been
included in the Panel's terms of reference. In Br azil's view, the measures specifically identified gave
adequate notice of the scope and claim of violat ion asserted by Brazil in its panel request, and the
European Communities was made aware of the cont ent and relevance of EC Regulation 1871/2003 to
this dispute "many times throughout the Panel proceeding".204
(b) Products within the Terms of Reference
107. Brazil appeals from the Panel's conclusion th at the products at issue are "frozen
boneless chicken cuts impregnated with salt, with a salt content of 1.2 %-3%" and not "frozen
boneless chicken cuts impregnated with salt, with a salt content of 1.2% or more". According to
Brazil, the Panel failed to represent correctly the products covered by EC Regulation 1223/2002 and
EC Decision 2003/97/EC, which led to the "flawe d understanding" that th e products under those
instruments are determined by the salt content of these products, and not by the notion of long-term
preservation.205 Although the salt percentages provided for in those measures—1.2 to 1.9 per cent,
and 1.9 to 3 per cent, respectively—appear to desc ribe the products affected by those measures, the
"rationale" provided within each of those legal instruments for classification under heading 02.07 is
that of long-term preservation. 206 This is also apparent from EC Decision 2003/97/EC, according to
which chicken cuts with a salt content of 1.9 to 3 per cent are similar to boneless chicken cuts with a

200Brazil's other appellant's submission, para. 27.
201Ibid., para. 31. (emphasis added)
202Ibid., para. 36.
203Ibid., para. 37.
204Ibid., para. 42.
205Ibid., para. 45.
206Ibid., para. 49.

salt content of 1.2 to 1.9 per cent. According to Braz il, this suggests that it is not the salt content that
defines the products under that measure.
108. Brazil also argues that the products within the Panel's terms of reference are the products
described in Brazil's panel request. Brazil takes issu e with the Panel's statement that the products at
issue are determined by the measures considered to be within the Panel' s terms of reference.
Although Article 6.2 of the DSU does not explicitly requi re that the products at issue be identified in
the panel request, the Appellate Body has, in the p ast, relied on the description contained in the panel
request to determine the scope of th e measure at issue. Moreover, if the product at issue is in fact
described in the panel request, then it is that pr oduct that constitutes the product within the panel's
terms of reference, because, pursuant to Article 7 of the DSU, a panel's terms of reference are
governed by the panel request. Brazil also re fers to the Appellate Body's finding in EC – Computer
Equipment that, "with respect to certain WTO obligations, in order to identify 'the specific measures
at issue', it may also be necessary to identify th e products subject to the measures in dispute."
207
Brazil contends that, for certain WTO obligations such as tariff concessions, the identity of the
product in the panel request "becomes vital" in the fulfilment of the requirements under Article 6.2.208
2. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna
Convention
109. Brazil appeals the Panel's conclusion that th e evolution of Chapter 2 of the Harmonized
System does not indicate definitely that the pred ecessor to heading 02.10 of the Harmonized System
was characterized by the notion of "preparation". According to Brazil, the terms of Items 13 and 18
of the Geneva Draft Nomenclature, as well as the E xplanatory Notes to these Items, indicate that the
processes within Item 18 exclude the concept of "preservation", because, within the structure of
Chapter 2 of the Geneva Draft Nomenclature, preservation categories were deliberately placed as
subdivisions within an Item.
110. Next, Brazil appeals the Panel's finding that th e Explanatory Notes to heading 02.10 of the
EC Schedule and to Chapter 2 of the Harmonized Sy stem are not helpful in determining the meaning
of the tariff concession in heading 02.10. Brazil takes issue in particular with the Panel's finding that
the notions of "preparation" and "preservation" ma y not be mutually exclusive in the context of
heading 02.10. Contrary to the Panel's conclusion, the Explanatory Note to heading 02.10 does not
merely "suggest", but actually "asserts" that the proc esses referred to in heading 02.10 are preparation

207Brazil's other appellant's submission, para. 63 (quoting Appellate Body Report, EC – Computer
Equipment, para. 67).
208Ibid., para. 64.

processes.209 Brazil's also argues that the Panel gave " unjustified significance" to the overlap in the
definitions of the terms "preparation" and "preservation". 210 Brazil argues that "preparation"
determines classification under heading 02.10, even if the processes of preparation may, in some cases
and to some degree, also preserve meat.
111. Brazil furthermore argues that the Panel committed a legal error by concluding that Rule 3 of
the General Rules for the Interpretation of the Harmonized System ("General Rule 3") was not
applicable to the case before it. Brazil contends that the Panel's reliance on, and acceptance of, the
parties' alleged position that the products at issue di d not fall under two or more headings, such that
the condition for applicability of General Rule 3 was not fulfilled, was "a grave legal error". 211 The
parties held "separate and distinct" unders tandings that led to different conclusions 212; this should
have signalled to the Panel that the products at issue were " prima facie classifiable" under two
headings.213 Moreover, the Panel assumed that the products at issue were not " prima facie
classifiable" under two or more headings, despite the f act that it had not, after a textual and contextual
analysis, decided whether the products at issue fell under heading 02.10. Finally, the Panel "utterly
ignored" Brazil's objection to its decision to not apply General Rule 3, expressed in Brazil's comments
on the Panel's Interim Report.214
112. Should the Appellate Body find that the Panel erred in not applying General Rule 3, Brazil
requests that the Appellate Body complete the Pane l's legal analysis and find that General Rule 3
leads to classification of the products at issue under heading 02.10. Brazil argues that the factual
findings of the Panel imply that, under General Ru le 3, the products at issue are different from
unsalted products and that these differences ma ke the products at issue "more specific". 215 The term
"salted" in heading 02.10 describes the products at i ssue more specifically than the term "poultry" in
heading 02.07. This is because heading 02.10 does not cover "other" meat that has not been
specifically provided for under other headings but, rather, all kinds of meat, "as long as that meat has
been prepared by salting, drying or smoking".
216 Brazil also refers to the letter of the WCO to the
Panel in support of its argument that "salting" is mo re specific than "freezing". According to Brazil,

209Brazil's other appellant's submission, para. 80. (original emphasis omitted)
210Ibid., para. 81.
211Ibid., para. 93.
212Ibid., para. 94.
213Rule 3 of the General Rules for the Interpretation of the Harmonized System.
214Brazil's other appellant's submission, para. 101.
215Ibid., para. 104.
216Ibid.

even if heading 02.10 were not "more specific" wi thin the meaning of General Rule 3(a), General
Rule 3(c) would be applicable, leading to a classification of the products at issue under heading 02.10.
B. Claims of Error by Thailand – Other Appellant
1. Terms of Reference

(a) Measures within the Terms of Reference
113. Thailand submits that the Panel erred in its conclusion that EC Regulations 1871/2003
and 2344/2003 (the "subsequent measures") were outsi de the Panel's terms of reference. Thailand's
panel request was broad enough to include the two subsequent measures within the Panel's terms of
reference, because the panel request referred to the "cl assification" of the product at issue, which is "a
broader concept" than the two regul ations listed in the panel request. 217 Similar to the two measures
explicitly included in the panel request, the subseque nt measures have the effect of classifying the
product at issue under heading 02.07, rather than heading 02.10, and, thereby, result in less favourable
treatment for the product than that provided for in the EC Schedule. 218 According to Thailand, had
the Panel properly applied the standards applicable under Article 6.2 of the DSU, it should have
concluded that Thailand's panel request was "broad" enough to cover the subsequent measures as
well.219
114. Thailand rejects the Panel's argument that Thailand's panel request was not broad enough
because it did not include the phrase "as am ended", as used in the dispute in Chile – Price Band
System220; applying such a "mechanical test" of whether a panel request contains generic or expansive
language would provide WTO Members "with counterproductive incentives to be vague in their panel
requests".221 Thailand argues that EC Regulations 1871 /2003 and 2344/2003 have the same effect as
the instruments specifically referred to in Thailand' s panel request. Thailand refers to the Appellate
Body's finding in Chile – Price Band System , where the Appellate Body considered relevant that the
regulatory changes at issue "did not change the essence of the measure".222

217Thailand's other appellant's submission, para. 24.
218Ibid., para. 26.
219Ibid., para. 28.
220Ibid., para. 29.
221Ibid.
222Ibid. (referring to Appellate Body Report, Chile – Price Band System , para. 136, in turn quoting
Appellate Body Report, Brazil – Aircraft , para. 132). Thailand also refers to the Appellate Body and panel
findings in Argentina – Footwear (EC) and Dominican Republic – Import and Sale of Cigarettes in support of
its argument. (Ibid., paras. 30-38)

115. Thailand contends that the inclusion of the tw o subsequent European Communities' measures
would not frustrate the due process objective of Article 6.2 of the DSU. The European Communities
was provided adequate notice of the nature of Th ailand's case and of the measures being challenged,
such that the European Communities was not impaired in its ability to defend itself on the measures at
issue. The third parties were also aware of the na ture of Thailand's case, su ch that their interests
equally were not prejudiced. Moreover, Thaila nd argues that the Panel should have included
EC Regulations 1871/2003 and 2344/2003 in its terms of reference to enable a prompt and positive
solution to the present dispute because treating th e two measures as separate from the original
measures could have a negative impact on the Eur opean Communities' implementation of the Panel's
ruling.
(b) Products within the Terms of Reference
116. Thailand submits that the Panel erred in finding that the products at issue were limited to
chicken cuts with a salt content of 1.2 to 3 per cent. According to Thailand, the Panel erred in holding
that Article 6.2 does not require a definition of the products within the terms of reference. Pursuant to
Article 7.1 of the DSU, a panel's terms of refere nce contain the requirement to "examine the matter
referred to the DSB" by a complainant; as a result, in the past, the Appellate Body "has generally
followed the description of the product contained in the [panel] request".223 Thailand contends that, to
the extent the Panel believed that it was not required to consider all of the products referred to in the
panel request, the Panel erred as a matter of law.
117. Furthermore, in Thailand's view, the Panel erred in its definition of the products at issue.
Thailand's panel request did not describe any upper-lim it for the salt content of the chicken cuts for
which classification was at issue. According to Thailand, the Panel's ruling leads to the "anomalous
situation" where the Panel has found that chicke n cuts with a salt content of between 1.2 and
3 per cent are to be classified as "salted" meat unde r heading 02.10, but has not found that chicken
cuts with a salt content greater than 3 per cent must be similarly classified. 224 According to Thailand,
the Panel erroneously held that the scope of the m easures at issue defined the scope of the products at
issue. The Appellate Body's findings in EC – Computer Equipment suggest that the Panel should
have looked first to the products at issue and then used that definition to identify the measures at
issue.

223Thailand's other appellant's submission, para. 56.
224Ibid., para. 59.

2. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna
Convention
118. Thailand submits that the Panel erred in in terpreting certain relevant aspects of the
Harmonized System. First, according to Thailand, the Panel assumed that all Harmonized System
Notes—Section Notes, Chapter Notes, Heading and Subheading Notes—referred to by the parties are
Explanatory Notes and, therefore, are not part of the Harmonized System and are non-binding.
Thailand considers that the Panel erred in its legal characterization of the Chapter Note to Chapter 16
as an Explanatory Note and, therefore, in its conc lusion that the Chapter Note to Chapter 16 does not
form part of the Harmonized System and is non-binding. The Panel's conclusion is "clearly incorrect"
and results in undermining the weight to be given to the content of the Chapter Note to Chapter 16 for
the interpretation of the term "salted" in heading 02.10.225
119. Secondly, in Thailand's view, the Explanatory No tes to Chapter 2 and to heading 02.10, when
read together with the Chapter Note to Chapter 16, "clearly indicate" that preparation determines
classification under heading 02.10. 226 The Panel erred in not drawing a clear conclusion that these
Notes confirm that the processes listed in heading 02. 10 refer to preparation. Chapter 2 covers meat
that is fresh, chilled, frozen, and salted, in brine, dried, or smoked, and, as such, is prepared or
preserved. Fresh meat is not prepared or preserved; meat that is chilled or frozen is preserved. This
implies that meat that is salted, in brine, dried, or smoked must be prepared. Thailand disagrees with
the Panel that the terms "preparation" and "preservation" are not "mutually exclusive" 227 because this
finding fails to give proper meaning to all the term s of the treaty and renders the term "prepared" in
the Chapter Note to Chapter 16 "inutile". 228 Even if there were a degree of overlap between the
notions of "preparation" and "preservation", it would s till be correct to say that it is "preparation" that
characterizes heading 02.10.
120. Thirdly, Thailand argues that the Panel erred in its consideration of General Rule 3. Thailand
disagrees with the Panel's finding that the parties to the dispute "concur[red] that the condition for
[the] application [of General Rule 3] has not been fulfilled". 229 Thailand submits that the reason it did
not consider that the products at issue could be prima facie classifiable under two headings was that
it considered the products at issue to fall under heading 02.10 only; the European Communities, in
contrast, considered that the products fell under head ing 02.07 only. According to Thailand, "[t]he

225Thailand's other appellant's submission, para. 71.
226Ibid., heading III.C.2.
228Ibid., para. 81.

fact that opposing parties put forward different views about the correct classification of the products at
issue indicates that the product at issue was prima facie classifiable under two headings". 230
Furthermore, the fact that the European Communitie s itself, at various periods, classified the products
at issue under both heading 02.07 and heading 02.10, and that the European Communities' Customs
Code Committee also indicated that the products were classifiable under each of these two headings,
should have indicated to the Panel that it had suffi cient grounds for resorting to the application of
General Rule 3.
C. Arguments of the European Communities – Appellee
1. Terms of Reference
(a) Measures within the Terms of Reference
121. The European Communities request s that the Appellate Body reject Brazil's and Thailand's
appeals regarding the Panel's te rms of reference. The Europ ean Communities argues that the
approach used by Brazil and Thailand, permitting the addition of measures on the condition that the
general effect of those measures is similar to the one s identified in the panel requests, is "clearly at
odds with the DSU and WTO jurisprudence", and w ould "lead to the Panel' s terms of reference
waxing and waning throughout a dispute settlement proceeding". 231 Terms of reference are limited to
measures that existed at the time of the establishment of a panel, and Article 7.1 of the DSU assumes
that the specific measures will have been identifie d in the panel request. The exceptions to this
principle include amendments of an identified me asure, under the conditions that the measure is
"essentially the same" after the amendment and the te rms of reference are sufficiently broad to cover
the issue.232 The reliance of Brazil and Thailand on Articles 3.4 and 3.7 of the DSU suggests that
broad objectives of the DSU would override the specific rules of Article 6.2 of the DSU, an approach
with which the European Communities disagrees. In any event, the inclusion of all legal measures
that are considered to have a similar effect is not indispensable to securing a positive solution to the
dispute.

230Thailand's other appellant's submission, para. 87.
232Ibid., para. 20 (referring to Appellate Body Report, Chile – Price Band System , para. 136, in turn
quoting Appellate Body Report, Brazil – Aircraft, para. 132).

122. In the European Communities' view, the "'essence ' test" refers to modifications of the same
measure, rather than to measures that are different but have broadly the same effect as measures
identified in the panel request.
233 Moreover, the European Commun ities argues that the subsequent
measures are "different in nature" from the measures identified in the panel requests and are "not 'in
essence the same'".234 The subsequent measures have a broade r scope than the measures identified in
the panel requests, because the subsequent measures refer not only to chicken cuts, but to any kind of
meat. Furthermore, the measures identified in th e panel requests have not been amended by the
subsequent measures and "remain valid". 235 Finally, the measures differ in their legal implications;
the two measures identified in the panel requests "sim ply designate the appropriate classification for a
particular product"; in contrast, EC Regulati on 1871/2003 "reconfirms a basic criterion—long-term
preservation—on which to interpret heading 02.10". 236
123. In addition, the European Communities argu es that, to extend the scope of a panel's
jurisdiction, a set of "stringent conditions" must be fulfilled. 237 It is not sufficient to establish that the
due process rights of the defendant have not been prejudiced. The European Communities points out
that, due to the "dilatory way" in which Brazil a nd Thailand made their claim concerning the terms of
reference, namely, at a time when the panel proceedings were more than half completed, the European
Communities' due process rights were not respected. 238 Also, third parties were denied their due
process rights, because it was only after the last opportunity for third parties to express their views
that Brazil and Thailand first made claims concerning the Panel's terms of reference.
(b) Products within the Terms of Reference
124. The European Communities contends that Braz il's and Thailand's a llegations of error
concerning the products at issue are "closely intertwi ned" with their allegations of error concerning
the measures at issue.
239 The European Communities also fails to see how the question of the
products at issue affects, and is relevant for, the questions of legal interpre tation before the Panel and
the Appellate Body, as a matter independent of the measures that were identified. The European
Communities agrees with the Panel that its terms of reference are defined by the measures identified
in the panel requests; it is, however, "unclear" to the European Communities as to why the Panel

234Ibid., para. 36.
235Ibid., para. 41.
236Ibid., para. 42.
237Ibid., para. 45.
238Ibid.
239Ibid., para. 52.

decided nevertheless to define the products at issue. 240 The Panel's statement that the products at
issue "are the specific products affected by the findings and recommendations" made by the Panel in
its Reports is erroneous, because the Panel incorrectly interpreted heading 02.10 of the EC Schedule,
which, in the European Communities' view, applies to all meats falling under Chapter 2. As a result,
the Panel's findings and recommendations "inevitably a ffect a far larger range of products" than those
mentioned in the specific measures at issue.241
125. The European Communities further submits that the Appellate Body made its finding in
EC – Computer Equipment —that it may be necessary to identify the product in order to identify the
specific measures at issue—in a context where actions of individual customs offices were challenged;
thus, in that dispute, the identification of the product was "key to identifying the measures at issue".242
According to the European Communiti es, the product at issue is not relevant "in and of itself" under
Article 6.2; rather, it may be relevant only to help identify the "specific measures at issue". 243
2. Interpretation of the EC Schedule in the Light of Articles 31 and 32 of the
Vienna Convention
126. The European Communities agrees with the Panel' s conclusions that the Explanatory Notes to
the Harmonized System are not conclusive with resp ect to whether the notion of "preparation" or the
notion of "preservation" characterizes heading 02.10. The European Communities agrees with
Thailand that the Panel did not "explicitly recogniz[e] " that the Chapter Note to Chapter 16 of the
Harmonized System is binding, but argues that the Panel made no comment on the weight it attached
to the various Notes. 244 As a result, it is not obvious how attaching more weight to the Note could
have led the Panel to a different conclusion.
127. The European Communities also cautions that the Notes to the Harmonized System should be
used "only to attempt to elucidate the text whic h is being interpreted [and not be] treated as though
they are the terms of the treaty being interpreted". 245 Furthermore, the European Communities
submits that there are several meats falling under Chapte r 2 other than those that are "salted, in brine,
dried or smoked" to which the word "prepared" ca n be applied. An analysis of the Harmonized

241Ibid.
242Ibid., para. 61.
243Ibid.
244Ibid., para. 72.
245Ibid., para. 76.

System reveals "numerous examples" of the word "p reparation" being used as a broad term in relation
to various food products.
 246
128. With respect to General Rule 3, the Europ ean Communities contends that the processes of
interpretation set out in Articles 31 and 32 of the Vienna Convention lead to the conclusion that the
term "salted" in heading 02.10 does not cover produc ts that have not been salted for preservation.
Nevertheless, even if this were not the case, it is "far from clear" that the General Rules can be applied
to interpret the scope of the term "salted". 247 The European Communities rejects the argument that
products are prima facie classifiable under two or more headings whenever there is a dispute about
classification; it also contests that it considered the products at issue to be classifiable under two
headings. Whether the condition for the application of General Rule 3 is fu lfilled cannot depend on
the views of one party, but must be assessed objectively.
129. In the European Communities' view, application of General Rule 3(a) leads to a resolution of
the matter. Heading 02.07 contains the "most sp ecific description" because it refers to "poultry",
which is more specific than the term "meat" in h eading 02.10. The European Communities disagrees
with the alternative argument, presented in the letter of the WCO Secretariat to the Panel, that it may
be the processing (that is, freezing and salting) that determines the classification in the present case.
According to the European Communities, there is no reason why "salting" should be regarded as more
specific than "freezing".248 The only "clear indication" that can be deduced from General Rule 3(a) is
that "poultry" is more specific than "meat". 249 Consequently, it is unnecessary to apply General
Rule 3(c). In any case, General Rule 3(c) rai ses an "important issue of principle", because the
European Communities questions whether a finding th at a product falls under two or more headings
"can be made after a correct app lication of the Vienna Convention". 250 Should either the Panel or the
Appellate Body make such a finding of "non liquet", this would imply that Brazil and Thailand have
failed to make their case, such that a finding agai nst them would have to be made. The European
Communities adds that General Rule 3(c) should be seen as "a rule intended for classification of
particular consignments", rather than for the in terpretation of a tariff concession as required in the
present dispute.251

247Ibid., para. 90.
248Ibid., para. 99.
249Ibid., para. 100.
250Ibid., para. 93.
251Ibid.

130. With respect to the Geneva Draft Nomencla ture of 1937, the European Communities argues
that this document may be relevant to the in terpretation of the Harmonized System only as
"supplementary means" under Article 32 of the Vienna Convention , and not as "context" under
Article 31. The European Communities also agrees w ith the Panel's finding that "the evolution of the
terms and structure of Chapter 2 of the [Harmonized System] does not definitively indicate whether or
not the predecessor to heading 02.10 of the [Harmoni zed System] was characterized by the notion of
'preparation' and/or 'preservation'". 252 According to the European Communities, the distinction
between fresh/chilled meat and frozen meat under th at Draft Nomenclature was made at the low
"tertiary level" 253 and was introduced only by those countries that wished to apply this distinction,
while other countries chose not to do so. 254 The "real lesson" from the Geneva Draft Nomenclature is
that "meats that have been subjected to traditiona l preserving methods should be brought together and
given common treatment". 255 In the transition from the Brussels Nomenclature to the Harmonized
System, these products were "kept together", wh ile "cooked and otherwise prepared" meats were
taken out of this category and placed elsewhere.256
IV. Arguments of the Third Participants
A. China
131. China disagrees with the argument of the Europ ean Communities that "the provision at issue,
the object and purpose of which must be ascertained, is Article II of the GATT 1994 read in
conjunction with the specific concession at issu e, here, heading 02.10 of the EC Schedule."
257 China
notes that Article 31(1) of the Vienna Convention requires interpretation of a treaty "in the light of its
object and purpose" 258; this implies determining the object and purpose of the treaty as a whole
rather than its individual provisions.

252Panel Reports, para. 7.205.
253The European Communities argues that the Geneva Draft Nomenclature divided products at three
levels, the lowest of which was called the "tertiary level". (European Communities' appellee's submission,
para. 108)
254Ibid., para. 108.
255Ibid., para. 114.
256Ibid.
257China's third participant's submission, para. 5 (quoting European Communities' appellant's
submission, para. 182).

132. China accepts that an interpretation of head ing 02.10 of the EC Schedule would include
considering the meaning of the relevant terms in th e light of their object and purpose. According to
China, the concessions contained in the EC Schedule are treaty terms of the WTO Agreement and the
GATT 1994, and these treaties are the relevant sources for ascertaining the object and purpose. China
agrees with the Panel that the relevant object and purpose is the security and predictability of the
reciprocal and mutually advantageous arrangements manifested in the form of concessions.
259
133. Moreover, China supports the Panel's finding th at the inclusion of a "long-term preservation"
criterion in the interpretation of the term "salted", in the concession contained in heading 02.10 of the
EC Schedule, could undermine the object and purpo se of the security and predictability of the
WTO Agreement and the GATT 1994.260 China disagrees with the Eu ropean Communities' argument
that "preservation" is a predictable criterion an d considers it inconsistent with the European
Communities' acknowledgment that EC Regulation 1223/2002 and EC Deci sion 2003/97/EC do not
apply a criterion of "long-term preservation". 261 In this regard, China notes that the European
Communities stated that if a produc t has been "frozen" within the me aning of heading 02.07, it will
still be classifiable under heading 02.10 of the EC Schedule as a "salted" product, provided that the
salting is for "long-term preservation" within the meaning of these measures. 262 In addition, China
considers that the European Comm unities' reliance on the use of term s such as "long-term use" and
"provisionally preserved" in other parts of the Harm onized System is misplaced, and that such terms
do not assist in the interpretation of heading 02.10 in the light of the object and purpose of the WTO
Agreement and the GATT 1994.263
134. China agrees with the Panel that a customs officer would have practical difficulties in
applying the criterion of "long-term preservation". 264 There is no clear definition of "long-term
preservation" and no specific guidelines for customs offi cers. China illustrates the uncertainty of the
criterion with two examples. First, products that have been salted for purposes other than long-term
preservation, and frozen for long-term preservation, c ould be attributable to both salting and freezing,
because a customs officer would have difficulties in ascertaining the purpose of these processes for a
particular product. Secondly, China posits that l ong-term preservation of certain products might only

259China's third participant's submission, para. 13 (referring to Panel Reports, para. 7.320).
262Ibid., footnote 19 to para. 24 (referring to Panel Re ports, para. 7.322, in turn citing European
Communities' responses to Questions 49 and 70 posed by the Panel; and European Communities' statement at
the second Panel meeting, paras. 9 and 14-15).
263Ibid., paras. 18-19.
264Panel Reports, para. 7.322.

be possible by a combination of both salting and freezing, which again would cause difficulties for a
customs officer to classify the product.
135. China supports the Panel's findings relating to "circumstances of conclusion" within
the meaning of Article 32 of the Vienna Convention . China believes that the Panel did not
mischaracterize the law of the European Communities in finding that EC Regulation 535/94
superseded the criterion of long-term preservati on governing the scope of heading 02.10 as confirmed
in the ECJ's Gausepohl judgment. 265 According to China, the Eu ropean Communities' argument
that EC Regulation 535/94 did not change the exis ting ECJ interpretation of the term "salted" in
heading 02.10 is untenable because of the Eur opean Communities' subsequent inclusion of
Additional Note 7 in the Combined Nomenclature and the European Communities' issuance of certain
BTIs.266 Moreover, China submits that the temporal proximity of the publication and entry into force
of EC Regulation 535/94 to the conclusion of the Uruguay Round supports the view that
EC Regulation 535/94, indeed, set forth the classifi cation criterion relevant for the EC Schedule and
established the common intentions of the negotiating parties.267
B. United States
136. The United States submits that the description of the term "salted" meat in
EC Regulation 535/94 is what the European Comm unities had accepted, before the conclusion
of its Schedule in the Uruguay Round, as being th e ordinary meaning of the term according to
Article 31(1) of the Vienna Convention.268 This description—which was inserted into the Combined
Nomenclature—provided that the term "salted" meat referred to meat "deeply and homogenously
impregnated with salt in all parts, having a tota l salt content of not less than 1.2% by weight". 269
The United States points out that EC Regulation 535/94 was issued prior to the completion of the
process of verification of the EC Schedule during the Uruguay Round.270
137. Alternatively, the United States agrees with the Panel's approach of considering
EC Regulation 535/94 as part of the "circumstances of [the] conclusion" of the WTO Agreement
in accordance with Article 32 of the Vienna Convention.271 The United States refers to the Appellate

265China's third participant's submission, para. 28.
266Ibid., para. 31.
267Ibid., para. 35.
268United States' third participant submission, paras. 1(a) and 5.
269Ibid., para. 5.
270Ibid., para. 6.
271Ibid., para. 1(a).

Body Report in EC – Computer Equipment , where the Appellate Body stated that a Member's
classification practice and customs legislation at the time of tariff negotiations are relevant as
"circumstances of [the] conclusion" of the WTO Agreement.
272 In this light, if the meaning of the term
"salted" in heading 02.10 of the EC Schedul e is ambiguous or obscure, EC Regulation 535/94
—issued during the Uruguay Round and relating to that term—should be used as a "circumstance" in
interpreting its meaning.
273
138. Furthermore, the United States contends that the European Communities' reference to a single
ruling by United States' customs authorities cannot amount to United States' "practice" on customs
classification of the products at issue.274 The United States emphasizes th at the product at issue in the
United States' customs ruling of November 1993 was fresh and frozen meat to which 3 per cent of salt
had been added "similar to fresh beef sprinkled a nd packed in salt", whereas the products at issue in
this case are described as "deeply a nd evenly impregnated with salt". 275 These descriptions
demonstrate that the two products are not similar. Therefore, the United States disagrees with the
European Communities that these products are "identi cal in all material respects", and that the United
States has a practice of classifying under heading 02.10 only products that are preserved by salt.276
139. The United States agrees with the Panel that a pr ovision in a treaty must be interpreted in the
light of the treaty's "object and purpose", not in the light of the "object and purpose" of that particular
provision.277 The word "its" before "object and purpose" in Article 31(1) of the Vienna Convention
refers to the singular "treaty" rather than to the plural "terms" of the treaty.278 Furthermore, according
to the United States, the Appellate Body reports referred to by the European Communities do not
support the European Communities' position. 279 The United States asserts that the European
Communities may have confused the meaning of th e term "object and purpos e" under Article 31(1)
with the question of what is a particular treaty provision's purpose. 280 The United States explains that
any provision has a "purpose", but such "purpose" can be found only by determining the meaning of

272United States' third participant submission, para. 6 (quoting Appellate Body Report, EC – Computer
Equipment, paras. 92 and 94).
273Ibid., para. 6.
274Ibid., para. 1(b).
275Ibid., para. 9.
276Ibid.
277Ibid., para. 1(c).
278Ibid., para. 12.
279Ibid., para. 13 (referring to the European Communities' reliance on the Appellate Body Reports in
Chile – Price Band System and (arguably) US – Line Pipe (not EC – Tube or Pipe Fittings ) in European
280Ibid., para. 14.

the provision, which in turn is determined by in terpreting the provision based on the customary rules
of interpretation found in Articles 31 and 32. 281 The United States argues that identifying a priori
some "purpose" of a provision and then interpreting the text on the basis of that "purpose" would not
be in accordance with customary in ternational law and would give pa rties to a dispute the possibility
of ascertaining "purposes" that suit their particular policy objectives.282
140. Finally, the United States agrees with the Eu ropean Communities description of the general
analytical approach that a WTO panel should take to municipal law. WTO panels may need to
determine the meaning of municipal law in order to decide whether a Member is complying with its
WTO obligations.283 In order to determine the meaning of a particular municipal law of a Member it
is necessary to examine the status and meaning of that measure within the municipal legal system
itself.284 In US – Carbon Steel , the Appellate Body explained that, to make an objective assessment
of the meaning of a municipal law, it is important to look at "the cons istent application of such laws,
the pronouncements of domestic courts on the meaning of such laws, the opinions of legal experts and
the writings of recognized scholars." 285 In this light, the United St ates submits that an objective
assessment of the meaning of a measure requires a case-by-case analysis which looks at the rules of
the municipal system in their totality and studies th e operation and actual status of the measure within
such legal system.286
V. Issues Raised in this Appeal
141. The following issues are raised in this appeal:
(a) regarding the terms of reference:
(i) with respect to the specific measur es at issue in this dispute,
whether the Panel erred in finding that Commission Regulation (EC)
No. 1871/2003 ("EC Regulation 1871/2003") and Commission Regulation
(EC) No. 2344/2003 ("EC Regulation 2344/2003") are outside the Panel's
terms of reference;

282Ibid.
283Ibid., para. 17.
284Ibid., para. 1(b).
286Ibid., paras. 17 and 19.

(ii) with respect to the specific products at issue in this dispute, whether the Panel
erred in finding that the Panel' term s of reference were limited to frozen
boneless chicken cuts impregnated with salt, with a salt content of 1.2 to
3 per cent;
(b) whether the Panel erred in finding that frozen boneless chicken cuts impregnated with
salt, with a salt content of 1.2 to 3 per cent (the specific products at issue), are
covered by the tariff commitment under heading 02.10 of the European Communities'
Schedule LXXX (the "EC Schedule");
(c) whether, in coming to the conclusion under (b), the Panel erred in interpreting the
term "salted" in the tariff commitment under heading 02.10 of the EC Schedule, and
more specifically, in applying the rules of treaty interpretation codified in Articles 31
and 32 of the Vienna Convention on the Law of Treaties (the " Vienna Convention"),
the Panel erred:
(i) by taking into account what the Panel referred to as the "factual context for
the consideration of the ordinary meaning" of the term "salted";
(ii) in respect of context:
- by finding that an examination of the terms contained in
heading 02.10 of the EC Schedule other than "salted" does not clarify
the ordinary meaning of the term "salted";
- by finding that the terms and structure of Chapter 2
287 and their
evolution, the Explanatory Note to heading 02.10 and that to
Chapter 2, and the Note to Chapter 16 of the Harmonized
Commodity Description and Coding System of the World Customs
Organization ("WCO") (the "Harm onized System"), do not clarify
the meaning of the term "salted" in heading 02.10 of the
EC Schedule;
- by characterizing the Note to Chapter 16 of the Harmonized System
as an Explanatory Note that is not binding, rather than as a Chapter

287Chapter 2 of the Harmonized Commodity Description and Coding System is attached as Annex IV to
this Report.

Note that forms part of the Harmonized System and is therefore
binding; and
- by finding that General Rule 3 of the World Customs Organization's
General Rules for the Interpretation of the Harmonized System (the
"General Rules") is not applicable in this case because the products at
issue are not prima facie classifiable under two or more headings of
the Harmonized System
288;
(iii) in respect of "object and purpose":
- by finding that an interpretation of the term "salted" in heading 02.10
of the EC Schedule, as including the criterion of preservation, could
undermine the object and purpose of security and predictability in
market access arrangement s, which underlie both the Marrakesh
Agreement Establishing the World Trade Organization (the " WTO
Agreement ") and the General Agreement on Tariffs and Trade 1994
(the "GATT 1994");
(iv) in respect of "subsequent practice":
- in its interpretation of the concept of "subsequent practice" within the
meaning of Article 31(3)(b) of the Vienna Convention;
- by finding that the European Communities' practice of classifying the
products at issue under heading 02.10 of the EC Schedule between
1996 and 2002 amounts to "subsequent practice" within the meaning
of Article 31(3)(b); and
- in its analysis of "consistency " of practice at the European
Communities and multilateral levels; and

288In the event that the Appellate Body reverses the Panel's decision not to apply General Rule 3, Brazil
requests the Appellate Body to complete the legal analysis and to conclude that the application of General
Rule 3 leads to the classification of the products at issue under heading 02.10 of the EC Schedule. (Brazil's
Notice of Other Appeal (attached as Annex II to this Report), penultimate paragraph)

(v) in respect of "circumstances of the conclusion of a treaty":
- in its interpretation of the concep t of "circumstances of conclusion"
within the meaning of Article 32 of the Vienna Convention;
- by limiting the analysis of "circumstances" to the "prevailing
situation in the European Communities" and failing to consider the
prevailing situation internationally;
- by developing and applying the no tion of "constructive knowledge";
and
- by misinterpreting relevant customs classification practice,
legislation and jurisprudence of the European Communities; and
(d) whether the Panel complied with its obligations under Article 11 of the
Understanding on Rules and Procedures Go verning the Settlement of Disputes (the
"DSU") in making its conclusions under Artic le 31 with respect to "factual context"
and under Article 32 of the Vienna Convention with respect to "circumstances of the
conclusion of a treaty".
VI. Introduction
142. The present dispute concerns the question whet her certain European Communities' measures
pertaining to the classification of imported frozen and salted chicken cuts result in treatment for those
chicken cuts that is less favourable than that provided for in the EC Schedule, in violation of Article II
of the GATT 1994. The EC Schedule contains two tariff commitments relevant to this dispute,
namely, under heading 02.07, concerning "meat and ed ible offal, of the poultry of heading No. 0105,
fresh, chilled or frozen"
289, and under heading 02.10, concerning "meat and edible meat offal, salted,
in brine, dried or smoked". In March 1994, the European Communities adopted Commission
Regulation (EC) No. 535/94 ("EC Regulation 53 5/94"). This Commission Regulation amended
Annex I of Commission Regulation (EEC) No. 2658/87, inserting an Additional Note to the European
Communities' Combined Nomenclature.290 The effect of this Note was that the term "salted" "means
meat or edible meat offal which has been deeply and homogenously impregnated with salt in all parts,
having a total salt content no less than 1.2% by weight ." In 1983, the European Court of Justice (the

289The precise tariff commitment is contained in subheading 0207.41.10 of the EC Schedule.
290This was Additional Note 8, later re-numbered as Additional Note 7.

"ECJ"), in the Dinter judgment 291, had addressed the question whether turkey meat seasoned with
salt and pepper was properly classified under Chapte r 2 or, instead, Chapter 16 of the European
Communities' Combined Nomenclature . In 1993, the ECJ, in the Gausepohl judgment292, addressed
the question under which circumstances salted bovine m eat would be considered "salted" within the
meaning of heading 02.10 of the European Communities' Combined Nomenclature.293
143. Following EC Regulation 535/94, between 1996 a nd 2002, various customs offices of the
European Communities classified the products at issue in this dispute—namely, "frozen boneless
chicken cuts impregnated with salt, with a salt content of 1.2% – 3%" 294—as "salted" meat under
heading 02.10. In 2002, by means of Commission Regulation (EC) No. 1223/2002 ("EC Regulation
1223/2002"), the Commission of the European Comm unities determined that frozen boneless chicken
cuts with a salt content of 1.2 to 1.9 per cen t were to be classified as "frozen" meat under
heading 02.07 and, thus, not under heading 02.10. In 2003, by Commission Decision No. 2003/97/EC
("EC Decision 2003/97/EC"), the Commission directed the Federal Republic of Germany to withdraw
certain Binding Tariff Information ("BTIs")
295, which classified frozen boneless chicken cuts with a
salt content of 1.9 to 3 per cent as "salted" meat, by stating that the products covered by those BTIs
were properly classified as "frozen" meat under h eading 02.07. In October 2003, the European
Communities enacted EC Regulation 1871/2003, acco rding to which the term "salted", under
heading 02.10, "mean[s] meat and edible meat o ffal deeply and homogeneously impregnated with
salt in all parts and having a total salt content of not less than 1.2% by weight, provided it is
the salting which ensures long-term preservation ."296 This provision was also reflected in
EC Regulation 2344/2003 with respect to the Eu ropean Communities' Combined Nomenclature.
Thailand commenced exporting frozen salted chicke n to the European Communities in 1996, and

291Supra, footnote 151.
292Supra, footnote 106.
293The European Communities has also referred to two European Communities' Explanatory Notes as
relevant pieces of European Communities' legislation. In 1981, an Explanatory Note was inserted into the
European Communities' Common Customs Tariff, according to which the term "salted", in relation to swine
meat, referred to meat that had been "preserved, by deep dry salting or pickling in brine without any other
supplementary treatment such as drying or smoking". (Exhibit EC-11 submitted by the European Communities
to the Panel) Another Explanatory Note, from 1983, referring to "dried or smoked" swine meat, stated that
"[h]ams, shoulders and parts thereof which have been partially dehydrated, but the actual preservation of which
is ensured by freezing or deep-freezing" fell within the tariff heading relating to "frozen 'hams, shoulders or cuts
thereof, with bone in'". (Exhibit EC-13 submitted by the European Communities to the Panel)
294Panel Reports, para. 7.36.
295We understand that a BTI provides advance binding information to the importer of how a given
customs office will classify a particular product.
296Article 1 of EC Regulation 1871/2003. (emphasis added) EC Regulation 1871/2003 amended
Additional Note 7 to the European Communities' Combined Nomenclature, which had been introduced by
EC Regulation 535/94.

Brazil started doing so in 1998.
297 More details concerning the factual background to this dispute are
provided in paragraphs 2.18-2.41 of the Panel Reports.
144. Before the Panel, Brazil and Thailand allege d that, through EC Regulation 1223/2002 and
EC Decision 2003/97/EC, "the European Communities changed its customs classification so that
those products, which had previously been classi fied under subheading 0210.90.20 and were subject
to an ad valorem tariff of 15.4%, are now classified under subheading 0207.41.10 and are subject to a
tariff of 102.4€/100kg/net as well as being potentially subject to special safeguard measures pursuant
to Article 5 of the Agreement on Agriculture."
298
145. The ultimate question before us in this dispute is whether the measures at issue are consistent
with the obligations of the European Communities under Article II:1(a) and Article II:1(b) of the
GATT 1994. More specifically, the question is whethe r the measures at issue result in treatment of
the products at issue—namely, "frozen boneless ch icken cuts impregnated with salt, with a salt
content of 1.2% – 3%" 299—that is less favourable than that provided for under heading 02.10 of the
EC Schedule, because these measures subject the products at issue to duties that are in excess of those
provided for in the EC Schedule and, potentially, to special safeguard measu res. Resolving this
question requires us to interpret heading 02.10 of the EC Schedule, which, like all the Schedules of
the Members of the World Trade Organization ("WTO"), is an integral part of the GATT 1994 as well
as of the WTO Agreement, by virtue of Article II:7 of the GATT 1994.300
146. It is not in dispute in this case that, if the products at issue are covered by the tariff
commitment contained in heading 02.07 of the EC Schedule, and not by the one contained in
heading 02.10 of the EC Schedule, the tariff treatme nt accorded to the products at issue, under the
European Communities' measures ch allenged by Brazil and Thailand, would be less favourable than
that provided for in the EC Schedule and that, accordi ngly, such treatment would be inconsistent with
the European Communities' obligations under Articles II:1(a) and II:1(b) of the GATT 1994.301
147. The critical issue in this dispute is the meani ng of the term "salted" in heading 02.10 of the
EC Schedule. Relying on the customary rules of in terpretation codified in Articles 31 and 32 of the
Vienna Convention, the Panel first examined the ordinary m eaning of the term "salted", including its

297European Communities' appellant's submission, para. 47. Brazil and Thailand have not contested
this assertion.
298Panel Reports, para. 7.3.
299Ibid. para. 7.36.
 300Appellate Body Report, EC – Computer Equipment, para. 84.
301Panel Reports, para. 7.75.

"factual context". Thereafter, the Panel undertook an interpretation of that term in the light of its
context; relevant subsequent practice; "object and purpose" of the WTO Agreement and the
GATT 1994; and finally, the circumstances of the conclusion of the WTO Agreement . The Panel
concluded, in essence, that the products at issue fe ll under heading 02.10 of the EC Schedule and that
the European Communities had provided, through th e challenged measures, treatment less favourable
than that provided for in the EC Schedule. The European Communities challenges the Panel's
interpretative approach and all of the Panel's conc lusions concerning the interpretation of the term
"salted" in heading 02.10 of the EC Schedule. 302 Brazil and Thailand each appeals certain aspects of
the Panel's interpretation of that term, and, furt hermore, both appeal the Panel's findings concerning
the measures and the products falling within the Panel's terms of reference.
148. In our analysis, we first address Brazil's and Thailand's claims concerning the Panel's terms of
reference. We next examine the Panel's interpreta tion of the term "salted" in heading 02.10 of the
EC Schedule; in so doing, first, we examine the European Communities' appeal concerning the
Panel's finding on the ordinary meaning of the te rm "salted", including its "factual context".
Secondly, we review the Panel's interpretation of th at term in its context, considering the arguments
raised by the European Communities as well as by Br azil and Thailand. Thirdly, we review the
Panel's interpretation of the term "salted" in the light of the object and purpose of the WTO Agreement
and the GATT 1994. Finally, we address the Panel's analysis under Article 32 of the Vienna
Convention as to the "circumstances of [the] conclusion" of the treaty. Fourthly, we examine the
Panel's findings concerning "subsequent practice".
VII. Terms of Reference
149. We begin with the appeals concerning the Panel's finding on the measures covered by its
terms of reference.
A. Measures Within the Terms of Reference
150. There is no dispute in this case that the follo wing two measures are within the Panel's terms
of reference: EC Regulation 1223/2002 and EC Decision 2003/97/EC. 303 The first measure,
EC Regulation 1223/2002, provides that "boneless chicken cuts, frozen and impregnated with
salt in all parts [with] a salt content by weight of 1.2% to 1.9%" shall be classified under

302More specifically, whether this term in heading 02.10 implies that salting ensures, by itself,
preservation or long-term preservation of meat.
303EC Regulation 1223/2002, adopted on 8 July 2002, was published in the Official Journal of the
European Communities on 9 July 2002, and entered into force on the twentieth day following its publication.
EC Decision 2003/97/EC was adopted on 31 January 2003, and was published on 12 February 2003.

subheading 0207.41.10 of the European Commun ities' Combined Nomenclature. The second
measure, EC Decision 2003/97/EC, is a decision of the European Communities' Commission directed
to the Federal Republic of Germany, requiring the withdrawal of 66 BTI notices issued by the German
customs authority that classified frozen chicken cuts with a salt content between 1.9 and 3 per cent as
"salted" meat under heading 02.10 of the EC Schedule. For convenien ce, we will refer to these two
measures within the Panel's terms of reference as the "two original measures".
151. Before the Panel, Brazil and Thailand argued that two subsequent measures also fell within
the Panel's terms of reference, namely, EC Regulations 1871/2003 and 2344/2003.
304 We will refer to
these two measures as the "two subsequent measure s". The first of these measures, EC Regulation
1871/2003, amends Additional Note 7 to Chapte r 2 of the European Communities' Combined
Nomenclature—originally introduced into the Co mbined Nomenclature by EC Regulation 535/94—
by adding, at the end of the Note, the phrase "p rovided it is the salting which ensures long-term
preservation". As a result, the amended Additional Note 7 reads as follows:
For the purposes of heading 0210, the term "...salted..." mean[s] meat
and edible meat offal deeply and homogenously im pregnated with
salt in all parts and having a total sal t content of not less than 1.2%
by weight, provided it is the salting which ensures long-term
preservation.305 (emphasis added)
152. The second measure, EC Regulation 2344/2003, states, inter alia , that the amendment to
Additional Note 7, inserted into the old Combined Nomenclature, is also inserted into the new
Combined Nomenclature, adopted by Commission Regulation (EC) No. 1789/2003.306

304EC Regulation 1871/2003 was published on 23 October 2003 and entered into force on the twentieth
day following its publication. EC Regulation 2344/2003 was published on 30 December 2003 and entered into
force on 1 January 2004. Brazil's and Thailand's requests for the establishment of a panel were made on
22 September 2003 and 28 October 2003, respectively.
305According to the European Communities, the purpose of this Regulation was to:
... confirm and clarify that the correct in terpretation of the term "salted" in
heading 02.10 was salting in order to ensure the preservation of the product.
This regulation was considered necessa ry to avoid customs officials or
traders reading the additional note in isolation from the headings as
consistently interpreted by the European Court of Justice and the
Commission.
(European Communities' first written submission to the Panel, para. 99)
 306The European Communities explained that Commission Regulation (EC) No. 1789/2003 "reproduces
the complete version of the Combined Nomenclature fo r the year 2004". (European Communities' response to
Question 33 posed by the Panel, Panel Reports, pp. C-84-C-85) This Regulation was adopted on 11 September
2003 and entered into force on 1 January 2004. EC Regulation 2344/2003—the second measure—makes
certain changes to the complete version of the Combined Nomenclature for 2004 "in order to take account of
changes to the Combined Nomenclature in force in 2003 which were made after 11 September 2003." (Ibid.)

153. The Panel rejected the claims of Brazil a nd Thailand, finding that the two subsequent
measures did not fall within its terms of referen ce. The Panel relied on previous Appellate Body
Reports dealing with amendments to measures identif ied in the panel request, indicating that, in order
for a panel's terms of reference to include such amendments, the terms of reference "must be broad
enough".307 The Panel stated that Brazil's and Thailand's respective panel requests were "much more
narrowly drafted" than the "b roadly worded" panel requests at issue in previous cases 308, where the
panels had found that measures not identified speci fically in the panel requests were nevertheless
within their terms of reference. As a result, th e Panel concluded that both Brazil's and Thailand's
panel requests were "not broad enough to include"309 the subsequent measures.
154. On appeal, Brazil and Thailand argue that the measures challenged are not merely the
measures identified in their respective panel requests but, rather, those that change in classification
and tariff treatment of frozen salted chicken cuts. Thus, the violation alleged by Brazil and Thailand
was that such change in classification and tariff tr eatment resulted in the products being accorded less
favourable treatment than that provided under head ing 02.10 of the EC Schedule. Relying on the
Appellate Body Report in Chile – Price Band System , Brazil and Thailand argue that the two
subsequent measures are "in essence the same" 310 as the two original measures and have the "same
effect" as the two original measures in that they result in the same violation as the two original
measures.311
155. The text of Article 6.2 of the DSU provides in relevant part:
The request for the establishment of a panel shall be made in writing.
It shall indicate whether consultations were held, identify the specific
measures at issue and provide a brief summary of the legal basis of
the complaint sufficient to present the problem clearly.

307Panel Reports, paras. 7.26-7.27. The panel also referred to a second condition, namely, that
inclusion of such amendments "is necessary to secure a positive resolution to the dispute" but did not rely on
this condition. (Ibid., para. 7.27)
308Ibid., para. 7.28.
309Ibid.
310Brazil's other appellant's submission, paras. 21, 28, and 30-32; Thailand's other appellant's
submission, paras. 30-37.
311Brazil's other appellant's submission, para. 34; Th ailand's other appellant's submission, paras. 26
and 28, and heading III.A.3(b).

Article 6.2 of the DSU has two main requirements rele vant to this dispute, namely, the identification
of the specific measures at issue and the provision of a brief summary of the legal basis of the
complaint (or the claims).
312 Together, they constitute the "mat ter referred to the DSB", which forms
the basis for a panel's terms of reference under Article 7.1 of the DSU. 313 The Appellate Body has
observed previously that the need for precision in panel requests flows from the two essential
purposes of the terms of reference, namely, to define the "scope of the dispute" and to serve the "due
process objective of notifying the parties and third pa rties of the nature of a complainant's case."314 In
our view, the clear identification of the specific measur es at the outset is central to define the scope of
the dispute to be addressed by a panel.
156. The term "specific measures at issue" in Ar ticle 6.2 suggests that, as a general rule, the
measures included in a panel's terms of reference must be measures that are in existence at the time of
the establishment of the panel. 315 However, measures enacted subse quent to the establishment of the
panel may, in certain limited circumstances, fall with in a panel's terms of reference. Indeed, the
Appellate Body addressed such a circumstance in Chile – Price Band System .316 Recognizing the
requirement that a panel request must identify the "specific measures at issue" under Article 6.2, the
Appellate Body examined in that case the rela tionship between the original measure and the
subsequent amendment to that measure, and found that:

312The Appellate Body stated in Korea – Dairy that:
When parsed into its constituent parts, Article 6.2 may be seen to impose the
following requirements. The request must: (i) be in writing; (ii) indicate
whether consultations were held; (iii) identify the specific measures at
issue; and (iv) provide a brief summary of the legal basis of the complaint
sufficient to present the problem clearly.
(Appellate Body Report, Korea – Dairy, para. 120)
313Appellate Body Report, Guatemala – Cement I, para. 72.
314Appellate Body Report, US – Carbon Steel, para. 126 (quoting Appellate Body Report, Brazil –
Desiccated Coconut , DSR 1997:I, 167, at 186 (emphasis omitted); and referring to Appellate Body Report,
EC – Bananas III, para. 142).
315These measures should also have been the subject of consultations prior to the establishment of the
panel, although the Appellate Body has held that there is no need for a " precise and exact identity" between the
measures addressed in consultations and the measures identified in the panel request. (Appellate Body Report,
316Appellate Body Report, Chile – Price Band System, paras. 126-144.

... Chile's price band system remains essentially the same after the
enactment of Law 19.772. The meas ure is not, in its essence, any
different because of that Amendment. Therefore, we conclude that
the measure before us in this a ppeal includes Law 19.772, because
that law amends Chile's price band system without changing its
essence.
317 (original emphasis)
157. Thus, the Appellate Body found that, where an original measure had merely been amended by
a subsequent measure and the amendment did not, in any way, change the essence of the original
measure, the measure in its amended form could constitute the "specific measure[] at issue" identified
in the panel request. 318
158. In our view, the case before us is characterized by circumstances different from those in
Chile – Price Band System . The two subsequent measures in this dispute make no explicit reference
to the two original measures, which continue to remain in force. Moreover, the two subsequent
measures have legal implications different from those of the two original measures: the first of the
original measures—EC Regulation 1223/2002—specifies a certain classification for a particular
product—namely, frozen boneless chicken cuts with a salt content of 1.2 to 1.9 per cent—and the
second—EC Decision 2003/97/EC—requires the withdrawal of BTIs providing for a different
classification of a product considered to be a si milar product—namely, frozen boneless chicken cuts
with a salt content of 1.9 to 3 per cent. In cont rast, the two subsequent measures amend the European
Communities' Combined Nomenclature and cover all types of salted meat falling under heading 02.10
of the Combined Nomenclature
319, whereas the two original measur es are limited to frozen boneless
salted chicken cuts.

317Appellate Body Report, Chile – Price Band System, para. 139.
In that dispute, the Appellate Body also quoted with approval the panel in Argentina – Footwear (EC).
That panel had decided to examine modifications made to the measure at issue during the panel proceedings on
the ground that the modifications in question did:
… not constitute entirely new safeguard measures in the sense that they
were based on a different safeguard investigation, but are instead
modifications of the legal form of the original definitive measure, which
remains in force in substance and which is the subject of the complaint.
(Panel Report, Argentina – Footwear (EC), para. 8.45)
318In doing so, the Appellate Body observed that it "[did] not mean to condone a practice of amending
measures during dispute settlement proceedings ... with a view to shielding a measure from scrutiny by a panel
or by [the Appellate Body]." At the same time, the Appellate Body made clear that it was not suggesting that
this had occurred in that dispute. (Appellate Body Report, Chile – Price Band System, para. 144)
319Moreover, one of two original measures is a "Decisi on" directed at one indi vidual Member State of
the European Communities, namely the Federal Republic of Germany, whereas the two subsequent measures
are "Regulations" that have a general application.

159. We are, therefore, not persuaded that the two subsequent measures in this case can be
considered as amendments to the two original measures—as were the measures at issue in Chile –
Price Band System—or that the two sets of measures are, in essence, the same.
320
160. Brazil and Thailand also argue that the two sub sequent measures fall within the Panel's terms
of reference, because they have the "same effect" and bring about th e same result as the two original
measures, namely the (re)classification of the pro ducts at issue. Even assuming that Brazil and
Thailand are correct that the two subsequent meas ures have the "same effect" as the two original
measures insofar as frozen boneless chicken cuts ar e concerned, we fail to see a legal basis for
applying such a test. In our view, the notion of measures having the "same effect" is too vague and
could undermine the requirement of specific ity and the due process objective enshrined in
Article 6.2.321
161. Brazil and Thailand also refer to Articles 3.4 a nd 3.7 of the DSU and argue that the principle
of "satisfactory settlement of the matter" and of "secur[ing] a positive solution to the dispute" supports
the inclusion of the two subsequent measures in the Panel's terms of reference in this case. We agree
that a positive and effective resolution of a dispute is one of the key objectives of the WTO dispute
settlement system.322 However, this objective cannot be pursued at the expense of complying with the
specific requirements and obligations of Article 6.2. Moreover, in this case, we believe that the non-
inclusion of the two subsequent measures in the Panel's terms of reference would not hinder a positive
resolution of this dispute.
162. For these reasons, we uphold the Panel's finding, in paragraph 7.37 of the Panel Reports, that
the Panel's terms of reference do not include EC Regulations 1871/2003 and 2344/2003.

320Nor do we consider that the two subsequent measures are "modifications of the legal form of the
original definitive measure", as in the dispute in Argentina – Footwear (EC). See supra, footnote 317.
321Indeed, the Appellate Body has stated that:
[t]o the extent that a Me mber's complaint centres on the effects of an action
taken by another Member, that complaint must nevertheless be brought as a
challenge to the measure that is the source of the alleged effects.
(Appellate Body Report, US – Gambling, para. 123) (original emphasis)
322Article 3.4 of the DSU stipulates that "[r]ecommendations or rulings made by the DSB shall be
aimed at achieving a satisfactory settlement of the matter". Article 3.7 of the DSU provides that "[t]he aim of
the dispute settlement mechanism is to secure a positive solution to a dispute."

B. Products Within the Terms of Reference
163. As regards the question of the specific products within its terms of reference, the Panel
concluded that the measures within its terms of reference "determine the products that are within [its]
terms of reference", and that, therefore, the pr oducts at issue are "frozen boneless chicken cuts
impregnated with salt, with a salt content of 1.2% – 3%" 323 and are not "frozen boneless salted
chicken cuts that have been deeply and homogenously impregnated with salt in all parts with a total
salt content of not less than 1.2%", as claimed by Brazil and Thailand.324
164. Brazil and Thailand appeal from this finding a nd argue that, although Article 6.2 of the DSU
does not explicitly require that the products at issue be identified in the panel request, in the past, the
Appellate Body has relied on the product description contained in the panel request to determine the
scope of the measure at issue. Moreover, if the pr oducts at issue are in fact described in the panel
request, then those products constitu te the products within the panel' s terms of reference. Brazil and
Thailand refer to the Appellate Body's finding in EC – Computer Equipment as support for their view
that, "in order to identify 'the specific measure s at issue', it may ... be necessary to identify the
products subject to the measures in dispute". 325 Brazil also emphasizes that the "rationale" for the
applicable tariff classification of the products at i ssue, explicitly set out in the two measures found by
the Panel to be within its terms of reference, is not the specific salt content, but the principle of
preservation.326 Hence, the measures at issue are not limited to frozen boneless chicken cuts
impregnated with salt, with a salt content of 1.2 to 3 per cent.
165. We are not persuaded by these arguments. Article 6.2 of the DSU does not refer to the
identification of the products at issue; rather, it re fers to the identification of the specific measures at
issue. Article 6.2 contemplates that the identifica tion of the products at issue must flow from the
specific measures identified in the panel request. Ther efore, the identification of the product at issue
is generally not a separate and distinct element of a panel's terms of reference; rather, it is a
consequence of the scope of application of the speci fic measures at issue. In other words, it is the
measure at issue that generally will define the product at issue.

323Panel Reports, para. 7.36.
324Ibid., para. 7.34.
325Appellate Body Report, EC – Computer Equipment , para. 67 (quoted in Brazil's other appellant's
submission, para. 64; and in Thailand's other appellant's submission, para. 61).
326Brazil's other appellant's submission, para. 49.

166. At the same time, we acknowledge that the Appellate Body held, in EC – Computer
Equipment, that, with respect to certain WTO obligations, in order to identify the specific measures at
issue, it may be necessary also to identify the products at issue.
327 In that case, however, the measures
at issue were individual classification decisions by customs authorities in the European Communities,
rather than legislative or regulatory measures of general application as in this case. The Appellate
Body held:
... that "measures" within the meaning of Article 6.2 of the DSU are
not only measures of general application, i.e., normative rules, but
also can be the application of tariffs by customs authorities. Since
the request for the establishment of a panel explicitly refers to the
application of tariffs on LAN e quipment and PCs with multimedia
capability by customs authorities in the European Communities, we
agree with the Panel that the measures in dispute were properly
identified in accordance with the requirements of Article 6.2 of the
DSU.
328 (footnote omitted)
167. We believe that, in circumstances in which a series of decisions of customs authorities are
under challenge, it may be necessary to identify the products at issue in order to distinguish the
contested measures (for example, individual classifi cation decisions by customs authorities) from
other measures (different individual classification d ecisions by customs authorities). By contrast, in
the present dispute, the contested measures are not individual classification decisions by customs
authorities but, rather, (i) a generally applicable legal instrument (EC Regulation 1223/2002), as well
as (ii) a decision requiring a Member State of the European Communities to withdraw a series of BTIs
(EC Decision 2003/97/EC). These two measures defi ne the products to which they apply, namely
frozen boneless chicken cuts with a salt content of 1.2 to 1.9 per cent, and frozen boneless chicken
cuts with a salt content of 1.9 to 3 per cent, respectively. Thus, it is evident that these products, which
are explicitly mentioned in the specific measures iden tified in the panel requests, are the ones at issue
in the present dispute.

327The Appellate Body stated in EC – Computer Equipment:
We note that Article 6.2 of the DSU does not explicitly require that the
products to which the "specific measur es at issue" apply be identified.
However, with respect to certain WTO obligations, in order to identify "the
specific measures at issue", it may also be necessary to identify the products
subject to the measures in dispute.
(Appellate Body Report, EC – Computer Equipment, para. 67) (original emphasis)
328Ibid., para. 65.

168. We note Brazil's argument that the criterion of "preservation" set out in the European
Communities' measures applies also to frozen bonel ess chicken cuts with a salt content above 3 per
cent.329 This fact is not disputed by the European Co mmunities. It cannot, therefore, be excluded in
the abstract that, pursuant to the "preservation" criterion, the European Communities might classify
chicken meat products with a salt content above 3 per cent in the same manner as meat products with
a salt content between 1.2 and 3 per cent. 330 However, given that no measures applicable to meat
products with a salt content above 3 per cent were identified in the panel requests, there is no basis for
findings by the Panel or by the Appellate Body th at this dispute covers also frozen boneless chicken
cuts with a salt content above 3 per cent.
169. In the light of the above, we uphold the Panel's finding, in paragraph 7.37 of the Panel
Reports, that the products covered by the Panel's terms of reference are those covered by the specific
measures at issue, namely, frozen boneless chicken cuts im pregnated with salt, with a salt content of
1.2 to 3 per cent.
VIII. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention
A. The Ordinary Meaning of the Term "Salted" in Heading 02.10 of the EC Schedule
170. The European Communities appeals the Panel's interpretation of the term "salted" in
heading 02.10 of the EC Schedule.
171. The Panel began its analysis by stating that it would seek to ascertain the ordinary meaning of
the term "salted" in heading 02.10 of the EC Schedule pursuant to Article 31(1) of the Vienna
Convention. The Panel stated that it would consider "the remaining relevant terms in that
concession"—namely, "in brine", "dried", and "smoked"—as context under Article 31(2) of the
Vienna Convention .331 The Panel furthermore noted that Br azil and Thailand did not consider that
"the result of the interpretative exercise will differ depending upon whethe r the terms other than
'salted' in heading 02.10 are assessed as part of the ordinary meaning under Article 31(1) of the
Vienna Convention or as context under Article 31(2)."332

329The term used in the two European Communities' m easures within the Panel's terms of reference is
"long-term conservation".
330We note in this context that, according to the Eu ropean Communities, boneless chicken cuts with a
salt content of more than 3 per cent are not commerci ally traded in the European Communities. (European
Communities' response to Question 27 posed by the Pane l, Panel Reports, p. C-82; see also Panel Reports,
footnote 206 to para. 7.133)
331Panel Reports, para. 7.108.
332Ibid. (footnote omitted)

172. The Panel divided its analysis of the "ordinar y meaning", pursuant to Article 31(1) of the
Vienna Convention , into two parts. First, the Panel examined the "ordinary meaning of the term
'salted' in subheading 0210.90.20 of the EC Schedule"
333; in this part of its analysis, the Panel
examined, exclusively, dictionary definitions of the term "to salt", finding that "the ordinary meaning
of the term 'salted' includes to season, to add sa lt, to flavour with salt, to treat, to cure
or to preserve". 334 Secondly, in a section entitled "Factual context for the consideration of the
ordinary meaning" 335, the Panel examined three aspects, na mely, the "products covered by the
concession contained in heading 02.10"336; the "flavour, texture, [and] other physical properties" 337 of
the products; and "preservation".338
173. The Panel concluded that "in essence, the ordinary meaning of the term 'salted' when
considered in its factual context indicates that th e character of a product has been altered through the
addition of salt." 339 The Panel further found that "there is nothing in the range of meanings
comprising the ordinary meaning of the term 'salted' that indicates that chicken to which salt has been
added is not covered by the concession contai ned in heading 02.10 of the EC Schedule." 340 At the
same time, the Panel held that the ordinary meani ng of the term "salted" was not dispositive of the
question whether or not the specific products at issue were covered by the concession in
heading 02.10.
1. Analysis of the Ordinary Meaning and "Factual Context" of the Term
"Salted"
174. On appeal, the European Communities argues that the analysis of "ordinary meaning" under
the Vienna Convention does not contemplate an analysis of th e "factual context" of a treaty term and
that the "factual context", as identified by the Panel, is "not relevant" for determining the ordinary
meaning of the term "salted". 341 The European Communities contends that the Panel, under the
heading "factual context", took into account elem ents that are not to be taken into account for
purposes of ascertaining the ordinary meaning of a treaty term.

333Panel Reports, paras. 7.112-7.116.
334Ibid., para. 7.116.
335Ibid., heading VII.G.3(a)(iii) and paras. 7.140-7.149.
336Ibid., para. 7.140.
337Ibid., paras. 7.141-7.145.
338Ibid., paras. 7.146-7.149.
339Ibid., para. 7.150.
340Ibid., para. 7.151.
341European Communities' response to questioning at the oral hearing

175. We recall that Article 31(1) of the Vienna Convention stipulates that:
A treaty shall be interpreted in good faith in accordance with the
ordinary meaning to be given to the terms of the treaty in their
context and in the light of its object and purpose.
The Appellate Body has observed that di ctionaries are a "useful starting point"
342 for the analysis of
"ordinary meaning" of a treaty term, but they are not necessarily dispositive. The ordinary meaning of
a treaty term must be ascertained according to the pa rticular circumstances of each case. Importantly,
the ordinary meaning of a treaty term must be seen in the light of the intention of the parties "as
expressed in the words used by them against the light of the surrounding circumstances".343
176. Having said this, we would agree with the Eur opean Communities that there is no reference
in the Vienna Convention to "factual context" as a separate analytical step under Article 31.
Nevertheless, we do not be lieve that the Panel was incorrect to consider elements such as the
"products covered by the concession contained in heading 02.10", "flavour, texture, [and] other
physical properties" of the products falling under h eading 02.10, and "preservation" when interpreting
the term "salted" as it appears in heading 02.10. The Panel's consideration of these elements under
"ordinary meaning" of the term "salted" complemented its analysis of the dictionary definitions of that
term. In any event, even if we were to agree with the European Communities that these elements are
not to be considered under "ordinary meaning", they certainly could be considered under "context".
Interpretation pursuant to the customary rules codified in Article 31 of the Vienna Convention is
ultimately a holistic exercise that should not be mechanically subdivided into rigid components.
Considering particular surrounding circumstances under the rubric of "ordinary meaning" or "in the
light of its context" would not, in our view, change the outcome of treaty interpretation. Therefore,
we find no error in the Panel's interpretive approach.
2. The European Communities' Claim under Article 11 of the DSU
177. Having addressed the issue of "factual context", we turn to the European Communities' claims
under Article 11 of the DSU. The European Comm unities submits that "a number of the Panel's
conclusions amount to an egregious distortion of the facts before the Panel, clearly inconsistent with
Article 11 [of the] DSU". 344 In this respect, the European Co mmunities challenges three statements

342Appellate Body Report, US – Softwood Lumber IV , para. 59. See also Appellate Body Report,
US – Offset Act (Byrd Amendment), para. 248; and Appellate Body Report, US – Gambling, para. 166.
343Lord McNair, The Law of Treaties (Oxford Clarendon Press, 1961), p. 365.

made by the Panel in the context of its analysis of the "factual context" of the term "salted" in
heading 02.10 of the EC Schedule.
178. The first of these conclusions is the Panel's statement that "it appears that even small
quantities of salt may have a preservative effect".
345 The European Communities argues that the Panel
"seriously misrepresent[ed] the technical evidence supplied by [one of the experts]".346
179. The European Communities emphasizes that its expert referred to chicken in a "raw
and chilled state"347 and that his statement does not suppor t what the European Communities views
as the Panel's conclusion that "3% salt, without chilling, would prevent spoilage for a period of a few
days".348
180. On a careful reading of the Panel Reports, we are of the view that the Panel did not find that
"3% salt, without chilling, would prevent spoilage for a period of a few days." In the phrase "3% salt
may prevent spoilage, albeit for a period of only a few days", the Panel does not state explicitly
whether this proposition refers to chilled or unchilled meat; however, in the immediately preceding
sentence, the Panel reproduces a statement by the Eur opean Communities' expert that explicitly refers
to "raw and chilled" meat. As a result, we read th e Panel's conclusion to refer to the same type of
meat as described by the expert, that is, "raw and chilled" meat. We do not, therefore, agree with the
European Communities that the Panel acted inconsiste ntly with its obligations under Article 11 of the
DSU in concluding that "it appears that even small quantities of salt may have a preservative
effect".349

345Panel Reports, para. 7.146.
346European Communities' appellant's submission, para . 63. The Panel explained its observation in a
footnote, which reads as follows:
We do not consider that [the statement that even small quantities of salt may
have a preservative effect is] inconsis tent with those made by the EC's
expert, Professor Honikel, which are contained in Exhibit EC-32. In
particular, Professor Honikel states that "[i]n the raw and chilled state 3%
salt is too low to prevent spoilage for more than a few days." In other
words, Professor Honikel appears to accept that 3% salt may prevent
spoilage, albeit for a period of only a few days.
347European Communities' appellant's submission, para. 64. (emphasis added by the European
Communities)
348Ibid. (emphasis added)
349Panel Reports, para. 7.146.

181. The second statement of the Panel with which the European Communiti es takes issue is the
following, concerning variable salt content and additional means of preservation:
The variable salt content and peri od of preservation that is, in our
view, permissible on the basis of the ordinary meaning of the
concession contained in heading 02.10 when read in its factual
context would seem to explain, at least in part, why certain products
that the European Communities categorizes under heading 02.10
such as parma ham, prosciutto and jamón serrano may require
additional means of preservation.
350
The European Communities points out that "it is not the salt content of these products which means
that additional means of preservation may be used", but that "additional means of preservation" are
not required for those products. 351 The European Communities refers to certain statements by the
European Communities' expert 352 and argues that, in making the a bove-referred factual statement, the
Panel went beyond the bounds of its discretion unde r Article 11 of the DSU and made findings that
are contradicted by the uncontested evidence before it.
182. Thirdly, the European Communities challenges the Panel's statement that the European
Communities acknowledged that products under heading 02.10 may require means of preservation in
addition to salting, and that this circumstance supported the view that a product preserved by salt for
relatively short periods of time is not necessar ily precluded from qualifying under heading 02.10.
353
The European Communities argues that, contrary to the Panel's statement, what the European
Communities acknowledged was that "preservation by sa lting, etc., did not imply that meat could not

350Panel Reports, para. 7.149.
352The European Communities refers to the following statement by its expert:
Parma ham, prosciutto and jamón serrano
All these products are shelf-stab le for many months at ambient
temperatures. They spoil chemically by development of rancidity and not
by the action of micro-organisms.
(Ibid., para. 66) (footnote omitted)
353The Panel stated that:
... the European Communities' acknowle dgement that products covered by
heading 02.10 may require means of preservation in addition to that effected
through the addition of salt provides some support for the view that a
product preserved by salt for relatively short periods of time is not
necessarily precluded from qualifying under heading 02.10 of the
EC Schedule.

be further preserved by other means."
354 The European Communities recalls scientific evidence
before the Panel that "preserved meat might be refri gerated or packaged because of the steps, such as
slicing, which had been taken to prepare it for retail sale." 355 According to the European
Communities, there is no logical connection betwee n these observations and the Panel's conclusion
that "a product preserved by salt for relatively s hort periods of time is not necessarily precluded from
qualifying under heading 02.10 of the EC Schedule."356
183. We understand the Panel to have concluded that "there is nothing to suggest that products
preserved by salt for relatively short periods of time are precluded from qualifying under ...
heading 02.10".357 In order to confirm this conclusion, the Panel looke d at certain products that the
European Communities classifies under heading 02.10. 358 In doing so, the Panel stated that these
products "may require means of preservation in addition to [salting]", which the European
Communities acknowledged as much, and that this fact was "explain[ed]" by the "variable salt content
and period of preservation".359
184. We observe that the Panel refers to the "European Communities' acknowledgement that
products covered by heading 02.10 may require mean s of preservation in addition to that effected
through the addition of salt" 360; however, the European Comm unities expressly stated that it " does
not agree with Thailand that [Parma ham, prosciutto , and jamón serrano] requi re additional means of
preservation".361 In fact, the European Communities speaks of "meat that has been preserved for the
long-term (by salting, drying, etc.)" and that is, subsequently, "further preserved (by chilling or even
freezing) ... so that it may be preserved for an even longer term ".362 Hence, we agree with the
European Communities that the Panel's reasoning do es not accurately reflect all of the European
Communities' statements before it.

354European Communities' appellant's submission, para. 70. (footnote omitted)
355Ibid.
356Panel Reports, para. 7.149.
357Ibid., para. 7.148.
358These products include Parma ham, prosciutto, and jamón serrano.
359Panel Reports, para. 7.149.
360Ibid. (emphasis added; footnote omitted)
361European Communities' response to Question 96 posed by the Panel, Panel Reports, p. C-110,
para. 17. (emphasis added)
362European Communities' response to Question 98 posed by the Panel, Panel Reports, p. C-111,
para. 21. (emphasis added)

185. Secondly, the Panel's reasoning appears to be based on an implicit similarity between the
products at issue, on the one hand—that is, frozen and salted chicken cuts—and products such as
Parma ham, prosciutto, and jamón serrano, on the other hand. However, according to the evidence on
the Panel record, in their unfrozen state, these two gr oups of products are rather different in terms of
how quickly they are affected by spoilage. 363 The Panel's statements do not sufficiently explain how
the issue of "additional means of preservation" supports the proposition that "product[s] preserved by
salt for relatively short periods of time [a re] not necessarily precluded from qualifying under
heading 02.10 of the EC Schedule."
364
186. We observe that the Panel statements challenged by the European Communities were made in
addition to, and as support for, a conclusion that the Panel had reached previously, on the basis of
distinct and separate considerations. The statemen ts contested by the European Communities contain
some inconsequential inaccuracies, which do not, in our view, undermine the remainder of the Panel's
analysis of what the Panel referred to as the "factual context". Overall, we therefore do not find that
the Panel acted inconsistently with its obligations under Article 11 of the DSU.
3. Conclusion Concerning the Ordinary Meaning

187. In the light of the above considerations, we see no reason to disturb th e Panel's conclusion
concerning the ordinary meaning of the term "sal ted", in paragraph 7.150 of the Panel Reports,
that "in essence, the ordinary meaning of the term 'salted' when considered in its factual context
indicates that the character of a product h as been altered through the addition of salt" 365; and, in
paragraph 7.151 of the Panel Reports , that "there is nothing in the range of meanings comprising the
ordinary meaning of the term 'salted' that indicates that chicken to which salt has been added is not
covered by the concession contained in heading 02.10 of the EC Schedule."

363According to the Panel's statements mentioned above, 3 per cent of salt may prevent spoilage in meat
products, albeit for only a few days. (Panel Reports, footnote 249 to para. 7.146) See also supra, para. 178 and
footnote 346 thereto. In contrast, Parma ham, prosciutto, and jamón serrano appear to have a much longer shelf-
life in their unfrozen state than "only a few days". (The European Communities' expert stated that the shelf-life
of these products is several months. (Exhibit EC-32 submitted by the European Communities to the Panel))
364Panel Reports, para. 7.149.
365We note, in this respect, that in para. 7.141 of the Panel Reports, the Panel stated that "factual
context indicates that, in order for a product to be 'salted' within the meaning of the concession contained in
heading 02.10 of the EC Schedule, the character of that product must have been altered through the addition of
salt as compared to that product's fresh state prior to the addition of salt." (emphasis added)

B. "Context"
188. Having considered the Panel's interpretation of th e ordinary meaning of the term "salted" in
heading 02.10 of the EC Schedule, we now turn to the Panel's interpretation of that term in its context.
We will first recapitulate the Panel's findings a nd the arguments on appeal before providing our
analysis of the relevant issues.
189. In interpreting the term "salted" in its context, pursuant to Article 31(2) of the Vienna
Convention, the Panel considered "the terms of relevant aspects of the EC Schedule", namely, the
"other terms" contained in heading 02.10 of the EC Schedule, the structure of Chapter 2 of the
EC Schedule, as well as "other parts of the EC Schedule".
366 The Panel then proceeded to consider
whether there are any other agreements or instrume nts that qualify as "context" under Article 31(2) of
the Vienna Convention; in that category, the Panel examined the Harmonized System367 as well as the
Schedules of WTO Members other than the European Communities. The Panel concluded, overall,
that its analysis of the "context" of the term "salte d" did not "add[] to [the] conclusions that [it had
already drawn] regarding the ordinary meaning of the term 'salted'", and that the context of that term
did not "indicate that [the] concession [in head ing 02.10 of the EC Schedule] is necessarily
characterized by the notion of long-term preservation".368
190. The European Communities, on the one hand, and Brazil and Thailand, on the other hand,
appeal from this finding, as well as aspects of the Panel's reasoning concerning the context of the term
"salted". In essence, the European Communities argu es that various elements of the context of the
term "salted" indicate that the term is characterized by the notion of "preservation". 369 The European
Communities also argues that, contrary to the Panel's finding, the structure of Chapter 2 of the
Harmonized System "makes it clear" that the term "salted" refers to "preservation".
370 In contrast,

366Panel Reports, paras. 7.155, 7.157, 7.164, and 7.174.
367The Panel decided to treat the Harmonized System "as if it qualifies as 'context' under Article 31(2)
368Ibid., para. 7.245. The Panel then turned to an analysis of the "[m]atters to be taken into account
together with the context", most notably "subsequent prac tice". We review this analysis in Section X of this
Report.
369More specifically, the European Communities appeals from the Panel's finding that the term "in
brine", in heading 02.10 of the EC Schedule, does not include the notion of preservation. The European
Communities also challenges the Panel's finding that the dictionary meanings of the terms in heading 02.10
("salted, in brine, dried, and smoked") are "broader than just pertaining to preservation", contending that all the
terms in heading 02.10 "have in common that they refer to preservation". (European Communities' appellant's
370Ibid., para. 74.

Brazil and Thailand argue that these same contextual el ements show clearly that the term "salted" is
characterized by the notion of "preparation".371
191. In addressing these arguments, we will first defi ne what constitutes "context". Subsequently,
we will analyze the meaning of the term "salted" in its context.
1. What Constitutes Context for Interpreting the Term "Salted" in Heading
02.10 of the EC Schedule?
192. At the outset, we recall the customary rules of treaty interpretation codified in Articles 31(1),
31(2), and 31(3) of the Vienna Convention:
General rule of interpretation
1. A treaty shall be interprete d in good faith in accordance with
the ordinary meaning to be given to the terms of the treaty in their
context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty
shall comprise , in addition to the text, including its preamble and
annexes:
(a) any agreement relating to the treaty which was made
between all the parties in connection with the conclusion of the
treaty;
(b) any instrument which was made by one or more parties
in connection with the conclusion of the treaty and accepted by
the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding
the interpretation of the treaty or the application of its
provisions;
(b) any subsequent practice in the application of the treaty
which establishes the agreement of the parties regarding its
interpretation;

371Brazil and Thailand contend, in their respective other appellant's submissions, that the Explanatory
Notes to Chapter 2 of the Harmonized System and heading 02.10 of the Harmonized System, read together with
the Chapter Note to Chapter 16 thereof, show that the concept of "preparation" determines the classification
under heading 02.10. (Brazil's other appellant's submission, paras. 79-88; Thailand's other appellant's
submission, paras. 72-84) In this context, Thailand ar gues that the Panel incorrectly assumed that all Notes to
the Harmonized System were Explanatory Notes and, as such, were non-binding. (Thailand's other appellant's
submission, para. 71) Brazil furthermore argues that the evolution of the terms and structure of Chapter 2
indicate that the predecessor to heading 02.10 was also ch aracterized by the notion of "preparation". (Brazil's

(c) any relevant rules of international law applicable in the
relations between the parties. (emphasis added)
193. It is clear from these provisions that the context of the term "salted" in heading 02.10 consists
of the immediate, as well as the broader, context of that term. The immediate context is the other
terms of the product description contained in heading 02.10 of the EC Schedule. The broader context
includes the other headings in Chapter 2 of the EC Schedule, as well as other WTO Member
Schedules.
194. The Panel addressed the question whether the Harmonized System
372 constituted "context" for
interpreting the term "salted" in heading 02.10 of th e EC Schedule. In that respect, Brazil argued that
the Harmonized System constituted "context" with in the meaning of Article 31(2)(b) of the Vienna
Convention; Thailand contended that the Harmonized System qualified as context under Article 31(1)
or under Article 31(3)(c); the European Communitie s held the view that the Harmonized System was
a "relevant rule of international law", within the meaning of Article 31(3)(c). 373 The Panel did not
definitively decide which position was correct, opining that "the outcome of the interpretative exercise
[would not] depend[ ] upon whether [the Panel] classif[ies] the [Harmonized System] as 'context'"
under Articles 31(1), 31(2)(b), or 31(3)(c) of the Vienna Convention. The Panel decided to treat the
Harmonized System "as if it qualifi es as 'context' under Article 31(2)".374 Before the Appellate Body,
in response to questioning at the oral hearing, all participants, and the United States, as third
participant, agreed that the Harmonized System was relevant for interpretation of the terms of the EC
Schedule. The participants took the view that the Harmonized System was context for purposes of
interpreting the terms of the EC Schedule or a "relev ant rule[] of international law applicable in the
relations between the parties" that should be "tak en into account, together with the context", pursuant
to Article 31(3)(c) of the Vienna Convention .375 The United States, as third participant, was of the
view that the Harmonized System was a "supplementa ry means of interpretation", within the meaning
of Article 32 of the Vienna Convention.376

372The Harmonized System Convention entered into force in 1988. The Harmonized System is
administered by the Harmonized System Committee (the "HS Committee"), which was established under the
auspices of the WCO. The HS Committee is composed of representatives from each of the contracting parties to
the Harmonized System. The HS Committee may prop ose amendments to the Harmonized System and may
prepare explanatory notes, classification opinions, or provide other advice to be used as guidance in the
interpretation of the Harmonized System. (Panel Reports, paras. 2.9 and 2.11)
373Ibid., para. 7.189.
374Ibid.
375Responses of the participants to questioning at the oral hearing.
376United States' response to questioning at the oral h earing. China, the other third participant, did not
express a view on this point.

195. The Harmonized System is not, formally, part of the WTO Agreement , as it has not been
incorporated, in whole or in part, into that Agreement. Nevertheless, the concept of "context", under
Article 31, is not limited to the treaty text—namely, the WTO Agreement —but may also extend to
"any agreement relating to the treaty which was made between all the parties in connection with the
conclusion of the treaty", within th e meaning of Article 31(2)(a) of the Vienna Convention , and to
"any instrument which was made by one or more parties in connection with the conclusion of the
treaty and accepted by the other parties as an instrume nt related to the treaty", within the meaning of
Article 31(2)(b) of the Vienna Convention . Moreover, should the criteria in Article 31(3)(c) be
fulfilled, the Harmonized System may qualify as a "relev ant rule[] of international law applicable in
the relations between the parties".
196. The Panel noted that the membership of the Harmonized System is "extremely broad" and
includes the "vast majority of WTO Members". 377 The Panel also pointed out, and no participant to
this proceeding contested, that "the [Harmonized Sy stem] was used as a basis for the preparation of
the Uruguay Round GATT schedules". 378 The Appellate Body made a similar observation in
EC – Computer Equipment, a report on which the Panel relied.379
197. We note that, in 1983, the GATT Contracting Parties took a Decision setting out guidelines
and "special procedures" to facilitate the "wide adoption of the Harmonized System" 380; later, in
1991, they took a Decision on Procedures to Implement Changes in the Harmonized System. 381 The

377Panel Reports, para. 7.187. The European Communities became a Contracting Party to the
Harmonized System Convention in September 1987; Brazil in November 1988; and Thailand in December
1992. The Harmonized System Convention entered into force for the European Communities in January 1988,
for Brazil in January 1989, and for Thailand in January 1993.
378Ibid., para. 7.187.
379See ibid., para. 7.188, where the Panel referred to the Appellate Body's statement that the panel in
EC – Computer Equipment should have considered the Harmonized System and its Explanatory Notes when
interpreting the terms of the EC Schedule, which was also at issue in that case. The Appellate Body further
stated:
We are puzzled by the fact that the Pane l, in its effort to interpret the terms
of [the EC Schedule], did not consider the Harmonized System and its
Explanatory Notes. We note that during the Uruguay Round negotiations,
both the European Communities and the United States were parties to the
Harmonized System . Furthermore, it appears to be undisputed that the
Uruguay Round tariff negotiations were held on the basis of the Harmonized
System's nomenclature and that requests for, and offers of, concessions were
normally made in terms of this nomenclature.
(Appellate Body Report, EC – Computer Equipment, para. 89) (original italics)
380GATT Concessions under the Harmonized Commodity Description and Coding System, Decision of
12 July 1983, L/5470/Rev.1, BISD 30S/17.
381GATT Concessions under the Harmonized Commodity Description and Coding System, Procedures
to Implement Changes in the Harmonized System, Decision of 8 October 1991, L/6905, BISD 39S/300.

close link between the Harmonized System and the WTO agreements is also clear. A number of
WTO agreements that resulted from the Uruguay Ro und negotiations use the Harmonized System for
specific purposes; the Agreement on Rules of Origin (in Article 9), the Agreement on Subsidies and
Countervailing Measures (in Article 27), and the Agreement on Textiles and Clothing (in Article 2
and the Annex thereto) refer to the Harmonized Sy stem for purposes of defining product coverage of
the agreement or the products subject to particular provisions of the agreement.
198. This close link to the Harmonized System is particularly true for agricultural products.
382
Annex 1 to the Agreement on Agriculture, which forms an integral part of that Agreement 383, defines
the product coverage of that Agreement by referenc e to headings of the Harmonized System, both at
the level of whole chapters and at the four-digit le vel in respect of specific products. Moreover, it is
undisputed that the Uruguay Round tariff negotiations for agricultural products were held on the basis
of the Harmonized System and that all WTO Memb ers have followed the Harmonized System in their
Schedules to the GATT 1994 with respect to agricultural products.
199. The above circumstances confirm that, prior to, during, as well as after the Uruguay Round
negotiations, there was broad consensus am ong the GATT Contracting Parties to use the
Harmonized System as the basis for their WTO Sc hedules, notably with respect to agricultural
products. In our view, this consensus constitut es an "agreement" between WTO Members "relating
to" the WTO Agreement that was "made in connection with th e conclusion of" that Agreement,
within the meaning of Article 31(2)(a) of the Vienna Convention . As such, this agreement is
"context" under Article 31(2)(a) for the purpose of interpreting the WTO agreements, of which the
EC Schedule is an integral part. In this light, we consider that the Harmonized System is relevant for
purposes of interpreting tariff commitments in the WTO Members' Schedules.384
200. We now turn to determine the meaning of the term "salted" in the light of the context
provided by WTO law and the Harmonized System.

382In response to questioning at the oral hearing, the participants noted that the so-called Modalities
Paper provides that market access commitments relating to agricultural products had to be based on the
Harmonized System. (Articles 3(3)(i) and 3(3)(ii) of the Modalities for the Establishment of Specific Binding
Commitments Under the Reform Programme, MTN.GNG/MA/W/24, 20 December 1993)
383Article 21.2 of the Agreement on Agriculture states:
The Annexes to this Agreement are hereby made an integral part of this
Agreement.
384In view of this conclusion, we do not find it necessary to determine whether the Harmonized System
could constitute a "relevant rule[] of international la w", within the meaning of Article 31(3)(c) of the Vienna
Convention.

2. The Meaning of the Term "Salted" in Heading 02.10 of the EC Schedule,
Considered in its Context
201. We recall that, in considering the meaning of the term "salted" in heading 02.10 of the
EC Schedule in its context, the Panel first looked at the "other terms contained in heading 02.10 of the
EC Schedule", namely "in brine", "dried", and "smoked". The Panel found it "difficult to identify a
notion [—either preparation or preservation—] that characterizes all the terms in the concession
contained in heading 02.10 of the EC Schedule".
385 The Panel also stated that the structure of
Chapter 2 of the EC Schedule "does not provide any insights regarding the question of whether
'preservation' and/or 'preparation', if either, ch aracterize Chapter 2 and, more particularly, the
concession contained in heading 02.10 of the EC Schedule". 386 The Panel referred as well to certain
aspects of the Harmonized System and found that "inferences cannot be drawn from [the use of the
word 'preservation' in] headings 08.12 and 08.14 wi th respect to the meaning of the term 'salted'". 387
In regard to the General Rules for the Interpreta tion of the Harmonized System, the Panel assumed
that General Rule 3—applicable to situations in which "goods are, prima facie, classifiable under two
or more headings"—was not applicable to the dispute before it. 388 Nor could the Panel find useful
guidance from a consideration of other WTO Members' Schedules.
202. Before commencing our analysis, we observe that the participants to the present dispute put
forward two competing concepts as being "intrinsic " and "central" to all the processes mentioned in
heading 02.10, namely, on the one hand, that of "pre paration" of meat and, on the other hand, that of
"preservation" of meat. 389 The European Communities ar gues that the four processes in
heading 02.10 ("salted", "in brine", "dried", and "s moked") are characterized, and have always been
characterized, by the notion of "preservation", wh ile Brazil and Thailand argue that these processes
are characterized solely by the notion of "preparation".

385Panel Reports, para. 7.162.
386Ibid., para. 7.173.
 387Ibid., para. 7.179.
388Ibid., paras. 7.237-7.238. The Panel also assumed that all parties to the dispute agreed that the
conditions for the application of General Rule 3 were no t fulfilled. On appeal, Brazil and Thailand argue that
the Panel erred in making this assumption. We address this issue infra in paras. 231-234.
389See, for instance, European Communities' appella nt's submission, para. 82; Brazil's appellee's
and Thailand's other appellant's submission, para. 75.

203. No participant provides a clear-cut definition of "preparation" or "preservation", or of the
demarcation between the two concepts.
390 The European Communities uses both the terms
"preservation" and "long-term preservation". The Panel understood the European Communities to
mean by the term "preservation" or "long-term preser vation" that it is preservation of meat for "many
or several months". 391 In response to questioning at the or al hearing, the European Communities
stated that these two terms are to be understood as referring to one and the same concept, and that
they are interchangeable. The European Communiti es argues that "preparation ... is something lesser
than preservation"392, that "preservation is ... a kind of preparation" 393, and that "preservation" is for a
much longer period than temporary preservation for the purposes of transport 394; however, the
European Communities has not indicated for what sp ecific period of time a product would have to be
preserved in order to satisfy the criterion of "preservation".395
204. In turn, Brazil and Thailand have not provided a clear definition of "preparation" and how
"preparation" is to be distinguished from "prese rvation". According to Brazil, "some types and
degrees of preparation may preserve some produc ts" and "preparation" and "preservation" may
"overlap"396; for Thailand, the two concepts are mutually exclusive for the purposes of heading 02.10.
Thailand submits, in the alternative, that "the fact that some types of preparation may incidentally also
result in the preservation of [a] product does not undermine the notion that it is the preparation of that
product that determines its essential character".397

390The Panel found that the concepts of preparation and preserva tion can overlap. (Panel Reports,
paras. 7.114 and 7.162)
391Ibid., para. 7.147.
393Ibid., para. 104.
394European Communities' response to questioning at the oral hearing.
395In response to questions posed by the Panel, the European Communities argued that the time
required for purposes of "preservation" would be "many or several months". (Panel Reports, footnote 251 to
para. 7.147 (referring to European Communities' response s to Questions 49 and 96 posed by the Panel, Panel
Reports, pp. C-91 and C-110))
Furthermore, the European Communities referred to "preservation" as preservation that would keep the
meat much longer than temporary pr eservation until its arrival, although it did not provide further specification
of the time period. (European Communities' response to questioning at the oral hearing)
396Brazil's other appellant's submission, para. 86.
397Thailand's other appellant's submission, paras. 77 and 83.

205. Thus, the central question before us, as it was before the Panel 398, is whether a product must
have been "preserved" by one of the processes referred to in heading 02.10 in order to fall within the
scope of that heading. The concept of "preser vation", as advanced by the European Communities,
implies that the application of the processes in heading 02.10, by itself , must have the effect of
placing the meat in a state of "preservation" for a certain period of time—not specified precisely by
the European Communities—but, in any event, fo r a period exceeding the time of transportation. 399
The European Communities also st ated that "[w]hether the meat is salted for the purpose of
preservation depends in particular on the level of salt content"400 and that, for the products at issue, the
salt content must be "much higher" than 3 per cent.401
206. In contrast, the concept of "preparation", as proposed by Brazil and Thailand, suggests that
meat must only have been subject to one or more of the processes listed in heading 02.10, such that its
character has been altered from its natural state, a nd that the notion of "preservation" by one of these
processes is not a requirement under that heading.402

398The Panel defined that the "critical question" before it was "whether the term 'salted' in the
concession contained in heading 02.10 covers the products at issue which, in turn, will entail a determination of
whether that concession includes the re quirement that salting is for preservation and, more particularly, is for
long-term preservation." (Panel Reports, para. 7.86 (footnote omitted))
399European Communities' appellant's submission, para. 94; European Communities' responses to
questioning at the oral hearing.
400European Communities' response to Question 88 posed by the Panel, Panel Reports, p. C-106,
para. 4. The European Communities also stated that "[i]mpregnation with salt is a necessary, but not sufficient
condition" for preservation, and that "[i]n order to be preserved with salt, meat should be deeply and
homogenously impregnated with a level of salt sufficie nt to ensure long-term preservation". ( Ibid. (original
underlining))
401With respect to the criterion of "preservation" or "l ong-term preservation", we note that the criterion
advocated by the European Communities for the meaning of "salted", in heading 02.10 of the EC Schedule,
is that "salting", by itself, must "ensure long-term preservation, i.e., much higher than 3%". (European
Communities' response to Question 88 posed by the Pane l, Panel Reports, p. C-106, para. 4) The European
Communities' expert's opinion before the Panel was that a minimum salt content of 7 per cent is necessary to
preserve meat. (Panel Reports, para. 7.132) The European Communities stated before the Panel that the
European Communities is not aware that boneless chicken cu ts with a salt content of more than 3 per cent "has
been traded" under heading 02.10. (Ibid., para. 7.133 (referring to European Communities' response to Question
27 posed by the Panel, Panel Reports, p. C-82)) The technical evidence on record shows that, although salt was
"first used with the purpose to preserve meats, ... today its main purpose is to provide a product characterized by
its aroma and flavor" (J. Andrade Silva, Topics on Food Technology (Varela Editora, São Paulo, 2000), p. 181
(Exhibit BRA-16 submitted by Brazil to the Panel)), and th at "regarding food preservation[,][salt] is now less
used solely as a preservative than in combination with other preservatives and preservation methods". (E. Lück
and M. Jager, Chemical Food Preservation: Characteristics, Uses, Effects (Acribia, Zaragoza, 2000), p. 77
(Exhibit BRA-16 submitted by Brazil to the Panel)) See also infra, footnote 411.
402Brazil's other appellant's submission, para. 86; Thailand's other appellant's submission, para. 83.

207. We recall that the Panel concluded that "in essence, the ordinary meaning of the term 'salted'
... indicates that the character of a product h as been altered through the addition of salt".
403 We agree
with this conclusion of the Panel, which is not in appeal.
208. Thus, the question before us can be subdivided into the following two questions: (i) does the
term "salted" in heading 02.10, wh en considered in its context, indicate that meat to which salt has
been added (such that the character of the product h as been altered) is to be considered as "salted",
even if such salting does not place such meat in a state of "preservation"? or (ii) must the salting be
such as to place the meat in a stat e of "preservation"? In our view , a positive answer to the first
question would mean that heading 02.10 is found to include "salted" meat that has not been "salted"
sufficiently to be placed in a state of "preservation", as well as meat that has been "salted" to place
it in a state of "preservation". In contrast, a pos itive answer to the second qu estion suggests a reading
of heading 02.10 that includes only meat that has been placed in a state of "preservation" by salting,
and excludes other "salted" meat.404
209. Therefore, we need to determine whether the c ontext of the term "salted"—or other elements
of the customary rules of treaty interpretation—requi re or permit a reading of the term "salted" in
heading 02.10 of the EC Schedule more narrowly than the ordinary meaning of that term suggests;
that is to say, that the customar y rules of treaty interpretation other than "ordinary meaning" indicate
that "salting" under heading 02.10 contemplates exclusively the notion of "preservation".
(a) The Terms of Heading 02.10 Other than "Salted"
210. With these considerations in mind, we turn to the terms other than "salted" in heading 02.10
of the EC Schedule.

403Panel Reports, para. 7.150.
404We recall that, according to the Panel, the ordinary meaning of the term "salted" does not suggest
that only meat that has been "salted" for purposes of "preservation" will be covered by heading 02.10. The Panel
has also stated that "chicken or poultry to which salt has been added is not necessarily precluded from coverage
under the concession contained in heading 02.10 of the EC Schedule". ( Ibid., para. 7.140) In footnote 227
thereto, the Panel also observed that "there is nothing in the WCO response ... to indicate that ... products [to
which salt has been added] would be excluded from coverage under heading 02.10 of the [Harmonized
System]."
We also note that the European Communities explicitly agrees that "the dictionary definitions of the
term 'salted' include, but are not confined to the no tion of preservation." (European Communities' appellant's
submission, para. 60) The European Communities argues however, that "it is apparent from the rest of
heading 02.10, and the structure of Chapter 2 (that is the context) that 'salted' is used in heading 02.10 to signify
a process of preservation." (Ibid., para. 61)

211. We share the European Communities' disagreement with the Panel's interpretation of the term
"in brine". The Panel held that the notion of "preservation" does not appear in the dictionary
definitions of "in brine". However, we note that the dictionary definition of the term "brine" is "water
saturated or strongly impregnated with salt; salt water". 405 Given that the concept "preservation", as
stated by the Panel, appears in the dic tionary definition for the term "salted" 406, the term "brine" must
include the concept of preservation. We, therefore, are of the view that the term "in brine" does
contemplate "preservation".
212. At the same time, we are not convinced that the terms "dried, in brine and smoked" refer
exclusively to the concept of "preservation". We note that the dictionary meaning of the term "to dry"
is, in relevant part, "to remove the moisture from by wiping, evaporation, draining; preserve (food,
etc.) by the removal of its natural moisture"407; in turn, the dictionary meaning of the term "to smoke"
is to "dry or cure (meat, fish, etc.) by exposure to smoke". 408 The ordinary meanings of these terms
suggest that the relevant processes can be applied to meat in various ways and degrees of intensity,
thereby producing different effects on the meat, effe cts that may or may not place the meat in a state
of "preservation".409 Nor are we persuaded by the European Communities' argument that the terms
"dried" and "smoked", in the present context, "concern [exclusively] means to preserve". 410 It is clear
from the evidence on the record that , while the processes mentioned in heading 02.10—"salted, dried,
in brine and smoked"—may include the notion of "preservation", these processes are also used
extensively to confer special characteristics on meat products. 411 Similar reasoning may also be valid
with respect to the term "smoked".
213. We, therefore, do not agree with the European Communities that the terms of heading 02.10
of the EC Schedule other than "salted", considered alone or together, suggest that the term "salted"

405Shorter Oxford English Dictionary , 5th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2002), Vol. 1, p. 290.
406Panel Reports, para. 7.112.
407Shorter Oxford English Dictionary , 5th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2002), Vol. 1, p. 766.
408Ibid., Vol. 2, p. 2889.
409For instance, the Panel discussed the effects on meat of different levels of salt content and stated that
"the amount of salt needed to preserve a product will differ depending upon for ho w long a particular product
must be preserved." (Panel Reports, paras. 7.146-7.147)
411We note that one of the scientific publications su bmitted by Brazil to the Panel states that "[s]alting
is a food preservation process that has been known since ancient times, but is ... used today ... also to confer
special organoleptic characteristic s to food". (Andrade Silva, supra, footnote 401, p. 181) Another scientific
publication submitted by Brazil to the Pa nel states that "salt ... is used as [a flavour enhancer] rather than as a
preservative ingredient". (Lück and Jager, supra, footnote 401, p. 77)

must be read as referring exclusively to products that have a level of salt content sufficient to ensure
"preservation" by salting.
(b) The Structure of Chapter 2 of the EC Schedule and the Harmonized
System and the Relevant Notes Thereto
214. We now turn to consider whether the structure of Chapter 2 of the EC Schedule and
the Harmonized System support a reading of heading 02.10 as referring exclusively to processes
of "preservation". We note that, among the headings of Chapter 2 other than heading 02.10,
heading 02.07
 412 is of particular relevance, given that the European Communities argues that the
products at issue are properly classified under that h eading. We recall that, pursuant to the principle
of effective treaty interpretation, it is the task of th e treaty interpreter to give meaning to all the terms
of the treaty. 413 We will examine whether such a reading can be derived from the relevant Notes to
the Harmonized System; the Notes of relevance in this context are the Chapter Note to Chapter 16 414,
the Explanatory Note to Chapter 2 415, and the Explanatory Note to heading 02.10.416

412Heading 02.07 refers to "meat and edible offal, of the poultry of heading No. 0105, fresh, chilled, or
frozen".
413Appellate Body Report, Japan – Alcoholic Beverages II, p. 12, DSR 1997:1, p. 97 at 106; Appellate
Body Report, Argentina – Footwear (EC), para. 81; Appellate Body Report, US – Gasoline, p. 23, DSR:1996:1,
3, at 21.
414Chapter Note to Chapter 16 states:
This Chapter does not cover meat, meat offal, fish, crustaceans, molluscs or
other aquatic invertebrates, prepared or preserved by the processes specified
in Chapter 2 or 3 or heading 05.04. (emphasis added)
415The Explanatory Note to Chapter 2 provides:
This Chapter covers meat and meat offal in the following states only,
whether or not they have been previously scalded or similarly treated but not
cooked :
(1) Fresh (including meat and meat offal, packed with salt as a temporary
preservative during transport).
(2) Chilled, that is, reduced in temperature generally to around 0 °C, without
being frozen.
(3) Frozen, that is, cooled to belo w the product's freezi ng point until it is
frozen throughout.
(4) Salted, in brine, dried or smoked. (emphasis added)
416The Explanatory Note to heading 02.10 provides:
This heading applies to all kinds of meat and edible meat offal which have
been prepared as described in the heading, other than pig fat, free of lean
meat, and poultry fat, not rendered or otherwise extracted (heading 02.09)[.]
With respect to the Notes to the Harmonized System, we recall that the Panel found that Chapter Notes were
binding and that Explanatory Notes were "non-binding". (Panel Reports, para. 7.220)

215. The European Communities argues that the headings of Chapter 2 fall into two categories that
are distinguished by whether the meat has or ha s not been subjected to the processes listed in
heading 02.10. If these processes have been applied, the products fall into the first category, namely,
heading 02.10; if these processes have not been applied, the pr oducts fall under one of headings
02.01 through 02.08, all of which fall into the other category.417
216. The Panel found that "there may be a host of reas ons that, individually and/or in combination,
could explain the unique formulation used in heading 02.10." 418 The Panel concluded that the
structure of Chapter 2 did not provide "any insight s regarding the question of whether 'preservation'
and/or 'preparation' ... characterize ... heading 02.10 of the EC Schedule".419
217. We note that heading 02.10 does not make refere nce to refrigeration. By contrast, other
headings of Chapter 2—that is, headings 02. 01 to 02.09—refer to freezing and chilling. The
European Communities argues that (i ) this circumstance implies that refrigeration is of "little or no
importance" for heading 02.10, and that (ii) the re ason for this is that these products are "preserved"
by the processes mentioned in heading 02.10. 420 The European Communities uses this argument to
support its view that heading 02.10 covers exclusively meats that have been "preserved" by the
processes referred to in that heading.

418Panel Reports, para. 7.172.
419Ibid., para. 7.173. The Panel stated:
In particular, it may be that it is based on the fact that, in contrast to other
processes referred to in the headings of Chapter 2, the processes referred to
in heading 02.10 "prepare" meat so that the meat's natural condition is
altered, as has been submitted by the complainants; and/or the unique
formulation may be linked to the fact that the processes referred to in
heading 02.10 on their own "preserve" the meat to which those processes are
applied, as has been submitted by the European Communities; and/or, the
formulation may be based on a factor that is completely different from the
"preparation" and "preservation" theories that have been put forward by the
parties. For example, the terms and structure of heading 02.10 may merely
reflect international trade patterns. The Panel considers that, on the basis of
the terms and structure of heading 02.10, it is difficult to know which of the
above-mentioned reasons is the applicable one, if any.
(Ibid., para. 7.172 (footnote omitted))

218. We agree with the participants that the reas on heading 02.10 does not refer to refrigeration is
that refrigeration is of "little or no importance" for that heading.
421 In our view, whether a product has
been frozen or not will not influence whether that product falls under heading 02.10. At the same
time, we do not agree with the European Communities that the fact that heading 02.10 does not refer
to refrigeration leads to the conclusion that meat falling under heading 02.10 must, necessarily, have
been preserved by one of the processes referred to in that heading and that, as a result, heading 02.10
covers exclusively meats that have been "preserved" by the processes referred to in that heading. In
other words, it does not follow from the absence of refri geration in the text of heading 02.10 that the
processes referred to in heading 02.10 must necessarily place the meat in a state of "preservation".
Furthermore, as we explain below, the Chapter No te to Chapter 16 and the Explanatory Note to
heading 02.10 confirm that Chapter 2 covers both preserved and prepared products.
219. We turn next to consider certain Chapter a nd Explanatory Notes to the Harmonized System
that also form part of the context for purposes of interpreting terms in the EC Schedule.422
220. The Panel referred to the Explanatory Note to heading 02.10 of the Harmonized System,
which provides:
This heading applies to all kinds of meat and edible meat offal which
have been prepared as described in the heading, other than pig fat,
free of lean meat, and poultry fat, not rendered or otherwise extracted
(heading 02.09)[.] (emphasis added)
221. The Panel also considered th e Chapter Note to Chapter 16
423, which excludes from
Chapter 16424 products that are "prepared or preserved" by the processes specified, inter alia, in
Chapter 2.425

421European Communities' appellant's submission, para. 89; Thailand's appellee's submission, para. 44;
see also Brazil's appellee's submission, para. 100; and Brazil's response to Panel Question 65 posed by the
Panel, Panel Reports, pp. C-22-C-23.
422See supra, para. 214.
423We observe that this Note is not, as stated by th e Panel, an Explanatory Note, but rather a Chapter
Note to Chapter 16 of the Harmonized System. See infra, para. 224.
424Chapter 16 covers "Preparations of meat, of fish or of crust aceans, molluscs or other aquatic
invertebrates." According to the Explanatory Note to Chapter 16, this Chapter covers products that have been,
for instance, "[b]oiled, steamed, grilled, fried, roasted or otherwise cooked".
425The full text of that part of the Chapter Note to Chapter 16 states:
This Chapter does not cover meat, meat offal, fish, crustaceans, molluscs or
other aquatic invertebrates, prepared or preserved by the processes specified
in Chapter 2 or 3 or heading 05.04.

222. The Panel then went on to find that, although the above Notes "may suggest that the processes
referred to in heading 02.10 are processes for th e 'preparation' of meat", the Notes were not
"particularly helpful for [the Panel's] purposes".426 Specifically, the Panel was not certain whether the
concepts of "preparation" and "preservation" we re "mutually exclusive" in the context of
heading 02.10. 427 The Panel therefore concluded that:
[the] Notes to the [Harmonized System] do not clarify the ordinary
meaning of the term "salted" in the concession contained in
heading 02.10 of the EC Schedule [and] do not indicate that that
concession is necessarily characterized by the notion of long-term
preservation.
428
223. The European Communities, on the one hand, and Brazil and Thailand, on the other hand,
appeal this finding. The European Communities ar gues that the Panel failed to consider another
relevant Note—namely, the Explanatory Note to Ch apter 2—and that a correct consideration of this
Note supports the view that heading 02.10 is ch aracterized by the notion of "preservation". In
contrast, Brazil and Thailand argue that the Explanator y Note to Chapter 2 and that to heading 02.10,
read together with the Chapter Note to Chap ter 16, indicate that "preparation", instead of
"preservation", determines the classification under heading 02.10. Thailand also argues that the Panel
erred in its legal characterization of the Chapte r Note to Chapter 16 as an Explanatory Note. 429 All of
these claims concern the same Chapter Note and E xplanatory Notes, and thus we will address them
together.
224. At the outset, we agree with Thailand that the Panel incorrectly characterized the Note to
Chapter 16 as an "Explanatory Note", rather than as a "Chapter Note". 430 We also agree with the
general proposition that the Chapter Notes to the Harmonized System, which are binding, may have
greater probative value than the Explanatory Notes to the Harmonized System, which are non-

426Panel Reports, para. 7.223.
427Ibid.
428Ibid.
429According to Thailand, as a result of its incorrect characterization of the Note, the Panel's conclusion
concerning the Notes to the Harmonized System is "incorr ect and results in the undermining of the weight to be
given to the content of this Note for the interpretation of the term 'salted' in heading 02.10." (Thailand's other
appellant's submission, para. 71.)
430Ibid., paras. 66-71.

binding.
431 However, we do not believe that the inaccurate characterization of the Note
"undermin[es]" the Panel's overall analysis of the Notes to the Harmonized System 432, as claimed by
Thailand. Indeed, Thailand has not explained how th e Panel's analysis would have been different had
the Panel correctly characterized the Note at issue as a "Chapter Note".433 Nor is it clear to us how the
Panel's conclusion with respect to the term "sa lted" in heading 02.10 would have changed by
assigning greater weight to the Chapter Note to Chapter 16.
225. We also agree with Brazil and Thailand that the Explanatory Note to heading 02.10—which
refers to meat that has been "prepared", but does not mention "preserved"—suggests that
heading 02.10 is characterized by the notion of "preparation". Brazil and Thailand argue that products
subject to one of the processes referred to in h eading 02.10, but not necessarily placed in a state of
"preservation" by application of these processes, w ould fall under heading 02.10. Such a conclusion,
therefore, would preclude a reading of the term "s alted" as suggested by th e European Communities,
namely, as referring exclusively to meat that has been "salted" so as to place the meat in a state of
"preservation". The reading suggested by Brazil an d Thailand would appear to be supported by the
fact that other Notes to the Harmonized System (m ost importantly, the Chapter Note to Chapter 16)
use the terms "prepared", "preserved", and "preservation", 434 suggesting that the use of the term
"prepared" alone, without reference to "preserved", in the Explanatory Note to heading 02.10, is not
inadvertent.
226. At the same time, we also observe that the Notes to the Harmonized System do not provide a
definition of the terms "preparation" or "preservatio n". Nor do the Notes suggest that the two terms
could not operate in combination and that they are mutually exclusive. Th e terms "preparation" and
"preservation" do not encompass all products falling under Chapter 2, because "fresh" meat cannot be
characterized as "prepared" meat. Moreover, the Harmonized System contains, in other sections,
references to "preparation" and "preservation" in the text of the headings, as opposed to only in the

431Thailand's other appellant's submission, para. 71. The probative value of a Note will, however, also
depend on how relevant it is to the interpretative question at issue; as a result, it cannot be excluded that an
Explanatory Note that directly addresses a given interp retative question will be more probative than a Chapter
Note that does not relate specifically to that interpretative question.
432Ibid.
433Brazil and Thailand rely on the Chapter Note to Chapter 16 in order to establish that Chapter 2
"covers meat ... which is prepared or preserved". Brazil's and Thailand's subsequent argument that
heading 02.10 refers to meat that is "prepared" is not based on the Chapter Note to Chapter 16, but, rather, on
the Explanatory Notes to Chapter 2 and heading 02.10.
434The Chapter Note to Chapter 16 refers to "meat ... pr epared or preserved", to "preservation", and to
"[f]ood preparations". The Explanatory Note to Chapter 16 refers to "prepared foodstuffs", and "foodstuffs ...
[p]repared as sausages"; and the Explanatory Note to heading 16.01 refers to "preparations".

Notes.435 It seems to us that, where the Harmonized System considers that these terms control the
definition of the scope of a heading, it will use them expressly. In our view, the terms "preparation"
and "preservation", when found in the Explanatory Not es rather than in the text of the heading, need
not be read as dispositive and necessarily mutually exclusive.
227. Turning to the content of the Explanatory Note to Chapter 2, we are of the view that the Panel
should have taken into account explic itly this Note. We observe that the Note provides that meat that
has been "packed with salt as a temporary preservative during transport" qualifies as "fresh meat"
(under heading 02.07 436). The Note suggests that mere presence of salt does not imply that the meat
falls under heading 02.10 as "salted" meat.437
228. However, the fact that, pursuant to that No te, meat "packed with salt as a temporary
preservative during transport" is considered "fresh" (under heading 02.07), rather than as "salted"
meat (under heading 02.10), does not lead to the conclusion suggested by the European Communities,
namely, that the term "salted" refers exclusively to meat that has been "pr eserved" by salting. Hence,
we are of the view that the Explanatory Note to Chapter 2 is not conclusive with respect to the
question whether the term "salted" , in heading 02.10, refers exclusively to meat that has been
"preserved" by salting and does not include meat merely "prepared" by salting.
229. As a result, we conclude that the Harmoni zed System and the relevant Chapter and
Explanatory Notes thereto do not support the view that heading 02.10 is characterised exclusively by
the concept of preservation. Furthermore, the term "salted" in heading 02.10, when considered in its
context, suggests that meat to which salt has been adde d, so that its character has been altered, will be
"salted" within the meaning of heading 02.10, even if such salting does not place such meat in a state
of "preservation". Heading 02.10 of the Harmonized System, read in its context, suggests that it is
neither limited to, nor excludes, meat that is "pre pared" by salting or that has been "preserved" by
salting. Specifically, for resolving this dispute, heading 02.10 does not contain a requirement that
salting must, by itself, ensure "preservation".

435For instance, Chapter 16 refers to "preparations of meat", while the term "preservation" is found,
for instance, in heading 08.14 ("[p]eel of citrus ... provisionally preserved") and heading 07.11 ("[v]egetables
provisionally preserved").
436We recall that heading 02.07 refers to "meat and edible offal, of the poultry of heading No. 0105,
fresh, chilled, or frozen".
437In this respect, we recall that the Panel found that, in order for a product to be "salted" within the
meaning of heading 02.10, "the character of that product must have been altered through the addition of salt as
compared to that product's fresh state prior to the addition of salt". (Panel Reports, para. 7.141)

230. Before the Panel, the question arose as to the permissibility of using the criterion of
preservation in Members' Schedules. In this respect, we note that the WCO, in a letter to the Panel,
stated that "[w]hen goods are classified in the Harmonized System, it is always done on the basis of
the objective characteristics of the product at the time of importation."
438 We believe, therefore, that it
is possible to apply the criterion of "preservati on", provided that is discernible as an objective
characteristic at the time of the importation of the product. In this context, we note that there are
instances in the Harmonized System where the cr iterion of "provisional preservation" is used,
suggesting that the criterion of "preservation" is not intrinsically objectionable under the Harmonized
System.439 As a result, we are of the view that the Ha rmonized System does not, in principle, rule out
the concept of "preservation" under th e term "salted" in heading 02.10. 440 The question whether the
tariff commitment in heading 02.10 the EC Schedule is characterized exclusiv ely by the concept of
"preservation" is a separate question which we address below. In that respect, we observe that, within
the parameters required by the Harmonized System, Members have certain flexibility to structure and
negotiate further specifications in their particular tariff commitments.
3. Rule 3 of the General Rules for the Interpretation of the Harmonized System
231. We now turn to consider the General Rules fo r the Interpretation of the Harmonized System
(the "General Rules"). We recall that the Panel found that:
... all the parties appear to be in agreement that a textual and
contextual analysis of the rele vant headings indicates that the
products at issue in this dispute are not prima facie classifiable under
two or more headings. Accordingly, we will proceed on the same
assumption with the result that we will not apply General Rule 3.
Given our conclusion that General Rule 3 is inapplicable, we do not
consider it necessary to address the various arguments that have been
advanced by the parties regarding that Rule.
441

438WCO's response to Question 1 posed by the Panel, Panel Reports, p. C-134. See also European
Communities' response to Question 90 posed by the Panel, Panel Reports, p. C-108, para. 7.
439For example, heading 5.10 mentions "[a]mbergris ... otherwise provisionally preserved ";
heading 08.14 speaks of "[p]eel of citrus ... provisionally preserved "; and heading 07.11 concerns
"[v]egetables provisionally preserved ". (European Communities' appellant's submission, para. 201) (emphasis
added)
440See also infra, para. 246.
441Panel Reports, para. 7.238.

232. Brazil and Thailand appeal this finding. Both ar gue that the Panel incorrectly found that the
parties were in agreement that General Rule 3 was in applicable in this case. Brazil also requests that
the Appellate Body complete the analysis and find that the products at issue are classifiable under
heading 02.10 by virtue of General Rule 3(a) or by virtue of General Rule 3(c).442
233. We note that the General Rules are, by their very name, rules for the interpretation of the
Harmonized System. Specifically, General Rule 3 deals with the question of classification in
circumstances in which goods are prima facie "classifiable" under two or more headings.
234. We recall that the task of the Panel, as well as of the Appellate Body upon appeal, is to
determine whether the European Communities has acted consistently with Article II:1(a) and with
Article II:1(b) of the GATT 1994 with respect to the products at issue. Therefore, in our view, the
primary task of the Panel, as well as of the Appella te Body, is to determine the meaning and scope of
the concession contained in heading 02.10 of the EC Schedule. In our view, it is only after properly
determining the meaning and scope of the tariff commitment in heading 02.10 that the question
whether the products at issue are prima facie classifiable under two or more headings can arise.
General Rule 3 is relevant in this case only for the second step, namely, under which heading a

442General Rule 3 provides:
When by application of Rule 2(b) or for any other reason, goods are, prima
facie, classifiable under two or more headings, classification shall be
effected as follows:
(a) The heading which provides the most specific description shall be
preferred to headings providing a more general description. However, when
two or more headings each refer to part only of the materials or substances
contained in mixed or composite goods or to part only of the items in a set
put up for retail sale, those headings are to be regarded as equally specific in
relation to those goods, even if one of them gives a more complete or
precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or
made up of different components, and goods put up in sets for retail sale,
which cannot be classified by reference to 3(a), shall be classified as if they
consisted of the material or component which gives them their essential
character, insofar as this criterion is applicable.
(c) When goods cannot be classified by reference to 3(a) or 3(b), they
shall be classified under the heading which occurs last in numerical order
among those which equally merit consideration.

product is properly classified.
443 It is therefore not necessary for us to consider, at this stage, General
Rule 3.
4. Conclusion Concerning "Context"
235. We, therefore, uphold the Panel's finding, in paragra phs 7.245 and 7.331(c) of the Panel
Reports, that the context of the term "salted" in the tariff commitment under heading 02.10 of the
EC Schedule "indicates that that concession is not necessarily characterized by the notion of long-
term preservation". In the light of our findings in paragraphs 229-230, we will continue our
examination to determine whether there has been an agreement between the European Communities
and the other treaty parties on the inclusion of the concept of "preservation" in heading 02.10 of the
EC Schedule.
IX. Object and Purpose
236. We next discuss whether the Panel erred in finding that an interpretation of the term "salted"
in the tariff commitment under heading 02.10 of the EC Schedule, as including the criterion of long-
term preservation, "could undermine the object an d purpose of security and predictability", which
underlie both the WTO Agreement and the GATT 1994.
444
237. The European Communities appeals several aspec ts of the Panel's r easoning and conclusions
relating to "object and purpose". The European Communities submits that the Panel relied on the
"object and purpose" of the treaty (that is, the WTO Agreement and the GATT 1994) and failed to take
into account the "object and purpose" of the releva nt treaty provision (that is, Article II of the GATT
1994, read in conjunction with heading 02.10 of the EC Schedule, including its underlying criterion of

443We note that General Rule 3 refers to circumstances in which a product is " prima facie" classifiable
under two or more headings. In this respect, nothing on the Panel record indicates how the term " prima facie"
has been interpreted by the WCO's Harmonized System Co mmittee, or the WCO itself. However, according to
information provided by the WCO Secretariat to the Pane l, the Harmonized System Committee has not, so far,
considered classification issues related to headings 02.07 and 02.10. (WCO's response to Question 8 posed by
the Panel, Panel Reports, p. C-139) Furthermore, the WCO did not provide specific guidance to the Panel as to
the meaning of the term "specific", so as to determin e the "most specific description" within the meaning of
General Rule 3(a) for purposes of the present disp ute; according to the WCO, heading 02.07 could be
considered more "specific" due to th e term "poultry", but, at the same time , heading 02.10 could be considered
more "specific" by virtue of the term "salted". (Panel Reports, para. 7.235) We also note that the participants do
not argue that General Rule 3(b) is applicable to the dispute at hand.
444Panel Reports, para. 7.323.

"long-term preservation"). 445 The European Communities also argues that the Panel erroneously
relied on the concept of the "expansion of trade" in its analysis of the "object and purpose" of
maintaining the security and predictability of ta riff concessions. In addition, the European
Communities alleges that the Panel erred by findi ng that the application of the criterion of
"preservation" would undermine the security and predic tability of the tariff commitment. Finally, the
European Communities contends that heading 02.10 of the EC Schedule was not intended to address
"frozen [salted] poultry".446
A. Object and Purpose of the Treaty or of a Particular Treaty Provision
238. We begin our analysis with the question whethe r the Panel incorrectly distinguished between
the object and purpose of the treaty and that of its individual provisions. 447 It is well accepted that the
use of the singular word "its" preceding the term "object and purpose" in Article 31(1) of the Vienna
Convention indicates that the term refers to the treaty as a whole 448; had the term "object and
purpose" been preceded by the word "their", the use of the plural would have indicated a reference to
particular "treaty terms". Thus, the term "its object and purpose" makes it clear that the starting point
for ascertaining "object and purpose" is the treaty itself, in its entirety.449 At the same time, we do not
believe that Article 31(1) excludes taking into account the object and purpose of particular treaty
terms, if doing so assists the interpreter in determining the treaty's object and purpose on the whole.
We do not see why it would be necessary to divorce a treaty's object and purpose from the object and
purpose of specific treaty provisions, or vice versa. To the extent that one can speak of the "object
and purpose of a treaty provision", it will be informed by, and will be in consonance with, the object
and purpose of the entire treaty of which it is but a component.
450

445European Communities' appellant's submission, pa ras. 180-181. According to the European
Communities, a treaty interpreter should consider the obj ect and purpose of the provision at issue first,
before considering the object and purpose of the agreement. The European Communities submits that, in
US – Line Pipe , the Appellate Body referred to the object and purpose of Article XIX of the GATT 1994
(Appellate Body Report, US – Line Pipe, para. 81) and in Chile – Price Band System, the Appellate Body relied
on the object and purpose of Article 4 of the Agreement on Agriculture. (Appellate Body Report, Chile – Price
Band System, para. 234)
446European Communities' appellant's submission, paras. 212-219.
447Ibid., paras. 179-182 (referring to Panel Reports, pa ra. 7.316). The European Communities asserts
that the Panel should have ascertained the object and purpose of Article II of the GATT 1994, read in
conjunction with heading 02.10 of the EC Schedule, and its underlying purpose of "preservation".
448See Sinclair, supra, footnote 36, pp. 130-135.
449Panel Report, paras. 7.316-7.317. See also Sinclair, supra, footnote 36, pp. 130-135.
450In this regard, we refer to the Appellate Body Report in Argentina – Textiles and Apparel, where the
Appellate Body stated that "a basic object and purpose of the GATT 1994 [was] re flected in Article II".
(Appellate Body Report, Argentina – Textiles and Apparel, para. 47)

239. Having said this, we caution against interpreting WTO law in the light of the purported
"object and purpose" of specific provisions, paragra phs or subparagraphs of the WTO agreements, or
tariff headings in Schedules, in isolation from the object and purpose of the treaty on the whole. Even
if, arguendo, one could rely on the specific "object and purpose" of heading 02.10 of the EC Schedule
in isolation
451, we would share the Panel's view that " one Member's unilateral object and purpose for
the conclusion of a tariff commitment cannot form the basis" 452 for an interpretation of that
commitment, because interpretation in the light of Articles 31 and 32 of the Vienna Convention 453
must focus on ascertaining the common intentions of the parties.454
240. For these reasons, we have no difficulty with the Panel's approach in interpreting the tariff
commitment at issue in this case in th e light of the object and purpose of the WTO Agreement and the
GATT 1994.
B. Did the Panel Rely on "Expansion of Trade" as an Interpretative Principle?
241. We note that the Panel deduced the object and purpose of the WTO Agreement and the
GATT 1994 from the preambles and from Appellate Body statements. 455 The Panel referred to the
Appellate Body statement in Argentina – Textiles and Apparel that "a basic object and purpose of the
GATT 1994, as reflected in Article II, is to preser ve the value of tariff concessions negotiated by a
Member with its trading partners, and bound in that Member's Schedule."456 The Panel found that:

451The European Communities argues that the notion of "long-term preservation" characterizes the four
processes mentioned in heading 02.10, that is, "salted", "in brine", "dried", and "smoked".
452Panel Reports, para. 7.326.
453The Panel relied on Appellate Body Report, EC – Computer Equipment , para. 84; and Sinclair,
supra, footnote 36, pp. 130-131 (referred to in Panel Reports, footnote 536 to para. 7.326).
454Appellate Body Report, EC – Computer Equipment, para. 84.
455The Panel relied on the Appellate Body statement in EC – Computer Equipment that "the security
and predictability of 'the reciprocal and mutually advantageous arrangements directed to the substantial
reduction of tariffs and other barriers to trade' is an object and purpose of the WTO Agreement, generally, as
well as of the GATT 1994." (Appellate Body Report, EC – Computer Equipment, para. 82)
456Appellate Body Report, Argentina – Textiles and Apparel, para. 47.

[t]aken together, the relevant aspects of the WTO Agreement and the
GATT 1994 indicate that concessions made by WTO Members
should be interpreted so as to further the general objective of the
expansion of trade in goods and the substantial reduction of tariffs .
... In other words, the terms of a concession should not be interpreted
in such a way that would disrupt the balance of concessions
negotiated by the parties. Finally, the interpretation must ensure the
security and predictability of the reciprocal and mutually
advantageous arrangements manifested in the form of concessions.
457
(emphasis added)
242. The European Communities argues on appeal that the Panel erred in finding that "concessions
made by WTO Members should be interpreted so as to further the general objective of the expansion
of trade in goods and the substantial reduction of tariffs."458
243. In our view, a careful reading of the phrasing u sed by the Panel reveals that it did not, as the
European Communities asserts, develop an "interpret ative principle directing Panels to bias towards
the reduction of tariff commitments". 459 We note that, in the sente nce that followed, the Panel
qualified the statement challenged by the Euro pean Communities by stating that "such an
interpretation is limited by the condition that arrangements entered into by Members be reciprocal and
mutually advantageous." 460 This sentence underscores the Panel' s view that trade liberalization is
achieved through negotiations for mutual benefit. In deed, the Panel concluded that its interpretation
should be governed by the object and purpose of maintaining the security and predictability of
reciprocal market access arrangements manifested in tariff conc essions, an objective endorsed by the
European Communities. Thus, we do not believe th at the Panel relied on trad e expansion and tariff
reduction as an interpretative principle. In f act, the Panel focused its "object and purpose"
interpretation on the principles of security and pr edictability of tariff concessions. Moreover, we
agree with the Panel that "the security and predictabi lity of 'the reciprocal and mutually advantageous
arrangements directed to the substantial reduction of tariffs and other barriers to trade' is an object and
purpose of the WTO Agreement, generally, as well as of the GATT 1994."461

457Panel Reports, para. 7.320.
458Ibid. (quoted in European Communities' appellant's submission, para. 183).
460Panel Reports, para. 7.320.
461Ibid., para. 7.318 (quoting Appellate Body Report, EC – Computer Equipment, para. 82). We note
that "security and predictability" is also mentioned in Article 3.2 of the DSU.

C. Does a Criterion of "Preservation" Undermine the Security and Predictability of
Tariff Concessions?
244. In addition, the European Communities appeals the Panel finding that:
... the lack of certainty associated w ith the application of the criterion
of long-term preservation with respect to the concession contained in
heading 02.10 of the EC Schedule ... could undermine the object and
purpose of security and predictability [of the reciprocal and mutually
advantageous arrangements [that] mu st be preserved], which lie[] at
the heart of the WTO Agreement and the GATT 1994.
462
245. The European Communities contends that the Panel misrepresented the criterion of
preservation, because EC Regulation 1223/2002 and EC Decision 2003/97/EC do not, in fact, apply a
"criterion of long-term preservation" but, instead, tr eat chicken cuts with a salt content of up to
3 per cent as falling under heading 02.07 rather than heading 02.10.463
246. We agree with the Panel that, in characterizing a product for purposes of tariff classification,
it is necessary to look exclusively at the "objective characteristics" of the product in question when
presented for classification at the border. 464 At the same time, we note that the European
Communities provides examples indicating that pr oduct descriptions including a criterion of
"preservation" may qualify as "objective characteristics" under the Harmonized System. 465 T h e
European Communities considers that, accordingly, the criterion of preservation is not intrinsically
uncertain, given its use in other parts of the Harmonized System. 466 In this sense, we consider that the
Harmonized System does not preclude the use of a criterion of preservation, as such, provided that the
conditions mentioned in paragraph 230 above are met. Therefore, the application of such a criterion
would not necessarily be in conflict with the ob jectives of security and predictability of the WTO
Agreement and the GATT 1994 (including Schedules of tariff commitments).

462Panel Reports, para. 7.323.
463These measures are considered to be justified by the European Communities on the basis that the
term "salted" in heading 02.10 should be read to contain a criterion of pr eservation, which the products at issue
do not meet. (European Communities' appellant's submission, paras. 190-211)
464Panel Reports, para. 7.321.
465For example, the Harmonized System heading 05.10 mentions "[a]mbergris ... otherwise
provisionally preserved"; heading 08.14 concerns "[p]eel of citrus ... provisionally preserved"; heading 07.11
concerns "[v]egetables provisionally preserved"; and General Rule 5(a) refers to "[c]amera cases, suitable for
long-term use". (European Communities' appellant's submission, para. 201) (emphasis added)
466Ibid., paras. 201-202.

247. Turning to the facts of this case, we reca ll the Panel's statement that the European
Communities had never explained what it meant ex actly, for purposes of heading 02.10, by "'long-
term preservation' in practice". 467 The Panel was satisfied that it could be ascertained through
laboratory analyses whether a salted and frozen product was preserved for the long-term.468 However,
it was unclear to the Panel whether preservation for th e long-term had to be the result of salting, or
freezing, or a combination of the two.469 The European Communities submits on appeal that there are
no such practical problems, either with respect to the products at issue (which have not been claimed
to be preserved) or for a customs official with access to tools of analysis and for whom the
highly traditional products under heading 02.10 are recognizable and familiar. 470 According to the
European Communities, if a product has been "f rozen" within the meaning of heading 02.07,
it will still be classified under heading 02.10 of the EC Schedule as a "salted" product, provided
that the salting ensures "preservation" within the meaning of EC Regul ation 1223/2002 and
EC Decision 2003/97/EC.471
248. Although the European Communities clarifies that, for purposes of heading 02.10 of the
EC Schedule, preservation has to be the result of th e processes mentioned in that heading and not of
the processes listed under heading 02.07 (namely, chilling, freezing), it does not explain how, in
respect of frozen and salted meat, the preservation effect of the processes listed in heading 02.10
could be distinguished from the processes listed in heading 02.07. 472 Therefore, we share the Panel's
concern about the lack of certainty in the application of the preservation criterion used by the
European Communities regarding the tariff commitment under heading 02.10 of the EC Schedule.
249. In the light of these considerations, we see no reason to disturb the Panel's finding, in
paragraph 7.328 of the Panel Reports, that "the lack of certainty associated with the application of the
criterion of long-term preservation with respect to the concession contained in heading 02.10 of the
EC Schedule ... could undermine the object and purpose of security and predictability, which
[underlie] both the WTO Agreement and the GATT 1994."

467Panel Reports, para. 7.322.
468The European Communities indicated to the Panel that it conducts laboratory analyses when
necessary. (Ibid., footnote 534 to para. 7.321) See also Exhib it THA-23 submitted by Thailand to the Panel.
The WCO also considered that laboratory analyses might be required to determine whether a product can be
regarded as "salted" within the meaning of heading 02.10 of the Harmonized System. (Panel Reports,
para. 7.321)
469Ibid., para. 7.322.
470European Communities' appellant's submission, paras. 203-208.
471Panel Reports, para. 7.322.
472European Communities' response to questioning at the oral hearing.

D. Was Heading 02.10 Intended to Cover Frozen (Salted) Poultry Meat?
250. Finally, the European Communities submits that the Panel ignored its argument that
heading 02.10 did not have the object and purpose, when negotiated, of securing market access
arrangements on frozen salted poultry meat.
473 In this respect, the Panel ruled that it was not
authorized "to consider the European Communitie s' unilateral object and purpose when it concluded
its Schedule in interpreting the concession cont ained in heading 02.10 of the EC Schedule". 474 We
agree with the Panel that a treaty interpreter must ascertain the common inten tions of the parties and
that these " common intentions cannot be ascertained on the basis of the subjective and unilaterally
determined 'expectations' of one of the parties to a treaty."475 In our view, the European Communities'
argument pertains to the " subjective views as to what [was] the agreement reached during tariff
negotiations"476, because we see no indication in the Panel record showing that it was a "commonly
shared view" of the parties to exclude frozen (sa lted) poultry meat from the product scope covered by
heading 02.10 of the EC Schedule. Consequently, we find the Panel made no error in this regard.
X. Subsequent Practice
251. The European Communities appeals the Panel' s finding that the European Communities'
practice, between 1996 and 2002, of classifying th e products at issue under heading 02.10 of the
EC Schedule amounts to "subsequent practice" w ithin the meaning of Article 31(3)(b) of the Vienna
Convention477, which provides:
3. There shall be taken into account, together with the context:

 (b) any subsequent practice in the application of the
treaty which establishes the agreement of the parties
regarding its interpretation[.]

473According to the European Communities, heading 02.10 was not intended to provide a means of
circumventing the tariff protection agreed under heading 02.07. (European Communities' appellant's submission,
paras. 212-218)
474Panel Reports, para. 7.327.
475Appellate Body Report, EC – Computer Equipment, para. 84. (original emphasis)
476Ibid., para. 82. (original emphasis)
477Panel Reports, paras. 7.289 and 7.303.

252. In reaching its conclusion, the Panel found it "reasonable to rely upon EC classification
practice alone in determining whether or not there is 'subsequent practice' that 'establishes the
agreement' of WTO Members within the meaning of Article 31(3)(b)". 478 For the Panel, it made
"practical sense" that the classification practice of the importing Member "whose schedule is being
interpreted" is important, because WTO Schedules are "particular to each WTO Member".
479 T h e
Panel found "a reasonable indi cation of consistent practice" 480 by the European Communities,
between 1996 and 2002 481, of classifying imports of the products at issue under heading 02.10. In
addition, the Panel examined evidence of classifica tion practice regarding imports into and exports
from Brazil and Thailand, and imports into and exports from the third parties, namely, China and the
United States, but found this classification practice "inconsistent" or of "limited usefulness".482
253. The European Communities contests the Panel's in terpretation of the concept of "subsequent
practice" under Article 31(3)(b). The European Co mmunities argues that the subsequent practice of
one party alone cannot determine the interpretation of a treaty, and that the Panel erred in its analysis
of whether there was consistent practice at th e level of the European Communities and at the
multilateral level. 483 Brazil and Thailand contend that, becau se the EC Schedule is at issue in this
case, it is the European Communities' practice that is relevant for the identification of "subsequent
practice" within the meaning of Article 31(3)(b). 484 Brazil and Thailand thus request that we uphold
the Panel's finding that the European Communities' consistent practice, between 1996 and 2002, of
classifying the products at issue under heading 02.1 0 of the EC Schedule "amounts to subsequent
practice" within the meaning of Article 31(3)(b) of the Vienna Convention.
254. This issue raises the following questions: (i) wh at may qualify as "practice"? (ii) how does
one establish the agreement of the parties who have no t engaged in the practice at issue? and (iii) was
there "consistency" of relevant practice by the European Communities and other WTO Members?

478Panel Reports, para. 7.289. (emphasis added)
479Ibid., paras. 7.253-7.254.
480Ibid., para. 7.267. (original emphasis omitted)
481EC Regulation 1223/2002, the first of the challenged measures, entered into force in 2002.
482Panel Reports, paras. 7.284 and 7.288-7.289. The Panel also considered WCO letters of advice from
1997 and 2003 and subsequent Explanatory Notes to the European Communities' Combined Nomenclature.
(Ibid., paras. 7.298-7.299 and 7.302)
484Brazil's appellee's submission, para. 123; Thailand's appellee's submission, paras. 59 and 67.

A. What May Qualify as Practice?
255. At the outset, we observe that "subsequent practice" in the application of a treaty may be an
important element in treaty interpretation b ecause "it constitutes objective evidence of the
understanding of the parties as to the meaning of the treaty".
485
256. The Appellate Body found, in Japan – Alcoholic Beverages II , that "subsequent practice"
within the meaning of Article 31(3)(b) entails a:
... "concordant, common and cons istent" sequence of acts or
pronouncements which is sufficient to establish a discernible pattern
implying the agreement of the parties [to a treaty] regarding its
interpretation.
486
257. In US – Gambling , the Appellate Body clarified that establishing "subsequent practice"
within the meaning of Article 31(3)(b) involves two elements:
... (i) there must be a common, consistent, discernible pattern of acts
or pronouncements; and (ii) those acts or pronouncements must
imply agreement on the interpretation of the relevant provision. 487
(original emphasis)
258. The Panel considered that the main question in the case at hand was whether "common" and
"concordant" practice "necessarily means that all WTO Members must have engaged in a particular
practice in order for it to qualify as 'subsequent prac tice' ... or whether the practice of a sub-set of the
entire WTO-membership, including the practice of one Member only, may suffice."
488 The Panel
noted that the International Law Commission ("ILC") had stated that:
The [original text of Article 31(3)(b) of the Vienna Convention ]
spoke of a practice which "establishes the understanding of all the
parties". By omitting the word "all" [in the final text], the
Commission did not intend to change the rule. It considered that the
phrase "the understanding of the parties" necessarily means the
"parties as a whole". It omitted the word "all" merely to avoid any
possible misconception that every party must individually have
engaged in the practice where it suffic es that it should have accepted
the practice.
489 (emphasis added)

485Yearbook of the International Law Commission, supra, footnote 69, p. 219, para. (6).
486Appellate Body Report, Japan – Alcoholic Beverages II , p. 13, DSR 1996:1, 97, at 106; Panel
Reports, para. 7.250.
488Panel Reports, para. 7.251. (footnote omitted)
489Ibid., para. 7.252 (quoting Yearbook of the International Law Commission , supra, footnote 69,
p. 222, para. 15).

The Panel inferred from this statement that "it is not necessary to show that all signatories to a treaty
must have engaged in a particular practice in order for it to qualify as subsequent practice under
Article 31(3)(b)".490 Rather, "it may be sufficient to show that all parties to the treaty have accepted
the relevant practice."491
259. We share the Panel's view that not each and ev ery party must have engaged in a particular
practice for it to qualify as a "common" and "concor dant" practice. Nevertheless, practice by some,
but not all parties is obviously not of the same order as practice by only one, or very few parties. To
our mind, it would be difficult to establish a "c oncordant, common and discernible pattern" on the
basis of acts or pronouncements of one, or very few parties to a multilateral treaty, such as the WTO
Agreement. We acknowledge, however, that, if only so me WTO Members have actually traded or
classified products under a given heading, this circ umstance may reduce the avai lability of such "acts
and pronouncements" for purposes of determining the existence of "subsequent practice" within the
meaning of Article 31(3)(b).
260. We turn next to the question of whose prac tice is relevant to establish agreement on the
interpretation of the relevant provision. For the Panel, the classification practice of the importing
Member "whose Schedule is being interpreted" is critical for purposes of establishing "subsequent
practice" regarding a tariff concession, because WTO Schedules are "particular to each WTO
Member".492 Moreover, the European Communities was the only Member that actually imported the
products covered by the measures challenged in this case.493 Therefore, the Panel found it "reasonable
[in this case] to rely upon EC classification practi ce alone in determining whether or not there is
'subsequent practice' that 'establishes the agre ement' of WTO Members within the meaning of
Article 31(3)(b)".494
261. On appeal, the European Commun ities argues that the subsequent practice of one party alone
cannot determine the interpretation of a treaty 495, and that, therefore, exclusive reliance on the
classification practice of the Member whose Schedule is at issue is not justified. This is particularly
so, according to the European Co mmunities, when there is no reason to believe that the Schedule
departs from the Harmonized System, which is used by all Members in their agricultural Schedules.496

490Panel Reports, para. 7.253. (emphasis added)
491Ibid., para. 7.253.
492Ibid., paras. 7.253-7.254.
493Ibid., para. 7.255.
494Ibid., paras. 7.255 and 7.289.
496Ibid., para. 134.

Brazil and Thailand submit that a tariff concession "b rings about an obligation (and is binding) only
with respect to the conceding Member [and that this] is quite different from other WTO obligations
that bind all Members."
497 Brazil and Thailand therefore contend that the fact that the EC Schedule is
at issue in this case means that only the European Communities' classi fication practice is relevant for
purposes of establishing subsequent practice in respect of that concession.498
262. We agree with Brazil and Thailand that each WTO Member has its own individual Schedule
of tariff concessions and that the tariff commitme nts bound for specific products in those Schedules
vary between different WTO Members. Nevertheless, it must be borne in mind that, during the course
of the Uruguay Round, tariff commitments were negotiated on the basis of the Harmonized System.499
As a result, Schedules of WTO Members other than the European Communities also include tariff
bindings under headings 02.07 and 02.10, which are based on the structure and description of the
Harmonized System. Therefore, although this dispute concerns the scope of a tariff commitment
contained in the WTO Schedule specific to the Eu ropean Communities, the relevant headings are
common to all WTO Members.
263. Brazil further contends that, although WTO Sc hedules are based on the Harmonized System,
they are not identical: the Uruguay Round negotia tions used the Harmonized System as a starting
point, but the end result of those negotiations did not need to be identical to it. 500 In Brazil's view,
when, by means of EC Regulation 535/94, the European Communities included Additional Note 7 to
Chapter 2 of the European Communities' Combin ed Nomenclature, it announced to its negotiating
partners in the Uruguay Round the definition and scope of its tariff concession under heading 02.10 of
its Schedule.
501
264. In our view, these arguments do not mean that the European Communities' WTO Schedule is
as unique to the European Communities as Brazil and Thailand suggest. 502 Having said that,
EC Regulation 535/94 may be relevant as evidence of what might have been agreed between WTO
Members for the tariff commitment under headin g 02.10 of the European Communities' WTO

497Brazil's appellee's submission, para. 139. See also Thailand's appellee's submission, paras. 75-84.
498Brazil's appellee's submission, paras. 137-145; Thailand's appellee's submission, paras. 75-84.
499For agricultural products, Annex I of the Agreement on Agriculture defines the product coverage of
that Agreement on the basis of the Harmonized System.
501Ibid., para. 142.

Schedule, within the flexibility conferred by the Harmonized System. 503 This, however, does not
render the classification practice of other WTO Members in relation to heading 02.10, per se,
irrelevant.
265. We acknowledge that we are concerned here w ith the interpretation of a tariff commitment
contained in the WTO Schedule of the European Communities that, according to Article II:7 of the
GATT 1994, forms an "integral part" of the WTO Agreement, as do all Members' WTO Schedules. In
EC – Computer Equipment, the Appellate Body found that:
... the fact that Members' Schedules are an integral part of the GATT
1994 indicates that, while each Sc hedule represents the tariff
commitments made by one Member, they represent a common
agreement among all Members.504 (original emphasis)
The Appellate Body also stated in that appeal that:
The purpose of treaty interpretation is to establish the common
intention of the parties to the treaty. To establish this intention, the
prior practice of only one of the parties may be relevant, but it is
clearly of more limited value than the practice of all parties. In the
specific case of interpretation of a tariff concession in a Schedule, the
classification practice of the importing Member, in fact, may be of
great importance. However, the Panel was mistaken in finding that
the classification practice of the United States was not relevant.
505
(original emphasis)
266. The Appellate Body made these statements in th e context of an interpretation pursuant to
Article 32 of the Vienna Convention , but, as the Panel put it, these statements "confirm[] the
importance of the classification practice of the importing Member whose schedule is being interpreted
[but] also indicate[] that the classification practice of other WTO Members, including the exporting
Member's practice, may be relevant."
506 In our view, these statements cannot be read to justify
exclusive reliance on the importing Member's classification practice. Therefore, we fail to see how
the Panel's finding that it was "reasonable to rely upon EC classification practice alone in determining
whether or not there is 'subsequent practice' that 'establishes the agreement' of WTO Members within

503We return to this question later when interpreting heading 02.10 of the EC Schedule in the light of
Article 32 of the Vienna Convention.
504Appellate Body Report, EC – Computer Equipment, para. 109.
505Ibid., para. 93.
506Panel Reports, para. 7.254.

the meaning of Article 31(3)(b)" can be reconciled with these statements of the Appellate Body in
EC – Computer Equipment.
507
267. We now turn to another aspect of the Panel' s finding on subsequent practice, namely, what
product range is relevant for purposes of establis hing "subsequent practice" in this case. The
European Communities submits on appeal that the Pa nel should have analyzed practice relating to
all salted products subject to heading 02.10, not just practice concerning frozen salted chicken cuts
with a salt content of between 1.2 and 3 per cent (the "products at issue"). According to the European
Communities, the Panel should also have examined the practice of classifying products containing salt
under alternative headings of Chapter 2 and, particularly, heading 02.07. 508 Brazil and Thailand
contend that practice concerning the products at is sue alone is relevant for purposes of establishing
"subsequent practice". 509 Alternatively, Thailand points out that the Panel did consider practice
relating to salted meat products classifiable under head ing 02.10 other than the "products at issue" to
the extent that the European Communities complied with the Panel's requests for information, but that
the Panel ultimately decided that this evidence was not persuasive.510
268. We have already noted that this dispute concer ns the interpretation of the tariff commitment
under heading 02.10 of the EC Schedule. In particular , it is the interpretation of the term "salted" in
heading 02.10 that is at the heart of this disput e. Therefore, what is relevant for purposes of
examining "subsequent practice" in this case is th e classification practice relating to the entire range
of salted meat products classifiable under headi ng 02.10, and not only the classification practice
relating to the subset of such products covered by the measures challenged in this dispute. As the
European Communities contends that the products at issue in this case are properly classified under
heading 02.07, practice of classifying products c ontaining salt under other headings of Chapter 2,
especially heading 02.07, may also be relevant.
269. In this regard, we note that the Panel refers in its reasoning to classification practice under the
"concession contained in heading 02.10" 511 as well as to classification practice relating to the
"products at issue".512 It is not clear from these statements wh ether the Panel considered relevant the
classification practice in respect of the entire range of salted meat products classifiable under
heading 02.10, or only in respect of the products at issue. In any event, with the exception of a BTI

507Ibid., para. 7.289.
508European Communities' response to questioning at the oral hearing.
509Brazil's appellee's submission, para. 153; Thailand's appellee's submission, para. 97.
511Panel Reports, para. 7.268.
512Ibid., paras. 7.265 and 7.269-7.276.

from Spain relating to dried and salted ham, the Pane l limited its analysis to the classification practice
relating to salted chicken cuts with a salt content of between 1.2 and 3 per cent, the products covered
by the measures it had determined to be within its te rms of reference. However, it is undisputed that
salted meat products other than chicken cuts with a sa lt content of 1.2 to 3 per cent are also subject to
heading 02.10 of the EC Schedule. The limitation in the Panel's terms of reference to measures
covering the products at issue did not justify the Panel excluding the examination of the classification
practice relating to other salted meat products classi fiable under heading 02.10 (or relevant alternative
headings such as heading 02.07) in its analysis of "subsequent practice".
270. In our view, as the Panel examined only a sub set of salted meat products classifiable under
heading 02.10, and it did not examine classification pr actice with respect to a lternative headings such
as heading 02.07, it could not draw valid conclusi ons as to the existence of "subsequent practice"
establishing the agreement of the parties within the meaning of Article 31(3)(b) with respect to all
salted meat products potentially covered by th e tariff commitment under heading 02.10 of the
EC Schedule.
B. How Does One Establish Agreement of Parties that Have Not Engaged in a Practice?
271. We recall that, under Article 31(3)(b), agreement of the parties regarding interpretation of a
treaty term must be established. This raises the question how to establish agreement of those parties
that have not engaged in a practice. According to the Panel, acceptance "deduced from a party's
reaction or lack of reaction to the practice" of a nother Member is sufficient to establish the agreement
of treaty parties regarding the interpretation of a provision.
513 The Panel held that, as other WTO
Members did not "protest" against the European Communities' classification practice from 1996 to
2002—whereby the products at issue were classified under heading 02.10—they can be presumed to
have accepted it.514
272. We agree with the Panel that, in general, agreement may be deduced from the affirmative
reaction of a treaty party. However, we have misgivings about deducing, without further inquiry ,
agreement with a practice from a party's "lack of reaction". We do not exclude that, in specific
situations, the "lack of reaction" or silence by a pa rticular treaty party may, in the light of attendant

513Panel Reports, footnote 396 to para. 7.253. Here, the Panel relied on Yasseen's statement that:
"acceptance by a party may be 'deduced from that party's reaction or lack of reaction to the practice at issue'."
514Panel Reports, para. 7.255.

circumstances, be understood as acceptance of the practice of other treaty parties.
515 Such situations
may occur when a party that has not engaged in a practice has become or has been made aware of the
practice of other parties (for example, by means of no tification or by virtue of participation in a forum
where it is discussed), but does not react to it. Ho wever, we disagree with the Panel that "lack of
protest" against one Member's classification prac tice by other WTO Members may be understood, on
its own, as establishing agreement with that practice by those other Members. Therefore, the fact that
Brazil and Thailand, having actually exported the products at issue, may have accepted the European
Communities' import classification practice under head ing 02.10, is not dispositive of whether other
Members with actual or potential trade interests ha ve also accepted that practice. We, therefore,
disagree with the Panel that "subsequent practi ce" under Article 31(3)(b) has been established by
virtue of the fact that the Panel "[had] not been provided any evidence to indicate that WTO Members
protested against the EC classification practice in question from 1996 - 2002".516

515"It is not necessary to show that each party has en gaged in a practice, only that all have accepted it,
albeit tacitly." (A. Aust, Modern Treaty Law and Practice (Cambridge University Press, 2000), p. 195) See also
D. Anzilotti, Corso di Diritto Internazionale ["International Law Course"], Vol. 1, IV Edizione (CEDAM,
1955), p. 292:
These conclusive facts also include silence, the value of which, as a
manifestation of will, obviously cannot be reduced to general rules, because
such value depends on the factual circumstances in which the silence is
observed ... It is easy, moreover, to e nvisage circumstances in which silence
on the part of a State cannot be construed as anything but indifference or
failure to express its will in any form: The recently expre ssed view that, in
international law, the principle of qui tacet consentire videtur is entirely
valid cannot be accepted in such general terms[.].
(Unofficial English translation from available French translation by G. Gidel, Cours de droit international ,
Vol. 1, III édition (Librairie du Recueil Sirey, 1929), p. 344);
J.P. Cot, "La Conduite subséquente des Parties à un traité" ["Subsequent Conduct of the Parties to a Treaty"], in
Revue Générale de Droit International Public (1966), 3rd series, Vol. 37, p. 645:
... the various facets of the subsequent conduct of the Parties in the law of
treaties: Where it is the subject of tacit agreement, subsequent conduct
should undoubtedly be approved by all the Parties; on the other hand, where
it is merely indicative of the will of th e Parties, it may be accepted even if it
stems from a single State. Its probative value then depends on the
circumstances of the case.
(Unofficial English translation; emphasis added);
W. Karl, Vertrag und spätere Praxis im Völkerrecht ["Treaty and Subsequent Practice in International Law"]
(Springer Verlag, 1983), pp. 113 and 127; and F. Capoto rti, "Sul Valore della Prassi Applicativa dei Trattati
Secondo la Convenzione di Vienna" ["On the Value of Practice in the Application of Treaties under the Vienna
Convention"], in Le Droit international à l'heure de sa codification , Studi in onore di Roberto Ago (Giuffré,
1987), Vol. I, pp. 197.
516Panel Reports, para. 7.255.

273. Finally, we recall that, according to the European Communities, Article IX:2 of the WTO
Agreement517 suggests that "any practice relating to th e interpretation of the multilateral trade
agreements and acceptance thereof mu st take the form of overt acts that are explicitly submitted for
consideration of all WTO Members and adopted by a large majority of the WTO Membership."518 To
our mind, the existence of Article IX:2 of the WTO Agreement is not dispositive for resolving the
issue of how to establish the agreement by Members th at have not engaged in a practice. We fail to
see how the express authorization in the WTO Agreement for Members to adopt interpretations of
WTO provisions—which requires a three-quarter majo rity vote and not a unanimous decision—would
impinge upon recourse to subsequent practice as a to ol of treaty interpretation under Article 31(3)(b)
of the Vienna Convention. In any case, we are mindful that the Appellate Body, in Japan – Alcoholic
Beverages II, cautioned that relying on "subsequent practi ce" for purposes of interpretation must not
lead to interference with the "exclusive authorit y" of the Ministerial Conference and the General
Council to adopt interpretations of WTO ag reements that are binding on all Members. 519 In our view,
this confirms that "lack of reaction" should no t lightly, without further inquiry into attendant
circumstances of a case, be read to imply agreement with an interpretation by treaty parties that have
not themselves engaged in a particular practice foll owed by other parties in the application of the
treaty. This is all the more so because the in terpretation of a treaty provision on the basis of
subsequent practice is binding on all parties to th e treaty, including those that have not actually
engaged in such practice.
C. Was there "Consistency" of Customs Classification Practice in this Case?
274. Our next task is to consider the Panel's conc lusion that there was evidence of a "consistent,
common and discernible pattern" of classification under heading 02.10 of the EC Schedule during the
period 1996 to 2002. 520 The Panel found "a reasonable indica tion of consistent practice" by the
European Communities between 1996 and 2002 on the basis of the classification of imports of the
products at issue under heading 02.10. 521 In addition, the Panel exam ined evidence of classification
practice regarding imports into and exports from Br azil and Thailand, and imports into and exports

517Article IX:2 of the WTO Agreement gives the "Ministerial Conference and the General Council …
the exclusive authority to adopt interpretations of [that] Agreement and of the Multilateral Trade Agreements".
518European Communities' appellant's submission, para. 124. (original underlining omitted)
519The fact that such "exclusive authority" to adopt interpretations of the treaty "has been established so
specifically in the WTO Agreement" was one of the reasons for the Appellate Body to conclude, in Japan –
Alcoholic Beverages II , that "such authority does not exist by implication or by inadvertence elsewhere".
(Appellate Body Report, Japan – Alcoholic Beverages II, p. 12, DSR 1996:I, 97, at 107)
520Panel Reports, paras. 7.265 and 7.275.
521Ibid., paras. 7.267 and 7.275. (original emphasis omitted)

from the third parties, namely, China and the Unit ed States, but found that this evidence was of
limited probative value.
522
275. However, in view of the fact that we di sagreed above with several aspects of the
interpretation and application by the Panel of the re quirements of Article 31(3)(b), we do not believe
that it is necessary for us to exam ine whether there was "consistency" of the European Communities'
classification practice between 1996 and 2002 so as to establish "subsequent practice" within the
meaning of Article 31(3)(b). Even if we were to agree with the Panel that the European Communities
consistently classified the "products at issue" unde r heading 02.10 of the EC Schedule, between 1996
and 2002, this would not change our view with resp ect to the Panel's interpretation and application of
Article 31(3)(b).
D. Conclusion
276. For the reasons set out above, we reverse the Panel's interpretation and application of the
concept of "subsequent practice" within the meaning of Article 31(3)(b) of the Vienna Convention ;
consequently, the Panel's conclusions , in paragraphs 7.289-7.290 and 7.303 of the Panel Reports, that
the European Communities' practic e of classifying, between 1996 and 2002, the products at issue
under heading 02.10 of the EC Schedule "amounts to subsequent practice" within the meaning of
Article 31(3)(b) of the Vienna Convention cannot stand.
XI. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention
A. Introduction
277. After summarizing the "preliminary conclusions" of its interpretative analysis of the term
"salted" in the tariff commitment under heading 02.10 of the EC Schedule in the light of Article 31 of
the Vienna Convention 523, the Panel stated:
... while the interpretation undertaken by the Panel pursuant to
Article 31 of the Vienna Convention suggests that the products at
issue are covered by the concession contained in heading 02.10 of the
EC Schedule, we turn to supplemen tary means of interpretation of
the concession contained in heading 02.10 of the EC Schedule
pursuant to Article 32 of the Vienna Convention to seek confirmation
that this is, in fact, the case.
524

522Panel Reports, paras. 7.284 and 7.288-7.289.
523Ibid., para. 7.331.
524Ibid., para. 7.332.

278. The Panel structured its analysis under Article 32 as follows. It looked first at "preparatory
works", and then continued with "circumstances of th e conclusion of the EC Schedule". It interpreted
the concept of "circumstances of [a treaty's] conclu sion" in respect of its substantive and temporal
scope. Having completed this gene ral interpretation of "circumsta nces", the Panel considered the
relevance, for the interpretation of the term "salted" in heading 02.10 in the EC Schedule, of certain
legal instruments of the European Communities (specifically, EC Regulation 535/94, the Dinter and
Gausepohl judgments 525 of the ECJ, and the Explanatory and Additional Notes to the European
Communities' customs legislation) and the classification practice of the European Communities.
279. The Panel concluded its analysis of "supplemen tary means" within the meaning of Article 32
with the following finding:
We considered EC Regulation No. 535/94, the Dinter and Gausepohl
ECJ judgements, EC Explanatory Notes, an EC Additional Note and
classification practice prior to the conclusion of the EC Schedule.
In the Panel's view, the relevant aspects of the supplementary means
of interpretation, most partic ularly, EC Regulation No. 535/94,
indicate that meat that has been deeply and homogeneously
impregnated with salt and has a minimum salt content of 1.2% by
weight would qualify as "salted" meat under the concession
contained in heading 02.10 of the EC Schedule. Therefore, the Panel
concludes that the supplementary me ans of interpretation considered
under Article 32 of the Vienna Convention confirm the preliminary
conclusions we reached ... above following an analysis under
Article 31 of the Vienna Convention.
526
280. The European Communities appeals the Panel's interpretation of the term "salted" in
heading 02.10 of the EC Schedule in the light of Article 32 of the Vienna Convention. It challenges
the Panel's interpretation of the concept of "circumstances of [a treaty's] conclusion" in Article 32 and
the legal characterization of, in particul ar, EC Regulation 535/94 and the ECJ's Gausepohl judgment.
The European Communities also clai ms that the Panel acted inconsistently with its obligations under
Article 11 of the DSU, to the extent that the Pa nel's conclusions under Ar ticle 32 were "premised on
an erroneous assessment of the facts".527

525ECJ Judgment, Dinter, supra footnote 151; ECJ Judgment, Gausepohl, supra, footnote 106.
526Panel Reports, para. 7.423.
527European Communities' Notice of Appeal (attached as Annex I to this Report), para. 2(e).

281. We recall that, above, we concluded that the te rm "salted" in heading 02.10, read in the
context of the Harmonized System, does not contain a requirement that salting must, by itself, ensure
"preservation".
528 At the same time, we have found that the Harmonized System does not, as such,
preclude the use of this criterion for purposes of cl assification and that Members have the flexibility
to negotiate particular tariff commitments within the parameters required by the Harmonized System.
The purpose of our analysis under Article 32 is, u ltimately, to ascertain whether WTO Members have
agreed on the preservation criterion advanced by the European Communities with respect to the tariff
commitment under heading 02.10 of the EC Schedule.
B. The Concept of "Circumstances of the Conclusion of a Treaty"
282. We begin our analysis by pointing out that th e means of interpretation listed in Article 32 529
are supplementary means to be resorted to when interpretation in the light of Article 31 leaves the
meaning of a treaty provision ambiguous or obscure , or, in order to confirm the meaning resulting
from the application of the interpretation methods liste d in Article 31. In this regard, we recall that
the Appellate Body recognized in EC – Computer Equipment that:
... the classification practice in the European Communities during the
Uruguay Round [was] part of 'the ci rcumstances of [the] conclusion'
of the WTO Agreement and may be used as a supplementary means
of interpretation within the meaning of Article 32 of the Vienna
Convention.530
283. We stress, moreover, that Article 32 does not define exhaustively the supplementary means of
interpretation to which an interpreter may have recourse. It states only that they include the
preparatory work of the treaty and the circumstanc es of its conclusion. Thus, an interpreter has a

528We noted that such criteria must either be specifically provided for in a tariff heading description, or
be discernible from the structure of the Harmonized System (including the relevant Section, Chapter,
Subheading or Explanatory Notes). See supra, paras. 229-230.
529Article 32 of the Vienna Convention provides that:
Recourse may be had to supplementary means of interpretation, including
the preparatory work of the treaty and the circumstances of its conclusion, in
order to confirm the meaning resulting from the application of article 31, or
to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is ma nifestly absurd or unreasonable.
530Appellate Body Report, EC – Computer Equipment, para. 92.

certain flexibility in considering relevant supplemen tary means in a given case so as to assist in
ascertaining the common intentions of the parties.531
284. The Panel interpreted the term "salted" in the tariff commitment under heading 02.10 of the
EC Schedule in the light of the circumstances of the conclusion of the WTO Agreement, noting that
these circumstances "may provide insights into the historical background against which the
EC Schedule was negotiated". 532 The Appellate Body expressed a similar view in EC – Computer
Equipment:
With regard to "the circumstances of [the] conclusion" of a treaty,
this permits, in appropriate cases, the examination of the historical
background against which the treaty was negotiated.533
285. The Panel considered as "circumstances of conclusion" in this case the "historical background
compris[ing] the collection of events, acts and ot her instruments that ch aracterize the prevailing
situation in the European Communities" 534 at the time the tariff commitment under heading 02.10 of
the EC Schedule was negotiated. Accordingly, the Panel decided to "consider EC law and the EC's
classification practice during the Uruguay Round negotiati ons to the extent that they are relevant to
the conclusion of the EC Schedule pursuant to Article 32".535

531We agree with Yasseen who says:
Let us not forget that the list of supplementary means of interpretation
contained in Article 32 of the Vienna Convention is not exhaustive. If the
circumstances in which the treaty was concluded are expressly mentioned, it
is to underline their importance in the elaboration of the Treaty, and not to
exclude the possibility of wider-ranging and more thorough historical
research into a period preceding that of the conclusion of the treaty[.]
(Yasseen, supra, footnote 70, p. 92, paras. 10-11 (quoted in Panel Reports, footnote 570 to para. 7.342))
532Panel Reports, para. 7.340. The Panel relied upo n Yasseen, who states that the circumstances of
conclusion are "the historical background that comprises the collection of events which led the parties to
conclude the treaty in order to maintain or confirm the status quo, or to bring about an alteration made necessary
by a new situation." (Yasseen, supra, footnote 70, p. 90, paras. 3-4 (quoted in Panel Reports, footnote 568 to
para. 7.340)) (emphasis added)
533Appellate Body Report, EC – Computer Equipment, para. 86 (referring, in footnote 65, to a
statement of Sinclair, on which the Panel also relied). For Sinclair, the reference in Article 32 to "circumstances
of the conclusion of a treaty" suggests that the interpreter should "bear constantly in mind the historical
background against which the treaty has been negotiated." (Sinclair, supra, footnote 36, p. 141)
534Panel Reports, para. 7.340. (footnote omitted)
535Ibid., para. 7.347. Specifically, the Panel examined EC Regulation 535/94, the ECJ's Dinter and
Gausepohl judgments, Explanatory and Additional Notes to the European Communities' customs legislation,
and the classification practice of the European Communities prior to 1994.

286. The European Communities challenges the Pane l's analysis under Article 32 on various
grounds. We discuss first the European Commun ities' arguments with respect to the Panel's
interpretation of the concept of "circumstances of the conclusion of the treaty".
1. The Concept of "Circumstances"

287. According to the European Communities, the con cept of "circumstances" must be interpreted
narrowly. Circumstances must have directly influe nced the common intention of all the parties to the
treaty. A very high degree of consistency and stri ct conditions as to duration are required for prior
practice to be established. WTO jurisprudence shows that a "circumstance" in the form of a condition
relating to a negotiating party must have been an ob jective fact, evident to all the negotiators at the
time. There must be a direct and genuine link between the relevant circumstances and the common
intentions of the parties; mere "constructive knowledge" is not sufficient.536
288. We turn first to the European Communities' argument that, for an "event, act or instrument" to
qualify as a "circumstance of the conclusion of a treaty", it "must have directly influenced the
common intentions of parties, that is, all parties to a treaty" 537 when they "were actually drafting the
text".538 According to the European Communities, in the absence of such a "direct link"539, any event,
act, or instrument does not amount to a "circumsta nce" within the meaning of Article 32. The
European Communities relies on the opinion of Yasseen who, in his work, L'interprétation des
conclusion" as the historical background that "comprises the collection of events which led the
parties to conclude the treaty in order to maintain or confirm the status quo, or to bring about an
alteration made necessary by a new situation". 540 The European Commun ities infers from this
statement that something that has not directly in fluenced the conclusion of the treaty cannot be a
"circumstance" of conclusion; nor does something that has not influenced all the parties to the treaty
qualify as such a "circumstance". The European Communities also relies on the Appellate Body's
statement in EC – Computer Equipment that "the purpose of treaty interpretation is to establish the

536European Communities' appellant's submission, executive summary, para. 34.
538Ibid., para. 253.
539Ibid., para. 228.
540Yasseen, supra, footnote 70, p. 48, para. 16. (emphasis added) Yasseen also wrote that treaties "are
the consequence of a series of causes." It is, therefor e, useful to know the "conditions of the parties and the
reality of the situation that the parties wished to resolve, the importance of the problem they wanted to settle and
the scope of the dispute they wanted to terminate through the Treaty being interpreted." (Ibid., p. 90, paras. 3-4)

common intentions of the parties" in support of its position that a circumstance must have directly
influenced the common intentions of the parties.541
289. Although we do not disagree with the general proposition by Yasseen, we do not agree with
the European Communities that a "direct link" to the treaty text and "direct influence" on the common
intentions must be shown for an event, act, or instrument to qualify as a "circumstance of the
conclusion" of a treaty under Article 32 of the Vienna Convention. An "event, act or instrument" may
be relevant as supplementary means of interpretatio n not only if it has actually influenced a specific
aspect of the treaty text in the sense of a relationship of cause and effect; it may also qualify as a
"circumstance of the conclusion" when it helps to discern what the common intentions of the parties
were at the time of the conclusion with respect to the treaty or specific provision. Moreover, the
European Communities has taken the Appellate Body statement out of context; the Appellate Body
was speaking of the sum or end-result of treaty interpretation; it should not be misconstrued as
introducing a concept that an act, event, or inst rument qualifies as a circumstance only when it has
influenced the intent of all the parties. Thus, not only "multilateral" sources, but also "unilateral" acts,
instruments, or statements of individual negotiating parties may be useful in ascertaining "the reality
of the situation which the parties wished to regul ate by means of the treaty" and, ultimately, for
discerning the common intentions of the parties.542
2. Relevance of Circumstances for Interpretation
290. We agree with the Panel that "relevance", as opposed to "direct influence" or "[genuine]
"link", is the "more appropriate criterion" to judge th e extent to which a particular event, act, or other
instrument should be relied upon or taken into account when interpreting a treaty provision in the light
of the "circumstances of its conclusion". 543 As to how such relevance should be demonstrated, the
Panel said that "it must be shown that the event, act or other instrument has or could have influenced
the specific aspects of the ultimate te xt of a treaty that are in issue." 544 The European Communities

541Appellate Body Report, EC – Computer Equipment, para. 93.
542Sinclair, supra, footnote 36, p. 141. Sinclair adds that it may also be necessary to take into account
"the individual attitudes of the parties—their economic, political and social conditions, their adherence to certain
groupings or their status, for example, as importing or exporting country in the particular case of a commodity
agreement—in seeking to determine the reality of the situation which the parties wished to regulate by means of
the treaty." (Ibid.)
543Panel Reports, paras. 7.343-7.344.
544Ibid., para. 7.343. (footnote omitted)

submits that the relevance of a circumstance should not be ascertained on the basis of whether it could
have influenced the ultimate treaty text but, rather, on the basis of "objective facts".
545
291. In our view, the relevance of a circumstance for interpretation should be determined on the
basis of objective factors, and not subjective intent. We can conceive of a number of objective factors
that may be useful in determining the degree of re levance of particular circumstances for interpreting
a specific treaty provision. These include the type of event, document, or instrument and its legal
nature; temporal relation of the circumstance to the conclusion of the treaty
546; actual knowledge or
mere access to a published act or instrument; subject matter of the document, instrument, or event in
relation to the treaty provision to be interpreted; and whether or how it was used or influenced the
negotiations of the treaty.
3. "Circumstances " at What Time?
292. As regards the temporal correlation between an event, act, or instrument and the conclusion of
the treaty, the Panel stated that:
... there is not necessarily a single point in time when the
"circumstances of conclusion" should be ascertained. Rather, we
consider that it relates to a period starting some time prior to the
conclusion of the treaty in question and ending at the point of
conclusion.
547 (footnote omitted)
293. According to the European Communities, the Pa nel's recognition that an interpreter should
ascertain the "circumstances of conclusion", not at a single point in time but, rather, over a certain
period, "sits uncomfortably" with the Panel's ob servation that the date of conclusion of the

546We note that the term "conclusion" has a temporal connotation that may give contextual guidance for
interpreting the relevance of "circumstances". (See infra, para. 293)
547Panel Reports, para. 7.342. The Panel relied upon Yasseen, who defined the "circumstances of
[a treaty's] conclusion" as:
... the circumstances of a certain period in time, that is to say the period
during which the treaty was concluded. But does this mean that the
possibility of historical research into an earlier period must be ruled out?
We think not. Indeed, it is useful, and sometimes even necessary, to carry
out such research in order to acquire a better understanding of the actual
circumstances in which the treaty was concluded. In any case, an overall
examination of the treaty's historical background may be considered as a
supplementary means of interpretation, given the series of events leading to
its conclusion.
(Yasseen, supra, footnote 70, p. 92, paras. 10-11 (quoted in Panel Reports, footnote 570 to para. 7.342)

WTO Agreement is 15 April 1994. 548 We disagree with the Eur opean Communities, because the
precise date of conclusion of a treaty should not be confused with the circumstances that were
prevailing at that point in time. Events, acts, and instruments may form part of the "historical
background against which the treaty was negotiate d", even when these circumstances predate the
point in time when the treaty is concluded, but cont inue to influence or reflect the common intentions
of the parties at the time of conclusion. We also agree with the Panel that there is "some correlation
between the timing of an event, act or other in strument ... and their relevance to the treaty in
question"549, in the sense that "the further back in time that an event, act or other instrument took
place, was enacted or was adopted relative to the conclusion of a treaty", the less relevant it will be for
interpreting the treaty in question. 550 What should be considered "temporally proximate will vary
from treaty provision to treaty provision" and may depend on the structure of the negotiating
process.551 Accordingly, we see no error in the Pane l's finding that the circumstances of the
conclusion should be ascertained over a period of tim e ending on the date of the conclusion of the
WTO Agreement.
4. What Kind of Knowledge is Required?
294. The European Communities also contests the Panel's "doctrine of 'constructive knowledge',
whereby all negotiating parties were deemed to have knowledge of a particular event, act or
instrument through publication". 552 The Panel considered "wheth er knowledge on the part of all
parties of an event, act or other instrument is n ecessary in order for [it] to qualify as 'circumstances of
conclusion' under Article 32".553 The Panel found that actual knowledge was not necessary, provided
that:

549Panel Reports, para. 7.344. We recall, in this vein, that the panel and the Appellate Body in
EC – Computer Equipment examined customs classification pr actice during the Uruguay Round when
interpreting the relevant part of the EC Schedule. (Appellate Body Report, EC – Computer Equipment, para. 93)
In considering "supplementary means of interpretation" in Canada – Dairy , the Appellate Body observed that
the terms and conditions at issue "were incorporated into Canada's Schedule after lengthy negotiations" between
Canada and the United Sates regarding "reciprocal mark et access opportunities for dairy products". (Appellate
Body Report, Canada – Dairy, para. 139) The Appellate Body also recognized in US – Gambling that certain
Scheduling Guidelines "were drafted in parallel with the GATS itself" and, in that sense, could be considered to
have been "drawn up on the occasion of the conc lusion of the treaty". (Appellate Body Report, US – Gambling,
footnote 244 to para. 196)
550Panel Reports, para. 7.344. See also Appellate Body Report, Chile – Price Band System , footnote
206 to para. 230.
551Panel Reports, para. 7.344.
553Panel Reports, para. 7.346.

... [when] parties have deemed notice of a particular event, act or
instrument through publication, they may be considered to have had
constructive knowledge and that such knowledge suffices for the
purposes of Article 32 of the Vienna Convention.
554 (emphasis added;
footnote omitted)
295. In the European Communities' view, "deemed knowledge" or publication is not sufficient for
purposes of Article 32; a "circumstance" must be an "objective fact, evident to all negotiators at the
time".555 The European Communities argues that "the Panel's notion of de emed knowledge on the
basis of general 'access' cannot substitute the need to demonstrate a direct link between a
circumstance and the common intentions of the parties."556
296. The Panel turned, as support for the concept of "constructive knowledge" of circumstances of
conclusion, to a statement made by Sir Iain Sinclair in his work, The Vienna Convention on the Law
of Treaties, in relation to "preparatory works". 557 This statement expresses concerns about "the unity
of a multilateral treaty" if "different methods of interpretation [w]ould be employed, the one for States
who participated in the travaux préparatoires and the other for States who did not so participate" and
acceded later on.558 The Panel saw "no reason why these comments would not be equally applicable
with respect to 'circumstances of conclusion' under Article 32 of the Vienna Convention."559 We are
not so convinced that the remarks on the knowledge of preparatory works by States not participating
in negotiations are applicable to the "circumstances of conclusion" which we are dealing with here.

554Panel Reports, para. 7.346.
556Ibid., para. 262.
557Sinclair stated that:
[R]ecourse to travaux préparatoires does not depend on the participation in
the drafting of the text of the State ag ainst whom the travaux are invoked.
To hold otherwise would disrupt the unity of a multilateral treaty, since it
would imply that two different methods of interpretation should be
employed, the one for States who participated in the travaux prèparatoires
and the other for States who did not so participate. One qualification
should, however, be made. The travaux préparatoires should be in the
public domain so that States which have not participated in the drafting of
the text should have the possibility of consulting them. Travaux
préparatoires which are kept secret by negotiating States should not be
capable of being invoked against subsequently acceding States.
(Sinclair, supra, footnote 36, p. 144 (quoted in Panel Reports, footnote 574 to para. 7.346))
558Ibid.
559Panel Reports, footnote 574 to para. 7.346.

297. We understand the Panel's notion of "construc tive knowledge" to mean that "parties have
deemed notice of a particular event, act or instrument through publication". 560 We note the European
Communities' view that "deemed knowledge" on the b asis of general "access" to a publication cannot
substitute the need for demonstrating a direct link between a circumstance and the common intentions
of the parties. 561 However, we consider that the Eur opean Communities conflates the preliminary
question of what may qualify as a "circumstance" of a treaty's conclusion with the separate question
of ascertaining the degree of relevance that may be ascribed to a given circumstance, for purposes of
interpretation under Article 32. As far as an act or instrument originating from an individual party
may be considered to be a circumstance under Artic le 32 for ascertaining the parties' intentions, we
consider that the fact that this act or instrume nt was officially published, and has been publicly
available so that any interested party could have acquired knowledge of it, appears to be enough. Of
course, proof of actual knowledge will increase th e degree of relevance of a circumstance for
interpretation.
5. Whose Acts or Instruments May Qualify as "Circumstances"?

298. In addition, the European Communities criticizes th e Panel for failing to take into account the
"internationally prevailing situation" and the pr actice of other Members, specifically, the United
States.562
299. As noted above, the Panel understood the "cir cumstances of conclusion" as the "historical
background" comprising "the collection of events, acts and other instruments" against which the treaty
was negotiated. The Panel found that the "historical background" against which heading 02.10 of the
EC Schedule was negotiated was the "events, acts and other instruments" that characterize the
"prevailing situation in the European Communities". 563 However, the Panel also referred in this
respect to the Appellate Body's guidance in EC – Computer Equipment that "it is most useful to
examine the classification practice of all WTO Members". 564 I n EC – Computer Equipment , the
Appellate Body emphasized that, "while each Sche dule represents the tariff commitments made by

560Panel Reports, para. 7.346.
562The European Communities refers to a ruling of United States' customs authorities of November
1993 dealing with fresh and frozen beef to which 3 per cent of salt had been added by means of tumbling. (Panel
Reports, para. 7.420) The European Communities submits that this ruling quotes Explanatory Notes of the
Combined Nomenclature and supports the proposition that heading 02.10 concerns meat salted for preservation.
(European Communities' appellant's submission, para. 290)
563Panel Reports, para. 7.340.
564Ibid., para. 7.421.

one Member, they represent a common agreement among all Members".
565 It also found that in the
"specific case of the interpretation of a tariff conc ession in a Schedule", the purpose of interpretation
is "to establish the common intention of the parties to the treaty". 566 The Appellate Body concluded
that:
... the classification practice of the importing Member, in fact, may
be of great importance. However, the Panel was mistaken in finding
that the classification practice of the United States was not
relevant.
567 (original emphasis)
300. We agree with the Panel that, for purposes of interpreting the term "salted" under
heading 02.10 of the EC Schedule in the light of the "circumstances of its conclusion", the customs
classification practice in the European Communities is of great importance 568; however, we share the
European Communities' view that its situation is not of exclusive relevance, and that the "prevailing
situation internationally" is relevant.569 We note that the Panel did, in fact, examine the United States'
classification practice. The Panel concluded that this evidence had limited probative value, notably
because it concerned products other than those at is sue. Moreover, the United States indicated that
the ruling of the United States' custom author ities of 1993 did not "endorse" the European
Communities' interpretation of heading 02.10. 570 We also observe that the Panel considered that it
had been provided with only "limited evidence" in respect of the classification practice of other WTO
Members.
301. In our view, the Panel's conclusion regarding the evidence of other WTO Members'
classification practice, including that of the United States, falls within its discretion as the trier of
facts. We, therefore, see no basis for objecting to the Panel's treatment of the "prevailing situation
internationally".

565Appellate Body Report, EC – Computer Equipment, para. 109. (original emphasis)
566Ibid., para. 93.
567Ibid.
568Panel Reports, para. 7.340.
569European Communities' Notice of Appeal (attached as Annex I to this Report), para. 3(a).
570United States' third participant's submission, paras. 7-10; United States' response to questioning at
the oral hearing.

6. What Types of Events, Acts, and Instruments?
302. The Panel also addressed the question of what types of events, acts, and other instruments
may be taken into account as circumstances of conclu sion under Article 32. In this dispute, the
question arises whether the classification practice of customs authorities and the customs legislation
of the European Communities and court judgments of the ECJ relating to tariff classification may be
relevant as "circumstances" of the conclusion of the WTO agreements, including the EC Schedule.
303. The Panel noted that the Appellate Body recognized in EC – Computer Equipment that:
... the classification practice in the European Communities during the
Uruguay Round [was] part of 'the ci rcumstances of [the] conclusion'
of the WTO Agreement and may be used as a supplementary means
of interpretation within the meaning of Article 32 of the Vienna
Convention.571 (emphasis added)
304. In this statement, the Appellate Body referred to customs classification practice prior to the
conclusion of a treaty. The Panel noted that prac tice that "does not qualify as 'subsequent practice'
under Article 31(3)(b) ... may, nevertheless, be taken into consideration under Article 32". 572 T h e
European Communities criticizes the Pane l for considering classification practice subsequent to the
conclusion of the treaty as relevant for purposes of interpretation under Article 32.573
305. In our view, it is possible that documents pub lished, events occurring, or practice followed
subsequent to the conclusion of the treaty may give an indication of what were, and what were not,
the "common intentions of the parties" at the time of the conclusion. 574 The relevance of such
documents, events or practice would have to be determined on a case-by-case basis.

571Appellate Body Report, EC – Computer Equipment, para. 92.
572Panel Reports, para. 7.422. The Panel found support for its position in Sinclair's statement that
Article 31(3)(b):
... does not cover subsequent practice in general, but only a specific form of
subsequent practice—that is to say, concordant, subsequent practice
common to all the parties. Subsequent practice which does not fall within
this narrow definition may nonetheless constitute a supplementary means of
interpretation within the meaning of Article 32 of the Convention.
(Sinclair, supra, footnote 36, p. 138 (quoted in Panel Reports, footnote 725 to para. 7.422))
573European Communities' appellant's submission, pa ras. 233-234 (referring to Panel Reports,
para. 7.422).
 574As we have noted above, the list of supplementary means in Article 32 is not exhaustive because the
Article refers to supplementary means of interpretation including the preparatory work of the treaty and the
circumstances of its conclusion. See also Yasseen, supra, footnote 70, p. 92, paras. 10-11, and his statement
cited supra, at footnote 531.

306. In addition, the European Communities asserts on appeal that the classification practice must
show a high level of "consistency" for it to be re levant as a "circumstance of the conclusion of a
treaty".
575 The European Communities refers to the "sta ndards of consistency" that were endorsed by
the Appellate Body in EC – Computer Equipment , and states that customs classification practice
should not be considered separately from applicable legislation. Moreover, according to the European
Communities, classification practice should not have been interrupted and must have "endured".576
307. We believe that the Appellate Body's statement in EC – Computer Equipment regarding the
"consistency" of classification practice should not be read as setting a be nchmark for determining
whether a particular classification practice may qualify at all as "circumstance of the conclusion". A
careful reading reveals that the Appellate Body addressed the degree of relevance of customs
classification practice. The Appellate Body said:
Consistent prior classification practice may often be significant.
Inconsistent classification practice, however, cannot be relevant in
interpreting the meaning of a tariff concession.
577 (original emphasis)
Thus, the Appellate Body concluded th at the "consistent prior classification practice" is "significant",
whereas "inconsistent classification practice" is not "relevant".
308. Regarding the relevance of legislation relating to customs classification for purposes of
interpretation, we agree with the Panel's reliance 578 on the following statement of the Appellate Body
in EC – Computer Equipment:
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.579 (emphasis added)

575European Communities' appellant's submission, paras. 239-242.
576Ibid., para. 241.
577Appellate Body Report, EC – Computer Equipment, para. 95.
578Panel Reports, para. 7.341.
579Appellate Body Report, EC – Computer Equipment, para. 94.

309. In addition, the Panel asked whether a Member's court judgments may, in principle, be taken
into account as supplementary means of interpretation under Article 32. The Panel concluded that:
This would suggest that a valid distinction cannot be drawn
between, on the one hand, EC legisl ation and, on the other hand,
ECJ judgements for the purposes of Article 32 of the Vienna
Convention.580 (footnote omitted)
We share the Panel's consideration that judgments of domestic courts are not, in principle, excluded
from consideration as "circumstances of the conclusion" of a treaty if they would be of assistance in
ascertaining the common intentions of the parties for purposes of interpretation under Article 32.
581 It
is necessary to point out, however, that judgments deal basically with a specific dispute and have, by
their very nature, less relevance than legislative acts of general applicati on (although judgments may
have some precedential effect in certain legal systems).582
C. Characterization of Relevant Law of the European Communities
310. Having discussed the concept of "circumstances of the conclusion of a treaty" within the
meaning of Article 32, we turn to reviewing th e Panel's findings determin ing the relevance, for
interpreting the term "salted" in the tariff commitment under heading 02.10 of the EC Schedule, of the
customs classification legislation, practice, a nd court judgments of the European Communities
(namely, EC Regulation 535/94, the Dinter and Gausepohl judgments of the ECJ, certain Explanatory
Notes to the Combined Nomenclature, and classi fication practice prior and subsequent to the
conclusion of the EC Schedule). We then review whether the elements of the European Communities'
law and practice examined by the Panel qualify as supplementary means of interpretation under
Article 32 and support the Panel's conclusion with resp ect to the meaning of the term "salted" in the
tariff commitment under heading 02.10 of the EC Schedule.

580Panel Reports, para. 7.391. The Panel believed that its "conclusion would seem to be particularly
valid in relation to the present case where the ECJ judgements in question interpret EC legislation. In [the
Panel's] view, it would be an odd situation if such legislation could be considered under Article 32 of the Vienna
Convention but not court judgements, which interpret that legislation." (Ibid., footnote 681 thereto)
581In this respect, we note the United States' argum ent that, "where a Member's domestic system
provides for judicial decisions to have a role in inte rpreting or understanding legi slation ... it follows that
judicial decisions need to be taken into account as we ll." (United States' response to questioning at the oral
hearing) See also China's third participant's submission, paras. 28-36.
582The European Communities appeals certain aspects of the Panel's interpretation of the concept of
"circumstances of conclusion". Howeve r, it argues that, if domestic instruments are taken into account at all
under Article 32, then domestic court judgments must be considered as well. The European Communities
objects to the Panel's characterization of those judgments in relation to other domestic instruments.

311. The European Communities submits on appeal that the Panel mischaracterized the customs
classification law and practice of the European Co mmunities, in particular EC Regulation 535/94 and
the ECJ judgment in Gausepohl, and that this mischaracterization amounts to a distortion of facts
contrary to Article 11 of the DSU.
583 According to the European Communities, the Panel failed to
consider the "totality" of the European Commun ities' customs legislation, practice, and court
judgments and erred in interpreting the interac tion between various elements of the European
Communities' legal system.584 The European Communities challenges specifically the Panel's finding
that EC Regulation 535/94 "superseded" the ECJ judgment in Gausepohl, such that the criterion of
preservation under heading 02.10 of the European Communities' Combined Nomenclature no longer
applies.585
312. Brazil contends that EC Regulation 535/94 introduced an objective criterion for the
classification of salted meat (deep salt impregnation w ith a salt content of at least 1.2 per cent), and
did not refer to the concept of "preservation". Br azil observes that the Regulation was enacted before
the conclusion of the WTO agreements and therefor e determines the product definition that applies to
heading 02.10 of the European Communities' WT O Schedule. Brazil submits that the Panel
appropriately considered relevant law, practice, and court judgments of the European Communities.
According to Brazil, even if the European Commission took the ECJ's judgment in Gausepohl into
account in enacting EC Regulation 535/94, that ju dgment suggests that deep impregnation with at
least 1.2 per cent of salt meets the ECJ's understanding of "preservation".586
313. Thailand argues that, in Gausepohl, the ECJ held that there are three characteristics for bovine
meat to be classified under heading 02.10: the meat must (i) be deeply and evenly impregnated with
salt in all its parts; (ii) be for the purpose of pres ervation; and (iii) have a minimum total salt content
of 1.2 per cent by weight. 587 In contrast, Additional Note 7, in serted into the European Communities'
Combined Nomenclature through EC Regulation 535/94, provides that, in order to fall under
heading 02.10, meat must (i) be deeply and homogene ously impregnated with salt in all its parts; and
(ii) have a total salt content of not less than 1.2 pe r cent by weight. In Thailand's view, the European

584Ibid., para. 273.
challenges the Panel's interpretation of the ECJ's judgment in Gausepohl, with respect to heading 02.10,
as not being necessarily governed by the principle of "long-term preservation". (European Communities'
appellant's submission, paras. 275-276 (referring to Panel Reports, paras. 7.398-7.400))

Communities deliberately omitted from EC Regulation 535/94 the criterion that salting must ensure
preservation.588
1. EC Regulation 535/94
314. As explained above 589, EC Regulation 535/94 provided a product description for
heading 02.10 of the European Communities' Co mbined Nomenclature that was inserted as an
Additional Note into Chapter 2 of that nomenclature.590 The Additional Note states:
For the purposes of heading No. 0210, the term 'salted' means meat
or edible meat offal which has been deeply and homogenously
impregnated with salt in all parts, having a total salt content of no
less than 1.2% by weight.
315. The recitals to EC Regulation 535/94 indicate the reasons why it was enacted:
Whereas, to ensure uniform application of the Combined
Nomenclature, provisions should be laid down for the classification
of salted meat and edible meat offa l falling within CN code heading
0210, in order to distinguish them from fresh, chilled or frozen meat
and edible meat offal; whereas a total salt content of 1.2% or more
by weight appears an appropriate criterion for distinguishing between
these two types of products.
316. Regarding the legal effect of EC Regulation 53 5/94 in European Communities' law, the Panel
found that:
... EC Regulation No. 535/94 introdu ced an Additional Note into the
[Combined Nomenclature]. The effect of that Regulation, through
the Additional Note that it introdu ced, was that if meat had been
deeply and homogeneously impregnated with salt, with a minimum
salt content of 1.2% by weight, it would meet the requirements of
that Regulation and would qualify as "salted" meat under
heading 02.10 of the [Combined Nomenclature].
591

588Thailand's appellee's submission, paras. 160-161.
589See supra, para. 142.
590This Additional Note to the Combined Nomenclature was originally numbered Additional Note 8,
but was subsequently renumbered as Additional Note 7.
591Panel Reports, para. 7.369.

317. The Panel observed that EC Regulation 535/94 was part of the European Communities'
legislation on customs classification at the time of the conclusion of the WTO agreements and that,
therefore, it is relevant as a "circumstance of its conclusion".
592 We agree with the Panel that "the
mere fact that an act, such as EC Regulation No. 535/ 94, is unilateral, does not mean that that act is
automatically disqualified from consideration under Article 32".593 Indeed, this is consistent with the
Appellate Body's statement in EC – Computer Equipment that a Member's customs legislation is
relevant in interpreting tariff concessions.594
318. We turn now to review the Panel's findings concerning the relevance of EC Regulation 535/94
for purposes of interpreting the term "salted" in the tariff commitment under heading 02.10 of the
EC Schedule in the light of Article 32. As we noted above 595, a number of factors may be useful in
ascertaining the relevance of a "circumstance of conclusion" for interpretation.
319. We look first to the temporal aspect of the relevance of EC Regulation 535/94. We note that
it was published in the Official Journal of the European Communities on 11 March 1994 and entered
into force on 1 April 1994. 596 Having considered the participants ' arguments, we believe that the
temporal proximity of these dates to the conclusion of the WTO Agreement on 15 April 1994 makes
EC Regulation 535/94 relevant as a "circumstance of conclusion" for the interpretation of the tariff
commitment under heading 02.10 of the EC Schedule.
320. The European Communities submits that the final results of tariff negotiations that took place
between 1986 and 15 December 1993 cannot be altered by a unilateral measure. 597 We agree.
However, the European Communities acknowledges that a legislative act taken during the verification
period, prior to the formal adoption of the WTO Agreement , could be relevant for interpreting the

592Panel Reports, para. 7.360 (referring to Appellate Body Report, EC – Computer Equipment ,
para. 94).
593Ibid., para. 7.360. We note the argument of the United States that EC Regulation 535/94 may be
relevant as evidence of the meaning that the European Communities itself assigned to the term "salted" under
Article 31(1) of the Vienna Convention or, alternatively, that it could be considered as part of the "circumstances
of [the] conclusion" of the WTO Agreement under Article 32. (United States ' third participant's submission,
paras. 5-6)
594Appellate Body Report, EC – Computer Equipment, para. 94.
595Supra, para. 291.
596The European Communities points out that the Regulation was published after the tariff negotiations
of the Uruguay Round ended on 15 December 1993. We also note the ar gument of Brazil and Thailand that the
publication occurred before the period for verification of Schedules resulting from those negotiations ended on
25 March of 1994, and that the verification process was an important and integral component of the negotiating
process leading to the conclusion of the Schedules of WTO Members.

tariff commitment under heading 02.10 of the EC Schedule, provided that compelling evidence proves
that negotiators "actually took note" of such act.598
321. We do not believe that the mere fact that EC Regulation 535/94 was enacted after the
conclusion of the Uruguay Round tariff negotiations makes it irrelevant for ascertaining what the
European Communities intended when offering its ta riff concession, or for ascertaining whether it
reflects the common intentions of the parties in respect of the tariff commitment under heading 02.10
of the EC Schedule.
322. Turning to the subject-matter, EC Regulation 535/94 (which in serts an Additional Note to
heading 02.10 of the European Communities' Combined Nomenclature) clearly covers the same salted
meat products that fall under the tariff commitment under heading 02.10 of the European
Communities' WTO Schedule. Although the Eur opean Communities' Combined Nomenclature
cannot be equated with the European Communitie s' WTO Schedule, the Combined Nomenclature
implements the European Communities' WTO Schedu le and the Harmonized System in the domestic
legal system of the European Communities.
599
323. Turning to the content of EC Regulation 535/ 94, we note that, although Additional Note 7
mentions deep impregnation with salt, with a minimu m salt content of 1.2 per cent by weight, there is
no criterion of preservation or long-term preservation st ated in the text of that Regulation. The
European Communities contends that EC Regula tion 535/94 provides only one part of the product
description applicable to the tariff commitment under heading 02.10 of the EC Schedule. According
to the European Communities, for purposes of th e tariff commitment under heading 02.10 of the
EC Schedule, salting must ensure long-term preser vation, and this require ment is not altered by
EC Regulation 535/94.
324. The European Communities supports its position with several arguments. First, it asserts that
the criterion of preservation is intrinsic to and fl ows directly from heading 02.10 of the Harmonized
System. In addition, it contends that the notion of "preservation" has always governed the European
Communities' customs classification practice for "salted" meat products and that it has also been
confirmed in judicial pronouncements of the ECJ since the 1980s. 600 EC Regulation 535/94 lays
down only a technical minimum level of 1.2 per cent of salt for considering a product to be salted for
"preservation", but it does not and cannot "supersede" the requirement of "preservation". As we held

598European Communities' appellant's submission, paras. 305, 308, and 310.
599The Combined Nomenclature may also contain additional specifications and requirements to the
extent that those are not precluded by the Harmonized System or WTO law.
600European Communities' appellant's submission, paras. 282-284.

above, the product description in heading 02.10 of the Harmonized System (read together with
relevant Chapter and Explanatory Notes) does not contain a requirement of "preservation" and does
not limit the scope of heading 02.10 of the Harmon ized System to products that are salted for the
purpose of "preservation".
601 However, we do not see that EC Regulation 535/94 explicitly requires
that meat must be salted so as to ensure "preservation".
325. We turn next to the European Communities assertion that the requirement of preservation in
respect of heading 02.10 flows from prior case-law of the ECJ interpreting European Communities'
customs legislation and from relevant Explanatory Notes. According to the European Communities,
that criterion was embedded in the European Commun ities' legal system also after the enactment of
EC Regulation 535/94 as well, because that Regula tion only implements, but cannot derogate from,
ECJ case-law and the European Communities' Combined Nomenclature.
2. The Dinter and Gausepohl Judgments of the European Court of Justice
326. The Panel addressed the ECJ judgments in Dinter and Gausepohl before dealing with the
Explanatory Notes from the 1980s. In 1982-1983, the ECJ was asked in the Dinter case602 whether
turkey meat seasoned with salt and pepper was pr operly classified under Chapter 2 or, instead, under
Chapter 16 of the European Communities' Combined Nomenclature. The ECJ ruled that the meat was
properly classified under Chapter 16, because "Chapter 02 comprises poultrymeat which has
undergone a preserving process."
 603
327. We note that the Dinter judgment relates to salted turkey meat, which is a subset of the
products covered by heading 02.10 of the EC Schedul e. However, the temporal relationship between
that judgment (published in 1983) and the conclusion of the WTO Agreement is remote. In our view,
this diminishes its relevance for the "historic background" against which tariff commitments were
negotiated during the Uruguay Round. We agree with the Panel that the Gausepohl judgment
(published in May 1993) is more relevant.604

601However, we also found above, that preserva tion criterion may be agreed upon between WTO
Members within the parameters required by the Harm onized System with respect to a particular tariff
commitment. (See Section VIII.B of this Report entitled "Context")
 603The ECJ further stated in Dinter that chapter 2 "refers to frozen, chilled or salted meat or meat in
brine and dried or smoked meat. Seasoning which is not intended as a preservative of meat does not appear
among those processes." (Ibid. (emphasis added))
604Panel Reports, paras. 7.392-7.394.

328. In 1993, in Gausepohl, the ECJ considered the question whether beef to which salt had been
added should be classified under heading 02.10.605 The ECJ held that:
... meat of bovine animals to which a quantity of salt has been added
merely for the purpose of transpor tation cannot be regarded as
salted for the purposes of heading 0210. On the other hand, salting as
a method of preserving meat of bovine animals for a longer period
must be applied evenly to all parts of the meat.

The reply to the questions from the national court should therefore be
that heading 0210 of the Common Customs Tariff (Combined
Nomenclature) must be interpreted as meaning that meat of bovine
animals may be classified under that heading as salted meat only if it
has been deeply and evenly impregnated with salt in all its parts for
the purposes of long-term preservation so that it has a minimum total
salt content of 1.2% by weight.
606 (emphasis added)
329. As to the meaning of the Gausepohl judgment in European Communities' law, the Panel took
the view that:
Heading 0210 of [the Combined Nomenclature] … must be
interpreted as meaning that meat of bovine animals may be classified
under that heading as salted meat only if it has been deeply and
evenly impregnated with salt in all its parts for the purposes of long-
term preservation so that it has a minimum total salt-content of 1.2%
by weight.
607
However, the Panel found that:
… the aspects of the Gausepohl judgment that are relevant to this
case [—that is, preservation or long-term preservation—] were
superseded through the enactment of EC Regulation No. 535/94. 608
(emphasis added)

605ECJ Judgment, Gausepohl, supra, footnote 106, paras. 10-12 and 16.
606Ibid.
607Panel Reports, para. 7.396 (quoting ECJ Judgment, Gausepohl, supra, footnote 106, paras. 10-12
and 16).
608Ibid., para. 7.405.

330. The Panel also considered that there were "certain ambiguities concerning the meaning and
effect of the Gausepohl judgment". The Panel understood the judgment to mean that "bovine meat
that has been deeply and homogeneously impregna ted with salt and has a minimum salt content of
1.2% by weight will be covered by heading 02.10 of the EC Schedule".
609 It was not persuaded that
"the 1.2% salt content is merely a minimum a bove which it is possible that meat qualifies under
heading 02.10, presumably subject to meeting other conditions" 610 (such as a preservation criterion).
The Panel, therefore, concluded that its interpreta tion of the term "salted" in the tariff commitment
under heading 02.10 of the EC Schedule as exclud ing a requirement that salting must ensure
preservation was "not affected" by the Gausepohl judgment.611
331. The European Communities challenges the Panel's finding that EC Regulation 535/94
"superseded" the ECJ Gausepohl judgment, such that the criteri on of preservation in heading 02.10
of the European Communities' Combin ed Nomenclature no longer applies. 612 According to the
European Communities, the Panel failed to consider the "totality" of the European Communities' legal
system (including customs legislation, practice, and court judgments) 613 and erred in interpreting the
interaction between various elements of the European Communities' legal system.614 Specifically, the
European Communities submits that a Commission Regulation cannot override an interpretation given
by the ECJ to the European Communities' Combin ed Nomenclature, where that Nomenclature is
implementing the Harmonized System 615, because the Commission "is only empowered to issue
Regulations at the 'technical level' to ensure the uniform implementation of the Combined
Nomenclature".616 In addition, the European Communities ch allenges the Panel's interpretation of the
Gausepohl judgment as not being necessarily governed by the principle of "long-term
preservation".617 Thailand contends that EC Regulation 535/94 did not alter the scope of heading

609Panel Reports, para. 7.399.
610Ibid.
611Ibid., para. 7.405.
613Ibid., para. 273.
614Ibid., paras. 274 ff.
615Ibid., para. 279 (referring to ECJ Judgment, French Republic v. Commission , Case C-267/94, ECR
[1995] p. I-4845).
616Ibid., para. 283.
617Ibid., paras. 275-276 (referring to Panel Reports, paras. 7.398-7.400).

02.10 as interpreted by the ECJ in Dinter and Gausepohl 618; rather, it merely specified the criteria to
be taken into account for classifying products under heading 02.10.619
332. Regarding the relevance of the Gausepohl judgment for the interpretation of the term "salted"
in heading 02.10, we note that the Panel ascribed relevance to Gausepohl because that judgment
concerned "the interpretation of heading 02.10 of the [Combined Nomenclature], corresponding to the
specific heading at issue in this dispute". 620 We also note that salted beef—at issue in Gausepohl—
is a subset of the products that may fall under head ing 02.10, and thus both concern the same subject
matter.621
333. We further note, as did the Panel, the te mporal proximity between the publication
of the Gausepohl judgment in May 1993, the Uruguay Round tariff negotiations that came to an end
in December 1993, and the conclusion of the WTO Agreement in April 1994. 622 However, temporal
correlation alone should not be taken to imply that the Gausepohl judgment actually influenced or
reflected, in substance, the common intentions of th e negotiators with respect to heading 02.10 of the
EC Schedule.
334. The Panel record does not indicate that parties to the Uruguay Round tariff negotiations other
than the European Communities had actual knowledge of the Gausepohl judgment, although they
could have taken notice of the publication of the judgment outside the framework of the Uruguay
Round.623 However, we noted above that mere access to a published judgment cannot be equated with

619Ibid., para. 166. Thailand refers to an ECJ judgment ( Gijs van de Kolk-Douane Expéditeur BV v
Inspecteur der Invoerrecten en Accijnzen , Case C-233/88, ECR [1990] I-00265, para. 18 (Exhibit THA-35
submitted by Thailand to the Panel)) where the ECJ reviewed an Additional Note that did not change the scope
of the chapters, sections and headings of the Combined Nomenclature, but merely specified the criteria to be
taken into account for classifying certain goods under a particular heading of the Common Customs Tariff".
(Thailand's appellee's submission, para. 167) At the oral hearing, Brazil and Thailand argued that EC
Regulation 535/94 clarified or implemented the Gausepohl judgment, rather than superseded it.
620Panel Reports, para. 7.394.
621As we have noted earlier, what is at issue in th e present dispute is the interpretation of the term
"salted" in the tariff commitment under heading 02.10 of the EC Schedule, rather than the classification of the
frozen salted poultry meat covered by the challenged measures.
622Panel Reports, paras. 7.392-7.394.
623Brazil stated that, contrary to what the European Communities argued before the Panel, it had
knowledge of EC Regulation 535/94 because, "during the Uruguay Round, the Brazilian Mission in Brussels
[was] tasked with monitoring legislative developments in the EC through the publication of legislative acts in
the EC's Official Journal. Monitoring and verification of Court judgements, however, have never been a part of
that job, and it still is not." (Brazil's response to Questio n 122 posed by the Panel, Panel Reports, pp. C-57-C-58
(original emphasis omitted)), At the oral hearing befo re the Appellate Body, Brazil and Thailand stated that
tariff negotiators cannot be expected to follow the publication of ECJ judgments in the European Court Reports.

acceptance of the criterion of preservation (assuming that the Gausepohl judgment enshrines it).
Therefore, we are not persuaded that the negotia ting partners of the European Communities can be
said to have negotiated the tariff commitment under heading 02.10 of the EC Schedule against the
background of a requirement that "salting" must ensure preservation (assuming that it is enshrined in
ECJ case-law).
335. In general, tariff commitments are negotiate d against the background of the situation
prevailing in the negotiating parties prior to the conc lusion of the treaty (including, in particular, the
situation of the importing Member). However, in th is case, as pointed out by the Panel, it is not
entirely clear whether the ECJ's Gausepohl judgment implies that bovine me at that has been deeply
and homogeneously impregna ted with a salt content of 1.2 per cent will ipso facto be considered as
preserved for the long-term, and thus covered by head ing 02.10 of the EC Schedule; or, whether the
judgment should be read in the sense that the 1.2 per cent salt content is merely a minimum above
which meat qualifies under heading 02.10 only if it is additionally preserved for the long-term.
Therefore, it is not clear whether the ECJ's Gausepohl judgment requires that, for purposes of
heading 02.10, salting must ensure preservation, and whether such a criterion "lives on" in the
European Communities' legal system after EC Regulation 535/94 entered into force.
336. Regarding the interaction between EC Regulation 535/94 and the Gausepohl judgment, we do
not find it necessary, for purposes of resolving this appeal, to decide whether the Regulation
"superseded" the judgment.
624 Regardless of whether EC Regulation 535/94 "superseded", clarified,
or implemented the ECJ judgment in Gausepohl, we are not persuaded that Gausepohl must be
understood in the sense that the 1.2 per cent salt content is merely a minimum above which it is
necessary to show—in addition—that salting ensures long-term preservation. 625 In any event, we do
not see evidence on record that the Gausepohl judgment was taken into account in the Uruguay
Round negotiations with respect to the tariff commitment at issue.
337. In addition, the European Communities argues th at the Panel incorrectly "dismissed" relevant
Explanatory Notes to the European Communitie s' Combined Nomenclature, although these Notes
remained relevant for assessing classification practice even after the insertion of the Additional Note

624Panel Reports, para. 7.402.
625We recall in this regard the Panel's conclusion that Gausepohl meant that "meat that has been deeply
and homogeneously impregnated with salt and has a mi nimum salt content of 1.2% by weight" will be
considered as preserved and thus "covered by heading 02.10 of the EC Schedule". (Ibid., para. 7.399)

to the Combined Nomenclature through EC Regulation 535/94. 626 In 1981 627, and again in 1983, the
European Communities inserted an Explanat ory Note into its Common Customs Tariff. 628 According
to the European Communities, both Explanatory No tes suggest that only meat salted for the purpose
of "preservation" is classifiable under heading 02.10 of the EC Schedule. We note that the Panel did
not ignore, but rather considered the releva nce of the Explanatory Notes for interpreting
heading 02.10 of the EC Schedule. The Panel decided that these Notes did not suggest that a criterion
of preservation applied under that tariff commitment. 629 We also note the remote temporal
relationship between these Explanatory Notes from the early 1980s and the conclusion of the WTO
Agreement.
338. We now turn to consider whether the classi fication practice of the European Communities
after the conclusion of the WTO Agreement confirms the European Communities' position that the
criterion of "preservation" governs its customs classification practice. 630 In this regard, we note that
EC Regulation 535/94 remained in force and seems to have determined the customs classification
practice of the European Communities between 1996 a nd 2002. We recall that the Panel examined,
in its analysis under Article 31(3)(b), three sets of evidence regarding the classification practice
of the European Communities between 1996 a nd 2002: (i) the European Communities'
acknowledgement that, during this period, certain European Communities' customs offices were
classifying the products at issue under heading 02 .10; (ii) a number of BTIs relating to the
classification by European Communities' Customs authorities under heading 02.10; and (iii) three

627The 1981 Explanatory Note to Common Customs Tariff (the predecessor of the Combined
Nomenclature) refers to heading 02.06 of the Brussels Nomenclature and provided that heading 02.06 covered
only swine meat that has:
... been preserved, by deep dry salting or pickling in brine without any other
supplementary treatment such as drying or smoking. The percentage salt
content necessary to ensure preservation may vary considerably between
different types and cuts of meat. Although this method of preservation is
normally used as a temporary measure, the period of such preservation must
considerably exceed the time required for transportation. Meat merely
sprinkled with salt in order to ensure its preservation while being
transported remains classified as fresh meat.
628The 1983 Explanatory Note, concerning subheadings 0203.22-11 and 0203.22-19, referred to "frozen
hams, shoulder or cuts thereof, with bones" and states:
Hams, shoulders and parts thereof which have been partially dehydrated, but
the actual preservation of which is ensured by freezing or deep-freezing,
fall in subheadings 0203.22-11 or 0203.22-19. (emphasis added)
629Panel Reports, paras. 7.413 and 7.416.
630We noted above that classification practice subsequent to the conclusion of a treaty may give an
indication of what was intended at the time of its conclusion. (See supra, para. 305)

sets of minutes of meetings of the European Communities' Customs Code Committee concerning
classification under heading 02.10.
631
339. More specifically, the European Commun ities had acknowledged th at, between 1996 and
2002, customs offices at major ports of the Europ ean Communities (including Hamburg, Rotterdam,
and certain ports in the United Kingdom) were classify ing products with a salt content of between 1.2
and 3 per cent under heading 02.10 632, and that "substantial trade" of the products at issue entered the
European Communities under that tariff heading during the period 1996 to 2002.633
340. Moreover, the Panel reviewed a number of BT I notices relating to product classification by
customs authorities under heading 02.10. The BTIs pertaining to frozen salted chicken cuts with a
salt content of between 1.2 and 3 per cent indicat ed that, from 1998 to 2002, these products were
classified under subheading 02.10.90.634 The Panel also stated that it was not provided with any BTIs
indicating that the products at issue were being classified under any heading other than heading 02.10
(such as, for instance, heading 02.07) before the introduction of EC Regulation 1223/2002 and
EC Decision 2003/97/EC.635
341. Turning to the minutes of the meetings of the European Communities' Customs Code
Committee concerning classification under heading 02.10 , the Panel observed that, at the relevant
meetings, the Committee considered that products wi th characteristics matching those of the products
at issue were "classifiable" and were also classified under heading 02.10.636
342. The Panel also reviewed trade statistics concerning trade flows into the European
Communities under headings 02.07 and 02.10 of the EC Schedule. 637 According to the Panel, when
read together, the BTIs and trade data indicate that, between 1996 and 2002, significant trade volumes
of chicken cuts with a salt content of 1.2 to 3 per cent imported from Brazil and Thailand to the
European Communities were being classified under heading 02.10.638

631Panel Reports, para. 7.268.
632Ibid., paras. 7.260 and 7.269.
633Ibid., paras. 7.269 and 7.275.
634Ibid., para. 7.270.
635Ibid., para. 7.275.
636Ibid., paras. 7.272 and 7.275.
637Ibid., para. 7.272.
638Ibid., paras. 7.272 and 7.275.

343. Thus, the evidence reviewed by the Panel does not indicate that a requirement that salting
must ensure long-term preservation was applied in the customs classification practice of the European
Communities under heading 02.10 between 1994 and 20 02 pursuant to EC Regulation 535/94. In
view of this, we fail to see how such a criterion could have entered into—even by implication—an
agreement between the European Communities and other WTO Members with respect to the tariff
commitment under heading 02.10 of the EC Schedule.
344. As we held above, the term "salted" in h eading 02.10 of the Harmonized System does not
contain a requirement that salting must, by itself, ensure long-term preservation; but, at the same
time, it does not exclude the notion of "preservation". Therefore, we are of the view that, if a specific
criterion of long-term preservation—such as th e one advocated by the European Communities,
namely, that salting, by itself, must ensure long-term preservation and that therefore it must be "much
higher than 3%"—is to form a part of the tari ff commitment of the European Communities under its
Schedule relating to heading 02.10, then there must be clear evidence that such a criterion was agreed
upon by the parties for the European Communities' WTO Schedule. We see no such evidence on
record; nor do we see it stated explicitly in the European Communities' custom s legislation in force
at the time of conclusion of the WTO Agreement , namely, EC Regulation 535/94; nor do we
find it clearly enshrined in the ECJ's case-law prior to the enactment of EC Regulation 535/94.
Rather, we find that the products at issue in this dispute were invariably classified by the customs
authorities under heading 02.10 between 1996 a nd 2002, when the European Communities
adopted EC Regulation 1 223/2002, introducing the phrase "provide d ... salting ensures long-term
preservation".
345. We turn briefly to the European Communities' claim under Article 11 of the DSU. In the
light of the foregoing, we disagree with the Europ ean Communities that the Panel failed to consider
the "totality" of the European Communities' legal system.
639 To the contrary, the Panel examined
relevant customs legislation, practice, and re levant court judgments of the ECJ, although it
characterized the Gausepohl judgment and interpreted the interac tion between this judgment and EC
Regulation 535/94 in a way with which the European Communities does not agree. 640 Therefore, we
find that the Panel did not fail to make an objectiv e assessment of the facts within the meaning of
Article 11 of the DSU.

640Ibid., paras. 274 ff.

D. Conclusion
346. For the reasons set out above, we modify certain aspects of the Panel's interpretation of the
concept of "circumstances of [a treaty's] conclu sion" within the meaning of Article 32 of the Vienna
Convention; and find that the term "salted" in the tariff commitment under heading 02.10 of the
EC Schedule, interpreted in the light of supplementary means under Article 32 of the Vienna
Convention, does not include the requirement that salting must be for the purpose of preservation.
Therefore, we uphold the Panel's conclusion, in paragraph 7.423 of the Panel Reports, that the
supplementary means of interpretati on considered under Article 32 confirm that the products at issue
are covered by the tariff commitment under heading 02.10 of the EC Schedule.
XII. Findings and Conclusions
347. For the reasons set forth in this Report, the Appellate Body:
(a) regarding the terms of reference:
(i) upholds
 the Panel's finding, in paragraph 7. 37 of the Panel Reports, that the
Panel's terms of refe rence do not include EC Regulation 1871/2003 and
EC Regulation 2344/2003;
(ii) upholds the Panel's finding, in paragraph 7. 37 of the Panel Reports, that the
products covered by the Panel's terms of reference are those covered by the
specific measures at issue, namely, fro zen boneless chicken cuts impregnated
with salt, with a salt content of 1.2 to 3 per cent;
(b) regarding the interpretation of the term "salted" in the tariff commitment under
heading 02.10 of the EC Schedule in the light of Articles 31 and 32 of the Vienna
Convention:
(i) upholds the Panel's conclusion, in paragra ph 7.150 of the Panel Reports, that
"the ordinary meaning of the term 'sa lted' when considered in its factual
context indicates that the character of a product has been altered through the
addition of salt", and upholds
 the Panel's conclusion, in paragraph 7.151 of
the Panel Reports, that "there is nothing in the range of meanings comprising
the ordinary meaning of the term 'salte d' that indicates that chicken to which
salt has been added is not covered by the concession contained in
heading 02.10 of the EC Schedule";

(ii) finds that the term "salted", in heading 02.10 of the Harmonized System, does
not contain a requirement that salting must, by itself, ensure "preservation";
and consequently, upholds the Panel's finding, in paragraphs 7.245 and
7.331(c) of the Panel Reports, that the context of the term "salted" in the tariff
commitment under heading 02.10 of the EC Schedule "indicates that that
concession is not necessarily characterized by the notion of long-term
preservation", and finds
 that the scope of that tariff commitment is not limited
to products salted provided that it ensures long-term preservation;
(iii) upholds the Panel's conclusion, in paragra ph 7.328 of the Panel Reports, that
"the lack of certainty associated with the application of the criterion of long-
term preservation with respect to the concession contained in heading 02.10
of the EC Schedule ... could underm ine the object and purpose of security
and predictability, which lie at the heart of both the WTO Agreement and the
GATT 1994";
(iv) reverses
 the Panel's interpretation and application of the concept of
"subsequent practice" within the meaning of Article 31(3)(b) of the Vienna
Convention; and consequently, reverses the Panel's conclusions, in
paragraphs 7.289-7.290 and 7.303 of th e Panel Reports, that the European
Communities' practice of classifying, between 1996 and 2002, the products at
issue under heading 02.10 of the EC Schedule "amounts to subsequent
practice" within the meaning of Article 31(3)(b) of the Vienna Convention;
(v) modifies certain aspects of the Panel's interpretation of the concept
of "circumstances of [a treaty's] conclusion" within the meaning of Article 32
of the Vienna Convention ; but upholds
 the Panel's conclusion, in
paragraph 7.423 of the Panel Reports , that the supplementary means of
interpretation considered under Article 32 confirm that the products at issue
are covered by the tariff commitment under heading 02.10 of the
EC Schedule; and consequently
(c) upholds
 the Panel's findings, in paragraphs 7.424 and 8.1 of the Panel Reports, that:
(i) frozen boneless chicken cuts that have been impregnated with salt, with a salt
content of 1.2 to 3 per cent (the products at issue) are covered by the tariff
commitment under heading 02.10 of the EC Schedule;

(ii) EC Regulation 1223/2002 and EC Decision 2003/97/EC result in the
imposition of customs duties on the products at issue that are in excess of the
duties provided for in respect of the tariff commitment under heading 02.10
of the EC Schedule; and
(iii) accordingly, that the European Comm unities has acted inconsistently with the
requirements of Articles II:1(a) and II:1(b) of the GATT 1994 and, thus,
nullified or impaired benefits accruing to Brazil and Thailand; and
(d) finds
 that the Panel complied with its obligations under Article 11 of the DSU.
348. The Appellate Body recommends that the Dispute Settlement Body request the European
Communities to bring its measures, found in this Report and in the Panel Report as modified by this
Report to be inconsistent with the General Agreement on Tariff and Trade1994 , into conformity with
its obligations under that Agreement.

Signed in the original in Geneva this 27th day of August 2005 by:

Giorgio Sacerdoti
Presiding Member

 _________________________ _________________________
 Luiz Olavo Baptista A.V. Ganesan
 Member Member

Annex I

13 June 2005
 (05-2500)
 Original: English

Notification of an Appeal by the European Communities

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 13 June 2005, from the Delegation of the European
Commission, 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 , the European
Communities ("EC") hereby notifies its decision to a ppeal to the Appellate Body certain issues of law
covered in the reports of the Pa nel established in response to the requests from Brazil and Thailand in
the disputes European Communities – Customs Classifica tion of Frozen Boneless Chicken Cuts
(WT/DS269/R, WT/DS286/R) and certain legal inte rpretations developed by the Panel in these
reports.

The European Communities seeks review of:

1) The Panel’s conclusion that “Frozen boneless ch icken cuts that have been impregnated with
salt, with a salt content of 1.2% - 3% (the pr oduct at issue) are covered by the concession
contained in heading 02.10 of the EC Schedule” (para. 8.1(a) of the Panel Reports) and that,
as a consequence, EC Regulation No. 1223/2002 and EC Decision 2003/97/EC result in the
EC imposing customs duties in excess of those pr ovided for in the EC’s Schedule in respect
of products falling under heading 02.10 (para. 8.1( b) of the Panel Reports) such that the EC
has acted inconsistently with the requirement s of Articles II:1(a) and II:1(b) of the GATT
1994 (para. 8.1(c) of the Panel Reports).

2) The Panel’s conclusion is based on several elements of erroneous legal reasoning. Its
ultimate erroneous conclusion is that the term “salted” in heading 02.10 is not based on the
notion of preservation (para. 7.424). It reaches this erroneous conclusion by failing properly
to examine the term “salted” in heading 02.10 in light of the applicable rules of treaty
interpretation. The EC seeks review of all elements of this incorrect examination.

The Panel erroneously applies Article 31 of the Vienna Convention of the Law of Treaties . In
particular, but not necessarily exclusively, the Panel fails properly to apply the notions of:

a) Ordinary meaning (paras. 7.105; 7.114-7.115; 7.117; 7.140-7.151), in particular, by
taking into consideration what the Panel re ferred to as “the factual context for the
consideration of the ordinary meaning”;
b) Context (paras. 7.161-7.163; 7.171-7.173; 7.179-7.180; 7.189; 7.199-7.202; 7.205;
7.241; 7.245 ), in particular by failing to properly examine the immediate context of
the term “salted” in heading 02.10 and the relevant aspects of the Harmonised
System;

c) Subsequent practice (paras. 7.251; 7.253-7.256; 7.265-7.276; 7.284; 7.288-7.290;
7.298-7.299; 7.302-7.303), in particular, by misinterpreting the notion of
“subsequent practice” and by consid ering that the unilateral “practice”
1 of one party could have a bearing on a multilate rally agreed text and by wrongly analysing
the existence of “practice” at the EC and multilateral level.

d) Object and purpose of the treaty (paras . 7.316 to 7.328), in particular, the Panel’s
reliance on “security and predictability”.

e) To the extent that the Panel's conclusions are premised on an erroneous assessment
of the facts, the EC seeks review of that assessment pursuant to Article 11 of the
DSU.

3) The Panel erroneously applies Article 32 of the Vienna Convention (paras. 7.336 - 7.423). In
particular, but not necessarily exclusively, the Panel fails to examine properly the
circumstances of conclusion (paras. 7.340 et seq.) with a view to establishing the common
intention of the parties to the treaty in the sense that it:

a) wrongly limits its analysis to “the prevai ling situation in the European Communities”
ignoring the prevailing situation internationa lly (that is the multilateral context) and
the practice of other Members (para. 7.340; 7.421);

b) develops and applies an erroneous notio n of constructive knowledge (para. 7.346);

c) wrongly analyses prior practice of the Community, relying exclusively on or giving
undue probative value to and misinterpre ting, EC Commission Regulation 535/94,
classification between 1996-2002 and other irre levant post-1994 acts as part of the
circumstances of conclusion (paras. 7.359-7.364 7.365-7.370), thereby failing to give
proper consideration to prevailing EC law and practice throughout the Uruguay
Round, in particular in respect of case- law of the European Court of Justice
interpreting heading 02.10 of the Council Regulation establishing the Combined
Nomenclature (paras. 7.390-7.405), EC Explanatory Notes (7.411-7.413) and
ignoring the legal relationship between the different elements of EC law and practice;

d) To the extent that the Panel's conclusi ons are premised on an erroneous assessment of
the facts, the EC seeks review of that assessment pursuant to Article 11 of the DSU.

1 For the avoidance of doubt, the EC does not consider that the actions examined by the Panel can be qualified
as “practice”.

The provisions of the covered agreements which th e European Communities consider to have been
erroneously interpreted or applied by the Panel include:

• Heading 02.10 of the EC’s Schedule read in c onjunction with Article II :1(a) and II:1(b) of
the GATT 1994;

The EC also considers that the Panel erroneously in terpreted and applied Article 3.2 of the DSU read
in conjunction with the customary rules of interpre tation of public international law, in particular
Article 31 (3)(b) and Article 32 of the Vienna Convention and misapplied Article 11 of the DSU.

Annex II

27 June 2005
 (05-2790)
 Original: English

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 27 June 2005 , from the Delegation of Brazil, is being
circulated to Members.

 Pursuant to Articles 16 and 17 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (DSU) and Rule 23 of the Working Pr ocedures for Appellate Review, Brazil
hereby notifies its decision to appeal certain issu es of law and legal interpretation contained in the
Panel report in European Communities – Customs Classific ation of Frozen Boneless Chicken Cuts
(WT/DS269/R).

 Brazil seeks appellate review of:

 1) The Panel’s Term of Reference

a) The Panel's conclusion that EC Regulation No. 1871/2003 and EC Regulation No.
2344/2003 are measures outside
 the Panel’s terms of reference
1 based, inter alia, on its interpretation that Brazil’s Panel request was not broad enough to
include EC Regulation No. 1871/20 03 and EC Regulation No. 2344/2003. 2 This
conclusion was based on an erroneous interpretation of Articles 6.2 and 7 of the DSU.

b) The Panel’s conclusion that the product w ithin its terms of re ference is “frozen
boneless chicken cuts impregnated with a salt content of 1.2%-3%”.
3 In particular, the
Panel’s interpretation that the product at issue is determined by the measures
considered by the Panel to be within its terms of reference and not by the product
described in Brazil’s Panel request 4 is not consistent with Articles 6.2 and 7 of the
DSU.

1 Panel Report, paras. 6.15 and 7.32.
2 Panel Report, paras. 6.9, 6.13, 7.28 and 7.29.
3 Panel Report, paras. 6.16-6.18 and 7.36.
4 Panel Report, paras. 6.18 and 7.36.

 2) Contextual Interpretation of the EC Schedule: Harmonized System (HS)

a) The Panel’s conclusion that the evolution of the terms and structure of Chapter 2 of
the Harmonized System (HS) do not clarify the meaning of the concession contained
in heading 0210 of the EC Schedule, 5 specifically in view of its finding that the
evolution of the terms and structure does not indicate that the predecessor to HS
heading 0210 was characterized by the notion of “preparation” and not
“preservation”.6

b) The Panel’s conclusion that the HS Notes and Explanatory Notes do not clarify the
meaning of the concession contained in heading 0210 of the EC Schedule. 7 I n
particular, the finding that the HS Explanatory Notes to heading 0210 and Chapter 2
and the HS Notes to Chapter 16 do not he lp in the interpretation of heading 0210
because the terms “preparation” and “preservation” may not be mutually exclusive in
the context of heading 0210.
8

c) The Panel’s decision not
 to apply General Rule 3 in the interpretation of heading
0210 based on its improper reliance on and accep tance of the parties’ alleged position
that - within their analysis – the products at issue are not prima facie classifiable
under two or more headings.9

d) The Panel’s overall conclusion that the HS does not further clarify the interpretation
of the concession contained in heading 0210 of the EC Schedule, in so far as this
conclusion was based on the Panel’s flawed interpretations of the evolution of the
terms and structure of HS Chapter 2; th e HS [Explanatory] Notes to Chapter 2,
heading 0210 and Chapter 16; and the application of General Rule 3.10

Brazil requests that the Appellate Body reverse th e conclusions and findings listed above. In the
event the Appellate Body reverses the Panel’s deci sion not to apply General Rule 3, Brazil requests
that the Appellate Body complete the legal analysis by examining Brazil’s claim that the application
of General Rule 3 leads to the classification of the product under heading 0210 on the basis of the
Panel’s factual findings and the facts on the record.

The provisions of the WTO Agreement that Brazil cons iders the Panel to have erroneously interpreted
or applied are Articles 6.2 and 7 of the DSU and heading 0210 of the EC Schedule read in conjunction
with Articles II:1(a) and II:1(b) of the GATT 1994.

Annex III

27 June 2005
 (05-2791)
 Original: English

Notification of an Other Appeal by Thailand

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 27 June 2005, from the Delegation of Thailand, is being
circulated to Members.

 Pursuant to Article 17.4 of the Understa nding on Rules and Procedures Governing the
Settlement of Disputes (the "DSU") and Rule 23 of the Appellate Body's Working Procedures for
Appellate Review, Thailand hereby notifies its decision to appeal to the Appellate Body certain issues
of law covered in the Panel Report European Communities – Customs Classification of Chicken Cuts ,
WT/DS286/R, (the "Panel Report") and certain legal interpretations developed by the Panel in that
Report.

Thailand seeks appellate review of:

(a) the Panel's findings and conclusion set out in paragraphs 7.25–7.32, that EC
Regulation No. 1871/2003 and EC Regulation No. 2344/2003 are outside its terms of
reference;

(b) the Panel's findings and conclusion, set out in paragraphs 6.17, 6.18, 7.36 and 7.37,
that the products included in the Panel’s te rms of reference are limited to frozen
boneless chicken cuts impregnated with salt, with a salt content of 1.2%- 3%;

(c) the Panel's findings and conclusion, set out in paragraph 7.223, that all the
"Explanatory Notes" of the Harmonized System cited by Thailand are "non-binding"
and do not further clarify the interpretation of the concession in heading 02.10 of the
EC Schedule; and,

(d) the Panel's findings and conclusion, set out in paragraph 7.238, th at General Rule for
the Interpretation of the Harmonised System 3 ("General Rule 3") is not applicable.

The above findings and conclusions are based on the following legal errors:

- the Panel's error in determining the sc ope of its terms of reference with
respect to the measures at issue based on its interpretation, inter alia , that
Thailand's panel request was not broad enough in its formulation to include
EC Regulation No. 1871/2003 and EC Regulation No. 2344/2003. (paras.
7.16–7.32 of the Panel Report);

- the Panel's error in determining the sc ope of its terms of reference with
respect to the products at issue by inte rpreting that the product at issue is
determined by the measures the Panel cons idered to be within its terms of
reference and not by the product described by Thailand in its request for the
establishment of a panel. (paras. 7.36 and 7.37 of the Panel Report);

- the Panel’s error in applying Article 31 of the Vienna Convention on the Law
of Treaties with respect to its analysis of relevant aspects of the Harmonized
System for the interpretation of the concession in heading 0210 of the EC
Schedule. In particular, Thailand cons iders that the Panel erred in finding
that the HS Explanatory Notes to head ing 02.10 and Chapter 2 and the Note
to Chapter 16 are not helpful to clarify the ordinary meaning of the term
"salted" in the concession contained in heading 02.10 of the EC Schedule.
Thailand also considers that the Panel incorrectly characterised the Note to
Chapter 16 as an Explanatory Note when it is in fact a Chapter Note that
forms part of the Harmonized System and is therefore binding. (paras. 7.206–
7.223 of the Panel Report); and

- the Panel's error in deciding not to apply General Rule 3. The Panel
improperly relied on the parties' position th at – in their view – the product at
issue does not fall prima facie under two or more head ings and consequently
erred in failing to provide its own anal ysis of whether the product at issue
prima facie falls under two or more headings. (paras. 7.224–7.241.)

Thailand requests the Appellate Body to review the above findings or conclusions of the
Panel. The provisions of the Marrakesh Agreement Establishing the WTO that Thailand considers the
Panel to have erroneously interp reted or applied are heading 0210 of the EC Schedule read in
conjunction with Article II:1(a) and II:1(b) of the GATT 1994, as well as Article 3.7, 6.2 and Article 7
of the DSU.

Annex IV

CHAPTER 2 OF THE HARMONIZED SYSTEM (1992 VERSION)

2 MEAT AND EDIBLE MEAT OFFAL
0201 Meat of bovine animals, fresh or chilled
0201.10 -Carcasses and half-carcasses
0201.20 -Other cuts with bone in
0201.30 -Boneless
0202 Meat of bovine animals, frozen.
0202.10 -Carcasses and half-carcasses
0202.20 -Other cuts with bone in
0202.30 -Boneless
0203 Meat of swine, fresh, chilled or frozen.
 -Fresh or chilled :
0203.11 --Carcasses and half-carcasses
0203.12 --Hams, shoulders and cu ts thereof, with bone in
0203.19 --Other
 -Frozen :
0203.21 --Carcasses and half-carcasses
0203.22 --Hams, shoulders and cu ts thereof, with bone in
0203.29 --Other
0204 Meat of sheep or goats, fresh, chilled or frozen.
0204.10 -Carcasses and half-carcasses of lamb, fresh or chilled
 -Other meat of sheep, fresh or chilled :
0204.21 --Carcasses and half-carcasses
0204.22 --Other cuts with bone in
0204.23 --Boneless
0204.30 -Carcasses and half-carcasses of lamb, frozen
 -Other meat of sheep, frozen :
0204.41 --Carcasses and half-carcasses
0204.42 --Other cuts with bone in
0204.43 --Boneless
0204.50 -Meat of goats
0205 Meat of horses, asses, mules or hinnies, fresh, chilled or frozen.
0205.00 Meat of horses, asses, mules or hinnies, fresh, chilled or frozen.
0206 Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies,
fresh, chilled or frozen.
0206.10 -Of bovine animals, fresh or chilled
 -Of bovine animals, frozen :
0206.21 --Tongues
0206.22 --Livers
0206.29 --Other
0206.30 -Of swine, fresh or chilled
 -Of swine, frozen :
0206.41 --Livers
0206.49 --Other
0206.80 -Other, fresh or chilled
0206.90 -Other, frozen

2 MEAT AND EDIBLE MEAT OFFAL
0207 Meat and edible offal, of the poultry of heading No. 01.05, fresh, chilled or frozen.
0207.10 -Poultry not cut in pieces, fresh or chilled
 -Poultry not cut in pieces, frozen:
0207.21 --Fowls of the species Gallus domesticus
0207.22 --Turkey
0207.23 --Ducks, geese and guinea fowls
 -Poultry cuts and offal (Including livers) , fresh or chilled
0207.31 --Fatty livers of geese or ducks
0207.39 --Other
 -Poultry cuts and offal other than livers, frozen:
0207.41 --of fowls of the species Gallus domesticus
0207.42 --of turkeys
0207.43 --Of ducks, geese or guinea fowls
0207.50 --Poultry livers, frozen
0208 Other meat and edible meat offal, fresh, chilled or frozen.
0208.10 -Of rabbits or hares
0208.20 -Frogs' legs
0208.90 -Other
0209 Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted,
fresh, chilled, frozen, salted, in brine, dried or smoked.
0209.00 Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh,
chilled, frozen, salted, in brine, dried or smoked.
0210 Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and
meals of meat or meat offal.
 -Meat of swine :
0210.11 --Hams, shoulders and cu ts thereof, with bone in
0210.12 --Bellies (streaky) and cuts thereof
0210.19 --Other
0210.20 -Meat of bovine animals
0210.90 -Other, including edible flours and meals of meat or meat offal