EUROPEAN COMMUNITIES - MEASURES AFFECTING BUTTER PRODUCTS
Document: Original: English EUROPEAN COMMUNITIES - MEASURES AFFECTING BUTTER PRODUCTS Request for the Establishment of a Panel by New Zealand
Date: 7 November 1997
Document codes: WT/DS72/2
Complainant: New Zealand
Respondent: EU
Third parties: U.S.
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. II:1(b), X:1, XI:1  GATT 1994Art. 3.3  Import LicensingArt. 2.2, 2.9, 2.11, 2.12  Technical Barriers to Trade (TBT)

EUROPEAN COMMUNITIES - MEASURES AFFECTING
BUTTER PRODUCTS
Request for the Establishment of a Panel by New Zealand
The following communication, dated 6 November 1997, from the Permanent Mission of
New Zealand to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2
of the DSU.
My authorities have asked me to submit the following request on behalf of New Zealand for
consideration at the next meeting of the Dispute Settlement Body.
The Commission of the European Communities (EC) has decided that New Zealand butter
manufactured by the Ammix butter-making process and the spreadable butter-making process is not
"manufactured directly from milk or cream" and, pursuant to this decision, has excluded such butter
from eligibility for New Zealand's country-specific tariff quota (CSTQ) established by the EC's WTO
Schedule (annexed toGeneral Agreement onTariff and Trade 1994(the GATT1994)). These decisions,
and related actions, were contained, though not necessarily exclusively, in the following documents:
(i) a letter (dated 25 July 1996) from the United Kingdom's Customs and Excise
Department (HMC&E) to KPMG which attached correspondence between the Director
of DG VI of the European Commission and a Director at the European Court of
Auditors;
(ii) a letter (dated 23 January 1997) from Dr. Franz Fischler, the European Commissioner
for Agriculture, to Dr. Lockwood Smith, the New Zealand Minister for International
Trade; and
(iii) a letter (dated 24 January 1997) from Sir Leon Brittan, the Vice-President of the
European Commission, to Dr. Lockwood Smith, the New Zealand Minister for
International Trade.
New Zealand considers that, by reason of the EC decisions that New Zealand butter manufactured
by the Ammix butter-making process and the spreadable butter-making process is not eligible for
New Zealand's CSTQ and its related actions, the EC has nullified or impaired benefits accruing to
New Zealand, within the meaning of Article XXIII:1(a) of the GATT 1994, as a result of its failure
to carry out its obligations under the following provisions:
(i) Article II:1(b) of the GATT 1994;
(ii) Article X:1 of the GATT 1994;

(iii) Article XI:1 of the GATT 1994;
(iv) Article 2, paragraphs 2, 9, 11 and 12 of the Agreement on Technical Barriers to Trade
(the TBT Agreement); and
(v) Article 3, paragraph 3 of the Agreement on Import Licensing Procedures (the ILP
Agreement).
New Zealand also considers that these decisions and related actions have otherwise nullified
or impaired benefits accruing to New Zealand directly or indirectly under the Marrakesh Agreement
Establishing the World Trade Organization pursuant to Article XXIII:1 (b) of the GATT 1994.
In a communication dated 3 April 1997 (WT/DS72/1), the Government of New Zealand requested
consultationswiththeEC pursuanttoArticle4 of theUnderstandingonRules andProcedures Governing
the Settlement of Disputes (DSU), Article 14 of the TBT Agreement, Article 6 of the ILP Agreement
and Article XXII:1 of the GATT 1994 with regard to the decisions by the EC that New Zealand butter
manufactured by the Ammix butter-making process and the spreadable butter-making process is not
"manufactured directly from milk or cream" and with regard to its related actions in excluding such
butter from eligibility for New Zealand's CSTQ established by the EC's WTO Schedule. Consultations
were held on 29 April 1997, but did not result in a resolution of the dispute.
Accordingly, New Zealand requests the establishment of a panel pursuant to Article 6 of the
DSU, Article 14 of the TBT Agreement, Article 6 of the ILP Agreement and Article XXIII:2 of the
GATT 1994 to examine the decisions and subsequent actions taken by the EC, with the standard terms
of reference as set out in Article 7 of the DSU.
As indicated above, New Zealand asks that this request for the establishment of a panel be
considered at the next meeting of the Dispute Settlement Body.